- GRENKE Group Leasing’s new business in 2016 totalled EUR 1,592.5 million for a year-on-year rise of 17.1%
- GRENKE Group Factoring’s new business in 2016 reached EUR 356.2 million for a year-on-year increase of 9.7%
- GRENKE Bank’s business start-up financing amounted to EUR 25.3 million in 2016 for year-on-year growth of 28.9%
Baden-Baden, January 3, 2017: In 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 1,592.5 million (2015: EUR 1,359.9 million), corresponding to a rise of 17.1%, which is in line with our forecast for new business growth of between 16 and 20%. New business at GRENKE Group Factoring (including franchise partners) – i.e. the total of purchased receivables – rose by 9.7% in the past twelve months to EUR 356.2 million (2015: EUR 324.6 million) and therefore was below our expectations. GRENKE Group’s new business volume (including franchise partners) amounted to EUR 1,974.0 million (2015: EUR 1,704.1 million) for a rise of 15.8%.
The contribution margin 2 of the Leasing segment’s new business reached EUR 265.9 million in 2016 resulting in a CM2 margin for the Leasing segment of 16.7% (2015: EUR 245.5 million and 18.1%, respectively). The CM1 margin (contribution margin 1 at acquisition values) of the Leasing segment was 12.5% for a value of EUR 199.1 million (2015: 13.5% and EUR 184.2 million, respectively). The slight decline in margin is mainly the result of the previous year’s change in the calculation method, the change in the foreign exchange rate of the British pound and an increase in our sales activities aimed at high-growth in individual markets. An isolated comparison of past quarters shows stable margin development.
The international share of GRENKE Group’s new business in 2016 was at the previous year’s level and amounted to 71.7%.
The growth of our Leasing segment’s new business in our home market of Germany was favourable (12.2%). The growth trend in our international markets held steady allowing us to continue to further expand our strong market position, particularly in our core market of France (15.2%) and the important market of Italy (29.0%).
Under our cell division strategy, we opened a total of three new locations in the fourth quarter of 2016: Bari (Italy), Monza (Italy) and Valencia (Spain). This brings the number of GRENKE locations worldwide to a total of 122 as per the end of the 2016 fiscal year. We are now also offering our factoring services in Poland.
The GRENKE Group received a total of 390,736 lease applications (318,672 thereof were international) in 2016, which resulted in 182,655 new lease contracts (145,413 thereof were international). At EUR 8,719 (2015: EUR 8,553) the mean term per lease contract remained at a level customary for our business.
The GRENKE Group’s (Leasing segment) conversion rate (applications into contracts) in 2016 was 47%. The conversion rate in our international markets amounted to 46% and thus was lower than the rate achieved in the German market (52%).
We increased our new business volume in the Factoring segment by 9.7%. The gross margin on new business volume of EUR 153.2 million generated in Germany remained at a high level of 1.86% (2015: 2.08%). In our international markets, the gross margin on new business volume of EUR 203.0 million amounted to 1.24% (2015: 1.36%). This margin relates to the average period for a factoring transaction in Germany of approximately 26 days (2015: approx. 25 days) and about 37 days internationally (2015: approx. 34 days).
The development of GRENKE Bank’s business start-up financing and microcredit business was very satisfactory, growing year-on-year by 28.9% and reaching a total volume of EUR 25.3 million.
"The year 2016 marked another year of high growth for the GRENKE Group. Our new business in the Leasing segment remained highly profitable, growing 17.1%. This positive development was driven, above all, by our international markets – particularly France and Italy. The development of our other markets was also entirely satisfactory and in line with our expectations. Our factoring business, on the other hand, proved to be challenging. While maintaining a high level of credit quality, the new business rose a total of 9.7% and was significantly below our expectations. The lower nominal growth was also the result of strong comparisons in Switzerland. We aim to return to the growth rates achieved in previous years. We have accomplished a great deal in terms of expanding the GRENKE Group’s international presence. Under our cell division strategy, we opened a total of nine new locations in 2016 in Belgium, Germany, Finland, Italy, Poland and Spain. We are also preparing for further cell divisions in 2017", explained Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG, in his comments on the new business development of the past fiscal year.
Aside from organic growth, there were two other strategic alternatives utilised this past fiscal year. One of these alternatives was GRENKE Bank’s investment in Finanzchef24 GmbH – the first digital insurance broker and online finance portal for entrepreneurs and self-employed professionals. The other was GRENKE AG’s substantial reinforcement of its market position in the small-ticket leasing of medical devices through its acquisition of Europa Leasing GmbH. "The acquisition of Europa Leasing offers us an ideal way to access the largely untapped area of medical technology. Since both business models take a similar approach to leasing, this acquisition opens up some highly attractive growth opportunities", continued Wolfgang Grenke.
Sebastian Hirsch – member of the Board of Directors of GRENKE AG since January 1, 2017 – underlines the positive development on the product side by saying: "Small- and medium-sized enterprises (SMEs) and self-employed professionals and business start-ups across Germany can now benefit from attractive leasing conditions for business purchases. This was made possible through a global loan in the amount of EUR 100 million for lease financing, which was recently concluded between KfW Group and GRENKE. We have been offering SMEs interest-affordable lease financing using promotional vouchers through collaborations between GRENKE BANK AG and regional development banks since 2010 and have concluded over 21,000 lease contracts to date. In managing our refinancing, we rely on a broad range of instruments. Our bonds make up an essential portion of these instruments. We put our position in the capital market to the test at the end of November 2016 with our placement of a bond totalling EUR 150 million and an interest coupon of 1.125% with a maturity of roughly five years. We also increased our AT1-hybrid bond issued in July 2015 by a total of EUR 20 million drawing support from our excellent ratings from Standard & Poor’s and the Gesellschaft für Bonitätsbeurteilung ("GBB"), who in their most recent assessments continued to award us an investment grade rating with a stable outlook."