Grenke AG — Interim / Quarterly Report 2012

Oct 25, 2012

GRENKELEASING AG Group

Quarterly Financial Report as per September 30, 2012

Contents

Key Figures	2
Letter to Shareholders from the Board of Directors	4
The GRENKELEASING AG Share	5
Interim Management Report	6
The Group's Growth Strategy	6
The Economic Environment	8
Report on the Results of Operations	8
Report on Segment Development	10
Report on Financial Position and Net Assets	11
Matters Concerning the Board of Directors	12
Report on the Forecasts and Outlook for the Group	12
Interim Consolidated Financial Statements	14
Notes to the Interim Consolidated Financial Statements	22
Calendar of Events for 2013 and Contact Details	34

Key Figures GRENKE Group

	Jan. 1, 2012 to	Jan. 1, 2011 to
	Sept. 30, 2012	Change (%)	Sept. 30, 2011	Unit
New business
GRENKE Group including franchise partners and factoring	725,955	18.0	614,990	EURk
– of which Germany	249,767	3.6	241,195	EURk
– of which international*	424,726	21.5	349,710	EURk
– of which franchise international*	51,462	113.7	24,085	EURk
Leasing business	640,743	15.5	554,923	EURk
– of which Germany	192,724	–2.2	197,030	EURk
– of which international*	424,726	21.5	349,710	EURk
– of which franchise international*	23,293	184.7	8,183	EURk
Factoring	85,212	41.9	60,067	EURk
– of which Germany	57,043	29.2	44,165	EURk
– of which franchise international (CH)	28,169	77.1	15,902	EURk
Contribution margin 2 on new business
GRENKE Group including franchise partners and factoring	113,075	29.1	87,575	EURk
– of which Germany	27,219	–0.1	27,255	EURk
– of which international*	80,103	35.8	58,990	EURk
– of which franchise international*	5,753	332.6	1,330	EURk
Leasing business	111,709	29.5	86,241	EURk
– of which Germany	26,417	0.6	26,247	EURk
– of which international*	80,103	35.8	58,990	EURk
– of which franchise international*	5,189	416.8	1,004	EURk
Further information leasing business
Number of new contracts	76,935	12.9	68,169	units
Share of IT products in lease portfolio	86	0.0	86	percent
Share of corporate customers in the lease portfolio	100	0.0	100	percent
Mean acquisition value	8.3	2.5	8.1	EURk
Mean term of contract	47	2.2	46	months
Volume of leased assets	2,483	17.0	2,123	EURm
Number of current contracts	311,723	14.1	273,238	units
GRENKE BANK
Deposits	197,881	32.6	149,275	EURk
Business start-up financing volume	3,997	710.8	493	EURk

* In the third quarter of 2012, we took over our franchise partners in Spain (Madrid/Malaga), Romania and Portugal. Their new business volume is no longer included in the franchise partners volume. The figures were restated for the year as a whole.

GRENKE Group = GRENKE Consolidated Group including franchise partners

GRENKE Consolidated Group = GRENKELEASING AG and all consolidated subsidiaries and special-purpose entities according to IFRS

Key Figures GRENKE Consolidated Group

	Jan. 1, 2012 to	Jan. 1, 2011 to
	Sept. 30, 2012	Change (%)	Sept. 30, 2011	Unit
Key figures income statement
Net interest income	80,966	17.9	68,659	EURk
Settlement of claims and risk provision	32,536	27.9	25,429	EURk
Profit from insurance business	21,992	18.9	18,496	EURk
Profit from new business	25,791	12.1	23,004	EURk
Profit from disposals (income exceeding the calculated residual value)	3,051	29.7	2,353	EURk
Other operating income	2,439	1.1	2,413	EURk
Costs of new contracts	16,309	16.3	14,023	EURk
Costs of current contracts	5,377	10.6	4,863	EURk
Project costs and basic distribution costs	17,722	13.1	15,675	EURk
Management costs	14,139	11.4	12,689	EURk
Other costs	5,090	21.8	4,180	EURk
Operating result	43,066	13.1	38,066	EURk
Other interest income (expense)	653	194.1	–222	EURk
Income/expenses from fair value measurement	108	200.0	36	EURk
EBT (earnings before taxes)	42,521	12.3	37,880	EURk
Net profit	30,238	7.7	28,083	EURk
Earnings per share (according to IFRS)	2.21	7.8	2.05	EUR
Further information
Dividend	0.75	7.1	0.70	EUR
Embedded value, leasing contract portfolio (incl. equity before taxes)	519	16.1	447	EURm
Embedded value, leasing contract portfolio (incl. equity after taxes)	470	15.5	407	EURm
Cost / income ratio	58.0	0.7	57.6	percent
Return on equity (ROE) after taxes	11.9	–2.5	12.2	percent
Average number of employees	656	13.5	578	employees
Staff costs	31,107	15.8	26,871	EURk
– of which total remuneration	25,608	14.7	22,320	EURk
– of which fixed remuneration	19,088	10.2	17,323	EURk
– of which variable remuneration	6,520	30.5	4,997	EURk

GRENKE Group = GRENKE Consolidated Group including franchise partners

GRENKE Consolidated Group = GRENKELEASING AG and all consolidated subsidiaries and special-purpose entities according to IFRS

Letter to Shareholders from the Board of Directors

Dear Shareholders, Ladies and Gentlemen,

The GRENKE Group has been highly successful in the first nine months of the 2012 fiscal year. With a rise in new business of 18 percent, we have again clearly surpassed our long-term goal of growing the new business of the GRENKE Group by at least 10 percent per year. We are also still fully on course for our growth forecast of around 15 percent in 2012. We are currently generating attractive margins in new business that easily covers our business risks. As a result, we are still posting increases in net interest income after the settlement of claims and risk provision despite the difficult overall economic developments in many of the European countries. We are highly confident that this will also remain the case in the future.

All earnings components contributed towards the rise in income in the GRENKE Consolidated Group in the first nine months of 2012. Overall expenses saw a below-average increase which resulted in a rise in net profit of 8 percent to EUR 30.2 million after EUR 28.1 million. Thus, we can reconfirm our forecast of a considerable improvement in net profit in the current fiscal year in the range of EUR 41 to 44 million for the GRENKE Consolidated Group.

We are systematically implementing our growth strategy undeterred. In the quarter under review, we expanded our broad international network through three additional locations: Italy (Florence), Ireland (Fingal), and Poland (Wroclaw), and increased our presence in Germany with a new location in Freiburg. We also fully acquired and consolidated our franchise companies in Spain (Madrid and Malaga), Portugal (Lisbon, Porto and Leiria), and Romania (Bucharest). The opening of further locations is planned for the final quarter of 2012.

We remain excellently equipped in terms of refinancing. In the quarter under review, our refinancing activities were relatively minor after the highly successful placement of bonds in the first half of the year. In October, we issued a further bond with a volume of EUR 125 million and took advantage of the favourable market conditions and our good credit rating, which was recently upgraded. Hence, once again we have impressively proven our lasting successful presence on the market.

Therefore, as one of Europe's leading financial service providers for small and medium-sized enterprises, the GRENKE Group is wellestablished and will continue expanding its market share beyond the successful 2012 fiscal year.

Baden-Baden, October 2012

Wolfgang Grenke Chairman of the Board of Directors

The GRENKELEASING AG Share

The shares of GRENKELEASING AG significantly outperformed their benchmark indices in the first nine months of the 2012 fiscal year. After starting the year at EUR 38.59 on XETRA, the shares initially rose 17 percent to EUR 45.29 as per the end of the first quarter. At the start of the second quarter and in the wake of the escalation of the European debt crisis, the stock markets entered a correction phase that continued until the end of the first half of the year. The shares of GRENKELEASING AG proved to be no exception. As a result, at the end of the first half of the year, the shares were at EUR 43.55, having hit their lowest point of EUR 40.10 on June 4. Thereafter, the shares rallied by more than 28 percent and rose to their highest level for the year to date of EUR 51.45 on August 22. As per the end of the third quarter, they stood at EUR 50.00, which was 30 percent higher than the price at the start of the year. Consequently, GRENKELEASING AG shares had outperformed the SDAX price index – which climbed 8 percent over the same period – by more than 21 percentage points. The shares had also clearly outperformed the Prime Standard's DAXsector Financial Services index which had risen 11 percent.

Interim Management Report

The Group's Growth Strategy

The GRENKE Group stands for long-term, successful growth. It continued to expand its market leadership in its core business throughout all of the recent phases of crisis and recession, having quickly and systematically leveraged the temporary periods of recovery. We continued this dynamic development in the current fiscal year. In the first nine months of the year, the volume of new business – i.e. the sumof the cost of newly acquired leased assets and factoring volumes – increased 18 percent to EUR 726.0million. As in the last two fiscal years, a larger share of our growth was generated once again with international business.

