DGAP-News: GRENKELEASING AG: European Expansion Bears Fruit - Quarterly Financial Report as per 30 September 2010
(firmenpresse) - GRENKELEASING AG / Key word(s): Quarter Results
28.10.2010 07:19
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European Expansion Bears Fruit
* Net interest income in the third quarter of 2010 increased by 14.8 %
as against the previous year to EUR 20.5 million after EUR 17.9 million,
growth in all operating earnings components
* Net profit for the Consolidated Group after taxes of EUR 6.9 million
in the third quarter after EUR 6.5 million in the previous year
* Equity ratio still at high level of 17.9 %
Baden-Baden, 28 October 2010: In the third quarter of 2010, GRENKE again
increased net interest income significantly by 14.8 % to EUR 20.5 million
after EUR 17.9 million in the previous year. As in the previous quarters,
this success was the result of three positive developments: Firstly, the
contribution margin (CM) 2 on new business was increased greatly in the
previous year, thereby increasing the relevant income items even though we
had considerably scaled back new business overall on account of risk
considerations. Secondly, we have again greatly increased new business in
the current year in the wake of the further improvement in economic
prospects and a more relaxed risk situation overall without making
significant margins concessions. Thirdly, we are still profiting from our
refinancing conditions that are favourable for us.
We maintained our very good funding base and thereby our investment grade
rating throughout the entire financial crisis, and were still able to take
advantage of the full range of our refinancing options and were able to be
among the first mid-sized issuers in the bond market.
The highly positive sequential comparison of quarters therefore continued
in the third quarter: Net interest income has risen continuously over the
four quarters since the fourth quarter of 2009 and recently grew at an
increasing rate. Operating income increased significantly by a total of
17.2 % to EUR 24.2 million overall in the third quarter after EUR 20.6
million in the previous year. All contributions to earnings - the profits
from insurance, new business and disposal in addition to net interest
income - were up on the same quarter of the previous year, albeit the
profit from disposal at a low level. All income items were also up over the
first nine months. Operating income in the first nine months of the current
fiscal year amounted to EUR 69.1 million after EUR 64.8 million.
The negative trend in the settlement of claims and risk provisioning as a
result of the recession year of 2009 in particular should have reached its
highest point in the first quarter of 2010. Claims declined to EUR 7.7
million in the second quarter, and are higher again at EUR 9.0 million in
the third quarter, but are still below the level for first quarter of the
year. However, the loss rate is much more important than the absolute
figure when assessing claims settlement. After 2.2 and 1.8 % in the two
preceding quarters, this was 2.0 % in the third quarter. We had anticipated
such volatility. While the figures are up on the long-term average, they
are not higher than the cyclical high of the last economic downturn before
the financial market crisis. However, the most recent recession was far
more severe. Thus, we stayed within the confines of normal business
fluctuations, even in this phase.
In operating expenses, personnel, selling and administrative expenses all
rose as in the previous quarters. In addition to the first-time
consolidation of GRENKEFACTORING GmbH, this is mostly due to the fact that
we have advanced our international expansion significantly and successfully
with cell divisions in the current year and therefore in the third quarter
as well. Furthermore, non-recurring one-off effects such as some of the
costs of transition to more extensive reporting under 'KWG light' or the
relocation of GRENKE BANK AG from Hamburg to Baden-Baden still also played
a certain role in the first nine months.
In the third quarter, the higher other operating expenses are again
essentially due to currency volatilities not covered by hedge accounting.
These lead to predominantly accounting effects and can develop in the other
direction again. In total, the operating result rose by 14.2 % in the third
quarter to EUR 9.8 million after EUR 8.6 million.
After taxes, the net profit for the Consolidated Group climbed to EUR 6.9
million in the third quarter after EUR 6.5 million in the previous year.
The net profit for the first nine months declined slightly to EUR 19.1
million after EUR 19.6 million in 2009.
The basis for our impressive growth is still formed by our strong equity
ratio and our very good reputation on the debt markets. Following the
successful placement of a bond with a volume of EUR 100 million in June, we
issued a further bond - again of EUR 100 million - in October 2010. Our
access to banking deposits also gives us a highly attractive source of
refinancing in addition to the revolving loan facilities in place that we
can use flexibly to refinance our growth.
