Insight into European leasing
markets
John Bennett
Chairman of Leaseurope &
Managing Director,
Bank of America Leasing, Global Vendor Finance (Europe)
23 October 2008
Setting the scene

Leaseurope & global leasing markets

European leasing market

European car leasing & rental

European market players

European leasing in 2008 and beyond
World Leasing Markets in 2007
Europe
Canada
339 bil€
32 bil€
excluding
real estate:
292 bil€
US
Korea
Japan
9 bil€
44 bil€
168 bil€
Brazil
15 bil€
New leasing volumes from leasing associations & Leaseurope estimates
European Leasing
New Volumes – yoy %
30%
25%
2007:
20%
+16.5%
Europe
+12.4%
15%
10%
5%
+4.5%
US
+2.7%
0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
-5%
2004
2005
2006
Japan
-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
2007
-9.1%
European Leasing
New Volumes – yoy%
30%
25%
2007:
20%
Strong equipment growth
+14.8%
15%
10%
5%
0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
-5%
-10%
Total volumes
Equipment
Calculated based on a homogenous sample of members reporting in the previous year
2006
2007
European Leasing
New Volumes – yoy %
30%
25%
2007:
20%
15%
10%
5%
-0.7%
0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
-5%
2004
2005
2006
2007
Weak real estate leasing
-10%
Total volumes
Real Estate
Equipment
Calculated based on a homogenous sample of members reporting in the previous year
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
Austria, Benelux & SwitzerlandGreece, Portugal & Spain
European Leasing
Greece, Portugal & Spain
Italy
Italy
France
Individual Market
Growth
France
+11.4%
Nordic
Nordic
-10%
-10%
+14.3%
BE, NL, CH, AT
stria, Benelux & Switzerland
Greece, Portugal & Spain
ES, PT, GR
0%
+16.7%
10%
0%
10%
+50.1%
20%
05-06
+10.2%
+3.6%
+6.4%
France
FR
UK
UK
Germany
DE
0%
10%
20%
05-06
30%
40%
06-07
Yoy growth; calculation based on a constant sample of members
reporting in Leaseurope’s Annual Enquiries
50%
30%
20%
40%
05-06
06-07
+1.6%
Italy
IT
-10%
Germany
UK
Germany
CEE
CEE
UK
60%
European Leasing
Country Level Penetration Rates (2007)
> 25%
20% – 25%
15% – 20%
10% – 15%
Leaseurope:
20.8%
European Leasing
Equipment and Vehicle Leasing in 2007
Types of equipment on lease
6%
8%
21%
7%
38%
% of total 2007 equipment leasing volumes
Computers & Business Machines
Road Transport Vehicles
Passenger Cars
20%
Machinery & Industrial Equip
Ships, Rail, Plane, etc
Other
European Leasing
Equipment and Vehicle Leasing in 2007
6%
8%
Computers &
Business
Machines
21%
Computers &
Business
-2.3%
Machines
Growth
Passenger
Cars
Passenger Cars
6.3%
Road Transport
Vehicles
Road
Transport
Vehicles
7%
Machinery &
Industrial
38%
16.5%
Machinery &
Industrial Equip
16.9%
Ships, Aircraft,
Rolling Stock
20%
-5%
Computers & Business Machines
Road Transport Vehicles
Passenger Cars
5%
15%
Ships, Rail,
Plane, etc
25%
43.1%
45%
35%
Machinery & Industrial Equip
Ships, Rail, Plane, etc
Other
European Leasing
European customer base in 2007
Private Sector
78%
3%
30%
45%
3%
14%
European Leasing
Germany
Germany
UK
Lessees in 2007
UK
UK
France
France
Italy
Italy
Individuals
Med
ES, PT, GR
Private sector
Benelux, CH, AT
BE, BE,
NL,NL,
CH,
CH,AT
AT
Public sector
Nordic
Nordic
NORDIC
Consumers
CEE
CEE
CEE
Other
European Leasing
Germany
Med
Lessees in 2007
FRANCE
UK
France
UK
Germany
Public sector
ES, PT, GR
Private sector
Benelux, CH, AT
France
Nordic
BE, NL, CH, AT
Nordic
NORDIC
Public sector
Consumers
Italy
Italy
CEE
CEE
Other
European Auto Leasing & Rental
2007
Vehicles financed/purchased
TOTAL
# (mil)
€ (bil)
6.1
124.9
1.6
63.0
7.7
187.9
Portfolio/fleet
TOTAL
# (mil)
€ (bil)
13.1
278.5
3.6
106.2
16.7
384.7
Leaseurope estimates based on figures reported in the Federation’s 2007 Annual Survey, includes ST rental
European Car Leasing & Rental
Leaseurope PCs as % of New Registrations
60%
50%
40%
30%
20%
10%
0%
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
European Market Players
European 2007 market
2007 Ranking Concentration Curve
100
339 bil€
90
# of firms
80
70
60
2007 Top Firms
50 firms
