Please note that this website shows an excerpt from the grenke AG Annual Report 2024. The annual report, which is also available in the “Reports & Presentations” section of the grenke AG website, prevails.

In the ad hoc announcement dated January 31, 2024, we announced that we had initiated the divestment of our factoring business to focus on the leasing business. This required a revision of the previous segments. The new segmentation of the Consolidated Group is based on the regional breakdown of the leasing business and is divided into the segments DACH, Western Europe without DACH, Southern Europe, Northern/Eastern Europe, and Other regions. The factoring and grenke Bank activities will now be reported in the segment “Other”.


In our core leasing business, we generated 96.8 percent (previous year: 96.2 percent) of the Consolidated Group’s interest income during the reporting year. Our business focuses on small-ticket leasing, which encompasses lease contracts with a ticket size of up to EUR 50,000. In response to growing demand for financing higher-cost new technologies, particularly in fields such as medical equipment and robotics, we adjusted our definition of small-ticket leasing last year from the original ticket size of up to EUR 25,000 to up to EUR 50,000 per contract. Contracts of this size accounted for 97.1 percent (previous year: 97.6 percent) of all leasing contracts during the reporting year.
Our leasing service offering includes, among others, financing for commercial customers, rentals, service, protection and maintenance options, as well as the remarketing of used equipment. We primarily specialise in the small-ticket leasing of IT products such as PCs, notebooks, servers, monitors, and other peripheral devices, software, telecommunications and photocopy equipment, and medical technology. Almost all of our lease contracts are full amortisation contracts. The focus of our lease portfolio is on IT and office communication products. In the 2024 financial year, IT equipment accounted for 27.8 percent of all lease contracts (2023: 28.6 percent). In recent years, we have expanded our business model to include additional product groups such as small machinery and equipment, medical devices, security equipment, and, most notably, green economy objects. Based on the number of contracts, these product groups accounted for 40.4 percent of all lease contracts in 2024, up from 39.3 percent the previous year. Green economy objects include wall boxes, photovoltaic systems, and above all, eBikes.
We are able to manage our business agilely by adjusting our acceptance practices for lease applications. This flexibility allows us to actively manage the quality and quantity of our new business. An example of this is strictly focusing on lower-risk new business during periods of economic weakness, such as by avoiding transactions with higher-risk industries and customer segments. In addition, we have the flexibility to adjust our terms and conditions in line with market developments and the macroeconomic environment. This has proven to make our business model resilient to market fluctuations. We successfully maintained risk-appropriate margins and long-term profitability during both the financial crisis in 2009 and the COVID-19 pandemic in 2020 and 2021.
In the factoring business, which is currently for sale, we focus on standard small-ticket factoring services. We offer both notification factoring, where the debtor is informed of the assignment of receivables, and non-notification factoring, where the debtor is not informed. Additionally, we offer receivables management without a financing function (recourse factoring), where the default risk for the receivable remains with the customer. The factoring business continues to represent a very small share of the Consolidated Group’s interest income, accounting for less than 3 percent.

As a financing partner primarily for SMEs in Germany, grenke Bank offers additional financial services. In cooperation with various federal and state development banks, grenke Bank provides small development loans to SMEs and self-employed professionals who finance new business purchases through leasing. The Bank’s business focuses mainly on German SMEs and, since 2021, has primarily concentrated on microcredit business conducted as part of the “Mikrokreditfonds Deutschland” funding programme. Through its own website and common online platforms, grenke Bank also offers fixed-term deposits for private and commercial customers. These customer deposits play a key role in the Consolidated Group’s refinancing strategy, as grenke Bank purchases the Consolidated Group’s lease receivables and, in return, provides loans to the Consolidated Group. The deposit business accounted for 34.2 percent (previous year: 29.8 percent) of the Consolidated Group’s financial liabilities, making it a significant contributor to refinancing. Refinancing through grenke Bank’s deposit business represents 16.7 percent (previous year: 18.8 percent) of total interest expenses, highlighting the attractiveness and importance of this refinancing pillar for the grenke Group.
More information on the business development of the segments in the reporting year is presented in Chapter 2.6 Results of operations, in the section “Segment development” of the combined management report, and in Chapter 8 Segment reporting, in the notes to the consolidated financial statement.

