GRENKELEASING AG Group. Financial Report for the 2nd Quarter and the First Half-Year 2015

Transcription

1 GRENKELEASING AG Group Financial Report for the 2nd Quarter and the First Half-Year 2015

2 GRENKELEASING AG Consolidated Group 1 Contents Key Figures 2 Letter to Shareholders from the Board of Directors 4 The GRENKELEASING AG Share 5 Interim Group Management Report 6 Targets and Strategy 6 Macroeconomic and Sector-Specific Environment 7 New Business 7 Report on the Results of Operations 10 Report on Financial Position and Net Assets 13 Changes in the Governing Bodies 15 Report on Risks, Opportunities and Forecasts 15 Responsibility Statement 17 Condensed Interim Consolidated Financial Statements 18 Consolidated Income Statement 18 Consolidated Statement of Comprehensive Income 19 Consolidated Statement of Financial Position 20 Consolidated Statement of Cash Flows 22 Consolidated Statement of Changes in Equity 24 Notes to the Condensed Interim Consolidated Financial Statements 25 Auditor s Review Report 41 Calendar of Events and Contact Information 42

3 GRENKELEASING AG Consolidated Group 2 Key Figures GRENKE Group Jan. 1, 2015 to Jun. 30, 2015 Change (%) Jan. 1, 2014 to Jun. 30, 2014 Unit New business GRENKE Group Leasing 637, ,766 EURk of which international 469, ,655 EURk of which franchise international 12, ,059 EURk of which Germany 155, ,052 EURk Western Europe (without Germany)* 216, ,940 EURk Southern Europe* 158, ,078 EURk Northern / Eastern Europe* 95, ,455 EURk Other regions* 10, ,241 EURk New business GRENKE Group Factoring 145, ,927 EURk of which Germany 54, ,252 EURk of which international 70, ,759 EURk of which franchise international 19, ,916 EURk GRENKE Bank Deposits 312, ,945 EURk New business start-up financing 7, ,417 EURk Contribution margin 2 (CM2) on new business GRENKE Group Leasing 120, ,619 EURk of which international 95, ,704 EURk of which franchise international 2, ,261 EURk of which Germany 21, ,654 EURk Western Europe (without Germany)* 43, ,141 EURk Southern Europe* 34, ,396 EURk Northern / Eastern Europe* 18, ,343 EURk Other regions* 1, ,085 EURk Further information leasing business Number of new contracts 77, ,763 units Share of IT products in lease portfolio percent Share of corporate customers in lease portfolio percent Mean acquisition value EURk Mean term of contract months Volume of leased assets 3, ,270 EURm Number of current contracts 458, ,979 units *Regions: Western Europe (without Germany): Austria, Belgium, France, Luxembourg, the Netherlands, Switzerland Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain Northern / Eastern Europe: Denmark, Finland, Ireland, Norway, Sweden, UK / Czech Republic, Hungary, Poland, Romania, Slovakia Other regions: Brazil, Canada, Chile, Dubai, Turkey GRENKE Group = GRENKE Consolidated Group including franchise partners GRENKE Consolidated Group = GRENKELEASING AG and all consolidated subsidiaries and structured entities according to IFRS

4 GRENKELEASING AG Consolidated Group 3 Key Figures GRENKE Consolidated Group Jan. 1, 2015 to Jun. 30, 2015 Change (%) Jan. 1, 2014 to Jun. 30, 2014 Unit Key figures income statement Net interest income 91, ,641 EURk Settlement of claims and risk provision 28, ,810 EURk Profit from insurance business 23, ,525 EURk Profit from new business 24, ,181 EURk Gains (+) / losses ( ) from disposals EURk Other operating income 2, ,063 EURk Cost of new contracts 17, ,374 EURk Cost of current contracts 5, ,477 EURk Project costs and basic distribution costs 20, ,788 EURk Management costs 13, ,450 EURk Other costs 4, ,531 EURk Operating result 52, ,712 EURk Other interest income (expense) EURk Income / expenses from fair value measurement EURk EBT (earnings before taxes) 52, ,678 EURk Net profit 38, ,182 EURk Earnings per share (according to IFRS) EUR Further Information Dividends EUR Embedded value, leasing contract portfolio (incl. equity before taxes) EURm Embedded value, leasing contract portfolio (incl. equity after taxes) EURm Economic result (after taxes)* EURm Cost / income ratio percent Return on equity (ROE) after taxes percent Average number of employees employees Staff costs 30, ,546 EURk of which total remuneration 24, ,637 EURk of which fixed remuneration 18, ,530 EURk of which variable remuneration 6, ,107 EURk * Indicator that combines the net profit of one period with the change in the embedded value after tax (the present value of all outstanding lease instalments after costs and risk provisions). From 2015, the method of calculation has been adjusted to determine the economic result. The retained earnings are included in both the net profit for the period as well as in the embedded value at the end of the period. Therefore, they are eliminated once in the calculation of the economic result. GRENKE Group = GRENKE Consolidated Group including franchise partners GRENKE Consolidated Group = GRENKELEASING AG and all consolidated subsidiaries and structured entities according to IFRS

