ehi Car Services Limited

Transcription

1 ehi Car Services Limited 2017 second quarter results August 2017

2 Disclaimer Certain statements in this presentation are forward-looking statements, which are statements relating to future events, future financial performance, strategies, expectations and competitive environment. These statements are based on current expectations, estimates, forecasts and projections about the industry in which the Company operates, and management s beliefs and assumptions. In some cases, forward-looking statements can be identified by the use of words such as expects, plans, will, estimates, projects, intends, anticipates, believes, confident and variations of such words and similar expressions. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements as a result of various factors, including those risks and uncertainties described in the Company s filings with SEC. The information contained herein (including, among others, the market data, industry data and other industry statistics included in this presentation from public or third party sources) has not been independently verified and thus no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither the Company nor any of its respective directors, officers, employees, advisors, affiliates or agents shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. This presentation speaks as of the date hereof, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. The information presented or contained in this presentation is subject to change without notice. Neither the delivery of this presentation nor any further discussions of the Company or any of its affiliates, shareholders, directors, employees, agents, advisors, representatives or underwriters with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date. This presentation includes certain non-gaap financial measures, which are different from financial measures calculated in accordance with U.S. GAAP. Such non-gaap financial measures should be considered in addition to and not as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. In addition, the definition of adjusted EBIT and adjusted EBITDA in this presentation may be different from the definition of such term used by other companies, and therefore comparability may be limited. 1

3 Q financial & operating highlights Q Q RMB501.3mm Net revenues RMB639.7mm Gross profit margin 28.2% 29.1% RMB0.8mm Net Income RMB30.4mm RMB60.3mm Adjusted EBIT RMB95.9mm Adjusted EBIT 12.0% 15.0% margin RMB217.9mm Adjusted EBITDA RMB286.2mm Adjusted 43.5% 44.7% EBITDA margin 37,450 Average available fleet size 45, % Maintain industry-leading rental fleet utilization rate of over 70% 72.7% 2

4 1H 2017 financial & operating highlights 1H H 2017 RMB961.8mm Net revenues RMB1,255.3mm Gross profit margin 28.2% 30.1% RMB(2.9mm) Achieve bottom-line profitability RMB61.2mm RMB115.0mm Adjusted EBIT RMB190.7mm Adjusted EBIT 12.0% 15.2% margin RMB419.8mm Adjusted EBITDA RMB558.1mm Adjusted 43.6% 44.5% EBITDA margin 3

5 Leading car rental and car services provider with integrated business model ehi s unique business model Our leading position in China s market Car rentals (B2C) Car services (B2B) Single-strategy market players Limousine service Avant-garde mobile rideshare Market opportunities in China! ~18% CAGR 2013A-2017E! US$4.4bn market size! Opportunities from car sharing! ~15% CAGR 2013A-2017E of base market! US$46bn potential white space opportunity for individual demand! Opportunities from car-hailing and ride-sharing Why we adopt the integrated business model! Leverage our proprietary technology and mobile infrastructure to improve customer experience! Capture complementing demand cycle to maximize fleet utilization! Share brand equity and cross-selling opportunities! Capture evolving market opportunities! Comprehensive product offerings to meet diversified demand Source: Frost & Sullivan, data as of December 31,

6 Consecutive growth with industry-leading fleet utilization rate Average available fleet size 1 9,392 9,689 10,241 10,875 11,793 14,785 16,419 16,305 20,997 24,175 28,499 32,255 34,334 37,450 41,742 42,712 44,962 45,531 Total fleet RevPAC 2 (RMB) Rental fleet utilization rate 3 68% 69% 72% 73% 71% 70% 70% 73% 71% 72% 74% 70% 75% 71% 72% 71% 74% 73% Net revenues 4 (RMB mm) Car rentals Car services Q1'2013 Q2 Q3 Q4 Q1'2014 Q2 Q3 Q4 Q1'2015 Q2 Q3 Q4 Q1'2016 Q2 Q3 Q4 Q1'2017 Q2 Note: 1. Average available fleet size includes both car rentals fleet and car services fleet. It is calculated by dividing the aggregate days in which the fleet was in operation during a given period by the aggregate days of that period. 2. Total fleet RevPAC refers to average daily net revenue per available car, which includes both car rentals fleet and car services fleet. It is calculated by dividing the net revenues during a given period by the aggregate days in which the fleet was in operation during that period. 3. Fleet utilization rate includes car rentals fleet only. It is calculated by dividing the aggregate transaction days during a given period by the aggregate days in which the car rentals fleet was in operation during that period. 4. Net revenues = average available fleet size * total fleet RevPAC * days in a given period. 5

7 Broadest geographic service coverage by direct operation Cities ~90% 3, , /7 GDP and Population covered Directly operated services network, including 412 stores Vehicle models New energy vehicles Convenient & quality services 2 Extensive coverage over Tier-1 cities and airports/train stations Breakdown by # of services network Tier-1 cities ~20% Airports/train stations ~12% Other cities ~80% Other locations ~88% Notes: As of June 30, In terms of numbers of cities covered by directly operated services network; 2. 24/7 service is available in selected services network of major cities. 6

