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JDC Group AG reported robust financial results for the first quarter of 2025, with a 17% increase in turnover to €62.2 million, driven by strong performances in its AdvisorTech and Advisory segments. The company’s stock responded positively, climbing 5.02% following the announcement, contributing to an impressive 8.5% gain over the past week according to InvestingPro data. JDC’s EBITDA rose by 24% to €5 million, reflecting effective cost management and organic growth strategies. The company maintains a strong financial health score of 3.03 (rated as "GREAT" by InvestingPro’s comprehensive analysis system).
Key Takeaways
- JDC Group’s Q1 2025 turnover increased by 17% year-over-year.
- EBITDA saw a significant rise of 24%.
- The company’s stock price increased by 5.02% after the earnings announcement.
Company Performance
JDC Group has demonstrated strong growth in Q1 2025, with turnover reaching €62.2 million, a 17% increase from the previous year. This growth is attributed to the company’s strategic focus on expanding its AdvisorTech and Advisory segments, which saw revenue increases of 11.3% and 55.9%, respectively. The company’s emphasis on data standardization and processing has bolstered its competitive position in the German insurance market.
Financial Highlights
- Revenue: €62.2 million, up 17% year-over-year
- EBITDA: €5 million, up 24% year-over-year
- AdvisorTech segment revenue: up 11.3%
- Advisory segment revenue: up 55.9%
Market Reaction
Following the earnings announcement, JDC Group’s stock price rose by 5.02%, reflecting investor confidence in the company’s growth trajectory. Currently trading at €24.39, the stock sits about 13% below its 52-week high of €28.05, indicating room for potential growth. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels. However, analysts maintain a strong buy consensus with price targets ranging from €31.76 to €36.58, suggesting significant upside potential. For deeper insights into JDC’s valuation metrics and more exclusive ProTips, explore InvestingPro’s comprehensive analysis tools.
Outlook & Guidance
JDC Group has set a median full-year turnover target of €255 million and an EBITDA target of €19.5 million. The company aims for long-term growth, with a vision of achieving a turnover between €450 million and €500 million and an EBITDA of €40 million to €50 million. This ambitious outlook is supported by the company’s strong track record, with InvestingPro data showing a robust 28.91% revenue growth in the last twelve months and a healthy 26.86% gross profit margin. The potential for a €1 billion valuation underscores the company’s ambitious growth plans. Get access to JDC’s complete financial health analysis and 10 additional exclusive ProTips with an InvestingPro subscription.
Executive Commentary
CEO Sebastian Grafmeyer emphasized the company’s growth strategy, stating, "We want to give you these turnover and EBITDA figures, and then it’s up to you to give us the valuation limit." CFO Ralf Konrad highlighted the importance of scaling the platform, noting, "Growth is important. And as long as gross margin in total is increasing much faster than costs, as long we are able to scale the platform..."
Risks and Challenges
- Geopolitical events: Minimal impact observed, but potential future risks remain.
- Consumer confidence: Slightly low in April, which could affect future growth.
- Competitive landscape: Larger platforms are growing faster, posing a challenge to JDC’s market share.
Q&A
During the earnings call, analysts inquired about JDC Group’s M&A strategy and its plans to leverage cash reserves. The company expressed confidence in deploying cash reserves for mergers and acquisitions, indicating a focus on organic growth and platform expansion.
Full transcript - JDC Group AG (JDC) Q1 2025:
Jana, Moderator/Host: ladies and gentlemen, and a warm welcome to today’s earnings call for the JDC Group following the publication of the financial figures of q one twenty twenty five. The CEO, doctor Sebastian Grafmeyer and CFO, Ralf Konrad, will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to the q and a session in which you will be allowed to place your questions. Please note that the management team has another meeting right after this one. Therefore, we unfortunately cannot exceed the time set for this meeting.
With this being said, I’m happy to hand over to you, Sebastian.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Thank you, Jana, for your kind words. So a very warm welcome from the entire board member team with JDC Group. So with me in the line is Ralf. And this time also, can see Ramona, doctor Evans, and Markus Markus Rex. So welcome.
Yeah, so a strong start into the fiscal year 2025. So we are very happy that quarter over quarter we can present very nice figures with the organic growth between 1520%, as we promised. And then you can see that all our guidance and goals are well in sight. So I’m Sebastian, Cofounder and CEO of JDC Group, and with me here in the line is Ralf Konrad. I am responsible for strategy products and investor relations, public relations.
