Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Investor Presentation (March 2015)
32 slides from Avis Budget's investor presentation, March 2015
Slide 1: Presentation to Investors
Presentation to Investors March 2015
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 Market Dynamics Global Performance Drivers Projected Earnings Growth 3
Slide 4: A Global Leader in the Car Rental Industry
A Global Leader in the Car Rental Industry 140 million 10,000 rental days locations $8 billion annual revenue 35 million 545,000 transactions vehicles 4
Slide 5: Diversified Revenue Sources
Diversified Revenue Sources Commercial vs. On-Airport vs. North America vs. Avis vs. Budget Leisure Off-Airport International 65% 30% 45% 55% 70% 30% 70% 30% Zipcar Locations in more than 175 countries and a leading position in most major markets 5
Slide 6: We Have a Highly Variable Cost Structure
We Have a Highly Variable Cost Structure . . . Direct Operating 75% 25% Costs Fleet Costs 100% Variable Fixed 75% 25% SG&A Costs 75% 25% Variable Costs Fixed Costs 6
Slide 7: So Pricing Has the Largest Impact on Margins
. . . So Pricing Has the Largest Impact on Margins Adjusted EBITDA Impact of a 1% Change in Driver ($ in millions) $49 $14 $23 $22 $7 $19 $35 $6 $5 $16 $16 $14 Average Daily Rental Utilization Per-unit Rate Days Fleet Costs North America International 7
Slide 8: Substantial Profit Growth
Substantial Profit Growth Adjusted EBITDA ($ in millions) $876 +21% CAGR 10.3% $410 Margin 7.9% Margin 2010 2014 Significant margin improvement 8
Slide 9: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 9
Slide 10: Well-Positioned for Future Growth
Well-Positioned for Future Growth North America Revenue to be driven by volume growth and increased pricing EMEA Poised to benefit from economic recovery and continued integration Latin America / Asia-Pacific Strong profitability driven by high ancillary revenue and inbound volume Zipcar Targeting o
Slide 11: Rental Car Pricing Has Lagged the Travel Industry
Rental Car Pricing Has Lagged the Travel Industry . . . Hotel Avis Budget Group Airfare(a) RevPAR(a) Average Daily Rate (b) +16% +21% (2%) 2010 2014 2010 2014 2010 2014 Significant opportunity for pricing improvement (a) Source: BTS Transtats (b) Time & mileage revenue per day 11
Slide 12: But Pricing Has Been Improving
. . . But Pricing Has Been Improving Average Daily Rate (a) $41.73 $39.93 +5% 2012 2014 Meaningful change in realized pricing Note: Figures in constant currency (a) North America, excluding Zipcar and Payless 12
Slide 13: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 13
Slide 14: Strategic Plan
Strategic Plan Driving Sustained, Profitable Growth Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization 14
Slide 15: Delivering Higher Revenue per Transaction
Delivering Higher Revenue per Transaction Higher Revenue Per Transaction International Inbound(a) +83% Small Business(b) +20% Specialty & Premium Fleet(c) +52% Ancillary Revenue(d) +75% Note: Data are 2013 results for North America excluding Payless and Zipcar (a) Compared to all non-inbound transac
Slide 16: Expanding our Global Footprint
Expanding our Global Footprint New Markets The Avis Europe transaction reunited our world-class brands globally, and Zipcar is the worldwide leader in car sharing Budget Licensees Acquisitions of Southern California, Edmonton, and Scandinavia will drive significant revenue and cost synergies Additio
Slide 17: Zipcar Meets Emerging Consumer Needs
Zipcar Meets Emerging Consumer Needs Zipcar operates the largest member-based, car sharing network in the world – More than 470 cities and towns and 400 college campuses – 915,000 members Locations in the United States, Canada and Europe Growth opportunities in existing markets, from new services, a