At the end of the 2024 financial year, our leasing business was operating in 31 countries across five continents, with a total of 132 locations. We continuously review and optimise our network of locations. Our primary presence is in Europe, where we operate essentially in all leasing markets. Outside of Europe, we have entered the markets of Australia, North and South America and Asia with our entry in Dubai. In the 2024 financial year, we generated 93.6 percent (previous year: 94.1 percent) of our leasing new business in Europe and 6.4 percent (previous year: 5.9 percent) outside of Europe. Our lease object categories in small-ticket leasing mainly include information technology, telecommunications, medical technology, and bicycles, enabling us to occupy a niche in nearly all countries.
Official market studies for our niche segments are not available for Germany or the other countries. However, according to the Association of German Leasing Companies (BDL) in its 2024 annual report for the year 2023, the German leasing industry as a whole is reported to have grown significantly. Despite the generally weak economic environment, the leasing industry was able to increase new business volume by 19.5 percent to around EUR 83.5 billion, covering investments in machinery, vehicles, IT equipment, infrastructure, and other objects. According to the BDL, some of this growth was driven by catch-up effects and price increases following the COVID-19 crisis.
Vehicles (passenger cars, buses, vans, aircraft, rail, and water vehicles) accounted for the largest share of new business volume in the German market, representing around 79 percent.
The asset groups most relevant for grenke – IT, software and cloud applications, other equipment, medical technology, intangible assets, and bicycles – still play a subordinate role.
In the first three quarters of 2024, leasing companies recorded a 5 percent increase in revenue compared to the same prior-year period, according to the BDL. Leasing of passenger cars and renewable energy systems continued to show particularly strong growth. Investments in the IT, cloud, and software applications segment, on the other hand, declined sharply by –8 percent. According to the BDL, the positive order development indicates that companies are increasingly using leasing models to make necessary investments flexibly and without tying up capital.
On the provider side, our segment of the German leasing market is predominantly characterised by medium-sized companies.
According to a study we commissioned on the competitive landscape in tech small-ticket leasing from the market research firm INVIGORS, we are among the top five providers in Germany in this category, alongside DLL, BNP Paribas, MMV Leasing, and Mercator Leasing. The market study covers object groups such as IT equipment, including software, office equipment, and photocopy equipment. The analysis is based on 2021 data. We have not observed any significant changes in the competitive landscape in the years 2022 to 2024.

The French leasing market is dominated by subsidiaries of major French banks. According to a 2024 local study by the market research firm markess on the competitive landscape in tech small-ticket leasing, we are among the largest providers in France, alongside BNP Paribas, Crédit Mutuel, Locam, and Crédit Agricole.
In Italy, we have established a significant market position in small-ticket leasing. According to the latest figures from the Italian leasing association Assilea from 2024, we were able to further strengthen our position in the operating lease segment, where we now hold a leading role alongside BNP Paribas and DLL.
The other major leasing markets in Europe are primarily served by local providers and primarily specialised subsidiaries of banks and equipment manufacturers. Many of these competitors are not as focused on small-ticket leasing as we are and also offer leasing solutions for cars or aircraft. Across countries, we consider BNP Paribas, DLL, and Crédit Mutuel to be our main competitors in the market.

In the leasing business, our value added comprises different process steps from liquidity procurement to application management, the operational processing of object purchases, as well as long-term contract management to the realisation of lease returns. Our value chain can also be found in greater detail in Chapter 3.2 ESRS 2 Sustainability strategy.
 

Leasing is the ideal tool for realising investments, not least because instalment payments economically align with the usage of investment assets. As a leading partner for SMEs and self-employed professionals, we aim to help make leasing a seamless and natural choice for small investments. Leasing should be the preferred option for our customers, offering a simple solution that is fast, as digital as possible, and still personal. We focus on small investment amounts, primarily up to EUR 50,000, and strive to become the global market leader in this segment. For financial year 2025, based on the growth strategy and taking current economic forecasts into account, the Board of Directors is targeting leasing new business of EUR 3.2 to 3.4 billion, representing growth of slightly more than 10 percent. Furthermore, the Board of Directors forecasts Group earnings of EUR 71 to 81 million for 2025. The equity ratio is expected to be around 16 percent by the end of the 2025 financial year.
To achieve our growth objectives, we are focusing on four key areas with corresponding strategic initiatives. In addition, liquidity management and refinancing play a fundamental strategic role for us.
 

