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Jan Pahl: Gentlemen, my name is Jan Pahl, and welcome to the Hypoport SE Q&A results Q1 to Q3 2025. I'm here together with this lovely gentlemen, Ronald Slabke, our CEO, here. And together, we would like to organize this Q&A session.
Jan Pahl: [Operator Instructions] And we are very happy to wait until the first question on our Q3 results [indiscernible]. And in the meantime, we have decided to start with a question, which I got just a few minutes ago via e-mail. So maybe this is a good -- even it's a little bit complicated one, it's a good idea to start with. It is regarding our JV. So at least the question to Mr. Slabke is, could you please explain if Europace has maybe lost market share because of Deutsche Bank issues. So the German mortgage market volume seems to increase more than the Europace volume this year. If Deutsche Bank is priced themselves out of the market while the German mortgage market volume continues to increase, who is taking over these Deutsche Bank market shares at least. So -- and I'm sorry, I forget to start the record. Should I summarize it again. Okay, sorry for that. Now we are live on now record has started. We are already live. So once again, our first question here on our Q&A result is if maybe Europace has lost market share because of Deutsche Bank because it looks like the German mortgage market is increasing a little bit faster than the Europace volume, and this is because Deutsche Bank is pricing them out of the market, out of the Europace market. Who is taking over these shares from Deutsche Bank?
Ronald Slabke: Okay. A good question. Let's start with this that -- in general, we see a healthy market environment right now. So the recovery of the German mortgage market from the crisis in 2022, second half of the year and 2023 is over and the market is, let's say, coming back. So the speed of this recovery looks slightly different in different areas of the market when you think about what the mortgage is used for, regional differences between metropolis and rural areas, but as well the different market participants perform slightly different in this market. So what we see from the reporting and as well from our numbers and activities, regional banks are pretty successful right now, especially in a year-on-year comparison because they had a weak start in 2024 still. And so they come from a lower base level when you look on the 9-month numbers. So cooperative banks and savings banks are taking market share right now. In a certain level, it may be even -- or in a small level, it may be linked to the rollout of Europace in both of their groups and the rollout of a lot of features that we provided to them, which improves their competitiveness, their efficiency in the market and as well the conversion rates of their advisers there. So they're performing well. And as you saw already in our results, we're performing well with them as well. So a next group where there are no clear statistics, but where we see that on a, let's say, daily basis that they operate well in the current market environment are mortgage brokers. A group which heavily is using Europace is depending on Europace. And with only one large German mortgage broker outside of Europace, Interhyp Group as another market participant in this area. For consumers, the interest rate is very important again right now because it has risen from a much lower level in the last 10 years. And on a higher interest rate level, comparing interest rates is something very German and very efficient and creates a huge benefit for the consumer who is comparing. And brokers, thanks to Europace or in case of Interhyp, thanks to their own system are comparing hundreds of banks and offers with them and enabling consumers a great deal at the end. And so let's say, compared to bank branches, they are usually independent structures. So freelancers working on -- for their own profit, their own benefit. They are much more agile and aggressive and using Europace better in interacting with the clients than the typical bank branch in Germany right now, which is not using Europace. So this [indiscernible] takes market share, and they are all supporting that Europace is growing. And in none of these 3 sectors, we lost a single relevant participant of the market. We just gained structures all the time. So what is certain, and this is the analysis of the one who made the questions right, the private banking sector lost market share in this environment in the last, you can say, 2 years. And this is -- Deutsche Bank plays a role there. They have a strategic goal to reduce their mortgage exposure and reduce their new mortgage volume because of their return on investment requirements. So equity is expensive for Deutsche Bank. It wants it wants to optimize its return on equity and this leads to a lower new mortgage volume and the decline in balance sheet for them in this business. So Yes, all Deutsche Bank business goes for Europace. So we see the lower numbers as well, less contribution to our overall numbers. And if you want to just look on the volume, you can say we lost thanks to Deutsche Bank a certain volume in the market. We don't treat this as a market share loss. We know that Deutsche Bank will come back and that the volume in the other markets is something where we are super successful in getting forward in all other banking groups. So longer answer to this simple question.
