ALD
ALD reports First Half 2019 Results
01-Aug-2019 / 07:30 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
PRESS RELEASE
HALF-YEARLY FINANCIAL INFORMATION
Paris, 1 August 2019
ALD REPORTS FIRST HALF 2019 RESULTS
· STRONG OPERATING PERFORMANCE CONFIRMING FY 2019 GUIDANCE
· TOTAL FLEET AT 1.70 MILLION VEHICLES
· STRONG OPERATING LEVERAGE: COST/INCOME RATIO (EXCL. CAR SALES RESULT)
CONTINUING TO IMPROVE
· H1 19 CAR SALES RESULT PER UNIT AT TOP END OF 2019 GUIDANCE
· NET INCOME (GROUP SHARE) AT EUR 280.7 MILLION
ALD Q2 & H1 RESULTS HIGHLIGHTS
· Total Fleet: 1.70 million vehicles[1] managed worldwide at end June
2019, up 7.2% vs. end June 2018
· Leasing contract & services margins up 4.4% in H1 19 vs. H1 18 at EUR
638.0 million
· Car Sales result per unit[2] at EUR 346 in Q2 19, EUR 301 in H1 19
· Gross Operating Income at EUR 681.4 million in H1 19, up 1.6% vs. H1 18
· Operating expenses up 2.8% in H1 19 vs. H1 18, pushing Cost/Income
ratio[3] (excluding Car Sales Result) down to 49.4% from 50.7% a year
earlier
· Net Income (Group share) at EUR 280.7 million in H1 19, up from EUR
280.0m in H1 18; ROE[4] at 15.3% in H1 19
KEY STRATEGIC INITIATIVES & OPERATIONAL DEVELOPMENTS
· Selected by Amazon to launch 'Motors' personal car leasing platform in
Spain
· Acquisition of BBVA Automercantil's vehicle renting portfolio in
Portugal
· Completion of Stern Lease acquisition and partnership agreement in the
Netherlands
· Partnership with retail chain Eroski in Spain
On 1 August 2019, Mike Masterson, ALD CEO, commenting on the Group Results,
stated:
"In Q2 19, ALD has again proven its resilience in a complex environment,
with fleet growth in line with expectations. Private lease continued to show
strong dynamics and passed an important milestone in Spain, where ALD was
selected by Amazon for the distribution of personal car leasing. This
achievement illustrates our ability to deliver best-in-class services to our
customers and the efficiency of our digital tools. The shift in our fleet
away from diesel has accelerated, outperforming the objectives we had set
ourselves for this year. We continue to actively promote electric and hybrid
vehicles and are enriching our offer around electric vehicles. Our solid
financial performance in Q2, which was underpinned by our commercial
successes and our strong operating leverage, makes us confident we will
reach the guidance we have set for 2019. We are convinced our strategy,
built on expanding partnerships and state-of-the-art technology, leaves the
business well positioned to be a leader in the mobility sector in the years
ahead."
CONTINUED STRONG BUSINESS DEVELOPMENT
ALD total fleet reached 1.7 million1 at the end of June 2019, up 7.2% vs.
the same period the previous year. This performance was achieved in a
complex environment marked by pressure on the auto sector and by the
continuing powertrain transition. The guidance range of 5-7% organic fleet
growth provided at the start of the year is confirmed.
Private lease fleet showed strong growth in H1 2019, at 36%[5], reaching
133K contracts at the end of June 2019. ALD leverages its extensive
partnership network to drive the growth of this segment. The company's
adaptable end to end digital platform constitutes a key pillar in the
development of its private lease offer. ALD is confident of reaching its
target of 150K contracts with private individuals by year end.
ALD continues to diversify its distribution channels. On 19 June 2019, the
Group announced it had been selected by Amazon for the launch of 'Motors'
personal car leasing platform. This platform focuses on the distribution of
new and used car leasing contracts across Spain and leverages ALD's digital
technology. This success rewards the significant IT investments made by ALD
in recent years to develop digital platforms.
