DGAP-News: Scout24 AG continues on its growth path with strong cash conversion cementing its solid financial position

Scout24 AG continues on its growth path with strong cash conversion cementing its solid financial position

- 11.4% increase in Group revenues to EUR 110.5 million

- Continued improvement in profitability with ordinary operating EBITDA margin up to 52.7%

- Fast balance sheet deleveraging due to 23.9% increase in cash contribution

- Fully on track to achieve 2016 targets

Berlin / Munich, 9 November 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 results for the third quarter of the financial year 2016.

According to the unaudited consolidated financial statements, Group revenues for the third quarter 2016 increased by 11.4% to EUR 110.5 million (Q3 2015: EUR 99.2 million). Group ordinary operating EBITDA was up 18.5% to EUR 58.2 million, representing a margin of 52.7%. Furthermore, cash contribution increased by a 23.9%, once again demonstrating the Group's strong cash generating capabilities.

"Scout24 achieved strong topline and profitability growth. We further cemented our strong financial position by making another EUR 60 million voluntary repayment towards the existing syndicated loan, yet maintaining financial flexibility", 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 nine months and the third quarter ended September 30, 2016.

Key Financial Highlights

(EUR millions)	Q3 2016	Q3 2015	% change	9M 2016	9M 2015	% change
External revenues	110.5	99.2	11.4%	326.3	288.4	13.1%
IS24	71.3	67.9	5.0%	211.5	197.0	7.4%
AS24	37.8	30.0	26.0%	110.5	87.4	26.5%
Ordinary operating EBITDA1	58.2	49.1	18.5%	167.6	144.6	15.9%
IS24	45.6	41.0	11.2%	133.5	119.2	12.0%
AS24	17.7	11.2	58.0%	47.5	34.9	36.1%
Ordinary operating EBITDA-margin	52.7%	49.5%	3.2pp	51.4%	50.1%	1.3pp
IS24	64.0%	60.4%	3.6pp	63.1%	60.5%	2.6pp
AS24	46.8%	37.3%	9.5pp	43.0%	39.9%	3.1pp
EBITDA2	53.9	40.9	31.8%	153.6	125.7	22.2%
IS24	40.9	38.8	5.4%	120.3	112.1	7.3%
AS24	15.8	10.1	56.4%	41.9	31.7	32.2%
Capital expenditure	4.1	5.5	(25.5)%	13.7	13.8	(0.7)%
Cash contribution3	54.0	43.6	23.9%	153.9	130.8	17.7%
Cash conversion4	92.9%	88.8%	4.1pp	91.8%	90.5%	1.3pp

 

¹ Ordinary operating EBITDA represents EBITDA adjusted for non-operating and special effects, 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.
⁴ Cash conversion is defined as ordinary operating EBITDA less capital expenditure divided by ordinary operating EBITDA.

The quarterly statement including financial statements and additional details on segment level is available at www.scout24.com/financial-reports.

Business Development

Group

Scout24 continued to perform strongly in the quarter, driven by the ongoing success of the visibility products at AutoScout24 ("AS24"), a consistent expansion of service activities for users through Scout24 Media and a strong focus on executing on its sales strategy.

Ordinary operating EBITDA in the third quarter 2016 was up by 18.5% compared with the third quarter 2015 to reach EUR 58.2 million. Ordinary operating EBITDA margin increased by 3.2pp to 52.7%.

Reported Group EBITDA for the third quarter 2016 was up EUR 13.0 million compared to the third quarter 2015, reaching EUR 53.9 million. This includes EUR 4.3 million of non-operating costs (Q3 2015: EUR 8.2 million), reflecting EUR 2.4 million of personnel expenses connected with reorganisation measures (Q3 2015: EUR 3.1 million), EUR 1.1 million for the Management Equity Program, EUR 0.6 million of obligations from purchase agreements and EUR 0.2 million of costs connected with corporate acquisitions. Consolidated net income attributable to parent company owners amounted to EUR 19.5 million in the reporting period (Q3 2015: EUR 8.4 million), which corresponds to EUR 0.18 of earnings per share (Q3 2015: EUR 0.08).

The cash contribution in the third quarter of 2016 was up by EUR 10.4 million (23.9%) compared with the same period last year. The Cash Conversion Rate, based on ordinary operating EBITDA, increased to 92.9%. Cash and cash equivalents amounted to EUR 53.4 million as of September 30, 2016 including the cash outflow for voluntary prepayments of the existing syndicated loan in a total amount of EUR 100.0 million in the course of 2016 and for the purchase price of European AutoTrader B.V. in an amount of EUR 27.7 million in Q1 2016 (December 31, 2015: EUR 70.6 million). Net financial debt (nominal value of interest bearing liabilities less cash and cash equivalents) amounted to EUR 627.9 million, compared with EUR 711.3 million as of December 31, 2015. The ratio of net debt to ordinary operating EBITDA over the last 12 months was reduced to 2.95:1 (December 31, 2015: 3.74:1).

