CAR Inc.Company Presentation
Mar 14th 2017
By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations:
The information that follows is a presentation of certain information of CAR Inc. (the “Company”) prepared by the Company as of Mar 2017.
The information contained herein (including, among others, the market data, industry data and other industry statistics included in this presentation derived from public or third party sources) has notbeen independently verified and thus no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of theinformation, or opinions contained herein. Neither the Company nor any of its respective directors, officers, employees, advisors, affiliates or agents shall have any responsibility or liabilitywhatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. In addition, noperson is authorized to give any information or to make any representation not contained in and not consistent with this material and, if given or made, such information or representation must notbe relied upon as having been authorized by or on behalf of the Company.
In this presentation, we refer to EBITDA, Adjusted EBITDA and other measures which are not standard financial measures under IFRS. Such measures may not be comparable to similarly titledmeasures presented by other companies. See the relevant footnotes contained in this presentation for the definition and calculation of such financial measures.
This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect theinformation contained in this presentation, which neither the Company nor its advisors or representatives are under an obligation to update, revise or affirm, and past performance is not indicative offuture results.
The information communicated in this presentation contains certain statements that are or may be forward looking. These statements typically contain words such as "will", "expects" and"anticipates" and words of similar import. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in thefuture. Any investment in securities issued by the Company will also involve certain risks. There may be additional material risks that are currently not considered to be material or of which theCompany and its advisors or representatives are unaware. Against the background of these uncertainties, readers should not rely on these forward-looking statements. The Company assumes noresponsibility to update forward-looking statements or to adapt them to future events or developments.
This presentation and the information contained herein do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for anysecurities of the Company. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered,sold or delivered within the United States or to U.S. persons absent from registration under or an applicable exemption from the registration requirements of the United States securities laws. Nosecurities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United Stateswill be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offering ofsecurities is to be made by the Company in the United States.
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Disclaimer
1
2
Our vision: China’s leading auto mobility provider
Infant stage with huge growth potential
Life-style driven, not only travel demand
Dominant leader = High margin
Significant entry barriers
MarketDemand
Competition Landscape
O2O and mobile
Asset-light network strategy
Strategic collaboration with UCARInnovations
We are more than a car rental company
I. Industry Overview
4
World’s fastest growing region for car rental
Source: Roland BergerNotes:(1) Defined as the number of rental vehicles as a percentage of the total number of registered passenger vehicles in 2012(2) Represents growth in the short-term self-drive car rental market size, based on rental revenues CAGR’s on local currency basis
2.5%
1.6%
1.4%
1.3%
0.4%
2%
2%
6%
13%
27%
2013-2018E CAGR (2)
Car rental sales growthPenetration rate of car rental(1)
5
Key growth drivers
PRC regulatory reforms Typical rental market evolution Licensed drivers without cars
217M
327M
84M
135M
2013 2015
Gap: 133M
Short-term car rentalmarket size (2013)
~$0.9 bn
~$24.0 bn
>4,000,000government-owned cars
No. of driver’s license holders
No. of passenger vehicles
Gap: 192M
1 2 3
Business travel
Leisure travel
Replacement car
Limit number and models of cars that may be purchased by government agencies and encourage car rental
