Sixt Aktiengesellschaft. December, 2012

Transcription

1 Sixt Aktiengesellschaft December, 2012

2 Table of Contents Executive Summary Business Overview Corporate Timeline Key Development Major Investments in the Company Evolution Organizational Structure Operating Subsidiaries and their Performance Product Profile Business Model Sixt Rent-A-Car: Products Sixt Rent-A-Car: Services Sixt Lease a Car: Product and Services Financial and Operational Performance Company Reach & Key Performance Indicators Geographical Segmentation, Fleet Analysis & Employee Strength Valuation Analysis and Financial Summary

3 Table of Contents (Contd.) Annotated Share Price Performance Analyst Recommendations SWOT Analysis Compelling Opportunities Thriving the Company Growth Operational Overview Supervisory Board Profile Management Profile Car Rental Market Consolidated Company Performance in Europe Sustaining the Leadership Position in German Market Competitive Analysis Management/ Future Outlook

4 List of Figures Figure 1: Sixt Corporate Time Line, from Figure 2: Sixt Organizational Structure Figure 3: Sixt Rent-A-Car Business Model Figure 4: Sixt Lease-A-Car Business Model Figure 5: Sixt Share of Online Reservation Out of Total Reservations Figure 6: Sixt Number of Operating Locations in Units, from Figure 7: Sixt Average Number of Employees per Business Segments Figure 8: Sixt Annotated Stock on the Basis of Share Price and Volume Traded Figure 9: Sixt Market Share of Major Players in Europe in Percentage, 2011 Figure 10: Sixt Europe Market Size on the Basis of Revenue, in EURO Million, Figure 11: Sixt Market Share of Major Players in Germany in Percentage, 2011 Figure 12: Sixt Germany Market Size on the Basis of Revenue in EURO Million,

5 List of Tables Table 1: Sixt Financial Overview on the Basis of Revenue and Net Profit Margin in EUR Million and Percentage, 2007-LTM June 2012 Table 2: Sixt Major Investments in the Company Evolution on the Basis of Deal Stake, Deal Value and Implied Enterprise Value in EUR Million and Percentage Table 3: Sixt Operating Subsidiaries and their Performance on the Basis of Stake and Revenue in EUR Million and Percentage Table 4: Sixt Operational Performance on the Basis Rental and Leasing Operating Revenue, Rental Vehicles and Lease Contracts in EUR Million and Units, from Table 5: Sixt Revenue Segmentation on the Basis of Geographical Reach in EUR Million, from Table 6: Sixt Number of Vehicles Added on the Basis of Volume and the Value in EUR Billion and Units, from Table 7: Sixt Financial Overview on the Basis of Revenue, EBITDA Margin and Net Profit Margin in EUR Million and Percentage, from 2008-LTM June 2012 Table 8: Sixt Company Valuation on the Basis of Market Capitalization, Net Debt and Enterprise Value in EUR Million, as on 15th November 2012 Table 9: Sixt Company Multiples on the Basis of Revenue Multiple, EBITDA Multiple and PAT Multiple, from 2008-LTM June 2012 Table 10:Sixt Company Comparables Analysis on the Basis of Market capitalization, Enterprise Value and Company Multiples in EUR Million, as on 15th November 2012 Table 11:Sixt Financial Comparison on the Basis of Revenue in EUR Million, from 2008-LTM Sept 2012 Table 12:Sixt Precedent Transaction Analysis on the Basis of Deal Stake, Deal Value, Implied Enterprise Value and Deal Multiple in EUR Million and Percentage Table 13:Sixt Future Projections on the Basis of Revenue, EBITDA and Expenses in EUR Million,

6 Executive Summary: Sixt Aktiengesellschaft Mobility Solution for Periods Starting from One Day Car to Five Years Company Overview Key Differentiators Management Team Financials Sixt is a car rental and leasing company which specializes in providing high quality car rent and leasing services both on-airport and off-airport. The company is the market leader in Europe s largest car rental market: Germany with a market share of 30% in The company has a network of 530 rental offices in Germany. The company rents from normal small city cars to highly luxurious car brands such as Limousine, Ferrari and others Has the largest BMW and Mercedes Benz fleet in the world Has offices in more than 4,000 locations globally and operates in 105 countries The company has a fleet of more than 200,000 vehicles globally Erich Sixt: Managing Director and Chairman of the Board Thorsten Haeser: Managing Director and Chief Sales Officer Particulars LTM Revenue 1, , , , , ,590.5 Growth% 8.7% 13.1% -9.7% -4.0% 1.7% 1.7% Net Profit% 6.0% 3.5% 0.6% 4.6% 6.2% 5.7% Projections (in EUR Mn) Note: LTM refers to last twelve months ending September2012 Competition and Positioning Is the market leader in the car rental market of Germany (had a market share of 30.4% in 2011), Switzerland and Austria In 2011, the company had a market size of 8.6% in Europe and was positioned as the 4 th largest car rental company in Europe Business Strategies3 The company has established a strategic partnership with various airlines such as the partnership with the Spanish airline Liberia according to which the Liberian customers were able to get special packages while renting a Sixt car The company has also entered into partnership with various hotels such as Preferred Hotel Group (PHG) due to which the customers of both the entities will benefit In addition the company is also planning to enter a partnership with airline airbaltic 6

