Gruppo MutuiOnline SpA

MIL:MOL

Earnings Call Transcript 2021-Q4

[Operator]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the presentation of Gruppo MutuiOnline Full Year 2021 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Marco Pescarmona, Chairman; Mr. Alessandro Fracassi, CEO; and Mr. Francesco Masciandaro, CFO. Please go ahead.

[Marco Pescarmona, executive]

Thank you. This is Marco Pescarmona, and welcome, everybody, to our call. We rely as usual on the presentation that is available on our website. And start from Page 17 with the business update.

On Page 17, we have the full year highlights. We see that revenues for 2021 are EUR 313.5 million, and that's up 20.8% year-on-year. And the breakdown of the revenues is 43% Broking Division and 57% BPO Division, which is the same mix in 2020. The EBITDA is, for the full year 2021, equal to EUR 92.6 million, and that's up 20.9% year-on-year. And this corresponds to an EBITDA margin of 29.5%. The breakdown of the EBITDA is 55% Broking Division and 45% BPO Division. In terms of EBIT, for 2021, it's EUR 69 million, that's up 9.3% year-on-year. And it corresponds to an EBIT margin of 22%, which compares to 24.3% of the previous year.

As we already mentioned a few times in the past, with the acquisitions that we have made in -- with more frequency in recent years, the EBITDA is probably a better way to look at the business because it is not affected by the purchase price allocation that comes with these acquisitions. When we acquire a business, we normally attribute a portion of the price to intangible assets such as normally software and could also be brand and other stuff. And that amount, the purchase price allocation generates amortization and impacts the EBIT in a way that is different from which we are normally when the business has grown organically. So for that reason, we'll put more emphasis on EBITDA, which is the straight EBITDA without any adjustment.

On the next page, you have some highlights on the net income. Because, obviously, you have a very wide variations of net income, we had EUR 130 million of net income in 2020 and EUR 17.8 million in 2021. And the reality is that -- and this is all due -- 95% due to one single aspect of taxation, basically, we -- you remember, last year, we -- in 2020, we did an asset revaluation according to an Italian tax law. But basically, this law allowed us to pay 3% like substitute tax and revalue for tax purposes all our intangibles, so that's mainly software and brands. And the intangibles so revalued are fully tax deductible. So you pay 3% and then you have, in our case, hundreds of millions, a few hundred -- between EUR 300 million and EUR 400 million, roughly speaking, of revaluing intangibles that are then amortized over time and you have a savings of the full tax rate over time, of course, net of this 3% cost of the revaluation.

So the way this was recorded was the creation -- these revaluations are not recognized under IFRS. So under they are only visible in [indiscernible]. And under IFRS, what you see is just the deferred tax asset. So we had this big benefit due to the creation of this PPA in 2020. And it's the EUR 85.1 million that you see on the right-hand side of Slide 18, and so this was the explanation of 2020.

What happened in 2021 is that the government, basically, probably totally understood that they have given a very, very significant tax advantage to a number of companies. And in particular, they were concerned about brand names because there was less control there and so on, and that was where most of the tax payment was. So instead of making the brands, I mean, the revaluation of the brands amortizable over 18 years, which is the normal tax law in Italy, they made in this case of their revaluation, amortizable in 50 years or gave you the way the possibility to undo the revaluation.

So for us, half of the revaluations were software. So that's 5 years, it was not affected by this change in law. But the other half, more or less, were brands. And so we have to decide what to do. We decided to keep the tax benefit, but the way we decided to account for it was to recognize only the first 18 years of tax benefits. So basically 2/5 of, roughly speaking, of the overall tax benefit.

So we had this negative tax component of around EUR 30 million in 2021, which is this adjustment to the DTA. So this explains -- so 1 year, we had this be positive and next year in 2021, we had the adjustment. And with this, I think, we should have a very stable situation. This is not going to be changed. I mean it's such a very, very low probability that this will be passed, again, in the future. So in the end, we are very happy despite this adjustment with the outcome of the asset revaluations. And so this explains also the structure as well as fluctuations in [indiscernible].

So these were the high-level results before going into the different divisions and the business lines. When we say something about the residential mortgage market, let's start from recent evolution, basically in Q4 2021, the market was down year-on-year in terms of gross origination flows, basically purchase mortgages were slightly very marginally up, but a strong drop in mortgages.

If you look at the Assofin data, you see that originations were down every month of the quarter. So 10.3% in October 2021, 10.9% in November and 16.4% in December. And Assofin provides a breakdown of these flows. And basically, it's right that I think purchase margins were up around 1% in total but in mortgages were down more than 50% in Q4 over Q4.

And if you look at credit information from CRIF, it's a similar picture. This is, of course, a bit more forward looking. And you see a drop of inquiries in credit bureaus of 16% in October 2021, 13.1% in November. We didn't publish the figure for December, which is probably because it was not very positive, actually, probably quite negative. And in January, the drop was of 28.2%. So this is what has been observed.

