Europcar Mobility Group: Full Year 2019 Results

2019 > Revised Guidance Achieved in a Challenging Environment

2020 > Re-inforced Focus on Efficiency and Customer Value Creation, Powered by Digitization

PARIS--()--Regulatory News:

Europcar Mobility Group (Paris:EUCAR): 

2019 KEY FACTS

  • Challenging environment at the end of Q3 2019 and in Q4 2019
  • Revenue build-up and margin under pressure, leading to acceleration of efficiency programs
  • Strong growth momentum in Urban Mobility
  • Ramp-up of SHIFT 2023 strategic roadmap
  • Last step of our transformational M&A program: acquisition of Fox-Rent-A-Car

2019 KEY FINANCIALS1

  • Revenue at €3,022m, up +0.9% on an organic basis and up +3.2% on a reported basis
  • Adjusted Corporate EBITDA in line with guidance revision published in October 2019
    • €310m excluding Urban Mobility / €278m including Urban Mobility
  • Group Net Income at €38m (versus €71m excluding the sale of Car2Go in 2018)
  • Dividend payout ratio of 34%
  • Corporate Operating Cash Flow at €118m, i.e. 42% free cash-flow conversion
  • Corporate Net Debt at €880m
    • 3.0x leverage before Fox acquisition, 3.2x leverage after Fox acquisition

Caroline Parot, CEO of Europcar Mobility Group, declared: "The second half of 2019 was challenging, with the European economic slowdown and the Brexit both impacting our corporate and leisure businesses. This led us to accelerate the roll-out of our efficiency and standardization programs, so as to adapt our cost-base. Finally, in this soft environment characterized by weaker-than-expected demand and pricing pressure, we achieved our revised guidance.

In 2020, the environment will remain complex, with macro uncertainties in Europe, as well as challenging times when it comes to environmental issues or health major events. In this regard, while having no direct operations in the APAC region, we are closely monitoring the evolution of the outbreak situation in our industry and in our company, from an employees and business perspective.

At the same time, 2020 being a key milestone on our way to our 2023 ambitions, we will strongly focus on quality of revenue, margin improvement and cash flow generation. All this with continued financial discipline, in line with the targets of our efficiency programs. We also ambition to deliver strong double-digit growth in our Urban Mobility business, while significantly reducing its losses. Finally, we will pursue at a fast pace the digitization of our ONE Group framework, allowing us to create additional value for our customers.

Thanks to our unique and central positioning in the mobility ecosystem, we are confident in the relevance of our SHIFT 2023 strategic roadmap, which aims to enable us to capture further growth, seize market opportunities in front of very promising long-term mobility trends and create greater value for our customers, while progressively rebalancing our revenue streams, thus reducing the impact of seasonality and volatility on our business.”

___________________

1 Before IFRS 16

2020 OUTLOOK

  • Cautious view on the macro and leisure environment
  • Strong focus on margin improvement, through efficiency and standardization measures
  • Priority on cash conversion and further debt reduction
  • Continued investments in digital and group’s transformation, to enhance customer value
  • Strong double-digit revenue growth for Urban Mobility BU & path to profitability

2020 GUIDANCE (including Urban Mobility)

  • Revenues: limited organic growth, selective on quality
  • Adjusted Corporate EBITDA for the full perimeter2 in the range of €300-310m
  • Non-recurring expenses of around €50m
  • Strong increase in Net Income,
  • Increase in Corporate Operating Cash flow generation leading to a reduction in net debt, & a debt deleveraging by 0.4x

Europcar Mobility Group invites you to its FY 2019 Results Conference Call on: Tuesday, Feb. 25, at 6:00pm CET

Dial-in Access telephone numbers: France: +33 (0)1 76 77 22 57
Germany: +49 (0) 69 2222 2018 / UK: +44 (0)330 336 9411 : USA: +1 323-794-2094
Confirmation Code: 1287621

Webcast: https://globalmeet.webcasts.com/starthere.jsp?ei=1281479&tp_key=0b88f3a96c

___________________

2 Including acquisitions realized in 2019 and Urban Mobility

2019 financial results

Figures for 2019 are presented before IFRS 16 application in comments and tables unless it is explicitly indicated. Reported figures for the fourth quarter and full year are presented in Appendix.

Application of IFRS 16 as from January 1, 2019:

  • Europcar Mobility Group is using the simplified retrospective method for 2018 financial accounts, according to which there is no restatement of comparative periods
  • All fleet lease contracts are accounted for in the balance sheet with a “right to use the asset” and a corresponding debt for the lease payment obligation
  • The impact of IFRS 16 are detailed in Appendix

Management Account presentation:

2019 figures are presented before and after Urban Mobility Corporate EBITDA performance.

2020 and onwards: all group’s metrics are presented including Urban Mobility Business Unit performance.

Full year reported performance

All data in €m, except if mentioned

2019

2018

Change 

Number of rental days (million)

91.0

87.7

3.7%

Average Fleet (thousand)

328.0

315.9

3.8%

Fleet Utilization rate 

76.0%

76.1%

 

Total revenues 

3,022

2,929

3.2%

Adjusted Corporate EBITDA

278

327

-15.0%

Adjusted Corporate EBITDA Margin

9.2%

11.2%

 

Adjusted Corporate EBITDA Excluding Urban Mobility

310

350

-11.4%

Adjusted Corporate EBITDA Margin Excluding Urban Mobility

10.4%

12.1%

 

 

 

 

 

Operating Income

240

369

-35%

 of w/h proceed from the sale of Car2Go

 

69

 

Corporate Free Cash Flow 

118

134.6

-12%

Corporate Net Debt at end of the period

880

795

 

Corporate net debt / EBITDA ratio (x) - Reported

3.2

2.4

 

Corporate net debt / EBITDA ratio (x) - Excluding Fox

3.0

 

 

PROFIT & LOSS IN 2019

1. Activity & Margin after variable costs in 2019

The Group recorded a +3.2% revenue growth to €3,022m in 2019.

