GRENKELEASING AG Group. Financial Report for the 3rd Quarter and the First Nine Months 2015

Transcription

1 GRENKELEASING AG Group Financial Report for the 3rd Quarter and the First Nine Months 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 Report on Risks, Opportunities and Forecasts 15 Condensed Interim Consolidated Financial Statements 17 Consolidated Income Statement 17 Consolidated Statement of Comprehensive Income 18 Consolidated Statement of Financial Position 19 Consolidated Statement of Cash Flows 21 Consolidated Statement of Changes in Equity 23 Notes to the Condensed Interim Consolidated Financial Statements 24 Calendar of Events and Contact Information 41

3 GRENKELEASING AG Consolidated Group 2 Key Figures GRENKE Group Jan. 1, 2015 to Sep. 30, 2015 Change (%) Jan. 1, 2014 to Sep. 30, 2014 Unit New business GRENKE Group Leasing 961, ,279 EURk of which international 698, ,776 EURk of which franchise international 19, ,509 EURk of which Germany 242, ,994 EURk Western Europe (without Germany)* 315, ,028 EURk Southern Europe* 239, ,931 EURk Northern / Eastern Europe* 147, ,848 EURk Other regions* 16, ,478 EURk New business GRENKE Group Factoring 230, ,159 EURk of which Germany 87, ,226 EURk of which international 110, ,015 EURk of which franchise international 32, ,918 EURk GRENKE Bank Deposits 314, ,677 EURk New business start-up financing (incl. microcredit business) 14, ,390 EURk Contribution margin 2 (CM2) on new business GRENKE Group Leasing 177, ,240 EURk of which international 140, ,451 EURk of which franchise international 3, ,946 EURk of which Germany 33, ,843 EURk Western Europe (without Germany)* 62, ,716 EURk Southern Europe* 50, ,751 EURk Northern / Eastern Europe* 28, ,217 EURk Other regions* 3, ,713 EURk Further information leasing business Number of new contracts 113, ,596 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, ,389 EURm Number of current contracts 472, ,153 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 Sep. 30, 2015 Change (%) Jan. 1, 2014 to Sep. 30, 2014 Unit Key figures income statement Net interest income 140, ,243 EURk Settlement of claims and risk provision 43, ,060 EURk Profit from insurance business 36, ,490 EURk Profit from new business 37, ,959 EURk Gains (+) / losses (-) from disposals ,779 EURk Other operating income 4, ,238 EURk Cost of new contracts 25, ,413 EURk Cost of current contracts 7, ,766 EURk Project costs and basic distribution costs 30, ,617 EURk Management costs 22, ,236 EURk Other costs 7, ,136 EURk Operating result 80, ,481 EURk Other interest income (expense) EURk Income / expenses from fair value measurement EURk EBT (earnings before taxes) 80, ,483 EURk Net profit 59, ,331 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 46, ,253 EURk of which total remuneration 38, ,911 EURk of which fixed remuneration 28, ,039 EURk of which variable remuneration 9, ,872 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, We are pleased to report to you today on the continued positive development of the GRENKE Consolidated Group. The success of our proven, value-oriented business model and the profitable performance of the past several quarters are becoming abundantly clear. The positive trend witnessed in the first six months of the year continued unabated in the third quarter of Net profit for the nine-month period grew a satisfactory 24 percent to EUR 59.7 million as a result of the lower rise in losses in relation to income growth and the attractive overall interest rate environment. Based on this encouraging development, we expect to even exceed the increased forecast provided in July 2015 of a net profit in the range of EUR 74 to 78 million. For 2015, we now expect to achieve net profit in the range of EUR 78 to 80 million, representing year-on-year growth of at least 20 percent. We also had tremendous success in generating new business. The total volume of the GRENKE Group rose 23 percent year-on-year in the nine-month period, and GRENKE Group Leasing s new business climbed by 17 percent. These increases resulted in growth at the GRENKE Group above our long-term target of ten percent, with growth in our Leasing segment even exceeding the forecasted rise of between 11 and 15 percent given at the start of the year. Whereas our leasing business in Germany achieved further double-digit growth, our leasing business in France remained slightly below our expectations. Nevertheless, we were able to more than compensate for this performance with our international business. Persistently high demand was also seen in our factoring business. Given the rise in new business of 54 percent in the first nine months of this fiscal year compared to the previous year, we are well on our way to doubling our targeted growth rate of 20 to 24 percent set out for At 18.5 percent, the contribution margin 2 in our leasing business remained at a very high level in the nine-month period after a level of 19.3 percent in the previous year. We also plan to take advantage of other attractive growth opportunities. To do so, we have strengthened our equity base in the third quarter by issuing hybrid capital with a volume of EUR 30 million. This instrument, which fits in well strategically with our profitable growth path, was used for the first time. This bond together with our equity ratio of 17.5 percent (based on total assets of EUR 3.2 million as per the reporting date), equip us as best as possible so that we may continue to act quickly and flexibly in the future. We continue to enjoy significant attention from the capital market. The trust awarded to us by investors is directly reflected in our share price performance. During the past nine months, our shares have gained 59 percent and have achieved a new record high of EUR 158 in mid-september. The Company s market capitalisation has climbed to over EUR 2.3 billion. This makes us not only an attractive investment for many investors but also a reliable core holding in their portfolio. We also continue to enjoy an excellent reputation on the bond market evidenced by our recent rating from Standard & Poor s in August 2015, in which our previous "negative" outlook was raised to "stable". We have maintained a high credit rating (BBB+/A-2) with Standard & Poor s since Baden-Baden, October 2015 Wolfgang Grenke Chairman of the Board of Directors

