JDC Group AG

XETRA:JDC

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Franziska von Lewinski, executive]

Welcome to CEO, Dr. Sebastian Grabmaier; and CFO, Ralph Konrad, who will start with the presentation shortly. After the presentation, we will move forward with the Q&A session.

And with this, let's start, Dr. Sebastian Grabmaier, the stage is yours.

[Sebastian Grabmaier, executive]

Yes. Thank you very much, Franziska, for this charming introduction. Yes, we are very happy to present you very pleasant numbers for the first half year 2024 of JDC Group AG. And the top line is growth exceeds 25%. You will see that this happened also both for the second quarter in '24, also the first half year.

Let me introduce myself real quick, together with my partner Ralph, I'm Sebastian founded the company together with my partner, Ralph 22 years ago, and I'm the CEO responsible for Strategy, Human Resources, Products and Investor/Public Relations. Ralph?

[Ralph Konrad, executive]

Hi. My name is Ralph. I founded the company together with Sebastian. At first, I have to start with some apologies, because I'm still on vacation and around me, there's a big thunderstorm. So the connection is very weak, very weak and I hope that it works. So, Sebastian?

[Sebastian Grabmaier, executive]

Yes. So for the view among you that do not know us, so our business model is a classic platform model. So we standardize and introduce the data of more than 220 insurance groups, all the asset management platforms, alternative product providers, the mortgaging banks. We standardize the data, process it and we make it visible on our own visualizing systems or via an API structure on the visualizing systems, front-end systems of our clients.

And our clients are all kinds of intermediaries, individual brokers, agents, permit sales force, other fintech, intertech companies, but more and more also the banks, banking groups, such as savings banks and cooperative banks, and also now more and more the insurance companies themselves and via our smartphone application also about 200,000 direct clients. So currently, we have about almost 2.5 million clients on the platform with about 5.2 million contract data points. And yes, our stronghold is a strong back office that's transacting business and processing business is very efficient, using digitization and now also AI. So our IT stack is now the big value driver.

And you can see that the numbers for the first half year are really pleasant. Turnover is -- has increased and is now up more than 25%. So it grew from EUR 84.6 million to EUR 106.1 million for the first 6 months, for the first time in history, we made 2 consecutive quarters with more than EUR 50 million, resulting in more than EUR 100 million in half year. So that's quite historic for us. And yes, we have tailwind of all kinds of business lines. We have a very strong insurance business. We will show you that not only we aggregate a growing number of contracts on the platform, but also our new business, especially in life and health insurance is very pleasant.

The insurance business is up more than 20%. And also our investment business is very strong. The quarters of the growth coming from Top Ten that we consolidated first time in December last year. And now with together with Top Ten's investment business and a tailwind from the capital markets, investment is up more than 50%. But also we can see that real estate is back on track, starting April this year, we can see that there is capital investors, again, in the real estate market, and therefore, also mortgage business, which definitely helps, especially our advisory section as well.

So you can see also EBITDA, it's up 36% from EUR 3.2 million to EUR 6.9 million. So you can see that now the platform is starting to scale. And yes, we can show you later that we are very well on track for the guidance of this year and also what we said would be our vision for '25. I think we are in a very, very good way. And you can see in the development over the last years. There was some impact of this energy crisis, interest rate crisis that we had in Germany. Last year, basically, it began to -- end of '22 and was still there in the beginning of '23, but now very strong recovery of the JDC Group now in this year 2024, with a very good outlook also for the quarters to come.

Yes. You can see that our revenues are up 25.4% for the half year. After a very strong quarter in here last quarter was up from EUR 40.8 million to EUR 52.8 million, so almost 30% up, 29.4%, and this was a true both for Advisortech and Advisory -- Advisortech being up 30.9%. So first time more than 30%. Advisory also up 27.4%. So a strong rebound also on the Advisory section. So -- and you can see then down the line. Gross profit, it's a very important number always to look at. It's up almost 25%, for first half year this is 22.3%.

And then EBITDA, you see very nice development in the second quarter, which is normally together with the third quarter, the 2 weaker quarters in the year, it's up to EUR 2.8 million, so that's up 48.7% of last year's. And therefore, we have an EBITDA growth from EUR 5.1 million to EUR 6.9 million, so that's 35.6% up. So overall, you can see that the bottom line numbers then, they look very nice that EBIT is up 64.4% and then overall earnings is up 100%. So that's really nice figures for the entire group. And you see on the right side, turnover up 25%, EBITDA up 35.6% also shows that the platform is scaling nicely as we wanted to show you the years before.

