Hypoport Ag

Ladies and gentlemen, welcome to Hyperport's webcast for our fiscal year result 2025. We will host a Q&A session here with my CEO Ronald Amin. My name is Jean-Paul, I'm Head of Investor Relations at Hyperport and we are happy to receive your questions. You can highlight your questions by three ways. You can raise your hand by clicking on the blue sign for raising your hands, at least. You can type your questions into the chat, or if you would like, just type into the chat, I have a question, and we can also give you the right to speak. Just type in three ways you can ask your questions regarding our fiscal year results. We came up this morning and we will wait a few seconds and minutes for the first questions here. I can see that we have several participants here, so we're happy to wait for your first question.

Hello from my side as well. Let's start with this. Perfect. Yeah, we had a very vital discussion here last time when we presented the Q3 number, so we are looking forward to another deep dive.

I can see that someone is typing at least, so happy to moderate the first question. want to give someone the right to speak, however. Perfect. So, first question here. Ronald, can you talk about how you are thinking about balancing growth versus margin in this today environment?

Yeah, thanks for the question. So let's add there that up until the beginning of 2022, our focus was growth and showing a fitting expansion of our profits or keeping our even margin is stable slightly rising and this was under the expectation that we are in a pretty stable market environment so volatility of our core markets are slow and we can with a certain level of predictability predictability is see the future and With this, keep investing and expanding the network and the business models while scaling our probability. So with the massive change in the market environment and the sharp drop in the second half of 2022 of roughly 50%, we learned that our market is more volatile. So since then, we know that we need a higher productivity level to, let's say, stay in a safe environment for the whole group and not risk to have to restructure again. because this creates a lot of waste when you build something up and have to restructure. For the last three years now, since 2023 and up to 2025, we were focused on keeping our cost base stable, keeping the headcount stable and just scaling our revenue side. and with this focus we start the year 2026 and from today's perspective as well i see this for the upcoming years that we need to expand our probability so our we need to reduce our cost income ratio you can say And we already shared with you our target to the end of this century. We want to double our current EBITDA margin from 12 to 24 percent. So to scale profitability and show that our business models are still early stage and have a lot of potential when you look on profits and free cash flow generation.

Perfect. Thanks. We've received a couple of questions in the meantime. However, because it was a pretty long question, actually you answered a little bit of the next one. But we can. It's a good follow-up. So the next question is that we guided to double our margin until 2030. And can you explain what are the key assumptions, at least, of this guidance? And in particular, are these including price increasement for Europace or not?

Okay. As you can imagine, we do a lot of planning, short-term and long-term perspective. And our margin expansion and the profitability growth is based on a complex bottom-up planning process where we, for every business unit and all three segments, predict the our current expectation for the future. What is included is a healthy market environment, significant market share gains in the level which we saw in the last years, release of and monetization of new products which are already um developed or in development so no innovations or no no inventions no new adventure are included um there are priced developments included if they are visibly for us so um if we our prices are indexed or if we have agreed with our partners some kind of dynamic prices What is not included is future decisions to change price structure, like innovations. So coming back to your question, the core discussion, so this is what we see in a normal environment, what's going to happen to our profitability, so this is not based on unknown territory that we have to still conquer or how to say invent.

Right, thanks for these answers. Hopefully this answers the question. If not, don't hesitate to come back. So we once again received a couple of questions. I tried to group this a little bit and to order this. Maybe the next one is a little bit on the guidance 2026. So can you explain and help us to understand how EBIT will turn into cash flow?

Okay, yes, so EBITO cash flow is in general when there is, let's say, an interest burden on the group, which rise a little bit from the spread of short-term to long-term interest rate, but we talk about low single-digit million euro amount, so something around a million or two, depending a little bit how much liquidity we short-term invest versus our long-term loan agreements. So not a big change from this perspective. Our average tax is something slightly below 30%. With this year still a lot of let's say, tax credits to be used. But let's say taking this out, it's fair to say that roughly 30% goes to tax. You are aware of this, that we have some changes in working capital ongoing. So especially to the end of the year, we increase working capital. In the beginning of the year, it decreases. This is linked to our business model. I would say this is minor for the question of how our free cash flow generation is changing. So taking this all into consideration, so cash flow generation this year should be something between 30 and 40 million euro. So for the expected EBIT of 40 to 55 million euro.

