Good afternoon. This is the Coral Call Conference operator. Welcome, and thank you for joining the presentation of Gruppo MutuiOnline Third Quarter 2022 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. Alessandro Fracassi, CEO, and Mr. Francesco Masciandaro, CFO. Please go ahead.
Hello. Good evening, everyone. First of all, let me explain why Marco, our chairman, is not with us. He unfortunately got stuck on a flight that has been significantly delayed. He was supposed, obviously, to be chairing this call, as always. As he physically cannot do it, I will be doing most of the talking. I guess you will have to bear patience with me on some of the stuff. Here we are. As always, we will use the presentation that was published recently on our website. We will start from page 16, where we have the highlights of the results, first of the third quarter and then of the nine months.
First as the whole group, and then we'll get into the details of the two divisions. We also have a section where we'll give you a little bit more of a color on our latest acquisition stream. Starting on page 16, as you see, well, Q3 has seen a decline in both revenues and EBITDA. Decline is not that significant in terms of revenues. We go from EUR 79.4 million last year to EUR 71.4 million, a year-on-year reduction of basically 3%.
If we go at the EBITDA, we see that there is a decline from EUR 22.9 million Q3 2021 to EUR 19.6 million in 2022, which brings the EBITDA margin percent percentage-wise from 22% to 28.3%. The reduction year-on-year percentage-wise is 14.1%. This reduction would have been significantly lower if we hadn't had the effect that we had in quarter three 2022 of around EUR 1.8 million. Which, of course, related to the acquisitions that we have done recently, and they are basically both for, you know, financial and legal advice.
If you had to put them on the two divisions, they would probably be two-thirds on the broking as the largest acquisition has been on the broking side. And the rest would be on the BPO side. If you sum those up, you know, we would have been over EUR 21 million, around EUR 21.5 million. It basically tells you that also the reduction on EBITDA would have basically been the same. Now, we normally don't like to put out one-off. This time they were sort of significant, especially legal fees. When you're international, taking controls of legal fees, it's a little bit more complex.
Anyways, we decided to put them all together here and give investors a flavor of them. There they are. You know, basically Q3 looks worse than it should because of this. At the EBIT level, we see a similar decline. We go from EUR 18.1 million to EUR 14.8 million, and EBIT margin decreases percentage wise from 25.3% in Q3 of 2021 to 21.3% in this year. The picture on net income for Q3 is instead positive. We go from EUR 9.7 million in Q3 2021 last year to EUR 10.7 million, with an increase percentage wise of 10.4% in Q3 2022.
Main reason behind this is the fact that we have recorded dividends from our participation in MoneySuperMarket during Q3 of 2022. Those impacts you know significantly, and they outweigh the reduction that would have been there relative to basically you know the operations of our standalone group operations in the consolidated perimeter. If we look at what this means over the nine months of 2022, we basically see you know what we refer to as basically a stable situation for the nine months.
You see that revenues show a decline of -1.7% from, you know, EUR 230 million for the first nine months in 2021 to EUR 226 million for the nine months of 2022. At the EBITDA level, we go from EUR 17.5 million to EUR 65.9 million. That is a reduction of EUR 2.4 million. Also to this 65.9 million, you would have to add up the EUR 1.8 million that would basically bring you to, you know, a stable result for the nine months at EBITDA level. At the EBIT level margin, we see an increase.
This is also due to the fact that we have less depreciation, as we explained in recent quarters, on the past acquisitions, or you know the ones that we have done from 2015- 2020. EBITDA margin is basically stable from 29.3%- 29.1%. Same thing for the EBIT margin percentage-wise. It actually grows a little bit from 31.6% - 32.6%. The net income, on the nine months, you can see obviously the positive impact of the dividends and also of the reduced depreciation.
You see that we go from EUR 33.2 million- EUR 38.5 million, an increase in nine months of 16%, with a net income margin that grows from 14.4% - 17.0%. Now let's get a little bit into the two divisions. First of all, as always, we talk a little bit about the mortgage market, which obviously has not exactly been an engine in these nine months, and especially in Q3 2022. As we have commented before, we are seeing a contraction in the residential mortgage market. This contraction is obviously due to the expected collapse of the remortgage volumes.
We are also seeing now a moderate contraction of purchase mortgage volumes, which had not been there previously, you know. As we commented before, until June, we have seen a growth in the demand for purchase mortgages. Now reality is that the impact of uncertainty, the impact of inflation pickup, and also partially the impact of interest rates has created a decrease also in purchase mortgage volumes. There is a significant factor we have already commented on it. Relative to last year, we don't have any more the subsidized mortgages for young people for the technical reason that we have explained more than once.