8 Technology-enabled mobile and online platform and well recognized ehi brand 24% 297 Total mobile app downloads (in thousands) % car rental booking through mobile 34% % 3,214 18,400 79% Strong user stickiness 83% 84% 7,300 8, Q1'2017 Q2 Mobile 84% In Q >90% of the reservations are made online and via mobile Website 11% Walk-ins / call center 5% Increasing benefits from low cost word-of-mouth recommendations Awards for brand recognition " Most recommended car rental brand by Chinese customers from China Net Promoter Score (C-NPS) (2017) " Shanghai Famous Trademark from Shanghai Industrial and Commercial Bureau (2015) " Top 50 High-growth Chained Operations in China from High-growth Chained Operations Summit (2015) Direct operating service model + Superior customer experience + Loyalty program & social network = > 66% repeat customers 1 Controlled sales and marketing expenses as % while revenues continue to grow of net revenues 7.1% Net revenues CAGR : 55% 4.0% 4.0% 4.6% 5.6% 5.6% Q1'2017 Q2 Note: 1. Repeat customers are defined as % of short-term car rentals transactions in 2014, 2015, 2016 and the sixth months ended June 30, 2017 generated from customers that used our services more than once. 7

9 Best-in-class strategic partnerships Enterprise: World s largest car rental company World s largest car rental company with 1.9mm vehicles in operation Ctrip: Dominant China OTA market leader China s largest OTA player with ~70% market share ehi B2C car services through all Ctrip channels since Dec 2014 ehi Enterprise customer referrals - ehi Integration to Ctrip mobile app since June bn+ cumulative downloads International service offering cooperation Designated & preferred car rental business partner Sharing expertise and know-how - Employee training - Fleet management - Global market insight - Operation know-how Management vision & experience Steering, finance, IT and sales & marketing committees Competitive travel products 8

10 Efficient fleet management BETTER acquisition BETTER deployment BETTER disposition " Over 200 car models " Selectively procure brands with liquid secondary market " Direct negotiation with OEMs " Establish fixed rate repurchase program with OEMs and car dealers " Real-time fleet management to optimize geographic allocation and fleet utilization " Optimize local supply-demand trends leveraging dynamic pricing system " Effective car sharing between car rentals and car services ensuring higher than average fleet utilization rate " Access to multiple used car sale channels " Auctions " Brokered sales " Dealers " Repurchase programs Balanced OEM and car model mix % of 2017Q2 period-end fleet General Motor Others 12% 22% 13% Peugeot 14% 39% SAIC Volkswagen Consistent high fleet utilization rate (%) 71% 72% 71% 72% 74% 73% Q1'2017 Q2 Straight-line depreciation policy, with an average disposal cost close to book value 1 # of disposed vehicles # of vehicles held for sale 6,665 2,369 2,369 5, ,140 1,890 4,775 4,438 4, ,605 1,613 2, Q1'2017 Q2 Note: 1. Vehicles held for sale are defined as vehicles under sales contracts pending title transfer as of the period end. 9

11 Sustained and improving profitability Gross profit 1 and margin (RMB mm) 30% 28% 23% 24% 19% 19% 28% 28% 28% 28% 31% 29% Adjusted EBIT 2 and margin (RMB mm) 15% 12% 10% 7% 5% 4% 12% 12% 14% 14% 15% 15% H H 2017 Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q2 1H H 2017 Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q2 Adjusted EBITDA 3 and margin (RMB mm) Net income/ (loss) 4 and margin (RMB mm) 44% 44% 39% 37% 42% 40% 44% 44% 45% 45% 44% 45% 206% H H 2017 Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q2-0.3% (3) 5% 61 1% 4 2% 6-3% -0.8% (12) (4) 0.2% 1 4% 22 2% 14 5% 5% H H 2017 Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q2 Notes: 1. Gross profit = Net revenues - vehicle operating expenses (cost of revenues) 2. Adjusted EBIT refers to non-gaap adjusted EBIT, which is defined as net income before share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment. 3. Adjusted EBITDA refers to non-gaap adjusted EBITDA, which is defined as net income or loss before depreciation and amortization, share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment 4. Q net income included a net gain of RMB720 million related to sales of investment assets. Q net income included RMB16.9 million in gains from waiver of warrants. 10

12 Continued margin expansion benefiting from enhanced economies of scale and effective cost management Reduced vehicle operating expenses (cost of revenues) Improved margins over time % of net revenues Vehicle depreciation expenses Vehicle operating expenses (cost of revenues) Adjusted EBITDA margin 72% 70% 31% 28% 81% 81% 77% 76% 72% 72% 72% 72% 69% 71% 32% 32% 31% 31% 31% 30% 31% 31% 28% 29% 44% 44% 39% Gross margin 37% 42% 40% 44% 43% 45% 45% 44% 45% 1H H 2017 Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q2 28% 30% 28% 28% 28% 28% 31% 29% Evolving cost structure with increasing operating leverage % of net revenues Sales & marketing G&A Total operating expenses 17% 16% 16% 18% 16% 19% 17% 17% 16% 16% 17% 15% 19% 19% Adjusted EBIT margin 15% 12% 23% 24% 10% 12% 12% 14% 14% 15% 15% 12% 10% 12% 14% 12% 13% 12% 12% 11% 13% 11% 9% 5% 4% 7% 5% 6% 1H H % 4% 4% 6% 5% 5% 5% 3% 6% 6% Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q2 1H H Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Q1'17 Q Increasing scalability allows us to realize favorable operating leverage as our cost structure continues to evolve 11

13 Thank you!