Good afternoon, this is the conference call Operator. Welcome, and thank you for joining the presentation of Gruppo MutuiOnline first half 2023 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. 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 of Gruppo MutuiOnline. Please go ahead.
Thank you, and welcome, everybody, as usual, we will rely on the document that has been uploaded on our website, and we start this time from page 17 with the H1 highlights. And here, overall, we are pleased with the results of the first half. Revenues are EUR 197.1 million. That's up 25.5% year-on-year. EBITDA is EUR 52.4 million, and that's up 13.2% year-on-year. And then we'll see the contribution of the two divisions later. The EBIT is EUR 34.8 million, and that's down 4.5% year-on-year.
By the way, this is, you know, compared to the, the, evolution of the EBITDA, due to, the purchase price allocation exercise of Trebi that was completed in, the first half, so you have the amortization of the software that was allocated. And then finally, there is net income, that is EUR 19 million, down 31.7% year-on-year, and this is driven by the evolution of the EBIT and, by the, interest, the financial part, you know, paying, quite a decent amount of interest this year. The margin in the, first half is 26.6%, and that compares to the, the margin of 29.5% of the first half of 2022.
Just as a reminder, the first half of this year is not completely comparable with the first half of last year because we made two important acquisitions. One is Trebi, which is within the BPO division, and the other is a set of international companies of the Broking division. If we had not done these acquisitions, due to you know, the steep decline of the mortgage market, we would have seen negative evolution for both revenues and EBITDA in the first half. To understand better how the business is evolving, we have also provided the Q2 figures. And you can see in Q2, on the operating figures, the growth was stronger year-on-year than in Q1.
Also, Q1, there is one month missing of the international broking businesses, but, you know, even with that, we, we see some acceleration. So revenues are EUR 103.2 million in Q2 2023, and that's up 30.4% to Q2 2022. And the EBITDA is 28.9 million euros, and that's up in Q2 2023, and that's up 16.1% compared to Q2 2022. And the EBITDA margin is 28% in the second quarter of 2023, and that compares with 31.5% in the second quarter of 2022.
Looking now going into more detail before going into the performance of the divisions and the business lines, let's make a couple of comments about the Italian residential mortgage market. Overall, the market was contracting significantly since, say, September, October of 2022, and the decline was quite significant in particular in Q1 of 2023. It turns out that the decline in Q2 of 2023 is possibly even worse. You know, we have a drop of gross originations. This is the actual market figures, so this is the actual mortgages of 46% year-on-year in April, 34.8% in May, and 41.7% in June.
And by the way, this is in a situation in which we are back to some remortgage volumes, so there is today some demand for remortgages of people switching from variable to fixed. So there, in recent months, we are seeing growth year-on-year, actually, for the market. But the big surprise is that purchase mortgages are down 40% year-on-year, which is, by the way, worse than what we would have expected. And today, if you look at the leading indicators like credit bureau inquiries, we continue to see figures around 20-25%. And so we expect to see a continuation of this decline.
In fact, you know, we were saying before that, you know, we could see a recovery in the second half of the year, or like a better performance, but Q3 is possibly not so promising. Of course, Q4 was completely impacted last year by the interest rates, and was already significantly down. So for Q4, the comparison will be much easier. So certainly we will keep that effect. But apart from that, it remains today a weak market with no particular sign of consumer demand improving. The positive is that there is some remortgage demand, but still with the usual problems of the banks not wanting to do these mortgages or not so much.
But, you know, there are people that want to see that, variable rate mortgages and, and they are knocking on our door or, you know, on the market door to try to switch to fixed. So this is something that was, that is, a positive in a situation which in general is not particularly bright. So this is mortgages. One important thing to say is, that today mortgages, and we provide the figures of the breakdown of the revenues, business line at the end of the year, but mortgages are, certainly, you know, mortgage-related businesses are no more than 30% of the revenues of our entire group, and the same is true, looking at the separate divisions.
