Rocky Q1 for LeasePlan but new services are catching on

The first quarter of 2018 saw the net result for LeasePlan go down 5% to €133 million, attributable to impairments in Turkey and in Germany. Excluding these impairments, the underlying net result was up 10.3% to €161 million. Meanwhile, an IPO is still under review.

LeasePlan CEO Tex Gunning said: "We have delivered a strong result in Car-as-a-Service driven by growth across all Lease & Additional Services lines as well as the ongoing positive impact of the "The Power of One LeasePlan" operational excellence programme. Looking ahead, we're well on track with the execution of our strategic roadmap to lead the industry."

Impairments

The €19.8 million impairment of the Turkish fleet was the result of the particular local market situation in Turkey, the only market in which LeasePlan has transactional foreign exchange exposure. Traditionally, lease contracts are priced in euro but vehicles at contract-end are sold in lira. Used-vehicle prices in lira and euro have always been correlated but during this period of severe and rapid lira depreciation, lira prices did not keep up with euro prices to the same degree.

The impairment of €10.5 million on the German market is related to a clean up of a series of loss-making contracts.

New services

The services fleet has increased by 6.6%, going from 1.661 million units in Q1 2017 to 1.772 million in the same quarter this year.

The Subscribe & Drive car subscription programme was launched in the UK, targeted at SMEs and private clients. This new service provides customers with the freedom to switch car when they need as long as they respect a three month minimum period. LeasePlan doesn't charge a deposit or early termination fees.

In the meantime, roll-out of the Click & Drive programme has continued. Click & Drive enables SME customers to quickly access pre-configured cars at attractive prices. It has now been introduced in France, the Netherlands, Belgium and Luxembourg.

CarNext.com

LeasePlan's new CarNext.com business has grown particularly strongly. It is a digital marketplace where customers can buy, lease and subscribe to high-quality used cars in Europe. CarNext.com was rolled out in Greece and Belgium in Q1, which has led LeasePlan to increase its penetration of higher-margin B2C sales in Europe to 17% (vs. 15% in Q1 2017). B2C volumes were up 50%, reaching around 10,500 vehicles.

Zero emission mobility

As part of LeasePlan's strategy to transition from the internal combustion engine to zero emission mobility, the company has introduced an end-to-end electric vehicle solution that includes personal charge points at home and at work. This zero-emission programme is available in countries ranging from Norway to Portugal.

IPO

For some time now, there have been rumours about an Initial Public Offering for LeasePlan. In its Q1 report, the company confirms it is exploring various strategic funding alternatives, including an IPO, without further details.