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    GLJ   DE000A161N30


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PRESS RELEASE : GRENKE AG: GRENKE AG: New leasing business in the third quarter adversely affected by supply bottlenecks; increased momentum expected in the fourth quarter; guidance for 2021 adjusted

10/04/2021 | 02:32pm EST

DGAP-News: GRENKE AG / Key word(s): Change in Forecast/Miscellaneous GRENKE AG: GRENKE AG: New leasing business in the third quarter adversely affected by supply bottlenecks; increased momentum expected in the fourth quarter; guidance for 2021 adjusted 2021-10-04 / 20:31 The issuer is solely responsible for the content of this announcement.


GRENKE AG: New leasing business in the third quarter adversely affected by supply bottlenecks; increased momentum expected in the fourth quarter; guidance for 2021 adjusted

- New leasing business in Q3 2021 declines year-on-year to EUR 372.2 million (Q3 2020: EUR 517.6 million)

- CM2 margin in Q3 2021 at 17.1% (Q3 2020: 18.4%)

- Guidance for new leasing business in 2021 adjusted to EUR 1.5 billion to EUR 1.7 billion (previously EUR 1.7 billion to EUR 2.0 billion); forecast for net profit in 2021 remains at EUR 60 million to EUR 80 million

- Successful increase in bond of EUR 125 million placed

- GRENKE BANK AG accredited as selected partner for the German Federal Government's Microcredit Fund for the third consecutive time

- Previously announced change in the Board of Directors of GRENKE BANK AG completed with appointment of Dr Oliver Recklies as of October 1, 2021

Baden-Baden, October 4, 2021: GRENKE AG, a global financing partner for small and medium-sized enterprises, achieved new leasing business of EUR 372.2 million in the third quarter of 2021 (Q3 2020: EUR 517.6 million). Global supply bottlenecks, specifically at manufacturers of computer and office equipment, were the cause of the weaker year-on-year new leasing business. The contribution margin 2 declined slightly in the third quarter due to refinancing costs and amounted to 17.1% (Q3 2020: 18.4%). New business volume is the total acquisition cost of all newly purchased leased assets.

Guidance adjusted

As a result of the current developments, the Company has adjusted its guidance for new leasing business in the current financial year to EUR 1.5 billion to EUR 1.7 billion (previously EUR 1.7 billion to EUR 2.0 billion). The forecast for net profit in the current financial year remains unchanged at EUR 60 million to EUR 80 million.

GRENKE's chair of the Board of Directors, Michael Bücker: " Following my first few weeks at GRENKE AG, I am convinced of its potential as a backbone for financing SMEs." In addition, GRENKE BANK AG has been accredited as a partner bank of the German Federal Government's Microcredit Fund for the third consecutive time. In his comments, Michael Bücker stated: "Building on this strong starting position, we intend to accelerate our business in the fourth quarter of 2021 and, therefore, have launched a sales campaign." Dr Sebastian Hirsch, Chief Financial Officer of GRENKE AG, added: "With the successful increase in our latest issued bond, we have proven our refinancing ability on the capital market, laying the foundation for additional new business in the upcoming year." Regional development of new business The decline in new business can be observed in all regions - albeit to varying degrees. The strongest decline of 39.9% was recorded in the Southern Europe region. New business in the DACH region declined by 22.8%, while Northern and Eastern Europe showed a decline of 25.5%, with other regions reporting the smallest drop of 19.7%. A decline of 24.8% was experienced in the Western Europe region without DACH.

Development of the percentage contribution margin The contribution margin 2 (CM2) of the new leasing business amounted to EUR 63.6 million in the third quarter of the current financial year (Q3 2020: EUR 95.2 million). The CM2 margin was 17.1% (Q3 2020: 18.4%). The CM1 margin in the reporting quarter stood at 10.9% compared to 12.7% in the same quarter of the previous year. The CM2 margin as well as the underlying CM1 margin were primarily impacted by increased refinancing costs. Going forward, GRENKE expects refinancing costs to decrease again, leading to a return to rising contribution margins. Development of contribution margins The contribution margin 2 declined across all regions in line with new business development. The strongest decline in contribution margin 2 of 40.6% was recorded in the Southern Europe region. In the DACH region and in Western Europe excluding DACH, the contribution margin declined by 34.3% and 31.3%, respectively. The other regions and Northern and Eastern Europe were the least affected with declines of 23.2% and 26.5%, respectively.

Contribution margin 1 recorded a decrease of 38.7% to EUR 40.4 million (Q3 2020: EUR 65.9 million), with the CM1 margin falling from 12.7% in Q3 2020 to 10.9% in Q3 2021.

The GRENKE Group received a total of 100,416 lease applications in the third quarter of 2021. Of the total, 22,339 applications originated in the DACH region and 78,077 applications in international markets. At the Consolidated Group level, 48,724 new lease contracts were concluded from these applications, corresponding to a conversion rate of 49%.

With a purchased receivables volume of EUR 178.5 million, GRENKE Group Factoring's new business recorded a favourable increase of 15.6% compared to the same period in the previous year (Q3 2020: EUR 154.4 million).

