Ayvens · EURONEXT:AYV
Ayvens — ALD — Investor Day (November 2020)
61 slides from Ayvens's investor day presentation, Nov 12, 2020
Slide 1: Capital Markets Day
Capital Markets Day 12 November 2020
Slide 2: Disclaimer
Disclaimer The information contained in this document (the “Information”) has been prepared by ALD (the Important factors that could cause actual results to differ materially from the results anticipated in “Company”) solely for informational purposes. The Information is proprietary to the Company a
Slide 3: Strong and experienced executive management team
Strong and experienced executive management team Today’s speakers Tim ALBERTSEN John SAFFRETT Gilles BELLEMERE Gilles MOMPER Hans van BEECK CEO Deputy CEO Deputy CEO CFO CAO 25 years of sector 14 years of sector 15 years of sector 13 years of sector 3 years of sector experience experience experience
Slide 4: Move 2025 – Our strategy
Move 2025 – Our strategy Become a fully integrated sustainable mobility provider and the global leader in the car leasing industry
Slide 5: More than ready to embrace the mobility (r)evolution
More than ready to embrace the mobility (r)evolution 2017 IPO 2020 2025 Cars become… Electrified Connected Shared Autonomous Trends Increasing switch New Mobility Solutions from ownership Digital car sales begin to scale Autonomous to usership 50% new car sales Subscription model 20% of kms travelle
Slide 6: Four pillars to Move for Customers, Growth, Good, Performance
Strengthening our competitive edge Become a fully integrated sustainable mobility provider and the global leader in our industry. Four pillars to Move for Customers Growth Good Performance Be recognised as the most Be the global leader in Place people and corporate Generate value over the innovative
Slide 7: Move for customers
Move for customers Continuously adapt our product offer to customer demand • Best-in-class digital tools for customer acquisition and experience • Develop and offer customised products and services • Be agile and flexible in order to capture growth opportunities • Become the reference for customer s
Slide 8: Move for growth
Move for growth Our established Full Service Leasing business has more room for growth • Geographical coverage is key for our Multinationals and large corporates customers • Employees of these companies constitute an untapped customer base with significant growth potential • Expansion of the SME seg
Slide 9: Move for good
Move for good Shaping the future of sustainable mobility Being a committed and 4 dimensions responsible employer to our sustainability Implementing approach responsible business culture & practices Reducing our internal environmental footprint 9
Slide 10: Move for performance
Move for performance Further improve our operating efficiency • Optimise middle and back office systems for a more efficient contract management and reporting • Continue to develop our scale to further decrease direct costs • Enhance the use of data to support business management and development • I
Slide 11: 2025 ambitions
2025 ambitions Move for Customers Move for Growth 2.3 15% Up to 50 c. C. CAGR 19-25 private lease & million contracts countries new mobility contracts Move for Good Move for Performance -40% 30% of new car Cost/income(3) 50-60% CO2 emissions for new deliveries to ratio down to Dividend payout contra
Slide 12: 2025 Strategic objectives (1|2)
2025 Strategic objectives (1|2) Contracts growth Consumer segment CAGR New mobility products +4.5% Total Contracts (1) (in million) c.2.3 Light Commercial Vehicle 1.7 1.8 1.5 Bolt-on acquisitions 2017 2018 2019 ... 2025 Private lease and New mobility products ALD Flex c. 15% Private lease and CAGR 1
Slide 13: 2025 Strategic objectives (2|2)
2025 Strategic objectives (2|2) Margins Increased services penetration To grow at least Enhanced data Leasing & Services in line with capabilities and scale to margins sustain margin growth Total Contracts Scale Financial Performance 2019 2020F 2025F Cost discipline Cost/Income ratio 46% 49.0% 50% t
Slide 14: What's under the hood?
What’s under the hood?
