Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q4 2014 Earnings Presentation
27 slides from Avis Budget's earnings presentation, Feb 19, 2015
Slide 1: Fourth Quarter 2014 Earnings Call
Fourth Quarter 2014 Earnings Call February 19, 2015 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (203) 369-1919 Passcode: Avis Budget
Slide 2: Forward-Looking Statements
FORWARD- LOOKING Statements about future results made in this presentation constitute forward-looking STATEMENTS statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include projections. These statements are based on current expectati
Slide 3: Ron Nelson, Chairman and Chief Executive Officer
Ron Nelson Chairman and Chief Executive Officer
Slide 4: Full-Year 2014 Highlights
FULL-YEAR 2014 HIGHLIGHTS Record Full-Year Results Increased North America volume and pricing for second consecutive year Expanded our global footprint organically and Share price increased through acquisitions 64% Reported record revenue, Adjusted EBITDA and Company’s stock added earnings per
Slide 5: North America – Pricing
NORTH AMERICA – Positive Pricing Trends PRICING Continued in Fourth Quarter North America Pricing(a) +1% +1% Full-year pricing +½% increased 2% in constant currency Approximately 75% of Commercial Leisure Total our corporate contract renewals in 2014 were at flat or higher rates Strategic efforts
Slide 6: North America – Volume
NORTH AMERICA – Robust Demand Environment VOLUME Rental days increased 6% in the fourth quarter Ancillary revenue per day increased 5% Strong local market growth driven by general-use Shifted volume toward higher-margin leisure and commercial rentals proprietary websites and mobile apps Strate
Slide 7: Budget Licensee Acquisition
BUDGET LICENSEE Integration Well Under Way ACQUISITION Completed the acquisition of our Budget licensee for Southern California and Las Vegas in November ‒ Allows us to operate directly at LAX and Burbank Transaction expected to airports add roughly $100 million of revenue and $25 Several early
Slide 8: Payless
PAYLESS Payless Acquisition Has Expanded Our Brand Portfolio Acquired Payless in July 2013 ‒ Extended Payless to 50 additional markets ‒ Revenue more than doubled in 2014, including a Payless rentals generate more than $10 of 9% increase in price ancillary revenue per day on average Key strategi
Slide 9: Zipcar
ZIPCAR Global Leader in Car Sharing Growth in usage revenue, pricing and membership Expanded Zipcar to additional airport locations Available at over 400 universities in North America Expect to launch Zipcar in Australia in 2015 Piloted one-way vehicle availability in Boston Launched Zipca
Slide 10: International
INTERNATIONAL Increased Revenues, Earnings and Margins International Adjusted EBITDA grew despite macroeconomic challenges Key operational accomplishments: Avis was named “World’s Leading Car ‒ European Budget volumes increased 19% Rental Company” at the ‒ Ancillary revenue per day increased 13%
Slide 11: 2015 Outlook
2015 OUTLOOK Expect to Deliver Record Results for 2015 Project record revenue in North America ‒ Full-year pricing projected to increase approximately 2% in constant currency $1 billion Adjusted EBITDA target remains, ‒ Volume expected to grow 5-7% but currency headwinds are significant Internat
Slide 12: David Wyshner, Chief Financial Officer
David Wyshner Senior Executive Vice President and Chief Financial Officer
Slide 13: Fourth Quarter 2014 Results
FOURTH QUARTER 2014 Double-Digit Adjusted EBITDA Growth RESULTS ($ in millions) Revenue Adjusted EBITDA Currency movements impacted revenue $1,887 growth by minus-three $1,849 +2% $129 points +13% $114 Fourth quarter earnings per share increased 53% 6.8% to $0.23, excluding margin certain items 6.2%
Slide 14: Fourth Quarter 2014 Results – North America
FOURTH QUARTER 2014 Record Quarterly Revenue RESULTS – NORTH AMERICA (a) North America Revenue Drivers Rental Days Average Daily Rate Total Revene +7% Ancillary revenue per +6% (b) day increased 5% +1% Rental Days Average Total Daily Rate Revenue (a) Year-over-year growth, excluding Zipcar (b) Exclu