At constant perimeter and exchange rate, revenue increased by +0.9% (i.e. excluding franchisees in Denmark, Norway and Fox acquired in 20193) with a fourth quarter up +2.2%. The growth in 2019 breaks down into +0.5% for the BU Cars, +5.4% for Vans & Trucks, -3.9% for Low Cost, +36.8% for Urban Mobility.

While the BUs (Business Unit) experienced different trends, the Group faced, as indicated in the third quarter, a lower-than-expected volumes demand during the peak season in September on the back of the slowdown in the global economic environment, particularly exacerbated in the UK and Ireland due to uncertainties around the Brexit. This revenue build up evolution led to an increased pricing pressure, notably in September onwards.

In the BU Cars, Corporate business revenue were down -2.5% in 2019 with notably travel freeze from Large Corporate customers in the last part of the year, in spite of a solid performance for small and medium sized companies. Europcar Mobility Group pro-actively re-allocated part of its fleet to the Leisure segment in order to offset the low volumes from Corporate customers. This resulted in a positive +3.4% revenue growth but at the detriment of pricing.

The Vans & Trucks BU enjoyed a sound revenue growth (+5.4%) and the Urban Mobility BU posted an impressive +36.8% increase in revenue with an acceleration over the fourth quarter (+42%).

Group’s utilization rate and FCPU (fleet cost per unit) remained stable in 2019 versus 2018 at 76.0% and €229 respectively.

On constant exchange rates and excluding Urban Mobility and Fox, margin after variable costs for the BUs amounted to €1,224m, recording a limited -1% decline versus 2018, leading to 40.5% margin. This is driven in

H2 2019 by a rise in fleet costs that mainly reflects the increase in fleet size (+2.9% on average) as well as an upgraded fleet mix, more CO2 emission taxation and some adverse damage effects, offsetting the good momentum of the first half 2019. Also, customer’s acquisition mechanically increased as the Group re-allocated part of its fleet to the Leisure segment.

Focus on BUs activity and Margin after Variable Costs

BU Cars: earnings impacted by economic conditions at the end of Q3 2019

CARS

Q4 2019

Q4 2018

 

FY 2019

FY 2018

 

 

 

 

 

 

Revenue (€m)

488

468

 

2,157

2,121

Variation at constant perimeter (%)

2.4%

 

 

0.5%

 

Variation on reported revenue (%)

4.3%

 

 

1.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin after variable costs (€m)

186

200

 

892

910

Margin after variable costs (%)

38.0%

42.7%

 

41.4%

42.9%

* Q4 2018 PF revenue          

_____________________

3 Excluding Fox consolidated since November 1st, 2019 (€37M revenue) and franchisees in Denmark and Norway acquired consolidated on July 1st, 2019 (€29M revenue)

On a reported basis, BU Cars generated €2,157m revenue in 2019, up +1.7%. At constant exchange rates and perimeter, revenues are up +0.5% for the full year, including +2.4% over the fourth quarter.

At constant perimeter, the BU reported a +1.1% increase in rental days and a -0.3% decline in RPD in 2019. RPD includes a positive +1.1% growth in the fourth quarter.

In spite of a good performance of small and medium-sized companies, the B2B segment (down -2.5% in rental revenue in 2019) suffered during the year from a slowdown in the Large customers segment, which revenues recorded a double-digit decline due to:

  • The voluntary and beneficial action of exiting few low-profitable large corporate accounts in the UK and Germany, in order to protect profitability
  • The Brexit impact in the UK / Ireland;
  • The travel freeze from end-August in key accounts in several countries (UK, Germany and France in particular)

The Group promptly reacted to this environment by shifting part of the fleet allocated to the Corporate to the Leisure segment. This resulted in a positive impact on the fleet utilization rate that improved overall by 1 point to 76.1% over the year (proforma basis) for the BU.

Rental revenue in Leisure segment were up +3.4% in 2019 with a good December, particularly in France, Germany, Italy and Australia, but with RPD down -0.9% during the year.

Europcar Mobility Group reported a margin after variable costs of €892m for the BU Cars in 2019, down c.-2% versus 2018 and -3.4% on constant perimeter: the BU was impacted by low Corporate volumes (travel freeze), a weaker-than-expected Leisure demand in some markets (increased acquisition costs from the indirect channel) and higher fleet costs per unit (upgraded fleet mix to serve customer demand, and higher tax on vehicles) not being passed to customers within the soft pricing environment.

Vans & Trucks: a positive performance with a solid demand but with pricing down

VANS & TRUCKS

Q4 2019

Q4 2018

 

FY 2019

FY 2018

 

 

 

 

 

 

Revenue (€m)

102

93

 

366

344

Variation on reported revenue (%)

9.9%

 

 

6.2%

 

 

 

 

 

 

 

Margin after variable costs (€m)

42

42

 

142

139

Margin after variable costs (%)

40.7%

44.9%

 

38.9%

40.4%

On a reported basis, the Group registered a good performance with a +6.2% total revenue growth to €366m in 2019 across most countries, France, Spain, Ireland, Portugal and Germany.

In rental revenue, the Group reported an increase of +9.5% in rental days and a -3.5% decrease in RPD, mainly related to longer duration and mix effect between corporate and leisure segments. The strategy towards the Corporate / SME segment continues to pay off through longer rental duration, and the deployment of new “supersites” in main countries: the latter recorded a double-digit revenue growth in 2019, representing 18% of the Vans & Trucks revenue.

In 2019, the Group reported a +2% increase in margin after variable costs to €142m, with some higher damages and maintenance in the fleet operating costs.

