Grenke (GLJ) Q3 2024 TU earnings summary

Executive summary

• 2024 earnings guidance cut to €68M–€76M from €95M–€115M as rising SME insolvencies drove higher claims and risk provisioning.

• New business remained on target; 2024 guidance stayed at €3.0B–€3.2B for volume, with contribution margin also on target.

• Management retained a long-term 1.5% loss-rate target, reached sooner than planned.

Financial highlights

• Net interest income rose 5.8% to €269.3M in 9M 2024; Q3 NII increased 7.4% to €92.8M.

• Earnings fell 11.5% to €57.0M in 9M and 50.0% to €12.0M in Q3.

• 9M operating income totaled €332M after higher-than-planned risk provisioning; operating income before risk provisioning rose 9% YoY.

• Q3 claims settlement and risk provisioning rose 54.4% to €37.8M; 9M risk provisioning reached €93M, above full-year 2023.

• Q3 service-business profit grew 8.4% to €37.5M and new-business profit rose 26.7% to €13.5M.

Outlook and guidance

• Average loss rate for 2024 expected below 1.5%; management expects a 1.5% rate in 2025, near the Q4 risk level, and will use it for planning.

• Leased volume expected to reach €10B–€11B toward 2025; NII margin was ~6% and expected to remain stable or increase slightly over coming years.

• Q4 disposals expected to show a small single-digit negative result, described as a normal seasonal fluctuation.