Grenke AG — Interim / Quarterly Report 2008

Apr 28, 2008

GRENKELEASING AG GROUP QUARTERLY FINANCIAL REPORT AS PER MARCH 31, 2008

GRENKELEASING®

KEY FIGURES	2
LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS	3
THE GRENKELEASING AG SHARE	4
Development of the Share Price and Daily Turnover	5
Directors' Holdings as per March 31, 2008	6
Shareholder Structure	6
GRENKE GROUP GROWTH STRATEGY	7
Expansion in Europe	8
GRENKE Group Locations in Europe	9
INTERIM MANAGEMENT REPORT	10
Economic Environment	10
Report on the Results of Operations	10
Report on the Financial Situation and Net Assets	12
Report on Forecasts and the Outlook for the Group	13
INTERIM FINANCIAL STATEMENTS	15
SELECTED EXPLANATORY NOTES	23
THE BOARD OF DIRECTORS OF GRENKELEASING AG	32
THE SUPERVISORY BOARD OF GRENKELEASING AG	33
OVERVIEW OF THE GROUP	34
THE GRENKELEASING FRANCHISE SYSTEM	35
THE GRENKEFACTORING GMBH	36
GLOSSARY	37
CALENDAR OF EVENTS 2008 AND CONTACT	42

KEY FIGURES

	01.01.2008 to 31.03.2008	% Change	01.01.2007 to 31.03.2007	Units
Key figures of GRENKE Group including franchise partners
New business of GRENKE Group	131,990	7	123,155	EURk
- of which: Germany	69,419	-8	75,357	EURk
-of which: International	62,571	31	47,798	EURk
New business of franchise partners	18,038	-22	23,168	EURk
- of which: Factoring business (Germany)	11,752	12	10,468	EURk
Key figures of GRENKE Group leasing business excluding factoring
New business GRENKE Group leasing business	120,238	7	112,688	EURk
Contribution margin 2 of new business	17,613	10	16,079	EURk
Number of new contracts	15,968	9	14,645	Units
Share of IT products in the lease portfolio	86	-2	88	percent
Share of corporate customers in the lease portfolio	100	0	100	percent
Mean acquisition value	7.5	-3	7.7	EURk
Mean term of contract	45	0	45	Months
Volume of leased assets	1,545	10	1,403	EURm
Number of current contracts	205,727	9	189,261	Units
GRENKELEASING AG Group, consolidated figures
Net interest income from leasing business	16,572	8	15,387	EURk
Expenses from settlement of claims	4,957	19	4,181	EURk
Profit from insurance business	4,917	20	4,092	EURk
Profit from new business	6,004	25	4,806	EURk
Profit from disposals (income exceeding the calculated residual value)	908	15	792	EURk
Result from currency translation difference	-432	-	34	EURk
Other operating income	250	2	245	EURk
Costs of new contracts	3,631	18	3,067	EURk
Costs of current contracts	1,225	13	1,083	EURk
Project costs and basic distribution costs	3,455	14	3,018	EURk
Management costs	2,206	8	2,038	EURk
Other costs	1,567	173	574	EURk
EBIT (Earnings before interest and taxes)	11,178	-2	11,395	EURk
Other interest result	12	-	-10	EURk
Income/Expenses from market valuation of financial instruments	0	-	-2	EURk
EBT (Earnings before taxes)	11,190	-2	11,383	EURk
Net profit (consolidated net profit pursuant to IFRS)	7,881	3	7,650	EURk
IFRS earnings per share	0.58	3	0.56	EUR
Dividend	0.60	9	0.55	EUR
Embedded value of the lease portfolio (incl. Equity before taxes)	332	11	300	EURm
Embedded value of the lease portfolio (incl. Equity after taxes)	304	15	265	EURm
Cost/income ratio	52.6	14	46.2	percent
Return on equity (ROE) after taxes	13.5	-	14.6	percent
Average number of employees	474	17	404	Persons

Explanation of ratios on page 37 et seq.

LETTER TO THE SHAREHOLDERS FROM THE BOARD OF DIRECTORS

Dear Shareholders,

Ladies and Gentlemen,

We are pleased with the way the new fiscal year has started. New business continues to grow and there has been another rise in the contribution margin 2. Our early expansion abroad has proven itself and is the Group's significant growth driver. The takeover of the first two franchise companies in the first quarter of 2008 has underlined the success of our franchise model for entering new markets.

The GRENKE Group and its franchise partners increased new business by a total of 7.2 percent to EUR 132.0m in the first quarter of 2008. This growth rate is due to the shift in Easter holidays below our forecast for the full year of more than 10 percent. This effect will be reversed as early as the second quarter and will balance out in the first half of the year. Therefore, we confirm our forecast for the year.

In our international markets, we were able to increase new business by as much as 31.0 percent to EUR 62.6m in the first quarter. We are particularly pleased to note that we maintained an above-average contribution margin 2 of 14.7 percent despite the high level of growth. And in Germany the contribution margin 2 even rose 0.5 percentage points to 12.4 percent, underscoring our clear focus on profitability. For us, profitability takes precedence over growth at any price.

We are also very satisfied with the fact that the Group's liquidity once again improved considerably in the first quarter of 2008 even though the capital markets have been afflicted by uncertainties. We were able to increase the volume of our various refinancing instruments, which we have steadily built up over the last few years, and raise the overall available volume by EUR 213m. This provides us with sufficient funds for sound financing of our growing new business.

The first quarter of 2008 has put us on course to pursue the successful development of the GRENKE Group for the short and medium term. The recent tightening of lending policies of the banks has eased competition. This presents us with opportunities that we will take advantage of in 2008. We will tap into any further potential as it arises.

Baden-Baden, April 2008

Wolfgang Grenke Chairman of the Board of Directors

THE GRENKELEASING AG SHARE

The GRENKELEASING AG share price remained steady during the first three months of fiscal year 2008, with only a slight decrease in price of five percent overall. Thus it significantly outperformed both of its German benchmark indices, the SDAX and the Prime Financial Services Index. In the same period, the SDAX fell by 14 percent and the Prime Financial Index dropped by 21 percent as doubts were cast on the earnings prospects of the financial industry in the wake of the global financial market crisis.

This is a good interim result for the GRENKELEASING AG share and proves that the net stock market sentiment is not clouded by the overriding trend on the international markets. The upheaval on the credit markets has not restricted GRENKELEASING AG's refinancing options thanks to its top market position and excellent rating.

The continued positive assessments and purchase recommendations by analysts are compelling evidence of the soundness of the GRENKELEASING business model and our investor relations. Our international growth strategy is producing sustainable and profitable results and will underpin the fundamental value of our stock in the long term.

The analysts' target price or fair value price of the share exceeded the closing price of EUR 23 at the end of the first quarter of 2008. We know of ten studies prepared by analysts for the current fiscal year; seven of these contained buy or overweight recommendations, two gave a hold recommendation, and one to sell. The buy recommendations were clearly confirmed after the publication of our new business figures for the first quarter on April 2, 2008.

DEVELOPMENT OF THE SHARE PRICE AND DAILY TURNOVER

DIRECTORS' HOLDINGS AS PER MARCH 31, 2008 (DIRECTORS' HOLDINGS)

Shares held by managing board members
	Wolfgang	Thomas	Mark	Michael	Dr. Uwe
	Grenke	Konprecht	Kindermann	Kostrewa	Hack
	Units	Units	Units	Units	Units
Status as per March 31, 2008	4,896,619	330,730	52,053	27,500	5,000
Shares held by super-visory board members
	Dieter Münch	Prof. Dr.	Erwin
	Münch	Ernst-Moritz Lipp	Staudt
	Units	Units	Units
Status as per March 31, 2008	75	21,000	1,000

SHAREHOLDER STRUCTURE

GRENKE GROUP GROWTH STRATEGY

GRENKELEASING is aimed at growth for the long term. Our goal is to achieve market leadership in small-ticket IT leasing in Europe. We also want to enter other attractive leasing markets and the factoring business. Growth always goes hand in hand with high profitability because our high return on equity represents a key value driver of our business model and opens up attractive refinancing options for us on the capital markets. Our processes are also geared toward speed, stability, and security.

