Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Xetra  >  Grenke AG    GLJ   DE000A161N30

GRENKE AG

(GLJ)
  Report
Delayed Quote. Delayed Xetra - 11/27 11:35:18 am
37.96 EUR   -3.56%
11/17GRENKE : Oddo takes a positive view
MD
10/29GRENKE : Presentation Conference Call Q3 2020
PU
10/29GRENKE : Quarterly Statement for the 3rd Quarter 2020 GRENKE AG Group
PU
SummaryQuotesChartsNewsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsAnalyst Recommendations

Grenke : Presentation Conference Call Q3 2020

10/29/2020 | 11:00am EST

EARNINGS PRESENTATION Q3 2020

OCTOBER 29, 2020

Disclaimer

This presentation contains forward-looking statements. Forward-looking statements are statements that are neither facts nor a description of past events; they comprise statements relating to our assumptions and expectations. Each statement made in this presentation that reflects our intentions, assumptions, expectations or forecasts as well as the underlying presumptions is a forward-looking statement. These statements are based on planning figures, estimates and forecasts currently available to the Board of Directors of GRENKE AG. Accordingly, forward-looking statements refer exclusively to planning data, estimates and forecasts at the time at which they are made. We assume no responsibility to further develop or modify such statements in the event of fresh information being available or future events occurring. By their very nature, forward-looking statements imply risks and uncertainty factors. A large number of key factors can contribute towards actual events varying quite substantially from forward-looking statements. Such factors include the condition of the financial markets and the regional focal points of our investment activities.

This document is not for publication or distribution, directly or indirectly, in or into the United States. This document does not constitute or form part of an offer of securities or subscription rights for sale or solicitation of an offer to purchase securities or subscription rights in the United States, Canada, Australia, Japan or in any other jurisdiction where such offer may be restricted. The securities and subscription rights referred to in this document have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States or to or for the account or benefit of US persons (as such term is defined in Regulation S under the Securities Act), except on the basis of an applicable exemption from registration or in a transaction not subject to the registration requirements of the Securities Act. There will be no public offering of securities and subscription rights in the United States or anywhere else, except for Germany.

Leasing - Banking - Factoring | Investor Relations // GRENKE // 2

Executive Summary

Antje Leminsky |

Chair of Board of Directors

Leasing - Banking - Factoring | Investor Relations // GRENKE // 3

Well Underway Despite Unforeseeable Circumstances

SUMMARY ON Q3-2020

Solid Q3 business performance given the COVID-19 pandemic

  • Profitable quarter finished
  • Good new business momentum
  • Improved but volatile customer demand
  • Increased CM2 margin
  • Risk provisions on expected level
  • Solid liquidity and equity position

Good progress with rebutting short seller accusations

  • Task Force established
  • Professional support mandated
  • Auditors well under way
  • Exchange with many stakeholders
  • Employees strongly supportive
  • Frequent alignment with Supervisory Board and decision on next steps

Leasing - Banking - Factoring | Investor Relations // GRENKE // 4

GRENKE AG Strengthens Board of Directors and Integrates Franchise System

INTEGRATE FRANCHISE COMPANIES

01

REINFORCE BOARD OF DIRECTORS

02

Leasing - Banking - Factoring | Investor Relations // GRENKE // 5

01 | Integrate Franchise Companies

ACQUISITION OF REMAINING FRANCHISE COMPANIES; FUTURE EXPANSION VIA START-UPS

  • GRENKE AG intends to integrate existing 16 franchise companies not yet acquired - Board of Directors to initiate talks immediately with these companies' prior owners
  • Any transactions to be based on independent value assessments
  • Acquisitions of financial investors' interests to be completed in stages over next 12 to 18 months
  • GRENKE AG to carry out pro-formaconsolidation as early as the 2020 annual financial statements and show anticipated expected effects on the balance sheet
  • Continued successful expansion through GRENKE start-ups without external financial investors