6 GRENKELEASING AG Consolidated Group 5 The GRENKELEASING AG Share The international financial markets got off to a strong start in the third quarter supported in large part by the positive economic data from Europe and the US and anticipation that an agreement would be reached on Greece s debt. There were concerns, however, due to the accumulation of negative economic signals from China and the general mood of uncertainty on the Chinese stock markets, which had already undergone a massive correction. These factors also affected the international markets as the quarter progressed: markets suffered heavy losses in late August and have only seen a slow recovery since. The trend only turned positive at the end of the quarter when significant gains in Asia were made, and the US delivered positive data from the labour market. On balance, the German DAX benchmark index declined twelve percent during the third quarter, marking the strongest quarterly decline in four years. The DAXsector Financial Services sector index, in contrast, which includes the shares of GRENKELEASING AG, performed more positively and gained nine percent during the July to September period. The SDAX price index during this period lost three percent. The shares of GRENKELEASING AG remained resilient in the third quarter and continued their strong upward price trend that began at the end of 2014, despite the high price fluctuations on the international financial markets. By mid-september, the shares had almost doubled within a single year reaching a record high of EUR At the end of the quarter, the shares were quoted at roughly EUR 140, which amounted to a nine percent rise on balance for the quarter.

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 the Group s entry into new regional markets and the introduction of additional financing products. GRENKELEASING AG ("the Company") does not hold interests in the legally independent companies of its franchisees. Accordingly, this interim 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. We are one of the leading European companies in the field of financial services for small and medium enterprises (SMEs) focused on lease financing for smaller IT products (small-ticket IT leasing). Our business model is straightforward, sustainable and value-oriented. The broad diversification of our portfolios across customers, industries and countries and the comparably low average volumes of our contracts are characteristic of our business. The standardisation of our offers facilitates the quick and secure processing of contracts. We grow through our continual entry into new countries in Europe, North and South America and Asia. We also continuously increase our market presence in our established markets. Moreover, we are steadily expanding our product range and our offers of financial solutions. Our innovative "esignature" product, introduced in the reporting quarter, is already broadly used by our leasing customers and specialist reseller partners. This digital signature is not only simple, flexible and convenient, but this paperless contract further speeds up the processing carried out by our resellers and thus reduces the time between the contract s conclusion and the receipt of funds. This is how we reinforce our position as the preferred partner of our resellers. An important and fast growing focus of ours is the purchase of lower volume receivables (factoring) in various European countries. During the first nine months of the current fiscal year, we opened new locations for our leasing business in the cities of Bielefeld, Regensburg, Newport (Great Britain) and Malmö (Sweden). Also in the first quarter of 2015, we acquired the company of our former franchise partner in Slovenia. By the end of the year, we plan to complete a cell division in France and enter the markets in Ireland (factoring) and Singapore (leasing). In addition to various financing, investment and payment products provided by GRENKE BANK AG ("GRENKE Bank") in Germany, we also participate in the "lease guarantee" programme sponsored by the German guarantee banks and work with the "Weltsparen" portal. Since June 2015, contracts totalling EUR 1.7 million have been concluded under the "Mikrokreditfonds Deutschland" programme sponsored the Federal Ministry of Labour and Social Affairs. Finally, together with a growing number of federal and state development banks, GRENKE Bank also finances business start-ups and provides development funds to small- and medium-sized companies and members of self-employed professions for business investments financed through leasing. A total of 15,910 leasing contracts have been concluded since 2012 as part of these collaborations. The cooperation with NRW.BANK, the state development bank of North Rhine-Westphalia, was expanded in the reporting quarter to include a global bond in the amount of EUR 25 million. Thanks to our international presence and our broad product range, we can focus our growth on those countries and products offering a favourable, competitive environment and in turn an attractive risk-reward profile. When doing so, our aim is not to avoid risk but to assess it as correctly as possible and enforce adequate margins. We do this by using our proprietary, proven and continuously refined IT-based model for forecasting losses. This model has been a key contributor to our long-standing success: high growth, limited risk, and attractive margins through all economic cycles.

