Netfonds AG Outperforms in FY23: An Insightful Look Ahead

Netfonds AG has surpassed expectations with its financial performance for the fiscal year 2023 (FY23), reporting significantly higher figures than anticipated. The company revealed gross sales of €197 million, marking a 12% year-over-year (yoy) increase, which outstripped projections of €191 million. The growth is attributed to its Wholesale and Regulatory & Technology sectors, which both experienced more than 10% growth due to a 11% increase in assets under administration (AuA) to €23.8 billion. This rise in AuA led to a proportional decrease in material expenses relative to sales, culminating in net sales of €37.0 million, a 3% yoy increase.

The company's EBITDA reached €6.2 million, a decrease of 28% yoy but still above estimates. This figure was bolstered by higher than expected operational expenses (OPEX) of €30.8 million. The earnings before taxes (EBT) stood at €2.2 million, rising by 9% yoy. The fourth quarter demonstrated a strong finish to FY23, setting a confident trajectory into FY24 with expectations of continued growth in the topline and a dynamic rise in profitable assets under management (AuM) from wealth management.

Additionally, Netfonds' finfire platform is expected to play a crucial role in consolidating the fragmented insurance broker market by simplifying the sale and management of insurance products. This innovation not only streamlines operations but also opens up significant cross-selling opportunities. Reflecting on the impressive FY23 outcomes and a positive outlook, an updated forecast for FY24 anticipates net sales of €45 million and an EBITDA of €12.5 million, aligning with the management's optimistic guidance. Accordingly, the buy recommendation has been adjusted with a new price target (PT) of €73.00.