Leasing - Banking - Factoring | Investor Relations // GRENKE // 6

02 | Reinforce Board of Directors

CRO POSITION CREATED; A. LEMINSKY RESPONSIBLE FOR INTERNAL AUDIT; S. HIRSCH APPOINTED AS CFO

  • Supervisory Board creates new position of Chief Risk Officer (CRO) on Board of Directors level
    • Group-wideresponsibility for Risk Controlling, Legal Affairs and Compliance
    • Search for suitable candidates has begun
    • GRENKE AG to review key compliance guidelines as well as secondary employment and roles of employees within and outside Consolidated Group
  • Antje Leminsky, Chair of Board of Directors, becomes responsible for Internal Audit, effective immediately
  • Sebastian Hirsch appointed as Chief Financial Officer (CFO), effective immediately
  • Further adjustments in departmental responsibilities to be implemented following expansion of
    Board of Directors

Leasing - Banking - Factoring | Investor Relations // GRENKE // 7

Q3 2020: Executive Summary

FOCUS ON PROFITABILITY WHILE MAINTAINING CONSERVATIVE FUNDING PROFILE

  • Sequential recovery in new business across all regions despite COVID-19 pandemic (EUR 704m, -19.2%yoy, +17.7% qoq)
  • Managed to increase CM2 margin through focus on profitable small-ticket business (18.4%, +1.3pp yoy, +0.9pp qoq)
  • Operating income impacted by COVID-induced risk provisions (EUR 25.9m, -40.0%yoy, +28.2% qoq)
  • Current business fully financed with diversified mix
    (57% unsecured funding, 28% GRENKE Bank, 15% asset-based funding)
  • Solid equity ratio

(17.1% as of September 30, 2020 vs. 16.9% as of September 30, 2019)

Leasing - Banking - Factoring | Investor Relations // GRENKE // 8

Guidance Q4 / FY2020

AS OF OCTOBER 28, 2020

Guidance as of February 11, 2020

Current view

(without the impact of the COVID-19 pandemic)

Net profit EUR 153m - 165m

FY 2020 loss rate up to 2.3%

Cost/income ratio < 46%

Equity ratio above 16%

Q4 new business at 60%

Loss rate between 1.5% - 1.6%

of last year's Q4 level

Equity ratio above 16%

New business leasing growth 14 - 18%

Leasing - Banking - Factoring | Investor Relations // GRENKE // 9

Financials

Sebastian Hirsch | Chief Financial Officer

Leasing - Banking - Factoring | Investor Relations // GRENKE // 10

Development of Profitability

GROWTH IN PERCENTAGE CONTRIBUTION MARGIN 2 IN Q3 2020

New business in EUR millions

+1.6%

-45.2%

670.3

681.3

734.6

-24.6%

686.8

517.6

Q3 2020 with growth in

CM2 percentage margin

16.6

12.0

18.2

12.9

16.6

12.4

402.3

17.5

12.1

17.1

18.4

12.6

12.7

despite decline in new

business

Improvement primarily

attributable to the profitable

small-ticket business

Q1 2019

Q1 2020

Q2 2019

Q2 2020

Q3 2019

Q3 2020

New business leasing

CM1* margin in %

CM2** margin in %

*CM1 is calculated as the present value of the interest margin net of commissions paid to third parties

**CM2 is calculated as the present value of the operating income from a lease contract including cost of risk, profit from service business and gains/losses from disposals

