[Abrupt Start] …Q1 results webcast from Hypoport SE. My name is Jan Pahl, I’m Head of Investor Relations here at Hypoport, and together with my colleague, Ronald, we would like to welcome you to our webcast. I will start a recording in just a few seconds so the webcast will be recorded, just to let you know. And we will have a short presentation by our CEO, Ronald; and after this quickly followed by a classic Q1 session, which I will introduce you after. But now I may hand over to Ronald and start the record. It seems Ronald that you are already ready. Please welcome.

Yes. So, hello, everyone. Yeah, presentation of the Q1 numbers of Hypoport 2025. You know it already, we delivered a strong growth in the first quarter, double-digit growth rates in the core, thanks to an ongoing recovery of the German mortgage market, something which is still in the core of our major business unit, real estate and mortgages. Second good news comes from as well the housing environment, our ERP system, our AMP platform for the housing sector is keep accelerating in subscription rate. So the strong success is all there and base of good performance of the financing platform segment in Q1. There is a downside of Q1, you can say that everything outside of the residential mortgage market, all credit markets are still depressed, distressed, thanks to, let's say, leading government, which didn't focus on prosperity here in Germany and a new government, which was just established at the beginning of the second quarter of this year. So the environment in the first quarter was friendly said open. Okay. As usual, we start with the mortgage market as the core of the real estate mortgage segment, you are aware that housing is, let's say, even when we talk about the mortgage market usually and the underlying housing market, it's a fundamental macro development here in Germany that we have housing crisis that people would like to find a fitting place for their families, typically for German families in the moment when they get triggered by family events like children's, and with a frozen renting market, this more and more -- these life events needs to be processed in the homeownership market. The renting market is in Germany frozen. For a couple of years, government tries to tackle the issue of rising rents with additional regulation. And this led to a massive mismatch between the rents of existing contracts and new rents. You can say in metropolitan area, it's roughly one to two. So the new rents are double of the existing rents. This locks the renting market, because everyone with an existing renting contract has a huge benefit to stay in this apartment. So the turnover in this market dropped sharply and families, people who got triggered, don't find any solution in the renting market anymore. And for Germany, this is a massive change, 55% of Germans live in a rented apartment. And to leave such a rented apartment to a new rented apartment gets more and more impossible. On the same side, the regulation makes it less attractive for especially smaller private landlords to invest in housing. So they withdraw from this market. So if the apartment gets empty, they sell or they even try to sell it with a rent and the owner then trying to get the rent out, something which increases the homeownership market here in Germany over a period of a couple of quarters now. So all this said about the renting market, just a perspective of affordability is on a positive trend. We see stable interest environments for five quarters now, a massive change to 2023, you can say. We see a significant supply in units that for sale, something which is a massive change compared to the period of 2022 and earlier, where there was a lack supply side always. We still see high new construction costs, which doesn't make it easy to build something new, but doesn't affect the existing property market. And a positive thing, we see rising incomes, thanks to, let's say, a labor shortage, especially with skilled labor. And this is the core target group of our business model. So homeownership is linked to people with significant income, middle class and upper class. And they usually were still renting, and this is changing right now. So what didn't change in the first quarter is regulation. The leaving government didn't focus on the housing market. They are aware – completely different motivated and areas where they were looking for. So they increased in density and in quality, the regulation around housing, which was negative and especially on the construction side. As well, they reduced the support programs for middle-income people to buy something. So let's say, we couldn't imagine a worse regulatory environment than we saw in the last years. So this is now over. We have a new government. Voting was in the end of last year. First quarter, they spent finding a new collision. Since April, we have a new collision. So people are waiting now for the necessary decisions to come to enable more families to acquire their home. So this influenced the first quarter market, you can say that people were waiting, but still number of transactions are up. Okay. So this in, let's say, in charts and numbers, what does it mean? Stable interest environment. First quarter, a little bit more volatile than the last year, but in a similar range. Number of properties for sale publicly on record high level, number of units for rent on a record low level and slowly trickling up real estate prices, but still a still a massive gap between new construction and existing homes. So there's 15% discount compared to the situation of three years ago. So in this market or in this environment, the mortgage market the mortgage market kept recovering here seen with the black line. You can say the mortgage market gets -- is already in the area of the 2018 numbers now. So soon, we will see it in inflation adjusted in a positive, let's say, above the starting point here five years ago. So closing the gap to the pre-crisis time. Europace in the same time outperformed the market. This is not new for you. Last quarter, we gained 34% in volume on the platform compared to the first quarter of 2021. Bundesbank showed even a even a slightly stronger growth, 37%. It's still a little bit puzzling for us where this number comes from. We see parallel that Schufer [ph] reported a 21 increase in applications in newly confirmed mortgages. With an increase of the loan amount of something between 5% and 10%, this would come up to something below 30% market increase, but not 37%. So something inflates the -- some transactions inflates the Bundesbank number this quarter. So we expect that the market is slightly below 30%, and we gained 34% in volume in this quarter. We gained this across all areas. Dr. Klein, our own franchise network, which is a really good indicator of the market development is plus 30%. We see a strong performance of the brand. Dr. Klein had the highest number of leads generated online in history, so even more than in 2021 and 2022. So strong lead generation. And first quarter, finally, again, fully loaded workforce of advisers in this franchise network. So every lead gets distributed, every lead is taken care of, but the people are