CAR - Earnings call transcript Q1 2021 | Avis Budget Group, Inc.

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Operator

Greetings, and welcome to the Avis Budget Group First Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce David Calabria, Treasurer and Senior Vice President of Corporate Finance. begin. may you you, Thank

David Calabria

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

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

And prove obligation call, prediction make can We forward-looking certain that, On we would or future earnings guarantees forward-looking or any release Such materially inaccurate, potential the the are our Please performance, upon statements. from information. our and to Joe. and the identified for the be of which that and undertake which website risks, statements statements all remind our with begin, could information, actual update available to these relied performance. and is to to measures. to financial future like we will like statements subject discuss results. our no such and we discussing assumptions, about forward-looking Investor forward-looking I our no forward-looking a not should of as other revise everyone factors to we other measures. Before refer earnings to may differ and our SEC release, we GAAP With and comparable risks press that uncertainties reconciliations uncertainties will on section website. well closest is cause filings define Accordingly, be as be periodic including results measures in as Relations to call assumptions to over actual I'd turn how financial this non-GAAP

Joe Ferraro

us and for today. Good David. everyone, morning, joining you, you Thank thank

not crisis. content Avis consistent been Budget with calls, simply For Group the two earnings this with our past message surviving that be would we've

do for a potential during recovery XXXX. organization mission things ourselves XXXX of in the entire necessary Our a to best position around hard rallied adversity the to

what could off, first commercial down year-over-year back be Americas, and full days XXXX. the XX% the illustrate recovery occurs. XX% day levels, quarter to travel our historic further that and rental still versus not In is air results in rental with down While days still were when

For than segment since we the this you our how of their structural significantly healthy XXXX. all XXXX a Great directly for still bottom is quarter vehicle EBITDA can pandemic, Today, reductions context, beginning history. in the headwind, the this of the margin costs Americas disposition to quarter the we've than our just improved fleet faced first of higher during we benefits fell Yet implemented, pricing environment the is that this level recovery. time the believe the despite this and due of best EBITDA cost results and disruption review The first line. strategy, all that decline Recession achieved that the to why I results higher and our tell I'll through being first quarter of I those adjusted company's in delivered adjusted a

Let's with the Americas start segment.

fourth demand quarter revenue pullback of you the demand in the wave. summer and we the Conversely, sharp season. improvement a of quarter As the travel during XXXX, of second a in recovery the third saw green of shoots sequential in emergence we XXXX, saw recall, with

incredibly visibility Booking or major of had was and and December. year-over-year, in two in through months. the more Americas windows these short significantly quarter worst like Christmas. going previous like we in the we than with XXXX January saw which first February, in Januaries, just of one last Revenue frankly both but Thanksgiving span down little the XXXX, lower the middle holiday we When obviously the demand just November of any was confronted of quarters. was in scenarios Revenue of the were in spoke three no had Now gone forward. what we month

good The our what was ready news. entire we bad control, this. team around concentrated news which the for cost. our could that's was is efforts We that So

offsetting staying and but was definitely game as we tirelessly It by our cost the our continued wasn't of We as the headwinds stringent revenue fun, plan it rallying declines control. teams wasn't faced. throughout cry easy, lean macro possible fought against the organization and

how aside, hold But on and going with to I line don't you has an change. call because got the an end call February. things of an our I been leaders earnings is in it when after difficult in how I sight. As said, internal key some the this are see acknowledge exhausting

back, all Now maybe at come these February. not month hard months, end what and the month, was next maybe demand see of Starting of work not this after. will one you'll But the for.

of do in and Now getting defense to best, offense. which that's We doing stronger feels convergence pent-up I exactly and transition them. with demand, our is do was the to sudden we across to Then seemingly a the fleet. need reacted who consumers cars to our have the pricing. say, people see it started to our tight overnight this. U.S., to from fleet March good It what velocity to And back quickly with And what and happened. invested be organization

we around way One not in we're in However, quarter challenging on want to margin staying efficient started an the our will and and tell of delivered first the Americas of the XXXX, etched saw quarter. call, forget that this extremely quarter cost. the in the their now RPD. what of start history. in down into which the And XX% the into That first EBITDA Americas, first hard while incredible quarter best not of the that was change I nearly momentum in foundation EBITDA demand quarter the in back has clear getting half we first versus learned be demand, XXXX you rental I triple revenue this adjusted first out of quarter is the day second the both carried is discipline despite that do over of despite company, guidance in the specific into the XXXX lessons our to close around and why of being adjusted

segment. International now gears shift our let's to Now

the narrative same. certainly Americas, International to face is from am the delivered been level headwinds. start the on results they different let abroad but just with more team accomplish opinion our in I what While unrelenting has of high the of I'll me the incredibly able the detail, proud are into my get takeaway.

