Grenke AG — Interim / Quarterly Report 2015

Jul 28, 2015

GRENKELEASING AG Group

Financial Report for the 2nd Quarter and the First Half-Year 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
Changes in the Governing Bodies	15
Report on Risks, Opportunities and Forecasts	15
Responsibility Statement	17
Condensed Interim Consolidated Financial Statements	18
Consolidated Income Statement	18
Consolidated Statement of Comprehensive Income	19
Consolidated Statement of Financial Position	20
Consolidated Statement of Cash Flows	22
Consolidated Statement of Changes in Equity	24
Notes to the Condensed Interim Consolidated Financial Statements	25
Auditor's Review Report	41
Calendar of Events and Contact Information	42

Key Figures GRENKE Group

	Jan. 1, 2015 to		Jan. 1, 2014 to
	Jun. 30, 2015	Change (%)	Jun. 30, 2014	Unit
New business GRENKE Group Leasing	637,720	14.7	555,766	EURk
– of which international	469,856	14.4	410,655	EURk
– of which franchise international	12,368	104.1	6,059	EURk
– of which Germany	155,496	11.8	139,052	EURk
Western Europe (without Germany)*	216,698	13.5	190,940	EURk
Southern Europe*	158,970	20.4	132,078	EURk
Northern / Eastern Europe*	95,687	8.2	88,455	EURk
Other regions*	10,869	107.4	5,241	EURk
New business GRENKE Group Factoring	145,096	52.9	94,927	EURk
– of which Germany	54,974	13.9	48,252	EURk
– of which international	70,245	108.1	33,759	EURk
– of which franchise international	19,877	53.9	12,916	EURk
GRENKE Bank
Deposits	312,632	23.1	253,945	EURk
New business start-up financing	7,489	38.2	5,417	EURk
Contribution margin 2 (CM2) on new business
GRENKE Group Leasing	120,003	13.6	105,619	EURk
– of which international	95,899	13.2	84,704	EURk
– of which franchise international	2,248	78.3	1,261	EURk
– of which Germany	21,856	11.2	19,654	EURk
Western Europe (without Germany)*	43,596	14.3	38,141	EURk
Southern Europe*	34,290	16.6	29,396	EURk
Northern / Eastern Europe*	18,300	5.5	17,343	EURk
Other regions*	1,961	80.7	1,085	EURk
Further information leasing business
Number of new contracts	77,121	12.2	68,763	units
Share of IT products in lease portfolio	82	–2.4	84	percent
Share of corporate customers in lease portfolio	100	0.0	100	percent
Mean acquisition value	8.3	2.5	8.1	EURk
Mean term of contract	48	0.0	48	months
Volume of leased assets	3,810	16.5	3,270	EURm
Number of current contracts	458,420	15.2	397,979	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
	Jun. 30, 2015	Change (%)	Jun. 30, 2014	Unit
Key figures income statement
Net interest income	91,423	22.5	74,641	EURk
Settlement of claims and risk provision	28,860	16.3	24,810	EURk
Profit from insurance business	23,587	20.8	19,525	EURk
Profit from new business	24,816	7.1	23,181	EURk
Gains (+) / losses (–) from disposals	–32	–104.4	732	EURk
Other operating income	2,753	33.4	2,063	EURk
Cost of new contracts	17,160	11.6	15,374	EURk
Cost of current contracts	5,134	14.7	4,477	EURk
Project costs and basic distribution costs	20,124	7.1	18,788	EURk
Management costs	13,955	21.9	11,450	EURk
Other costs	4,775	35.2	3,531	EURk
Operating result	52,539	26	41,712	EURk
Other interest income (expense)	–5	–105.5	91	EURk
Income / expenses from fair value measurement	18	–68.4	57	EURk
EBT (earnings before taxes)	52,562	26.1	41,678	EURk
Net profit	38,480	23.4	31,182	EURk
Earnings per share (according to IFRS)	2.61	23.1	2.12	EUR
Further Information
Dividends	1.10	10.0	1.00	EUR
Embedded value, leasing contract portfolio
(incl. equity before taxes)	810	13.4	714	EURm
Embedded value, leasing contract portfolio
(incl. equity after taxes)	737	14.3	645	EURm
Economic result (after taxes)*	58	16.0	50	EURm
Cost / income ratio	53.8	–3.9	56.0	percent
Return on equity (ROE) after taxes	14.8	8.8	13.6	percent
Average number of employees	909	9.7	829	employees
Staff costs	30,431	14.6	26,546	EURk
– of which total remuneration	24,967	15.4	21,637	EURk
– of which fixed remuneration	18,607	12.6	16,530	EURk
– of which variable remuneration	6,360	24.5	5,107	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,

After completing a strong first quarter, we are pleased to report to you today on the continuation of that successful performance during the second quarter and first half of the current fiscal year. The new business volume of GRENKE Group Leasing increased by 15 percent, and that of GRENKE Group Factoring even climbed by 53 percent. With this growth, we are well on our way to achieving the year's targets and will even exceed the targets for our Factoring segment.

A large portion of this growth resulted from our home market of Germany and the high demand in our international markets in. We reported double-digit growth in Germany despite continued intense competition in the area of small-ticket IT leasing. The international share or new business remained above 70 percent. We also had tremendous success internationally with our factoring products and more than doubled our new business volume in comparison to the previous year. Once again, this performance shows the advantages of our targeted diversification in terms of the regions we operate and the products we offer. This diversification also helps us to avoid an interruption in our growth from any temporary slowdowns in individual markets. We are also able to maintain our contribution margin 2 in our leasing business at a constant and favourable level. In the first half year, our CM2 margin was 18.8 percent after a level of 19.0 percent in the first six months of the prior year.

Due to the positive business performance we experienced in recent quarters, earnings were also at a very satisfying level. Among others, earnings were also supported by an absolute decline compared to the first quarter in expenses for the settlement of claims and risk provision as well as by the continued favourable environment for refinancing. This led to our achievement of a rise of 23 percent in GRENKE Consolidated Group's net profit in the first half year to a total of EUR 38.5 million. Therefore, we are increasing our previous forecast for the current fiscal year for a net profit in the range of EUR 71 to 75 million for the GRENKE Consolidated Group to a net profit between EUR 74 and 78 million.

Our share price in the first half of the year also reflects the success of our value-creating business model. In the past six months, the share price has risen an impressive 45 percent. We are proud of this performance. And in order to communicate events more directly, more timely and more comprehensively to you, our shareholders, we converted our nopar value shares to registered shares with the approval of the Annual General Meeting on May 12, 2015. This conversion took effect on July 10, 2015. By all means, this conversion does not affect your legal status as shareholders. Your investment in our company remains unchanged as do your related rights. Details of this conversion have been summarised for you in the chapter "The GRENKELEASING AG Share" on page 5 of this report.

