Hypoport Se · XETR:HYQ
Hypoport — Q2 2023 Earnings Presentation
60 slides from Hypoport's earnings presentation, Aug 14, 2023
Slide 1: Hypoport SE Results for Q2/23
Hypoport SE Results for Q2/23
Slide 2: Mission: Digitalising the credit, real estate & insurance industries
Mission Digitalising the credit, real estate & insurance industries Credit industry Real Estate industry Insurance industry Hypoport SE, results for Q2/23 2
Slide 3: Hypoport – a network of technology companies
Hypoport – a network of technology companies Revenue in Q2/23 STAR- BAUFI AMEX POOL QUALITY NEX Pool GENO POOL PACE sia Insurance industry Credit industry FINMAS €14 million SMART INSURTECH corify €38 million EUROPACE ePension oasis funding- REM port CAPITAL VALUE AG FIO DR. KLEIN PRIVATE CLIENTS Pr
Slide 4: No support from sluggish markets
No support from sluggish markets Results for Q2/23 KPIs for Q2/23 compared with Q1/23 (qoq) Segment revenue • Revenue: €85 million (-9%) • Credit Platform revenue: +2% • Gross profit: €50 million (-4%) • Private Clients revenue: -14% • EBITDA: €6.2 million (-34%) • Real Estate Platform revenue: -20%
Slide 5: Contents
Contents 1. Market environment 2. Key performance indicators for the segments 3. Overview of key performance indicators 4. Outlook Annex (incl. share price information & IR)
Slide 6: Potential for mortgage finance volume
Potential for mortgage finance volume Facts relating to mortgage finance volume in the German housing market Population of 84.4 million Interest rates Rent increases at 3–4% Increase of 1.5% Up by 19% Stable since (1.3 million since 2020 autumn 2022 people) since 2020 74% of the Property Rental mark
Slide 7: 3/4 of the German population want to buy own home
3/4 of the German population want to buy own home Preferred living arrangements 12% 14% Preference Own house/apartment given a free choice Rented accommodation Undecided 74% Source: Allensbach / Sparda Banks survey in 2023. Hypoport SE, results for Q2/23 7
Slide 8: Further improvement in factors driving decision to buy
Further improvement in factors driving decision to buy Five key factors driving the decision to buy and their macro-drivers Shortage of skilled High workers due to net inward migration people retiring Few new builds Stable interest rates for the past ten months Rising Stable prices birth rate for th
Slide 9: Property remains affordable for buyers
Property remains affordable for buyers Affordability index for residential property in Germany Disposable incomes, real Property prices, real OECD affordability index Sources: OECD, German Federal Statistical Office. Hypoport SE, results for Q2/23 9
Slide 10: Current market volume well below trend range
Current market volume well below trend range Volume of private mortgage finance in Germany • Very high inflation • Significantly higher long-term interest rates 85 • Only a small dip in property prices Overall market • Uncertainty (energy prices, recession) 75 Freedom of movement for EU employees Ma
Slide 11: Buying property will become the only viable option
Buying property will become the only viable option Macroeconomic factors affecting mortgage finance 5 140 Interest (debit interest rate, ten-year fixed rate, best rate) Property prices (hedonic, indexed) 4 130 3 120 2 110 1 0 100 170 120 Properties offered for sale (number, indexed) Rental supply (n
Slide 12: Contents
Contents 1. Market environment 2. Key performance indicators for the segments 3. Overview of key performance indicators 4. Outlook Annex (incl. share price information & IR)
Slide 13: Credit Platform
Credit Platform Business model & results STAR BAUFI POOL QUALITY NEX POOL GENO PACE Credit industry FINMAS EUROPACE FUNDING- REM PORT CAPITAL Hypoport SE, results for Q2/23 13
Slide 14: Digitalisation of the credit industry
Digitalisation of the credit industry Credit Platform segment business model Consumers / B2B Distributors Poolers Product suppliers companies lending marketplace Online comparison Private sites commercial banks Other advisors EUROPACE Insurance Dr. companies Klein Quality- pool Star- pool Savings Ba
Slide 15: Positive performance in a weak market environment
Positive performance in a weak market environment Credit Platform: mortgage finance and building finance product type • Despite the stable market environment (Bundesbank: +1% Volume of transactions (€ billion)* qoq; trailing), market share for mortgage finance 5-year CAGR: +15% (-3%) was maintained
Slide 16: Europace still has huge potential for growth
Europace still has huge potential for growth Mortgage finance product type: market share, by distribution channel Distribution channels and Europace's share GENOPACE (for cooperative banks)* 5-year CAGR: +60% Cooperative +5% Brokers banks 12 13 ~25–30% ~25–30% 8 2.5 2.6 1 2 4 ~60% ~20% 2017 2018 201
