Growing / Together Annual Report 2015 / 2016

GROWING / TOGETHER ANNUAL REPORT 2015 / 2016

More in Sight GROWING / TOGETHER Overview of Deutsche Leasing INTERNATIONALLY

Rising to international challenges while optimising investment solutions – this is a task Austria / Vienna Ireland / Dublin Romania / Bucharest which we love to solve. We are ready to provide you with direct, on-site assistance BelgiumFigures / Antwerp in EUR million Italy / Milan 2015 /Russia 2016 / Moscow2014 / 2015 2013 / 2014 2012 / 2013 2011 / 2012 through our know-how and our leasing and other services, in your own language or in Bulgaria / Sofia Luxembourg / Luxembourg Slovakia / Bratislava German or English. Our leasing concepts are tailored to your specific role as an exporter CzechNew Republic business / Prague Netherlands / Amsterdam Spain / Barcelona or investor and reflect local conditions in your country. You will find in us a partner who FranceDeutsche / Paris Leasing Poland / Warsaw 7.229Sweden / Stockholm6.871 6.767 6.580 6.031 thinks and acts as globally as you do yourself. Hungary / Budapest Portugal / Lisbon United Kingdom / London DAL 1.429 1.347 1.085 1.175 1.170

Deutsche Leasing Group 8.658 8.218 7.852 7.755 7.201

Assets under Management Deutsche Leasing 24.563 22.730 21.992 21.647 21.258

DAL 10.753 10.965 11.304 11.880 11.762 Deutsche Leasing Group 35.316 33.695 33.296 33.527 33.020 Canada / Halifax USA / Chicago

Balance sheet total 18.682 16.589 16.190 15.891 15.507

Net asset value 1.855 1.793 1.742 1.666 China1.611 / Shanghai

Equity 765 673 629 596 559

Economic result 148 137 128 139 143

Employees

Deutsche Leasing 1.777 1.737 1.721 1.666 1.571

DAL 252 247 246 239 237

Participations 452 328 232 231 205 FACTS AND FIGURES FACTS

Brazil / São Paulo

New business of the Deutsche Leasing Group New business of the Deutsche Leasing Group by business segment Germany / Other Countries

6 % Bad Homburg v. d. Höhe / Group Headquarters Real estate

Berlin / Eastern Region % 1,9 bn EUR Bremen / Deutsche Factoring Bank 6 Information and commu- Other Countries Fernwald nr. Gießen / AutoExpo nication technology

Hamburg / Northern Region 11 % ACTING / TOGETHER Leipzig / Eastern Region Energy and transportIN GERMANY Mainz / DAL Deutsche Anlagen-Leasing 53 % Monheim / Western Region In Germany you benefit from our broadMachinery presence. and Thanks to a nationwide network of branch offices equipment Munich / Southern Region 6,8 bn EUR 24and % subsidiaries, we can bring your investment ideas to life together with you at a local level. If you Germany Münster / Western Region Roadare vehiclesa customer of one of the more than 400 savings banks in Germany, you can obtain our finance and Nuremberg / Southern Region other services directly from your local savings bank. In partnership with Sparkassen-Finanzgruppe, Ratingen / Deutsche Factoring Bank our experts will support you together with your savings bank’s customer relationship managers in Stuttgart / South-Western Region your local region.

For further information on Deutsche Leasing’s offices in Germany please visit B www.deutsche-leasing.com FITTING / TOGETHER

So that everything ﬁ ts together: Individual recipes for success require tailored ﬁ nancing solutions, and a partner who is right for your company. thinks andactsasglobally as you do yourself. or investor local conditions andreflect in your country. You will find inusapartner who German or English.Our leasingconcepts are tailored to your specificrole asanexporter through our know-howandour leasingandother services, in your ownlanguageor in which welove to solve. We are ready to provide you withdirect, on-site assistance Rising to international challengeswhileoptimisinginvestment solutions–thisisatask INTERNATIONALLY / TOGETHERGROWING USA /Chicago Ratingen /DeutscheFactoring Bank Stuttgart /South-Western Region Mainz /DAL DeutscheAnlagen-Leasing Bad Homburg v. d. Höhe/Group Headquarters Nuremberg /SouthernRegion Canada Canada Münster / Western Region Munich /SouthernRegion Monheim / Western Region Bremen /DeutscheFactoring Bank / Halifax Fernwald nr. Gießen/AutoExpo Hamburg /NorthernRegion Leipzig /Eastern Region Brazil /SãoPaulo Berlin /Eastern Region

For further information onDeutsche Leasing’s offices inGermany please visit Hungary /Budapest France /Paris RepublicCzech /Prague Bulgaria /Sofia Austria Belgium your local region. our experts willsupport you together with your savings bank’s customer relationship managers in other services directly from your local savings bank.Inpartnership withSparkassen-Finanzgruppe, are acustomer of oneof themore than400savings banksinGermany, you can obtain our finance and / and subsidiaries, wecan bring your investment ideasto life together with you atalocal level. If you / Vienna In Germany you benefit from our broad presence. Thanks to anationwide network of branch offices Antwerp IN GERMANY ACTING / TOGETHERACTING

Portugal /Lisbon Poland / Netherlands /Amsterdam Luxembourg /Luxembourg Italy /Milan Ireland /Dublin Warsaw

Russia /Moscow United Kingdom/ Sweden /Stockholm Spain /Barcelona Slovakia /Bratislava Romania /Bucharest B www.deutsche-leasing.com

London

China /Shanghai

FACTS AND FIGURES thinks andactsasglobally as you do yourself. or investor local conditions andreflect in your country. You will find inusapartner who German or English.Our leasingconcepts are tailored to your specificrole asanexporter through our know-howandour leasingandother services, in your ownlanguageor in which welove to solve. We are ready to provide you withdirect, on-site assistance Rising to international challengeswhileoptimisinginvestment solutions–thisisatask INTERNATIONALLY / TOGETHERGROWING USA /Chicago Ratingen /DeutscheFactoring Bank Stuttgart /South-Western Region Mainz /DAL DeutscheAnlagen-Leasing Bad Homburg v. d. Höhe/Group Headquarters Nuremberg /SouthernRegion Canada Canada Münster / Western Region Munich /SouthernRegion Monheim / Western Region Bremen /DeutscheFactoring Bank / Halifax Fernwald nr. Gießen/AutoExpo Hamburg /NorthernRegion Leipzig /Eastern Region Brazil /SãoPaulo Berlin /Eastern Region

For further information onDeutsche Leasing’s offices inGermany please visit Hungary /Budapest France /Paris RepublicCzech /Prague Bulgaria /Sofia Belgium Austria your local region. our experts willsupport you together with your savings bank’s customer relationship managers in other services directly from your local savings bank.Inpartnership withSparkassen-Finanzgruppe, are acustomer of oneof themore than400savings banksinGermany, you can obtain our finance and / and subsidiaries, wecan bring your investment ideasto life together with you atalocal level. If you / Vienna In Germany you benefit from our broad presence. Thanks to anationwide network of branch offices Antwerp IN GERMANY ACTING / TOGETHERACTING

Portugal /Lisbon Poland / Netherlands /Amsterdam Luxembourg /Luxembourg Italy /Milan Ireland /Dublin Warsaw

United Kingdom/ Sweden /Stockholm Spain /Barcelona Slovakia /Bratislava Russia /Moscow Romania /Bucharest B www.deutsche-leasing.com

London

China /Shanghai

FACTS AND FIGURES ACTING / TOGETHER

Achieving more together: When the entrepreneurial spirit of the SME sector and Deutsche Leasing’s expertise act together, strategies of the future become stories of success. 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

/1 OUR COMPANY

4 Management Board’s letter

10 Supervisory Board’s report

12 GROWING / TOGETHER

12 Sustainable growth: new production capacity for LINDER

16 Reliable partnership: 51 buses for Transdev Rhein-Main GmbH

20 Purchasing trams at a fixed price: to beat the modernisation backlog

24 Building on leasing: a financing alternative for Liebherr customers

28 Liquidity as an export hit: foreign factoring for dealers of motor vehicle parts

/2 CONSOLIDATED MANAGEMENT REPORT

34 Overview for the financial year and outlook

35 Fundamental information regarding the Deutsche Leasing Group

38 Economic report

51 Report on risks and opportunities and forecast report

63 Deutsche Sparkassen Leasing AG & Co. KG

/3 CONSOLIDATED FINANCIAL STATEMENTS

68 Consolidated balance sheet

70 Consolidated statement of profit and loss

72 Notes to the consolidated financial statements

88 Statement of cash flows

89 Statement of changes in equity

/4 GROUP INFORMATION

93 Auditor’s report

94 Shareholders

95 Supervisory Board

97 Management Board

97 Senior Management

100 Corporate Structure

102 Addresses

104 Imprint /1

OUR COMPANY

GROWING COMBINING BUILDING COUNTING RUNNING STICKING BRINGING FLOWING INTEGRATING WORKING LEADING GATHERING FITTING TOGETHER CONNECTING BELONGING PLAYING LIVING COUNTING MEETING BONDING WELDING JOINING STANDING FINDING GOING ACTING

2 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Our company

4 Management Board’s letter

10 Supervisory Board’s report

12 GROWING / TOGETHER

3 2015 /1 2016

OUR GROWING / TOGETHER COMPANY DEUTSCHE LEASING

Kai Ostermann Friedrich Jüngling Chief Executive Ofﬁ cer Management Board member

Rainer Weis Matthias Laukin Management Board member Management Board member

4 2015 /1 2016

OUR GROWING / TOGETHER COMPANY DEUTSCHE LEASING

MANAGEMENT BOARD’S LETTER

Dear clients and business partners of Deutsche Leasing,

In the ﬁ nancial year 2015/2016, we further consolidated our leading position among leasing providers in Germany and Europe. We increased our volume of new business by approx. 5 per cent on the previous year to EUR 8.7 billion. At EUR 148 million, our economic result exceeded the previous year’s positive level.

We achieved these results despite the challenging operating environment in the past ﬁ nancial year 2015/2016. The ﬁ nancial sector is under pressure due to the European Central Bank’s expansionary monetary policy with its historically low interest rate level, to competition in relation to the SME sector, and to regulatory requirements.

The German economy continues to fare well. With a relatively low volume of insolvencies, a high level of employment and solid economic growth, it stood out positively by comparison with the moderate rate of global economic growth. The German leasing market likewise expanded signiﬁ cantly.

This trend is also refl ected in the business development of the Deutsche Leasing Group. Domestic business provided a particularly strong contribution to our growth, while our foreign companies matched the previous year’s level with a new business volume of EUR 1.9 billion. The BRIC countries Brazil, Russia and China registered a lower level of economic output by comparison with the recent past. A slight rise in commodities prices helped to stabilise the situation in Russia and Brazil. Despite its high level by western standards, China’s economic performance was characterised by uncertainty and risks. A positive trend was registered in other countries such as Romania, Spain and France. The diversifi cation of our business – especially outside Germany – paid off once again in the past fi nancial year.

5 /1

OUR COMPANY

The development of the individual business segments was as follows:

| In our machinery and equipment segment, we exceeded the previous year’s ﬁ gure by 4 per cent. Savings bank leasing was an important factor for our success here. We also gained ground in direct business with our customers and in national business with our vendor partners. The new business trend for our foreign companies was stable.

| The road vehicles segment registered signiﬁ cant new business growth of 16 per cent on the previous year. This was due to a considerable increase in the volume of new business for vehicle ﬂ eets and, once again, to the positive new business trend for savings bank leasing.

| Our partnership with a major customer in the information and communication technology segment ended as planned. We thus fell signiﬁ cantly short of the previous year’s ﬁ gure overall here. Adjusted for this one-off factor, we achieved marginal growth in our volume of new business.

| In the energy and transport segment, our volume of new business was shaped by a signiﬁ cant increase of 65 per cent on the previous year. The development of the transport segment in particular was quite dynamic. Several major local public transport projects contributed to this trend.

| In the real estate segment, we completed several large-scale projects in the ﬁ nancial year 2014/2015. New business in the ﬁ nancial year 2015/2016 was affected less by large-scale transactions, resulting in a decline of 34 per cent. In view of the level of volatility in the real estate segment, an extended assessment period is necessary here.

6 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

In addition to our business segments, our investments likewise developed positively and contributed to our successful ﬁ nancial year 2015/2016.

| In the past ﬁ nancial year, Deutsche Leasing established under its umbrella Spar- kassen-Finanzgruppe’s factoring centre of excellence, with a factoring volume in excess of EUR 15 billion. On 30 June 2016, we acquired a majority stake in Deutsche Factoring Bank GmbH & Co. KG with retrospective effect from 1 January 2016 and contributed the activities of our subsidiary Universal Factoring GmbH. We thus offer the savings banks and their customers comprehensive receivables ﬁ nancing and debt management solutions in addition to our range of services designed for the SME sector.

| Bad Homburger Inkasso GmbH (BHI) – an associated company of the Deutsche Leasing Group – offers distressed debt solutions as well as the market-oriented resale of movable and real estate collateral on behalf of its shareholders, the savings banks and other companies and institutions. We achieved signifi cant growth here in the past fi nancial year. With a volume of receivables of EUR 17 billion, BHI has continued to fl ourish. Its number of clients has also increased by 18 per cent, and now exceeds 700. BHI’s customers consist primarily of savings banks and semi-public companies such as municipal utilities.

| S-Kreditpartner GmbH (SKP), a joint venture of Deutsche Leasing and Sparkasse Berlin, focuses on the ﬁ elds of car and consumer loans in Germany. In total, 130 savings banks use SKP’s range of products and services within the scope of a full partnership. Moreover, to date 172 savings banks have entered into partnerships for the new online product “S-Kredit-per-Klick”. SKP also offers ﬁ nancing of sales and purchasing activities for the vehicle industry. As of late 2016, S-Kreditpart- ner’s loan portfolio had increased by 15 per cent to EUR 4.7 billion.

7 /1

OUR COMPANY

The cornerstones of a successful future: the strategic growth areas of the Deutsche Leasing Group

In our strategic growth areas, we emphasise continuity, a long-term approach and targeted ongoing development, particularly in relation to our intragroup business and our specialist segments. As well as the energy and transport segments which are already successful, we intend to adopt a stronger position in the healthcare sector and also in IT project business and to further expand our volume of business. In part, this reﬂ ects our response to megatrends and the resulting demands and business opportunities.

| We are set to further intensify our cooperation with the savings banks. We will thus leverage the market potential of Sparkassen-Finanzgruppe with an even greater focus. A particularly important aspect of this is the management of our relationships with our SME customers together with the savings banks. Here, we will look very closely at our various segments and step up our joint sales activities with the savings banks. We have developed tailored relationship management concepts in order to ensure a high level of satisfaction on the part of the savings banks and their customers. Small ticket business with smaller corporate, business and commercial customers is a particular area of focus for the next few years. We have reorganised our sales activities for individual business that require more extensive consultation services. We are now able to utilise existing intragroup potential more effectively.

| International business is a further growth area. After all, our SME customers have a global presence and a strong export focus, too. This is true for German manufacturers of investment goods, for our international vendors, and for German companies and their foreign subsidiaries in case of direct investments. In foreign business, the partnership between Deutsche Leasing and Helaba has also enabled us to align our international fi nancing and other services more closely with the growing need for foreign investments on the part of the savings bank customers and direct customers of Helaba and Deutsche Leasing, and to systematically develop these services. This partnership provides an important contribution to strengthening the position of Sparkassen-Finanzgruppe in international consulting and fi nancing projects and supplements the established cooperation between the two fi rms.

8 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

| We also see considerable potential in our factoring business. Purchasing of debt is increasingly signiﬁ cant as a product which supplements leasing since factoring represents an indispensable component of the ﬁ nancing mix for a growing number of SMEs. The complementary nature of leasing and factoring results in synergies that affect customer requirements as well as the customer structure. By concentrating factoring activities under the umbrella of Deutsche Leasing, we have established the basis for expanding Sparkassen-Finanzgruppe’s market position in the factoring segment.

| We see further growth potential in the development of our range of services relating to every aspect of the life cycle of leasing assets. This enables us to offer other associated asset services to complement our investment services (asset ﬁ nance), all from a single source. These services include brokerage of insurance by Deutsche Leasing Insurance Services GmbH, leasing products and consulting services, e.g. in relation to the management of vehicle ﬂ eets or, for real estate projects, through our subsidiary DAL Bautec Baumanagement und Beratung GmbH.

In the current ﬁ nancial year we will continue to face a tough operating environment. The low interest-rate phase and its associated adverse impacts on new business, earnings and costs, competition for attractive business with SME customers and uncertainties over the international outlook will continue to preoccupy us. A further factor is the pressure for innovation resulting from ongoing structural change, which is especially driven by digitalisation.

Despite this, due to our market position, our anchoring within Sparkassen-Finanz- gruppe and our focus on our strategic growth areas, we see attractive market opportunities and development potential in the asset ﬁ nance market.

We would like to thank our customers, our partners and Sparkassen-Finanzgruppe for our positive and successful relationship in the ﬁ nancial year 2015/2016. Thanks are also due to all of the employees of Deutsche Leasing worldwide who have provided the basis for another successful ﬁ nancial year with their performance and their commitment.

GROWING / TOGETHER. Within Sparkassen-Finanzgruppe, and with our customers and partners.

Kai Ostermann Friedrich Jüngling Matthias Laukin Rainer Weis

9 /1

OUR COMPANY

SUPERVISORY Alexander Wüerst BOARD’S Chairman REPORT

In accordance with its function and its under- Supervisory Board’s activities standing of its role, the Supervisory Board is continuously, promptly and comprehensively The Supervisory Board’s four regular meetings notifi ed of the company’s development and of im- entailed detailed reporting from the Manage- portant business transactions. All key questions ment Board on commercial and risk policy, concerning the company’s position and devel- outline economic conditions, the fi nancial and opment, strategic and operational planning, risk profi t situation and planning as well as related management and regulatory requirements were discussions. Investment issues, realisation of the extensively discussed. In regular communication Group’s foreign strategy and regulatory require- between the chairman of the Supervisory Board ments were discussed in detail with the Manage- and the chairman of the Management Board of ment Board. the managing shareholder, current operational matters were discussed and strategic planning Issues of particular relevance were followed up was initiated. in greater depth in committee meetings.

Structure of the Supervisory Board The loans and investments committee held detailed discussions concerning risk decisions on As of 30 September 2016, the Supervisory Board commitments beyond the scope of the Manage- consisted of 20 persons, almost all of whom were ment Board’s responsibility as well as risk policy Management Board members of savings banks. issues for the company, and intensively prepared To improve the effi ciency of its operations, the Supervisory Board resolutions in the fi eld of Supervisory Board has established two commit- investments. In the reporting period, the acqui- tees: a loans and investments committee and sition of a majority of the interests in Deutsche an audit committee. The Supervisory Board is Factoring Bank was discussed in great detail. comprehensively notifi ed of the agenda and outcome of meetings of these committees through At a total of three meetings, the audit committee the committee chairman at regular meetings and focused on the following issues: the fi nancial through receipt of the minutes. statements and the summarised management

10 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

report of Deutsche Sparkassen Leasing AG & Co. Following its own audit and discussion of the KG and the Group and also, with the auditor, its fi nancial statements and the summarised man- audit fi ndings, in preparation for the Supervi- agement report with the appointed auditor, the sory Board’s fi nancial statements meeting. The Supervisory Board has approved the auditor’s auditor’s fi ndings concerning the supervisory re- audit fi ndings and has not raised any objections. quirements relating to the audit of the fi nancial The Supervisory Board endorses the fi nancial statements and the summarised management statements presented to it and proposes the ap- report of Deutsche Sparkassen Leasing AG & Co. proval of the fi nancial statements by the share- KG as of 30 September 2016 were extensively holders’ meeting. reviewed. The audit committee also discussed mediumterm equity planning in detail. Proposal for appropriation of profi ts

The Supervisory Board verifi ed the orderliness The Supervisory Board has discussed the pro- of the company’s management and made all posal for appropriation of the profi t for the year decisions which were required of it and which and recommends that the shareholders allo- fell within the scope of its competence. It was cate an amount of EUR 10,283,540.51 out of the involved in decisions of material signifi cance for parent company’s net income for the year of EUR the company and, where necessary, provided its 45,283,540.51 to the non-withdrawable reserves. consent, following an extensive discussion and review process. The Supervisory Board discussed The Supervisory Board would like to thank the with the Management Board the company’s member of the Supervisory Board who retired strategy and resulting measures for realisation during the year under review, Dr Birgit Roos, for of its medium- and long-term goals and provided her valuable service. The Supervisory Board its approval. would also like to express its thanks and recognition to the Management Board and to all of the Financial statements and company’s employees for their sustained com- consolidated fi nancial statements mitment and for all of their work in the fi nancial year 2015/2016. KPMG AG Wirtschaftsprüfungsgesellschaft has been appointed as the auditor and has issued Bad Homburg v. d. Höhe, unqualifi ed auditor’s opinions for the fi nancial February 2017 statement of Deutsche Sparkassen Leasing AG & Co. KG and the Group for the fi nancial year For the Supervisory Board 2015/2016 as well as the consolidated management report. The auditor has notifi ed the Supervisory Board’s audit committee of its audit fi ndings and has discussed them in detail with Alexander Wüerst its members. The audit committee has notifi ed Chairman the Supervisory Board of the outcome of its review of the auditor’s reports and its discussions and has recommended the endorsement of the fi nancial statements and the consolidated fi nancial statements and the presentation of the fi nancial statements to the shareholders’ meeting for approval.

The auditor has provided a comprehensive report on its audit ﬁ ndings at the Supervisory Board’s ﬁ nancial statements meeting and has replied to questions.

11 HOLDING

12 / TOGETHER

A partnership of equals for growth ﬁ nancing

At LINDER, holding together is not just important for its strapping solutions. By standing shoulder to shoulder with Deutsche Leasing, LINDER has also mastered its investment challenges. 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Enabling growth through leasing

When companies pursue growth plans, they should have a wide range of fi nancing solutions available for their investments. Leasing – with its fl exibility, among other advantages – offers a good alternative to fi nancing with equity or loans.

13 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

NEW PRODUCTION CAPACITY FOR LINDER SUSTAINABLE GROWTH

To grow, you need to invest. That much is clear to Patrick Linder. In this context, with the support of Deutsche Leasing, he fi nanced a new production plant for his strapping fi rm LINDER GmbH – and, on the initiative of his asset fi nance partner, also included development funds from the KfW banking group in the fi nancing package.

It’s often the little things that make a big impact. That is especially true of the product range of Linder GmbH. As a specialist for strapping solutions “Made in Germany”, the company ensures, among other things, that every type of product can be delivered to its destination well-secured on pallets or in boxes.

“It used to be steel strips that held pallets together during transportation, but nowadays it’s plastic. Not only is it a lot cheaper, it also doesn’t rust and signiﬁ cantly reduces the risk of injury to people and damage to the packaged goods,” says Patrick Linder, managing partner of LINDER GmbH, which was established in 1951 as a wiring dealer.

In view of this market trend, after establishing a PET line the leading manufacturer of straps “Made in Germany” was now looking to invest in a polypropylene strapping plant. After PET, PP is the second-largest market for extruded straps. This plant would also offer LINDER the opportunity to continue its evolution from a dealer to a manufacturer.

A strong partner for growth ﬁ nancing

LINDER holds a unique global position with its manufacturing of straps made from all imaginable kinds of material (it produces all types of textile and extruded straps) for every industry and every batch size. This family-owned ﬁ rm has doubled its turnover in the last three years.

“To continue with the growth strategy we’ve adopted, we felt it was strategically necessary to adopt a broader base for the ﬁ nancing of our new strapping plant and to bring an additional partner on board.”

