The updated earnings forecast is already at 2019 levels. Sixt says the positive development can be attributed to holiday business.
Photo courtesy of Sixt.
Sixt's managing board has increased the previous forecast for its 2021 financial year. The company’s mobility services business has developed more positively than expected in recent months amid the ongoing COVID-19 pandemic. This trend was evident in second quarter and grew further in third quarter 2021, according to the company.
The basis for the updated forecast is the current preliminary figures for August as well as the adapted expectations for the coming months of 2021. For the 2021 financial year, the Managing Board now expects consolidated operating revenues to be between €2.0 billion and €2.2 billion (previously predicted between €1.95 billion and €2.10 billion) and earnings before taxes (EBT) to be in the range of €300 million to €330 million (previously between €190 million and €220 million).
Despite the supply bottlenecks at vehicle manufacturers due to the semiconductor shortage, the updated earnings forecast is already at the level of the year 2019, in which EBT in the Mobility Business Unit amounted to €308 million, according to the company. For 2021, the analysts’ average estimates for the Sixt Group are €2.1 billion for consolidated revenues and €217 million for EBT, both below SIXT's forecasts.
The positive business development can be attributed to the holiday business, which exceeded expectations, according to Sixt. In Europe, travel behavior was less affected by the Delta variant than initially assumed. Instead, booking volumes remained at a high level and extended into September due to catch-up effects. In the U.S. in particular, the price level, which is higher than in previous years, is only slowly weakening, resulting not only from the high demand but also from the scarcity of vehicles. With the end of the holidays, demand in Germany’s business travel sector is now also picking up slightly. In addition, Sixt continued to benefit from the effects of strict cost management, according to the company.
Due to the uncertainties about the further course of the COVID-19 pandemic, Sixt didn’t issue a forecast for the current financial year until July 2021. The updated forecast for the 2021 financial year has now been prepared based on the current market environment and the assumption that the further course of the COVID-19 pandemic will not lead to more restrictions in travel.
For the 2022 financial year, in addition to the unknowns regarding the pandemic development, there is still uncertainty about the extent and duration of the supply bottlenecks at vehicle manufacturers (caused by the semiconductor shortage) and the resulting effects on vehicle availability and market price developments in the industry.
“We’re very pleased that the positive trend of the second quarter has continued in July and August,” said Alexander Sixt, co-CEO of Sixt SE. “… I would especially like to thank our staff, as this result puts us well above market expectations and already back in the range of the result from our previous record year 2019. With this in mind, we will continue to invest in our internationalization and premium strategy, drive digitalization, and further expand our workforce. We have already created more than 1,400 jobs this year, and more will follow in the upcoming months."
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