ACTIVITY REPORT fOR 2009 ACTIVITY REPORT fOR ... - Europcar

worldwidenetworkAFRICAAngolaBeninBotswanaBurkina FasoBurundiCameroonCape VerdeCongo (DemocraticRepublic)DjiboutiEgyptEquatorial GuineaEthiopiaGabonGhanaGuineaIvory CoastKenyaLibyaMaliMauritaniaMoroccoMozambiqueNamibiaNigerNigeriaRepublic of theCongoSenegalSouth AfricaSudanSwazilandTogoTunisiaUgandaZambiaZimbabweINDIAN OCEANMadagascarMauritiusMayotteReunion IslandNORTH AMERICACanadaUnited StatesCentral &south americaArgentinaColombiaCosta RicaFrench GuyanaJamaicaMexicoNicaraguaPeruSurinamUruguayVenezuelaCARIBBEANCuracaoDominicanRepublicGuadeloupeHaitiMartiniqueSaint BarthélemySaint Maarten(Dutch Antilles)Saint MartinASIA& ASIA-PACIFICArmeniaAustraliaBangladeshChinaFijiFrench PolynesiaGuamIndiaIndonesiaJapanKazakhstanLaos (DemocraticRepublic)MalaysiaNew CaledoniaNew ZealandPakistanPhilippinesEUROPEAlbaniaAndorraAustriaBelarusBelgiumBosnia &HerzegovinaBulgariaCroatiaCyprusCzech RepublicDenmarkEstoniaFaeroe IslandsFinlandFranceGermanyGreat BritainGreeceHungaryIcelandIrelandItalyKosovoLatviaLithuaniaLuxembourgMacedoniaMaltaMoldaviaMontenegroNetherlandsNorwayPolandPortugalRomaniaRussiaSerbiaSlovakiaSloveniaSpainSwedenSwitzerlandTurkeyUkraineMIDDLE EASTAbu DhabiDubaiIsraelJordanKingdom ofBahrainKuwaitLebanonOmanPalestineQatarSaudi ArabiaSyriaYemennorthamericacaribbeancentral &southamericaeuropeafricamiddleeastindianoceanasiaasia-pacificEuropcar Activity Report for 2009PAGE 4PAGE 5

Europcar will pursue its strategy of improving profitability by maintainingstrict pricing discipline, optimizing its business portfolio and improving operatingefficiency.message fromthe chairmangilbert saada,Chairman of Europcar Groupe and member of Eurazeo’s Executive BoardHaving successfully navigated through the economic downturn has madeEuropcar more flexible and efficient, and we are now poised to seize opportunitiesfor profitable growth.messagefrom the ceoPhilippe Guillemot,Chief Executive Officer, Europcar GroupeThe strong improvement in performanceindicators throughout 2009,along with Europcar’s excellentfinancial health, prove that the companytook the necessary measuresin facing up to the financial crisis.Given the extremely challengingenvironment that we encounteredthis year, the Group’s performance– both operationally and financially –is remarkable.First, in a tough economic environment,Europcar demonstrated theflexibility of its business model byrapidly adapting its vehicle fleet andcost structure to the abrupt drop indemand that started in the thirdquarter of 2008.Second, a deliberate policy of raisingrental rates and rigorous managementof the segment mix allowed usto improve our capacity to preserveoperating margins.Third, we generated abundant cashflow, by downsizing our fleet and bysignificantly reducing both workingcapital requirements and debt.Furthermore, the car rental industryas a whole adopted a more rationalbehavior, thanks to fleet reductionsand management, staff cutbacksand disciplined pricing policies. Webelieve this sent a strong signal tothe market.Nevertheless, our management teamdoes not expect to see a significantrecovery in demand before thesecond half of 2010. Consequently,the very strict restrictions andcontrols on spending, purchasingand fleet management, which we setup at the beginning of the crisis, willbe maintained.Our company has strong organicgrowth potential. Europcar willpursue its strategy of improvingprofitability by maintaining strictpricing discipline, optimizing itsbusiness portfolio and improvingthe operating efficiency and yieldof its fleet, notably by drawing onthe lessons learned from navigatingthrough the downturn over 18 months.Europcar’s position as market leadermakes it the partner of choice forthe big carmakers. For example, werecently signed agreements withRenault and Nissan to add theirelectric models to our fleet.Another, more recent key event was theappointment of Philippe Guillemot asChief Executive Officer of EuropcarGroup, as of April 1, 2010. He succeedsSalvatore Catania, who haselected to step back from the Group’soperational management after workingfor Europcar for over 35 years,including seven years as its CEO.Salvatore Catania will remain onboard as Special Advisor to the CEO.On behalf of the Board