5 GRENKELEASING AG Consolidated Group 4 Letter to Shareholders from the Board of Directors Dear Shareholders, Ladies and Gentlemen, After completing a strong first quarter, we are pleased to report to you today on the continuation of that successful performance during the second quarter and first half of the current fiscal year. The new business volume of GRENKE Group Leasing increased by 15 percent, and that of GRENKE Group Factoring even climbed by 53 percent. With this growth, we are well on our way to achieving the year s targets and will even exceed the targets for our Factoring segment. A large portion of this growth resulted from our home market of Germany and the high demand in our international markets in. We reported double-digit growth in Germany despite continued intense competition in the area of small-ticket IT leasing. The international share or new business remained above 70 percent. We also had tremendous success internationally with our factoring products and more than doubled our new business volume in comparison to the previous year. Once again, this performance shows the advantages of our targeted diversification in terms of the regions we operate and the products we offer. This diversification also helps us to avoid an interruption in our growth from any temporary slowdowns in individual markets. We are also able to maintain our contribution margin 2 in our leasing business at a constant and favourable level. In the first half year, our CM2 margin was 18.8 percent after a level of 19.0 percent in the first six months of the prior year. Due to the positive business performance we experienced in recent quarters, earnings were also at a very satisfying level. Among others, earnings were also supported by an absolute decline compared to the first quarter in expenses for the settlement of claims and risk provision as well as by the continued favourable environment for refinancing. This led to our achievement of a rise of 23 percent in GRENKE Consolidated Group s net profit in the first half year to a total of EUR 38.5 million. Therefore, we are increasing our previous forecast for the current fiscal year for a net profit in the range of EUR 71 to 75 million for the GRENKE Consolidated Group to a net profit between EUR 74 and 78 million. Our share price in the first half of the year also reflects the success of our value-creating business model. In the past six months, the share price has risen an impressive 45 percent. We are proud of this performance. And in order to communicate events more directly, more timely and more comprehensively to you, our shareholders, we converted our nopar value shares to registered shares with the approval of the Annual General Meeting on May 12, This conversion took effect on July 10, By all means, this conversion does not affect your legal status as shareholders. Your investment in our company remains unchanged as do your related rights. Details of this conversion have been summarised for you in the chapter "The GRENKELEASING AG Share" on page 5 of this report. In closing, on behalf of the entire Board of Directors, I would like to thank again Dieter Münch and Prof. Dr. Thilo Wörn, whose retirement from the Supervisory Board took effect with the close of the Annual General meeting, for their very successful and always constructive cooperation over the past several years. And, I would also like to welcome our new Supervisory Board members Tanja Dreilich and Dr. Ljiljana Mitic. We look forward to working together. Baden-Baden, July 2015 Wolfgang Grenke Chairman of the Board of Directors

6 GRENKELEASING AG Consolidated Group 5 The GRENKELEASING AG Share The current geopolitical conflicts and trouble spots around the world continued to have a limited impact on the global financial markets in the second quarter of The European capital markets profited from the QE programme of the European Central Bank, which included monthly bond purchases of EUR 60 billion. Investors were also preoccupied with the possible reversal in interest rates by the US Federal Reserve, the growing possibility at that time of a Greek default and the significant correction in the Chinese stock market. This also affected the German DAX index, which reached a record high of 12,375 points in the second quarter, but still ended up forfeiting nine percent by the end of the quarter. The DAXsector Financial Services sector index, which also includes the shares of GRENKELEASING AG, developed similarly. The SDAX price index, however, achieved better performance and rose a total of one percent in the second quarter. The shares of GRENKELEASING AG were unfazed by the subdued development of the benchmark indices and the shares continued their upward trend. Starting the trading year at a price of EUR 88.99, GRENKELEASING AG shares climbed 45 percent during the first half of the year. Reaching a record high of EUR per share on the second to the last trading day in the second quarter of 2015, the share price had a rise of 20 percent in the quarter. Conversion to Registered Shares On May 12, 2015, the Annual General Meeting of GRENKELEASING AG resolved the conversion of the existing bearer shares into registered shares. Through the custody account and stock exchange conversion, which took place on July 10, 2015 after the stock market s close, we aim to communicate with our shareholders in a more targeted and personal manner in the future. The conversion will not change the legal status of the shareholders provided they are listed in the share register. The shareholders investment in our company also remains unchanged as do their related rights. Since July 13, 2015, the shares of GRENKELEASING AG have been listed as no-par value registered shares in the regulated market of all domestic stock exchanges as well as in the regulated market subsection with additional post-admission obligations (the Prime Standard) on the Frankfurt Stock Exchange. With the conversion, the ISIN and the securities identification number (Wertpapierkennnummer ["WKN"]) have changed as follows: ISIN: DE000A161N30 WKN: A161N3 The ticker symbol "GLJ" has remained unchanged.

