- CEO Michael Bücker: "The quarterly results prove the viability of our business model but also the necessity for further development"
- Net interest income declines as expected due to COVID-related lower new business in the past quarters
- Stable payment behaviour of customers reduces expenses for settlement of claims and risk provision
- Lower risk provisions and capital gain of approx. EUR 20 million lead to an increase in net profit guidance from previously EUR 60 million to EUR 80 million to EUR 90 million to EUR 100 million
- CFO Dr Sebastian Hirsch: "The results confirm the profitability and normalisation of risk costs"
Baden-Baden, November 10, 2021: GRENKE AG, global financing partner for small and medium-sized enterprises, reported net profit of EUR 20.1 million (-24.0% compared to Q3 20201: EUR 26.5 million) in the third quarter of 2021, after EUR 32.3 million in the first half of the year, despite the ongoing effects of the COVID-19 pandemic.
Michael Bücker, CEO of GRENKE AG: "The figures for the third quarter confirm the impression of my first 100 days: Our business model is robust and offers tremendous potential. We have an excellent team, and our portfolio of resellers and customers – small and medium-sized enterprises, the backbone of the European economy – is strong and unique. At the same time, however, I also recognise that we need to improve and develop GRENKE further in core areas, particularly through continued digitalisation and automation as well as higher efficiency in key customer-related processes. The Board of Directors has launched an agenda to analyse the situation and develop a solution. We will present the concrete results of this Board of Directors Agenda at GRENKE's first Capital Markets Day in the first half of next year."
The third quarter results reflect GRENKE's solid existing leasing portfolio. Due to the COVID pandemic, new business has declined in recent quarters, resulting in a year-on-year decrease in net interest income of EUR 8.8 million to EUR 90.8 million in the third quarter of 2021. The stable payment behaviour of customers led to a reduction of settlement of claims and risk provision from EUR 47.4 million to EUR 37.3 million. The resulting loss rate amounted to 1.7% in the third quarter of 2021 (Q3 20201: 2.1%).
Dr Sebastian Hirsch, CFO of GRENKE AG: "We have regained our footing in recent months because we have tackled changes quickly in addition to having stable liquidity. We have increased our earnings guidance for the 2021 financial year not only because of the capital gain from the sale of the viafintech investment but also as a result of the strong contribution margins of our business and normalisation of risk costs, despite continuing macroeconomic uncertainties."
In the report for the first quarter, GRENKE had already announced that costs were expected to increase slightly over the course of the year due to the aftereffects of the audits and the ongoing implementation of the measures. Costs increased quarter-on-quarter accordingly by EUR 7.7 million, mainly due to higher staff, administrative and IT project costs. The ratio of expenses to income, or cost-income ratio, was 51.2% in the third quarter (Q3 20201: 40.5%) and thus rose slightly above the target of below 50% for the year as a whole.
Total assets amounted to EUR 6.8 billion as of the September 30, 2021 reporting date (December 31, 2020: EUR 7.3 billion). As a result of the lower volume of new business in recent quarters, the largest balance sheet item – non-current and current lease receivables – fell by 9.1% to EUR 5.1 billion as of the reporting date (December 31, 2020: EUR 5.6 billion). Liquidity equalled EUR 1.0 billion as of September 30, 2021 (December 31, 2020: EUR 0.9 billion). The equity ratio amounted to 18.1% and thus remained above the minimum target of 16% set by the Company.
As a result of the continued high profitability of the business and the one-off income of approximately EUR 20 million from the sale of the viafintech investment contained in net profit, the Board of Directors has raised the guidance range for net profit from the previous range of EUR 60 million to EUR 80 million to EUR 90 million to EUR 100 million. For new leasing business, the Board of Directors expects new business volume of between EUR 1.5 billion and EUR 1.7 billion in the 2021 financial year, as previously communicated.
The quarterly statement for Q1 and Q1-Q3 of 2021 is available online at https://www.grenke.com/investor-relations/reports-and-presentations.
1 Figures adjusted according to IAS 8.42 (including consolidation of franchise companies).
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