Topic: Yesterday, Netfonds reported strong preliminary Q2 figures above our estimates on both, top- and bottom line. The upper end of the guidance seems in reach. In detail:

• Gross Sales grew by 20% yoy to € 56.5m, above out estimates of € 56m. Main driver was the strong AuA and AuM development with new record levels of € 26.2bn (+10% YTD; 15% yoy) and € 3.3bn (20% YTD; 18% yoy), both well above our estimates of € 25.7bn and € 3.2bn (eNuW old). Consequently, Netfonds should reach our estimates for FY24 of € 27bn AuA and € 4.0bn AuM easily.
• EBITDA came in above estimates at € 2.0m (122% qoq, 37% yoy vs eNuW: € 1.6m), mainly driven by the topline growth paired with stable OPEX compared to Q1, showing the strong operating leverage of the business model.

Going forward, we see further sequential growth on the back of 1) value accretive smaller transactions (i.e. MFK and Comfort Finance) for very reasonable prices (eNuW: 4-8x EBITDA) 2) the initiation of an own money market fund with already above € 75m end of Q2 and 3) the acquisition of an umbrella in Luxembourg. All that should start to materialize within Q3/Q4´24. Hence, the confirmed FY24 guidance of € 220-230m in gross sales and € 41.5-43m in net sales should be reached easily.

Consolidation of the insurance brokerage market in full swing. Apart from the strong operating performance, the Groups proprietary, 360° finfire platform is seen to fuel the market consolidation especially in the insurance broker market that is, in contrary to the investment adviser market, still highly fragmented. Thanks to finfire, the selling and managing of insurance products is much easier unlocking enormous cross-selling potentials, as the already onboarded investment adviser can additionally offer a wide range of insurance products to its customers. finfire hence remains the company´s key mid- to long term growth and scalability driver. The expected strong organic growth momentum is expected to be accompanied by further value-accretive M&A deals that should come at very reasonable price.

Overall, we see Netfonds well on track to reach its mid-term target of € 59m net sales (vs eNuW: € 59m) and € 23m EBITDA (vs eNuW: € 20m) by FY26.

BUY with an unchanged PT of € 74.00, based on DCF.