Our Business Is the Future Annual Report 2016 / 2017

OUR BUSINESS IS THE FUTURE ANNUAL REPORT 2016 / 2017

More in Sight Overview of Deutsche Leasing

Austria / Vienna Ireland / Dublin Romania / Bucharest

Belgium /Figures Antwerp inEUR million Italy / Milan 2016Russia / 2017 / Moscow2015 / 2016 2014 / 2015 2013 / 2014 2012 / 2013

Bulgaria / Sofia Luxembourg / Luxembourg Slovakia / Bratislava

Czech RepublicNew business/ Prague Netherlands / Amsterdam Spain / Barcelona France / ParisDeutsche Leasing Poland / Warsaw Sweden7.233 / Stockholm 7.229 6.871 6.767 6.580 Hungary / Budapest Portugal / Lisbon United Kingdom / London DAL 1.623 1.429 1.347 1.085 1.175

Deutsche Leasing Group 8.856 8.658 8.218 7.852 7.755

Assets under Management Deutsche Leasing 25.507 24.563 22.730 21.992 21.647

DAL 11.323 10.753 10.965 11.304 11.880 Deutsche Leasing Group 36.830 35.316 33.695 33.296 33.527

Balance sheet total 19.355 18.682 16.589 16.190 15.891

Net asset value 1.923 1.855 1.793 1.742 China / Shanghai1.666

Equity 799 765 673 629 596

Economic result 153 148 137 128 139

Employees

Deutsche Leasing 1.826 1.777 1.737 1.721 1.666

DAL 261 252 247 246 239

Participations 439 452 328 232 231 FACTS AND FIGURES FACTS

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

6 % Information and communication technology

2,2 Mrd. EUR 8 % Other Countries Real estate

10Deutsche % Leasing EnergyIN andGERMANY transport 54 % In Germany you benefit from our broad Machinerypresence. and Thanks to a nationwide network of branch offices equipment 6,7 Mrd. EUR and22 subsidiaries, % we can bring your investment ideas to life together with you at a local level. If you Germany areRoad a customer vehicles of one of the around 400 savings banks in Germany, you can obtain our finance and other services directly from your local savings bank. In partnership with Sparkassen-Finanzgruppe, our experts will support you together with your savings bank’s customer relationship managers in your local region.

For further information on Deutsche Leasing’s offices in Germany please visit  www.deutsche-leasing.com THE FUTURE IS OUR BUSINESS

Upgrading security, accelerating processes, strengthening our market position – the time to begin thinking about the future of our business is now. Deutsche Leasing is your partner for investments in the world of tomorrow. Your partner for tackling challenges. Your partner for shaping the future. 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 Belgium / Antwerp Italy / Milan Russia / Moscow 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 Czech Republic / Prague Netherlands / Amsterdam Spain / Barcelona or investor and reflect local conditions in your country. You will find in us a partner who France / Paris Poland / Warsaw Sweden / Stockholm thinks and acts as globally as you do yourself. Hungary / Budapest Portugal / Lisbon United Kingdom / London

Canada / Halifax USA / Chicago

China / Shanghai FACTS AND FIGURES FACTS

Brazil / São Paulo

Bad Homburg v. d. Höhe / Group Headquarters

Berlin / Eastern Region

Bremen / Deutsche Factoring Bank

Fernwald nr. Gießen / AutoExpo Hamburg / Northern Region Deutsche Leasing Leipzig / Eastern Region IN GERMANY Mainz / DAL Deutsche Anlagen-Leasing

Monheim / Western Region In Germany you benefit from our broad presence. Thanks to a nationwide network of branch offices München / Southern Region and subsidiaries, we can bring your investment ideas to life together with you at a local level. If you Münster / Western Region are a customer of one of the around 400 savings banks in Germany, you can obtain our finance and Nürnberg / 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  www.deutsche-leasing.com 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 Belgium / Antwerp Italy / Milan Russia / Moscow through our know-how and our leasing and other services, in your own language or in Bulgaria / Sofia Luxembourg / Luxembourg Slovakia / Bratislava

Canada / Halifax USA / Chicago

China / Shanghai FACTS AND FIGURES AND FIGURES FACTS FACTS

Brazil / São Paulo

Bad Homburg v. d. Höhe / Group Headquarters

Berlin / Eastern Region

Bremen / Deutsche Factoring Bank

Fernwald nr. Gießen / AutoExpo Hamburg / Northern Region Deutsche Leasing Leipzig / Eastern Region IN GERMANY Mainz / DAL Deutsche Anlagen-Leasing

For further information on Deutsche Leasing’s offices in Germany please visit  www.deutsche-leasing.com 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

/1 Our company

2 Management Board’s letter

8 Supervisory Board’s report

10 OUR BUSINESS IS THE FUTURE

10 A source of growth – Sparkasse Solutions from a single source

14 Maximising flexibility – Stahlkontor Liquid funds for solid steel

18 Boosting operational efficiency – CompuGroup Digitalisation in a software company

22 Successfully working together – Bystronic A financing alternative as a sales argument

26 Increasing planning security – Jandt Trust constitutes security

30 Expanding capacities – Fiege The right financing solution – satisfied customers

/2 Consolidated management report

36 Overview for the financial year and outlook

37 Basic information regarding the Deutsche Leasing Group

41 Economic report

53 Report on risks and opportunities and forecast report

64 Deutsche Sparkassen Leasing AG & Co. KG

Consolidated financial statements /3 70 Consolidated balance sheet

72 Consolidated statement of profit and loss

74 Notes to the consolidated financial statements

90 Statement of changes in equity

92 Statement of cash flows

Group information /4 97 Auditor’s report

98 Shareholders

99 Supervisory Board

101 Management Board

101 Senior Management

104 Corporate Structure

106 Addresses

108 Imprint 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING OUR COMPANY CONSOLIDATED MANAGEMENT REPORT MANAGEMENT CONSOLIDATED Our Company

2 Management Board’s letter

8 Supervisory Board’s report

10 OUR BUSINESS IS THE FUTURE CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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Kai Ostermann Chief Executive Officer

Friedrich Jüngling Management Board member

Rainer Weis Management Board member

Matthias Laukin Management Board member

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MANAGEMENT BOARD’S LETTER

Dear customers and business partners, we used the financial year 2016/2017 in order to initiate and follow through on targeted measures to ensure Deutsche Leasing’s successful future development.

Through our reorganisation in relation to our markets, we intend to fulfil our customers’ various needs in a more differentiated manner while exploiting Sparkassen-Finanz- gruppe’s potential even more effectively.

In our business with SME and savings banks customers, we offer a comprehensive service portfolio in the fields of leasing and movable investment asset financing, from solutions-oriented support for individual projects to processing of small-volume standard transactions. In the area of specialist transactions and project business, under the REPORT MANAGEMENT CONSOLIDATED umbrella of DAL Deutsche Anlagen-Leasing we aim to provide tailored and individual solutions for major, complex investments and to serve selected segments and growth areas in a targeted manner. For instance, we are able to develop new investment solutions from a single source in the IT and healthcare sectors as well as other industries. We envisage significant future growth opportunities here. Moreover, we intend to make even greater use of our asset competence for new products such as leasing solutions and services.

In order to exploit Sparkassen-Finanzgruppe’s potential in corporate customer business even more effectively in future, we have more strongly focused our distribution model on the savings banks’ customer segments, distribution structures and processes. In this context, Deutsche Leasing is also actively supporting the DSGV project “Future Sales Strategy for Corporate Customers”.

In our factoring business, we have embarked upon a broad-based and systematic approach for exploitation of this market, while focusing particularly strongly on intragroup business. This is an important step in order to further expand our position as STATEMENTS FINANCIAL CONSOLIDATED Sparkassen-Finanzgruppe’s centre of factoring excellence.

We aim to exploit the potential offered by digitalisation not only in supporting our customers’ investments but also in the development of new business models and the modernisation of our own IT systems. We will thus achieve greater efficiency and a more rapid and customer-oriented focus in our processes as well as in the management of our day-to-day business. Over the next few years our Digital Innovation Unit, which was established on 1 October 2017, will enable us to investigate digital ideas and inno- vations which are relevant for our business model in order to open up important future markets. We thus aim to deliberately gain fresh inspiration for our range of services and to follow through on it. GROUP INFORMATION GROUP

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Our ongoing development strategy has already delivered some initial successes in the financial year 2016/2017. With an increase in our volume of new business to EUR 8.9 billion, we once again confirmed our leading market position in Germany and among European leasing providers. At EUR 153 million, our economic result was higher than in the previous year.

The strong trend for the German economy – which was also supported by private consumption – remained intact in the financial year 2016/2017. Foreign trade provided strong momentum, once again strongly reinforcing the domestic upturn. Companies’ rising level of capacity utilisation resulted in a slight increase in the volume of investments.

At the same time, strong competitive and margin pressure became even tougher in the financial year 2016/2017. The ECB’s continuing expansionary monetary policy, with enduring low interest rates, was a key reason for the intensification of this trend.

Two factors played a decisive role in the positive development of Deutsche Leasing: On the one hand, most of the Group’s foreign companies significantly increased their volume of new business. The economic recovery of the BRIC countries in 2017 also had a supportive effect on Deutsche Leasing’s business development. On the other hand, the transport and real estate segments of DAL Deutsche Anlagen-Leasing achieved above-average performances.

The picture for the individual business segments was mixed in the financial year 2016/2017

||In the machinery and equipment segment, we achieved a growth level of 3 per cent by comparison with the previous year. Our foreign companies accounted for much of this trend.

||Our road vehicles segment failed to match its particularly successful performance in the previous year. This mainly reflected the strong competitive and price pressure affecting fleet business as well as the “diesel issue”. Overall, our volume of new business here was 6 per cent lower than in the previous year.

||Business in the information and communication technology segment was at the same level as in the previous year. In the hardware sector especially, the volume of business increased on the previous year, while the software sector registered a slight decline.

||The energy and transport segments were characterised by two opposing trends. The transport segment once again increased its volume of new business in the year under review. In particular, rail-based local public transport generated several major projects. The market changes resulting from the amendment of the German Renew- able Energy Act (Erneuerbare-Energien-Gesetz, EEG) in 2017 adversely affected the development of the energy segment.

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||In then real estate segment, we boosted our business by 45 per cent on the previous year thanks to several large-scale projects. Here, it is clear that DAL Deutsche Anlagen-Leasing is well-positioned on the market as a specialist for the arrangement and structuring of long-term real estate projects. DAL Bautec ensured successful construction management for a large number of projects.

Overall, we registered new business growth for the seventh consecutive year. The fact that the Deutsche Leasing Group has strongly positioned itself as an all-round provider with a broad range of financing solutions for investments, including supplementary services, has contributed to this continuous business development. Targeted diversification across a range of different countries, regions, distribution channels and product offerings is successfully contributing to sustained development.

Our investments likewise developed positively and contributed to our successful financial year 2016/2017

||Deutsche Factoring Bank achieved a factoring volume of EUR 16.7 billion. It has thus REPORT MANAGEMENT CONSOLIDATED outperformed the market in terms of its growth. Through Deutsche Factoring Bank, we offer our customers and the savings banks’ customers comprehensive solutions in the field of receivables financing and debt management. We thus round off our range of services aimed at the SME sector.

||Bad Homburger Inkasso (BHI) – an associated company of the Deutsche Leasing Group – offers bad loan solutions as well as the market-oriented resale of movable and real estate collateral. Its customers include its shareholders, the savings banks as well as further companies and institutions. It gained many new customers last year, particularly in the housing sector. With the establishment of AKG ImmoPlus, a joint venture with a subsidiary of Deutsche Kreditbank AG, we are now able to offer our customers – primarily, the savings banks – the opportunity to purchase bad debt secured by real estate.

||S-Kreditpartner, a joint venture of Deutsche Leasing and Sparkasse Berlin, achieved further growth in the car and consumer finance business sectors with a loan volume of EUR 5.8 billion as of late 2017. It owes this to its growing business through existing STATEMENTS FINANCIAL CONSOLIDATED partnerships with savings banks as well as its successful initiation and development of new fully-fledged partnerships with other savings banks. Moreover, 283 savings banks have now entered into partnerships with S-Kreditpartner for the online product “S-Kredit-per-Klick”. GROUP INFORMATION GROUP

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Outlook for the financial year 2017/2018

Through the measures which we have implemented for Deutsche Leasing’s future development, in the financial year 2016/2017 we focused even more strongly on the requirements of our customers and partners. We will now exploit this strategy in order to realise our growth opportunities on the market.

We see intragroup business with the savings banks as one of the Group’s largest growth areas. Having been successfully opened up, this business segment is undergoing intensification and development in close cooperation with the individual institutions and with the firm involvement of regional associations and leasing advisory boards. We are thus better able to exploit our joint intragroup market potential. Business with smaller corporate, business and commercial customers is a particular area of focus for the next few years.

International business remains a further growth field for Deutsche Leasing. The German business sector’s strong export focus and international presence offers us market opportunities which we access through our foreign network in 22 countries. For instance, leasing is an important sales financing tool for manufacturers of investment goods. As vendor partners of Deutsche Leasing, through our foreign companies they can offer their customers the right financing solution for the investment asset in question straight away. We also support German companies and their international subsidiaries with direct investments outside Germany. Within Sparkassen-Finanzgruppe, through its International business segment Deutsche Leasing serves as an international asset finance and asset service centre of excellence.

The factoring business continues to offer significant growth potential for Deutsche Leasing. The sale of receivables is an increasingly important component of the financing mix for many SMEs. Existing factoring potential is realised through the following distribution channels: the savings banks, intermediaries and direct distribution. For this purpose, Deutsche Factoring Bank offers services from traditional factoring to solutions which are individually tailored to customers’ specific needs.

We envisage additional revenue potential in the development of our insurance brokerage services, which are offered as a supplementary service to our asset finance solutions. In principle, in future each of Deutsche Leasing’s solutions is to include an insurance component. The customers of Deutsche Leasing and the savings banks will thus receive services from a single source.

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

For the financial year 2017/2018, we continue to envisage a positive trend in terms of the overall economic environment. However, there is still some uncertainty regarding economic and political trends. Moreover, for the next few years a persistently low interest-rate level must be expected which will continue to have an adverse impact; there is no prospect of a rapid return to a higher interest-rate level.

Thanks to our anchoring within the Sparkasse group, our market position and the above-mentioned future strategy which we have adopted, Deutsche Leasing is ideally prepared so as to exploit the opportunities and development potential available on the asset finance market.

We will further strengthen our role within the Sparkasse group, achieve growth in our target markets and once again boost our capacity. In doing so, we will always have an eye on the satisfaction of our customers and our partners. With farsighted business acumen, we will thus safeguard the future success of the Deutsche Leasing Group.

We would like to thank our customers, the savings banks and our partners for their REPORT MANAGEMENT CONSOLIDATED confidence in the Deutsche Leasing Group. We would also like to thank our employees in Germany and other countries for the considerable commitment which they displayed in the financial year 2016/2017.

Together with you, through our investment solutions we will successfully push forward with “The Future of Our Business”.

Kai Ostermann Friedrich Jüngling Matthias Laukin Rainer Weis CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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Alexander Wüerst SUPERVISORY Chairman BOARD’S 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 notified of the company’s development and entailed detailed reporting from the Manage- of important business transactions. All key ment Board on commercial and risk policy, questions concerning the company’s position outline economic conditions, the financial and and development, strategic and operational profit situation and planning as well as related planning, risk management and regulatory discussions. Investment issues, realisation of requirements were extensively discussed. In the Group’s foreign strategy and regulatory regular communication between the chairman requirements were discussed in detail with the of the Supervisory Board and the chairman Management Board. of the Management Board of the managing shareholder, current operational matters were Issues of particular relevance were followed up discussed and strategic planning was initiated. in greater depth in committee meetings.

Structure of the Supervisory Board The loans and investments committee held detailed discussions concerning risk decisions As of 30 September 2017, the Supervisory on commitments beyond the scope of the Man- Board consisted of 20 persons, almost all of agement Board’s responsibility as well as risk whom were Management Board members policy issues for the company, and intensively of savings banks. To improve the efficiency prepared Supervisory Board resolutions in the of its operations, the Supervisory Board has field of investments. established two committees: a loans and investments committee and an audit committee. At a total of three meetings, the audit commit- The Supervisory Board is comprehensively tee focused on the following issues: the finan- notified of the agenda and outcome of meet- cial statements and the summarised manage- ings of these committees through the commitment report of Deutsche Sparkassen Leasing tee chairman at regular meetings and through AG & Co. KG and the Group and also, with the receipt of the minutes. auditor, its audit findings, in preparation for

8 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

the Supervisory Board’s financial statements Following its own audit and discussion of the meeting. The auditor’s findings concerning the financial statements and the summarised supervisory requirements relating to the audit management report with the appointed audi- of the financial statements and the summa- tor, the Supervisory Board has approved the rised management report of Deutsche Spar- auditor’s audit findings and has not raised any kassen Leasing AG & Co. KG as of 30 September objections. The Supervisory Board endorses 2017 as well as the appendix were extensively the financial statements presented to it and reviewed. The audit committee also discussed proposes the approval of the financial state- medium-term equity planning in detail. ments by the shareholders’ meeting.

The Supervisory Board verified the orderliness Proposal for appropriation of profits of the company’s management and made all decisions which were required of it and which The Supervisory Board has discussed the fell within the scope of its competence. It was proposal for appropriation of the profit for involved in decisions of material significance the year and recommends the shareholders to for the company and, where necessary, provid- allocate an amount of EUR 10,285,554.11 out of ed its consent, following an extensive discus- the parent company’s net income for the year sion and review process. The Supervisory of EUR 45,285,554.11 to the non-withdrawable

Board discussed with the Management Board reserves. REPORT MANAGEMENT CONSOLIDATED the company’s strategy and resulting measures for realisation of its medium- and long-term The Supervisory Board would like to thank the goals and provided its approval. members of the Supervisory Board who retired during the year under review, Mr Rainer Financial statements and consolidated financial Burghardt and Mr Burkhard Wittmacher, for statements their valuable service. The Supervisory Board would also like to express its thanks and recog- KPMG AG Wirtschaftsprüfungsgesellschaft has nition to the Management Board and to all of been appointed as the auditor and has issued the company’s employees for their sustained unqualified auditor’s reports for the financial commitment and for all of their work in the statements of Deutsche Sparkassen Leasing financial year 2016/2017. AG & Co. KG and the Group for the financial year 2016/2017 as well as the summarised Bad Homburg v. d. Höhe, management report. The auditor has notified February 2018 the Supervisory Board’s audit committee of its audit findings and has discussed them in For the Supervisory Board detail with its members. The audit committee STATEMENTS FINANCIAL CONSOLIDATED has notified the Supervisory Board of the outcome of its review of the auditor’s reports and its discussions and has recommended the Alexander Wüerst endorsement of the financial statements and Chairman the consolidated financial statements and the presentation of the financial statements to the shareholders’ meeting for approval.

The auditor has provided a comprehensive report on its audit findings at the Supervisory Board’s financial statements meeting and has replied to questions. GROUP INFORMATION GROUP

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Financing the SME sector A source of growth 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

3.4 53.676When companies have growth plans, they need to invest. New real estate, a bigger fleet or ramping up machine

capacities often means large investment REPORT MANAGEMENT CONSOLIDATED volumes. The savings banks play a key role here since they are the number one provider of financing for the SME sector in Germany. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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Financing the SME sector This3.4 is the total number of small and medium-sized 53.676 enterprises in Germany (source: IfM Bonn). With its many institutions and group partners, Sparkas- sen-Finanzgruppe comprehensively covers the financing requirements of companies and pri- A source vate customers in Germany of growth

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3.4 53.676When companies have growth plans, We financed 51 they need to invest. New real estate, new buses for Transdev Rhein-Main GmbH in a bigger fleet or ramping up machine Bad Homburg, Oberursel and Friedrichsdorf – a modern fleet for local public transport. capacities often means large investment REPORT MANAGEMENT CONSOLIDATED volumes. The savings banks play a key

per cent role here since they are the number one A discount of up to 30 provider of financing for the SME sector in through an employee loyalty programme. Em- Germany. ployees of Taunus Sparkasse receive computers, software and smartphones on great terms – for their personal use. The whole thing works by means of a salary conversion model. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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SOLUTIONS FROM A SINGLE SOURCE

Taunus Sparkasse and the Deutsche Leasing Group provide tailored investment solutions

For its corporate customers in Germany’s Hochtaunuskreis and Main-Taunus-Kreis regions, Oliver Klink Taunus Sparkasse develops financing concepts to Chief Executive Officer of Taunus Sparkasse ensure their growth. Together with the Deutsche Leasing Group, it is able to offer solutions to suit every investment project. The customers of Taunus Sparkasse also benefit from the security and flexibility of the Sparkasse group. Read more What does your region’s corporate customer in the following interview with Oliver Klink, Chief portfolio look like? Executive Officer of Taunus Sparkasse. Our customers are really exciting – not just the Mr Klink, the savings banks are the number one start-ups, but also the many traditional busi- provider of financing for the SME sector in Ger- nesses. It’s the corner shop bakers and retailers many. Which particular challenges do you envis- just as much as a mechanical engineer or a age for the SME sector’s investment projects world market leader in the petrochemical sec- and specifically for companies in your region? tor. We are present in many industries whose growth is quite dynamic in some cases. Our Above all, digitalisation is one of the biggest core focus is on service providers, followed by challenges. It means that companies are faced the real estate sector. But we have equally suc- with ever shorter innovation cycles. In some cessful customers in the building technology cases, they are no longer able to manage and circuit board industries. We do not finance things over a long-term perspective and can all of this growth on our own and often turn to often only do so on a short-term basis. More Deutsche Leasing for support. ground-breaking decisions need to be taken at shorter intervals. What’s more, many com- Could you state a few specific examples of panies are faced with a changeover from one services that you joined forces with Deutsche generation to the next. This is a major issue, in Leasing for in order to give your corporate our region as well. customers a certain added value?

