CAR - Earnings call transcript Q3 2020 | Avis Budget Group, Inc.

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Operator

Greetings and welcome to the Avis Budget Group’s Third Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host David Calabria, Treasurer and SVP of Corporate Finance. Thank you.

begin. may You

David Calabria

and everyone, for us. joining Good thank morning, you

are our our Chief On Financial the Officer; Ferraro, me with Choi, call Executive Joe and Officer. Chief Brian

our call release press remind be Before I’d risks that On well obligation assumptions and to other information. to with to this other to from release, measures. Investor that on our which and of refer results how and non-GAAP involves like update such I statements. will actual We GAAP we With and we factors that, to Please forward-looking assumptions, the certain is cause define Relations reconciliations discuss available in our section over and differ begin, risks, undertake uncertainties uncertainties for we forward-looking our discussing these measures filings call, are financial Such to as the the will could website information website. forward-looking that earnings would and earnings everyone or periodic we comparable our identified no SEC materially closest like measures. the revise to statements turn Joe. as

Joe Ferraro

as this profitably out. to we the together play to this has and also to of an thank with welcome I'm joined first as his I impact Thank good years and and member. morning, today. how everyone been us might excited be grow come. it team for as introduce able time impossible years, business Brian knowledge executive our for Board some leverage worked investor Financial to for you, started who things the joining Chief Brian was experience to us and and I the Officer, pandemic, When Choi, who feel have David recently guess quite to depth want of and for you longtime XX last was and new we our

increasingly begun impact mitigated what and In ability adapt, clear decline is we revenue travel, unprecedented to through is an our remains improving profit and Then future becoming financial commitments the you react, the of environment and a of including the While moderate pandemic. quarter, uncertain, adversity. right-size second in not market to our business in thrive company's is returns. the team, their to quarter, their what performance and the safety provide capable structure, This only heroic Worry-Free Avis third took promise, our update I'm third show our of our travel for while ability innovative proud costs Budget incredibly customers, of our the revenues but efforts quarter, us improvements. we've as since improve we protect to morning, also our to of our even with remind enabling Safety this rental touchless the on and experience. our and start remove cleanliness safety Pledge partnerships through the cost lean an to actions I'll in fleet, our with

flow. company. Brian $XXX In million million and last liquidity I both free we our position, $XXX which and for as our adjusted strength our the and on adjusted cash discuss and that, illustrates cash discuss the of EBITDA call, trends business After beyond. our Finally, generated will in October of positive will quarter, stated positive outlook achieved

the benefit XX% more adjusted revenue. of with the more generating than revenue improvements since March While remained to enabled throughout removal our have challenged revenue on and this September summer. efforts from due sequential XXXX culminated less cost This pandemics to than effect the travel, EBITDA us September Americas

our prices we've company's location with retail ever ever we car our history. month of quarter date. direct-to-consumer through During States. analytics, summer, largest quarterly fleet market achieved sized used Irving, expand to our opening continue use channel, fleet in profitably record United take to the we and our strong in included we sales car we single any which of sold this to August the a in sold This quarter, sales the advantage right Through cars the used XX,XXX in the peak data Most increased capitalized of Texas. throughout on and with largest being recent

again see we in peak you our to with can to As XX% rates which in a strong of we achieve the fleet presentation, demand, aligning utilization investor history have close our quarter demonstrated Americas. this

total year fleet. Globally, bringing Our to billion, removal in another limited not removal by for billion. were total $X than cost our the more expenses quarter the we efforts our $X our to reduced approximately cost

pandemic billion to over continue the and suppliers every evaluate have impacts who with benefit worked have with and great efficient leaner which We've ways We will expect to us efficiencies. find $X.X than way. more have bottom been remove to a year organization, subsided. this is partners persistently expense item many creative along of and more work partners to line the line even We've before this become fortunate of to after our as we find

overall more XX% Our of XX% and finished still last sequential the to to in blind forms August non-flying third to rent to still from and travel in by alternative down appear to quarter renting coming show continue and and of screening our quarter, transportation. performing on-airport volume prior is XX% vehicles in recovering better passenger down customers Revenues are TSA. and our taking comfortable has remains Airport vehicles demand be year the travel moderately September. customers one data improvement, down. Similar been released in July, airports

package pre-pandemic commercial well local Ride-hail business areas the performed quarter. operations levels. active rentals market especially back off-airport like vehicles, stability year-over-year was These with up significantly driven Our above during continue to Zipcar. by ride-hail, delivery and provide business

levels particular Additionally, revenue market from our exceeded A quarter. prior year local operations note. in the