And here’s Ralf.
Ralf Konrad, CFO, JDC Group: Yeah. Hi there. I’m responsible for IT platform finance, legal, and m and a. Sebastian.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: So, yeah, Ramon and Markus, we introduced. So one slide on our business. Most of us or most of you know us pretty well. So we are now a, yeah, classical platform business. That means we take in the data of all the financial service product providers.
That’s more than 220 insurance groups now, all the asset management platforms, investment companies, the mortgaging banks. We standardize the data. We process the data, and then we make the data visible in all kinds of systems, our own or the systems of our intermediary clients and provide the data to individual brokers and agents, more and more the German banks, the insurance companies and via our smartphone application also to our 200,000 direct clients. Right now, we have about 6,000,000 datasets contracts on the platform. So many contracts have many date more than one dataset, so this translates in almost 3,000,000 contracts with about 2,300,000 clients.
Yeah. We’re one of the best established tech stack and we see ourselves as tech leader in the processing field of insurance contracts in Germany. So yeah, we are very happy to introduce you these figures for the first quarter twenty twenty five. You can see that we have a nice turnover growth of almost 17%. So turnover grew from CHF 53,300,000.0 to CHF 62,200,000.0.
You see well in line with last year’s results. So after this little dip we had due to the Ukraine and energy crisis, you see quarter over quarter over quarter that organic growth is more than 15%, and you also see that the platform is scaling up. And now EBITDA grew by almost 24% from EUR 4,100,000.0 to EUR 5,000,000. So a very good start into a good year 2025. Yeah.
So to make it a little bit more difficult for you, we changed the structure of our company from time to time. What we did end of last year was that we had three banking licenses in the group, one in Austria and the other two in Germany, One with our the biggest one with our phenom company in Berlin, the other in Vienna, and the other was our liability umbrella for our Jung DMS intermediaries. And obviously, there are synergies in combining these three licenses into one, and that’s what we did. And we moved it to the biggest license, that’s Ofinum Private Finance in Berlin, And therefore, about 2,700,000.0 in turnover or 100,000.0 in EBITDA moves from the adviser tech segment into the advisory segment. So the rest of the figures stay the same.
The over company view is the same. It’s just if you look at the individual segments, then there is a little change between adviser tech and advisory. And this is why, if you see our press release, there’s also a pro form a figures inside. So that’s basically the the more realistic growth rates. And you see the the the real growth rates as to the new allocation with the segments.
AdvisorTech growth looks a little bit too small, and then advisory growth looks way too big, but now we think it’s the right allocation. It’s obviously liability umbrella business means that we have a direct client contract and this means it’s the better home for these clients and contracts is indeed advisory business. So the the all our segment allocation becomes more right than it was before. So saying this, so we we give you, like, two sets of of figures. One pro form a is is what the the is is much closer to the truth.
And there, can see that, as I said, overall turnover growth is 16.7%. AdvisorTech grew by 18% and advisory by 18.8%, so quite stable growth in both segments. But as to this reallocation, you can see that AdvisorTech now looks smaller or growing smaller with 11.3% and advisory therefore looks at outstanding growth is 55.9%, but as I said, the green figures here are the more right figures. So this is as if the allocation or relocation has been performed last year. So as we said, we’re very happy that the growth comes from all product groups and all business lines and also all sales channels.
You can see that, again, our investment financing business is up by 23%, so a module of EUR 4,000,000 on top. But also insurance is growing strongly. And again, Q1 is the recurring revenue quarter, and this is very impressive that also here, we already added double digit growth with plus 13%. And then you can also see that real estate, mortgage, all the alternative products are back, growing with 19%. So overall, very happy that all product groups are contributing to our overall growth.
So same goes for the sales channels. You can also see that the broad IFA business grew by about 18% after taking out the liability umbrella. Officially, it’s 9%. Same growth as major customers, growing with 20%. Advisory, very nice growth figures as well.
So we’re back at growth of almost 19%. So adding up that now, you can see that the relevance of major customers are increasing. We are now at almost 30% participation of the major client segment as compared to 70% now in the broad IFA business.
Ralf Konrad, CFO, JDC Group: Okay. Then let’s go into the comparison by quarter. If we look at the situation by quarter, we have seen a very dynamic development after the impact of the Ukraine crisis. Before this and since then, our group has grown double digit. And 2025 is the first year in company’s history with the Q1 starting with more than €60,000,000 turnover.