As you can see, the SME sector once again has The Deutsche Leasing Group is traditionally a need for real businessmen who are able to our partner for major investment projects in prioritise. They’re not interested in grappling the real estate sector. This often involves syndi- with financing issues and their complexity, cated financing arrangements within Sparkas- and instead want reliable partners who will sen-Finanzgruppe. For example, we financed a take charge of this on their behalf. It’s not all logistics hub with an eight-digit volume. Other just about cheap loans anymore; quick and savings banks also participated in this syndica- intelligent solutions are being demanded now. ted structure – this demonstrates the strength And we offer those in every possible combina- of Sparkassen-Finanzgruppe. Together we can tion – leasing, factoring, public development handle even really big projects. funds and, of course, traditional working capital lines.

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Which recent projects have stood out in Deutsche Leasing is a reliable partner for us particular? with our growth strategy. How do we notice that? Our colleagues at Deutsche Leasing do In 2016, we launched an employee loyalty pro- not limit themselves to managing existing gramme in cooperation with Deutsche Leasing. assets. Instead, they regularly approach us Employees of Taunus Sparkasse receive com- with best practice examples. puters, software and smartphones on great terms – for their personal use. The whole thing We appreciate and recognise their expertise. works by means of a salary conversion model, And in those exceptional cases when with savings of 30 per cent. something doesn’t go quite as planned and customers are disgruntled, the Management Here‘s another example: We financed 51 new Board of Deutsche Leasing gets involved direc- buses for Transdev Rhein-Main GmbH in Bad tly. Many things can be easily sorted out in a Homburg, Oberursel and Friedrichsdorf – a personal meeting. modern fleet for local public transport. The new models generate a lot less noise and pollu- How important to you is the support provided tion, which people notice immediately. And by the Savings Banks Advisory Team and the then there’s our motto: Do good things and talk sales trainers at Deutsche Leasing? about it. You can see that on our joint adverti- REPORT MANAGEMENT CONSOLIDATED sing, which appears on buses. The particularly With its training components and models for nice thing is that Taunus Sparkasse is actually acquiring new business, the Savings Bank in the foreground here. Advisory Team has a long track record of success. Although to be honest, we didn’t give the How do your corporate customers benefit from members of the Advisory Team an easy time in the relationship between Taunus Sparkasse and the beginning. It takes some doing to win over Deutsche Leasing? an experienced corporate customers account manager – but they succeeded. Then the bene- Deutsche Leasing is the market leader in Ger- fits of the relationship soon became apparent. many – many customers are aware of that, and they appreciate that fact. What joint future goals do you share with the Deutsche Leasing Group? Leasing offers our customers the traditional benefits in terms of solvency management. From a sales point of view, we have one The available leeway in their balance sheets particular strategic area of focus – the further has a positive impact on their capital ratio, expansion of small ticket business. This relates total capital and debt-to-equity ratio and pre- to our customers’ smaller investments. Deut- STATEMENTS FINANCIAL CONSOLIDATED serves their financing flexibility. sche Leasing’s S-Direkt and DL-Direkt product lines have many solid qualities. They are lean, Moreover, many of our customers are world simple, modern, fast and efficient, especially market leaders. With Deutsche Leasing’s for business transactions of up to EUR 150,000. strong structures in the world’s key growth Our customers benefit from the convenient regions, we can closely and successfully sup- handling of their investments – and that will port international customers in global markets. continue to grow in future.

What do you particularly appreciate about working with the Deutsche Leasing Group in developing the corporate customer segment, both in terms of smaller investments for business and commercial customers and in relation to larger investments for corporate customers? INFORMATION GROUP

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The sale of receivables safeguards liquidity Maximising flexibility

14 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING € Everything went quite quickly, from the decision to replace the company’s old factoring provider to the start

of its cooperation with its new factoring REPORT MANAGEMENT CONSOLIDATED provider. It took just eight weeks until Deutsche Factoring Bank, a Deutsche Leasing Group company, and Stahlkontor were able to launch their partnership in the field of debt management. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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The sale of receivables safeguards500 liquidity .000 Through an open-ended convenience factoring arrangement, Deutsche Factoring Bank will purchase any customer invoice amount – from EUR 500 to EUR 500,000. It will even do so outside Germany. For firms such as Stahlkontor GmbH Maximising& Co. KG, whose daily business involves processing expensive high-strength steel, large amounts of money are an everyday occur- rence. It therefore needs adequate liquidity to safeguard its operations. The sale of receivables can help to ensure this, flexibility while also protecting against default.

1418 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING 500 .000 € Everything went quite quickly, from 240 customers were changed over to the decision to replace the compa- Deutsche Factoring Bank as their new factor. ny’s old factoring provider to the start

of its cooperation with its new factoring REPORT MANAGEMENT CONSOLIDATED provider. It took just eight weeks until Some 8 weeks later, the transition process was complete. Deutsche Factoring Bank, a Deutsche Leasing Group company, and Stahlkontor were able to launch their partnership in the field of debt management. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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LIQUID FUNDS FOR SOLID STEEL

Steel is an indispensable material for trans- Factoring provides transparency and security portation. When “the going gets tough” (to use Stahlkontor’s slogan), this solid metal is in Stahlkontor has been working with Deutsche demand for providing stability to load-bearing Factoring Bank since April 2017 and appre- parts. Whether it’s for structural elements ciates the transparency in their day-to-day for aircraft, as a bodywork part for cars or to business relationship. But the start of their provide protection for armoured vehicles. For partnership was challenging: 240 customers more than 110 years, Stahlkontor has been were changed over to Deutsche Factoring Bank active in the field of contract manufacturing of as their new factor. “Deutsche Factoring Bank high-strength steel components and now gene- achieved that smoothly. Within eight weeks rates a significant part of its revenue outside everything had been resolved and the tran- Germany. sition process was complete,” says Mr Lehne with a smile. The personal preparations ahead This Hagen-based company has used factoring of the launch helped with this. “It’s important since 1993 in order to obtain the necessary for us to get to know our customers before we liquidity to purchase its costly materials. “For begin working together through a personal us, the advantages are obvious. We are reim- meeting and to clarify all of the technical bursed our customers’ outstanding invoice details in advance,” says Mr Breuer. amounts within 24 hours and are even protected in case of default. There’s also no need “We are more than satisfied with our decision to worry about dunning since the factor looks to work with Deutsche Factoring Bank. Every after that as well,” says Rainer Lehne, Commer- day, our new partner provides us with all the cial Director at Stahlkontor GmbH & Co. KG. information we need – such as which customers have deducted a cash discount for quick The sale of receivables offers two further key payment, or the current balance of unpaid advantages: Besides the liquidity which is receivables,” says Mr Lehne. immediately available and the associated increased financial leeway, factoring makes it As this company’s main bank, Sparkasse possible for a company to optimise its balance HagenHerdecke made contact with the Spar- sheet structures and to increase its capital ratio. kasse group partner.

“This is important for companies such as Stahl- A strong relationship is reflected above all kontor in particular, which work with costly in the cooperative nature of the partnership raw materials and would otherwise soon reach during unexpected and unusual situations. their limits when using their own financial “One of our largest customers had exhausted resources,” says Christian Breuer, who looks its credit limit and the customer had defaul- after Stahlkontor as the Deputy Sales Manager ted. But instead of cancelling the limit, which of Deutsche Factoring Bank. would be the normal procedure, and thus annoying one of our most important customers, Deutsche Factoring Bank understood our situation and came up with a solution that enabled us to sort out the problem with our customer directly,” says Mr Lehne.

16 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

Deutsche Factoring Bank now covers almost solution for this. DAL’s experts provided its 80 per cent of the receivables of this steel spe- customer Stahlkontor with legal and tax advice. cialist, whose clientele includes major customers in the aviation and defence industries, Stahlkontor was familiar with the Deutsche through an open-ended convenience factoring Leasing Group’s products long before 2017: arrangement. It purchases any customer invoice “For real estate and machine leasing, we have amount – from EUR 500 to EUR 500,000. It long relied upon the competence of the will even do so outside Germany: Deutsche Deutsche Leasing Group,” says Mr Lehne. “The Factoring Bank purchases receivables in every Sparkassen-Finanzgruppe companies offer EU country as well as Norway and Switzerland. us an all-round package and have played a “The ability to also handle our foreign receivab- significant role in improving our liquidity les through Deutsche Factoring Bank makes and our capital ratio, while enabling growth

our work considerably easier,” Mr Lehne is at our headquarters thanks to the warehouse REPORT MANAGEMENT CONSOLIDATED convinced. concept.” Mr Breuer adds: “This is precisely in keeping with our view of ourselves as an asset Group provides for maximum strength finance partner that not only offers its customers a broad range of individual financing In addition to factoring, since September Stahl- solutions, but also supports them with supple- kontor has been using another Deutsche Lea- mentary services.” sing Group financing instrument to optimise its balance sheet figures – namely warehouse Stahlkontor was particularly impressed with financing. When one of its biggest customers the target-oriented nature of this partnership: wanted Stahlkontor to look after all of the titanium precursor material for its manufacturing, including the order and administrative process, this would have placed an excessive strain on the balance sheet ratio and thus the capital ratio of this Hagen company.

The solution was for it to establish its own STATEMENTS FINANCIAL CONSOLIDATED warehouse company through Deutsche An- lagen-Leasing (DAL). Stahlkontor is thus able “We’ve found that Deutsche Leasing, to withdraw material and to settle up with its warehouse company. This requires a complex DAL and Deutsche Factoring Bank contract structure. DAL helped to develop a always deal with our issues quickly, tailored solution for this. DAL’s experts provided its customer Stahlkontor with legal advice. with a focus on providing solu- The solution was for it to establish its own tions. They respond directly to any warehouse company through Deutsche An- problem with proposed solutions. lagen-Leasing (DAL). Stahlkontor is thus able to withdraw material and to settle up with its Everything is adapted in line with warehouse company. This requires a complex our needs.” contract structure. DAL developed a tailored Rainer Lehne, Commercial Director at Stahlkontor GmbH & Co. KG INFORMATION GROUP

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OUR COMPANY

How alternative financing models drive processes forward Boosting operational efficiency

18 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING arrow-right 1 Everyone is talking about digitalisation and nearly every company is thinking about it, too. Digital solutions offer considerable potential for

process optimisation. The example of the REPORT MANAGEMENT CONSOLIDATED software provider CompuGroup Medical SE goes to show that investing in the consistent digitalisation of workflows can secure important competitive advantages for companies CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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OUR COMPANY >

The leading world e-health business Compu- Group had so many100 different internal systems in use before it introduced a uniform software solution for all of its divisions and locations. This has not only established a global quality and process standard, but also brought down the costs

How alternative financing models drive processes forward Boosting operational efficiency

1824 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING arrow-right 1 Everyone is talking about digitalisation and nearly every company is thinking about it, too. Digital solu- > tions offer considerable potential for

process optimisation. The example of the REPORT MANAGEMENT CONSOLIDATED The acquisition of its new SAP system cost CompuGroup software provider CompuGroup Medical a mid-range eight-digit figure. Thanks to Deutsche SE goes to show that investing in the 100Leasing, financing of this intangible good was easy. What is particularly unusual is that Deutsche consistent digitalisation of workflows can Leasing’s financing solution covers not just the secure important competitive advantages external purchasing costs, but also the internal for companies implementation costs CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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OUR COMPANY

DIGITALISATION IN A SOFTWARE COMPANY

400,000 customers and 4,500 employees New software enables global best practice in 19 countries: As a developer of software standard products and communications solutions for doctors, dentists and hospitals, CompuGroup As so-called intangible assets, software and has enjoyed continuous growth and become licences pose particular challenges. “As a rule, the international market leader in the field of a conventional bank loan is not possible since e-health. But such complex structures, which licences for instance cannot be counted as are also permanently growing, are making it collateral. With our concept, we were nonethe- increasingly difficult to standardise processes less able to enable CompuGroup to realise its and products. The company had more than investment,” Gökhan Tunali, the competent 100 different internal systems in use before advisor at Deutsche Leasing, explains. this expert for the safe exchange of medical data decided to introduce a uniform enterprise Due to its practical experience with similar resource planning and customer relationship projects, Deutsche Leasing recommended soft- management system at all of its locations. ware leasing. “The advantages are obvious: The resulting costs can be distributed throughout Its goal was to digitalise every workflow within the usage period and there is no dual burden the company and to introduce a uniform global of two different systems during the transition group standard. From now on, all data would phase,” says Tunali of the fresh perspective be entered in a central system and processes which he and his team offered CompuGroup at digitally optimised. The objective was to achieve the outset. a further improvement in its operational efficiency.

The costs for this entirely SAP-based solution were in the eight-digit range. In particular, the expenses for customisation in line with the requirements of this software-assisted medicine service provider were a major expense item. After all, the new system needed to be a custom fit, covering the tasks for every division of the company – from standardised support for product training to marketing and accounts.

“What convinced us is that leasing provides us with not just a financing instrument, but also a monitoring and control instrument, while keeping full control of amortisation throughout.”

Christian B. Teig, Head of Finance at CompuGroup

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

Deutsche Leasing stands out due to its flexibility and dynamism

At the same time, CompuGroup benefits from Deutsche Leasing’s holistic approach: “Through this leasing solution, we not only cover the external costs for licences and customisation, but also the expenses for implementation and internal processes,” Tunali comments.

At the suggestion of Deutsche Leasing, this investment was handled through a general contractor agreement. “This enables a lean and elegant contract structure and optimal synchronisation of all of the costs. This even covers the expenses which arise before the actual introduction of the system,” remarks

Tunali. REPORT MANAGEMENT CONSOLIDATED

Faster processes, falling costs

This new system has now been introduced at 80 per cent of the company’s locations – from Koblenz and Kuala Lumpur to Johannesburg. The remaining branch offices are set to follow suit in the first quarter of 2018. The provisional assessment of this new software solution and of Deutsche Leasing’s financing solution is consistently positive: “Not only do we have faster processes and falling costs, we have also achieved a structural and technical improvement while significantly improving the level of transparency through out investment,” Teig is convinced. This successful partnership is also reflected in day-to-day cooperation: STATEMENTS FINANCIAL CONSOLIDATED

“Deutsche Leasing operates prag- matically and rapidly and makes it easy for us to work with them – there’s no bureaucracy.”

Christian B. Teig, Head of Finance at CompuGroup INFORMATION GROUP

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OUR COMPANY

Virtual Captive provides greater flexibility for Bystronic customers Successfully working together 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

Cutting, bending, automation: It is not only the machines which achieve extraordinary things at this globally

active provider of sheet metal working REPORT MANAGEMENT CONSOLIDATED solutions, Bystronic. The same is true of the company itself with its ambitious turnover targets. The financing opportunities, which this company offers its customers through its partnership with Deutsche Leasing to enable them to purchase its manufacturing solutions, play a significant role in this. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP / 1

OUR COMPANY

Virtual Captive provides greater flexibility for Bystronic customers countries And not just in Germany: Bystronic is working with this asset finance partner in all of the 22 other coun- Successfully23tries where Deutsche Leasing is represented. working together

30 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

countries Since the start of its partnership with Deutsche Leasing Cutting, bending, automation: It is in the area of sales financing, this Swiss technology firm not only the machines which achieve has been able to expand its range of flexible financing 23 extraordinary things at this globally solutions. Ever more Bystronic customers now rely on a

Deutsche Leasing financing product active provider of sheet metal working REPORT MANAGEMENT CONSOLIDATED solutions, Bystronic. The same is true of the company itself with its ambitious turnover targets. The financing opportunities, which this company offers its customers through its partnership with Deutsche Leasing to enable them to purchase its manufacturing solutions, play a significant role in this. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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A FINANCING ALTERNATIVE AS A SALES ARGUMENT

If you have lofty goals, then you must keep Virtual Captive as a source of revenue a close eye on all of your activities. This is precisely what Bystronic has increasingly Having met all of these criteria, Deutsche done since 2015. Flexible financing solutions Leasing – with which Bystronic had already have emerged as a key option which provides worked together in several countries since international customers with access to Byst- 2006 – emerged successfully from the search ronic technologies. In this context, this Swiss process. The key factor was its particularly technology firm sought out the right financing flexible financing model: Virtual Captive. partner to enable it to leverage its potential. “Virtual Captive is a partnership between the manufacturer and Deutsche Leasing throug- The criteria for the search process were clearly hout the sales financing process. The manufac- defined: As a globally active technology pro- turer continues to handle customer relation- vider, its partner should also have an interna- ships, while Deutsche Leasing is responsible tional network, offer flexible solutions in line for the leasing business,” says Markus Wiesler, with its customers’ needs and, above all, have Global Vendor Manager at Deutsche Leasing. an understanding of its business and products. In concrete terms this means that, together with Deutsche Leasing, as a vendor Bystronic can offer its system solutions as a package together with a tailored financing solution without setting up its own leasing company. The manufacturer thus secures an important competitive advantage by offering integrated financing – with not much in the way of administrative requirements.

This strategy has paid off: Since the launch of this financing solution with its partner Deutsche Leasing, there has been a very stable positive trend.

For customers with limited financial leeway, the purchasing costs for this sheet metal working expert’s laser cutting systems repre- “The hard figures reveal the success sent a major investment volume which they can generally only cope with by means of a of our joint solution: In the first ten financing arrangement. months of 2017 alone, we considerably boosted our joint volume of new business and signed significantly more customer contracts.”

