'Any car, anytime, anywhere' LeasePlan announces Strategic Update and strong Full Year 2017 results
AMSTERDAM, the Netherlands, 13 February 2018 - LeasePlan Corporation N.V. (LeasePlan; the "Company"), a global leader in fleet management and driver mobility, today reports strong Full Year 2017 results. LeasePlan also announces a Strategic Update to deliver 'any car, anytime, anywhere'.
Financial Highlights Full Year 2017
Underlying net result of EUR 532 million, up 17% year on year after EUR 40 million of incremental operating expenses to invest in long term growth
Net result of EUR 467 million, up 10% versus 2016
Underlying return on equity 16.7%, up 173 bps
Serviced fleet growth of 5.5% with 1.7 million cars on the road
'The Power of One LeasePlan' operational excellence programme delivered savings of EUR 130 million
Clear strategic focus on two large and growing markets in Europe:
'Car-as-a-Service' (CaaS) for new cars, a growing EUR 68 billion market
High-quality 3-4-year-old used car market, a growing EUR 65 billion market
LeasePlan is focused on leading the megatrend from ownership to usership to subscription in both the new and high-quality used car markets, and on ultimately delivering 'any car, anytime, anywhere'
Introducing CarNext.com: a disruptive B2C and B2B digital marketplace that enables customers to buy, lease and subscribe to high-quality used cars in Europe
Continuing to deliver 'The Power of One LeasePlan', a programme to drive operational excellence globally by implementing best practices and leveraging LeasePlan's scale along all elements of the value chain and across all LeasePlan countries. 'The Power of One LeasePlan' is targeting a EUR 370 million underlying profit before tax uplift in the medium term compared to the 2016 baseline
Launching LeasePlan Digital to transform the company from an analogue business into a fully digitally-enabled business, delivering digital services at digital cost levels, leveraging the latest digital intelligence technologies
Commitment to lead the transition from internal combustion engines to alternative powertrain fleets, targeting net zero emissions from LeasePlan's fleet by 2030
|2017||Y-o-Y growth||2016||Y-o-Y growth|
|Underlying net result (EUR million)||531.6||16.8%||455.3||7.1%|
|Net result (EUR million)||466.6||9.7%||425.5||-3.8%|
|Underlying return on equity||16.7%||14.9%|
|Serviced fleet (millions), as at 31 December||1.745||5.5%||1.654||7.9%|
|Number of FTE's, as at 31 December||6,660||7,116|
Tex Gunning, LeasePlan CEO:
"I am delighted to announce yet another excellent set of results for LeasePlan in 2017. We have more cars on the road than ever before, and at the same time, our underlying net result and return on equity continued to increase significantly. These results underline the strong and resilient nature of our business as well as the ongoing positive impact of our 'The Power of One LeasePlan' operational excellence initiative, which was successfully launched in 2017.
Looking ahead, we can achieve so much more. There is a clear megatrend from ownership to usership and subscription models taking place in both the new and high-quality used car markets. Increasingly, our customers - whether they are corporate, SMEs or private individuals - would prefer a 'Car-as-a-Service' with no strings attached in terms of car type or duration. They just want 'any car, anytime, anywhere'.
LeasePlan will lead this trend. With 1.7 million cars on the road in 32 countries, we are already a global leader in providing our customers with Car-as-a-Service for new cars - a business we will continue to invest in. We are also in a unique position to lead the growing €65 billion Car-as-a-Service market for high-quality 3-4-year-old cars thanks to the introduction of our new CarNext.com business. CarNext.com is a disruptive B2C and B2B digital marketplace that enables customers to buy, lease and subscribe to high-quality used cars in Europe.
Our leadership position across these two markets, as well as our continuing focus on operational excellence and cost control across the company, will be further enhanced by our new LeasePlan Digital programme. The objective of LeasePlan Digital is simple: to deliver best-in-class digital services to all our customers in all areas of our business at digital cost levels, leveraging the latest digital technologies. Ultimately, this is how we provide our customers with 'any car, anytime, anywhere'. This is what's next for LeasePlan."
LeasePlan's strategy is to continue to lead the megatrend from ownership to usership and subscription models taking place in both the new and high-quality used car markets, ultimately delivering 'any car, anytime, anywhere'. To support the delivery of its strategy, the company has established five pillars:
1. Continue to grow our Car-as-a-Service business for new cars
We will continue to grow our Car-as-a-Service (CaaS) business which encompasses subscription-based mobility solutions with integrated services. LeasePlan is a global leader in this EUR 68 billion3 growth market. Our approach will be to target disciplined profitable growth in the most attractive and service-intensive segments of the market: Corporate, SMEs and Mobility Platform customers. Within these segments, we will build on our current high-value offering with innovative new products and services in areas including repairs and maintenance, insurance, and low-emission vehicles. Going forward, LeasePlan's leadership position will be further enhanced by its growing digital capabilities, which will enable us to deliver a superior online and offline service to all our customers at digital cost levels. Looking further ahead, we also expect our Car-as-a-Service business to benefit significantly from other megatrends in the mobility space, such as the expected arrival of autonomous vehicles which will increase the need for the sophisticated fleet management services we provide.
The Car-as-a-Service market for new cars has grown every year for the last 15 years. Historically, CaaS penetration has been low, accounting for only 4.8% of the total European car parc in 20163. However, penetration is growing and represents a significant opportunity for future market growth. According to Roland Berger6, the CaaS market is expected to grow at approximately 5.2% CAGR from 2016 to 2025, mainly driven by the underlying megatrends of outsourcing and the general transition from ownership to usership to subscription. Forecasted CaaS market growth is expected to increase the CaaS penetration in the total car parc, reaching about 6.8% by 20253.