GRENKE increases earnings in the first quarter and continues profitable growth
- Net profit in the quarter increases 13.6% to EUR 33.6 million (3M-2018: EUR 29.6 million)
- Good basis created for reaching annual targets in the further course of the year
Baden-Baden, May 3, 2019: The GRENKE Consolidated Group has successfully started the 2019 fiscal year. In the first quarter, net profit increased 13.6% year-on-year from EUR 29.6 million in the first quarter of 2018 to EUR 33.6 million in the reporting quarter. With this result, GRENKE has set the course towards reaching its 2019 fiscal year financial targets. The Board of Directors continues to expect net profit for the full year in the range of EUR 147 million and EUR 156 million.
Antje Leminsky, Chair of the Board of Directors of GRENKE AG, commented: "We have had a successful start to the 2019 fiscal year. The first quarter results, our new brand positioning 'Fast. Forward. Finance' and optimised product offers for our customers give us the tailwinds and confidence we need to reach our annual targets."
The Consolidated Group's income continues to reflect the strong level of new business recently achieved. GRENKE also continues to be in a position to actively steer its contribution margins in the financing business in a risk-appropriate manner and to utilise its excellent capital market reputation for refinancing. Interest and similar income from financing business increased by a total of 14.2%.
Expenses from interest on refinancing rose by 15.6% to EUR 12.5 million. Net interest income increased by 14.0% from EUR 67.7 million in the first quarter of the prior year to EUR 77.2 million in the reporting quarter. Net interest income after settlement of claims and risk provision grew 6.9% to EUR 49.0 million compared to EUR 45.9 million in the same quarter of the previous year. The Consolidated Group's loss rate based on the total risk provision in accordance with IFRS 9 amounted to 1.5% compared to 1.4% in the same quarter of the previous year.
"We have been able to generate steady and strong new business in recent periods. During this time, the expenses for the settlement of claims and risk provision have increased less than new business growth. In this context, the slightly higher loss rate in the first quarter was in line with our expectations, remaining at the long-term target level, which is reflected in the calculation of our contribution margins," explained Sebastian Hirsch, member of the Board of Directors of GRENKE AG, in his comments about the development of the loss rate during the first quarter.
Profit from service business and new business each recorded a sharp increase of 18.0%. The Consolidated Group's income from operating business increased by 14.4% from EUR 82.2 million in the previous year to EUR 94.0 million.
Taking into account the latest acquisitions and cell divisions, the average number of employees at the GRENKE Consolidated Group increased by 17.0% to 1,593 employees compared to the same quarter last year. Staff costs were correspondingly 13.1% higher than in the previous year, and selling and administrative expenses also recorded a growth-related rise of 2.8% due to intensified sales and marketing activities.
The first quarter's operating result exceeded the previous year's figure of EUR 35.7 million by 16.2%, reaching EUR 41.5 million. As mentioned above, first-quarter net profit rose 13.6%, from EUR 29.6 million in the previous year to EUR 33.6 million. This resulted in earnings per share of EUR 0.58 after EUR 0.56 in the previous year. The Consolidated Group's balance sheet structure as per March 31 also remained solid. The equity ratio reached 18.0%, and therefore exceeded our long-term benchmark of 16%.
GRENKE was well-positioned in the first quarter in terms of its refinancing. In addition to various small-volume instruments, the Consolidated Group issued an additional EUR 300 million bond, which was placed successfully in February 2019. "The process of refinancing our new business in the first three months of 2019 was very positive. Particularly noteworthy was the successful placement of the five-year bond with a volume of EUR 300 million due to our excellent reputation in the capital market. GRENKE will continue to benefit in the future from its broadly diversified refinancing structure," explained Sebastian Hirsch, member of the Board of Directors of GRENKE AG, in his comments on the situation in the first quarter.
The quarterly statement for the first quarter is available online at www.grenke.de/grenke-group/investor-relations/reports-downloads.
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 (in full-time equivalents)
*Previous year's figures adjusted in accordance with IFRS 9
Please note: Rounding may result in differences in individual values compared to the values actually achieved in EUR.
For further information, please contact:
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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 Company 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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