Lukas Wichert, Global Vendor Finance Manager at Bystronic

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

Flexible solutions for investments Personal support and a genuine partnership

“Together with Deutsche Leasing, we can now But this cooperation succeeds not only on the offer our customers the right financing option – strength of the versatile options which Bystronic including very flexible models such as the ‘pay- is able to offer its customers. It is above all the as-you-earn’ principle where our customers personal relationship which is a hallmark of REPORT MANAGEMENT CONSOLIDATED only start paying once their acquisition begins this partnership. “For us, besides covering our to generate income for them. We and our international markets, close personal support customers benefit from this alike,” Wichert was a key consideration,” says Wichert. continues. The Virtual Captive model enables precisely These joint financing solutions have been so this sort of intensive support: At Bystronic, well received on the market that Bystronic is now only Lukas Wichert is responsible for sales selling a large number of machines together financing. Deutsche Leasing handles all of the with Deutsche Leasing solutions. In this financing solutions directly, on site. company’s various markets, its asset finance partner provides a broad range of financing models which Bystronic can now offer its customers – from retail via leasing and hire- purchase to loans – together with supporting asset services. “Our asset insurance policies present Bystronic with another sales argument. They help customers to cover unforeseen STATEMENTS FINANCIAL CONSOLIDATED losses – either in the form of a fire insurance “I greatly appreciate the fact that I policy or as an asset-based policy. can not only talk to the competent

And not just in Germany: Bystronic is working advisor, but also directly get in touch with this asset finance partner in all of the with the contracts department 22 other countries where Deutsche Leasing is represented. “Thanks to our close partner- of Deutsche Leasing, for instance. ship with Deutsche Leasing, it is as if we had Whenever I do so, the people I talk to our own financing company. This enables us are always well qualified. That is the to offer our customers worldwide financing solutions for their investment,” says Wichert, key point for me. After all, the finance pleased. business is a people business.” GROUP INFORMATION GROUP Lukas Wichert, Global Vendor Finance Manager at Bystronic

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OUR COMPANY

Realising major investments transparently and according to plan, with tailored financing solutions Increasing planning security

26 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

Whether it’s repairs to windmills or carrying heavy loads, Bielefeld’s Jandt Kranvermietung GmbH takes care of the big jobs every day. The

company offers a full range of crane and REPORT MANAGEMENT CONSOLIDATED lifting operations as well as transporta- tion of heavy loads plus related services in Germany and neighbouring countries. Investments in its machine pool are essential but entail high costs, which it can scarcely handle through its capital resources alone. That’s why Jandt has closely cooperated with Sparkasse Bielefeld and Deutsche Leasing for some years now. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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OUR COMPANY

Realising major investments transparently and according to plan, with tailored financing solutions Increasing 250.000With Kranvermietung Jandt’s machines, lifting weights like these looks like child’s play. With the right investment strategy, heavy loads can be moved not planning only safely but above all cost-efficiently. security

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

250.000EUR Whether it’s repairs to windmills > 1.000.000 or carrying heavy loads, Bielefeld’s That was the volume of investment for a new mobile crane Jandt Kranvermietung GmbH takes purchased by Kranvermietung Jandt. But the investment is care of the big jobs every day. The paying off as the machine is always in high demand – and company offers a full range of crane and REPORT MANAGEMENT CONSOLIDATED the trend is increasing. lifting operations as well as transporta-

per cent tion of heavy loads plus related services 60 in Germany and neighbouring countries. Investments in its machine pool are essen- Jandt, a crane lessor, uses leasing for nearly two thirds of all of its machine pool investments. Due tial but entail high costs, which it can scarcely to Deutsche Leasing’s asset know-how, this asset handle through its capital resources alone. financing expert is Jandt’s preferred partner for That’s why Jandt has closely cooperated with the bulk of its asset investments Sparkasse Bielefeld and Deutsche Leasing for some years now. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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OUR COMPANY

TRUST CONSTITUTES SECURITY

Whether it’s mobile construction or telescopic The company’s decision to use alternative crawler cranes, the family business Jandt forms of financing has also worked out well. makes targeted investments in machinery for To obtain the necessary financing for invest- out-of-the-ordinary activities. Liebherr’s MK ments in costly assets such as a new crane, 140 mobile crane is this company’s latest inves- since the late 1980s this Bielefeld firm has tment asset. Despite its compact dimensions, relied on solutions other than traditional loans. this crane can easily match its bigger compe- Its use of these solutions has grown together titors in terms of performance. But that comes with its machine pool. While almost 70 years at a price: With an investment volume of more ago this company mainly offered excavation than one million euros, as a medium-sized and haulage operations without its own machi- company Jandt was unable to cover its nes, today its machine fleet comprises state- purchase of this new crane with its capital of-the-art equipment from leading manufactu- resources. Together with this firm’s main bank, rers, ranging from a compact crane for sheds Sparkasse Bielefeld, as its funding partner, and cramped construction sites to a 250-tonne Deutsche Leasing developed a tailored invest- truck-mounted crane or a telescopic crawler ment solution which enabled it to make this crane. new purchase. Asset expertise is the basis for long-term The investment has fully paid off, as demons- business success trated by the high level of customer demand for this new asset: “We already have three Choosing the right investment assets is crucial cranes of this type. But demand is so strong for achieving this growth strategy. Jandt, with that we still had a gap in our portfolio. The its many years of experience to draw upon, new crane has enabled us to close this gap. is not the only one to make that assessment. The purchase has already paid for itself,” says Deutsche Leasing also has vast asset expertise Reinhard Meier, Executive Manager of Jandt at its disposal: “The key components for the Kranvermietung GmbH, who runs the com- right contract are the value of an investment pany together with Managing Director Klaus asset, its expected value trend over the term Diercks. of the contract, and its saleability. In order to assess this correctly, we rely on asset experts from our customers’ industries – as in this

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

case,” explains Stefan Thöne, the competent “We are able to preserve our liquidity, advisor at Deutsche Leasing who already has establish a basis for calculating our several years of expertise in the machine pool segment. investments, and use the manufacturer-independent products of our In this context, it was only natural for Thöne to check out this new investment asset at the con- Sparkasse and Deutsche Leasing.” struction site together with his colleagues at Reinhard Meier, Executive Manager of Jandt Kranvermietung GmbH Sparkasse Bielefeld who were responsible for the project, leasing product manager Stephan Houpt and corporate customer relationship manager Frank Winkler. “We always start off with a thorough consultation – ideally directly on site – where we determine which of our financing solutions and supplementary services best meet our customers’ requirements. It’s often our services – whether in the field of asset insurance or maintenance contracts –

which provide genuine added value for our REPORT MANAGEMENT CONSOLIDATED customers,” says Thöne. More flexibility with a partnership founded Group delivers major benefits on trust

At Jandt, as one of the solutions in Deutsche Jandt thus benefits from the advantages of Leasing’s broad range of financing products, close cooperation within the Sparkasse group. leasing proved to be the right choice. The crane ”With Jandt, we agree on the amount that will specialist was convinced by the close coope- be available to the company for investments in ration within the Sparkasse group as well as a particular financial year. They can freely ope- leasing’s traditional advantages. rate within that range and use it for Deutsche Leasing’s financing products, for example,” As the company’s main bank, Sparkasse Houpt explains. That provides companies such Bielefeld established the relationship with its as Jandt with more flexibility, so that they can Sparkasse group partner Deutsche Leasing. plan and realise investment projects while “Ever since we discovered alternative financing taking their current business activities into solutions, we’ve relied on Deutsche Leasing as consideration. a partner,” says Meier. Since then, the scope of STATEMENTS FINANCIAL CONSOLIDATED their cooperation has continuously increased. “It’s all come together quite nicely. As a medium- Jandt now realises around 60 per cent of its sized company, we appreciate our close re- investments through asset finance, much of lationship with Deutsche Leasing that our this with Deutsche Leasing. Sparkasse has established as the intermediary,” says Meier, summing things up. “Handling of day-to-day business is also quick and straight- forward. We made a good choice in selecting this product and this solution with Sparkasse Bielefeld and Deutsche Leasing.”

The crane lessor aims to build on this trusting foundation. For 2018, it already has further investments planned in partnership with Spar- kasse Bielefeld and Deutsche Leasing. INFORMATION GROUP

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OUR COMPANY

New Fiege logistics centre shortens delivery times and improves product availability Expanding capacities

30 2016 2017

OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

m2 Ordered today, delivered tomorrow: Fulfilling that promise places considerable demands on logistics – particu-

larly in an age of growing e-commerce REPORT MANAGEMENT CONSOLIDATED business. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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OUR COMPANY

New Fiege logistics centre shortens delivery times and improves product availability 90.000In order to be able to offer its customers this service, Fiege Logistik – one of Europe’s leading logistics service providers – has invested in a huge 90,000 square-metre logistics hub, which is the size of more than eleven football pitches. Deutsche ExpandingAnlagen Leasing (DAL), the Deutsche Leasing Group’s specialist for structured financing and project business, handled the financing of capacities this mammoth project.

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

m2 90.000orders Ordered today, delivered tomorrow: > 10.000.000 Fulfilling that promise places consider- Fiege aims to handle more than a seven-digit order able demands on logistics – particu- volume for MediaMarkt at this new logistics centre larly in an age of growing e-commerce REPORT MANAGEMENT CONSOLIDATED from 2020. It will thus more than double its maximum capacity for this chain of electronics stores. business. 1 day The future delivery time for product deliveries within Germany that Fiege will process at its new logistics centre will be just one day. As well as its delivery times, this development will also enable this full-service logistics service provider to significantly improve product availability. 6 months A fast-tracked investment solution: It took just six months between the initial meetings with DAL, covering the financing of the mammoth pro- CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED ject of a “new logistics hub” for the logistics expert Fiege, up to the actual start of construction. GROUP INFORMATION GROUP

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THE RIGHT FINANCING SOLUTION – SATISFIED CUSTOMERS

Improving product availability Rapid financing to ensure things are ready in time for Christmas MediaMarktSaturn is one of the top 5 online retailers in Germany and relies on Fiege as The project is urgent, bearing in mind the a preferred logistics partner. When this firm goal of the first few packages already leaving announced 35 per cent growth in its online the new logistics warehouses during the 2018 business, Fiege also needed to act in order to Christmas season. “In March 2017 we discus- serve its anchor customer and to ensure its sed the planned project with Fiege for the first long-term loyalty. “The volume of growth is time. By September, we had already had all of so strong that we are no longer able to handle the paperwork recorded by a notary. We could e-commerce business from our location in thus get started on the construction work right Erfurt alone. That is why we jointly decided away,” remarks Olav van Lier with a smile, who with our customer to develop new logistics as DAL’s Head of Major Customer Business, space in Greven,” says Dr Holger Werthschulte, Corporate Customers, Western Region, has sup- Finance Director of the Fiege Group. ported the Fiege Group for many years now.

With an investment volume of more than EUR It was precisely in view of this speed and the 40 million, this expansion represents a major Deutsche Leasing Group’s unwavering commit- step for all those involved. As well as the sus- ment that Fiege chose it as a partner for this tained growth of online business, for Media- project. MarktSaturn product availability and optimisation of delivery times played a key role in the Positive past experience was an argument in choice of this additional location. favour of bringing this asset finance partner on board: The Deutsche Leasing Group has long been a partner of this contract logistics pioneer, which has more than 30 mega cen- tres in Europe, where Deutsche Leasing has already demonstrated its extensive expertise in arranging financing for a wide range of assets. “We have a partnership of many years’ standing, particularly in the field of movables. Nonetheless, in terms of its scale the new project represents an absolute milestone in our cooperation,” van Lier adds.

“DAL was by far the fastest player to take up this challenge. It presented us with a winning solution and was not at all hesitant about tackling such a big project.”

Dr Holger Werthschulte, Finance Director of the Fiege Group

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OUR BUSINESS IS THE FUTURE DEUTSCHE LEASING

Comprehensive services facilitate A regional partnership to achieve mammoth project national success

Around 60,000 square metres of logistics space As well as these services, DAL has also won at this multi-user facility will be exclusively plaudits through its financing structure: “For created for MediaMarktSaturn’s German online the financing arrangement, we developed a stores within the scope of this redevelopment solution which mainly involves regional insti- and expansion work. The remaining 30,000 tutions – in line with the motto ‘from Münster- square metres are reserved for other customers. land and the surrounding region, for Münster- Apart from its sheer size, the project’s complex land’. We have been able to bring together a financing structure is a particular challenge. group of savings banks comprising four diffe- The large number of partners involved – from rent institutions, with Sparkasse Osnabrück as shareholders and business owners to funding the lead bank. But Fiege was a new customer banks – meant that it was necessary to reconcile for two out of four of the partners in this group a range of different interests. “However, we were of banks. That is an achievement which we’re able to successfully resolve this and perfectly really proud of,” Moser emphasises. worked together as a team – also thanks to DAL’s strong commitment,” says Dr Werth- Everyone involved in the process has a positive

schulte. view of how this challenge was handled: REPORT MANAGEMENT CONSOLIDATED

DAL’s supporting services helped with the handling of this project. “For instance, we are looking after the structuring of the real estate “This project represents the most leasing model, talking to the legal and tax outstanding achievement in our advisers and managing the group of banks for Fiege,” remarks Michael Moser, who has already strong relationship. supported the project as a financing manager In the Deutsche Leasing Group, at DAL together with Olav van Lier. we immediately recognised the same SME spirit which enables us to act rapidly and flexibly.”

Dr Holger Werthschulte, Finance Director of the Fiege Group CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP / 2

CONSOLIDATED MANAGEMENT REPORT

34 2016 2017

ANNUAL REPORT 2016/2017 DEUTSCHE LEASING CONSOLIDATED MANAGEMENT REPORT MANAGEMENT CONSOLIDATED Consolidated management report Deutsche Leasing Group

36 Overview for the financial year and outlook

37 Basic information regarding the Deutsche Leasing Group

41 Economic report

53 Report on risks and opportunities STATEMENTS FINANCIAL CONSOLIDATED and forecast report

64 Deutsche Sparkassen Leasing AG & Co. KG GROUP INFORMATION GROUP

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CONSOLIDATED MANAGEMENT REPORT

Consolidated management report

Financial year 2016 / 2017 Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe

Business performance Opportunities and risk management

| New business grows to EUR 8.9 billion in an | Growth potential for SME business, also for environment which remains challenging intragroup business with the savings banks (leasing and factoring) as well as international | DAL and foreign business provide significant business growth momentum | Continuous ongoing development of risk measurement methods

| Risk-bearing capacity remains clearly intact, Earnings position even in stress scenarios

| Group’s net profit for the year increases by | Significantly improved default situation 5 per cent to EUR 72.0 million

| Leasing income up by EUR 224 million | Further increase in net asset value – economic result Outlook at a high level | Continuing positive economic development, with heightened setback risks anticipated as before

| Attractive market opportunities and development Net assets and financial position potential in the asset finance market

| Moderate growth for consolidated balance | Goal of new business growth slightly in excess of sheet total overall economic trend

| Portfolio structure remains stable | Slight rise in continuously increasing net asset value

| Further increase in equity as well as provisions in | Further increase in equity as well as provisions in accordance with §§ 340f and 340g HGB accordance with §§ 340f and 340g HGB | Solid financing base for further growth

36 2016 2017

ANNUAL REPORT 2016/2017 DEUTSCHE LEASING

Basic information regarding the financing for machinery and equipment, vehicles, IT Deutsche Leasing Group and communication equipment, medical technology, real estate, intangible assets and large-scale movable assets and also factoring. It offers its partners sales Overview financing products as 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 services tered in Bad Homburg v. d. Höhe, is the parent company for the entire investment life cycle. This ranges from of the Deutsche Leasing Group. As a financial services purchasing of assets via brokerage of asset-related provider, it is supervised by the German Federal Finan- insurance and administrative activities to resale of cial Supervisory Authority (Bundesanstalt für Finanz- assets and includes, for instance, full-service products dienstleistungsaufsicht, BaFin) and by the German as well as a certified return process in the vehicle fleet Bundesbank. segment, construction management services for real estate leasing and life cycle management including As one of the leading asset finance and asset service services and logistics in the IT sector. In its factoring partners in Germany and Europe, the Deutsche Leasing and collection segment, the Deutsche Leasing Group Group offers investment and financing solutions as offers comprehensive debt management services. 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 with solutions for small-volume investments and of specific industry requirements enable targeted financing as well as for individual, complex major ongoing development and fine-tuning of its range of projects, it supports its customers in their realisation services in line with prevailing market conditions. In of investment projects. In addition to the core products particular, the goal is to identify early on any segments of leasing and factoring, the Group’s product range with relevant investment requirements and to support encompasses further financing solutions as well as customers during the planning of their investments supporting services. The Deutsche Leasing Group and right up to their realisation, thus laying the foun- offers comprehensive services in its factoring and debt dations for successful long-term partnerships. management segments. In terms of its customers,

Deutsche Leasing – as a central partner of the savings STATEMENTS FINANCIAL CONSOLIDATED banks – mainly focuses on SMEs in Germany, which Organisation and structure it also supports at an international level.

On 30 September 2017, overall the Group had 2,526 The Deutsche Leasing Group is represented on the employees in 23 countries. market by means of its different business segments, DAL Deutsche Anlagen-Leasing GmbH & Co. KG (DAL), Deutsche Factoring Bank GmbH & Co. KG (DFB) and Products and services also further investments specialising in the asset finance and asset service segments. Companies in 23 countries in Europe, Asia and America provide The solutions offered by the Deutsche Leasing Group an international platform for the Deutsche Leasing continue to mainly comprise leasing and asset Group’s services. GROUP INFORMATION GROUP

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As the market leader in Germany and one of the leading The activities of the International business segment providers of leasing in Europe, Deutsche Leasing focus on support for German industrial enterprises as concentrates on business-to-business operations with partners for sales financing in Germany and other SMEs: Deutsche Leasing is the solutions provider for countries. Via its international network, Deutsche investments in the SME sector. In combining asset, Leasing offers selected vendors and their customers industry, service and product competence, the Deutsche asset finance solutions in line with local requirements Leasing Group offers its customers a significant advan- in 23 countries. It also supports customers of Deutsche tage. Leasing and the savings banks with their foreign investments through so-called “German desks” estab- Through its Savings Banks and SMEs business segment, lished in the foreign companies. The International Deutsche Leasing serves the German market via two business segment also supports its vendors in Germany different distribution channels: the savings banks and handles business with customers in the construc- and direct distribution, supplemented with services tion and agricultural sectors. marketed through online channels. Through its comprehensive distribution network, its customers receive Within the Deutsche Leasing Group, DAL offers its competent on-site advice and support for their invest- customers finance solutions for long-term and large- ment projects. In addition, in cooperation with the scale investments in the following business segments: International business segment the savings banks and real estate (including construction management), their customers receive needs-oriented support for energy, transport, logistics, medical technology, IT as their foreign activities through so-called “German well as special products (such as financing solutions desks” in Deutsche Leasing’s foreign companies. for intangible assets and current assets). Within the Deutsche Leasing Group, DAL specialises in the Through its Fleet business segment, Deutsche Leasing arrangement and structuring of major projects. offers a range of vehicle-related investment and service solutions as well as efficient car fleet management for Deutsche Leasing Finance GmbH offers asset-related SMEs in Germany especially. As a manufacturer-inde- credit financing, primarily purchasing, rental park and pendent full-service provider, Deutsche Leasing de- warehouse financing for dealers in the construction velops individual and customer-oriented fleet solu- machinery, agricultural technology and material tions. Through AutoExpo Deutsche Auto-Markt GmbH handling vehicle segments. Deutsche Leasing Finance (AutoExpo), Deutsche Leasing’s reselling company GmbH also serves as a conduit bank for development which specialises in second-hand cars, returned loans. leasing assets are marketed to private and commercial purchasers in Germany and other countries. Deutsche Factoring Bank GmbH & Co. KG (DFB) is Spar- kassen-Finanzgruppe’s factoring centre of excellence Deutsche Leasing serves the market for information under the umbrella of the Deutsche Leasing Group. and communication technology (ICT) through the The savings banks and their customers are offered financial and services products offered by its Infor comprehensive receivables financing and debt mation Technology business segment. This segment management solutions in addition to the range of targets customers in the SME sector as well as major services designed for the SME sector. companies. At the end of the leasing contract period, Deutsche Leasing’s separate service and logistics Bad Homburger Inkasso (BHI) – an associated company centre handles the processing and resale of assets. of the Deutsche Leasing Group – offers distressed debt Certified data deletion is particularly important. solutions as well as the market-oriented resale of

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movable and real estate collateral on behalf of its Distribution channels shareholders, the savings banks and other companies and institutions. Deutsche Leasing exploits its markets through three S-Kreditpartner (SKP), a Deutsche Leasing investment, different distribution channels: focuses on the fields of car and consumer loans in Germany. It pursues its sales activities within the scope Direct business: With their own network of branch of partnerships with the savings banks; SKP also offers offices, Deutsche Leasing, DAL and DFB exploit the financing of sales and purchasing activities for the market independently, through direct acquisition. The vehicle industry. focus for direct business sales lies especially on those customers and markets whose potential the savings At Deutsche Leasing Insurance Services GmbH (DL Ins), banks or partners/vendors have not yet fully exhausted. Deutsche Leasing has pooled Group-wide responsi- Direct business advances the expansion of the Group’s bility for insurance services within a central entity in existing customer base through the acquisition of new order to optimise processes, purchasing and product customers and secures our asset know-how and our development. This business unit develops tailored excellent understanding of customers and industries, insurance services which it markets to the Deutsche while underlining our self-reliance. In addition, in the Leasing Group and its customers and partners through past financial year the Group implemented a pilot the full range of distribution channels. project covering market access via the savings banks’ internet portal.

