Moltiply Group S.p.A. (MNL.F) Q3 FY2025 Earnings Call Transcript & Summary

This is the Chorus Call conference operator. Welcome, and thank you for joining the presentation of Moltiply Group Third Quarter 2025 Results Conference Call. [Operator Instructions] After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Marco Pescarmona, Chairman of Moltiply Group; and Mr. Alessandro Fracassi, CEO of Moltiply Group. Please go ahead.

Thank you. This is Marco Pescarmona. And by the way, Francesco, our CFO, is traveling, so he's not able to participate today and we will rely as usual on the presentation that was published on our website, and we'll start from Page 18 of the document and look at the results of the first 9 months. In the first 9 months, the results are quite strong. Of course, revenues are EUR 467.1 million, up 45.4% year-on-year. The EBITDA in the 9 months is EUR 120.8 million, and that's up 42.4% year-on-year. And it corresponds to an EBITDA margin of 25.9%, which compares to the 26.4% of the previous year. And the EBIT is in the 9 months, EUR 75.5 million. That's up 54% year-on-year. And finally, net income is EUR 38.6 million which is up 25.8% year-on-year. Of course, these numbers exclude discontinued operations, which means the small regulated entities that we used to add that is in the process of being sold. It's very tiny. And if we move to Page 19 with the Q3 highlights, we can see that there are -- the results are very much as we expected a continuation of the performance of Q2. So revenues for Q3 '25, EUR 165.4 million. That's up 55.3% year-over-year. EBITDA is EUR 43.5 million, that's up 52.2% year-on-year. And by the way, with an EBITDA margin of 26.3% which compares to 26.8% of Q3 of the last year. EBIT is EUR 26.8 million. That's up 60.9% year-on-year and net income is EUR 16.3 million, which is up 64.2% year-on-year. The important thing that you all already know to point out, if we look at the quarter, for the quarter, the year-on-year comparison benefits from the inclusion of Verivox in Germany in the consolidation area. And so there is not only the numbers solid organic growth, but there is also this enlargement of the consolidation area, which started in Q2, and that's the reason why we said this year rather than focus on year-on-year growth, it's better to look sequentially an evolution because the change of the enlargement of the consolidation area is really quite significant. If we want to go into more detail on the division -- of the divisions. On Page 20, we have some details of Mavriq, which is our broking division. Mavriq revenues are EUR 268.2 million, that's up 70.8% year-on-year in the 9 months. EBITDA is EUR 78.1 million, which is up 68.8% compared to the previous year. And we also noticed that EBITDA margin is 29.1%, which is not so far from the 29.5% of the previous year despite the inclusion of Verivox in the consolidation area, which means that the EBITDA margin of the traditional perimeter improved in a significant way. And the EBIT is EUR 54.5 million in the 9 months, that's up 81% year-on-year. It's important to keep in mind, however, that the EBIT figures don't include for now any amortization of intangible asset that will result from the purchase price allocation of Verivox. So we still have a provisional goodwill and probably by the end of the year, we will allocate this goodwill and some of it will be allocated and intangible assets such as software or trade [indiscernible] that are subject to amortization and you'll see all that impact concentrated in the fourth quarter of the year. If we go to Page 21, we have the Q3 financials of Mavriq, the effect is even stronger. Revenue was almost double. So the EUR 103.2 million, which is up 91.8% year-on-year. Again, Verivox is a very big object. So this makes a significant impact even if we still -- we will also be significant organic growth. EBITDA is EUR 30 million in Q3. That's up 78.9% year-on-year. The EBITDA margin is 29% in Q3. That compares to 31.1% in Q3 of the previous year. And the EBIT is EUR 21.3 million. That's up 86.8% year-on-year. In terms of comments on the business, there are no particular news. I mean, it's we did strongly even from an organic point of view in all different businesses with the exception -- notable exception of e-commerce price comparison, which continues to suffer from basically the competition of Google, which is -- they're under investigation for noncompliance with the DMA but no decision has been issued yet. And on top of the organic growth, there is the enlargement of the consolidation area, which again prompts us to look at things more or less sequential than on a year-to-year basis because it's -- the change is too big change. For the coming months, we can expect foreseeable evolution, of course. One is there will be likely a slowdown in mortgage demand, especially for mortgages in Italy because the mortgages tend to be let's say, not seasonal, like are concentrated in periods when interest rates go down, and then may disappear or will slow down a lot for a while and then come back again when interest rates move. So we had a favorable environment for mortgages and that's slowing. On -- so this is on the less favorable side, even if the real estate market remains strong. So it out it's mostly are mortgage effect here. And on the other hand, we see a moderate recovery in energy demand in Germany, especially compared to the first part of the year. So savings available to consumers in Germany that decide to switch energy providers are better than they used to be a few months ago. So this is a positive, even if we still have to see the entire peak season, so it's still a bit on the side. And for the rest, the other markets are developing continuity. There is nothing new to report. And with this, I'm done with the update on Mavriq, and I hand it over to Alessandro for BPO.