We generate growth with a comprehensive service package: our decentralized sales organization provides personal and intensive support for the currently more than 13,000 resellers, of which 6,000 are in other European countries. We also provide support for our partners in developing their own business. In other words, we offer an attractive package and not just leasing terms. We use our franchise system to expand into numerous foreign markets at the same time. By now we have an attractive franchise portfolio at various stages of development. When these companies reach a size that becomes interesting for GRENKELEASING, we exercise our purchase option, just as we did in the UK and Poland in the first quarter of 2008.

The establishment of a large network as quickly as possible with competitive and efficient customer access is our top priority. Therefore, the number of customer inquiries is a key indicator for our business for the generation of new business. In the reporting quarter, the GRENKE Group recorded 33,852 leasing inquiries, of which 18,196 were abroad, corresponding to growth of 12.7 percent (prior year: 30,039 inquiries, of which 13,949 abroad). These inquiries resulted in 15,968 new leases, of which 8,462 were abroad (prior year: 14,645 leases with 6,488 abroad). This means that, despite the calendar effect of fewer working days overall, 9.0 percent more new agreements were concluded than in the prior year, with a strong increase of 30.4 percent in our international markets.

Overall, new business generated by the GRENKELEASING franchise partners increased in the first quarter of 2008 from EUR 17.2m in the prior year to EUR 18.0m in the reporting quarter, adjusted for the acquisition of the companies in the UK and in Poland. The adjusted contribution margin 2 increased from EUR 0.7m to EUR 1.1m. The franchise operations had 53 employees in the first quarter of 2008. The largest single activity was yet again the fast-growing factoring business. In the first quarter of this fiscal year, its volume increased to EUR 11.8m from EUR 10.5m in the prior year. The average factoring period was approx. 30 days, which is down from the approx. 40 days in fiscal year 2007. The decrease in the factoring margin to 2.1 percent compared with 2.3 percent in the prior year was mainly due to this drop, which, however, did not have any effect on profitability.

We successfully implement our business model with highly efficient processes and excellent refinancing options in both mature and new leasing markets. In established markets, we look for tailored offers at competitive rates. We also create additional benefits for our dealers through speed and service as well as with the innovative financing solutions that distinguish us from the competition. In new markets, the margin potential is often comparatively higher, but so is the need for support and training, which is therefore more costly. Additionally, the start-up of business often takes longer. Our strong focus on personal support for resellers is what sets us apart from the competition and enables us to quickly capture a large share of such markets.

EXPANSION IN EUROPE

GRENKE GROUP LOCATIONS IN EUROPE

INTERIM MANAGEMENT REPORT

ECONOMIC ENVIRONMENT

Despite the considerable dampening effects stemming from the international financial market crisis and rising raw materials prices, the European economy remains on target for growth again in 2008. However, in their latest spring forecasts, the leading German economic research institutions anticipate noticeably weaker economic growth compared with early forecasts and expect increasing inflation risks.

At 1.8 percent in Germany,1.9 percent in the EU and 1.7 percent in the euro zone, real growth in Europe is set to outpace growth in the US (1.5 percent), which is on the verge of a recession, and in Japan (1.4 percent) where domestic demand is at a near standstill. Overall, the global economy will continue to grow: while industrial countries will only have 1.7 percent growth in 2008, emerging countries will be the growth drivers, as in the prior year, with growth of more than 6.1 percent.

In Europe, growth will be fuelled by domestic demand. This is particularly true of Germany. While the contribution made by exports diminishes, capital expenditure will remain the growth driver at 2.6 percent. German private consumption is set to increase by 0.8 percent due to higher employment after shrinking by 0.4 percent in the prior year. As companies, particularly small and medium-sized enterprises, stay keen to invest, the economic conditions on their European markets remain favorable for the GRENKELEASING AG Group.

REPORT ON THE RESULTS OF OPERATIONS

The development of the GRENKELEASING AG Group's consolidated income statement was on target for the first quarter of fiscal year 2008. Comparing the figures to those of the prior-year first quarter, it should be noted that the first-time consolidation of the former franchise companies in the UK and Poland are reflected in the figures in a number of ways.

The net interest income from leasing has only been marginally affected since we refinance the lease receivables of our franchise partners and earn a - though smaller than post consolidation – margin on this refinancing. In the other items of the income statement – particularly the expense items – first-time consolidations are more noticeable and account for the lion's share of the increase over the prior year. For example, the average number of employees in the Group increased by 70 in the first quarter, with 44 at the two new companies.

Overall, the net interest income from leasing increased in the Group. Even after the settlement of claims, the interest result increased despite an expected increase in the number of claims. This increase in settlement of claims is normal in phases of slower economic growth and has already been included in our planning. Measuring and pricing of risk are two of our core competences. Accordingly, the current loss rate is lower than estimated. Profit from the insurance business has developed well and the temporary decline in income from disposals in previous years ended as expected.

Our rapid international expansion – above and beyond the first-time consolidation of the UK and Poland – resulted in expenses affecting various items in the income statement. We are currently establishing our market position in a number of countries, thus laying the foundation for future growth. These start-up investments will have a positive effect in the future on earnings as the balance tips in favor of established and profitable subsidiaries and branches.

Beyond these influences, there were effects on operating expenses resulting from exchange rate fluctuations in the first quarter of 2008, particularly in light of the high level of volatility among currencies during the last few months. Economically currency risks are hedged in the Group. However, this does not always lead to a complete balancing for all currency fluctuations in the IFRS accounts.

In total, the GRENKELEASING AG Group generated net profit before taxes of EUR 11.2m in the first quarter of 2008 as planned after EUR 11.4m in the same quarter of the prior year. The two new subsidiaries contributed a profit (before costs of financing the purchase price) of EUR 154k.

The tax burden decreased in the first quarter of 2008 compared with the prior year as a result of the German business tax reform, with net profit for the period increasing to EUR 7.9m, after EUR 7.7m in the same quarter of the prior year.

Report on the Development of the Segments

The primary segments that the GRENKELEASING AG Group operates in are its geographical regions. Regional segmentation distinguishes between lessees based in Germany, France, Switzerland, or in another country. As in fiscal year 2007, the "other countries" segment comprises the subsidiaries in Belgium, Denmark, Ireland, Italy, the Netherlands, Austria, Sweden, Spain, and the Czech Republic. Furthermore, the UK and Poland were also included in the first quarter of 2008 after the takeover of the former franchise companies.

In this interim report, segment revenue has been calculated in the same way as presented in the 2007 annual report. When evaluating the performance of each segment, it should be borne in mind that significant GRENKELEASING AG Group functions are located at the headquarters in Baden-Baden, Germany, and that their costs are thus accounted for in the German segment.

The increase in new business of the GRENKELEASING AG Group in the first quarter of 2008 was due to the fact that Easter was very early this year below our forecast for the full year. This is merely a calendar effect which will be reversed in the second quarter of 2008 and balance out in the first half of the year. New business in the first quarter was therefore on target.

Our continued high level of profitability is particularly pleasing. The GRENKELEASING AG Group increased its new business in the first quarter of 2008 to EUR 114.0m after EUR 100.0m in the prior year. At the same time, contribution margin 2 rose to EUR 16.6m from EUR 14.8m. With a contribution margin 2 of 14.6 percent, we maintained the profitability of new business at the prior-year level, even though we consolidated two companies in the UK and Poland for the first time, which added new business of EUR 6.6m with a contribution margin of only EUR 0.9m and a slightly below average contribution 2 margin of 13.6 percent.

France remained the most important of our fast growing foreign markets in the first quarter of 2008, with growth in new business of 28.8 percent to EUR 31.2m. We also realized a good contribution margin 2 of 14.1 percent, just short of the prior-year level.

In Switzerland, we are now back on course for growth and increased new business there by 8.5 percent to EUR 4.0m in the first quarter of 2008. This is the first foreign market where we have become the market leader for small-ticket IT leasing. At 20.0 percent, we have achieved a higher than average contribution margin 2 here. Italy has developed into our second-largest foreign market with rapid growth once again up 102.5 percent to EUR 6.4m in the first quarter of 2008. An attractive margin of 12.1 percent was achieved despite the strong growth.

In Spain, the newly opened office in Madrid is contributing to strong growth in new business. The new business and contribution margin 2 figures include both our group company in Barcelona as well as our franchise partner in Madrid. In the first quarter, Madrid made a significant contribution to new business, with Barcelona also growing as anticipated. Overall, new business in Spain rose by 29.4 percent to EUR 4.1m in the first quarter of 2008 with a noticeable improvement in the contribution margin 2 to 15,3 percent.