of Directors,I would like to thank Salvatore Cataniafor his leadership at Europcar. Werespect his personal decision to stepback and we are delighted that hewill continue to actively support thecompany in the future.Salvatore Catania hands PhilippeGuillemot the reins of a reinvigoratedGroup, one whose position asthe European leader was furtherstrengthened during a challenging2009. Having overcome the troublesstemming from the economic crisis,Europcar is now poised to seize theopportunities that an economicrecovery will offer.In European markets where Europcaroperates directly, business volumein 2009 (as expressed in number ofrental days) stabilized at down 14%to 18% depending on the quarter,compared to the 12-month benchmarkperiod immediately before the crisiscomprising the second half of 2007and the first half of 2008, a periodmarked by strong revenue growth.Confronted with a sharp drop indemand that was unprecedented inrecent history, the Group immediatelytook equally unprecedented measuresto adapt its resources, beginningin September 2008 and continuingthrough the fourth quarter of 2009.Foremost among these measures –both chronologically and in termsof its impact on capital employedand costs – was to accelerate theseasonal fleet reduction in thefourth quarter of 2008 and to extendit into the first quarter of 2009.Despite the crisis in the used carmarket, by the end of March 2009the Group had reduced its fleet tomatch demand without incurringsignificant exceptional charges,thanks to its fleet purchasing model,which guarantees that carmakers buyback nearly 95% of its purchases atpredefined terms.At the same time, the implementationof programs designed to integraterecent acquisitions, as well as numerousinitiatives to improve networkand fleet productivity undertakensince 2007 were accelerated.Lastly, in fall 2008, a vast reorganizationplan for the network, facilitiesand purchasing systems was rolledout and a general review of operatingprocedures, from fleet management tooutsourcing contracts was conducted,so as to rapidly adapt resources to thedownturn in demand and reduce costs.Lower costs, ongoing improvementsin fleet utilization rates and yields,a policy of pricing discipline and amarketing strategy of steadily shiftingresources towards the most profitablesegments enabled Europcar toreduce the impact of weak demandon profitability, as of the first halfof 2009. Thereafter, the Group managedto strongly improve profitability,and by the second half of 2009 theoperating margin had returned to therecord pre-crisis levels of the secondhalf of 2007.Having successfully navigated throughthe economic downturn has madeEuropcar more flexible and efficient,and we are now poised to seize opportunitiesfor profitable growth.Europcar is an ambitious companywith a proven track record of successand with still a lot of potential for thefuture. This success is the results ofthe quality, dedication and entrepreneurshipof the 7,000 staff that makethe Europcar Group. I intend to buildon this solid foundation to furtherstrengthen Europcar’s leadershipposition, developing the Group toits full potential and will use all myenergy, determination and leadershipto do so.In any highly competitive sector suchas car rental, success can only beachieved by a united team, sharingthe same values and ambition. I intendto ensure that Europcar continues tohave clearly defined values, strategyand goals, with competent teams thatare empowered to reach them. I lookforward, with these teams, to developingour roadmap for the future.Europcar Activity Report for 2009PAGE 6PAGE 7

LeadershipEUROPCAR BOLSTERSITS No.1 POSITION INEUROPEIn a challenging economicenvironment, Europcarconfirmed its ability to adaptquickly thanks to its flexiblebusiness model.The Group rolled out efficientadjustment measures thathave strengthened its positionas the Number 1 car rentalcompany in Europe.In late summer 2008, the Group beganto feel the economic downturn’simpact on demand. The contractionin volumes continued into the firstquarter of 2009 before levelling off.Third-quarter 2009 trends picked upslightly, thanks to stronger demandover the summer in the leisure segment.THE IMPROVEMENT IN OPERATINGAND FINANCIAL PERFORMANCEILLUSTRATEs THE EFFECTIVENESSOF ADAPTATION