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flatexDEGIRO AG (OTCPK:FNNTF) Q2 2024 Earnings Convention Name July 24, 2024 4:00 AM ET
Firm Members
Achim Schreck – Head of Investor RelationsBenon Janos – Co-Chief Government Officer and Chief Monetary OfficerThomas Lindner – World Head of Finance and ProcurementLaura Hecker – Investor Relations
Convention Name Members
Ian White – Autonomous ResearchMarius Fuhrberg – Warburg ResearchAndrew Lowe – CitiChristoph Greulich – BerenbergBenjamin Kohnke – KBWSimon Keller – Hauck & Aufhauser
Operator
Good day, and welcome to the flatexDEGIRO Analyst Name. My identify is Jess, and I will be your coordinator for immediately’s occasion. Please notice this name is being recorded and in the course of the decision your line can be on listen-only. [Operator Instructions]
I’ll now hand over to your host, Achim Schreck, to start immediately’s name. Thanks.
Achim Schreck
Thanks, Jess. Good morning, everybody, and lots of thanks for dialing in. My identify is Achim Schreck. I am heading the IR division right here at flatexDEGIRO. And with me immediately, I’ve our Co-CEO and CFO, Dr. Benon Janos; in addition to our World Head of Finance and Procurement, Dr. Thomas Lindner; and my colleague in IR, Laura Hecker.
We might very very like to welcome you all to our analyst name concerning our H1 and Q2 numbers as we have revealed them yesterday night submit market shut. As regular, we wish to present a brief run by means of the presentation earlier than we open up in your questions.
And with none additional ado, I would like at hand over to you, Benon. The ground is yours.
Benon Janos
Thanks rather a lot, Achim. Good morning, everybody, additionally from my aspect, and welcome to immediately’s earnings name.
Let’s soar proper into the highlights of the first-half of the yr on slide three. We’re very blissful to shut a profitable first-half of the yr and in addition proceed our sturdy begin to the yr through the second quarter. We had been in a position to develop each prime in addition to backside line throughout that interval, reaching new file outcomes.
Revenues elevated by 28% year-on-year to EUR242 million in H1, whereas internet earnings greater than tripled in comparison with the earlier yr, reaching EUR61 million and rising greater than 200% year-on-year. That is pushed by commissions and curiosity earnings. Primarily based on these outcomes, we’re very assured to realize a file yr in 2024 and are nonetheless anticipating to achieve the highest finish of our fiscal yr ’24 steerage with revenues rising as much as 15% and internet earnings rising as much as 50% year-over-year.
Furthermore, our 2024 AGM on June 4 permitted the distribution of a dividend of EUR0.04 per share, our first dividend ever, and we’re blissful to ship on our capital allocation technique to our shareholders. Talking about capital allocation, the 2024 AGM additionally permitted our plan to pursue a share buyback program of as much as a complete of 10% of the share capital. I am certain you noticed our advert hoc notification this Monday that we now have utilized for the approval of our share buyback program with the German regulator, BaFin.
We count on a solution through the coming weeks or months. Whereas we’ve not communicated the exact quantity of our share buyback program but, let me reiterate what I already mentioned through the Q1 name, that a big portion of the 2023 stability sheet internet revenue is deliberate for the share buyback program. As a reminder, our stability sheet internet revenue for the fiscal yr ’23 amounted to round EUR72 million.
After all, we’ll maintain you knowledgeable in regards to the additional progress as quickly as attainable. Additionally, as you might have seen, we had some modifications in our Supervisory Board lately. Herbert Seuling determined to step down from the Supervisory Board, whereas our shareholder, Bernd Fortsch, who straight and not directly owns shut to twenty% of the corporate was elected as Supervisory Board member. These modifications had been efficient as of the top of the 2024 AGM. The Administration Board wish to thank for Mr. Seuling’s contribution to the supervision of our agency over so a few years.
Now let’s take a look on the improvement of our key KPIs through the second quarter of 2024. We’re more than happy to see that each one main KPIs confirmed a pleasant improvement. Within the second quarter, revenues grew strongly with greater than 30% year-over-year. Fee earnings elevated by 25%, pushed by a repeatedly rising buyer base, increased buying and selling exercise and better commissions per transaction.
