Gruppo MutuiOnline SpA

MIL:MOL

Earnings Call Transcript 2022-Q3

[Operator]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the presentation of Gruppo MutuiOnline Third Quarter 2022 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Alessandro Fracassi, CEO; and Mr. Francesco Masciandaro, CFO. Please go ahead.

[Alessandro Fracassi, executive]

Good evening, everyone. First of all, let me explain why Marco, our Chairman, is not with us. He, unfortunately, got stuck on the [ side ] that has been significantly delayed. It was supposed obviously to be sharing this call as always. He physically cannot do it. I will be doing most of the talking -- and yes, you will have to bear patients with me on some of the stuff that here we are. So as always, we will use the presentation that was published recently on our website, and we will start from Page 16, where we have the highlights of the results. 1st of the third quarter and then on the 9 months. And then first as the whole group and then we'll get into the details of the 2 divisions. We also have a section where we will give you a little bit more of color on our latest acquisition stream.

So starting on Page 16. As you see, well, Q3 has seen a decline in both revenues and EBITDA decline, it's not that significant in terms of revenues. We go from EUR 71.4 million of last year to EUR 79.4 million, a year-on-year reduction of vertically 3%. If we go at the EBITDA, we see that there is a decline from EUR 22.9 million in Q3 2021 to EUR 19.6 million in 2022, which brings the EBITDA margin percentage-wise from 22% to 28.3%. The reduction year-on-year percentage-wise is 14.1%. This reduction would have been significantly lower if we net the effect that we had in quarter 3 2022 of around EUR 1.8 million one, of course, related to the acquisitions that we have done recently, and they are basically both for financial and legal [ price ]. If you had to put them on the 2 divisions, they probably a 2/3 on the booking as the largest acquisition has been on the booking side and the rest would be on the BPO side.

So if you sum those up, we would have been over EUR 21 million, around EUR 21.5 million. It basically tells you that also the reduction on EBITDA would basically be the same. We normally don't like to put out one-off. This time, they were significant, especially legal fix when [ you international ] taking control of legal fees a little bit more complex. But anyway, so we decided to put them all together here and give investors a flavor of them. So they are and basically Q3 looks worse than it should because of this. At the EBIT level, we see a similar decline.

So we go from EUR 18.1 million to EUR 14.8 million, and the EBIT margin decreases percentage-wise from 25.3% Q3 of '21 to 21.34. -- to 21.3% in this year. The picture on net income for Q3 is instead positive. We go from EUR 9.7 million in Q3 2021 last year to EUR 10.7 million with an increase percentage-wise at 10.4% in Q3 2022. Main reason behind this is the fact that we have recorded in dividends from our participation in one supermarket during Q3 of 2022. Those are -- those impact significantly, and they outweighed the reduction, it wouldn't be there relative to basically the operations of our standard operations in the post perimeter.

So if we look at what this means over the 9 months of 2022, we basically see what we refer to as basically a stable situation for the 9 months. You see that revenues show a decline of minus 1.7% from EUR 230 million for the first 9 months in 2021 to EUR 226 million for the 9 months of 2022. At the EBITDA level, we go from 17.5% to 65.9%. That is a reduction of EUR 2.4 million. Also to this at EUR 65.9 million you would have to add up the EUR 1.8 million that would basically bring you to a stable result for the 9 months and an EBITDA level. The EBIT level margin, we see an increase.

This is also due to the fact that we have less depreciation as we explained in recent quarters on the past acquisitions the ones that we have done in the second half of the -- from 2015 to 2020. And EBITDA margin is definitely stable from 29.3% to 29.1%. Same thing for the EBIT margin percentage wise that actually grows a little bit from 21.6% to 22.6%. Net income also in the 9 months, you can see obviously the positive impact of the dividends, and you see that we go from -- and also the reduced depreciation. So you see that we will grow from 33.2% to 38.5%, an increase of 9 months of 16%, with a net income margin that grows from 14.4% to 17.0%.

Now let's get a little bit into the 2 divisions. First of all, as always, we talk about a little bit about the mortgage market, which obviously is not exactly been an engine in the same month, especially Q2 2022. As we have commented before, we are seeing a contraction in the residential mortgage market. And this contraction is obviously due to the expected collapse of the mortgage volumes, but there is -- we are also seeing now a moderate contraction of purchase mortgage volumes, which have not been there previously. As we commented before, until June, we have seen a growth in demand for purchase mortgages.

