DGAP-News: GRENKE AG: GRENKE records a successful 2019 fiscal year with an increase in contribution margin and Consolidated Group net profit

GRENKE records a successful 2019 fiscal year with an increase in contribution margin and Consolidated Group net profit

- Consolidated Group net profit increases by 8 percent to a total of EUR 142.1 million
- Forecast range for net profit for 2020 is EUR 153 to 165 million
- GRENKE Group expected to continue to grow significantly in 2020
- Company proposes dividend of EUR 0.88 per share

Baden-Baden, February 11, 2020: GRENKE looks back on another successful fiscal year. Consolidated Group net profit in 2019 increased by 8 percent compared with the previous year, adjusted for IFRS 16, and amounted to EUR 142.1 million, which was within the forecast range of EUR 138 - 148 million that was revised with the release of the half-year 2019 figures. Earnings per share rose to EUR 2.92 compared to EUR 2.79 in the previous year.

"GRENKE continues on its successful pathway. We were able to grow profitably again in 2019 and anticipate favourable business performance for GRENKE Group Leasing again in the current 2020 fiscal year with a projected growth rate of 14 to 18 percent. This performance can only be achieved through the continuous innovation of our business model. As an example, we have been expanding our product and service offers, the items in our lease portfolio, our partner network and our international presence. We are also entering the US leasing market in the first half of the year with the opening of a new franchise company in Arizona", explains Antje Leminsky, Chair of the Board of Directors of GRENKE AG.

GRENKE's earnings also developed positively during the fiscal year given the high profitability of the new business and persistently low interest rates. Net interest income rose by 15 percent in the reporting year to EUR 368.9 million (previous year: EUR 321.1 million). Expenses for settlement of claims and risk provision rose by 37 percent in the reporting year to EUR 125.9 million (previous year: EUR 91.8 million). The Consolidated Group's loss rate rose to 1.5 percent (previous year: 1.3 percent).

Profits from service and new business rose by 19 and 18 percent respectively in the 2019 fiscal year. Although the result from disposals was negative at EUR -2.2 million, it had improved noticeably compared with the previous year's level of EUR -2.6 million. As a result, income from operating business in the reporting year reached a total of EUR 396.7 million, compared to EUR 358.4 million in the previous year, representing an increase of 11 percent.

The number of employees continued to rise in the reporting year and, at the end of 2019, there was a total of 1,675 employees in the GRENKE family. Staff costs grew accordingly by 13 percent in 2019 to EUR 115.8 million (previous year: EUR 102.7 million). In 2019, the investment in our progressive personnel management at GRENKE again included comprehensive and targeted further training programmes for our staff.

Sebastian Hirsch, member of the Board of Directors of GRENKE AG, in his comments highlighted: "The settlement of claims and risk provision amounted to EUR 125.9 million coupled with excellent new business growth, which means that the overall loss rate for 2019 has levelled off at 1.5 percent. Our contribution margin also increased, particularly during the last few months of the 2019 fiscal year. Following the successful placement of a hybrid bond in the fourth quarter of 2019, which generated net proceeds of EUR 73.7 million, the equity ratio at the end of the year equalled 17.5 percent. This places us in an excellent position for the future and for further profitable growth. The net profit forecast for the current fiscal year is in a range of EUR 153 to 165 million".

In 2019, the Consolidated Group's operating result increased by 10 percent to EUR 174.3 million (previous year: EUR 158.2 million), and earnings before taxes rose by 9 percent to EUR 170.7 million (previous year: EUR 156.6 million). The tax rate was 16.8 percent in the past fiscal year (previous year: 16.0 percent).

Against the background of the very satisfying business development in 2019 and the continued favourable outlook going forward, the Supervisory Board and the Board of Directors plan to propose a dividend of EUR 0.88 per share to the Annual General Meeting of GRENKE AG on May 19, 2020. This compares with a dividend distribution in the prior year of EUR 0.80 per share. "Our shareholders should participate in the success of GRENKE, and we want to emphasise this by also raising the dividend", says Sebastian Hirsch in reference to the dividend.

Overview of key figures (in EUR millions)

*Including adjustments due to the first-time application of IFRS 16 "Leases"

The Annual Report of the GRENKE Consolidated Group for the 2019 fiscal year is available on the Internet at www.grenke.de/grenke-group/investor-relations/reports-downloads.

Further information can be obtained from:

GRENKE AG
Investor Relations
Neuer Markt 2
76532 Baden-Baden
Phone: +49 7221 5007-204
Email: [email protected]
Website: http://www.grenke.de

About GRENKE

The GRENKE Group (GRENKE) is a global financing partner for small and medium-sized companies. As a one-stop shop for customers, GRENKE's products range from flexible small-ticket leasing and demand-driven bank products to convenient factoring. Fast and easy processing and personal contact with customers and partners are at the centre of GRENKE's activities.

Founded in 1978 in Baden-Baden, the Group operates in 32 countries and employs more than 1,700 staff worldwide. GRENKE shares are listed in the MDAX on the Frankfurt Stock Exchange (ISIN DE000A161N30).

Further information about GRENKE and its products is available at www.grenke.de