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M. Salvatore Catania | Chief Executive Officer of Europcar Group |
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Strategic milestones were successfully
crossed in 2008. These allowed Europcar to
consolidate its European leadership and
significant progress was made in terms of
productivity, with in particular, the synergies
generated by the acquisitions made in
previous years.
However, the sharp decline in the economic situation created new
challenges. To meet this challenge, Euopcar accelerated its initiatives
implemented in the beginning of 2008, aimed at cutting cost, and
improving revenue and cash flow.
Actions aimed at improving our flexibility, our operational efficiency
and our productivity were therefore reinforced. By stepping up its
action plans right from the second half of 2008, our Group focused
on adapting to the business level caused by the crisis in order to
emerge stronger from the crisis and consolidate its position as a
leader in Europe and worldwide. |
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Europcar - European N°1 in passenger
and light utility vehicle rentals |
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Held by Eurazeo since May 2006, Europcar provides its
services to business and private clients throughout
Europe, Africa, the Middle East, Latin America and the
Asia-Pacific region. In 2008, Europcar recorded more than
10 million contracts, had 8,000 employees and a fleet of
more than 225,000 vehicles, excluding franchises. In
2008, Europcar purchased more than 323,000 vehicles.
Europcar and Enterprise Rent-A-Car, the US leader,
signed a strategic alliance in 2008 to create the world’s
largest car rental network, with more than 1.2 million
vehicles and 13,000 agencies worldwide.
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Robust revenues in a tough economic climate,
which weighed on business in the second half of the
year
The Group’s consolidated revenues climbed 2.2% from
2,047 million euros in 2007 to 2,091 million euros in 2008.
Prepared on a pro forma (1) basis and at constant exchange
rate, revenues grew from 2,111 million euros in 2007 to
2,122 million euros in 2008, representing an increase of
0.5%. This increase reflects uneven performance in the first
and second halves of the year: although Europcar’s strong
presence on leading European markets allowed it to offset
the first signs of a slump in demand, the spreading of the
economic downturn throughout Europe especially in the
last quarter weighed heavily on the Group’s operations.
Europcar continued its external growth strategy in 2008
with the acquisition of the Europcar franchise network in
the Asia-Pacific zone. This last acquisition accounted for
89 million euros consolidated revenues in 2008 over a
period of 12 months.
Revenue Breakdown 2008
EBIT dropped in the second half of the year
On an adjusted proforma basis (2) and at a constant
exchange rate, EBIT reached 253 million euros in 2008
versus 298 million euros in 2007. Reducing the operating
margin from 14.1% in 2007 to 11.9% in 2008 reflects the
clear slump in demand starting from September, which
impacted revenues, and the increase in fleet holding
expenses, which could not be fully offset by the
considerable productivity gains generated by the Group
throughout the year and synergies from the consolidation
of companies acquired in 2006 and 2007.
Controlled debt
The Group’s consolidated net debt as at December 31,
2008 stood at 2,490 million euros versus 2,907 million
euros at December 31, 2007.
On a pro forma basis, in other words at constant exchange
rate and including the debt equivalent of operating lease
agreements for the vehicle fleet, the average net debt
changed from 3,558 million euros in 2007 to 3,587 million
euros in 2008 (3), representing 0.8% increase in net debt,
while the Group’s organic growth reached 0.5% within the
year. These changes reflect the Group’s ability to quickly
adapt to shrinking demand: the proportion of fleet
purchases covered by automobile manufacturer trade-in
commitments (more than 90%) helped to immediately
adjust the size of the rental fleet without being overly
affected by the ups and downs of the used car market.
Recognized premium brand and quality service
Europcar stands out as one of the three genuinely world
class players in the car rental sector, thanks to its proprietary
business and vast franchise network. In order to extend its
appeal as a partner of choice, Europcar strives to expand its
brand recognition and the quality of the services offered,
investing in staff training, assisting its franchisees and field
quality controls. Europcar’s commitment to sustainable
development, reflected in its use of LNG powered vehicles
for the past ten years, is an integral part of the Group’s
strategy and will be manifested in other new initiatives in the
very near future.
(1) Revenues prepared on a pro forma basis: including the business of Vanguard EMEA (whose acquisition was finalized on February 28,
2007) for the 12 months of 2007 and the activity of Europcar Australia/New Zealand (acquisition completed on May 1, 2008) for the 12 months
of 2008.
(2) EBIT prepared on an adjusted pro forma basis. including the business of Vanguard EMEA (whose acquisition was finalized on February
28, 2007) for the 12 months of 2007 and the business of Europcar Australia/New Zealand for the 12 months of 2007 and 2008, excluding
expenses from the accounting treatment of the 2007 and 2008 acquisitions and excluding restructuring costs directly linked to those
acquisitions, and before interest charges linked to operating lease agreements for the vehicle fleet.
(3) Including the acquisition debt of Europcar Australia / New Zealand for the twelve months of 2008 and 2007 as well as the acquisition debt
of Vanguard EMEA for the 12 months of 2007.