Good news here is that the government is amending finally the law. We do expect with high probability that starting at the end of the year, so in December, we should see again the volumes from the subsidized mortgage deals for young people. Obviously, you do understand that as this is a very clear expectation of the market, we are having a backlog effect, so people are waiting to get their mortgages, when will we be able to get the offer from banks or the subsidized one. There is, you know, an expectation effect that is also delaying more than it should the market.
There will be a boost afterwards, most probably, when we will see the amendment to the law and the volumes and the offer from banks of the subsidized market, mortgage market coming back. By the way, it's subsidized in terms of guarantees, not in terms of pricing. It's a state guarantee for mortgages that go over 80%. The data from Assofin, the usual quote that we have in this section, show that basically there was a decrease of gross new mortgages origination of 20.7% in July. A slight increase in August, which is anyway a very small month, so it's not that significant. I mean, in terms of seasonality, it's very small, August.
Again, a decrease in September 2022 compared to the same month. Overall, in Q3 2022, the volumes of remortgages fell by more than 85% year-on-year. While purchase mortgages are down by single-digit percentages in Q3. The data from CRIF, which are the forward-looking data because they are not about the disbursed mortgages. They are about the queries by the banking system to the credit bureaus. They kind of look forward. CRIF is again the main credit bureau in Italy, show a 22.6% year-on-year drop in credit reference inquiries for residential mortgage application in Q3. The results in October are basically in line with this. Actually, they're a little worse, with the drop getting very close to a fourth, so 24.5%.
Again, this is impacted by what I said before. Clearly the collapse of the remortgage market, but also the weighting of mortgages with the state guarantee that you know we do expect to come back by the end of the year. You know, as we look forward, we have to take into consideration the sharp increases in interest rates. Let's say that if the uncertainty could even be worse.
The positive that we see for Q4 and especially for Q1 2023 is the fact that we will see the government restoring the functioning of the subsidized mortgages market for young people. By the way, young people means up to 35 years, which is maybe 30 years old, which I think is a very Italian definition of young people. Okay. Now, if we look just at the broking division and we look just at Q3, you know, we see a decline of 8.5% from Q3 2021, from EUR 32.6 million to EUR 29.9 million. This decrease has been basically all in mortgages.
Mortgages are our product with one of the most significant positive margins, and therefore the EBITDA has decreased more in terms of. Obviously here you also have, needless to say, the impact for Q3 of the one-off that we have not reported here again, but remember, it's about, you know, EUR 1.2 million. You should add them up. For the broking. EBIT, it's down similarly from EUR 12.2 million to EUR 9.2 million. The EBIT margin goes from 37.3% to 30.7%. Overall, if we look at the nine months, here again, it looks more stable than Q3.
We see revenues going down 1% from EUR 98 million- EUR 97.1 million over the course of the first nine months 2022 relative to 2021. The EBITDA has decreased from EUR 36.7 million-EUR 36 million. Again, you should add up the one-off cost in this case, so it would have gone up a little bit. Anyway, the margin is still very rich, 37.5% in the nine months of 2021 relative to 37% in the nine months of 2022. Not to worry about the percentage margins of the broking division, obviously. EBIT, the similar pattern, EUR 32.4 million- EUR 30.4 million, a decrease of 6% percentage-wise, relative to last year
The EBIT margin decreases from 33.1%- 31.4%. As we look, you know, some color around this number, basically what is happening is that the mortgage broking revenues are down significantly in Q3, and all the other business lines are growing, but the growth was not enough to offset completely the decrease in the mortgage broking. It is reasonable to assume that we will see the same trends also for Q4. Q4 for the mortgage broking will see still a decline similar to what we have seen in Q3. The other business lines are still expected to grow. What happens in 2023 is obviously more difficult to forecast.
What we can tell you is that the comparison and the impact, obviously, of remortgages will not be there anymore. Will still be there, but will not be as significant and as evident as we see here. You know, the trend that we will see in 2023 will really depend on the mortgage market and for purchase mortgages. That will obviously depend on in terms of house prices, interest rates, overall affordability, and most of all, what is the trust that the consumers have in the future, which is impacted by a lot of factors. Just let me comment on the fact that you know, as a lot of articles are talking about expecting a collapse in house prices.