7 GRENKELEASING AG Consolidated Group 6 Interim Group Management Report Targets and Strategy The GRENKE Consolidated Group operates worldwide through its subsidiaries and branch offices. A franchise model was established for entry into new regional markets both in and outside of Europe and for expanding our business using new financing products. GRENKELEASING AG ("the Company") does not hold interests in the legally independent companies of its franchisees. Accordingly, this interim group management report distinguishes between the GRENKE Consolidated Group ("the Consolidated Group"),which refers to GRENKELEASING AG and all of its consolidated subsidiaries and structured entities in accordance with IFRS, as well as the GRENKE Group, which refers to the GRENKE Consolidated Group including its legally independent franchise partners. Our business model is straightforward, sustainable and value-oriented. The origins of the GRENKE Group lie in lease financing for smaller IT products (small-ticket-it-leasing). Today we are one of the leading European companies in the field of financial services for small and medium enterprises (SMEs). We enter into new countries and continents step-by-step as part of our global expansion strategy. After entering a country, we increase our market presence continuously through cell divisions or by opening new locations. This approach puts us in a position to generate high growth for several years regardless of the respective local economic developments. For example, in our home market of Germany, we are seeing increasing success in smaller cities and are uncovering new potential. During the first quarter of the current fiscal year, we opened a new location in Bielefeld (Germany) and Malmö (Sweden) and in the reporting quarter we added new locations in Regensburg (Germany) and in Newport (Great Britain). We also acquired the company of our franchise partner in Slovenia in the course of the first quarter. When pursuing growth, our aim is not to avoid risk but to assess it as correctly as possible and apply adequate margins. We focus on countries with favourable competitive environments and attractive risk-reward profiles. This approach is how we sufficiently hedge existing and potential risks. Our long-standing proven and continually refined IT-based model for forecasting losses plays a central role before the conclusion of every contract. This model also represents a significant growth driver, a fact that was evident during the recent financial and sovereign debt crises. During this time, many vendors were forced to scale back their involvement in small-ticket IT leasing or even withdraw from the market altogether because the risk situation became unmanageable. For us, however, this development presents us with a number of attractive opportunities to systematically strengthen and expand our position as a leading provider of efficient services. Beyond our regional diversification, we are continuously expanding our product range and our offers for financial solutions. In addition to various financing, investment and payment products provided by GRENKE BANK AG ("GRENKE Bank"), we are also participating in the "lease guarantee" programmes of the German guarantee banks and are continuing the "Mikrokreditfonds Deutschland" programme throughout Germany that was granted by the Federal Ministry of Labour and Social Affairs. We also cooperate with the portal "Weltsparen". Finally, together with a growing number of development banks of individual German states and the federal government, GRENKE Bank also finances business start-ups and provides development funds for business investments that are financed through leasing. Since 2012, a total of 14,989 lease contracts has been concluded as part of these collaborations. During the reporting quarter, we added a cooperation with the Investitionsbank des Landes Brandenburg (the investment bank of the State of Brandenburg). As part of the first global loan, a total of EUR 5 million is available at favourable conditions for small- and medium-sized companies and members of self-employed professions who finance business investments through leasing. The purchase of lower-volume receivables (factoring) in various European countries is also a permanent and steadily growing offer in our extensive product range.

8 GRENKELEASING AG Consolidated Group 7 Our diversification in terms of regions, products and industries limits our strategic risk. The broad diversification of our portfolios across customers and industries and the comparably low average volumes of our contracts are typical in our line of business. We try to avoid cluster risks also in terms of our sales partners, and we remain independent of any one manufacturer with respect to our IT products. And finally, we rely on the ongoing expansion of our already broad range of refinancing instruments so that we can always take advantage of a variety of options when financing our growth. Macroeconomic and Sector-Specific Environment Traditionally, GRENKE Group s new business growth is relatively unaffected by the overall economic cycle. We are able to achieve profitable growth in both good economic times and in times of economic difficulty. We minimise the influence of the overall development in corporate insolvencies on our loss ratio using our sophisticated method for forecasting losses. What have a significant influence on our growth are industry trends such as the business policies of banks and financial service providers active in the leasing, factoring and deposit businesses. Our growth is also affected by the continually rising statutory requirements in our sector that usually provide us with relative competitive advantages due to our highly efficient operating processes. Any changes in the capital market or central bank interest rates that impact our refinancing costs are passed on to our customers by way of the conditions of our contracts. Such changes do not affect current contracts due to the matching terms of our refinancing. Nevertheless, the time gap needed to adjust our conditions can temporarily have a positive or negative effect on the profitability of our new business. Our broad range of refinancing instruments including deposits held at GRENKE Bank offer tremendous flexibility to be able to react to the various changes in the market or in expected interest rate developments. New business Following a good start in the first quarter, we continued to develop strongly and our new business growth for the first six months of the current fiscal year remained high. As a result, in the first six months of 2015, the new business at GRENKE Group Leasing that is the total of the acquisition costs of newly purchased lease assets grew 15 percent compared to the first six months of 2014 to EUR million. New business in our highly penetrated and very competitive home market of Germany generated strong double-digit growth once again amounting to twelve percent. We continue to grow the international share of our new business, which amounted to 72 percent in the first six months of this fiscal year after amounting to 71 percent in the first six months of the previous year and 66 percent in the first half of In Western Europe (without Germany), we achieved new business volume of EUR million in the first six months following EUR million in the comparable period of the previous year. This is equivalent to an increase of 14 percent. We were particularly successful in Switzerland and our core market France where our leasing new business climbed twenty-nine and nine percent, respectively. The new business in our southern European markets also grew significantly rising 20 percent from EUR million in the comparable period of the previous year to EUR million. In Northern/Eastern Europe, our leasing new business increased eight percent year-on-year. We continued to experience stronger-than-average growth in our other regions. In these countries, which are still relatively new for us, we increasingly steered our management towards growth without altering our risk assessment. In the six-month period, the new business volumes in these countries more than doubled (+107 percent). In absolute terms, new business volumes in these countries totalled EUR 10.9 million following EUR 5.2 million in the previous year.

