grenke reaffirms preliminary figures

• Preliminary income statement figures from October 29, 2024 reaffirmed
• Group earnings in the first nine months of the financial year at EUR 57.0 million (Q1-Q3 2023: EUR 64.4 million)
• Increasing settlement of claims and risk provision due to higher insolvencies cause earnings decline
• 2024 forecast for CM2 margin, CIR, and equity ratio reaffirmed

Baden-Baden, November 14, 2024: grenke AG, a global financing partner for small and medium-sized enterprises, reaffirms its preliminary income statement figures presented on October 29, 2024, and today published its full quarterly statement for the third quarter and Q1-Q3 2024. Group earnings for the first nine months of the financial year equalled EUR 57.0 million (Q1-Q3 2023: EUR 64.4 million). As previously reported, the year-on-year decline of 11.5% was a result of higher expenses for settlement of claims and risk provision due to the steadily rising number of insolvencies, particularly in the core markets of France, Spain, and Germany. This in turn led to a loss rate of 1.3% (Q1-Q3 2023: 1.0%). The cost-income ratio (CIR) was 58.4% (Q1-Q3 2023: 57.9%) and was primarily influenced by the goodwill impairment of the Spanish subsidiary in the third quarter in the amount of EUR 4.4 million.

Lease receivables reach a new record
Continued new business growth led to an increase in lease receivables to EUR 6.2 billion as of the end of Q3 2024, which was significantly higher than the level at the end of the same prior-year quarter (September 30, 2023: EUR 5.5 billion). Leasing new business grew year-on-year by 24.9% in the third quarter of 2024, reaching EUR 738.5 million (Q3 2023: EUR 591.1 million).

Dr Sebastian Hirsch, CEO of grenke AG: “There was no alternative to increasing our risk provisions. What’s essential now is that we stay on course, calmly and consistently, as our business model is proving successful and our new business is developing as planned. This is already reflected in the growing lease receivables, which will play a crucial role in driving earnings growth in the years to come. I am confident that we are currently in a phase where we can sustainably strengthen our market position.“

Dr Martin Paal, CFO of grenke AG: “Our target to reach three billion euros in new business for the first time is within reach – and with a solid margin. This is additionally supported by the favourable terms of our recent successful benchmark bond. We are also on track in terms of our cost management and consolidation.”

Reporting date effect influences equity ratio
In September 2024, grenke placed a benchmark bond of EUR 500 million to finance the future leasing business. As of the September 30, 2024 reporting date, this resulted in a substantial increase in liquidity to EUR 1.2 billion (December 31, 2023: EUR 0.7 billion) and a corresponding rise in refinancing liabilities to EUR 4.6 billion (December 31, 2023: EUR 3.8 billion). Consequently, the equity ratio as of September 30, 2024, equalled 16.1%, which was below the level at the end of the previous financial year (December 31, 2023: 19.1%). An equity ratio in line with the target of at least 16% is expected for the fourth quarter of 2024.

The return on equity (RoE) before taxes declined to 4.7% in the third quarter of 2024 (Q3 2023: 9.1%). For the first nine months of 2024, the RoE was 7.3% (Q1–Q3 2023: 8.2%).

2024 Outlook
grenke continues to forecast leasing new business in the range of EUR 3.0 billion and EUR 3.2 billion for the 2024 financial year and revised Group earnings of EUR 68 million to EUR 76 million. For the current financial year, grenke aims for a slight year-on-year increase in the CM2 margin, with a medium-term target of around 17%. The earnings range expectation for 2024 is based on the assumption that the loss rate will remain slightly below 1.5%. With planned investments in the digitalisation programme, grenke is aiming for a CIR under 58% in 2024. Based on the expected development of Group earnings, grenke continues to expect to achieve an equity ratio above 16%.

The Q3 and Q1-Q3 2024 quarterly statement is available online under “Reports & Presentations”.

 

Key figures at a glance (in EUR million)

  Q3 2024 Q3 2023 ∆ in % Q1-Q3 2024 Q1-Q3 2023 ∆ in % Leasing new business 738.5 591.1 24.9 2,198.6 1,851.6 18.7 CM2 margin of
leasing new business in % 17.0 16.5 0.5 pp 16.8 16.7 0.1 pp Group earnings 12.0 24.0 -49.9 57.0 64.4 -11.5 Earnings per share in euros 0.30 0.53 -43.4 1.10 1.27 -13.4 Cost-income ratio in % 60.8 57.0 3.8 pp 58.4 57.9 0.5 pp Loss rate in % 1.5 1.1 0.4 pp 1.3 1.0 0.3 pp RoE before taxes in % 4.7 9.1 -4.4 pp 7.3 8.2 -0.9 pp Average no. of employees in full-time equivalents 2,195 2,112 3.9 2,177 2,052 6.1

 

	Sep. 30, 2024	Dec. 31, 2023	∆ in %
Equity ratio in %	16.1	19.1	-3.0 pp

_{Note: Rounding differences may occur between individual values and the actual figure achieved in euros.}

About grenke
The grenke Group (grenke) is a global financing partner for small and medium-sized companies. As a one-stop shop for customers, grenke’s products range from flexible small-ticket leasing and demand-driven bank products to convenient factoring. Fast and easy processing and personal contact with customers and partners are at the centre of grenke’s activities. Founded in 1978 in Baden-Baden, the Group operates in more than 30 countries and employs approximately 2,200 staff (measured in terms of full-time equivalents) worldwide. grenke shares are listed on the Frankfurt Stock Exchange (ISIN DE000A161N30).