Patrick Linder, Managing partner of LINDER GmbH

The company needed investment fi nancing in the form of a tailored solution that offered benefi ts beyond the scope of a traditional fi nancing arrangement, where possible. /1

OUR COMPANY

Patrick Linder soon knew which partner he could Convinced of the advantages rely on to fi nance this growth. In his previous role as a management consultant, he had already “Our tailored leasing concept met LINDER’s met with Deutsche Leasing and held them in investment challenges and included several high regard. Linder: “When it was time to sort out attractive features: a particularly fl exible, term the fi nancing, I got in touch with an old contact option contract specially developed by Deutsche who referred me to our current advisor, Mr Leasing for a period of 96 months; the possibility Schütte. That worked out really well. He pushed of including development funds and the attrac- the project forward with a high level of commit- tive terms which this enabled; and above all, the ment and expertise.” new framework that we thus created beyond the scope of our customer’s relationship with its pri- “Deutsche Leasing’s overall mary bank,” says Holger Schütte, Regional Head of Savings Banks and SMEs at Deutsche Leasing. package was ideal for us as a medium-sized business.”

Patrick Linder, Managing partner of LINDER GmbH

14 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

KfW development funds as a further plus point Leasing ensures a higher volume of reimburse- ment under Germany’s renewable energy act Deutsche Leasing also convinced this client with a special proposal for the inclusion of develop- “In addition to the general advantages of leasing ment funds from the business development bank such as the improved equity ratio, the compensa- Kreditanstalt für Wiederaufbau (KfW) for energy tion scheme for electricity-intensive companies effi ciency. These development funds are avail- will have played a key role in LINDER’s decision able to companies if they achieve energy savings in favour of leasing,” says Schütte. “Unlike of at least 10 per cent through energy effi ciency depreciation, for instance, leasing can be used to measures in their production facilities. Above reduce the gross value added, since it is included all, the integration of KfW development funds in a company’s operating costs. Electricity costs provides LINDER with a clear interest-rate advan- thus automatically increase as a proportion of tage in addition to commitment interest savings the gross value added, and the necessary thresh- for the period between ordering the plant and its old for exemption under Germany’s Renewable commissioning, due to the long delivery time. Energy Act (EEG) is reached faster,” Schütte explains. Under this Act, companies whose For special cases such as this, Deutsche Leas- electricity costs account for a larger share of their ing relies on a broad range of in-house experts gross value added are exempted from payment of for specialist areas such as KfW funding, who the EEG contribution and can thus save valuable are assigned on a case-by-case basis. “KfW was resources. included at the suggestion of Deutsche Leasing. The Deutsche Leasing specialists involved in this A partnership of equals respect helped considerably with the process,” says Linder, pleased. By organising a fi nancing structure beyond the scope of a traditional leasing arrangement, “We assist our customers with the Deutsche Leasing exceeded the expectations of Linder. However, he was particularly impressed drafting of any agreements, and by the partnership based on an equal footing: we also have a strong relation- “Deutsche Leasing and Mr Schütte in particular invested a lot of time in genuinely getting to ship with KfW and can easily get know our business and our investment. That in touch with them.” really helped with the remainder of the process,” says Linder. Holger Schütte, Regional Head of Savings Banks and SMEs at Deutsche Leasing AG Due to the successful partnership, LINDER intends to continue to rely upon Deutsche Leasing’s expertise and services in future. Financing has already been arranged for a further composite plant for the manufacturing of textile straps with two different components. “A partner has to un- derstand us and meet our needs – and Deutsche Leasing does just that,” Linder sums things up.

15 FLOWING

16 / TOGETHER

Connecting cities with a modern bus ﬂ eet

Thanks to Deutsche Leasing’s reliable asset ﬁ nance solution, the interests of three towns in Germany’s Hochtaunus region and Transdev ﬂ ow together optimally, and the same is true of the transport system in these three towns. 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Getting transport projects moving with asset ﬁ nance solutions

Local public transport in Germany will face major challenges over the next few years: Many trams and underground trains are obsolete, and the same is true of bus fl eets. Alternative mobility concepts and a market which is increasingly opening up offer new business opportunities for transport companies. But all of that requires fi nancing. It’s good to know that even large-volume investment projects can be realised through asset-based fi nancing solutions.

17 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

51 BUSES FOR TRANSDEV RHEIN-MAIN GMBH RELIABLE PARTNERSHIP

Urban bus services need to be reliable and attractive, but must be affordable as well. In a Europe-wide invitation to tender, the private company Transdev Rhein-Main GmbH came out on top with an ultramodern ﬂ eet, realised through the partnership between Deutsche Leasing – which is familiar with local public transport – and Taunus Sparkasse.

With around 5,000 employees and an annual turnover of EUR 850 million, Germany’s Transdev Group – a subsidiary of the global mobility service provider Transdev Group S.A., which is headquartered in Paris – is Germany’s leading private provider in the regional rail and bus transport sector. Every year its 40 subsidiaries throughout Germany – including Transdev Rhein-Main GmbH – bring around 250 million passengers to their destinations reliably and comfortably with modern trains, buses and trams.

When the three biggest towns in Germany’s Hochtaunus region – Bad Homburg, Ober- ursel and Friedrichsdorf – were looking for an experienced transport company to operate all of their urban bus lines as a single service provider for the ﬁ rst time, it was only nat- ural for the growth-oriented Transdev Group to take part in the tender, and it made the winning bid on the strength of an attractive offering.

A modern ﬂ eet secured the contract

“The towns were looking for an experienced mobility provider which they could trust completely to look after their urban bus services properly, reliably and to the satisfaction of passengers over a period of eight years,” says Max Kaiser, managing director of Trans- dev Rhein-Main GmbH.

In addition, more attractive public transport services were an essential priority for these three towns. Their goal was to encourage even more passengers to use local public transport in future. To win the contract in this Europe-wide tender, the new service provider needed to offer not only a well-designed and sustainable transport concept, but also an ultramodern vehicle ﬂ eet. Kaiser: “Winning this contract meant that we needed to purchase 51 modern and climate-friendly buses.” /1

OUR COMPANY

A competent partner for complex transport An effi cient, local fi nancing partner on board projects Not only does Deutsche Leasing have the requi- Over the next few years, the Transdev Group site expertise in relation to the forms of fi nancing plans to expand and further consolidate its lead- which are necessary for transport projects. As a ing market position in Germany. Leasing is the Sparkassen-Finanzgruppe company, it can also optimal solution for this, from the point of view rely upon the fi nancial resources of the Spar- of its balance sheet and its fi nancing costs. kassen group. In order to distribute the risk of fi nancing the bus fl eet for Transdev Rhein-Main Since Transdev’s parent company prepares its GmbH over several different shoulders, in this balance sheets according to the capital mar- particular case with Taunus Sparkasse Brocke ket-oriented International Financial Reporting brought on board a further reliable fi nancing Standards (IFRS), an operate lease was the best partner with local roots. form of fi nancing. With this form of leasing, it is the lessor who assumes the residual value risk. The lessee, on the other hand, registers the leasing instalments paid as expenditure.

For Diana Richter, who is based in Berlin for Germany’s Transdev Group and is responsible for choosing suitable banks and fi nancing providers, it was already clear during the preparations for the tendering process that the company needed as its partner an experienced asset fi nance specialist who was intimately familiar with the local public transport sector and had adequate fi nancial resources to handle an eight-fi gure euro investment volume for the overall package.

A fi nancing provider who knows the public The asset competence of Germany’s largest man- transport sector ufacturer-independent leasing provider was also persuasive: The specialists at Deutsche Leasing “Since Transdev and Deutsche Leasing have have a very clear picture of how the value of the already worked together in a trusting relation- vehicles in which their clients invest changes ship for some years now and I already knew from over time, and incorporate this knowledge in previous projects that our advisor Uwe Brocke the contract drafting and risk decision-making and his team had experience of our industry process as a positive factor. Local public trans- and operate with a focus on service, I knew right port expert Uwe Brocke comments: “Thanks to from the start that I would ask Deutsche Leasing our vast experience in the valuation of assets, we to quote me an offer in this case as well,” Diana are able to offer transport companies such as Richter explains. the Transdev Group individual and use-oriented contract solutions.” “With Uwe Brocke, I knew for sure that any commitments made would be fulfi lled 100 per cent,” says the treasury expert. This was an important point for her. “When we win a contract, we need to be able to rely on the fi nancing provider for the guaranteed budget and that the fi nancing arrangement will operate smoothly.”

18 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Efﬁ cient and unbureaucratic contract management

“The demands placed nowadays on mobility solutions are complex and highly individual,” Richter emphasises. “And the greater the level of customisation which we offer in our services, the greater the need for tailored ﬁ nancing services to support this.”

To ensure that the two ﬁ rms’ legal and tax depart- ments could discuss the contents of the contract quickly and reliably, Deutsche Leasing specially assigned an employee to ensure an efﬁ cient and unbureaucratic contract management process. Richter: “I was particularly impressed by the speed and precision with which Deutsche Leas- ing responded to our requirements.”

A partnership doesn’t end with the signing of the contract

Over the next eight years, one thing in particular “When we win a contract, we need is crucial for Transdev: With Deutsche Leasing to be able to rely on the ﬁ nancing as its partner, this business group can focus all provider for the guaranteed bud- of its attention on delivering what’s required of it. The knowledge that it has a reliable partner get and that the ﬁ nancing arran- by its side makes room for new growth projects. gement will operate smoothly.” Beyond its core area of business, the Transdev Group is now also investing in new business Diana Richter, segments such as ticket sales and individual Treasury, Transdev transport-on-demand services.

19 BRINGING

20 / TOGETHER

Financing with full planning security, reconciling the interests of everyone involved Bringing together all of the parties and developing an optimal ﬁ nancing solution for ﬂ eet growth in everyone’s interests – Deutsche Leasing achieved this masterstroke for AVG. 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Semi-public companies: triangular ﬁ nancing

Semi-public companies face a particular challenge for their procurement of new investment goods: They must coordinate their fi nancing decisions not only with the relevant fi nancial institution but also with the local authority, and they must strictly respect this triangular relationship when drafting contracts. Planning security for the entire period makes it easier to opt for the best possible fi nancing solution.

21 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

TO BEAT THE MODERNISATION BACKLOG PURCHASING TRAMS AT A FIXED PRICE

A fi nancing arrangement which takes into consideration the actual period of usage and fi nancing while also offering a risk-free fi xed interest rate – DAL Deutsche Anlagen-Leasing GmbH & Co. KG (DAL), a Deutsche Leasing Group company, was able to fulfi l this request of Albtal-Verkehrs-Gesellschaft mbH (AVG) when this company was looking to purchase 25 new trams.

Federal states, administrative districts, local authorities and transport companies – a whole series of players is involved in the ﬁ eld of local public transport. The federal states which have competence for local public transport services in Germany delegate this responsibility to the local authorities. For their part, the local authorities generally sign transport contracts with transport companies, such as Albtal-Verkehrs-Gesellschaft mbH (AVG), on an autonomous basis.

In Karlsruhe, for instance, AVG and its sister company, Verkehrsbetriebe Karlsruhe (VBK), effectively run the city’s railway, tram and bus services. However, an acute lack of vehicle ﬁ nancing options resulted in a modernisation backlog here. Many rail vehicles had been in use for well over 25 years. “These vehicles were no longer in keeping with current needs for local public transport. That’s why we decided to purchase 25 new trams at the suggestion of the district of Karlsruhe, which is the contracting authority for our transport contract,” explains Dr Alexander Pischon, chairman of the management board of AVG. /1

OUR COMPANY

Leasing offers clear advantages over traditional ﬁ nancing

AVG had originally intended to fall back on a conventional loan for ﬁ nancing, having generally used this option in the past. “However, our savings bank brought along DAL to the meeting and advised us to consider leasing. And DAL convinced us right away,” says Dr Pischon.

In addition to DAL’s vast experience with fi nancing solutions for rail vehicles, its unique terms and conditions were a particularly important factor. Keeping on top of a fl ood of paperwork “DAL won us over with a fi xed Many different players are involved in local leasing instalment throughout public transport projects: In order to realise this the entire term of contract.” investment, it was necessary to sign more than 15 contracts with AVG, the city of Karlsruhe as a Dr Alexander Pischon, shareholder in AVG and thus the key decision- Chairman of the management board of AVG maker, the district of Karlsruhe as a partner in the transport contract and the initial client and also the manufacturer of the new trams – from purchase agreement to surety bonds to the inter- im receipt. “Despite the huge amount of coordi- nation this required, everything went smoothly thanks to Deutsche Anlagen-Leasing, and everyone involved is delighted with the planning security and cost transparency for the coming years,” says Dr Pischon.

Planning security thanks to ﬁ xed purchase prices

This is a particularly critical factor since such acquisitions involve large amounts of money: Just one of these modern vehicles costs more than three million euros. “Our new trams will be state-of-the-art: They offer Wi-Fi for our passengers, accessibility for the disabled and, above all, they ensure an enhanced level of safety,” Dr Pischon explains.

In order to avoid unforeseen costs for what is in any case a large volume of investment, a ﬁ xed purchase price was agreed. “Since DAL was in direct contact with the manufacturer, that helped considerably with the handling process. There were therefore no problems with integrating DAL into the contracts with the manufacturer.”

22 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Convincing asset competence

The positive experience gained through the existing partnership is a particularly important aspect of this.

“Throughout our work together, we were impressed above all by DAL’s outstanding asset competence.” Overall package secures pre-fi nancing Dr Alexander Pischon, Chairman of the management board of AVG The construction of new trams to the latest technical standards requires a long production Thanks to its vast experience, DAL always knew time: The fi rst vehicles will not be delivered until how to optimise cooperation between all of those mid-2018, and the fl eet will be complete in late involved. “The working relationship was already 2019. For this reason, pre-fi nancing played a key very pleasant during the drafting of the contract. role in the planning process: “The term does not In particular, that was due to the strong support begin until the fi rst vehicle is delivered. Until which DAL’s in-house lawyer, Winfried Hagedorn, then, we will only charge interest for the con- provided during the legal consultation pro- struction period,” says Norbert Kulüke, Senior cess. That enabled rapid progress,” Dr Pischon Project Manager at DAL, who advised AVG for this remarks. project. Once the trams arrive, they will be used on routes in the district of Karlsruhe in particular. The fact that a clear DAL contact was available at all times also helped considerably to ensure that Financing of innovative “dual-system vehicles” things went smoothly. “We’re quite excited: We’ve to follow found a partner who is on the same wavelength as us and who always has new ideas and sug- Investment in so-called “dual-system vehicles” is gestions. We’ll gladly continue to work with this planned as the next stage. This has been labelled partner in future,” says Dr Pischon in summary. the “Karlsruhe model”, and AVG has become known for it beyond its local region. The key idea is to combine the inner-city tram network with the region’s railway lines, thus linking up the city centre and the surrounding region without the need to switch vehicles.

With ﬁ nancial support from the German Federal Ministry of Research, AVG developed a dual-system vehicle for mass production which makes it possible to use metropolitan railway carriages on railway lines despite the difference in drive systems, namely 750 volts DC for the metropolitan railway and 15,000 volts AC on the railway lines. Roughly 25 of these trains are already in use, and others will now follow. A leasing solution with the same outline conditions as in the current project is now being prepared with DAL.

23 BUILDING

24 / TOGETHER

Liebherr customers rely on leasing solutions

Together, Liebherr and Deutsche Leasing have developed an attractive ﬁ nancing solution which enables the customers of this construction machinery manufacturer to build a successful future. 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

A dual beneﬁ t through vendor leasing

Small and medium-sized enterprises in particular often require additional forms of fi nancing when purchasing new machinery and equipment. When producers directly market their products with the right fi nancing solution, they offer crucial added value for their customers and distinguish themselves from their competitors. That way, everyone benefi ts – the customer and the manufacturer.

25 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

A FINANCING ALTERNATIVE FOR LIEBHERR CUSTOMERS BUILDING ON LEASING

They hoist materials high up in the air, move huge volumes of soil and drill very deep holes – Liebherr’s construction machinery is used all over the world to move big things. So that its customers can also get more moving done, this manufacturer has introduced a simple concept, e.g. for its mobile cranes: attractive leasing options to ﬁ nance its machines.

One million euros – that’s the average price of one of Liebherr’s mobile cranes. But the cranes of this traditional manufacturer can even quickly reach the ten million mark. This represents a major challenge for small and medium-sized enterprises especially. With their often small balance-sheet totals, they are frequently unable to handle such large investments.

With its tailored fi nancing solution for purchasing these machines, Liebherr offers them an attractive alternative – and thus presents them with an additional purchasing argument. The market leader for mobile cranes relies upon several regular leasing partners for this. Deutsche Leasing is the largest of these partners by volume and has the broadest international coverage. It offers Liebherr sales fi nancing in many different countries, and these partners thus jointly realise individual fi nancing services.

Solutions in line with customers’ requests

The strong demand demonstrates that this cooperation is exactly what customers are looking for: 40 per cent of the global orders which Liebherr’s Ehingen works receives are already realised through leasing or similar forms of ﬁ nancing. “As a valuable, large-volume investment, our product is perfect for leasing. Our customers therefore actively inquire about this type of solution,” says Liebherr managing director Mario Trunzer.

This family-owned ﬁ rm – which owes its origins to the invention of the mobile revolving tower crane – has offered its customers leasing solutions since as far back as the 1990s. Since the late 1990s, it has done so together with Deutsche Leasing. Since then, their cooperation has continually grown; in the last ﬁ ve years alone, the overall partnership with the Liebherr Group has increased by a volume running into the hundreds of millions. 2015 /1 2016

OUR GROWING / TOGETHER COMPANY DEUTSCHE LEASING

A strong international partner Customers benefi t from fl exible solutions A sales advantage with no additional More than just numbers in sight administrative work The strong international focus of the two This strong team consisting of Liebherr and Deut- he recipe for success here involves, in particular, partners – who are both among the pioneers sche Leasing has already provided a number But it’s not only the customers who benefi t from a partnership based on an equal footing: “Our in their respective segments – has played a key of companies – from small businesses to global leasing; Liebherr itself also appreciates the ad- customers are generally SMEs, and at Liebherr role in this trend. Liebherr had already begun to players – with the right fi nancing solutions for vantages: This offering is not only an additional we also think and act like an SME. With Deutsche establish its fi rst companies outside Germany their construction machinery. “With our services, sales argument in a customer meeting, it also Leasing, we therefore have the major advantage before 1960. Today, it has developed a network of we are able to offer Liebherr customers a special minimises the administrative work for Liebherr. of a partner with the same background,” says more than 130 companies in around 50 countries level of fl exibility: partial amortisation solutions, Deutsche Leasing takes care of all of the admin- Trunzer. worldwide. With roughly 25 years of know-how operating leases, and even different instalments istrative tasks for the fi nancing arrangement in international business and subsidiaries in in the summer and the winter – in line with the directly, and generally handles the customer’s This is particularly evident in terms of shared more than 20 countries, Deutsche Leasing like- different phases of building activity – are no order through a declaration confi rming its entry values. “Our companies have the same basic wise has a strong global positioning and offers problem for us,” says Daniel Kempf, Global Ven- into the purchase transaction. values. Respectability and reliability are the hall- its customers local experts who are intimately dor Manager at Deutsche Leasing. marks of our working relationship with our cus- familiar with country-specifi c requirements. “We also offer Liebherr customers supplementary tomers and partners. That is why our strategies Suitable solutions are even available for particu- fi nancing-related services – such as machine fail- are ideally suited to one another,” says Kempf. “Deutsche Leasing is represented larly large investment volumes involving many ure insurance. There’s strong demand for these tens of millions. Through its anchoring within products in many countries, including Germany,” On this basis, a personal and trusting relation- in a large number of countries Sparkassen-Finanzgruppe, Deutsche Leasing can Kempf explains. “Here too, we naturally look ship has developed which has become continu- and has developed its presence also bring on board other fi nancially strong part- after things.” ously stronger over the years. ners. Risk sharing makes it possible to purchase in precisely those markets where multiple assets. With this comprehensive offering, together “In assessing our customers, we need support for the fi nancing Deutsche Leasing and Liebherr can master even Deutsche Leasing doesn’t just of our customer projects. As both complex tasks: “Bespoke solutions for specifi c customers or special scenarios in individual look at the numbers, it looks at of our companies have interna- countries repeatedly present challenges. But we the company as a whole. It’s not tionalised, our partnership has can deal with them just fi ne thanks to Deutsche Leasing. And we’ve also always coped well with about doing a quick deal, it’s likewise developed.” even minor problems such as taking back equip- about a long-term partnership. ment or restructuring our construction machin- Mario Trunzer, Managing director Liebherr ery portfolio,” says Trunzer enthusiastically. We really appreciate that – also for our own relationship with This broad international presence therefore Deutsche Leasing’s vast experience and its played a key role in 2007, when what was initially asset competence play a particularly important Deutsche Leasing.” a fairly loose working relationship was stepped role here: “We know Liebherr’s industries and Mario Trunzer, up to become a fi rm cooperative arrangement. customers very well and we have employees with Managing director Liebherr “Two factors in particular were decisive for us: the many years of experience who are ideally suited positive experience we had in our trustful work- to the requirements of Liebherr’s customers,” ing relationship with the employees of Deutsche Kempf explains. Leasing, and Deutsche Leasing’s competence for foreign business, which supports our inter- nationalisation and also helps our customers to venture abroad,” Trunzer explains.

26 27 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

A sales advantage with no additional More than just numbers in sight administrative work he recipe for success here involves, in particular, But it’s not only the customers who benefi t from a partnership based on an equal footing: “Our leasing; Liebherr itself also appreciates the ad- customers are generally SMEs, and at Liebherr vantages: This offering is not only an additional we also think and act like an SME. With Deutsche sales argument in a customer meeting, it also Leasing, we therefore have the major advantage minimises the administrative work for Liebherr. of a partner with the same background,” says Deutsche Leasing takes care of all of the admin- Trunzer. istrative tasks for the fi nancing arrangement directly, and generally handles the customer’s This is particularly evident in terms of shared order through a declaration confi rming its entry values. “Our companies have the same basic into the purchase transaction. values. Respectability and reliability are the hall- marks of our working relationship with our cus- “We also offer Liebherr customers supplementary tomers and partners. That is why our strategies fi nancing-related services – such as machine fail- are ideally suited to one another,” says Kempf. ure insurance. There’s strong demand for these products in many countries, including Germany,” On this basis, a personal and trusting relation- Kempf explains. “Here too, we naturally look ship has developed which has become continu- after things.” ously stronger over the years.

With this comprehensive offering, together “In assessing our customers, Deutsche Leasing and Liebherr can master even complex tasks: “Bespoke solutions for speciﬁ c Deutsche Leasing doesn’t just customers or special scenarios in individual look at the numbers, it looks at countries repeatedly present challenges. But we can deal with them just ﬁ ne thanks to Deutsche the company as a whole. It’s not Leasing. And we’ve also always coped well with about doing a quick deal, it’s even minor problems such as taking back equip- about a long-term partnership. ment or restructuring our construction machinery portfolio,” says Trunzer enthusiastically. We really appreciate that – also for our own relationship with Deutsche Leasing’s vast experience and its asset competence play a particularly important Deutsche Leasing.” role here: “We know Liebherr’s industries and Mario Trunzer, customers very well and we have employees with Managing director Liebherr many years of experience who are ideally suited to the requirements of Liebherr’s customers,” Kempf explains.

27 WORKING

28 / TOGETHER

Joint factoring solution secures liquidity

Financial resources for smooth day-to-day operations: In close cooperation with the exporter BBR, Deutsche Leasing provides pre-ﬁ nancing for its foreign business liabilities. 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

Factoring protects cash ﬂ ow

Traditional means of raising capital such as equity and debt capital in the form of shares, bonds and loans continue to play a major role for companies. But they are increasingly being supplemented with innovative forms of ﬁ nancing such as factoring. The sale of receivables secures liquidity and protects against default – also for foreign business.

29 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

FOREIGN FACTORING FOR DEALERS OF MOTOR VEHICLE PARTS LIQUIDITY AS AN EXPORT HIT

90 per cent – that is the export ratio of BBR Automotive GmbH, a trading ﬁ rm which operates worldwide and specialises in the import and export of motor vehicle parts for German and European vehicles. When its primary bank unexpectedly made huge cuts to its range of international factoring solutions for the export sector, Deutsche Factoring Bank, a Deutsche Leasing Group company, stepped in at short notice, thus securing the growth of BBR’s foreign business.