9 GRENKELEASING AG Consolidated Group 8 In the first six months of the current fiscal year, the number of lease applications amounted to 177,691 and led to the conclusion of 77,121 new lease contracts. These numbers represent a conversion rate of 43 percent. A total of 145,088 of these applications stemmed from our international markets and, in turn, generated 61,089 new lease contracts. The international conversion rate of 42 percent was very close to the total conversion rate for the Company but still significantly below the rate of 49 percent generated in the German market. The mean acquisition value per lease contract was EUR 8,269 following EUR 8,082 in the first six months of the previous year. Our new business continues to maintain its high profitability. The contribution margin 2 (CM2) of our new business in the Leasing segment, which is defined as the present value of the operating income of a lease contract less the cost of risk and individual contract costs, increased by 14 percent from EUR million in the previous year to EUR million in the current year. The CM2 margin was 18.8 percent and only slightly below the previous year s level of 19.0 percent. GRENKE Group Factoring also demonstrated strong performance. The Factoring segment s new business volume soared 53 percent from EUR 94.9 million in the comparable prior year s period to EUR million in the first six months of the 2015 fiscal year. High demand in our international markets, where we realised growth of 108 percent, was a strong contributor to Factoring s growth in new business volume. In Germany, we achieved satisfactory and stable growth of 14 percent in comparison to the previous year. The Factoring segment s income margin of 1.45 percent was below the previous year s level of 1.95 percent. This margin is based on an average period for a factoring transaction of roughly 35 days in Germany (first half of 2014: roughly 31 days) and approximately 38 days internationally (first half of 2014: roughly 40 days). Through GRENKE Bank s collaboration with development banks, our banking business generated 38 percent growth in business start-up financing compared to the comparable period of the previous year, increasing from EUR 5.4 million as per December 31, 2014 to currently EUR 7.5 million. Deposit volumes at GRENKE Bank also rose sharply by 23 percent from EUR million as per December 31, 2014, to EUR million as per the June 30, 2015, reporting date. Growth was driven by the refinancing requirement for the growing new business and our liquidity management.

10 GRENKELEASING AG Consolidated Group 9 Shares in new business of GRENKE Group Leasing + Factoring + Business start-up financing including franchise partners as per June 30, 2015 Other regions 1.4% Germany 27.6% Southern Europe 20.1% Western Europe (without Germany) 36.3% Northern / Eastern Europe 14.6% New business 6M 2015: GRENKE Group Leasing EUR million (previous year: EUR million) GRENKE Group Factoring EUR million (previous year: EUR 94.9 million) Prev. year as per 30/06: Germany 29.4%; Western Europe (without Germany) 34.2%; Southern Europe 20.1%; Northern / Eastern Europe 15.5%; Other regions 0.8% Growth rates in new business of GRENKE Group Leasing as per June 30, 2015 (as against the comparable period of 2014) 30% % % % Germany Western Europe (without Germany) Southern Europe Northern / Eastern Europe Other regions Regions: Western Europe (without Germany): Austria, Belgium, France, Luxembourg, the Netherlands, Switzerland Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain Northern / Eastern Europe: Denmark, Finland, Ireland, Norway, Sweden, UK / the Czech Republic, Hungary, Poland, Romania, Slovakia Other regions: Brazil, Canada, Chile, Dubai, Turkey Prev. year as per 30/06: Germany 5.7%; Western Europe (without Germany) +18.8%; Southern Europe +26.9%; Northern / Eastern Europe +24.1%; Other regions 51.8%

11 GRENKELEASING AG Consolidated Group 10 Report on the Results of Operations Selected information from the consolidated income statement EURk Apr. 1, 2015 to Jun. 31, 2015 Apr. 1, 2014 to Jun. 31, 2014 Net interest income 46,943 38,415 Settlement of claims and risk provision 13,921 12,967 Net interest income after settlement of claims and risk provision 33,022 25,448 Profit from insurance business 12,326 10,109 Profit from new business 13,004 12,080 Gains (+) / losses ( ) from disposals Income from operating business 57,587 48,018 Staff costs 15,398 13,462 Of which total remuneration 12,656 10,906 Of which fixed remuneration 9,426 8,330 Of which variable remuneration 3,230 2,576 Selling and administrative expenses (excluding staff costs) 12,650 11,176 Of which IT project costs 1, Earnings before taxes 27,568 22,394 Net profit 20,077 16,677 Earnings per share (basic/diluted, in EUR) During the second quarter of the current 2015 fiscal year, we were able to continue the successful performance achieved in the first three months of the year. This development was mainly driven by the continued favourable interest rate environment and by the profitable new business generated in previous quarters from which income is successively accruing as the contracts progress. GRENKE Consolidated Group s net interest income rose by 22 percent in the reporting quarter compared to last year s quarter as a result of higher interest income from financing business and lower interest expenses on refinancing. Expenses for the settlement of claims and risk provision were within the usual quarterly range of fluctuation and rose seven percent in comparison to the previous year s quarter. The percentage increase in this item was significantly lower than the rise in net interest income and even declined in absolute terms in comparison to the first quarter of The Consolidated Group s loss rate amounted to 1.5 percent after 1.6 percent in the second quarter of As a result, net interest income after settlement of claims and risk provision saw a pleasing increase of 30 percent in comparison to the previous year. Profit from insurance business and profit from new business also developed positively increasing year-on-year by 22 percent and 8 percent, respectively. Both benefited from the high level of new business growth. Taking into account gains/losses from disposals, which tend to be volatile on a quarterly basis, GRENKE Consolidated Group s income from operating business grew 20 percent. Expenses developed similarly to income. Staff costs, as well as selling and administrative expenses, were 14 and 13 percent higher, respectively. The reason for this rise was the higher number of employees attained in the course of acquiring former franchise partners and higher consulting costs incurred in preparation for our pending market entries. Other operating expenses increased 37 percent compared to the second quarter of 2014 and other operating income rose