Yes, next page, you can see that basically all kinds of product groups are contributing to this development. You can see that especially investment and financing is a big surplus, it's 55% up. But as we said, we consolidated Top Ten, the first time in December '23, and also have a good market development. So the first question would be how much is the part of Top Ten within this EUR 14.1 million. It's almost EUR 10 million, so about 11% of our growth comes from Top Ten and the rest is organic growth. So in Advisortech that's almost 18% from organic growth and all the entire groups about 15% from organic growth.

Yes. And as you can see the growth as to different intermediary groups. You know that the broad business is based on our IFA business, so that 16,000 individual agents and brokers. And this is like a very strong development with EUR 12.6 million plus, so it's 22.3% up. And then major customers are up even more that's 43% in the major customer sections or EUR 7.3 million coming from this big project, and also Advisory is up EUR 2.7 million contribution to growth, so 16.9%.

So which is also quite positive is we have some direct business left, it's around EUR 2.7 million normally. And this is now stable. Normally, you would see a small minus here because there is churn as we're not marketing in our direct client base. So now the churn has stopped. This is also due to some inflation. As you know, we have inflation protected model where the premium is going up with inflation or a little bit more. And our commissions in this segment is also up. So now inflation is higher than turn, which is a very good number also.

Yes. So very happy with these results. And now you can see that the major customers are growing faster than the rest. So more than 1/4 of our turnover is now already directly responsible by these major customers.

[Ralph Konrad, executive]

Okay. I hope the connection will be stable, if not, Sebastian, please give me a hint. So let's go one step deeper. If we look at the development by quarter, that's what we show you since some quarters and then focus on the second quarter. We can see that after a weaker year 2023 with a weaker quarter 2, we now see a very strong second quarter in 2024 with a year-over-year growth of almost 30%. And for the first time, I don't know, it's in history of the company, but for the first time that I remember the second quarter is approximately as strong turnover approximately as high as in the first quarter. This is extraordinary strong.

And as Sebastian mentioned, driven by all our sectors and driven by Advisortech and the Advisory business. For the rest of 2024, we expect a weaker third quarter due to summer season. Of course, normally, if there's not a thunderstorm around, the people want to enjoy the sun and not talk about financial products. And after that, as always, this will be followed by a fourth quarter, which will close the year with a typical year end business. So we are on a very good track to achieve our goals for this year.

The Advisortech segment showed a very good performance in the second quarter. Revenue was up more than 30% to EUR 46 million, and EBITDA increased by almost 35% to EUR 2.9 million. Personnel and operating costs were up by 20% to 25%. But only a small portion of this was organic due to inflation and new costs. The main part was driven by the consolidation of the Top Ten Group. To remind you, as Sebastian said, date of first consolidation was December 2023.

In total, the Advisortech segment achieved a revenue of EUR 95 million and an EBITDA of EUR 7.1 million in the first half year. So EBITDA margin is increasing and is now amounting 7.5% in relation to turnover. But if you would look at the Advisortech segment, like you would look at a tech company, that's what it is our Advisortech segment, and you would eliminate all the, let's say, trade volume, commission in, commission out and would only look at the gross margin, then you would already see an EBITDA margin of 29%, that's EUR 7.1 million in EBITDA in relation to the EUR 24.2 million gross profit. So very good development here as well.

I'm very happy about the development of the Advisory division. It has -- the Advisory segment has regained its former strength and really showed a great quarter with a growth of 27.4% in sales, EUR 10 million of revenue were achieved in just 1 quarter, we never had that before. And with only a slight increase in costs, then EBITDA was achieved of around EUR 1 million, which is a growth of more than 50%. So very good performance in this quarter. And when we look at the year as a whole, then the Advisory segment, again, is performing strongly. Sales grew by 16.9%, and EBITDA grew by 31.8%.

And you might remember, therefore, I will never tire of emphasizing that the Advisory division, the Advisory segment is a very important part of our group. On the one hand, because it's contributing in sales and EBITDA. And on the other hand, because we have more than 300 or 350 tight agents that are very close to us and give us a lot of feedback and tips and help us to improve our platform on a daily basis.

