ALD
ALD: Q1 2020 Trading Update
06-May-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 May 2020
Trading update on Q1 2020 results
· ORGANIC TOTAL FLEET GROWTH + 4.9%[1] VS. END MARCH 2019
· RESILIENT NET INCOME (GROUP SHARE) AT EUR 128.9 MILLION
· SOLID AND ADAPTABLE FUNDING STRUCTURE
· ROBUST BUSINESS MODEL WITH MULTI-YEAR CONTRACTS
· 2019 EUR 0.63 DIVIDEND PER SHARE PROPOSAL MAINTAINED
First quarter 2020 results highlights
· Total Fleet 1.78 million vehicles managed worldwide at end March 2020,
+5.6% vs. March 2019
· Leasing Contract and Services Margins at EUR 326.3 million, up 3.1% vs.
Q1 2019
· Used Car Sales result at EUR 3.2 million, including EUR 9 million
impairment of used car stock, reflecting COVID-19 risks, implying a Used
Car Sales result[2] per unit at EUR 43
· Operating Expenses at EUR 4.6 million, up 2.9% vs. Q1 2019
· Cost of risk up EUR 7.4 million vs Q1 2019, including a EUR 4.4 million
IFRS9 provision for COVID-19 crisis related credit risk
· EUR 10 million after tax profit on disposal of stake in ALD Fortune
(China)
· Net Income (Group share) at EUR 128.9 million in Q1 2020, down 3.7% vs.
Q1 2019
On 6 May 2020, Tim Albertsen, ALD CEO, commenting on the Q1 2020 Group
Results, stated:
"ALD started the year with a good commercial performance reflecting the
strength of our business model and franchise. When from mid-March onwards
the COVID-19 lockdowns gradually caused economic activity to slow down in
many European countries, our efficient remote working arrangements and
state-of-the-art digital tools allowed our staff to continue to engage with
our clients and help address their immediate needs. Despite the challenges,
our operating and financial performance in Q1 was reassuring and reflects
the robustness and geographical diversification of our business model. At
the same time ALD has taken an active role in supporting those on the
frontline of the crisis by lending our assets and making donations, in a
great number of countries. As our main markets progressively emerge from
confinement we are positioning ourselves to seize new opportunities, for
instance by responding to the demand for flexible products and promoting our
used car lease offer, while paying careful attention to our costs. ALD
remains committed to a partnership driven strategy of delivering sustainable
growth backed by service excellence and I am convinced that we will come out
of this crisis even stronger and continue to lead the market."
Navigating the COVID-19 crisis
The COVID-19 outbreak, with lockdowns observed all over the world, is
expected to cause a fall in Euro area GDP by 7.5%[3] in 2020 and has brought
numerous uncertainties, such as: timing of countries reopening, level and
duration of government and central bank economic support measures,
corporates' focus on improving their cash management, risk of increased
customer default, uncertainty around used car market dynamics, funding
pressures, and slowdown in car registrations.
ALD has reacted quickly and taken effective measures:
· Remote working has been deployed successfully in all countries under
lockdown within a week, avoiding need for partial unemployment measures,
and showing strong engagement from staff throughout the organisation
· Targeted negotiation of contract duration extensions aimed at lowering
the number of vehicles to be sold once lockdowns are over, decreasing
residual value risk, and reducing clients' monthly installments
· Close monitoring of cost of risk by accompanying clients in the
management of their cash position and proactively addressing situations of
clients in vulnerable sectors
· Cost reduction measures, decreasing discretional overheads and
accelerating process digitisation.
In the context of the COVID-19 pandemic, ALD launched a Solidarity Plan
focusing on three pillars, completing the commitment to protect the Group's
staff health as a priority:
· lending its assets to the frontline. ALD Spain put 500 cars at the
disposal of healthcare professionals and a similar approach is in progress
with the ALD pool fleet in 15 other countries
· joining the fight (NGOs, medical care and vulnerable populations).
Notably through donation of EUR 100,000 to the One O One Fund in support
of intensive care research, provision of 40,000 masks to healthcare
professionals, and a partnership with Gate Gourmet and Caritas to
distribute 70,000+ meals in Spain
· accompanying vulnerable suppliers and customers by paying suppliers on
time or ahead of time, being ready to grant payment delays and/or
preferred terms on contract extensions to vulnerable clients (mainly SMEs)
and ensuring deliveries and customer support to essential activities.
