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17thNovember 2009

Avis Europe plc

Interim Management Statement

Avis Europe plc, a leading car rental company in Europe, Africa, the Middle East and Asia, publishes its Interim Management Statement for the calendar year to date.

At the Interims we advised of a successful summer trading period in July and August with a significant improvement in revenue per day, a lower level of volume decline and a strong increase in utilisation, supported by very tight fleet capacity.

 

Our brand leadership, service differentiation initiatives and strong customer and geographic balance have continued to support our volume performance post the key summer trading season, despite the ongoing difficult trading environment. We have seen an encouraging improving trend in the Individual customer group, partly offset by lower volumes in the Corporate customer group and also in Insurance/Replacement, where we are overlapping a very strong comparative.

As expected, overall rate per day has, since the good summer performance, remained ahead of prior year, albeit at a lower level than the summer. We continue to seek opportunities to achieve further price increases and have increased rates for non-contracted business for early 2010, while we continue to negotiate with contracted customers to implement rises.

We have maintained very tight control over fleet capacity and continue to implement improvements to our fleet management processes, including the introduction of a non-cancellation fee in July. We therefore expect to achieve a step-change improvement in utilisation for the full year. 

We have kept a very strong control over all cost lines, including further redundancies and the continuation of the Group-wide recruitment and salary freeze. These cost actions will drive a full-year increase in staff productivity, despite the reduction in revenues. In addition, post the peak summer trading period, we are now completing optimisation of the synergies between the Avis and Budget corporately-owned operations in Switzerland, Austria, France and the UK. All these actions will lead to a further exceptional restructuring charge of circa €11 million in the second half.

We remain cautious on both consumer and corporate spending, given the current economic environment. Visibility remains limited, particularly given the seasonal rotation of the business back towards Corporate and Insurance/Replacement customers, who tend to book later. Against this backdrop we will continue to adapt our business model; maximising opportunities for price increases, tightly controlling fleet to achieve excellent utilisation, as well as keeping a very tight control over costs and working capital. 

Overall, we therefore confirm that trading remains in line with our expectations and that we continue to anticipate being free cash flow positive for the full year.

We are progressing with the execution of our strategic plans for longer-term growth, including brand differentiation and customer service initiatives, and believe the prospects for the business remain encouraging. 

Other information:

The statement is available from today on the Group's corporate website www.avis-europe.com.

Enquiries:

Avis Europe plc                                                       01344 426644

Pascal Bazin, Chief Executive    

Martyn Smith, Finance Director    

Hilary White, Investor Relations        

Hogarth Partnership

Andrew Jaques, Barnaby Fry, Simon Hockridge    020 7357 9477

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