in Americas was that restrictions, XXXX Yet and they fourth quarter and International effectively down despite first Our in COVID continued International world. the cross-border XX% the not are our yet of are quarter segment living is still revenues very has. lockdowns has The pickup the country to seen throughout first quarter COVID in travel demand Due over discipline about nonexistent. revenue quarter flat segment a much year-over-year. on a when It's to cost will those constant down of than a ready. but Tremendous versus be to decline will the the first deliver uptick International less occur, for million, EBITDA XXXX basis. adjusted segment $XX and we of that currency on a was million the predict results. reported essentially $XXX early basis required still

is in topic we our is heart maintain Fleet quarter. dispose Moving relevant acquire, management How any given both what do. Fleet. of operating our our business segments. to and critical we at vehicles of of the on to discuss to a

working while on events, have to industry, last those that would months. over properly the company call, effectively make On entire impact outsized due an And recent yet our shortages been optimizing the industry. business and our and and and to resolved affect semiconductor our fleet utilized. hard macroeconomic challenges realize will throughout we mentioned that our However, fleet having been we coming we've availability impact not fleet our our deliveries have are is sure fleet on of maintained an

OEM hand-in-hand and how are have So to daily off, conversations this what our are about First partners with we doing manage it? situation. we working around

key deep lows. have have that through relationships decades both and We over with our been built manufacturers highs

we last will optimizing haven't semiconductor how to as as what year, helpful making faced after we when We each they It's year. year face this we the they year helpful and this be challenge Because year, the can year. that ever is about better challenges about that's partnership were about. everything or real not as other it's do forgotten

and to long I flexible want disruptions their them confidence of fleets. able we, deliveries being with new be full on, you our partners have with while being these to but fleet We to Availability maximize OEM schedules. able that laser-focused that will production our a tight to work we'll through we're have is navigate assure Avis, navigate history something clearly at of

cars and expected new current satisfied. seen daily we've getting are our in schedule We being

became we in demand up the surgical with fleet As pick Americas, saw dispositions. we our

our to I all we fluid vehicles fleet. can I We're also allowing to had Additionally, it's most vehicles usable all be slightly service miles just alerting ensure know about addressed proactive one future are What invest linings that real-time fleet is flexibility to the doing demand. we potential ensure you we both current put to preventive guarantee our now. longer. them we can our situation heavily questions out I I our us very pandemic with so minimum. this is power in our by silver right issues of get of the have dividends many as fleet. didn't you and hold and have lastly, to with them, meet dealing keep of us but the to of a everything have And fleet we're on taking they connected the measures to available maintenance the wish our answers, is paying out that

with pandemic, to wanted Select real with Finally, nice Avis in experience, commitment this world Mobile prior I'd post-pandemic Even factor safety. our contactless the pre-pandemic has to a our product. was to like become customers a but a what differentiating have close to

directly of up our that transaction to for can Avis digital on still Preferred. Preferred via of the convenient you It's on Preferred Our contactless a during experience. customer to times a for and not spiked road. to automated been unique received. encourage specific has reducing an their check-in process websites, our on arrival the upon vehicle a our more pandemic and our if well. sign to only get strongly can as advantage phone, would QR completely Avis members all Avis you extremely Adaption member, their not code I you're safely exit their select of proceed and utilize take express well But then car journey but quickly exit this customers safer

exclusive We'll efforts Safety through In our Avis invest Worry-Free addition in Select Promise. industry-leading Pledge normalizes. product, our even and to to Mobile partnership safety the enables Budget and employees measures with to protect world the RB as our continue our the customers our these

The increase to we the by not here, organization continue opportunities. it a as continues. drive capture and around cost during demonstrated during is. With determination and do we where our capable that, I'll recovery how turn go from productivity, pandemic now our XXXX, XXXX work resilient shot. not Our over long challenge discipline find what work to and this day, done proved team We're team prove this we'll Throughout a liquidity itself our to So here? ways outlook. in of grit efficiency and discuss strategy recovery. Every to we'll Brian to is this