ALD's solid and adaptable funding structure ensures its continued ability to
grow fleet. Its systematic match-funding policy means assets and liabilities
are matched in terms of duration, currency and interest rate and the
liquidity gap is strictly managed. ALD has access to secure funding sources:
support from Societe Generale is guaranteed and access to capital markets is
backed by ALD's strong ratings. ALD's funding needs in 2020 are likely to be
limited due to contract duration extensions and slower fleet growth than
anticipated. ALD will adapt its financing mix depending on market
conditions.
Resilient operating and financial results
Total Fleet reached 1.78 million vehicles at the end of March 2020, up 5.6%
vs. end of March 2019. Organic growth (neutralising the impact of the
acquisition of Stern Lease in the Netherlands and the disposal of ALD
Fortune Auto Leasing & Renting in China) over the same period stood at 4.9%.
Leasing Contract Margin reached EUR 165.1 million and Services Margin EUR
158.0 million in Q1 2020, down 0.1% and up 6.7% respectively vs. Q1 2019.
Taken together they increased by 3.1% vs. Q1 2019. Significant unrealised
valuation changes in ALD's reinsurance subsidiary's investment portfolio
were recorded in the Leasing Contract Margin, holding back its growth this
quarter.
The contribution to Gross Operating Income from Used Car Sales result
reached EUR 3.2 million in Q1 2020, down from EUR 19.0 million in Q1 2019.
An exceptional COVID-19 related EUR 9 million impairment of used car stock
was recorded in March results, reflecting delays in sales and potential
reduction in the prices of second hand cars.
The number of used cars sold[4] in Q1 2020 was 74K, stable vs. Q1 2019. As a
consequence of lock downs in several markets, stock levels at end March
increased moderately vs. end December 2019. ALD is actively promoting
contract duration extensions to targeted customers with the aim of lowering
the number of vehicles to be sold once lockdowns are over. It further
expects its digital remarketing platforms to be a key asset in the efficient
management of used car sales, as activity progressively picks up again.
Operating Expenses increased by EUR 4.6 million in Q1 2020, reaching EUR
162.1 million.
Impairment charges on receivables reached EUR 17.8 million, rising by EUR
7.4 million from the EUR 10.4 million recorded in Q1 2019. A EUR 4.4m IFRS9
provision reflecting the expected increase in probability of customer
default linked to COVID-19 crisis was recorded in March results.
Further to the closing of the transaction on 28 February 2020, a EUR 10
million post-tax profit on disposal of ALD's stake in ALD Fortune Auto
Leasing & Renting (China) was recorded in Q1 2020.
As a result, ALD Net Income (Group Share) reached a resilient EUR 128.9
million in 2019, down 3.7% from EUR 133.8 million in Q1 2019.
Key strategic initiatives & operational developments
ALD and Mitsubishi UFJ Lease & Finance Company to launch joint venture
operations in Malaysia
On 23 March 2020, ALD and Mitsubishi UFJ Lease & Finance Company Limited
('MUL') have signed an agreement to create a joint venture that will
establish multi-brand, full service operational leasing and fleet management
business with related mobility products for corporate clients in Malaysia.
This greenfield operation, with a trusted and recognised partner, is part of
a joint South East Asian strategy.
Digital offering with Polestar now live
As previously announced in November 2019, ALD has established an innovative
digital partnership with Polestar. The fully digital online solution is now
live and taking orders in 3 countries.
Expansion of strategic relationship with Tesla
As was announced last quarter, ALD was selected as Tesla's preferred
operational leasing provider in Europe. ALD now offers Tesla vehicles to
corporate and private individuals in 14 countries.
ALD ranked by Vigeo Eiris among the top 3 most sustainable companies within
the sector
Vigeo Eiris is a world-reputed, independent international provider of
environmental, social and governance (ESG) research and services for
investors and public & private organisations.
In its 2020 assessment, ALD scored 67 out of 100, achieving 'Advanced'
Level. The Group ranked third among the 102 companies in the Business
Support Services sector panel with a first-class performance on fundamental
labor rights, social dialogue, career management and corruption.
ALD and Wheels partnership agreement with Mitsubishi Auto Leasing
Corporation to extend global coverage to Japan
ALD and Wheels, who formed a Global Alliance 10 years ago, have signed a
committed partnership agreement with Mitsubishi Auto Leasing Corporation
('MAL') as part of their Asia coverage expansion, effective from April 1,
2020. ALD-Wheels and MAL will cooperate in providing automotive leasing and
fleet management services to global corporations in Japan.
ALD closes sale of equity stake in ALD Fortune Auto Leasing & Renting in
China
On 28 February 2020, ALD announced the closing of the sale of its 50% equity
stake in ALD Fortune Auto Leasing & Renting (Shanghai) Co. Ltd. in China.
