ALD
ALD reports full year 2019 results
06-Feb-2020 / 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
Paris, 6 February 2020
ANNUAL FINANCIAL INFORMATION
ALD reports full year 2019 results*
· CONSISTENTLY DELIVERING ON OPERATING AND FINANCIAL GUIDANCE
· FUNDED FLEET SHOWING STRONG DYNAMICS AT +7.0%
· RECORD LOW COST/INCOME RATIO (EXCL. CAR SALES RESULT) OF 49.0%
· RESILIENT CAR SALES RESULT PER UNIT AT EUR 254
· NET INCOME (GROUP SHARE) UP BY 1.5% AT EUR 564.2 MILLION
· EPS[1] AT EUR 1.40
· PROPOSED 2019 DIVIDEND OF EUR 0.63 PER SHARE UP FROM EUR 0.58 IN 2018
2019 Results highlights
· Total Fleet 1.76 million vehicles managed worldwide at end Dec 19,
including more than 150K electric and hybrid vehicles
· Gross Operating Income at EUR 1,371.4 million, up 2.1% vs. 2018
· Leasing Contract and Services Margins up 4.5% in a context of
progressive repricing of diesel residual values
· Car Sales Result per unit comfortably in upper part of EUR 100-300
guidance; Car Sales Result at EUR 75.0 million
· Operating Expenses growth contained at 2.8%, leading to further
improvement in Cost/Income Ratio (excl. Car Sales Result) at 49.0%, in
line with the c. 49% guidance and down from 49.8% in 2018
· Net Income (Group share) at EUR 564.2 million in 2019, up 1.5% vs. 2018
· Earnings per share[2]at EUR 1.40, vs. EUR 1.37 in 2018
· Proposed dividend of EUR 0.63 per share, corresponding to a payout ratio
of 45%
· ROE[3] at 14.8%
· Total Equity/Asset ratio at 15.7%, within 15-17% guidance range
Guidance for 2020
· Total Fleet growth (organic) of 5 to 7% versus 2019, plus bolt-on
acquisitions as opportunities arise
· Car Sales Result per unit to average between EUR 100 and EUR 300
· Cost/Income (excluding Car Sales Result) ratio to improve by at least
0.5 percentage point
· Payout ratio between 40 and 50%
On 6 February 2020, Mike Masterson, ALD CEO, commenting on the FY 2019 Group
Results, stated:
"2019 was another year of strong commercial performance for ALD,
demonstrating the enduring strength of our business model and franchise. In
line with our objective to promote sustainable growth, we are leading the
market in the energy transition. The rebalancing of the powertrain mix of
our fleet has accelerated again in 2019. The quality of our services
continues to be recognised by our clients and our partners and is backed by
the substantial resources we allocate to technology. This investment ensures
we maintain our competitiveness and efficiency and enables us to develop new
digital tools and mobility services for our clients. Our operating and
financial achievements in 2019 demonstrate ALD's enduring focus on
consistent delivery of the guidance provided to the market and highlights
again the value of our best-in-class operating efficiency. I am confident
that 2020 will repeat this pattern and that we will continue to lead the
market. ALD will be providing an update on its business strategy during an
Investor Day to be organised later this year."
Strong, sustainable fleet growth across regions
Funded fleet showed strong dynamics in 2019, growing +7.0% year on year.
Total Fleet reached 1.76 million vehicles at the end of December 2019, up
6.1% vs. the end of the previous year, including the contribution from the
acquisition of Stern Lease in the Netherlands. Total Fleet (organic) growth
reached 5.2%, inside the 5-7% guidance range provided at the start of the
year.
All geographical regions contributed to this performance. Total Fleet rose
robustly in Europe, by 6.0% in Western Europe, 9.6% in Northern Europe, 5.7%
in Central & Eastern Europe, and by 4.4% in South America, Africa & Asia.
All client segments showed strong fleet growth in 2019. As illustrated by
the recent distribution agreements signed with Amazon, Polestar, Tesla,
Eroski, ALD's unique partnership model, now counting more than 160
agreements, continues to be a key differentiator with the competition. The
Group's sales via partnerships increased by 12.1%[4], strongly contributing
to overall fleet growth. Direct sales (mostly to corporates) grew 3.0%4 year
on year.