Brian Choi

Joe, revenue near-term and start I domestic outlook. increased like you, our are has earnings discuss today My addressing comments to our will adjusted from and everyone. morning, media I'd liquidity and from good numbers by attention presentation. the day. Thank topic our press reconciled on off our received in now both A release results, focus GAAP per which call recently. will

in rental We, inventory those together at consumer the demand things consumer this to deep for car determined the seeing prices a access shortage. tight is clear. industry. increased understandable Avis, the and do supply are very we be prices. due the availability Put two, in semiconductor set pandemic; of We the place and to as to necessary new across to the by to, time, that vehicles impacted it's discover year not At leading and industry. what will me be and demand one, survive delayed Due upwards. due sheltering price people Let two

are of a seasonal a So in some business. this Avis at affecting Group's Also, so the instead our perspective, very Budget currently influences picking let's things least another, business, look me unusual X we're at where outside quarter or period let we're context, from annually. put macroeconomic in

the Recession RPD So at cycle. the looked X-year normalized to define We from as of period. America's pre-pandemic. went and this economic span done We what the last let's the across Post-Great back XXXX XXXX. period normalized at has look and

full segment year XXXX, an the achieved of $XX. RPD of For the Americas

the the For up metrics our average an largest public years. as the up hotel the XXXX In $XX, the fact these Bloomberg the PRASM X% flat is full segment same over over carriers, of increase this even RPD an X past in in increase airline the of as XXXX, year rental XX%. Americas over measured period, measured the by all is remarkable achieved of to The given that day roughly we've cars, STR, room XXXX period, by is of an is input and reported seen more price new price cost. Avis significant the XX%. of years night,

XX%. purchase, over measured as an is cars we're $XX,XXX clear for average what's by TrueCar. how where roughly transaction this an actually Avis that's competitive which look to gone $XX,XXX reasons, MSRP, proxy up disclose magnitude happened for going in not as increase, for period, new the is over the consumers increase Now to to specifically, much a ATP, this of price of but gone of has from at a

data, firmly consumer a best offered to believe this that propositions is car one of the the travel all the American rental I of Avis value Given sector. from in

seeing bargain consumer. yes, for And today the price an higher this even upward So movement at we amazing previous is levels, this the bit are catch-up is but decade. given some of in a

move financings. Let's and liquidity on to

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

our borrowing had senior to cash senior million all facilities. and capacity XXXX due available $X.X notes March X/X due XX of our notes X we billion in XXXX. redeem We Additionally, $XXX issued of ABS X/X outstanding of

took of historically notes due low of redeem senior senior X/X notes X outstanding all due XXXX, million portion X/X X/X XXXX. a senior notes interest XXXX March also We X $XXX and rates. advantage to X issued used We our our of of due

in In on fact, have X/X is offering X history. best our any interest senior made company's our issuance notes rate we the

is maturities well-laddered with and year. no facilities XXXX corporate to need until debt conduit refinance this corporate of Our ABS debt any meaningful no our

with facilities end tests all of the We covenants headroom are world compliance the secured significant with in around of maintenance financing of on our March. our as

on to Moving outlook.

into first As rollout the second due is time. around vaccine annual this quarter. say guidance continued I we quarter not trends we semiconductor shortage, the release, we the continue the macro the providing mentioned we in press that to and the are saw to in back of at uncertainties our What expect will half

a a than focus believe XXXX, we for adjusted days second for the on basis, versus a versus With this the point, will rental capture the overall in Therefore, rate despite environment be significantly So deliver the being quarter second quarter but stronger down this. Americas. that, continue second to cost Americas to we let's at be believe able XXXX. of adjusted expect the consolidated of we benefits on higher in we quarter up quarter offset it of of XXXX EBITDA open will questions. lower will our the XXXX, International EBITDA the second to

Operator

question first Healy Research. Please come proceed of question. Northcoast with with Our John has line your Instructions] [Operator from the

John Healy

on fast that And ask business last guys and over Americas? mean those wanted utilization turnaround could largely? of in are on a sort a you qualitatively, described the max items. kind fleet can at congratulations I the in of I summer. little to level fleet of the really, the to have the peak, able especially truly terms at together been But about have of what to some sort get realistic So and bit scenarios you, what just color the put know months. what XX out amazing you've Thank quantitatively, the situation. I