North and South America, Oceania and the Far East – BBR’s core markets are far away from its headquarters in the town of Geesthacht, Schleswig-Holstein, in northern Ger- many. This specialist for original, OEM and after-market motor vehicle parts is thus dependent on smoothly functioning foreign business. “With such a large volume of turnover that requires pre-ﬁ nancing, liquidity bottlenecks automatically arise until our accounts receivable are settled,” says Antonio Berlinches, managing partner of BBR. “That’s why we sell our foreign receivables to a factoring institution before the deadline for payment, in order to protect our cash ﬂ ow.”

However, when its primary bank suddenly and unexpectedly withdrew from the global factoring business and only offered solutions for Europe, BBR faced a major challenge: Who would pre-ﬁ nance its turnover in its foreign overseas markets?

A new partner for overseas factoring

“Suddenly, many of our markets with the strongest sales volumes – such as Asia, South America and Africa – were no longer covered by factoring opportunities. That’s why we needed a new partner fast,” says Berlinches. Here’s where Deutsche Factoring Bank entered the picture: Back when BBR was initially looking for a factoring partner, it had pursued discussions with a specialist institution within the Sparkassen group.

“However, due to our closer relationship with our primary bank, we opted to pursue things at the time with a different partner. But our initial discussions with Deutsche Factoring Bank at the time had gone so well that we got back in touch with them right away when our situation changed,” Berlinches explains. And Deutsche Factoring Bank promptly delivered the fast solution that BBR was looking for. /1

OUR COMPANY

“Deutsche Factoring Bank under- Maintaining liquidity with a high volume stood our business model right of warehouse stock

from the start, and its portfolio As the newest member of a well-known export covers many of the countries group with an established tradition stretching which are of relevance to us. We back more than 100 years, BBR offers a full product range from a single source. However, this really appreciate their quick com- does entail a high volume of warehouse stock: To mitment here.” ensure the fastest possible speed of delivery to every country around the world, it keeps more Antonio Berlinches, than 10,000 articles stockpiled at all times at its Managing partner of BBR Geesthacht warehouse, which has more than 3,000 pallets. Much of its capital is thus tied up. “We saw straight away that BBR has a solid customer and market structure and thus fi ts “Companies whose business involves a high perfectly with our portfolio,” remarks Uwe Müller, volume of warehouse stock struggle in particular Managing Director at Deutsche Factoring Bank. with the fact that many banks refuse to consider “A signifi cant factor for BBR is that we also cover inventory holdings as collateral,” says Müller. higher-risk markets such as South America, “But they can only realise turnover through loan- which many competitors don’t offer.” based pre-fi nancing. Yet credit lines are limited. Factoring has proved to be the perfect solution Open cooperation-based factoring for us,” Berlinches explains. For this reason, Ber- linches also advises other companies to sell their At the suggestion of Deutsche Factoring Bank, the receivables. two partners fi nally opted for an open cooperation-based factoring arrangement where pay- “Factoring makes sense when a ments from BBR’s customers are made directly to Deutsche Factoring Bank, but the factoring company fi nds that it’s running customer – i.e. BBR – continues to handle the up against limits with its existing accounts receivable accounting. resources – particularly when it’s Deutsche Factoring Bank fi nances around 80 per looking to open up new markets.” cent of the volume of receivables. This generated suffi cient resources to enable BBR to get its Antonio Berlinches, Managing partner of BBR export business back on solid ground. BBR then signed the contract with Kreissparkasse Herzog- “Factoring offers companies four key advantages: tum Lauenburg. This is one of nearly 300 savings The fi rst of these is liquidity, which generally banks with which Deutsche Factoring Bank has a increases within 24 hours, since the factoring bilateral cooperative arrangement. institution immediately converts the volume of receivables sold into liquidity for the customer. This generates the second advantage right away: 100% protection against default,” says Müller. Profi tability also improves, since options such as discounts can be utilised. Factoring also makes it possible to agree on longer periods for payment, which makes some customer orders possible in the fi rst place. Last but not least, the balance sheet total decreases and the capital ratio thus

30 2015 2016

GROWING / TOGETHER DEUTSCHE LEASING

increases. This in turn often results in an An understanding of business serves as improvement in the company’s rating and thus the basis for the partnership reduces its ﬁ nancing costs. But Berlinches is not only happy with the fac- Safeguarding foreign business toring model itself, he is also quite pleased with the collaboration between the two parties. “We These advantages are crucial for companies with have an outstanding relationship with Deutsche growth plans such as BBR. The motor vehicle Factoring Bank and we wish that we had gotten to parts dealer has realised continuous turnover know them earlier.” growth since it was established ten years ago that has now reached the mid-range, eight-digit Beyond the scope of the original agreement, this ﬁ gures. Berlinches remarks: “To grow, you need li- partnership has now expanded to include fur- quidity, which means that you also need partners ther overseas markets such as Peru, South Africa who can provide this on suitable terms.” That is and Japan, and also Europe. Europe currently the case with Deutsche Factoring Bank. accounts for only ten per cent of BBR’s turnover.

Together, the partners ﬁ rst looked at all of the tar- “With a strong partner by our side, get markets where sales activities were planned and decided where factoring was possible. “Com- we will be able to open up even panies with a high volume of exports are depen- more attractive growth markets dent on the countries where they operate and face a series of risks there, such as an uncertain in future.” legal system,” says Müller. “Factoring is a good Antonio Berlinches, way to completely protect yourself against these Managing partner of BBR risk factors, which are difﬁ cult to assess.” This is also true of BBR. With markets such as South America, the motor vehicle parts dealer operates in territories considered economically uncertain. “Factoring is the perfect solution for our business model,” sums up Berlinches.

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CONSOLIDATED MANAGEMENT REPORT

32 2015 2016

ANNUAL REPORT 2015/2016 DEUTSCHE LEASING CONSOLIDATED MANAGEMENT REPORT MANAGEMENT CONSOLIDATED

Consolidated management report Deutsche Leasing Group

34 Overview for the financial year and outlook

35 Fundamental information regarding the Deutsche Leasing Group

38 Economic report

51 Report on risks and opportunities and forecast report

63 Deutsche Sparkassen Leasing AG & Co. KG

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CONSOLIDATED MANAGEMENT REPORT

Consolidated management report

Financial year 2015 / 2016 Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe

Business performance Opportunities and risk management

| 5.4 per cent increase in the volume of new business | Intact potential for intragroup business (leasing and to EUR 8.7 billion, in an operating environment factoring) as well as international vendor business which remains challenging | Continuous ongoing development of measurement | Significant growth in Germany (intragroup business methods for individual risk types with savings banks, Fleet business segment and | Risk-bearing capacity remains intact in all stress vendor business) scenarios

| Unchanged conservative valuation benchmarks

Earnings position

| Group’s net profit for the year increases to Outlook EUR 68.8 million | Moderate overall economic trend expected, with | Leasing income adversely affected by margin increased risks of a setback pressure and interest-rate level | Market opportunities and development potential | 13.7 per cent increase in equity and strengthening remain attractive in the asset finance market of provisions in accordance with §§ 340f and | Goal of new business growth in excess of overall 340g HGB economic trend | Further increase in net asset value – economic result | Slight strengthening of continuously increasing net at a high level asset value

| Further increase in equity base as well as provisions in accordance with §§ 340f and 340g HGB Net assets and financial position

| Significantly higher consolidated balance sheet total due to first-time consolidation of DFB

| Portfolio structure remains stable

| Solid financing base for further growth

34 2015 2016

ANNUAL REPORT 2015/2016 DEUTSCHE LEASING

Fundamental information regard- communication equipment, real estate, intangible ing the Deutsche Leasing Group assets and large-scale movable assets (such as rail vehicles and energy generation plants) and also factoring. It offers its partners sales financing products as Overview well as dealer purchase finance.

In line with the requirements of its customers, the Deutsche Sparkassen Leasing AG & Co. KG, headquar- Deutsche Leasing Group provides asset-related servic- tered in Bad Homburg v. d. Höhe, is the parent compa- es for the entire investment life cycle. This ranges from ny of the Deutsche Leasing Group. As a financial ser- purchasing of assets via brokerage of asset-related in- vices provider, it is supervised by the German Federal surance to resale of assets and includes, for instance, Financial Supervisory Authority (Bundesanstalt für full-service products as well as a certified return pro- Finanzdienstleistungsaufsicht, BaFin) and by the Ger- cess in the vehicle fleet segment, construction manage- man Bundesbank. ment services for real estate leasing and life cycle management including services and logistics in the IT As one of the leading asset finance and asset service sector. In its factoring and collection segment, the partners in Germany and Europe, the Deutsche Leas- Deutsche Leasing Group offers comprehensive debt ing Group offers investment and financing solutions management services. as well as supplementary services for both fixed and current assets. On the basis of a broad product range Its in-depth asset know-how and its understanding of with solutions both for small-volume investments and specific industry requirements enable targeted ongo- also for individual, complex major projects, it supports ing development and fine-tuning of its range of servic- its customers in their realisation of investment pro- es in line with prevailing market conditions. In particu- jects. The Group’s product range includes leasing as a lar, the goal is to identify early on any segments with core product as well as further financing solutions and relevant investment requirements and to support cus- supporting services. The Deutsche Leasing Group of- tomers during the planning of their investments and fers comprehensive services in its factoring and debt right up their realisation, thus laying the foundations management segments. In terms of its customers, for successful long-term partnerships. Deutsche Leasing – as a central partner of the savings banks – mainly focuses on SMEs in Germany, which it also supports at an international level. Organisation and structure

On 30 September 2016, overall the Group had 2,481 employees in 23 countries. The Deutsche Leasing Group is represented on the market by means of four different business segments, DAL Deutsche Anlagen-Leasing GmbH & Co. KG (DAL), Products and services Deutsche Factoring Bank GmbH & Co. KG (DFB) and also further investments specialising in the asset finance and asset service segments. Companies in 23 The solutions offered by the Deutsche Leasing Group countries in Europe, Asia and America provide an in- continue to mainly comprise leasing and asset financ- ternational platform for the Deutsche Leasing Group’s ing for machinery and equipment, vehicles, IT and services.

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As the market leader in Germany and one of the leading The International business segment focuses on sup- providers of leasing in Europe, Deutsche Leasing con- port for German industrial enterprises as partners for centrates on business-to-business operations with SMEs: sales financing in Germany and other countries. Deutsche Leasing is the solutions provider for invest- Deutsche Leasing offers these vendors and their cus- ments in the SME sector. In combining asset, industry, tomers asset finance solutions in line with local re- service and product competence, the Deutsche Leasing quirements in 23 countries. It also supports customers Group offers its customers a significant advantage. of Deutsche Leasing and the savings banks with their foreign investments through so-called “German desks” Through its Savings Banks and SMEs business segment, established in the foreign companies. Deutsche Leasing serves the market via two different distribution channels: the savings banks and direct Within the Deutsche Leasing Group, DAL offers its cus- distribution. Through its comprehensive distribution tomers finance solutions for long-term and large-scale network, its customers receive competent on-site ad- investments in the following business segments: real vice and support for their investment projects. In addi- estate (including construction management), energy, tion, in cooperation with Deutsche Leasing’s Interna- transport and logistics as well as special products tional business segment the savings banks and their (such as financing solutions for intangible assets and customers receive needs-oriented support for their for- current assets). Within the Deutsche Leasing Group, eign activities through so-called “German desks” in the DAL specialises in the arrangement and structuring of foreign companies. major projects.

Through its Fleet business segment, Deutsche Leasing Deutsche Leasing Finance GmbH offers asset-related offers a range of vehicle-related investment and ser- credit financing (purchasing, rental park, warehouse vice solutions as well as efficient car fleet management financing) for dealers in the construction machinery, for SMEs in Germany especially. As a manufacturer-in- agricultural technology and material handling vehicle dependent full-service provider, Deutsche Leasing de- segments. Deutsche Leasing Finance GmbH also serves velops individual and customer-oriented fleet solu- as a conduit bank for development loans. tions. Through AutoExpo Deutsche Auto-Markt GmbH (AutoExpo), Deutsche Leasing’s reselling company Sparkassen-Finanzgruppe’s factoring centre of excel- which specialises in second-hand cars, returned leas- lence has been established within the Deutsche Leas- ing assets are marketed to private and commercial ing Group through the acquisition of a majority of the purchasers in Germany and other countries. interests in Deutsche Factoring Bank GmbH & Co. KG (DFB), while concentrating factoring activities and sub- Deutsche Leasing serves the market for information ject to the contribution of Universal Factoring GmbH and communication technology (ITK) through the fi- (UFG) to DFB. The savings banks and their customers nancial and services products offered by its Infor mation are offered comprehensive receivables financing and Technology business segment. This segment targets cus- debt management solutions in addition to the range of tomers in the SME sector as well as major companies. At services designed for the SME sector. the end of the leasing contract period, Deutsche Leas- ing’s separate service and logistics centre handles the Bad Homburger Inkasso (BHI) – an associated company processing and resale of assets. Certified data deletion is of the Deutsche Leasing Group – offers distressed debt particularly important. solutions as well as the market-oriented resale of mov-

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able and real estate collateral on behalf of its share- Direct business: With its own network of branch offices, holders, the savings banks and further companies and Deutsche Leasing exploits the market independently, institutions. through direct acquisition. As well as outstanding financing expertise, the Group’s distribution experts S-Kreditpartner (SKP), a Deutsche Leasing investment, have proven know-how in relation to a wide variety of focuses on the fields of car and consumer loans in Ger- industries, asset classes and services. many. It pursues its sales activities by working together with the savings banks; SKP also offers financing of Savings banks: Deutsche Leasing enables the savings sales and purchasing activities for the vehicle industry. banks to access and exploit its full range of services. The savings banks and Deutsche Leasing thus cooper- At Deutsche Leasing Insurance Services GmbH (DL ate to ensure optimal fulfilment of the needs of the sav- Ins), Deutsche Leasing has pooled Group-wide re- ings banks’ customers and for improved exploitation sponsibility for insurance services within a central of existing potential. The savings banks are able to se- entity in order to optimise processes, purchasing and lect from Deutsche Leasing’s broad range of services in product development. It thus intends to step up its line with the specific requirements associated with placement of services (including new services) in or- their concrete business: from standardised product der to leverage existing potential on the market. lines to tailored specialist solutions. Deutsche Leas- ing’s SME-oriented asset finance solutions and asset-related services are thus offered through the sav- Positioning within ings banks on the basis of a close relationship. Sparkassen-Finanzgruppe Moreover, so-called “German desks” have been established in the foreign companies of the Deutsche Leas- ing Group; German-speaking specialists serve here as Within Sparkassen-Finanzgruppe, Deutsche Leasing is on-site contacts for the savings banks and their cus- the centre of excellence for leasing and for other SME- tomers. oriented asset finance solutions such as factoring and also supplementary services. As a central partner and Partners/vendors: By working with partners and ven- the German market leader in the asset finance segment, dors, Deutsche Leasing achieves efficient and early it helps the savings banks to realise their customers’ in- access to customers at the point of sale, thus ensur- vestments both nationally and internationally, through ing broad sales coverage. As a sales financing partner leasing and other asset finance solutions. As well as with an international network, Deutsche Leasing fo- close market cooperation, the savings banks serve as cuses on export-oriented German SMEs as well as ma- Deutsche Leasing’s key financing partner. Overall, 380 jor companies. savings banks are shareholders in Deutsche Leasing, as direct and indirect limited partners. Deutsche Leasing optimally realises existing potential through coordinated exploitation of the market encompassing all of its distribution channels and Distribution channels business segments/investments, particularly in relation to cross-selling opportunities.

Deutsche Leasing exploits its markets through three central distribution channels:

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International presence of the Deutsche Leasing Group

America: Europe: Portugal Asia: Brazil Belgium Romania China Canada Bulgaria Russia USA France Sweden Germany Slovakia United Kingdom Spain Ireland Czech Rep. Italy Hungary Luxembourg Netherlands Austria Poland

Deutsche Leasing Locations

Locations Economic report

Germany is the core market of the Deutsche Leasing Overall economic and industry- Group. Through its foreign network, Deutsche Leasing specific environment also supports German companies’ exports and their international presence. It does so through cooperation with international vendors – mainly in Germany, Aus- The global economic trend was moderate in the finan- tria and Switzerland (“DACH”) – which are able to rely cial year 2015/2016 by comparison with the previous on the financing expertise of Deutsche Leasing’s inter- year, due to headwind effects in the individual eco- national network to support their sales activities; nomic regions. While the industrialised nations Deutsche Leasing also assists German companies’ for- achieved positive economic growth due to the slight eign direct investment programmes as well as the for- rise in the price of oil, which nonetheless remained eign subsidiaries of German companies. Outside Ger- low, the economic output of the emerging markets many, its international network spans 22 further (BRIC countries) remained at a low level by compari- countries in Europe, America and Asia. son with the recent past. In Brazil and Russia, the situation stabilised by comparison with the previous year In the year under review, as well as its headquarters in due to factors including the slight increase in commod- Bad Homburg v. d. Höhe the Deutsche Leasing Group ities prices. China’s economic performance continues had one German branch office, in Berlin, and seven to be characterised by uncertainties and risks, even other German sales offices. The Deutsche Leasing though it remains at a high level by western standards. Group is also represented in its various regions Moreover, in the financial year 2015/2016 weak de- through its investments. mand from China affected the export-dependent economies.

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The United States of America benefited from the price Germany’s key trading partners’ is rather subdued. of oil, which remained low, as well as from cheap fund- German companies continue to show restraint in rela- ing thanks to a key interest rate which remained at a tion to their investments. This has resulted in a predict- historically low level. The first increase in the US key ed rise in plant and equipment expenditures of just 1.6 interest rate since 2006 in December 2015 (0.25 per- per cent (previous year: 4.5 per cent). The forecast is- centage points) resulted in an upward revaluation of sued by the German council of economic experts the dollar, thus restraining foreign demand. points to an increase in gross fixed asset investments of 2.5 per cent (previous year: 2.4 per cent). Europe and the Eurozone especially registered moderate growth without any significant momentum in the In the calendar year 2016, the leasing sector in Germa- past business year. Private consumption and increased ny envisages new business growth of 8.5 per cent. The exports to the United States of America and Japan trend for new leasing business thus clearly exceeds the were the key factors driving this growth impetus. Euro- trend for plant and equipment expenditures (Federal pean companies’ clear investment restraint had a Association of German Leasing Companies (Bun- dampening effect, despite the extraordinarily favoura- desverband Deutscher Leasing-Unternehmen e. V., ble financing terms, continuing low interest rates and BDL, Berlin/ifo Investitionstest). the ECB’s expansionary monetary policy. At the end of the second half of the financial year, uncertainty once Leasing investments in Germany again increased in the business sector due to the hard- EUR million to-foresee consequences of the United Kingdom’s vote to withdraw from the European Union. 70,000 + 8% 64,200 The German economy registered a moderate upturn 60,000 59,200 56,700 which was mainly supported by private consumption. 54,280 53,770 52,410 Higher incomes with consistently low prices were the 50,000 key factors here. The challenges associated with handling the influx of refugees and the associated addi- 40,000 tional (government) spending and investments generated further upward momentum. While the strong 30,000 dollar improved the export outlook, the declining overall economic trend in the emerging markets prevented 20,000 stronger export volumes. Corporate investments remain below average, despite extraordinarily favoura- 10,000 ble financing terms.

0 The German council of economic experts predicts 2011 2012 2013 2014 2015 2016* gross domestic product growth of 1.9 per cent (previ- Calendar year ous year: 1.7 per cent) for Germany in the calendar year Movables Real estate Hire-purchase * Estimate 2016. The German economy’s upturn is expected to Source: Federal Association of German Leasing Companies/ifo investment test continue. Private consumption remains the key growth factor and is also supported by the strong labour market situation. The merely moderate export trend is having a dampening effect since the economic recovery of

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Demand for leasing was largely stable in spite of the New business of the Deutsche Leasing Group persistently challenging economic environment – EUR million particularly on account of the continuing low interest-rate phase, increased use of internal financing 10.000 + 5% capacity for investments as well as companies’ general 8.658 8.218 investment restraint which reflected the imponderable 8.000 7.756 7.852 6.943 7.201 economic and political environment. This documents the continuing attractiveness of leasing and the 6.000 strength of the leasing sector. As the market leader in the asset finance segment, in the financial year 4.000 2015/2016 Deutsche Leasing participated in the general environment in line with its position and achieved a 2.000 level of growth which matched the market’s level.

0 2010 / 2011 2011 / 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 Financial year Business performance of which DAL New business of the Deutsche Leasing Group (2010/2011 excl. SKP) In the financial year 2015/2016, the economic environment of the Deutsche Leasing Group continued to be In the past financial year, domestic business and DAL shaped by extraordinary competitive pressure and in particular made strong contributions to the Group’s margin pressure. This was chiefly due to the ECB’s con- growth. With an increase of 6 per cent, DAL further im- tinuing expansionary monetary policy, with interest proved on its strong result in the previous year. With rates at a historic low and in some cases even in nega- EUR 1.4 billion, it achieved a 17 per cent share of the tive territory. overall volume of new business. The foreign companies matched the previous year’s level, with a new Deutsche Leasing was able to maintain its market lead- business volume of EUR 1.9 billion. This reflected the ership in Germany and its leading position among Eu- different economic trends in the individual countries. ropean leasing providers in an environment which remained challenging. In the financial year 2015/2016 An analysis of new business in the business segments, the Deutsche Leasing Group once again increased its with a breakdown by asset class, shows the following volume of new business, to its current level of EUR 8.7 development: billion, a growth rate of approx. 5 per cent.

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New business by business segment

2015/2016 2014/2015 acquisition values acquisition values Business segment In EUR Share in In EUR Share in Change in per cent million per cent million per cent in relation to previous year Road vehicles 2,084 24 1,794 22 + 16

Machinery and equipment 4,620 53 4,426 54 + 4

Information and communication technology 525 6 651 8 - 19

Deutsche Leasing 7,229 83 6,871 84 + 5

Energy and transport 903 11 546 6 + 65

Real estate 526 6 801 10 - 34

DAL 1,429 17 1,347 16 + 6

Deutsche Leasing Group 8,658 100 8,218 100 + 5

In the past financial year, the road vehicles segment dynamic trend, with the rail sector in particular deliv- registered growth of 16 per cent on the previous year. ering strong growth. However, the energy segment like- This was mainly due to the significant increase in the wise achieved an increase. volume of new business in the Fleet business segment as well as the positive new business trend for savings In the volatile real estate segment, the previous year bank leasing. had been shaped by several large-scale real estate projects. The past financial year was unable to match their With growth of 4 per cent, the machinery and equip- volume. Overall, this resulted in a 34 per cent decline in ment segment exceeded the previous year’s level. Sav- the volume of new business. ings bank leasing, direct business and, in particular, domestic vendor business achieved the strongest growth rates. The foreign companies registered a stable Financial position performance but were unable to match the previous year. EARNINGS POSITION The new business trend in the information and communication technology segment was shaped by the end of In the past financial year, the net profit for the year a partnership with a major customer. Adjusted for this increased by 2 per cent, from EUR 67.4 million to EUR one-off factor, marginal new business growth was 68.8 million, while net income for the year rose by achieved. 6 per cent to EUR 72.5 million.