Now [ reality ] is that the impact of uncertainty, the impact of inflation up and also partially the impact of interest rates has created a decrease also in purchase mortgage volumes. And then there is a significant factor. We have already commented on it relative to last year, we don't have any more the subsidized mortgages for young people for the technical reason that we have explained more than once. Good news here is that the government is entirely below. And so we do expect with a high probability that starting at the end of the year. So in December, we should see, again, the volumes from the subsidized mortgage [ GS buyer ] people. Obviously, you do understand that as this is a very clear expectations of the market, we are having a backlog effect.

So people are waiting together mortgages lending will be able to get the offer from banks to have a subsidized one. So there is an expectation effect that is also being more than it should the market and there will be a boost of the wisest probably when we will see the [ amend to the low ] and the volumes that the offer from banks. So the subsidized market -- mortgage market coming back. By the way, it's subsidized in terms of guarantees, not in terms of pricing. It's a state guarantee for mortgages that go over 80%. The [ residential ], the usual quote that we have in this section show that basically, there was a decrease across new mortgages origination of 20.7% in July, a slight increase in August, which is anyway a very, very small month. So this number significant, relative -- in terms of seasonality, it's very small almost.

And then again, a decrease in September 2022 compared to the same months. Overall, in Q3 2022, the volumes of remortgages or well by more than 85% year-on-year, while purchase mortgages are down by single-digit percentages in Q3. Data from CRIF, which are the forward-looking data because they are not about the sports mortgages, but they are about the queries by the banking system to the credit bureau. So they look forward. Increase is, again, the main credit bureau in Italy, show a 22.6% year-on-year drop in credit report inquiries for the residential mortgage application in Q3.

And the results in October are basically in line with the actually even worse with the drop getting very close [ to or so ], 24.5%. Again, this is impacted by what I said before in the clearly, the class of remortgage market but also the weighting of mortgages with the guarantee that we do expect to come back by the end of the year. As we look - obviously, as we look forward and we have to take into the consideration and sharp increases in interest rates and also the uncertainty both geopolitically and then economic make us believe that we will not see a Q4 very different from Q3.

And let's say, that if the uncertainty could even worse, the positive that we see for Q4 and especially for Q1 2023 is the fact that we will see the government restoring the functioning of the subsidized mortgage market for young people. By the way, young people means up to 35 years, which is 30 years old, which I think it's a very Italian [ definition ] of young people. Okay. Now if we look just at the Broking division and we look just at Q3, we see a decline of 8.5% from Q3 2021 from EUR 52.6 million to EUR 29.9 million. And this decrease has been basically all in mortgages and mortgages are our product with one of the most significant positive margins. And therefore, the EBITDA has decreased more in terms of -- [ in terms ] more. Obviously, here, [ needless ] to say the impact for Q3 of the one-offs that we have not reported here again. But remember, it's about 1.2 million. So you should have handout for the booking.

And EBIT, it's down similarly from 12.2% to 9.2%, and the EBIT margin goes from 37.3% to 30.7%. Overall, if we look at the 9 months, here, again, it looks more stable than Q3. So we see revenues going down 1% from 98% to 97.1% over the course of the first 9 months relative to 2021. EBITDA has decreased from EUR 36.7 million to EUR 36 million. Again, you should up the one-off cost, in this case, so it will have gone up a little bit. Anyway, the EBITDA margin is very rich, 37.5% in the 9 months of 2021 relative to 37% in the 9 months of 2022. So not too worried about the percentage margin of the [ broken vision ], obviously. EBIT has a similar pattern, 32.4% to 30.4%, a decrease of 6 percentage-wise relative to last year, the EBIT margin decreases from 33.1% to 31.4%.

So as we look some color around this number, basically, what is happening is that the mortgage broking revenues are down significantly in Q3 and all the other business lines are growing, but the growth was not enough to offset completely the decrease in the mortgage brokering. So it is reasonable to assume that we will see the same trends also for Q4. So Q4 for the mortgage broking, we'll see still a decline similar to what we've seen in Q3. And the other business lines are still expected to grow.

