News Detail

Sixt Leasing SE: Operating business development in the first nine months of 2020 in line with expectations

• Further expansion of the digital product and service portfolio
• Group contract portfolio with a slight decline in the first three quarters of 2020 - Increase of nearly four per cent compared to 30 September 2019
• Consolidated operating revenue particularly impacted by COVID-19 pandemic
• Consolidated earnings before taxes (EBT) mainly burdened by increased risk provisioning and transaction-related costs
• Managing Board confirms reduced forecast for 2020

Pullach, 11 November 2020 - Sixt Leasing SE, a leading provider in online direct sales of new vehicles in Germany as well as specialist in the management and full-service leasing of large fleets, has overall developed in line with expectations in the first nine months of 2020 based on the earnings forecast published on 21 October 2020. With a slight decrease in the Group's contract portfolio in the period from the end of December 2019 to the end of September 2020, consolidated operating revenue also declined year-on-year. Consolidated earnings before taxes (EBT) were very significantly below the previous year's level. In the third quarter, the business development was particularly affected by the weaker-than-expected recovery of the overall economic situation. The Managing Board confirms the reduced forecast for 2020.

Business development in 9M 2020
In the first nine months of 2020, the expansion of the digital product and service portfolio in particular was further advanced. In the Online Retail business field, Sixt Leasing launched a sales cooperation with PAYBACK via its online platform sixt-neuwagen.de to market a Kia Stonic "VISION" to private customers. In addition, autohaus24.de was honored with the consumer award "Germany's Best Online Portals 2020" in the category "New Car Portals" from the news channel n-tv and the German Institute for Service Quality, and received the rating "High Recommendation" in the category "Car Leasing: Online Providers" in the FOCUS-MONEY study "Recommended by Customers".

In the Fleet Management business unit, the smartphone app "The Companion" for fleet customers was further developed and, among other things, upgraded with the digital payment function "Shell Payment@Pump". Furthermore, two proven industry experts, Mr. Christian Braumiller and Mr. Michael Poglitsch, were won as new Managing Directors of Sixt Mobility Consulting GmbH. In the Fleet Leasing business field, Sixt Leasing expanded its cooperation with BSH Hausgeräte GmbH in the field of e-mobility.

The contract portfolio in Online Retail fell by 9.9 per cent to 40,000 contracts in the period from the end of December 2019 to the end of September 2020, particularly burdened by a reduced number of new orders due to the economic impact of the COVID-19 pandemic and further vehicle returns from the 1&1 campaign conducted in the 2017 financial year. The contract portfolio in Fleet Leasing declined by 3.7 per cent to 38,900 contracts. In both business fields, business performance during the third quarter did not improve as planned, which is due in particular to the weaker-than-expected recovery in the overall economic situation as well as the ongoing COVID-19 situation. In Fleet Management, the contract portfolio increased by 3.0 per cent to 53,000 contracts in the first nine months of 2020.

Overall, the Group's contract portfolio in Germany and abroad (excluding franchise and cooperation partners) decreased by 3.2 per cent to 131,900 contracts in the period from the end of December to the end of September. Compared to 30 September 2019, the Group contract portfolio recorded an increase of 3.7 per cent.

Consolidated revenue in the first three quarters of 2020 decreased by 10.7 per cent to EUR 565.3 million compared to the same period in the previous year. Operating revenue, which does not include the proceeds from vehicle sales, decreased in the same period by 8.6 per cent to EUR 319.9 million. The "lockdown" in the second quarter of 2020 in the wake of the COVID-19 pandemic had a major impact on the decline in operating revenue, which led, among other things, to a significant reduction in vehicle usage and thus to a drop in usage-related revenue, such as income from fuel revenues. Furthermore in the third quarter of 2020, after the lockdown in the second quarter of 2020, the increase in vehicle usage in particluar did not occur as expected. Sales revenue from the sale of leasing returns and marketing of customer vehicles in Fleet Management declined in the first three quarters by 13.3 per cent to EUR 245.4 million. This decrease was due to a very strong first quarter of the previous year, with very high sales of leasing returns in the Online Retail business field, as well as restrictions on stationary car sales resulting from the COVID-19 pandemic during the first half of 2020.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) decreased in first three quarters of 2020 by 7.6 per cent to EUR 158.6 million compared to the same period in the previous year. Consolidated earnings before taxes (EBT) saw a decline of 76.0 per cent to EUR 5.2 million due to various special effects. The operating return on revenue (EBT/operating revenue) thus amounted to 1.6 per cent (9M 2019: 6.2 per cent). Consolidated profit decreased by 78.7 per cent to EUR 3.4 million compared to the same period in the previous year.

