GRENKE AG

  • WKN: A161N3
  • ISIN: DE000A161N30
  • Land: Deutschland

Nachricht vom 02.10.2020 | 06:55

GRENKE AG: GRENKE strengthens new leasing business in Q3 2020 with stronger focus on profitability

DGAP-News: GRENKE AG / Key word(s): Miscellaneous
02.10.2020 / 06:55
The issuer is solely responsible for the content of this announcement.

GRENKE strengthens new leasing business in Q3 2020 with stronger focus on profitability

- New business at GRENKE Group Leasing totals EUR 517.6 million (-24.6% compared to Q3 2019), and at 75% of the previous year's level, new business slightly exceeds the Company's own forecast

- Contribution margin 2 increases to 18.4% compared to 17.1% in Q3 2019

Baden-Baden, October 2, 2020: GRENKE AG, a global financing partner for small and medium-sized enterprises, was able to maintain its position in the new leasing business during the third quarter of 2020 amid the global COVID-19 pandemic. After a first pickup in new business in June, the Company continued its positive development during the third quarter of 2020. Achieving a level of 75.4% of the previous year's quarter (Q3 2019: EUR 686.8 million), the volume of new business was slightly above the level most recently communicated by the Board of Directors of around 70% of the previous year's quarter. New business volume is defined as the sum of the total acquisition costs of all newly purchased leased assets.

"The fact that our new leasing business is developing positively despite the COVID-19 pandemic is a strong sign", said Antje Leminsky, Chair of the Board of Directors of GRENKE AG. "This performance gives us momentum - particularly in light of the short-seller attack we are currently facing - and we will continue to do everything in our power to refute the unjustified accusations. My special thanks goes out to our 1,700 employees, who are persevering in the current situation. We will master this crisis together."

Regional development of new business

A sequential recovery in new business has occurred in all regions when compared with the second quarter of 2020. When looking at the regional leasing markets individually, the DACH region continued to stand out positively from the other regions in Europe in the third quarter of 2020, with a decline in new leasing business of only 11.8%. Western Europe without DACH recorded a 26.3% decline in new leasing business in the current reporting period. At -30.8%, Southern Europe was at a similar level to Northern/Eastern Europe with -30.6%.

Development of percentage contribution margins

The contribution margin 2 (CM2) of the leasing business amounted to EUR 95.2 million in the third quarter of the current financial year (Q3 2019: EUR 117.3 million). The CM2 margin was 18.4% (Q3 2019: 17.1%). The increase in the CM2 margin was primarily attributable to the profitable small-ticket business, which is the Company's core business. In the third quarter of 2020, the mean acquisition value per lease was EUR 8,051 (Q3 2019: EUR 9,276). The lower average value reflects the demand for small-ticket financing solutions for small and medium-sized enterprises. "Small-ticket" refers to assets with an investment volume of EUR 500 to EUR 25,000.

"Even though the COVID-19 pandemic is not yet over, these results show that we are on the right track", said Sebastian Hirsch, member of the Board of Directors of GRENKE AG. "Above all, we have succeeded in achieving an increase in our contribution margins in all regions. We will continue to focus going forward on the solid profitability of our new business".

Development of contribution margins

As a result of the COVID-19 pandemic and the associated restrictions on overall economic activity, the contribution margins at GRENKE Group Leasing also declined across the regions by varying degrees in the third quarter of 2020 in line with the volume of new business. The DACH region was the least affected, with an 8.0% decline in contribution margins. As in the case of new business, the regions most affected were Western Europe without DACH (-17.0%), Southern Europe (-24.3%) and Northern/Eastern Europe (-23.0%).

Contribution margin 1 (CM1) declined by 23.7% to EUR 65.9 million (Q3 2019: EUR 86.5 million), while the CM1 margin remained stable at 12.7% (Q3 2019: 12.6%).

The GRENKE Group received a total of 132,065 leasing applications in the third quarter of 2020. Of these, 26,779 applications originated from the DACH region and 105,286 from international regions. At the Group level, 64,293 new leasing contracts were concluded from these applications, which corresponds to a conversion rate of 49%.