What happens in 2023 is obviously more difficult to forecast that. What we can tell you is that the comparison and the impact, obviously, of remortgages will not be [ perimeter ]. We're still there, but we will not be as significant and as evident as we see here. So the trend that we will see in 2023 will really depend on the mortgage market and for purchase mortgages. And that will obviously depend in terms of house prices, interest rates, overall affability and most of all, what is the trust that the consumers have in the future, which is impacted by a lot of factors.

Just let me comment on the fact that the -- a lot of articles are talking about expecting a collapse in house prices even all these articles when they come to Italy, they show a less significant decrease because reality is that house prices have grown recently, but not as much as we got back in most countries in Europe, Italian house prices index never really completely recovered and never really stood the top that be before the financial crisis of 2008 and 2012. So also here, the decrease, we do not expect it in [ Iberia ], but we do not expect it to be as significant as in other countries that have much more recovery of the housing market.

Now to the BPO division. BPO division in Q3 shows a basically stable revenues, a little bit of growth from 38.8% to 39.5%. But this is basically due to the change in the consolidation perimeter because also here, the impact of mortgages was significant and partially, all the things that we have said at the end of June are still true. Here we've seen in Q3, mortgages, the BPO mortgages was down more than 20% year-on-year. So it's just thanks to the fact that we're seeing that we have done acquisition and also to the fact that other business line had grown that we were able to keep the results stable. The EBITDA is also stable here. If you add back the part of the one-off that is relative to the BPO division, you basically would not have seen a decline. And the EBITDA margin would have declined from 23.9% to 21.9% would have basically remained stable.

At the EBIT level, we also here see a decline, and it's from 5.9% to 5.6%, Here, if you add it back, you would have seen a growth as you have seen in previous months. In previous quarters, this is because, again, we are seeing less depreciation relative to the purchase prices of previous acquisition. We then margin anyway, the reported margin goes down from 15.3% to 15.2%. So obviously, if you then look at the 9 months for the BPO, here, you see an overall decrease from EUR 132 million to EUR 229 million. that's basically a 2% decline year-on-year. And this is because, obviously, in the first quarter, we had no acquisitions.

So there was no change in the perimeter. That's why the 9 months look a little worse than the Q3. The EBITDA is decreasing for 30.8% to 29.9%. It's an increase of basically 2.7%. Also here, you would have to add back the one-off if you wanted to get a more fair comparison. The margin decreases from 43.3% to 43.2%, let's say, it's basically stable if you consider the one-off, it's merely stable. And obviously, we're particularly happy the disability also to acquisitions, but I guess they're part of the deal to be able to maintain our profitability percentage wise.

At the EBIT level, we see an increase from 17.4% to 20.7%. That's almost a 20% increase in the 9 months and the EBIT margin grows from 13.1% to 16.0%. Let me say what a few words on the performance, but the real way you can go back 3 months read what we said about the first 6 months, and that's very, very applicable also for this Q3.

So we have substantial stability as you see turnover and especially if you take the effect of the one-offs, if you go at the business line level, there is a very significant reduction, as I said, of mortgage BPO and that's mainly due to refinancing and also to the parameter services. And this has been offset by the positive performance of all the other lines, which are all growing. But in particular 2, one is the insurance BPO where we have a small impact of acquisition, but there is also organic growth and also our real estate services. And in real estate services, as a reminder, we have organic growth, thanks to the work that we are doing on the Superbonus and the Ecobonus, and all of those state subsidies measures.

And also there is the change in perimeter because of our acquisition of [ rope ]. What do we expect for Q4 is basically something again of stability. And we expect it to be very similar to what we've done in the last 9 months. Actually, there will also be, for Q4, 2 months of consolidation of Trebi Generalconsult, our most recent acquisition in the software area, which we will consolidate for 2 months in November and December as we have closed it in the end of October.

This is a perfect lead into our next section, where we give a little bit of what we are - just so that we remind everyone what are the major announced acquisitions and where they stand. So we have acquired from our view, what we have acquired. We have announced the signing of the deal to buy Rastreator and LeLynx. We gave you details during last call. They are the leading insurance aggregators in Spain, France and Mexico. Rastreator is both the brand name for Mexico and for Spain. The timing of it was signed on the 20th of August 2022. And we still expect actually, it's perfectly in line with our expectations to close in the first week of January 2023.

