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Scout24 AG hits another quarter of healthy year-on-year revenue and profitability growth and continues success story in the first half of 2018

DGAP-News: Scout24 AG / Key word(s): Half Year Results13.08.2018 / 07:29 The issuer is solely responsible for the content of this announcement.Scout24 AG hits another quarter of healthy year-on-year revenue and profitability growth and continues success story in the first half of 2018 Revenues up by

DGAP-News: Scout24 AG / Key word(s): Half Year Results

13.08.2018 / 07:29
The issuer is solely responsible for the content of this announcement.


Scout24 AG hits another quarter of healthy year-on-year revenue and profitability growth and continues success story in the first half of 2018

  • Revenues up by 9.7% to EUR 251.2 million
  • Ordinary operating EBITDA-Margin up 1.6 pp to 55.3%
  • Strong results across all three verticals
  • Well on track to achieve guidance for full year


Berlin / Munich, 13 August 2018 - Scout24 AG ("Scout24" or "the Group"), a leading operator of digital marketplaces specialising in the real estate and automotive sectors in Germany and other selected European countries, has marked another quarter of strong growth in Q2 2018 and further increased its revenue and profit levels in the first half-year of 2018. Results being fully in line with expectations, the Group is well on track to achieve the guidance given for the full financial year 2018.

According to the unaudited, yet reviewed by the auditor, consolidated financial statements, Group revenues for the first half-year 2018 increased by 9.7% to EUR 251.2 million. Group ordinary operating EBITDA improved at a disproportionately higher rate of 13.0% to EUR 138.8 million, yielding a margin of 55.3% (up 1.6pp). Cash contribution increased by 6.3% against the comparable period in 2017, offset as expected by higher levels of capital expenditure in the first half of 2018, related to product development activities and taking into account the extraordinary investment related to the office relocation in Munich.

"We have seen continued momentum across all three verticals in the first half of 2018 and have built a strong base to grow further from in the second half of 2018. We are especially happy with the performance in ImmobilienScout24. We now expect to reach revenue growth levels in ImmobilienScout24 at the upper end of the range of the full year guidance we gave to the market at the beginning of the year. With all businesses on track, we continue to focus on delivering on our strategy of enhancing our market network, improving consumer experience and participating in more steps along the consumer journey in the digital world. We recently did a strategic acquisition to this end by buying FINANZCHECK.de, a leading German fintech company. A perfect fit to our Consumer Services business." said Greg Ellis, CEO of Scout24 AG.

"Since our IPO, we have now concluded the eleventh consecutive quarter of year-on-year top- and bottom-line growth, delivering on our financial targets and impressively underlining our successful growth story. This persistently strong financial performance builds a strong foundation for the further development of our Group and is also reflected in the favourable financing conditions that we achieved in our early refinancing of our bank loan. Given the extensive usage of our marketplaces and the synergies between them, we are convinced that there is more significant revenue potential ahead on our way to building out a leading market network around the real estate sector in Germany and automotive sector in Europe," commented Christian Gisy, Chief Financial Officer of Scout24 AG.


Overview of Financial Results

The table below provides a summary overview of the Group's performance for the first half year and second quarter ended June 30, 2018.

(EUR millions)Q2 2018Q2 2017*%
change
H1 2018H1 2017*%
change
External revenues127.8117.09.2%251.2228.99.7%
IS2461.859.34.2%122.3116.35.2%
AS2444.638.815.0%86.775.115.4%
CS21.319.210.9%42.037.512.0%
Ordinary operating EBITDA175.166.413.1%138.8122.813.0%
IS2443.640.28.5%83.678.46.6%
AS2424.219.722.8%43.234.425.6%
CS9.07.520.0%15.813.715.3%
Ordinary operating EBITDA-margin158.8%56.8%2.0pp55.3%53.7%1.6pp
IS2470.6%67.8%2.8pp68.4%67.4%1.0pp
AS2454.3%50.8%3.5pp49.8%45.9%4.0pp
CS42.3%39.1%3.2pp37.6%36.5%1.1pp
EBITDA270.258.919.2%131.0112.116.9%
Capital expenditure510.15.390.5%18.09.491.5%
Cash contribution365.061.16.4%120.7113.56.3%
Cash conversion489%92%(3)pp87%92%(5)pp
* The following change has been implemented compared to the reported 2017 financials: IFRS 15 was applied as of 1 January 2018 and 2017 financials have been restated retrospectively; IFRS 16 is also applied as of 1 January 2018, the 2017 financials have not been restated retrospectively.

