HOMETOGO SE EO 1 (HTG) Q2 2026 Earnings Call Transcript

Good morning, ladies and gentlemen, and a warm welcome to Home2Go's Earnings Call, following the publication of the H1 figures of 2026. I'm delighted to welcome co-founder Mr. Andrei and CFO Sebastian Bielski, who will speak in a moment. After the presentation, we will move on to a Q&A session in which you will be able to ask your questions directly to the management. Let's dive straight in. Sebastian, this stage is yours.

Actually, I will hand over back to Patrick because Patrick will start today.

Good morning, everyone, and thank you for joining Home2Go's half year one 2026 earnings call. As you have seen in our report published this morning, we delivered a strong first half of 2026, characterized by the disciplined and successful execution of our strategic roadmap following a transformative 2025 our half year one results clearly demonstrate that our strategic evolution and squares transformation are in full swing and delivering tangible results across the group but let's now look at how we structure today's call we want to give you a clear and a comprehensive picture of our performance and momentum. We will begin with a brief summary of our half year one highlights, followed by a detailed update on the progress we've made against our strategic goals for 2026. And then we will walk you through our financial results for the first half of this year in depth before reviewing our financial guidance for the full year of 2026. To wrap up, we will summarize our key takeaways before opening the floor for your questions so let's dive in to kick things off let's look at the overarching highlights that defined our performance in the first half of 2026 on a statutory basis first and foremost we achieved a significant improvement in overall group year-over-year profitability our adjusted ebitda grew substantially by 26.6 percent year-over-year in half year one and has even accelerated in quarter two with a year-over-year increase of 58.6 percent this development reflects our continuous advancement in expanding the group's profitability plus we massively improved our free cash flow by an exceptional 53.2 million euros year over year reaching 48.2 million euros in free cash flow in the first half of 2026 alone second a key element behind this is home to go pro our b2b segment more than tripled its IFRS revenues to 105.2 million euros representing an impressive growth of 250.5 percent year over year primarily driven by the consolidation of interhome third our discipline strategy in the marketplace segment continues to boost profitability marketplace adjusted EBITDA improved by 16 percent year over year while still delivering a new booking revenues backlog record for the end of half year one validating our strategic shift toward high margin conversion and marketing efficiency fourth on the strategic front the launch of home to go originals strengthens our position as europe's leading vacation rental group this new umbrella brand for our group's property management companies highlights homes who go as one of the europe's largest direct suppliers of vacation rentals backed by a strong and growing portfolio fifth our ai leadership is driving measurable operational and marketing efficiency gains deep group-wide ai adoption is delivering tangible ri and significantly faster time to market for new product innovations and finally backed by this solid first half performance we reaffirm our financial guidance for the full year 2026. with that high level summary in mind let's move to the next section of our call and take a closer look at the concrete progress we've made against our strategic goals for 2026. we introduced our 2026 strategic roadmap earlier this year to provide a clear and transparent framework to track and discuss our progress throughout the year now i'm pleased to share that we are executing successfully across all five pillars but let me walk you through the overview of our year-to-date progress first on finalizing the inter-home integration our tsa exit and cost synergy roadmap remains fully on track to achieve our initial 10 million euros in annualized cost savings until the end of 2026 we are currently executing several large restructuring projects to capture the remaining cost synergies second in home to go pro we continue to build out our strategic m&a engine the bold on acquisitions closed in the first quarter of 2026 have now been successfully integrated we are actively scaling our capabilities expanding our dedicated m&a and post-merger integration resources as we source additional asset deals for the second half of the year third regarding group-wide brand harmonization we officially launched home to go originals our new umbrella brand uniting our core property management businesses this unified market presence builds deeper ecosystem system trust enables seamless cross-company switching and serves as a powerful catalyst to reduce customer acquisition costs fourth on driving operational excellence in the marketplace our strategic decision to prioritize profit profitability over top line growth is paying off despite cutting advertising spent by 16 year over year we achieved a record end of quarter two booking revenues backlog of seven 71.9 million euros which is up 1% year-over-year, while still delivering a strong 16% increase in marketplace-adjusted EBITDA for the first half of the year compared to half-year 25. And finally, on maintaining our AI leadership, AI adoption across the group is driving tangible and measurable efficiency gains. In marketing, latest AI-generated ad tests achieve an impressive 44% lift in ROAS alongside 60% lower video ad production costs. At the same time, we significantly accelerated operations and are well on track to drastically reduce time to market for product development. So, overall, our disciplined execution across all five strategic priorities continues to strengthen our foundation and drive sustainable profitability across the entire group. Let's now dive deeper into our first strategic pillar. The integration of Interhome and the substantial value creation it unlocks across the group. As a reminder, when we close the transaction, we set an initial target of 10 million euros in annual cost synergies to be realized within 12 to 18 months. I am pleased to report that our execution remains ahead of schedule. Here to date, we have already captured approximately 6 million euros of these cost synergies on an annualized basis. the strong momentum is backed by an accelerated tsa exits and we have successfully exited eight transitional service agreements to date with two tsas in the second quarter and at least three additional exits on track for quarter three crucially we remain fully on schedule to exit all remaining tsas including our largest and most critical milestone the migration