Low Cost: a good earnings performance in spite of a strong pricing pressure

The BU Low Cost includes Fox, consolidated for 2 months in 2019

LOW COST

Q4 2019

Q4 2018

 

FY 2019

FY 2018

 

 

 

 

 

 

Revenue (€m)

94

63

 

411

389

Variation on reported revenue (%)

49.8%

 

 

5.5%

 

Variation on constant perimeter revenue (%)

-9.4%

 

 

-3.1%

 

 

 

 

 

 

 

Margin after variable costs (€m)

26

9

 

156

142

Margin after variable costs (%)

27.4%

14.6%

 

38.0%

36.6%

On a reported basis, the Group recorded a +5.5% increase in revenue to €411m and -3.1% decline at constant exchange rates and perimeter, due to a particularly fierce competitive environment in Spain and the UK that impacted demand and pricing. Performance in France, Portugal, Croatia and Turkey was good. Overall rental days increased by +1.9% while RPD was down -3.5% at constant perimeter.

After a year of integration, Goldcar made significant progress on its NPS, turning positive in 2019 for the first time.

Europcar Mobility Group adapted quickly to the environment with a tight cost control. Hence Margin after variable costs were up +0.8% at constant exchange rate and perimeter over the year – and up +11% to €156m at current perimeter. The implementation of synergy programs combined with a lean cost structure allow the BU Low Cost to generate the highest profitability of the Group.

Urban Mobility: A very positive year with strong revenue growth and positive pricing power. Growth investments in line with guidance

URBAN MOBILITY

Q4 2019

Q4 2018

 

FY 2019

FY 2018

 

 

 

 

 

 

Revenue (€m)

14

10

 

49

36

Variation on reported revenue (%)

44.0%

 

 

36.8%

 

Developed in 2017, Urban Mobility BU operates round trip car sharing for individuals and corporate, B2B ride hailing and PHV (Private Hire Vehicle). The BU recorded a strong growth of +36.8% to €49m in 2019 (and +44% in the fourth quarter), with each of the three segments – Car sharing, Ride hailing and PHV - contributing to this solid performance.

The main activity, car sharing business, reported the strongest revenue growth of the BU in 2019 (over +50%): Ubeeqo recorded an increase in repeat bookings with a positive pricing power while scaling up its fleet throughout the year (4,200 vehicles end of 2019). Already 250 000 customers were registered as monthly active customers per year. This validates the model as an attractive alternative to car ownership matching users and cities expectations.

Given the nature of the business, related to urban lifestyle, new attitudes of consumption and peculiarities in each geographic area, Ubeeqo has originally adopted a flexible approach through a progressive development of its offer in selective cities. The Group operates mainly today in 8 cities in Europe (Dublin, Cork, Paris, London, Madrid, Hamburg, Barcelona and Milan). Ubeeqo won Paris in 2019, with a contract signed with the Paris City hall, and currently operates close to 1,100 vehicles. The BU closed B2C operations in Berlin in 2019 given the fierce competitive environment to prioritize Corporate car sharing strong development.

As part of its ramp-up strategy, Ubeeqo is already profitable in 2 cities and is working to improve its path to profitability at BU level over the next year, notably with the development of a franchisee model. On the ride-hailing part, the UK-based Brunel activity suffered from the B2B depressed environment but delivered a double-digit revenue growth versus 2018 (+19%). Since 2019, Urban Mobility Business Unit also addresses the PHV market (Private Hire Vehicle - rent to a Uber-like chauffeur) partnering with major ride-hailers as a fleet provider and manager. This activity enjoyed a strong momentum over the last 12 month with c.2,000 vehicles on rent in the UK and France, confirming a large growth potential both in Europe and the US markets for the coming years.

With all the above, the BU is well on track to reduce substantially its losses by €10m at Corporate EBITDA in 2020.

2. From Adjusted Corporate EBITDA to net income in 2019

€m

FY 2019

FY 2018

% change

% change

at constant

perimeter

 

 

 

 

 

Revenue

3,022

2,929

3.2%

0.9%

% of volume growth

 

 

3.7%

2.2%

 

 

 

 

 

Margin after variable costs

1,224

1,231

-0.6%

-2.9%

In % of revenue

40.5%

42.0%

 

 

 

 

 

 

 

Network

(464)

(428)

8.5%

5.1%

 In % of revenue

15.4%

14.6%

 

 

HQ Costs

(361)

(355)

1.7%

-0.4%

 In % of revenue

11.9%

12.1%

 

 

Fleet financing costs

(120)

(121)

-0.3%

-2.8%

 Financing CPU (In €)

(30)

(32)

-5.1%

-6.0%

 

 

 

 

 

Adjusted Corporate  EBITDA

278

327

-15.0%

-16.1%

In % of revenue

9.2%

11.2%

 

 

 

 

 

 

 

Of w/h Urban Mobility Adj. Corporate EBITDA

-32

-23

38.5%

38.5%

 

 

 

 

 

Adjusted Corporate EBITDA excl. Urban Mobility

310

350

-11.4%

-12.5%

In % of revenue

10.4%

12.1%

 

 

At constant exchange rates and perimeter (i.e. excluding the acquisition of Fox and franchisees in Denmark and Finland), costs below Margin After Variable Costs (MAVC) increased by +1.9% reflecting:

  • Global rental days increase by +3.7%
  • The Group’s network costs increased by +5.1% to €464m in 2019. Beyond increase related to the volumes growth of the business (+3.7% in rental days), this evolution reflects minimum wages increases in some countries and to a lesser extent real-estate inflation and some supersites development for the Vans & Trucks BU.
  • A good control of HQ costs which slightly declined in 2019 at constant perimeter. This reflects the rollout of the HQ 2020 cost reduction programs generated, as planned, €10m of gross savings over the year, offset by salaries increases and further investments in digital.
  • Fleet financing costs have been well under controlled with a -2.8% decrease over the year, benefitting from the 2018 refinancing

As a result of the above, Adjusted Corporate EBITDA (excluding the impact of Urban Mobility) amounted to €310m down -11,4% in 2019 and €278m including Urban Mobility.

