EUROPCAR GROUP THE LEADING EUROPEAN CAR RENTAL COMPANY AT THE HEART OF NEW MOBILITY SOLUTIONS - Europcar's investor ...
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EUROPCAR GROUP THE LEADING EUROPEAN CAR RENTAL COMPANY AT THE HEART OF NEW MOBILITY SOLUTIONS INVESTOR PRESENTATION JUNE 1st 2016
European #1 with global reach in the growing vehicle rental and mobility solutions markets
Strong brand recognition(d)
Europe’s #1 vehicle rental company(a), with €3.0bn(b) of revenues under
Clear leader Europcar brands in 2015
with highly
recognized brand Over 65 years of experience in the attractive and growing vehicle rental and
mobility solutions market Europe’s Leading Car Rental
Company 2015, 2014 & 2013
#1 market share (2014)(a)
c.5.5 million drivers in 2015
Large and 19%
diversified Wide and diversified customer base
1.5x
customer base
Successful relaunch of Privilege loyalty program in 2014 13%
(e)
1
2
Well balanced across 9 Corporate countries with 1,654 stations operated
directly or by agents in 2015
High density
network Overall, c.3,600 locations in over 140 countries (including stations operated by
agents and franchisees) in 2015
Strong performance
yoy +8.2% +17.8% +90bps
growth
(f)
2,142
FY 2015A (€m)
251 11.7%
A diversified, flexible and large fleet of c.205,000 vehicles in Europcar
Flexible and Corporate countries in 2015(c)
low-risk fleet
c.92% of 2015 fleet purchased with fixed pre-agreed buy-back commitments Revenue Adj. Corp. Margin
EBITDA
(a) 2014 market shares based on KPMG study on the basis of the mid-point of estimated market shares and, based on company revenues (excluding franchisees)
(b) Based on €2.1bn total Europcar revenue reported, adjusted for €0.9bn revenue generated by Europcar franchisees including InterRent with royalties received deducted of (€0.04)bn
(c) 2015 average fleet of Europcar
(d) Based on world and national awards recently received by Europcar, as well as active sponsorship and co-marketing campaigns promoted by Europcar
(e) Before impact of Avis Budget group acquisition of Maggiore Group (independent rental operator in Italy) in March 2015
(f) Including €53m of royalties and fees from franchisees
2
Business highlights
Recent initiatives and achievements
Operating performance and financial update
Our success and our commitments
Appendix
3
Europcar’s exciting journey of sustainable profitable growth through Fast lane program...
Fast Lane strategy for
Fast Lane objectives 2017 midterm guidance
next phase
Grow our top line
Differentiate our offer Reinforce Europcar position as a Adjusted Corporate EBITDA
Improve our cost structure leader to allow sustainable growth
margin above 13%
Optimise our resource allocation Pursue operational excellence
Increase our effectiveness
Invest for future growth
250
213
11.6%
10.8%
157
119
8.2%
92
4.7% 6.1%
FY-11 FY-12 FY-13 FY-14 LTM Mar-16
Adj.Corp.EBITDA (€m) Adj.Corp.EBITDA LTM margin
CONTINUOUS INCREASE IN ADJUSTED CORPORATE EBITDA AND PROFITABILITY
4
… to be further supported by the acceleration of Europcar’s acquisition model
Our philosophy Key Pillars
Bolt-on opportunities
Bolt-on opportunities
Priority focus on Focus on customer base / offering / geographical expansion
value-added acquisitions
Strong identified pipelines
Targeting offering, Significant synergies potential (integration, shared support functions…)
customer base and
geographical expansion
Franchisee opportunities
Strict financial criteria aiming at
quick pay-back, mainly for bolt-
ons and franchisees, Unique opportunities for increasing network density and geographical expansion
Intimate knowledge of potential targets
New mobility solutions
opportunities being assessed Identified synergies and quick wins with limited implementation costs/time
based on their strategic value
Large identified pipeline Companies and solutions from new mobilities sector
of small to mid-size
opportunities Enhance Europcar penetration in new mobility business models while reinforcing
Europcar Lab and accelerate its development
Significant Financial headroom Focus on solutions which may benefit from unique Europcar features (network
thanks to IPO and Cash density, fleet scale management, financing know-how…) to favour quick
Generation development / accelerated go to market
Special emphasis on solutions potentially benefitting our existing customer base and
therefore offering strong synergy / complementarity potential in the mid term
5
Europcar’s Key Strengths
1 Market growth supported by positive structural trends in car rental and mobility solutions
2 Established leadership further supported by franchisees and partnerships
3 Diversified and low-risk business model focusing on profitability
Successful ongoing implementation of second phase of “Fast Lane” transformation
4 program to continue delivering profitable growth
5 Lower risk, better balanced business benefitting from higher profitable growth potential
6 Experienced management team and proven track record
6
Europcar’s Key Strengths
Market growth supported by positive structural Established leadership further supported by