Slide 15: #1 ALD's business is not complex
#1 ALD’s business is not complex 15
Slide 16: We finance vehicles
We finance vehicles Acquisition price ALD financing costs 20,000 EUR 10 EUR/month Leasing contract margin Amount to be financed (4y) 20 EUR/month 10,200 EUR 960 EUR over 4y Residual value (4y contract) Customer financing costs 9,800 EUR 30 EUR/month Leasing contract margin is secured over the length
Slide 17: And provide a wide range of services around them
And provide a wide range of services around them New Vehicle Selection Reporting & Optimisation Registration & Delivery Driver Support Maintenance & Tyres Fuel & Services Insurance or Accident Management Services margin 960 EUR over 4y 20 EUR/month Services revenues are secured over the length of th
Slide 18: At the end, we sell them
At the end, we sell them Residual value (4y contract) Sale price 9,800 EUR 10,000 EUR Used car sales 200 EUR Used Car Sales result is subject to market conditions, ALD’s prudence and experience are key 18 NB: Figures are for illustrative purposes only
Slide 19: #2 How should I categorise ALD?
#2 How should I categorise ALD? 19
Slide 20: ALD's dynamics are substantially different from OEMs and banks
ALD’s dynamics are substantially different from OEMs and banks NOT an Auto stock NOT a Banking stock • ALD is predominantly BtoB • Unregulated commercial business • Demand for Full Service Leasing is not correlated to • Hedged against interest rates and currency movements demand for new cars • Servi
Slide 21: ALD is a Business Services company
ALD is a Business Services company ALD displays characteristics of top business services peers Corporate focus Income predictability Corporates represent 89% Average contract duration 42 of ALD fleet and are highly months and total margins diversified (top 10 clients correlated to fleet equal only 6
Slide 22: #3 How do interest rates impact ALD?
#3 How do interest rates impact ALD? 22
Slide 23: ALD's interest rate mechanism
ALD’s interest rate mechanism Matched-funding policy Contract Fixed at contract interest inception rate Leasing Hedging put in place contract (duration, currency, margin SG funding interest rate) Securitisation ALD funding rate Bonds 23
Slide 24: #4 How green is ALD?
_ “#4 How green is ALD?”
Slide 25: First mover in powertrain transition
First mover in powertrain transition Evolution of breakdown(1) of passenger car deliveries Trend ALD started implementing a policy aimed at reducing Diesel share as early as 2017 • Proven track record of reduction since the beginning Development of ALD comprehensive Electric offer with dedicated pro
Slide 26: A leader in low emission vehicles
A leader in low emission vehicles Accelerating growth, opening new opportunities BEV market share expected to increase at a ALD Group low emission (“green”) running fleet (‘000) – July 2020 steeper pace Electric vehicle penetration 14% 12% 10% 8% 6% 4% 2% 0% Source: Bloomberg NEF, Internal PitchBook
Slide 27: Full Service Leasing and Fleet management
Full Service Leasing and Fleet management a resilient business with significant growth potential
Slide 28: FSL and FM: a resilient and growing business
FSL and FM: a resilient and growing business Customers Good Growth Performance N°1 in Europe and widest coverage Favorable purchasing position with supplying partners Strong scale effect Strong operational efficiency throughout Diversification across geographies the value chain At the forefront of t
Slide 29: FSL and FM: strong financials showing resilience and efficiency
FSL and FM: a resilient and growing business Customers Good Growth Performance Strong financials showing resilience and efficiency CAGR 15-19: +10.0% 1.8 1.7 1.5 1.4 1.2 Total Fleet 2015 2016 2017 2018 2019 CAGR 15-19: +7.4% 568 556 564 512 Net income g.s. (in €m) 424 2015 2016 2017 2018 2019 Cost /
Slide 30: FSL and FM: organic growth and distribution channel evolution
FSL and FM: a resilient and growing business Customers Good Growth Performance Organic growth and distribution channel evolution Contracts evolution (organic) and segmentation (in ‘000 units) 1,765 ~2,200 +435,000 contracts 36% 37% +195,000 contracts 64% 63% +225,000 contracts 2019 2025 Direct Indir
Slide 31: FSL and FM: four customer segments
FSL and FM: a resilient and growing business Customers Good Growth Performance Four customer segments Geographical coverage Corporate clients growth Increasing demand for flexibility Reaching out to employees Consultancy New mobility solutions Partnerships Partnerships Outsourcing trend From ownersh