8 GRENKELEASING AG Consolidated Group 7 We finance our growth using a steadily growing range of refinancing instruments. This is how we ensure that we have a variety of flexible financing options available to us at all times. We have these options as a result of our long-term economic success and especially because we have a reputation as a reliable business partner. Therefore, we pay special attention to maintaining our standing on the equity and debt markets. Macroeconomic and Sector-Specific Environment Traditionally, the growth in GRENKE Group s new business is relatively unaffected by overall economic cycles. We are able to achieve profitable growth in both good economic times and times of economic difficulty. We minimise the influence that the overall development in corporate insolvencies has on our loss ratio using our sophisticated method for forecasting losses. Industry trends, such as the business policies of banks and financial service providers in the leasing, factoring and deposit businesses have a significant influence on our growth as does the sector s continual increase in statutory requirements. Our highly efficient operating processes typically give us a relative competitive advantage. Any changes in the capital market or central bank interest rates that impact our refinancing costs are passed on to our customers through the conditions of our contracts. These types of changes do not affect current contracts because of our congruent refinancing structure. Nevertheless, the time gap needed to adjust our conditions can have a temporary 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 so that we can react to various changes in the market or in expected interest rate developments. New Business Once again, we were very successful in growing our new business. In comparison to the nine-month period of the previous year, the GRENKE Group increased its new business volume by 23 percent to EUR 1,205.7 million. New business at GRENKE Group Leasing that is, the total of the acquisition costs of newly purchased leased assets climbed 17 percent to EUR million in the first nine months of the current fiscal year. It is important to highlight that the new business growth in our German home market increased by 16 percent, marking a return to the high growth rates attained in our international markets. The international share of our new business remains high at 75 percent and underscores our strategy of generating a growing share of our new business outside of Germany. In Western Europe (without Germany), we acquired new business volume of EUR million in the nine-month period, which was 13 percent more than we obtained in the same period of the previous year. We grew only a moderate nine percent in our core market of France, but continued to successfully expand our market shares in the important markets of Italy and Switzerland, where we grew by 33 and 28 percent, respectively. In our Southern European markets, we expanded rapidly and increased the volume of new business in leasing by 25 percent to EUR million. In Northern/Eastern Europe, we recorded a rise of 13 percent in comparison to the previous year and acquired new business of EUR million. We had a stronger-than-average increase in the new business of our other regions, which mainly includes countries that are relatively new for us. In these countries, we increasingly steered our management towards growth without having to raise our risk assessment. This led to a near doubling of new business volumes (+94 percent) in comparison to the previous year. In absolute terms, new business volumes in these countries totalled EUR 16.4 million following EUR 8.5 million in the previous year.

9 GRENKELEASING AG Consolidated Group 8 In the period from January to September, we achieved a total of 257,625 lease applications. The conversion rate (applications into contracts) amounted to 44 percent, and a corresponding 113,448 new contracts were concluded. A total of 208,808 of these applications stemmed from our international markets and led to 89,160 new contracts. This resulted in a conversion rate of 43 percent, which is slightly below the rate that includes Germany where a total of 48,817 applications led to 24,288 new contacts, or a good fifty percent of applications were converted into contracts. The mean acquisition value per lease contract was EUR 8,472 compared to a value of EUR 8,164 in the first nine months of the previous year. GRENKE Group also continues to be highly profitable. 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 twelve percent from EUR million to EUR million. At 18.5 percent, the CM2 margin remained high and was just slightly below the previous year s level of 19.3 percent. New business at GRENKE Group Factoring developed dynamically in the nine-month period posting a 54 percent rise in acquired volume that is, the sum of purchased receivables and reached a value of EUR million. This figure amounts to a quarter of all new business of GRENKE Group Leasing and underlines the high importance of this segment for the GRENKE Group. A majority of this growth stemmed from our international markets where we recorded almost a doubling (+96 percent) of our new business. In Germany, we increased the volume of new business by 14 percent due to increased competition. The income margin in Germany of 2.11 percent (previous year: 2.13 percent) was clearly above the margin of the international business of 1.37 percent (previous year: 1.93 percent). This margin is based on an average period for a factoring transaction of roughly 38 days in Germany (9M-2014: 33 days) and approximately 36 days internationally (9M-2014: 36 days). GRENKE Bank s collaboration with development banks led to a 71.3 percent increase from EUR 8.4 million to EUR 14.4 million in the volume of business start-up financing, which includes the microcredit business. Deposit volumes at GRENKE Bank as per the September 30 reporting date grew seven percent to EUR million after their level of EUR million at the end of the previous fiscal year.

