DGAP-News: GRENKE AG / Key word(s): Miscellaneous 
GRENKE AG: GRENKE generates new leasing business in the 2020 financial year 
equal to 71.2% of the previous year's level 
 
2021-01-05 / 06:59 
The issuer is solely responsible for the content of this announcement. 
 
*GRENKE generates new leasing business in the 2020 financial year equal to 
71.2% of the previous year's level * 
 
*- *GRENKE Group Leasing's new business in the 2020 financial year amounts 
to EUR 2,027.9 million, equal to 71.2% of the level in the 2019 financial 
year 
 
- GRENKE Group Leasing's new leasing business in Q4 2020 reaches EUR 426.7 
million, equal to 56.3% of the level in Q4 2019 
 
- Contribution margin 2 in Q4 2020 increases to 19.5% (Q4 2019: 17.8%) 
 
- Extension of hybrid bond (ISIN XS1262884171) in the amount of EUR 50 
million 
 
Baden-Baden, Germany, January 5, 2021: The GRENKE Group, a global financing 
partner for small and medium-sized enterprises, generated new leasing 
business of EUR 2,027.9 million in the past 2020 financial year, despite the 
COVID-19 pandemic, thereby achieving 71.2% of the previous year's level (FY 
2019: EUR 2,849.1 million). In Q4 2020, GRENKE Group Leasing generated new 
business of EUR 426.7 million. Leasing new business, defined as the total 
acquisition costs of all newly purchased leased assets, equalled 56.3% of 
the level in Q4 2019 and was thus in line with the target of approximately 
60%, which had been communicated before the announcement of the second hard 
lockdown. 
 
"Despite a second hard lockdown, we met our fourth quarter forecast. The 
start of the COVID-19 vaccinations makes us confident that the restrictions 
will end soon", says Antje Leminsky, Chair of the Board of Directors of 
GRENKE AG, in her comments on the fourth quarter of 2020. "The extraordinary 
year 2020 demanded more patience and perseverance from us than ever before. 
Together with all GRENKE AG employees, we are mastering the challenges posed 
by COVID-19 as the SME sector needs us as a strong small-ticket financing 
partner - especially now as the coming months will prove to be a great 
challenge for many companies." 
 
*Regional development of new leasing business* 
 
In the regional analysis of the leasing markets, the DACH region once again 
stood out positively in the fourth quarter of 2020 with a 25.2% decline in 
new leasing business, making it GRENKE's strongest region. Western Europe 
without DACH recorded a decline of 46.5% in new leasing business in the 
current reporting period. At -52.6%, Southern Europe was at a similar level 
to Northern/Eastern Europe at -51.1%. The other regions from the leasing 
business recorded a decrease in new business of 27.5%. Overall, the 
development of new business volume in Q4 2020 compared with the previous 
year was shaped by the sales activities, which were focused on contribution 
margins, risk limitation and diversification, as well as small-ticket 
contracts. 
 
*Percentage contribution margin development * 
 
As a result of further hard lockdowns due to the COVID-19 pandemic and the 
associated curtailment of macroeconomic activity and public life, 
contribution margins also decreased in nominal terms in line with GRENKE 
Group Leasing's new business volume in Q4 2020. Contribution margin 2 (CM2) 
of the leasing business amounted to EUR 83.3 million in the fourth quarter 
of the current financial year (Q4 2019: EUR 134.9 million). The CM2 margin 
increased to 19.5% (Q4 2019: 17.8%). The strong CM2 margin was made 
possible, above all, as a result of the consistent focus on the profitable 
small-ticket business. The mean acquisition value per lease contract 
decreased further to EUR 7,595 in Q4 2020 (Q4 2019: EUR 9,240). The lower 
mean value reflects the stronger demand for small-ticket financing solutions 
from small and medium-sized enterprises. Small-tickets are defined as leases 
with a volume of between EUR 500 and EUR 25,000. 
 
Contribution margin 1 (CM1) in the fourth quarter of 2020 reached EUR 56.0 
million (Q4 2019: EUR 96.1 million), registering a decrease of 41.7%. The 
CM1 margin, however, improved to 13.1% (Q4 2019: 12.7%). The increase in the 
margin successfully cushioned the higher refinancing costs contained in the 
leasing conditions. 
 
*Regional development of contribution margins * 
 
The DACH region was less affected in the fourth quarter of 2020, with a 
decline in contribution margin 2 of 24.6%. In line with new business 
development, the regions Western Europe without DACH (-38.8%), Southern 
Europe (-45.2%), and Northern/Eastern Europe (-44.8%) were most affected by 
the current cross-border restrictions. 
 
The GRENKE Group received a total of 115,260 lease applications in the 
fourth quarter of 2020. Of these, 21,351 applications were made in the DACH 
region and 93,909 applications in international regions. At the Group level, 
56,182 new lease contracts were concluded from these applications, 
corresponding to a conversion rate of 49%. 
 
