Europcar profits drop by half following €71m charge

March 13, 2018

Europcar net profits fell by almost half in 2017 as it took a €71 million non-recurring charge.

This related to merger and acquisition fees, “unexpected” UK litigation-related costs and headquarters restructuring costs in Germany.

 

The litigation follows a trading standards probe started last June into alleged inflated vehicle repair costs of up to 300% for UK customers.

The group posted net income of €61 million for 2017, down from €119 million the previous year .

The company also blamed higher non-recurring expenses, higher net financing costs and a more “normative” income tax rate.

 

Adjusted corporate earnings [Ebitda] rose by 4.6% to €264 million at constant exchange rates.

The group generated revenues of €2.4 billion in 2017, up 13.5% at constant exchange rates.

“This significant increase in group revenues in 2017 was the result of positive rental day volume growth across all key markets with differences in performance between the UK growing mildly and the southern European countries delivering strong double digit growth,” the company said.

The number of rental days increased by 16% year-on-year to 69.3 million.

 

Chief executive, Caroline Parot, said: “We delivered a strong performance in 2017 both in terms of revenue and adjusted corporate Ebitda growth in a challenging context relating to the closing of several sizable acquisitions and the unexpected litigation issue in the UK.

 

“2017 has been a pivotal year for the Europcar Group during which we have significantly scaled up through an acceleration in our merger and acquisition plan.

 

“The acquisitions of Buchbinder and Goldcar are transformational for the group and will help us deliver our 2020 ambition while they clearly confirm the role we want to play in our industry’s European consolidation process.”

 

She added: “We remain confident in our ability to reach at least €3 billion of annual revenue and an adjusted corporate ebitda margin of at least 14% excluding new mobility by the end of 2020.”

 

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