CAR Inc First Quarter Results. May 15 th, 2018

Transcription

1 CAR Inc First Quarter Results May 15 th, 2018

2 Q1 18 Highlights significant margin expansions Margins YoY 1,263 64% 17% +4pp +2pp 805 Car rental Continue to demonstrate encouraging growth momentum, 24% volume YoY Achieved clear margin expansions for 4 consecutive quarters Key growth initiatives undergoing: Car Sharing & Autonomous Rental pilot launched nationwide +24% Rental days +16% Revenue Margins Fleet rental +2pp 210 ~12,000 Avg. UCAR fleet in 1Q ~21,000 Rental revenue Adj. EBITDA Adj. net profit Still significant headwinds on total rental revenue in 1H 18 due to yearover-year comparison ~12,000 YoY flat +5% +14% UCAR s ride-hailing platform has sustained a balance btw self-op & 3rd parties to optimize efficiencies 1Q 17 1Q 18 UCAR avg. rental fleet 1

3 Financial highlights Q1 18 Q1 17 YoY Total rental revenue 1,263 1,275 flat - Car rental 1, % - Fleet rental (41)% Total revenue 1,596 1,656 (4)% Net profit Adj. EBITDA (1) % Margin (3) 63.7% 59.8% 3.9pp Adj. net profit (2) % Margin (3) 16.7% 14.4% 2.2pp Free cash flow 1, Basic EPS (RMB) % Mar-18 Dec-17 change Total assets 21,345 20,640 3% Total debt 11,652 11,122 5% Cash 6,221 4,876 28% Total debt/ Adj. EBITDA 3.8x 3.7x 0.1x Net debt/ Adj. EBITDA 1.8x 2.1x (0.3)x Note: (1) 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/(loss),costs relating to the used car B2C pilot program, share of (profit)/loss of an associate and fair value changes on derivative instrument-transaction not qualifying as hedges. (2) Adjusted net profit is defined as profit excluding share-based compensation, foreign exchange (gain)/loss, IPO-related expenses, fair value gain/(loss), share of (profit)/loss of an associate, costs relating to the used car B2C pilot program and fair value changes on derivative instrument-transaction not qualifying as hedges. (3) As a percentage of rental revenue. 2

4 Car rental: margins improved despite RevPAC decrease strong benefit from efficiency upside and operating leverage Q1 18 Q1 17 YoY RevPAC (3) Car rental revenue (1) 1, = Days x Avg. daily fleet (2) x 80,303 60,389 RevPAC (3) = ADRR (4) x Utilization (5) 63.0% 67.6% 16% 33% -13% -7% -4.6pp Q 16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 ADRR (4) Utilization (5) 67.6% 69.4% 66.5% 60.3% 59.3% 55.4% 54.4% % ADRR: YoY carry-over impact for Jan/Feb more incentives to acquire new customers in 2018 Utilization: strategically adjust to lower utilization targets to support car sharing campaigns Notes: (1) The Company has reclassified the rental revenue and operating fleet to better align with its new development in business natures from 2017Q1. (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 to average 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 3

5 Sustainable profitability profile Profit margins Cost structure Adj. EBITDA margin (1)(2) Major cost items as % of rental revenue (4)(5) 65% 61% 60% 57% 60% 58% 62% 57% 64% 90% 1Q'16 2Q 16 3Q 16 4Q 16 1Q 17 2Q'17 3Q'17 4Q'17 1Q'18 Gross margin (1) 4 41% 42% 43% 35% 38% 42% 42% 31% Interest /Others SG&A Depreciation 71% 23% 78% 76% 26% 24% 85% 27% 80% 13% 26% 84% 13% 27% 77% 26% 12% 31% 77% 28% Adj. net profit margin (1)(3) 22% 17% 17% 14% 16% 6% 17% DOE 2 32% 32% 36% 30% 34% 33% 38% 30% 1Q'16 2Q 16 3Q 16 4Q 16 1Q 17 2Q'17 3Q'17 4Q'17 1Q'18 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/(loss),costs relating to the used car B2C pilot program, share of (profit)/loss of an associate and fair value changes on derivative instrument-transaction not qualifying as hedges. (3) Adjusted net profit is defined as profit excluding share-based compensation, foreign exchange (gain)/loss, IPO-related expenses, fair value gain/(loss), share of (profit)/loss of an associate, costs relating to the used car B2C pilot program and fair value changes on derivative instrument-transaction not qualifying as hedges. (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 items include other income and expenses relating to the income/(loss) from interest income from bank deposit, government grants, rental income from investment property, (Loss)/gain on disposals of items of other property, plant and equipment and others, excluding income tax expenses. 4

6 Used car disposal Improved capabilities in used car disposal # of used vehicles disposed Proven residual risk management Cost of sales of used vehicles As % of sales of used vehicles 36,912 23, % 103.0% 101.1% 104.5% 15,483 9,284 3, % 95.1% 99.6% Q' Q 17 1Q 18 Avg. selling price (RMB 000) Depreciation % % (of rental revenue) 21.4% 25.1% 27.2% 25.5% 27.8% Retirement schedule adjusted to support car sharing launch: slowed down the car rental vehicle retirement Able to dispose UCAR retired vehicles higher avg. selling price in 1Q due to mix In process of developing more diversified B2C channels and products, and optimizing Maimaiche partnership Cost to sales ratio constant at 95%-105% continue to improve residual accuracies, Q1 99.6% Depreciation% increased by 2.3pp YoY, due to more rigorous residual estimations and lower RevPAC 5

7 Strong financial positions Strong cash generation Free Cash Flow (FCF) Optimizing funding capability and credit profiles Debt (Gross/Net) 1, , Q'18 (649) (1,129) 11,682 11,122 11,652 8,385 6,344 5,958 6,246 5,432 3,811 2,967 3,611 1,135 Cash (1) 844 2,476 (3,303) 2,041 5,725 4,876 6, Q'18 Net debt Total debt Net debt/ adj. EBITDA 3.2x 0.7x 2.3x 1.9x 2.1x 1.8x Continue to deliver strong positive Free Cash Flow Cash position remains strong at 6.2B providing adequate liquidity to prevent macro uncertainties Net leverage remained low due to strong FCF generation Successfully issued first Offshore CNH bond of RMB750MM and second Panda Bond of RMB730MM Credit profile continue to enhance further diversified funding sources and optimized funding structure Note: (1) includes restricted cash, available-for-sale investments and cash and cash equivalents 6