Curiosity earnings grew by 47%. This may be attributed to a rising common margin mortgage guide, increased quantities of money below custody and rates of interest above the earlier yr’s degree. Each the ECB deposit charges and the margin rates of interest are round 30% increased in comparison with Q2 of 2023. Gross margins benefited from optimistic combine results with the upper share of curiosity earnings and improved by 3%.
Our working bills stayed roughly flat in Q2 as decrease advertising spending and fewer additions to provisions for long-term variable remuneration largely compensated increased common administrative prices and a rise in present personnel bills, most of them nonetheless inflation pushed.
We now have additionally seen increased prices associated to regulatory necessities. These will not be restricted to BaFin findings usually, however occurred as a result of we additionally drive enhancements in associated areas that weren’t triggered by the audit outcomes straight. Furthermore, we’ve some distinctive bills round this yr’s AGM and ensuing exterior skilled providers, for instance, for authorized recommendation, communication and proxy adviser consulting in addition to for the CEO search.
Going additional down the P&L, our EBITDA elevated by 82% year-over-year in Q2 with a margin development of 39%. That is attributable to the excessive scalability of our enterprise mannequin. On the again of this, internet earnings greater than doubled with a margin development of 78%. We proceed to handle our prices properly whereas rising new buyer account openings by 15%. Pushed by the nice efforts of our group, we had been in a position to convey the common buyer acquisition prices down by one other 32% through the quarter.
Additionally, buying and selling exercise remained stable with the numbers of settled transactions growing by 16%. So in a nutshell, we’re very pleased with the progress flatexDEGIRO made through the previous months, and within the identify of the entire Administration Board, I’d very very like to specific our gratitude to all our staff who labored very arduous on daily basis to realize this outcome.
Now on to our business efficiency within the second quarter. Gross buyer additions amounted to 85,000, a rise of 15% year-on-year. Nevertheless, this can be a lower of 30% sequentially attributed to our regular seasonality the place we see the same old and well-known tendency that many new prospects open their accounts at the start of every calendar yr.
Property below custody reached a brand new file with round EUR61 billion, subsequently, strongly rising 28% year-on-year and 5% sequentially. We settled 15.2 million transactions, rising 16% year-on-year but in addition being down mid-single digits sequentially because of regular seasonality.
Shopper buying and selling exercise throughout the European on-line brokerage business stays comparatively secure over the previous few quarters with a light uptick within the first quarter of 2024. In Q2 of this yr, we noticed a mean 21 trades per buyer account on an annualized foundation for flatexDEGIRO. This places us proper in the midst of the exercise of a few of our closest rivals.
As already talked about beforehand, our belongings below custody reached a brand new file with EUR61.1 billion. That is break up as normally into two major classes: securities below custody of EUR57.6 billion and money below custody of EUR3.6 billion as of June 2024. Purchasers’ money deposits had been secure over the previous few quarters. It is a optimistic pattern as we had been in a position to maintain the money place regular regardless of some comparatively aggressive curiosity choices from rivals out there.
As a reminder, we don’t pay any curiosity on money held on our platforms. This testifies that we’re in a position to faucet the fitting buyer phase out there, prospects that come to us for buying and selling and never essentially for financial savings. Our securities below custody grew properly by round 6% quarter-over-quarter and 30% year-over-year. That is pushed by each increased index ranges and in addition recent consumer purchases.
Turning on to the subsequent slide, you may see our internet money inflows. Within the first-half of the yr, money inflows of EUR7.2 billion, in comparison with money outflows of adverse EUR4 billion, left us with a internet money influx of EUR3.2 billion. 109% of our internet money inflows had been reinvested. The delta to the web investments of EUR3.5 billion was coated by a rise of our margin mortgage guide by EUR0.21 billion or EUR210 million. The money below custody place remained roughly unchanged.
Now as regular, we painting our income break up prior to now quarter. As we already offered a deep dive on the completely different drivers of the fee and curiosity earnings on Slide 4, allow us to soar on to the subsequent slide and to our commerce monetization. We had been in a position to generate a mean of EUR4.33 per transaction within the second quarter of 2024, with a 9% improve from EUR3.99 within the second quarter of 2023.
