DRD leads its sector, with total investments of TL 940 million in 2015 and a fleet exceeding 27,000 vehicles.
Developments in the global economy
The global economy is still recovering from the impact of the 2008 crisis. In this singular period, where growth is slow yet prudent on global and national levels, DRD as always continues its operations with determination. Structural issues produced by the crisis still affect many regions of the world, suggesting that pressure on growth rates will persist in the coming two years. On the other hand, the slowdown in global trade triggered a downtrend in world trade indices. As for emerging countries such as China, which are grappling with high public and private sector debt as well as sluggish demand, only very few of them have managed to post high growth rates. In mid-2015 the People’s Bank of China took action to devaluate the yuan by 1.9% against the dollar, significantly impacting world markets. Despite the Fed’s decision to raise its policy rate, along with plans for quantitative easing, the Central Bank of Turkey did not make radical changes to its monetary policy. With the effect of the rising exchange rate, inflation overshot the 2015 target by 3.3 percentage points to hit 8.8%.
In addition to global economic uncertainty and weak demand, the Turkish economy was adversely affected by the volatility in the neighboring region. As is well documented, 2015 was a challenging period for Turkey on both the domestic and international front. Two general elections, in June and November; a drop in energy prices, starting from the second half of the year onwards; and 18% depreciation of the euro against the dollar all affected demand for various products such as automobiles. Loan volume contracted by a significant margin from the robust levels of the previous three years. While this development did not immediately change the relatively positive outlook on financial stability, a weakening in loan repayments, as well as insufficient demand, gradually led to projections that 2016 would be yet another challenging period for the banking sector.
DRD beats growth targets
Despite these developments, DRD closed the year 2015 with an investment volume above the initial target. We are the leader in our sector, with total investments worth TL 940 million and a fleet of more than 27,000 vehicles. As “Turkey’s largest operational fleet leasing company established with 100% domestic capital”, DRD maintains a place in both the Capital 500 and the Fortune Turkey 500 lists, compiled by the Capital and Fortune magazines to determine the 500 largest companies in Turkey. We hold customer satisfaction above all else with our focus on top quality service, and we undertake ambitious investments to equip our company with cutting edge technologies. The Touch Point application, designed to measure customer satisfaction, and the Salesforce CRM infrastructure, which boosts our sales teams’ productivity, are investments that will carry us towards the future. As the company that introduced Turkey to the concept of annual car leasing for individuals, we maintain our pioneering role in the industry. We carry out significant investments to ensure that our employees have an optimal working environment, as well as access to personal and professional growth opportunities. To this end, we set up the DRD Academy, the first of its kind in the sector, to develop competent employees for the leasing business.
Together with its employees, customers and all stakeholders, DRD reshapes the concept of automobile ownership in Turkey. We offer the Turkish people a lifestyle already highly appreciated in other developed nations. The Derindere Group of Companies brings the future to your doorstep. Hereby, we would like to extend our gratitude to our shareholders, customers, employees and stakeholders for their diligent efforts that have been fundamental to the Company’s achievements in 2015.
Board of Directors
As always, DRD continues to operate as an innovative and pioneering company in its sector, narrating a story that tells the future.
Born in 1969 in Kayseri, İlkay Ersoy began his professional career in 1991 at Garanti Bank. After serving in various roles at Garanti Bank until 2007, he joined DRD Fleet Leasing company. Mr. Ersoy, who has served as the General Manager at DRD Fleet Leasing since 2010, also served as TOKKDER Chairman of Board between 2012 and 2015, and at present is also a Board Member at Intermak Auto Leasing Company operating in Russia.
The year 2015 was a period of economic and political uncertainty
Although 2015 was marked by economic and political uncertainty in Turkey and globally, DRD closed the year with results that far exceeded its initial targets. Despite fluctuations in exchange rates during the year, and the considerable depreciation of the Turkish lira against the euro and dollar, our achievements confirmed our consistent leadership as a company capable of both strategic risk management and deft adaptation to change.
As of year-end 2015, the Company’s total sales had risen 18% over the prior year, standing at TL 667,293 million. Far higher than the initial target, this sales figure is a result of deliberative, productive business processes. Conditions in the financial markets, and particularly the effect of exchange rate fluctuations on the automobile industry, placed significant pressure on the brands. However, the Company took all necessary measures to prevent these adversities from affecting its car investment plans, and managed to bring its total fleet to above 27,000 cars in 2015.