of the interhomes sap to capture the remaining cost synergies until year of end we are now executing several large restructuring projects that were prepared during quarter two beyond these initial cost savings we continue to drive our midterm value creation roadmap which adds an additional 20 million euros in upside and brings our total midterm synergy and value creation potential to approximately 30 million euros also there we made excellent headway on two key drivers first tech-driven efficiency in sales growth we successfully deployed home to go's core crm platform across interhomes shared service center optimizing operational efficiency while significantly enhancing sales capabilities to unlock commercial upside and second distribution margin internalization we expanded our own direct booking channel share by more than five percent allowing us to retain a higher share of the distribution margin directly within the group so all in all this This progress clearly demonstrates that Interhome is not only delivering on its cost reduction commitments ahead of plan, but is rapidly turning into a major high margin profit driver for Home2Go. Now moving up to our second strategic pillar, expanding our M&A engine within Home2Go Pro to lead the consolidation of a highly fragmented European market. To put the scale of this opportunity again into perspective, if you look at the left side of the chart you see that europe's core vacation rental destinations comprise roughly 17 million properties in total when we narrow this down to rural and marketed vacation homes we arrive at a service addressable market of roughly 2.5 million homes our primary focus within home to go pro lies in this targeted market especially for externally managed homes representing around 900,000 properties operated by more than 100,000 local vocational rental management companies across Europe. As you can imagine, this landscape is characterized by extreme fragmentation. Most of these hyper-local agencies manage fewer than 100 properties, suffer from low-tech adoption, and face clear operational inefficiencies. On top, the top three players, including us with Home2Go Originals, combined hold only about 10% of the total market share, presenting us with a tremendous long-tail roll-up opportunity. Following the proven success of our interim acquisition, we are actively scaling our vacation rental property management business with our buy-and-build strategy. I'm pleased to share that the first three gold-on acquisitions we closed in quarter one, adding roughly 200 new units across Switzerland, Italy, and Spain to our property management portfolio, have already been successfully integrated and are fully bookable via the into home and home to go platform to build on this trend section we are expanding our dedicated internal m&a team and ramping up our post merger integration resources this infrastructure allows us to even more systematically process deal flow and swiftly onboard new inventory looking ahead to the second half of 2026 we are actively sourcing and expect to close additional value accretive asset deals to continuously broaden our property management footprint now on to our third strategic pillar that we already touched on before harmonizing our group-wide brands through the launch of home to go originals as we continue to expand our property management footprint establishing a unified and recognizable identity is essential home to go originals now serves as our new umbrella brand for our property management companies interhome and causa through this what we call wrong brand initiative we are connecting key physical and digital customer touch points across the entire travel journey whether a guest that covers a home on our digital marketplace or visits one of our local service offices in destination as illustrated in the storefront mock-up on the right on this slide home to go originals clearly signals vacation rentals that are mostly managed directly within our group with our trusted end-to-end service from a strategic perspective this cohesive presence significantly strengthens brand recognition and builds deeper trust across our entire ecosystem by seamlessly bridging the gap from initial online search and booking to professional property management and all the way to actually the physical state importantly this unified identity also unlocks substantial b2b synergies for home to go pro by aligning our market presence under one strong roof we make it easier for homeowners and property managers to transition across our portfolio this cohesive structure acts as a powerful catalyst to strengthen our overall pro offering and will ultimately drive down customer acquisition costs across the group and or increase lifetime value however you want to see it now let's dive into our fourth strategic pillar the home to go b2c marketplace here our objective remains crystal clear we strictly prioritize growing profits over pursuing top line volume and looking at the left side of the slide you can see the deliberate strategy is directly reflected in our half-year-one numbers. While the marketplace IFRS revenues intentionally dipped by 10.2% to 58.8 million euros, driven by our conscious reduction in ad spend, our booking revenues backlog actually increased 1% year-over-year. At the same time, segment profitability improved substantially, with adjusted EBITDA increasing by 16% year-over-year to a negative 16.8 million euros up from negative 20 million euros in h125 this earnings progress is powered by a structural transformation in our marketing efficiency shown on the right over the past year we have fundamentally optimized our cost structure group marketing and sales expenses as a percentage of ifrs revenues decreased to a new record low of just 54 percent in half year 126 representing a massive 31 percentage point reduction compared to the 85 percent in half year one of last year that you can see on the slide by maintaining strict discipline in our b2c marketing spend we continue to proactively reallocate capital into home to go pro where we see superior growth potential and higher risk adjusted returns so for the remainder of this year we will stick firmly to this playbook lowering marketing investments maximize maximizing marketing efficiency and enhancing profitability well this means an intentional resetting of the marketplace revenue base it ensures the segment operates as a highly efficient high margin cash generator for the entire group this and especially in the coming years but let's take a closer look at one of the clearest proof points of our operational excellence and marketing efficiency in the marketplace segment on this slide on the left side you can see the significant deliberate reduction in advertising spend we intentionally scaled back our marketplace ad spend by 16 year over year bringing it