10 GRENKELEASING AG Consolidated Group 9 Shares in new business of GRENKE Group Leasing + Factoring + Business start-up financing including franchise partners as per September 30, 2015 Other regions 1.3% Germany 28.6% Southern Europe 19.9% Western Europe (without Germany) 35.3% Northern / Eastern Europe 14.9% New business 9M 2015: GRENKE Group Leasing EUR million (previous year: EUR million) GRENKE Group Factoring EUR million (previous year: EUR million) Prev. year as per 30/09: Germany 30.1%; Western Europe (without Germany) 33.9%; Southern Europe 19.6%; Northern / Eastern Europe 15.5%; Other regions 0.9% Growth rates in new business of GRENKE Group Leasing as per September 30, 2015 (as against the comparable period of 2014) 30% % 10% % 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 30/09: Germany 3.2%; Western Europe (without Germany) +21.0%; Southern Europe +26.1%; Northern / Eastern Europe +22.2%; Other regions 33.1%

11 GRENKELEASING AG Consolidated Group 10 Report on the Results of Operations Selected information from the consolidated income statement EURk Jul. 1, 2015 to Sep. 30, 2015 Jul. 1, 2014 to Sep. 30, 2014 Net interest income 49,017 40,602 Settlement of claims and risk provision 14,957 14,250 Net interest income after settlement of claims and risk provision 34,060 26,352 Profit from insurance business 13,266 10,965 Profit from new business 12,484 11,778 Gains (+) / losses ( ) from disposals 13 1,047 Income from operating business 59,797 50,142 Staff costs 15,909 13,707 Of which total remuneration 13,139 11,274 Of which fixed remuneration 9,804 8,509 Of which variable remuneration 3,335 2,765 Selling and administrative expenses (excluding staff costs) 14,295 11,546 Of which IT project costs 1, Earnings before taxes 28,242 23,805 Net profit 21,208 17,149 Earnings per share (basic/diluted, in EUR) During the third quarter of the current 2015 fiscal year, we continued the strong growth seen in the first six months of the year. We increased our quarterly net profit year-on-year by 24 percent. Several positive developments contributed to this performance: the profitable new business generated in previous quarters from which we successively accrue income as contracts progress, the consistently attractive interest rate environment and the favourable development of losses. Increased interest and similar income from financing business, as well as declining expenses from interest on refinancing, led to a rise in net interest income of 21 percent compared to the previous year. Expenses for the settlement of claims and risk provision again had a comparatively lower increase of merely five percent year-on-year as a result of our active and risk-oriented margin management. The Consolidated Group s loss rate amounted to 1.5 percent after 1.7 percent in the third quarter of As a result, net interest income after settlement of claims and risk provision saw a gratifying increase of 29 percent in comparison to the previous year. Profit from insurance business and profit from new business also developed in line with our expectations. Profit from insurance business grew by 21 compared to the previous year as a result of the strong growth in our new business and profit from new business increased by six percent. 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 19 percent. Staff costs increased by 16 percent year-on-year as a result of the higher number of employees and a higher share of performance-related remuneration. Selling and administrative expenses grew by 24 percent primarily as a result of considerably higher IT project costs (+89 percent) as well as higher consulting costs in preparation for our pending market entries. Other operating expenses increased by 30 percent compared to the previous year and other operating income