12 GRENKELEASING AG Consolidated Group percent. In absolute terms, both other operating expenses, as well as other operating income, remain insignificant for our overall earnings performance. On balance, the operating result increased to EUR 27.6 million after EUR 22.5 million in the previous year s period. This represents a rise of 23 percent. Earnings before taxes also increased 23 percent. Due to a virtually unchanged tax rate, the reporting quarter s net profit achieved an increase from EUR 16.7 million to EUR 20.1 million. This result corresponds to earnings per share of EUR 1.36 following earnings per share of EUR 1.13 in the second quarter of the prior fiscal year. Half-Year Comparison 2015 versus 2014 The information above pertaining to the quarter under review also essentially applies to the six-month period. Net interest income in the first half year improved by 22 percent to EUR 91.4 million compared to EUR 74.6 million in the previous year. The rise in expenses for the settlement of claims and risk provision was disproportionately low in the first half-year period. This item increased by 16 percent year-on-year from EUR 24.8 million in the previous year to EUR 28.9 million in the six-month period. The loss rate was at a level of 1.5 percent following the 1.55 percent reported in the first six months of the prior year. Net interest income after settlement of claims and risk provisions rose accordingly by 26 percent from EUR 49.8 million to EUR 62.6 million. Income from operating business grew from EUR 93.3 million to EUR million and included higher profits from insurance business and new business as well as break-even gains/losses from disposals. This represents an increase of 19 percent. With the disproportionate rise in expenses, the operating result climbed 26 percent and reached a level of EUR 52.5 million after EUR 41.7 million in the previous year s period. Overall, we were able to improve our cost-income ratio, or the ratio of income and expenses, during the first half of the year. Whereas in the previous year period we had reached a value of 56.0 percent, the ratio in the reporting period amounted to 53.8 percent. This performance underscores the profitability of our business. Earnings before taxes were similarly strong and, at EUR 52.6 million, exceeded the previous year s level of EUR 41.7 million by 26 percent. Net profit amounted to EUR 38.5 million after EUR 31.2 million in the prior year and represents an increase of 23 percent. This corresponds to earnings per share of EUR 2.61 following earnings per share of EUR 2.12 in the first half of the previous year.

13 GRENKELEASING AG Consolidated Group 12 Segment Development Business segments Segment reporting is based on the predominant organisational structure of the GRENKE Consolidated Group. Therefore, operating segments are divided in accordance with the management of the business areas in the Leasing, Banking and Factoring segments. Transactions between the operating segments are eliminated in the column "Consolidation effects". A regional split of the business activities is provided on a yearly basis as part of GRENKE Consolidated Group s financial statements for each fiscal year. Separate financial information is available for the three operating segments. More detailed information on the business segments can be found in the Consolidated Group s segment reporting. Business Development The Leasing segment continues to represent the most important earnings pillar for the GRENKE Consolidated Group. Therefore, the discussion on the results of operations of the GRENKE Consolidated Group essentially also applies to this segment. Accordingly, the operating segment income of the Leasing segment climbed strongly by 20 percent in the first six months of the current fiscal year to EUR million from EUR 85.3 million in the previous year. The segment result grew faster than segment income, increasing 30 percent from EUR 36.5 million in the previous year to EUR 47.5 million. The Factoring segment also experienced strong growth in operating segment income, rising 80 percent to EUR 1.8 million from EUR 1.0 million in the comparable period of the previous year. The segment result of EUR 0.2 million remained at the level of the previous year due to continued higher staff costs and expenses incurred in preparation for future growth. The Banking segment reported results slightly below the previous year s level. Operating segment income declined by five percent from EUR 7.0 million in the previous year s period to EUR 6.7 million in the reporting period. The segment result amounted to EUR 4.8 million after EUR 5.3 million in the previous year s period..