down from 16.5 million euros in half year 125 to 51 million euros in half year 26. This nearly 10 million euro cost saving is a direct result of a disciplined strategy to prioritize high margin conversion and bottom line profitability over a sheer transaction volume. Remarkably, as shown on the right side, despite this 9.5 million euro reduction in marketing investment we successfully expanded our marketplace booking revenues backlog to new end of quarter to record of 71.9 million euros up one percent year-over-year showcasing what we can do also with lower marketing spend now on to a closer look at the underlying health of our marketplace specifically our regional booking mix and the evolution of our average basket sizes starting on the left with our regional booking revenues share for quarter two the dach region continues to represent our core foundation accounting for 52 percent of total marketplace booking revenues up three percentage points year over year the rest of europe contributed 26 percent up one percentage point year over year reflecting healthy and sustained demand across european destinations north america contributed 22 percent to our mix down two percentage points year over year this is a market where we continue to operate selectively under our advertising model and the rest of the world remains stable at under one percent moving to the right side of the chart in our basket size evolution we saw resilient customer demand across all geographies our basket size in quarter two grew by five percent year over year to reach 1056 euros looking for that into the individual regions in the dach region average basket size increased by 10 year over year to 891 euros and when excluding the short trip business it climbed by eight percent to 1263 euros the rest of europe followed a similar positive trend with basket sizes rising four percent year over year to 1183 euros finally north america continues to generate our highest absolute order values with average market sizes reaching 1 603 euros up two percent year over year overall and this is important this broad based expansion in basket sizes underscores our success in targeting high value longer stay travelers further supporting our high margin strategy across all key markets turning to our fifth pillar and the final one maintaining ai leadership given the broader market debate around how generative ai might impact digital search and discovery we want to clearly address where ai represents a structural net positive for home to go generally vacation windows are unique and no commodities like hotels so on one hand it's harder for people to let ai choose the right one on the other hand it's about vacation and thus the selection process is for many the first part of the actual vacation so you can imagine the total opposite of a stay in a hotel for a business trip but even in a scenario that take that ai takes fully over the selection process we are likely the best prepared in the industry first the home to go group generates more than 80 percent of its adjusted ebitda with home to go pro effectively insulating the vast majority of our group profits from potential b2c search traffic shifts looking at home to go pro on the left our core profitability is protected by physical modes and replicable unreplicable on-ground services so the property management business relies fundamentally on local physical services that is that are simply not easily not easy to replicate this protects our business model overall in particular from big tech players that deliberately avoid capital intensive local operations especially when you need to build them up from scratch even more a potential b2c shift traffic search traffic will likely increase the direct traffic to our properties so outside of otas and would actually help us further internalize margin second turning to the home to go marketplace side on the right we've always solved problems of aggregating the largest selection of vacation ventures with the latest machine learning before ai was talked about by everyone so we were also among the first leveraging the new capabilities of ai that arised at the end of 2021 at two our early ai adoption brought us integrated personalized ai power travel planning on our platform since 23 launching um nice tools and features like ai summaries of reviews and descriptions even before the biggest tech players and so much more we did in the first we did first in the vacation rental space today we have also deployed our own native home to go model contracts protocol mcp to allow autonomous ai agents and third-party lms directly accessing to direct access to our inventory turning ai platforms into highly efficient low-cost acquisition channels. Beyond these known customer-facing innovations, internal AI adoption is radically accelerating our daily operational efficiency and delivering measurable margin expansion across the group. So that's something we haven't spoken so much about yet. Let's take a look. Today, 100% of our workforce has access to AI tooling, with 15 active tools leveraging all leading frontier models across every department this is supported by a successful training proof of concept with over 100 employees enabling non-technical teams to use ai frontier models natively so via comment line interface or cli if that's something that that you are familiar with and securely in a secure sandbox environment let me highlight three areas of the many parts where internal use is already delivering tangible roi first in marketing ai generated responsive search ads are now outperforming human written ad copy at near zero generation cost driving a 44 lift in and in return on advertisement spent in many of our tests in video production ai tools have enabled us to cut costs by more than 60 percent second we take a look into product development time to market has been drastically shortened a standard example is our new partner center featuring natural language interface which our engineering teams built and deployed in just four weeks a process that previously would have taken us six months and third in operations process automations have enabled three times faster customer email response times reduce human chat escalations by 85 percent as we discussed prior and cut turnaround times for standard legal contract drafts by up to 95 percent for specific parts of the business in summary ai is not just a future vision for home to go it's an operational reality actively widening our competitive mode driving marketing efficiency and accelerating our profitability already today so this concludes the first part of our presentation on the strategic and operational highlights for the first half of this year as you have seen our strategic evolution into a b2b led powerhouse complemented by a strict marketplace efficiency and ai leadership is actively delivering