Slide 17: Robust growth in a stagnating market environment
Robust growth in a stagnating market environment Credit Platform: personal loans product type • Over the past five years, Europace has gained significant market Transaction volume in personal loans (€ billion)* share in the personal loans business as a B2B marketplace 5-year CAGR: +15% -3% • The exp
Slide 18: Solid performance on access to government funding
Solid performance on access to government funding Credit Platform: corporate finance product type • REM Capital had seen exceptionally strong growth until mid-2022 Volume of new projects at REM Capital (€ billion) due to attractive KfW funding schemes for energy-efficient properties • Current extern
Slide 19: Encouraging start to the year
Encouraging start to the year Credit Platform: revenue, gross profit and EBIT +2% • Further small increase in revenue despite an exceptionally weak Revenue (€ million) market, particularly in respect of private mortgage finance 37.7 38.3 • Profitability still below the five-year average of 40–45% (E
Slide 20: Private Clients
Private Clients Business model & results DR. KLEIN PRIVATE CLIENTS VER- GLEICH .DE Private clients Hypoport SE, results for Q2/23 20
Slide 21: Strong brand for independent advice
Strong brand for independent advice Private Clients segment business model Consumers Lead generation via… Advisors Access via… Product suppliers Private commercial Google banks Insurance Dr. Klein companies Vergleich.de EUROPACE franchise system FINMAS Savings banks DrKlein.de GENOPACE Cooperative b
Slide 22: Dr. Klein maintains its position in a weak market
Dr. Klein maintains its position in a weak market Private Clients: operational key figures Volume of new loans brokered to private clients • Following a strong Q1, market share was maintained in Q2 in a (€ billion)* 5-year CAGR: +13% weak market environment; consumers were unsettled by the GEG -9% d
Slide 23: Solid Q2/23 for Dr. Klein, after a seasonally strong Q1
Solid Q2/23 for Dr. Klein, after a seasonally strong Q1 Private Clients: revenue, gross profit and EBIT • Strong Q1 due to seasonal factors, with a sharp uptick in the Revenue (€ million) -14% market, but not matched in Q2 as the further recovery of the market was put on hold owing to the GEG debate
Slide 24: Real Estate Platform
Real Estate Platform Business model & results EUROPACE VALUE AG FIO DR. KLEIN WOWI PROM MISE Real-estate industry Hypoport SE, results for Q2/23 24
Slide 25: Potential in the digitalisation of housing industry
Potential in the digitalisation of housing industry Market segments and solutions Owner- Private (small-scale) Institutional occupiers landlords housing companies Residential units approx. 18 million approx. 17 million approx. 7 million in Germany Hypoport Property sales platform Property financing
Slide 26: Innovation in a sluggish market
Innovation in a sluggish market Real Estate Platform: property sales platform and property management platform • Development of software solutions for the sale and management of Property sales platform volume residential properties in the credit and housing industries (€ billion) +5% • Small rise in
Slide 27: Slowdown in mortgage finance market is taking its toll
Slowdown in mortgage finance market is taking its toll Real Estate Platform: property valuation platform Property valuation platform volume • The fall in mortgage finance volume and the small loans (€ billion) threshold being raised by 50% have now led to huge -15% product shifts in the property val
Slide 28: Very muted market in Q2
Very muted market in Q2 Real Estate Platform: property financing platform for institutional housing sector • Rising interest rates and interest-rate volatility in 2022 have greatly Volume of new loans brokered on the property reduced the inclination of the housing industry to do business in 2023 fin
Slide 29: Marked decline in volume on property financing platform
Marked decline in volume on property financing platform Real Estate Platform: revenue, gross profit and EBIT -20% • The market and regulatory situation led to sharp falls in Revenue (€ million) revenue from property valuation and in finance for the 16.4 social housing industry 13.1 • This had a mark
Slide 30: Insurance Platform
Insurance Platform Business model & results AMEX QUALITY Pool POOL Insurance industry sia SMART INSURTECH corify ePEN- oasis SION Hypoport SE, results for Q2/23 30
Slide 31: Market positioning of the companies now finalised
Market positioning of the companies now finalised Strategic positioning of the segment's portfolio Insurer Underwriting agent Marketplace Pool Broker Hypoport SE, results for Q2/23 31
Slide 32: Steady increase in the platform volume
