10 Nov 18

ALD grows fleet size by nearly 10%

Full service leasing and fleet management company ALD Automotive has recorded a 9.8% year-on-year rise in its fleet size and announced a series of new initiatives to expand its portfolio of services.

Reporting its results for the third quarter of 2018, ALD said it now manages 1.63 million vehicles worldwide, up from 1.49 million at the end of September 2017, and attributed its growth to investment in technology.

The company said its operations in Western Europe had experienced ‘strong posiitve growth’, while its new markets in Africa, Asia, and South America were enjoying ‘dynamic growth’.

The publically listed company, whose majority shareholder is Societe Generale, said it had accelerated its private leasing portfolio by 40% in the first nine months of 2018 to a total of 104,000 vehicles, and added that it was on course to hit its target of 150,000 private lease vehicles by the end of next year.

Diesel residual values

In the current market, the company said its conservative position on the residual values of diesel vehicles “is putting pressure on margins in a competitive commercial environment.” Q3 saw the firm’s margin on used vehicles fall to €368 per vehicle, down from €434 in Q2, and for the first nine months of the year proceeds from about 211,000 used cars sales have slipped to €85.4million, compared to €132.7million for the same period in 2017. Fitch ratings gave ALD a Long Term Issuer Default Rating of ‘A-‘ in September, while S&P Global Ratings upgraded its own rating to BBB+ from BBB last month.

Margin growth in leasing contract and services, however, has helped to offset the higher depreciation costs, and outstripped a 4.7% rise in operating expenses, said ALD. Overall, leasing contract and services margins touched €919.7 million, up 6.7% year on year for the first nine months of 2018, despite the negative impact of the Italian Stability Law.

New partnerships

The results coincided with ALD announcing the launch of ‘Leasing Auto’ with online French bank Boursorama Banque, which it says is the first 100% online private lease e-shop for Boursorama clients.

ALD has also entered the connected car space, via a new strategic partnership with Vinli. Signed in October 2018, this will give ALD access to Vinli’s connected car expertise, which includes a cloud-connected car and data intelligence platform.

An official statement from Mike Masterson, ALD CEO, said, “In Q3 18, ALD continued to generate strong fleet growth across the regions in which we operate. We are convinced that our sustained investments in technology make the difference when we pitch for business with large corporates in the face of strong competition. Similarly, our business development with smaller companies and professionals via our extensive partnership network is underpinned by state of the art digital tools, which also drive strong growth in the private lease segment. In parallel, through rigorous cost control and a continuous focus on efficiency gains, we ensure our business model retains its operating leverage, protecting the bottom line. Our achievements during the first nine months make us confident of ending the year in a position to be able to reward our shareholders with a dividend payment above last year’s.”

Authored by: Jonathan Manning