Scout24 AG: Scout24 AG announces record revenue and profit for the financial year 2017 and a positive outlook for 2018 (news with additional features)

Scout24 AG announces record revenue and profit for the financial year 2017 and a positive outlook for 2018

• Robust topline growth with revenues up 8.5% to EUR 479.8 million
• Strong increase in profitability with ordinary operating EBITDA up 12.6% to EUR 252.8 million yielding a margin of 52.7%
• Management and Supervisory Board propose a dividend of EUR 0.56 per share (40% pay-out ratio of adjusted net income)
• Positive outlook: expected revenue growth rate between 9% and 11% to yield a margin between 54.0% and 55.5% in financial year 2018

Berlin / Munich, 28 March 2018 - Scout24 AG ("Scout24" or "the Group"), the leading operator of digital networked marketplaces specialising in the real estate and automotive sectors in Germany and other selected European countries, continued on its path of sustainable and profitable growth in the financial year 2017 with revenues up 8.5% and a 1.9 percentage points higher ordinary operating EBITDA margin compared to the financial year 2016.

According to the audited consolidated financial statements published today, Group revenues for the financial year 2017 increased by 8.5% from EUR 442.1 million to EUR 479.8 million. Group ordinary operating EBITDA was up 12.6% from EUR 224.5 million to EUR 252.8 million, increasing the respective margin from 50.8% to 52.7%. Cash contribution increased by another 12.2%, supporting ongoing financial flexibility and the establishment of a sustainable dividend policy. The leverage ratio was reduced from 2.82 times to 2.22 times net debt to ordinary operating EBITDA of twelve months at the end of the financial year 2017. These figures fully confirm the preliminary financial results published on 13 February 2018.

"2017 was another successful year for Scout24 from both a financial and an operational perspective. We have driven our revenue growth mainly organically. Moreover, we have transformed our company from a pure online classifieds player into a market network around real estate and automotive with value added services along both value chains. This puts us in an excellent position for further growth. Our consumer services initiatives are driving the monetisation of our constantly growing service offering with several innovative products in the pipeline. Thus, we look forward to another year of growth and innovative milestones in 2018," said Greg Ellis, Chief Executive Officer of Scout24 AG.

"In 2017, we have again delivered on our financial targets, partly even exceeding them. Our unique market positioning allows us to continue to leverage synergies between the businesses. We drive monetization via topline growth and margin expansion across all verticals," said 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 fourth quarter and the financial year ended 31 December 2017.

The complete financial statements and management report for the financial year 2017 are available at report.scout24.com/2017.

Business Development and Group results

Our strategy of consistently focusing on users' needs, boosting the listings base, improving service offerings through additional value-added products, as well as our evolution from a pure online classifieds portal to a market network is paying off. The key drivers of the strong results were a solid development in ImmobilienScout24 (IS24) on the back of continued positive momentum in core agent revenues, further growth in AutoScout24 (AS24) through a strong ARPU (average revenue per core dealer per month) expansion and a continued monetisation along the value chains of real estate and automotive driven by the group-wide consumer services initiatives.

The monetisation initiatives around service offerings across the entire real estate selling and rental processes, was further improved and expanded. Overall, on the back of its broad offering, tailored to users' needs, Scout24 managed to cement its position as a market network around real estate and automotive in Germany and Europe.

Based on strong operating leverage and consequently a disproportionately lower growth rate in cost compared to revenues, consolidated ordinary operating EBITDA over the full course of 2017 was up by 12.6% to EUR 252.8 million, representing a 52.7% margin (2016: 50.8%).

Reported Group EBITDA for the financial year 2017 includes EUR 20.0 million of non-operating costs (previous year: EUR 17.8 million). These are mainly attributable to one-off costs in the context of M&A activities as well as higher expenses for the implemented reorganisation measures. Personnel expenses comprise chiefly EUR 7.6 million of expenses in connection with reorganisation measures as well as EUR 3.2 million from share-based compensation deriving from the management equity programs (2014 and 2015 programs, previous year: EUR 4.1 million) and EUR 3.0 million of performance-based remuneration from share purchase agreements (previous year: EUR 2.8 million).