Our new company in the UK increased new business significantly in the first quarter with an rise of 30.3 percent to EUR 4.0m and a contribution margin 2 of a good 15.0 percent. New business of the new company in Poland was EUR 0.3m lower than the prior year due to market conditions and amounted to EUR 2.6m, but the contribution margin 2 of EUR 0.3m remained steady and the margin increased to 11.4 percent.

While segment revenue in Germany of EUR 22.5m for the first quarter of 2008 was slightly below that of the prior year (EUR 23.1m) due to a recent slowdown in new business, we generated significant growth in other regions. France remained the growth driver with growth of 42.2 percent to EUR 10.5m compared with the prior year.

Another positive development was the moderate increase in earnings in Switzerland of 4.9 percent to EUR 1.8m despite the temporary decline in new business caused by staff shortages in the past fiscal year. The increase in earnings in the other countries segment by EUR 2.9m, or 77.6 percent was largely due to the first-time consolidation of the companies in the UK and Poland.

The development of the segment Germany reflects, on top of the weaker new business, the additional expenses required for the fast international expansion, as the later also leads to higher expenses in the Group's headquarter. Thus, pre-tax earnings in Germany are currently declining, while we are achieving strong earnings growth in France in particular. Earnings in Switzerland were in the first quarter still below the previous year's level due to the temporarily weaker new business in the last year. In the segment Other Countries earnings rose strongly from a low level – not the least due to the first-time consolidations of the two new companies.

REPORT ON THE FINANCIAL POSITION AND NET ASSETS

The GRENKELEASING AG Group has a very sound equity ratio. In the first quarter of the fiscal year, it improved again to 18.2 percent after being at 17.9 percent at the end of the prior year, still above our target of at least 16 percent. In light of the current uncertainties in international capital markets, we feel more than comfortable with this slight overcapitalization. For the medium term, our goal is to reach an equity ratio of at least 16 percent with a ROE of 16 percent - in relation to this equity ratio. These key data ensure our good long-term rating of BBB+ with a stable outlook and our short-term rating of A2 by Standard & Poor's as well as our good standing on the capital markets.

In the balance sheet, the first-time consolidation of the new subsidiaries in the UK and Poland mainly resulted in a shift between the two items lease receivables and loans to franchisees. As both companies had the same business model as the Group because they were former franchise partners of GRENKELEASING AG, the structure of the Group's balance sheet did not change significantly after first-time consolidation.

Total assets increased only slightly during the reporting quarter by 2.0 percent to EUR 1,286.7m. As before, 80 percent of assets related to lease receivables and approx. 70 percent of liabilities related to the refinancing of the leases. The Group only had bank liabilities to finance investments in buildings, which only amount to 1.1 percent of total assets.

The Group's cash and cash equivalents decreased during the first quarter of 2008 from EUR 53.4m to EUR 43.1m. This is primarily the result of the payment of the purchase prices totalling EUR 7.5m for the two the former franchise companies that were taken over. The Group's liquidity improved further during the quarter. Three additional promissory note loans were issued or concluded which total EUR 103m and have tenors of three years. Furthermore, the total volume of committed revolving credit facilities was raised by EUR 60k. And finally, we increased one of our assetbacked commercial paper programs by EUR 50m.

The Group has traditionally had access to a wide range of refinancing instruments which can be used flexibly depending on the performance of the various parts of the capital market. This means that not only the EUR 100m refinancing of the bond maturing on April 30, 2008 is ensured, but the Group also has sufficient room for maneuver for refinancing its growing new business.

In terms of cash flow, earnings before taxes including the non-cash items contained therein remained with EUR 12.2m on par with the first quarter of 2007. The Group's growing new business was reflected in the EUR 18.8m increase in lease receivables compared with EUR 14.3m in the same quarter of the prior year.

The strong position of the Group in capital markets is exemplified by the successful refinancing of its lease receivables: the volume for refinancing in the reporting quarter was EUR 136.7m compared with EUR 88.0m in the prior year. The Group refinanced both these commitments and the growing new business, generating a cash inflow of EUR 192.7m. Cash flow from the changed lease receivables refinancing, including other items – in particular the largely unchanged annuity payments of EUR 55m to refinancers – amounted to EUR 12.1m, compared with EUR 6.4m in the prior year.

Loans to franchisees decreased by EUR 0.6m as planned after the takeover of both companies, whereas in the prior year, EUR 5.5m was paid out. The net cash flow from operating activities, including other assets and liabilities, paid taxes, and net interest income, improved from minus EUR 8.0m in the prior year to minus EUR 2.6m in the first quarter of 2008.

As already mentioned, there was cash outflow of EUR 7.5m for the takeover of both of the former franchise companies – due to the different profitability of both companies and net cash and cash equivalents gained with each company – EUR 6.8m for the Polish subsidiary and EUR 0.7m for the British company.

REPORT ON FORECASTS AND THE OUTLOOK FOR THE GROUP

Opportunities and Risks

The risk situation of the GRENKELEASING AG Group has not changed significantly compared with the presentation in the 2007 annual report. With franchise partners in Romania in fiscal year 2007 and in Slovakia at the beginning of 2008, two additional non-euro zone countries have been added. The refinancing of our franchise partners outside of the euro zone could lead to currency risks, but these are mitigated with our stringent financial risk strategy using derivatives to hedge our exposure to foreign currency risks.

In fiscal year 2008, the risk of increasing interest rates in response to higher inflation in the euro zone will also play a major role. In refinancing lease receivables, the Group is only exposed to a low level of interest rate risk as refinancing at floating rates is hedged with derivatives.

In fiscal year 2007, a considerable shortage of refinancing means and a visible widening of the interest spread was observed on the international financial markets as a result of the sub-prime crisis on the US real estate market. This trend, particularly toward wider spreads, continued in the reporting quarter with a high level of volatility. Despite the initial signals that the markets are calming down, it remains to be seen when the volatility will subside again and whether the spreads will shrink in the long term.

The refinancing of the GRENKELEASING AG Group, however, was not affected by this turmoil during the first quarter of the fiscal year. We have clearly proven our position again in a currently challenging market through our successful issue of three promissory note loans and the expansion of the revolving credit facilities and the volume of assetbacked commercial papers available to us. Furthermore, our excellent equity ratio and the available debt instruments guarantee the refinancing of the bond that will mature at the end of April (volume of EUR 100m) and the solid financing of new business.

As growth and profitability of the new business can be influenced by changes in interest rates in general, the length of time before we pass on interest rate changes to customers has a temporary influence on profitability. We have been able to pass on the current capital market-related increase in refinancing expenses related to our new business on the market and we expect that we will be able to pass on further potential increases over the course of the year. The underlying risk of interest rate sensitivity, inherent in our business model, remains thus clearly limited even in the current capital markets environment.

Anticipated Development of Business

Both new business and profitability of the GRENKE Group and its franchisees were satisfactory and as planned in the first quarter of the fiscal year. Noticeably tighter lending policies and the clear tendency of some banks starting to withdraw from the small-ticket leasing business, thereby easing the competition situation somewhat, will stimulate new business. On the whole, we anticipate that growth in new business will reach our medium-term goal of 10 percent in the current year as well.

Irrespective of the fact that we will grasp any growth opportunities presenting themselves, the focus in the current fiscal year will clearly remain on strengthening earnings quality and therefore on increasing contribution margins - not least because of the ongoing uncertainties on the capital markets which may spill over onto the rest of the economy. For the GRENKELEASING AG Group in fiscal year 2008, we expect a stable and positive development of net profit, falling within a range of EUR 30.6m to EUR 33m. The tax authorities have not clarified details about how forfaiting transactions will be taxed, adding a question more to this forecast.