Through our business model and focus on small-ticket investments and SMEs, we have a large number of business relationships with specialist resellers and leasing customers. We want to manage the relationships of this highly diversified portfolio cost-efficiently over their entire life cycle. We are always working to analyse and optimise our core operational processes, starting with immediate decision-making to simple, fast contract conclusions and fully digital process handling.
Based on our high degree of standardisation, we want to achieve, maintain and increase our high cost efficiency when processing and administrating our more than one million active leasing contracts and over 680,000 active customer relationships (“bulk business”). 
Our goal is also to continue to maximise our efficiency in the future when it comes to originating new business and dealing with leasing customers and specialist resellers, as well as when it comes to our own internal operations.

We plan to fully automate and digitalise our business processes wherever reasonably possible. We place emphasis on a clear customer focus and creating the best possible customer journey. We not only aim to minimise the complexity for our target groups but also to always offer a simple, fast and therefore best solution.
The goal is to achieve an efficient mix of digital processes and personal customer contact in order to leverage the acceleration advantage embedded in digitalisation in sales and attain operational excellence.
Our focus includes modern payment and contract models, such as pay-per-use contracts, and the expansion of use cases for eContracts. We rely on our internal IT service provider, grenke digital GmbH (GdG), to efficiently help us execute our strategy in these areas. 
Onboarding and a proper know-your-customer (KYC) process are also part of an optimised digital customer journey, especially in our small-ticket, high-volume business. The use of AI can help us collect the correct relevant data automatically and in an integrated manner.

In accordance with the United Nations Sustainable Development Goals (SDGs) and the 2030 Agenda, we expanded our definition of sustainability, developed our vision and formulated our sustainability strategy with the relevant measures for the Consolidated Group. 
Going forward, we want to increase the sustainability of our activities in a targeted manner. This includes aligning all of our business and corporate activities along the dimensions of “climate and environment” (Environmental), “social contribution” (Social) and “responsibility and trust” (Governance), or ESG for short. 
As a company, we intend to act sustainably and, above all, enable our SME customers to maintain sustainable business models and finance sustainable investment projects. 
An important component of this strategy is expanding our portfolio to include innovative object categories so that we can tap new market potential. These categories include objects for advancing digitalisation as well as leased assets for the expansion of a green and overall resource-saving economy. A key focus in accomplishing this remains the use and reuse of used lease objects in the context of a sustainable circular economy. 
We will measure the contribution of our leasing business to sustainability using our proprietary ESG index – the grenke Sustainability Index (GSI). We will also use sustainability-linked funding instruments for refinancing. 
Beyond these four core objectives, managing liquidity and refinancing play a fundamental strategic role for us. Adequate liquidity and competitive refinancing are essential to our business model and managed accordingly at a strategic level. A solid equity base has a decisive impact on our ratings, interest rates, and therefore the cost of our refinancing. For many years, we have consistently maintained our self-set target for an equity ratio of 16 percent. To ensure sufficient liquidity at all times, we have always relied on a broad refinancing structure. We have access to a wide range of instruments, which we utilise in line with our overall strategy, depending on market conditions.
Our debt-based financing is based on three main pillars:

• senior unsecured instruments, including bonds, the current green bond, a social bond, commercial paper and debentures, which are essentially based on our investment grade rating but also on our credit relationships with international banks, as well as syndicated credit lines; 
• asset-based financing that includes asset-backed commercial paper (ABCP) programmes; and  
• grenke Bank’s deposit business.

By taking this approach, we avoid maturity transformation and thereby eliminate potential interest rate and follow-on financing risks at the portfolio level. We leverage the various pillars of refinancing based on demand and market conditions. We have been awarded investment grade ratings from both the Standard & Poor’s and Fitch Ratings rating agencies.

