- Revenue of €556 million up 28% at
constant exchange rates with organic growth of 3.9% vs. 3.4% in
FY17
- Adjusted Corporate EBITDA excluding
New Mobility at -€21 million versus -€6 million in Q1 2017, in line
with management expectations
- Corporate Operating Free Cash Flow
at -€76 million compared to -€27 million in Q1 2017, impacted by a
phasing impact on non-fleet working capital, to be reversed in the
course of 2018
- Net income at €3 million versus €19
million in Q1 2017
- Europcar fully confirms its guidance
for 2018
Regulatory News:
Note: this press release includes non-audited
consolidated results under IFRS, as approved by the management
board and reviewed by the supervisory board on May 14th 2018
Europcar (Paris:EUCAR) today announced its results for the first
quarter 2018.
For Caroline Parot, Chief Executive Officer of Europcar
Group:
"Europcar Group is pursuing and accelerating its transformation
as a global provider of mobility services. Our aim is to become the
preferred mobility service company for our customers, offering an
attractive alternative to vehicle ownership with a wide range of
services ranging from vehicle rentals to chauffeur-services,
as well as vehicle-sharing and peer-to-peer rental services.
During the first quarter of 2018, the Group delivered strong
revenue growth of 28% as a result of solid momentum within our
recently acquired companies, but also within our historical
perimeter. Hence, the company’s organic revenue reached 3.9% in the
first quarter of the year, mainly driven by the leisure and Low
Cost segments.
The Group achieved significant progress in the execution of its
transformation strategy and delivered results in several key areas.
First, we are well on track in terms of managing the integration of
recent acquisitions and delivering the expected synergies. Second,
we have continued to improve our Net Promoter Score which reached a
new high in the first quarter. Third, we have continued to make
significant progress in the further digitalization of our customer
experience and services through the completion of the roll out of a
new CRM platform. And finally, we have taken action and delivered
encouraging initial results in the UK.
Our adjusted Corporate EBITDA was impacted by (1) the
integration of Goldcar, which as expected significantly increases
the seasonality of the Group’s profitability generation, (2) a
negative mix effect generated by the strong growth of the Low Cost
and the Vans & Trucks business units, and (3) an increase in
our digital transformational costs.
Nevertheless, our Q1 results are fully in line with our
expectations at this stage and were factored in our 2018
outlook.
As a result, we confirm all of our targets for 2018 in terms of
revenue, adjusted Corporate EBITDA and operating Free Cash Flow
conversion. In that context of strong confidence in the Group’s
future prospects, we have decided to launch a tactical share
buyback programme, which is consistent with our cash allocation
strategy, at a point in time that we find appropriate”.
All data in €m, except if
mentioned 3M 2018 3M 2017
Change
Change
atconstantcurrency*
Number of rental days (million) 17,1 12,9 32,6%
Average
Fleet (thousand) 260,0 192,1 35,4%
Financial Utilization
rate 73,1% 74,6% -1,5pt
Total revenues 556 439 26,7% 28,5%
Rental revenues
520 403 28,8% 30,8%
Adjusted Corporate EBITDA (24) (6) n.m.
n.m.
Adjusted Corporate EBITDA Margin -4,4% -1,4% -3,0pt
Last Twelve Months Adjusted Corporate EBITDA 246 252
-2,7%
LTM Adjusted Corporate EBITDA Margin 9,7% 11,6% -1,9pt
Last Twelve Months Adjusted Corporate EBITDA excluding
New Mobility 262 253 3,8%
LTM Adjusted Corporate EBITDA
margin excluding NM 10,5% 11,7% -1,2pt
Operating Income
40 41
Net profit/loss 3 19 n.m n.m Corporate Free Cash Flow
(76) (27) Corporate Net Debt at end of the period 947 235 Proforma
Corporate net debt / EBITDA ratio 3,1x 0,9x
Q1 2018 highlights
Revenue
The Group generated revenues of €556 million in the first
quarter of 2018, up 28% at constant exchange rates compared with
the first quarter of 2017. On an organic basis, i.e. at constant
exchange rates and constant perimeter, the Group revenues grew by
3.9%.
This significant increase in Group revenues was supported by the
recent acquisitions made by the Group in the last months of 2017.