Even, you know, all these articles when they come to Italy, they show a less significant decrease because reality is that, you know, house prices have grown recently, but not as much as it has happened in most countries in Europe. The Italian house prices index, you know, never really completely recovered and never really reached to the top, that being before the financial crisis of 2008 and 2012. Also here the decrease, we do not expect it might be there, but we do not expect it to be as significant as in other countries that have seen much more recovery of the housing market. Now to my dear BPO division.
BPO division in Q3 shows a basically stable revenues, a little bit of growth from EUR 38.8 million- EUR 39.5 million. This is basically due to a change in the consolidation perimeter, because also here the impact on mortgages was what was significant, and you know, basically, all the things that we have said in at the end of June are still true. I mean, here we've seen in Q3 the BPO mortgages was down more than 40% year-on-year. It's just thanks to the fact that we've seen that we have done acquisition and also to the fact that other business lines had grown, that we were able to keep the results stable. The EBITDA is also stable here.
If you add back, you know, the part of the one-off that is relative to the BPO division, we basically would not have seen a decline. The EBITDA margin, you know, would have, that declines from 23.9%- 21.9%, would have basically remained stable. At the EBIT level, we also see a decline, and it's from 5.9% - 5.6%. Here, if you added back, you would have seen a growth as you have seen in previous months, in previous quarters. This is because, again, we are seeing less depreciation relative to the purchase prices of previous acquisition. Anyway, the reported EBITDA margin goes down from 15.3%- 14.2%.
Obviously, if you then look at the nine months for the BPO, here you see an overall decrease from EUR 132 million - EUR 129 million. That's basically a 2% decline year-on-year. This is because obviously in the first quarter we had no acquisitions, so there was no change in the perimeter. That's why the nine months look a little worse than the Q3. The EBITDA is decreasing from EUR 30.8 million -EUR 29.9 million. It's a decrease of basically 2.7%. Also here, you would have to add back the one-off if you wanted to get a more fair comparison.
The margin decrease is 23.3%-23.2%. Let's say it's basically stable. If you consider the one-off, it makes it really stable. We're particularly happy with this ability also through acquisitions, but I guess they're part of the deal to be able to maintain our profitability percentage-wise. At the EBIT level, we see an increase EUR 17.4 million-EUR 20.7 million. That's almost a 20% increase in the nine months. The EBIT margin grows 13.1%-16.0%.
Let me say you know a few words on the performance, but the reality is you can you know go back three months, read what we said about the first six months, and that's very applicable also for this Q3. So we have substantial stability, as you seem to know, and especially if you take the effects of the one-offs. If you go at the business line level, there is a very significant reduction, as I said, you know, of mortgage BPO, and that's mainly due to refinancing and also to the paranotarial services. This has been offset by the positive performance of all the other lines, which are all growing, but in particular two.
One is the insurance BPO, where we have a small impact of acquisition, but there is also organic growth. Also our real estate services. In real estate services, as a reminder, we have organic growth, thanks to the work that we are doing on the Superbonus and the Ecobonus and all of those state subsidies measures. Also there is the change in perimeter because of our acquisition of Europa. What do we expect for Q4 is basically something, again, of stability. You know, we expect it to be very similar to what we've done in the last nine months.
Actually, there will also be, for Q4, two months of consolidation of Trebi Generalconsult, our most recent acquisition in the software area, which we will consolidate for two months in November and December as we have closed it in the end of October. This is a perfect lead into our next section where we give a little bit of where we are, you know, just so that we remind everyone what are the major announced acquisitions and where they stand. We have acquired from our view what we have acquired. We have announced the signing of the deal to buy Rastreator and LeLynx. We gave you details during the last call.
They are the leading insurance aggregators in Spain, France, and Mexico. Rastreator is both the brand name for Mexico and for Spain. The timing, the deal was signed on the 20th of August 2022, and we still expect, actually, it's perfectly in line with our expectations, to close in the first week of January 2023. Just as a reminder, we paid EUR 150 million plus net cash adjustment with a locked box mechanism, which we will see the effect, obviously, when we do the closing. Again, as a reminder, expected revenues of EUR 62 million and a normalized EBITDA of EUR 8 million in 2022. Trebi is the most recent acquisition that's in the BPO area. I also have two pages that I will go through quickly.