positive quarter. the or further holiday vacation fourth to the Zipcar our the sequentially has increased head as match delivery nearly to run U.S. improved package urban season and Our have competitive the weekends, private by shifts dramatically mix levels city. errands also package the and drags seek fleet has business quarter, pricing longer outside we of by rates. day offsetting the The from and into volume doubled the transportation delivery to rental the in Longer leisure as in fleet lanes tend per demand end length we've tightened. on to improved In strong the domestic peak turned Americas, as pricing have lower business. driven customers revenue

shuttle due touch However, accompanied less. by mean Longer higher points. fewer are one car move margins you rentals or to

need the You less. clean car to

improved mix, the has up been less these increase with XX% the costs and Americas You per especially while transactions market our the continue you to associated our less, as we pricing longer rent. profitability vehicles prior hold have maximize this have environment customers rentals. our has the revenue leverage technology less in means of able and transaction in gas of strong, the were lengths conditions, to demand associated transactions. to investments pricing, improved this car in Ultimately, you for vehicle. fleet with Due With

fleet the fleet positioning were utilization our capitalize opportunities. optimize to for promising our XX%. that positioned on rightsizing demand international improvements most also in well average vehicles quarter We business, near the the so in similar We the achieved

proud day business While revenue a we've of due times, but We're been of to on to continues sales the inbound the opportunities. through cross create to five way We these able per with our navigate launched lack to less ancillary border uncertain our medical and our leading our ABG of Council professionals efforts customers. our institutions protocols. advising and COVID industry-leading employees protect well-established Advisory on prouder XX reviewing Medical even from charged drag

partnership last against I much did While training. products well-known a holistic quarter, effectiveness safety RB we with COVID-XX. efforts proudly as I Lysol won't expanding as the are locations around to from our our using and across protocols also all and detail go benefit further enhance into proven their We're

of our use expand contactless technology to deliver experiences. continue to We mobile

[technical of our difficulty] the years been have brands. across We any

upon car their automated We experience. customers arrival our app QR our through select specific then VR have a code their a preferred to an exit for phone, award-winning vehicle, completely mobile exit Avis select express offering, can directly unique on proceed their to utilize and contactless on

check-in All their road. our can Avis and to our of transaction and customers counters at reducing websites, time digital on the quickly on get safely advantage also our take budget our of

those Given mobility available. choosing options or many we the surprised traveling differentiated not of experience vehicles other provide, over that our we're currently

We continue brand. our to Zipcar with innovate

enrollment a smartphone with on streamlined our backend Zipcar urban joining. and instant quickly. have our both car contactless road the to of to This near completely another get drive minutes platform end with access, process within enabling front We and a option new vehicles, in access centers, anyone allows especially members

to the local Now we'll checkout higher rest driven and the of of skewed and surrounding days. our leisure Reservation travel an be versus year. continue provide current customers. our trends patterns by corporate outlook towards business closer to the remains for demand out-of-town Rental to update weekend compared date on

customers recently reservations. the We rates back have visibility per in, also reservations limited revenue current seeing While for into primarily on no booking no have down and significant cancellation more we’ve positive booked as We pre-pandemic thus future seeing pre-pandemic longer show to close are into were come our levels. confidence fourth and the in we travel day quarter. reservations

our be paying protect have a health appear put to our position both to company in and us off. efforts stronger of customers the competitive Our financial and

in September. further customers fleet, ensure low normal our uncertain on their service provide future. position We vehicles with ability expectations the OEMs with a supply for to have them quality they as the XX% year and compared and more working longer and small grew base refresh in have were to customers Americas financial in our our give a the business to adequate demand. also vehicles nearly customer had back We've to even the to busy fleet confidence and get great to into new quarter in vehicles cycle with where rentals our meet deserve monthly miles strong prior fleet length we to and an quarter our XX% service today buy align our over that success We our XXXX with

proved our Given to to demand. than if fleet scale, have with we are match proven challenging flexibility we now even that the vehicles XXXX more to levels up anticipated, ability at confident continue sell

lowest the see in steady into decrease fourth while April. seasonal to from demand see traditional travel improvement the Going summer our a of still of levels we we expect the revenue year-over-year peak, declines on quarter,

Travel met to diligent access a cash minimum, than $X transportation. our at quarter how extremely ensure achieving tireless flow ready efficient. the million frontline our billion I and and to positive I'm we for far, objectives, keeping to to locations allow I gratitude adjusted work these while cash of more the in employees be in performance. Removed our team and revenue uncertain sincere with free adjusted closing, to anticipate that, Their September Brian safe ways In strong and simultaneously costs beyond adjusted discuss and adjusted our year efficient both market with unfold. Americas. $XXX flow costs rental adjusted we uncertainties to Given it cost will recovered we But and and to With from to demand to customers will our the in difficult in continue see earn times. more EBITDA EBITDA cash their than customers more free proud this this over liquidity are express position, booking world positive efforts will around date, during positions. vehicles positive of my throughout our prior their our the so new fixed must turn hard remains to positive and reservations operations. control, remain unrelenting our closer finding EBITDA continue the