7 Business Overview: Company Timeline and Evolution The company was founded in 1912 by Martin Sixt In 1927, Isotta-Frascini and Renault joins the fleet business as the company was using imported cars whose spare parts were very expensive In 1946, the company restarted its operations after the second world war In 1967 became the first company to introduce car leasing In 1991, the company started its official international expansions with licensees In 1994, Sixt became the leading car rental company in Germany In 2003, the company had launched a low cost rental business segment named as SIXTI in Europe The company had also launched holiday cars, a holiday car rental business segment In 2005, the company had expanded its business network further in Asia-Pacific region In 2011, the company had launched Sixt Limousine and Sixt leasing services in Serbia for both corporate as well as private/ individual customers In 1977 the company opened stations in all major airports of Germany In 1986, the company had been listed on the stock exchange and was renamed as Sixt Aktiengesellschaft In 1997, the company developed a call centre with 150 employees in Rostock and opened 130 stations in France, among others at the airports in Paris, Nice, Lyon and Bordeaux In 1998 the company opened offices at all the major airports in Italy, Ireland, the Netherlands, Hungary, Malta, Spain, Portugal, the Czech Republic, Tunisia, Morocco, Martinique, Guadeloupe, La Reunion and New Zealand In 2000, Sixt opened the e-commerce platform for cars In 2006, Sixt opened a network of stations in Spanish market The company also expanded its services to the US and also added Australia, Singapore, New Zealand and others to its portfolio of franchisee countries In 2007, the company recorded highest sales revenue and earning targets In 2008, the company was declared as the first global car rental company In 2010, the company expanded its North African network to Libya 7

8 Business Overview: Major Investments in the Company Evolution Acquisition, Joint Venture and Merger Announced Date Target Deal Type Stake % Deal Value (USD mm) Implied EV (USD mm) Transaction Rationale 22/06/12 24/05/12 Sixt e-ventures GmbH: Autohaus24 GmbH Sixt e-ventures GmbH: Preis24.de GmbH Block trade 30.1% N/A N/A Acquisition 60% N/A N/A The acquisition of Sixt e-ventures- Autohaus24 by Axel Springer Auto-Verlag GmbH was in accordance with the deal made by the two companies in 2009 in which Axel Springer Auto-Verlag GmbH had the option to acquire as much as 50% stake in Autohaus24 until 2012 Post deal, the Director of Auto Bild group, Managing Director of Axel Springer Auto Verlag and Konstantin Sixt became the Managing Directors of autohaus24.de 19/08/10 Sixt Aktiengesellsc haft Buyback 4.4% The company went for share buyback deal in order to reduce the company s share capital by retiring these stocks 17/09/09 Sixt e-ventures GmbH: Autohaus24 GmbH Acquisition 19.9% N/A N/A N/A 10/06/06 Sixt Aktiengesellsc haft Private Placement 9.01% Till March 31, 2012 company had repurchased 1,797,568 ordinary shares Source: Ken Research 8

9 Product Profile: Contd. No Fixed Costs, One Time Rental Fee and All Inclusive Minute Rates Sixt Rent-A-Car: Services The services provided by the rental business segment includes reservation, pickup and drop-off services. These rental services are offered in Germany, France, the UK, Spain, the Benelux, Monaco, Austria and Switzerland covering more than ~% of Europe geographically One of the popular service is the Sixt card service which can be used globally anywhere. These cards make mobility service more efficient, fast and cheaper as the card can store the rates which one negotiates from the company and thus be used globally anywhere providing worldwide access to cheaper rates The Sixt express service provides for extra-fast and easy processing. The service is active for 24 hours with high quality fleet and low self service rental rates. The vehicles offered have a in-built chip facility installed in them which records the accurate time of vehicle drop-off providing for efficient billing Also provides for all day car replacement service in case of an accident. In such situation, the company takes care of all the damage and formalities and also settles the claim with the opposing insurance company Rental Business Segment Revenue Breakup (in Percentage) Business Customers 56% 54% 52% 50% 49% Private/Tourists 31% 32% 37% 40% 42% Accident Replacement 5% 5% 6% 6% 4% Other 8% 9% 5% 4% 5% Key Takeaways: 9

