Grenke AG — Interim / Quarterly Report 2015

Oct 27, 2015

GRENKELEASING AG Group

Financial Report for the 3rd Quarter and the First Nine Months 2015

Contents

Key Figures	2
Letter to Shareholders from the Board of Directors	4
The GRENKELEASING AG Share	5
Interim Group Management Report	6
Targets and Strategy	6
Macroeconomic and Sector-Specific Environment	7
New Business	7
Report on the Results of Operations	10
Report on Financial Position and Net Assets	13
Report on Risks, Opportunities and Forecasts	15
Condensed Interim Consolidated Financial Statements	17
Consolidated Income Statement	17
Consolidated Statement of Comprehensive Income	18
Consolidated Statement of Financial Position	19
Consolidated Statement of Cash Flows	21
Consolidated Statement of Changes in Equity	23
Notes to the Condensed Interim Consolidated Financial Statements	24
Calendar of Events and Contact Information	41

Key Figures GRENKE Group

	Jan. 1, 2015 to		Jan. 1, 2014 to
	Sep. 30, 2015	Change (%)	Sep. 30, 2014	Unit
New business GRENKE Group Leasing	961,121	17.0	821,279	EURk
– of which international	698,433	16.1	601,776	EURk
– of which franchise international	19,936	109.7	9,509	EURk
– of which Germany	242,752	15.6	209,994	EURk
Western Europe (without Germany)*	315,533	12.7	280,028	EURk
Southern Europe*	239,263	24.7	191,931	EURk
Northern / Eastern Europe*	147,139	12.5	130,848	EURk
Other regions*	16,434	93.8	8,478	EURk
New business GRENKE Group Factoring	230,177	54.3	149,159	EURk
– of which Germany	87,184	14.4	76,226	EURk
– of which international	110,430	112.3	52,015	EURk
– of which franchise international	32,563	55.7	20,918	EURk
GRENKE Bank
Deposits	314,770	6.5	295,677	EURk
New business start-up financing (incl. microcredit business)	14,370	71.3	8,390	EURk
Contribution margin 2 (CM2) on new business
GRENKE Group Leasing	177,763	12.3	158,240	EURk
– of which international	140,297	10.9	126,451	EURk
– of which franchise international	3,651	87.6	1,946	EURk
– of which Germany	33,815	13.3	29,843	EURk
Western Europe (without Germany)*	62,667	10.5	56,716	EURk
Southern Europe*	50,211	14.8	43,751	EURk
Northern / Eastern Europe*	28,052	7.0	26,217	EURk
Other regions*	3,018	76.2	1,713	EURk
Further information leasing business
Number of new contracts	113,448	12.8	100,596	units
Share of IT products in lease portfolio	81	–3.6	84	percent
Share of corporate customers in lease portfolio	100	0.0	100	percent
Mean acquisition value	8.5	3.7	8.2	EURk
Mean term of contract	48	0.0	48	months
Volume of leased assets	3,959	16.8	3,389	EURm
Number of current contracts	472,862	15.0	411,153	units

*Regions: Western Europe (without Germany): Austria, Belgium, France, Luxembourg, the Netherlands, Switzerland Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain

Northern / Eastern Europe: Denmark, Finland, Ireland, Norway, Sweden, UK / Czech Republic, Hungary, Poland, Romania, Slovakia Other regions: Brazil, Canada, Chile, Dubai, Turkey

GRENKE Group = GRENKE Consolidated Group including franchise partners

GRENKE Consolidated Group = GRENKELEASING AG and all consolidated subsidiaries and structured entities according

Key Figures GRENKE Consolidated Group

	Jan. 1, 2015 to		Jan. 1, 2014 to
	Sep. 30, 2015	Change (%)	Sep. 30, 2014	Unit
Key figures income statement
Net interest income	140,440	21.9	115,243	EURk
Settlement of claims and risk provision	43,817	12.2	39,060	EURk
Profit from insurance business	36,853	20.9	30,490	EURk
Profit from new business	37,300	6.7	34,959	EURk
Gains (+) / losses (-) from disposals	–45	–102.5	1,779	EURk
Other operating income	4,079	26.0	3,238	EURk
Cost of new contracts	25,163	12.3	22,413	EURk
Cost of current contracts	7,944	2.3	7,766	EURk
Project costs and basic distribution costs	30,639	15.1	26,617	EURk
Management costs	22,643	17.7	19,236	EURk
Other costs	7,699	49.9	5,136	EURk
Operating result	80,722	23.3	65,481	EURk
Other interest income (expense)	–65	–189.0	73	EURk
Income / expenses from fair value measurement	18	–76.0	75	EURk
EBT (earnings before taxes)	80,805	23.4	65,483	EURk
Net profit	59,689	23.5	48,331	EURk
Earnings per share (according to IFRS)	4.02	22.6	3.28	EUR
Further Information
Dividends	1.10	10.0	1.00	EUR
Embedded value, leasing contract portfolio
(incl. equity before taxes)	865	16.7	741	EURm
Embedded value, leasing contract portfolio
(incl. equity after taxes)	791	18.1	670	EURm
Economic result (after taxes)*	82	9.3	75	EURm
Cost / income ratio	53.8	–2.4	55.1	percent
Return on equity (ROE) after taxes	14.0	3.7	13.5	percent
Average number of employees	918	9.5	838	employees
Staff costs	46,340	15.1	40,253	EURk
– of which total remuneration	38,106	15.8	32,911	EURk
– of which fixed remuneration	28,411	13.5	25,039	EURk
– of which variable remuneration	9,695	23.2	7,872	EURk

* Indicator that combines the net profit of one period with the change in the embedded value after tax (the present value of all outstanding lease instalments after costs and risk provisions). From 2015, the method of calculation has been adjusted to determine the economic result. The retained earnings are included in both the net profit for the period as well as in the embedded value at the end of the period. Therefore, they are eliminated once in the calculation of the economic result.

GRENKE Group = GRENKE Consolidated Group including franchise partners

GRENKE Consolidated Group = GRENKELEASING AG and all consolidated subsidiaries and structured entities according to IFRS

Letter to Shareholders from the Board of Directors

Dear Shareholders,

Ladies and Gentlemen,

We are pleased to report to you today on the continued positive development of the GRENKE Consolidated Group. The success of our proven, value-oriented business model and the profitable performance of the past several quarters are becoming abundantly clear. The positive trend witnessed in the first six months of the year continued unabated in the third quarter of 2015. Net profit for the nine-month period grew a satisfactory 24 percent to EUR 59.7 million as a result of the lower rise in losses in relation to income growth and the attractive overall interest rate environment. Based on this encouraging development, we expect to even exceed the increased forecast provided in July 2015 of a net profit in the range of EUR 74 to 78 million. For 2015, we now expect to achieve net profit in the range of EUR 78 to 80 million, representing year-on-year growth of at least 20 percent.

We also had tremendous success in generating new business. The total volume of the GRENKE Group rose 23 percent year-on-year in the nine-month period, and GRENKE Group Leasing's new business climbed by 17 percent. These increases resulted in growth at the GRENKE Group above our long-term target of ten percent, with growth in our Leasing segment even exceeding the forecasted rise of between 11 and 15 percent given at the start of the year. Whereas our leasing business in Germany achieved further double-digit growth, our leasing business in France remained slightly below our expectations. Nevertheless, we were able to more than compensate for this performance with our international business. Persistently high demand was also seen in our factoring business. Given the rise in new business of 54 percent in the first nine months of this fiscal year compared to the previous year, we are well on our way to doubling our targeted growth rate of 20 to 24 percent set out for 2015. At 18.5 percent, the contribution margin 2 in our leasing business remained at a very high level in the nine-month period after a level of 19.3 percent in the previous year.

We also plan to take advantage of other attractive growth opportunities. To do so, we have strengthened our equity base in the third quarter by issuing hybrid capital with a volume of EUR 30 million. This instrument, which fits in well strategically with our profitable growth path, was used for the first time. This bond together with our equity ratio of 17.5 percent (based on total assets of EUR 3.2 million as per the reporting date), equip us as best as possible so that we may continue to act quickly and flexibly in the future.

We continue to enjoy significant attention from the capital market. The trust awarded to us by investors is directly reflected in our share price performance. During the past nine months, our shares have gained 59 percent and have achieved a new record high of EUR 158 in mid-September. The Company's market capitalisation has climbed to over EUR 2.3 billion. This makes us not only an attractive investment for many investors but also a reliable core holding in their portfolio. We also continue to enjoy an excellent reputation on the bond market evidenced by our recent rating from Standard & Poor's in August 2015, in which our previous "negative" outlook was raised to "stable". We have maintained a high credit rating (BBB+/A-2) with Standard & Poor's since 2003.

Baden-Baden, October 2015

Wolfgang Grenke Chairman of the Board of Directors

The GRENKELEASING AG Share

The international financial markets got off to a strong start in the third quarter supported in large part by the positive economic data from Europe and the US and anticipation that an agreement would be reached on Greece's debt. There were concerns, however, due to the accumulation of negative economic signals from China and the general mood of uncertainty on the Chinese stock markets, which had already undergone a massive correction. These factors also affected the international markets as the quarter progressed: markets suffered heavy losses in late August and have only seen a slow recovery since. The trend only turned positive at the end of the quarter when significant gains in Asia were made, and the US delivered positive data from the labour market.

On balance, the German DAX benchmark index declined twelve percent during the third quarter, marking the strongest quarterly decline in four years. The DAXsector Financial Services sector index, in contrast, which includes the shares of GRENKELEASING AG, performed more positively and gained nine percent during the July to September period. The SDAX price index during this period lost three percent.

The shares of GRENKELEASING AG remained resilient in the third quarter and continued their strong upward price trend that began at the end of 2014, despite the high price fluctuations on the international financial markets. By mid-September, the shares had almost doubled within a single year reaching a record high of EUR 158.00. At the end of the quarter, the shares were quoted at roughly EUR 140, which amounted to a nine percent rise on balance for the quarter.