Now in terms of expectations. First of all, we want to keep in mind that Q1 2021 was a very strong quarter. Basically, a very strong quarter, Q4 2020 and Q1 2021. So the first quarter of 2022 will be compared against a very robust performance. And we see the same trends that were present in the previous quarter, so you'll see a very significant growth in the mortgages and let's say, stable or marginally growing purchase mortgages.

Then there are more favorable comparison going forward. So you will have initially a slower contraction of remortgages and possibly at the end of the year, you could even get to a flattish situation in terms of remortgages. Whereas for purchase mortgages, expectation is a continuation of the trend of growth that we have observed in the last year and -- or years even, so some moderate growth.

Of course, there is one thing that is happening that is anything is gas prices are starting to grow and so are also average mortgage amounts. So that will have, in terms of origination flows and commissions, which are a percentage of -- for our broking business at least of origination flows. And of course, there is a big question mark coming from the geopolitical situation, to see if consumers get scared because of the war in Ukraine or if they stop or slow down the investments in stock-buying houses or they get scared and they invest -- they want to be a safe asset. So there is a little bit of uncertainty there, and clearly also, there is the indirect impact from the increase of energy prices that maybe could reduce available income. But I mean for now, it's very limited to say how this will go.

Going to the update on the Broking Division on Page 20, we have first the overall financials of the division. Revenues are EUR 134.2 million, that's up 20.9% year-on-year. And EBITDA in 2021 is EUR 50.7 million, so that's up 12.8% year-on-year. And the EBITDA margin is 37.7% (sic) [ 37.8% ], which is down compared to 40.5% of the previous year. And the EBIT is EUR 44.2 million in 2021, and that's up 5.6% compared to 2020.

Here, we have to keep in mind that we made the acquisition of SOS Tariffe in the end of November 2020. So the SOS was consolidated only for 1 month in 2020. So part of the performance of the Broking Division is linked to this change in perimeter, but [ not looked over ], and then we'll comment on the individual business lines in the following slides.

In fact -- okay, let's see, first of all, on the Page 21, the update, so we shared of the acquisition. What is important is that roughly in general terms for our Broking Division and the outperformance in 2021 for the Broking Division was not particular affected by the pandemic. So we [indiscernible] either particularly visible negative nor positive effects, whereas, for instance, in the previous year, E-Commerce Price Comparison and significantly benefit of -- from the lockdowns. So it was more or less a normal year in terms of -- I mean, maybe to work from home, but in terms of demand in the business, it looks relatively normal.

And looking at the different business lines in Mortgage Broking, we will have revenues up 13.1%. So we did 40 -- EUR 54 million of revenues. And the performance was strong in the first part of the year and progressing a bit in the second half of the year. And in terms of expectations -- sorry, I mean also for us, the contraction of remortgages in the final part of the year was very significant. So we are well above 50% in terms of year-on-year growth of remortgage volumes in Q4. So that's why we are talking about a full normalization taking place.

Purchase mortgage volumes are expected to grow portfolio market but also for us. And clearly, the impact of the mortgage in Q1 is the negative impact is more relevant and expect the positive impact of purchase mortgages. So we expect to see a drop year-on-year contraction really will increase a little bit in terms of market share, but overall, the impact of remortgages is just to be in terms of the type of contraction. So that will be most likely to a contraction of if not of the revenues in the first quarter, certainly the first one, possibly the second maybe and you will have to see as we go forward, but the comparison will be hereon easier as we progress through the year. So that's Mortgage Broking.

Then there is Consumer Loan Broking. Here, basically, we did a lot of things on in the product, but also find significant money in a way to relaunch the business. And certainly, we achieved very strong growth in terms of top line. So almost double the revenues. We did EUR 9.1 million in 2021, while it was EUR 4.6 million in 2020. But we also spent a lot of money in marketing. So even in absolute terms, the net contribution of this business was lower in 2021 than in 2020.

Now in 2022, we expect to keep a high level of revenues, but also we expect to see margin expansion. So we see there are things to do. So we are not really optimistic about this business where we have introduced a lot of changes.

Then Insurance Broking. Insurance broking, this has been a stable business for us in terms of stable growth, not stable revenues. So also in 2021, we were able to grow 20% year-on-year. We did EUR 24.5 million of revenues. And this growth was also benefited from an increase in our market share of new online contracts. So in terms of new business, we believe we did pretty well.

And by the way, this growth in revenues comes against the backdrop of declining premiums. So the growth in terms of number of new contracts is stronger than this. And so thanks to the volumes, we are clearly able not only to counteract this contraction of premiums but to deliver good top line growth. By the way, this is a business which, as we explained several times in the past, thanks to have a significant fixed cost component. So as we grow revenues here, we also see margin expansion.

