Sixt SE

Quarterly Report • Nov 15, 2018

Group Quarterly Statement as at 30 September 2018

1. BUSINESS REPORT

1.1 GENERAL DEVELOPMENTS IN THE GROUP

Sixt Group's business performance, which already outperformed the Company's original expectations, continued to do so in a strong third quarter of 2018. This development was supported above all by operating gains made in the Vehicle Rental Business Unit's foreign operations.

Consolidated operating revenue from rental and leasing business operations (excluding revenue from the sale of used leasing vehicles) improved 13.6% in the period January to September 2018 and came to EUR 1.97 billion after it had totalled EUR 1.74 billion over the same period the year before. Given the ongoing strong growth in all foreign rental markets, the international share of consolidated operating revenue kept increasing to 50.3% and was thus a significant 3.1 percentage points up on the previous year's figure of 47.2%. Sixt Group's total revenue for the first nine months of 2018 amounted to EUR 2.22 billion, a plus of 13.3% (9M 2017: EUR 1.96 billion).

Earnings before taxes (EBT), the Sixt Group's principal performance indicator for measuring business success, came to EUR 481.6 million after EUR 224.2 million in the first nine months of 2017. Adjusted by the one-time effect from the sale of its stake in the carsharing company DriveNow, Sixt sold to the former partner BMW Group already during the first quarter of 2018, EBT came to EUR 285.5 million. This equals a gain of 27.4% and thus is significantly above revenue growth.

In the third quarter of 2018, which was characterised especially abroad by business generated with holidaymakers and tourism, the Group recorded EUR 789.0 million in consolidated operating revenue, a gain of 17.5% (Q3 2017: EUR 671.5 million). The Group's consolidated revenue improved 17.4% to EUR 874.6 million (Q3 2017: EUR 745.2 million).

EBT for the third quarter of 2018 totalled EUR 154.7 million, a gain of 27.3% against the same quarter of last year (EUR 121.6 million).

1.2 VEHICLE RENTAL BUSINESS UNIT

Key figures for the Vehicle Rental Business Unit	9M	9M	Change
in EUR million	2018	2017	in %
Operating revenue	1,624.9	1,410.8	15.2
Thereof rental revenue	1,483.6	1,278.0	16.1
Thereof other revenue from rental business	141.3	132.8	6.4
Earnings before interest and taxes (EBIT)	287.3	220.5	30.3
Earnings before taxes (EBT)	261.2	197.9	32.0
Operating return on revenue (EBT/operating revenue) in %	16.1	14.0	2.1 Points

\ Strengthening European sales: Sixt bundled its international key account management under one consistent leadership. The new structure aims to combine Sixt Group's entire mobility spectrum for mid-sized customers across the various European countries and thereby develop flexible and bespoke solutions for these customers' respective needs. To this end, customers will have one dedicated contact partner for all mobility products, including vehicle rental, chauffeur service, ride hailing, mobility management and innovative mobility concepts such as the mobility budget MaaS. Next to the demand-driven development of mobility solutions for mid-sized companies, the new structure of the key account management opens up vital synergies. These synergies will be raised especially with the global account management, which specialises in catering to large corporations with worldwide activities.

\ More awards for Sixt's customer service: In the third quarter Sixt received numerous awards for its excellent customer service, two of which require special mention. In September the mobility service provider received the World Travel Awards (WTA) as best vehicle rental provider in the USA. In July, Sixt was bestowed with a quality badge from the government of the Balearan islands, among other things, for its transparent price policy and its particularly customer-friendly processes.