Leasing - Banking - Factoring | Investor Relations // GRENKE // 11

Q3 2020: Key P&L Figures

ENHANDCED RISK PROVISIONING MAIN SWING FACTOR ON EARNINGS

Key figures

Q3 2020

Q3 2019

Net interest income

EUR 96.0m

EUR 93.6m

+ 2.5 %

Settlement of claims & risk provisioning

EUR 48.8m

EUR 32.2m

+ 51.7 %

Operating result

EUR 25.9m

EUR 43.2m

- 40.0 %

Net profit

EUR 17.7m

EUR 35.6m

- 50.3 %

EPS

EUR 0.38

EUR 0.77

- 50.6 %

Leasing - Banking - Factoring | Investor Relations // GRENKE // 12

Settlement of Claims and Risk Provisions for Lease Receivables

AS OF SEPTEMBER 30, 2020

Gross Lease Receivables by Country and Stage of Impairment

In EUR

5.042

516

539

6.096

millions

100%

80%

60%

40%

20%

0%

Stage 1

Stage 2

Stage 3

Sum

Germany

France

Italy

Other countries

Risk Provisions on Balance Sheet by Stage of Impairment

In EUR

80.872

61.828

324.772

467.472

millions

400.000

300.000

200.000

100.000

0

Stage 1

Stage 2

Stage 3

Impairment for non-performing loans

Risk provisions for deferrals

Risk provisions for performing loans (without deferrals)

Leasing - Banking - Factoring | Investor Relations // GRENKE // 13

Funding Mix as of September 30, 2020

STRONG DIVERSIFICATION − SOLID EQUITY RATIO OF 17.1%

Approx.

Approx.

Approx.

EUR 3,384m

EUR 1,667m

EUR 884m

57%

28%

15%

Leasing - Banking - Factoring | Investor Relations // GRENKE // 14

Cash Flow Q1-Q3 2020

12% OF NEW BUSINESS FUNDED BY OWN CASH FLOW

LIQUDITY GROWTH BASED ON STRONG CASH FLOW OF EXISTING PORTFOLIO

Net investment for new business leasing

EURk

2020

Q1-Q3

- Investments in new lease receivables

-1,595,206

+ Addition of new refinancing (excl. deposit business)

986,858

+ Net addition to deposit business

413,594

(I) Cash flow from investments in new business

-194,754

+ Payments by lessees

1,572,038

- Repayments of refinancing (excl. deposit business)

-1,039,408

(II) Cash flow from existing business

532,630

(III) Other cash flow from operating activities

95,212

Cash flow from operating activities

433,088

(I) + (II) + (III)

own cash:

Cash flows for

194.754

new funding (ex.

new net deposits:

new business?

Deposits): 986.858

413.594

0 € 250.000 € 500.000 € 750.000 € 1.000.000 € 1.250.000 € 1.500.000 € 1.750.000 €

Cash flows for

own cash: 532.630

repayment funding:

existing

1.039.408

business?