It's a leading provider of software solutions for leasing and long-term rental, and it also has something in the non-performing loans area. We signed and closed the deal on the 28th of October 2022. We paid for an enterprise value of EUR 85 million, which was paid at closing, except for EUR 12 million that are retained as escrow for, you know, possible liabilities in the future that guarantees that the selling party has given us. Expected revenues for 2022 are over EUR 18.9 million and a normalized EBITDA of EUR 8 million in 2022. Normalized meaning this was not really one entity.
It became one entity during the course of 2022. There will be no report of EUR 8 million in 2022, but it's in the EUR 90 million. Anyway, let me give you some details on Trebi. The last things before I hand it over for questions. Trebi, for those who are not familiar with the Italian financial software market, is a vendor of niche and critical software designed for the specialty lending market and specifically for leasing. As you see on the page, they basically have three lines. One is the leasing, which is the most significant. As you see from the chart here, they represent, you know, around 80% of their revenues. We have two smaller business lines.
One is dedicated to solutions for NPL services and UTP, especially for UTP. This is significant because UTP are contracts that are still alive. Therefore, you know, even if they are managed by services, they will need a system that keeps the contract alive and current with all the characteristics that an NPL doesn't have. There is also some software for factoring the overdues and other debt collection activities. Then there are some other loan products that are supported by this platform, consumer factoring, some loans for small and medium enterprises, and also some CQS, so the salary guaranteed loans. It is used by a couple of players in the market, although it is not the leading player in this market.
As you can see by the numbers we're showing you, there is a you know, significant EBITDA margin. It's probably normal for a software company, over 40%. The revenues are stable and you know, 80% of the revenues are not. Not only the revenues are stable, but you know, around 80% of those are recurring because they are related to licenses or to for long-term projects that generate they have very high visibility. Then there are special projects that get sold every year. This the company was founded back in 1980 and has today 121 employees.
We basically bought it from the founders, and as we like to do, we gave a new house to an entrepreneurial story in IT in the Italian market, and we hope to be able to grow it further. The reason why we hope to be able to grow it further is because we see significant commercial and industrial synergies with our Agenzia Italia. You know, here we are putting together two leaders in the market. I am on page 28. Agenzia Italia is the clear leader in BPO service for the leasing market and for the rental market. Trebi is the leading provider of core solutions to the same players on their IT platform. We have known them for a long time.
We know the management very well, and we have collaborated before, so this really made a lot of sense. What we hope to be able to do now is basically to create an integrated offer of BPO and IT at the same time. By the way, we already were offering some IT solutions with our BPO services. We will integrate this. We will be able to even be more prompt in the future as we will see probably the border of what is done by a machine and what is done by a human progressively shift towards IT.
I think we will be able to manage this process and to help our customers go through this and be able to be partners even in the longer term and also to bring more value to the table and therefore retain a high, a more significant portion of the value that we create. This integrated offer will also go through joint tailored development of new features. Some of them, we had already developed them in-house, and we integrate into the more industrial platform of Trebi. Another interesting development is the fact that we hope to be able to leverage our stronger position of BPO services in the long-term rental market.
Trebi is already offering something, but it's small pieces. We plan on creating, developing, and offering in the market a full-scale IT platform dedicated to the segment of rental. We use our unique and distinctive skill in Agenzia Italia and the existing Trebi product to be able to get there and hopefully be very successful on the market. You know, commercial synergies are obvious. It is also important when there are, you know, special projects, new startups, and because obviously you need at the same time, both the IT platform and the BPO services.
Being able to offer them under, you know, as a one-stop shop will also enable us to be closer to the clients also in terms of how we structure the pricing, offering everything as a service, which is something that Trebi had not done in the past. It's something that we can leverage now, as you know, including maybe at the beginning our IT services into an overall service and then to be distinguishing after. You know, in the end, I think we will have interesting and significant opportunities of talking to the market thanks to the combined effort.
Finally, you know, we—Trebi, when it was outside the perimeter, it was obviously pulling projects for their clients, which were also our clients on Agenzia Italia side. Some optimizations which would have helped us as a BPO servicer were not high on the list of the things that the clients wanted to do and to develop, you know, because they outsource, and they don't necessarily see any use in making the back-office machine more adept. We would react to this by either developing some software in-house or just, you know, by letting the client bear the inefficiencies. Now that we can handle both, we really believe that we can also create some optimization in our internal operations of Agenzia Italia.
This cost reductions can both be passed by clients and can also, you know, create an opportunity for margin. I mean, let's say they create a margin pool that can possibly be divided between us and our clients. With this, I am at the end of the presentation. It's okay. I think it took me half hour. I think it's decent. I leave this remaining time for questions. The floor is participants.
