DGAP-News: Sixt Leasing SE / Key word(s): Preliminary Results/Forecast
Sixt Leasing SE achieves another record revenue in the fiscal year 2017- Managing Board launches 'DRIVE>2021' strategy programme - Significant increase in contract portfolio, revenue and earnings expected by 2021

14.03.2018 / 07:30
The issuer is solely responsible for the content of this announcement.


Sixt Leasing achieves another record revenue in the fiscal year 2017- Managing Board launches 'DRIVE>2021' strategy programme - Significant increase in contract portfolio, revenue and earnings expected by 2021

  • Group revenue rise to new all-time high of EUR 744 million
  • Online Retail business field drives growth in Group's contract portfolio
  • Earnings before interest, taxes, depreciation and amortisation (EBITDA) grow by 2.5 per cent to EUR 234.3 million
  • Financial result significantly improved due to lower interest expenses
  • Earnings before taxes (EBT) of around EUR 30 million in line with expectations
  • 'DRIVE>2021' strategy programme initiated for profitable growth by 2021
  • Outlook for 2018: slight increase in contract portfolio, operating revenue and EBITDA expected as well as EBT approximately on prior year's level
  • Targets for 2021: Significant increase of contract portfolio to more than 220,000 contracts (+>60 per cent), increase in revenue to more than EUR 1 billion (+>33 per cent) and significant increase in EBT to around EUR 50 million (+66 per cent)

Pullach, 14 March 2018 - Sixt Leasing SE, market leader in online sales of new vehicles and specialist in management and full-service leasing for large fleets, has continued its growth course in fiscal year 2017 and once again achieved record revenue. According to preliminary calculations (IFRS), consolidated revenue rose to EUR 744.0 million. This exceeded the previous year's record by 4.2 per cent. As expected, the Group's operating revenue (excluding sales revenue) increased slightly and improved by 5.7 per cent to EUR 454.4 million, reaching a new record level as well. Sales revenue from leasing returns and marketed customer vehicles saw a slight increase of 2.0 per cent to EUR 289.6 million.

The biggest growth driver was the Online Retail business field with a 65.6 per cent increase in the contract portfolio compared to the previous year. Besides the solid growth in the platform business, this business field benefitted also from the high demand for the 'flat rate for the road' from the joint sales campaign with Peugeot and the mobile phone and internet provider 1&1. Overall, the Group's contract portfolio in Germany and abroad (excluding franchise and cooperation partners) rose by 17.0 per cent to 132,900 contracts.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 2.5 per cent to EUR 234.3 million. As expected, consolidated earnings before taxes (EBT) fell by 5.9 per cent to EUR 29.7 million. The main reasons for this were growth investments in digitalisation and IT solutions as well as additional risk provisions for the residual values of leased vehicles. As a result, the operating return on revenue (EBT/operating revenue) fell slightly by 0.8 percentage points to 6.5 per cent, but remained above the target figure of 6.0 per cent. The equity ratio amounted to 14.2 per cent, down from 16.6 per cent in the previous year, and was thus also further above the minimum target of 14.0 per cent.

Gross Cash flow improved by 11.2 per cent to EUR 216.7 million. Investments in lease assets increased by 31.3 per cent to EUR 619.2 million.

The financial result again improved significantly: despite the considerably increased lease assets, the previous year's result of EUR -19.5 million shrank by 16.8 per cent to EUR -16.2 million, thus by twice as much as in 2016. The main reason for this was the repayment of a portion of the Core Loan in the amount of EUR 300 million to Sixt SE at the mid-year point. The volume was replaced by independent financing instruments at significantly improved parameters, resulting in a further significant reduction in interest expenses in the second half of the year.

All in all, the consolidated net profit of Sixt Leasing SE amounted to EUR 20.9 million, which corresponds to a decline of 15.2 per cent compared to the previous year. Despite the high growth investments, the Managing Board plans to propose a stable dividend of EUR 0.48 per share for the fiscal year 2017 to the Annual General Meeting on 19 June 2018, subject to the approval of the Supervisory Board. This dividend proposal corresponds to a pay-out ratio of around 47 per cent of net profit and to a dividend yield of 2.5 per cent on the basis of the 2017 year-end share price. The ratio therefore lies within the communicated target range of 30 to 60 per cent of net profit.