ALD's policy of diversifying its fleet mix away from diesel is showing
strong results: the majority of the vehicles registered by ALD in H1 19 was
non diesel, with the share of diesel in the deliveries of passenger cars
dropping to 47% from 61% a year earlier. This reflects ALD's adjustments in
diesel residual values, ALD consultancy initiatives and the development of
new sales channels and products around EV. ALD's diesel passenger vehicle
fleet is now almost purely 'Euro 6', with less than 29K 'Euro 5' passenger
vehicles2 remaining and expected to be sold during the course of the year.
ALD continues to encourage clients to opt for electric and hybrid vehicles.
The number of such 'green' vehicles managed rose to more than 118K at the
end of June 2019.
SOLID OPERATING AND FINANCIAL RESULTS
Leasing Contract and Services Margins taken together rose by 4.4% in the
first half of 2019 vs. the same period last year. This performance was
achieved in the context of Diesel residual values repricing putting pressure
on Services margin growth.
Demand for used cars remained good during Q2 19, supporting prices. As a
result, Car Sales Result per unit[6] increased to EUR 346 in Q2 19 from EUR
258 in Q1 19. In the first half of 2019, CSR per unit6 reached EUR 301,
putting it at the top of the guidance range of EUR 100 to EUR 300 per
vehicle, which ALD reconfirms for the full year.
The number of used cars sold6 in Q2 19 reached c. 71K, vs. c. 70K in Q2 18.
In line with previous quarters, more than 60% of used cars were sold via
electronic platforms. Average stock turnover remained stable over the
quarter.
Car Sales Result in Q2 19 was EUR 24.4 million, rebounding from EUR 19.0
million in the previous quarter, though still down markedly from EUR 30.2
million in Q2 18.
Gross Operating Income for the first half of 2019 came in at EUR 681.4
million, up 1.6% from EUR 670.8 million a year earlier.
Thanks to its strong cost control culture, ALD is able to maintain its
investment in technology and digital platforms. ALD showed a moderate rise
in its Operating Expenses to EUR 316.8 million in H1 19, up 2.8% vs. H1 18.
As a result, the Cost-Income ratio excluding Car Sales Result[7] improved to
49.4%, from 50.7% recorded a year earlier, continuing its downward trend
driven by scale benefits and automation of processes throughout the
organisation.
Impairment charges on receivables were up from a low EUR 13.4 million in H1
18, but remained well under control at EUR 21.8 million in H1 19, equivalent
to a cost of risk[8] of 22 bps.
ALD's effective tax rate stood at a low 17.4%, reflecting the continued
favourable impact of the Italian Stability Law.
ALD's solid operating performance resulted in Net Income (Group share) for
H1 19 of EUR 280.7 million, up from 280.0 million in H1 18.
BALANCE SHEET AND FUNDING
Earning Assets rose 4.3% at the end of H1 2019 vs. the end of the previous
year, reaching EUR 19.9 billion, underpinned by fleet growth. Financial debt
rose 5.5% vs. end 2018.
At the beginning of July 2019, the group issued a new bond under EMTN
programme for an amount of EUR 500 million at a fixed rate of 0.375%
maturing in July 2023.
ALD is rated BBB+ by S&P Global Ratings and A- by Fitch Ratings, both with
stable outlook.
The Group's Total Equity to Total Assets ratio stood at 15.2% at the end of
June 2019, down from 15.8% at year-end, but within the Group's guidance
range. The drop reflects the payment of the 2018 dividend during the second
quarter (EUR 234m).
ROE[9] for the first half came in at 15.3%.
The Group's consolidated results as at 30 June 2019 were examined by the
Board of Directors, chaired by Philippe Heim, on 31 July 2019. Full details
of our financial results for Q2 19 and H1 19 are available on our website at
www.ALDAutomotive.com [1], under "Financial Results" in the Investors
section. These results have been subject to a limited review by ALD's
Statutory Auditors.
