Earnings call transcript: JDC Group Q2 2025 sees strong growth, stock dips

JDC Group reported a robust financial performance in the first half of 2025, with significant revenue and EBITDA growth. According to InvestingPro data, the company’s stock is currently trading at €35.78, near its 52-week high of €35.66, despite a 2.95% decline in pre-market trading. With a market capitalization of €468 million and strong financial health metrics, the company raised its revenue guidance for the year, reflecting confidence in its growth trajectory.

Key Takeaways

• Revenue for the first half of 2025 increased by 13.9% year-over-year.
• EBITDA rose by 23.5% compared to the same period last year.
• JDC Group revised its 2025 revenue guidance upwards to €260-280 million.
• The acquisition of FMK is expected to enhance growth in the insurance segment.
• The stock price dropped by 2.95% in pre-market trading despite positive earnings.

Company Performance

JDC Group demonstrated a strong performance in the first half of 2025, with revenue reaching €120.9 million, a 13.9% increase from the previous year. InvestingPro analysis reveals the company maintains impressive revenue growth with a 5-year CAGR of 15% and a healthy current ratio of 1.38. The company’s EBITDA also showed a substantial rise, up 23.5% year-over-year, driven by growth in both the AdvisorTech and Advisory segments.

Financial Highlights

• Revenue: €120.9 million (+13.9% YoY)
• EBITDA: €8.5 million (+23.5% YoY)
• Gross profit increased by 6% in the first half of the year
• Cash on hand: €35.2 million

Outlook & Guidance

JDC Group has revised its 2025 revenue guidance upwards to €260-280 million, from a previous range of €245-265 million. The company also expects EBITDA to be between €20.5-22.5 million for the year. According to InvestingPro data, the company has demonstrated strong momentum with a 36.77% price return over the past six months and maintains a "GREAT" overall financial health score. Looking ahead to 2026, JDC anticipates EBITDA to exceed €35 million, with a long-term vision of reaching €450-500 million in revenue by 2030. For detailed analysis and additional insights, including 10+ more ProTips and comprehensive financial metrics, investors can access the full Pro Research Report on InvestingPro.

Executive Commentary

CEO Sebastian Grapmeyer emphasized the company’s focus on recurring business, stating, "85% of all of our business is recurring or reoccurring." He also highlighted the strategic acquisition of FMK, noting, "FMK gives us three years in like a turbo speed to speed up the growth levels." Grapmeyer reiterated the company’s focus on the German market, saying, "We will not be distracted. So we will concentrate on the German market."

Risks and Challenges

• Economic uncertainties and market hesitation could impact future performance.
• The focus on the German market may limit international growth opportunities.
• Integration of FMK and expansion in the insurance segment pose operational challenges.
• Potential market saturation in the financial services sector.

Q&A

During the earnings call, analysts inquired about the FMK acquisition’s potential in generating insurance leads and the company’s international expansion strategy. JDC Group clarified that its current focus remains on the German market, with plans to leverage FMK’s capabilities to drive growth in the insurance segment.

Full transcript - JDC Group AG (JDC) Q2 2025:

Ingmar, Moderator/Host: Doctor Sebastian Grapmeyer 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 a q and a session in which you will be allowed to place your question. With this being said, I’m happy to hand over to you, Sebastian.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. Thank you very much, Ingmar. Warm welcome from our side to the earnings call first half year twenty twenty five. And you can see whoever of you already had a look in the figures, we could defy Liberation Day trends, and I think we have quite solid and positive numbers to show you today. My name is Sebastian, cofounder and CEO of JDC Group responsible strategy products, investor public relations, together with my partner, Ralf.

Ralf Konrad, CFO, JDC Group: Yeah. My name is Ralf. I’m responsible for IT, all m and a issues, and, of course, finance.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Thank you very much. So just on the next slide, very short introduction of our business. We are now a typical platform business. You all know this chart. So we take in all the data of all the insurance groups.

That’s more than two twenty insurance companies doing business with brokers in Germany. All the asset management platforms, all other alternative products, the mortgaging banks, We standardize the data, process it, and then we make it visible in our own visualizing systems to all kinds of individual brokers and agents, but also more and more to insurance companies, the banks, Salesforce, other Intritech companies and also via our smartphone applications to more than 200,000 direct clients. So right now, we have 6,200,000 data sets on the platforms for 2,400,000 customers, and we are one of the leading tech stacks for the processing of insurance contracts in the German market. Yes. So you see that we’re showing resilient growth and margin expansion in the last ten years.

So after our buyout in 2013, you could see that we are growing year over year over year with new records basically every year. You can see our revenue CAGR annual growth rate is more than 12%. And also, and that’s very pleasing for us as shareholders, is that the EBITDA CAGR is much higher, more than 30%. And you can see year over year over year, we show you higher earnings. And if we do not take in 2025, you can see already that this is a very positive development.

And we will show you with the acquisition of FMK, this will be improving much more in the next year. So EBITDA margin expansion also is in a very good trend coming from 2% in 2015. We now guide you at 8% in the year 2025, having reached 7% in 2024. And that’s also, yes, it’s up 5.2% year over year. Also a very positive development.