Cash in from running leasing contracts

Leasing - Banking - Factoring | Investor Relations // GRENKE // 15

Q & A Session

Leasing - Banking - Factoring | Investor Relations // GRENKE // 16

Appendix

Leasing - Banking - Factoring | Investor Relations // GRENKE // 17

Q3 2020: Group New Business Development

NEW BUSINESS WITH GOOD MOMENTUM DESPITE COVID-19 PANDEMIC

New business development GRENKE Group 2019 - 2020, in EUR millions

-19.2%

1.000

961.7

871.0

870.9

+17.7%

800

704.1

600

598.1

400

200

0

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

New business by share of segment Q3 2020

4.6%

21.9%

LEASING

IS OUR

CORE

BUSINESS

73.5%

Leasing

Factoring

SME lending business

Leasing - Banking - Factoring | Investor Relations // GRENKE // 18

Q3 2020: New Business by Segment

CORE LEASING BUSINESS PRIMARY DRIVER OF SEQUENTIAL NEW BUSINESS GROWTH

Quarterly comparison of new business by segment in EUR millions

GRENKE GROUP LEASING

GRENKE BANK*

-24.6%

686.8

+28.7%

517.6

+130.6%

402.3

-40.8%

54.2

32.1

13.9

Q3 2019

Q2 2020

Q3 2020

Q3 2019

Q2 2020

Q3 2020

GRENKE GROUP FACTORING

-9.3%

+9.0%

170.2

141.7

154.4

Q3 2019

Q2 2020

Q3 2020

*GRENKE Bank New Business only includes SME lending business

Leasing - Banking - Factoring | Investor Relations // GRENKE // 19

Q3 2020: Leasing New Business by Region

DACH REGION AGAIN MOST RESISTANT TO COVID-19 PANDEMIC

Leasing new business Q3 2019/2020 by core market, in EUR millions

-30.8%

-11.8%

-26.3%

198.2

165.6

170.7

-30.6%

146.0

137.3

125.8

119.2

82.7

-22.0%

GER

GER

FR

FR

IT

IT

33.2

25.9

Q3 2019

Q3 2020

Q3 2019

Q3 2020

Q3 2019

Q3 2020

Q3 2019

Q3 2020

Q3 2019

Q3 2020

DACH

Western Europe

Southern

North/East

Other

(without DACH)

Europe

Europe

regions

Q3 YoY COMPARSION:

Leasing new business in total: -24.6%

Thereof:

  • Germany: -12.5%
  • France: -28.8%
  • Italy: -34.5%

Leasing - Banking - Factoring | Investor Relations // GRENKE // 20

Q1-Q3 2020: Leasing Object Categories

YEARLY DEVELOPMENT

Object portfolio in % of NAV

IT equipment (incl. notebooks)

Machinery and other equipment

Photocopying equipment

Medical equipment

Telecommunications

General office 3.3%

technology 3.7%

Security 3.4%

equipment 3.7%

8.8%

8.6%

7.7%

7.7%

34.1%

34.7%

21.2%

22.5%

18.3%

18.4%

KEY FIGURES

  • New contracts Q1-Q3 2020: 190,328
  • Average duration: 48 months
  • Average ticket size: EUR 8,413

Others

3.2%

As of September 30, 2020

1.9%

As of September 30, 2019

Leasing - Banking - Factoring | Investor Relations // GRENKE // 21

CM2 Reconciliation

Reconciliation of CM2 calculation of Leasing new business Q3 2020 (total lifetime) in EUR millions

29 24 24

66

CM1 Forecast Forecast Forecast

for forfor

subsequent losses service

business*business

95

CM2

of operating result Q3

the period) in EUR

Reconciliation

2020, P&L (for

millions

0

18

49

29

26

14

96

8

84

26

NET

Settlement

Profit from

Profit from

Gains/los-

OPER- Staff costs

Selling

Depre-

OPER-

INTEREST

of

service

new

ses from

ATING

and

ciation and

ATING

INCOME

claims/risk

business**

business

disposals

INCOME

admin.

impairment

RESULT

provision

expenses

* In the income statement, the expected residual value is reflected in the interest income for the period. **Corresponding items for the CM2 calculation are not relevant as the diagram reflects the lifetime period.

Leasing - Banking - Factoring | Investor Relations // GRENKE // 22

CM2 Reconciliation

Reconciliation of CM2 calculation of Leasing new business Q1-Q3 2020 (total lifetime) in EUR millions

of operating result Q3

the period) in EUR

Reconciliation

2020, P&L (for

millions

92

78

73

203

290

CM1

Forecast

Forecast

Forecast

CM2

for

for

for

subsequent losses

service

business*

business

2

162

53

85

84

34

295

32

248

77

NET

Settlement

Profit from

Profit from

Gains/los-

OPER- Staff costs

Selling

Depre-

OPER-

INTEREST

of

service

new

ses from

ATING

and

ciation and

ATING

INCOME

claims/risk

business**

business

disposals

INCOME

admin.

impairment

RESULT

provision

expenses

* In the income statement, the expected residual value is reflected in the interest income for the period. **Corresponding items for the CM2 calculation are not relevant as the diagram reflects the lifetime period.