In the course of 2019, ALD's private lease fleet passed the 150K target set
for the year. Reaching 153K vehicles at end of 2019, this client segment was
up 36% vs. the end of 2018 and counted for 8.6% of Total Fleet. More than
half of this growth was sourced through our partnerships. Continued
development of this segment is expected to remain a key driver of Total
Fleet growth, supported by our state-of-the-art online platform.
ALD continues to lead the powertrain transition by encouraging clients to
switch out of diesel vehicles when it is relevant. This policy, implemented
from 2017 onwards, has been showing strong results: the share of diesel in
the deliveries of passenger cars has been on a steady downward path for the
last three years, reaching 43% in Q4 19, well below the level of 72% seen in
Q4 16.
With the EU-mandated CO2 emission targets for OEMs coming into force 2020 is
expected to be a landmark year for electric and hybrid vehicles. The
penetration of "green[5]" powertrains continues to rise: they represented
13% of ALD's passenger car deliveries globally in 2019 (vs. 11% in 2018) and
close to 15% in Europe[6]. This share is expected to rise to more than 20%
in Europe in 2020. Within Total Fleet they represented more than 150K
vehicles at the end of 2019, rising by almost 50% over the year, for the
second year in a row.
ALD is well prepared to accompany this shift in demand thanks to its work
with reference players in the EV ecosystem, from car manufacturers such as
Tesla and Polestar to providers of charging infrastructure and support such
as Chargepoint, E.On and Enel. These partnerships complement the
EV-dedicated products developed by ALD for a comprehensive ALD Electric
offer, such as Switch and Carsharing.
ALD's global CSR strategy comprises four pillars:
· ALD promotes sustainable mobility by encouraging the transition towards
low emission vehicles, new types of usage (car sharing, ride sharing,
flexible lease) and safer driving.
· ALD behaves as a responsible employer: well-being at work and diversity
are seen as key to people development and sustainable corporate
performance.
· Responsible business culture and practices are embedded in ALD's
operations. ALD selects its partners and suppliers with attention,
applying the highest ethical standards, and closely monitors customer
satisfaction.
· ALD acts for carbon neutrality in its operations, aiming to reduce
greenhouse gas emissions per occupant by 25% in 2020 compared to the 2014
baseline.
Rewarding this strategy, Ecovadis has given ALD a "Gold" rating, putting it
in the top 4% of assessed companies and recognising respect for the
environment, work practices, ethics and the supply chain. Similarly, MSCI
ESG ratings puts ALD in its top 3rd.
Solid operating and financial results, in line with guidance
ALD's Gross Operating Income rose to EUR 1,371.4 million7 in 2019, up 2.1%
vs. 2018. Q4 19 Gross Operating Income reached EUR 342.6 million, up 1.4%
vs. Q4 18.
Leasing Contract Margin rose to EUR 664.1 million and Services Margin to EUR
632.3 million in 2019[7], up 6.5% and 2.5% respectively vs. 2018. In Q4 19
Leasing Contract Margin stood at EUR 166.2 million, up 5.3% and Services
Margin at EUR 166.0 million, up 1.8%.
The contribution to Gross Operating Income from Car Sales Result reached EUR
75.0 million7 in 2019, down from EUR 102.5 million in the previous year, but
in line with expectations. In Q4 19 Car Sales Result was EUR 10.5 million,
vs. EUR 17.1 million in Q4 18.
Average sales margin for the year on used vehicles[8] came in at EUR 254 per
unit, down from EUR 362 in 2018, but comfortably in the upper part of the
EUR 100 to 300 guidance provided at the start of the year. The Q4 19 average
was EUR 135, down from EUR 285 recorded in the previous quarter, principally
due to seasonal factors affecting Q4.
The number of used cars sold8 in Q4 19 was 77K bringing the total for 2019
to 296K, up 4.5% vs. 283K in 2018. The proportion of cars sold via
electronic platforms8 remained well above 60% of total cars sold in 2019.
