Scout24 AG: Scout24 AG announces record 2015 results and strong outlook for 2016

Press Release

Scout24 AG announces record 2015 results and strong outlook for 2016

- 14.0% increase in Group revenues to EUR 393.6 million in 2015

- 27.6% increase in ordinary operating EBITDA to EUR 189.6 million

- 26.8% increase in cash contribution supports robust deleveraging profile

- Positive outlook for the financial year 2016: double-digit revenue growth and disproportionate increase in earnings

Berlin / Munich, 30 March 2016 - Scout24 AG ("Scout24" or "the Group"), the leading operator of digital marketplaces specializing in the real estate and automotive sectors in Germany and other selected European countries, announces its full year results for the year ended December 31, 2015.

According to the audited consolidated financial statements published today, Group revenues for the financial year 2015 increased by 14.0% to EUR 393.6 million. Group ordinary operating EBITDA was up 27.6% to EUR 189.6 million, representing an uplift in margin of 5.2 percentage points to 48.2%. Furthermore, despite increased capital expenditures, cash contribution increased by 26.8%, further reducing leverage to 3.74x ordinary operating EBITDA. These figures fully confirm the preliminary financial results published on February 15, 2016. Scout24's strong performance was driven by both core businesses, ImmobilienScout24 ("IS24") and AutoScout24 ("AS24").

"2015 was our most successful financial year. By streamlining the business around our core verticals, IS24 and AS24, and a renewed focus on execution, we have laid the foundations for sustainable and profitable revenue growth. We are developing from a market place to a market network while anticipating the needs of our customers, as both consumers and customers become increasingly digital, driving the growth of the online advertising market in Germany and Europe. With our market leading platforms we are well-positioned at Scout24 to benefit from this continuous structural shift of marketing budgets from traditional marketing channels to online", said Greg Ellis, Chief Executive Officer of Scout24 AG, commenting on the future growth prospects.
Overview of Financial Results

The table below provides a summary overview of the Group's performance for the fourth quarter and the financial year ended December 31, 2015. Given the Group's complex financial history, to facilitate year-over-year comparisons and to better represent business trends, additional, voluntary disclosure has been provided for the full year ended December 31, 2014. This is based on the sum of financials from Scout24 Holding GmbH financial statements for the period January 1, 2014 to March 31, 2014 and Asa NewCo GmbH (now: Scout24 AG) financial statements for the period April 1, 2014 to December 31, 2014.

The complete financial statements and management report for the financial year 2015 is available at www.scout24.com/en/Investor-Relations/Financial-Publications/Financial-Reports/Financial-reports.aspx.

Business Development

Last year's strategic review and the resulting focus on the core market-leading businesses - IS24 and AS24 - as well as the implementation of the "OneScout24" approach in the course of 2015, are paying off. Scout24 continues on its growth path and has reached significant operating milestones in external revenues and ordinary operating EBITDA, mainly driven by the introduction of the membership model in IS24, increasing customer numbers in AS24, selected acquisitions that strengthen Scout24's value chain proposition as well as continuous focus on operational efficiencies, cost optimisation and generation of synergies.

ImmobilienScout24 (IS24)

External revenues for IS24 accelerated in the reporting period, recording an increase of 15.3% compared to the full 2014 year. This increase was mainly driven by growth in revenues from core agents, benefiting from the introduction of the membership model since October 2014, as well as rising revenues from consumer services. By the end of December 2015, IS24 had reached a membership penetration of 76.4% among the approximately 90% of core agents targeted for migration to the membership model in 2015. Consequently, core agent ARPU (average revenue per agent) in the 2015 financial year increased to EUR 602 (up 17.5% from the previous year). The average number of core agents decreased by 970 to 20,724 as a result of agents going out of business, smaller agents shifting to the professional pay-per-ad model and churn. The introduction of the membership model and regulatory changes in Germany that now require the landlord to pay the agent ("Bestellerprinzip") commission caused some business closures. Despite the reduction in agent numbers, IS24's proposition to both consumers and customers remaind intact, total number of listings on the IS24 platform remained broadly stable with approximately 504 thousand listings as per December 2015 (December 2014: 503 thousand listings). Importantly, IS24 has increased its listing market share versus its closest competitor (from 1.0x to 1.4x). IS24 maintained a strong competitive lead in consumer traffic and engagement (3.1x vs. closest competitor). Total traffic grew by 13.5% to 64 million visits in December 2015 (compared to 56 million visits in December 2014). Concurrently, driven by the mobile-first approach, mobile traffic increased by 26.7% with mobile traffic in December 2015 now representing 68.5% of the total traffic (December 2014: 61.4%).

AutoScout24 (AS24)

External revenues for AS24 accelerated significantly with an increase of 13.0% compared to the full 2014 year. In Germany, the average number of core dealers grew by 12.8% to 22,298 with an increase in core dealer ARPU (average revenue per core dealer) of 7.8% to EUR 171 compared to the full 2014 year. Following the strategy to focus on listings leadership through enhancing consumer user-friendliness with a revamped mobile offering as well as the continuous execution of the dealer acquisition strategy over the last twelve months, AS24 has managed to increase the number of listings to 1,206 thousand (December 2014: 1,063 thousand), and consequently almost closed the inventory gap to its main competitor in Germany, having 0.98 times the number of listings as per December 2015 (December 2014: 0.86 times). Driven by the enhancements in the mobile functionality, the mobile visits in Germany increased to 55.4% of total visits in December 2015 (December 2014:41.8% of total visits). Since its acquisition in April 2015, easyautosale GmbH, Munich ("easyautosale") added a total EUR 1.4 million of revenues in the 2015 financial year.

