Hello and Welcome to the flatexDEGIRO Q1 2025 Analyst Call. Please note this call is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. I will now hand you over to Achim Schreck to begin today's conference. Please go ahead. Good morning, everyone. Many thanks for dialing in, and welcome to our analyst call relating to our Q1 2025 results, which we published yesterday evening post-market close. I'm Achim Schreck, and I'm heading the IR department here at flatexDEGIRO. With me today, I have our CEO, Oliver Behrens, as well as our CFO, Dr. Benon Janos, who will lead us through today's presentation. We also have with us 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 of the presentation before we open up for your questions. 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 the Q1 2025 analyst call. Benon will go into detail about the Q1 in a moment. I would just like to highlight a few key points. Q1 was our best quarter to date in terms of revenue and earnings. We increased revenues to EUR 146 million and net income to EUR 42 million. The increase in commission income by almost a third to EUR 98 million is particularly noteworthy. However, this development should not really come as a surprise. Volatile markets always lead to high trading volumes, which is a value driver for any broker. What is probably more surprising is the fact that interest income remained almost stable at EUR 43 million despite lower interest rates. In short, what we lost on interest rate levels, we made up in volume of our margin loan book and in higher cash deposits of our customers. We also have our cost under control. While personnel expenses rose on the back of increased expenses for long-term variable compensation components, this development was much linked to the strong increase in our share price. Marketing expenses were rather stable despite a further acceleration of customer growth, while other administrative expenses fell by 8%. In this operationally busy quarter, we have also done well in our other areas. We have again been awarded the best online broker by thousands of retail investors in key markets. We have successfully divested the remaining real estate loan engagement, a legacy that is clearly non-core to our business, and we received the MiCA license, allowing us to internationally roll out of our crypto offering. Before I get to these achievements, let me briefly comment on the trading activity in the Q1. We processed 19.5 million transactions for our customers, which is over 20% more than in the Q1 of 2024. This increase alone is impressive, but it even further intensified in early April. In April, we recorded a total of five trading days that ranked among the top 10 busiest trading days in terms of volume. On the 7th of April 2025 alone, we saw a total trading volume on our platform of over EUR 5 billion, a new record for flatexDEGIRO. By way of comparison, we achieved an average trading volume of slightly below EUR 1 billion in 2024. The days following the announcement of the tariffs by the U.S. government were extremely volatile and saw heavy trading. Not all providers in the market were able to cope with the sudden surge in activity without any disruptions, but we were. We are proud of the fact that this high throughput did not impair the performance of our systems. Retail investors are clearly aware of these differences in performance between brokers, which is also reflected in the number of new customer additions since the beginning of April. In this respect, I also see the many awards we have received as confirmation of our quality promise. For example, DEGIRO again won multiple international awards such as the Gouden Stier in the Netherlands, and flatexDEGIRO was again voted the best online broker in Germany by almost 90,000 investors. For the first time as the best crypto broker, even though we only launched our offering at the turn of the last year. Crypto is also the key word when it comes to implementing the strategic initiatives we outlined to you at the end of February, which are progressing well. We currently offer trading in 20 cryptocurrencies exclusively to flatexDEGIRO customers in Germany. Around 8,000 customers are active here to date. By the end of March, the trading volume had already exceeded EUR 100 million with around 50,000 trades. Considering the nature of the products and the time since market launch, this is a good result. We are now preparing to launch in four additional major markets: France, the Netherlands, Austria, and Spain. This will make our products available to around 2 million customers. The Supervisory Authority, BaFin, has already granted us the license for Europe-wide trading based on the EU regulation for crypto assets, so-called MiCA. We are now making the final preparations. We want to be the leading investment platform for building wealth. This includes a broad product range for our customers, which we are making even more attractive with the rollout of cryptocurrencies. At the same time, new products and services are important drivers for the sustainable growth of flatexDEGIRO. Before I conclude my presentation, let me quickly provide some further details on the full divestment of our real estate