tangible high margin results across the group to now give you a more granular look at how this strategic process and progress translates into our detailed half year one financial performance and the actual segment dynamics i will now hand over to our cfo sebastian thank you very much sebastian the floor the floor is yours thank you patrick and a warm welcome to everyone from my side as well i am pleased to walk you through our financial results for the first half of 2026 It was characterized by strong top-line expansion, accelerating profitability momentum, driven by a very strong second quarter, and a remarkable surge in our free cash flow performance. Let's dive straight into the financial highlights for the first half of this year. Let's take a closer look at our statutory P&L comparison for the first half of the year. to be clear this comparison looks at our h1 2026 performance against the figures as reported in the first half of 2025 which at that time did not yet include interhome let's start with the ifrs revenues we delivered significant statutory revenue growth of 71.8 percent year over year reaching 160.1 million euros this strong jump is driven by the full consolidation of interhome which was not part of the group's reported figures for the first half of last year next we look at the cost of revenues cost of revenues increased to 41.4 million euros reflecting a structural shift in our business model due to the inclusion of interhomes managed service operations which incur substantial direct expenses such as cleaning and laundry services next we look at product development and operations here expenses increased to 25.7 million euros this was driven by a larger workforce following the interhome consolidation alongside increased software license fees next we look at gna expenses these expenses reach 21.8 million euros this increase mainly reflects the full consolidation of interhome bringing its personnel related software license and third-party service expenses directly into the group's expanded cost space last we look at the adjusted EBITDA and the margin expansion so adjusted EBITDA improved by 26.6 percent year over year to negative 15.1 million euros this was driven this drove a large margin expansion of plus 12.6 percentage points improving our adjusted EBITDA margin from negative 21 22.1 percent in h1 of last year to negative 9.4 percent in this year this clearly demonstrates how we are delivering on our 2026 targets by driving group profitability through strong market marketing efficiency and a significantly widened revenue base now let's take a closer look at the compare composition of our ifrs revenues and adjusted ebda by segment for the first half of the year again on a statutory basis comparing our current scale to the prior year period when interhome was not yet part of our reported figures i will start with discussing ifrs revenues at the group level we realized a big step change with 72 year over year growth to 160.1 million euros of ifrs revenue for home to go pro the standard driver is our volume based revenue which grew by 412 to 91.1 million euros reflecting the full impact of the inter-home consolidation in addition subscription revenue expanded by a strong 16 to 14.1 million euros mainly driven by very good performance at smooble for the marketplace overall ifrs revenue declined by circa 10 this decline was expected and reflects the strategic shift away from a focus on top-line growth to a focus of growing earnings and came on the back of a 16 reduction in marketing spending within ifr's revenue for the marketplace the shift between advertising revenue and on-site revenue continues with advertising revenue declining by 26 while on-site revenue actually grew by four percent for home to go on-site revenue carries a much higher strategic value as it provides a superior customer experience throughout the entire booking journey further Furthermore, it enables us to achieve customer ownership, fostering long-term relationships and driving repeat business. Consequently, we continue to work actively with our partners to transition them from the advertising model to the on-site booking model. I will now discuss adjusted EBITDA. At the group level, we improved our statutory adjusted EBITDA by 27% to negative 15.1 million euros, demonstrating significantly enhanced operating leverage. Home2Go Pro turned profitable, delivering a positive adjusted EBITDA of 1.7 million euros. For the marketplace, further proving our operational discipline, segment adjusted EBITDA improved by 16% year over year to negative 16.8 million euros. Overall, I would like to remind you of the seasonal pattern of our business. In Q1, we invest into customer acquisition to capture the bookings. In Q2, we start to see revenue coming in and profitability increases, but our by far strongest quarter in every year is Q3, where we generate the majority of revenue and earnings. We are seeing the exact same pattern also in this year, so our strongest quarter for revenue and earnings is yet to come in Q3 of this year. I would now like to provide more transparency and clarity on the more significant items below adjusted EBITDA in our statutory P&L for the first half of this year. First, share-based payments stood at 7.9 million euros compared to 7.1 million euros last year. These remain non-cash expenses related to our long-term incentive program. we have discussed the setup of our long-term incentive program and the accounting treatment of share-based payments in much detail in our last full year call and i would like to point you there in case you have any questions on this matter the appendix of this presentation also contains a slide with some additional detail second one of costs total 3.4 million euros for the first half of this year essentially flat year over year these were primarily driven by integration costs of 1.7 million euros as we continue to execute on synergy realization from the interhome acquisition. We also have a slide with some more detail on one of items in the appendix of this presentation. Third, amortization and depreciation. Amortization of fair value step apps from M&A increased to 10.4 million euros, which was up from 5.3 million euros in the first half of last year this reflects non-cash charges recognized as part of the purchase price allocation for interhome regular amortization of intangible assets stood at 3.6 million euros i would again point you to the panics of this presentation in case you're looking for more detail fourth net financial income came in at a negative 14.6 million euros comprising 400 000 in interest income at 14.1 million euros in interest expenses there were a lot of items driving this post so i will go into more detail so within the 14.1 million euros of interest expenses there were 3.2 million euros for the full amortization of transaction costs related to the old loan which we paid in march 2026. there was 3.1 million euros in actual interest on the new nordic bonds there was 2.6 million euros relating to the deferred consideration for interhome and 1.4 million euros in interest on the old loan which we repaid in March of this year further non-cash items included a 1.9 million euro revaluation of the call option that we have for the remaining 49 percent of getaway group along with smaller accounting adjustments for the Nordic bond prepayment option interest hedges and lease interest in summary while our statutory net income is impacted by these non-cash accounting effects and integration related items our underlying operational momentum and profit expansion are clearly visible in our significantly improved adjusted ebitda and also our really positive free cash flow trajectory let's now take a closer look at our like for like pnl comparison for the first half of this year As a reminder, the like-for-like basis compares our statutory financial results for the first half of this year against pro forma financial results for the first half of last year, which include Interhome and eliminate any distortions created by the timing of the acquisition of Interhome, which only closed on the 28th August of 2025. five again we'll start with ifrs revenues ifrs revenues came in virtually flat at 160.1 million euros down slightly by 0.2 percent year over year this reflects a stable overall top line development despite our deliberate strategic decision to deprioritize revenue growth in the marketplace segment and the decline the managed decline in the marketplace segment was offset by very good revenue growth in our b2b business next we look at cost of revenues cost of revenues increased by 6.3 percent to 41.4 million euros this includes a 1 million euro increase in payment costs due to the higher adoption of home to go payments by our partners which also led to a material improvement in our networking capital as well as 600 000 increase for additional cleaning staff and four hundred thousand euros in higher costs for domains and hosting next we look at marketing and sales we achieved a significant cost reduction of eleven point one percent with expenses decreasing to eighty six point two million euros this positive shift was driven by nine point five million euros lower performance marketing expenditures year-over-year as we rigorously focused on operational efficiency and margin protection, particularly within the marketplace segment. Next, we look at GNA. GNA expenses decreased by 5.2% to 21.8 million euros. This reduction was primarily driven by the materialization of operational synergies