Okay. Let's go look at the cash flow statement for the first half of the year. We have started the year 2024 with cash and cash equivalents of EUR 26.4 million. This was a plus of EUR 10 million compared to the start in 2023. And cash flow from operating activities in the first half year amounted to EUR 7.4 million. A very good number means the plus of more than 80% compared to the first half year 2023.

The cash flow from investment activities amounted to minus EUR 5 million, which is EUR 2.7 million more or less because of the minus than in 2023. So we invested more than in 2023, and the main influence was our Summitas participation, because the capital calls of our Summitas team were significantly higher than in the previous year.

The cash flow from financing activities is minus EUR 2 million, and the main reason or more or less only reason for this was our share buyback program, which ended 15th of May, when I remember correctly. And so the third quarter -- the second quarter, sorry, ended with a cash balance of more than EUR 26 million, which is EUR 8.5 million more than compared to the previous year. Cash on hand last Friday, so 12th of August was EUR 34.2 million. So, although, we are investing a lot, we see a strong cash position at JDC that gives us good scope for the future.

Okay, some operational key figures. You know this from the last calls, they are also developing very positively, new orders peaked around 72,000, and at the end of the second quarter, which is an increase of 13.4% compared to the previous year. And here, as Sebastian mentioned, we had an especially strong insurance business. And just one further comment, the new orders and transactions of Top Ten are not included here in these numbers, because they are not migrated on our systems yet. So this is a recomparison year to previous year without any external M&A effects.

The number of initiated contract transfers reached a level of more than 260,000 in the first half year, which is an increase of 45%. And although nobody in the market does more portfolio transfers than we do, at least that's what we think and believe, because we see nobody who's doing more. We are still seeing a very strong growth here. And many of our major corporations are only just beginning. So this is a development, I think we will see in the next quarters as well.

And finally, insurance assets are constantly growing now at a new record high of more than EUR 1.2 billion heading for EUR 1.3 billion. So the engine is well oiled and continues to run reliably. And again, we think that we will continue to see this development in the coming quarters as well.

As always, a few more information about share price and the bond share price is development positively was EUR 21.8 yesterday at the close. We are very pleased that the market has responded positively to today's publication and that the share price has moved positively today. I don't know where we are now. When I looked last time, we had EUR 23.5, which is a good development for today. Market cap is now above EUR 300 million. And yes, we are happy about this development. The share buyback program, as mentioned was finished in the middle of this quarter. We bought back 147,000 shares and paid an average price of EUR 19.89. The bond is still at EUR 20 million, of course, is trading stably at a level of 103%. And yes, no news on that right now.

The shareholder structure is also stable and has remained unchanged since Provinzial joined the company. And besides the strategic shareholders, Great West, VKB and Provinzial, we have as one of our investors has a lot of happy holders, and that's the feedback that we get from our IT talks, from our Investor Relations talks, but also the cooperation with our strategic shareholders, VKB, Provinzial and Great West is excellent, both operationally in the joint projects that we have and also in the -- of the Supervisory Board.

And I think it's noteworthy that unlike at other companies at JDC, the discussions in the Supervisory Board are not overlaid by strategic interest of single shareholders, but are always about the further development of the platform, of the open platform and are further very constructive to develop the company. So many thanks at this point to our shareholders and the members of our Supervisory Board.

Let's come to the spotlights. There are special today, because we only have one spotlight, but an important one. You might remember that in the last earnings call, we showed you these figures for the first quarter and explain to you that JDC is in the phase of development, where operational excellence is a key for success. We are on a very good path there, but there's still a lot of room for improvement. You can see here that the number of customer data sets on the platform increased by 300,000 or 12%. The number of contract data sets increased by 800,000 or 17%, and the number of processed documents on the platform increased by 600,000 or 29%.

And nevertheless, the number of employees, full-time equivalent only grew by 6%. And you have to consider that within this 6% that includes the Top Ten team, which was not there 2023. So if you deduct this, it's rather 2% FTE plus, so, so far, so good, but further automation and digitization is now at a level that requires full management attentions. And you know that this is my team and my division. And so together with the Supervisory Board, we have decided to hire both operations department from my departments and add another member to the Management Board, Ramona Evens, Sebastian will introduce here in a second.

Just one last comment from my side. I am very pleased about this development, as operations has taken up more and more space in my day-to-day business and has increasingly competed with IT and M&A departments for my attention. So -- and that's not good for the company because we have to focus on IT, and we have -- also have to focus on reasonable M&A transactions like the Top Ten transaction, and that will be my focus in the future. Sebastian?