Why are we telling you this? Because you can see, and we show you in a slide later, that there is crisis all over the world, and there was one in Q2, especially amongst the background of Liberation Day. And we’re very happy that we can present you a stable positive growth yes, with stable rates. So we could grow the turnover with 13.9% and EBITDA by 23.5%. So that’s very satisfying.

And with more than EUR 120,000,000, again, the first half year twenty twenty five is a new record high in turnover in the first half year. And against a very, very good first half year twenty twenty four, yes, we could grow almost 14%. And you will see later that the second quarter, especially in 2024, was historically good. And now we are back to a quite normal second year second quarter in 2025. But also, you can see with an EBITDA at EUR 8,500,000.0, with a growth of almost 24%, we were happy and again, a record high for the first half year ever.

Yes. And one thing is very important. We told you in the last call on the quarter already, we reorganized our business segments. So we have a movement from adviser tech towards advisory. And the good thing is that saves us money.

We have cost savings of more than €250,000 by integrating and aligning our banking licensees. That’s what’s called a liability umbrella business, where we take over the liability for a huge number for of the tight agents. That was distributed among three companies: Phenom Private Finance in the advisory segment, but then also Jung Dems Austria was in the advisory tech segment. And TOP ten Austria that we bought two years ago was also in the advisory tech segment. This is what we merged now.

We have now only one legal entity, and that’s Finuum Private Finance Germany. And this is why the business of Lunde MSDMS Austria and TOP10 Austria now goes over to Finum Private Finance. So it’s just a technical development. And so if you are wondering why there is a lot of pro form a reporting, we just show you the growth rates just according to how would it have been if this move had been in the past already. So the good news is now we are down to one banking license, and this is all going through Berlin, Freedom Private Finance, and all the liability umbrella business is now united in one segment, and that’s advisory.

Yes. And here we come to the figures in detail. You could see it’s a positive development. Revenues are up 11.2% in the second quarter, and this comes to 13.9% over the first half year. And also earnings, and that’s important, are up even more at 23.5 percent, as we reported, to €8,500,000 And here, you can see the difference.

AdvisorTech did not only grow by 8%, but in reality, of 14.7%, which I think is a good rate. And then advisory did not grow 43.6 in reality just by the new reporting standard in the segment, but actually by 10.7%, which is quite exactly the range that we give you for our growth. So organically, we would want to grow advisory by 10% plus, and we would grow adviser tech by 15% plus. And after challenging quarter, we are very happy with these figures. So and then you can choose your figure.

Obviously, EBIT is up even more and then earnings up even more, but you can see this yourself in the schedule. We are very happy that all the growth comes from all the product groups again. We can see that the capital markets started very strong, but then there was a sharp decline. Right after April 2, the Liberation Day, you could see that the capital markets went down quite significantly. And what’s happening at the actual consumer satisfaction levels is that also the new business in investment just goes down.

So that’s a little bit counterproductive. But as we know, people are only buying stock when they’re going up, and they’re not buying stock when they’re low. So we saw a strong decline also in the new business of investment, and this goes farther in the insurance sector as there’s a lot of unit linked business. That means wrappers, so insurance wrappers around asset management products. And that was also quite weak in Q2.

But you can see it’s still up 12% investment and financing, almost CHF 5,000,000 plus insurance up normal, let’s say, 16% up despite of this little decline in unit linked, and the others are up as the real estate markets are starting to grow. And still, German banks are still reluctant to give up mortgages. This is improving slightly time over time, banks. But all over, we’re happy of €120,900,000 in turnover in the first half year. So here, you can see the distribution among the sales channels.

You can see that the IFA business is the stable backbone of our business. It’s up 12% pro form a. And again, the missing 9%, it’s the liability umbrella business, which went from the AdvisorTech side to the advisory side, but the green figures is closer to reality. Major customers, they do not have any liability umbrella business. So it’s up sales up 25%, very satisfying.

But also advisory is almost up 11%. And so you can see now the distribution is that major customers now make about 30% of our turnover, and almost 70% is our IFA business in the breadth of 16,000 IFAs that we have. So as we said, these growth rates are impacted by the restructuring. But otherwise, the IFA business is a very solid backbone of our business.

Ralf Konrad, CFO, JDC Group: Okay. Then let’s go into the comparison by quarter, ladies and gentlemen. If we look at this situation, we have seen a very dynamic development. After the impact of the Ukraine crisis, JDC has grown double digit, and ’25 was the first year in the company’s history where we started with a Q1 of more than €60,000,000 of turnover. So best first quarter in history.

The good news is the second quarter is also the best second quarter in history. But you can see that the volume is a little bit below the first quarter. There’s a very normal seasonality, as Sebastian mentioned. We have a strong first quarter. We have a weaker second quarter, a weaker third quarter and a strong fourth quarter.

