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CAR Inc.2018 Annual Results Earnings Call
March 12, 20198:00 pm Beijing Time
Agenda
Tony CAOChief Financial Officer
1
Business Overview
FinancialResults
Overview
Yifan SONGExecutive Director & Chief Executive Officer
Business Overview
Yifan SongExecutive Director & Chief Executive Officer
2018 Achievements
3
Adjusted net profit increased by 11% YOY; Margin increased to 13%
Adjusted EBITDA increased by 9% YOY; Margin increased to 61%
Solid and sustainable profitability
Integrated mobility platform
World leading car rental APP
Local and international car rental, car sharing, fleet rental and ride-hailing
Special packages for one way rental, weekday, weekly and monthly rental
Self serve, delivery and pickup
Free GPS with flags: gas station, parking lots, etc.
Entrance to various services
Comprehensive functionalities
One-stop mobility solution for various needs
4
Car rental Car sharing
Global rental Ride-hailing
DeliveryPickup
UCARHertz
Self serve
World leading car rental APP
5
Transparency InteractionGPS Sharing
Continuous service network upgrade
6
Full service / Self-serve store
24hrs self-serve pick up point
24hrs full service store
Dynamic service point
Technology-driven operational excellence and customer experience
7
Self-serve reservations in December, increased from 43% in September
62%
91%
91% Car rental fleet enabled for self-serve service as at the end of 2018
Reservations through mobile APP in Q4
8
Improved operating efficiency
2017 2018
Number of staff Number of total vehicles
135,191
102,500
6,9106,303
Vehicles per staff 16
20
Steadily expanding customer base
9
• 35% YoY average daily car rental fleet in 2018
• Self-operated repair and maintenance facilities coverage expanded to 46 cities, covering 90%+ fleet as at end of December
2017 2018
2017 2018
+28% YoY Customers
+24% YoY Members
2019 Strategies
10
Expand geographical network
Enhance intelligent services, e.g. Smart Assistant, self serve functions
Further upgrade mobile APP with advance features
Service Excellence
Used car disposal
Debt Refinancing
Recover disposal volume
Diversify disposal channel
Seek disposal alternatives e.g. buy back program
Reduce size of bullet repayment
Optimize repayment schedule
Financial Results Overview
Tony Cao Chief Financial Officer
12
4Q’2018 Highlights
4Q'17 4Q'18 4Q'17 4Q'18
4Q'17 4Q'184Q'17 4Q'18
(RMB in millions,except for total operating fleet)
+9% YoY Rental Revenue
1,317125,311
+35% YoY Total Operating Fleet
+15% YoY Adjusted EBITDA
+53% YoY Adjusted Net Profit
785
113
Notes:(1) Margins are as percentage of rental revenue(2) Reconciliation of adjusted EBITDA and adjusted net profit can be found in CAR Inc.’s 2018 annual results announcement
Higher return per share
13
0.272
2017 2018
(RMB)
+17% YoYAdjusted EPS
Note:Reconciliation of adjusted EPS can be found in CAR Inc.’s 2018 annual results announcement
0.318
Notes:(1) Margins are as percentage of rental revenue(2) Reconciliation of adjusted EBITDA margin and adjusted net profit margin can be found in CAR Inc.’s 2018 annual results announcement
14
Recovering profitability profile
12%13%
2017 2018
59% 61%
2017 2018
Adj. EBITDA margin Adj. net profit margin
15
Increasing concentration on core car rental business
Fleet rental &other revenues
Car rental revenue
(RMB in millions) +27pp YoY Car rental concentration
2016 2017 2018
43%
57%
75%
25%16%
84%
5,340
16
Sustainable cost structure
10% 10%
2017 2018
12% 13%
2017 2018
27% 28%
2017 2018
34%32%
2017 2018
SG&A
Finance cost Depreciation
Direct operating expenses
Notes:(1) Margins are as percentage of rental revenue(2) Finance cost includes interest income from bank deposit
Cost of sales of used vehicles as % of sales of used vehicles
Used car disposal
Depreciation as % of rental revenue
23.4%
2014
95.1%
21.4%
2015
101.1%
25.1%
2016
103.0%
27.2%
2017
101.1%
100%
• Cost to sales ratio at 103.9%, as a result of a higher mix of special vehicles
• Depreciation % increased by 0.8 pp YoY, due to lower RevPAC
• Used car sales decreased significantly to ~13,000 for more fleet availability for car sharing services
17
28.0%
2018
103.9%
Financial positions
18
30 Sep. 2018 31 Dec. 2018
1
2
3
12.7B
3.9X
2.8X
13.4B
2.9X
4.3XDebt to adjusted EBITDA
Total Debt
Net debt to adjusted EBITDA
(RMB)
Note:Reconciliation of adjusted EBITDA can be found in CAR Inc.’s 2018 annual results announcement
Q & A