credit loan portfolio that I already mentioned earlier. The alliance of our ongoing efforts to streamline our operations and focus on our core activities and getting rid of some legacy alternative credit and investment engagements that are not related at all to our core business. Our alternative portfolio was primarily built during the negative ECB rate environment. Net net, we have not lost any money with this portfolio, but we can surely deploy the capital better going forward. Therefore, we continue to divest these non-core activities without any pressure. In Q1 2025, we signed and closed a purchase agreement for a real estate credit loan. The sale price of the transactions reflected in the IFRS book value. The repayment at the end of March has led to a significant improvement in our NPL ratio by March 31 this year. Moreover, one further comment before I close my remark. Due to generational shift, our current Chief Risk Officer of flatexDEGIRO, Dr. Matthias Heinrich, is stepping down from the management board at his own request. Matthias has been a member of the management board of flatexDEGIRO Bank AG since October 2022. He has focused on the further development and harmonization of the risk function and its alignment with regulatory requirements. We would like to thank Matthias for his contributions over the last year, especially in the light of resolving all major regulatory findings. We will announce his successor in due course. It is my pleasure to hand over to my colleague Benon for further insights into our financial performance in Q1 2025. Thank you. Benon, t he floor is all yours. Good morning, everyone, also from my side, and thanks a lot, Oliver, for your kind remarks. Now on to our commercial performance in the Q1 of 2025 on slide number 12. Customer additions amounted to approximately 139,000, an increase of 15% year-on-year. Over some busy trading days in the first months of the year, we always ensured unrestricted access to our trading platforms. This seamless experience, in our view, has contributed to the increased account openings during this period. We were always open for business. Our commitment to provide a reliable and efficient trading environment has been strong. We understand the importance of stability and accessibility, especially during peak trading times. The surge in account openings in the Q1 is a testament to the trust and confidence our clients have in our services. Assets under custody reached a new record with close to EUR 76 billion, strongly growing 31% year-on-year and 6% quarter- on- quarter. We will dive a bit deeper here in a second on the next slide. In the Q1 of 2025, we observed a strong increase in settled transactions to 19.5 million, growing 21% year-on-year and 16% sequentially. This surge can be attributed to heightened market volatility and uncertainty affecting global equity markets during the first months of the year. This was driven by several factors, including geopolitical tensions and tariffs announcements, as we all know, prompting investors to adjust their portfolios more frequently. As a result, our platforms experienced a notable uptick in transactions. As just mentioned, our assets under custody reached a new record with around EUR 76 billion. We split this, as usual, into two main categories: securities under custody of EUR 71.1 billion and cash under custody of EUR 4.6 billion as of March 2025. The growth in cash under custody also reflects the heightened market activity and volatility. We benefited from this increase on our interest income line. However, it is important to note that this increase may be temporary. Some clients have opted to sell their holdings and have not yet reinvested their funds. This cautious approach is understandable given the current market uncertainty and volatility affecting global equity markets. We therefore assume our cash levels may normalize over the next quarters. Nevertheless, let me also mention that it is very encouraging to see that customers keep this currently undeployed cash on our platform. Securities under custody also grew steadily by 6% quarter over quarter and 31% year-on-year. This growth is attributed to both the new investments made by our customers and the slightly higher index levels observed during the Q1 of 2025. The increase of both securities and cash has been supported by very strong inflows onto our platforms. As you can see on Slide 14, our clients continue to deploy cash onto our platform, resulting in positive net cash inflows of approximately EUR 1 billion per month on average in Q1 2025. This represents a significant increase, with net cash inflows totaling EUR 3 billion for the quarter, up 69% year-over-year. This is the highest quarterly net cash inflow we have seen in our company's history. Existing customers have been a major contributor to this growth, accounting for approximately 80% of these net cash inflows. However, it's worth noting that in Q1 2025, in quotation marks only, "89% of net cash inflows were reinvested". This indicates that some clients are holding onto cash, possibly due to the current market environment and uncertainty. Cash under custody increased by EUR 0.4 billion to around EUR 4.6 billion