€100m EUROPCAR record net profit is reported for the nine months year-to-date as it posts its results for the third quarter and the first nine months of 2016.
Philippe Germond, chairman of the management board, said: “These solid results confirm the robustness of the group business model and its capacity to deliver sustained profitable growth.
“The strong summer season was totally in line with our expectations, successfully supported by our brand strategy notably in Southern Europe and by operational excellence everywhere in the group.
“In addition, we have fully enjoyed the benefit of the reshape of the capital structure following the IPO allowing us to register a record net profit close to 100 million euros for the first nine months. As stated during our first investor day on Oct. 4, this positive growth trend of our revenues and profitability enables us to confirm our FY 2016 Guidance.”
Europcar Group revenues
Q3 2016 total revenue amounted to €707 million compared to €693 million in 2015, representing a 5.1% increase at constant currency. Excluding Locaroise, its third French Franchisee (fully consolidated since July 1st 2016), total revenues growth reached 4.5%.
This increase is mainly driven by a +5.3% growth at constant currency in rental revenue (€665 million) partly off-set by the decrease in petrol prices. This performance was supported by a good leisure momentum across all our brands, and an improvement in the business segments compared to H1 2016.
Rental days volume increased by 6.5% compared to Q3 2015, at 19.0 million, thanks to a positive evolution in leisure over Q3 on both Europcar and InterRent brands, notably in Spain, Italy and Portugal. The three Business Units of Cars, Vans & Trucks and Low cost all contributed to this performance. Compared to the third quarter 2015, all countries enjoyed growth except Belgium, which was flat despite consequences of the terrorist attacks.
RPD for the Cars business unit was up 0.8% at constant currency, despite the French terrorist attack in Nice in July, and thanks to strong yield management. On a consolidated basis, the Q3 RPD decreased by 1.1% at constant currency impacted by the success of InterRent and the development of the Vans & Trucks strategy.
For the first nine months of the year, total revenues amounted to €1,655 million, up 2.4% at constant currency compared to last year. Excluding petrol impact and the Locaroise acquisition, the increase was 2.4% at constant currency.
Adjusted Corporate EBITDA
Q3 Adjusted Corporate EBITDA reached €159 million versus €154 million in Q3 2015 reflecting the strong performance during the summer season despite the negative currency effect linked to the depreciation of the pound sterling. The growth amounted €7 million (+4.5%) at constant currency. Q3 Adjusted Corporate EBITDA margin reached a record level of 22.5%.
The last twelve months Adjusted Corporate EBITDA amounted to €250 million, up 1.1% year over year, despite a challenging environment since the beginning of 2016. This performance demonstrates the robustness and resilience of the Group’s business model.
The latter relies on a de-risked fleet asset base and a capacity to deliver sustained profitable growth by leveraging on the different pillars of its state of the art revenues and capacity management (namely volume, price and utilization rate), while optimizing its cost structure and building the future.
Europcar Group pursues its investments in the deployment of InterRent brand and network, in its customer journey programs, IT and Europcar Lab’s, etc.
Q3 operating income came in at €169 million in 2016, compared to €163 million in 2015.
For the first nine months, operating income was €241 million versus €182 million in 2015. Last year’s figure included IPO costs and non-recurring items (notably the net negative impact of certain proceedings and reorganization charges linked to the Fast Lane transformation plan roll out).
Q3 net profit amounted to €96 million in 2016, compared to €99 million in Q3 2015. This slight decrease was notably linked to the pound sterling currency effect and the further investments in Ubeeqo and Car2Go Europe (both equity accounted investments).
For the first nine months, net income was a profit of €99 million in 2016 compared to a loss of €57 million in 2015. This improvement reflects the full benefit of the reshape of the capital structure following the IPO at the end of Q2 2015, while last year was also impacted by other non-recurring items.
Corporate free cash flow and Corporate Net Debt
Corporate free cash flow amounted to €84 million in Q3 compared to €92 million last year. For the first nine months Corporate free cash flow was €166 million compared to €116 million for the same period in 2015. This Corporate free cash flow encompassed Adjusted Corporate EBITDA, flat on a reported basis year over year at €214 million, and a good management of non-fleet working capital over the period. As a reminder, 2015 free cash flow was also impacted by one-off cash items.
Corporate net debt amounted to €155 million as of September 30, 2016 (vs. €235 million as of December 31, 2015). The corporate net debt leverage is at 0.6×2.
The Group pursued its dynamic acquisition plan, reaching recently a further step in its path to be a key mobility provider with the acquisition of Brunel. As a ride-hailing company, Brunel allows the Group to give its customers even greater choice for their travel needs, providing Europcar with a strong competitive advantage.
As a reminder, since the beginning of 2016 the Group has acquired Locaroise, its third French Franchisee (fully consolidated since July 1st), Bluemove a mobility tech start-up and car sharing leader in Spain, through Ubeeqo, as well as a minority investment in Wanderio, a multi modal search and comparison platform.
Over the first nine months of 2016, Europcar has cashed out about €27 million in its acquisition plan.
Confirmation of 2016 full year guidance
As a results of the strong performance over the summer season, the Group reiterates the 2016 guidance, announced on July 25, 2016, showing the resilience of its business model while facing a number of headwinds, including an increasingly unfavorable currency from the depreciation of the pound sterling. As a reminder, the group is committed to the following guidance for the full year:
- Slight increase of revenue on an organic basis3
- Adjusted Corporate EBITDA above last year €251million
- Adjusted Corporate EBITDA conversion to Corporate free cash flow above 50%.
In addition, considering acquisition achievements for this year 2016, the Group will deliver to its shareholders a dividend pay-out to an exceptional level of at least 50% based on 2016 Net Income