The article was written by David Barth – Analyst at I Know First.

Avis Budget Group, Inc

“One of the biggest things in business is to open yourself up for change.” – Jay Z

Summary:

• About Avis Budget Group
• Avis Budget Group Second Quarter Report
• Third quarter has started on a positive note.
• €300 Million Senior Notes Offering
• New innovation “Avis Now”

About Avis Budget Group

Avis Budget Group, Inc (CAR) is one of the leading world wide providers for vehicle rental services. With Budget brands they have more then 11,000 rental locations in approximately 180 different countries and also Zipcar Brand who is the worlds leading car sharing network with over million members. Avis Budget Group operates in North America, Europe and Australia directly, and operates primarily through licensees in other parts of the world. They have approximately 30,000 employees.

History

Avis Budget Group, was founded in 2006 by Henry Silverman and it Headquarters is located in  Parsippany, New Jersey,United States. Not like many other car rentals Avis is parent company of  Avis Car Rental, Budget Car Rental, Budget Truck Rental,Payless Car Rental, Apex Car Rentals, Maggiore Group and Zipcar. In 2008 Avis were the first to deploy RFID transponder in their group of cared using a product for TransCore which would work with almost all electronic tool collection systems in the United States. In March 2013 after Avis Budget Group bought Zipcar for about 500$ million their CEOs switched to Mark Norman. Later on April 9, 2015 before Avis Budget Group announced that they were the fourth largest vehicle rental company in Italy they acquired Maggiore Group.

Avis Budget Group Second Quarter Report

• Avis Budget Group Revenue Increase by approximately $2.2 billion which makes up around 3% of their total revenue in the second quarter.
• Their net income was $36 Million with adjusted EBITDA of $204 million.
• The decrease in earnings per share were $0.38 and adjusted diluted earning per share were $0.63.
• They increased adjusted EBITDA for whole of 2016 estimating $850- 900 million and earning per share to $2.90- 3.30.

Looking over the second quarter results their is a significant improvement in a Avis Budget Group volume growth throughout the world. Avis Budget Group Chief Executive Officer said in “The third quarter has started on a positive note, with pricing in the Americas increasing year-over-year, while our worldwide fleet costs remain within our expectations”. Looking back at time horizon between the first and second quarter there was definitely and increase in revenue and operation income. On the chart below we can see that Avis Budget Group was of to a slow start in the beginning of 2016 but are improving, and started the third quarter on a good note.

Avis main competitors

The competition for the industry in car rental is generally characterized by the intense price and service competition among global, local and regional competitors. Most customers are interested in the pricing, customer service quality, easy booking system, reliability, and rental and return locations. Today there is a big increase by smart customers meaning they check online and compare which of the car rentals are the cheapest and yet gives satisfies all their needs. This causes a further increased the intensity of price competition in the industry. According to Top Ten Reviews, Budget which is a part of Avis Budget Group made it 6ed in the worlds top car rental performance and Avis came in on the 8th spot. They were check in 4 categories Service, Types of Rental, Ease to use, Help and Support.

€300 Million Senior Notes Offering

On September 26, 2016 Avis Budget Group, Inc announced that its fully owned Avis Budget Finance plc has done an offering for €300 million aggregate principal amount of 4.125% senior notes due 2024 in a private offering. The company wants to use net profit to reclaim a portion of its outstanding euro-denominated 6% euro-denominated senior notes by 2021. Newly-issued notes guaranteed by Avis Budget Group, Inc to be senior unsecured basis and certain of its U.S subsidiaries and were issued at par. David B. Wyshner, Avis Budget Group President and CFO said: “The high level of investor interest in this offering and its favorable terms underscore our strong and consistent access to the capital markets to finance and grow our business,”.

Avis Budget Group New innovation

We all can relate to how much effort and time is wasted by going to a rental car company and getting the car you like. Avis came up with an idea of how to make this experience more joy full for their costumers and with that increase their customer satisfaction and client base. “Avis Now” allows their clients to find the car by swiping up and down till they find what they want. They also have the ability to read through the leasing contact, check which cars are available in real time; exchange or upgrade the vehicle assigned to them; change colors or car versions and thus, select the car of their choice. Further, they can lock/unlock the car doors; confirm/cancel/extend booking; flash headlights to locate the car and also return easily, by using this incredible feature. By singing the contract online they save time not having to go to the office. This app will help their clients to stay satisfied with their choice of car rental and it will help Avis Budget Group to stay ahead of the race in their industry.

I Know First Past Success With CAR: 

I Know First has been bullish on CAR in past forecasts. In this 1-month forecast from June 26th, 2016, AVIS (CAR) had risen almost 19% as described below.

This forecast was sent to current I Know First subscribers on June 26th, 2016. To subscribe and learn more about the state of the art algorithm, click here.