14 GRENKELEASING AG Consolidated Group 13 Report on Financial Position and Net Assets Selected information from the consolidated statement of financial position and the consolidated statement of cash flows EURk Jun. 30, 2015 Dec. 31, 2014 Current assets 1,267,502 1,179,316 thereof cash and cash equivalents 110,577 88,395 thereof lease receivables 944, ,781 Non-current assets 1,890,127 1,745,634 thereof lease receivables 1,707,261 1,579,317 Total assets 3,157,629 2,924,950 Current liabilities 988, ,974 thereof financial liabilities 851, ,319 Non-current liabilities 1,648,388 1,581,990 thereof financial liabilities 1,597,096 1,531,880 Equity 520, ,986 Equity ratio in percent Total liabilities and equity 3,157,629 2,924,950 Jan. 1, 2015 to Jun. 31, 2015 Jan. 1, 2014 to Jun. 31, 2014 Cash flow from operating activities 73,913 29,316 Net cash flow from operating activities 60,396 36,524 Cash flow from investing activities 10,293 8,968 Cash flow from financing activities 16,143 11,114 Total cash flow 33,960 56,606 The following discussion on net assets of the GRENKE Consolidated Group is based on the June 30, 2015, reporting date. Comparative prior year figures and percentage changes are based on the amounts at the end of the previous fiscal year as per December 31, These figures and percentages will be referred to as "the previous year" or "previous year s figure" in the following discussion. The earnings growth is also reflected in the balance sheet of the GRENKE Consolidated Group as per the June 30, 2015, reporting date. In comparison to the previous year, total assets grew eight percent to clearly above EUR 3 billion. The Consolidated Group s equity increased by six percent. As a result, the equity ratio as per the reporting date was 16.5 percent, or slightly below the previous year s value of 16.9 percent but still above our long-term target of 16 percent. The current and non-current lease receivables increased eight percent in the first half year. As the largest single position on the balance sheet, current and non-current lease receivables had a share in total assets of 84 percent as per the reporting date (previous year: 84 percent). As per June 30, 2015, the Consolidated Group s cash and cash equivalents were 25 percent above the comparable level of the previous year as a result of a cash proceeds from the high level of new business from previous periods, which provided us with us continued sufficient liquidity. Whereas current financial assets declined ten percent compared to the previous year, non-current financial assets rose 31 percent. On the equity and liabilities side of the balance sheet, total current liabilities increased 16 percent, and total non-current liabilities grew four

15 GRENKELEASING AG Consolidated Group 14 percent. As a result of reporting date-related factors, there was a rise in the Consolidated Group s deferred lease payments and pensions. Deferred lease payments rose 2.1 times over the level of the previous year. The 37 percent rise in pensions was due to the current low level of interest rates. In the course of fine-tuning our refinancing structure, we placed four new bonds in the first half-year amounting to EUR million. In addition, we issued five new promissory note loans in the amount of CHF 28.4 million and EUR 20.0 million, respectively. Moreover, in line with our goal of avoiding excess liquidity when possible, we issued only smaller volumes of our diverse instruments. These instruments included 13 commercial paper issues in February, March, May and June of 2015 that had a combined volume of EUR million. At 66 percent, the utilisation of our Asset-Backed Commercial Paper Programme (ABCP) as per the reporting date of June 30, 2015, was below the prior year s comparable level of 70 percent. Deposits at GRENKE Bank are another key component of our refinancing, which grew by EUR 12.3 million to EUR million in comparison to the end of fiscal year 2014 as a result of our liquidity management. All three pillars of our extensive mix of refinancing instruments were efficiently employed as per the June 30, 2015, reporting date. The largest share, amounting to 61 percent, consisted of instruments belonging to the category of "senior unsecured". Instruments contained in the category "asset-based" amounted to 22 percent and deposits at GRENKE Bank comprised 17 percent. Cash flow from operating activities totalled EUR 73.9 million in the first half year. Based on earnings before taxes of EUR 52.6 million, there were cash outflows originating primarily from the refinancing of lease receivables (EUR million), the granting of loans to franchisees and an increase in other assets of a net EUR 7.5 million. Cash inflows amounted to a total of EUR million and resulted mainly from a change in refinancing liabilities, the deposit business and deferred lease payments. Additional proceeds stemmed from the other liabilities item and amounted to EUR 11.7 million. After taxes and interest paid and received, the net cash flow from operating activities amounted to EUR 60.4 million following EUR 36.5 million in the first six months of the previous year. Cash flow from investing activities in the first half year was EUR 10.3 million following EUR 9.0 million in the previous year. This item mainly consists of payments for the purchase of operating and office equipment as well as intangible assets amounting in total to EUR 2.6 million. Cash flow from investing activities also includes a further cash outflow of EUR 7.7 million for the acquisition of the former franchise company in Slovenia in the first quarter of Total cash flows amounted to EUR 34.0 million in the six-month period in comparison to EUR 56.6 million in the previous year and also included cash flow from financing activities, which contained the net assumption of bank liabilities in the amount of EUR 0.1 million and the dividend payment of EUR 16.2 million.