Slide 15: Fourth Quarter 2014 Results – North America
FOURTH QUARTER 2014 Volume and Pricing Increased RESULTS – NORTH AMERICA Fourth Quarter Full-Year Average Average (year-over-year changes) Rental Days Rental Days Daily Rate Daily Rate Adjusted EBITDA Leisure +7% +1% +8% +2% increased 9% to $81 million Commercial +5% +½% +5% +2% Total +6% +1% +7% +2
Slide 16: Fourth Quarter 2014 Results – International
FOURTH QUARTER 2014 Double-Digit Adjusted EBITDA Growth RESULTS – INTERNATIONAL (a) International Revenue Drivers Total Revenue per Rental Days Day Currency Effects Total Revenue Currency movements +1% Currency Total had a $41 million Rental Days Effects Revenue negative impact on revenue Total Reve
Slide 17: Fourth Quarter 2014 Results – Truck Rental
FOURTH QUARTER 2014 Restructuring Delivering RESULTS – Positive Earnings Growth TRUCK RENTAL Average Daily Rate Utilization Revenue (a) per Vehicle Key Truck Rental Metrics 11% Average fleet is 10% smaller than a year 7% ago Revenue unchanged despite lower average fleet Average Daily Rate Utilizatio
Slide 18: Fleet Costs
FLEET COSTS Fleet Costs in Line with Recent Expectations Monthly Per-Unit Fleet Costs (North America) $317 $306 +4% $313 Sold more than 25% of $299 +5% our risk vehicles through alternative disposition channels in 2014 Risk cars expected to be approximately 50% of our North America fleet in 2015 Fou
Slide 19: Driving Organizational Efficiencies
DRIVING ORGANIZATIONAL Migrating to a Global Support Structure, EFFICIENCIES Seizing Cost-Saving Opportunities Capitalizing on the global scale of our organization Focus is on transforming internal support structures to benefit our multi-national operations Started at the end of 2014 Will ma
Slide 20: Balance Sheet
BALANCE SHEET Strong Liquidity Position $6 billion of available liquidity at year-end Net corporate leverage of 3.2x (a) – Increased slightly due to acquisition of Quarter-end cash Budget Southern California licensee balance of $624 million Issued $650 million of asset-backed debt in January w
Slide 21: Cash Flow Generation and Deployment
CASH FLOW GENERATION Significant Free Cash Flow AND DEPLOYMENT Generated more than $450 million of free cash flow, or over $4.00 per share, in 2014 Share repurchases Cash taxes were $45 ‒ Repurchased $300 million of stock in 2014, million in 2014 including $90 million in the fourth quarter Repur
Slide 22: 2015 Outlook
2015 OUTLOOK 2015 Estimates (a) (b) ($ in millions, except EPS) Projection Growth vs. 2014 Expect cash taxes of $50 Revenue $8,800 4% to $75 million Adjusted EBITDA 900 – 1,000 8% Expect capital expenditures of Non-vehicle D&A 165 approximately $200 million Interest expense 200 Pretax income 535 – 6
Slide 23: Capital Allocation
CAPITAL ALLOCATION Uses of Free Cash Flow Two priorities for free cash flow continue to be tuck- in acquisitions and share repurchases Tuck-in acquisition targets remain: Purchased our Avis and ‒ Avis Budget Group licensees in or near where we Budget licensee for operate corporately Scandinavia
Slide 24: Summary
SUMMARY Well-Positioned for a Record 2015 Focused on achieving higher prices and greater levels of profitability Expect further benefits from fleet optimization and greater use of alternative disposition channels Continued roll-out of integrated yield-management system in North America and int
Slide 25: Avis Budget Group
avis budget group
Slide 26: Glossary
GLOSSARY This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below reasons we present these non-GAAP financial measures, a description of what they represent and a reconciliation to the most comparable
Slide 27: Glossary
GLOSSARY Reconciliation of Net Corporate Debt (in millions): March 31, June 30, September 30, December 31, 2014 2014 2014 2014 Corporate debt $ 3,696 $ 3,388 $ 3,335 $ 3,420 Less: Cash and cash equivalents 841 537 713 624 Net corporate debt $ 2,855 $ 2,851 $ 2,622 $ 2,796 Reconciliation of Adjusted