And if you look at the year 2024, the second quarter was almost as strong as the first quarter in twenty twenty four. And thus, the growth rate with 11% seems to be a little bit smaller. But keep in mind, the main reason was exceptionally good second quarter twenty twenty four. And of course, as Sebastian also mentioned, we see some effects resulting from the economic slowdown in Germany and the ongoing tariff discussion. For example, we have a little bit higher cancellation rates for existing contracts and some reluctance to purchase new contracts.

People are uncertain, and this is yeah. And reflect this in their purchasing behavior. But on the other hand, we have seen such situations many times before and have always, without any exception, seen a catch up effect afterwards in the reluctance to buy. And this is because financial products are not like a watch or a second car. They bought because you need them.

You do not decide to buy one at all. You you you need this this product for risk protection or retirement provision, and so you buy them later or maybe in a smaller amount. But you don’t cancel the transaction. Having said this, let’s go into the segment numbers. Due to group reorganization, as Sebastian told you, the segment report also shows pro form a figures for the year 2024 for both segments, advisory and adviser tech.

And the blue columns, 2024 show the adjusted figures as if reorganization had already been effective from the 01/01/2024. To compare apples with apples, I will focus on the adjusted numbers in the following slides that follow. Revenues were up 11.2%. Gross profit was up only by 22.1%. That has two reasons.

The first is that the revenue growth was driven by bigger partners with higher payouts. That’s a smaller part of the explanations. But the main part is that, as mentioned, we had increased cancellation ratios in April and May, and cancellation always reduced the gross margin. And we think that this development, the obvious, is somehow related to Liberation Day because if you look within the quarter, then you can see that June was already very strong again. And June provided more than EUR 1,600,000.0 of the EUR 3,000,000 segment EBITDA in the second quarter.

So we think we are on a good way. And of course, we saw some effects in the second quarter because, please keep in mind, we compare extraordinary strong Q4 twenty twenty four with the Q2 twenty twenty five in the middle of the market’s turmoil. Yes. If we look at the first half year as a whole, the picture is more positive. Revenues are up 14.7%.

Gross profit increased by 6%. And due to a good cost management, the total costs declined despite the increased volume, especially in the other operating expenses. And as a result, EBITDA increased by 14.9% from EUR 6,900,000.0 to EUR 8,000,000, which is an increase of 15%. Let’s go into the advisory segment. The advisory division has had a really strong development, although revenues only grew by 3.3%.

The gross profit increased amazingly by 14%. This was, to be honest, a little bit surprising, but we double and triple checked this development, and the figures are right. The main reason is that we have a big increase in high margin business, real estate or other asset classes where we just have higher gross margin, and this grew faster than the rest. And as the cost basis remained stable, this increase in gross profit showed a big impact in EBITDA. EBITDA increased by 45% to EUR €1,300,000 which is a very good development in our point of view.

And it’s the same with the first half year as a whole. That’s also very convincing. The revenues went up by 10.7%. Gross margin, even stronger by 12.6. And this led to a very convincing EBITDA growth of approximately 50% to 2 and a half million euros in the first six months.

So best regards to our Finham colleagues in the line. Excellent work. Thank you very much. Yes, let’s come to the cash flow statement. We started the year with cash and cash equivalents of EUR 24,600,000.0.

We had a cash flow from operating activities of EUR 6,500,000.0, which was slightly below the previous year. I will explain this in a minute. The cash flow from investment activities amounted to 2 and a half million euros, minus 2 and a half million euros, better than the previous year because we only had some capital calls from Zumitas and no other payouts for any other participations. We had a small negative cash flow from financing activities driven by interest rates of minus €1,200,000. And so we ended up with a €27,200,000 cash on hand at the end of the quarter.

And as always, the very actual figure cash on hand is €35,200,000. Yes. Why can an operating cash flow decline when the operating income increases? That made a question that some of you have, and we didn’t want to leave this obvious question unanswered. So the the answer or the reason is our negative net working capital profile at JDC.

We always receive commission before we have to pay them out. So we have two cases. The the one is the growth case in the green box, and the other is the the case when turnover declines in the red box. And if the turnover increases, then we have a higher cash flow from operating activities because we have today’s high commission inflow, and we have to pay out for the smaller business to the brokers of the past period. So that’s clear.

Then then the operative cash flow operating cash flow is very is very strong. And if the turnover decreases from one period to another for first quarter to second quarter, for instance, then the operating cash flow is smaller because we have the lower commission inflow in this period, and we have the higher payouts of the prior period. So that’s the reason. And the green box is very normal, for instance, for fourth quarter, which is very strong compared to the third quarter. And the red box is very normal for a second quarter, where we have a smaller turnover than in the first quarter.

That’s just to explain this situation. Yes, we have a very nice development in the share price. You have seen this after the announcement of the FMK transaction. Market cap is now above €400,000,000. We are very happy about this.

And the reason is that we were able to finance this transaction 100% debt based, so very value accretive, no dilution for your shareholders and for us as shareholders as well. The shareholder structure, thus, is unchanged and also no change in the bond. Yeah, let’s come to the spotlights. For the investors who could not attend our latest call last week regarding the FMK transaction, we will give you a summary on this. We will show some figures regarding the platform activity.

