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GRENKE AG: Renewed strong increase in leasing new business

EQS-News: GRENKE AG / Key word(s): Miscellaneous GRENKE AG: Renewed strong increase in leasing new business 05.10.2022 / 07:03 CET/CEST The issuer is solely responsible for the content of this announcement. GRENKE: Renewed strong increase in leasing new business

• Leasing new business grows by 51.9% to EUR 565.5 million in Q3 2022 (Q3 2021: EUR 372.2 million)
• Contribution margin 2 (CM2) increases by 45.8% to EUR 92.7 million (Q3 2021: EUR 63.6 million)
• The Board of Directors raises annual forecast 2022 for leasing new business to EUR 2.1 to 2.3 billion

Baden-Baden, October 5, 2022: GRENKE AG, a global financing partner for small and medium-sized companies, once again significantly increased its leasing new business in the third quarter and, with EUR 565.5 million in leasing new business, exceeded the previous year’s quarter by 51.9% (Q3 2021: EUR 372.2 million). This marked the fourth consecutive quarter in which GRENKE achieved significant double-digit growth.

In light of the strong leasing new business growth generated to date, the Board of Directors has raised its 2022 annual forecast for leasing new business. GRENKE now expects the volume of leasing new business to be in the range of EUR 2.1 to 2.3 billion. This compares with the Board’s previous expectation of EUR 2.0 billion to EUR 2.2 billion.

“Our performance has been even better than expected, which is why we are raising our targets,” comments Michael Bücker, Chairman of the Board of Directors of GRENKE AG. “Since I took office just over a year ago, we have accelerated growth quarter after quarter – despite corona, supply bottlenecks and the energy crisis. The trend is now stable, and we have put GRENKE back on track!”

Dr Sebastian Hirsch, CFO of GRENKE AG, adds: “The cumulative new business is now already at the level achieved for the entire previous year. Once again this is proof of how robust our business is. Our customers invest, even now, to stay competitive. Rising interest rates and inflation make leasing the ideal instrument to realize these investments quickly while preserving their own liquidity.”

 

Strong double digit growth of leasing new business for four quarters

Leasing new business significantly increases across all regions

In the DACH region, GRENKE generated leasing new business of EUR 150.6 million in the reporting period, for an increase of 33.5% above the previous year’s level (Q3 2021: EUR 112.8 million). In Western Europe, without DACH, GRENKE recorded year-on-year growth in the third quarter of 50.7%. In the Southern Europe region, year-on-year growth was even more pronounced at 62.4%. At 70.2%, the strongest growth in the quarter was recorded in Northern and Eastern Europe. Other regions achieved a year-on-year increase of 62.2%.

Sharp rise in number of lease applications

With approximately 120,000 lease applications, GRENKE received significantly more lease applications in the reporting quarter than in the same quarter of the previous year (Q3 2021: approx. 100,000), marking a continued rise in the demand for leasing. GRENKE concluded a total of more than 65,000 new lease contracts during the reporting period. The conversion rate of 54.2% was above the level in the same prior-year quarter (Q3 2021: 48.5%) and within a customary range.

 
Robust contribution margin in leasing new business

 As a result of the strong leasing new business, the contribution margin 2 in Q3 2022 was 45.8% higher than the previous year’s level and totaled EUR 92.7 million (Q3 2021: EUR 63.6 million).

The CM2 margin reached a level of 16.4% in Q3 2022. The sequential increase in the CM2 margin (Q2 2022: 15.9%) reflected the successful adjustment in conditions amid a rising interest rate environment, accompanied by sharply higher level of leasing new business of EUR 565.5 million.

In comparison with the CM2 margin of 17.1% in Q3 2021, there is a difference of 70 basis points. This difference essentially stems from the ticket sizes which, at EUR 7,639 in the previous year, were around EUR 900 lower than the current average. Smaller ticket sizes tend to have higher profitability and were overrepresented in last year’s smaller lease portfolio.

Robust CM2-margin and strong leasing new business

Factoring business and GRENKE Bank’s new lending business in line with expectations

The factoring business, which accounts for 1.5% of the total assets (as of the June 30, 2022 reporting date), reported new business in the reporting quarter with a purchased receivables volume of EUR 205.0 million, corresponding to a year-on-year increase of 14.9% (Q3 2021: EUR 178.5 million). The average maturity of these receivables is six weeks. At EUR 46.0 million, new factoring business in Germany was lower year-on-year (Q3 2021: EUR 51.2 million) due to the realignment of the sales approach but increased in the international markets by 24.9% from EUR 127.3 million in the same prior-year quarter to EUR 159.0 million.

