Grenke AG — Earnings Release 2011

Aug 1, 2011

News Details

Ad-hoc | 1 August 2011 06:57

GRENKELEASING AG: GRENKE raises earnings forecast for 2011

GRENKELEASING AG / Key word(s): Quarter Results/Half Year Results

01.08.2011 06:57

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.

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• Operating result in first half of 2011 up 52.7 % to EUR 24.2 million
  (previous year: EUR 15.8 million)
• Consolidated profit in first half of 2011 amounts to EUR 18.1 million -
  an increase of 47.6 % as against EUR 12.2 million in the previous year
• Earnings forecast for 2011 increased: net profit of between EUR 36
  million and EUR 38 million anticipated

Baden-Baden, Germany, August 1, 2011: In the second quarter of 2011, GRENKE
again generated very high growth in operating income; for the first half of
2011, there was an increase of 27.8 % to EUR 57.5 million (previous year:
EUR 44.9 million). This result is higher than the previous assumptions of
both the company and the capital market. We expect this development to
continue in the second half of the year and now anticipate net profit of
between EUR 36 million and EUR 38 million.

The strong and above all high-margin new business in the past fiscal year
is continuing to lead to a rapid increase in net interest income. In the
first half of 2011, net interest income rose by 17.0 % year-on-year from
EUR 38.1 million to EUR 44.6 million.

Total business volume has increased substantially due to the strong growth
in new business in the past two years. Under these circumstances, we are
very satisfied with the development of claims and anticipate a further
decrease in the loss rate in the second half of 2011 on the basis of a
continued positive general economic development. However, the claims
results can be volatile from quarter to quarter. Temporary increases in the
negative impact from claims are entirely typical for the business. In first
half of 2011, net interest income after settlement of claims and risk
provisioning was up by 36.6 % to EUR 28.6 million (previous year: EUR 20.9
million).

Profit from insurance business increased by 15.4 % year-on-year to EUR 11.9
million. As profit from disposal, we show 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. In the first half of 2011, it almost doubled year-on-year to
EUR 1.7 million (previous year: EUR 0.9 million).

Operating expenses recorded significant increases in almost all items as a
result of our growth, since expansion in our business is always associated
with hiring additional employees, renting more office space, higher travel
expenses and vehicle costs and similar expenses. Expense items including
the balance from other operating income and expenses increased by 14.3 %
year-on-year to EUR 33.3 million in the first half of 2011 (previous year:
EUR 29.1 million). The increase levelled out in the second quarter of 2011
due to economies of scale.

Overall, the operating result in the first half of 2011 grew by 52.7 % to
EUR 24.2 million after EUR 15.8 million in the previous year. In the first
half of the year, consolidated profit rose by 47.6 % to EUR 18.1 million
after EUR 12.2 million in the previous year.

Since the beginning of 2010, we have been growing again at a rapid rate.
This is reflected in only a slight decline in our equity ratio, which fell
to 16.4 % in the first half of 2011 after 17.2 % at the end of 2010. This
decrease was primarily due to the annual distribution to the shareholders
scheduled for the second quarter. We are thus gradually reducing the slight
overcapitalisation that we had deliberately established in the financial
crisis to protect against risks and are investing these funds in operating
business. Nonetheless, the equity ratio still remained above our target
level of 16 %.

This result was achieved by 567 employees as compared to 526 in the first
half of 2010 (full-time equivalents not including the Board of Directors).

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Information and Explaination of the Issuer to this News:

'The GRENKE Group is currently experiencing a particularly successful phase
of its development. We maintained the pace of our growth throughout the
first half of 2011, increasing new business by 25.6 % in the Group
including franchise partners. This puts us comfortably on target to achieve
the forecast of an increase in new business of more than 20 % in fiscal
year 2011. The second quarter of 2011 shows what this means in concrete
terms in the income figures: consolidated operating income increased by
24.8 %, the operating result by as much as 63.6 % and net profit by 49.8 %.
Net profit was also increased by 47.6 % to EUR 18.1 million in the first
half of the year. Roughly half of the income is generated from
non-interest-driven income components. This is the result of our
contribution margin 2 management and stabilises our operating income even
when market interest rates fluctuate. The positive development should
continue on the whole in the second half of the year. We therefore expect
to exceed the previous forecast of net profit for the period of EUR 33
million to EUR 36 million and now anticipate net profit of between EUR 36
million and EUR 38 million,' commented Wolfgang Grenke, Chairman of the
Board of Directors of GRENKELEASING AG, describing the goals for the second
half of the year.

'To finance new business, we made use of our wide range of refinancing
sources and deposit business via GRENKE BANK. GRENKE BANK continues to give
us the opportunity to work together with development banks such as
NRW.BANK. In spring 2010, GRENKE established a cooperation agreement
between NRW.BANK in Düsseldorf, GRENKELEASING AG and GRENKE BANK AG. Thanks
to this cooperation agreement, small and medium-sized enterprises and
self-employed professionals in North Rhine-Westphalia will be able to
obtain supported funds if they finance new purchases of operating equipment
through leases. This model has proved highly successful in just a very
short time, generating around 2,500 contracts to date. After this
innovative cooperation has developed highly successfully for all parties to
the contract, we are pleased that another EUR 15 million of supported funds
has been available since late July. This demonstrates that the combination
of traditional leasing business with additional financial products of
GRENKE BANK is useful for our customers and offers the GRENKE Group new
additional growth potential,' commented Dr. Uwe Hack, Deputy Chairman of
the Board of Directors of GRENKELEASING AG.

The full Quarterly Financial Report to June 30, 2011 can be accessed on the
Internet at www.grenke.de - INVESTOR RELATIONS - Reports - Figures 2011.

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 consolidated GRENKELEASING corporate
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 46
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.

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

01.08.2011 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
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
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
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of Announcement DGAP News-Service

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