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05/09

Europcar Group - 2016 First Quarter Results

Note: This press release contains unaudited consolidated financial figures established under IFRS by Europcar Groupe’s Management Board and reviewed by the Supervisory Board on May 4, 2016.

Europcar Group announces a sound performance for its 2016 First Quarter Results

  • Continuing growth in rental revenues at +3%[1].
  • Adjusted Corporate EBITDA at – €4.7 million reflects investments for the Group future growth.
  • Group on track to deliver 2016 guidance.

Philippe Germond, Chairman of the Management Board of Europcar Groupe commented:

“Europcar has achieved sound performance over this first quarter. We keep up the deployment of the second phase of our transformation program, Fast Lane, focusing on commercial initiatives and on our customer journey. Our low cost brand, InterRent, recorded very good results over the quarter with a growth of 90%[2] of the rental revenue, especially in our Southern European countries, strengthening our ambition on this growing market. Furthermore, we have reached a new step in our customer strategy with the choice of a CRM solution aiming at offering a high quality mobility experience in order to create brand preference. The recent signing of partnerships with Air Caraïbes and Gulf Air’s FalconFlyer Loyalty Program, allow the Group to develop its customer portfolio while enhancing its brand awareness. All these initiatives reflect our investments for future growth and make us very confident on the delivering of our 2016 guidance. Finally, I would like to highlight again our strong commitment to create more value for our shareholders through acquisitions and the development of new mobility services.

In € million, except if mentioned

Q1 2016

Q1 2015

Change

Change at constant exchange rate

Number of rental days (millions)

11.8

11.4

3.5%

 Na

Average fleet (thousands)

177.3

172.4

2.9%

Na

Revenues

418

414

0.9%

2.3%[3]

Adjusted Corporate EBITDA

-4.7

-3.7

-28.2%

-21.3%

Adjusted Corporate EBITDA margin

-1.1%

-0.9%

 

 

Last Twelve Months Adjusted Corporate EBITDA

250

219

13.8%

 

Last Twelve Months Adjusted Corporate EBITDA Margin

11.6%

10.9%

 

 

Operating income

7

-29

 

 

Net profit/loss

-20

-69

 

 

Corporate net debt at the end of the period

247

 

 

 


Revenues

Total revenue amounted to €418 million compared to €414 million in Q1 2015, representing an increase of +2.3% at constant currency. Without petrol impact, total revenues would have evolved of 2.8% at constant exchange rate. This is the 8th quarter in a row of growth for the Group. This increase is driven by a +3% at constant exchange rate growth in vehicle rental activities. This trend reflects the success of the sales initiatives launched within the Fast Lane transformation program. The leisure segment showed a positive evolution over Q1 on both Europcar® and InterRent® brands, while the corporate segment was boosted by the SME program.

Rental days volume increased by 3.5% compared to Q1 2015, at 11.8 million with a good increase notably in the Southern countries and in Australia and New Zealand. Compared to the first quarter 2015, the trend was less favourable on the corporate side, notably in Belgium due to the terrorist attacks and in the United Kingdom, in particular for the car replacement activities.

InterRent brand Revenue Per Day is growing at +6.9% at constant currency, while Europcar brand RPD is up by +0.7%, thanks to balanced volume growth and ancillary sales. On a consolidated basis, Revenue Per Day (RPD) is almost flat at -0.4% at constant currency, reflecting mainly the mix evolution of the 2 brands.

Adjusted Corporate EBITDA

Adjusted Corporate EBITDA reached at – €4.7 million versus – €3.7 million in Q1 2015, in a quarter which is traditionally a small one for Europcar business. Adjusted corporate EBITDA in Q1 2016 reflects the continuing increase in revenues, the well managed fixed and variable cost bases, and the decrease in fleet financing interest expenses following past 2 years refinancing initiatives. In addition, as part its strategy, the Group pursued its investments to sustain future growth, notably with the deployment of InterRent brand and network, investments in CRM, IT and Europcar Lab, the new mobility services incubator.

Operating income

Operating income came in at €7 million, compared to – €29 million in Q1 2015.
Last year quarter included non-recurring items which were notably the net negative impact of certain proceedings and reorganization charges linked to Fast Lane transformation plan roll out.

Net Profit/Loss

Net profit/loss presented a loss of €20 million in the first quarter of 2016, compared to a loss of €69 million in the first quarter of 2015. This improvement reflects notably the benefit of the reshape of the capital structure following the IPO at the end of Q2 2015. In addition, 2015 first quarter was impacted by non-recurring items.