in Q1 2025. This growth was driven by both customer acquisitions and an increase in the average cash per customer. Additionally, we experienced record net cash inflow days in April, further highlighting the confidence our clients have in our systems. These record inflow days are a testament to our robust infrastructure and the reliability of our services, even during periods of heightened market activity. Now, as usual, let's take a look at our revenue split in the past quarter. In Q1, revenues grew 19% year-on-year. Commission income increased strongly by 31% year-on-year, which is mostly attributable to a continuously growing customer base and higher commissions per transaction. I'll turn to that in a second. Interest income declined by just 1% year-on-year and 3% sequentially. This was less than what we previously anticipated. Higher amounts of cash under custody and a slightly growing average margin loan book almost fully compensated for lower interest rate levels. With the normalization of the overall market environment, we would also expect that cash levels may come down a bit again in the coming quarters. As you can see on Slide 16, we were able to generate an average commission of EUR 5.02 per transaction in the Q1 of 2025, with an 8% increase from the EUR 4.64 in Q1 of 2024. Sequentially, the commission per transaction grew 10%. Several other factors contributed to the increase in commissions per transactions. As you already know, Q1 commissions per trade are generally meaningfully above due to seasonal effects. For example, the so-called connectivity fees that are typically charged in January or February each year. The total connectivity fees charged grew year-on-year with an expanding client base. As we have shown earlier, this quarter has seen quite a significant increase in settled transactions of more than 20% year-on-year. A quarter with higher trades is generally impacting commission per trade positively because the proportion of ETF savings plans is lower compared to quarters with less trades on a relative basis. Also, trades in non-euro denominated stocks, such as U.S. equities, tend to have a positive impact on the commission per transaction due to the FX conversion that often applies. Moving to Slide 17, we have portrayed our different cost items and their development over the past quarter. Let me dive a bit deeper into the different drivers for each cost item. Personnel expenses rose from EUR 26.2 million -EUR 32 million in Q1 2025. However, these higher costs are much attributable to higher expenses for long-term variable compensation components, which rose from EUR 1.4 million in Q1 2024 to EUR 5.1 million this past quarter. This was driven by revaluations due to the quite strong increase in the share price and also the issuance of new options as part of our existing share option program. Current personnel expenses rose by 8% to EUR 26.9 million. This reflects both salary increases and higher social security contributions. Marketing and advertising expenses are seasonally always highest in the Q1 of each year. We were able to keep marketing expenses relatively stable compared to Q1 2024, despite the recent crypto launch in Germany and our accelerated customer growth. Other administrative expenses amounted to EUR 11.7 million, decreasing 8% year-on-year and 17% compared to the last quarter. This is a welcomed trend, and the reduction reflects our ongoing commitment to cost management and operational efficiency. We therefore saw a meaningful reduction in costs related to professional services, legal, and consultancy fees. Moving now on to our profitability. We were able to close a strong quarter on the bottom line. In Q1 2025, revenues increased by EUR 19 million compared to Q4 of 2024, fully translating to EBITDA, which also saw a rise of EUR 19 million and reached EUR 69 million. This represents a growth of 37%. Moreover, net income increased by EUR 16 million versus Q4 to EUR 42 million. However, even though we have had a strong start to the year, we have decided to stick to our 2025 outlook. This decision is driven by several factors that introduce a level of uncertainty to our future outlook. The first months of 2025 have exceptionally benefited from a high market volatility, much driven by uncertainty around international tariffs and other geopolitical events. We believe it is prudent to not just extrapolate such developments into the future. We rather believe that we will see a normalization of trends again, and there is also a certain chance that things can turn the other way. This is true for the commission side. It's also true for interest income. The currently heightened cash levels, to some extent, are a reflection of these uncertainties. In a normalized environment, very likely they will, at least partially, be reinvested again. We also expect further rate cuts by the European Central Bank. This is why we maintain our current guidance. This cautious approach ensures that we remain prepared to adapt to any potential challenges over the next weeks and months. Staying somewhat conservative on the guidance has served us well in the past, and we would like to keep it that way. With that, we would like to conclude our presentation, and it is my pleasure to hand back to Achim. Thank you, Benon, and thank you, Oliver, also for your remarks on the development in Q1. We are now very happy to take your questions on the Q1 financials and hand back to the moderator. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question on today's call, please signal by pressing star one on your telephone keypad. Again, that is star one for your questions today. Up first, we have a question from Ian White from Autonomous Research. Please go ahead. Your line is open. Thanks for taking my questions. A few for me, please. First up, can you provide a bit of color around how much of the inflow that you're seeing is recurring in nature? I'm assuming it's kind of a relatively low proportion of the EUR 3 billion you saw in 1Q. But how much is coming in and being invested into monthly savings plans, for example, or regular customer commitments that we might think of as enduring, please? That's the first question. Secondly, could you just provide some more thoughts around the pricing for margin loans? I think I'm right that you've not been cutting the yields there so far, but how do you see it as we get further into the rate cutting cycle? If you were to cut prices, do you think you'd get more volume, perhaps? That's question two. Just finally, I wonder if you could say anything about thoughts or progress on the deposit products and securities lending products you talked about with the strategic update. What is the latest thinking with respect to the introduction of those, please? Thank you. Thank you very much, Ian. Let me start with the first question on the regular inflows, and then I would pass over to Oliver. On the monthly basis, we approximately have EUR 250 million of regular inflows linked to savings plans and the likes. Your question was how much of that was in the quarter. Of the EUR 3 billion, approximately EUR 750 million, give or take, were attributed to regular inflows. On margin loans, I'll just start and then maybe hand over to my CEO. We did actually a small cut at the beginning of the year. It's been the only move that we have done on the interest rate for margin loans. With that, I would hand over to Oliver to give you a further outlook and also progress on the deposits and sec lending products. Yes. Thank you, Benon. Hi, Ian. I would say it's very clear. We will also follow to some extent in the rate evolvement for the rates on the margin loans, the development on the interest side. We have made one step, as Benon said, at the beginning of the year, so far as I remember, and we will monitor the situation. At the moment, the usage of margin loans is pretty reasonably interest rate insensitive in a way. It has not moved based on these recent rate numbers, of course. We have to remain competitive with our offering, and that's why we have to monitor the market situation and relative to the competition and see where we are. We are very close with our clients, and we will react accordingly in the next couple of weeks if rate cuts go further. At the same time, I think we can also all appreciate that what is happening in the markets, especially from the U.S., inflation expectations are rather higher than lower relative to last year, which could result in interest rates stabilizing or, let's say, flattening out or interest rate cuts flattening out over the next couple of weeks. That all depends on how the relative situation of the economy is in Europe relative to the U.S.. There has been a 10% move on the euro/dollar. That all has implications on potentially different interest rate and inflation forecasts. Sorry for the long answer. We will monitor the situation closely and are prepared to take further cuts if that's needed. Second question, new products. As in our outlook in February, I think we also spoke about the longer-term or medium-term outlook. The short importance in the next couple of weeks is the rollout of the extended crypto offering in the four countries. As mentioned by myself, that is something we expect in the next four to six weeks or so. It depends on the next steps. That is the most important topic we intend to roll out. We are working in parallel on the deposit offering, also on the deposit as a service. I think we are in good progress with some of the clients, as well as sec lending and our own deposit offering. I think we will be more precise somewhere over the summer. That's great. Thanks very much. It's a pleasure to have you. Thank you. Our next question now comes from Marius Fuhrberg from Warburg Research. Please go ahead. Your line is open. Yeah, thanks. Two questions for myself, please. First, let me add to the crypto offering or the new markets and crypto you mentioned. Do you expect to enter those markets with similar pricing, so starting from 0.5% of the volume as in Germany? The second question, you mentioned the high revenues per trade in U.S. assets. With the recent volatility, many investors turned their interest in Europe again, so less focus on the U.S.. Do you see something similar in your customer accounts? Are your customers also turning more towards Europe investments again, and is less money allocated to the U.S.? Could that