EUR 2.6 BILLION IN NEW LEASING BUSINESS IN 2023

GRENKE continues its profitable growth path: EUR 2.6 billion in new leasing business in 2023

• New leasing business in 2023 surpasses previous year's level by 12.3 % (2022: EUR 2.3 billion) and reaches the lower end of 2023 forecast
• Green economy objects continue their strong growth
• CM2 increases by 15.3 % to EUR 426.3 million (2022: EUR 369.6 million)
• CM2 margin rises to 16.5 % (2022: 16.1 %)

Baden-Baden, January 4, 2024: GRENKE AG, a global financing partner for small and medium-sized enterprises, continued on its double-digit growth path. At EUR 729.7 million, new leasing business in the fourth quarter of 2023 was 12.8 % higher year-on-year (Q4 2022: EUR 647.0 million). GRENKE generated new business volume of EUR 2.6 billion for 2023 as a whole, representing a year-on-year increase of 12.3 %, accompanied by a contribution margin (CM) 2 of 16.5 %. For the 2023 financial year, the Board of Directors had last assumed new leasing business in the lower half of the guidance corridor of EUR 2.6 to 2.8 billion.

Dr Sebastian Hirsch, CEO of GRENKE: "Although we just reached our forecast for new business, this past year was still a tremendous success overall. This is because the strong profitability we achieved is even more important than pure volume growth. Even in the face of high interest rates, we were able to increase our CM2 margin to 16.5 %. We have thus been on an uninterrupted growth path for nine consecutive quarters, with new business in the last quarter of 2023 growing at 12.8 %, exceeding the growth rate for the year as a whole. We intend to use this momentum in the new year to achieve our ambition for new leasing business of at least three billion euros." 

Object diversification driven forward; further expansion in the reseller network and continued growth in the customer base

Next to its core business of leased IT objects, GRENKE is financing an ever-growing volume of green economy objects such as e-bikes, solar systems and wall boxes. In 2023, this segment accounted for around 8 % of new leasing business (2022: 6 %). The expansion in the reseller network is the second strong growth driver at GRENKE. In the 2023 financial year, the number of resellers increased to 36.2 thousand (2022: 33.4 thousand). The customer base also continued to grow to just under 670 thousand (2022: 665 thousand). The direct business as a share of overall new leasing business held steady at 17.0 % (2022: 18.0 %). 

Growth course continues successfully in all regions

At EUR 201.5 million (Q4 2022: EUR 176.1 million) and a share of 27.6 % of new leasing business, Western Europe (excluding DACH) was the strongest region for GRENKE. This included France, which accounted for the largest share of new leasing business at 21.4 %. In second place was the Southern Europe region with growth of 17.4 % and a total new leasing business of EUR 173.0 million (Q4 2022: EUR 147.3 million). The DACH region was in third place with a slight year-on-year decline of 2.1 % and new leasing business volume of EUR 159.4 million (Q4 2022: EUR 162.9 million). The Northern/Eastern Europe region recorded a volume of EUR 150.9 million (Q4 2022: EUR 124.4 million) and year-on-year growth of 21.3 %. The countries in this region that performed particularly well were Finland, Sweden and Denmark, where GRENKE increased new business in the fourth quarter by 40.6 %, 44.0 % and 26.4 %, respectively. Within the regions, the strongest growth in new leasing business of 23.8 % was achieved in the other regions and totaled EUR 44.9 million (Q4 2022: EUR 36.3 million). This region includes the future markets of the USA, Canada and Australia.

 High level of demand for leasing

Leasing for the purpose of financing investments and optimising liquidity remains an international trend, and GRENKE continues to register growing demand. At around 577,000, the total number of lease applications in 2023 was sharply higher than in the previous year (2022: around 530,000). In the fourth quarter of 2023, GRENKE received around 146,000 lease applications (Q4 2022: around 135,000), leading to the conclusion of 75,000 new leases (Q4 2022: 68,000). This resulted in a conversion rate of 51.6 %, which was in line with the previous year's level (Q4 2022: 50.6 %).

Contribution margin in new leasing business remains stable

The contribution margin 2 in the fourth quarter of 2023 reached EUR 117.2 million, representing a year-on-year increase of 16.6 % (Q4 2022: EUR 100.5 million). This resulted in a CM2 margin for the fourth quarter of 2023 of 16.1 %. The significant increase in the CM2 margin over the previous year (Q4 2022: 15.5 %) is particularly attributable to the success in passing on the higher refinancing costs. The average ticket size in the fourth quarter of 2023 equalled EUR 9,676 (Q4 2022: EUR 9,443) and was on par with the previous year.

For the 2023 financial year, GRENKE achieved an increase in the CM2 of 15.3 % to EUR 426.3 million (2022: EUR 369.6 million). At 16.5 % (2022: 16.1 %), the CM2 margin in the 2023 financial year was significantly higher than in the previous year. The improvement in the margin was primarily the result of the continued stabilisation in interest rates and the resulting catch-up effects from passing on the higher refinancing costs.

Factoring and new lending business of GRENKE Bank

GRENKE's factoring business generated new business with a purchased receivables volume of EUR 230.5 million in the fourth quarter of 2023 (Q4 2022: EUR 212.7 million).

GRENKE Bank's new lending business, which largely consists of the microcredit business, totalled EUR 11.6 million in the fourth quarter of 2023 (Q4 2022: EUR 10.1 million).

GRENKE Bank remains an important pillar of the Consolidated Group's refinancing. As of December 31, 2023, GRENKE Bank's deposit business amounted to EUR 1,619 million (as of December 31, 2022: EUR 1,152 million), marking a year-on-year increase of 40.5 %.

OVERVIEW OF NEW BUSINESS DEVELOPMENT (IN EUR MILLIONS)

_{Leasing regions: 
DACH: Austria, Germany, Switzerland
Western Europe without DACH: Belgium, France, Luxembourg, Netherlands
Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain
Northern | Eastern Europe: Denmark, Finland, Ireland, Latvia, Norway, Sweden, UK | Czechia, Hungary, Poland, Romania, Slovakia
Other regions: Australia, Brazil, Canada, Chile, Singapore*, Turkey*, UAE, USA
*The new leasing business was discontinued in 2023.}

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

A short interview with CEO Dr Sebastian Hirsch providing an update on new business can be accessed at the following link: https://youtu.be/AaifrMM37Ck

The Annual Report 2023 will be published on March 7, 2024.