Second lease, where a car coming off-lease is re-leased to a new customer,
saw a strong development and this trend is expected to continue in 2020.
Total Operating Expenses increased by just EUR 17.4million to EUR 635.0
million7, while Leasing contract and Services margins were up EUR 55.9
million, illustrating the strong incremental operating leverage of ALD's
business model. Spending linked to IT projects continues to represent more
than 20% of total Operating expenses which is reflected in the EUR 8 million
increase in Depreciation and amortisation recorded in 2019 when excluding
the impact of IFRS 16[9]. The EUR 2 million decrease in General and
Administrative expenses illustrates the cost discipline embedded throughout
the organisation.
The continued control of Operating Expenses led to an improvement in the
Cost/Income (excluding Car Sales Result) ratio to 49.0% in 2019, from 49.8%
in 2018 and 51.2% in 2017, reaching the c. 49% objective set at the start of
the year.
Impairment charges on receivables reached EUR 45.0 million7, rising by EUR
7.2 million vs. 2018 from the EUR 37.8 million recorded in 2018. The cost of
risk[10] nevertheless remained contained at 22 bps in 2019, vs. 21 bps in
2018.
Income tax expense was EUR 122.2 million in 2019, down slightly from EUR
126.8 million. The effective tax rate of 17.6% for 2019 continued to benefit
from the favourable impact of the Italian Stability Law, which stood at EUR
49.6 million for the year, close to the 2018 amount.
ALD recorded Net Income (Group Share) of EUR 564.2 in 20197, up 1.5% from
EUR 555.6 million in 2018, supported by the Group's strong fleet growth and
improved operating efficiency. Q4 19 Net Income (Group Share) was EUR 137.4
million, down 2.0% vs. Q4 18.
Earning Assets rose 10.9% at the end of 2019 vs. the end of the previous
year, reaching EUR 21.1 billion, underpinned by funded fleet growth, and an
evolving vehicle mix towards higher value models (SUV, EV) and countries
with higher prices.
Equity reinvestments in long-term deposits decreased by EUR 132, as
amortising deposits with Societe Generale continue to run off. Other assets
increased to EUR 3,164 million from EUR 2,818 million at end 2018, mainly
reflecting the impact of IFRS16.
Total funding at the end of 2019 stood at EUR 18.4 billion (up from EUR 16.8
billion at the end of 2018) of which 68% consisted of loans from Societe
Generale. Over the course of 2019, ALD raised EUR 500m of new funding on
public markets via its EMTN bond programme and EUR 250m from the EIB within
the framework of the Cleaner Transport Facility (CTF) programme. The Group's
strong long-term ratings from Fitch Ratings (A-) and S&P Global Ratings
(BBB+) remained unchanged over the period, with stable outlooks.
The Group's Total Equity to Total Assets ratio stood at 15.7% at the end of
2019, down slightly from 15.8% vs. end 2018.
The Return on Average Earning Assets[11] in 2019 was 2.8% (vs. 3.1% in
2018), while ALD's ROE9 came in at 14.8% (vs. 15.9% in the previous year).
Earnings Per Share[12] for 2019 amounts to EUR 1.40, vs. EUR 1.37 in 2018.
The Board of Directors has decided to propose to the General Meeting of
Shareholders to distribute a dividend of EUR 0.63 per share (vs. EUR 0.58 in
2018) in respect of the 2019 financial year, corresponding to a payout ratio
of 45.0% (up from 42.0% last year). Conditional on this approval, the
dividend will be detached on 29 May 2020 and paid on 3 June 2020.
Key strategic initiatives & operational developments
ALD selected by Tesla as preferred operational leasing provider in Europe
In 2020, ALD became Tesla's preferred operational leasing provider in
Europe. ALD will offer drivers' leases across all Tesla models available in
Europe and work with SMEs and private individuals with a full service
leasing offer across 17 countries.
This development further strengthens ALD's ability to provide its clients
with access to a broad range of electric vehicles under a full service
lease. It also demonstrates both the relevance and the value of ALD's
digital capabilities achieved through a permanent focus on delivering
best-in-class leasing services to customers.