Positioning within Savings banks: The Deutsche Leasing Group enables Sparkassen-Finanzgruppe the savings banks to access and exploit its full range of services. Through cooperation with the savings banks, the needs of the savings banks’ customers can thus be Within Sparkassen-Finanzgruppe, Deutsche Leasing is optimally fulfilled, with improved exploitation of the centre of excellence for leasing and for other SME- existing potential. The savings banks are able to select oriented asset finance solutions such as factoring and from Deutsche Leasing’s broad range of services in line also supplementary services. As a central partner and with the specific requirements associated with their internationally-connected asset finance partner, it helps concrete business: from standardised product lines to STATEMENTS FINANCIAL CONSOLIDATED the savings banks to realise their customers’ investments tailored specialist solutions. The Deutsche Leasing both nationally and internationally, through leasing Group’s SME-oriented asset finance solutions and and other asset finance solutions. As well as close market asset-related services are thus offered through the cooperation, the savings banks serve as Deutsche savings banks on the basis of a close relationship. Leasing’s key financing partner. Overall, 366 savings Moreover, German desks have been established in the banks are shareholders in Deutsche Leasing, as direct foreign companies of the Deutsche Leasing Group; and indirect limited partners. German-speaking specialists serve here as on-site contacts for the savings banks and their customers. GROUP INFORMATION GROUP

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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

Partners/vendors: The Deutsche Leasing Group’s part- Locations ners are its dealers, vendors and cooperation partners. By working with dealers and vendors, the Deutsche Leasing Group achieves efficient and early access to Germany is the core market of the Deutsche Leasing customers, thus ensuring broad sales coverage in Group. Through its foreign network, Deutsche Leasing Germany and other countries. Especially the factoring also supports German companies’ exports and their business can draw on a comprehensive exploitation of international presence. It does so through cooperation the market from cooperation agreements with brokers with international vendors – mainly in Germany, and other intermediaries. Austria and Switzerland (“DACH”) – which are able to rely on the financing expertise of Deutsche Leasing’s Deutsche Leasing optimally realises existing potential international network to support their sales activities; through coordinated exploitation of the market Deutsche Leasing also assists German companies’ encompassing all of its distribution channels and busi- foreign direct investment programmes as well as the ness segments/investments, particularly in relation to foreign subsidiaries of German companies. Outside cross-selling opportunities. Germany, its international network spans 22 further countries in Europe, America and Asia.

In the year under review, as well as its headquarters in Bad Homburg v. d. Höhe the Deutsche Leasing Group had one German branch office, in Berlin, and seven other German sales offices. The Deutsche Leasing Group is also represented in its various regions through its investments.

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Economic report The recovery of the German economy – which had already been supported by private consumption in the previous year – continued in the financial year 2016/2017. Overall economic and industry- Foreign trade provided strong momentum, once again specific environment strongly reinforcing the domestic upturn. Companies’ increasing level of capacity utilisation resulted in a slight increase in the volume of investments. In the financial year 2016/2017, the world economy demonstrated global momentum which picked up over The German council of economic experts assumes gross the course of the year. From the autumn of 2016, this domestic product growth of 2.0 per cent (previous year: global upturn was mainly attributable to private 1.9 per cent) for the calendar year 2017. The solid upturn consumption, while investments remained weak. will be further buoyed by foreign growth momentum Since the winter of 2016, the increase in the volume of and thus provide additional support for the positive investments has been stronger than expected, particu- labour market situation. However, a phasing-out of the larly due to declining political risks. The upswing in ECB’s special monetary policy measures might have a the major industrialised nations in connection with dampening effect on this dynamic performance. Fol- the rise in the price of oil also buoyed the economies of lowing the slight increase in the volume of investments the emerging markets (BRIC countries). Stabilising and companies’ increased level of capacity utilisation, trends were already apparent in Russia in the past year plant and equipment expenditures are expected to rise and output picked up moderately. In Brazil, an export- driven recovery ensued at the start of the year but this has not yet firmed up. The uncertainties and risks in Leasing investments in Germany China have died down slightly and the economy has EUR million once again registered strong growth on the back of momentum supplied by economic policy. 70,000 67,000 64,200

Following the presidential election in the United States 60,000 59,200 56,700 of America, this country’s economy has likewise picked 52,410 up again. Following a slight recovery, in June 2017 the 50,000 US key interest rate was raised by a further 0.25 STATEMENTS FINANCIAL CONSOLIDATED percentage points; this has not had any negative 40,000 impact on the economic recovery.

30,000 The Eurozone likewise experienced an upturn in the year under review, with dynamic economic growth in 20,000 almost all of its countries. As well as private consumption, strong internal demand had a positive impact on 10,000 growth. While the uncertainty diminished slightly following the outcome of the elections in France, this 0 caused the euro to appreciate against the US dollar 2013 2014 2015 2016 2017* and dampened inflation in the Eurozone. Investments Calendar year remained at a relatively low level but picked up moder- Movables Real estate Hire-purchase * Projection ately in the second half of the year. Source: Federal Association of German Leasing Companies/ifo investment test GROUP INFORMATION GROUP

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by 2.3 per cent (previous year: 1.6 per cent). The fore- New business of the Deutsche Leasing Group cast issued by the German council of economic experts EUR million points to an increase in gross fixed asset investments of 3.6 per cent (previous year: 2.5 per cent). 10,000 8,658 8,856 8,218 As in the previous year, the leasing sector in Germany 8,000 7,756 7,852 will achieve new business growth in the calendar year

2017. The trend for new leasing business once again 6,000 clearly exceeds the growth rates for plant and equipment expenditures (Federal Association of German 4,000 Leasing Companies (Bundesverband Deutscher

Leasing-Unternehmen e. V., BDL), Berlin/ifo Investi- 2,000 tionstest).

0 Due to the moderate growth in plant and equipment 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 2016 / 2017 expenditures and a strong economic trend, the low Financial year interest rates were unable to dampen the volume of of which DAL demand for leasing. Leasing remains an attractive form of financing; the sector is in a strong long-term With an increase in its volume of new business to EUR position, as recognised by the market. As the market 8.9 billion in the financial year 2016/2017, Deutsche leader in the asset finance segment, in the financial Leasing was able to maintain its market leadership in year 2016/2017 Deutsche Leasing participated in the Germany and its leading position among European general environment in line with its position and leasing providers in an environment which remained achieved a satisfactory level of growth in overall terms. challenging.

In the financial year 2016/2017, DAL and the foreign Business performance subsidiaries in particular contributed to the Group’s positive performance. DAL achieved a level of growth which was 14 per cent higher than in the previous year In the financial year 2016/2017, competitive and and had an 18 per cent share (EUR 1.6 billion) of the margin pressure for the Deutsche Leasing Group once Group’s new business. With a new business volume of again tightened by comparison with the previous year. EUR 2.2 billion, the foreign subsidiaries achieved a This economic trend reflected the ECB’s continuing growth rate of 12 per cent on the previous year. expansionary monetary policy, with enduring low interest rates and clear investment restraint on the An analysis of new business in the business segments, part of companies. with a breakdown by asset class, shows the following development:

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New business by business segment

2016/2017 2015/2016 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 Machinery and equipment 4,744 54 4,620 53 3

Road vehicles 1,964 22 2,084 24 - 6

Information and communication technology 525 6 525 6 0

Deutsche Leasing 7,233 82 7,229 83 0

Real estate 761 8 526 6 45

Energy and transport 862 10 903 11 - 5

DAL 1,623 18 1,429 17 14

Deutsche Leasing Group 8,856 100 8,658 100 2

In the past financial year, the machinery and equipment Energy Act (Erneuerbare-Energien-Gesetz, EEG) in segment achieved a growth level of 3 per cent by com- 2017 resulted in a decline in the volume of new busi- parison with the previous year. The foreign companies ness which clearly offset this. made a considerable contribution to this increase in the year under review. The real estate segment achieved growth of 45 per cent on the previous year, thanks to several large-scale The road vehicles segment failed to match the previous projects. year’s level. The strong competitive and price pressure affecting fleet business in the context of the “diesel problem” was the main factor driving a 6 per cent fall Financial position on the previous year’s level.

New business in the information and communication EARNINGS POSITION STATEMENTS FINANCIAL CONSOLIDATED technology segment was at the same level as in the previous year. In the hardware sector in particular, the In the past financial year, the net profit for the year volume of new business increased on the previous increased by 5 per cent, from EUR 68.8 million to year, while the software sector registered a slight EUR 72.0 million, while net income for the year rose decline. by 16 per cent to EUR 84.0 million.

The result for the energy and transport segment was Leasing income resulting from leasing and hire-purchase 5 per cent lower than the strong figure for the previous business and from the sale of second-hand leasing year. The strong performance in the transport sector assets increased by 3 per cent on the previous year, continued in the year under review, with a further rise from EUR 6,643 million to EUR 6,867 million. This in the volume of new business. However, in the energy growth in leasing income was achieved, despite strong sector an amendment of the German Renewable competitive and margin pressure, with an expansion of the leasing and hire-purchase portfolio. GROUP INFORMATION GROUP

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Leasing expenses increased by approx. EUR 364 other administrative expenses also include expenses million. Depreciation and valuation adjustments on for strategic future investments. In the previous year, leasing assets have decreased by almost 5 per cent, the beneficial effect of the amendment of the law con- from EUR 2,607 million to EUR 2,490 million. In prin- cerning the interest rate calculation for discounting of ciple, scheduled depreciation on newly acquired provisions for pensions and similar obligations had a leasing assets included in this amount in the period dampening effect. remains in line with the term of the underlying leasing contracts. Depreciation and valuation adjustments on receivables (incl. the allocation to the provisions in accordance with Due to the continuing low interest-rate phase and the §§ 340f and 340g HGB) declined by EUR 37 million, associated lower interest-rate level for borrowed funds from EUR 100 million to EUR 63 million. This also and the net interest income generated by DFB – which reflects the favourable development of the risk situa- was included in the profit and loss account for the first tion. Provisions in accordance with §§ 340f and 340g time – interest income improved significantly, from HGB were once again allocated. EUR - 68 million to EUR - 5 million. Equity shown in the balance sheet has increased by The low interest-rate level remained a key factor shaping EUR 34 million, from EUR 765 million to EUR 799 the result for the financial year. It affected the rate of million, alongside the increase in provisions in accord- interest for interest-free liabilities tied up in lending ance with §§ 340f and 340g HGB. Deutsche Leasing has business and the liquid capital base as well as the net thus adhered to its strategy of strengthening its equity. interest margin contributions achievable on the market. As in the previous year, the resale results provided In the past financial year, the net asset value increased continuously positive contributions. This was mainly to EUR 1,923 million despite the continuing negative due to the conservative calculation of residual values impact on margins and costs which resulted from as of the conclusion of contracts as well as successful interest rate levels. The net asset value is calculated resale activities. The conservative residual value policy according to the standard developed by the Federal of the past few years in the car contracts segment, with Association of German Leasing Companies in terms of open residual values, is a key factor in this sustained its structure and substance. The auditor reviews this positive trend, even allowing for the current trend in value in line with the “IDW audit standard: net asset the second-hand car market for diesel vehicles. value calculation auditing for leasing companies (IDW PS 810)” issued by the Institute of Public Auditors in General administrative expenses have increased by Germany, Düsseldorf. The net asset value reflects the EUR 27 million, from EUR 324 million to EUR 351 value of the Deutsche Leasing Group’s equity, after million. This is attributable to increased expenditure disclosure of hidden reserves. It is a key element for for wages and salaries due to regular salary rises and calculation of the economic result – a recognised, scheduled recruitment of personnel as well as in- summary ratio indicating period net income for creased expenses for retirement pensions and the leasing companies. above-mentioned first-time inclusion of DFB. The

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Net asset value of the Deutsche Leasing Group For the financial year 2016/2017, the Deutsche Leasing EUR million Group had predicted a volume of new business growth

+ 4 % slightly in excess of the overall economic trend and 2,000 1,923 slight growth in its continuously rising net asset value, 1,855 1,742 1,793 with a further strengthening of equity as well as provi- 1,666 1,600 sions in accordance with §§ 340f and 340g HGB. This forecast was based on a moderately optimistic predic- 1,200 tion of its business and earnings trends, according to the prevailing market potential.

800 New business in the financial year 2016/2017 400 increased by 2 per cent due to the positive economic conditions in Europe and in Germany in particular. 0 The trends outlined in relation to the › economic situa- 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 2016 / 2017 tion contributed to this growth. New business growth Financial year thus exceeded the volume of overall economic growth for the calendar year 2016 and also the level predicted Allowing for the dividend distributed by Deutsche by the German council of economic experts for the Sparkassen Leasing AG & Co. KG, with a value of EUR calendar year 2017. The development of the net asset 153 million for the financial year 2016/2017 the value benefited from the improving economic situa- economic result exceeded the previous year’s level tion and registered an increase of 4 per cent; in the (EUR 148 million). Deutsche Leasing has thus achieved same context, equity increased to EUR 799 million, its target earnings level. On this basis, appropriate while EUR 54 million was allocated to the provisions distributions, the implementation of necessary future in accordance with §§ 340f and 340g HGB. investments and the necessary equity trend which is required for its growth from an economic point of view are thus guaranteed. FINANCIAL POSITION

In its financial management, the Deutsche Leasing

Economic result of the Deutsche Leasing Group Group seeks to safeguard permanent solvency and to STATEMENTS FINANCIAL CONSOLIDATED EUR million cover financing requirements on the best possible terms, with the goals of hedging financial risks and 180 achieving the greatest possible level of independence 160 153 148 in relation to developments on the financial markets. 140 139 137 128 120 Capital structure 100 In the financial year 2016/2017, the debt capital bor- 80 rowed served to finance leasing assets as well as other 60 customer business of the Deutsche Leasing Group. 40 Borrowed funds of the Group’s domestic and foreign 20 companies (without DAL’s non-recourse business but 0 including DFB) increased by around 3 per cent on the 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 2016/ 2017 previous year, in line with the growth trend for new Financial year GROUP INFORMATION GROUP

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business. On 30 September 2017 they amounted to The funds borrowed generally had original maturities EUR 18.3 billion (previous year: EUR 17.7 billion). of up to six years and fixed-rate agreements which were generated by means of interest rate derivatives In almost all cases, funds were borrowed on terms where necessary. matching financed customer business in terms of the capital commitment and fixed interest-rate periods as As before, derivative financing instruments for well as the respective currency. The resulting maturity management of interest and currency risks (mainly transformation has not reached any significant level. interest rate swaps) were exclusively entered into for Medium- and long-term borrowing (including promis- hedging purposes. Since the volume, term and capital sory note loans) and forfaiting, which jointly accounted commitment periods of the derivative financing for around four fifths of the total debt capital borrowed, instruments entered into were determined on the basis remained the key elements of Deutsche Leasing’s of the structures of the underlying customer transac- financing structure. The continuing expansion of tions and borrowed funds (mainly as a macro hedge borrowing from public business development banks on the basis of interest-rate gap analyses and in some played a key role in the somewhat disproportionate cases as a micro hedge), risk is effectively covered. A growth in loan financing. documented, appropriate and functional risk management system is used for these transactions. Money market borrowing was mainly for the purpose of financing short-term customer business. Around one The volume of financing (Germany and other coun- third of money market borrowing served to finance tries, excluding DAL’s non-recourse business) was DFB’s factoring business. The volume of securitisation- distributed as follows between the financing partners based financing underwent further moderate expan- as of 30 September 2017: sion, with the goal of diversifying financing.

Financing volume Development of financing volume (Germany and other countries, excluding DAL’s non-recourse business) by financing instrument EUR billion 18 % 8.5 Others 8.1 8.0

7.0

6.0 5.8 5.7 5.0 19 % 4.0 Federal state banks % 3.2 3.3 63 3.0 Savings banks

2.0

1.0 0.6 0.8 0.0

Short-term Medium- and Sales of ABCP, The savings banks’ share of total borrowed funds loans, call long-term receivables structured deposits/time loans (incl. (individual financing amounted to approx. two thirds, while the federal deposits, com- promissory forfaiting) state banks’ share was stable by comparison with the mercial papers notes) previous year. The share accounted for by other insti-

30/09/2016 (total: EUR 17.7 billion) 30/09/2017 (total: EUR 18.3 billion)

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tutions increased slightly. This was attributable to from investment activities totalled EUR - 53.2 million increased financing by public business development (previous year: EUR - 75.9 million). The cash outflow banks. from financing activities amounted to EUR - 37.2 million (previous year: EUR -35.0 million). Liquidity In the past financial year, Deutsche Leasing main- Contingent liabilities under suretyships and guarantee tained a broadly diversified debt financing structure, agreements amounted to EUR 255.6 million at the end in terms of the number of financing partners and the of the financial year (previous year: EUR 258.5 million). financing instruments used. Financing reserves were On the balance-sheet date, irrevocable loan commit- moderately increased, at a high level, in the financial ments were valued at EUR 177.2 million (previous year: year 2016/2017, despite the increase in borrowed funds EUR 212.8 million). on account of business growth. As of 30 September 2017, Deutsche Leasing’s “free liquidity” was in excess of EUR 3 billion.

Through its structures implemented for forfaiting and securitisation-based financing as well as traditional financing through conventional credit lines, further options were available for debt financing and to safeguard liquidity.

The Deutsche Leasing Group was able to fulfil its payment obligations at all times in the financial year 2016/2017.

Overall, on the basis of its anchoring in Sparkassen- Finanzgruppe, its stable long-term business relationships with credit institutions and a diversified range of financing instruments, Deutsche Leasing has a solid financing base for its planned further growth. STATEMENTS FINANCIAL CONSOLIDATED

Within the scope of the statement of cash flows, cash and cash equivalents amounted to EUR 51 thousand at the start of the financial year and to EUR 36 thousand at the end of the financial year. On 30 September 2017, the structure of the statement of cash flows was further adjusted in accordance with the specific characteristics of the leasing sector. The prior-year amounts were revised accordingly.

The cash inflow from current business activities amounted to EUR 90.4 million (previous year: cash inflow of EUR 111.0 million), while the cash outflow GROUP INFORMATION GROUP

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NET ASSET SITUATION Development of consolidated balance-sheet total EUR million

Deutsche Leasing’s consolidated balance sheet total + 4 % increased by almost 4 per cent or EUR 673 million, 20,000 19,354 18,682 from EUR 18.7 billion to EUR 19.4 billion at the end of 15,891 16,190 16,589 24 % the year under review. This was mainly due to the 16,000 15,507 24 % growth in the volume of overall new customer business 24 % 25 % 23 % 23 % documented in receivables from customers. 12,000

Leasing assets, measured at initial values, amounted 8,000 to EUR 17.1 billion and were thus almost at the same level as in the previous year (EUR 16.9 billion). Leasing 4,000 assets measured at residual carrying amounts – which remain a key element of the consolidated balance sheet 0 total – had the following structure on 30 September 2011 / 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 2016 / 2017 2017, with a breakdown for individual business Financial year segments: % share accounted for by foreign business

Leasing assets measured at 2016/ 2017 2015 / 2016 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 5,433 53 5,330 54 103 2

Road vehicles 3,208 32 3,120 31 88 3

Information and communication technology 890 9 926 9 - 36 - 4

Energy and transport 511 5 421 4 90 21

Real estate 145 1 149 2 - 4 - 3

Total residual carrying amounts 10,187 100 9,946 100 241 2

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Stable portfolio structure General statement by the Management The breakdown by business segments and central Board on the economic situation asset items in proportion to the balance-sheet volume developed as follows: The residual carrying amounts of leasing assets accounted for 52.6 per cent of the Despite an environment which remained challenging, consolidated balance sheet total (previous year: 53.0 strong competitive and margin pressure and regulato- per cent). Receivables from customers (mainly hire- ry requirements which had an increasingly adverse purchase receivables and receivables from banking impact, in the financial year 2016/2017 the earnings transactions) amounted to 42.7 per cent of the balance position of the Deutsche Leasing Group developed in sheet total (previous year: 41.0 per cent). In accordance line with the expectations of the Management Board. with the German Commercial Code, the leasing busi- The Group was thus able to further strengthen its equi- ness of foreign subsidiaries generally involves hire- ty and its provisions in accordance with §§ 340f and purchase contracts and is therefore reported in receiv- 340g HGB on a long-term basis. ables from customers. Assets in foreign subsidiaries represent 24 per cent of the consolidated balance sheet Thanks to the increase in its economic result to EUR total. 153 million and in its net asset value by EUR 68 million to EUR 1,923 million, through its sustainable business Structure of assets as of 30 September 2017 and risk model Deutsche Leasing achieved its income and capital goals.

4 % New business, which was already at a high level, was Other assets increased to a volume of EUR 8.9 billion.

The financial position of the Deutsche Leasing Group 43 % is unchanged and remains solid. Due to its anchoring Receivables in Sparkassen-Finanzgruppe and its long-term busi- from customers 53 % ness relationships with credit institutions, Deutsche Leasing assets Leasing has a solid and broadly diversified financing base, including in relation to its planned future

growth. STATEMENTS FINANCIAL CONSOLIDATED

The parent company reported net income for the year of EUR 45.3 million. This provides the basis for the proposal to leave the distribution to the shareholders of Deutsche Sparkassen Leasing AG & Co. KG unchanged at EUR 35.0 million (previous year: EUR 35.0 million), in line with the adopted equity strategy. Deutsche Leasing thus continues to adhere to its sustainable dividend policy, at the same level as in the past few years.