Right, thanks. So next question is not specifically on the guidance, but a little bit on the near future. So let's talk a little bit about products. Can you talk about what couple of new products, monetization opportunities you're most excited about?

Yes, let's say this is what I'm most excited about. Okay, let's start with real estate and mortgage business. I'm excited about rollouts of products, integration in the savings banks industry and in the corporate banking sector. So Savings Banks, it's a joint offering for the Savings Banks together with our joint venture partner, Finance Informatik, for the consumer front end, where we integrate the properties into the consumer front end of all 30 million Savings Bank customers. And the ones who have a property already financed by the Savings Banks will see it there and will get an accurate aviation every time they open their account and from there can start different processes around their property if they have a mortgage with the saving bank for instance refinance it if they have a mortgage with someone else refinance it as well with the saving bank and other services so second project is roll out for the savings banks to opt in as a whole bank for the independent approach on the product for advice in their branches so that the saving bank has to decide on a workplace basis if they are using of architecture powered by europace they in the future can decide for the whole bank i'm just going to roll out during this year And on the cooperative banking side, it's our new product where we integrate the automated value model of Value AG in the workflow of the cooperative banks. And with this, let's say first time, a full integration of mortgage process and valuation process in a digital optimized streamlined workflow. where we saw already a lot of signing up in 2025, so we are getting close to 200 banks which are signed up already, but to get them all productive, the usage up for the integrated model is something which excites me for 2026. Yeah, and with this I would say, let's say number three is Value AG's digital product offensive in this valuation space, where we offer more and more product and product range for automated valuations, as well outside of the cooperative banking sector, as you can imagine. Yeah, number four is WUFI port and the constant additional integration of features from within the group and outside of the group in the system and the increased speed of underwriting signatures from cooperative banks there. cooperative housing associations there for the ecosystems which we expand right now.

Great, thanks for this. So we've talked a little bit about the products right now, maybe AI is a good next one. And the question is here about, just a second, Can you talk about how you and your team are thinking about AI as an opportunity or risk? So what period of technological change in HyperPort's history does this remind you of, if any?

Yeah, actually, let's start at the end of the question. It reminds me at the beginning of Hyperbots development. So when the Internet was there to connect the consumers and businesses and enable workflows across business without complex interfaces, just by bringing different businesses in the value chain together on one solution. So this massive change which we saw in the industry in the beginning of this century where for the mortgage business we can say we designed it and we brought it to life for the whole market. This is something which reminds me on the current change and the abilities AI adds for the whole industry in additional automation in the end. and a massive improvement in quality of service to consumers and all other parties along the value chain of mortgages. So we see it as a huge opportunity. We facilitate this. opportunity already now for a couple of years because it just enables us to deliver better solutions, and with better solutions comes in the end, let's say, more attractiveness of our platform for everyone involved. I switch to a slide where you see some examples for Europace, what is already in Europace based on AI, and the current massive development around generative AI is, let's say, expanding the space where it's possible and accelerating the development of this. So, let's say, based on our data and based on our services that are there already, our openness to the surrounding and the way how we designed Europace to make everything what is within Europace available via APIs, we see us as a perfect hub for any generative AI out there or specialized models which have some touch point to the mortgage process to interconnect with us and create with this a perfect integration and access to the offerings of the whole German banking sector with just one interface. And with this enable a lot of business models in an early stage process of creating new home ownership or a new mortgage at this point. sorry a huge opportunity for for us um is it the threat um let's say we we try to find the threats multiple times now with the current stage of what ai is able to provide we don't see we don't see we don't see a a threat for us because let's say replacing us or certain business models would be quite a difficult job with or without AI. And let's say seeing how everyone who wants to invest in AI and wants to create something, consumers or business partners, we are an enabler to create value there and to try to compete with us. this would be a quite challenging experience, let's say, seeing how integrated we are in a technological way with our partners.