In closing, on behalf of the entire Board of Directors, I would like to thank again Dieter Münch and Prof. Dr. Thilo Wörn, whose retirement from the Supervisory Board took effect with the close of the Annual General meeting, for their very successful and always constructive cooperation over the past several years. And, I would also like to welcome our new Supervisory Board members Tanja Dreilich and Dr. Ljiljana Mitic. We look forward to working together.

Baden-Baden, July 2015

Wolfgang Grenke Chairman of the Board of Directors

The GRENKELEASING AG Share

The current geopolitical conflicts and trouble spots around the world continued to have a limited impact on the global financial markets in the second quarter of 2015. The European capital markets profited from the QE programme of the European Central Bank, which included monthly bond purchases of EUR 60 billion. Investors were also preoccupied with the possible reversal in interest rates by the US Federal Reserve, the growing possibility at that time of a Greek default and the significant correction in the Chinese stock market.

This also affected the German DAX index, which reached a record high of 12,375 points in the second quarter, but still ended up forfeiting nine percent by the end of the quarter. The DAXsector Financial Services sector index, which also includes the shares of GRENKELEASING AG, developed similarly. The SDAX price index, however, achieved better performance and rose a total of one percent in the second quarter.

The shares of GRENKELEASING AG were unfazed by the subdued development of the benchmark indices and the shares continued their upward trend. Starting the trading year at a price of EUR 88.99, GRENKELEASING AG shares climbed 45 percent during the first half of the year. Reaching a record high of EUR 131.15 per share on the second to the last trading day in the second quarter of 2015, the share price had a rise of 20 percent in the quarter.

Conversion to Registered Shares

On May 12, 2015, the Annual General Meeting of GRENKELEASING AG resolved the conversion of the existing bearer shares into registered shares. Through the custody account and stock exchange conversion, which took place on July 10, 2015 after the stock market's close, we aim to communicate with our shareholders in a more targeted and personal manner in the future. The conversion will not change the legal status of the shareholders provided they are listed in the share register. The shareholders' investment in our company also remains unchanged as do their related rights.

Since July 13, 2015, the shares of GRENKELEASING AG have been listed as no-par value registered shares in the regulated market of all domestic stock exchanges as well as in the regulated market subsection with additional post-admission obligations (the Prime Standard) on the Frankfurt Stock Exchange. With the conversion, the ISIN and the securities identification number (Wertpapierkennnummer ["WKN"]) have changed as follows:

• ISIN: DE000A161N30
• WKN: A161N3

The ticker symbol "GLJ" has remained unchanged.

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 entry into new regional markets both in and outside of Europe and for expanding our business using new financing products. GRENKELEASING AG ("the Company") does not hold interests in the legally independent companies of its franchisees. Accordingly, this interim group 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.

Our business model is straightforward, sustainable and value-oriented. The origins of the GRENKE Group lie in lease financing for smaller IT products (small-ticket-IT-leasing). Today we are one of the leading European companies in the field of financial services for small and medium enterprises (SMEs). We enter into new countries and continents step-by-step as part of our global expansion strategy. After entering a country, we increase our market presence continuously through cell divisions or by opening new locations. This approach puts us in a position to generate high growth for several years regardless of the respective local economic developments. For example, in our home market of Germany, we are seeing increasing success in smaller cities and are uncovering new potential. During the first quarter of the current fiscal year, we opened a new location in Bielefeld (Germany) and Malmö (Sweden) and in the reporting quarter we added new locations in Regensburg (Germany) and in Newport (Great Britain). We also acquired the company of our franchise partner in Slovenia in the course of the first quarter.

When pursuing growth, our aim is not to avoid risk but to assess it as correctly as possible and apply adequate margins. We focus on countries with favourable competitive environments and attractive risk-reward profiles. This approach is how we sufficiently hedge existing and potential risks. Our long-standing proven and continually refined IT-based model for forecasting losses plays a central role before the conclusion of every contract. This model also represents a significant growth driver, a fact that was evident during the recent financial and sovereign debt crises. During this time, many vendors were forced to scale back their involvement in small-ticket IT leasing or even withdraw from the market altogether because the risk situation became unmanageable. For us, however, this development presents us with a number of attractive opportunities to systematically strengthen and expand our position as a leading provider of efficient services.

Beyond our regional diversification, we are continuously expanding our product range and our offers for financial solutions. In addition to various financing, investment and payment products provided by GRENKE BANK AG ("GRENKE Bank"), we are also participating in the "lease guarantee" programmes of the German guarantee banks and are continuing the "Mikrokreditfonds Deutschland" programme throughout Germany that was granted by the Federal Ministry of Labour and Social Affairs. We also cooperate with the portal "Weltsparen". Finally, together with a growing number of development banks of individual German states and the federal government, GRENKE Bank also finances business start-ups and provides development funds for business investments that are financed through leasing. Since 2012, a total of 14,989 lease contracts has been concluded as part of these collaborations. During the reporting quarter, we added a cooperation with the Investitionsbank des Landes Brandenburg (the investment bank of the State of Brandenburg). As part of the first global loan, a total of EUR 5 million is available at favourable conditions for small- and medium-sized companies and members of self-employed professions who finance business investments through leasing.

The purchase of lower-volume receivables (factoring) in various European countries is also a permanent and steadily growing offer in our extensive product range.

Our diversification in terms of regions, products and industries limits our strategic risk. The broad diversification of our portfolios across customers and industries and the comparably low average volumes of our contracts are typical in our line of business. We try to avoid cluster risks also in terms of our sales partners, and we remain independent of any one manufacturer with respect to our IT products. And finally, we rely on the ongoing expansion of our already broad range of refinancing instruments so that we can always take advantage of a variety of options when financing our growth.

Macroeconomic and Sector-Specific Environment

Traditionally, GRENKE Group's new business growth is relatively unaffected by the overall economic cycle. We are able to achieve profitable growth in both good economic times and in times of economic difficulty. We minimise the influence of the overall development in corporate insolvencies on our loss ratio using our sophisticated method for forecasting losses. What have a significant influence on our growth are industry trends such as the business policies of banks and financial service providers active in the leasing, factoring and deposit businesses. Our growth is also affected by the continually rising statutory requirements in our sector that usually provide us with relative competitive advantages due to our highly efficient operating processes. Any changes in the capital market or central bank interest rates that impact our refinancing costs are passed on to our customers by way of the conditions of our contracts. Such changes do not affect current contracts due to the matching terms of our refinancing. Nevertheless, the time gap needed to adjust our conditions can temporarily have a 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 to be able to react to the various changes in the market or in expected interest rate developments.

