Grenke AG — Earnings Release 2009

Jan 5, 2010

News Details

Corporate | 5 January 2010 08:03

GRENKELEASING AG: New Business 2009

GRENKELEASING AG / Miscellaneous

05.01.2010

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

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• At the end of the financial year 2009, the return to the growth path
  becomes evident

• New business in the GRENKE Group amounts to EUR 497.1 million in 2009.
  Contribution margin (CM) 2 on new business in the GRENKE Group reaches
  EUR 85.8 million in 2009 and, with a CM2 margin of 18.8 % (leasing
  business) remains at a very high level

• The decision to focus on profitability and risk management in 2009
  proved to be successful

Baden-Baden, January 5, 2010: In 2009 the volume of new business of the
GRENKE Group (incl. franchise partners) - i.e. the sum total of acquisition
costs of newly acquired leasing assets and the factoring volume - amounted
to EUR 497.1 million (2008: EUR 601.0 million). In view of the prevailing
general economic conditions, GRENKE modified its business policy at an
early stage in 2009 to concentrate on securing liquidity, strengthening the
balance sheet and ensuring the profitability of new business. The result in
2009 is a higher CM2 margin of 18.8 % for the GRENKE Group including
franchise partners (previous year: 15.9 %). To limit our risk-taking, our
new business in the first half of fiscal 2009 was clearly geared to the
criterion of profitability and risk management. Meanwhile conditions have
eased on the market, enabling us to focus more strongly on volume growth
once again in the course of the second half of the year - however, without
neglecting our strict risk considerations.

In the fourth quarter of 2009, the policy shift within our business
strategy in the direction of volume growth was reinforced, with CM1 and CM2
results remaining at a high level. This is reflected in an increase
recorded both in the number of leasing inquiries and in the contract
numbers in the fourth quarter as compared to the previous year's quarter.
As a consequence, the decline in new business further eased accordingly.
Whereas the volume of new business in the Group amounted to minus 20.3 %
compared with the same nine-month period of 2008, taking the full year it
amounted to minus 17.3 % and to as little as minus 9.5 % in the fourth
quarter.

The changeover had a particularly speedy and positive impact especially in
our international markets. Compared with the strong fourth quarter of 2008
(new business abroad Q4 2008: EUR 76.6 million), we succeeded in growing
the volume of new business in Q4 2009 by 11.4 %, to reach EUR 85.3 million.
The volume of new business in our markets of France, Italy, the United
Kingdom and Switzerland developed in line with our policy shift, and this
tendency is likely to continue in the year 2010. This development
illustrates also that the changeover to volume growth works in varying
speeds in our individual markets.

The international segment contributed a share of 50.8 % to the GRENKE
Group's new business (previous year: 46.7 %). Considering the 10.1 %
reduction in our volume of new business, the fact that our CM2 margin was
up by 3.5 % illustrates the positive profitability trend of this business.
We achieved particularly gratifying growth rates in the franchise segment
of leasing, even though these markets still belong to our smaller ones in
terms of volume.

The still increasing inquiry numbers illustrate that the demand for leasing
remains in place unabated. In the fourth quarter of 2009, we received 10.8
% more inquiries than in the same period a year earlier. Outside Germany,
this trend is even more pronounced, with a 20.4 % increase in inquiries
year-on-year. The development in the conversion rate (inquiries to
contracts) reflects our shift to more volume growth, even though the
conversion rate still remains below our target level owing to our still
relatively restrictive risk management. Nevertheless, the rate continued to
increase in the GRENKE Group, amounting to 43.4 % in the fourth quarter,
compared with 41.3 % in the third quarter of 2009.

