ALD
ALD: reports first half 2020 results
03-Aug-2020 / 08:43 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, 3 August 2020
HALF-YEARLY FINANCIAL INFORMATION
ALD reports first half 2020 results
· SOUND OPERATING PERFORMANCE ILLUSTRATING THE RESILIENCE OF THE BUSINESS
MODEL AND THE AGILITY OF THE ORGANISATION
· FUNDED FLEET UP 3.1% VS. END JUNE 2019, OPERATING MARGINS[1] UP 3.1%
· SOLID PROVISIONING AND EXCESS DEPRECIATION CHARGES TOTALLING EUR 62
MILLION
· USED CAR SALES RESULT PER UNIT AT EUR -92 ON AVERAGE IN H1
· EUR 3.4 MILLION DECREASE IN OVERHEADS DEMONSTRATING ABILITY TO CONTROL
COSTS
· NET INCOME (GROUP SHARE) AT EUR 206.8 MILLION
H1 2020 Results highlights
· Total Fleet 1.76 million vehicles managed worldwide at end June 2020,
+3.8% vs. June 2019
· Leasing Contract and Services Margins down EUR 22.0 million,
incorporating the impact of the fleet revaluation process: EUR 30.0
million excess depreciation charge in H1 2020 vs. EUR 11.3 million release
in H1 2019
· Used Car Sales result at EUR -11.6 million, including impairment of used
car stock of EUR 18.6m
· Cost of Risk at 46 bps[2], including a forward-looking provision under
IFRS9
· EUR 10.0 million after tax profit on disposal of stake in ALD Fortune
(China) in Q1 2020
· Total Equity/Asset ratio at 15.6%, up from 15.2% at end June 2019
New Guidance for 2020[3]
· Total Fleet growth (organic) close to 0% versus 2019, plus bolt-on
acquisitions as opportunities arise
· Used Car Sales result per vehicle to average EUR -250 to EUR 0
· Cost/Income (excluding Used Car Sales result) ratio between 50% and 51%
On 3 August 2020, Tim Albertsen, ALD CEO, commenting on the H1 2020 Group
Results, stated:
"H1 2020 was a live stress test for many companies. In the context of the
Covid-19 crisis ALD has demonstrated the strength and resilience of its
business model, as well as the agility of the organization. This crisis saw
the rise of new types of demands which ALD was able to answer quickly and
efficiently. Flexible offers were deployed in over 19 countries and used car
lease actively promoted. Despite the challenges, ALD has continued to work
very actively, with both clients and partners who recognise the Company as a
stakeholder they can rely on. Our operating and financial performance in H1
was sound despite inclusion of several provisions reflecting potential
upcoming risks. As a pick-up is observed in main markets, ALD stays alert to
opportunities while paying careful attention to costs. ALD intends to
continue to lead the market. We feel we have sufficient visibility to issue
new operating guidance for 2020, premised on the assumption that major
European countries will not be forced to return to a severe lockdown for an
extended period. We are also announcing a Capital Markets Day to be held on
November 12th during which we will present our business strategy for the
years to come."
Resilient and agile business model
Operating margins, defined as Leasing contract and Services margins
excluding excess depreciation, proved their resilience in H1 2020, growing
3.1% year on year, in line with funded fleet growth, at +3.1% vs. H1 2019.
Total Fleet growth was penalised by severe lockdown measures taken in
Western Europe.
However, customer and partner relationships were enhanced by the crisis,
through proximity and attentiveness and a close monitoring of difficult
situations. Activity has picked up progressively after lockdown measures
were softened and pre-crisis levels have already been reached in some
geographies.
Despite lower delivery volumes during the lockdowns, the penetration of
"green"[4] powertrains continues to rise: they represented 19% of ALD's
passenger car deliveries globally in Q2 2020 (vs. 12% in Q2 2019) and close
to 21% in Europe[5], already in line with the target of more than 20%
"green" vehicles deliveries in Europe5 by the end of 2020 announced at the
start of the year.
ALD is ready to meet this shift in demand thanks to its continued work with
reference players, from car manufacturers such as Tesla or Polestar, to
providers of charging infrastructure and support such as Chargepoint, E.On
and Enel. These partnerships are part of a comprehensive programme to
promote Electric Vehicles, which includes EV-dedicated products such as
Switch and Carsharing.
Solid operating and financial performance
Total Fleet reached 1.76 million vehicles at the end of June 2020, up 3.8%
vs. end of June 2019. Organic fleet 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 3.1%.
Leasing Contract Margin reached EUR 295.5 million and Services Margin EUR
320.4 million in H1 2020, down 10.5% and up 4.2% respectively vs. H1 2019.
Taken together they decreased by EUR 22.0 million vs. H1 2019. In Q2 2020,
the Leasing Contract Margin included a EUR 30.0 million excess depreciation
charge, resulting from the fleet revaluation process, which embeds stressed
sales prices expected to last into 2021.
The contribution to Gross Operating Income from Used Car Sales result
reached EUR -11.6 million in H1 2020, down significantly from EUR 43.4
million in H1 2019. The drop was due in part to a specific EUR 18.6 million
impairment of used car stock, which was recorded in H1 results, reflecting
delays in sales and potential reduction in the prices of second-hand cars.