1 Ordinary operating EBITDA represents EBITDA adjusted for non-operating and special effects; These include primarily expenses for reorganisation, expenses in connection with the capital structure of the Company and company acquisitions (realised and unrealised) as well as effects from share-based compensation programs recognized in income. The ordinary operating EBITDA-margin of a segment is defined as ordinary operating EBITDA as a percentage of external segment revenues.
2 EBITDA is defined as profit before financial results, income taxes, depreciation and amortisation, impairment write-downs and the result of sales of subsidiaries.
3 Cash contribution is defined as ordinary operating EBITDA less capital expenditure (adjusted).
4 Cash conversion is defined as ordinary operating EBITDA less capital expenditure (adjusted) divided by ordinary operating EBITDA.
5 Capital expenditure (adjusted) does not include capital expenditure incurred due to the first-time application of IFRS 16 in the financial year 2018. Capital expenditure incurred due to the first-time application of IFRS 16 amount to EUR 33.4 million in H1 2018.


The full half-year financial report including financial statements and additional details on segment level is available at www.scout24.com/ financial-reports.


Business Development
Group


Scout24 continued its successful development in the first half of 2018, supported by the sustained positive development in the ImmobilienScout24 ("IS24"), the AutoScout24 ("AS24") and Consumer Services ("CS") segments.

The Group increased its external revenues by 9.7% to EUR 251.2 million in the first half of 2018 (H1 2017: EUR 228.9 million).

Building on the good scalability of the Scout24 business model and a disproportionally lower cost growth, ordinary operating Group EBITDA in the first half of 2018 improved with a disproportionately high rate of 13.0% year-on-year to EUR 138.8 million, which corresponds to a margin of 55.3% (H1 2017: 53.7%).

Reported Group EBITDA grew to EUR 131.0 million in the reporting period, up 16.9 % compared with the first half of 2017 (H1 2017: EUR 112.1 million). This includes a total of EUR 7.8 million of non-operating costs (H1 2017: EUR 10.7 million). These costs are related to M&A activities including post-merger integration as well as personnel costs, mainly for share-based compensation and reorganisation measures implemented. In the first half of 2018, non-operating cost were mainly comprised of personnel costs in the amount of EUR 4.9 million, of which EUR 3.5 million for share-based compensation, and costs related to M&A activities (EUR 3.2 million). Moreover, an additional EUR 0.9 million was related to the relocation of the Munich office in March 2018. The non-operating costs were partly offset by extraordinary income of EUR 1.6 million for the sale of the trademark rights of "JobScout24" Switzerland. Consolidated earnings after tax, completely attributable to our shareholders, for the first half of 2018 amounted to EUR 66.4 million (H1 2017: EUR 54.9 million), equivalent to EUR 0.62 of earnings per share (H1 2017: EUR 0.51).

The cash contribution in the first half of 2018, adjusted for the effects of the first-time application of IFRS 16, was up by EUR 7.2 million to EUR 120.7 million from EUR 113.5 million in H12017. The cash conversion rate of 87%, based on ordinary operating EBITDA, was down compared to the first half-year 2017 (92 %), due to higher capital expenditure levels, as previously forecast. Cash and cash equivalents amounted to EUR 33.6 million as of June 30, 2018 (31 December 2017: EUR 56.7 million). Net financial debt (nominal value of interest bearing liabilities less cash and cash equivalents) stood at EUR 581.1 million, compared with EUR 560.9 million as of 31 December 2017 (30 June 2017: EUR 614.7 million). The ratio of net debt to ordinary operating EBITDA over the last 12 months was stable at 2.2:1 (31 December 2017: 2.2:1, 30 June 2017: 2.6:1).


ImmobilienScout24 (IS24)

(EUR millions)Q2 2018Q2 2017*%
change
H1 2018H1 2017*%
change
Revenue with Residential Real Estate Partners30.228.46.3%59.756.16.4%
Residential Real Estate Partner ARPU, contractual (EUR/month)**   6266161.6%
Revenue with Business Real Estate Partners13.111.811.0%25.623.210.3%
Business Real Estate Partner ARPU, contractual (EUR/month)**   1,5171,35811.7%
Revenue with Private Listers and Others18.519.1(3.1)%36.936.90.0%
Total external revenues61.859.34.2%122.3116.35.2%
Ordinary operating EBITDA43.640.28.5%83.678.46.6%
Ordinary operating EBITDA - margin%70.6%67.8%2.8pp68.4%67.4%1.0pp
* The following change has been implemented compared to the reported 2017 financials: IFRS 15 was applied as of 1 January 2018 and 2017 financials have been restated retrospectively; IFRS 16 is also applied as of 1 January 2018, the 2017 financials have not been restated retrospectively.

