SIXT becomes “Europe's largest mobility service provider”
Not only was 2018 SIXT's most successful fiscal year ever, but the rental giant also claims it became Europe's largest mobility service provider last year.
SIXT is in the habit of breaking records. The annual report for 2018 presented today in Munich shows record results for the fifth year running. Consolidated revenue rose 12.6% to €2.93 billion, earnings before taxes (EBT) increased by no less than 86.1% to €534.6 million.
That includes the one-time income from the sale of SIXT's share in DriveNow to BMW. But even excluding that, EBT still rose by 17.2% to €336.7 million (mainly due to earning contributions from France, Italy, Spain and the US). Thanks to this above-average growth, the dividend on ordinary shares has been proposed to increase from €1.95 in 2018 to €2.15 this year (preference shares: €1.97 to €2.17).
Some key findings from the annual report:
- SIXT Group revenue increased 7% to €1.62 billion in its home market Germany, with both the Rental and Leasing business units contributing to growth.
- Outside Germany, SIXT grew thanks to the expansion of its Rental business unit and generated €1.31 billion in consolidated revenue (+20%).
- The share of foreign business in consolidated operating revenue increased from 46.1% in 2017 to 49.6% last year.
- SIXT Rental expanded its leadership in Germany and won greater market shares in France, Spain, the UK and other core markets.
- SIXT USA continued its expansion as number four on the world's largest vehicle rental market, generating €382.4 million in revenue (+19%).
- Operating revenue from the Vehicle Rental business unit rose 14.2% to €2.13 billion (with 57.8% coming from outside Germany).
- Operating revenue from the Leasing business unit (excluding used-vehicle sales) rose 5.4% to €467.9 million.
- Consolidated profit (including minority interests) more than doubled to €438.9 million.
“Economically, SIXT has never been as strong as it is today,” said Erich Sixt (pictured right), CEO of SIXT SE. “In terms of Group revenue, we are now the largest European mobility service provider in our industry. We want to keep driving this growth forward, especially by digitising the Rental business – thus becoming a global provider of individual mobility.”
Driving the digitisation of its business, SIXT recently launched SIXT ONE, the world's first integrated mobility platform, and a new app. SIXT ONE offers the products SIXT rent, SIXT share and SIXT ride all 'under one roof'. Launched in Berlin, SIXT share – merging rental and carsharing –is also available in Hamburg from today. It will expand further in Germany and beyond.
“When we talk about vehicle sharing and ride-hailing, it comes back to the success of local heroes”, says Alexander Sixt (pictured left), Chief Strategy Officer at SIXT SE, “but we are proving that mobility can and should be international.”
SIXT does not want to become the largest free-floating carsharing provider: “Look at the numbers, carsharing is rarely a viable business and not to be compared with our car rental activity.” But it is complementary, as during the week car rental is popular and carsharing seems to peak in the weekend.
“Also in the context of integrated mobility, it’s not about becoming the number 1 in one activity, it’s about becoming a leader in the combined offering. And that’s what we are doing,” says Alexander Sixt.
“With our increased digital competences we bring together the new carsharing solution and our car rental service, giving our customers increased flexibility to be as mobile as they need.”
The customer, an oft-recurring word: “Our customers are key”, Alexander Sixt affirms. And he also means the corporate customer. “For example, the SIXT drive solution with ride-hailing services will first and foremost zoom in on corporate customers.”
“If you look at the taxi expenses of multinational companies, these are often 4 to 5 times higher than the cost of ride-hailing. So with our new mobility portfolio, we have an interesting role to play and a price-attractive solution as an alternative”, says Alexander Sixt.
What’s next for Sixt Leasing? “We have to admit that we struggled a bit with the expansion of our leasing activity, and we need to extend our geographic coverage, as we are not yet present in interesting markets like the UK and the Benelux. We are now boosting France as a new country and we will continue to emphasise our leasing activities, as we recently appointed a new CEO and a new team to support growth in leasing.”
Despite weaker macro-economic conditions, SIXT expects ongoing growth in 2019, driven mainly by demand for its Rental product outside Germany. “We see a strong development of our business in Europe, in countries like Spain and Italy for example. But also outside of Europe, with our activities in the USA emerging, and the importance of our Japanese business as a gateway to Japanese leisure customers in both Europe and the USA rising”, says Erich Sixt.
Further expansion in the European countries outside Germany and in the USA, continuous digital interlinking of the fleet and gradual implementation of the service range in the SIXT app: all that will require further investments in the medium term. And what about China?
“China is an extremely difficult market,” says Alexander Sixt. “We can be there with our digital platform, but we won’t be, as it makes no business sense: China’s heavy regulation – for licence plates and authorisation to operate for example – its complex structure, its very strong internal Chinese market of suppliers and its low wages, do not make it a market for us to invest in at the moment.
Commenting on the reluctance of foreigners– the main target group for any presumptive SIXT Rental operation in China – to take to the wheel, Erich Sixt observed: “I don’t know if you’ve ever been to Shanghai or Beijing, but I would not want to drive a car there myself.”
Does SIXT’s growth also come with an increased investment in EVs? “We would love to,” says Alexander Sixt, “but we need to follow market reality. In our carsharing programme, the demand for EVs is twice as high as the supply we get from OEMs.”
Added Erich Sixt: “Like we have always done, we provide the car or the mobility solution that the customer wants. That goes for EVs as well. It’s not our job to decide for the customer. They are intelligent enough.”