In addition to the abovementioned Consolidated Group performance indicators, there are other performance indicators applied to the leasing business:

• Contribution margin 1 and 2
• Net acquisition value (NAV)
• Expected loss
• Embedded value

To assess and control the profitability of our leasing business, we calculate contribution margins, which show the income from a lease contract over the total period. In the leasing business, a distinction is made between contribution margin 1 (CM1), or the CM 1 margin (contribution margin 1 in relation to new business), and contribution margin 2 (CM2), or the CM2 margin. CM1 corresponds to the present value of the net interest income of a lease contract less the commission paid to third parties. CM2 represents the present value of the operating income of a leasing contract, including risk costs, as well as service and disposal income. Both figures relate to the total period of a lease contract and therefore take into account the four-year average lease term starting from the conclusion of the contract. Management focuses on CM2, whose calculation corresponds to the Consolidated Group’s operating profit. While the contribution margin is determined by the new business of the past reporting period, the operating income from the concluded lease contracts is distributed over their term. As a result, the operating income and Group earnings for the financial year are also determined by the new business acquired in previous financial years.
The expected loss corresponds to the amount of expected loss initially calculated over the entire term of a lease contract or portfolio. We strive to keep the deviation of expected losses from realised losses as low as possible.

Embedded value represents the present value of all outstanding instalments and expected gains/losses from disposals after costs and risk provisioning over the remaining term of the entire portfolio. The CM2 indicates the total embedded value of the new business for a period before costs and taxes.
We use embedded value as an additional key performance indicator for two reasons: First, because expenses incurred when expanding into new markets, carrying out cell divisions, and opening new branches in our markets are usually not immediately covered by income until after the start-up phase has ended. Second, because the internal interest in our lease receivables is largely fixed over the remaining term of a portfolio and only reflected in net interest income over the term as a result of IFRS lease accounting. At the same time, refinancing with matching maturities provides a high degree of forecasting certainty for interest expenses and therefore for the total outstanding interest result over the remaining term. With the help of embedded value-based management, we take into account future earnings contributions from leasing new business and combine two goals into one: growth in new business with an increase in net asset value.

In the 2024 financial year, we further advanced the sustainability strategy and activities of the grenke Group. To assess and manage our sustainability objectives, the most important non-financial performance indicators were defined as TOP KPIs back in 2022. These were assigned specific target values in the 2023 financial year. The following figure provides an overview of the most important KPIs at a glance.

We are committed to making our product portfolio and leases as sustainable as possible. This is the reason we are specifically including green economy objects in our lease objects portfolio. We define green economy objects as those that contribute to a sustainable transformation of the business activities of our individual customers and the economy as a whole. Examples include objects used for renewable energy generation and storage, sustainable mobility solutions and resource management.
We want to enable our SME customers to invest in their sustainable transformation. Therefore our goal is to gradually increase the share of green economy objects, measured by the net acquisition volume of the overall leasing new business. In the 2024 financial year, these objects accounted for 7.8 percent of the Group-wide leasing new business, compared to 7.7 percent in the prior year. 
TOP KPI: Green economy objects as a percentage of the overall leasing new business portfolio (new business volume in euros) in the financial year.

We aim to achieve net zero for our business operations no later than 2050, thereby making a positive contribution to the 1.5-degree target of the Paris Climate Agreement. Our first Climate Action Plan outlines our emission reduction targets for 2030 and 2050, as well as key milestones for their achievement. We present this in detail in our Group non-financial statement.
To achieve our climate targets, we measure our corporate carbon footprint annually. As part of this process, we calculate the greenhouse gas emissions from our direct business activities (Scope 1), our indirect energy consumption (Scope 2), and our value chain (Scope 3). The Scope 3 emissions include the relevant selection of categories for us in accordance with the Greenhouse Gas (GHG) Protocol.
For 2024, the underlying collected consumption data corresponds to the reporting period. Previously, the consumption data was based on the prior year, as this information was not yet available at the time of reporting.
We completed our 2024 corporate carbon footprint using conservative projections within the existing Scope 1, 2, and 3 categories. Due to missing data or data of insufficient quality, our Scope 3 emissions do not yet include any information or estimates for our leased assets. Due to missing or insufficiently available data, our Scope 3 emissions do not yet include any figures or estimates for our leased assets.
Our Scope 1 emissions amount to 2,690 t CO2e, accounting for 34 percent (2023: 3,184 t CO2e; 2022: 3,407 t CO2e). Our Scope 2 emissions (location-based) amount to 960 t CO2e, accounting for 12 percent (2023: 1,197 t CO2e; 2022: 1,498 t CO2e).

