Grenke (GLJ) Q2 2024 earnings summary

Executive summary

• H1 2024 group earnings were EUR 45.0m, up 11.3% year over year; lease receivables exceeded EUR 6bn for the first time.

• Record Q2 leasing new business of EUR 790.3m supported H1 growth; 2024 guidance remained on track.

• A Chicago subsidiary opened, ESG ratings improved, and the factoring sale process advanced.

Financial highlights

• Q2 group earnings were EUR 25.2m; H1 group earnings were EUR 45.0m.

• H1 net interest income rose EUR 8.5m to EUR 176m; profits from new and service business increased EUR 13m to EUR 102m.

• Q2 net interest income rose 7.6% to EUR 90.4m; refinancing expenses increased 68.8% to EUR 49.9m.

• H1 operating result increased nearly EUR 6m to EUR 58.3m; costs reached EUR 159m and settlements of claims and risk provisions EUR 55m.

• Total assets were EUR 7.3bn at June 30, 2024; operating cash flow was EUR -63.3m in H1, mainly reflecting investment in new lease receivables.

Outlook and guidance

• 2024 guidance: leasing new business EUR 3.0–3.2bn, group earnings EUR 95–115m, cost-income ratio below 58%, loss rate below 1.5%, and equity ratio above 16%.

• Mid-term targets include ~12% annual leasing new business growth, cost-income ratio below 55%, and CM2 margin of 17%.

• CM2 margin expected to slightly exceed 2023’s 16.5%; July new business was in line with plan.

• Staff costs are planned to grow at a double-digit rate in 2024, slowing to below 10% next year; digitalization benefits are expected from early 2025.

• Q3 leasing volumes are seasonally lower and Q4 typically strongest; another 2024 bond issue was contemplated subject to market conditions.