New business

Following a good start in the first quarter, we continued to develop strongly and our new business growth for the first six months of the current fiscal year remained high. As a result, in the first six months of 2015, the new business at GRENKE Group Leasing – that is the total of the acquisition costs of newly purchased lease assets – grew 15 percent compared to the first six months of 2014 to EUR 637.7 million. New business in our highly penetrated and very competitive home market of Germany generated strong double-digit growth once again amounting to twelve percent. We continue to grow the international share of our new business, which amounted to 72 percent in the first six months of this fiscal year after amounting to 71 percent in the first six months of the previous year and 66 percent in the first half of 2013.

In Western Europe (without Germany), we achieved new business volume of EUR 216.7 million in the first six months following EUR 190.9 million in the comparable period of the previous year. This is equivalent to an increase of 14 percent. We were particularly successful in Switzerland and our core market France where our leasing new business climbed twenty-nine and nine percent, respectively. The new business in our southern European markets also grew significantly rising 20 percent from EUR 132.1 million in the comparable period of the previous year to EUR 159.0 million. In Northern/Eastern Europe, our leasing new business increased eight percent year-on-year. We continued to experience stronger-than-average growth in our other regions. In these countries, which are still relatively new for us, we increasingly steered our management towards growth without altering our risk assessment. In the six-month period, the new business volumes in these countries more than doubled (+107 percent). In absolute terms, new business volumes in these countries totalled EUR 10.9 million following EUR 5.2 million in the previous year.

In the first six months of the current fiscal year, the number of lease applications amounted to 177,691 and led to the conclusion of 77,121 new lease contracts. These numbers represent a conversion rate of 43 percent. A total of 145,088 of these applications stemmed from our international markets and, in turn, generated 61,089 new lease contracts. The international conversion rate of 42 percent was very close to the total conversion rate for the Company but still significantly below the rate of 49 percent generated in the German market. The mean acquisition value per lease contract was EUR 8,269 following EUR 8,082 in the first six months of the previous year.

Our new business continues to maintain its high profitability. 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 by 14 percent from EUR 105.6 million in the previous year to EUR 120.0 million in the current year. The CM2 margin was 18.8 percent and only slightly below the previous year's level of 19.0 percent.

GRENKE Group Factoring also demonstrated strong performance. The Factoring segment's new business volume soared 53 percent from EUR 94.9 million in the comparable prior year's period to EUR 145.1 million in the first six months of the 2015 fiscal year. High demand in our international markets, where we realised growth of 108 percent, was a strong contributor to Factoring's growth in new business volume. In Germany, we achieved satisfactory and stable growth of 14 percent in comparison to the previous year. The Factoring segment's income margin of 1.45 percent was below the previous year's level of 1.95 percent. This margin is based on an average period for a factoring transaction of roughly 35 days in Germany (first half of 2014: roughly 31 days) and approximately 38 days internationally (first half of 2014: roughly 40 days).

Through GRENKE Bank's collaboration with development banks, our banking business generated 38 percent growth in business start-up financing compared to the comparable period of the previous year, increasing from EUR 5.4 million as per December 31, 2014 to currently EUR 7.5 million. Deposit volumes at GRENKE Bank also rose sharply by 23 percent from EUR 253.9 million as per December 31, 2014, to EUR 312.6 million as per the June 30, 2015, reporting date. Growth was driven by the refinancing requirement for the growing new business and our liquidity management.

Prev. year as per 30/06: Germany 29.4%; Western Europe (without Germany) 34.2%; Southern Europe 20.1%; Northern / Eastern Europe 15.5%; Other regions 0.8%

	(as against the comparable period of 2014)	Growth rates in new business of GRENKE Group Leasing as per June 30, 2015
30%					107.4
20%			20.4
10%	11.8	13.5		8.2
0%
	Germany	Western Europe (without Germany)	Southern Europe	Northern / Eastern Europe	Other regions

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 30/06: Germany –5.7%; Western Europe (without Germany) +18.8%; Southern Europe +26.9%; Northern / Eastern Europe +24.1%; Other regions –51.8%

Report on the Results of Operations

Selected information from the consolidated income statement

	Apr. 1, 2015 to	Apr. 1, 2014 to
EURk	Jun. 31, 2015	Jun. 31, 2014
Net interest income	46,943	38,415
Settlement of claims and risk provision	13,921	12,967
Net interest income after settlement of claims and risk provision	33,022	25,448
Profit from insurance business	12,326	10,109
Profit from new business	13,004	12,080
Gains (+) / losses (–) from disposals	–765	381
Income from operating business	57,587	48,018
Staff costs	15,398	13,462
Of which total remuneration	12,656	10,906
Of which fixed remuneration	9,426	8,330
Of which variable remuneration	3,230	2,576
Selling and administrative expenses (excluding staff costs)	12,650	11,176
Of which IT project costs	1,190	636
Earnings before taxes	27,568	22,394
Net profit	20,077	16,677
Earnings per share (basic/diluted, in EUR)	1.36	1.13

During the second quarter of the current 2015 fiscal year, we were able to continue the successful performance achieved in the first three months of the year. This development was mainly driven by the continued favourable interest rate environment and by the profitable new business generated in previous quarters from which income is successively accruing as the contracts progress. GRENKE Consolidated Group's net interest income rose by 22 percent in the reporting quarter compared to last year's quarter as a result of higher interest income from financing business and lower interest expenses on refinancing.

Expenses for the settlement of claims and risk provision were within the usual quarterly range of fluctuation and rose seven percent in comparison to the previous year's quarter. The percentage increase in this item was significantly lower than the rise in net interest income and even declined in absolute terms in comparison to the first quarter of 2015. The Consolidated Group's loss rate amounted to 1.5 percent after 1.6 percent in the second quarter of 2014. As a result, net interest income after settlement of claims and risk provision saw a pleasing increase of 30 percent in comparison to the previous year.

Profit from insurance business and profit from new business also developed positively increasing year-on-year by 22 percent and 8 percent, respectively. Both benefited from the high level of new business growth. 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 20 percent.

Expenses developed similarly to income. Staff costs, as well as selling and administrative expenses, were 14 and 13 percent higher, respectively. The reason for this rise was the higher number of employees attained in the course of acquiring former franchise partners and higher consulting costs incurred in preparation for our pending market entries. Other operating expenses increased 37 percent compared to the second quarter of 2014 and other operating income rose 59 percent. In absolute terms, both other operating expenses, as well as other operating income, remain insignificant for our overall earnings performance.

