Wednesday 20th October 2021
Record profit expected
Sixt catapults itself out of the corona crisis
Because of the Corona crisis, Sixt will record its first loss in 50 years in 2020. Twelve months later, the car rental company expects a record profit. Even analysts are surprised by the rapid development.
The largest European car rental company Sixt is rapidly emerging from the Corona crisis. The group is benefiting from rising rental car prices because business has picked up unexpectedly, and is therefore raising its profit and sales forecasts for the second time within a month. The family company from Pullach near Munich now expects sales of 2.1 to 2.3 billion euros for the current year, as Sixt announced. That is 100 million more than expected in September and up to 50 percent more than in the Corona year 2020.
At 390 to 450 million euros, pre-tax profits are even expected to significantly exceed the record level of the pre-crisis year 2019 of 308 million euros. So far, Sixt had calculated with 300 to 330 million euros – analysts had assumed an average of 326 million. That drove the common shares by 3.3 percent over the course of the day to an all-time high of 145.90 euros.
In 2020, the first pre-tax loss in 50 years was 82 million euros. The recovery in tourism and business trips is now facing a shortage of rental cars because many providers – including Sixt – had reduced their fleets during the Corona crisis and the carmakers are having difficulties in ensuring sufficient supplies due to the global chip shortage. That drives up prices. The Federal Statistical Office had determined an increase of 53 percent compared to the previous year for August – also because many vacationers prefer to drive because of the risk of infection.
US demand exceeds expectations
According to Sixt, even after the end of the summer season in September, prices and bookings have not crumbled as much as in normal years. According to preliminary figures, pre-tax profits of 253 (2020: 66) million euros were posted for the third quarter alone, more than analysts had expected and almost four times as much as a year ago. Sales soared between July and September by 72 percent to 795 million euros. In September in particular, demand exceeded expectations in the USA.
“The investments in our internationalization and digitization strategy are increasingly paying off,” said co-CEO Alexander Sixt, who took over the management of the group in June together with his brother Konstantin from father Erich. “In the USA in particular, we are continuing our growth path and have been able to gain market share.” There Sixt – number four on the market – had seized the opportunity during the crisis and secured locations that were coveted by the ailing competition, especially at airports.