Leasing in Europe and Beyond State of Play and Outlook. Venice 4 October 2018

Transcription

1 Leasing in Europe and Beyond State of Play and Outlook Venice 4 October 2018

2 Agenda o Global Leasing Markets o European Leasing Market o Leased Assets & Customers o State of the Industry & Industry Performance o Strategic Issues and Outlook

3 Global Leasing Markets

4 Global Leasing Markets in 2017 Canada CFLA 26 bil 18% 4% US ELFA 248 bil -3% Japan JLA 38 bil -1% Brazil ABEL 2 bil New equipment leasing volumes. ELFA figures do not include passenger car leasing. Source: Leaseurope 2017 Annual Survey, local leasing associations, Leaseurope estimates, World Leasing Yearbook % Australia AFIA (AELA) 6 bil 4

5 Global Leasing Markets in % Canada CFLA 18% 4% 26 bil US ELFA Leaseurope 384 bil Japan JLA 248 bil -3% 38 bil -1% Brazil ABEL 2 bil New equipment leasing volumes. ELFA figures do not include passenger car leasing. Source: Leaseurope 2017 Annual Survey, local leasing associations, Leaseurope estimates, World Leasing Yearbook % Australia AFIA (AELA) 6 bil 5

6 European Leasing Market

7 % YoY Evolution of the European Leasing Market European leasing market - new volume growth (% YoY) Total outstandings: (2016 vs 2017) 25% 15% 5% 10.1% 9.4% 5.3% -5% -15% % -25% -35% Total volumes Real estate Real Estate Equipment including vehicles Equipment incl vehicles bil 14.7 bil bil Growth rates are calculated based on a homogenous sample of members reporting from year to year & are adjusted for exchange rate fluctuations 2007 onwards Source: Leaseurope Annual Surveys New volumes 2017

8 Annual growth of new leasing volumes per country 2016/ % European Leasing Market in 2016 Over 20% 10 to 20% 5 to 10% 0 to 5% -5 to 0% Under - 5% Members not reporting & non - members Source: Leaseurope s 2016 Annual Survey Growth rates are adjusted for exchange rate fluctuations

9 Annual growth of new leasing volumes per country 2017/ % European Leasing Market in 2017 Over 20% 10 to 20% 5 to 10% 0 to 5% -5 to 0% Under - 5% Members not reporting & non - members Source: Leaseurope s 2017 Annual Survey Growth rates are adjusted for exchange rate fluctuations

10 Biannual growth of new leasing volumes per country H1 2018/ % European Leasing Market in H Over 20% 10 to 20% 5 to 10% 0 to 5% -5 to 0% Under - 5% Members not reporting & non - members Source: Leaseurope Member Associations 24 Member Associations reporting; growth rates adjusted for exchange rate fluctuations

11 Leased Assets & Customers

12 European Leasing Market in 2017 Leased movable assets Share of new lease volumes per equipment category, % Other Big ticket ICT Machines & equip CVs Cars (PC) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: Leaseurope s Annual Surveys Based on the homogenous sample of 19 Member Associations reporting data in (excludes FI in 2017) Machinery is gaining share back Share of automotive assets on the rise ~70%

13 European Leasing Market in 2017 New lease volumes per asset type % period on period (2017/2016) 20% 15% 10% 5% Total 9.4% 20% 15% 10% 5% Real estate Movables 10.1% Machinery ICT CVs Cars Big Other 24.8% 14.9% 7.9% 9.9% 3.0% 3.5% 25% 20% 15% 10% 5% 0% 0% 0% -5% -5% -3.5% -5% -10% -10% -10% -15% -15% -15% -20% Growth rates are calculated based on a homogenous sample of members reporting from year to year & are adjusted for exchange rate fluctuations Source: 2017 Annual Survey based on 33 members reporting

14 European Leasing Penetration Share of equipment investment financed by leasing (2017) > 30% 25% to 30% 20% to 25% 15% to 20% 10% to 15% < 10 % NA Equipment penetration 27% Lease penetration is the share of total investment financed by leasing calculated as new leasing volumes (excluding consumers)/ gross fixed capital formation in equipment Based on data from Leaseurope s 2017 Annual Survey. Data for FI is an estimate based on The UK figures exclude BVRLA.

15 Normalised PR 1999 =100 European Leasing Penetration Evolution of leasing penetration in Europe 19 countries ( ) Total Equipment Real estate Lease penetration is the share of total investment (excluding residential real estate) financed by leasing calculated as new leasing volumes / gross fixed capital formation for the 19 associations reporting from Source: Leaseurope, Eurostat and AMECO (GFCF)

16 European Leasing Market in 2017 Leasing clients New movables leasing volumes by client sector (2017) Public sector 3% Other 3% Consumers 24% % movable leasing volumes Businesses 70% Source: Leaseurope s 2017 Annual Survey

17 Leasing to European SMEs The use of leasing grows with the size of the firm Leasing is the source of finance with largest proportion of SMEs signalling an increased need for it, similar since 2015 The same holds true across SMEs of various characteristics, especially for innovative, exporting, high-growth firms and gazelles Debt securities issued Equity Bank loans (excl. overdraft and credit lines) Trade credit Credit line/overdraft Other loan Leasing or hire-purchase Source: European Commission SAFE Survey, Apr. Oct Non-innovative 19% SMEs reporting an increased need in various forms of finance in the past six 11% SMEs months 15% (April to September 2017) in the EU-28 24% Innovative SMEs 16% 22% 10% 14% 18% 18% 19% 19% % of SMEs 22% 0% 10% 20% 30% Exporter Innovative SMEs Non-exporter Non-innovative SMEs Exporter Non-exporter High-growth SMEs 13% 18% 13% 24% 25% 17% 21% 20% 20% 15% 17% 15% 20% 13% 16% 23% 25% 35% Gazelles 27% 30% High-growth SMEs 22% 22% 27% 0% Gazelles 10% 20% 24% 30% 35% 40% 17% 0% 10% 20% 30% 40% Leasing or hire-purchase Equity Bank loans (excl. overdraft and credit lines) 8% 20% 24% 29%