Official guidance (July 2014) stipulates that no further government-owned cars will be provided for use in regular government affairs or to officials below a certain rank
Source: Roland Berger
6
Significant entry barriers
Challenging for new entrants to acquire new licenses
Vehicle purchasingrestrictions
Scale, network and brand
Difficult, costly and time-consuming to replicate
Difficult access to debt financing
Requires “deep pockets”
II. Investment Highlights
8
Investment highlights
Clear and sustainable market leadership
Most trusted brand supported by superior customer experience
Industry-leading proprietary technology platform
Diversified and stable business
Experienced management team and strong partners
Strong and sustainable profitability profile
1
2
3
4
6
5
Source: Public filings
9
Clear market leader1
684
~3.5xLarger
~2.0xLarger
96,734#1 #1
Vehicles(9M’16)
RMB in millions(9M’16)
#2 #248,934
2,380
~3.2xLarger
Fleet size Rental revenue Adj. EBITDA
RMB in millions(9M’16)
#1
#2 1,217
3,837
10
Consistently extending leading position1
31.2%
8.2%
1.9% 1.9% 1.2%
19.8%
7.7%
2.7% <1.5% 1.5%
eHi Topone Reocar Avis
2013 2011 % Change
+11.4%
+0.5%
-0.8%+0.4%
-0.3%
Market share (by revenue) of top 5 short-term self-drive car rental companies in China
Source: Roland Berger
Note:(1) As of Jun. 30, 2014
11
Our clear market leadership providesunique competitive advantages
1
Costadvantages
1
License advantages
2
Funding advantages
3
Secured licenses to accommodate future growth
~13,000 in Beijing(1)
~8,000 in Guangzhou(1)
Access to diversified debt funding channels including credit facilities
Bank, OEM financing, capital leasing
Access to global capital markets
Procurement
One of the largest passenger vehicle purchasers in China
Operational leverage
Economy of scale
Reinforces our …
market leadershipprovides…
cost advantagesand creates…
barriers to entry
12
Most recognized and trusted brand with superiorcustomer experience
2
3.5
15.4
2011 2016
(‘000)
Growth in institutional customers
~4.4xincrease
447
4,000
2011 2016
(‘000)
Growth in individual customers
~8.9xincrease
57%
69%
2011 2016
% repeat customers transactions (1)
Increasing customer engagement
+12ppincrease
Best-in-class customer service
Extensive nationwide
network
Broadest vehicle
selection
Excellent vehicle
conditions
Hassle-free rental process
Note:(1) The transactions by our repeat customers as a percentage of the total number of our short-term rental transactions. Repeat customers include any customer that has completed more
than one transaction with us within any period of time
13
Extensive nationwide coverage with deep urban penetration
2
Beijing
Guangzhou
Shanghai
Shenzhen
Deep urban penetration
Service locations cover major transportation hubs, business districts, residential communities and tourist destinations
Nationwide coverage
Directly operated93 major cities795 service locations (304 stores and 491 pick-up points)
Franchise operated189 small cities239 service locations
1
2
3
6
7
9
10
4
8
Note: Network statistics as of Dec. 31, 2016
14
Industry-leading proprietary technology platform3
Customer interface Comprehensive management systems
Fleet Management
Repair and insurance
Used car sales
Yield Management
Supply / demand
Dynamic pricing
Fleet deployment
Financial Management
Budgeting
Business analytics
Customer Management
CRM
Promotional activities
Transaction Management
Reservation, vehicle pick-up / return, payment
Risk control
Effective Reliable Scalable
Call center
PCMobile
Store
Big data
Business intelligence
15
Dynamic pricing to maximize yield and competitiveness
Note:(1) Recent same day examples
3
Market demand
Inventory level
Rental term
Location
Timing of booking
Competitor rates
Target margin
DynamicPricing
Data analysis
Pricing flexibility of the same car model in different stores (1)
¥415/ 日
均
¥280/ 日
均
Beijing Guomao Shanghai Jinjiang Action Park Xining Caojiabao Airport
¥69/ 日均
16
Diversified and stable business
Note:(1) Based on weekday versus weekend rental transactions, on the assumption that weekday rental transactions are for business purposes and weekend rental transactions are for leisure
purposes
4
24%
32%11%
5%
14%
14%
71%
12%
8%9%
70%
30%
Short-term rentals
Long-term rentals, leasing & others
~38%
~62%
Beijing, Shanghai, Guangzhou,Shenzhen
Other cities
~56% ~44%
Top 10 cities
Others
52% 48%
Business
Leisure
Buick
Toyota
% 2016 rental revenue
Products Customers
% 2016 ST rental transactions
Network Suppliers
% 2016 rental revenue % 2016 total fleet
VW
Kia
Others
~23%
~77%