The energy and transport segment registered signifi- Leasing income resulting from leasing and hire-pur- cant new business growth of 65 per cent on the previ- chase business and including the proceeds of the sale ous year. The transport segment was marked by a very of second-hand leasing assets increased by 2 per cent on the previous year, from EUR 6,508 million to EUR

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6,643 million. This growth in leasing income was pensated for the increased expenses due to regular sal- achieved, despite strong competitive and margin pres- ary increases, scheduled recruitment of personnel and sure, with an expansion of the leasing and hire-pur- strategic future investments (in IT, digitalisation, pro- chase portfolio. Overall the trend for leasing income, cesses and markets) as well as the impact of ever more which corresponds to leasing expenses, scheduled de- stringent supervisory requirements. preciation and interest income, is comparable with the income trend. Depreciation and valuation adjustments on receivables are characterised by additions to the provisions in Leasing expenses increased by approx. EUR 330 mil- accordance with §§ 340f and 340g HGB which are sig- lion. Depreciation and valuation adjustments on leas- nificantly higher than in the previous year. Deutsche ing assets have decreased by almost 5 per cent or EUR Leasing is thus exploiting the extraordinary factors 134 million, from EUR 2,741 million to EUR 2,607 mil- resulting from the disclosure of hidden reserves in lion. In principle, scheduled depreciation on newly ac- connection with the concentration of factoring activi- quired leasing assets included in this amount in the ties in order to strengthen its strategic basis for action. period remains in line with the term of the underlying leasing contracts. Following the high charges in the previous year due to taxation of fictitious profits – on account of factors in- Due to the continuing low interest-rate phase and the cluding non-recognition for tax purposes of economi- associated lower interest-rate level for borrowed funds, cally adequate depreciation in line with the respective interest income improved significantly, from EUR -102 contractual term – the declining taxes on income and million to EUR -68 million. profit reflect the commensurate reverse effects for the tax assessment basis, which had a beneficial impact in The low interest-rate level remained a key factor shap- the period under review. Due to the tax limitation to ing the result for the financial year. It affected the rate economically excessively weak depreciation, the tax of interest for interest-free liabilities tied up in lending position is strongly dependent on the volume of addi- business and the liquid capital base as well as the net tions in a given year and their specific structure – in interest margin contributions achievable on the mar- particular, the contractual terms – without guarantee- ket. As in the previous year, the resale results provided ing economically appropriate recognition of the in- continuously positive contributions due to the con- come effects. servative calculation of residual values as of the conclusion of contracts. The conservative residual value Equity shown in the balance sheet has increased by policy of the past few years in the car contracts seg- EUR 92 million, from EUR 673 million to EUR 765 mil- ment, with open residual values, is a key factor in this lion, alongside the significant increase in provisions in sustained positive trend. accordance with §§ 340f and 340g HGB. Deutsche Leas- ing has thus adhered to its strategy of strengthening its The decline in general administrative expenses mainly equity. reflected the beneficial effect of the change in the law for the calculation of the interest rate for discounting In the past financial year, the net asset value increased of provisions for pensions and similar obligations. The to EUR 1,855 million despite interest rate levels’ contin- thus significantly lower expenses for retirement provi- uing negative effects on margins and costs. The net as- sions and reduced other administrative expenses com- set value is calculated according to the standard devel-

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oped by the Federal Association of German Leasing Economic result of the Deutsche Leasing Group Companies in terms of its structure and substance. The EUR million auditor reviews this value in line with the “IDW audit standard: net asset value calculation auditing for leas- 180 ing companies (IDW PS 810)” issued by the Institute of 160 Public Auditors in Germany, Düsseldorf. The net asset 143 148 140 139 137 value reflects the value of the Deutsche Leasing Group’s 131 128 120 equity, after disclosure of hidden reserves. It is a key 100 element for calculation of the economic result – a rec- 80 ognised, summary ratio indicating period net income 60 for leasing companies. 40

20 Net asset value of the Deutsche Leasing Group 0 EUR million 2010 / 2011 2011/ 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 Financial year + 3%

2,000 For the financial year 2015/2016, the Deutsche Leasing 1,855 1,742 1,793 Group had predicted a volume of new business growth 1,611 1,666 1,600 slightly in excess of the overall economic trend and 1,466 slight growth in its continuously rising net asset value, 1,200 with a further strengthening of equity as well as provisions in accordance with §§ 340f and 340g HGB. This 800 forecast was based on a moderately optimistic predic- tion of its business and earnings trends, according to 400 the prevailing market potential.

0 New business in the financial year 2015/2016 in- 2010 / 2011 2011 / 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 creased by more than 5 per cent due to the moderate Financial year upturn in Europe and especially in Germany. The trends outlined in relation to the › economic situation Allowing for Deutsche Sparkassen Leasing AG & Co. contributed to this growth. New business growth thus KG’s dividend for the financial year 2015/2016, the exceeded the level predicted by the German council of economic result totalled EUR 148 million. Despite an economic experts for the calendar year 2015 and also operating environment which remains challenging, its forecast for the calendar year 2016. The develop- the Deutsche Leasing Group has thus achieved the en- ment of the net asset value also benefited from the visaged level of income so as to guarantee permanent- slightly improving economic situation, with an in- ly appropriate distributions and the implementation crease of 3 per cent. of required future investments and to realise the economically necessary equity trend, in order to support Equity rose from EUR 673 million to EUR 765 million, growth on the basis of its own resources. while EUR 67 million was allocated to the provisions in accordance with §§ 340f and 340g HGB.

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FINANCIAL POSITION Development of financing volume by financing instrument In its financial management, the Deutsche Leasing EUR billion Group seeks to safeguard permanent solvency and to 8.1 cover financing requirements on the best possible 8.0 7.9 terms – with the greatest possible level of independ- 7.0 ence in relation to developments on the financial mar- 6.0 5.8 5.8 kets – with the goal of hedging financial risks 5.0 4.0 3.2 Capital structure 3.0 In the financial year 2015/2016, debt capital borrowed 2.0 1.9 1.0 served to finance leasing assets and other customer 0.4 0.6 business of the Deutsche Leasing Group as well as rais- 0.0 ing the necessary liquid funds for strategic invest- Short-term Medium- and Sales of ABCP, ments, which is of lesser significance by comparison loans, call long-term receivables structured deposits/time loans (incl. (individual financing with overall debt capital borrowing. Borrowed funds of deposits, com- promissory forfaiting) the Group’s domestic and foreign companies (exclud- mercial papers notes) ing DAL’s non-recourse business) increased on the pre- 30/09/2015 (total: EUR 16.0 billion) 30/09/2016 (total: EUR 17.7 billion) vious year, in line with the growth trend for new business and due to the inclusion of DFB. On 30 September 2016, they amounted to EUR 17.7 billion (previous by cut-off date effects and was accompanied by in- year: EUR 16.0 billion). creased issuance of commercial papers. Increased use was made of securitisation-based financing following In almost all cases, funds were borrowed on terms an expansion and adjustment of the structures utilised matching financed customer business in terms of the in accordance with the specific requirements of the capital commitment and fixed interest-rate periods as Deutsche Leasing Group. well as the respective currency. The resulting maturity transformation has not reached any significant level. The funds borrowed generally had original maturities Medium- and long-term borrowing (including promis- of up to six years and fixed-rate agreements which sory note loans) and forfaiting which, as in previous were generated by means of interest rate derivatives years, jointly accounted for more than 80 per cent of where necessary. the total debt capital borrowed remained the key ele- ments of Deutsche Leasing’s financing structure. Bor- As before, derivative financing instruments for man- rowing from business development banks which con- agement of interest and currency risks (mainly interest tinued to register disproportionately strong growth rate swaps) were exclusively entered into for hedging accounted for a significant proportion of the increase purposes. Since the volume, term and capital commit- in loan financing. ment periods of the derivative financing instruments entered into were determined on the basis of the struc- Money market borrowing was mainly for the purpose tures of the underlying customer transactions and bor- of financing short-term requirements for customer rowed funds, risk is effectively covered. A documented, business and operating resources. The growth regis- appropriate and functional risk management system tered as of 30 September 2016 was partly determined is used for these transactions.

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The volume of financing (Germany and other coun- Through its structures implemented for forfaiting and tries, excluding DAL’s non-recourse business) was dis- securitisation-based financing as well as traditional tributed as follows between the financing partners as financing through conventional credit lines, further of 30 September 2016: options were available for debt financing and to safeguard liquidity. Financing volume (Germany and other countries, excluding DAL’s non-recourse business) The Deutsche Leasing Group was able to fulfil its payment obligations at all times in the financial year 2015/2016. 16 % Others Overall, on the basis of its anchoring in Sparkassen- Finanzgruppe, its stable long-term business relationships with credit institutions and a diversified range of 19 % Federal state banks financing instruments, Deutsche Leasing has a solid 65 % financing base for its planned further growth. Savings banks

Within the scope of the statement of cash flows, cash and cash equivalents amounted to EUR 277.9 million at the start of the financial year and to EUR 392.4 mil- The savings banks’ share of total borrowed funds was lion at the end of the financial year. stable at approx. two thirds. The federal state banks’ share increased slightly by comparison with the pre- The cash inflow from current business activities vious year. In particular, this reflected the increased amounted to EUR 225.4 million (previous year: cash volume of money market financing by comparison inflow of EUR 55.1 million), while the cash outflow with the balance-sheet date. The share accounted for from investment activities amounted to EUR -75.9 by other institutions was stable. In particular, this in- million (previous year: EUR -18.6 million). EUR 35.0 cluded financing by public business development million was distributed to the shareholders in the year banks. under review.

Liquidity Contingent liabilities under suretyships and guarantee In the past financial year, Deutsche Leasing main- agreements amounted to EUR 258.5 million at the end tained a broadly diversified debt financing structure, of the financial year (previous year: EUR 273.3 million). in terms of the number of financing partners and the On the balance-sheet date, irrevocable loan commit- financing instruments used. Financing reserves re- ments were valued at EUR 212.8 million (previous year: mained at a high level in the financial year 2015/2016, EUR 105.1 million). despite the increase in borrowed funds on account of business growth. As of 30 September 2016, Deutsche Leasing’s “free liquidity” was in excess of EUR 3.0 billion.

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NET ASSET SITUATION Development of consolidated balance-sheet total EUR million Deutsche Leasing’s consolidated balance sheet total + 13% increased by 13 per cent or EUR 2.1 billion, from EUR 20,000 18,682 16.6 billion to EUR 18.7 billion at the end of the year 15,891 16,190 16,589 under review. In particular, this resulted from the first- 16,000 15,507 24 % 14,458 time consolidation of Deutsche Factoring Bank GmbH 25 % 23 % 23 % 24 % & Co. KG. 12,000 24 %

Leasing assets, measured at initial values, amounted 8,000 to EUR 16.9 billion and were thus at the same level as in the previous year (EUR 16.6 billion). Leasing assets 4,000 measured at residual carrying amounts – which remain a key element of the consolidated balance sheet total – 0 had the following structure on 30 September 2016, 2010 / 2011 2011 / 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 with a breakdown for individual business segments: Financial year

% share accounted for by foreign business

Leasing assets measured at 2015/ 2016 2014 / 2015 Change residual carrying amounts In EUR Share in In EUR Share in In EUR Share in Business segment million per cent million per cent million per cent Machinery and equipment 5,330 54 5,003 52 327 7

Road vehicles 3,120 31 2,910 31 210 7

Information and communication technology 926 9 1,111 12 - 185 - 17

Real estate 149 2 134 1 15 11

Energy and transport 421 4 400 4 21 5

Total residual carrying amounts 9,946 100 9,558 100 388 4

Stable portfolio structure transactions) amounted to 41.0 per cent of the balance The breakdown by business segments and central sheet total (previous year: 37.0 per cent). The leasing asset items in proportion to the balance-sheet volume business of foreign subsidiaries generally involves developed as follows: The residual carrying amounts hire-purchase contracts, in accordance with the Ger- of leasing assets accounted for 53.0 per cent of the man Commercial Code, and is therefore reported in consolidated balance sheet total (previous year: 57.6 receivables from customers. Assets in foreign subsidi- per cent). Receivables from customers (mainly hire- aries represent 24 per cent of the consolidated balance purchase receivables and receivables from banking sheet total.

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Structure of assets as of 30 September 2016 The financial position of the Deutsche Leasing Group is unchanged and remains solid. Due to its anchoring in Sparkassen-Finanzgruppe and its long-term busi- 6 % Other assets ness relationships with credit institutions, Deutsche Leasing has a solid and broadly diversified financing base, including in relation to its planned future growth. 41 % Receivables from customers The parent company reported net income for the year 53 % of EUR 45.3 million. This provides the basis for the Leasing assets proposal to leave the distribution to the shareholders unchanged at EUR 35.0 million (previous year: EUR 35.0 million), in line with the adopted equity strategy. GENERAL STATEMENT BY THE MANAGEMENT Deutsche Leasing thus continues to adhere to its sus- BOARD ON THE ECONOMIC SITUATION tainable dividend policy, at the same level as in the past few years. Overall, in the financial year 2015/2016 the earnings position of the Deutsche Leasing Group developed in Distribution trend line with the expectations of the Management Board, EUR million despite an economic environment which remained tough, increased competition and margin pressure and companies’ continuing investment restraint. On 40.0 35 35 35 35 35 this basis, the Group continued to strengthen its equity 30.0 27 and its provisions in accordance with §§ 340f and 340g 20.0 HGB on a long-term basis. 10.0

0.0 At EUR 148 million the Group’s economic result – a 2010 / 2011 2011 / 2012 2012 / 2013 2013/ 2014 2014 / 2015 2015 / 2016* recognised ratio indicating period net income for leas- Financial year ing companies – reached its high target level; the net * Proposal asset value thus increased by EUR 62 million to EUR 1,855 million. Deutsche Leasing thus achieved its in- The net asset, financial and earnings position of the come and capital goals through its sustainable busi- Deutsche Leasing Group remains in good order. ness and risk model. New business, which was already at a high level, achieved further growth and reached a volume of EUR 8.7 billion.

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Financial and non-financial As well as equity, the net asset value includes the earn- performance indicators ings potential/profit contributions of future profit and loss accounts on the basis of the portfolio as of the key date, established by means of prior offsetting of ex- FINANCIAL PERFORMANCE INDICATORS penses (declining interest-rate trend, start-up costs from acquisition and advance depreciation, by com- Deutsche Leasing continues to be managed on the parison with their straight-line leasing instalment basis of a Group-wide integrated logic which focuses equivalents) and calculated profits in a given portfolio. on the development of new business as well as its net asset value and equity, with due consideration of While the net asset value calculation plays a less prom- risk-bearing capacity. inent role than the financial statements, it is a materially essential precondition for an overall assessment New business and serves as an indicator of a leasing company’s risk The development of new business is a key factor in the coverage potential, as determined on a value-oriented Deutsche Leasing Group’s activities. New business basis. At the same time, as a financial measure of total comprises all of the transactions confirmed within a equity a company’s net asset value is used for financ- specific reporting period, including the total historical ing purposes, i.e. it is mainly used to provide liquidity costs for all associated investment assets from leasing, for the company. hire-purchase, investment loans and the services stipulated under service agreements as well as the average The net asset value calculation is a necessary supple- level of recourse to credit lines within the scope of ment to the profit and loss account prepared in accord- dealer purchase finance. ance with commercial law and the basis for a general indication of net income realised within a given peri- On the development of new business, please refer to od. This is referred to as the economic result for the pe- the › “Business performance” chapter. riod. Deutsche Leasing calculates this figure throughout its Group on the basis of the industry standard Net asset value developed by the Federal Association of German Leas- The net asset value calculation is used as necessary ing Companies. supplementary information in addition to the financial statements prepared in accordance with German On the development of the net asset value, please refer commercial law for leasing companies. It enables the to the › “Earnings position” chapter. disclosure of hidden reserves and hidden liabilities as well as future earnings potential resulting from the Equity volume/portfolio entered into. It is thus able to tran- To ensure adequate economic foundations for its growth scend the inherent weaknesses associated with a profit objectives and as cover against possible unexpected and loss account prepared according to commercial risks, Deutsche Leasing is continuing to strengthen its law (periodisation, inevitable establishment and re- equity base on an ongoing basis (including provisions lease of hidden reserves) and to avoid the potential in accordance with §§ 340f and 340g HGB) through its mismanagement which may result from a one-sided own resources. profit and loss account focus. On the development of equity, please refer to the › “Earnings position” chapter.

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NON-FINANCIAL PERFORMANCE INDICATORS The average period of employees’ membership of the company in Germany amounted to approx. 11.1 years As well as a sustainable business model, well-qualified, (previous year: 10.5), with an average age of 44.8 years motivated and committed employees both in Germany (previous year: 44.1). The fluctuation rate amounted to and other countries and a high level of attractiveness 3.9 per cent (previous year: 4.5 per cent) and the sick- as an employer are critical to the business success of ness level to 5.3 per cent (previous year: 4.3). the Deutsche Leasing Group. A performance-oriented remuneration system links The dedication and expertise of Deutsche Leasing’s individual employees’ goals with the company’s strate- employees are vital to its success in ensuring a high gic objectives and thus provides an additional frame- level of satisfaction on the part of its customers and work for the company’s consistent management. partners. Through comprehensive qualification and training measures, employees and managers are sup- In view of the demographic trend, transparent labour ported in their career and personnel development. Key markets and regional factors (such as the “Rhine-Main areas of focus are a customer orientation, teaching banking sector”), a company’s attractiveness as an em- sales skills and strengthening advisory and asset fi- ployer is increasingly important. In the past financial nance expertise. Moreover, for international business year, structured and future-oriented qualification, de- employees also require linguistic and intercultural velopment and retention of employees and the expan- skills. sion of the company’s “employee self service” scheme to include advanced training management were key All of Deutsche Leasing’s employees set great store by priorities for Deutsche Leasing’s human resources ac- its corporate culture and its central values of “trust”, tivities. “team spirit”, “passion” and “commitment”. On the basis of these values, a cultural process has been estab- On the basis of our employees’ in-depth expertise and lished throughout the Group, so as to prepare it for the many years of experience, numerous projects and stra- future. The four cornerstones of this culture – “Assum- tegic realignments were initiated and successfully im- ing real responsibility”, “A market orientation”, “A fo- plemented within the company in the period under re- cus on getting things done” and “Learning from errors” view. A key factor in this success was the early and – play a key role in the company’s targeted and contin- target-oriented inclusion of the affected employees, uous, ongoing development. This cultural process un- who operated with a high level of commitment and dergoes continuous development, with the involve- dedication as multipliers, ambassadors and specialists ment of every employee. This corporate culture is the on behalf of “their project”. Getting involved – in the key foundation of the Deutsche Leasing Group’s suc- sense of assuming genuine responsibility – is a key ele- cess and represents the basis for an improvement in ment of our corporate culture development process. the level of customer and employee satisfaction. This was encouraged, in particular, through the work- shops held in the teams in the reporting period. Employees On the balance-sheet date, the Deutsche Leasing Group Deutsche Leasing is aware that it is necessary to ap- had a total of 2,481 (previous year: 2,312) employees, of proach ever faster and increasingly complex cycles which 473 outside Germany (previous year: 470). of change professionally and confidently, as a basic precondition in order to ensure a company’s future viability. Deutsche Leasing organises its initial training, its dual courses and its programmes for trainees

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and young and upcoming managers on the basis of a employees have demonstrated commitment to social far-sighted approach within the context of its corporate projects on their own initiative through this scheme. strategy, and does so with outstanding results. This is A large number of projects were once again realised in an investment which pays off. In the period under re- the financial year 2015/2016. Deutsche Leasing pro- view, Deutsche Leasing was able to fill management vides financial support for these projects and also positions internally with former apprentices and assists them by granting leave to participating employ- trainees. ees. Moreover, the “SAM prize for voluntary work” supports charities’ projects in which Deutsche Leasing Deutsche Leasing currently has 8 trainees (previous employees serve in a voluntary capacity in their spare year: 10). The company’s initial training programme is time. currently offering 26 apprentices a career in office administration and also, through dual courses, appren- Deutsche Leasing continues to support and to assist ticeships leading to a Bachelor of Arts degree in Inter- a large number of organisations and associations national Business Administration (in partnership with through donations and funding. the accadis university of applied sciences) or a degree in Business Administration with an integrated bank Deutsche Leasing is also actively dedicated to sports officer apprenticeship. After successfully completing funding, such as the German sport aid foundation their training or courses of study, all of Deutsche Leas- (Stiftung Deutsche Sporthilfe). As part of Sparkassen- ing’s trainees, apprentices and students enrolled on Finanzgruppe, Deutsche Leasing is also an “Olympics Bachelor degree programmes were offered full-time Partner for Germany” and thus supports the German employment positions. Olympics team, the Paralympics team and also Germa- ny’s sports badge and elite sports school schemes. Safeguarding a joint concept of leadership on the basis of Deutsche Leasing’s cultural objectives and its man- In the financial year 2015/2016, together with Spar- agement model was another core area of focus. 23 kassen-Kulturfonds des Deutschen Sparkassen- und managers participated in Deutsche Leasing’s Leader- Giroverbandes, Frankfurter Sparkasse and Kultur- ship Development Programme (LDP) for new manag- fonds RheinMain Deutsche Leasing sponsored the ers. Around 60 managers regularly took part in the exhibition “Maniera. Pontormo, Bronzino and the company’s “manager boards”, as a platform for dia- Florence of the Medici” at Frankfurt’s Städel Museum, logue and for dealing with current management is- as a particularly outstanding regional highlight of na- sues. tional significance. Deutsche Leasing also supports a large number of cultural initiatives, such as through its Social commitment commitment to the “Blickachsen” sculpture exhibition As an important member of Sparkassen-Finanzgruppe, in Bad Homburg v. d. Höhe. Particularly notable is Deutsche Leasing lives up to its social responsibility in Deutsche Leasing’s relationship of several years’ stand- various ways, for example through commitments to art ing with the Rheingau Music Festival in the form of a and culture, science, social issues and sport. premium partnership. The Rheingau Music Festival has enriched the region’s cultural scene for many years Besides purely financial initiatives, many Deutsche now, with almost 150 concerts at over 40 venues every Leasing employees also show a high level of social en- summer. gagement through the company’s “Socially Active Em- ployees” (SAM) scheme. Since 2011, Deutsche Leasing

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Deutsche Leasing is also active in science funding and Report on risks and opportunities provides assistance for a wide range of research pro- and forecast report jects conducted by various institutions. Deutsche Leas- ing’s long-standing membership of the funding association for the University of Cologne’s leasing research Report on opportunities institute documents the company’s intensive relationships with universities. In addition, the lectures and forums supported by Deutsche Leasing and its mem- Deutsche Leasing seeks to identify opportunities at the bership of Sparkassen-Finanzgruppe’s science funding earliest possible moment, to assess these opportunities association ensure an active exchange between the and to take suitable action so that these opportunities realms of theory and practice. can be transformed into commercial success.

As an inherent component of its annual medium-term Subsequent events planning, organic growth opportunities are systematically evaluated, starting with a comprehensive analysis of the market environment. Market potential, customer There were no reportable events in the period from 30 requirements as well as general and specific market September 2016 up to the Management Board’s prepa- and environment developments, trends and also com- ration of the consolidated financial statements. petitors and regulatory requirements undergo a detailed analysis. The goals and business activities defined in the company’s business strategy on the basis of its “Strategy 2020” and the goal achievement measures thus determined in accordance with the company’s risk strategy serve as the basis for medium-term planning for the financial years 2016/2017 to 2018/2019 of the Deutsche Leasing Group. These strategies are reviewed and (if necessary) adjusted every year.

Deutsche Leasing sees growth opportunities in the following areas in particular:

INTRAGROUP BUSINESS

Intragroup business with the savings banks is considered to offer significant growth prospects. This business segment is undergoing a continuous process of intensification and development, in close cooperation with the savings banks and with the structural involve- ment of regional associations and advisory boards. This will enable the exploitation of the existing market potential offered by Sparkassen-Finanzgruppe. SME

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customers are supervised together with the savings sector’s global presence offers market opportunities banks on a target group-oriented basis. This is rounded for the Deutsche Leasing Group which it accesses off by means of segment-oriented sales management. through its foreign network in 22 countries.