Thomas Spiegelhalter, CEO of Sixt Leasing SE: "In 2017, we continued on our growth course and, in particular, successfully promoted the digitalisation of new vehicle sales. In 2018, we intend to lay the foundation for even stronger and more profitable growth in the future. To this end, we have initiated the strategy programme 'DRIVE>2021'. The name stands for Digitalisation, Risk management, Internationalisation as well as Volume and Earnings growth up to the year 2021. The aim of 'DRIVE>2021' is to increase the pace of digitalisation, to actively manage potential risks from diesel residual values, to further push ahead with internationalisation and to significantly increase the contract portfolio as well as earnings. First measures necessary for the implementation of the programme have already been initiated. 2018 will therefore become a transitional year. Over the next four years, however, we expect a noticeable positive effect, especially in the Online Retail and Fleet Management business fields, accompanied by a significant increase in contract portfolio, sales and earnings of the Sixt Leasing Group."

Leasing segment (Fleet Leasing and Online Retail)
The contract portfolio in the Leasing segment, which comprises the Fleet Leasing and Online Retail business fields, developed very positively in the fiscal year 2017. It rose by 24.7 per cent to 93,500 contracts (31 December 2017), three times as much as in the previous year. Online Retail continued its dynamic growth and increased the contract portfolio by 65.6 per cent to 45,400 contracts, as expected. At the same time, Fleet Leasing recorded a slight increase of 1.2 per cent to 48,100 contracts. Total revenue of the Leasing segment increased by 1.8 per cent to EUR 637.8 million. EBITDA improved by 2.3 per cent to EUR 230.0 million. EBT amounted to EUR 25.6 million and was thus 8.7 per cent below the previous year's figure.

Fleet Management segment
The contract portfolio in the Fleet Management segment increased further in 2017 and rose by 1.9 per cent to 39,400 contracts (31 December 2017) compared to the previous year. Total revenue again showed significant growth and climbed by 21.9 per cent to EUR 106.1 million. The main reason for this was the complete takeover and associated full consolidation of Sixt Mobility Consulting AG in Switzerland in the second half of 2016. As a result, the earnings figures continued to develop positively. EBITDA rose by 11.7 per cent to EUR 4.3 million, EBT even by 16.3 per cent to EUR 4.1 million.

Group financing
In the fiscal year 2017, Sixt Leasing was able to repay a significant portion amounting to EUR 300 million of the Core Loan provided by Sixt SE at the earliest possible point in time as planned, in particular through the successful placement of the debut bond for EUR 250 million. The remaining partial amount of EUR 190 million is to be repaid according to plan in 2018. This means that the reorganisation of Sixt Leasing Group's financing from Sixt SE to its own external financing instruments, which began in 2015, is still completely on schedule.
Björn Waldow, CFO of Sixt Leasing SE: "With the successful repayment of the largest instalment of the Core Loan to Sixt SE to date, we are now on the home straight in terms of the reorganisation of our Group financing. The repayment of the remaining EUR 190 million in the current year will enable us to refinance our business completely independently of our main shareholder and further reduce interest costs."

Risk situation
The Managing Board is continuing to keep a close eye on the discussion regarding potential driving bans for older diesel vehicles. As of 31 December 2017, Sixt Leasing SE in Germany held approximately 5,600 diesel vehicles with Euro-5 and Euro-4 standard which are not covered by buyback agreements. As new diesel cars that do not comply with the Euro-6 standard are no longer registered since the end of 2015, the number of cars with a Euro-5 standard and below continues to fall. By the end of 2018, the Managing Board expects the number of such diesel cars to fall to merely around 2,500 vehicles.
 

Strategy programme 'DRIVE>2021'

Digitalisation
Sixt Leasing wants to push ahead with the digitalisation of its business model even more quickly, especially in the Online Retail business field. To this end, new functions and services are to be introduced gradually on the sixt-neuwagen.de online platform from 2018 year onwards, such as a further optimised completely digital ordering process, a set of separately bookable service products, a demand configurator and a customer portal. In addition, the company aims to optimise interfaces to the 'analogue world' and thus improve the customer experience by establishing own locations for the delivery and return of leased vehicles in important metropolitan areas. In the Fleet Management business unit, the IT infrastructure is to be optimised in order to further improve customer processes and services and to reach new customer groups.