trends in car rental and mobility solutions franchisees and partnerships
Car rental market growth Unrivalled leader (#1 market share) – 2014(b)
Car rental market growth in core Europcar Corporate countries in Europe(a)
4.2%
3.3% 4.0%
2.6% 2.4% 19%
2.4% 2.5% > 1.5x
Year-on-year evolution
3.6%
(c)
13%
12% 12% 11%
(6.5)%
2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F
Car Rental market size (# of rental days)
International passenger arrivals
Real GDP (b) Market shares based on KPMG Study, on the basis of the mid-point of estimated market
(a) Based on France, Germany, UK, Italy, Spain shares, based on company revenues excluding franchisees
Source: Euromonitor for international passenger arrivals, IMF for Real GDP, KPMG analysis for car (c) Before impact of Avis Budget group acquisition of Maggiore Group in March 2015
rental market size
Europcar’s global network (end 2015)
Changing social habits
Sharing economy
Green consciousness
Urban congestion & policies
Behavoiral shift from ‘car-ownership’ to ‘car-usership’
with a sharp increase in the % of people ready to forgo
owning a car and use car-sharing instead in Europe(d) Corporate countries
Overall more than 140 countries
Partnerships
(d) From 10% in 2010 to 34% 2012, based on average contribution rates for France, Germany, Key partnerships in North America
UK, Spain and Italy, from Cetelem observatory – 2010 and 2012 reports based on a survey International franchise
of 3,600 and 6,000 individuals respectively c.30 GSAs General Sales Agents
7
Europcar’s Key Strengths: Diversified and Low Risk Business Model
High fleet utilisation rate
Geographical footprint(a)
Quarterly revenues (€m) vs. fleet utilisation rate (in %)
2015 revenue breakdown Average fleet
156 190 225 185 172 209 243 196 177
Australia- (‘000 units)
New-Zealand 693
Belgium 7%
3% 646
Germany
Portugal 26%
5%
25% 547
Southern Spain
Europe 10% 495 489
464
Italy
10% 414 418
80%
80%
UK 374
France 22%
17% 77%
(a) Rental income excluding franchises 76%
74% 74% 74% 74% 73%
Network (b)
By # of Stations By Revenue
Airport
16%
Airport
42%
Off-airport
58%
Off-airport
84% Q1- 14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16
(b) 2015 figures based on the percentage of the number of directly- and agent-operated stations and Quarterly revenues (€m) Fleet utilization (%)
of the Group’s rental revenues in Corporate Countries (excluding fees received from franchises)
between stations located at airports and other locations
92% of the Europcar 2015 fleet purchased with fixed buy-back commitments pre-arranged
8
Europcar’s Key Strengths: Integrated Approach focusing on Sustained Profitable Growth
Volume
Growth
Investments Financial
for Future Utilization
Growth Rate
Sustained
Profitable
Growth
Optimizatio
n of Cost RPD
Structure
9
Europcar’s Key Strengths: Lower risk, better balanced business
and higher growth potential
Clear #1 position in European car
rental
1 19% 13%
(14A market share) (a) 100% car rental 100% car rental
8% 51%
50% 50%
70% 30%
De-risked fleet 70% 30%
% non-buyback fleet
90% 10% 10%
90%
Belgium Australia–New
International
complementary business
3% Zealand
Portugal 7% 30%
(c)
By geography 5%
mix (split of 2015
Germany
Balanced and
Group level Spain 26%
25%
revenues)
10%
Southern Italy UK Americas
Europe 10% France 22% 70%
17%
(b)
By customer 44% 56% 40% 60%
Business Leisure Business Leisure
(d)
By location 42% 58% 70% 30%
Airport Off-airport Airport Off-airport
11.9% 12.3%
11.7%
Year-on-year evolution
11.5% 11.6%
11.2%
11.7% 10.6%
10.9% 11.4%
10.3% 10.5% 10.7% 10.6%
Adj. Corporate EBITDA LTM evolution 9.7%
Q1-15 Q2-15 Q3-15 Q4-15 Q1-16
Europcar Avis Group Avis International
Source: Avis Budget Investment presentation May 2016 and quarterly financial results
(a) Market shares based on KPMG Study, on the basis of the mid-point of estimated market shares, based on company revenues excluding franchisees
(b) Based on 2015 rental revenue for 9 Corporate countries alone for Europcar
(c) Based on 2015 rental income excluding franchisees for Europcar
(d) 2015 figures based on the percentage of the number of directly- and agent-operated stations and of the Group’s rental revenues in Corporate Countries (excluding fees received from franchises) between stations
located at airports and other locations for Europcar
10Europcar’s Key Strengths: Successful ongoing implementation of second phase
of “Fast Lane” transformation program
From well engaged key pillars continuing to deliver
FOSTER SEGMENTS AND
1 Commercial Strategy BRANDS FOOTPRINT
EFFICIENCY BENEFITS ON
2 Shared Service Center Logic TRACK
IMPROVING COVERAGE AND
3 Network Optimization EFFICIENCY GAINS
To new programs to sustain and enhance long term growth
COMPREHENSIVE PROGRAM
4 Customer Journey/Experience LAUNCHED IN 2016
€10m+ investments over 2016-
2018 included in guidance
INCREASED SUPPORT TO FAST
5 IT / Digitalization LANE INITIATIVES AS PLANNED
with strong focus on full digital
journey
11Europcar’s Key Strengths: Secured and Optimized financing structure
Corporate Net Debt
March
€million Pricing Maturity 31, 2016 • Only one Corporate bond for €475m (June 2022)
with €27m annual interest.