and the successful exit of transitional services agreements for Interhome. Next, other income. Other income decreased to 1.4 million euros which was driven by lower other income at interhome which actually had an unusually high value for the baseline of last year lastly overall our adjusted EBITDA improved significantly by 7.3 million euros on a like-for-like basis of 32.6 percent year-over-year to negative 15.1 million euros, expanding our adjusted EBITDA margin by 4.7 percentage points to negative 9.4%. This strong like-for-like progress, especially on EBITDA, clearly confirms the power of our group strategy, which is to combine the scaling of our high-growth B2B segment with strict marketing and cost discipline in our B2C business. Now let's dive into our IFRS revenues and adjusted EBITDA by segment for the first half of 2026 again comparing these on a like-for-like basis that means including into home for the comparison period for last year let's start again with IFRS revenues on a group level as i already said overall revenues remain stable at 160.1 million euros for home to go pro we saw solid progress across both revenue streams Volume-based revenues expanded by 5% year-over-year to 91.1 million euros, while subscription revenues grew even stronger by 16% year-over-year to 40.1 million euros, which, again, was driven by very good performance at Sububu. For the marketplace, overall IFRS revenues declined by circa 10%. This decline was expected and reflects a strategic shift away from a focus on top-line growth to a focus of growing earnings and came on the back of a 16% reduction in marketing spending. Within the IFRS revenues for the marketplace, the shift between advertising revenue and on-site revenue continues, with advertising revenue declining by 26%, while on-site revenue grew by four percent for home to go pro on-site revenue carries for home to go on-site revenues carries a much higher strategic value as it provides a superior customer experience throughout the entire booking journey furthermore it enables us to achieve customer ownership fostering long-term relationship and driving repeat business consequently we continue to work actively with our partners to transition them from the advertising model to the on-site booking model now looking at the adjusted EBITDA at the group level we significantly improved adjusted EBITDA by 7.3 million euros or 33 percent year over year to negative 15.1 million euros home to go pro was a standout performer delivering a swing in profitability to reach positive 1.7 million euros up from negative 2.4 million euros in the same period of last year this clearly demonstrates the strong underlying earnings power and synergy potential of our b2b operations especially in tahoe in the marketplace segments the segment adjusted EBITDA improved by 16 year-over-year to negative 16.8 million euros a direct result of our profitability first strategy and disciplined marketing and cost execution let's now move to our liquidity development and cash generation profile on the left hand side of this chart you can see our cash bridge for the period starting with the 31st december of last year until the 30th of june of this year in the first half of 2026 home to go generated a remarkable 55.3 million euros in positive net operating cash flow powered by a surging 52.7 million euros in q2 alone driven by the strong operational cash performance our cash cash equivalents advanced from 91.6 million euros at year end to 134.7 million euros as of june 30th of this year moving to the right side in order to provide more transparency let's walk through the bridge from our operational earnings to our underlying unlevered free cash flow for the first half we start with adjusted EBITDA which improved by 5.5 million euros year over year to negative 15.1 million euros from there we deduct capex payments for intangible assets of 5.8 million euros which mainly relate to capitalized internal software development expenses and capex for ppne of 1.2 million euros we then account for interest in principal payments for leasing of 3.3 million euros and income tax paid of 3.5 million euros finally we factor in the primary engine of our cash performance in the first half of this year a very strong 77.2 million euro cash inflow from the change in networking capital a significant 48.6 million euro improvement over the first half of last year the key contributors were a 56.4 million euro increase in other liabilities mainly driven by seasonal advanced payments from travelers as well as a 23.2 million euro increase in trade and other papers the result our underlying unlimited free cash flow surged to positive 48.2 million euros in the first half of this year a massive 50.7 million euro swing compared to negative 2.5 million euros in the first half of last year achieving this impressive cash generation clearly underscores our enhanced cash conversion power which to be honest is very much driven by the further implementation and ongoing very good take up by partners of the home to go payment product and also the successful optimization of our operational cash cycles let's now turn to our balance sheet strength especially looking at our net debt position and covenant headroom as of june 30th of this year our total gross debt stands at 209 million euros this comprises 101 million euros face value of our Nordic bond, 81.3 million euros in deferred payments related to the inter-home acquisition that we still need to pay over the next three years, and 26.6 million euros in lease liabilities. Offsetting this gross debt, we hold 134.7 million euros in cash on our balance sheet and also 9.8 million euros in cash held in escrow. This brings our total net debt to 64.5 million euros moving to the right under the documentation for the nordic bond home to go has to adhere to two maintenance covenants the first covenant is the leverage ratio defined as net debt to last 12 months adjusted EBITDA this covenant requires us to remain below 4.5 times as of june 30th of this year based on our net debt of 64.5 million euros and an ltm adjusted EBITDA of 49.8 million euros our leverage ratio stood at a very healthy 1.3 times well below the required threshold the other covenant is the minimum cash position the requirement is a minimum of 20 million euros as of june 30 our total cash position including cash held in escrow stood at 144.4 million euros providing a substantial liquidity buffer in summary all maintenance covenants for nordic bond are met with a very comfortable headroom fully underpinning the group's financial stability and strong balance sheet with our strong first half financial performance and our operational execution laying a solid foundation let's now turn to our outlook and financial guidance for the full year 2026 based on our solid performance in the first half of this year we are confirming our financial guidance for the full year 2026 we reiterate our target of IFRS revenues of between 400 and 410 million euros and adjusted EBITDA between 45 and 47 million euros. Looking closer at how we expect to deliver within these target ranges. First, regarding IFRS revenues, we currently expect full-year results to come in towards the lower end of our guidance range. The driver for the softer revenue outlook are lower than expected demand in our ancillary short trips business which is being impacted by softer consumer sentiment and also forest fires throughout holiday destinations in southern europe but crucially overall demand in our core vacation rental business remains as expected second looking at adjusted ebitda we expect bottom line performance to come in towards the upper end of our guidance range our strong focus on profitability in the home to go marketplace combined with very good progress on synergy realization is providing us with increased confidence in our bottom line execution to wrap up our presentation let's summarize the four key takeaways from our performance in the first half of this year first exceptional top line growth and significant profitability improvement group ifrs revenues increased by 72 percent year over year to 160 million euros group adjusted ebitda improved substantially by almost 27 year-on-year to negative 15.1 million euros driven by accelerating growth in the second quarter of plus 59 percent year over year second home to go pro scales rapidly as the group's main revenue and profit driver our b2b segment delivered extraordinary growth with ifrs revenues more than doubling by 250 percent year over year to 105.2 million euros now accounting for approximately 66 percent of total group revenues while segment adjusted EBITDA turned distinctively positive. Third, we saw a surge in free cash flow driven by the successful interim integration, seasonal cash conversion and optimized working capital also driven by the further adoption of the home-to-go payment product. Free cash flow surged to 48.2 million euros in the first half up from negative 5 million euros in the first half of last year advancing our cash position to 134.7 million euros lastly we are reaffirming our guidance for this year backed by a strong h1 we iterate our full year guidance of 400 to 400 million euros for ifrs revenues and 45 to 47 million euros in adjusted ebitda now tracking towards the lower end of the range for ifrs revenues and towards the upper end of the range for adjusted EBITDA with that we thank you very much for your attention today we will now open the floor for your questions yes thank you so much for your

