ALD, Arval and LeasePlan report "huge profits" in 2022
ALD and LeasePlan have just released their final pre-merger annual reports. Arval also published its results for 2022. As is traditional with these overviews, they highlight each company’s successes. Which makes it extra interesting to look for each report’s slightly different take: ALD focuses on record profit, Arval on fleet growth, and LeasePlan on EVs and subscriptions.
“While each of these three lease giants focuses on different elements, they have one thing in common: they all report huge profits”, says Steven Schoefs, editor in chief of Fleet Europe. “It’s clear that the crisis as felt by fleet managers has less of an impact on fleet suppliers. What remains to be seen, is how they will share their good fortunes with their customers. While it is perhaps utopian to expect lower rates, we’re more likely to see continued and increased investments in technological innovation, mobility offers and digital tools.”
ALD: record net income of €1.2 billion
For the first time ever, and despite the tough geopolitical and macroeconomic environment, ALD recorded a net result of €1.2 billion in 2022, +38% compared to 2021. “We generated a net result well above one billion euros for the first time in our history, confirming the solidity of our business model through the cycle and our agility in challenging situations,” says CEO Tim Albertsen (pictured left).
As ALD prepares to merge with LeasePlan this year, here’s a look at the company’s last annual results as a standalone entity.
- At the end of 2022, ALD’s funded fleet stood at 1.41 million vehicles (+3.1% year on year). Its Flex fleet reached 78,000 vehicles.
- EV penetration of new orders reached 27% in 2022, and currently stands at 35%.
- Total contracts amounted to 1.8 million worldwide (+5.2% year-on-year), with full-service lease contracts amounting to 1.4 million.
- The Leasing Contract and Services Margins were €1.88 billion, (+36.3% year on year, or +31.7% when adjusted for non-operating items).
- The used-car sales result stood at €747.6 million, +71% compared to 2021. The result per unit was €2,846 for the whole year (but just €1,919 for Q4 on its own). ALD sold a total of 263,000 used cars (versus 308,000 in 2021). The reduction is due in part to the growth in used-car lease.
- ALD’s operating expenses in 2022 amounted to €844.3 million. This included €128 million in costs related to the acquisition of LeasePlan.
- ALD is listed on the stock exchange. Its earnings per share were €2.66, +35% compared to 2021. The proposed dividend per share is €1.06.
With all key milestones achieved, ALD expects to close its acquisition of LeasePlan by 31 March 2023. Integration costs are likely to be in the €150-€180-million range this year. ALD expects new car supply to normalize later than previously anticipated, meaning the favourable situation on the used car market will likely continue throughout 2023.
Arval: 8.3% leased fleet growth
In its activity results for 2022, Arval emphasizes its fleet growth: +5.5% organically, +8.3% if you include its two acquisitions (Terberg Business Lease Group in the Netherlands and BCR’s leasing activities in Romania). At the end of 2022, Arval’s total fleet stood at 1.59 million vehicles. Other highlights:
- Around 300,000 vehicles electrified at the end of 2022, which is four times the amount compared to the end of 2019.
- The retail segment amounted to 454,000 vehicles in 2022, a 13% growth compared to 2021, showing “the growing interest of SMEs and private individuals for leasing, despite the challenging context”.
- In March, Arval launched Adaptiv, a flexible car subscription offer. Arval’s mid-term rental fleet grew by 48% to 55,000 cars (in 24 countries).
- The start of strategic partnerships between Arval’s parent BNP Paribas and Jaguar Land Rover, and between Arval itself and Ridecell.
- Arval’s bike leasing solution is now present in 13 countries, car sharing in 11 countries. Arval’s Mobility apps are availabie in 10 countries.
- Re-lease, Arval’s used-vehicle leasing offer, grew by 60% and was available in 16 countries.
In January, Arval acquired 100% of Arval Relsa, active in Chile, Peru and Colombia. Throughout 2023, the company will focus on its strategic partnerships, customer support (via Arval Connect) and global coverage (via the Element-Arval Global Alliance). “Backed by the strong strategic ambitions of the BNP Paribas Group in the field of mobility, Arval will pursue its growth trajectory in 2023, further advancing its Arval Beyond strategy”, says CEO Alain Van Groenendael (pictured centre).
LeasePlan: 32% of deliveries are EVs
LeasePlan celebrates its 60th (and last) anniversary this year. “All LeasePlanners can be proud of what we have achieved with the dedicated support of our shareholders, and the trust of our investors, customers and suppliers”, says CEO Tex Gunning (pictured right) in the annual report, which reveals strong growth, thanks in part to the company’s early pivot to EVs.
- LeasePlan booked a full-year net result of €1.93 billion (+90.3% year-on-year). The underlying net result was €1.42 billion (+85.9%).
- The serviced fleet grew by 7% to a total of 1.63 million vehicles.
- In 2022, LeasePlan sold almost 208,000 used vehicles, 14.1% less than in 2021.
- Operating expenses were €895 million (+11.6%), due to continued investment in growth and digital platforms.
- On 1 December, LeasePlan completed the divestment of its U.S. subsidiary to the parent company of Wheels Donlen.
- The report says the adoption of EVs across Europe is driving the acceleration of car subscriptions, with LeasePlan “well positioned to take full advantage of this structural market shift with 32% of our deliveries (in Q4) now EVs”.
LeasePlan continues to benefit from strong demand for its “high-quality used cars”, and is making good progress in transforming an analogue business model into a digital one. “Our merger with ALD is on track to close by the end of Q1 2023. The combined business will be best positioned to take full advantage of the acceleration of demand for car subscriptions”, says Mr Gunning.
Reviewing these results, Leasing and Mobility expert Pascal Serres says: "2022 is a great vintage for the three market leaders. ALD and Leaseplan report exceptional results based on exceptional profits on used car sales. At a glance, it represents around €1 billion each if we combine profits on actual sales and reduced depreciation on the portfolio. In the case of Leaseplan the €1.9 billion accounting result also includes a capital gain on the sale of its US operation. In the case of Arval, we will have to wait until March 6 to get financial results but we know that its portfolio has grown by 8.3% and it is only funded contracts (the ones generating more revenues and profits). Therefore, we have no doubt about the quality of their results as they will certainly make also good results on used car sales."
Image: Fleet Europe