flatexDEGIRO AG

Hello, and welcome to the FlatX DeGiro Analyst Call for H1 2025 results. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on the telephone keypad. Now, I will hand over the conference over to the speakers, Oliver Behrends, CEO, Dr. Benon Janos, CFO, and Achim Schreck, head of IR. Achim, please go ahead.

Thank you and good morning, everyone. Many thanks for dialing in and welcome to our analyst call relating to our Q2 results, which we published yesterday evening post-market close. My name is Achim Schreck and I'm heading the investor relations team here at FlatX DeGiro. And with me, I have today our CEO, Oliver Behrens, as well as our CFO, Dr. Benun Janos, who will lead us through the presentation today. We also have in the room with us today, Christiane Strubel, our chief HR officer, Dr. Thomas Lindner, our global head of finance, as well as my IR colleague, Laura Hecker. As usual, we would like to provide a short run through the presentation before we open up for your questions. And without any further ado, I'm very pleased to hand over now to Oliver. Please go ahead. The floor is yours.

Thank you, Achim. Good morning, everyone, and welcome to our analyst call for our preliminary Q2 and H1 results. Benon will run you through the details of our performance in the second quarter in a moment. I would just like to highlight a few key points. We are obviously well on track. We have achieved a record half year, both in regard to our top line as well as our bottom line. And while external factors have helped this development, namely the higher market volatility, you also have to be able as a platform and as a team to capture these opportunities, which I believe we have done very well. particularly during the turbulent days of April. I would therefore also like to take the opportunity to thank all colleagues within FlatX to Giro who have contributed greatly to this strong performance. The strong first half also allowed us to raise our full year guidance significantly. aiming for more than half billion euros of revenues and a 15 to 25% increase in net income. Despite some headwind from the overall interest rate environment and despite the fact that the strategic growth initiatives are currently implemented, we have not yet had a measurable impact over the past six months yet. We have also seen a number of important changes to the management team and the supervisory board of FlatEx DeGiro. I will elaborate on this shortly. Also on our current status when it comes to crypto and securities lending. But let me start with two high-level observations when it comes to our operating performance. On the trading side, volatility has been a substantial driver of growth. It spiked at the beginning of the second quarter, reaching levels that were only surpassed at the beginning of COVID. That volatility didn't only lift the number of trades, but also the average commission per trade due to a higher share of U.S. trading. It probably even created some tailwind for our interest income due to high cash inflows at the time, with a more moderate investment rate of retail investors. As much as we enjoyed the additional boost in the first half year, it is prudent to not project such effects into the future, which we have not done for the second half of our full year guidance. It is also part of prudent management to not get carried away in good times, but to stay focused on the things you can control and we can control. Platex de Giro has always been a story about growth and operating leverage. And while we have been able to strongly demonstrate our ability to grow for years, the operational leverage has never been as evident as one could have expected. There have always been reasons why costs went up in one year. Our special expenses had to be accounted for in another. When Benon took office as group CFO in early 2023, one of his first official acts was to abolish all forms of adjustments in our financial reporting. Yes, unexpected things can happen, and yes, Sometimes it is absolutely the right thing to increase costs to achieve a long-term gain. But the mindset is and has to be that this is just cost of doing business. In the first half of 2025, the provisions for long-term variable compensation were higher than we originally expected. And we did recognize some additional 2 million euros for some personnel measures. But at the end, we have still been able to deliver, again, the operating leverage one would expect from a platform business like ours. The personnel measures I just mentioned are also related to changes at the top of LetXGiro. Over the last three months, we had three changes at the management board, or management boards, I should say. As for the moment, we still have slightly separate management teams in place for FlatX DeGiro AG and FlatX DeGiro Bank AG. In June, Evgeny became our new chief risk officer in the bank, taking over from Matthias Heinrich. It has been a generational shift. On the same token, Steffen Jentsch left the management board of the bank effective end of this month. He has been responsible for leading the project of addressing all BaFin findings and given that all major findings have been solved, his position will not be filled again. Lastly, Stefan Simmang stepped down as CTO, and we used this as an opportunity to bring IT and operations closer together, uniting it under our COO, Jens Moebbets. As we laid out in February already, harmonizing our IT infrastructure is an essential cornerstone for our 2027 growth plans and beyond. And this harmonization is not an IT thing only. It is a business requirement implemented by IT. This is why it is so important to have both parts of the organization working hand in glove. I want to use the opportunity to thank Stefan, Stefan and Matthias for their important contributions they have made to drive the success of LaTeX DeGiro over the past years. At the Supervisory Board, three new board members got voted in at the last AGM in June. Hans-Hermann Lotter, Martina Pfeiffer, and Sana Röser. While Stefan Müller and Bernd Ferch got re-elected as indicated Hans-Hermann Lotter has been elected chairman of the supervisory board. He is also chairing the nomination and renumeration control committees. The joint group risk and audit committee is chaired by Martina Pfeiffer. I speak for all my colleagues in the management team when I say that we are very much looking forward to working together with this newly assembled board and all of its members. One final remark on governance. As you know, we are in the process of making the legal switch from a German AG to a European SE. Following the approval of the last AGM, things are progressing well And we expect the change to take effect during the fourth quarter of this year. I want to close my high-level overview by providing a quick update on some of our key strategic initiatives highlighted in February, starting with crypto trading. We had the initial launch of crypto trading at FlatEx in Germany in December 2024. In the second quarter, we now also added crypto to the products our DeGiro customers in Germany can trade. So we made progress, but not as much as we wanted. Let me explain. To start with a positive, we have done our homework both on the technical side as well as on the regulatory side. We have done the technical implementation on the DeGiro system and successfully launched in Germany. We have also received our MICA license for the international rollout. However, one of our partners is still waiting for the formal approval of their MICA license. The international rollout, which had been planned for Q2, is therefore delayed and we have the launch as well as the start of our marketing campaign only after the summer holiday. Economically speaking, the delay is, of course, already reflected in the updated guidance. As planned, in this wave, we will go live in the Netherlands, France, Spain, and Austria to then have crypto trading available for around two thirds of our total customer base. What we have seen so far is promising and generally in line with our original expectations. By the end of the first half year, the crypto trading volume in Germany alone has already reached some 175 million euros. When it comes to our second important new product launch, securities lending, we are on track for a go-live in key markets such as the Netherlands and Spain early Q4. Securities lending is a valuable enhancement to our product offering, enabling us to generate a higher share of recurring revenues in the future. As mentioned previously, we will start at the Giro due to legal restraints in Germany, holding us back on the flat tax side. We believe that some 20 to 30% of the Giro's assets under custody will be relevant for securities lending once fully rolled out. We will provide more information on the financial impact of securities lending once we have it up and running and have a better visibility on how many customers are opting in and using this opportunity for additional returns. Now, I am pleased to hand over to Benon, who will walk you through our financial performance in the second quarter and the first half of 2025. Thank you for your attention, and now over to you, Benon.