[Sebastian Grabmaier, executive]

Yes. Ralph, as I said it before, when we talk to you investors, many ask us, okay, you're doing M&A yourself, you're developing Summitas with their buying strategy in the commercial brokers market. You're growing with major customers, more and more big projects. So how do you do all of this? We hired Marcus Rex, a little bit more than a year ago with a very good impact, both on the sales department internally, but also has a very good reception with our bigger major clients.

So now we're very happy to announce that another specialist is joining the Holding Board and Ramona, so Dr. Ramona Evens. She's a specialist, learned strategy consultancy with the Boston Consulting Group very successfully, then joined ARAG mid-sized insurer here in Munich, and also did a Doctorate in Finance and Banking, and moreover now with us, she's doing quite the same thing that she did at the very big comparison portal CHECK24, one of the market-leading companies in the B2C section, and she was there heading the P&C, the section of Check24. And then for 2 years developed on start-ups.

So there is some entrepreneur spirit with her. And yes, she has this particular focus on digital processes. And therefore, we think Ramona is the right women, a member of our Board, we had to complement the Board and help Ralph and myself to not only work in the company, but work on the company and focus on the real important projects and important clients, and then have more capacity to execute on all these many, many tasks we have in the daily business.

Happy to take your question, and we assure that we introduce herself in-person at the next call, the latest. So I think hopefully, you will like her as much as we do.

[Ralph Konrad, executive]

She will start in the 1st of September, so very soon.

[Sebastian Grabmaier, executive]

Yes, guidance. I said some words on that in the introduction. You can see that we guided for a turnover of EUR 205 million to EUR 220 million for the year 2024. You can also see with EUR 106 million, knowing that the growth is becoming stronger. And also the second half year is always significantly stronger than the first half year, and the best quarter is the Q4 that not only brings turnover, but also most of the EBITDA. So we are on track both on turnover and EBITDA already with EBITDA with our guidance from EUR 14.5 million to EUR 16 million, we already have almost EUR 7 million in the pocket also there.

I mean, we're well on track to end up in the higher half of our guidance. Very happy on this -- with this development. And also our goals for 2024, integration of Top Ten Group, relevant turnover, gross margin, Summitas, refocus on smaller IFAs, expansion of IT corporation with the insurance companies, meaningful further development of IT platform, I think Ralph will show more slides next time on AI. And then also further reduction of cost per contract. We are all on track on all of these targets.

So very happy and satisfied that there's really a very strong and good path for JDC in the first half of the year. And as Ralph said, we have a very strong outlook also for the second half of the year. So thank you very much for your attention. And now I give back to Franziska, and she will take all questions you might have.

[Franziska von Lewinski, executive]

Yes. Thank you so much for the insightful presentation. We're now moving forward to the Q&A session. [Operator Instructions] And we received some questions in our chat, first from Roland Muller. He would like to know on the August 5th, you announced a new contract, what revenue and profit do you expect from the new contract?

[Ralph Konrad, executive]

Sebastian, you want to answer or shall I? You're muted.

[Sebastian Grabmaier, executive]

Yes. So it's a very big contract, but it's a contract that's only giving big effects in the future. So we have not planned any revenue in 2024. We know that there's the first contracts that are now aggregated on the platform. But again, normally only after 6 months, we get, on average, the corresponding commission under these contracts. So this will rollout now, but then start to bring revenue next year and then also bring some service fees and platform fees starting in 2025. So it's a very big name and an insurer with more than 7,000 agencies. So a lot to be expected. But again, as all these very big contracts with insurance companies will take time, a little ramp up phase of at least 12 to 18 months until we really see this in our books as a relevant factor.

[Ralph Konrad, executive]

Yes. But we negotiated minimum gross margin for us. So we will on the [ first EUR 0.5 million ] in the next year. So -- and then more and more and more hopefully for very long time.

[Sebastian Grabmaier, executive]

So the line was a little bit bad, but Ralph said about EUR 0.5 million.

