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GRENKE AG: Growth momentum at the start of the year continues in the second quarter of 2018

DGAP-News: GRENKE AG / Key word(s): Miscellaneous

03.07.2018 / 07:18
The issuer is solely responsible for the content of this announcement.


Growth momentum at the start of the year continues in the second quarter of 2018

- GRENKE Group's new business grows 23% in the first half of 2018

- Higher number of cell divisions: five new locations in Q2, seven in total after six months

- 2018 full-year forecast for new business growth in the Leasing segment raised to 18 - 22% (prior forecast 16 - 20%); Consolidated Group net profit forecast between EUR 123 - 131 million confirmed

Baden-Baden, July 3, 2018: After a strong start in the year, the GRENKE Group continued to grow in the second quarter of 2018. The acquired volume at GRENKE Group Leasing - defined as the total acquisition costs of newly purchased leased assets - increased 23.3% to EUR 609.2 million after EUR 493.9 million in the same quarter of the previous year. With total new leasing volume of EUR 1,158.4 million in the first six months of 2018 (prior-year period: EUR 939.5 million), the billion-euro threshold was exceeded for the first time in a six-month period by a significant amount and corresponds to an increase of 23.3%. New business at GRENKE Group Factoring has recently benefited in particular from the strong growth of the international franchise partners. Total purchased receivables increased by 16.4% to EUR 118.8 million in the quarter under review (prior-year period: EUR 102.1 million) and by 18.0% to EUR 235.6 million in the six-month period (prior-year period: EUR 199.7 million).

"We are very satisfied with the level of new business achieved in the first half of 2018. In the second quarter, we were able to maintain the outstanding growth of the prior quarter. So far this year, we have opened seven new locations and will continue to add more in the second half of the year. We are confident that we will be able to generate a sharper increase in GRENKE Group Leasing's new business in the current fiscal year than previously forecast. As a result, we now expect an increase in new business of between 18 and 22 percent versus our prior forecast of 16 to 20 percent and, at the same time, confirm our earnings forecast for the current 2018 fiscal year," commented Antje Leminsky, Chair of the Board of Directors of GRENKE AG.

The profitability of new business remained high. In the GRENKE Group's Leasing segment, the contribution margin 2 (CM2) increased in the 2018 six-month period by 20.8% to EUR 205.1 million compared to EUR 169.8 million in the same period of the prior-year. This level represents a constant 17.7% CM2 margin compared to the first quarter of the year. In the first half of 2017, the CM2 margin was 18.1%. The Leasing segment's CM1 margin (contribution margin 1 at acquisition values) was 12.8% in the first half of 2018 compared to 12.5% ​​in the prior-year period and reached EUR 148.3 million compared to EUR 117.8 million (Q2 2018: 12.9% and EUR 78.8 million).

Particularly noteworthy is the continuous high growth momentum seen in the comparatively new eSignature online offer. The number of leases signed using this innovative and fully digital distribution channel increased by 63.0% in the first half of 2018 (6M-2018: 29,375 contracts; 6M-2017: 18,018 contracts). Since its launch in 2015, our customers have chosen this option for a total of 88,113 contracts.

As in the first quarter, the regions that continued to stand out showing very strong growth in the reporting period within our three core leasing markets were France (+24.6%), as well as Italy (+25.3%). Our core market of Germany advanced significantly with a plus of 13.1% compared to the previous year. Among the other major international markets, Spain once again stood out with new business growth of 42.3%.
"In the second quarter, we extended our cooperation with Kreditanstalt für Wiederaufbau with a follow-up agreement for a new global loan and launched our eighth global loan with NRW.BANK. We also arranged a loan of EUR 100 million for the first time with the European Investment Bank. This will enable small and medium-sized enterprises (SMEs) to benefit from attractive lease conditions when making new business purchases. In total, more than 42,000 leases have been concluded so far within the scope of such collaborations," says Sebastian Hirsch, Member of the Board of Directors of GRENKE AG.