12 GRENKELEASING AG Consolidated Group 11 grew 13 percent. On an absolute basis, these increases continue to have little impact on the earnings development of the GRENKE Consolidated Group. On balance, the GRENKE Consolidated Group s operating result in the reporting quarter rose a satisfactory 19 percent and reached a net EUR 28.2 million after EUR 23.8 million in the third quarter of the previous year. Earnings before taxes also increased 19 percent during the quarter. Thanks to a reduced tax rate of 25 percent after 28 percent in the previous year, the reporting quarter s net profit increased 24 percent from EUR 17.1 million to EUR 21.2 million and resulted in earnings per share of EUR 1.41 after EUR 1.16 in the comparable period of the previous year. Nine-month Comparison 2015 versus 2014 The information above on the development of the third quarter also essentially applies to the nine-month period. Net interest income in the first nine months improved 22 percent from EUR million in the previous year s period to EUR million in the reporting period. The twelve percent rise in expenses for the settlement of claims and risk provision from EUR 39.1 million to EUR 43.8 million was disproportionately low. The loss rate was 1.5 percent following 1.6 percent reported in the nine-month period of the prior year. Net interest income after settlement of claims and risk provision rose accordingly by 27 percent from EUR 76.2 million to EUR 96.6 million. The Consolidated Group s income from operating business increased 19 percent from EUR million in the previous year to EUR million and included higher profits from insurance business and new business as well as break-even gains/losses from disposals. Income growth in the nine-month period outpaced expense growth. Staff costs rose 15 percent year-on-year, and selling and administrative expenses increased a mere 13 percent. Accordingly, the operating result grew 23 percent and reached EUR 80.7 million after EUR 65.5 million in the comparable period of the previous year. Overall, we were able to improve our cost-income ratio the ratio of income and expenses from 55.1 percent in the previous year s period to 53.8 percent in the reporting period. This not only shows the margin strength of our business but also the high efficiency of our processes. Earnings before taxes were similarly strong and at EUR 80.8 million exceeded the previous year s level of EUR 65.5 million by 23 percent. Net profit reached EUR 59.7 million after EUR 48.3 million in the comparable period of the previous year, representing an increase of 24 percent. Earnings per share increased to EUR 4.02 after EUR 3.28 in the comparable period 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 according to the management of the business areas in the Leasing, Banking and Factoring segments. Effects from 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 essentially also applies to this chapter. The operating segment income of the Leasing segment grew 20 percent year-on-year and reached EUR million. The below-average rise in expenses resulted in a 27 percent increase in the segment result to EUR 73.3 million. We also recorded strong growth in our Factoring segment. In the period from January to September, operating segment income increased 49 percent yearon-year to EUR 2.7 million and the segment result amounted to EUR 0.2 million, which was just slightly below the prior year s level of EUR 0.3 million. Our Banking segment, which comprises the activities of GRENKE Bank, experienced a slight decline. Operating segment income decreased three percent in the reporting period compared to the previous year and totalled EUR 9.9 million after EUR 10.1 million. The segment result amounted to EUR 7.2 million following EUR 7.7 million in the previous year.

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 Sep. 30, 2015 Dec. 31, 2014 Current assets 1,309,931 1,179,316 thereof cash and cash equivalents 122,034 88,395 thereof lease receivables 964, ,781 Non-current assets 1,937,463 1,745,634 thereof lease receivables 1,749,503 1,579,317 Total assets 3,247,394 2,924,950 Current liabilities 904, ,974 thereof financial liabilities 777, ,319 Non-current liabilities 1,774,297 1,581,990 thereof financial liabilities 1,721,360 1,531,880 Equity 568, ,986 Equity ratio in percent Total liabilities and equity 3,247,394 2,924,950 Jan. 1, 2015 to Sep. 30, 2015 Jan. 1, 2014 to Sep. 30, 2014 Cash flow from operating activities 60, Net cash flow from operating activities 42,835 7,130 Cash flow from investing activities 11,669 10,142 Cash flow from financing activities 13,088 10,840 Total cash flow 44,254 28,112 The earnings growth is also reflected in the balance sheet of the GRENKE Consolidated Group as per the September 30, 2015, reporting date. As a result of our growth during the first nine months of the fiscal year, total assets increased eleven percent compared to December 31, 2014, and totalled over EUR 3.2 billion. At the same time, our equity grew by 15 percent, mainly as a result of the issue of EUR 30.0 million of hybrid capital in the third quarter. With a stronger equity ratio of 17.5 percent after 16.9 percent at the end of the previous fiscal year, we are not only significantly above our longterm target of 16 percent but also optimally equipped for further growth. Current and non-current lease receivables, which is the largest single position on our balance sheet, grew by eleven percent in the first nine months. As in the prior year, this position comprises 84 percent of our total assets. The Consolidated Group s cash and cash equivalents remain at a comfortably high level after increasing 38 percent as per the reporting date compared to their level on December 31, We continue to follow our strategy of using our liquid assets operationally particularly to finance lease receivables when our only other option is to invest these funds in low-interest bearing instruments. Other significant changes on the asset side of the balance sheet occurred in the category of financial assets. Non-current financial assets rose 51 percent above their value at the end of the previous fiscal year. On the equity and liabilities side of the balance sheet, the sum of current and non-current liabilities grew by six percent and twelve percent, respectively. The strong growth in our new business resulted in higher non-current financial liabilities,