GRENKE Group's corporate philosophy is geared towards creating sustainable added value. Its growth strategy presents the first of two of the central elements of this philosophy. The second is a highly effective risk management system consistently developed over a period of several years. This enables us – together with our IT-based and systematically standardised transaction processing – to manage and leverage the risks and opportunities of our business with a high degree of flexibility and cost efficiency. This is equally true for both refinancing and business with customers. We aim to ensure a broadly diversified portfolio in terms of customers and industries in order to limit our risk.

Through the continuous extension of our product range and solutions in financing services, we additionally stimulate the growth being generated by entering new regional markets and the expansion of our existing market presence. In order to diversify risk, we concentrate on smaller contract volumes which many of our competitors are scarcely able to offer, not least for cost reasons. In addition to purchasing lower-volume receivables (factoring) and car leasing, other components of the product range include various financing, investment, and payment products from GRENKE BANK AG.

GRENKE BANK AG finances business start-ups and grants state-supported funds in collaboration with a growing number of development banks of individual German states and the federal government. GRENKE BANK AG is currently cooperating with KfW Mittelstandsbank, L-Bank in Baden-Württemberg, NRW.Bank in North Rhine-Westphalia, and Thüringer Aufbaubank. This type of cooperation is being met with a strong response as well as interest from other development banks which now also include Investitionsbank Berlin (IBB). Thus, since June 2012, small and medium-sized enterprises and the self-employed professionals in Berlin have also been given access supported funds when they finance new business acquisitions through leasing. GRENKELEASING AG, GRENKE BANK AG and IBB have concluded an agreement to this effect. A total of 4,642 leasing contracts have been concluded thus far in the context of these collaborations.

GRENKE BANK AG's other products include payment accounts in euro or foreign currencies as well as easy-to-understand investment products such as fixed-term deposits and savings bonds for commercial clients. Call money and fixed-term products are also available for retail customers.

The GRENKE Group offers commercial and private customers competitive conditions while continuing to generate attractive margins thanks to its indirect sales channels specialising in online solutions and fully automated contract processing. We do not compromise on our strategic objectives of balance sheet strength and profitability. To ensure that the successful implementation of our value-adding philosophy is also reflected in the GRENKE Group's valuation on the capital market, we aim for a high intrinsic value of GRENKE shares measured in terms of the parameters return on equity (ROE) and embedded value, as well as a stable, investment-grade issuer credit rating.

* Austria, Belgium, Brazil, Czech Republic, Denmark, Finland, Hungary, Ireland, Luxembourg, Norway, Romania, Slovak Republic, Slovenia, Sweden, Turkey

Growth rates of the international Leasing Business as per September 30, 2012

The Economic Environment

The euro crisis has Europe's economic development firmly in its grip: Overall, the common currency zone is currently in a recession. Even the German economy, whose robust performance had been largely propping up developments for the whole of Europe, has been showing clear signs of weakness in recent months. This is reflected in the leading sentiment indicators and by stagnation trends in key areas of industry. However, Germany still has a stable domestic economy which is mainly being driven by the continuing positive trend on the labour market. In contrast, the countries of southern Europe are being hit by downturns, which, in some cases, are even escalating. Here, the development of income is being hampered by public austerity measures and by high unemployment in particular. Overall, domestic demand and industrial production in Europe are suffering as a result. Simultaneously, a pronounced weakness in investments has been observed for over a year.

However, the GRENKE Group's business is dependent upon the overall economic development in its target markets to only a limited extent. This is especially true for our new business that is actively managed. General industry trends, such as the business policies of banks in the leasing sector and rising regulatory requirements in this area, play a much larger role. In the first nine months of 2012, deviations from these sector trends were not seen in any of our regional markets.

The market and central bank interest rates have a limited influence on our refinancing costs. Traditionally, the GRENKE Group has a wide range of refinancing instruments that it uses flexibly according to the market situation and expected interest rate developments. Our good credit rating means that we always have access to funding, whether via programmes with banks, our direct access to the capital markets, or GRENKE BANK AG's actively managed deposit business. The rating agency Standard&Poors reconfirmed our counterparty credit rating in September 2012 with a stable outlook ("BBB+" for long-term and "A-2" for short-term maturities). For senior unsecured debt and short-term debt, our rating was even upgraded from "BBB" to "BBB+" and from "A-3" to "A-2", respectively.

Report on the Results of Operations

Quarterly Comparison 2012 versus 2011

We have enhanced the earnings power of the GRENKELEASING AG Consolidated Group (hereafter to be referred to as the GRENKE Consolidated Group) in the third quarter of the 2012 fiscal year. All earnings components have contributed to this development. The continued strong rise in net interest income of 20 percent to EUR 28.8 million, after EUR 24.0 million in the same quarter of the previous year, is particularly gratifying. This still reflects the high contribution margins of new business in past quarters, as well as the below-average rise in expenses from interest on the refinancing and deposit businesses.

Owing to the difficult overall economic situation in many European countries, there has been a noticeable rise in the settlement of claims and risk provision in the year to date. In the quarter under review, the settlement of claims and risk provision increased 18 percent from EUR 9.4 million to EUR 11.1 million. Overall, however, net interest income after the settlement of claims and risk provision still rose by a very satisfactory 21 percent to EUR 17.7million after EUR 14.6million in the previous year.

Although claims are generally volatile from quarter to quarter, an rising trend has been observed for some time now. This is confirmed by the development of the Euler Hermes Insolvency Index. For the Mediterranean countries, Euler Hermes expects a sharp increase to a new record level of +20 percent in 2012 after +16 percent in the previous year. Other European countries will also not be spared: +7 percent in Northern Europe; +4 percent in France; and +1 percent in Germany, Austria, and Switzerland. In total, this means a weak overall performance of +14 percent for the eurozone after +7 percent in 2011. According to Euler Hermes, the global insolvency index is also facing an unpleasant resurgence. It will rise 4 percent in 2012 after having fallen 4 percent in the previous year.

The focus of our risk management system is not on avoiding risks, but on forecasting them accurately and taking them properly into account in our financing conditions. At 1.8 percent, the loss rate in the third quarter remained furthermore within our long-term target range. That and the rise in net interest income after the settlement of claims and risk provision emphasises the success of our management methods.

The profit from the insurance business improved 22 percent. The profit from new business increased 5 percent. New business is comprised of the sum of the recognition of new lease receivables, revenues from lease down payments, processing fees, and special lease payments less the cost of newly acquired leased assets and commissions paid, and which tends to fluctuate from quarter to quarter. Profit from disposals, which also tends to fluctuate on a quarterly basis, remained virtually unchanged at EUR 0.8 million. Thus, the income from operating business increased 17 percent overall to EUR 34.7million, after EUR 29.6million in the previous year.

In the quarter under review, there was a visible increase in costs resulting from GRENKE Group's on-going expansion and preparations for the further expansion of our international presence. These are targeted investments in our future market position. However, as in the previous quarters, the increase in expenses was disproportional once again. Staff costs, depreciation, amortisation and impairments, and in particular consulting, audit costs, and selling expenses saw an above-average rise whereas the increases in operating and administrative costs were below average. Other operating expenses rose to EUR 1.3 million from EUR 0.3 million. Therefore, the operating result rose 11 percent to EUR 15.4 million after EUR 13.9 million in the previous year. This is a pleasing development when our investments for the future are taken into consideration.

The higher other interest expenses continued to result from our extensive bond issues. In the quarter under review, we took advantage of the current good environment on the refinancing markets and placed several different issues, even though their total volume was significantly lower than in the previous quarter. We were thereby documenting our permanent presence on the capital market, since these bond issues were not necessary in terms of liquidity requirements. As a result, earnings before taxes in the quarter under review increased 11 percent from EUR 13.8 million to EUR 15.3 million. Earnings per share amounted to EUR 0.78 after EUR 0.73.

Nine-month Comparison 2012 versus 2011

The above information on the quarter under review also essentially applies to the first nine months since the development of the first six months largely continued in the third quarter. There were no unusual changes in either the overall business or in the individual items of the income statement.

In the first nine months, net interest income improved 18 percent to EUR 81.0 million after EUR 68.7 million in the previous year. Expenses related to the settlement of claims and risk provision rose from EUR 25.4 million to EUR 32.5 million. Net interest income after the settlement of claims and risk provision rose 12 percent to EUR 48.4million after EUR 43.2 million.

