LeasePlan reports first nine months results with underlying net result up 19.2%
(Thomson Reuters ONE) -
PRESS RELEASE
First nine months of 2017 results
AMSTERDAM, the Netherlands, 16 November 2017 - LeasePlan Corporation N.V.
(LeasePlan; the "Company"), a global leader in fleet management and driver
mobility, today reports strong third quarter (Q3) and first nine months (9M)
2017 results[1].
Recent highlights[2]
* Underlying net result[3] is up 19.2% to EUR 430.5 million and underlying
return on equity[4] is up 2.1% to 16.6% driven by an increase in services
income and cost savings from efficiency gains as a result of the Power of
One LeasePlan operational improvement programme.
* Completed the new Management Board with the appointment of Gijsbert de
Zoeten as Chief Financial Officer (CFO) and Franca Vossen as Chief Risk
Officer (CRO).
Key numbers(1)
Q3 2017 Q3 2016 9M 2017 9M 2016
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Profitability
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Underlying net result (EUR 138.8 114.2 430.5 361.1
million)(3)
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LTM Underlying return on 16.6% 14.5%
equity(4)
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30 September 2017 30 September 2016
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Volume
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Number of vehicles 1.725 1.644
(millions)
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Tex Gunning, CEO of LeasePlan:
"LeasePlan delivered yet another strong set of results in the first nine months
of 2017, highlighting the strong growth and resilient nature of our business.
These excellent results further demonstrate the positive impact of our 'Power of
One LeasePlan' operational excellence initiative.
During Q3, we were very proud to launch our first ever global marketing
campaign, featuring Top Gear and The Grand Tour presenter Richard Hammond,
highlighting LeasePlan's commitment to offering 'What's next' in mobility to its
customers via an 'Any car, Anytime, Anywhere' service.
We also made important steps in our ambition to achieve net zero emissions from
our total fleet by 2030, including becoming a founding partner of the global
EV100 initiative."
Financial performance
LeasePlan recorded strong financial results in the third quarter and first 9
months of 2017 with underlying net income growing at 19.2% year-on-year driven
by services income growth and significant cost savings, reflecting the strength
and resilience of our business and diversified income streams.
Underlying income statement
in millions of euros Q3 2017 Q3 2016 9M 2017 9M 2016
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Lease revenues 1,620.4 1,556.1 4,828.7 4,574.3
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Vehicles sales revenues 698.0 726.6 2,178.3 2,243.9
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Total underlying revenues 2,318.4 2,282.7 7,007.0 6,818.2
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% Y-o-Y growth 1.6% 2.8%
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Total underlying cost of revenues 1,935.0 1,906.5 5,823.9 5,675.0
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Fees and interest margin 160.9 156.2 488.7 472.8
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Lease services 119.1 120.4 374.6 363.6
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Insurance 60.4 53.7 180.3 148.6
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Vehicle sales 43.0 45.9 139.5 158.2
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Underlying gross profit 383.4 376.2 1,183.1 1,143.2
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% Y-o-Y growth 1.9% 3.5%
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Underlying overheads 207.4 221.9 626.5 665.8
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Underlying operating profit 176.0 154.3 556.6 477.4
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Share of profit of associates and JV's 0.2 0.8 1.7 3.8
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Underlying profit before tax 175.8 155.1 558.3 481.2
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% Y-o-Y growth 13.4% 16.0%
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Tax 37.0 40.9 127.8 120.1
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Underlying net result 138.8 114.2 430.5 361.1
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% Y-o-Y growth 21.5% 19.2%
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Underlying adjustments -9.7 42.0 -26.6 34.1
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Reported net result 129.1 156.2 403.9 395.2
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% Y-o-Y growth -17.3% 2.2%
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The increase in total underlying revenues in the first 9 months of 2017 was
driven by the increase in lease revenues by 5.6% to EUR 4,828.7 million, which
in turn was largely due to the 5.0% increase in the number of vehicles under
management and increased service penetration.
Underlying gross profit in the first 9 months of 2017 grew by 3.5% or EUR 39.9
million to EUR 1,183.1 million with higher profit contributions from our
Services income streams of Fees and Interest margin, Lease services and
especially Insurance, which continued its strong trajectory of increasing
penetration (insured fleet increased to 700,000 units, +8.4%). The Power of One
LeasePlan contributed to an increase in gross margins from lease services due to
a reduction in damage repair costs, shifts in procurement spend towards
LeasePlan's preferred dealer network and increased vehicle procurement discounts
and bonuses.