Yes. Thanks, Marco, and good afternoon, everyone. Good morning for our friends in the States. We're on Page 23. As you see, the 9 months financials for the Moltiply BPO&Tech division are strong. We grew 21.2% year-on-year from EUR 164 million to EUR 198.8 million, and EBITDA grew from EUR 38.5 million to EUR 42.6 million. That's a growth year-on-year of 10.7%. This different growth, which is also reflected in a change in the EBITDA margin is basically connected to, as you all know, because I've explained it quite some time this year, the impact of the new law on notary fees. So we have, obviously, in these results, a significant percentage of para-notary activities. And as you know, we had an increase in prices for the services of notaries which did not impact our absolute margin, but it did impact our percentage margins. So there is a lot -- this dilution effect if you look at the EBITDA percentage relative to revenues. But the growth, which is at least 70% of this growth is organic. So I think it's a significant good performance in the 9 months, completely in line with what we expected and what we communicated. So we keep this double-digit growth, which is obviously, our long-term target. Looking at EBIT, also here, you see that now the trends of EBITDA and EBIT in terms of growth are very similar and we grew 11.2% year-on-year from 18.9% to 21.0%. And the EBIT margin also here, obviously, you have the dilution effect, went down from 11.5% to 10.6%. Relatively -- if we go to the next page, we can see the third quarter results. The third quarter has actually been a little better than the second quarter. And in fact, the impact on the overall year and the 9 months performance has been a little improvement. The growth in revenues 18.0% year-on-year. The growth in EBITDA margin is 14.3%. And basically, here, you would have had also a double-digit growth even if you just kept the organic piece of it. So the EBITDA grew EUR 11.8 million to EUR 13.5 million, again, 14.3% year-on-year growth. EBITDA margin. Again, we have the same dilution effect. 22.4% down to 21.7%. The EBIT margin in the third quarter grew 4.8% from EUR 5.3 million to EUR 5.5 million that is a growth of 4.8%. The -- basically the comments as always in -- when we're talking in the out quarters are reasonably short. But the reality is there is not a lot to comment, meaning that basically what we told you at the end of August, beginning of September in terms of the trends, they're very similar. The growth is basically driven by mortgages, by the lease business line and also wealth is doing well. although the growth of wealth is connected to a significant and important project on the IT part. So that will -- is not really -- there will not be a significant repetition of that in the next year. And instead, we are seeing obviously a normalization, as we have mentioned a lot of times of claims and real estate. So we expect this growth to continue. Now in the coming quarters, quarter 4 was exceptionally good last year. You might remember, it kind of even turned here around. So we see how we will compare just looking at Q4, but the trends that we discussed basically continue. What Marco said about slowing down in remortgages will impact also the BPO division, specifically with para-notary activities that I just finished mentioning. So there will be a little bit of that. But or the rest of the trends are generally being positive and in line with what we told you. We keep working, obviously, on the processing efficiency. And as you all know, technology is playing a more and more significant role in increasing efficiency. And obviously, we will be -- this will be the name of the game looking forward in the next quarter and in the next years. And I think this basically ends my comments. And obviously, I'm very happy to take questions. But before that, let me pass it back to Marco with comments on the net financial positions.