The net asset, financial and earnings position of the Deutsche Leasing Group remains in good order. GROUP INFORMATION GROUP

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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 FINANCIAL PERFORMANCE INDICATORS expenses (declining interest-rate trend, start-up costs from acquisition and advance depreciation, by com- As in the previous year, Deutsche Leasing is managed parison with their straight-line leasing instalment on the basis of a Group-wide integrated logic which equivalents) and calculated profits in a given portfolio. focuses on the development of new business as well as its net asset value and equity, with due consideration While the net asset value calculation plays a less prom- of 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 (confirmed) transactions within a equity a company’s net asset value is used for finan- specific reporting period, including the total historical cing 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. This does not include “new ance with commercial law and the basis for a general business” from factoring business. indication of net income realised within a given period. This is referred to as the economic result for the period. On the development of new business, please refer to Deutsche Leasing calculates this figure throughout its the › “Business performance” chapter. Group on the basis of the industry standard developed by the Federal Association of German Leasing Compa- Net asset value nies. The net asset value calculation is used as necessary supplementary information in addition to the finan- On the development of the net asset value, please refer cial statements prepared in accordance with German to the › “Earnings position” chapter. commercial law for leasing companies. It enables the disclosure of hidden reserves and hidden liabilities as Equity well as future earnings potential resulting from the To ensure adequate economic foundations for its growth volume/portfolio entered into. It is thus able to tran- objectives and as cover against possible unexpected scend the inherent weaknesses associated with a profit risks, Deutsche Leasing is continuing to strengthen its and loss account prepared according to commercial equity base on an ongoing basis (including provisions law (periodisation, inevitable establishment and in accordance with §§ 340f and 340g HGB) through its release of hidden reserves) and to avoid the potential own resources. mismanagement which may result from a one-sided 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. 11.6 years Employees (previous year: 11.1), with an average age of 45.1 years As well as a sustainable business model, well-qualified, (previous year: 44.8). The fluctuation rate amounted to motivated and committed employees both in Germany 4.5 per cent (previous year: 3.9 per cent) and the sick- and other countries and a high level of attractiveness ness level to 5.4 per cent (previous year: 5.3). as an employer are critical to the business success of the Deutsche Leasing Group. In view of the demographic A performance-oriented remuneration system links trend, transparent labour markets and regional factors individual employees’ goals with the company’s stra- (such as the “Rhine-Main banking sector”), a company’s tegic objectives and thus provides an additional frame- attractiveness as an employer is increasingly important. work for the company’s consistent management.

The dedication and expertise of Deutsche Leasing’s On the basis of our employees’ in-depth expertise employees are vital to its success in ensuring a high and many years of experience, numerous projects and level of satisfaction on the part of its customers and strategic realignments were initiated and successfully partners. Through comprehensive qualification and implemented within the company in the period under training measures, employees and managers are sup- review. A key factor in this success was the early and ported in their career and personnel development. Key target-oriented inclusion of our employees, who oper- areas of focus are a customer orientation, teaching sales ated with a high level of commitment and dedication skills and strengthening advisory and asset finance as multipliers, ambassadors and of course as special- expertise. Moreover, for international business em- ists on behalf of “their project”. Getting involved – ployees also require linguistic and intercultural skills. in the sense of assuming genuine responsibility – remains a key element of our corporate culture devel- All of Deutsche Leasing’s employees set great store by opment process. In addition, the Group’s employees its corporate culture and its central values of “trust”, underwent training courses with the key goals of “team spirit”, “passion” and “commitment”. On the strengthening their willingness to embrace change basis of these values, a holistic cultural process has and their ability to do so. been established throughout the Group, so as to prepare it for the future. The four cornerstones of this Deutsche Leasing is aware that it is necessary to ap- culture – “Assuming real responsibility”, “A market proach ever faster and increasingly complex cycles STATEMENTS FINANCIAL CONSOLIDATED orientation”, “A focus on getting things done” and of change professionally and confidently, as a basic “Learning from errors” – play a key role in the compa- precondition in order to ensure a company’s future ny’s targeted and continuous, ongoing development. viability. Deutsche Leasing organises its initial train- This process is continuously implemented, with the ing, its dual courses and its programmes for trainees involvement of all of the Group’s employees and and young and upcoming managers on the basis of a managers. This corporate culture is the key foundation far-sighted approach within the context of its corporate of the Deutsche Leasing Group’s success and repre- strategy, and does so with outstanding results. This is sents the basis for an improvement in the level of an investment which pays off. In the period under customer and employee satisfaction. review, Deutsche Leasing was able to fill management positions internally with former apprentices, dual- On the balance-sheet date, the Deutsche Leasing Group course students and trainees. had a total of 2,526 (previous year: 2,461) employees, of which 468 outside Germany (previous year: 473). GROUP INFORMATION GROUP

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Deutsche Leasing currently has 7 trainees (previous Deutsche Leasing continues to support and to assist a year: 8) with permanent employment contracts. The large number of organisations and associations company’s initial training programme is currently through donations and funding. offering 32 apprentices a career in office administration and also, through dual courses, apprenticeships Deutsche Leasing is also actively dedicated to sports leading to a Bachelor of Arts degree in International funding, such as the German sport aid foundation Business Administration (in partnership with the (Stiftung Deutsche Sporthilfe). As part of Sparkassen- accadis university of applied sciences) or a degree in Finanzgruppe, Deutsche Leasing is also a “Top Partner Business Administration with an integrated bank of Team Germany” and thus supports the German officer apprenticeship. After successfully completing Olympics teams and Paralympics team as well as their training or courses of study, all of Deutsche young sportsmen and women and grassroots sport. Leasing’s apprentices and students enrolled on Bach- elor degree programmes were offered full-time employ- In the financial year 2016/2017, Deutsche Leasing also ment positions. All of these trainees have taken on supported a large number of cultural initiatives, such more advanced roles in line with the core areas of as through its commitment to the “Blickachsen” sculp- their training and their interests. ture exhibition in Bad Homburg v. d. Höhe. Particularly notable is Deutsche Leasing’s relationship of several Social commitment years’ standing with the Rheingau Music Festival in the As an important member of Sparkassen-Finanzgruppe, form of a premium partnership. The Rheingau Music Deutsche Leasing lives up to its social responsibility in Festival has enriched the region’s cultural scene for various ways, for example through commitments to art many years now, with almost 150 concerts at over 40 and culture, science, social issues and sport. venues every summer.

Besides purely financial initiatives, many Deutsche Deutsche Leasing is also active in science funding Leasing employees also show a high level of social and provides assistance for a wide range of research engagement through the company’s “Socially Active projects conducted by various institutions. Deutsche Employees” (SAM) scheme. Since 2011, Deutsche Leasing’s long-standing membership of the funding Leasing employees have demonstrated commitment association for the University of Cologne’s leasing to social projects on their own initiative through this research institute documents the company’s intensive scheme. A large number of projects were once again relationships with universities. In addition, the lec- realised in the financial year 2016/2017. Deutsche tures and forums supported by Deutsche Leasing and Leasing provides financial support for these projects its membership of Sparkassen-Finanzgruppe’s science and also assists them by granting leave to participating funding association ensure an active exchange bet- employees. ween the realms of theory and practice.

In the financial year 2016/2017, Deutsche Leasing conducted the business game “Business meets school”. This business game was developed by Deutsche Leasing apprentices. The participating pupils are able to gain practical experience of the world of business.

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Report on risks and opportunities and improved exploitation of this potential. SME and forecast report customers are supervised together with the savings banks on a target group-oriented basis. This is rounded off by means of segment-oriented sales management. Report on opportunities To ensure a high level of satisfaction on the part of the savings banks and their customers, specific support Deutsche Leasing seeks to identify opportunities at the concepts have been developed in accordance with their earliest possible moment, to assess these opportunities individual requirements. Business with smaller corpo- and to take suitable action so that these opportunities rate, business and commercial customers is a particular can be transformed into commercial success. area of focus for the next few years. The existing customer service centre (CSC) is to provide increased sales Starting with a comprehensive analysis of the market support for the savings banks and will be expanded to environment, organic growth opportunities are sys- become a specialised advisory team for standardised tematically identified within the scope of its annual small ticket business. medium-term planning. Market potential, customer requirements as well as general and specific market This planned business development is underpinned and environment developments, trends and also com- by efficient processes and systems. For small ticket petitors and regulatory requirements are included in business, credit and contract processes are combined the detailed analysis. The goals and business activities within a specialised unit (encompassing multiple busi- defined in the company’s business strategy on the ness segments) for transaction volume-based bulk basis of its “Strategy 2025” and the measures thus business. This unit supports the business segments determined in accordance with the company’s risk through standardised, system-supported and cost- strategy serve as the basis for medium-term planning efficient procedures and services. for the financial years 2017/2018 to 2019/2020 of the Deutsche Leasing Group. These strategies are verified In addition, the Group is focusing on expanding the and (if necessary) adjusted every year. range of services offered through online channels, for more intensive exploitation of existing intragroup Deutsche Leasing sees future growth opportunities in potential. the following areas in particular: STATEMENTS FINANCIAL CONSOLIDATED

INTERNATIONAL BUSINESS MARKET AND INTRAGROUP POTENTIAL Deutsche Leasing sees international business as a Intragroup business with the savings banks is one of further growth field. Here, it supports vendors in their the Group’s largest growth areas. Having been success- international sales markets and German companies in fully opened up, this business segment is undergoing their foreign investments. further intensification and development, in close cooperation with the savings banks and with the structural Due to the German business sector’s strong export involvement of regional associations and advisory focus and international presence, Deutsche Leasing boards. This will enable a targeted focus on the existing also provides international support for its customers market potential offered by Sparkassen-Finanzgruppe and partners through its foreign network. In concrete GROUP INFORMATION GROUP

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terms, Deutsche Leasing enters into partnerships with Risk report international vendors and assists German companies and their foreign subsidiaries with direct investments. The German business sector’s global presence offers Risk management supports the management of the market opportunities for the Deutsche Leasing Group Deutsche Leasing Group in the implementation of its which it accesses through its foreign network in 22 business and risk strategy and considers all relevant countries. risk types and all of the Group’s German and foreign companies. Within Sparkassen-Finanzgruppe, through its Interna- tional business segment Deutsche Leasing serves as an Centralised Risk Management coordinates holistic, international asset finance and asset service centre of company-wide risk management for all types of risk. excellence. This department has technical competence and responsibility for methods and models of risk measurement, control and aggregation, for calculation of FACTORING risk-relevant parameters, for internal risk control and for internal and external reporting. The factoring business continues to offer significant growth potential for Deutsche Leasing. Purchasing of This department also performs the risk controlling debt is increasingly significant as a product which function prescribed in the minimum requirements supplements leasing, since factoring represents an for risk management (Mindestanforderungen an das indispensable component of the financing mix for a Risikomanagement, MaRisk). The head of the Central growing number of SMEs. The complementary nature Risk Management department is responsible for the of leasing and factoring gives rise to synergies that risk controlling function. affect customer requirements, the customer structure as well as risk management. Risk reporting provides quarterly reporting on the development of risk-bearing capacity (RBC) and all key Existing factoring potential is exploited through the risks. In addition, an ad hoc reporting procedure has following distribution channels: the savings banks, been established for information which is significant intermediaries and direct distribution. This is in terms of risk aspects. Action recommendations for achieved through a modular package of services for risk control are also provided. financing, loss protection and debt management which undergoes systematic development. The management receives support and advice in its decision-making on risk-related issues through the central risk board of Deutsche Leasing. Information INSURANCE concerning the various risk types is jointly presented in this monthly committee. Deutsche Leasing sees additional revenue potential in the development of its activities in the field of insurance Internal Audit regularly audits the Deutsche Leasing brokerage, which it offers as a supporting service in Group’s risk management within the scope of its audit its business segments. In principle, in future each of plan. Deutsche Leasing’s solutions is to include an insurance component.

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The goal of opportunities and risk management is to RISK-BEARING CAPACITY establish a balanced relationship between risk and opportunity/income at the level of the overall Group; The risk-bearing capacity concept is based on the risk adequate risk-bearing capacity is ensured in terms of coverage potential calculated in line with the net asset the relationship between the level of capital available value and a going-concern approach, with a confidence for risk coverage and overall risks. The risk-bearing level of 99 per cent. In addition, a deduction item is capacity calculation provides the basis for the maintained for coverage of rare loss categories. This is Deutsche Leasing Group’s risk control strategy. based on a risk calculated with a higher level of confidence (99.95 per cent). The risk-bearing capacity (RBC) Deutsche Leasing endeavours to continuously develop of the Deutsche Leasing Group as of 30 September its risk measurement methods, so as to comply with 2017 is in line with the expectations derived from busi- the requirements for modern risk management as well ness planning; the Deutsche Leasing Group's risk as current regulatory trends. In the financial year bearing capacity remains clearly intact. 2016/2017, the following risk type underwent changes: country risk. Limits apply for all relevant quantifiable risk types/ categories within the framework of the risk-bearing capacity concept. Overall, the risk coverage capital remains sufficient so as to be able to cover further risks in future.

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 STATEMENTS FINANCIAL CONSOLIDATED 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. GROUP INFORMATION GROUP

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The risk types credit and asset risk, market price risk, limits. These limits were adjusted for subsequent operational risk, business risk and translation risk are years; in overall terms, the total VaR limits assigned determined on the basis of VaR methods. The risks deter- have increased. mined through a historical stress test and a serious hypothetical stress test were covered by the available risk coverage capital. Risk-bearing capacity was thus RISK INVENTORY intact in all stress scenarios. The historical stress test is a macroeconomic stress test covering multiple risk Within the scope of the regular risk inventory, materi- types. This is based on the historical scenario of the ality analyses have been performed for all of the risks situation in the financial year 2008/2009 and reflects identified, enabling clear categorisation of risks as a serious economic downturn, as required by the material and non-material. With the exception of repu- minimum requirements for risk management. tation risk, all of the remaining risk categories/types continued to be classified as material and non-material In the financial year 2016/2017, risk-bearing capacity risks. On the basis of a review of the materiality of and capital requirements planning once again formed reputation risk, this risk type is now classified as a a component of the planning process of Deutsche non-material risk. All quantifiable risks which may be Leasing, which involved inter alia a review of the VaR usefully limited by means of the available risk coverage capital (RCC) are included in the RBC calculation.

Risks at Deutsche Leasing

Risk types

Market price Liquidity Operational Equity invest- Business Other Credit risk Asset risk risk risk risks ment risk risk risks

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

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

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Credit risk Market price risk Credit risk is the risk of non-fulfilment of agreed pay- Market price risk refers to the general risk of unexpected ments or services under contracts concluded, resulting losses due to a change in market parameters (interest in a loss for Deutsche Leasing. The credit rates, share prices, exchange rates, commodity prices risk comprises the following risk categories: and resulting variables). At Deutsche Leasing, market price risk is limited to interest rate risk and currency | Customers’ credit risk: Customers’ credit risk risk. refers to the risk of the customer failing to make the payments agreed under the leasing, hire- Liquidity risk purchase, rental and loan agreements or related Liquidity risk at Deutsche Leasing covers the following service contracts concluded with it on account risk categories: insolvency risk and funding-spread of its default. risk. Insolvency risk is the risk of Deutsche Leasing no | Counterparty risk: Counterparty risk refers to longer being able to fulfil its current and future pay- the risk of the default of a professional market ment obligations in full or no longer being able to do participant (counterparty) in relation to invest- so in good time. Funding-spread risk is the risk of an ments, credit balances, foreign exchange trans- unanticipated loss resulting from changes in Deutsche actions and derivatives (with the replacement risk Leasing's refinancing curve because new borrowing is and the fulfilment risk considered separately). only possible at refinancing levels which are signifi- | Country risk: Country risk refers to the risk of cantly higher than expected. Increased funding spreads losses arising on account of crisis situations for result from a deterioration in Deutsche Leasing’s credit individual countries which result due to political rating or a general worsening of borrowing terms, on or economic events. Country risk applies in the grounds relating to the market itself. form of transfer risk and sovereign risk. | Lessor risk: Lessor risk refers to the risk of suffering Operational risk losses due to the customer asserting rights under Operational risk is the risk of losses due to the inade- rental agreements upon non-fulfilment of service quacy or failure of internal procedures and systems providers’ contractually agreed services. as well as people or external events. This definition includes legal risk and validity risk. Asset risk

Asset risk (also referred to as residual value risk) ap- Equity investment risk STATEMENTS FINANCIAL CONSOLIDATED plies for contracts with open residual values. In such Equity investment risk is the risk of unanticipated loss- contracts, the historical costs for the asset are not fully es in the event of the market value of an investment amortised through the lessee’s agreed instalments. Re- falling below its book value. sidual value risk refers to the risk of a loss in the event of the selling price realised on the asset at the end of Business risk the period negatively deviating from the previously Business risk describes the risk of business develop- calculated and anticipated selling price, the residual ment yielding lower income and/or higher costs than value. envisaged and in this respect the depletion of the net asset value at the end of the monitoring period by comparison with the current risk coverage potential as of the reporting date.

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Other risks As of 30 September 2017, the Group’s portfolio by sector Other risks cover the risk of an unanticipated loss 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 market price risk, liquidity risk, operational risk, equi- exceeds the limits laid down in the risk strategy. ty investment risk or business risk. Other risks include the following risk types: Following a decrease in the incidence of default in the previous year by comparison with the calculated risk | Translation risk: Translation risk refers to the risk of costs, this trend of a declining default volume remained the foreign-currency net asset value of the foreign intact in the financial year 2016/2017. companies leading to unanticipated losses due to exchange-rate fluctuations. Counterparty risk | Reputation risk: Reputation risk refers to the risk The value at risk for counterparty risk is determined of losses in the event that the reputation of the on the basis of the same credit portfolio model which is Deutsche Leasing Group suffers harm or deterio- applied for customers’ credit risk. rates. Such losses may also result, directly or indi- rectly, from other risk types which have material- As a rule, Deutsche Leasing only accepts banks as ised or may amplify these other risk types. counterparties, as business partners whose credit risk | Strategic risk: Strategic risk refers to the risk of is slight or virtually excluded. In accordance with the unanticipated losses resulting from poor manage- risk principles for transactions with banks, the risk ment decisions in relation to the business-policy volume for credit balances, investments, foreign ex- positioning of Deutsche Leasing Group. change transactions and derivatives is limited through | Liability risk: Deutsche Leasing is exposed to a maximum limits and maturity periods in accordance liability risk in terms of the risk of losses resulting with the credit rating and size of the counterparties. A from its position as an owner or importer of assets. balanced credit rating structure focusing on the upper to medium investment-grade segment and a strongly diversified portfolio have thus been safeguarded. RISK MANAGEMENT FOR RELEVANT RISKS Country risk Credit risks Deutsche Leasing calculates the value at risk for the Customers’ credit risk country risk on the basis of an expert-based scenario Deutsche Leasing calculates the value at risk (VaR) for approach for the assessment of losses in the 99 % customers’ credit risk on the basis of a credit portfolio quantile. model in the 99 % quantile. The potential losses upon realisation of a specific The credit worthiness structure of Deutsche Leasing’s country risk event – such as a foreign exchange trans- own-risk exposure continued to improve in the finan- fer restriction – are determined for selected countries. cial year 2016/2017. As well as the generally positive For quantification of the risk potential, the determined economic situation and new business with strong losses are included for those countries which are of credit ratings, improvements in the rating process also particular relevance for Deutsche Leasing on account contributed to this. of current or persistently negative trends and their risk relevance in its country portfolio. The individual countries are assigned limits and these limits are monitored for operational management of country risks.