KEY STRATEGIC INITIATIVES & OPERATIONAL DEVELOPMENTS
ALD selected by Amazon to launch 'Motors' personal car leasing platform in
Spain
On 19 June 2019, ALD announced, in cooperation with Amazon, the launch of
'Motors' in Spain, a new store allowing customers to lease a car from a
range of brands. Car leasing via amazon.es/motors comes at low monthly
prices, no initial deposit, free doorstep delivery and a 50km/30-day return
policy. Leasing packages are available for either 36 or 48 months and
include service and maintenance, insurance, tire replacement, breakdown
assistance, vehicle registration, and excess mileage buffer.
After selecting their car, configuration and lease duration, customers
receive an email with a link taking them to the ALD online leasing platform,
where customers complete a credit assessment and sign the contract. The
entire process is done online.
Through this offering ALD demonstrates its digital capabilities and its
permanent focus on delivering best-in-class leasing service to customers.
Acquisition of BBVA Automercantil's renting portfolio in Portugal and
distribution agreement
On 23 July 2019, ALD acquired BBVA Automercantil's vehicle renting portfolio
in Portugal. The transaction also includes the entry into an agency
agreement whereby BBVA will make available to its corporate and private
customers in Portugal a full service leasing solution managed by ALD.
This acquisition forms part of ALD's development strategy and is an example
of ALD's focus on targeted and value accretive bolt-on acquisitions.
This transaction is expected to strengthen ALD's full service leasing
presence in Portugal while expanding the commercial reach of its solutions
offering in an important and growing market.
Completion of Stern Lease acquisition and partnership agreement in the
Netherlands
On 3 June 2019, ALD finalized its acquisition of SternLease B.V. (13,000
vehicles), the leasing arm of Stern Group, the Dutch listed market leader in
automotive retail, following the signing of an acquisition agreement on 1
March 2019.
On top of the acquisition, a dedicated distribution agreement has been
signed to provide access to this local dealership network for the exclusive
distribution of ALD leasing services for SMEs and private individuals.
This transaction strengthens ALD's SME and Private Lease offering in the
Netherlands, positioning the company as the 5th largest player in the
market, while expanding the commercial reach of its solutions.
New distribution partnership with Eroski in Spain
In June 2019, ALD entered into a distribution agreement with Eroski, the
retail supermarket chain based in Northern Spain. This agreement targets the
distribution of full service leasing contracts to Eroski's customers,
employees and providers, through our digital platform and via dedicated pop
up stores.
2019 GUIDANCE
For 2019, the Group expects 5-7% organic growth in Total Fleet. Bolt-on
acquisitions might add to this growth, as opportunities arise.
Car Sales Result per unit is expected to average between EUR 100 and EUR
300.
In addition, the Group aims to improve its Cost/Income (excluding Car Sales
Result) ratio further and expects it to reach c. 49% in 2019 (vs. 50% in
2018).
Given the strong capital generation from its activities, the Group targets a
pay-out ratio of 40-50% for 2019, a level which allows it to maintain a high
rate of growth without significantly impacting its total equity to total
assets ratio.
To summarise ALD's guidance for 2019:
· Total Fleet is expected to grow organically 5-7% compared to 2018, plus
bolt-on acquisitions
· Car Sales Result to average between EUR 100 and EUR 300 per vehicle
· Cost/Income (excluding Car Sales Result) to improve to c. 49%
· Total Equity / Total Assets ratio between 15% and 17%
· Target pay-out ratio between 40% and 50%.
CONFERENCE CALL FOR INVESTORS AND ANALYSTS
Date: 1 August 2019, at 10:00 am Paris time - 9:00 am London time
Speakers: Mike Masterson, CEO, and Gilles Momper, CFO
Connection details:
· Webcast [2]
· Conf call: +33 (0) 1 7037 7166 - Password: ALD
NEXT PUBLICATION
6 November 2019 Q3 2019 trading update
6 February 2020 Q4 and FY 2019 Results
Press contact:
Stephanie Jonville
+33 (0)1 42 14 38 99
stephanie.jonville@aldautomotive.com
ALD
ALD is a global leader in mobility solutions providing full service leasing
and fleet management services across 43 countries to a client base of large
corporates, SMEs, professionals and private individuals. A leader in its
industry, ALD places sustainable mobility at the heart of its strategy,
delivering innovative mobility solutions and technology-enabled services to
its clients, helping them focus on their everyday business.
