Q1 net result shows LeasePlan resilience, says CEO
LeasePlan Corporation NV has announced its Q1 2020 results as it outlines its resilience to the coronavirus crisis and underscores its customer support.
The leasing and fleet management giant posted a net result of €20m (£17.7m) after deducting €87m (£77.1m) charges due to an inventory valuation allowance and a lease contracts impairment triggered by Covid-19.
Its underlying net result of €115m (£102m) was impacted by lower PLDV in March due to Covid-19 and further significant strategic investments in CarNext.com.
Within the Car-as-a-Service leasing division, the serviced fleet grew 1.8% in Q1 to 1.86m vehicles, contributing to an underlying net result of €137.9m (£122.3m), down 13.3% on Q1 2019.
For the CarNext.com used car marketplace, B2C retail sales were up 33% to 11,400 vehicles. Underlying net result fell 145.7% to a loss of €23m (£20.4m), including €17m (£15.1m) further strategic investments to accelerate future growth
Commenting on the first quarter’s results, CEO Tex Gunning said: “LeasePlan has delivered decades of profitability, even throughout the financial crisis, in a market that has been resilient for more than 50 years. Our underlying net result of €115m for the first quarter is a testament to the strength and resilience of our business, our high-quality customer base, and the contractually recurring nature of our business and income streams, and includes further significant strategic investments in our operations and CarNext.com.
“Today we find ourselves in unprecedented times, with the Covid-19 pandemic causing significant disruption to the global economy. LeasePlan has gone through economic crises before and has proven the resilience of its business model and profitability. As a regulated business, our experienced team was well prepared to manage the impact of the Coronavirus and took swift and decisive steps to ensure the safety of our employees and minimize the impact on our business and customers.”
Gunning stressed that the business was continuing to support customers by offering contract extensions on current vehicles or vehicles from CarNext.com. It’s also set up programmes to support customers in the smaller SME and private segments.
“Looking ahead, we have established a ‘What’s next’ team to prepare for life after the crisis and ensure we continue to capitalize on the long-term ownership to subscription megatrend that has been driving the structural growth of our industry for the past 50 years. This will be accelerated by our ongoing Digital LeasePlan transformation, which is enabling us to build a fully digital operating model, delivering digital services at digital cost levels,” he commented.