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Grenke AG — Earnings Release 2010
Jul 2, 2010
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Earnings Release
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Ad-hoc | 2 July 2010 07:49
GRENKELEASING AG: Growth Trend of Q1 Further Reinforced – Development of New Business in First Half of 2010
GRENKELEASING AG / Miscellaneous
02.07.2010 07:49
Dissemination of an 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.
- In all markets - strong growth of new business in Q2 2010
- New business in the GRENKE Group amounts to EUR 325.6 million in the
first half of 2010. Contribution margin (CM) 2 on new business in the
GRENKE Group reaches EUR 50.2 million in the first half of 2010 and,
with a CM2 level of 16.1 % (leasing business), remains very high - Successfully positioned on the refinancing market
Baden-Baden, July 2, 2010: In the first half of 2010, the volume of new
business in the GRENKE Group (incl. franchise partners) - i.e. the sum
total of acquisition costs for newly acquired leasing assets and the
factoring volume - amounted to EUR 325.6 million (HY1-2009: EUR 228.5
million), corresponding to 42.5 % growth. The growth trend of the first
quarter of 2010 is thus continuing impressively. On the basis of the strong
new business in the first half of 2010, we are raising our growth target
for new business and consider growth of significantly over 20 % in new
business in the Group including franchise partners to be achievable in
2010. The current competitive situation and the increasing demand for lease
financing allow us to achieve the announced growth target with limited risk
and above-average contribution margins.
The basis for powerful growth is provided by our strong balance sheet and
the diversification of refinancing sources. In the second quarter, we once
again demonstrated our capacity for refinancing. In June we successfully
placed a EUR 100 million bond. The 20 % oversubscription rate highlights
GRENKELEASING's appeal to investors, also in light of the fact that the
bond was issued at a time and in an environment where only a small number
of companies succeeded in making use of the capital market. With our
successful positioning on the refinancing market, we have created the right
conditions for our further growth.
The development of the CM1 and CM2 margins in the first half of 2010
demonstrates that the focus on growth does not come at the expense of
profitability. The contribution margins remain above average - without
disregarding our strict risk criteria in selected markets. The excellent
growth in new business of 42.5 % as against the first half of 2009 also
represents considerable growth in comparison to the pre-crisis year 2008.
The international segment contributed a share of 59.4 % to the GRENKE
Group's new business (previous year: 46.8 %) and significantly exceeded the
50 % mark. A 54.3 % increase in the CM2 impressively illustrates the
profitability of our foreign business. The growth trend in our biggest
foreign markets - France, Italy and the UK - has continued unabated.
In the first half of 2010, GRENKE Group recorded a total of 98,678 leasing
inquiries (ex Germany 67,448) on the basis of which 41,491 new leasing
contracts (ex Germany 27,434) were generated. The average value per leasing
contract concluded came to approx. EUR 7,450 and is slightly up on the
previous-year figure (HY1-2009: EUR 7,145).
The number of inquiries, which reflects the demand for lease financing,
increased by 36.8 % year-on-year in the first half of 2010. Particularly in
our foreign markets, which saw a 54.4 % increase in inquiries as against
the previous year, our strong position in the respective markets and the
market share gains we are achieving are consistently reflected. The
conversion rate (inquiries to contracts) was 42 % in the first half of 2010
and still remains below our target level, partly due to the increased share
of foreign markets, although it is moving in the right direction. As a
rule, the conversion rate in our foreign markets is lower than the
conversion rate for the group as a whole, as we are not yet as well known
in new markets and have maintained a cautious risk policy in some
individual international markets.
The expansion in individual European markets, already begun in 2010, was
continued in the second quarter. As announced, we established our fourth
location in Italy with the opening of the Verona branch at the beginning of
the second quarter. The new business of our franchise partner in Portugal
is continuing to grow very quickly, meaning that a cell division could be
carried out there. A second location was opened in Porto. Further cell
divisions are planned at our international locations over the course of
financial year 2010 in order to position ourselves even more strongly in
these markets.
