ALD, largest increase in SBF 120 at close of Friday 5 August 2022 – – 05/08/2022 18:00

(AOF) –

ALD

(+ 3.56% to € 12.22)

ALD, the specialist in long-term leasing and fleet management, climbed to the top spot on the podium following the first half of 2022 results released Wednesday. Its net profit increased 72.2% to 606.1. million euros.

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Key points

– Number 1 in Europe and number 2 in the world in car rental, with a fleet of 1.78 million vehicles;

– 1.3 billion euros in revenues generated from lease payments (48%), from rental services (46%) and from the resale of vehicles at the end of the contract;

– European presence (80.3% of the fleet in Western Europe, 8.8% in Central Europe and 5.3% in Northern Europe) with diversification in South America, Asia and Africa for 5.6%;

– Business model: contracts lasting more than 3 years for the offer to large companies, partnerships with car manufacturers and banks (34% of the revenues from the offer to companies and 66% to individuals) and diversification of the offer to individuals;

– Capital controlled at 79.82% by Société Générale, Tim Albertsen as chief executive officer and Diany Lebot as chairman of the 10-member Board of Directors;

– Sound financial position with a debt ratio of 16.7%.

Challenges

– “World 2025” strategy to acquire the position of world leader in long-term rental based on 4 levers: innovative customer service under a single brand, growth through the expansion of offices and new mobility solutions, social responsibility and value creation over the entire economic cycle: 2.3 million contracts of which almost 85% of the financed fleet / cost / income ratio between 46 and 48% / 68 million euros of additional digital investments;

– Innovation strategy: anticipation of the use of connected and intelligent vehicles, already implemented through the partnership with Vinli for telematics / global service from a single MyAld platform, accompanied by 2 other sales platforms / expansion of digital solutions offerings – Pop Go, ALD Share, ALD Move, etc. / security of information systems, developed internally;

– Environmental strategy aimed at reducing carbon emissions by 30% in 2025 vs 2019 – towards customers: from a single label: ALD bluefleet, which indicates more responsible services, ALD switch (electric or thermal / hybrid vehicles), ALD electric (integration of vehicles into fleets), upgrading of non-diesel vehicles and shared use (partnership with Blablacar, Klaxit, Drivy, etc.) / “green” loans for the acquisition of low-carbon vehicles;

– Partnership spin-off (Amazon in Spain, Tesla in 14 countries, Polestar in 3 and Mitsubishi in Malaysia) and diversification into flexible short-term rental and car sharing;

– Activity protected by the multi-year duration of lease contracts.

Challenges

– Towards the acquisition, effective in December 2022, of Lease Plan, for an amount of 4.9 billion euros 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 / which would reduce the stake held by Société Générale to 53%;

– Objective for 2022 of an increase in the financed fleet of around 3%, a unit resale margin of + € 1,000 and a distribution rate of 50 to 60%.

The negative effects of rising interest rates

Rising interest rates usually cause bank income to increase through loans. In Europe, according to a survey conducted by S&P of 85 banking institutions, the sector expects on average an 18% increase in its interest margin. However, this new inflationary environment also has undesirable effects, notably an increase in refinancing costs. It is also accompanied by the fear of a new recession, which would then affect all the bank’s activities, from loans to asset management, whose income is correlated to market valuations. Reassuring element: euro area banks are strong enough to cope with a deteriorating environment.

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