Income from operating business increased by a total of 14 percent to EUR 99.3 million after EUR 87.1 million and included the higher profit from insurance and new business as well as profit from disposals. The operating result climbed 13 percent to EUR 43.1 million after EUR 38.1 million in the previous year. Earnings before taxes were EUR 42.5 million, a 12 percent increase over the previous year's figure of EUR 37.9million. Earnings per share amounted to EUR 2.21 after EUR 2.05.

Report on Segment Development

Business Segments

Due to the increase in internationalisation, the primary reporting of GRENKE Consolidated Group's segments was aligned according to the prevalent organisational structure which is based on its operating activities. Therefore, since the beginning of 2012, the operating segments have been divided into Leasing, Banking, and Factoring in accordance with the management of the company's segments. Since this time, the previous regional split within the Leasing segment has been combined for the quarterly reporting. The previous year's figures were adjusted accordingly. Going forward, a regional spit of the business activities will be provided on a yearly basis as part of the annual report for each fiscal year. Detailed financial information is available for the three operating segments.

Business Development

The Leasing segment is still the most important earnings pillar for the GRENKE Consolidated Group. Consequently, the information in the previous section on the results of operations of the GRENKE Consolidated Group (Report on the Results of Operations) also essentially applies to the Leasing segment.

Here, in the first nine months of 2012, operating segment income grew 13 percent from EUR 83.7 million in the prior year to EUR 94.6 million. The segment result improved 8 percent from EUR 36.3 million to EUR 39.2 million. Our still relatively new activities in the Banking segment and the Factoring segment again enjoyed strong growth in the reporting period. In the Banking segment, the operating segment income rose 44 percent from EUR 2.4 million to EUR 3.5 million. The segment result more than doubled from EUR 1.6 million to EUR 3.7 million. The Factoring segment also developed very favourably. Operating segment income of EUR 1.1 million exceeded the prior year's level of EUR 1.0 million by 20 percent and the segment result rose 55 percent from EUR 0.1 million in the previous year to EUR 0.2 million.

In the nine month period, the new business in GRENKE Group's Leasing segment also saw strong growth of 15 percent and advanced from EUR 554.9 million in the previous year to EUR 640.7 million. The contribution margin (CM) 2 of the new business in GRENKE Group's Leasing segment amounted to EUR 111.7 million in the same period, which corresponds to an increase of 30 percent. Our CM2 margin of 17.4 percent compared to 15.5 percent in the previous year demonstrates that we continued to achieve attractive and risk-adequate CM2 margins. This high contribution margin can be attributed to the continuation of a favourable competitive environment in selected international markets.

In the reporting period, new business in the German market nearly reached the prior year's level as a result of our already very high market penetration in that market. Almost all of our international markets reported high double-digit growth rates. The growth trend in our largest international markets such as France, Italy, and the United Kingdom, is intact. Our new business in the Netherlands also developed favourably in the nine month period and increased 47 percent from EUR 10.0 million to EUR 14.7 million. Overall, international business contributed 65.6 percent of GRENKE Group's new business following 60.8 percent in the prior year.

Our targeted approach of offering financing solutions to small and medium-sized enterprises through our factoring products contributes to our high growth. In the nine month period, the new business volume in GRENKE Group's Factoring segment rose 42 percent from EUR 60.1 million to EUR 85.2 million. In Germany, new business grew 29 percent. Our international factoring business, which we have operated since 2010 through a franchisee in Switzerland, experienced particularly rapid growth once again. As compared to the previous year's period, new business soared 77 percent from EUR 15.9 million to EUR 28.2 million. The profit margin on the factoring volume of EUR 85.2 million amounted to 2.3 percent as in the previous year. This margin is based on an average factoring period of approximately 33 days compared to 37 days in the previous year.

Report on Financial Position and Net Assets

The GRENKE Consolidated Group's on-going expansion resulted in a 14 percent rise in lease receivables to EUR 1,787.6 million after EUR 1,568.8 million as per the end of the 2011 fiscal year. Total assets rose 13 percent from EUR 1,969.0 million to EUR 2,231.7 million. Equity was 7 percent higher at EUR 339.0 million after EUR 317.7 million and was largely the result of income effects.

As per September 30, 2012 and following the dividend distribution in the second quarter, the equity ratio of 17.8 percent based on our financing volume (which is comprised of the sum of current and non-current lease receivables and other financial assets) has returned towards the level of 18.8 percent seen at the end of fiscal year 2011. This level is still significantly above our target level of 16 percent.

In order to finance our lease receivables, we have continued to leverage our broad range of refinancing instruments. In the quarter under review, a financing facility of EUR 5.3 million was installed for our Brazilian franchisee and guaranteed by GRENKELEASING AG. EUR 10 million was issued in commercial paper and three promissory note loans were placed and had a total volume of almost EUR 43 million. No new bonds were issued and a EUR 100 million bond from 2009 was redeemed in August. In the quarter under review, total liabilities from refinancing climbed by EUR 58.2 million to EUR 1,551.4 million as compared to the end of the first half of 2012 and by EUR 183.8 million after EUR 1,367.6 million as per the end of the 2011 fiscal year. Cash and cash equivalents amounted to EUR 92.4 million as per the end of the reporting quarter after EUR 104.2million on December 31, 2011.

Additional funds of EUR 35.7 million were obtained in the first nine months of the 2012 fiscal year through the deposit business of GRENKE BANK AG. Subsequent to the repayment of the bond in August, only instruments with a below-average volume are scheduled for repayment and therefore refinancing for the rest of the year and for 2013.

Cash flow from operating activities amounted to EUR 47.9 million in the first nine months. An increase of EUR 192.7 million in lease receivables was offset by net cash inflows of EUR 240.6 million. After interest paid and received and taxes paid of EUR 12.5 million in total, net cash flow from operating activities amounted to EUR 34.8 million.

In the first nine months, cash flow from investing activities amounted to EUR –36.8 million. This essentially reflects the acquisition of former franchise companies. We had purchased the former franchisees in Spain and Romania effective July 13, 2012 and July 19, 2012 respectively. The franchise company in Portugal was then acquired as per September 14, 2012. All of these companies had specialised in selling small-ticket leases and some with a strong focus on IT equipment. The cash flow from financing activities of EUR –10.9 million was essentially influenced by the dividend distribution (EUR 10.3 million) in the second quarter. Total cash flows amounted to EUR –12.9 million in the first nine months of the year.

Matters Concerning the Board of Directors

The Supervisory Board of GRENKELEASING AG has appointed two new members to the Board of Directors. In order to bolster the company's IT function, which is of particular importance to GRENKE, Ms. Antje Leminsky (41) first joined the company as a Representative of the Board of GRENKELEASING AG on August 1, 2012. She will join the Board of Directors as per August 1, 2013 and take over IT-responsibility from Mr. Grenke.

Mr. Jörg Eicker (47) joined the Board of Directors on September 1, 2012 and assumed responsibility for Treasury, Refinancing, Risk Management, Controlling, Investor Relations, and GRENKE Bank from Dr. Uwe Hack as per October 1, 2012. Dr. Uwe Hack left the Board of Directors as per September 30, 2012 by mutual arrangement to take up a professorship.

On October 17, 2012, the Supervisory Board reappointed Mr. Wolfgang Grenke to the Board of Directors as Chairman of the Board of Directors for a further five year term until November 2017.

Report on the Forecasts and Outlook for the Group

Report on Risks and Opportunities

The following risks and opportunities report relates to both the GRENKE Consolidated Group and its segments. The risks described in the 2011 annual financial report are still relevant and no new risks have arisen. Going forward, we believe that the opportunities for our business development significantly outweigh the usual risks associated with our business model. In particular, demand for lease finance – measured in terms of the number of applications received and the average acquisition cost per lease concluded – remains high. We are even seeing strong growth in several of the international markets. This allows us to increase new business and, at the same time, generate attractive margins while maintaining our proven risk limitation. New locations, branches, and franchise partners are also expected to contribute to continued strong growth in the future.

A possible lack of willingness by the market in general to provide sufficient funds for refinancing does not constitute a material risk to us. The capital markets will provide issuers of good standing with sufficient funds even in difficult market situations. We have successfully covered our refinancing requirements in the first nine months and have easily repaid a bond of EUR 100 million in the quarter under review. The success of our bond issue in October 2012 (volume of EUR 125 million with a four year term) underlines GRENKELEASING's strong market position. Thus, we are and will remain well equipped for our plan of continued high growth. Furthermore, access to banking deposits at GRENKE BANK AG also provides us with a highly attractive source of refinancing that we can utilise flexibly and in line with costs and requirements.

