Société Générale reveals auto and equipment finance results for 2020

In a joint statement, Jochen Jehmlich (pictured above), chief executive officer, and Odile de Saivre (pictured below), deputy chief executive officer of SGEF, said: “Throughout 2020, we have been able to keep the same level of service everywhere, whatever the situation in each country. Our day-to-day focus has been dealing with deferral requests, managing governmental support plans, adapting to compulsory moratoriums, adjusting to cash management strategies, overcoming delivery issues and developing innovative financing solutions.

“One of our main transversal initiatives to support our clients and partners’ investment plans was the launch of the #StrongerTogether programme. The objective was to offer flexible financing to help convert frozen pipelines into funded deals and stimulate the restart of the businesses. In total, €1 billion (£870 million) was made available throughout SGEF network.”

The equipment finance subsidiary revealed that it had around €23.7 billion (£20.55 billion) in outstandings in 2020, resulting in a 9.9% decrease from the €26.3 billion (£22.81 billion) of outstandings in 2019.

Furthermore, the company’s operations expanded to include 35 countries across the globe compared to 32 in 2019. Despite this, the company greatly reduced its staff to 1,400 employees from 2,500 in 2019.

Top of the table

According to the latest Asset Finance Europe 50 (AFE50), Société Générale entered 2020 in a position of strength that helped it prepare for the toughest year in the industry’s history.

The report revealed that total business equipment and vehicle lease receivables of the 50 largest asset finance companies stood at €314 billion as the industry entered 2020. With the top 50 firms accounting for around 85% of the market, the total value of business equipment and vehicle lease receivables in 2019 was an estimated £371 billion.

Société Générale maintained its position at the top of the table, reaching €31.639 billion of lease receivables in 2019, marking a 4% decrease from the previous year. This stood it €1.61 billion ahead of its nearest competitor.

Jehmlich and de Saivre continued: “The COVID-19 crisis has raised awareness around environmental responsibility. We anticipate an appetite for green assets in the coming years that we are looking forward to. Over the next 5 years, we intend to focus a growing share of our finance portfolio on sustainable business in green and social segments: energy efficiency, electrification, low-emission transport solutions, healthcare, and education. Circular economy will also be an integrated business concept in our asset life-cycle management approach to ensure that resources are used and reused in an ecological and environmental positive way.

“The global economy is uncertain, and we will face many challenges in 2021. But we are optimistic. Our leadership position, recently reaffirmed by Asset Finance International (#1 in the Asset Finance Europe 50 ranking), reinforce us in our conviction: being a sustainable solution provider beyond equipment finance serving the real economy.”

Leaving the comfort zone

In comparison, Société Générale’s auto finance subsidiary, ALD Automotive, revealed its end of year results for 2020.

According to the firm, total contracts remained stable in 2020, only decreasing by 0.4% to 1.76 million operational vehicle leasing and fleet management contracts, illustrating the resilience of its business model. The total contracts consisted of 1.37 million full-service leasing contracts and 386,000 fleet management contracts.

This resulted in a 2.1% decrease in net banking income to €1.74 billion (£1.5 billion) compared to 2019. The company managed to limit this decrease by achieving a record volume of used car sales at 305,000 units, equaling a €61.1 million (£52.8 million) result.

Tim Albertsen (pictured above), chief executive officer of ALD, explained: “2020 has pushed companies and individuals out of their comfort zones. At ALD, we have quickly adapted our ways of working with customers and partners to launch new products and services.

“Our operating and financial performance in 2020 was strong despite inclusion of several provisions reflecting potential upcoming risks. Our remarketing tools have once again proven their efficiency and delivered a record performance. In the current context, ALD stays open to opportunities while paying careful attention to costs.”

The company also announced that 2020 had been a “landmark year for green powertrains”, now representing some 23% of ALD’s passenger vehicle deliveries globally, compared to 13% in 2019.

Broken down by geography, 24% of ALD’s passenger vehicle deliveries in the EU, UK, Norway and Switzerland had “green powertrains”, marking an increase on the 20% target provided at the start of the year.

Albertsen added: “Although 2021 continues to bring its lot of uncertainty, we are confident we are on the right track to deliver our Move 2025 strategic plan which positions ALD at the heart of the evolving mobility world and strengthens our competitive edge to become a fully integrated sustainable mobility provider and the global leader in our industry.”