LeasePlan Corp.'s Net Profit Increases 14 Percent
Chart: LeasePlan Corporation N.V.
LeasePlan Corporation N.V., a worldwide fleet management and driver mobility company, has published its annual results for 2014. LeasePlan said it successfully continued along its strategic path for sustainable growth and profitability, focusing on further penetration of existing markets and selective geographic expansion.
“Guided by its mission to make fleet management and driver mobility easier, LeasePlan continued to make good progress in 2014 against the cornerstones of its sustainable growth strategy: growth, operational excellence, customer-centric innovation and right people and culture. In terms of performance indicators for the year, the results clearly demonstrate the benefits of the geographical diversity LeasePlan enjoys as a group, as well as the strengths the company is able to leverage across its value chain. Given the ongoing challenges in the operating environment, it is testament to the commitment and ingenuity of LeasePlan employees worldwide that the group is in a position to post these excellent results,” said Vahid Daemi, CEO of LeasePlan.
LeasePlan’s net profit for 2014 increased 14 percent to EUR 372 million compared to EUR 326 million in 2013. The company said it benefited from volume growth, the scale advantages of the business model, a combination of risk mitigating measures and a strong market for second hand vehicles. There is a high demand for well-maintained ex lease vehicles, particularly in mature European markets. Total assets increased to EUR 19.7 billion compared to EUR 19.1 billion at year-end 2013, mainly as a result of volume growth.
Increased customer confidence in several geographies led to a further rise in the number of vehicles under management, according to the company. The fleet rose to 1.42 million from 1.37 million at year-end 2013, above the pre-crisis (2008) record level of 1.39 million vehicles. In emerging markets such as Mexico and Brazil, LeasePlan saw continued growth with existing and new clients.
The LeasePlan companies in Romania, Greece, and Ireland also reported a substantial volume increase in the number of vehicles under management compared to 2013. LeasePlan International (LPI), a dedicated entity managing the accounts of large international clients worldwide, successfully grew its business with existing clients and secured important new contracts.
In 2014, LPI realized an incremental growth of 18,000 vehicles, which is approaching the pre-crisis level annual growth, reaching a total of close to 400,000 vehicles under management with international clients.
LeasePlan Canada opened for business at the beginning of 2014, leading to full coverage for clients who operate throughout North America. LeasePlan now provides a full spectrum of services in the US, Mexico and Canada which includes leasing, maintenance, repair, accident management and vehicle remarketing.
LeasePlan signed an agreement in November to acquire full ownership of LeasePlan Turkey. It currently manages a fleet of more than 14,000 cars and is one of the leading players in the Turkish fleet management industry. Completion of this transaction is expected shortly, according to the company. LeasePlan’s international network currently covers 32 countries across 5 continents.
LeasePlan continued to invest in innovative solutions to provide the best services for supporting car mobility. The company specifically targets growing market segments such as small and medium enterprises. LeasePlan Spain and LeasePlan Denmark have launched flexible short term leasing, according to the company.
During 2014, a significant focus area for additional services was insurance. The roll out of the new fleet insurance proposition “3D Coverage” brought this service to big fleets that traditionally contracted with generalist insurers. This product clearly demonstrated the substantial administrative benefits that can be gained when fleet management and fleet insurance are both carried out by a fleet specialist with extensive expertise in providing both services.
Also in 2014, LeasePlan further increased its focus on services for the individual lease driver. “My LeasePlan” is a user friendly mobile application that enables drivers to check the maintenance status of their vehicle and to report damages easily. LeasePlan noticed a growing interest from fleet managers in influencing driver behavior with regard to fleet optimization. Telematics services can play a vital role in this area.
LeasePlan’s fleet management expertise has helped fleet managers achieve demonstrable cost savings through an increased focus on fuel costs and a reduction of driver incidents and vehicle emissions. LeasePlan clients appreciated the efforts made to provide service excellence. The Annual Client Satisfaction Survey showed that 92 percent of all interviewed clients were (very) satisfied with the quality of service, according to the company.
LeasePlan witnesses an increased volatility of currencies, oil prices and interest rates in the financial markets and tough business competition in the mature geographies it operates in. Despite these uncertain factors, the company looks ahead into the first half of 2015 with cautious optimism.
LeasePlan said it expects the second-hand vehicle market to remain strong, in which trading environment, risk mitigation measures will continue to pay off. The company will continue to reap the benefits of the global scale of its operations, the resilience of its diversified income streams, its focus on customer satisfaction and its investment in innovative solutions and services.
* 2013 ratio as calculated under Basel 2 regime; 2014 ratio under Basel 3 regime (CRR/CRD IV)