Sixt lowers EBT forecast for 2024 after a slight miss in Q2
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Sixt’s revenue rose 8.9% y/y to €1.01 billion, topping analysts estimate of €991.2 million while EBT came in at 62.9 million, slightly below analysts estimate of €63.3 million (management midpoint guidance: €75 million)
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Sixt said while demand for its mobility services remains high and rental prices stabilized, there is a high degree of uncertainty regarding residual values and is, therefore, lowering its EBT forecast for the full year to a a range of €340 to €390 million (analysts estimate: €376.5 million) from €350-€450 million previously.
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Revenue growth was strongest in North America (+26.8%) and weakest in Europe (+1%). Germany revenue was up 4.3%.
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Its depreciation of rental vehicles increased 64% y/y to €226 million, led by North America which rose from €16 million to €97 million (Sixt said it has a higher share of risk vehicles in U.S). Depreciation of rental vehicles in Germany fell 23% to €49 million while that of Europe grew 37% to €80 million.
Assessment
Though the data indicated that residual values are still declining, I expected the company to managed it well from Q2 and beyond given the measures put in place such as fleet rotation. Given the uncertainty surrounding residual values, I think it’s possible to see a downward EBT revision as we move through the year.
Sixt’s significant growth in North America proofs that the company could be taking market share from the likes of Hertz and Avis who aren’t doing well operation-wise. Performance in Europe was disappointing though.