1.3 LEASING BUSINESS UNIT

Key figures for the Leasing Business Unit	9M	9M	Change
in EUR million	2018	2017	in %
Operating revenue	349.0	327.5	6.5
Thereof leasing revenue	176.3	169.5	4.0
Thereof other revenue from leasing business	172.6	158.0	9.3
Sales revenue	242.1	217.8	11.2
Total revenue	591.1	545.3	8.4
Earnings before interest and taxes (EBIT)	33.6	33.9	-0.7
Earnings before taxes (EBT)	23.4	20.8	12.3
Operating return on revenue (EBT/operating revenue) in %	6.7	6.4	0.3 Points

\ Strengthening digital management: At the end of July 2018, Sixt Leasing SE announced that it had won over Dr. Felix Frank to serve as new Chief Digital Officer (CDO) and Managing Director Online Retail. Mr. Frank will switch from AutoScout24 to Sixt Leasing at the end of 2018. In his new role he will sign responsible for the online business that is conducted over the platforms sixt-neuwagen.de and autohaus24.de. In the first quarter of the current year the Online Retail business field became Sixt Leasing Group's biggest business field. As part of the "DRIVE>2021" strategy programme, the aim is to grow the contract portfolio for Online Retail to over 110,000 contracts by the end of 2021.

1.4 FINANCIAL POSITION

Equity

At EUR 1.41 billion, the equity of the Sixt Group at the reporting date was EUR 230.0 million higher than at the end of 2017 (EUR 1.18 billion) despite the record distribution of the annual dividends of EUR 193.8 million for Sixt SE and Sixt Leasing SE. The equity ratio fell to 25.2% (31 December 2017: 26.2%) due to the growth-related expansion of the balance sheet total. It remained above the defined minimum target of 20% and at a level well above the average for the rental and leasing sector.

Liabilities

Non-current liabilities and provisions as of 30 September 2018 rose by EUR 677.7 million to EUR 2.41 billion (31 December 2017: EUR 1.73 billion). This was mainly due to additional funds from the bonds issued by Sixt SE and Sixt Leasing SE in the first half of the year totalling EUR 500 million as well as the borrower's note loan placed in August with a total volume of EUR 200 million and a slight increase in ABS financing.

Current liabilities and provisions totalled EUR 1.77 billion as of 30 September 2018, EUR 186.5 million more than at the end of 2017 (EUR 1.58 billion). This is mainly a consequence of the EUR 227.2 million increase in financial liabilities to EUR 818.2 million (31 December 2017: EUR 591.0 million) due to the rise in commercial paper financing and the additional raising of short-term bank liabilities in order to finance the expanded business volume.

1.5 INVESTMENTS

From January until September 2018 Sixt added around 200,300 vehicles to the rental and leasing fleets (9M 2017: around 181,100 vehicles) with a total value of EUR 5.47 billion (9M 2017: 4.86 billion). This corresponds to an increase of 10.6 % in the number of vehicles and 12.7 % in the investment volume.

2. OUTLOOK

In light of the strong business performance of the third quarter, which substantially outperformed last year's comparative period, as well as the developments seen until that time in the current fourth quarter, the Managing Board of Sixt SE raised its earnings expectations and revenue forecast for the full fiscal year 2018 on 18 October 2018.

The Managing Board now expects the full fiscal 2018 to see a very strong increase in consolidated EBT compared to the previous year (2017: EUR 287.3 million). This does not include the earnings contribution generated from the sale of the stake in DriveNow in the amount of around EUR 196 million. Thus far the Managing Board had assumed Group EBT would increase significantly.

Regarding consolidated operating revenue the Managing Board now expects to see a strong increase compared to the previous year (EUR 2,309.3 million). Thus far the Management Board had assumed consolidated operating revenue would increase significantly.

3. FINANCIAL INFORMATION OF THE SIXT GROUP AS AT 30 SEPTEMBER 2018

3.1 CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

Consolidated Income Statement	9M	9M	Q3	Q3
in EUR thou.	2018	2017	2018	2017
Revenue	2,219,803	1,958,971	874,585	745,197
Other operating income	142,876	74,481	36,870	32,516
Fleet expenses and cost of lease assets	744,785	663,739	269,056	238,974
Personnel expenses	305,934	264,640	109,963	93,924
Depreciation and amortisation expense	405,325	396,294	146,189	142,350
Other operating expenses	592,880	458,378	222,646	171,124
Earnings before interest and taxes (EBIT)	313,755	250,400	163,602	131,341
Net finance costs	167,870	-26,240	-8,881	-9,783
Thereof result from at-equity measured investments	-1,970	-4,229	-	-1,368
Earnings before taxes (EBT)	481,625	224,160	154,721	121,558
Income tax expense	81,091	64,229	34,903	34,496
Consolidated profit	400,534	159,931	119,818	87,062
Of which attributable to minority interests	10,356	8,947	3,670	1,684
Of which attributable to shareholders of Sixt SE	390,178	150,985	116,147	85,378