The lower EBT is in line with the adjusted expectations from 20 July 2020 and results, among others, from the general volume effect in sale of lease returns described above, temporary sales support measures, higher marketing expenses at the beginning of the year, transaction-related costs in connection with the closing of the voluntary public takeover offer of Hyundai Capital Bank Europe GmbH (HCBE) in July 2020 as well as a need for additional risk provisioning in the mid single-digit million euro range as part of the regular review of the residual values of the leasing fleet in the first half of 2020. EBT adjusted for one-time and extraordinary effects amounted to EUR 15.1 million in the first three quarters of 2020.

Michael Ruhl, CEO of Sixt Leasing SE: "The challenging economic conditions do not prevent us from continuing to implement our strategy consistently and, in particular, from pushing ahead with the digitization of our product and service portfolio. Our new major shareholder, Hyundai Capital Bank Europe, will support us in this."

In November, Sixt Leasing SE participates in Germany's largest discount campaign with its "Black Leasing Friday", offering private and corporate customers popular new vehicles at especially attractive rates on its online platform sixt-neuwagen.de. Besides, the company plans the introduction of a completely digital order process on sixt-neuwagen.de starting from the 2021 financial year. Beyond that, the business model of Sixt Leasing SE will be extended by used car leasing.

Outlook
As the Managing Board of Sixt Leasing SE announced in its ad-hoc release on 21 October 2020, the expectation for the 2020 financial year - as communicated on 20 March 2020 - presuming a slight year-on-year increase in the Group's contract portfolio and of consolidated operating revenue at approximately the same level as in the previous year can probably not be realized. This is due to a weaker-than-expected business development in the third quarter of 2020 and the prospect of a continuing or even worsening COVID-19 situation in the fourth quarter of 2020. For the current financial year, the Managing Board expects that both the Group contract portfolio and its consolidated operating revenue will probably be significantly below the corresponding figures of last year.

In addition, the Managing Board confirms its earnings forecast, as adjusted on 20 July 2020, that the originally communicated earnings forecast for the 2020 financial year cannot be realized as expected. This is mainly due to the effects of additional risk provisioning and one-off transaction-related costs, which are already incurred in earnings, and other transaction-related costs to be recognized in the fourth quarter.

The Managing Board of Sixt Leasing SE is of the opinion that the strategic partnership with the new major shareholder, HCBE, puts the Sixt Leasing Group in a position to utilise new growth potential together in the future. Furthermore, the Managing Board hopes that the integration of Sixt Leasing into the two international and financially strong Groups of Santander and Hyundai also offers the opportunity to further optimise the company's financing structure.

The Group's Quarterly Statement as of 30 September 2020 can be downloaded from https://ir.sixt-leasing.com/interim-reports.

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About Sixt Leasing:

Sixt Leasing SE based in Pullach near Munich is a leading provider in online direct sales of new vehicles in Germany as well as specialist in management and full-service leasing of large fleets. With tailor-made solutions, the company enables the longer-term mobility of its private and corporate customers.

Private and commercial customers use the online platforms sixt-neuwagen.de and autohaus24.de to lease new vehicles affordably. Corporate customers benefit from the cost-saving leasing of their vehicle fleet and from efficient fleet management.

Sixt Leasing SE (WKN: A0DPRE / ISIN: DE000A0DPRE6) has been listed in the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) since 7 May 2015. In fiscal year 2019, the Group generated consolidated revenue of EUR 824 million.

www.sixt-leasing.com

Contact:

Sixt Leasing SE
Investor Relations
+49 89 74444 4518
[email protected]

The Sixt Leasing Group in 9M 2020 at glance¹

¹ Rounding differences possible
² Ratio of EBT to operating revenue