And in addition, we would like to share some general thoughts about the environment and the resilience of JDC and the growth of JDC. Yeah. What’s FMK? FMK is a data driven specialist in digital lead generation, but they do not only leads generate leads. They they generate business transactions mainly in the area of personal finance, and that means FMK gets paid by its customers.

When the FMK customer, for instance, a credit card company earns money. And the company earns money when the consumer signed the contract. So FMK not only generates leads, but takes over the conversion the the conversion risk, and this is very convenient for FMK customers. They have roughly 100 customers, and this is the reason why customers, since inception, constantly increase revenue with FMK, and that’s what you can see on the slide here. Very impressive development.

The company was founded in 2021. After four years with a revenue CAGR of almost a 180%, FMK ended up at approximately €40,000,000 of turnover, a very high margin business with a 35 EBITDA margin and only 12 employees. So the company is very, very digital and and has a very scalable very scalable business model. We always tell you that the JDC platform is scalable. Yes.

It is scalable, but FMK is even more scalable. We would love to have this revenue per employee figure in the total group, but we don’t have. Yeah. You can see in the pie chart that the revenue comes from personal finance mainly. We will not touch this segment.

We are happy with the development. The segment should grow. In in our work together with FMK, we will touch the insurance segment, which is now less than 1% of turnover. And in our, let’s say, future strategy in some years, the revenue FMK revenue in the insurance segment will be as high as in the personal finance area. How does a business work at FMK?

If the consumer searches for an online product, then he sees the paid marketing campaign of FMK in Google or Bing or social media or the GenAI tools. And by clicking on this on this campaigns, he ends up at an FMK landing page or a comparison portal. They have several of these portals. And if the come customer then chooses a product, he checks out to the product partner website where he does the deal. Yeah?

And it’s special at FMK because we do not only sell the leads or the or the business to the partners, but we get back a lot of data. Did the customer really convert the that does he does he use the credit card in which amount? So and and all this data are used in a very automized way to optimize the campaigns and to to to optimize this this cycle. So every sale improves the next in a very automated feedback loop, and that’s that’s the sort of the secret sauce why the company is so successful. And yeah.

Why is FMK so exciting for us? Why not only become a customer instead of buying the company? I would like to to explain this to with the usage of a a metaphor. If if JVC was a, let’s say, very powerful HiFi system, Then until now, others have always had the control over the volume control. We were dependent on how much revenues others brought to the platform.

And with FMK, we will take more control of the volume control ourselves by generating customer leads and either converting them with our in house brokers, which is very profitable, or passing them onto our affiliate advisers, especially to our exclusive advisers. So FMK gives us at the end more control, and it’s a bit little bit like the missing piece on our JDC platform. And in the future, we will not only provide technology, what we do today, best in class technology, but we will also provide consumer or customer access to our brokers. And that can bring really huge synergies and makes the platform much more attractive to brokers and especially to younger brokers who don’t have a lot of customers. So in addition, FMK is growing very dynamically and will generate relevant profits for us.

So we really believe that this transaction will take JDC onto another level. Yeah. And that’s why we told you with the with the announcement that the EBITDA 26 of JDC will definitely be above €35,000,000. Then we were asked whether this was more or less a hidden profit warning since we already achieved that figure today on a pro form a basis if you add FMK and and JDC. So very funny, but good question.

No. It isn’t. We just wanted to show your investors that JDC is now reaching a new level of profitability without setting the expectations too high. We hope for your understanding. The 2026 guidance will be published with the preliminary figures for 2025.

So stay tuned, and we all can can be excited. Yeah. Some some more details on the transaction. We bought 60%. The purchaser is YoungBMS and C, which is our subsidiary in the AdvisorTech segment.

So FMK will be part of the advisory business. We paid an entry multiple of eight x. This is expected to decline below seven x. And the reason is that we have a earn out structure where we pay on EBITDA improvements from 2025 to 2027, but with sharply decreasing factors. So the more profitable the the company gets, the better is our our multiple.

We’ve negotiated a downside protection based on the entry multiple. So if the company would not be as profitable as in 2024, then we would get back our money up to a certain amount. And also very important, after five years, we have a call option on the rest of the shares, on the on the 40% of the shares that still are with the founders right now. And this is a very good situation because they are relevant for the company, and we are happy that we have them on board. But after five years, it’s our plan to own a 100% of this company and fully integrate it into the JDC platform.

The figures on the left side show you how the company would have been if the transaction would have taken place at the 01/01/2024. So pro form a 2024, you could see that the combined EBITDA would have already been €28,500,000. So how to finance such a transaction? We decided to finance this transaction on a 100% debt basis because that’s very value accretive for for equity holders, and this was possible for several reasons. The first is from a net debt perspective, we are still unlevered.

