Slide 1: Second Quarter 2015 Earnings Call
Second Quarter 2015 Earnings Call August 4, 2015 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (402) 280-1650 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: Ron Nelson, Chairman and Chief Executive Officer
Ron Nelson Chairman and Chief Executive Officer
Slide 4: Second Quarter 2015 Highlights
SECOND QUARTER 2015 Strong Adjusted EBITDA and EPS Growth HIGHLIGHTS (a) Americas pricing declined 1% year-over-year Per-unit fleet costs declined 2% (a) International Adjusted EBITDA grew 42% and As expected, pricing comparisons improved margins expanded month by month Increased our share repurchas
Slide 5: Americas – Pricing: Year-over-Year Pricing Trends Improved
AMERICAS – PRICING Year-over-Year Pricing Trends Improved as the Second Quarter Progressed Payless pricing increased 5% in the Avis and Reported second quarter Budget U.S. Currency Payless Mix Other Americas (a) Pricing Effects Effect Effects Pricing (1%) (0.8%) (0.3%) (0.2%) (2%) (a) Primarily Cana
Slide 6: Americas – Pricing: Proven Ability to Achieve Pricing Growth
AMERICAS – PRICING Proven Ability to Achieve Pricing Growth Two-Year Change in U.S. Pricing 4% 4% Year-over-year pricing comparisons are easier in the second half First Half Full Year 2015 vs. 2013 2015E vs. 2013 Pricing Gains Are Unlikely to Be Linear 6
Slide 7: Americas – Volume: Second Quarter Volume Driven by Strong Leisure Demand
AMERICAS – VOLUME Second Quarter Volume Driven by Strong Leisure Demand Rental days increased 3% in the second quarter ‒ Reflects organic growth and acquisition of Budget Southern California Shifted more than 150 basis points of volume International-inbound volume increased 7% to our proprietary cha
Slide 8: International: 12% Constant-Currency Revenue Growth
INTERNATIONAL 12% Constant-Currency Revenue Growth Modest demand growth across Europe Pricing was challenged due to competitive pressures (a) Ancillary revenue per day increased 6% Integrations of (b) Scandinavia licensee Per-unit fleet costs declined 12% and Maggiore are going as planned Volume gre
Slide 9: Zipcar is Well-Positioned for Future Growth
ZIPCAR Zipcar is Well-Positioned for Future Growth Continuing to expand to new cities and additional universities ONE>WAY pilot has been well recieved Zipcar continues to Introduced “Instant Join” technology reduce car ownership in urban centers Increased member satisfaction 9
Slide 10: Capital Allocation: Use of Free Cash Flow Has Shifted Toward Share Repurchases
CAPITAL ALLOCATION Use of Free Cash Flow Has Now Shifted Toward Share Repurchases Our priorities for free cash flow continue to be share repurchases and tuck-in acquisitions Repurchased $115 million of stock in the first half of Acquired full ownership 2015 of our Avis and Budget licensee in Brazil
Slide 11: 2015 Outlook: Narrowed Full-Year Adjusted EBITDA Projections
2015 OUTLOOK Narrowed Full-Year 2015 Adjusted EBITDA Projections Americas Full-year pricing projected to be largely unchanged in constant currency Volume expected to grow 4% to 5% Per-unit fleet costs expected to decline by up to 3% Increasing fleet utilization International Volume expected to grow
Slide 12: Second Quarter Earnings Growth Projected to Lead to Record Year
HIGHLIGHTS Second Quarter Earnings Growth Projected to Lead to Record Year Encouraging summer trends ‒ Growing U.S. demand ‒ Firm vehicle residual values ‒ Strong European volumes ‒ Rigorous cost control globally Deploying more free cash flow to share repurchases Expect to achieve record earnings in
Slide 13: David Wyshner, Chief Financial Officer
David Wyshner Senior Executive Vice President and Chief Financial Officer
Slide 14: Second Quarter 2015 Results: Expanded Margins