DRD attaches great importance to its workforce and their training
DRD is a constantly expanding family, and we place particular importance on employees and their training. Last year, our workforce included a total of 300 individuals. As always, DRD is living according to its principle of operating as an innovative and pioneer company in its sector. We are fully aware that our high-caliber workforce is our most important asset in attaining our targets while adhering to this principle, and so we make ambitious investments in our human resources. In 2015, the Company laid the foundations of the DRD Academy. Opening its doors in 2016, the Academy confirms yet again the importance we attach to our workforce and their training. A first of its kind in the sector, DRD Academy will cater to the sector’s urgent demand for competent personnel, and provide career planning opportunities for our employees.
We know that conducting business is becoming even more challenging in these highly competitive times. We view our employees as part of the family, and do our utmost to provide them with a pleasant and stress-free working environment. By offering them rich opportunities and powerful infrastructure, we hope to inspire in them a passion for their work.
We have made progress by positioning customer satisfaction above all else
Customer satisfaction is our top priority. We continue to offer around-the-clock services on our mobile and digital platforms, which allow us to reach out to thousands of clients at the same time. We touch clients’ lives through our investments in software, and meticulously monitor our own performance in their lives. In this respect, we receive crucial feedback from our customers through the Touch Point application, designed to improve our processes, boost service quality, and collect customer reviews.
An integrated perspective is an essential condition in our sector. To achieve success, all operational units have to operate with speed, as well as coordination and harmony. We hold customer satisfaction above all else in our business processes, which rely on the latest technology and digital innovations to advance service quality and speed. In 2015, we carried out a total of 132,000 tire replacements and 55,000 maintenance operations. Expanding our customer portfolio is among our main objectives. As of year-end 2015, the total number of our customers has reached ? 5,000 - a confirmation of the brand’s rising preferability.
DRD keeps a sharp eye on technology and launches innovations
The Company undertakes continuous investments in technology, and maintains its competitive edge. One of our most central achievements in 2015 was our selection as one of Turkey’s Digitization Leaders by the Accenture Digitization Index.
Long-term leasing opportunities for individuals
One-year sales towards individuals, initiated last year, continued in 2015 with a systematic approach. In addition to sales strategies aimed at specific professional groups, the Company blazed a trail by offering individuals the opportunity to more easily rent cars through its technological infrastructure. The Company is laying the groundwork for the individual car leasing sector of the future. DRD offers seamless, top-quality services with its after-sales operations and extensive service station network.
THE DIGITAL PIONEER OF THE SECTOR
THE ACCENTURE DIGITIZATION INDEX LISTED DRD AMONG TURKEY’S MOST DIGITIZED COMPANIES AND NAMED IT THE DIGITIZATION LEADER IN ITS SECTOR, FILLING US WITH PRIDE.
In operational fleet rentals, a key business for DRD for many years, the Company continues to offer high quality services to clients. Our investments, especially those at the upper end of our car fleet, are an indication of the value and importance we attach to our clients.
We put the world-renowned CRM program, Salesforce, into service for our sales team to strengthen their capabilities, help them save time, and allow them to establish a much closer and comfortable relationship with clients.
The Salesforce application delivers comprehensive information on our 5,000 clients to the fingertips of our sales team, enabling us to fully meet our clients’ expectations and needs. We have established two-way communications to ensure that our customers can also follow us.
We embarked on this journey nearly 20 years ago, narrating a story that tells the future. Our business partners, customers and employees have always been the main characters in this story. With their support we became “Turkey’s largest operational fleet leasing company established with 100% domestic capital”; now, we crown this track record with new achievements in the field of private leasing, and extend our pioneering approach to every field.
DRD Fleet Leasing pioneering the fleet leasing sector which began to take our country in the 90s, in the operational fleet leasing business segment it started to operate with 20 vehicles in 1998, is the largest domestic-owned brand with an active fleet of 27.000 units and 5.000 customers in the portfolio.
In addition to its General Management headquarters located in Istanbul-Kağıthane, the brand, with Regional Offices in Ankara, Adana, Bursa, Izmir, Gaziantep, Konya and Kayseri provinces supports an extensive operational network with 1,300 service centers covering the entire region.
In parallel with the vehicle investments carried out on a regular basis in the last three years and the increase in the value of fleet, total assets amounted to TL 1 billion 900 million by the end of 2015. The sum of shareholders' equity in the balance sheet size amounted to TL 240 million. DRD, with an annual turnover reaching TL 667 million including used vehicle sales, was included among the first 500 companies in Capital and Fortune assessments.
