- Income from operating business increases by 11.4% to EUR 109.2 million (Q2 2022: EUR 98.0 million)
- Net profit grows 17.3% to EUR 24.5 million (Q2 2022: EUR 20.9 million)
- Loss rate in the second quarter of 2023 is 0.9% and significantly better than target of 1.5%
- 2023 forecast confirmed and outlook for 2024 aligned with the market environment
Baden-Baden, August 09, 2023: GRENKE AG, a global financing partner for small and medium-sized enterprises, continues its rebound. In the second quarter of 2023, GRENKE generated income from operating business of EUR 109.2 million, for a year-on-year increase of 11.4% (Q2 2022: EUR 98.0 million). Consolidated Group net profit also grew significantly year-on-year by 17.3% to EUR 24.5 million (Q2 2022: EUR 20.9 million). Earnings per share equaled EUR 0.55 (Q2 2022: EUR 0.46).
“We are on the right track,” emphasises Dr Sebastian Hirsch, CEO of GRENKE AG. After two years, new business has rebounded from the corona-induced dip, and we are almost back to the level achieved in 2019. Hirsch: “We have interest rates and inflation under control. Even if growing recessionary concerns in the markets call for new priorities, we want to continue our double-digit growth, thereby outpacing the market and gaining market share. What is important for us now, however, is first and foremost maintaining a profitable and balanced business with solid margins. At the same time, we intend to increase our efficiency over the next twelve months through not only digitalisation but also stringent cost management.”
Over one million current lease contracts, featuring a volume of now EUR 9.2 billion (Q2 2022: EUR 8.7 billion), are the source of our future income. The continued positive development of the CM2 margin in Q2 2023 to 16.9% after 16.7% in Q1 2023 will have a particularly positive impact on Consolidated Group net profit.
Interest income continued to develop positively in the second quarter of this year, increasing year-on-year by EUR 10.2 million to EUR 113.6 million (Q2 2022: EUR 103.4 million). This increase compensated for the majority of the EUR 13.6 million increase in refinancing expenses resulting from the sharp rise in capital market interest rates. Interest expenses from refinancing and deposit business rose from EUR 15.9 million (Q2 2022) to EUR 29.5 million in Q2 2023.
Based on an unchanged cautious assessment of all available macroeconomic factors, the settlement of claims and risk provision was reduced further. This, combined with customers’ good payment behaviour resulted in a reduction in expenses for the settlement of claims and risk provision in Q2 2023 of 23.6% year-on-year (Q2 2023: EUR 21.4 million vs. Q2 2022: EUR 28.1 million). The resulting loss rate was 0.9% in the reporting period (Q2 2022: 1.3%) and therefore well within the forecast of below 1.5% for the current 2023 financial year.
Staff costs in the second quarter of 2023 increased by EUR 9.0 million to EUR 44.0 million compared to the same quarter in the prior year (Q2 2022: EUR 35.0 million). Compared to the first quarter of 2023 (Q1 2023: EUR 41.3 million), however, staff costs maintained a stable level, which includes the inflation-driven salary adjustments made in the second half of 2022. As a result, the cost-income ratio (CIR) was 59.5% in the second quarter of the current year, compared to 57.1% in the first quarter (Q2 2022: 54.0%). The increase in the CIR was compensated for by the favourable decline in the expenses for the settlement of claims and risk provision due to the good payment behaviour of customers, falling from EUR 28.1 million in Q2 2022 to EUR 21.4 million in Q2 2023.
As of the June 30, 2023 reporting date, GRENKE Group's total assets amounted to EUR 6.7 billion (December 31, 2022: EUR 6.4 billion). The largest balance sheet item, current and non-current lease receivables, increased slightly to EUR 5.4 billion as of the reporting date (December 31, 2022: EUR 5.2 billion). As of June 30, 2023, liquidity in the form of cash and cash equivalents reached approximately EUR 0.6 billion (December 31, 2022: 0.4 billion). The equity ratio stayed at a consistently high level of 19.8% (December 31, 2022: 20.8%) and was thus comfortably above the self-set target of at least 16.0%.
The Board of Directors confirms the outlook announced on March 16, 2023 for new leasing business in 2023 at a volume ranging from EUR 2.6 billion to EUR 2.8 billion. The Board of Directors also continues to expect Consolidated Group net income in 2023 to be in line with the forecast communicated of EUR 80 million to EUR 90 million, despite macroeconomic developments that are difficult to foresee.
Based on updated economic forecasts and a continued focus on balanced margins, the Board of Directors is targeting new leasing business of EUR 3.0 billion to EUR 3.2 billion for the year 2024, instead of the previous figure of around EUR 3.4 billion, and Consolidated Group net profit of EUR 95 million to EUR 115 million, instead of the previous figure of around EUR 120 million. GRENKE is continuing its growth strategy also with a reduced guidance range for new business. The new outlook for new business corresponds to double-digit growth of 11% to 19% as compared to the mid-point of guidance for the current financial year of around EUR 2.7 billion.
The financial report for the second quarter and first half of 2023 will be available as of August 10, 2023 the internet at www.grenke.com/investor-relations/reports-and-presentations/.
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