So despite the fact that, you know, this is Gruppo MutuiOnline, that we always come by the mortgage market, today, you know, especially because mortgage business has declined, this is only a minority portion of what we do. And in fact, you know, we still have, despite a very difficult mortgage market, a good performance, because, we are a highly diversified business today. Now, going back into the divisions, on page 20, we have the figures of the Broking Division. The Broking Division is up, in terms of revenues, to EUR 89.2 million in the first half of 2023. That's a growth of 32.7% year on year. The EBITDA is EUR 28.2 million.
So that's a growth of 11.4% year-on-year. And of course, the EBITDA margin is down, so today it's 31.6%, and it was 37.6% the year before. But we know that the growth, to a large extent, is due by, Actually, the growth is due to the consolidation of the international businesses. And you also remember that those companies used to have a margin, an EBITDA margin, it was much lower than our standard EBITDA margin. So there was a margin dilution, and this is true even if, you know, year-on-year, those companies perform better, you know, than where they were in the hands of the previous owners.
So this is the performance of the Broking Division. You see the EBIT for the Broking Division follows more or less the same evolution of the EBITDA, and because this is there are no particular news in terms of amortization or anything below the EBITDA line. And if you look at in isolation, on the next page, you see that the performance is even better. And we are doing EUR 46-47.9 million of revenues, up 45.3% year-on-year. Again, this is so because we, we, mostly because we changed the consolidation area, of course, but still, you know, there is a better performance in Q2 than in Q1.
The EBITDA is EUR 15.9 million in Q2 for the Broking Division, and the EBITDA margin is 33.2%, which is higher than the EBITDA margin for the entire half, for the first half. In terms of, you know, where this performance comes from, you know, we had a very strong gap, which is the negative performance of the credit market. And so the mortgage market caused a significant contraction of our credit broking business line. And we expect, by the way, this to continue to happen at least in Q3, and then we hope to see some stabilization in Q4, both because of the better year-on-year accounting and, you know, hopefully we get regional issues.
Insurance broking is a bright spot, because, you know, inflation is helping, and so we continue to grow in the first half, and we expect to see growth in the second half as well. And I remind you that insurance broking is Italian insurance broking. Telco and energy comparison is also a bright spot. We have quite a strong year-on-year growth, and this is because we are selling more and more energy contracts. And this is, by the way, because, you know, we see both the favorable situation of demand and also the impact of all the improvements that we have made to how we operate the business, you know, since the acquisition of SOS Tariffe. And so we expect growth here also in the second half of the year.
This remains an industry sector, however, where there is a big problem of mis-selling by aggressive telemarketers. So we, you know, or there are a lot of operators that pretend to be a comparison website and aggregators, but instead they are like, you know, lead generators that then try to sell aggressively contracts that are not in the interest of consumers. And this is not positive for the industry. We hope that sooner or later, someone will intervene. And then there is e-commerce price comparison. Here, we have growth in the first half, but we also see some signs of a slowdown in the second half. I think it's the impact of, you know, a slowdown in consumption.
So this is a mild impact, but still, you know, we are going from growth to, you know, growth or, you know, maybe minus something. But like, it's, you know, more or less in line with what you would expect to happen, say, with GDP or consumption of the country. And finally, the international market, this is, you know, where we are going to put in terms of comment and reporting and revenues, et cetera, where we are putting the international businesses that we acquired. You know, these businesses are mostly dealing with insurance products, and there is globally a lot of inflation in insurance premiums.
This is helping, clearly, demand for, you know, comparison services and intermediation services, so this is a positive. Consumers are switching more, and also, you know, we have continued to apply our best practices, and, you know, little by little, you see that things are having an impact. So for these two reasons, I would say, we are delivering good performance in these businesses, and we expect this to continue for the second half of the year. And we will, you know, for the same, because of the same drivers, basically. And with this, I'm with the Broking Division, so I'll let Alessandro continue.
Yeah. Thank you, Marco. So we are on page 23 with the highlight of the first half of the year for the BPO division. As you see, revenues have grown from EUR 89.8 million to EUR 107.9 million. That's a 20.2% increase year-on-year. At the EBITDA level, the growth was a little smaller. The growth was 16.3%, from EUR 21 million in the first half of 2022 to EUR 24.2 million in the first half of this year. The EBITDA margin decreased from 23.4% to 22.4%, so not a significant decrease, but some of it, yes. The EBIT margin decreases 20.5% year-on-year, so from 14.8% to 11.8%.
