Dear ladies and gentlemen, welcome to the webcast results Q1 2023 of Hypoport SE. At our customer's request, this conference will be recorded. As a reminder, all participants will be in listen only mode. After the presentation, there will be an opportunity to ask questions via the telephone lines. May I now hand you over to Ronald Slabke, who will lead you through this conference. Please go ahead. Yeah, welcome from my side as well. Today, we announced our detailed Q1 numbers, everyone is excited about getting to know more details. Before we go to the details, you are aware of this, our group is active in three industries: digitalizing credit, real estate, and insurance here in Germany. Right now, there is a pretty strong focus on our core market, the private mortgage market and the home ownership market there. Let's say we expected this when we saw how Q4 was running. I can tell you right now already, Q1 was slightly up. We saw the turning point in this market. Our cost-saving program reduced our cost level by EUR 10 million. The combination of both made us being profitable in the first quarter on a pretty low market level. This is a success for Hypoport. Thanks to this situation, we are able to look around us, see what's going on, make calm decisions about how to optimize the situation in our favor, how to change relations, how to readjust pricing models and go forward and keep taking market share, which we did in the first quarter. This said, let's go into details and see how the different units of the group perform in this market environment. Talking about market environment, we and you are aware of this, had a long period of growth. Since the late summer day last year, a sharp decline in mortgage volume here. Bundesbank reported for January and February, the lowest number for a long period. With a positive trend in March, which was up from the February level, we still ended up as a weaker quarter. As I said already, we saw this turning of the market already a couple months earlier. The Bundesbank numbers are a little bit late to the party, but they are in line now with this what we see, that market slowly found a bottom, and it starts slowly to recover. What happened in the first quarter, especially in this market? When we look on the numbers, we see that interest rates are now stable for a period of eight months. Since September of last year, we are on the same level. Three quarters in a row, you can say. This huge impact, the which the interest rate increase in the last summer, you can say, had is slowly phasing out of the market. What we saw as well is an increasing number of properties coming to the market. It slowed down in the first quarter. Yeah, there are still, let's say this one is available on especially this is what is visible to us. It's on a record level. Still it's not a lot what is on the market. This explains as well why the price pressure is already going down. It's actually, we saw in February a turning point. While the peak price level was in April, May last year. In January, we saw the lowest level. In February and March, prices of properties in Germany were going up again. This is earlier than expected by most of the statistic community, let's call it. Because the interest rate rise would imply that prices should go down roughly a third to make housing as affordable as it was before. We are now down roughly 10% only from the peak. And are already at this turning point. I think there are two reasons for this. On one side, we see a tough inflation. As well incomings are getting up and people are acting more cautious when they look in the near-term future and expect still increasing construction costs and above a stable level of inflation. Something, 5% + is still expected for the next one or two years. This means increasing incomes as well near time, and this is already priced in in a certain way. The other thing is, we see a huge transformation in the German housing market when it comes to the rental side of the market. We put here the numbers of properties offered, already in 2020, 2021, the renting market was really tough. It was especially in the metropolitan areas, more or less impossible to find a new apartment. In the last quarters, it got even worse. Rents are fast rising right now, even when they are heavily regulated. Besides the fact that we have an exceeding demand of a couple of 100,000 units, thanks to migration. A core reason is that a fully regulated renting market it has frozen all fluctuation in this market to an extremely low level. It's economically not it doesn't make any sense anymore for someone to give up an apartment he rented a couple of years ago because of a huge jump in rent. A huge gap between the rents, you pay and then based on a long-term contract you have, and this what is the current market level. And this gap is freezing more and more this renting market so that there's close to no supply anymore for existing apartments and the ones who are newly built and still come to the market are pretty expensive. Some portals report just for the last quarter, rent increase of 20%. When we take all portals, we see that it's more something around 5%, 5% quarter to quarter. So on an annual basis as well is 20%, so far above inflation rate. So rents are fast increasing and there's no availability. Which brings people to consider buying a property and changing their property ownership in this market in the next couple of quarters and years expected. This is stabilizing the pricing side right now, and that's why we saw already this turning point in February. This said, for the development of the first quarter, how our different segments performed in this. As always, we start with the credit platform and here in the center, the Europace system is the core product, mortgages. But as well as other products in the segment, like personal loans and business loans for German corporates. We start with mortgages, including Bauspar saving products. We see a plus of 7%. Mortgages only is a plus of 10% above last quarter. Just to make this transparent, we