GRENKE continues growth trajectory: EUR 2.3 billion new leasing business in 2022

GRENKE continues growth trajectory: EUR 2.3 billion new leasing business in 2022

• New leasing business exceeds the prior year by 38.7% (2021: EUR 1.7 billion) and reaches the upper end of the forecast for 2022
• Portfolio expanded to include new product categories in the areas of digitalisation and sustainability
• Contribution margin 2 (CM2) increases 26.4% to EUR 369.6 million despite volatile interest rate environment, CM2 margin reaches 16.1% (2021: 17.6%)

Baden-Baden, January 4, 2023: The GRENKE Group, a global financing partner for small and medium-sized enterprises, is continuing its growth trajectory. For the fifth consecutive quarter, the leasing specialist achieved significant double-digit growth. At EUR 647.0 million, new leasing business in the fourth quarter of 2022 was up 24.1% year-on-year (Q4 2021: EUR 521.2 million). For full-year 2022, GRENKE achieved new business volume of EUR 2.3 billion, exceeding the previous year by 38.7% and meeting the upper end of the latest forecast increased in October 2022 of EUR 2.1 to 2.3 billion (previous forecast: EUR 2.0 to 2.2 billion).

Dr Sebastian Hirsch, CFO and interim CEO of GRENKE AG, says, “With an excellent year-end spurt, we have increased our consistently strong performance once again this past year. Again in the fourth quarter, it was important to defy the sharp rise in interest rates. We succeeded very well in accomplishing this. Even if these circumstances continue for several more months, our clear positioning and know-how in small-ticket leasing will enable us to maintain our agility as well as our flexibility.” 

Increase in object diversification and expansion in direct sales

Leasing as an instrument for optimising liquidity continues to be a trend internationally. GRENKE has grown for more than four decades by providing financing, particularly financing of IT technology. More new leasing objects – increasingly due to investments of SMEs in digitalisation and sustainability – are being added to the portfolio. Last year alone, for example, GRENKE financed more than 30,000 e-bikes, as well as an increasing number of photovoltaic systems and wall boxes. In addition to the expansion in the range of objects, new business in the past year was driven by the expansion in the direct sales business. GRENKE generated 18.0% on average through direct contact with customers in the 2022 financial year compared to 16.3% in 2021.

Growth trajectory continued successfully in all regions

At EUR 176.1 million and a 27.2% share of new leasing business, Western Europe (excluding DACH) was the largest region for GRENKE in the fourth quarter of 2022. At 21.6%, France generated the largest share of total new leasing business. The DACH region was in second place, with growth of 28.3% to EUR 162.9 million (Q4 2021: EUR 127.0 million). The third largest region was Southern Europe, achieving a 10.3% year-on-year increase in new leasing business volume to EUR 147.3 million (Q4 2021: EUR 133.5 million).

Northern/Eastern Europe recorded the strongest growth with 45.3% and a volume of EUR 124.4 million (Q4 2021: EUR 85.6 million). The United Kingdom and Finland performed particularly well, with an increase in GRENKE’s new business by 68.5% and 41.3%, respectively. The regions referred to as “other regions” grew by 31.5% to EUR 36.3 million (Q4 2021: EUR 27.6 million).

Overall, new leasing business in the Group increased significantly for the fifth consecutive quarter.

The driver for the significant growth in new business was the increase in lease applications for the financial year as a whole to a total of approximately 530,000 (2021: approx. 454,000). In the reporting quarter, GRENKE received approximately 135,000 lease applications, which is considerably more than in the same prior-year period (Q4 2021: approx. 120,000). GRENKE also concluded more than 68,000 new lease contracts, which corresponds to an increase of around 14% (Q4 2021: 60,000). At 50.6%, the conversion rate was at the same level as in the comparable prior-year quarter (Q4 2021: 50.1%).

Absolute contribution margin for new leasing business increases

As a result of the strong new leasing business, the contribution margin 2 in the fourth quarter of 2022, at EUR 100.5 million, was 18.1% above the previous year’s level (Q4 2021: EUR 85.1 million).

Consequently, the CM2 margin reached a level of 15.5% in the fourth quarter of 2022, corresponding to a year-on-year difference of 80 basis points (Q4 2021: 16.3%). The difference was primarily the result of the larger ticket sizes and the current rise in interest rates, which can only be passed on to the market with a time lag. As soon as the interest rate level stabilises, this effect is expected to reverse. The average ticket size in the fourth quarter of 2022 was EUR 9,443, which exceeds the previous year’s average by about 9% (Q4 2021: EUR 8,677). This was also a result of the positive development of the direct sales business, as slightly higher ticket sizes are typically achieved in direct sales due to framework agreements.

In the 2022 financial year, GRENKE achieved a 26.4% increase in contribution margin 2 to EUR 369.6 million (2021: EUR 292.3 million). This resulted in a CM2 margin of 16.1% for the 2022 financial year (2021: 17.6%).

Factoring business and GRENKE Bank new lending business 

The factoring business, which accounts for 1.6% of the total assets (as of the September 30, 2022 reporting date), reported new business with a purchased receivables volume of EUR 212.7 million in the fourth quarter of 2022. This corresponds to a year-on-year increase of 10.9% (Q4 2021: EUR 191.8 million). The average maturity of these receivables is approximately six weeks.

GRENKE Bank's new lending business, which mainly consists of the microloan business, amounted to EUR 10.1 million in the fourth quarter of 2022 (Q4 2021: EUR 11.5 million).

Overview of new business development (in EUR millions)

Leasing regions: 
DACH: Germany, Austria, Switzerland
Western Europe without DACH: Belgium, France, Luxembourg, Netherlands
Southern Europe: Italy, Croatia, Malta, Portugal, Slovenia, Spain
Northern | Eastern Europe: Denmark, Finland, UK, Ireland, Latvia, Norway, Sweden | Poland, Romania, Slovakia, Czechia, Hungary
Other regions: Australia, Brazil, Chile, Canada, Singapore, Turkey, USA, UAE

Factoring regions: 
DACH: Germany, Switzerland
Northern | Eastern Europe: UK, Ireland, Poland, Hungary
Southern Europe: Italy, Portugal

A short interview with the CFO and interim CEO Dr Sebastian Hirsch providing an update on new business can be accessed at the following link: https://youtu.be/GykA_r1LOMg.

The Annual Report 2022 will be published on March 16, 2023.

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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 33 countries and employs more than 1,900 staff (measured in terms of full-time equivalents) worldwide. GRENKE shares are listed on the Frankfurt Stock Exchange (ISIN DE000A161N30).