ALD Automotive presented its new five-year strategic plan ‘Move 2025’ during Capital Markets Day last week. CEO Tim Albertsen and members of the ALD Executive Committee gave an overview of the company’s ambitions and showed the main strategic, operational and financial objectives in the context of the new strategic plan.
Five years ago, ALD Automotive initiated its transition from a traditional leasing company to a provider of total mobility. ‘Move 2025 is a five-year plan to build on this and to seize medium and long-term growth opportunities. With this new strategic plan, ALD Automotive aims to respond even more effectively to the changing world of mobility. In doing so, we are increasing our strength to grow into a fully integrated, sustainable mobility provider and global market leader in our sector,’ confirms CEO Tim Albertsen.
Four strategic pillars
The strategic development of ALD Automotive is based on four strategic pillars:
- Move for Customers – Bringing the mobility of the future closer as an innovative mobility provider, through digitalisation, customisation, flexibility, excellent customer experience and a unique mobility brand.
- Move for Growth – Being a global leader in sustainable mobility solutions by increasing geographic coverage and client reach with new partners in the mobility sector, value-creating acquisitions and new mobility solutions.
- Move for Good – Focusing on people and corporate social responsibility.
- Move for Performance – Growing the business in a cost-effective way by creating value over the entire economic cycle.
The Move 2025 ambitions translate into four result areas for sustainable growth:
1. Full Service Leasing & Fleet Management
ALD Automotive is a solid company with significant growth potential in all four customer segments: multinationals and large companies, SMEs, business mobility users and individuals.
The total number of lease contracts managed by ALD Automotive is expected to be approximately 2.3 million in 2025, including growth through acquisitions. Both direct and indirect channels are expected to make a significant contribution to this growth, with a slightly higher growth rate for the latter, thanks to ALD Automotive’s successful digital platform for white label private leasing.
ALD Automotive is the No. 1 provider in Europe with the largest direct coverage worldwide, and plans to further expand its geographic presence, including in Asia. The ultimate aim is to cover 50 countries in line with the location of major business customers.
Other important organic growth areas are private leasing and alternative mobility solutions such as ALD Flex, occasion leasing, ALD E-bike and ALD Move, which are expected to grow at an annual growth rate of approximately 15% over the period 2019-2025, with a high growth forecast for ALD Flex (up to approximately 60,000 vehicles in 2025) and the leasing of used lease cars (expected number of vehicles approximately 125,000 in 2025).
2. The future is multicycle and multichannel
Move 2025 creates a shift in the ALD business model; vehicles remain in the leasing process for longer, sometimes even for their entire life cycle. Based on a market-driven pricing strategy for ‘multicycle’ leasing, ALD sees many opportunities for growth in used car sales and multichannel distribution.
ALD Automotive expects approximately 30% of used vehicles to be sold or leased to private individuals by 2025, bringing occasion leasing up to a total of approximately 125,000 vehicles. This development creates strong growth and margin opportunities while reducing the residual value risk.
ALD Carmarket for consumers, based on clicks (online sales) and bricks (physical locations), is being implemented in 25 countries to support these ambitions. In addition, the company benefits from ALD Automotive’s advanced digital platforms and network of physical showrooms.
3. Invest more in digital opportunities
A budget of € 66 million will be made available over the next five years for digital investments in all four strategic pillars. This will increase the share of investment in digital solutions from around 20% of operating costs in 2017-2019 to around 23% in 2020-2025.
4. Electric mobility as an opportunity for ALD Automotive
As a leader in the shift to electric vehicles, ALD Automotive assists customers in their transition to a greener fleet through a TCO approach, an all-inclusive EV offer, targeted EV partnerships and a global EV programme. Internationally, the share of electric vehicles as a percentage of newly delivered vehicles is expected to rise to around 30% in 2025. ALD Automotive aims to have around 50% of its new vehicles 100% electric by 2030. As a result, the average CO2 emissions per vehicle for new contracts in 2025 are expected to be at least 40% lower than in 2019.
Strategic operational and financial objectives of Move 2025
- The total number of contracts is expected to be approximately 2.3 million in 2025, including acquisitions.
- Margins on lease contracts and services will increase at least in line with the total number of contracts over the period 2019-2025, thanks to a higher penetration rate for services and economies of scale.
- The Cost-to-Income ratio (excluding the result from used car sales) will improve to between 46% and 48% in 2025, including the additional digital investments of € 66 million over the 2020-2025 period.
Sustainability and non-financial goals for 2025
ALD Automotive has a four-dimensional sustainability approach to support its corporate social responsibility strategy and ensure that its business activities contribute positively to society.
- Shaping the future of sustainable mobility:
o low emission fleet: 40% less CO2 emissions compared to 2019
- Being a committed and responsible employer:
o a score of 80% for employee engagement
o a minimum of 35% women in board positions
- Ensuring a responsible corporate culture and responsible business practices:
o ESG criteria embedded in all guidelines, procedures and controls with external stakeholders
o Improve NPS customers >40%
- Reduce own footprint by 30% compared to 2019