In addition to the operating profit amounting to TL 239 million and pre-tax profit of TL 138 million obtained in 2015, the significant development in international credit rating process, are concrete indicators of financial strength of DRD.
DRD, by signing efficient business processes also in 2012, moved its financial profitability and operational efficiency to higher levels. DRD, builds its sales and marketing strategy on the basis of sustainability and in order to fulfill the objectives, using resources in the best way, acts in rational competitive conditions.
Company realized in 2015 a growth above the industry average. In 2015, DRD Fleet Leasing has achieved a growth rate of approximately 24%. Company, in this process also has added new clients to its portfolio and succeeded to increase the number of customers from 3,757 to 4,655. This growth in customer portfolio of DRD, is an important indicator of the high-quality service and customer loyalty.
DRD Fleet Leasing, the leading brand of the operational leasing industry in our country, issued its 2011 annual report which is the "first" with its scope in operational leasing industry in Turkey. Following its "first" annual report published in the sector in this context, DRD published its 2012 annual report in the first half of 2013.
With Price Waterhouse Coopers approved financial data in the Annex, DRD Annual Report offers all detailed descriptions relating to the Company's financial and operational data transparently. In addition, the report containing information on operational leasing sector in our country and the world, and the data on the first comprehensive report conducted in relation to the clear measurability of the operational leasing sector in our country in cooperation with TNS Global under the leadership of TOKKDER, also undertakes the task to be "an important guide for the evaluation of the industry and the market".
DRD, offering the business partners transparently with its financial credibility passing through independent audits for many years, is the first operational fleet brand with largest domestic capital assessed by international rating agency Standart&Poor's Rating Services in "investable" level.
Standard&Poor’s Rating Services:
|Short - Term||A-3|
|Long - Term||BBB|
|Long - Term|
The volume of operational leasing sector in Turkey is gaining momentum in parallel with the rising consciousness level regarding products and services provided in addition to the increase in awareness and demand, and customer satisfaction and a high level of adoption of the technology is increasing industry-wide. In addition to large companies, SME companies to begin resolving vehicle needs by operational leasing instead of buying, opens new development opportunities for the sector ; and in this direction the outlook of the fleet leasing sector in Turkey is being assessed as "positive" by Standart&Poor's Rating Services organization.
The continuation of the progress made in the amounts of net working capital of DRD and the upward trend in customer portfolio granularity to provide significant improvements in the management of Company's liquidity; in addition, the developments in capitalization level through a remarkable improvement provided in net profitability indicators and the relative reduction in the section of the Company's assets funded by financial liabilities, led to permanent improvements in the composition of the balance sheet and has played an active role in Short-Term and Long-Term growth of the National Grades of the Company.
The immunity structure of DRD which managed to increase its sales volume by maintaining a rational pricing strategy in intense competition is quite solid in the process of stable growth trend in recent years. DRD, which has become one of the largest operational leasing companies at the local level with its constantly renewed fleet, successfully maintains its steady growth.
Since 2008, although not mandatory, every three months passing through independent audit according to IFRS standards, DRD, in addition to financial data, is subjecting to independent audit its operational indicators to make a proper analysis for the industry.
|Type: 1 Economic Growth|
|National Income||Billion $||720||800||820,0||790,6||776,4|
|Type: 2 Inflation|
|Type: 3 Exchange Rates|
|Type: 4 Foreign Trade and Balance of Payments|
|Direct Foreign Investments||Billion $||16,8||12,5||12,9||13,2||16,2|
|Current Account Balance||Billion $||-32,199||-45,836||-47,7||-47,5||-75,1|
|Current Account Balance / GDP||%||-4,5||-5,7||-5,8||-6,0||-9,7|
|Central Bank Foreign Exchange Reserves||Billion $||92,9||106,3||112,0||100,3||78,3|
|Type: 5 Central Government Budget|
|Budget Deficit / GDP||%||-1,2||-1,3||-1,2||-2,0||-1,4|
|Primary Balance||Billion $||30,4||27,2||31,5||19,6||24,4|
|Primary Balance / GDP (Budget)||%||1,6||1,5||2,0||1,4||1,9|
|Type: 6 Interests|
|Reference Interest on Treasury Bonds (Average)||%||9,7||9,3||7,4||8,4||8,8|
|Real Interest Rates (ex-ante)||%||2,5||2,5||3||2||2,4|
|CBT Weekly Repo Rate||%||7,5||8,25||4,5||5,5||5,75|