busy. The advisers are busy as well. And that's good. From here, we need to grow with additional advisers now. And scale and keep scaling Dr. Klein back to new record high levels. So slight outperformance of this development, which is more or less in line with market, I would say, is savings banks, usually strong outperformance. We have here a lot of joint IT projects with our joint venture partner, Finanz Informatik, which are in rollout. So we expect an acceleration of market share gains here compared to this first quarter here. A lot of positive things going on, a lot of new integration in this sector is rolled out during this year. So outperformance, again, cooperative banks, they keep migrating to us and they keep taking Europace super serious as well in their sector, even without a joint venture with the centralized IT service provider. But here, Bausparkasse Schwäbisch Hall is a strong supporter and opens up more and more doors in the sector to c. And yes, cooperative banks who are using Europace are outperforming their peers. This is proven by this sector that there is a massive positive performance of advisers using Europace compared to the traditional work environment in their IT service provider software. So this ends up with a total of 34% for the whole platform. Again, we are on track with the recovery and hitting to new records. So when you look on the perspective of what are the mortgages used for, which we transact right now, then you see that especially the purchase market where existing properties are sold and financed is the base of the recovery. Here, we saw the second best quarter in our history already. Just the 3 years -- the exceptional great quarter of the beginning of 2022, where interest rate changed from below 1% to more than 3%, exceeds the current volume. So you see that there is market share gain plus an underlying change in the market because without the change of conduits from being rented to being occupied by homeowners, this would not be possible. And there's a massive amount of units to be transferred between renting market and homeownership market. So, what doesn't contribute to the positive recovery of the market is new construction. We are still down 50% or more than 50% below the 2022 first quarter, so the peak and roughly still 50% below what we saw before. There are 2 segments in this new construction. One is single-family houses. There, the recovery is already slightly better. We talked there about roughly one-third below precrisis level, but still distressed. What is massively -- what we are massively missing still are activities from developers and sales to sales of newly built conduits in multifamily houses in metropolitan areas. The reason is that this massive change in demand in 2023 -- in the second half of 2022 and 2023 stressed this whole developer market, and they are still not recovered from this stress. So they are happy if they finally sell their open projects and the last not units that they finish their projects. And there's still no movement in this market to really start a lot of new projects. This is well linked to the nervousness of banks. So the capital requirements are still high just by [indiscernible] were changed to 1st of May slightly, but there's a high capital requirement to finance development. So they are still working out their existing portfolio before starting something new. And this new construction is missing in the market, and this keeps, let's say, rising the tension in combination with the net migration to the metropolitan areas where exactly these units are missing. Okay. Then still far below traditional volumes is the refinancing market. We still are in this base where all mortgages, which were closed longer than 10 years, fixed interest periods don't need to be refinanced and have a lower interest rate than you currently can get. This will change latest in 2027. But for now, this part of the market stays on an extremely low level. And as well on a surprisingly low level is everything which is modernization, decarb of the housing sector here in Germany. Even when it was an ideological goal of the last government, they didn't design the subsidy programs at the rule for modernization in a way that it's possible. So there is a historic low level of investments there, even when -- thanks to our climate goals, latest in 2045, German or 2050 EU, we need to decarb our housing sector and massive investments needs to be done at every quarter which passes increases the volume that needs to be invested to get to a decarb. Okay. From a perspective of sales channels, the growth on a little bit longer perspective, the last nine years, you can say here, we have a similar volume in the market, nominal, not inflation adjusted, but nominal value, what gained volume was brokers from roughly 20% to roughly 30%. So 50% growth within this market for brokers and this in the core powered by Europace, and we even took incremental market share here. In addition, we were able to expand our reach as well to the cooperative and savings banks, both getting closer to 25% share of their new generated mortgage volume comes via Europace or is transacted via Europace solutions in their branches. So this is really a very positive development that we keep growing in both of the sectors as well, strong so that our overall coverage of the market is getting better and better. So only slightly, negative perspective on the real estate mortgage segment is property valuation. You know next to the massive market changes in 2022, there were massive regulatory changes and the mismatch of our strategy to enter this market with the regulatory and market environment. We needed 2023 to, let's say, recover from a massive mismatch of resources. 2024, we could focus on optimizing the business model, building technical infrastructure, IT solutions for the new regulatory environment. And now we see that step-by-step, Value AG is recovering from its massive losses, which it made in 2023 and still significant in 2024, and we reduced these losses and slowly work us in the direction of breakeven. In total, for the segment, it was a great start in the year. If you exclude the losses from Value AG, we talk about €14 million in EBIT for the first quarter. This was the best first quarter ever. 2022 was even better, but it was one of the strongest first quarter that we had here already in recent history. And so the growth track keeps us is live. And focus for this year is maximize profitability out of this market share -- market development, and the market share gains. So for now, we focus on realizing everything what we built already and finish the projects and bring innovation to the market. to optimize our profitability, still keep focused on profitability, and this works out very well. So next segment, financing platform. First, market housing societies. This is -- they are pretty similar, you could say, to the homeownership market with a massive change. They are the ones who provide renting units and the massively regulated renting market is a significant problem for them. Second is they are usually not buying existing properties; they are building them and keeping them forever. And with the current environment