DGAP-News: Scout24 AG / Key word(s): Quarter Results/Quarterly / Interim Statement
Scout24 demonstrates growth and resilience in Q1 2020
Munich / Berlin, 14 May 2020
Scout24 delivered a solid performance in the first quarter of the financial year 2020, increasing its revenue from continuing operations by 5.6 % from EUR 84.4 million to EUR 89.1 million.
Ordinary operating EBITDA from continuing operations amounted to EUR 55.1 million in the reported quarter (Q1 2019: EUR 48.2 million). This represents a growth rate of 14.4 % year-on-year, driven by revenue growth, operating leverage and cost efficiency measures. At 61.8 %, the ordinary operating EBITDA margin from continuing operations was 4.7 percentage points higher than in the previous year (Q1 2019: 57.1 %).
KEY FINANCIAL FIGURES (GROUP, CONTINUING OPERATIONS)
"We had a strong start into the 2020 financial year. The membership migrations initiated at the beginning of the year started with great momentum, as well as the "free-to-list" initiative for certain rental listings. Towards the end of the first quarter, Covid-19 and the associated physical distancing measures affected our customers and consequently also our current trading. In order to support our real estate partners to navigate through the disruptions, we have put in place a comprehensive Covid-19 action programme in March. 31 March 2020 marks the successful closing of the sale of AutoScout24. We can now fully focus on building a comprehensive ecosystem for sale and rent of residential and business real estate in Germany and Austria," says Tobias Hartmann, CEO of Scout24 AG.
"The first quarter of 2020 has again demonstrated the momentum and scalability of our growth strategy. We can be particularly proud of the development of earnings and margins. The effects of the Covid-19 pandemic were still minor in the first quarter. We expect the greatest impact on our business in the second and third quarter. We are in a position of strength and resilience which allows us to "weather the storm". Therefore, we are pleased to reconfirm our plan to return the AutoScout24 transaction proceeds to our shareholders via a 2019 dividend of around EUR 94 million, corresponding to EUR 0.90 per share, and share buybacks of up to EUR 1.69 billion," says Dirk Schmelzer, CFO of Scout24 AG.
The cash and cash equivalents from continuing operations of the Scout24 Group increased to EUR 2,332.3 million as of 31 March 2020 (31 December 2019: EUR 65.6 million). This includes the transaction proceeds (adjusted for provisionally determined net working capital and net debt of the sold entities) in the amount of EUR 2,838.7 million less a sum of EUR 680.0 million for initial debt repayments.
The strongest growth driver in the ImmoScout24 segment was the Residential Real Estate business with a year-on-year revenue growth rate of 7.1%. Contractual revenues with residential real estate partners (including agents, property managers and finance customers) profited both from an increasing number of agents and ARPU growth. While 479 (smaller) new core customers were acquired year-on-year, sales of on-top products and migration to higher tier memberships started with great momentum. Revenues from services for consumers (especially services for property seekers such as credit check and premium membership) also increased significantly until mid-March. Revenues from individual listings ("pay-per-ad" revenues) were down on the previous year. This is primarily due to the "free-to-list" initiative launched at the beginning of the year for rental listings for properties up to EUR 400 net rent and for new rental listings. In April, "free-to-list" was subsequently extended to all listings booked by private individuals as part of the Covid-19 immediate-action programme ("listings plus").
Revenues in the Business Real Estate segment also grew at an above-average rate of 6.4% in the first quarter of 2020, compared to the total revenues of the ImmoScout24 segment. This development was mainly due to strong growth in revenues with project developers and with business real estate core customers. The number of business real estate partners at 2,748 as of 31 March 2020 was slightly lower than in the previous year.
3rd Party Media & Other revenues declined by 6.4 % in the first quarter of the 2020 financial year. The main reason for this was the decline in media business due to market reasons, accelerated by the Covid-19 impact. The subsidiary FlowFact also reported declining revenues due to delayed transition of products into the new cloud solution. ImmoScout24 Austria developed very positively with a growth rate of 12% year-on-year.
The ordinary operating EBITDA of ImmoScout24 increased by 14.8 % year-on-year to EUR 57.5 million (Q1 2019: EUR 50.1 million). This is due to the above-mentioned strong revenue development and efficient cost savings. The ordinary operating EBITDA margin of ImmoScout24 increased to 64.6 % (Q1 2019: 59.4 %) with all of the three segments delivering positive margin expansions.
