Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q1 2017 Earnings Presentation
21 slides from Avis Budget's earnings presentation, May 4, 2017
Slide 1: First Quarter 2017 Earnings Call
First Quarter 2017 Earnings Call May 4, 2017 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (402) 998-0968 Passcode: 2995545
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: Larry De Shon, Chief Executive Officer
Larry De Shon Chief Executive Officer
Slide 4: First Quarter Highlights
FIRST QUARTER 2017 Challenges Continued into First Quarter 2017 HIGHLIGHTS Elevated industry fleet levels continued to put pressure on pricing Volume increased in the Americas and internationally Delayed seasonal upswing in used car values caused per-unit fleet costs to increase Took cost-re
Slide 5: Long-Term Margin Growth
LONG-TERM MARGIN Significant Opportunity GROWTH for Margin Improvement Profitable Revenue Growth Operational Efficiencies Demand-Fleet-Pricing Manpower planning and Longer-term yield management shuttling initiatives opportunities remain system progressing delivering benefits consistent with our
Slide 6: Outlook
OUTLOOK Expect First Quarter Challenges to Abate over the Year Industry fleet levels tightened in key leisure markets around Easter Leisure demand remains solid Airline capacity is increasing We have a strong team in place focused on expanding margins 6
Slide 7: David Wyshner, President and Chief Financial Officer
David Wyshner President and Chief Financial Officer
Slide 8: First Quarter 2017 Results
FIRST QUARTER 2017 RESULTS Results Negatively Impacted by Challenging Pricing Environment and Higher Fleet Costs ($ in millions) Revenue Adjusted EBITDA We faced pricing headwinds in both our Americas and $1,881 International segments -2% $1,839 Residual-value pressures had a significant impact on A
Slide 9: Americas
AMERICAS First Quarter Results Pricing declined 4% year-over-year ‒ Both leisure and commercial pricing saw similar declines Leap-year change reduced volume 1% Per-unit fleet costs increased 7% Adjusted EBITDA declined to a $20 million loss (a) Americas Revenue Drivers Average Total 1% Daily
Slide 10: International
INTERNATIONAL First Quarter Results Revenue grew 2% in the first quarter, and 3% in constant currency Easter shift reduced Inbound demand to Europe was strong Adjusted EBITDA by more than $10 million in Highly competitive pricing environment in Europe the first quarter, primarily impacting A
Slide 11: Fleet Costs
FLEET COSTS Americas Per-Unit Fleet Costs Expected to Increase 2% to 5% in 2017 (a) Monthly Per-Unit Fleet Costs Residual values are now (Americas) expected to decline $333 three to four points for $312 $317-$327 the full year +7% $311 +2-5% Alternative disposition channels accounted for 45% of risk
Slide 12: Balance Sheet
BALANCE SHEET Strong Liquidity Position $5 billion of available liquidity worldwide (a) Net corporate leverage of 4.0x We continue to target net corporate leverage Completed €250 million offering of Senior Notes of 3.0 - 4.0x(a) due 2025 at an interest rate of 4.5% and amended our senior credi
Slide 13: Capital Allocation
CAPITAL ALLOCATION Consistent Use of Adjusted Free Cash Flow Our priorities for deploying adjusted free cash flow continue to be share repurchases and tuck-in Since 2013, we’ve acquisitions returned more than a billion dollars to Repurchased 1.5 million shares at a cost of shareholders, buying $
Slide 14: 2017 Outlook
2017 OUTLOOK 2017 Estimates (a) (b) ($ in millions, except EPS) Projection Growth vs. 2016 Diluted share count of approximately 84 to 86 Revenue $8,800 – 8,950 2% million, a reduction of roughly 10% year-over- Adjusted EBITDA 800 – 880 0% year (c) Non-vehicle D&A 205 Non-GAAP effective tax Interest
Slide 15: Adjusted Free Cash Flow
ADJUSTED FREE CASH FLOW 2017 to Be Sixth Straight Year with Adjusted Free Cash Flow of more than $450 Million ($ in millions) 2017E 2016 (a) Adjusted pretax income $395 – $475 $441 (b) Plus: Non-vehicle D&A 205 194 Less: Capital expenditures (200) – (210) (192) Less: Cash taxes (55) – (75) (60) Plus
Slide 16: Currency Effects
CURRENCY EFFECTS Exchange-Rate Impacts (a) Year-over-Year Effect of Currency Movements (in millions) First Second Third Fourth Full Quarter Quarter Quarter Quarter Year Revenue ($5) ($33) ($33) ($1) ($72) (b) Adjusted EBITDA $18 ($0) ($8) $3 $13 Expect a $13 million positive year-over-year impact on
Slide 17: Summary
SUMMARY Updated Projections Reflect Difficult First Quarter Do not expect the unusually soft market conditions to continue We will continue to manage our fleet efficiently and costs aggressively Strategic initiatives are generating benefits Delivering adjusted free cash flow and deploying it
Slide 18: Avis Budget Group
avis budget group
Slide 19: 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 20: Glossary
GLOSSARY Reconciliation of net corporate debt (in millions): March 31, 2017 Corporate debt $ 3,980 Less: Cash and cash equivalents 923 Net corporate debt $ 3,057 Reconciliation of net income (loss) to Adjusted EBITDA (in millions): Latest Twelve Months Ended March 31, 2017 2016 Net income $ 107 $ 27
Slide 21: Glossary
GLOSSARY Reconciliation of net income (loss) to adjusted net income (loss) (in millions, except per-share amounts): Three Months Ended Year Ended March 31, December 31, 2017 2016 2016 2015 Net income (loss) $ (107) $ (51) $ 163 $ 313 Add certain items, net of tax: Acquisition-related amortization ex