Grenke AG (0R97.IL) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the GRENKE AG new business update for the second quarter of 2024. My name is Franziska Randt. I'm Head of the Strategic Division of the IR Department. And with me today is our new CFO, Dr. Martin Paal. As announced earlier this week, he succeeded Dr. Sebastian Hirsch, who has been co-directing the finance department since his appointment as CEO of GRENKE AG. A warm welcome, Martin.

Yes. Thank you, Franziska. And also a warm welcome from my side, and it is a great pleasure for me to take up my new role as CFO at GRENKE.

Well, good luck on your new role. We recorded an outstanding second quarter in new leasing business with an increase of well over 20% compared to Q2 of 2023. Can you elaborate a bit on the highlights of the past quarter?

Absolutely. We are very happy with this results of quarter 2. Our new leasing business grew in almost all markets. With a volume of over EUR 790 million, we were once again able to surpass the EUR 700 million threshold, a record we've only been able to achieve 3 times in GRENKE history and the volume we want to continue to achieve in the future. We are very proud of this success, and we saw growth in all our regions given an increase in demand for our leasing solutions. Most of our countries reported a greater investment appetite in quarter 2 compared to Q1 2024, which is true for our hidden star markets and established core markets alike. Looking at our leading object categories, general IT equipment and green economy objects remain the strongest. Now, we have to leverage the positive dynamics of the past quarter in new business for the months to come. We have an ambitious target for 2024, more than EUR 3 billion new leasing business, a record for GRENKE. So yes, on the one hand, it is an ambitious target and on the other hand, we remain confident to reach this target.

Thanks, Martin. The basis for our new business growth are our refinancing activities. In May, we were once again able to issue another benchmark bond. Could you provide some insights?

Yes, certainly. After the success of our benchmark bond in September 2023, I'm delighted that we were able to issue another benchmark with a volume of EUR 500 million and a coupon rate of below 6%. And just to compare this to the green bond we issued last year, this had a coupon of nearly 8%. And we saw great demand for our bond, which is evidence of a very strong investor appetite and our reliable business model.

Congratulations to you on this achievement. Now, let's take a look at our CM2 margin. We've continued to maintain a profitability at high -- a very high level. What are the success metrics for this consistency? And could you share your expectations for the second half of the year?

Yes, sure. We are satisfied with the development of our CM2 margin reaching 16.6%. In light of our significant increase in leasing volume, this is a great achievement. In Q2, we saw a stabilized yet still elevated interest rate environment, in which we were able to maneuver profitably. And we are absolutely in line with our target for reaching a CM2 margin of slightly above 16.5% in 2024. So for the second half of the year, we are confident to maintain our CM2 margin at that level.

Good luck on this as well. Thank you. This was quite insightful, Martin. Ladies and gentlemen, this concludes our new business update for the second quarter of 2024. Thanks for joining us. We look forward to you tuning in next time. Take care, and goodbye.

Bye-bye.