ALD down after quarterly results up 22.4% year-on-year – 05/12/2023 at 15:38

(AOF) – ALD lost 1.25% to 11.03 euros after announcing the distribution of total group income of 315.5 million euros, up 22.4% compared to the 1st quarter of 2022. A subsidiary of Société Générale, which specializes in long-term financing of cars. The margin of contracts and rental services reached 541.1 million euros, up 63.3% compared to the 1st quarter of 2022, “indicating a decrease in value”. ALD had 1.815 million contracts managed worldwide at the end of March 2023, and a financed fleet of 1.423 million vehicles.

ALD announces that its gross operating profit increased by 33.8%, to 731.6 million euros “thanks to commercial strength and the second-hand market which is still very favorable”.

“The ALD Board of Directors has called an extraordinary general meeting on May 22, 2023 to close the acquisition of LeasePlan”, announces Tim Albertsen, Chief Executive Officer of ALD. “We are very excited to welcome the LeasePlan teams soon and begin a new chapter in our development, where we will join forces to continue to lead the evolution of the mobility industry and generate value for our customers and our shareholders”.

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Important points

– European leader and 2nd worldwide in car rental, with a fleet of 1.45 million cars;

– €1.3 billion in revenue derived from rental income (48%), and services related to rental (46%) and for the sale of vehicles at the end of the contract;

European presence (80.3% of ships in Western Europe, 8.8% in Central Europe and 5.3% in Northern Europe) and diversification in Latin America, Asia and Africa for 5.6%;

– Business model: contracts lasting more than 3 years for giving to large companies, cooperation with car manufacturers and banks (34% of income from offers to companies and 66% to individuals) and a mix of giving to individuals;

– Capital controlled by 79.82 percent by Société Générale, Tim Albertsen as Chief Executive Officer and Diany Lebot leading the Board of Directors of 10 members;

– Good financial condition with a debt ratio of 16.7%.

Challenge

– The “World 2025” strategy that will have to be revised after the acquisition, from December 2022, of the Leasing Plan, in the amount of €4.9 billion to be paid in shares and cash, which would make the group baptized NewALD, the world leader. in mobility with a fleet of 4.5 million vehicles and would reduce the share owned by Société Générale to 53%;

– Innovation approach: prospects for the use of connected and smart cars / global service from one MyAld platform as well as 2 sales platforms / expansion of digital solution offerings – Pop Go, ALD Sharing, ALD Move, etc.;

– An environmental strategy aimed at reducing carbon emissions by 30% in 2025 vs. 2019, for customers: from one label: ALD bluefleet, showing more responsible services, ALD switch (electric internal combustion or hybrid vehicles), electricity of ALD (electrical connection of vehicles in the fleet), the slope of non-diesel vehicles and shared use (partnership with Blablacar, Klaxit, Drivy, etc.) / “green” credits for the acquisition of low-carbon vehicles;

– Combinations from partnerships (Amazon in Spain, Tesla in 14 countries, Polestar in 3 and Mitsubishi in Malaysia) and diversification into short-term rental and car sharing;

– Increase in the sale price of used cars, up to €3,212 per unit;

– Activity secured by multi-year lease agreements.

Challenge

– Resistance to 5 challenges: equipment disruption: anticipating orders, cooperation support with manufacturers / rise in rates and exchange rates: systemic hedging / inflation: adjustment of criteria for new contracts / recession: increase in offers of the use and rental / increase of many bicycles. in energy: strengthening customer advice and innovative products;

– After gross profit rose 72% for 1

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term, 2022 target of 2 to 4% increase in financed fleet, resale price of +€2,000 and distribution rate of 50 to 60%.

Negative effects of rising interest rates

A rise in interest rates usually leads to an increase in bank income through loans issued. In Europe, according to a survey conducted by S&P among 85 banking institutions, the sector expects an average increase of 18% in its net interest income. However, this new context of inflation also has undesirable effects, especially the increase in financing costs. It is also accompanied by fears of a new recession, which will affect all banking businesses, from loans to asset management, whose income is linked to market valuations. An encouraging point: eurozone banks are strong enough to weather the deterioration of their environment.