On-airport business
Off-airport business
~79%
~21%
Top 10 models
Others
% 2016 ST rental transactions
(1)
(1)
% 2016 rental revenue % 2016 total fleet% 2016 rental revenue
Chevrolet
StoreMobile
PC
Call Center
17
Strong and sustainable profitability profile
Source: Roland Berger (market share by revenues in 2013), Euromonitor, public filings of peers (Brazil market share by revenues in 2014), Auto Rental NewsNote:(1) EBITDA margins based on percentage of rental revenues for all, except for the #2 player. CAR: Adjusted EBITDA as disclosed. #2 player: adjusted EBITDA as disclosed. Hertz: EBITDA as
disclosed (unadjusted due to limited public information available). Avis: corporate EBITDA for car rental business adjusted for vehicle depreciation and interest. Localiza: car and fleet rental EBITDA as disclosed
5
Market position comparison
EBITDA margin among peers(1)
Dominated by LocalizaDominated by CAR
CAR31%
eHi8%
Topone2%
Other59%
Market shared by 3 large players
Enterprise48%
Hertz26%
Avis18%
Others8%
61%
44% 42%36%
2016 9M'16 FY2016 FY2016 FY2016
Localiza Hertz Avis#2
Localiza47%
Unidas8%
Hertz7%
Other38%
34%
Source: Public filings of Hertz, Avis, Localiza and the #2 player. Peers data based on the year ended December 31, 2016 except the #2 player based on the year ended December 31,2015.Notes: Where applicable, CAR’s expense figures have been adjusted for share-based compensation, reorganization related expenses as well as costs related to suspended fleet(1) Representing expenses as a percentage of rental revenue, excluding sales of used vehicles; but in the case of the #2 player, including car services revenue(2) Due to limited disclosures available, depreciation and amortization expenses have been used as a proxy to estimate vehicle-related depreciation(3) Due to limited disclosures available, direct operating expenses are estimated by taking vehicle operating expenses less depreciation and amortization expenses (as a proxy for vehicle-related depreciation)(4) No breakdown for rental business available for expense. Figure estimated based on total expense multiplied by rental business revenues % of total revenues(5) CAR: net interest expenses for the corporate level; #2 player: net interest expenses for the corporate level; Hertz: net interest expenses for the corporate level; Avis: net interest expenses of corporate debt and net vehicle interest expensesexcluding net impact of early extinguishment of debt); Localiza: net interest expenses for the corporate level(6) The metrics exclude costs related to B2C pilot program in 2016
18
Economies of scale + operational leverage5
17%15%
11% 12% 12%9% 7% 6% 6%
2012 2013 2014 2015 2016
% of rental revenue (1)
20% 18%12% 12% 11%
17%10% 13% 14%
2012 2013 2014 2015 2016
Depreciation of rental vehicles
expenses
SG&A costs
Finance costs (5)
(4) (4)
34% 34% 34% 31% 33%
46%
60%51%
43%
2012 2013 2014 2015 2016
Direct operating expenses
(4)
LocalizaHertz Avis#2China Global
(4)
(3)
34%27% 23% 21% 25%
33%26% 24%
10%
2012 2013 2014 2015 2016
(2)
(6)
(6)
19
Experienced management team and strong partners
years of relevant industry experience
6
Investment of Fund XI, established in 2012
International resources
Capital markets know-how
Current shareholding 11.2% (1)
Charles Lu Chairman
23+ years of entrepreneurial experience: 15+ years in technology, 10+ years in automobile and consumer services related sectors
Sen
ior
lead
ers
hip
Ming LinVP of rental operations
Former VP at Legend Capital
20+ years Yandong ZengVP of fleet management
18+ years
Wilson Li COO, CFO
Former CFO of GE Healthcare GSC Asia
16+ years Yaxiao LiuChief Information Officer
Former CTO of IBM Greater China
16+ years
Par
tne
rs
Parent company of, among others, Lenovo, Digital China, Legend Capital, and Raycom Real Estate
Strong continuous support on bank guarantees and government relationships
Current shareholding 24.1% (1)
Founded in late 2014, a leader in mid-to-high-end on-demand chauffeured service in China
Listed on NEEQ in July 2016, market cap over RMB40 B
Current shareholding 29.4% (1)
Notes: (1) as of Dec. 31, 2016
23+ yearsYifan SongCEO
17+ years
Founding member, executive vice-president since 2013, in charge of general management of processes and standardization
Former sales head at Tetrapak China, manufacturing engineer at Ford Motor (China)
III. 2016 Annual Financial Highlights
4Q’16 Milestones … further enhanced self-drive growth momentum, sustainable profits, strong cash generation
21