presentation we will now move on to the Q&A session and for an engaging conversation we kindly request to ask your questions in person via audio line to do so please click on the raise hand button and if you have dialed in via phone you can raise your hand by pressing star key 9 and unmuting yourself by pressing star key six additionally you can also place your questions in our chat and i will read them out loud for you with that said we have received some risen hands and i just sent an invite to mr cruza you may unmute yourself now good morning thanks for the presentation and solid set of numbers first question for patrick um on encouraging to see

your average basket size actually going up um i think that's on the industry probably at best a stable development maybe you can yeah share some comments on overall sort of booking behaviors and how you see that you yeah you're faring against the against the competition on the on that respect yes happy to yeah so like um part of it is is obviously like um our marketing efficiency um topics that we like said we strategically um put on our radar for for this year where we said like we will try to cover higher conversion and higher basket sizes so like um people that may um have an interest in book also like um bigger vacation or like um spend more and this is basically also reflected if you compare it um in regards to the overall market that we have been able to not only lower our ad spend and and nonetheless get a higher booking revenues backlog but also like um part of it is targeting um specific consumer segments um that are actually letting us profit from that in the basket size development okay thanks and then sebastian few questions for you uh thanks for providing the performer pna that's very helpful the transparency

there but if i look at the q2 isolated the ebitdi adjusted ebta improvement is only marginal can you remind us like how we should look at those cost synergies seems like they all came sort of in q1 um anything we should have in mind there and on that um also could you remind us the for the proforma ebta for q3 last year i think i had 69 million in mind uh could you confirm that thank you um on the ebitda for q2 in isolation like two effects that i want to point out that

are important to know and that's why i think actually looking at half year is is probably the much better uh much better metric it is timing of easter so um easter uh was in uh q last year, and it was actually in Q1 of this year. So because of the way we recognize revenue, that means that a lot of revenue has actually shifted between quarters. So Q2 this year is kind of like negatively impacted by that because some of the revenue and then also EBITDA actually shifted towards the first quarter. So again, I would invite you to look at H2 because that is a much better comparison then for q3 i would point you to our q3 presentation that we gave last year the appendix you will find the full pro forma p l including inter home on a quarterly basis so you can actually look it up there too okay thanks and then finally on on the free cash flow uh yeah great performance there i know you don't give guidance on that number but maybe sort of more on a qualitative level how we should expect that figure to to pan out in the next quarters that'll be very helpful thank you yeah so the um the um the seasonality pattern that we see in revenue and ebitda we obviously also see in cash right so we we get uh cash prepayments from our travelers um especially in in the first half um when then the traveler is actually taking the holiday we also have to pay out money to to the hosts especially at interim so we have a very seasonal pattern for those of you who were part of the Nordic bond fundraising last year there were a couple of slides in the presentation materials back then where we showed the seasonal cash pattern especially for interhome Tim I'm happy if you don't have those materials to shoot them over after this call um the the cash uh pattern will follow the same patterns as last year or also this

year right okay that'll be helpful thank you all the best thank you thank you very much another risen hand uh we do have from mr nagaraj you may unmute yourself now i just sent you an invite mr nagaraj can you hear us i just sent you an invite to unmute yourself yeah yeah sorry thank you hope you can hear me um i just had a couple of questions uh could you share how much traffic you're currently getting from third party llms and ai agents that's the first question and the second question with regards to your pro business the three percent growth on a pro forma basis is

that in line with your expectations um for this year and what kind of growth are you looking to get to in the medium term for this business and the steps you're taking to get there please um so on the LLMs look I think the the the answer to that is I think the most importantly is like we don't get many bookings through them right so LLM is that is all very very early I think probably the bookings I do personally with home to go every year probably outpace the combined volume of all bookings we ever received through an LLM so this is really early adoption of technology we do believe that much more bookings will migrate to this channel in the future so we want to be positioned very early on in there we want to learn but it economically it it doesn't have any material impact at all for us at the moment then on your second questions for B2B so yes it is in line with our expectations so we're actually quite happy with the B2B performance that we're seeing and our midterm expectations remain the same as we have also discussed in prior calls with you.

Okay, all right. May I just ask one more question then? With regards to Smubu subscriptions, any color on the seasonality with regards to new subscriber ads and the growth in Smubu, is that being currently driven by the new subscriber ads or price increases or anything else to talk about? Thank you.

Yeah, so the growth in Smubu is driven by new subscribers actually so it's not driven by price increases mainly this year and there is there's not much seasonality profile necessarily when it comes to subscriber subscriber growth it's more driven by by campaigns that we run its Google where we where we try to push for a subscriber growth so there's there's not that much which is analogy profile in there understood thank you thank you so much mr nagaraj another is in hand by mr hinkle i just sent you an invite to unmute yourself hello can you hear me yes we can hello fantastic thank you very much for having me

i have three questions if i may um on the wildfires we are currently seeing um i guess that make southern europe in in summer uh increasingly um more or less attractive a destination maybe also some dark regions can you say something um what how do you see the impact of that uh on on your business model i mean uh probably summer months are very important for for home to go maybe you can can share your thoughts on that one if that's possible and secondly it seems I would like to understand that short-term trips seems to be much more important in the dark region than elsewhere is that because most of your customers are in the dach region and they are more um tend to to be more attracted by short-term trips or what's what's the reason behind that and lastly on home to go payments and you said that there you incurred additional cost of one million for home to go payments but overall my understanding was always that this is a very positive feature for home to go because you are