This is actually a decrease that is complete, you know, well, it's basically completely due to the impact of the PPA of trade. If you add them back, it's more than EUR 5 million, and therefore, the trend indeed is would be very similar to the one of the EBITDA, which show a growth double digits, you know, between 12% and 13%. So basically, there is really no, no, no significant information in this decrease of the EBIT margin. It's just the impact of the purchase price allocation.
If we, you know, just looking at these H1 numbers, you know, I wanna stress again what Marco said, that, you know, first of all, the growth is basically due to the acquisitions, but at the BPO level, you know, there would have been anyway growth, even with a constant perimeter in terms of revenues, there would have been, you know, some percentage point, like we saw in the first quarter. And again, this is a seriously complex year for the credit market. You know, not at the level of 2012, but still very, very hard year.
Against this background, you know, we believe that the group and the two divisions and the BPO division have shown a very resilient business, thanks to a very diversified business model at this point. So we are particularly proud of these results. Now, if we look at Q2, you see that, you know, the trends are similar. Here, there is a little impact of change in the consolidation perimeter, meaning, you know, in Q2, Europa Centro Servizi was already – 2022 was already in the perimeter, so this is, you know, you cannot really do a lot of reasoning comparing Q2 and Q1.
But anyway, if you look at them, when you compare them to the same period of the previous year. But if you compare to Q2 and Q1, you see that, you know, more or less, you know, the numbers are not that different, and they, you know, as we have said, when we were commenting Q1. So, you know, which is kind of the same message that we'd like to give, you know, barring significant changes in the environment, we do expect that, you know, in absolute numbers, you know, the at a consolidated divisional level, H2 2023 will be similar to H1 2023.
So the first half of the year, there will be obviously the quarterly seasonal trends, but you know, in EBITDA margins and in revenues, you know, we will not see the significant differences. But it's fair to say, instead, there will be very, very different dynamics at the level of the different business lines. So starting from the news, obviously, mortgage BPO business is hit by the environment and the market, as Marco commented, is going down, you know, more than 35% relative to last year, and obviously, you know, this affecting our, also our outsourcing operations.
Anyway, the decrease is basically a half what you see in the market, and this is probably also from one side, probably our clients are decreasing less. But the other part, which will continue in the second part of 2023, is the fact that we are seeing, you know, as also Marco commented, a restart, a growth relative to last year of remortgages. These are the people switching from variable rates to fixed rates. And you remember that in our mortgage BPO business, we also have notarial services. And this is changing relative to last year, when instead they were at a very minimum.
This is good in terms of revenues, not that good in terms of margin, meaning that the margins of this business are, you know, percentage-wise, significantly lower, and this is a variable cost, so it's not a worry. But obviously it will have, it has had, and it will have a dilution effect on our margins for the mortgage BPO business line. Good news in the medium term. I think I already commented on that, you know, before the summer, but we are, you know, the commercial pipeline, it's interesting. We confirm that we have acquired some new customers.
You know, obviously, the impact will not be seen this year and will probably be seen more clearly next year, where we also hope to see the market bounce back from the near low that we're seeing at this point. Anyway, for the real estate services BPO business line, we are seeing a double-digit revenue growth compared to H1 2022, and this is all basically related to the enlargement of the consolidation area, the acquisition of Europa Centro Servizi and Sovime, which are, you might remember, two companies that, you know, have basically services in collecting information for real estate properties, mainly for the NPL Market.
The outlook for H2 is stable because we are still seeing a significant run-off activities for the Eco bonus related activities. Now, obviously, these are in run-off, so they won't go on forever. And so 2024 will obviously see at a certain point, an increase in these activities. But we don't foresee any impact, a significant impact for 2023. So we are actually positive, you know, for the outlook for this business line, looking at the end of the year, at the end of 2023. Loan BPO business, it's one of our most stable business lines. So it's been growing, you know, high single digits.