Interim Group Management Report

Targets and Strategy

The GRENKE Consolidated Group operates worldwide through its subsidiaries and branch offices. A franchise model was established for the Group's entry into new regional markets and the introduction of additional financing products. GRENKELEASING AG ("the Company") does not hold interests in the legally independent companies of its franchisees. Accordingly, this interim management report distinguishes between the GRENKE Consolidated Group ("the Consolidated Group"), which refers to GRENKELEASING AG and all of its consolidated subsidiaries and structured entities in accordance with IFRS, as well as the GRENKE Group, which refers to the GRENKE Consolidated Group including its legally independent franchise partners.

We are one of the leading European companies in the field of financial services for small and medium enterprises (SMEs) focused on lease financing for smaller IT products (small-ticket IT leasing). Our business model is straightforward, sustainable and value-oriented. The broad diversification of our portfolios across customers, industries and countries and the comparably low average volumes of our contracts are characteristic of our business. The standardisation of our offers facilitates the quick and secure processing of contracts. We grow through our continual entry into new countries in Europe, North and South America and Asia. We also continuously increase our market presence in our established markets.

Moreover, we are steadily expanding our product range and our offers of financial solutions. Our innovative "eSignature" product, introduced in the reporting quarter, is already broadly used by our leasing customers and specialist reseller partners. This digital signature is not only simple, flexible and convenient, but this paperless contract further speeds up the processing carried out by our resellers and thus reduces the time between the contract's conclusion and the receipt of funds. This is how we reinforce our position as the preferred partner of our resellers. An important and fast growing focus of ours is the purchase of lower volume receivables (factoring) in various European countries.

During the first nine months of the current fiscal year, we opened new locations for our leasing business in the cities of Bielefeld, Regensburg, Newport (Great Britain) and Malmö (Sweden). Also in the first quarter of 2015, we acquired the company of our former franchise partner in Slovenia. By the end of the year, we plan to complete a cell division in France and enter the markets in Ireland (factoring) and Singapore (leasing). In addition to various financing, investment and payment products provided by GRENKE BANK AG ("GRENKE Bank") in Germany, we also participate in the "lease guarantee" programme sponsored by the German guarantee banks and work with the "Weltsparen" portal. Since June 2015, contracts totalling EUR 1.7 million have been concluded under the "Mikrokreditfonds Deutschland" programme sponsored the Federal Ministry of Labour and Social Affairs. Finally, together with a growing number of federal and state development banks, GRENKE Bank also finances business start-ups and provides development funds to small- and medium-sized companies and members of self-employed professions for business investments financed through leasing. A total of 15,910 leasing contracts have been concluded since 2012 as part of these collaborations. The cooperation with NRW.BANK, the state development bank of North Rhine-Westphalia, was expanded in the reporting quarter to include a global bond in the amount of EUR 25 million.

Thanks to our international presence and our broad product range, we can focus our growth on those countries and products offering a favourable, competitive environment and in turn an attractive risk-reward profile. When doing so, our aim is not to avoid risk but to assess it as correctly as possible and enforce adequate margins. We do this by using our proprietary, proven and continuously refined IT-based model for forecasting losses. This model has been a key contributor to our long-standing success: high growth, limited risk, and attractive margins through all economic cycles.

We finance our growth using a steadily growing range of refinancing instruments. This is how we ensure that we have a variety of flexible financing options available to us at all times. We have these options as a result of our long-term economic success and especially because we have a reputation as a reliable business partner. Therefore, we pay special attention to maintaining our standing on the equity and debt markets.

Macroeconomic and Sector-Specific Environment

Traditionally, the growth in GRENKE Group's new business is relatively unaffected by overall economic cycles. We are able to achieve profitable growth in both good economic times and times of economic difficulty. We minimise the influence that the overall development in corporate insolvencies has on our loss ratio using our sophisticated method for forecasting losses. Industry trends, such as the business policies of banks and financial service providers in the leasing, factoring and deposit businesses have a significant influence on our growth as does the sector's continual increase in statutory requirements. Our highly efficient operating processes typically give us a relative competitive advantage. Any changes in the capital market or central bank interest rates that impact our refinancing costs are passed on to our customers through the conditions of our contracts. These types of changes do not affect current contracts because of our congruent refinancing structure. Nevertheless, the time gap needed to adjust our conditions can have a temporary positive or negative effect on the profitability of our new business. Our broad range of refinancing instruments – including deposits held at GRENKE Bank – offer tremendous flexibility so that we can react to various changes in the market or in expected interest rate developments.

New Business

Once again, we were very successful in growing our new business. In comparison to the nine-month period of the previous year, the GRENKE Group increased its new business volume by 23 percent to EUR 1,205.7 million. New business at GRENKE Group Leasing – that is, the total of the acquisition costs of newly purchased leased assets – climbed 17 percent to EUR 961.1 million in the first nine months of the current fiscal year. It is important to highlight that the new business growth in our German home market increased by 16 percent, marking a return to the high growth rates attained in our international markets. The international share of our new business remains high at 75 percent and underscores our strategy of generating a growing share of our new business outside of Germany.

In Western Europe (without Germany), we acquired new business volume of EUR 315.5 million in the nine-month period, which was 13 percent more than we obtained in the same period of the previous year. We grew only a moderate nine percent in our core market of France, but continued to successfully expand our market shares in the important markets of Italy and Switzerland, where we grew by 33 and 28 percent, respectively. In our Southern European markets, we expanded rapidly and increased the volume of new business in leasing by 25 percent to EUR 239.3 million. In Northern/Eastern Europe, we recorded a rise of 13 percent in comparison to the previous year and acquired new business of EUR 147.1 million. We had a stronger-than-average increase in the new business of our other regions, which mainly includes countries that are relatively new for us. In these countries, we increasingly steered our management towards growth without having to raise our risk assessment. This led to a near doubling of new business volumes (+94 percent) in comparison to the previous year. In absolute terms, new business volumes in these countries totalled EUR 16.4 million following EUR 8.5 million in the previous year.

In the period from January to September, we achieved a total of 257,625 lease applications. The conversion rate (applications into contracts) amounted to 44 percent, and a corresponding 113,448 new contracts were concluded. A total of 208,808 of these applications stemmed from our international markets and led to 89,160 new contracts. This resulted in a conversion rate of 43 percent, which is slightly below the rate that includes Germany where a total of 48,817 applications led to 24,288 new contacts, or a good fifty percent of applications were converted into contracts. The mean acquisition value per lease contract was EUR 8,472 compared to a value of EUR 8,164 in the first nine months of the previous year.

GRENKE Group also continues to be highly profitable. The contribution margin 2 (CM2) of our new business in the Leasing segment, which is defined as the present value of the operating income of a lease contract less the cost of risk and individual contract costs, increased twelve percent from EUR 158.2 million to EUR 177.8 million. At 18.5 percent, the CM2 margin remained high and was just slightly below the previous year's level of 19.3 percent.

New business at GRENKE Group Factoring developed dynamically in the nine-month period posting a 54 percent rise in acquired volume – that is, the sum of purchased receivables – and reached a value of EUR 230.2 million. This figure amounts to a quarter of all new business of GRENKE Group Leasing and underlines the high importance of this segment for the GRENKE Group. A majority of this growth stemmed from our international markets where we recorded almost a doubling (+96 percent) of our new business. In Germany, we increased the volume of new business by 14 percent due to increased competition. The income margin in Germany of 2.11 percent (previous year: 2.13 percent) was clearly above the margin of the international business of 1.37 percent (previous year: 1.93 percent). This margin is based on an average period for a factoring transaction of roughly 38 days in Germany (9M-2014: 33 days) and approximately 36 days internationally (9M-2014: 36 days).

GRENKE Bank's collaboration with development banks led to a 71.3 percent increase from EUR 8.4 million to EUR 14.4 million in the volume of business start-up financing, which includes the microcredit business. Deposit volumes at GRENKE Bank as per the September 30 reporting date grew seven percent to EUR 314.8 million after their level of EUR 295.7 million at the end of the previous fiscal year.

Prev. year as per 30/09: Germany 30.1%; Western Europe (without Germany) 33.9%; Southern Europe 19.6%; Northern / Eastern Europe 15.5%; Other regions 0.9%

Regions: Western Europe (without Germany): Austria, Belgium, France, Luxembourg, the Netherlands, Switzerland Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain Northern / Eastern Europe: Denmark, Finland, Ireland, Norway, Sweden, UK / the Czech Republic, Hungary, Poland, Romania, Slovakia Other regions: Brazil, Canada, Chile, Dubai, Turkey

Prev. year as per 30/09: Germany –3.2%; Western Europe (without Germany) +21.0%; Southern Europe +26.1%; Northern / Eastern Europe +22.2%; Other regions –33.1%

Report on the Results of Operations

Selected information from the consolidated income statement

	Jul. 1, 2015 to	Jul. 1, 2014 to
EURk	Sep. 30, 2015	Sep. 30, 2014
Net interest income	49,017	40,602
Settlement of claims and risk provision	14,957	14,250
Net interest income after settlement of claims and risk provision	34,060	26,352
Profit from insurance business	13,266	10,965
Profit from new business	12,484	11,778
Gains (+) / losses (–) from disposals	–13	1,047
Income from operating business	59,797	50,142
Staff costs	15,909	13,707
Of which total remuneration	13,139	11,274
Of which fixed remuneration	9,804	8,509
Of which variable remuneration	3,335	2,765
Selling and administrative expenses (excluding staff costs)	14,295	11,546
Of which IT project costs	1,543	816
Earnings before taxes	28,242	23,805
Net profit	21,208	17,149
Earnings per share (basic/diluted, in EUR)	1.41	1.16

During the third quarter of the current 2015 fiscal year, we continued the strong growth seen in the first six months of the year. We increased our quarterly net profit year-on-year by 24 percent. Several positive developments contributed to this performance: the profitable new business generated in previous quarters from which we successively accrue income as contracts progress, the consistently attractive interest rate environment and the favourable development of losses.

