GRENKE AG: GRENKE New Business Q2 2021: Back to concluding more contracts

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DGAP-News: GRENKE AG / Keyword (s): Miscellaneous
02.07.2021 / 07:01
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GRENKE New Business Q2 2021: Return to the conclusion of more contracts – First indications of standardization

The number of new leases increases again year on year for the first time since the start of the pandemic

– New rental business of 398.6 million euros at the level of the previous year (Q2 2020: 402.3 million euros)

– CM2 margin of 18.1% higher than the same quarter of the previous year (Q2 2020: 17.5%)

– New syndicated revolving credit line with a total volume of 250 million euros

– GBB lowers the rating from A to A-

– Half-year financial report and analyst call scheduled for August 4, 2021

Baden-Baden, July 2, 2021: GRENKE AG, a global financial partner for small and medium-sized businesses, generated new leasing business of € 398.6 million in the second quarter of 2021, the same level as the previous year (Q2 2020: 402.3 euros million). The number of new contracts increased by 11.3% in the second quarter of 2021 to reach 56,078, which is the first year-over-year increase since the start of the Covid-19 pandemic. The contribution margin 2 of new leasing business also increased, from 17.5% in the same quarter of the previous year to 18.1% in the reference quarter. New leasing activity is defined as the total acquisition cost of all newly purchased leased assets.

“When you look at the last few months, it becomes obvious that things are on the rise. At the same time, we find ourselves in a market environment which continues to be dominated by the pandemic”, explains Dr Sebastian Hirsch, director financial. Director of GRENKE AG, adding: “With the onset of the Covid-19 crisis, we have focused our new business activities specifically on risk mitigation and small businesses. This strategy has worked, and now we are about to take the next step where we also want to gradually increase volumes. We have fulfilled a key prerequisite to achieve this through our syndicated loan.

Regional development of new rental activities

The timing of the development of the pandemic on a regional basis has varied considerably. These differences are very visible when comparing operating performance. At the start of the second quarter of 2020, new business in Germany was even less affected by the pandemic. Compared to this relatively robust performance a year ago, the DACH region saw a year-over-year decrease in new rental business in the second quarter of 2021 of € 111.1 million (Q2 2020: € 131.6 million). euros). Western Europe without DACH, on the other hand, recorded a significant increase of 27.8% over the same period. GRENKE recorded substantial growth in the second quarter of 2021, particularly in France, the Netherlands and Luxembourg. In the Southern Europe region, on the other hand, new business was down 12.2% year-on-year. The strength of new business development in Spain, Portugal and Croatia was not able to fully offset the decline in the number of contracts in Italy. In Northern and Eastern Europe, GRENKE recorded growth in new rental activity of 6.0%, driven by significant growth in Great Britain and Poland. The other regions recorded new leasing business of 20.9 million euros, an increase of 11.0% compared to the previous year.

Evolution of the contribution margin

At 72.1 million euros, the contribution margin 2 (CM2) of the new rental activity is close to the level of 70.4 million euros recorded in the same quarter of the previous year. The CM2 margin increased again and reached 18.1% in Q2 2021 (Q2 2020: 17.5%), thanks to the continued and constant focus on the profitable small note business. The average acquisition value per lease was EUR 7,108 during the reference quarter (Q2 2020: EUR 7,985). GRENKE defines “small notes” as rental contracts with a volume of between 500 and 25,000 euros.

The contribution margin 1 (CM1) in Q2 2021 was 2.8% lower in the same quarter of last year at 47.2 million euros (Q2 2020: 48.5 million euros). As a result, GRENKE achieved a CM1 margin of 11.8%, just below the level of the previous year (Q2 2020: 12.1%).

Regional evolution of contribution margins

A comparison of contribution margins 2 also reveals the dramatic differences in terms of timing and regional developments during the pandemic. While a decrease in contribution margin 2 of 21.6% was recorded in the DACH region, Western Europe outside the DACH region recorded substantial growth of 26.8%. In Southern Europe, the contribution margin 2 in Q2 2021 is down slightly by 3.5%, while Northern / Eastern Europe shows growth of 11.5%. The other regions were able to achieve annual growth of 12.3%.

