EUROPCAR continues its discussions with the holders of its debt

(AOF) – Following recent market rumors, Europcar Mobility Group has confirmed that it is currently pursuing discussions with creditors of its corporate debt. The newspaper Les Echos affirmed yesterday that part of the creditors of the vehicle rental company would be ready to convert a billion euros of debt on the 1.7 billion which weighs down the company, in exchange for the control of the capital. They would obtain 92 to 97% of the capital, according to concordant sources.

Europcar recalls that it “wishes to significantly reduce the level of its corporate debt, to return to the levels of net corporate leverage recorded after the IPO, which would allow it to benefit from more flexibility in an uncertain environment”.

He also intends to “raise enough funds to finance the Connect transformation plan and get through the period of uncertainty linked to the Covid-19 health crisis”.

The market will be informed as soon as the discussions in progress have made it possible to reach an agreement making it possible to accomplish these objectives, in accordance with the applicable regulations.

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Key points to remember about Europcar

– Third in the world and European leader in vehicle rental, created in 1949, with a 20% market share, under the brands Europcar, Goldcar for low-cost leisure, ubeeqo, ecar or brunel for new mobility;

– Turnover of € 2.95 billion, split between 4 divisions, car rental for 73%, low-cost for 14%, utilities for 12% then new mobility – car-sharing, scooter-sharing …

– Strong presence in 140 countries, with a main positioning in 9 of them – Germany, Australia, Belgium, Spain, France, Italy, New Zealand, Portugal and United Kingdom, and franchise networks elsewhere;

– Business model based on the visibility of turnover through partnerships with transport and tourism groups, ensuring 1/3 of income, then through the strategy of integrating franchisees and, finally, diversification into new mobility;

– Capital 29.5% owned by Eurazeo, Jean-Claude Pailly being Chairman of the Board and Caroline Parot Managing Director;

– Tense financial situation, with a high debt of 3.2 times the operating result at the end of 2019 and a financing debt of the vehicle fleet, recorded off-balance sheet.

Stakes

– SHIFT 2023 roadmap: increase the core business – car and utility rental – and scale up for urban activities, develop business services, doubling the active customer base to 15 million;

– Fox integration.

Innovation strategy

– Rise of digital in revenues (76%), ahead of agencies (14%) and call centers;

– Mobility services through acquisitions or long-term partnerships with € 80 million of planned investments, including 25 for the “Lab”;

Environmental strategy

The environmental strategy is focused on the electrification of the fleet and the circular economy.

To be continued

– Very competitive sector destabilized by the arrival of car-sharing and carpooling companies with 2 key indicators, the use of the fleet -76.1% – and its unit cost -226 €;

– Sensitivity to air transport, more than 40% of turnover being generated in agencies located in airports and seasonality of the activity, 9 / 10ths of gross operating surplus being generated over the 2^th and 3^th quarters;

– Strong sensitivity to economic activity in Europe (nearly 80% of revenues, including 20% ​​in the United Kingdom and 16% in France);

– Pandemic adaptation plan: – reduction in cost and volume of the fleet, renegotiations of contracts and short-time working – cash flow: in mid-April, € 36 million of financing lines guaranteed at 70% by the Spanish State for an amount of € 36m and support initiatives with the French State via the BPI (€ 220m expected) and in the other countries of operation;

– Postponement of the general meeting before the end of June 2020.