As a result, the Group delivered solid growth across all of its
major business units with Cars growing by 16%, Vans & Trucks
growing by 62% and Low Cost growing by 279%. On an organic basis,
our three major business units of Cars, Vans & Trucks and Low
Cost grew by respectively 3.5%, 8.0% and 18%, showing that our
increased focus on the Vans & Trucks and Low Cost segments is a
significant generator of additional revenue growth for the Europcar
Group.
These solid revenue numbers were delivered thanks to good
momentum in both the leisure and corporate businesses and are once
again proof of the strength and robustness of the Group balanced
business model. As is traditionally the case during the first
quarter of the year which represents a low point in the touristic
season, revenues were more evenly split between the Group’s
corporate customers and its leisure customers, representing each an
even 50% of Group revenues.
The number of rental days increased to 17.1 million in Q1 2018,
up 33% versus Q1 2017 with an organic growth of 4.6%. This growth
in rental days was spread across all the key divisions with cars
growing 15%, Vans & Trucks growing 50% and Low Cost growing
207%. Revenue per rental day (RPD) decreased by 1.4% at Group
level, mostly impacted by the recent acquisitions. On an organic
basis, RPD was steady in Q1 2018 versus last year as a result of
(1) a stable pricing environment in Cars during the quarter with
RPD up 0.3%, (2) a 4.4% decline in the
Vans & Trucks business unit which continues to reflect the
Group’s strategic focus on expanding its corporate business, and
(3) a positive 9.9% increase in RPD in Low Cost reflecting a good
ancillary product sales momentum.
Adjusted Corporate EBITDA1
Excluding the impact of New Mobility, Q1 2018 Adjusted Corporate
EBITDA declined significantly to -€21.4 million compared to -€6.3
million in Q1 2017 at constant exchange rate.
This decrease has three major causes:
(1) the negative impact of the Goldcar
acquisition, which as expected adds more seasonality to the Group’s
overall profitability generation,
(2) the negative mix impact generated by the
strong organic growth of our existing Low Cost and Vans &
Trucks business units,
(3) the increase in our digital & IT
spending which is key to the success of the Group’s
transformation.
It is important to note that this decline in Adjusted Corporate
EBITDA was expected and is fully factored within the Group’s
expectations for FY 2018.
Corporate Operating Free Cash Flow
Q1 2018 Corporate Operating Free Cash Flow was -€76 million
compared to -€27 million in Q1 2017 impacted by a lower level of
adjusted Corporate EBITDA as well as a deterioration in non-fleet
working capital compared to the first quarter of 2017.
This change in non-fleet working capital was caused by a
technical timing delay in Italy and a weak performance in terms of
cash collection in the UK to be recovered. We expect this negative
trend to be reversed during the rest of the year.
Net income
In Q1 2018, the Group posted a net profit of €2.5 million,
compared to a net profit of €18.6 million in Q1 2017. This decline
was caused by a lower level of adjusted Corporate EBITDA, a higher
level of non-fleet D&A and an increase in interest costs on
corporate bonds as a result of the financing of the Goldcar
acquisition. Non-recurring items contributed positively up to €60m
(vs €40m in Q1 2017), on the back of a €68m capital gain on the
disposal of the Group’s 25% stake in car2go.
Net debt
Corporate net debt increased to reach €947 million as of March
31, 2018 (vs €827 million as of December 31, 2017) mainly as a
result of the increased seasonality of the business during the
first quarter of the year.
The Group’s pro forma corporate net leverage reached 3.1x at the
end of the first quarter of 2018. When including the proceeds for
the sale of the Group’s 25% stake in car2go, the Group’s pro forma
corporate net leverage reached 2.9x at the end of the first quarter
of 2018.
The fleet net debt was €3,953 million as of March 31, 2018 vs
€4,061 million as of December 31, 2017.
Sale of 25% stake in car2go
On February 28, 2018, the Europcar Group signed an agreement
with Daimler Mobility Services on the sale of its 25% stake in
car2go Europe GmbH. The completion of the sale generated a pre-tax
gain of 68 million euros which has been accounted for in the
company’s Q1 results.
Launch of share buyback programme (post-closing
event)
Europcar has decided to implement a share buyback programme as
authorized by the Combined General Meeting of Shareholders on May
10th 2017.
This mandate, signed on May 16th, 2018, targets a maximum amount
of shares not to exceed a value of 30 million euros, representing
approximately 2.1% of the share capital.
The repurchases of shares will occur over a period of six months
starting on May 17th 2018.
