Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Investor Presentation (May 2013)
34 slides from Avis Budget's investor presentation, May 2013
Slide 1: Presentation to Investors May 2013
Presentation to Investors May 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 based on current expectatio
Slide 3: Key Messages
Key Messages The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 3
Slide 4: A Global Leader in the Car Rental Industry
A Global Leader in the Car Rental Industry 125 million 10,000 rental days locations $7 billion annual revenue 29 million 500,000 transactions vehicles 4
Slide 5: Diversified Revenue Sources
Diversified Revenue Sources Commercial vs. On-Airport vs. U.S. vs. Avis vs. Budget Leisure Off-Airport International 70% 30% 50% 50% 70% 30% 60% 40% Locations in More Than 175 Countries and a Leading Position in Most Major Markets 5
Slide 6: Substantial Worldwide Licensee Revenue Stream
Substantial Worldwide Licensee Revenue Stream Licensee Revenue ($ in millions) $136 $129 $123 North America Latin America / Asia-Pacific EMEA 2010 2011 2012 Note: 2010 and 2011 are pro forma for the acquisition of Avis Europe and based on 2012 exchange rates 6
Slide 7: Key Messages
Key Messages The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 7
Slide 8: Strong Earnings Growth
Strong Earnings Growth LTM Adjusted EBITDA(a) ($ in millions) $814 $646 $454 $285 First Quarter First Quarter First Quarter First Quarter 2010 2011 2012 2013 (a) Excluding certain items 8
Slide 9: Free Cash Flow of $1.3 Billion Since 2008
Free Cash Flow of $1.3 Billion Since 2008 ($ in millions) $1,540 $1,295 $380 $135 Cash Flow Capital Vehicle Free Cash from - Expenditures + Programs(b) = Flow Operations(a) Note: Data is cumulative for years 2008-2012 (a) Excluding vehicle depreciation 9 (b) Including vehicle depreciation
Slide 10: Key Messages
Key Messages The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 10
Slide 11: Strategic Plan
Strategic Plan Driving Sustained, Profitable Growth Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization 11
Slide 12: Strategically Accelerate Growth
Strategically Accelerate Growth We are Focused on Faster-Growing, Higher-Margin Segments Small Business 17% higher revenue per transaction(a) International Inbound 72% higher revenue per transaction(b) Specialty & Luxury 52% higher revenue per transaction(b) Rentals Rentals with Ancillary 54% higher
Slide 13: Expand Our Global Footprint
Expand Our Global Footprint Our Acquisition of Avis Europe was a Watershed Event Brands Enables us to control our brand proposition globally Growth Increases our presence in faster-growing markets Opportunity Expanding Budget in Europe is a significant opportunity Synergies Provides meaningful cost
Slide 14: Expand Our Global Footprint: European Integration Benefits
Expand Our Global Footprint European Integration is Generating Significant Benefits Drive Budget growth Phase III Fleet optimization (>2015) Cost savings Performance Excellence Ancillary sales Phase II $55-$75 Cost savings (2013-15) million Expand Budget Performance Excellence Cost savings Phase 1 $
Slide 15: Put the Customer First
Put the Customer First We Are Improving the Customer Experience to Drive Brand Strength and Long-term Profits Empowerment Empowering customers with Avis Preferred Select & Go Loyalty Investing in our brands to drive revenue and loyalty Ease of Use Re-engineering customer “touchpoints” to make them e
Slide 16: Drive Efficiency Throughout the Organization
Drive Efficiency Throughout the Organization Yield Performance Fleet Management Excellence Optimization Targeted pricing Fleet maintenance Reduce strategies and repair acquisition costs Improve speed of Optimize in- Integrate fleet service usage vehicle sales and revenue Increase use of management C
Slide 17: Acquisition of Zipcar is Strategically Compelling
Acquisition of Zipcar is Strategically Compelling . . . Founded in 2000, Zipcar operates the largest member-based, car sharing network in the world – 20 major metropolitan areas – More than 300 college campuses – Locations in the United States, Canada and Europe Provides over 775,000 members with se
Slide 18: And Financially Attractive
