Moltiply Group S.p.A. (MOL) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the presentation of Moltiply Group First Half 2026 Results. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Marco Pescarmona, Chairman; Mr. Alessandro Fracassi, CEO; and Mr. Francesco Masciandaro, CFO. Please go ahead.

Well, thank you, and welcome, everybody, to our first half '26 call. This is Marco, and I will start commenting the results starting from Page 19 of our presentation. The presentation is on our Investor Relations website. And so let's start with the revenues. Revenues in the first half '26 are EUR 343.1 million. That's up 13.7% year-on-year and the composition is 63% from Mavriq Division and 37% from Moltiply BPO and Tech. The EBITDA in the 6 months is EUR 93.4 million. This is up 20.8% year-on-year and this stands for 65% from Mavriq and 35% from Moltiply BPO and Tech. The EBITDA margin is 27.2%, which compares to the 25.6% of the same period of the previous year. The EBIT is EUR 55.9 million. That's up 14.7% compared to the previous year. And finally, the net income is EUR 37.1 million and that's up 69% year-on-year. And of course, you know that the results are the sum of the 2 quarters and that in the first quarter -- in the first quarter of '25, Verivox was not consolidated yet. So you will remember we had a strong performance in Q1, both good organic performance and the consolidation of Verivox that was a big addition to our performance. If we only look at the second quarter, we are on Page 20, the results are different, and they are overall in line or possibly even slightly better than what we explained in the Q1 conference call. The revenues in the second quarter are EUR 160.4 million, and that's down 5% year-on-year. And the mix is 60% from Mavriq and 40% from Moltiply BPO and Tech. The EBITDA in the second quarter is EUR 42.1 million, that is flat year-on-year, and accounts for 60% from Mavriq and 40% from Moltiply BPO and Tech. The EBIT is EUR 23.6 million, that is minus 1.5%, and that accounts for 57% from Mavriq and 43% from Moltiply BPO and Tech. And finally, the net income is EUR 14.2 million, and that's up 42% year-on-year. Here, I think to comment and explain these results and what they mean and where they come from, it's better to look at the 2 divisions separately. So -- and well, I think we can rapidly look at the first half, but then the most interesting part is the second quarter for the 2 divisions. So for Mavriq in the first half, the revenues are EUR 217.4 million. That's up 31.7% year-on-year, but this again includes the consolidation of Verivox. The EBITDA adjusted for PPA amortization, we started providing this figure, the full year results, we are giving it here again, is EUR 51.9 million. That's up. Sorry the EBIT adjusted. No, let me read it the other way. The EBITDA is EUR 60.9 million in the 6 months. That's up 26.7% year-on-year and it's an EBITDA margin of 28% compared to the 29.1% of the previous year. Here, we are providing also the EBIT adjusted for the PPA amortization as we started doing in the full year results of '25. And this basically tends to track EBITDA because it normalizes the effect of acquisitions. And this figure was EUR 51.9 million for the first half, and that's up 23% year-on-year. And finally, the EBIT is, as reported is EUR 37.1 million, that's up 11.4% year-on-year. But again, the first half results are really the average of 2 very different quarters. And the update really is the second quarter. And on Page 22, we have the figures for Mavriq for the second quarter. And basically, revenues are EUR 96.9 million. That's minus 1.5% year-on-year. And this is a bit better maybe than what we expected. You remember, we said we would expect a contraction driven by the difficulties in the energy business because of the Iran war. And this happened, but the impact on the revenues overall, considering all the different business lines was negative low single digit. The EBITDA in the first -- in the second quarter is EUR 25.2 million. That's down 6.4% year-on-year and this is also possibly a bit better than what one could have expected. Of course, we invested a little bit more in marketing to compensate in part from decreasing demand, especially in energy and this also we have fixed costs. So it's quite normal that in this type of situation, we have a bigger contraction in EBITDA than in revenues. And finally, you have the EBIT figure that I'm not going to comment because this is really affected by how and when we started doing the PPA exercise for Verivox the year before. So this is really not meaningful in the second quarter of the past year, there was no amortization of goodwill linked to Verivox. It went in the fourth quarter. So this is the picture of Mavriq. And this is a picture that, of course, it's not a great picture after many quarters of growth, but it's possibly a bit better than expected. And starting from this, we try to give an idea of possible expectations for the future, even if it's very difficult to have a clear visibility because on