of construction regulation, in combination with the rental regulation, this is not feasible. So they massively reduced their investment in new housing. And the same regulation, like for the homeowners as well as the housing associations in the decarb sector, saw the last government wanted it so that something happens there but didn't provide the necessary regulatory environment. And so they can't invest in decarbonization in the way that they would need to, to meet our goals. This all leads to record low investments of this sector in housing last year -- whole last year, but as well the first quarter. I can't remember a time where this sector, which has a massive impact on German GDP and has a massive impact on German housing in the metropolitan areas, was so -- lacked so much attention of politics and was so reluctant to, finally be able to build again or modernize again apartments. So they are waiting for the new government now to set the right or create the right environment. So we talk about deregulation, and we talk about subsidies in the combination of both. The new government promised this. And in other sectors, on the first day the new government was established, now that something happened already. Here, it's still, let's say, the new ministry is in place, but no action was taken by now. We hope that in the next months, we see here actions; then this is necessary for the German housing market. While they can't invest in their housing stock, what they can do is invest in their technical environment. And there, we are right now super successful with rolling out our new ERP platform for them. Our goal is to create a perfect open IT Infrastructure for them, where we easily can help them finance and ensure their portfolios. They can rent their units in a very efficient and modern way in an IT environment for their customers and their employees, which is modern, something which is new to this industry. And over a period of -- you see here six years now from piloting our system, we are generating traction and getting relevant for this market, taking market share. So a nice success story, still something we invest millions in, but with a recurring revenue model, something where for now, we expect even next year already a breakeven. Next topic; German Mittelstand Corporate Finance, something where we saw a lift-up in build project volumes, but still on financing rules and subsidy rules from the old government. Lots of volatility and decisions still in this transition from the last to the new government, so let's say, call it, low-margin projects for us that had to be closed by the major part of German industry is waiting for the new government to establish a new set of regulation, power this with fitting subsidies to bring Germany back on track out of the recession to back on growth track. And with this, we expect for the next quarters to have a massively change in this environment here. And -- there's a lot -- there was a lot of promise from new government, and we see in other areas, migration, international relations that they are fulfilling their promises. Let's hope that they are fast, yes, well in the business environment. And it's necessary for recovery of the German industry. So, last area as well a market with, let's say, struggling environment in the first quarter, personal loan business. We have multiple quarters of recession now here in Germany, a light recession, but it's recessive. So banks hesitate to increase their loan portfolios. Consumer hesitate to take new loans to -- for consumption in the end. So market is down. We are slightly up by gaining new partners, migrating new partners on the platform and new sales structures of them. So, we keep slightly growing, but the environment could be massively better than this what we see right now. As a result, double-digit growth, yes, good. Massive investments, especially in the housing industry and the ERP platform there. So, small decline in profitability for the first quarter. But what we need here is a better market environment, not a recessive market environment for all these credit markets that we provide here. Last segment, insurance industry, where we cover three areas with different business models. So in the core three platforms for personal insurance, occupational insurances and industrial insurances. We saw -- see small growth in all three when we look on the transaction volumes or, let's say, volumes on these platforms. We see even more projects going forward in the right direction. What we still miss is progress in the monetization. So that's why, let's say, a slight level of disappointment for the first quarter numbers. We expect this to improve during the year that is -- that we are back on growth track here for the full year and even getting closer to a double-digit growth in all numbers. In the end, we are still in the transition from a very heavy investment phase an incremental gain in profitability. The first quarter was not in line with our expectation. Okay. So for the group in total, we are -- we see a strong first quarter in line with our expectation and the recovery of the mortgage market. On a longer perspective, you see that we are well ahead of last year, getting closer to the record year of 2021. Let's see how close we end up there, yes. This is for next year we expect a new record year. For this year, it's closing the gap, you can say, and improving, especially our profitability in a systematic stable and recovering market. So there we are market and recovery of the market. Inflation adjusted, we are still far below the volume of a market which we saw in the first decade of this century. Since the European immigration and massive labor movement to Germany, this was a growth market. And you see that we are still far below this long-time growth trend where housing demand was high in Germany. What we didn't see in the second decade of this century was the transition from renting to homeownership market. And this is a core source of additional volume for us here in this market that professional landlords or small landlords sell to homeowners finance with mortgages via our banking system and this way via Europace. In addition, we expect the recovery of the new construction side from the current extremely distressed and low level. We expect a recovery of the refinancing, and we expect that the goal of decarbonization of our household stock needs €30 billion of investments per quarter to be financed in the end by mortgages. And with all this said, we expect the mortgage market from the current €60 billion level to uplift in the area of €75 billion to €100 billion. So a higher level than we previously saw and you can say, returning to the growth path, which we were in, in the last decade. This can still take some years, but we don't see another macroeconomic perspective on the German mortgage market in this. This said, short-term outlook, we feel confident with the 2025 forecast, which we gave two months ago. First quarter is perfectly in line with our expectation. And for the upcoming years, we see double-digit growth in the top and bottom line. I would hand over now to Jan to moderate the Q&A session in case there are some questions today.