compare right now with the last quarter because to compare with Q1 of 2022 would mean to talk about a huge slowdown in the market which you're already aware of. I think from an investor point of view, it's more relevant what happens right now. Last quarter is a better comparison than the last year, which is like a pretty long time ago. We stick to this in the whole presentation that we compare quarter-on-quarter. Even having some challenges in areas where there are some seasonal effects. Better to have this and explain this than to all the time talk about a comparison of two different time zones, which we have in our business here. Okay, back to mortgages on Europace. We were gaining market share in all segments, in all customer groups. I will talk about this in a moment. We keep innovating. Even with this what we did in cost cutting in Q3 and Q4, we keep being the most innovative source around mortgages here in Germany. We introduced new collaborations with ImmobilienScout24. Based on our #passt algorithm. The AI behind already the suggestions in the Europace systems. What is the optimal way to finance someone is now as well used for lead generation for mortgages on the ImmoScout24 portal. To make sure that people get a fair view of what they're able to afford and what the property will cost them. With this, the quality of leads is improving and yeah, Scout is going to monetize on this while Europace partners gets pre-qualified leads with much higher conversion rate than they usually would get from an real estate portal. Talking about our development in the different customer groups. In cooperatives and savings banks, we grew double digits, 22% in co-ops. 80% in the savings banks industry, both of them had losses in volume in Q1 compared to Q4. The relative market share gain here is again back to normal in the mid to double digits range. This shows the attractiveness of Europace in these two sectors right now in the current market circumstances. The advantage of Europace is it meets even for traditional banking branches, more the demand of the consumer to compare and to minimum understand how the offer of a saving bank or cooperative bank looks like compared to the rest of the market. If needed, these banks are able to broker a mortgage of a third party as well this way. It's more about transparency right now for the consumer and then efficient workflow process in the whole advice process to be able to compete with brokers. Brokers are taking market shares right now. They are much more active, much more agile when it comes to finding a way to the consumer. They are less hit by the current market environment than bank branches. We see a gap of roughly 15% in the performance between these two types of groups, and we are talking about the ones who are using Europace already. The bank branches not using Europace are pretty sure even more affected by the current market environment. Thanks to the brokers who took market share and as well a positive development in the private banking industry. Transaction volume of Europace is growing in this current environment already. When I look forward to the next quarters and years, whatever the market will do, as long as it doesn't lose value, Europace will gain transaction volume because we are gaining market share double digits even in the current market environment. Even under these circumstances, in a couple of years, Europace and our transaction volume will be back to the pre-crisis level. If the market is normalizing, which we expect in addition, then we will see higher volume here on the platform in the near future. Next product area, personal loan business, +39% in the first quarter. Some seasonal effects in this to be fair. We see as well that business gets more difficult because of recent recession probabilities in Germany. Banks get more concerned, are more critical with their loan portfolio. We are gaining market share in a relatively turbulent market right now. Core product is white label mortgages for banking sales channels. Right now, newest cooperation is with the cooperative banking sector. We roll out GENOFLEX, which was tested last year intensively, and now it's rolled out in the whole sector to enable all cooperative banks to broker third-party personal loans if their own product is not competitive enough from a pricing or The scorecard doesn't meet the customer needs. This, Let's say this is a very attractive niche we are working here in. We're still a long way to go because banks need to monetize on their client contacts, and only to accept and underwrite loans which fits your own criteria is not the best way to monetize. If they want to compete with comparison portals and more online approach businesses, they need to get better in this monetization, and we are the solution for this, and they know this more and more and use us. Third product segment, corporate loans. REM Capital had a wonderful time from summer 2021 to summer 2022, enabling a lot of energy efficiency subsidies to be used in projects which were prepared and supported by REM Capital. You can say since summer last year, business is back to normal and we have a lot more work to do, acquiring projects and defining solutions to use subsidized and finance them. Fourth quarter was big, really big. Compared to this, the third quarter was already more peaceful and shows that the business model, even in an environment without a lot of government-sponsored programs, is working pretty well. For now we are operating here on a, let's say, normal operational level. We wait for the necessary subsidy programs from the government side, EU side, to be effective to reach especially our climate goals. Because the whole transformation, which is planned and wished by our political system needs to be financed and to make it through, the money which is collected for all this activity in the end needs to be spent as well. It needs to be distributed to the industry. For now, there is still missing the necessary traction in our political system to provide this. We are preparing this, you