Record 4.8pp Utilization Rate improvement … 65% achieved
57%+ adj. EBITDA margin … continue deliver sustainable high margins
Record 45% YoY volume growth in self-drive rental for the past 3 years
28% YoY revenue growth in self-drive, continue 3Q strong momentum
Used car disposal of 6,936 vehicles with solid residuals, 51% through B2C
Record RMB 620MM free cash flow, Net debt/EBITDA reduced to 1.9 times
$$
22
2016 Highlights
Notes:(1) Adjusted EBITDA, adjusted net profit, and margins exclude the costs relating to the used car B2C pilot program. Adjusted EBITDA is defined as profit or loss before income taxes, net finance income/costs, depreciation, amortization and
impairment, excluding share-based compensation, fair value gain/loss, and foreign exchange gain/loss; adjusted net profit is defined as profit or loss excluding share-based compensation, fair value gain/loss and foreign exchange gain/loss.Margins are calculated as percentage of rental revenue.
Growth
ST rental
RMB167RevPAC
65.1%Fleet utilization
Profitability
Financial positions RMB1,795 MM
Free cash flow
16%Adj. net margin
(1)
(1)
(1)
61%Adj. EBITDA margin
1.9xNet debt/adj. EBITDA
14% YoYRental revenue
19% YoY Self-drive revenue
Reset growth momentum in self-drive car rentals
23
Upgraded customer experience
Pioneered free door-to-door delivery nationwide
New vehicle introductions, fleet age down to 16 mths
Revenue
19%
Being more aggressive in competitive pricing
More advanced dynamic pricing & promotions
Innovative digital marketing & channel partnership
Refined management & operations
Successful growth lever via new KPIs and incentives
Increased executions and operational excellence
Customer Base
30%
Members
55%
2017 Themes: Stronger growth leveraging customer experience upgrade & smart pricing strategy
Drive sustainable growth & profitability in self-driveClear pricing leverage + significant upside in utilization
24
Performance levers
Clear pricing leverage to drive higher growth1
2016 … proven growth lever via improved pricing strategy
More aggressive competitive pricing strategy in 2H, through smarter dynamic pricing & promotions
Significant leverage for growth: 40%+ volume growth in 2H vs. <20% in 1H, driven by ~5pp more ADRR reduction
2017 … extensive focus on volume growth using more advanced pricing levers as necessary
Significant upside in Utilization Rate2
2016 … Utilization rate guidance achieved (65% FY16), still with deliberate balance to secure license plates
Significant YOY improvement of Utilization Rate in 2H, mainly driven by efficient fleet disposals … 4.8pp+ for 4Q
Utilization increase partially offset ADRR impact in RevPac
2017 … time to expedite realization of Utilization upside, target to achieve bigger step-ups toward optimal level
8%
18%
40%45%
1Q'2016 2Q'2016 3Q'2016 4Q'2016
Volume(Rental days – Self-drive)
0.5pp 0.0pp2.3pp
4.8pp
1Q'2016 2Q'2016 3Q'2016 4Q'2016
(1)%(4)% (5)%
(10)%
1Q'2016 2Q'2016 3Q'2016 4Q'2016
ADRR
Utilization
Key metrics (YOY)
UCAR collaboration’s benefits and synergies affirmed ... creating strong longer term shareholder values
Regulated under taxi administration, upgrade to taxi, no subsidies Consistent regional implementation … stricter in BJ and SH B2C advantage in customer experience vs. C2C becomes critical
Finalized policy reinforced the proven business model that UCAR initiated
Constant strategic focus on mid-to-high end and B2C model Delivered operating efficiency & customer experience targets Stick to reasonable premium to taxi pricing, operating loss narrows
UCAR ride hailing business displays consistent strategic focus and operational executions
Completed 3+1 rounds of fund raising, listed in NEEQ Expanded footprint into auto e-Commerce and auto financing Plenty of liquidity and cash to invest … credit profile strengthened
UCAR is best positioned along the auto value chain … unique barriers & strong cash positions
Management is committed to display rigorous corporate governance standards to ensure fairness and transparency on connected transactions
Elevated brand recognition & customer sharingUCAR app has 6x followers vs. CAR
Sustainable financial returnsRMB2.0B revenue with robust returns, UCAR lifted its credit profile
Enhanced fleet management & fleet efficiencyFleet relocation during seasonality
Optimized residual management63% disposals in ’16 through unique B2C retail channel under Maimaiche
Strategic value for future prospects in fleet managementBig data, machine learning, etc.