Increased interest and similar income from financing business, as well as declining expenses from interest on refinancing, led to a rise in net interest income of 21 percent compared to the previous year. Expenses for the settlement of claims and risk provision again had a comparatively lower increase of merely five percent year-on-year as a result of our active and risk-oriented margin management. The Consolidated Group's loss rate amounted to 1.5 percent after 1.7 percent in the third quarter of 2014. As a result, net interest income after settlement of claims and risk provision saw a gratifying increase of 29 percent in comparison to the previous year.

Profit from insurance business and profit from new business also developed in line with our expectations. Profit from insurance business grew by 21 compared to the previous year as a result of the strong growth in our new business and profit from new business increased by six percent. Taking into account gains/losses from disposals, which tend to be volatile on a quarterly basis, GRENKE Consolidated Group's income from operating business grew 19 percent.

Staff costs increased by 16 percent year-on-year as a result of the higher number of employees and a higher share of performance-related remuneration. Selling and administrative expenses grew by 24 percent primarily as a result of considerably higher IT project costs (+89 percent) as well as higher consulting costs in preparation for our pending market entries. Other operating expenses increased by 30 percent compared to the previous year and other operating income grew 13 percent. On an absolute basis, these increases continue to have little impact on the earnings development of the GRENKE Consolidated Group.

On balance, the GRENKE Consolidated Group's operating result in the reporting quarter rose a satisfactory 19 percent and reached a net EUR 28.2 million after EUR 23.8 million in the third quarter of the previous year. Earnings before taxes also increased 19 percent during the quarter. Thanks to a reduced tax rate of 25 percent after 28 percent in the previous year, the reporting quarter's net profit increased 24 percent from EUR 17.1 million to EUR 21.2 million and resulted in earnings per share of EUR 1.41 after EUR 1.16 in the comparable period of the previous year.

Nine-month Comparison 2015 versus 2014

The information above on the development of the third quarter also essentially applies to the nine-month period. Net interest income in the first nine months improved 22 percent from EUR 115.2 million in the previous year's period to EUR 140.4 million in the reporting period. The twelve percent rise in expenses for the settlement of claims and risk provision from EUR 39.1 million to EUR 43.8 million was disproportionately low. The loss rate was 1.5 percent following 1.6 percent reported in the nine-month period of the prior year. Net interest income after settlement of claims and risk provision rose accordingly by 27 percent from EUR 76.2 million to EUR 96.6 million.

The Consolidated Group's income from operating business increased 19 percent from EUR 143.4 million in the previous year to EUR 170.7 million and included higher profits from insurance business and new business as well as break-even gains/losses from disposals. Income growth in the nine-month period outpaced expense growth. Staff costs rose 15 percent year-on-year, and selling and administrative expenses increased a mere 13 percent. Accordingly, the operating result grew 23 percent and reached EUR 80.7 million after EUR 65.5 million in the comparable period of the previous year.

Overall, we were able to improve our cost-income ratio – the ratio of income and expenses – from 55.1 percent in the previous year's period to 53.8 percent in the reporting period. This not only shows the margin strength of our business but also the high efficiency of our processes.

Earnings before taxes were similarly strong and at EUR 80.8 million exceeded the previous year's level of EUR 65.5 million by 23 percent. Net profit reached EUR 59.7 million after EUR 48.3 million in the comparable period of the previous year, representing an increase of 24 percent. Earnings per share increased to EUR 4.02 after EUR 3.28 in the comparable period of the previous year.

Segment Development

Business segments

Segment reporting is based on the predominant organisational structure of the GRENKE Consolidated Group. Therefore, operating segments are divided according to the management of the business areas in the Leasing, Banking and Factoring segments. Effects from transactions between the operating segments are eliminated in the column "Consolidation effects". A regional split of the business activities is provided on a yearly basis as part of GRENKE Consolidated Group's financial statements for each fiscal year. Separate financial information is available for the three operating segments. More detailed information on the business segments can be found in the Consolidated Group's segment reporting.

Business Development

The Leasing segment continues to represent the most important earnings pillar for the GRENKE Consolidated Group; therefore, the discussion on the results of operations essentially also applies to this chapter. The operating segment income of the Leasing segment grew 20 percent year-on-year and reached EUR 158.1 million. The below-average rise in expenses resulted in a 27 percent increase in the segment result to EUR 73.3 million. We also recorded strong growth in our Factoring segment. In the period from January to September, operating segment income increased 49 percent yearon-year to EUR 2.7 million and the segment result amounted to EUR 0.2 million, which was just slightly below the prior year's level of EUR 0.3 million. Our Banking segment, which comprises the activities of GRENKE Bank, experienced a slight decline. Operating segment income decreased three percent in the reporting period compared to the previous year and totalled EUR 9.9 million after EUR 10.1 million. The segment result amounted to EUR 7.2 million following EUR 7.7 million in the previous year.

Report on Financial Position and Net Assets

Selected information from the consolidated statement of financial position and the consolidated statement of cash flows

EURk	Sep. 30, 2015	Dec. 31, 2014
Current assets	1,309,931	1,179,316
thereof cash and cash equivalents	122,034	88,395
thereof lease receivables	964,816	876,781
Non-current assets	1,937,463	1,745,634
thereof lease receivables	1,749,503	1,579,317
Total assets	3,247,394	2,924,950
Current liabilities	904,320	849,974
thereof financial liabilities	777,911	779,319
Non-current liabilities	1,774,297	1,581,990
thereof financial liabilities	1,721,360	1,531,880
Equity	568,777	492,986
Equity ratio in percent	17.5	16.9
Total liabilities and equity	3,247,394	2,924,950
	Jan. 1, 2015 to	Jan. 1, 2014 to
	Sep. 30, 2015	Sep. 30, 2014
Cash flow from operating activities	60,768	–159
Net cash flow from operating activities	42,835	–7,130
Cash flow from investing activities	–11,669	–10,142
Cash flow from financing activities	13,088	–10,840
Total cash flow	44,254	–28,112

The earnings growth is also reflected in the balance sheet of the GRENKE Consolidated Group as per the September 30, 2015, reporting date. As a result of our growth during the first nine months of the fiscal year, total assets increased eleven percent compared to December 31, 2014, and totalled over EUR 3.2 billion. At the same time, our equity grew by 15 percent, mainly as a result of the issue of EUR 30.0 million of hybrid capital in the third quarter. With a stronger equity ratio of 17.5 percent after 16.9 percent at the end of the previous fiscal year, we are not only significantly above our longterm target of 16 percent but also optimally equipped for further growth.

Current and non-current lease receivables, which is the largest single position on our balance sheet, grew by eleven percent in the first nine months. As in the prior year, this position comprises 84 percent of our total assets. The Consolidated Group's cash and cash equivalents remain at a comfortably high level after increasing 38 percent as per the reporting date compared to their level on December 31, 2014. We continue to follow our strategy of using our liquid assets operationally – particularly to finance lease receivables – when our only other option is to invest these funds in low-interest bearing instruments. Other significant changes on the asset side of the balance sheet occurred in the category of financial assets. Non-current financial assets rose 51 percent above their value at the end of the previous fiscal year.

On the equity and liabilities side of the balance sheet, the sum of current and non-current liabilities grew by six percent and twelve percent, respectively. The strong growth in our new business resulted in higher non-current financial liabilities, which largely include our liabilities from refinancing. We also recorded an increase in the Consolidated Group's deferred lease payments and pension provisions. Deferred lease payments had a reporting-date related rise of 1.7x, and pension provisions grew 35 percent as a result of the low level of interest rates.

We continue to rely on a wide range of refinancing sources to finance our lease receivables. These sources include debtand equity-like instruments. By September 30, 2015, we had placed a total of five new bonds totalling over EUR 116.2 million as well as hybrid capital of EUR 30.0 million, already mentioned. Additional information on the hybrid capital can be found in the Notes on page 31. We also issued eleven promissory note loans in the first nine months with a total volume of EUR 109.0 million and CHF 28.4 million as well as diverse short-term commercial paper that totalled EUR 290.0 million. The commercial paper was issued as part of our goal of avoiding excess liquidity when possible. This was offset by the scheduled redemption of two bonds with a total volume of EUR 175.0 million and two promissory note loans totalling EUR 82.9 million and CHF 3.6 million year-to-date. The utilisation of our Asset-Backed Commercial Paper (ABCP) programme as per the reporting date was 76.3 percent, an increase of 6.6 percentage points over the level as per the end of the previous fiscal year. As a third key pillar in our extensive refinancing mix, we have also raised the level of deposits at GRENKE Bank in the context of our liquidity management. As per September 30, deposits had risen to EUR 314.8 million after amounting to EUR 300.4 million at the end of the previous fiscal year.

In the first nine months of the current fiscal year, we generated EUR 60.8 million in cash flow from operating activities (9M-2014: EUR –0.2 million) based on earnings before taxes of EUR 80.8 million. Cash outflows resulted mainly from the refinancing of lease receivables (EUR 258.0 million), a loan to franchisees and an increase in other assets of a net EUR 22.7 million. Cash inflows totalling EUR 243.0 million resulted mainly from the changes in refinancing liabilities, the deposit business and deferred lease payments. Additional proceeds originated from other liabilities and amounted to EUR 5.6 million. After taxes and interest paid and received, the net cash flow from operating activities amounted to EUR 42.8 million following a total of EUR –7.1 million in the nine-month period of the previous year.

Cash flow from investing activities mainly consisted of payments for the purchase of operating and office equipment and intangible assets (EUR 4.1 million). It also included a cash outflow for the acquisition of a former franchise company in Slovenia in the first quarter of 2015 (EUR 7.7 million). The cash flow from investing activities amounted to EUR –11.7 million after EUR –10.1 million in the previous year.