can say. We acquire projects, make them ready and wait for the subsidies to arrive. This is in line. Total numbers of this segment on the revenue side, -1%, more or less stable. Mortgage is up, personal loans up, corporate loans down, saving products down. Some seasonal effects. On the profit side, you see that even in the current market environment, we are profitable with this segment, EUR 4 million in EBIT. With the outlook of an incremental normalization of the market plus market share gains by Europace, we expect this to improve during the year. Next segment, private clients. Focused on mortgages, as you know. Our franchise system and our brand Dr. Klein is the one of the most recognized ones when it comes to independent advice. Dr. Klein is profiting right now from the trend of the consumer to longer research, more comparison, looking for the best deal in the market. With this, your Dr. Klein was able to grow by 10% in this market environment. Even without the ability to scale with new additional partners, Dr. Klein could grow on a similar speed like Europace. That's great. As very good is that number of advisors stabilized. We saw a sharp drop in the second half of 2022, where you could see that the franchisees were adjusting to the market environment. They were focusing their workforce to the best advisors with the highest conversion rates. Even when they are still not fully under workload again, they keep them right now because they feel as well that market is slowly coming back and it's very painful to rehire advisors you created early. Certain level of stability in the franchise system, which is good and based on this, Dr. Klein was realizing a pretty good first quarter. On the revenue side, there as well, some one-offs in the comparison between Q4 and Q1. You see in the gross profit a realistic perspective. Out of this 10% additional transaction volume, we gained 8% in revenue. In addition, net revenue and EBIT is up by 30%. Most of the cost savings in this unit were already realized in Q4, so the cost-saving impulse that you Q4 and the Q1 was not so large anymore. Next segment, our real estate platform with the focus on two core market segments. I said already earlier that the renting market is under stress. When we look here on the institutional housing companies, that's the seven million units. This is an area where we feel the stress as well. The cooperative and the municipal-owned housing sector, you can say is frozen when it comes to investment. They reduce their project, their new project on building houses or renovating houses to a minimum level because of the current circumstances. Interest rate and rent regulation doesn't make it feasible anymore to build something new. This limits the inflow to the market. It limits as well what we can finance here. I will come to this in a moment. For the homeowner-occupied market share, which is roughly 42% of the total market, midterm, this is a good news because the less attractive the German renting market is, and small landlords are not acting much different from the institutional housing companies here. The highest force for people to acquire their home. Germany had a very attractive renting market over decades. You can say, for the year 2022, it ended. It's not there anymore. Renting, it, like it is in every developed economy, something for short-term use and for some other specific target groups, but not if you are a double income household. If you are in the top quartile of the income side, renting is not an option anymore for you. It was up until recently. People who are triggered needs to buy. Besides this, what we do in the credit segment, in the credit platform segment, here we support the sales process and the valuation process. First talking about the transaction platform. It's still down 9% on the first quarter. We feel here the relative, let's say less competitiveness of our core target group, the real estate agent of banks. They don't perform pretty well in the current situation. Where you really need to sell a property. It's not about getting the property as a marketer, but to sell it really. This is a more difficult approach. You need to do more. The part which is digital of this, we can help them. By helping them, we improve and increase our revenue. But still they are struggling with the market environment they are in right now. That you see it's minus 9%. Yeah, we are solution, and more and more recognize this. On the other side, it limits their ability to spend money. This is not helping us. So we would be more happy if with the normalization of the market, it gets us that easier for them to sell properties, and we are able to grow together. Next product area, property valuation. Here slowly we feel that the market is shrinking for property valuation because of less number of mortgages, especially. With a certain level of time delay, banks need less of these valuations for their portfolio. So we see a decrease in number of valuations that we had to do in the first quarter already. Yeah, this is a small decline in our revenue structure as well. Some regulatory changes again, which are not helpful. Thanks to the cost cutting, our investment got lower. Still this is a challenging market environment, I would say right now. Yeah. We are at the housing association area. I said already they are freezing their new construction site and the renovation site. While we were able last year in the second half of the year still to compensate the volume reduction of the industry by gaining more clients and expanding our market share. In the first quarter, it really imploded. Even when we are very active and still are on the path of gaining market share, we feel that the volume, the financing volume of the housing industry is right now really low. Yeah, this can't stay forever like this. Two core reasons. First, they have to build the social housings of the future. In the German regulatory framework, social housings after 20 years get out of this rent fixation. They are getting less and less automatically over time. Second, we