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Published on : Wednesday, May 27, 2015
Sixt SE, Germany’s largest car rental company and one of Europe’s leading mobility service providers, continued its revenue and earnings growth in the first quarter of 2015. Both Business Units, Vehicle Rental and Leasing, contributed towards an increase in consolidated operating revenue of 14.6% to EUR 404.2 million. Group earnings before taxes (EBT) improved by 5.5% to EUR 28.1 million, despite considerable expenditure for the strategic expansion measures abroad. Adjusted by the additional expenses for foreign expansion in the Vehicle Rental Unit, EBT improved by 20.3% to EUR 32.0 million. On the basis of the good first quarter the Managing Board confirms its outlook for the whole of 2015.
Erich Sixt, Chairman of the Managing Board of Sixt SE: “Sixt made a good start into 2015 and is recording solid growth in Germany and ongoing dynamic growth abroad. Our Group’s financial strength allows us to invest very consciously in foreign expansion, for example with the extension of our station network in the USA or in other major Western European markets. The successful IPO of our subsidiary, Sixt Leasing AG, in early May gives both our Business Units additional financial leeway for further growth.”
Group performance in the first three months of 2015
This figure includes expenditure for strategic growth initiatives in Vehicle Rental. This was higher than during the corresponding quarter last year, and was specifically related to the further extension of the rental station network in the USA, a large-scale advertising and marketing campaign and new stations in France as well as new foreign locations of DriveNow, the premium carsharing joint venture operated with BMW, in London and Vienna. Adjusted by these additional expenses EBT improved by 20.3% to EUR 32.0 million.
Significant increase in investment
During the first quarter of 2015 Sixt substantially increased its investment in its fleets. Over the first three months some 51,600 vehicles were added to the rental and leasing fleet (Q1 2014: 41,700 vehicles) with a total value of EUR 1.43 billion (Q1 2014: EUR 1.00 billion). This growth in the number of vehicles and the investment volume reflects the increased demand registered by both Business Units as well as the consistent focus on premium products in the choice of vehicles Sixt offers.
Continued rock-solid equity basis
At the end of the first quarter of 2015 the Sixt Group recorded equity of EUR 778.4 million, some EUR 36.8 million more than at the end of December 2014 (EUR 741.6 million). At 24.5% the equity ratio as of 31 March 2015 remained significantly above the targeted minimum value of 20% (31 December 2014: 26.3%).
Successful IPO of Sixt Leasing AG
In the second quarter of 2015 Sixt SE successfully listed its subsidiary Sixt Leasing AG on the stock exchange.
On 7 May 2015 the share of the vendor-neutral service provider of fleet leasing, fleet management and online retail solutions was traded for the first time on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. Subject to the full exercise of the greenshoe option granted by the issuing banks, Sixt SE will have reduced its shareholding in Sixt Leasing AG as part of the IPO from 100% to around 40%. Nonetheless, the shareholding will remain fully consolidated within the Sixt Group for the time being.
Outlook for the whole of 2015
Following the good start into 2015, the Managing Board is generally optimistic as regards the further business performance for the current year. Consequently the Managing Board expects both Business Units to register growing demand, but also expects fleet costs and operating expenses to rise, especially for the intensification of the various strategic growth initiatives abroad.
Against this background Sixt maintains its projections for fiscal 2015 and expects to see a slight increase in consolidated operating revenue as against the previous year. The main growth impulse is likely to come once again from foreign operations. The expectation for consolidated earnings before taxes (EBT) is to see a stable to slightly increased performance.
Developments in the operating business units
Sixt is represented with its own subsidiaries in Germany, France, Spain, Great Britain, the Netherlands, Austria, Switzerland, Belgium, Luxembourg, Monaco, and the USA (Sixt Corporate countries). This means that the Company covers the largest part of the European rental market and is also active on the world’s biggest vehicle rental market, the USA. In the other European countries and in other global regions, the Sixt brand is represented by a close-knit network of franchisees.
As of the end of the first quarter of 2015 Sixt had 2,201 rental offices worldwide, which were divided up in roughly equal halves between company offices and franchisees.
The average number of vehicles in Germany and other countries (excluding franchisees) for the first three months was 82,100. This is 11.7% more than the average number for the same quarter of 2014 (73,500). This increase reflects the dynamic growth of the vehicle rental business.
The Vehicle Rental Business Unit reported rental revenue of EUR 272.5 million for the first quarter of 2015, an increase of 18.4% (Q1 2014: EUR 230.1 million). Growth in Germany was a solid 5.9%, bringing revenue up to EUR 150.4 million. Outside of Germany rental revenues climbed by 38.5%, also aided by the effects from foreign currencies, to EUR 122.1 million. All in all, the Vehicle Rental Business Units recorded an increase in revenues of 19.3% to EUR 300.6 million (Q1 2014: EUR 251.9 million).
EBT was EUR 21.7 million, which was a marginal 4.9% lower than the previous year’s figure at EUR 22.8 million. This figure includes expenses of EUR 3.9 million for strategic expansion activities abroad. Adjusted by these the EBT increased by 12.3% to EUR 25.6 million.
Sixt Leasing AG is one of Germany’s leading vendor-neutral full-service leasing providers with subsidiary companies in France, Switzerland, Austria and the Netherlands. Sixt Leasing is active in the three business fields Fleet Leasing, Fleet Management and Online Retail.
As per reporting date, 31 March 2015, the Leasing Business Unit’s total number of leases in and outside Germany (excluding franchisees) was 98,400. This is a gain of 23.6% against last year’s reporting date (79,600). This growth is attributable to the two business fields Fleet Management (31 March 2015: 31,100; as per same reporting date of last year: 16,900) and Online Retail (31 March 2015: 17,500; as per same reporting date of last year: 12,400). In the Fleet Leasing business field the number of contracts decreased slightly (31 March 2015: 49,800; as per same reporting date of last year: 50,300).
Leasing revenues for the first quarter of 2015 were up 2.9% to EUR 103.6 million (Q1 2014: EUR 100.7 million). Revenue from the sale of used leasing vehicles, which can fluctuate due to reporting day effects, came to EUR 59.2 million in the first quarter of 2015 after EUR 28.7 million in the same quarter last year. The reason for this strong growth is primarily the increasing expansion of the contract portfolio over the last few years, which at the end of the leasing contract’s term spells out as correspondingly more vehicle returns with a certain time lag in the financial year. Sixt is therefore also expecting to see strong revenue incoming from the sale of vehicles in the future periods.
Total revenue for the Leasing Business Unit for the first three months of 2015 came to EUR 162.8 million, a gain of 25.9% on the same quarter last year (EUR 129.4 million).
The Business Unit’s EBT almost doubled to EUR 7.3 million (Q1 2014: EUR 3.6 million). This was due to the growth in business volume as well as margin improvements to the contract portfolio.