Brian Choi

Thank everyone. morning, you, Joe and good

I Let what the our employees have actions me take I am over uncertain arise normalizes. entire to the the that as Avis us will join am how the that quarters proud saying certain taken the of two industry, an travel past to team. of the for opportunities It's by by but full Budget advantage begin time world positioned is

My adjusted is cash day, discussing that are that grateful presentation. discuss and continued My excluding revenue our both results, pricing unit hope changes refer to on per comments efforts. and will rate in our release in to I'll press GAAP liquidity comments numbers focus in which contribute results our effects. call from per to together all their exchange I'm our with changes currency today third will quarter flow, costs reconciled now and For also constant earnings fleet our outlook. and

would as of unprecedented team of third half remainder we first takeout the successful our free an the quarter While a and EBITDA company the change record flow continued the of demand levels in driven be free quarter that $XXX On remarkable We the last our across global and Adjusted million, we adjusted the and fleet showcased revenue $XXX in positive cost all to strategies. we demand that late stabilization expense sales call, the adjusted year, of million, lines. was stated removal our on XX%. despite cost aligned cash flow EBITDA with positive declines cash adjusted for our for year. delivered fleet by faced of

XX, comprised billion September on in approximately we of of had As liquidity approximately in cash and and availability credit facility. billion million revolving $XXX $X.X $X.X available of equivalents our

proactive corporate our ensures meaningful we until this no management debt of that no debt need fleet year. have to and maturities any Our XXXX refinance corporate debt

did as not vehicle Next, comprised were facilities additional I'll end of the world. debt the on provide third all around any compliance is securitization injections. debt, and We of ABS our bank the equity which an require update of with and in facilities term quarter, conduit

States covenant I have our United -- end of of shows strength to you the tests, refer maintenance will of to the at covenant for as of in a presentation historical continues on AESOP structure, our tests headroom largest which our investor structure. September. maintenance view significant the Our the

we Additionally, business. and for in our the year completed showing We believe XXXX, since to the of the strength equity return enough excess in structure lending and in liquidity we our are ABS allow accessed position lowest and transactions at back in in facilities relationships the robust that our current ABS our to operating into growth quarter the best with the environment their XXXX. rates earlier partners now one AESOP of confidence the

latest the remainder for our the share to thinking of like would I year. Finally,

While quarantine lifted. with we of and demand governmental progress actions, proceeding path we predict especially scientific currently restrictions recovery, or precisely the virus, where new cannot slow see are the its are low cases

may this period fever. rental recovery demand continues cabin vehicle throughout there activity that travel pent-up from experience feeling be We Our believe accelerates. as meaningful countries to show reopen, or those initial States

in is seasonal the a shifts from However, period. contingent that declines during we mind the summer we mix winter are leisure from normal believe the and full business to Keep effective we we as and therapeutics as this to demand a upon and and seasonal recovery anticipate in a vaccine. business commercial move fall

to in fourth revenue typically closer portion late day, fourth and during the development With of reservations quarter are unknowns the the quarter. large the our earned significant to of occurring the quarter rental the rental there holidays still

costs. we within focused would areas uncertainties, these some provide Given have on we our efforts like to our control, around guidance and

company Our efforts forced as removal complete to effectively are efficiencies sustainably and we not as we into continue are cost for now yet the pandemic budgeting. this look leaner renegotiate with organization zero-based partners as a

fixed of year with throughout only into strategic the of focused the beginning XXXX. investments will out the We keep and remainder costs

plan are we our line line that Our most levels not ahead and and demand, travel continue demand fleet levels our at all XX% do questions. as shifts, as expect on to back Joe normal being fixed keep narrow With fleet to demand. bring goal are the in with equity we we organization, and adjusted empathy of now of despite improve quarter. costs trust of to is roughly in Adjusted In keep our we fully costs discussed to and utilization with our levels that remaining believe continuing minimum down and back our emphasize overhead and us. the excluding building all variable challenges We while difficult team quarter What pockets despite this of quarter. decline challenged of vehicle seasonal and are headwinds we we protect means reiterating a will relevant we as in demand the sustainably flow costs as in conclusion, remain are take previously free in stronger I EBITDA the that, happy hope and actions was adjusted return cash customers. to your safety, positive, the third to fourth fourth our focused EBITDA of in year-over-year behind

Operator

Billy Kovanis the line question. from comes with Morgan. question proceed first Please Our Instructions] of [Operator your from

Billy Kovanis

result. your Congrats question strong Quick cost on profile. on the

there it with low XQ, like were in some SG&A. So costs looks to artificially respect

to of look labor, will costs quantify therefore rents As some again. have please categories and thinking revert you will extent advertising, back? these I'm like forward, rising logistics the which in we cost can

you also billion annualized cost savings permanent follow-up. quoted hand, cost And the how the to savings. you On XXXX, if $X.X much other That very a helpful. quantify would could of be have expect in Thank you. be I