Consolidated statement of comprehensive income	9M	9M
in EUR thou.	2018	2017
Consolidated profit	400,534	159,931
Other comprehensive income (not recognised in the income statement)	8,879	-17,907
Components that could be recognised in the income statement in future
Currency translation gains/losses	8,899	-17,907
Changes in the fair value of derivative financial instruments in hedge relationship	-20	-
Total comprehensive income	409,414	142,024
Of which attributable to minority interests	10,530	8,609
Of which attributable to shareholders of Sixt SE	398,884	133,415

3.2 CONSOLIDATED BALANCE SHEET

Assets
in EUR thou.	30 Sep. 2018	31 Dec. 2017
Non-current assets
Goodwill	28,396	20,188
Intangible assets	30,389	25,408
Property and equipment	201,950	180,292
Lease assets	1,253,133	1,219,209
At-equity measured investments	-	1,973
Financial assets	3,180	915
Other receivables and assets	5,405	6,098
Deferred tax assets	32,353	18,260
Total non-current assets	1,554,806	1,472,344
Current assets
Rental vehicles	2,828,756	2,075,995
Inventories	81,488	75,829
Trade receivables	725,455	493,875
Other receivables and assets	304,853	275,213
Income tax receivables	9,170	10,136
Cash and bank balances	80,688	87,585
Total current assets	4,030,410	3,018,633
Total assets	5,585,217	4,490,978

Equity and liabilities
in EUR thou.	30 Sep. 2018	31 Dec. 2017
Equity
Subscribed capital	120,175	120,175
Capital reserves	243,360	242,512
Other reserves	920,489	696,148
Minority interests	123,833	119,020
Total equity	1,407,856	1,177,854
Non-current liabilities and provisions
Provisions for pensions and similar obligations	2,285	1,922
Other provisions	1,271	1,814
Financial liabilities	2,372,277	1,700,080
Other liabilities	544	240
Deferred tax liabilities	30,321	24,928
Total non-current liabilities and provisions	2,406,699	1,728,984
Current liabilities and provisions
Other provisions	109,035	122,895
Income tax liabilities	76,038	47,933
Financial liabilities	818,218	591,027
Trade payables	600,231	690,998
Other liabilities	167,139	131,286
Total current liabilities and provisions	1,770,662	1,584,140