Leasing - Banking - Factoring | Investor Relations // GRENKE // 23

Development of Equity/RoE

STABLE DEVELOPMENT OF KEY RATIOS

Development of equity and RoE 2016 - 2019

20%

17.7%

18.5%

17.4%

17.5%

16.9%

17.1%

15%

10%

5%

15.0%

14.6%

12.1%

11.4%

12.0%

5.9%

0%

2016

2017

2018

2019

Q3 2019

Q3 2020

Equity ratio (balance sheet)

ROE after tax

Total capital ratio acc. to CRR

Capital ratios as of September 30, 2020

as a % of total assets (risk-weighted assets)

22.2%

17.1%16,6%

16.0%*

11.5%**

Balance sheet equity

Economic capital (embedded value)

Regulatory capital

* Long-term minimum set by management

** Minimum set by regulatory body

Leasing - Banking - Factoring | Investor Relations // GRENKE // 24

2008 Post-Crisis Business Development

SCENARIO MODELING

New business leasing 2008 - 2011

900

18.5%

9

80043.3%

700 -16.5%

600

8

500

400

300

7

200

100

0

6

2008

2009

2010

2011

New business leasing (left scale, in EUR millions) Avg. ticket size (right scale, in EUR thousands)

Net profit 2008 - 2011

50

41.4%

5%

40

-25.7%

4%

13.0%

30

3%

20

2%

10

1%

0

0%

2008 2009 2010 2011

Net profit (left scale, in EUR millions)

Loss rate (right scale)

LARGE VARIETY OF ADVANCEMENTS SINCE CRISIS IN 2008

  • Acquisition of
    GRENKE BANK
  • Strong increase in diversification of object categories
  • Further increase in digitalisation
  • Strong expansion: Today in 153 branches and 33 countries

Leasing - Banking - Factoring | Investor Relations // GRENKE // 25

Q3 2020: Cost/Income Ratio

AS OF DECEMBER 31, 2019

48%

AVERAGE: 44.6 %

47%

46%

45%

44%

43%

42%

41%

40%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

CIR

COST/INCOME RATIO

Q3 2020: 45.5%

Q2 2020: 40.2%

Q1 2020: 43.5%

Leasing - Banking - Factoring | Investor Relations // GRENKE // 26

Development of Losses (1/2)

12-YEAR VIEW OF LOSS RATE DEVELOPMENT

Loss rate* (left column)

3%

600%

PEAK AT 1.9%

500%

2%

400%

300%

AVERAGE: 1.5%

1%

200%

100%

0%

0%

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Volume of leased assets (2007 = 100%)

Loss rate (left column)

* Losses p.a. (of historical asset values, factored in) *** New calculation of CM2 margin

  • Loss rate averaging 1.5% over the last 12 years
  • Volume of leased assets reached roughly 5.5x in 2019 compared to base year 2007
  • Proven scalability of business while keeping losses on low levels

Leasing - Banking - Factoring | Investor Relations // GRENKE // 27

Development of Losses (2/2)

12-YEAR VIEW OF LOSS EXPECTATIONS

Loss Expectations

8%

7%

6%

5%

4%

3%

2%

1%

0%

2007

2008

2009

2010

2011

2012*

2013

2014

2015*

2016

2017*

2018

2019

Calculated loss expectations at contract start

Calculated actual loss expectations per end of period

*New calculation of CM2 margin

  • Portfolio loss expectations for the total contract duration (on average 48 months) typically ranged between 4 - 6%
    (total contract duration view)
  • Low deviation between calculated loss expectations at contract start versus actual losses

Leasing - Banking - Factoring | Investor Relations // GRENKE // 28

GRENKE Group Uses Matched Funding

TREASURY IS STRONGLY FOCUSED ON FINANCING THE CORE BUSINESS

MATURITY BY FUNDING TYPE

1000

∑ 997

∑ 851

567

∑ 871

800

466

528

415

∑ 503

600

∑ 306

338

205

227

400

200

120

150

25

95

98

50

68

37

40

77

11

0

11

0

2020

2021

2022

2023

2024

Medium term notes (MTN)

Promissory notes (Schuldscheindarlehen)