On balance, the operating result increased to EUR 27.6 million after EUR 22.5 million in the previous year's period. This represents a rise of 23 percent. Earnings before taxes also increased 23 percent. Due to a virtually unchanged tax rate, the reporting quarter's net profit achieved an increase from EUR 16.7 million to EUR 20.1 million. This result corresponds to earnings per share of EUR 1.36 following earnings per share of EUR 1.13 in the second quarter of the prior fiscal year.

Half-Year Comparison 2015 versus 2014

The information above pertaining to the quarter under review also essentially applies to the six-month period.

Net interest income in the first half year improved by 22 percent to EUR 91.4 million compared to EUR 74.6 million in the previous year. The rise in expenses for the settlement of claims and risk provision was disproportionately low in the first half-year period. This item increased by 16 percent year-on-year from EUR 24.8 million in the previous year to EUR 28.9 million in the six-month period. The loss rate was at a level of 1.5 percent following the 1.55 percent reported in the first six months of the prior year. Net interest income after settlement of claims and risk provisions rose accordingly by 26 percent from EUR 49.8 million to EUR 62.6 million.

Income from operating business grew from EUR 93.3 million to EUR 110.9 million and included higher profits from insurance business and new business as well as break-even gains/losses from disposals. This represents an increase of 19 percent. With the disproportionate rise in expenses, the operating result climbed 26 percent and reached a level of EUR 52.5 million after EUR 41.7 million in the previous year's period.

Overall, we were able to improve our cost-income ratio, or the ratio of income and expenses, during the first half of the year. Whereas in the previous year period we had reached a value of 56.0 percent, the ratio in the reporting period amounted to 53.8 percent. This performance underscores the profitability of our business.

Earnings before taxes were similarly strong and, at EUR 52.6 million, exceeded the previous year's level of EUR 41.7 million by 26 percent. Net profit amounted to EUR 38.5 million after EUR 31.2 million in the prior year and represents an increase of 23 percent. This corresponds to earnings per share of EUR 2.61 following earnings per share of EUR 2.12 in the first half 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 in accordance with the management of the business areas in the Leasing, Banking and Factoring segments. 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 of the GRENKE Consolidated Group essentially also applies to this segment. Accordingly, the operating segment income of the Leasing segment climbed strongly by 20 percent in the first six months of the current fiscal year to EUR 102.5 million from EUR 85.3 million in the previous year. The segment result grew faster than segment income, increasing 30 percent from EUR 36.5 million in the previous year to EUR 47.5 million. The Factoring segment also experienced strong growth in operating segment income, rising 80 percent to EUR 1.8 million from EUR 1.0 million in the comparable period of the previous year. The segment result of EUR 0.2 million remained at the level of the previous year due to continued higher staff costs and expenses incurred in preparation for future growth. The Banking segment reported results slightly below the previous year's level. Operating segment income declined by five percent from EUR 7.0 million in the previous year's period to EUR 6.7 million in the reporting period. The segment result amounted to EUR 4.8 million after EUR 5.3 million in the previous year's period.

Report on Financial Position and Net Assets

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

EURk	Jun. 30, 2015	Dec. 31, 2014
Current assets	1,267,502	1,179,316
thereof cash and cash equivalents	110,577	88,395
thereof lease receivables	944,756	876,781
Non-current assets	1,890,127	1,745,634
thereof lease receivables	1,707,261	1,579,317
Total assets	3,157,629	2,924,950
Current liabilities	988,868	849,974
thereof financial liabilities	851,306	779,319
Non-current liabilities	1,648,388	1,581,990
thereof financial liabilities	1,597,096	1,531,880
Equity	520,373	492,986
Equity ratio in percent	16.5	16.9
Total liabilities and equity	3,157,629	2,924,950
	Jan. 1, 2015 to	Jan. 1, 2014 to
	Jun. 31, 2015	Jun. 31, 2014
Cash flow from operating activities	73,913	–29,316
Net cash flow from operating activities	60,396	–36,524
Cash flow from investing activities	–10,293	–8,968
Cash flow from financing activities	–16,143	–11,114
Total cash flow	33,960	–56,606

The following discussion on net assets of the GRENKE Consolidated Group is based on the June 30, 2015, reporting date. Comparative prior year figures and percentage changes are based on the amounts at the end of the previous fiscal year as per December 31, 2014. These figures and percentages will be referred to as "the previous year" or "previous year's figure" in the following discussion.

The earnings growth is also reflected in the balance sheet of the GRENKE Consolidated Group as per the June 30, 2015, reporting date. In comparison to the previous year, total assets grew eight percent to clearly above EUR 3 billion. The Consolidated Group's equity increased by six percent. As a result, the equity ratio as per the reporting date was 16.5 percent, or slightly below the previous year's value of 16.9 percent but still above our long-term target of 16 percent.

The current and non-current lease receivables increased eight percent in the first half year. As the largest single position on the balance sheet, current and non-current lease receivables had a share in total assets of 84 percent as per the reporting date (previous year: 84 percent). As per June 30, 2015, the Consolidated Group's cash and cash equivalents were 25 percent above the comparable level of the previous year as a result of a cash proceeds from the high level of new business from previous periods, which provided us with us continued sufficient liquidity. Whereas current financial assets declined ten percent compared to the previous year, non-current financial assets rose 31 percent. On the equity and liabilities side of the balance sheet, total current liabilities increased 16 percent, and total non-current liabilities grew four percent. As a result of reporting date-related factors, there was a rise in the Consolidated Group's deferred lease payments and pensions. Deferred lease payments rose 2.1 times over the level of the previous year. The 37 percent rise in pensions was due to the current low level of interest rates.

In the course of fine-tuning our refinancing structure, we placed four new bonds in the first half-year amounting to EUR 104.0 million. In addition, we issued five new promissory note loans in the amount of CHF 28.4 million and EUR 20.0 million, respectively. Moreover, in line with our goal of avoiding excess liquidity when possible, we issued only smaller volumes of our diverse instruments. These instruments included 13 commercial paper issues in February, March, May and June of 2015 that had a combined volume of EUR 127.5 million. At 66 percent, the utilisation of our Asset-Backed Commercial Paper Programme (ABCP) as per the reporting date of June 30, 2015, was below the prior year's comparable level of 70 percent. Deposits at GRENKE Bank are another key component of our refinancing, which grew by EUR 12.3 million to EUR 312.6 million in comparison to the end of fiscal year 2014 as a result of our liquidity management. All three pillars of our extensive mix of refinancing instruments were efficiently employed as per the June 30, 2015, reporting date. The largest share, amounting to 61 percent, consisted of instruments belonging to the category of "senior unsecured". Instruments contained in the category "asset-based" amounted to 22 percent and deposits at GRENKE Bank comprised 17 percent.