the energy side, there is a lot of uncertainty. So we said in Q2, what happened? Basically, what was expected. So we had 2 businesses that had significant headwinds. One was energy because the market, especially in March, in April and May was really not functioning very well, and it started operating a bit better. So there was less switching in general in Italy and Germany in particular. But also, the credit markets were suffering in different ways in different countries like in Italy, the mortgage market is still down -- was down in the second quarter year-on-year. In Germany, where we have loans business, the market is also suffering and the banks are restricted. And so these are the 2 things that -- as we said at the beginning of the quarter that were hindering our performance. Whereas on the positive side, we had growth in Mavriq Insurance so this was the only area where we had real growth. And Mavriq Shopping instead remained stable, which is an improvement over the previous quarters. Now what to expect? We believe also because, of course, we have visibility of a portion a good portion of the period. We believe that the performance of Mavriq Energy and Telco, which is mainly energy will be better year-on-year compared to Q2, even if the market still is up and down. And by the way, July look good. August is a slower month and September is a bit uncertain, especially in these days, there are many things happening and it's not clear where it will go. But I mean, I would say, in general, we expect Q3 for energy to do better year-on-year than Q2 that had a very poor beginning of the quarter. Also in banking, the comparison year-on-year becomes easier. So this should also be a bit more favorable. And for shopping and insurance, there are no things that are basically expected to be comparable to Q2. So the things that were really suffering are going to do better and the things that we are doing well or okay, they are expected to continue. So overall, Q3 will be -- year-on-year, we expect it to be a better quarter than Q2. It's very difficult to say to have expectations for Q4 because again, this is mostly energy. So I would say I mean in energy, hopefully, this is a big quarter for demand, et cetera. If the market is functioning, this could be a good quarter. So back to normal growth, but you cannot rule out disruptions today. And so I think that one could have like Q3 that is something with some recovery, but not full recovery in Q4 that has full recovery, but there is uncertainty for Q4. So it's impossible to say that Q4 will be back to normal growth or where it will be because again, we are in the hands of the American President and a lot of other unpredictable people. And finally, we can comment on some positive news that came out in July and then with more details a couple of days ago. Basically with respect to shopping, the European Commission issued a decision against Google for violating the self-favoring prohibition of the Digital Markets Act. And this is very positive. I would say it was expected last year with all the pressure lobbying, et cetera, even things that are expected, you cannot take them for granted. But this happened. And actually, it's a very good decision. I think it's worth reading it, especially if you follow the company in detail. And basically, this decision explains that the shopping box, the box with the different apps that is shown at the top of the Google search results. This is a comparison shopping service, and it's very explicit about this. And for this reason, they say self-favoring is continuing because Google is putting this in the search results and competitors don't have the same opportunity. And the implications of this are twofold. One, this is a further reinforcement to what everybody in our sector says, which is that the Google abuse of self-favoring didn't terminate in 2017, but continued and is still continuing. So this is like a very clear confirmation of this. And also the other potential outcome is that Google will have to come up with remedies. And the decision is very specific. So the remedies, if they have to be compliant, have to get rid of this box or to give competitors the possibility to appear with another box. We don't know if Google will comply or not because it didn't happen in the past. So we don't know if it will happen now. We will find out in the coming weeks. But again, we have now a good legal anchoring for further steps and the indications seem to be that they want to ensure compliance. Again, it's not clear what will happen if compliance is not established, how enforcement will work. But in terms of what is okay, what is not okay, I think the decision is very explicit. And that's why I think it's very interesting reading. And with this, I think we and possibly depending on the compliance mechanism, this could have possibly a favorable impact maybe -- well, certainly not in Q3, but possibly in Q4 or afterwards for Trovaprezzi. With this, I'm done with the update on Mavriq and hand it over to Alessandro for Moltiply BPO and Tech.

