The corporate full service leasing and fleet management service market, ALD’s core market, has grown steadily after the financial crisis, at a faster pace than GDP (4% growth per year on average over 2013-2016 in Europe, vs 1.5% for real GDP).
Market growth is supported by strong underlying fundamentals:
The outlook of the corporate full service leasing market is promising, driven by:
ALD is a global leader in fleet management & mobility services. The Group is ranked #1 in Europe and #3 globally.
ALD’s global footprint with operations in 41 countries is the largest amongst its peers, provides high customer visibility and helps ensure that ALD is involved in significant global tenders for its services.
Scale is a major competitive advantage as it provides a competitive purchasing position which in turn allows to improve margins and be more competitive on prices. It also provides a greater ability to differentiate through innovation as it allows ALD to dedicate significant resources to R&D and IT platforms for new fleet management technologies.
ALD has already demonstrated above market average growth over the past decade. From 2005 to 2016, ALD’s fleet under management grew at an average of c. 8% per year.
This solid track-record comes from ALD’s demonstrated ability to develop revenues through direct sales with key international accounts and most of all through indirect sales channels thanks to win-win partnerships with banks and OEMs. ALD’s OEM partnership fleet has grown at an average rate of c. 24% over 2011-2016 while the bank partnership fleet grew at an average of c. 31% over the same period.
Looking forward, in addition to positive market trends and prospects linked to a promising pipeline of new potential partners, ALD should benefit from the development of the B2C segment.
ALD believes that social trends are contributing to higher demand for outsourced mobility solutions, which offers significant growth opportunities beyond 2020.
Innovation is at the heart of the Group’s strategic priorities as showed by extensive R&D investments (€53m new IT initiatives budget in 2016) and local centres of excellence developing key innovations in a start-up mode before global rollout.
ALD has a solid track-record of differentiation through digital innovation as showed by the rollout of effective technology-enabled services such as telematics, My ALD, e-commerce platforms and Mobility cards.
ALD benefits from recurring and predictable revenue streams thanks to a duration of leasing contracts averaging 43 months with high stickiness of customers.
The Group maintains strong focus on cost control and operating efficiency, and reports a leading cost-income ratio of 44.5%. Its customer base is well diversified, and benefits from strong credit quality (62% of the customers are rated BBB or higher).
Last, ALD operates a robust residual value risk management framework, with a bi-annual review of all residual values, and a monthly reporting of used car sales. This is complemented by strong remarketing expertise for used cars.
Remarkable track record of profitable growth over 2011-2016:
Solid balance sheet:
ALD’s top management benefits from strong experience and international exposure. The members of management team have on average approximately 20 years of sector experience and 10 years of experience within the Group and hail from the UK, France and Denmark.