16 GRENKELEASING AG Consolidated Group 15 Changes in the Governing Bodies The term of office for two Supervisory Board members, Dieter Münch and Prof. Dr. Thilo Wörn, ended with the close of the Annual General Meeting on May 12, The Board of Directors and Supervisory Board thank them for their contributions and tremendous commitment. Florian Schulte and Erwin Staudt were reelected by the Annual General Meeting for a further four-year term. Tanja Dreilich and Dr. Ljiljana Mitic were newly elected to the Supervisory Board, for the same four-year term. Following these new appointments, the proportion of women in GRENKELEASING AG s Supervisory Board amounted to one-third. Report on Risks, Opportunities and Forecasts Opportunities and Risks The following report on opportunities and risks relates to the GRENKE Consolidated Group and its individual segments. The opportunities and risks presented in the 2014 annual financial report continue to be relevant. New fundamental risks or risks of particular importance have not arisen. As in the previous fiscal year, we believe the opportunities for our development in the 2015 fiscal year outweigh the risks that are inherent in our business model. The demand for lease financing, as measured by the number of incoming applications described in the chapter on new business, remains high. Therefore, our focus is clearly placed on growing our new business and systematically increasing it while at the same time attaining risk appropriate margins. We aim to drive our future organic growth by adding new locations, branches and franchise partners and by penetrating new regional sales markets as well as expanding our range of financial services. We are not exposed to substantial individual risks due to the broad diversification of our business. Particularly in recessive periods, we experience rising losses that have a significant influence on our earnings development. Currently, economic developments are positive in most of the countries we operate in. However, given the larger number of countries we now operate in, there are individual countries experiencing a contrary trend. In the course of the year, losses are usually volatile and only have an impact roughly two years after the underlying business is concluded. Assuming these types of risks and successfully managing them is a central pillar of our business model. We rely on assessing risks as precisely as possible when concluding a contract so that we may include an appropriate premium in the contract s conditions. To accomplish this, we have implemented a comprehensive system of risk identification, quantification, control and management. This is a sophisticated system that is continuously developed further. It is an appropriate and capable tool for recognising risks at an early stage and managing them. We not only pay attention to individual risks but also in particular to possible risk clusters and overall interdependencies. In terms of refinancing the portfolio of lease receivables, the amount of interest rate risk is limited. Refinancing liabilities are hedged using derivatives to the extent that they carry variable interest rates. With new business, however, risks can occur from changes in interest rates and spreads. Therefore, the potential time lag it takes to pass on a change in interest rates to customers may have a temporary influence on the profitability of the new business. The European Central Bank has recently once again reaffirmed its current low interest rate policy. In the US, the Federal Reserve is currently switching from what has been a very expansive monetary to a more restrictive monetary policy, which could lead to an interest rate hike. A hike could result in the euro s continued weakness, which is already visible. Nevertheless, this will not have a noticeable effect on the business of the GRENKE Consolidated Group because for the Consolidated Group companies and

17 GRENKELEASING AG Consolidated Group 16 franchisees operating outside of the eurozone, from an outstanding financing volume of roughly EUR 1,000k, a corresponding hedge is provided for. In terms of lease refinancing, Switzerland, Brazil, Chile, Poland and Great Britain are confronted with currency risk to just a limited extent since in those countries lease refinancing agreements are made in the local currencies. In addition, payments are secured in the context of economic hedging. In terms of refinancing, political and geopolitical risks could lead to substantial short-term burdens on the capital market. However, the capital market has always provided sufficient funds at commercially reasonable terms to issuers with a solid reputation, even in difficult market situations. In the past, we have been able to place successfully new issues such as promissory note loans, commercial paper and ABS bonds in all types of market situations, optimised for our needs. In addition, our access to bank deposits through GRENKE Bank offers us an attractive source of refinancing that we can use with a high degree of flexibility. Forecasts After a very good start to the year, we are also very pleased with the performance of the first six months. The growth in new business of 15 percent at GRENKE Group Leasing remains at the upper end of our full-year forecast range of 11 to 15 percent. New business at our Factoring segment developed significantly better than was expected at the beginning of the year. With an increase of 53 percent, by the end of the first half year, this segment grew more than twice as fast as the 20 percent to 24 percent increase expected. This rate of expansion continues to clearly exceed our long-term target for the GRENKE Group of ten percent growth per year. After an increase of 23 percent in the GRENKE Consolidated Group s net profit in the first six months of the year, we are on track to exceed our previous full-year earning s target of EUR 71 million to 75 million. Therefore, we are raising our forecast for the current year and now expect net profit in the range of EUR 74 million to 78 million. After a substantial increase in net profit of 38 percent last year, net profit in the 2015 fiscal year is expected to grow accordingly by a further 14 to 20 percent. In the future, we will continue to follow our proven and successful business strategy. We focus on those markets in which we can achieve the appropriate margins for the amount of risk assumed and thus secure the profitability of the GRENKE Consolidated Group. This strategy allows us to take specific advantage of the different developments of the various markets in which we operate. We are also undertaking a targeted expansion of our market presence. We are prepared for further cell divisions and entries into new markets during the 2015 fiscal year that will include Singapore, which will also represent our entry into a new continent.

18 GRENKELEASING AG Consolidated Group 17 Responsibility Statement We hereby confirm to the best of our knowledge, and in accordance with the accounting standards to be used for interim reporting, that the interim consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Consolidated Group. Furthermore, the interim Group management report conveys a fair review of the development of the business, including the results and the position of the Consolidated Group, together with a description of the important opportunities and risks for the expected development of the Consolidated Group for the remainder of the fiscal year.

