Eindhoven, August 22, 2019 - DLL, global provider of asset-based financial solutions, delivered continued revenue and portfolio growth during the first half of the year. The company’s focus on partnerships, specialized industry knowledge, digital transformation and innovation contributed to this growth.
The company’s portfolio balance increased by more than 7% over the prior year’s interim results and totaled EUR 34.6 (USD 39.5) billion. During this same period, new business volume was EUR 13.0 (USD 14.7) billion, representing 8% growth over the prior year. This solid commercial growth was realized despite slowing economic conditions and increased price competition emerging in many key markets.
The company recorded net profit of EUR 179 (USD 202) million in the first six months of 2019, a drop of 26% from the prior year. This result was adversely impacted by exceptional items, including a significant one-off income tax reclassification in Europe, in addition to an increase in risk costs. The underlying performance of the portfolio continued to trend positively, with net interest income of EUR 522 (USD 589) million, which represented more than 6% growth over the prior year.
“DLL continues to be an integral part of the growth and success of our customers around the world.” commented Bill Stephenson, CEO and Chairman of the Executive Board. “In a challenging market environment, the underlying performance of the business remains positive and we intend to continue making investments in our people, who play a key role in delivering our value proposition, as well as projects that will accelerate our digital transformation and deliver innovative business models to our customers.”
Consistent performance in difficult market conditions
In a highly competitive market, the company reported the majority of their key performance indicators were trending within expected ranges. “Our focused management of lease pricing allowed us to slow margin compression in many of our key markets,” noted Marc Dierckx, CFO and member of the Executive Board. “However, this was offset by the continued normalization of our risk costs, which were previously at record lows but continue to increase in line with external market conditions.” During this period, DLL reported risk costs more than doubled to EUR 86 (USD 98) million but were still within budget parameters and represented only 51 bps of the managed portfolio.
The company also continued efforts to diversify its funding sources, including the successful closing of a GBP 306 (USD 389) million securitization in the UK, which was rated AAA by Fitch and Standard & Poor’s. “We were very pleased with the investor community’s huge interest in this offering, which was over-subscribed by 2.3 times.” commented Dierckx. “It is an endorsement of the best in class standards and strong, predictable financial performance that our business continues to deliver.”
During the first half of the year, the company celebrated the 50th anniversary of its founding. “In this milestone year for DLL, our award-winning business continues to provide a solid foundation on which to build and prepare for the future.” added Stephenson. “I am very proud of the pioneering role that DLL continues to play in areas such as pay-per-use business models, smart-utilization of assets and the circular economy. All of these activities contribute toward creating a more sustainable world and ensuring the continued success of DLL for the next 50 years and beyond.”