Yes. Thanks, Marco, and hello, everyone. We are on Page 24. Situation on the Moltiply BPO and Tech side is slightly different than the one that Marco described for Mavriq, meaning that there is more continuity in the results of Q1 and Q2, and therefore, there's not much to read in comparing H1 or Q2. Those basically, the messages are similar. And I would say that also looking forward, we're looking at very, very similar continuing trends for Q3 and the rest of the year, obviously, also it's always taking into account seasonality. So on Page 24, you see revenues are down 8%. Here, it's important to note that this is an impact due mainly to the really shrinking refinancing market in mortgages. If we take away the pass-through value of notary services, meaning the ones that we invoice to banks, but we have exactly the equal amount that is invoiced to us by notaries, the revenues would have grown 3.7%, so more in line with the rest of what you see here. And EBITDA grew double digit as we expected. Actually, the reason -- so it grew faster than revenues, even the revenues net of notary services grew from EUR 29.3 million to EUR 32.5 million. That's 11.1%. And it means that we see a growth in the EBITDA margin from 21.4% to 25.9%. The EBIT adjusted for PPA amortization shows a growth of 4.1% from EUR 23.9 million to EUR 24.8 million. And EBIT instead has a growth of 21.9% year-on-year from EUR 15.4 million to EUR 18.8 million. If we look at Q2 financials, you will see similar messages. Actually, the decrease in revenues is a little stronger. It's 9.9%. But again, even here, you would have seen growth in revenues if you take out the impact of the pass-through notary costs that we invoice to banks. The EBITDA grew 12.1% year-on-year from EUR 15.1 million to EUR 16.9 million, the EBITDA margin grew from 21.4% of revenues to 26.7% of revenues. And at the EBIT level, again, here, there is anyway the impact of the PPA. You see a growth of 23.7% from EUR 8.1 million to EUR 10 million. And obviously, the EBIT margin grows from 11.5% to 15.8% of revenues. Let's see what's behind the things. Again, we are happy of what's happening. It's basically in line of what we explained and told you would happen. We see a reasonable growth in revenues and margin expansion. That's basically due to a mix effect in a reduction in services like the paranotary services, which have lower margins, and those are substituted by higher-margin services. But also we have been working a lot on efficiency and management is very focused on pruning services that are not as effective in reducing capacity where possible and obviously, also using and implementing AI to do this. And so we're starting to see some results there. And so you see this margin expansion. Now if we have to look at H2, again, I would say that we will see at the division level, similar numbers to the one that we have seen for H1 year-on-year. When you enter the different business lines that make up the results of the division, trends are a little bit more nuanced. I would say that the star of H1 was the banking business lines, even if mortgages had headwinds, the one that we described with the reduction in refinancing. We still had growth in other services and mortgages, thanks to increasing market share in some of our clients. And we also had interesting growth from the loan services and from banking and also some of the and also in real estate year-on-year, we saw growth, thanks to the new clients that we have this year. Other services were more weak like the one to NPL services because the NPL demand is down. But for example, this is one of those areas where we focused a lot in adjusting capacity and therefore, bringing back to profitability some of these services, which because of overcapacity, were not contributing positively to the EBITDA. Then if we -- for H1, we have in Moltiply Lease this business line, it's always delivering stable good news. And what happens here, again, it's growth and maybe not double digit, but our market position here is very strong in terms of market share. So it's hard to grow in terms of market share. We grow thanks to the fact that we are able to increase the number of services that we sell to our clients, and this is what's happening. The trend here is that we are -- we reached some results in a year also thanks to some one-off effect. And then the following year, we are able to fill the one-off effects with more stable revenues. And this is basically what's going on also this time. So we expect that to continue in H2. And I said that banking was star in H1, the laggard was a little bit Moltiply Insurance, meaning that even if the results are basically at the revenue level, just slightly below the ones of '25. And at an EBITDA level, we are slightly better on this one. This thing is actually going to turn around for H2. So meaning we'll see probably a little slowdown in banking and instead, we will see a growth in claims. And the reason why I see a growth in claims is basically because especially in Q2, we had not a lot of claims coming up from -- or we didn't close a lot of claims from weather events. We didn't have a lot of rain in the early months of the year. But as you have experienced, I mean, if you have experienced with the Italian weather, actually starting in June and then in July and also in August, we have started seeing weather hail events and rain events and floodings and so on, which obviously are not good news generally speaking, but the good news here is that, thankfully, a lot of people are insured and therefore, the damages that they suffer create claims to insurance companies, and therefore, work for us as loss adjusters or as TPAs in services for insurance companies. By the way, you know that here as an engine for growth, it's not just the fact that there are these events, but also that we are experiencing, and we're seeing that there is more penetration in terms of insurance to these events because, as you know, starting January 1, 2026, we have seen the complete effect of the law mandate to insure companies, even small ones to these events. So the events that are happening now should impact -- should create more insurance claims than what has happened in the past. And so we are already seeing more claims that insurance companies are trusting in our hands. But we had a very, very hot summer, and that is according to the weather experts also will probably create more events in the fall months. And so again, here, we do expect Moltiply Insurance to perform well in the second part of the year. And if events are really significant then also in 2027. So to sum it up, again, I expect that Moltiply BPO and Tech will continue to grow at an EBITDA level as it has done in the first half of the year. So a strong performance, stable performance from Moltiply Lease, probably an acceleration in insurance and maybe less sustained growth in terms of pace from the banking business line. But all in all, we should see continuity in the good results in our view that we managed in the first part of the year. So thanks, and back to you, Marco.

