Europcar Group: Q3 Revenue and Adjusted Corporate Ebitda Increase Driven by Strong Leisure Momentum

Regulatory News:

Europcar (Paris:EUCAR) announces today its results for the third quarter and the first nine months of 2016.

Philippe Germond, Chairman of the Management Board stated:
"These solid results confirm the robustness of the Group business model and its capacity to deliver sustained profitable growth. The strong summer season was totally in line with our expectations, successfully supported by our brand strategy notably in Southern Europe and by operational excellence everywhere in the group. In addition, we have fully enjoyed the benefit of the reshape of the capital structure following the IPO allowing us to register a record Net Profit close to 100 million euros for the first nine months. As stated during our first investor day on Oct. 4, this positive growth trend of our revenues and profitability enables us to confirm our FY 2016 Guidance.”

Revenues

Q3 2016 total revenue amounted to €707 million compared to €693 million in 2015, representing a 5.1% increase at constant currency. Excluding Locaroise, its third French Franchisee (fully consolidated since July 1^st 2016), total revenues growth reached 4.5%. This increase is mainly driven by a +5.3% growth at constant currency in rental revenue (€665 million) partly off-set by the decrease in petrol prices. This performance was supported by a good leisure momentum across all our brands, and an improvement in the Business segments compared to H1 2016.

Rental days volume increased by 6.5% compared to Q3 2015, at 19.0 million, thanks to a positive evolution in leisure over Q3 on both Europcar® and InterRent® brands, notably in Spain, Italy and Portugal. The three Business Units of Cars, Vans & Trucks and Low cost all contributed to this performance. Compared to the third quarter 2015, all countries enjoyed growth except Belgium, which was flat despite consequences of the terrorist attacks.

RPD for the Cars business unit was up 0.8% at constant currency, despite the French terrorist attack in Nice in July, and thanks to strong yield management. On a consolidated basis, the Q3 RPD decreased by 1.1% at constant currency impacted by the success of InterRent and the development of the Vans & Trucks strategy.

For the first nine months of the year, total revenues amounted to €1,655 million, up 2.4% at constant currency compared to last year. Excluding petrol impact and the Locaroise acquisition, the increase was 2.4% at constant currency.

Adjusted Corporate EBITDA

Q3 Adjusted Corporate EBITDA reached €159 million versus €154 million in Q3 2015 reflecting the strong performance during the summer season despite the negative currency effect linked to the depreciation of the pound sterling. The growth amounted €7 million (+4.5%) at constant currency. Q3 Adjusted Corporate EBITDA margin reached a record level of 22.5%.

The last twelve months Adjusted Corporate EBITDA amounted to €250 million, up 1.1% year over year, despite a challenging environment since the beginning of 2016. This performance demonstrates the robustness and resilience of the Group’s business model. The latter relies on a de-risked fleet asset base and a capacity to deliver sustained profitable growth by leveraging on the different pillars of its state of the art revenues and capacity management (namely volume, price and utilization rate), while optimizing its cost structure and building the future. Europcar Group pursues its investments in the deployment of InterRent brand and network, in its customer journey programs, IT and Europcar Lab’s, etc.

Operating income

Q3 operating income came in at €169 million in 2016, compared to € 163 million in 2015.
For the first nine months, operating income was €241 million versus €182 million in 2015. Last year’s figure included IPO costs and non-recurring items (notably the net negative impact of certain proceedings and reorganization charges linked to the Fast Lane transformation plan roll out).

Net Profit

Q3 net profit amounted to €96 million in 2016, compared to €99 million in Q3 2015. This slight decrease was notably linked to the pound sterling currency effect and the further investments in Ubeeqo and Car2Go Europe (both equity accounted investments).

For the first nine months, net income was a profit of €99 million in 2016 compared to a loss of €57 million in 2015. This improvement reflects the full benefit of the reshape of the capital structure following the IPO at the end of Q2 2015, while last year was also impacted by other non-recurring items.

Corporate free cash flow and Corporate Net Debt

Corporate free cash flow amounted to €84 million in Q3 compared to €92 million last year. For the first nine months Corporate free cash flow was €166 million compared to €116 million for the same period in 2015. This Corporate free cash flow encompassed Adjusted Corporate EBITDA, flat on a reported basis year over year at €214 million, and a good management of non-fleet working capital over the period. As a reminder, 2015 free cash flow was also impacted by one-off cash items.