High Yield Senior Notes 5.75% 2022 475
Senior Revolving Facility (€350m) E+250bps 2020 120 • On June 1, 2016 we tap this bond for an
IN Balance Sheet
FCT Junior Notes, accrued interest not yet incremental amount of €125 M with a yield of
-163
due, capitalized financing costs and other 4.88% (improvement of 100bp)
Gross Corporate debt 432
Short-term Investments and Cash in operating and holding • Very low leverage at 1x
-185
entities
CORPORATE NET DEBT 247 • Rating: S&P B+, Moody’s B1
Fleet net debt fully Asset-Back with vehicules
March
€million Pricing Maturity 31, 2016 • Successful refinancing from July 2014 to June
High Yield EC Finance Notes 5.125% 2021 350 2015 with improved terms on all IN BS key debt
Senior asset revolving facility (€1.1bn SARF) E+170bps 2019 584 lines
IN Balance Sheet
FCT Junior Notes, accrued interest, financing capitalized
161 • SARF single A rated
costs and other
UK, Australia and other fleet financing facilities various 409 • Secured interest costs thanks to swap up to
Gross financial fleet debt 1,504 €1.6 bn maturing up to 2019
Cash held in fleet financing entities and Short-term fleet investments -118
• Still room for improvement for OFF BS lines as a
Fleet net debt in Balance sheet 1,386 result of better performances and upgraded rating
in July 2015
OFF
BS
Debt equivalent of fleet operating leases - OFF BS 1,389
TOTAL FLEET NET DEBT (incl. op leases) 2,775
12Europcar’s Key Strengths: Experienced management team and proven track record
MANAGEMENT BOARD
Clear leadership and vision
Philippe GERMOND Caroline Parot
Chairman of the Management Board CEO Finance Knowledgeable and passionate team
− Appointed Chairman of the − Appointed member of the management
management board since March 2015 board since March 2015 International and local teams with
− Joined the group in 2014 as CEO − Joined the group in 2011
strong complementarity
Successfully led the transformation of
the company through “Fast Lane”
Strengthened corporate governance
Ken Mccall Fabrizio Ruggiero
Deputy CEO in charge of operations Head of Mobility Supported by a diversified and
− Appointed member of the management − Appointed member of the management experienced Supervisory Board
board since March 2015 board since March 2015
− Joined the group in 2010 − Joined the group in 2011
13Business highlights
Recent initiatives and achievements
Operating performance and financial update
Our success and our commitments
Appendix
14Recent Initiatives and Achievements
ONGOING IMPLEMENTATION OF FAST LANE – PHASE 2
1 Successful Deployment of InterRent
2 Launch of our promising Project Customer 360°
INCREMENTAL VALUE CREATION
3 Europcar Lab delivering first achievements with more to come
4 Ambitious external growth plan delivering significant synergies
151 INTERRENT DEPLOYMENT
1. InterRent Strategy
Concentrate on locations with highest market potential
Capitalize on volume strategy / high utilization
Continue to optimize dedicated costs while leveraging our
back office know how
Transform IR counters to dedicated structures as soon as
critical mass is reached
2. Investments to accelerate development Q1 Rental
Revenues at cc
New station openings and Recent launch in Germany +90.0%
+77.7%
87 stations in corporate countries and 64 stations in franchisee
countries at end of March 2016 +6.9%
Online marketing and IT investment notably to sustain direct
channel and improve ancillary sales Average RPD
Rental day volume
162 CUSTOMER 360°
A COMPREHENSIVE PROGRAM ADDRESSING ALL CUSTOMER TOUCH POINTS
A new CRM vision Market Initiatives
investments of +€10M over 2016-2018 New web campaigns
Kick–off in March 2016 Loyalty program
Gain more customer insights
To split the Customer base in «Clusters » based on value and homogeneous behaviors
To recognize « star customers » who have the highest value across all countries
To identify best prospects and new customers
Benefits
To refine and personalize communications towards our customers at any touch points
To maximize outgoing campaign results and efficiency (ROI, contact channels)
To improve process effectiveness and maximizing resource efficiency
To get new selling, relational and retention opportunities
173 EUROPCAR LAB DELIVERING FIRST ACHIEVEMENTS WITH MORE TO COME
Our program for the coming months
Accelerate the development plan of Car Sharing (B2B and
B2C) solutions
After Paris and London, Ubeeqo to launch its
multimodal platform for B2C in Brussels, Berlin and
Hamburg
Increasing number of RFI for Ubeeqo B2B solutions
among key accounts from Europcar customer base
Launch of prototypes / pilots with focus on identified
priorities:
Lease to share
Connected journey - contactless access
Partnership with Blablacar for On€Way in Italy
184 AMBITIOUS EXTERNAL GROWTH PLAN: ILLUSTRATIONS
OUR TRACK-RECORD DEMONSTRATES OUR ABILITY TO SOURCE
AND EXECUTE VALUE-ADDED TRANSACTIONS
Locaroise Acquisition in May 2016 (a) Europ’Hall Integration
# 3 French franchisee #2 French franchisee at the time of the
acquisition (October 2014)
€17m revenues generated through 19 locations and
an average fleet of 2,200 vehicles; high proportion of Smooth integration of Europ’Hall within
SME customers Europcar, demonstrating highly value accretive
feature of the transaction
Transaction : Cash out of €9m - estimated ~4x
Adjusted Corporate EBITDA pre synergies (b) Significant synergies achieved (Q1 16 vs Q1
15)
Significant synergies identified both in terms of
revenue and profitability: • Achieved savings on fixed costs following
the transfer of some functions to Shared
• Optimization of vehicle management and costs Service Center
through geographical continuity and fleet
consolidation
• Strong utilization rate enhancement: +c.5
points
• Strengthening of operating leverage, particularly
• Significant ancillary sales growth: +c.9%
through Shared Service Centers
• Implementation of the Group’s “Revenues and • Net Promoter Score sharp enhancement:
+16%
Capacity Management” strategy and tools
• Integration within Europcar’s IT system
(a) The finalization of this operation could take place in the coming weeks and is subject to customary closing conditions.