Now in terms of what we expect to see for 2022. We expect to see growth, and we expect to see the top line growth, and we expect to see also at a faster pace, growth of the margin contribution. The only thing that possibly changed in terms of outlook compared to only just 3 months ago, is that -- now we have much higher gasoline -- gas prices, diesel and gasoline price and green gasoline prices at the pump, and people are spending EUR 1.6 per liter. Now they're spending EUR 2.4 per liter and a lot of people are driving less. So if this happens and continues to happen, this reduction of mileage could lead to a continuation of the decline of insurance premiums because if people don't drive, they don't make accidents. And so this was a bit the outlook because we were counting on increasing premiums and then most reaching and so on, and maybe this is not made to happen this year.

Then E-Commerce Price Comparison. This was exactly as anticipated. This was flattish year-on-year. Actually, it will be minus 1.2% year-on-year and booked revenues of EUR 34.1 million in 2021. And we had, however, to spend significantly more money in marketing to deliver these revenues. And this is mainly because we are back to a normal situation. So the performance of 2021 is much stronger than 2019, but clearly, weaker than 2021.

As a reminder, in 2021, we had in the first half of the year, in 2020, in the first half of the year, we had all stores, physical stores that were closed except for very essential goods such as food, but you couldn't buy other stuff in physical stores. So you could only buy online. And Amazon suspended all advertise -- all marketing activities and they were even only delivering basic necessities, and many things there for a while couldn't be bought in Italy on Amazon. So clearly, our merchants kind of dominated the market and we saw incredible demand. So that was unique and not repeatable. And we expect the normalization and that's what happened.

Anyway, the normalization in 2021 was -- also in terms of the e-commerce market overall, our feeling is that it was a relatively weak market. So as soon as people have an opportunity to go to malls, to shopping centers, to high-street stores, they prefer to do it. So for a while, e-commerce was very -- but anyway, now the situation is normal, the comparison of 2022 to 2021 would be a normal year compared to a normal year. And what will have also grow as we expect is the increase of e-commerce penetration, which continues and also the fact that we continue to work on the product.

Finally, Telco & Energy Comparison. Well, clearly, we had a super growth because we changed the scope of consolidation, because of the position of SOS Tariffe. On a like-for-like basis and also if you just look at SOS Tariffe, however, there was a contraction because 2020 has seen a huge demand for broadband contracts that normalized, so we had significant contraction there. And energy was not particularly strong for the first half of the year. Only at the end of the year, we started seeing a significant demand for energy as we started seeing increasing prices.

So it's again a good 2021 on the face of it. In practice, not so good. But in terms of expectations, now we see strong demand for energy contracts just because it's -- energy is becoming more and more expensive. We sell both electricity and gas contracts, and sometimes we sell it together. Differently from other countries. For now, we don't see any supply restrictions. So there are -- we see many operators that are still competitive. And so we have a good product offering in this market. Of course, in the U.K., for instance, a lot of energy operators went out of business, depending on what the regulators do and how the situation evolves, there could be some risks. But again, for now, they've seen quite marginal. Regarding telco contracts, instead we expect stability more substantial.

And operationally, we are still devoting a lot of resources to fine-tune the offer and improve the organization and so on. So this is a business where we have still significant room for improvement despite the big jump that we made with the acquisition of SOS, and we are still dedicating significant resources to this.

And with this, I'm done on the update on the Broking Division, and I hand it to Alessandro for the BPO Division.

[Alessandro Fracassi, executive]

Thank you, Marco, and hello, everyone. So we go to the next page and commenting on the BPO Division. The BPO Division, the performance of 2021 was solid, showing top line growth of 20.8%, growing from EUR 148.3 million to EUR 179.2 million. Also, we also were able to show margin expansion at an EBITDA level with growth from EUR 31.6 million in 2020 to EUR 41.8 million in 2021. So year-on-year growth of 32.3%. The EBITDA margin grew from 21.3% to 23.3%.

Marco has already commented on the fact that the EBIT margin also grew here. It seems like the, again, the profitability at the EBIT level shrink. Again, this is due to the effect that are not really business driven, but go to the increasing amortization of purchase prices.

We can go to the next page. Actually, as we will see, most of the growth has come from the change in our consolidation parameter in 2020, in fact, with SOS Tariffe, we consolidated the Gruppo Lercari so our new significant acquisition in the insurance business only for 1 month while 2021, so the consolidation for all the year. And therefore, that's where most of the growth comes from. Instead on the EBITDA level that we saw growth in margins from a number of our business lines, and I will start commenting later on this.

So in -- as we look, apart from commenting on the size, performance of 2020, let me also say that if there was no acquisition, we would have probably grown around 5%. So there was also organic growth in the business, although not as strong as the overall numbers show. And as we look at fiscal year 2022, [ partially due ] to the unforeseeable effects of the international geopolitical instability. But if things remain as they are now, we will not have or we are not seeing significant impacts.

