2017 First Quarter Results. May 16 th, 2017

Transcription

1 2017 First Quarter Results May 16 th, 2017

2 1Q 17 Executive summary Car rental: Deliver beyond 2017 expectations Demonstrated stronger than ever growth momentum 63% YoY rental days growth, record high since 2013 (2017 guidance: 40% growth) Delivered quicker realization of significant utilization upside 68% Utilization Rate achieved, 12pp YoY improvement (2017 guidance: 5-7pp increase) Achieved sustainable profitability despite significant price reduction, utilization gain and operating leverage offsetting ADRR change 60% Adj. EBITDA margin UCAR Fleet rental: Fleet further decline, regulation & business driven Expect UCAR to expedite fleet replacement accommodating new regulatory impact of vehicle licensing ~30% fleet decrease so far Used car: Expediting fleet replacement leveraging more diversified disposal capabilities, expect younger fleet to release residual pressures 1

3 1Q 17 Highlights Growth 63% YoY Car rental (2) volume Profitability 60% Adj. EBITDA margin (1) 29% YoY Car rental revenue 14% Adj. net margin (1) Car rental 68% Fleet utilization Financial positions RMB 486 MM Free cash flow +12pp YoY 1.9x Net debt/adj. EBITDA (1) Notes: (1) Adjusted EBITDA, adjusted net profit, and margins exclude the costs relating to the used car B2C pilot program. Adjusted EBITDA is defined as profit or loss before income taxes, net finance income/costs, depreciation, amortization and impairment, excluding share-based compensation, foreign exchange gain/loss, fair value gain from investment in equity shares and redeemable preference shares, fair value gain on derivative instrument-transaction not qualifying as hedges, share of profit/(loss) of an associate; adjusted net profit is defined as profit or loss excluding share-based compensation, foreign exchange gain/loss, fair value gain from investment in equity shares and redeemable preference shares, fair value gain on derivative instrument-transaction not qualifying as hedges, share of profit/(loss) of an associate. Margins are calculated as percentage of rental revenue. (2) Rental revenue and operating fleet have been reclassified to to align with its new development in business natures 2

4 Reclassification of rental revenue and operating fleet to better align with new development in business natures Car rental Rents cars through its rental locations and delivery services Car rental services are generally standard and mostly through online bookings Cars are rented by mostly individuals to meet their leisure and business needs, as well as by corporations Fleet rental Provides fleet management services for corporations under framework agreements The fleet management services are generally customized to customer needs and requests, which include but not limited to long-term car rentals and car chauffeured services The fleet is more diversified in terms of models, colors and brands Changes after the reclassification Before Short-term rental Long-term rental Car rental >=90 days (new in 2017) Short-term self-drive <90 days UCAR short-term fleet sharing UCAR long-term rental Traditional long-term rental After Car rental Fleet rental More appropriate business segregation to facilitate better analysis of business performance 3

5 1Q 17 Financial highlights (RMB in millions) 1Q 17 1Q 16 YoY Total rental revenue 1,275 1,255 2% - Car rental (1) % - Fleet rental (1) (31)% Total revenue 1,656 1,614 3% Net profit (23)% Adj. EBITDA (2) (7)% Margin (4) 59.8% 65.4% (5.6)pp Adj. net profit (3) (33)% Margin (4) 14.4% 21.8% (7.4)pp Free cash flow (18)% Basic EPS (RMB) (21)% Mar-17 Dec-16 change Total assets 20,402 21,189 (4)% Total debt 11,002 11,682 (6)% Cash 5,209 5,725 (9)% Total debt/ LTM Adj. EBITDA 3.7x 3.8x (0.1)x Net debt/ LTM Adj. EBITDA 1.9x 1.9x - Note: (1) The Company has reclassified the rental revenue and operating fleet to better align with its new development in business natures. (2) Adjusted EBITDA is defined as profit before income taxes, net finance income/costs, depreciation, amortization and impairment, excluding share-based compensation, unrealized foreign exchange gain/loss related to USD denominated liabilities, costs related to B2C pilot program and fair value gain on investment in redeemable preference shares (3) Adjusted net profit is defined as profit excluding share-based compensation, unrealized foreign exchange gain/loss related to USD denominated liabilities, costs related to B2C pilot program and fair value gain on investment in redeemable preference shares (4) As a percentage of rental revenue 4

6 1Q 17 Adj. net profit walk (RMB in millions) 29% car rental revenue growth UCAR fleet rental decline 274 Residual pressure of certain models Maintain consistent EBITDA margin Utilization gain & operating leverage offset ADRR decrease GM Excelle impact, UCAR fleet residual adjustment in 4Q Q'16 Car rental contribution UCAR fleet contribution Other business contribution Vehicle residule impact Interest & tax 1Q'17 5

7 Car rental: stronger than ever growth momentum Strong growth momentum Growth levers Rental days (in thousands) 63% 3,674 Price More competitive pricing ADRR Smarter Dynamic Pricing 2,255 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 1Q 16 1Q 17 63% rental days growth, record high since 2013 <1yr Fleet % Fleet Younger fleet Attractive new models Rental days YoY (%) 63% 40% 45% 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 8% 18% Rental experience Counter/staff bypass Rental on-demand 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 Seq. growth rate increase in 5 consecutive qtrs 6