It’s almost as strong as the Q4 twenty twenty four, and this was the best quarter in company’s history. So a very good start. And as Sebastian mentioned, it’s very nice to see that the seasonality of our business remains the same over the years. Only the level is increasing year after year. And this is a result of our growing asset base in the insurance and the investment segment.
And we all can see and feel the impact of this worldwide tariff discussion everywhere, and the word Liberation Day will surely be the unwound of the year 2025. But although there’s a lot of uncertainty in the capital markets, we have a positive view and a positive forecast for the further development of our group in this year. Sebastian will elaborate on this later on. Yes. As Sebastian mentioned, due to the group’s reorganization, the segment reports also shows pro form a figures for the year 2024 for both segments.
The column 2024 adjusted shows the figures at 2024 as if the reorganization had already been effective last year. And like in the previous quarters, the AdvisorTech segment showed a very strong performance. The revenue was up by more than by 11.3%, adjusted 18% to EUR 53,800,000.0, and EBITDA increased by EUR 20,300,000.0 adjusted 23.7% to EUR 5,000,000. Due to this reorganization, personnel and operating costs fell in the segment. But even adjusted, we only see a very little movement in the cost basis and means that costs are more or less stable.
And this was different than the previous quarters where we had the consolidation effects of the top 10 group means that we already compared a quarter, the actual quarter with the consolidated top 10 group, comparing it to a quarter last year without the consolidation of the top 10 group. And the first quarter twenty twenty five is the first full quarter without these consolidation effects. TOP 10 was fully consolidated Q1 twenty twenty four and 2025. And against this background, the figures are often are even more pleasing in my point of view. The advisory division continued its very good development 2024 and showed also a strong start into 2025.
Revenue grew by 55.9%, pro form a 18.8%, which is, as Sebastian mentioned, rather the real growth, to EUR 13,600,000.0, and EBITDA grew by 80.4%, pro form a 53.6 to €1,200,000. In our opinion, very convincing figures, representing the best in history first quarter for our advisory business. And thus, a big special thank to all advisers who decided to work exclusively with us and to the whole team of our Finum Group in Germany and Austria. This is really excellent development. Let’s come to the cash flow statement.
We started the year ’twenty five with cash and cash equivalents of EUR 24,700,000.0. Cash flow from operating activities in the first quarter amounted to EUR 6,300,000.0, which is a plus of approximately 60% compared to the previous year. Very good development, which makes us happy. And in contrast, the cash flows from investment and financing activities are only slightly negative in this first quarter because we had smaller capital calls from Sumitas, only smaller capital calls, and we were not active in buying back shares in the first quarter, which was the case in the first quarter last year. So cash and cash equivalents increased by EUR 4,100,000.0 in the first quarter to EUR 29,500,000.0.
Cash on hand last Friday, some days ago, was €32,900,000. As always, some information about share price and the bond. The share price was very weak the last weeks. You know this, and it’s now developing positively. We saw €21.4 at the end of close Friday, and Sebastian will give you a little bit more color on the developments of the last weeks in in a few minutes.
We are happy that the market has responded positively to our publication today. Share price was up to 23. So market cap is now again around €300,000,000. There are no changes in our treasury shares. We still own a hundred and 47,000 shares JDC shares.
No. There’s no change in the bond as well. It’s valued at €20,000,000. Trading is stable at a 5%. Obviously, bondholders are happy holders.
The first termination option is beginning 11/01/2026 for the bond, and the bond is due by the November 1 in 2028. Shareholder structure shows no no changes. Okay. Let’s come to the spotlights. We have three spotlights for you.
The first is to give you some color on platform activity, some further, yeah, thoughts about Liberation Day and what’s how’s the world developing and what is the influence on us and some inside information about last weeks and the share price. Okay. Operational key figures. They have developed also very positively, but we start with a number that seems to be negative. The number of orders decreased by 4.3%.
But nevertheless, the expected commission from these orders increased clearly. The reason for this is that we have processed much more orders in lines with higher commissions like life insurance, supplementary health or health insurance. And we have a smaller decline in the P and C business where we received lower commissions. So you will not see influence on the P and L. You will see positive influence in the P and L from this development.