*Development of factoring business * 
 
With a purchased receivables volume of EUR 180.0 million, GRENKE Group 
Factoring's new business recorded a decline of 4.1% compared to the same 
period in the previous year (Q4 2019: EUR 187.8 million). New business 
development in Germany increased in the fourth quarter of 2020 despite the 
resumption of tough restrictions on overall economic activity. The 6 
franchise companies contributed EUR 94.6 million to GRENKE Group Factoring's 
new business in the reporting quarter. 
 
*Development of GRENKE Bank * 
 
GRENKE Bank's new SME lending business reached EUR 15.0 million in the 
fourth quarter of 2020, similar to the level in the same prior-year quarter 
(Q4 2019: EUR 16.5 million). GRENKE Bank's deposit business continues to be 
an important pillar of the Consolidated Group's refinancing with a volume of 
EUR 1,537.3 million as of December 31, 2020 (September 30, 2020: EUR 1,300.0 
million). Compared to December 31, 2019 (EUR 884.2 million), the deposit 
volume increased by 73.9%. 
 
*Extension of hybrid bond (ISIN XS1262884171) of EUR 50 million * 
 
In order to strengthen the capital base and for further new business, GRENKE 
will not call the existing perpetual hybrid bond (ISIN XS1262884171) on the 
first possible date of March 31, 2021. This is the unsecured Additional Tier 
1 bond (AT1 bond) originally issued with a volume of EUR 30 million by the 
Consolidated Group on July 22, 2015 and increased on December 20, 2016 by a 
further EUR 20 million. 
 
"During the COVID-19 crisis, we clearly focused on profitable new business. 
The very good CM2 margins in all our markets confirm that this strategy 
based on risk selection and diversification has been successful. Therefore, 
as long as the corona crisis continues, we will maintain this focus of our 
business", says Sebastian Hirsch, Chief Financial Officer of GRENKE AG, in 
his comments on business development. "At the same time, we have sufficient 
liquidity to start the new year. By extending our first hybrid bond, we are 
conserving liquidity and also creating the basis for a sustainably solid 
capital base." 
 
*Overview of new business development (in EUR millions)* 
 
                             *Q4   *?(%)* *Q1-Q4* *Q1-Q4  *?(%)* 
                  *Q4 2020* 2019*         *2020*   2019* 
 
*New Business                       -43.7         2,849.1  -28.8 
GRENKE Group 
Leasing*            426.7    757.4        2,027.9 
- of which                          -49.5         2,136.1  -34.4 
international         286.2  567.0        1,401.4 
- of which                          -33.5            82.8  -21.4 
Franchise 
international**        14.9   22.4           65.1 
- of which DACH*      125.6  168.0  -25.2   561.5   630.1  -10.9 
Western Europe                      -46.5           734.5  -33.1 
without DACH*         102.1  190.9          491.1 
Southern Europe*      112.3  237.0  -52.6   550.4   877.8  -37.3 
Northern/Eastern                    -51.1           481.6  -31.8 
Europe*                63.1  129.0          328.4 
Other regions*         23.6   32.5  -27.5    96.5   125.0  -22.8 
*New Business                        -4.1           663.4   -2.4 
GRENKE Group 
Factoring*            180.0  187.8          647.8 
- of which                           14.5           176.7    5.5 
Germany                54.1   47.3          186.3 
- of which                          -34.7           172.4  -22.1 
international          31.3   47.9          134.4 
- of which                            2.1           314.3    4.1 
Franchise 
International***       94.6   92.6          327.1 
*GRENKE Bank* 
Deposit                              73.9                   73.9 
volume****          1.537.3  884.2        1.537.3   884.2 
New business SME                     -9.2            54.1  120.4 
lending business       15.0   16.5          119.3 
*Contribution 
margin 2 (CM2) on 
new business* 
*GRENKE Group                       -38.2           485.2  -23.2 
Leasing*               83.3  134.9          372.9 
- of which                          -41.9           379.3  -27.1 
international          61.3  105.4          276.5 
- of which                          -28.2            17.5  -19.1 
Franchise 
international**         3.3    4.6           14.2 
- of which DACH*       18.7   24.9  -24.6    82.2    88.4   -7.1 
Western Europe                      -38.8           131.1  -25.9 
without DACH*          21.9   35.9           97.2 
Southern Europe*       23.6   43.0  -45.2   107.1   150.9  -29.1 
Northern/Eastern                    -44.8            87.4  -26.5 
Europe*                13.2   23.9           64.2 
Other regions*          5.8    7.2  -19.1    22.2    27.4  -18.8 
 
Note: Rounding differences may occur 
 
*Regions: DACH: Germany, Austria, Switzerland 
Western Europe without DACH: Belgium, France, Luxembourg, the Netherlands 
Southern Europe: Italy Croatia, Italy, Malta, Portugal, Slovenia, Spain 
Northern | Eastern Europe: Denmark, Finland, Ireland, Latvia, Norway, 
Sweden, UK | Czechia, Hungary, Poland, Romania, Slovakia

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January 05, 2021 00:59 ET (05:59 GMT)