. . . And Financially Attractive Zipcar Revenue ($ in millions) $279 $242 $186 $131 $106 2008 2009 2010 2011 2012 Adjusted EBITDA Margin 2.3% 4.5% 6.2% 18
Slide 19: Numerous Sources of Significant Synergies
Numerous Sources of Significant Synergies Cost Fleet Utilization Revenue Lower fleet acquisition costs Meet Zipcar’s demand with Expand Zipcar product smaller fleet by utilizing offerings and downtown Lower vehicle operating costs available Avis Budget cars locations Lower vehicle financing costs In
Slide 20: Fleet Utilization
Fleet Utilization Will Generate Substantial Benefits $20+ Million Opportunity 100% Zipcar has unsatisfied demand when 120 80 Avis Budget has excess fleet: $10+ million revenue opportunity 70 100 60 80 Fleet Utilization 50 60 40 30 40 20 Zipcar in excess fleet position: $10+ million cost savings oppo
Slide 21: Key Messages
Key Messages The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 21
Slide 22: Expect Revenue to Increase 6% to 9% in 2013
Expect Revenue to Increase 6% to 9% in 2013 Revenue ($ in millions) $7,800 - $8,000 $7,357 2012 2013E 22
Slide 23: Recent Pricing Trends Improved in North America
Recent Pricing Trends Improved in North America Trailing 6-month Year-over-Year Price Change +2% (2%) (3%) (3%) Second Third Fourth First Quarter Quarter Quarter Quarter 2012 2012 2012 2013 North America Pricing Increased 4% in First Quarter 2013 Note: Excludes ancillary and non-rental revenue 23
Slide 24: North America Per-Unit Fleet Costs Normalizing in 2013
North America Per-Unit Fleet Costs Normalizing in 2013 LTM Monthly Per-Unit Fleet Costs(a) North America $400 $361 $347 $350 $324 $312 $283 $300 2013E $260 $275-$290 $262 $250 $239 $200 2005 2006 2007 2008 2009 2010 2011 2012 2013E Risk % 1% 8% 26% 55% 65% 53% 52% 62% ~65% (a) As of May 2, 2013 24
Slide 25: Lower Vehicle Borrowing Rates
Lower Vehicle Borrowing Rates ABS Term Debt Average Rates(a) 5.8% 4.9% 4.0% 2010 2011 2012 Expect to Generate More Than $30 Million of Annual Interest Savings in 2013 Due to Lower Rates (a) U.S. only 25
Slide 26: Expect Strong Free Cash Flow Generation
Expect Strong Free Cash Flow Generation ($ in millions, except EPS) 2013 Estimate(a) Revenue $7,800 – $8,000 Adjusted EBITDA 750 – 855 Non-vehicle D&A 130 – 135 Interest expense 240 Pretax income 375 – 485 Income taxes(b) 140 – 180 Net income $235 – $305 Diluted EPS $2.00 – $2.60 Expect Free Cash Fl
Slide 27: Strategic Plan is the Foundation for Long-term Growth
Strategic Plan is the Foundation for Long-term Growth Driving Sustained, Profitable Growth Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization 27
Slide 28: Expect More than $1 Billion of Adjusted EBITDA by 2015
Expect More than $1 Billion of Adjusted EBITDA by 2015 Avis Europe Zipcar Organizational Synergies Synergies Efficiencies Performance Cost savings Demand / fleet Excellence pricing Fleet utilization Fleet optimization Budget expansion Revenue Process Cost savings opportunities improvement $55 to $75
Slide 29: avis budget group
avis budget group
Slide 30: Focused on Key Drivers
Focused on Key Drivers Adjusted EBITDA Impact of a 1% Change in Driver ($ in millions) $45 $14 $19 $17 $31 $6 $14 $5 $5 $13 $12 $9 Average Average Daily Daily Rate Rental Days Rental Days Utilization Utilization Per-unit Per-unit Fleet Costs Rate Fleet Costs North America International Note: Exclude
Slide 31: Well-Laddered ABS Term Maturities
Well-Laddered ABS Term Maturities ($ in millions) $1,090 $960 $955 $915 $510 $345 2013 2014 2015 2016 2017 2018 Note: Data are U.S. only as of May 1, 2013 31 A-2
Slide 32: Limited Corporate Debt Maturities Through 2016
Limited Corporate Debt Maturities Through 2016 ($ in millions) $1,625 8.25% $725 9.75% 9.625% $500 $900 €250 $327 $300 $77 $225 $125 $250 $50 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Term loan Senior notes Convertible notes Over $1 Billion of High-Cost Debt 32 A-3
Slide 33: Glossary (Avis Budget Group)
Glossary (Avis Budget Group) 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
Slide 34: Glossary (Zipcar)
Glossary (Zipcar) Adjusted EBITDA This presentation contains the non-GAAP financial measure of Adjusted EBITDA. Zipcar, Inc. defines Adjusted EBITDA as earnings before non-vehicle depreciation, non-vehicle interest expense, interest income, amortization, preferred stock warrant liability adjustment,