Europcar Group Half Year 2015 Roadshow - Europcar's investor website
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Europcar Group Half Year 2015 Roadshow August 27, 2015
Half Year 2015 Results released on July 29, 2015
Agenda
Highlights & Achievements
Operating Performance & Financing Overview
2015 Outlook and Concluding Remarks
Appendix
IMPORTANT NOTICE: Financial statements unaudited and prepared under IFRS
Investors are strongly urged to read the important disclaimer at the end of this presentation
2Highlights & Achievements
1 Successful Initial Public Offering
2 Capital Structure fully Reshaped
3 Fast Lane Traction: Strong H1 2015 Results
4 Fast Lane in Motion: Commercial Achievements
31 Successful Initial Public Offering(a)
Offering price: €12.25 per share
Total size of the global offering: €898m
€475 m raised through the sale of newly-issued shares
Net proceeds of €441m(b)
Sale of existing shares by Eurazeo and ECIP Europcar Sarl €403m
Lock up period of 180 days beginning June 29, 2015
Trading on Euronext Paris started on June 30, 2015 (c)
Free Float of 51.3%
Market capitalisation as of July 28: €1,726m
IPO to accelerate the implementation of the strategy initiated in
2012 through the Fast lane transformation program
(a) Including the partial exercise of over-allotment option on July 24, 2015
(b) Fees for approximately €34 million (of which approximately €25 million has been deducted from issuance premium)
(c) In the form of “promesses d’actions” started on June 26, 2015
42 Capital Structure fully reshaped as of June 30, 2015
• Early re-payment of both existing expensive corporate bonds (€724 million in aggregate)
thanks to
− IPO primary proceeds
Corporate Debt − New €475m senior notes due 2022 with a coupon of 5.75%
Simplified structure with huge interest savings (from €75 m to €27m / year)
Ratio net Debt / LTM Adjusted Corporate EBITDA at 1.5x as of June 30, 20151
Credit ratings • S&P upgrade one notch to B+ on July 8
Upgrade • Moody’s upgrade 2 notchs to B1 on July 7
• Remainder of the net proceeds of the new shares and the new notes after the refinancing
transactions at €112 million to be used for the Group’s general corporate purposes
Headroom
Of this amount, up to €80 million for financial investments in strategic initiatives over the 2015-
2017 period, including up to €25 million for Europcar Lab-related activities
Simplified capital structure providing financial flexibility
(1) Ratio is calculated considering the full cash out of the IPO related fees (approx. €23 million still to be paid at the end of June 2015) and of the remainder of the net
proceeds of the New Shares and the New Notes after the refinancing transactions (i.e. €112 million)
53 Fast Lane in motion: Strong H1 2015 Results
Continuous quarterly increase in Adj. Corp. EBITDA and
Sustained topline growth
profitability, with recent traction from growth levers
Quarterly total revenue growth at constant exchange rate (yoy) LTM Corporate EBITDA
7.4% (b) 7.4% (b) 231
7.1% (a)
219
213
197
4.3%
180
170
11.2%
2.4% 11.2%
10.9%
10.8%
10.1%
9.4%
9.0%
-1.2%
Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15
Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15
Strong growth and profitability momentum: +6.2% organic growth revenue achieved in H1 2015
resulting in a 11.2% LTM Adj. Corporate EBITDA margin
(a) Including Europ’Hall fully consolidated for the last two months of 2014
(b) Including impact of Europ’Hall integration accounting for +1.2%
64 Fast Lane in motion: Commercial Achievements
Leisure Business New
mobility
1 New key
1 Ancillary program accounts
deployed in all Acquisition of
corporate countries 2
Ecar Club, the UK’s
Development
ahead of summer first entirely electric
of SME contracts
season pay per use car
club
2
InterRent roll out
81 corporate stations
to date
First joined agreement signed by Europcar and
Ubeeqo with a key account in Belgium
Fast Lane, which is half way, continues to be deployed and to bear fruits notably to
grow our top line on a sustainable basis and to differentiate our offer
7Agenda
Highlights & Achievements
Operating Performance & Financing Overview
2015 Outlook and Concluding Remarks
Appendix
8Key Financial Metrics
Change at
June 30, June 30,
All data in €m constant
2015 2014
currency*
Revenues 960.5 869.0 +7.4%
Adjusted Corporate EBITDA 60.2 41.5 +39.2%
Adjusted Corporate EBITDA Margin 6.3% 4.8% +1.4pt Continuing
business
Last Twelve Months Adjusted Corporate EBITDA 231.4 179.8 +28.7%
improvement
LTM Adjusted Corporate EBITDA Margin 11.2% 9.4% +1.8pt while
investing for
Operating Income IFRS ** 19.1 49.7 -63.2%
summer
Net Income IFRS -156.8 -82.0 93.1% season
Corporate Net Debt 209
Total Net Fleet Debt (incl. operating leases) 3,460 3,042 11.4%
Improved performance supported by embedded
Fast Lane program and Group operational excellence
* UK pound and Australian dollar
** Includes non-recurring expenses for €56m in H1 2015 vs. €15m in H1 2014. See slide s 12 and 21
9Strong Top Line Growth
Change at
Key considerations
All data in €m HY 2015 HY 2014 Change constant
currency
Strong volume across all countries
Rental revenues 893.0 799.4 11.7% 8.5% − Increased demand on the leisure segment
Other revenue associated with supported by Europcar brand on all
43.4 45.7 -5.2% -8.4% distribution channels and by the accelerated