Steady increase in the platform volume Insurance Platform: private insurance portfolios • Annual net policy premiums of just under €9 billion for Private insurance portfolios (annual net policy premiums, € billion) private insurance policies are managed in the legacy systems 8.6 8.6 • Migrating thes
Slide 33: Industrial insurance now a separate business line
Industrial insurance now a separate business line Insurance Platform: industrial insurance portfolios • Strategic repositioning as a contract portfolio management Industrial insurance (annual net policy premiums, € billion) platform for the growing industrial insurance market finalised ~ 31 • Progre
Slide 34: Huge potential for digitalisation in occupational pension market
Huge potential for digitalisation in occupational pension market Insurance Platform: occupational pension portfolios • ePension integrates all stakeholders in the occupational Annual net policy premiums on occupational insurance portfolios (€ billion) insurance market, including HR departments of la
Slide 35: Progress with the strategic realignment
Progress with the strategic realignment Insurance Platform: revenue, gross profit and EBIT -15% • Volumes from additional clients signed up for SMART INSUR Revenue (€ million) and ePension in 2022 and 2023 are being steadily migrated to the platform, but the acquisition of new clients continues 16.8
Slide 36: Contents
Contents 1. Market environment 2. Key performance indicators for the segments 3. Overview of key performance indicators 4. Outlook Annex (incl. share price information & IR)
Slide 37: Conditions in Q2 led to decrease in earnings
Conditions in Q2 led to decrease in earnings Overview of Hypoport's key performance indicators Performance (€ million) Earnings (€ million) 93.7 85.3 9.4 6.2 Revenue -9% EBITDA -34% 0.8 EBIT -2.5 EAT 0.2 52.2 Gross -2.5 profit 50.0 Q1/23 Q2/23 -4% Q1/23 Q2/23 Hypoport SE, results for Q2/23 37
Slide 38: Current environment offers long-term opportunities
Current environment offers long-term opportunities Long-term changes in revenue and EBITDA Established Upscaling & Qualitative growth Start-up despite fin. crisis expansion in periods of crisis Revenue (€ million) 446 455 85 4 26 98 1999 2006 2013 2021 2022 Q2 2023 EBITDA (€ million) 77 58 2 7 8 6 1
Slide 39: Contents
Contents 1. Market environment 2. Key performance indicators for the segments 3. Overview of key performance indicators 4. Outlook Annex (incl. share price information & IR)
Slide 40: Costs held steady despite inflationary pressure
Costs held steady despite inflationary pressure Cost levels in the segments Costs (€ million) • The reduction of costs across all segments will lower expenditure by €35–40 million per year compared with -14% the initial quarter, Q3/22 (€60 million) 58 +3% 50 51 • Costs reduced by €7 million (11%) be
Slide 41: Trigger events cause Germans to turn to financing
Trigger events cause Germans to turn to financing Factors of relevance for financing decisions Property purchase Remortgaging New builds Modernisation Type Reasons Life events Children, divorce, career Children changes Interest rates Changes in choice of Majority of loans have Minor change to locati
Slide 42: Market holds huge opportunities for growth
Market holds huge opportunities for growth Primary drivers of long-term market growth 100 202X: market of the future 90 ~ €75–100 billion per quarter • Persistently high immigration 80 • Regulated rental market offers little choice even to middle-income 70 tenants, thus encouraging renters to consid
Slide 43: High amount of refinancing from 2027 ongoing
High amount of refinancing from 2027 ongoing Expected volume of refinancing 2024 - 2030 Remaining mortgage volume after 15 years fixed period Remaining mortgage volume after 10 years fixed period approx. + €30 bn 2024 e 2025 e 2026 e 2027 e 2028 e 2029 e 2030 e 2031 e 2032 e 2033 e 2021 2022 2023 So
Slide 44: For years Forecast for 2023 For many more years
For years Forecast for 2023 For many more years Hypoport has been Based on the assumption that Hypoport will generate double- generating double-digit the mortgage finance market will digit increases in market share increases in revenue and pick up a little in H2, a fall in and thus, in normal market
Slide 45: Contact
Contact Jan H. Pahl Hypoport SE Head of Investor Relations Heidestrasse 8 Tel: +49 (0)30 420 86 1942 10557 Berlin Email: ir(at)hypoport.de Germany Click here to subscribe to the IR mailing list (German only) Click here to subscribe to the IR mailing list (English) Hypoport SE, results for Q2/23 45
Slide 46: Disclaimer
Disclaimer This presentation does not address the investment objectives or financial situation of any particular person or legal entity. Investors should seek independent professional advice and perform their own analysis regarding the appropriateness of investing in any of our securities. While Hyp