Thank you, Alessandro. Excuse me, operator. Can you hear us or not?

Yes, I can hear you, Marco.

I confirm all the speakers' line are currently open.

Okay. So Alessandro, did you hand it over to me or not?

Yes, I did hand it over to you, Marco. Yes, I finished and I handed over to you.

Lost like 1 minute of audio. Okay. Perfect. So thank you. So back to the presentation, a quick comment on the net financial position on Page 28. I think there is nothing special to comment here. Actually, it's negative EUR 453 million. There is an explanation of generated cash, which is the operating performance and how the cash was used. Part of it was used for buyback, part of it was used to buy a bit more minority shares. And this is what leads to this net financial position, both the buybacks and the minority shares were already known. So this is -- this was easily predictable. And net of the minority shares, this amount is EUR 315 million, which is improving compared to the EUR 328 million at the end of the second -- of the first quarter. We don't have other comments to make. So I think the best is to open it to questions. So please, operator, can you do that?

[Operator Instructions] First question is from Tommaso Nieddu, Kepler Cheuvreux.

I have a few. The first one is for Marco on Energy & Telco. You are now guiding to an improved year-over-year performance in Q3 versus Q2. So can you help us quantify what improved means? Are we talking about the business still declining year-over-year, but at a lower rate? Or could it already return to growth during Q3? And if there is any differences in Germany versus Italy. But if I'm not mistaken, maybe you already answered on the last one. The second one is for Alessandro on BPO and Tech, which delivered continuous margin expansion also versus Q1. How much of that is simply the mechanical reduction in the para-notarial pass-through revenues and how much actually reflects underlying efficiency gains from technology? And the very last one, if you can give us an update on the strategic review around the BPO and Tech that you mentioned a couple of quarters ago, given that also we got some newspaper talking about it.

Okay. Well, I'll start with the first one and then we'll -- okay, we'll share -- we will see the others. So Energy & Telco I think what we are saying, I think that the overall message is this will be a quarter that looks better year-on-year than the second quarter, but it's still not a normal quarter. So it's something in the middle. We had in the past a string of quarters of double-digit growth. This is not what should be expected. What one should expect is something that is better, possibly between a bit better or a bit more better than Q2. In energy, there are things that are possibly growing and others that are not growing. Like where we have the biggest difficulties is actually in gas because gas is now very expensive. And so that is affecting demand. So I would say it's not even very useful, and we don't really know if we are going from negative to plus 1% in energy or from -- I don't know, I mean not giving you the right numbers, like minus 10% to minus 1%, but it's clearly an improvement. But again, the message is, overall, we should expect a quarter of -- I mean, we are expecting because September is still open, a quarter that is better than the Q2, but it's still not a full recovery. A lot of things are still not working or not working at complete speed. Then on what you call the strategic review and maybe Alessandro might want to add something. But I mean, we don't have anything particular to communicate. Nothing that is -- that needs to be communicated has been decided or done. So there is really no particular update.

Yes, I second that. I don't think there's anything particular to comment. And even the news basically in the end, we were saying what we told the market that considering or there are reasons for which as we look at the future, it can make sense to have separate ways for the 2 divisions, but that's the only thing that I think we can confirm. So instead of going back to your question on the composition of the improvement of the margin expansion, the frank answer is that I haven't made the analysis. And by the way, everything in the end is a mix effect, meaning that it's not like the increase in efficiency is in every single business line and in every single services because these are not things that you do across the board. These are things that are very focused on the things that you are doing in the different services. I mentioned that, for example, in the cadastral services for NPL services, we had a situation where actually the margin was probably negative, and we were able to turn that around by reducing capacity and by improving efficiency in the things we were doing. That is a piece among the fact that we also had the -- and also the AI, it is not across the board. The kind of things we're doing exactly for the kind of services we do are hard to do. They require the vertical expertise that is needed to get into the single process. And so it takes time. We do process by process, client by client. And as we are able to see the improvements, then obviously, they reflect sometimes to the business line, sometimes we share them with clients. So that's the situation. In any case, it's important to say that if you have looked at our numbers, you know that we are now in a situation where our EBITDA margin is getting closer to the maximum that we have ever had. So it means that it cannot just be the mixed effects, but that also the things that are the different composition of the services are going up, and I would leave it with that.

Next question is from Aleksandra Arsova, Equita.

Three on my end. The first one is just maybe a recap on what you said on the trends in the coming months and quarters. So summing up altogether, it looks like we could expect plus size, a positive growth in EBITDA in the third quarter, maybe low to mid-single-digit growth. And so vis-a-vis what you said during your first quarter results call in May, it seems to me that the EUR 200 million, let's say, consensus EBITDA target for the full year '26 is maybe slightly more achievable currently vis-a-vis a couple of months ago. Is this correct? So this was the first one. The second one is maybe a little bit of color on your end on the potential, if any impact you could expect from the banking consolidation situation in Italy, since there are a lot of things going on around banking consolidation now. The third one, maybe just a curiosity on the situation with Google. Since you mentioned that the European Commission confirmed that the abuse by Google continues after the last...

Aleksandra, there is a lot of background noise.

Sorry, okay.