Grenke AG — Earnings Release 2006

Oct 26, 2006

News Details

Ad-hoc | 26 October 2006 07:04

GRENKELEASING AG: Earnings after taxes came to EUR 23.3 million in the first nine months of 2006 (+ 7.4 % year-on-year)

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Baden-Baden, 26 October 2006: GRENKELEASING posts a net profit for the period before taxes (EBT) of EUR 36.8 million for the first nine months of the year compared to EUR 34.6 million in 2005, marking a year-on-year increase of 6.3 %. Earnings after taxes rose in the first nine months of 2006 to a level of EUR 23.3 million (9M 2005: EUR 21.7 million), growing by 7.4 % year-on-year, but fell short of the double digit growth target. Accordingly we expect earnings after taxes to rise to around EUR 30.5 million for the full year 2006. As already reported, the company’s new business (i.e. the total acquisition costs of newly purchased leased assets and receivables) came to EUR 332.7 million in the first nine months of 2006 (compared to EUR 303.6 million over the same period of 2005), marking a year-on-year increase of 9.6 %. GRENKELEASING’s business in foreign markets grew by 21.4 % year-on-year and contributed 35.1 % (first nine months of 2005: 32.0 %) to the group’s new business. Its French subsidiary achieved a growth rate of 25.0 %. In Switzerland, business improved by 5.9 %, while in Germany new business also rose slightly by 4.1 %. The new business generated by the group’s franchise partners increased by 205.8 % to a figure of EUR 34.6 million (first nine months of 2005: EUR 11.3 million). The CB1 margin (contribution margin 1 at acquisition cost) again exceeded our 10 % target margin in the first nine months of 2006. It amounted to EUR 34.1 million in the first nine months of this year (first nine months of 2005: EUR 35.4 million). Contribution margin 2 rose to EUR 43.7 million in the first nine months. EPS (according to IFRS) rose from EUR 1.59 in the previous year to EUR 1.70 this year. The full nine months report for 2006 is available on the internet under www.grenkeleasing.de – Investor Relations – Financial Data. The Executive Board Should you have any queries, please contact: Renate Hauss Tel: 07221/5007-204 Fax: 07221/5007-112 E-mail: investor@grenkeleasing.de Internet: http://www.grenkeleasing.de End of ad hoc announcement ————————————————————————— Information and Explaination of the Issuer to this News: “Earnings growth (EBT) of 6.3 % is somewhat below our double-digit growth target. The slowing of earnings momentum was partly due to the continuous rise in interest rates over the last nine months. This is clearly evident from a look at the financial statement under the item interest expenses. Furthermore, within the scope of expanding our international business, we have made investments in additional personnel, causing a disproportional increase in personnel expenses. These factors are likely to mean we will fall short of our double-digit earnings growth target for the full-year 2006 and achieve after tax profit of around EUR 30.5 million“, explained Uwe Hack, CFO of GRENKELEASING AG. He further explained that “due to the time lags typical of the leasing business, refinancing cost grow as market interest rates rise while the terms for new business adjusted to reflect the development in interest rates do not lead to higher income until subsequent periods.” “New business growth of 9.6 % year-on-year and growth of 2.5 % in the third quarter of 2006 reflect a similar restrained trend for the entire leasing sector in Q3. The BDL (German Leasing Association) attributes this in part to the tax debate over the last few months.” According to the BDL, “The debate on the issue of including interest and lease payments in the assessment base for the corporate income tax is already souring the investment climate in Germany”. The BDL Investment Indicator, which is based on the future estimates of the leasing companies and which is determined by the BDL in cooperation with the Ifo Institute for Economic Research, signals a decline in the growth of investments in machines and equipment in the second half of the year. The group recorded 83,231 leasing enquiries in the first nine months of 2006 (ex-Germany: 34,687), leading to the generation of 42,310 new leasing contracts (ex-Germany: 15,761). The average value per transacted contract came to EUR 7,864 and is thus again higher than in the previous year (first nine months of 2005: EUR 7,364). The new business was generated by 381 employees (9 months 2005: 327) working in the GRENKELEASING Group and 53 employees engaged in the franchise operations. The company now has operations in 16 European countries. GRENKELEASING is represented in 20 cities throughout Germany. In addition to its six French branch offices and three branch offices in Switzerland, the company has subsidiaries in Austria, Italy, the Czech Republic, Spain, the Netherlands, Denmark, Sweden, Ireland, and Belgium. A franchise system gives GRENKELEASING a presence in the UK, Poland, Norway, Hungary, and in Germany in the field of car leasing and factoring. GRENKELEASING mainly offers small-ticket IT leasing contracts, i.e. for products such as PCs, notebooks, copiers, printers, or software having relatively small transaction values. The company is the German and Swiss market leader in this segment. GRENKELEASING AG is listed in the Prime Standard segment of the German stock exchange in Frankfurt and has a listing on the SDAX (small-cap) index. Information on the company and its products is available on the Internet under http://www.grenke.de. (c)DGAP 26.10.2006 ————————————————————————— Language: English Issuer: GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden Deutschland Phone: +49 (0)7221 50 07-204 Fax: +49 (0)7221 50 07-112 E-mail: investor@grenkeleasing.de WWW: www.grenkeleasing.de ISIN: DE0005865901 WKN: 586590 Indices: SDAX Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-Bremen, Stuttgart, München, Düsseldorf, Hamburg End of News DGAP News-Service —————————————————————————