grenke increases Group earnings and improves cost-income ratio in the first half of 2024

• Group earnings grow by 11.3% in the first half-year to EUR 45.0 million (Q1-Q2 2023: EUR 40.4 million)
• Cost-income ratio improves to 57.1% (Q1-Q2 2023: 58.3%)
• 2024 forecast reconfirmed

Baden-Baden, August 8, 2024: grenke AG, a global financing partner for small and medium-sized enterprises, significantly increased its profitability in the first half of 2024 compared to the same prior-year period. Driven primarily by the continued strong growth in new business over the past few quarters, Group earnings grew 11.3% to EUR 45.0 million (Q1-Q2 2023: EUR 40.4 million), and the cost-income ratio (CIR) improved to 57.1% (Q1-Q2 2023: 58.3%). In addition, the volume of lease receivables reached a new record high of EUR 6.1 billion (June 30, 2023: EUR 5.4 billion).

Dr Sebastian Hirsch, CEO of grenke AG: “Despite the continued challenging market conditions, we remain on track. Our robust growth and advancing efficiency are increasingly translating into improved profitability.”

Dr Martin Paal, CFO of grenke AG: “Our issue of a benchmark bond is further evidence of our refinancing strength and secures our growth. Thanks to our cost management, we have improved our cost-income ratio and are on target for the half-year overall.”

Higher interest income in Q2 2024 accompanied by planned cost increase
grenke AG continued to improve its performance in the second quarter of 2024. Interest income increased by EUR 26.7 million (+23.5%) to EUR 140.3 million (Q2 2023: EUR 113.6 million). Interest expenses for refinancing the leasing business rose to EUR 49.9 million (Q2 2023: EUR 29.5 million) due to persistently high capital market interest rates, but net interest income (the net amount of interest income and interest expenses) still exceeded the same prior-year quarter by 7.6%, rising to EUR 90.4 million (Q2 2023: EUR 84.0 million). The operating result grew 17.0% to EUR 33.4 million (Q2 2023: EUR 28.6 million). Group earnings increased 2.6% to EUR 25.2 million (Q2 2023: EUR 24.5 million), accompanied by an improved cost-income ratio (CIR) of 56.3% (Q2 2023: 59.5%).

Expenses for settlement of claims and risk provision rose in the second quarter of 2024 to EUR 28.3 million (Q2 2023: EUR 21.4 million), mainly due to the higher business volume and the required risk provisioning. The loss rate of 1.2% (Q2 2023: 0.9%) was in line with the expectations and the forecast of below 1.5%.

In the reporting quarter, the average number of employees (measured in full-time equivalents) increased 6.2% year-on-year to 2,180 employees (Q2 2023: 2,052 employees). The higher level of staff required to support growth led to a planned year-on-year increase in staff costs to EUR 48.1 million (Q2 2023: EUR 44.0 million).

Lease receivables exceed EUR 6 billion for the first time
The growth in new business led to a rise in lease receivables to EUR 6.1 billion as of the end of the second quarter of 2024, which was significantly above the level at the end of the same quarter of the previous year (Q2 2023: EUR 5.4 billion). Leasing new business rose 21.5% to EUR 790.3 million in the second quarter of 2024 (Q2 2023: EUR 650.3 million).

Equity ratio remains solid and above target
As of June 30, 2024, the liquidity position equalled EUR 565.5 million (December 31, 2023: EUR 697.2 million). In May 2024, grenke placed a benchmark bond with a volume of EUR 500 million to finance the future leasing business. The equity ratio as of June 30, 2024 was 18.3% (December 31, 2023: 19.1%) and continued to be above the self-set target of at least 16%, even when taking into account the ongoing share buyback programme. The return on equity (RoE) before taxes rose to 9.7% in the second quarter of 2024 (Q2 2023: 9.5%). In the first half of 2024, the RoE was 8.5% (Q1-Q2 2023: 7.8%) due to the better earnings before taxes in the first half of 2024, coupled with almost no change in equity.

Outlook for 2024
For the 2024 financial year, grenke continues to forecast leasing new business in the range of EUR 3.0 billion to EUR 3.2 billion and Group earnings between EUR 95 million and EUR 115 million. In the current 2024 financial year, grenke is aiming for a slight year-on-year increase in the CM2 margin. In the medium term, the CM2 margin should reach approximately 17%. The range of expected earnings for the 2024 financial year is based on the assumption that the loss rate will remain below 1.5%. Taking into consideration the investments planned in the digitalisation programme, grenke is aiming for a CIR of under 58% in 2024. Based on the anticipated trend in Group earnings, grenke continues to expect a balance sheet equity ratio above 16%.

The financial report for the second quarter and first half-year of 2024 can be accessed on the Company’s website under the heading “Reports & Presentations”.

Key figures at a glance (in EUR million)

  Q2 2024 Q2 2023 ∆ in % Q1–Q2 2024 Q1–Q2 2023 ∆ in % Leasing new business 790.3 650.3 21.5 1,460.1 1,260.5 15.8 CM2 margin of leasing new
business in % 16.6 16.9 -0.3 pp 16.7 16.8 -0.1 pp Group earnings 25.2 24.5 2.6 45.0 40.4 11.3 Earnings per share in euros 0.58 0.55 5.5 0.80 0.74 8.1 Cost-income ratio in % 56.3 59.5 -3.2 pp 57.1 58.3 -1.2 pp Loss rate 1.2 0.9 0.3 pp 1.1 1.0 0.1 pp RoE before taxes in % 9.7 9.5 0.2 pp 8.5 7.8 0.7 pp Average no. of employees in full-time equivalents 2,180 2,052 6.2 2,169 2,023 7.2

 

	Jun. 30, 2024	Dec. 31, 2023	∆ in %
Equity ratio in %	18.3	19.1	-0.8 pp

Note: Rounding differences may occur between individual values and the actual figure achieved in euros.

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 more than 30 countries and employs approximately 2,200 staff (measured in terms of full-time equivalents) worldwide. grenke shares are listed on the Frankfurt Stock Exchange (ISIN DE000A161N30).