car rental
Franchising business 24.1 23.8 1.4% 0.4% deployment of the InterRent brand
Revenues 960.5 869.0 10.5% 7.4% − Increased volumes for the business
segment, in particular for SME and vehicle
replacement, in line with our sales strategy
Rental Revenue Change in RPD, mainly driven by the mix of
YoY Change at constant currency both customers segments and brands
+8.7% +8.6% − in the leisure segment: benefit from the
8.9% 9.6%
deployment of the ancillary sales program,
Average RPD while InterRent, with a lower facial RPD
Rental day volume continues to grow significantly
− in the business segment: higher
contribution from vehicle replacement
business with longer duration than the
(0.2%) 51.4%
(0.9%)
40.1% average driving a lower facial RPD
InterRent
Europcar Other revenue impacted by Petrol income
7.8% 8.8%
2.0%
0.4%
0.7% decrease, with no impact on margins
(0.6)%
Q2 2015 H1 2015
10Continued Increase of Adjusted Corporate EBITDA Margin
Change at Key considerations
All data in €m HY 2015 HY 2014 Change constant
currency
Improvement in both Adjusted
Revenues 960.5 869.0 10.5% +7.4% Corporate EBITDA amount and
margin, mainly reflecting:
Fleet size ('000 vehicles) 192.1 174.3 10.2%
Fleet financial utilization rate (%) 75.1% 75.6% -0.5 pt − Rental revenue strongly increased
by +8.5% at constant currency
Fleet holding costs excluding estimated
-229.1 -204.8 11.9% 8.5%
interest included in operating leases − Fleet costs per unit (holding and
Fleet operating, rental, revenues and operating) declined over the period
-339.5 -311.8 8.9% 5.8%
insurance-related costs while volume impact was linked to
Personnel, network, IT and other HQ costs -275.2 -247.4 11.2% 8.4% activity growth
Fleet financing costs -56.5 -63.5 -11.0% -12.7% − Rental and revenues operating
costs on track compared to the
Adjusted Corporate EBITDA 60.2 41.5 44.8% +39.2% growth of rental days
Adjusted Corporate EBITDA Margin 6.3% 4.8% +1.4pt − Fixed costs increase mainly in
Operations Network and Sales &
Marketing to sustain the profitable
growth by segment
− Decrease in fleet financing costs
following the €350 bond and UK
fleet facilities refinancing in H2 2014
11Net Income: 2015 a transition year
Key considerations
All data in €m HY 2015 HY 2014 Change
2015 net loss included:
Adj. Corporate EBITDA 60.2 41.5 44.8%
− Cost linked to the reshape of the
Non-fleet D&A -16.0 -15.6 2.6%
capital structure:
Other non-recurring operating expenses -55.9 -14.6 – Redemption premium of €56m
Non-fleet financial expenses -139.3 -89.9 54.9%
– Write off of amortization costs for
€27m (non cash)
Profit Before Tax -151.0 -78.7 92.0% − Net negative impact of some
proceedings for approx. €27 m
Net tax expense -1.7 0.9
(mainly Q1 2015 items)
Associates -4.1 -4.3 -4.5%
− Costs associated with the IPO for
Net income -156.8 -82.0 91.2% €9m
− Reorganization charges linked to
Fast lane transformation plan for
€20 million
− Deployment costs of Car2Go
Europe for €4m (associates)
12Cash flow evolution (non-GAAP): focus on operational items*
Key considerations
All data in €m HY 2015 HY 2014
Adjusted Corporate EBITDA 60 42 Adjusted Corporate EBITDA up €18 m
Non-recurring expenses -25 -12 Non recurring expenses cash out of €25m linked to a
€12.5m litigation settlement and continuing Fast Lane
Non-fleet capital expenditure (net of proceeds
-12 -10
from disposals) reorganization plans
Changes in non-fleet working capital 34 38 Change in non fleet working capital at €34m is reflecting
the actions launched in the frame of Fast Lane but also
Change in provisions and employee benefits -12 -3
IPO fees and costs not paid at June end (estimated at
Income tax paid -21 -17 ~€23m)
One-off cash interest up €14m notably due to cut-off
Corporate operating free cash flow 25 37
effect following the payment of the accrued interests at
Cash interest paid on corporate High Yield bonds -51 -37 the time of the reimbursement of the two corporate
bonds at end of June (vs. Q4 for previous year)
Cash flow before change in fleet asset base,
-26 0
financing and other investing activities
Seasonal cash outflows linked to the preparation for summer season
* Full Management Cash Flow presented on slide 24
13Refinancing and capital structure optimization
Capital structure evolution Key Considerations
June 30, Dec. 31,
Corporate debt refinancing transactions
All data in €m 2015 2014
Gross Corporate debt * 390 773 − Early repayment of the €324m bond with IPO primary proceeds
Cash & short term
− Refinancing of the €400m bond via the issuance of the €475m
Corporate
-181 -192 Corporate
investments
net debt
Total Corporate net senior notes due 2022 at an issue price of 99.289% and a coupon
209 581
debt of 5.75%
− RCF facility extended to 2020 for amount of €350m at improved
Gross financial fleet terms (May 2015)
1,825 1,396
debt
Fleet cash & cash Asset – Commitment fee: 35% of margin
-98 -113
equivalents and other backed
Fleet
Fleet net debt 1,727 1,283 financing – Leverage Margin grid: corp. leverage ≥ 2.0x: 2.75% // corp.
secured
by leverage < 2.0x: 2.50%
vehicles
Lease
Debt equivalent of fleet
1,734 1,284
Fleet debt refinancing transactions
operating leases
− €1,100m SARF facility extended to 2019 at improved terms (May
2015)
Total fleet net debt
3,460 2,567
(excl. op leases) – Margin of 170 bps
Conso.