Thank you. This is the conference call operator. We will 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 two. Anyone who has a question may press star and one at this time. The first question is from Aleksandra Arsova with Equita. Please go ahead.
Hi. Good afternoon to everybody. Thank you for taking my questions. There are a couple of questions on my end. The first one on the last acquisition, Trebi. Just to understand a little bit better, what are your expectations in the coming years in terms of growth, also thanks to the commercial synergies you were explaining before? A little bit of color on this. This, a follow-up on the M&A. This is the first acquisition in the BPO, of a software company, basically. We see this also in the operating margins, which are relatively high. Is this a first step to transforming the BPO business in a more IT and software-like business, or is just, let's say, a one-off acquisition of this type?
Then a second question on the organic business, just to understand if I got it correctly. You were mentioning before that, without this one-off effect of the cost for advisory for M&A.
Yeah.
For your EBITDA in the third quarter would have been declining at about low single digits. Should we expect this trend also for the fourth quarter, so a low single digit decline in EBITDA for the fourth quarter? Is this correct, the way I interpret this? And a follow-up on this. You were giving some color on the mortgage market also in the first part of 2023 saying that maybe we will see this backlog effect of people waiting to get the mortgage.
Yeah.
Thanks to the government incentive or whatever. On the other hand, we have a tough comparison vis-à-vis the first quarter of 2022.
Of course.
Where our mortgages were growing. Do you think that in the first part of the following year, will be prevailing the positive or the negative step? It will be similar to the fourth quarter or slightly better?
Okay.
Thank you.
No. Okay. Well, let me—I mean, if we look at the overall market, in the first quarter of 2023, there are actually two positive effects if you just compare relative to, you know, gross new mortgages done, relative to the first quarter of 2022. Because we will not see the impact of declining remortgages. Probably the comparison at that point, you know, summing up the two stuff might be positive or neutral. But, you know, then it's really hard to talk about the overall market, and what is gonna happen also because there is really, really some uncertainty. I do not expect. Okay.
Overall, I am positive for Q1 2023, while Q4 will still see that important decline that I mentioned. Relative to the acquisition of Trebi. Again, I'll start from the more strategic question. First of all, we have been investing a lot in IT, so, you know, I don't wanna give the impression that BPO is just, you know, services and manpower lent to our partners. Otherwise, we would not have any EBITDA margin between 20%-25% as we have enjoyed in, you know, since we have been a public company. You know, obviously, technology has been a significant piece of our value proposition.
Most of the technology we have been users of ourselves and not necessarily selling it to the customers. What we are seeing is that as customers are completely rethinking you know their technological framework and also rethinking of how they can restructure their operations to deliver more value to their own customers you know technology plays a big role, operations play a big role. We wanna be a you know a reference point for both things. You know, does that mean that we will do other acquisitions? Well, it means we will keep looking.
I have to say that now after, you know, spending, you know, roughly EUR 250 million, we are kind of, you know, not in the position to be very aggressive for the next months. You know, if we look forward and say, you know, we will keep investing definitely in technology, and if something interesting comes up, you know, we will try and look at it. You know, we have to look at where we stand in terms of financial resources at this point, and also at the uncertainty that there is around. You know, we will not be announcing major acquisitions in the first six months of 2023, frankly. I really don't think so.
Will we be looking at new opportunity in IT in the verticals of BPO? I think we will. Will we be able to see growth in Trebi in 2023, thanks to the commercial synergy I talked about? I do think so. What will that mean? I hope to be able to generate growth of, you know, high single digits. You know, frankly, that will also depend on really how fast some of these things can be led to the market. Then also bear in mind that we are really thinking of putting together Agenzia Italia and Trebi structures.
We bought it through Agenzia Italia because we believe that we need to create a single entity, which will have a software arm and an operations arm, but which will be sold to our customers as a single service. You know, that will take more than one year, you know, as I think too. We expect to be really the one-stop shop to for companies that will look at their delivery model, which is a piece of software and a piece of processes, you know, as an outsource function. You know, I think it's gonna be a very interesting proposition. That means that we also will not try to optimize just one of the two visions.
The reason why we wanted to have one single management structure is that we don't want to be somebody who is incentivized only on selling software, instead of selling software with services and vice versa. We really plan to blend the two offerings and the two organizations.
Okay. Very clear. Thank you.
Thank you.
The next question is from Marco Cristofori with Intesa Sanpaolo. Please go ahead.
