insight into european leasing markets john bennett chairman of leaseurope & managing director,...
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Insight into European leasing markets
John BennettJohn BennettChairman of Leaseurope &Chairman of Leaseurope &
Managing Director,Managing Director,Bank of America Leasing, Global Vendor Finance (Europe)Bank of America Leasing, Global Vendor Finance (Europe)
23 October 2008
Leaseurope & global leasing marketsLeaseurope & global leasing markets
European leasing marketEuropean leasing market
European car leasing & rentalEuropean car leasing & rental
European market playersEuropean market players
European leasing in 2008 and beyondEuropean leasing in 2008 and beyond
Setting the sceneSetting the scene
World Leasing Markets in 2007World Leasing Markets in 2007
Europe
339 bil€
New leasing volumes from leasing associations & Leaseurope estimates
excluding real estate:
292 bil€
US
168 bil€
Canada
32 bil€
Brazil
15 bil€
Japan
44 bil€
Korea
9 bil€
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Total volumes
European LeasingEuropean Leasing
Calculated based on a homogenous sample of members reporting in the previous yearInt’l growth rates: Leaseurope calculation based on data of local associations
New Volumes – yoy %New Volumes – yoy %
+12.4%
+4.5%
-9.1%
US
Japan
+16.5%
+2.7%
2007:
Europe
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Total volumes Equipment
European LeasingEuropean Leasing
Calculated based on a homogenous sample of members reporting in the previous year
New Volumes – yoy% New Volumes – yoy%
+14.8%Strong equipment growth
2007:
European LeasingEuropean Leasing
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Total volumes Real Estate Equipment
Calculated based on a homogenous sample of members reporting in the previous year
New Volumes – yoy %New Volumes – yoy %
-0.7%
2007:
Weak real estate leasing
UK €58bn
DE €54bn
IT €49bn
FR €40bn
CEE €49bn
BE NL, AT, CH €33bn
European LeasingEuropean Leasing
Individual Market Volumes 2007Individual Market Volumes 2007
ES, PT, GR €32bn
Nordic €32bn
European LeasingEuropean Leasing
Individual Market GrowthIndividual Market Growth
Nordic
CEE
UK
DE
FR
IT
ES, PT, GR
BE, NL, CH, AT
-10% 0% 10% 20% 30% 40% 50% 60%
Germany
UK
France
Italy
Greece, Portugal & Spain
Austria, Benelux & Switzerland
CEE
Nordic
+6.4%
+3.6%
+10.2%
+1.6%+16.7%
+14.3%
+50.1%
+11.4%
Yoy growth; calculation based on a constant sample of members reporting in Leaseurope’s Annual Enquiries
-10% 0% 10% 20% 30% 40% 50% 60%
Germany
UK
France
Italy
Greece, Portugal & Spain
Austria, Benelux & Switzerland
CEE
Nordic
05-06 06-07-10% 0% 10% 20% 30% 40% 50% 60%
Germany
UK
France
Italy
Greece, Portugal & Spain
Austria, Benelux & Switzerland
CEE
Nordic
05-06 06-07
10% – 15%10% – 15%
15% – 20%15% – 20%
20% – 25%20% – 25%
> 25%> 25%
Country Level Penetration Rates (2007)
European LeasingEuropean Leasing
Leaseurope:Leaseurope:20.8%20.8%
European LeasingEuropean Leasing
21%
7%
20%
38%
8%6%
Computers & Business MachinesRoad Transport VehiclesPassenger Cars
Machinery & Industrial Equip
OtherShips, Rail, Plane, etc
Equipment and Vehicle Leasing in 2007Equipment and Vehicle Leasing in 2007
Types of equipment on leaseTypes of equipment on lease
% of total 2007 equipment leasing volumes
-5% 5% 15% 25% 35% 45%
Ships, Aircraft,Rolling Stock
Machinery &Industrial
Road TransportVehicles
Passenger Cars