19 GRENKELEASING AG Consolidated Group 18 Condensed Interim Consolidated Financial Statements Consolidated Income Statement 3-month report 6-month report Apr. 1, 2015 to Apr. 1, 2014 to Jan. 1, 2015 to Jan. 1, 2014 to EURk Jun. 30, 2015 Jun. 30, 2014 Jun. 30, 2015 Jun. 30, 2014 Interest and similar income from financing business 59,186 51, , ,240 Expenses from interest on refinancing and deposit business 12,243 13,533 25,015 27,599 Net interest income 46,943 38,415 91,423 74,641 Settlement of claims and risk provision 13,921 12,967 28,860 24,810 Net interest income after settlement of claims and risk provision 33,022 25,448 62,563 49,831 Profit from insurance business 12,326 10,109 23,587 19,525 Profit from new business 13,004 12,080 24,816 23,181 Gains(+) / losses ( ) from disposals Income from operating business 57,587 48, ,934 93,269 Staff costs 15,398 13,462 30,431 26,546 Depreciation and impairment 2,456 1,437 3,947 2,932 Selling and administrative expenses (not including staff costs) 12,650 11,176 24,173 22,440 Other operating expenses 1, ,597 1,702 Other operating income 1,502 1,094 2,753 2,063 Operating result 27,585 22,455 52,539 41,712 Expenses / income from fair value measurement Other interest income Other interest expenses Earnings before taxes 27,568 22,394 52,562 41,678 Income taxes 7,491 5,717 14,082 10,496 Net profit 20,077 16,677 38,480 31,182 Of which, attributable to: non-controlling interests shareholders of GRENKELEASING AG 20,077 16,680 38,480 31,185 Earnings per share (basic) in EUR Earnings per share (diluted) in EUR Average number of shares outstanding (basic) 14,754,199 14,732,758 14,754,199 14,716,469 Average number of shares outstanding (diluted) 14,754,199 14,732,758 14,754,199 14,716,469

20 GRENKELEASING AG Consolidated Group 19 Consolidated Statement of Comprehensive Income 3-month report 6-month report Apr. 1, 2015 to Apr. 1, 2014 to Jan. 1, 2015 to Jan. 1, 2014 to EURk Jun. 30, 2015 Jun. 30, 2014 Jun. 30, 2015 Jun. 30, 2014 Net profit 20,077 16,677 38,480 31,182 Items that may be reclassified to profit and loss in future periods Appropriation to / reduction of hedging reserve (before taxes) Income taxes Appropriation to / reduction of hedging reserve (after taxes) Change in currency translation differences (before taxes) , Income taxes Change in currency translation differences (after taxes) , Items that will not be reclassified to profit and loss in future periods Appropriation to / reduction of reserve for actuarial gains and losses (before taxes) Income taxes Appropriation to / reduction of reserve for actuarial gains and losses (after taxes) Other comprehensive income , Total comprehensive income 19,586 16,749 43,617 31,462 Of which, attributable to: non-controlling interests shareholders of GRENKELEASING AG 19,586 16,749 43,617 31,462

21 GRENKELEASING AG Consolidated Group 20 Consolidated Statement of Financial Position EURk Jun. 30, 2015 Dec. 31, 2014 Assets Current assets Cash and cash equivalents 110,577 88,395 Financial instruments that are assets Lease receivables 944, ,781 Other current financial assets 53,821 59,816 Trade receivables 4,267 4,793 Lease assets for sale 8,251 8,756 Tax assets 11,561 10,940 Other current assets 134, ,067 Total current assets 1,267,502 1,179,316 Non-current assets Lease receivables 1,707,261 1,579,317 Financial instruments that are assets Other non-current financial assets 40,191 30,714 Property, plant, and equipment 40,995 40,411 Goodwill 62,506 57,285 Other intangible assets 17,630 14,264 Deferred tax assets 20,406 21,869 Other non-current assets 1,138 1,433 Total non-current assets 1,890,127 1,745,634 Total assets 3,157,629 2,924,950

22 GRENKELEASING AG Consolidated Group 21 Consolidated Statement of Financial Position EURk Jun. 30, 2015 Dec. 31, 2014 Liabilities and equity Liabilities Current liabilities Financial liabilities 851, ,319 Liability financial instruments 6,616 3,506 Trade payables 17,000 9,821 Tax liabilities 7,613 7,043 Deferred liabilities 9,624 10,312 Current provisions 1,887 1,887 Other current liabilities 12,512 11,214 Deferred lease payments 82,310 26,872 Total current liabilities 988, ,974 Non-current liabilities Financial liabilities 1,597,096 1,531,880 Liability financial instruments 1,341 1,077 Deferred tax liabilities 45,439 45,692 Pensions 4,511 3,281 Non-current provisions 1 60 Total non-current liabilities 1,648,388 1,581,990 Equity Share capital 18,859 18,859 Capital reserves 116, ,491 Retained earnings 377, ,389 Other components of equity 7,384 2,247 Total equity attributable to shareholders of GRENKELEASING AG 520, ,986 Non-controlling interests 0 0 Total equity 520, ,986 Total liabilities and equity 3,157,629 2,924,950