Avis Budget Group Inc (CAR) 0 Q0 法說會逐字稿

Welcome, ladies and gentlemen, to your Avis Europe interim results conference call. Throughout the call, all participants will be on listen-only mode and afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded.

Today, I'm pleased to present your host, Pascal Bazin, Chief Executive. Over to you, Pascal.

Thank you. Good morning, everyone, and thank you for joining us for the Avis Europe interim results today. I'm Pascal Bazin, the Chief Executive of Avis Europe, and I'm joined by Martyn Smith, our Finance Director.

There are three key areas we'd like to cover this morning with you. Firstly, I will update you on the offer by Avis Budget Group Inc. for the Group, made in June. I will briefly cover some of the key points from our performance over the past six months, before ending with our outlook for the full year. We'll then open the call up and the operator will chair the question and answer session.

So firstly, I will address the recommended offer for the Group made by Avis Budget Group. On June 14, 2011, we announced that agreement has been reached with Avis Budget Group Inc. on the terms of a recommended cash bid at 315p per share in cash, being a 60% premium over the previous day's closing price.

A circular was sent to shareholders on July 11, 2011 outlining details of the proposed transaction, and the scheme of arrangement. Our shareholder meetings have just been held on August 1, 2011, two days ago, and overwhelmingly approved the proposed transaction.

Final court hearings to sanction the scheme of arrangement are scheduled to the end of September, with completion presently still on track for October 3.

We believe that the proposed transaction is both strategically and financially attractive to shareholders, as well as to customers, partners and other stakeholders, with the reunification of the Avis and Budget brands globally.

I will now outline how we achieved our results. We are delighted with our, as anticipated, strong PBT first-half performance, the highest since 2003, supported by the overall economic recovery, and benefiting from the substantial transformation that has been undertaken in the business, strict cost and capital control, and the drive for profitable growth.

We have continued to focus on margin and returns. Gross margin was held stable with a good fleet cost performance effectively offsetting a lower rate per day. We improved our operating margin by 0.7 percentage points, with a continued focus on costs and headcount control. Note, for example, that staff productivity was improved by 5.7% in the period.

Pretax margin improved 1.9 percentage points, with the interest line benefiting from the rights issue as the proceeds were received in July last year.

The exceptional charge of EUR2.1 million relates to the offer from ABG, but this was fully mitigated by a gain on the re-measurement items of the same amount.

Underlying earnings per share of EUR0.041 were further enhanced by the tax rate being reduced to 32% from 43% in the comparative.

We have also continued our rigorous capital efficiency drive which, combined with the improvement in operating profit, has yielded a 90 basis points improvement in ROCE.

In addition, we have continued to lower net debt by EUR131 million year on year, following the EUR181 million rights issue, which was partly offset by volume growth, and the preventative fleet sourcing actions we took in response to the Japan tsunami in April.

During the period, we also continued our geographical development, particularly growing our joint venture in China. We have now a further 11 rental stations open, and are up to 49 stations in 31 cities. And the development of new mobility solutions, including the full acquisition of Okigo, and subsequent launch of Avis on Demand in France, trial of new self-service kiosks in Germany, and expansion of our very successful home delivery and collection service in the UK.

Now let's look to the full-year outlook. To confirm, our trading at the start of the key summer peak season has been strong, continuing the good volume growth seen in the first six months, and with some early signs of improvement in the pricing trend.

Forward reservations for the remainder of the summer continue to be ahead, although visibility is limited as customers continue to book later. Our expectations for the remainder of year, therefore, remain unchanged, with no material change to our expectations for the year-end net debt position.

So in summary, the offer from ABG is on track; we are very pleased to have delivered a strong performance during the period, building on the hard work put in by everyone involved in the business over the past three years; and our outlook remains in line with our expectations.

Continued strategic development, together with the proposed reunification of the Avis and Budget brands globally with the recommended offer by ABG, which has been strongly supported by our shareholders, positions the business for a highly positive future.

Thank you for listening, and Martyn and I are now happy to take any questions.

(Operator Instructions). [Danielle Ward], JPMorgan.

Just a question on what you're seeing in Europe at the moment, really, on the demand side, if you can give any more color, obviously given the current economic conditions there.

Yes, I think the demand has been quite strong in the first half of the year, as you have seen. We had a drop in the revenue per day, which was partly linked to the strategy we have to fill our [shortest] period with more contracted business. When we look at July, the performance is still very strong; we are 4.6% above 2010 with billed days, which are slightly high at 5.6%; and rate per day, which is slightly lower, 0.8%, knowing that there is a very strong pressure in Spain. And August reservation trends are also positive.

Anyhow, we remain very cautious for the full year because, as you mentioned, and as you know, the economic environment is not one of the most stable in the last weeks and months. So we, at the same time, remain cautious, and be ready to take any good opportunity that could come on the market.

Okay. Thank you very much.

(Operator Instructions). And as there are no further questions, I return the call to you, Pascal.

Okay. So, thank you very much for listening and attending the call and I wish you a good month of August. Thank you. Bye-bye.

Thank you, everyone. Bye.

Thank you, ladies and gentlemen, that concludes your conference call. You may now disconnect.