Total consolidated net – Non utilization rate: 0.75% if utilization ≤ 50%; 0.50% if utilization
3,669 3,148
debt (incl. op leases)
> 50%
– Extension and increase of the related swap
− In H2 2014, refinancing of the €350 bond and the UK facility
Recent successful refinancing achieved at improved terms on all key debt lines
leading to huge savings on interests going forward
* See slide 26
14Total Net debt Bridge – From end of June 2014 to end of June 2015 (LTM)
Off Balance Sheet Debt On Balance Sheet Debt
3,972
3,666 3,669
1,734
1,651 1,734
90 83
197
61
89 44
(153) (408)
Investments in fleet to
support activity growth and
prepare summer peak
2,238
2,016 1,935
Net debt at Corporate free Cash interest paid Change in rental Fleet working Change in fleet Net Debt at June IPO & Refinancing Non cash Item Investing activities Net debt at
June 30, 2014 cash flow (before on corporate debt fleet capital decrease / operating leases 2015 after impact cash (write off arrang. June 30, 2015
At constant change in rental (increase) of activity growth costs linked to
currency fleet) Refinancing)
€2,500m Average net fleet debt €2,869m
€1,343m Of which: average debt equivalent of fleet operating leases €1,487m
93.6% Loan to Value Ratio 93.5%
75.6% Utilization Rate 75.1%
15Agenda
Highlights & Achievements
Operating performance & Financing overview
2015 Outlook and Concluding Remarks
Appendix
162015 Outlook confirmed
3-5% organic growth, essentially driven by volume effect with
Organic
relatively stable RPD
Revenues
Full impact of the Europ’Hall acquisition(a)
Non-organic
Currency favourable impact (UK Pound and Australian dollar)(b)
Adjusted Corporate EBITDA around €245m driven by growth in
Corp. EBITDA
revenues and cost control initiatives
Net Income excluding Non-Recurring Items and Net income excluding non-recurring items and associates, and pro
Associates and Pro Forma for Refinancing forma for refinancing around €125m(c)
Corporate Leverage Below 1.5x by the end of 2015
In 2015, the Group will continue to manage profitable growth though
its Fast Lane Program
(a) Europcar acquired EuropHall, one of its French franchisee, in Q4 2014. As a result, this company has been fully consolidated only for two months in 2014. On a
standalone basis, EuropHall revenue amounted to c. €23 million for the full year 2014
(b) Based on Europcar estimated annual average GBP/Euro exchange rate of 1.30, this should represent an incremental growth of c.100bps compared to full year 2014
(c) Net income excluding exceptional items (operational and financial), before associates, and adjusting financial expenses pro-forma for the full year effect of the
repayment of the €324m bond, refinancing of the €400m bond through the issuance of the €475m senior notes due 2022 at an issue price of 99.289% and a coupon of
5.75%, and refinancing of the RCF and SARF facility at improved terms
17Concluding remarks
Acceleration potential
Organic
Enhance international
mid-term guidance footprint
Revenues: Develop new mobility
3-5% organic growth solutions
Unrivalled leader in an CAGR
attractive, growing Seize bolt-on/
market Adjusted Corporate franchisee opportunities
EBITDA:
Margin above 13%
by 2017
High growth/low-risk
business model run by
disciplined management
Halfway through
successful Fast Lane
transformation
18Agenda
Highlights & Achievements
Operating performance & Financing overview
2015 Outlook and Concluding Remarks
Appendix
19Management P&L
All data in €m HY 2015 HY 2014 Change
Total revenue 960.5 869.0 10.5%
Change at constant exchange rates 7.4%
Fleet holding costs, excluding estimated interest included in
-229.1 -204.8 11.9%
operating leases
Fleet operating, rental and revenue related costs -339.5 -311.8 8.9%
Personnel costs -169.2 -155.3 8.9%
Network and head office overhead -108.1 -96.5 12.1%
Other income and expense 2.1 4.4 -51.2%
Personnel costs, network and head office overhead, IT and other -275.2 -247.4 11.2%
Net fleet financing expense -30.8 -38.4 -19.7%
Estimated interest included in operating leases -25.7 -25.1 2.5%
Fleet financing expenses, including estimated interest included
-56.5 -63.5 -11.0%
in operating leases
Adjusted Corporate EBITDA 60.2 41.5 44.8%
Margin 6.3% 4.8% 1.4 pts
Depreciation – excluding vehicle fleet -16.0 -15.6 2.6%
Other operating income and expenses -55.9 -14.6
Other financing income and expense not related to the fleet -139.3 -89.9 54.9%
Profit/loss before tax -151.0 -78.7 92.0%
Income tax -1.7 0.9
Share of profit/(loss) of associates -4.1 -4.3 -4.5%
Net profit/(loss) -156.8 -82.0 91.2%
20IFRS P&L
All data in €m HY 2015 HY 2014 Change
Total revenue 960.5 869.0 10.5%
Fleet holding costs -254.8 -229.8 10.9%
Fleet operating, rental and revenue related costs -339.5 -311.8 8.9%
Personnel costs -169.2 -155.3 8.9%
Network and head office overhead -108.1 -96.5 12.1%
Other income and expense 2.1 4.4 -51.2%
Depreciation – excluding vehicle fleet -16.0 -15.6 -2.6%
Recurring operating income 74.9 64.3 16.5%
Other non-recurring income and expenses -55.9 -14.6
Operating income 19.1 49.7 -61.6%
Net financing costs -170.1 -128.3 32.6%
Profit/(loss) before tax -151.0 -78.7 92.0%
Income tax (*) -1.7 0.9
Share of profit/(loss) of associates -4.1 -4.3 -4.5%
Net profit/(loss) -156.8 -82.0 91.2%
21Reconciliation
All data in €m HY 2015 HY 2014
Recurring operating income* 74.9 64.3
Reversal of interest expense related to fleet operating leases (estimated) 25.7 25.1
Adjusted recurring operating income 100.6 89.4
Reversal of amortization, depreciation and impairment expense* 16.0 15.6
Net fleet financing expenses* -30.8 -38.4
Interest expense related to fleet operating leases (estimated) -25.7 -25.1
Adjusted Corporate EBITDA 60.2 41.5
Reversal of fleet depreciation* 85.8 75.4