To ensure a high level of satisfaction on the part of the Within Sparkassen-Finanzgruppe, through its Inter- savings banks and their customers, specific support national business segment Deutsche Leasing serves concepts have been developed in accordance with their as an international asset finance and service centre individual requirements. Business with smaller corpo- of excellence. rate, business and commercial customers is a particular area of focus for the next few years. The existing customer service centre (CSC) is to provide increased FACTORING sales support for the savings banks and will be expanded to become a specialised advisory team for standard- Deutsche Leasing sees considerable potential in the ised small ticket business. factoring business. Purchasing of debt is increasingly significant as a product which supplements leasing, This planned business development is underpinned since factoring represents an indispensable compo- by efficient processes and systems. For small ticket nent of the financing mix for an increasing number of business, credit and contract processes are combined SMEs. Due to the complementary product characteris- within a specialised unit (encompassing multiple busi- tics of leasing and factoring, there are also synergies ness segments) for transaction volume-based bulk affecting customers’ requirements and also the business. This unit supports the business segments Group’s customer structure. through standardised, system-supported and cost-efficient procedures and services. Factoring activities have been pooled by merging Uni- versal Factoring GmbH and Deutsche Factoring Bank SME and savings bank sales will be pooled for im- GmbH & Co. KG, in order to provide a significant, long- proved exploitation of existing synergy potential for term boost for the continuous ongoing growth of fac- individual business requiring a high volume of advice. toring business and for Sparkassen-Finanzgruppe’s factoring business market share. In future, this will provide more comprehensive market exploitation for INTERNATIONAL BUSINESS the savings banks’ corporate customers and for their significant commercial customers. Deutsche Leasing sees international business as repre- senting an additional growth field. Here, it supports German companies in their foreign investments as INSURANCE well as vendors in their international sales markets. Deutsche Leasing sees further growth potential in the Due to its strong export focus and the German economy’s development of its activities in the field of insurance international presence, Deutsche Leasing also provi- brokerage, which it offers as a supporting service in its des international support for its customers through its business segments. To leverage existing potential, its foreign network. In concrete terms, Deutsche Leasing insurance services have been strategically pooled enters into partnerships with international vendors within a central organisational unit. and assists German companies and their foreign subsidiaries with direct investments. The German business

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Risk report The goal of opportunities and risk management is to establish a balanced relationship between risk and opportunity/income at the level of the overall Group; Risk management supports the management of the adequate risk-bearing capacity is ensured in terms of Deutsche Leasing Group in the implementation of its the relationship between the level of capital available business and risk strategy and considers all relevant for risk coverage and overall risks. The risk-bearing ca- risks and all of the Group’s German and foreign com- pacity calculation provides the basis for the Deutsche panies. Leasing Group’s risk control strategy.

Centralised Risk Management coordinates holistic, Deutsche Leasing endeavours to continuously develop company-wide risk management for all types of risk. its risk measurement methods, so as to comply with This department has technical competence and re- the requirements for modern risk management as well sponsibility for methods and models of risk measure- as current regulatory trends. In the financial year ment, control and aggregation, for calculation of 2015/2016, the following individual risk types under- risk-relevant parameters, for internal risk control and went changes from a methodological point of view: for internal and external reporting. translation risk and currency risk. A variance-covari- ance method is now applied in order to calculate the This department also performs the risk controlling value at risk (VaR) for both of these risk types. Moreo- function prescribed in the minimum requirements for ver, methodological and technical improvements have risk management (Mindestanforderungen an das been made for the residual value risk for cars. Risikomanagement, MaRisk). The head of the Central Risk Management department is responsible for the risk controlling function. RISK-BEARING CAPACITY

Risk reporting provides quarterly reporting on the de- The risk-bearing capacity concept is based on the risk velopment of risk-bearing capacity (RBC) and all key coverage potential calculated in line with the net asset risks. In addition, an ad hoc reporting procedure has value and a going-concern approach, with a confi- been established for information which is significant dence level of 99 per cent. In addition, a deduction item in terms of risk aspects. Action recommendations for is maintained for coverage of rare loss categories. This risk control are also provided. is based on a risk calculated with a higher level of confidence (99.95 per cent). Due to the inclusion of the new The management receives support and advice in its investment Deutsche Factoring Bank GmbH & Co. KG, decision-making on risk-related issues through the the risk bearing capacity (RBC) of the Deutsche Leasing central risk board of Deutsche Leasing. Information Group as of 30 September 2016 was slightly higher concerning the various risk types is jointly presented than the figure for the previous year; the Deutsche in this monthly committee. Leasing Group’s risk bearing capacity remains clearly intact. Internal Audit regularly audits the Deutsche Leasing Group’s risk management within the scope of its audit Limits apply for all relevant quantifiable risk types/ plan. categories within the framework of the risk-bearing capacity concept. Overall, the risk coverage capital is currently sufficient so as also to be able to cover further risks in future.

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Risk bearing capacity concept of Deutsche Leasing

Future tax burden

Strict secondary condition: Deduction The deduction item measured with a item for rare confidence level of 99.95 % may not loss events exceed the remaining buffer (buffer > 0). (99.95 %) Risk-bearing capacity

Risk Net asset econ. risk99 % Buffer value coverage RBCA = < 1 RCC potential A (RCP)

Available Free limit Limit utilisation RCC RCC used econ. risk (RCCA) 99 % LU = < 1 (RCCGC) Economic risk RCCGC 99 %

LA = limit utilisation; RCC = risk coverage capital; RCCA= available risk coverage capital; RCCGC = risk coverage capital used; RBC = risk-bearing capacity; RBCA = risk-bearing capacity as of cut-off date; GC = going concern. The buffer varies in accordance with the development of the net asset value and the level of risk exposure.

The risk types credit and asset risk, market price risk, RISK INVENTORY operational risk, business risk and translation risk are determined on the basis of VaR methods. The risks de- Within the scope of the regular risk inventory, materi- termined through a historical stress test and a serious ality analyses have been performed for all of the risks hypothetical stress test (as the aggregate of risk type- identified, enabling clear categorisation of risks as ma- specific stress results) were covered by the risk cover- terial and non-material. All quantifiable risks which age potential. Risk-bearing capacity was thus intact in may be usefully limited by means of the available risk all stress scenarios. The historical stress test is a mac- coverage capital (RCC) are included in the RBC calcula- roeconomic stress test covering multiple risk types. tion. This is based on the historical scenario of the situation in the financial year 2008/2009 and reflects a serious economic downturn, as required by the minimum re- CREDIT RISK quirements for risk management. Credit risk is the risk of non-fulfilment of agreed pay- In the financial year 2015/2016, risk-bearing capacity ments or services under contracts concluded, resulting and capital requirements planning once again formed in a loss for Deutsche Leasing. The credit risk compris- a component of the planning process of Deutsche Leas- es the following risk categories: ing, which involved inter alia a review of the VaR limits. These limits were adjusted for subsequent years; in | Customers’ credit risk: Customers’ credit risk refers overall terms, the total VaR limits assigned have main- to the risk of the customer failing to make the pay- ly increased due to the inclusion of Deutsche Factoring ments agreed under the leasing, hire-purchase, Bank GmbH & Co. KG in the equity investment risk. rental and loan agreements or related service contracts concluded with it on account of its default.

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Risks at Deutsche Leasing

Risk types

Market price Liquidity Operational Investment Business Other Credit risk Asset risk risk risk risks risk risk risks

Customers’ Residual value Funding-spread Interest rate risk Risks resulting Investment risk Business risk Translation risk credit risk risk - cars risk from internal procedures, Counterparty Residual value Currency risk Purchasing risk people or sys- Reputation risk risk risk - EQUIP tems as well as external factors Residual value Country risk (including le- Strategic risk risk - ICT gal and validity risk) Lessor risk Liability risk

Risk categories: material risk material risk which cannot be usefully limited through RCC non-material risk

| Counterparty risk: Counterparty risk refers to the ual value risk refers to the risk of a loss in the event of risk of the default of a professional market partici- the selling price realised on the asset at the end of the pant (counterparty) in relation to investments, period negatively deviating from the previously calcu- credit balances, foreign exchange transactions lated and anticipated selling price, the residual value. and derivatives (with the replacement risk and the fulfilment risk considered separately). | Country risk: Country risk refers to the risk of losses MARKET PRICE RISK arising on account of crisis situations for individual countries which result due to political or economic Market price risk refers to the general risk of unexpect- events. Country risk applies in the form of transfer ed losses due to a change in market parameters (inter- risk and sovereign risk. est rates, share prices, exchange rates, commodity | Lessor risk: Lessor risk refers to the risk of suffering prices and resulting variables). At Deutsche Leasing, losses due to the customer asserting rights under market price risk is limited to interest rate risk and rental agreements upon non-fulfilment of service currency risk. providers’ contractually agreed services.

LIQUIDITY RISK ASSET RISK Liquidity risk at Deutsche Leasing covers the following Asset risk (also referred to as residual value risk) applies risk categories: purchasing risk and funding-spread for contracts with open residual values. In such con- risk. Purchasing risk is the risk of Deutsche Leasing be- tracts, the historical costs for the asset are not fully am- ing unable in future to dispose of or borrow sufficient ortised through the lessee’s agreed instalments. Resid- liquid funds to fulfil its payment obligations. Fund-

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ing-spread risk is the risk of an unanticipated loss re- | Translation risk: Translation risk refers to the risk of sulting from changes in Deutsche Leasing's refinanc- the foreign-currency net asset value of the foreign ing curve because new borrowing is only possible at companies leading to unanticipated losses due to refinancing levels which are significantly higher than exchange-rate fluctuations. expected. Increased funding spreads result from a de- | Reputation risk: Reputation risk refers to the risk terioration in Deutsche Leasing’s credit rating or a gen- of losses in the event that the reputation of the eral worsening of borrowing terms, on grounds relat- Deutsche Leasing Group suffers harm or deterio- ing to the market itself. rates. Such losses may also result, directly or indi- rectly, from other risk types which have material- ised or may amplify these other risk types. OPERATIONAL RISK | Strategic risk: Strategic risk refers to the risk of unanticipated losses resulting from poor manage- Operational risk is the risk of losses due to the inade- ment decisions in relation to the business-policy quacy or failure of internal procedures, people or positioning of Deutsche Leasing Group. systems as well as external events. This definition | Liability risk: Deutsche Leasing is exposed to a liabili- includes legal risk and validity risk. ty risk in terms of the risk of losses resulting from its position as an owner or importer of assets.

EQUITY INVESTMENT RISK

Equity investment risk is the risk of unanticipated Risk management for relevant risks losses in the event of the market value of an investment falling below its carrying amount. CREDIT RISKS

BUSINESS RISK Customers’ credit risk Deutsche Leasing calculates the value at risk for cus- Business risk describes the risk of business develop- tomers’ credit risk on the basis of a credit portfolio ment yielding lower income and/or higher costs than model on the 99 % quantile. envisaged and in this respect the depletion of the net asset value at the end of the monitoring period by The credit worthiness structure of Deutsche Leasing’s comparison with the current risk coverage potential own-risk exposure improved in the financial year 2015/ as of the reporting date. 2016. The proportion of top credit ratings was higher than in the previous year. A similar trend for the top credit ratings was apparent outside of Germany. OTHER RISKS As of 30 September 2016, the Group’s portfolio by sec- Other risks cover the risk of an unanticipated loss tor remains characterised by a high level of granularity which cannot be allocated to credit risk, asset risk, and thus no specific risk concentration. No sector ex- market price risk, liquidity risk, operational risk, ceeds the limits laid down in the risk strategy. equity investment risk or business risk. Other risks include the following risk types:

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Following a decline in the volume of default in the the risk-bearing capacity calculation in the 99 % quan- previous year by comparison with the calculated risk tile for the first time. This resulted in a clear increase in costs, this decline in the volume of default increased the country risk. The individual countries are assigned in the financial year 2015/2016. limits and these limits are monitored for operational management of country risks. Counterparty risk The value at risk for counterparty risk is determined on the basis of the same credit portfolio model which is ASSET RISKS applied for customers’ credit risk. Asset risk is calculated for the car portfolio by means of As a rule, Deutsche Leasing only accepts banks as a portfolio model, on the basis of the 99 % quantile. On counterparties, as business partners whose credit risk the other hand, the loss potential in the equip portfolio is slight or virtually excluded. In accordance with the is determined by means of an expert assessment. risk principles for transactions with banks, the risk volume for credit balances, investments, foreign ex- The road vehicles business segment continues to change transactions and derivatives is limited through consistently utilise conservative residual value assess- maximum limits and maturity periods in accordance ments in line with market norms and transfers residu- with the credit rating and size of the counterparties. al value risks to solvent third-party guarantors in some A balanced credit rating structure focusing on the cases. A high proportion of premium brands in the upper to medium investment-grade segment and a contract portfolio is ensured. Diversification of makes, strongly diversified portfolio have thus been safe- models and resale channels and continuous support guarded. for contract management have a significant impact on the level of success in reselling vehicles. Country risk Deutsche Leasing calculates the value at risk for the Ongoing monitoring of the leasing and second-hand country risk on the basis of an expert-based scenario car market, stringent use of all available asset manage- approach for the assessment of losses on the 99 % ment instruments, professional development of sales quantile. and organisational structures and processes at Auto- Expo and resale analyses which differ in terms of vehi- The potential losses upon realisation of a specific cle types and sales channels provide a solid basis for country risk event – such as a foreign exchange trans- sound residual value management. The residual value fer restriction – are modelled and determined for assessment is regularly reviewed by means of external selected countries. For quantification of the risk po- asset-based testing (EurotaxSchwacke GmbH). Positive tential, the determined losses are included for those reselling results were once again achieved in the finan- countries which are of particular relevance for cial year 2015/2016, partly thanks to the markdown of Deutsche Leasing on account of current or persistently residual values in the new business segment in previ- negative trends and their risk relevance in its country ous years. In almost all cases, the transaction prices ac- portfolio. tually realised exceeded the figures assumed by external market observers. In the financial year 2015/2016, In the financial year 2015/2016, as well as the “foreign on grounds of caution Deutsche Leasing also slightly exchange transfer restriction” scenario for Russia due reduced the residual values for new business on mod- to the negative developments in Brazil an “extreme el-specific grounds, in order to avoid future portfolio currency depreciation” Brazil scenario was included in risks.

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With adequate valuation methods in its machinery and not pursue any own-account trading of money and capi- equipment business segment, Deutsche Leasing has tal market products. solid foundations for control and management of the risk resulting from open residual values. Residual val- To a limited extent, interest rate risks are entered into ue quotations are exclusively handled by specialised in order to realise additional income resulting from employees in its asset management department. market trends, within the scope of original financing requirements, and are managed by means of a stringent The results of expiring contracts featuring open resid- limit system. ual values were once again positive in the financial year 2015/2016. The agreement of terms and condi- In terms of currency risks, customer transactions al- tions of use and return on a case-by-case basis has had ways have same-currency financing. Currency risks a positive effect on the technical condition of assets therefore apply only temporarily (if at all) during opera- leased under operating leasing contracts. Due to geo- tional execution of transactions or through margin com- political crises and related economic uncertainty, de- ponents of customer receivables which are not secured mand for second-hand assets in good condition re- through same-currency financing. mained strong in all market segments. The applicable rules for control of market price risks In its information and communication technology busi- are based on the above-mentioned principles and ness segment, in particular Deutsche Leasing handles consistently limit the scope of the risk position which is operating leasing contracts with larger SME customers permissible for optimisation of financing costs through and major customers. A calculation of residual values interest rate and currency risk limits in line with the on the basis of conservative benchmarks enabled addi- economic risk. This limit is linked with sensitivity limits tional revenues through contract extensions or sales. for operational control of interest rate risk. These clearly exceeded the calculated values. In view of the continuing stable situation on the IT market in a) Interest rate risk Germany and the high-quality structure of its SME and Interest rate risks are subject to operational monitor- major customers with strong credit ratings, Deutsche ing and control on the basis of sensitivities (basis point Leasing once again envisages sustained positive busi- value concept), with corresponding limitations of the ness development in the financial year 2016/2017. The permitted interest rate-induced changes in present val- contribution margins realised show that the Group has ues in line with the control guidelines. For calculation succeeded in exploiting the income opportunities of the economic risk and for operational control pur- available from entering into risks associated with re- poses, VaR calculations are performed for open inter- sidual values and follow-up business expectations. est rate positions. These calculations are based on the This is largely attributable to professional and focused variance/co-variance method and apply differentiating asset management. assumptions concerning the holding period of the open interest rate position and the inclusion of equity as a component of the financing portfolio. MARKET PRICE RISKS b) Currency risk In line with the basic principle that financing activities In Germany, foreign currency risks are limited to a few provide for congruent interest rate-optimised financing transactions mainly executed in US dollars and (in a of customer business, the Deutsche Leasing Group does small number of cases) in British pounds, all of which have same-currency financing. The foreign subsidiar-

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ies’ operating business is likewise financed in the same ships with savings banks and with other credit insti- currency in principle. Transactions not denominated tutions (including business development banks) and in the euro or in the respective national currency are increased the scope of available financing lines. At generally also denominated in US dollars. The risks of the end of the financial year, following coverage of exchange range fluctuations which are inherently as- the increased financing requirement due to new busi- sociated with such transactions generally apply in re- ness growth these free lines amounted to more than lation to those margin components included in receiv- EUR 3.0 billion and thus exceeded their target levels. ables from customers that are not used for financing provided, as a rule, in the same currency. These curren- Economic risk resulting from funding-spread risk is cy risks are measured by means of the value-at-risk quantified on the basis of scenario analyses. This is method. implemented according to sensitivity calculations (liquidity basis point value concept) on the basis of the extension requirements for borrowed funds resulting LIQUIDITY RISK from the maturity structure for future liquidity inflows and outflows. The business activities and the continuing growth of Deutsche Leasing Group are also based on permanent availability of liquidity and financing through opti- OPERATIONAL RISKS mised interest rates. Deutsche Leasing thus adheres to the principle of financing its business at matching ma- In principle, operational risks may result from any com- turities. mercial activities and are thus inherent in the business activities of the Deutsche Leasing Group and are par- The guidelines applicable for liquidity control reflect ticularly dependent on the complexity of products and this basic conservative orientation and limit the scope processes. Systematic risk management enables early of the risk position which is permissible for optimisa- identification of these risks and implementation of tion of financing costs. In relation to insolvency risk, suitable control measures to avoid or limit them. the limits defined for the liquidity risk refer to nominal minimum requirements for free liquidity. In regard to The risk management process encompasses regular the funding-spread risk, the limits are based on the risk identification and quantification in all depart- economic risk resulting from liquidity mismatches ments of the company and an analysis of loss events and are broken down into nominal position and sensi- actually arising. Moreover, an annual “risk analysis” is tivity limits at the operational level. conducted to prevent other criminal acts which might jeopardise the Deutsche Leasing Group’s net asset situ- In concrete terms, as a reflection of insolvency risk ation. This identifies, analyses and evaluates potential liquidity risk is controlled and monitored through gateways for internal and external criminal activities. liquidity planning which distinguishes between vari- Deutsche Leasing focuses in particular on the early ous planning periods. identification of new types of fraud and on how to prevent them. Overall, in the past financial year (and also due to the ECB’s continuing expansionary monetary policy) a Deutsche Leasing has outsourced selected corporate high volume of liquidity remained available on the functions to other companies in accordance with § 25b financing markets. In this market environment, KWG. A regular risk analysis is performed in case of Deutsche Leasing continued to expand its relation- outsourced activities. This assesses the nature, scope,

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complexity and risk content of outsourced processes. Leasing has established reserves in line with §§ 340f A risk analysis is performed prior to the conclusion of and 340g HGB; it has also established significant hid- a new outsourcing agreement or in case of changes to den risk provisions due to advance expenses typical an existing outsourcing agreement. This risk assess- of the leasing business. ment is used to determine whether outsourcing is material or immaterial from the point of view of risk. The Through the amendment of § 253 (2) Clause 1 HGB assessment method applied for this purpose includes and § 253 (6) Clause 2 HGB, distributions have been risk-sensitive assessment criteria and distinguishes expressly barred in the German Commercial Code in between the materiality assessment and the assess- relation to beneficial effects resulting from an exten- ment of the service provider. sion of the period for determination of the average interest rates for the valuation of pension provisions. The lawmaker has not included a supplementary pro- EQUITY INVESTMENT RISK, BUSINESS RISK, vision in the German Stock Corporation Act (Aktienge- TRANSLATION RISK setz, AktG) also barring the payment of this amount. This has given rise to legal uncertainty in relation to The equity investment risk is determined using risk the execution of profit and loss transfer agreements weightings prescribed according to regulatory require- and recognition of tax group status in the event of ments for equity investment exposures. The business non-payment of the amount barred for distribution. risk is estimated on the basis of historical deviations in In accordance with the opinion of the main committee the actual values of relevant components of the com- of the Institute of Public Auditors in Germany (report pany’s business performance in relation to their target of the 244th meeting of the main committee), Deutsche values. The translation risk is measured by means of a Leasing has decided to prepare the financial state- VaR approach. These risks are likewise restricted by ments of the subsidiary companies for which a bar on specifying limits within the scope of the RBC concept distributions applies pursuant to § 253 (6) Clause 2 and are monitored and controlled by means of inter- HGB without including a bar on payments, so as not to nally prescribed processes. jeopardise recognition of tax group status.

Overall, no special business model-related risks ex- OTHER RISKS (LITIGATION AND LEGAL RISKS) ceeding the normal level of risk and jeopardising going-concern status are discernible for the Deutsche The potential risks for the Deutsche Leasing Group Leasing Group. arising from current litigation are fully covered through provisions.

In summary, subject to unchanged conservative valuation benchmarks Deutsche Leasing has made appropriate provision for all discernible risks in its consolidated financial statements. Non-scheduled depreciation, provisions and valuation adjustments remain adequate and are calculated according to conservative benchmarks. In addition, Deutsche

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Forecast report for the Deutsche Leasing operates in a market environment Deutsche Leasing Group which is characterised by a continuing low interest- rate phase with related adverse impacts on new business, earnings and costs. Moreover, competition with The German council of economic experts predicts a banks and leasing companies for SME customers’ at- moderate global economic trend for the calendar year tractive business remains strong. These customers 2017. In the developed economies, the central banks’ themselves have large liquidity and capital cushions. highly expansionary monetary policy is expected to continue to provide growth momentum. In the United For the financial year 2016/2017, in view of the eco- States of America in particular, gradual economic nomic predictions outlined above Deutsche Leasing growth should be assumed on this basis, mainly un- assumes marginally positive growth for the overall derpinned by private consumption. With a stabilisa- economic environment. However, heightened setback tion of commodities prices, the outlook for the emerg- risks continue to apply. Moreover, for the next few ing markets will likely improve and their economic years a low interest-rate level must be expected which performance will firm up. In China, the council of eco- will have a continuously adverse impact, since a turna- nomic experts likewise anticipates a stabilisation due round in the ECB’s interest-rate policy is not foreseea- to the raft of measures implemented by the Chinese ble at the present time. Deutsche Leasing envisages a government to support demand. World economic volume of new business growth slightly in excess of growth of approx. 2.8 per cent is expected. the overall economic trend and a slight increase in its continuously rising net asset value. The Group will The council of economic experts assumes that the re- continue to strengthen its equity and its provisions in covery in the Eurozone will continue at a moderate lev- accordance with §§ 340f and 340g HGB. el, triggering growth in overall economic output for the third consecutive year. Overall, growth of 1.4 per cent is In view of its market position and its anchoring within predicted, which will once again mainly be supported Sparkassen-Finanzgruppe, Deutsche Leasing continues by the ECB’s expansionary monetary policy. The possi- to see attractive market opportunities and development ble effects of the “Brexit” vote and the consequences of potential in the asset finance market. On the basis of the United Kingdom’s withdrawal from the European its central strategic orientation, Deutsche Leasing sees Union may have a dampening impact on trade effects. key growth impetus above all in intragroup business with the savings banks, the further expansion of small In Germany, the council of economic experts assumes ticket business, intensified support for its vendor part- that the pace of the upturn will slow slightly, since here ners, international business, factoring and marketing too uncertainties apply in connection with the United of insurance services. In its focus on its long-term earn- Kingdom’s impending withdrawal from the European ings target, it continues to adhere to the conservative Union, which may dampen German companies’ invest- risk policy of the Deutsche Leasing Group. ments. In 2017, growth will thus continue to be underpinned by private consumption, supported by high Deutsche Leasing would like to thank its customers, its real income growth, a favourable labour market situa- partners and Sparkassen-Finanzgruppe for their positive tion and a price level which remains low. With the and successful relationship in the financial year 2015/ gradual recovery of the economic trend in the key sales 2016. Thanks are also due to all of the employees of markets, the upturn will also be buoyed by exports. Deutsche Leasing worldwide who have provided the Gross domestic product growth of 1.3 per cent is thus foundations for another successful financial year on predicted. the strength of their performance and their commitment.