(b) Europcar Group estimate, based on 2015 figures
19Business highlights
Recent initiatives and achievements
Operating performance and financial update
Our success and our commitments
Appendix
20A FLEXIBLE BUSINESS MODEL WITH STRONG FINANCIAL PERFORMANCE
Change at
All data in €m, except if noted FY 2015 FY 2014 Change constant
currency*
Revenues 2,142 1,979 8.2% 5.8%
Rental Day Volume (million) 57.1 52.8 8.1%
RPD (€) 34.9 34.5 1.1% -1.2%
Average duration (day) 6.0 5.7 4.1%
Average Fleet (thousand)** 205.4 189.3 8.5%
Per unit fleet costs (€) -253 -248 1.8% -0.7%
Financial utilization rate 76.1% 76.4% -0.3 pt
Adjusted Corporate EBITDA 250.6 212.8 17.8% 15.6%
Adjusted Corporate EBITDA Margin 11.7% 10.8% +0.9 pt
Estimated Net Income Pro Forma*** 128 na
Operating Income IFRS **** 222 138 60.3%
Net Income IFRS -56 -112 -50.0%
Corporate Net Debt 235 581
Average Total Fleet Net Debt (incl. operating leases) 3,127 2,807
* UK pound and Australian dollar
** Fleet 181.8k as of December 31, 2015 vs. 173.5 k at as of December 31, 2014
*** See definition in Appendix
**** Includes non-recurring expenses for € 62m in 2015 vs. €116m in 2014.
21STRONG OPERATIONAL LEVERAGE DELIVERING PERFORMANCE
IN THE HIGH END OF THE GUIDANCE
Change at Key considerations
All data in €m FY 2015 FY 2014 Change constant
currency
Revenues organic growth at 4.9%
Revenues 2,141.9 1,978.9 8.2% 5.8% Solid improvement of margin
after variable cost at 43.1%
Fleet holding costs excluding estimated mainly reflecting:
-491.9 -442.7 11.1% 8.3%
interest included in operating leases
Fleet operating, rental, revenues and − Strong management of the utilization
-727.0 -686.3 5.9% 3.5% rate in a context of significant increase
insurance-related costs
of the fleet, revenues and upsell
Margin after variable costs 923.0 849.9 8.6% 6.4% dynamic
Margin Rate after variable costs 43.1% 42.9% +0.2pt − Fleet costs per unit (holding and
operating) continue to decline
Personnel, network, IT and other HQ costs -551.7 -510.6 8.0% 5.8%
− Other operating costs benefiting from
Fleet financing costs -120.7 -126.5 -4.6% -6.3% strong initiatives notably on insurance
Adjusted Corporate EBITDA 250.6 212.8 17.8% 15.6%
Operational leverage delivering:
Adjusted Corporate EBITDA Margin 11.7% 10.8% +0.9pt
− Efficiency gains on the network, control
of our semi fixed costs based
− Investments in Sales & Marketing to
sustain the profitable growth
ALL TIME HIGH ADJUSTED CORPORATE EBITDA
AT €251M, WITH MARGIN AT 11.7% Decrease in fleet financing costs
following the refinancing initiatives
between July 2014 and June 2015
22
25/02/20162015 WAS A TRANSITION YEAR
IFRS 2015 Net Loss Included
All data in €m FY 2015 FY 2014 Change
− Net negative impact of some
Adj. Corporate EBITDA 250.6 212.8 17.8% proceedings for approx. €25 m
(mainly Q1 2015 items)
Non-fleet D&A -32.8 -31.8 3.1% − Costs associated with the IPO for
€11m
Other non-recurring operating expenses -61.8 -115.7 -46.6%
− Reorganization charges linked to
Non-fleet financial expenses -162.1 -159.8 1.4% Fast lane for €24 million
Profit Before Tax -6.1 -94.5 -93.5%
− Cost linked to the reshape of the
capital structure:
Net tax expense -37.6 -10.7 • Redemption premium of
€56m
Associates -12.1 -6.5
• Write off of amortization
Net income -55.8 -111.7 -50.0% costs for €27m (non cash)
− Increase of tax expense mainly
related to the operations and to
tax audit provision
Estimated Pro forma Net Income at €128m − Deployment costs of Car2Go
(before associates and exceptional items and pro forma the Europe (associates)
refinancing initiatives)*
* See definition and reconciliation in Appendix
23CORPORATE NET DEBT BRIDGE OVER 2015
Corporate net debt /
Adjusted Corporate EBITDA
2.7x 0.9x
€159 M 24
54
73
40
24
581 (223) 15 12
56
27
235
(448)
Net Cash Non fleet Income tax Non Profit and Other Increase in Transaction, Redemption Amortisation Other Net
Corporate Adjusted Capex paid recurring loss interest investing capital premium, price of Corporate
Debt 2014 Corporate expenses on activities discount transaction, Debt 2015