Reversal of fleet operating lease rents* 124.0 114.3
Reversal of net fleet financing expenses* 30.8 38.4
Adjusted Consolidated EBITDA 300.8 269.6
* as set forth in the consolidated income statement and the notes to the financial statements
22Adjusted Corporate EBITDA - LTM
726 Adjusted Consolidated
708 EBITDA
695
683
657 658 665
650 648 656 651 656
647
175 Fleet depreciation (IFRS)
164 169
163
160
Continued
234 228 222 215 200 184 171 163 improvement in
Adj. Corporate
EBITDA thanks
Fleet depreciation to Fast Lane
included in fleet op. lease
200 program
196 rents
191 launched in 2012
191
190
188
186
182
159 164 168 171 177
Fleet interest expense
54
53
54 54 included in fleet op. lease rents
50 52 Fleet financing costs (IFRS)
52 50
54 excluding fleet swap expenses
59
52 53
54 54 54
68
64 11 Fleet swap expenses
72 9
74 9
74 12
75
75 12
79 13
83 76 75
13 13
213 219 231
12
20 11 9 197 Adjusted Corporate
29
180 11.2% EBITDA
170 10.9% In % of Revenue
151 157 10.8%
119 124 130
101 113 10.1%
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15
23Management Cash Flow
All data in €m HY 2015 HY 2014
Key considerations
Adjusted Corporate EBITDA 60 42
Non-recurring expenses (a) -25 -12 Change in fleet asset base of
Non-fleet capital expenditure (net of proceeds from disposals) -12 -10 €142m driven by the fleet -in for the
Changes in non-fleet working capital 34 38 summer season
Change in provisions and employee benefits -12 -3
Income tax paid -21 -17 Capital increase: gross proceeds at
Corporate operating free cash flow 25 37 €475m less €11m fees already paid
as of June 30, 2015
Cash interest paid on corporate High Yield bonds -51 -37
Cash flow before change in fleet asset base, financing and
other investing activities
-26 0 Change is Corporate High Yield
notes negative at €252m:
Other investing activities -9 -9
Change in fleet asset base, net of drawings on fleet financing
-142 -66
− repayment of the two former
and working capital facilities Corporate bonds (i.e. €324m and
Capital increase (*) 464 - €400m)
Change in Corporate High Yield -252 -
− issuance of the new Corporate
Transaction cost cash out and swap impact(a) -69 -4
bond for €472m (€475m at issue
Net change in cash before FX effect -34 -79 price of 99.289%)
Cash and cash equivalents at beginning of period 206 267
Effect of foreign exchange conversions 2 1
Cash and cash equivalents at end of period 174 189
24IFRS Cash Flow
In €tho usands 6 m o nt hs 2 0 15 6 m o nt hs 2 0 14
P ro fit / ( lo s s ) be f o re ta x -15 1,0 3 7 - 7 8 ,6 5 0
Depreciatio n and impairment charge o n pro perty, plant and equipment 7,041 6,295
A mo rtizatio n and impairment charge o n intangible assets 8,875 11,975
Changes in pro visio ns and emplo yee benefits 15,252 -1,530
P ro fit/(lo ss) o n dispo sal o f assets -21 -1,165
To tal net interest co sts 77,449 82,477
Redemptio n premium 56,010
A mo rtizatio n o f transactio n co sts 34,965 16,233
Other no n-cash items 4,252 7,599
F ina nc ing c o s t s 17 2 ,6 7 6 10 6 ,3 0 9
N e t c a s h f ro m o pe ra tio n be f o re c ha nge s in wo rk ing c a pit a l 5 2 ,7 8 6 4 3 ,2 3 4
Changes in rental fleet -553,410 -448,096
Changes in fleet wo rking capital 158,663 176,279
Changes in no n-fleet wo rking capital 47,507 41,651
C a s h ge ne ra t e d f ro m o pe ra t io ns - 2 9 4 ,4 5 4 - 18 6 ,9 3 2
Inco me taxes received/paid -20,875 -17,100
Net interest paid -86,556 -82,211
N e t c a s h ge ne ra t e d fro m ( us e d by) o pe ra t ing a c t iv it ie s - 4 0 1,8 8 5 - 2 8 6 ,2 4 3
A cquisitio n o f intangible assets and pro perty, plant and equipment -12,088 -11,709
P ro ceeds fro m dispo sal o f intangible assets and pro perty, plant and equipment 612 2,557
A cquisitio n o f financial assets -6,664 -7,043
A cquisitio n o f subsidiaries, net o f cash acquired -6,000 -2,250
N e t c a s h us e d by inv e s ting a c t iv it ie s - 2 4 ,14 0 - 18 ,4 4 5
Increase in share capital net o f fees paid 464,014
New senio r subo rdinated no tes 471,623
Redemptio n o f senio r subo rdinated no tes -780,016
Change in senio r fleet financing liability 170,900 111,255
Change in o ther fleet financing liabilities 58,927 100,546
P ayment o f transactio n co sts -12,450 -3,783
Other new bo rro wings 19,392 17,037
N e t c a s h ge ne ra t e d fro m ( us e d by) f ina nc ing a c t iv it ie s 3 9 2 ,3 9 0 2 2 5 ,0 5 5
Cash and cash equivalents at end o f perio d 173,996 188,891
Cash and cash equivalent at beginning o f perio d 206,317 267,038
Effect o f fo reign exchange differences 1,313 1,486
N e t inc re a s e / ( de c re a s e ) in c a s h a nd c a s h e quiv a le nts a f t e r e f f e c t o f
-3 3 ,6 3 5 - 7 9 ,6 3 3
f o re ign e xc ha nge dif fe re nc e s
25Group financing structure at June 30, 2015
€m illion Pricing Maturity June 30, 2015 Cash available post
High Yield Senior Notes (a) 5.75% 2022 475 IPO and new notes
Senior Revolving Facility (€350m RCF) E+250bps (b) 2020 100 is mechanically
IN Balance Sheet
FCT Junior Notes, accrued interest not yet due,
-185
used for RCF
capitalized costs of financing contracts and other Corporate repayment
Gross Corporate debt 390 Net Debt
Short-term Investments -69
Cash in operating and holding entities -112
Corporate net debt 209
High Yield EC Finance Notes (a) 5.125% 2021 350
Senior asset revolving facility (€1.1bn SARF) (c) E+170bps 2019 689
FCT Junior Notes, accrued interest, capitalized costs of
IN Balance Sheet
166
financing contracts and other
UK, Australia and other fleet financing facilities Various (d) 620
Asset
Gross financial fleet debt 1,825 backed
Short-term fleet investments -16 Financings
secured by
Cash held in fleet financing entities -82 Vehicules
Fleet net debt 1,726
Balance
Sheet
OFF
Debt equivalent of fleet operating leases (e) 1,734
Conso.