But anyway, what we expect to have in 2022 is the performance that is going to be similar to the one that we have shown in 2021, meaning we will see growth both at -- both on a top line level and at the EBITDA level. And this growth will be mainly driven by the bolt-on acquisitions that we have either already performed or announced and will be closed by half -- before the end of the first half. And the existing perimeter will basically remain stable or show a little growth, but the differences between the different business line that I will detail now.

Let me just say one thing, as this will not be discussed in the following slides that in 2020 and also in 2021, the EBITDA margin was impacted negatively by the startup of our fintech specialty finance business, which is represented by the company, Centro Finanziamenti S.p.A., which is a lending entity regulated according to Article 106 of the Italian banking law and which was in fact [indiscernible] was showing negative EBITDA. We expect this initiative to break even already in the first months of 2022. And therefore, it will start with a small contribution. It will contribute to the positive EBITDA of the division and for sure will stop trailing EBITDA as it has done until now.

Okay. Let's go in the different business lines and starting from Mortgage BPO. Well, here, we ended up showing a minus sign in terms of revenues. As we had expected at the beginning of the year, then we were a little bit more positive during the course of the year because the first 4, 5 months were really strong. But then the normalization of the refinancing volumes that Marco has already touched upon showed us that in the end, we were not able to reach the same levels of last year.

As we have commented through the year, there was anyway the growth of our traditional services though it was not connected to refinancing. And as you remember, these are underwriting -- outsourcing of underwriting, services, outsourcing of mortgage, commercial efforts for banks, especially for online banks. All these things have been growing. And therefore, there was, if you consider this basically a stable revenue, so it was a significant change in the business mix. And the significant change in business mix meant also that we were able exactly opposite to what have happened in 2020 to see increasing margins both at a percentage level and at an absolute level. So we are higher contribution to division EBITDA by the Mortgage BPO business line.

So as we look at 2022, we basically expect that the business mix will remain the same, that the one that we have seen in the last quarter of 2022. And therefore, when we will compare revenues at least for the first half to 2021, we will for sure see a restriction, a contraction in our revenues. And the marginality, so the percentage operating margin will be higher, again, thanks to the different mix of services. And this is basically the only business line where we do expect a contraction next year.

As we look at real estate services, this was a positive surprise also especially in the second half of the year. We've shown margin -- top line growth and margin expansion. And we -- as you see, the top line growth was double digit. And also -- and the same trend happened also in the underlying margins.

2022, I'm sorry, this was thanks to things, the improvement of the margin also at a percentage level was obtained in 2 ways. One was with a careful management of the external direct cost connected to valuation appraisals. Basically, we were able to squeeze a little bit of margins out of the professionals out in the territory that actually perform the appraisals.

And the second thing is the contribution of the Ecobonus incentives, of the service connected to Ecobonus incentives. Remember that we had said that this would contribute positively to this business line. And any bid with higher margins than the normal business, and this will continue also in 2022.

The numbers for this business line will be for sure higher in 2022 because this is a business line where we will be reporting the activities of one of the acquisitions that we have done, the one that we completed in the 1st of March. And so we will consolidate it already for a month in the first quarter of 2022. And therefore, here, we will see the growth thanks to the acquisition. In the existing perimeter, we expect revenues to be in line with the one of last year, basically because we were not able to renew one contract. And therefore, the -- and this will be offset by the growth in the Ecobonus services.

Going to the Loans BPO business line. This is also, let's say, at the end, a positive surprise. If you go back and read the notes at the beginning of last year, you remember that 2020 was a record year and it was a record year thanks to the fact that we have entered a new market, which was moving due to the pandemic. It's the market of services related to secured loans for small and medium enterprises, loans that are assisted -- sorry, not secured, guaranteed loans that are assisted by the state guarantee, which boomed in 2020. It was the year -- the way that this was sustained the small and medium enterprise during the pandemic crisis. And so we expected those numbers to normalize, and they did. But let's say, it took a little longer than we expected.

But what we were able to do, and we have said we would do it, but then again, it was -- well, is that we shifted from new volume originations to servicing those volumes. And so we were also able to expand those activities, the servicing activities for the P&I, for the SMEs guaranteed loans. And so we were able basically to replicate the record results of 2020. So I'm particularly proud of the results of this business line.

In 2022, we will see probably continuing the trend of small growth, although, again, we will have to see whether there will be another boom. A possible upside here is the fact that there will be an increase in the state guarantee connected to what's happening in -- with the war between Ukraine and Russia and the crisis in the energy market.

As you know, the state is discussing -- the parliament is discussing to undo the phasing out of this [indiscernible], which was supposed to magically normalize starting June, they are already changing the situation and then they'll probably extend this and even increase the level of guarantees in some sectors. So that might again increase the demand for this kind of product, and we might have a positive impact here.