able to um to to manage more effectively your network capital when it comes to payments customer prepayments etc can you confirm that that would be my three questions thank you very much yes so on the first one um on the wildfires i think the wildfires per se they like we do see cancellations in in the areas which are specifically impacted by the wildfires right so So we do see cancellations. Overall, they're not exceptionally meaningful for us right now, right? But it is a rapidly developing situation and it's very, very hard to forecast wildfires. So we just need to see and hopefully it's all going well and there is rain coming. I think the broader question, to be honest, is more what the impact of climate change in Europe will do to holidays, because when you live in Germany and you are already suffering from heat, you probably are not really looking to take a holiday in southern Europe where it's even hotter. So what we do see is an increasing interest in holidays in northern destinations. So, for example, the Baltic Sea, where we are also very strong, has had a very, very good year this year. So people are looking towards taking holidays there. From industry, we also know that Scandinavia had a very, very good year this year, which is an area where we are currently underrepresented. So it's definitely an area we're looking at to grow in the future. and we do see that some southern destinations for example Croatia are actually suffering this year right so climate change and and the expectation that the heat patterns will continue in Europe and this you know like hot summers like we had this year will probably be the norm in the next couple of years will definitely have an impact on where people want to take holidays and we as a travel provider need to adjust to that and we need to make sure that our destination portfolio is also well equipped to to cater for uh that um then the the second one on on dach so yeah our short-term business is is really a very german business right so um it's uh like the it's cool that is a business that is catering to towards german customers um taking short trips in in germany so think about taking a short trip with your wife to i don't know go to munich and and and see the opera or something like that and this is definitely a part of our business where we do see negative consumer sentiment coming through so there is less interest in this kind of booking it's seen as a more as an item of spending that people can do without in contrast to the big summer holiday which is the driver for our core vacation rental business so this is definitely one part of our business where we see negative sentiment uh unfortunately playing against us and And then on home to go payments, yes, you're absolutely right. So we obviously have higher payment fees as more and more of our partners are using the payment product, but the benefit far outweighs the cost. It's number one, a much better customer experience. So overall conversions are positively impacted by that.

Number two, the cash flow is also positively impacted because we get the money in earlier if people use our payment infrastructure. so it's it's very it's a very very good thing if more and more people use that okay thank you very much thank you so much we have another was in hand by mr folka i just sent you an invite to unmute yourself and as you're dialing in by phone please press star key six to do so hello mr folka can you hear us it was the butter bank hello yes we can yeah perfect thank you very much um yeah

thanks for all the details already provided a couple of questions from my side first of all in the future i mean it's about ai and in the future if i got it right uh home to go could be more an inventory provider than for the ai models um you said that is of course not immediate impact but looking ahead what does it mean on your business model and what uh how could that impact um take rates for example first question and second question is on on m and a i mean perhaps a word on that you touched not that in the past it was always a topic i mean are you working on a short list here and and and and how is your priority in regards to m&a versus debt reduction for example how do you look at that and last one and perhaps some words on the negative eps trend in h1 versus h1 last year how do you think about the quality of your net income given that yeah the higher ppa higher financing costs and higher spc effects thank you thank you folka um i take the first question and sebastian will take

the second and the third um so in regards um to ai yeah so like uh as as mentioned by us we see the llms as a potential additional or like somehow replacing um direct traffic channel yeah So because people might turn, not only that they go directly to open AI chat GPT or use cloud of anthropic, but also like within the integrated AI mode of Google when they search, you obviously have like this kind of LLM interaction there, right? And so what home to go has always been doing is not only like going after our own like website, but we had from some time ago, like the home to go doppelganger product, which is allowing third parties to access home to go inventory. Yeah. And this is something we further went after with building this MCP so that LMS can theoretically directly access our inventory via the MCP protocol. So like really trying to build like a standard if people want to connect to the largest selection of vacation rentals. And you can imagine, as we have good relations with Google, but also OpenAI and others are eager to connect to our large amount of inventory, we believe that this is an interesting kind of traffic channel in general. So in regards to take rates, that shouldn't change something. We actually expect that customer acquisition costs, like in terms of ad spend, would rather be lower on that side. And especially for our home to go pro part of the business, as you said, right? So there, what we take as take rates for like managing the house, like maintaining it, cleaning it and so on, that is not affected by AI. Furthermore, we also believe there that the acquisition costs will get lower as more people might get directly to, for instance, the interim inventory instead of needing to pay another OTA, a margin in between.

So, like, take rates stay the same, but, like, margin likely goes up because we don't have to share parts of our take rate with third parties. so just for clarification in the end it would be that the the customer could book via an llm at an and home to go property without having seen the website of home to go in this booking process right no like at the at the moment this is not how how these things are uh happening right like because also like opening music i mean not in the moment that is right yeah yeah but like future you're thinking about the way i describe like as i said right like so um

all of these things take longer usually than you expect but we prepare for such a future yeah because like google for instance is currently testing you might have seen that in the us that you can directly um within the ai mode um basically book hotels yeah um so not only search them but book them and so it could also be that this is something um that will come usually a little bit later due to european regulations to to the eu but like at some point it might definitely come and as we have um also on the inventory side with google vacation rental finder and and and google hotel finder a good like kind of relation to google we expect also this at some point be being part of this because as said, right, like for us, it's about that our properties get the bookings and not necessarily that they always have to have happened via the home-to-go marketplace.

Thanks for the clarification. Thank you so much.