Jan Pahl: Fair enough. Great because I think it's important. So I appreciate the detail. I got -- received a couple of questions. Let's for a moment, stay with real estate and mortgage platforms segment. There's a special, but maybe it fits because you mentioned the saving bank Sparkassen. So the question is, could you please tell us a little bit more about Project [indiscernible], which is with the Sparkassen banks? And how is that impacting FINMAS' market share with internal loan applications? Should we think about Finanz Informatik core banking software as a competitor to FINMAS? Or is it a partner? And maybe you can explain a little bit [indiscernible] because it's an acronym and maybe not everyone is aware of. So as a kickoff, maybe to start there.
Ronald Slabke: Yes. As well, a good question. So we, for 10 years now cooperate with the savings bank sector. And for the last 5 years, our cooperating partner is Finanz Informatik, which is the central IT service provider for the savings bank industry. [indiscernible] a project started roughly 2 years ago is or decided to be started roughly 2 years ago, better say, and we are working on this now for 2 years is a project where we integrate the property as an asset in the mobile app environment of Finanz Informatik so that every of the 30 million users of savings banks in Germany, not just see the balance sheet of the current account and the savings products, but as well the worth of his properties and the mortgage loan linked to this. Every day when he opens the app, he's going to see this, thanks to [indiscernible]. And behind this, the consumer gets different services around the property and the mortgage provided in the app, things like renewing the mortgage are possible or if the mortgage comes from a third party, refinancing this mortgage with a savings bank mortgage. And this is in a rollout process right now. This [indiscernible] project slightly delayed, should be available -- or let's say, it's in the process with some -- a focus group already, but the full rollout should happen now in the first half of next year. So this puts Europace and the FINMAS features and actually as well the Value AG proposition and the automated value model of Value AG in a center position in the savings banks industry, which is a great progress. In addition, we work together with Finanz Informatik right now in -- on the deep integration of the Europace offers and comparisons and product presentation in the Finanz Informatik system. So should we think of Finanz Informatik as a competitor or a partner, by sure, partner. So we integrate both systems with each other more and more. We replace features out of the or we add features, we enhance the user experience of the internal system of Finanz Informatik with Europace features step by step and with this bring more volume to the Europace marketplace. So this is -- it's a strong partnership, which is driven by making savings banks more competitive and enhancing the user experience if a user is using -- is using saving bank as a mortgage adviser. And this is very successful for all 3 involved parties for now.
Jan Pahl: Great. Thanks. So for now, let's stay with real estate and mortgage platforms. A short one is what EBIT we expect for this year, next year and medium term, I think it's 3 to 5 years roughly for value. So Value AG appraisal service.
Ronald Slabke: Yes. Okay. So Value AG is an heavy investment from our side in valuation as a major part of the mortgage process. And to fully automate this and integrate this with the mortgage process, it was necessary to innovate it by ourselves. And this is a long journey for us by now and linked with huge investments, relevant losses that we had in the last years because of this. So on the loss side, we reduced again this year the investments that we have there and expect for next year that during the year, we will turn profitable. So first half of the year, still some losses, second half of the year, a positive contribution from the side. Why we expect this? We see a very positive traction in the adoption of digital products of Value AG. I mentioned, as an example, cooperative banking sector where we just rolled out an integration solution. We just explained here in the Q&A, [indiscernible] and the role of as well Value AG there in value adding the properties of the consumers in a digital way. So we are progressing in all sectors with this, and this gives us a clear path to profitability already. Plus we see that the efficiency of the whole structure and Value AG, thanks to a stable market environment now is turning profitable. And we see that we can get a fair pricing from our partners, thanks to the integrated solution that we are offering. So this -- the automation that we bring to the value market is -- valuation market is huge. So looking forward, it will never be a high-margin business valuation, let's say never -- not in the next 5 years, this is the horizon, but it's something which together with our offering in our UPS offering as an automated process for advice and transacting mortgages is a win-win situation for both products. So that midterm, we expect the growth from -- on both sides, thanks to the integration, and we expect double-digit growth from Value AG for the upcoming years after turning profitable.