We have a 20,000,000 bond, but we have 30,000,000 plus cash on hand. We have a very stable business with a very high portion of recurring revenue. The customer base is very diversified. We have only 25% of turnover that are provided by our top 10 customers, and we we only have seven customers that provide more than 1% of total turnover. So it’s extremely diversified and thus very secure, and we have a very good cash conversion from EBITDA to cash flow.

And this is these are the reasons why it was possible to finance this transaction on a 100% debt basis. We are in the process of placing this bond. And what I can tell you is that we have, from our point of view, overwhelming demand, much higher than we’ve expected. The initial volume that we place will be €70,000,000, $7.00, out of a framework of a €160,000,000. This is the maximum we could issue, And it’s not needed, but it’s for us like a financing reserve.

The tenure of the bond is four years. The interest rate will be paid quarterly and is expected to be around Euribor plus four seventy five or 500 basis points. And the bond will be listed Frankfurt Open Market and the Nordic ABM. So a professional Nordic bond with professional institutional investors. I think we will be able to close the placement within the next, I don’t know, ten days, fifteen days.

Yeah. Last slide from my side. As you see this every three months, our KPIs on platform activities, The number of orders are below the previous year, 3% like in the first quarter. Nevertheless, we have a higher volume, higher contract volume and thus higher commission volume from new orders. The number of contracts transfer grew by 35% on a very high number of more than 350,000, 360,000 pieces in half a year.

So we will end up at more than 700,000, which is an amazing number. The assets under management in the last twelve months increased by 10.2%, and the annual net premium increased by 16% in the last twelve months, which is also an amazing number. Sebastian?

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. Thank you very much, Ralph. Just to give you a throwback to our last earnings call slides, this is what’s happened after Liberation Day. You could see that the MSCI World, which is basically the amount as or the index which which our assets are trailing. As you might know, we have almost 8,000,000,000 in assets, 2,000,000,000 are in managed accounts and about EUR 6,000,000,000 in standardized funds, and this is what’s happening.

So from its high, the MSCI World dropped from 3,900 points down to 3,300 points. And now, as you know, it went up to 4,170 points again. So basically, it went down more than 10% quarter over quarter to average, and now it went up 10% quarter over quarter average. And as about onethree of our business is investment, basically, investment income goes down by 10%, goes up by 10 overall. That’s a 3% change just in trailer fees that come in and go out.

So the primary effects are quite minimal. And but then we have secondary effects as consumer confidence. And this also, when you follow this in German data, then you could see that Consumer Conference right in April and May were at the lowest levels quite ever after COVID. And now it’s going up again as, obviously, there is not much harm done. As you all know, there is an agreement on tariffs among the between the European Union and The U.

S. Of 15% standard might do some harm to manufacturing and especially the car industry, but not overall in the German economy. So we see that our figures are

Ralf Konrad, CFO, JDC Group: quite

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: resilient. Capital markets go down and up, and there’s almost no maybe 2%, 3% in our growth rates. That’s the effect on of this Liberation Day market turmoil. And if you go on the next page, we give you a little mountain chart of what is happening, a crisis over crisis over crisis with our turnover. As you can see, over the last ten years, we could show you increasing turnover rates and commission rates.

And you can see year over year over year, we can grow no matter what’s happening in the markets. Yes, COVID that hit us strongly as well. If advisers cannot go out to the customers, that was quite distressing. But also the energy crisis after the Ukraine Russia war that hit heavy in two quarters in ’twenty two, especially the third and fourth quarter, but then you could see a rebound in 2023. So you can see that no matter what’s happening in the world, we have a very resilient business model.

And yes, so we will show you more growth in not only growth but also growing growth rates. We’ll see that by now ’25 and then ’26, what we showed you after the F and K transaction, we will have a rising growth rate and therefore, much more growth to come. And this is also a good, very good sign. As we’re becoming more efficient, this will also increase the earnings space and then also the growth rates of earnings. So just to come back to our guidance.

As you could see in our last call last week and also in our press releases and corporate news, we could add up to our guidance. So the old guidance of EUR $245,000,000 to $265,000,000 in turnover, we increased to EUR $260,000,000 to EUR $280,000,000 conservatively, taking into account the additional turnover of F and K and also EBITDA. We raised this EBITDA targets for the year 2025 from CHF 18,500,000.0 to CHF 20,500,000.0, up to CHF 20.5 to CHF 22,500,000.0 by the acquisition of FMK. So up CHF 2,000,000. What you could see, it’s very conservative, what Ralf showed you.

So this will also happen if we can just consolidate the last three months of the year. So obviously, 2026 will be the first year where we can consolidate a full year with FMK, and this is what we also gave you as a midterm guidance at 2026. We expect then more than EUR 35,000,000 in EBITDA already. And this is also our outlook that we gave you last year. Our vision, if you may say so, we said that we see the platform becoming more profitable quite fast, and that was our 2,030 goals that with a turnover of EUR $450,000,000 to EUR 500,000,000, we will come to an EBITDA of EUR 40,000,000 to 50,000,000.

