Grenke Q4 Earnings Call Highlights

Core Insights - The company reported a new leasing business of EUR 3.3 billion in 2025, reflecting a 7.8% increase from EUR 3.1 billion in 2024, primarily driven by growth in Germany, France, and Italy [1] - Despite a loss rate of 1.7%, which is above the historical average of 1.5%, the company achieved significant improvements in operating performance, with a return on equity after taxes remaining stable at 5.2% [2][3] - Group earnings for 2025 reached EUR 71.8 million, with consistent quarter-over-quarter growth throughout the year, despite geopolitical tensions and high corporate insolvencies [4][5] Leasing Performance - New leasing business increased to EUR 3.3 billion, with leasing receivables surpassing EUR 7 billion, driven by strong performance in Germany, France, and Italy, as well as future core markets like the U.S. and Australia [7][10] - The company reported a 14.7% rise in operating income and a 26% improvement in the operating result, leading to a cost-income ratio reduction to 55.2% [7][12] Risk Management - Risk provisions rose to EUR 196 million, resulting in a loss rate of 1.7%, while stage-3 coverage remained stable at nearly 60% [6][13] - The company has become more selective in accepting new business, which may lead to slightly lower growth rates in the near term [13] Financial Outlook - For 2026, the company guided earnings between EUR 74 million and EUR 86 million, with new business expected to be between EUR 3.4 billion and EUR 3.6 billion, assuming a loss rate of 1.6% to 1.7% [20] - The long-term target remains a 10% return on equity by 2030, with management expressing confidence in capital allocation and growth without the need for a midterm capital increase [6][15] Regional Performance - New business growth was reported at 13.7% in the DACH region, 8.5% in Western Europe, and 8.9% in Southern Europe, while Northern/Eastern Europe saw a decline of about 5% due to various factors [10] - Future core markets experienced a significant new business increase of 21.2%, primarily driven by the U.S. and Australia [10]