Grenke AG - Earnings Release 2016

News Details

Corporate | 4 July 2016 07:30

GRENKE AG: Positive new business development in the first half-year – GRENKE continues successful growth path

DGAP-News: GRENKE AG / Key word(s): Miscellaneous

2016-07-04 / 07:30

The issuer is solely responsible for the content of this announcement.

Positive new business development in the first half-year – GRENKE continues successful growth path

– GRENKE Group Leasing’s new business in the first half of 2016 totalled EUR 762.7 million – a year-on-year increase of 19.6%

– GRENKE Group Factoring’s new business climbed to EUR 160.0 million in the first half of 2016 – a year-on-year rise of 10.3%

– GRENKE Bank’s business start-up financing rose to EUR 10.4 million in the first half of 2016 – a year-on-year rise of 38.6%

Baden-Baden, July 4, 2016: In the first half of 2016, the new business volume of GRENKE Group Leasing (including franchise partners) – i.e. the total acquisition cost of newly purchased leased assets – amounted to EUR 762.7 million (1.HY 2015: EUR 637.7 million), corresponding to a rise of 19.6% placing us squarely on track to reach our growth forecast of 16 – 20% for the full year. GRENKE Group Factoring’s new business (including franchise partners) – i.e. the total of purchased receivables – amounted to EUR 160.0 million in the first half of 2016 (1.HY 2015: EUR 145.1 million), which is equivalent to an increase of 10.3%. Although we expect momentum to accelerate in the Factoring business for the remainder of the fiscal year, we do not expect to reach our original growth forecast of 30 – 35% and are now projecting GRENKE Group Factoring’s new business to see a rise between 18 – 23%. GRENKE Group’s new business volume (including franchise partners) reached EUR 933.1 million (1.HY 2015: EUR 790.3 million), corresponding to growth of 18.1%.

The contribution margin 2 of the Leasing segment’s new business amounted to EUR 130.1 million in the first half of 2016, which is equivalent to a CM2 margin for the Leasing segment of 17.1% (1.HY 2015: EUR 120.0 million and 18.8%, respectively). The CM1 margin (contribution margin 1 at acquisition values) of the Leasing segment amounted to 13.2% in the first half of 2016 for a total of EUR 100.9 million (1.HY 2015: 13.9% and EUR 88.9 million, respectively). The perceived decline in the margin resulted mainly from a change in the calculation method in the previous year for forecasting subsequent income and expenses related to new business as well as from a push of our sales activities aimed at high growth in individual markets. An isolated comparison of the three prior quarters shows steady margin development.

The international share of GRENKE Group’s new business amounted to 73.6% in the first half of 2016 compared to 72.4% in the previous year’s period.

Whereas the growth in Leasing segment’s new business in our home market of Germany was somewhat moderate (7.7%) the solid growth trend in our international markets continued, particularly in our core market of France (20.5%) and in the important Italian market (37.7%), where we carried on expanding our market position.

In the second quarter of 2016, we continued to enhance our international growth by opening our 87th location outside of Germany in Parma (Italy) as part of our cell division strategy.

The GRENKE Group received 202,916 lease applications (167,404 thereof were international) in the first half of 2016, which resulted in 90,565 new lease contracts (72,989 thereof were international). The mean term per lease contract amounted to EUR 8,421 and was moderately higher than its level in the previous year’s period (1.HY 2015: EUR 8,269), but still at a low level customary for our business.

The GRENKE Group’s (Leasing segment) conversion rate (applications to contracts) in the first half of 2016 totalled 45%. The conversion rate in our international markets was 44%, which was lower than the rate achieved in the German market (49%).

New business volume in the Factoring segment increased by 10.3%. The income margin on the EUR 68.9 million in new business volume generated in Germany persisted at a high level of 1.99% (1.HY 2015: 2.12%). The income margin on new business volume of EUR 91.2 million generated in our international markets declined slightly to 1.32% (1.HY 2015: 1.43%). This margin is based on the average period for a factoring transaction in Germany of approximately 27 days (1.HY 2015: approx. 26 days) and 37 days internationally (1.HY 2015: approx. 34 days).

The development of GRENKE Bank’s business start-up financing and microcredit business were exceptionally strong growing 38.6% in comparison to the previous year’s period and reaching a total volume of EUR 10.4 million.

