GRENKE Adjusts Group Earnings Forecast Amid Rising Insolvencies

Grenke AG, based in Baden-Baden, Germany, has revised its earnings guidance for the 2024 financial year. This adjustment follows increased expenses related to claim settlements and risk provisioning. The company now anticipates Group earnings between EUR 68 million and EUR 76 million, down from the previously forecasted EUR 95 million to EUR 115 million.

The revision is attributed to a surge in insolvency rates in its primary markets—France, Spain, and Germany. This has raised settlement expenses from EUR 26.7 million in Q1 and EUR 28.3 million in Q2 to EUR 37.8 million in Q3. The Q4 projections remain unchanged from Q3 levels.

The loss rate has also escalated from 1.1% in the first half of the year to 1.5% by Q3. Consequently, Grenke will fully write off EUR 4.4 million in goodwill for its Spanish subsidiary. Q3 Group earnings will be EUR 12.0 million, compared to EUR 19.8 million in Q1 and EUR 25.2 million in Q2.

Despite these challenges, Grenke maintains its forecast for new business at EUR 3.0 billion to EUR 3.2 billion for 2024.