GRENKE continues to grow profitably - strong new business is key factor for success
- 2018 Consolidated Group net profit increases 24%
- Proposed dividend of EUR 0.80 per share
- GRENKE Group expects dynamic growth to continue in 2019: Projected growth in Leasing new business of 14 - 19% and Factoring new business of 25%
- Net profit growth to continue to a range of EUR 147 - 156 million
Baden-Baden, February 7, 2019: GRENKE was able to further increase the profitability of its business in the past fiscal year. Consolidated net profit increased by 24% compared to the previous year's IFRS 9 adjusted figure and reached EUR 131.1 million at the end of 2018. This was at the upper end of the forecast range of EUR 126 - 132 million refined in the course of the year. Earnings per share increased to EUR 2.78 after EUR 2.31 in the previous year.
"GRENKE's value-creating business model has proven itself once again as in prior years. We continued to grow profitably thanks to continued solid contribution margins, stronger equity and a notable increase in net profit. In the current 2019 fiscal year, we expect business to continue to develop positively with an increase in new business in the Leasing segment of 14 - 19% and in the Factoring segment of 25%. We will also continue to steadily pursue our cell division strategy", summarises Antje Leminsky, Chair of the Board of Directors of GRENKE AG.
Income continues to reflect the positive impact of the strong, profitable new business of recent years and the persistent low interest rate environment. Overall, the sum of interest and similar income from financing business increased by 13.9% year-on-year from EUR 289.4 million to EUR 329.7 million. Expenses from the interest on refinancing rose from EUR 42.8 million in 2017 to EUR 46.7 million in 2018 and net interest income increased year-on-year by 14.7% from EUR 246.6 million to EUR 282.9 million. After settlement of claims and risk provision, net interest income rose by 15.5% to EUR 191.1 million after EUR 165.4 million in 2017.
Profit from service and new business rose sharply by 21.1% and 20.7%, respectively, as a result of a strong increase in new business volume over the past fiscal year. The Consolidated Group's income from operating business increased by 20.4% from EUR 296.8 million in the previous year to EUR 357.3 million.
The average number of employees at the GRENKE Consolidated Group, including acquisitions, rose by 18.5% to 1,456 in the year under review. Staff costs increased by 19.1% to EUR 102.7 million in 2018 (previous year: EUR 86.2 million). Selling and administrative expenses increased by 15.3% as a result of the growth in the Consolidated Group and due to an increase in sales and marketing activities. The rise in IT project costs from EUR 6.2 million to EUR 7.5 million underscores our long-term investment in digital innovation to ensure that GRENKE is well prepared for the future.
Sebastian Hirsch, Member of the Board of Directors of GRENKE AG, highlighted that "In 2018, we continued to increase our proximity to our customers by setting up new locations. Today we are active in 32 countries. Next to completing a number of cell divisions in our existing markets in 2019, we will also prepare to enter the US market with our leasing offers. If the outcome of the feasibility study is positive, we expect to start our US business in the first half of 2020. For the current 2019 fiscal year, we expect our profitable growth to continue and anticipate a Consolidated Group net profit in the range of EUR 147 to 156 million."
The operating result exceeded the previous year's level of EUR 135.7 million by 15.9% and reached EUR 157.2 million. Net profit for the reporting period increased by 24.4% from EUR 105.4 million in the previous year to EUR 131.1 million. Despite renewed strong organic and acquisition-related growth, the cost-income ratio remained stable, equalling less than 60% during the past fiscal year. The Consolidated Group balance sheet structure was solid as per December 31, 2018, and the equity ratio rose again to 18.5%, thereby remaining above our long-term benchmark of at least 16%.
In light of the very pleasing business development in 2018 and the continued positive outlook for the Company, the Supervisory Board and the Board of Directors are proposing a dividend of EUR 0.80 per share to the GRENKE AG Annual General Meeting on May 14, 2019. The Company distributed a dividend of EUR 0.70 per share in the previous year.
Overview of key figures (in EUR millions)
||Change in %
|New business GRENKE Group Leasing
|New business GRENKE Group Factoring
|New business SME lending business
(incl. business start-up financing)
|CM2 margin on new business Leasing in %
|Net profit GRENKE Consolidated Group
|Cost-income ratio in %
|Equity ratio in %
|Consolidated Group's average number of employees
The GRENKE Consolidated Group's Annual Report for the 2018 fiscal year is available at www.grenke.de/grenke-group/investor-relations/reports-downloads.
For further information, please contact:
Neuer Markt 2
Phone: +49 7221 5007-204
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 32 countries and employs more than 1,500 staff worldwide. GRENKE shares are listed in the SDAX on the Frankfurt Stock Exchange (ISIN DE000A161N30).
Further information about GRENKE and its products is available at www.grenke.de/grenke-group.
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