All figures are stated in EUR million (previous year’s figures have been adjusted)


New business	1.HY 2016	1.HY 2015	% change
GRENKE Group Leasing	762.7	637.7	19.6
– of which international	579.2	472.1	22.7
– of which Franchise international	16.0	10.1	58.2
– of which Germany	167.5	155.5	7.7
Western Europe* (without Germany):	252.7	216.7	16.6
Southern Europe*	215.8	159.0	35.8
Northern/Eastern Europe*	115.7	95.7	21.0
Other regions*	10.9	10.9	0.7


New business	1.HY 2016	1.HY 2015	% change
GRENKE Group Factoring	160.0	145.1	10.3
– of which Germany	68.9	55.0	25.3
– of which international	66.7	70.2	-5.1
– of which Franchise international	24.5	19.9	23.1


GRENKE Bank	1.HY 2016	1.HY 2015	% change
Deposits	385.7	312.6	23.4
New business start-up financing (including the microcredit business)	10.4	7.5	38.6

Development of contribution margin 2 in EUR million (previous year’s figures have been adjusted)


	1.HY 2016	1.HY 2015	% change
GRENKE Group Leasing	130.1	120.0	8.4
– of which international	105.4	96.2	9.5
– of which Franchise international	3.0	1.9	57.1
– of which Germany	21.7	21.9	-0.7
Western Europe* (without Germany):	44.2	43.6	1.3
Southern Europe*	40.5	34.3	18.2
Northern/Eastern Europe*	21.7	18.3	18.6
Other regions*	2.0	2.0	2.0

*Regions:

Western Europe (without Germany): Austria, Belgium, France, Luxembourg, the Netherlands, Switzerland

Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain

Northern/Eastern Europe: Denmark, Finland, Great Britain, Ireland, Norway, Sweden / Czech Republic, Hungary, Poland, Romania, Slovakia

Other regions: Brazil, Canada, Chile, Dubai, Singapore, Turkey

“The end of the second quarter marked the close to an excellent first half of 2016. With new business up 18 percent, the GRENKE Group is well on track to reach its full-year targets. We were particularly pleased with the business performance in our key markets France and Italy and seized this opportunity to complete another cell division and open up a location in Parma. We also received an extremely positive response to our innovative eSignature offer for speeding up contract processing. Since introducing this product, we have already concluded more than 7,200 contracts using the eSignature process. We do not expect to be faced with any particular challenges as a result of the referendum in the United Kingdom. Our existing business is secure, and our new business is more likely to profit from any potential macroeconomic uncertainty. In addition, we are relying on our lean organisation and efficient risk management”, commented Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG.

“The foundation of our business is our solid financing and excellent reputation on the capital market. Standard & Poor’s recently reconfirmed our unchanged good credit rating, and we were also recognised for our high creditworthiness and investment-grade status with a counterparty credit rating of BBB+/A-2 and a stable outlook. This attractive rating has facilitated our continued refinancing with matching maturities during the second quarter of 2016”, explained Jörg Eicker, Chief Financial Officer (CFO) of GRENKE AG.

GRENKE BANK AG recently made a strategic investment in Finanzchef24 GmbH. Finanzchef24 is the first electronic insurance broker for commercial customers in Germany and operates an online finance portal for companies and self-employed professions.

“GRENKE Bank has taken a stake in Munich’s Finanzchef24 GmbH, which provides an objective comparison of commercial insurance products on its finance portal www.finanzchef24.de. This service targets business start-ups, self-employed professions and medium-sized companies. The comparison tool gives those interested an overview of the different products and their features. The target groups addressed by Finanzchef24 and GRENKE Bank are very similar, which is why the companies plan a sales cooperation going forward. This cooperation will now be supported by our strategic financial investment in Finanzchef24 GmbH, which was made in a recent round of financing,” continued Wolfgang Grenke.

The Company will publish its financial report for the second quarter and first half-year of 2016 on July 28, 2016.

For further information, please contact:

GRENKE AG

Corporate Communications / Investor Relations

Renate Hauss

Neuer Markt 2

76532 Baden-Baden

Phone: +49 7221 5007-204

Email: [email protected]

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 30 countries and employs more than 1,100 staff.

GRENKE AG is listed in the Prime Standard of the Frankfurt Stock Exchange and is included in the SDAX. GRENKE AG shares are listed on the Frankfurt Stock Exchange under the code GLJ, ISIN DE000A161N30.

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

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Language:	English
Company:	GRENKE AG
	Neuer Markt 2
	76532 Baden-Baden
	Germany
Phone:	+49 (0)7221 50 07-204
Fax:	+49 (0)7221 50 07-4218
E-mail:	[email protected]
Internet:	www.grenke.de
ISIN:	DE000A161N30
WKN:	A161N3
Indices:	SDAX
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart; Terminbörse EUREX