[Ralph Konrad, executive]

Next question, Sebastian, is how is the [ program? ]

[Sebastian Grabmaier, executive]

Yes. Your connections are really bad, Ralph. So what Ralph said is EUR 0.5 million for the year '25 and then more to come for the years later. So progress with [ R&V ] and VKB, we can see that on the savings bank sector last time, we gave you a very good outlook for the savings banks of the Provinzial region, so there's North Rhinewood failure with picking up speed. VKB and SV Sparkassenversicherung in Baden, Wittenberg, and VKB in Bavaria, they are at a rather slow start that's progressing positively, but some time to go until this rollout we had beginning of this year really turned into relevant revenue. Same goes for R&V. They now will quadruple the number of banks from 4 to 20, but knowing that there is more than 800 banks that we want to target. There's a long way to go until revenue is in full force and the business plan really folds up.

[Franziska von Lewinski, executive]

Thank you so much. There's another question also from Roland Muller and [Indiscernible]. Are you bidding for contracts of significant size? And in what time frame can we expect new contracts?

[Sebastian Grabmaier, executive]

Yes. We somewhat had one tender, we could not take part properly. So it depends how you count it. So there will be one insurance group that will go somewhere else, so which is new. But we are quite happy after having lost -- won this very big contract, and we are -- we also won the sales contract of HanseMerkur one of the top 20 insurers with their company verticals, which is the leading health insurance or one of the leading health insurance sales force in Germany. So we won these big 2. And then obviously, that's not a big secret that all the other public insurers next to VKB, Provinzial, SV, so that's VGH, Public Brunswick and Public Saxonia, which use the same technology as the big public insurers. They -- basically there are talks. That's not a secret. So yes, you can expect new contracts in this section this year.

[Franziska von Lewinski, executive]

Thank you so much for the answer. And also thank you to Roland Muller for all the questions. We have another question from Paul Whitburn. He would like to know would the business require a step change in its tech stack and CapEx with the larger contracts now gaining momentum?

[Ralph Konrad, executive]

Good question, Paul. The answer is no. Because it's just the same. The bigger customers, they work with us through an API connections on their own systems. It's just a question of scalability of the platform and there we did a lot of work for document management system and our virtual private cloud, where we had some performance issues at the end of last year, but now we are working permanently on this issue, and there will be no extraordinary CapEx, no one-offs, but you can expect that the IT platform will not become cheaper in the future. That's my answer here.

[Franziska von Lewinski, executive]

There's a follow-up question on what basis did you lose the tender to a competitor? And who was the competitor? If you could elaborate on this?

[Sebastian Grabmaier, executive]

Maybe rather put this diplomatic, there was not real a tender. It was just a pitch, let's say. And this was -- due to personal relationships, this was going to someone else.

[Franziska von Lewinski, executive]

Yes. We haven't received any further questions. So this is also a reminder for you. Wonderful. We received another question, and thank you so much, Edwin de Jong. [Operator Instructions] And Edwin de Jong, you should be able to speak now.

[Edwin de Jong, analyst]

Great. And a few maybe for Ralph. Also, you see that commission expenses are going up quite a bit compared to the first half of 2023. That was, of course, to be expected because of the larger contracts, but could you give some more puts and takes on where this commission expense is going through in your opinion in the next few years?

And second, on the staff cost. You see that they increased like 18%, and the number of staff was like 5% higher. So maybe some color there. And then finally, I really liked the color that you gave on the number of growth -- the growth number of transfers on the platform and the number of contracts there. And so you see the number of contracts growing, contract transfers growing by 46%. And the number of new contracts up 70%, and that translating in a revenue of, let's say, more or less 20%, I would say, if I adjust for Top Ten. How should we see that developing in the future? Those were my questions.

[Ralph Konrad, executive]

Okay, Edwin. Then I will start with the gross margin, you said payout is increasing and gross margin is going down. That's right. And that's the result of adding larger customers, of course, larger customers with a larger potential, you have to give a higher payout ratio. And when the portion of larger customer revenue increases, then the gross margin in percent goes down, but in euro goes up, that's the situation that we see. And there's also the situation that you could see in the past because year-over-year, the gross margin was going down a little bit, and we were able to generate more IT fees and so on, where we didn't have to give any payout or payback.

So the churn there was modestly, I would say, for the next years, it's fair to say that there will be a decline year-over-year of, I would say, like 0.3%, 0.35%, 0.4%, depending on how big the proportion of this major customers turnover is, because what we also see is that more and more of our normal IFAs of adding more contracts to the platform, adding more customers because it's much more convenient to work with JDC now than 1 or 2 or 3 years ago. We are publishing new features on a quarterly basis. And I would say, yes, you have to observe this, but there's no reason to have any sorrow. Did that answer your question?

[Edwin de Jong, analyst]

Yes, absolutely.