MEASURESEuropcar immediately took measuresto adapt its resources by downsizingits fleet and reducing its coststructure. Efforts over the past twoyears to improve productivity andfleet management were intensified,pricing discipline was tightened, andthe strategic shift towards the mostprofitable segments was maintained.As a result, the fleet utilization rateand average Revenue Per Day (RPD)improved significantly. Greaterefficiency combined with sharpcost reductions enabled the Groupto reduce the downturn’s impacton consolidated operating income.Europcar, the solid European leader,RevenueL1.9billionEuropcar Activity Report for 2009PAGE 8PAGE 9

WORLD’S LEADING CAR RENTALCOMPANY IN 2009thereby demonstrated the flexibilityof its business model, along withits rigorous management of costs,pricing and customer mix.The Group continued to develop marketingcampaigns with existing andnew partners, including carmakers.The year 2009 was highlighted by keyevents in sustainable developmentand the multiplication and strengtheningof co-marketing campaigns,notably with Fiat, Renault and Nissan.Company” for the 10 th consecutiveyear.In 2009, the Group also successfullyunderwent the first audit of its effortsin the framework of its EnvironmentalCharter, which concluded that Europcarfully respects its commitmentsto sustainable development. Today,Europcar is the only car rental companywith an environmental charterthat has been certified by an externalorganization.FocusAccording to the Europcar Transportation& Mobility Observatory, the economic crisis haschanged Europeans’ relationships with their carsThe economic crisis forced Europeans to re-assessboth their mobility needs and the various optionsavailable to them. As the European leader in vehiclerentals, Europcar continued to explore these newtrends and to offer responses tailored to meetcustomers’ needs.In 2009, Europcar published the findings of thesecond edition of its Transportation & MobilityObservatory. The survey, which seeks to decipherthe relationship between Europeans and their carsand to identify new types of behavior, is based onthe responses of over 5,000 people in the 18+ agegroup in seven European countries: Belgium, France,Germany, Italy, Portugal, Spain and the UK.The survey’s main conclusions found that:• 90% of those surveyed had changed their drivinghabits for cost reasons in the past 12 months. Nearly7 out of 10 European drivers modified the way theydrove, and 6 out of 10 decided to use their car less,particularly for short distances.• 4 out of 10 Europeans could consider doing withoutone of their cars – twice the number in 2008. Themain reason behind this is the cost of car ownership:83% of those who were considering getting rid ofat least one of their cars said it was for economicreasons, well ahead of those mentioning ecologicalreasons (48%).• In this context, car rental represents analternative to ownership for one out of twoEuropeans who consider giving up one of theircars. When Europeans were asked about alternativemeans of individual motorized transportation, thealternative mentioned most often was car rental(53%), followed by carpooling (48%) and twowheeledvehicles (35%).As in previous years, Europcarreceived numerous awards in 2009,notably including the World TravelAward for “World’s Leading Car RentalThe development of e-marketingremained the spearhead of Europcar’smarketing activities in 2009. Webpages on Group agencies werecompletely overhauled to integrateboth richer content and new features,such as interactive maps.The Group also reported strongfranchise activity. Europcar signednew, exclusive international franchisecontracts for new regions, andrenewed several other exclusive contracts.Lastly, as part of its strategiccommercial alliance with EnterpriseHoldings, Europcar expanded servicefor National and Alamo brand customersto new countries in Europe, theMiddle East and Africa (EMEA).Europcar Activity Report for 2009PAGE 10PAGE 11