And this is the very good news that we will reach EUR 40,000,000 as it looks now 2027 at the latest. So FMK gives us three years in like a turbo speed to speed up the growth levels. And yes, so we have we’re very excited to look profitable 2026 and also in a very profitable 2027. And yes, driven by the market trends, digitization, where we’re one of the players in the market demography, where we see that our brokers become older every year and every four years, the broker base becomes older by 3.7, and that’s also one of the strong arguments for FMK that now we go to younger customer groups, more digital oriented customers. And as Ralph said, we have the lever in our own hand.

We’re not as dependent on b to b business because we can if the leads cannot be transacted by our brokers, we can also go to the directors to the clients direct. So also, consolidation is one of the topics. FMK is a very good example. It’s not done yet in Germany, but it’s it’s gaining drive and and speed. And also regulation is one of the reasons why the smaller market players just do not have any chance to come up with their IT tech stacks to to to grow and change them as to a regulation that’s implemented faster and faster.

So very happy with the development that we can give you good news that this long term guidance will be achieved much faster than we ever thought. So thank you very much for your attention until now. We’re happy to take any questions you might have. Ingmar?

Ingmar, Moderator/Host: Yes. Thank you for the presentation, and we will now move on to the q and a session for a dynamic conversation. We kindly ask you to ask questions in person via the audio line. To do so, please click on the raise your hand button. If you have dialed in by phone, please use the key combination star nine followed by star six.

And if you have the opportunity to speak freely, you can also place your question in the chat box. And please note that the management team has another meeting right after this, and therefore, we unfortunately cannot exceed the time set for this meeting. So if there are any questions by raising their hands, I’ll wait for the participants. Otherwise, I’ll read out questions sent to us while you have the presentation. So I read it out.

When will the first insurance policies brokered by FMK be transferred to the JDC platform?

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Ralf, you want to take this question?

Ralf Konrad, CFO, JDC Group: Sorry. Sorry. I just was I’m organizing my desk with a pencil and a piece of paper. So please, could could you please

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. This is the first insurance policy. It’s very soon. So we we hope to implement have the interfaces done with FMK very fast October, November already. So the first little, little, little turnovers we expect already this year.

Ralf Konrad, CFO, JDC Group: Yeah. Definitely. Maybe some more some more light on this. FMK is already selling insurance. They sold the leads for €80 on average, and then they saw that it’s much more profitable to sell the these insurance policies themselves.

So they founded a little broker, very tiny broker. And within the first year with no effort, this broker generated an EBITDA of a quarter of a million. So this is a very profitable business, we will start with this very soon. At first, we have to pay unfortunately, at first, we have to pay the purchase price. But our kickoff meeting is already September, so first effects visible in 2025.

Ingmar, Moderator/Host: Well, thank you very much. And there’s one participant raising his hand. You are able to ask your question, mister Young, I think. Well

Edwin, Participant/Investor: Good afternoon, Young. Here here I am. Sorry. Yeah. Got a little bit of a trouble here.

Good afternoon, gentlemen. A couple of questions on the the large clients again. Always a high grade subject, but but you see it increasing by the lot. Could you could you give a little bit more color on on on the composition of the 30,000,000 that that’s in in the in the large clients. That would be the first.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: We didn’t really understand the the question right acoustically.

Edwin, Participant/Investor: Can you hear me now? Is it alright? Yes. Okay. Oh, so I was looking at the large clients, 30,000,000 turnover.

I saw that growing fast quite quite quite nicely. And I was wondering about the composition. So which part is a cooperative bank, which part is savings bank, which part is Alliance, for instance, or so a little bit of color on that.

Ralf Konrad, CFO, JDC Group: From your question was the the development of turnover. What of this turnover is contributed by the bigger partners of JDC. Right?

Edwin, Participant/Investor: That was in the sheet.

Ralf Konrad, CFO, JDC Group: That was 30%. Right? About the composition.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: You mean, Edwin, 30% of our turnover, you said, is major customers. Right? And you will you want to say what customers contribute at what level. It’s it’s it’s very heterogenic. So there’s some corporate clients that are not growing, but some are really growing fast.

And same goes for the savings banks, especially the Provencial savings banks. We’re very happy about this business development. And some other savings bank insurers are trailing after the development of Provencale. So it’s very individual among these around 25 major partners. And obviously, we are under our yeah, NDA rules, we are we are not publishing individual results.

But it’s it’s it’s nothing to do with segments. It’s more individual developments of individual partners.

Edwin, Participant/Investor: Okay. Clear. And then in in the last results, I I always saw the the follow-up commissions. I missed that in the in the in this report. Am I am I right about that?

Or

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. We we had these slides, which we were very surprised because the partner we are placing the bond with Pareto, like, gave us some quite insight interesting insight in our own business. And especially, they added because we always said there’s more than 60% of our business recurring, which I think is a very big factor for a stable business. But then if we add up the reoccurring business, that means the the business with partners that are already there, but it’s reoccurring every year, that’s basically technically new business. But as for example, every year, there’s new employees with Lufthansa.