Sequentially, the fee per transaction got here down from EUR4.64 within the first quarter of this yr. We had been very clear on our Q1 financials name that Q1 commissions per commerce are sometimes meaningfully above common because of seasonal results, so no surprises right here. For instance, some base charges are sometimes charged in January or February. We additionally defined through the Q1 name that we count on the fee per commerce to return down within the following quarters of the yr. That is what you may see now. However evaluating the lead to Q2 to different quarters moreover Q1, you may clearly see the optimistic long-term improvement.
Shifting on to our profitability. We already mentioned profitability within the second quarter on Slide 4. Due to this fact, let me enable to maneuver on to the subsequent slide, the place we’ll undergo our half yr leads to a bit extra depth. Revenues within the first-half of this yr elevated by 28% year-over-year to EUR242 million and rising 20% in comparison with the second-half of 2023.
Fee earnings in H1 amounted to EUR141 million, akin to a mean of EUR4.49 of fee per transaction. Along with a slight improve within the variety of settled transactions primarily based on ongoing buyer development, this 10% improve in fee per transaction was the principle driver of the 17% development in fee earnings recorded in H1 2024 in comparison with H1 2023.
Curiosity earnings in H1 of this yr amounted to EUR92 million, a rise of 55% year-over-year. The rise outcomes from increased depository charges on the European Central Financial institution, elevated rates of interest for margin loans at each flatex and DEGIRO in addition to increased common quantity of buyer money below custody and a rise within the margin mortgage guide. A couple of feedback on prices.
Working bills decreased by 10% within the first-half of 2024. Present personnel bills elevated by 17%, pushed by wage will increase in addition to important hiring of extra staff in 2023 within the context of addressing regulatory findings. Nevertheless, this was compensated by decrease advertising bills, which had been minimize by 29% within the first-half with no adverse affect on buyer account development, which truly elevated year-over-year.
Different administrative bills elevated to EUR29 million in H1 2024, in comparison with EUR27.1 million within the first-half of 2023. This was primarily pushed by considerably increased authorized and consultancy charges, for instance, for regulatory necessities in addition to the extra wants across the AGM and the continued CEO search. These will increase had been partially compensated by the absence of any particular objects such because the fee of a penalty issued by the Italian Competitors Authority within the second quarter of 2023 because of the grievance of a single native competitor towards which we’re taking authorized motion.
All in, EBITDA in H1 2024 amounted to EUR106 million, thereby growing 120% year-over-year. Internet earnings for H1 of 2024 amounted to EUR61 million, greater than tripling in comparison with H1 of 2023. The very excessive scalability of our enterprise mannequin is seen within the very sturdy margin improve.
We grew EBITDA margins by 72%, whereas internet earnings margins soared by 137%. On the again of this, we’re confirming our steerage for the total yr 2024 to achieve the highest finish of our 5% to fifteen% income development vary and 25% to 50% internet earnings development vary year-over-year.
With that, we wish to conclude the monetary presentation, and it is my pleasure at hand again to Achim and wait in your questions.
Achim Schreck
Thanks, Benon, for working by means of the newest numbers. We are actually very blissful to take your questions on the financials.
Query-and-Reply Session
Operator
[Operator Instructions] Our first query comes from the road of Ian White from Autonomous Analysis. Please go forward.
Ian White
Hello there, good morning. Thanks for taking my questions. A couple of from my aspect, please. Simply to begin with, I questioned if you happen to might assist us with a bit extra element across the curiosity earnings within the second quarter particularly. I am certain you may have seen it a way forward of your consensus assortment value the outcomes. So I am questioning if you happen to had any ideas on what we’d collectively be lacking there. Maybe you would give us the gross yield on the margin mortgage portfolio for the quarter or one thing like that simply to assist us perceive a number of of the parts, please? That may be useful. That is query one.