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Asset risks risk resulting from open residual values. Residual Asset risk is calculated for the car portfolio by means of value quotations are exclusively handled by special- a portfolio model, on the basis of the 99 % quantile. On ised employees in its asset management department. the other hand, the loss potential in the equip portfolio is determined by means of an expert assessment. The results of expiring contracts featuring open residual values were once again positive in the financial year The road vehicles business segment continues to con- 2016/2017. The agreement of terms and conditions of sistently utilise conservative residual value assessments use and return on a case-by-case basis has had a posi- in line with market norms and transfers residual value tive effect on the technical condition of assets leased risks to solvent third-party guarantors in some cases. under operating leasing contracts. Due to the contin- A high proportion of premium brands in the contract uing positive economic situation, demand for second- portfolio is ensured. Diversification of makes, models hand assets in good condition remained strong in all and resale channels and continuous support for contract market segments. management have a significant impact on the level of success in reselling vehicles. In its information and communication technology business segment, in particular Deutsche Leasing Ongoing monitoring of the leasing and second-hand handles operating leasing contracts with larger SME car market, stringent use of all available asset manage- customers and major customers. A calculation of ment instruments, professional development of sales residual values on the basis of conservative bench- and organisational structures and processes at Auto- marks enabled additional revenues through contract Expo and resale analyses which differ in terms of extensions or sales. These clearly exceeded the calcu- vehicle types and sales channels provide a solid basis lated values. In view of the continuing stable situation for sound residual value management. The residual on the IT market in Germany and the structure of its value assessment is regularly reviewed by means of SME and major customers with strong credit ratings in external asset-based validation (incl. EurotaxSchwacke its portfolio, Deutsche Leasing once again envisages GmbH). Positive resale results were once again achieved sustained positive business development in the finan- in the financial year 2016/2017, on the basis of the cial year 2017/2018. The contribution margins realised conservative residual value calculation for new busi- show that the Group has succeeded in exploiting the ness in previous years, even though the continuing income opportunities available from entering into diesel discussion resulted in a slight decline in reve- risks associated with residual values and follow-up STATEMENTS FINANCIAL CONSOLIDATED nues by comparison with previous years. In the finan- business expectations. This is largely attributable to cial year 2016/2017, on grounds of caution Deutsche professional and focused asset management. Leasing slightly reduced the residual values for new business on model-specific grounds, in order to avoid Market price risks future burdens. Future developments in relation to In line with the basic principle that financing activities diesel vehicles in particular are being closely moni- provide for congruent interest rate-optimised financing tored. Appropriate measures have been analysed and of customer business, the Deutsche Leasing Group initiated within the scope of planning in this respect. does not pursue any own-account trading of money and capital market products. With adequate valuation methods in its machinery and equipment business segment, Deutsche Leasing has solid foundations for control and management of the GROUP INFORMATION GROUP

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To a limited extent, interest rate risks are entered into aries’ operating business is likewise financed in the in order to realise additional income resulting from same currency in principle. Transactions not denomi- market trends, within the scope of original financing nated in the euro or in the respective national currency requirements, and are managed by means of a strin- are also mainly denominated in US dollars. The risks gent limit system. of exchange range fluctuations which are inherently associated with such transactions generally apply in In terms of currency risks, customer transactions relation to those margin components included in always have same-currency financing. Currency risks receivables from customers that are not used for therefore apply only temporarily (if at all) during oper- financing provided, as a rule, in the same currency. ational execution of transactions or through margin These currency risks are measured by means of the components of customer receivables which are not value-at-risk method, using the variance-covariance secured through same-currency financing. method.

The applicable rules for control of market price risks Liquidity risk are based on the above-mentioned principles and The business activities and the continuing growth of consistently limit the scope of the risk position which Deutsche Leasing Group are also based on permanent is permissible for optimisation of financing costs availability of liquidity and financing through optimised through interest rate and currency risk limits in line interest rates. Deutsche Leasing thus adheres to the with the economic risk. This limit is linked with sensi- principle of financing its business at matching maturi- tivity limits for operational control of interest rate risk. ties. a) Interest rate risk The guidelines applicable for liquidity control reflect Interest rate risks are subject to operational monitoring this basic conservative orientation and limit the scope and control on the basis of sensitivities (basis point of the risk position which is permissible for optimisa- value concept), with corresponding limitations of the tion of financing costs. In relation to insolvency risk, permitted interest rate-induced changes in present the limits defined for the liquidity risk refer to nominal values in line with the control guidelines. For calculation minimum requirements for free liquidity. In regard to of the economic risk and for operational management the funding-spread risk, the limits are based on the purposes, value-at-risk calculations are performed for economic risk resulting from liquidity mismatches open interest rate positions. These calculations are and are broken down into nominal position and sensi- based on the variance/co-variance method and apply tivity limits at the operational level. differentiating assumptions concerning the holding period of the open interest rate position and the inclu- In concrete terms, as a reflection of insolvency risk sion of equity as a component of the financing port- liquidity risk is controlled and monitored through folio. liquidity planning which distinguishes between various planning periods. b) Currency risk In Germany, foreign currency risks are limited to a few Overall, in the past financial year (and also due to the transactions mainly executed in US dollars and (in a ECB’s continuing expansionary monetary policy) a small number of cases) in British pounds, all of which high volume of liquidity remained available on the have same-currency financing. The foreign subsidi- financing markets. In this market environment,

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Deutsche Leasing continued to expand its relation- Deutsche Leasing has outsourced selected corporate ships with savings banks and with other credit institu- functions to other companies in accordance with § 25b tions (including business development banks) and KWG. A regular risk analysis is performed in case of increased the scope of available financing lines. At the outsourced activities. This assesses the nature, scope, end of the financial year, following coverage of the complexity and risk content of outsourced processes. increased financing requirement due to new business A risk analysis is performed prior to the conclusion of growth these free lines amounted to approx. EUR 3.4 a new outsourcing agreement or in case of changes to billion and thus exceeded their target levels. an existing outsourcing agreement. This risk assessment is used to determine whether outsourcing is Economic risk resulting from funding-spread risk is material or immaterial from the point of view of risk. quantified on the basis of scenario analyses. This is The assessment method applied for this purpose implemented according to sensitivity calculations includes risk-sensitive assessment criteria and distin- (liquidity basis point value concept) on the basis of the guishes between the materiality assessment and the extension requirements for borrowed funds resulting assessment of the service provider. from the maturity structure for future liquidity inflows and outflows. Equity investment risk, business risk, translation risk The equity investment risk is determined using risk Operational risks weightings prescribed according to regulatory require- In principle, operational risks may result from any ments for equity investment exposures. The business commercial activities and are thus inherent in the risk is estimated on the basis of historical deviations business activities of the Deutsche Leasing Group and in the actual values of relevant components of the are particularly dependent on the complexity of prod- company’s business performance in relation to their ucts and processes. Systematic risk management ena- target values. The translation risk is measured by bles early identification of these risks and implemen- means of a VaR approach. These risks are likewise re- tation of suitable control measures to avoid or limit stricted by specifying limits within the scope of the them. RBC concept and are monitored and controlled by means of internally prescribed processes. The risk management process encompasses regular risk identification and quantification in all depart- Other risks (litigation and legal risks) ments of the company and an analysis of loss events The potential risks for the Deutsche Leasing Group STATEMENTS FINANCIAL CONSOLIDATED actually arising. Moreover, an annual “risk analysis” is arising from current litigation are fully covered conducted to prevent other criminal acts which might through provisions. jeopardise the Deutsche Leasing Group’s net asset situation. This identifies, analyses and evaluates potential In summary, subject to unchanged conservative gateways for internal and external criminal activities. valuation benchmarks Deutsche Leasing has made Deutsche Leasing focuses in particular on the early appropriate provision for all discernible risks in its identification of new types of fraud and on how to consolidated financial statements. Non-scheduled prevent them. depreciation, provisions and valuation adjustments remain adequate and are calculated according to conservative benchmarks. In addition, Deutsche Leasing has established reserves in line with §§ 340f GROUP INFORMATION GROUP

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and 340g HGB; it has also established significant According to the forecast issued by the council of eco- hidden risk provisions due to advance expenses nomic experts, the upturn in Germany will undergo typical of the leasing business. broad consolidation at a high level. Private consumption, a very strong labour market situation and stable Overall, no special business model-related risks ex- foreign demand continue to support German economic ceeding the normal level of risk and jeopardising growth. Due to the German economy’s strong export going-concern status are discernible for the Deutsche focus, the outcome of the Brexit negotiations might Leasing Group. give rise to dampening effects. It also remains to be seen how the ECB’s withdrawal from its expansionary monetary policy will play out. Allowing for the above- Forecast report for the mentioned parameters, the council of economic Deutsche Leasing Group experts expects gross domestic product growth of 2.2 per cent.

According to the German council of economic experts, Deutsche Leasing operates in a market environment the world economy will register strong growth in the which is characterised by a continuing low interest- calendar year 2018. This will be supported by the rate phase with related adverse impacts on new busi- advanced economies and the emerging markets in ness, earnings and costs. Moreover, competition with almost equal measure. In the USA, private consump- banks and leasing companies for SME customers’ tion is gradually declining, but this is being cushioned attractive business remains strong. These customers by a rise in the volume of investment. In the emerging themselves have large liquidity and capital cushions. markets, the upturn due to rising commodities exports will undergo further consolidation over the coming For the financial year 2017/2018, in view of the eco- year. The Chinese economy’s rate of growth over the nomic predictions outlined above Deutsche Leasing next few years will slow, while remaining at a high assumes marginally positive growth for the overall level. World economic growth of 3.2 per cent is economic environment. However, heightened setback expected. risks continue to apply. Moreover, for the next few years a persistently low interest-rate level must be The council of economic experts predicts continued expected which will continue to have an adverse economic growth in the Eurozone over the next two impact; there is no prospect of a rapid return to a higher years. The appreciation of the euro will slightly dampen interest-rate level. Deutsche Leasing envisages a volume foreign demand. Private consumer demand will supply of new business growth slightly in excess of the overall momentum. Investments will likewise continue to pick economic trend and a continuous increase in its net up due to the high levels of capacity utilisation. Overall, asset value. The Group will continue to strengthen its growth of 2.1 per cent is predicted for 2018. In principle, equity and its provisions in accordance with §§ 340f the experts do not expect the ECB’s very slow with- and 340g HGB. drawal from its current monetary policy to have any negative impact on the Eurozone’s economic develop- In view of its market position and its anchoring within ment. Sparkassen-Finanzgruppe, Deutsche Leasing continues to have attractive market opportunities and development potential in the asset finance market. On the basis of

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its central strategic orientation, Deutsche Leasing sees key growth impetus above all in intragroup business with the savings banks, the further expansion of small ticket business, intensified support for its vendor partners, international business and factoring as well as supplementary marketing of insurance services. In its focus on its long-term earnings target, it continues to adhere to the conservative risk policy of the Deutsche Leasing Group.

Deutsche Leasing would like to thank its customers, its partners and Sparkassen-Finanzgruppe for this positive and successful relationship in the financial year 2016/2017. Thanks are also due to all of the employees of Deutsche Leasing worldwide who have provided the foundations for another successful financial year on the strength of their performance and their commitment. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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Deutsche Sparkassen Leasing AG & Co. KG

Basic information regarding Leasing income resulting from leasing and hire-pur- Deutsche Sparkassen Leasing AG chase business and from the sale of second-hand & Co. KG leasing assets increased by EUR 30 million, from EUR 4,526 million to EUR 4,556 million, in the financial Deutsche Sparkassen Leasing AG & Co. KG is the parent year 2016/2017 and was thus almost 1 per cent higher company of the Deutsche Leasing Group. Deutsche than in the previous year. This increase reflected an Sparkassen Leasing AG & Co. KG essentially pursues expansion of the portfolio which was recognised in the same type of business, in the same operating en- current income. vironment, as the Deutsche Leasing Group. Please refer to the › Basic information regarding the Deutsche Leasing Overall, the development of leasing expenses which Group” chapter for further details. are associated with leasing income and of interest income is comparable with the income trend. In the year under review, it had one branch office in Berlin. This handled risk decision-making and proces- Related depreciation on leasing assets decreased by sing of a portion of new and existing business in the 5 per cent or EUR 117 million, from EUR 2,325 million Savings Banks and SMEs business segment. On 30 to EUR 2,208 million. In principle, scheduled deprecia- September 2017, it had 29 (previous year: 35) em- tion on newly acquired leasing assets included in this ployees. amount in the period remains in line with the term of the underlying leasing contracts.

Economic report Due to the continuing low-interest phase and the associated lower interest-rate level for borrowed funds, The overall economic and industry-specific environ- interest income once again improved significantly, ment presented in the › “Economic report” chapter and from EUR -56 million to EUR -48 million. business performance are largely consistent with those of Deutsche Sparkassen Leasing AG & Co. KG. The low interest-rate level remained a key factor shaping the result for the financial year. It adversely affected the rate of interest for interest-free liabilities Earnings position tied up in lending business and the liquid capital base as well as the net interest margin contributions achievable on the market. In the financial year 2016/2017, with a further strengthening of the equity base and a further increase General administrative expenses increased by 2 per cent in the provisions in accordance with §§ 340f and 340g to EUR 205 million in the financial year 2016/2017. HGB net income for the year amounted to EUR 45.3 This is due to increased expenses for wages and sala- million (previous year: EUR 45.3 million). ries due to regular salary increases and recruitment of

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personnel as well as increased expenses for retirement General statement by the Management pensions. In the previous year, the beneficial effect of Board on the economic situation the amendment of the law concerning the interest rate calculation for discounting of provisions for pensions and similar obligations resulted in considerably lower Deutsche Sparkassen Leasing AG & Co. KG reported a expenses for retirement pensions. net income for the year of EUR 45.3 million. This income provides the basis for the proposal to distribute a divi- Equity increased by EUR 10 million, from EUR 627 dend to the shareholders in the amount of EUR 35.0 million to EUR 637 million. Deutsche Leasing is contin- million (previous year: EUR 35.0 million). Deutsche uing to pursue its strategy of strengthening its equity Leasing thus continues to adhere to its sustainable and has also made further allocations to its fund for dividend policy of the past few years, while complying general banking risks in accordance with §§ 340f and with its adopted equity strategy. 340g HGB. The net asset, financial and earnings situation of Deutsche Sparkassen Leasing AG & Co. KG remains Financial position in good order.

The economic situation outlined in the › “General The financial position outlined in the › “Financial posi- statement by the Management Board on the economic tion” chapter is largely consistent with the financial situation” chapter is largely consistent with the economic position of Deutsche Sparkassen Leasing AG & Co. KG. situation of Deutsche Sparkassen Leasing AG & Co. KG.

Net asset situation Financial and non-financial performance indicators

The total assets of Deutsche Leasing increased by EUR 219 million by comparison with the previous year and The performance indicators outlined in the › “Financial amount to EUR 11.7 billion. and non-financial performance indicators” chapter are

largely consistent with the performance indicators of STATEMENTS FINANCIAL CONSOLIDATED The net asset situation remains mainly shaped by Deutsche Sparkassen Leasing AG & Co. KG. leasing assets as well as receivables from customers. At EUR 14.3 billion, leasing assets, measured at initial On the balance-sheet date, Deutsche Sparkassen values, were higher than in the previous year (EUR 14.1 Leasing AG & Co. KG had a total of 1,358 (previous year: billion). 1,304) employees. For further information, please refer to the › “Employees” chapter. GROUP INFORMATION GROUP

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CONSOLIDATED MANAGEMENT REPORT

Report on risks and opportunities and forecast report

Report on risks and opportunities Forecast report

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

Bad Homburg v. d. Höhe, 19 December 2017

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

70 Consolidated balance sheet

72 Consolidated statement of profit and loss

74 Notes to the consolidated financial statements

90 Statement of changes in equity

92 Statement of cash flows CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL CONSOLIDATED GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheet as at 30 September 2017

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

Assets

As at 30/9/2017 As at 30/9/2016

EUR EUR TEUR

1. Cash reserves a) Cash in hand 36,032.82 51 2. Receivables from credit institutions a) Due daily 182,034,222.69 392,335 b) Other receivables 44,472,377.69 226,506,600.38 55,511 3. Receivables from customers 8,272,341,997.68 7,666,635

4. Equities and other non-fixed interest securities 3,808,643.49 805 5. Investments 188,007,218.18 168,427 of which: in credit institutions EUR 166,517,492.84 (previous year: TEUR 148,264) 6. Shares in affiliated companies 13,289,157.44 13,431

7. Leasing assets 10,187,305,140.67 9,946,290

8. Intangible assets a) Concessions, industrial property rights acquired for consideration and similar rights and assets and licenses for such rights and assets 22,067,562.13 21,384 b) Goodwill 54,628,327.59 60,830 c) Advanced payments 7,046,594.51 83,742,484.23 3,825 9. Property, plant and equipment 131,562,940.52 98,309

10. Other assets 236,570,329.10 242,734

11. Prepayments 11,483,074.56 11,199

12. Surplus resulting from offsetting of assets 184,696.70 153

Total assets 19,354,838,315.77 18,681,919

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Equity and liabilities

As at 30/9/2017 As at 30/9/2016

EUR EUR TEUR

1. Liabilities owed to credit institutions a) Due daily 883,433,723.83 931,417 b) With agreed maturity or notice period 10,847,362,592.85 11,730,796,316.68 10,474,615 2. Liabilities owed to customers a) Other liabilities aa) Due daily 525,900,643.51 502,951 ab) With agreed maturity or notice period 771,594,643.32 1,297,495,286.83 450,284 3. Liabilities evidenced by certificates a) Issued bonds 527,500,000.00 465,700 4. Other liabilities 302,187,584.05 310,212

5. Deferred income 4,217,347,199.08 4,334,090

6. Provisions a) Provisions for pensions and similar obligations 116,944,365.08 110,008 b) Provisions for taxation 6,642,540.47 8,003 c) Other provisions 118,982,855.98 242,569,761.53 118,159 7. Subordinate liabilities 13,238,166.03 16,595

8. Fund for general banking risks 225,000,000.00 195,000

9. Equity a) Called-up capital subscribed capital/ equity shares of limited partners 240,000,000.00 240,000 b) Reserves 376,282,735.56 349,683 c) Differences from currency translation 10,685,869.57 15,475 d) Non-controlling interests 99,770,731.73 90,956 e) Net profit for the year 71,964,664.71 798,704,001.57 68,771 Total equity and liabilities 19,354,838,315.77 18,681,919

1. Contingent liabilities Liabilities under suretyships and guarantee agreements 255,615,096.74 258,504 2. Other obligations Irrevocable loan commitments 177,191,751.64 212,768 GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statement of profit and loss for the period from 1 October 2016 to 30 September 2017

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

2016 / 2017 2015 / 2016

EUR EUR EUR TEUR

1. Leasing income 6,866,998,195.86 6,643,356

2. Leasing expenses - 3,914,624,753.95 2,952,373,441.91 - 3,550,982

3. Interest income from a) Credit and money market transactions 144,870,901.33 94,724 4. Interest expenses - 149,739,036.36 - 4,868,135.03 - 162,929

5. Current income from a) Investments 10,614,248.53 14,559 b) Shares in affiliated companies 825,716.75 11,439,965.28 4,916 6. Income from profit and loss transfer agreements 3,601,403.15 7,118

7. Commission income 21,831,469.85 26,353

8. Commission expenses - 24,843,799.20 - 3,012,329.35 - 23,777

9. Other operating income 304,268,539.92 280,291

10. General administrative expenses a) Personnel expenses aa) Wages and salaries - 197,042,656.24 - 177,950 ab) Social security contributions and expenses for retirement pensions and - 30,878,453.49 - 227,921,109.73 - 29,400 other benefits of which: for retirement pensions EUR 1,428,702.41 (previous year: TEUR 2,912) b) Other administrative expenses - 122,899,562.02 - 350,820,671.75 - 116,829 11. Depreciation and valuation adjustments on a) Leasing assets - 2,489,758,985.89 - 2,607,362 b) Intangible assets and property, plant and equipment - 22,285,788.05 - 2,512,044,773.94 - 13,035

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2016 / 2017 2015 / 2016 EUR EUR EUR TEUR

12. Other operating expenses - 228,676,500.72 - 208,031

13. Depreciation and valuation adjustments on receivables and specific securities and allocations to provisions for leasing and loan business of which: - 62,777,391.05 - 100,205 expenses for allocation to the fund for general banking risks pursuant to § 340g HGB EUR 30,000,000.00 (previous year: TEUR 40,000) 14. Income from write-ups on investments, shares in affiliated companies and securities treated as non-current assets 343,479.35 437 15. Expenses from profit and loss transfer agreements - 750,758.12 - 1,110

16. Profit on ordinary activities 109,076,269.65 80,144

17. Extraordinary profit a) Extraordinary income 0.00 13,918 b) Extraordinary expenses 0.00 0.00 – 18. Taxes on income and profit - 23,368,636.18 - 19,988

19. Other taxes, not included under Item 12 - 1,716,745.42 - 1,587 20. Net income for the year 83,990,888.05 72,487

21. Non-controlling interests in profit - 12,426,661.00 - 3,721

22. Non-controlling interests in loss 400,437.66 5

23. Net profit for the year 71,964,664.71 68,771 GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements for the financial year 2016/2017

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 (registration court: Bad Homburg total of 97 subsidiaries have been incorporated in the v. d. Höhe, commercial register no.: HRA 3330) has pre- consolidated financial statements. By comparison with pared its consolidated financial statements for the the previous year, one subsidiary was included in the financial year ending 30 September 2017 in accord- group of consolidated companies for the first time and ance with commercial law provisions (§§ 290 ff. of the two subsidiaries were deconsolidated. German Commercial Code (Handelsgesetzbuch, HGB)), the supplementary provisions for credit institutions In the previous year, Deutsche Sparkassen Leasing and financial services providers (§§ 340 ff. HGB) as AG & Co. KG acquired a majority interest in Deutsche well as the provisions of the German Accounting Factoring Bank GmbH & Co. KG, Bremen. This company Ordinance for Banks and Financial Services Providers was included in the consolidated financial statements (Verordnung über die Rechnungslegung der Kreditin- on 30 September 2016 for the first time. Disclosures stitute und Finanzdienstleistungsinstitute, RechKredV). have been provided for the individual items of the The company makes use of RechKredV forms 1 (balance profit and loss account to ensure comparability with sheet) and 3 (vertical-format profit and loss account). the consolidated financial statements for the previous year. Due to the parent company’s legal form, equity is presented in deviation from the requirements stipulated The subsidiaries which are of minor significance for in the RechKredV forms. The components of the com- an assessment of the net asset, financial and profit pany’s reserves are not disclosed separately. situation − even collectively − have not been consolidated and have not been valued according to the Where disclosures may be provided either in the con- equity method. solidated balance sheet or in the notes to the consolidated financial statements, they are provided in the A total of twelve associated companies have been notes to the consolidated financial statements. 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 Objekt-Leasing GmbH Bad Homburg v. d. Höhe 100.0 S-Kreditpartner GmbH Berlin 33.3 Deutsche Factoring Bank GmbH & Co. KG Bremen 53.0 GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

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) Ltd. 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 Currency translation for foreign financial statements of 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 not recognised in income and are separately reported in The profits brought forward of consolidated subsidiar- equity. ies are allocated to the reserves.