have a massive net migration to Germany and an exceeding demand of something between 1.5 and two million units. This is the sector which has to build it. Just, they are used to wait for the subsidies to be there to make it profitable for them. Or let's say, not unprofitable for them anymore, as it is right now. This is a sector which owns seven million apartments which are not as energy efficient as something newly built. Most of these apartments were built 50 years ago. Their EEK energy efficiency class is below the necessary standard. The housing industry expect a necessary investment of EUR 500 billion under 2024-2045 to meet our climate goals. With more and more regulation in place, the pressure is increasing on the sector to do something. Let's say with our EUR 2 billion a year, we have roughly a market share of 10% of lending in this area. Usually they lend EUR 10 billion-EUR 12 billion per year. Let's say EUR 500 billion in 2024 in 22 years means additional lending needs of more than EUR 20 billion a year. This shows that there's huge potential in this market here, and a huge, huge need for capital in this market to meet the political and more and more legal goals that are set. With this in mind, we are happy to use this current time to expand our market share here, in a time where banks pull out of this market with their direct sales, and we stay in here. The revenue gain in the first quarter is thanks to some insurance products with the seasonal effect. The pure mortgage side revenue went down as well. As a total for the segment, we see a double-digit growth. It's an investment case for us still, and we heavily invested in the last years and still spent here a lot of money to expand our platforms here. Let's say. With the total market by now, we see that, like the competition is getting less and it's getting weaker. From this perspective, there are some opportunities in this market, mid and long-term that we want to cover here. Last market, insurance. You are aware of this. We split our activities here and focus our activities on three types of insurances. In the personal space of insurances, the Smart InsurTech, our platform to bring brokers, insurance companies and clients together on one database, one data set, synchronize them, and have one platform. Yes. Still, just an incremental growth here. The industry keeps slowly adjusting to the new environment. We were not successful in speeding up this process as well Q1, plus 1% only in migration from our own license-based software product to the platform. Well, we keep experimenting with the way to speed them up. Right now we are focused on reducing the complexity of our own infrastructure still after the cost reduction program of last year to have a lean and fit organization to at some moment drive our clients forward again. In the area of industrial insurance, we develop right now a new marketplace together with our client base which is pretty important for this industry already. We get more and more partners for this new marketplace already in the user group, which are not users of our ERP system, which is good. Looks like this is going to be a huge success for this industry. For now, it's investment case still. We are spending money here. In the second half of 2023, we expect first revenues and the real world for this platform, and hope that the good feedback we receive right now will then be met with real transactions. Especially in the end of the year when industrial insurance are renegotiated, that our platform plays already a significant role in this industry. Stay tuned, I would say. Last area, employer-linked pension market here in Germany. Yeah. The volume on the platform grew by 4% on a quarterly basis. On a yearly basis, we are on double-digit growth. It's still a huge market in front of us. Thanks to especially a good approach to realize synergies in sales, we brought up some industrial real estate brokers, which often have this as additional area they cover on the system. For instance, Funk Gruppe, one of the larger ones here in Germany, is using now ePension and digitalizing their processes with their industry partners. Incremental steps for that. The good news here is it just gets more the volume on the platform. In this case, when our partners are growing their business or if they, let's say, the general pension volume in Germany, it's increasing, for instance, because of inflation. We expect this to grow on a higher level, higher speed in the next years here. For the segment in total, it was, let's say solid first quarter. The comparison with the fourth quarter here on the gross profit side is has some seasonal effects again, so it's not fully fair. In a year, we just gained the revenue and traction in all these product segments slightly. Still slightly negative first quarter. For the full year, we expect to be profitable with the segment, there are some positive dynamics during the year that we feel comfortable that this is just a small loss in the beginning of the end. We will compensate this still during the year. For the total group, it was a turning point after the super weak fourth quarter. We are back on growth track. We are profitable even in this market environment. We take market share and we are in the position to decide how to proceed with our partners, how to help in the system and getting back on track and which opportunity to take in this market. When you compare our current numbers with our long-term records, in the first quarter, we performed as good as we did as a whole group in 2013, 10 years ago, in a whole year. This shows the dynamic we saw in the last 10 years on one side. On the other side, we know how to operate in a tough market environment. This was still tough. This was still #passt financial crisis here for our business. To get back to the numbers we saw in 2021 as our by now record year in perspective of profitability, we just need to scale our business. Qualitative growth, as we call this right now, and we can work ourselves there back. This just takes time. With a little