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GRENKE's earnings continue to grow in the first half of 2018

DGAP-News: GRENKE AG / Key word(s): Quarterly / Interim Statement

27.07.2018 / 07:19
The issuer is solely responsible for the content of this announcement.


GRENKE's earnings continue to grow in the first half of 2018

- Half-year net profit increases 23.1% to EUR 63.4 million (6M-2017: EUR 51.5 million)

- Very solid financing: Renewed confirmation of Company's investment grade rating with a stable outlook: equity ratio rises to 18.8%

- Full-year targets confirmed

Baden-Baden, July 27, 2018. The GRENKE Consolidated Group continued its dynamic development during the first six months of its 2018 anniversary year. Net profit rose by 23.1% to EUR 63.4 million compared to EUR 51.5 million in the same period of the prior year. The Company confirms its 2018 fiscal year forecast for net profit of EUR 123 to EUR 131 million. As already reported on July 3, 2018, the sharp increase in new business at GRENKE Group Leasing in the first half of the year prompted the Company to raise its growth target for new business in the Leasing segment from the previous range of 16 to 20 percent to 18 to 22 percent.

For Antje Leminsky, Chair of the Board of Directors of GRENKE AG, these results demonstrate that the Company is clearly on course: "Our tried and true business model is and remains highly profitable - and future proof. We are applying it to an ever-growing number of new product and service offers and deepening our international market penetration. Further digitisation along the entire value chain opens up additional opportunities for us".

In the reporting period, the profitable new business of the recent past continued to be the strongest driver of net interest income and, thus, the profitability of the Consolidated Group. The sum of interest and similar income from financing business increased by 14.0% versus a rise in expenses from interest on refinancing of just 11.3%. As a result, net interest income grew by 14.4% to EUR 137.2 million after EUR 119.9 million in the first half of the prior year. Net interest income after the settlement of claims and risk provision - which as per the beginning of 2018 under IFRS 9 includes not only losses that have already occurred but also expected losses - increased 13.4% to EUR 94.4 million compared to EUR 83.3 million in the same period of the prior year. The Consolidated Group's loss rate, based on the overall risk provisioning in accordance with IFRS 9, amounted to 1.4% after 1.4% in the first quarter of 2018. The results from service business and new business increased 20.6% and 22.2%, respectively. Overall, the Consolidated Group's income from operating business increased 19.3% from EUR 144.1 million in the previous year to EUR 171.9 million.

Including the most recent cell divisions and acquisitions, the average number of employees at the GRENKE Consolidated Group increased by 18.2% to 1,397 employees compared to last year's period. Staff costs were 19.8% higher than the previous year's level, and the Consolidated Group's second major expense item, selling and administrative expenses, increased by 19.9% as a result of the Consolidated Group's growth and intensified sales and marketing activities.

The operating result exceeded the previous year's figure of EUR 68.7 million by 11.2%, reaching EUR 76.4 million. As mentioned, net profit increased in the first half-year by 23.1% to EUR 63.4 million compared to EUR 51.5 million in the prior year, resulting in earnings
per share of EUR 1.35 in the first half of 2018 compared to EUR 1.13 in the first half of the prior year.

The Consolidated Group's balance sheet structure was very solid as per the June 30, 2018 reporting date. In addition to higher retained earnings due to the net profit achieved in the reporting period, GRENKE AG's equity was increased by roughly EUR 200 million against cash contribution in June 2018. Overall, the equity ratio grew from 16.7% as per the end of 2017 to 18.8%, visibly exceeding our long-term benchmark of 16%.

"We continue to pursue our international growth path, which requires solid financing. With our very successful capital increase in June, despite the rather difficult overall market environment, we have been able to strengthen our equity base by a total of almost EUR 200 million. In addition, GRENKE AG was recently given a top financial market rating once again with the award of the credit rating BBB+ and a stable outlook from the rating agency Standard & Poor's. This rating gives us continued flexibility on the capital market, thereby providing us access to the funds needed for our future growth", explained Sebastian Hirsch, member of the Board of Directors of GRENKE AG.

The 2018 half-year financial report is available at www.grenke.de/financialreports.

Overview of key figures (in EUR millions)

  6M-2018 6M-2017 Change in %
New business GRENKE Group Leasing 1,158.4 939.5 23.3
New business GRENKE Group Factoring 235.6 199.7 18.0
New business SME lending business
(incl. business start-up financing)
18.7 13.1 42.9
CM2 margin on new business Leasing in % 17.7 18.1 -2.2
Net profit GRENKE Consolidated Group* 63.4 51.5 23.1
Cost / income ratio in %* 56.5 54.8 3.1
Equity ratio in %* 18.8 15.4 22.1
Consolidated Group's average number of
employees
1,397 1,182 18.2
 

*Previous year's figures adjusted in accordance with IRFS 9.
Please note: Due to rounding, differences to the actual number in euro may occur in individual figures.

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.



27.07.2018 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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