Total cash flows in the first nine months were EUR 44.3 million after a total of EUR –28.1 million in the previous year. Total cash flows included cash flow from financing activities containing the net repayment of bank liabilities (EUR 0.2 million), net proceeds from the issue of hybrid capital in the third quarter (EUR 29.5 million), and a dividend payment to shareholders (EUR 16.2 million).

Report on Risks, Opportunities, and Forecasts

Opportunities and Risks

The following report on opportunities and risks relates to the GRENKE Consolidated Group and its individual segments. The opportunities and risks that were presented in the 2014 annual financial statements continue to be relevant. New risks or risks of material importance did not arise. We believe the opportunities for our further development significantly outweigh the risks that are inherent in our business model.

The demand for lease financing remains high, as measured by the number of incoming applications described in the chapter on new business. This allows us to focus clearly on new business growth and systematically increase it while achieving risk-appropriate margins at the same time. We will continue to forge ahead consistently with our organic growth supported by our planned entry into the Singapore market in the fourth quarter of 2015, which will expand our presence in Asia. We are not exposed to substantial individual risks due to the broad diversification of our business.

Especially in recessive periods, we monitor rising losses that have a significant influence on our earnings development. Economic developments are currently positive in most of the countries we operate in. In the course of the year, losses are usually volatile and only have an impact roughly two years after the underlying business is concluded. Assuming these types of risks and successfully managing them is a central element of our proven business model. We are determined to assess risks as precisely as possible when concluding a contract so that we may include an appropriate premium in the contract's conditions. To accomplish this, we have implemented a comprehensive system of risk identification, quantification, control, and management. This is a sophisticated system that is continuously refined. It is an appropriate and capable tool for recognising risks at an early stage and managing them. We not only pay attention to individual risks, but also to possible risk clusters and overall interdependencies.

In terms of refinancing the portfolio of lease receivables, the amount of interest rate risk is limited. Liabilities from refinancing are hedged using derivatives to the extent that they have variable interest rates. In terms of new business, however, risks can occur from interest and spread changes. Therefore, the possible time lag after which the change in interest rates is passed on to customers may have a temporary influence on the profitability of our new business. While the US Federal Reserve is currently moving from a very expansive to a more restrictive monetary policy, a turnaround in interest rates in Europe is not yet foreseeable. A more restrictive monetary policy in the US could lead to a rise in key interest rate and continued weakness in the euro. However, this would not have a noticeable impact on the GRENKE Consolidated Group's business because corresponding hedges would be provided for outstanding financing volumes starting at EUR 1,000k for subsidiaries or franchise companies operating outside of the Eurozone. Currency risks impact the lease refinancing operations in Switzerland, Brazil, Chile, Poland and Great Britain only to a limited extent since the lease refinancing agreements in those countries are based on local currencies. In addition, payments are secured using economic hedging.

In terms of refinancing, political and geopolitical risks could lead to substantial short-term burdens on the capital market. However, the capital market has a history of always providing sufficient funds at commercially reasonable terms to issuers with a solid reputation, even in difficult market situations. In the past, we have been able to successfully place new issues such as promissory note loans, commercial paper, ABS bonds, and, recently, hybrid capital, in all types of market situations, when needed. In addition, our access to bank deposits through GRENKE Bank offers us an attractive source of refinancing that can be used with a high degree of flexibility.

Forecasts

We are thoroughly satisfied with the development of the first nine months of the 2015 fiscal year. A key contributor to this development has been the growing benefit from the rapid pace of expansion we experienced in past quarters. With new business growth at GRENKE Group Leasing of 17 percent in the nine-month period, we are not only continuing our expansion without interruption, but we are also clearly above our full-year forecast of between 11 and 15 percent growth. The growth in new business at our Factoring segment has developed far better than projected at the start of the year. The increase of 54 percent in the first nine months puts us on track to more than double our projected growth of 20 to 24 percent. We are also clearly exceeding our long-term target of achieving ten percent growth per year for the GRENKE Group. Based on GRENKE Consolidated Group's net profit, we are well on our way after the first nine months to exceeding our forecast range of EUR 74 to 78 million that we provided in July 2015. For the current fiscal year, we now expect to reach net profit in the range of EUR 78 to 80 million.

Condensed Interim Consolidated Financial Statements

Consolidated Income Statement

	3-month report		9-month report
	Jul. 1, 2015 to	Jul. 1, 2014 to	Jan. 1, 2015 to	Jan. 1, 2014 to
EURk	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest and similar income from financing business	60,536	53,971	176,974	156,211
Expenses from interest on refinancing and deposit business	11,519	13,369	36,534	40,968
Net interest income	49,017	40,602	140,440	115,243
Settlement of claims and risk provision	14,957	14,250	43,817	39,060
Net interest income after settlement of claims and risk provision	34,060	26,352	96,623	76,183
Profit from insurance business	13,266	10,965	36,853	30,490
Profit from new business	12,484	11,778	37,300	34,959
Gains(+) / losses (–) from disposals	–13	1,047	–45	1,779
Income from operating business	59,797	50,142	170,731	143,411
Staff costs	15,909	13,707	46,340	40,253
Depreciation and impairment	1,733	1,521	5,680	4,453
Selling and administrative expenses (not including staff costs)	14,295	11,546	38,461	33,986
Other operating expenses	1,010	774	3,607	2,476
Other operating income	1,330	1,175	4,079	3,238
Operating result	28,180	23,769	80,722	65,481
Expenses / income from fair value measurement	0	18	18	75
Other interest income	135	82	293	216
Other interest expenses	73	64	228	289
Earnings before taxes	28,242	23,805	80,805	65,483
Income taxes	7,034	6,656	21,116	17,152
Net profit	21,208	17,149	59,689	48,331
Of which, attributable to:
non-controlling interests	0	0	0	–4
hybrid capital holders of GRENKELEASING AG	336	0	336	0
shareholders of GRENKELEASING AG	20,872	17,149	59,353	48,335
Earnings per share (basic) in EUR	1.41	1.16	4.02	3.28
Earnings per share (diluted) in EUR	1.41	1.16	4.02	3.28
Average number of shares outstanding (basic)	14,754,199	14,754,199	14,754,199	14,747,052
Average number of shares outstanding (diluted)	14,754,199	14,754,199	14,754,199	14,747,052

Consolidated Statement of Comprehensive Income

	3-month report		9-month report
	Jul. 1, 2015 to	Jul. 1, 2014 to	Jan. 1, 2015 to	Jan. 1, 2014 to
EURk	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net profit	21,209	17,149	59,689	48,331
Items that may be reclassified to profit and loss in future periods
Appropriation to / reduction of hedging reserve (before taxes)	–27	33	–56	–3
Income taxes	2	–5	5	–1
Appropriation to / reduction of hedging reserve (after taxes)	–25	28	–51	–4
Change in currency translation differences (before taxes)	–2,431	601	3,420	1,222
Income taxes	0	0	0	0
Change in currency translation differences (after taxes)	–2,431	601	3,420	1,222
Items that will not be reclassified to profit and loss in future periods
Appropriation to / reduction of reserve for actuarial gains and losses
(before taxes)	9	0	–891	–403
Income taxes	0	0	212	94
Appropriation to / reduction of reserve for actuarial gains and losses
(after taxes)	9	0	–679	–309
Other comprehensive income	–2,447	629	2,690	909
Total comprehensive income	18,762	17,778	62,379	49,240
Of which, attributable to:
non-controlling interests	0	0	0	–4
hybrid capital holders of GRENKELEASING AG	336	0	336	0
shareholders of GRENKELEASING AG	18,426	17,778	62,043	49,244

Consolidated Statement of Financial Position

EURk	Sep. 30, 2015	Dec. 31, 2014
Assets
Current assets
Cash and cash equivalents	122,034	88,395
Financial instruments that are assets	1,169	768
Lease receivables	964,816	876,781
Other current financial assets	61,852	59,816
Trade receivables	4,497	4,793
Lease assets for sale	7,878	8,756
Tax assets	14,198	10,940
Other current assets	133,487	129,067
Total current assets	1,309,931	1,179,316
Non-current assets
Lease receivables	1,749,503	1,579,317
Financial instruments that are assets	18	341
Other non-current financial assets	46,425	30,714
Property, plant, and equipment	41,665	40,411
Goodwill	62,175	57,285
Other intangible assets	17,177	14,264
Deferred tax assets	19,355	21,869
Other non-current assets	1,145	1,433
Total non-current assets	1,937,463	1,745,634
Total assets	3,247,394	2,924,950

Consolidated Statement of Financial Position

EURk	Sep. 30, 2015	Dec. 31, 2014
Liabilities and equity
Liabilities
Current liabilities
Financial liabilities	777,911	779,319
Liability financial instruments	2,551	3,506
Trade payables	15,631	9,821
Tax liabilities	9,671	7,043
Deferred liabilities	12,603	10,312
Current provisions	1,776	1,887
Other current liabilities	12,236	11,214
Deferred lease payments	71,941	26,872
Total current liabilities	904,320	849,974
Non-current liabilities
Financial liabilities	1,721,360	1,531,880
Liability financial instruments	980	1,077
Deferred tax liabilities	47,524	45,692
Pensions	4,433	3,281
Non-current provisions	0	60
Total non-current liabilities	1,774,297	1,581,990
Equity
Share capital	18,859	18,859
Capital reserves	116,491	116,491
Retained earnings	398,154	355,389
Other components of equity	4,937	2,247
Total equity attributable to shareholders of GRENKELEASING AG	538,441	492,986
Non-controlling interests	0	0
Additional equity components *	30,336	0
Total equity	568,777	492,986
Total liabilities and equity	3,247,394	2,924,950

* Including an additional AT 1 bond (hybrid capital), which represents an unsecured and subordinated bond of GRENKELEASING AG that is reported as equity under IFRS

