Worldwide news

10Feb

ALD reports full year 2020 results

ALD reports full year 2020 results

  • STRONG FINANCIAL PERFORMANCE ILLUSTRATING THE RESILIENCE OF THE BUSINESS MODEL IN A PANDEMIC CONTEXT
  • TOTAL CONTRACTS 1 STABLE
  • EXCELLENT PRODUCTIVITY OF REMARKETING OPERATIONS – RECORD VOLUME OF USED CAR SALES AT 305 THOUSAND UNITS, WITH RESULT PER UNIT AT EUR 201, ABOVE GUIDANCE RANGE
  • DELIVERING ON OPERATING AND FINANCIAL GUIDANCE
  • SOLID NET INCOME (GROUP SHARE) OF EUR 509.8 MILLION, INCLUDING EUR 54 MILLION OF SPECIFIC PROVISIONS AND EXCESS DEPRECIATION
  • PROPOSED 2020 DIVIDEND OF EUR 0.63 PER SHARE REPRESENTING A 50% PAYOUT RATIO


2020 Results highlights

  • Total Contracts1 1.76 million contracts managed worldwide at end Dec 2020
  • Leasing Contract and Services Margins down EUR 40.0m, but up 1.5% vs. 2019 when restated for the impact of the fleet revaluation process: EUR 39.0 million excess depreciation charge in 2020 vs. EUR 20.4 million release in 2019
  • Used Car Sales Result at EUR 61.1 million
  • Operating Expenses down EUR 1.3m vs. 2019, bringing Cost/Income Ratio (excl. Used Car Sales Result) at 50.4%, inside the 50% to 51% guidance range
  • Cost of Risk at 34 bps 2, including a EUR 15.4m forward-looking provision under IFRS9
  • EUR 10.0 million after tax profit on disposal of stake in ALD Fortune (China) in Q1 2020
  • Earnings per share 3 at EUR 1.26
  • Proposed dividend of EUR 0.63 per share, corresponding to a payout ratio of 50%
  • ROE 4 at 12.5% vs. 14.8% in 2019
  • Total Equity/Total Assets ratio at 16.7% vs. 15.7% in 2019


Main objectives of ALD’s strategic plan ‘Move 2025’

  • Total Contracts1 expected to reach c. 2.3 million by 2025, including bolt-on acquisitions
  • Leasing Contract & Services Margins, together, to increase at least in line with Total Contracts between 2019 and 2025
  • Cost/Income (excl. Used Car Sales result) ratio to improve to between 46% and 48% by 2025
  • Dividend pay-out ratio between 50% and 60% for 2020-2025
  • - 40% on CO2 emissions 5 in 2025 vs 2019
  • 30% of new car deliveries to be EV 6 by 2025

 

Outlook for 2021

The number of Total Contracts1 managed by ALD is expected to reach c. 2.3 million by 2025, including growth through bolt-on acquisitions. Private lease, ALD Flex and Used Car Lease in particular are expected to be strong drivers of ALD’s funded fleet 7 growth, while growth in its ‘unfunded’ business will see a shift towards its mobility service offering, ALD Move, and greater selectivity in its Fleet Management business.

In view of the current uncertainty related to the pandemic, ALD is providing an outlook for 2021 that is explicitly linked to a central assumption about the operating environment during the year:

If the impact of the COVID-19 pandemic gradually fades in the course of the year and economic conditions improve thanks to strong macroeconomic policy stimulus by governments, ALD’s core business, grouped together as Funded Fleet 8 is expected to renew with positive growth, after a lackluster 2020. At the same time, the number of Fleet Management contracts is expected to drop in 2021, following the non-renewal of the commercial relationship with one large partner (80 thousand contracts) on account of its low profitability. The launch and continued roll-out of ALD Move is expected to partly offset this loss in volume in 2021, at higher contractual margins.

Used Car Sales are expected to provide a positive contribution to Gross Operating Income with demand for used vehicles remaining strong, on the condition that strict lockdowns are avoided.

The Cost/Income ratio (excluding Used Car Sales result) is expected to resume its improving trend.

 

To summarise, for 2021 the Group expects:

  • Positive funded fleet8 growth
  • Positive Used Car Sales Result per unit
  • Improvement in Cost/Income ratio (excluding Used Car Sales result)


On 10 February 2021, Tim Albertsen, ALD CEO, commenting on the FY 2020 Group Results, stated:

“2020 has pushed companies and individuals out of their comfort zones. At ALD, we have quickly adapted our ways of working with customers and partners to launch new products and services. These learnings are extremely valuable. ALD has demonstrated the strength and resilience of its business model, underpinned by the agility and capacity for innovation of the organization and the teams. Our operating and financial performance in 2020 was strong despite inclusion of several provisions reflecting potential upcoming risks. Our remarketing tools have once again proven their efficiency and delivered a record performance. In the current context, ALD stays open to opportunities while paying careful attention to costs. Although 2021 continues to bring its lot of uncertainty, we are confident we are on the right track to deliver our Move 2025 strategic plan which positions ALD at the heart of the evolving mobility world and strengthens our competitive edge to become a fully integrated sustainable mobility provider and the global leader in our industry.”

Read the PR 
 

*The Group’s unaudited consolidated results as at 31 December 2020 were examined by the Board of Directors, chaired by Diony Lebot, on 9 February 2021. The audit procedures carried out by the Statutory Auditors on the consolidated financial statements are in progress.

 

1 Total Contracts: Term replacing Total Fleet, defined as full service lease contracts, fleet management contracts, and new mobility solutions contracts

2 Annualised Cost of risk as a % of Average Earning Assets

Diluted Earnings per share, calculated according to IAS33. Basic EPS for 2020 at EUR 1.27

4 ROE: Return on Equity | See definition note 2, page 11

5 Average emissions on new passenger vehicle deliveries for EU + Norway + UK + Switzerland (CO2 in g/km (NEDC norm))

Defined as BEV and PHEV and Hydrogen Fuel Cell. BEV: Battery Electric Vehicle, PHEV: Plug-in Hybrid Electric Vehicle. Target set on new passenger vehicle deliveries for EU + Norway + UK + Switzerland

Funded fleet: Full Service Lease contracts including ALD Flex and Used Car Lease

Funded fleet: Full Service Lease contracts including ALD Flex and Used Car Lease