InnovationsMOBILITY AND NEWTECHNOLOGY: THECORE OF EUROPCAR’SINNOVATION POLICYIn a highly competitive marketsuch as vehicle rental, serviceand technological innovationgo hand in hand as strongsources of differentiationto benefit customers. Asthe market leader, Europcarconstantly strives to anticipateits customers’ needs byinnovating to provide newservices. In 2009, Europcarcontinued to give priority totwo major channels ofinnovation: e-commerce andnew types of mobility.GREENWAY: EUROPCAR’SCOMPETITIVE EDGEAt the forefront of technology, theGreenway system lies at the heartof Europcar’s competitive edge.Developed continuously sinceits launch in 1994, this uniqueplatform has become the interfacefor managing all of the company’sactivities – from reservationmanagement to sales, marketing,billing and insurance, as well asfleet management and maintenance.Thanks to Greenway, Europcar isable to handle on average:• 38,000 reservations per day;• over 30,000 check-ins and checkoutsdaily;• as many as 6,500 users simultaneouslyconnected at any hour of theday or night.With Greenway, Europcar managesthe business of its subsidiaries innine countries and reservations for itsfranchise network around the world.The system ensures the rapid integrationof Group acquisitions andaccompanies its development innew regions, such as Australia andFocusNew mobile phone serviceIn September 2009, Europcar launched a mobile phone servicethat makes it easy to rent a car using a cell phone. Thanks to thisservice, customers can make or modify a reservation, as well aslocate the nearest rental agency. Available in seven languages,the service is compatible with all portable phones having aninternet connection, anywhere in the world. Right from the start,this mobile service has made a bigger than expected contributionto increasing the share of sales online.Europcar Activity Report for 2009PAGE 16PAGE 17

EUROPCAR AND SUSTAINABLE DEVELOPMENT:TIMELINE20002005• Europcar opens an eco-friendlyrental agency in Paris• Europcar adds the first hybridand electric vehicles to its fleet• Europcar signs the United NationsGlobal CompactIn both cases, the agreements callfor finding innovative solutions forinstalling the infrastructure necessaryfor recharging batteries at rentalagencies, and for developing specificshort-term rental offers for electricvehicles.VEHICLE MAINTENANCE:EUROPCAR TURNS TO ITSSUPPLIERSMaintaining a fleet of approximately200,000 vehicles is a major challenge.Europcar launched an investmentprogram in 2009 to equip its mainairport rental agencies with the latestgenerationfacilities for recyclingwastewater and separating waterand oils, starting in 2010.200720082009• Europcar draftsits Environmental Charter• Bureau Veritas certifies Europcar’sEnvironmental Charter• Europcar is elected “World’s LeadingGreen Transport Solution Company”at the World Travel Awards• Europcar is the first car rental companyto sign agreements with Nissan andRenault, to offer their electric cars toits customersEuropcar demonstrated its pioneeringrole again this year by being thefirst vehicle rental company to sign apartnership agreement with Nissanin June 2009 to provide customerswith electric cars as soon as theyreach the market in 2010/2011, andto develop zero emission mobilityat the global level. Future electriccars will be silent and will not emitCO 2 , NOx or particles. In September2009, Europcar signed anotheragreement, this time with Renault.Aware of the environmental impactof its business, Europcar is alsoinvolving its suppliers worldwide inthe process. It has notably furthertoughened its standards in terms ofwastewater and fluid recycling, use ofnon-toxic products, and other areas.RAISING CUSTOMER AWARENESS:SIMPLE, PRECISE INFORMATIONTo highlight its green fleet and encourageconsumers to use low CO 2 emissionvehicles, Europcar has createda specific “eco-friendly” section onwww.europcar.com and its countrywebsites, such as www.europcar.co.uk.Some customers still have a ratherfuzzy understanding of the environmentalimpact of vehicle rentals, soEuropcar has also decided to indicatethe quantity of CO 2 emissions perrental on each invoice.Although consumer information iskey, it is also important to offer carbonoffset options through projectsto reduce greenhouse gas emissions.This is why Europcar established apartnership with ClimateCare, worldleader in carbon offset initiatives,and set up a carbon offset program atwww.europcar.com/Carbon-Offset.ISO 14001 CERTIFICATION FORINTERNAL PROCESSESNo sooner had Europcar formalizedthe commitments in its EnvironmentalCharter than it sought certificationfor them, to guarantee the coherence,seriousness and sustainabilityof its approach. This was done byindependent organization BureauVeritas, which certified the Charterin June 2008. It stands as a notableachievement, because it was the firstsuch certification in the fields of quality,safety, health, the environmentand corporate social responsibilitygiven to a business in Europe. To date,Germany, Spain, Italy and France havereceived ISO 14001 certification, andthe UK, Portugal and Belgium areexpected to be certified.Europcar Activity Report for 2009PAGE 22PAGE 23