10 Product Profile: Business Model Ranked 7 th in German Car Leasing Market Sixt Lease a Car Motivation models Finance leasing Full-service leasing Fleet management Sixt Mobility Consulting Sales-and-lease-back The company has an experience of more than 40 years in the car leasing sector The company has been ranked in the top-ten car leasing companies in German market The full service leasing is the main product offered by the company which also provides significant contribution to the revenue. The product creates value for customers by reducing their total cost of ownership In 2011, the Sixt lease a Car had purchased 12,000 vehicles, 40,000 tires and more than 100,000 maintenance parts In 2011, 74% of lease contracts were full-service leasing contracts, 15% were for fleet management, 7% were service without finance and 4% were for normal financial lease Source: Ken Research 10

11 Financial & Operational Performance: Geographical Segmentation, Fleet Analysis & Employee Strength Units 3,300 3,100 2,900 2,700 2,500 2,300 2,100 1,900 1,700 1,500 Source: Ken Research Vehicles Added Number of Vehicles (Thousand Units) Value of Vehicles Added (EUR Billion) Average Number of Employees per Business Segment Vehicles Rental Leasing Others Revenue Segments (EUR Million) Germany Abroad Total of Rental Business 1, , Germany Abroad Total of Leasing Business Other Revenue Total Revenue , , , , ,563.7 Source: Company Reports 11

12 Financial & Operational Performance: Valuation Analysis and Financial Summary EUR Million, unless stated The company has presence in ~ corporate countries and ~ franchise countries The company s fleet comprises of ~% of premium cars such as BMW, Audi and Mercedes. ~% of the vehicles fleet have integrated navigational systems preinstalled in them Share Price of Common Stock Common Stock Shares Outstanding Share Price of Preferred Stock Preferred Stock Shares Outstanding Market Capitalization Net Debt Associates/ Minority Interest Financial Overview Revenue and EBITDA Particulars LTM Revenue Growth% EBITDA% Net Profit% Enterprise Value Dec ye (x) LTM EV/Revenue EV/EBITDA P/E Source: Ken Research Notes:* Share price as on 15 th November 2012 The earning before tax for 2008 and 2009 was impacted the decrease in the company revenue and due to the increasing fleet costs. However, the company showcased rapid recovery in earnings from thereon due to consequent adoption of a comprehensive set of results-improving measures 12

13 Financial & Operational Performance: Annotated Share Price Performance th March 2012: th June 2012: Announced special dividend of Volume ( 000s) EUR Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Volume Traded Share Price Source: Ken Research 13

14 Financial & Operational Performance: Analyst Recommendations 1 Expected to Showcase Moderate Performance in Long-Term Looking at the recent five year revenue we anticipate that the revenues would showcase an increment in given the expansion strategy the company has planed in the US and in the BRIC nations. The recent share price suggests that the company s stock has moderate return potential for the coming years. 2 Buy Recommendation in Short term The stock price has showcased a stability in the last twelve months with the average share price of EUR 14.5 per share. The stock had frequented the price of EUR 14.8 per share with the highest price being EUR 16.8 per share and lowest price being EUR 12.5 per share. However, looking at the current economic slowdown in the European region, we expect the share price to be a little low. Thus buying the stock is recommended. 3 Expectation of EPS Growth The earnings per share had increase at a CAGR of 6.0% from EUR 1.51 in 2006 to EUR 2.00 in We expect the EPS to grow as the company will be expanding its operations to other foreign countries such as the US and in the emerging market such as Brazil, India, China, Thailand and others. 14

15 Car Rental Market in Europe Consolidated Company Performance in Europe Market Share of Major Players in Europe 2011 Sixt Aktiengesellschaft Europcar Avis Budget Group Hertz Others EUR Million 25, , , , , Europe Market Size The market share of the company was ~% in 2011, down ~% y-o-y The European car rental market had decreased at a CAGR of ~% from Europcar had the largest market share in Europe as the company operate in almost all the countries and is the market leader in Italy, UK and France Despite having the lowest market share of all the company in the Europe Car rental market, the share of the company had increase in 2011 as compared to the previous years specially in Germany, Austria Switzerland and Spain The company s market share in complete Europe had increased at a CAGR of ~% representing strong revenue growth Source: Ken Research 15

