Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Investor Presentation (September 2012)
34 slides from Avis Budget's investor presentation, September 2012
Slide 1: Presentation to Investors
Presentation to Investors September 2012
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: Driving Sustained, Profitable Growth
Driving Sustained, Profitable Growth The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 3
Slide 4: Avis Budget Provides Vehicle Rental Services Worldwide
Avis Budget Provides Vehicle Rental Services Worldwide 120 million 10,000 rental days locations $7 billion annual revenue 28 million 450,000 transactions vehicles Note: Pro forma for the acquisition of Avis Europe 4
Slide 5: A Global Leader in the Car Rental Industry
A Global Leader in the Car Rental Industry Locations in More Than 175 Countries #1 #2 #2 #2 #1 #1 #1 #1 Share position Owned and joint-venture territories Licensed territories (a) Source: Airport authorities, Euromonitor 5
Slide 6: 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% Note: Pro forma for the acquisition of Avis Europe 6
Slide 7: Driving Sustained, Profitable Growth
Driving Sustained, Profitable Growth The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 7
Slide 8: Record First-Half 2012 Results
Record First-Half 2012 Results (a) Growth in Volume, Revenue and Earnings Worldwide ` Revenue increased 32% to $3.5 billion ` Adjusted EBITDA increased 41% to $385 million (a) ─ Margin improved 60 basis points (a) ` Revenue grew 4% and Adjusted EBITDA grew 26% (a) excluding the Avis Europe acquisiti
Slide 9: Solid Post-Recession Revenue Recovery
Solid Post-Recession Revenue Recovery LTM Revenue ($ in billions) $6.0 $5.5 $5.0 $4.5 2008 2009 2010 2011 Note: Results exclude Avis Europe 9
Slide 10: Free Cash Flow of More Than $900 Million Since 2007
Free Cash Flow of More Than $900 Million Since 2007 ($ in millions) $1,181 $922 $342 $83 Cash Flow From - Expenditures Capital + Vehicle Programs (b) = Free Cash Flow Operations(a) Note: Data is cumulative for years 2007-2011 (a) Excluding vehicle depreciation 10 (b) Including vehicle depreciation
Slide 11: Driving Sustained, Profitable Growth
Driving Sustained, Profitable Growth The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 11
Slide 12: Key Messages
Key Messages Driving Sustained, Profitable Growth Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization Strong Financial Performance 12
Slide 13: Numerous Initiatives for Accelerated Growth
Numerous Initiatives for Accelerated Growth Expands Initiative Margins 2011 Results (a) ` Grow international inbound ; +11% volume ` Grow small-business rentals ; +12% volume ` Grow ancillary revenues ; +11% revenue ` Co-brand local market locations ; +416 locations (a) North America 13
Slide 14: Building a Fully Integrated Demand/Fleet/Pricing System
Building a Fully Integrated Demand/Fleet/Pricing System Expect to Generate More Than $50 Million of Incremental EBITDA by 2014 Harvest Implement and ` North America Profit Refine in 2014 Improvement ` International in ` Pricing module 2015 Define ` Fleet optimization ` Processes ` Review, analyze an
Slide 15: “Virtual” Rental Technologies – A Global Opportunity
“Virtual” Rental Technologies – A Global Opportunity Leading technology solutions being developed Customer first Automated check-out and check-in anywhere Customer first Lowers our costs Efficiency Expands our addressable market Accelerate growth Varying business models will be required to serve cus
Slide 16: Expanding with the Acquisition of Avis Europe
Expanding with the Acquisition of Avis Europe ` Reunites our brands globally ` Increases presence in faster-growing markets ` Earnings stability driven by licensee revenue ` $100 million accretive to pro forma pretax earnings(a) (a) Excluding purchase-accounting effects, transaction costs and restru
Slide 17: Multi-Year Integration Plan to Generate Significant Benefits
Multi-Year Integration Plan to Generate Significant Benefits ($ in millions) ` Drive Budget growth Phase III ` Fleet optimization (>2015) ` Cost savings ` Performance Excellence ` Ancillary sales Phase II ` Cost savings $55-$75 (2012-15) ` Expand Budget ` Performance Excellence ` Cost savings Phase
Slide 18: Budget Is a Substantial Growth Opportunity