Secondly, I simply questioned if you happen to might say somewhat bit extra about your operational priorities for the enterprise over the subsequent six months. Now that the BaFin associated work appears to be largely behind you. Are there form of new product launches we needs to be looking for belongings you’re doing to reinforce the person expertise, have interaction shoppers extra straight, one thing — issues alongside these strains, please? I would be eager about listening to extra about.
And simply lastly, on the prices, you talked about there have been some extra bills within the second quarter across the AGM and CEO search. I am simply questioning, might we count on to see these proceed into the third quarter, provided that the CEO search is ongoing? Or is it one thing extra particularly associated to the circumstances round this yr’s AGM, please? That is query three. Thanks.
Benon Janos
So let’s begin backwards along with your third query, Ian, on the AGM and CEO search. I believe, clearly, the AGM occurred in June. So we at present don’t count on another AGMs occurring this yr. So these prices are gone successfully. Nevertheless, there was no last reply on the CEO search. So we predict that there may be nonetheless some extra prices, which can come up, however I wouldn’t have any particulars on that. However that is one thing that — the place the guide is just not but absolutely closed.
Your second query was most likely a vital one for us or crucial query as to how we transition from being an organization that labored very arduous to ensure that we adjust to all regulation and make form of the regulator blissful so they do not see any points with what we do. Whereas now transitioning right into a state the place we’re regaining again successfully our capability to spend far more time to take a look at our merchandise, take a look at our shoppers and do just about what you alluded to, i.e., spend time bettering our platform, improve our platform, enrich our platform, but in addition put together for the launch of potential extra merchandise.
A few of them could also be small, a few of them could also be bigger. We’re within the strategy of doing that. We now have had the tendency prior to now to overcommunicate, which we do not need to do. However we’re precisely within the strategy of transferring from placing the regulatory matters behind us, whereas on the identical time, getting ready for brand spanking new options/merchandise for our shoppers.
On the primary query, the curiosity earnings, there are a few results, however nothing actually enormous. One of many bigger impact is that we’ve this one legacy mortgage engagement, which we’ve reported on over the past quarter. And there may be actually not an entire — nothing actually new to say apart from we proceed to guide curiosity earnings for that. Nevertheless, on the identical time, additional down the P&L, we subtract the curiosity earnings provided that it is successfully not booked as a revenue for this yr.
However technically, it exhibits up on the income line and will increase the curiosity earnings line by EUR2 million roughly. The opposite impact is simply the product combine. We wouldn’t have absolutely static margin loans. They’re — the headline is seen. However ultimately, there are at all times small modifications as we managed to extend that barely. And a 6.5% quantity is just not a foul estimate for the second quarter. I hope that covers…
Ian White
Okay. That is nice. Sure, thanks in your assist.
Operator
The following query comes from the road of Marius Fuhrberg from Warburg Analysis. Please go forward.
Marius Fuhrberg
Sure. Hello, thanks. Two from my aspect. Because the German authorities is planning a brand new personal pension scheme, are there any plans but out of your aspect to arrange for that to supply a brand new product? Or do it’s a must to, to illustrate, sit and wait till all the ultimate plans are launched? And the second concerning your steerage, particularly the web earnings steerage. I imply, your present run price factors considerably above the higher finish of the steerage.
Is there any particular impact that you simply count on for the second-half? I imply, the rates of interest would most likely come down somewhat bit, however that ought to not have an effect on the web earnings improvement to the extent that simply the higher finish needs to be reached. And so, sure, my query is, do you count on the — solely the higher finish or is there potential of the enormous increase inside?
Benon Janos
Thanks, Marius. On the personal pension scheme, I believe this can be a essential improvement for Germany, and we can be there. To reply your query, it is each. We’re getting ready for to the extent that we will, whereas on the identical time, in fact, there are particulars which can be missing as a way to make a correct determination or launch any merchandise. And that is one thing the place, provided that we’re in full management of our techniques, our IT, we’re fairly certain we will adapt to that in a short time as soon as the main points turn out to be recognized.
Flatex must be engaged in that, and we’ve to be one of many key gamers to place us for the — it is the most important alternative in Germany most likely after World Warfare 2 relating to a shift to personal pensions. However we do not know the main points. And we do not know whether or not there can be — or which limits can be placed on how a lot cash, whether or not it will likely be akin to the U.S. system. We can be an early adapter for that. It is a vital one.