AutoScout24 was affected earlier and more severely than ImmoScout24 by Covid-19, especially since it also operates marketplaces outside Germany in European core markets. The AutoScout24 business experienced an 11.8% decline in revenues in the first quarter of 2020. In March, first discounts related to Covid-19 were granted, and certain fee-based services were offered free of charge.
The following table provides an overview of the Scout24 Group's key financial figures for the first quarter of the financial year 2020 - for the continuing and discontinued operations according to IFRS 5.
2 The ordinary operating EBITDA margin of a segment is defined as ordinary operating EBITDA as a percentage of external segment revenue.
3 Capital expenditure (adjusted) does not include capital expenditure made due to the application of IFRS 16.
4 Cash contribution is defined as ordinary operating EBITDA less capital expenditure (adjusted).
5 The cash conversion rate is defined as ordinary operating EBITDA less capital expenditure divided by ordinary operating EBITDA.
The full quarterly statement for the first quarter of the financial year 2020 is available at www.scout24.com/Financial-Reports.
Impact of Covid-19
The German Real Estate Market has not been spared from the Covid-19 pandemic. The situation continues to evolve, hence it is too early to measure the precise extent of its impact on the economy in general and on Scout24 in particular. Nevertheless, Scout24 is in a strong and resilient position on the back of its leading market position in a highly attractive market.
The physical distancing measures across Germany since mid-March have temporarily slowed both residential real estate rent and sale transactions. In particular activities like viewings but also notary appointments could not take place at the usual pace. On the construction side, completion of new buildings is expected to continue, but at a reduced level due to delays in the delivery of parts and longer processing times at relevant authorities. The commercial real estate market is experiencing a simultaneous drop in supply and demand. As a partly mitigating effect, the current situation could entail a higher number of sale and rent transactions in the mid-term, especially in the retail segment, albeit possibly at lower prices.
On 20 March 2020, Scout24 has announced it will support its customers - agents and consumers - with a comprehensive immediate-action programme. Recent ImmoScout24 analyses show the success of the programme. By the beginning of May, professional listings were up 3% compared to pre-Covid-19 levels. Private listings increased by more than 20% mainly due to "listings plus". On the demand side, traffic is also picking up with sessions having increased by 7% compared to pre-Covid-19 levels.
Scout24 is highly resilient and well positioned to "weather the storm" together with its customers. Management expects Covid-19 to further catalyse the digitisation of the real estate transaction process, for which Scout24 as the market leader in Germany is well placed to capitalise on.
On 14 May 2020, 3 p.m. CEST, Scout24 will host a conference call and webcast for financial analysts and investors. Dial-in will be under the following numbers:
Via this link, dialled-in participants can follow the presentation slides: https://webcasts.eqs.com/scout2420200514/no-audio
There is also the possibility to follow the conference live on the internet without phone dial-in. Link to the webcast:
A replay of the conference call will be made available at: https://webcasts.eqs.com/scout2420200514
On 18 June, this year's Annual General Meeting of Scout24 AG, which will be purely virtual for the first time, will take place. Shareholders who have duly registered can follow the Annual General Meeting in full in audio and video on the Internet.
On Thursday, 13 August 2020, Scout24 plans to publish the results for the first half-year of the financial year 2020.
Scout24 is one of the leading digital companies in Germany. With ImmoScout24, an online platform for residential and commercial real estate, we successfully bring together owners, realtors, tenants, and buyers to make complex decisions easy - and we have been doing so for more than 20 years. With around 14 million users per month, ImmoScout24 is the market leader for digital real estate marketing and search. To digitise the process of real estate transactions, ImmoScout24 is continually developing new products and building up an ecosystem for renting, buying, and commercial real estate in Germany. Scout24 is a listed stock corporation (ISIN: DE000A12DM80, Ticker: G24) and member of the MDAX. Further information is available on Twitter and LinkedIn. Since 2012, ImmoScout24 has also been active in the Austrian real estate market, reaching around 3 million users monthly.
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, assumptions and other factors that could cause actual results, including but not limited to the Company's financial position or profitability, to differ materially, also adversely, from those expressed or implied by the forward-looking statements. 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 document (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 press release.
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 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 Management Report 2019 which is available at www.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. Information on the quarterly financials has not been subject to audit and is thus preliminary.
14.05.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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