New rental business in the third quarter affected by supply bottlenecks; increased momentum expected in the fourth quarter; 2021 forecast adjusted

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DGAP-News: GRENKE AG / Keyword (s): Evolution of forecasts / Miscellaneous
04.10.2021 / 20:31
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GRENKE AG: New leasing business in the third quarter affected by supply bottlenecks; increased momentum expected in the fourth quarter; 2021 forecast adjusted

New rental business in Q3 2021 decreased year-over-year to € 372.2 million (Q3 2020: € 517.6 million)

– CM2 margin in Q3 2021 at 17.1% (Q3 2020: 18.4%)

– Orientation of new leasing activities in 2021 adjusted to € 1.5 billion to € 1.7 billion (previously € 1.7 billion to € 2.0 billion); net profit forecast in 2021 remains between 60 and 80 million euros

– Successful increase in the bond loan of 125 million euros placed

– GRENKE BANK AG accredited as selected partner for the German Federal Government Microcredit Fund for the third time in a row

– Previously announced change in the Board of Directors of GRENKE BANK AG completed by the appointment of Dr Oliver Recklies effective October 1, 2021

Baden-Baden, October 4, 2021: GRENKE AG, a global financial partner for small and medium-sized businesses, achieved new leasing business of 372.2 million euros in the third quarter of 2021 (Q3 2020: 517, 6 million euros). Global supply bottlenecks, particularly among manufacturers of computer and office equipment, have been the reason for weakening new rental business year over year. The contribution margin 2 decreased slightly in the third quarter due to refinancing costs and amounted to 17.1% (Q3 2020: 18.4%). New business volume is the total acquisition cost of all newly purchased leased assets.

Adjusted guidance

Due to current developments, the Company has adjusted its forecast for new leasing business for the current year to EUR 1.5 billion to EUR 1.7 billion (previously EUR 1.7 billion to EUR 2.0 billion). The net profit forecast for the current financial year remains unchanged at EUR 60 million to EUR 80 million.

GRENKE Chairman of the Board, Michael Bücker: “After my first few weeks at GRENKE AG, I am convinced of its potential as a backbone of SME finance. In addition, GRENKE BANK AG has been accredited as a partner bank of the German Federal Government Microcredit Fund for the third time in a row. In his comments, Michael Bücker said: “Building on this strong starting position, we intend to step up our business in the fourth quarter of 2021 and, as a result, have launched a sales campaign. “Dr Sebastian Hirsch, CFO of GRENKE AG, added:” With the successful increase of our last issued bond, we have proven our ability to refinance in the capital market, laying the groundwork for further new business over the course of the year. year to come. “

Regional development of new business

The decline in new business can be observed in all regions, although to varying degrees. The largest drop of 39.9% was recorded in the Southern European region. New business in the DACH region fell 22.8%, while Northern and Eastern Europe fell 25.5%, with the rest of the regions registering the smallest decline of 19.7% . A decrease of 24.8% was recorded in the Western Europe region without DACH.

Evolution of the contribution margin in percentage

The contribution margin 2 (CM2) of the new rental activity amounts to 63.6 million euros in the third quarter of the current fiscal year (Q3 2020: 95.2 million euros). The CM2 margin was 17.1% (Q3 2020: 18.4%). The CM1 margin during the quarter stood at 10.9% compared to 12.7% in the same quarter of the previous year. The CM2 margin as well as the underlying CM1 margin were mainly impacted by the increase in refinancing costs. Going forward, GRENKE expects refinancing costs to decline again, leading to a return to rising contribution margins.

Evolution of contribution margins

Contribution margin 2 decreased in all regions in line with the development of new business. The largest decrease in contribution margin 2 of 40.6% was recorded in the Southern Europe region. In the DACH region and in Western Europe excluding DACH, the contribution margin fell by 34.3% and 31.3% respectively. The other regions and Northern and Eastern Europe were the least affected with respective declines of 23.2% and 26.5%.

The contributory margin 1 was down 38.7% to 40.4 million euros (Q3 2020: 65.9 million euros), the CM1 margin falling from 12.7% in Q3 2020 to 10.9% in Q3 2021.

The GRENKE group received a total of 100,416 rental requests in the third quarter of 2021. Of this total, 22,339 requests came from the DACH region and 78,077 requests from international markets. At the level of the Consolidated Group, 48,724 new lease contracts were concluded on the basis of these applications, corresponding to a conversion rate of 49%.

With a volume of purchased receivables of 178.5 million euros, the new activities of GRENKE Group Factoring recorded a favorable increase of 15.6% compared to the same period of the previous year (Q3 2020: 154.4 millions of euros).

GRENKE BANK’s new SME lending activities amounted to only 0.9 million euros in the third quarter of 2021 due to the cessation of lending activity (Q3 2020: 32.1 million euros) . With a deposit volume of 1,521.3 million euros at September 30, 2021 (September 30, 2020: 1,300.0 million euros), the deposit activity of GRENKE BANK continues to be an important pillar of refinancing of the Consolidated Group.