Computers &BusinessMachines
European LeasingEuropean Leasing
21%
7%
20%
38%
8%6%
Computers & Business MachinesRoad Transport VehiclesPassenger Cars
Machinery & Industrial Equip
OtherShips, Rail, Plane, etc
Machinery & Industrial Equip 16.9%
Computers & Business Machines -2.3%
Road Transport Vehicles
16.5%
Passenger Cars 6.3%
Ships, Rail, Plane, etc
43.1%
Equipment and Vehicle Leasing in 2007Equipment and Vehicle Leasing in 2007
GrowthGrowth
European LeasingEuropean Leasing
European customer base in 2007European customer base in 2007
Private Sector
14%14%
45%45%
3%3%
3%3%
30%30%
78%78%
European LeasingEuropean Leasing
Private sector ConsumersPublic sector Other
Germany UK France Italy
ES, PT, GR BE, NL, CH, AT Nordic CEE
Individuals
UKUKLessees in 2007 Lessees in 2007
BE, NL, CH, ATBE, NL, CH, AT NORDICNORDIC CEECEE
European LeasingEuropean Leasing
Private sector ConsumersPublic sector Other
Germany UK France Italy
ES, PT, GR BE, NL, CH, AT Nordic CEEPublic sector
FRANCEFRANCELessees in 2007 Lessees in 2007
NORDICNORDIC
European Auto Leasing & RentalEuropean Auto Leasing & Rental
Vehicles financed/purchased
Portfolio/fleet
# (mil)
€ (bil)
# (mil)
€ (bil)
TOTAL
TOTAL
124.9 63.0 187.96.1 1.6
106.23.6
7.7
278.513.1
384.716.7
Leaseurope estimates based on figures reported in the Federation’s 2007 Annual Survey, includes ST rental
20072007
0%
10%
20%
30%
40%
50%
60%
AT BG CH CZ EE FI HU IT PL PT RO SE SK SL UK DE DK NO BE ES FR NL
European Car Leasing & RentalEuropean Car Leasing & Rental
Leasing Leasing & ST rental Leasing, LT & ST rental
Leaseurope PCs as % of New Registrations
New cars bought or financed (used cars excluded, all product types together) compared to new PC registrations taken from ACEA
0
10
20
30
40
50
60
70
80
90
100
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
European Market PlayersEuropean Market Players#
of f
irms
% of 2007 Ranking new volumes
2007 Ranking Concentration Curve
Leaseurope 2007 Ranking Survey of Top European Leasing Companies
2007 Top Firms2007 Top FirmsIn Bil€In Bil€ New New
volumesvolumes% of total % of total
marketmarket
Top 10Top 10 9292 27%27%Top 20Top 20 139139 41%41%Top 100Top 100 213213 63%63%
European 2007 market
339 bil€339 bil€
50 firms50 firms
50 %50 %
10 firms10 firms43 %43 %
Change in the competitive landscape of European leasing going forward?
European Market PlayersEuropean Market Players
40%
21%
39%
49%
18%
33%
Bank related Captive Indep
2000
2007
Weight of banks increasing, particularly in top players
Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry
European Market PlayersEuropean Market Players
Leaseurope RankingLeaseurope Ranking
Top 20 firms by profileTop 20 firms by profileBank Bank relatedrelated
CaptiveCaptive IndepIndep
20072007 1818 11 1120062006 1717 22 1120052005 1818 11 11
40%
21%
39%
49%
18%
33%
Bank related Captive Indep
2000
2007
Weight of banks increasing, particularly in top players
Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry
European Market PlayersEuropean Market Players
32% 33%
21% 24%
30% 24%
16% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Top 100 Top 20% o
f n
ew v
ol
gra
nte
d v
ia e
ach
ch
anel
Other
Intermediaries
Direct sales
Vendors
Banking networks
Choice of distribution channel
Leaseurope 2007 Ranking Survey of Top European Leasing Companies
Banking networks
Vendors
Intermediaries
Direct sales
Other
UK €28 bn
DE €26 bn
IT €21 bn
FR €17 bn
ES €8 bn
PL €5 bn
