In its first quarter earnings report released on May 13, Sixt outlined new service initiatives the company is implementing to adjust to the coronavirus pandemic.
The company reported that demand from business and corporate customers is currently flat due to the general restrictions on travel and the almost complete closure of commercial airports. However, in its urban outlets in Germany Sixt is registering “a further increase in demand from private customers for flexible rental solutions, which has already returned to pre-Corona levels,” the company said in a statement.
Seeing carsharing and traditional rental car as a safe alternative to public transportation during the pandemic, Sixt is expanding these service offerings:
- Flexible daily, weekly and monthly offers for rental cars ("Car on time") through Sixt rent. These come with shorter termination periods and immediate availability without delivery times, offering customers a bespoke alternative to public buses and commuter trains;
- Subscription models with fixed monthly rates for virtually all vehicle classes;
- Expansion of the nationwide fleet in Germany for the carsharing service Sixt share, which is available in Munich, Berlin, Hamburg, and other select German sites. Over 1,000 vehicles have been added since the start of the crisis, the company reported. This service is also seeing customer demand even outstripping pre-pandemic levels at present.
For the quarter, Sixt’s earnings fell 3.4% to EUR 505.7 million ($552 million) from the first quarter of 2019. The first two months of the quarter had seen significant year-over-year growth that was offset in March by a severe drop in revenue following the effects of the worldwide pandemic.
As a result of the pandemic, Sixt downsized its fleet by 13% compared to the average number of vehicles in the previous year. Sixt also initiated efforts to bring down personnel and material costs that will have an annualized effect of over EUR 150 million.
Earlier in the quarter Sixt sold its 41.9% stake in Sixt Leasing SE Hyundai Capital Bank Europe GmbH. The transaction is expected to be completed in the second half of 2020.In terms of outlook, the Managing Board of Sixt SE expects the second quarter of 2020 to see a very strong slump in consolidated operating revenue and Group-EBT given the worldwide travel restrictions. For the full fiscal year 2020, SIXT confirmed its previous expectations and expects to see a sharp decline in consolidated operating revenue compared to last year (discounting the discontinued Leasing Business Unit).
Moreover, the managing board of Sixt SE still expects group earnings to be positive for the full 2020 year, though “very strongly below than that of last year.”
Sixt bases this outlook is based on the assumption that the significant restrictions on private and business travel will gradually be eased.
“This premise is obviously subject to uncertainty,” Sixt continued in the statement, “as no one can foresee the further development of the worldwide pandemic — all the more so as politicians have so far failed to come up with a concrete roadmap as to when travel and mobility restrictions should be comprehensively eased and the economy revived on a larger scale.”