HumanResources7,000 EUROPCAR EMPLOYEESPEOPLE,THE PILLARSOF QUALITYSERVICEIn 2009’s challengingeconomic environment,several major projects werelaunched simultaneouslyto make the Group moreflexible and responsive.Europcar finalized itsreorganization and placedthe priority on internalmobility and training.FINALIZATION OF THEREORGANIZATIONTo adapt to the tough economicclimate in 2009, Europcar had toreduce the size of its workforce incertain areas. This last-resort decisionwas made in consultation withthe company’s labor partners andimplemented in a responsible manner,by taking all the necessary supportmeasures to help those involved tofind new jobs. Europcar also soughtinnovative ways to maintain employment.In Italy, for example, some40 headquarters employees weretrained to work in rental offices, toensure service during peak summerdemand; in this way, the companymanaged to retain its entire staff. Atthe same time, Europcar launched avast job alignment project – called“Role of the Center” – covering sales,marketing, fleet management, financeand human resources at the Grouplevel, to reinforce the coherencebetween countries and enhance thecompany’s efficiency.To guarantee the quality and continuityof customer services, followingthe announced risk of a swine fluepidemic, Europcar set up a preventionsystem for employees. Italso drafted a business continuityplan that identifies key processesand personnel, as well as potentialreplacements.PRIORITY ON INTERNAL MOBILITYAND SKILLS DEVELOPMENTA Europcar hallmark, internal promotionis no empty promise: in 2009,6 of the 8 General Managers had risenthrough the ranks, thanks to thispolicy. In 2009, Europcar affirmed itscommitment to expanding and furtherstrengthening this system to includenon-managerial positions. On eachcountry’s intranet site, Europcar hasset up a highly visible list of vacantpositions to give all employees accessto the career opportunities offeredby the Group. This support in favorof internal mobility is accompaniedby training programs to ensure skillsdevelopment for Group employees.breakdown of europcaremployees by countryaustralia/new Zealand564belgium 114portugal 236italy 344spain907france1,331eci/eis*333UK1,680germany1,455*Europcar International / Europcar Information ServicesEuropcar Activity Report for 2009PAGE 24PAGE 25

CORPORATE GOVERNANCEEuropcar Groupe S.A. is a “société anonyme” incorporated under the laws of France and governedby a Board of Directors. Europcar has been owned by Eurazeo since May 31, 2006.EXECUTIVE COMMITTEESince April 1, 2010, the Executive Committee is composed of Philippe Guillemot, Chief ExecutiveOfficer, Charles Desmartis, Chief Financial Officer and Rafael Girona, Chief Operating Officer.Europcar Groupe S.A. Board of DirectorsEuropcar Groupe S.A. is governed by its Board of Directors, who are responsible for its strategy and the developmentand oversight of its business and operations. Gilbert Saada is Chairman of the Board and Philippe Guillemotwas named Chief Executive Officer of Europcar Groupe S.A. on April 1, 2010.The Executive Committee of Europcar Groupe is composed of Philippe Guillemot, Charles Desmartis and Rafael Girona.THE BOARD OF DIRECTORS’ AUDIT COMMITTEEThe Audit Committee is composed of Philippe Audouin (Chairman) and Fabrice de Gaudemar.Europcar’s Boardof DirectorsGilbert SaadaPhilippe GuillemotPOSITIONChairman of the Board of Directors of Europcar Groupe and Memberof the Executive Board of EurazeoChief Executive Officer of Europcar Groupesince April 2010EXPIRATIONOF TERMPatrick Sayer Chief Executive Officer of Eurazeo 201220122012Philippe Guillemotcharles desmartisPhilippe Guillemot was named Chief