DLL, a global provider of asset-based financial solutions, delivered a solid commercial performance and strong portfolio growth for the 2019 business year, which also marked the company’s 50th year of operations. Dating back to its founding in 1969, the company has been built on a core principle of partnership, and when combined with its global reach, industry specialization, asset knowledge, digital solutions and people, continues to deliver exceptional value to its customers.
DLL recorded net profits of $333 million for FY2019. During this same period, total new business volume grew $30 billion, representing more than 5 percent growth over the prior year, when excluding currency movements. The company also realized strong growth in its portfolio, which increased by 8 percent to $40.6 billion.
“The 2019 business year was not without challenges,” commented Bill Stephenson, CEO and Chairman of the Executive Board. “We contended with mixed economic conditions in many of our key markets, increased risk costs and a growing slate of regulatory requirements, all of which impacted our business and that of our customers. These conditions had an adverse effect on our net profits, but the underlying performance of our business model remained solid. Despite these challenges, we maintained our partnership focus and continued to work closely with our customers to overcome obstacles and help realize our mutual ambitions.”
Challenging Conditions Impact Results
“Our focused management of lease pricing allowed us to slow margin compression in many of our key markets,” noted Marc Dierckx, Chief Financial Officer and member of the Executive Board. “However, this was offset by significant growth in our risk costs, including IFRS-9 impairments, which continued to increase in line with external market conditions.” DLL reported risk costs grew by 82 percent year over year to $233 million, and represented 57 bps of the managed portfolio.
Operating costs grew by 5.8 percent on a year over year basis, realizing economies of scale, but also reflecting the company’s strategic investments to further accelerate digital transformation and develop new and innovative products for customers, such as Pay Per Use (PPU). These investments are intended to enhance the customer experience and ultimately drive efficiencies in service delivery, contributing to sustainable future business growth and profitability.
The company also continued efforts to diversify its funding sources, completing four securitizations totaling more than $2.2 billion, including the successful closing of a $1.2 billion securitization in the U.S. in October 2019, which was backed by a pool of loans and leases secured by construction and industrial equipment.
“We were very pleased with the investor community’s interest in this offering, which was significantly over-subscribed.” commented Dierckx. “It is an endorsement of the best in class standards and predictable financial performance that our business continues to deliver.”
Coronavirus Pandemic Response
“We are all seeing the unfortunate effects of the Coronavirus (COVID-19) pandemic, and the impact it is having on society,” noted Stephenson. “Our hearts and thoughts go out to the people who have been affected by this unprecedented public health crisis and we appreciate the first-responders, healthcare workers and volunteers in local communities around the world who are on the front line working to contain this pandemic. At DLL, we take our responsibility for the safety and well-being of our workforce and our customers very seriously, which is why we proactively implemented a comprehensive business continuity program.”
“Now more than ever, the message of our strategy, ‘Partnering for a Better World’ takes on a new and significant meaning. Over the past 50 years, DLL and our many partners and customers have been through good and bad times, and successfully navigated through many challenges. As we encounter this period of uncertainty, DLL continues to stand by our partnership promise and remains committed to working closely with our partners and customers. We are all connected and by working together in partnership we can overcome this crisis, because together we are stronger.”