Hertz Global Holdings, Inc · NASDAQ:HTZ
Hertz Global — Q2 2017 Earnings Presentation
21 slides from Hertz Global's earnings presentation, Aug 8, 2017
Slide 1: 2Q 2017 Earnings Call
1 2Q 2017 Earnings Call August 8, 2017 5:00pm ET
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement 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 uncertaint
Slide 3: Key Metrics and Non-GAAP Measures
3 Key Metrics and Non-GAAP Measures THE FOLLOWING KEY METRICS AND NON-GAAP MEASURES WILL BE USED IN THE PRESENTATION: Adjusted corporate EBITDA Adjusted corporate EBITDA margin Adjusted free cash flow Adjusted pre-tax income (loss) Adjusted net income (loss) Adjusted diluted earnings (loss) per shar
Slide 4: Agenda
4 Agenda BUSINESS OVERVIEW Kathryn Marinello President & Chief Executive Officer Hertz Global Holdings, Inc. FINANCIAL RESULTS OVERVIEW Tom Kennedy Chief Financial Officer Hertz Global Holdings, Inc. 2Q
Slide 5: Continued Focus on U.S. RAC Operational Turnaround
5 Continued Focus on U.S. RAC Operational Turnaround • FLEET………………. Enriched Fleet and Optimal Capacity • SERVICE…………… Significant focus on service quality and addressing customer preference through Ultimate Choice • MARKETING……….. Enhanced digital platform for Dollar/Thrifty and Hertz brands • TECH
Slide 6: Progress on Track
6 Progress on Track 2Q FLEET Reduced avg. core1 fleet by 3% YoY in 2Q:17; period-end core fleet down 5% YoY Rebalanced car classes to optimal mix – compact cars now 16% of total vs. 21% 2Q:16 Cars that rental customers prefer = Cars that resale customers prefer; supports better rental and residual r
Slide 7: Quarterly Overview
7 TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc. Quarterly Overview
Slide 8: 2Q:17 Consolidated Results
8 2Q:17 Consolidated Results GAAP 2Q:17 Results 2Q:16 Results YoY Change Revenue $2,224M $2,270M (2)% Income (loss) from continuing operations before income taxes $(245)M $(35)M (600)% Net Income (loss) from continuing operations $(158)M $(28)M (464)% Diluted earnings (loss) per share from continuin
Slide 9: 2Q:17 U.S. RAC Revenue Performance
9 2Q:17 U.S. RAC Revenue Performance Revenue Days Total RPD Vehicle Utilization (bps) Capacity Total RPU (2%)(2%) (5%) 0% 6% (3%) 1%1% (8%) (2%)(3%) 660 (130)(60) (2%) (1%) 2% 0% (4%)(4%) U.S. RAC (YoY quarterly results1) 1Revenue is defined as total revenue excluding ancillary retail car sales. Cap
Slide 10: 2Q:17 U.S. RAC Fleet Sales Initiative
10 2Q:17 U.S. RAC Fleet Sales Initiative 45% 25% 30% 40% 24% 36% Auction Retail Dealer Direct 2Q:17 2Q:16 Non-Program Vehicle Disposition Channel Mix 2Q Alternative Sales Channels Support Fleet Rebalancing/Right Sizing • Sold 35% more risk vehicles 2Q:17 YoY on top of the 21% increase in 1Q:17 YoY •
Slide 11: 2Q:17 U.S. RAC Vehicle Utilization
11 2Q:17 U.S. RAC Vehicle Utilization Vehicle Utilization YoY bps Inc/(Dec) Capacity Level Improved by Quarter End Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Vehicle UTE Rentable UTE 660 (310) (170) 380 (60) (60) (100) (50) 1Rentable Utilization is calculated by dividing transaction days by available car days, e
Slide 12: 2Q:17 U.S. RAC Monthly Depreciation Per Unit
12 2Q:17 U.S. RAC Monthly Depreciation Per Unit $278 $304 $321 $248 $267 $269 $303 $278 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Current Year Prior Year $353 +19% +27% +12% +14% +15% 2Q $348 • Accelerated risk car sales, to rebalance and reduce fleet • YoY transition to a richer, more preferred vehicle mix dri
Slide 13: 2Q:17 Worldwide Adjusted Corporate EBITDA Bridge
13 2Q:17 Worldwide Adjusted Corporate EBITDA Bridge 2Q 39 124 20 2Q’172Q’16 $184 6 $35 U.S. RAC Revenue Contribution U.S. RAC Vehicle Carrying Cost Contribution All Other 83% of 2Q:17 year-over- year adjusted corporate EBITDA decline $ in millions 2016 Adverse Public Liability and Property Damage Fl
Slide 14: 2Q:17 International RAC
14 2Q:17 International RAC 2Q • 2Q:17 revenue increased 1%, or 4% YoY excluding foreign exchange - Transaction days increased 6% benefitting from Easter calendar shift and strong leisure performance in Europe - Total RPD declined 1% due to the continuing growth of our value brands • Vehicle utilizat
Slide 15: Liquidity / Balance Sheet Overview
15 LIQUIDITY / BALANCE SHEET OVERVIEW TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc.
Slide 16: Liquidity and Debt Overview
16 Senior RCF Facility Size $1,550 Letters of Credit (791) Borrowings (750) Available under Senior RCF 9 Unrestricted Cash 1,141 Corporate Liquidity $1,150 Liquidity and Debt Overview Corporate Liquidity at June 30, 2017 • Extended maturity structure during 2Q:17 − 2nd lien bond issued in June total
Slide 17: Corporate Debt Maturity Profile Is Well Laddered
17 Corporate Debt Maturity Profile Is Well Laddered June 30, 2017 Hertz Global Non-Vehicle Debt maturity Profile1,2 1Excludes $27 million of Promissory Notes due 2028 and $9 million of capital leases. 2$791 million of letters of credit outstanding under the Senior RCF resulting in approximately $9 m
Slide 18: First Lien Financial Maintenance Covenant
18 First Lien Financial Maintenance Covenant Consolidated First Lien Leverage Ratio as of June 30, 2017 was 2.56x and was calculated as follows: • Unrestricted cash is capped at $500 million; cap falls away post December 31, 2017 once Gross Corporate Leverage is equal to or less than 6.0x for two co
Slide 19: 3rd Quarter Outlook
19 TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc. 3rd QUARTER OUTLOOK
Slide 20: 3Q:17 Outlook
20 3Q:17 OUTLOOK 3Q U.S. RAC Trends Encouraging • Fleet – capacity optimal, less pressure on fleet costs − Reduced number of units sold wholesale − Lower model year 2017 vehicle purchase prices (like for like vs. model year 2016) • July total RPD expected to increase approximately 3% YoY • July tran
Slide 21: Q&A
21 Q&A
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