New business volumes in EUR million
HY1-2010 HY1-2009 % change
GRENKE Group including franchise partners 325.6 228.5 42.5
- of which: Germany 132.2 121.6 8.7
- of which: International 193.4 107.0 80.8
GRENKE Group leasing business* 309.1 201.8 53.2
Franchise business** 27.8 20.5 36.0
Factoring business (Germany) 16.4 26.7 -38.4
Deposits GRENKE BANK 134.6 76.9 75.1
*Not including factoring
** New business from factoring 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 international markets in EUR million
HY1-2010 HY1-2009 % change
France 74.1 39.7 86.8
Switzerland 9.2 6.8 35.7
Italy 29.9 11.2 167.6
Spain (incl. franchise Madrid) 9.1 7.1 28.2
United Kingdom 15.8 5.4 189.8
Poland 5.4 5.3 0.9
Netherlands 6.9 5.4 28.0
Portugal (franchise partner) 12.3 8.3 48.0
The CM1 level of the GRENKE Group's leasing operations (contribution margin
1 at acquisition values), at 11.2 % in the first half of 2010,
substantially exceeded our target margin of 10 %, reaching a value of EUR
34.8 million (HY1-2009: EUR 27.7 million - comparative figure for leasing
operations). The corresponding CM2 amounts to EUR 49.9 million, up by 26.5
% year-on-year.
To allow us to take advantage of the opportunity to gain market share
sustainably through significant growth, we reduced the CM2 specifications
to a certain extent. With a CM2 level of 16.1 % we remain well above the
pre-crisis average.
Development of contribution margin 2 (CM2) in EUR million
HY1-2010 HY1-2009 % change
GRENKE Group including franchise partners 50.2 39.7 26.4
- of which: Germany 16.1 17.6 -8.6
- of which: International 34.1 22.1 54.3
GRENKE Group leasing business* 49.9 39.4 26.5
Franchise business** 4.7 3.8 24.3
France 13.3 9.0 47.9
Switzerland 1.9 1.5 32.1
Italy 4.3 1.8 144.0
Spain (incl. franchise Madrid) 1.5 1.3 17.8
United Kingdom 3.0 1.2 149.7
Poland 0.6 0.7 -8.5
Netherlands 1.3 1.2 12.9
Portugal (franchise partner) 2.5 2.0 20.5
*Not including factoring
** New business from factoring 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 16.4 million
amounted to 2.3 % (HY1-2009: 1.8 %). This margin relates to the average
period of a factoring transaction, amounting to approx. 38 days (HY1-2009:
approx 35 days).
The cooperation with NRW.Bank started in March 2010 developed
encouragingly. As a result of this cooperation, small and medium-sized
companies as well as the self-employed will be able to claim supported
funds for the first time in order to finance new operational acquisitions
via leasing in North-Rhine Westphalia. More than 600 companies have made
use of this option in the past four months and were able to lease
future-oriented IT investments on particularly favourable terms. This
project also makes it clear what opportunities we are opening up to expand
the product range for our customers with GRENKE BANK, in addition to
diversification of our refinancing sources. In the first half of 2010,
GRENKE BANK AG held total deposits of EUR 134.6 million (HY1-2009: EUR 76.9
million), a stable level as compared to EUR 132.7 million in the first
quarter of 2010.
On July 29, 2010, the company is to publish the full quarterly financial
report as per June 30, 2010.
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 companies which operate in fourteen European
countries, all being part of the consolidated GRENKELEASING corporate
group. In addition the GRENKE Group is represented in seven 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 38 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 has been part of the GRENKELEASING Group since the beginning
of 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
Information and Explaination of the Issuer to this News:
'The GRENKE Group is fully on track for growth, as shown by the growth
rates in new business and the contribution margins for the first half of
2010. This development leads us to raise the forecast for growth in new
business in the Group including franchise partners from 15 % to well over
20 %. Particularly gratifying is the fact that we have not only grown again
in relation to the recession year of 2009 but we have also significantly
exceeded the new business volume of 2008, the year before the crisis, by
14.6 %. We succeeded in this while achieving above-average contribution
margins and without disregarding the risk profile for new business. We can
benefit from this combination in the future as the demand for leasing
remains strong,' commented Dr. Uwe Hack, Deputy Chairman of the Board of
Directors of GRENKELEASING AG.
Further information:
'The basis for this growth is provided by our strong balance sheet and the
availability of funds for refinancing. At the beginning of the year we
placed an ABS bond and we recently issued a bond in the amount of EUR 100
million. This successful use of our capital market-oriented refinancing
funds demonstrates that adequate funds are available again to issuers in
good standing. With the international expansion and the possibility of
offering our customers new financing and investment offers, the course is
set for growth in our business volume and income in 2010 and beyond,'
continued Dr. Uwe Hack, describing the GRENKE Group's prospects.
Should you have any queries, please contact:
Renate Hauss
Phone: +49 7221 5007-204
Fax: +49 7221 5007-112
E-mail: [email protected]
Internet http://www.grenke.de; http://www.grenkebank.de;
http://www.grenkefactoring.de
02.07.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de
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: [email protected]
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