Grenke AG — Earnings Release 2009

Oct 2, 2009

News Details

Corporate | 2 October 2009 07:46

GRENKELEASING AG: New Business in First Nine Months of 2009

GRENKELEASING AG / Miscellaneous

02.10.2009

Dissemination of a Corporate News, transmitted by
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The issuer / publisher is solely responsible for the content of this announcement.

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• New business in the GRENKE Group amounts to EUR 345.8 million in the
  first nine months of 2009. Contribution margin (CM) 2 on new business
  in the GRENKE Group amounts to EUR 60.2 million in the first nine
  months of 2009, remaining at a record level with a CM2 margin of 19.4 %
  (leasing business)

• Focus still on profitability and risk management

Baden-Baden, October 2, 2009: The easing on the money and capital markets
continued over the course of the third quarter and our refinancing
situation in particular again improved significantly. In addition to an
increase in deposit volumes to EUR 108 million at GRENKE BANK Bank, we
placed a bond of EUR 100 million and concluded a fourth ABS programme with
a volume of EUR 150 million, thereby establishing the conditions for future
growth.

In connection with the improving overall economic situation, we therefore
began to readjust towards volume growth in the third quarter while
maintaining high CM1 and CM2 margins. As shown by the continuing high
number of leasing inquiries, leasing is still sought after in the current
economic environment. In the first nine months of 2009, we received 108,128
inquiries as against 105,440 in the previous year. This trend was even more
pronounced at an international level with a rise in the number of inquiries
of 13.7 % year-on-year. The development in the conversion rate (inquiries
to contracts) reflects our shift towards more volume growth; the conversion
rate in the GRENKE Group climbed to 41.3 % in the third quarter 2009
compared to 39.2 % in the first half of 2009, and from 35.3 % to 40.5 %
internationally.

The effects of the refocus were also plainly seen in the individual
international markets. As against the first half of 2009, the new business
volume in our largest international market of France, in addition to
Switzerland, Italy and the UK, developed in line with the refocus in the
third quarter of 2009 and this trend is expected to accelerate in the
fourth quarter. The shift in focus towards volume growth is working its way
through different markets with different time lags. In view of the still
existing overall economic uncertainty we put continued emphasis on above
average profitability. Nonetheless, we wish to take advantage of the growth
opportunities that present themselves wherever the general economic
developments permit it.

Overall, however, the performance in new business in the first nine months
was still heavily influenced by our restrictive management in terms of risk
and profitability during the first half. This can also be seen in the
development of the contribution margin for the first nine months of 2009.
With a new business volume in the GRENKE Group (including its franchise
partners) - i.e. the sum total of acquisition costs of newly purchased
leased assets and factoring volume - of EUR 345.8 million in the first nine
months of 2009 (9M 2008: EUR 433.8 million), in our leasing business CM1
(CM1 margin of 13.7 %) and in particular our CM2 (CM2 margin of 19.4 %) are
still at a above average high level.

The international segment contributed a share of 48.4 % to the new business
of the GRENKE Group (previous year: 47.1 %). Considering the 18.1 %
reduction in our new business volume, the 4.3 % rise in our CM2 margin
illustrates the highly positive profitability trend in our international
business. We again generated particularly encouraging growth rates in the
Netherlands and in the leasing franchise segment, though these markets
still rank among our smaller ones in terms of their absolute volume.

New business volumes in EUR million

                                     9-months      9-months
                                         2009          2008   % change

GRENKE Group including franchise
partners 345.8 433.8 -20.3
- of which: Germany 178.6 229.5 -22.2
- of which: International 167.3 204.3 -18.1
-GRENKE Group leasing business* 309.1 394.0 -21.6
Franchise partners** 30.7 62.8 -51.1
Factoring business (Germany) 36.8 39.8 -7.7
Deposits GRENKE BANK 107.9 0 n.a.

*excl. factoring

** The factoring new business is no longer included in the franchise
partner volume as we acquired the franchise partner in August 2009. The
figures were restated for the year 2009 as a whole.

New business from leasing by foreign markets in EUR million

                             9-months 2009   9-months 2008   % change

France 60.9 93.1 -34.6
Switzerland 10.8 12.8 -15.3
Italy 17.8 22.6 -21.2
Spain (incl. franchise Madrid) 10.5 12.9 -18.1
United Kingdom 9.9 15.0 -34.0
Poland 8.1 10.0 -18.8
Netherlands 8.5 7.9 7.3

At 13.7 % in the first nine months of 2009, the CM1 margin for the GRENKE
Group's leasing operations (contribution margin 1 at acquisition value)
substantially exceeded our target margin of 10 % and the previous year's
margins, reaching a value of EUR 42.3 million (9M 2008: EUR 41.9 million -
comparative figure for leasing business). At EUR 59.9 million, the
corresponding CM2 is stable year-on-year with a lower volume of new
business (9M 2008: EUR 59.6 million). Thus, in terms of CM2 we succeeded in
concluding highly profitable new leasing business in the first nine months
of 2009 in spite of increased refinancing costs.

