LONDON Athlon Groep, the Hoofddorp, Netherlands, car dealer and leasing group, has been creating shareholder value in a sector that investors have largely ignored.
How? 'We consider ourselves as a mobility provider,' said Henk Bierstee, the company's CEO.
Athlon has combined traditional car retailing with car leasing, and has expanded rapidly across Europe.
Athlon and Bilia AB, a large Sweden-based dealer group, have done far better than most European car retail businesses.
'The retail segment has performed the worst of the automotive sectors,' said Steve Utting, European Automotive Leader in Corporate Finance and Investment Banking Services at PricewaterhouseCoopers. 'Traditional retailers are not communicating clearly what their business model is. If you ask some of them where value is going to be created in the new environment they don't really know.'
But there have been some winners.
Since April 1, 1997, Athlon has far out-performed the Automotive NewsEurope/PricewaterhouseCoopers retail index, which during the three years ending March 31, 2000 showed a negative return of 1.9 percent. Athlon's total shareholder return was 124.8 percent during the period, tops among 17 publicly-traded retail businesses surveyed by PricewaterhouseCoopers. The retailers index included publicly-traded companies with annual sales over A250 million.
Athlon's 11 dealerships handle mainly Volkswagen/Audi and Opel models. Last year, they sold 6,100 new cars and 5,100 used cars. The company is expanding in Belgium, France, Luxembourg and Germany.
Athlon's three-year growth in value partly reflected a sharp rise in the Amsterdam stock exchange that ended last year. But Bierstee emphasized the synergies between Athlon's dealer business and its fleet of 17,350 lease and 14,150 rental cars.
'These complement each other perfectly well because our own fleet benefits from sales and repair activities, and vice versa,' he said.
Athlon had a negative return of 32.4 percent in the last 12 months, mirroring the decline in the Amsterdam exchange. That partly resulted from adoption of Europe's common currency, which allowed Dutch pension funds to invest outside Holland for the first time.
UK importer and leasing giant Lex Service ranked second among retailers in the three year category, with an 85.5 percent return. Ford Finland was third at 50.9 percent.
Bilia, based in Gothenburg, Sweden, was the No. 1 creator of shareholder value in the year that ended March 31, with a return of 80 percent. That compared to 8.3 percent gain for retailers as a whole.
Bilia sells Volvo and Renault cars and trucks and Volvo construction equipment through 140 outlets in more than 11 European countries. Most of its revenue came from passenger car sales in Nordic countries. Bilia's share price has benefited from selling off non-Nordic car dealerships and unprofitable businesses.
Bilia was followed in the one-year category by Dixon Motors, a large UK dealer group, at 34.3 percent return and Lex Service at 30.9 percent.