With over 6,500 employees worldwide, ALD manages 1.70 million vehicles (at
end June 2019).
ALD is listed on Euronext Paris, compartment A (ISIN: FR0013258662; Ticker:
ALD) and its share is included in the SBF120 index. ALD's controlling
shareholder is Societe Generale.
For more information, you can follow us on Twitter @ALDAutomotive [3] or
visit www.aldautomotive.com [4].
This document contains forward-looking statements relating to the targets
and strategies of ALD SA (the "Company") and its subsidiaries (together with
the Company, the "Group"). These forward-looking statements are based on a
series of assumptions, both general and specific, in particular the
application of accounting principles and methods in accordance with IFRS
(International Financial Reporting Standards) as adopted in the European
Union. These forward-looking statements have also been developed from
scenarios based on a number of economic assumptions in the context of a
given competitive and regulatory environment. The Group may be unable to: -
anticipate all the risks, uncertainties or other factors likely to affect
its business and to appraise their potential consequences; - evaluate the
extent to which the occurrence of a risk or a combination of risks could
cause actual results to differ materially from those provided in this
document and the related presentation. Therefore, although the Company
believes that these statements are based on reasonable assumptions, these
forward-looking statements are subject to numerous risks and uncertainties,
including matters not yet known to it or its management or not currently
considered material, and there can be no assurance that anticipated events
will occur or that the objectives set out will actually be achieved.
Important factors that could cause actual results to differ materially from
the results anticipated in the forward-looking statements include, among
others, overall trends in general economic activity and in the Group's
markets in particular, regulatory changes, and the success of the Company's
strategic, operating and financial initiatives. More detailed information on
the potential risks that could affect the Company's financial results can be
found in the Registration Document and in the Last Financial Report filed
with the French Autorité des Marchés Financiers. Investors are advised to
take into account factors of uncertainty and risk likely to impact the
operations of the Group when considering the information contained in such
forward-looking statements. Other than as required by applicable law, the
Company does not undertake any obligation to update or revise any
forward-looking information or statements. Unless otherwise specified, the
sources for the business rankings and market positions are internal. The
financial information presented for the quarter and half year ending 30th
June 2019 was reviewed by the Company's Board of Directors on 31st July 2019
and has been prepared in accordance with IFRS as adopted in the European
Union and applicable at this date. The limited review procedures on the
condensed interim financial statements at 30th June 2019 carried out by the
Statutory Auditors have been completed and the Statutory Auditors' Review
Report on the half-yearly financial information for 2019 has been delivered
on 31st July 2019.
Appendix
Consolidated
income
statement
in EUR million Q2 20191 Q2 20181 Change H1 H1 20181 Change
in % 20191 in %
Q2 H1 '19/
'19/Q2 '18
'18
Leasing 2,205 2,055.7 +7.3%
Contract .9
Revenues
Leasing (1,74 (1,645.8) +6.0%
Contract Costs 4.1)
- Depreciation
Leasing (136. (107.1) +27.4%
Contract Costs 4)
- Financing
Unrealised 4.9 7.3 (32.3%)
Gains/Losses on
Financial
Instruments
Leasing 165.1 163.0 +1.3% 330.3 309.9 +6.6%
