Hertz Global (HTZ) 25 Feb 202019 Q4 Earnings call transcript

Welcome to Hertz Global Holdings Fourth Quarter and Full Year 2019 Earnings Call. Currently, all lines are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. I would like to remind you that today's call is being recorded by the company.

I would now like to turn the call over to our host Leslie Hunziker. ahead. go Please

our By and everyone. to should our accessed have our Good financial now information. release on be can associated call slides We've press conference morning that you website. also accompany provided

I this contain on statements call remind want forward-looking you to certain made that information.

and nature, this of may are Any differ not their forward-looking performance company call inherent as to the information and of statements subject obligation date changed uncertainties. the on speaks no materially. this only to Forward-looking information by circumstances. relayed to guarantees are undertakes Actual results update reflect

Additional this information factors press and is will the from filing filed. XXXX on in risk release section statements our when of our be Hertz available concerning earnings these and website. statements forward-looking Form SEC the of and the copy in XX-K contained A

that all Today which website. press which we'll is of posted in metrics. is these are non-GAAP reconciled believe profitability financial certain our our non-GAAP GAAP numbers better demonstrated release our use on using and performance measures with We

call Global Holdings. the for company. Results Hertz are Holdings Hertz same Hertz today Corporation focuses publicly-traded the Global materially Inc., the Our on as

our the Financial we On morning, Kathy and have Chief this Jackson, Jamere Hertz's Officer. Marinello, call CEO;

Kathy. Now, I'll over turn the call to

do. tall portfolio morning revenue embarked mobile Three and to to values to earnings a culture to and and shared lot It sustainable we one market opportunities transition you, journey Leslie a Thank transform and of good we growth. order technologies on a a of cloud-based on a long-term to create everyone. based deliver had was work all leader critical years ago reestablish as our Hertz

systems people, a our brands, our while commitment productivity service excellence. invested fleet, As to you and we've customer in and making know unified our our

we right As have we in that and working. XXXX, was strategies they're place the clear it exited

XX% EBITDA consecutive of our increased quarter, growth. Worldwide fourth the delivered consecutive corporate quarter topline adjusted helped we the period drive over latest earnings our three-month and year-over-year year ninth XXXX. quarter and tenth higher XX% EBITDA of in In improvement full

more on turns based also our growth by effective leverage We market reduced and than strategies. capital three earnings

been has way. success validated along Our all the

our we year the the for Women; Most for one year Award Rental by for Choice Car Recommended we're Excellence; for Women's the for Award eighth Service Brand ranked last Just Power won number J.D. FlyerTalk best-in-class straight sense focused improving Most cultures Ethical named communities, World's workforces the capable empowered program loyalty a and and and were of Companies ethics XXXX for building and strong fostering purpose. among corporate on

But all. that's not

cited is our as by Our best-in-class customers. preferred fleet

is price Thrifty Hertz, awareness as the delivered and climbing Dollar, all in higher U.S. brand XXXX. Our and in volume

Our management digital systems our and examples direct of channels technologies. relationship customer management revenue leading-edge and are today growing are

total year rental over than X% outpaced contributions both consolidated growth For incremental from volume U.S. XXXX, growth significantly economic by adjustments revenue FX XXXX. revenue and strong increased X% more excluding a pricing. the full Donlen as cars' of and result

When artificial to it effective data converge demand systems pricing, as more our and every quarter scientists forecasting seamlessly. oversight our management and intelligence revenue get insight comes

and sales a up all help of higher. up and year-over-year were teams In RPD X% marketing quarter when pricing Our revenue for comes fourth leading XXXX. model was year. X% stack, RPD of it management the with of U.S. X% the is On U.S. discipline to the last two-year

line SG&A and paying opportunistic work is hard result expansion expenses U.S. of a as selling, global our year fleet The sales consolidated market as the and XXXX a we better that buying percent reduced sales last to improved our addition high-return channel. the revenue off. retail is residuals, of In strategies, growth, domestic and DOE car of stronger depreciation bottom

improved X%. we're Today, to basis looking XXXX margin forward. EBITDA XXX adjusted in consolidated Total points

opportunities and is Our on plan core adjacent market capabilities. focused and our innovation, strategic enhancing leveraging

