Release Date: August 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Double-digit growth in top line and gross profit, with significant outperformance on the earnings side.
- Real estate and mortgage business saw a 32% growth, driven by recovery in the German mortgage market and market share gains.
- Software as a Service offering in the financing segment is growing fast, with heavy investments showing positive client-side impact.
- Europace platform saw a 22% increase in total transactions, outperforming market levels.
- Occupational insurance business is on a clear growth path, showing strong profitability compared to competitors.
Negative Points
- Property valuation business is struggling due to regulatory changes and market environment, impacting client trust and revenue.
- Financing platform segment is still in a crisis environment, particularly in the social housing sector due to unattractive investment conditions.
- Personal loan business is facing a shrinking market due to high interest rates and regulatory changes, affecting transaction volumes and revenue.
- Insurance segment is still struggling with migration to new solutions, impacting overall growth and profitability.
- Government delays and budget freezes have slowed down corporate finance projects, affecting the first half performance.
Q & A Highlights
Q: Can you elaborate on the key drivers behind the double-digit growth in the real estate and mortgage business?
A: Ronald Slabke, CEO: The core growth driver is the real estate and mortgage business, which saw a 32% growth. This is due to a recovery in the German mortgage market and market share gains across all segments over the last 12 months.
Q: What challenges are you facing in the property valuation segment?
A: Ronald Slabke, CEO: The property valuation segment is struggling due to regulatory changes and market environment adjustments over the last two years. We are working on regaining client trust and adapting to these changes.
Q: How is the Software as a Service (SaaS) offering performing in the financing segment?
A: Ronald Slabke, CEO: Our SaaS offering for housing associations is growing fast. We have made heavy investments in this area, and we are seeing significant client uptake.
Q: What is the current state of the renting market in Germany?
A: Ronald Slabke, CEO: The renting market is extremely distressed due to massive regulation over the last 10 years. This has led to a frozen market with very low availability of rental units, pushing more people towards homeownership.
Q: Can you provide an update on the Europace platform's performance?
A: Ronald Slabke, CEO: Europace saw a 22% increase compared to last year, outperforming the market. However, growth was suppressed due to a large German bank struggling with its mortgage operations, which impacted our volumes.
Q: How is the corporate finance segment performing, especially in terms of subsidies and financing?
A: Ronald Slabke, CEO: The corporate finance segment saw an increase in active projects, but execution has been slow due to government budget freezes and restrictions. We expect a positive dynamic in the second half of the year.
Q: What are the future projections for the real estate and mortgage market?
A: Ronald Slabke, CEO: We expect the market to continue its positive development. The closed renting market and the need for homeownership, along with energy efficiency investments, will drive growth. We anticipate returning to normal market levels and achieving double-digit growth in the coming years.
Q: How is the insurance segment performing, particularly in the private and industrial insurance areas?
A: Ronald Slabke, CEO: The private insurance area is migrating to a Software as a Service model, showing a 40% increase. The industrial insurance platform, Corify, is gaining traction and is expected to be a significant growth driver in the coming years.
Q: What are the expectations for the second half of the year?
A: Ronald Slabke, CEO: We expect positive development in all segments, with the strongest growth in the real estate and mortgage platform. Revenue and EBIT are expected to be up, and we are sticking to our guidance of EUR400 million in revenue and EUR10 million to EUR20 million in EBIT for the year.
Q: How is Hypoport preparing for future market volatility?
A: Ronald Slabke, CEO: We are focusing on higher profitability levels to better withstand future market volatility. This will allow us to focus on opportunities during crises and be prepared for any future downturns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
