ehi Car Services Limited 2016 fourth quarter and full year results

Transcription

1 ehi Car Services Limited 2016 fourth quarter and full year results March 23, 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 RMB421.5mm Net revenues RMB565.0mm Gross profit margin 24.2% 27.7% RMB(12.3mm) Achieving bottom-line profitability RMB13.7mm RMB28.8mm Adjusted EBIT RMB76.7mm Adjusted EBIT 6.8% 13.6% margin RMB166.7mm Adjusted EBITDA RMB256.0mm Adjusted 39.6% 45.3% EBITDA margin 32,255 Average available fleet size 42, % Car rental fleet utilization rate 71.2% 2

4 FY 2016 financial & operating highlights FY 2015 FY 2016 RMB1,450.6mm Net revenues RMB2,108.9mm Gross profit margin 21.6% 28.1% RMB(40.5mm) 1 Achieving bottom-line profitability RMB33.1mm RMB99.0mm Adjusted EBIT RMB272.3mm Adjusted EBIT 6.8% 12.9% margin RMB573.7mm Adjusted EBITDA RMB940.4mm Adjusted 39.5% 44.6% EBITDA margin 26,460 Average available fleet size 38, % Car rental fleet utilization rate 72.4% Note: 1. Excluding a net gain of RMB736.8 million related to sales of investment assets after transaction costs and tax provision. 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 ü ~18% CAGR 2013A-2017E ü US$4.4bn market size ü Opportunities from car sharing ü ~15% CAGR 2013A-2017E of base market ü US$46bn potential white space opportunity for individual demand ü Opportunities from car-hailing and ride-sharing Why we adopt the integrated business model ü Leverage our proprietary technology and mobile infrastructure to improve customer experience ü Capture complementing demand cycle to maximize fleet utilization ü Share brand equity and cross-selling opportunities ü Capture evolving market opportunities ü 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 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% 42, % Period-end fleet size 4 9,846 10,579 11,359 11,586 13,407 15,409 18,159 19,746 24,362 30,530 35,107 38,070 39,458 42,175 48,934 56,916 Net revenues 5 (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 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. Period-end fleet size refers to the aggregate number of vehicles in the Company s car rentals and car services fleets as of the last day of a given period which the Company holds legal title to and reflects in its balance sheet, including vehicles that are currently missing but have not been written off in accordance with its accounting policy. 5. 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 391 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 ~16% Airports/train stations ~14% Other cities ~84% Other locations ~86% Notes: As of Dec 31, 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 79% 18,400 Mobile 81% >90% of the reservations are made online and via mobile Website 15% Walk-ins / call center 4% n n n 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) In Q Strong user stickiness Increasing benefits from low cost word-of-mouth recommendations 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% Note: 1. Repeat customers are defined as % of short-term car rentals transactions in 2014, 2015 and 2016 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 1.7mm vehicles in operation Ctrip: Dominant China OTA market leader China s largest OTA player with ~60% 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 n n n n Auctions Brokered sales Dealers Repurchase programs Balanced OEM and car model mix % of 2016 period-end fleet Others 24% 34% Volkswagen Consistent high fleet utilization rate (%) Straight-line depreciation policy, with an average disposal cost close to book value # of disposed vehicles # of vehicles held for sale 6,665 5, ,890 1 General Motor 10% 16% 16% 71% 72% 71% 72% 2,369 4,140 4,775 Peugeot SAIC 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) 28% 22% 23% 24% % 19% % 28% 28% 28% Adjusted EBIT 2 and margin (RMB mm) % 10% 7% 7% 5% 4% 12% 12% 14% 14% Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Adjusted EBITDA 3 and margin (RMB mm) Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Net income/ (loss) 4 and margin 40% 45% 39% 37% 42% 40% 44% 44% 45% 45% (RMB mm) % % 1.6% 33 1% 4 2% 6-3% -1% 0.2% 4% 2% Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 (12) (4) Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 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 78% Vehicle depreciation expenses 72% 81% 81% 77% 76% Vehicle operating expenses (cost of revenues) 72% 72% 72% 72% Adjusted EBITDA margin 45% 40% 39% 37% 42% 40% 44% 43% 45% 45% 32% 31% 32% 32% 31% 31% 31% 30% 31% 31% Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Evolving cost structure with increasing operating leverage Gross margin 22% 28% 19% 19% 23% 24% 28% 28% 28% 28% % of net revenues Sales & marketing G&A Total operating expenses 17% 17% 16% 18% 16% 19% 17% 17% 16% 16% Adjusted EBIT margin 13% 7% 5% 4% 10% 7% 12% 12% 14% 14% 13% 12% 12% 14% 12% 13% 12% 12% 11% 13% 4% 5% 4% 4% 4% 6% 5% 5% 5% 3% Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q Q1'15 Q2 Q3 Q4 Q1'16 Q2 Q3 Q4 Increasing scalability allows us to realize favorable operating leverage as our cost structure continues to evolve 11

13 Q2 results key financials Strong balance sheet and maintaining financial health Strong Balance Sheet Total debt 1 (Net debt) 3 /LTM EBITDA 4 (RMB mm) 45% Total debt/ltm EBITDA Net debt/ltm EBITDA Total debt 1 / Total assets 33% 36% Total assets 3,756 7,801 8, x 4.8x 3.9x 3.1x 0.5x (0.1)x Cash 2 1,119 2, Total debt 1 1,254 2,773 3, Notes: 1.Total debt = short-term debt + long-term debt 2. Includes restricted cash 3.Net debt = Total debt cash & cash equivalents restricted cash 4.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 form waiver of warrants and gains from the sale of cost method investment. LTM refers to last twelve months. 12

14 Diversified funding structure Debt structure 2% 3% 11% 19% % % 59% 25% Senior unsecured USD notes Borrowing from Ctrip Bank borrowings Borrowing from financing and other companies 13

15 July 2015 Thank you!