Just after as a reminder, we paid EUR 150 million plus net cash adjustment with a lockbox mechanism, which we will see the effect, obviously, when we do the closing. Again, as a reminder, expected revenues of EUR 62 million and a normalized EBITDA of EUR 8 million in 2022. Trebi is the most recent acquisition that's in the BPO area. I also have 2 pages, I will go through quickly. It's a provider of software solutions in the -- and it's a leading provider of software solutions for leasing and long-term rental and it also has something in the nonperforming loans area. We signed a close deal on the 28th of October 2022.

We paid an enterprise value of EUR 85 million, which paid at closing except for EUR 12 million that are retained as growth for possible lies in the future that guarantees that the saving [ party ] has given us. Expected revenues for 2022 are of EUR 18.9 million and a normalized EBITDA of EUR 8 million in 2022, normalized, meaning this was not really one entity. It became one entity during the course of 2022. So there will be no reported EUR 8 million. Anyway, so let me give you some details on Trebi, the last thing before I hand it over for questions. So Trebi, for those who are not familiar with the Italian financial software market is a vendor of mission-critical software design or the specialty lending market and specifically for leasing. As you see on the page, they basically have 3 lines. One, it's the leasing, which is the most significant.

As you see from the chart here, they represent around 80% of their revenues. Then we have 2 smaller business lines, one, it's dedicated to solutions for NPL services and UTP, especially for UTP, this is significant because UTP contracts are still alive. Therefore, even if they are managed by services, you'll need a system that keeps the contract alive and current with all the characteristics and NPL doesn't have. And there is also some software for factoring overdues and other collection activities. And then there are some other loan products that are supported by this platform, consumer factoring some loans for small and medium enterprises and also some [ security assets, the salary guaranteed ] loans. It is used by a couple of players in the market, although it is not the leading player in this market.

As you can see by the numbers we're showing you, there is a significant EBITDA margin, probably normal for a software company, over 40%. And the revenues are stable and 80% of the revenues are not -- not only the revenues are stable, but around 80% of those are recurring because they're related to licenses or for long-term projects that generate -- that had very high visibility. And then there are special projects that get sold every year. It was -- this company was founded back in 1980. And as to the 121 employees, we basically bought it from the founders. And we -- as we like to do, we gave a new house to an entrepreneurial story in IT in the Italian market, and we hope to be able to grow it further. And the reason why we hope to be able to grow further is because we see significant commercial and industrial synergies with our Agenzia Italia. Here, we are putting together 2 leaders in the market. I am on Page 28. Agenzia Italia is the clear leader in BPO service for the leasing market and for the rental market.

BPO is a leading provider of core solutions to the same players on their IT platform. We have known them for a long time. We know the management very well, and we have collaborated before. So this really made a lot of sense. What we hope to be able to do now is basically to create an integrated offer of BPO and IT at the same time and therefore, completely be -- and by the way, we already were offering some IT solutions with our BPO services. We will integrate this.

We will be able to even be more prompt in the future as we will see probably the quarter of what it's done by a machine that is done by a human progressively shift towards IT. And I think we will be able to manage this process and to help our customers go through this and be able to be partners even in the longer term to be also able to bring more value to the table and therefore retain a more significant portion of the value that we create. This integrated offer, we also go through joint tailored development of new features. Some of them, we have already developed them in-house and will integrate into the more industrial platform of Trebi.

And other interesting development is the fact that we hope to be able to leverage our stronger position of BPO services in the long-term rental market. [ IT ] is already offering something, but it's small pieces. We plan on creating, developing and offering in the market a full-scale IT platform dedicated to the segment of rental. And we will use our unique and distinctive skill in Agenzia Italia and the existing permit product to be able to get there and hopefully be very successful on the market. Commercial synergies are obvious.

And it is also important when there are special projects, new startups because obviously, you need at the same time, both the IT platform and the BPO services and being able to offer them with under -- as a one-stop shop, we'll also enable us to be closer to the clients also in terms of how we structured the pricing offering everything as a service, which is something that [ Trebi ] has not done in the past is something that we can leverage now as including maybe at the beginning, our IT services into an overall service and then Trebi distribution after.

In the end, I think, will have an interesting and significant opportunities talking to the market, thanks to the combined effort. And finally, we currently, when it was outside the perimeter was obviously following projects for their clients, which were also our clients on Agenzia Italia side and some optimizations, which would have helped us as PPO servicer were not high on the list of the things that the clients wanted to do and to develop because they outsource and they don't necessarily see any using, making the back office machine more adapt. So we would react to this by either developing some software in-house or just by letting the client bear the inefficiencies.