The Group expects to be confronted with tremendous
challenges in 2009, in line with the contest of the last four
months of 2008, characterized by shrinking demand and
fierce pressure from the competition. Adapting the Group’s
resources to these market conditions has been on top of
management’s agenda for several months now, as
demonstrated by the swift adjustment of the fleet in the 4th
quarter 2008.
Thanks to this ability to rapidly adapt, the quality of its
services and the balanced contribution from the leading
European countries and recreational and business
customers to its business, Europcar will be strengthened by
the current economic difficulties.
Key operational figures
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2007 |
2007 |
2008 |
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Pro Forma |
Pro Forma |
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| Rental days (in millions) |
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55.2 |
59.0 |
59.2 |
Number of rentals (in millions)
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10.3 |
10.8 |
10.8 |
| Utilization rate |
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72.6% |
72.8% |
71.6% |
| Average fleet (in thousands of units) |
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216 |
222 |
226 |
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Compte de résultat simplifié
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| (In million euros) |
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2007 |
2008 |
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Conso |
Pro Forma(1)
constant FX |
Conso |
Pro Forma(1) |
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| Total revenues |
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2,047 |
2,111 |
2,091 |
2,122 |
| Increase in total revenues |
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- |
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2.2% |
0.5% |
Adjusted EBIT(2)(3)
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276 |
298 |
246 |
253 |
| Margin (in % of revenues) |
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13.5% |
14.1% |
11.7% |
11.9% |
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(1) Including 12 months of business in Australia.
(2) Including 12 months of business for Vanguard EMEA in 2007 and adjusted for non recurring items.
(3) Including adjustment of interest rate charges on operating leases linked to the vehicle fleet. |
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Consolidated balance sheet as of December 31, 2008
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ASSETS |
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
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| Goodwill |
612 |
Subscribed capital |
778 |
| Intangible assets |
796 |
Capital reserves and retained earnings |
(126) |
| Plant, property and equipment |
122 |
Shareholders’ equity |
653 |
| Other non-current assets |
35 |
Financial liabilities |
797 |
| Non-current assets |
1,564 |
Other liabilities |
347 |
| Inventories |
17 |
Provisions |
5 |
| Trade receivables |
948 |
Non-current liabilities |
1,149 |
| Other receivables and financial assets |
105 |
Financial liabilities |
2,030 |
| Cash and cash equivalents |
321 |
Trade payables |
772 |
| Leasing and rental assets (fleet) |
1,982 |
Other liability items |
204 |
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Other provisions |
129 |
| Current assets |
3,372 |
Current liabilities |
3,134 |
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| Total assets |
4,936 |
Total liabilities and shareholders’equity |
4,936 |
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For more than ten years now, Europcar has been a flag bearer in the industry. It opened in
2000 an “environmental station” in Paris and was the first rental company to propose
electric and hybrid vehicles. Since then, it has regularly introduced increasing efficient
vehicles in terms of energy consumption and greenhouse gas emissions. It is also a
signatory of the United Nationals Global Compact since April 7, 2005.
However, Europcar has decided to go even further by adopting a strategic approach in
favor of sustainable development. On a market where customers and partners are
increasingly aware of sustainable development stakes, the challenges to be met are many:
• Proposing increasingly innovative cars that are more environmentally-friendly and safer;
• Recycling pollutants and the fluids used to maintain vehicles;
• Educating customers about a responsible and civic way of driving;
• Proposing carbon emissions offset programs to meet the growing expectations of users.
Against this background, Europcar considers sustainable development as an innovation
booster, creator of long-term value. In 2007, this conviction led to the drafting of an
“Environmental charter”, a genuine roadmap for upcoming years. The charter focuses on
strong commitments in four areas: ”Green” vehicles that comply with the most recent
European standards, specific recycling programs for maintain vehicles, internal procedures
specifically with ISO 14001 certification for Corporate countries and the holding, as well as
educating employees and customers about these issues. In June 2008, Europcar
announced the certification of this Charter by Bureau Veritas, an independent agency in
charge of checking the compliance with all commitments including an annual internal audit
of the indicators defined in the Charter.
This is an unprecedented initiative in Europe and confirms Europcar’s path-breaking
mindset in its segment. The challenge now is to encourage each subsidiary to define
progress plans that are consistent with the Charter. Another priority: educate franchisees
about sustainable development, but also customers and employees particularly via the
website.
In this framework, significant projects were launched in 2008, such as the integration of
the carbon offset program with Climate Care as soon as the vehicle is booked.
All these initiatives are directed and deployed by the Europcar International
quality/environment leaders and seven European subsidiaries.
To find out more: microsite.europcar.com/green/
Europcar, the world’s
leading “green” transport
solution company!
In December 2008, Europcar won
the World Travel Awards trophy
for the World’s leading “green”
transport solution company.
Europcar is the first company to win
this environment-related award.
Considered as the “Oscars”
of the tourism industry, the World
Travel Awards reward, through votes
by 167,000 industry professionals,
the success of one operator by region
on the five continents.
Europcar also obtained the 2007
Business Travel Award in the Safety
and Sustainable Development
category, as well as the Oxygen
Award in 2006 and 2007.
These different distinctions underline
the innovative and committed nature
of the group, which has made
the environment its spearhead
for upcoming years.
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