In Scope 3, we have calculated emissions of 4,183 t CO2e, accounting for 53 percent (2023: 3,581 t CO2e; 2022: 4,632 t CO2e). All Scope 3 data currently exclude emissions from our leased assets. We will provide transparent updates on any future changes and their impact on our reduction targets. All Scope 3 figures currently do not include any data on emissions from our leased assets. Future changes and their impact on our reduction targets will be reported transparently.
Detailed explanations of the reduction measures are provided in Chapter 3. Group non-financial statement under ESRS E1 – Climate change mitigation and adaptation.

TOP KPI: Greenhouse gas emissions for Scope 1, 2, and 3 and in total measured in t CO2e in accordance with the GHG Protocol.

Given our business model as a financer of small-ticket leases, a key driver in implementing our sustainability strategy is the digitalisation of our business processes. This is especially true for the dimension of environment in terms of a conscious use of resources. It also applies however to social and governance. For example, through 24/7 availability and self-service functions, we increase the service level for our customers and partners and, at the same time, ensure our actions are legally compliant through integrated controls in these processes in an efficient manner. We aim to continue minimising our paper consumption in all paper-intensive processes.
We measure our degree of automation based on the availability of our eSignature and eInvoice solutions, as well as the eContract ratio for new contracts. In the 2024 financial year, digital signature solutions were available in 27 countries (2023: 27 countries). The proportion of lease contracts concluded electronically via eSignature equalled 40.5 percent in the financial year and was slightly above the previous year’s level (2023: 40.1 percent).
Our digital invoicing solution continued to be available in 26 countries during the 2024 financial year (2023: 26 countries). Detailed information on the topic of eInvoicing can be found in ESRS E1 – Climate change mitigation and adaptation. In future financial years, we aim to continuously improve the measurability of the degree of automation in the core leasing process, which spans from the initial enquiry to the end of the contract.
The TOP KPI comprises the following:

• Number of countries with available eSignature solutions
• Number of countries with available eInvoice solutions 
• eContract ratio, measured by the share of the total number of new lease contracts concluded using eSignature in the financial year

Our annual employee survey serves as an important basis for evaluating our attractiveness as an employer. We are using detailed questions to calculate the grenke Engagement Score (GES). In one score, the GES measures employee satisfaction and summarises the results in the areas of engagement, identification and retention, as well as the overall satisfaction of employees with the Company. The GES is based on a scale of 1 to 7, where 1 = high satisfaction and 7 = low satisfaction. Our goal in the long term is to achieve a grenke Engagement Score of at least 2.2.
As in last year’s survey, this year’s survey resulted in a GES of 2.1 (2023: 2.1). The participation rate across the grenke Group was 67.8 percent (2023: 68.4 percent).
TOP KPI: grenke Engagement Score, measured as a quantitative score between 1 and 7 based on the annual employee survey.

Another indicator of sustainable human resources management and our attractiveness as an employer is the staff fluctuation rate. This reflects the retention and turnover behaviour relative to the average number of employees, excluding parental leave and unpaid absences. Our objective is to achieve a lower staff turnover rate than the financial and insurance services sector. This industry average was around 16.8 percent in 2022, which means that we remained within our target range in the financial year. In the 2024 financial year, the Consolidated Group’s average fluctuation rate was 8.9 percent (2023: 9.7 percent). This represented a further decline of 0.8 percentage points compared to the previous year.
TOP KPI: Percentage fluctuation in the reporting year, measured by retention and turnover behaviour relative to the average number of employees.