Urban Mobility reported Corporate EBITDA of -€32m in 2019 versus -€23m in 2018, reflecting the ramp up in the Paris City contract won in Q2 2019, and some weak performance in the Ride hailing UK perimeter, but with a very good improvement in Q4 with a limited loss of -€5m.

All data in €m

2019

2018

% change

Adj. Corporate EBITDA incl. Urban Mobility

278.3

327.3

-15.0%

Non-fleet D&A

(48.0)

(44.4)

8.2%

Other non-recurring operating income / expenses

(58.2)

(48.1)

 

Proceed from the sale of Car2Go

 

68.5

 

Non-fleet financial expenses

(101.2)

(110.6)

-8.4%

Profit Before Tax

70.8

192.7

-63.2%

Net tax expense

(32.9)

(52.0)

-36.7%

Associates

-

(1.3)

 

Net profit

38.0

139.4

-72.8%

 of which proceed from the sale of Car2Go

 

65.9

 

Financial result

Net financing costs not related to the fleet reduced to €101m in 2019 from €111m in 2018, mostly coming from the refinancing of the Corporate debt (issuance of €450m bonds at 4.0% to replace historical €600m bond at 5.75%) and some positive Foreign Exchange effects.

Non-recurring expenses

The group reported a charge of -€58m for non-recurring items in 2019 compared to -€48m in 2018 (excluding the €68.5m proceed from the sale of Car2Go in 2018). Two third of costs incurred in 2019 were related to the optimization programs on the Group’s network of stations and headquarters. The remaining reflects M&A expenses and exceptional costs spread across countries.

Taxes amounted to €33m in 2019, representing a tax rate of 26% of pretax before non-recurring items compared to 30% in 2018.

Net income

The Group posted a net profit of €38m compared to last year’s net profit of €73.5m in 2018 excluding the impact of the one off gain generated from the sale of the company’s stake in Car2Go and the impact of IFRS16.

CORPORATE FREE CASH FLOW & CORPORATE NET DEBT IN 2019

1. Corporate Operating Cash Flow in 2019

Corporate Operating Cash Flow in 2019 reached €118m versus last year compared with €135m in 2018, leading to cash flow conversion of 42%. The limited decline in Corporate operating cash flow (-€17m) versus last year reflects a strict control of working capital requirements and on the back of a weak performance in Q4 2018: the change in working capital totaled a positive +€2m versus -€31m in 2018. Corporate Operating cash flow includes capex of €75m, €55m of non-recurring items and €30m tax.

2. Corporate Net debt: indebtness ratio at 3.0x before Fox acquisition at December 31, 2019

Corporate net debt reached €880m in 2019. It includes acquisitions for €108m (of which the Group’s Nordic franchisees in Norway and Finland and Fox in the US), cash interest on corporate HY net debt for €53m, positive and reversal of prior year fleet financing impact for €63m (coming from the full integration of Goldcar in the group securitization program notably), share buy-back program for €42m, dividend payment for €39m and transaction costs and non-fleet costs for €33m.

In line with our revised guidance, the Group’s corporate net leverage stood at 3.2x at the end of December 2019 with Fox and c.3.0x before Fox acquisition.

UPDATED OUTLOOK FOR 2020

In 2020, several macro uncertainties in Europe (soft GDP growth, post Brexit economical effects...) will remain while our industry continues to operate with increasing environmental regulations (CO2 emissions taxes, EV expansion...).

Regarding the recent Covid 19 potential outbreak: since the beginning of the year, Europcar Mobility Group is performing a full assessment of its exposure to the virus Covid 19, both from an employees and business perspectives, with a multi- disciplinary team, under the leadership of the Management Board. The Group is not operating directly in the APAC region, to the exception of Australia and New Zealand, currently impacted by lesser tourism flows.

The Group is reviewing daily the development of the outbreak possible expansion and will take all appropriate measures ahead of the peak season accordingly, benefiting from our flexible fleet sourcing model.

The Management is remaining actively focused on the implementation of the Group's strategy: focusing on margin improvement through efficiency measures, pursuing the strong double-digit revenue growth of its Urban Mobility activities with greater costs absorption and continuing Group's investments in digital, to create greater value for customers.

Main points & priorities:

  • Cautious view on the macro and leisure environment
  • Strong focus on margin improvement through efficiency and standardization measures
  • Priority on cash conversion and further debt reduction
  • Continued investments in digital and Group's transformation, to enhance customer value
  • Strong double digit revenue growth for Urban Mobility BU and path to profitability
  • Revenue:
    • Limited organic growth, selective on quality
    • Increased focus on Corporate segment
    • Strong double-digit revenue growth of Urban Mobility
  • Adjusted Corporate EBITDA for the full perimeter4 in the range of €300-310m:
    • A positive but limited contribution of Fox consolidated on 12 months
  • Non-recurring expenses of around €50m
  • Strong increase in net income
  • Increase in Corporate Operating Cash flow generation leading to a reduction in net debt; and a debt deleveraging by 0.4x
  • Payout of 30% of group net income

_____________________________

4 Including acquisitions realised in 2019 and Urban Mobility

Investor Calendar

Q1 2020 results 27 April 2020

AGM 28 April 2020

About Europcar Mobility Group

Europcar Mobility Group is a major player in mobility markets and listed on Euronext Paris.

The mission of Europcar Mobility Group is to be the preferred “Mobility Service Company” by offering alternative attractive solutions to vehicle ownership, with a wide range of mobility-related services: vehicle-rental, chauffeur services, car-sharing, scooter-sharing

Customers’ satisfaction is at the heart of the Group’s mission and all of its employees and this commitment fuels the continuous development of new services.

