LeasePlan, the Dutch-based auto leasing provider, has published its results for its Q4 and full-year returns, saw its net results down 4.9% for 2019 against 2018, masking strategic investment in its disruptive digital platform for high-quality used cars.
For its full-year results, net results were down 4.9% against full-year 2018, but a significant bounce was noticeable in Q4 2019, which saw net results up 62.7% against Q4 2018, in what is widely considered a tough European and global market.
LeasePlan, which describes itself as a car-as-a-service company and pan-European used-car marketplace, said its underlying net result was down the full year by 3.4% (€557m; £473m) but up in Q4 by 17.2%.
On the leasing side, LeasePlan’s serviced fleet grew 2.4% in 2019 against 2018, “with continued growth in our core European markets which were up 3.7% offset by Rest of World, down 2.5% as a result of some service-only contract losses,” the company said.
Meanwhile, Q4 underlying lease and additional services gross profit up 7.1% (full year up 3.3%) due to fleet growth and strong damage services and insurance growth, the group said in a statement.
Investments in the LeasePlan’s CarNext.com platform and digital transformation weighed on the company’s bottom line. In July 2019, CarNext.com bought AutoManager.
The company said: “In scaling-up CarNext.com, we increased our operating expenses over the year by approximately €50m, mainly driven by marketing, our data-driven platform and our leading technology, for a total of approximately €100m in CarNext.com-related operating expenses in 2019.
The company also said year-on-year staff increases reflect hiring to support our long-term strategic initiatives CarNext.com and Digital LeasePlan.
Tex Gunning, chief executive for LeasePlan, said: “LeasePlan delivered a solid underlying net result of €557m, while making significant strategic investments in our operations, particularly in our fast-growing CarNext.com platform and digital transformation.
“The results are a proof point of our strategy to position our business for the shift from car ownership to car subscription services, and will ensure we are well placed to benefit from the accelerated growth in the market in the years ahead.
“Our Car-as-a-Service business for new cars, where we focused on disciplined profitable growth, grew steadily across all customer segments.
“The SME segment performed particularly well, supported by the rollout of our fully online SME showroom in eight countries, as did our insurance business, where we saw sales penetration increase to nearly half our serviced fleet.
“With time running out to tackle the climate emergency, LeasePlan is playing an active role in driving the transition to electric vehicles, which have an important role to play in cutting global emissions.
“Take up of our innovative EV solution, which includes charging infrastructure, was up sharply, especially in the corporate segment. The transition of our fleet to electric vehicles was supported by the launch of our inaugural Green Bond.