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Deutsche Sparkassen Leasing AG & Co. KG

Fundamental information Leasing income resulting from leasing and hire-pur- regarding Deutsche Sparkassen chase business – including the proceeds of the sale of Leasing AG & Co. KG second-hand leasing assets – increased by EUR 43 million, from EUR 4,483 million to EUR 4,526 million, Deutsche Sparkassen Leasing AG & Co. KG is the parent in the financial year 2015/2016 and was thus almost company of the Deutsche Leasing Group. Deutsche 1 per cent higher than in the previous year. This in- Sparkassen Leasing AG & Co. KG essentially pursues the crease reflected an expansion of the portfolio which same type of business, in the same operating environ- was recognised in current income. ment, as the Deutsche Leasing Group. Please refer to the › “Fundamental information regarding the Deutsche Overall, the trend for leasing income-related leasing Leasing Group” chapter for further details. In the year expenses, scheduled depreciation and interest income under review, it had one branch office in Berlin. This is comparable with the income trend. handled risk decision-making and processing of a portion of new and existing business in the Savings Depreciation on leasing assets decreased by 5 per cent Banks and SMEs business segment. On 30 September or EUR 114 million, from EUR 2,439 million to EUR 2016, it had 35 (previous year: 35) employees. 2,325 million. In principle, scheduled depreciation on newly acquired leasing assets included in this amount in the period remains in line with the term of the un- Economic report derlying leasing contracts.

The overall economic and industry-specific environ- Due to the continuing low-interest phase and the asso- ment presented in the › “Economic report” chapter and ciated lower interest-rate level for borrowed funds, in- business performance are largely consistent with terest income once again improved significantly, from those of Deutsche Sparkassen Leasing AG & Co. KG. EUR -65 million to EUR -56 million.

The low interest-rate level remained a key factor shap- Earnings position ing the result for the financial year. It affected the rate of interest for interest-free liabilities tied up in lending business and the liquid capital base as well as the net In the financial year 2015/2016, net income for the year interest margin contributions achievable on the market. amounted to EUR 45.3 million (previous year: EUR 45.4 million), with a further strengthening of the equity General administrative expenses increased slightly in base and a further increase in the provisions in accord- the financial year 2015/2016. The amendment in the ance with §§ 340f and 340g HGB. law concerning the interest rate calculation for discounting of the provisions for pensions and similar obligations has resulted in significantly reduced expenses for retirement pensions. This effect has largely compensated for the higher costs in connection with

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strategic packages of measures as well as the increased come provides the basis for the proposal to distribute expenses for wages and salaries resulting from regular a dividend to the shareholders in the amount of salary increases and recruitment of personnel. EUR 35.0 million (previous year: EUR 35.0 million). Deutsche Leasing thus continues to adhere to its sus- Equity has increased by EUR 11 million, from EUR 616 tainable dividend policy of the past few years, while million to EUR 627 million. Deutsche Leasing is contin- complying with its adopted equity strategy. uing to pursue its strategy of strengthening its equity and has also made further allocations to its fund for The net asset, financial and earnings situation of general banking risks in accordance with § 340g HGB Deutsche Sparkassen Leasing AG & Co. KG remains in and is thus exploiting the extraordinary factors result- good order. ing from the disclosure of hidden reserves in connection with the concentration of factoring activities in The economic situation outlined in the › “General state- order to strengthen its strategic basis for action. ment by the Management Board on the economic situation” chapter is largely consistent with the economic situation of Deutsche Sparkassen Leasing AG & Co. KG. Financial position

Financial and non-financial performance The financial position outlined in the › “Financial posi- indicators tion” chapter is largely consistent with the financial position of Deutsche Sparkassen Leasing AG & Co. KG. The performance indicators outlined in the › “Financial and non-financial performance indicators” chapter are Net asset situation largely consistent with the performance indicators of Deutsche Sparkassen Leasing AG & Co. KG.

The total assets of Deutsche Leasing increased by EUR On the balance-sheet date, Deutsche Sparkassen Leas- 726 million by comparison with the previous year and ing AG & Co. KG had a total of 1,304 (previous year: amount to EUR 11.5 billion. 1,267) employees. For further information, please refer to the › “Employees” chapter. The net asset situation remains mainly shaped by leasing assets as well as receivables from customers. Leasing assets, measured at initial values, amounted Subsequent events to EUR 14.1 billion and thus matched the previous year’s level (EUR 14.0 billion) The key events occurring after the balance-sheet date are outlined in the › “Subsequent events” chapter. General statement by the Management Board on the economic situation

Deutsche Sparkassen Leasing AG & Co. KG reported a net income for the year of EUR 45.3 million. This in-

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Report on risks and opportunities and forecast report

Report on risks and opportunities Forecast report

Risks and opportunities and the processes for hand- In general, Deutsche Sparkassen Leasing AG & Co. KG ling risks and opportunities at Deutsche Sparkassen is subject to the same factors as the Deutsche Leasing Leasing AG & Co. KG are largely analogous with those Group in relation to its envisaged business develop- applicable for the Deutsche Leasing Group. Please refer ment. Please refer to the › “Report on risks and opportu- to the › “Report on risks and opportunities and forecast nities and forecast report” chapter for further informa- report” chapter. tion and figures.

Bad Homburg v. d. Höhe, 14 December 2016

Deutsche Sparkassen Leasing AG & Co. KG represented by its general partner

Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft

Ostermann Jüngling Laukin Weis

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Consolidated financial statements CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED

68 Consolidated balance sheet

70 Consolidated statement of profit and loss

72 Notes to the consolidated financial statements

88 Statement of cash flows

89 Statement of changes in equity

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Consolidated balance sheet as at 30 September 2016

Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe

Assets

As at 30/09/2016 As at 30/9/2015

EUR EUR TEUR

1. Cash reserves a) Cash in hand 51,244.83 49 2. Receivables from credit institutions a) Due daily 392,335,059.75 277,859 b) Other receivables 55,510,675.68 447,845,735.43 31,835 3. Receivables from customers 7,666,635,163.22 6,139,046

4. Equities and other non-fixed interest securities 804,522.59 797 5. Investments 168,426,531.77 154,317 of which: in credit institutions EUR 148,263,833.29 (previous year: TEUR 135,146) 6. Shares in affiliated companies 13,431,344.98 13,688

7. Leasing assets 9,946,290,217.75 9,557,685

8. Intangible assets a) Concessions, industrial property rights acquired for consideration and similar rights and assets and licenses for such rights and assets 21,383,934.72 16,458 b) Goodwill 60,829,815.11 603 c) Advanced payments 3,824,819.88 86,038,569.71 3,237 9. Property, plant and equipment 98,309,215.30 101,125

10. Other assets 242,733,746.35 280,924

11. Prepayments 11,199,071.90 11,011

12. Surplus resulting from offsetting of assets 153,295.58 0

Total assets 18,681,918,659.41 16,588,634

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Equity and liabilities

As at 30/09/2016 As at 30/9/2015

EUR EUR TEUR

1. Liabilities owed to credit institutions a) Due daily 931,417,008.72 647,467 b) With agreed maturity or notice period 10,474,614,926.16 11,406,031,934.88 9,113,323 2. Liabilities owed to customers a) Other liabilities aa) Due daily 502,951,459.15 89,105 ab) With agreed maturity or notice period 450,283,480.24 953,234,939.39 514,757 3. Liabilities evidenced by certificates a) Issued bonds 465,700,000.00 382,500 4. Other liabilities 310,211,674.04 374,567

5. Deferred income 4,334,090,257.37 4,395,188

6. Provisions a) Provisions for pensions and similar obligations 110,007,807.39 104,815 b) Provisions for taxation 8,002,465.24 25,746 c) Other provisions 118,159,445.10 236,169,717.73 112,758 7. Subordinate liabilities 16,595,111.30 0

8. Fund for general banking risks 195,000,000.00 155,000

9. Equity a) Called-up capital subscribed capital/ equity shares of limited partners 240,000,000.00 240,000 b) Reserves 349,683,347.45 336,217 c) Differences from currency translation 15,474,517.05 14,549 d) Shares of minority interests and unconsolidated subsidiaries 90,956,210.59 15,210 e) Net profit for the year 68,770,949.61 764,885,024.70 67,432 Total equity and liabilities 18,681,918,659.41 16,588,634

1. Contingent liabilities Liabilities under suretyships and guarantee agreements 258,503,787.09 273,337 2. Other obligations Irrevocable loan commitments 212,767,700.05 105,085

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Consolidated statement of profit and loss for the period from 1 October 2015 to 30 September 2016

Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe

2015 / 2016 2014 / 2015

EUR EUR EUR TEUR

1. Leasing income 6,643,355,549.52 6,508,171

2. Leasing expenses - 3,550,981,914.75 3,092,373,634.77 - 3,221,203

3. Interest income from a) Credit and money market transactions 94,723,815.14 98,931 4. Interest expenses - 162,928,687.01 - 68,204,871.87 - 200,552

5. Current income from a) Investments 14,558,610.91 10,015 b) Shares in affiliated companies 4,915,897.21 19,474,508.12 905 6. Income from profit and loss transfer agreements 7,118,190.36 3,494

7. Commission income 26,353,149.94 17,795

8. Commission expenses - 23,776,932.09 2,576,217.85 - 18,944

9. Other operating income 280,291,240.28 301,380

10. General administrative expenses a) Personnel expenses aa) Wages and salaries - 177,950,141.91 - 170,778 ab) Social security contributions and expenses for retirement pensions and - 29,400,001.13 - 207,350,143.04 - 36,895 other benefits of which: for retirement pensions EUR 2,911,915.74 (previous year: TEUR 11,749) b) Other administrative expenses - 116,828,369.80 - 324,178,512.84 - 120,074 11. Depreciation and valuation adjustments on a) Leasing assets - 2,607,362,204.01 - 2,740,595 b) Intangible assets and property, plant and - 13,035,130.60 - 2,620,397,334.61 - 14,539 equipment 12. Other operating expenses - 208,031,158.89 - 237,059

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2015 / 2016 2014 / 2015 EUR EUR EUR TEUR

13. Depreciation and valuation adjustments on receivables and specific securities and allocations to provisions for leasing and loan business of which: - 100,204,767.00 - 68,560 expenses for allocation to the fund for general banking risks pursuant to § 340g HGB EUR 40,000,000.00 (previous year: TEUR 41,000) 14. Income from write-ups on investments, shares in affiliated companies and securities treated as non-current assets 436,723.80 4,117 15. Expenses from profit and loss transfer agreements - 1,109,825.29 - 2,471

16. Profit on ordinary activities 80,144,044.68 113,138

17. Extraordinary profit a) Extraordinary income 13,917,500.00 276 b) Extraordinary expenses 0.00 13,917,500.00 - 77 18. Taxes on income and profit - 19,988,347.79 - 41,543

19. Other taxes, not included under Item 12 - 1,586,614.74 - 3,095 20. Net income for the year 72,486,582.15 68,699

21. Profits attributable to minority interests and unconsolidated subsidiaries - 3,720,436.06 - 3,397 22. Losses attributable to minority interests and unconsolidated subsidiaries 4,803.52 2,130 23. Net profit for the year 68,770,949.61 67,432

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Notes to the consolidated financial statements for the financial year 2015/2016

Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe

General disclosures Group of consolidated companies

As a financial services provider, Deutsche Sparkassen As well as Deutsche Sparkassen Leasing AG & Co. KG, a Leasing AG & Co. KG has prepared its consolidated total of 98 subsidiaries have been incorporated in the financial statements for the financial year ending 30 consolidated financial statements. By comparison with September 2016 in accordance with commercial law the previous year, five subsidiaries were included in provisions (§§ 290 ff. of the German Commercial Code the group of consolidated companies for the first time (Handelsgesetzbuch, HGB)), the supplementary pro- and three subsidiaries were deconsolidated while one visions for credit institutions and financial services subsidiary was merged with another. providers (§§ 340 ff. HGB) as well as the provisions of the German Accounting Ordinance for Banks and Deutsche Sparkassen Leasing AG & Co. KG has acquired Financial Services Providers (Verordnung über die a majority interest in Deutsche Factoring Bank GmbH Rechnungslegung der Kreditinstitute und Finanz- & Co. KG (to 18 August 2016: DEUTSCHE FACTORING dienstleistungsinstitute, RechKredV). The company BANK Deutsche Factoring GmbH & Co. KG), Bremen. makes use of RechKredV forms 1 (balance sheet) and Deutsche Factoring Bank GmbH & Co. KG offers factor- 3 (vertical-format profit and loss account). ing services. As a credit institution, it is subject to the provisions of the German Banking Act (Kreditwesenge- Due to the parent company’s legal form, equity is pre- setz, KWG) and is supervised by the German Federal sented in deviation from the requirements stipulated Financial Supervisory Authority. Universal Factoring in the RechKredV forms. The components of the com- GmbH, Essen, merged with Deutsche Factoring Bank pany’s reserves are not disclosed separately. GmbH & Co. KG in the past financial year. Disclosures have been provided for the individual items to ensure Where disclosures may be provided either in the comparability with the consolidated financial state- consolidated balance sheet or in the notes to the con- ments for the previous year. solidated financial statements, they are provided in the notes to the consolidated financial statements. The subsidiaries which are of minor significance for an assessment of the net asset, financial and profit situation − even collectively − have not been consolidated and have not been valued according to the equity method.

A total of twelve associated companies have been valued using the equity method.

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The parent company has the following key investments:

Name of the company Registered office of the company Equity share in per cent

Germany Deutsche Leasing AG Bad Homburg v. d. Höhe 100.0 Deutsche Leasing Baden-Württemberg GmbH Stuttgart 100.0 Deutsche Leasing Finance GmbH Bad Homburg v. d. Höhe 100.0 Deutsche Leasing Fleet GmbH Bad Homburg v. d. Höhe 100.0 Deutsche Leasing für Sparkassen und Mittelstand GmbH Bad Homburg v. d. Höhe 100.0 Deutsche Leasing Information Technology GmbH Bad Homburg v. d. Höhe 100.0 Deutsche Leasing International GmbH Bad Homburg v. d. Höhe 100.0 DAL Deutsche Anlagen-Leasing GmbH & Co. KG Mainz 99.8 AutoExpo Deutsche Auto-Markt GmbH Fernwald 100.0 Bad Homburger Inkasso GmbH Bad Vilbel 47.4 BHS Bad Homburger Servicegesellschaft mbH Bad Vilbel 100.0 Deutsche Mobilien Leasing GmbH Bad Homburg v. d. Höhe 100.0 Deutsche Mobilien Vermietungsgesellschaft mbH Bad Homburg v. d. Höhe 100.0 Deutsche Objekt-Leasing GmbH Bad Homburg v. d. Höhe 100.0 S-Kreditpartner GmbH Berlin 33.3 Deutsche Factoring Bank GmbH & Co. KG (to 18 August 2016: Bremen 53.0 DEUTSCHE FACTORING BANK Deutsche Factoring GmbH & Co.)

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Name of the company Registered office of the company Equity share in per cent

Other countries

Deutsche Leasing Austria GmbH Vienna 100.0 Deutsche Leasing Benelux N.V. Antwerp (Berchem) 100.0 Deutsche Leasing Bulgaria EAD Sofia 100.0 Deutsche Leasing Canada (Del.), Inc. Wilmington 100.0

Deutsche Leasing Canada, Corp. Halifax 100.0 Deutsche Leasing (China) Co., Ltd. Shanghai 100.0 Deutsche Leasing CˇR, spol. s r.o. Prague 100.0 Deutsche Leasing France Operating S.A.S. Rueil-Malmaison 100.0 Deutsche Leasing France S.A.S. Rueil-Malmaison 100.0 Deutsche Leasing Funding B. V. Amsterdam 100.0 Deutsche Leasing Hungária Zrt. Budapest 100.0 Deutsche Leasing Hungária Kft. Budapest 100.0 Deutsche Leasing Ibérica, E.F.C., S.A. Barcelona 100.0 DL Ibérica EquipRent, S.A. Barcelona 100.0 Deutsche Leasing (Ireland) Limited Dublin 100.0 Deutsche Leasing Italia S.p.A. Milan 100.0 Deutsche Leasing Operativo S.r.l. Milan 100.0 Deutsche Leasing Nederland B. V. Amsterdam 100.0 Deutsche Leasing North America, Inc. Wilmington 100.0 Deutsche Leasing USA, Inc. Wilmington 100.0 Deutsche Leasing Polska S.A. Warsaw 100.0 Deutsche Leasing Romania IFN S.A. Bucharest 100.0 Deutsche Leasing Romania Operational SRL Bucharest 100.0 Deutsche Leasing Slovakia, spol. s r.o. Bratislava 100.0 Deutsche Leasing Sverige AB Stockholm 100.0 Deutsche Leasing (UK) Limited London 100.0 Deutsche Leasing (Asia Pacific) Limited London 100.0 Deutsche Leasing Vostok AG Moscow 100.0 Deutsche Sparkassen Leasing do Brasil S.A. São Paulo 100.0 Locadora DL do Brasil LTDA São Paulo 100.0

Please refer to the appendix to the notes to the consolidated financial statements (§ 313 (2) HGB) for full disclosures concerning shareholdings. 1

1 The appendices to the notes to the consolidated financial statements are not printed in the annual report. They may be viewed in the electronic version of the German Federal Official Gazette as disclosed.

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Consolidation methods Currency translation

For subsidiaries newly incorporated in the group of Currency translation for foreign financial statements consolidated companies, capital consolidation is is based on the modified closing rate method. Assets performed according to the revaluation method. The and liabilities are translated at mean spot exchange historical costs of the shares in subsidiaries are offset rates on the balance-sheet date, expenses and income against their share of equity as of the date on which at average annual rates and equity at historical rates. this company became a subsidiary. Differences resulting from currency translation are The profits brought forward of consolidated subsidiar- not recognised in income and are separately reported ies are allocated to the reserves. in equity.

Loans, receivables and liabilities between consolidated companies are offset.

Trade receivables and other income realised between consolidated companies are offset against corresponding expenses.

Future receivables resulting from intra-Group purchases of receivables – which are reported in the consolidated financial statements at their present value – are consolidated with the deferred income item from sales of receivables under leasing contracts. Any remaining amount is reported in the profit and loss account.

The value of the investments reported at equity has been calculated by means of the book value method as of the date on which the company became an associated company.

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Accounting policies financial year onwards. Other goodwill components are subject to straight-line amortisation over the average residual terms of the respective company’s portfo- Currency translation for assets and liabilities is in lio of contracts, over a period of 7.5 years. accordance with the rules laid down in § 340h HGB and §§ 300 (2) in conjunction with 256a HGB. In principle, other assets are reported at their historical costs. Where this includes assets resulting from termi- Cash reserves and receivables from credit institutions nated leasing contracts, these are valued at amortised are reported at nominal value. historical costs.

In principle, receivables are reported at their historical Liabilities are valued at their settlement amounts. costs. Claims under hire-purchase contracts and sales of receivables are reported at their present value. Dis- Deferred income mainly consists of the selling prices cernible risks are taken into account by means of de- resulting from the sale of leasing receivables. Where preciation to the lower fair value. According to §§ 253 these result from the sale of non-straight-line leasing (5) in conjunction with 298, 300 (2) HGB, write-ups are instalments they are reversed in proportion to the cap- implemented where the grounds for depreciation are ital, and otherwise on a straight-line basis. In case of no longer applicable. non-monthly leasing instalments, deferred income includes income to guarantee realisation of revenues in As a rule, scheduled depreciation on newly acquired accordance with the performance period. leasing assets is in line with the term of the leasing contracts. Provisions for pensions have been valued using the pro- jected unit credit method and their reported amounts The straight-line depreciation method is used instead are based on an actuarial calculation. The provision of the declining-balance depreciation method if this amount has been calculated in accordance with §§ 253 (2) results in an increase in depreciation. in conjunction with 298, 300 (2) HGB and in conjunction with the German Provisions Discounting Ordinance Intangible assets are reported at their historical costs (Rückstellungsabzinsungsverordnung, RückAbzinsV), less scheduled amortisation. subject to the interest rates for accounting purposes fixed by the German Bundesbank due to the amend- Property, plant and equipment is valued at historical ment of § 253 (2) HGB and on the basis of an average costs less scheduled depreciation. market interest rate for the past ten financial years of between 4.08 and 4.11 per cent. This calculation is Leasing goods, intangible assets and property, plant based on the current Heubeck 2005 G guideline tables and equipment are subject to non-scheduled deprecia- and an index-linked pension increase of between 1.75 tion in case of permanent impairment. Leasing goods and 2.00 per cent. An index-linked salary increase of are subject to non-scheduled depreciation in case of 2.00 per cent has been assumed for a portion of the possible risks associated with violations of leasing provisions for pensions. Provisions for anniversary contracts. bonuses have been calculated according to the project- ed unit credit method, with a discounting rate of be- Goodwill for Deutsche Factoring Bank GmbH & Co. KG – tween 3.37 and 3.42 per cent and an index-linked sala- which has been consolidated for the first time – will ry increase of 2.00 per cent. For calculation of the rate be subject to straight-line amortisation from the next of fluctuation, age- and gender-specific fluctuation

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probabilities of 2.00 to 4.50 per cent have been applied. those applicable for subsidiary companies. Domestic Old-age part-time working obligations are calculated and foreign subsidiaries which are not included in the by means of a discounting rate of 1.69 per cent and an tax group are also considered. Tax loss carryforwards index-linked salary increase of 2.00 per cent. are included in the valuation of deferred tax assets if they are expected to be offsettable against taxable in- Provisions for taxation and other provisions are reported come within a period of five years. Deferred taxes are in the value of the settlement amount which is deemed calculated on the basis of the income tax rate for the necessary according to a prudent commercial assessment. respective member company of the consolidated group of between 10.00 per cent and 34.00 per cent. Deferred Financial statements of foreign companies have been tax assets and liabilities are offset. Due to the overall included on the basis of the uniform valuation methods assessment – including the deferred taxes from the for the consolidated financial statements, while con- annual financial statements of the incorporated com- sidering peculiarities in individual countries and companies – in case of tax relief, balance-sheet reporting plying with the principle of materiality. is waived in line with the capitalisation option. In the reporting year no deferred taxes are reportable in the Within the scope of the loss-free valuation of interest- consolidated financial statements of Deutsche Spar- related business in the banking book, a progress review kassen Leasing AG & Co. KG, since this option has not has been prepared for financial assets as well as interest- been used. bearing deposit operations, including carefully calculated risk and administrative expenses. The surpluses In accordance with the opinion of the main committee expected to result from this have been identified. This of the Institute of Public Auditors in Germany (Institut has not given rise to a need to establish provisions for der Wirtschaftsprüfer, IDW) (report of the 244th meet- contingent losses. ing of the main committee), Deutsche Leasing has decided to prepare the financial statements of the sub- In cases where liabilities (underlying transactions) are sidiary companies for which a bar on distributions pooled (valuation units) to equalise opposite cash flows applies pursuant to § 253 (6) Clause 2 without includ- or changes in value resulting from similar risks entered ing a bar on payments, so as not to jeopardise recogni- into through financial instruments (hedging instruments), tion of tax group status. the general valuation principles laid down in § 254 HGB will not apply insofar as and for as long as opposite cash flows or changes in value equalise one another. Notes on the consolidated balance sheet For the effective portion, changes in the values of underlying transactions and hedging instruments are calculated according to the “net hedge presentation Please see the fixed-asset movement schedule for method” for interest and the “gross hedge presentation disclosures concerning equities and other non-fixed method” for currencies. interest securities, investments, shares in affiliated companies, leasing assets, intangible assets and Deferred taxes are calculated for time differences be- property, plant and equipment. tween the commercial and tax balance sheet valua- tions of assets, liabilities and accruals and deferrals, Please see below for the disclosures concerning re- in principle encompassing includable tax loss carry- ceivables from credit institutions and customers as forwards. Timing differences resulting from the com- well as the liabilities owed to credit institutions and pany’s own balance-sheet items are included as well as customers and liabilities evidenced by certificates.

