The Grenke Group, a provider of financing for small and medium-sized enterprises, generated new leasing business of €1,657.8m during the 2021 financial year, which was marked by the Covid-19 pandemic and global supply bottlenecks in the second half-year.
This figure represents 81.7% of the previous year’s level (FY 2020: €2,027.9m) and is at the upper end of the €1.5 to €1.7bn forecast for new business adjusted in November.
In the fourth quarter of 2021, new leasing business was €521.2m, or 22.1% higher than in the same quarter last year. New leasing business corresponds to the total acquisition costs of all newly purchased leased assets.
Michael Bücker, CEO of Grenke AG: “Our finish in the last quarter of the year was successful because our measures to boost sales have taken effect. The positive trend, especially in the final weeks of December, also clearly indicates a returning willingness to invest by European SMEs. We are entering the New Year at full speed ahead.”
An increase in new leasing business was achieved in all regions in the fourth quarter compared to the same quarter of the prior year. The region Western Europe without DACH achieved the strongest growth with 44.5%, followed by Northern/Eastern Europe with an increase of 35.6%, and Southern Europe with a rise of 18.9%. Other regions generated a year-on-year increase in new leasing business of 17.0%. The DACH region registered a slight improvement in new leasing business of 1.1% in the fourth quarter of 2021 compared to the same period of the previous year.
A leasing business contribution margin 2 (CM2) amounted to €85.1m in the fourth quarter of 2021 (Q4 2020: €83.3m, +2.1%). The CM2 margin decreased to 16.3% (Q4 2020: 19.5%) after the extraordinarily profitable fourth quarter of 2020.
Contribution margin 1 (CM1) reached €55.4m in the fourth quarter of 2021 (Q4 2020: €56m), recording a decline of 1.2%. The CM1 margin decreased to 10.6% (Q4 2020: 13.1%).
The primary reason for the CM margin development was higher refinancing costs and a clear focus on generating new business with a return to higher contract values. The mean acquisition value per lease contract equalled €8,677 (Q4 2020: €7,595).
Dr Sebastian Hirsch, CFO of Grenke AG: “We are excellently positioned. Our liquidity and refinancing options form a strong foundation for our sales activities. Even though our funding costs continue to currently be above pre-Covid levels and we continue to be in a complex market environment, we are satisfied with our contribution margin for full-year 2021. In 2022, we will utilise our available refinancing and tap into new sources of financing to ensure that the growth of our new leasing business is secured by liquidity based on matched maturities for the long term.”
The decline in contribution margins (CM2) in the fourth quarter of 2021 resulted primarily from the DACH, Southern Europe and other regions. The DACH region recorded a decrease in the contribution margin of 12.4%, Southern Europe of 4.3% and other regions of 7.8%. The regions Western Europe without DACH and Northern/Eastern Europe showed favourable performance, achieving an increase in contribution margin 2 of 15.6% and 16.0%, respectively.
The Grenke Group received a total of 119.825 lease applications in the fourth quarter of 2021. Of these, 19,074 applications originated from the DACH region and 100,751 applications from international regions. At the Consolidated Group level, 60,064 new lease contracts were concluded from these applications, corresponding to a conversion rate of 50%.
Grenke Group Factoring’s new business recorded a purchased receivables volume of €191.8m in the fourth quarter, amounting to a year-on-year increase of 6.5% (Q4 2020: €180m). New factoring business for the full year of 2021 amounted to €700.9m, representing a year-on-year increase of 8.2% (2020: €647.8m).