Europcar Mobility Group operates through multi brands meeting every customer specific needs; its 4 major brands being: Europcar® - the European leader in vehicle rental services, Goldcar® - the most important low-cost car-rental company in Europe, InterRent® – ‘mid-tier’ brand focused on leisure and Ubeeqo® – one of the European leaders in car-sharing (BtoB, BtoC).

Europcar Mobility Group delivers its mobility solutions worldwide through an extensive network in more than 140 countries (including 20 wholly owned subsidiaries in Europe, 2 in Australia and New Zealand, franchises and partners).

Forward-looking statements

This press release includes forward-looking statements based on current beliefs and expectations about future events. Such forward-looking statements may include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and/or expectations with respect to future financial results, events, operations and services and product development, as well as statements, regarding performance or events. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “projects”, “may”, “would”, “should” or the negative of these terms and similar expressions. Forward looking statements are not guarantees of future performance and are subject to inherent risks, uncertainties and assumptions about Europcar Mobility Group 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 Mobility Group’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 materially affect expected results. 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. Other than as required by applicable law, Europcar Mobility Group does not undertake to 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, including without limitation, risks identified in the "Risk factors" of the Annual Registration Document registered by the Autorité des marchés financiers on March 27, 2019 under the number R. 18-020 and also available on the Group's website: www.europcar-group.com. This press release does not contain or constitute an offer or invitation to purchase any securities in France, the United States or any other jurisdiction.

Further details on our website:

www.europcar-mobility-group.com

Appendix 1 – Revenue by business unit and P&L (Management Account)

All data in €m

2019

 

2018

Change

BU Cars

2,157.4

 

2,120.7

1.7%

BU Vans

365.7

 

344.2

6.2%

BU Low Cost

373.4

 

389.1

(4.0)%

FOX

37.2

 

-

 

BU Urban Mobility

49.0

 

35.6

37.4%

BU International Coverage

39.7

 

39.7

0.1%

TOTAL REVENUE

3,022.4

 

2,929.3

3.2%

  Incl. IFRS16 IFRS 16 impact Excl. IFRS16 Excl. IFRS16  
           
All data in €m

 

2019

 

2018

Change

Total revenue

3,022.4

-

3,022.4

2,929.3

3.2%

Fleet holding costs, excluding estimated interest included in operating leases

(755.6)

(1.8)

(753.8)

(707.8)

6.5%

Fleet operating, rental and revenue related costs

(1,006.5)

38.3

(1,044.8)

(990.3)

5.5%

Margin after Variable costs

1,260.3

36.5

1,223.8

1,231.1

(0.6%)

Margin

41.7%

 

40.5%

42.0%

 

Personnel costs

(522.3)

-

(522.3)

(500.3)

4.4%

Network and head office overhead

(240.9)

74.1

(315.0)

(294.3)

7.0%

Other income and expense

12.0

0.0

12.0

11.8

1.9%

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

(751.2)

74.1

(825.3)

(782.9)

5.4%

 

 

 

 

 

 

Net fleet financing expense

(67.9)

-

(67.9)

(65.8)

3.2%

Estimated interest included in operating leases

(52.4)

-

(52.4)

(55.2)

(5.1%)

Fleet financing expenses, including estimated interest included in operating leases

(120.2)

-

(120.2)

(121.0)

(0.6%)

Adjusted Corporate EBITDA including Urban Mobility

388.9

110.6

278.3

327.3

(15.0%)

Margin

12.9%

 

9.2%

11.2%

 

Urban Mobility Adj Corporate EBITDA

 

 

(32.0)

(22.5)

 

Adjusted Corporate EBITDA excluding Urban Mobility

 

 

310.3

349.8

(11.3%)

Margin

 

 

10.4%

12.1%

 

Depreciation – excluding vehicle fleet

(151.5)

(103.6)

(48.0)

(44.4)

8.2%

Other operating income and expenses

(58.2)

-

(58.2)

20.4

 

Other financing income and expense not related to the fleet

(116.4)

(15.2)

(101.2)

(110.6)

(8.4%)

Profit/loss before tax

62.7

(8.2)

70.8

192.7

(63.2%)

Income tax

(32.9)

-

(32.9)

(52.0)

(36.7%)

Share of profit/(loss) of associates

-

-

-

(1.3)

 

Net profit/(loss)

29.8

(8.2)

38.0

139.4

(72.8%)

Appendix 2 – IFRS Income Statement

In € thousands

FY 2019 (*)

FY 2019 before

IFRS 16

 

FY 2018

         
         
Revenue

3,022,386

3,022,386

 

2,929,289

         
Fleet holding costs

(805,539)

(806,158)

 

(763,027)

- fleet operating lease expenses

0

0

 

(339,336)

- Net fleet depreciation

(674,999)

(675,618)

 

(329,254)

- Other fleet holding costs

(130,540)

(130,540)

 

(94,438)

Fleet operating, rental and revenue related costs

(1,006,517)

(1,044,800)

 

(990,302)

Personnel costs

(522,300)

(522,300)

 

(500,336)

Network and head office overhead costs

(240,870)

(314,981)

 

(294,337)

Non-fleet depreciation, amortization and impairment expense 

(151,538)

(47,983)

 

(44,361)

Other income

11,998

11,998

 

11,778

Current operating income

307,620

298,162

 

348,704

         
Other non-recurring income and expense

(58,228)

(58,228)

 

20,374

Operating income

249,392

239,934

 

369,078

         
Net fleet financing expenses

(70,468)

(67,890)

 

(65,812)

Net non-fleet financing expenses

(77,529)

(62,305)

 

(64,366)

Net other financial expenses

(38,895)

(38,895)

 

(46,195)

Net financing costs 

(186,892)

(169,090)

 

(176,373)

         
Profit/(loss) before tax

62,500

70,844

 

192,705

         
Income tax benefit/(expense)

            (32,885)

            (32,885)

 

(51,968)

Share of profit of Associates

0

0

 

(1,327)

Net profit/(loss) for the period

29,615

37,959

 

139,410

(*) The financial statements as of December 31, 2019 are established by applying IFRS 16 (using the modified retrospective approach without restatement of the previous year).