On the steerage, briefly, we’re prudent. So we’ve no recognized results that might result in a worse profitability at present. And if the present atmosphere continues by means of Q3, I believe mathematically, what you are saying is absolutely proper that we must make a step-up and talk numbers, which can be above our present prime finish of the vary. However for now, we’re prudent, and we’re seeing how the summer season develops, how August develops. After which as soon as we really feel assured that we will talk one thing, we’ll achieve this. And thanks in your persistence on that one.
Marius Fuhrberg
Alright. Thanks.
Operator
The following query comes from the road of Andrew Lowe from Citi. Please go forward.
Andrew Lowe
Hello, thanks for taking the questions. Just some from me. The primary one, I questioned if you happen to might disclose the share of shoppers making at the very least one lively commerce in Q2. I do know you used to reveal that determine in your presentation. It will be nice if you happen to might disclose that for this quarter and the previous couple of quarters. After which the second query is on the expectation for the margin lending balances going ahead. And importantly, what’s the break up, if you happen to’re prepared to reveal it between the flatex and DEGIRO margin lending? That is it. Thanks.
Benon Janos
Certain. Let’s begin along with your second query, our expectation for the margin mortgage. So over the past six months, it grew by EUR210 million. It isn’t a product — I imply, we might love for the product to double, however that is not occurring anytime quickly. So we might like to proceed to see a light development within the quantity, however it’s a quantity that strikes slowly with none violent strikes.
On the break up between DEGIRO and flatex, very roughly, a superb estimate is that one-third of the guide sits with the flatex consumer base and two-third of the guide sits with the DEGIRO consumer base. Whereas that fluctuates, in fact, a bit, a one-third, two-third allocation is just not a foul estimate. By way of the shopper buying and selling exercise within the second quarter and the primary quarter, the second quarter quantity was barely increased than beforehand round 30%, which isn’t increased than within the first quarter, the place we had been round…
Achim Schreck
The — within the second quarter final yr, we had been at 29% and this quarter at 30%. So year-over-year, slight improve. Within the first quarter, we have been at the same 30%.
Andrew Lowe
Nice. Thanks a lot. If it is all proper, can I simply follow-up on that margin lending level? So the one-third, two-third break up, I do know you mentioned that for some time. So — and the expectation was, I assumed that the DEGIRO margin lending would develop sooner. So is that the case or they’re rising at roughly the identical tempo?
Benon Janos
It grows somewhat sooner. That is proper, however it’s not massively altering the one-third to two-third composition. You possibly can see from the numbers that you simply additionally see it within the consumer development numbers, the platforms do not behave very otherwise at present, and the identical is true for the margin mortgage enterprise.
Andrew Lowe
Proper. That is actually useful.
Benon Janos
Barely increased development for DEGIRO, however not vastly rising, proper?
Andrew Lowe
Nice, thanks a lot.
Operator
The following query comes from the road of Christoph Greulich from Berenberg. Please go forward.
Christoph Greulich
Sure. Good morning and thanks rather a lot for taking my questions. Three from my aspect, please. The primary one is concerning the BaFin particular commissioner. If I bear in mind accurately, your messaging was that he otherwise you count on them to finish his mandate in Q3 this yr. So one month into the quarter, simply questioning if you happen to might give us an replace there the place we stand? And sure, if you happen to nonetheless count on that the timeframe that you’ve got described prior to now?
Then I simply wished to follow-up on the opposite admin prices. So if I type of examine the primary quarter with the second quarter this yr was fairly a significant step-up, I believe, virtually 30%, about EUR3.5 million. Is it type of right to imagine that that is the ballpark variety of prices, which aren’t actually recurring, the EUR3.5 million, the rise we have seen between Q1 and Q2?
After which lastly, simply possibly a fast phrase on the CEO search. In the event you can inform us something how superior that course of is and after we can count on extra information on that?
