Excellent financial performance positions De Lage Landen well for future growth
• Net profit up 14% to €234 million
• De Lage Landen outperforms global competition
• Fifth consecutive year of double-digit net profit growth
Eindhoven, the Netherlands, 13 March 2008 — Backed by an excellent 2007 financial performance in a tough market environment, De Lage Landen has equipped itself for continued future growth. “Our in depth knowledge and the excellent performance of our members contributed heavily to this double digit growth in 2007,” stated CEO Karel Schellens. “We successfully concluded strategically important acquisitions in the Nordic and Central Eastern Europe regions, implemented a global business unit structure and made strong progress in our efforts to increase efficiency and consistent service delivery by standardizing systems and processes worldwide.”
De Lage Landen managed to continue its strong performance of recent years. Net profit grew from €206 million ($259 million) to €234 million ($321 million). The lease portfolio increased by €1.8 billion ($2.6 billion) to €20.7 billion ($30.5 billion). This represents a 9.6% increase compared to the year-end volume of 2006. De Lage Landen’s business units Athlon Car Lease and Financial Institutions were the main contributors to this performance. Athlon Car Lease outperformed the market significantly.
Global company
Over the last years, De Lage Landen has become a real global company, in terms of both its geographical reach and the composition of its member community. Today, over 2% of the company’s member population is carrying out expat-assignments and the Eindhoven office for example employs members from 29 different nationalities. De Lage Landen has gained a lot of experience in structuring and managing global joint ventures with its vendor partners and is currently using these skills and capabilities to expand its own businesses.
Vendor finance
In the 4th quarter of 2007, De Lage Landen acquired IT Finans AS, a Norwegian broker company as well as Siemens Leasing Kft. and Siemens Finance Zrt. in Hungary. IT Finans is originally known as a provider of finance solutions in the home-PC market, but has also developed strongly into typical De Lage Landen business segments. With this acquisition, De Lage Landen significantly strengthened both its market share and presence in the Nordic region. In Central and Eastern Europe, De Lage Landen had already successfully started activities with Cargobull Finance, its joint venture with Schmitz Cargobull. The Siemens acquisition positions De Lage Landen very well to enter other strategically important industry segments in this region, such as Office Equipment, Technology Finance, Materials Handling, Food & Agri and Healthcare. In its Dutch home market, De Lage Landen unit Financial Institutions achieved record-breaking new business volume in equipment lease, surpassing the €1 billion mark for the first time.
Car lease
De Lage Landen invested significant effort in the integration of Translease and Athlon Car Lease in the Netherlands. This is expected to be concluded in 2008. Meanwhile, car lease maintained both its commercial and customer focus in 2007. Car lease showed an excellent performance in 2007 and outperformed the market by a considerable margin. Translease and Athlon Car Lease were voted best and second best car lease company in the Netherlands, respectively (source: Heliview 2007 Fleet Management Survey). In addition, Athlon Car Lease entered the Polish market in 2007.
Consumer finance
De Lage Landen has become Rabobank Group’s competence center for consumer finance in The Netherlands. It has also established a direct and active market approach with its brand Freo. Freo, which was launched in August 2007, offers transparent consumer financing via on line channels. “It is our aim to increase transparency of the Dutch Consumer Finance market. We developed several initiatives to enhance self regulation instead of political interference. So far, we seem to be the only party that is really making an effort regarding this matter, which, I feel is rather disappointing,” says Karel Schellens.
Factoring
Factoring is De Lage Landen’s fourth core activity aimed at the Dutch market. Following a large restructuring, the new factoring organization was rolled out in April 2007. The company has added specific factoring functionalities to its lease application. These functionalities enable local Rabobanks to autonomously process factoring requests on line. New business volume in 2007 showed a substantial increase of 43% to € 100.5 million ($138 million).
Ambitions and Outlook
De Lage Landen has not yet experienced a direct influence of the international credit market crisis on the business of its clients. This is due to the way the company’s business model is set up. Despite the uncertainties within the international financial markets, De Lage Landen predicts double digit growth for the coming year.
Although funding prices are increasing, the company expects to continue the growth of its lease portfolio. Moreover, in 2008 De Lage Landen expects a continuation of the trend of five years of consecutive double-digit net profit growth. Geographical expansion remains high on the agenda. In 2008, De Lage Landen will be on the look out for further expansion in Central- and Eastern Europe and will investigate possibilities to expand its network to India and South Africa.
After the conclusion of the integration of Athlon Car Lease and Translease in 2008, De Lage Landen will continue its car lease activities under the brand name Athlon Car Lease. Athlon Car Lease will investigate opportunities for expansion on a European level. The start up of the car lease activities in Poland as well as the vendor finance acquisition in Hungary will be the basis for starting up car lease activities in Central and Eastern Europe. In the Dutch home market, De Lage Landen will enhance the co-operation between Athlon Car Lease, Consumer Finance and Financial Institutions to capitalize on opportunities for synergies.
