LEASING BANKING FACTORING INVESTOR RELATIONS

Transcription

1 LEASING BANKING FACTORING INVESTOR RELATIONS November 2018

2 GRENKE the highly focused fintech since 1978 HISTORY IN MILESTONES 1978 Founded by W. Grenke: Leasing business started 2000 IPO took place st credit rating, BBB Factoring business started 2009 Banking business started 2012 New business volume exceeds EUR 1 billion treshold 2016 Net profit exceeds EUR 100 million treshold FINANCIAL SERVICES FOR SMALL & MEDIUM SIZED COMPANIES MISSION Efficiently process high volumes of small contracts FACTS & FIGURES Over 750,000 running contracts Average acqusition value approximately EUR 8, % B2B customers 141 branches in 31 countries 2

3 GRENKE the highly focused fintech since 1978 MAXIMUM EFFICIENCY IN OPERATIONS Standardisation/Digitalisation along the entire value chain Unit cost minimization SOPHISTICATED RISK MANAGEMENT Diversified leasing and refinancing portfolio 40 Years of risk management experience Advanced IT-based loss forecasting model Risk assessments as precise as possible GRENKE IS FOCUSED ON GROWTH OUTSTANDING FINANCIAL STRENGTH 3 Strictly value based corporate management Ambitious targets for contribution margins and equity ratio (> 16%) Third party financial ratings (BBB+ by Standard & Poors) Equity ratio 19.2% (as of 30/09/18)

4 GRENKE results represent a continuation of solid performance New business 9M-2018 New business in EUR millions 1, , New business 9M-2018 IN PER CENT M M-2018 Leasing +23% 9M M-2018 Factoring +18% Leasing is still our core business 9M M-2018 SME lending business +46% 4

5 GRENKE results represent a continuation of solid performance Trend in consolidated net profit Net profit in EUR millions CAGR 15.9 % ,0 65, e before Future dividend distribution of approx % from after-tax profits IFRS9 Average payout ratio: 26.3% (since 2002) 2018e after IFRS9 5

6 GRENKE GROUP s Leasing New business 9M-2018 Strong new business development in our core markets 4 New business in EUR millions New business Leasing 9M-2018 DE FR IT IN PER CENT DACH Western Europe (without DACH) Southern Europe Northern/Eastern Europe Other Regions Core Markets: Germany, France, Italy 6 Regions: DACH: Germany, Austria, Switzerland; Western Europe (without DACH): Belgium, France, Luxembourg, the Netherlands Southern Europe: Croatia, Italy, Malta, Portugal, Slovenia, Spain Northern/Eastern Europe: Denmark, Finland, Ireland, Norway, Sweden, UK / Czech Republic, Hungary, Poland, Romania, Slovakia Other regions: Australia*, Brazil, Canada*, Chile*, Singapore*, Turkey, UAE

7 GRENKE s position in the market Numerous competitive advantages BANK-DEPENDENT INDEPENDENT MANUFACTURER-DEPENDENT DISADVANTAGE COMPETITIVE ADVANTAGES DISADVANTAGE Administrative burden Focus on big tickets High degree of automation Independent and flexible Tied to one product (brand) Dealers insist on independence Clear small-ticket focus No dealer partnerships Diversified Refinancing Dealer programme/ Partnership Access to point of sale through manufacturer s own sales channel ADVANTAGE COMPETITIVE ADVANTAGES ADVANTAGES DE: FR: IT: UK: ES+PT: ABC, Mercator, BFL, MMV, BNP, Deutsche Leasing BNP Leasing Solutions, Credit Agricole L., Crédit Mutuel Arkea BNP; DLL; GE-Banca IFIS BNP Lease, Delage L, Soc Gen. BNP Lease, Delage L DE: FR: UK: ES: PT: Targoleasing, CHG Meridian CHG Meridian, Factum, NBB CIT, Siemens FE CSI, Rent-and-Tech, CHG CANDOR EU: Cisco Finance, Dell Financial Service, Xerox Leasing, HP Financial Service, IBM, Siemens Financial Services COMPETITORS 7