2018 guidance confirmed
Europcar confirms its four financial targets for 2018 compared
to 2017:
- Accelerating organic revenue growth i.e. above 3%
- Adjusted corporate EBITDA (excluding New Mobility) above 350
million euros
- Corporate operating free cash flow conversion rate above
50%
- Dividend payout ratio above 30%
Conference Call with Analysts and
Investors
Caroline Parot, Group Chief Executive Officer and Luc Peligry,
Group Chief Financial Officer, will host a conference call in
English today at 6.30 p.m. Paris time (CEST).
You can follow this conference call live via webcast.
A replay will also be available for a period of one year. All
documents relating to this publication will be available online on
Europcar’s investor website.
Investor Calendar
Annual General Meeting 17 May 2018 H1 2018
Results 25 July 2018 Q3 2018 Results 8 November 2018
About Europcar Group
Europcar Group is a major player in mobility markets and is
listed on Euronext Paris. The Group's mission is to be an
attractive alternative to car ownership by providing a wide range
of mobility solutions: car rentals, Vans & Trucks, chauffeur
service, car-sharing or peer-to-peer. Customer 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.
The group operates through multi brands meeting every customer
specific needs: Europcar® - the European Leader in
vehicle rental services, Goldcar® - Europe’s largest low-cost
car rental company, InterRent® - value for money brand
targeting leisure customers and Ubeeqo® - a European company
specializing in fleet and mobility solutions for both the business
and the end-customers market.
The Group delivers its mobility solutions worldwide through an
extensive network in 133 countries (including 16 wholly-owned
subsidiaries in Europe and 2 in Australia and New
Zealand, franchisees 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 Groupe and its
subsidiaries and investments, trends in their business, future
capital expenditures and acquisitions, developments in respect of
contingent liabilities, changes in economic conditions globally or
in Europcar Groupe’s principal markets, competitive conditions in
the market and regulatory factors. Those events are uncertain;
their outcome may differ from current expectations which may in
turn 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 Groupe 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 April 20, 2018 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:
finance.europcar-group.com
Appendix 1 – Management Profit and Loss
Q1 2018 Q1 2017 All data in €m
3M 2018 3M 2017 556,4
439,3 Total revenue 556,4
439,3 (151,3) (106,8) Fleet holding costs,
excluding estimated interest included in operating leases
(151,3) (106,8) (204,4) (166,3)
Fleet operating, rental and revenue related costs
(204,4) (166,3) (122,8) (90,5) Personnel costs
(122,8) (90,5) (77,1) (58,7) Network and head office overhead
(77,1) (58,7) 1,1 0,5 Other income and expense
1,1 0,5
(198,8) (148,7) Personnel costs,
network and head office overhead, IT and other (198,8)
(148,7) (14,6) (13,7) Net fleet financing expense
(14,6) (13,7) (11,8) (9,9) Estimated interest
included in operating leases (11,8) (9,9)
(26,4) (23,6) Fleet financing expenses, including
estimated interest included in operating leases (26,4)
(23,6) (24,5) (6,2) Adjusted Corporate
EBITDA (24,5) (6,2) -4,4% -1,4%
Margin -4,4% -1,4% (9,5) (6,6) Depreciation –
excluding vehicle fleet (9,5) (6,6) 59,7 39,9 Other operating
income and expenses 59,7 39,9 (23,0) (15,5) Other financing income
and expense not related to the fleet (23,0) (15,5)
2,7
11,6 Profit/loss before tax 2,7 11,6
1,0 10,0 Income tax 1,0 10,0 (1,1) (3,0) Share of profit/(loss) of
associates (1,1) (3,0)
2,5 18,6 Net
profit/(loss) 2,5 18,6
Appendix 2 – IFRS Income statement
In € thousands
First-quarter2018
First-quarter2017
Revenue 556
398 439 291 Fleet holding costs (163 092)
(116 703) Fleet operating, rental and revenue related costs (204
432) (166 335) Personnel costs (122 798) (90 537) Network and head
office overhead costs (77 064) (58 675) Depreciation, amortization
