ALD CEO Mike Masterson manages diesel challenges to target 10% fleet growth

Gross operating income for the first quarter, of €328.7 million, was little changed from Q1 2017’s €328.4 million.

A strong performance in leasing contract and services margins made up for a drop in used car sales revenues, partly caused by falling diesel prices as consumer attitudes change towards the fuel.

Pressure on the resale prices of diesel cars in Western Europe pushed average margins for used cars down to €417, compared to €747 a year ago, although pricing was still above the expected full-year guidance range of $200-400 per vehicle.

The number of used cars sold in Q1 2018 was around 71,000, up from 64,000 for the same period in 2017.

Overall, the car sales result for the quarter was €29.6 million, down €18.2 million compared to last year.

New vehicle sales are also being disrupted by changing model preferences and a shift in powertrains, typically away from diesel and towards petrol or newer technologies, such as plug-in hybrids and electric vehicles, which has caused lengthening delays in deliveries.

In addition, impairment charges on receivables were up from a record low of €5.3 million to €6.4 million year-on-year.

The firm reported that leasing contract and services margins improved on the back of fleet growth. They rose by 6.6% year-on-year and represent 91% of gross operating income for the business.

ALD Automotive also reported strong growth in private leasing, with the fleet reaching 84,000 vehicles, a rise of 7.9% over the quarter.

Masterson added: “Financial performance in Q1 is in line with our guidance for 2018, which we are confident of achieving thanks to our leadership position and the rigorous management of our costs and risks. ALD is determined to pursue its strategy of delivering sustainable growth, building on its constant customer focus and backed by the service excellence of its teams.”

ALD Automotive reported growth from all regions, including the Netherlands, where it recently signed a leasing partnership agreement with Mazda.

From next month, ALD Automotive will provide white-labelled operational leasing services for Mazda’s entire range of leasing products in the country, delivered through the dealer network.

Geraldine Brouwers, managing director, Mazda Motor Netherlands, said: “ALD Automotive has a lot of experience as a captive partner for importers and dealer networks. They are a highly professional partner and offer customised solutions for our dealers.”

This new agreement reinforces the existing successful partnership between the two companies as ALD Automotive also provides full service leasing services for Mazda through its dealership networks in Spain and Italy.

ALD Automotive now has over 120 agreements in place with 10 car manufacturers in 31 countries and more than 25 banking partners in 17 countries.

ALD Automotive has been operating in the Netherlands for 16 years and manages more than 42,000 vehicles. The company was awarded best leasing company in the Netherlands in 2016 in the Ilisia fleet owner benchmark survey and by VZR, the Dutch association of lease-car drivers, in 2017.