also impact revenues per trade? Okay. You saw that our crypto offering in Germany, in terms of pricing, is one of the lowest offerings in the pricing comparison, which was done by an independent study as well on our side. We try to be a price leader, or at least at very competitive prices in the respective markets. At the moment, we are looking at what is happening in the markets, and you can be assured that we will have competitive pricing in the four markets. Every market is slightly different. There are still pricing differences. The Dutch market, for example, is also a bit lower than the German market at the moment. We will not announce the pricing too much time ahead of our starting date, not to confuse anybody or not to give too much information to the competition as well. Sorry for being not more precise. Yeah. Do you want to say anything, Benon, on the high revenues of the trade? Sure. Your second question, which really was two questions, if I look at it. Let me start with the revenue per trade, which was indeed quite high. Every Q1 conference call, I always remind the audience that we book some special connectivity fees in the Q1. They lead to a jump in the average commission per trade. In general, we will see lower average revenues and commissions per trade going forward. However, we also benefit from our investors getting more wealthy. We benefit from the fact that our average ticket size is rather going up and not down. Certain elements, such as the foreign currency conversion, then tends to lead to a basis point effect. Do we see an increased appetite in Europe? Yes. We see it, in fact, both in our interactions with investors and, of course, on our platform. A nice figurative picture is that last year, stocks like Nvidia tended to be the top-traded stocks on our platform. If we look back over the last weeks and months, it is mostly defense stocks, European defense stocks, stocks like Rheinmetall, which top the trading table. We do see a qualitative shift into Europe. For us, of course, that is always good to see when focus shifts. Who knows, maybe one day we will see a focus back. In general, we do observe a small trend there, yes. Okay. Thank you very much. If I got it right, then you see this trend, but it should not affect the revenues per trade on a general level by too much, at least maybe one or two basis points, but not too much, right? We have not done the calculation to be very precise. U.S. remains by far the largest capital market in the world with the by far highest market cap. It is not like our clients do not own U.S. stocks anymore. Sure. Thank you very much. Thank you. Once again, as a reminder, that is star one if you would like to ask a question today. We will pause for a brief moment. That is star one for your question. We now take our next question, which comes from Christoph Greulich from Berenberg. Please go ahead. Your line is open. Yeah. Good morning. I hope you can hear me okay. Two questions from my, p erfect. Two questions from my side, please. Firstly, on the capital allocation, if you could share your latest thoughts. I think your current buyback program is almost complete now, so just wondering if there are any plans to launch another one. The second question is regarding the customer behavior in April. You gave some hints and color on, yeah, the activity levels and general customer behavior during the period of high volatility. I was just wondering, after the Easter break, when things have, to some extent, settled down somewhat, what kind of behavior have you seen then? Was it still an elevated one? Was it back to normal? Was it maybe even lower than what you have seen in Q1? Yeah, any color there would be appreciated. Yeah, maybe I'll start with the capital allocation. I understand that this question is put on the table as we are coming to a close with respect to our current program. However, we also commented previously on the February strategy outlook that we really try to get a full picture of the current growth initiatives and, more precisely, the impact that they will have on our capital needs. We generate a lot of cash. We are fully aware of that. We stick to a small dividend, the same one that we paid out last year, which we know is of rather symbolic nature. The product launch, such as the introduction of term deposits onto our own platform, will lead one way or another to an increased level of capital requirements that we will easily be fully able to cover from our existing organic basis. The honest answer is it's a bit early to tell. We do not need another AGM approval if we would move with more share buybacks, but that's something that we will be more specific on at some point in the second half when the capital planning has really been fully made, when we have the launch of the sec lending product, but more importantly, when we have clear plans for the own term deposits. Sorry, just to—second half, not Q2. I apologize. Second half of the year. Thank you, Achim. The second question of customer behavior in April, I can start with a few sentences and then happy for Oliver to fill in. After the top trading days, we have seen, like always in life, something in the middle. We are off from the