Executive Officer of Europcar Groupe S.A. on April 1, 2010.Before joining Europcar, Philippe Guillemot held various positions at Booz-Allen & Hamilton,Michelin, Peugeot Citroën (PSA) and Areva. In particular, Philippe Guillemot was a Memberof the Executive Board at Michelin from 1996 till 1998, when he joined Valeo as Head ofthe engine cooling branch. In addition, Philippe Guillemot was Executive Vice President ofthe car seating activity at Faurecia, the car parts division of Peugeot Citroën (PSA) from2001 until 2004. Finally, he was named Chairman and CEO of Areva T&D and Member of theExecutive Committee of Areva from 2004.Philippe Guillemot, a French national, was born in 1959. He holds a degree from Frenchengineering school l’École des Mines and MBA from Harvard.Charles Desmartis joined Europcar Groupe S.A. as Chief Financial Officer in October 2007.Prior to that, he spent much of his career at Schlumberger, notably as worldwide controllerfor Schlumberger Resource Management Services (1999 to 2001), and Director of InternalAudit for Schlumberger Ltd. (2001 to 2002). In 2003 he was appointed Vice-President ofFinance at Axalto, Schlumberger’s smart-card and electronic payment terminal subsidiary,and in May 2004 oversaw its initial public offering on the Paris stock market. In June 2006,Axalto and Gemplus merged to form Gemalto, the world leader in digital security. As CFOof the new Group, he played a key role in the companies’ financial integration.A French national, Charles Desmartis was born in 1957. He is a graduate of the École desHautes Études Commerciales (HEC) and of Stanford University, where he earned a Master’sof Science in Management.Bruno KellerPhilippe AudouinEurazeoChief Operating Officerand Member of the Executive Board of EurazeoChief Financial Officer and Member of the Executive Boardof EurazeoEurazeo is represented by Fabrice de Gaudemar, Memberof the Executive Board of Eurazeo201220122012rafael gironaRafael Girona was named Chief Operating Officer of Europcar Groupe S.A. on May 31, 2006,and COO of Europcar International (ECI) in 2001. He has also been co-chairman of EuropcarInformation Services (EIS) since 2002. At the Group level and for Europcar’s worldwidenetwork, he oversees operations, information systems, sales & marketing, fleet management,the deployment of franchises, service quality, business process optimization andsustainable development.Since joining ECI in 1987, Mr. Girona has held various positions with Europcar in Spain andFrance, notably serving as Controller and Regional Director. He also served as EuropcarFrance’s Director of operations from 1996 to 2001.A Spanish national, Rafael Girona was born in 1962. He holds a degree in science and acertificate from INSEAD in financial control, management, quality, sales and internationalbusiness.Europcar Activity Report for 2009PAGE 26PAGE 27

free cash flowconsolidated balance sheetat reported exchange ratesin millions of 3 Full Year2008 2009Adjusted corporate EBITDA119 105Non-recurring items(17) (51)Corporate EBITDA after non-recurring items102 54Non-fleet capital expenditure, net of proceeds from disposal(24) (27)Change in non-fleet working capital44 45Change in provisions, employee benefits and accrued fleet financing interest exp.17Income tax (paid) / received(34)12Corporate free cash flow before fleet acquisition and disposal activities89 90Cash interest paid on corporate debt, including allocated swap cash charge(61) (67)Free cash flow before fleet acquisition and disposal activities2824Cash flow from fleet acquisition and disposal activities 373 579Free cash flow401 603Business acquisition, net of cash acquired(34)-Other investing activities2(2)Decrease in drawings on fleet financing and working capital facilities(339) (622)Net change in cash 29 (20)See basis of preparation of reported financial information on page 37.in millions of 3 Full YearProperty, plant and equipmentNon-current assets held for saleIntangible assetsOther investments (provisions), netEmployee benefitsDeferred tax assets (liabilities), netDerivatives (non-current)2008 2009122-1,4071(53)(215)(54)Operating Investment - Non-current (a) 1,208 1,093Rental fleet 1,982 1,518Fleet receivablesFleet payablesFleet-related VAT receivables (payables), netFleet