Now looking at insurance. This is the business line where obviously the growth is totally inorganic is due to the consolidation of Gruppo Lercari. As we said, this was a complex transition here where we integrated our activities with the one of Gruppo Lercari. This is an effort that will continue also in 2022. We also have to do a little bit of restructuring with the connected costs of our previous operations.

But let's say, here, we will see growth. The growth will come from the acquisitions that we have performed, 2 acquisitions here, 1 really small in motor claims and 1 more significant in property claims. So we will see growth here. But even without that, we did expect our -- Gruppo Lercari, even without the acquisition, to grow, let's say, around 5%. So the outlook for this business line is positive.

Relative to the investment services BPO, here, we see double-digit growth. We had expected it because we had a new contractor, and we have delivered on what we expected. Frankly, we had to sustain more costs than we thought in setting up this new business. And so we actually wait a little bit on the margins of this business line. Although we -- and looking at 2022, we expect this effect to be where we deliver and as volumes will go up, and we will see the growth connected to this new contract.

Let me say that as it is upside, there is a potential downside because some of the contracts that we have in this area as it is normal as a revenue driver, the assets under management of our clients for which we do the back office and the initiative activities. And obviously, we still are -- we have seen recently significant impacts on the price of assets, the financial assets that will also impact a little bit, I mean, not totally, but some of our revenues are linked to the prices of financial assets. And if the scenarios worsen, we could have an impact here, even if the activities will continue.

Last, but definitely not least is our leasing and rental business line, which is basically -- which basically comprises of Agenzia Italia S.p.A., and which, again, performed well, surprisingly well and indeed by increasing both revenues and operating margins. There was -- especially on the operating margins is an over effect from last year from the stamp business, which is one-off but even -- but the growth is not only due to that. There were also some new activities that were obtained and the business line was also able to counteract the effect, its lowering effect of -- in some businesses, which are connected to the registration of new vehicles. As you know, the delivery of new vehicles has slow down because of the disruption in the supply chain of some components, of some key components to automotive manufacturers like the chips.

So even with this headwind, the business line was able to deliver solid growth. So as we look at 2022, we expect to see, again, a little growth. Maybe not double digit, but overall, the outcome is positive, again, if nothing really major happens from Eastern Europe and from the war scenario.

Okay. I think this closes the outlook, the comments on the BPO Division. And before we open up the floor to questions, let me just comment on Page 29, where you see it's our earnings per share. Obviously, these are relative to the reported net income in the top part. So as Marco has explained, when commenting the net income, this should swing positive in 2020 and negative in 2021, which are just in the reported net income.

But in terms of dividends, so we decided to propose to the shareholders a cautious, stable EUR 0.40 per share dividend, which is still at the maximum level that we did last year compared to the result is as always a cautious stand, and it is to keep us -- to give us financial flexibility in the next months. If things get worse and even in this scenario, there are probably mainly opportunities to capture, but also if significant that which we don't oversee -- we don't see now might anyway materialize and it's better to have the financial flexibility to be able to [ help with them ].

[Technical Difficulty]

[Operator]

Excuse me, this is the operator. The connection with Mr. Fracassi has been lost. Just a second, please. Hold the line.

[Alessandro Fracassi, executive]

Sorry. I'm back. I would say this basically closes the presentation. I think we can open the floor to the questions. Thank you, operator.

[Operator]

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

[Aleksandra Arsova, analyst]

A couple of questions on my end. So first of all, if you can give us a brief, a little bit of color of -- about the 2 latest acquisitions you announced, Europa and Onda Group. So what are your expectations in terms of growth and synergies with the other divisions? As well as maybe if you have it, how much of, let's say, of the pie will be -- will go to PPA and goodwill? Just to give some [indiscernible] in my calculation.

Then the second one is on the acquisition of the 3% stake in MoneySuperMarket. So over here a little bit of color to understand is sort of investments like the one we have in Cerved over the past years. And if in case you have in mind some collaborations since it's [indiscernible] MutuiOnline in the U.K.

And also on this point, so to understand how it was -- the accounting -- accounted over the last -- in 2021 because as far as I understand, you booked in 2021, EUR 40 million in assets for diluted at fair value. So I wanted to understand if also the cash out was EUR 40 million or maybe less just to build the net financial position.

And then the latest one, the last question on -- recently, there were some, let's say, rumors in the past that Facile.it, your competitor is going to be potentially, let's say, sold by the private equity fund. I was wondering if you may be interested or if you have maybe thought about it and maybe there could be some synergies in the case you decide to look at it and -- a little bit of -- your opinion on this.

[Marco Pescarmona, executive]

Okay.

[Alessandro Fracassi, executive]

Marco?

[Marco Pescarmona, executive]

Yes. Are you going to provide the first one?

