ALD fleet grows almost 10% in 2017
ALD's total fleet grew 9.8% last year (vs. 2016), confirming its leading position on the European vehicle leasing market. The company's full-year results also showed net income up by 10.9%, to €567.6 million.
“Our exceptional rate of fleet growth in 2017 shows the strength of our franchises and the quality of our services”, ALD International CEO Mike Masterson (pictured) commented on the full-year results for 2017. Some highlights:
- Total managed fleet at the end of December 2017: 1.51 million vehicles (up 9.8%).→ Gross operating income was up 7.1%, at €1,332.8 million.
- That result was driven by a strong increase in the margins of leasing contracts and services (+12%), which compensated for a lower result in car sales (-18%).
- The Group net income stood at €567.6 million in 2017, up 10.9%.
It's been an eventful year for ALD. In 2017, the company successfully listed 20.18% of its shares on the Euronext stock exchange; acquired Merrion Fleet in Ireland and BBVA Autorenting in Spain; and launched a greenfield operation in Colombia.
In 2017, ALD witnessed strong growth in all its regions, with fleet sizes up 10.3% in Western Europe, 4.5% in Northern Europe, 9.6% in Central and Eastern Europe, and 8.9% in South America, Africa and Asia; and in all client segments, with direct sales to corporates up 7% and sales via partnerships up 14%.
So, what's up for 2018? ALD wants to continue its pace of growth, aiming to add between 8 and 10% to its total fleet. Margins on leasing contracts and services should grow in line with that rate. As for its defleeted vehicles, the company is aiming for a result of between €200 and €400 per vehicle, on average.
Mr Masterson admitted that ALD's results for 2017 had been hobbled by a “challenging used-car market, affected by the continuing debate about diesel engines (…) We are moving towards a more balanced fleet mix and we're continually developing our used-car resale capabilities and the channels required to promote used-car leasing”.
Increasing pressure on resale prices of diesel cars in Western Europe has reduced the average sales margin on used vehicles from €729 in Q4 2016 to €469 in Q4 2017. The share of diesel cars in ALD's Western European fleets stood at 67.8% in Q4 2017, down significantly from 76.8% a year earlier. Across all regions, the drop was from 72.4% to 64%.
At the end of last year, private lease represented almost 78,000 vehicles, or 5.1% of the total fleet – up 42% since the start of 2017. The target for the end of 2019 is 150,000 units.