De Lage Landen Reports Increase in Credit Portfolio but Drop in Net Profit
- Net profit for the first half of 2009 is down 58% to €47 million
- Credit portfolio is up, to €23,3 billion
- Margin on new contracts is increasing
- De Lage Landen readies itself for post-recession period
"Given the current circumstances, De Lage Landen really can't complain," says CEO Ronald Slaats. "We have our costs under control, new business volume is looking good and new business margins are in general good; however, the recession does impact De Lage Landen. There has been a significant deterioration in the second-hand car market, and the price of risk is high. This negatively impacts our results. However, I am confident that we have implemented the right measures to see us through. Going forward, we will be focusing more on expanding our presence in emerging economies such as Eastern Europe and Asia. We will invest time and money in standardizing our processes and systems to ensure that our clients receive the same level of quality all over the world. Good risk management has always been at the forefront of our business, but we will sharpen this capability wherever possible. To put it simply: we will step it up now in order to be in a better position when the economy recovers."
Core activities
Despite the global recession, De Lage Landen was able to achieve good commercial results from its Vendor Finance activities. The new business volume the company has generated is in line with estimates and the margin on new business exceeds expectations. Athlon Car Lease was able to win a number of key new clients and increase the profitability of new business. However, results from Athlon Car Lease are suffering the effects of the deterioration in the second-hand car market. On the Dutch market De Lage Landen is helping the Rabobank Group towards its goal of becoming the market leader for consumer finance by means of the online brand Freo. Freo emerged from the ongoing customer satisfaction survey conducted by Independer –an independent online financial advisor- as the best credit provider of 2009.
Corporate Social Responsibility (CSR)
De Lage Landen works with vendors and partners to develop innovative solutions in the fields of recycling, clean technology and electric vehicles — opening up new markets in the process. In the US, a form of cooperation has been set up to promote and finance LED lighting, and De Lage Landen is embedding the CSR philosophy further into its methodology. A Business Principles Committee was set up in the first half of 2009 to advise the management team on the application of CSR and business ethics principles. In addition, CSR objectives have been included in employee performance contracts. De Lage Landen has committed to reducing its CO2 emissions by 20% per fte over five years and actively works to save energy, manage waste effectively and promote sustainable mobility. One example of the company's efforts in this area is the Green Car Plan, which encourages employees to give up their private vehicle, which may be less environmentally friendly, in return for a sustainable leased car for an attractive price.
