DGAP-News: Scout24 AG reports a successful first quarter 2018 with strong top- and bottom-line growth

Scout24 AG reports a successful first quarter 2018 with strong top- and bottom-line growth

• Double-digit revenue growth of 10.3% to EUR 123.4 million
• Ordinary operating EBITDA-margin of 51.6%
• Well on track to achieve full year 2018 targets

 

Berlin / Munich, 08 May 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, successfully concluded the first quarter of 2018 with strong growth in revenues and profitability.

According to the unaudited consolidated financial statements published today, Group revenues for the first quarter 2018 increased by 10.3% from EUR 111.9 million to EUR 123.4 million. Group ordinary operating EBITDA was up 12.7% from EUR 56.5 million to EUR 63.7 million, increasing the respective margin from 50.5% to 51.6%. Cash contribution (excluding capital expenditure incurred due to the first-time application of IFRS 16 in Q1 2018) increased by 6.3% to EUR 55.7 million (Q1 2017: EUR 52.4 million), highlighting the Group's strong cash generation capabilities.

"The results of the first quarter 2018 show we are well on track to achieve the targets, we have communicated to the market on our Capital Markets Day last November and reiterated with our Annual Report 2017. We not only recorded a strong top- and bottom-line growth, but as well further improved our financial position with the first issue of a Schuldschein in March 2018," 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 first quarter ended 31 March 2018.

(EUR millions)	Q1 2018	Q1 2017*	% change
External revenues	123.4	111.9	10.3%
IS24	60.5	57.1	6.0%
AS24	42.2	36.3	16.1%
CS	20.7	18.4	12.6%
Ordinary operating EBITDA1	63.7	56.5	12.7%
IS24	39.6	38.1	3.8%
AS24	18.9	14.8	28.1%
CS	6.7	6.2	7.6%
Ordinary operating EBITDA-margin- in %1	51.6%	50.5%	1.1pp
IS24	65.4%	66.8%	(1.4)pp
AS24	44.9%	40.7%	4.2pp
CS	32.3%	33.8%	(1.5)pp
EBITDA2	60.8	53.3	14.1%
Capital expenditure (adjusted)5	8.0	4.1	95.3%
Cash contribution3	55.75	52.4	6.3%
Cash conversion4	88%5	93%	(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. For more details, please refer to the quarterly statement available at www.scout24.com/financial-reports.

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 amounts to EUR 41.0 million in Q1 2018.

The quarterly statement including financial statements is available at www.scout24.com/financial-reports.

Business Development and Group results

Scout24 successfully started the year 2018 on the back of continued positive momentum in the ImmobilienScout24 ("IS24") segment, as well as sustainable growth in the AutoScout24 ("AS24") and Consumer Services ("CS") segments.

According to the unaudited consolidated financial statements, Group revenues for the first three months ended 31 March 2018 increased by 10.3% to EUR 123.4 million (Q1 2017: EUR 111.9 million).
The Group's ordinary operating EBITDA improved by 12.7% to EUR 63.7 million (Q1 2017: EUR 56.5 million), yielding a margin of 51.6% (Q1 2017: 50.5%). Adjusted by effects arising from the application of IFRS 16 the increase was 10.0%. Reported Group EBITDA for the first quarter 2018 was up EUR 7.5 million compared to the first quarter 2017, reaching EUR 60.8 million (Q1 2017: EUR 53.3 million). It included non-operating costs of EUR 2.9 million, which essentially consisted of costs related to post-merger integration as well as personnel expenses. Personnel expenses mainly relate to share-based compensation and to a lesser extent to reorganisational measures implemented. Moreover, non-operating costs included some EUR 0.4 million related to the relocation of the Munich office in March 2018. The non-operating costs were offset by an extraordinary income for the sale of the trade mark "JobScout24" Switzerland in the amount of ERUR 1.6 million. Consolidated reported net profit for the period was EUR 30.2 million (Q1 2017: EUR 24.2 million), resulting in basic earnings per share of EUR 0.28 (Q1 2017: EUR 0.23).