Corporate Net Debt

Corporate net debt amounted to €247 million as of March 31, 2016 (vs. €235 million as of December 31, 2015). The corporate net debt leverage at 1x[4] provides the Group with the headroom to roll out its ambitious acquisition plan in order to increase value creation for its shareholders.

About Europcar Group
Europcar shares (EUCAR) are listed on the Euronext Paris stock exchange. Europcar is the European leader in vehicle rental service and is also a major player in mobility markets. Active in more than 140 countries, Europcar serves customers through an extensive vehicle rental network comprised of its wholly-owned subsidiaries as well as sites operated by franchisees and partners. In addition to the Europcar® brand, the company offers low-cost vehicle rentals under the InterRent® brand. A commitment to customer satisfaction drives the company and its 6,000 people forward and provides the impetus for continuous development of new services. The Europcar Lab was created to respond to tomorrow’s mobility challenges through innovation and strategic investments, such as Ubeeqo and E-Car Club.

Forward-looking statements
This press release includes forward-looking statements based on current beliefs and expectations about future events. Such forward looking statements are not guarantees of future performance and the announced objectives are subject to inherent risks, uncertainties and assumptions about Europcar Groupe and its subsidiaries and investments, trends in their business, future capital expenditures and acquisitions, developments in respect of contingent liabilities, changes in economic conditions globally or in Europcar Groupe’s principal markets, competitive conditions in the market and regulatory factors. Those events are uncertain; their outcome may differ from current expectations which may in turn affect announced objectives. Actual results may differ materially from those projected or implied in these forward-looking statements. Any forward-looking statement contained in this press release is made as of the date of this press release. Europcar Groupe undertakes no obligation to publicly revise or update any forward-looking statements in light of new information or future events.
The results and the Group’s performance may also be affected by various risks and uncertainties identified in the “Risk factors” of the Registration Document registered by the Autorité des marchés financiers (the “AMF”) May 20, 2015 under the  number I.15-041 and its update filed with the AMF on June 12, 2015 and also available on the Group’s website: www.europcar-group.com

Further details on our website: finance.europcar-group.com

Contacts

Europcar / Press relations
Nathalie Poujol
+33 1 30 44 98 82
europcarpressoffice@europcar.com

Europcar / Investor relations
Aurélia Cheval
+33 1 30 44 98 98
Investor.relations@europcar.com

Havas Paris
Jean-Baptiste Froville
+33 1 58 47 95 39
jean-baptiste.froville@havasww.com

Appendix 1 – Management Profit and Loss 

All data in €m

Q1 2016

Q1 2015

Total revenue

417.6

413.7

Fleet holding costs, excluding estimated interest included in operating leases

-104.9

-106.0

Fleet operating, rental and revenue related costs

-155.3

-151.1

Personnel costs

-83.2

-80.9

Network and head office overhead

-53.5

-53.3

Other income and expense

-0.1

0.7

Personnel costs, network and head office overhead, IT and other

-136.7

-133.5

Net fleet financing expense

-14.7

-15.3

Estimated interest included in operating leases

-10.6

-11.6

Fleet financing expenses, including estimated interest included in operating leases

-25.3

-26.9

Adjusted Corporate EBITDA

-4.7

-3.7

Margin

-1.1%

-0.9%

Depreciation – excluding vehicle fleet

-8.2

-8.0

Other operating income and expenses

4.7

-32.7

Other financing income and expense not related to the fleet

-12.6

-28.2

Profit/loss before tax

-20.8

-72.5

Income tax

3.7

5.0

Share of profit/(loss) of associates

-3.0

-1.9

Net profit/(loss)

-20.1

-69.5

Appendix 2 – IFRS Income statement

In € thousands

 

First-quarter 2016

First-quarter 2015

 

 

 

 

 

 

 

 

Revenue

 

417,554

413,726

 

 

 

 

Fleet holding costs

 

(115,450)

(117,551)

Fleet operating, rental and revenue related costs

 

           (155,336)

 

(151,091)

Personnel costs

 

(83,172)

(80,932)

Network and head office overhead costs

 

(53,458)

(53,258)

Depreciation, amortization and impairment expense

 

(8,207)

(8,017)

Other income

 

(140)

674

Recurring operating income

 

1,791

3,551

 

 

 

 

Goodwill impairment expense

 

–  

Other non-recurring income

 

9,149

24,600  

Other non-recurring expense

 

(4,411)

(57,268)

Operating income

 

6,529

(29,117)

 

 

 

 

Gross financing costs

 

(21,849)

(34,547)

Other financial expenses

 

(5,865)

(13,530)

Other financial income

 

413

4,631

Net financing costs

 

(27,301)

(43,446)

 

 

 

 

Profit/(loss) before tax

 

