Apr 22, 2016 | Weingarten
Growth: Promising developments in America and Western Europe during first quarter
Gross margin: Profitability increases continue into the new year
Outlook: New release of technology and service application, TESMA®, bolsters growth prospects further
The CHG-MERIDIAN Group started 2016 with a first quarter that was profitable, though more subdued in terms of new-business growth. Based in the South German town of Weingarten (Baden-Wuerttemburg) and represented in 23 countries with 36 branch offices, the experts in efficient technology management posted 5.7% gains in lease originations, to over €246 million (Q1 2015: €233 million).
Wide regional variations in new business
Growth in lease origination volumes was marked by differences in regional development. The region of North America saw growth of 25.4%, to €33.2 million (Q1 2015: €26.5 million) and Western Europe achieved a 19.5% increase to €47.3 million (Q1 2015: €39.6 million); on the other hand, Central Europe—the company’s highest-volume market—posted a 1.6% increase to €122.7 (€120.8 million), which was below expectations for Q1 2016.
Compared to the first three months of the previous year, total current customer customer contracts increased 4.3%, to 69,593 (Q1 2015: 66,718). Its cumulative proportion of new customers remained at 28%, the same as in the first quarter of the previous year. “On the one hand, the numbers demonstrate how loyal and satisfied our existing customers are,” said Jürgen Mossakowski, Chairman of the CHG-MERIDIAN Group Executive Board. “On the other hand, they also indicate that we still have potential for growth in terms of new customer acquisition. So we are satisfied with our total new business thus far, but we want to improve upon those results over the course of the year.”
Profitability continues to increase
As regards profitability, CHG-MERIDIAN Group successfully improved even further upon what were already excellent results, increasing its first-quarter gross margin by 23.4% to nearly €40 million (Q1 2015: €32.3 million). Domestic business accounted for 44% of this total. Its equipment remarketing business, which it handles through its dedicated Technology and Service Center near Frankfurt am Main, decreased slightly at the beginning of the year; however, the total number of remarketed devices still exceeded 100,000 units.
TESMA® release opens up new perspectives for growth
Mossakowski expects further growth potential over the course of the year thanks to TESMA®, the company’s proprietary software platform for managing complex technology landscapes from business and technical perspectives. As part of the new release launched in April 2016, the application has been radically modernized and equipped with new functions, meaning CHG-MERIDIAN customers can now manage their technology equipment with unparalleled efficiency. “In bringing the new TESMA® onto the market, we are providing a solution that gives our customers genuine added value,” said Mossakowski. “I’m convinced that our investments in the further development of this product will pay off.”