Total consolidated net debt (excl. op leases) 3,460
Total consolidated net debt (incl. op leases) 3,669
(a) These bonds are listed on the Luxembourg Stock Exchange. The corresponding prospectus on Luxembourg Stock Exchange website (http://www.bourse.lu/Accueil.jsp)
(b) Depending on the leverage ratio
(c) Swap instruments covering the SARF structure have been extended to 2019
(d) UK fleet financing maturing in 2017 with a two-year extension option
(e) Corresponds to the net book value of applicable vehicles, which is calculated on the basis of the purchase price and depreciation rates of corresponding vehicles (based on contracts
with manufacturers).
26Europcar Group in a Nutshell
60 years of operational excellence in a sophisticated industry
1 2
Multi-channel access to a large and Dense local networks serving
diversified customer base customers globally
Close to 6m diversified and Europcar’s network of c. 3,700(c) rental locations in 140+
complementary drivers countries including c. 1,900 in 9 corporate countries(c)
Wide distribution channels (2014)(a) Rental revenue by Rental revenue by
66% online (websites and GDS) geography (2014)(b) location (2014)(d)
Australia–New
64% direct (Europcar websites, Belgium Zealand
stations and call centers) 3% 7%
Portugal Germany
Rental revenue by customer (2014)(b) 5% 27%
Spain Airport
10% 42%
Business 26% Off-
Leisure 45% Know-how and Southern
Europe
Italy
11%
airport
58%
55% UK
France
infrastructure 16% 21%
developed and
refined over past
4 3
Flexible and active fleet 60 years State-of-the-art systems
management processes
Significant portion of cars under buyback program (92% of fleet Greenway excellence: highly reliable and comprehensive IT
purchased in 2014)
Car purchases agreed c.1 year in advance to anticipate market
trends and readjusted throughout the year to ensure maximum Robust and fully integrated Revenue Capacity
Management (RCM) systems to sell:
reactivity to market demand…
… to optimize fleet utilization while fulfilling our customer needs The right product at the right price
Fleet financial utilization rate
76.4%
To the right customer, for the right
75.6%
duration, through the right channel
74.4%
With the right fleet (right size,
right location and right duration)
2012 2013 2014
(a) Distribution channels by # of reservations made in 2014
(b) Rental revenue excluding franchises
(c) 2014 figures (including Europ’Hall acquisition)
(d) Based on Rental revenue in Europcar 9 Corporate countries only
28Europcar’s key strengths
1 Market growth supported by structural trends in car rental and mobility solutions
2 Established leadership and innovation focus conferring significant competitive advantages
3 Diversified and low-risk business model
4 “Fast Lane” transformation setting the foundation for continued profitable growth
5 Superior financial performance
6 A management team with shared vision for Europcar and proven track record
291 Market growth supported by structural trends in car rental and mobility solutions
Car rental market growth Steady growth drivers
Car rental market growth in core Europcar Corporate countries in Europe(a)
4.2%
4.0%
Macroeconomic factors
3.3%
2.6% 2.4% 2.4% 2.5% GDP
Year-on-year evolution
3.6%
Leisure & air travel
(6.5)%
2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F Emerging countries
Car Rental market size (# of rental days)
International passenger arrivals
Real GDP Increasing cost of owning a car in
(a) Based on France, Germany, UK, Italy, Spain
Source: Euromonitor for international passenger arrivals, IMF for Real GDP, KPMG analysis for car
European countries
rental market size
Changing social habits
% of people ready to stop owning a car and use
car-sharing instead in Europe(a) Sharing economy
Social habits
34%
Green consciousness
Urban congestion & policies
10%
From ‘car-ownership’ to ‘car-usership’
2010 2012
(a) Based on average contribution rates for France, Germany, UK, Spain and Italy
Source: Cetelem observatory - 2010 and 2012 reports – based on a survey of 3,600 and 6,000
individuals respectively
302 Sustainable clear #1 position in Europe
Largest and densest local network – 2013 Unrivalled leader (#1 market share) – 2013(b)
1
> 1.5x
19%
3/4 (e)
1 13%
3
12% 11%
10%
2/3 2
1 2
3 3/4
1
1
2 1 4/5
1 2
>5
High entry requirements
3/4
>5
2 Large, high density network with c. 1,900 locations in 9
1
1 1 1
4
>5 Corporate countries(c)
2/3/4
4
3
1
2 Fleet scale: c. 190,000 vehicles(d)
1 1
2 1
1 1 A well recognized brand
1 2
3/4 Customer loyalty and corporate contracts
Complex operational systems and logistics platform
1
Corporate countries(b) Franchised countries(a) Management and financing know-how
Europcar’s # 1 position confers significant scale advantages in an industry with high entry costs and more
consolidation potential than in the US (Top 5 = 65% in Europcar European market vs Top 3 = 95% in US(f))
(a) Based on Euromonitor, Management (b) KPMG estimated Corporate market shares (i.e. based on the Corporate revenue, excluding franchisees) in Europcar 7 European Corporate countries in 2013
(c) Including Europ’Hall acquisition (d) Based on 2014 average fleet vehicle figure including Europ’Hall acquisition
(e) Before impact of Avis Budget group acquisition of Maggiore Group (independent rental operator in Italy) in March 2015 (f) Based on Euromonitor in 2013
Source: KPMG, Euromonitor, Management
312 Global reach through franchisees and partnerships
Europcar network of approximately 3,700 rental locations in 140+ countries
Europcar 2014 rental stations' split
1,192 3,653
1,098
826
2,034
165 719
216
548
262 208
444 9 1,619
Germany
Italy
Total
UK
France
Spain
Other
Europe
RoW
Other
Corporate and agents Franchises
Europcar 2014 brand revenue(a) (€bn)
0.8 2.8
2.0
Europcar Group Revenue of Revenue
revenue franchisees (b) under brands