Thank you.
Thank you, everybody. Thank you for taking my question. First of all, on Rastreator and LeLynx, if you can give me some color on what your expectation for 2023 and how this market are developing, and a clarification. Are they going to be consolidated from the 1st January to 2023? My second question is on subsidized mortgage for young people. If you can add some color on how it's working, the new mechanism. The last one is on MoneySuperMarket. You now stated that you are going to stop the acquisition, but you have a huge investment there. Are you going to continue in 2023 to invest in MoneySuperMarket or you would say how you are now? Thank you.
Okay, I'll start from the bottom. Yeah, MoneySuperMarket. You know, first of all, what I said before about acquisitions remains true for everything. Also, you know, financial investments like the one in MoneySuperMarket are also limited by our overall ability to do more things with our capital looking, you know, in the next six months. You know, whatever we will do will be very visible because as you know, we need at this point every 1% that we buy, we will need to announce it. You know, I'm not going further, but you know, it will be very visible. Whatever we do or not do, you will very clearly see it.
In terms of subsidized mortgages, basically, as I said, here, what has happened is that the way the law was written, you know, basically made it impossible in a fast growing market, in a fast growing interest rate market to offer those because the saving that banks had to offer relative to the market price to young couples or to young people was pinned to whatever were the absolute total interest rates shown in the three months before. So you were backward looking to the total interest rates and not to the spread, and now this has been corrected. It will be corrected with the amendment to the decreto Aiuti ter, I believe.
The one that's gonna be approved in the next week. That should settle once and for all the problem that have created the end of the possibility for banks to supply that mortgage. That was a good business for banks and a good business for consumers. It was just impossible to offer them the way the law was structured. Rastreator in 2023, well, first of all, yeah, it means we will consolidate it if everything goes according to plan. Not everything depends on us, but yes, we will consolidate starting January 1st, 2023.
What we expect for 2023, well, first of all, remember that these are mainly businesses relative to car insurance and insurance markets in general. You know, we don't see any of, you know, those house pricing trends or mortgage trends that are impacting all of Europe. You know, we tend to be positive relative to what their growth is. There is also, you know, positive news of new entrants in Spain in the insurance segment with new entrants. New entrants in the market are always a positive for comparison engines.
You know, I will not say that our expectations have changed relative to the one that we said at acquisition. You know, we are working through the closing. You know, let's say that the view for 2022 is confirmed in these three months, but it's not like you know, we can really make significant progress for 2023, not even having entered the companies at this point. You know, there are no significant negative trends in the market themselves. Actually, if there are some trends, some of those are positive, as the entrance of a new player in the Spanish insurance market.
Thank you very much. Very clear.
Thank you, Marco.
The next question is from Filippo Prini with Kepler Cheuvreux. Please go ahead.
Yeah. Hello, good evening. There are three questions from me. The first, if you can share with us the cost of funding for the new, if any, additional line of debt to finance the acquisition that you announced. Second, there are basically two questions on the market of mortgages. First, do you still see or you plan to see some impact or refinancing, basically some bounce back refinancing for some client that decide to switch from a variable to fixed, fearing that the variable rate-
Yeah.
Will jump even further? If you can maybe quantify what could be the impact, because I get that this depend on the, on the stock of mortgages with younger vintages, with a lot of principal yet to be amortized. The last question, still on mortgages, still on the part of subsidized market for guarantee. Few weeks ago, the Spanish paper, Expansión, but even others reported that, this backlog of mortgages, should be unlocked, but just for one month, so basically for the month of December. Any comment from you on that, if just some not correct piece of information reported by newspaper or maybe something about the effective time horizon of the reopening of this part of the market. Thank you.
Okay. On the last question, frankly, I don't know. Maybe Marco had an answer to this. I don't. You know, in our internal discussion, this thing has never come up, so I am not expecting it to be true, and it just a news that it's not correct. You know, I will have to get back on this, you know, because it's a detail on how the law is written. It would seem, you know, unreasonable to do an amendment on the law when the mechanism was very clear, and why you wouldn't fix it for forever. It would seem unreasonable but, you know, government can do unreasonable things, so, you know, anyway, unreasonable things.
In terms of refinancing, yes, we are seeing, you know, some bounce back at times, especially each time there is a spike in rates, there are a lot of people asking to switch from a variable rate to a fixed rate. The problem is, you know, that it's what we really still don't know is how many of those will actually close. Because, you know, when rates go fast, when they spike up fast, you might not be quick enough to substitute it, and then think that it doesn't make sense to go from such a high fixed rate, which you still do it.
