LeasePlan reported a 27.1% drop in its underlying net result for 2020, which CEO Tex Gunning described as “solid… despite exceptionally challenging circumstances”.
Full-year results for Europe’s largest vehicle leasing and fleet management company showed a final underlying net result of €405.7m, down from €556.5m in 2019.
Its net result fell by 37.3% from €403m to €252.5m and underlying return on equity from 15.2% to 10.3%.
Underlying lease and additional services gross profit was €1,377m, down 10.2%. Leaseplan said it was impacted by reduced income, rebates and bonuses from lower business activity, increasing costs for expected credit losses and “only partially offset by strong damage services and insurance results”.
The company’s serviced fleet remained virtually static, falling by 0.7% to 1.85m vehicles. “The lockdowns increased demand for e-commerce related delivery vehicles and we saw strong growth in our private lease fleet,” said Gunning (pictured above).
“Covid-related supply chain constraints slowed overall growth and had a negative impact on volume-related rebates and bonuses. Given the economic impact of Covid on our customers, we also had to take provisions for expected credit losses.”
Profits from the company’s traditional car-as-a-service products fell by 19.7% from €605.2m to €485.8m, while operating expenses rose by 1.8% to €856m (+1.8%) due to investments “in growth and digital platforms”.
That was significantly better than its CarNext online used car sales platform, which fell by 64.6% from -€48.7m in 2019 to -€80.1m in 2020. LeasePlan closed the UK arm of CarNext in September, after two years of operation and continued losses.
Despite this, Gunning’s statement said CarNext “performed well with online sales more than doubling and revenues up over 15%, with customers showing strong demand for our new range of e-commerce services, including virtual car appointments and click & collect, as well as our expanding range of ancillary services.”
He conceded that retail used car sales were lower in 2020 due to closures of the company’s physical sites, but added that stronger used car values later in the year brought prices back to or above pre-Covid levels. The latter helped to increase its passenger vehicle and end-of-contract fees gross profits by 13.1% to €41m.
Gunning said 2020 was “the greenest year in the history of LeasePlan” and said electric and plug-in hybrid vehicles accounted for 16.5% of its new orders.
“We will continue to advocate for accelerated growth in public charging infrastructure and long-term incentives for green driving, ensuring EVs become the common sense choice for all drivers,” he added.