Risks to income development result particularly from increased losses in periods of recession. Losses generally fluctuate to a certain extent during the year. In addition, there is typically a time lag of roughly two years as compared to the underlying transactions, i.e. our new business. The risk of rising interest rates is still an important issue given the extremely high availability of liquidity on the capital markets through the central banks. However, we do not expect this to result in any particular risk to our refinancing.

The GRENKE Consolidated Group is exposed to interest rate risks in connection with the refinancing of its lease receivables to only a limited extent as this refinancing – if subject to a floating rate at all – is hedged using derivatives. Nevertheless, the risks from changes in interest rates and spreads can arise in new business. Therefore, the delay with which we pass on interest rate changes to customers can have a temporary impact on the profitability of the new business.

Expected Business Development

In the first nine months of the 2012 fiscal year, we have increased new business in the GRENKE Group by 18 percent to EUR 726.0 million. Thus, we exceeded our long-term objective of increasing new business by at least 10 percent per year. We remain fully on course for our forecast for 2012 of growth of around 15 percent.

We are excellently equipped to take advantages of opportunities in the final quarter of the year. We have again expanded our already broad international presence in the quarter under review through the acquisition of our franchisees in Portugal, Romania, and Spain. Following our highly successful market activities in the nine month period and in October 2012, we are well equipped in terms of refinancing and can steer business primarily in line with our operating and strategic planning. We will systematically continue on our successful path and will take advantage of the various prospects in the different European countries in a targeted manner. In doing so, we will focus primarily on regional target markets with below-average competitive intensity. This is how we will also secure our earnings growth for the future.

The high growth of recent years with healthy margins, which is now gradually being reflected in the income statement, will stimulate net interest income in the remainder of the year. Overall, the loss rate will increase somewhat since the losses are expected to be higher in the international business. This is already reflected in our CM2 calculation for new business. Therefore, we reiterate our forecast for a visible rise in earnings for the GRENKE Consolidated Group and continue to expect a net profit in the range of EUR 41 – 44 million.

Interim Consolidated Financial Statements

Consolidated Income Statement

	3-month report		9-month report
	July 1, 2012 to	July 1, 2011 to	Jan. 1, 2012 to	Jan. 1, 2011 to
EURk	Sept. 30, 2012	Sept. 30, 2011	Sept. 30, 2012	Sept. 30, 2011
Interest and similar income from financing business	43,342	37,051	124,690	106,748
Expenses from interest on refinancing and deposit business	14,571	13,037	43,724	38,089
Net interest income	28,771	24,014	80,966	68,659
Settlement of claims and risk provision	11,068	9,384	32,536	25,429
Net interest income after settlement of claims and risk provision	17,703	14,630	48,430	43,230
Profit from insurance business	8,068	6,617	21,992	18,496
Profit from new business	8,098	7,684	25,791	23,004
Profit from disposals	849	700	3,051	2,353
Income from operating business	34,718	29,631	99,264	87,083
Staff costs	10,892	9,054	31,107	26,871
Depreciation and impairment	848	669	2,266	1,997
Selling and administrative expenses (not including staff costs)	7,006	5,991	21,276	19,212
Other operating expenses	1,317	315	3,988	3,350
Other operating income	713	295	2,439	2,413
Operating result	15,368	13,897	43,066	38,066
Expenses / income from fair value measurement	85	–38	108	36
Other interest income	79	130	273	325
Other interest expenses	237	181	926	547
Earnings before taxes	15,295	13,808	42,521	37,880
Income taxes	4,656	3,775	12,283	9,797
Net profit	10,639	10,033	30,238	28,083
Earnings per share (basic) in EUR	0.78	0.73	2.21	2.05
Earnings per share (diluted) in EUR	0.78	0.73	2.21	2.05
Average shares outstanding (basic)	13,684,099	13,684,099	13,684,099	13,684,099
Average shares outstanding (diluted)	13,684,099	13,684,099	13,684,099	13,684,099

Consolidated Statement of Comprehensive Income

	3-month report		9-month report
EURk	July 1, 2012 to Sept. 30, 2012	July 1, 2011 to Sept. 30, 2011	Jan. 1, 2012 to Sept. 30, 2012	Jan. 1, 2011 to Sept. 30, 2011
Net profit	10,639	10,033	30,238	28,083
Appropriation to / reduction of hedging reserve (before taxes)	–68	115	–397	904
Income taxes	3	–11	43	–76
Appropriation to / reduction of hedging reserve (after taxes)	–65	104	–354	828
Appropriation to / reduction of reserve for actuarial gains and losses (before taxes)	0	–30	–83	50
Income taxes	0	7	19	–12
Appropriation to / reduction of reserve for actuarial gains and losses (after taxes)	0	–23	–64	38
Change in currency translation differences	565	–1,153	1,755	–731
Other comprehensive income	500	–1,072	1,337	135
Total comprehensive income	11,139	8,961	31,575	28,218

Consolidated Statement of Financial Position

EURk	Sept. 30, 2012	Dec. 31, 2011
Assets
Current assets
Cash and cash equivalents	92,383	104,234
Financial instruments that are assets (short-term portion)	2,715	1,883
Lease receivables	659,671	568,799
Other current financial assets	86,533	89,976
Trade receivables	3,128	4,560
Lease assets for sale	7,007	8,115
Tax assets	3,012	1,298
Other current assets	103,116	83,817
Total current assets	957,565	862,682
Non-current assets
Lease receivables	1,127,953	999,955
Financial instruments that are assets (long-term portion)	1,346	2,516
Other non-current financial assets	31,177	34,576
Property, plant, and equipment	35,064	35,653
Goodwill	46,873	13,441
Other intangible assets	12,563	2,176
Deferred tax assets	18,377	17,280
Other non-current assets	783	689
Total non-current assets	1,274,136	1,106,286
Total assets	2,231,701	1,968,968

Consolidated Statement of Financial Position

EURk	Sept. 30, 2012	Dec. 31, 2011
Liabilities and equity
Liabilities
Current liabilities
Refinancing liabilities	521,160	438,624
Liabilities from deposit business	108,013	93,897
Current bank liabilities	2,444	1,073
Liability financial instruments (short-term portion)	6,757	3,547
Trade payables	9,219	7,031
Tax liabilities	3,386	1,847
Deferred liabilities	5,329	4,309
Current provisions	1,920	2,807
Other current liabilities	18,429	4,686
Deferred lease payments	63,453	69,241
Total current liabilities	740,110	627,062
Non-current liabilities
Refinancing liabilities	1,030,275	929,008
Liabilities from deposit business	82,860	61,230
Non-current bank liabilities	1,719	2,406
Liability financial instruments (long-term portion)	3,475	3,481
Deferred tax liabilities	32,065	26,078
Pensions	1,811	1,590
Non-current provisions	399	328
Other non-current liabilities	18	128
Total non-current liabilities	1,152,622	1,024,249
Equity
Share capital	17,491	17,491
Capital reserves	60,166	60,166
Retained earnings	186,063	148,917
Other components of equity	2,723	1,386
Unappropriated surplus	72,526	89,697
Total equity	338,969	317,657
Total liabilities and equity	2,231,701	1,968,968

Consolidated Statement of Cash Flows

		Jan. 1, 2012 to	Jan. 1, 2011 to
	EURk	Sept. 30, 2012	Sept. 30, 2011
	Earnings before taxes	42,521	37,880
	Non-cash items contained in net profit and reconciliation to cash flow from
	operating activities
+	Depreciation and impairment	2,266	1,997
– / +	Profit / loss from the disposal of property, plant, and equipment and intangible assets	66	–25
– / +	Income / expenses from non-current financial assets	653	222
– / +	Non-cash changes in equity	819	738
+ / –	Increase / decrease in deferred liabilities, provisions and pensions	292	–529
–	Additions to lease receivables	–654,289	–573,732
+	Payments by lessees	501,917	428,340
+	Disposals / reclassifications of lease receivables at residual carrying amounts	94,732	86,781
–	Interest and similar income from financing business	–124,690	–106,748
– / +	Decrease / increase in other receivables from lessees	–3,136	745
+ / –	Currency translation differences	–7,195	1,799
=	Change in lease receivables	–192,661	–162,815
+	Addition to liabilities from refinancing	1,014,251	935,051
–	Payment of annuities to refinancers	–209,666	–193,106
–	Disposal of liabilities from refinancing	–666,770	–623,387
+	Expenses from interest on refinancing and on deposit business	43,724	38,089
+ / –	Currency translation differences	2,264	481
=	Change in refinancing liabilities	183,803	157,128
+ / –	Increase / decrease in liabilities from deposit business	35,746	27,068
– / +	Increase / decrease in loans to franchisees	–1,577	10,255
	Changes in other assets / liabilities
– / +	Increase / decrease in other assets	–23,594	–36,255
+ / –	Increase / decrease in deferred lease payments	–6,068	–1,020
+ / –	Increase / decrease in other liabilities	5,637	–2,298
=	Cash flow from operating activities	47,903	32,346

