In This Article:
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Group Earnings: EUR 57 million for the first 9 months of 2024, a decline of 11.5%.
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Loss Rate: 1.3%, within historical average but higher than initially expected.
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Equity Ratio: 16.1% due to the EUR 500 million bond issuance.
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Cost-Income Ratio: 58.4% for the first 9 months, aiming to maintain around 58% for the fiscal year.
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Lease Receivables: Over EUR 6 billion, reaching new historic highs.
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Non-Performing Receivables: Increased to EUR 521 million.
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Goodwill Write-Off: EUR 4.4 million for the Spanish subsidiary.
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Cash Flow from Operating Activities: Approximately EUR 658 million for the first 9 months.
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Cash and Cash Equivalents: EUR 1.2 billion as of the end of September 2024.
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Benchmark Bond Issuance: EUR 500 million in September, impacting funding mix.
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Grenke AG (GKSGF) achieved a historic high in lease receivables, surpassing EUR 6 billion.
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The company successfully issued a EUR 500 million benchmark bond, strengthening its funding base.
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Grenke AG (GKSGF) completed a share buyback program, now owning approximately 5% of its own shares.
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The company maintained a strong CM2 margin despite economic challenges, indicating effective cost management.
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Grenke AG (GKSGF) is on track to achieve its target of over EUR 3 billion in new business for the year.
Negative Points
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Grenke AG (GKSGF) had to lower its earnings guidance significantly due to unexpected insolvencies in key markets.
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The company's loss rate increased to 1.5%, which is higher than initially planned for 2024.
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There was a EUR 4.4 million goodwill write-off for the Spanish subsidiary, impacting financial results.
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The equity ratio dropped to 16.1% due to the issuance of a benchmark bond, with expectations to stabilize around this level.
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The company faced challenges in risk provisioning, with an increase in non-performing receivables to EUR 521 million.
Q & A Highlights
Q: Can you specify the magnitude of higher risk costs in Spain, France, and Germany, and will you adjust your risk model due to unexpected defaults? A: Sebastian Hirsch, CEO: The increase in Stage 3 leasing receivables was significant in France, from EUR 112 million last year to EUR 150 million this year. Germany saw an increase from EUR 30 million to EUR 36 million, and Spain had a EUR 10 million increase. We are adjusting parameters in our risk model, focusing on probability of default and loss given default, to better anticipate such impacts.