Jan Pahl: Great. Thanks. So the next 2 questions are related to Europace and a little bit more detailed. So it seems investors are pretty good informed about. Our start of Europace One, which we started in Q2, could you please tell us how it is developing so far?
Ronald Slabke: Yes. So first, what is Europace One? Europace was a free-to-use SaaS solution for now for advisers. We only deal with sales organizations, which then provided this to their intermediaries. And as well for the sales organization, if they were willing to underwrite a certain level of volume, it was free of charge. But we saw that with the heavy investments we do in enhancing the user experience, integrating AI features, we need a different value stream to get a fair share out of the business which we enable and the efficiency and the conversation gains that we create with our investments. So we decided to bundle new features, which we introduced during the first half of this year to a Europace One offering where as an adviser, you book this as an additional monthly subscription offering from us to enhance your experience. You compare this with the freemium model, which is pretty popular in the mobile world, where the general use of an application of an app is for free. But if you want to use special features, you need to sign up and pay extra. So we have to establish for this a way to charge advisers. We have to establish a legal framework for this and we have to -- let's say, we had to build the features and we have to integrate the features in the bundle. So there was a lot of work that had to be done in the first half of this year. And since this summer, we offer to advisers directly, and we have a 3-digit number of advisers that signed up by now. We are still in talk with a lot of large organizations, which doesn't allow their senior advisers to make this choice. So -- and that's often about integration with their systems. We are partially replacing as well third-party solutions with the features that are part of the bundle. So these are slightly longer projects to agree on the usage of Europace OneE. But let's say, with all major partners, we are well on track on getting them signed up as well. So for next year, it will be interesting how the dynamic looks like. In the upcoming years, it will contribute with a 7-digit number to our revenue and profit. But for now, the signing up speed still needs to be improved from our side. But there is a learning path for us because we are pretty new to this way of doing business with individuals.
Jan Pahl: Right. So the next question is regarding one click. So it's also once again, Europace, but Europace OneClick. The question is, is there a regulatory hurdle here? And if so, how we plan to overcome it?
Ronald Slabke: Yes. So -- only good questions by now, I would say. So one thing is the offering on the credit decision side and to the lenders of mortgages, where we enable them to have a fully automated mortgage underwriting process. We introduced this in the beginning of 2022 when speed was still very important for consumers. Thanks to the massive changes in the market, the attractiveness of the product was recently less high, you can say. But with the recovery of the market now, the whole offering gets more attractive again as well for the banks, not just to speed up the process, but as well to save on the cost of labor and to provide the consumer a digital checkout process equal to this what he knows in other industries. So we have a number of banks which are productive with it and created the regulatory framework necessary to operate with OneClick under German regulation. But it's a hurdle to take, to be clear, it's a hurdle. We provid it as an entry level to this product, a solution where you can automatically score a consumer without a manual input of data just by using access to the account of the consumer to gather the data. We call this entry, Europace entry as an entry product to OneClick. So the process on the side of the property is not automated, but the process of the side of the checking the consumer credit worthiness is fully automated. And there the sign-up is significantly higher. So there's a double digit of banks experimenting with entry and using this already and allowing this and something which we as well heavily promote on the platform because it reduces the work for the adviser, streamlines the process and creates a value proposition for everyone. So the transition is ongoing, and we are constantly optimizing the approach to the market to digitalize this mortgage process even in smaller steps if necessary. And this is as well, we are talking about high single-digit percentage of the mortgage volume already generated via entry or OneClick, but there is still a huge potential going forward, as you can imagine.