continued on next page

Consolidated Statement of Cash Flows: Continued

		Jan. 1, 2012 to	Jan. 1, 2011 to
	EURk	Sept. 30, 2012	Sept. 30, 2011
– / +	Taxes paid / received	–12,475	–25,598
–	Interest paid	–926	–547
+	Interest received	273	325
=	Net cash flow from operating activities	34,775	6,526
–	Purchase of property, plant, and equipment and intangible assets	–5,516	–1,571
– / +	Payments / proceeds from acquisition of subsidiaries	–31,358	–2,343
+	Proceeds from the sale of operating and office equipment and intangible assets	80	108
=	Cash flow from investing activities	–36,794	–3,806
+ / –	Borrowing / repayment of bank liabilities	–667	–674
–	Dividend payments	–10,263	–9,579
=	Cash flow from financing activities	–10,930	–10,253
	Cash funds at beginning of period
	Cash in hand and bank balances	104,234	78,297
–	Bank liabilities from overdrafts	–482	–113
=	Cash and cash equivalents at beginning of period	–103,752	78,184
+ / –	Change due to currency translation	–253	60
=	Cash funds after currency translation	103,499	78,244
	Cash funds at end of period
	Cash in hand and bank balances	92,383	70,748
–	Bank liabilities from overdrafts	–1,833	–37
=	Cash and cash equivalents at end of period	90,550	70,711
	Change in cash and cash equivalents during the period (= total cash flow)	–12,949	–7,533
	Net cash flow from operating activities	34,775	6,526
+	Cash flow from investing activities	–36,794	–3,806
+	Cash flow from financing activities	–10,930	–10,253
=	Total cash flow	–12,949	–7,533

Consolidated Statement of Changes in Equity

			Retained
			earnings and		Reserve
	Share	Capital	unappropriated	Hedging	for actuarial	Currency	Total
EURk	capital	reserves	surplus	reserve	gains / losses	translation	equity
Equity as per
Jan. 1, 2012	17,491	60,166	238,613	–248	–105	1,740	317,657
Comprehensive income			30,238	–354	–64	1,755	31,575
Dividend payment in
2012 for 2011			–10,263				–10,263
Equity as per
Sept. 30, 2012			258,588	–602	–169	3,495	338,969
Equity as per
Jan. 1, 2011	17,491	60,166	208,941	–1,005	–172	2,352	287,773
Comprehensive income			28,083	828	38	–731	28,218
Dividend payment in
2011 for 2010			–9,579				–9,579
Equity as per
Sept. 30, 2011	17,491	60,166	227,445	–177	–134	1,621	306,412

EURk	Leasing segment		Banking segment		Factoring segment		Total segments		Consolidation effects		Consolidated Group
January to September	2012	2011	2012	2011	2012	2011	2012	2011	2012	2011	2012	2011
Operating segment income	94,604	83,682	3,518	2,449	1,142	952	99,264	87,083	0	0	99,264	87,083
Segment result	39,180	36,326	3,686	1,611	200	129	43,066	38,066	0	0	43,066	38,066
Reconciliation to consoli dated financial statements
Operating result											43,066	38,066
Other financial income											–545	–186
Taxes											12,283	9,797
Net profit according to con solidated income statement											30,238	28,083
As per September 30
Segment assets	2,146,188	1,796,102	309,199	212,123	11,162	10,249	2,466,549	2,018,474	–256,237	–185,630	2,210,312	1,832,844
Reconciliation to consoli
dated financial statements
Tax assets											21,389	18,040
Total assets according to consolidated statement of
financial position											2,231,701	1,850,884

Consolidated Segment Report

Business Segments

Due to the increase in internationalisation, the primary reporting of GRENKE Consolidated Group's segments was aligned according to the dominant organisational structure which is based on its operating activities. Therefore, the operating segments are divided into Leasing, Banking, and Factoring in accordance with the management of the company's segments. The previous year's regional split within the Leasing segment is combined for the quarterly reporting as of January 1, 2012. The previous year's figures were adjusted accordingly. Going forward, a regional spit of the business activities will be provided on a yearly basis as part of the annual report for each fiscal year. Detailed financial information is available for the operating segments.

Reportable Segments

The Leasing segment comprises all of the activities that are related to the Consolidated Group's leasing business. The service offer encompasses the provision of financing to commercial lessees, rental, insurance, service, and maintenance offerings, as well as the utilisation of used equipment.

The Banking segment comprises the activities of GRENKE BANK AG, which regards itself as a financing partner particularly to smalland medium-sized companies. Additionally, GRENKE BANK AG cooperates with development banks in providing financing to this clientele in the context of business start-ups. Furthermore, fixed-term deposits are offered to investors via its internet presence. The bank's business is focused primarily on German customers.

The Factoring segment contains the activities of GRENKEFACTORING GmbH, which performs traditional factoring services and which is focused on small-ticket factoring in Germany.

Notes to the Interim Consolidated Financial Statements

Accounting Policies

The interim consolidated financial statements of GRENKELEASING AG (hereafter also referred to as "GRENKE Consolidated Group") as per September 30, 2012 meet the requirements of the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and adopted by the EU, as did the consolidated financial statements as per December 31, 2011. The provisions on interim reporting set out in IAS 34 were applied accordingly. All interim financial statements of the companies included in the consolidated financial statements of the GRENKE Consolidated Group have been prepared using uniform accounting policies.

As interim reporting is based on the consolidated financial statements, detailed information on accounting and consolidation policies can be found in the notes to the consolidated financial statements for the year ended December 31, 2011. The accounting policies used are the same as those used in the previous year with the exception of the new standards that have become mandatory, which are presented briefly below.

Mandatory New Accounting Standards

The first-time application of the amendment to IAS 12 "Income Taxes" – Deferred Taxes: Recovery of Underlying Assets published in December 2010 by the IASB (January 1, 2012), and the amended pronouncements of IFRS 1 "First-time Adoption of International Financial Reporting Standards" – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (July 1, 2011) had no impact on the accounting policies in the consolidated financial statements. The EU endorsement for both amendments is still pending. The amendments to IFRS 7 "Financial Instruments: Disclosures" – Disclosures regarding the Transfer of Financial Assets, published on October 7, 2010 by the IASB (July 1, 2011), will bring about additions to the disclosure requirements for the transfers of financial assets in the consolidated financial statements as per December 31, 2012.

Use of Assumptions and Estimates

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

• Measurement of allowances for non-performing lease receivables for contracts terminated or in arrears on the basis of the recoverability rate
• Use of estimated residual values at the end of the lease term to determine 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 valuation allowances. The amounts of bad debt allowances are determined using percentages and processing categories. Percentages are calculated using statistical methods. They are reviewed once a year for validity. Processing statuses are grouped together in processing categories which are 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 instalment 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 / Debt-collecting agency commissioned
6	Statement in lieu of oath (applied for or issued) and insolvency proceedings instituted but not completed
7	Derecognised
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 from 5 percent to 100 percent. Estimated residual values are used to determine the present value of lease receivables. Non-guaranteed residual values are used to calculate lease receivables in accordance with the definition in IAS 17. Estimated residual values comprise anticipated sales proceeds and any revenues generated in a renewal period. They are determined on the basis of past experience and statistical methods.

Based on experience and dependent upon the term of the lease, residual values of additions up to and including 2006 ranged between 11 percent and 15 percent of the historical cost. In fiscal year 2007, due to the strengthening of forecasting capabilities for the statistical population, this allocation could be further broken down into more detailed maturity groups. For additions from 2007 to 2008, the residual values range between 7.7 percent and 28.4 percent of historical cost depending upon the duration of the lease. Residual values of between 6.5 percent and 28.4 percent were applied for additions from 2009 onwards. For additions after April 1, 2011, residual values of between 6.5 percent and 23.5 percent were applied and remain applicable.

Proceeds are a best estimate and based on statistical analyses. If the post-transaction recoverable amount (from sale and subsequent lease) is lower than expected, the lease receivables are written down. However, any increase in the recoverable amount is not recognised.

Lease assets for sale are measured on the basis of the average sales proceeds per age group realised in the past fiscal year in relation to the original cost. Lease assets for sale are measured at historical residual values, taking their actual saleability into account. As per the end of the reporting period, the residual values used had amounted to between 3.2 percent and 16.4 percent of the historical cost (previous year: between 3.1 percent and 18.6 percent). If a sale is considered unlikely due to the condition of the asset, the asset is written off and expensed.