Now that we can handle both, we really believe that we can also create some optimization in our internal operations of Agenzia Italia these cost reductions can both be passed by clients and can also create an opportunity for much. I mean that's a deal a margin pool that can possibly be divided between us and our clients. And with this, I am at the end of the presentation. And it's -- okay, definitely, it took me [ not an hour ], I think it's decent.

And I leave this remaining time for questions. So the floor is to the participants.

[Operator]

[Operator Instructions] The first question is from Aleksandra Arsova with Equita.

[Aleksandra Arsova, analyst]

There are a couple of questions from my end. The first one on the last acquisition, Trebi. So just to understand a little bit better, what are your expectations in the coming years in terms of growth, also thanks to the commercial synergies you were -- you were explaining before, a little bit of color on this? And a follow-up on the M&A. So this the first acquisition in the BPO of a software company, basically, we see in the operating margins, which are relatively high. So if this a first step to transforming the BPO business in a more IT and software-like business or you just let's say, a one-off acquisition of this type. And then a second question on the organic business. Just to understand if I got it correctly, you were mentioning before that without this one-off effect of the cost for advisories for M&A or your EBITDA in the third quarter would have been declining at about low single digit.

And so should we expect this trend 4also for the fourth quarter to a low single-digit decline in EBITDA for the fourth quarter is this correct the way I interpret this? And a follow-up on this. So you were giving some color on the mortgage market also in the first part of I think that maybe we will see this backlog effect of people waiting to get mortgage thanks to the government incentive or whatever. But on the other hand, we have a tough comparison vis-a-vis the first quarter of 2022 mortgage for growing. So do you think that in the first part of the following year will be prevailing the positive or the negative step. So it will be similar to the fourth quarter or slightly better?

[Alessandro Fracassi, executive]

Okay. I'll start from let me -- If we look at the overall market in the fourth -- in the first quarter of 2023, there are actually 2 positive effects if you just compare relative to gross new mortgages done relative to the first quarter of 2022 because we will not see the impact of declining remortgages. So probably the comparison at that point, summing up the 2 stuff might be positive or neutral. But then it's really hard to talk about the overall market and what is going to happen also because there is really some uncertainty. So I do not expect - overall, I am positive for Q1 2023, while Q4, we still see that important decline that I mentioned. Relative to the acquisition of Trebi, again, I'll start from the more strategic question. First of all, we have been investing a lot in IT. So I don't want to give the impression that BPO is just services and manpower length to our partner. So otherwise, we would not have an EBITDA margin between 20% and 25% as we have enjoyed in -- since we have been a public company.

Obviously, technology has been a significant piece of our value proposition. Then most of the technology we have been users of ourselves and not necessary selling it to the customers. What we are seeing is that as customers are completely rethinking their technological framework and also rethinking of how they can restructure their operations to deliver more value to their own customers technology plays a big role, operations pay a big role. We want to be a reference point for both things. And does that mean that we will do other acquisitions?

Well, it means we will keep looking. I have to say that now after spending roughly EUR 250 million, we are not in the position to be very aggressive for the next month. But if we look forward and say, we will keep investing definitely in technology. And if something interesting comes up, we will try and look at it. But we have to look at where we stand in terms of financial resources at this point and also the uncertainty that there is around. So we will not be announcing major acquisitions in the first 6 months, 23%, frankly. I don't think so. But will we be looking at new opportunity in IT in the verticals of BPO? I think we will. Will we be able to see growth in Trebi in 2023, thanks to the commercial synergy I talked about? I do think so. Will that -- what will that mean? I hope to be able to generate growth of high single digit. But frankly, that will also depend on really how fast some of these things can be led to the market. And then also bear in mind that we are really thinking of putting together Agenzia Italia and Premistructured.

So we bought it through Agenzia Italia because we believe that we need to create a single entity, which will have a software arm and an operation tank, but which will be sold to our customers as a single service. And that will take more than 1 year as a thing to do. But we expect to be really the one-stop shop for companies that will look at their delivery model, which is a piece of software and a piece of processes as an outsource function. And I think it's going to be a very interesting proposition. So that means that we also will not try to optimize just 1 of the 2 visions. So the reason why we wanted to add one single management structure is that we don't want to be somebody who is in centralized only on selling software instead of selling software with services and [ bile ]. So we really plan to blend the 2 offerings and the 2 organizations.

