Europcar’s Profit Falls in 2011

Paris-based Europcar announced March 29 its full-year financial results for 2011, reporting consolidated revenues of 1.97 billion euros in 2011 — stable from 2010, according to Europcar’s March 29 release.

Europcar maintained its average revenue per day (up 0.3% at constant exchange rates compared to 2010, and excluding Switzerland) despite increased competition in the European car rental market. In addition, its fleet utilization rate improved to 74% compared with 73.6% in 2010.

Operating profit was 234.6 million euros — down 3.5% with marketing investments made over the year to position Europcar as the European leader. These investments were nearly fully offset by operational efficiencies and strict cost control. Europcar says it has launched several major advertising campaigns in Europe (UK, Germany, etc.) and sponsored the 2011 Tour de France team.

Corporate adjusted earnings before taxes and interest was 120 million euros in 2011 on a pro forma basis (compared with 128.2 million euros in 2010). The company reported that this is due particularly to higher fleet costs still visible during the last quarter of 2011. However, the generation of cash available at the Europcar Corporate level (before interest payments of Europcar Group bonds) has doubled since 2010 and stood at 110 million euros as a result of a special focus on management of working capital requirements excluding vehicle purchase and sale fluctuations.

Improved Debt Profile over the Year
The growth in utilization rate and good cash generation allowed Europcar to significantly reduce drawings on its RCF line, which decreased from 220 million euros at the end of 2010 to 39 million euros at the end of 2011. Total net debt (including off-balance sheet vehicle rentals) was reduced from 3,019 million euros to 2,905 million euros between December 2010 and December 2011 at constant exchange rates.

“Our 2011 results reflect a challenging 2011 year, in a very competitive environment, nonetheless resulting in a stable performance,” said Roland Keppler, CEO of Europcar Groupe, commented. “I have been appointed six weeks ago to accelerate the transformation of the company and to make Europcar an accessible and relevant brand for our customers.

“Our ‘Fast Lane 2014’ Transformation Agenda covers three periods of time: immediate actions related to costs and cash management; mid-term priorities with notably a product portfolio review and optimization, and an IT review assessment; and from today to the end of 2014, developing new products and redefining our Unique Selling Proposition. This Transformation agenda will enable profitable growth generation, and will make Europcar not only a car rental company, but one of the main actors shaping the future of mobility."

Growth Initiatives Underway
In 2011, Europcar has put in place several initiatives to strengthen its position as the European leader, including:

• A program to improve client relations, including through systematic analysis of customer satisfaction and implementation of optimization action plans.

• A cycling sponsorship initiative (Team Europcar) which raised brand awareness levels in all Europcar European countries, and notably in France (+8 points spontaneous awareness between May and September 2011)

• New innovative services to provide comprehensive mobility solutions to its customers such as car2go, the world’s first one-way mobility service, launched in several European cities and in the United States.

Present in 140 countries, Europcar has 6,600 employees and an average fleet of close to 190,000 vehicles. Europcar is owned by Eurazeo.

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