Actually, this half of the year is through double, you know, low double digits. This is obviously also year-on-year, so relative to the first half of 2022. This is thanks to the strengthening in the area of subsidized credit. We won a contract with one of the big agencies that subsidized, you know, efforts for, you know, small and medium enterprise companies to invest abroad. We expect this trend to continue also for the second portion of the year. Insurance BPO, it's at this moment a bright spot. We see a very strong growth in turnover.
But, you know, part of it is due to an increase to the acquisition of the owner group, which we acquired basically in June 2022. So, for this first half of the year, we still see the impact of the change in the consolidation perimeter. But there is also significant organic growth, and this is basically due to, I mean, if you've been reading the news in Italy, there have been significant, you know, Weather Phenomena that have affected especially the North of Italy, the northeast, and also, you know, large cities, Milan, too. And that brings a lot of appraisal activities related to the assessment of the damages of these weather phenomena.
So, this happened in the spring months, but also during the summer. So, you know, I know it's not nice to say, but you know, this obviously helps our business. And so this growth for the organic part will continue also for the second part of the year. And Investment services instead has seen a drop in revenues. This is due to the difficulties, obviously, of the asset management industry in a period where you know interest rates are rising and you know you can buy a heap of Italian bonds and generate a decent return.
So obviously, you know, our client that sell investment, you know, open funds, open market funds, here are a little in difficulties, and they see a decline in the new flows, flows, to their assets. With the reduction of efficiencies here, it impacts also our revenues. Finally, we've had an excellent performance of the leasing and rental, BPO and IT, business line. This is obviously due to the impact of Trebi.
But, you know, even if we take that away on a like-for-like basis, the growth of our existing business at Agenzia Italia, you know, it would have grown, you know, high double digits, I mean, close to 20%. You know, thanks to basically the gradual normalization of the logistics in the automotive market, and the fact that anyway, our clients, the rental companies, the leasing companies, now know how to deal with it. The way they interact with their final clients is much more normalized, even if there are still difficulties. But they are able to forecast better, they're able to promise better.
There is more, you know, satisfaction in their services, in their clientele, and so this is all a positive impact, that impacts obviously also our services in Agenzia Italia. And this is something that will continue, so we are positive. So basically, summing it up, you know, the mortgage business and the investment services business are decreasing, especially the mortgage business. But all the others are going up, both organically and for the impact of acquisition. And so we remain confident of delivering, you know, similar results also for the second half of the year. And again, I believe that this is a very positive message for our shareholders. Thanks to you, Marco.
Thank you, Alessandro. We will conclude with some comments on the net financial position. On page 28, we have the evolution of the net financial position since December 31st, 2022, and basically, you know, we went from, you know, in terms of statutory net financial position to negative EUR 195 million, that is a debt of EUR 195 million. Then, you know, at the end of January, at the beginning of February, we acquired the international companies of the Broking Division, and that clearly absorbs significant changes. So we went to negative EUR 326 million. And now, at the end of June, we are at negative EUR 332 million.
Now, you know, you have seen that our operating performance in the quarter is actually quite satisfactory. So, you know, and maybe a couple of comments on why, you know, with a satisfactory operating performance, we have a net financial position that is not improving at the end of June. And the answer is seasonality of working capital, which we had last year and also we had in the past, mostly linked to Agenzia Italia. You know, Agenzia Italia and anticipates customs duty payments on behalf of its clients. And for operational reasons, the way that works the best to do this is to advance the money, and then we are refunded right away, so within week or two.
But this is a lot of money, and this is done in Italy, certain date. There is one date that is, you know, in June, that is at the end of the quarter. So we have a significant absorption of cash to pay the substitute, and then we have significant receivables corresponding to this advance. But that, you know, this closes normally quite rapidly. That's all. Anyway, so this is nothing extraordinary. We are back to the usual working capital cycle.
And, so the impact is this one, and also, just as a reminder, in June, in Italy, you pay, it's a month, where you pay the balance of your tax bill, and the advance of the tax bill for the year before, for the following year. So, and we also have to pay the final installment of the, like the substitute tax, for the asset revaluation that we did, two years ago. Yeah, exactly. This year we paid the third and final installment in June of the substitute tax to, you know, to pay for the revaluation.