With purchased receivables of EUR 154.4 million, new business at GRENKE Group Factoring recorded a decline of 9.3% compared to the same period of the previous year (Q3 2019: EUR 170.2 million). The development of new business in the third quarter of 2020 essentially reflected the restrictions of macroeconomic activity prevailing in Q2 2020 with a time lag.

The new SME lending business of GRENKE Bank reached EUR 32.1 million in the third quarter of 2020, which was a significantly higher level than in the same quarter of the previous year (Q3 2019: EUR 13.9 million). This rise was a result of higher demand for KFW development loans. GRENKE Bank's deposit business, with a portfolio volume of EUR 1,300.0 million as of September 30, 2020 (June 30, 2020: EUR 1,312.3 million), remains an important pillar of the Consolidated Group's refinancing. In comparison to September 30, 2019, the deposit volume rose from EUR 799.3 million by a total of 62.7%.

Overview of new business development (in EUR millions)

  Q3 2020 Q3 2019 Q1-Q3
2020
Q1-Q3
2019
             
New business GRENKE Group Leasing 517.6 686.8 -24.6% 1,601.2 2,091.7 -23.5%
- of which international 355.0 500.4 -29.1% 1,115.2 1,569.2 -28.9%
- of which Franchise international 16.6 20.8 -20.2% 50.2 60.4 -16.9%
- of which DACH* 146.0 165.6 -11.8% 435.9 462.1 -5.7%
Western Europe (without DACH)* 125.8 170.7 -26.3% 389.0 543.6 -28.4%
Southern Europe* 137.3 198.2 -30.8% 438.1 640.8 -31.6%
Northern/Eastern Europe* 82.7 119.2 -30.6% 265.3 352.6 -24.8%
Other regions* 25.9 33.2 -22.0% 73.0 92.6 -21.2%
New business GRENKE Group Factoring 154.4 170.2 -9.3% 467.7 475.7 -1.7%
             
- of which Germany 40.6 44.5 -8.8% 132.2 129.4 2.1%
- of which international 31.2 43.3 -27.8% 103.1 124.6 -17.2%
- of which Franchise international 82.5 82.4 0.1% 232.4 221.7 4.9%
GRENKE Bank            
Deposit volume** 1,300.0 799.3 62.7% 1,300.0 799.3 62.7%
New business SME lending business 32.1 13.9 130.6% 104.3 37.6 177.4%

Contribution margin 2 (CM2) new business
           
GRENKE Group Leasing 95.2 117.3 -18.9% 289.5 350.3 -17.4%
- of which international 70.7 89.9 -21.4% 215.2 273.9 -21.4%
- of which Franchise international 3.6 4.6 -22.8% 10.9 12.9 -15.9%
- of which DACH* 21.0 22.8 -8.0% 63.5 63.6 -0.2%
Western Europe (without DACH)* 25.2 30.3 -17.0% 75.2 95.3 -21.1%
Southern Europe* 26.7 35.2 -24.3% 83.5 107.9 -22.6%
Northern/Eastern Europe* 16.5 21.4 -23.0% 51.0 63.4 -19.6%
Other regions* 5.9 7.5 -21.6% 16.4 20.2 -18.7%
 

Please note: Rounding differences may occur.

*Regions: DACH: Germany, Austria, Switzerland
Western Europe (without DACH): Belgium, France, Luxembourg, the 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, USA, UAE
** At the end of the reporting period

The quarterly statement for the third quarter and the first nine months of 2020 will be published on October 29, 2020.

For further information, please contact:

GRENKE AG
Team Investor Relations
Neuer Markt 2
76532 Baden-Baden
Phone: +49 7221 5007-204
Email: investor@grenke.de
Website: www.grenke.de

Press contact
Stefan Wichmann
Executive Communications Consulting
Alfred-Bierwirth-Weg 2
D-53572 Unkel (b. Bonn)
Phone: +49 22 24 98 77 98
Email: presse@grenke.de
Mobile: +49 (0) 171 20 20 300

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 1,700 staff worldwide. GRENKE shares are listed in the MDAX on the Frankfurt Stock Exchange (ISIN DE000A161N30).

Further information about GRENKE and its products is available at www.grenke.com.



02.10.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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