'Fiscal 2010 is performing very well overall. It has even improved as the
year has progressed in spite of the usual seasonal effects during the
summer months. The rise of 42.3 % in new business in the GRENKE Group
including franchise partners after nine months is a considerable increase,
even compared to the pre-crisis year of 2008. Thus, we are fully geared
towards growth in the final quarter of 2010 as well. Given these
sustainable successes, we revised our previous, conservative planning for
growth in new business in 2010 of significantly more than 20 % to currently
around 30 % in our announcement on October 4, 2010. The planning adjustment
takes into account the anticipated flattening off in growth rates in the
fourth quarter owing to base effects. These are due to the fact that we
shifted the Consolidated Group's focus back to growth in the second half of
2009 and therefore the expansion of new business volumes was becoming
stronger at the end of the year,' explained Dr. Uwe Hack, Deputy Chairman
of the Board of Directors of GRENKELEASING AG.
He continued: 'Despite the considerable growth, we have maintained our CM 2
at a high level of 16.0 % in the third quarter as well, without changing
our policy of risk limitation in selected countries. The Consolidated
Group's earnings will certainly benefit from the high increase in the
volume of new business and the consistently strong CM 2 but, in particular,
from the excellent margins on new business in 2009. This will affect the
full reporting period of the current year. On the basis of its business
model, the Consolidated Group receives income from new business
continuously over the entire term of a financing agreement, i.e. there is a
timing delay between concluding the leasing contract and the realisation of
earnings during the lease period. We will compensate for the cost increases
as a result of our international expansion and the broadening of our
product portfolio with the forecast growth in income. The development in
losses may be past the worst, but quarter-to-quarter volatility in loss
trends cannot be ruled out, it is also normal in our business. It is
therefore still difficult to make forecasts for the final quarter of the
year. Overall, we are retaining our cautious assessment and reiterating our
prior forecast for net income in the Consolidated Group in the region of
EUR 25 million to EUR 28 million for fiscal 2010.'
This has been achieved by 531 employees as against 504 in the first nine
months of 2009 (full-time basis not including the Board of Directors).
The full Quarterly Financial Report as per September 30, 2010 can be
accessed on the Internet at www.grenke.de INVESTOR RELATIONS - Reports -
Figures 2010.
The GRENKE Group
The GRENKE Group is a broadly diversified provider of financial services
for small to medium-sized enterprises and for private retail clients.
The GRENKE Group comprises companies which operate in fourteen European
countries, all being part of the consolidated GRENKELEASING corporate
group. In addition the GRENKE Group is represented in seven further
countries in Europe by way of a franchise system. Including its leasing
franchise partners and its factoring franchise partner in Switzerland, the
GRENKE Group is represented at 20 locations in Germany and a total of 39
locations internationally.
The range of services offered by the GRENKELEASING Group (not including
franchise partners) covers small-ticket IT leasing and factoring and -
through GRENKE BANK AG - classic online banking services.
GRENKE BANK AG has been part of the GRENKELEASING Group since the beginning
of 2009.
The bank- and vendor-independent GRENKE Group holds a leading market
position in Europe in the field of small-ticket IT leasing for products
such as PCs, notebooks, copiers, printers or software of relatively low
asset value. Its range is rounded off by Car Leasing from one of its
franchise partners.
GRENKELEASING AG is listed on the Prime Standard of the Frankfurt
Securities Exchange and is part of the SDAX.
The shares of GRENKELEASING AG are listed on the SDAX of the Frankfurt
Securities Exchange under the identification code GLJ, ISIN DE0005865901.
Information on the GRENKE Group and its products is available for download
on the Internet, at http://www.grenke.de, http://www.grenkebank.de,
http://www.grenkefactoring.de.
Should you have any queries, please contact:
Renate Hauss
Phone: +49 7221 5007-204
Fax: +49 7221 5007-112
E-mail: investor(at)grenke.de
Internet http://www.grenke.de; http://www.grenkebank.de,
http://www.grenkefactoring.de
28.10.2010 07:19 Dissemination of a Corporate News, transmitted by DGAP -
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Language: English
Company: GRENKELEASING AG
Neuer Markt 2
76532 Baden-Baden
Deutschland
Phone: +49 (0)7221 50 07-204
Fax: +49 (0)7221 50 07-112
E-mail: investor(at)grenke.de
Internet: www.grenke.de
ISIN: DE0005865901
WKN: 586590
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Hamburg, München, Düsseldorf, Berlin, Stuttgart
End of Announcement DGAP News-Service
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Datum: 28.10.2010 - 07:19 Uhr
Sprache: Deutsch
News-ID 32427
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