Corporate countries Overall more than 140 countries (including franchisees) in 2014 €53m of fees currently generated through
international franchisee network
Partnerships Key partnerships in North America
18 GSAs signed in 2014, with 11 more to come in 2015, of which French franchisee Europ’Hall acquired in
International franchise
October 2014 (€23m 2014 net sales) – large
General Sales Agents 7 already signed YTD value creation potential still at hand
Worldwide coverage of both business and leisure customers
with broad network of franchisees maximizing capture of inbound/outbound traffic
(a) Estimated for franchises based on commissions received
(b) Not included in Europcar’s group revenues
322 Active growth and superior reach across channels and segments
45%(a) Large wins and Diversified and balanced distribution channels
Large customer retention (by number of reservations made in 2014)(b)
corporates support visible future
External
growth
booking External
Europcar websites booking
websites 22% channels(a)
30% 36%
Development supported
Business SMEs by the enhancement of Europcar
commercial skills booking
channels(a) GDS booking
64% channel
14%
Call centers
Vehicle 13% Stations
Enlargement of the
replacement current customer base 21%
Rising contribution of online bookings illustrated by the surge in
mobile sales (+73% in Q1-15 vs. Q1-14)
55%(a) Supported by GSA A win-win relationships with brokers and OTAs
Individuals strategy & eCommerce
development Only few worldwide car rental players with limited
number of desks available at airports
Flexible fleet capacity ensuring improved negotiating
Tour operators, power when comparing with fixed capacity industries
Built on balanced,
Leisure Brokers and profitable relationships
OTAs “Summer” prepayments from brokers, allowing car
rentals to control volumes despite seasonality
Volume commitment from brokers during the low
season
Commercial Ramp-up / renewed
partnerships partnerships Retail rates set by Europcar in its main markets and
brokers paid through a commission on those prices
(a) 2014 rental revenue by customer for Europcar 9 Corporate countries only
(b) 2014 figures for Europcar 9 Corporate countries only
333 De-risked, flexible and diverse fleet
De-risked and flexible fleet… …based on a diversified brand sourcing strategy
Fleet de-risking: 92% of Europcar 2014 fleet 2014 purchases among 39 different brands
provided by 18 car manufacturers
purchased with fixed buyback price pre-agreed
Limited residual valuation risk Others
7%
Strong & consistent buyback policy enables 6%
3%
33%
Europcar to maintain focus on core operations 6%
9%
Ensuring good visibility on fleet holding costs
10%
15%
11%
Recent and frequently renewed fleet
5 to 8-month buyback period favoured by Europcar to
manage inherent business seasonality
A wide range of car categories across utility
Fleet flexibility: short and long-term sourcing secured vehicles, small urban cars, luxury vehicles…
with long-term relationships with car manufacturers
Brand new cars with a 8.3 month average
Flexible asset backed financing with LTV(a) between holding period of vehicles sold/ returned in 2014
87% and 95% in 2014
Lower-risk business model with greater visibility on fleet costs and more competitive financing conditions
(a) Loan to value percentage defined as the quotient of (1) outstanding Indebtedness of Securitifleet Holding and any Securitifleet Company over (2) the Securitifleet total asset value
Source: Company information
344 “Fast Lane” in motion: building upon new foundations
Achievement to
5 strategic pillars Pursuing Fast Lane development going forward
date(a)
1
• Actions/investments to further develop offerings and services:
Grow our top line on a • Product/services innovations: ToMyCar, ToMyDoor…
sustainable basis
• New ancillary program development, CRM and RCM enhancement
• Privilege loyalty program 2014 relaunch
2 • Customer contact process and organization revamping
• Further actions identified including:
Differentiate our offer • Digital distribution channel acceleration
• Innovation in Mobility solutions (Lab)
3 • Actions/investments including:
• Shared Service Center (Portugal) implementation and extension
Improve our cost
• Ongoing IT transformation launched in 2013, with a clear roadmap
towards completion by 2020
structure
• Further actions identified including:
• Fleet holding period & remarketing
• Further network and non-fleet procurement optimization
4
Optimize our resource • Actions already taken to be rolled-out across countries:
allocation
• Talent pool management and PMO culture deployment
5 • People reviews / potential & performance implementation
• Further actions identified including:
Increase our
effectiveness • New organization structure (back office / front office rationalization)
(a) Management estimates
355 A flexible business model with strong financial performance
FY-14 vs FY-12
FY-12 FY-13 FY-14
1,936 1,903 1,979
Revenues (€m)
+2.2%
75.6% 76.4%
74.4%
Fleet financial Measure of internal Fleet financial
utilization rate efficiency utilization rate (%) +2.0ppt
284
Fleet cost per 260 248
Fleet cost per unit
unit monthly Measure of cost control
monthly average (12.7)%
average(a)
Semi fixed Measure of cost control &
Semi fixed costs
(€m)
502 492 511
~
~ +1.7%
costs(b) adaptability
(% of total
revenues)
25.9% 25.8% 25.8% ~
~ (0.1)ppt
213
Adj. Corp. EBITDA 157 x1.8
Adj. Corp. EBITDA
(defined as EBITDA post fleet D&A and 119 10.8%
(€m)
financing costs including operating
leases) 8.2%
(% margin) +4.6ppt
6.1%
(a) For fleet cost per unit per month, c. a thousand of non-car vehicles is also included. Fleet cost per unit per month include fleet holding cost per unit (excluding financial interests) and fleet operating cost per unit
(b) Including Personnel, Network, IT and HQ costs excluding non-fleet D&A
365 Lower risk, better balanced business and higher growth…