[Ralph Konrad, executive]

And the second question was to the personnel costs. The personnel costs were up more than 6.5%, and the number of FTEs was only up 6.5%, properly observed Edwin. And the reason is, of course, inflation. We were the last, let's say, in our industry, who increased salaries, but we had to increase salaries on a broader range. And with Top Ten, there are more, let's say, there are not many people, but on average, highly qualified and higher paid people. And these 2 effects, I would say, are the main drivers there. Sebastian, would you agree that?

[Sebastian Grabmaier, executive]

Yes. But you have to deduct the Top Ten, right, in the personnel cost also.

[Edwin de Jong, analyst]

No, that's very clear. That's very clear.

[Ralph Konrad, executive]

So, and to be honest, I lost your third question. It was about [Technical Difficulty]

[Sebastian Grabmaier, executive]

I got it. [Indiscernible] you calculate quite right. So the math is every -- like [ 70% ] of these additional contracts contribute about EUR 40 in the next 6 months to come on average. So that's exactly the math and then [ 17% ] more of one like upfront commission-based one-offs. So I think you should end up with a 20% growth. I think the math is quite right, Edwin.

To put it other way around, the additional contracts should at least contribute another EUR 15 million to EUR 20 million in additional recurring revenue just 12 months later, then it depends where you cut the year, then you're rather -- you're somewhere in between. And then the -- but also -- we also like new business, which is about 1/3 of our business. And on average, we should see that the growth, when the KPIs go the same direction, there should be a natural organic growth of 15% plus at least.

[Franziska von Lewinski, executive]

We received another question in the chat from [Indiscernible]. First, complements and great results. We really trust the leadership, and see himself as a happy business partner. The first question is, how should we look at the value of the Summitas participation? And second question is, is Bain planning to sell in 5 to 7 years as they often do?

[Sebastian Grabmaier, executive]

Yes. So thank you, Franziska. We don't forget your third question, Paul, because that's also Summitas question, so we put this together. And maybe Paul, your question was, why was there a greater drawdown investment into Summitas? Did they find more opportunities than envisaged due to the iconic draw slowdown in Germany? Are they paying higher multiples?

So also they had very nice development with Summitas. We already bought now the 13th broker. I think 12 was the figure for the half year. So we are on our track of buying 1 every month. There might be a bigger transaction out there as Summitas is very busy in pitching for all kinds of sizes. So there is still opportunity and the drawdowns now were EUR 4.8 million. So the EUR 48 million for the entire Summitas until the end of the first half year. So it's almost 1/3 of our initial commitment. So -- but now Summitas trying to adding debt. So there will be more investment volume to be invested.

So the opportunities are just a result of just market screening. They're using all sources to add more target brokers. We can talk more about economic slowdown in Germany. Actually, that goes for the GDP, obviously, and the big industry. So the -- our client group, that's the more affluent, let's say, the top 5th of the market is not really feeling it, because you have slowdown as big industries are going to more energy-efficient or cheaper energy countries, right? So like the chemical industry is moving out, and the textile industry, the last rest is moving out. But then there is a full employment in Germany, so we have quite some higher wages and increase in HR, not only cost but also spending and income of private clients. So it's a quite opaque picture in Germany now.

So -- but it is not the reason why there is other investment for Summitas. So we think that there is a market rather due to the demographic situation as most of these brokers are 60 years or older and half of them are even 70 years or older. So it's about 1,000 brokers to be sold in the next 2, 3 years. So enough space for Summitas to grow. Yes, then thank you for the flowers. And yes, so the value of the Summitas participation, let's put it this way, we think that the valuation is always the price we are buying. We're not paying very high multiples as others do in the market. So on average, I think we had about 11, 11.5-ish in the multiples that are underlying the buying price.

And the value is at least what we invested. But what has to come is that now the Summitas target brokers have to move to the platform. So we lift the synergies and of the platform and digitization. And then we will earn more money on the targets we have. And then obviously, there is a private equity game inside that higher -- that bigger companies are valued higher than smaller companies. So that multiple will go up with the size of the -- some of the target brokers.

So as to your question, whether Bain is planning to sell, you would have to ask them themselves. They tell us they do not have a plan to sell. But obviously, private equity is there for 5 years on average. And as you can see, the secondaries in the market, both with GDW and MRHT, that there is secondaries already after 3 to 5 years. So yes, I think it's a free and driving private equity situation and project. And obviously, we open for either Great West Canada Life buying more shares or others buying more shares, and then enhancing the value even more.