In fiscal 2009 GRENKE Group recorded a total of 152,382 leasing inquiries
(ex Germany 93,996) and of which 62,321 new leasing contracts (ex Germany
35,917) were generated. The average value per leasing contract concluded
came to approx. EUR 7,277 and is slightly down on the previous-year figure
(2008: EUR 7,775). The lower average value of a leasing contract is also
reflected in the development of the volume of new business in the Group. In
the fourth quarter of 2009, however, in the leasing business we succeeded
in generating a 1.9 % increase in the number of contracts concluded
(Q4-2009: 19,228 contracts) year-on-year (Q4-2008: 18,863 contracts); ex
Germany, the increase came to 17.0 %. The lower average value per leasing
contract is an indication of the fact that we continue to assign high
priority to diversifying the leasing portfolio.

New business volumes in EUR million

                                             2009     2008    % change

GRENKE Group including franchise partners 497.1 601.0 -17.3
- of which: Germany 244.5 320.1 -23.6
- of which: International 252.6 280.9 -10.1
-GRENKE Group leasing business* 453.5 542.9 -16.5
Franchise partners** 43.8 93.4 -53.1
Factoring business (Germany) 43.6 58.1 -24.9
Deposits GRENKE BANK 106.4 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

                                       2009     2008         % change

France 96.1 125.5 -23.4
Switzerland 14.4 16.2 -11.2
Italy 27.8 30.2 -7.9
Spain (incl. franchise Madrid) 15.7 18.4 -14.7
United Kingdom 15.1 19.7 -23.4
Poland 11.3 13.8 -18.6
Netherlands 11.6 11.6 -0.2

The CM1 level of the GRENKE Group's leasing operations (contribution margin
1 at acquisition values), at 13.2 % for 2009 as a whole, substantially
exceeded our target margin of 10 % and the previous year's margins,
reaching a value of EUR 59.9 million (2008: EUR 57.9 million - comparative
figure for leasing operations). The corresponding CM2 amounts to EUR 85.3
million, down by 1.0 % year-on-year on a volume of new business decreased
by 16.5 % (2008: EUR 86.2 million).

Development of contribution margin 2 (CM2) in EUR million

                                             2009    2008    % change

GRENKE Group including franchise partners 85.8 87.8 -2.3
- of which: Germany 36.3 39.9 -9.2
- of which: International 49.5 47.8 3.5
GRENKE Group leasing business* 85,3 86.2 -1.0
Franchise business** 7.7 7.3 5.6
France 20.0 21.1 -5.2
Switzerland 3.1 3.5 -9.1
Italy 4.4 4.6 -3.9
Spain (incl. franchise Madrid) 2.7 3.1 -13.0
United Kingdom 3.0 3.3 -7.8
Poland 1.4 1.6 -14.1
Netherlands 2.4 2.2 8.8

*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 43.6 million
amounted to 1.95 % (2008: 2.0 %). This margin relates to the average period
of a factoring transaction, amounting to approx. 32 days (2008: approx 34
days).

'In accordance with our expectations, in the fourth quarter of 2009 the
shift in our business strategy in the direction of volume growth was
reinforced, with CM1 and CM2 results remaining at a high level. To bring
about tighter risk restrictions, our new business in the first half of
fiscal 2009 was clearly geared to the criterion of profitability in terms
of risk costs. The concentration on restricting risks concerned both
existing business and the task of taking advantage of opportunities for
expansion with new locations in our international markets. In fiscal 2010,
within the scope of our re-intensified focus on growth, we plan to continue
our usual expansion strategy in order to grow our business by developing
new franchise partners and cell divisions at foreign locations,' explained
Dr Uwe Hack, Deputy Chairman of the Executive Board of GRENKELEASING AG.

He added: 'The measures adopted in the third quarter as part of
strengthening and extending our refinancing base as well as the
confirmation of our issuer rating of BBB+ with a stable outlook constitute
the preconditions for future growth. We have reinforced our strategic
positioning and extended our competitive strength, and in fiscal 2010 we
will endeavour to further expand the Group, restricted only by our own
premises for the CM2 margin without neglecting risk considerations.
Following the shift in emphasis in the fourth quarter, we have laid the
foundations for good growth of new business in 2010.'

The company will publish its audited consolidated financial statements 2009
on 9 February 2010.

The Executive Board
***********************

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:investor@grenke.de

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

05.01.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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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

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