SECOND QUARTER 2015 Expanded Margins in Second Quarter RESULTS ($ in millions) Revenue Adjusted EBITDA Second quarter earnings $2,194 $2,173 (1%) per share increased 24% $227 to $0.84, excluding $213 +7% certain items +5% excluding 9.7% 10.4% currency margin margin Second Quarter Second Quarter Seco
Slide 15: Second Quarter 2015 Results – Americas: Record Quarterly Revenue
SECOND QUARTER 2015 Record Quarterly Revenue RESULTS – AMERICAS (a) Americas Revenue Drivers Rental Days Average Daily Rate Total Revene +3% Ancillary revenue per (b) day increased 4% Adjusted EBITDA Average +1% increased 3% due to Daily Rate higher rental volumes and Rental Days Total increased fle
Slide 16: Second Quarter 2015 Results – International
SECOND QUARTER 2015 Increased Margins Despite Pricing Pressures RESULTS – INTERNATIONAL (a) International Revenue Drivers Excluding Reported Currency movements Maggiore had a $110 million negative impact on Total revenue +12% +6% revenue and $17 million negative Pricing - 5% - 4% impact on Adjusted
Slide 17: Demand – Fleet – Pricing: Roll-Out Proceeding Well
DEMAND – FLEET – Roll-Out Proceeding Well PRICING Americas Pricing robotic deployed in more than 130 U.S. and Canadian markets State-of-the-art yield-management Demand forecaster being piloted throughout 2015 initiative began in 2013 Full system expected to begin piloting around year-end Internation
Slide 18: Fleet Costs Have Been Better than Anticipated
FLEET COSTS Fleet Costs Have Been Better than Anticipated Monthly Per-Unit Fleet Costs (Americas) $302 (2%) $295 $310 $300- $310 Americas fleet expected 0-(3%) to be approximately 50% risk in 2015 Selling more than 35% of our risk vehicles through alternative disposition channels Model-year 2016 neg
Slide 19: Balance Sheet: Strong Liquidity Position
BALANCE SHEET Strong Liquidity Position More than $3 billion of available liquidity worldwide (a) Net corporate leverage of 3.4x Issued $550 million of five-year asset backed notes Quarter-end cash at a rate of 2.8% balance of $529 million First-half free cash flow of $211 million LTM Net Corporate
Slide 20: Share Repurchases: Increased Focus on Share Repurchases
SHARE REPURCHASES Increased Focus on Share Repurchases Purchased $85 million of stock in second quarter and $45 million in July ‒ Repurchases nearly tripled from the first quarter Expect to purchase to the second at least $300 million of stock this year Recent share repurchases were under 10b5-1 tra
Slide 21: 2015 Outlook: 2015 Estimates
2015 OUTLOOK 2015 Estimates (a) (b) ($ in millions, except EPS) Projection Growth vs. 2014 Expect cash taxes of $25 Revenue $8,600 – $8,700 2% to $50 million Adjusted EBITDA 900 – 950 5% Expect capital expenditures of Non-vehicle D&A 165 approximately $200 million Interest expense 200 Pretax income
Slide 22: Foreign Currency: Significant Impacts from Exchange-Rate Movements
FOREIGN CURRENCY Significant Impacts from Exchange-Rate Movements (a) Year-over-Year Effect of Currency Movements (in millions) First Second Third Fourth Full Quarter Quarter Quarter Quarter Year Revenue ($85) ($122) ($143) ($60) ($410) (b) Adjusted EBITDA $17 ($19) ($36) ($5) ($43) Currently Expect
Slide 23: Summary: On Track for a Record 2015
SUMMARY On Track for a Record 2015 Better-than-expected fleet costs and residual values Solid summer demand across Europe Continued roll-out of integrated Demand–Fleet– Pricing yield-management system in 2015 Generating synergies from recent acquisitions of Budget Southern California licensee and Ma
Slide 24: Avis Budget Group
avis budget group
Slide 25: 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 26: Glossary
GLOSSARY Reconciliation of Net Corporate Debt (in millions): June 30, June 30, June 30, 2013 2014 2015 Corporate debt $ 3,416 $ 3,388 $ 3,552 Less: Cash and cash equivalents 503 537 529 Net corporate debt $ 2,913 $ 2,851 $ 3,023 Reconciliation of Adjusted EBITDA excluding certain items (in millions)