GRENKE AG: GRENKE starts the 2017 fiscal year with robust new business
GRENKE starts the 2017 fiscal year with robust new business
- New business at the GRENKE Group increases 21.5% to EUR 549.9 million in Q1
- Proportion of new business from international markets continues to grow
- Adjustment in calculation of the contribution margin 2 brings increased transparency
Baden-Baden, April 4, 2017: A very satisfactory level of new business growth in the first quarter provided the GRENKE Group with a good start to the current 2017 fiscal year. The acquired volume at GRENKE Group Leasing - defined as the total acquisition costs of newly purchased leased assets - grew 20.1% to EUR 445.6 million in the first three months (previous year: EUR 371.1 million). The level of growth is above the projected range for the full year of 11 to 16%. New business at GRENKE Group Factoring also developed positively. The total of purchased receivables increased 28.1% to EUR 97.7 million (previous year: EUR 76.3 million).
"In the first quarter, we built a solid basis for the Group's continued development throughout the year, recording double-digit growth rates in new business in all segments of the GRENKE Group. We continued to see strong growth from our international markets in particular. As a result, the international share of our new business continued to grow, reaching 74.0% compared to 71.8% in the previous year," said Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG, in his comments on the new business development in the first three months of 2017.
The calculation of the contribution margin 2 (CM2) for new business in the Leasing segment was adjusted starting with the first quarter of 2017 to further improve the transparency of the reconciliation to the Consolidated Group's operating results. As a result, the CM2 for the three-month period amounted to EUR 80.8 million compared to EUR 67.8 million in the previous year, which is equivalent to a CM2 margin of 18.1% (previous year: 18.3%). For comparison, the values according to the previous calculation method are listed separately in the table below. The previous CM2 calculation did not appropriately reflect economies of scale in the cost items. The unchanged calculation for the CM1 margin (contribution margin 1 at acquisition values) was 12.4% and reached a level of EUR 55.1 million (previous year: 12.9% and EUR 48.0 million, respectively).
Sebastian Hirsch, member of the GRENKE AG Board of Directors, added: "The adjusted calculation of the CM2 margin provides more transparency as the CM2 now directly corresponds to the operating result contained in the income statement. The income statement shows the contribution of the leasing portfolio for the respective period whereas the CM2 shows the contribution over the entire term."
On a regional basis, we recorded a moderate increase in new business (Leasing segment) of 5.9% in our home market of Germany in the face of continuing intense competition. This contrasts with the sharply higher growth achieved in our international markets (+ 24.6%), particularly in the important market of Italy (38.3%) as well as in Great Britain (40.5%) and Spain (40.1%).
As part of our cell division strategy, we opened one new location each in Denmark, Italy and the Netherlands in the first quarter of 2017. We also opened a new branch office in Abu Dhabi bringing the number of GRENKE locations at the end of the first quarter to a total of 126 worldwide. In the second quarter, we plan to enter the Australian market and the rollout of our factoring offers in Italy.
In the first three months of 2017, the GRENKE Group recorded 119,129 lease applications (99,800 thereof were international), which generated 52,075 new lease contracts (42,731 thereof were international). At EUR 8,557 (previous year: EUR 8,518) the mean acquisition value per lease contract continued to remain at a level customary for our business. The GRENKE Group's (Leasing segment) conversion rate (applications into contracts) was 44%. The conversion rate in our international markets amounted to 43% and was thereby at a lower level than in the German market (48%).
In our Factoring segment, we increased our new business volume by a pleasing 28.1%. The gross margin on the new business volume of EUR 42.1 million acquired in Germany remained at a high level of 1.69% (previous year: 2.01%). In our international markets, the gross margin on new business volume of EUR 55.6 million amounted to 1.15% (previous year: 1.34%). This margin is based on the average period of approximately 27 days for a factoring transaction in Germany (previous year: approx. 29 days) and approximately 38 days in our international markets (previous year: approx. 38 days).
The development of GRENKE Bank's business start-up financing and microcredit business was also exceptionally strong, growing year-on-year by 31.1% and reaching a total volume of EUR 6.6 million.
Overview of new business development (in EUR millions, previous year's figures have been adjusted)
3M-2017 3M-2016 Change in % New business GRENKE Group Leasing 445.6 371.1 20.1 - of which international 336.3 275.2 22.2 - of which Franchise international 15.0 6.9 118.4 - of which Germany 94.4 89.1 5.9 Western Europe (without Germany)* 134.2 124.5 7.8 Southern Europe* 135.8 99.2 36.9 Northern/Eastern Europe* 71.1 53.5 32.9 Other regions* 10.2 4.9 109.0 New business GRENKE Group Factoring 97.7 76.3 28.1 - of which Germany 42.1 33.2 26.6 - of which international 37.1 32.2 15.1 - of which Franchise international 18.5 10.8 71.4 GRENKE Bank Deposits 446.2 363.7 22.7 New business start-up financing (including the microcredit business) 6.6 5.0 31.1 Contribution margin 2 on new business GRENKE Group Leasing 80.8 67.8 19.3 - of which international 64.6 54.3 18.9 - of which Franchise international 3.3 1.3 143.8 - of which Germany 13.0 12.1 7.4 Western Europe (without Germany)* 24.7 23.9 3.5 Southern Europe* 27.1 20.2 34.0 Northern/Eastern Europe* 13.8 10.6 30.6 Other regions* 2.2 1.0 122.1 CM2 margin of new business in % 18.1 18.3 -0.6 CM2 margin of new business in % (previous calculation) 16.9 16.8 0.5
* Regions: Western Europe (without Germany): Austria, Belgium, France, Luxembourg, the Netherlands, Switzerland Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain Northern/Eastern Europe: Denmark, Finland, Great Britain, Ireland, Norway, Sweden / Czech Republic, Hungary, Poland, Romania, Slovakia Other regions: Brazil, Canada, Chile, Singapore, Turkey, UAE
The Company will publish its quarterly statement for the first quarter of 2017 on May 3, 2017.
For further information, please contact:
GRENKE AG Corporate Communications / Investor Relations Renate Hauss Neuer Markt 2 76532 Baden-Baden Phone: +49 7221 5007-204 Email: email@example.com Internet: http://www.grenke.de
The GRENKE Group
The GRENKE Group is a broadly diversified provider of IT-based services in small-ticket IT leasing, factoring and banking for small- and medium-sized companies. In addition, the GRENKE Bank also offers its classic online services to private customers.
The GRENKE Group is independent of vendors and banks and 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. The GRENKE Group operates in 30 countries and employs more than 1,100 staff.
GRENKE AG is listed in the Prime Standard of the Frankfurt Stock Exchange and is included in the SDAX. GRENKE AG shares are listed on the Frankfurt Stock Exchange under the code GLJ, ISIN DE000A161N30.
Information on the GRENKE Group and its products is available at http://www.grenke.de/en.
04.04.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.deLanguage: English
Company: GRENKE AG Neuer Markt 2 76532 Baden-Baden
Germany Phone: +49 (0)7221 50 07-204 Fax: +49 (0)7221 50 07-4218 E-mail: firstname.lastname@example.org Internet: www.grenke.de ISIN: DE000A161N30 WKN: A161N3 Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service