Average sales margin on used vehicles[6] for the half-year came in at EUR
-92 per unit, and EUR 55 when restated from the exceptional impairment
charge on used car stock recorded over the period. The Q2 20 average was EUR
-284 per unit, and EUR -105 excluding the exceptional impairment charge.
The number of used cars sold6 in H1 2020 was 126K, down from 144K in H1
2019, reflecting the effect of lockdown measures in March and April.
Although remarketing activity has shown a promising rebound since mid-May,
stock levels remain above pre-crisis level. ALD continues to promote
contract duration extensions to targeted customers with the aim of lowering
the number of vehicles to be sold. ALD's digital remarketing platform is a
key asset in the efficient management of used car sales, as activity
progressively picks up again.
Operating Expenses decreased by EUR 3.4 million in H1 2020, reaching EUR
313.4 million, demonstrating ALD's strong ability to control costs in
difficult times. This decrease reached EUR 8 million in Q2 2020 when
compared to Q2 2019, a significant achievement in a context of 3.8% fleet
growth.
Impairment charges on receivables reached EUR 47.6 million, rising by EUR
25.8 million from the EUR 21.8 million recorded in H1 2019. This increase
was principally due to a EUR 13.4m forward looking provision recorded in H1
2020 results reflecting the expected increase in probability of customer
default. The cost of risk[7] reached 46 bps in H1 2020, and 32 bps when
excluding the forward-looking component.
Further to the closing of the transaction on 28 February 2020, a EUR 10.0
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 EUR 206.8 million in H1
2020, down from EUR 280.7 million in H1 2019. This decrease mainly results
from solid provisioning and excess depreciation charges totalling EUR 62
million (before tax).
Earning Assets decreased by 3.3% at the end of June 2020 vs. the end of the
previous year, reaching EUR 20.5 billion, reflecting a slight decrease in
funded fleet due to the effect of contract extensions and foreign exchange
translation impacts.
Equity reinvestments in long-term deposits decreased by EUR 39 million, as
amortising deposits with Societe Generale continued to run off. Other assets
remained stable.
Total funding at the end of June 2020 stood at EUR 17.9 billion (down
slightly from EUR 18.4 billion at the end of 2019) of which 70% consisted of
loans from Societe Generale. Over the course of H1 2020, EUR 400m of bonds
matured and were not refinanced in the context of limited funding needs in
2020 due to contract extensions and limited funded fleet growth.
The Group's Total Equity to Total Assets ratio stood at 15.6% at the end of
June 2020, up from 15.2% a year earlier, and down slightly from 15.7% at end
2019 following the payment of 2019 dividend in Q2 2020 (EUR 254 million).
Key strategic initiatives
Launch of flexible offers
On 24 June, ALD announced the launch of ALD Flex, a flexible mobility
solution with the advantages of fully serviced vehicles and on demand
availability in 19 countries.
ALD Flex provides an all-inclusive vehicle offering for mid-term usage,
ranging from 1 to 24 months, at an optimal monthly rate. A broad range of
vehicle categories is available for immediate use. Additional flexibility
allows contracts to be terminated after 1 month at no extra cost.
ALD Flex will be available in 30 countries worldwide by mid-2021.
In addition, ALD proposes ALD Swap in Norway. This premium subscription
product offers a flexible car selection and the option to swap cars at any
time.
ALD Carmarket new global brand identity
On 16 June, ALD launched a new phase in the expansion of its unified brand
identity: the rebranding of the entire remarketing offering under the
company's new global brand identity ALD Carmarket, now used for both retail
and corporate segments. Intensifying the launch of direct "clicks & bricks"
used car purchase or lease offering for consumers and leveraging the largest
used car offering in the industry, ALD Carmarket provides high quality,
expertly serviced and appraised used cars that are sourced through the
countries where ALD has a direct presence.
Extra financial ratings: Ranked Platinum by Ecovadis in Poland and
Luxembourg
Early 2020, EcoVadis has reviewed its rating grid. Criteria for bronze and
silver medals were strengthened and a new "Platinum" rating was created to
reward high-performance companies. Within the top 1% of companies on the
global EcoVadis platform and with an overall score greater or equal to
73/100, Poland and Luxembourg are the first ALD entities to have been rated
"Platinum".
Launch of a new Fleet Management business with Ford in Europe
On 16 July, Ford and ALD signed a shareholder agreement to create Ford Fleet
Management, an integrated leasing and fleet management solution for European
customers.
Ford Fleet Management will leverage both parties' deep understanding of
customers, product and mobility services, as well as an extensive dealer
network, to deliver the ambition of best-in-class vehicle uptime.
Ford Fleet Management will begin operating in the UK by the autumn, subject
to approval by the relevant authorities.
This initiative deepens a long-standing relationship in which ALD Automotive
has been providing Ford lease services for more than 15 years in Europe.