The number of contract transferred transfers continue to grow by 14% significantly. And let me please mention from an already very high basis. Assets under administration, whereas some parts of them are assets under management in in our own asset management division, increased by 6.5 to more than €7,500,000,000, And the very convincing development is shown by the annual net premium of our insurance assets that grew by more than 15% in only one year and is now approaching the 1,400,000,000.0 mark, which is a, yeah, great development. To summarize, we see a further continuous development of our key operating figures, and that’s since years. And please allow me to add that this development, it did not fall from the sky, but as a result of ongoing sales work over many years.
And at this point, even if this if this is rather unusual for a CFO and especially for me, I would like to thank our sales colleagues. Good job, Markus, to you and the and sales team, and also to all others who develop IT operations, HR, and all other important areas of the group. That’s it from my side. Sebastian?
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Yeah. Thank you, Ralf. Yeah. Just some words on Liberation Day. You could see that many of us were in shock when this the beginning of of April, these announcements were made, and you can see that, basically, stock prices went down quite a bit.
There is the good news. There is no primary effect at all on our business, So we do not have any trade relationships. All the products we need is software with European contracts, so we have no direct influx of or input importance of of any tariffs. And the only little thing is that obviously if capital markets are concerned, our trailer fees basically trail with the capital markets. But again here, DUCs was at a record high this morning.
So in Europe, we are back on track. And also The US is trading just I think it’s it’s 9%. So there’s hardly any primary effect. Secondary, obviously, we are dependent on consumer confidence. Obviously, in April, that was quite low.
This means that, yeah, customers are buying less in funds and security, but interestingly, they’re buying more in insurance. We don’t have the April figures yet, but we can see that also here there might not be very big effects of this impact on the on the markets. But still, the share price showed a little bit different picture. Maybe rather than the next page, you can see that our share price took a hit, but this was not really maybe I close the window real quick as we are sitting here in the equity forum in the hotel in Frankfurt. Yes.
And thank you very much. So you could see that it’s it seemed to be that our share price took a hit by by tariffs or or discussion about that, but actually had a a completely different reason. There was one of our dear shareholders that was a long term holder with about 200,000 shares who sold his fund company to a company that did not like small caps. And after well, we we gave them a buyer, but, obviously, that was very hard to find a price in these volatile markets, so they just sold it in in smaller blocks in the lot over the over the, yeah, public counter. And then you could see that share price went down almost to €18.
But the good news is this this block You can see there is the recovery. It’s quite, yeah, quite the same as as the complete yeah. Actual v shape. So good news is that the sellers are out, and then there’s more buyers again, and this is always what makes markets right.
Yes, some words to guidance. I think, Ralf?
Ralf Konrad, CFO, JDC Group: No, your turn.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: You can see that yes, it’s a good slide to comment. Actually, you could see that we gave the guidance out. Median is €255,000,000 with €62,200,000 turnover in Q1. We’re well on track here. So we see that that’s a very feasible turnover number.
And also EBITDA with €5,000,000 EBITDA in Q1 already, which is like the third time we could reach €5,000,000 in a quarter, We are well on track to reach our, like, in the median, 19,500,000.0. So we are very confident that these guidance figures just look right to us. And also our sub goals, we are well on track with these. Yeah. We will report more ongoing in the year.
So I think our strategy to tell you what we’re doing and then we’re doing what you tell what we’re telling, I think that’s, again, a very good outlook for the year 2025, and we’re very confident to reach our goals here. Yes. Outlook 02/1930, this slide was the first time shown after our full year figures in March. And just to explain a little bit on this, if we just go on with our organic growth, 70% on average year over year over year, you just come mathematically to a turnover of up to €500,000,000. So all we have to do is just execute on the existing contracts.
So this does not include an amount of new clients or new brokers and does not include any M and A transactions. And we know when we reach turnover of CHF $450,000,000 to CHF 500,000,000, then EBITDA will stand at CHF 40,000,000 to 50,000,000. And with EUR 50,000,000 at a normal platform multiple, and this is what we also gave you, we could envisage a valuation of EUR 1,000,000,000 plus. And this is why Ralf and I, yeah, decided that it’s worth working here. It’s a good team spirit, and you all fight for these goals.
We want to give you these turnover and EBITDA figures, and then it’s up to you to give us the valuation limit. All right. Thank you very much for your attention and we are happy to take any questions you might have.
Jana, Moderator/Host: Yes. Thank you also very much for your presentation. We will now move on to the q and a session. For dynamic conversation, we kindly ask you to ask questions in person via audio line. To do so, please click on the raise your hand button.
