Leasing in Europe & Beyond: State of Play & Outlook. Barcelona October 2014

Transcription

1 Leasing in Europe & Beyond: State of Play & Outlook Barcelona October 2014

2 Agenda 1 - Leasing in Europe & beyond 2 - State of the industry 3 - Industry performance 4 - Outlook for the future

3 Leaseurope pays tribute to Michael J.Fleming President, ELFA

4 1- Leasing in Europe & beyond

5 Global Leasing Markets in 2013 Canada 8% 5% CFLA 17 bil US ELFA 186 bil -11% 1% Brazil ABEL 4 bil New equipment leasing volumes. ELFA figures do not include passenger car leasing. Leaseurope 252 bil Source: Leaseurope 2013 Annual Survey, local leasing associations, Leaseurope estimates China CLBA 239 bil Australia AELA & AFLA 32 bil Japan JLA 40 bil 8% 33% -13% 5

6 Policy Uncertainty US Equipment sector confidence has shown a strong inverse relationship with policy uncertainty Equipment sector confidence is at a two-year high U.S. Downgrade Fiscal Cliff Govt. Shutdown Equipment sector confidence fell during the government shutdown Congress passed a budget in mid December 13, which has helped policy uncertainty subside Source: Macrobond Financial; Equipment Leasing & Finance Foundation

7 US Government spending to tax revenue The current deficit has resulted both from accelerating spending and falling tax revenue. Eisenhower Kennedy Johnson Nixon Ford Carter Reagan Bush I Clinton Bush II Obama

8 % YoY Evolution of the European Leasing Market European leasing market - new volume growth (% YoY) 25% Total outstandings: (2012 vs 2013) 0.5% 15% 5% -5% % -15% 0.7% -25% -17.4% -35% Total volumes Real Estate Equipment incl vehicles bil 13.5 bil bil New Volumes 2013 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

9 Annual growth of new leasing volumes per country 2013/ % European Leasing Market in 2013 Over 10% 5 to 10% Members not reporting & non - members 0 to 5% -5 to 0% -10 to -5% Under - 10% Leaseurope s 2013 Annual Survey Growth rates are adjusted for exchange rate fluctuations

10 European Leasing Market in 2013 Leased assets Total new lease volumes per asset category, % 6% 11% % Real estate Machines & equip 6% 10% % 16% CVs Cars 16% 7% 43% ICT Big/other 5% 45% Source: 2013 Annual Survey 63% Automotive

11 European Leasing Market in 2013 New lease volumes per asset type % period on period (2013/2012) Machinery ICT CVs Cars Big Other 20% Total 20% Real estate Movables 25% 20% 15% 15% 15% 10% 5% 0.7% 10% 5% 1.9% 10% 5% 5.2% 5.0% 0% -5% 0% -5% 0% -5% -1.9% -0.3% -10% -15% -10% -15% -17.4% -10% -15% -20% -7.4% -8.8% Growth rates are calculated based on a homogenous sample of members reporting from year to year & are adjusted for exchange rate fluctuations Source: 2013 Annual Survey based on 33 members reporting

12 European Leasing Market in 2013 Regional performance by movable asset category New business growth - annual % change (2013/2012) 60% 40% 20% 0% -20% -40% Germany UK France Italy Mediterranean Benelux, AT & CH CEE Nordic & Baltic countries Russia -60% -80% -100% -120% Machinery & Industrial Equipment ICT Big Other Growth rates are calculated based on a homogenous sample of members reporting & are adjusted for exchange rate fluctuations Source: Leaseurope 2013 Annual Survey

13 European Leasing Market in 2013 RE leasing vs total leasing by region (2013/2012) 80% 60% 40% 20% 0% -20% -40% Germany France Italy Mediterranean Benelux, AT & CH CEE Nordic & Baltic countries Russia Real estate Total Growth rates are calculated based on a homogenous sample of members reporting & are adjusted for exchange rate fluctuations Source: Leaseurope 2013 Annual Survey * Real estate for IT includes some renewable energy assets

14 European Leasing Market in 2013 Regional performance automotive sector New business growth - annual % change (2013/2012) 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Benelux, AT & CH Germany UK France Italy Mediterranean CEE Nordic & Russia Baltic countries Leaseurope (2013) New business 6.8 million units 129 billion 36.8% of new car sales Fleet 16 million units Passenger cars Commercial vehicles Growth rates are calculated based on a homogenous sample of members reporting & are adjusted for exchange rate fluctuations Source: Leaseurope 2013 Annual Survey

15 European Leasing Penetration Share of equipment investment financed by leasing (2013) > 30% 25% to 30% 20% to 25% 15% to 20% Equipment penetration 22% 10% to 15% < 10 % NA Lease penetration is the share of total investment financed by leasing calculated as new leasing volumes (excluding consumers)/ gross fixed capital formation in equipment

16 European Leasing Market in 2013 Leasing clients New movables leasing volumes by client sector (2013) Public sector 3% 2% Other Consumers 22% % movable leasing volumes Businesses 73% Source: 2013 Annual Survey