Risk management
Sixt Leasing intends to considerably improve the risk-return profile in the years to come. For this purpose, the company plans to reduce the potential risk of diesel vehicles in the contract portfolio significantly. This is to be accomplished through the reduction of the number of new contracts of diesel vehicles without a buyback agreement. Corresponding measures have already been initiated. The aim for the year 2018 is to reduce the number of new contracts for diesel vehicles without a buyback agreement significantly to around 15 per cent.

In the Online Retail business field, Sixt Leasing has been implementing this strategy since December 2017 successfully without any loss of volume and margin. Meanwhile, almost no new contracts for diesel vehicles without a buyback agreement are concluded here. This is accomplished in particular through active price management that steers customers to order petrol vehicles. The success of these measures underlines the strength and unique flexibility of the Online Retail business model.

Also in the Fleet Leasing business field, the company has taken first initiatives in the context of a detailed action plan on a single-client basis to reduce the potential risk of diesel vehicles. Due to the particularities of the fleet business, it will however take longer until the measures lead to decisive improvements.

Moreover, the marketing of vehicles in foreign markets through the company's own B2B auction platform is to be intensified in order to reduce the dependency on the German used car market. For this purpose, more and more international dealers are being linked to the platform.

Finally, the customer structure is to be further diversified through a stronger focus on smaller corporate customers, thus reducing the dependency on large customers.

Internationalisation
Sixt Leasing intends to expand both in Germany and abroad. In the Online Retail business field, the first step will be to optimise the business model and to further strengthen the position on the domestic market. To this end, the company wants to improve digital and analogue processes and boost sales, for example through sales cooperations and targeted special promotions for existing clients. In 2018, sixt-neuwagen.de will be prepared for transmission to private and commercial customers in other European countries. From 2019 onwards, the gradual expansion into selected markets such as France, Italy or Spain is planned. Simultaneously, Sixt Leasing wants to push ahead with the internationalisation in the Fleet Management business unit in a total of eight to nine European countries to cover the majority of the European market.

Volume and earnings growth
For the financial year 2018, the Managing Board expects a slight increase in the Group's contract portfolio. New business in Online Retail is expected to grow by around 20 per cent compared to the previous year's figure of around 12,000 new contracts (excluding contracts from the 'flat rate for the road' campaign with Peugeot and 1&1). In the Fleet Management business unit, the Managing Board anticipates a slight increase in the contract portfolio, while in the Fleet Leasing business field it anticipates a slight decline of the contract portfolio, especially due to active risk management regarding new diesel vehicles without a buyback agreement. According to the Managing Board's assessment. Operating revenue should increase slightly.

EBITDA is expected to increase slightly in 2018 as well. For EBT, the Managing Board expects a figure approximately on the prior year's level. This is mainly due to measures which have been planned for the year 2018 in the context of the 'DRIVE>2021' strategy programme, especially active risk management as well as investments in IT and human resources to optimise the business model and to prepare the internationalisation. The investments form the basis for medium-term growth, particularly in the Online Retail and Fleet Management business fields.

Moreover, the Managing Board expects that EBT will be higher in the second half of the financial year 2018 than in the first half. This is mainly due to the interest savings resulting from the reorganisation of Group financing and to the return of the first vehicles from the 'flat rate' campaign with 1&1 in spring 2017. Operating return on revenue is expected in line with the 6 per cent target in 2018.

Through the positive effects from the initiated measures of the 'DRIVE>2021' programme, the Managing Board expects a medium-term growth of the Group's contract portfolio, namely up to the end of the 2021, by at least 60 per cent to more than 220,000 contracts, whereby the Online Retail business field is to contribute more than 110,000, the Fleet Management business unit more than 60,000 and the Fleet Leasing business field around 45,000 contracts.

For consolidated revenue, the Managing Board forecasts a growth of at least a third to more than EUR 1 billion by 2021, whereby operating revenue is to increase disproportionately by 50 per cent to around EUR 700 million. The Online Retail and Fleet Management business fields are expected to be the main growth drivers.

