- Sixt SE returns into profit zone in Q3 2020, proves the adaptability of its business model with a pre-tax profit of EUR 66.0 million and manages to navigate the crisis significantly better than its competitors
- As expected, Government restrictions curtail revenue, which falls to EUR 462.6 million for the period July to September (-40.7%)
- At outbreak of the COVID-19 pandemic the SIXT Managing Board implemented a rigorous cost reduction programme, as part of which the total cost basis for the first nine months was cut by around EUR 400 million. Savings of EUR 200 million made in material and personnel costs alone already substantially exceeded the EUR 150 million earmarked for the full fiscal year
- With its equity ratio of 30.7% and a bank balance of around EUR 500 million, the Group has a solid financing basis and can also draw on further financing reserves amounting to billions
- Demand from private clients in urban branches, especially for flexible mobility solutions such as auto subscriptions, climbed in the third quarter. SIXT also registered growing demand in the business travel segment
- SIXT once again demonstrates high implementation speed thanks to its technology competence: the auto subscription service SIXT+ is already available in five European countries as well as the USA
- The positive trend of the third quarter will not be able to continue on account of the renewed restrictions to travel and mobility applicable for the coming months. Given the continued high degree of uncertainty, SIXT will still not issue an outlook for the full fiscal year 2020
- CEO Erich Sixt: "The long-term trend towards individual mobility is actually being boosted by Corona. SIXT is all set to get going again once markets rebound."
The Sixt Group generated a pre-tax profit of EUR 66.0 million in the third quarter of 2020, which is historically the strongest quarter over the course of the year. This means that the international mobility service provider is back in the profit zone following the loss incurred in the second quarter in the wake of the worldwide Corona lockdown. The positive result was facilitated by the significant reduction of the total cost basis, which by comparison to the same period last year was cut by around EUR 400 million during the first nine months. Besides the significant reduction of the rental fleet, over EUR 200 million of these reductions were made in personnel and material costs, which thereby already substantially exceeded the full-year target of EUR 150 million. In view of the continuing high level of uncertainty in the market due to the international travel restrictions, SIXT is still refraining from issuing a forecast for the full fiscal year 2020.
During the third quarter SIXT registered increasing demand from both private as well as corporate customers, especially for time-flexible mobility solutions such as auto subscriptions, flatrate products or carsharing. With the resurgence of Corona infections both at home and abroad, travellers are increasingly deciding not only against air traffic and public transportation but also against train travel and prefer the car as a safe alternative. This positive trend is still offset by ongoing lacklustre business at airport stations on account of the persistent limitations to air traffic.
Erich Sixt, CEO of Sixt SE: "SIXT did everything to continue implementing its growth strategy and to be optimally prepared for the time after the crisis. We drove forward the digital transformation and expanded our product portfolio with the SIXT+ car subscription service, which is already available in five European countries and the USA. In the growth market USA, SIXT’s expansion continues apace with now 100 stations and a strong presence at almost all important airports. We are also registering very encouraging signals from the customer demand side. Not only private but more and more corporate and business customers are counting on individual mobility in times of resurgent infection numbers. They are discovering that the rental vehicle is in many cases the more cost-advantageous and efficient travel variant, irrespective of Corona. Even if the positive momentum of the third quarter cannot continue over the coming months due to the Corona restrictions, this general trend is making us optimistic for the long-term development of SIXT. All in all, we are mastering the crisis much better than our competitors."
Alexander Sixt, CAO of Sixt SE: "SIXT did its homework over the course of the year and returned to profitability in the third quarter. Overall, we managed to bring down our cost basis by around EUR 400 million during the first nine months compared with the same period last year and so generated a positive free cash flow of almost half a billion euros. This very clearly demonstrates the adaptability of our business model, which allows us to react at short notice to changes in demand. Lately our equity ratio went up to 31% thanks to the successful deconsolidation of the sold leasing business which, together with the comfortable financing basis of around EUR 500 in bank balances and the unused billions in financing means, gives us the certainty and stability to master the undoubtedly challenging months ahead of us."