Thank you, Alessandro. And let's finish with a couple of words on net financial position on Page 27. Here, the statutory net financial position is negative EUR 455 million. That's an improvement to the negative for EUR 467 million of June 30, or the EUR 515 million of March 31. And basically, this is -- the improvement is benefit from the cash generation of the business. Just a reminder, we spent some -- we did 2 transactions in Q3, one which is neutral on net financial position, which is the acquisition of the large majority of the remaining stake of Lercari. Basically, we bought the majority of that stake paying cash. Plus we have a prudent call on the residual portion, which I think is 12%. And -- but the amount of the cash outflow plus the new liability is -- corresponds basically to -- ballpark to the liability that we had already recognized. So this is neutral on the net financial position. What is not neutral is the fact that we acquired -- also the entire minority in our company, with a company with a third-party shareholder that was providing para-notary services and this is an agreement to acquire that for a consideration of EUR 15 million, of which EUR 8 million were immediately paid. So this affected the net financial position, and that's a first point. The second point is the kind of adjustment net financial position, including the value of the MONY shares. That's basically stable year-on-year because the stock price of MONY went down. And this is not so relevant because for the majority of the banks now we have like a custom-made definition, which doesn't take this into account. But still from our point of view, it's an interesting parameter to look at, and we still have a couple of like legacy loans that look at like net financial position, including MONY. And so with this, again, we are a 355 million. Clearly, you do the multiples our net financial position already is below 3x EBITDA, the statutory work and the, let's say, the adjusted one would be a bit more than 2x of EBITDA. And so we are in comfortable situation. And also, we are benefiting from reduced rates thanks to this lower net financial position more favorable rate on our financing. With this, we are finished with the comments and we can open it to comments. So operator, please, you can open the floor to questions.

[Operator Instructions] First question is from Gabriele Venturi, Banca Akros.

Three questions on my side. First one, we have seen recent rulings awarding significant claims to other price comparison platform in Germany against Google and do you see any positive reduction or increase the visibility for your case against Google? Second one, following last week, it was on Azimut new banking project. Will you share your view on any potential implication for the wealth segment within your BPO division? And the last one, could you provide more color on the margin evolution within the Mavriq division and how Verivox profitability is progressing post the consolidation?

Okay. I will take the first and the third question and Alessandro, of course, will handle the second. Regarding the news about -- from Germany, just as a refresher, basically idealo is a smaller price comparison websites as called the success in the German court being awarded the image is exactly for the same thing that we are pursuing against Google. So basically, the growth in Germany, from what we know, confirm the -- that of course, the abuse of dominant position is proven, but this court confirmed not only relied on the proven abuse, but also confirmed that the abuse continued after 2017. And this is how we understand it. And so in terms of the fact that there were damages and in particular, the use continued was very favorable to the claimants. In terms of the award, the amount is nice, but it is significantly lower than the original claim because the original claim was for more than EUR 3 billion and the awards was to allow something below EUR 500 million. And on one side, I think this is a bit disappointing. On the other side, in Germany today, they just explained to me that the largest claim ever awarded in Germany for a similar situation was EUR 60 million. So this time, they awarded 8x the largest claim ever awarded in Germany. So it was also a big departure from past very conservative approach by German judges on the quantification of the claims, this concept of prudence and so on. So I don't know, I think it's like done to be favorable to companies in general. So I think the very good news is the general win on the infringement and the continuation of the infringement on the amounts, we hope that we don't get 14% of our ask. We get significantly more. It's also important to point out that there are other cases that are being ruled these days. And so far, the rulings have been confirming the infringement and the fact that damages are due. So I think it's again good news. This will reinforce the conviction of judges that the [ quantum ] will depend on the work of the local experts. And again, we hope to get more than the percentage that they got. And the other question about the margins of the Mavriq division, the margins were slightly down year-on-year, especially if you look at the single quarter. But you have to keep in mind that we are now consolidating Verivox, which is a very large entity that has lower EBITDA margin than our other businesses. So the way you should read the margin evolution is we have a significant margin expansion in everything I mean, not everything because like the price comparison goes down in terms of margins, but in almost everything, plus a big dilution from a large object like Verivox, where the EBITDA margin is significantly lower than the rest of the division. So this is how to read it, this is done.

Okay. Relative to the T&D project, obviously, here I have to be a little careful as we're talking about the client in a delicate situation. Well, I mentioned this project last -- when we were, in September, discussing the half year results as I was looking forward. And I mentioned that as something that I still didn't know which way it would go. because obviously, this means the project is basically splitting Azimut in 2. And I know and like the Federal scope as of today as we are providing significant services to Azimut. And obviously, that could be an opportunity, given the fact that the scope of the new bank, becoming a bank, it will increase the number of services that they need. But still, I'm not in the position to say that we will necessarily continue to be offering services to them. And so the way to look -- as a Moltiply shareholder, the way to look at the news of delays in the launch of T&B kind of connected to what's going on in Azimut right now, it is conceptually neutral looking at the status quo. I mean we will continue to provide the services if the company remains with the current perimeter, if it will split and when it will split some months ahead, I don't know how it will work. And obviously, I'll be explaining to our shareholders and to the market in general, what the expectations are. Today, this is basically the news is that this thing is being pushed forward. And actually, things about remediation of the things that need to be done. They were not -- if you look -- were not many comments of Bank of Italy relative to the operating model. It was more about the overall governance. And so we -- let's say, we are not part of the problem. possibly in the next weeks and months, we will be part of the solution. So relatively speaking, this is, as I said, a delicate moment for Azimut, but I don't think there should be any read across to us, definitely not something negative on us because of this.