Budget Is a Substantial Growth Opportunity 23% 19% (2011 shares) 15% Each 1% 10% share equals ~$100 million of revenue 2% New Zealand Canada Australia U.S. Europe Source: Airport authorities, Euromonitor data for Canada, Europe and the Middle East 18
Slide 19: Fast-Growing China Market
Fast-Growing China Market ` 50/50 joint venture with a strong local partner ` First-mover advantage with 10 years of operation in China ` 70 locations, targeting 100 by end of 2012 ` Market expected to reach $8 billion by 2016(a) (a) Auto Rental News 19
Slide 20: Driving Sustained, Profitable Growth
Driving Sustained, Profitable Growth The Business Today Strong Financial Performance Investing in Profitable Growth Initiatives Driving Revenue and Earnings 20
Slide 21: Revenue to Increase by Approximately 22-27% in 2012
Revenue to Increase by Approximately 22-27% in 2012 Revenue ($ in millions) $7,200 - $7,500 EMEA $5,900 $5,541 2011 2012E 21
Slide 22: Expect the Used Car Market to Remain Strong
Expect the Used Car Market to Remain Strong . . . Off-Lease Vehicles (in millions) 4.0 3.5 3.0 Average 2.5 2.0 1.5 1.0 1995 2000 2005 2010 2015E Reduced supply of off-lease vehicles supports residuals Source: Manheim Consulting 22
Slide 23: North American Per-Unit Fleet Costs to Decline 3-8%
. . . North American Per-Unit Fleet Costs to Decline 3-8% LTM Monthly Per-Unit Fleet Costs North America $400 $361 $347 $350 $324 $312 Average $300 $283 $260 $262 $250 2012E $240-$255 $200 2005 2006 2007 2008 2009 2010 2011 2012E Risk % 1% 8% 26% 55% 65% 53% 52% 60% Note: 2012 estimate as of August
Slide 24: Lower Vehicle Borrowing Rates
Lower Vehicle Borrowing Rates ABS Term Debt Average Rates(a) 5.8% 4.9% 4.0% 2010 2011 2012E Expect to generate more than $25 million of annual interest savings year-over-year due to lower rates (a) U.S. only Note: 2012 estimate as of August 2, 2012 24
Slide 25: Strong Revenue and Earnings Growth Expected
Strong Revenue and Earnings Growth Expected (a) (b) ($ in millions, except per-share amounts) 2012 Estimate Growth vs. 2011 Revenue $7,200 – $7,500 25% Adjusted EBITDA 825 – 875 39% Non-vehicle D&A 110 Interest expense 260 – 265 Pretax income 450 – 505 47% Income taxes 162 – 182 Net income $288 – $3
Slide 26: Generating Substantial Free Cash Flow
Generating Substantial Free Cash Flow (a) ($ in millions) 2012 Estimate Pretax income $450 - $505 Plus: Non-vehicle depreciation and amortization 110 Less: Capital expenditures (125) Working capital, fleet needs and other (50) – 50 Cash taxes (60) – (65) Free cash flow $325 - $480 Targeting $300+ mi
Slide 27: Multiple Sources of Long-Term Earnings Growth
Multiple Sources of Long-Term Earnings Growth Long-Term Earnings Growth Opportunity Growth in developed markets 2% - 4% Incremental growth from developing markets 1% - 3% Ancillary revenues 1% - 2% Fleet and yield optimization 1% - 3% Productivity growth 2% - 4% Other strategic initiatives 1% - 3% I
Slide 28: Key Messages
Key Messages Driving Sustained, Profitable Growth Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization Strong Financial Performance 28
Slide 29: Avis Budget Group
avis budget group
Slide 30: Substantial Margin Improvement
Substantial Margin Improvement Adjusted EBITDA Impact of a 1% Change in Driver ($ in millions) $45 $15 $19 $17 $30 $6 $5 $14 $4 $13 $12 $10 Average Average Daily Daily Rate Rental Days Rental Days Utilization Utilization Per-unit Per-unit Fleet Costs Rate Fleet Costs North America International A-1
Slide 31: Well-Laddered ABS Maturities
Well-Laddered ABS Maturities ($ in millions) $960 $950 $920 $630 $510 $450 $350 2012 2013 2014 2015 2016 2017 2018 Refinancing completed Note: Data are U.S. only as of August 31, 2012 31
Slide 32: No Corporate Debt Maturities Until 2014
No Corporate Debt Maturities Until 2014 ($ in millions) $1,225 $725 $690 $395 $425 $450 $145 $250 $375 $500 $250 $240 2012 2013 2014 2015 2016 2017 2018 2019 2020 Term loan Senior notes Convertible notes As of June 30, 2012 32
Slide 33: Substantial Margin Improvement
Substantial Margin Improvement LTM Adjusted EBITDA Margin(a) 12.0% 12% Margins have 10% improved 490 bps since 2006 8% 7.1% 6% 4% 2.3% 2% 0% 2006 2007 2008 2009 2010 2011 Note: Excluding the acquisition of Avis Europe (a) Excluding certain items A-4 33
Slide 34: 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
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