August 20, 2015 // Franchising.com // Pullach – The Sixt Group recorded strong growth during the first half of 2015, that surpassed expectations. The improvement was mainly driven by higher rental revenues in the Vehicle Rental Business Unit. In the second quarter, growth dynamism picked up against the first three months. For the first half of 2015 Sixt recorded consolidated operating revenue of EUR 886.9 million, an increase of 16.7% against the same period last year. Earnings before taxes (EBT), which are the key success figure of the international mobility provider, climbed 10.8% to EUR 74.8 million, despite the significantly higher expenditures incurred for expansion measures abroad. In view of the remarkably business performance the Management Board revised expectations for the whole of fiscal year 2015 upwards.
Erich Sixt, Chairman of the Managing Board of Sixt SE: "Sixt was exceptionally successful during the first half of the year. We are growing rapidly with our vehicle rental business outside Germany and are continuously gaining market shares. Even at home, where we are already the clear market leader, we managed to raise rental revenues by almost 10%. This shows the strength of our Company. The IPO of Sixt Leasing AG has meant that in the second quarter we created the conditions, for both Business Units to realise their ambitious growth plans without having to compete internally for equity.“
Over the first six months the Group added around 107,800 vehicles to the rental and leasing fleet (H1 2014: 93,300 vehicles) with a total value of EUR 2.94 billion (H1 2014: EUR 2.29 billion). This increase follows the substantially stronger demand, above all, in the Vehicle Rental Business Unit.
As per 30 June 2015 the equity of the Sixt Group amounted to EUR 989.4 million. This was significantly higher than the figure recorded at the end of 2014 (EUR 741.6 million; +33.4%) and also more than the figure as per 31 March 2015 (EUR 778.4 million; +27.1%). This effect was essentially due to the IPO of Sixt Leasing AG, which amounted to a total of EUR 233.9 million. Countering this trend was the record dividend paid out in June 2015 for fiscal year 2014. It amounted to EUR 58.0 million.
As per the end of June 2015 the equity ratio stood at 26.7%. This means it was higher than on 31 December 2014 (26.3%) and substantially above the long-term minimum target of at least 20%.
On the back of the higher than expected business performance during the first half of 2015 the Managing Board of Sixt SE is optimistic for the second half of 2015. The Managing Board upgrades its revenues and earnings expectations for the whole of 2015 and now expects consolidated operating revenue to climb significantly over last year’s total (previous expectation: “slight” growth). Growth is predominantly driven by the expansion in European countries outside Germany and in the USA. On the basis of a continued cautious and demand-driven fleet policy, ongoing higher expenditures for strategic growth initiatives and further enhanced efficiency in the Group, the Managing Board now expects a slightly increased Group EBT compared to fiscal year 2014 (previous expectation: “stable to slight increased” development).
Sixt is represented with its own subsidiaries in the core European countries of Germany, France, Spain, the UK, the Netherlands, Austria, Switzerland, Belgium, Luxembourg, and Monaco (Sixt corporate countries). This means that the Company covers the largest part of the European rental market and is one of the continent's leading vehicle rental companies. In the USA Sixt has been active since 2011. In addition, Sixt is represented in numerous countries around the globe through efficient and strong franchise and cooperation partners (Sixt franchise countries).
As per 30 June 2015 the number of Sixt rental stations came to 2,176 worldwide (Company offices and franchisees), which was on the level at the end of 2014 (2,177 stations). The further expansion in the number of Sixt's own stations in the Sixt corporate countries, above all in the USA, Spain and the UK, was offset by a smaller number of stations in the franchise countries due to the reorganisation of some markets. The number of rental offices in Germany as per the end of June 2015 increased to 507 (31 December 2014: 483 stations).
In the first six months of 2015 Sixt continued to drive forward with its expansion in the United States, the world's biggest rental market. As per 30 June 2015 the number of stations had gone up to 61 compared to 50 at the end of 2014. Another 20 stations are being planned for the end of the current fiscal year.
The average number of vehicles in the Vehicle Rental Business Unit (in Germany and abroad, excluding franchisees) for the first six months of the year came to around 91,200 vehicles, an increase of 15.2% against the average figure for the first six months of 2014 (79,200 vehicles). The increase reflects the substantially stronger demand as well as the growth outside of Germany.
The Business Unit's rental revenue increased by 20.8% in the first six months of 2015 to EUR 613.4 million (H1 2014: EUR 507.7 million). The main driver of this growth was the foreign operations sector, which climbed 36.3% to EUR 286.7 million (H1 2014: EUR 210.4 million). In all the large rental markets, such as the USA, France, Spain and the UK, Sixt continued to record double-digit growth rates. In Germany Sixt's vehicle rental business benefited from invigorated sales activities and the more friendly economic climate overall. Therefore, rental revenues climbed by 9.9% to EUR 326.7 million (H1 2014: EUR 297.3 million). All in all the Vehicle Rental Business Unit generated revenue increases of 21.8% during the first six months, reaching EUR 676.1 million (H1 2014: EUR 555.3 million).
DriveNow, the premium carsharing joint venture operated together with the BMW, continued its strong growth during the first half of the year. From the start of the year onwards it increased the number of registered users by 70,000 to around 460,000 as per 30 June 2015, and nearly 420,000 of these were users in Germany. This makes DriveNow the market leader among the free floating providers within Germany.
The Business Unit's EBT was EUR 60.7 million, which represented – due to the additional expenditures – only a slight rise of 1.2% compared to last year's figure of EUR 60.0 million.
Sixt Leasing AG, which bundles together all of the Sixt Group's activities in fleet leasing, online retail leasing and fleet management, is one of Germany's leading bank and vendor-neutral leasing companies. The focus of business activities is on fleet management and full-service leasing for corporate and business clients. This covers a wealth of further services alongside the classic finance function. One segment gaining more and more importance is the online platform www.sixt-neuwagen.de, over which leasing financing is offered to private and commercial customers alike. These are target groups that are increasingly looking for alternatives to owning a car. Since 7 May 2015 the share of Sixt Leasing AG has been traded on the regulated market (prime standard) of the Frankfurt Stock Exchange.
As per the middle of the year the Business Unit’s total number of leases inside and outside Germany (excluding franchisees) was around 91,200 contracts. The decline from the figure recorded as per 30 June 2014 (96,200 contracts) was mainly due to the developments in the Fleet Management segment, as the second quarter of 2015 no longer included a key account with around 7,400 contracts. As had been duly communicated before, Sixt Leasing had not prolonged the agreement with that key account due to its insufficient profitability. However, the discontinuation of this customer relationship has had a positive influence on the profitability of the Fleet Management business. The contract portfolio of the Online Retail business segment recorded ongoing dynamic growth during the first half of the year.
Leasing revenue rose 2.8% during the first six months of 2015 to EUR 210.8 million (H1 2014: EUR 204.9 million). The sale of used leasing vehicles in the first half of 2015 generated revenue of EUR 113.1 million (H1 2014: EUR 61.0 million). This significant gain of 85.3% is essentially the result of the expansion of the contract portfolio over the course of the last few years. The end of the leasing contract leads to correspondingly more vehicle returns, and these vehicles come in with a certain time lag. The Leasing segment's total revenues for the first six months of the year came to EUR 323.9 million, an increase of 21.8% against the same period last year (H1 2014: EUR 265.9 million).
EBT for the first half of 2015 shot up by 43.0% from EUR 9.6 million to EUR 13.7 million. The strong increase is due to the growing business volume as well as improvements in the margins of the contract portfolio and more advantageous refinancing costs.
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