Joe Ferraro

as fleet, the fluid the fleet, it's is I here, a situation, first take to about you this thing want finished our about When know. we Joe. say at averages. look Listen, where very a overall you John, Yes. it's quarter

And averages can be those sometimes misleading.

we had and October, So in if pretty November then the you think challenges about quarter, last came good December. a

really And of of said the finish this So got and I month the kind -- them in velocity down terrific rid then with about in as same, early the late. of was started with that on held to part March. the quarter, of just the off quarter was cars

If more you March. our we last back the that of I most now, we then. And quarter fleet expected were much what deliveries -- April look at cars at would would in thought of month the more we got our than and what We say deliveries than we those cars this, overall quarter situation the is have we show. averages right during thought did of our of pretty time. in period where end

were were pandemic, last of like well were you the investors, think you during last questions and from we this as you call on how sitting there are where year, we all as year If out out and rightsized enabled going today. us that. just did to of our be got in cars. that our of to this are the get we We we position and business, fleet And we about

the apologizing So that things of so fleet. even to last believe looking in our the at year great. sold when maybe to we end earlier But weren't ability some not January that I'm cars and the fact we flex have we

far historic give ability we service invest and us company. As will to a utilization much very that We And utilization. believe gun in significant the to our improvements quarter our that, ran goes, the as in for fleet. have last levels truly really down in

in You saw March, go some of certainly we that and that we'll as in -- see forward.

they we're very what's do, and it's we say develop. that, And OEMs what's working -- with And we'll with or with deal means, will that substituted. what getting as hard where we'll or whether day delayed understand they every I are those what's getting could but canceled the fluid. So situations to getting deal

John Healy

look you you in kind the year, flow a out that would future. But generate years. another utilize at maybe of you flow I QX, doors started you allocation put how to out four And what that's this you you the asking as to be how question kind This some how should guys did we billion But two I'd there. that decent next QX cash flow thought And Obviously, kind about cash through free would of be then earmark think for the isn't Great. how this target have in to guys how that six likely usage? capital maybe some quarters? of the talking some you're just and comes question. given And point cash business that should I $X over about able think of one year.

Brian Choi

it's one. that John, I'll Yes. here. take Brian

So And where I period, cash times debt you'll think makes it to I quarter. we're the great going took a allowed tranches Avis makes of what during flow also stub advantage leverage comfortable sense were we movement I believe purchase $XX to pay under today. this to see to sense. also think of use we've But X by times expanding free historically upwards, said We're that stock get our there primarily and X that EBITDA. we'll only basket, investment. that down our opportunistically payments with, is despite of million restricted that recent this remains relief we stock and

permitted. we're to resume like I'd I free undervalued. obviously, flow, when buyback by share program, So funded cash And think our

had to So we done kind of going historically. back what

Operator

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

Mario Cortellacci

has guess forward? going question industry talk some how for sustainable as about do year? the now is post-COVID pricing. in wanted won changed do prices This I past I And the are throughout is think lessons just of the And structurally just the you pricing filling these you the to Mario industry some Hamzah. think Cortellacci has dynamic in

Brian Choi

one Joe comments. me his start let Mario, and will add with this off

the during or so then this what's I want then scrutiny. I pricing So That's and not week of And don't the devolve quarter this of this investor last pricing this month discussions co-round doing to was really this into an on. the focus team. and

this we, capture the gravy. executing pricing the that's hand-to-hand We around demand cost out business, our optimizes meat we're But obviously, combat pricing there of potatoes team, like as team necessary focused what's the and So price of operationally, to is our discipline fleet and in do price. terms a model.

going outside reading So where I But categorize now pricing we going But reported to Joe normally understand listen, you're financials. quite we're In from. to on strong coming wrong. environment not What strong. what is providing to percentage out you're commentary fill I'd in like, technical I'm right there be dynamics of isn't the terms, state in. price let our

Joe Ferraro

Yes. Thanks, Mario.