 

Appendix 3 – Reconciliation from consolidated accounts to management accounts and fourth quarter management accounts

Incl. IFRS16

Excl. IFRS16

 

 

Incl. IFRS16

Excl. IFRS16

Excl. IFRS16

 

 

 

 

 

 

 

Q4 2019

Q4 2019

Q4 2018

All data in €m

2019

2019

2018

236.7

209.8

201.2

Adjusted Consolidated EBITDA 

1,128.5

1,016.1

1,027.8

(140.7)

(79.5)

(61.4)

Fleet depreciation IFRS

(617.2)

(329.8)

(295.4)

(6.1)

(70.8)

(70.0)

Fleet depreciation included in operating lease rents 

(2.3)

(287.8)

(284.2)

(146.8)

(150.4)

(131.4)

Total Fleet depreciation

(619.4)

(617.6)

(579.6)

(11.6)

(11.6)

(13.9)

Interest expense related to fleet operating leases (estimated)

(52.4)

(52.4)

(55.2)

(18.6)

(18.6)

(16.5)

Net fleet financing expenses 

(67.9)

(67.9)

(65.8)

(30.2)

(30.2)

(30.4)

Total Fleet financing

(120.2)

(120.2)

(121.0)

59.7

29.2

39.4

Adjusted Corporate EBITDA 

388.9

278.3

327.3

(38.7)

(14.9)

(12.7)

Amortization, depreciation and impairment expense 

(151.5)

(48.0)

(44.4)

18.6

18.6

16.5

Reversal of Net fleet financing expenses

67.9

67.9

65.8

11.6

11.6

13.9

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

52.4

52.4

55.2

51.1

44.5

57.1

Adjusted recurring operating income 

357.6

350.5

403.9

(11.6)

(11.6)

(13.9)

Interest expense related to fleet operating leases (estimated)

(52.4)

(52.4)

(55.2)

39.5

32.8

43.3

Recurring operating income

305.2

298.2

348.7

  Incl. IFRS16 Excl. IFRS16 Excl. IFRS16  
         
All data in €m

Q4 2019

Q4 2019

Q4 2018

Change

Total revenue

707.7

707.7

643.6

10.0%

Fleet holding costs, excluding estimated interest included in operating leases

(184.3)

(187.9)

(165.8)

13.4%

Fleet operating, rental and revenue related costs

(244.2)

(258.0)

(227.1)

13.6%

Margin after Variable costs

279.2

261.8

250.8

4.4%

Margin

39.4%

37.0%

39.0%

 

Personnel costs

(127.5)

(127.5)

(113.8)

12.1%

Network and head office overhead

(67.7)

(80.8)

(69.1)

16.9%

Other income and expense

6.0

6.0

2.0

202.7%

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

(189.2)

(202.3)

(180.9)

11.8%

 

 

 

 

 

Net fleet financing expense

(18.6)

(18.6)

(16.5)

12.3%

Estimated interest included in operating leases

(11.6)

(11.6)

(13.9)

(16.0%)

Fleet financing expenses, including estimated interest included in operating leases

(30.2)

(30.2)

(30.4)

(0.6%)

Adjusted Corporate EBITDA including Urban Mobility

59.7

29.3

39.5

(25.9%)

Margin

8.4%

4.1%

6.1%

 

Depreciation – excluding vehicle fleet

(38.7)

(14.9)

(12.7)

17.5%

Other operating income and expenses

(17.7)

(17.7)

(20.5)

(14.0%)

Other financing income and expense not related to the fleet

(21.0)

(17.4)

(39.4)

(55.9%)

Profit/loss before tax

(17.7)

(20.7)

(33.2)

 

Income tax

(12.8)

(12.8)

4.5

 

Share of profit/(loss) of associates

0.2

0.2

(0.1)

 

Net profit/(loss)

(30.2)

(33.3)

(28.8)

 

Appendix 4 – Impact IFRS 16 on Consolidated accounts, Adjusted Corporate EBITDA and Balance sheet

IFRS 16 is the new standard on leases, with first application on January 1, 2019.

All leases contracts are accounted for in the balance sheet through an asset representing the “Right of Use” of the leased asset along the contract duration, and the corresponding liability, representing the lease payments obligation.

Europcar Mobility Group is using the simplified retrospective method, according to which there is no restatement of comparative periods. Main impacts on 2019 consolidated statements are the following:

P&L (in M€) 

At December

31, 2018 as

reported

At December

31, 2019 before

New Standards

Application

of IFRS 16

At December

31, 2019 as

reported

 

 

 

 

 

Revenue

2,929

3,022

 

3,022

Fleet, rental and revenue related costs

(1,753)

(1,851)

39

(1,812)

Personnel Costs

(500)

(522)

 

(522)

Network & HQ Costs

(294)

(315)

74

(241)

D&A and Impairment

(44)

(48)

(104)

(152)

Other Income

12

12

 

12

 

 

 

 

 

Current operating Income

349

298

9

308

 

 

 

 

 

Operating Income

369

240

9

249

 

 

 

 

 

Financial result

(176)

(169)

(18)

(187)

 

 

 

 

 

Profit before tax

193

71

(8)

63

 

 

 

 

 

Net income

139

38

(8)

30

 

 

 

 

 

Management P&L (in M€)

 

 

 

 

Restatement of Adj Corprate EBITDA (in M€)

At December

31, 2018 as

reported

At December

31, 2019 before

New Standards

Application

of IFRS 16

At December

31, 2019 as

reported

 

 

 

 

 