Cash contribution (excluding capital expenditure incurred due to the first-time application of IFRS 16 in Q1 2018) increased by 6.3% to EUR 55.7 million (Q1 2017: EUR 52.4 million), highlighting the Group's strong cash generation capabilities. Cash Conversion, relative to ordinary operating EBITDA and excluding capital expenditure incurred due to the first-time application of IFRS 16 in Q1 2018, for the first quarter of 2018 was slightly down to 88% compared to the first quarter in 2017 (93%), due to extraordinary capital expenditure related to the office relocation in March 2018 of EUR 2.7 million as well as the positive impact on ordinary operating EBITDA due to application of IFRS 16 (Q1 2018 adjusted: 94%). Cash and cash equivalents amounted to EUR 58.0 million as of 31 March 2018 (31 March 2017: EUR 73.9 million). This includes the cash inflow of EUR 215,0 million from the first Schuldschein loan issue of Scout24 AG as well as the cash outflow of EUR 250,0 million from an early repayment towards the existing bank loan at the end of March 2018. Total net financial debt therefore amounted to EUR 564.9 million, leading to a leverage (ratio of net debt to ordinary operating EBITDA of the last twelve months) of 2.2:1, respectively of 2.0:1 excluding impact from IFRS 16 adoption (31 December 2017: 2.2:1).

Overall, with Q1 2018 revenue growth rate of 10.3% and ordinary operating EBITDA-margin standing at 51.6%, the Group is well on track to achieve the targets as communicated within the Annual Report 2017, respectively adapted for the new accounting regulations IFRS 9, IFRS 15 and IFRS16 respectively (revenue growth between 9.0% and 11.0 %, ordinary operating EBITDA-margin between 56.0% and 57.5%).
 

ImmobilienScout24 (IS24)

External revenues in the IS24 segment grew by 6.0% to EUR 60.5 million in the reporting period compared to EUR 57.1 in the first quarter of 2017. The strong growth acceleration in the first quarter 2018 (Q4 2017 year-on-year revenue growth was 3.5%) is mainly attributable to Revenue with residential real estate partners and Revenue with business real estate partners. Revenue with residential real estate partners continued on its path of sequential growth quarter on quarter, showing an acceleration compared to the fourth quarter 2017 as well as a strong year-on-year growth compared to the first quarter 2017. Revenue with business real estate partners also showed a strong year-on-year development, as expected with a slightly less dynamic acceleration than Revenues with residential real estate partners. After stabilising in mid-2017, the residential and business real estate partner count has increased steadily since then driven by low churn, high win-back and new acquisition rates. Both revenue lines are therefore well on track to meet expectations for the full year. Revenue with private listers and others grew as well in line with expectations in the first quarter 2018 compared to the first quarter of 2017. The segment's profitability, in terms of ordinary operating EBITDA-margin, of 65.4% is slightly below the previous year's level (Q1 2017: 66.8%, adjusted for effects from IFRS 16 68.1%) and reflects investments in product innovation as well as timing of marketing investments.

Due to its superior content, IS24 maintained its strong competitive lead in listings share as well as consumer traffic and engagement in the first quarter of 2018.

The segment is well on track to achieve the targets as communicated in the Annual Report 2017 and as adjusted to reflect the adoption of new IFRS standards, with Q1 2018 revenue growth rate being at the upper end of the communicated range (revenue growth between 4.0% to 6.0%, ordinary operating EBITDA-margin of at least 68.0%).
 

