Sixt:Quarterly Results/2024 Q3

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See also: Sixt Valuation Model

Management Guidance and Analysts Estimates

Management guidance

• For 2024, management is guiding EBT in the range of between EUR 340 and 390 million (EUR 365 million or -21.4% at the midpoint). The management also expects significant growth in consolidated revenue in 2024.

Analysts estimates

Key Items	Q3 2024	Y/Y	Q4 2024	Y/Y	2024	Y/Y
Revenue	EUR 1,226	8.6%	EUR 933.3	7.2%	EUR 3,943	8.9%
EBT	EUR 254.9	3.2%	EUR 59.2	14.6%	EUR 355.1	-23.5%

Analysts opinions

Sixt is likely to report a good third quarter

• Buy, EUR 90: Analyst Christian Obst of Baader Bank expects good operating results for Sixt in Q3. He pointed out that Sixt is better positioned than its competitors when it comes to profitability and financing conditions.
• Buy, EUR 135: Analyst Marc-Rene Tonn of Warburg research expects a solid third quarter for Sixt.
• Buy, EUR 108->EUR 100: Analyst Michael Kuhn of Deutsche Bank expects Sixt's profits to have bottomed out in Q3. He doesn't expect any major surprises in Q3 results.

Travel industry is softening

• JP Morgan downgraded Hertz from neutral to underweight to reflect softening trends in the travel industry and possible faster churn of vehicle fleet.

Competitor Earnings Expectations and Results

Hertz

Analysts estimates

Key Items	Q3 2024	Y/Y	Q4 2024	Y/Y
Revenue	$2.71 billion	0.2%	$2.22 billion	1.8%
EPS	$-0.47	-167%	$-0.88	-35%

Analysts estimates revisions in the past three months

Key Items	Up revisions	down revisions
Q3 Revenue	0	7
Q3 EPS	1	7

Avis

Analysts estimates

Key Items	Q3 2024	Y/Y	Q4 2024	Y/Y
Revenue	$3.55 billion	-1.1%	$2.79 billion	0.9%
EPS	$8.35	-50%	$0.85	-88%

Analysts estimates revisions in the past three months

Key Items	Up revisions	down revisions
Q3 Revenue	1	4
Q3 EPS	0	6

Competitor earnings expectations and results

Avis Budget

Results

• Avis missed both revenue and earnings estimates.
• Depreciation and fleet costs are still rising.
• Europe rental revenue beat analysts estimate and saw positive growth (versus a decline in Q2).
• America's rental revenue missed analysts estimate and continued to decline year-over-year.

Key Items	Actual	Y/Y	Analysts estimate
Revenue	$3.48 billion	-2.4%	$3.56 billion
EPS	$6.65	-60.4%	$8.55
Revenue-international	$840 million	1.5%	$829.10 million
Revenue-Americas	$2.64 billion	-3.5%	$2.76 billion
Vehicle utilization-international	73.7%		71.5%
Vehicle utilization-Americas	71.5%		70%
Per-unit fleet cost per month-international	$316	24%	$307.1
Per-unit fleet cost per month-Americas	$384	75%	$343.5
Revenue-per day	$71.32	-2.3%
Revenue-per day-Americas	$75.61	-1.4%	$76.27
Revenue-per day-international	$60.52	-3.7%
Vehicle depreciation and lease charges	$806 million	55.9%
Vehicle depreciation and lease-Americas	$613 million	69.3%
Vehicle depreciation and lease-international	$193 million	24.5%
Vehicle interest	$241 million	15.9%

Earnings call summary

Here are the main insights from Avis's Q3 2023 earnings call transcript.

Demand

• CEO Joe Ferraro said demand for the car rental remains robust. "The demand in the Americas surrounding the holiday season looks particularly strong for the Thanksgiving and Christmas holiday periods based on current reservations," he said. "We continue to see robust international inbound and intra-European cross-border travel," he added.

Pricing

• Ferraro said they continue to rationalize fleet instead of lowering price. "We believe it makes more sense to rationalize the fleet than to take a lower price incremental rental. Price was down 2% for the quarter overall, with the Americas nearly flat and the two-point improvement from this year's second quarter. We will continue to execute this strategy as necessary to prioritize higher margin business," he said.
• Pricing in Americas improved sequentially from Q2 to Q3 by two points compared to the same period in 2023.
• International pricing improved sequentially on a year-over-year basis, with September showing the biggest improvement during the quarter.
• Ferraro said they expect international pricing to be flat in Q4 compared Q4 2023.
• Ferraro believes pricing will transition from Q3 to Q4 as it normally does.
• Ferraro said he thinks that everyone in the industry is tightening their fleet by pacing out vehicles purchase at high prices. "Everyone bought cars that were highly higher priced in 2023 and 2024 and probably went in with more cars than they would like, largely due to the challenges of residual values towards the end of last year. We did -- we decided to get out of those cars and get out of them quickly. And that was right for our business. With the new cars coming in that are more advantageous than they had in the past, it makes sense for everyone to kind of get their hands around that and do that as well, " he said.

Fleet costs

• Ferraro said they expect the purchase price of fleets to reduce compared to the pandemic years since OEM supply constraints and production schedules have normalized. "Based on our model year 2025 fleet buy, we are well positioned to have lower holding costs as we rotate in the new fleet," he said.

Interest expense

• CFO Izzy Martins said interest per unit per month in Q4 to be at the same level as last year.

Depreciation costs

• Izzy Martins said they expect straight-line depreciation costs to be $350 million in Q4 up from $347 million in Q3 (+18.8%).

Hurricanes and elections in U.S

• Ferraro said hurricanes lead to a shutdown of business for at least four days but what happens after the hurricanes is positive. "I will tell you this, after the hurricanes hit, for example, the State of Florida, those places got tight for various different reasons. And tight fleets in a place like Florida is always helpful. So while you lose initially, it's a matter of time and periods after that, that you tend to make up, whether it be through rentals in other segments or the tightness of fleet that usually occurs," he said.
• Ferraro said while there are notable disruptions from elections and hurricanes, there are things such as timing of holidays that will offset some of the headwinds.