Slide 18: Diversifying Disposal Channels to Reduce Fleet Costs
Diversifying Disposal Channels to Reduce Fleet Costs Alternative Disposal Channel Benefits Expanding dealer-direct sales AutoNation partnership TBD drives direct-to- $400 consumer sales $250 80% more risk-car sales completed via $0 alternative channels in Traditional Internet Direct-to- Direct-to- 2
Slide 19: Organizational Efficiencies Delivering Significant Benefits
Organizational Efficiencies Delivering Significant Benefits Yield Performance Global Acquisition Management Excellence Effectiveness Integration Targeted pricing Organization-wide Leveraging global Europe strategies process scale of our improvement organization Zipcar Integrate demand, fleet Fleet T
Slide 20: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 20
Slide 21: We Expect Revenue to Increase Approximately 4% in 2015
We Expect Revenue to Increase Approximately 4% in 2015 Revenue ($ in millions) $8,800 $8,485 2014 2015E Pricing is expected to increase approximately 2% in 2015(a) (a) North America, excluding currency effects 21
Slide 22: We Expect Fleet Costs Will Remain Manageable
We Expect Fleet Costs Will Remain Manageable LTM Monthly Per-Unit Fleet Costs North America $361 $347 $312 $324 2015E $313 $320-$330 Average $262 $283 $299 $239 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015E 2015E Per-unit fleet costs are expected to
Slide 23: 2015 Outlook
2015 Outlook ($ in millions, except EPS) (a) 2015 Estimate Growth vs. 2014(b) Revenue $8,800 +4% Adjusted EBITDA $900 – $1,000 +8% Pretax income $535 – $635 +13% Net income $335 – $400 +12% Diluted EPS $3.15 – $3.75 +17% (a) As of February 19, 2015; excludes certain items such as acquisition-related
Slide 24: Significant Free Cash Flow
Significant Free Cash Flow ($ in millions) 2015E Adjusted EBITDA $900 – 1,000 Corporate interest (200) Capital expenditures (200) Cash taxes (50) – (75) Working capital, vehicle 0 programs and other Free Cash Flow $450 - 525 Expect free cash flow of approximately $450 to $525 million in 2015(a) (a)
Slide 25: Planned Uses of Free Cash Flow in 2015
Planned Uses of Free Cash Flow in 2015 Share repurchases – Expect to exhaust remaining $285 million of share repurchase authorization in 2015 Tuck-in acquisition targets: – Avis Budget Group licensees in or near where we operate corporately – Independent operators outside the United States Mix will
Slide 26: Key Messages
Key Messages Strong Performance Strong financial performance Focused Focused on profitable growth Global Multiple opportunities to grow globally Opportunities Generating significant earnings Profitable and free cash flow 26
Slide 27: Appendix
Appendix
Slide 28: Strong Earnings Growth Drives a Reduction in Leverage
Strong Earnings Growth Drives a Reduction in Leverage Adjusted EBITDA Leverage(a) 6.8x 4.4x 3.5x 3.2x 2009 2011 2013 2014 Target net leverage of 3 to 4 times Adjusted EBITDA (a) Net corporate debt divided by Adjusted EBITDA excluding certain items A-2 28
Slide 29: Debt Refinancing Remains an Opportunity
Debt Refinancing Remains an Opportunity (a) Corporate Debt Maturities (in millions) (b) $985 $675 9.75% €450 $550 $400 $225 2015 2016 2017 2018 2019 2020 2021 2022 2023 Senior Notes Term Loan (a) As of February 19, 2015 A-3 (b) $600 million swapped to fixed rates 29
Slide 30: 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 comparabl
Slide 31: Glossary
Glossary Reconciliation of Net Corporate Debt (in millions): Year Ended December 31, 2009 2010 2011 2012 2013 2014 Net corporate debt $ 1,649 $ 1,591 $ 2,671 $ 2,299 $ 2,701 $ 2,796 Plus: Cash and cash equiv alents 482 911 534 606 693 624 Corporate debt $ 2,131 $ 2,502 $ 3,205 $ 2,905 $ 3,394 $ 3,42
Slide 32: Avis Budget Group
avis budget group
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