Grenke (GLJ) Q4 2024 earnings summary

Executive summary

• 2024 saw record leasing new business exceeding EUR 3 billion, with margin expansion, but profitability was impacted by a sharp rise in insolvencies and macroeconomic headwinds, resulting in group earnings of EUR 70.2 million, within guidance.

• The company is transitioning to a pure-play leasing business, divesting its factoring segment, and reorganizing by regional leasing segments for better market insight.

• Strategic focus is on digitalization, operating income, cost management, and risk management to drive efficiency, scalability, and future profitability.

• International growth is supported by strategic partnerships, notably with Intesa Sanpaolo in Italy.

Financial highlights

• Leasing new business reached EUR 3.1 billion, up 14% year-over-year, with a CM2 margin of 17.0%, outperforming the European leasing market.

• Operating income rose by over EUR 53 million to EUR 576 million, driven by net interest income and profit from new and service business.

• Group earnings were EUR 70.2 million, within the adjusted guidance corridor but impacted by higher insolvencies.

• Cost-income ratio was 59.2%, slightly above target due to inflation, staff, and interest costs.

• Loss rate increased to 1.3% (2023: 1.0%) due to a rise in defaults and insolvencies.

Outlook and guidance

• 2025 guidance: leasing new business EUR 3.2–3.4 billion, group earnings EUR 71–81 million, CM2 margin above 16.5%, CIR below 60%, and loss rate around 1.6%.

• Double-digit growth in new business targeted long-term, with a focus on maintaining a strong contribution margin.

• Equity ratio expected to remain around 16% in 2025; no equity issuance planned.