ESTERO, Fla., Nov. 17, 2015 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) ("HGH" or the "company") today laid out
plans for the company, excluding its equipment rental business
("Hertz Global"), at its Investor Day discussion to achieve Hertz
Global's full potential as the world's leading car rental
company. The company expects Hertz Global's Adjusted
Corporate EBITDA (earnings before interest, taxes, depreciation and
amortization) margins to be between 16 to 18 percent within a
three- to five-year timeframe. During a discussion with more than 200 investors and financial analysts in
New York, the company's senior
management team detailed plans for investments and initiatives for
its core car rental business that will support three pillars:
winning with technology, leading in cost and quality, and earning
customer preference while delivering revenue growth.
President and Chief Executive Officer John Tague said the 16 to 18 percent Adjusted
Corporate EBITDA margin target for Hertz Global is indicative of
its opportunity for financial margin expansion during the course of
its full potential plan. In 2015, management expects Hertz Global
to reach an Adjusted Corporate EBITDA margin of approximately 10
percent, an improvement over its 2014 Adjusted Corporate EBITDA
margin of 7 percent.
"2015 has been a transition year for the company," Tague said.
"Through our work to date, we are building a track record of
enhanced execution. This, together with our 2016 preliminary
guidance, is beginning to show in our results and, we believe,
will enable us to realize the full potential of our business for
our customers, our employees and our investors."
In July 2015, the company
completed its financial restatement and is making ongoing
remediation to ensure continued compliance. In addition, the
company completed the systems integration of Dollar and Thrifty in the third quarter
2015, and completed hiring of a
senior management team for its equipment rental business ("HERC")
with public company capabilities in preparation for the separation
of HERC to a stand-alone business as early as mid-2016.
Earlier this month, the company completed its move into a
consolidated corporate headquarters in Estero, Florida.
PRELIMINARY GUIDANCE FOR 2016
During the investor discussion, management provided preliminary
guidance for 2016, which includes:
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Preliminary 2016
Guidance
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Adjusted
Corporate EBITDA1 Consolidated HGH, $M
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1,700
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to
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1,800
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Adjusted
Corporate EBITDA1 HERC, $M
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625
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to
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675
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Adjusted
Corporate EBITDA1 Consolidated Hertz Global,
$M
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1,075
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to
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1,125
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US RAC depreciation
per unit per month, $
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290
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to
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300
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US RAC rentable fleet
capacity growth, %
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(0.5%)
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to
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0.5%
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Net consolidated
non-fleet capex, $M
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250
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to
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275
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US Car rental revenue
growth
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2.5%
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to
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3.5%
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FULL POTENTIAL PLAN DETAILS FOR HERTZ GLOBAL
- Starting in 2016 and continuing through 2018, Hertz Global is
targeting $100 million in annual
investments to develop new technology platforms and systems,
improve customer experience and strengthen the company's four car
rental brands.
- Technology investments will create a touchless, personalized
customer experience from booking to return. All technology
investment will be based on a "mobile first" approach. IT
development began in the third quarter 2015 and will occur over the
next 36 months in three phases: customer interface and payments;
fleet, counter and personalization; and rates and
reservations.
- The company announced that, in addition to delivering on its
previously stated $300 million cost
reduction goal by the end of 2016 for Hertz Global, it expects to
achieve an additional $250 million of
cost savings in 2016. These will be achieved by increasing fleet
efficiency and reducing fleet cycle time, improving efficiency
through process and automation, and applying more sophisticated
staffing modeling in operations.
- Investments in customer experience through operational
excellence are built around five key drivers of customer
satisfaction – clean and safe vehicles, speed of service, courteous
and friendly employees, ease of service and effective service
recovery.
- The company is investing in each of its car rental product
brands: Hertz, Dollar, Thrifty and
Firefly. In 2016, the company expects to roll out new positions for
each of its brands.