EBITDA Corporate costs writte premium,
debt offs discount
costs
Corporate operating free cash
flow (before change in rental
fleet) €86M
24SOUND Q1 2016 KEY METRICS
Change at
All data in €m, except if noted Q1 2016 Q1 2015 Change constant
currency*
Revenues** 418 414 0.9% 2.3%
Rental Revenues 388 382 1.6% 3.0%
Rental Day Volume (million) 11.8 11.4 3.5%
Consolidated RPD (€) 32.9 33.5 -1.8% -0.4%
Average duration (day) 5.8 5.7 2.5%
Average Fleet (thousand)*** 177.3 172.4 2.9%
Per unit fleet costs per month (€) -259 -265 -2.5% -1.4%
Financial utilization rate 73.2% 73.6% -0.4pt
Adjusted Corporate EBITDA -5 -4 28.2% 21.3%
Adjusted Corporate EBITDA Margin -1.1% -0.9%
Last Twelve Months Adjusted Corporate EBITDA 250 219 13.8%
LTM Adjusted Corporate EBITDA Margin 11.6% 10.9%
Operating Income IFRS 7 -29
Net Income IFRS -20 -69
Corporate Net Debt at end of the period 247
Average Total Fleet Net Debt (incl. operating leases) 2,734 2,614
* UK pound and Australian dollar
** Total revenues excluding petrol income increase 2.8% at constant currency
*** Fleet 189.2 k as of March 31, 2016 vs. 191.5 k at as of March 31, 2015
25Q1 2106 - RENTAL REVENUE ORGANIC GROWTH AT 3.0%
Change at Key considerations
All data in €m Q1 2016 Q1 2015 Change constant
currency Strong dynamics in leisure segment
− Supported by Europcar brand and by the
Rental revenues 388.2 382.0 1.6% 3.0% accelerated deployment of the InterRent
brand,
Other revenue associated with car rental 17.7 20.2 -12.4% -11.1%
Franchising business 11.7 11.6 1.1% 1.5% − Southern Europe and Australia – NZ
particularly strong
Revenues 417.6 413.7 0.9% 2.3%
Softer trends in corporate
− SME development offsetting key accounts
soft demand in some countries
Q1 Rental Revenue at cc − In addition, car replacement business
declining in volume notably in the UK
− Belgium suffering from terrorists attacks
+3.5%
+77.7%
+6.9% RPD slightly declining due to mix and
geography effects :
+3.0% +1.3%
− Strong growth of InterRent brand
+0.7%
− Europcar brand up thanks to balanced
growth and ancillary sales while duration is
Average RPD Rental day volume increasing
-0.4%
− Realignment of van strategy with focus on
Average RPD Europcar lower categories and longer duration
Rental day volume InterRent Other revenue impacted by Petrol income
decrease, with limited impact on margins
26
05/09/2016Corporate net debt bridge over Q1 2016
Corporate net debt /
Adjusted Corporate 0.9x 1.0x
EBITDA
4 247
€5m
7
1
6
235
(5)
(2)
Net Corporate Debt Cash Adjusted Non fleet Capex Income tax paid Non recurring Accrued interest on Other including non Net Corporate Debt
Dec end 2015 Corporate EBITDA expenses corporate net debt cash items March end 2016
Corporate operating free cash flow (before change in
rental fleet) €0m vs €(35)m in Q1 2015
Source: Company
27 27Business highlights
Recent initiatives and achievements
Operating performance and financial update
Our success and our commitments
Appendix
28OUR SUCCESS AND OUR COMMITMENTS
2016 guidance in line with IPO commitments
Organic growth of 3% to 5%(a) leveraging our network capillarity and our well
Achieved upgraded balanced geographical coverage
2015 guidance − Main actions: Van & Trucks, SME, Direct to Brand, Customer Journey
1 and on track to deliver Adjusted Corporate EBITDA above €275m
2016 guidance − Including investment in IT, Customer Journey, and new mobility solutions
From 2016, Dividend pay out ratio at least 30% of Net Income(b)
− To be paid from 2017, based on prior year net income
Continuous delivering of 2017 objectives confirmed
organic profitable Revenues organic growth 3% to 5%
2 growth as committed at
Adjusted Corporate EBITDA margin above 13%
IPO thanks to Fast Lane
Natural organic deleveraging: organic leverage ratio below 1x at end 2017
Ongoing roll out of our Europ’Hall (2014) Ubeeqo (2014)
ambitious external
3 growth plan to
Locaroise (2016) E-car Club (2015)
accelerate value creation Solid pipeline of identified targets expected to deliver
(a) Excluding petrol income, at constant currency and scope
(b) Based on prior year net income