to segmentation update time, to enhancing elevating continuing support brand we're expanding business, business utilizing in data, service priorities the long-term effectively At systems modern same management connectivity core and and our XXXX. operational revenue cloud-based the core the to excellence efficiencies. vehicle For be for revenue will

had last macro On international across economy And eurozone our we've challenges. and geopolitical rental micro demands front, with impeding management market relatively and was Against the year our brand largest initiatives. travel we fragmented so service The heightens the some and the some regions. issues to car essential. enhancements through backdrop, opportunities improve the and is product experience competitive differentiation environment, customer that marketing have revenue flat

third in live already benefits captured our with platform and fourth management Europe quarter, went the we In quarter. the in early some AI for revenue

core our a initiative side, cost strategy. the global XXXX is productivity our On international priority of

we Angela years leadership, that where International of has named growth exhibiting successful Hotels franchise executive of most continued brings all division. she to as the its our are recently shaping region, XX of which recently of InterContinental multi-brand record strategy, with Hertz's as Angela Brav developing European experience turnaround CEO Finally, proven Group, track President success. of thought portfolios and business. Angela of a capabilities, central innovative demonstrating led

continue our a opportunity core for three make markets. adjacent In expanding. leveraging ways P&C, impact for delivery in U.S., the to with and overall evolving TNC and competencies, new The We're to areas is developed applying growth. and rentals business the rapidly continued connect to In succeed sales customer expertise marketplace. we experience to foundational addition car global find an in are segments in

savings. services Telematics driving corporate management our maintenance service vehicles, for maintenance and TNC business cost Donlen connectivity and fleet Our provides efficiencies -- and

item rapidly Telematics Donlen's For big-box or transport Walmart like their last-mile across delivery delivery our also with and fleet. providers. to rentals, convenient large a offer to growing truck retailers delivery with pilot needing We're rentals installed analytics are service we're to purchases. in van customers

slots focus also and website online expectation. sales sales new the our option and online on delivery channel. markets expect to year nationwide We're is documentation demand car In outpaced where car in trade consumer products. our expanding used sales, enable optimizing car our appraisals, our has We'll be we ancillary open this digital retail to

attention better and customers and evolving our concepts customers reach the how constantly service new of needs markets. Hertz, new existing paying to At technology serve products, testing we and to discover we're can

and Our strategy management our throughput rooted in delivery lease evolve fleet sustain accelerate and direct for rental and in operational to like brands provide P&C structure products further improvement to optimizing while, expertise is off-airport growth. our by deep the vehicle to initiatives experiences ongoing and cost outstanding increased efficiencies. All layer rentals, leverage value customer continue channels our digital our in insights, XXXX drive connectivity, we'll through of

unwavering strength, it growth yet keep enter XXXX, innovations new we and incredible so and an As commitment with plan, partners the to who possibilities. focused, our from and a open people position accelerators of driving agile us to we and do new the

long-term Our work and in another for sustainable And consistently our it of we've improving will we ability be new employees' grateful to year. journey. growth. begin our confidence stepping operating deliver in XXXX, commitment a done proud stone as the in positive performance reinforces I'm that

With that, I'll you Jamere? high-level quarter Jamere some of financial provide turn take the drivers and it to the to through details for over fourth this year.

producing brands and Once EBITDA. our corporate in Overall solid in quarter, out XXXX. in improvement and investments U.S. you, quarter and revenue in Thank of the the improvement across again we returns. and saw everyone. we the we Kathy to good finish had strength all double-digit initiatives revenue a TNC year-over-year In a delivery strong fourth adjusted our saw solid are morning, rental

across significant drive revenue, the and to and providing profitability continue by as results. direct grow We strong EBITDA SG&A leverage business as slower expenses measured adjusted productivity operating operating than improved our

growth marketing service, expanded intense of to brand-building drive offerings, and our combination XXXX. as customer productivity on in product industry-leading The margin well and expansion position us we look focus

constant of for GAAP and quarter the First, let provide of results $X.X in segment. quarter. results. non-GAAP measures total basis me shows U.S. and our RAC basis, consolidated growth strong Slide Total up by was on billion an X% our revenue company X% driven our currency X% a our on a overview reported up on U.S. basis another of a X

as in lease XXXX, dampened presentation change Our higher QX comparables revenue much were of by stronger, and certain for rates significantly capital results growth total our underlying company Donlen both quarter. impacted our in XXXX leases the a revenue which in for were

total basis. items, currency Excluding more company X% constant a increased these on revenue than

compared unit Hertz was EBITDA was These points. improvement and loss depreciation higher operating in GAAP loss our compared The partially caused quarter. fourth margin a to XXXX our net of quarter and volume results the adjusted was adjusted of SG&A were Global while by per offset to fourth by higher revenue. XX share in and improved loss impact growing of a corporate the loss and corporate increased expanded expenses to flat $XX our million direct a the net On $XXX $XXX of basis, results quarter for which productivity pricing, driven initiatives, per million $X.XX per for in remain basis million $X.XX. the our to diluted EBITDA share non-GAAP XX% by