15 GRENKELEASING AG Consolidated Group 14 which largely include our liabilities from refinancing. We also recorded an increase in the Consolidated Group s deferred lease payments and pension provisions. Deferred lease payments had a reporting-date related rise of 1.7x, and pension provisions grew 35 percent as a result of the low level of interest rates. We continue to rely on a wide range of refinancing sources to finance our lease receivables. These sources include debtand equity-like instruments. By September 30, 2015, we had placed a total of five new bonds totalling over EUR million as well as hybrid capital of EUR 30.0 million, already mentioned. Additional information on the hybrid capital can be found in the Notes on page 31. We also issued eleven promissory note loans in the first nine months with a total volume of EUR million and CHF 28.4 million as well as diverse short-term commercial paper that totalled EUR million. The commercial paper was issued as part of our goal of avoiding excess liquidity when possible. This was offset by the scheduled redemption of two bonds with a total volume of EUR million and two promissory note loans totalling EUR 82.9 million and CHF 3.6 million year-to-date. The utilisation of our Asset-Backed Commercial Paper (ABCP) programme as per the reporting date was 76.3 percent, an increase of 6.6 percentage points over the level as per the end of the previous fiscal year. As a third key pillar in our extensive refinancing mix, we have also raised the level of deposits at GRENKE Bank in the context of our liquidity management. As per September 30, deposits had risen to EUR million after amounting to EUR million at the end of the previous fiscal year. In the first nine months of the current fiscal year, we generated EUR 60.8 million in cash flow from operating activities (9M- 2014: EUR 0.2 million) based on earnings before taxes of EUR 80.8 million. Cash outflows resulted mainly from the refinancing of lease receivables (EUR million), a loan to franchisees and an increase in other assets of a net EUR 22.7 million. Cash inflows totalling EUR million resulted mainly from the changes in refinancing liabilities, the deposit business and deferred lease payments. Additional proceeds originated from other liabilities and amounted to EUR 5.6 million. After taxes and interest paid and received, the net cash flow from operating activities amounted to EUR 42.8 million following a total of EUR 7.1 million in the nine-month period of the previous year. Cash flow from investing activities mainly consisted of payments for the purchase of operating and office equipment and intangible assets (EUR 4.1 million). It also included a cash outflow for the acquisition of a former franchise company in Slovenia in the first quarter of 2015 (EUR 7.7 million). The cash flow from investing activities amounted to EUR 11.7 million after EUR 10.1 million in the previous year. Total cash flows in the first nine months were EUR 44.3 million after a total of EUR 28.1 million in the previous year. Total cash flows included cash flow from financing activities containing the net repayment of bank liabilities (EUR 0.2 million), net proceeds from the issue of hybrid capital in the third quarter (EUR 29.5 million), and a dividend payment to shareholders (EUR 16.2 million).

16 GRENKELEASING AG Consolidated Group 15 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 that were presented in the 2014 annual financial statements continue to be relevant. New risks or risks of material importance did not arise. We believe the opportunities for our further development significantly outweigh the risks that are inherent in our business model. The demand for lease financing remains high, as measured by the number of incoming applications described in the chapter on new business. This allows us to focus clearly on new business growth and systematically increase it while achieving risk-appropriate margins at the same time. We will continue to forge ahead consistently with our organic growth supported by our planned entry into the Singapore market in the fourth quarter of 2015, which will expand our presence in Asia. We are not exposed to substantial individual risks due to the broad diversification of our business. Especially in recessive periods, we monitor rising losses that have a significant influence on our earnings development. Economic developments are currently positive in most of the countries we operate in. 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 element of our proven business model. We are determined to assess 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 refined. 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 to possible risk clusters and overall interdependencies. In terms of refinancing the portfolio of lease receivables, the amount of interest rate risk is limited. Liabilities from refinancing are hedged using derivatives to the extent that they have variable interest rates. In terms of new business, however, risks can occur from interest and spread changes. Therefore, the possible time lag after which the change in interest rates is passed on to customers may have a temporary influence on the profitability of our new business. While the US Federal Reserve is currently moving from a very expansive to a more restrictive monetary policy, a turnaround in interest rates in Europe is not yet foreseeable. A more restrictive monetary policy in the US could lead to a rise in key interest rate and continued weakness in the euro. However, this would not have a noticeable impact on the GRENKE Consolidated Group s business because corresponding hedges would be provided for outstanding financing volumes starting at EUR 1,000k for subsidiaries or franchise companies operating outside of the Eurozone. Currency risks impact the lease refinancing operations in Switzerland, Brazil, Chile, Poland and Great Britain only to a limited extent since the lease refinancing agreements in those countries are based on local currencies. In addition, payments are secured using 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 a history of always providing 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 successfully place new issues such as promissory note loans, commercial paper, ABS bonds, and, recently, hybrid capital, in all types of market situations, when needed. In addition, our access to bank deposits through GRENKE Bank offers us an attractive source of refinancing that can be used with a high degree of flexibility.