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Fixed-asset movement schedule

Historical costs Depreciation/amortisation Carrying amounts Depreciation/amortisation

1/10/2015 Additions Disposals Reclassifications cumulative 30/9/2016 30/9/2015 in financial year

EUR EUR EUR EUR EUR EUR EUR EUR

1. Equities and other non- fixed interest securities 824,544.43 11,560.55 3,708.37 0.00 27,874.02 804,522.59 796,670.41 0.00

2. Investments

Investments in associated companies 145,735,092.36 15,025,116.95 570,747.59 0.00 0.00 160,189,461.72 145,735,092.36 0.00 Other investments 8,634,533.00 30,500.00 375,341.36 0.00 52,621.59 8,237,070.05 8,581,911.41 0.00

154,369,625.36 15,055,616.95 946,088.95 0.00 52,621.59 168,426,531.77 154,317,003.77 0.00

3. Shares in affiliated companies 14,047,578.37 611,367.00 691,943.01 0.00 535,657.38 13,431,344.98 13,688,130.37 176,209.38

4. Leasing assets

Leasing goods 16,331,069,282.31 3,480,922,069.73 3,706,822,290.22 + 331,978,306.30 6,912,633,671.29 9,524,513,696.83 9,255,153,240.04 2,607,362,204.01

Advanced payments 302,531,914.11 451,222,913.11 0.00 - 331,978,306.30 0.00 421,776,520.92 302,531,914.11 0.00

16,633,601,196.42 3,932,144,982.84 3,706,822,290.22 0.00 6,912,633,671.29 9,946,290,217.75 9,557,685,154.15 2,607,362,204.01

5. Intangible assets

Industrial rights 94,018,665.24 10,315,205.06 797,073.52 + 536,196.64 82,689,058.70 21,383,934.72 16,457,833.57 5,589,675.98

Goodwill 5,838,308.28 60,445,745.23 0.00 0.00 5,454,238.40 60,829,815.11 603,479.59 219,409.71

Advanced payments 3,236,993.94 1,230,755.79 106,733.21 - 536,196.64 0.00 3,824,819.88 3,236,993.94 0.00

103,093,967.46 71,991,706.08 903,806.73 0.00 88,143,297.10 86,038,569.71 20,298,307.10 5,809,085.69

6. Property, plant and equipment

Buildings on leasehold properties 86,832,778.89 859,501.00 1,550.76 0.00 14,241,738.92 73,448,990.21 75,103,226.99 2,510,662.60

Fittings, tools and equipment 58,244,827.97 4,380,747.32 1,693,489.76 97,269.11 37,672,219.68 23,357,134.96 24,553,040.93 4,715,382.31

Advanced payments 1,468,396.57 131,962.67 0.00 - 97,269.11 0.00 1,503,090.13 1,468,396.57 0.00

146,546,003.43 5,372,210.99 1,695,040.52 0.00 51,913,958.60 98,309,215.30 101,124,664.49 7,226,044.91

17,052,482,915.47 4,025,187,444.41 3,711,062,877.80 0.00 7,053,307,079.98 10,313,300,402.10 9,847,909,930.29 2,620,573,543.99

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Historical costs Depreciation/amortisation Carrying amounts Depreciation/amortisation

1/10/2015 Additions Disposals Reclassifications cumulative 30/9/2016 30/9/2015 in financial year

EUR EUR EUR EUR EUR EUR EUR EUR

1. Equities and other non- fixed interest securities 824,544.43 11,560.55 3,708.37 0.00 27,874.02 804,522.59 796,670.41 0.00

2. Investments

154,369,625.36 15,055,616.95 946,088.95 0.00 52,621.59 168,426,531.77 154,317,003.77 0.00

3. Shares in affiliated companies 14,047,578.37 611,367.00 691,943.01 0.00 535,657.38 13,431,344.98 13,688,130.37 176,209.38

4. Leasing assets

Leasing goods 16,331,069,282.31 3,480,922,069.73 3,706,822,290.22 + 331,978,306.30 6,912,633,671.29 9,524,513,696.83 9,255,153,240.04 2,607,362,204.01

Advanced payments 302,531,914.11 451,222,913.11 0.00 - 331,978,306.30 0.00 421,776,520.92 302,531,914.11 0.00

16,633,601,196.42 3,932,144,982.84 3,706,822,290.22 0.00 6,912,633,671.29 9,946,290,217.75 9,557,685,154.15 2,607,362,204.01

5. Intangible assets

Industrial rights 94,018,665.24 10,315,205.06 797,073.52 + 536,196.64 82,689,058.70 21,383,934.72 16,457,833.57 5,589,675.98

Goodwill 5,838,308.28 60,445,745.23 0.00 0.00 5,454,238.40 60,829,815.11 603,479.59 219,409.71

Advanced payments 3,236,993.94 1,230,755.79 106,733.21 - 536,196.64 0.00 3,824,819.88 3,236,993.94 0.00

103,093,967.46 71,991,706.08 903,806.73 0.00 88,143,297.10 86,038,569.71 20,298,307.10 5,809,085.69

6. Property, plant and equipment

Buildings on leasehold properties 86,832,778.89 859,501.00 1,550.76 0.00 14,241,738.92 73,448,990.21 75,103,226.99 2,510,662.60

Fittings, tools and equipment 58,244,827.97 4,380,747.32 1,693,489.76 97,269.11 37,672,219.68 23,357,134.96 24,553,040.93 4,715,382.31

Advanced payments 1,468,396.57 131,962.67 0.00 - 97,269.11 0.00 1,503,090.13 1,468,396.57 0.00

146,546,003.43 5,372,210.99 1,695,040.52 0.00 51,913,958.60 98,309,215.30 101,124,664.49 7,226,044.91

17,052,482,915.47 4,025,187,444.41 3,711,062,877.80 0.00 7,053,307,079.98 10,313,300,402.10 9,847,909,930.29 2,620,573,543.99

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CONSOLIDATED FINANCIAL STATEMENTS

30/9/2016 30/9/2015

EUR TEUR

Receivables from credit institutions 447,845,735.43 309,694 a) Due daily 392,335,059.75 277,859 b) With agreed maturity or notice period 55,510,675.68 31,835 ba) up to three months 52,786,079.08 29,110 bb) more than three months and up to one year 0.00 – bc) more than one year and up to five years 0.00 – bd) more than five years 2,724,596.60 2,725 Receivables from customers 7,666,635,163.22 6,139,046 a) up to three months 1,500,434,556.64 344,373 b) more than three months and up to one year 856,291,941.06 996,621 c) more than one year and up to five years 3,488,842,531.62 3,286,651 d) more than five years 1,618,355,212.57 1,254,358 e) with an indefinite term 202,710,921.33 257,043

30/9/2016 30/9/2015

EUR TEUR

Liabilities owed to credit institutions 11,406,031,934.88 9,760,790 a) Due daily 931,417,008.72 647,467 b) With agreed maturity or notice period 10,474,614,926.16 9,113,323 ba) up to three months 3,519,763,314.48 1,183,642 bb) more than three months and up to one year 2,104,625,761.02 2,337,589 bc) more than one year and up to five years 4,088,954,992.98 4,719,821 bd) more than five years 761,270,857.68 872,271 Liabilities owed to customers 953,234,939.39 603,862 a) Due daily 502,951,459.15 89,105 b) With agreed maturity or notice period 450,283,480.24 514,757 ba) up to three months 53,087,021.17 67,212 bb) more than three months and up to one year 140,836,047.67 176,287 bc) more than one year and up to five years 252,536,158.56 271,258 bd) more than five years 3,824,252.84 – Liabilities evidenced by securities 465,700,000.00 382,500 a) up to three months 285,000,000.00 292,000 b) more than three months and up to one year 180,700,000.00 90,500 c) more than one year and up to five years 0.00 – d) more than five years 0.00 –

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Receivables from credit institutions mainly relate to In relation to the surplus resulting from the offset- sales of receivables to savings banks and credit institu- ting of assets, the reinsurance policies are exclu- tions which have not yet been settled up. Receivables sively for fulfilment of the obligations resulting from from shareholders amount to EUR 8.2 million (previ- pension provisions and are not available to other ous year: EUR 10.5 million). Of the total amount, EUR creditors. They have been offset against the under- 4.6 million relates to Deutsche Factoring Bank GmbH & lying obligations pursuant to § 246 (2) Clause 2 HGB. Co. KG. The fair values of the plan assets correspond to the cover funds documented by the insurer and thus Of the receivables from customers, EUR 5,819.1 million match the historical costs in the amount of TEUR (previous year: EUR 4,366.4 million) relates to leasing, 976. The fair value of the plan provisions which hire-purchase, rental and factoring business. Foreign- exceeds the relevant pension obligation has been currency receivables amount to EUR 2,040.8 million reported as TEUR 153 in accordance with § 246 (2) (previous year: EUR 2,028.4 million). Receivables from Clause 3 HGB. In future, expenses and income will shareholders amount to EUR 0.5 million (previous year: be offset. EUR 0.1 million). Of the receivables from customers, EUR 1,203.7 million relates to Deutsche Factoring Bank Liabilities owed to credit institutions mainly relate GmbH & Co. KG which has been consolidated for the to loans and time deposits and include foreign-cur- first time. rency items in the amount of EUR 1,388.6 million (previous year: EUR 1,412.8 million). In addition, lia- In the intangible assets item, the change in goodwill bilities owed to shareholders amount to EUR 412.7 has resulted from the first-time consolidation of a sub- million (previous year: EUR 834.1 million). Of the lia- sidiary. bilities owed to credit institutions, EUR 721.6 million relates to Deutsche Factoring Bank GmbH & Co. KG Of the property, plant and equipment, EUR 71.3 million which has been consolidated for the first time. Of the (previous year: EUR 73.8 million) relates to the main total amount, EUR 392.4 million (previous year: EUR administrative headquarters of the Deutsche Leasing 246.2 million) is secured by means of the transfer of Group and EUR 23.4 million (previous year: EUR 24.6 title of leasing goods for security purposes. This is million) to fittings, tools and equipment. associated with the sale of claims resulting from residual values and leasing instalments. The other assets item includes loans to an affiliated company in the amount of EUR 98.3 million and tax Of the liabilities owed to customers, EUR 313.0 million receivables in the amount of EUR 75.5 million. For- relates to Deutsche Factoring Bank GmbH & Co. KG eign-currency amounts total EUR 37.9 million (previ- which has been consolidated for the first time. Of the ous year: EUR 43.7 million). total amount, EUR 636.5 million (previous year: EUR 499.7 million) is secured by means of the transfer of The prepayments item includes prepaid premiums title of leasing goods for security purposes. This is for credit and property insurance in the amount of associated with the sale of claims resulting from leas- EUR 1.8 million (previous year: EUR 1.8 million). In ing instalments. the previous year, this included discounts resulting from issuance of bonds in the amount of EUR 0.1 Of the other liabilities, liabilities owed to suppliers million. amount to EUR 201.4 million (previous year: EUR 270.5 million).

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CONSOLIDATED FINANCIAL STATEMENTS

Provisions for pensions and similar obligations have The risk resulting from various payment flows (interest been established for employees and former Manage- rate, fixed interest-rate period, currency) and changes ment Board members. Of the reinsurance asset item in value for the underlying transactions (leasing con- in the amount of EUR 3.9 million – reported at its fair tracts and corresponding financing) is managed by value in accordance with §§ 255 (4) Clause 4 in con- means of these derivatives. For this purpose, Deutsche junction with 298, 300 (2) HGB – TEUR 171 has been Sparkassen Leasing AG & Co. KG pools groups of un- offset against the pension provisions. The difference derlying transactions involving one or more hedging in accordance with § 253 (6) HGB amounts to EUR 11.5 instruments as valuation units (portfolio hedge) and million. hedges any shortfall of cover (net risk position).

The other provisions relate to outstanding payments The outstanding nominal volume of the derivatives for the personnel segment and provisions for old-age corresponds to the value of the liabilities shown in the part-time working and anniversary bonuses and also, balance sheet or current leasing claims in the respective in the amount of EUR 15.2 million (previous year: EUR valuation units. The term of the derivatives matches 14.9 million), for leasing business. Of the other provi- the term of the underlying transactions. In principle, sions, EUR 6.7 million relates to Deutsche Factoring these transactions will not be prematurely unwound. Bank GmbH & Co. KG, which has been consolidated for the first time. As of 30 September 2016, the outstanding nominal value of the derivatives amounted to EUR 1,989.8 mil- The subordinate liabilities relate to Deutsche Factoring lion. The total derivatives with negative fair values as Bank GmbH & Co. KG, which has been consolidated for of the balance-sheet date amount to EUR 34.8 million the first time. (determined by means of the mark-to-market method). Due to the effectiveness of the valuation units, no pro- Contingent liabilities include liabilities resulting from visions are established. The derivatives have a maxi- suretyships and guarantee agreements in relation to mum remaining term of 8.8 years. an associated company, in connection with the hiving- off of business for financing of cars and leisure vehi- Effectiveness is prospectively measured by means of cles. These amount to EUR 22.8 million. a comparison of the relevant parameters for the underlying transactions and hedging instruments in both The other liabilities include irrevocable loan commit- qualitative and quantitative terms, nominally and ments to an associated company in the amount of EUR arithmetically. A documented, appropriate and func- 18.6 million. tional risk management system is also used for these transactions. Derivatives (interest-rate swaps, currency swaps, interest-rate/currency swaps, forward exchange transactions) are exclusively entered into for hedging of interest-rate fluctuation/currency risks.

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Notes on the profit and loss account Of the commission income, TEUR 25,846 is attributable to Germany and TEUR 507 to other countries.

The disclosures concerning the classification of income The other operating income mainly comprises services by geographic market are based on the structure selected income. This item includes income not related to the by the parent company for control and reporting pur- period in the amount of EUR 15.3 million (previous poses. year: EUR 69.2 million). Of the other operating income, EUR 251.9 million is attributable to Germany and EUR Leasing income comprises revenues from leasing in- 28.4 million to other countries. stalments and hire-purchase contracts as well as revenues from the resale of leasing goods and was mainly Depreciation of leasing assets includes non-scheduled realised in Germany. depreciation in the amount of EUR 15.1 million (previous year: EUR 9.0 million). Leasing expenses comprise expenses resulting from the acquisition of hire-purchase assets and the dispos- The other operating expenses mainly comprise servic- al of leasing goods. es expenses. This item includes expenses not related to the period in the amount of EUR 2.7 million (previous Interest income includes income from affiliated com- year: EUR 2.4 million). panies in the amount of TEUR 836 (previous year: TEUR -). Of the interest income, EUR 70.4 million (previ- The extraordinary income has resulted from the disclo- ous year: EUR 75.1 million) relates to Germany and sure of hidden reserves in connection with a contribu- EUR 24.3 million (previous year: EUR 23.8 million) to tion and the associated grant of shares. other countries. Taxes on income and profit include tax expenses not In the previous year, interest expenses included ex- related to the period in the amount of EUR 0.6 million. penses relating to affiliated companies in the amount of TEUR 316. The interest expenses also include expenses in accordance with §§ 277 (5) in conjunction with 298, 300 (2) HGB in the amount of EUR 0.2 million (previous year: EUR 5.7 million).

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CONSOLIDATED FINANCIAL STATEMENTS

Other disclosures

The parent company has issued letters of comfort and loan guarantees for the following foreign subsidiaries to their financing banks:

Name of the company Registered office of the company

Deutsche Leasing Austria GmbH Vienna Deutsche Leasing Benelux N.V. Antwerp (Berchem) Deutsche Leasing Bulgaria EAD Sofia Deutsche Leasing (China) Co., Ltd. Shanghai Deutsche Leasing CˇR, spol. s r.o. Prague Deutsche Leasing France Operating S.A.S. Rueil-Malmaison Deutsche Leasing France S.A.S. Rueil-Malmaison Deutsche Leasing Funding B. V. Amsterdam Deutsche Leasing Hungária Zrt. Budapest Deutsche Leasing Hungária Kft. Budapest Deutsche Leasing Ibérica, E.F.C., S.A. Barcelona DL Ibérica EquipRent, S.A. Barcelona Deutsche Leasing (Ireland) Limited Dublin Deutsche Leasing Italia S.p.A. Milan Deutsche Leasing Operativo S.r.l. Milan Deutsche Leasing Nederland B. V. Amsterdam Deutsche Leasing Polska S.A. Warsaw Deutsche Leasing Romania IFN S.A. Bucharest Deutsche Leasing Romania Operational SRL Bucharest Deutsche Leasing Slovakia, spol. s r. o. Bratislava Deutsche Leasing Sverige AB Stockholm Deutsche Leasing (UK) Limited London Deutsche Leasing Vostok AG Moscow Locadora DL do Brasil LTDA São Paulo

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The parent company provides the following confirma- A second-hand car guarantee for a period of twelve tion within the scope of the letters of comfort: months is provided for motor vehicles sold to end- consumers. On the balance-sheet date, this has result- With the exception of a political risk scenario, Deutsche ed in contingent liabilities due to warranties. An in- Sparkassen Leasing AG & Co. KG hereby undertakes to surance policy has been taken out to cover this risk. provide its subsidiary with funding so that it is able to fulfil its liabilities. On the balance sheet date, order commitments under leasing and hire-purchase contracts amount to EUR Through a loan guarantee-based commitment in 2,319.6 million (previous year: EUR 1,981.4 million). relation to the financing banks, the political risk is regularly also assumed. This is particularly applicable In the past financial year the total fee for the auditor in relation to the subsidiaries Deutsche Leasing (China) amounted to TEUR 5,141 (previous year: TEUR 2,453). Co., Ltd., Shanghai, Deutsche Leasing Vostok AG, Moscow, This includes auditing services in the amount of and Deutsche Leasing ČR, spol. s r.o., Prague. In princi- TEUR 1,632 (previous year: TEUR 1,443), other assur- ple, Deutsche Sparkassen Leasing AG & Co. KG also ance services in the amount of TEUR 142 (previous assumes the political risk for its financing company year: TEUR 137), tax advice services in the amount of Deutsche Leasing Funding B.V., Amsterdam, in relation TEUR 67 (previous year: TEUR 30) and other services to the financing banks, within the scope of a guarantee in the amount of TEUR 3,300 (previous year: TEUR 843). or a letter of comfort. Cash and cash equivalents in the statement of cash In view of current forecasts, the parent company flows consist of the freely disposable funds from the considers that the risk of recourse under the letters cash reserves balance-sheet item as well as receivables of comfort and guarantees is highly improbable. from credit institutions which fall due on a daily basis. The structure of the statement of cash flows has been On the balance sheet date, other financial obligations adjusted in accordance with the requirements of Ger- amounted to EUR 5.2 million under service and lease man Accounting Standard (Deutscher Rechnungsle- agreements for branch offices. These lease agreements gungstandard, DRS) no. 21, while allowing for the spe- have a remaining term expiring in 2021. cific characteristics of the leasing sector. The prior-year amounts have been revised. The cash inflow from cur- The spin-off of financing of cars and leisure vehicles rent business activities is determined on the basis of has resulted in a liability pursuant to § 133 (1) of the the net profit for the year; the reconciliation results German Conversion Law (Umwandlungsgesetz, from the consolidated profit and loss account. UmwG) in the amount of EUR 10 million (previous year: EUR 66 million). On average, the company had 1,175 female and 1,208 male employees in the past financial year

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CONSOLIDATED FINANCIAL STATEMENTS

The Supervisory Board of the parent company has the following members:

Alexander Wüerst Georg Fahrenschon (since October 2015) Chairman President Chief Executive Officer Deutscher Sparkassen- und Giroverband e.V., Berlin Kreissparkasse Köln, Cologne Michael Fröhlich Dr. Walter Eschle Deputy Chief Executive Officer Deputy Chairman Sparkasse Bielefeld, Bielefeld Deputy Chief Executive Officer Stadtsparkasse Augsburg, Augsburg Hans-Michael Heitmüller Retired Chief Executive Officer Marina Barth Deutsche Leasing AG, Bad Homburg v. d. Höhe Member of the Management Board Sparkasse Hanover, Hanover Horst Herrmann Chief Executive Officer Andreas Bartsch Kreissparkasse Saarlouis, Saarlouis Chief Executive Officer Sparkasse Marburg-Biedenkopf, Marburg Michael Huber Chief Executive Officer Dr. Joachim Bonn (since June 2016) Sparkasse Karlsruhe Ettlingen, Karlsruhe Chief Executive Officer Sparkasse Duisburg, Duisburg Hans Jürgen Kulartz Member of the Management Board Frank Brockmann Landesbank Berlin AG, Berlin Deputy Board Spokesman Hamburger Sparkasse AG, Hamburg Ulrich Lepsch Chief Executive Officer Rainer Burghardt Sparkasse Spree-Neiße, Cottbus Chief Executive Officer Kreissparkasse Herzogtum Lauenburg, Ratzeburg Günther Passek Chief Executive Officer Roland Burgis Sparkasse Trier, Trier Deputy Chief Executive Officer Sparkasse Nürnberg, Nuremberg Robert Restani (since November 2015) Chief Executive Officer Barbara Degenkolb Frankfurter Sparkasse, Frankfurt am Main Team Leader Deutsche Sparkassen Leasing AG & Co. KG, Dr. Birgit Roos (to June 2016) Bad Homburg v. d. Höhe Chief Executive Officer Sparkasse Krefeld, Krefeld

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Rainer Schwab Burkhard Wittmacher Works Council Chairman Chief Executive Officer Deutsche Sparkassen Leasing AG & Co. KG, Kreissparkasse Esslingen-Nürtingen, Esslingen Bad Homburg v. d. Höhe

Total remuneration of the members of the Supervisory Board of the parent company amounted to EUR 0.3 million (previous year: EUR 0.2 million). Pension provisions for the former members of the Management Board amount to EUR 3.2 million (previous year: EUR 3.4 million). EUR 1.0 million was paid out in the form of pensions for former members of the Management Board in the current financial year.

The personally liable and managing shareholder of the parent company is Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft, Bad Homburg v. d. Höhe, with subscribed capital amounting to EUR 50,000.00.

The Management Board of the managing shareholder of the parent company consists of the following persons:

Kai Ostermann, Chief Executive Officer

Friedrich Jüngling

Matthias Laukin

Rainer Weis

The Management Board receives EUR 3.3 million (previous year: EUR 3.5 million) for the performance of its tasks.

The consolidated financial statements are published in the German Federal Gazette (Bundesanzeiger).

