LeasePlan considers IPO after strong first half results

LeasePlan, one of the world’s biggest vehicle leasing companies, is considering a stock market launch as part of its future strategy following a strong performance in the first half of 2017.

An Initial Public Offering is being considered as one of several strategic initiatives, with the company saying further updates will be provided as plans develop.

The company’s lease revenues grew to more than €3.2 billion in the first six months of 2017, a €190 million increase compared to the same period in 2016, as the fleet rose 5.7% to more than 1.7 million vehicles.

Fleet growth was fuelled by continued fast growth of its SME business, several new international clients and smaller corporate client wins.

Underlying net profits were up 18.2% to €291.7 million, while underlying overheads fell by 5.6% to €419.1 million as a result of the early benefits of the Power of One LeasePlan, a global programme of operational improvements across the business.

Tex Gunning, CEO of LeasePlan, said: “LeasePlan delivered yet another strong set of results in the first half of 2017, highlighting again the strong growth, cash flow generation and resilient nature of our business.

“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.

“These strong results further demonstrate the positive impact of our ‘Power of One LeasePlan’ operational excellence initiative, which was successfully rolled out during the first half of 2017.

“This initiative enables us to leverage the strength of our organisation across all LeasePlan countries, the value chain and our functional competencies – enabling us to quickly unlock significant additional value for our customers and investors.”

LeasePlan reported that growth was achieved across all regions and segments. Particularly strong contributions came from major Western European countries including the Netherlands, Germany, Italy and Portugal.

Higher profit contributions came from core income streams of fees and interest margin, lease services and especially insurance.

Gross profit from insurance sales increased by €25 million compared to the same period last year to €119.9 million.

The insured fleet has grown by 8.5% to 686,150 units, while operational efficiencies included insourced claim handling and greater control over choosing damage repair suppliers.

It is also reshaping its remarketing business with an increased focus on direct sales to consumers, with the launch of car remarketing stores in Poland and the Netherlands in the past six months, bringing the total network to 11.

In the first half of 2017, LeasePlan sold approximately 168,000 second-hand cars via all channels, including the increased use of digital platforms.

The company also announced that as part of a drive to develop new digital services, a new LeasePlan Digital organisation will be led by Michel Alsemgeest, who will join the company as chief digital officer on 1 October 2017.