AutoScout24 (AS24)

External revenues in the AS24 segment increased by 16.1% to EUR 42.2 million in the first quarter of 2018 compared to the first quarter of 2017 (Q1 2017: EUR 36.3 million). This continued dynamic development is mainly attributable to Revenues from Dealers in both Germany and the core European countries, which now also includes Austria as a core country. Both revenue lines are benefitting from the successful implementation of pricing as well as the gradual introduction of the 360-degree product tier in the European Countries and are therefore well on track to meet full year growth expectations of mid-teens revenue growth rates. The number of dealer partners in Germany and in the core European countries remained mainly stable compared to the end of Q4 2017. Revenue with OEM as well as Other revenues developed as well in line with expectations in the first quarter of 2018. The segment's profitability as measured by the ordinary operating EBITDA-margin, increased year-on-year by 4.2 percentage points, reaching 44.9% in the first quarter of 2018 (Q1 2017: 40.7%, adjusted for effects from IFRS 16: 41.6%).

AS24 sustained its content leadership positions in Belgium, Netherlands, Italy and Austria with regards to general classifieds and automotive classified competitors and continued to work on closing the gap towards its competitor in Germany.

The segment is well on track to achieve the management expectations as communicated in the Annual Report 2017 and as adjusted to reflect the adoption of new IFRS standards (revenue of at least EUR 180.5 million, around 52.0% ordinary operating EBITDA-margin).
 

Scout24 Consumer Services (CS)

Scout24 Consumer Services ("CS") was established as an independent segment starting 1 January 2018 and is reported for the first time 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 segment recorded external revenues of EUR 20.7 million in the first quarter of 2018, an increase of 12.6% compared to the first quarter of 2017 (Q1 2017: EUR 18.4 million). The increase was mainly driven by Services revenues and Revenues with Finance partners, both showing solid growth in the first quarter of 2018. Third party display revenues showed a solid development compared to the first quarter of the previous year. The profitability of the CS segment in terms of ordinary operating EBITDA-margin came in at 32.3%, a slight year-on-year decrease driven by timing of investments in marketing (Q1 2017: 33.8%, adjusted for effects from IFRS 16: 34.4%).

Thus, the CS segment is well on track to achieve the targets communicated within the Annual Report 2017 and as adjusted to reflect the adoption of new IFRS standards (revenues to come in at around EUR 87.0 million, ordinary operating EBITDA-margin to increase by at least one percentage point).

Adjustments in financial statements and Company outlook due to new accounting regulations

Scout24 is applying the following new IFRS standards as of 1 January 2018: IFRS 9, IFRS 15 and IFRS 16, whereas for IFRS 15 the retrospective method is applied, therefore consequently the comparable period is presented in accordance with IFRS 15 as well. Details of the adjustments are lined out in the quarterly statement.

By applying the new accounting regulations IFRS 9, IFRS 15 and IFRS 16 respectively, the Group is adapting the outlook given for financial year 2018 to reflect the changes in reporting starting Q1 2018.

On a Group level, the Management Board expects a revenue growth rate between 9.0% and 11.0%, unchanged to the expectations as given in the Annual Report 2017. Given the application of the retrospective method for IFRS 15, the 2017 financials are reflecting the lower starting base, the application of IFRS 15 does not have an impact on the underlying operational growth trajectory.

Based on the reduced revenues and therefore increasing ordinary operating EBITDA-margin due to the application of IFRS 15, as well as the positive effect on ordinary operating EBITDA and ordinary operating EBITDA-margin due to the application of IFRS 16, the ordinary operating EBITDA-margin is now expected between 56.0% and 57.5% (compared to 54.0% to 55.5% prior to the adjustment).

The outlook for non-operating costs is unchanged and expected to amount to between EUR 8.0 and EUR 11.0 million.

Capital expenditure excluding capital expenditures due to the first-time application of IFRS 16 is still expected at around EUR 34.0 million. The application of IFRS 16 results in a balance sheet extension and thus additional capital expenditure of EUR 41.0 million.

Conference Call

On Tuesday, 8 May 2018, 2:00 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/scout2420180508
 

Next events and reporting

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. 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 & Controlling
Fon: +49 89 44456 3278
Email: ir@scout24.com

Media Relations

Jan Flaskamp
Vice President Communications & Marketing
Fon: +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 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. Information on quarterly financials have not been subject to audit and are thus preliminary.