Lease Receivables

EURk	Sept. 30, 2012	Sept. 30, 2011
Changes in performing lease receivables
Balance at beginning of period	1,484,934	1,241,374
+ Change during the period	206,351	165,563
Lease receivables (current and non-current) from current contracts at end of period	1,691,285	1,406,937
Changes in non-performing lease receivables
Gross receivables at beginning of period	168,393	170,346
– Accumulated valuation allowances at beginning of period	–84,573	–83,496
= Non-performing lease receivables at beginning of period	83,820	86,850
+ Additions to gross receivables during the period	42,937	24,707
– Disposals of gross receivables during the period	23,593	23,205
+ Disposal of accumulated valuation allowances during the period	14,154	13,852
– Addition of accumulated valuation allowances during the period	20,979	15,704
Non-performing lease receivables at end of period	96,339	86,500
Lease receivables (carrying amounts of current and non-current receivables)
at beginning of period	1,568,754	1,328,224
Lease receivables (carrying amounts of current and non-current receivables)
at end of period	1,787,624	1,493,437

Goodwill

In the past quarter, the goodwill in the consolidated financial statements was tested for impairment in accordance with IAS 36 on the basis of the half-year 2012 results (a so-called "impairment test").

The recoverable amount of the respective cash-generating units was determined based on a value-in-use calculation using cash flow projections derived from the five-year financial budgets approved by the Company's management. Fair value less start-up costs is currently not available. The basic assumptions which are used in calculating recoverable cash flows in the respective units are based on growth rates in new business of up to 33 percent in individual units and discount factors between 4.72 percent and 11.2 percent specific to the respective country, capital structure, and currency. Discount factors are calculated based on the capital asset pricing model (CAPM) whereby a risk-free interest rate of 2.2 percent and a beta factor of 0.73 for the Leasing segment as well as for the Banking and Factoring segment were assumed. No growth rate was assumed for cash flows after a period of five years.

In the Leasing segment, the cash-generating units, which are used as a basis for testing goodwill impairment, correspond to the business activities in the respective countries (regions) and therefore largely the respective legal entities. The key parameters for determining the entity's value are the future expectations with regard to the development of new business and profitability.

As per the reporting date, goodwill comprises an amount of CZK 33,914k (EUR 1,349k) for the Czech Republic region, an amount of EUR 504k for the Italy region, an amount of GBP 1,695k (EUR 2,124k) for the region of Great Britain, an amount of PLN 17,888k (EUR 4,359k) for the Poland region, and an amount of HUF 289,899k (EUR 1,018k) for the region of Hungary. As per the reporting date, goodwill of EUR 1,581k and EUR 2,698k were reported for GRENKE BANK AG and GRENKE FACTORING GmbH, respectively. Goodwill of EUR 379k is attributable to GRENKE SERVICE AG. The preliminary goodwill of GRENKE Rent S.A., Madrid, S.C. GRENKE Renting S.R.L., Bucharest, and GRENKE RENTING S.A., Lisbon, which were acquired in the current fiscal year,

amounted to a total of EUR 32,861k. An impairment test was waived due to the preliminary nature of the purchase price allocation. The allocation of the newly acquired goodwill among the cash-generating units was carried out according to the region in which the newly acquired businesses are active, i.e. the region of Spain, Romania, and Portugal.

No impairment was identified in any of these cases.

Financial Liabilities

The GRENKELEASING AG Consolidated Group's financial liabilities comprise liabilities from the refinancing of the leasing business, bank liabilities, and liabilities from deposit business.

Sept. 30, 2012	Dec. 31, 2011
521,160	438,624
157,445	95,269
306,064	301,393
8,523	164
49,128	41,798
108,013	93,897
2,444	1,073
1,833	482
631,617	533,594
Sept. 30, 2012	Dec. 31, 2011
1,030,274	929,008
220,158	254,768
745,928	606,955
28,313	23,384
35,876	43,901
82,860	61,230
1,719	2,406
1,114,854	992,644
1,746,471	1,526,238

ABS Bond

On February 4, 2010, an ABS bond amounting to EUR 160,000k was placed via the special-purpose entity GOALS FINANCING 2009 LIMITED (GOALS 2009-1). The contracts with GOALS FINANCING 2009 LIMITED allow the GRENKE Consolidated Group to sell further lease agreements on a revolving basis for a total of three years and up to a maximum volume of EUR 300,000k. The interest rate is variable at three-month EURIBOR plus a spread ranging between 1.25 percent and 3.5 percent depending on the tranche. Three tranches of bonds with different ratings (risk classes) were issued by the SPE. The size of the highest rated tranche is a reflection of the quality of the leasing portfolio and the internal risk management and directly impacts the costs of this type of financing. Of this bond, 76.5 percent (EUR 122,400k) was given the highest rating by Standard & Poor's (AAA) and FITCH (AAA). The wholly-owned subsidiary of GRENKELEASING AG, GRENKE FINANCE Plc., Dublin/Ireland, subscribed on a pro rata basis to the second tranche and fully subscribed to the last tranche (nominal amount: EUR 24,200k) of the ABS bond. As a result, the GRENKE Consolidated Group received a cash inflow of only EUR 135,800k. The carrying amount of the total liability was EUR 136,028k as per the end of the reporting period.

ABCP Programmes

The GRENKELEASING AG Consolidated Group has several asset-backed commercial paper programmes (ABCPs) with a total volume of EUR 400,000k as per the end of the reporting period. An overview of the programmes as per the end of the reporting period is as follows:

		Lease receivables eligible	Programme volume in EURk	Programme volume in EURk
ABCP programme / SPE	Initiating bank	for refinancing	as per Sept. 30, 2012	as per Dec. 31, 2011
		German and Austrian
Compass Variety Funding Limited	Portigon	lease receivables	40,000	40,000
		German and French
Kebnekaise Funding Limited	SEB AB	lease receivables	110,000	110,000
CORAL PURCHASING Limited	DZ Bank	German lease receivables	150,000	150,000
Elektra Purchase No. 25 Limited	UniCredit	French lease receivables	100,000	100,000
Total			400,000	400,000

The ABCP programmes grant GRENKE FINANCE Plc. and Grenke Investitionen Verwaltungs KGaA the right to refinance or to sell receivables to the respective programmes for a certain period of time. The cap on the purchase volume is determined by the volume of the programme, which is normally backed by the organising bank in the form of a liquidity commitment in the corresponding amount. As per the reporting date, a total volume of EUR 241,575k at book value was utilised.

The ABCP programme Compass Variety Funding Limited with Portigon AG (formerly WestLB) was fixed at EUR 40,000k and extended on January 19, 2012 by an additional two years until January 19, 2014. The programme commitment for the Kebnekaise Funding Limited ABCP programme will run until November 30, 2012 and the programme commitment for the CORAL Purchasing Limited ABCP programme will run until September 3, 2013, while the programme commitment for the Elektra Purchase No. 25 Limited ABCP programme will run until July 30, 2013.

To reflect the current legal conditions in France in the securitisation of French lease receivables (separate French securitisation act), a French securitisation vehicle (FCT = fonds commun de titrisation à compartiments / French issuer) was founded in 2009. The FCT initially consisted of just one so-called compartment ("FCT GK 1"). A second compartment was founded on January 18, 2011 ("FCT GK 2"). Within the FCT, the individual compartments are kept strictly separate from each other ("ring-fenced"). At a later date, it will be possible for the GRENKE Consolidated Group to form further compartments within the FCT to finance further or other ABCP transactions.

"FCT GK 2" is refinanced through the issue of FCT notes which are exclusively subscribed to by SPE Elektra Purchase No. 25 Limited. Therefore, the "FCT GK 2" compartment serves the sole purpose of the securitisation of French lease receivables within the ABCP programme through Elektra Purchase No. 25 Limited. As per the reporting date, 59.31 percent of the refinancing framework of the ABCP programmes was utilised. The corresponding amount of receivables was thus assigned by way of collateral.

Sales of Receivables Agreements

Such agreements are currently in place with Stadtsparkasse Baden-Baden Gaggenau, Sparkasse Karlsruhe, Commerzbank AG, UBS AG in Switzerland, the Commerzbank subsidiary BRE-Bank SA in Poland, and Norddeutsche Landesbank for receivables in the UK. One new addition was the agreement with DZ Bank Polska in Poland in February 2012. The agreements with Commerzbank AG were terminated in 2009, and since this time, no new refinancing has been performed. However, the portfolios contracted until that time will be repaid as scheduled. The agreement with BRE-Bank SA in Poland, which was also terminated in mid-2009, was replaced by a new agreement in February 2012 and modified once again in September 2012.

