ALD IPO Minisite

Key Investment Highlights

  • A fast-growing market with significant expansion potential

    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:

    1. Strong outsourcing trend, and increasing acceptance by customers of the product benefits (i.e. outsourcing fleet financing and management leads to savings);
    2. Shift in mind-set from ownership to usage;
    3. Development of innovative digital solutions and new fleet management services (digitalisation leading to development of more value added offerings).

     

     

    The outlook of the corporate full service leasing market is promising, driven by:

    1. Development of under-penetrated geographies (Emerging markets like Russia, Mexico etc.);
    2. Further growth in mature markets in less penetrated segments like SMEs and B2C offer;
    3. Development of services (new innovative mobility solutions).
  • A global leadership with solid positions in 41 countries

    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.

  • Attractive growth prospects for the Group

    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.

  • At the forefront of innovative mobility solutions

    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.

  • An efficient operating model

    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.

  • An outstanding financial profile

    Remarkable track record of profitable growth over 2011-2016:

    • Total income almost doubling from €659m in 2011 to €1,244m in 2016 i.e. a compound average growth of 14% (above the fleet growth rate of c. 8% per year in average);
    • Cost-income ratio improving by more than 11 percentage points from 55.8% in 2011 to 44.5% in 2016;
    • Net income growing at an average rate of 23% per year since 2011;
    • Robust RoAE of 17.9% in 2016.

     

    Solid balance sheet:

    • Strong capital position with an equity to asset ratio of 16.1% and tangible equity to asset ratio of 13.6% at 31 December 2016;
    • BBB rating assigned by S&P in August 2012 and regularly confirmed since (most recently 03 May 2017) with stable funding sources, Societe Generale contributing 72% of total and external sources the remaining 28%.
  • Experienced management with solid strategy

    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.

    • Mike Masterson (CEO): 29 years of sector experience – CEO since 2011
    • Tim Albertsen (Deputy CEO): 25 years of sector experience – Deputy CEO since 2011
    • Gilles Bellemere (Deputy CEO): 12 years of sector experience – Deputy CEO since 2017
    • Gilles Momper (CFO): 22 years of experience – CFO since 2012
    • John Saffrett (CAO): 11 years of sector experience – COO since 2015