- New business at GRENKE Group Leasing amounted to EUR 1,122.4 million in the first nine months of 2016, corresponding to a year-on-year increase of 16.8%
- New business at GRENKE Group Factoring during the same period reached EUR 254.6 million for a year-on-year rise of 10.6%
- Business start-up financing at GRENKE Bank in the first nine months of 2016 increased to EUR 18.0 million for a year-on-year rise of 25.6%
Baden-Baden, October 5, 2016: In the first nine months of 2016, the new business volume of GRENKE Group Leasing (including franchise partners) – i.e. the total acquisition cost of newly purchased leased assets – amounted to EUR 1,122.4 million (9M-2015: EUR 961.1 million). This corresponds to a rise of 16.8% and places us on track to reach our full-year growth forecast of 16 – 20%. GRENKE Group Factoring’s new business (including franchise partners) – i.e. the total of purchased receivables – rose by 10.6% in the nine-month period to EUR 254.6 million (9M-2015: EUR 230.2 million) and thus was below our expectations. GRENKE Group’s new business volume (including franchise partners) amounted to EUR 1,395.0 million (9M-2015: EUR 1,205.7 million), which marked a rise of 15.7%.
The contribution margin 2 of the Leasing segment’s new business reached EUR 191.6 million in the nine-month period, which is equivalent to a CM2 margin of 17.1% (9M-2015: EUR 177.8 million and 18.5%, respectively). The CM1 margin (contribution margin 1 at acquisition values) of the Leasing segment was 13.0% and amounted to EUR 145.6 million (9M-2015: 13.8% and EUR 132.4 million, respectively). The decline in the margin mainly results from the previous year’s change in the calculation method and an increase in our sales activities aimed at high growth in individual markets. An isolated comparison of past quarters shows a stable development in the margin.
The international share of GRENKE Group’s new business in the first nine months of 2016 amounted to 72.9% in comparison to 71.4% in the previous year’s same period.
Whereas the growth in our Leasing segment’s new business in our home market of Germany was still somewhat moderate (3.2%), the growth trend in our international markets continued. We were particularly successful in further expanding our position in our core market of France (18.4%) and the important Italian market (33.0%).
Under our cell division strategy, we opened a total of three new locations in the third quarter of 2016: Wallonia (Belgium), Katowice (Poland) and Bilbao (Spain). This brought the number of locations worldwide at the quarter’s end to a total of 119.
In the first nine months of 2016, the GRENKE Group received a total of 285,768 lease applications (233,076 thereof were international), which resulted in 131,208 new lease contracts (105,009 thereof were international). At EUR 8,554 (9M-2015: EUR 8,472), the mean term per lease contract remained at a level customary for our business.
The GRENKE Group’s (Leasing segment) conversion rate (applications to contracts) in the first nine months of 2016 was 46%. The conversion rate in our international markets stood at 45% and thus was lower than the rate achieved in the German market (50%).
We increased our new business volume in the Factoring segment by 10.6%. The gross margin on new business volume of EUR 109.5 million generated in Germany remained at a high level of 1.90% (9M-2015: 2.11%). In our international markets, the gross margin on new business volume totalling EUR 145.2 million was 1.24% (9M-2015: 1.37%). This margin is based on the average period for a factoring transaction in Germany of approximately 27 days (9M-2015: approx. 25 days) and approximately 37 days internationally (9M-2015: approx. 34 days).
The development of GRENKE Bank’s business start-up financing and microcredit business was exceptionally strong, growing year-on-year by 25.6% and reaching a total volume of EUR 18.0 million.
"Following the excellent performance in the first-half year, we were able to continue this success in the third quarter. We achieved a gratifying rise in GRENKE Group’s new business in the Leasing segment of 16.8% in the nine-month period. We generated high growth rates, particularly in the key French and Italian markets where we generated roughly 44% of the Leasing segment’s total new business. The new business in our Factoring segment demonstrated high credit quality, however, at 10.6%, new business growth did not meet our expectations. In our sales area, we initiated the appropriate actions to accelerate growth and are confident that these actions will be effective. We have also made steady progress in expanding our international presence. Under our cell division strategy, we opened a total of three new locations in the third quarter in Belgium, Poland and Spain and are preparing for further cell divisions in the fourth quarter," commented Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG.
Jörg Eicker, Chief Financial Officer (CFO) of GRENKE AG emphasised the solid progress made on the product side: "Providing small- and medium-sized enterprises and selfemployed professionals access to development funds is an integral part of GRENKE Bank’s business. In the third quarter, after concluding our sixth global loan with NRW.BANK, the state development bank of North Rhine-Westphalia, we will be able to provide another EUR 30 million in development funding. Since beginning our successful cooperation in 2010, we have concluded more than 12,000 sponsored lease contracts.”