8 GRENKE Bank strengthens our refinancing base Target Group Small and medium-sized enterprises Leasing and factoring customers of the Group (Cross-Selling) Retail customers Objectives Sustainable development of deposits and SME lending business Presence in further European Countries in order to be able to conduct leasing and factoring operations in EUR millions M M-2018 Deposits 625 SME lending business (New business) Products SME loans with risk coverage: KfW, L-Bank, German Government (micro-credit programme) Term deposit, current account and credit card (SME s and retail customers) Global loans of development banks lead to attractive leasing conditions Services GRENKE Banking App: Manage your bank accounts and credit cards, f.e. bank transfers GRENKE CASH App: Barcode that allows cash to be paid into the account at cashier s desk (also payout) Spalte3 Spalte1 Spalte2 Competitive benefits The use of IT solutions for improved, efficient workflow generates cost benefits (cost-income ratio) Favorably priced transaction costs to boost profitability Access to European payment transaction system: effective cash management 8

9 GRENKE Factoring We offer SME s another key pillar of corporate financing Target group SME s in B2B From annual turnover of EUR 250k to EUR 5,000k Largely independent of individual sectors Factoring Users GER: 264; INT: 345 Corporate benefits Flexible financing of invoices Fast payment within 24 hours Personal communication and support IT based: Highly automated processing i.e. simple submission of claims; transparency through online tool FACTORING VOLUME AMOUNT OF PURCHASED RECEIVABLES in EUR millions Market Period M M-2018 DE International: CH, HU*, IT*, IE*, PL*, UK* Financing solid and attractive DE Int. 9M M Profit Margin Days** 1.66% % 40 ** Average period of a factoring transaction in approx. days * Franchise 9

10 Broadly diversified portfolio in Leasing new business Leasing New Business Portfolio 4.3 Security Devices/Others 8.4 Medical Technology IT Products Machines/Systems 9M-2018 IN PER CENT IT equipment (incl. notebooks) Photocopying equipment Telecommunications General Office technology 10

11 We have continued to diversify our funding mix Senior Unsecured Debt issuance programme Stand alone bonds Promissory notes (Schuldschein) Revolving credit facilities Money market lines Commercial paper programme Overdraft facilities Asset Based Loans Asset-backed commercial paper programme Global loans GRENKE Bank Deposit business Term deposits Approx. 2,637 EURm Approx. 822 EURm Approx. 1,174 EURm 57 % 18 % 25 % Status: October,

12 GRENKE Group uses matched funding Treasury is strongly focused on financing the core business S&P RATING: BBB+/STABLE/A-2/AND GBB RATING: (GESELLSCHAFT FÜR BONITÄTSBEURTEILUNG MBH) A/STABLE Medium term notes (MTN) Promissory notes (Schuldscheindarlehen) Term deposits GRENKE Bank Global loans MATURITY STRUCTURE AS PER OCTOBER 2018 in EUR millions 5, , , (1,000.00) (3,000.00) (5,000.00) Assets Cash Debts * Present value of operating income of a lease contract less risk and individual contract costs ** New calculation of CM2 margin 12

13 Solid contribution margins with continuous growth CM1 CM1 is calculated as the present value of the interest margin net of commissions paid to third parties in EUR millions CM2 CM2 is made up of the present value of operating income of a lease contract less risk and individual contract costs in EUR millions 2,000 25% % 1,800 1,600 1,400 20% % 1,200 15% 15% 1, % 10% % 100 5% % 0 0% New Business Leasing CM1 Margin CM2 CM2 Margin * New calculation of CM2 13

14 Result for the period (income statement) CM2 CALCULATION OF NEW BUSINESS IN 3M-2018 (TOTAL LIFETIME) INCOME STATEMENT OF 9M-2018 in EUR millions Net interest income Profit from new business Settlement of claims and risk provision Profit from service business Gains/losses from disposals Income from operating business Staff costs Selling and administrative expenses Other expenses Operating result 14

15 GRENKE s experience enables it to calculate and forecast credit losses more precisely RISK PROVISION P.A. 400% 350% 300% 250% 200% 150% 100% 50% LOSS EXPECTATIONS 48 MONTHS CONTRACT TERM 8% 7% 6% 5% 4% 3% 2% 1% 0% Settlement of claims and risk provision (2009 = 100%) Volume of leased assets (2009 = 100%) 0% Calculated loss expectations at contract start Calculated actual loss expectations per end of period 15

16 Proximity to customers is key Baltics Australia 69 Locations in core markets 141 International locations 31 Countries > 19,500 reseller in core markets > 34,000 reseller international 16