Joe Ferraro

Hi, good Joe. Yes. morning. Billy, it's

basis know, on you our revenues. in As line hard getting worked we've our cost really with

primary and a company we've simple. our our right? they a whether looked seen this lines we labor, SG&A. that operating pandemic would objective And P&L fairly second be the we direct or And started, the the and of quarter, So through at as fruits our moved our all third As was approach of was on team. fleet

a what I as teams amount looking be you well, this Brian hard globally opening line able look not. We there's It's if work I'd And that process. out more and quarter not aspects. our earnings more that, to year's I our it quarter say our there's yet. going was to in my call you be a than to X. we there look out way because cost, in I were have forecast activity, about the we costs be unprecedented line uncertainty be will of And diligent and have going in, could we be, said right things Brian that. nature, in be went And totally taken That's kidding take we and get And these in are more that back. as But lot that the of company's to a we demand, That's I said ever on about that going we've about what how we're as at is what throughout but costs granted, about estimate. next probably very diligent could right, -- bringing detailed a I history. to analytics because of activity that's and revenue with we'd -- our our best as I'm some we revenue our and give next diligent We'd of in take going of an -- say effort. year's world. right? best remarks, some revenue And fourth we're color forward, diligent on next about now. back to with all a -- into that we said not

As you I know, consideration fleet and hope earlier mentioned we as take well. that that we buy. our just had I recently helps, right? finished into got that to

Billy Kovanis

That does.

Brian Choi

something now return Sorry, Like as And I with quarter. the to to to we right just low. takeout terms Joe's that. to as that sure downside system possible. kind as of categorize that's add the sure variable provide in as is We're But as and to as costs, forward. protection all terms hard as the that well. that that of kind possible costs of we're volume in point, Billy, fixed make every returns, in this the fixed this, sustainable gives said, costs volume artificially you really would process call. any more stay be color low going will the costs that get as of we of wouldn't that's declines, moving we'll item understand we of certain to right low shocks cost want there as earnings cost on as the worked well. fixed possible should the And We any make -- low next have line goal as goal And and me to be because evaluating on that that. variable as those the Joe something now, and on or as are

possible. that of profitable and as much return as we volume profitable as kind So margin keeping does be are contribution as as incremental

future. process and through something working this more the in we're that is of color the in we'll So provide

Billy Kovanis

quarter We Yes, to It sense. get Congrats costs. to ask firing segment makes rid on more effort be beyond. all be I fixed to That seems will like on wanted color on and monumental that. in question U.S. look just a a those the the the for fourth it cylinders. segment. international of seems

have could to a are You and also factors of versus you led the touched international market lower in some Thank led but that in the just the to adjusted what on being that you. performance pricing U.S. you're headwind underperformance that what's the in on different touch segment, -- EBITDA? other international in that some has

Joe Ferraro

Yes.

This Okay. Joe. Hi. is

the the demand U.S., than quarter, the I the third -- differently market, the on bit operates in it of in a there think it's travel, international especially travel business U.S. and when while portion is look you at was the big obviously. pent-up quarter. a leisure In based inbound European

signing to tend to right. think overall what you shift the North The changed. you lot of mix going asked. and partners look The In okay. They that the a of that'll ancillary buy in protection. wasn't the know let's that some growth out case that you I U.K of pricing, then airline customer see the in aren't about want segments America. America up is let's locations international decline. It's encouraged customer test lot. I mix think familiar you inbound, caused would into open Europe, domestic test is potentially the -- that. this been particular about COVID think kind depressed, of area, right? and we to We business intra level don't all going if of systems, to Inbound and the the and coming if prior And with the U.S. have if land, you that there. think after there's sell and in products, some our of that I'm from, the they it's was they you an with in But aid of Europe, a business to what then a customer to has road that at mix North business three pricing business have a they land European from say there, shift know say,

the So I the out as way am shift revenue mix the are align country-by-country took proud the to teams caused as Americas that -- but that in internationally. costs revenue we diligent costs with was particularly it of decline. They’re just and

Billy Kovanis

Makes sense. you. Thank

Operator

Thank you.