29EUROPCAR, A LOW RISK BUSINESS MODEL
WITH SIGNIFICANT VALUE CREATION POTENTIAL
ORGANIC
ACCELERATION
DEVELOPMENT FOR
POTENTIAL
THE MEDIUM TERM
Unrivalled leader in Enhance international
an attractive and footprint
growing market Significant Financial
Headroom thanks to IPO
Successful Fast Lane and Cash Generation Develop new
transformation mobility solutions
Seize bolt-on/
Efficient buy-back
franchisee
model
opportunities
30Business highlights
Recent initiatives and achievements
Operating performance and financial update
Our success and our commitments
Appendix
31FY 2015 OPERATIONAL CASH FLOW IMPACTED BY ONE OFF ITEMS
Management Cash Flow part 1 Key considerations
All data in €m FY 2015 FY 2014 Adjusted Corporate EBITDA up €38 m
Non recurring expenses cash out of
Adjusted Corporate EBITDA 251 213
€73m linked to a €12.5m litigation
Non-recurring expenses -73 -28 settlement, continuing Fast Lane
reorganization plans and bonus payment
Non-fleet capital expenditure (net of proceeds
-24 -22 following the success of Fast Lane first
from disposals)
tranche
Changes in non-fleet working capital -29 16
Change in provisions and employee benefits 1 11 2015 change in non fleet working capital
Income tax paid -40 -31
reflecting the growth in activity and
impacted by tax payment related to
Corporate operating free cash flow 86 158 previous years that should be paid back
in 2016
Cash interest paid on corporate High Yield bonds -65 -74
Increase in income tax cash out linked to
Cash flow before change in fleet asset base,
21 84 better performance
financing and other investing activities
2015 cash interest reflecting the benefit
of the refinancing occurred at the time of
the IPO end of June 2015
32FY 2015 CASH FLOW IMPACTED BY IPO AND CAPITAL STRUCTURE RESHAPING
Management Cash Flow part 2 Key considerations
Other Investing activities including
All data in €m FY 2015 FY 2014
− Car2Go capital increase to support new
Cash flow before change in fleet asset base, openings
21 84
financing and other investing activities − Ubeeqo capital increase leading to 75.7%
ownership
Other investing activities -31 -56
− E-car club acquisition in July 2015
Change in fleet asset base, net of drawings on fleet Change in fleet asset base and working
-87 -55
financing and working capital facilities capital facilities of €87 m driven by higher
level of fleet and by lower drawings on RCF
Capital increase 448 - following IPO
Change in High Yield -308 -17 Capital increase: gross proceeds at €475m
less fees paid as of Dec 31, 2015
Transaction cost cash out and swap impact -20 -19 Change is Corporate High Yield notes
negative at €308m :
Net change in cash before FX effect 22 -63
− repayment of the two former Corporate
bonds (i.e. €324m and €400m)
− issuance of the new Corporate bond for
€472m (€475m at issue price of 99.289%)
− €56m of redemption price
33Q1 2016 ADJUSTED CORPORATE EBITDA REFLECTING
INVESTMENTS IN FUTURE GROWTH
Change at Key considerations
All data in €m Q1 2016 Q1 2015 Change constant
currency
Solid margin after variable cost
mainly reflecting:
Revenues 417.6 413.7 0.9% 2.3%
− Fleet costs per unit (holding and
Fleet holding costs excluding estimated operating) continue to decrease
-104.9 -106.0 -1.0% 0.2%
interest included in operating leases
− Other operating costs benefiting from
Fleet operating, rental, revenues and strong initiatives on insurance
-155.3 -151.1 2.8% 4.2%
insurance-related costs
Operational leverage delivering:
Margin after variable costs 157.4 156.6 0.5% 1.8%
− Efficiency gains on the network, control
Margin Rate after variable costs 37.7% 37.9% -0.2pt of our semi fixed costs based,
Personnel, network, IT and other HQ costs -136.7 -133.5 2.4% 3.8% − Enabling Investments in InterRent
deployment, IT and the LAB
Fleet financing costs -25.3 -26.9 -5.8% -4.8%
Decrease in fleet financing costs
following the refinancing initiatives
Adjusted Corporate EBITDA -4.7 -3.7 28.2% 21.3%
between July 2014 and June 2015,
despite the strong growth in activity
Adjusted Corporate EBITDA Margin -1.1% -0.9% -0.2pt
34