Launch of a digital leasing offering with Polestar
Early February 2020, ALD together with its partner Polestar, the new Swedish
electric performance vehicle brand, launched a fully digital online solution
to support the Polestar 2, the company's latest model. This platform targets
both corporate and private customers and provides a seamless customer
journey between Polestar and ALD ecosystems, from configuration of the
vehicle to credit assessment and e-signing of the contract.
This partnership broadens ALD's electric vehicle range and contributes to
the development of innovative mobility offerings for customers in Europe.
ALD Demain
In February 2020, ALD France announced the launch of the ALD Demain
programme, aimed at combining ALD France and Parcours to consolidate ALD's
leading position on the French market. A new and unified offer will be made
available throughout the French network, improving customer experience and
bringing significant efficiency gains in the medium term.
Sale of ALD Fortune Auto Leasing & Renting in China
In January 2020, ALD completed the PRC governmental registration formalities
in connection with the sale of its 50% equity stake in ALD Fortune Auto
Leasing & Renting (Shanghai) Co. Ltd. in China, alongside the 50% equity
stake held by its joint venture partner, Hwabao Fortune Investment Company.
This took place after the issuance of a new business license in the name of
the buyer, Nanjing Lingxing Automotive Service Co. Ltd. on 19th January
2020.
ALD awaits the receipt of the proceeds of the sale from the Shanghai United
Assets & Equity Exchange platform to close the transaction and this is
expected to occur mid-February following the recent extension of the Chinese
New Year holidays in Shanghai till 9th February 2020.
Conference call for investors and analysts
Date: 6 February 2020, at 10.00 am Paris time - 9.00 am London time
Speakers: Mike Masterson, CEO, Tim Albertsen, Deputy CEO and Gilles Momper,
CFO
Connection details:
* Webcast [1]
* Conf call: +331 70 37 71 66 Password: ALD
2020 Agenda
6 May 2020 Trading update and Q1 results
20 May 2020 General assembly of shareholders
3 August 2020 Q2 and H1 2019 results
5 November 2020 Trading update and Q3 results
Press contact
Stephanie Jonville
ALD Communication Department
Tel.: +33 (0)6 46 14 81 90
stephanie.jonville@aldautomotive.com
About
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 6 500 employees around the globe, ALD manages 1.76 million vehicles (at
end-December 2019).
ALD is listed on Compartment A of Euronext Paris (ISIN: FR0013258662;
Ticker: ALD) and is included in the SBF120 index. Société Générale is ALD's
majority shareholder.
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 year ending 31 December 2019 was
reviewed by the Company's Board of Directors on 5 February 2020 and has been
prepared in accordance with IFRS as adopted in the European Union and
applicable at this date.
Appendix
Consolidated
income statement
in EUR million Q4 2019 Q4 2018 Var. % FY FY Var. %
Q4 '19/ 2019 2018 FY '19/
'18 '18
Leasing Contract 4,501 4,170. +7.9%
Revenues .7 6
Leasing Contract (3,55 (3,332 +6.8%
Costs - 9.5) .0)
Depreciation
Leasing Contract (294. (234.1 +26.0%
Costs - 8) )
Financing
Unrealised 16.7 19.4 (14.0%)
Gains/Losses on
Financial
Instruments
Leasing Contract 166.2 157.8 +5.3% 664.1 623.8 +6.5%
Margin
Services 2,178 1,987. +9.6%
Revenues .4 2
Cost of Services (1,54 (1,370 +12.8%
Revenues 6.1) .6)
Services Margin 166.0 163.0 +1.8% 632.3 616.7 +2.5%
Leasing Contract 332.1 320.8 +3.5% 1,296 1,240. +4.5%
and Services .4 5
Margins