South East Asian strategy
In H1 2020, ALD started to implement its South East Asian strategy through
the creation of a joint venture with Mitsubishi UFJ Lease and Finance
Company Limited (MUL) to operate in Malaysia. In addition, ALD signed
partnership agreements with Mitsubishi Auto Leasing Corporation (MAL) to
extend global coverage in Japan, and with Shouqi Car Rental & Leasing to
provide full service leasing solutions in China.
Conference call for investors and analysts
Date: 3 August 2020, at 10.00 am Paris time - 9.00 am London time
Speakers: Tim Albertsen, CEO and Gilles Momper, CFO
Connection details:
* Webcast [1]
* Conf call:
France: +33 (0) 1 7099 4740
UK (Standard International Access): +44 (0) 20 3003 2666
Password: ALD
2020 Agenda
5 November 2020 Trading update and Q3 results
12 November 2020 Capital Markets Day
10 February 2021 Q4 and FY 2020 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 1.76 million vehicles (at
end-June 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 half-year ending 30 June 2020 was
reviewed by the Company's Board of Directors on 31 July 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 Q2 2020 Q2 2019 Var % HY HY Var %
Q2 '20/ 2020 2019 HY
'19 '20/'19
Leasing Contract 2,280. 2,205. +3.4%
Revenues 9 9
Leasing Contract (1,835 (1,744 +5.3%
Costs - .8) .1)
Depreciation
Leasing Contract (150.9 (136.4 +10.6%
Costs - ) )
Financing
Unrealised 1.3 4.9 (72.7%)
Gains/Losses on
Financial
Instruments
Leasing Contract 130.5 165.1 -21.0% 295.5 330.3 (10.5%)
Margin
Services 1,062. 1,051. +1.1%
Revenues 3 1
Cost of Services (741.9 (743.5 (0.2%)
Revenues ) )
Services Margin 162.4 159.5 1.8% 320.4 307.6 +4.2%
Leasing Contract 292.9 324.6 -9.8% 615.9 638.0 (3.4%)
and Services
Margins
Proceeds of Cars 1,355. 1,491. (9.1%)
Sold 5 3
Cost of Cars (1,367 (1,447 (5.6%)
Sold .1) .9)
Used Car Sales (14.9) 24.4 ns (11.6) 43.4 ns
result
GROSS OPERATING 278.0 349.0 -20.3% 604.3 681.4 (11.3%)
INCOME
Staff Expenses (203.3 (202.4 +0.4%
) )
General and (82.0) (88.2) (7.0%)
Administrative
Expenses
Depreciation and (28.1) (26.2) +7.3%
Amortisation
Total Operating (151.3) (159.3) -5.0% (313.4 (316.8 (1.1%)
Expenses ) )
Cost/Income 51.7% 49.1% 50.9% 49.7%
ratio (excl UCS
result)
Impairment (29.8) (11.4) 161.7% (47.6) (21.8) +118.6%
Charges on
Receivables
OPERATING RESULT 96.9 178.3 -45.6% 243.3 342.8 (29.0%)
Share of Profit 0.3 0.5 -32.7% 0.7 0.9 (19.3%)
of Associates
and Jointly
Controlled
Entities
Profit Before 97.2 178.8 -45.6% 244.0 343.7 (29.0%)
Tax
Income Tax (17.9) (30.7) -41.6% (44.6) (59.7) (25.4%)
Expense
Result from (0.0) 0.0 10.0 0.0
discontinued
operations
Profit for the 79.3 148.1 -46.4% 209.5 283.9 (26.2%)
Period
Net Income 78.0 146.9 -46.9% 206.8 280.7 (26.3%)
(Group share)
Non-Controlling 1.3 1.2 7.8% 2.6 3.3 -20%
Interests
Return on 10.5% 15.3%
Average Equity2
Total fleet and selected balance
sheet figures
in EUR 30.06.2020 31.12.2019 Change 30.06.2019 Change
million, in % in %
except HY HY
stated '20/FY '20/HY
otherwise '19 '19
Total Fleet 1,765.0 1,765 +0.0% 1,700 +3.8%
(in '000 of
vehicles)
Total 25,018 25,588 (2.2%) 24,537 +2.0%
Assets
Earning 20,480 21,183 (3.3%) 19,930 +2.8%
Assets
Total 3,912 4,029 (2.9%) 3,727 +4.9%
Equity
Financial 17,905 18,395 (2.7%) 17,762 +0.8%
Debt3
Total 15.6% 15.7% 15.2%
Equity on
Total
Assets
1 ALD's Q2 20, and H1 20 results have been subject to a limited 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 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] Leasing contract and Services margins excluding Excess depreciation
[2] Annualised Cost of Risk as a % of Average Earning Assets
[3] Premised on the assumption that major European countries will not be
forced to return to a severe lockdown for an extended period
[4] "Green" vehicles: Electric vehicles, Plug-in hybrids, Hybrids
[5] European Economic Area, UK and Switzerland
[6] Management information
[7] 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.
Regulatory filing PDF file
File: ALD reports half year 2020 results [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: 1108053
End of Announcement EQS News Service
1108053 03-Aug-2020 CET/CEST
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(END) Dow Jones Newswires
August 03, 2020 02:43 ET (06:43 GMT)
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