Grenke AG — Earnings Release 2008

Jan 5, 2009

News Details

Corporate | 5 January 2009 07:57

GRENKELEASING AG: New Business 2008

GRENKELEASING AG / Miscellaneous/Miscellaneous

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The issuer / publisher is solely responsible for the content of this announcement.

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• Increase in new business of the GRENKE Group by 18.0 %
• Contribution Margin 2 of new business of the GRENKE Group reaches EUR
  87.8 million for the full year (up 32.6 % yoy) and a record level for
  the fourth quarter

Baden-Baden, 05 January 2009: GRENKE Group (incl. franchise partners)
generated in 2008 a volume of new business – i.e. the sum total of
acquisition costs of newly purchased leasing assets and factoring volume –
amounting to EUR 601.0 million (2007: EUR 509.1 million). Together with the
considerably increased leasing-margins (CM1 and CM2) and the highest
CM2-margin in the fourth quarter since introducing the CM2-measure this is
a very pleasant development.

The positive trend in new business development of the previous quarters
continued in the fourth quarter (24.0 % in the fourth quarter, 21.4 % in
the third quarter,19 % in the second quarter and 7.2 % in the first
quarter, year-on-year in each case) leading to a growth rate of 18.0 % in
new business by the GRENKE Group including franchise partners is in line
with expectations. Foreign business remains the primary growth driver, with
35.4 % in growth, as well as the ongoing expansion of our franchise
activities.

New business volumes in EUR million

                                             2008     2007    % change

GRENKE Group including franchise partners 601.0 509.1 18.0
- of which: Germany 320.1 301.8 6.1
- of which: International 280.9 207.4 35.4
GRENKE Group leasing business* 542.9 460.4 17.9
Franchise partners** 93.4 96.3 -3.0
- of which Factoring business (Germany) 58.1 48.8 19.1

* excl. factoring

** The new business acquired in the United Kingdom and Poland will not be
included in the volume of the franchise partners from 2008 since we took
over the franchise partners in the UK and Poland in January 2008.

Growth of new business of the GRENKE Group international at 35.4 %
year-on-year, and the substantial increase in contribution margin 2 (CM2),
up by 60.2 % reflects a highly gratifying development in terms of
profitability. The international business contributed a share of 46.7 %
(previous year: 40.7 %) to the new business of the GRENKE Group.

France remains the key growth driver abroad, up by 22.1 %. In France we
generated in 2008 a new business volume of EUR 125.5 million. In January
2009 we will perform a further cell division, with the opening of the
branch office Paris III we are now represented in nine locations in France.

In Italy we record a further high speed of growth and nearly doubled the
new business volume with EUR 30.2 million compared to previous year (2007:
EUR 16.6 million). Besides Milan and Genoa we opened our third branch in
Bologna in November.

The positive growth of new business in our foreign markets UK and Poland
continued. In the UK we recorded a growth of 56.8 % and achieved new
business of EUR 19.7 million. In Poland we reached EUR 13.8 million new
business corresponding to a growth of 16.0 %.

In the Netherlands we exceeded the 10-million hurdle and generated a new
business of EUR 11.6 million. Our further international markets are showing
above-average performance and are increasingly reaching volumes of
relevance.

New business from leasing by foreign markets in EUR million

                                      2008      2007         % change

France 125.5 102.8 22.1
Switzerland 16.2 16.8 -3.6
Italy 30.2 16.6 81.7
Spain (incl. franchise Madrid) 18.4 12.1 52.6
United Kingdom 19.7 12.6 56.8
Poland 13.8 11.9 16.0
Netherlands 11.6 7.1 64.3

In 2008, the CM1 margin of leasing operations of the GRENKE Group
(contribution margin 1 at acquisition values) reached our target margin of
10 % at a value of EUR 57.9 million (2007: EUR 47.1 million – comparative
figure for leasing operations). The CM1 margin at 10.7 % and the level of
growth year-on-year reflect quite a positive trend against the background
of rising funding costs.

