Fleet Transformation in Motion: Driving EBITDA Gains Through Strategic Sourcing

Client Challenge

A European-wide network engineering business faced mounting pressure from both external and internal stakeholders to optimise its highly complex commercial fleet. 

Inorganic growth and diverse vehicle requirements had led to a sub-optimal, fragmented ownership model. A significant proportion of vehicle downtime was attributed to the ageing fleet, ultimately contributing to an oversized and inefficient operation. 

Combined with an extensive supplier base and a lack of strategic direction, this was having a detrimental impact on the business’s key financial metrics.

The H&Z Approach

H&Z started by collaborating with the client's pan-European operational teams to develop a Total Cost of Ownership (TCO) and gain a deeper understanding of their functional requirements, which is crucial when sourcing vehicles for specialised roles. Bespoke modelling enabled the H&Z team to determine the optimal fleet size achievable through reduced vehicle downtime. Additional financial modelling identified the suitable ownership type for each vehicle category, to deliver financial benefits.

With the vehicle requirements and optimal route to market established, H&Z engaged OEMs and lease companies in a group-wide tender, bundling European volume to leverage economies of scale, strengthen negotiation power, and streamline supplier management. Ensuring an optimal residual value of vehicles was a key measure to drive down costs and reduce liability.
 

The Results

H&Z leveraged their extensive fleet management expertise to:

• Drive competitive quotes through multiple shortlisting and negotiation rounds across financial and operational leasing options
• Develop forward-looking financial models to thoroughly analyse proposals, balancing maximum financial benefits with operational resilience
• Enable the client to confidently select optimal ownership structures and lease durations, tailored per vehicle category
• Deliver substantial financial outcomes over three years:
  • EBITDA improvement: 18%
  • EBITA improvement: 14%
  • Cashflow enhancement: 12%