If you dialed in by phone, please use the key combination star nine followed by star six. If you do not have the opportunity to speak freely, you can also place your questions in our chat box, which I can see some I’ve already done. But we will continue with the first callers. K. The first questions are gonna be via text, which I will read now.
Andreas/Tobias/Guillaume/Edwin, Analyst/Investor: Oh, yeah. Cash level.
Ralf Konrad, CFO, JDC Group: Andreas. First
Jana, Moderator/Host: question is, you are close to record cash levels at 30,000,000 gross and plus EUR 10,000,000 net and no dividend and or buyback ongoing. Are you confident in deploying this into M and A during the year since not returning it?
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: The answer is yes. Yes, Andreas. Thank you for your question. We are very confident. But as always, right, targets assigned when assigned, and we will just shut up until this moment.
Jana, Moderator/Host: Thank you very much. His second question is with close to 1,500,000,000.0 insurance assets, are you having more leverage with insurance companies to get better commission and increase your gross margin?
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Yes. Definitely. Yeah, Ralph.
Ralf Konrad, CFO, JDC Group: Yeah. The answer is yes as well. That’s a day to day work in our product management division where we talk to insurers and asset management platforms and discuss if the actual commission levels are are the right ones. And we are improving commissions not like one big step, but it’s rather a thousand steps with all the insurers, and you will definitely see this in the P and L in future.
Jana, Moderator/Host: Thank you very much. And Andreas, third question is, there has not been any news out from Summitas this year and lower capital calls. Is it harder to get more deals done now?
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Well, I think there was two smaller news. Has bought another broker in January and also one just a week or two ago. So you can all reckon that buys a broker one broker every month. But, obviously, after this very big transaction in December, there’s a lot of work ongoing post merger integration, we are bringing all the finance into into in line. But we are very confident that, let’s say, that the rest of money bag can be invested within the next twelve months.
So there is some of the debt or or, like, of the credit line is is is left and also some of the equity. So we, as JDC, think that we will spend the the rest of the 5,000,000 outstanding, we’ll be able to to spend in the year 2025.
Jana, Moderator/Host: Thank you very much for answering that question. We will move on to the next person, Tobias Sindin, who also has about six questions. He says congratulations on yet another successful quarter. The first question is, there’s always a combination of factors that lead to outperformance. But what were the main drivers to the strong performance in advisory?
Ralf Konrad, CFO, JDC Group: Good question. I think we had we had harder times during The U Ukraine Crisis where it was not where it was easy for our platform business to grow but harder for the advisory business because a lot of advisory business is still in in in personal contact or done in in personal contact. And and now we have, like, the third year without any heavy influence from outside where people can can concentrate on on doing their business. We have we have done some operational efforts to improve the business environment. And to be honest, there’s not there’s no one magic reason.
I think we it’s a result of of three three years’ hard work in the in the right direction. Sebastian, would you would you
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Yeah. Maybe what we said before, the the tailwind is on all business lines, and especially real estate and mortgage is a higher part in advisory than in in So they are now benefiting from these overall, yes, good market factors.
Ralf Konrad, CFO, JDC Group: Yes. And the asset base is high due to the market development. And your second question is, I’ll make it short, if the percentage of the advisory business is increasing and the percentage of total business or total turnover, That’s not what we think. We think that the adviser tech business is growing faster than than the advisory business because it’s it’s easier to to put people on the platform with a non with with with a nonbinding contract where they are not exclusive. That’s what we do in the in the platform business.
And in our advisory business, people decide to work exclusively Though though this is this is harder, but it’s also will also show a double digit growth.
Jana, Moderator/Host: Thank you very much for this. His the second question is, how should we think about the higher percentage of this advisory commission going into 2025?
Ralf Konrad, CFO, JDC Group: That’s what that’s what I answered in this question, so we can go to the next.
Jana, Moderator/Host: Okay. So those are two questions in one. Perfect. Yeah. And third question is there are salary increases of 21.6% year over year in HQ.
Should we expect the current level to stay flat over the year, or will there be more increases?