[Operator]

The next question is from Marco Cristofori with Intesa Sanpaolo.

[Marco Cristofori, analyst]

First of all, on [indiscernible], if you can give some color on what your expectation for 2023 and how this market is developing and qualification? Are they going to be consolidated on the 1st January 2023? My second question is on subsidized mortgage for young people. If you can add some color on how it's working the new mechanism. And the last one is on money supermarket now stated that you are going to stop the acquisition that you have a huge investment there. So are you going to continue in 2023 to invest in money supermarket or are you going to stay how you are now?

[Alessandro Fracassi, executive]

Okay. I'll start. Yes, on First of all, what I said before about acquisitions remains true for everything. So also financial investments like the one in money supermarket are also limited by our overall ability to do more things with our capital looking in the next 6 months. And whatever we will do will be very, very [ difficult ] because, as you know, we need at this point, every 1% that we buy, we will need to announce it. So not comment further, but it will be very visible. So even or not due, you will very clearly see it.

In terms of subsidized mortgages, basically, again, as I said, here, what has happened is that the way the law was written basically made it possible in a fast-growing market in top-growing interest rate market to offer those because the savings that banks have to offer relative to the market price to young couples or young people was tied to whatever where absolute total interest rates shown in the 3 months before. So you were backward looking to the total interest rates and not to the spread and how this has been corrected. Well, it's correct. It will be corrected with the net to the regulator IoT, I believe. So the one that it's going to be approved in the next week. And so that should settle once and pull the problem that have created the end of the possibility for banks to supply that mortgage.

That was a good business for banks and a good business for consumers was just impossible to offer them the way the law was structured. Last area, 2023. Well, first of all, yes, it means we will consolidate it if everything goes according to plan, and all everything depends on us. But yes, we will consolidate starting January 1, 2023. And what we expect for 2023, well, first of all, remember that these are mainly mortgages as well and mainly businesses relative to car insurance and insurance markets in general. So we don't see any of those house outpricing trends or mortgage trends that are impacting all of Europe. So there, we tend to be positive relative to what is the growth. There is also positive news of new entrants in Spain, in the insurance segment with new entrants and new entrants in the market are always a positive for comparison engines.

So I will not say that our expectations have changed relative to the one that we set at acquisition. We are working through the closing and let's say, that the view for 2022 is confirmed in these 3 months, but it's not like we can really make significant forecast for 2023, not even an entered the companies at this point. But there are no significant negative trend in the market themselves. And actually, if there are some trends, some of those are positive as in terms of a new player in the Spain insurance market.

[Operator]

The next question is from [ Philippe Pointer ].

[Unknown Analyst]

3 questions for me. The first, if you can share with us the cost of funding for the new -- if any additional line of debt to finance the acquisition that you announced? Second, there are basically 2 questions on the market of mortgages. First, if -- do you still see or you plan to see some impact of refinancing, basically some bounce back refinancing for some client that decided to reach from a fixed -- from a variable to fixed fearing that the variable rate will jump even further?

And if you can maybe quantify the could be the impact because I get that it depends on the stock of mortgages with younger [ principal ] yet to be amortized. And the last question still mortgages, which is still on the part of subsidized market for guarantee few weeks ago, [ Stennis Paper ], [indiscernible] that [ vendor reported that the mortgages should been ] unlocked, but just for one month, so basically for the month of December. So any comment from you on that, if you just some correct is information reported by newspaper or maybe something about the effective time horizon of the reopening of this part of the market?

[Alessandro Fracassi, executive]

Okay. On the last question, frankly, I don't know, and maybe Marco can answer to this. I don't -- in our [ regular ] discussion, the thing has never come up. So I am not expecting it to be true and just that it's not correct, but I will have to get back on this. Because it's a detail on how the lots written it would seem unreasonable to do an amendment on the law and the mechanism was very clear and why you wouldn't fit it forever, we could see a reasonable, but government can do one reasonable thing.