During the reference quarter, GRENKE received a total of 117,387 rental requests – the first year-over-year increase since the start of the pandemic (Q2 2020: 111,934) – indicating an initial recovery on some target markets. During the reference quarter, the DACH region represented 24,673 requests and the international regions 92,714 requests. GRENKE concluded a total of 56,078 new leases during the period considered, which corresponds to a conversion rate of 48%. In the second quarter of 2020, 50,381 leases were signed, i.e. a conversion rate of 45%.

New factoring company

With a purchased receivables volume of 175.2 million euros, GRENKE recorded significant growth in its new factoring business of 23.7% during the quarter under review compared to the same period of the previous year ( Q2 2020: 141.7 million euros). Growth is primarily driven by the good performance of Germany (+ 33.3% to EUR 56.4 million). New factoring business in international markets increased by 19.6%, from 99.3 million euros in the previous year quarter to 118.8 million euros in the second quarter of 2021.

GRENKE Bank

With the adjustment of the business volume of SME lending activities carried out at the start of the year, the new lending activities of GRENKE Bank decreased by 88.7% to 6.1 million EUR in Q2 2021 (Q2 2020: EUR 54.2 million), as planned. Independently of this decrease, the deposit activity of GRENKE Bank remains an important pillar of the refinancing of the Consolidated Group, with a volume of deposits of € 1,505.2 million as of June 30, 2021 (June 30, 2020: 1,312.3 millions of euros).

Broad funding base – GBB downgrades rating from A to A-

On June 30, 2021, the GRENKE Group signed a revolving syndicated loan for a total volume of 250 million euros with seven benchmark banks. The facility has a duration of two years, with the possibility of extending the duration for up to two additional years.

The GBB-Rating Gesellschaft für Bonitätsbeurteilung mbH downgraded the GRENKE Group’s rating from A to A- on July 1, 2021. The outlook remains negative. GBB cited the main rationale for this change as being the company’s earnings situation, which is under pressure due to the Covid-19 pandemic, as well as the progress that remains to be made in governance and risk management and of the company’s compliance to restore investor confidence. . The economic viability of the business model continues to be rated high. The GRENKE Group therefore continues to benefit from a high credit rating.

Overview of new business development (in millions of euros)

Q2 2021

Q2 2020

Δ

Q1-Q2 2021

Q1-Q2
2020

Δ

New rental company

398.6

402.3

-0.9%

764.5

1,083.6

-29.5%

– including international

287.6

270.7

+ 6.2%

549.1

793.7

-30.8%

– of which DACH *

111.1

131.6

-15.6%

215.4

289.9

-25.7%

Western Europe without DACH *

109.6

85.8

+ 27.8%

208.0

263.2

-21.0%

Southern Europe*

91.3

104.0

-12.2%

174.7

300.9

-41.9%

Northern / Eastern Europe *

65.8

62.1

+ 6.0%

123.0

182.6

-32.6%

Other regions *

20.9

18.8

+ 11.0%

43.3

47.1

-8.0%

New factoring company

175.2

141.7

+ 23.7%

330.6

313.4

+ 5.5%

– of which Germany

56.4

42.3

+ 33.3%

107.3

91.5

+ 17.2%

– of which International

118.8

99.3

+ 19.6%

223.4

221.9

+ 0.7%

GRENKE Bank

Deposit volume **

1505.2

1312.3

+ 14.7%

1505.2

1312.3

+ 14.7%

New business SME loan activity

6.1

54.2

-88.7%

20.9

72.2

-71.1%

Contribution margin 2 (CM2)
on new business

Rental

72.1

70.4

+ 2.4%

143.6

194.3

-26.1%

– of which International

57.9

52.2

+ 10.8%

114.5

151.9

-24.6%

– of which DACH *

14.3

18.2

-21.6%

29.1

42.5

-31.4%

Western Europe without DACH *

21.0

16.6

+ 26.8%

42.4

50.0

-15.3%

Southern Europe*

18.8

19.5

-3.5%

36.8

56.8

-35.2%

Northern / Eastern Europe *

13.0

11.7

+ 11.5%

24.9

34.5

-28.1%

Other regions *

5.0

4.4

+ 12.3%

10.5

10.5

0.0%

* 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 | Czechia, 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, Norway, Singapore, USA
Factoring: UK, Hungary, Ireland, Italy, Poland, Portugal

The half-year financial report will be published on August 4, 2021.

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 enterprises. 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).

07/02/2021 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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