2016 is a milestone year for UCAR …
25
26
Improved capabilities in used car disposal Proven residual risk management
100%
Cost of sales of used vehiclesAs % of sales of used vehicles
2013
105.5%
2014
95.1%
2015
101.1%
50 64 65Avg. selling price (RMB‘000)
2016
103.0%
9,986
15,483
9,284
23,092
2013 2014 2015 2016
# of used vehicles disposed
Used car disposal channels
Used car disposal and residual risks
62
17%
78%
5%
9%
28%
14%
49%
B2B - Franchisees
B2B - Dealers
B2C pilot
B2C - Maimaiche
2016
2015
26.7% 23.4% 21.4%Depreciation %(% of rental revenue)
25.1%
2016: Rigorous review mechanism and best efforts to ensure appropriate residual values close to market prevailing pricing
Proactively adjusted residuals (GM Excel & UCAR fleet), depreciation % increased by ~4pps
63% B2C channels … Cost to sales constant at 95%-105%
2017 Focus:
Further improve Maimaiche channel … better B2C residuals, deepen end-user and dealer reach, expand volumes
New Initiatives: optimize holding period … reduce uncertainties of residuals, improve rental experience
Strong financial positions
27
Optimizing funding capability and credit profiles
Cash(1)
(649) (1,129)
(3,303)
1,795
2013 2014 2015 2016
Free Cash Flow (FCF)
Strong cash generation
(RMB in millions)
Net debt/adj. EBITDA
2,967
1,135
6,344 5,958
3,811 3,611
8,385
11,682
2013 2014 2015 2016
Net debt Total debt
(RMB in millions, unless otherwise noted)
Debt (Gross/Net)
5,7252,0412,476844 3.2x 0.7x 2.3x 1.9x
Net leverage decreased due to strong FCF generations
Gross debt temporarily high due to strict onshore fund outflow controls, 1.2B repayment in 1Q17
FX risk partially hedged in 1Q17: executed USD350MM forward cap with strike rate of ~6.96
Healthy maturity profile: <3% short-term borrowing, 21% debt due in 2017
Generated milestone 1.8B Free Cash Flow in 2017
Consistent strong growth of operating cash flow, positive FCF after ~1.2B to fund fleet expansions
Strong cash position of 5.7B … providing liquidity needs for both onshore and offshore
Executed share buy-back of HKD501MM
Note: (1) includes restricted cash, available-for-sale investments and cash and cash equivalents
IV. Supplementary Financials
2016 2015 YoY
Rental revenue 5,016 4,399 14%
Total revenue 6,454 5,003 29%
Net profit(2)(8) 1,460 1,401 4%
Adj. EBITDA(3)(8) 3,057 2,715 13%
Margin(1) 60.9% 61.7% (0.8)pp
Adj. net profit(4) 821 895 (8)%
Margin(1) 16.4% 20.3% (3.9)pp
Basic EPS (RMB) 0.62 0.59 4%
29
2016 results summary(RMB in millions, unless otherwise noted)
Dec-16 Dec-15 change
Total assets 21,189 16,342 30%
Total debt(5) 11,682 8,385 39%
Cash(6) 5,725 2,041 180%
Free cash flow 1,795 (3,303) n. a.