50
In Bil€
40
50 %
30
10 firms
20
0
0%
Top 10
43 %
10
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Top 20
% of 2007 Ranking new volumes
Change in the competitive landscape
of European leasing going forward?
Top 100
Leaseurope 2007 Ranking Survey of Top European Leasing Companies
New
volumes
% of total
market
92
139
213
27%
41%
63%
European Market Players
Weight of banks increasing, particularly in top players
2000
39%
40%
9%
40%
21%
Bank related
2007
Captive
Indep
21%
Bank related
Captive
Leaseurope 2007 Ranking Survey of Top European Leasing
Companies and Leaseurope 2007 Annual Enquiry
Indep
European Market Players
Weight of banks increasing, particularly in top players
2000
39%
40%
Leaseurope Ranking
Top 20 firms by profile
9%
40%
Bank
21%
Bank related
33%
2007
Captive
Captive Indep
related
Indep
49%
2007
18
1
1
2006
17
2
1
2005
18
1
1
21%
Leaseurope 2007 Ranking Survey of Top European Leasing
Companies and Leaseurope 2007 Annual Enquiry
18%
Bank related
Captive
Indep
European Market Players
% of new vol granted via each chanel
Choice of distribution channel
Other
100%
90%
16%
18%
Other
30%
24%
Intermediaries
21%
24%
Direct sales
32%
33%
Vendors
80%
70%
60%
50%
40%
Intermediaries
Direct sales
Vendors
30%
20%
10%
0%
Banking networks
Banking networks
Top 100
Top 20
Leaseurope 2007 Ranking Survey of Top European Leasing Companies
European Leasing - H1 2008
Growth
H1’07/H1’08
excl mon impact
+1.4%
UK €28 bn
DE €26 bn
IT €21 bn
5.8%
10.3%
FR €17 bn
-10.6%
ES €8 bn
PL €5 bn
CZ €2 bn
Leaseurope member association data
15.6%
13.5%
-9.8%
-24.8%
European Leasing - H1 2008
Growth
H1’07/H1’08
incl mon impact
-1.7%
UK €28 bn
DE €26 bn
IT €21 bn
5.8%
10.3%
FR €17 bn
-10.6%
ES €8 bn
PL €5 bn
CZ €2 bn
Leaseurope member association data
15.6%
13.5%
-9.8%
-24.8%
Forecast 2008
New volumes in Europe may fall if H1 trend continues
400
15%
350
300
10%
Bil €
250
200
5%
150
100
0%
50
0
-5%
2002
2003
New vol reported in Leaseurope
Annual Enquiries
2004
2005
New volumes
2006
Annual growth
2007
2008f
0
ECB Bank Lending Survey – July 2008
-10
-20
Overall
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
03 Q3
03 Q2
03 Q1
02 Q4
%
Lending Conditions
Tightening bank lending conditions
70
60
50
40
30
20
10
Lending Conditions
Particularly to large firms
70
60
50
40
%
30
20
-10
-20
Overall
ECB Bank Lending Survey – July 2008
SMES
Large firms
08 Q3
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
03 Q3
03 Q2
03 Q1
0
02 Q4
10
Lending Conditions
Margins are increasing in Europe
100
80
60
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
03 Q3
-20
03 Q2
0
03 Q1
20
02 Q4
%
40
-40
-60
Margin on average loans
ECB Bank Lending Survey – July 2008
Margin on riskier loans
Demand for loans
Demand for traditional bank loans to finance
investment is decreasing
40
30
20
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
03 Q3
03 Q2
-10
03 Q1
%
0
02 Q4
10
-20
-30
-40
-50
-60
Fixed investment
M&A & corp restructuring
Inventories & working cap
Debt restructuring
EU Investment
However, European businesses expect investment to
increase overall in 2008
20
13
15
10
% change in vol
6
5
3
3
AT
UK
7
7
8
14
16
10
5%
0
RO
IT
CZ
SE
FR
DE
NL
PL
BE
-5
-6
-10
-15
-20
-25
EU 2008
expected
investment
-22
EU Commission’s Investment Survey conducted in March/April, published June 2008
ES
EU Investment
European investment growth
2008
Eurostat
forecast
15%
10%
5%
2.8%
0%
-5%
1996
1997
1998
1999
2000
2001
Total
2002
2003
2004
Equipment
Eurostat, yoy growth, chain linked volumes, ref year = 2000
2005
2006
2007
2008f
Leasing Penetration
Average leasing penetration in Europe
(Leaseurope membership base = 1994)
30%
25%
20%
15%
10%
5%
0%
1994
1995
1996
1997
Total
1998
1999
2000
2001
Equipment
Leaseurope data & investment figures from Eurostat
Sample based on 1994 Leaseurope membership
2002
2003
2004
2005
Real Estate
2006
2007
Insight into European leasing
markets
John Bennett
Chairman of Leaseurope &
Managing Director,
Bank of America Leasing, Global Vendor Finance (Europe)
23 October 2008