8 Car rental: sustain strong profitability (RMB in millions) 1Q 17 1Q 16 YoY RevPAC (3) Car rental revenue (1) = Days x Avg. daily fleet (2) x 60,389 44,751 RevPac (2) = ADRR (3) x Utilization (4) 67.6% 55.4% 29% 35% -5% -22% +12.2pp Q 16 2Q'16 3Q'16 4Q'16 1Q'17 ADRR (4) Q'16 2Q'16 3Q'16 4Q'16 1Q'17 Utilization (5) 55.4% 60.3% 67.6% 59.3% 54.4% 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 RevPac slight decrease was offset by RevPac break-even point decrease due to operating leverage from significant scale growth Notes: (1) The Company has reclassified the rental revenue and operating fleet to better align with its new development in business natures. (2) Average daily fleet is calculated by dividing the aggregate days of car rental vehicles in operation in a given period by the aggregate days of that period (3) RevPAC refers toaverage daily rental revenue per car rental vehicle, which is calculated by multiplying the average daily rental rate in a given period by the fleet utilization rate in that same period (4) Average daily rental rate is calculated by dividing car rental revenue in a given period by the fleet rental days in that period. Fleet rental days are the total rental days for all vehicles in car rental fleet in a given period (5) Fleet utilization rate is calculated by dividing the aggregate days that vehicles are rented out for car rentals by the aggregate days that car rental vehicles are in operation 7

9 Used car disposal Improved capabilities in used car disposal Proven residual risk management # of used vehicles disposed 23,092 Cost of sales of used vehicles As % of sales of used vehicles 15, % 103.0% 104.5% 9,284 5,404 7, % 95.1% 98.0% Q'16 1Q' Q 16 1Q 17 Avg. selling price (RMB 000) Depreciation % 23.4% 21.4% (of rental revenue) 25.1% 23.1% 25.5% Used car disposal channels 1% 1Q 17 8% 22% 1Q 16 62% 70% 37% B2B - Franchisees B2B - Dealers B2C - Maimaiche Rigorous review mechanism and best efforts to ensure appropriate residual values close to market prevailing price Solid residual adjustments of GM Excelle & UCAR fleet in 2H 16, 1Q 17 depreciation% flat QoQ and 2pps increase YoY Cost to sales constant at 95%-105% 1Q 17 loss mainly driven by remaining GM Excelle inventory 2017 Focus: further diversification + better Maimaiche Better Maimaiche channel = better B2C residuals, deepen end-user and dealer reach, expedite replacements 8

10 Strong financial positions Strong cash generation (RMB in millions) Free Cash Flow (FCF) 1, Q'17 (649) (1,129) (3,303) Optimizing funding capability and credit profiles (RMB in millions) Debt (Gross/Net) 11,682 11,002 8,385 6,344 5,958 5,793 3,811 2,967 3,611 1, Q'17 Net debt Total debt Cash (1) Net debt/ 844 2,476 2,041 5,725 5, x 0.7x 2.3x 1.9x 1.9x adj. EBITDA Continue deliver strong Free Cash Flow, 0.5B in 1Q 17 Strong cash position of 5.2B providing liquidity needs for both onshore and offshore Executed share buy-back of HKD212MM Net leverage remained low due to strong FCF generations Gross debt temporarily high due to strict onshore fund outflow controls, 0.9B repayment in 2Q 17 FX risk partially hedged in 1Q17: executed USD400MM forward cap with strike rate of ~6.96 Note: (1) includes restricted cash, available-for-sale investments and cash and cash equivalents 9

11 Appendix Supplementary Financials

12 Sustainable profitability profile Profit margins Cost structure Adj. EBITDA margin (1)(2)(5) 62% 61% 62% 61% 65% 61% 60% 57% 60% 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q 16 3Q 16 4Q 16 1Q 17 Gross margin (1) Major cost items as % of rental revenue (1)(4)(5) Interest SG&A 82% 81% 74% 73% 74% 12% 73% 12% 13% 13% 12% 11% 13% 10% 10% 9% 12% 10% 77% 11% 10% 88% 14% 11% 79% 12% 11% 50% 49% 50% 43% 49% 41% 42% 35% 43% Depreciation 20% 21% 21% 24% 23% 26% 24% 27% 26% 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 Adj. net profit margin (1)(3)(5) 22% 21% 22% 16% 22% 17% 17% 10% 14% DOE 31% 30% 30% 33% 29% 32% 32% 36% 30% 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q 16 3Q 16 4Q 16 1Q 17 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 Notes: (1) As percentage of rental revenue (2) Adjusted EBITDA is defined as profit before income taxes, net finance income/costs, depreciation, amortization and impairment, excluding share-based compensation, foreign exchange gain/loss, IPO-related expenses, fair value gain and costs relating to the used car B2C pilot program (3) Adjusted net profit is defined as profit excluding share-based compensation, foreign exchange loss related tocorporate reorganization, IPO-related expenses, and unrealized foreign exchange loss related tousd denominated liabilities (4) Expenses figures have been adjusted for share-based compensation, reorganization related expenses as well as costs related to suspended fleet. Interest expenses are net of interest income (5) The metrics exclude costs related to B2C pilot program in 4Q 16 and 1Q 17 11

13 Net investment in fleet Fleet expansion (1) 38,353 29,831 22,171 21,857 9,986 15,483 (2) 9,284 23,092 7,918 7,236 Vehicles purchased Vehicles disposed Q'17 Net investment in fleet (RMB in millions) 5,220 1,889 2, ,633 1, Vehicle purchase capex Used vehicle sales revenue Q'17 Notes: (1) Fleet expansion does not reflect change in finance leasing fleet (2) Among 15,483used vehicles disposed in 2014, 10,185vehicles were sold while 5,298vehicles were disposed to franchisees through finance leasing 12