GRENKELEASING AG, BADEN-BADEN CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM JANUARY 1, 2008 TO MARCH 31, 2008

		3-Months Report
EURk	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007
Income from interest on lease receivables	26,227	23,216
Expenses from interest on refinancing liabilities	9,655	7,829
Net interest income from leasing business	16,572	15,387
Settlement of claims	4,957	4,181
Net interest income after settlement of claims from leasing business	11,615	11,206
Income from insurance business	5,309	4,482
Expenses from insurance business	392	390
Profit from insurance business	4,917	4,092
Profit from new business	6,004	4,806
Income from disposals	4,003	3,444
Expenses from disposals	3,095	2,652
Profit from disposals	908	792
Other operating income	250	279
Personnel expenses	6,462	5,299
Operating expenses	1,595	1,303
Administrative expenses	748	718
Consulting and audit fees	791	738
Selling expenses (without commissions )	1,008	679
Amortization/ depreciation	777	469
Other operating expenses	881	363
Other taxes	254	211
Profit/ loss from ordinary operations	11,178	11,395
Expenses/ income from the fair value measurement	0	-2
Other interest income	213	155
Other interest expenses	201	165
Earnings before taxes	11,190	11,383
Income taxes	4,091	14,375
Deferred taxes	-782	-10,642
Net profit for the period	7,881	7,650
Earnings per share (basic)	0.58	0.56
Earnings per share (diluted)	0.58	0.56
Average shares outstanding (basic)	13,684,099	13,679,679
Average shares outstanding (diluted)	13,684,099	13,693,574

GRENKELEASING AG, BADEN-BADEN CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008

EURk Assets	3-Months Report 31.03.2008	Annual Accounts 31.12.2007
Current assets
Cash on hand and balances with banks	43,064	53,395
Financial assets	2,821	2,721
Lease receivables	412,910	387,454
Trade receivables	2,342	2,122
Lease assets for sale	11,274	11,878
Tax receivables	6,654	6,111
Other current assets	50,363	64,874
Total current assets	529,428	528,555
Non-current assets
Lease receivables	644,180	612,604
Property, plant and equipment	33,572	32,830
Intangible assets	12,309	3,180
Deferred tax assets	16,795	14,572
Other non-current assets	50,396	69,668
Total non-current assets	752,252	732,854
Total assets	1,286,680	1,261,409

GRENKELEASING AG, BADEN-BADEN CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008

EURk Liabilities and Equity	3-Months Report 31.03.2008	Annual Accounts 31.12.2007
Liabilities
Current liabilities
Liabilities from the refinancing of lease receivables	318,011	340,666
Trade payables	6,762	7,410
Tax liabilities	4,718	3,781
Provisions	2,118	1,838
Current portion of non-current bank liabilities	5,808	5,705
Financial instruments with negative fair market value	1,375	1,261
Other current liabilities	8,860	11,038
Deferred lease payments	56,634	52,219
Total current liabilities	404,286	423,918
Non-current liabilities
Liabilities from the refinancing of lease receivables	592,840	558,108
Non-current bank liabilities, less the current portion	8,291	8,209
Deferred tax liabilities	44,723	43,585
Other non-current liabilities	2,387	1,422
Total non-current liabilities	648,241	611,324
Equity
Capital stock	17,491	17,491
Capital reserve	60,166	60,166
Revenue reserves	4,513	2,417
Currency translation	328	-608
Hedging reserve	401	1,200
Reserve for actuarial gains / losses	-94	-62
Profit carryforward	151,348	145,563
Total equity	234,153	226,167
Total liabilities and equity	1,286,680	1,261,409

GRENKELEASING AG, BADEN-BADEN CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM JANUARY 1, 2008 TO MARCH 31, 2008

EURk		01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007
	Earnings before taxes	11,190	11,383
	Non-cash items contained in net profit for the period and reconciliation to cash flow from operating activities
+	Amortization/ depreciation	777	469
-/+	Profit/ loss from the disposals of equipment and intangible assets	1	0
-/+	Investment income	-12	10
-/+	Non-cash changes in equity	3	-80
+/-	Increase/ decrease in other provisions	281	6
-	Additions of lease receivables	-120,327	-105,525
+	Payments by lessees	108,135	95,620
+	Disposals/ reclassifications of lease receivables at residual carrying values	22,755	21,300
+/-	Changes from other set-offs	0	-13
-	Interest income from lease receivables	-26,227	-23,216
-	Increase in other receivables from lessees	-2,519	-2,943
+/-	Currency translation differences	-588	511
=	Change in lease receivables	-18,771	-14,266
+	Additions of liabilities from the refinancing of lease receivables	192,714	141,350
-	Payment of annuities to refinancers	-54,961	-54,545
-	Disposal of liabilities from the refinancing of lease receivables	-136,661	-87,955
+	Interest expense from lease liabilities	9,654	7,829
+	Change from fair value measurement	0	0
+/-	Currency translation differences	1,331	-265
=	Change in liabilities from the refinancing of lease receivables	12,077	6,414
-	Issue of loans	633	-5,467
	Changes in other assets/liabilities
-/+	Increase/decrease in other assets	-6,468	-2,477
+/-	Increase/decrease in deferred lease payments	4,414	4,371
+/-	Increase/decrease in other liabilities	-3,067	-4,683
=	Cash flow from operating activities	1,058	-4,320

continued on page 19

GRENKELEASING AG, BADEN-BADEN CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM JANUARY 1, 2008 TO MARCH 31, 2008: CONTINUED

EURk		01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007
-/+	Taxes paid/ received	-3,696	-3,718
-	Interest paid	-201	-165
+	Interest received	213	155
=	Net cash flow from operating activities	-2,626	-8,048
-	Purchase of equipment and intangible assets	-321	-1,013
+	Proceeds from sale of equipment and intangible assets	11	17
-	Acquisition of subsidiaries (net of cash acquired)	-7,544	0
=	Cash flow from investing activities	-7,854	-996
+/-	Raising/ repayment of bank liabilities	75	-266
=	Cash flow from financing activities	75	-266
	Cash funds at the beginning of period
	Cash on hand and balances with banks	53,395	55,677
-	Bank liabilities from overdrafts	-4,604	-6
=	Cash and cash equivalents at beginning of period	48,791	55,671
+/-	Change due to currency translation	-35	7
=	Cash funds after currency translation	48,756	55,678
	Cash funds at the end of period
	Cash on hand and balances with banks	43,064	48,325
-	Bank liabilities from overdrafts	-4,713	-3,508
=	Cash and cash equivalents at end of period	38,351	44,817
	Change in cash and cash equivalents during the period (Sum of cash flows)	-10,405	-10,861
	Net cash flow from operating activities	-2,626	-9,599
+	Cash flow from investing activities	-7,854	-996
+	Cash flow from financing activities	75	-266
=	Total cash flow	-10,405	-10,861

GRENKELEASING AG, BADEN-BADEN STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY

EURk	Subscribed capital	Capital reserve	Legal reserve	Statuatory reserve	Hedging reserve	Reserve for actuarial gains and losses	Currency translation	Profit carry forward	Equity, share holders	Equity, Group
Equity as per 01.01.2007	17,486	60,052	1,871	48	1,310	-36	-511	121,460	201,680	201,680
Fair value measurement of hedging instruments					217				217	217
Deferred taxes					-27	1			-26	-26
Change in pension reserve						-4			-4	-4
Net profit for 2007								7,650	7,650	7,650
Currency translation							-263		-263	-263
Equity as per 31.03.2007	17,486	60,052	1,871	48	1,500	-39	-774	129,110	209,254	209,254
Equity as per 01.01.2008	17,491	60,166	2,369	48	1,200	-62	-608	145,563	226,167	226,167
Fair value measurement of hedging instruments					-926				-926	-926
Deferred taxes					127	10			137	137
Distribution to revenue reserves			2,096					-2,096	0	0
Change in pension reserve						-42			-42	-42
Net profit for 2008								7,881	7,881	7,881
Currency translation							936		936	936
Equity as per 31.03.2008	17,491	60,166	4,465	48	401	-94	328	151,348	234,153	234,153

GRENKELEASING AG, BADEN-BADEN SEGMENT REPORTING AS OF MARCH 31, 2008 REGIONS (PRIMARY REPORTING FORMAT)

SEGMENT REPORTING

In keeping with the rules on segment reporting, the individual data of the financial statements were broken down into regions ("Primary Segments"). The regional breakdown shows whether the lessees are resident in Germany, France, Switzerland or in other foreign countries. The segment "Other Countries" comprises Belgium, Denmark, United Kingdom, Ireland, Italy, the Netherlands, Austria, Poland, Sweden, Spain and the Czech Republic.

	Segment Germany		Segment France		Segment Switzerland		Segment Other Countries		Total Segments
EURk	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007
Revenues	22,542	23,084	10,465	7,348	1,822	1,737	6,715	3,780	41,544	35,949
Segment result	5,348	6,810	4,430	3,437	543	571	869	565	11,190	11,383
Earnings before taxes									11,190	11,383
Income taxes									3,309	3,733
Net profit for the period									7,881	7,650

DETERMINATION OF SEGMENT DATA

The segment revenues comprise the proceeds from the capitalisation of lease receivables, from the sale of leasing items, insurance revenues and interest income. The segment result is determined without consideration of taxes (EBT).