and impairment expense (9 539) (6 595) Other income 1 092
466
Current operating income (19 435)
912 Other non-recurring income and expenses 59
697 39 864 Operating income 40 262 40 776
Gross financing costs (30 590)
(22 415) Other financial expenses (7 570) (7 324) Other financial
income 545 592 Net financing costs (37 615) (29 147)
Profit/(loss) before tax 2 647 11 629
Income tax benefit/(expense) 985
9 966 Share of profit of Associates (1 131) (3 037) Net
profit/(loss) for the period 2 501 18 558
Attributable to:
Owners of ECG 2
513 18 609 Non-controlling interests (12) (51) Basic
Earnings per share attributable to owners of ECG (in €) 0,016 0,129
Diluted Earnings per share attributable to owners of ECG (in €)
0,016 0,129
Appendix 3 – Reconciliation
Q1 2018
Q1 2017 All data in €m 3M 2018
3M 2017 124,8 100,2 Adjusted
Consolidated EBITDA 124,8 100,2 (69,0) (39,2)
Fleet depreciation IFRS (69,0) (39,2) (53,9) (43,6) Fleet
depreciation included in operating lease rents (53,9) (43,6)
(122,9) (82,8) Total Fleet depreciation
(122,9) (82,8) (11,8) (9,9) Interest expense related
to fleet operating leases (estimated) (11,8) (9,9) (14,6) (13,7)
Net fleet financing expenses (14,6) (13,7)
(26,4)
(23,6) Total Fleet financing (26,4)
(23,6) (24,5) (6,2) Adjusted Corporate
EBITDA (24,5) (6,2) (9,5) (6,6) Amortization,
depreciation and impairment expense (9,5) (6,6) 14,6 13,7 Reversal
of Net fleet financing expenses 14,6 13,7 11,8 9,9 Reversal of
Interest expense related to fleet operating leases (estimated) 11,8
9,9
(7,6) 10,8 Adjusted recurring operating
income (7,6) 10,8 (11,8) (9,9) Interest expense
related to fleet operating leases (estimated) (11,8)
(9,9)
(19,4) 0,9 Recurring operating income
(19,4) 0,9
Appendix 4 – Balance sheet
In € thousands
At At March 31,
Dec. 31, 2018 2017 Assets
Goodwill 1 138 381 1 138 793 Intangible
assets 814 554 809 960 Property, plant and equipment 112 838 114
855 Equity-accounted investments 1 458 4 036 Other non-current
financial assets 60 951 58 602 Financial instruments non-current
492 226 Deferred tax assets 60 851 56 757
Total
non-current assets 2 189 525 2 183 229
Inventory 25 650 24 330 Rental fleet recorded on the balance sheet
2 445 212 2 342 605 Rental fleet and related receivables 641 839
700 117 Trade and other receivables 545 675 456 688 Current
financial assets 27 086 32 762 Current tax assets 59 877 42 760
Restricted cash 98 087 104 818 Cash and cash equivalents 218 579
240 792 Total current assets 4 062 005 3 944 872
Total assets 6 251 530 6 128 101
Equity Share
capital 161 031 161 031 Share premium 745 748 745
748 Reserves (107 190) (106 756) Retained earnings (losses) 39 420
37 209 Total equity attributable to the owners of ECG 839 009
837 232
Non-controlling interests 751
763 Total equity 839 760 837 995
Liabilities
Financial liabilities 1 570 604
1 570 141
Non-current financial instruments 35 710 37 122 Employee benefit
liabilities 134 163 133 951 Non-current provisions 9 149 8 680
Deferred tax liabilities 129 569 128 803 Other non-current
liabilities 262 276 Total non-current liabilities 1 879 457
1 878 973
Current portion of financial liabilities
1 858 930 1 950 262 Employee benefits 3 149 3 149
Current provisions 213 779 219 455 Current tax liabilities 47 870
31 566 Rental fleet related payables 833 537 604 196 Trade payables
and other liabilities 575 048 602 505 Total current liabilities 3
532 313 3 411 133
Total liabilities 5 411
770 5 290 106
Total equity and liabilities 6 251 530
6 128 101
Appendix 5 – IFRS Cash Flow
In € thousands
First-quarter2018
First-quarter2017
Profit/(loss) before tax
2 647 11 629 Reversal of the
following items Depreciation and impairment expenses on
property, plant and equipment 4 644 3 834 Amortization and
impairment expenses on intangible assets 4 325 2 762 Changes in
provisions and employee benefits (1) (6 459) (55 590) Recognition
of share-based payments - (192) Profit/(loss) on disposal of assets
(2) (68 513) (30) Other non-cash items - 1 996 Total net interest
costs 32 572 24 321 Amortization of transaction costs 3 184
1 806
Net financing costs 35 756 26 127