Perfect, so we've got two more questions which are not linked to AI, not to the product, so a little bit hard cut, but however, can you talk about what are the, try to figure out, I'm not sure if it's about mortgages or about personal loan, can the private credit crisis have a direct or indirect impact on Hyperport business? I assume it's personal loan, not sure. What are that?

Yeah, sounds like, I would say. So this is, in general, the one who's questioning this is referring to, no, wait a second, the to the personal loan volume in the German market and the rising level of defaults. So what we see already in the last three years now that banks adjust their risk profile to this recessive environment in Germany. Consumers on the other side are not too keen to expand their borrowing, so we see an overall shrinking market, and especially in the riskier part of the market, line of offerings by the banks. And this we saw already, this is past fast. What recently happened is that banks got confirmation for their hesitation in the last two, three years because defaults trickled up. So certain banks which were actually pretty active in the, let's say, subprime segments feel the pain and see some losses going up in their portfolios. Is it something that affects us? Let's say not directly. We see that the banks in the end did a good job to reduce their lending lately. It changes the industry a little bit and we try to profit from this. Lots of banks get more risk averse and this becomes the challenge that they can't fulfill all their consumer needs. And with our platforms where we offer a ventile for banks with a change in credit policies, let's say we give them a solution to keep their client relation and to monetize on their client relation, but not fund their lending products by themselves anymore. We saw this already during a financial crisis in the mortgage business 15 years ago. And so in such an environment, open architecture shows how strong it is that you as a bank are able to, let's say, on a daily basis or quarterly basis, just change your credit appetite without threatening your client relation and your sales organization just by switching where the products come from. and right now it's again the time to to show banks in personal finance here in the personal loan business that the flexibility your place offers for their sales is something beneficial in the turbulent market environment something you can't do with the traditional idea which is only focused on providing exactly one loan and this is out of your balance sheet

Perfect. So the next question is regarding, maybe for the next question we would love to see the slide with the bridge to EBIT. So this one. So can you help us bridge the cost savings in 2026 and as you aim to double margins mid-term?

The cost savings. So what we try to describe here is how the profitability bridge looks like. Let's say NPC separate the loss making businesses and name three of them from the already profitable businesses and market impact. In general, costs for the group level will go up. We have an inflation and this comes as well increasing salaries. We have a stable headcount in Hyperport over the last years and expect this for this year as well. So there is an incremental cost increase over overall, over the whole group, which is already compensated with additional revenues that we expected. And this is what we show here. So the loss reduction or the profit gains are net effects after the cost effects. If you want to calculate the cost effects, I would say it's fair to use a 4% or 5% increase in costs on a group level.

Hope this answers the questions. If not, don't hesitate to come back and check on this. The next one, at least, I think it's the last one for now, is on share buyback. So we saw the 10 million share buyback program last year, this year. How eager are you to increase this, given the strong expected cash generation?

I see share buybacks as an opportunity to gather shares for our employee benefits programs as well as a potential instrument to acquire additional business model. far future and for now it's i would say it's a good time to acquire our own shares because we see them especially historically pretty low priced so you know i would say i'm eager to acquire more shares And if we are able to, it depends always from, let's say, a lead perspective, if we are allowed in the moment to buy and when we are allowed to buy, what is the share price in this moment and how many shares we will get.

right um so the next one is uh regarding market share um assuming it's euro pays uh mostly so what gives us confidence you well we will gain market share given the data from last year yeah um let's switch to this here for a second so um