Jan Pahl: Great. Thanks. It seems there are right now, no more questions on real estate and mortgage platforms, but we received a couple of other questions to the other segments. So we switch now to financing platform. And here's a question, same like for Value AG. So which EBIT we expect for this year, '26 and for the midterm 3 to 5 years?
Ronald Slabke: Yes. Okay. Let's say, this year, at the end of Q3 and so at the beginning or before the final quarter, which is very relevant for the success of this segment, it's, let's say, difficult to give an exact prognosis. So last quarter is seasonally typically the strongest one. So if it's this year as well, then we will be above last year. So as we are on the 9 months right now, but it's going to be decided just in the days around Christmas as every year. Going forward, as I said when I introduced this segment in the first video, we see that there's a huge potential in all 3 parts of this segment. So housing associations, we are on a great track of signing up housing associations to our ERP system linked to all the services around a strong proposition in the mortgage market there. So this under distressed market has a huge potential to grow significant. And part of this recovery would just be to the precrisis level when it comes to especially revenues from mortgage brokerage. But overall, we are on track for a great success in this industry. Personal loan business and German Mittelstand, both distressed right now. I explained this already. I would say, looking forward, these are both markets where we expect a normalization. Germany can't stay in a recessive environment much longer than it did already. Otherwise, we will have disruptive political changes here and nobody wants this. So my sense of urgency right now is high, and I have the feeling that [indiscernible] our government got the message after the summer as well. So they see that they need to act to change the trajectory in the market. And with this, we will see a very strong performance of both of these product segments in the upcoming years. So where it can end up, it's linked to the recovery of the German economy in general, you could say, the better it goes, the more success we can deliver there.
Jan Pahl: Right. So there are no more questions for financing platforms right now, but there are 2 or 1 or 2 for insurance. So a little bit more on a high level. If you compare SMART INSUR with Europace, what is the penetration of suppliers so far, maybe in percent of the market that provides their policies through our platform through SMID and where are the challenges and progress to grow that platform? And what is surprising? It's the same like Europace, the 11 basis points we charge in average? Or how does it look like?
Ronald Slabke: Okay. This is -- I make a short and I would say, deep dive with Jan later or in the upcoming days. So in general, SMART INSUR is the platform for standardized policies usually for consumers here in Germany. And the core value proposition is managing the whole information flow along the existence of an insurance contract that being the insurance broker on one side, the distribution side and the insurance company on the other side. It's not a transaction focused platform. It's whole lifetime of an insurance because this is a core problem in the insurance market that the information flow over the lifetime is very expensive for all parties because of their dysfunctionality and the way how information are transacted via e-mail from one side to the other. So the pricing model is volume-based. So the more volume you manage as a distribution within the platform, the more you pay. So it's a percentage of the premium the consumer pays, and this is your fee for the handling of the whole information flow, as I said, from the beginning of the contract to the end of lifetime of every contract there. So the challenge is the necessary adjustments of -- for the IT system on the distribution side. On the insurer side, for the insurance companies, we have established business relation with all of them. But for now, just some of them are paying if they receive the information and are integrated via interfaces. So this is the -- we report this as the validation process. So when there is a link between the information in the platform and the insurance company, then there is a financial link for us. But still, most of the volume in the platform is not linked to the insurance company. So the insurance company is not paying. Even when you are able to manage this kind of insurances as well as the distribution as a distributor within our system. More details, I would say, Jan in the deep dive.
Jan Pahl: Sure. The next question, I'm not sure if I got it right, but I mixed it a little bit up. And if I'm wrong, don't hesitate to circle back and correct me. But I get this question right, it is during Q2 or maybe Q3, we signed some brokers for Corify, and it took longer than planned or expected. What were the headwinds? And are we in talk with additional brokers to launch right now?