In the January through June period, the GRENKE Group recorded a total of 277,936 lease applications (233,545 thereof were international), which generated 135,087 new lease contracts (111,227 thereof were international). The mean acquisition value per lease contract was EUR 8,575 (6M-2017: EUR 8,525) and remained at a level typical for the business. The conversion rate (applications into contracts) at the GRENKE Group (Leasing segment) was 49%. The conversion rate in our international markets was 48%, which was lower than the level of 54% seen in the DACH region.

In our Factoring segment, we were able to increase the volume of new business in the first six months of the current fiscal year by 18.0% to EUR 235.6 million (6M-2017: EUR 199.7 million). The gross margin of the new business volume of EUR 85.5 million achieved in Germany remained at a high level of 1.62% (6M-2017: 1.71%). The gross margin in our international markets was at the prior year's level of 1.20% on new business volume of EUR 150.1 million. This margin is based on the average period for a factoring transaction in Germany of roughly 27 days (6M-2017: approx. 27 days) and close to 40 days on an international level (6M-2017: approx. 36 days).

In the second quarter, GRENKE Bank's lending business for small and medium-sized enterprises (including business start-up financing) recorded an even higher increase compared to the beginning of the year. This business grew 42.9% in the first six months with a volume in absolute terms of EUR 18.7 million as per June 30, 2018 compared to EUR 13.1 million in the same prior-year period.

The deposit volume of GRENKE Bank increased by 25.3% and amounted to EUR 595.6 million as per June 30, 2018 compared to EUR 475.3 million as per the end of the first half of 2017.

Overview of new business development (in EUR millions; previous year's figures have been adjusted)

  6M-2018 6M-2017 Change in %
       
New business GRENKE Group Leasing 1,158.4 939.5 23.3
- of which international 871.4 692.8 25.8
- of which Franchise international 26.5 10.9 143.1
- of which DACH* 260.5 235.8 10.5
Western Europe (without DACH)* 305.2 240.4 27.0
Southern Europe* 371.1 293.5 26.4
Northern/Eastern Europe* 183.4 149.6 22.6
Other regions* 38.2 20.2 89.0
New business GRENKE Group Factoring 235.6 199.7 18.0
- of which Germany 85.5 81.6 4.7
- of which international 67.9 74.7 -9.2
- of which Franchise international 82.3 43.4 89.7
GRENKE Bank      
Deposits 595.6 475.3 25.3
New business SME lending business
(incl. business start-up financing)
18.7 13.1 42.9
Contribution margin 2 (CM2) on new business      
GRENKE Group Leasing 205.1 169.8 20.8
- of which international 162.6 133.3 22.0
- of which Franchise international 5.6 2.3 145.1
- of which DACH* 36.9 34.3 7.7
Western Europe (without DACH)* 54.8 43.6 25.9
Southern Europe* 71.2 58.3 22.1
Northern/Eastern Europe* 34.2 29.0 18.0
Other regions* 7.9 4.6 69.7
 

* 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, Norway, Sweden, UK / Czechia, Hungary, Poland, Romania, Slovakia
Other regions: Australia, Brazil, Canada, Chile, Singapore, Turkey, UAE

The Company will publish its financial report for the second quarter and first half-year of 2018 on July 27, 2018.

For more information, please contact:

GRENKE AG
Investor Relations
Renate Hauss
Neuer Markt 2
76532 Baden-Baden
Phone: +49 7221 5007-204
Email: investor@grenke.de
Internet: http://www.grenke.de

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 Company operates in 31 countries and employs more than 1,300 staff worldwide. GRENKE shares are listed in the SDAX on the Frankfurt Stock Exchange (ISIN DE000A161N30).

Further information about GRENKE and its products is available at http://www.grenke.de



03.07.2018 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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Language: English
Company: GRENKE AG
Neuer Markt 2
76532 Baden-Baden
Germany
Phone: +49 (0)7221 50 07-204
Fax: +49 (0)7221 50 07-4218
E-mail: investor@grenke.de
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


 
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