Sixt SE: Thanks to its consistent cost management Sixt SE returns into profit zone in Q3 2020 – uncertainty remains over further business development due to renewed Corona-related restrictions
- 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.”
Pullach, 12 November 2020 – 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.
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+ on the mobility platform ONE the company offers a uniquely integrated premium mobility service across the fields of vehicle and commercial vehicle rental, car sharing, ride hailing and car subscriptions. The products can be booked through the SIXT app, which also integrates the services of its renowned mobility partners. SIXT has a presence in more than 100 countries around the globe. The company stands for consistent customer orientation, a lived culture of innovation with strong technological competence, a high proportion of premium vehicles in the fleet and an attractive price-performance ratio. In 2022, according to preliminary figures, the Sixt Group achieved a record consolidated pre-tax earnings of EUR 550 million and a significant increase in consolidated revenues to EUR 3.07 billion. Sixt SE has been listed on the Frankfurt stock exchange since 1986 (ISIN ordinary share: DE0007231326, ISIN preference share: DE0007231334).