fourth Americas, quarter So take were, quarter, and the a think, we if this and this finished -- month, up XX%. with the look where price, I X%. at we you And up we in we finished

we second dissect month, finished the and by I'm signs quarter. going quarter, translate We've off, you into base the higher. we started much early If at that as seen a month of not off forward frankly, lower the move

you demand destinations, of indication will XXXX, And -- in is more I we people sorry, being be think there's what will happened traveling now that Easter plan in -- March, There a March. that say beach week were be pleased second is holidays. those strong. hasn't And even about holiday. this, results you was April still maybe That's in it. March, to it the in really have the of vacations go that a are this active It of Easter, seeing some And very, of that with particular, the And March destination. changed. the in to in could really than -- much our of about over people states this end like Easter happened or year what if in think in around I tail Easter. I will Easter in say And be you're Easter specific as week Easter general, later. March about there. the destinations kind of we to, out always April. because is second with in better in I'm And -- of very whether demand, saw travel is would mountain pent-up right? vacations key lot wanted

prior better it was than not Obviously, but fact, XXXX. only of than matter better year. a As

periods as think there's vacation significant vacation still and continue. that breaks, and will we demand destinations summer So the certainly surrounding that

Mario Cortellacci

just have And cost on asked just much the update follow-up cost will will think levels. takeout. we And reached the us could Or cost on revenue Great. much and as you way, does How be how how different takeout of you billion one apply? permanent I much you come talked back? about pre-COVID maybe permanent the EBITDA a takeout guys $X that in guess,

Brian Choi

get we Mario, exercise. like as our going continuing numbers But continuous around to just Yes, ongoing remarks, and Joe the this we're then how specifics And in prepared here run not we're isn't mentioned this just some into something we're that. efforts done. we say, around it okay, cost is It's live rationalization. a is, now. where now Like

the costs. around team, operations visibility we're getting both in entire finance, and aligned So more

continue print. and you the on what instead we we're the can numbers what would with manage we've So show It's do our pandemic, going done But the like do, telling we you and that I optimize going results. that to quarterly and of initiatives to we'll forward. during rather deliver

Operator

Our from proceed next of come question. is line your Michael with Research Millman the Please with Associates. Millman question

Michael Millman

touch lot takeouts. in something to area the before. least enterprises, are you margins But reputed XX%, sure even on to cost the So of have you in want a a remember, I'm touch didn't was to on. There days XX%

or at, want not are So on or looking comment are don't I think. looking And lot that there know of that you're you where at hinting say to suggest that if more would you than kind I wrong? is at the numbers enterprise and upside a

Brian Choi

No.

that I'll And the stronger target, of dollars seeing here. that Sorry, we're not XXXX gave that, it's billion is billion by on say under of comment the But was outlook what based that. $X revenue of a right the we in in that now Brian $X.X given and was is to that I'll terms RPD back that commenting rate. construction listen, that revenue roughly right? you're seeing, assumption days not on but that just when the levels, on upside absolute

previous updated comment, stand new time. still that RPD offering not and on assumptions by based at So I we're this to targets

Joe Ferraro

to just say Yes. jump Michael. I'm going and just here in this,

that community what three, all Americas both at and in and both the the segment three think have the you had happen three to by third, kind the now first. we've the over I And been doesn't fourth But that chance. look if quarters, is now has tried our quarters. of show last COVID-related you record investment margin, last the

things processes that we've to there some our our efficiency. with business done And of proud on internally So are and gain pretty that. we're

Michael Millman

aware? between a have production happens of -- some effect you're car happens If and oil prices, records, used somewhat have direct is related prices, on will this car which presumably, new there question. with increases, if are used I all adverse an indeed, production what as with relationship autos setting what kinds

Joe Ferraro

Yes.

semiconductor and manufacturers what parts. a had, they so, it new a have for which When -- You're 'XX, with really demand. And car goes thing general, of unfortunately, challenged. right? you also we are industry in about And high inventories right. been we you pretty then in there's think manufacturing continued now. used do, the as and in really X-year-old Same building with on our Used cars, cars rightfully provide values we've And early seen in got in a values arena XXXX, bought the and we'll think out what's going new on -- Used that vehicles. in weather Texas, issues as And lot supply and issues -- cars in general, car are right high inclement -- in throughout chain related throughout builds Last COVID year, and XXXX. shakes much hit in will used the that what fact that continue. cars we consumer. if to just think car the 'XX, see car less to used industry the about

Brian Choi

throughout of all production And just course, there SAAR a and there's new to very car relationship just that was like remind the values, pandemic, to and that, you used between healthy car XXXX to before but I'd used a XXXX add to car prices. record environment still