Bonds, Debentures, and Private Placements

On January 24, 2012, a new fixed-rate bond was issued with a volume of EUR 100,000k and a term of 3.5 years until July 24, 2015. The bond has an interest coupon of 4.25 percent and a discount of EUR 375k.

On May 30, 2012, a new fixed-rate bond was issued with a volume of EUR 100,000k and a term of 3 years and 10 months maturing on March 30, 2016. The bond has an interest coupon of 3.75 percent and a discount of EUR 500k.

On June 14, 2012, a new fixed-interest promissory note loan was issued with a volume of EUR 10,000k and a term of 3 years until June 14, 2015. The interest coupon amounts to 3.25 percent.

On July 25, 2012, a new fixed-interest promissory note loan was issued with a volume of EUR 10,000k and a term of 3 years until July 25, 2015. The interest coupon amounts to 2.99 percent.

On August 13, 2012, a new fixed-interest promissory note loan was issued with a volume of EUR 10,000k and a term of 1.5 years until February 13, 2014. The interest coupon amounts to 2.46 percent.

On August 17, 2012, a new floating-rate promissory note loan was issued with a volume of EUR 2,000k and a term of 3 years until August 17, 2015. The interest rate relates to the 6-month Euribor plus a margin of 2.2 percent. At the same day, a fixed-interest promissory note loan was issued with a volume of EUR 20,750k and a term of 3 years until August 17, 2015. The interest coupon amounts to 2.86 percent.

Development Loans

NRW.Bank

On February 18, 2010, GRENKELEASING AG and GRENKE BANK AG entered into a cooperation agreement with NRW.Bank, the development bank of the state of North Rhine-Westphalia. This had opened up a new opportunity for incorporating development funding into lease financing. The refinancing of lease agreements takes place through the purchase of receivables by GRENKE BANK AG. These lease agreements are available exclusively for investment plans of commercial enterprises and members of self-employed professions with annual sales of up to EUR 500,000k located in North Rhine-Westphalia.

GRENKE BANK AG was granted a global loan of EUR 15,000k by NRW.Bank for this purpose. The loan was drawn on for the first time in the amount of EUR 7,500k on March 22, 2010. The interest rate related to the six-month Euribor plus a margin of 0.21 percent and a term of three years. The second draw-down of a further EUR 7,500k on November 25, 2010, also had a reference interest rate of the six-month Euribor and a bullet maturity of three years. Its margin was 0.19 percent. Hence, the first global loan is fully utilised up to the planned volume of EUR 15,000k.

On July 28, 2011, GRENKELEASING AG and GRENKE BANK AG together with NRW.Bank, the development bank of the state of North Rhine-Westphalia, continued and expanded the cooperation, concluded on February 18, 2010, by agreeing to another global loan totalling EUR 15,000k. This second loan was first drawn down on August 29, 2011 in the amount of EUR 7,500k with a bullet maturity of three years. The interest rate relates to the six-month Euribor plus a margin of 0.07 percent.

The second draw-down of EUR 7,500k took place on August 3, 2012 with a term of 4 years. The loan will be redeemed by semi-annual instalments. Hence, the second global loan is fully utilised up to the planned volume of EUR 15,000k. The interest rate over the total term amounts to 0.82 percent.

Thüringer Aufbaubank

On January 16, 2012, GRENKELEASING AG and GRENKE BANK AG entered into a cooperation agreement with Thüringer Aufbaubank (TAB), the development bank of the state of Thuringia. The refinancing of lease agreements takes place through the purchase of receivables by GRENKE BANK AG. These lease agreements are available exclusively for investments made by small and medium-sized enterprises and self-employed professionals located in Thuringia with annual sales of up to EUR 500,000k.

GRENKE BANK AG was granted a global loan of EUR 5,000k by TAB for this purpose. The loan was drawn on for the first time in the amount of EUR 2,500k on August 3, 2012 with a term of 4 years. The loan is redeemed retroactively on a yearly basis at fixed instalments. The interest rate over the total term amounts to 1.385 percent.

Investitionsbank Berlin

On June 6, 2012, GRENKELEASING AG and GRENKE BANK AG also entered into a cooperation agreement with Investitionsbank Berlin (IBB), the development bank of Berlin. The refinancing of lease agreements takes place through the purchase of receivables by GRENKE BANK AG. These lease agreements are available exclusively for investments made by small and medium-sized enterprises and self-employed professionals located in Berlin with annual sales of up to EUR 500,000k.

GRENKE BANK AG was granted a global loan of EUR 5,000k by IBB for this purpose. As per the time this report was prepared, this loan had not yet been drawn down. A specific interest rate will not be determined until the amount of the first borrowing limit has been drawn down. As an indication, 50 basis points will be added to the basic interest rate for both the fixed interest rate and the floating interest rate.

Revolving Credit Facility

In the context of revolving credit facilities with a total volume of EUR 135,000k available to GRENKE FINANCE Plc., Dublin/Ireland, the GRENKE Consolidated Group has the possibility to take on short-term funds with a minimum amount of EUR 5,000k and a term of usually one month at any time.

The maturities and the respectively agreed draw down amounts of the facilities with SEB and with Portigon (formerly WestLB) will be in place until March 2013 (EUR 30,000k) and February 2013 (EUR 30,000k), respectively. The facilities arranged with Deutsche Bank will run until September 2013 (EUR 30,000k), those with DZ Bank will run until October 2013 (EUR 30,000), and those with HSBC Germany until June 2013 (EUR 15,000k). As per September 30, 2012, this revolving credit facility had been utilised in the amount of EUR 55,000k (September 30, 2011: EUR 50,000k). Utilisation is reported under current liabilities from the refinancing of leasing business.

Money Market Facility

A non-committed money market facility of EUR 25,000k is in place with Bayerische Landesbank. As per September 30, 2012, this credit line had been utilised in the amount of EUR 25,000k (previous year: EUR 25,000k). A further money market facility of EUR 15,000k was agreed to with Norddeutsche Landesbank on August 25, 2011. This line had been utilised in the amount of EUR 15,000k as per September 30, 2012 (September 30, 2011: EUR 15,000k).

On November 17, 2011, GRENKE FINANCE Plc., and GRENKELEASING AG had agreed on a further money market line with a volume of EUR 10,000k with Commerzbank AG. As per September 30, 2012, this line had not been utilised.

Commercial Paper

On October 27, 2011, a general agreement was signed for a commercial paper programme. This agreement has given the GRENKE Consolidated Group the possibility to issue commercial papers of up to a total volume of EUR 250,000k with a term of between 1 and 364 days. Utilisation of the commercial paper programme amounted to EUR 55,000k as per September 30, 2012.

Income Taxes

The main components of income tax expense in the consolidated income statement are:

EURk	Jan. 1 – Sept. 30, 2012 Jan. 1 – Sept. 30, 2011
Income taxes
Current tax expense	12,339	13,876
Deferred taxes	–56	–4,079
Income tax expense	12,283	9,797

Obligations to acquire property, plant, and equipment

As per September 30, 2012, there were obligations of EUR 2,010k for the extension of an office building.

Acquisitions

Acquisitions in Fiscal Year 2011

The purchase price allocation for the acquisition of GRENKELEASING Magyarország Kft., Budapest/Hungary, which was acquired in the previous year, was finalised in the second quarter of 2012. There were no adjustments to the preliminary fair value of the identifiable assets and liabilities. For further information regarding mergers prior to fiscal year 2012, please refer to the notes to the Company's consolidated financial statements for the year ended December 31, 2011.

Acquisitions in Fiscal Year 2012

S.C. Grenke Renting S.R.L., Bucharest/Romania

By way of a purchase agreement dated May 17, 2012, GRENKELEASING AG acquired 100 percent of the voting shares in S.C. GRENKELEASING S.R.L., Bucharest/Romania. With this acquisition, a name change to S.C. Grenke Renting S.R.L. was resolved. Due to certain conditions in the purchase agreement, control over the acquired company was assumed on July 19, 2012.

Prior to this, S.C. GRENKELEASING S.R.L., Bucharest/Romania, was active within GRENKELEASING AG's franchise system specialising in the sale of small-ticket leases with a strong focus on IT equipment. Since all of the relevant information for determining the fair value of the identifiable assets and liabilities is not yet available, the fair value of the assets and liabilities are preliminary and may be subject to adjustments as a result of additional information gained in the acquisition process.