Benon Janos
Sure, Christoph, thanks. Your first query on the particular commissioner, fortunately, no new updates, that are completely different to what we had earlier than. So we proceed to imagine that there is a very excessive likelihood that the particular commissioner will exit the constructing, figuratively talking, by the top of this quarter. However the checks which can be being accomplished by BaFin are nonetheless ongoing. Thus far, there aren’t any adverse surprises in any kind, however we nonetheless have a full month of conferences and checks. So we simply count on that they’ll go properly. And if no adverse surprises come up, then we’ll proceed to stay to the Q3 time line.
On the admin prices, the EUR3.5 million, that is an necessary one. And that is one as a CFO and my colleague, Thomas Lindner, as Head of Finance, we take a look at this fairly carefully. And there are a few issues to say. So primary, we proceed to spend on regulatory providers and regulatory points provided that we didn’t — don’t need to take any danger there.
So we spent a bit extra nonetheless on the regulatory audit matters than we possibly would have thought. We had the extra prices associated to the AGM, that are clearly one-off prices. And the CEO search, I discussed already beforehand led to some bills already. And provided that no new CEO has been introduced, they might proceed to be within the second-half.
So a majority of the EUR3.5 million, if I take a look at it on a year-on-year foundation are most likely one-off, if I teleport myself into subsequent yr and look backwards, however possibly not all of them can be my greatest reply to that. And with respect to the CEO search, I would favor at hand over to Achim and have him taking the query.
Achim Schreck
Sure, certain. I imply, as you already know, we will clearly solely discuss right here type of secondhand data from what at present is the dialogue inside the Supervisory Board and the CEO search continues to be ongoing. There have been candidates recognized on which the Supervisory Board has not but agreed on one. So we’re nonetheless within the strategy of figuring out the fitting candidate after which clearly, having the negotiations. So no new information on that entrance for the time being, and we’ll maintain you knowledgeable as quickly as there may be something new.
Christoph Greulich
Sure, nice. Thanks rather a lot.
Operator
The following query that comes from the road of Benjamin Kohnke from KBW. Please go forward.
Benjamin Kohnke
Sure. Good morning. Thanks for taking my query as properly. Benon, I simply want to return again on the web earnings steerage, please, and the form of implied decline that this implies for the second-half of the yr. And I imply, I absolutely perceive you need to be prudent at this stage. However can I simply verify a few of the indicative budgets on a few of the value strains that you have given earlier than and possibly beginning with personnel prices?
I imply what you have mentioned prior to now is that the form of hiring in your — on the compliance entrance, so staffing your compliance division to adjust to regulatory necessities has form of come to an finish, and also you count on no additional important step-ups there within the second-half, doubtlessly even the opposite. Is that also legitimate?
And second, on advertising, I imply, you have provided that finances of EUR30 million to EUR35 million for the total yr, if I am not mistaken. And if I do the mathematics, it will simply imply a major step-up in buyer acquisition prices within the second-half of the yr. And simply questioning if there’s something behind that. Is there — do you see any form of potential indicators of a rise or an intensive — extra intense competitors right here that might clarify that?
And possibly on that entrance, if I’ll, simply form of on competitors, I suppose. And we have seen — you talked about buying and selling exercise. I imply it is according to a few of your Scandinavian friends. However simply taking a look at some form of oblique indicative information that we’re getting from the choice exchanges in Germany that will level to the buying and selling exercise on the neo-brokers like Commerce Republic or Scalable or so on. It simply looks like that’s selecting up considerably greater than what you are reporting, which is actually no pickup, at the very least not on a year-over-year foundation. So I used to be questioning if you happen to might touch upon that and if that’s form of associated to the advertising finances you are guiding for? Thanks.
Benon Janos
So I believe the questions are very reasonable, and I perceive your query. So on internet earnings steerage for the yr and personnel prices. So to begin with, we made clear that we don’t need to increase the headcount in our agency this yr in comparison with the top of final yr. And we proceed to face by that. So we’re at present down by way of headcount, and we’ll finish the yr with much less individuals than within the yr earlier than.
Normal personnel prices will most likely be a bit increased, however meaning — or that’s pushed primarily by barely increased salaries that we’re paying to individuals. That is the conventional sample of annual wage will increase successfully.