Current operating Income

349

298

9

308

D&A and Impairment

44

48

104

152

Net Fleet Financing expenses

(66)

(68)

(3)

(70)

Adj. Corp. EBITDA calculated

327

278

110.6

389

 

 

 

 

 

 

 

 

Balance sheet in M€

December 31,

2019

 

 

 

 

 

 

 

 

Assets :

463

 

 

 

 -Property, Plant & Equipment

334

 

 

 

- Rental Fleet in balance sheet

129

 

 

 

 

 

 

 

 

Liabilities :

471

 

 

 

- Non current lease liability (> 1 year)

283

 

 

 

- Current lease liability (< 1 year)

188

 

 

 

Appendix 5 – IFRS Balance Sheet

In € thousands

At

At

 

At 

Dec. 31,

Dec. 31,

 

Dec. 31,

2019 (*)

2019 before

IFRS 16

 

2018

         
Assets        
         
Goodwill

1,169,740

1,169,740

 

1,029,845

Intangible assets

1,016,084

1,016,084

 

986,016

Property, plant and equipment

518,346

171,544

 

159,247

Other non-current financial assets

73,905

73,905

 

66,012

Financial instruments non-current

0

0

 

1,544

Deferred tax assets

119,740

119,740

 

58,209

Total non-current assets

2,897,815

2,551,013

 

2,300,873

         
Inventory

29,563

29,563

 

26,536

Rental fleet recorded on the balance sheet

3,210,147

3,080,646

 

2,434,448

Rental fleet and related receivables

966,423

966,423

 

753,370

Trade and other receivables

487,618

487,618

 

481,264

Current financial assets

14,844

14,844

 

11,970

Current tax assets

34,023

34,023

 

37,547

Restricted cash

116,518

116,518

 

90,490

Cash and cash equivalents

527,019

527,019

 

358,138

Total current assets

5,386,155

5,256,654

 

4,193,763

         
Total assets

8,283,970

7,807,667

 

6,494,636

         
Equity        
Share capital

163,884

163,884

 

161,031

Share premium 

701,229

701,229

 

692,255

Reserves

(199,924)

(199,924)

 

(165,487)

Retained earnings (losses)

171,992

180,338

 

201,417

Total equity attributable to the owners of Europcar Mobility Group

837,181

845,527

 

889,216

Non-controlling interests

643

643

 

651

Total equity

837,824

846,170

 

889,867

         
Liabilities        
         
Financial liabilities

1,812,604

1,812,604

 

1,740,667

Non-current liabilities related to leases

292,174

0

 

0

Non-current financial instruments

64,161

64,161

 

60,415

Employee benefit liabilities

161,565

161,565

 

142,358

Non-current provisions

5,132

5,132

 

2,925

Deferred tax liabilities

212,046

212,046

 

173,799

Other non-current liabilities

159

159

 

220

Total non-current liabilities

2,547,841

2,255,667

 

2,120,384

         
Current portion of financial liabilities

2,994,090

2,994,090

 

2,006,533

Current liabilities related to leases

192,475

0

 

0

Employee benefits

3,275

3,275

 

3,192

Current provisions

219,950

219,950

 

220,893

Current tax liabilities

46,494

46,494

 

23,025

Rental fleet related payables

813,128

813,128

 

644,169

Trade payables and other liabilities 

628,893

628,893

 

586,573

Total current liabilities

4,898,305

4,705,830

 

3,484,385

Total liabilities

7,446,146

6,961,497

 

5,604,769

         
Total equity and liabilities

8,283,970

7,807,667

 

6,494,636

(*) The financial statements as of December 31, 2019 are established by applying IFRS 16 (using the modified retrospective approach without restatement of the previous year)

Appendix 6 – IFRS Cash Flow Statement

In € thousands

 

FY 2019 (*)

FY 2019

before IFRS 16

FY 2018

         
Profit/(loss) before tax  

62,500

70,845

192,705

Reversal of the following items        
Depreciation and impairment expenses on property, plant and equipment (1)         

125,747

22,192

20,424

Amortization and impairment expenses on intangible assets         

25,198

25,198

23,939

Impairment of assets  

593

593

9,981

Changes in provisions and employee benefits (2)  

(7,183)

(7,183)

(13,233)

Recognition of share-based payments

688

688

2,495

Profit/(loss) on disposal of assets  (3)  

(1,214)

(1,214)

(68,806)

Other non-cash items   

4,592

4,592

5,809

Total net interest costs(4)  

154,909

137,128

137,492

Amortization of transaction costs

16,448

16,448

16,577

Net financing costs  

171,357

153,576

154,069

         
Net cash from operations before changes in working capital

382,278

269,287

327,383

         
Changes to the rental fleet recorded on the balance sheet (5)       

(331,373)

(379,895)

(104,020)

Changes in fleet working capital 

(27,953)

(27,953)

(51,156)

Changes in non-fleet working capital

10,137

10,137

(15,835)

         
Cash generated from operations

33,089

(128,424)

156,372

         
Income taxes received/paid   

(29,919)

(29,919)

(46,109)

Net interest paid  

(135,485)

(135,485)

(138,283)

         
Net cash generated from (used by) operating activities

(132,315)

(293,828)

(29,029)

         
Acquisition of intangible assets and property, plant and equipment (6)

(84,454)

(84,454)

(73,132)

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

9,030

9,030

6,529

Proceeds from disposal of subsidiaries (7)  

1,499

1,499

70,000

Acquisition of subsidiaries, net of cash acquired and other financial investments (8)

(106,968)

(106,968)

(20,740)

         
Net cash used by investing activities

(180,893)

(180,893)

(17,343)

         
Capital increase (net of related expenses) (9)  

11,827

11,827

-

Special distribution and dividends paid  

(39,479)

(39,479)

(24,229)

(Purchases) / Sales of treasury shares net

(42,402)

(42,402)

(29,883)

Derivative instruments  

-

-

(6,083)

Issuance of bonds (10)  

(150,000)

(150,000)

148,500

Change in other borrowings (11)

905,170

905,170

85,322

Change in rental debts (12)  

(161,511)

 -   

-

Payment of transaction costs (13)  

(8,909)

(8,909)

(15,084)

         
Net cash generated from (used by) financing activities

514,696

676,207

158,543

         
Cash and cash equivalent at beginning of period  

424,986

424,986

313,251

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

201,488

201,488

113,181

Changes in scope

-

-

-

Effect of foreign exchange differences

1,681

1,681

(1,446)

Cash and cash equivalents at end of period  

628,155

628,155

424,986

(*) The financial statements as of December 31, 2019 are established by applying IFRS 16 (using the modified retrospective approach without restatement of the previous year).