CZ €2 bn
5.8%
13.5%
10.3%15.6%
-9.8%
-24.8%
-10.6%
+1.4%
European Leasing - H1 2008European Leasing - H1 2008
GrowthH1’07/H1’08
exclexcl mon impact
Leaseurope member association data
UK €28 bn
DE €26 bn
IT €21 bn
FR €17 bn
ES €8 bn
PL €5 bn
CZ €2 bn
5.8%
13.5%
10.3%15.6%
-9.8%
-24.8%
-10.6%
-1.7%
European Leasing - H1 2008European Leasing - H1 2008
GrowthH1’07/H1’08
inclincl mon impact
Leaseurope member association data
Forecast 2008Forecast 2008
New volumes in Europe may fall if H1 trend continuesNew volumes in Europe may fall if H1 trend continues
0
50
100
150
200
250
300
350
400
2002 2003 2004 2005 2006 2007 2008f
Bil
€
-5%
0%
5%
10%
15%
New volumes Annual growthNew vol reported in Leaseurope Annual Enquiries
Lending ConditionsLending Conditions
ECB Bank Lending Survey – July 2008
Tightening bank lending conditionsTightening bank lending conditions
-20
-10
0
10
20
30
40
50
60
70
02
Q4
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
05
Q2
05
Q3
05
Q4
06
Q1
06
Q2
06
Q3
06
Q4
07
Q1
07
Q2
07
Q3
07
Q4
08
Q1
08
Q2
%
Overall
Lending ConditionsLending Conditions
Particularly to large firmsParticularly to large firms
ECB Bank Lending Survey – July 2008
-20
-10
0
10
20
30
40
50
60
70
02
Q4
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
05
Q2
05
Q3
05
Q4
06
Q1
06
Q2
06
Q3
06
Q4
07
Q1
07
Q2
07
Q3
07
Q4
08
Q1
08
Q2
08
Q3
%
Overall SMES Large firms
Lending ConditionsLending Conditions
Margins are increasing in EuropeMargins are increasing in Europe
ECB Bank Lending Survey – July 2008
-60
-40
-20
0
20
40
60
80
100
02
Q4
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
05
Q2
05
Q3
05
Q4
06
Q1
06
Q2
06
Q3
06
Q4
07
Q1
07
Q2
07
Q3
07
Q4
08
Q1
08
Q2
%
Margin on average loans Margin on riskier loans
Demand for loansDemand for loans
-60
-50
-40
-30
-20
-10
0
10
20
30
40
02
Q4
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
05
Q2
05
Q3
05
Q4
06
Q1
06
Q2
06
Q3
06
Q4
07
Q1
07
Q2
07
Q3
07
Q4
08
Q1
08
Q2
%
Fixed investment Inventories & working cap
M&A & corp restructuring Debt restructuring
Demand for traditional bank loans to finance Demand for traditional bank loans to finance investment is decreasinginvestment is decreasing
EU InvestmentEU Investment
-22
-6
3 36 7 7 8
1013 14
16
-25
-20
-15
-10
-5
0
5
10
15
20
RO IT AT UK CZ SE FR DE NL PL BE ES
% c
hang
e in
vol
However, European businesses expect investment to However, European businesses expect investment to increase overall in 2008increase overall in 2008
EU Commission’s Investment Survey conducted in March/April, published June 2008
EU 2008 expected
investment
5%5%
EU InvestmentEU Investment
European investment growthEuropean investment growth
Eurostat, yoy growth, chain linked volumes, ref year = 2000
-5%
0%
5%
10%
15%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f
Total Equipment
2008 Eurostat forecast
2.8%2.8%
Leasing PenetrationLeasing Penetration
Sample based on 1994 Leaseurope membership
Average leasing penetration in Europe (Leaseurope membership base = 1994)
0%
5%
10%
15%
20%
25%
30%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Total Equipment Real EstateLeaseurope data & investment figures from Eurostat
Insight into European leasing markets
John BennettJohn BennettChairman of Leaseurope &Chairman of Leaseurope &
Managing Director,Managing Director,Bank of America Leasing, Global Vendor Finance (Europe)Bank of America Leasing, Global Vendor Finance (Europe)
23 October 2008