Deutsche your Our Please with question. proceed with next question comes Bank. from Chris Woronka

Chris Woronka

you walkthrough you're everyone. you the you're you're how how kind that can morning, refill the the maybe aspect was give I a be good visibility bit given I in the do of work along of now is. hoping it, to just guys and talk fourth us the -- that, in cars the with will given of kind decisions fleet to fewer little next could selling Hey, brief financing a about of for XXXX? given you going making those know underwrite challenging year. and plan how that presumably And then -- quarter going ABS just also

Joe Ferraro

Yes.

liquidity. for turn Hi, to about over will Brian Joe. your Okay. I'll the Chris. start question off, This and I it is

segment sequential our off-airport had But the align pretty fuel allowed all, So demand. let we as presented we of our to or themselves. our business, us were right? volume in better market would quarter We local me improvements, growth to mentioned really lot questions I and our utilization As with into to opportunities be as with first had going a earlier, fleet they of of significant or had fleet able this. demand there align our whether say actions this distinct two to And we not year. this

gave used last we canceled how and cars lot mean, to attack right? a timeliness I a I call, had to XX% of move quarter, a deletions earlier, told wouldn't We back I an it, of that our meet robust lot how if February in you you then also, market. during aligned car our were that that analytics this we of In and we us a of up and fleet about how as target. a that we existing orders canceled of month platform and we data our get cars, success. market attack say we And gave in, to think the we through normalized fleet opportunity us had market the the level.

we of in get downside very proved in line short current available this we can with And past to up that can that time, fleet revenues the we a also are fleet our the so to And to period get get demand. in it us.

fleet have buy. we -- said, finished our our I just we've with As negotiations

think buy with our beneficial vehicles is there Actually, that that diverse features the put also I'm it's nature. it. OEMs a rent. it's customers -- that I it that enjoy in experience. in pleased very I our And will to make think It's The the our that whether fleet going trucks company vans we this day, it below at thought in profitably. a be of end always the or what had to we our cars would history demand aspects that sell slightly could be. We've align are to

the about external what that, how you we're talk One us, is airlines we cycling a how and are period data about. of obviously future mileage aligns they individual getting cars, there create allows And how holding a our Now lot new fleet. aspects. as challenging, is rotation the profitability. looking think to you available in own as we to that monthly and When cars, three that you be general we're are costs but which important saying going you or start fleet our thinking all the about earlier, into markets. are vehicles was Brian But in at what see those I said and model and to newer right? doing have prepare equally vehicles the buy that with sell a to One in you is the whether

I in align seen is as since this XXXX. we're going we've that and, we're What going tell historically fleets you've can to be you company, new will as one in to of with So, our slides cars, our there. demand have that about done

Joe Ferraro

the the to in up we that in sure ended that uncertainty, facilities Chris, just to period meant access second weather liquidity permanent. making the a our to be that of quarter, storm. to severe was never when that, we equity add AESOP Like was during

we we're cash on see to believe this the that we excess given liquidity positive, the for we the being we where down fact point. sitting XX%, sit revenues outlook that be Given the that that flow at right fact despite don't need free now and business and that

that So return fleet which XXXX the consumers to our thought is and will we're of quality allow going and facilities, purchases fund the cars provide us to. levels that are into to to AESOP accustomed kind cars of up the back our

David Calabria

could maturing It AESOP And about year. fund sufficient all I just from are levels. talked facilities this and XXXX levels issued our next And debt was that David. Brian that Chris, place that We XXXX if in are to add, was opportunistic capacities at and beyond. pre-funding, it is deal globally and

So about whatever and our Thanks. finance feel to forward. going need comfortable to really we ability good get we fleet

Chris Woronka

all Okay. color. that Appreciate

a follow-up. you Are much down the that know third elevated? you heading I about it's it elevated still you quick quarter. come of say how talked into length Just rental? when the was you quarter? pretty fourth seeing in Or Are seeing still

Joe Ferraro

Yes. I'd it's elevated. have to say pretty

the are customers Our cars longer. keeping

out well weekend the in utilization right came at we longer weekends, not like are holidays that us. say you're periods. I see leisure bodes peak not Brian not is that leisure cost and come as in using that daily currently in we a It's are robust with X and what opportunity commercial a checking all. us back at said, as this But And it's like They're you continuing -- these when for execution [technical quarter as bodes think our add is that that car for that currently Friday rental. mean, we the people take longer it's our that us I now. So out well people from you'd length over for strategy. or for And that's the think Sunday, as X-day that holidays, speak. obviously is a business a like us value missing traditionally difficulty]

So I see don't changing. that

Chris Woronka

Okay. Very guys. good. Thanks

Operator

you. Thank

next from Research Millman comes Millman proceed with Please question with Our question. Michael your Associates.