18 State of the Industry & Industry Performance

19 2017 Ranking Survey results Value of total new contracts within Europe in 2017 ( bn) for TOP 20 firms Characteristics of European Market Players *These companies also have operations outside Europe Source: Leaseurope Ranking Survey 2017

20 Number of companies Characteristics of European Market Players Market concentration: % of total new volumes reported in 2017 Ranking Survey 60 All firms in Ranking All new volumes reported 156 bil TOP TOP 101 TOP 20 TOP 20 % of all new volumes reported 80% 0 0% 20% 40% 60% 80% 100% % of total new volumes reported in Ranking TOP 10 % of all new volumes reported 64% Source: Leaseurope 2017 Ranking Survey of Top European Leasing Companies, BCS June 2018

21 New business volumes bill Characteristics of European Market Players Distribution channels used by firms in 2017 Ranking Survey Direct sales the most popular distribution channel Vendors remain the most important of the various distribution channels by volume All partaking firms New volumes granted by all firms (LHS) Number of firms using channel (RHS) Source: Leaseurope 2017 Ranking Survey of Top European Leasing Companies

22 Lessors full or partial use of digital interface for client interactions - value of new contracts granted in 2017, % Characteristics of European Market Players 42% TOP 20 firms ALL firms in Ranking 15%* 20%** Fully digital Partially digital 48% 37% Non-digital 38% * When excluding outliers, average percentage of respondents falls from 15% to 5% (** from 20% to 7%) Fully digital - an online interface used directly by the end-customer and at a distance from the origination to the signing of the contract between this customer and the leasing provider (lessor). Partially digital - any part, but not all, of the contract is conducted online/on digital channel (e.g. first contact with the customer/signing of the contract, etc). Source: Leaseurope 2017 Ranking Survey of Top European Leasing Companies

23 Leaseurope Index The Leaseurope Index median ratios (2014-Q2 2018) 50% 40% Profitability ratio 39.8% 41.5% 44.0% 39.7% 47.7% 48.5% 50% 40% Cost / income ratio 46.8% 45.4% 45.9% 46.9% 47.4% 43.4% 30% 30% 20% 20% 10% 10% 0% 0% Q Q Q Q Cost of risk ratio 0.4% 0.38% 0.30% 0.26% 0.22% 0.20% 0.19% 0.2% Source: Leaseurope Index 0.0% Q Q2 2018

24 Leaseurope Index The Leaseurope Index median ratios (2014-Q2 2018) RoA RoE 2.0% 1.7% 1.9% 2.0% 2.1% 40% 35% 35.9% 35.2% 32.3% 40.9% 1.5% 1.6% 1.5% 30% 25% 28.6% 27.9% 1.0% 20% 15% 0.5% 10% 0.0% Q Q Source: Leaseurope Index 5% 0% Q Q2 2018

25 Leaseurope Index Leaseurope Index: Segment Survey 2017 An annual supplement to the quarterly Index Financial ratios: profitability, cost/income, cost of risk and return on assets Broken down by four asset types: equipment, real estate, passenger cars and commercial vehicles The 2017 survey is the seventh edition of the project

26 Index (2011=100) Index (2011=100) Index (2011=100) Index (2011=100) Index (2011=100) Leaseurope Index The Leaseurope Index Segment Survey median ratios ( ) Source: Leaseurope Index Equipment Passenger Cars Profitability Cost/income Cost of risk RoA Real Estate Commercial Vehicles

27 Strategic Issues & Outlook

28 Leasing as a service Strategic Issues and Outlook

29 Funding and securitization Strategic Issues and Outlook

30 Digitalization - scoring models Strategic Issues and Outlook

31 Strategic Issues and Outlook Digitalization - customer experience

32 Towards a sustainable environment Strategic Issues and Outlook

33 Circular economy Strategic Issues and Outlook

34 Robotics and artificial intelligence Strategic Issues and Outlook

35 The new international lease accounting standard IFRS 16 Strategic Issues and Outlook

36 Index value Business Confidence Survey Leaseurope/Invigors Business Confidence Index (BCI) Balance of expectations for business over next six months BCI is the unweighted mean of five key industry indicators, namely new business, margins, bad debt, net profit and companies prospects. Index values above 100 suggest an increased confidence in future business performance (or a net positive balance of expectations) over the next six months, while values below 100 indicate pessimism towards future performance (a net negative balance). Source: Leaseurope/Invigors Business Confidence Survey June 2018

37 Balance of expectations Balance of expectations Balance of expectations Balance of expectations Business Confidence Survey Balance of expectations for business over next six months 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% New Business Volumes Expectations of new business growth improving & remain strongly positive 5% 0% -5% -10% -15% -20% -25% -30% -35% -40% Margins Increase in expectations that margins will be squeezed 15% 10% Bad Debt Expectations on bad debt levels mostly stable, while those anticipating any change predict some growth in bad debt 70% 60% 50% Net Profit Increase in expectations that net profit will continue to grow 40% 5% 30% 20% 0% 10% 0% -5% Balance between respondents expressing positive and negative opinions of the outlook over the next six months Source: Leaseurope/Invigors Business Confidence Survey June 2018

38 Leasing in Europe and Beyond State of Play and Outlook Venice 4 October 2018