In terms of refinancing, yes, we are seeing some bounce back at times, especially each time there is a spike in rates. There are a lot of people asking for -- to switch from a variable rate to a [ efficient ] rate. The problem is that it's -- what we really still don't know is how many of those will actually close because when rates go fast, when we take up fast, you might -- you might not be quick enough to substitute it and then think that it doesn't make sense to suffer high rate which you see do to. So in terms of demand, yes, there is a demand, albeit it's different. What we see is not very significant, but it's there. It's clearly there.

But I think we need to see the end of the rise to really think and be able to take decisions or whether you want to switch. So that's my answer. So in terms of the cost of funding, I will refer you back and then we can go through it together. But basically, I will refer you back to our 6 months review where we give you -- we gave everyone on the details of the funding because these were ones that were agreed upon or maybe when we published the results in September for the [ third ] of June, they are in the section of our results of our report. It's called the [indiscernible] after the closing. Let me just get it and we can go through it. So as we said, we -- just a second. And then maybe also Francesco can also give me a hand on this. But let me be there.

So we're talking about 4 financing, one excluding data, which is EUR 40 million plus EUR 60 million, EUR 100 million in total. And we have [ Eribo ] 6 months plus 2%. Credit Agricole, it's Euribor, which is EUR 60 million. You see both months plus 1.65%. And UniCredit, which is EUR 50 million is Euribor 3 months plus 180% and Banco BPM, which is EUR 50 million, it's a euro months plus 8%. So as you see, we are talking about Euribor plus maximum 2%. And that's -- so you can easily do a calculation maybe Francesco has some average cost that we want to disclose, I'm not sure, but not Francesco right now. Sorry, but now we have the calculation of the…

[Unknown Analyst]

If we are not ready to disclose it, the details are there, but...

[Alessandro Fracassi, executive]

Yes, the details are correct. The aging on all the loans that different not calculated on the IRS tax but you can see - you have a cap that you can see a recap that I just sent to you. And also alerting on all these loans about the 50% of the values of these loans, there is a coverage on a fixed rate.

[Unknown Analyst]

Yes, of course, because there is a hedging that we have done on the variable range.

[Alessandro Fracassi, executive]

We have anyway... All the details again are in the Q2 report, and I think this can... But I think the gist of what is the overall cost of the financing for these 2 significant acquisitions.

[Unknown Analyst]

Yes, of course.

[Alessandro Fracassi, executive]

Okay. So I would say it was actually a pretty good deal that we were able to close relative to the current market.

[Operator]

The next question is from Paolo Cipriani from CP Capital.

[Paolo Cipriani, analyst]

A couple of questions from my side. So regarding interest pay, Alessandro, regarding restoratory mix, the market share, the market potential over there in Spain and France. Could you just say something about those 2 geographic places even compared to Italy, how are developed compared to Italy? That's the first one. And just one second is the integration of [Agenzia Italia ] and Trebi. If this new -- I mean, [ antistats ] going to come up from the integration, is it like player in the system, there will be any other competitor. And if so, how do you plan to deal with the pricing with that competitor?

[Alessandro Fracassi, executive]

Yes, good question. Let me first handle the second one. No, there will be nobody that is especially in the leasing and rental area, same offering and of this size, definitely not. Is there someone who might try and follow a similar priority but not starting with the leading position that we have. And just to give you an idea, Accenture to do it. They bought a platform from the sale banks a couple of years ago, and they do offer some outsourcing services so they could create something like this. But nobody has a platform that is leader both in operations and in the market and again in the IT. How do we plan to counter competition? Well, I believe that a joint offering is much stickier than a single offering. And so I think that there are benefits to bundling also in coping with competitors. Relative to Rastreator in the Italian and Spanish market.

I remember we gave some details in the last presentation 3 months ago. But here, let me say, first of all, there is still space relative Italy, Germany and U.K. are the most developed market for comparison. France and Spain are still [ IT ] in the in which terms? Well, first of all, both in terms of how significant is the participation of players to the comparison. There has been a more restraint and so lower competition among players and so lower willingness in Spain and France to enter comparison engines. But if you look at the direct markets of the market that is done direct in Spain, in France relative to Italy, it is not that different.

What is different is the share of comparison platforms that grows that is funneled to the direct insurance. And this is, again, because there has been a restrain of players to take part into it. So the moment that there is a triggering competition in the market, inevitably, we believe those insurance companies, the direct insurance company, we have to look at the comparison platform as the place where together volumes. In the end, there is a significant advantage that comparison engines are relative to direct insurance because their marketing efforts are more effective because obviously, if you are on insurance and you do commercials, you are betting on the fact that you have the best progress that customer when they finally come to your website. we are sure that we have the best project for that customer as a comparison engine.

