Grenke reports new leasing business growth

Grenke AG, a global financing partner for small and medium-sized enterprises, has announced a record-breaking performance in the second quarter of 2024. The company’s new leasing business surged by 21.5% year-on-year, reaching €790.3 million, compared to €650.3 million in Q2 2023.

Contribution margin 2 (CM2), a key profitability metric, rose by 19.4% to €130.9 million from €109.7 million in the same period last year. The CM2 margin remained robust at 16.6%, aligning closely with the previous year’s 16.9%, and meeting the company’s target of slightly over 16.5%.

Dr. Sebastian Hirsch, CEO of Grenke AG, celebrated the milestone, stating, ““This outstanding quarter, with growth in excess of 20%, is a milestone on the path to achieving our ambitious annual target of over €3 billion in new business. While this is a very important achievement, we are not resting on our laurels but will instead continue to build on this record performance.”

Grenke processed approximately 167,000 lease applications in Q2 2024, up from 150,000 in Q2 2023, and concluded around 87,000 new lease contracts. The conversion rate remained stable at 51.9% and the average ticket size was €9,125, maintaining a trend of smaller, frequent transactions.

CFO Dr. Martin Paal emphasized the company’s strong financial health and future prospects: “After completing the first two quarters, we are right on target. Not only in terms of our new business but also our profitability. With a solid CM2 margin of 16.6 %, we have increased our absolute contribution margin by more than 19 % compared to the prior year. We expect to continue to see strong growth in the second half of the year and a steady margin. We have already laid the important foundation for this with our recent placement of a new €500 million benchmark bond at favourable terms.”

Green assets significantly contributed to Grenke’s leasing business, with 20.5% of new leasing contracts originating from this category, with assets including eBikes, water treatment systems, and solar systems.

The company’s international sales network expanded to over 37,000 resellers from 34,700 the previous year. The direct customer business as a share of the total leasing business remained essentially unchanged at 17.1 % (Q2 2023: 17.0 %).

Southern Europe was the standout region, with a 34.4% increase to €197.3 million, driven primarily by Italy, which saw a 47.8% rise. Western Europe (excluding DACH) achieved a 15.3% growth to €197.2 million, with France contributing significantly with a 19.3% share of Grenke’s total new leasing business.

The DACH region grew by 11.1% to €182.7 million compared with €164.5 million in Q2 2023. Northern/Eastern Europe reported a 25.3% increase to €164.6 million, with Denmark and Romania performing exceptionally well. Other regions, which include the future markets of USA, Canada, Australia, recorded a 32.5% growth to €48.5 million.

Grenke’s factoring business grew by 11.3%, achieving a new business volume of €228.7 million. Grenke Bank’s new lending business totalled € 9.0 million, with the deposit business increasing by 2.5% to €1,657 million as of June 30, 2024.