Just to let you know, we now start the Q&A session. [Operator Instructions] Also put on and write down your questions in the chat and I will just read it and ask Ronald. So These are the ways how we can create the Q&A session. So we will just add it down here. Put the instructions in the chat. You can look up read. So we will wait a moment and see if we have some questions.

Now we have already some in the chat here, Jan. Someone posted already a number of questions.

I see, I see. Okay.

I can start.

And you see as well. Okay. Go.

Yeah. I see them as well. So first, the savings banks and our joint venture with Finanz Informatik. There are two major rollouts right now. One is the integration of Europace in the work environment of mortgage adviser within the IT service platform of Finanz Informatik. So we get a better integration. So it's easier to transition from the traditional process to the Europace process. And there is an integrated version as a choice for every savings bank in the future offered by Finanz Informatik. This is a major step forward to get more savings banks accepting Europace as -- or the brokerage model as a market approach. And the second is that we provide together with Finanz Informatik a so-called Kompetenzteam Immobilie. So a solution end-to-end with the consumer to manage your properties and the linked mortgages to this within your environment, your technical environment, which you as a consumer use from your savings bank from Finanz Informatik. So the touch point of the mortgage business, the digital touch point is now jointly proposed to the consumers. And so this, again, will enable savings banks or will attract more savings banks to use the Europace environment for the advice process or even an automated mortgage transaction process, which we provide with [indiscernible]. So Value AG -- second question, Value AG recovery. For now, we don't expect for this year breakeven. We expect breakeven for next year, even with the positive traction which we saw in the first quarter. It's still €0.5 million -- it was still €0.5 million in loss in the first quarter. So there's still, let's say, something to work out. And even when we are a little bit ahead of our plan, there is still -- there's a certain level of uncertainty. So for now, we expect the losses to decline in this year, but no breakeven for this year. Let's hope that we get surprised here. Cost inflation in the financing platform. Yes, I talked a lot about the success of the ERP platform for the housing association. This comes with an additional investment necessary in project management to onboard all these new clients. So we have an acceleration in our pipeline of new clients and to migrate housing associations to our ERP platform is a massive human labor-intensive project we have to do with each of these clients. And for now, all starting places we call them. So all migration slots for this year and even next year are already sold. So the pipeline is long, and we have to expand massively our resources to migrate this housing associations, expecting an ongoing higher migration need in the near-term future. So it means that we even create more drag in our direction and take more market share in the upcoming years. So further investments, let's say, it was a significant increase that we saw in the first quarter. There will be more increase in OpEx, you can say, for migration if the demand keeps as high as it is right now. So with the current inflow of new clients, we really struggle to, let's say, not disappoint our -- this industry, this extremely integrated connected industry with a too long waiting list for migrating to Wowiport. So let's say, for now, we reach a new level. We need to bring the people productive in the project. This takes some time. But for the upcoming years, we may expand even more. A key difference between these two KPIs, which we provide for the personal loan business. So one is transaction volume on the Europace system in personal loans. And this transaction volume comes from -- usually from Europace partners, advisers, which use Europace to broker personal loans. The white label offering is a subsidiary where we offer banks the work of the adviser as well and the broker is third-party loans for their clients. So this is a BPO outsourcing business, you can say, where we generate additional commission income plus transaction fee for the Europace system. So the white label brokerage volume is part of the overall transaction volume of Europace. But the business model are slightly different. One is commission-based and includes the third-party commissions is what we pass through to the partner who provides the client, so banks usually. And while the others solely a transaction fee, which is a loan based, but much smaller than the brokerage fee. Okay. This [indiscernible] all four questions answered, I think Yes.