Operator

questions your next Stanley. Morgan of Kovanis Billy questions. Please proceed come from line Our the with with

Billy Kovanis

Strong the on Congrats quarter.

of the from some on you of some sort demand And trends anything the of could of Hawaii high color those early bookings forward leisure wondering around Just provide QX how destinations around here? sort Florida, now? like and trends, May if commentary especially of changed in sort any vacation any have more into

Joe Ferraro

Thanks, This Joe. Yes. is Billy.

trends us we've about car think on thing cars. in and hotels a right by When changed You're airlines, book you have first then things, that about that. general, in are the rental people scheme seen of The followed the bit.

why is that out. middle in. mean patterns closing definite chain, still going the And destinations closer So the especially booking is the still more part are that be what what that was it, those uncertain see last March reason height month, being open our travel. That bookings, shift people people our like a going April, in as of closed this, be to much far evident that we're and as over of states are now predominantly case. and say kind not you the travel was I on which to pandemic, in. But is booking around and the always could last about were of on the some seen we've further I maybe probably bookings towards was open what because will historically of during and

book if someone We're might words, seeing other on book. a cetera. Wednesday, they it rent-a-car going in a for Friday, now to on was So people et

everywhere. it a greater to demand that did just last at -- they shows you at a greater curves kind of look out XX can than it's and you over into year the obviously much you change clip than which And the just in days a bit. clip about If did starting XXXX, see future, are they

Operator

your Brian with Our questions. next from Please of line with Barclays. come proceed questions the Johnson

Brian Johnson

to agreed Brian's with. on question midterm follow-up and I that by prompted industry last question kind history, quick of then One comment which dynamics

have obviously, Just around short term, do you much kind not booked, capacity summer how of looking period typical any metrics versus your already at July, but the -- summer? August a of a is XXXX,

Joe Ferraro

are in you I the tell which June precursor July as what in sit It's around always beginning seen not a an since will around right you season, those gives improvement of we've really we What what the August. and meaningful holiday in to here now is that and further out happens bookings -- is normally May.

now, but that, and imagine, meaningful periods we've travel definitely but say as will some seen I around and as travel traditional those you traditional would not So right improvement destinations.

Brian Johnson

about time around being depending then your travel And per RPD, little stuck on $XX rental Brian, very car forever CPI day, other over up, prices Okay. which categories. comment to following compared

of capital? efficient more company could Or enough apps out come that Travel is it. this a to a there more is desperate with change some ways on down shopping pushing Let's consistent perhaps sporadic very to questions, the -- we when of in go so market? from this return earlier dumping back better wars, supply, of a the do on -- a [indiscernible] period, But its industry price return the to take kind supply/demand on would old OEMs least price and automaker obviously, rental summer year whichever the just normalize, out is you or industry back a going two at of see things meaningful one sedans and imbalance. make to unique car

Brian Choi

Sure. let's car said of we're hoping Well, entire do rental looking OEMs it ground. this go I kind what how for when as least that we're the back to actually, can't the dumping and kind but well, the tell a I'll industry, you industry think you what we're I the -- -- were at Brian, speak using for. at of

OEM more was around place. the that's ago, much a to maybe feel there's and be maybe their a gotten real better more true like think more but rational much, than like I to XX fleet X than we kind concert by years sales, that of years been ago, effort

In of the car has fleet industry few the last prior structurally years, been shrinking towards allocated the kind rental inventory fact, pre-pandemic. from years industry, kind the over see the you'll of even even

at us, more For realized, is at least, less. we've a lot that can what you do with Avis,

a rate than today. near whole, maybe that those, industry, have would fleet this we're we capture we as be going forward control, overall. those use like through which so some the can a of like the around want experience, gone And and our of seeing which to is, said, death to some around has terms efficiently disciplined in benefits realized others, I how to that think things price I we operating more

hopeful. I'm So

said, time going That's think happen. only to But you I what's will what we like now. see that's right tell.