Cash flow from operating activities totalled EUR 73.9 million in the first half year. Based on earnings before taxes of EUR 52.6 million, there were cash outflows originating primarily from the refinancing of lease receivables (EUR 195.7 million), the granting of loans to franchisees and an increase in other assets of a net EUR 7.5 million. Cash inflows amounted to a total of EUR 203.4 million and resulted mainly from a change in refinancing liabilities, the deposit business and deferred lease payments. Additional proceeds stemmed from the other liabilities item and amounted to EUR 11.7 million. After taxes and interest paid and received, the net cash flow from operating activities amounted to EUR 60.4 million following EUR –36.5 million in the first six months of the previous year.

Cash flow from investing activities in the first half year was EUR –10.3 million following EUR –9.0 million in the previous year. This item mainly consists of payments for the purchase of operating and office equipment as well as intangible assets amounting in total to EUR 2.6 million. Cash flow from investing activities also includes a further cash outflow of EUR 7.7 million for the acquisition of the former franchise company in Slovenia in the first quarter of 2015.

Total cash flows amounted to EUR 34.0 million in the six-month period in comparison to EUR –56.6 million in the previous year and also included cash flow from financing activities, which contained the net assumption of bank liabilities in the amount of EUR 0.1 million and the dividend payment of EUR –16.2 million.

Changes in the Governing Bodies

The term of office for two Supervisory Board members, Dieter Münch and Prof. Dr. Thilo Wörn, ended with the close of the Annual General Meeting on May 12, 2015. The Board of Directors and Supervisory Board thank them for their contributions and tremendous commitment. Florian Schulte and Erwin Staudt were reelected by the Annual General Meeting for a further four-year term. Tanja Dreilich and Dr. Ljiljana Mitic were newly elected to the Supervisory Board, for the same four-year term. Following these new appointments, the proportion of women in GRENKELEASING AG's Supervisory Board amounted to one-third.

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 presented in the 2014 annual financial report continue to be relevant. New fundamental risks or risks of particular importance have not arisen. As in the previous fiscal year, we believe the opportunities for our development in the 2015 fiscal year outweigh the risks that are inherent in our business model.

The demand for lease financing, as measured by the number of incoming applications described in the chapter on new business, remains high. Therefore, our focus is clearly placed on growing our new business and systematically increasing it while at the same time attaining risk appropriate margins. We aim to drive our future organic growth by adding new locations, branches and franchise partners and by penetrating new regional sales markets as well as expanding our range of financial services. We are not exposed to substantial individual risks due to the broad diversification of our business.

Particularly in recessive periods, we experience rising losses that have a significant influence on our earnings development. Currently, economic developments are positive in most of the countries we operate in. However, given the larger number of countries we now operate in, there are individual countries experiencing a contrary trend. 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 pillar of our business model. We rely on assessing 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 developed further. 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 in particular to possible risk clusters and overall interdependencies.

In terms of refinancing the portfolio of lease receivables, the amount of interest rate risk is limited. Refinancing liabilities are hedged using derivatives to the extent that they carry variable interest rates. With new business, however, risks can occur from changes in interest rates and spreads. Therefore, the potential time lag it takes to pass on a change in interest rates to customers may have a temporary influence on the profitability of the new business. The European Central Bank has recently once again reaffirmed its current low interest rate policy. In the US, the Federal Reserve is currently switching from what has been a very expansive monetary to a more restrictive monetary policy, which could lead to an interest rate hike. A hike could result in the euro's continued weakness, which is already visible. Nevertheless, this will not have a noticeable effect on the business of the GRENKE Consolidated Group because for the Consolidated Group companies and franchisees operating outside of the eurozone, from an outstanding financing volume of roughly EUR 1,000k, a corresponding hedge is provided for. In terms of lease refinancing, Switzerland, Brazil, Chile, Poland and Great Britain are confronted with currency risk to just a limited extent since in those countries lease refinancing agreements are made in the local currencies. In addition, payments are secured in the context of 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 always provided 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 place successfully new issues such as promissory note loans, commercial paper and ABS bonds in all types of market situations, optimised for our needs. In addition, our access to bank deposits through GRENKE Bank offers us an attractive source of refinancing that we can use with a high degree of flexibility.

Forecasts

After a very good start to the year, we are also very pleased with the performance of the first six months. The growth in new business of 15 percent at GRENKE Group Leasing remains at the upper end of our full-year forecast range of 11 to 15 percent. New business at our Factoring segment developed significantly better than was expected at the beginning of the year. With an increase of 53 percent, by the end of the first half year, this segment grew more than twice as fast as the 20 percent to 24 percent increase expected. This rate of expansion continues to clearly exceed our long-term target for the GRENKE Group of ten percent growth per year. After an increase of 23 percent in the GRENKE Consolidated Group's net profit in the first six months of the year, we are on track to exceed our previous full-year earning's target of EUR 71 million to 75 million. Therefore, we are raising our forecast for the current year and now expect net profit in the range of EUR 74 million to 78 million. After a substantial increase in net profit of 38 percent last year, net profit in the 2015 fiscal year is expected to grow accordingly by a further 14 to 20 percent.

In the future, we will continue to follow our proven and successful business strategy. We focus on those markets in which we can achieve the appropriate margins for the amount of risk assumed and thus secure the profitability of the GRENKE Consolidated Group. This strategy allows us to take specific advantage of the different developments of the various markets in which we operate. We are also undertaking a targeted expansion of our market presence. We are prepared for further cell divisions and entries into new markets during the 2015 fiscal year that will include Singapore, which will also represent our entry into a new continent.

Responsibility Statement

We hereby confirm to the best of our knowledge, and in accordance with the accounting standards to be used for interim reporting, that the interim consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Consolidated Group. Furthermore, the interim Group management report conveys a fair review of the development of the business, including the results and the position of the Consolidated Group, together with a description of the important opportunities and risks for the expected development of the Consolidated Group for the remainder of the fiscal year.

