- Strong growth in the third quarter
- GRENKE Group’s new business reaches EUR 1,731.2 million in the nine-month period
- Year-on-year increase of 22.3%
Baden-Baden, October 4, 2017: GRENKE Group reports successful new business development in the third quarter of 2017. In the first nine months, GRENKE Group Leasing acquired new business volume (defined as the total acquisition costs of newly purchased leased assets) of EUR 1,401.9 million compared to EUR 1,142.5 million in the same period of the previous year. This is equivalent to an increase of 22.7%. After rising 20.9% in the first half-year, growth continued to increase in the third quarter. Growth for the first nine months as a whole was at the upper end of the full-year target range, which was raised to 16 – 21% with the announcement of the results for the first half-year. GRENKE Group Factoring’s new business was also highly satisfactory with a year-on-year increase in the total of purchased receivables of 21.5% to EUR 309.3 million (9M-2016: EUR 254.6 million).
"We are very satisfied with the performance in the third quarter. We are particularly pleased with the high growth rates in direct sales and sales outside of the traditional IT business after recently beginning with the diversification of our small ticket leasing business. This gives us considerable optimism", said Wolfgang Grenke in his comments on the solid new business development in the third quarter.
The profitability of the new business remained very satisfactory. In the Leasing segment, the contribution margin 2 (CM2) amounted to EUR 252.2 million compared to EUR 206.7 million in the first nine months of the previous year. This was equivalent to a CM2 margin of 18.0% versus 18.1% in the previous year. The CM1 margin in the Leasing segment (contribution margin 1 at acquisition value) was 12.6% and reached a level of EUR 176.2 million (9M- 2016: 12.9% and EUR 146.9 million, respectively).
When looking at the regional distribution of new business, the growing importance of the rapidly growing international business was evident again, also in the nine-month period. The international share of new business amounted to 74.8% after 71.9% in the same period of the previous year. Outside of Germany, we recorded growth of 27.4% in the first nine months of 2017. The Leasing segment’s new business growth was particularly strong in our important countries of Italy (+40.1%), Spain (+31.1%) and the UK (+28.2%). In our core market of France, we posted growth of 14.9%. In Germany, we grew 8.6% in the nine-month period and were thus able to win further market share. As a result, our largest markets – Italy, France and Germany – together recorded very solid growth.
Sebastian Hirsch, member of the GRENKE AG Board of Directors, emphasised the Consolidated Group’s well-balanced refinancing: "In the third quarter, we continued to use the capital market to successfully refinance our growth and placed our issues within a short period of time. To do this, we relied on a diverse range of refinancing instruments available to us, which we can use flexibly and according to our needs".
In the first nine months of 2017, the GRENKE Group recorded a total of 339,866 lease applications (283,728 thereof were international), which generated 162,814 new lease contracts (133,200 thereof were international). At EUR 8,610 (9M-2016: EUR 8,642), the mean acquisition value per lease contract remained at a level customary for our business.
The GRENKE Group’s (Leasing segment) conversion rate (applications into contracts) was 48%. The conversion rate in our international markets amounted to 47%, which was lower than the level in the German market (53%).
In the Factoring segment, the gross margin in Germany remained high at 1.72% (9M-2016: 1.90%) on new business volume of EUR 122.1 million. The gross margin in our international markets amounted to 1.25% (9M-2016: 1.24%) on new business volume of EUR 187.3 million. The margin is based on the average period of approximately 28 days in Germany for a factoring transaction (9M-2016: approx. 27 days) and approximately 38 days in our international markets (9M-2016: approx. 37 days).
In the third quarter, we recorded a slight decline in GRENKE Bank’s lending business for small and medium-sized enterprises (including business start-up financing). This reflects the positive economic development and the lower accompanying demand for business start-up financing. New business volume in the quarter was down 9.5% year-on-year but exceeded the previous year’s figure by 10.9% on a nine-month basis. In absolute terms, the volume in the first nine months amounted to EUR 20.0 million compared to EUR 18.0 million in the same period of the previous year.