Michael Millman

used records see that. prices car what that, sure of that things. we affected And Maybe extent car the prices not in concern we of air last Kind -- up know a how can near couple … talk about you. the following air of stimulus what future? as on extent Used maybe topic, to you Thank and to all about lack affected is or

Joe Ferraro

Did I'm to want continue, Michael? Okay. sorry. you

Michael Millman

We Fine. can there. start

Joe Ferraro

used was is OEMs prices used Yes, down a -- XXXX. Like was as secret There we there's that analytics for on obviously were no I Used This it which [indiscernible] their lots, us reasons We businesses quarter. that think of the cars, suggest. There period time, there as which strategy given selling that far advantage our was we created changed retail stuff in And you for good as cars. that had Joe. internally, strong. our data think car the challenges right? was stimulus and have we’ve -- do shut Okay. well. inventory since a as

things we than risk more And are your direct-to-consumer, program deal, figured of to costs ways would pay reduces out increases which and which nature. along at fleet. were that We we more that directed auctions to risk ever far more as as prices sell normally and you

the see still with in some in, we that robustness that the a that was put as being of there market, is demand That we starting years while many one-year-old enhanced we strategies there used cars. ago. for think said, So we've

-- decline we from sequentially a bit that's very the positive that mean, if marketplace Now you than that's declines winter. in prior I still season always a ask no the demand and year. on while still solid. year. year the it challenged to and from maybe is, every to is quarter, in different this me that's that big see seasonal company. price But compared that the summer our third was for as anticipate And up quite us the The a we

Michael Millman

going at that Do stimulus levels? package good record keep car levels stimulus they've to been, used a for prices these forward another you need bigger or see

Joe Ferraro

for That answer. a me would that tough help. be a would be to package I say would always stimulus

asked or the Someone on a cash calls we as punkers ago, about was big a of me stimulus couple package think something as and just previous flow call that.

So I helps. that think if there one, is

the are levels probably retail, market. for as I would something right about the are in it of trigger But think demand that. they now, inventory there's still whatever --

Michael Millman

right. All Thank you.

Operator

you. Thank

Hamzah proceed with question. Jefferies. with comes question next Our from Mazari Please your

Hamzah Mazari

Hey, first on question good morning. just is utilization. My

reason the from ask utilization If is, out And talk how played had XX%. big being monthly this maybe could quarter. down about, costs I you you fleet benefit during the

well. cars sold really You

lower those assess kind clean saw. the number to trying initially just offset is so, any the in And EBITDA quarter how of of the gains utilization and whether in quarter, you

fleet going kind see that to of does trying how Just normal ramps, offset utilization a more forward as back to costs coming level?

Joe Ferraro

Yes, I that. think you're right on about

And the I help gains it's saw in where in we start But for not then with all at lower robust transpired helps utilization robustness not were our of the length, us off orders and start will right? that the things quarter, them also couple what of lot a which lower those utilization you When which was the that think for at but the say velocity the than a -- did big was there the canceled the lot right gets de-fleet at that selling we right. overall the helped, there's more of We longer possible it our the market. travel, the a our we end. start it ability at to season happened was utilization and the upfront of best car to about you leisure when which think in used And of quarter the to as start you're line, if that, more And the to helped. at a get position there's summer our and finished and demand it base, utilization we cars So probably in was was earlier, quarter that as the that of about the with The spoke of reasons. sell end. towards offset utilization absolutely process. was them as

Brian Choi

just Yes, that, add to to Hamzah.

the rate paying of abnormal, for being per cars just were completely was, a debt right. used, costs those fleet terms In for right. that's low, that clean though monthly was we unit so of the how quarter weren't were even lot But the company $XXX,

say so by on was. in sale can benefit two-thirds going see you're should would to worth kind many only you and responsibly the gains were cars But to of that market see what in I So eaten that fact just I'd over keep sell-through the nearly there's that the we fleeted. queue be. of And month, was what where say that that away it a that total

quarter like a So of was, how nearly costs the in utilization. think of that, terms I lower clean two-thirds but yes, it lower benefit, from of were the the course, depreciation offset

would a fleet, think those we're going more the forward. As in be said, lot because of right sized cleaner we quarters -- the now, terms Joe just exiting

Hamzah Mazari

XXXX Got follow-up cost it. were to wanted That's question differently. bit XX% my Avis in a I XX%-ish. very helpful. just about a aspiration. And XX% to then talked the peak question. ask margins prior Avis's

costs to system that peak fair can to corporate they're of prior it very to slowly, margins fair thesis? while take a sort we've the the say structurally the back? surpass a Given back Is taken given is going base and out may revenue company on a of come smaller travel just that that come

Joe Ferraro

you will amount out to use around to weeks history. in -- our And a that. was how our that we unprecedented, as in right? it taught for to this. this than that's and around we've that a Yes. we terrible again. period of to took And would a We've of much Brian differentiated pandemic were And as to costs company and of Joe us and these us saw that going The nature. say a in teams this in we hands I learned think able did been leaner of This I've theoretically if the you kind where has It environment. I something that. into taught maybe But of environment. different get couple -- been, me on That went never leaner But done get operating. never have next now, be, for way. that it operate budgeting it. did because to this unfair something operate that's comment we to I be things would operate It ZBB but its And very

going we right. because diligent to are be about So that, you're

operate a that the State it's uncertain, what first they if I we going one want be heard The of are knows mean, to going thesis. people or true is that it is vaccine. is in or happen. that about vaccinated any talk to No the in quarter those July. by population I therapeutics

believe does to what where be. cost for think to aligned I projection ready have revenues see if what will We that's you turn we it over if and will you it would for other what our Brian, any it be And color. base our doesn't. I with