Ronald Slabke: Okay. Yes. So Corify is our platform offering for the industrial insurance business, where not a defined tariff and policy is underwritten by thousands of consumers. But in industry insures effectively or a fleet of class or whatever. So there are only individualized auctioned or tendered insurance policies closed between corporates and insurance companies. So we introduced this marketplace so the better version in the beginning of last year and see a huge interest in the industry. Industry was part of the development process over the last years and is now steadily signing up, and we got additional signatures for the first modules of this marketplace from the industry. There is a long line of -- in the sales funnel of brokers and insurance companies, which wants to use this for their interaction with their clients. So the pipeline is well filled looking forward. We just need to see that the contribution is not just intellectually and let's say, mutual, it needs to be as well financially beneficial for us so that our part of the investment incrementally goes down and the monetization kicks in and our partners after signing up as well are paying the transaction fees linked or usage fees linked. And when we talk about signatures, then we talk about this last step, the monetization that partners start paying for the benefits which they have using the system. And yes, we saw the progress now finally as well in Q3. And looking forward, we are optimistic that we get Corify up and flying and creating a marketplace effect in the upcoming years as well in this part of the industry.
Jan Pahl: Great. We have 3 more questions in line. So once again, if you have any questions, feel free to type it in. The next one is on insurance platform as well, now on private insurance once again. So the question is, how does your distribution, distribute of insurance policy work together, compete with price comparison websites. So is this a competitor? Or is it a coop for us? How we look like?
Ronald Slabke: Okay. These are different positions in the value chain. So the typical price comparison side for insurance is a perfect client for Smart InsurTech to handle completely -- the complete back-end process over the whole lifetime of the insurance contract for the comparison side. So we -- here on the distribution, you have the insurer app. So pure online insurance brokers use Smart InsurTech as their back end. And we are a great opportunity for them to focus on the consumer front-end side and the competition there and not spend IT resources in integrating 200-plus insurance companies and the lifetime of the variety of insurance contracts in their system.
Jan Pahl: Great. Okay. There are 2 more questions, one a little bit detailed and the next one a little bit high level on strategic. Let's start with the detailed one, and now it is real estate and mortgage platforms again. We are here with BAUFINEX. So the question is, how has growth for the number of BAUFINEX Genoberater consultants trended so far this year? Are you having success signing up more salespeople at the cooperative banks?
Ronald Slabke: Yes. Sorry -- let's say, we are active in the cooperative banking sector with 2 brands. So Genopace as a platform. BAUFINEX is a joint venture with Bausparkasse Schwäbisch Hall for the pooling activities and for the third-party distribution in this market. So the question was specific to BAUFINEX. BAUFINEX is very successful using the huge network of cooperative banks across Germany and digitalizing their external relations to local mortgage brokers, real estate developers and so on to provide cooperative mortgages, you can say, to this third-party distribution. And BAUFINEX, I would say, is right now the largest mortgage pooling offering in the market. So they surpassed Starpool and as well the competitor from Interhyp Group Prohyp and are #1 right now. So they are succeeding very well. So together with the success of the cooperative banking sector, BAUFINEX is very successful on digitalizing their third-party relations.
Jan Pahl: Great. So one question left. And as a reminder, once again, don't be shy. If you have any, you can type it in. But the next one is a little bit high level on strategic and maybe on our -- also historical shift in our strategic. So could you explain the main synergies and potential scale in the interplay of our segments, real estate and mortgage platforms, financing platforms and insurance platforms? Or would you say that these are unconnected segments that have their special B2B platform for the customers?
