Sixt: Cautious on profit forecast despite record sales

Despite record sales, German car rental company Sixt remains cautious in its profit forecast. Following the release of its fiscal year 2022 results, the company cited ongoing economic uncertainties as the reason for this outlook.

Sixt's revenue for 2022 surged by 39% to 4.68 billion euros, driven by strong demand in Europe and the Americas. The company's international business grew by a remarkable 46%, with Europe accounting for almost 70% of total revenue.

However, despite the impressive growth, Sixt's profit margin has been squeezed due to rising costs and investments. The company's adjusted earnings before interest and taxes (EBIT) increased by only 7.4% to 892.3 million euros, resulting in a slight decline in its profit margin from 20.5% to 19.1%.

For 2023, Sixt expects revenue to increase by a further 10-15%. However, the company remains cautious about its profit outlook, stating that it anticipates "ongoing uncertainties" in the global economy, particularly regarding the geopolitical situation and recessionary concerns.

Sixt's cautious approach reflects the current economic headwinds that many companies are facing. Despite strong demand, rising costs and economic uncertainty are impacting profit margins. The car rental industry is particularly vulnerable to economic downturns, as demand for travel and transportation tends to decline during such periods.

Nonetheless, Sixt's long-term strategy remains unchanged. The company plans to continue investing in its global expansion and digitalization initiatives, with the goal of further strengthening its market position and driving future growth.