05/09/2016Q1 2016 NET RESULT BENEFITING NOTABLY FROM THE REFINANCING
Key considerations
All data in €m Q1 2016 Q1 2015 Change
Adj. Corporate EBITDA -4.7 -3.7 28.2%
Non recurring operating income /
expenses:
Non-fleet D&A -8.2 -8.0 2.5%
− In 2016, reimbursement of tax payment
Other non-recurring operating income / related to previous years paid at end of
4.7 -32.7 -114.5%
expenses 2015
Non-fleet financial expenses -12.6 -28.2 -55.3% − In 2015, net negative impact of certain
proceedings and reorganization charges
Profit Before Tax -20.8 -72.5 -71.3% linked to Fast Lane transformation plan roll
out
Net tax expense 3.7 5.0
Benefit of the reshape of the capital
Associates -3.0 -1.9
structure following the IPO at end Q2
Net income -20.1 -69.5 -71.1% 2015
Deployment costs of Ubeeqo and
Car2Go Europe (associates)
35
05/09/2016Q1 2016 MANAGEMENT CASH FLOW
All data in €m Q1 2016 Q1 2015 Key considerations
Adjusted Corporate EBITDA -5 -4 Adjusted Corporate EBITDA down €1m
Non-recurring expenses 5 -4
Non-fleet capital expenditure (net of proceeds from disposals) -6 -6 Non recurring expenses cash linked to the
reimbursement of tax payment related to
Changes in non-fleet working capital and provisions 7 -16
previous years occurred at end of 2015
Income tax paid -1 -5
Corporate operating free cash flow 0 -35 2016 change in non fleet working capital and
Cash interest paid on corporate High Yield bonds 0 - provisions reflecting the improvement in the
Cash flow before change in fleet asset base, financing and management of the processes
0 -35
other investing activities
Other investing activities 0 - Change in fleet asset base and working
Change in fleet asset base, net of drawings on fleet financing capital facilities of €30 m driven by timing
-30 47 effect in a context of growing fleet
and working capital facilities
Capital increase 0 -
Net change in cash before FX effect -30 12
36P&L under IFRS and reconciliation with Adjusted Corporate EBITDA
P&L IFRS Full year Quarterly
in €m 2014 2015 Q1-2015 Q1-2016
Total revenue 1,979 2,142 415 418
Fleet holding costs (incl. lease related depreciation but excl. lease interests) (443) (492) (106) (105)
Fleet operating rental & revenue related costs (686) (727) (151) (155)
Total personnel costs (318) (347) (81) (83)
Network and HQ overhead cost excl. Depre. & amort. (199) (219) (53) (54)
Non-fleet depreciation and amortization (32) (33) (8) (8)
Other income 7 14 1 (0)
Operating expenses before non-recurring items (1,228) (1,312) (293) (300)
Interest expense included in fleet op leases rents (54) (55) (12) (11)
Other operating revenues and expenses (116) (62) (33) 5
Operating income 138 222 (29) 7
Financial results (IFRS) (233) (228) (43) (27)
Result before tax (95) (6) (73) (21)
Income tax credit / (expense) (11) (38) 5 4
Share of profit in associates (7) (12) (2) (3)
Net result (112) (56) (70) (20)
Operating income to Adj. Corp. EBITDA reconciliation Full year Quarterly
2014 2015 Q1-2015 Q1-2016
Operating income 138 222 (29) 7
Interest expense included in fleet op. lease rents 54 55 12 11
Non-recurring expenses 116 62 33 (5)
Adjusted Operating Income 308 339 15 12
Net fleet financing costs (73) (66) (15) (15)
Interest expense included in fleet op. lease rents (54) (55) (12) (11)
Non-fleet depreciation & amortization 32 33 8 8
Adjusted Corporate EBITDA 213 251 (4) (5)
372015 Pro Forma Net Income
Estimated Pro Forma Net Income corresponds to IFRS 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 for
a coupon of 5.75%, and refinancing of the RCF and SARF facility at improved terms
All data in €m FY 2015
IFRS Net Loss -56
Pro Forma on Interest on Corporate High Yield bonds 26
Pro forma Transaction cost amortization 7
Reversal of Corporate High Yield Bonds redemption premium 56
Reversal of the write off associated with Corporate High Yield Bonds reimbursment 27
Reversal of exceptional income / expenses 56
Reversal of Share of profit/(loss) of associates 12
Estimated Pro Forma Net Income 128
Reversal of exceptional income / expenses mainly corresponds to:
− Net negative impact of some proceedings
− Costs associated with the IPO
− Provision accrued in connection with tax audit
38Cash flows under IFRS
All data in €m, as of FY Dec-31, Q1 2015 and 2016 2014 2015 Q1 2015 Q1 2016
Profit/(loss) before tax (95) (6) (73) (21)
D&A, Impairment charge on goodwill, Changes in provisions and employee
95 45 23 (11)
benefits, Profit/(loss) on disposal of assets
Financing costs(a) 224 227 45 23
Cash generated from operations 224 266 (5) (9)
Changes in rental fleet (92) (233) (123) (46)
Changes in fleet working capital (74) 35 244 130
Changes in non-fleet working capital 50 (57) 1 30
Income taxes received/paid (31) (40) (5) (1)
Net interest paid (167) (137) (20) (20)
Net cash generated from (used by) operating activities (90) (166) 91 85
Net cash used by investing activities(b) (77) (55) (6) (6)
Net cash generated from (used by) financing activities(c) 103 243 (74) (109)
Net increase/(decrease) in cash and cash equivalents after effect of foreign
(63) 22 12 (30)
exchange differences
(a) Includes net interest costs of €(127)m, redemption premium of €56m, amortization of transaction costs of €42m and other non cash items of €1m in FY 2015 and €23m of net interest costs in Q1 2016
(b) Includes €(29)m of Acquisition of intangible assets and property, plant and equipment, €5m of proceeds from disposals, €(8)m of acquisition of financial assets and €(24)m of acquisition of subsidiaries in FY15
and €(7)m of Acquisition of intangible assets and property, plant and equipment, €0.6m of proceeds from disposals, €0.3m of disposals of financial assets
(c) Includes €448m of capital increase, €471m of issuance of bonds, €(780)m of redemption of bonds, €123m of change in other borrowings and €(20)m of payment of transaction costs in FY15 and €(109)m of
change in other borrowings in Q1 16
39IFRS Balance sheet at March 2016 – Non-audited
As at 31 March 2016 As at 31 March 2016
(in € million) 2016
(in € million) 2016
Equities and Liabilities
Assets
Total equity 514
Property, plant & equipment 84
Intangible assets 1,167 Liabilities
Other investments (non-current) 73 Borrowings (non-current) 803
Deferred tax assets 61 Derivatives (non-current) 61
Employee benefits (non-current) 128
Total non-current assets 1,386
Provisions (non-current) 24
Other non-current liabilities 0
Inventories 15 Deferred tax liabilities 130
Other investments 40 Total non-current liabilities 1,148
Loans -
Borrowings (current) 1,133
Income tax receivable 38
Income tax payable 26
Rental Fleet & Receivables 2,290
Fleet payables 835
Trade and other receivables 350
Trade and other liabilities 449
Cash and cash equivalents 134 Employee benefits (current) 3
Restricted cash 81 Provisions current 225
Total current assets 2,947
Total current liabilities 2,671
Total liabilities 3,819
Total assets 4,333 Total equity and liabilities 4,333
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)
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 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)
insurance (the costs of car insurance covering civil liability and damage to vehicles, as well as self-insurance costs); (C) 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 (D) 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: corresponds to the Number of Rental Days as a percentage of the number of days in the fleet’s financial availability
period. The fleet’s financial availability period corresponds to the period during which the Group holds vehicles.
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
41Glossary (2/2)
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
Loan to value: corresponds to the indebtedness of Securitifleet Holding, the Securitifleet Companies and EC Finance Plc divided by the total value
. of the net assets on the balance sheets of these companies.
Margin after variable costs: corresponds to the total revenues less Fleet holding costs and Fleet operating, rental and revenue related costs
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
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