• Market Volume Increase: 21% increase in market volume to EUR189 billion, EUR50 billion per quarter.
• Europace Growth: 27% growth, outperforming the market.
• Dr. Klein Franchise Network Growth: 30% increase.
• Housing Association Financing Volume: Stable at EUR1.2 billion.
• ERP System Units Under Contract: Increased to 460,000 units, with a net gain of 120,000 units.
• Personal Loan Business Growth: 12% increase in transaction volume.
• Occasional Insurance Business Growth: 34% increase in volume.
• Expected Mortgage Volume for 2025: EUR220 billion, up from EUR189 billion in 2024.
• Expected Gross Profit for 2025: Record EUR270 million.
• Expected EBIT for 2025: EUR30 million to EUR36 million.

• Warning! GuruFocus has detected 4 Warning Signs with WBO:HYQ.

Release Date: March 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hypoport AG (WBO:HYQ) experienced a strong year in 2024 with double-digit growth, driven by a significant recovery in the real estate and mortgage markets.
• The company gained market share in the mortgage sector, with Europace growing by 27%, outperforming the overall market.
• The affordability of homeownership improved in 2024 due to slightly lower interest rates and increased incomes, leading to more transactions.
• The company's ERP system for managing rent deposits saw significant growth, with units under contract increasing to 460,000, indicating strong market acceptance.
• Hypoport AG (WBO:HYQ) maintained stable transaction volumes in the housing association industry, taking market share despite a decline in total investments in the sector.

Negative Points

• The new construction area remains distressed, with single-family homes and conduits significantly below pre-crisis levels.
• The refinancing market is still weak, with many homeowners locked into long-term mortgages and delaying refinancing.
• The modernization and decarbonization investments in homeownership stock are not meeting expectations, with no significant recovery anticipated in the near term.
• The corporate finance segment faced a challenging environment, with project volumes declining by 24% due to regulatory and economic challenges.
• The insurance business saw only slight profitability optimization, with some business left behind that did not fit the long-term strategy.

Q & A Highlights

Q: What impact is expected from the German infrastructure fund of EUR500 billion on the real estate sector? A: Ronald Slabke, CEO, explained that the fund is expected to significantly impact corporate finance and support the housing construction sector, particularly in homeownership and social housing. The investments will enhance private investments and benefit areas where Hypoport is active.

Q: Has the recent interest rate change affected mortgage lending volume? A: Slabke noted that the recent 35 basis points increase in mortgage rates may cause a temporary delay in demand but is not expected to have a lasting impact on mortgage volume for the year. The market remains in a medium interest rate range, and any overreaction in rates might normalize.

Q: What are the operational cost expectations for the real estate and mortgage segment? A: The company plans to maintain cost pressure, focusing on current activities without expanding into new areas. A mid-single-digit increase in costs is expected due to inflation and market normalization, but overall profitability remains a priority.

Q: Did Q4 profitability meet expectations, and what is the strategic perspective on Value AG? A: Q4 profitability met expectations, with strong performance in real estate and mortgage business. The strategic goal for Value AG is to integrate property valuation into the mortgage process, enhancing Europace's competitiveness and profitability.

Q: Why is market volume growth expected to be limited to 10% despite strong figures? A: Although January figures were strong, uncertainties in geopolitics and government formation in Germany lead to a cautious outlook. The company remains open to adjusting expectations if positive trends continue.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.