In terms of demand, yes, there is a demand. How big it is, it's, you know, it's different. What we see is not that significant, but it's there. I mean, it's clearly there. I think we need to see the end of the rise for people to really think and be able to take decisions on whether they wanna switch. That's my answer. In terms of the cost of funding, I will refer you back, and then we can go through it together.
Basically I will refer you back to our six months review, where we gave everyone all the details of the funding, because these were loans that were agreed upon, you know, already when we published the results in September. We published the results for the first half of June. They are in the section of our results, of our reports that it's called, you know, the Eventi Successivi. The things that happened after the closing. Let me just get it, and we can go through it. As we said. Just a second. Then maybe also Francesco can also give me a hand on this. Let me be there. Okay.
We're talking about four financing. One is within Intesa, which is EUR 40 million + EUR 60 million. That's EUR 100 million in total. We have Euribor six months + 2%. Crédit Agricole, it's Euribor three months, which is EUR 60 million, is Euribor three months + 1.665%. Unicredit, which is EUR 50 million, is Euribor three months + 1.80%. Banco BPM, it's which is EUR 50 million, it's Euribor six months + 1.8%. You see, we are talking about Euribor + maximum a 2% . You can easily do a calculation. Maybe Francesco has some average cost that we wanna disclose. I'm not sure, but Francesco might know.
Sorry, now we don't have the calculation on this.
No, I mean, if we are not ready to disclose it, I mean, the details are there, but.
Yes. No, the details are correct. The details are correct.
So-
all the
You can
There are the aging on all the loans that are calculated on the IRS tax. You can see a recap that I-
Yeah.
Just sent to you. Okay.
Yeah.
Also, aging on all these loans, about 50% of the values of these loans, there is a coverage on a fixed rate.
Yeah. Of course. Because there is a hedging that we have done on the variable rates.
Yeah.
Anyway.
Yeah.
All the details again are in the Q2 reports. I think this can, you know.
I think you get the gist of what is the overall cost of the financing for these two significant acquisitions.
Yes, of course. Many thanks.
Okay. I would say it was actually a pretty good deal that we were able to close, you know, relative to the current market.
The next question, yes, the next question is from Paolo Cipriani with CP Capital. Please go ahead.
Good afternoon. A couple of questions from my side. First of all, regarding Rastreator. Hi, Alessandro. Regarding Rastreator and LeLynx, the market share, the market potential over there in Spain and France, could you just maybe say something about those two geographic place even compared to Italy, how are they compared to Italy? That's the first one. The second one is regarding the integration of Agenzia Italia and Trebi. Is this kind of new, I mean, entity that is gonna come up from the integration sort of like a unique player in the system? Will there be any other competitor? If so, how you plan to deal with the pricing with competitor? Thanks.
Yeah. Yeah, good question. Let me first handle the second one. No, there will be nobody that has, especially in the leasing and rental area, same offering, and of this size. Definitely not. Is there someone who might try and follow a similar strategy but not starting with a leading position that we have? Yes. Just to give you an idea, you know, Accenture could do it, right? They bought a platform from the failed banks a couple of years ago, and they do offer some outsourcing services, so they could create something like this.
Now, nobody has a platform that is leader both in operations and in the market and in the IT. How do we plan to counter competition? Well, I believe that a joint offering is much stickier than a single offering. I think that there are benefits to bundling also in coping with competitors. Related to Rastreator and the Italian and Spanish market, I remember we gave, like, I believe some details in the last presentation, you know, three months ago. Here, let me say, first of all, there is still space relative. I mean, Italy, Germany and U.K. are the most developed market for comparison.
France and Spain are still a bit behind. In which terms? Well, first of all, both in terms of how significant is the participation of players to the comparison, there has been a more restrained and so lower competition among players, and so lower willingness in Spain and France to enter comparison engines. If you look at the direct market, or the market that is done direct in Spain, France, relative to Italy, it is not that different. What is different is the share of comparison platforms that is funneled to the direct insurance. This is again, because there has been a restrained of players to take part into it.
The moment that there is a triggering competition in the market, inevitably, we believe those insurance company, those direct insurance company will have to look at the comparison platform as the place where to get their volumes. In the end, there is a significant advantage that comparison engines have relative to direct insurance because their marketing efforts are more effective. Because obviously, you know, if you are one insurance and you do commercials, you know, you are betting on the fact that you have the best product for that customer when they finally come to your website. We are sure that we have the best product for that customer as a comparison engine. Therefore, in the end marketing, there is a clear industrial advantage in marketing expenditure.
