ADP LLC Michael Bieger Sr. Director Global Procurement
ADP and LEV s in North America or How North America went from Last to Last (but a better last)
ADP s first account was in Paterson, New Jersey in 1949 A comprehensive global provider of cloud-based Human Capital Management (HCM) solutions uniting HR, payroll, talent, time, tax, and benefit administration A leader in business outsourcing services, analytics and benefits administration 650,000 clients in more than 110 countries 2013 Fortune named ADP one of worlds most admired companies
Global fleet; 2009, the view at the beginning Known global spend in excess of $60MM annually 2 companies; ADP Inc., ADP Dealer Services 19 countries; 21 with Canada & US 34 makes 24 lessors 1,388 vehicles EU, 1,854 vehicles North America No standardized processes across the globe Lack of centralized oversight and direction Fix what no one wanted fixed
Why fix fleet what s the benefit Understand actual global exposure Unified approach to spend Consolidated data collection and reporting Actionable analysis to drive down costs One point of contact for global suppliers and local ADP operations (fleet) personnel Environmental oversight at global level Leverage (when needed) to drive change Coordinate unified ADP response to sales/supplier relationship Central control to manage unified approach to spend 6
Prioritizing Action Items CO2 reduction 2012 start date Lessor consolidation Limit assoc. excess ability to contribute to cost of vehicle and options above their selector Limit vehicle choice selectors Manufacturer consolidation Matrix-bidding Multi-bidding Pay as you go Unbundle insurance Unbundle service Use fleet management co
Go Green or Bust Strong movement in control of EMEA fleet in 2012 led to first steps in emissions control Global mandate set at 140 g/km fleet average per country 280 260 240 220 200 180 160 140 120 100 2012 Fleet Average CO2 per Country at 258 g/km - we were winning! GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
Cost Drivers Examined Acquisition / Sale Hybrid option Higher trim levels Taxes/tax breaks/registration OEM Discounts Current fuel prices Market demand Maintenance Two powertrains Higher trim levels Repair expertise Dealer vs. corner shop Operating Cost Drivers Depreciation and Interest Greater carrying cost Adjusted lifecycle Higher and longer interest payments Fuel / Battery Fuel price fluctuation High=good / Low=bad Battery costs / lifecycle
Cost Driver Results 27,000 25,000 23,000 21,000 19,000 17,000 15,000 Average Capitalized Cost by Model Year 2010 2011 2012 2013 2014 2015 2016 2017 Eco-boost and mild hybrids Full hybrid Capitalized Cost Hybrid only on more expensive models and higher trim levels Lower OEM discount structure due to hybrid being loss leaders Battery cost and 2 nd powertrain increase vehicle costs Global mandate set at 140 g/km fleet average per country hybrids needed to meet goal
Cost Driver Results (cont.) 1,000 900 800 700 600 500 400 300 200 100 - Total Monthly Operating Cost per Car 302 288 252 162 124 118 343 281 396 396 374 395 2012 2013 2014 2015 2016 2017 Depreciation Funding & Management Fees Registration & Tax Fuel Collision & Safety Maintenance, Tires & Rental Vehicle Operating Cost Monthly operating cost 2012-2017: Total - $839/mo. to $724/mo. Fuel - $302/mo. to $118/mo. Lease - $343/mo. to $395/mo.
Cost Driver Results (cont.) $80 $30 $(20) $(70) $(120) $(170) $(220) 51.65 Depreciation Cost Variance by Category 2012 to 2017 Increased purchase price (2.78) 6.45 Funding & Registration & Management Tax Fees Fuel (183.71) 4.26 9.68 Collision & Safety Maintenance, Tires & Rental Net (114.46) monthly lease cost license and title and tax Extended lifecycle to ameliorate increased lease control funding fees Reduction in monthly fuel More costly components increased cost of repair Increased cost of upkeep
CO2 Emission Results 280 260 240 220 200 180 160 140 120 100 2012 Fleet Fleet Average CO2 CO2 per per Country GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016 Expect to hit 140 g/km goal by end of fiscal 2017, June 30 Still Winning at 158 but we beat Romania!
Initiative Results Reduced fuel consumption and cost 47 gal s/mo. reduction in fuel; from 93 to 46 gallons $1.35M fuel savings since program inception $90k savings from fuel price decrease last 3 years Reduced GHG footprint by 52%; from average of 23.5 mpg to 35.7 mpg Avoided 4,571 tons CO2 since 2013 start of initiative Embodies ADP culture of Social Responsibility Supports ADP sales efforts for the field Moved global goal to a maximum country average of 110 g/km Currently reviewing electric vehicles