This growth was partly offset by a lower contribution from Vehicle sales. The
decline in the Vehicle sales result was driven by 1) the termination of a large
contract with one specific customer which had an over indexation of smaller
vehicles in their fleet, which inherently have lower list prices and therefore
sales proceeds and 2) an anticipated gradual normalisation in our residual value
income (see further below).
Underlying overheads decreased by 5.9% to EUR 626.5 million due to the
implementation of Power of One LeasePlan initiatives. The number of employees at
end-September 2017 is 9.2% lower than a year ago. In addition, the initiatives
led to year-on-year reductions in IT costs and finance overheads.
The underlying net result grew strongly by 19.2% (or EUR 69.4 million) to EUR
430.5 million. The reported net result of EUR 403.9 million includes one-off
items and normalisations amounting to EUR 26.6 million[5] after tax (EUR 36.7
million before tax). These items consist of restructuring and other one-time
charges relating to the Power of One LeasePlan initiative of EUR 53.9 million[6]
which were partially offset by a gain on the sale of our 24% stake in Terberg
Leasing of EUR 5.1 million and unrealised gains of EUR 12.1 million on
derivative financial instruments.
Underlying Return on Equity[7] (LTM)
+---------+---------+---------+---------+
| Q3-2017 | Q2-2017 | Q1-2017 | Q4-2016 |
+---------+---------+---------+---------+
| 16.6% | 16.1% | 15.7% | 15.0% |
+---------+---------+---------+---------+
As a result of the rapid success of the Power of One LeasePlan and the growth in
the business, Underlying Return on Equity(7) has improved significantly over the
year to date period, increasing by 1.6 percentage points to 16.6%.
Business and operational highlights
Underlying Growth
LeasePlan's fleet grew organically by 5.0% between end-September 2016 and end-
September 2017 to 1.725 million vehicles under management. In line with our
strategy, LeasePlan continues to prioritise disciplined profitable fleet growth
ahead of more marginal growth opportunities that would dilute the company's
return on equity. In the third quarter, we rolled out a number of targeted
initiatives seeking to improve and grow our commercial offering across our
various customer segments. Growth continued to be driven by all regions and
customer segments. Major contributors of the growth include Portugal, France,
the Netherlands, Spain and Germany with a balanced contribution of large
international customers, SME and private lease. The Eastern European region
continued its strong growth path reporting double digit fleet growth versus the
previous year.
Residual Value and Diesel
LeasePlan has seen stable prices for its vehicles across Europe throughout the
year, with no discernible impact from diesel regulations, which are very
localised and focused on older models. Given LeasePlan's fleet turns over every
3-4 years, the company retains exposure to only the latest and cleanest diesel
models. More than 99% of LeasePlan's diesel fleet is Euro 5/6. LeasePlan is
therefore well positioned to adapt to any changes in regulation which can take
significant time to be implemented. LeasePlan also benefits from a pan-European
network and can mitigate localised declines in the pricing of 3-4 year old cars
by leveraging cross-country pricing arbitrage opportunities. In addition to
providing a source of risk mitigation, better exploitation of these cross-
country arbitrage opportunities within Europe has the potential to drive
meaningful profit enhancements across a significant portion of the vehicles sold
by LeasePlan each year.
We expect these stable prices across our key markets to continue. This
expectation is based on an extensive analysis of the supply/demand dynamics
across our key used car markets, which indicates that prices should remain
stable or grow across our markets generally.
The reduction in LeasePlan's vehicle sales results highlighted above has
therefore not been the result of a change in used car prices or market
conditions of late. Rather, this represents a predictable normalisation of the
exceptional levels of RV profitability generated on cars leased in the
dislocated market that followed the financial crisis of 2008/09.
The financial crisis led to exceptional pressure on used car prices from 2009 to
2014. During this period, LeasePlan was able to write contracts based on
unusually low residual value expectations. As used car prices have gradually
returned to the more normal levels we see today, LeasePlan has (1) generated
strong residual value profits on the sale of cars with contracts written during
the financial crisis and (2) gradually adjusted the residual values within new
contracts to reflect this market recovery and more normalised levels of RV
profitability. The reduction we are currently seeing in our vehicle sales
results is simply the result of this predictable, gradual normalisation in the
book value of contracts written in the post crisis period and is more than
offset by the strong underlying growth of our business and Power of One
LeasePlan initiatives.