And obviously, there is a new pension scheme for these partners. This part of reoccurring business makes another almost 25%. So we can say that 85% of all of our business is recurring or reoccurring. I think that’s a very good news also for bond owners that this is a very stable business base that we know at January 1, basically, that all our costs are borne, and that’s only the factor how high is our earnings or how high our earnings. So that’s so thank you for the question because, yes, we have this slide in the FMK deck last week.

I don’t know why we didn’t include it here because I don’t know. We we we we didn’t do want to do too much advertising, I guess.

Edwin, Participant/Investor: Okay. Great. And then finally, so so so June was quite quite nice. So the the development in June, Can you elaborate a little bit on how it’s going in July and August so far?

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Well, we’re very happy. Obviously, the capital markets are back. Right? So Yeah. We could see record highs, especially in in US indices, but also in European indices.

So from where we started, 3,900 points, I believe that was the high end in Q1. Now we had 4,170 points. So we are up considerably. So we can see that this alone gives us three to four percentage points in growth in the third quarter over the second. And then also, consumer sentiments slowly becomes better.

But obviously, as Ralph showed you, and we expect still the Q3 being the summer quarter. So not too much expectations there, but a very good base for a very strong Q4.

Edwin, Participant/Investor: Okay.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: So yes, there there is a rebound, and it’s very visible from June on.

Edwin, Participant/Investor: Okay. Thank you.

Ingmar, Moderator/Host: Yes. Thank you very much. And maybe a question short to answer. Has the placement of the bond at Pareto already begun?

Ralf Konrad, CFO, JDC Group: The answer is yes this morning. 888805 was the sales briefing for for the Pareto guys. So they are on the phone right now.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. But maybe, Ralf, you you might add that it’s not too easy to get bond shares. Right? So it’s

Ralf Konrad, CFO, JDC Group: Yeah. It’s an it’s an professional placement without prospectus. So only institutional investors that are set up in KYC as professional investors at Pareto, who’s the investment bank behind, are able to to buy the bonds. If you are interested, then please let us know. Maybe we can arrange that through a platform, but minimum investment is a €100,000 because only professional investors.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: But you might wanna add that already the guaranteed part that we did was was highly oversubscribed. So just just expect management expectations, it’s it will be not easy.

Ralf Konrad, CFO, JDC Group: You you said we should not do so much marketing. So

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yes. No. It’s just expectation. Mean, don’t be disappointed if you don’t get any bond shares because it’s it’s you know, it it was highly oversubscribed, and we expect it to be highly oversubscribed.

Ralf Konrad, CFO, JDC Group: Yep. Yep.

Ingmar, Moderator/Host: K. Great. Thank you. And we move on to a participant raised his hands. Tom Jakobi, you should be able to speak now.

Place your question.

Tom Jakobi, Participant/Investor: Great. Can you hear me?

Ralf Konrad, CFO, JDC Group: Yes. Yes.

Tom Jakobi, Participant/Investor: Wonderful. I’d like to understand a little bit better the newest acquisition. So you were talking a lot about EBITDA that is rising, and it totally makes sense because of the positive effects taking place in EBITDA. But after EBITDA, there is gonna be interest payments, of course, and we we can calculate them quite well. But I wonder what happens about depreciation in in Hagibi and IFRS.

Mhmm. So maybe there’s some immaterial numbers getting into the balance sheets, and I have no clue what’s going to happen there. So it would be very nice to get some numbers there.

Ralf Konrad, CFO, JDC Group: Yeah. Very good question. I just can give you my opinion and the opinion of my finance team. At the end, we have to negotiate or discuss with the auditor. When you buy a company, then you have to do the so called purchase price allocation PPA.

You decide what of the purchase price allocated on, let’s say, the real assets, and what is the customer base, what is, for instance, immaterial assets, software, and so on. And the rest is customer base, and this has to be amortized over a couple of years. And this is why D and A depreciation and amortization at JDC is very high. We have roughly 6 and a half million euros depreciation and amortization at JDC, but only €2,000,000 depreciation, and the rest is amortization of the assets bought in the past. And as FMK doesn’t really have a customer base because the customer has generated one time, then it’s sold.

There’s nothing to depreciate to depreciate. There’s nothing to amortize. So our expectation would be that depreciation or amortization on this acquisition is rather very little, but has to be negotiated and improved by the auditor. But that’s our today’s view.

Tom Jakobi, Participant/Investor: Okay. Do you do you know when this is when this will be, like, crystal clear? Can you give an update at some point?

Ralf Konrad, CFO, JDC Group: Crystal clear after negotiation with the auditor, but, normally, this is done when the figures are audited. But I understand your point. This is relevant for your investors, relevant for calculation, relevant for EPS. So I will take this task with me and clear it latest until next earnings call.

Tom Jakobi, Participant/Investor: Alright. Thank you.

Ralf Konrad, CFO, JDC Group: Welcome.

Ingmar, Moderator/Host: Well, thank you very much. And we got a couple of questions in the chat box. I’ll read this out. First of all, well, hello and congratulations to yet another successful quarter, which is pretty cool, actually. Although the deal with FNK Group has yet to be formally closed, can you elaborate a bit on how we should think about their business momentum carrying into 2025 based on historical numbers?