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. GROUP INFORMATION GROUP

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Accounting policies Leasing goods, intangible assets and property, plant and equipment are subject to non-scheduled depreciation in case of permanent impairment. Leasing goods are Currency translation for assets and liabilities is in subject to non-scheduled depreciation in case of possi- accordance with the rules laid down in § 340h HGB ble risks associated with violations of leasing contracts. and §§ 300 (2) in conjunction with 256a HGB. In principle, other assets are reported at their historical Cash reserves and receivables from credit institutions costs. Where this includes assets resulting from termi- are reported at nominal value. nated leasing contracts, these are valued at amortised historical costs. In principle, receivables are reported at their historical costs. Claims under hire-purchase contracts and sales The surplus resulting from the offsetting of assets has of receivables are reported at their present value. Dis- been calculated pursuant to § 246 (2) HGB. cernible risks are taken into account by means of depreciation to the lower fair value. According to §§ Liabilities are valued at their settlement amounts. 253 (5) in conjunction with 298, 300 (2) HGB, write-ups are implemented where the grounds for depreciation Deferred income mainly consists of the selling prices are no longer applicable. resulting from the sale of leasing receivables. Where these result from the sale of non-straight-line leasing As a rule, scheduled depreciation on newly acquired instalments they are reversed in proportion to the leasing assets is in line with the term of the leasing capital, and otherwise on a straight-line basis. In case contracts. of non-monthly leasing instalments, deferred income includes income to guarantee realisation of revenues The straight-line depreciation method is used instead in accordance with the performance period. of the declining-balance depreciation method if this results in an increase in depreciation. Provisions for pensions have been valued using the projected unit credit method and their reported Intangible assets are reported at their historical costs amounts are based on an actuarial calculation. The less scheduled amortisation. Goodwill for Deutsche provision amount has been calculated in accordance Factoring Bank GmbH & Co. KG – which was consoli- with §§ 253 (2) in conjunction with 298, 300 (2) HGB dated for the first time on 30 September 2016 – is sub- and in conjunction with the German Provisions Dis- ject to straight-line amortisation over a period of 10 counting Ordinance (Rückstellungsabzinsungsverord- years, in accordance with § 253 (3) Clause 4 HGB. Other nung, RückAbzinsV), subject to the interest rates for goodwill components are subject to straight-line amor- accounting purposes fixed by the German Bundesbank tisation over the average residual terms of the respec- and on the basis of an average market interest rate tive company’s portfolio of contracts, over a period of for the past ten financial years of between 3.77 and 7.5 years. 4.03 per cent. This calculation is based on the current Heubeck 2005 G guideline tables and an index-linked Property, plant and equipment is valued at historical pension increase of between 1.00 and 2.00 per cent. costs less scheduled depreciation. An index-linked salary increase of 2.00 per cent has been assumed for a portion of the provisions for pen-

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sions. Provisions for anniversary bonuses have been Deferred taxes are calculated for time differences bet- calculated according to the projected unit credit method, ween the commercial and tax balance sheet valuations with a discounting rate of 3.24 per cent and an index- of assets, liabilities and accruals and deferrals, in prin- linked salary increase of 2.00 per cent. For calculation ciple encompassing includable tax loss carryforwards. of the rate of fluctuation, age- and gender-specific Timing differences resulting from the company’s fluctuation probabilities of 2.00 to 4.50 per cent have own balance-sheet items are included as well as those been applied. Old-age part-time working obligations applicable for subsidiary companies. Domestic and are calculated by means of a discounting rate of 1.45 per foreign subsidiaries which are not included in the tax cent and an index-linked salary increase of 2.00 per cent. group are also considered. Tax loss carryforwards are included in the valuation of deferred tax assets if they Provisions for taxation and other provisions are re- are expected to be offsettable against taxable income ported in the value of the settlement amount which is within a period of five years. Deferred taxes are calcu- deemed necessary according to a prudent commercial lated on the basis of the income tax rate for the respec- assessment. tive member company of the consolidated group of between 9.00 per cent and 34.00 per cent. Deferred tax Financial statements of foreign companies have been assets and liabilities are offset. Due to the overall included on the basis of the uniform valuation meth- assessment – including the deferred taxes from the ods for the consolidated financial statements, while annual financial statements of the incorporated com- considering peculiarities in individual countries and panies – in case of tax relief, balance-sheet reporting is complying with the principle of materiality. 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 re- kassen Leasing AG & Co. KG, since this option has not view has been prepared for financial assets as well as been used. interest-bearing deposit operations, including care- fully calculated risk and administrative expenses. The surpluses expected to result from this have been Notes on the consolidated balance sheet identified. This has not given rise to a need to establish provisions for contingent losses. Please see the fixed-asset movement schedule for In cases where liabilities (underlying transactions) disclosures concerning equities and other non-fixed are pooled (valuation units) to equalise opposite cash interest securities, investments, shares in affiliated flows or changes in value resulting from similar risks companies, leasing assets, intangible assets and entered into through financial instruments (hedging property, plant and equipment. instruments), the general valuation principles laid down in § 254 HGB will not apply insofar as and for as Please see below for the disclosures concerning receiv- long as opposite cash flows or changes in value equal- ables from credit institutions and customers as well as ise one another. For the effective portion, changes in the liabilities owed to credit institutions and customers the values of underlying transactions and hedging and liabilities evidenced by certificates. instruments are calculated according to the “net hedge presentation method” for interest and the “gross hedge presentation method” for currencies. GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Fixed-asset movement schedule

Historical costs Depreciation/amortisation Carrying amounts

1/10/2016 Additions Disposals Reclassifications 1/10/2016 in financial year Disposals 30/9/2017 30/9/2017 30/9/2016

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

1. Equities and other non- fixed interest securities 832,396.61 3,006,550.37 2,429.47 0.00 27,874.02 0.00 0.00 27,874.02 3,808,643.49 804,522.59

2. Investments

Investments in associated companies 160,189,461.72 19,679,875.64 65,616.37 0.00 0.00 0.00 0.00 0.00 179,803,720.99 160,189,461.72 Other investments 8,289,691.64 240,368.36 273,941.22 0.00 52,621.59 0.00 0.00 52,621.59 8,203,497.19 8,237,070.05

168,479,153.36 19,920,244.00 339,557.59 0.00 52,621.59 0.00 0.00 52,621.59 188,007,218.18 168,426,531.77

3. Shares in affiliated companies 13,967,002.36 353,700.00 495,887.54 0.00 535,657.38 0.00 0.00 535,657.38 13,289,157.44 13,431,344.98

4. Leasing assets

Leasing goods 16,437,147,368.12 3,240,489,754.36 3,279,931,621.98 + 368,848,806.87 6,912,633,671.29 2,489,758,985.89 2,498,690,844.35 6,903,701,812.83 9,862,852,494.54 9,524,513,696.83

Advanced payments 421,776,520.92 271,524,932.08 0.00 - 368,848,806.87 0.00 0.00 0.00 0.00 324,452,646.13 421,776,520.92

16,858,923,889.04 3,512,014,686.44 3,279,931,621.98 0.00 6,912,633,671.29 2,489,758,985.89 2,498,690,844.35 6,903,701,812.83 10,187,305,140.67 9,946,290,217.75

5. Intangible assets

Industrial rights 104,072,993.42 9,036,676.35 2,700,235.13 + 827,046.14 82,689,058.70 6,617,239.78 137,379.83 89,168,918.65 22,067,562.13 21,383,934.72

Goodwill 66,284,053.51 0.00 4,986.60 0.00 5,454,238.40 6,201,487.52 4,986.60 11,650,739.32 54,628,327.59 60,829,815.11

Advanced payments 3,824,819.88 4,163,809.20 114,988.43 - 827,046.14 0.00 0.00 0.00 0.00 7,046,594.51 3,824,819.88

174,181,866.81 13,200,485.55 2,820,210.16 0.00 88,143,297.10 12,818,727.30 142,366.43 100,819,657.97 83,742,484.23 86,038,569.71

6. Property, plant and equipment

Buildings on leasehold properties 87,690,729.13 33,908,799.12 164,969.35 0.00 14,241,738.92 3,268,763.41 117,111.13 17,393,391.20 104,041,167.70 73,448,990.21

Fittings, tools and equipment 61,029,354.64 8,827,806.88 2,198,796.96 + 642,258.20 37,672,219.68 6,198,297.34 1,940,200.29 41,930,316.73 26,370,306.03 23,357,134.96

Advanced payments 1,503,090.13 291,034.86 400.00 - 642,258.20 0.00 0.00 0.00 0.00 1,151,466.79 1,503,090.13

150,223,173.90 43,027,640.86 2,364,166.31 0.00 51,913,958.60 9,467,060.75 2,057,311.42 59,323,707.93 131,562,940.52 98,309,215.30

17,366,607,482.08 3,591,523,307.22 3,285,953,873.05 0.00 7,053,307,079.98 2,512,044,773.94 2,500,890,522.20 7,064,461,331.72 10,607,715,584.53 10,313,300,402.10

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Historical costs Depreciation/amortisation Carrying amounts

1/10/2016 Additions Disposals Reclassifications 1/10/2016 in financial year Disposals 30/9/2017 30/9/2017 30/9/2016

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

1. Equities and other non- fixed interest securities 832,396.61 3,006,550.37 2,429.47 0.00 27,874.02 0.00 0.00 27,874.02 3,808,643.49 804,522.59

2. Investments

168,479,153.36 19,920,244.00 339,557.59 0.00 52,621.59 0.00 0.00 52,621.59 188,007,218.18 168,426,531.77

3. Shares in affiliated companies 13,967,002.36 353,700.00 495,887.54 0.00 535,657.38 0.00 0.00 535,657.38 13,289,157.44 13,431,344.98

4. Leasing assets

Leasing goods 16,437,147,368.12 3,240,489,754.36 3,279,931,621.98 + 368,848,806.87 6,912,633,671.29 2,489,758,985.89 2,498,690,844.35 6,903,701,812.83 9,862,852,494.54 9,524,513,696.83

Advanced payments 421,776,520.92 271,524,932.08 0.00 - 368,848,806.87 0.00 0.00 0.00 0.00 324,452,646.13 421,776,520.92

16,858,923,889.04 3,512,014,686.44 3,279,931,621.98 0.00 6,912,633,671.29 2,489,758,985.89 2,498,690,844.35 6,903,701,812.83 10,187,305,140.67 9,946,290,217.75

5. Intangible assets

Industrial rights 104,072,993.42 9,036,676.35 2,700,235.13 + 827,046.14 82,689,058.70 6,617,239.78 137,379.83 89,168,918.65 22,067,562.13 21,383,934.72

Goodwill 66,284,053.51 0.00 4,986.60 0.00 5,454,238.40 6,201,487.52 4,986.60 11,650,739.32 54,628,327.59 60,829,815.11

Advanced payments 3,824,819.88 4,163,809.20 114,988.43 - 827,046.14 0.00 0.00 0.00 0.00 7,046,594.51 3,824,819.88

174,181,866.81 13,200,485.55 2,820,210.16 0.00 88,143,297.10 12,818,727.30 142,366.43 100,819,657.97 83,742,484.23 86,038,569.71

6. Property, plant and equipment

Buildings on leasehold properties 87,690,729.13 33,908,799.12 164,969.35 0.00 14,241,738.92 3,268,763.41 117,111.13 17,393,391.20 104,041,167.70 73,448,990.21

Fittings, tools and equipment 61,029,354.64 8,827,806.88 2,198,796.96 + 642,258.20 37,672,219.68 6,198,297.34 1,940,200.29 41,930,316.73 26,370,306.03 23,357,134.96

Advanced payments 1,503,090.13 291,034.86 400.00 - 642,258.20 0.00 0.00 0.00 0.00 1,151,466.79 1,503,090.13

150,223,173.90 43,027,640.86 2,364,166.31 0.00 51,913,958.60 9,467,060.75 2,057,311.42 59,323,707.93 131,562,940.52 98,309,215.30

17,366,607,482.08 3,591,523,307.22 3,285,953,873.05 0.00 7,053,307,079.98 2,512,044,773.94 2,500,890,522.20 7,064,461,331.72 10,607,715,584.53 10,313,300,402.10 GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

30/9/2017 30/9/2016

EUR TEUR

Receivables from credit institutions 226,506,600.38 447,846 a) Due daily 182,034,222.69 392,335 b) With agreed maturity or notice period 44,472,377.69 55,511 ba) up to three months 41,754,158.25 52,786 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 2,718,219.44 2,725 Receivables from customers 8,272,341,997.68 7,666,635 a) up to three months 1,559,729,245.49 1,500,435 b) more than three months and up to one year 1,178,292,346.78 856,292 c) more than one year and up to five years 3,766,210,658.43 3,488,842 d) more than five years 1,571,661,059.15 1,618,355 e) with an indefinite term 196,448,687.83 202,711

30/9/2017 30/9/2016

EUR TEUR

Liabilities owed to credit institutions 11,730,796,316.68 11,406,032 a) Due daily 883,433,723.83 931,417 b) With agreed maturity or notice period 10,847,362,592.85 10,474,615 ba) up to three months 3,713,577,354.92 3,519,763 bb) more than three months and up to one year 2,017,553,068.42 2,104,626 bc) more than one year and up to five years 4,299,736,461.43 4,088,955 bd) more than five years 816,495,708.08 761,271 Liabilities owed to customers 1,297,495,286.83 953,235 a) Due daily 525,900,643.51 502,951 b) With agreed maturity or notice period 771,594,643.32 450,284 ba) up to three months 81,186,273.86 53,087 bb) more than three months and up to one year 214,015,796.11 140,836 bc) more than one year and up to five years 466,900,286.08 252,536 bd) more than five years 9,492,287.27 3,825 Liabilities evidenced by certificates 527,500,000.00 465,700 a) up to three months 440,000,000.00 285,000 b) more than three months and up to one year 87,500,000.00 180,700 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 include sales of of the plan provisions which exceeds the relevant pen- receivables to savings banks and credit institutions sion obligation has been reported as EUR 0.2 million in which have not yet been settled up. Receivables from accordance with § 246 (2) Clause 3 HGB. Expenses and shareholders amount to EUR 3.5 million (previous income are offset. year: EUR 8.2 million). Liabilities owed to credit institutions mainly relate to Of the receivables from customers, EUR 6,301.1 million loans and time deposits and include foreign-currency (previous year: EUR 5,819.1 million) relates to leasing, items in the amount of EUR 1,292.4 million (previous hire-purchase, rental and factoring business. Of the year: EUR 1,388.6 million). In addition, liabilities owed total amount, foreign-currency receivables amount to to shareholders amount to EUR 142.5 million (previous EUR 2,103.8 million (previous year: EUR 2,040.8 million). year: EUR 412.7 million). Of the total amount, EUR 365.8 Receivables from shareholders amount to EUR 0.0 mil- million (previous year: EUR 246.2 million) is secured lion (previous year: EUR 0.5 million). by means of the transfer of title of leasing goods for security purposes. This is associated with the sale of Of the property, plant and equipment, EUR 68.8 million claims resulting from residual values and leasing (previous year: EUR 71.3 million) relates to the main instalments. administrative headquarters of the Deutsche Leasing Group, which it uses for its own purposes, and EUR 26.4 Of the liabilities owed to customers, EUR 1,051.5 million million (previous year: EUR 23.4 million) to fittings, (previous year: EUR 636.5 million) is secured by means tools and equipment. of the transfer of title of leasing goods for security purposes. This is associated with the sale of claims result- The other assets item includes loans to an affiliated ing from leasing instalments. company in the amount of EUR 99.8 million and tax receivables in the amount of EUR 75.5 million. Foreign- Of the other liabilities, liabilities owed to suppliers amount currency amounts total EUR 52.0 million (previous to EUR 211.1 million (previous year: EUR 201.4 million). year: EUR 37.9 million). Provisions for pensions and similar obligations have The accruals and deferrals item includes prepaid been established for employees and former Management premiums for credit and property insurance in the Board members. Of the reinsurance asset item in the amount of EUR 1.9 million (previous year: EUR 1.8 mil- amount of EUR 3.8 million – reported at its fair value in lion) as well as discounts resulting from issuance of accordance with §§ 255 (4) Clause 4 in conjunction with bonds in the amount of EUR 0.1 million (previous year: 298, 300 (2) HGB – TEUR 163 has been offset against the EUR 0.0 million). pension provisions. The difference in accordance with § 253 (6) HGB amounts to EUR 18.6 million. In relation to the surplus resulting from the offsetting of assets, the reinsurance policies are exclusively for The other provisions relate to outstanding payments fulfilment of the obligations resulting from pension for the personnel segment and provisions for old-age provisions and are not available to other creditors. They part-time working and anniversary bonuses and also, have been offset against the underlying obligations in the amount of EUR 14.8 million (previous year: EUR pursuant to § 246 (2) Clause 2 HGB. The fair values of 15.2 million), for leasing business. the plan assets correspond to the cover funds documented by the insurer and thus match the historical The subordinate liabilities relate to Deutsche Factoring costs in the amount of EUR 1.1 million. The fair value Bank GmbH & Co. KG. GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Notes on contingent liabilities

As of the balance sheet date, contingent liabilities amount to EUR 255.6 million (previous year: EUR 258.5 million) and other obligations to EUR 177.2 million (previous year: EUR 212.8 million).

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) Ltd. London Deutsche Leasing Vostok AG Moscow Deutsche Sparkassen Leasing do Brasil S.A. São Paulo Locadora DL do Brasil Ltda. São Paulo

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The parent company provides the following confirma- Notes on the consolidated profit and loss tion within the scope of the letters of comfort: account

With the exception of a political risk scenario, Deutsche Sparkassen Leasing AG & Co. KG hereby undertakes to The disclosures concerning the classification of provide its subsidiary with funding so that it is able to income by geographic market are based on the struc- fulfil its liabilities. ture selected by the parent company for control and reporting purposes. Through a loan guarantee-based commitment in relation to the financing banks, the political risk is Leasing income comprises revenues from leasing regularly also assumed. This is particularly applicable instalments and hire-purchase contracts as well as in relation to the subsidiaries Deutsche Leasing (China) revenues from the resale of leasing goods and was Co., Ltd., Shanghai, Deutsche Leasing Vostok AG, Mos- mainly realised in Germany. cow, and Deutsche Leasing ČR, spol. s r.o., Prague. In principle, Deutsche Sparkassen Leasing AG & Co. KG Leasing expenses comprise expenses resulting from also assumes the political risk for its financing com- the acquisition of hire-purchase assets and the dis- pany Deutsche Leasing Funding B.V., Amsterdam, in posal of leasing goods. relation to the financing banks, within the scope of a guarantee or a letter of comfort. Interest income includes income from affiliated companies in the amount of EUR 1.4 million (previous year: In view of current forecasts, the parent company EUR 0.8 million). Of the interest income, EUR 122.4 considers that the risk of recourse under the letters of million (previous year: EUR 70.4 million) relates to comfort and guarantees is highly improbable. Germany and EUR 22.5 million (previous year: EUR 24.3 million) to other countries. Of the total amount, The liabilities under suretyships and guarantee agree- EUR 61.6 million relates to Deutsche Factoring Bank ments reported under contingent liabilities are mainly GmbH & Co. KG, which was consolidated for the first associated with investment loans granted by Deutsche time on 30 September 2016. Leasing Finance GmbH. In the previous year contingent liabilities in relation to an associated company, in The interest expenses include expenses in accordance connection with the hiving-off of business for financ- with §§ 277 (5) in conjunction with 298, 300 (2) HGB in ing of cars and leisure vehicles, amounted to EUR 22.8 the amount of EUR 10.0 million (previous year: EUR 0.2 million. million). Of the total amount, EUR 2.3 million relates to Deutsche Factoring Bank GmbH & Co. KG, which was The other liabilities include irrevocable loan commit- consolidated for the first time on 30 September 2016. ments to an associated company in the amount of EUR The interest expenses include negative interest expenses 18.2 million. in the amount of EUR 1.0 million.

