Grenke AG — Earnings Release 2006

Jan 26, 2007

News Details

Ad-hoc | 26 January 2007 07:42

GRENKELEASING AG: after-tax profit rises by 5% in line with expectations. Executive Board and Supervisory Board propose a dividend increase of 10%.

GRENKELEASING AG / Final Results/Final Results

Ad hoc announcement according to § 15 WpHG transmitted by DGAP - a company
of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Baden-Baden, 26 January 2007: GRENKELEASING posted a net result before
interest and tax (EBIT) of EUR 48.1 million for financial year 2006,
representing a year-on-year increase of 3 % (2005: EUR 46.8 million).
After-tax profits increased by 5 % to EUR 30.5 million in 2006 (2005: EUR
29 million). Earnings per share (EPS) rose from EUR 2.13 to EUR 2.23 in
2006.

As already reported, the group’s new business (i.e. the total acquisition
costs of newly purchased leased assets and receivables) rose from a figure
of EUR 419 million in 2005 to EUR 460 million in 2006. This corresponds to
year-on-year growth in new business of 9.8 % for the full year 2006.

The growth in new business was marked by the company’s foreign activities.
Foreign business grew by 18.3 % against the previous year and contributed
35.5 % (previous year: 32.9 %) to the group’s new business. Its French
subsidiary achieved a growth rate of 18.4 %. In Switzerland, business
improved by 8.5 %, while in Germany new business also rose slightly by 5.5
%.

The new business generated by the group’s franchise partners increased by
240 % to a figure of EUR 55 million (previous year: EUR 16.2 million).

The CB1 margin (contribution margin 1 at acquisition value) again exceeded
our 10 % target margin in 2006. The CB1 for the full year 2006 amounted to
EUR 46.6 million (previous year: EUR 47.5 million), with the CB1 in the
fourth quarter 2006 again exceeding the corresponding value of the previous
year. Contribution margin 2 came to EUR 60.6 million in 2006, reaching a
level of EUR 16.9 million in the fourth quarter and thus significantly
increasing compared to the previous quarters.

At the annual general meeting due to be held on 8 May 2007, the Executive
Board and Supervisory Board shall submit a proposal for paying out a
dividend of EUR 0.55 per share for financial year 2006 (FY 2005: EUR 0.50
per share).

The GRENKELEASING Group’s financial report for 2006 is available under
www.grenkeleasing.de INVESTOR RELATIONS – Figures.

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

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Information and Explaination of the Issuer to this News:

'The continuous rise in interest rates in the reporting year weakened our
growth in earnings for 2006, as can be seen in the posted interest
expenses. Together with the costs for developing new geographical markets
and new product markets, this led to earnings growth of 5 % which is below
the growth rate of previous years. The cost/income ratio, a key performance
indicator that shows the ratio of costs to earnings, was somewhat higher in
2006 than in the previous year, amounting to 43.4 % against a figure of
40.6 % in 2005. The reason for this is that, within the scope of expansion
efforts, we have invested more in additional personnel, leading to an
above-average increase in personnel expenses but future growth in new
business and earnings', explained Dr. Uwe Hack, CFO of GRENKELEASING AG,
commenting on the financial statements.

By way of further explanation, he commented that: 'Our new business was
negatively affected by the general public debate on corporate taxation in
the third quarter of 2006, as is reflected in the similar trend of the
entire leasing sector in the third quarter. Despite this negative effect,
we still achieved a satisfactory growth in new business of 9.8 % for the
full year.'

'Through the strategic measures adopted in the reporting year and the
successful launch of new products, we have provided the basis for achieving
long term success through constant and profitable growth, hence also
increasing our enterprise value. We seek a growth in new business of around
10 % in 2007. We expect profits in 2007 to remain at the level of the
previous year, since we will continue to invest in the development of new
markets and products and the lower CB1 margin figures from new business in
2006, caused by the interest rate increases, will affect net income in
2007.', said Wolfgang Grenke, CEO of the company, outlining the corporate
objectives for 2007. 'As of 2008, this interest rate effect is expected to
wane and the changeover to the CB2 margin in our sales management is
expected to successively lead to a significant growth in earnings.'

The average number of employees came to 383 in 2006 against a figure of 339
in 2005 (on a full-time basis, excluding the Executive Board). 54 employees
work for the group’s franchise companies (previous year: 37).

The group recorded 111,987 leasing enquiries in financial year 2006
(ex-Germany: 47,337), leading to the generation of 56,983 new leasing
contracts (ex-Germany: 21,705). The average value per contract conclusion
came to EUR 8,073 and is thus higher than in the previous year (2005: EUR
7,427).

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.grenkeleasing.de.

DGAP 26.01.2007

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

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