[Alessandro Fracassi, executive]

Yes. Maybe I'll just talk about the first one, maybe I'll leave either you or Francesco to comment on the PPA. But let me just say that in terms of the rationale and then some color on the 2 acquisitions. Let's start on Europa. Europa basically does some real estate services connected to mainly the [indiscernible] process. But not only, but basically to the mortgage and the secured loan market. And there are going to be synergies connected by the fact that we are already doing some of those services and we will probably be able to rationalize the way they are now offered and there are also some commercial synergies of, basically, their client base is a little different from ours. And we believe that we will be able to take some cost optimization between the 2 businesses.

But bear in mind that generally speaking, there are never huge synergies in the BPO business and -- as you do some vertical integration, which is not the case. But here, there is an interesting effort that we can do in rationalizing the way this and making more efficient their delivery platform. They are a well-established company, but we should still run, let's say, in a not completely streamlined way. And I believe that thanks to the size and our experience in creating BPO services, here we will be able to generate interesting margin growth. In terms of the overall growth of the business, I think it has opportunity to grow especially in terms of market share into other players in the market.

Relative to Onda, Onda is a business which is very, very similar to -- on the smaller -- to a part of the Gruppo Lercari. As you know, Gruppo Lercari does group appraisals for energies and PPA services. Onda not only appraisals for damages and they are very strong in 2 areas of Italy, mainly Tuscany and Campania. And those were areas which were not covering very well. I believe this was -- is going to be a very successful acquisition because basically, we are helping the consolidation of suppliers to companies and to insurance companies for claim processing.

And part of it is happening by itself, and part of it we have been creating the clear business leader in this area. And I think we are still looking at other opportunities. And I think it's a very clear trend and is welcomed by the insurance companies. And again, here, we have synergies basically rationalizing the network of appraisers and also, again, by bringing, let's say, the best practices of Gruppo Lercari to these smaller companies. So we hope to be able to also increase the margins.

[Marco Pescarmona, executive]

Okay. And Marco, again, I say just a couple of words on the PPA on these 2 acquisitions. As always, we buy companies that don't have tangible assets. And as usual, normally, the price that we pay is higher than the book equity of the companies. But we still have to see, in this case, how we will allocate the difference. Most likely, we will have a provisional goodwill for -- until the end of the year, and then we will figure out what we can allocate to what. So there could be a little bit of software that may be not too much. There is certainly going to be a significant portion that will remain goodwill, but we still have to look at it. So we don't have the answer yet.

Regarding the 2 other questions, first line supermarket. Well, in some respects, it is similar to our investment in Cerved because it's a minority investment. Let's say that this is a company, which we believe is the market leader where we think we understand the business. So this is a business that we know the type of business, I'm saying better than -- being Cerved have similarity with our business, but was not exactly the same stuff.

This is the same stuff that we do with our Broking Division in Italy in a more advanced country. And I know for now we're just a small but investor, certainly, we can learn from them, certainly, even in terms of observing the company, maybe in other ways. And we are not competitor in any way. So we will be open to, let's say, forms of industrial collaboration, but these are really domestic businesses. So it's really we have collaboration every now and then with other players in other countries. It doesn't have much to do with the shareholder.

And in terms of what was on the books at the end of the year, I think maybe Francesco will correct this year. I think we paid a bit less than the price it was or more, I mean maybe not. But Francesco, did we pay -- it was not far away from what we have at the end of the year in terms of cost, but we have a pay-per profit or a pay-per loss at the end of the year, Francesco?

[Francesco Masciandaro, executive]

I think that it was a little profit at the end of the year.

[Marco Pescarmona, executive]

Yes, that's for the remember as well. It's not relevant. So that amount is a proxy of what we paid for it. It's marginally -- maybe margin was slightly up, then of course, there were the adjustments in -- at the beginning of 2022, so -- but so that's the answer there. And we don't have any particular plans for this. But it's a company that we like. It's a market that has less structural growth because it's very penetrated, but still had some to face some significant tailwinds that did have that are likely to be reversible. So we thought it made sense as an investment, let's say.

And regarding Facile, there are, of course, heard the rumor that it's now for sale. It's something that would have very significant synergies with our broking business. There is a certain degree of uncertainty regarding the feasibility of a business combination under antitrust laws. And let's say, just looking at what's written in the law, I'm not giving legal advice or anything, but just making a simplified summary. But apparently under the current Italian legislation, if we acquire Facile, this will not be subjected to antitrust notification because we would -- if we acquire it by ourselves, because the combined revenues would be below the applicable threshold.

And normally, again, based on current antitrust legislation in Italy, if you are below the threshold, the authorities are not allowed to request notification. But again, if you want to know more, it's just better to talk to lawyers. The point is, however, there is a new law in the making. Basically, there is this new law proposal on competition that is now in the Senate. It's a proposal that was put forward by the government in November, and it has to be approved by both houses of parliament. And of course, they are also allowed to amend it.