We all, let's say we, all banks in Germany, other mortgage brokers, for a long time just looked on the Bundesbank reportings for their interest statistics and believed that this is a good representation of our market to compare with. Lately, we see a mismatch between these numbers and what we see as our target market. And we learned in the last, you can say, three quarters when we analyzed this and tried to understand why we can't can't align anymore with the dynamic this interest statistic of the Bundesbank is reporting. So we learned that there are major differences between this what they report about and this what we target. So they report about let's say all kinds of mortgages provided by German banks within the EU to consumers or nonprofit organizations. They report about every contractual change. To be fair, they separate these contractual changes, but the certainty of banks classifying it correctly is, let's say, limited. And they report as well about, let's say, which are saving products for a long time and then they create a loan out of this and the payment out of this loan as well as new mortgage volume. So there are a lot of areas where the market, the Bundesbank is describing for their interest statistic and our market of consumer, consumers, taking a mortgage to buy, build, renovate, or refinance a home is different. For now, we can't, there is no, and you asked for certain, there is no better statistic available. Bundesbank is since 2023 gathering as well information just about mortgage finance for consumers here in Germany, but they still don't publish this data, which they now collect for three years. So as soon as this data gets available, we all will learn how the last three years in reality looked like. As long as they stay disclosed, we can just look on our platform, we know that we represent roughly a third of the total market, we see how the different business models of brokers and banks with branches perform to each other and we can make a rough guess who's really winning and who's losing market share right now and what may be a fair representation of the market. And when I look on this, then I would say we are by certain below 15% market growth, closer to 10 than to anything above 15%. And this is, let's say, based on a third of the German mortgage market. We don't see two-thirds of the market, but we have difficulties to expect that there is a higher dynamic in any area.

Right, perfect. So there are some follow-up questions on these topics, but because your answer was pretty long, I hope that it seems that they've already answered. Just one more. How is January? The number, bonus spec number, January performing? We've seen the numbers show a slowdown. They assume our numbers are also down, but at least we don't communicate on monthly numbers, right? But this is the last open, honestly, on this year.

What we can say is there are other publicly available indicators how the market is. Schufa is reporting on the information, how many Schufa requests there were. So there's credit scoring requests and shows a small decline year-on-year for the first weeks of this year. So this data is available and gives some indication how a market looks like right now.

Right. So the next one is what we expect on Europace One to contribute. So how many customers are signed up? What EBIT maybe we are expecting? Just rough estimation. What are our feelings on Europace One?

Yes, so I didn't mention Europace One is one of the most exciting products. It's actually not fair, to be fair. So Europace One is in monetization since summer last year. And it's the first time that we create an ABO model on Europace where users sign up for exclusive services. and pay roughly 1,000 Euro per year for this bundle of exclusive services. So we are still in the learning process how to advertise for this bundle on the system. We still have to learn to bring the sales organizations with our typical contractual partners in the past and the needs and the requests of consumers together. So for now I would say it wasn't the best start possible, but we see that we have now a three-digit number of advisors signed up. We are in talk with a lot of large organizations to enable the use of the bundle within the organization. Often this is linked as well to let's say that certain features are competing with internal solutions or needs integration to really work for the users. So we are, let's say, We are in a way to integrate the different perspectives and needs in this and expect to develop this number of signed up users dynamic during this year. So the long term goal is and this is not a 2027 number that we get to a four digit number of signed up users. a client and then scale this uh and this means uh more than a million in revenue yearly up to 10 million in revenue when we get in the direction of five digits so where this will be exactly and is uh it's a question i would say for the next two three years to uh to widen the user base for this first bundle that we offer with their exclusive products as i said

So the next one is different topics here, not sure how to structure, but maybe this one. So how much did our gross profit in 2025 get affected by lower average mortgage terms?

Mortgage, let's say lower average mortgage terms. Duration, the duration of the mortgage. So for everyone who is listening, we talk about the fixed interest rate period, which is major, especially for the European tax trophy. because we get one basis point upfront for each year of fixed interest rate period. The average of fixed interest rate period during 2025 declined from close to 11 years to close to 10 years, so roughly by 8%. This is for the transaction fee model. For the margin models of the poolers or our franchise network, it's not that important, but for the transaction fee, it is relevant. So, telling this, we talked about a significant seven-digit amount, which our transaction fee revenue was decreased because of the shorter duration, so it had an impact. in 2025. We don't expect this impact to happen again from the current base in 2026 because we have difficulties to imagine the German mortgage market with an average below 10 and we are right now at 10.1 years exactly.