Management Board and Supervisory Board propose to the Annual General Meeting to pay out a dividend of EUR 0.56 per dividend-entitled share, reflecting a pay-out ratio of 40% of adjusted net income (2016: EUR 0.30/share, pay-out ratio 29%). This corresponds to a total distribution of EUR 60.3 million for financial year 2017 (2016: EUR 32.3 million). Based on the share price as of 29 December 2017, this corresponds to a dividend yield of 1.6%.
 

ImmobilienScout24 (IS24)

External revenues in the IS24 segment grew by 5.0% to EUR 298.8 million in the reporting period com-pared with EUR 284.6 million in 2016. As in the previous year, the largest revenue share is attributable to revenues from core agents, which were up by 1.8% to EUR 159.8 million (2016: EUR 156.9 million). This revenue growth was driven by a 7.3% increase in ARPU (average revenue per core agent per month) to EUR 763 for the full 2017 year (2016: EUR 711). After a reduction in the first quarter of 2017 to 17,041 core agents from 17,411 core agents at the end of 2016, the number of core agents stabilised mid-2017, resulting in a slight year-on-year increase to 17,507 as of the end of 2017. The growth in core agent numbers reflects low churn rates, as well high customer winback and new acquisition rates. A better monetisation of our customer base could only partly offset the counter-effect on ARPU growth, deriving from comparably high customer winback and new customer acquisition of core agents with a comparatively lower ARPU. Accordingly, this effect slowed the dynamic of year-on-year ARPU growth, but nevertheless reaching levels within communicated guidance. The monetisation of initiatives in service offerings for consumers along the entire real estate selling and rental process, contributed primarily to the 11.5% growth in the other revenues line to EUR 103.0 million in 2017 (2016: EUR 92.4 million). IS24 further expanded its market position during the financial year elapsed. The overall number of listings as of December 2017 of around 445 thousand listings was at a slightly lower level than in the previous year's comparable period (December 2016: 466 thousand listings). Nevertheless IS24 managed to further improve its market share of listings. The number of listings compared to the next competitor raised from 1.6 times in 2016 to 1.8 times in 2017. Based on extensive content offering, IS24 was able to maintain its leading position in terms of consumer traffic and engagement with an average of 530 million minutes' monthly time spent in 2017 (desktop and mobile, 2.6 times compared to its closest competitor). The average number of sessions per month on the website amounted to 81 million in 2017 (2016: 72 million) and grew by 13% whereas - driven by our "mobile-first" approach - the average number of sessions via mobile devices was up by 20%. The average number of visits via mobile devices meanwhile account for 74% of total sessions (69% in 2016).
 

AutoScout24 (AS24)

External revenues in the AS24 segment were up 15.2% increase compared to the 2016 financial year. This dynamic development primarily reflects a strong increase in revenues from core dealers in Germany, which were up by 18.5% and in revenues from core dealers in Benelux/Italy, which grew by 18.6%. Better monetisation of the existing dealer base and correspondingly a strong ARPU growth (average revenue per core dealer per month) comprised the main driver of this growth. This uplift in ARPU is attributable to price increases that have been implemented for basic contracts as well as rising penetration of visibility products. In Germany, ARPU increased by 9.0% to EUR 217 in comparison with the full 2016 year (EUR 199). The number of core dealers in Germany increased by 7.3% to 26,209 as of 31 December 2017 (31 December 2016: 24,421), despite existing high market penetration, ARPU in Benelux/Italy grew faster than in Germany at 14.2%, with ARPU for the full 2017 year amounting to EUR 257, compared with EUR 225 in the full 2016 year. The number of core dealers in Benelux/Italy rose by 0.8% to 18,892 as of 31 December 2017. Revenues from other dealers (EUR 15.0 million compared with EUR 13.6 million in 2016), report 10.3% growth, including revenues of EUR 1.0 million from Gebrauchtwagen.at, which was acquired in August 2017 and bolstered the market positioning of the AutoScout24 Group in Austria. In 2017, AS24 recorded in Germany a listing inventory at a constantly high level of more than one million listings per month, with 1,180 thousand listings on average (compared with 1,243 thousand listings in the January to December 2016 period). Moreover, AS24 successfully defended its market leadership based on numbers of listings in Belgium (including Luxembourg), the Netherlands and Italy, and significantly expanded its market position in Austria. Driven by further mobile functionality enhancements to improve consumer experience and customer usability, mobile sessions in Germany increased to 65% of total sessions up on a year-average basis in 2017 (2016: 63%). The average share of visits via mobile devices in relation to total visits in Belgium, the Netherlands and Italy was up from 63% to 70% over the same period.