Operative highlights of Q3 2020
- The SIXT+ car subscription service is witnessing encouraging and continually increasing demand. Since its start in June, the number of contracts concluded has already reached the medium four-digit range, so that SIXT has managed to develop significantly more dynamically than the services offered by competitors. SIXT+ offers private and commercial customers flexible daily, weekly and monthly options for rental cars with shorter periods of notice, availability without lengthy delivery times and thus bespoke solutions for short-notice mobility requirements. The product is also already available outside Germany in the UK, the Netherlands, France, Austria and the USA. In all these countries customers can pick the car of their choice from SIXT’s premium fleet for a carefree monthly all-round fee that already includes the costs of registration, taxes and maintenance. SIXT+ is also convincing experts and receives "very good" reviews". Thus, in the current test of the German Institute for Service Quality in cooperation with the news channel n-tv SIXT clearly comes out top with the SIXT+ car subscription service scoring all 100 points available.
- The ten stations in the USA, which SIXT took over at the start of July from the insolvency of the US-company "Advantage Rent a Car" have all been opened meanwhile with the sole exception of the one at LaGuardia Airport New York (to follow in Q1 2021). This means that at the end of the third quarter, SIXT for the first time had more than 100 stations on the largest car rental market in the world, with a market volume of more than 32 billion dollars.
- Customers see SIXT as best in class in industry comparisons: in a representative YouGov consumer survey on "Brand of the year", commissioned by the German business magazine "Handelsblatt", SIXT clearly holds its own against its competitors and comes first in the category "Mobility".
Key Group figures for the first nine months and Q3 2020
Preliminary Note: Where not mentioned otherwise, the following key figures for period 1 January 2020 to 30 September 2020 cover the Mobility Business Unit as well as the other continued activities, which are not categorised as part of the Mobility Business Unit. Pursuant to IFRS 5 the post-tax earnings of the discontinued Leasing Business Unit, sold in July 2020, are recorded separately in the Profit and Loss Statement. For comparative purposes, last year’s figures have been adjusted accordingly where necessary.
- Group revenue for the first nine months of 2020 came to EUR 1.18 billion, a decrease of 38.3% on the same figure last year (EUR 1.91 billion). Domestic revenue came to EUR 522.5 million (-28.8%) with revenue generated abroad amounting to EUR 657.1 million (-44.3%). For the third quarter SIXT recorded consolidated revenue of EUR 462.6 million, which is a reduction of 40.7% against the same quarter of 2019 (EUR 780.3 million). Increased demand registered at the urban stations in the third quarter 2020, some of which had reached pre-Corona levels again, was offset by a persistently slow business at airports, notwithstanding the temporary slight recovery of worldwide air traffic recorded during the third quarter.
- Consolidated earnings before taxes (EBT), the SIXT Group’s principal success parameter, came to EUR -56.9 million in the period from January to September (January to September 2019: EUR 260.0 million) and this improved substantially against the first half of the year. In the third quarter SIXT generated positive EBT of EUR 66.0 million (Q3 2019: EUR 146.6 million). Key contributors to this development were the significant reduction of the cost basis due to the reduction in the fleet size and savings made throughout the Group.
- Significant reduction of the rental fleet: From January to September 2020 SIXT added around 135,300 vehicles to the (domestic and international) rental and leasing fleet (9M 2019: approx. 197,300 vehicles) with a total value of EUR 4.17 billion (9M 2019: EUR 5.76 billion). This equals a decline of 31.4% in the number of vehicles. During the first nine months the average number in the fleet was 117,900 vehicles, 23.1% below the level over the same period last year.
Developments in fiscal year 2020
As already announced on 21 October it is still not clear to what extent SIXT’s business will be affected by the effects of the COVID-19 pandemic given that during the last few weeks travel restrictions have once again drastically increased. The resulting uncertainties for business operations continue to remain very high so that the Company still cannot issue a forecast for the full fiscal year 2020.
Today Sixt SE published its Group Quarterly Statement as of 30 September 2020 on its website at http://ir.sixt.com in the section "Financial Reports."
Sixt SE, with its registered office in Pullach near Munich, is a leading international provider of high-quality mobility services. With its products SIXT rent, SIXT share, SIXT ride and SIXT+ the Company is offering a uniquely integrated service of mobility across the fields of vehicle rental, carsharing, chauffeur services and vehicle subscription. The products can be booked through one single app, which also integrates the services of renowned mobility partners. SIXT has a presence in around 110 countries around the globe. The Company is characterised by consistent customer orientation, a lived culture of innovation with a strong technological expertise, the high share of premium vehicles in its fleet and an attractive price-performance ratio. The Sixt Group generated revenue of EUR 3.31 billion in 2019 and ranks as one of the most profitable mobility companies worldwide. SIXT SE is the parent company of the Group and has been listed on the Frankfurt stock exchange since 1986 (German WKN ordinary share: 723132, WKN preference share: 723133). https://about.sixt.de
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