Hertz Global Holdings, Inc · NASDAQ:HTZ
Hertz Global — Q2 2018 Earnings Presentation
23 slides from Hertz Global's earnings presentation, Aug 7, 2018
Slide 1: 2Q 2018 Earnings Call
2Q 2018 Earnings Call August 7, 2018 8:30 am ET 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2Q Certain statements made within this presentation contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent uncertain
Slide 3: Key Metrics and Non-GAAP Measures
Key Metrics and Non-GAAP Measures 2Q THE FOLLOWING KEY METRICS AND NON-GAAP1 MEASURES WILL BE USED IN THE PRESENTATION: Adjusted corporate EBITDA Total RPD Adjusted corporate EBITDA margin Total RPU Adjusted pre-tax income (loss) Net depreciation per unit per month Adjusted net income (loss) Vehicle
Slide 4: Agenda
Agenda 2Q BUSINESS Kathryn Marinello OVERVIEW President & Chief Executive Officer Hertz Global Holdings, Inc. FINANCIAL RESULTS Tom Kennedy OVERVIEW Chief Financial Officer Hertz Global Holdings, Inc. 4
Slide 5: U.S. Operational Turnaround: Gaining Traction
U.S. Operational Turnaround: Gaining Traction 2Q U.S. RAC (YoY quarterly results1) Revenue Total RPU Vehicle Utilization (bps) Net Monthly Depreciation per Unit 1Revenue is defined as total revenue excluding ancillary retail vehicle sales revenue. 5
Slide 6: U.S. Operational Turnaround: Creating Value
U.S. Operational Turnaround: Creating Value 2Q Bolstering the Foundation for Sustainable Growth and Innovation PRIORITIES Unlocking Driving Leading Leveraging asset value operational growth through technology Hertz's iconic brand The Most Sustainable Path to Creating Value is to Continually Invest i
Slide 7: 2017 Investments: Laying the Foundation
2017 Investments: Laying the Foundation 2Q Catalysts to Improving Trends in 2018 and Beyond • Integrated, AI-based demand and fleet forecasting system • Fully rolled-out fleet and pricing optimization system • Car-class mix that customers prefer • Broad roll out of Ultimate Choice • Development of b
Slide 8: 2018 Investments: Investing in the Future
2018 Investments: Investing in the Future 2Q Catalysts to Improving Trends in 2019 and Beyond • Brand marketing campaigns launch • Machine-learnings from pricing and demand & fleet forecasting modules • Stepping up field recruiting and training • Centralizing maintenance to reduce out-of-service fle
Slide 9: 2019 Investments: Optimizing for Growth
2019 Investments: Optimizing for Growth 2Q Catalysts to Improving Trends in 2020 and Beyond • Site Optimization Initiative roll out continues • Systems field training • Legacy technology architecture updated • Hertz Digital apps rolled out • Fall 2019 core systems launch ◦ Fleet management and accou
Slide 10: Our Path Forward: Achieving Growth and Productivity
Our Path Forward: Achieving Growth and Productivity 2Q Performance Objectives – Indicative Trend • Revenue Growth • Improved fleet utilization and depreciation expense management • Productivity • Lower technology spend Adjusted Corporate EBITDA 2017 Revenue Net Dep / Retail Ops Tech Reinvest / 2018
Slide 11: 2Q Quarterly Overview
2Q Quarterly Overview Tom Kennedy CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc. NYSE: HTZ 1111
Slide 12: 2Q:18 Consolidated Results
2Q:18 Consolidated Results 2Q (in $M USD, except per share data) 2Q:18 2Q:17 YoY GAAP Results Results Inc/(Dec) Total revenues $2,389 $2,224 7% Income (loss) before income taxes $(86) $(245) (65)% Net income (loss) $(63) $(158) (60)% Diluted earnings (loss) per share $(0.75) $(1.90) (61)% Weighted a