Benelux and Italy performed strongly with the rollout of the "MIA"-products suite (products to enhance visibility and to support brand and image building similar to the VIA products in IS24) driving a healthy core dealer ARPU increase of 9.5% to EUR 177. The overall number of core dealers further grew by 6.4% and AS24 extended its market leadership based on the number of listings in Belgium (including Luxembourg), the Netherlands and Italy. Total mobile visits in Benelux and Italy grew by 63.2% and accounted for 58.9% of total visits in December 2015 (December 2014: 43.2% of total visits).

Group

Reported Group EBITDA for the financial year 2015 was affected by IPO costs of EUR 5.5 million and additional non-operating costs of EUR 17.1 million, but was still up EUR 79.6 million compared to the EBITDA for the full year 2014, reaching EUR 166.9 million. The non-operating costs in the 2015 financial year not related to the IPO comprise mainly costs with regards to the re-organization and restructuring started in 2014, as well as to the refinancing in April 2015. Moreover, cost of EUR 3.6 million resulted from an accounting effect related to share-based compensation. The Group's ordinary operating EBITDA improved by 27.6% to EUR 189.6 million, while the ordinary operating EBITDA margin increased to 48.2% compared to 43.0% in the full 2014 year. Consolidated reported net profit was EUR 56.9 million in the 2015 financial year (short financial year 2014: EUR -20.2 million), resulting in earnings per share of EUR 0.56 (short financial year 2014: EUR -1.20).

Outlook

2015 was a landmark year in Scout24's history with a renewed focus on execution and several strategic initiatives to help streamline the business around its core IS24 and AS24 verticals and position it on a steady growth track. This momentum has carried over to 2016 where year-to-date operating performance has been strong. The Management Board is therefore confident that the Group's growth momentum will continue throughout the remainder of the year and that it can meet market expectations for the financial year 2016. Specifically Group revenues are expected to record a low double-digit percentage growth rate. Reflecting the scalable nature of the business model, the cost base should grow at a disproportionally lower rate than revenues and the Management Board therefore expects the ordinary operating EBITDA margin to come in between 49.5% and 50.5%.

In particular, the Management Board expects IS24 to achieve a high single to a low double-digit percentage revenue growth rate in the financial year 2016 as well as an increase in ordinary operating EBITDA margin from 59.7% in 2015 to between 60.5% and 61.5%. The forecast is based on a similar ARPU growth as 2015 and some continued decline in core agent numbers as a result of the "Bestellerprinzip" and the ongoing transition to the membership model. The Management Board also expects increasing revenues from private listings and strong growth in consumer monetization revenues.

At AS24, the Management Board expects revenues to grow organically at a similar rate as in 2015 and ordinary operating EBITDA margin to expand further by a few percentage points. Especially, the Management Board sees further growth in the number of core dealers driven by the intensified acquisition of medium sized and smaller dealers across its key geographies. Moreover, the recent acquisition of European AutoTrader B.V., Amsterdam ("Autotrader") is expected to contribute revenues of around EUR 6 million.

For 2016, the Management Board expects total non-operating costs to amount to approximately EUR 14.5 million. These will include approximately EUR 4.5 million of share-based compensation and around EUR 2.0 million from a share purchase agreement. Furthermore the Management Board expects a non-recurring restructuring charge of approximately EUR 5.0 million and additional EUR 3.0 million of post-merger integration expenses for the recent Autotrader acquisition in the Netherlands. Capital expenditure is forecast to be slightly lower than in 2015.

Conference Call

On Wednesday, March 30, 2016, 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:
scout300316-live.audio-webcast.com

Next reporting

Scout24 expects to report results for the first quarter of the 2016 financial year on Wednesday, May, 11 2016

About Scout24

Scout24 operates leading digital classifieds platforms in Germany and other selected European countries. The main operations under the umbrella brand Scout24 are the digital marketplaces ImmobilienScout24 and AutoScout24. ImmobilienScout24 is the leading digital real estate classifieds platform in Germany, based on consumer traffic and time spent as well as customer numbers and listings. AutoScout24 is a leading automotive digital classifieds platform in Europe, in terms of unique monthly visitors and listings. Scout24's digital marketplaces are empowering people to realise their property and car-owning dreams simply, efficiently and stress-free. Further information is available at www.scout24.com.

Investor Relations contact

Britta Schmidt
Vice President Investor Relations & Treasury
Tel.: +49 89 44456 3278
Email: [email protected]

Press contact

Svenja Lahrmann
Instinctif Partners
Tel.: +49 221 42075 23
Email: [email protected]

Disclaimer:

This document has been issued by Scout24 AG (the "Company" and, together with its direct and indirect subsidiaries, the "Group")) and does not constitute or form part of and should not be construed as any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision, nor does it constitute a recommendation regarding the securities of the Company or any present or future member of the Group.

The information contained in this press 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.