Consolidated Statement of Cash Flows

		Jan. 1, 2015 to	Jan. 1, 2014 to
EURk		Sep. 30, 2015	Sep. 30, 2014
	Earnings before taxes	80,805	65,483
	Non-cash items contained in earnings and reconciliation to cash flow from
	operating activities
+	Depreciation and impairment	5,680	4,453
– / +	Profit / loss from the disposal of property, plant, and equipment and intangible assets	29	24
– / +	Net income from non-current financial assets	–65	479
– / +	Other non-cash effective income / expenses	3,154	740
+ / –	Increase / decrease in deferred liabilities, provisions, and pensions	3,269	2,645
–	Additions to lease receivables	–985,435	–850,375
+	Payments by lessees	774,896	670,774
+	Disposals / reclassifications of lease receivables at residual carrying amounts	138,800	123,492
–	Interest and similar income from leasing business	–172,491	–153,750
+ / –	Decrease / increase in other receivables from lessees	2,515	–1,745
+ / –	Currency translation differences	–16,266	–10,444
=	Change in lease receivables	–257,981	–222,048
+	Addition to liabilities from refinancing	729,368	754,686
–	Payment of annuities to refinancers	–575,987	–603,378
–	Disposal of liabilities from refinancing	–15,952	–42,100
+	Expenses from interest on refinancing and on deposit business	36,534	40,968
+ / –	Currency translation differences	9,529	6,278
=	Change in refinancing liabilities	183,492	156,454
+ / –	Increase / decrease in liabilities from deposit business	14,413	40,051
– / +	Increase / decrease in loans to franchisees	–7,688	–4,548
	Changes in other assets / liabilities
– / +	Increase / decrease in other assets	–15,014	–20,047
+ / –	Increase / decrease in deferred lease payments	45,069	–28,669
+ / –	Increase / decrease in other liabilities	5,605	4,824
=	Cash flow from operating activities	60,768	–159

continued on next page

Consolidated Statement of Cash Flows

		Jan. 1, 2015 to	Jan. 1, 2014 to
EURk		Sep. 30, 2015	Sep. 30, 2014
– / +	Income taxes paid / received	–17,998	–6,492
–	Interest paid	–228	–672
+	Interest received	293	193
=	Net cash flow from operating activities	42,835	–7,130
–	Payments for the acquisition of property, plant, and equipment and intangible assets	–4,065	–4,570
– / +	Payments / proceeds from acquisition of subsidiaries	–7,709	–5,846
+	Proceeds from the sale of property, plant, and equipment and intangible assets	105	274
=	Cash flow from investing activities	–11,669	–10,142
+ / –	Borrowing / repayment of bank liabilities	–151	–196
+	Proceeds from cash capital increase	0	0
+	Proceeds from additional equity components (hybrid capital)	29,469	0
–	Dividend payments	–16,230	–10,644
=	Cash flow from financing activities	13,088	–10,840
	Cash funds at beginning of period
	Cash in hand and bank balances	88,395	109,770
–	Bank liabilities from overdrafts	–10,900	–432
=	Cash and cash equivalents at beginning of period	77,495	109,338
+ / –	Change due to currency translation	–934	–275
=	Cash funds after currency translation	76,561	109,063
	Cash funds at end of period
	Cash in hand and bank balances	122,034	83,085
–	Bank liabilities from overdrafts	–1,219	–2,134
=	Cash and cash equivalents at end of period	120,815	80,951
	Change in cash and cash equivalents during the period (= total cash flow)	44,254	–28,112
	Net cash flow from operating activities	42,835	–7,130
+	Cash flow from investing activities	–11,669	–10,142
+	Cash flow from financing activities	13,088	–10,840
=	Total cash flow	44,254	–28,112

Consolidated Statement of Changes in Equity

			Retained				Total equity
			earnings /				attributable to		Additional
			Consoli		Reserve for		shareholders of	Non	equity
	Share	Capital	dated net	Hedging	actuarial	Currency	GRENKE	controlling	compo	Total
EURk	capital	reserves	profit	reserve	gains / losses	translation	LEASING AG	interests	nents*	equity
Equity as per
Jan. 1, 2015	18,859	116,491	355,389	–7	–920	3,174	492,986	0	0	492,986
Total compre
hensive income			59,353	–51	–679	3,420	62,043	0	336	62,379
Issuance of
hybrid capital									30,000	30,000
Cost of issuance of
hybrid capital			–358				–358			–358
Dividend payment
in 2015 for 2014			–16,230				–16,230			–16,230
Equity as per
Sep. 30, 2015	18,859	116,491	398,154	–58	–1,599	6,594	538,441	0	30,336	568,777
Equity as per
Jan. 1, 2014
before
adjustment	18,790	112,757	306,064	–57	–438	2,346	439,462	0		439,462
Effects from retro
active adjustment
pursuant to IFRS 3			–42				–42			–42
Equity as per
Jan. 1, 2014
adjusted	18,790	112,757	306,022	–57	–438	2,346	439,420			439,420
Total compre
hensive income			65,044	50	–482	828	65,440	–4		65,436
Dividend payment
in 2014 for 2013			–14,700				–14,700			–14,700
Capital increase
(Shares issued
from Scrip
Dividend)	69	3,734	0				3,803			3,803
Changes in the
scope of
consolidation								33		33
Transactions with
shareholders			–977				–977	–29		–1,006
Equity as per
Sep. 30, 2014	18,859	116,491	355,389	–7	–920	3,174	492,986			492,986

* Including an additional AT 1 bond (hybrid capital), which represents an unsecured and subordinated bond of GRENKELEASING AG that is reported as equity under IFRS

Notes to the Condensed Interim Consolidated Financial Statements

Accounting Policies

The subject of these condensed interim consolidated financial statements (interim consolidated financial statements) as per September 30, 2015, is the GRENKELEASING AG and its subsidiaries (the Consolidated Group). These interim consolidated financial statements have been prepared in accordance with the applicable IFRS provisions for interim reporting as published by the IASB and adopted by the EU. These interim consolidated financial statements should be read in conjunction with the IFRS consolidated financial statements as per December 31, 2014.

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 in the paragraph below.

The condensed interim consolidated financial statements and the interim group management report as per September 30, 2015, have not been audited by the auditor.

Mandatory New Accounting Standards

In December 2013, various standards were amended ("Annual Improvements to IFRS; 2011 – 2013 Cycle"), in the context of the Annual Improvements Project to IFRS (AIP). This relates to IFRS 1 "First-time Adoption of International Financial Reporting Standards", IFRS 3 "Business Combinations", IFRS 13 "Fair Value Measurement" and IAS 40 "Investment Property". The amended standards clarify existing issues. The amended standards have no relevance for the accounting and measurement used for the condensed interim consolidated financial statements of GRENKELEASING AG since the issues either do not apply to the GRENKE Consolidated Group or have already been interpreted accordingly.

IFRIC 21 "Levies" provides guidelines on when to recognise a liability for a levy imposed by governments based on statutory regulations. IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment in accordance with the relevant legislation. Recognition of a liability only occurs when the obligating event occurs. The obligating event can occur progressively over a period of time so that the liability is recognised on a pro rata basis. Taxes (IAS "Income Taxes"), fines and other penalties, liabilities arising from emissions trading schemes, and other payments falling under the scope of other standards are not affected by this interpretation. The issue of IFRIC 21 has no material impact on the interim consolidated financial statements.

Use of Assumptions and Estimates

In preparing the consolidated financial statements, assumptions and estimates have been made which have had an effect on the recognition and carrying amounts of assets, liabilities, income, expenses, and contingent liabilities.

The estimates and underlying assumptions are subject to regular reviews. Changes to estimates are recognised prospectively and occurred in the following areas:

• Determination of impairments for non-performing lease receivables from terminated lease contracts or contracts 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
• Assessing the ongoing value of intangible assets

Lease receivables from terminated lease contracts or contracts in arrears are carried at nominal value less appropriate bad debt allowances. The amount of bad debt allowances is 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 that 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)

Impairment is assumed for categories 2 to 7 as the contracts have been terminated due to defaults in payment. The allowance rates continue to range between 5% and 100%. Estimated residual values are used to determine the present value of lease receivables. Lease receivables include non-guaranteed residual values as defined by 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 depending on the term of the lease, the residual values of additions up until the end of 2006, ranged between 11% and 15% of historical cost. In fiscal year 2007, due to the strengthening of forecasting capabilities for the statistical population, this allocation could be further divided into more detailed maturity groups. For additions from 2007 to 2008, the residual values range between 7.7% and 28.4% of historical cost depending upon the duration of the lease. The residual values for additions from January 1, 2009, to March 31, 2011, changed to values of between 6.5% and 28.4% and for additions from April 1, 2011, to December 31, 2014, to values of between 6.5% and 23.5%. Based on more recent calculations and as a result of the introduction of new maturity groupings for lease contract with terms exceeding 60 months, the residual values were reduced to values between 3.0% and 21.5% from January 1, 2015.

Proceeds are best estimated on the basis of statistical analyses. If the post-transaction recoverable amount is lower than expected (from sale and subsequent lease), the lease receivables are impaired. However, an increase in the recoverable amount remains unrecognised.

When performing impairment tests for measuring goodwill, certain assumptions are made regarding the underlying cash flows. This involves making assumptions as to future revenues and costs. Assumptions as to the future growth rates of the respective cash-generating unit are made on the basis of historical figures and historical income patterns that are projected into the future. These estimates and the underlying methodology may have a significant impact on the values determined. If significant assumptions differ from actual figures, impairments may have to be made in profit and loss in the future. Goodwill is tested for impairment once a year. An impairment test is also performed when circumstances indicate that an impairment has occurred. Beyond the annual impairment test, the cash-generating unit Leasing Czech Republic was tested for impairment in the second quarter of 2015. The trigger for the advanced impairment test was the unexpected decline in new business in this market. Consequently, new assumptions as to future revenues and costs were made. We refer to the information under item "Depreciation, Amortisation, and Impairment".

