Grenke AG — Earnings Release 2011

Nov 3, 2011

News Details

Corporate | 3 November 2011 07:14

GRENKELEASING AG: Strong growth in consolidated net profit, up 47.2 % year-on-year

GRENKELEASING AG / Key word(s): Quarter Results

03.11.2011 / 07:14

---

Strong growth in consolidated profit, up 47.2 % year-on-year

* Operating result up 48.7 % to EUR 38.1 million in first nine months of
2011 (previous year: EUR 25.6 million)
* Consolidated net profit amounts to EUR 28.1 million in first nine months
of 2011 - an increase of 47.2 % as compared to EUR 19.1 million in previous
year
* Equity ratio of 16.6 % - still above our target level of 16 %

Baden-Baden, November 3, 2011: In the third quarter of 2011, GRENKE
continued its strong growth in consolidated net profit from the first half
of the year. In the first nine months of 2011, there was a 47.2 % increase
to EUR 28.1 million (previous year: EUR 19.1 million). This is the result
of the overall rise in operating income, which was up 26.0 % to EUR 87.1
million (previous year: EUR 69.1 million). The strong and, above all,
high-margin new business of the past year is having a positive effect on
net interest income, which climbed by 17.0 % to EUR 68.7 million (previous
year: EUR 58.7 million). The momentum of net interest income was also
maintained in the current quarter, leading to a 17.0 % increase in net
interest income to EUR 24.0 million (previous year: EUR 20.5 million).

As expected, losses also developed positively, remaining below the previous
year's value in the first nine months of 2011. Overall, we are satisfied
with the development of the loss rate and anticipate a sustained
improvement - providing that the development of the real economy is not
materially negatively influenced by the international financial markets or
the debt crisis. However, this improvement will not occur continuously as
the level of claims can be quite volatile, particularly from quarter to
quarter. Temporary increases in the costs of claims are entirely typical
for this business. The combination of high-margin new business and the
ability to accurately measure and therefore price the risks assumed is
reflected in the development of net interest income after the settlement of
claims. In the first nine months of 2011, net interest income after the
settlement of claims and risk provisioning was increased by 33.2 % to EUR
43.2 million (previous year: EUR 32.5 million).

The profit from insurance business rose by 15.9 % year-on-year to EUR 18.5
million in first nine months of 2011. The profit from disposal shows the
income exceeding the calculated residual value. As a net amount, it
generally makes only a minor contribution to earnings and tends to
fluctuate considerably from quarter to quarter. Given the very good start
to 2011, the profit for the first nine months of 2011 improved very
strongly year-on-year by 67.8 % to EUR 2.4 million.

With regard to expenses, we are currently recording significant increases
in almost all items as a result of expanding our market presence, since we
want to make sure that our market share gains are sustainable. We are doing
this very systematically within the framework of our cell division model in
order to become increasingly close to our customers geographically and
personally. The investments in additional employees, more office space,
higher travel expenses and vehicle costs and similar expenses accordingly
lead to an increase in these expense items. However, the growth rates are
significantly lower than the operating income as we have now achieved
positive economies of scale. Overall, expense items including the balance
from other operating income and expenses increased by 12.6 % year-on-year
to EUR 49.0 million in the first nine months of the year (previous year:
EUR 43.5 million).

The overall profit from operating business therefore jumped by 48.7 %
year-on-year to EUR 38.1 million in the first nine months of 2011 (previous
year: EUR 25.6 million).

Given the strength of our earnings, the equity ratio is still at a highly
encouraging level despite the consistently rapid expansion. At 16.6 % at
the end of the third quarter, it was only slightly less than the 17.2 % as
at the end of 2010 and therefore still above our target of 16 %. At the
same time we have therefore moderately reduced the slight
overcapitalisation that we had deliberately established in the last
recession to protect against risks and invested these funds in operating
business.

This result was achieved by 578 employees as compared to 531 in the first
nine months of 2010 (full-time equivalents not including the Board of
Directors).

'With the earnings generated, we are clearly on track to achieve the
earnings forecast we raised at the start of August: to reach a profit of
between EUR 36 and 38 million in fiscal 2011. This would mark an increase
in our profits of more than 30 %. We are achieving this growth with
increasing new business with attractive margins commensurate to risk. In
the first nine months of 2011, the contribution margin 2 on leasing
business expanded slightly to 16.3 % after 16.0 % in the previous year,'
comments Wolfgang Grenke, Chairman of the Board of Directors of
GRENKELEASING AG, describing the targets for 2011 and the basis for the
further development of earnings.

'Our positive expectations for the development of expenses were confirmed
in the third quarter, though intra-year fluctuations had varying effects on
quarter-to-quarter performance. In particular, the loss rate has been
largely constant over the year. The rise in expenses, particularly selling
and administrative expenses, has been flatter than the increase in
operating income. This positive development is therefore set to continue in
the final quarter of the year,' explains Dr. Uwe Hack, Deputy Chairman of
the Board of Directors of GRENKELEASING AG.

The full Quarterly Financial Report as per September 30, 2011 can be
accessed on the Internet at www.grenke.de - INVESTOR RELATIONS - Financial
Reports - Financial Reports 2011.

Should you have any queries, please contact:

Renate Hauss
Phone: +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

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 fifteen European
countries, all being part of the GRENKE Consolidated Group. In addition the
GRENKE Group is represented in eight further countries in Europe by way of
a franchise system. Including its leasing franchise partners and its
factoring franchise partner in Switzerland, the GRENKE Group is represented
at 23 locations in Germany and a total of 51 locations internationally.

The range of services offered by the GRENKE Consolidated 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 GRENKE Consolidated 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.

End of Corporate News

---

03.11.2011 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---

Language: English
Company: GRENKELEASING AG
Neuer Markt 2
76532 Baden-Baden
Germany
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
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart

End of News DGAP News-Service

144529 03.11.2011