Term deposits GRENKE Bank

Global loans

MATCHED FUNDING STRUCTURE AS OF AUGUST 2020

8.000,00

4.000,00

-

-4.000,00

-8.000,00

31/08/2020

31/08/2021

31/08/2022

31/08/2023

31/08/2024

31/08/2025

Assets

Cash

Debt

Leasing - Banking - Factoring | Investor Relations //

GRENKE //

29

Reminder: Restated Financial Statements for IFRS 16 Lessor Accounting

SPECIFIED STANDARD REQUIRED ADJUSTMENT OF INITIAL DIRECT COSTS (IDC)

  • IFRS 16 standards had specified the definition of IDCs
  • Since then, IDCs include only variable costs that occur in direct connection to a lease contract, thus excluding imputed fixed costs
  • Restatement mainly shifted positions within the income statement and had marginal bottom-line effect
  • Balance sheet was affected by a slight decrease in equity (below 1% of total equity)
  • Profitability and operational business were unaffected

IMPACT ON KPIs

CIR

CM1

Positive

-

Negative

None -

CM2

EPS/Net

profit

-

Equity ratio

Loss ratio

-

Leasing - Banking - Factoring | Investor Relations // GRENKE // 30

Contact

INVESTOR RELATIONS TEAM

Phone:

+49

7221 5007-204

Fax:

+49

7221 5007-4218

Email:

investor@grenke.de

Internet:

www.grenke.com

GRENKE AG

Neuer Markt 2

76532 Baden-Baden

Germany

Reports are available at:

www.grenke.com/investor-relations/reports-downloads

Leasing - Banking - Factoring | Investor Relations // GRENKE // 31

Capability

Scalability SME focus Growth Diversification Awareness

Digitalisation

Disclaimer

Grenke AG published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 15:59:05 UTC


© Publicnow 2020
All news about GRENKE AG
11/17GRENKE : Oddo takes a positive view
MD
10/29GRENKE : Presentation Conference Call Q3 2020
PU
10/29GRENKE : Quarterly Statement for the 3rd Quarter 2020 GRENKE AG Group
PU
10/29Q3 2020 : GRENKE increases net interest income year-on-year despite the corona p..
PU
10/29GRENKE : reinforces Board of Directors and integrates franchise system
PU
10/29GRENKE AG : GRENKE AG reinforces Board of Directors and integrates franchise sys..
EQ
10/29GRENKE AG : Q3 2020: GRENKE increases net interest income year-on-year despite t..
EQ
10/20GRENKE AG : GRENKE provides an update on the status of Company-commissioned audi..
EQ
10/09GRENKE AG : Release according to Article 40, Section 1 of the WpHG [the German S..
EQ
10/08GRENKE AG : Release according to Article 40, Section 1 of the WpHG [the German S..
EQ
More news
Financials
Sales 2020 570 M 682 M 682 M
Net income 2020 66,4 M 79,5 M 79,5 M
Net Debt 2020 5 447 M 6 516 M 6 516 M
P/E ratio 2020 27,8x
Yield 2020 1,39%
Capitalization 1 765 M 2 110 M 2 111 M
EV / Sales 2020 12,7x
EV / Sales 2021 12,3x
Nbr of Employees 1 753
Free-Float 56,1%
Chart GRENKE AG
Duration : Period :
Grenke AG Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends GRENKE AG
Short TermMid-TermLong Term
TrendsBullishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 7
Average target price 53,00 €
Last Close Price 37,96 €
Spread / Highest target 73,9%
Spread / Average Target 39,6%
Spread / Lowest Target -5,16%
EPS Revisions
Managers
NameTitle
Antje Leminsky Chairman-Management Board
Ernst-Moritz Lipp Chairman-Supervisory Board
Mark Kindermann Chief Operating Officer
Sebastian Hirsch Chief Financial Officer
Florian Schulte Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
GRENKE AG-58.85%2 110
CHAILEASE HOLDING COMPANY LIMITED22.46%8 613
PRA GROUP, INC.17.05%1 937
ECN CAPITAL CORP.28.60%1 161
TCG BDC, INC.-18.24%616
AUSTRALIAN FINANCE GROUP LIMITED-8.79%480