GRENKELEASING AG, BADEN-BADEN STATEMENT OF RECOGNIZED PROFITS AND LOSSES

EURk	01.01.2008 to 31.03.2008	01.01.2007 to 31.03.2007
Change in the fair of financial instruments used for hedging purposes recognized in equity	-926	217
Adjustment item for the currency translation of foreign subsidiaries	936	-263
Accounting gains and losses from defined benefit pension committments and similar obligations	-42	-4
Deferred taxes on changes in value recognized directly in equity	137	-26
Changes in value recognized directly in equity	105	-76
Profit after taxes	7,881	7,650
Total net profit for the period and changes in value recognized in equity	7,986	7,574

SELECTED EXPLANATORY NOTES

ACCOUNTING POLICIES

Like the consolidated financial statements as of December 31, 2007, GRENKELEASING AG's (hereinafter also referred to as the "Company") interim financial reporting as of March 31, 2008 complies with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and adopted by the EU.

The provisions of IAS 34 concerning interim financial reporting have been applied. All interim financial statements of the companies included in the consolidated financial statements of GRENKELEASING AG have been prepared in accordance with uniform accounting policies.

As the interim financial statements are based on the consolidated financial statements, please see the detailed description of accounting, measurement and consolidation methods in the notes to the consolidated financial statements as of December 31, 2007.

NEW MANDATORY ACCOUNTING STANDARDS

In recent years, the IASB has published various amendments of IFRSs, and new IFRSs and International Financial Reporting Interpretations Committee interpretations (IFRICs). The provisions which have been mandatory since January 1, 2008 and are relevant or potentially relevant for GRENKELEASING are outlined below, together with their impact on the consolidated financial statements. Changes to the IFRSs which have not been explicitly mentioned are not relevant for the Company's financial statements and do not have any effect on recognition and measurement.

On November 2, 2006, IFRIC 11, "IFRS 2 Group and Treasury Share Transactions" was published. The interpretation states that share-based payment transactions in which an entity receives services or goods as consideration for its own equity instruments must be accounted for in accordance with IFRS 2, regardless of how the equity instruments were acquired. Adoption of IFRIC 11 is mandatory for fiscal years beginning on or after March 1, 2007. IFRIC 11 was adopted by the EU on June 1, 2007. There were no effects stemming from its mandatory adoption as no relevant transactions were carried out.

VOLUNTARY ADOPTION OF NEW ACCOUNTING STANDARDS OR STANDARDS YET TO BE ENDORSED BY THE EU

Apart from the IFRSs whose application is mandatory for fiscal years 2007 and 2008, the IASB has also published other IFRSs and IFRICs, some of which have already received EU endorsement but which will only become mandatory at a later date. Below, only those standards and interpretations which could be relevant for GRENKELEASING AG and were not discussed in the consolidated financial statements as of December 31, 2007 are described. Voluntary early application of these standards is explicitly permitted and encouraged. However, GRENKELEASING AG only applies this option where mentioned explicitly below.

The amendments to IFRS 2 were published in January 2008 and are operative for the first time for fiscal years beginning on or after January 1, 2009. The revision clarifies that vesting conditions are service and performance conditions. It also specifies that cancellations of share-based payment arrangements by employees should receive the same accounting treatment as cancellations by other parties. The transitional provisions provide for retrospective application of the new regulation.

The revised IFRS 3 was published in January 2008 and is operative for the first time for fiscal years beginning on or after July 1, 2009. The standard was subject to comprehensive revision as part of the IASB and FASB convergence project. The main changes include the introduction of a choice for the measurement of non-controlling interests between recognizing them at their share of the acquiree's net identifiable assets (purchased goodwill method) and the full goodwill method, whereby the total amount of goodwill acquired, including that attributable to non-controlling interests, is recognized.

Additional changes are the subsequent measurement of existing equity interests in profit or loss after obtaining control for the first time (successive business combination), the necessary recognition of consideration contingent on future events as of the acquisition date and the recognition of transaction costs in profit or loss. The transitional provisions specify prospective application of the changes. Assets and liabilities that arose from business combinations prior to the first-time application of the new standard are not affected.

The revised version of IAS 27 was issued in January 2008. The changes are operative for the first time for fiscal years beginning on or after July 1, 2009. The amendments are the result of a joint project undertaken by the IASB and the FASB to revise the accounting provisions for business combinations. The amendments primarily relate to accounting for non-controlling interests (minority interests) that will in future participate in full in the group's losses and for transactions that lead to loss of control of a subsidiary and the effects of which are to be recognized in profit or loss.

Changes in ownership interest that do not result in a loss of control are accounted for as equity transactions. The transitional provisions, which generally specify retrospective application of changes, stipulate prospective application of the above changes. Assets and liabilities that arose from such transactions prior to the first-time application of the new standard are therefore not affected.

The amendments to IAS 32 and IAS 1 were issued in February 2008 and become effective for fiscal years beginning on or after January 1, 2009. The revision mainly concerns the classification of puttable shareholder contributions as equity or financial liabilities. The previous regulation forced entities in some cases to report the entity's capital as financial liabilities as a consequence of statutory termination rights on the part of the shareholder. In the future, such shareholder contributions should be classified as equity if settlement at fair value is agreed and the contributions have no priority over other claims to the net assets of the entity.

If the revised versions of IFRS 3 and IAS 27 are adopted early or business combinations occur in periods when they are applied for the first time, a difference may arise in the amount of goodwill determined upon first-time consolidation. This is especially true if non-controlling interests (minority interests) are created, which is currently not anticipated.

Otherwise, the aforementioned standards and interpretations are not expected to have a significant impact on the financial statements of GRENKELEASING AG.

ACQUISITIONS IN FISCAL YEAR 2008

Business combinations are recognized using the acquisition method.

Goodwill is initially measured at cost, which is the excess of the purchase price over and the fair value of the identifiable assets and liabilities of the acquired entity as of the date of acquisition plus the directly attributable acquisition costs.

After initial recognition, all goodwill must be tested for impairment at least once a year pursuant to IAS 36 to prove its adequate valuation (impairment-only approach). This regular impairment test is conducted in the third quarter of each year on the basis of the six-month figures. If there are indications that goodwill might be impaired, more frequent tests must be conducted in addition to the mandatory annual impairment test.

Effective January 1, 2008, GRENKELEASING AG acquired all of the shares in GRENKELEASING Sp.z o.o, Poznan, Poland, and Grenke Leasing Ltd., Guildford, UK. The dates of purchase (date control was obtained) as defined in IFRS 3 were January 24, 2008 and January 30, 2008, respectively.

Both entities were part of the GRENKELEASING AG franchise system before they were acquired.

The fair values of the identifiable assets and liabilities at the acquisition date and the corresponding carrying amounts immediately before the date of acquisition of GRENKELEASING Sp.z o.o, Poznan, Poland, are as follows:

GRENKELEASING Sp.z o.o, Poznan, Poland

EURk	Fair value under IFRSs	Carrying amount in local statutory accounts
Intangible assets (dealer network)	1,330	2
Property, plant and equipment	84	114
Trade receivables	2	2
Lease receivables	16,965	15,893
Cash and cash equivalents	1,136	1,136
Deferred tax assets	404	171
Other assets	195	195
Total assets	20,116	17,513
Liabilities from the refinancing of lease receivables	15,703	15,703
Trade payables	386	386
Provisions	0	0
Deferred tax liabilities	915	464
Other liabilities	112	112
Total liabilities	17,116	16,665
Net assets	3,000
Goodwill arising on acquisition	4,978
Total acquisition cost	7,978

The acquisition cost of the merger with GRENKELEASING Sp.z o.o totaled EUR 7,978k and included the costs directly attributable to the business combination.

Acquisition cost	EURk
Purchase price	7,881
Cost directly attributable to the acquisition	97
Total	7,978

Cash outflow on acquisition	EURk
Net cash acquired with the subsidiary	1,136
Cash paid	7,978
Net cash outflow	6,842

Goodwill of EUR 4,978k was disclosed.