Sorry, I will take over for the second and third question now. The second question was on M&A, if we have a short list and whether we prioritize debt reduction or M&A so yes we absolutely have a shortlist that we're working on as Patrick has also explained in his presentation we are also increasing overall our M&A deal capacity so we're both increasing the number of people on the on the source sourcing and execution of M&A deals as well as on the integration side so we want to be able to do many more deals especially the smaller deals and we're very focused on deals in the property management sector which is in line with what we had said before so we generally want to do M&A deals only on the B2B side and especially on the property management side we as I explained we are thinking about our portfolio as well strategically right so which regions we're buying it so at the moment we're probably not that interested in doing deals in Croatia but we would be really interested to do deals in scandinavia for example um and with debt reduction um we can only repay all at once for the loan so uh we we cannot repay it partially under the terms of the loan so um yeah so we we probably uh wouldn't do that anyways at the moment we have a good m a pipeline we're pretty excited about that we can do deals at very good multiples um so we see a much better return on deploying capital there rather than repaying the debt then lastly your question on net income what i want to reiterate is when you look at where the uh deterioration comes from it is coming from the net financial result right which is at negative 14.8 million and then also the much higher depreciation and amortization so um within the almost 50 million of net financial result the actual interest cost in there is about five so there is 10 million euros of non-cash accounting stuff in there so is this really a good indicator towards underlying earnings power in my personal opinion no but everybody has to form their own opinion and then the higher amortization charge comes from the M&A related amortization for Interhome. All of that is non-cash again it is also accounting driven. So in my personal view the reported loss says very little about underlying performance or underlying earnings power and the story really is about EBITDA and free cash flow generation.

So that's my personal opinion on that. yeah well understood thank you very much for that thanks thank you so much we actually have some more questions in our chat box five um to be exact i would say we will start with a couple of questions by mr johanneson um his first question is pro forma adjusted evita is higher on ltm than your full year guidance do you essentially expect a decline in h2 they're obviously two different metrics right so ltm adjusted ebitda is 100 certain so that relates

to history so i know it with certainty and then guidance relates to the future and um as much as I still are you know wishing for a crystal ball to be given to me for Christmas my wish hasn't come true yet so by definition we're always a little bit more cautious about the future so the guidance we've actually increased in this call right so to the upper end of the guidance and I think that that's stands on itself all right thank you a second question would be to understand working capital movements in H2, where do you see leverage ending 26?" So we do not give a guidance for end of 26 leverage, but as I explained before when I was talking to Tim, the seasonal cash patterns will be the same ones as or very similar as last year. So I know that you know the different presentation materials because you were involved in the fundraising, so I would just point you to there.

Thank you very much. His third question is, can you provide a timeline on the expected realization of the reminder 4 million euros synergies up to the 10 million target?

Yeah, so as Patrick has said, we are working on it. I mean, there's also been some news reporting about that in the Badersche Zeitung, for example. So they will be realized in the second half.

All right. His last question. What is the latest update around further M&A bolt-ons?

Yeah, as I just said when talking to Mr. Volker, we have an M&A pipeline. We're working on that. We are picking the deals that we're doing, so there is no deal that we must do. So we're looking for a deal which deals, generally speaking, which fit our strategic criteria, which is it needs to be on the B2B side, especially in property management. It needs to fit the geographic search focus that we have and it needs to be priced well. We're in multiple discussions at the moment and we expect to do deals in the coming weeks and months.

Thank you so much. There are two more questions by Mr. Braun.

I will read them out one by one his first one is you are evidently planning a restructuring what does this entail and what impact will it have on the financial figures yeah so as Patrick has also explained during his presentation the restructuring is part of the synergy realization so it's getting those last four million euros until the end of the year there is there a couple of larger projects that we're working on and that is the restructuring that is that is mentioned so one of them entails discussion with the workers council which we have started recently as those discussions are ongoing we cannot give specific guidance on the restructuring costs involved all right thank you his second question would be the quarterly report mentions a compensation claim against the former owners of interhome what is this about and what risks does it pose for home to go yes so i would point you to note six in the half year report um there's actually a lot of detail on your question in there already um so this relates to um a tax matter at at interhome It all relates to the period well before our ownership. There's about 26 million euros in risk there, tax risk, of which 18 million euros relates to back taxes and 8 million euros to interest in penalties. We have taken a liability as part of the purchase price allocation for that. but most importantly we've also created an asset which is exactly the same amount and why have we created that asset because we have an iron clad indemnification from the seller towards that so the net risk for us is zero because any backtests and interest and penalties are to the account of the seller and we're working through that at the moment also together with the seller perfect thank you so much we have two more remaining questions in our chat box one is can you expand on your free cash flow expectations for the full year this would be very helpful since

the lack of a free cash flow guidance has been a concern for investors also can you reconfirm your midterm aspiration for approximately 20% EBITDA margins in the midterm and share your current thoughts on a sustainable fcf ebitda conversion level for your business model thank you very much um yeah i mean we do not give free cash flow guidance um so we also do not want to start with that right now um especially with bond investors i've gone through the um how the cash flow works and what kind of like the the constituent parts of cash flow are um in detail

many many times so i would i would point to that i think there is a lot of knowledge within investors about that um and yes i can reconfirm our midterm aspiration for the EBITDA margins all right thanks a lot last question for today what is the needed cash buffer to be able to sustain seasonal swings in working capital look i would probably point you to the number that is you know the second maintenance covenant test which is the 20 million right and so we had about 144 million I think the 20 million which is the maintenance level is a good proxy for that

all right thank you so much as we have not received any more questions in our chat or risen hands I would say we now come to the end of today's earnings call you will find the presentation on home to go's website and also at the airtime platform by clicking into today's event dear participants thank you for joining and your interest in home to go if you should have any further questions at a later time please feel free to contact investor relations thanks once again have a nice day and goodbye