Equipment Finance News

GRENKE increases new leasing business CM2 margin in Q2 2023


GRENKE AG, a global financing partner for small and medium-sized enterprises (SMEs), has continued its growth trajectory in the second quarter of the current year.

€650.3 million of new leasing business was generated in the quarter which was 10.7% higher year-on-year (Q2 2022: €587.4 million), making Q2 2023 the seventh consecutive quarter with double-digit year-on-year growth.

The growth in new business was outpaced by a stronger rise in contribution margin 2. With an increase of 17.7%, the rise in CM2 was nearly twice as high in the second quarter of this year, reaching €109.7 million (Q2 2022: €93.2 million). As a result, GRENKE was able to substantially increase its CM2 margin to 16.9% both year-on-year (Q2 2022: 15.9%) and versus the prior quarter (Q1 2023: 16.7%).

Dr Sebastian Hirsch (pictured), CEO of GRENKE AG commented, “We continue to be on target in terms of growth. More importantly, however, we were able to significantly increase our CM2 margin. These are excellent results given the persistently challenging environment and particularly the volatility of interest rates and growing recessionary concerns in the markets.”

Regional new leasing business on track

The growth during the reporting period was possible as a result of the expansion in the reseller network to over 34,000 resellers in more than 30 countries in which GRENKE operates.

At 22.5%, Northern and Eastern Europe again recorded the strongest year-on-year growth (Q2 2022: €107.2 million). New leasing business in the UK and Finland, the largest countries in the region, increased by 39.2% and 31.3%, respectively.

This was followed by the DACH region with growth of 17.5% (Q2 2022: €139.9 million). The Western Europe region without DACH recorded growth of 14.3% in the reporting period (Q2 2022: €149.6 million). The region’s strongest growth was recorded in the Netherlands (+33.6%) and Belgium (+22.1%).

New leasing business in France increased year-on-year by 11.1%. Although the Southern Europe region recorded lower new leasing business (-7.0%) compared to the prior-year quarter (Q2 2022: €157.9 million), it was able to increase the CM2 year-on-year due to the focus on higher-margin business. Other regions in the second quarter of 2023 achieved an increase of 11.9% (Q2 2022: €32.7 million).

Demand for eBike leasing remains good. eBike leasing is offered in Germany, Austria, Belgium and Finland. In Q2 2023, approximately 15,000 contracts were concluded for eBikes, representing an increase of around 50% (Q2 2022: approximately 10,000 contracts).

Steady demand

At around 150,000 lease applications, the interest in leasing offers was high in the second quarter of the current year and exceeded the same quarter of the prior year (Q2 2022: approx. 140,000 applications).

This resulted in the conclusion of approximately 78,000 contracts and was in line with GRENKE’s customary conversion rate of 52.6% (Q2 2022: 52.2%). The average ticket size was stable at approximately €8,300 (Q2 2022: approx. €8,100). The share of direct sales remained almost unchanged at 17.0% (Q2 2022: 18.3%).

Factoring segment up slightly

The factoring business achieved growth of 7.3% in the second quarter, corresponding to new business volume of €205.4 million (Q2 2022: €191.5 million).

GRENKE Bank’s new microcredit business in the second quarter of 2023 was €11.0 million and slightly below the previous year’s figure (Q2 2022: €13.6 million). GRENKE Bank continues to be an important pillar of the Consolidated Group’s refinancing.

The deposit business equalled €1,537 million as of June 30, 2023, representing an increase of 33.5% compared to year-end 2022 (as of December 31, 2022: €1,151 million).