Clear #1 position in 1 19% 13% 12% 11%
European car rental
(13A market share) (a)
100%
100%car
carrental
rental 100% car rental 81% car rental 68% car rental(d)
8% 58% 70% 6%
50% 50% 50% 50%
70% 30% 70% 30% 70% 30% 70% 30%
90% 10% 90% 10% 90% 10% 90% 10%
De-risked fleet
% non-buyback fleet(b)
4% 3%
8% 6% 6% 8% 8% 6% 6% 6%
53% 53% 54% 45% 52%
63% 58% 70% 70%
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Belgium
business mix (split of 2014 revenues)
Australia–New Zealand (c)
3% International
7% International
Balanced and complementary
Portugal 27%
32%
5% International
Germany
By geography Spain 27% 42%
Group level 10%
26% Germany
Southern Italy North America 58%
Europe 11% UK 68% North America
21% 73%
France
16% (c)
By customer 45% 55% 45% 55% 38% 62% 43% 51% 6%
Business Leisure Business Leisure Business Leisure Business(e) Leisure Other
(c)
By location 42% 58% 67% 33% 69% 31% Undisclosed
Airport Off-airport Airport Off-airport Airport Off-airport
Note: All data for Sixt based on Car rental division only, except % Car rental among the Group
(a) Based on KPMG estimated Corporate market shares (based on corporate revenue, excl. franchisees) in Europcar 7 European Corporate countries; Before impact of Avis Budget group acquisition of Maggiore
Group (independent rental operator in Italy) in March 2015
(b) 2014 Fleet purchases not under buyback except for Avis that discloses proportion of rental car fleet not under buyback or subject to operating leases. Based on Car rental divisions only for Hertz and Sixt
(c) Based on 2013A data. Geographic split for Hertz based on Group revenues. (d) As per Sixt 18 May 2015 press release and following the IPO of Sixt Leasing, Sixt shall reduce its shareholding in Sixt
Leasing from 100% to around 40%. Sixt Leasing shall remain fully consolidated for the time being (e) Including Accident replacement (3% of total)
Source: Company information, annual reports of the groups: Avis, Hertz and Sixt
375 Guidance considerations
In 2015, the company will continue to manage profitable growth though its Fast Lane Program
and is expecting in 2016 and 2017 to continue to strongly improve its operational performance
2015 Guidance Mid-Term Guidance (2016-2017)
3-5% organic growth, essentially driven by volume effect with 3-5% organic growth per year, essentially driven by
Organic
relatively stable RPD volume effect, with relatively stable RPD
Revenues Full impact of the Europ’Hall acquisition(a)
Non-organic Currency favourable impact (British Pound and Australian
dollar)(b)
Adjusted Corporate EBITDA margin above 13% by the
Adjusted Corporate EBITDA around €245m driven by
Corp. EBITDA end of 2017 thanks to further deployment of the Fast Lane
growth in revenues and cost control initiatives
transformation plan, impacting both revenues & costs
Net Income excluding Non-
Net income excluding non-recurring items and associates,
Recurring Items and Associates n.a
and pro forma for refinancing around €125m(c)
and Pro Forma for Refinancing
Natural deleveraging driving corporate leverage below
Corporate Leverage Below 1.5x by the end of 2015 1x by the end of 2017, leaving headroom for selective
value creative opportunities
Dividend Policy Target pay-out ratio of at least 30% starting in 2017 (based on 2016 net income)
Source: Company annual reports and business plan. All figures at reported exchange rates, unless otherwise stated
(a) Europcar acquired EuropHall, one of its French franchisee, in Q4 2014. As a result, this company has been fully consolidated only for two months in 2014. On a standalone basis, EuropHall revenue amounted to c.
€23 million for the full year 2014
(b) Based on Europcar estimated annual average GBP/Euro exchange rate of 1.30, this should represent an incremental growth of c.100bps compared to full year 2014
(c) Net income excluding exceptional items (operational and financial), before associates, and adjusting financial expenses pro-forma for the full year effect of the repayment of the €324m bond, refinancing of the
€400m bond through the issuance of the €475m senior notes due 2022 at an issue price of 99.289% and a coupon of 5.75%, contingent to IPO, and refinancing of the RCF and SARF facility at improved terms
386 Corporate governance
• As of March 9, 2015, the Company adopted a dual governance structure with a Supervisory Board and a Management Board
• As from the listing of its shares on Euronext Paris, the Company intends to comply with all of the recommendations of the
Corporate Governance Code for Listed Companies of the AFEP and the MEDEF
Management Board Supervisory Board
• Composition:
− Jean-Paul Bailly (Independent) – Chairman
Philippe Germond
Chairman of
Caroline
Parot
− Pascal Bazin (Independent)
Management Deputy CEO &
Board CFO − Virginie Fauvel (Independent)
− Angélique Gérard (Independent)
− Jean-Charles Pauze (Independent)
− Sandy Miller (Independent)
− Patrick Sayer
Kenneth Fabrizio Ruggiero
McCall Head of
COO, Head of UK, Italy − Philippe Audouin
operations and and of
information
systems
mobility − Armance Bordes
− Eric Schaefer
• Creation of an Audit Committee and a Nominations and Compensation
committee
39Adjusted Corporate EBITDA: the key financial indicator for Europcar
Operating Income Statement
Drivers
Nb. of rental days
Rental revenues x
Total revenue generation Revenue per day (RPD)
Other revenues
(Fuel revenues, franchising fees and other
revenues)
- = Adjusted Corporate EBITDA
Non-GAAP measure
Nb. of rental days
Fleet costs (incl. depreciation and /
insurance costs) c.38% Fleet financial utilization rate
variable
x
Fleet cost per unit
Variable
Operating Costs
Rental related costs
c.12% Rental days
variable
Revenue related costs
c. 70% variable c.14% Revenue
variable
costs vs.
c. 30% semi Fleet financing costs
c.7% Average fleet
fixed costs(a) variable
Fixed /
Var.