Slide 47: Annex
Annex Hypoport SE, results for Q2/23 47
Slide 48: Investment highlights
Investment highlights ~20% REVENUE GROWTH 10-year CAGR 20+ YEARS of experience with platform- based business models ~20% EBIT INCREASE 10-year CAGR 88% OUR EMPLOYEES are satisfied or even extremely satisfied with 15+ ACQUISITIONS Hypoport as an employer in 10 years Hypoport SE, results for Q2/23 48
Slide 49: Cost adjustments introduced in Q3 2022 are proving effective
Cost adjustments introduced in Q3 2022 are proving effective Cost levels over time Costs (€ million) • The reduction of costs across all segments will lower expenditure by €35–40 million per year compared with the initial quarter, Q3/22 (€60 million) • Operating costs lowered by reducing office spac
Slide 50: Market capitalisation above €1 billion
Market capitalisation above €1 billion Shareholder structure and share information Breakdown of shareholders as at 31 July 2023 Key performance indicators KPI Details Value Ronald Slabke (CEO) Treasury shares EPS Earnings per share in Q2/23 -€0.40 Free float (more than 5% held by Baillie Gifford, mo
Slide 51: Share price performance superior to indices
Share price performance superior to indices Share price since the date of joining the SDAX (daily closing price, Xetra, €) € HYQ SDAX MDAX % 650 820 620 784 590 748 560 712 530 676 500 640 470 604 440 568 410 532 380 496 350 460 320 424 388 290 352 260 316 230 280 200 244 170 208 140 172 110 136 80
Slide 52: Hypoport's investor relations activity
Hypoport's investor relations activity Investor events, professional analysts' assessments, awards Recommen- Target Recent IR events Analyst Date dation price Bankhaus Metzler Sell €107.00 2 August 2023 Conferences Lyon, Frankfurt, New York, Hamburg H1/23 Berenberg Buy €230.00 7 June 2023 Roadshows
Slide 53: Mortgage finance – a high-potential market
Mortgage finance – a high-potential market Long-term factors influencing private and institutional residential mortgage finance Negative factors Positive factors • Lack of available properties • Strong pent-up demand in and from the Finance for rental market OWNER- • High ancillary purchasing costs
Slide 54: Small population increase supports demand for housing
Small population increase supports demand for housing Expected changes in population size up to 2040 86,0 Population level in the moderate planning scenario (births, life expectancy and net migration at moderate rates) 85,5 85.2 85.2 85.1 85.1 85.0 85.0 85.0 85,0 84.9 84.8 84.6 84.5 84,5 84.2 84,0 2
Slide 55: Long-term neither interest rates nor short-term political topics matter
Long-term neither interest rates nor short-term political topics matter Factors influencing demand in the German property market Factors Effects Outcome EU integration Net inward migration Economic stability Life Number of expectancy households Number of one-person Demand for households housing Lock
Slide 56: Scarce supply due to low sales volumes and limited new building
Scarce supply due to low sales volumes and limited new building Factors influencing supply in the German property market Factors Effects Outcome Life expectancy Transaction Sale of costs existing properties Alternative investment Supply of options housing Regulation New builds Limited resources (mat
Slide 57: A long-term growth market
A long-term growth market Structural factors underpinning sustained growth in the finance market Demand for Regulation of the New builds housing rental market Rental costs Excess demand Volume of property Mortgage (approx. 2 million homes) transactions finance volume Property prices Supply of Regula
Slide 58: Potential for digitalisation in the insurance market
Potential for digitalisation in the insurance market Long-term market factors Negative factors Positive factors • Established market players' legacy • Consumers have higher expectations regarding systems are slowing the pace of digitalisation digitalisation due to the lack of • Insurtech start-ups a
Slide 59: Digitalisation of the insurance industry
Digitalisation of the insurance industry Insurance Platform segment business model End customers// employees & Distributors Poolers B2B Product suppliers companies insurance platform Insur apps Insur apps Advisors in bank branches Dr. Other SMART INSUR Klein brokers Quality-/ DR. KLEIN Amex- pool In
Slide 60: Huge potential for growth in all product groups
Huge potential for growth in all product groups Market share in the three product groups Overall market in 2022: €224 billion in annual net policy premiums written ~ 173 164.4 ~ 31 20.3 8.6 2.1 28.9 0.2 20.1 Private insurance companies Industrial insurance companies Occupational insurance schemes Us