Net cash from operations before
changes in working capital (27 600) (9
464) Changes to the rental fleet recorded on the balance
sheet (3) (100 311) (63 040) Changes in fleet working capital 265
160 238 980 Changes in non-fleet working capital (21 493) 14
952
Cash generated from
operations 115 756 181 428
Income taxes received/paid (4) (3 323) (6 441) Net interest paid
(13 522) (18 507)
Net cash
generated from (used by) operating activities 98
911 156 480 Acquisition of intangible
assets and property, plant and equipment (5) (13 218) (12 715)
Proceeds from disposal of intangible assets and property, plant and
equipment 1 737 896 Other investments and loans 2 853 (3 110)
Net cash used by investing
activities (8 628) (14 929)
Capital increase (net of related expenses) - 21 787 (Purchases) /
Sales of treasury shares net (86) (549) Change in other borrowings
(6) (117 435) (188 084) Payment of transaction costs (7) (4 066) -
Net cash generated from (used by) financing
activities (121 587) (166 846)
Cash and cash equivalent at beginning of period
313 251 248 507 Net increase/(decrease) in cash and
cash equivalents after effect of foreign exchange differences (31
304) (25 295) Changes in scope - 11 635 Effect of foreign exchange
differences (1 185) 799
Cash and cash equivalents at end of
period 280 762 235 646
(1) Of which in 2018, Buyback provision for (€7 million). Of
which in 2017, the reversal of provision for disputes with French
Competition Authority for €45 million.
(2) Mainly related to profit on the sale of Car2Go.
(3) 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.
(4) The decrease of tax cash-out in Q1 2018 versus Q1 2017 is
mainly due to prior year’s regularizations in UK in 2018.
(5) Mainly related to IT cost capitalized (€7.1m) ; other &
technical equipment for (€6.2m).
(6) Related to drawing variation under Senior Notes (SARF) and
Other borrowings dedicated to fleet financing.
(7) In 2018, transaction costs payment of which (€0.2m) for
revolving facilities Upfront fees, (€1.3m) for bridge facilities
and (€2.6m) for other facilities.
Appendix 6 - Debt
€million Pricing Maturity Mar. 31, 2018
Dec. 31, 2017 High Yield Senior Notes (a) 4.125% 2024 600 600 High
Yield Senior Notes (a) 5.75% 2022 600 600
Senior Revolving
Facility (€500m) E+225bps (b) 2022
230 160
FCT Junior Notes, accrued interest not yet due, capitalized
financing costs and other (224) (270)
Gross Corporate debt
1 207 1 090 Short-term Investments and Cash in
operating and holding entities (259) (263)
CORPORATE NET DEBT (A) 947 827
€million Pricing Maturity Mar. 31, 2018 Dec. 31, 2017 High Yield EC
Finance Notes (a) 2.375% 2022 350 350 Senior asset revolving
facility (€1.3bn SARF) (c) E+150bps 2020 640 739
FCT Junior
Notes, accrued interest, financing capitalized costs and other
228 260 UK, Australia and other fleet financing
facilities Various (d) 1 003 1 081
Gross financial fleet
debt 2 222 2 430 Cash held in fleet financing
entities and Short-term fleet investments -115 -143
Fleet
net debt in Balance sheet 2 108 2 287
Debt equivalent of fleet operating leases - OFF Balance Sheet
(e) 1 845 1 774 TOTAL FLEET NET DEBT
(incl. op leases) (B) 3 953 4 061
TOTAL NET DEBT (A)+(B) 4 900 4 888
(a) These bonds are listed on the Luxembourg Stock Exchange. The
corresponding prospectus is available on Luxembourg Stock Exchange
website (http://www.bourse.lu/Accueil.jsp)
(b) Depending on the leverage ratio
(c) Swap instruments covering the SARF structure have been
extended to 2020
(d) UK fleet financing maturing in 2018 with one year extension
option
(e) Corresponds to the net book value of applicable vehicles,
which is calculated on the basis of the purchase price and
depreciation rates of corresponding vehicles (based on contracts
with manufacturers).
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Europcar / Press relationsValérie Sauteret / Marie-Anne
Bénardais+33 1 30 44 98
82europcarpressoffice@europcar.comorEuropcar / Investor
relationsOlivier Gernandt+33 1 30 44 91
44olivier.gernandt@europcar.comorElan Edelman+33 1 86 21 51
56 / +33 1 86 21 50 38europcar@elanedelman.com