Successful increase of the bond loan by 125 million euros

On September 9, 2021, the GRENKE Group increased an existing bond (ISIN: XS2155486942) by an additional 125 million euros, thus strengthening its liquidity base for the continued development of new activities. The high demand for the order book of over 230 million euros confirmed the confidence of the capital market in GRENKE. The yield on issue is approximately 2.5%. The bonds totaling EUR 125 million will be traded under ISIN code XS2386650191 until October 25, 2021. Thereafter, they will merge with the existing listing under ISIN XS2155486942.

German Federal Government re-awards GRENKE contract for Germany Microcredit Fund

GRENKE BANK was once again awarded the German Federal Government Microcredit Fund, under the leadership of the German Federal Ministry of Labor and Social Affairs. After the launch in 2015 and the extension three years later, this is the third time that GRENKE has assumed the role of public microcredit lender of up to EUR 25,000 for micro, small and medium enterprises (SMEs). In the last six years since its launch, the microcredit fund has helped a total of 1,703 micro-enterprises and SMEs to create or develop their activity with 4,656 loans with a volume of more than 120 million euros.

New member of the Board of Directors of GRENKE BANK

As already announced by the Company on June 29, 2021, the second position on the Board of Directors of GRENKE BANK AG has meanwhile been newly filled. On October 1, 2021, Dr Oliver Recklies (51 years old) took up his duties as a member of the Board of Directors of GRENKE BANK AG where, as successor to Sven Noppes (45 years old), he will be responsible for the back office . Dr Recklies holds a degree in banking and business administration and was responsible for back office, finance, risk management and control in his previous positions in various cooperative banks. Most recently he worked for DZB Bank, headquartered in Mainhausen. Since 2017, he has been responsible for the majority of the back office, all risk issues, IT and digitalization as well as finance and accounting as a general representative and authorized representative.

Overview of new business development (in millions of euros)

Q3 2021

Q3 2020

??

Q1-Q3
2021

Q1-Q3
2020

??

New rental company

372.2

517.6

-28.1%

1136.7

1,601.2

-29.0%

– including international

259.4

371.6

-30.2%

808.5

1,165.4

-30.6%

– of which DACH *

112.8

146.0

-22.8%

328.2

435.9

-24.7%

Western Europe without DACH *

94.6

125.8

-24.8%

302.6

389.0

-22.2%

Southern Europe*

82.5

137.3

-39.9%

257.2

438.1

-41.3%

Northern / Eastern Europe *

61.6

82.7

-25.5%

184.6

265.3

-30.4%

Other regions *

20.8

25.9

-19.7%

64.1

73.0

-12.1%

New factoring company

178.5

154.4

15.6%

509.1

467.7

8.8%

– of which Germany

51.2

40.6

26.0%

158.5

132.2

19.9%

– of which International

127.3

113.7

11.9%

350.6

335.6

4.5%

GRENKE Bank

Deposit volume **

1521.3

1300.0

17.0%

1521.3

1300.0

17.0%

New business SME loan activity

0.9

32.1

-97.2%

21.8

104.3

-79.1%

Contribution margin 2 (CM2) on new business

Rental

63.6

95.2

-33.2%

207.2

289.5

-28.4%

– of which International

49.8

74.2

-32.9%

164.3

226.1

-27.3%

– of which DACH *

13.8

21.0

-34.3%

42.9

63.5

-32.4%

Western Europe without DACH *

17.3

25.2

-31.3%

59.7

75.2

-20.6%

Southern Europe*

15.8

26.7

-40.6%

52.6

83.5

-37.0%

Northern / Eastern Europe *

12.1

16.5

-26.5%

37.0

51.0

-27.6%

Other regions *

4.5

5.9

-23.2%

15.0

16.4

-8.4%

* Regions: DACH: Germany, Austria, Switzerland
Western Europe without DACH: Belgium, France, Luxembourg, Netherlands
Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain
North | Eastern Europe: Denmark, Finland, Ireland, Latvia, Norway, Sweden, United Kingdom | Czech Republic, Hungary, Poland, Romania, Slovakia
Other regions: Australia, Brazil, Canada, Chile, Singapore, Turkey, United Arab Emirates, United States
** At the end of the period

Consolidated franchise companies:
Leasing: Australia (2x), Canada (3x), Chile, Latvia, Singapore, USA
Factoring: Great Britain, Hungary, Ireland, Poland

The quarterly statement for the third quarter and the first nine months of 2021 will be published on November 10, 2022.

For more information, please contact:

GRENKE AG
Investor Relations Team
Neuer Markt 2
76532 Baden-Baden
Telephone: +49 7221 5007-204
Email: [email protected]
Website: www.grenke.de

Press contact
Stefan Wichmann
Executive Communication Council
Neuer Markt 2
76532 Baden-Baden
Email: [email protected]
Mobile: +49 (0) 171 20 20 300

About GRENKE

The GRENKE Group (GRENKE) is a global financial partner for small and medium-sized businesses. As a one-stop-shop for customers, GRENKE’s products range from flexible rental of small notes and demand-driven banking products to convenient factoring. Fast and easy processing and personal contact with customers and partners are at the heart of GRENKE’s activities.

Founded in 1978 in Baden-Baden, the GRENKE Group is present in 33 countries and employs more than 1,800 people worldwide. GRENKE shares are listed on the SDAX on the Frankfurt Stock Exchange (ISIN DE000A161N30).

04.10.2021 Distribution of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this advertisement.

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