** Provided on a half-yearly basis only.


The growth acceleration in external revenues of IS24 compared to the second half of 2017 (in H2 2017 the growth rate stood at 2.4%) is mainly attributable to growth in Revenue with Residential Real Estate Partners and Revenue with Business Real Estate Partners. Revenue with residential real estate partners growth was mostly driven by a growth in the number of Residential Real Estate Partners of 10.2%, marking a continued trend in the real estate partner count. The number of real estate partners had stabilised mid-2017 and has since then continued to increase on the back of low churn rates, as well as high customer win-back and new customer acquisition rates, reflecting high customer satisfaction levels and solid sales force execution. In terms of ARPU development, the trend of high customer win-back and new acquisition rates had a dilutive effect on the overall Residential Real Estate Partner ARPU as the average revenue per customer per month ("ARPU") of the newly gained contractual Residential Real Estate Partners lies significantly below the ARPU of all contractual Residential Real Estate Partners. Thus, Residential Real Estate Partner (contractual) ARPU showed 1.6% growth in H1 2018 to EUR 626 (H1 2017: EUR 616), despite price adjustment measures for existing customers and additional volume through the VIA product range, whereas Residential Real Estate Partner revenue increased by 6.4%. Revenue with Business Real Estate Partners grew by 10.3% compared to the first half of 2017. With a mainly stable number of Business Real Estate Partners basis, the Business Real Estate Partner (contractual) ARPU saw a very positive development and recorded a growth of 11.7% (H1 2018: EUR 1,517, H1 2017: EUR 1,358) on the back of price adjustment measures and additional volume through the VIA product range.

IS24 continued to expand its leading market position during the first half of 2018 and managed to increase its competitive lead in terms of both listings, despite the market trend of decreasing average durations of listings, and traffic share compared to the first half of 2017.


AutoScout24 (AS24)

(EUR millions)Q2 2018Q2 2017%
change
H1 2018H1 2017%
change
Revenue with Dealers in Germany18.416.710.2%36.733.011.2%
ARPU Dealers in Germany (EUR/month)**   2262107.6%
Revenue with Dealers in European Core Countries18.115.119.9%35.429.121.6%
ARPU Dealers in European Core Countries (EUR/month)**   26623115.1%
Revenue with OEM4.93.925.6%8.77.122.5%
Other Revenue3.13.10.0%5.96.00.0%
Total external revenues44.638.815.0%86.775.115.4%
Ordinary operating EBITDA24.219.722.8%43.234.425.6%
Ordinary operating EBITDA - margin %54.3%50.8%3.5pp49.8%45.8%4.0pp
* The following change has been implemented compared to the reported 2017 financials: IFRS 15 was applied as of 1 January 2018 and 2017 financials have been restated retrospectively; IFRS 16 is also applied as of 1 January 2018, the 2017 financials have not been restated retrospectively.

** Provided on a half-yearly basis only.


The AS24 segment is still on a strong growth course, mainly attributable to Revenue with Dealers in both Germany and Dealers in Core European Countries, which now also includes Austria as a core country. As the number of Dealer Partners in Germany and Dealer Partners European Core Countries remained mainly stable throughout the first half of the year, due to already high market penetration, revenue growth was mainly driven by price adjustment measures implemented as well as additional volume through the MIA product range, for example the 360-degree option for car exposés. Thus, AS24 recorded an ARPU growth of 7.6% in Germany and of 15.1% in the European Core Countries (H1 2018: EUR 226 respectively EUR 266, H1 2017: EUR 210 respectively EUR 231). Revenue with OEM of EUR 8.7 million grew by 22.5% compared to the previous year's level of EUR 7.1 million (H1 2017: EUR 6.0 million).

Based on the number of listings, AS24 is still the market leader in Belgium (including Luxembourg), the Netherlands, Italy and Austria. In Germany, AS24 recorded its listings inventory at a constantly high level of more than one million listings per month on average and continues to work towards closing the gap to the closest competitor.


