Munich You can earn money with long-distance transport in Germany: Last year, for the first time in the company’s history, the start-up Flix achieved a positive operating result before interest, taxes, depreciation and amortization (Ebitda). The company announced this on Wednesday in Munich without giving a specific number.
A precise statement is to follow at a later date, when auditors have certified the business data. However, the company with the brands Flixbus and Flixtrain has already published figures on sales: it rose significantly by 185 percent to a good 1.5 billion euros.
Flix is ten years old these days. For co-founder and CEO André Schwämmlein, this is reason enough to take a closer look at the state of the company: “We were always very cautious with financial figures, we are changing that today.” The opportunity is good. Like other mobility companies, Flix has left the pandemic behind. In 2022, more than 60 million passengers used the company’s buses and trains in 40 countries.
Flix is considered a candidate for an IPO
“It is the most successful year in our history so far,” said Chief Financial Officer Christoph Debus. For the current year, the Flix management expects another strong increase in sales, of at least 20 percent. Profitability should continue to improve. “Our goal is mobility that is affordable for everyone,” said Schwämmlein, who did not rule out price increases. Even Flix is not free from the rising costs.
Flix started the Flixbus offer after the liberalization of the long-distance bus market in Germany in 2013. From 2015, the young company took over numerous rivals such as Mein-Fernbus, the European business of the US company Megabus and Postbus. At the same time, Flix expanded into numerous European countries. In 2021, it finally took over the US long-distance bus icon Greyhound. The railway division was started as the second pillar.
Flix boss André Schwämmlein continues to rely on the train business and wants to expand the offer.
(Photo: imago images/PicturePoint)
The expansion cost a lot of money and demanded the patience of the financiers. Investors such as General Atlantic, Permira, TCV, HV Capital, Blackrock, Baillie Gifford and Canyon Partners are involved in Flix. According to the latest information, the three founders Schwämmlein, Jochen Engert and Daniel Krauss still hold just over 25 percent of the shares.
Recently, the pressure on management had grown to break even. In the long term, Flix should go public, even if there are currently no plans to do so. “We are well financed, we have strong investors, so we are not in a hurry,” said CFO Debus. Added to this are the profits that are made. But of course a company like Flix always has to look at all financing options.
Flixbus and Flixtrain mediate more instead of buying
However, the last financing round of 650 million dollars was almost two years ago. Flix’s business has also become more capital-intensive. With Greyhound, the company acquired around 1000 buses. Investments are also pending on the rails. According to information from financial circles that has not yet been officially confirmed, the management is considering the purchase of trains financed by external investors.
Schwämmlein and his colleagues don’t want to give up growth entirely. One will continue to invest in the train and bus service, said Schwämmlein. Chile is set to become the 41st country with green buses. Schwämmlein renewed his demand to include long-distance buses in the planned 49-euro ticket in Germany. One is in exchange with politics.
>> Read also: Flixbus group finally wants to be in the profit zone – and become part of the 49-euro ticket
Basically, the company sees itself as a technology provider without its own “assets” such as buses and trains. The company usually leaves their operation to partners. Flix provides the platform for sales and management of the offers. That makes for a light balance sheet, which potential investors value in an IPO.
Train traffic at Flixtrain requires higher investments
However, according to Schwämmlein, investments in real assets are sometimes unavoidable if the company is to continue to grow: “Travel and mobility has been a growth market for years and will continue to be so.” Flix wants to benefit from this. The CEO also referred to past successes.
Greyhound was lifted onto the Flix technology platform in just 14 months and was thus able to win additional customers. In 2022, a good eight million passengers used buses from the Flixbus and Greyhound brands in North America.
>> Read also: Deutsche Bahn loses shares in long-distance and freight transport
Schwämmlein also doesn’t want to shake up the Zug business segment, although it is considered to be particularly capital-intensive. “Bus and train complement each other, we believe in the train as part of our growth strategy,” said the entrepreneur.
However, business on the rails is much more complicated. In long-distance transport, for example in Germany, there is no real second-hand market for vehicles. Because there is hardly any competition apart from Deutsche Bahn. However, investors who provide money for new trains want the prospect of a second use if Flix should modernize the fleet after a few years.
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