The fair values of the identifiable assets and liabilities at the acquisition date and the corresponding carrying amounts immediately before the date of acquisition of Grenke Leasing Ltd., Guildford, UK, are as follows:

Grenke Leasing Ltd., Guildford, UK

EURk	Fair value under IFRSs	Carrying amount in local statutory accounts
Intangible assets (dealer network)	618	0
Property, plant and equipment	378	93
Trade receivables	11	11
Lease receivables	21,296	19,718
Cash and cash equivalents	336	336
Deferred tax assets	1,656	0
Other assets	176	176
Total assets	24,471	20,334
Liabilities from the refinancing of lease receivables	23,959	24,516
Trade payables	645	88
Provisions	0	0
Deferred tax liabilities	967	0
Other liabilities	173	173
Total liabilities	25,744	24,777
Net assets	-1,273
Goodwill arising on acquisition	2,311
Total acquisition cost	1,038

The acquisition cost of the merger with Grenke Leasing Ltd. totaled EUR 1,038k and included the costs directly attributable to the business combination.

Acquisition cost	EURk
Purchase price	1,000
Cost directly attributable to the acquisition	38
Total	1,038
Cash outflow on acquisition	EURk
Net cash acquired with the subsidiary	336
Cash paid	1,038
Net cash outflow	702

Goodwill of EUR 2,311k was disclosed.

The companies have contributed EUR 154k to the consolidated profit after taxes since the date of first-time consolidation.

Goodwill includes the fair value of expected synergies and growth opportunities from the acquisition. The dealer network is disclosed under intangible assets in accordance with IAS 38. It is identifiable and expected to generate future economic benefits. A potential purchaser would not pay more for the dealer network than it would cost to build. The amortization period is six years.

Receivables from finance leases were measured at their present values taking into account the refinancing interest rate valid on the acquisition date, the probability of default, and other related risks.

The purchase price allocation is still provisional in both cases pursuant to IFRS 3.62.

USE OF JUDGMENT AND MAIN SOURCES OF ESTIMATING UNCERTAINTIES

The main estimating uncertainties and the associated disclosure requirements are in the following areas:

• ` Measurement of non-performing lease receivables on the basis of the recoverability rate
• ` Use of estimated residual values at the end of the lease term in determining the present value of lease receivables
• ` Recognition of lease assets for sale at estimated residual values

Non-performing lease receivables are carried at nominal value less appropriate bad debt allowances determined using percentages and processing categories. Percentages are calculated using statistical methods and are reviewed once a year for validity. Processing statuses are grouped together in processing categories set up with a view to risk. The following table lists the processing categories:

Category	Description
0	Current contract not in arrears
1	Current contract in arrears
2	Terminated contract with serviced installment agreement
3	Terminated contract (recently terminated or court order for payment applied for)
4	Legal action (pending or after objection to court payment order)
5	Order of attachment issued
6	Statement in lieu of oath (applied for or issued)
7	Derecognized
8	Being settled (not terminated)
9	Discharged (completely paid)

A decrease in value is assumed for categories 2 to 7 as the contracts have been terminated due to defaults in payment. The allowance rates range between 5 percent and 100 percent.

Receivables from non-performing contracts are included in other current lease receivables. Lease receivables break down as follows:

Non-guaranteed residual values are used to calculate lease receivables in accordance with the definition in IAS 17. They are determined on the basis of past experience and statistical methods. Based on experience, residual values for additions until 2006 range between 11 percent and 15 percent of historical cost, depending on the term of the lease. In fiscal year 2007, this classification was split further into several groups according to the contract term. For additions from 2007 onward, the residual values range between 7.7 and 28.4 percent of historical cost.

Lease assets for sale are measured at historical residual values, taking into account their actual salability. As of the balance sheet date, the residual values used amounted to between 5.9 and 23.4 percent of the original acquisition cost. If a sale is considered unlikely due to the condition of the asset, the asset is written off and recognized as an expense.

EURk	March 31, 2007	March 31, 2007
Changes in performing lease receivables
Balance at beginning of period	930,195	876,755
+ Change in the period	53,442	11,323
Lease receivables (current + non-current) from current contracts at period-end	983,637	888,078
Changes in non-performing lease receivables
Gross receivables at beginning of period	139,435	134,248
- Accumulated valuation allowances at beginning of period	-69,572	-65,790
= Non-performing lease receivables at beginning of period	69,863	68,458
+ Change in gross receivables during the period	8,578	6,380
- Disposals of gross receivables during the period	4,297	3,061
+ Disposal of accumulated valuation allowances during the period	3,000	1,837
- Addition of accumulated valuation allowances during the period	3,691	2,213
Non-performing lease receivables at period-end	73,453	71,401
Lease receivables (carrying amounts of current and non-current receivables) at beginning of period	1,000,058	945,213
Lease receivables (carrying amounts of current and non-current receivables) at period-end	1,057,090	959,479

REFINANCING

On September 18, 2006, GRENKE FINANCE Plc, Dublin, Ireland, concluded three revolving credit facilities with three German banks. In the first quarter 2008 two further credit facilities were concluded. The total volume of those facilities thus rose from EUR 90,000k to EUR 150,000k. Over the one-year term of the agreement, minimum amounts of EUR 5,000k can be drawn on at any time for a period of a month. As of March 31, 2008, EUR 35,000k of these facilities had been drawn on at an average interest rate of 4.76 percent. They are all due within one month, i.e. in April 2008.

On March 6, 2008, GRENKE FINANCE Plc, Dublin, Ireland, issued a fixed-interest promissory note loan with a nominal value of EUR 25,000k and a three-year term, bearing interest at a rate of 4.719 percent.

On the same date, the company took out a variable-interest promissory note loan for EUR 37,500k maturing on March 10, 2011. The loan carries variable interest at three-month Euribor plus a margin of 85 basis points.

Furthermore, on February 29, 2008, a fixed-interest promissory note loan with a nominal value of EUR 40,000k has been taken out. The note will be disbursed on April 30, 2008. It has a three-year term and carries an interest rate of 4.6905 percent.

The following interest swaps were concluded in the first quarter of 2008:

Date of conclusion	Initial volume (EURk)	Fixed interest rate (%)
January 24, 2008	25,000	3.67%
January 24, 2008	35,000	3.99%
January 25, 2008	19,900	3.87%
March 28, 2008	7,500	4.245%
March 28, 2008	10,000	4.22%
March 28, 2008	35,000	4.56%
March 28, 2008	27,600	4.04%

On January 29, 2008, the hedging relationship for one of the swaps was terminated since the forecasted transaction (hedged item) is no longer expected to be carried out. This generated income of EUR 78k.

The GRENKELEASING AG Group runs three Asset-backed commercial paper -(ABCP)-programs. The volume of Kebnekaise Funding Limited, the ABCP-program with SEB AG, has been raised from EUR 150,000k to EUR 200,000k as per January 30, 2008.

PENSIONS

As of the balance sheet date, the provision for pensions disclosed under non-current liabilities amounted to EUR 143k (CHF 225k). This amount comprises a present value of the obligation (DBO) of EUR 441k (CHF 694k), a fair value of plan assets of EUR 298k (CHF 469k) and an actuarial loss of EUR 42k (CHF 68k). The actuarial loss was recognized in equity in a separate line under capital reserves in accordance with the IAS 19.

As of March 31, 2008, the following income and expenses were disclosed:

`	Service cost:	EUR 13k	(CHF 21k)
`	Interest expense:	EUR 3k	(CHF 5k)
`	Income from interest on plan assets:	EUR 1k	(CHF 2k)

DIVIDEND PAYMENT

The Annual General Meeting on May 6, 2008 will adopt the resolution on the appropriation of GRENKELEASING AG's retained earnings for fiscal year 2007 of EUR 50,472,724.26. The Board of Directors and the Supervisory Board will propose a dividend of EUR 0.60 per share. The remainder of 42,262,264.86, after the deduction of the dividend of EUR 8,210,459.40, shall be carried forward to new account.

In the prior year, the Annual General Meeting adopted the proposal of the Board of Directors and the Supervisory Board, resolving to appropriate, and appropriating, the retained earnings for 2006 as follows:

Retained earnings	EUR 51,069,498.00
Distribution of a dividend of EUR 0.55 per share for a total of 13,679,679 shares	EUR 7,523,823.45
Transfer to revenue reserves	--
Profit carryforward (to new account)	EUR 43,545,674.55

The dividend was paid to the shareholders of GRENKELEASING AG on May 9, 2007.