And if this passes as in the government proposal, basically, it would make it very difficult. It's better to consider a business combination between us and Facile because basically, with the new law proposal any combination that passes only 1 of the 2 thresholds. So the thresholds are the combined entity revenues and the target revenues even if only 1 threshold is exceeded, competition authority would have the option that will to request a notification and that would make it very difficult.

So -- and by the way, it's not clear when the new law will come into force, it's likely that is come into force any time between now and the summer. And depending on how the possible sale of Facile evolves, we would have a window for doing it or of feasibility, let's say, from an antitrust perspective or be out of this window. So there is a lot of uncertainty.

Also, again, here we have no particular information. We are talking about the process that even -- where apparently the sellers has big ambitions in terms of price on one side. On the other side, there is a lot of uncertainty in the markets in the overall geopolitical situation. So we don't even know if this is going to proceed. So the state of the intention and the process itself will not go ahead.

So with uncertainty regarding whether the process will -- or a sale will take place this year. And there is uncertainty on -- which doesn't mostly depend on us on whether we are -- we would be able to do a transaction from a competition standpoint. I'm not sure if this clarified anything there, Aleksandra, but this is a representation of the situation today.

[Alessandro Fracassi, executive]

But there are synergies [ that's expected ] a clear point.

[Marco Pescarmona, executive]

Very significant synergies, yes.

[Operator]

The next question is from Marco Cristofori with Intesa Sanpaolo.

[Marco Cristofori, analyst]

Good afternoon, and I have a strategic question. It seems that you are growing through acquisition in the BPO business, while in the broking business is more difficult to finalize something -- some new deals except Facile if you want.

So the question mark is that the EBITDA margin of the Broking Division has been always higher than the BPO Division. So in other word, don't you feel that if BPO Division will continue to grow, you will dilute the consolidated margin? Or maybe you have the target to which a similar margin in both divisions? That's my first question.

And then 2 very small things. If I calculated well the tax rate, excluding the impact of the revaluation, has been 26.5% in 2021. So I just wonder if it's something sustainable in the future or you think that it could be go up.

And the last thing, I noticed that you reported an asset write-down of EUR 2.8 million in 2021, just to understand to what is referred.

[Marco Pescarmona, executive]

Okay. Thank you for the questions. So regarding the, let's say, margin dilution because of, let's say, the faster growth, thanks to acquisition of BPO, at least the possibility of that, we don't really look at our average EBITDA or EBIT margin because we really think that we have 2 independent businesses that have different structural characteristics. So of course, we try to improve or we might have -- we don't disclose anything, but let's say, we have also margin targets for the 2 divisions.

But the way we look at the margins are by division. So if for some reason, tomorrow, we are able to multiply the BPO Division by 10, and this leads to a significant decrease of the average EBITDA margin, we are very happy with that. Instead, we want to make sure that the BPO Division always has a certain type of margin, also the same at the level of the Broking Division. But the relative growth of the two and the impact it could have on an aggregated measure is something we are not really consider in our decisions.

[Alessandro Fracassi, executive]

If I can add to this, I believe that also most of our investors have learned to look at our company and our group exactly in this way. And as we talk to investors, we see that there are some that are really interested in what we do on the BPO side, others that are really interested in what we do on the broking side. And obviously, what you just commented on the fact that we don't have the ability to -- because basically, there are no targets or obvious targets on the broking side, is today one of the ability to allocate capital from one division to the other is also one of the things that makes us today keep the two things together.

[Marco Pescarmona, executive]

Absolutely. Yes. And regarding the tax rate, I think that the tax rate you see for 2021, which is similar to the, let's say, the nominal, the standard tax rate for Italian companies is a reasonable indication. By the way, in Italy, we have all these very interesting tax laws that make the tough calculations every year difficult for you. Normally, you have done the calculation estimates and so in general, most of these tax laws provide some tax benefits now this year where this like benefit for the companies that increase their equity, obviously, we were quite profitable. So a number of our group entities increased their equity, and this will bring a tax benefit. And I don't know if this is already fully calculated and included. So -- but I would say, if you look at the standard, which is the 24% [indiscernible] and the state tax and 3.9% of local tax that there would be a reasonable indication. And so far it's been conservative looking at recent years.

And finally, the write-down that we had in 2021, this is something that we decided with the half year results. And as part of -- I mean, let's say, a consequence of the acquisition of Gruppo Lercari, we restructured our previous presence in Insurance BPO, which was a smaller company that had cost us around EUR 3 million or 3-point-something million. And we decided that we had to integrate it with the rest and it makes sense to keep it as a stand-alone cash generating unit. And we came to the conclusion that maybe in a conservative way, but it was simpler from an accounting point of view to do a write-down of the assets. So that's what happened, it's a company called [indiscernible] and the right write-down of that deposit we basically -- I'm doing it and putting it together in different ways with the rest of our Insurance BPO business and it could have been difficult to do an impairment for the type of object.