The resumption of the microloan business at the end of Q3 2021 led to a significant increase in GRENKE Bank’s new lending business to EUR 11.5 million in Q3 2022 (Q3 2021: EUR 0.9 million).

 

Overview of new business development (in EUR millions)

	Q3 2022	Q3 2021	∆ in %	Q1-Q3 2022	Q1-Q3 2021	∆ in %
New business Leasing	565.5	372.2	51.9	1,652.2	1,136.7	45.4
- of which international	414.9	259.4	59.9	1,243.6	808.5	53.8
- of which DACH*	150.6	112.8	33.5	408.5	328.2	24.5
Western Europe (without DACH)*	142.5	94.6	50.7	423.9	302.6	40.1
Southern Europe*	133.9	82.5	62.4	423.8	257.2	64.8
Northern/Eastern Europe*	104.8	61.6	70.2	302.8	184.6	64.0
Other regions*	33.7	20.8	62.2	93.2	64.1	45.4
New business Factoring	205.0	178.5	14.9	571.5	509.1	12.3
- of which Germany	46.0	51.2	-10.2	131.2	158.5	-17.2
- of which international	159.0	127.3	24.9	440.3	350.6	25.6
GRENKE Bank
New business lending business	11.5	0.9	1,171.6	40.9	21.8	88.2
Contribution margin 2 (CM2) of
new business Leasing	92.7	63.6	45.8	269.1	207.2	29.9
- of which international	74.6	49.8	49.9	218.6	164.3	33.0
- of which DACH*	18.1	13.8	31.0	50.5	42.9	17.7
Western Europe (without DACH)*	24.8	17.3	43.0	73.9	59.7	23.7
Southern Europe*	22.9	15.8	44.6	70.4	52.6	33.8
Northern/Eastern Europe*	20.0	12.1	65.1	55.9	37.0	51.4
Other regions*	7.0	4.5	53.8	18.4	15.0	22.2

 *Regions: DACH: Germany, Austria, Switzerland

Western Europe without DACH: Belgium, France, Luxembourg, Netherlands

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

Northern | Eastern Europe: Denmark, Finland, Ireland, Latvia, Norway, Sweden, UK | Czechia, Hungary, Poland, Romania, Slovakia

Other regions: Australia, Brazil, Canada, Chile, Singapore, Turkey, UAE, USA

In a short interview, CFO Dr Sebastian Hirsch gives an update on the new business:

https://youtu.be/AT2JsJbdfSo

 

The report for the third quarter and Q1 – Q3 2022 will be published on November 10, 2022.

For further information, please contact:

 

GRENKE AG Team Investor Relations Neuer Markt 2 76532 Baden-Baden Phone:   [phone] Email: [e-mail] Internet: www.grenke.com

Press contact Stefan Wichmann Neuer Markt 2 76532 Baden-Baden Phone:  [phone] Email:    [e-mail]

 

About GRENKE

The GRENKE Group (GRENKE) is a global financing partner for small and medium-sized companies. As a one-stop shop for customers, GRENKE’s products range from flexible small-ticket leasing and demand-driven bank products to convenient factoring. Fast and easy processing and personal contact with customers and partners are at the centre of GRENKE’s activities.

 

Founded in 1978 in Baden-Baden, the Group operates in 33 countries and employs more than 1,800 staff (measured in terms of full-time equivalents) worldwide. GRENKE shares are listed on the Frankfurt Stock Exchange (ISIN DE000A161N30).

 

 

 

 

 

 

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05.10.2022 CET/CEST Dissemination of a Corporate News, transmitted by EQS - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	GRENKE AG
	Neuer Markt 2
	76532 Baden-Baden
	Germany
Phone:	[phone]
Fax:	[phone]
E-mail:	[e-mail]
Internet:	www.grenke.de
ISIN:	DE000A161N30
WKN:	A161N3
Indices:	SDAX
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange
EQS News ID:	1456865

End of News	EQS News Service

1456865  05.10.2022 CET/CEST