Next question is from Aleksandra Arsova, Equita.

A couple on my end. The first one is maybe a little bit early, but just the sentiment you have on 2026, so how you will enter the year, considering what you already told us about overall trends, a little bit decelerating mortgages, overall positive trend for most of the other divisions. So I was wondering, is it reasonable to assume a sort of normalized growth rates for the BPO in mid-single-digit range for revenues and maybe high single-digit range for the Mavriq Broking division. This is the first one. And the second one is a follow-up on the, let's say, the Google issue. So maybe do you have any clue idea of what could be the timing of the Italian courts to go on with the case? So just to understand whether we have a time frame for this issue? And also connected to what you were mentioning before on your expectation to get maybe even more than the amount got from idealo. So if I remember correctly, both you and idealo are requested for roughly EUR 3 billion in damages, maybe idealo a little bit more, but broadly EUR 3 billion. So just to understand better the underlying. So as far as you know, the period covering these damages is the same for you and that for idealo. And so if you can maybe remind us of how you calculated or estimated this EUR 3 billion damages.

Okay. Well, in terms of sentiment, I mean, it's a bit too early to tell. We have now a very diversified business. We have grown pretty well in recent years. And I mean it's really hard to comment on whether the specific figures you quoted are appropriate or not because we don't give guidance. In general, I would say we tend to have analyst estimates that tend to be a bit on the conservative side for the future. So we tend to do a bit better. I would look at to the extent that it is possible to the past to have an idea to what happened in the last couple of years, that's easier for BPO for broking there is the issue of Verivox. And if we do well, we will be able to deliver performance by being more effective with Verivox. This will be an important driver. Of course, the jury is out to see if we are able to deliver or not. But that's potentially for the next couple of years for broking a very relevant source of performance. But again, even in terms of -- even giving some vague indications, we are not ready for that. We will try to do it with the full year results.

Marc, if I can just add one thing on the BPO. Aleksandra, correctly, you were referring to something like normalized. But I really want to stress out is we will also be clear when you will see the different divisions when we -- the impact of the different business lines when we give the full picture with the full year results. But it's true that we have a very strong -- we had a very, very strong performance on mortgages. But I think you should not discount that there was really a very significant drawback on claims and on real estate because of, on one side, the normalization of statistical normalization of what has happened in '23 and '24. So when you look at '26, obviously, there will not be anymore this normalization because the whole of '25 has been without Ecobonus and the whole of '25 has been with basically normal weather events. And then as you know, one of the things that at a certain point, we should start seeing some impact instead is the new law on natural catastrophes. So as you know, the full impact of the law is basically at the end of the year, meaning that everybody has to take on insurance. So I think that the first year, where we will see -- we'll start seeing some impact for BPO is -- for our claim BPO is 2026. So keeping still our qualitative comments, I just wanted to make sure that this is what you're looking at. So as Marco said, probably looking at the past is the best way to see what we can be doing in '26.

And in terms of the timing of the Italian court for the claim, Italian courts are normally take 2 to 3 years to reach decisions. We have no visibility of the exact timing. And I don't think we will be able to provide updates throughout the process. I think before hearing anything about -- from us about outcomes, you will hear a lot of decisions of other -- in other jurisdictions. By the way, all these decisions, if they continue to be favorable to the claimants, we just, I think, reinforce the conviction of our judges. So I mean, don't expect anything in terms of amounts, decisions or anything at least for all of '26. We might have some -- our own feelings, but until we have a judgment, it's all up in the air. We don't know. It could be nothing. It could be a lot of money. Until we have a decision, we are in the dark, let's say.

Okay. And maybe the last one on how you calculated the EUR 3 billion and the number of.