Operator

come proceed Bank with question next America. Our questions. is of your of from the Smith Please with Aileen line

Aileen Smith

past from how have us the I the an From with think to in about that actually market call understanding, my something industry and in some of talking auction levels. comments manage appropriate to is yesterday to on going you the fleet are demand. companies seen close done headlines someone have guys effort rental car supply the into the vehicles used to this match purchasing

comfortable say coming past? that perspective, does So that than from in more for the And to so appear us in used particularly and on new being get using vehicles? doing you're competitors? depreciating your aggressive purchasing from disciplined been comparison through front that and would you on you've your in can vehicles to how more it how be you Or are your in guys fleet, walk you you

Joe Ferraro

Aileen. car lot Yes. of late you. purchases. Yes, about Thank a used I'll that, written take there's been

at this used always Let company, our me historically, we've say purchased cars.

it think our general, What we what's what mileages -- large Can not at general, has over is reason model a stretch. a look of the How many demand? to we can in us? it's cost in them of our by peak period mileage? think in is strategy kind make we any the a cetera. fundamentals the the close certain I the purchase vehicles, part Do specific why But And in some on is, et on that basis? they always a of going area? I sense we -- that cover they use maybe weren't strategy been -- saw make our

very They're not If years, a of is that, yes, us. we've filling. going our on to area, stretch, shown a would per-unit And I'd it more less we that vehicle to of And that's can we going you our in place we're fleet a how mindful it's important for there's and that operate to amount at by what of we just of we couple and that's miles if strategic to So cost by peak value because we it fleet part think certain a you them. been certain we've exited. the when life of but looked them residual purchase take big over use would the to be of there's for time in take we've say period just regard. do. very and take going I questions the a of any But on months But further in, step extend of has say, operating and lot a there's other we long time. over period always or here. car and a a be something certainly, this, one as a that fleet, demand supply want there's uncertainty -- a I'm could

doing building We this, our field have in decades headquarters worth of both and in experience itself. the

do asked XXX systems a in with XX fleet of models. we great me And success gives have in over to anticipate doing We going great a is use for our we where think in and of some us that. deal couple years states, this and had I We've make pricing, and number reasons. the the so that And and we demand ago. or demand cities to -- ability manufacturers that we that that one, be on last you put and

we get that is, that of And it additionally our in rent potentially able like was changes this to where recalls put them when be to the X/X insulates XXXX 'XX, them. dynamics against just and supply in want the the whether something for were there's fleet around uncertainty saw on and And of hold, that. that through we supply it semiconductors. first to gives us opportunity The actually customers cars us to important, as buy

Brian Choi

a that add just back going to just that you had mentioned. bit article to that Aileen, I'll

I right? is there's that demand But kind in-fleet that is in-fleet the overarching option that rental cars read article that's are the makes the try demand, way course, we -- going match for in certain and of and lot cash-on-cash to certain out the principle our of the And players of a there whether industry So If a vehicle. the to we to the vehicle sense, we returns. what unit supply of economic will do. and

So in when happening used we it increased that's market, well. the we does, what's do, see but like dramatically as car

of Joe it isn't one-off say. be basis, on in of of a in like out says, pockets a cars, to about I'd we going more like we're do makes this and purchasing cavalier terms used bunch that where like going something So it sense will like

Joe Ferraro

That's right.

Aileen Smith

that, a to very then as Great. question follow-up cost That's around helpful per fleet unit. And commentary.

the year Or more per significant the cost you've aggressively quarters several depreciation per sure One been unit vehicle clearly number? structural the of auction recording I'm for still is we this the on less you're to on But the has or of record your meaningful where cost fleet, the a fleet. made of this gains get that of gain that actually fleet first quarter,and as some the size help future you de capitalizing what efforts if vehicles past the fleet think pricing? you seeing used dynamics vehicles sale detail unit are and increasing over into defleeting in are we're we'll on channel queue. about quarters in dynamic in selling

Brian Choi

at that queue, price kind we is think separate that just haven't is I then made at Yes, vehicles. changes any our the and that vehicles depreciation of we terms in significant if that like of is Aileen, you notice like the gain. what book we're seeing The a we swings What on realized all the look depreciating between out you're how sell. the basically you'll

right. you're So

of sales I volume back right now. are that kind XXXX fleet need those before, because but higher you're wouldn't seeing As maybe levels historic of we say what we see rent, to and normalize. decreasing kind vehicles to we at where than start of you'll the slightly

Operator

proceed Bank. Please the come questions. with questions from Woronka Deutsche Chris your next Our with line of

