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Insight into European leasing markets

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Presentation on theme: "Insight into European leasing markets"— Presentation transcript:

1 Insight into European leasing markets
John Bennett Chairman of Leaseurope & Managing Director, Bank of America Leasing, Global Vendor Finance (Europe) 23 October 2008

2 Setting the scene Leaseurope & global leasing markets
European leasing market European car leasing & rental European market players European leasing in 2008 and beyond

3 World Leasing Markets in 2007
Europe 339 bil€ Canada 32 bil€ excluding real estate: 292 bil€ Korea 9 bil€ Japan 44 bil€ US 168 bil€ Brazil 15 bil€ New leasing volumes from leasing associations & Leaseurope estimates

4 European Leasing New Volumes – yoy % 2007: Total volumes +16.5% +12.4%
30% 25% 2007: 20% +16.5% +12.4% Europe 15% 10% +4.5% 5% US +2.7% 0% -9.1% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Japan 2005 2006 2007 -5% -10% Total volumes Calculated based on a homogenous sample of members reporting in the previous year Int’l growth rates: Leaseurope calculation based on data of local associations

5 Strong equipment growth
European Leasing New Volumes – yoy% 30% 25% 2007: 20% +14.8% Strong equipment growth 15% 10% 5% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -5% -10% Total volumes Equipment Calculated based on a homogenous sample of members reporting in the previous year

6 Weak real estate leasing
European Leasing New Volumes – yoy % 30% 25% 2007: 20% 15% 10% 5% -0.7% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -5% Weak real estate leasing -10% Total volumes Real Estate Equipment Calculated based on a homogenous sample of members reporting in the previous year

7 Individual Market Volumes 2007
European Leasing Individual Market Volumes 2007 UK  €58bn DE  €54bn CEE  €49bn IT  €49bn FR  €40bn BE NL, AT, CH  €33bn ES, PT, GR  €32bn Nordic  €32bn

8 Individual Market Growth
European Leasing Individual Market Growth Nordic +11.4% +50.1% CEE +14.3% BE, NL, CH, AT ES, PT, GR +16.7% +1.6% IT +10.2% FR +3.6% UK +6.4% DE Yoy growth; calculation based on a constant sample of members reporting in Leaseurope’s Annual Enquiries

9 European Leasing Leaseurope: 20.8%
Country Level Penetration Rates (2007) > 25% 20% – 25% Leaseurope: 20.8% 15% – 20% 10% – 15%

10 Equipment and Vehicle Leasing in 2007 Types of equipment on lease
European Leasing Equipment and Vehicle Leasing in 2007 Types of equipment on lease % of total 2007 equipment leasing volumes Computers & Business Machines Machinery & Industrial Equip Road Transport Vehicles Ships, Rail, Plane, etc Passenger Cars Other

11 Equipment and Vehicle Leasing in 2007
European Leasing Equipment and Vehicle Leasing in 2007 Computers & Business Machines Growth -2.3% Passenger Cars 6.3% Road Transport Vehicles 16.5% Machinery & Industrial Equip 16.9% Ships, Rail, Plane, etc 43.1% Computers & Business Machines Machinery & Industrial Equip Road Transport Vehicles Ships, Rail, Plane, etc Passenger Cars Other

12 European customer base in 2007
European Leasing European customer base in 2007 Private Sector 78% 3% 30% 45% 3% 14%

13 European Leasing Lessees in 2007 UK Individuals BE, NL, CH, AT CEE
Germany UK France Italy Individuals BE, NL, CH, AT CEE ES, PT, GR BE, NL, CH, AT NORDIC Nordic CEE Private sector Public sector Consumers Other

14 European Leasing Lessees in 2007 FRANCE Public sector NORDIC Germany
UK France Italy Public sector ES, PT, GR BE, NL, CH, AT Nordic NORDIC CEE Private sector Public sector Consumers Other

15 European Auto Leasing & Rental
Vehicles financed/purchased 2007 TOTAL # (mil) 6.1 1.6 7.7 € (bil) 124.9 63.0 187.9 Portfolio/fleet TOTAL # (mil) 13.1 3.6 16.7 € (bil) 278.5 106.2 384.7 Leaseurope estimates based on figures reported in the Federation’s 2007 Annual Survey, includes ST rental