Yes. It's difficult, in fact, to make comparisons between the claims of different countries or different players for a number of reasons. One is exactly how the claim is structured for what you are claiming damages if it's for a certain period, for a longer period and so on. And also, these damages, the contract that we are discussing, the abusive combat that have been observed also have permanent effects. So if I -- I don't know, like if I crush your end, then maybe you don't lose the end, but you'll not be able to manipulate things in the future, and that's a permanent damage. And this is the same, once a player that has a very strong market position in a market with tipping network effect becomes #2, they will not -- they will be a little bit crippled compared to how they were before. So part of the damages is also that, depending on how you phrase it and so on, it could be done in a way or another. So I would say from what I read, the idealo claim is possibly doesn't have the terminal value, stops at a certain point in time. I don't know what kind of assessment they did on permanent effects or if they reserved the right to do a further claim. So I mean it's really hard to do a comparison. Idealo is significantly bigger than [indiscernible]. This is important to know. But again, this doesn't mean much. There is a company in Sweden that made a claim just like a couple of weeks ago of EUR 7 billion. So I mean, our claim is well grounded. It's based on econometric models based on -- all these things are done with counterfactual scenarios. So the way it works, this is very general in terms of concept. When you have these abusive conducts, the way you determine the damages is by determining -- finding a counterfactual scenario. Normally, there can only be one counterfactual scenario. This is something that typically the court has to decide -- so exactly what is the counterfactual scenario. And then in this counterfactual scenario, you have to estimate the economic performance that reasonably you could have achieved. And then the damage is the difference between your actual economic performance and the economic performance in the counterfactual. And then, of course, there is this issue of the permanent component that also has to be determined. It's a bit like a concept of terminal value. This makes sense only if there are externalities and so on, which in our case, we think are very strong. But these are the generic concept, but it's very difficult to make comparisons.

Next question is a follow-up from Aleksandra Arsova, Equita.

Since we have a little bit of time, maybe a more general one on the businesses in France and Spain and the Netherlands. So in past occasions, you mentioned the work you were doing apart from the operating margins was on the top line and on marketing cost on the supply side. So maybe an update on the aspects on LeLynx, Rastreator and Pricewise.

I think we are, in general, very happy of the work that we have done, especially in Spain and France. The Netherlands is a more recent acquisition. So it's still more -- it's a bit more work in progress. I think the key aspect is the fact that we have put in place strong management teams with more and more autonomy. The teams -- the new teams, new people, part existing people because we also have strong people in several cases from the original teams. But basically, thanks to the management teams, these companies are delivering strong performance and with a good level of autonomy now. And in the Netherlands, we just appointed a new CEO. So we are a couple of years behind in terms of this process. But this is a very important process because it accelerates any knowledge transfer that we might be doing because it improves the execution. First, this improves the execution basically. And then -- and initially, the execution is more like asking as -- as asking them to do things that we think could be beneficial. But then after the easy things are done, the execution will be local innovations or doing things that have to do more with partners or other things that are inherently local. And with good things, we are in very, very safe hands. And this also allows our core leadership team from Alessio to his closest team to concentrate more attention on Germany because in Germany, we have a very big opportunity. But of course, it's a big organization. And we don't want to -- we want to do a good job, let's say. And so the strong teams in the different countries are delivering. And also, they are freeing up resources so that we can focus more on Germany. So it's -- we are very happy with the overall situation.

Gentlemen, there are no more questions registered at this time.

Okay. Let us make 2 final comments. One, I understand some of the questions you are asking. I mean we will be thinking about how to represent the business in a possibly slightly different way from next year in terms of giving maybe more visibility on the international part and maybe aggregating things in Italy because it no longer makes sense on the Mavriq side, possibly given the relative sizes of the different things to talk about mortgage broking in Italy, insurance broking in Italy and then like one big object, which is international markets. This is with 2/3 of the stuff coming from international, not exactly representative. So we'll have to think about it. And maybe also on BPO, how we aggregate things, we think a little bit exactly the design of our business lines. So this is first comment. And second comment, which is a bit stupid, but we -- you saw the stock price on Friday going down like 5%, et cetera, and we got feedback from a couple of people that maybe it was because we had moved the call to another day and what could this imply, et cetera. But basically, this implies that I was going to the seaside and Alessandro that Dennis mentioned, we couldn't match the 2 things together. So I mean, in our case, then we suggest that you don't read too much into the fact that we move a call or anything. It's -- yes, it's really everything for the long term. And the normal explanation is normally the easiest, let's say, just to clarify that because we found it very funny that because we moved the call, the stock price will go down because maybe you know what could this mean? It meant, again, we had other things to do and we just couldn't make it work. So with this comment, I think we have finished -- thank you for participating to our call. And as always, we are available for one-on-ones. And otherwise, we'll talk to you at the next call. Thank you.

Thank you, everyone. [ God speed. ] Bye.

Bye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.