Press release 01.10.2008
One-off effects put strain on strong operating business
- Revenues of EUR 547.7 million at previous year’s level (previous year EUR 548.6 million)
- One-off effects drain EUR 33.8 million from income
- Adjusted earnings before taxes rose by approximately 24 percent
- Collection segment achieves best quarter in GFKL’s history
Revenues and income
Essen, October 1, 2008: Even excluding the contribution to income made by two companies up for sale, the revenues generated by the GFKL Group during the first six months of the current business year, amounting to EUR 547.7 million, reached the same level as the previous year (EUR 548.6 million, continuing business EUR 442.4 million).
This gratifying development in operations was offset by two one-off effects, which led to a distinctly negative consolidated interim result of EUR -20.3 million, after a profit of EUR 11.5 million during the previous year.
Firstly, the Leasing business in Spain, which is running at a loss, and the Systems business in Germany, which has not come up to expectations, are both to be sold. Binding offers have already been received from potential buyers. However, this meant that the companies had to be depreciated to fair value, with a corresponding drain on earnings for the first half-year amounting to EUR 25.3 million. EUR 21.1 million of this amount (not affecting liquidity) is derived from the depreciation of company value and approximately EUR 4.2 million from the operating losses suffered by these two subsidiaries.
Secondly, GFKL had to cope with credit losses amounting to approximately EUR 5 million due to a major fraud perpetrated by a German forwarding company operating with leased trucks; more than EUR 5 million also had to be set aside for back duty from previous periods as the result of an ongoing audit.
The Executive Board has decided to carry out all value adjustments and provisions necessitated by these events all at once and without delay. In this way, the Group’s business success will not be affected over a longer period of time. A high degree of transparency will also be achieved.
Adjusted by these one-off effects, GFKL increased its earnings before taxes by 24 percent; these rose from EUR 15.1 million to EUR 18.7 million. This illustrates GFKL’s operating strength and the sustainability of the business model.
However, due to the one-off effects described, earnings before taxes from continuing operations will not reach the target of approximately EUR 33 million pre-tax profit for 2008. From our current viewpoint, we expect earnings before taxes to reach EUR 25 million.
Segments
GFKL booked a marked increase in new leasing business. In this context, Germany, the Benelux countries and England recorded very good growth rates. In Germany, the volume of newly concluded agreements rose by 11 percent, in the Benelux countries by 16.5 percent, and in England by no less than 59.4 percent.
GFKL also continued to consolidate its market position in the factoring business. During the second quarter, the subsidiary Universal Factoring GmbH was chosen by WestLB AG as its service partner for factoring. In this partnership, Universal Factoring is responsible for servicing WestLB’s factoring agreements. The conclusion of this contract secured GFKL one of the largest mandates on the fast-growing German factoring market.
Business also continued to develop very positively in the Collection segment. In the last six months, earnings before taxes rose by 43% from EUR 11.9 million to EUR 17.0 million. The second quarter was therefore the best quarter on record for GFKL’s collection segment.
Balance sheet
As of June 30, 2008, the GFKL Group disclosed a balance sheet total of EUR 1,353.8 million (previous year EUR 1,153.1 million). With consolidated equity amounting to EUR 145.5 million (previous year EUR 167.3 million), the result is an equity ratio of 10.7 percent (previous year 14.5 percent).
About GFKL Financial Services AG
GFKL is a fast-growing financial services provider focusing on leasing and collection services. The Software segment is the technological complement to this spectrum of services. GFKL is thus able to assist clients in financing investments, organizing processes and safeguarding liquidity during every phase of the business process. During the business year 2007, the GFKL Group generated revenues of EUR 1.2 billion with 2,600 personnel.
Press officer:
Katrin Schwarz
Head of Corporate Communications
and Investor Relations
Tel.: +49 (0)201/102-1192
Fax: +49 (0)201/102-1102-462
E-mail: katrin.schwarz@gfkl.com
Internet: www.gfkl.com
