GRENKELEASING AG / Quarter Results/Quarter Results 27.10.2008 Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Earnings after taxes amount to EUR 24.9 million Increase in new business of the GRENKE Group by 15.9 % Baden-Baden, October 27, 2008: Consolidated earnings before interest and taxes (EBIT) increased in the first nine months 2008 to EUR 35.3 million compared to EUR 34.3 million in the first nine months 2007.Consolidated earnings after taxes of GRENKELEASING AG at EUR 24.9 million remained in the nine-month period 2008 at the level of the comparable period of 2007 despite the fact that the net profit of the third quarter 2007 benefited from the positive tax effects of the corporation tax reform in Germany. Earnings per share respectively unchanged at EUR 1.82. In the third quarter of 2008, the GRENKELEASING AG Group continued the positive business performance of the first half-year. Our rapid growth of the past year and our consistent focus on the profitability of the new business are now visible in the continued growth of income on our income statement. We are optimising the speed of our international expansion with a market penetration as rapid as possible and by ensuring the stability of income. At the same time, we experienced only a limited negative impact from the international banking crisis. Overall, net profit before taxes thus increased by 3.0 % to EUR 35.3 million over the nine-month period of the current fiscal year. The third quarter posted above-average growth with an upward move of around 7.1 %. Overall, we again increased consolidated net interest income after settlement of claims in both reporting periods. Even including the currently posted higher settlement of claims, consolidated interest income rose over the 2008 nine-month period year-on-year by a pleasing 6.9 % and in the third quarter by 8.1 %. Rising losses are a normal development in phases of declining overall economic growth. Accordingly, this has been taken into account in our pricing and earnings forecasts. In the first nine months of 2008 we are still below our calculated value which emphasizes our ability to identify and measure risks correctly. We have also generated significantly increased earnings contributions from the insurance and new business. In the third quarter of 2008, the profit from disposals was below that of the previous year due to fluctuations typical for the type of business. However, it was slightly above that of the previous year for the nine months period. Due to the overall rising income, EBIT was successfully expanded in the third quarter, although we are driving forward our international expansion with extraordinary speed in the current fiscal year. Accordingly, some expense items have risen sharply. The consulting and audit costs, which had significantly negative impact on us in the previous year, have gradually decreased over the course of the current fiscal year as announced, so that they are now below those of the previous year, even in the nine-month period. Including the financial result, the EBT in the third quarter and in the nine-month period was therefore increased. The tax burden of the third quarter of 2007 was exceptionally low, since the positive full-year effects from the adjustment of the tax rate in the context of the reform of the German corporation tax were taken into account in that quarter. As a result of this basis effect the net profit in the third quarter of 2008 of EUR 8.6 million remained, below the previous years value of EUR 9.3 million. However, in the nine-month period it was unchanged against the previous year at EUR 24.9 million. Nevertheless this has no significance for the assessment of the operating development of the Group. As already reported the GRENKE Groups (incl. franchise partners) volume of new business - i.e. the sum total of acquisition costs of newly purchased leasing assets and factoring volume rose by 15.9 % to EUR 433.8 million in the first nine months 2008 (9-months 2007: EUR 374.3 million). New business growth recorded by the GRENKE Group international at 37.8 % compared with the previous year. The international segment contributed a share of 47.1 % (9-months 2007: 39.6 %) to the new business of the GRENKE Group. The CM1 margin of the GRENKE Groups leasing operations (contribution margin 1 at acquisition values), at 10.6 % in the nine months of 2008, exceeded our target margin of 10%, reaching a value of EUR 41.9 million (9-months 2007: EUR 34 million comparative figure for leasing operations). The CM1 margin achieved and the level of growth year-on-year reflect quite a positive trend against the background of rising funding costs. The corresponding CM2 amounts to EUR 59.6 million, likewise up by a gratifying 25.0 % year-on-year (9-months 2007: EUR 47.7 million). In particular, the CM2 trend of foreign operations, with an increase of 52.2 %, shows that the anticipated easing of the competitive situation has indeed occurred. This is where our focus on contribution margin growth and management of new business according to profitability aspects has certainly paid off. The result was generated by 485 employees, compared with 414 in the nine months of 2007 (full-time equivalents excluding directors). 66 employees are active in franchise operations (9-months 2007: 99). 'In the first half of 2008, growth and profitability of the new business of the GRENKE Group, including franchise partners, was at the upper end of the guidance range. The positive development continued into the third quarter. As announced, we took advantage of the noticeably more restrictive bank lending policies and the observed tendency of some competitors to withdraw from the small ticket leasing business, thereby easing the overall competitive situation somewhat. We also intend to continue to make further use of our growth opportunities in Q4 of 2008. The GRENKELEASING AG Groups net profit remained in the nine-month period at the level of the comparable period of 2007 despite the fact that the profit of the third quarter 2007 benefited from the positive tax effects of the corporation tax reform in Germany. We profited from the fact that we did not suffer any tangible direct impact of the international banking crisis during the reporting period. However, this risk still applies to the future. In addition, detailed questions relating to the taxation of forfeiting have still not been clarified, which means that there is still planning uncertainty regarding our tax rate for the current fiscal year. Taking these risks into account, we therefore confirm our forecast of a stable and positive development in net profit for the year within a range of EUR 30.6 million to EUR 33.0 million. ' says Dr. Uwe Hack, Deputy Chairman of the Executive Board of GRENKELEASING AG, in commenting on the results. He added: 'We are properly positioned even for a phase of economic weakness since in this period leasing financing experiences even high demand. With our decades of experience in identifying and appropriately considering risks we are able to secure our earnings power even in such periods. With our broad presence across what is now twenty European countries, we have diversified sales markets, which we are able to individually manage according to their respective development.' The GRENKE Group (incl. franchise partners) now operates in twenty European countries. The GRENKELEASING AG Group (excluding franchise partners) is represented in 20 German cities. In addition to eight branches in France, three in Switzerland and two in Italy, the enterprise operates with subsidiaries in Austria, Czechia, Spain, the Netherlands, Denmark, Sweden, Ireland, United Kingdom, Poland and Belgium. In the Norway, Hungary, Romania, Spain (Madrid), Portugal, Slovakia and Finland as well as in Germany in the field of car leasing and factoring, GRENKELEASING has a franchise system in place. GRENKELEASING offers contracts predominantly in the field of small-ticket IT leasing for such products as PCs, notebooks, copiers, printers or software of a relatively low asset value. GRENKELEASING AG shares are listed at Frankfurt Stock Exchange (SDAX) with the code GLJ, ISIN DE0005865901. Information on the company and its products is available on the Internet under http://www.grenke.de. The detailed Quarterly Financial Report as per September 30, 2008 is available on the internet under www.grenke.de Investor Relations Financial Data. Should you have any queries, please contact: Renate Hauss Tel.: 0049-7221/5007-204 Fax: 0049-7221/5007-112 Email: investor@grenke.de Internet: http://www.grenke.de DGAP 27.10.2008 --------------------------------------------------------------------------- Language: English Issuer: GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden Deutschland Phone: +49 (0)7221 50 07-204 Fax: +49 (0)7221 50 07-112 E-mail: investor@grenke.de Internet: www.grenke.de ISIN: DE0005865901 WKN: 586590 Indices: SDAX Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Stuttgart, München, Düsseldorf, Hamburg End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: GRENKELEASING AG: Quarterly Financial Report as per September 30, 2008
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