Proceeds of Cars 3,097 2,814. +10.1%
Sold .4 3
Cost of Cars (3,02 (2,711 +11.5%
Sold 2.4) .9)
Car Sales Result 10.5 17.1 (38.6%) 75.0 102.5 (26.8%)
GROSS OPERATING 342.6 337.8 +1.4% 1,371 1,343. +2.1%
INCOME .4 0
Staff Expenses (409. (397.2 +3.0%
3) )
General and (166. (189.2 (11.8%)
Administrative 9) )
Expenses
Depreciation and (58.8 (31.2) +88.7%
Amortisation )
Total Operating (159.4) (155.9) +2.2% (635. (617.6 +2.8%
Expenses 0) )
Cost/Income 48.0% 48.6% 49.0% 49.8%
ratio (excl CSR)
Impairment (12.5) (11.1) +12.6% (45.0 (37.8) +19.0%
Charges on )
Receivables
OPERATING RESULT 170.7 170.8 (0.1%) 691.4 687.6 +0.6%
Share of Profit 0.5 0.4 +8.8% 1.8 1.5 +20.9%
of Associates
and Jointly
Controlled
Entities
Profit Before 171.2 171.2 (0.0%) 693.2 689.1 +0.6%
Tax
Income Tax (31.3) (29.2) +7.5% (122. (126.8 (3.7%)
Expense 2) )
Profit for the 139.8 142.1 (1.6%) 571.0 562.2 +1.6%
Period
Net Income 137.4 140.2 (2.0%) 564.2 555.6 +1.5%
(Group share)
Non-Controlling 2.4 1.9 +29.0% 6.8 6.6 +3.5%
Interests
Return on 2.8% 3.1%
Average Earning
Assets2
Return on 14.8% 15.9%
Equity2
Total Fleet and selected balance sheet figures
In EUR million Dec-19 Dec-18 Var % FY'19/
'18
Total Fleet ('000 vehicles) 1,765 1,663 6.1%
Earning assets 21,183 19,101 10.9%
o/w Rental fleet 20,337 18,424 10.4%
o/w Financial lease receivables 846 678 24.9%
Long term invt. - Equity 469 602 -22.0%
Reinvestment
Cash & Cash deposits 156 159 -2.1%
Intangibles (incl. goodwill) 616 575 7.2%
Other 3,164 2,818 12.3%
Total Assets 25,588 23,254 10.0%
Shareholders' equity 3,993 3,634 9.9%
Minority interest 36 34 4.8%
Financial debt 18,395 16,831 9.3%
Other liabilities 3,164 2,755 14.8%
Total liabilities and equity 25,588 23,254 10.0%
Total Equity on Total Assets 15.7% 15.8%
1 ALD's Q4 19, and FY 19 results are currently under review by ALD's
Statutory Auditors.
2 Annualised ratio: in the numerator quarterly figure multiplied by 4 or
half-year figure multiplied by 2 or annual figure. In the denominator 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
=---------------------------------------------------------------------------
*The Group's unaudited consolidated results as at 31 December 2019 were
examined by the Board of Directors, chaired by Philippe Heim, on 5 February
2020. The audit procedures carried out by the Statutory Auditors on the
consolidated financial statements are in progress.
[1] Diluted Earnings per share, calculated according to IAS33. Basic EPS for
2019 at EUR 1.40
[2] Diluted Earnings per share, calculated according to IAS33. Basic EPS for
2019 at EUR 1.40
[3] ROE: Return on Equity | See definition note 2, page 11
[4] In numbers of vehicles
[5] "Green" vehicles: Electric vehicles, Plug-in hybrids, Hybrids
[6] European Economic Area, UK and Switzerland
[7] Including Stern Lease from June 2019
[8] Management information
[9] EUR 20 million rent expense previously classified as General and
administrative expenses now reported within Depreciation and amortisation
[10] 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.
[11] See definition note 2, page 11
[12] Diluted Earnings per share, calculated according to IAS33. Basic EPS
for 2019 at EUR 1.40
Regulatory filing PDF file
Document title: ALD reports full year 2019 results
Document: http://n.eqs.com/c/fncls.ssp?u=GLYNWGASFQ [2]
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: 969191
End of Announcement EQS News Service
969191 06-Feb-2020 CET/CEST
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February 06, 2020 01:30 ET (06:30 GMT)
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