LEASING BANKING FACTORING - grenke.de · 31.12.2017 31.12.2018 31.12.2019 31.12.2020 31.12.2021. ... 2008 2009 2010 2011 2012* 2013 2014 2015* 2016 2017* CM2 CM2 Margin 15 ... Factoring:
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February, 8th 2018
LEASING – BANKING – FACTORING ANNUAL PRESS CONFERENCE - FRANKFURT
GRENKE results represent a continuation of solid performance
New business 2017
in EUR millions
LEASING FACTORING
SME lending business
BANKING
356.2
442.8
2016 2017
1,592.5
1,975.7
2016 2017
25.3
30.7
2016 2017
+24.1% +21.2%
Leasing – Banking – Factoring | Investor Relations 2
+24.3%
Principal markets
GRENKE GROUP’S NEW BUSINESS* NEW BUSINESS GRENKE LEASING*
* As of December 31, 2017; based on new business volume
Leasing – Banking – Factoring | Investor Relations 3
Business start-up financing
GRENKE Bank (incl. microcredit
business) 1.2%
New Business GRENKE Group
Leasing** 80.7%
New Business GRENKE Group
Factoring 18.1 %
DACH 24.8%
Northern/ Eastern Europe; 16.1%
Western Europe (without DACH);
25.6%
Southern Europe; 31.0%
Other regions; 2.5%
Leasing: Strong new business development
in our core markets Germany, France and Italy
in EUR millions
LEASING GROUP’S NEW BUSINESS IN 2017
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
489.8 506.1
613.4
318.4
48.0
DACH Western Europe
(without DACH)
Southern
Europe
North/East
Europe
Other
regions
France Italy
Leasing – Banking – Factoring | Investor Relations 4
Germany
2017 results compared to 2016
KEY RESULTS 2017 2016 DIFFERENCE
Net Interest income EUR 246.6m EUR 217.8m + 13.2%
Operating result EUR 161.3m EUR 136.5m + 18.2%
Net profit EUR 125.0m
Guidance: EUR 118 – 124m
(adjusted)
EUR 103.2m
Guidance: EUR 98 – 102m
(adjusted)
+ 21.1%
Cost/Income ratio 52.4% 51.2% +2.3%
Equity ratio 17.7% 17.4% +1.7%
Loss rate 1.0% 1.2% - 16.7%
Leasing – Banking – Factoring | Investor Relations 5
GRENKE Consolidated Group:
Trend in consolidated net profit
in EUR millions
CAGR 2012 – 2017: 24.1% (2001 – 2017: 15.8%)
Concluded contracts on hand
provide high degree of certainty
in revenue forecast
Planned for the future: Dividend
distribution of approximately
20 – 30% from after-tax profits
Average payout ratio:
26.3% (since 2002) 42.5 47.0
64.0
80.8
103.2
2012 2013 2014 2015 2016 2017
125.0
Leasing – Banking – Factoring | Investor Relations 6
Leasing business model: Benefits
CUSTOMERS (SMES*)
INNOVATIVE DISTRIBUTION CON-
CEPT/DECENTRALIZED SALES
OPTIMUM RISK
MANAGEMENT
EFFICIENT CONTRACT
PROCESSING
RESELLER PARTNERS
MULTIPLE
ADVANTAGES
Presence at all relevant point
of sale through
Large reseller network
Direct sales
Key account-channel
No residual or warranty risks
Low default ratios through IT-based
model for forecasting losses/
expected loss
High diversification of contracts
Automated and cost-efficient leasing
logistics for “small-ticket” leasing
Online contract processing
Favorable refinancing terms
from capital markets
Sales support – low rates accelerate
investment decisions & easy handling
Strengthens customer loyalty
Direct and individual support
Increased sales (easier up-
and cross-selling)
Secured long-term planning through
constant rates & transparency
Flexibility through exchange option
Easy investment decisions
– fast & simple processing
No effort with the disposal of the equip-
ment (Asset-broker realization platform)
* Small and Medium-sized Enterprises
Leasing – Banking – Factoring | Investor Relations 7
Our strategy for sustainable growth is based on two aspects:
CONTINUITY and CHANGE
Leasing – Banking – Factoring | Investor Relations 8
CONTINUITY CHANGE
KEY VALUES
BUSINESS FOCUS
DIFFERENTIATION
Simple
Fast
Personal
Financial solutions for SME
Direct and indirect business on global scale
Efficient management of value levers
We standardize if possible
We measure to manage
We keep entrepreneurial spirit while growing
PRODUCTS AND SERVICES
MARKETS AND CHANNELS
VALUE CHAIN
Consolidate and expand product offerings
Further rollout digital products and services
Combine online and personal service
Extend regional presence*
Bundling approach of leasing, factoring, bank
Better exploit customer by next level CRM
Further digitize sales and admin processing
Provide new digital workplace to employees
Rollout professional HR management
* Plan for 2018: +2 countries (Baltics, New Zealand) to a total of 33; + 17 branches to a total of 153
Expansion
Australia
9
31 German locations
101 International locations
31 Countries
> 6,500 IT dealers in Germany
> 25,000 IT dealers international
Leasing – Banking – Factoring | Investor Relations
Baltics
Perspectives and needs for further growth
10 Leasing – Banking – Factoring | Investor Relations
EQUITY AND
FUNDING
Risk measurement
and CM calculation
EXISTING BUSINESS
NEW PRODUCTS
NEW MARKETS
Focus on competitive
advantages
Cover market opportunities
Cover innovation and trends
Established markets
Franchise
Legal frame and stability
Structure of SME
Equity ratio – different ways of requirements
Basis: solid balance sheet
EQUITY RATIO WITHIN TARGETS
Leasing – Banking – Factoring | Investor Relations 11
EQUITY RATIO & ROE & TOTAL CAPITAL RATIO
16.8% 16.9% 17.0% 17.4% 17.7%
10.7%
13.2% 13.7%
15.0% 14.6%
2013 2014 2015 2016 2017
Equity Ratio (Balance Sheet)
Total Capital Ratio according to CRR ROE after Tax
17.68%
22.68%
15.65%
Economic capital (embedded value)
Balance sheet equity Regulatory capital
16.0%
10.5%
as a % of total assets (risk-weighted assets) as per Dec. 31, 2017
12
Finance
Funding Mix
Debt issuance program
Promissory notes (Schuldschein)
Revolving credit facility
Money market line
Commercial paper program
Overdraft facility
Loans
Asset-backed commercial paper
program
Global loan
Deposit business
Term deposits
Senior Unsecured Asset Based
GRENKE Bank
Approx.