For example, are there any reasons for why the momentum shouldn’t continue into 2025? I guess it’s 2026.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. So there’s no reason, Mark. But

Ralf Konrad, CFO, JDC Group: Yeah. Of course, there’s if we would have seen any reason, we wouldn’t have bought the company. But, of course, that’s the the growth the the turnover CAGR will come down because the higher the numbers, the smaller is the CAGR. But we think this is a yeah. It will be very scalable business and a growing business.

We we have, let’s say, base case from management, which is very favorable for us. But as this would be insider information, we are not able to to give you this information. But we think that the company will will keep on growing. Let’s say it this way.

Ingmar, Moderator/Host: Okay. Well, a follow-up question. Can you help us understand how you are thinking about immediate versus medium term revenue ramp up from the life insurance from FMK Group considering their low rev base in insurance, but the potential in immediately connecting the customers to your broker network?

Ralf Konrad, CFO, JDC Group: Yeah. Maybe I can elaborate on this. At first, you have to understand, it’s only a question of money. Yeah? At the moment, they just invest only a little money in advertising to get leads for for insurance products.

Once this has changed, a lot of leads will be there. And maybe to give you a feeling, in 2024, this company generated 480,000 business transactions, means credit cards, cash accounts, depots, and so on. And if we are only able, let’s say, to convert 10,000 life insurance leads into into customers. And then you know that a life insurance on average on average pays you an upfront commission of €1,500. We are talking about €15,000,000 in additional commission.

So the the synergies are really huge, but we will work hard on, yeah, generating a long term cash flow by integrating this business onto the platform without destroying what they have achieved with the existing customers. So this this will be this will be the journey. Sebastian, maybe you can add some some some clever words.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Well, yeah. So we we apologize for giving you just a very conservative outlook. Right? This is a fast growing company and will not break their growth path. So stand alone, this will be very, very attractive for all of us.

But then, obviously, we try to lift synergies as fast as we can. And this is a lot of blue sky operation. So we’re very happy with FMK as it is today. If it just yeah, just contributes what they do today, it’s still a very good acquisition. But, obviously, there can be a lot more.

And especially, we expect a lot more synergies by using all these new clients as a base for upselling, cross selling on the platform. Right? So so the the the the our plans are quite quite big, but we give you just, like, the the the lowest the the lowest rim as an expectation base because I think that’s that’s fantastic enough.

Ingmar, Moderator/Host: Well, yeah, thank you. And a question in the chat box, which is by now the last one. Do you plan to expand international in the next five to ten years, or do you view the opportunities in Germany large enough?

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yeah. Obviously, so Germany is low hanging fruits. Right? We’re one of the market leaders. The tech stack’s working.

Obviously, the platform can be expanded in all countries. It it definitely works in Austria. We had it in place or have it some clients have it in place in Czech and Slovak language. Still works as well. But then what we need is a base where where we have the ties with all the the different product providers.

So whenever we would find a team or a platform, like, not not so far away, we looked already at companies in The Netherlands or Italy. This might be a good start to expand into the European space. We had questions whether good licensing in Canada or or Japan. We will not be distracted. So we will concentrate on the German market as our market share is still quite low.

So we had a it depends what figures you look at, at a 0.6%, 0.7% market share in a fast growing market. So there’s a lot of low hanging fruits where we are. And so we can imagine to expand into normal platform levels to have not only 0.6%, but rather one, two, 5% market share. And I think then it’s the best way to to look abroad. And until until then, you will see us focusing on Germany and Austria.

Ingmar, Moderator/Host: Well, thank you. And by now, we have not received any further questions. I’ll wait a few moments if it will be the case. Yes, we therefore come to the end of today’s earnings call. Thank you for joining, to all the participants, and a big thank you to you, Sebastian and Ralf, for the 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. I wish you all a lovely week and a successful one as well. With this, I hand over to some famous last words to Sebastian.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: I don’t know whether they are famous, but I think we could show you in q two that it’s a very resilient business model, right? So the turnover is hardly not touched by all this turmoil we have in German customer based markets. And we see that the rebound is very fast also now June, July, August. We can see the capital markets up and also our trailer fees up. So I think we’re going in a very good year end business.

And also, you can see by this transaction, FMK, there’s a huge base for earnings improvement. We think that our outlook for ’26 is still conservative by adding up what’s here already, not taking in account what is out there as a business opportunity, but we are not standstill, but we will develop all of this. And I think we have a very, very good professional young team in FMK that are keen on really expanding and improving and also to earn money on the

Ralf Konrad, CFO, JDC Group: Younger than Sebastian and me. Much younger.

Sebastian Grapmeyer, CEO and Co-Founder, JDC Group: Yes. They’re fifteen years younger, to be honest. So there’s fresh blood in the company, and we’re really looking forward to this journey that is exciting indeed. Thank you very much for your trust. And so looking forward to seeing you in three months, the latest.

Thank you.

Ralf Konrad, CFO, JDC Group: Bye bye.

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