Slide 32: FSL and FM: large corporate accounts continue to drive growth
FSL and FM: a resilient and growing business Customers Good Growth Performance Large corporate accounts continue to drive growth Strong and loyal customers, providing Driving the expansion of our geographical steady and predictable revenue streams coverage Expected Growth potential remains significa
Slide 33: FSL and FM: growth in SME and consumer segments
FSL and FM: a resilient and growing business Customers Good Growth Performance Growth in SME and consumer segments underpinned by expanding partnership network OEM partnerships Bank & Insurance Retailers and tech companies Nurture existing partnerships Together offer a one-stop shop Access new marke
Slide 34: FSL and FM: consumers, white-labelled digital platform
FSL and FM: a resilient and growing business Customers Good Growth Performance Consumers: growth driven by white-labelled digital platform European Private Lease registrations (in M units) Increasing the reach of our offer with leading digital private lease platform 20-24 CAGR • Best in class dedica
Slide 35: FSL and FM: employees, leveraging corporate client portfolio
FSL and FM: a resilient and growing business Customers Good Growth Performance Employees: Leveraging our corporate client portfolio to widen our reach New, untapped customer segment with high growth potential Private • Reaching out to employees without company cars with an offer adapted to new worki
Slide 36: ALD Flex: new solution designed to answer demand for flexibility
FSL and FM: a resilient and growing business Customers Good Growth Performance ALD Flex: new solution designed to answer demand for flexibility Flexible product enabling optimisation of vehicle life-cycle ALD Flex and Pool fleet (‘000 units) • What’s new with ALD Flex? Flexible duration Choice of ca
Slide 37: The future is multi-cycle and multi-channel
The future is multi-cycle and multi-channel Remarketing
Slide 38: End of contract
Remarketing Customers Good Growth Performance 3 possible options Opportunities Challenges % 2020 Ambition 1 Sale to dealer Efficiency of the process Tighter margins 80% 65-70% End of contract Sale to Eligibility of vehicles 2 consumer Higher margins Refurbishment costs 15% 10-15% Target ~30% Used ca
Slide 39: ALD Carmarket remarketing platform
Remarketing Customers Good Growth Performance ALD Carmarket: our leading remarketing platform is key to optimise the sale of used cars Upcoming deployment Other countries 25% of Used car sales G7: 75% of Used car sales Overview By 2025 • Fully digital e-commerce state-of-the-art platforms (BtoC, Bto
Slide 40: Used Car Lease lowers residual value risk
Remarketing Customers Good Growth Performance Used Car Lease lowers residual value risk by extending the use of the asset Answer new mobility needs Example of monthly RV risk evolution Used Car Lease contracts (in % of acquisition price) (‘000 units) and optimise life-cycle management of cars 100% •
Slide 41: Multi-cycle lease optimising use of the asset
Remarketing Customers Good Growth Performance Multi-cycle lease optimising use of the asset over a longer period Extended asset lifecycle EV use case First lease Executive company car 2-3 y Second lease Used car lease to private customer 1-2 y Pool of shared cars for urban mobility Car sharing 1-2 y
Slide 42: Driving investment in our digital capabilities
Driving investment in our digital capabilities
Slide 43: Total incremental digital budget of 66 MEUR over five years
Driving investment in our digital capabilities Customers Good Growth Performance Total incremental budget of 66 MEUR over the next 5 years Customers Growth Objective Objective • Build Customer Obsession at all levels • Build a World Class Online Experience of the organisation • Further enhance our c
Slide 44: International Digital Framework
Driving investment in our digital capabilities Customers Good Growth Performance International Digital Framework: key differentiator for entering into new partnerships Polestar base case, leading high-end BEV brand State-of-the art customisable and modular digital framework • Recognised adaptable te
Slide 45: Data Capability programme
Driving investment in our digital capabilities Customers Good Growth Performance Data Capability programme: A strong competitive edge for ALD Important investments in data capabilities are critical for ALD to leverage its competitive edge Increase sales revenue Generate new business Offer a world-cl