Total debt(5)(6)/ LTM Adj. EBITDA(7)(8) 3.8x 3.1x 0.7x
Net debt(5)(6)/ LTM Adj. EBITDA(7)(8) 1.9x 2.3x (0.4)x
Notes: (1) As a percentage of rental revenue(2) Includes share-based compensation, unrealized foreign exchange gain/loss on USD-denominated liabilities and fair value gain on investment in redeemable preference shares(3) Adjusted EBITDA is defined as profit before income taxes, net finance income/costs, depreciation, amortization and impairment, excluding share-based compensation, unrealized foreign exchange gain/loss related to USD denominated
liabilities, and fair value gain on investment in redeemable preference shares(4) Adjusted net profit is defined as profit excluding share-based compensation, unrealized foreign exchange gain/loss related to USD denominated liabilities, and fair value gain on investment in redeemable preference shares(5) Includes senior notes of RMB5,436 million as of Dec. 31, 2016 and RMB5,062 million as of Dec. 31, 2015(6) Includes restricted cash of RMB53.1 million and RMB1.3 million and available-for-sale investments of n.a and n.a and Cash and cash equivalents of 1,988 and 5,723, respectively for 2015 and 2016(7) LTM adj. EBITDA is calculated based on the total of the most recent four quarters(8) The metrics exclude costs related to B2C pilot program in 2015 and 2016
33,986 43,836
56,759
67,777 6,241
9,368
22,252
19,499
2,269
5,569
4,157
2,537
5,267
3,497
6,837 3,292
5,259
1,252
1,174 3,344
2013 2014 2015 2016
Short-term rental Long-term rental Leasing and others
Retired andawaiting for sale
Held for sale
96,449
Fleet size
-12%
19%
6%
YoY
35%
158%
54%
1,714
2,296
3,103
3,534 449
466
1,201
1,439
44
104
95
43
2013 2014 2015 2016
Short-term rental Long-term rental Leasing and others
5,016
Rental revenue
2,866
2,208
4,399
(RMB in millions)
YoY
14%
20%
14%
30
Steady business growth
91,179
63,522
53,022
Notes:(1) Average daily short-term rental fleet is calculated by dividing the aggregate days of short-term rental vehicles in operation in a given period by the aggregate days of that period(2) RevPAC refers to average daily rental revenue per short-term rental vehicle, which is calculated by multiplying the average daily rental rate in a given period by the fleet utilization rate in that same period(3) Average daily rental rate is calculated by dividing short-term rental revenue in a given period by the fleet rental days in that period. Fleet rental days are the total rental days for all vehicles in short-term rental fleet in a given period(4) Fleet utilization rate is calculated by dividing the aggregate days that vehicles are rented out for short term rentals by the aggregate days that short-term rental vehicles are in operation 31
Solid short-term rental performance
15%
2016 2015
Avg. daily rental fleet (1)
14%ST rental revenue 3,534 3,103
58,333 50,869
RevPAC(2) 167 170
x
=
x
=
x
Days
ADRR(3) 257 270
+2.1ppUtilization(4) 65.1% 63.0%
(RMB in millions)
-2%
-5%
RevPAC(2)
275 276 271 261 271 265 257 236
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
ADRR(3)
63.7% 64.1% 64.5% 60.1% 64.2% 64.1% 66.8% 64.9%
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Utilization(4)
175 177 175 157 174 170 172 153
1Q'15 2Q'15 3Q'15 4Q'15 1Q‘16 2Q'16 3Q'16 4Q'16
YoY
Notes:(1) As percentage of rental revenue(2) Adjusted EBITDA is defined as profit before income taxes, net finance income/costs, depreciation, amortization and impairment, excluding share-based compensation, foreign exchange gain/loss, IPO-related expenses, fair value gain and costs