2,275 EURm Approx.
748 EURm Approx.
687 EURm
61 % 20 % 19 % Status: January 29, 2018
Leasing – Banking – Factoring | Investor Relations
in EUR millions until maturity in 2022
Maturity Structure: GRENKE Group uses matched funding
Treasury is strongly focused on financing the core business
MATCH-FUNDED MATURITY STRUCTURE OF PORTFOLIO
Existing portfolio
No maturity transformation
No interest rate risk
No extra liquidity requirement
– positive cumulative cash flow
Assets Cash Debts
Leasing – Banking – Factoring | Investor Relations 13
(4.000,00)
(2.000,00)
-
2.000,00
4.000,00
31.12.2017 31.12.2018 31.12.2019 31.12.2020 31.12.2021
GRENKE’s experience enables it to calculate and forecast credit
losses more precisely
LOSS EXPECTATIONS
* Losses p.a. (of historical asset values, factored in) ** Present value of operating income of a lease contract less risk and individual contract costs
*** New calculation of CM2 margin
0%
5%
10%
15%
20%
25%
30%
0%
1%
2%
3%
4%
5%
6%
7%
8%
2012*** 2013 2014 2015*** 2016 2017***
Calculated loss expectations at contract start
CM2** Calculated actual loss expectations per end of period
Leasing – Banking – Factoring | Investor Relations 14
LOSS RATE* (LEFT COLUMN)
0%
100%
200%
300%
400%
0%
1%
2%
3%
2009 2010 2011 2012 2013 2014 2015 2016 2017
Settlement of claims and risk provision (2009 = 100%)
Loss rate (left column) Volume of leased assets (2009 = 100%)
CM2 is made up of the present value of operating income
of a lease contract less risk and individual contract costs
in EUR millions
CM1 is calculated as the present value of the interest
margin net of commissions paid to third parties
in EUR millions
CM2 CM1
GRENKE Group Leasing:
Trend in new business and contribution margins
* New calculation of CM2/CM2-margin
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
New Business Leasing CM1 Margin
0%
5%
10%
15%
20%
25%
30%
0
100
200
300
400
2008 2009 2010 2011 2012* 2013 2014 2015* 2016 2017*
CM2 CM2 Margin
Leasing – Banking – Factoring | Investor Relations 15
GRENKE Group Leasing:
CM2 operative - easier and more transparent
Leasing – Banking – Factoring | Investor Relations
16
CM1 Forecast
Subsequent
business
Forecast
Losses
Forecast
Insurance
CM2
Net interest
income
Settlement of
claims / risk
provision
Profit from
service
business
Gains /
losses from
disposals
Profit from
new
business
Operating
income
Staff costs Selling and
admin.
Expenses
Depreciation
and
impairment
Operating
result
Outlook 2018
Leasing – Banking – Factoring | Investor Relations 17
KEY FINANCIAL AND STRATEGIC PERFORMANCE INDICATORS
New Business
expectations
GRENKE Group Leasing: 16 - 20%
GRENKE Group Factoring: 15 - 20%
Expansion/Product
diversification
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 123m – 131m EUR (after new IFRS 9)
We aim to achieve a sustainable cost/income ratio under 55%
THANK YOU FOR YOUR KIND
ATTENTION!
Renate Hauss
Head of Investor Relations
Phone: +49 7221 5007-204
Fax: +49 7221 5007-4218
E-mail: rhauss@grenke.de
Internet: www.grenkefactoring.de
www.asset-broker.de
www.grenkebank.de
GRENKE AG
Neuer Markt 2
76532 Baden-Baden
Germany
Reports are available at:
www.grenke.de/FinancialReports
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.
This document is not for publication or distribution, directly or indirectly, in or into the United States. This document does not constitute or form part of an offer of securities or
subscription rights for sale or solicitation of an offer to purchase securities or subscription rights in the United States, Canada, Australia, Japan or in any other jurisdiction where
such offer may be restricted. The securities and subscription rights referred to in this document have not been, and will not be, registered under the US Securities Act of 1933, as
amended (the “Securities Act”), and may not be offered or sold in the United States or to or for the account or benefit of US persons (as such term is defined in Regulation S
under the Securities Act), except on the basis of an applicable exemption from registration or in a transaction not subject to the registration requirements of the Securities Act.
There will be no public offering of securities and subscription rights in the United States or anywhere else, except for Germany.
Leasing – Banking – Factoring | Investor Relations 19
www.grenke-group.com
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