Of the commission income, EUR 21.4 million is attributable to Germany and EUR 0.4 million to other countries. Of the total amount, EUR 4.5 million relates to Deutsche Factoring Bank GmbH & Co. KG, which was consolidated for the first time on 30 September 2016. GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Of the commission expenses, EUR 4.0 million relates to Taxes on income and profit include tax income not Deutsche Factoring Bank GmbH & Co. KG, which was related to the period in the amount of EUR 0.1 million consolidated for the first time on 30 September 2016. (previous year: EUR 0.6 million). Of the total amount, EUR 4.4 million relates to Deutsche Factoring Bank The other operating income mainly comprises services GmbH & Co. KG, which was consolidated for the first income. This item includes income not related to the time on 30 September 2016. period in the amount of EUR 17.9 million (previous year: EUR 15.3 million). Of the other operating income, EUR 262.1 million is attributable to Germany and EUR 42.2 million to other countries. Of the total amount, Other disclosures currency translation income totals EUR 38.4 million (previous year: EUR 19.3 million). On the balance sheet date, other financial obligations Of the general administrative expenses, EUR 25.6 mil- amounted to EUR 8.0 million under service and lease lion relates to Deutsche Factoring Bank GmbH & Co. agreements for branch offices. These lease agreements KG, which was consolidated for the first time on 30 have a remaining term expiring in 2021 at the latest. September 2016. In the previous year, the spin-off of financing of cars Depreciation of leasing assets includes non-scheduled and leisure vehicles resulted in a liability pursuant to depreciation in the amount of EUR 18.1 million (previ- § 133 (1) of the German Conversion Law (Umwand- ous year: EUR 15.1 million). lungsgesetz, UmwG) to an associated company in the amount of EUR 10 million. The other operating expenses mainly comprise services expenses. This item includes expenses not related to A second-hand car guarantee for a period of twelve the period in the amount of EUR 2.4 million (previous months is provided for motor vehicles sold to end- year: EUR 2.7 million). Currency translation expenses consumers. On the balance-sheet date, this has resulted total EUR 38.3 million (previous year: EUR 18.3 million). in contingent liabilities due to warranties. An insurance policy has been taken out to cover this risk. Of the depreciation and valuation adjustments on receivables and specific securities and allocations to On the balance sheet date, order commitments under provisions for leasing and loan business EUR 5.0 mil- leasing and hire-purchase contracts amount to EUR lion relates to Deutsche Factoring Bank GmbH & Co. 2,450.2 million (previous year: EUR 2,319.6 million). KG, which was consolidated for the first time on 30 September 2016. Derivatives (interest-rate swaps, currency swaps, interest-rate/currency swaps, forward exchange trans- In the previous year, extraordinary income resulted actions) are exclusively entered into for hedging of from the disclosure of hidden reserves in connection interest-rate fluctuation/currency risks. with a contribution and the associated grant of shares within the scope of first-time inclusion in the group of Deutsche Leasing deals with interest rate risks, in consolidated companies. particular, through the use of interest rate swaps. Within the scope of its risk management system, fixed and variable-interest cash flows are combined for the relevant currencies and jointly considered in

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interest-rate gap analyses. This enables a holistic In the past financial year the total fee for the auditor assessment of all of the relevant cash flows resulting amounted to TEUR 3,620 (previous year: TEUR 5,141). from lending business and deposit operations. The This includes auditing services in the amount of overhang of fixed cash flows which give rise to a risk TEUR 1,855 (previous year: TEUR 1,632), other assur- position in case of a change in the interest-rate level is ance services in the amount of TEUR 155 (previous indicated through interest-rate gap analyses which year: TEUR 142), tax advice services in the amount of can be prepared at the level of the individual company TEUR 0 (previous year: TEUR 67) and other services in and also at Group level. This risk position is continu- the amount of TEUR 1,610 (previous year: TEUR 3,300). ously analysed by means of detailed maturity bands and is reduced by means of conventional loans and Cash and cash equivalents in the statement of cash derivatives (macro hedge). Currency risks are reduced flows consist of the cash reserves balance-sheet item. through the use of currency swaps in particular. The change in cash flow from current business activities is determined on the basis of the net income for The effectiveness of the macro hedge (“interest expo- the year; the reconciliation results from the consoli- sure book management”) is measured by comparing dated profit and loss account. the interest-rate gap analysis with and without derivatives. A documented, appropriate and functional On average, the company had 1,234 female and 1,224 risk management system is also used for these trans- male employees in the past financial year. actions.

As of 30 September 2017, the outstanding nominal value of the derivatives amounted to EUR 2,524.2 million. The total derivatives with negative fair values as of the balance-sheet date amount to EUR 22.6 million (determined by means of the mark-to-market method). Due to the effectiveness of the macro hedge (interest exposure book), no provisions are established. The derivatives have a maximum remaining term of 9.0 years. GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

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

Alexander Wüerst Georg Fahrenschon (to November 2017) Chairman President (to November 2017) 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 Hannover, 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 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 (to June 2017) Sparkasse Spree-Neisse, Cottbus Chief Executive Officer Kreissparkasse Herzogtum Lauenburg, Ratzeburg Dr Martin Lüdiger (since July 2017) Chief Executive Officer Roland Burgis Sparkasse Holstein, Bad Oldesloe and Eutin Deputy Chief Executive Officer Sparkasse Nürnberg, Nuremberg Günther Passek Chief Executive Officer Barbara Degenkolb Sparkasse Trier, Trier Team Leader Deutsche Sparkassen Leasing AG & Co. KG, Matthäus Reiser (since October 2017) Bad Homburg v. d. Höhe Chief Executive Officer Kreissparkasse Rottweil, Rottweil

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Robert Restani Rainer Schwab Chief Executive Officer Works Council Chairman Frankfurter Sparkasse, Frankfurt am Main Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe Dr Joachim Schmalzl (since December 2017) Management Board member Burkhard Wittmacher (to September 2017) Deutscher Sparkassen- und Giroverband e.V., Berlin Chief Executive Officer Kreissparkasse Esslingen-Nürtingen, Esslingen

Total remuneration of the members of the Supervisory The Management Board receives EUR 3.3 million Board of the parent company amounted to EUR 0.3 (previous year: EUR 3.3 million) for the performance million (previous year: EUR 0.3 million). Pension provi- of its tasks. sions for the former members of the Management Board amount to EUR 3.1 million (previous year: EUR 3.2 mil- The consolidated financial statements are published lion). EUR 1.0 million was paid out in the form of pen- in the German Federal Gazette (Bundesanzeiger). sions for former members of the Management Board in the current financial year.

The personally liable and managing shareholder of Subsequent events the parent company is Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft, Bad Homburg v. d. Höhe, with subscribed capital amounting to EUR There were no reportable events in the period from 50,000.00. 30 September 2017 up to the preparation of the consolidated financial statements. The Management Board of the managing shareholder of the parent company consists of the following per- Bad Homburg v. d. Höhe, 19 December 2017 sons: Deutsche Sparkassen Leasing AG & Co. KG Kai Ostermann, Chief Executive Officer Friedrich Jüngling represented by its general partner Matthias Laukin Rainer Weis Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft

Ostermann Jüngling Laukin Weis GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Statement of changes in equity

Deutsche Sparkassen Leasing AG & Co. KG Group

Equity of the parent company Non-controlling interests Group equity

Equity shares Reserves Change in Consolidated net Total Non-controlling Profit/loss Total Total equity from income/loss for interests before attributable to Equity shares Total Reserves Other Total currency the year which is change in equity non-controlling according to reserves translation attributable to the from currency interests shareholders’ parent company translation and agreement profit for the year

TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR

As at 30/9/2015 240,000 240,000 331,048 5,169 336,217 14,549 67,432 658,198 11,672 3,538 15,210 673,408

Increase/decrease in equity shares Amounts credited to shareholder accounts for debt capital - 35,000 - 35,000 - 35,000 - 35,000 Amounts contributed to/withdrawn from reserves 45,432 3,034 48,466 - 67,432 - 18,966 2,917 - 3,538 - 621 - 19,587 Currency translation 926 926 926

Other changes

Changes to group of consolidated companies 72,651 72,651 72,651

Consolidated net income/loss for the year 68,771 68,771 3,716 3,716 72,487

As at 30/9/2016 240,000 240,000 341,480 8,203 349,683 15,475 68,771 673,929 87,240 3,716 90,956 764,885

Equity of the parent company Non-controlling interests Group equity

TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR

As at 30/9/2016 240,000 240,000 341,480 8,203 349,683 15,475 68,771 673,929 87,240 3,716 90,956 764,885

Increase/decrease in equity shares Amounts credited to shareholder accounts for debt capital - 35,000 - 35,000 - 35,000 - 2,194 - 2,194 - 37,194 Amounts contributed to/withdrawn from reserves 45,284 16,315 61,599 - 68,771 - 7,172 505 - 1,522 - 1,017 - 8,189 Currency translation -4,789 -4,789 -4,789

Other changes

Changes to group of consolidated companies

Consolidated net income/loss for the year 71,965 71,965 12,026 12,026 83,991

As at 30/9/2017 240,000 240,000 351,764 24,518 376,282 10,686 71,965 698,933 87,745 12,026 99,771 798,704

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Equity of the parent company Non-controlling interests Group equity

TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR

As at 30/9/2015 240,000 240,000 331,048 5,169 336,217 14,549 67,432 658,198 11,672 3,538 15,210 673,408

Other changes

Changes to group of consolidated companies 72,651 72,651 72,651

Consolidated net income/loss for the year 68,771 68,771 3,716 3,716 72,487

As at 30/9/2016 240,000 240,000 341,480 8,203 349,683 15,475 68,771 673,929 87,240 3,716 90,956 764,885

Equity of the parent company Non-controlling interests Group equity

TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR

As at 30/9/2016 240,000 240,000 341,480 8,203 349,683 15,475 68,771 673,929 87,240 3,716 90,956 764,885

Other changes

Changes to group of consolidated companies

Consolidated net income/loss for the year 71,965 71,965 12,026 12,026 83,991

As at 30/9/2017 240,000 240,000 351,764 24,518 376,282 10,686 71,965 698,933 87,745 12,026 99,771 798,704 GROUP INFORMATION GROUP

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CONSOLIDATED FINANCIAL STATEMENTS

Statement of cash flows

Deutsche Sparkassen Leasing AG & Co. KG Group2

2016 / 2017 2015 / 2016 TEUR TEUR 1. Consolidated net income for the year 83.991 72.487 2. + Depreciation on leasing assets 2.489.759 2.607.362 3. - Additions to leasing assets - 3.512.015 - 3.932.145 4. + Residual carrying amounts from disposal of leasing assets 781.241 936.178 5. + Increase in accrued leasing instalments 2.990 5.041 6. Depreciation on and changes to leasing assets - 238.025 - 383.564 7. - Increase in hire-purchase receivables - 421.090 - 296.598 8. +/- Decrease/increase in receivables from credit institutions 221.339 - 138.152 9. - Increase in receivables from customers (excl. hire-purchase) - 184.617 - 1.230.991 10. -/+ Increase/decrease in other assets - 16.595 23.989 11. + Amortisation of intangible assets and depreciation of property, plant and equipment 22.286 13.035 12. + Interest payments received 144.871 94.724 13. Changes in hire-purchase and other assets - 233.806 - 1.533.993 14. + Increase in liabilities owed to credit institutions 324.764 1.645.242 15. + Increase in liabilities owed to customers 344.260 349.373 16. + Increase in liabilities evidenced by certificates 61.800 83.200 17. - Decrease in deferred income from sales of receivables - 119.733 - 66.139 18. + Interest expenses less income 4.868 68.205 19. - Interest paid - 149.739 - 162.929 20. Changes in refinancing leasing and hire-purchase 466.220 1.916.952 21. +/- Increase/decrease in provisions 6.400 - 7.149 22. + Increase in other liabilities and other items 1.254 85.808 23. - Income less expenses from extraordinary items 0 - 13.918 24. + Income tax expenses less income 23.369 19.988 25. - Income tax payments - 18.981 - 45.649 26. Change in other liabilities and other items 12.042 39.080 27. Cash inflow from current business activities 90.422 110.962 28. + Cash inflow from the sale of intangible assets 2.678 444 29. - Payments for acquisition of intangible assets - 13.200 - 71.994 30. + Cash inflow from the sale of property, plant and equipment 307 962 31. - Payments for acquisition of property, plant and equipment - 43.028 - 5.372 32. Cash outflow from investing activities - 53.243 - 75.960 33. - Cash outflow to the parent company’s shareholders - 35.000 - 35.000 34. - Cash outflow to other shareholders - 2.194 – 35. Cash outflow from financing activities - 37.194 - 35.000

Changes in cash and cash equivalents items nos. (27) + (32) + (35) - 15 2 Cash and cash equivalents at the beginning of the period 51 49 Cash and cash equivalents at the end of the period 36 51

2 The structure of the statement of cash flows was further adjusted in accordance with the specific characteristics of the leasing sector. The prior-year amounts were revised accordingly.

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Group information

97 Auditor’s report

98 Shareholders

99 Supervisory Board

101 Management Board

101 Senior Management

104 Corporate Structure

106 Addresses GROUP INFORMATION GROUP

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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 2017 and the related summarised management report:

We have audited the consolidated financial statements of entities to be included in consolidation, the account- prepared by the Deutsche Sparkassen Leasing AG & Co. ing and consolidation principles used and significant KG, Bad Homburg v. d. Höhe, comprising the balance estimates 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 2016 to 30 September 2017. 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 consolidated financial statements comply with the legal express 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 We conducted our audit of the consolidated financial accordance with these requirements. The group man- statements in accordance with § 317 HGB [Handels- agement report is consistent with the consolidated gesetzbuch „German Commercial Code“] and German financial statements and as a whole provides a suita- generally accepted standards for the audit of financial ble view of the Group’s position and suitably presents statements promulgated by the Institut der Wirtschaft- the opportunities 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 Frankfurt am Main, 20 December 2017 presentation of the net assets, financial position and results of operations in the consolidated financial KPMG AG statements in accordance with German principles of Wirtschaftsprüfungsgesellschaft proper accounting and in the group management report 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 Bauer Müller determination of audit procedures. The effectiveness Wirtschaftsprüfer Wirtschaftsprüfer of the accounting-related internal control system and (German Public Auditor) (German Public Auditor) the evidence supporting the disclosures in the consolidated financial statements and the group management 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

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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 2018 As of: February

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Supervisory Board Deutsche Sparkassen Leasing Verwaltungs-Aktiengesellschaft

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

Frank Brockmann, Deputy Chairman Deputy Board Spokesman, Hamburger Sparkasse AG, Hamburg

Helmut Schleweis President, Deutscher Sparkassen- und Giroverband e.V., Berlin

Supervisory Board Deutsche Leasing AG

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

Frank Brockmann, Deputy Chairman Deputy Board Spokesman, Hamburger Sparkasse AG, Hamburg

Helmut Schleweis President, Deutscher Sparkassen- und Giroverband e.V., Berlin As of: February 2018 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 Chief Executive Officer, Sparkasse Duisburg, Duisburg

Frank Brockmann Deputy Board Spokesman, Hamburger Sparkasse AG, Hamburg

Roland Burgis Deputy Chief Executive Officer, Sparkasse Nürnberg, Nuremberg

Barbara Degenkolb Team Leader, Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe Michael Fröhlich Chief Executive Officer, Sparkasse Bielefeld, Bielefeld (to 31.12.2017 Deputy Chief Executive Officer) 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, Karlsruhe

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

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

Dr. Martin Lüdiger Chief Executive Officer, Sparkasse Holstein, Bad Oldesloe and Eutin

Günther Passek Chief Executive Officer, Sparkasse Trier, Trier

Matthäus Reiser Chief Executive Officer, Kreissparkasse Rottweil, Rottweil

Robert Restani Chief Executive Officer, Frankfurter Sparkasse, Frankfurt am Main

Helmut Schleweis President, Deutscher Sparkassen- und Giroverband e.V., Berlin

Rainer Schwab Works Council Chairman, Deutsche Sparkassen Leasing AG & Co. KG, Bad Homburg v. d. Höhe As of: February 2018 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 Tobias Bergmann Balance Sheet & Management

Nicolaus Newiger Organisation/Services Klaus-Günther Rasch Intensive Care & Asset Management

Axel Brinkmann Group Audit

Michael Orth Middle Office Small Ticket Directors of Business Units/Market Units Business Ulrich Kühler Middle Office Individual Business

Harald J. Frings Fleet Thomas Remmel Organisation/Information Technology Georg Hansjürgens, Norbert International Schmidt, Thomas Stahl Otto Schmitz Organisation/Information Technology International Dieter Behrens, Frank Speckmann Savings Banks and SMEs Andreas Kaffka Human Resources

Michael Felde Legal Department

Maik Mittelberg Domestic Risk Management

Bernd Schröck International Risk Management

Helmut Meier-Tanski Treasury

Ansgar Wagner Corporate Development

Birgit Probst Central Risk Management As of: February 2018 As of: February

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GROUP INFORMATION

Managing Directors, Subsidiaries/Investments 3 Germany

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

Harald J. Frings Deutsche Leasing Fleet GmbH

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

Volker Bohn, Bo Liedtke 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

Fedor Krüger, Uwe Müller Deutsche Factoring Bank GmbH & Co. KG

3 As of: February 2018 As of: February selected investments

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Managing Directors Subsidiaries/Investments 3 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, Olive Xu Deutsche Leasing (China) Co., Ltd.

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

Eric Alessandrin, Georg Hansjürgens, Frederic Millet 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 Hungaria Kft. Deutsche Leasing Hungaria Penzügyi 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

Roberto Quarantelli Deutsche Leasing Italia S.p.A. Deutsche Leasing Operativo S.r.l. Krzysztof Brzezin´ski, Uta Reichel Deutsche Leasing Polska S.A.

Georg Hansjürgens, Laurentiu-Mihai Zaharia, Deutsche Leasing Romania IFN S.A. Cristina-Maria Muresean-Foti, Sorin-Emil Valeanu 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) Ltd.

Fabien Léon Leduc, Rainer Völker Deutsche Leasing USA Inc.

Jonas Roever 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 2018 As of: February

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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 4 100 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 GmbH4 Deutsche Leasing Benelux N.V. 100 percent Deutsche Leasing Nederland B. V. 100 percent Deutsche Leasing Fleet GmbH 4 100 percent (Antwerp) (Amsterdam) Deutsche Leasing 100 percent 4 Information Technology GmbH Deutsche Leasing Bulgaria EAD 100 percent Deutsche Leasing Polska S.A. 100 percent Deutsche Leasing International GmbH 4 100 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)

4 As of: February 2018 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 4 100 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)

4 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 4 100 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 4 100 percent

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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 Telephone +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 2018 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 2018 As of: February

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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 / Ani_Ka, p. 2: Christoph Papsch Photographie, p. 12: © Taunus Sparkasse, p. 17: STAHLKONTOR GmbH & Co. KG, p. 21: © CGM SE, p. 25: Bystronic, p. 28: Jandt Kranvermietung GmbH, p. 33: © FIEGE Logistik Stiftung & Co. KG Print Druck- und Verlagshaus Zarbock GmbH & Co. KG

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Notice: This document is a translation of a duly approved German-language document and is provided for informational purpose only. In the event of any dis- crepancy 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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