The corresponding contribution margin CM2 amounts to EUR 86.2 million
(2007: EUR 65.1 million) up by gratifying 32.3 % and grew year-on-year even
stronger than CM1. With this result we have generated in the fourth quarter
in spite of increased funding costs the most profitable leasing business
measured in terms of CM2-margin since introducing CM2. In particular, the
CM2 trend of foreign operations, with an increase of 60.2 %, shows that the
anticipated easing of the competitive situation has indeed occurred.
Overall this shows very clearly our focus on contribution margin growth as
a base for good profitability even in economically challenging times.

Development of contribution margin 2 (CM2) in EUR million

                                             2008    2007    % change

GRENKE Group including franchise partners 87.8 66.2 32.6
- of which: Germany 39.9 36.3 10.0
- of which: International 47.8 29.9 60.2
GRENKE Group leasing business* 86.2 65.1 32.3
Franchise business** 7.3 6.2 18.2
France 21.1 14.6 44.2
Switzerland 3.5 3.5 -1.3
Italy 4.6 2.2 108.5
Spain (incl. franchise Madrid) 3.1 1.5 104.0
United Kingdom 3.3 1.6 105.4
Poland 1.6 1.3 24.2
Netherlands 2.2 1.1 94.8

* exkl. Factoring

** Contribution margin 2 of the United Kingdom and Poland will no longer be
included in CM2 of the franchise partners from 2008 since we took over the
franchise partners in the UK and Poland in January 2008.

The profit margin in relation to the factoring volume of EUR 58.1 million
amounted to 2.0 % (2007: 2.25 %). This margin relates to the average period
of a factoring transaction, amounting to approx. 34 days (2007: 40 days).

In 2008 the GRENKE Group recorded a total of 145,384 leasing inquiries (ex
Germany 81,256) and of which 69,824 new leasing contracts (ex Germany
37,162) were generated. The average value per contract concluded came to
approx. EUR 7,775 and is nearly unchanged compared to the previous year
(2007: EUR 7,673 – comparative figure adjusted accordingly).

'In line with our expectations we closed 2008 with a growth in new business
volume exeeding 15%. Growth and profitability of new business saw a very
positive development and were ahead of schedule. The CM1 margin at 10.7 %
and the level of growth year-on-year reflect quite a positive trend against
the background of rising funding costs. The positive trend in CM2 growth
continued in the fourth quarter and has reached the highest level in
absolute terms and in terms of margin since introducing CM2 as our key
measure of profitability of new business. With this development in
contribution margins we are well prepared for the challenging macro
economical developments lying ahead.' said Dr. Uwe Hack, Deputy Chairman of
the Executive Board of GRENKELEASING AG, in explaining the figures.

He added: 'Encouraging is the fact that the international business is
meanwhile being supported by a total of seven countries, with each to
report a volume of new business in excess of EUR 10 million for the year.
In the Netherlands we generated in 2008 new business of EUR 11.6 million
and showed once again that we succeed in implementing our business model in
new markets.'

The GRENKE Group (incl. franchise partners) now operates in twenty European
countries.

The GRENKELEASING AG Group (excluding franchise partners) is represented in
20 German cities. In addition to nine branches in France, three in
Switzerland and three in Italy, the enterprise operates with subsidiaries
in Austria, Czechia, Spain, the Netherlands, Denmark, Sweden, Ireland,
United Kingdom, Poland and Belgium.

In the Norway, Hungary, Romania, Spain (Madrid), Portugal, Slovakia and
Finland as well as in Germany in the field of car leasing and factoring,
GRENKELEASING has a franchise system in place.

GRENKELEASING offers contracts predominantly in the field of small-ticket
IT leasing for such products as PCs, notebooks, copiers, printers or
software of a relatively low asset value.

GRENKELEASING AG shares are listed at Frankfurt Stock Exchange (SDAX) with
the code GLJ, ISIN DE0005865901.

Information on the company and its products is available on the Internet
under www.grenke.de.

The company will publish its audited consolidated financial statements 2008
on 5 February 2009.

Should you have any queries, please contact:

Renate Hauss
Tel.: 0049-7221/5007-204
Fax: 0049-7221/5007-112
Email: investor@grenke.de
Internet: www.grenke.de
05.01.2009 Financial News transmitted by DGAP

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

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