In its first quarter 2020 results released on May 5, Europcar Mobility Group outlined a shift in short- and mid-term priorities.
“After a solid start of the year 2020, Europcar Mobility Group was hit by the COVID-19 crisis,” said Caroline Parot, CEO of Europcar Mobility Group, in a statement. “Early March, the drop in the number of bookings accelerated rapidly, first in Italy, and then in all our key geographies.”
“During Q2 and H2, it is likely that we will focus on the domestic customers segment, building on a shift from international to ‘local’ travel, while pushing agility further in terms of cost base.”
Short-term, the company will focus on domestic business as lockdowns and travel bans are progressively lifted.
Midterm, the company will “rethink its priorities, so as to adapt to a ‘new normal,’ given the reinforced digital habits, new safety standards and new travel patterns.” The company plans to double down on its purpose: “Offer attractive alternative mobility solutions to vehicle ownership, in a responsible and sustainable way.”
Europcar said it reduced fleet by 5% in March and 20% in April, “and plans to reduce it further by over one-third in June compared to the same period of last year.” The company plans €850 million ($931 million) in cost reductions by year-end.
Europcar has €321 million ($351 million) new financing facilities, of which €301 million is guaranteed by the French and Spanish states. Europcar stated it “has the financial capacity to face the current situation while allowing to progressively resume its activities post COVID-19 crisis.”
While the company withdrew its guidance in March, Europcar reported “a cautious view for the rest of the year with a full impact of the crisis in Q2 and Q3 (and) revenue likely to be limited to domestic demand.”
Revenue for the quarter was down 10.1% to €557 million ($610 million) compared to the first quarter of 2019. While the first two months saw revenues increase 3.6% compared to the first quarter last year, March revenues dropped 34.6%.
Corporate earnings dropped to €64 million ($70 million) versus €14m in Q1 2019.
Related: Europcar Secures New Funding