The following information relates to the preliminary fair value of the significant categories of the identifiable assets and liabilities of the company at the date of acquisition: Intangible assets EUR 516k, lease receivables EUR 9,123k, other assets EUR 376k, refinancing liabilities EUR 6,253k, and other liabilities EUR 1,036k. Intangible assets are largely attributable to non-contractual relationships of resellers with clients and non-competitive clauses. Of the lease receivables, an amount of EUR 237k is impaired and is not expected to be recovered.

The refinancing liabilities are owed to GRENKE FINANCE Plc., Dublin/Ireland. These loans were eliminated as a result of the consolidation and are therefore not reported in the consolidated balance sheet. The preliminary purchase price allocation resulted in goodwill of EUR 1,827k which is not tax deductible. The goodwill includes intangible assets such as employees and unexpected synergy effects which could not be separately identified. Since the date of acquisition, goodwill has increased EUR 16k due to currency translation effects. The company's contribution to consolidated net income, including the effects from purchase price allocation, has been negligible due to the short period of time that the company has been part of the GRENKE Consolidated Group. The total consideration paid for the business combination amounted to EUR 4,553k and consisted solely of cash. Cash acquired with the subsidiary amounted to EUR 37k.

GRENKE RENT S.A., Madrid/Spain

By way of a purchase agreement dated July 13, 2012, GRENKE Group acquired 100 percent of the voting shares in GRENKE RENT S.A., Madrid/Spain through its Group company GRENKE ALQUILER S.A., Barcelona/Spain. Control was also assumed on July 13, 2012.

Prior to the acquisition, GRENKE RENT S.A. was active within GRENKELEASING AG's franchise system specialising in the sale of small-ticket leases in its branches in Madrid and Málaga. All of the relevant information for determining the final purchase price allocation was also not yet available for this business combination and therefore the fair value of the assets and liabilities are preliminary and may be subject to adjustments as a result of additional information gained in the acquisition process.

The following information relates to the preliminary fair value of the significant categories of the identifiable assets and liabilities of the company at the date of acquisition: Intangible assets EUR 3,668k, lease receivables EUR 5,177k, other assets EUR 971k, refinancing liabilities EUR 4,103k, deferred tax liabilities EUR 1,287k, other liabilities EUR 2,226k, and other remaining liabilities EUR 309k. Intangible assets are largely attributable to non-contractual relationships of resellers with clients, non-competitive clauses and other contractual rights. Of the lease receivables, an amount of EUR 1,523k is impaired and is not expected to be recovered. Deferred tax assets of EUR 337k have been recognised as a result of utilisable tax-loss carryforwards. The refinancing liabilities are owed to GRENKE FINANCE Plc., Dublin, Ireland. These loans were eliminated as a result of the consolidation and are therefore not reported in the consolidated balance sheet. The preliminary purchase price allocation resulted in goodwill of EUR 3,273k which is not tax deductible. The goodwill includes intangible assets such as employees and unexpected synergy effects which could not be separately identified. The company's contribution to consolidated net income, including the effects from purchase price allocation, has been negligible due to the short period of time that the company has been part of the GRENKE Consolidated Group. The total consideration paid for the business combination amounted to EUR 5,280k and consisted solely of cash. Cash acquired with the subsidiary amounted to EUR 117k.

Grenke Renting S.A., Lisbon/Portugal

On September 14, 2012, which is both the date of the purchase agreement and the date of acquisition, GRENKELEASING AG acquired 100 percent of the voting shares in Grenke Renting S.A., Lisbon/Portugal.

Prior to the acquisition, S.C. Grenke Renting S.A., Lisbon/Portugal was active within GRENKELEASING AG's franchise system specialising in the sale of small-ticket leases with a strong focus on IT equipment. Due to incomplete information on the purchase price allocation, the fair value of the assets and liabilities are preliminary and may be subject to adjustments as a result of additional information gained in the acquisition process.

The following information relates to the preliminary fair value of the significant categories of the identifiable assets and liabilities of the company at the date of acquisition: Intangible assets EUR 6,619k, lease receivables EUR 11,911k, other assets EUR 3,005k, refinancing liabilities EUR 4,143k, deferred tax liabilities EUR 3,482k, other liabilities EUR 8,735k, and other remaining liabilities EUR 172k. Intangible assets are largely attributable to non-contractual relationships of resellers with clients, non-competitive clauses, and other contractual rights. Of the lease receivables, an amount of EUR 3,748k is impaired and is not expected to be recovered. The refinancing liabilities are owed to GRENKE FINANCE Plc., Dublin, Ireland. These loans were eliminated as a result of the consolidation and are therefore not reported in the consolidated balance sheet. The preliminary purchase price allocation resulted in goodwill of EUR 27,745k which is not tax deductible. The goodwill includes intangible assets such as employees and unexpected synergy effects which could not be separately identified.

The total consideration paid for the business combination with Grenke Renting S.A. amounted to EUR 32,748k and consisted of a cash component in the amount of EUR 22,000k and an instalment in the amount of EUR 10,748k which is recognised under other liabilities and is due in January 2013. Cash acquired with the subsidiary amounted to EUR 321k.

All costs related to the acquisitions were recognised as an expense.

Dividend Payment

The resolution on the appropriation of GRENKELEASING AG's profits for fiscal year 2011 in the amount of EUR 22,284,787.12 was adopted by the Annual General Meeting on May 10, 2012. The Annual General Meeting approved the proposal of the Board of Directors and the Supervisory Board, resolving to appropriate the unappropriated surplus for 2011 as follows:

Unappropriated surplus for 2011	EUR 22,284,787.12
Distribution of a dividend of EUR 0.75 per share for a total of 13,684,099 shares	EUR 10,263,074.25
Appropriation to retained earnings	EUR 11,000,000.00
Profit carried forward (to new account)	EUR 1,021,721.87

The dividend was paid to the shareholders of GRENKELEASING AG on May 11, 2012.

In the previous year, the Annual General Meeting adopted the proposal of the Board of Directors and the Supervisory Board, resolving and performing the appropriation of the unappropriated profit for 2010 as follows:

Unappropriated surplus for 2010	EUR 41,832,253.42
Distribution of a dividend of EUR 0.70 per share for a total of 13,684,099 shares	EUR 9,578,869.30
Appropriation to retained earnings	EUR 29,000,000.00
Profit carried forward (to new account)	EUR 3,253,384.12

The dividend was paid to the shareholders of GRENKELEASING AG on May 11, 2011.

Related Party Disclosures

By way of signature dated June 29, 2010 and July 13, 2010, the Supervisory Board of GRENKELEASING AG had concluded phantom stock agreements with the Board of Directors members Dr. Uwe Hack and Mr. Gilles Christ.

Under these agreements, Dr. Hack and Mr. Christ receive entitlements to payment equal to the increase in value of 30,000 and 15,000 shares in GRENKELEASING AG, respectively, in relation to a defined basic share price for fiscal years 2010, 2011, and 2012. This basic share price is the 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 2010 was EUR 28.68 and for 2011 it was EUR 37.72. The basic share price for 2012 is EUR 35.81. The maximum payment arising from this agreement is limited to EUR 600,000 and EUR 300,000, respectively, for the period of three years. Due to Mr. Hack's departure from the Board of Directors as per September 30, his possible entitlement for 2012 was halved. The value of the phantom stock agreements granted for the year 2012 totalled EUR 696k as per September 30, 2012. Since the claim is earned for the calendar year and there is a ceiling on the maximum payment, the proportionate expense amounts to EUR 400k as per September 2012. For 2010, a total of EUR 374k was paid out on the basis of the phantom stock agreements for Dr. Uwe Hack and Mr. Gilles Christ. No payment was made for 2011 on the basis of the phantom stock agreements.

Employees

In the reporting period, the GRENKELEASING AG Consolidated Group had an average of 656 employees (previous year: 578), not including the Board of Directors.

Events after the Balance Sheet Date

On October 16, 2012, GRENKE FINANCE Plc. issued a new bond under the debt issuance programme in an amount of EUR 125 million. The bond has a term of 4 years and an interest coupon of 3.125 percent.

Calendar of Events for 2013

May 7, 2013 Annual General Meeting (Kongress-Haus Baden-Baden)

Contact Details

Renate Hauss Corporate Communications

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

Fax: +49 (0) 7221 5007-4218

E-Mail: investor@grenke.de

Figures in this quarterly financial report are usually presented in thousands and millions of euro. Due to rounding, differences as against the actual number in euro may emerge in individual figures. Naturally, such differences are not of a significant nature.

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 76532 Baden-Baden

Telefon: +49 7221 5007-204 Telefax: +49 7221 5007-4218

www.grenke.de www.grenkebank.de www.grenkefactoring.de

E-Mail: investor@grenke.de