Press release 07.04.2008

Consolidated Financial Statement 2007

GFKL growing as rapidly as ever


  • Consolidated revenues up 17 percent, earnings before taxes up 21 percent
  • Good economic climate causes marked increase in new leasing business
  • Collection segment servicing receivables volume of EUR 12 billion
  • First distribution of dividend planned


Revenues and income
During the last business year, GFKL Financial Services AG’s consolidated revenues increased by 17 percent from EUR 1.03 billion to EUR 1.20 billion. At the same time, consolidated earnings before taxes were up 21 percent on the previous year, rising from EUR 26.5 million to EUR 32.0 million. In contrast, the consolidated net income for the year after taxes fell by 21 percent from EUR 21.9 million to EUR 17.4 million. This was due firstly to the tax burden of approx. EUR 2 million added to the corporation’s regular taxes, and secondly to the comparatively low taxes incurred in 2006. GFKL expects the tax rate for 2008 to drop from 46 percent (2007) to between 32 and 37 percent.

Segments
In 2007, the GFKL Group’s new leasing business rose sharply from EUR 726.6 million to EUR 853.9 million. This corresponds to a growth rate of 18 percent. This gratifying development was supported by sustained organic growth on the domestic and foreign markets. In all, no less than 39 percent of the volume of new business was generated on the foreign markets (previous year 36 percent). At EUR 13.0 million (previous year EUR 13.4 million), the Credit segment’s contribution to earnings was encumbered by the continued pressure on margins in the leasing sector, and even more by start-up costs for setting up the factoring business, which amounted to approximately EUR 1.4 million in 2007.
The high demand for professional collection services continued during the business year 2007. As the fourth-largest collection provider on the German market, the GFKL Group’s banking and non-banking segments both profited from this. As of the balance sheet date, the volume of non-performing loans accepted for processing (banking segment) amounted to EUR 11.3 billion (previous year EUR 7.5 billion). As of December 31, 2007, the GFKL Group’s non-banking segment was servicing trade, commercial and industrial receivables with a total volume of EUR 695.0 million (previous year EUR 500.3 million). Revenues in the Collection segment almost doubled from EUR 59.0 million to EUR 114.3 million. This increase is distributed almost equally between organic growth and acquisition effects. Earnings before taxes in the Collection division rose significantly from EUR 16.4 million to EUR 27.2 million.
During the last business year, the GFKL Group significantly expanded its software business by taking over ID Innovative Datenverarbeitung GmbH (ID). In September 2007, GFKL bundled the Group’s software and consulting expertise for the insurance sector in the subsidiary GENEVA-ID GmbH with the aim of creating synergies and providing customers with integrated solutions for the entire insurance process. Due to the acquisition of ID, the Software segment’s sales figure of EUR 30.9 million (previous EUR 20.2 million) and earnings before taxes of EUR 5.8 million (previous year EUR 1.6 million) can only be compared conditionally with the previous year’s figures.
Having acquired more than 50 new customers in 2007, some of which generate high revenues, ADA succeeded in laying a good foundation for further growth in the Systems segment in 2008. During the business year 2007, sales (EUR 146.3 million) and earnings before taxes (EUR 2.6 million) in this segment were down on the previous year (EUR 152.3 million/EUR 3.4 million). However, positive one-off effects of EUR 2.0 million (2006) and EUR 1.2 million (2007) must also betaken into consideration in this context. Adjusted by these effects, earnings before taxes remained at the previous year’s level.

Balance sheet
As of December 31, 2007, the GFKL Group disclosed a balance sheet total of EUR 1,277.2 million (previous year EUR 972.2 million). With consolidated equity amounting to EUR 162.0 million (previous year EUR 147.3 million), the equity ratio comes to 12.7 percent (previous year 15.2 percent).

Dividends
At the coming annual shareholders’ meeting, GFKL will ask its shareholders to agree to the first-time distribution of a dividend. This will amount to EUR 0.10. In this way, the company intends to give the starting signal for a sustainable dividend policy.

Forecast
Because of its balanced business model, the GFKL Group expects its growth trend to continue in 2008 despite the general uncertainty as regards economic development. In 2008, the GFKL Group’s target is once again to expand its position in the markets already opened and to continue extending the established business segments to cover new markets.
GFKL aims to increase revenues by approximately 20 percent and earnings before taxes (EBT) also by about 20 percent during the business year 2008.

Dr. Peter Jänsch, Chairman of GFKL Financial Services AG, on the forecast for 2008: “Our aim is to increase margins steadily over the next years. For this, we are relying particularly on the growth potential in the high-margin Collection segment. In this context, we are not excluding the possibility of implementing short-term capital measures, independent of any subsequent stock market flotation, in order to maintain our investing power. In this way, GFKL will continue its success in 2008.”

About GFKL Financial Services AG
GFKL is a fast-growing financial services provider focusing on leasing and collection services. The software and systems areas are the technological complements 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.


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

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