support of the market, it will be faster. If we have to do this all by ourselves, it may take us a couple of years. With a little bit of support from the market and the normalization, especially in the housing market, this just takes us a couple of quarters. How many is not certain, but we expect it to be just a couple of quarters left. From the perspective of how to value Hypoport, the long-term perspective is very attractive. We will come to this in a moment. First of all, just to make sure that it's clear, we reduced our cost by EUR 10 billion compared to the third quarter, down from EUR 60 million-EUR 50 million across the whole group. The split is up here in the different segments that you can see that everyone helped. With this in mind, be sure that we, with this EUR 50 million, are still able to heavily invest in innovative product along the value chain of mortgages in housing and the real estate and in insurance. We do this all with the current spending on the current spending level. We are not breaking on the product side here right now, just our expenditure stuff. Coming to outlook. How this market is going to look like in a couple of years. The most important thing to understand is how the German housing market works. A German is buying his first apartment after a trigger event. The most serious trigger events are children or splitting up, getting divorced. Because after this kind of events, you have to act. You can't stay in your current renting apartment anymore because it's usually too small. Yeah, this is triggered. This kind of triggers happens more than 100,000 times a year here in Germany. For the last 10 years, we saw less and less transaction based on the trigger events. From this year, we are able to calculate that today, between 1.5 million and two million households with enough income to buy something are in an unfit situation in a renting apartment and waiting for the opportunity to come. Up until last quarter, you can say, waiting was still okay because prices were going down, so you could have to hope to achieve a better deal. Now with prices incrementally going up again and interest rates are stable, there is no incentive to wait anymore. The challenge is that these families rented usually more than 10 years ago, so they come from a pretty low rent level compared to the location they are living in. They need to accept that on the current market level, which is just the truth for now and for the future, that they can't afford to live in the same area with the same level of quality, the same space per person anymore. This adjustment from what you are used to when you rented in a very cheap renting market environment to what you have to pay now, is this what takes the time and what makes people, families to hesitate to act because they, in their opinion, lose status, lose quality of life? On the other side, it's not going to be better again. From here, thanks to low new construction numbers and a huge need of labor for our industry and with this a huge net migration to Germany, it's just going to get worse. The ones who earlier act will be the benefiting ones. People who are in this market, who are looking right now, households who are in the search, they feel this, that the market is changing already, that they need to act and better to act faster. Because of this, the market is coming back to a normal level. What is this normal level? Let's say, during the period 2015 to 2021, that we saw quarterly market volume going up from around 50 to around EUR 70 billion. From this and having in mind that prices will not go so fast up anymore, we expect the volume for the normal mortgage market to be something around EUR 60 billion-EUR 75 billion in the near future. Plus EUR 20 billion for energy efficiency. Things that are already prepared in the regulation or just coming up from the EU side will trigger additional necessary investments just in the home ownership market of EUR 20 billion. Thanks to the huge value gains in Germany over the period of the last 10 years, this is easily to be financed by the owners. Just it needs to be done. Together with this, we expect midterm a market volume of something between EUR 75 billion-EUR 100 billion per quarter of mortgage volume here in Germany. The only question is how many quarters this is away, not if it's going to happen because the fundamental parameters in our economy are all indicated in this direction. This said, for this year, and this is just a short-term perspective, we stick with our guidance. We expect a small decline in revenue and then sharp decline in EBIT. This is like a Q1 was better than Q4. We'll be better than, let's say we will easily outperform the second half of last year. We had a very strong market still in the Q1, and even still Q2 was pretty helpful. To outperform this in the second half of this year, it will be tougher to get close to this. That's why our expectation stays for the full year below last year. From here and, from 2024 on, we expect double-digit growth on top and bottom line, as we did, under 2021 in the period where the market was more or less stable. this said, I will hand you over now to the operator for some Q&A. I'm happy to answer your questions. Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial star one one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask the question. If you find your question is answered before it is your turn to speak, you can dial star one one again to cancel your question. If you're using speaker equipment today, please lift your handset before making a selection. One moment please for the first question. There seem to be no questions from the audience. Yeah, no problem. All questions answered, I would say. If you have other questions, contact investor relations from our side. We are now focused on gaining market share and doing what is possible in this market environment to improve our results. We will see or hear here again in just three months for our half year reports. Thank you. Bye-bye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.