Appendix 7 – Footnotes to IFRS Cash Flow Statement

(1) In 2019, the variation includes €103.6 million for the depreciation of the right of use of property assets within the scope of IFRS 16.

(2) In 2019, the variation is mainly explained by the change in the insurance provision for €(2.4) million, in the “buy-back” provision for €(2.6) million and benefit employee provision for €(1) million. In 2018, the variation mainly includes payments related to some litigations in France for €10 million.

(3) In 2018 mainly related to the profit on the sale of Car2Go.

(4) In 2019, the variation includes €17.8 million for the depreciation of the right of use of leased assets within the scope of IFRS 16.

(5) Given the average holding period for the fleet, the Group reports vehicles as current assets at the beginning of the contract. Their change from period to period is therefore similar to operating flows generated by the activity. In 2019, the variation includes the change in right of use of the fleet within the scope of IFRS 16 for an amount of €48.5 million.

(6) Mainly related to IT developments for €(39) million and equipment renewal for €(28.8) million.

(7) The variation relates to the sale of the investment in SnappCar in 2019 and the sale of Car2Go in 2018.

(8) In 2019, the change is mainly related to the acquisition by the Group of its Finnish and Norwegian franchisees for €37.8 million and Fox Rent A Car for €49 million.

(9) In 2019, the variation includes the impact of the capital increase reserved for employees of the group (“we Share 2019” Plan). Refer to Note 1.2.3.

(10) In 2019, the change is mainly related to the issuance of €450 million of Senior Notes at a rate of 4%, which mature in 2026 and the early reimbursement of €600 million of existing Senior Notes, at a rate of 5.750% that mature in 2022. In 2018, the change is mainly due to the launch of a Senior Secured Notes at a rate of 2.375% of an amount of 150 million euros maturing in 2022.

(11) In 2019, primarily related to changes in the Senior Credit Facility, Revolving Credit Facility and Commercial Papers. Refer to Note 8 for more detail.

(12) In 2019 and following the implementation of IFRS 16, the variation includes €49 million due to change in liability under the fleet lease agreements and €112.5 million due to change in liability under non-fleet lease agreements.

(13) In 2019, the variation is primarily due to transaction costs, of which €(4.7) million relate to the new issuance of Senior Notes for €450 million and the renewal of the Revolving Credit Facility for €(2.4) million. In 2018, payment of transaction costs including €(4.2) million related to SARF, €(0.2) million of initial costs related to the revolving credit facility, €(1.3) million related to the bridging loan, €(0.6) million related to the new €150 million bond issue and €(2.6) million related to other loans.

Appendix 8 – Corporate net debt

In € million

Pricing

Maturity

Dec. 31,

2018

Dec. 31,

2019

 

 

 

 

 

High Yield Senior Notes

4.125%

2024

600

600

High Yield Senior Notes

5.75%

2019

600

 

High Yield Senior Notes

4.00%

2026

 

450

Senior Revolving Facility (€650m) & NEU CP (€450m)

 

2023

230

518

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

 

 

(257)

(227)

Gross Corporate debt  

 

 

1,173

1,341

Short-term Investments and Cash in operating and holding entities

 

 

(377)

(461)

Corporate Net Debt

 

 

795

880

Appendix 9 – Fleet Debt

Pricing

Maturity

Dec. 31,

2018

Dec. 31,

2019

High Yield EC Finance Notes

2.375%

2022

500

500

Senior asset revolving facility (€1.7bn SARF)

E+130bps 

2022

557

1,134

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

 

 

252

253

UK, Australia, GC ABB & other fleet financing facilities

 

 

1,265

1,572

Gross financial fleet debt

 

 

2,574

3,459

Cash held in fleet financing entities and ST fleet investments 

 

(127)

(235)

Fleet net debt in Balance sheet

 

 

2,447

3,224

 

 

 

 

 

Liabilities linked to fleet lease (*)

 

 

129

179

 

 

 

 

 

TOTAL FLEET NET DEBT  (incl. leases)

 

 

2,576

3,403

         
(*) After implementation of IFRS16 as of January 1, 2019        

 

Contacts

Press Relations
Valérie Sauteret – valerie.sauteret@europcar.com
Vincent Vevaud – vincent.vevaud@europcar.com

Investor Relations
Caroline Cohen
+33 1 80 20 90 37 | +33 6 82 75 96 39
Caroline.cohen@europcar.com

Publicis Consultants
Marie Quinette
marie.quinette@publicisconsultants.com +33 144 82 48 72
Camille.madec@publicisconsultants.com +33 7 86 42 95 15

Contacts

Press Relations
Valérie Sauteret – valerie.sauteret@europcar.com
Vincent Vevaud – vincent.vevaud@europcar.com

Investor Relations
Caroline Cohen
+33 1 80 20 90 37 | +33 6 82 75 96 39
Caroline.cohen@europcar.com

Publicis Consultants
Marie Quinette
marie.quinette@publicisconsultants.com +33 144 82 48 72
Camille.madec@publicisconsultants.com +33 7 86 42 95 15