Completion of new Management Board
On 29 September, LeasePlan strengthened its Management Board with the
appointment of Gijsbert de Zoeten as the company's new Chief Financial Officer
(CFO) and Franca Vossen as LeasePlan's new Chief Risk Officer (CRO), responsible
for Risk, Compliance, Privacy, Regulatory Affairs and Corporate Social
Responsibility. Gijsbert de Zoeten was SVP Finance of LeasePlan's European
leasing business and Franca Vossen joined from DLL, the leasing division of the
Rabobank Group, where she was CRO. The Management Board now consists of Tex
Gunning Chief Executive Officer (CEO), Gijsbert de Zoeten (CFO), Marco van
Kalleveen Chief Operating Officer Europe (COO), Yolanda Paulissen Chief
Strategic Finance and Investor Relations Officer (CSFIRO) and Franca Vossen
(CRO).
Funding and capital position
In the first nine months of 2017, LeasePlan continued to benefit from its
diversified funding platform. The company successfully issued 2 public
transactions of its Asset Backed Securities (ABS) programme, Bumper 8 in the UK
for a total of GBP 425 million and Bumper 9 in the NL for EUR 574 million.
Senior unsecured private placement volume amounted to EUR 1,034 million in the
period with a further EUR 500 million placed in public benchmark format.
In addition, LeasePlan saw an increase in LeasePlan Bank retail deposits of EUR
508 million to EUR 5.9 billion. LeasePlan's capital position remains solid, with
a CET 1 capital ratio of 18.4%, unchanged versus the end of September 2016.
- Ends -
CONTACT DETAILS
Media
Harmen van der Molen T: +31 6 5073 2424
E: media(at)leaseplancorp.com
Debt Investors
Paul Benson T: +353 (1)680 4000 M: +353 (0)86 817 5152
E: paul.benson(at)leaseplan.com
ABOUT LEASEPLAN
LeasePlan is one of the world's leading fleet management companies, with 1.7
million vehicles under management in over 30 countries. Our core business
involves managing the entire vehicle life-cycle for our clients, taking care of
everything from purchasing, insurance and maintenance to car re-marketing. With
over 50 years' experience, we are a trusted partner for our corporate, SME,
private and mobility service clients. Our mission is to provide what's next in
mobility via an 'Any car, Anytime, Anywhere' service - so you can focus on
what's next for you. Find out more at www.leaseplan.com.
DISCLAIMER
Financial and other information in this document may contain certain forward-
looking statements (all statements other than those made solely with respect to
historical facts) based upon beliefs and data currently available to management.
These statements are based on a variety of assumptions that may not be realised
and are subject to significant business, economic, legal and competitive risks
and uncertainties. Our actual operations, financial conditions, cash flows and
operating results may differ materially from those expressed or implied by any
such forward-looking statements and we undertake no obligation to update or
revise them.
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[1] The information in this press release has neither been audited nor reviewed.
The condensed consolidated interim financial statements for the period ended 30
September 2017 have been reviewed.
[2] % refer to year-on-year growth unless otherwise stated.
[3] Underlying net result consists of net result adjusted for unrealized result
on financial instruments, one-time items related to the sale of subsidiaries,
the Power of One LeasePlan initiative and the tax effect thereof. For the
reconciliation between the underlying net result and the reported IFRS net
result, reference is made to the table on page 2 of this press release.
[4] LTM Underlying return on equity throughout this document is defined as Last
Twelve Months Underlying net result (last 12 months) divided by the average
equity (average monthly equity of the last 12 months) over the related period.
In previous reports, Underlying return on equity was calculated based on the
Underlying net result (annualized) divided by the average equity over the
related period. The Underlying return on equity (annualized) for YTD September
2017 amounts to 18.1% (YTD September 2016 15.9%)
[5] Comparable first nine months of 2016: Normalisations of EUR 34.1 million
after tax (EUR 32.6 million before tax) related to unrealized losses of EUR 6.5
million and the sales of Travelcard of EUR 39.1 million
[6] One off costs resulting from consultancy fees and headcount reductions
[7] LTM Underlying return on equity throughout this document is defined as Last
Twelve Months Underlying net result (last 12 months) divided by the average
equity (average monthly equity of the last 12 months) over the related period.
In previous reports, Underlying return on equity was calculated based on the
Underlying net result (annualized) divided by the average equity over the
related period. The Underlying return on equity (annualized) for YTD September
2017 amounts to 18.1% (YTD September 2016 15.9%)
LeasePlan Q3 2017 results (pdf):
http://hugin.info/174739/R/2150117/825259.pdf
LeasePlan Q3 2017 results (jpeg):
http://hugin.info/174739/R/2150117/825260.jpg
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: LeasePlan Corporation N.V. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 16.11.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 568402
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contact information:
Town:
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Kategorie:
Business News
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