Grenke (GLJ) Q3 2024 earnings summary

Executive summary

• Group earnings for Q1–Q3 2024 were EUR 57.0m, down 11.5% year-over-year, with Q3 earnings at EUR 12.0m, impacted by higher risk provisions and a EUR 4.4m goodwill impairment in Spain.

• Full-year 2024 earnings guidance was revised downward to EUR 68–76m (from EUR 95–115m) due to increased insolvencies in core markets and lower recovery rates.

• Leasing new business grew 24.9% year-over-year in Q3 2024 to EUR 738.5m, with a CAGR of 14% and volumes on track to exceed EUR 3bn for the year.

• Share buyback program completed, repurchasing about 5% of shares for EUR 55.4m–55.6m.

• Factoring business, now held for sale, grew 11.2% in Q3 2024 but remains a minor balance sheet item.

Financial highlights

• Loss rate rose to 1.3% for Q1–Q3 2024 and 1.5% in Q3, reflecting higher insolvencies and macroeconomic challenges.

• Cost-income ratio reached 58.4% for Q1–Q3 2024, with Q3 at 60.8% (excluding goodwill impairment: 57.8%).

• Equity ratio stood at 16.1% after the bond issuance and share buyback.

• Cash flow from operating activities for the first nine months was EUR 657.5m–658m, with cash and equivalents at EUR 1.2–1.24bn as of September 2024.

• Net interest income and profit from new/service business increased year-over-year, but higher risk provisions and claims settlements weighed on results.

Outlook and guidance

• 2024 group earnings guidance revised to EUR 68–76m; leasing new business expected at EUR 3.0–3.2bn for 2024.

• Cost-income ratio targeted around 58% for 2024, with a long-term goal below 55%.

• Loss rate guidance for 2024 remains below 1.5%; risk provisioning expected to remain elevated.

• Factoring business divestment expected within 12 months; no significant short-term KPI impact anticipated.