(20,772)

(72,563)

 

 

 

 

Income tax benefit/(expense)

 

3,651

5,044

Share of profit/(loss) in companies

accounted for under the equity method

 

             (3,016)

(1,937)

Net profit/(loss) for the period

 

(20,137)

(69,456)

 

 

 

 

Attributable to:

 

 

 

Owners of ECG

 

(19,972)

(69,454)

Non-controlling interests

 

(165)

(2)

 

 

 

 

 

 

 

 

Basic loss per share

attributable to owners of ECG (in €)

 

 

(0,139)

(0.669)

Diluted loss per share

attributable to owners of ECG (in €)

 

 

(0,139)

(0.669)

Appendix 3 – Reconciliation

All data in €m

Q1 2016

Q1 2015

Adjusted Consolidated EBITDA

103.3

107.4

Fleet depreciation IFRS

-41.2

-40.9

Fleet depreciation included in operating lease rents

-41.5

-43.4

Total Fleet depreciation

-82.7

-84.3

Interest expense related to fleet operating leases (estimated)

-10.6

-11.6

Net fleet financing expenses

-14.7

-15.3

Total Fleet financing

-25.3

-26.9

Adjusted Corporate EBITDA

-4.7

-3.7

Amortization, depreciation and impairment expense

-8.2

-8.0

Reversal of Net fleet financing expenses

14.7

15.3

Reversal of Interest expense related to fleet operating leases (estimated)

10.6

11.6

Adjusted recurring operating income

12.4

15.1

Interest expense related to fleet operating leases (estimated)

-10.6

-11.6

Recurring operating income

1.8

3.5

Appendix 4 – Balance sheet

In € thousands

 

Au 31 Mars 2016

As at Dec. 31, 2015

 

 

 

 

Assets

 

 

 

 

 

 

 

Goodwill

 

452,782

457,072

Intangible assets

 

714,200

713,136

Property, plant and equipment

 

84,306

89,236

Equity-accounted investments

 

19,019

22,035

Other non-current financial assets

 

54,239

57,062

Deferred tax assets

 

61,141

55,730

Total non-current assets

 

1,385,687

1,394,271

 

 

 

 

Inventories

 

14,807

15,092

Rental fleet recorded on the balance sheet

 

1,670,642

1,664,930

Rental fleet and related receivables

 

619,283

574,652

Trade and other receivables

 

349,482

357,200

Current financial assets

 

39,681

37,523

Current tax assets

 

37,689

33,441

Restricted cash

 

80,834

97,366

Cash and cash equivalents

 

134,329

146,075

Total current assets

 

2,947,047

2,926,280

 

 

 

 

Total assets

 

4,332,734

4,320,551

 

 

 

 

Equity

 

 

 

Share capital

 

143,326

143,155

Share premium

 

767,231

767,402

Reserves

 

(96,835)

(74,341)

Retained earnings (losses)

 

(300,139)

(274,821)

Total equity attributable to the owners of ECG

 

513,583

561,395

Non-controlling interests

 

760

962

Total equity

 

514,342

562,356

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Financial liabilities

 

803,327

801,183

Non-current financial instruments

 

61,484

52,090

Employee benefit liabilities

 

128,043

119,295

Non-current provisions

 

24,225

25,168

Deferred tax liabilities

 

130,153

131,132

Other non-current liabilities

 

291

306

Total non-current liabilities

 

1,147,523

1,129,174

 

 

 

 

Current portion of financial liabilities

 

1,132,929

1,263,783

Employee benefits

 

2,944

2,944

Current tax liabilities

 

26,040

24,511

Rental fleet related payables

 

834,830

662,722

Trade payables and other liabilities

 

448,721

424,974

Current provisions

 

225,430

250,087

Total current liabilities

 

2,670,894

2,629,021  

Total liabilities

 

3,818,417

3,758,195

 

 

 

 

Total equity and liabilities

 

4,332,734

4,320,551

Appendix 5 – IFRS Cash Flow

In € thousands

 

First-quarter 2016

Full-year 2015

First-quarter 2015

 

 

 

 

 

Profit/(loss) before tax

 

(20,772)

(6,047)

(72,563)

 

 

 

 

 

Depreciation and impairment charge on property, plant and equipment

 

3,736

15,277

3,430

Amortization and impairment charge on intangible assets

 

4,357

17,893

4,530

Impairment charge on goodwill

 

 

 

 

Changes in provisions and employee benefits

 

(20,473)

999

14,079

Recognition of share-based payments

Costs related to the IPO

 

1,225

2,624

8,692

 

Profit/(loss) on disposal of assets

 

146

(394)

(16)

 

 