Great. So the next one is on the market as well, mortgage market. Actually, a little bit wider on the broker industry. So there's consolidation by fact. So do we consider to be the best owner, for example, for the Dr. Klein franchise network as well as the broker and poolers within the insurance segment?

These are two quite different questions. Let's say for the Dr. Klein franchise network, for now it's the largest German mortgage broker belonging to ING Group and Dr. Klein is the second known brand in the end. which takes market share over the last years and gets closer to the Interhub brand. I have difficulties to imagine some other owner structure for this Dr. Klein brand right now because for the Europace platform, it's vital to have as well strong broker brands and not just be focused on small intermediaries. In a world where as well the largest broker would use EuroPace and so the whole German broker business would go through EuroPace, then we would not need the ownership of the franchise network anymore. This is still difficult to imagine that something like this is happening. So as long as we see this competition, This dual pole between these two, gathering market share, we see that it's essential. And often Dr. Klein is as well a great pilot partner for innovations of the platform. So it's driving the innovation together with Europace robot. In the insurance segment, we see that there is a strong consolidation process in the pooling businesses in insurance, and we are committed to provide the underlying technical infrastructure. So in case that we are able to gather more volume on our platforms, we are willing to disinvest on the side of the broker pools. So to bring the technology forward, we would be willing to find strategic options and we don't see, let's say in this area actually where a lot of pools and sales organizations out there, we see this as a certain level of challenge as well for certain competitors of our activities to join the platform if we would state that we are not willing to share the ownership there.

Okay, great. So this was regarding the market, the mortgage market as well as a little bit of insurance and consolidation. What's next? maybe this one um it's again regarding the guidance um so price wise are we willing to still stay with these 1.1 basis points with euro pace and what is our view on the mortgage volume growth in 2026 and the current mortgage interest rates

What is the best slide for this? Let's go here. We had a very strong first quarter in 2025. influenced at this time by a good start in the year and then a spike in interest rate because of the announcement of the new, at this time potentially new government that they would borrow another 1,000 billion euro to ramp up German spending for defense and infrastructure. This 50 basis points spike in interest rate which we saw brought a lot of people to close their mortgage applications fast. and gave us a very strong first quarter. And we all know already that the following three quarters were slightly weaker. So when we look on this year, we would expect a more positive dynamic during the year because of, let's say, a general positive change in German macroeconomic figures. For now the expectation is still that we are getting close to 1% growth in our economy. And this and the positive change of potential buyers and borrowers and a positive dynamic during the year. So right now we have an Iran crisis which is massively increasing the uncertainty. not directly for German consumers, but you can feel that energy prices are going up when you still drive a combustion engine. And if this war stays longer,

It seems with your mute.

Looks like that he's doing this now once per call, that he resets all devices here. So energy prices going up may lead to higher inflation. There are some warnings already. We may see inflation of up to 3.5% if this war stays longer, and with higher inflation comes as well higher interest rate, and we saw a sharp increase in interest rate in the last days, you can say, in the last two weeks since this war started. It's difficult to, let's say, with this level of uncertainty right now, to give, let's say, a certain prediction of how the year will go forward. This depends a lot on how long this crazy crisis in the Middle East lasts. I hope, I need to say, that all parties involved come to a fast conclusion that it doesn't work out as planned and that face-saving rollback is the best option. And we continue as we would have expected the year would go just a couple of weeks ago. And then we stay with our expectation that we have an incremental growth during the year so that the quarters gets better over the year because of the underlying dynamic that housing is something needed by of households in Germany right now which are waiting for years now to act and see that there is a lot of supply there, prices are pretty stable, not going up fast, not trickling down, and interest rates stay on, let's say, healthy level um for this price uh for this price um level vr at and um so every other and every other uh to model every other yeah how to say um scenario so where did this iranian conflict is uh escalating or just keeps going without any decisive decision is tricky to modulate right now because of the high level of uncertainty in it.

