- Half-year net profit increases 23.1% to EUR 63.4 million (6M-2017: EUR 51.5 million)
- Very solid financing: Renewed confirmation of Company’s investment grade rating with a stable outlook: equity ratio rises to 18.8%
- Full-year targets confirmed
Baden-Baden, July 27, 2018. The GRENKE Consolidated Group continued its dynamic development during the first six months of its 2018 anniversary year. Net profit rose by 23.1% to EUR 63.4 million compared to EUR 51.5 million in the same period of the prior year. The Company confirms its 2018 fiscal year forecast for net profit of EUR 123 to EUR 131 million. As already reported on July 3, 2018, the sharp increase in new business at GRENKE Group Leasing in the first half of the year prompted the Company to raise its growth target for new business in the Leasing segment from the previous range of 16 to 20 percent to 18 to 22 percent.
For Antje Leminsky, Chair of the Board of Directors of GRENKE AG, these results demonstrate that the Company is clearly on course: "Our tried and true business model is and remains highly profitable – and future proof. We are applying it to an ever-growing number of new product and service offers and deepening our international market penetration. Further digitisation along the entire value chain opens up additional opportunities for us".
In the reporting period, the profitable new business of the recent past continued to be the strongest driver of net interest income and, thus, the profitability of the Consolidated Group. The sum of interest and similar income from financing business increased by 14.0% versus a rise in expenses from interest on refinancing of just 11.3%. As a result, net interest income grew by 14.4% to EUR 137.2 million after EUR 119.9 million in the first half of the prior year. Net interest income after the settlement of claims and risk provision – which as per the beginning of 2018 under IFRS 9 includes not only losses that have already occurred but also expected losses – increased 13.4% to EUR 94.4 million compared to EUR 83.3 million in the same period of the prior year. The Consolidated Group’s loss rate, based on the overall risk provisioning in accordance with IFRS 9, amounted to 1.4% after 1.4% in the first quarter of 2018. The results from service business and new business increased 20.6% and 22.2%, respectively. Overall, the Consolidated Group’s income from operating business increased 19.3% from EUR 144.1 million in the previous year to EUR 171.9 million.
Including the most recent cell divisions and acquisitions, the average number of employees at the GRENKE Consolidated Group increased by 18.2% to 1,397 employees compared to last year’s period. Staff costs were 19.8% higher than the previous year’s level, and the Consolidated Group’s second major expense item, selling and administrative expenses, increased by 19.9% as a result of the Consolidated Group’s growth and intensified sales and marketing activities.
The operating result exceeded the previous year’s figure of EUR 68.7 million by 11.2%, reaching EUR 76.4 million. As mentioned, net profit increased in the first half-year by 23.1% to EUR 63.4 million compared to EUR 51.5 million in the prior year, resulting in earnings per share of EUR 1.35 in the first half of 2018 compared to EUR 1.13 in the first half of the prior year.
The Consolidated Group’s balance sheet structure was very solid as per the June 30, 2018 reporting date. In addition to higher retained earnings due to the net profit achieved in the reporting period, GRENKE AG’s equity was increased by roughly EUR 200 million against cash contribution in June 2018. Overall, the equity ratio grew from 16.7% as per the end of 2017 to 18.8%, visibly exceeding our long-term benchmark of 16%.
"We continue to pursue our international growth path, which requires solid financing. With our very successful capital increase in June, despite the rather difficult overall market environment, we have been able to strengthen our equity base by a total of almost EUR 200 million. In addition, GRENKE AG was recently given a top financial market rating once again with the award of the credit rating BBB+ and a stable outlook from the rating agency Standard & Poor’s. This rating gives us continued flexibility on the capital market, thereby providing us access to the funds needed for our future growth", explained Sebastian Hirsch, member of the Board of Directors of GRENKE AG.