- The company expects U.S. car rental revenues to grow
between 2.5 to 3.5 percent, while it expects the U.S. rental car
industry to grow at a rate of approximately 2.7 percent. In
addition to growing ancillary revenue through customer options,
Hertz Global will strengthen its core revenue through a better
revenue management model and a reshaping of its go-to-market
approach.
HERTZ GLOBAL HOLDINGS, INC. INVESTOR DAY PRESENTATION
AVAILABLE FOR VIEWING
Investor day slides are available
here: http://ir.hertz.com/events-presentations
ABOUT HERTZ GLOBAL Holdings, Inc.
Hertz Global Holdings, Inc. operates the Hertz, Dollar, Thrifty
and Firefly car rental brands in more than 10,000 corporate and
licensee locations throughout approximately 150 countries in
North America, Europe, Latin
America, Asia, Australia, Africa, the Middle
East and New Zealand. Hertz
Global Holdings, Inc. is one of the largest worldwide airport
general use car rental companies
with more than 1,600 airport locations in the U.S. and more than
1,400 airport locations internationally. Product and service
initiatives such as Hertz Gold Plus Rewards, NeverLost®,
Carfirmations, Mobile Wi-Fi and unique vehicles offered
through the Adrenaline, Dream, Green and Prestige Collections set
Hertz Global Holdings, Inc. apart from the competition.
Additionally, Hertz Global Holdings, Inc. owns the vehicle leasing
and fleet management leader Donlen Corporation, operates the Hertz
24/7 hourly car rental business in international markets and sells
vehicles through its Rent2Buy program. The Company also owns Hertz
Equipment Rental Corporation ("HERC"), one of the largest equipment
rental businesses with more than 350 locations worldwide offering a
diverse line of equipment and tools for rent and sale. HERC
primarily serves the construction, industrial, oil, gas,
entertainment and government sectors. For more information about
Hertz Global Holdings, Inc., visit: www.hertz.com.
1 Adjusted Corporate
EBITDA
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Net income before net
interest expense, income taxes, depreciation (which includes
revenue earning equipment lease charges) and amortization as
adjusted for car rental fleet interest, car rental fleet
depreciation, car rental debt-related charges, and for certain
other charges such as non-cash stock-based employee compensation
restructuring and restructuring related costs; equipment rental
spin-off costs; impairments and asset write-downs; acquisition
costs, integration costs, relocation costs and other extraordinary,
unusual or non-recurring items.
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Adjusted Corporate
EBITDA Margin
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The ratio of Adjusted
Corporate EBITDA to total revenues.
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Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin
are non-GAAP measures within the meaning of Regulation G. In
conformity with Regulation G, information for Hertz Global Holdings on a segment basis
required to accompany the disclosures of non-GAAP financial
measure, including a reconciliation of the non-GAAP measures
discussed in this press release to the most directly comparable
financial measures calculated and presented in accordance with
generally accepted accounting principles in the United States, appears within the
supplemental schedules that have been filed with the Securities and
Exchange Commission and are available on the Company's website at
http://ir.hertz.com/events-presentations.
Because of the forward-looking nature of the Hertz Global
Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin
forecast, specific quantifications of the amounts that would be
required to reconcile a pre-tax income forecast are not
available. The Company believes that there is a degree of
volatility with respect to certain of the GAAP measures, primarily
related to fair value accounting for financial assets (which
includes derivative financial instruments), income tax reporting
and certain adjustments made to arrive at the relevant non-GAAP
measures, which preclude from providing accurate forecast of GAAP
to non-GAAP reconciliations. Based on the above, the
Company believes that providing estimates of the amounts that would
be required to reconcile the range of the non-GAAP Adjusted
Corporate EBITDA and Adjusted Corporate EBITDA Margin for Hertz
Global would imply a degree of precision that would be confusing or
misleading to investors for the reasons identified above.
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SOURCE Hertz Global Holdings, Inc.