Brian Choi

higher of kind steady a of in reach margin profile kind Yes. given like terms But back. what that I this through those Hamzah, got of higher the position just that if cost think takeout a your revenue give embarrassed we see takeout that and be we gone whether we're question once be we've I a of on levels to range significantly prior weren't would in to we again. coming to are lot don't and year a look we think Like ever we sustainable yet would XX%, don't specific structural of margin. cost EBITDA we will than state

Hamzah Mazari

as Brian, helpful. it. your Thank on Congrats, role well. Very Got you.

Joe Ferraro

Thank you.

Operator

Thank you.

comes from question question. Brian your with with Johnson proceed next Barclays. Our Please

Brian Johnson

questions. Two Yes.

for to data regard you at with transaction. first look pricing, sure So like-for-like I'm of kind

So rental at is trend airport for to long seeing rental, or kind if SKUs pricing a if a single trends, week-long the look say for were what versus day, within airport rental kind a mid-week you similar off-airport you of will. example, you're of use, large week

Joe Ferraro

higher exit in the September, Okay. those correct. pulled see have This is directionally obviously, are -- data our saw We you and trends of Joe. that pricing. showed public month guys We the

leisure with side, dominated business. leisure more by the On

them well. are grow right? I not, the that's think it's there's answer just off, longer however, of don't price base some out -- that high, said environment those you than And is a So thing, we that is of length that fleets transactional effect were to I more seen customer rental, the pricing of have stats while -- it wasn't your considerably a might think rentals that performing is digit length rental. similar question while more to there earlier they pretty of rental activity much right? thing pricing, costs single and for Columbus much, bad length you pricing for mix -- the operate to I previously. we've right? mix, less The longer tell I've directly, as into consideration to have got you is quarter, the take way And see Day aligned When good allows The pricing But has the efficiently. an on the September, The continuing. as the and that was much exited as to question, we are you through improved.

Brian Johnson

and -- my question. so that getting was -- of So kind

on a versus take off-airport ago? the a what's that you year rental, one pricing If say week

Joe Ferraro

One now week stands rental, right is as positive. it airport

Brian Johnson

roughly Can you much say or …? Okay. how

Joe Ferraro

you're leisure, would an a or not have week, mean, I kept incredible of be whether it's the or No. for days cars, -- hard just amount well, is it said, a mix there to plus a but change, say, right? so saying, that, -- is There's X the like have people I kept that X it because have keeps the weeks, is we for months. that that commercial week people, days someone car cars

people has the solutions pandemic certainty uncertainty them that. to great and vehicle and what allowing have want about think done, you If

Brian Choi

kind a of positive don’t get Brian, want all I think like we doing. of kind But into what across segments it by we the skew are to pricing. is speaking seeing have, skew I different generally pricing

Brian Johnson

driven. what Yes, the was do course mix of headline very because is to just trying I thanks. That's

question Second balance the on sheet ABS structure. and

cars you you new but is in is of going need the fleet the And liquidity structures? put having or expected roughly market them. buy that expanding what and that back Just expanding That's is, one. the into the in flexibility mind to maybe then and going, not the amount follow-on anticipation the that when to of back to if have just into

Brian Choi

do I about the Brian. with think way to has more to that's flexibility. right think the It it,

the into put need, itself kind are the of say us to dollar industry To of to. we gives point last doesn't rightfully to mean of this. excess every just in to gotten going are which to in, of we $XXX that use facility, we It we AESOP up million So to, given need want what option kind back to like the Joe's fleet just kind uncertain of to right more the we the fleet how want it. that will be when it's it's able now, demand as want we we to do we go option cars and we need buy buy out, but ability to see that recover and shake do than things

Brian Johnson

Okay.

again, Thank and Okay. you congratulations Brian.

Joe Ferraro

Thanks.

Operator

you. with next question. question from comes The Thank proceed Ryan your Brinkman Please with Morgan. JP

Ryan Brinkman

of number operations fleet relative for or your my might execution going terms taking of in latest future There've et to thinking recently a capacity the the developments Thanks or cetera, Hi. What bankruptcy. capitalization brand regard been questions. with Hertz how to that is firm's your impact current reputation, forward?

Joe Ferraro

Yes. competitors. This Hi. really is our on of comment one Joe. I -- can't I cannot

publicly what's obviously and that. are aware of on We we monitor going

We environment or industry. very each to teams all competitive you industry, a differentiate in services products other on the the throughout every when that ourselves it's our regard compete world and try day. with ground the I think technologies our in or on think based about

what company say, do to forward and tried our best would that it. do the I've we that's we what's think make leave can profitably. sure I company to would understand be of I is move always important our way for it And to kind

Ryan Brinkman

several be us latest the which weeks Okay. in what I'm in We're in the in of starting various some you're to reemergence. of Europe, to of terms seeing Thanks. beginnings is that virus markets. curious the government And demand lockdowns see with to regard quarter here fourth seems ahead

Joe Ferraro

Yes.