We offer a comprehensive range of training and further education programmes for the long-term development of our employees. We measure the utilisation of these programmes based on the average number of days each employee spent on voluntary and mandatory training in the reporting period. 
Our aim was to increase the average number of training days per employee to 3.5 to 4 days as early as 2023. In the 2024 financial year, the average was 3 days (2023: 3.7 days), with a Group-wide training ratio of a steady 99 percent (2023: 99 percent).
This puts us slightly below the target rate of 3.5 to 4 training days per employee in the 2024 financial year. We remain committed to this target.
TOP KPI: Average number of training and development days per employee in the reporting year, measured on the basis of the total number of employees.

To best implement our corporate strategy and, in turn, our sustainability strategy, we place a high value on the approval and support of our employees. Our Overall Strategy Awareness (OSA) Score reflects the extent to which our employees identify with our strategy. We measure the OSA score based on questions included in our annual employee survey concerning our strategy, products and innovation. The Overall Strategy Awareness Score is determined on a scale of 1 to 7, where 1 = high awareness and 7 = low awareness. Our goal is to ensure an OSA Score of 2.5 in the long term. 
In the 2024 financial year, the OSA was unchanged from 2023, holding steady at a score of 2.6 (2023: 2.6).

TOP KPI: Overall Strategy Awareness Score, measured on a scale of 1 to 7, based on all responses to the Strategy, Products and Innovation sections of the annual employee survey.

To ensure steering along our sustainability strategy across the entire Consolidated Group, we integrate sustainability components into the variable remuneration of top management. We measure this as the proportion of top management positions with variable remuneration featuring sustainability components compared to the total number of top management positions (i.e. the Board of Directors and the first and second management levels).
In the 2022 financial year, variable remuneration components were linked to sustainability targets for the first time for the Consolidated Group’s entire Board of Directors. This resulted in a quota of 100 percent for the Board of Directors and 1.7 percent for the Board of Directors and senior management as a whole (2023: 1.8 percent) (see Chapter 3. Group non-financial statement under ESRS 2 – Company profile).
We continue to pursue the integration of sustainability aspects into the variable remuneration of all top management.
TOP KPI: Share of top management positions with variable remuneration featuring sustainability components, measured on the basis of the total number of top management positions (i.e. the Board of Directors and the first and second management levels).

We reinforce our governance structure through effective processes and controls to ensure lawful and ethical conduct. To achieve this, we measure the proportion of completed audits compared to the total number of audits planned by Internal Audit for the financial year across the entire grenke Group. Our goal was to increase the completion rate of all audits to 75 percent by 2023, to 85 percent by 2024, and to 90 percent starting in 2025. The completion rate in the 2024 financial year was 65 percent (2023: 81 percent). The lower completion rate of internal audits compared to the previous year was due to the strategic prioritisation of implementing measures during the financial year.
TOP KPI: Proportion of audit reviews completed by the Internal Audit department, measured in percent based on planned audits according to the annual audit planning
Further information can be found in Chapter 3. Group non-financial statement.

Our core capabilities include standardised and highly digitalised processes – particularly in the area of leasing – and the efficient evaluation of lease applications. We continuously optimise our software solutions and applications to maintain these capabilities. A key focus of our technical activities within our “Digital Excellence” digitalisation programme is the transformation of IT operations into a secure cloud infrastructure and the completion of the necessary modular environment for running applications in the cloud. In 2024, we also established important foundations for the secure use of generative AI and piloted it in initial use cases. We are consistently advancing the development and implementation of automated and customer-centric processes for sales and administration. In 2024, for example, we completed our migration of data from all countries to the central customer master data management system. Centrally important to this was GRENKE digital GmbH, which houses all of the digital expertise and develops system solutions for us and our partners. In 2024, GRENKE digital GmbH employed around 190 people (previous year: 164).

Development costs of EUR 2.0 million (previous year: EUR 0.9 million) were capitalised in the reporting year. Amortisation of internally generated software amounted to EUR 4.0 million (previous year: EUR 4.4 million). In addition, we utilise third-party services for research and development purposes. In the 2024 reporting year, such services were mainly used in connection with IT projects and totalled EUR 15.8 million (previous year: EUR 13.7 million), of which EUR 1.0 million (previous year: EUR 0.3 million) was capitalised.