Interview with Mike Masterson, CEO of ALD Automotive

Following the Initial Public Offering of ALD, Mike Masterson discusses the reasons for the success of Europe’s largest IPO this year so far. 

Introduction en bourse d'ALD - Euronext

Could you tell us more about the ALD model?

ALD offers its corporate and individual customers full-service leasing and fleet management services in 41 countries on four continents.

ALD is the result of Societe Generale Group's continuous investment in the Full-Service Leasing business. Our story began in the 1990s and picked up momentum with the takeover of the car leasing businesses of Deutsche Bank and Hertz Lease Europe, in 2001 and 2003 respectively, marking a key step in the development of ALD. These major acquisitions allowed us to grow considerably and to hold leading positions on the majority of European markets.

ALD then pursued, year after year, a growth strategy based on targeted acquisitions, ambitious geographic expansion and an emphasis on innovation, while focusing above all on what sets us apart: offering the best customer service on the market and the highest level of operational expertise in terms of partnerships.

In fact, one of ALD’s strengths resides in its ability to form long-term partnerships. Today, our group has reached more than 90 agreements with 10 car manufacturers and formed 23 banking partnerships in 16 countries by providing a white label full-service leasing offer.

For example, Nordea Bank markets full-service leasing solutions that are designed and managed by ALD, but marketed by and under the name of Nordea, to its customers. More recently, we acquired the leasing business of BBVA and reached a partnership agreement that involves offering our services to customers of BBVA, also under a white label.

Through this strategy, and the commitment and talent of our teams, ALD has emerged as an international leading player in in full-service leasing and fleet management: ALD is now No. 1 in Europe and No. 3 worldwide, managing more than 1.4 million vehicles. Our ambition is to go further and to become the market leader in mobility solutions.

The size of ALD has also allowed us to invest massively in research and development and in our IT systems. These investments enable us to offer our customers innovative mobility solutions: car-sharing, on-board telematics, etc.

Mike Masterson, CEO of ALD Automotive

How do you explain the success of this business?

ALD enables its corporate customers to reduce the cost of their fleet by taking advantage of the size and operational efficiency of ALD on an international scale while optimising their balance sheet.

For a large international group, managing fleets of corporate vehicles in different countries can prove costly: they must buy the cars, manage the local particularities (legislation, tax issues, local specifics for the fleet), organise maintenance and related services, set up the responsible teams, define a usage policy, manage resale, etc.

ALD offers solutions that facilitate outsourcing at all stages of this chain: the cars are bought by ALD, who works with the customer to define the policy on repairs and maintenance, the related services (insurance, tyres, etc.) and the level of reporting. A purchasing manager can closely and globally monitor the costs connected to the corporate vehicles. The size of ALD allows us to achieve significant economies of scale and to offer competitive prices to our customers. For example, we are one of the leading buyers of tyres in Europe, with approximately 1,250,000 tyres purchased each year!

The size of ALD has also allowed us to invest massively in research and development and in our IT systems. These investments enable us to offer our customers innovative mobility solutions: car-sharing, on-board telematics, etc.

You want to become the market leader in mobility solutions. What does this involve and how do you see the market evolving?

The relationship consumers have with their cars is fundamentally changing. We are seeing
a revolution as focus shifts from car ownership to car use. This is exactly what ALD offers: rather than owning a car, the consumer pays rent on a 36- or 48-month contract and selects the level of services they wish to benefit from. As with banking services and products, car consumers also seek all-in-one solutions that allow them to simplify their use as much as possible. Thanks to the digital tools developed by ALD, the driver can manage and adjust their service options (maintenance, insurance, etc.) in a single click.

With the development of new products such as electric cars and, in the future, autonomous cars, and new uses such as car-sharing, I am certain that ALD will maintain its role as a leader in a fast-changing mobility sector.

We have, for example, recently reached a major agreement with the Italian utility ENEL. The idea is simple: ENEL offers its customers an electric car under a full-service leasing agreement. ENEL installs the charging port at its customers’ home and ALD provides the vehicle and related services. This type of partnership can be developed in relation with certain local authorities, for example.

Over the past few months, we have stepped up our innovative collaborations with new partnerships and we intend to continue on this path where much is yet to be invented.

You have just marked an important step in the history of the company. What does this IPO represent for you?

The IPO of ALD will allow us to go even further, by improving our visibility and attractiveness to customers, suppliers, partners and potential staff.

We wish to strengthen existing ties with our partners and customers while continuing to develop new partnerships, focusing in particular on individuals, as we did for example with Blablacar by offering attractive solutions to the most active members.

The IPO will give ALD the resources to be even more flexible in the deployment of its strategy to seize opportunities on the mobility market.

An ambitious business model

In 2016, ALD Automotive achieved growth of 14%, with a managed fleet of 1,375,584 vehicles at the end of 2016, which positions the Group as the No.1 player on the European leasing and fleet management market and No. 3 worldwide.

On 15 June 2017, to accelerate its development and become a leader in a rapidly changing mobility sector Societe Generale announced the success of the Initial Public Offering of ALD Automotive on the regulated market of Euronext Paris. The IPO seeks to let ALD accelerate its development and become a leader in a mobility sector undergoing great change.

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