Condensed Interim Consolidated Financial Statements

Consolidated Income Statement

	3-month report		6-month report
	Apr. 1, 2015 to	Apr. 1, 2014 to	Jan. 1, 2015 to	Jan. 1, 2014 to
EURk	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest and similar income from financing business	59,186	51,948	116,438	102,240
Expenses from interest on refinancing and deposit business	12,243	13,533	25,015	27,599
Net interest income	46,943	38,415	91,423	74,641
Settlement of claims and risk provision	13,921	12,967	28,860	24,810
Net interest income after settlement of claims and risk provision	33,022	25,448	62,563	49,831
Profit from insurance business	12,326	10,109	23,587	19,525
Profit from new business	13,004	12,080	24,816	23,181
Gains(+) / losses (–) from disposals	–765	381	–32	732
Income from operating business	57,587	48,018	110,934	93,269
Staff costs	15,398	13,462	30,431	26,546
Depreciation and impairment	2,456	1,437	3,947	2,932
Selling and administrative expenses (not including staff costs)	12,650	11,176	24,173	22,440
Other operating expenses	1,000	582	2,597	1,702
Other operating income	1,502	1,094	2,753	2,063
Operating result	27,585	22,455	52,539	41,712
Expenses / income from fair value measurement	8	22	18	57
Other interest income	51	26	160	134
Other interest expenses	76	109	155	225
Earnings before taxes	27,568	22,394	52,562	41,678
Income taxes	7,491	5,717	14,082	10,496
Net profit	20,077	16,677	38,480	31,182
Of which, attributable to:
non-controlling interests	0	–3	0	–3
shareholders of GRENKELEASING AG	20,077	16,680	38,480	31,185
Earnings per share (basic) in EUR	1.36	1.13	2.61	2.12
Earnings per share (diluted) in EUR	1.36	1.13	2.61	2.12
Average number of shares outstanding (basic)	14,754,199	14,732,758	14,754,199	14,716,469
Average number of shares outstanding (diluted)	14,754,199	14,732,758	14,754,199	14,716,469

Consolidated Statement of Comprehensive Income

	3-month report		6-month report
	Apr. 1, 2015 to	Apr. 1, 2014 to	Jan. 1, 2015 to	Jan. 1, 2014 to
EURk	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net profit	20,077	16,677	38,480	31,182
Items that may be reclassified to profit and loss in future periods
Appropriation to / reduction of hedging reserve (before taxes)	10	–57	–29	–36
Income taxes	–1	6	3	4
Appropriation to / reduction of hedging reserve (after taxes)	9	–51	–26	–32
Change in currency translation differences (before taxes)	188	432	5,851	621
Income taxes	0	0	0	0
Change in currency translation differences (after taxes)	188	432	5,851	621
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)	–900	–403	–900	–403
Income taxes	212	94	212	94
Appropriation to / reduction of reserve for actuarial
gains and losses (after taxes)	–688	–309	–688	–309
Other comprehensive income	–491	72	5,137	280
Total comprehensive income	19,586	16,749	43,617	31,462
Of which, attributable to:
non-controlling interests	0	0	0	0
shareholders of GRENKELEASING AG	19,586	16,749	43,617	31,462

Consolidated Statement of Financial Position

EURk	Jun. 30, 2015	Dec. 31, 2014
Assets
Current assets
Cash and cash equivalents	110,577	88,395
Financial instruments that are assets	79	768
Lease receivables	944,756	876,781
Other current financial assets	53,821	59,816
Trade receivables	4,267	4,793
Lease assets for sale	8,251	8,756
Tax assets	11,561	10,940
Other current assets	134,190	129,067
Total current assets	1,267,502	1,179,316
Non-current assets
Lease receivables	1,707,261	1,579,317
Financial instruments that are assets	0	341
Other non-current financial assets	40,191	30,714
Property, plant, and equipment	40,995	40,411
Goodwill	62,506	57,285
Other intangible assets	17,630	14,264
Deferred tax assets	20,406	21,869
Other non-current assets	1,138	1,433
Total non-current assets	1,890,127	1,745,634
Total assets	3,157,629	2,924,950

Consolidated Statement of Financial Position

EURk	Jun. 30, 2015	Dec. 31, 2014
Liabilities and equity
Liabilities
Current liabilities
Financial liabilities	851,306	779,319
Liability financial instruments	6,616	3,506
Trade payables	17,000	9,821
Tax liabilities	7,613	7,043
Deferred liabilities	9,624	10,312
Current provisions	1,887	1,887
Other current liabilities	12,512	11,214
Deferred lease payments	82,310	26,872
Total current liabilities	988,868	849,974
Non-current liabilities
Financial liabilities	1,597,096	1,531,880
Liability financial instruments	1,341	1,077
Deferred tax liabilities	45,439	45,692
Pensions	4,511	3,281
Non-current provisions	1	60
Total non-current liabilities	1,648,388	1,581,990
Equity
Share capital	18,859	18,859
Capital reserves	116,491	116,491
Retained earnings	377,639	355,389
Other components of equity	7,384	2,247
Total equity attributable to shareholders of GRENKELEASING AG	520,373	492,986
Non-controlling interests	0	0
Total equity	520,373	492,986
Total liabilities and equity	3,157,629	2,924,950

Consolidated Statement of Cash Flows

		Jan. 1, 2015 to	Jan. 1, 2014 to
EURk		Jun. 30, 2015	Jun. 30, 2014
	Earnings before taxes	52,562	41,678
	Non-cash items contained in earnings and reconciliation to cash flow from
	operating activities
+	Depreciation and impairment	3,947	2,932
– / +	Profit / loss from the disposal of property, plant, and equipment and intangible assets	10	7
– / +	Net income from non-current financial assets	–5	91
– / +	Other non-cash effective income / expenses	4,984	103
+ / –	Increase / decrease in deferred liabilities, provisions, and pensions	480	660
–	Additions to lease receivables	–654,674	–575,309
+	Payments by lessees	507,882	439,018
+	Disposals / reclassifications of lease receivables at residual carrying amounts	94,737	83,627
–	Interest and similar income from leasing business	–114,044	–100,851
+ / –	Decrease / increase in other receivables from lessees	–1,508	1,184
+ / –	Currency translation differences	–28,070	–5,339
=	Change in lease receivables	–195,677	–157,670
+	Addition to liabilities from refinancing	454,682	943,521
–	Payment of annuities to refinancers	–348,848	–171,063
–	Disposal of liabilities from refinancing	–11,762	–715,471
+	Expenses from interest on refinancing and on deposit business	25,015	27,599
+ / –	Currency translation differences	16,602	3,444
=	Change in refinancing liabilities	135,689	88,030
+ / –	Increase / decrease in liabilities from deposit business	12,274	–1,692
– / +	Increase / decrease in loans to franchisees	–7,052	–2,052
	Changes in other assets / liabilities
– / +	Increase / decrease in other assets	–412	11,403
+ / –	Increase / decrease in deferred lease payments	55,438	–19,047
+ / –	Increase / decrease in other liabilities	11,675	6,241
=	Cash flow from operating activities	73,913	–29,316