Personnel, Network, IT and HQ costs
c.29%
fixed/variable
% weight out of total operating costs base down to Adj. Corp. EBITDA (based on 2014 figures)
(a) Company estimates
40Glossary (1/2)
Business customers: include corporations, small and medium-sized businesses, government agencies and other organizations which rent cars as
well as entities renting cars to provide vehicle replacement services
Corporate countries: countries where Europcar owns and operates its own network, where corporate-operated stations are located (Germany, UK,
France, Italy, Spain, Portugal, Belgium and Australia/New Zealand)
Adjusted Corporate EBITDA: EBITDA less fleet depreciation, fleet operating lease rents and fleet financing costs
Fleet: all vehicles operated by the car rental company available or not for rent which includes cars and vans
Fleet Cost per Unit per month: defined as total monthly fleet costs (including fleet holding and fleet operating costs but excluding financial interests
included in fleet lease charges) divided by the average fleet over the period
.
Fleet holding costs: include (A) Costs related to rental fleet agreements, which consist of (i) “depreciation” expense relating both to vehicles
purchased with manufacturer or dealer buy-back commitments and to “at risk” vehicles (based, with respect to vehicles purchased with a buy-back
commitment, on monthly depreciation rates negotiated under the buy-back agreements, net of volume rebates, and with respect to “at risk”
vehicles, to the difference between the acquisition cost of the vehicles and the estimated residual value, the value of “at risk” vehicles being
adjusted monthly on the basis of the vehicles’ market values) and (ii) charges under operating leases; (B) Acquisition and sale-related costs, which
include principally (i) the cost of vehicle accessories; (ii) costs relating to the conditioning of new vehicles; and (iii) costs relating to disposal of
used vehicles and of vehicles purchased in connection with buy-back programs; and (C) Taxes on vehicles.
Fleet operating, rental and revenue related costs: include (A) Fleet operating costs, which include insurance (the costs of car insurance covering
civil liability and damage to vehicles, as well as self-insurance costs), repairs and maintenance costs and costs incurred for damaged and stolen
cars, as well as the costs of reconditioning vehicles for repurchase by the car manufacturer or dealer; (B) Revenue-related commissions and fees,
which include commissions paid to agents, such as personnel costs and station overhead (excluding vehicle fleet), as well as commissions paid to
travel agents, brokers and other commercial partners and fees and taxes paid for airport and train station concessions; and (C) Rental related
costs, which include the cost of transferring vehicles from one site to another, vehicle washing costs and fuel costs.
Fleet financial utilization rate: number of actual rental days as a percentage of the theoretical total potential number of days of the fleet. The
theoretical total potential number of days of the fleet is equal to the number of vehicles held over the period, multiplied by the total number of days
in the period
41Glossary (2/2)
Franchising: arrangement where the franchiser grants the franchisee the right to use its trademark or trade-name as well as certain business
systems and processes, to produce and market a good or services according to certain specifications. In exchange, the franchisee usually pays
the franchiser an entry fee plus a percentage of sales revenues as royalty
GDS (Global Distribution System): computerized reservations systems operated by third parties and used by intermediaries such as travel agents
and travel operators to make reservations with the Europcar Network
GSA (General Sales Agent): general sales representative that promotes and sells the services offered by Europcar in a specific country or region
in consideration of a commission
GreenWay® system: software application, owned by Europcar, offering a comprehensive business solution mainly in the areas of fleet
management, e-commerce, reservations and global distribution systems and rental operations
.
Leisure customers: include not only individual travelers booking vacation car rentals but also people renting to meet other personal needs
Net rates: brokers selling at any price, ie brokers revenue is the gap between Europcar’s selling price and their selling price (usually offered to TOs
for package, brokers with Keddy and destinations where brokers are more present than Europcar)
Operating lease vehicle: agreement by which a vehicle is leased to a car rental company, which pays periodically on a relatively short-term basis;
at the end of the operating lease, title does not pass to the car rental company
Rental Day Volume: number of vehicles rented over a period of time
RCM: Revenue Capacity Management
Retail rates: Europcar setting the price and paying a commission to brokers preventing them from selling at a lower price than Europcar’s
RPD (Revenue Per Day): rental revenue divided by the Rental Day Volume
Vehicle replacement: business involving principally the rental of cars to individuals whose rental charges are wholly or partially paid or reimbursed,
by insurance companies, vehicle leasing companies and vehicle dealers and other entities offering vehicle replacement services, with whom
Europcar has a direct contractual relationship
42Important Legal Disclaimer / Contacts
DISCLAIMER
The document has been prepared by Europcar (the “Company”). Recipients should conduct and will be solely
responsible for their own investigations and analysis of the Company. The Company has no obligation to
update the document or to correct any inaccuracies herein.
None of the Company nor its respective employees or officers, makes any representation or warranty, express
or implied, as to the accuracy, relevance and/or completeness of the document or the information, forward-
looking, statement contained herein and the Company shall not incur any liability for the information contained
in, or any omissions from, the document. In particular, but without prejudice to the foregoing, no
representation or warranty is given as to the achievement or reasonableness of any projections, targets,
estimates or forecasts, and nothing in the document is or should be considered as a representation as to the
future. Forward-looking statements are based on management's current expectations or beliefs on or about
the date of the document and involve risks and uncertainties that could result, but not limited to, in different
results from those described in the forward-looking statements and risk described in the documents the
Company filed with the Autorité des Marchés Financiers (French securities regulators). The Company does
not undertake, nor have any obligation to provide any updates or to revise any forward-looking statements in
order to reflect any events or circumstances that may occur or arise after the date of the Presentation.
INVESTOR RELATIONS
Aurélia Cheval +33.1.30.44.84.40 aurelia.cheval@europcar.com
Investor Relations +33.1.30.44.98.98 investor.relations@europcar.com
For all financial or business information, please refer to our IR website at: finance.europcar-group.com
43You can also read