Outlook

The trend in ordinary operating EBITDA reflects the success of Scout24's overall strategy with a focus on sustainable and profitable revenue growth. In 2017, the 8.5% increase in revenues was mainly driven organically. Based on margin quality, strong cash contribution, solid balance sheet structure and good leverage ratio, Scout24 is in an outstanding position to progress the transformation of the Company from a provider of digital classifieds portals to a sector-leading provider of digital networked marketplaces, as well as to further grow profitability. Moreover, Scout24 continued to successfully advance the realignment of its organisation and promoted the leveraging of synergies across the Group.

The Management Board is therefore confident that the Group's growth momentum will continue in 2018. Specifically, Group revenues are expected to record a growth rate between 9% and 11% while the cost base should grow at a disproportionally lower rate, based on the scalable nature of the business model. The Management Board therefore expects ordinary operating EBITDA margin to yield between 54.0% and 55.5%.

Total non-operating costs are expected to amount to between EUR 8.0 million to EUR 11.0 million. This will include approximately EUR 1.0 million related to the office relocation in Munich. We expect non-recurring costs, mainly in the context of post-merger integration, of around EUR 3.5 million. Additionally, we expect EUR 3.0 million for share-based compensation for the programs launched in 2014, 2015 and 2016. We expect non-recurring charges related to reorganisations shall not to exceed EUR 3.0 million.

Capital expenditure is expected to sum up to around EUR 34.0 million, including a non-recurring investment of EUR 8.0 million into the new office space in Munich. The expected increase in other investments compared to 2017 is mainly driven by increased investment into product development fostering future growth across all three verticals.

Based on the increasing importance of our Scout24 Consumer Services unit, the management board of Scout24, has decided to change the internal management and the reporting structure and system of the Group starting 2018. Thus, starting with January 2018 the operating segments according to IFRS 8 consist of "ImmobilienScout24", "AutoScout24" and "Scout24 Consumer Services". The Scout24 Consumer Services segment will subsume all activities relating to services provided along the value chain of car buying or real estate buying or renting process and to non-real estate and non-automotive third-party display advertising, primarily reported in the ImmobilienScout24, AutoScout24 and Other segments.

Reconciliation of 2017 results key indicators to new reporting structure

If the new reporting structure had already been applied in 2017, the key indicators by segment would have been as follows:

In particular, the Management Board expects IS24 to achieve a revenue growth rate between 4% and 6%. As in previous years, underlying costs are expected to grow at a disproportionately lower rate than revenues. Thus, the ordinary operating EBITDA is expected to grow at a slightly higher rate than revenues, yielding an expected ordinary operating EBITDA margin of at least 67.0%.

For AS24 the Management Board targets to reach revenues of at least EUR 185.0 million in 2018. Driven by the operating leverage the ordinary operating EBITDA is expected to grow at a higher rate and ordinary operating EBITDA margin is expected at least at 50.0%.

Revenues at Scout24 Consumer Services are expected to reach approximately EUR 90.0 million in 2018. The Management Board expects Scout24 Consumer Services to increase profitability with the ordinary operating EBITDA margin is forecast to rise by at least one percentage point.

Conference Call

On Wednesday, 28 March 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:
scout280318-live.audio-webcast.com
 

Next events and reporting

Scout24 expects to report results for the first quarter of the 2017 financial year on Tuesday, 8 May 2018.

The Annual General Meeting of Scout24 AG will take place on Thursday, 21 June 2018 in Munich.
 

New business address

On 19 March 2018, the Scout24 AG Headquarters, Munich, was relocated to the new office premises of Bothestrasse 11-15, 81675 Munich.
 

About Scout24

With our leading digital marketplaces ImmobilienScout24 and AutoScout24 in Germany and across Europe we are inspiring people to make their best decisions on finding a home and a car. More than 1,000 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 & Controlling
Fon: +49 89 44456 3278
Email: [email protected]
 

Media Relations

Jan Flaskamp
Vice President Communications & Marketing
Fon: +49 30 24301 0721
Email: [email protected]
 

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 Annual Report 2017 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.