Total equity and liabilities 5,585,217 4,490,978

3.3 CONSOLIDATED CASH FLOW STATEMENT

Consolidated cash flow statement	9M	9M
in EUR thou.	2018	2017
Operating activities
Consolidated profit	400,534	159,931
Income taxes recognised in income statement	93,608	62,659
Income taxes paid	-64,758	-48,984
Financial result recognised in income statement1	26,594	24,208
Interest received	708	719
Interest paid	-26,848	-25,974
Dividends received	300	325
Depreciation and amortisation	405,325	396,294
Income from disposal of fixed assets	-5,971	-8,400
Income from disposal of financial assets	-196,085	-1,884
Other (non-)cash expenses and income	20,410	5,078
Gross cash flow	653,818	563,973
Proceeds from disposal of lease assets	206,323	176,438
Payments for investments in lease assets	-386,895	-434,413
Change in rental vehicles, net	-992,525	-596,850
Change in inventories	-5,660	-11,142
Change in trade receivables	-231,580	-170,205
Change in trade payables	-90,767	35,455
Change in other net assets	-27,365	-82,304
Net cash flows used in operating activities	-874,651	-519,047
Investing activities
Proceeds from disposal of intangible assets, property and equipment	1	1,605
Proceeds from disposal of financial assets	209,000	2,465
Payments for investments in intangible assets, property and equipment	-45,565	-36,326
Payments for investments in financial assets	-281	-130
Payments for acquisitions less acquired cash and cash equivalents	-5,982	-
Payments for investments in short-term financial assets	-	-84,998
Proceeds from disposal of short-term financial assets	-	85,000
Net cash flows from/used in investing activities	157,173	-32,383
Financing activities
Payments made due to the purchase of treasury shares	-2,570	-1,083
Payments made for the purchase of minority interests	-	-1,293
Dividends paid	-193,849	-83,532
Payments received from taken out borrower's note loans, bonds and bank loans	835,935	541,851
Payments made for redemption of borrower's note loans, bonds and bank loans	-330,340	-355,347
Payments made for redemption of/payments received from taken out short-term financial liabilities2	400,997	455,899
Net cash flows from financing activities	710,172	556,494
Net change in cash and cash equivalents	-7,306	5,064
Effect of exchange rate changes on cash and cash equivalents	409	-999
Changes in the scope of consolidation	-	9
Cash and cash equivalents at 1 Jan.	87,585	47,028
Cash and cash equivalents at 30 Sep.	80,688	51,101

¹ Excluding income from investments

² Short-term borrowings with terms of up to three months and quick turnover

3.4 ADDITIONAL FINANCIAL INFORMATION

Revenue

Revenue		Germany		Abroad		Total	Change
in EUR million	9M 2018	9M 2017	9M 2018	9M 2017	9M 2018	9M 2017	in %
Vehicle Rental Business Unit
Rental revenue	591.1	557.5	892.6	720.5	1,483.6	1,278.0	16.1
Other revenue from rental business	82.6	78.4	58.6	54.3	141.3	132.8	6.4
Total	673.7	636.0	951.2	774.8	1,624.9	1,410.8	15.2
Leasing Business Unit
Leasing revenue	157.5	147.1	18.8	22.4	176.3	169.5	4.0
Other revenue from leasing business	149.9	134.5	22.7	23.5	172.6	158.0	9.3
Sales revenue	227.2	197.9	14.9	19.9	242.1	217.8	11.2
Total	534.7	479.5	56.3	65.8	591.1	545.3	8.4
Other revenue	3.6	2.8	0.3	0.1	3.8	2.9	32.8
Group total	1,212.0	1,118.2	1,007.8	840.7	2,219.8	1,959.0	13.3

Revenue		Germany		Abroad		Total	Change
in EUR million	Q3 2018	Q3 2017	Q3 2018	Q3 2017	Q3 2018	Q3 2017	in %
Vehicle Rental Business Unit
Rental revenue	221.4	209.3	393.0	302.6	614.4	511.9	20.0
Other revenue from rental business	32.6	31.4	23.4	19.2	56.0	50.5	10.9
Total	254.0	240.7	416.4	321.7	670.4	562.4	19.2
Leasing Business Unit
Leasing revenue	53.3	50.0	6.1	6.9	59.4	56.9	4.4
Other revenue from leasing business	51.9	44.9	7.4	7.2	59.2	52.1	13.6
Sales revenue	78.6	66.9	5.3	5.8	83.9	72.7	15.4
Total	183.7	161.8	18.8	19.9	202.6	181.8	11.4
Other revenue	1.6	0.9	0.1	0.1	1.7	1.0	63.7
Group total	439.3	403.5	435.3	341.7	874.6	745.2	17.4

Fleet expenses and cost of lease assets

Fleet expenses and cost of lease assets	9M	9M	Change
in EUR million	2018	2017	in %
Repairs, maintenance and reconditioning	231.1	216.5	6.7
Fuel	84.5	75.7	11.6
Insurance	72.6	54.0	34.4
Transportation	36.8	32.6	12.9
Taxes and charges	18.7	15.8	18.5
Expenses from write-downs on lease assets intended for sale	4.2	5.4	-23.4
Other, including selling expenses	297.0	263.7	12.6
Group total	744.8	663.7	12.2