I hope so. And if not, [indiscernible], feel free to just drop a short note, and we will follow up on this. But there's another question, which is a pretty long one, so I will try to shorten this a little bit. The question is, Ronald, you mentioned that you don't see a sharp decline of the German mortgage market. But against the background that the German bonds has increased. Why is that?

Yes. Okay. I didn't dive deep there in the presentation. So what happened in mid-March was that the German government -- let's say, not government at this time, future government proposed and announced a massive additional debts for German government. This sent the government bonds up -- interest rate 10 years, 60, 70 basis points. Mortgage rate went up between 35 and 50 basis points parallel to this. For us, this short-term is it shortened the advice time. So people close their open mortgage applications faster, and we saw a positive impact in March for this. After this, usually, this -- it's so far normal. It went -- it normalized again, it went down. And we saw at the beginning of April, and these are public numbers as well, for instance, provided by Schafer [ph], we saw a drop to, let's say, previous year level. So from plus 20% in application of 2021 to more or less zero compared to last year for a couple of days surrounding Easter. For now we see from this a recovery again. We saw trickling down interest rates since then. So all what was increased in interest rates trickled down later again. Now today, we saw a sharp rise of 10 basis points again. So we have -- we are in a slightly more volatile market. This is nothing that impacts the housing decisions anymore. When you go back on the slide where we show the interest rate development, this is all within this what happened last year as well already, not as fast as this year, but we are, let's say, more or less moving sidewise with the interest rate. So nothing that on a longer-term, not talking about days or a couple of weeks, will affect the willingness of Germans to borrow their first mortgage to finally get a home for their family. So let's say, in general, we expect mid-term declining long interest rates in Europe because of the general macroeconomic environment, where we don't see a massive growth. We expect inflation to be under control and with this ECB to lower short-term interest rates and gaining as well trust for the long-term interest rates to trickle down again, something which we saw already multiple times now with Trumps, let's say, Putin and Trumps international politics, we see a higher level of volatility, but nothing is going to change that Europe is not a super growing area with high interest rate environment anymore.

Okay. Cool. We have a next question, which is on ERP system, so ERP software. So this is on the housing association on the Institutional Housing Association. It seems that the migration of customers is the bottleneck. Are there any plans to team up with some IT service provider, some third-party that we can speed up this process?

Yes. It would be great if possible. We checked it out. But let's say, to migrate to our platform is a skill set, which, let's say, core needs to be developed. And it needs to be developed if we do this by ourselves or if we train someone else. So if we hire the people or we train third-party people, it's a pretty similar effort. And this is not an area where there is a high level of skills available because the migration volume in the past was limited in this market. So that's why there is no existing market for specialized smaller entities who could help us to ramp it up, unfortunately. So we see that we can still improve in efficiency in the processes and with again and again, migrating clients from the same previous solution to our platform is something where we get better and faster. But this learning curve we need to go through by ourselves.

Okay. Thanks for this. It seems that we do not have any questions right now. Just a reminder, you can -- there's another one. No, it's just a thank you, which is also welcome. But it seems that we do not have any additional questions. Just as a reminder, once again you can just type it in or use the raise your hand button whatever is more to your preference. We wait another second, but it seems we do not have any additional questions. So I'd like to hand over to you, Ronald again for last words.

Yes. Let's meet again in three quarters -- sorry, in three months for the half year results in beginning of August. Up until then, we will be busy optimizing our profitability and using whatever the market offers us on this path. Thank you. See you then.