Hertz Global Holdings, Inc. Lays Out 3-5 Year Business Plan During Discussions With Investors And Financial Analysts

Hertz Global Holdings, Inc. provides 2016 preliminary guidance, post separation of its equipment rental business, at 2015 Investor Day

Plans 2016 rollout of distinct positions for each of its rental car brands

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Hertz Global Holdings, Inc.

Nov 17, 2015, 03:55 ET

ESTERO, Fla., Nov. 17, 2015 /PRNewswire/ -- Hertz Global Holdings, Inc. (NYSE: HTZ) ("HGH" or the "company") today laid out plans for the company, excluding its equipment rental business ("Hertz Global"), at its Investor Day discussion to achieve Hertz Global's full potential as the world's leading car rental company. The company expects Hertz Global's Adjusted Corporate EBITDA (earnings before interest, taxes, depreciation and amortization) margins to be between 16 to 18 percent within a three- to five-year timeframe. During a discussion with more than 200 investors and financial analysts in New York, the company's senior management team detailed plans for investments and initiatives for its core car rental business that will support three pillars: winning with technology, leading in cost and quality, and earning customer preference while delivering revenue growth.

President and Chief Executive Officer John Tague said the 16 to 18 percent Adjusted Corporate EBITDA margin target for Hertz Global is indicative of its opportunity for financial margin expansion during the course of its full potential plan. In 2015, management expects Hertz Global to reach an Adjusted Corporate EBITDA margin of approximately 10 percent, an improvement over its 2014 Adjusted Corporate EBITDA margin of 7 percent.

"2015 has been a transition year for the company," Tague said. "Through our work to date, we are building a track record of enhanced execution. This, together with our 2016 preliminary guidance, is beginning to show in our results and, we believe, will enable us to realize the full potential of our business for our customers, our employees and our investors."

In July 2015, the company completed its financial restatement and is making ongoing remediation to ensure continued compliance. In addition, the company completed the systems integration of Dollar and Thrifty in the third quarter 2015, and completed hiring of a senior management team for its equipment rental business ("HERC") with public company capabilities in preparation for the separation of HERC to a stand-alone business as early as mid-2016. Earlier this month, the company completed its move into a consolidated corporate headquarters in Estero, Florida.

PRELIMINARY GUIDANCE FOR 2016

During the investor discussion, management provided preliminary guidance for 2016, which includes:



	Preliminary 2016 Guidance
Adjusted Corporate EBITDA¹Consolidated HGH, $M	1,700	to	1,800
Adjusted Corporate EBITDA¹HERC, $M	625	to	675
Adjusted Corporate EBITDA¹Consolidated Hertz Global, $M	1,075	to	1,125
US RAC depreciation per unit per month, $	290	to	300
US RAC rentable fleet capacity growth, %	(0.5%)	to	0.5%
Net consolidated non-fleet capex, $M	250	to	275
US Car rental revenue growth	2.5%	to	3.5%

FULL POTENTIAL PLAN DETAILS FOR HERTZ GLOBAL

Starting in 2016 and continuing through 2018, Hertz Global is targeting $100 million in annual investments to develop new technology platforms and systems, improve customer experience and strengthen the company's four car rental brands.
Technology investments will create a touchless, personalized customer experience from booking to return. All technology investment will be based on a "mobile first" approach. IT development began in the third quarter 2015 and will occur over the next 36 months in three phases: customer interface and payments; fleet, counter and personalization; and rates and reservations.
The company announced that, in addition to delivering on its previously stated $300 million cost reduction goal by the end of 2016 for Hertz Global, it expects to achieve an additional $250 million of cost savings in 2016. These will be achieved by increasing fleet efficiency and reducing fleet cycle time, improving efficiency through process and automation, and applying more sophisticated staffing modeling in operations.
Investments in customer experience through operational excellence are built around five key drivers of customer satisfaction – clean and safe vehicles, speed of service, courteous and friendly employees, ease of service and effective service recovery.
The company is investing in each of its car rental product brands: Hertz, Dollar, Thrifty and Firefly. In 2016, the company expects to roll out new positions for each of its brands.
The company expects U.S. car rental revenues to grow between 2.5 to 3.5 percent, while it expects the U.S. rental car industry to grow at a rate of approximately 2.7 percent. In addition to growing ancillary revenue through customer options, Hertz Global will strengthen its core revenue through a better revenue management model and a reshaping of its go-to-market approach.

HERTZ GLOBAL HOLDINGS, INC. INVESTOR DAY PRESENTATION AVAILABLE FOR VIEWING

Investor day slides are available here: http://ir.hertz.com/events-presentations

ABOUT HERTZ GLOBAL Holdings, Inc.

Hertz Global Holdings, Inc. operates the Hertz, Dollar, Thrifty and Firefly car rental brands in more than 10,000 corporate and licensee locations throughout approximately 150 countries in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand. Hertz Global Holdings, Inc. is one of the largest worldwide airport general use car rental companies with more than 1,600 airport locations in the U.S. and more than 1,400 airport locations internationally. Product and service initiatives such as Hertz Gold Plus Rewards, NeverLost®, Carfirmations, Mobile Wi-Fi and unique vehicles offered through the Adrenaline, Dream, Green and Prestige Collections set Hertz Global Holdings, Inc. apart from the competition. Additionally, Hertz Global Holdings, Inc. owns the vehicle leasing and fleet management leader Donlen Corporation, operates the Hertz 24/7 hourly car rental business in international markets and sells vehicles through its Rent2Buy program. The Company also owns Hertz Equipment Rental Corporation ("HERC"), one of the largest equipment rental businesses with more than 350 locations worldwide offering a diverse line of equipment and tools for rent and sale. HERC primarily serves the construction, industrial, oil, gas, entertainment and government sectors. For more information about Hertz Global Holdings, Inc., visit: www.hertz.com.

1 Adjusted Corporate EBITDA	Net income before net interest expense, income taxes, depreciation (which includes revenue earning equipment lease charges) and amortization as adjusted for car rental fleet interest, car rental fleet depreciation, car rental debt-related charges, and for certain other charges such as non-cash stock-based employee compensation restructuring and restructuring related costs; equipment rental spin-off costs; impairments and asset write-downs; acquisition costs, integration costs, relocation costs and other extraordinary, unusual or non-recurring items.

Adjusted Corporate EBITDA Margin	The ratio of Adjusted Corporate EBITDA to total revenues.

Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin are non-GAAP measures within the meaning of Regulation G. In conformity with Regulation G, information for Hertz Global Holdings on a segment basis required to accompany the disclosures of non-GAAP financial measure, including a reconciliation of the non-GAAP measures discussed in this press release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States, appears within the supplemental schedules that have been filed with the Securities and Exchange Commission and are available on the Company's website at http://ir.hertz.com/events-presentations.

Because of the forward-looking nature of the Hertz Global Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin forecast, specific quantifications of the amounts that would be required to reconcile a pre-tax income forecast are not available. The Company believes that there is a degree of volatility with respect to certain of the GAAP measures, primarily related to fair value accounting for financial assets (which includes derivative financial instruments), income tax reporting and certain adjustments made to arrive at the relevant non-GAAP measures, which preclude from providing accurate forecast of GAAP to non-GAAP reconciliations. Based on the above, the Company believes that providing estimates of the amounts that would be required to reconcile the range of the non-GAAP Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin for Hertz Global would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.

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SOURCE Hertz Global Holdings, Inc.