16 Competitive Analysis: Sixt Aktiengesellschaft Competitive Analysis By Service Offered/Revenue/Business Strategy Name Services Offered Revenue Business Strategy Avis: The company offers cars for rent to premium commercial and leisure segments of the travel industry Budget: This segment offers budget and mid-segment cars for rent Budget trucks: In this segment the company offers truck vehicles for rent Car Rental: the segment offers car rental services as well as car lease services Equipment Rental: the segment provides rental services for a range of earthmoving equipment, material handling equipment, aerial and electrical equipment and others Car Rental Services: The company offers car rental services through two of its business segment namely Dollar rent a car and thrifty rent a car. The company is popular for its low car rental rates and strong line-up of business travel and vacation planning services Group Revenue CY 2011: EUR 4.2 billion (up 13.8% y-oy) Group Revenue CY 2011: EUR 5.9 billion (up 9.7% y-oy) Car Rental Segment Revenue CY 2011: EUR 4.6 billion (up 8.4% y-o-y) Group Revenue CY 2011: EUR 1.1 billion (up 0.8% y-oy) The company s strategy is to position its two car rental brands so that the demand of the customers are met. The Avis brand aims to meet the demand of the upper class and premium segment car rental services. The Budget brand focuses more on expanding the sales of the mid segment small cars The company has plans to expand in Europe for further growth prospects The company is focusing on development of new off-airport locations, is working towards more efficient evaluation of existing locations and finally formulating plans for the expansion of sales growth of existing stores The company aims at enhancing its ability to meet customer demand and to meet its target for vehicle depreciation costs The company focuses on maintaining a low cost structure and to maintain high liquidity *Calendar year ending 31 st December 16

17 Competitive Analysis: Sixt Aktiengesellschaft By Financial Performance (Topline/ Enterprise Value/ Multiples) Company Comparables Analysis (EUR mm, Last Twelve Months (LTM) Year Ending September 2012 unless stated) Market Net Enterprise Company Cap Debt Value (EV) Revenue EBITDA PAT EV/Revenue EV/EBITDA P/E Avis Budget Group, Inc. Sixt Aktiengesellschaft Hertz Global Holdings, Inc. Dollar Thrifty Automotive Group Inc. Note: The valuation of Dollar Thrifty Automotive Group has not been considered in the industry mean and median as the company has been Acquired by Hertz Global Holdings Inc. Mean Median Financial Comparison Revenue Company (in EUR Million) Avis Budget Group, Inc. Sept 2012 LTM Hertz Global Holdings, Inc. Sixt Aktiengesellschaft Dollar Thrifty Automotive Group Inc. Source: Ken Research 17

18 Precedent Transaction Analysis A Relative Valuation Analysis of the Car Rental Sector Report Date Target Acquirer/ Investor Deal Size (EUR MN) Stake Acquired (%) Enterprise Value (EV) EV/ Revenue EV/ EBITDA P/E Sep Apex Rental Cars Ltd. Avis Budget Group, Inc. Aug Dollar Thrifty Automotive Group Inc. Hertz Global Holdings, Inc. Aug ID Systems Inc. Avis Budget Group, Inc. Jul Donlen Corporation The Hertz Corporation Jun Avis Budget EMEA Limited Avis Budget Car Rental, LLC Feb Dollar Thrifty Automotive Group Inc. N/A Aug Sixt Aktiengesellschaft N/A May Hertz Global Holdings, Inc. N/A Mean Median Source: Ken Research 18

19 Future Projections: Sixt Aktiengesellschaft Resilient Growth Expected in Company Financial in Next 5 Years Future Projections Revenue Growth% EBITDA Growth% Particulars (USD Million) Source: Ken Research The revenue generated by the company has been forecasted to incline at a CAGR of 1.26% from Given the current scenario where the Germany car rental company has declined at a CAGR of 2.2% from and the on-going Euro Union debt crises, the company is expected to shift its focus from the domestic market to the US and the emerging markets which are expected to provide the company with favorable growth opportunities. The revenue generated from operations from abroad had increase at a CAGR of 6.3% from The revenue generated from regions outside Germany had increased at a CAGR of 4.8% for the car rental business segment and 13.7% for the car leasing segment from This shows that the in the long-term the leasing business also offers opportunities for gently rising leasing revenues. The company has projected a lower level of earnings in 2012 as compared to 2011 In 2012 it is expected that the company will achieve a good level of earnings and return on assets. But it is also expected that these earnings will not be same as 2011 The earnings before interest, tax and depreciation is expected to show a growth of 2.04% from due to expectation of decline in the cost of sale and decline in the operating expenses of the company. The growth in revenue is also forecasted on the basis of the expected increase in the users from 0.2 million in 2009 to 1.1 million in 2016 in Germany. 19

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