In the end, comparison platform are the best way to acquire customers for direct insurance, so the least expensive way to do it. You know, this is a trend that we believe will be there. What does that mean? It means that, you know, from something but don't quote me on the percentages, but I think it's something will, you know, the market potential for comparison engines, you know, could at least double. I mean, if you look at what is the percentage that comparison engines have today relative to what is in Spain and France relative to what it is in Italy, then obviously it needs to. We need to be able to unlock the market.
That's the potential if we unlock them, even if there is no growth of the direct relative to the traditional. You know, there are obvious reasons why we also believe that the direct relative to the traditional can also grow.
Fair enough. Thank you.
The next question is a follow-up from Aleksandra Arsova with Equita. Please go ahead.
Yes, thanks again.
You, so you saw me alone, and you wanna really beat up on me, huh? Okay.
That's not true. No, no. Two very short ones. The first one, I remember that maybe one year ago, some months ago, you had mentioned before the increasing rates scenario and everything. You were mentioning the fact that in an increasing rate scenario, maybe you could be able to increase the fee to receive from banks and financial institutions for the brokerage activity. Now, of course, the scenario is a recessionary one and everything, you know. Do you still expect maybe in the coming year to start negotiating with banks or it's not possible in your view? This is the first question.
No. Yeah. I see your point. Let me, you know, talk a little bit about this. I mean, I don't remember the specific comment, but let me say some things that we can clarify on this. Well, first of all, when there is any inflationary scenarios we have. There will be, you know, potentially also inflation in house prices, and we will see. You know, the unit value of that we get out of mortgages will also grow. I mean, it's connected to the house price and to the average house price. That is a positive.
What we are able to negotiate in terms of, you know, percentage fee up is when there is more appetite for credit and there is more competition among banks. Now, that was something that we believed, when there is no recession, but there is interest rates that go up, you know, that creates the opportunity to do it. Now, obviously with low demand, there might not be. That, you know, that there might be more difficult. But, you know, I hope I'm answering the. You know, we really need to understand what the housing market and the mortgage market will do in 2023.
The reality is we don't have that visibility because there are so many factors, and some of them we have commented on before.
Yeah, sure. Okay. The very last one, maybe a little bit of color on the other divisions. You were mentioning that you are expecting them to grow. Just maybe to recap. The last time we talked, you mentioned the fact that maybe you expected some positive effects from the increasing insurance premiums. Are you already-
Yeah.
Seeing some effects? Maybe, I don't know, comment on e-commerce since now everybody is expecting consumption to drop. You are seeing some negative effects on this?
No, no. Okay. Okay. Yeah. Well, I mean, as of today, we are seeing growth, and also in fourth quarter, we do expect growth in the other business lines. Then, you know, if there is a significant drop in consumption or obviously. Well, first of all, inflation, it will also create inflation in premiums, and therefore will also create inflation in our fees for the insurance. The e-commerce, and especially e-commerce comparison caters to the most price-sensitive people in the market. So obviously there might be a slowdown in consumption, but I believe that as we, you know.
Some consumption that cannot be compressed will actually probably create more need for comparison, more people going to e-commerce, and wanting to check what prices are there, for using our e-commerce comparison. I'm, you know, not worried about, you know, the trend in consumption for our e-commerce comparison website, exactly for the things that I've said today. Obviously if there is a very significant and drastic slump in consumption, you know, as everyone, we do live in the Italian market. I am more worried that competition is established correctly, you know, and then Google Shopping competes fairly with Trovaprezzi. That is more important.
You know, I think, as people become more price sensitive because they see inflation, as prices rise, people need to compare more. Just the need to compare more means we will see more traffic to our e-commerce website. I think we can be positive looking at that.
Okay. Brilliant. Thank you.
Thank you.
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Excellent. So thank you everyone for taking part in this call. I hope I was able to, you know, give you know, an overview as Marco and myself did together in the past. Obviously, if you have follow-up questions, please contact us, and we'll be happy to, you know, set up a one-on-one calls, to clarify all the questions that both as analysts and as investors you have on our results and on the outlook of our group. Thank you very much, and we'll see you in a couple of months. If we don't talk, Merry Christmas and Happy New Year.
Thank you. Bye.
Thank you. Bye.
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