Development of contribution margin 2 (CM2) in EUR million

                                     9-months      9-months
                                         2009          2008   % change

GRENKE Group including franchise
partners 60.2 60.6 -0.7
- of which: Germany 26.3 28.1 -6.4
- of which: International 33.9 32.5 4.3
GRENKE Group leasing business* 59.9 59.6 0.5
Franchise business** 5.6 4.4 26.0
France 13.3 14.6 -9.0
Switzerland 2.4 2.7 -11.9
Italy 2.9 3.3 -12.3
Spain (incl. franchise Madrid) 1.8 2.1 -11.3
United Kingdom 2.1 2.2 -3.7
Poland 1.0 1.1 -9.7
Netherlands 1.8 1.4 29.7

*Not including factoring

** New factoring business is no longer included in the franchise partner
volume as we acquired the franchise partner in August 2009. The figures
were restated for the year 2009 as a whole.

The profit margin in relation to the factoring volume of EUR 36.8 million
amounted to 1.86 % (9-months 2008: 2.1 %). This margin relates to the
average period of a factoring transaction, amounting to approx. 31 days
(9-months 2008: approx 32 days).

In the first nine months 2009 GRENKE Group recorded a total of 108,128
leasing inquiries (ex Germany 64,883) and of which 43,093 new leasing
contracts (ex Germany 23,996) were generated. The average value per
contract concluded came to approx. EUR 7,172 and decreased compared to the
previous year (9-months 2008: EUR 7,732).

'The positive performance on the international markets in terms of new
business volume and strong contribution margins generated by the shift in
the company's focus in the third quarter shows that the GRENKE Group's
focus and business model are highly successful even in a difficult market
environment. The change in trend towards volume growth is expected to
accelerate in the fourth quarter and the consistently positive inquiry
figures show that demand for lease finance is out there,' explained Dr. Uwe
Hack, Deputy Chairman of the Executive Board of GRENKELEASING AG.

He continued: 'Our diversified refinancing basis developed well thanks to
the successful placement in August. We have again used all the components
of our financing range since the start of the financial crisis and have
also profited from the deposits business of GRENKE BANK. In addition to
issuing promissory notes and bonds, we also concluded another ABS programme
with a volume of EUR 150 million. Our liquidity resources are therefore
still at a very high level and we can take advantage of the opportunities
for profitable new business that present themselves as a result of, among
other things, the repositioning of competitors.'

The company will publish its detailed Quarterly Financial Report as per
September 30, 2009 on October 28, 2009.

The Executive Board

Should you have any queries, please contact:

Renate Hauss

Tel.: +49 -7221/5007-204

Fax: +49 - 7221/5007-112

E-mail:

Internet:http://www.grenke.de, http://www.grenkebank.de,
http://www.grenkefactoring.de

The GRENKE Group

The GRENKE Group is a broadly diversified provider of financial services
for small to medium-sized enterprises and for private retail clients.

The GRENKE Group comprises of companies which operate in fourteen European
countries, all being part of the consolidated GRENKELEASING corporate
group. In addition the GRENKE Group is represented in six further countries
in Europe by way of a franchise system. Including its franchise partners,
the GRENKE Group is represented at 20 locations in Germany and a total of
32 locations internationally.

The range of services offered by the GRENKELEASING Group (not including
franchise partners) covers small-ticket IT leasing and factoring and -
through GRENKE BANK AG - classic online banking services.

GRENKE BANK AG emerged from Hamburger Privatbank Hesse Newman & Co. AG (a
private Bank since 1777), which was acquired by GRENKELEASING AG in
February 2009.

The bank- and vendor-independent GRENKE Group holds a leading market
position in Europe in the field of small-ticket IT leasing for products
such as PCs, notebooks, copiers, printers or software of relatively low
asset value. Its range is rounded off by Car Leasing from one of its
franchise partners.

GRENKELEASING AG is listed on the Prime Standard of the Frankfurt
Securities Exchange and is part of the SDAX.

The shares of GRENKELEASING AG are listed on the SDAX of the Frankfurt
Securities Exchange under the identification code GLJ, ISIN DE0005865901.

Information on the GRENKE Group and its products is available for download
on the Internet, at http://www.grenke.de, http://www.grenkebank.de,
http://www.grenkefactoring.de.

Should you have any queries, please contact:

Renate Hauss

Tel.: +49 -7221/5007-204

Fax: +49 - 7221/5007-112

E-mail:

Internet:http://www.grenke.de, http://www.grenkebank.de,
http://www.grenkefactoring.de

02.10.2009 Financial News transmitted by DGAP

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Language: English
Company: 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@grenke.de
Internet: www.grenke.de
ISIN: DE0005865901
WKN: 586590
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Düsseldorf, Stuttgart, Hamburg

End of News DGAP News-Service

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