GRENKE, the leading provider of leasing solutions, reported a slight decrease in new business last year compared to the previous forecast. The company from Baden-Baden announced on Thursday that leasing new business had increased by 12.3 percent to 2.58 billion euros.
CEO Sebastian Hirsch recently mentioned the lower half of the announced forecast range of 2.6 to 2.8 billion euros. Despite barely meeting the forecast, Hirsch described the year as successful. "In the new year, we aim for further growth in new business, as before," he added.
The company's stock has somewhat recovered in recent months after a prolonged downward trend. After a price drop at the beginning of 2023 to below 20 euros, it rose to over 32 euros by early May, but fell back below 20 euros by the end of October. In December, it was able to maintain itself above 25 euros. On Thursday, the stock listed on the SDAX was trading just below this level and recorded a loss of 0.6 percent at 24.75 euros via XETRA.
According to Warburg analyst Marius Fuhrberg, the fourth quarter of the year produced strong figures in new business. The trend of high growth in North and Eastern Europe continued, followed by Southern Europe. The decline in the German-speaking region is due to the already high level.
GRENKE CEO Hirsch wants to leverage the momentum from the last quarter to achieve the ambitious goal of at least three billion euros in new leasing business in the new year. Analysts from Pareto Securities see this as challenging, as it implies faster growth of 16 percent compared to the previous year.
The margin of the so-called contribution margin 2 increased by 0.4 percentage points to 16.5 percent in the past year. This indicator provides information about the profitability of new business. Given the increased interest rates, Hirsch emphasized that strong profitability is more important than pure volume growth.
GRENKE can only pass on rising interest rates to its mostly medium-sized customers, whose business equipment is financed through leasing, with a delay. Fuhrberg assumes that GRENKE can achieve its medium-term margin target of 17 percent this year with the prospect of falling interest rates.