 

 

 

Total net interest costs

 

23,263

127,303

37,008

Redemption premium

 

56,010

56,010

Amortization of transaction costs

 

42,340

42,340

Amortization of bond issue premiums

 

 

 

Other non-cash items

 

 

1,465

3,348

Financing costs

 

23,263

227,118

45,271

 

 

 

 

 

Net cash from operation before changes in working capital

(8,518)

266,162

(5,269)

 

 

 

 

 

Changes to the rental fleet recorded on the balance sheet

 

(46,047)

(232,851)

(123,015)

Changes in fleet working capital

130,219

34,869

244,213

Changes in non-fleet working capital

30,040

(57,243)

1,014

 

 

 

 

Cash generated from operations

114,212

10,937

122,212

 

 

 

 

 

Income taxes received/paid

 

(1,426)

(39,669)

(5,365)

Net interest paid

 

(19,604)

(137,334)

(20,266)

 

 

 

 

 

Net cash generated from (used by) operating activities

84,664

(166,066)

91,312

 

 

 

 

 

Other investments and loans

38

 

(107)

Acquisition of intangible assets and property, plant and equipment

 

(6,558)

(29,172)

(8,161)

Proceeds from disposal of intangible assets and property, plant and equipment

592

5,384

2,727

Acquisition/disposal of financial assets

259

(7,563)

 

Acquisition of subsidiaries, net of cash acquired

 

(23,872)

 

Disposal of subsidiaries, net of cash sold

 

 

Dividends received from associates

 

 

 

 

 

 

 

Net cash used by investing activities

(5,669)

(55,223)

(5,541)

 

 

 

 

 

Capital increase (net of related expenses)

 

 

448,203

 

Issuance of bonds

 

471,623

 

Redemption of bonds

 

(780,010)

 

Change in other borrowings

(108,580)

123,310

(73,527)

Payment of transaction costs

 

 

(19,820)

 

 

 

 

 

 

Net cash generated from (used by) financing activities

(108,580)

243,306

(73,527)

 

 

 

 

 

Cash and cash equivalent at beginning of period

 

229,368

206,317

206,317

Net increase/(decrease) in cash and cash equivalents after effect of foreign exchange differences

 

(29,585)

22,018

12,244

Effect of foreign exchange differences

(415)

1,033

2,256

Cash and cash equivalents at end of period

 

199,368

229,368

220,817

Appendix 6 – Debt

 

€million

Pricing

Maturity

March 31, 2016

Dec. 31, 2015

 

High Yield Senior Notes (a)

5.75%

2022

475

475

Senior Revolving Facility (€350m)

E+250bps (b)

2020

120

81

FCT Junior Notes, accrued interest not yet due, capitalized financing costs and other

 

 

-163

-150

Gross Corporate debt

 

432

406

Short-term Investments and Cash in operating and holding entities

 

-185

-171

CORPORATE NET DEBT

(A)

247

235

 

 

 

 

 

 

 

€million

Pricing

Maturity

March 31, 2016

Dec. 31, 2015

IN Balance Sheet

High Yield EC Finance Notes (a)

5.125%

2021

350

350

Senior asset revolving facility (€1.1bn SARF) (c)

E+170bps

2019

584

658

FCT Junior Notes, accrued interest, financing capitalized costs and other

 

 

161

142

UK, Australia and other fleet financing facilities

 

(d)

409

509

Gross financial fleet debt

 

 

1,504

1,659

Cash held in fleet financing entities and Short-term fleet investments

-118

-161

Fleet net debt in Balance sheet

 

1,386

1,498

 

 

 

 

 

OFF BS

Debt equivalent of fleet operating leases – OFF Balance Sheet (e)

1,389

1,323

 

 

 

 

 

 

 

TOTAL FLEET NET DEBT (incl. op leases)

(B)

2,775

2,821

 

 

 

 

 

TOTAL NET DEBT

(A)+(B)

3,022

3,057

 

  • These bonds are listed on the Luxembourg Stock Exchange. The corresponding prospectus is available on Luxembourg Stock Exchange website (http://www.bourse.lu/Accueil.jsp)
  • Depending on the leverage ratio
  • Swap instruments covering the SARF structure have been extended to 2019
  • UK fleet financing maturing in 2017 with a two-year extension option
  • Corresponds to the net book value of applicable vehicles, which is calculated on the basis of the purchase price and depreciation rates of corresponding vehicles (based on contracts with manufacturers).

 

[1] Constant Currency
[2] Constant Currency
[3] Without petrol impact, total revenues would have evolved of 2.8% at constant exchange rate.
[4] 1x Adjusted Corporate EBITDA

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