17 2- State of the industry

18 Characteristics of European Market Players Rank Company name 1 Country New business 2013 ( bil) Société Générale Leasing Solutions (incl. ALD Automotive) France 11,966,354 2 BNP Paribas Leasing Solutions (incl. Arval) France 11,920,580 3 Volkswagen Leasing Germany 10,366,097 4 De Lage Landen Netherlands 9,735,033 # of European countries 29 * * * 5 UniCredit Leasing Italy 8,807,820 6 Deutsche Leasing Germany 7,387,000 7 Nordea Finance Sweden 5,089,070 8 LeasePlan Corporation N.V. Netherlands 4,460,192 9 Alphabet Germany 4,292, OJSC VEB Leasing Russia 4,154, Credit Agricole Leasing & Factoring France 4,002,907 Companies with volumes > 4 billion are shown here, incl. number of countries inside Europe in which they operate *These companies also have operations outside Europe (e.g. in 2013, DLL granted 11 billion in new volumes outside Europe) Source: Leaseurope s Ranking Survey 2013 of Top European Leasing Firms * * * *

19 U.S. industry impact from new regulation Regulatory Landscape Financial Stability Oversight Council SEC CFTC FINRA Office of the Comptroller of the Currency Federal Reserve Office of Financial Research Consumer Financial Protection Bureau FDIC Investment Advisory Derivatives Consumer Lending Commercial Lending Broker- Dealer Retail Banking Alternative Investments Investment Banking Payment and Clearing Systems New Agency Old Agency Old Agency with New Powers Can Request Information, but No Examination Authority

20 # of firms reporting Characteristics of European Market Players Market concentration: % of total new volumes reported in 2013 Ranking Survey 80 New entrants unlikely Trends: Some large firms downscaled Consolidation amongst existing top players All firms in Ranking All new volumes reported 130 bil TOP 20 TOP % 20% 40% 60% 80% 100% % of total new volumes reported in Ranking TOP 10 TOP 20 % of all new volumes reported 60% % of all new volumes reported 81% Source: Leaseurope 2013 Ranking Survey of Top European Leasing Companies

21 New business volumes bill New business volumes bill Characteristics of European Market Players Distribution channels used by partaking firms in 2013 Ranking Survey All firms From 33% to 34% of new volumes From 33% to 32% of new volumes TOP 20 firms New volumes granted by all firms (LHS) Source: Leaseurope 2013 Ranking Survey of Top European Leasing Firms Number of firms using channel (RHS) New Volumes granted by TOP 20 (LHS)

22 3 - Industry performance

23 Characteristics of European Market Players The Leaseurope Index median ratios (Q Q2 2014) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Profitability ratio 36.1% 39.0% 31.9% 37.1% 29.8% 41.2% 45.2% 2013 Q Q Q Q Q Q (full year) 60% 50% 40% 30% 20% 10% 0% Cost / income ratio 46.8% 45.0% 45.3% 46.4% 49.4% 45.0% 43.7% 2013 Q Q Q Q Q Q (full year) 0.8% 0.6% 0.4% 0.2% 0.0% Source: Leaseurope Index Cost of risk ratio 0.5% 2013 (full year) 0.5% 0.5% 0.5% 0.7% 0.4% 0.3% Q Q Q Q Q Q2 2014

24 Characteristics of European Market Players The Leaseurope Index median ratios (Q Q2 2014) RoA 2.0% 1.8% 1.8% 40% 35% RoE 34.2% 1.6% 1.4% 1.2% 1.0% 0.8% 1.0% 1.3% 1.4% 1.3% 1.0% 1.4% 30% 25% 20% 15% 24.2% 25.5% 22.3% 25.5% 16.5% 25.2% 0.6% 0.4% 0.2% 10% 5% 0.0% 2013 (full year) Q Q Q Q Q Q % 2013 (full year) Q Q Q Q Q Q Source: Leaseurope Index

25 4 - Outlook for the future

26 Biannual growth of new leasing volumes per country European Leasing Market in H H1 2014/ % Over 10% 5 to 10% Members not reporting & non - members 0 to 5% -5 to 0% -10 to -5% Under - 10% Source: Leaseurope Member Associations 29 Member Associations reporting; growth rates adjusted for exchange rate fluctuations

27 % Survey respondents European Leasing Market in 2014 Profitability is recovering slowly Past Expectations H Expectations for H % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Survey date Decrease No change *% change period on same period a year ago Source: Business Confidence Survey, June 2014; Leaseurope Index Q Q Q Pre-tax profit (% change*) 16.0% 15.1% Profitability ratio % 32.7% 33.3% Increase 58% of respondents expect profit June '12 Dec '12 June '13 Dec '13 June '14

28 European Leasing Market in 2014 Balance of expectations for business over next six months New Business Volumes Margins Bad Debt Net Profit Balance between respondents expressing positive and negative opinions of the outlook over the next six months Source: Leaseurope/Invigors Business Confidence Survey June 2014

29 Concluding remarks The European market is one of the largest leasing markets in the world. Leasing plays a central role at the heart of the real economy. Future trends Develop services and solutions (mobility ) Finance new markets (cloud, third platform, new energy ) Foster innovation (big data ) Asset focus and specialisation (new energy ) Support customers and vendors globally Looking ahead, the European leasing industry must be a at the forefront of innovative financing solutions in order to take advantage of the shift from ownership to usage

30 Leasing in Europe & Beyond: State of Play and Outlook Barcelona October 2014