16 European Car Leasing & Rental
Leaseurope PCs as % of New Registrations 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 Leasing Leasing & ST rental Leasing, LT & ST rental New cars bought or financed (used cars excluded, all product types together) compared to new PC registrations taken from ACEA

17 European Market Players
2007 Ranking Concentration Curve 10 20 30 40 50 60 70 80 90 100 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 339 bil€ # of firms 2007 Top Firms In Bil€ New volumes % of total market Top 10 92 27% Top 20 139 41% Top 100 213 63% 50 firms 50 % 10 firms 43 % % of 2007 Ranking new volumes Change in the competitive landscape of European leasing going forward? Leaseurope 2007 Ranking Survey of Top European Leasing Companies

18 European Market Players
Weight of banks increasing, particularly in top players 2000 2007 Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry

19 European Market Players
Weight of banks increasing, particularly in top players 2000 Leaseurope Ranking Top 20 firms by profile Bank related Captive Indep 2007 18 1 2006 17 2 2005 2007 Leaseurope 2007 Ranking Survey of Top European Leasing Companies and Leaseurope 2007 Annual Enquiry

20 European Market Players
Choice of distribution channel Other Intermediaries Direct sales Vendors Banking networks Leaseurope 2007 Ranking Survey of Top European Leasing Companies

21 European Leasing - H1 2008 +1.4% UK €28 bn DE €26 bn IT €21 bn
Growth H1’07/H1’08 excl mon impact +1.4% UK €28 bn DE €26 bn IT €21 bn 5.8% 15.6% 10.3% FR €17 bn -10.6% ES €8 bn 13.5% -9.8% PL €5 bn -24.8% CZ €2 bn Leaseurope member association data

22 European Leasing - H1 2008 -1.7% UK €28 bn DE €26 bn IT €21 bn
Growth H1’07/H1’08 incl mon impact -1.7% UK €28 bn DE €26 bn IT €21 bn 5.8% 15.6% 10.3% FR €17 bn -10.6% ES €8 bn 13.5% -9.8% PL €5 bn -24.8% CZ €2 bn Leaseurope member association data

23 New volumes in Europe may fall if H1 trend continues
Forecast 2008 New volumes in Europe may fall if H1 trend continues 400 15% 350 300 10% 250 Bil € 200 5% 150 100 0% 50 -5% 2002 2003 2004 2005 2006 2007 2008f New vol reported in Leaseurope Annual Enquiries New volumes Annual growth

24 Tightening bank lending conditions
-20 -10 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 ECB Bank Lending Survey – July 2008

25 Particularly to large firms
Lending Conditions Particularly to large firms -20 -10 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 ECB Bank Lending Survey – July 2008

26 Margins are increasing in Europe
Lending Conditions Margins are increasing in Europe -60 -40 -20 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 ECB Bank Lending Survey – July 2008

27 Demand for traditional bank loans to finance investment is decreasing
Demand for loans Demand for traditional bank loans to finance investment is decreasing -60 -50 -40 -30 -20 -10 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

28 EU 2008 expected investment
EU Investment However, European businesses expect investment to increase overall in 2008 -22 -6 3 6 7 8 10 13 14 16 -25 -20 -15 -10 -5 5 15 20 RO IT AT UK CZ SE FR DE NL PL BE ES % change in vol EU 2008 expected investment 5% EU Commission’s Investment Survey conducted in March/April, published June 2008

29 European investment growth
EU Investment European investment growth 2008 Eurostat forecast 15% 10% 5% 2.8% 0% -5% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f Total Equipment Eurostat, yoy growth, chain linked volumes, ref year = 2000

30 Leasing Penetration 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 Estate Leaseurope data & investment figures from Eurostat Sample based on 1994 Leaseurope membership

31 Insight into European leasing markets
John Bennett Chairman of Leaseurope & Managing Director, Bank of America Leasing, Global Vendor Finance (Europe) 23 October 2008

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