17 Outlook 2018 KEY FINANCIAL AND STRATEGIC PERFORMANCE INDICATORS New Business expectations Expansion/Product diversification GRENKE Group Leasing: 18 22% (adjusted; previous 16 20%) GRENKE Group Factoring: 15-20% Leasing: Cell divisions in our core markets France, Germany, Italy as well as in Spain, United Kingdom and Canada Leasing: New market entry: The Baltics and New Zealand Factoring: New market entry: Portugal Balance sheet We aim for an equity ratio of 16% Profitability Stability of business model will lead to net profit of: EUR 126m 132m (narrowed; previous EUR 123m 131m) We aim to achieve a sustainable cost/income ratio under 60% 17

18 Reasons for choosing GRENKE STABLE RATING BBB+/stable/A-2 rating since 2003 STRONG GROWTH Increase in net profits +23.6% (Q3/18 vs. Q3/17) New business volume +21.0% (Q3/18 vs. Q3/17) Investment Considerations LOW ASSET RISKS No open residual values (fullamortization requirement) SOUND EQUITY BASE Equity ratio 19.2% (as of 30/09/2018) LOW CYCLICITY Stable business model (small ticket IT leasing) Low loss rate even during the latest recession (<2%) 18

19 APPENDIX

20 9M-2018 results compared to 9M-2017 KEY RESULTS 9M M-2017* DIFFERENCE Net Interest income EUR 209.0m EUR 182.2m % Operating result EUR 117.1m EUR 104.9m % Net profit EUR 97.9m EUR 79.3m % Earnings per share (IFRS) EUR 2.06 EUR % Cost/Income ratio 56.3% 54.6% 3.1% Equity ratio 19.2% 16.6% % *Previous year s figures adjusted in accordance with IRFS 9 20

21 Equity ratio different ways of requirements Basis: solid balance sheet EQUITY RATIO & ROE & TOTAL CAPITAL RATIO EQUITY RATIO WITHIN TARGETS 16.8% 16.9% 17.0% 17.4% 17.7% 15.0% 14.6% 13.7% 13.2% 10.7% 17.68% 16.0% 22.68% 15.65% 10.5% Equity Ratio (Balance Sheet) ROE after Tax Total Capital Ratio according to CRR as a % of total assets (risk-weighted assets) as per Dec. 31, 2017 Balance sheet equity Regulatory capital Economic capital (embedded value) 21

22 Our partners IT IT, UK HU, ES, IT IT ES, PT, SK 22

23 Shareholder structure and Analyst overview TOTAL SHARES: 46,353,918 Grenke Foundation 3.0 Grenke Beteiligung GmbH & Co. KG* 40.8 ANALYST EXPECTATIONS AVERAGE E (IFRS9) EPS in EUR Profit in EURm (130.9) Freefloat 55.5 Shareholder structure As per June 2018 IN PER CENT EBT in EURm (165.6) Price/Earnings-Ratio Share price in EUR Management** 0.7 * General Partner: Grenke Vermögensverwaltung GmbH; Limited Partner: Family Grenke (Wolfgang, Anneliese, Moritz, Roland, Oliver Grenke) ** Management: Supervisory Board and Board of Directors Neutral Buy 23 Buy: Buy, add, overweight Neutral: Neutral, Hold Sell: Sell, underweight

24 Disclaimer This presentation contains forward-looking statements. Forward-looking statements are statements that are neither facts nor a description of past events; they comprise statements relating to our assumptions and expectations. Each statement made in this presentation that reflects our intentions, assumptions, expectations or forecasts as well as the underlying presumptions is a forward-looking statement. These statements are based on planning figures, estimates and forecasts currently available to the Board of Directors of GRENKE AG. Accordingly, forward-looking statements refer exclusively to planning data, estimates and forecasts at the time at which they are made. We assume no responsibility to further develop or modify such statements in the event of fresh information being available or future events occurring. By their very nature, forward-looking statements imply risks and uncertainty factors. A large number of key factors can contribute towards actual events varying quite substantially from forward-looking statements. Such factors include the condition of the financial markets and the regional focal points of our investment activities. 24

25 Notes 25 Leasing Banking Factoring Investor Relations

26 Notes 26 Leasing Banking Factoring Investor Relations

27 Notes 27 Leasing Banking Factoring Investor Relations