DGAP-News: GRENKE AG: GRENKE continues steadily on course -

DGAP-News: GRENKE AG / Key word(s): Miscellaneous GRENKE AG: GRENKE continues steadily on course - solid new business development during the first nine months of 2016 05.10.2016 / 07:24 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- GRENKE continues steadily on course - solid new business development during the first nine months of 2016 - New business at GRENKE Group Leasing amounted to EUR 1,122.4 million in the first nine months of 2016, corresponding to a year-on-year increase of 16.8% - New business at GRENKE Group Factoring during the same period reached EUR 254.6 million for a year-on-year rise of 10.6% - Business start-up financing at GRENKE Bank in the first nine months of 2016 increased to EUR 18.0 million for a year-on-year rise of 25.6% Baden-Baden, October 5, 2016: In the first nine months of 2016, the new business volume of GRENKE Group Leasing (including franchise partners) - i.e. the total acquisition cost of newly purchased leased assets - amounted to EUR 1,122.4 million (9M-2015: EUR 961.1 million). This corresponds to a rise of 16.8% and places us on track to reach our full-year growth forecast of 16 - 20%. GRENKE Group Factoring's new business (including franchise partners) - i.e. the total of purchased receivables - rose by 10.6% in the nine-month period to EUR 254.6 million (9M-2015: EUR 230.2 million) and thus was below our expectations. GRENKE Group's new business volume (including franchise partners) amounted to EUR 1,395.0 million (9M-2015: EUR 1,205.7 million), which marked a rise of 15.7%. The contribution margin 2 of the Leasing segment's new business reached EUR 191.6 million in the nine-month period, which is equivalent to a CM2 margin of 17.1% (9M-2015: EUR 177.8 million and 18.5%, respectively). The CM1 margin (contribution margin 1 at acquisition values) of the Leasing segment was 13.0% and amounted to EUR 145.6 million (9M-2015: 13.8% and EUR 132.4 million, respectively). The decline in the margin mainly results from the previous year's change in the calculation method and an increase in our sales activities aimed at high growth in individual markets. An isolated comparison of past quarters shows a stable development in the margin. The international share of GRENKE Group's new business in the first nine months of 2016 amounted to 72.9% in comparison to 71.4% in the previous year's same period. Whereas the growth in our Leasing segment's new business in our home market of Germany was still somewhat moderate (3.2%), the growth trend in our international markets continued. We were particularly successful in further expanding our position in our core market of France (18.4%) and the important Italian market (33.0%). Under our cell division strategy, we opened a total of three new locations in the third quarter of 2016: Wallonia (Belgium), Katowice (Poland) and Bilbao (Spain). This brought the number of locations worldwide at the quarter's end to a total of 119. In the first nine months of 2016, the GRENKE Group received a total of 285,768 lease applications (233,076 thereof were international), which resulted in 131,208 new lease contracts (105,009 thereof were international). At EUR 8,554 (9M-2015: EUR 8,472), the mean term per lease contract remained at a level customary for our business. The GRENKE Group's (Leasing segment) conversion rate (applications to contracts) in the first nine months of 2016 was 46%. The conversion rate in our international markets stood at 45% and thus was lower than the rate achieved in the German market (50%). We increased our new business volume in the Factoring segment by 10.6%. The gross margin on new business volume of EUR 109.5 million generated in Germany remained at a high level of 1.90% (9M-2015: 2.11%). In our international markets, the gross margin on new business volume totalling EUR 145.2 million was 1.24% (9M-2015: 1.37%). This margin is based on the average period for a factoring transaction in Germany of approximately 27 days (9M-2015: approx. 25 days) and approximately 37 days internationally (9M-2015: approx. 34 days). The development of GRENKE Bank's business start-up financing and microcredit business was exceptionally strong, growing year-on-year by 25.6% and reaching a total volume of EUR 18.0 million. All figures are stated in EUR million (previous year's figures have been adjusted) <pre> New business 9M-2016 9M-2015 % change GRENKE Group Leasing 1,122.4 961.1 16.8 - of which international 845.3 701.4 20.5 - of which Franchise 26.6 17.0 56.2 international - of which Germany 250.5 242.8 3.2 Western Europe* (without 363.7 315.5 15.3 Germany): Southern Europe* 315.5 239.3 31.9 Northern/Eastern Europe* 173.6 147.1 18.0 Other regions* 19.1 16.4 16.1 </pre> <pre> New business 9M-2016 9M-2015 % change GRENKE Group Factoring 254.6 230.2 10.6 - of which Germany 109.5 87.2 25.6 - of which international 105.0 110.4 -4.9 - of which Franchise 40.1 32.6 23.3 international </pre> <pre> GRENKE Bank 9M-2016 9M-2015 % change Deposits 398.2 314.8 26.5 New business start-up 18.0 14.4 25.6 financing (including the microcredit business) </pre> Development of contribution margin 2 in EUR million (previous year's figures have been adjusted) <pre> 9M-2016 9M-2015 % change GRENKE Group Leasing 191.6 177.8 7.8 - of which international 154.0 140.7 9.5 - of which Franchise 5.3 3.2 63.0 international - of which Germany 32.3 33.8 -4.4 Western Europe* (without 63.4 62.7 1.2 Germany): Southern Europe* 59.2 50.2 17.9 Northern/Eastern Europe* 33.0 28.1 17.8 Other regions* 3.6 3.0 19.6 </pre> *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, Dubai, Singapore, Turkey "Following the excellent performance in the first-half year, we were able to continue this success in the third quarter. We achieved a gratifying rise in GRENKE Group's new business in the Leasing segment of 16.8% in the nine-month period. We generated high growth rates, particularly in the key French and Italian markets where we generated roughly 44% of the Leasing segment's total new business. The new business in our Factoring segment demonstrated high credit quality, however, at 10.6%, new business growth did not meet our expectations. In our sales area, we initiated the appropriate actions to accelerate growth and are confident that these actions will be effective. We have also made steady progress in expanding our international presence. Under our cell division strategy, we opened a total of three new locations in the third quarter in Belgium, Poland and Spain and are preparing for further cell divisions in the fourth quarter," commented Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG. Jörg Eicker, Chief Financial Officer (CFO) of GRENKE AG emphasised the solid progress made on the product side: "Providing small- and medium-sized enterprises and self-employed professionals access to development funds is an integral part of GRENKE Bank's business. In the third quarter, after concluding our sixth global loan with NRW.BANK, the state development bank of North Rhine-Westphalia, we will be able to provide another EUR 30 million in development funding. Since beginning our successful cooperation in 2010, we have concluded more than 12,000 sponsored lease contracts." The quarterly statement for the third quarter and first nine months of 2016 will be published by the Company on October 28, 2016. 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: investor@grenke.de 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 offers its classic online services also 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. --------------------------------------------------------------------------- 05.10.2016 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.de --------------------------------------------------------------------------- Language: 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: investor@grenke.de 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 --------------------------------------------------------------------------- 508815 05.10.2016