Ralf Konrad, CFO, JDC Group: No. We we will see increases, but as mentioned, the the the cost basis is more or less stable. We had a lot of increases due to inflation in Germany. We are trying to grow without hiring lots of people. We we have some some key hires that we will see in the next month, But we think that the the growth of the the the personal cost increase will decline.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: But I I think HQ means headquarters. Right? So that’s the holding. And the main factor
Ralf Konrad, CFO, JDC Group: Sorry. I I read the HCAD coin. Sorry.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: It’s just hasn’t been with with us all of last year, so that might be quite some of of the of the increase, I guess. Right? But we can give you the the the precise answer.
Ralf Konrad, CFO, JDC Group: Yeah. Yeah. That’s that’s the reason, of course. Four people cost more than three. Sorry for for misreading your question.
Jana, Moderator/Host: Thank you very much for answering this one. The fourth question is, can you add some more color to the flattening in contract transfers compared to q one twenty twenty four that had 58% year over year in contract growth?
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Yeah. So the the main reason is that we prequalify the transfer of contracts orders. We had the the fact that many of these transfers had lower chances to go through because all kinds of contract transfers were sent to the insurance companies that don’t like working for nothing. And so we reduced by having more processes in in place. We reduced the number of outgoing contract transfers.
I don’t know, Ralph, whether we can quantify the effect, but in the end, for us, it’s important that the overall number of contracts that are successful transfers is going up, and maybe we should change this KPI into a successful transfers because it’s more precise. But thank you for the question. It’s it’s a it’s a good good good way to think about it.
Jana, Moderator/Host: Thank you very much. Fifth question. How are you seeing the gap between Young DMS and CIE and Fonts Finance developing in the past year? Is Young DMS and CIE tightening it?
Ralf Konrad, CFO, JDC Group: From a technological point of view, I would say we we have we are there since years, but for finance, it’s still a little bit bigger than than JDC and also growing with impressive numbers. I would say, yes, we we’re we are tightening. Yeah? But the the most important message is that the market is consolidating dramatically, and the big ones to which we belong are growing much faster than the small ones. So we will see a very attractive growth rates from not only us, but all the big platforms.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: I don’t know whether I have the right figures in mind, but if I’m not mistaken, Forfinance should have grown 16 to 19%. I don’t know whether they published figures, but that’s hearsay, and we grew by 28%. So last year was a tightening year, but we count them in. So they are one of our valuable competitors and will will stay a good a good yeah. And and a good sportsmanship will will be a factor in the market.
So we will have good sport here.
Jana, Moderator/Host: Thank you. And moving on to the last question of the one of Tobias Sindig. The last question is the cash conversion was very high in the quarter. How should we think about the cash flow going into the rest of 2025?
Ralf Konrad, CFO, JDC Group: More or less with EBITDA. That’s without any extraordinary effects. That’s more or less how you should think about it. We will invest depending on on M and A activities, more or less money into M and A. There is no relevant change in the financing cash flow, and the operative cash flow should be around EBITDA.
Jana, Moderator/Host: Thank you. Guillaume Poissch is asking, can you comment can you comment the evolution in the price contract ratio in q one, which seems strongly improving? Is it linked to reporting changes or a gradual and structural improvement as leverage kicks in more and more?
Ralf Konrad, CFO, JDC Group: To be honest, I don’t know if I understood the question right, but what I can say is that we have no changes in reporting. There are no structural changes. If some of the ratios have improved, then the reason is an organic one. I think the number of contracts compared to turnover, that could be the question. So yes, it’s an organic development.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: I think for the comparable numbers that we showed is we are now at almost EUR 40 per contract in the P and C business, right? And this goes up year over year over year with higher than inflation rates because valuable yeah, pieces of insurance or policies are growing more than inflation, especially building insurance and car insurance. So, Rob, maybe you have the the last number was, I think, you named me 39.6 or point eight,
Ralf Konrad, CFO, JDC Group: if I’m mistaken. €40. Yeah.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: And that was €35 3 years ago. So there is inflation priced in, and and that’s what we always what what we always tell you that we were running a inflation protected model as our commission is a fixed percentage of the premium, and this is going more than inflation.
Jana, Moderator/Host: Thank you very much. We have another question from Mark Westernen. Has there been any meaningful tender activity of major prospects, clients, or to be expected on the short term?
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: Well, just assuming things are signed when assigned, you can say that, as we won all of the major, tenders but one, the, the the big partners found or the big institutions basically have their partner already, and that’s in almost all cases, it’s us. And so the overall number of tenders in the market goes down now.
Jana, Moderator/Host: Thank you. We now have a question by video. Edwin De Jong, you may unmute yourself.