Adjusted $XX net loss the in quarter share year for million an $X.XX of net loss the adjusted per per loss share or to $X.XX million or prior compared loss was $XX quarter.

the led year, offset billion, X% in by $X.X segment, international reported revenues. on a were strong U.S. currency the by constant on our full growth lower in and For for exceptionally total company Donlen a X% basis basis, revenues partially up up a and drag RAC

a basis. more than items, revenues currency year described just grew Excluding the consolidated Donlen I the on for X% constant

year Hertz versus in attributable of compared strong net loss loss Global corporate and Net revenue $XX share a per loss loss vehicle XXXX million, in $XXX was driven the with of share for XXXX. million Adjusted and EBITDA by growth, million for lower productivity XXXX depreciation. per XX% up to was $X.XX $XXX was $X.XX

top per expenses in corporate created or cost compared margin loss reduction net income XXXX. million SG&A points, and XXXX Adjusted share loss EBITDA in of solid $XX with by $X.XX share efforts to net basis an leverage. direct for XXX $X.XX growth the line year full adjusted operating productivity was million expanded or combined $XXX operating per Adjusted and as

segment Now with on revenue. me the U.S. let additional quarter, let me our provide with RAC and starting fourth some start color

fourth strong was billion strong Dollar XXXX. results revenue RAC an Thrifty in and and we Growth U.S. revenue quarter grew Our the brands off-airport. as exceptionally versus saw broad-based, on- to of Hertz, and X% $X.X both the

Volume was both strong in pricing during and the in initiatives both rate Time driven up delivery growth by X%, TNC were revenue total our by solid services quarter. X%, value-added and and leisure demand RPD in an driven increase and from rentals. up and business mileage

$XX unit. driven depreciation and flat which quarter were percentage improvement higher versus offset corporate in expenses SG&A the XXX basis was of points operating XXXX. and These million revenue, growth Adjusted fourth per of results by revenue combined strong EBITDA of as a a

heading positioned in disciplined brand-building our well on service marketing improvements execution U.S. into by solid productivity initiatives, tremendous driven have XXXX. excellence, growth been management, our and The and RAC segment fleet we're

vehicle versus turning Monthly increased the Now quarter models per residual during values of fourth certain and de-fleeting XXXX, of XX% unit October of to by fleet. $XXX depreciation in the and XXXX. make November of driven expense largely

company disciplined were dispositions and growth The to continues vans benefit by the driven trucks fleet car up cargo through its support sales fleet and retail future up to channel. ramp in X%, Average and TNC vehicles from demand. acquisitions

Our core remains to tight, and expansion. drive us rental margin enabling price fleet

units Vehicle to of demand and safety delivery trucks number utilization was vans of year meet negatively and ago a compared continued rentals. impacted recall the to by significant ramp-up a future for on

nearly the fleet sales the to initiatives. sales were XXXX grew full XXX,XXX Retail XX% vehicles. year for quarter grew our for up retail same-store also X%. dispositions to XX% dispositions Moving and Overall

stores XX to We operations U.S. we our retail to footprint. technology sales convenience of growing expansion remain have advancements, the Canada additional options, run retail committed customer car through the and in and and

volume X% revenues million, by flat RAC were but Asia in international pricing down Europe softness currency due continued Total segment. to Total in our was constant X% to basis. on of Pac by $XXX X% offset a for driven quarter RPD and the were Moving up a Europe. improved fourth decline

million per the RAC positive segment $XX reported for XXXX. quarter versus International of by higher unit fourth lower prior versus and The EBITDA of driven the million negative depreciation adjusted revenue $X year

the initiatives service we We remain are management our investing bottom segment, and and and results ability fleet and market. confident we've as capabilities and implementing in improve internationally deliver this in line top to in results to in execute achieved revenue U.S. and growth

the issued ended flow. me financing due $XXX no proceeds corporate let and lien repay corporate XXXX, the million our on cash provide an million fourth due We used notes $XXX credit November, liquidity free to senior our second update facility $X.X X% notes of revolving and XXXX. billion drawings with Now of quarter in we our senior in under and In liquidity. activities,

