THE EUROPEAN FLEET LEASING: Key trends and challenges, and what they teach us for the development of the CEE markets Presented by Vincent Rupied, Prague, February 3rd, 2012

Leaseurope, the Leasing & Rental Federation Leaseurope brings together 43 associations in 31 countries throughout Europe Leaseurope represents the leasing industry, from hire purchases and finance leases to operating leases of all asset types, as well as short term rental, for cars, vans and trucks.

The Corporate Vehicle Observatory An expert-platform for all fleet professionals: fleet managers, procurement specialists, manufacturers, fleet leasing companies, advisers, insurers, press, public authorities, researchers etc. Created by Arval in 2002 Focus: professional Mobility Neutral & International 16 Countries incl: Czech Republic, Russia, Poland Free Access Studies Annual Fleet Barometer in collaboration with

Agenda Automotive fleets in the European Leasing Market Full Service Operating Leasing in Europe Trends & Challenges

Leaseurope in the automotive market (2010) Real estate Cars 40% Machines & equip ICT CVs 16% Big/other

Leasing & Car Rental penetrations 70% 60% 50% 40% 30% 25.4% 20% 10% 0% SE CH EE DK FI LV NL UK BG HU SI IT SK AT PT CZ FR NO DE BE RO PL ES GR Note that we have not included BVRLA data here as there is quite an important overlap between their membership and the FLA’s membership and we don’t have precise data to be able to show figures on a country level. Leasing members Leasing & ST rental members Leaseurope passenger cars as % of total car registrations Source: Leaseurope estimates based on data collected in its 2009 Annual Survey and ACEA new registration figures The total fleet above is different from what we show in slide 7 due to rounding

European Leasing & Rental Volumes Leaseurope Annual Survey

Business vs. Total Registrations 2011* Size of bubbles = Business registrations * For all countries, best estimate to date. Sources: Arval, National Associations, ACEA.

Fleet growth potential in the next three years Decrease Increase Balance 2011 2010 2009 2008 + 14% + 13% - 2% + 21% + 62% + 46% + 68% + 52% Base: companies > 100 employees

Agenda Automotive fleets in the European Leasing Market Full Service Operating Leasing in Europe Trends & Challenges

with less than 10 employees Note : CVO Barometer Methodology Target: Fleet managers in companies of all industries using corporate vehicles Fieldwork period: H1 2011 Sample: 4 518 interviews including 3 313 in Europe : Belgium, Switzerland, Czech Rep., Germany, Spain, France, Greece, Italy, Poland, Portugal, UK 1 205 in “BRIT” : Brazil, Russia, India, Turkey Companies with less than 10 employees with 10 to 99 employees with 100 to 249 / 499 / 999 employees With 250 / 500 / 1 000 employees and +

Fleet financing in European Large Corporates** Self purchase* Car credit Finance leasing Operating leasing RU *Self-purchase = outright purchase + credit (other than car credit) ** Large Corporate = over 1000 or 500 employees

Fleet financing: intentions per size Finance leasing Operating leasing Self purchase* Car credit Intention to develop – Intention to reduce *Self-purchase = outright purchase + credit (other than car credit)

The Motivations for Full Service Fleet Leasing Don’t know Outsourcing of services and administration Transfer of risk on maintenance and Residual Value Budget control Besides the cost, what is the main added value of your experience with your leasing supplier? Base: companies using Operating Leasing

% of businesses interested in the following services A Market driven by Service Outsourcing % of businesses interested in the following services

Towards Service Integration Don’t know Best specific provider for each service Integrated provider of services only Integrated provider of both services and leasing % who cover service needs with… Base: companies with 100 employees and more

Agenda Automotive fleets in the European Leasing Market Full Service Operating Leasing in Europe Trends & Challenges Leasing in crisis time The funding challenge Remarketing and residuals Accounting treatment

Leasing in crisis time: back ground

Leasing in crisis time: Cost pressure % who think that this year, cost pressure on the fleet will… Balance 2011 Decrease Increase 31% 36% 37% 39%

The funding challenge (1/2) CDS 5Y € RCI SG BNPP VW BMW

The funding challenge (2/2) Feb 1st FIAT S.P.A. PSA RENAULT SG BNPP VW DAIMLER BMW

The Remarketing Challenge (1/4)

The Remarketing Challenge (2/4) France : LT Used car market index (100 = average Jan. 2007 - Mar. 2008)

Used cars market: size per country The Remarketing Challenge (3/4) Used cars market: size per country Sources: Arval, National associations, ublic statistics.

Used cars sales vs new cars sales The Remarketing Challenge (4/4) Used cars sales vs new cars sales Sources: Arval, National associations, ublic statistics.

The Lease accounting challenge (1/4) A difficult conception Rediscussions

The Lease accounting challenge (2/4) At stake for Leasing Customers Overall complexity, low preparation Will the leasing charge be degressive (as proposed) or constant (as today)? Feasibility of recontracting Qualification of the Right of Use for Basel II and III (for banks) Tangible, Intangible or a new class of assets (« financial intangible ») as proposed by Leaseurope? Transition : possible option Full Retrospective: FTA, impact on equity, comprehensive recalculation Prospective: frontloading of charges with contacts regarded as new

The Lease accounting challenge (3/4) At stake for Fleet Lessors Substantial system adjustments to produce required reports Major uncertainty of the RV reassessment under the new standard The Lessors would carry receivables – not vehicles – on the balance sheet The current gradual prospective depreciation (IAS 16) does not apply to financial assets The only possible reassessment would be the impairement of the receivable (IAS 39) and of the residual asset (IAS 36) : more brutal and procyclical

The Lease accounting challenge (4/4) Why Operating Leasing remains by far the best funding for fleets Only full service product Only mode providing RV risk coverage Far lighter on balance sheet than Finance Lease and Purchase

Thank You