- New leasing business of EUR 1.7 billion (2020: EUR 2.0 billion); net profit of EUR 95.2 million or EUR 72.2 million, excluding capital gain from viafintech (2020: EUR 88.4 million)
- Earnings per share EUR 1.94 (2020: EUR 1.86)
- Dividend proposal of EUR 0.51 per share (2020: EUR 0.26)
- Guidance 2022: New leasing business between EUR 2.0 and 2.2 billion; net profit
between EUR 75 and 85 million
- Outlook 2024: Doubling of new leasing business and net profit excluding special items compared to financial year 2021
- Capital Markets Update on May 13, 2022
Baden-Baden, March 17, 2022: GRENKE, a global financing partner for small and medium-sized enterprises, achieved a net profit of EUR 95.2 million in the 2021 financial year (2020: EUR 88.4 million), thus meeting the forecast of EUR 90 to 100 million published on November 10, 2021. As announced, this includes the extraordinary profit of EUR 23.0 million from the sale of the stake in viafintech GmbH. The net profit for the past financial year corresponds to earnings per share of EUR 1.94 (2020: EUR 1.86). New leasing business in the past financial year amounted to EUR 1.7 billion (2020: EUR 2.0 billion).
The Board of Directors and Supervisory Board propose to almost double the dividend compared to the previous year to EUR 0.51 per share (2020: EUR 0.26). This amount corresponds to a payout ratio of approximately 25 percent of the net profit and is thus within the range of the previous payout ratio of 25 to 30 percent.
At the same time, GRENKE announced the target of doubling both new leasing business and net profit by 2024, compared to the 2021 financial year just ended, which recorded new leasing business of EUR 1.7 billion and net profit of EUR 72.2 million, excluding the gain from the sale of the shares in viafintech.
"The targeted doubling of our net profit and new business is ambitious. We will achieve this continuously high growth by building on GRENKE's historical and unique strengths while accelerating the scaling of our business," emphasises Michael Bücker, Chairman of the Board of Directors of GRENKE AG. Dr Sebastian Hirsch, Chief Financial Officer of GRENKE AG, adds: "Strengthened by the regeneration process of the past two years, we have put ourselves in an excellent starting position. Our robust financial strength provides us with added resilience and flexibility. This is important in view of the current geopolitical situation but, above all, it is the necessary basis for implementing our goals. We are therefore very confident overall for the year 2022 and the years that will follow."
Net interest income after risk provision increases
Payments received from lease contracts remained stable at EUR 2.3 billion in the 2021 financial year (2020: EUR 2.3 billion). GRENKE benefited from the strong new business of previous years, as lease contracts have an average term of around four years. The low loss rate for new business in the past two years also had a positive effect. The risk-oriented management of the business has resulted in a very robust portfolio. At the same time, less new business was generated during the Covid-19 pandemic in 2020 and 2021, so the underlying portfolio of lease receivables declined. Consequently, net interest income fell by 9.9 percent to EUR 366.8 million in the 2021 reporting year (2020: EUR 407.1 million).
Due to the increased selectivity with respect to risk and the consistently good payment behaviour of customers, expenses for settlement of claims and risk provision decreased by 29.5 percent to
EUR 142.8 million in 2021 (2020: EUR 202.4 million) despite the Covid-19 pandemic. The loss rate decreased to 1.6 percent in 2021 (2020: 2.3 percent). Net interest income after settlement of claims and risk provision increased by 9.4 percent to EUR 224.0 million (2020: EUR 204.7 million).
High liquidity position and equity ratio
Overall, less liquidity was raised via the capital market and the deposit business in the 2021 financial year than in 2020 due to the high liquidity position, the strong cash flows from the existing portfolio and the lower level of new business. This reduced financial liabilities to EUR 5.1 billion as of December 31, 2021 (2020: EUR 5.8 billion). GRENKE Bank's deposit business accounted for 27.8 percent of financial liabilities, compared to 26.5 percent in the previous year.
In 2021, liabilities were also largely in line with the refinanced receivables in terms of their amounts and maturities. As of the December 31, 2021 reporting date, non-current lease receivables of EUR 3.2 billion (2020: EUR 3.6 billion) were matched with a total of EUR 3.0 billion in non-current financial liabilities (2020: EUR 3.9 billion). Current lease receivables amounted to EUR 2.0 billion (2020: EUR 2.1 billion) and were at a similar level to current financial liabilities of EUR 2.1 billion (2020: EUR 1.9 billion).
Overall, the liquidity position remained high at EUR 853.1 million as of the reporting date of December 31, 2021 (2020: EUR 944.7 million). This also enabled GRENKE to repay a EUR 280 million bond from its own resources as planned in February of this year. GRENKE's equity ratio was 19.1 percent as at December 31, 2021 (2020: 16.3 percent) and thus significantly above the set target of at least
Outlook: Doubling of new business by 2024
Following the official conclusion of the institution-related measures from the special audit conducted between autumn 2020 and spring 2021, 2022 is a year of new beginnings for GRENKE, towards a sustained double-digit growth trajectory. In the current financial year, despite the risks currently foreseeable from the ongoing pandemic and the Russian war of aggression against Ukraine, the Company anticipates new leasing business of between EUR 2.0 billion and EUR 2.2 billion, compared to
EUR 1.7 billion in the previous year. The lower volume of new business in 2020 and 2021 due to the Covid-19 pandemic is expected to result in lower operating income in 2022. In addition, the Company expects costs to rise slightly overall. In contrast, the lower expenses for risk provisioning as a result of continued good customer payment behaviour should have a positive effect. Net profit is expected to be between EUR 75 million and EUR 85 million in 2022, compared to EUR 72.2 million in the previous year (excluding the sale of the stake in viafintech).
In 2024, GRENKE plans to double both new leasing business and net profit compared to financial year 2021 (excluding the sale of the stake in viafintech).
The Company will provide insight into its growth strategy during the Capital Markets Update on May 13, 2022.
The GRENKE Group's Annual Report for the 2021 financial year is available at https://www.grenke.com/investor-relations/reports-and-presentations.
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