Therefore, [ Indian ] marketing, there is a clear industrial advantage in marketing expenditure. So in the end, comparison market -- the comparison platform are the best way to acquire customers for direct insurance. So the least expensive way to do it. So this is a trend that we believe will be there. What does that mean? It means that from something that don't cut on the percentages, but I think it's something where -- the market potential for comparison engines could be stable. If you look at what is the percentage that comparison engines have today relative to what it's in Spain and France relative to what it is in Italy. Then obviously, it needs to we need to be able to unlock the market. But that's the potential if we unlock time even if there is no growth of the direct relative to the traditional. And there are obviously why we also believe that the direct relative to the traditional can also grow.

[Operator]

The next question is a follow-up from Aleksandra with Equita.

[Alessandro Fracassi, executive]

[ You sold me alone and you want to really beat up on me ].

[Aleksandra Arsova, analyst]

2 very short ones. The first one, I remember that maybe 1 year ago or some months ago, you had mentioned before that the increasing rate scenario and everything. You were mentioning the fact that in an increasing rate scenario, maybe you could be able to increase the fee to receive from banks and financial institutions for the brokerage activity. As now, of course, the scenario is a recessionary one and that is being below, but do you still expect maybe in the coming year to start negotiating with banks? Or it's not possible in -- would you be as…

[Alessandro Fracassi, executive]

No. I'm not... Let me talk a little bit about this. And I mean I don't remember that such comment, but let me say some things that we can clarify in this well, first of all, when there is any flat scenarios, we have -- there will be potentially also inflation in house prices, and we will see that the unit value that we get out of mortgages will also grow. I mean it's connected to the house price and to the average house price, so that is a positive. When -- what we are able to negotiate in terms of percentage fee up is when there is more appetite for credit and there is more competition among banks. Now that was something that we believe when there is no recession, but the interest rates that go up, that creates the opportunity to do it.

Now obviously, with no demand that might not be -- they might be more difficult, but I hope I'm answering perhaps we really need to understand what the housing market and the mortgage market will do in 2023. And the reality is we don't have that visibility because there are so many factors and some of them we have commented on before the old divisions. You have mentioned you're expecting them to grow. So -- but just maybe to recap.

[Aleksandra Arsova, analyst]

Yes, sure. Okay. And the very last one, maybe a little bit of color on the last time we talked -- you mentioned the fact that maybe you expected some positive effect from the increase in insurance premiums? Or are you already seeing some effects? And maybe I don't know a comment on e-commerce is now is expecting consumption to drop you are seeing some negative effects on this.

[Alessandro Fracassi, executive]

No. Okay. Yes. I mean, as of today, we are seeing growth. And also in the fourth quarter, we do expect growth in the other business lines. Then if there is very significant driving consumption or obviously -- well, first of all, inflation will also create inflation in premia and therefore, we also create inflation in our fees for the insurance. The e-commerce and the special e-commerce comparison caters to the most price-sensitive people in the market. So obviously, there might be a slow in consumption, but I believe that as we some consumption that cannot be compressed will actually probably feel more need for comparison, more people going through e-commerce and wanting to check what prices are there for using our e-commerce comparison. So I'm not worried about the trend in consumption for our e-commerce comparison website exactly for the things that have set today.

Then obviously, there is a very significant entropic lumping consumption as everyone as we do live in the Italian market. I am more worried that competition is established back correctly and do shopping competes fairly with Trebi, that is more important. But I think as people become more price sensitive because they see inflation as prices rise, people need to compare more and just the need to compare more means we will see more traffic to our e-commerce website. So I think we can be positive looking at that.

[Operator]

[Operator Instructions] Gentlemen, there are no more questions registered at this time.

[Alessandro Fracassi, executive]

Excellent. So thank you, everyone, for taking part into this call. I hope I was able to give you an overview as market together in the past. And obviously, if you have follow-up questions, sir, please contact us and we'll be happy to set up a one-on-one call to clarify all the questions that boat analysts and investors do have on our results and on the outlook of our group. Thank you very much, and we see you in a couple of months. And if we don't talk, Merry Christmas and a Happy New Year. Thank you.

[Operator]

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephone.