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05.11.2015 17:55:00
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Europcar Groupe: Third Quarter Results for 2015
Regulatory News:
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 November 4, 2015.
Europcar (Euronext Paris: EUCAR) publishes today its third quarter results for 2015.
Philippe Germond, Chairman of the Management Board of Europcar Groupe commented:
"Europcar has achieved a strong third quarter, with a solid organic total revenues growth of 4.2% compared to Q3 2014 and a high EBITDA margin, in line with our commitment to generate a steady and profitable growth. The performance achieved in Q3 combined with the acceleration of our Transformation Plan, Fast Lane, enables us to upgrade the guidance we have committed to previously. Thanks to the success of the IPO, we have now the capability to accelerate our strategy deployment on the fast-growing mobility market while focusing on top line growth and offer differentiation. In this framework, the appointment of a Chief Customer Journey Officer is a key step in our customer strategy. ”
| All data in €m | Q3 2015 | Q3 2014 | Change |
Change at constant currency4 |
||||
| Rental Days volume (in million) | 17.8 | 16.5 | 7.6% | |||||
| Average fleet size ('000 vehicles) | 242.8 | 225.4 | 7.7% | |||||
| Revenues | 692.6 | 646.2 | 7.2% | 5.2% | ||||
| Adjusted Corporate EBITDA | 154.2 | 138.6 | 11.3% | 9.5% | ||||
| Adjusted Corporate EBITDA Margin | 22.3% | 21.4% | +0.9 pt | |||||
| Last Twelve Months Adjusted Corporate EBITDA | 247.1 | 197.0 | 25.5% | |||||
| LTM Adjusted Corporate EBITDA Margin | 11.7% | 10.1% | +1.6 pt | |||||
| Net Income IFRS | 99.4 | 45.1 | 120.7% | |||||
| Corporate Net Debt at the end of the period | 152.0 | |||||||
____________________
1 Rental revenue corresponds to income from vehicle rentals
net of discounts and rebates. The total revenue includes in addition to
rental revenue, other revenue associated with car rental (such as
petrol), and royalties received from Europcar franchisees.
2
Adjusted Corporate EBITDA is defined as Recurring Operating Income
before depreciation and amortization not related to the fleet, and after
deduction of the interest expense on certain liabilities related to
rental fleet financing. This indicator includes in particular all the
costs associated with the fleet.
3 At constant Exchange
rate.
4 UK pound and Australian dollar.
Highlights
In addition of its solid financial results, Europcar pursues the deployment of its transformation program, Fast Lane. In this framework, leaning on the capillarity of its network and operational excellence, Europcar strengthened its position in the urban mobility through initiatives, emblematic of Europcar development strategy:
- Reshaping of AutoLiberté, an urban mobility solution based on a subscription model developed on the French market. It represents a real option to a car ownership allowing customers to have a vehicle that meets their needs whenever they want, with specific rates. Enhancing AutoLiberté customers journey, a partnership has been signed with Mobypark, a car park booking platform.
- Integration of electric vehicles in Europcar fleet to provide its customers with greener mobility solutions, especially in urban area. Some examples of recent initiatives: integration of Bluecars in Paris, Nissan LEAF cars in Birmingham and the development of a new electric car sharing in Malaga (Spain).
Furthermore, in order to strengthen and accelerate its Customer Journey strategy, Europcar has decided to appoint Jan Löning, as Chief Customer Journey Officer. Jan has a solid experience particularly in digital and retail companies like Avis or Fnac.com. He will notably dedicate his skills to enhance and differentiate the customer experience to strengthen the loyalty of Europcar customers and expand the customer portfolio.
Q3 performance review
Revenues
Total revenues are at €692.6 million in Q3 2015, up 4.2%5 compared to Q3 2014 on an organic basis while rental revenue is up 6.1% at constant exchange rate, mainly supported by the increase in the number of Rental Days.
The Number of Rental Days reached 17.8 million in Q3 2015, representing an increase of 7.6% compared to Q3 2014, all countries increasing. It reflects a strong demand on the leisure segments for Europcar brand on all distribution channels and by the accelerated deployment of InterRent, Europcar low cost brand. The business segment enjoyed in the meantime an increase in volumes, in particular for SME and vehicle replacement, in line with our profitable sales growth strategy.
Nominal RPD is slightly declining reflecting the diversified business mix sales strategy notably InterRent deployment. In Q3 2015, it decreased by 1.4% at constant exchange rates, as compared to Q3 2014.
Adjusted Corporate EBITDA
Adjusted Corporate EBITDA for Q3 2015 has strongly improved at €154.2 million, compared to €138.6 million in Q3 2014, up 9.5% at constant exchange rates.
This increase mainly reflects Europcar good operational leverage, cost management and fleet financing positive evolution. In particular, Europcar pursued the improvement of its fleet costs per unit and semi fixed costs with efficiency gained on the network while pursuing investment in sales & marketing to sustain profitable growth.
Last twelve month Adjusted Corporate EBITDA reached €247.1 million representing a margin of 11.7% showing a steady improvement quarter after quarter.
Net Profit & Loss
The net income amounted to €99.4 million in Q3 2015 compared with €45.1 million in Q3 2014. This increase reflects the growth of the Adjusted Corporate EBITDA and the improvement of the financing conditions following the reshape of the capital structure. In Q3 2014, the net income was also impacted by non-recurring costs associated with Fast Lane program and fleet refinancing.
Debt management
Corporate net debt decreases to €152 million as of September 30, 2015 (vs. €581 million as of December 31, 2014) as a result of the reshape of the capital structure following the IPO. The fleet debt was €3,613 million as of September 30, 2015 vs. €3,274 million in September 30, 2014. This increase reflects the higher fleet volume to sustain the growth of the operation and the evolution of the mix of the vehicles.
___________________
5 At constant exchange rate and excluding EuropHall, one of our French franchisee, acquired in Q4 2014. As a result, this company has been fully consolidated only for two months in 2014. On a standalone basis, EuropHall revenue amounted to c. €23 million for the full year 2014.
Guidance
Upgraded 2015 guidance
In regards with the year to date performance, Europcar upgrades its 2015 guidance:
- Organic growth of total revenues6 in the high end of the 3% to 5% bracket previously provided
- Adjusted corporate EBITDA slightly above €250 million versus around €245 million
- Pro forma net income7 close to €130 million versus around €125 million
- Corporate Net Debt / Adjusted Corporate EBITDA ratio below 1 x at 2015 end – before any acquisition
________________
6 Based on the current petrol price.
7 Net
income excluding exceptional items (operational and financial), before
associates, and adjusting financial expenses pro-forma for the full year
effect of the repayment of the €324m bond, refinancing of the €400m bond
through the issuance of the €475m senior notes due 2022 at an issue
price of 99.289% and a coupon of 5.75%, and refinancing of the RCF and
SARF facility at improved terms.
***
About Europcar
Europcar is one of the leading mobility players in Europe. Present in over 140 countries, the Groupe provides customers with one of the largest vehicle rental networks through its own operators, franchisees and partnerships. Europcar Group operates worldwide its own brands Europcar® and InterRent®, which is its low cost brand. The groupe puts customers at the heart of its mission whether it is innovation or service. All the employees of the group are committed to delivering customer satisfaction. Europcar is actively promoting Corporate and Environmental social responsibility. Europcar has been awarded again in 2014 for the 6th consecutive year, by the World Travel Awards (« World's Leading Green Transport Solution Company »). Europcar was also designed « Leading Car Rental Company » in Europe, Africa, Middle-East and Australia.
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.
Please visit our new financial website: finance.europcar-group.com
Appendix 1: Management P&L Q3 and Q3 YTD
| Q3 2015 | Q3 2014 | All data in €m | 9M 2015 | 9M 2014 | ||||
| 692.6 | 646.2 | Total revenue | 1,653.1 | 1,515.2 | ||||
| -142.9 | -131.3 | Fleet holding costs, excluding estimated interest included in operating leases | -372.0 | -336.0 | ||||
| -221.9 | -212.2 | Fleet operating, rental and revenue related costs | -561.5 | -524.0 | ||||
| -89.4 | -81.1 | Personnel costs | -258.6 | -236.4 | ||||
| -55.5 | -49.7 | Network and head office overhead | -163.7 | -146.2 | ||||
| 6.2 | 2.5 | Other income and expense | 8.3 | 6.8 | ||||
| -138.7 | -128.3 | Personnel costs, network and head office overhead, IT and other | -413.9 | -375.8 | ||||
| -18.0 | -19.7 | Net fleet financing expense | -48.8 | -58.1 | ||||
| -16.8 | -16.1 | Estimated interest included in operating leases | -42.5 | -41.2 | ||||
| -34.8 | -35.8 | Fleet financing expenses, including estimated interest included in operating leases | -91.3 | -99.3 | ||||
| 154.2 | 138.6 | Adjusted Corporate EBITDA | 214.4 | 180.1 | ||||
| 22.3% | 21.4% | Margin | 13.0% | 11.9% | ||||
| -8.1 | -7.5 | Depreciation – excluding vehicle fleet | -24.1 | -23.2 | ||||
| -0.8 | -33.2 | Other operating income and expenses | -56.6 | -47.9 | ||||
| -10.7 | -34.6 | Other financing income and expense not related to the fleet | -150.0 | -124.5 | ||||
| 134.6 | 63.3 | Profit/loss before tax | -16.3 | -15.5 | ||||
| -33.3 | -17.3 | Income tax | -35.1 | -16.4 | ||||
| -1.9 | -0.9 | Share of profit/(loss) of associates | -6.0 | -5.2 | ||||
| 99.4 | 45.1 | Net profit/(loss) | -57.4 | -37.0 | ||||
Appendix 2: IFRS P&L Q3 and Q3 YTD
| Q3 2015 | Q3 2014 | All data in €m | 9M 2015 | 9M 2014 | ||||
| 692.6 | 646.2 | Total revenue | 1,653.1 | 1,515.2 | ||||
| -159.7 | -147.4 | Fleet holding costs | -414.5 | -377.2 | ||||
| -221.9 | -212.2 | Fleet operating, rental and revenue related costs | -561.5 | -524.0 | ||||
| -89.4 | -81.1 | Personnel costs | -258.6 | -236.4 | ||||
| -55.5 | -49.7 | Network and head office overhead | -163.7 | -146.2 | ||||
| 6.2 | 2.5 | Other income and expense | 8.3 | 6.8 | ||||
| -8.1 | -7.5 | Depreciation – excluding vehicle fleet | -24.1 | -23.2 | ||||
| 164.2 | 150.7 | Recurring operating income | 239.1 | 215.0 | ||||
| -0.8 | -33.2 | Other non-recurring income and expenses | -56.6 | -47.9 | ||||
| 163.4 | 117.5 | Operating income | 182.4 | 167.1 | ||||
| -28.7 | -54.3 | Net financing costs | -198.8 | -182.6 | ||||
| 134.6 | 63.3 | Profit/(loss) before tax | -16.3 | -15.5 | ||||
| -33.3 | -17.3 | Income tax | -35.1 | -16.4 | ||||
| -1.9 | -0.9 | Share of profit/(loss) of associates | -6.0 | -5.2 | ||||
| 99.4 | 45.1 | Net profit/(loss) | -57.4 | -37.0 | ||||
| 99.5 | 45.5 | Net profit/(loss) attributable to Europcar owners | -57.3 | -38.0 | ||||
Q3 IFRS P&L presented for convenience purposes, not prepared on a standalone basis but obtained by difference between Q3 YTD P&L and H1 P&L.
Appendix 3: Reconciliation Q3 and Q3 YTD
| Q3 2015 | Q3 2014 | All data in €m | 9M 2015 | 9M 2014 | ||||
| 305.8 | 281.2 | Adjusted Consolidated EBITDA | 606.5 | 550.8 | ||||
| -53.9 | -49.5 | Fleet depreciation IFRS | -139.7 | -124.9 | ||||
| -62.9 | -57.3 | Fleet depreciation included in operating lease rents | -161.2 | -146.5 | ||||
| -116.7 | -106.8 | Total Fleet depreciation | -300.8 | -271.4 | ||||
| -16.8 | -16.1 | Interest expense related to fleet operating leases (estimated) | -42.5 | -41.2 | ||||
| -13.9 | -16.2 | Net fleet financing expenses excluding swaps | -37.7 | -49.6 | ||||
| -4.1 | -3.5 | Fleet swap expenses | -11.1 | -8.5 | ||||
| -34.8 | -35.8 | Total Fleet financing | -91.3 | -99.3 | ||||
| 154.2 | 138.6 | Adjusted Corporate EBITDA | 214.4 | 180.1 | ||||
| -8.1 | -7.5 | Amortization, depreciation and impairment expense | -24.1 | -23.2 | ||||
| 18.0 | 19.7 | Reversal of Net fleet financing expenses | 48.8 | 58.1 | ||||
| 16.8 | 16.1 | Reversal of Interest expense related to fleet operating leases (estimated) | 42.5 | 41.2 | ||||
| 180.9 | 166.9 | Adjusted recurring operating income | 281.6 | 256.2 | ||||
| -16.8 | -16.1 | Interest expense related to fleet operating leases (estimated) | -42.5 | -41.2 | ||||
| 164.2 | 150.7 | Recurring operating income | 239.1 | 215.0 | ||||
Annexe 4: Balance sheet
| In € thousands | Sept. 30, 2015 | Dec. 31, 2014 | ||
| ASSETS | ||||
| Goodwill | 450.697 | 449.389 | ||
| Intangible assets | 715.938 | 721.732 | ||
| Property, plant and equipment | 85.514 | 88.204 | ||
| Equity-accounted investments | 17.423 | 17.323 | ||
| Other non-current financial assets | 58.087 | 38.934 | ||
| Deferred tax assets | 38.348 | 47.395 | ||
| Total non-current assets | 1,366,007 | 1,362,977 | ||
| Inventories | 18.439 | 16.141 | ||
| Rental fleet related receivables | 2,709,723 | 1,932,758 | ||
| Trade and other receivables | 386.417 | 325.912 | ||
| Current financial assets | 36.453 | 49.477 | ||
| Current tax assets | 32.957 | 33.347 | ||
| Restricted cash | 97.979 | 81.795 | ||
| Cash and cash equivalents | 172.006 | 144.037 | ||
| Total current assets | 3,453,974 | 2,583,467 | ||
| Total assets | 4,819,981 | 3,946,444 | ||
| Equity | ||||
| Share capital | 143.098 | 446.383 | ||
| Share premium | 766.626 | 452.978 | ||
| Reserves | (81.907) | (77.926) | ||
| Retained earnings (losses) | (271.579) | (664.250) | ||
| Total equity attributable to the owners of ECG | 556.238 | 157.185 | ||
| Non-controlling interests | 880 | 950 | ||
| Total equity | 557.118 | 158.135 | ||
| LIABILITIES | ||||
| Financial liabilities | 800.399 | 1,043,069 | ||
| Non-current financial instruments | 46.890 | 41.928 | ||
| Employee benefit liabilities | 116.446 | 124.759 | ||
| Non-current provisions | 55.105 | 10.114 | ||
| Deferred tax liabilities | 129.237 | 131.005 | ||
| Other non-current liabilities | 321 | 365 | ||
| Total non-current liabilities | 1,148,398 | 1,351,240 | ||
| Current portion of financial liabilities | 1,613,953 | 1,127,545 | ||
| Employee benefits | 5.845 | 2.744 | ||
| Current tax liabilities | 34.127 | 34.560 | ||
| Rental fleet related payables | 737.616 | 581.957 | ||
| Trade payables and other liabilities | 501.194 | 449.866 | ||
| Current provisions | 221.730 | 240.397 | ||
| Total current liabilities | 3,114,465 | 2,437,069 | ||
| Total liabilities | 4,262,863 | 3,788,309 | ||
| Total equity and liabilities | 4,819,981 | 3,946,444 | ||
Appendix 5: IFRS Cash Flow Q3 YTD
| In € thousands | 9 months 2015 | 9 months 2014 | ||
| Profit/(loss) before tax | (16.381) | (15.454) | ||