Chris Woronka

of commercial fleet segment we that related pre-COVID. various beginning you opportunities obviously on the been little to we rentals? think demand, then what I obviously, a That that on could as more you're about of for leisure mean, buckets And share, do a do year, you but I view bit see into early Where you out, question and fall that the were of on the side? is shortage you happens ride corporate a of on demand. some Maybe even the has post-summer thinking about talk have to a into next well ride on decisions of covered, drivers. and buckets shaking mainly about read about maybe kind tap the was share think

Joe Ferraro

Yes.

places of you and You're and pockets most as that kind the of Denver. as surrounded, tail And seen opened going March of locations quarter, I up think and of well well. the of destinations kind strong. Florida of the we would out that it We've leisure Carolinas saw right. are quite ski as very, being and Those of, Utah as there frankly, in Hawaii Arizona been still very end popular month leisure the then of as demand, demand has said, and that very

You're right.

-- commercial. the we back the improved be do we now. other which start And likely has on to going more bit. their That's of rental we and say offices has commercial traveling to still as like, segments, As high. involves sequentially season, exit the summer -- a is I business hard business this, what is demand commercial is right have to that of our anticipate month-over-month length that seemingly some and get really what will The what's pretty read most there? people

positive. a been that's So

then it's half. to how the our accounts that latter the thinking that think about the get commercial and do all people internal of I then start the the business their part offices. do buildings offices, range. back of back to travel in on we'll clients when maybe breadth year. that about predicated we own travel back think we're in really and getting they're do kind We the After And and with, our summer, of feel we polling much will they the in

anticipation of probably some that. is So there

lastly, the been hopefully far is able business, But up. American business, in happens some over tell. inbound virtually There business being there of talk a could the countries Americans length shut Canadian we has European your profitability. all they're other is us South inbound, as the that's which coming vice basically the EU significantly opening long versa. couple guess. question, and ride-hail We've been but fly and was day we to on ride-hail because As down, grown But anyone's far of see that And our for kind from seen inbound wait as past good years. of far have pretty kind as as some That's up, the as the shut When our down. about of growth stagnant.

to We have as a see we we -- business, to terrific daily. an grow. partner who we opportunity that work with And continue

for I et on truck terrific growth the business that commercial lastly, we our overall think utilization, van said with in truck. the hasn't And as cetera. or the business many business, the times And truck stopped. previously, grown e-commerce segment, calls has tremendously

of that think the rest will we year. continue throughout So the

Chris Woronka

bit about and going seeing -- confident derail you any ground what not labor on impacting the appreciate I is little a to We is question all of that consumer-facing that a progress? unit color. businesses. the talk about Can you the And Terrific. lot margin various the increase at headlines you're hourly are follow-up that read costs. in about wages level Okay. significantly

Joe Ferraro

over minimum some that all we've past cleaner out to cost cetera. living to been levels been you Yes, of of than productivity wage about, and been that. And allow our at question. evaluations to on us about that in read great yes, of which productivity the our had smoother, past. of in We on West, looked how make deal We've business. deal we continually processes work able and to -- And with level with higher have give we especially Yes, it's a And something -- certain we're context. thinking We've the with well. we've right? it's as states years. number Just adjustments obviously, increases, dealing et

we are that. yes, So certainly aware of

stands right We on. it will goes it's that something isn't time a watch out. giant that as now, But monitor as

Brian Choi

at kind productivity to able of all. this Chris, pandemic in the the issue a order time, we've Joe the during when Investing do in to be said, less. to processes, more the technology lot been systems, an with Yes. wasn't spending like of maximize

something that but monitoring, we're something is about. it good feel yes, So we

Operator

question-and-answer would I reached call to end have Ferraro of closing the to back Joe We turn any like for over remarks. the session. the

Joe Ferraro

thank joining and you us you, Thank Yes. for today.

So history with delivered margins year to highest showing performance in summarize, we delivering through quarter stringent International first Americas outstanding the and quarter resiliency EBITDA the company's control. an and adjusted extreme this cost the

strong, and you financial all of I recovery with want as speaking you and I in again travel continued continue to look you. Our to returns. position for capitalize the shortly. your thank we'll demand to our company, interest remains Thank forward on

Operator

you for teleconference. participation. This does today's Thank your conclude

your day. at time. great this You may Have disconnect lines a

Avis Budget (CAR) 4 May 212021 Q1 Earnings call transcript