Ronald Slabke: Okay. I would say the second part answered already something, but I would give you, let's say, a better perspective on this. So up until 2 years ago, we developed the Hypoport network, a group of companies and offering in all these 3 industries independent and created synergies usually between 2 or 3 of these companies in the group. We restructured to these 3 segments, the network 2 years ago. So we formed the real estate and mortgage platform just 2 years ago after seeing where are the strongest connections, where are the highest synergies between daughter companies, which needs to be more facilitated and with more management attention and focus on to develop a joint strategy in this market. And with this the segments were created. In certain areas, we had to even split companies. For instance, the personal loan business, which is now part of the financing platform was until recently part of the Europace AG development where as well the mortgage solution was developed, and we have a significant overlap in partner structures there. So even when they are now in different segments and we -- from the legal entities, split them, they are using the same technologies and offering to the same partner. So there are interlinks between the segments, even when this is not, let's say, naturally when you would start the segments independent. So we created synergies in the past between offerings and just because we regrouped this and focus now on these areas of synergies where we see the highest benefit for the network doesn't mean that there are not other synergies. So between each of these 3 segments, there stays certain levels of synergies alive, but the focus happens within the segment. So the truth is they are less integrated between each other than within each of them, but they are not -- it's not that there are no synergies between them.
Jan Pahl: Great. Thanks for this. And here's another one.
Ronald Slabke: Great English Q&A today, I would say. It is good that we have a full hour.
Jan Pahl: Yes. So the next question is why did the error in revenue recognition [indiscernible] happen because of -- so it is regarding Starpool last year, which you had to adjust the numbers. And yes, how it is going to be look like forward?
Ronald Slabke: Yes. Okay, I would say a detailed answer in the 2024 annual report. Quick answer. The structure of the business of Starpool changed over the last year because of the strategic change on our joint venture partner, Deutsche Bank. And because of this, third-party mortgages got more important. And with this, we had to recognize all revenues generated by Starpool, including the commissions which Starpool receives from Deutsche Bank and pass through to Deutsche Bank linked mortgage brokers. So this pass-through of Deutsche Bank commission business let's say was not under our control under -- in the last years, let's say, or during the buildup of the joint venture, but lately because of the shift in the priorities and the shift to mortgage brokerage of other lenders, the situation changed, and we had to start to recognize this pass-through commissions as group revenue and group cost of revenue so that it inflated first in 2024, our revenue number and our cost of revenue number, just starting at the gross profit, it didn't have an impact anymore.
Jan Pahl: Great. The next one, it's an interesting question because it seems to me that there are 2 ways to answer. So I look forward, which is your one. So the question is, where do you see cost reduction potential for the application of AI? And what would your best estimate for the amount?
Ronald Slabke: Yes. So AI is a big topic publicly right now and for us in the last 10 years, where we are able to enhance our products using AI. So the question focuses on cost reduction. And when I hear cost reduction in an organization like us, it's about efficiency gains in, let's say, repetitive processes where we look across the group, especially in the centers where we have processes where we expect that AI can replace them already right now. This is linked to migration costs, to systems which provides this because in this area of HR or accounting for ourselves, we will not implement our own algorithms. Another way of cost reduction, I would say more efficiency gain is using AI in the whole software development process. This is an ongoing process now for the last 2, 3 years where our people get more efficient using AI. To be honest, I don't expect that we reduce our costs for software development. What I expect is that we increase the output in volume, in future volume and in quality. We are willing to invest this money. And we focus our people right now in getting better in using AI and getting better in shipping software fast to our platforms. So there is not a focus on cost reduction in this area, it's the focus on efficiency.
Jan Pahl: Great. And actually, these are the 2 answers I expect. So at the moment, there's no more -- it looks like there are no more questions. But once again, here's a chance, we've received already couple of, actually 13, which is good, I think, 45 minutes. And if there are no more questions, maybe I hand over to you, Ronald, for last wording.
Ronald Slabke: Yes. Thank you. Great Q&A today. We will talk again in March next year. We will chase our 2021 record year, and we'll want to outperform in all top and bottom line numbers next year. So I'm looking forward to this race, and you get an update when we are there in March next year. Thank you.
Jan Pahl: Thanks. Goodbye.