ALD recorded a post-tax gain of EUR 10 million in the Group's Q1 2020
financial results.
Looking further ahead
ALD has built a long track record of solid operational and financial
performance through the cycle using a robust business model characterised by
multi-year contracts and moderate credit exposure to a diversified customer
base. Its unrivalled partnership network powered by state-of-the-art digital
tools and its constant attention to cost control have made ALD a market
leader.
The COVID-19 crisis in Europe is only two months old and countries,
companies and consumers are slowly starting to emerge from the associated
lockdowns. During the coming months and quarters, as the logistical
situation gradually normalises, ALD will maintain a strong focus on
efficient used car management, leveraging its industrialised platform for
selling and exporting used cars, as well as its omni-channel used car lease
capacity.
ALD is also ready to seize new opportunities through the launching of
innovative products such as flexible offers addressing new customers and
further promotion of its used car lease offer. The Group is well positioned
to take advantage of market consolidation and leverage its strong buying
power to bring optimal pricing conditions to its clients and ensure its
competitiveness. ALD's ability to respond to its clients' needs for
additional fleet remains intact, thanks to its reliable access to funding,
making it ready to rebound and confirm its leadership.
ALD expects its 2020 operating performance to be impacted by the adverse
economic environment and, for this reason, has withdrawn its guidance for
the year at the end of March. The high level of uncertainty associated with
the COVID-19 crisis and its impact on business conditions during the coming
quarters make it difficult at this point in time to provide an update on
ALD's expected operational or financial performance in 2020. It is the
company's intention to keep the market informed as the situation evolves and
visibility on trends in used car markets and customer creditworthiness
improves.
Conference call for investors and analysts
Date: 6 May 2020, at 09.30 am Paris time - 08.30 am London time
Speakers: Tim Albertsen, CEO and Gilles Momper, CFO
Connection details:
* Webcast [1]
* Conf call: +331 70 37 71 66 Password: ALD
2020 Agenda
20 May 2020 General assembly of shareholders
29 May 2020 Detachment of the dividend
3 June 2020 Payment of the dividend
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 6 700 employees around the globe, ALD manages 1.78 million vehicles (at
end-March 2020).
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 quarter ending 31 March 2020 was
reviewed by the Company's Board of Directors on 5 May 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 Q1 2020 Q1 2019 Change in %
Q1 '20/'19
Leasing Contract 165.1 165.2 (0.1%)
Margin
Services Margin 158.0 148.1 +6.7%
Leasing Contract 323.1 313.3 +3.1%
and Services
Margins
Used Car Sales 3.2 19.0 (83.2%)
result
GROSS OPERATING 326.3 332.3 (1.8%)
INCOME
Total Operating (162.1) (157.5) +2.9%
Expenses
Cost/Income ratio 50.2% 50.3% na
(excl UCS result)
Impairment Charges (17.8) (10.4) +71.3%
on Receivables
OPERATING RESULT 146.4 164.5 (11.0%)
Share of Profit of 0.4 0.4 (4.3%)
Associates and
Jointly Controlled
Entities
Profit Before Tax 146.8 164.9 (11.0%)
Income Tax Expense (26.6) (29.1) (8.3%)
Profit for the 120.2 135.8 (11.6%)
Period from
Continuing
Operations
Result for the 10.0 0.0 na
period from
discontinued
operations
Profit for the 130.2 135.8 (4.2%)
Period
Net Income (Group 128.9 133.8 (3.7%)
share)
Total fleet and
selected balance
sheet figures
in EUR million, 31.03.2020 31.03.2019 Change YTD
except stated
otherwise
Total Fleet(1) (in 1,777 1,682 +5.6%
'000 of vehicles)
=---------------------------------------------------------------------------
[1] Excluding the acquired Stern Lease fleet from Q3 2019 (14K vehicles) and
including the ALD Fortune divested from Q1 2020 (2K vehicles)
[2] Management information
[3] Source: IMF - World Economic Outlook, April 2020: The Great Lockdown
[4] Management information
Regulatory filing PDF file
Document title: ALD Q1 2020
Document: https://eqs-cockpit.com/c/fncls.ssp?u=NETNAPLLLM [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: Additional regulated information to be pubicly disclosed
under the legislation of a Member State / First quarter
financial report
EQS News ID: 1036521
End of Announcement EQS News Service
May 06, 2020 01:30 ET (05:30 GMT)
© 2020 Dow Jones News