relating to the used car B2C pilot program(3) Adjusted net profit is defined as profit excluding share-based compensation, foreign exchange loss related to corporate reorganization, IPO-related expenses, and unrealized foreign exchange loss related to USD denominated liabilities(4) Expenses figures have been adjusted for share-based compensation, reorganization related expenses as well as costs related to suspended fleet. Interest expenses are net of interest income(5) The metrics exclude costs related to B2C pilot program in 4Q’16
32
Sustainable profitability profile
22% 21% 22%16%
22%17% 17%
10%
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q‘16 3Q‘16 4Q‘16
62% 61% 62% 61%65%
61% 60% 57%
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q‘16 3Q‘16 4Q‘16
Cost structure
31% 30% 30% 33%
29%32% 32%
36%
20% 21% 21%
24%
23%
26% 24%
27%
10% 9% 12%
13%
10%
10%10%
11%13% 13%
12%
12%
11%
12%11%
14%
74% 73% 74%
82%
73%
81% 77%
88%
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Major cost items as % of rental revenue(1)(4)(5)
Profit margins
Gross margin(1)(5)
Adj. EBITDA margin(1)(2)(5)
Adj. net profit margin(1)(3)(5)
Interest
SG&A
DOE
Depreciation
50% 49% 50%43% 49%
41% 42%35%
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
33
Net investment in fleet
22,171 21,857
38,353
29,831
9,986
15,483
9,284
23,092
2013 2014 2015 2016
Vehicles purchased
Vehicles disposed
Fleet expansion (1)
Net investment in fleet
(RMB in millions)
1,889
2,729
5,220
2,626
495 654 603
1,438
2013 2014 2015 2016
Vehicle purchasecapex
Used vehicle salesrevenue
Notes:(1) Fleet expansion does not reflect change in finance leasing fleet(2) Among 15,483 used vehicles disposed in 2014, 10,185 vehicles were sold while 5,298 vehicles were disposed to franchisees through finance leasing
(2)
V. Business Strategies
Revolutionary changes in auto related industry
35
互联网技术革命Internet Technology
智能汽车Smart Vehicle
云计算Cloud
Computing
电动车EV
大数据Big Data
机器学习Machine Learning
车联网Connected
Vehicle
汽车技术革命Auto Technology
自动驾驶Autonomous
Driving
消费习惯变化Consumer behaviors change
汽车生态圈重塑Auto ecosystem revolution
On-demand economy
Car ownership Car sharing
Mobility sharing
……
Manufacturing
Distribution
Repair & maintenance
Financing & insurance
……
SHARE
35
36
UCAR becomes the largest shareholder of CAR
CAR Inc.
Premium Auto Rental (China) Limited
(HK)
Shenzhou Used Car (China) Limited
(HK)
CAR Hong Kong(HK)
Haike Leasing (China) Limited
(HK)
Offshore
Onshore
Hertz transferred subsidiaries
Shanghai China Auto Used Car Dealings Co., Ltd.
Beijing China Auto Rental Co., Ltd.
China Auto Rental (Tianjin) Co., Ltd.
Haike Leasing (Beijing) Ltd.
Haike Leasing (Fujian) Ltd.
Haoke Leasing (Shanghai) Ltd.
Haike Leasing (Tianjin) Ltd.
100% 100% 100% 100%
100% 100% 100% 100%
Hertz HoldingsGrand Union Amber Gem
29.4% 24.1% 11.2%
Public
34.9%
神州优车
UCAR
0.4%
Such shareholder consolidation makes shareholding structure clearer and more concentrated
Our Vision: Reshape the auto and consumer ecosystem
37
Customer Oriented
Technology-driven
Business Model
Innovation
Synergies
Financing Platform
Mobility Platform
E-Commerce Platform
Value Chain
38
SuppliersOEMs
Insurance companies
CustomersSelf-driveChauffeuredPurchase
FleetFleet sharing
Used car disposal
NetworkStores & operations
Repair & maintenance
Big dataCustomers
Fleet
BrandingBrand recognition
Extensive synergies between CAR and UCAR
Improve cost structure Upgrade customer experience Create new growth engines
39
Build a smart mobility platform for the future
Smart Vehicles智慧车辆
Connected Vehicles车联网
Smart Fleet智能车队
Smart Drivers智慧司机
Full-time Drivers专职司机
Drive Robot驾驶机器人
Smart Dispatch智慧派单
Controllable Driving可控驾驶
Easy Trip舒适行程
Smart Demand智慧需求
Mobile Internet移动互联网
Smart Scenario智慧场景