Scout24 Consumer Services (CS)

(EUR million)Q2 2018Q2 2017*%
change
H1 2018H1 2017*%
change
Revenue with Finance Partners10.610.15.0%20.619.17.9%
Services Revenue6.75.619.6%13.511.715.4%
3rd Party Display Revenue4.03.417.6%7.96.816.2%
Total external revenues21.319.210.9%42.037.512.0%
Ordinary operating EBITDA9.07.520.0%15.813.715.3%
Ordinary operating EBITDA - margin %42.3%39.1%3.2pp37.6%36.5%1.1pp
* The following change has been implemented compared to the reported 2017 financials: IFRS 15 was applied as of 1 January 2018 and 2017 financials have been restated retrospectively; IFRS 16 is also applied as of 1 January 2018, the 2017 financials have not been restated retrospectively.


Scout24 Consumer Services ("CS") was established as an independent segment starting 1 January 2018 and is reported starting Q1 2018. It comprises all activities in the area of services along the value chain of the real estate or automobile market and around advertisements from non-real estate or non-automotive-related third parties.

The increase in segment revenues in H1 2018 was mainly driven by Services Revenue and Revenue with Finance Partners. In particular, Services Revenue showed a positive boost on the back of the success of the Premium Membership product. 3rd Party Display Revenue also grew significantly and showed a recovery from a slower first half 2017.


Outlook

Scout24 reported a successful half-year in 2018 with 9.7 % revenue growth and an ordinary operating EBITDA margin of 55.3%, fully in line with the guidance given for financial year 2018 as communicated in the Annual Report 2017 respectively adjusted for the new accounting regulations with the publication of the Q1 2018 statement.

The online advertising outlook in Germany and Europe remains positive as both consumers and customers become increasingly digital. Scout24 is well positioned to benefit from this structural shift due to the market leading positions of its ImmobilienScout24 and AutoScout24 platforms, with both divisions benefiting from the shift of marketing budgets from traditional marketing channels to online. Scout24 Consumer Services takes this trend and the increasing expectations of the partners and users of Scout24 regarding digitisation along the whole process of buying or selling real estate and cars into account. Due to the intensive usage of the marketplaces IS24 and AS24 and also on the back of the synergies between IS24 and AS24, Scout24 is well positioned to further exploit the potential in this area as well and to position Scout24 as a market network around real estate and automotive in Germany and in Europe. The Group's profitable growth is especially driven by revenues from agent and dealer partners and as well by revenues from increasing consumer monetisation along the value chain of real estate or automotive.

The Management is confident that this momentum will continue in the second half 2018 and expects Group revenue to record a growth rate between 9% and 11% for the full year, as previously guided for. Reflecting the scalable nature of the business model, the total cost base should grow at a disproportionally lower rate than revenues. Management anticipates, that total cost base should grow at a lower rate in the second half of 2018 on a full-year comparison and is therefore confident to reach an ordinary operating EBITDA margin between 56.0% and 57.5%.

On the back of the positive development in H1 2018, Management refines its full-year guidance for IS24 and expects IS24 to reach a revenue growth between 5.0% and 6.0% (previous guidance: 4.0% to 6.0%), driven mainly by an ARPU increase of our Residential Real Estate Partners as well as Business Real Estate Partners, as well as on the basis of low churn and stable customer regain and new acquisition rates in H2 2018. For the ordinary operating EBITDA, driven by disproportional lower cost growth, Management expects a slightly higher growth rate. Ordinary operating EBITDA margin should therefore come in at least at 68.0%, as seen already in the first half of 2018 (margin H1 2018: 68.4%).

In H1 2018, revenue in the AS24 segment grew 15.4%, which is in line with the outlook of a revenue growth of around 14% against the previous year. For the second half of 2018, Management remains confident to achieve a revenue growth of this proportion and expects revenues of at least EUR 180.5 million for the full year 2018, based on a continued ARPU increase of our Dealer Partners, especially in Germany, Belgium, the Netherlands, Italy and Austria. Ordinary operating EBITDA-margin was 49.8% in the first half of 2018 and 54.3% in the second quarter 2018. Especially the development in the second quarter confirms Management's confidence that the margin should yield at around 52.0% for the full financial year 2018.

