Press Release | Paris - February 25, 2020 |
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
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-upof 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
1
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-recurringexpenses 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
2
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 |
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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-activelyre-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% |
3 Excluding Fox consolidated since November 1st, 2019 (€37M revenue) and franchisees in Denmark and Norway acquired consolidated on July 1st, 2019 (€29M revenue)
4
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.
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- 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.
6
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.
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2. From Adjusted Corporate EBITDA to net income in 2019
% change at | ||||
€m | FY 2019 | FY 2018 | % change | 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.
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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.
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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.
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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-recurringexpenses 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
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Investor Calendar | |
Q1 2020 results | 27 April 2020 |
AGM | 28 April 2020 |
Contacts
Press Relations
Valérie Sauteret - valerie.sauteret@europcar.comVincent 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 +337 86 42 95 15
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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-costcar-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
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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 | Excl. IFRS16 Excl. IFRS16 | |||||||||
impact | |||||||||||
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 | (755.6) | (1.8) | (753.8) | (707.8) | 6.5% | ||||||
leases | |||||||||||
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 | (120.2) | - | (120.2) | (121.0) | (0.6%) | ||||||
operating leases | |||||||||||
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%) |
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Appendix 2 - IFRS Income Statement
In € thousands | FY 2019 (*) | FY 2019 before | FY 2018 |
IFRS 16 | |||
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).
15
Appendix 3 - Reconciliation from consolidated accounts to management accounts and fourth quarter management accounts
Incl. IFRS16 | Excl. 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 | 52.4 | 52.4 | 55.2 | |
(estimated) | |||||||
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. | Excl. | Excl. IFRS16 | ||
IFRS16 | 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 | (184.3) | (187.9) | (165.8) | 13.4% |
leases | ||||
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 | (30.2) | (30.2) | (30.4) | (0.6%) |
operating leases | ||||
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) | |
16
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:
At December | At December | At December | |||
31, 2019 | Application | ||||
P&L (in M€) | 31, 2018 as | 31, 2019 as | |||
before New | of IFRS 16 | ||||
reported | reported | ||||
Standards | |||||
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 | |
At December | At December | At December | |||
31, 2019 | Application | ||||
Restatement of Adj Corprate EBITDA (in M€) | 31, 2018 as | 31, 2019 as | |||
before New | of IFRS 16 | ||||
reported | reported | ||||
Standards | |||||
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 |
17
Appendix 5 - IFRS Balance Sheet
At | At | At | ||
In € thousands | Dec. 31, | Dec. 31, | Dec. 31, | |
2019 (*) | 2019 before | 2018 | ||
IFRS 16 | ||||
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)
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Appendix 6 - IFRS Cash Flow Statement
FY 2019 | |||
In € thousands | FY 2019 (*) | before IFRS | FY 2018 |
16 | |||
Profit/(loss) before tax | 62 500 | 70 845 | 192 705 |
Reversal of the following items | |||
Depreciation and impairment expenses on property, plant and equipment | 125 747 | 22 192 | 20 424 |
(1) | |||
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
Proceeds from disposal of subsidiaries (7)
Acquisition of subsidiaries, net of cash acquired and other financial investments (8)
9 030 | 9 030 | 6 529 |
1 499 | 1 499 | 70 000 |
(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 | 201 488 | 201 488 |
foreign exchange differences | ||
Changes in scope | - | - |
Effect of foreign exchange differences | 1 681 | 1 681 |
Cash and cash equivalents at end of period | 628 155 | 628 155 |
113 181
-
(1 446)
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).
19
Appendix 7 - Footnotes to IFRS Cash Flow Statement
- 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.
- 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.
- In 2018 mainly related to the profit on the sale of Car2Go.
- 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.
- 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.
- Mainly related to IT developments for €(39) million and equipment renewal for €(28.8) million.
- The variation relates to the sale of the investment in SnappCar in 2019 and the sale of Car2Go in 2018.
- 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.
- 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.
- 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.
- In 2019, primarily related to changes in the Senior Credit Facility, Revolving Credit Facility and Commercial Papers. Refer to Note 8 for more detail.
- 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.
- 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.
20
Appendix 8 - Corporate net debt
In € million | Pricing | Maturity | Dec. 31, | Dec. 31, |
2018 | 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, | Dec. 31, | |
2018 | 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 |
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Europcar Groupe SA published this content on 25 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 February 2020 22:23:04 UTC