working capitalFleet asset base 2,017 1,486Trade and other receivablesTrade and other liabilitiesInventoriesNon-fleet working capitalProvisionsIncome tax receivable (payable), netDerivatives (current)478(473)2935403(358)1762(150)(0)2Operating Investment - Current (b) 1,931 1,335Operating Investment - Total (a) + (b) (1) 3,140 2,428Borrowings - Non-currentBorrowings - CurrentCash and cash equivalentsOther investments (current)Accrued interest and other loans, netNet liquidity (debt) (2)(795)(2,015)280395(2,486)115-1,3156(67)(184)(91)548(599)19(33)369(355)1530(173)(8)-(795)(1,449)266434(1,931)Equity (1) + (2) 654 497Europcar generated free cash flow ofc603 million in 2009, a 50% increasecompared with 2008. The improvementreflects a c206-million increasein cash flow from fleet acquisition anddisposal activities, which amountedto c579 million in 2009.For the year, the company reported aslight improvement in corporate freecash flow to c90 million, despite ac48-million shortfall in corporateEBITDA after non-recurring charges.This essentially reflects strong cashgeneration of c45 million from thereduction in non-fleet working capitalachieved in the year. Added to thec44 million of cash generated in2008, essentially in the second halfof the year, this c45 million generatedin 2009 brings to c90 million theliquidity produced through improvedmanagement of non-fleet workingcapital over 18 months. Income taxrefunds of c12 million also contributedto the strong corporate free cashflow performance in 2009.See basis of preparation of reported financial information on page 37.The decrease in intangible assetsmainly reflects a c91 millionimpairment related to goodwillallocated to Europcar’s Spain cashgenerating unit booked at the endof 2009, and a c37 million changein the fair value of the company’sinterest rate swaps. The strongreduction in the rental fleet andfleet working capital (c464 millionand c67 million at reported exchangerates, respectively) reflects both thesizing of fleet to lower demand andthe greater use of operating leases tofinance the fleet, which are reportedoff-balance-sheet. The current portionof on-balance-sheet borrowings,which are mainly fleet-related,declined accordingly by c566 millionto c1,449 million in 2009.The company cut its non-fleet workingcapital requirements in half, toc30 million at the end of December,31 2009 from c62 million at the end ofDecember 2008. As mentioned in thecash flow section (see page 34), thecompany generated nearly c90 millionin cash through the reductionof non-fleet working capital over thelast two years.Europcar Activity Report for 2009PAGE 34PAGE 35

asis of preparationSwitzerland contribution to the 2008income statement of Europcar Groupand their net debt information forthat year have been restated at the2009 British pound/euro, Australiandollar/euro and Swiss Franc/euroexchange rates, respectively. Incomestatement information presented inthe tables included in this report hasbeen restated using average exchangerates, which are calculated as theyear to date average daily exchangerate (excluding weekend and bankholidays) as reported by the EuropeanCentral Bank.Debt information has been restatedusing exchange rate information atthe relevant month’s end. Finally,adjusted pro forma operating incomeand operating margin also excludereorganization expenses incurred sincethe beginning of the fourth quarterof 2008 in order to adapt EuropcarGroup’s structure and cost base to theeconomic downturn that has affectedthe worldwide economy since 2008.The adjusted pro forma informationis not audited but is directly derivedfrom the IFRS audited income statementsfor the years 2008 and 2009. Ithas been prepared on a quarterly andconsistent basis in accordance withthe principles described above andis used by management to review theoperating and financial performanceof Europcar Group and to report on theresults of Europcar Group. We believesuch adjusted pro forma informationprovides a better understanding ofEuropcar’s operating performanceby allowing a full comparison of theperformance for the full year of 2008and 2009 on a like-for-like basis.for more information,please visit the investorrelations section of thewww.europcar.comweb siteEuropcar Activity Report for 2009PAGE 38