The second issue is that on a year-over-year comparability, in fact, a few of the those who had been added final yr had been added within the second-half and the year-over-year comparability may have — will mirror that. On the advertising aspect of the equation, we don’t see any large or intensified competitors. We don’t see that. We see tendencies that we’re in a position to get a bit extra bang for the buck.
So that you see that we’re in a position to lower the shopper acquisition prices, but develop our consumer base on a bit increased degree in comparison with final yr. And we’ll see no revolutionary however possibly evolutionary tendencies within the second-half. We could allocate a number of million extra advertising spend if it is smart. And we’re open to that, however it won’t radically flip the needle in any method.
So the EUR30 million to EUR35 million finances stands roughly. If ultimately, it finally ends up being EUR36 million, that is okay, however it won’t be EUR40 million or EUR45 million. With respect to buying and selling exercise, we’re monitoring, in fact, a few of the alternate numbers that you simply report. In addition they embody shifts away from different exchanges, however it’s arduous for us to essentially provide you with a precise quantity. We wouldn’t have the sensation that we lose any significant market share in Germany, however I’ll hand over to Achim, who has some extra particulars on that.
Achim Schreck
Sure. Thanks, Benon. I imply if you happen to take a look at the phase information we’re offering within the report as properly, you see the break up between DEGIRO and flatex. Now whereas the flatex phase, clearly, not simply the German flatex enterprise. I believe it nonetheless provides a superb indication about some geographic variations right here as properly. And I believe one can clearly say that we’re doing fairly properly with flatex in Germany.
I imply the shopper development we have seen within the second quarter and within the first-half has been roughly 50%, up 5-0 towards the earlier yr’s interval. And relating to the variety of trades settled within the second quarter, we had been up 20%, shut to twenty%, which additionally signifies that our buying and selling exercise for the flatex phase has been up 6% within the second quarter. So we do see a stronger improvement for flatex at present in that regard as what we see for the European DEGIRO enterprise.
Benjamin Kohnke
That’s honest. Thanks very a lot, gents.
Operator
The following query comes from the road of Simon Keller from Hauck & Aufhauser. Please go forward.
Simon Keller
Hello, good morning all. Thanks for taking my questions. I’ve two. To begin with, how ought to we take into consideration the margin mortgage pricing going ahead? Ought to we assume a declining margin mortgage price in ’25 and ’26 — or ’26 because the rate of interest degree total is declining? And secondly, on the subject of the actual property valuation acquire that you simply talked about earlier, that’s boosting curiosity earnings, you mentioned it is canceling out once more in a while within the P&L. Are you able to — or did I perceive that accurately, to begin with? And secondly, might you identify the road the place it’s canceling out, please? Thanks.
Benon Janos
You had been proper, it does cancel out once more, and it cancels out within the D&A line merchandise, depreciation and amortization, which you will note extra particulars on that after we publish our half yr report, the place we’ll give a bit extra readability on that or you will note it extra clearly. On the primary query, that is an necessary one, in fact. Our margin mortgage guide is above EUR1 billion, and it is a vital a part of our enterprise. Thus far, we’ve seen one rate of interest transfer down 25 foundation factors, and we’ve had no modifications in our pricing — headline pricing.
Frankly, we additionally had no complaints from shoppers who mentioned, now it’s a must to do one thing. So clearly, one notch down has not triggered something. My/our expectations is that if we transfer down one other two notches, possibly three notches, then my expectation can be that we must possibly rethink that. And you will note a small step down within the margin mortgage pricing that we provide. All the things — anything would shock me, frankly. In order that’s not one thing that can go up subsequent yr.
Simon Keller
Alright. Thanks.
Operator
We at present don’t have any questions within the queue. [Operator Instructions] We now have no additional questions within the queue. So I’ll hand the decision again over to your host for any closing remarks.
Achim Schreck
Thanks very a lot. Thanks for becoming a member of the decision immediately. Thanks in your questions. As at all times, if in case you have something additional, please do be at liberty to contact the IR division, i.e., myself and Laura. Thanks rather a lot in your time immediately, and have a fantastic one.
Benon Janos
Thanks very a lot.
Operator
Thanks for becoming a member of immediately’s name. You could now disconnect your strains.
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