Grenke AG — Earnings Release 2014

Oct 28, 2014

News Details

Corporate | 28 October 2014 07:19

GRENKELEASING AG: Consolidated Group net profit rises 37.7% to EUR 48.3 million and exceeds our previous expectations

GRENKELEASING AG / Key word(s): Quarter Results

28.10.2014 / 07:19

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Consolidated Group net profit rises 37.7% to EUR 48.3 million and exceeds our previous expectations

– Net interest income climbed 19.6% to EUR 115.2 million in the first nine months of 2014 (previous year: EUR 96.4 million)

– Consolidated Group net profit in the first nine months of 2014 totalled EUR 48.3 million for growth of 37.7% compared to EUR 35.1 million in the previous year

– Lower-than-average increase in expenses for the settlement of claims and risk provision to EUR 39.1 million

– 2014 profit forecast raised: Consolidated Group net profit expected in a range of EUR 62-64 million (previous forecast: around EUR 56 million)

Baden-Baden, October 28, 2014: The positive income development in the first nine months of 2014 was based on the high-margin new business acquired in recent quarters and a favourable refinancing environment. Interest expenses from refinancing and from the deposit business declined in absolute terms to EUR 41.0 million after EUR 43.7 million in the first nine months of 2013 due to the favourable interest rate environment. This allowed net interest income to rise 19.6% to EUR 115.2 million compared to EUR 96.4 million in the prior year.

Expenses for the settlement of claims and risk provision had a lower-than-average increase of 6.1% to EUR 39.1 million (previous year: EUR 36.8 million). The lower increase underscores our success in reflecting the risks in our conditions. The loss rate in the first nine months was slightly below the previous year’s level. Accordingly, net interest income after settlement of claims and risk provision rose by 27.8% to EUR 76.2 million after EUR 59.6 million in the comparable period of the previous year.

Profit from insurance business grew 18.0% to EUR 30.5 million (9M-2013: EUR 25.9 million). Profit from new business grew 9.1% to EUR 35.0 million after EUR 32.0 million in the first nine months of 2013. Gains from disposals, which are of less significance and usually very volatile on a quarterly basis, amounted to EUR 1.8 million after EUR 2.0 million in the first nine months of 2013. Overall, income from operating business rose 20.0% to EUR 143.4 million after EUR 119.5 million in the comparable period of the previous year.

Staff costs and selling and administrative expenses increased visibly less than the growth in income. Staff costs amounted to EUR 40.3 million in the first nine months of 2014 after EUR 38.0 million in the previous year’s comparable period. Selling and administrative expenses grew 16.2% to EUR 33.0 million after EUR 28.4 million in the first nine months of 2013. Consultancy costs and audit fees, which were influenced by consulting services used in the course of internationalisation and the focused expansion of our IT infrastructure in the previous year’s period, have meanwhile seen a slight decline. The development of our expenses demonstrates the high profitability of our business.

The operating result climbed 36.5% to EUR 65.9 million after EUR 48.3 million in the first nine months of 2013. Net profit for the nine-month period of 2014 grew 37.7% to EUR 48.3 million (previous year: EUR 35.1 million) and exceeded our previous expectations.

At the end of the first half-year of 2014, we had refined our profit forecast to a Consolidated Group net profit of around EUR 56 million. We are raising our forecast and now expect net profit in the range of EUR 62-64 million for fiscal year 2014. This represents growth of at least 32% compared to the net profit reported in fiscal year 2013 of EUR 47.0 million.

At 16.7%, the equity ratio remained at the level as per December 31, 2013 and above our long-term target of a minimum of 16%. With this solid equity ratio, we still have ample room for the GRENKE Consolidated Group’s future growth.

These results were generated by a total of 866 employees compared to 808 employees in the first nine months of 2013 (based on full-time employees, excluding the Board of Directors).

“The high profitability of our business was visible in our operating result and net profit. We achieved an increase in net profit of 38 percent to EUR 48.3 million in the nine-month period – a level clearly above our previous expectations. Thus, we are raising our net profit forecast for the current fiscal year to a range of EUR 62-64 million. This represents growth of at least 32 percent compared to the previous year. We are continually working on expanding our network to ensure that our dynamic growth continues well into the future. For the fourth quarter, we are planning cell divisions in numerous countries and preparing market entries into Chile and Croatia”, commented Wolfgang Grenke, Chairman of the Board of Directors of GRENKELEASING AG, with regard to the results.

“Our strong position in the capital markets continues to be supported by the unchanged credit rating received from Standard & Poor’s. In its most recent analysis dated October 9, 2014, the rating agency confirmed our counterparty credit rating of BBB+/A-2, both with a negative outlook. The Company continues to enjoy a stable investment-grade rating. The Gesellschaft für Bonitätsbeurteilung mbH (“GBB”) came to a similar conclusion in their first analysis of the GRENKE Consolidated Group published on October 1, 2014 with their A- rating and a stable outlook. The favourable GBB rating is particularly important in terms of the strategic direction being taken by GRENKE Bank”, explained Jörg Eicker, Chief Financial Officer (CFO) of GRENKELEASING AG.

The full Financial Report for the 3rd Quarter and the First Nine Months 2014 can be accessed at www.grenke.de/financialreports.

Should you have any queries, please contact:

Renate Hauss

Tel.: +49 7221 5007-204

Fax: +49 7221 5007-4218

E-mail: investor@grenke.de

Internet: http://www.grenke.de

The GRENKE Group

The GRENKE Group is a broadly diversified provider of IT-based services in Small-Ticket-IT-Leasing, Factoring and Banking for small and medium-sized companies. In addition, the GRENKE Bank offers its classic online services also to private customers.

The GRENKE Group is independent of vendors and banks and 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. The GRENKE Group operates in 27 countries and employs more than 900 staff.

GRENKELEASING AG is listed in the Prime Standard of the Frankfurt Stock Exchange and is included in the SDAX. GRENKELEASING AG shares are listed in the SDAX on the Frankfurt Stock Exchange with the code GLJ, ISIN DE0005865901.

Information on the GRENKE Group and its products is available at http://www.grenke.de

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28.10.2014 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

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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 07-4218
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 News	DGAP News-Service

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