Slide 46: Connected cars
Driving investment in our digital capabilities Customers Good Growth Performance Connected cars New products & services ALD has developed its own telematics solution together with PAY HOW YOU DRIVE Leveraging its partnerships with device suppliers, ALD collects and exploits data for its customers Cu
Slide 47: ALD Move smart travel assistant
Driving investment in our digital capabilities Customers Good Growth Performance ALD Move smart travel assistant supporting sustainable and flexible mobility solutions Personal Mobility Advice Flexibility and freedom of use • All-in-one solution for multi-modal mobility, beyond car leasing • Car sha
Slide 48: The electric mobility opportunity for ALD
The electric mobility opportunity for ALD “By 2025, EVs hit 10% of global passenger vehicle sales, rising to 28% in 2030 and 58% in 2040.” — Electric Vehicle Outlook 2020, Bloomberg New Energy Finance
Slide 49: Customer demand and reality of the market
The electric mobility opportunity for ALD Customers Good Growth Performance Customer demand and reality of the market Three main barriers to Battery Electric Vehicle (BEV) adoption Cars that have 1 the lowest impact on • Climate (global warming) • Environment (Public health) Range Less CO2 Less NOx
Slide 50: Range: a growing offer
The electric mobility opportunity for ALD Customers Good Growth Performance Range: A growing offer Ford Mustang Mach e 600 Km Volkswagen ID3 550 km Tesla 3 545 km Jaguar I-Pace 480 km Volvo XC40 Recharge 400 km + >400km range becomes Mercedes EQC 400 km an acceptable norm Nissan Leaf e+ 385 km Peuge
Slide 51: Infrastructure: fast growing public charging
The electric mobility opportunity for ALD Customers Good Growth Performance Infrastructure: Fast growing public charging infrastructure, but still perceived as a barrier Cumulative global installed charging infrastructure by category 80% of charging takes place at home or work Public Home and work M
Slide 52: Cost: convergence of TCO
The future of mobility is electric Customers Good Growth Performance Cost: Convergence of TCO makes electric vehicles more attractive Vehicle production costs will converge • Price of batteries decrease • Expected increasing cost of Internal Combustion Engine vehicles related to Euro7 regulation imp
Slide 53: ALD Electric: the end-to-end solution for EV
The electric mobility opportunity for ALD Customers Good Growth Performance ALD Electric: the end-to-end solution for EV Home charger Lease your electric vehicle with ALD full service lease Office charger Charging point including installation, Easy to charge at work, at home and can be leased on-the
Slide 54: Why are EVs an opportunity for ALD?
The electric mobility opportunity for ALD Customers Good Growth Performance Why are EVs an opportunity for ALD? Move away from the strict New Product price discussion development • Differentiating through • Positioning ALD as « trusted services advisor » in the context of • Developing a “consultant”
Slide 55: Our electric vehicles ambition
The electric mobility opportunity for ALD Customers Good Growth Performance Our electric vehicles ambition 30% of new contracts will be for EV (1) by 2025 -40% on CO2 emission for new contracts in 2025 vs 2019 (2) 50% BEV (1) by 2030 Ambition Ambition • ALD to remain above market average • ALD to re
Slide 56: Conclusion
_ Conclusion
Slide 57: ALD in 2025
ALD in 2025 What you need to remember Addressing all markets... ...with a broad product offer Extended asset lifecycle Mobility card ALD Flex First lease Second lease FSL ALD Move Car sharing Remarketing Fleet Management Innovative and evolutive Digitally and globally solutions for a changing market
Slide 58: Slide 58
Slide 59: Appendix
_ Appendix
Slide 60: Electric vehicles ambition
Electric vehicles ambition 30% of new contracts will be EV(1) by 2025 -40% on CO2 emission for new contracts in 2025 50% BEV(1) by 2030 vs 2019 (2) AMBITION : AMBITION : • ALD to remain above market average • ALD to remain below market average • Levers: customer segments, TCO-based approach, EV • Le
Slide 61: Digital platforms are driving the future of ALD growth
Digital platforms are driving the future of ALD growth Two types of platforms across ALD Value chain Leasing platforms Used-car platforms White Label ALD Leasing tools Remarketing of out-of-lease cars Available for Digital Banks & New OEM OEM Insurance mobility Wholesale Professionals Final users Pr