| Depreciation and impairment charge on property, plant and equipment | 10.694 | 9.384 | ||
| Amortization and impairment charge on intangible assets | 13.236 | 17.811 | ||
| Changes in provisions and employee benefits | 22.546 | 11.768 | ||
| Profit/(loss) on disposal of assets | (397) | (1.401) | ||
| Total net interest costs | 103.470 | 122.766 | ||
| Redemption premium | 56.010 | |||
| Amortization of transaction costs | 36.894 | 23.627 | ||
| Amortization of bond issue premiums | (1.415) | |||
| Other non-cash items | 617 | 10.010 | ||
| Financing costs | 196.991 | 154.988 | ||
| Net cash from operation before changes in working capital | 226.689 | 177.096 | ||
| Changes in rental fleet | (529.034) | (378.835) | ||
| Changes in fleet working capital | (88.046) | (173.075) | ||
| Changes in non-fleet working capital | (5.412) | 22.858 | ||
| Cash generated from operations | (395.803) | (351.956) | ||
| Income taxes received/paid | (30.245) | (14.113) | ||
| Net interest paid | (108.350) | (112.931) | ||
| Net cash generated from (used by) operating activities | (534.398) | (479.000) | ||
| Other investments and loans | 202 | |||
| Acquisition of intangible assets and property, plant and equipment | (20.866) | (18.144) | ||
| Proceeds from disposal of intangible assets and property, plant and equipment | 6.079 | 3.273 | ||
| Acquisition of financial assets | (5.917) | (11.169) | ||
| Acquisition of subsidiaries, net of cash acquired | (9.163) | (2.250) | ||
| Dividends received from associates | (16) | |||
| Net cash used by investing activities | (29.867) | (28.104) | ||
| Increase in share capital net of fees paid | 460.655 | |||
| New senior subordinated notes | 474.517 | 350.000 | ||
| Redemption of senior subordinated notes | (780.010) | (350.000) | ||
| Change in senior fleet financing liability | 318.994 | 316.504 | ||
| Change in other fleet financing liabilities | 79.584 | 170.394 | ||
| Payment of transaction costs | (14.357) | (8.186) | ||
| Other new borrowings | 36.068 | |||
| Repayment of other borrowings | (99) | |||
| Net cash generated from (used by) financing activities | 575.451 | 478.613 | ||
| Cash and cash equivalents at end of period | 216.882 | 241.022 | ||
| Cash and cash equivalent at beginning of period | 206.317 | 267.038 | ||
| Effect of foreign exchange differences | (621) | 2.475 | ||
| Net increase/(decrease) in cash and cash equivalents after effect of foreign exchange differences | 11.186 | (28.491) | ||
Annexe 6: Capital structure evolution
| All data in €m |
Sept. 30, 2015 |
Dec. 31, 2014 |
||||
| Corporate IN BS | Gross Corporate debt | 384 | 773 | |||
| Cash & short term investments | -232 | -192 | ||||
| Total Corporate net debt | 152 | 581 | ||||
| Fleet IN BS | Gross financial fleet debt | 2,029 | 1,396 | |||
| Fleet cash & cash equivalents and other | -123 | -113 | ||||
| Fleet net debt | 1,906 | 1,283 | ||||
| Lease OFF BS | Debt equivalent of fleet operating leases | 1,707 | 1,284 | |||
| Conso. | Total fleet net debt (incl. op leases) | 3,613 | 2,567 | |||
| Total consolidated net debt | 3,765 | 3,148 | ||||
| average | Average Fleet net debt for Q3 YTD | |||||
| In balance sheet | 1,561 | |||||
| Off Balance Sheet | 1,583 | |||||
| Total Fleet net debt | 3,144 | |||||
| LTV | Indebtedness at the testing date | 1,228 | ||||
| Total value of the net assets | 1,298 | |||||
| Loan to value ratio | 94.6% | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151105006283/en/
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