Contract Margin
Services 1,051 969.1 +8.5%
Revenues .1
Cost of (743. (668.0) +11.3%
Services 5)
Revenues
Services Margin 159.5 148.9 +7.1% 307.6 301.1 +2.2%
Leasing 324.6 311.9 +4.1% 638.0 611.0 +4.4%
Contract and
Services
Margins
Proceeds of 1,491 1,396.5 +6.8%
Cars Sold .3
Cost of Cars (1,44 (1,336.7) +8.3%
Sold 7.9)
Car Sales 24.4 30.2 (19.2%) 43.4 59.8 (27.4%)
Result
GROSS OPERATING 349.0 342.1 +2.0% 681.4 670.8 +1.6%
INCOME
Staff Expenses (202. (197.0) +2.7%
4)
General and (88.2 (97.5) (9.6%)
Administrative )
Expenses
Depreciation (26.2 (13.7) +91.6%
and )
Amortisation
Total Operating (159.3) (156.1) +2.0% (316. (308.2) +2.8%
Expenses 8)
Cost/Income 49.1% 50.0% 49.7% 50.4%
ratio (excl
CSR)
Impairment (11.4) (7.0) +62.0% (21.8 (13.4) +62.3%
Charges on )
Receivables
Non-Recurring (0.0) 0.0 ns (0.0) 0.0 ns
Income
(Expenses)
OPERATING 178.3 179.0 (0.4%) 342.8 349.2 (1.8%)
RESULT
Share of Profit 0.5 0.4 +22.3% 0.9 0.7 +28.7%
of Associates
and Jointly
Controlled
Entities
Profit Before 178.8 179.4 (0.3%) 343.7 349.8 (1.8%)
Tax
Income Tax (30.7) (34.7) (11.5%) (59.7 (66.6) (10.4%)
Expense )
Profit for the 148.1 144.7 +2.4% 283.9 283.2 +0.3%
Period
Net Income 146.9 143.3 +2.5% 280.7 280.0 +0.2%
(Group share)
Non-Controlling 1.2 1.4 (9.8%) 3.3 3.2 +2.7%
Interests
Return on 15.3% 16.6%
Equity2
Total fleet and
selected
balance sheet
figures
in EUR million, 30.06.20191 31.12.2018 Change 30.06.20181 Change
except stated in % in %
otherwise H1 H1 '19/
'19/FY H1'18
'18
Total Fleet (in 1,700 1,663 +2.2% 1,587 +7.2%
'000 of
vehicles)
Total Assets 24,537 23,254 +5.5% 22,369 +9.7%
Earning Assets 19,930 19,101 +4.3% 18,026 +10.6%
Total Equity 3,727 3,668 +1.6% 3,420 +9.0%
Financial Debt3 17,762 16,831 +5.5% 16,118 +10.2%
Total Equity on 15.2% 15.8% 15.3%
Total Assets
1 ALD's Q2 & H1 19 results have been subject to a limited review by ALD's
Statutory Auditors.
2 Annualized ratio: in the numerator half-year figure multiplied by 2
divided by the arithmetic average of Earning Assets or Equity attributable
to owners of the parent at the beginning and end of the period
3 Financial Debt: defined as Borrowings from Financial institutions, Bonds
and Notes issued
=---------------------------------------------------------------------------
[1] Not including Stern Lease fleet (13,000 vehicles), see Note 4 to
Financial Statements for details
[2] Management information
[3] 4-quarter rolling average
[4] Annualised ratio: Return on average equity calculated using Net income
(Group Share) in the numerator (half-year figure multiplied by 2) and
average of the Shareholder's equity at beginning and end of period in the
denominator
[5] Annualised ratio
[6] Management information
[7] Calculated as a 4-quarter rolling average
[8] Cost of risk: Annualised ratio, using the Impairment Charges on
Receivables divided by the arithmetic average of Earning Assets at the
beginning and end of the period
[9] Annualised ratio: Return on average equity calculated using Net income
(Group Share) in the numerator (half-year figure multiplied by 2) and
average of the Shareholder's equity at beginning and end of period in the
denominator
Regulatory filing PDF file
Document title: ALD reports First Half 2019 Results
Document: http://n.eqs.com/c/fncls.ssp?u=MVAPTISPDU [5]
Language: English
Company: ALD
1 Rue Eugène et Armand Peugeot
92500 Rueil-Malmaison
France
Internet: https://www.aldautomotive.com/
ISIN: FR0013258662
Euronext Ticker: ALD
AMF Category: Inside information / News release on accounts, results
EQS News ID: 849865
End of Announcement EQS News Service
849865 01-Aug-2019 CET/CEST
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(END) Dow Jones Newswires
August 01, 2019 01:30 ET (05:30 GMT)