heydays when the Standard and Poor index moves 5% within five hours. We have rather seen levels which are higher on average than we've seen, let's say, last year. Clearly, the hyperactivity has come down a little bit. In a few days, you'll see the April numbers, and you will be able to make a good comparison as to where the business was. Yeah, I think I can only echo what Benon said. We basically received cost-free marketing from the U.S. in a way with strong volatility in the markets, and that helped. It is kind of normal, as we also mentioned, that this is not something we would just project into the future. What is clear, it has helped also customer growth, and that is reflected in Q1 already, and this has continued. The numbers will come in the next, what, 14 days or so. What is really interesting in terms of customer behavior is normally in those days, you would see the number of accounts being closed going up, for example, because clients might get frustrated, some lose money, and so on. That has really not happened. I was impressed by those developments. Looks like that the education and the financial support and the trainings and so on help in being maybe less speculative for some clients. It has also led to increased customer growth because there was noise about various platforms in the markets. I think that's fair to say as well. Yeah, very clear. Thanks a lot. Yeah, perfect. Thank you. Additional questions? Yes, we have another question now from Christoph Blieffert from BNP Paribas Exane. Please go ahead. Your line is open. Yes, good morning, and thank you for taking my question. I have a couple. First of all, on the Frühstart-Rente, which is part of the coalition agreement of the new CDU-SPD coalition, here it would be helpful if you could share your thoughts on implementation and potential revenues going forward. The second question is on the divestment of your real estate credit loan book. Here it would be helpful if you could share the amount of risk-weighted assets allocated to this portfolio. As a last question, the last question is on your U.S. trades in Q1. If you could share a proportion of those trades on a year-over-year comparison, this would be helpful. Thank you. Okay, maybe I start with the Frühstart-Rente, yeah? That makes sense. When you look at it, I think, I mean, obviously, the new government has realized that something needs to happen on the pension side with a third pillar, but the reality is EUR 10 do not make a difference. I think it is a good effort. It is at least a start. Details are missing, of course, yeah. The reality is this country needs much more in terms of pension that are supported with assets or asset-based pensions. Frühstart-Rente for newborns until they are 18 and so on, there are a lot of areas unclear. To make a long story short, it is very important to participate in this product because you create the wealth of the future, but the revenue potential short-term or medium-term with the EUR 10 savings, even if—and that is still unclear, I think—the parents and the grandparents and the grand-grandparents hopefully contribute EUR 10 each every month, then it's at least EUR 25-EUR 30 a month, which adds up to a fantastic amount of EUR 360 per annum multiplied by a number of clients. I think it's a very important product, but the revenue contribution, I think we can worry later because it will only be later. That makes sense. Divestment and U.S. trades, I can comment on the divestment. You asked the impact on risk-weighted assets with respect to the credit loan book. The notional of the engagement was around EUR 28 million, which translates really with a 150% risk weighting into EUR 45 million risk-weighted assets plus minus that will be released once we formally submit our Q1 numbers to the regulator. More importantly, it has an impact on our non-performing loan ratio, which for us is almost more important given that there is a magic line that you do not want to cross, and we will be now comfortably going below 2% on our NPL line. That is on the risk-weighted assets. The third question was the proportion of U.S. trades in the Q1. Achim, do you want to cover that, please? Yeah, sure. Happy to do it. As you know, especially on the euro side, that is very relevant due to the FX conversion. Here, we're basically looking at the stock trades in the U.S., and that proportion in the Q1 has been around 55%, which compares year-over-year to 48%. It has gone up rather meaningfully by almost 10 basis points. Sorry, 10 percentage points. Thanks a lot. Thank you. As a final reminder, that is star one for your questions for today. We will pause for a brief moment. As there appears to be no further questions at this time, I would now like to hand the call back over to you, Mr. Schreck, for any additional or closing remarks. Thank you very much for taking the time, for listening in, and for your good questions. Obviously, if there's anything else you would like to discuss, Laura and I are happy to take your calls later on as well. For now, we say thank you, goodbye, wish you a very lovely nice day, and speak to you soon. Thank you. Thank you for joining today's call, ladies and gentlemen. You may now disconnect.