Depreciation and amortisation expense

Depreciation and amortisation expense	9M	9M	Change
in EUR million	2018	2017	in %
Rental vehicles	239.8	239.3	0.2
Lease assets	147.2	139.9	5.2
Property and equipment	12.2	11.1	10.2
Intangible assets	6.1	6.0	1.7
Group total	405.3	396.3	2.3

Other operating expenses

Other operating expenses	9M	9M	Change
in EUR million	2018	2017	in %
Leasing expenses	54.7	47.8	14.3
Commissions	166.8	136.9	21.8
Expenses for buildings	60.2	53.7	12.0
Other selling and marketing expenses	57.9	46.2	25.4
Expenses from write-downs of receivables	31.2	32.0	-2.3
Audit, legal, advisory costs, and investor relations expenses	17.2	15.5	11.1
Other personnel services	54.4	49.8	9.2
Expenses for IT and communication services	19.9	14.6	36.9
Currency translation/consolidation	96.5	30.8	>100
Miscellaneous expenses	34.0	31.0	9.6
Group total	592.9	458.4	29.3

Net finance costs

Net finance costs of EUR 167.9 million (9M 2017: EUR -26.2 million) contain net interest expense of EUR -25.8 million (9M 2017: EUR -24.2 million). Furthermore, net finance costs also include the result from interest rate hedging transactions in the amount of EUR -0.8 million (9M 2017: EUR 0.0 million), the result of at-equity measured investments at EUR -2.0 million (9M 2017: EUR -4.2 million) as well as the income from the sale of the stake in the joint venture DriveNow in the amount of EUR 196.1 million (9M 2017: disposal of an investment in the amount of EUR 1.8 million).

Group segment reporting

The segment information for the first nine months of 2018 (compared to the first nine months of 2017) is as follows:

By Business Unit		Rental		Leasing		Other		Reconciliation		Group
in EUR million	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017
External revenue	1,624.9	1,410.8	591.1	545.3	3.8	2.9	-	-	2,219.8	1,959.0
Internal revenue	2.8	2.8	9.1	7.7	31.3	25.0	-43.1	-35.4	-	-
Total revenue	1,627.7	1,413.5	600.1	553.0	35.1	27.9	-43.1	-35.4	2,219.8	1,959.0
Fleet expenses and cost of lease assets	378.3	332.7	378.0	341.7	0.0	0.0	-11.5	-10.6	744.8	663.7
Depreciation and amortisation expense	254.5	253.9	147.7	140.4	3.1	1.9	-	-	405.3	396.3
EBIT1	287.3	220.5	33.6	33.9	-7.2	-3.8	0.0	-0.1	313.8	250.4
Net finance costs	-26.1	-22.6	-10.3	-13.1	204.2	9.3	-0.0	0.1	167.9	-26.2
Thereof result from at-equity measured
investments	-2.0	-4.2	-	-	-	-	-	-	-2.0	-4.2
EBT2	261.2	197.9	23.4	20.8	197.1	5.4	-	-	481.6	224.2

¹ Corresponds to earnings before interest and taxes (EBIT)

² Corresponds to earnings before taxes (EBT)

Due to rounding it is possible that individual figures presented in this Group Quarterly Statement may not add up exactly to the totals shown and that the nine-month figures listed may not follow from adding up the individual quarterly figures. For the same reason, the percentage figures presented may not exactly reflect the absolute figures they relate to.

Pullach, 15 November 2018

Sixt SE The Managing Board

Contact

Sixt SE Zugspitzstrasse 1 82049 Pullach, Germany

investorrelations@sixt.com Phone +49 (0) 89/ 7 44 44 - 5104 Fax +49 (0) 89/ 7 44 44 - 85104

Investor relations website ir.sixt.eu Further websites sixt.com about.sixt.com