[Alessandro Fracassi, executive]

Yes. It's a restructuring I mentioned discussing the results of the Insurance BPO.

[Operator]

The next question is from Filippo Prini with Kepler.

[Filippo Prini, analyst]

I got two questions. The first one is consumer loans. You all make reference that consumer loans is not as a market for getting competitors, not so much competition among banks like the case for mortgages. The fact that you almost doubled your revenues in 2021 versus 2020 is also linked to the fact that you have noticed some more competition offering from banks and financial operator also in this segment.

Second is on PPA. Could you simply remember me the value of amortization of PPA that you booked in 2021? Remember that in 2020, maybe the value was around EUR 5 million.

And finally, on the MoneySuperMarket. From now on, in your profit and loss, you will have only the proposal of the dividend that the MoneySuperMarket will pay, if any. And while the change of the value of the -- from the market price will go only through your capital? And still a final municipal market, would you plan to have seat in the board?

[Marco Pescarmona, executive]

Okay. Well, regarding consumer loans, we did a lot of things, let's say, we moved along the 3 axis. First one was we spent more money in marketing, which negatively impacted the margins. Second, we broadened the product offering, still especially for personal loans. There is a scarcity of supply, but we were able to get some more lenders on board, like we started working for a credit, which is a big change. It's the first time we were able to work with a traditional lender on this type of business, but also we started signing up secured lenders, basically lenders that do [indiscernible].

So the second axis was the supply. And the third was we worked a lot on the user experience so that -- both in terms of website and what's behind. So really, we did an overall of the entire business. Many things impacting. And again, with a significant increase in marketing spend initially, at least for sure, with a negative impact on the EBITDA contribution.

And second question regarding the PPA amortization, I don't know the answer. It would be, I think, written in the full annual report, which will be published by the end of the month. Maybe Francesco has [indiscernible].

[Francesco Masciandaro, executive]

Well, it's a bit flat, EUR 12 million. EUR 12 million. The amortization of PPA of the intangible PPA.

[Marco Pescarmona, executive]

Because you have the contribution of Gruppo Lercari.

[Francesco Masciandaro, executive]

[indiscernible]

[Marco Pescarmona, executive]

But it's -- yes, it's better to wait for the official figure in -- when we published the annual report.

Regarding MoneySupermarket, and this, again will be explained in the annual report, the way we will account for the participation is the investment is with a fair value through other comprehensive income. So if the stock price goes up or goes down, this will not go through the standard P&L. Of course, we go into our retained earnings, our equity, and you see it in other comprehensive income. If there are dividends, I think those will be -- and again, Francesco, correct me, will go to P&L on the other end?

[Francesco Masciandaro, executive]

No. And also [indiscernible] P&L, no. No.

[Marco Pescarmona, executive]

Okay. So nothing will go through P&L, nothing in the dividends. Okay. So it would all be -- sorry, it's a fair -- there are 2 options, fair value through profit and loss and fair value through other comprehensive income, we use fair value through other comprehensive income.

And regarding the seat on the board, I mean this is not part of our plans as of today. We don't thought about that it seems.

[Operator]

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

[Aleksandra Arsova, analyst]

Yes, a very short follow-up on margins. In 2021, broking margins were impacted by higher marketing costs for e-commerce and loans and other divisions. Did you expect a similar level of marketing costs also in 2022? Or maybe it caused you to stabilize? Or do you expect it still to grow also in 2022?

[Marco Pescarmona, executive]

No. Well, I think -- okay. I think both in e-commerce, price comparison and in consumer loans, we will probably have a lower percentage incidence of marketing costs or at least, we will not -- we don't expect them to increase in percentage terms. So this is not a trend towards decreasing margins compared to today in those 2 businesses, which are the ones that have been affected. Could be that we decide to be more aggressive and push for more revenues or we decide to put for a bit more margin, and we still have to decide exactly. But I don't see the situation apart from what we have in mind now of declining percentage margins for those two businesses.

The other business is insurance, there should have increasing percentage margins. Mortgages could be stable or slightly down, depending on if there is a decline in the market. But there shouldn't be any particular margin pressure overall. Of course, we have different businesses with different mixes, with different percentage margins. So if we shrink in mortgages where the percentage margin is high and we grow in another business where it's like personal loans, where it is low, obviously, that will affect the average, but a single business level, we don't expect particular fluctuations. And particularly, we don't expect unfavorable fluctuations in the 2 businesses where we had a deterioration in the margin in 2021.

[Operator]

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

[Marco Pescarmona, executive]

Okay. Then we can close the call. We thank everybody for participating, and we'll talk to you with the one-on-one or at the next call. Thank you.

[Alessandro Fracassi, executive]

Thank you. Thanks, everyone.

[Francesco Masciandaro, executive]

Thank you.

[Operator]

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