EBITDA corporate end three at adjusted X.X leverage the X.X of the of XXXX. by measured as from to the XXXX corporate Net than end improved and more net by times at corporate times debt turns

on maturities until debt significant no have We June corporate our XXXX.

expected based our turning market operating quarter. consistent cash de-fleeting cash flow call ABS residual On free Now the market on experienced to flow. strong to we improved that seasonal were and flow with marks said, last fair had I cash through we favorable be third positive value a

flow Despite timing to was cash the year. of value recall attributable with XXXX we GM we significant shift marks operating flow. market fair activity end ended unfavorable improvement adjusted This ABS the in in in cash from de-fleeting held cars of longer at safety free the strike and i.e. negative

XXXX to Moving dynamics.

for market little we color capture our XXXX. of U.S. few digits and to for not this on are metrics a to mid-single to the helped expectations providing revenue, grow in fair On XXXX shape that growth. share we While detailed guidance we our let key provide low expect me XXXX, expect a

our We management, from initiatives us in both in TNC delivery have customer our to service XXXX. our improvements grow marketing, tailwinds volume and revenue that confidence again in price growth in ability and and give

first the start. we indicate to in are early a that quarter results strong off Our

the residual to We are decline slightly in values we planning impact grow expect in we low-single-digit will with and to a costs. depreciation, for that expect up be to market. international the flat conservatively carrying On vehicle line markets overall

history. relative continue expect our flip our and rates recent improved sheet improve the results us enable will stronger operating On balance we to interest side, our that vehicle to to

expansion ensure enable and a We on to will pipeline company, and the robust will margins. enable that EBITDA productivity deliver with initiatives costs than SG&A of intensity We're we a pace revenue us slower to margin DOE grow expand us which to our inside have that at our play the manage will objectives. running

expense net activities. debt finally, be interest reduced positively flow cash free our should on cash improved And impacted corporate and from operating from flow

efforts up, to business. of higher-margin wrap proud faster work We the do. create of to to I'm growing So our still have a team

reigniting However, our the me line tremendous productivity in made give and improvement, future. top in driving we've progress growth through expansion margin confidence

focus into unchanged The delivering line Number three, forward in fleet products drive to cost shareholder key as improve our we move enable on will the driving our you utilization. and marketplace. and move growth year. we to XXXX, winning I to expansion And will and And one, through productivity brand remain the forward focus growth, asset updating four new enable and top with that the management XXXX markets four, are as areas: improvements innovation through services. returns into margin two, progress initiatives in our disciplined fleet in growing are further Number and in areas number and we beyond productivity. in areas investments expansion initiatives. us look These

it questions. back the Operator? that, will for With I turn now over operator to

go the ahead. go Brian we'll Barclays. first, of And Instructions] [Operator to Please Johnson with line

Yes, two questions.

update on and fleet on cost just an your some housekeeping So, IT transformation.

XX% the we important is what's XQ is overall -- in aberration? most of this as And unit, going Or need what well extrapolate your saw a increase was so per the level forward? Could question new month kind cost, dollar competitor. fleet that XQ think as forward? the is right to we very you per of different going the kind from I from On residuals, in an

Yes.

in happened the dynamics of couple a costs, fleet on So quarter.

impacted de-fleet. As sort saw which would some activities fleet we across of we've with -- recall we the said, we timing that the normally

residuals of November of impacted little results. And October our bit frame see the sort so, we time dip did in in that and a

had our model through XXXXs And way depreciation as that of expect forward, benefits carry remind on model future. our disposing the wouldn't the were those you with some into And year year XXXXs, is year move work you as that, the favorable I'll of, we those of we pretty associated XXXXs. we second dynamic, to model

how depreciation all chunk That I dispositions disciplined next on things doing the moving of our we those depreciation, about our to are we've to acquisitions, been maximize we've all on on year. would things work sales fleet digits in our retail significant outcomes decline think the depreciation. on But depreciation, should the Overall, residuals fleet channel, through the that, inform done single on that us fleet. management; a of that say to being helping our maximize low expect outcomes you

So still we have have capabilities maximize but portfolio. we did things Those the some way are issues been the quarter, inside we've mix that working things in outcomes. our overall, to the the that through

manage the to which, have one of revenue, question? a expenses. additionally, initiatives second any and productivity had that And is kind continued DOE down a as of way increase through bring again, in you we to percent SG&A Brian, our

line now Your is open.

Yes. was IT the ramps know we the adjusted program. transformation some adjusted. revenue program. in excluded a of question, update basis of then, DOE see, is Kathy, My down about pace on hundred and or I which what's coming Can in -- come spend, either of expenses you. is XXXX? how But it model SG&A point do P&L? overall down? I is think follow-up the original on your Thank that couple generation the further in And points, spend? plan of will when of What you impact to kind just around us the in out

certain -- productivity had we has and as our of We're had facets our transformation. would areas our systems line. I CRM like both we've So other as to top as our well a as the impact continuing that say, progress upgrades upgrades, systems of an in financial lot success on through well

operating of some more we of is that little And ramp to ramp let into a when we Jamere actually would starting And an development spending up. appreciate that perspective. I'll down. the starting expect bit benefits to on expectations recognize the efficiency detail go do from and are

Yes.

mentioned, So mean, complete a systems the CRM the in But are as way shape and And to U.S. year in and work the given depend is, the largely for that way by rollout in disciplined invest going on international. continue Kathy we investment I -- the financial and XXXX. to timing be time to we're expect less. to how much the will U.S. the

the productivity and impacts SG&A us And way offsetting very DOE in sure I slower to about the we OpEx a in at and about than impacts We've offset revenue. pace Our that now as those investments then are think efforts to grow and technology, right disciplined have productivity the our out the rolled DOE specifically we've that we've tech that made been plans. SG&A. enabled

we using some as management, pretty we we fleet reservation mass that impacts numbers. We'll and and of And a forward-looking rental measured of critical be get to expect SG&A But up have in it. through significant we're the is that productivity some disciplined new our associated in productivity the our see and the improvements and for old systems benefits of payer bill systems the we're and decommission roll and to DOE pace will with the systems the OpEx. running

you. Thank

of Next line Mazari we'll ahead. Jefferies. Please go Hamzah the with to go

This then run what earlier currently Mario size is? you Hamzah. is I of the fleet economics but And maybe Hi. that you the from this of Cortellacci can TNC the filling the did missed business. in call, some for Maybe on up

big that just also And I idea over us you and longer of get time? maybe get of looks questions that business lot that can like think a what term? give the of business we margins how can on an

different I to this as numbers in that to business. hesitant is to all competitive say the what past. we actual have look that at would continue we So report I we're guess, I'm we in grow continue and a little bit things gotten managing the more have segments space

see returns as to continue it We on well. solid

involved four and started off for grow been we with have in about We that partners years continue to the business with. we've that

have as this found business to And leveraging fleet car of in deliver of we the growth. connectivity, And management we well a deliver great rental business our corporate are have lot to one the leveraging we as maintenance to support. capabilities fleet our be our contributors

over but to more continue we're we be to time, we -- same think in going at grow way to for will go like. take future demand perspective However the advantage of there from that leverage and enough we a our that and to than in will won't around that metered it we But demand. capabilities leverage continue we will regard. a a segment It's

profitability on of before as terms of TNC the oftentimes call RAC a U.S. the pleased contributor of in we're profitability profitability our business. strong the to said I've with And and It's business. our the growth

continue lower to from we're cars. operating the and Our cost costs improve benefiting of

but lower think value factor the in of are is accretive the about vehicle maintenance P&L dynamics and As costs the of P when length higher, costs. you you keep benefits

example leveraging faster efficiencies costs. operational that us bottom technology, continued on we're which top grow expertise in Donlen fleet the we're allow And telematics to drive us and the driving maintenance And help our the both lower line. for

management some And years. opportunity to well you've we competition based believe We're some a pick So talked our just our having share. Kathy in our well-positioned the there's about think I for based fleet standpoint the still smaller experience the ride-hailing an demand we're that underlying on and the scale businesses. to relative that space up wobble start few from our to to growth past and over about and marketplace bodes from in competitors available the in the things capabilities started on competitive space of see as

Okay. just more one and I'll it over. turn And

what you kind in higher sacrifice it on a price. the shift want A you're is rental of in saw competitor longer of QX on is on Is your of So volume? that and guys which earlier year. pricing? more length And more kind what more they're opposite in them looks focused the it I volumes giving to know willing more focused it of of just to Is from XXXX? yours is which this some

and to how expect like manage it into just looks Is that of next or pricing competitive an get year? that? what dynamic wanted you So idea more to focused going volume on

more this people, we absolutely price. become and the at become talk price the cars has -- would point one expensive, But the they expensive. salaries need is struggled things focusing say whenever industry have over I where we value we people on is cars them I of the start as them more Well they volume. across And one challenge. the And need years that about most need industry, And walking with halls price the in a things getting provide. that we get getting think this tough of an both I do important to for around world. is We -- have

at look every our business of millions consumers millions you contracts what If is, worth it of of is signing tens create of billion with to of $XX tens business. year

and regard, not -- won't that price we to the that to So I'll get volume. put sacrifice first the way. getting foremost price and it's it for value to

But see Thrifty I value and growth perspective of as volume given the brands started what both the last and done investing and particularly got year. brands just price promise and brands, we in in we've all we a brands in in from well. frankly of our very price a our Dollar we've think increases branding really strong And those

and we sure to we're cover to get both across we the costs. we have if price low there single-digit volume But win in think to make those So range. the going price increases depreciation, is

of and marketplace our you price opportunities pretty plans, -- get and I volume you've when we this of as And quarter. reasons confident year laser in calories mean driving the focused we in there to obvious RPD Yeah. that the results reason margin on more for as we're seen relative the fourth we look We're the get in transactions. focused our day XXXX price at there's results another our And today. another we're saw obviously buck

the driving by both. forward. to the for on done and growing us. at sure customers right is the and our that But our that we're make for right to volume right place the And price inside the in by winning winning time work price we as we're company results fleet continuing growing move be positive our we're have we we've We're yielding doing focused

to with the we'll go next go Woronka Chris line Please ahead. And Bank. you. Thank of Deutsche

Hi, the which than thought good wanted like quarter, fleet XXXX different any change residual you it in maybe the on of in you anything bit terms a or what was fourth I quarter, mix what morning does to model your the make or of like everyone. sounds the that? for values in that plans ask into heading little of or terms saw

But say we're to it focused fundamentals residual results and part would good bit forward. of residual that softness We the little on our relates and terms change the frankly, November and see as snapback driving a through in in it right so quite value standpoint we're as relates early cycles pretty a the strategy of February, moving seeing had January No from October values. no did November. a in I some of

starts strategy demand around Our fleet acquisition by where consumer the is.

into value going to dispose the we And cars. sense us We when also So from of we're make eye our those putting drive. we're how to cars think we an cars to long-term for residual and in impact the what standpoint towards fleet. fleet want a layer TNC that consumers have about perform then

in example saw we SUVs with the that those SUVs in cycles. go where movement or for fundamentals fleet through know relates well acquisition we'll you And specifically as maintain pretty company. the in time. year how the we're been the fundamentals in fleet disciplined year-over-year seen and we've we you, XXXX frame. we particularly you to some as on that with pleased over be manage discipline as were you operate inside course very and through as short really mind you if discipline move may period down some model time year and results residual around And But look pockets values the of sure you And fine. in the the of a and making forward, we've of the we're have And very capabilities it that the windows

impacted were in that results our as But quarter. we portfolio have about feel we the execution the in marketplace. by feel look good we the we Our fourth and long-term, good that about pretty

how have, control, constantly and demand. all of and thing looking Yeah. at of And improving here. as we buy good we we're as dispose in I values, best see the think that challenge. fleet We're world-class them do acquisition well at to we makeup how adjusting the And aspects we opportunistic strategies And residual between. selling. constantly is based that cars pretty pricing on We're of where consumer we and can it

retail our And business then we've been expanding capabilities. those sales and improving car

any really So on focus fleet kind or world-class in through continued capabilities around price have decrease any of manage overall, the managing and there's think changes we acquisition values. residual disposition way if I to best is and increase the

that? just Okay. very up That's versus kind more steps how question of calibrate delivery, of then looking at source secondarily, function? of all about And Or there of TNC we you? any steady the looking the think kind is is as are this started at -- opportunity size be just a it going a package constant for then you growth you step is the when of first And maybe kind profitability to is of a follow-up the there to way on that helpful.

TNC -- I I have expanding the started really just think with think effectively. we took into approach, very worked And has we we delivery.

in leverage business Walmart. fleet Donlen we capabilities So like at large our our do best we're looking customers to service and how corporate

of a some provide demands meet on delivery a how for a and can in consumers who win in focusing them, and last-mile the customers. type and we us we're and help create at capability that their industry win So the for players are their win best for of looking improvement big and for -- them really the

on So we are it. focused

problem a have we with stands a we continue brands, providing that that monster mobility is The We And retailers opportunity. in out for and And it. continue may seen great last-mile delivery. we've you and Hertz we'll huge recognizable services to many be very TNC brand had it's in to will for look and just have already delivering think expand success -- we solutions a goods that fans similar it's to space. area. and there this Clearly, we have with a

Stanley. Please will ahead. of next And you. with go Jonas the Thank we to go Adam line Morgan

Kathy. Hi, everybody. Hi

in vehicles XXX,XXX you So fleet. your XXX,XXX or global have about

in road on rental X -- mile. roughly think participate calculations and Hertz are of Hertz car XXXX out you on is markets I miles of our out vehicles the XXX vehicle about the a X

position reducing curious is footprints. So on I focus the but keep progress conference going make you're I coming doesn't I'd to yet up in investors make know kind from big of big a this all unique up. be a really ESG, agree this in come impacts a in carbon to given and change, you might think calls,

your coming this fleet? haven't seen one maybe do reduce of you how a their -- -- think if vehicles out. corporate strategy to I'm me, for your So since report responsibility Hertz have – in the I COX you sustainability footprint XXXX. the wrong or since what's report Correct

the a few you in But has fleet nobody any of significant EVs I mentioned thousand volume. at hybrids, it's established think

an opportunity And So be certainly you curious ESG enlighten for great could about issue help real just just do for companies, anything rental becoming kind you is existential of have to it? audience companies. as all car not something the a here

is U.S.. in the we U.S. that Europe, of they challenge it charging vehicles. consumers we And until we up the fear The advance with comes it. an you in cars, renting support vehicles than to the people Europe taking particularly electric much of for where in is have struggle when charge is the know that area government steps Well are to infrastructure this more in area will

areas When familiarity homes they're local live a in. they they don't plug the traveling have that own in it place to with versus could that where they their or

right an if in greatest be growth where to think now, going the going be we at advancement, Europe. to So we is it's look

provide meeting are with be stations, to electric we countries the we fleet all location buying over of will start. in fleet that in to are standards our for of working X,XXX in example, potentially the and so at the some demanding. charging cities; at, We're our Paris looking least And Europe vehicles European

when in into the these that we buy start putting need to to And approach these airport the preference infrastructure will stepping where fleet so work will back consumer then cars? those an see incentives. the they've rent will OEM they put people regard these Will and actually and the municipalities so up actually support incentives that but areas, we our eliminated cars they government and is in them perspective, in it, that from the

can partnerships locations particularly with and area. charging do discussions delivery We with these How of in have have to and delivery vehicles we vehicles for the for with work OEMs kind the them them we be provide been in electric any with along maintenance.

Now requirements. maintenance the good news in have electric lower they vehicles

So that's an upside.

plan. – it is electrification our perspective from part we an So strategic of

on a have it. focus We

where turn well. infrastructure news and the with first supportive. here will as as and we and foremost able make to as OEMs We then electric more to in and the are our XX to start is maybe work But we'll advances the governments government will put here, rent good consumers Europe cars so infrastructure the And wanting some and and the months in progress them. grow every develop hopefully, cars the fleet be

color. Kathy. That's Thanks, great

Thanks, Adam.

the Millman & Thank we'll line Research of Associates. Millman ahead. with next you. Please to Michael And go go

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service us our seen in invest You've capabilities.

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direct is revenue. that, help we SG&A, margin saw were in us than operating drive focus able And expenses you that to at a going what forward expansion. our slower But is to and XXXX grow rate

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to business going create going is faster-growing forward. and higher-margin help a both, this And us

ladies gentlemen, Service. you participation, your your conclude And that Teleconference Executive using today. and and AT&T Thank for for does for conference

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