Indeed. So, next questions. That's a hard cut, but why not? So the next one is regarding CapEx. Is CapEx in line with cost growth or is it higher, is it lower? What do you expect?

It's in line with cost growth. Yeah, it's in line with cost growth. There's this, yeah, major part is our investment in our platforms. We don't expect, we don't plan, we don't expect changes in our investment strategy there. It's a pretty decentralized decision process, but overall in the group it should be Perfectly in line with the cost development, yes.

Okay. The next one, also jumping to the next question. I think we mentioned it before, but maybe the gentleman is a little late to the party. Would we consider rising the commission on Europace for our transaction?

So what we consider is that with Europace One, we offer additional features on Europace in a different pricing model, and we expect the volume of participants in the broker segment to rise. And during 2026, we will bring this as well to the branch networks of banks in combination with a higher transaction fee. So we don't expect to increase the prices for Europace, but we expect that we offer for the branch networks a Europace system with a more exclusive feature for a higher price. So this is going to be introduced this year about the success you will hear in our quarterly statements.

check so the next one seems this last one actually is regarding our portfolio of business we have our network here are we happy with this or could we think about the investment or maybe acquisitions in the near future exactly so any near-term changes here to expect

Let's say we are focused on realizing the ideas, the strategic decisions and the synergies that we expected from close to 20 acquisitions we did during 2016 and under 2019. and we are still in the process of fulfilling these expectations and stay focused on this and improving with this our profitability on the group level. So don't expect an expansion of the group in 2026. Not in the scope, let's say, so we will not add different new units. If there is an opportunity to let's say, integrate something which has a perfect fit to our existing business models. This may always occur, but it would be not a strategic move, it would be just an opportunistic approach in a certain field. So don't expect M&A activities from us. We are not driving this forward right now. We want to stay focused on what we do. On the other side, we are open in multiple business models for strategic partnerships to scale. So DM in merchant acquisition has a higher probability than that we acquire something. So to find fitting partners which are enabling us to grow things faster than we are able to do it by our own is on the table, and we are actively looking for these opportunities for business models where we don't develop the traction that we expect from the units within the network.

Great. It seems there are no more questions. However, I counted 19 questions, so if I may miss someone, please raise your hand. and came back to me or if something came to your mind to fulfill the 20 questions why not so we're waiting a couple of seconds here if maybe someone shows up with the next question or if someone feels that I've missed his or her questions don't be shy just type in we will stay a little bit here Thank you. It seems there are no more questions. We've covered a lot. We've covered a lot of the big topics, AI, portfolio, as well as some niche topics. I would say, well, there's another. Yeah, we got the 20th. Just wondering if our market share assumption to reach our, yeah, how much market share we need to achieve the 2030 guidance, so the midterm until the end of the century. Is it a clean or clear number we have in mind or?

Yeah, let's say the market share gains are included in this number, a trickling up of our market share, but let's say on this short term period we are talking then about raising from 30 to 35%. So this is not something like a 30 to 50% market share or something like this. It's an incremental gain of market share during this upcoming four years in the end.

And we expect a growing market, so it's not only market share, so at least a couple of factors to bring in when we look on the market, which market we need to achieve this guidance here. So it's market share gain, but also market growth at all. So just to get a little bit of color on this. So I think this was a question I missed. Sorry for that. And thanks for circling back. It seems that we have no more additional questions. So maybe some last words from your side, Ronald. I see you switched on our guidance, our forecast. Yes.

Slide for the end of the... the Q&A session here. Thank you for the questions. Again, a vital dialogue. I think it's great for everyone here involved. So we will meet here again in two months, hopefully already long after the crisis in the Middle East finished and we have a more clear view how the year 2026 will look like. Up until then, stay safe, have a good time. Thank you. All the best. Thanks. Bye.