Successfully Connecting Humanity

Now driving forward under the Zeda brand, listed on the JSE in December 2022, Avis South Africa is reinforcing its position as an industry leading mobility provider with interests in car rental and fleet management, globally recognised for quality.

The journey of leading car rental business Avis South Africa continues to accelerate as it navigates the chicanes of a challenging economic conditions and new corporate structure. Rent a car is one of the largest division of the business, with strong operations across Fleet and Car Sales. Heavily reliant on tourism, the rent a car business, Avis SA, had to calculate a new route when the pandemic hit, and CEO Ramasela Ganda – who joined the company four days before national lockdowns and tourism restrictions were announced in South Africa – was forced to implement several strategic initiatives to keep the engines ticking over.

The success of the company during this time – supporting delivery services, acquiring dormant fleets, changing vehicle profiles, and splitting each market based on regional constraints – displayed power and strength when it was sorely needed with competitors and industry peers crashing or stalling.

This energy and success during the toughest of times saw Avis SA lauded by its major shareholder, Barloworld. As the pandemic eased, Avis quickly took pole position in the local market and began to realise the fresh importance of connecting people with each other and with the country.

UNBUNDLING

Internally, a discussion began around unbundling Avis from the Barloworld portfolio and allowing the company to take a new path. All were certain that international tourism would return to the market in time, and this is where Avis thrives. In the first four months of 2023, 3.7 million international visitors passed through South Africa’s ports of entry. Most of the entrants came from the continent, but the rising numbers are encouraging for all.

Ready to take full advantage of the reemerging market, Avis has become part of a new structure following the unbundling from Barloworld in November 2022.

“This is a bittersweet moment for Barloworld,” admitted Group CEO, Dominic Sewela. “While we conclude our restructuring and portfolio shift to defensive, relatively asset light and cash generative industrial sectors, based on a business-to-business operating model, we are also letting go of an incredibly strong business whose adaptability has taken it from strength to strength. 

“This decision was taken in the interest of maintaining value for our shareholders. As two separate companies each business will be able to operate in a more focused and efficient manner – actively pursuing our growth ambitions in different sectors and verticals.”

Ganda was understandably excited, steering the company towards a bright future with a full tank of optimism in the form of around 1700 knowledgeable employees, a fleet management and leasing portfolio of more than 250,000 vehicles, and a brand recognised around the world for quality.

“This is the beginning of an exciting chapter for us as we pivot from Barloworld with a solid foundation,” she said. “Being a standalone business will enable better focused execution of our integrated mobility strategy, which caters to the evolving customer’s needs in our markets of operation. We provide an array of mobility solutions including car rental, fleet management and leasing as well as car sales in 10 countries.” 

Avis SA became part of Zeda, a holding company with the rights to the Avis and Budget brands. Avis is the oldest car rental business in the country and Budget has a strong network, with positions at most airports and a fantastic fleet.

“Through these operations, which have downstream benefits for the southern African economy and play a vital role in key value chains and sectors, Zeda demonstrates its role as a catalyst of economic growth,” added Ganda.

The purpose of Zeda is ‘connecting humanity’. To do this, mobility solutions will bring people, businesses, opportunities, and industry sectors closer together. The name has heritage after Zeda Car Rental was established in Bloemfontein in 1967 with just three cars, acquired by Avis just a year later.

FRESH JSE LISTING  

After unbundling, Ganda’s attention turned quickly to the JSE and a fresh listing, attracting new investment to Zeda – pedal to the metal. Previously the CFO at Ekurhuleni Metro and Executive at Barloworld Equipment, she is an accounting and finance professional by training.

After much preparation and planning, the listing hit the JSE’s main board on 13 December 2022 promising investors a company at the forefront of mobility in southern Africa.

“Today is an important day in the evolution of not only our company but the future of mobility for the region. We have come full circle as we come back to the JSE as Africa’s largest and only integrated mobility solutions provider,” said Ganda.

“Our 55 years of operating have seen us navigate various trends in the operating environment. As a standalone business, we will be more agile in continuing to anticipate and respond to these trends including the current positive changes that we are seeing in mobility and more specifically the changes we are seeing in customer behaviour. Our Avis Budget product proposition is one that is well positioned to leverage these opportunities and drive greater adoption of the usership economy.”

The momentum of Zeda through a busy period has been strong and Avis and Budget have both been allowed to accelerate. This was clear in the company’s financial results for FY 2022 which showed an increase in revenue of 6.6% to R8.1 billion, an increase in EBITDA of 28.1% to R2.8 billion, and a 52.8% increase in operating profit to R1.3 billion. Interim results for the six months ending 31.03.23 also revenue up 20% and operating profit up 25%. 

“We are resolute in our commitment to deepening the adoption of the usership economy through delivering integrated mobility solutions. We are executing our strategic pillars under the themes fix, optimise, and grow to unlock value for shareholders,” said Ganda.

Importantly, the services delivered by the business and the interactions with Avis staff around southern Africa will continue to be the best in the industry. Customers will receive great cars, at competitive prices, through a well-oiled system that allows for international tourists to experience the same level of excellence they could expect in New York, London, Sydney, or Tokyo. This will continue to drive financial performance, and all stakeholders will benefit. 

“We have a beautiful country for people to explore,” Ganda smiles.