Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q4 2019 Earnings Presentation
25 slides from Avis Budget's earnings presentation, February 2020
Slide 1: Investor Presentation
Investor Presentation February 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Non-GAAP Financial Measures Statements about future results made in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include projections. These statements are
Slide 3: Contents
Contents Our Business Strategic Initiatives Results & Outlook 3
Slide 4: Global Leader in Mobility…
Global Leader in Mobility… We are committed to providing on- 30 COUNTRIES Plus 150 licensee operated demand mobility services for customers, 11,000 LOCATIONS businesses and Including 4,300 licensee operated cities alike. You will find us at the 660,000 AVERAGE FLEET intersection where technology mee
Slide 5: …With a Portfolio of Premium & Leisure Brands
…With a Portfolio of Premium & Leisure Brands We operate directly in approximately 30 countries… …and maintain a Global Brand Portfolio Licensees operate our brands in more than 150 additional countries 5
Slide 6: Attractive Financial Model
Attractive Financial Model Five-Year Adjusted Free Cash Flow ($ in millions) Powerful Adjusted Free Cash Flow Data is cumulative for years 2015, 2016, 2017, 2018 and 2019 and adjusted for the adoption of ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting“. Definition of Adjusted Fr
Slide 7: Diversified Revenue Stream
Diversified Revenue Stream 35% 36% Budget Off-Airport Brand 57% Airport Avis 64% 8% On-Airport Other 40% Commercial 30% International Customer Segment 60% Leisure 70% Americas All numbers are approximate as of year ended December 31, 2019 Budget brand includes Budget Truck. Other brands include Zipc
Slide 8: Agenda
Agenda Our Business Strategic Initiatives Results & Outlook 8
Slide 9: Six Areas of Strategic Focus
Six Areas of Strategic Focus Local Market, Ride-hail, and Customer Experience Alternative Disposition Channels Package delivery Connected Cars and Technology International Integration Organizational Efficiencies 9
Slide 10: Customer Experience
Customer Experience Improve the Avis customer experience by… • Building customer-requested ancillary product offerings • Rental personalization promoting vehicle selection through MobileSelect • Granting payment flexibility to choose what portion of their rental is business and leisure through Split
Slide 11: Local Market, Ride-hail, & Package delivery
Local Market, Ride-hail, & Package delivery • Strategic expansion and growth in the local market business through existing locations, new location openings, and partnerships with Ride Hail and package delivery providers 36% Off-Airport Off-Airport 64% Growth Strategy On-Airport 11
Slide 12: Alternative Disposition Channels
Alternative Disposition Channels • Improve fleet costs by increasing vehicle dispositions through online purchases and strategically positioned Avis vehicle retail lots 100% Alternative Channel Expected Benefit per Vehicle 90% 34% 80% 42% 50% 70% 63% 64% 73% 60% 92% 50% 40% 66% 30% 58% 50% Focus is
Slide 13: Connected Car & Technology
Connected Car & Technology Our Kansas City Mobility Lab has been responsible for many innovations that have enhanced customer experiences and the way we do business Improved Roadside Fuel ABG Scanner Fasttrack-off- Vehicle Recovery Assistance Optimization App the-lot Average number Potential for a N
Slide 14: International Integration & Operational Efficiencies
International Integration & Operational Efficiencies • We have completed 9 international acquisitions since 2015 • These acquisitions generate significant Adjusted EBITDA, but have room for increased efficiencies as processes are standardized • Rationalize systems and reduce complexity to efficientl
Slide 15: 2019 Results & 2020 Outlook
2019 Results & 2020 Outlook
Slide 16: Q4 & Full Year Income Statement Summary
Q4 & Full Year Income Statement Summary ($ in millions) Revenue Adj. EBITDA Adj. Earnings per Share Fourth Quarter 5.5% $2,162 1% $143 38% $0.73 $2,050 $142 $0.53 2018 2019 2018 2019 2018 2019 Revenue Adj. EBITDA Adj. Earnings per Share $3.68 0.5% $9,172 1% 1% Full Year $788 $9,124 $3.65 $781 2018 2
Slide 17: Guidance
Guidance Year-over-Year ($ in millions, except EPS) Full-Year Change Revenues $9,400 – 9,600 3.5% Adjusted EBITDA 750 – 850 1.5% Adjusted pretax income 375 – 475 5.5% Adjusted net income 250 – 350 7.5% Adjusted diluted EPS $3.75 – 4. 75 15.5% Adjusted free cash flow 275 – 325 8% (Year-over-Year chan
Slide 18: Corporate Debt Maturities
Corporate Debt Maturities • Adjusted Free Cash Flow of ($ in ($’s in millions) $277 million for the year • Net Corporate Leverage at 3.5x as of December 31, 2019, down 0.1x from prior quarter • $4.3 billion of liquidity as of $1,800 $1,216 December 31, 2019 • Redeemed $75 million in October 2019 of
Slide 19: Capital Allocation
Capital Allocation • Seek highest returns and balanced approach to capital allocation while holding net corporate leverage between 3.0x and 4.0x • In 2019, we repurchased approximately 2.2 million shares for $62 million, at an average share price of $27.38 • We expect to employ a similar capital all
Slide 20: Appendix
Appendix
Slide 21: Definitions
Definitions This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below reasons why we present these non-GAAP financial measures and a description of what they represent. The GAAP measures most directly
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Three Months Ended December 31, 2019 2018 Net income $ 142 $ 13 Benefit from income taxes (128) (10) Income before income taxes 14 3 Add certain items: Restructuring and other related charges 14 8 Acqu
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to adjusted net income (in millions, except per share data): Three Months Ended December 31, 2019 2018 Net income $ 142 $ 13 Add certain items, net of tax: Acquisition-related amortization expense 9 10 Transaction-related costs, net 2
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Twelve Months Ended December 31, 2019 2018 Net income $ 302 $ 165 Provision for (benefit from) income taxes (15) 102 Income before income taxes 287 267 Add certain items: Restructuring and other relate
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to adjusted net income (in millions, except per share data): Twelve Months Ended December 31, 2019 2018 Net income $ 302 $ 165 Add certain items, net of tax: Restructuring and other related charges 62 17 Acquisition-related amortizatio