Lease Receivables

EURk	Sep. 30, 2015	Sep. 30, 2014
Changes in lease receivables from current contracts (performing lease receivables)
Balance at beginning of period	2,354,439	2,043,904
– Non-cash effective change during the period	0	–26
+ Cash effective change during the period	260,495	220,303
Lease receivables (current + non-current) from current contracts at end of period	2,614,934	2,264,181
Changes in lease receivables from terminated contracts / contracts in arrears
(non-performing lease receivables)
Gross receivables at beginning of period	223,257	217,110
– Accumulated valuation allowances at beginning of period	–121,598	–111,145
= Non-performing lease receivables at beginning of period	101,659	105,965
+ Additions to gross receivables during the period	39,854	39,742
– Disposals of gross receivables during the period	37,960	28,100
+ Disposal of accumulated valuation allowances during the period	25,840	15,942
– Addition of accumulated valuation allowances during the period	30,008	25,730
Non-performing lease receivables at end of period	99,385	107,820
Lease receivables (carrying amount, current and non-current) at beginning of period	2,456,098	2,149,869
Lease receivables (carrying amount, current and non-current) at end of period	2,714,319	2,372,001

Financial Liabilities

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

EURk	Sep. 30, 2015	Dec. 31, 2014
Financial liabilities
Current financial liabilities
Liabilities from the refinancing of the leasing business	606,451	607,923
ABS / ABCP related liabilities	101,294	170,268
Bonds, revolving facilities, debentures, and private placements	387,325	355,955
Committed development loans	37,974	16,846
Sales of receivables agreements	79,858	64,854
Current liabilities from deposit business	169,134	159,582
Current bank liabilities	2,326	11,814
thereof current account liabilities	1,219	10,900
Total current financial liabilities	777,911	779,319
Non-current financial liabilities
Liabilities from the refinancing of the leasing business	1,575,724	1,390,761
ABS / ABCP related liabilities	286,117	211,398
Bonds, debentures, and private placements	1,144,558	1,048,486
Committed development loans	56,994	41,709
Sales of receivables agreements	88,055	89,168
Non-current liabilities from deposit business	145,636	140,775
Non-current bank liabilities	0	344
Total non-current financial liabilities	1,721,360	1,531,880
Total financial liabilities	2,499,271	2,311,199

Structured Entities

The following consolidated structured entities were in place as per the reporting date: GOALS FINANCING 2009 LIMITED (GOALS 2009-1), Opusalpha Purchaser II Limited, Kebnekaise Funding Limited, CORAL PURCHASING Limited, FCT "GK" COMPARTMENT "G2" (FCT GK 2), and FCT "GK" COMPARTMENT "G3" (FCT GK 3). In the following, the consolidated structured entities initiated as asset-backed commercial paper (ABCP) programmes or ABS bonds are further explained.

ABS Bond

On February 4, 2010, an ABS bond amounting to EUR 160,000k was placed via the structured entity GOALS FINANCING 2009 LIMITED (GOALS 2009-1). The contracts with GOALS FINANCING 2009 LIMITED allow GRENKELEASING AG to sell further lease receivables on a revolving basis in the three years following the first sale and up to a maximum amount of EUR 300,000k. The interest rate is variable at three-month EURIBOR plus a spread ranging between 1.25% and 3.5% depending on the tranche.

The carrying amount of the total obligation was EUR 5,309k at the end of the reporting period (December 31, 2014: EUR 24,592k). As per October 15, 2015, GRENKELEASING AG exercised its repurchase right contained in the contracts with GOALS FINANCING 2009 LIMITED and repurchased the outstanding receivables.

ABCP Programmes

The GRENKE Consolidated Group has several asset-backed commercial paper programmes (ABCPs) with a total volume of EUR 593,333k as per the end of the reporting period. The following is an overview of the programmes as per the end of the reporting period:

ABCP Programme/	Initiating	Refinanceable	Programme volume EURk	Programme volume EURk
Structured Entities	Bank	lease receivables	as per Sep. 30, 2015	as per Dec. 31, 2014
		German and Austrian lease
Opusalpha Purchaser II Limited	HeLaBa	receivables	100,000	100,000
		German and French lease
Kebnekaise Funding Limited	SEB AB	receivables	110,000	110,000
CORAL PURCHASING Limited	DZ BANK	German lease receivables	150,000	150,000
(FCT GK 2)/
Elektra Purchase No. 25 Limited	UniCredit	French lease receivables	100,000	100,000
(FCT GK 3)/
Regency Assets Limited	HSBC	French lease receivables	133,333	133,333
Total			593,333	593,333

The ABCP programmes grant the 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 backed by the organising bank in the form of a liquidity commitment in the corresponding amount.

The programme commitments for the ABCP programmes have the following terms: Kebnekaise Funding Limited until November 2015; CORAL Purchasing Limited until September 2016; Elektra Purchase No. 25 Limited until July 2016; Opusalpha Purchaser II Limited until February 2016 and Regency Assets Limited until March 2017.

As per the reporting date, 76.3% (December 31, 2014: 69.7%) of the refinancing framework of the ABCP programmes was utilised.

Sales of Receivables Agreements

Sales of receivables agreements are currently in place with Stadtsparkasse Baden-Baden Gaggenau, Sparkasse Karlsruhe, UBS AG in Switzerland, the Commerzbank subsidiary mBank S.A. in Poland, and DZ BANK AG Poland Branch, as well as with Norddeutsche Landesbank for receivables in the UK. The existing agreements allow for revolving sales of new receivables up to a maximum amount of the following: Stadtsparkasse Baden-Baden Gaggenau EUR 15,000k; Sparkasse Karlsruhe EUR 10,000k; UBS AG CHF 50,000k; mBank S.A. PLN 50,000k; and Norddeutsche Landesbank GBP 80,000k. The agreement with DZ BANK AG Poland Branch is in its redemption phase, i.e., no new receivables are being sold using this vehicle.

Bonds, Debentures and Private Placements

Five new bonds have been issued so far this fiscal year: on March 6 (EUR 24,000k), March 26 (EUR 30,000k), April 27 (EUR 30,000k), May 21 (EUR 20,000k), and September 7 (EUR 12,200k). Additionally, twelve new promissory note loans were launched with a total volume of EUR 109,000k and CHF 38,400k, respectively.

In the current fiscal year, two bonds with volumes of EUR 100,000k and EUR 75,000k were redeemed as scheduled. In addition, promissory note loans totalling EUR 82,917k and CHF 3,600k were redeemed.

Development Loans

NRW.Bank

Since 2010, GRENKELEASING AG, GRENKE BANK AG, and NRW.Bank, the development bank of the state of North Rhine-Westphalia, have had a cooperation agreement in place. This cooperation presents a new opportunity for incorporating public development funding into lease financing. The development loans are available exclusively for investment plans of commercial enterprises and members of self-employed professions with annual sales of up to EUR 500 million and located in North Rhine-Westphalia.

In the reporting period, new loans totalling EUR 22,500k were issued and loans with a total volume of EUR 5,937k were redeemed.

Thüringer Aufbaubank

On January 16, 2012, September 27, 2013, and April 2, 2015, GRENKELEASING AG and GRENKE BANK AG entered into a cooperation agreement with Thüringer Aufbaubank (TAB), the development bank of the state of Thuringia, similar to the agreement with NRW.Bank. The development loans are available exclusively for investment plans of commercial enterprises and members of self-employed professions with annual sales of up to EUR 500 million and located in Thuringia.

In the reporting period, new loans totalling EUR 2,500k were drawn down and loans with a total volume of EUR 2,083k were redeemed.

Investitionsbank Berlin

On June 6, 2012, and on May 30, 2014, GRENKELEASING AG and GRENKE BANK AG also entered into a cooperation agreement with Investitionsbank Berlin (IBB), the development bank of Berlin. The development loans are available exclusively for investment plans of commercial enterprises and members of self-employed professions with annual sales of up to EUR 500 million and located in Berlin.

In the reporting period, new loans totalling EUR 5,000k were issued and loans with a total volume of EUR 1,145k were redeemed.

LfA Förderbank Bayern

On January 30, 2013, GRENKELEASING AG and GRENKE BANK AG have established a further cooperation agreement with LfA Förderbank Bayern by means of a global loan in the amount of EUR 25,000k. Through this collaboration, small and medium-sized enterprises and self-employed professionals located in Bavaria can access development funds for investments via leasing. The development loans are available exclusively for investment plans of commercial enterprises and members of self-employed professions with annual sales of up to EUR 500 million and located in Bavaria. The loan was drawn down for the first time in the amount of EUR 10,000k on June 11, 2014, with a term of four years.

In the reporting period, additional new loans totalling EUR 10,000k were issued and loans with a total volume of EUR 2,500k were redeemed.

ILB Investitionsbank des Landes Brandenburg

On May 29, 2015, GRENKELEASING AG and GRENKE BANK AG established a cooperation agreement with ILB Investitionsbank des Landes Brandenburg by means of a global loan in the amount of EUR 5,000k. Through this collaboration, small and medium-sized enterprises and self-employed professionals located in Brandenburg can access development funds for investments via leasing. The development loans are available exclusively to investment plans of commercial enterprises, members of self-employed professions and special-purpose associations under public law with annual sales of up to EUR 500 million, as well as to local authorities located in Brandenburg

This loan has not yet been drawn down.

KfW

In cooperation with KfW, GRENKE BANK AG offers the nationwide "ERP-Startgeld" for business start-ups and young enterprises. Hereby, KfW provides both low-interest loans and 80% exemption from liability for the firm's bank. The maximum permitted loan amount is limited to EUR 100k each.