Andreas/Tobias/Guillaume/Edwin, Analyst/Investor: Alright. Can you can you hear me?
Ralf Konrad, CFO, JDC Group: Yes.
Andreas/Tobias/Guillaume/Edwin, Analyst/Investor: Alright. Great. Only two questions left, so it’s pretty clear so far. On on the gross margin, it’s come down a little bit from from q one last year. We have had some some competitive pressure.
I I I can’t remember, but maybe could you add some color on on on what are the moving parts there?
Ralf Konrad, CFO, JDC Group: Yes. The situation in the market is competitive as the consolidation pressure is increasing. That’s good for growth. That’s bad for gross margin. And the portion of the business coming from our major customers is increasing.
And you can imagine that the payout ratios for the major customers is higher than the payout ratio for a, let’s say, normal smaller broker. And that’s part of the reality, but it’s like an it feels like an yeah. Like, moving into the final phase of consolidation. The the the the the broker decides now where to transfer their contracts now or in the next months or or years, where to transfer their contracts, where to bring their business. And this is a phase of development where it might be not the best decision to optimize the gross margin.
So growth is important. And as long as gross margin in total is increasing much faster than costs as long we are able to scale the platform and that long it is also, we think, a good decision to be very active and aggressive in in pricing.
Andreas/Tobias/Guillaume/Edwin, Analyst/Investor: Yeah. Very clear. Very clear. And then finally, from my side, the on the large client, so you were already touching up on that. Can can you maybe give a a little overview on on where we’re standing with the, it could be, R and D, etcetera?
All the answers. What do we get?
Ralf Konrad, CFO, JDC Group: It’s the best time.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: So the the partners that we started with, Provincial and Savings Banks, that’s quite on track. Right? So we all hope for more more speed in these transactions. We planned it conservatively, and the results are as conservative as we planned them. So fine with the development of Provincial, but as we often say, we could expect more of VKB and SVs or Spakasenversiung, there’s really slow growth.
And then also R and V and the cooperative banks, funny enough, these partners are really happy. They introduced us into their Strategy 02/1930, and they said, you know, what do you want? We quadrupled the number of banks, but then, obviously, that’s still a small number as compared to the huge number of banks corporate banks out there. So, yes, this could be faster. But, again, it’s it’s always easier to take over existing business and books like what we did with Lufthansa, Albatross or Bavaria.
And when we start, like, converting clients from scratch, there is more time until you see, yeah, real euro figures in the positive. And also, Allianz is on track. We’ll earn our first very nice euros this year. But again, right, so that it it’s a new model for all these agencies, and this has to be introduced. So we are content, and and, actually, we we proceed as slow as we planned.
Andreas/Tobias/Guillaume/Edwin, Analyst/Investor: Okay. Very clear. Thank you.
Jana, Moderator/Host: We currently do not have any more questions. I’m waiting a few more seconds if there’s any more questions coming. Doesn’t seem so. As we have no further questions, we therefore come to the end of today’s earnings call. Thank you for joining the dynamic conversation and all your questions.
A big thank you also to Sebastian and Ralf for your presentation and the time you took to answer the questions. Should further questions arise at a later time, please feel free to contact investor relations or us. I wish you all a lovely week. And with this, I hand over again to you, Sebastian, for some final remarks.
Sebastian Grafmeyer, CEO and Co-Founder, JDC Group: So thank you, Jan, again to to be for being such a charming host, and thank you all for listening. Well, we are here with JDC at Equity Forum. For everybody who wants to come over in person or see us in person, happy to answer all questions that might arrive in Arise in Frankfurt. Yes. So it’s now the seventh quarter in a row with very positive developments.
What we said is that we are now quite knowing about our business model, we are quite precise in our guidance giving you the right expectations. And always, what you can see is that, yes, we are executing on our plans. And step by step by step, we’re getting where we wanted. And if we now take out this great vision, this is nothing we go to the hospital for. But in the contrary, we think it’s very visible that this company really now is taking off and step by step going in a direction where we can also justify these huge expectations and also getting back to real platform multiples again.
And if you like to do the math where we are going to with our guidance And the actual valuation, multiple wise, that’s not really demanding. So we see that there are some good reasons to be invested in this stock. Thank you very much for listening, and thank you for your trust.
Ralf Konrad, CFO, JDC Group: Have
Andreas/Tobias/Guillaume/Edwin, Analyst/Investor: a Bye. Bye.
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