So all being said, sorry, and the final thing, you will see it in, you know, we are going to publish as soon as it is ready, so later today, tomorrow, I don't know. The financial report for the six months, you will see this in the notes. Also, we have increased the liability for the put and calls, and this goes into the financial position for some of some minority shareholdings, in particular, Agenzia Italia, that Alessandro said before, very well. We increased our forecast and, of course, the increase of the forecast also entails a greater expected liability. So we decided to do this adjustment, and now that we have a clearer idea in these six months, this is also relevant.
So, I would say, this is likely to be, if the business continues to perform well, this is likely to be the peak, the financial position then, it to decline. And also, you know, if you do the number, et cetera, you know, we shouldn't be, we should be below, slightly below, the estimates you make, 3x EBITDA at the end of the year. And, of course, if we work very closely with the flexibility to, in a number of ways to deal with it. One of these flexibilities, by the way, comes from the investment in MoneySuperMarket, of which we are quite happy, but it's an investment.
So if we needed a little bit of money for an acquisition or because, you know, we need EUR 5 million to reduce the net financial position, this is something that we could touch. There is no particular desire to do, you know, it's just flexibility, and as of June third, 44 million shares in MoneySuperMarket were worth EUR 139 million. I think today it is a little bit less. But, you know, it should be the net net of the value of the MONY investment, which is, by the way, the way almost all our banks look at our net financial position. This is up to times EBITDA more or less, so it's super, super comfortable.
So this is, you know, all the comments that we have to make on the net financial positions, and I would close the presentation and start with the questions. So operator, please go ahead.
Thank you. And this is the conference call Operator. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you change your mind and wish to remove yourself from the question queue, then you may press star and one, and star, star and two, excuse me. Anyone who has a question may press star and one at this time. The first question is from Alexandra Sherlock with Equita. Please go ahead.
Hi, good evening. Thank you for taking my questions. Three questions on my end. The first one is on the mortgage side. So, as far as I know, recently, the government improved the technicalities behind the mortgage incentive for young people which are contributing quite an interesting amount last year. So do you believe these adjustments are working, or do you expect them to work and to contribute positively to the mortgage market in the coming quarters? Then the second one is a short one. On the PPA, the purchase price allocation. So what was the exact amount in the quarters of, say, two to more than 18 quarters?
Then on the M&A, as far as I understand, you're quite happy with the acquisitions in France and Spain. So maybe some follow on it. What were the measures you undertook to improve the marginality, the profitability, and what do you expect in terms of target EBITDA margin for the acquisitions in the coming years? Thank you.
Okay. Yeah, thank you, Alexandra. So, let's say the mortgage incentives, they are becoming more structural. By the way, the government said that the new tax on the interest margin of banks was justified, at least to some extent, by the desire to fund exactly incentives. Sorry, there is some background noise. So the new recovery tax on the interest margin of banks was supposed to fund exactly these measures. Of course, it will fund them different things, but clearly it's something that the government believes in also, probably because it's something that, you know, could have an impact in terms of popularity. And I wouldn't.
Certainly, the measures are becoming better, stronger, and more structural. Today, we don't see any particular impact. I would say, in general, they are a positive thing, but today, that's probably not enough to restart demand. So positive, but, you know, no particular impact in the short term. By the way, it's good, you know, if these measures remain measures. I think we included all the figures to do the-
Yeah, Marco, if you want, I can comment on this. Marco?
Yeah.
I can comment. Basically, the impact for the first half was around EUR 5 million for Trebi, Europa, and Luna. You know, you can expect, you know, just considering this EUR 5 million every quarter from now on. And
No, no, and you know,
The international markets acquisition of user.
Yes, the PPA for the international acquisitions will be done by the end of the year, so it will impact in the final quarter. If you want to make an adjustment not only for the PPA monetization of recent acquisitions, but for all the acquisitions. We are including that figure in the six months report. So as soon as it is published, you will find it or, you know, we can tell you where it is. It's easy to find it, you know, in the market on the topic. And in terms of the companies that we acquired, I mean, you know, it's still early.