GRENKE BANK's new SME lending business amounted to a mere EUR 0.9 million in the third quarter of 2021 due to the discontinuation of the lending business (Q3 2020: EUR 32.1 million). With a deposit volume of EUR 1,521.3 million as of September 30, 2021 (September 30, 2020: EUR 1,300.0 million), GRENKE BANK's deposit business continues to be an important pillar of the Consolidated Group's refinancing.

Successful bond increase of EUR 125 million

On September 9, 2021, the GRENKE Group increased an existing bond (ISIN: XS2155486942) by a further EUR 125 million, further strengthening its liquidity base for the continued development of new business. The high order book demand of over EUR 230 million confirmed the capital market's confidence in GRENKE. The issue yield is approximately 2.5%. The bonds totalling EUR 125 million will trade under the code ISIN XS2386650191 until October 25, 2021. Subsequently, they will merge into the existing quotation under ISIN XS2155486942.

German Federal Government again awards GRENKE contract for Microcredit Fund Germany GRENKE BANK has once again been awarded the Microcredit Fund Germany of the German Federal Government, under the direction of the German Federal Ministry of Labour and Social Affairs. Following the launch in 2015 and the extension three years later, this is the third time that GRENKE has assumed the role of lender of government microcredit loans of up to EUR 25,000 for micro, small and medium-sized enterprises (SMEs). In the past six years since its launch, the microcredit fund has helped a total of 1,703 micro-enterprises and SMEs to set up or expand their business with 4,656 loans with a volume of more than EUR 120 million.

New member of the Board of Directors of GRENKE BANK As already announced by the Company on June 29, 2021, the second position on the Board of Directors of GRENKE BANK AG has been newly filled in the meantime. On October 1, 2021, Dr Oliver Recklies (51) took office as a member of the Board of Directors of GRENKE BANK AG where, as the successor to Sven Noppes (45), he will be responsible for the back office. Dr Recklies holds a degree in banking and business administration and was responsible for back office, finance, risk management and controlling in his previous positions at various cooperative banks. Most recently, he worked for DZB Bank headquartered in Mainhausen. Since 2017, he has been responsible for the majority of the back office, all risk issues, IT and digitalisation as well as finance and accounting as a general representative and authorised signatory.

Overview of new business development (in EUR millions)

                                            Q3 2021 Q3 2020   ?     Q1-Q3   Q1-Q3    ? 
                                                                    2021    2020 
New leasing business                          372.2   517.6 -28.1% 1,136.7 1,601.2 -29.0% 
- of which international                      259.4   371.6 -30.2%   808.5 1,165.4 -30.6% 
- of which DACH*                              112.8   146.0 -22.8%   328.2   435.9 -24.7% 
Western Europe without DACH*                   94.6   125.8 -24.8%   302.6   389.0 -22.2% 
Southern Europe*                               82.5   137.3 -39.9%   257.2   438.1 -41.3% 
Northern/Eastern Europe*                       61.6    82.7 -25.5%   184.6   265.3 -30.4% 
Other regions*                                 20.8    25.9 -19.7%    64.1    73.0 -12.1% 
New factoring business                        178.5   154.4 15.6%    509.1   467.7 8.8% 
- of which Germany                             51.2    40.6 26.0%    158.5   132.2 19.9% 
- of which International                      127.3   113.7 11.9%    350.6   335.6 4.5% 
Deposit volume**                            1,521.3 1,300.0 17.0%  1,521.3 1,300.0 17.0% 
New business SME lending business               0.9    32.1 -97.2%    21.8   104.3 -79.1% 
Contribution margin 2 (CM2) on new business 
Leasing                                        63.6    95.2 -33.2%   207.2   289.5 -28.4% 
- of which International                       49.8    74.2 -32.9%   164.3   226.1 -27.3% 
- of which DACH*                               13.8    21.0 -34.3%    42.9    63.5 -32.4% 
Western Europe without DACH*                   17.3    25.2 -31.3%    59.7    75.2 -20.6% 
Southern Europe*                               15.8    26.7 -40.6%    52.6    83.5 -37.0% 
Northern/Eastern Europe*                       12.1    16.5 -26.5%    37.0    51.0 -27.6% 
Other regions*                                  4.5     5.9 -23.2%    15.0    16.4 -8.4% 

(MORE TO FOLLOW) Dow Jones Newswires

October 04, 2021 14:31 ET (18:31 GMT)

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Net income 2021 91,3 M 103 M 103 M
Net Debt 2021 5 291 M 5 973 M 5 973 M
P/E ratio 2021 16,1x
Yield 2021 1,50%
Capitalization 1 413 M 1 596 M 1 596 M
EV / Sales 2021 12,1x
EV / Sales 2022 13,1x
Nbr of Employees 1 900
Free-Float 59,3%
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Number of Analysts 6
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Average target price 41,67 €
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Michael BŘcker Chairman-Management Board
Sebastian Hirsch Chief Financial Officer & Director
Ernst-Moritz Lipp Chairman-Supervisory Board
Ljiljana Mitic Member-Supervisory Board
Jens R÷nnberg Vice Chairman-Supervisory Board
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