continued on next page

Consolidated Statement of Cash Flows

		Jan. 1, 2015 to	Jan. 1, 2014 to
EURk		Jun. 30, 2015	Jun. 30, 2014
– / +	Income taxes paid / received	–13,522	–7,117
–	Interest paid	–155	–225
+	Interest received	160	134
=	Net cash flow from operating activities	60,396	–36,524
–	Payments for the acquisition of property, plant, and equipment and intangible assets	–2,648	–3,269
– / +	Payments / proceeds from acquisition of subsidiaries	–7,709	–5,846
+	Proceeds from the sale of property, plant, and equipment and intangible assets	64	147
=	Cash flow from investing activities	–10,293	–8,968
+ / –	Borrowing / repayment of bank liabilities	87	–470
+	Proceeds from cash capital increase	0	0
–	Dividend payments	–16,230	–10,644
=	Cash flow from financing activities	–16,143	–11,114
	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	–931	–66
=	Cash funds after currency translation	76,564	109,272
	Cash funds at end of period Cash in hand and bank balances	110,577	53,381
–	Bank liabilities from overdrafts	–53	–715
=	Cash and cash equivalents at end of period	110,524	52,666
	Change in cash and cash equivalents during the period (= total cash flow)	33,960	–56,606
	Net cash flow from operating activities	60,396	–36,524
+	Cash flow from investing activities	–10,293	–8,968
+	Cash flow from financing activities	–16,143	–11,114
=	Total cash flow	33,960	–56,606

Consolidated Statement of Changes in Equity

							Total equity
			Retained				attributable to
			earnings /		Reserve for		shareholders	Non
	Share	Capital	Consolidated net	Hedging	actuarial gains /	Currency	of GRENKE	controlling	Total
EURk	capital	reserves	profit	reserve	losses	translation	LEASING AG	interests	equity
Equity as per
Jan. 1, 2015	18,859	116,491	355,389	–7	–920	3,174	492,986	--	492,986
Total comprehensive
income	--	--	38,480	–26	–688	5,851	43,617		43,617
Dividend payment
in 2015 for 2014	--	--	–16,230	--	--	--	–16,230	--	–16,230
Equity as per
Jun. 30, 2015	18,859	116,491	377,639	–33	–1,608	9,025	520,373		520,373
Equity as per
Jan. 1, 2014 before
adjustment	18,790	112,757	306,064	–57	–438	2,346	439,462	--	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 comprehensive
income	--	--	31,185	–32	–309	621	31,465	–3	31,462
Dividend payment
in 2014 for 2013	--	--	–14,700	--	--	--	–14,700	--	–14,700
Capital increase
(Shares issued from
Scrip Dividend)	69	3,734	--	--	--	--	3,803	--	3,803
Changes in the
scope of consolida
tion	--	--	--	--	--	--	--	–42	–42
Transactions with
shareholders	--	--	–1,049	--	--	--	–1,049	45	–1,004
Equity as per
Jun. 30, 2014	18,859	116,491	321,458	–89	–747	2,967	458,939	--	458,939

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 June 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 June 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. 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 which are set up with a view to risk.

The following table lists the processing categories:

Category	Description
0	Current contract not in arrears
1	Current contract in arrears
2	Terminated contract with serviced instalment agreement
3	Terminated contract (recently terminated or court order for payment applied for)
4	Legal action (pending or after objection to court payment order)
5	Order of attachment issued / Debt-collecting agency commissioned
6	Statement in lieu of oath (applied for or issued) and insolvency proceedings instituted but not completed
7	Derecognised
8	Being settled (not terminated)
9	Discharged (completely paid)

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. Non-guaranteed residual values are used to calculate lease receivables in accordance with the definition in IAS 17. Estimated residual values comprise anticipated sales proceeds and any revenues generated in a renewal period. They are determined on the basis of past experience and statistical methods.

Based on experience and 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 term 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 which 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 the future in profit and loss. 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. 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	Jun. 30, 2015	Jun. 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	194,170	158,855
Lease receivables (current + non-current) from current contracts at end of period	2,548,609	2,202,733
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	29,674	22,105
– Disposals of gross receivables during the period	27,621	19,275
+ Disposal of accumulated valuation allowances during the period	19,461	10,594
– Addition of accumulated valuation allowances during the period	19,765	14,497
Non-performing lease receivables at end of period	103,408	104,892
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	2,652,017	2,307,625

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	Jun. 30, 2015	Dec. 31, 2014
Financial liabilities
Current financial liabilities
Liabilities from the refinancing of the leasing business	695,587	607,923
ABS / ABCP related liabilities	112,121	170,268
Bonds, revolving facilities, debentures, and private placements	482,876	355,955
Committed development loans	28,303	16,846
Sales of receivables agreements	72,278	64,854
Current liabilities from deposit business	154,331	159,582
Current bank liabilities	1,397	11,814
thereof current account liabilities	53	10,900
Total current financial liabilities	851,306	779,319
Non-current financial liabilities
Liabilities from the refinancing of the leasing business	1,438,795	1,390,761
ABS / ABCP related liabilities	225,652	211,398
Bonds, debentures, and private placements	1,071,149	1,048,486
Committed development loans	56,950	41,709
Sales of receivables agreements	85,044	89,168
Non-current liabilities from deposit business	158,301	140,775
Non-current bank liabilities	0	344
Total non-current financial liabilities	1,597,096	1,531,880
Total financial liabilities	2,448,402	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 9,450k at the end of the reporting period (December 31, 2014: EUR 24,592k).

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 Jun. 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 2015; 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, 66.3% (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; DZ BANK AG Poland Branch PLN 50,000k; Norddeutsche Landesbank GBP 80,000k.

Bonds, Debentures and Private Placements

Four 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) and May 21 (EUR 20,000k). Additionally, five new promissory note loans were launched in the first half of 2015: on January 29 (CHF 9,600k), March 26 (EUR 10,000k), March 30 (CHF 8,800k), June 12 (CHF 10,000k). Furthermore, a promissory note loan that matured on June 15 (EUR 10,000k) was prolonged.

On March 9, 2015, a bond with a volume of EUR 75,000k was redeemed as scheduled. Moreover, promissory note loans totalling EUR 20,833k and CHF 1,600k 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 15,000k were issued and loans with a total volume of EUR 3,125k 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, no new loans were drawn down and loans with a total volume of EUR 1,458k 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 833k 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 4 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 2015, and DZ BANK until October 2015.

