Avis Europe plc Preliminary Results for the Year Ended December 31, 1998

Business Wire, Feb 24, 1999

Rental days, excluding acquisitions, increased by 9.7% and ECU revenue per day by 4.8%. The revenue per day increase was driven by price increases in a number of markets, together with new rental counter products introduced during the year.

The Group achieved double digit ECU revenue growth in each of its five major European markets, including the UK, which together account for 84% of total Group revenues. Economic factors led to a slowdown of demand in the UK market during the last four months of the year. Despite this, our key efficiency measures of people productivity and fleet utilization in the UK were again ahead of prior year by December.

Our operational ability to adjust to changes in demand in relatively short time periods provides a key differentiator for our business versus other travel related industries.

Balanced Growth in our Core Market Segments

We have continued to implement strategies to ensure balanced growth in our core market segments of Corporate, Leisure and Replacement car.

We achieved strong ECU revenue growth of 17.5% in the Corporate market with significant success in small and medium sized account development. The percentage of customers utilizing the Group's speed of service programs at principal business destinations increased by 21%. These programs have been further enhanced with the launch of self-service rental kiosks at key locations in Germany.

We have continued to focus on growth opportunities in the Leisure segment and have successfully integrated our former Greek licensee. From the acquisition in July 1998 through to December 31, 1998, Greek revenue grew by 31% versus the comparable period in 1997. The Group now has a corporate presence in the principal Mediterranean markets and is well placed to extract maximum advantage from future growth opportunities into this region.

We have invested further in partnership development and strategic alliances to underpin our growth. Initiatives within the global partnership with British Airways signed during 1998 contributed to first year annualized revenues 25% ahead of expectations. In addition, we secured six new airline partners during the year. Avis Europe has more airline partners than any other car rental company and also has partnership relationships with Europe's major rail companies.

The 12 year partnership with the French national rail company, SNCF, was further strengthened in 1998 with the signing of an exclusive two year marketing partnership which promotes Avis car rental facilities in 195 railway stations around France and provides 10,000 SNCF employees with facilities to sell Avis rentals alongside rail tickets.

The Replacement car segment, highlighted at the time of our flotation as a targeted expansion area, performed particularly well, with an increase in ECU revenues of 20.4% versus prior year.

In December, we announced that we had acquired 3 Arrows, one of the UK's leading companies in the credit hire and non-fault claims management business, for a total cost of (pound)41.8 million.