RELATED PARTY TRANSACTIONS

Phantom Stock Agreement

The Supervisory Board of GRENKELEASING AG concluded a phantom stock agreement on March 12, 2007 with Dr. Hack, a member of the Board of Directors, as the beneficiary. Under this agreement, Dr. Hack receives for the current fiscal year and the following fiscal year a claim to payment equal to the increase in value of 30,000 shares in GRENKELEAS-ING AG in relation to a defined basic share price for the respective fiscal year.

The share price is the unweighted arithmetic mean of the Xetra closing prices on all trading days from December 1 to December 23 of the respective prior year. The basic share price for 2008 is EUR 22.18. The maximum payment arising from this agreement is limited to EUR 600,000 for the total period of three years. Under the program, Dr. Hack is obligated to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares.

As of March 31, 2007, the phantom stock was worth EUR 121k. The plan was accounted for as a cash settlement plan and the EUR 30k change in fair value was recognized in profit or loss.

EXPANSION OF THE FRANCHISE SYSTEM

Two new franchise companies signed agreements in the first quarter of 2008:

• ` GC Leasing Slovensko s.r.o. with registered office in Bratislava, Slovakia, (contract signed on January 15, 2008)
• ` GRENKE RENTING, S.A., with registered office in Lisbon, Portugal (contract signed on January 25, 2008)

The franchise partners are entitled to use the "GRENKE" brand name, but are legally and financially independent entities.

EMPLOYEES

During the reporting period, the GRENKELEASING AG Group employed an average of 474 persons (prior year: 404), excluding directors.

THE BOARD OF DIRECTORS OF GRENKELEASING AG

THE SUPERVISORY BOARD OF GRENKELEASING AG

Name	Activity	Other Supervisory Board/ Advisory Board Functions
Prof. Dr. Ernst-Moritz Lipp	Chairman of the Supervisory Board,	BOA Holding GmbH, Karlsruhe, Stuten-
Age: 57	Professor of international finance	see, DE; TFL International GmbH, Weil a.
First elected: 2003	General manager of ODEWALD & COMPAGNIE Gesellschaft für Betei-	Rhein, DE; Burkart Verwaltungen GmbH,
Elected until the Annual General Meeting 2008		Singen, DE; Oystar Holding GmbH, Karls-
	ligungen mbH, Baden-Baden, DE	ruhe, DE; SG technologies GmbH, Wa- dern, DE; SG Holding GmbH, Wadern, DE
Gerhard E. Witt	Vice Chairman of the	Grenke Investitionen
Age: 63	Supervisory Board,	Verwaltungs KGaA, Baden-Baden, DE
First elected: 1997	Public auditor and tax advisor,
Elected until the Annual General Meeting 2008	Baden-Baden, DE
Dr. Brigitte Sträter	Member of the Supervisory Board,
Age: 68	Owner and manager of
First elected: 2001	the PR agency CENA,
Elected until the Annual General Meeting 2010	Dusseldorf, DE
Dieter Münch	Member of the Supervisory Board,	Grenke Investitionen
Age: 65	Retired bank officer.	Verwaltungs KGaA, Baden-Baden, DE,
First elected: 2000	Chairman of a foundation,	Weisenburger Bau + Grund AG, DE,
Elected until the Annual General Meeting 2010	Weinheim, DE	Halle/Saale, DE
Dr. Oliver Nass	Member of the Supervisory Board,
Age: 40	Commercial general manager
First elected: 2005	of ESG France, Paris, France
Elected until the Annual General Meeting 2010
Erwin Staudt	Member of the Supervisory Board,	PROFI Engineering Systems AG,
Age: 60	Economics graduate, President	Darmstadt, DE,
First elected: 2005	of the soccer club VfB Stuttgart	USU AG, Möglingen, DE,
Elected until the Annual General Meeting 2010	1893 e.V., Leonberg, DE	Hahn Verwaltungs-GmbH, Fellbach, DE

OVERVIEW OF THE GROUP

THE GRENKELEASING FRANCHISE SYSTEM

	Franchise partners
GRENKEFACTORING GmbH	GC Leasing Slovensko s.r.o.
Baden-Baden (Germany)	Bratislava (Slovakia)
GRENKEAUTOLEASING GmbH	GRENKELEASING Kft.
Bremen (Germany)	Budapest (Hungary)
Kazenmaier FleetService GmbH	Grenke Leasing S.R.L.
Karlsruhe (Germany)	Bucharest (Romania)
	GRENKE RENTING S.A.
	Lisbon (Portugal)
	GRENKE RENT S.A.
	Madrid (Spain)
	GRENKELEASING AS
	Oslo (Norway)

We have used our franchise system since 2003 to develop new markets quickly and for the long term. We have customized the system in line with our business model. Our goal is to introduce our business model and the GRENKELEASING brand to a country and make them known as quickly as possible. For this purpose, we rely on individuals with entrepreneurial spirit and a well-established network in the small-ticket IT business in each country.

We give them an opportunity to establish their own company and work for the success of that company. The franchisees receive access to expertise, proven management tools, and back office support from GRENKELEASING and are entitled to use the "GRENKE" and "GRENKELEASING" brand names.

We also assume responsibility for the audit and refinancing of lease contracts. This is how we ensure that we are always informed of the exact quality of the receivables portfolio and that the GRENKE name becomes established on the market. GRENKELEASING does not hold a stake in these legally independent franchise entities, but after a specific period of usually four to six years, it has the option to buy the company on pre-defined terms. The structure of the purchase option creates incentives for growth as well as high level of quality of the receivables portfolio for the franchise partners.

In fiscal year 2007 and at the beginning of fiscal year 2008, we expanded our franchise network considerably with a total of four new companies and, for the first time, acquired two franchise companies. We use the franchise system not only to penetrate new countries but also to develop new products beyond traditional small-ticket IT leasing. For instance, our partner Kazenmaier Fleetservice GmbH, Karlsruhe, Germany, has been offering financing for vehicle fleet management in the southern part of Germany since mid-2006. And at the beginning of 2006, GRENKEFACTORING GmbH commenced its operations.

THE GRENKEFACTORING GMBH

With small-ticket factoring we are opening a market which does not currently exist in this form. Our goal is to offer to our existing customer network the factoring of smaller amounts which banks and traditional factoring companies would usually not purchase. This represents an organic development of our business model for small-ticket IT leasing, transferring our core competences – standardization and automation of business processes, efficiency and speed in their settlement – to additional types of financing.

We offer notification factoring, i.e., we take care of the entire receivables management, including the collection of receivables and any dunning letters to debtors. For small companies comprising our main target group, this is a significant additional service which relieves them of a substantial administrative burden. For GRENKELEASING, notification factoring, as opposed to non-notification factoring, means additional security against counterpartyrisk as debtors will only be discharged in respect to their payment obligations if they pay directly to us.

In Germany, factoring is still less common than in the rest of Europe, but is increasing significantly and is steadily developing into the third pillar of debt financing by companies in addition to bank loans and leasing. GRENKELEASING has positioned itself fast in this attractive market and with 39 factoring users has already captured a market share of around one percent of the German factoring business.

We continue to be optimistic for 2008. The general trend toward the use of factoring will be supported by the subprime crisis in the United States as the banks will once again be much more restrictive in their lending. GRENKEFAC-TORING wants to use this environment to create again significant growth in 2008. However, in the factoring business as in our other areas we will continue to follow our policy of risk adjusted pricing and achieving our margin targets is the basis of our operational steering.

GLOSSARY

ABCP Program

Abbreviation for "Asset-backed commercial paper -program". Under ABCP programs, companies such as leasing companies sell their receivables to a special-purpose entity which issues interest-bearing securities to investors through the capital market. Interest and the principal payments on these securities are made using the cash flows from the assigned receivables on these securities.

ABS bond

Type of refinancing with which several tranches of bonds with different ratings (risk classes) are issued by the SPE. The size of the best-rated tranche is a reflection of the quality of a company's leasing portfolio and risk management and directly impacts the cost of this type of financing.

Asset Broker

GRENKELEASING sells used leased assets in Germany, France, Austria, and Switzerland via its internet portal www.asset-broker.com. Our specialist dealer partners can also use the portal to sell their own demonstration equipment or used goods.

Average number of employees

This is the average number of employees of the GRENKELEASING AG Group in the reporting period. This figure does not include directors; part-time employees are included on a pro rata basis.