Landeskreditbank Baden-Württemberg – Förderbank (L-Bank)

Since the beginning of 2011, GRENKE BANK AG has also been offering the business development programme "Startfinanzierung 80" in Baden-Württemberg in addition to the business start-up programme "KfW-Startgeld" of KfW-Mittelstandsbank. The programme targets business start-ups and is jointly offered by L-BANK and Bürgschaftsbank Baden-Württemberg. Whereas L-BANK offers low-interest loans, Bürgschaftsbank provides 80% guarantees.

Revolving Credit Facility

In the context of five revolving credit facilities with a total volume of EUR 125,000k available to GRENKE FINANCE Plc., Dublin/Ireland and partially to GRENKELEASING AG, Zurich, Switzerland, the GRENKE Consolidated Group has the possibility to take on short-term funds at any time with a minimum amount of EUR 5,000k (or CHF 1,500k) and a term of usually one month.

The facility with HSBC with a volume of EUR 15,000k was prolonged at the beginning of July 2015 and will run until the end of June 2016. The facility with Nord LB with a volume of EUR 20,000k was prolonged in March 2015 and will run until March 2016. The facilities with SEB, Deutsche Bank, and DZ BANK which have been in place for several years have a volume of EUR 30,000k each and have the following terms: SEB until March 2016, Deutsche Bank until September 2016, and DZ BANK until October 2016.

As per September 30, 2015, the revolving credit facilities were utilised in the amount of EUR 45,000k and CHF 0k (previous year as per December 31, 2014: EUR 30,000k and CHF 4,500k).

In September 2015, GRENKELEASING Sp. Z.o.o. Poland and SEB concluded an agreement for a facility amounting to PLN 25,000k. This agreement provides the option to raise funds at any time on a revolving basis and on short notice. The minimum amount is PLN 1,000k and the terms are fixed at three years. The financing commitment will remain in place until September 2016. If the financing commitment is not prolonged in September 2016, the current individual drawings will not need to be repaid ahead of schedule.

Money Market Trading

GRENKE FINANCE Plc., Dublin/Ireland and GRENKELEASING AG Switzerland have a non-committed money market facility for a total collective amount of EUR 25,000k from Bayerische Landesbank.

A further money market facility in the amount of EUR 10,000k is in place with Commerzbank AG.

As per September 30, 2015, these credit lines were utilised in an amount of EUR 25,000k and CHF 0k (previous year as per December 31, 2014: EUR 25,000k and CHF 3,500k). The amount of utilisation is reported in current liabilities from the refinancing of the leasing business.

Commercial Papers

The GRENKE Consolidated Group has the option of issuing commercial paper of up to a total volume of EUR 250,000k with a term of between 1 and 364 days. In the reporting period, a total amount of EUR 219,500k was redeemed as scheduled and an amount of EUR 336,000k was issued. As per September 30, 2015, the commercial paper programme was utilised in an amount of EUR 142,500k (previous year as per December 31, 2014: EUR 26,000k).

Equity

Additional Equity Components

On July 22, GRENKELEASING AG issued an unsecured, subordinated hybrid bond (non-cumulative, indefinite Additional Tier 1, known as an AT1 bond or hybrid capital) with a nominal volume of EUR 30,000k and an interest coupon of 8.25%. The interest payment for this bond is based on its nominal value and is fixed for the period from the day of issuance until the first possible early redemption day. Thereafter, the interest rate will be newly determined for periods of five years each. Interest payments can be omitted, in full or in part, and are non-cumulative. Interest payments in subsequent years will not be increased to make up for any omitted interest payments occurring in prior years. The bonds have an indefinite maturity and can be called by GRENKELEASING AG with effect as per the first possible early redemption day and thereafter at five year intervals. The bonds can also be called prematurely, subject to certain conditions. The bonds are subject to the terms and conditions detailed in the respective prospectus, which include – among others – that GRENKELEASING AG can call the bonds only in full and not in part, to the extent certain regulatory or tax reasons exist. Any premature call of the bonds requires the approval of the relevant regulatory authority.

The redemption and nominal amount of the bonds may be reduced upon the occurrence of a triggering event. If GRENKE Consolidated Group's Tier 1 core capital ratio falls below 5.125%, this would constitute such a triggering event. In the case of a triggering event, the bonds may be appreciated, subject to certain conditions.

Disclosures on Financial Instruments

Fair Value Hierarchy

The GRENKE Consolidated Group uses observable market data, as far as possible, for determining the fair value of an asset or a liability. The fair values are assigned to different levels in the valuation hierarchy based on the input parameters used in the valuation methods:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
• Level 2: measurement procedures in which all input factors having a significant effect on the recognition of fair value are directly or indirectly observable in the market;
• Level 3: measurement procedures that use input factors that have a significant effect on the fair value recognised and are not based on observable market data.

If the input factors used to determine the fair value of an asset or a liability may be assigned to different levels in the valuation hierarchy, then the measurement at fair value is completely assigned to that level in the valuation hierarchy which corresponds to the lowest input factor that is material for the overall measurement.

The GRENKE Consolidated Group recognises reclassifications between the different levels of the valuation hierarchy at the end of the reporting period in which the change has occurred. In the reporting period, there were no reclassifications between the three levels of the valuation hierarchy.

Reclassifications are recognised at the time changes in the input factors occur that are relevant for the classification in the fair value hierarchy.

Fair Value of Financial Instruments

Fair value of derivative financial instruments

At the end of the reporting period, all derivative financial instruments, which include interest rate derivatives (interest rate swaps) and forward exchange contracts, are carried at fair value in the GRENKE Consolidated Group. All derivative financial instruments are assigned to level 2 of the valuation hierarchy.

	Fair value	Carrying amount	Fair value	Carrying amount
EURk	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2014
Financial Assets
Interest rate derivatives without hedging
relationship	0	0	297	297
Forward exchange contracts	1,187	1,187	812	812
Total	1,187	1,187	1,109	1,109
Financial Liabilities
Interest rate derivatives with hedging
relationship	84	84	9	9
Interest rate derivatives without hedging
relationship	0	0	315	315
Forward exchange contracts	3,447	3,447	4,259	4,259
Total	3,531	3,531	4,583	4,583

Fair value of primary financial instruments

The following table presents the carrying amounts and fair values of financial assets and financial liabilities by category of financial instruments that are not measured at fair value. The table does not contain information on the fair value of financial assets and financial liabilities if the carrying amount represents an appropriate approximation to the fair value. This includes the following line items of the statement of financial position: cash and cash equivalents, trade receivables, non-performing lease receivables, and trade payables. All primary financial instruments are assigned to level 2 of the valuation hierarchy except for exchange-listed bonds that are included in refinancing liabilities and which are assigned to level 1 of the valuation hierarchy. As per the reporting date, the carrying amount of exchange-listed bonds was EUR 974,200k (previous year as per December 31, 2014: EUR 1,006,000k) and their fair value amounted to EUR 962,312k (previous year as per December 31, 2014: EUR 1,032,929k). All financial assets are allocated to the loans and receivables measurement category except for performing lease receivables. All financial liabilities are allocated to the other financial liabilities measurement category.

	Fair value	Carrying amount	Fair value	Carrying amount
EURk	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2014
Financial assets
Lease receivables (performing)	2,900,441	2,614,934	2,612,422	2,354,439
Other financial assets	110,946	108,277	92,667	90,530
Financial liabilities
Refinancing liabilities	2,213,546	2,182,175	2,027,409	1,998,648
Liabilities from deposit business	318,537	314,771	300,547	300,357
Bank liabilities	2,326	2,326	12,155	12,158

Measurement Methods and Input Factors Used

The following table shows the applied measurement methods, the input factors used and the assumptions made for measuring fair value:

Type and level	Measurement method	Input parameters
Fair value hierarchy Level 1
Exchange-listed bonds	n/a	Quoted market price as per the reporting date
Fair value hierarchy Level 2
Other financial assets	Discounted present value of estimated	Available interest rates at comparable conditions and
	future cash flows	residual terms using the counterparty's credit risk
Financial liabilities (liabilities from the	Discounted present value of estimated	Available interest rates at comparable conditions and
refinancing of the leasing business,	future cash flows	residual terms using the own credit risk (Debt Value
promissory note loans, bank liabilities)		Adjustment [DVA])
Forward exchange contracts	Market-to-market	Available interest rates at the end of the term in the
	Discounted present value of estimated	traded currencies using the own counterparty risk
	future cash flows	(Debt Value Adjustment [DVA]) or the counterparty's
		credit risk (CVA [Credit Value Adjustment]) derived
		from available credit default swap (CDS) quotes
Interest rate derivatives	Net present value model	Available interest rates at comparable conditions and
	Discounted present value of estimated	residual terms using the own counterparty risk DVA
	future cash flows	(Debt Value Adjustment) or the counterparty's credit
		risk CVA (Credit Value Adjustment) derived from
		available credit default swap (CDS) quotes

Depreciation, Amortisation and Impairment

As per June 30, 2015, the goodwill of the cash-generating unit Leasing Czech Republic, which represents the leasing business in the Czech Republic, was fully impaired, amounting to an impairment loss of EUR 703k. The indication for the goodwill impairment was the unexpected decline in new business in this market.

Selling and Administrative Expenses (Not Including Staff Costs)

The Consolidated Group's investment in information technology (IT) resulting from IT project costs that cannot be capitalised, is reported separately within selling and administrative expenses. These expenses arise in particular through projects for the process optimisation of the central and standardised IT processes as a result of the involvement of external expertise.