Bad Homburg v. d. Höhe, 14 December 2016

Deutsche Sparkassen Leasing AG & Co. KG represented by its general partner

Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft

Ostermann Jüngling Laukin Weis

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CONSOLIDATED FINANCIAL STATEMENTS

Statement of cash flows

Deutsche Sparkassen Leasing AG & Co. KG Group1

2015 / 2016 2014 / 2015 EUR million EUR million 1. Net profit for the year 68.8 67.4 2. + Depreciation on leasing assets 2,607.4 2,740.6 3. - Additions to leasing assets - 3,932.1 - 3,937.0 4. + Residual carrying amounts from disposal of leasing assets 936.2 1,293.7 5. +/- Increase/decrease in accrued leasing instalments 4.9 - 26.6 6. Depreciation on and changes to leasing assets - 383.6 70.7 7. - Increase in hire-purchase receivables - 296.6 - 193.5 8. + Interest payments received 94.7 98.9 9. -/+ Increase/decrease in receivables from credit institutions - 23.7 118.2 (excl. receivables due daily) 10. - Increase in receivables from customers (excl. hire-purchase) - 1,231.0 - 410.1 11. +/- Decrease/increase in other assets 24.0 - 5.4 12. Changes in hire-purchase and other assets - 1,432.6 - 391.9 13. - Interest paid - 162.9 - 200.6 14. + Increase in liabilities owed to credit institutions 1,645.2 597.2 15. +/- Increase/decrease in liabilities owed to customers 349.3 - 108.4 16. + Increase in liabilities evidenced by certificates 83.2 44.6 17. - Decrease in deferred income from sales of receivables - 66.1 - 231.1 18. + Interest expenses less interest income 68.2 101.6 19. Changes in refinancing leasing and hire-purchase 1,916.9 203.3 20. -/+ Decrease/increase in provisions - 7.1 27.2 21. + Increase in other liabilities 11.8 42.5 22. + Amortisation of intangible assets and depreciation of property, plant and equipment 13.0 14.5 23. + Increase in fund for general banking risks 40.0 41.0 24. +/- Other changes in equity 37.7 - 29.3 25. - Income less expenses from extraordinary items - 13.9 - 0.2 26. + Income tax expenses less income 20.0 41.5 27. - Income tax payments - 45.6 - 31.6 28. Changes in equity and other items 55.9 105.6 29. Cash inflow from current business activities 225.4 55.1 30. + Cash inflow from the sale of property, plant and equipment 1.0 6.1 31. - Payments for acquisition of property, plant and equipment - 5.4 - 16.5 32. + Cash inflow from the sale of intangible assets 0.5 0.4 33. - Payments for acquisition of intangible assets - 72.0 - 8.6 34. Cash outflow from investing activities - 75.9 - 18.6 35. - Cash outflow to shareholders - 35.0 - 35.0 36. Cash outflow from financing activities - 35.0 - 35.0

Changes in cash and cash equivalents items nos. (29) + (34) + (36) 114.5 1.5 Cash and cash equivalents at the beginning of the period 277.9 276.4 Cash and cash equivalents at the end of the period 392.4 277.9

1 The structure of the statement of cash flows has been adjusted in accordance with the requirements of German Accounting Standard no. 21 while allowing for the specific characteristics of the leasing sector. The prior-year amounts have been revised. Liabilities owed to credit institutions and due daily in the amount of EUR 931.4 million as of 30 September 2016 (previous year: EUR 647.5 million) are not included in cash and cash equivalents; the change is attributable to cash transactions.

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Statement of changes in equity

Deutsche Sparkassen Leasing AG & Co. KG Group

Shares of Subscribed minority capital/equity Differences interests and shares of limited from currency unconsolidated Net profit for partners Reserves translation subsidiaries the year Total equity TEUR TEUR TEUR TEUR TEUR TEUR

Equity as at 30/09/2014 240,000 297,571 13,536 12,213 65,389 628,709

Charges against earnings - 65,389 - 65,389 (thereof distribution to shareholders) (35,000) Changes in reserves 38,646 38,646

Differences from currency translation 1,013 1,013

Change in capital and earnings interests held by minority interests and unconsolidated subsidiaries 2,997 2,997 Net profit for the year 67,432 67,432

Equity as at 30/09/2015 240,000 336,217 14,549 15,210 67,432 673,408

Charges against earnings - 67,432 - 67,432 (thereof distribution to shareholders) (35,000) Changes in reserves 13,466 13,466

Differences from currency translation 926 926

Change in capital and earnings interests held by minority interests and unconsolidated subsidiaries 75,746 75,746 Net profit for the year 68,771 68,771

Equity as at 30/09/2016 240,000 349,683 15,475 90,956 68,771 764,885

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GROUP INFORMATION

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Group information

93 Auditor’s report

94 Shareholders

95 Supervisory Board

97 Management Board

97 Senior Management

100 Corporate Structure

102 Addresses GROUP INFORMATION GROUP

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GROUP INFORMATION

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Auditor’s report

KPMG AG Wirtschaftsprüfungsgesellschaft has issued the following unqualified auditor’s report for the consolidated financial statements as of 30 September 2016 and the related summarised management report:

We have audited the consolidated financial statements entities to be included in consolidation, the accounting prepared by the Deutsche Sparkassen Leasing AG & Co. and consolidation principles used and significant es- KG, Bad Homburg v. d. Höhe, comprising the balance timates made by management, as well as evaluating sheet, the income statement, statement of changes in the overall presentation of the consolidated financial equity, cash flow statement and the notes to the consol- statements and group management report. We believe idated financial statements and its report on the posi- that our audit provides a reasonable basis for our tion of the Company and the Group for the business year opinion. from 1 October 2015 to 30 September 2016. The preparation of the consolidated financial statements and the Our audit has not led to any reservations. group management report in accordance with German commercial law are the responsibility of the parent In our opinion, based on the findings of our audit, the company`s management. Our responsibility is to ex- consolidated financial statements comply with the legal press an opinion on the consolidated financial state- requirements (and supplementary provisions of the ments and on the group management report based on shareholder agreement/articles of incorporation) and our audit. give a true and fair view of the net assets, financial position and results of operations of the Group in accord- We conducted our audit of the consolidated financial ance with these requirements. The group management statements in accordance with § 317 HGB [Handels- report is consistent with the consolidated financial gesetzbuch „German Commercial Code“] and German statements and as a whole provides a suitable view of generally accepted standards for the audit of financial the Group’s position and suitably presents the oppor- statements promulgated by the Institut der Wirtschaft- tunities and risks of future development. sprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and Frankfurt am Main, 15 December 2016 results of operations in the consolidated financial statements in accordance with German principles of KPMG AG proper accounting and in the group management re- Wirtschaftsprüfungsgesellschaft port are detected with reasonable assurance. Knowl- edge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and Becker Bauer the evidence supporting the disclosures in the consol- Wirtschaftsprüfer Wirtschaftsprüfer idated financial statements and the group manage- (German Public Auditor) (German Public Auditor) ment report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of

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GROUP INFORMATION

Shareholders Deutsche Sparkassen Leasing AG & Co. KG

Association of savings banks

Rheinischer Sparkassen- und Giroverband 20.02 percent

Sparkassenverband Baden-Württemberg 18.80 percent

Sparkassenverband Bayern 12.54 percent

Sparkassen- und Giroverband Hessen-Thüringen 10.67 percent

Sparkassenverband Westfalen-Lippe 9.61 percent

Sparkassenverband Niedersachsen 6.27 percent

Ostdeutscher Sparkassenverband 5.70 percent

Hanseatischer Sparkassen- und Giroverband 4.22 percent

Landesbank Berlin AG 3.86 percent

Sparkassen- und Giroverband Schleswig-Holstein 3.68 percent

Sparkassenverband Rheinland-Pfalz 3.56 percent

Sparkassenverband Saar 1.07 percent As of: February 2017 As of: February

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Supervisory Board Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft

Georg Fahrenschon, Chairman President, Deutscher Sparkassen- und Giroverband e.V., Berlin

Alexander Wüerst, Deputy Chairman Chief Executive Officer, Kreissparkasse Köln, Cologne

Frank Brockmann Deputy Board Spokesman, Hamburger Sparkasse AG, Hamburg

Supervisory Board Deutsche Leasing AG

Alexander Wüerst, Chairman Chief Executive Officer, Kreissparkasse Köln, Cologne

Georg Fahrenschon, Deputy Chairman President, Deutscher Sparkassen- und Giroverband e.V., Berlin

Frank Brockmann Deputy Board Spokesman, Hamburger Sparkasse AG, Hamburg As of: February 2017 As of: February

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GROUP INFORMATION

Supervisory Board Deutsche Sparkassen Leasing AG & Co. KG

Alexander Wüerst, Chairman Chief Executive Officer, Kreissparkasse Köln, Cologne

Dr. Walter Eschle, Deputy Chairman Deputy Chairman Stadtsparkasse Augsburg, Augsburg

Marina Barth Member of the Management Board, Sparkasse Hannover, Hanover

Andreas Bartsch Chief Executive Officer, Sparkasse Marburg-Biedenkopf, Marburg

Dr. Joachim Bonn (since June 2016) Chief Executive Officer, Sparkasse Duisburg, Duisburg

Frank Brockmann Deputy Board Spokesman, Hamburger Sparkasse AG, Hamburg

Rainer Burghardt Chief Executive Officer, Kreissparkasse Herzogtum Lauenburg, Ratzeburg

Roland Burgis Deputy Chief Executive Officer, Sparkasse Nürnberg, Nuremberg

Barbara Degenkolb Team Leader, Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe Georg Fahrenschon (since October 2015) President, Deutscher Sparkassen- und Giroverband e.V., Berlin

Michael Fröhlich Deputy Chief Executive Officer, Sparkasse Bielefeld, Bielefeld

Hans-Michael Heitmüller Retired Chief Executive Officer, Deutsche Leasing AG, Bad Homburg v. d. Höhe Horst Herrmann Chief Executive Officer, Kreissparkasse Saarlouis, Saarlouis

Michael Huber Chief Executive Officer, Sparkasse Karlsruhe Ettlingen, Karlsruhe

Hans Jürgen Kulartz Member of the Management Board, Landesbank Berlin AG, Berlin

Ulrich Lepsch Chief Executive Officer, Sparkasse Spree-Neisse, Cottbus

Günther Passek Chief Executive Officer, Sparkasse Trier, Trier

Robert Restani (since November 2015) Chief Executive Officer, Frankfurter Sparkasse, Frankfurt am Main

Dr. Birgit Roos (to June 2016) Chief Executive Officer, Sparkasse Krefeld, Krefeld

Rainer Schwab Works Council Chairman, Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe Burkhard Wittmacher Chief Executive Officer, Kreissparkasse Esslingen-Nürtingen, Esslingen As of: February 2017 As of: February

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Management Board Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft (managing shareholder of Deutsche Sparkassen Leasing AG & Co. KG) Deutsche Leasing AG

Kai Ostermann Chief Executive Officer

Friedrich Jüngling Management Board member

Matthias Laukin Management Board member

Rainer Weis Management Board member

Executive Managers and Directors of Divisions Members of the Management Team

Heinz-Hermann Hellen Finance Jürgen Reiber (acting) Asset Management EQUIP

Nicolaus Newiger Organisation/Services Tobias Bergmann Controlling/Investments

Axel Brinkmann Group Audit

Michael Orth Middle Office Small Ticket Business Directors of Business Units/Market Units Thomas Remmel Organisation/Information Technology Otto Schmitz Organisation/Information Technology International Michael Velte, Harald J. Frings Fleet Andreas Kaffka Human Resources Christian Bock, Michael Hellmann Information Technology Heinz-Hermann Hellen Accounting/Tax Georg Hansjürgens, Norbert International Schmidt, Thomas Stahl Michael Felde Legal Department

Dieter Behrens, Ulrich Kühler, Savings Banks and SMEs Klaus-Günther Rasch Domestic Risk Management I Frank Speckmann Maik Mittelberg Domestic Risk Management II

Bernd Schröck International Risk Management

Helmut Meier-Tanski Treasury

Ansgar Wagner Corporate Development

Birgit Probst Central Risk Management As of: February 2017 As of: February

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GROUP INFORMATION

Managing Directors, Subsidiaries/Investments 2 Germany

Dieter Behrens, Ulrich Kühler, Frank Speckmann Deutsche Leasing für Sparkassen und Mittelstand GmbH

Michael Velte, Harald J. Frings Deutsche Leasing Fleet GmbH

Friedrich Jüngling, Rainer Weis, Maik Mittelberg, Deutsche Leasing Finance GmbH Frank-Dieter Speckmann Christian Bock, Michael Hellmann Deutsche Leasing Information Technology GmbH

Bo Liedtke, Volker Bohn Deutsche Leasing Insurance Services GmbH

Georg Hansjürgens, Norbert Schmidt, Thomas Stahl Deutsche Leasing International GmbH

Birgit Trapp, Holger Würk DAL Bautec Baumanagement und Beratung GmbH

Markus Strehle (Chairman), Kai A. Eberhard, Andreas Geue DAL Deutsche Anlagen-Leasing GmbH & Co. KG

Helmuth Barth, Michael Velte AutoExpo Deutsche Auto-Markt GmbH

Karsten Schneider, Dr. Thomas Schneider Bad Homburger Inkasso GmbH

Heinz-Günter Scheer, Jan Welsch S-Kreditpartner GmbH

Hendrik Harms (Speaker), Fedor Krüger, Uwe Müller Deutsche Factoring Bank GmbH & Co. KG

2 As of: February 2017 As of: February selected investments

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Managing Directors Subsidiaries/Investments 2 Other countries

Ursula Leutl, Heinz Scheibenpflug Deutsche Leasing Austria GmbH

Marc Andries, Nora Vermin Deutsche Leasing Benelux N.V. Deutsche Leasing Nederland B. V. Rosen Mishev, Neno Stanev Deutsche Leasing Bulgaria EAD

Fabien Léon Leduc, Rainer Völker Deutsche Leasing Canada, Corp.

Anika Christophe, Xiaoyu Wang, Olive Xu Deutsche Leasing (China) Co., Ltd.

Radan Havelka, Uta Reichel Deutsche Leasing CˇR, spol. s r.o.

Eric Alessandrin, Georg Hansjürgens Deutsche Leasing France S.A.S. Deutsche Leasing France Operating S.A.S. Helmut Meier-Tanski, Thomas Wacker Deutsche Leasing Funding B. V.

Georg Hansjürgens, Katalin Nyikos, András Trautmann Deutsche Leasing Hungária Kft. Deutsche Leasing Hungária Zrt. Karsten Reinhard, Raúl Sánchez DL Ibérica EquipRent, S.A. Deutsche Leasing Ibérica, E.F.C., S.A. Neil Douglas, Simon Dufton Deutsche Leasing (Ireland) Limited

Marco Brivio, Roberto Quarantelli Deutsche Leasing Italia S.p.A. Deutsche Leasing Operativo S.r.l. Krzysztof Brzezin´ski, Marek Niesmialek Deutsche Leasing Polska S.A.

Georg Hansjürgens, Uta Reichel, Cristina-Maria Muresean-Foti, Deutsche Leasing Romania IFN S.A. Laurentiu-Mihai Zaharia Deutsche Leasing Romania Operational SRL Radan Havelka, Uta Reichel Deutsche Leasing Slovakia, spol. s r.o.

Nicklas Karlbom, Jari Poutiainen Deutsche Leasing Sverige AB

Neil Douglas, Simon Dufton Deutsche Leasing (UK) Limited

Fabien Léon Leduc, Rainer Völker Deutsche Leasing USA, Inc.

Jonas Roever, Eckhard Creutzburg Deutsche Leasing Vostok AG

Renato Di Chiara, Matheus Canhoto Gera Locadora DL do Brasil LTDA Deutsche Sparkassen Leasing do Brasil S.A. As of: February 2017 As of: February

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GROUP INFORMATION

Deutsche Leasing Group – The solution experts

Deutsche Sparkassen Leasing AG & Co. KG Owners: around 400 savings banks, directly or through associated companies

Mobile Equipment/Real Estate Leasing International Business

Deutsche Leasing AG 3 100 percent Deutsche Leasing Austria GmbH 100 percent Deutsche Leasing Italia S.p.A. 100 percent (Vienna) Deutsche Leasing Operativo S.r.l. Deutsche Leasing 100 percent (Milan) für Sparkassen und Mittelstand GmbH3 Deutsche Leasing Benelux N.V. 100 percent Deutsche Leasing Nederland B. V. 100 percent Deutsche Leasing Fleet GmbH 3 100 percent (Antwerp) (Amsterdam) Deutsche Leasing 100 percent 3 Information Technology GmbH Deutsche Leasing Bulgaria EAD 100 percent Deutsche Leasing Polska S.A. 100 percent Deutsche Leasing International GmbH 3 100 percent (Sofia) (Warsaw)

DAL Deutsche Anlagen-Leasing GmbH & Co. KG 99.8 percent Deutsche Leasing Canada, Corp. 100 percent Deutsche Leasing Romania IFN S.A. 100 percent (Halifax) Deutsche Leasing Romania Operational SRL (Bucharest) Deutsche Leasing (China) Co., Ltd. 100 percent Deutsche Leasing Slovakia, spol. s r.o. 100 percent (Shanghai) (Bratislava)

Deutsche Leasing CˇR, spol. s r.o. 100 percent Deutsche Leasing Sverige AB 100 percent (Prague) (Stockholm)

Deutsche Leasing Ibérica, E.F.C., S.A. 100 percent Deutsche Leasing (UK) Limited 100 percent DL Ibérica EquipRent, S.A. (London) (Barcelona) Deutsche Leasing France S.A.S. 100 percent Deutsche Leasing USA, Inc. 100 percent Deutsche Leasing France Operating S.A.S. (Chicago) (Paris) Deutsche Leasing Funding B. V. 100 percent Deutsche Leasing Vostok AG 100 percent (Amsterdam) (Moscow)

Deutsche Leasing Hungária Kft. 100 percent Locadora DL do Brasil LTDA 100 percent Deutsche Leasing Hungária Zrt. Deutsche Sparkassen Leasing do Brasil S.A. (Budapest) (São Paulo) Deutsche Leasing (Ireland) Limited 100 percent (Dublin)

3 As of: February 2017 As of: February profit and loss transfer agreement

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Deutsche Sparkassen Leasing AG & Co. KG Owners: around 400 savings banks, directly or through associated companies

International Business Banking

Deutsche Leasing Austria GmbH 100 percent Deutsche Leasing Italia S.p.A. 100 percent Deutsche Leasing Finance GmbH 3 100 percent (Vienna) Deutsche Leasing Operativo S.r.l. S-Kreditpartner GmbH 33.3 percent (Milan) Deutsche Leasing Benelux N.V. 100 percent Deutsche Leasing Nederland B. V. 100 percent (Antwerp) (Amsterdam)

Deutsche Leasing Bulgaria EAD 100 percent Deutsche Leasing Polska S.A. 100 percent Factoring (Sofia) (Warsaw)

Deutsche Leasing Canada, Corp. 100 percent Deutsche Leasing Romania IFN S.A. 100 percent Deutsche Factoring Bank GmbH & Co. KG 53 percent (Halifax) Deutsche Leasing Romania Operational SRL (Bucharest) Deutsche Leasing (China) Co., Ltd. 100 percent Deutsche Leasing Slovakia, spol. s r.o. 100 percent (Shanghai) (Bratislava) Debt Management Deutsche Leasing CˇR, spol. s r.o. 100 percent Deutsche Leasing Sverige AB 100 percent (Prague) (Stockholm)

3 Deutsche Leasing Ibérica, E.F.C., S.A. 100 percent Deutsche Leasing (UK) Limited 100 percent BHS Bad Homburger Servicegesellschaft mbH 100 percent DL Ibérica EquipRent, S.A. (London) Bad Homburger Inkasso GmbH 47.4 percent (Barcelona) Deutsche Leasing France S.A.S. 100 percent Deutsche Leasing USA, Inc. 100 percent Deutsche Leasing France Operating S.A.S. (Chicago) (Paris) Deutsche Leasing Funding B. V. 100 percent Deutsche Leasing Vostok AG 100 percent Remarketing (Amsterdam) (Moscow)

Deutsche Leasing Hungária Kft. 100 percent Locadora DL do Brasil LTDA 100 percent AutoExpo Deutsche Auto-Markt GmbH 3 100 percent Deutsche Leasing Hungária Zrt. Deutsche Sparkassen Leasing do Brasil S.A. (Budapest) (São Paulo) Deutsche Leasing (Ireland) Limited 100 percent (Dublin) Insurance

Deutsche Leasing Insurance Services GmbH 3 100 percent

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GROUP INFORMATION

Deutsche Sparkassen Leasing AG & Co. KG

Mobile Equipment/Real Estate Leasing

Deutsche Leasing AG Frölingstraße 15 – 31 61352 Bad Homburg v. d. Höhe Telephone +49 6172 88-00 Fax +49 6172 21332 www.deutsche-leasing.com www.sparkassen-leasing.de Deutsche Leasing für Sparkassen Telephone +49 6172 88-02 und Mittelstand GmbH Fax +49 6172 88-2512 Deutsche Leasing Fleet GmbH Telephone +49 6172 88-01 Fax +49 6172 24465 Deutsche Leasing Information Technology GmbH Telephone +49 6172 88-4000 Fax +49 6172 88-4088 Deutsche Leasing International GmbH Telephone +49 6172 88-06 Fax +49 6172 88-2146 DAL Deutsche Anlagen-Leasing GmbH & Co. KG Emy-Roeder-Straße 2 DAL Bautec Baumanagement und Beratung GmbH 55129 Mainz DAL Structured Finance GmbH Telefon +49 6131 804-0 Deutsche PPP Holding GmbH Fax +49 6131 804-1299 www.dal.de

Banking

Deutsche Leasing Finance GmbH Frölingstraße 15 – 31 61352 Bad Homburg v. d. Höhe Telephone +49 6172 88-04 Fax +49 6172 88-2799 www.deutsche-leasing-finance.com S-Kreditpartner GmbH Prinzregentenstraße 25 10715 Berlin Telephone +49 30 869711-400 Fax +49 30 869711-401 www.s-kreditpartner.de As of: February 2017 As of: February

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Factoring

Deutsche Factoring Bank GmbH & Co. KG Langenstraße 15 – 21 Location Bremen 28195 Bremen Telephone +49 421 3293-0 Fax +49 421 3293-110 www.universal-factoring.com Deutsche Factoring Bank GmbH & Co. KG Kreuzerkamp 7 – 11 Location Ratingen 40878 Ratingen Telephone +49 2102 3081-0 Fax +49 2102 3081-298 www.universal-factoring.com

Debt Management

Bad Homburger Inkasso GmbH Konrad-Adenauer-Allee 1 – 11 61118 Bad Vilbel Telephone +49 6101 98911-0 Fax +49 6101 98911-500 www.bad-homburger-inkasso.com

Remarketing

AutoExpo Deutsche Auto-Markt GmbH Rudolf-Diesel-Str. 7 35463 Fernwald Telephone +49 6404 9266-0 Fax +49 6404 9266-700 www.autoexpo.de

Insurance

Deutsche Leasing Insurance Services GmbH Frölingstraße 15 – 31 61352 Bad Homburg v. d. Höhe Telephone +49 6172 88-04 Fax +49 6172 88-2799 www.deutsche-leasing.com As of: February 2017 As of: February

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GROUP INFORMATION

Imprint

Publisher Deutsche Sparkassen Leasing AG & Co. KG Frölingstraße 15 – 31 61325 Bad Homburg v. d. Höhe Germany Telephone: +49 6172 88-00 Fax: +49 6172 21332 E-mail: [email protected] www.deutsche-leasing.com Project management, editor Carsten Lühr, Deutsche Leasing Group

Concept, design madkom M.A.D. Kommunikationsgesellschaft mbH www.madkom.com Translation media lingua translations GmbH, Berlin www.medialingua.de Picture credits Cover: iStock / aleksandarvelasevic, Cover (inside part): iStock / wektory- grafika, Jacket: iStock / Ani_Ka, iStock / Ani_Ka, iStock / FrankRamspott, p. 4: Christoph Papsch Photographie, p. 10: Kreissparkasse Köln, p. 12, p. 14: LINDER GmbH, p. 16: gettyimages / TongRo Images Inc, p. 18 Heike Lyding, p.19: iStock / PeopleImages, p. 20: iStock / republica, p. 22, p. 23: Karlsruher Verkehrsverbund (KVV), p. 24, p. 26, p. 27: Liebherr, p. 28: iStock / mf-guddyx, p. 31: BBR Automotive GmbH / Evelyn Mazanke Print Druck- und Verlagshaus Zarbock GmbH & Co. KG

Printed on chlorine-free bleached paper

5557.DL.UE.0317.DL.02-1.0.GB

Notice: This document is a translation of a duly approved German-language document and is provided for infor- mational purpose only. In the event of any discrepancy between the text of this translation and the text of the original German-language document, which this translation is intended to reflect, the text of the original German- language document shall prevail.

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