8 Feb 24

Ayvens releases 'mixed' results following integration of LeasePlan

Residual values, EV losses, integration costs and interest rates have impacted profits.

Ayvens has reported what it calls “mixed” financial results in its first set of accounts since the business was created by ALD's EUR 4.8bn acquisition of LeasePlan in May 2023.

Its profits have been buffeted by a series of headwinds, with the leasing and fleet management giant blaming a -22% year-on-year fall in its pre-tax profits to EUR 1,295.7 million in 2023 (2022: EUR 1,666.1 million) on the normalisation of the used car market delivering weaker disposal proceeds, interest rate movements, significant costs to integrate LeasePlan, and its hedging derivative portfolio.

The combined company now operates a fleet of 3.42 million vehicles (2.7 million funded and a further 710,000 under management) representing a 3% increase on 2022.

Residual values and EVs

The residual values of vehicles that Ayvens sold in 2023 remained strong, albeit well down on the previous year, with used car sales profits declining to EUR 2,400 from EUR 3,269 in 2022, although these figures were eroded in the company’s accounts by prior reductions in depreciation costs as well as purchase price allocation following the takeover of LeasePlan in May.

Ayvens expects a gradual normalisation of residual values for both internal combustion engine vehicles and plug-in hybrids, and is implementing strategies to manage the depreciation risks posed by battery electric vehicles, which represent 11% of its total fleet and accounted for 21% of new deliveries in 2023.

Tim Albertsen, CEO of Ayvens, said: “We do anticipate manufacturing costs of full EVs will reduce over the next four to five years, hence we are adjusting our pricing of new contracts going forward, mainly through a reduction in residual values. We are lengthening the duration of our contracts and promoting multi-cycle leases to reduce our residual value risk.”

OEM pricing protection

He added that the company is leveraging its influence in the corporate car market, responsible for driving the uptake of EVs across Europe, to negotiate pricing protection from certain vehicle manufacturers. If they reduce their prices within a certain time frame after Ayvens has acquired a car, the OEM will provide an element of reimbursement to compensate for any future residual value shortfall, Albertsen told investors.

However, even EV contracts that suffered heavy disposal losses have turned out to be profitable on the balance sheet, he said, with the cars proving cheaper to service and maintain than their ICE equivalents, and income from the interest payments on EVs (which typically cost more than ICE models) more than covering their sale losses.

Experience in Europe’s most mature EV market, Norway, has demonstrated that a mature secondhand EV market can develop, with Ayvens reporting no disposal losses there, while in Denmark and the Netherlands close to 30% of EVs supplied by Ayvens are now on second-life contracts.

Indexation clauses for inflation

Further initiatives to restore profitability include the introduction of ‘indexation’ clauses into new contracts in certain markets, which allow Ayvens to raise prices during the term of agreements to take account of inflation. The company is using this in Belgium, for example, to cover the cost of the legal requirement to increase salaries by 4%.

“In two countries we have contracts where we can impose inflation during the life of the contract and we are now looking at other countries where we have not had this opportunity,” said Albertsen.

Ayvens is also repricing contract extensions to take account of higher interest rates.

LeasePlan integration costs

The integration of LeasePlan is progressing according to plan, said Albertsen, although there will be further sizeable investment costs before Ayvens will reap the benefits. The company expects to invest EUR 190 million this year to achieve synergies of EUR 120 million, but forecasts synergies of EUR 350 million in 2025 for a cost of just EUR 37 million, and EUR 440 million in 2026 for no cost. The next two years will see major procurement initiatives for vehicles, tyre fitting, roadside assistance and end-of-life vehicle inspections.

The company also aims to restore profitability by upselling services such as Ayvens Flex and increasing its volumes of light commercial vehicles and insurance.

However, Ayvens has written off EUR 203 million that LeasePlan had invested in its Next Generation Digital Architecture, and will instead roll out ALD’s legacy back office IT system for the majority of its systems integration.

Nonetheless, the purchase price allocation for LeasePlan has proved to be positive, with LeasePlan’s net assets valued EUR 230 million higher, its lease assets up EUR 380 million and its customer relationships up by EUR 100 million.

“A few months into the integration, I am grateful for the unwavering commitment of our employees who maintained the highest standards of customer service while efficiently implementing our integration plan, which progresses according to schedule,” said Albertsen.

“In the context of normalising used car markets, higher inflation and volatile interest rates, Ayvens posted mixed financial results for a transition year, compared to an exceedingly high 2022 base, but confirmed its strong capital position. In accordance with our strategic plan, our teams are tackling these challenges head on and have undertaken decisive steps to restore our margins, reduce the volatility of our revenues and protect the value of our assets. I am confident that we can achieve this, thanks to our unique competitive position and proven agility, and that we will be able to see the benefits by the end of this year.”


  2023 2022
Earning assets EUR 52bn EUR 45.5bn
Funded and managed fleet 3,420,000 vehicles 3,321,000 vehicles
EV deliveries 21% BEV, 13% PHEV 16% BEV, 8% PHEV
Gross operating income EUR 2,965.6m EUR 2,643.9m
Leasing contract and services margin EUR 2,616.1m EUR 1,896.2m
Pre-tax profit EUR 1295.7m EUR 1,666.1m
Net income group share EUR 816.2m EUR 1,215.5m
Authored by: Jonathan Manning