As per June 30, 2015, the revolving credit facilities were utilised in the amount of EUR 90,000k and CHF 0k (previous year as per December 31, 2014: EUR 30,000k and CHF 4,500k).

Money Market Trading

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

Further money market facilities in the amount of EUR 10,000k each are in place with Norddeutsche Landesbank and Commerzbank AG.

As per June 30, 2015, these credit lines were utilised in an amount of EUR 32,000k 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 86,000k was redeemed as scheduled and an amount of EUR 127,500k was issued. As per June 30, 2015, the commercial paper programme was utilised in an amount of EUR 67,500k (previous year as per December 31, 2014: EUR 26,000k).

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 which 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	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Dec. 31, 2014
Financial Assets
Interest rate derivatives without hedging
relationship	0	0	297	297
Forward exchange contracts	79	79	812	812
Total	79	79	1,109	1,109
Financial Liabilities
Interest rate derivatives with hedging
relationship	42	42	9	9
Interest rate derivatives without hedging
relationship	0	0	315	315
Forward exchange contracts	7,915	7,915	4,259	4,259
Total	7,957	7,957	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 which 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 which 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 1,035,000k (December 31, 2014: EUR 1,006,000k) and their fair value amounted to EUR 1,054,883k (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	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Dec. 31, 2014
Financial assets
Lease receivables (performing)	2,829,618	2,548,609	2,612,422	2,354,439
Other financial assets	96,742	94,012	92,667	90,530
Financial liabilities
Refinancing liabilities	2,155,511	2,134,373	2,027,409	1,998,648
Liabilities from deposit business	317,746	312,632	300,547	300,357
Bank liabilities	1,397	1,397	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

Goodwill impairment losses of EUR 703k were recognised as per June 30, 2015, for the cash-generating unit Leasing Czech Republic, which represents the leasing business in the Czech Republic. 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 which 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 – Jun. 30, 2015	Jan. 1 – Jun. 30, 2014
IT project costs	1,652	1,104

Income Taxes

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

EURk	Jan. 1 – Jun. 30, 2015	Jan. 1 – Jun. 30, 2014
Income taxes
Current tax expense	13,378	11,217
Deferred taxes	704	–721
Income tax expense	14,082	10,496

Consolidated Group Segment Reporting

EURk	Leasing segment		Banking segment		Factoring segment		Total segments				Consolidation effects Consolidated Group
January to June	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
Operating segment income	102,507	85,257	6,652	7,025	1,775	987	110,934	93,269	0	0	110,934	93,269
Segment result	47,528	36,542	4,832	5,268	179	192	52,539	42,002	0	0	52,539	42,002
Reconciliation to consoli
dated financial statements
Operating result											52,539	42,002
Other financial income											23	–324
Taxes											14,082	10,496
Net profit according to
consolidated income
statement											38,480	31,182
As per June 30
(prev. year: Dec. 31, 2014)
Segment assets	3,041,230	2,810,407	533,921	476,522	30,027	25,904	3,605,178	3,312,833	–479,516	–420,692	3,125,662	2,892,141
Reconciliation to consoli
dated financial statements
Tax assets											31,967	32,809
Total assets according to
consolidated statement of
financial position											3,157,629	2,924,950
Segment liabilities	2,624,326	2,384,591	418,567	394,265	20,827	21,065	3,063,720	2,799,921	–479,516	–420,692	2,584,204	2,379,229
Reconciliation to consoli
dated financial statements
Tax liabilities											53,052	52,735
Liabilities according to
consolidated statement of
financial position											2,637,256	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, represent 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 voting shares 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 which is still preliminary resulted in goodwill of EUR 5,106k which is expected to be not tax deductible. Goodwill includes intangible assets which 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, Mr. Mark Kindermann, and Ms. Antje Leminsky each have entitlements to payments (tranche) for fiscal years 2013, 2014, and 2015 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 40.0 million (December 31, 2014: EUR 43.9 million).

Employees

In the interim reporting period, the GRENKE Consolidated Group had an average of 909 employees (previous year as per June 30, 2014: 829), not including the Board of Directors. A further 26 employees (previous year as per June 30, 2014: 29) are in training.

Events after the Balance Sheet Date

On July 22, GRENKELEASING AG issued a hybrid bond (non-cumulative, indefinite Additional Tier 1, known as AT1) to strengthen its equity. The total volume of this subordinated bond was EUR 30,000k and the interest coupon amounted to 8.25%.

Additionally, three bullet promissory note loans with a total volume of EUR 60,000k and a term of three years each were issued between July 9 and July 23, 2015. One existing promissory note loan with a volume of EUR 10,000k and initially maturing on July 25, 2015, was prolonged by three years. The interest coupons of each of the promissory note loans are below 1%.

Auditor's Review Report

To GRENKELEASING AG, Baden-Baden

We have reviewed the interim condensed consolidated financial statements, comprising the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash-flows, the statement of changes in equity and notes to the interim condensed consolidated financial statements, and the interim group management report of GRENKELEASING AG, Baden-Baden for the period from January 1 to June 30, 2015, which are part of the six-monthly financial report pursuant to Sec. 37w WpHG ["Wertpapierhandelsgesetz": German Securities Trading Act]. The preparation of the interim condensed consolidated financial statements in accordance with IFRSs [International Financial Reporting Standards] on interim financial reporting as adopted by the EU and of the group management report in accordance with the requirements of the WpHG applicable to interim group management reports is the responsibility of the Company's management. Our responsibility is to issue a report on the interim condensed consolidated financial statements and the interim group management report based on our review.

We conducted our review of the interim condensed consolidated financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the review to obtain a certain level of assurance in our critical appraisal to preclude that the interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IFRSs on interim financial reporting as adopted by the EU and that the interim group management report is not prepared, in all material respects, in accordance with the provisions of the WpHG applicable to interim group management reports. A review is limited primarily to making inquiries of company personnel and applying analytical procedures and thus does not provide the assurance that we would obtain from an audit of financial statements. In accordance with our engagement, we have not performed an audit and, accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IFRSs on interim financial reporting as adopted by the EU or that the interim group management report is not prepared, in all material respects, in accordance with the provisions of the WpHG applicable to interim group management reports.

Stuttgart, July 27, 2015

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Frey Brixner German Public Auditor German Public Auditor

GRENKELEASING AG Consolidated Group 42 Financial Report for the 2nd Quarter and Half-Year 2015

Calendar of Events

October 27, 2015 Publication of Financial Report for the 3rd Quarter and the First Nine Months of 2015

Contact Information

Renate Hauss Corporate Communications

Phone: +49 7221 5007-204

Fax: +49 7221 5007-4218

Email: investor@grenke.de

Figures in this 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