Scout24 Consumer Services recorded 12% higher revenues of EUR 42.0 million for the first half of 2018, which is fully in line with the growth expectations (adjusted for the new accounting regulations) of around 12.0%. Revenue growth was driven mainly by an increased usage of our offerings along the value chains of real estate and automotive, for example mortgage and car financing lead generation, credit checks, Premium Membership as well as sale of display-advertisements. Management expects this development to continue into the second half of 2018, so that a similar revenue growth rate to be achieved. Management is therefore confident to mark revenues of at least EUR 87.0 million for the full year 2018 (Without taking FINANZCHECK.de into consideration). In the first half of 2018, ordinary operating EBITDA-margin stood at 37.6%, a 1.1 percentage point increase compared to the first half of 2017. Management expects this development to continue and confirms the outlook of an increase in ordinary operating EBITDA margin (without taking FINANZCHECK.de into consideration) of at least one percentage point for the financial year 2018.

In the first half of 2018, non-operating cost amounting to EUR 7.8 million occurred. For the full financial year 2018 non-operating cost is expected between EUR 14.5 and EUR 16.5 million, higher than previously guided for, on the basis of higher personnel costs in the first half of 2018 related to share based compensation on the back of the dynamic share price development as well as increased M&A activities.

Management continues to expect capital expenditure for the full financial year 2018 (adjusted for the balance-sheet extension due to IFRS 16) to sum up to around EUR 34.0 million. This includes a non-recurring investment related to the new office space in Munich of around EUR 8.0 million.

On 18 July 2018, Scout24 signed an agreement to acquire all shares of FFG FINANZCHECK Finanzportale GmbH ("FINANZCHECK.de"), a German online comparison portal for consumer loans. A consolidation of FINANZCHECK.de as of 1 September 2018 into the Scout24 Group, which is subject to anti-trust approval anticipated for September 2018, would have the following effects on the outlook described above: Group revenues for financial year 2018 would increase by another around EUR 12 million, bringing the anticipated growth rate to 11.5% to 13.5%. Due to a negative contribution of FINANZCHECK.de of a low single digit Euro million figure to ordinary operating EBITDA, the ordinary operating EBITDA-margin range would be lowered to 54.5% and 56.0% for the full year 2018. Furthermore, additional costs related to post-merger integration would occur.


Conference Call

On Monday, 13 August 2018, 1:00 p.m. CEST, Scout24 will host a conference call and webcast for financial analysts and investors. You may dial in using the following numbers:
DE: +4969222229043
UK: +442030092452
USA: +18554027766
Participant PIN code: 82438614#

The webcast, as well as a replay, will be made available at:
https://webcasts.eqs.com/scout2420180813


Next reporting

Scout24 expects to report results for the first nine months of the 2018 financial year on Wednesday, 7 November 2018.


About Scout24

With our leading digital marketplaces ImmobilienScout24 in Germany and AutoScout24 across Europe we are inspiring people to make their best decisions on finding a home and a car. Additional services, such as credit information, the brokerage of relocation services or construction and car financing, are bundled in the Scout24 Consumer Services business division. More than 1,200 employees are working on the success of our products and services, putting the consumers' needs first in order to create a connected network for living and mobility. Scout24 is listed on the Frankfurt Stock Exchange (ISIN: DE000A12DM80, G24). For further information, please visit www.scout24.com, our Corporate Blog and Tech Blog, or follow us on Twitter and LinkedIn.


Investor Relations

Britta Schmidt
Vice President Investor Relations & Treasury
Tel: +49 89 44456 3278
Email: ir@scout24.com


Media Relations

Jan Flaskamp
Vice President Communications & Marketing
Tel: +49 30 24301 0721
Email: mediarelations@scout24.com


Disclaimer:

All information contained in this document has been carefully prepared. However, no reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability whatsoever is accepted by the Company or any of its directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.

The information contained in this release is subject to amendment, revision and updating. Certain statements, beliefs and opinions in this document are forward-looking, which reflect the Company's or, as appropriate, senior management's current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any information contained in this press release (including forward-looking statements), whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this document.

Scout24 also uses alternative performance measures, not defined by IFRS, to describe the Scout24 Group's results of operations. These should not be viewed in isolation, but treated as supplementary information. The special items used to calculate some alternative performance measures arise from the integration of acquired businesses, restructuring measures, impairments, gains or losses resulting from divestitures and sales of shareholdings, and other material expenses and income that generally do not arise in conjunction with Scout24's ordinary business activities. Alternative performance measures used by Scout24 are defined in the "Glossary" section of Scout24's Group Interim Report 2018 which is available atwww.scout24.com/financial-reports.

Due to rounding, numbers presented throughout this statement may not add up precisely to the totals indicated, and percentages may not precisely reflect the absolute figures for the same reason.

 



13.08.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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