EURk	Jan. 1 – Sep. 30, 2015 Jan. 1 – Sep. 30, 2014
IT project costs	3,195	1,920

Income Taxes

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

EURk	Jan. 1 – Sep. 30, 2015 Jan. 1 – Sep. 30, 2014
Income taxes
Current tax expense	16,980	16,206
Deferred taxes	4,136	946
Income tax expense	21,116	17,152

Consolidated Group Segment Reporting

EURk	Leasing segment		Banking segment		Factoring segment		Total segments				Consolidation effects Consolidated Group
January to September	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
Operating segment income	158,128	131,421	9,865	10,149	2,738	1,841	170,731	143,411	0	0	170,731	143,411
Segment result	73,342	57,883	7,166	7,655	214	349	80,722	65,887	0	0	80,722	65,887
Reconciliation to consoli dated financial statements
Operating result											80,722	65,887
Other financial income											83	–404
Taxes											21,116	17,152
Net profit according to consolidated income
statement											59,689	48,331
As per Sep. 30 (prev. year: Dec. 31, 2014)
Segment assets	3,153,006	2,810,407	579,959	476,522	29,535	25,904	3,762,500	3,312,833	–548,659	–420,692	3,213,841	2,892,141
Reconciliation to consoli
dated financial statements
Tax assets											33,553	32,809
Total assets according to
consolidated statement of
financial position											3,247,394	2,924,950
Segment liabilities	2,654,169	2,384,591	493,786	394,265	22,125	21,065	3,170,080	2,799,921	–548,659	–420,692	2,621,421	2,379,229
Reconciliation to consoli
dated financial statements
Tax liabilities											57,196	52,735
Liabilities according to
consolidated statement of
financial position											2,678,617	2,431,964

Business Segments

GRENKE Consolidated Group's reporting on the development of its segments is aligned along its prevailing organisational structure. Thus, operating segments are divided into Leasing, Banking, and Factoring based on the management of the Company's segments. A regional split of business activities is provided on a yearly basis as part of GRENKE's consolidated financial statements for each fiscal year. Separate financial information is available for the three 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 disposal of used equipment.

The Banking segment comprises the activities of GRENKE BANK AG, which regards itself as a financing partner, particularly to small- and medium-sized enterprises. 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. In addition, GRENKE BANK AG supports the refinancing of GRENKE Consolidated Group's leasing business through intra-group purchases of lease receivables.

The Factoring segment contains the activities of GRENKEFACTORING GmbH and GRENKEFACTORING AG, Switzerland, which was acquired in the previous year. Both entities perform traditional factoring services focussing on small-ticket factoring.

Segment Data

The accounting policies employed to gather segment information are the same as those used for the consolidated financial statements as per December 31, 2014. Intragroup transactions are performed at standard market prices.

The Board of Directors of GRENKELEASING AG is responsible for assessing the performance of the GRENKE Consolidated Group. In addition to new business volume (Leasing and Factoring segments) and contribution margin 2 for the Leasing segment, the key performance indicators are defined as operating segment income, segment result before other net financial income, and staff costs. Other net financial income, as well as income tax expenses/income, represents the main components of the consolidated income statement that are not allocated to individual segments.

The segment information was calculated as follows:

• Operating segment income consists of net interest income after settlement of claims and risk provision, profit from insurance business, profit from new business, and profit from disposals.
• The segment result is calculated as the operating result before taxes.
• Segment assets comprise of the operating assets excluding tax assets.
• Segment liabilities correspond to the liabilities attributable to the respective segment with the exception of tax liabilities.

Acquisitions

Acquisitions in Fiscal Year 2014

The purchase price allocation for GRENKELOCATION SARL, Munsbach/Luxembourg (formerly GCLUX Location S.à.r.l.), which was acquired in the previous year, was finalised in the first quarter of 2015. No changes were made to the preliminary fair values of the assets or liabilities.

The purchase price allocation for GRENKEFACTORING AG, Basel/Switzerland, which was also acquired in the previous year, led to a change in the assumptions during the reporting period. Therefore, goodwill was reduced retrospectively by EUR 66k. The previous year's figures were adjusted accordingly.

For more detailed information regarding business combinations in the previous year, please refer to the Notes to the Company's consolidated financial statements as per December 31, 2014.

Acquisitions in Fiscal Year 2015

GC Leasing d.o.o., Ljubljana/Slovenia

By way of a purchase agreement dated March 5, 2015, GRENKELEASING AG acquired 100% of the shares and voting rights in GC Leasing d.o.o., Ljubljana /Slovenia and control was assumed on March 31, 2015. In the meantime, the company has been renamed GRENKELEASING d.o.o.

Prior to the acquisition, GC Leasing d.o.o., Ljubljana /Slovenia was active within GRENKELEASING AG's franchise system specialising in the sale of small-ticket leases with a strong focus on IT and IT equipment. Since not all of the relevant information needed for determining the final purchase price allocation is 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 at the date of acquisition of the company: intangible assets EUR 3,575k, lease receivables EUR 241k, other assets EUR 655k, deferred tax assets EUR 62k, deferred tax liabilities EUR 660k and other liabilities EUR 999k. Intangible assets are largely attributable to non-contractual relationships of resellers with clients and non-competitive clauses. Of the lease receivables with a gross amount of EUR 412k, an amount of EUR 171k is impaired and is not expected to be recovered. Other liabilities include intra-group liabilities and consist of a risk allocation (EUR 745k) and a current liability (EUR 73k). The intra-group liabilities were eliminated as a result of the consolidation and, therefore, are not reported in the consolidated statement of financial position. The deferred tax liabilities resulted from the revaluation and identification of assets in the course of the purchase price allocation. The purchase price allocation that is still preliminary resulted in goodwill of EUR 5,106k that is expected to be not tax deductible. Goodwill includes intangible assets that could not be separately identified such as employees and expected synergy 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. As a result of the first-time consolidation as per the reporting date, there was no impact on the consolidated net income. The total consideration paid for the business combination amounted to EUR 7,980k and consisted solely of cash. The cash acquired with the business combination amounted to EUR 271k. All costs related to the acquisition were recognised in profit and loss.

Dividend Payment

On May 12, 2015, the Annual General Meeting adopted the resolution on the appropriation of GRENKELEASING AG's unappropriated surplus for fiscal year 2014 in the amount of EUR 16,530,911.12. The Annual General Meeting approved the proposal of the Board of Directors and the Supervisory Board, resolving to appropriate the unappropriated surplus as follows:

Unappropriated surplus for 2014	EUR 16,530,911.12
Distribution of a dividend of EUR 1.10 per share for a total of 14,754,199 no-par value shares	EUR 16,229,618.90
Profit carryforward (to new account)	EUR 301,292.22

The dividend was paid to the shareholders of GRENKELEASING AG on May 13, 2015.

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 2013 as follows:

Unappropriated surplus for 2013	EUR 14,790,501.93
Distribution of a dividend of EUR 1.00 per share for a total of 14,700,000 no-par value shares	EUR 14,700,000.00
Profit carryforward (to new account)	EUR 90,501.93

The dividend was paid to the shareholders of GRENKELEASING AG on May 6, 2014.

Related Party Disclosures

In the 2013 fiscal year, the Supervisory Board of GRENKELEASING AG concluded a phantom stock agreement with Board of Directors members Mr. Gilles Christ, Mr. Jörg Eicker, Mr. Mark Kindermann, and Ms. Antje Leminsky.

Under this agreement, Mr. Gilles Christ, Mr. Jörg Eicker, and Mr. Mark Kindermann (for fiscal years 2013, 2014, and 2015), and Ms. Antje Leminsky (for fiscal years 2013 and 2014) each have entitlements to payments (tranche) equal to the increase in value of 15,000 shares, 30,000 shares, 4,000 shares, and 15,000 shares, respectively, in GRENKELEASING AG in relation to a defined basic share price. The 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 the years 2012 and 2013 was EUR 52.01 and EUR 73.13, respectively. The maximum payment amount arising from this agreement is limited to EUR 300,000, EUR 600,000, EUR 100,000, and EUR 300,000 for the three tranches. This maximum payment applies to the respective agreement in its entirety, i.e., the total payment for all three tranches may not exceed the maximum payment amount. If an annual tranche exceeds the maximum total entitlement and the agreement is still in force for several more years (tranches), then no further claims can be acquired in the future. The participants in the programme are required to invest the respective net amount paid plus a personal contribution of 25% of that amount in GRENKELEASING AG shares. The Company is entitled but not required to render the payment, in whole or in part, in shares rather than in cash for one or more tranches. In this case, the personal contribution is not applicable. The shares are subject to a vesting period of four years.

As a result of this limitation, the maximum payment amount for the entire Board of Directors has already been reached as per December 31, 2014. For the year 2014, an amount totalling EUR 12k was paid out under the phantom stock agreement in the first quarter of 2015. Further payments will not be made due to the maximum utilisation of this programme.

Contingent Liabilities

GRENKELEASING AG, as guarantor for individual franchise companies, has granted financial guarantees of EUR 38.0 million (previous year as per December 31, 2014: EUR 43.9 million).

Employees

In the interim reporting period, the GRENKE Consolidated Group had an average of 917 employees (previous year as per September 30, 2014: 838), not including the Board of Directors. A further 25 employees (previous year as per September 30, 2014: 28) are in training.

Events after the Balance Sheet Date

As per October 15, 2015, GRENKELEASING AG exercised its repurchase right contained in the contracts with GOALS FINANCING 2009 LIMITED and repurchased the outstanding receivables with a nominal amount of EUR 18,343k.

Calendar of Events

February 10, 2016	Publication of Annual Financial Report 2015
April 28, 2016	Publication of Financial Report for the 1st Quarter of 2016
May 3, 2016	Annual General Meeting, Baden-Baden
July 28, 2016	Publication of Financial Report for the 2nd Quarter and Half-Year of 2016
October 28, 2016	Publication of Financial Report for the 3rd Quarter and the First Nine Months of 2016

Contact Information

Renate Hauss Corporate Communications

Phone: +49 7221 5007-204 Fax: +49 7221 5007-4218

Email: investor@grenke.de

Figures in this annual financial report are usually presented in thousands and millions of euro. Differences in individual figures compared to the actual numbers may arise due to rounding. 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.

Headquarters GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden Germany

Phone: +49 7221 5007-204 Fax: +49 7221 5007-4218 E-mail: investor@grenke.de

www.grenke-group.com