ImmobilienScout24 (IS24)

(EUR millions)	Q3 2016	Q3 2015	% change	9M 2016	9M 2015	% change
Revenue from core agents (Germany)	39.2	38.0	3.2%	117.1	110.9	5.6%
Revenue from other agents	8.9	8.3	7.2%	26.3	25.3	4.0%
Other revenues	23.2	21.6	7.4%	68.1	60.7	12.2%
Total external revenues	71.3	67.9	5.0%	211.5	197.0	7.4%
Ordinary operating EBITDA	45.6	41.0	11.2%	133.5	119.2	12.0%
Ordinary operating EBITDA - margin %	64.0%	60.4%	3.6pp	63.1%	60.5%	2.6pp
EBITDA	40.9	38.8	5.4%	120.3	112.1	7.3%
Capital expenditure	2.6	2.9	(10.3)%	7.7	7.6	1.3%

 

Revenues from core agents increased by 3.2% to EUR 39.2 million driven by a solid ARPU (average revenue per core agent) increase offsetting decreasing core agent numbers. The number of core agents decreased by 2,672 compared with September 2015 from 20,041 to 17,369 at end of September 2016 as a result of churn and partially shift to our main competitors, smaller agents shifting to the professional pay-per-ad model, as well as agents going out of business following the introduction of the so-called "Bestellerprinzip" in June 2015 and market conditions in Germany. The core agent decline decelerated in Q3 2016 compared with previous quarters, driven by a solid increase in our customer regain rate and new customer acquisitions. The revenues from other agents increased by 7.2% driven by an increase in professional pay-per-ad revenues and the real estate marketplaces in Austria. Other revenues increased by 7.4% to EUR 23.2 million in the third quarter of 2016 (Q3 2015: EUR 21.6 million), mainly due to consumer monetization initiatives driven by the cross-Group function Scout24 Media. The private listings revenues remained mainly flat in the third quarter 2016 compared to the same period in 2015.

Due to its superior content, IS24 maintained a strong competitive lead in listings share as well as consumer traffic and engagement in the third quarter of 2016.

AutoScout24 (AS24)

(EUR millions)	Q3 2016	Q3 2015	% change	9M 2016	9M 2015	% change
Revenue from core dealers (Germany)	14.0	11.2	25.0%	40.7	31.2	30.4%
Revenue from core dealers (Benelux/Italy)	12.6	9.1	38.5%	36.1	26.4	36.7%
Revenue from other dealers	3.5	2.9	20.7%	10.2	8.5	20.0%
Other revenues	7.8	6.8	14.7%	23.5	21.3	10.3%
Total external revenues	37.8	30.0	26.0%	110.5	87.4	26.4%
Ordinary operating EBITDA	17.7	11.2	58.0%	47.5	34.9	36.1%
Ordinary operating EBITDA -margin %	46.8%	37.3%	9.5pp	43.0%	39.9%	3.1pp
EBITDA	15.8	10.1	56.4%	41.9	31.7	32.2%
Capital expenditure	1.3	2.5	(48.0)%	5.6	5.9	(5.1)%

 

External revenues for AS24 accelerated significantly again with an increase of 26.0% compared to the third quarter 2015. Revenues from core dealers in Germany increased by 25.0% to EUR 14.0 million on the back of an increase in core dealer ARPU (average revenue per core dealer) driven by the roll-out of the visibility products and an ongoing expansion of the core dealer base. Benelux and Italy equally performed strongly with revenues from core dealers increasing by 38.5% to EUR 12.6 million. The increase is driven by strong ARPU growth fueled by the roll-out of the visibility products combined with a moderate growth in dealer locations. AutoTrader.nl, acquired in February 2016, contributed EUR 1.5 million to revenue during the third quarter, with EUR 1.3 million being attributable to revenue from core dealers. Other revenues benefit from a solid growth in display advertising revenues.

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

Outlook

The business development of Scout24 Group in the third quarter 2016 was in line with the Management Board's expectations and Scout24 is therefore highly confident to reach the targets for the financial year 2016 communicated on August 11, 2016. For details, please refer to our Interim Report for the first half of 2016, which is available at the Investor Relations Section of www.scout24.com. Scout24 will provide an outlook for 2017 at its Full Year 2016 results in March 2017.

Conference Call

On Wednesday, November 9, 2016, 2:00 p.m. CET, 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:
http://scout091116-live.audio-webcast.com

Next events and reportings

Scout24 expects to report preliminary results for the full financial year 2016 on Monday, February 13, 2017.
The Annual Report for the full financial year 2016 will be published on Wednesday, March 29, 2017 together with a conference call and webcast for financial analysts and investors.

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

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

Media Relations

Marie Fabiunke
Head of Corporate Communications & PR
Fon: +49 30 24301 1427
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.