After a difficult previous year, car rental company Sixt is aiming for significant profit improvements in 2025.
Pre-tax earnings are expected to account for around ten percent of revenue, which is expected to grow by five to ten percent, as the Pullach-based company announced on Thursday.
On average, analysts had expected revenue growth in the lower half of this range, but had also hoped for a little more in terms of profitability.
Analyst Constantin Hesse from the investment bank Jefferies spoke of a solid fourth quarter for the car rental company.
However, pre-tax earnings fell slightly short of expectations.
The targets for 2025 are in line with expectations. Due to the below-average share price performance to date, he saw room for upside for the share.
For Baader Bank expert Christian Obst, Sixt has set itself somewhat higher growth targets for the new year than expected.
Discounts for car rental companies are likely to increase over the course of the year.
Losses on residual car values, on the other hand, should subside over the course of the year, and IT and personnel costs should also develop more favorably.
In general, Sixt is usually cautious in its forecasts.
Last year, Sixt increased its turnover by 10.5 percent to EUR 4.0 billion.
Sixt is expanding its business in the relatively new US market in particular.
In contrast, Sixt's pre-tax profit fell by 27.8 percent to EUR 335 million.
The pre-tax margin thus amounted to 8.4 percent.
The management intends to reduce the dividend per ordinary share to EUR 2.70 after EUR 3.90 a year earlier due to the decline in profits.
The decline in profits was mainly due to falling used car prices, which is why Sixt had to sell many cars after their useful life at unexpectedly low prices. Among other things, losses on electric cars weighed on the balance sheet.
The management is trying to reduce the residual value risk and has already achieved significant success in Europe.
In Sixt's growing US market, however, it is traditionally more common for the car rental company to also bear the value risk of the cars for the duration of their use.
Various analyst firms rate the share at between €100 and €135, which still leaves a lot of room for upside.
I myself am up around 30% and see further growth. Especially in the USA 👆🏼
It's a shame that the dividend is being cut, but I think it's a step in the right direction.