I would say it's companies with a strong market, not, not strong market position, which is never a good thing to say, but let's say companies with a strong brand, you know, that operate in the market of comparison intermediation, you know, the first company in the sector, in the country should easily have, easily should be able to achieve an EBITDA margin north of 30%. This is what we see in many countries. So I think, that's something we can maybe also say for a company like Rastreator, which is a really strong brand name in Spain.
Of course, that requires a lot of efficiency, a lot of improvement, scale, but, you know, it's something that, you know, is a very reasonable ambition level. In other markets that are less mature, which could be France or Mexico, you know, there is a little bit more uncertainty on what is achievable. So, the focus is really on strengthening the businesses and, you know, working, you know, difficult to make the market mature by yourself, but, you know, it's possible to give a little bit of contribution. So, it's also a game of patience here. So improving what we are doing, but also being patient and helping to shape the market.
So 30 would not be easy, but maybe 20 would be a very legitimate ambition. But again, we don't know yet. We will first see how we close the year and then, you know, have an idea of what we can get, for the future.
Okay, brilliant. Thank you.
Mm-hmm.
Next question is from Filippo Prini with Kepler. Please go ahead.
A couple of quick questions. First, within the business line of credit broking, give some thoughts about beyond the consumer broking, and if in the next meeting, if there is could worsen market conditions line of the comparison. Then moving to another follow-up topic. First, is there any other stake where there are minorities, where it could be a write up or write down of the value of the put call option? And lastly, is it correct that maybe after the end of the semester, you have slight trim at your stake in MoneySuperMarket? Thank you.
Okay, sorry. Can you just repeat the last question on MoneySuperMarket?
Yeah, yes, if I look on the financial website on MoneySuperMarket, that today you're operating with an 8.02% stake. But I believe that maybe in the past month, the stake was marginally higher. So just a confirmation if you have trimmed the stake or it's unchanged.
Okay. Okay, let's start from MoneySuperMarket. MoneySuperMarket is still the same stake, you know, that we have 44 million shares. We are the same in December for at the end of December 2022. Actually, the last shares we acquired, the last time we communicated passing the threshold was around November, October, November 2022, and since then, you know, we've been stable. And regarding the other questions, and do them in reverse order. So, the valuation of the put call options, we tend to, you know, we do the exercise once or twice a year. You know, in theory, it really depends. Mercari could also be a business where there could be some adjustment.
Alessandro was saying that the company is benefiting from the claims, lots of claims that come from weather events of the past months. The question is also, you know, is this structural? Are we going to have extreme weather events next year as well, which would have an impact, or is it more of a passing effect? So we would like to think about this. The companies where we have, you know, there are two sizable companies where we have a put and call liability. One is Agenzia Italia, and the other is Mercari. So, you know, these are the two sources of potential variations to the liability. Okay.
Then continuing to go back to the other questions, credit broking, yeah, we didn't comment, and for a number of reasons, couple of years ago, we decided to merge MutuiOnline and PrestitiOnline, the two companies in mortgage broking and consumer credit broking. And we now report together credit broking, but, you know, I could say that, you know, in consumer credit, we don't see the steep contraction so far. We haven't seen the steep contraction that has characterized the mortgage market. Here, clearly, you know, it's not the this is a this is a suffers anyway from the fact that consumers maybe are a bit conservative today, but also it potentially suffers if lenders become very conservative and tighten credit.
I would say, you know, we haven't seen so far that there are no particular signs of a deep tightening or anything. You know, if we had a very serious recession, there are lenders that could get scared and intervene more, but most of the negative impact that we have in credit broking is attributable to mortgages. And we expect this situation to continue at least for the period over which we have visibility. E-commerce, you know, here it is more difficult to read what is happening, but the feeling is, here we are always competing with Google anyway, so that's also a potential source of uncertainty.
But the feeling that we have from you know, being in the market and so on, is that people are spending a little bit less, and so they're shopping around a bit less and so on. And possibly consumer credit is similar in a way, so not a great performance in a recession or in the situation in which consumer confidence is not great, et cetera, but not a disaster either.
Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time.
Okay. Then, thank you, everybody.
Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.