3 Aug 23

ALD LeasePlan says size matters as it publishes first results

The first set of financial figures unveiled by the newly merged leasing giant ALD | LeasePlan reveal a growth in its fleet, rising numbers of electric vehicles, size-related procurement advantages and buoyant used car disposal profits.

ALD finally acquired LeasePlan on 22 May, and the combined entity is now the world’s largest multi-national, multi-marque leasing and fleet management company, with a total fleet of 3.391 million vehicles. These include 2.67 million full-service leasing vehicles, up 3% year-on-year, and 724,000 fleet management contracts, up 9.1% over the same period.

Almost one third (32%) of ALD | LeasePlan’s fleet is now ‘electrified’, representing 428,000 vehicles, split between battery electric (19%) and plug-in hybrid (13%).

Merger is on track

Tim Albertsen, CEO of ALD | LeasePlan, said the integration of LeasePlan is progressing according to plan, with the group’s first objectives already achieved within 60 days of the acquisition.

Chief among these is the transition of fleets previously supplied by both companies to a single account team, and a start to leveraging the enhanced purchasing power of the combined companies. ALD | LeasePlan said it has already negotiated improved terms with several OEMs, and has also launched its first joint global tender, aiming to capitalise on the 4 million tyres it buys annually. The company said it was on track to achieve annual procurement savings of at least €30 million.

Credit rating agencies have also recognised the strength of the business, upgrading their ratings, which has enabled ALD | LeasePlan to secure more competitive funding costs.

Disposal profits

The continued strength of the used car market, driven by a shortage of supply, has delivered average disposal profits of €1,200 to €1,600 per vehicle, and the figures would have been even higher (€2,887 per vehicle) had ALD not already adjusted its residual value forecasts upwards for many of the 290,000 vehicles it will sell this year. The financial results make no assumption on LeasePlan’s disposals, with the company’s assets and liabilities recognised at ‘fair value’, under the terms of the international accounting standard IFRS 3, with a Purchase Price Allocation (PPA) exercise due to be finalised by the end of this year.

ALD has also reduced its future depreciation forecasts, anticipating continued high used car prices until mid-2024, but no adjustment will be made to LeasePlan’s portfolio until the PPA exercise is finished.

Financial results

The combined accounts for the first half of 2023 only include LeasePlan’s contribution since 22 May, and show a pre-tax profit of €894.4 million on revenues of €3,015 million.

“The first results of ALD | LeasePlan as a combined entity are strong and promising, supported by a still highly favourable used car market and reflecting the unwavering commitment of our employees to achieving the best standards of service quality while transforming the company. They testify to the solidity and resilience of our business model in a rapidly changing macroeconomic environment. I have no doubt that the combined entity will be able to capitalise on this transformative deal to create value for all stakeholders,” said Albertson.

Selling businesses

ALD has also completed the sale of its subsidiaries in Ireland, Portugal and Norway, as well as LeasePlan’s subsidiaries in Luxembourg, Finland and the Czech Republic, to Credit Agricole Consumer Finance and Stellantis, to comply with conditions laid out by European competition authorities. The combined fleet of these six businesses accounted for about 100,000 vehicles or 3% of the total combined fleet of ALD Automotive and LeasePlan as at 31 December 2022.

The disposal of ALD Russia in April led to a loss of €91.3 million. 

Authored by: Jonathan Manning