BDL

German Leasing Association "Bundesverband Deutscher Leasingunternehmen e.V." BDL, Berlin, www.leasingverband.de

BITKOM

German Association for the Information Industry "Bundesverband Informationswirtschaft, Telekommunikation und neue Medien e.V.", Berlin, www.bitkom.org

Contribution margin

The "contribution margin", also known as gross profit, is a term used in operational cost accounting. The contribution margin is the contribution made, for example, by a product to cover fixed costs and generate a net profit. It is calculated as the difference between revenues and variable costs incurred directly by the product.

At GRENKE, contribution margin 1 is calculated as the present value of the interest margin net of commissions to third parties. Contribution margin 2 includes all present value cash flows from expected revenues (e.g. net income from insurance business) and expenses (excluding sales costs) over the entire term of a lease agreement.

Cost/income ratio

Comparing expenses with income produces the "cost/income ratio". Contrary to approaches typically used in the banking sector, we deduct the cost of loss settlement/risk provisioning from income, even though this results in a less favourable ratio. Increased sales revenue in the leasing market would be possible if greater risks were taken. However, such a cosmetic improvement of the cost/income ratio cannot be the motivation for our business activities, and consequently we do not report in this way. We determine the cost/income ratio as the ratio of the total of all expenses (less settlement of claims and taxes) to income, comprising net interest income from leasing business after loss settlement, net income from insurance business, net income from new business, additional income from realization of assets, other operating income and net interest income (other than from leasing business).

Debt issuance program

The debt issuance program is a flexible refinancing program with standardized documentation. It enables issuers to cover their financing needs by borrowing various currencies and volumes and with varying terms. Within the scope of this program (long-term issue), bonds can be issued on the stock exchange or off the floor. The interest rate is fixed or variable. Depending on the volume, the bonds are placed by one or more dealer banks. The participating banks do not usually assume any underwriting risk. The issuer bears the placement risk.

DISPO framework agreement

Major customers who invest regularly in new equipment conclude a framework agreement with GRENKELEASING and benefit from standardized, attractive terms within that framework. The agreed leasing volumes can also be drawn on in individual tranches by customers. Hence, customers benefit from favourable terms, lower costs and greater flexibility. The customer's reseller is informed of the framework agreement, giving him additional options for increasing business with this customer.

EBIT

Earnings before interest and taxes

EBT

Earnings before taxes

Embedded value

The calculation method for embedded value originated in the insurance industry and is also applicable to leasing companies. Contrary to the trading business, income from lease contracts concluded as of the balance sheet date is not generated immediately, but rather during the term of the contract. The embedded value is the present value of future income from the leasing portfolio and the value of equity without taking future new business into account. The estimated expenses are deducted from the present value of income as of the balance sheet date and supplemented by equity.

Factoring

Factoring is a financial service for the purpose of short-term sales financing. The factor buys the factoring customer's receivables due from its debtor and collects them directly from the debtor. In return for relinquishing the receivables, the factor immediately pays the factoring customer a sum based on the value of the receivable.

Franchise system

In this sales system, the franchisor provides its partners with a license to manage independently its own operations, but remains responsible for the delivery of goods and for advertising. This system is based on franchise agreements which define marketing, business policies, product range and much more. The legally independent franchisee thus benefits from a reputable company name and long-term sales experience. The franchisor can sell its products or services on other market without employing its own capital. GRENKELEASING's franchise system is explained in detail in a separate chapter in this report.

Ifo Institute

"Institut für Wirtschaftsforschung e.V." The ifo institute is one of the largest economic research institutions in Germany which regularly publishes economic research results (www.cesifo-group.de).

IFRS

The International Financial Reporting Standards (IFRSs) are external reporting regulations developed by the International Accounting Standards Board (IASB), an independent private body. The IFRSs, formerly known as the International Accounting Standards (IASs), comprise the standards themselves and the interpretations by the International Financial Reporting Interpretations Committee (IFRIC), formerly known as the Standing Interpretations Committee (SIC). As of fiscal year 2005, the application of these standards is compulsory for publicly traded companies with their registered office in the European Union (EU) in the form endorsed by the EU.

IT Asset Management

Customers who conclude a DISPO framework agreement (see above) are also offered active support for their IT infrastructure (inventory and cost management) in the form of our IT Asset Management tool ("ITAM"). This web-based software facilitates the management of the customer's entire asset portfolio using a standard platform.

ITC-Market

IT and telecommunications market

Mean acquisition value

The "mean acquisition value" is determined as the arithmetic mean of the acquisition costs of all leased assets for which lease agreements were concluded in the reporting period.

New business

"New business" comprises the acquisition costs of all newly acquired assets from leasing and lease-purchase contracts and the factoring volume in the reporting period.

Prime Financial Services Index

That sector index tracks the performance of stocks in the financial sector (excluding banks, which constitute a separate index) admitted to the Prime Standard. The index consists of 50 stocks. The Prime Financial Services Index is one of 18 sector indices of Deutsche Börse AG for the Prime Standard, which include companies of all sizes.

Prime Standard

The Prime Standard is a listing standard of the Frankfurt Stock Exchange with transparency requirements for issuers which exceed those of the General Standard (e.g. quarterly reports have to be published and all corporate communication must also be available in English). A listing in the Prime Standard is a requirement for a listing on one of Deutsche Börse's selective indices such as the DAX, MDAX, TecDAX, or SDAX. GRENKELEASING AG is listed in the SDAX.

Rating

Rating agencies rate the creditworthiness of an issuer over long and short-term periods using a standard rating method. "AAA", for example, is the highest solvency rating, and "C" or "D" indicates a low probability of payment. The leading rating agencies are Moody's and Standard & Poor's.

RoE

Abbreviation for "return on equity". The return on equity is calculated as a ratio of the net profit for the year to the equity disclosed in the balance sheet. The ratio gives an indication as to the return on shareholder capital.

Scoring system

A scoring system is used at leasing companies to determine the creditworthiness of a potential lessee. Using a statistical calculation, the probability of default is determined for a new lease agreement, which forms the basis for a decision as to whether or not to accept the application for a lease. Since 1994, GRENKELEASING has assessed the creditworthiness of its lessees using a scoring system, based on external sources of information, e.g. the credit rating agency Creditreform, and supplemented by its own database. Each potential lessee receives a score which ultimately sways the decision as to whether or not a lease agreement is concluded.

SDAX

The SDAX index contains the 50 largest and most liquid companies from classic sectors ranking just below the MDAX. These may include German and foreign companies, as long as they are listed in the Prime Standard. On January 1, 2003, GRENKELEASING was admitted to the Prime Standard and listed on the SDAX as of February 11, 2003. This new regulation became effective as of March 24, 2003.

Share of corporate customers in the lease portfolio

"Corporate customers" are all lessees who are not subject to specific consumer protection regulations. The figure relates to the number of newly concluded lease agreements in the reporting period.

Share of IT products in the lease portfolio

"IT products" refers to computer equipment (such as PCs, servers, printers), copiers and communication equipment. The figure relates to the number of newly concluded lease agreements in the reporting period.

Small caps

Small companies which do not belong to the highly traded companies of the main indices.

Small-ticket IT leasing

In this market segment, equipment such as notebooks, personal computers, monitors and other peripheral devices, smaller networks, software and telecommunications, backup and copier technology normally costing up to EUR 25,000 are leased.

Volume of leased assets

The volume of leased assets is the total of all (historical) acquisition costs of assets from ongoing leasing and lease purchase agreements.

CALENDAR OF EVENTS 2008

28.04.2008	Publication of Financial Statements of Q1 2008
06.05.2008	Annual General Meeting in Baden-Baden
28.07.2008	Publication of Financial Statements of Q2 2008
27.10.2008	Publication of Financial Statements of Q3 2008 DVFA Analyst Conference in Frankfurt am Main

CONTACT

Renate Hauss Corporate Communications

GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden

Tel.: +49 (0) 7221 5007-204 Fax: +49 (0) 7221 5007-112

www.grenke.de www.weblease-europe.com www.asset-broker.com

E-Mail: investor@grenke.de

The report is published in German and as an English translation. In the event of any conflict or inconsistency between the English and the German versions, the German original shall prevail.

GRENKELEASING AG Neuer Markt 2 D - 76532 Baden-Baden

Tel.: +49 (0) 7221 5007-204 Fax: +49 (0) 7221 5007-112

www.grenke.de www.weblease-europe.com www.asset-broker.com

E-mail: investor@grenkeleasing.com