By 2021, EBITDA is expected to increase to around EUR 400 million and EBT to around EUR 50 million. This corresponds to an increase by around two thirds in each case compared to 2017. Thus, the Managing Board expects an operating return on revenue of around 7 per cent in 2021.


The Sixt Leasing Group in 2017
(Preliminary figures in accordance with IFRS)1


Revenue performance

in EUR million20172016Change in %
Leasing segment 637.8 626.8 +1.8
Fleet Management segment 106.1 87.1 +21.9
Consolidated revenue744.0713.9+4.2
thereof consolidated operating revenue (without sales revenue) 454.4 430.0 +5.7
thereof sales revenue 289.6 283.9 +2.0
 

Earnings performance

in EUR million20172016Change in %
Fleet expenses and cost of lease assets2 460.7 439.3 +4.9
Personnel expenses 33.0 25.0 +32.1
Net other operating
income/expense
-16.0 -21.0 -23.8
EBITDA234.3228.6+2.5
Depreciation and amortisation 188.3 177.5 +6.1
Net finance costs -16.2 -19.5 -16.8
Earnings before taxes (EBT)29.731.6-5.9
Operating return on revenue (%)26.57.3-0.8 points
Income tax expenses 8.8 6.9 +27.0
Consolidated profit 20.9 24.6 -15.2
Earnings per share (in EUR)3 - basic and diluted 1.01 1.19 -
 

Further KPIs

in EUR million31.12.201731.12.2016Change in %
Total equity and liabilities 1,442.8 1,172.2 +23.1
Lease assets 1,219.2 1,020.8 +19.4
Non-current liabilities to related parties4 - 490.0 -100.0
Current liabilities to related parties5 193.9 3.8 >+100
Financial liabilities6 865.9 353.7 >+100
Equity 205.1 194.7 +5.4
Equity ratio (%) 14.2 16.6 -2.4 points
 20172016Change in %
Gross Cash flow 216.7 194.8 +11.2
Investments in lease assets7 619.2 471.7 +31.3


1 Due to roundings it is possible that selected figures in this Press Release cannot be added up to the amount recorded and that the year figures listed do not follow from adding up the individual quarterly figures. For the same reason, the percentage figures listed may not always exactly reflect the absolute numbers to which they refer.
2 Ratio of EBT to operating revenue
3 Ratio of Group surplus attributable to the Group shareholders to weighted number of shares for the period
4 Liabilities to Sixt SE (Core Loan)
5 Mainly liabilities to Sixt SE; including EUR 190.0 million Core Loan
6 Current and non-current financial liabilities, including finance leases
7 Value of vehicles added to the leasing fleet


About Sixt Leasing:

Sixt Leasing SE (WKN: A0DPRE / ISIN: DE000A0DPRE6) based in Pullach near Munich is market leader in online sales of new vehicles as well as specialist in management and full-service leasing of large fleets. With tailor-made solutions, the company enables the longer-term mobility of its private and corporate customers.

Private and commercial customers use the online platform sixt-neuwagen.de to lease new vehicles affordably. Corporate customers benefit from the cost-saving leasing of their vehicle fleet and from efficient fleet management.

Sixt Leasing SE has been listed in the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) since 7 May 2015. In fiscal year 2016, the Group generated consolidated revenue of EUR 744 million.

www.sixt-leasing.de


Contact:

Sixt Leasing SE
Investor Relations
Stefan Kraus
+49 89 74444 4518
ir-leasing@sixt.com


Note:
All fiscal year 2017 figures in this release are preliminary and subject to possible change. The final and audited 2017 consolidated annual financial statements for Sixt Leasing Group will be published on 17 April 2018.



14.03.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Sixt Leasing SE
Zugspitzstraße 1
82049 Pullach
Germany
Phone: +49 (0)89 744 44 - 4518
Fax: +49 (0)89 744 44 - 8 4518
E-mail: ir-leasing@sixt.com
Internet:http://www.sixt-leasing.de
ISIN: DE000A0DPRE6, DE000A2DADR6
WKN: A0DPRE
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange; Luxemburg

 
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663827  14.03.2018 

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