Corporate net debt amounted to €155 million as of September 30, 2016 (vs. €235 million as of December 31, 2015). The corporate net debt leverage is at 0.6x².

Acquisition plan

The Group pursued its dynamic acquisition plan, reaching recently a further step in its path to be a key mobility provider with the acquisition of Brunel. As a ride-hailing company, Brunel allows the Group to give its customers even greater choice for their travel needs, providing Europcar with a strong competitive advantage.

As a reminder, since the beginning of 2016 the Group has acquired Locaroise, its third French Franchisee (fully consolidated since July 1^st), Bluemove a mobility tech start-up and car sharing leader in Spain, through Ubeeqo, as well as a minority investment in Wanderio, a multi modal search and comparison platform. Over the first nine months of 2016, Europcar has cashed out about €27 million in its acquisition plan.

Confirmation of 2016 full year guidance

As a results of the strong performance over the summer season, the Group reiterates the 2016 guidance, announced on July 25, 2016, showing the resilience of its business model while facing a number of headwinds, including an increasingly unfavorable currency from the depreciation of the pound sterling. As a reminder, the group is committed to the following guidance for the full year:

• Slight increase of revenue on an organic basis³
• Adjusted Corporate EBITDA above last year €251million
• Adjusted Corporate EBITDA conversion to Corporate free cash flow above 50%.

In addition, considering acquisition achievements for this year 2016, the Group will deliver to its shareholders a dividend pay-out to an exceptional level of at least 50% based on 2016 Net Income⁴.

About Europcar Groupe
Europcar shares (EUCAR) are listed on the Euronext Paris stock exchange. Europcar is the European leader in vehicle rental service and is also a major player in mobility markets. Active in more than 140 countries, Europcar serves customers through an extensive vehicle rental network comprised of its wholly-owned subsidiaries as well as sites operated by franchisees and partners. In addition to the Europcar® brand, the company offers low-cost vehicle rentals under the InterRent® brand. A commitment to customer satisfaction drives the company and its 6,000 people forward and provides the impetus for continuous development of new services. The Europcar Lab was created to respond to tomorrow’s mobility challenges through innovation and strategic investments, such as Ubeeqo and E-Car Club.

Forward-looking statements
This press release includes forward-looking statements based on current beliefs and expectations about future events. Such forward-looking statements may include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and/or expectations with respect to future financial results, events, operations and services and product development, as well as statements, regarding performance or events. Forward-looking statements are generally identified by the words "expects”, "anticipates”, "believes”, "intends”, "estimates”, "plans”, "projects”, "may”, "would”, "should” or the negative of these terms and similar expressions. Forward looking statements are not guarantees of future performance and are subject to inherent risks, uncertainties and assumptions about Europcar Groupe and its subsidiaries and investments, trends in their business, future capital expenditures and acquisitions, developments in respect of contingent liabilities, changes in economic conditions globally or in Europcar Groupe’s principal markets, competitive conditions in the market and regulatory factors. Those events are uncertain; their outcome may differ from current expectations which may in turn materially affect expected results. Actual results may differ materially from those projected or implied in these forward-looking statements. Any forward-looking statement contained in this press release is made as of the date of this press release. Other than as required by applicable law, Europcar Groupe does not undertake to revise or update any forward-looking statements in light of new information or future events.

The results and the Group's performance may also be affected by various risks and uncertainties, including without limitation, risks identified in the "Risk factors" of the Annual Registration Document registered by the Autorité des marchés financiers on April 14, 2016 under the number R. 16-021 and also available on the Group's website: www.europcar-group.com.

This press release does not contain or constitute an offer or invitation to purchase any securities in France, the United States or any other jurisdiction.

Further details on our website:
finance.europcar-group.com

Note: This press release contains unaudited consolidated financial figures established under IFRS by Europcar Groupe’s Management Board and reviewed by the Supervisory Board on November 7^th, 2016.

¹ Or 4.5% on an organic basis, ie at constant currency and excluding Locaroise fully consolidated since July 2016.
² Based on last twelve months Adjusted Corporate EBITDA
³ At constant currency and perimeter, excluding petrol impact
⁴ Subject to the approval of the General Assembly

Appendix 1 - Management Profit and Loss

Appendix 2 - IFRS Income Statement

Appendix 3 - Reconciliation

Appendix 4 - Balance Sheet

Appendix 5 - IFRS Cash Flow

Appendix 6 - Debt

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