Preliminary results for year ended 31 December 2007

Operating Highlights

• Good volume growth and rental revenue per day ahead of prior year.
• Higher fleet costs partially mitigated by lower insurance costs and improved utilisation.
• Investment in revenue management and websites delivering benefits.
• Substantial network changes – net capital release circa €200 million.
• Turnaround of Budget continues.
• Both underlying¹ operating margin and ROCE ahead of prior year.

Financial Highlights²

• Revenue on continuing operations up 5.7% to €1,327 million.
  
• Profit before tax on continuing operations of €33.2 million (2006: €1.8 million). Underlying profit before tax on continuing operations³ of €37.6 million (2006: €30.0 million).
  
• Net exceptional pre-tax charge of €22.8 million (2006: €28.9 million), including €15.9 million relating to the discontinued operation in Greece and also to restructuring costs.
  
• Earnings per share on continuing operations of 1.6 euro cents (2006: loss per share 0.2 euro cents). Underlying earnings per share on continuing operations
  of 2.9 euro cents (2006: 2.3 euro cents).

Pascal Bazin, Group Chief Executive, said:

“Further progress was made in 2007. We achieved both volume growth and improved pricing, assisted by our recent investments in revenue management and web development, together with an improvement in the Group’s operating margin.

The main elements of our existing strategy are unchanged, but with an even greater focus on: differentiating our offer through service in the commoditising market; having a strong focus on sales; increasing cost efficiency; and further improving business flexibility. We will however be adopting a stronger operational approach, with more emphasis on delivery and accountability, as well as accelerating benefits from recent investment in initiatives.

Looking ahead to 2008, we are now more cautious in view of the weakening economic environment. We expect to make continued progress with the turnaround of the Group. However, our planning assumptions, reflecting recent trading conditions, are for continued volume growth, but with rental rate per day now improving less than previously expected. We continue to maintain tight control of cost and plan to make continued improvements in key efficiency measures, particularly vehicle utilisation.”

¹ Underlying excludes exceptional charges certain net re-measurement gains and economic hedging gains (see Basis of Preparation). Underlying is not a defined term under IFRS, and is not intended to be a substitute for, or superior to, IFRS measures of profit.
² As reported in the 2007 Interim Results, 2006 comparatives have been restated following the prior year adjustment regarding Avis Portugal.
³ Underlying profit before taxation from continuing operations excludes the underlying profit before taxation on the discontinued operation of €2.4 million (2006: €5.4 million). Underlying profit before taxation including the discontinued operation is therefore €40.0 million (2006: €35.4 million). These profit measures exclude exceptional charges of €22.8 million (2006:€28.9 million) and certain net re-measurement gains and economic hedging gains totalling €2.5 million (2006: €0.7 million).

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