[Ralph Konrad, executive]

Maybe we can add that on average, we or Summitas paid like [ 11.5% ] like Sebastian said, and the bigger transaction that we have seen in the market were at a multiple of rather 20 than 10. So there is a hidden value in our participation. We don't know how much, but there are -- yes, there are some values that we will lift in the future.

[Franziska von Lewinski, executive]

We received another question at the chat box from Mr. Ehlabouth. He said, we understood that you cannot disclose the name after new contract, but could you give us more color, please, what the sizes of the contract once it's running to its full potential commission income, number of clients, potential EBITDA uplift?

[Sebastian Grabmaier, executive]

So the way we normally do it, we wait until we have a concrete business plan in front of our nose, and this is what we then also communicate to you. And as long as we just can guess on the size, we'd rather keep our mouths shut and do not disclose too much. So we can tell you that this is a very, very big insurer with more than 7,000 agencies. So there is millions of clients and a lot of commission. But Ralph, I think it's -- I think we will just disclose more whenever we can say more.

[Ralph Konrad, executive]

Yes. What we can disclose is, what I already said. We negotiated a minimum contribution for JDC, this is EUR 0.5 million. So we will definitely earn money from the first day of cooperation on. And the cooperation is definitely good for lots of millions a year if it works, and we are working on that. It will be probably be one of our biggest customers.

[Franziska von Lewinski, executive]

And another question, could you give us a short update on the Summitas and the pipeline of transactions?

[Sebastian Grabmaier, executive]

Yes. There's a full pipeline. So the M&A department is in full force, and the management is working with big engagement and big heart to close as many as they can. So there is a full pipeline, but we do have a hope that also there might be a bigger target that really gives us a jump start into the business. It's fine to add many, many of these small fish, but if we could have a mid-size or bigger target company, I think that would help the growth of Summitas tremendously. But as always, in private equity deals are signed when they're signed, not when managers or officers want them to be signed. So -- but it's a very good development within Summitas.

[Franziska von Lewinski, executive]

Yes. And we have another question from Stefan Winterling also in the chat. Do you plan international expansion in the foreseeable future? If so, where?

[Sebastian Grabmaier, executive]

Yes. So also there, Mr. Winterling, great questions. We are opportunity driven, right? So we know that our platform works in different languages. We know that some of our brokers have it translated in Czech, Slovakian or English. And it does, so the tech works in any country, but then it's very important to have a team on the ground who does the work. So we are looking for smaller platforms or bigger brokers with a young team that has already the interfaces to these national insurers, because then we can just put our platform technology on top and then we have a growth. What we do not want to do is what some start-ups did, they defocused by starting in 5, 10, 30 markets at the same time and nowhere really had an impact. So it just makes sense if you have a considerable size in these markets.

We already looked at target companies in Italy and in the Netherlands, and a small one in France, but the competition is international private equity and these traded then at much higher figures than we wanted. So yes, we are looking into expansion, but only if the target is right.

[Franziska von Lewinski, executive]

No further questions have come in. So we're going to wait a couple of seconds. [Operator Instructions] And then some more flowers from Paul Whitburn. Thank you so much, great results. I think I'm happy to share this here.

So I think there's no further questions. So we're going to come to an end of today's earnings call. On my behalf, thank you so much for your attention. If further questions should arise, you can, of course, ask the leadership team of the JDC Group AG, or us. I wish you a beautiful day, and I'm going to give the last final remarks to Dr. Sebastian Grabmaier. Thank you so much.

[Sebastian Grabmaier, executive]

Yes. So thank you. Thank you again for your trust in all the years past, all right? When we told you 4 years ago that 2025, we'll have more than EUR 250 million turnover. You trusted us and bought shares most of you. So thank you, there for that, because now we can show you that we can pay back. And we have the growth that we envisaged last years and can really show you that we do whatever we told you. Now I think we are at a good organic growth rate 15% plus up to 20% and then added M&A, both with Summitas and then own transactions, so that we now want to grow 20% plus for at least the next quarter as we can see. And maybe the next year, we can see, but also now have the strong vision for JDC to be one of the aggregators, one of the consolidators and one of the market leaders.

So thank you very much for your attention today, for your time, and your stockholding. Thank you.

[Ralph Konrad, executive]

Bye-bye.