The Jung, DMS & Cie. Pool GmbH, a wholly owned subsidiary of JDC Group AG, issues a secured 5-year corporate bond with a coupon of 5.50% p.a. The issue volume is up to 25 million euros. The proceeds of the issue will be used to refinance the outstanding bond (ISIN DE000A14J9D9) due 21 May 2020 and to finance the further growth of the JDC Group. The sales of the group are to a large extent recurring. In recent months, the JDC Group has won several major customers. The bond is secured with commission claims. Profitability and key performance indicators should continue to improve, as some projects with major customers are only now making a profit. Overall, the bond with a coupon of 5.50% p.a. very attractive.
The new bond 2019/24 of the Jung, DMS & Cie. Pool GmbH (ISIN DE000A2YN1M1) is offered as part of a public offer from 11.11.-27.11.2019. That Investors can subscribe to the Frankfurt Stock Exchange by placing an order to buy.
In addition, a public exchange offer for Jung, DMS & Cie. Pool GmbH bond 2015/20 (ISIN DE000A14J9D9). Investors can exchange the 2015/20 bond at a 1: 1 ratio for the new bond. For each converted bond with a nominal value of € 1,000, the bond creditors receive an additional amount of € 10 in addition to accrued interest, ie a one-off payment of 1.0%.
The Jung, DMS & Cie. Pool GmbH operates in the broker pool market and offers modern consulting and administration technologies for financial service providers and their clients. The Issuer has cooperation agreements with a total of approx. 16,000 freelance consultants and approx. 850,000 end customers, making it one of the largest independent broker pools in Germany. The Issuer develops state-of-the-art advisory and management technologies, combining classic financial services with the fast-growing fintech sector. The Issuer is a full-service provider for handling a wide range of business models in the area of brokering financial and insurance products and advising on wealth and pension matters. With Geld.de, the Issuer operates an online comparison portal, which not only provides financial and insurance products, but also electricity and gas contracts as well as DSL and mobile phone contracts. Another offer of a digital financial service is the Robo-Advisor easyrobi. The sole shareholder of the issuer is Jung, DMS & Cie. AG based in Munich. Sole shareholder of Jung, DMS & Cie. AG is in turn the listed JDC Group AG based in Wiesbaden. In addition to the activities of the Issuer, these offer a service and technology platform for financial service providers as well as independent financial and investment advice for demanding clients.
The Jung, DMS & Cie. AG, the sole shareholder of the Issuer, has entered into a (perpetual) control and profit transfer agreement with the Issuer. The Jung, DMS & Cie. AG is required by the Control and Profit and Loss Transfer Agreement to offset losses of the Issuer. The Jung, DMS & Cie. AG has in turn concluded a corresponding domination and profit and loss transfer agreement with its sole shareholder, JDC Group AG.
Business development / important contracts
The JDC Group is on a dynamic growth course. In the first half of the year, the company increased sales by 18% to 52.5 million euros. Although initial costs are incurred when a new customer is brought onto the platform, the EBITDA margin also improved in the second quarter of 2019. The Jung, DMS & Cie. Pool GmbH generated sales of EUR 34.6 million in the first half of 2019 (around 66% of Group sales) with an EBIT of EUR 1.8 million.
Over the past few months, the JDC Group has signed a number of white label contracts that offer significant scaling opportunities: For the Albatros Versicherungdienste GmbH, a company of the Lufthansa Group, the JDC Group serves 150,000 Lufthansa employees with over 400,000 contracts on the JDC platform , A long-term cooperation was concluded with 300 exclusive insurance agents of Rheinland Versicherungen. A five-year exclusive contract was signed with Sparda-Bank Baden-Wurttemberg. Sparda-Bank Baden-Wurttemberg is the largest German Sparda association with 700,000 customers and 40 branches. For Bavaria Wirtschaftsagentur GmbH, a group company of BMW AG and insurance brokers for BMW employees, JDC offers insurance solutions. JDC also offers insurance solutions for comdirect bank, Germany's leading direct bank with 2.5 million customers. A five-year exclusive contract was signed with comdirect. The cooperation with Sparda-Bank BW has only been delivering sales and earnings contributions for several months. The contracts with Bavaria and comdirect will only generate revenues in the future. Measured by sales of the JDC Group in 2018, 58% of sales are recurring.
use of funds
The Issuer intends to use the proceeds of the issue as follows: To refinance Jung, DMS & Cie. Pool GmbH bond 2015/20 (ISIN DE000A14J9D9) with a volume of EUR 15 million and for the refinancing of a loan of EUR 2.5 million from flatex Bank and to finance the further organic and inorganic growth of the JDC Group.
The new bond is collateralised with existing and future commission claims of the issuer. At least one third of the issue proceeds should be covered by the annual portfolio commissions so that in the worst case the claims of the bondholders can be fully serviced after three years. Commission claims are reviewed twice a year by the trustee and may be increased by the issuer.
– High transparency through stock exchange listing of parent company JDC Group AG
– good predictability in sales
– Contracts with cooperation partners will have a short-term impact on sales
– Key figures should reach a very positive medium-term level
– Collateral (the bond is secured at a three-year time horizon) over annual commission claims
– Positive performance of the JDC bond 2015/20
– Onboarding costs can not be passed on in full, i. E. JDC goes into advance when concluding the contract (outsourcing / white label)
– MIFID-II discussion: inventory commission only if it is used to improve the quality of advice
Sales of the JDC Group are easy to plan and the business model can be scaled. The JDC Group has already grown significantly in terms of sales in recent years. 58% of sales in 2018 are recurring revenues. The yield side lags a bit behind. Here, construction costs for white label platforms with major customers weighed on the result. The key figures should reach a very good level in the coming years. Due to new cooperation agreements, i.a. With Sparda-Bank Baden-Wurttemberg, comdirect and Bavaria Wirtschaftsagentur GmbH, a group company of BMW AG, which are yet to be recognized in sales and earnings, the sales and earnings planning and the related substantial improvement of the key figures seem credible. The bond-specific indicators should therefore reach a very positive level from next year. The bond is also secured with commission claims. Overall, the bond with a coupon of 5.50% p.a. very attractive.
Christian Schiffmacher, https://www.fixed-income.org/
(Photo: booth of Jung, DMS & Cie. At the Fonds Professional Kongress)
EBITDA Interest Coverage
EBIT Interest Coverage
Net Debt / EBITDA
Information about JDC Group AG
Sales, EBITDA, EBIT and net result in TEuro; Source: BankM
Key data of the new Jung, DMS & Cie. Pool bond
Jung, DMS & Cie. Pool GmbH
WKN / ISIN
A2YN1M / DE000A2YN1M1
Exchange period for bond 2015/20
25 million euros
Cash settlement at exchange
10.00 Euro (each converted bond 2015/20 with a nominal value of 1.000 Euro)
02.12.2024 (5 years)
Denomination / Minimum order
Source: fixed-income.org – The platform for investors and issuers in the bond market.