Slide 13: 2Q:18 U.S. RAC Revenue Performance
2Q:18 U.S. RAC Revenue Performance 2Q U.S. RAC (YoY quarterly results1) 2Q:18 Performance Drivers Revenue Days Total RPD • T&M rate increased 3% excluding value-added service revenues ◦ Continuing to focus on improving value-added service sales tactics, product design and digital capabilities to re-
Slide 14: 2Q:18 U.S. RAC Fleet
2Q:18 U.S. RAC Fleet 2Q U.S. RAC (YoY quarterly results1) Continued Focus on Optimizing Fleet Vehicle Utilization (bps) Capacity • Total capacity increased 6% YoY, aligned with improving demand trends leading into peak season ◦ Excluding ride-hailing, capacity increased 3% YoY • Higher vehicle utili
Slide 15: 2Q:18 U.S. RAC Net Monthly Depreciation Per Unit
2Q:18 U.S. RAC Net Monthly Depreciation Per Unit 2Q +27% +1% (6)% (13)% (19)% Year-Over-Year Trend Continues to Improve • Incremental fleet costs from 2Q:17 re-balancing activity did not reoccur • Stabilizing residual values YoY - expecting tougher comps in 2H:18 • Enhanced process for identifying a
Slide 16: 2Q:18 U.S. RAC Fleet Sales Initiative
2Q:18 U.S. RAC Fleet Sales Initiative 2Q Non-Program Vehicle Focused on Driving More Sales Disposition Channel Mix Through Alternative Channels • Mix of unit sales through highest-return retail channel grew 900 bps in 2Q:18 • 76% of total units sold through higher yielding alternative channels compa
Slide 17: 2Q:18 International RAC
2Q:18 International RAC 2Q Key Metrics1 Performance Overview2 2Q:18 YoY • Revenue increased 2% YoY excluding foreign exchange 2% ◦ Revenue increased 4% YoY excluding Brazil3 and foreign exchange ̶ Total RPD was flat YoY 1% ̶ Transaction days increased 4% YoY • Vehicle utilization decrease primarily
Slide 18: Liquidity / Balance Sheet Overview
2Q LIQUIDITY / BALANCE SHEET OVERVIEW Tom Kennedy CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc. NYSE: HTZ 1818
Slide 19: 2Q:18 Liquidity Overview and Financing Activities
2Q:18 Liquidity Overview and Financing Activities 2Q Corporate Liquidity at June 30, 2018 • Decrease in liquidity from Q1 level to $1.2 billion $ in millions Senior Letter of Credit reflects seasonal upsizing in fleet and working RCF Facility Total capital Commitments$ 865 $ 302 $ 1,167 ◦ Liquidity
Slide 20: Corporate Debt Maturity Profile
Corporate Debt Maturity Profile 2Q June 30, 2018 Hertz Global Non-Vehicle Debt Maturity Profile1 Senior Notes Senior Second Priority Secured Notes Term Loan Senior RCF and Stand Alone L/C facility $14 in $M USD $1,167 $14 $14 $7 $14 1 Excludes $27M of promissory notes due 2028 and $11M of other non-
Slide 21: First Lien Financial Maintenance Covenant
First Lien Financial Maintenance Covenant 2Q Consolidated First Lien Leverage Ratio as of June 30, 2018 was 1.60x $ in millions Senior RCF Facility and L/C Facility Commitments $1,167 Outstanding Letters of Credit - 665 Term Loan Outstanding + 681 Unrestricted Cash1 - 500 First Lien Secured Net Debt
Slide 22: 3Q:18 U.S. RAC Preliminary Outlook
3Q:18 U.S. RAC Preliminary Outlook 2Q July revenue grew 11% versus prior year • Total RPD increased 4% YoY • Transaction days increased 7% YoY • Total RPU increased nearly 5% YoY • Excluding TNC, capacity grew approximately 3% with an approximate 70 bps improvement in utilization Early indications s
Slide 23: Q&A
2Q Q&A NYSE: HTZ 2323
Hertz Global Holdings — Q2 2018 Earnings Presentation on 6ix