Ryan Brinkman

and has instructive rental government in not for to markets be demand mandated there where tracking would cars is but reemergence, virus it know been how interesting think I lockdowns.

Just more virus versus what risk some consumers more reacting reinstituting trend to is are the own governments their places those where restrictions? in on recently been

Joe Ferraro

that government stay answer the to cause to lockdowns think I is people Yes, your put. question restrictions and

to a people shelter prior spot. of lockdown, Now was what in to at in rented good we cars number a saw different the our U.S a

biggest U.S., in saw it time, quite of to initial then that this If period I well, about generally that. -- situation, escape want with which in think that the in somewhere get to quarantine is right? a But would sure demand tend demand. get they of of lockdowns then like quarantining, some XX bode what pent-up Its see down that government see but after we is a period pent-up won't and don't so the else, go after Europe I’m -- usual to magnitude as to to want a then, general, we'll well, think out to slows and have of And that's lockdown to time or out. tend frankly. single the I you people you and days, vehicle we go do, there's tend deterrent. people somewhere of also kind to do and But similar a And

Ryan Brinkman

I appreciate it. Thank you.

Brian Choi

thing to more of add the positioning international -- segment. has been think that that way themselves in this to one happen. So the I terms to they've Like been like for just something

If XX% what you down in days, rental pretty cost at the look is international it's done rental in incredible. was Like base in XX% down team in Americas of has terms the the international takeout, quarter.

But EBITDA without that So you a takeout could were always their astonishing, RPD, the nearly per they them, by of fleet if seeing like The international right work down take Americas perspective. that --I we're the able of in they amazing on definitely fact And it's this XX%. team. revenue hit focused be costs that like like now. that positive for weather storm we've benefit terms a that cost generate was is of tougher in in kind look that to to seen think and terms days unit at the

Ryan Brinkman

helpful. Thanks. Very

Joe Ferraro

Thank you.

Operator

you. Thank

Healy question. Research. comes your next John Northcoast with Our from with question Please proceed

John Healy

a ask parts to Thanks. of to two Brian. question Kind big ask I for wanted want to that. picture

around the now. different a the of term, of this of want kind different you you are the in spending think secondly, structure cost where or costs and can that approached then Obviously, kind view longer hoping where you know manner. aspects business capital into structurally business. be how to And the right time but focus, you're of been long You've could for your was a company dive time a I

focused predecessors a or little leverage was on repurchase. year Obviously, probably next in curious your allocation thoughts share to the be the bit largely so, Your on needs capital long-term. the managed over been but have

Brian Choi

tend question, business start we kind return margin would of trends. the on travel say my normal profile I looks vast now what time with first is of the the sustainable majority Sure. like of this right as I'll John. to

the those year to it is I terms but all trends the going of has cost does is incremental I the of -- in takeout, much in joined, Now, sure work year, as next of volume capture the and normal make kind one, to when team travel want before after, that know like of that margin we that pay return kind here -- of don't as are it done, I out good that return. to contribution terms

kind lot basis. everyone I make team now. level the our out, something understanding opportunity sure do visibility goal. that There's exercise of I'm normal we provide the we're lot an where still encouraged just a it a of going confidence. throughout can that through our about end working line-by-line, me will of do say in is a more to and So that prospect at marching what's right how What just of out in towards keep organization, this throughout the control, is highly seeing has be what's given long-term we we how that is is things And control, this same

In your second right. terms of question, you're

leverage to managed. be think I need the does

are naturally to will way. to of There expansion of normal opportunistic tranches occur leverage going virtue we're be in by returning of certain that as -- returning debt and to of some think leveraging I EBITDA well. normals just with levels terms retiring that that

all of kind keeping open that we're So options front. on

John Healy

you. Thank Great.

Operator

Thank you.

We our question-and-answer of reached the end session. have

or the to for I like over Mr. So floor back Ferraro pass comments. would additional any closing to

Joe Ferraro

Great.

So team's future through to company We thanks to for joining our to flexible us proud ability actions adjust all these today. of our our market unprecedented resiliency conditions. times. remain incredibly To truly I'm and summarize, and navigate respond

really as recovery for to strong your Our on in I of we I again travel forward demand interest continue and capitalize our returns. remains soon. to company. financial you level thank look to you will speaking want to any position

Operator

thank for today's this teleconference. gentlemen, participation concludes and your you at Ladies lines may time. you this your We and does disconnect

Avis Budget (CAR) 30 Oct 202020 Q3 Earnings call transcript