17 GRENKELEASING AG Consolidated Group 16 Forecasts We are thoroughly satisfied with the development of the first nine months of the 2015 fiscal year. A key contributor to this development has been the growing benefit from the rapid pace of expansion we experienced in past quarters. With new business growth at GRENKE Group Leasing of 17 percent in the nine-month period, we are not only continuing our expansion without interruption, but we are also clearly above our full-year forecast of between 11 and 15 percent growth. The growth in new business at our Factoring segment has developed far better than projected at the start of the year. The increase of 54 percent in the first nine months puts us on track to more than double our projected growth of 20 to 24 percent. We are also clearly exceeding our long-term target of achieving ten percent growth per year for the GRENKE Group. Based on GRENKE Consolidated Group s net profit, we are well on our way after the first nine months to exceeding our forecast range of EUR 74 to 78 million that we provided in July For the current fiscal year, we now expect to reach net profit in the range of EUR 78 to 80 million.

18 GRENKELEASING AG Consolidated Group 17 Condensed Interim Consolidated Financial Statements Consolidated Income Statement 3-month report 9-month report Jul. 1, 2015 to Jul. 1, 2014 to Jan. 1, 2015 to Jan. 1, 2014 to EURk Sep. 30, 2015 Sep. 30, 2014 Sep. 30, 2015 Sep. 30, 2014 Interest and similar income from financing business 60,536 53, , ,211 Expenses from interest on refinancing and deposit business 11,519 13,369 36,534 40,968 Net interest income 49,017 40, , ,243 Settlement of claims and risk provision 14,957 14,250 43,817 39,060 Net interest income after settlement of claims and risk provision 34,060 26,352 96,623 76,183 Profit from insurance business 13,266 10,965 36,853 30,490 Profit from new business 12,484 11,778 37,300 34,959 Gains(+) / losses ( ) from disposals 13 1, ,779 Income from operating business 59,797 50, , ,411 Staff costs 15,909 13,707 46,340 40,253 Depreciation and impairment 1,733 1,521 5,680 4,453 Selling and administrative expenses (not including staff costs) 14,295 11,546 38,461 33,986 Other operating expenses 1, ,607 2,476 Other operating income 1,330 1,175 4,079 3,238 Operating result 28,180 23,769 80,722 65,481 Expenses / income from fair value measurement Other interest income Other interest expenses Earnings before taxes 28,242 23,805 80,805 65,483 Income taxes 7,034 6,656 21,116 17,152 Net profit 21,208 17,149 59,689 48,331 Of which, attributable to: non-controlling interests hybrid capital holders of GRENKELEASING AG shareholders of GRENKELEASING AG 20,872 17,149 59,353 48,335 Earnings per share (basic) in EUR Earnings per share (diluted) in EUR Average number of shares outstanding (basic) 14,754,199 14,754,199 14,754,199 14,747,052 Average number of shares outstanding (diluted) 14,754,199 14,754,199 14,754,199 14,747,052

19 GRENKELEASING AG Consolidated Group 18 Consolidated Statement of Comprehensive Income 3-month report 9-month report Jul. 1, 2015 to Jul. 1, 2014 to Jan. 1, 2015 to Jan. 1, 2014 to EURk Sep. 30, 2015 Sep. 30, 2014 Sep. 30, 2015 Sep. 30, 2014 Net profit 21,209 17,149 59,689 48,331 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) 2, ,420 1,222 Income taxes Change in currency translation differences (after taxes) 2, ,420 1,222 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 2, , Total comprehensive income 18,762 17,778 62,379 49,240 Of which, attributable to: non-controlling interests hybrid capital holders of GRENKELEASING AG shareholders of GRENKELEASING AG 18,426 17,778 62,043 49,244

20 GRENKELEASING AG Consolidated Group 19 Consolidated Statement of Financial Position EURk Sep. 30, 2015 Dec. 31, 2014 Assets Current assets Cash and cash equivalents 122,034 88,395 Financial instruments that are assets 1, Lease receivables 964, ,781 Other current financial assets 61,852 59,816 Trade receivables 4,497 4,793 Lease assets for sale 7,878 8,756 Tax assets 14,198 10,940 Other current assets 133, ,067 Total current assets 1,309,931 1,179,316 Non-current assets Lease receivables 1,749,503 1,579,317 Financial instruments that are assets Other non-current financial assets 46,425 30,714 Property, plant, and equipment 41,665 40,411 Goodwill 62,175 57,285 Other intangible assets 17,177 14,264 Deferred tax assets 19,355 21,869 Other non-current assets 1,145 1,433 Total non-current assets 1,937,463 1,745,634 Total assets 3,247,394 2,924,950

