ALD and LeasePlan report strong Q1 results prior to merger
Windfall profits on vehicle disposal have boosted the financial results of ALD and LeasePlan in the first quarter of 2023.
A week ahead of ALD’s planned €4.9 billion acquisition of its rival on 22 May 2023, which will create one of the world’s largest leasing and fleet management companies with a combined fleet in excess of 3.5 million vehicles, both leasing and fleet management giants have announced their financial results for Q1 2023.
Fleet growth
The results show that ALD has grown its funded fleet by 3.2% compared to Q1 2022 to 1.423 million vehicles, with a further 336,000 vehicles under management, up 13.8%.
Over the same period, LeasePlan increased its total fleet size by 4.6% to 1.651 million vehicles (it did not separate funded from managed).
Disposal profits
The favourable supply-demand situation in the used car market has underpinned the strong financial performance of both companies in Q1 2023. ALD achieved used car sales profits of €2,535 per vehicle, and the results would have been €3,102 per vehicle if the company had not already reduced depreciation costs as a result of exceptionally high used car prices in 2022. LeasePlan enjoyed a similarly successful first quarter, driving up its revenues from vehicle sales and end of contract fees by 19.3% compared to Q1 2022, due largely to selling a higher volume of vehicles.
Both companies forecast the strong used car market to continue in 2023, while new car supply gradually normalises after the severe shortages of the last two years.
Financial results, Q1 2023
ALD LeasePlan
Total contracts 1.815m vehicles 1.651m vehicles
Profit before tax €442.6m €412m
Profit Q1 2023 €316.9m €323m
EV demand
Looking ahead, both companies report rising demand for electric vehicles, which accounted for 29% of ALD’s Q1 deliveries and represent one-third of its order book; while 31% of LeasePlan’s Q1 deliveries were electric.
ALD has also announced a US$400m facility to support the uptake of 15,000 battery electric vehicles, plug-in hybrids and full hybrids in Turkey, Mexico, India, Serbia, Romania, Bulgaria and Croatia.
Acquisition / merger
Tim Albertsen, ALD CEO, said: “ALD again recorded a strong performance in Q1 2023 on the back of robust commercial dynamics and continued highly favourable used car markets. This outstanding achievement in a challenging macroeconomic environment reflects the relevance and the solidity of our business model through the cycle.”
He added that an Extraordinary General Meeting on 22 May will close the acquisition of LeasePlan and start: “a new chapter of our development, where we will join forces to continue leading the transformation of the mobility industry.”
Tex Gunning, CEO of LeasePlan, said: “Demand for sustainable car subscriptions continued to drive strong growth across all customer segments. To capture the accelerated market growth ahead, we continued to make progress in our digital transformation, enabling us to deliver digital services at digital cost levels. Highlights included the folding in of additional countries to our optimized LCV fleet management platform, as well as the further rollout of automated maintenance approvals based on AI within our RMT processes.”
He added that the merger with ALD will see: “Talents from both businesses ready to take full advantage of the acceleration of demand for car subscriptions.”