21 GRENKELEASING AG Consolidated Group 20 Consolidated Statement of Financial Position EURk Sep. 30, 2015 Dec. 31, 2014 Liabilities and equity Liabilities Current liabilities Financial liabilities 777, ,319 Liability financial instruments 2,551 3,506 Trade payables 15,631 9,821 Tax liabilities 9,671 7,043 Deferred liabilities 12,603 10,312 Current provisions 1,776 1,887 Other current liabilities 12,236 11,214 Deferred lease payments 71,941 26,872 Total current liabilities 904, ,974 Non-current liabilities Financial liabilities 1,721,360 1,531,880 Liability financial instruments 980 1,077 Deferred tax liabilities 47,524 45,692 Pensions 4,433 3,281 Non-current provisions 0 60 Total non-current liabilities 1,774,297 1,581,990 Equity Share capital 18,859 18,859 Capital reserves 116, ,491 Retained earnings 398, ,389 Other components of equity 4,937 2,247 Total equity attributable to shareholders of GRENKELEASING AG 538, ,986 Non-controlling interests 0 0 Additional equity components * 30,336 0 Total equity 568, ,986 Total liabilities and equity 3,247,394 2,924,950 * Including an additional AT 1 bond (hybrid capital), which represents an unsecured and subordinated bond of GRENKELEASING AG that is reported as equity under IFRS

22 GRENKELEASING AG Consolidated Group 21 Consolidated Statement of Cash Flows EURk Jan. 1, 2015 to Sep. 30, 2015 Jan. 1, 2014 to Sep. 30, 2014 Earnings before taxes 80,805 65,483 Non-cash items contained in earnings and reconciliation to cash flow from operating activities + Depreciation and impairment 5,680 4,453 / + Profit / loss from the disposal of property, plant, and equipment and intangible assets / + Net income from non-current financial assets / + Other non-cash effective income / expenses 3, / Increase / decrease in deferred liabilities, provisions, and pensions 3,269 2,645 Additions to lease receivables 985, ,375 + Payments by lessees 774, ,774 + Disposals / reclassifications of lease receivables at residual carrying amounts 138, ,492 Interest and similar income from leasing business 172, ,750 + / Decrease / increase in other receivables from lessees 2,515 1,745 + / Currency translation differences 16,266 10,444 = Change in lease receivables 257, ,048 + Addition to liabilities from refinancing 729, ,686 Payment of annuities to refinancers 575, ,378 Disposal of liabilities from refinancing 15,952 42,100 + Expenses from interest on refinancing and on deposit business 36,534 40,968 + / Currency translation differences 9,529 6,278 = Change in refinancing liabilities 183, ,454 + / Increase / decrease in liabilities from deposit business 14,413 40,051 / + Increase / decrease in loans to franchisees 7,688 4,548 Changes in other assets / liabilities / + Increase / decrease in other assets 15,014 20,047 + / Increase / decrease in deferred lease payments 45,069 28,669 + / Increase / decrease in other liabilities 5,605 4,824 = Cash flow from operating activities 60, continued on next page

23 GRENKELEASING AG Consolidated Group 22 Consolidated Statement of Cash Flows EURk Jan. 1, 2015 to Sep. 30, 2015 Jan. 1, 2014 to Sep. 30, 2014 / + Income taxes paid / received 17,998 6,492 Interest paid Interest received = Net cash flow from operating activities 42,835 7,130 Payments for the acquisition of property, plant, and equipment and intangible assets 4,065 4,570 / + Payments / proceeds from acquisition of subsidiaries 7,709 5,846 + Proceeds from the sale of property, plant, and equipment and intangible assets = Cash flow from investing activities 11,669 10,142 + / Borrowing / repayment of bank liabilities Proceeds from cash capital increase Proceeds from additional equity components (hybrid capital) 29,469 0 Dividend payments 16,230 10,644 = Cash flow from financing activities 13,088 10,840 Cash funds at beginning of period Cash in hand and bank balances 88, ,770 Bank liabilities from overdrafts 10, = Cash and cash equivalents at beginning of period 77, ,338 + / Change due to currency translation = Cash funds after currency translation 76, ,063 Cash funds at end of period Cash in hand and bank balances 122,034 83,085 Bank liabilities from overdrafts 1,219 2,134 = Cash and cash equivalents at end of period 120,815 80,951 Change in cash and cash equivalents during the period (= total cash flow) 44,254 28,112 Net cash flow from operating activities 42,835 7,130 + Cash flow from investing activities 11,669 10,142 + Cash flow from financing activities 13,088 10,840 = Total cash flow 44,254 28,112