Scout24 SE

XETRA:G24

Earnings Call Transcript 2021-Q4

[Operator]

Good day and welcome to the Scout24

Preliminary

Full

Year

2021

Results

Call.

Today's

conference

is

being

recorded.

At

this

time,

I

would

like

to

turn

the

conference

over

to

Ursula

Querette.

Please

go

ahead,

ma'am.

[Ursula Querette]

Welcome

everyone

to

Scout24's

preliminary

2021

results

call.

My

name

is

Ursula

Querette

and

I

am

Head

of

Investor

Relations

and

Treasury

at

Scout24.

As

usual,

we

have

Tobias

Hartmann,

our

CEO

on

this

call.

Tobi

will

kick

off

the

presentation.

Dirk

Schmelzer,

our

CFO

will

present

our

Q4

and

full-year

financials.

We

will

conclude

the

call

with

a

Q&A

session.

Please

note

that

all

numbers

presented

here

today

are

preliminary

and

still

under

review

by

our

auditors.

The

final

numbers

with audit

certificate

will

be

published

with

the

Annual

Report

on

March 24.

The

new

segment

numbers

for

2021

and

2020

are

for

information

only

and

will

remain

unaudited.

We

tried

to

be

as

transparent

as

possible

and

included

a

detailed

table

in

the

appendix

of

the

presentation.

The

official

start

of

the

new

segment

reporting

is

Q1

2022.

You

can

find

today's

presentation

on

our

website

under

Financial

Reports

and

Presentations.

If

you

are

using

the

web

link

we

provided

beforehand,

you

can

also

follow

the

presentation

live.

This

session

will

be

recorded

and

a

replay

will

be

made

available

as

quickly

as

possible

after

the

event.

Let

us

now

turn

to

page

3

where

I

hand it

over

to

Tobi.

[Tobias Hartmann]

Thank

you, Ursula

and

welcome

everyone.

This

morning

we

published

our

preliminary

results

with

a

slightly

higher-than-expected

full-year

revenue

number

of

€389

million

and

an

ordinary

operating

EBITDA

of

€223

million.

This

results

in

a

margin

of

57.3%,

which

is

fully

in

line

with

the

guidance

range

of

57%

to

58%.

We

are

very

pleased

with

the

strong

Q4

momentum,

not

only

in

terms

of

growth,

but

also

in

terms

of

proof

points

for

our

next

level

strategy.

I

will

come

to

that

on

the

next

slide.

The

growth

rates

on

this

page

speak

for

themselves.

While

our

revenue

grew

by

10%

and

our

ordinary

operating

EBITDA

by

5%

year-on-year,

we

saw

12%

and

6%

growth

for

revenue

and

ordinary

operating

EBITDA

in

Q4

respectively.

The

growth

momentum

in

the

year

2021

and

Q4

in

particular

clearly

evidence

the

potential

of

our

next

level

growth

roadmap

which

we

shared

in

detail

during

our

CMD

in

December

2021.

On

page

4, we

break down

our

2021

revenue

growth

by

the

main

drivers

under

the

new

segment

structure.

Now

let's

start

with

our

core

business.

Memberships

with

both

residential

and

commercial

agents,

although

the

commercial

business

still

affected

by

COVID-19

only

remained

stable,

the

total

membership

revenue

grew

by

4.8%

year-on-year,

with

an

acceleration

in

Q4

on

the

back

of

various

upselling

and

pricing

initiatives

for

our

residential

customers.

Now,

let

me

remind

you

that

membership

upgrades

and

pricing

represent

the

first

of

five

value

drivers

we

shared

at

the

CMD. We

told you

in

December that

we

expect a CAGR

of

4%

to

6%

for

the

respective

professional

membership

revenues

in

the

next

years.

So

2021

was

already

on

target

in

that

respect.

The

core

membership

business

is

complemented

by

our

well-established

seller

leads

business.

We

presented

this

as

value

driver

number

2

at

our

CMD.

While

the

88%

year-on-year

revenue

growth

is

impacted

by

inorganic

effects,

the

Q4

growth

rate

of

46%

is

purely

organic.

Hence

clear

evidence

for

the

significant

growth

opportunity

of

the

seller

leads

business

and

reason

why

we

are,

as

communicated

at

the

CMD,

directing

increased

investments

into

this.

In

total,

we

sold

over

100,000

seller

leads

to

agents

through

our RLE

product

in

2021,

resulting

in

an

average

revenue

per

lead

of

€210.

On

top

of

that,

we

participated

in

the

conclusion

of

around

1,500

real

estate

sale

transactions

in

Germany

at

an

average

revenue

per

transaction

of

over

€7,000

through

our

immoverkauf24

product.

The

third

element

on

the

right-hand

side

of

this

slide

and

value

driver

number

4

is

our

Plus

product

business.

At

the

end

of

2021,

we

stood

at

almost

250,000

plus

subscribers

and

hence

doubled

the

number

of

MieterPlus

and KäuferPlus

customers

within

one

year.

Since

the

CMD,

we

have

received

several

questions

about

the

growth

recipe

behind

this

specific

value

driver.

The

answer

is,

besides

the

longer

duration

enhanced

customer

lifetime

of

these

products,

we

invested

in

more

traffic

and

increased

the

payroll

and

conversion

efficiency

of

the

products.

The

depiction

on

page

5

should

be

familiar

to

you.

We

have

used

it

for

some

time

now

to

show

how we

are

diversifying

our

revenue

base

towards

transaction-based

revenue

streams.

So

while

the

core,

our

value

driver

number

one,

remains

strong,

listing

PPA

revenues

increasingly

replaced

by

leads

and

private

subscription

revenues.

These

represented

already

nearly

30%

of

total

revenues

in

2021

versus

18%

and

23%

in

2019

and

2020

respectively.

As

I

said

before,

Q4

added

additional

momentum

to

our

full-year

performance

and

consequently

also

to

this

revenue

mix

shift.

With

the

growth

strategy

presented

at

the CMD,

we

estimate

that

by

2026

about

50%

of

our

revenues

will

come

from

the

products

behind

value

drivers

2

to

5,

meaning

transaction-based

and

private

subscription

revenues.

Let us

now

take

a

closer

look

at

the

key

performance

metrics

in

Q4

on

page

6.

Our

group

revenue

grew

by

11.7%

to

€101.9

million

when

comparing

Q4 2021

with

Q4 2020.

The

main

growth

driver

was

our

Residential

Real

Estate

segment

with

a

revenue

increase

of

16.6%.

The

ordinary

operating

EBITDA

increased

by

6.3%

to

€58.1 million.

This

under

proportionate

growth

compared

to

revenue

is

in

line

with

our

guidance.

It

reflects

the

higher

cost

base,

which

temporarily

comes

with

the

next

level

implementation

of

our

transaction-based

strategy.

So

just

like

the

revenue

acceleration

proof

points

I

showed

you

two

slides

before,

the

ooEBITDA

development

is

evidence

of

our

growth

roadmap

gaining

momentum.

By

the

way,

without

the

strategic

bolt-on

acquisitions

such

as

immoverkauf24

and

Vermietet.de,

our

ooEBITDA

would

have

grown

by

almost

9%.

Due

to

the

strong

demand for

the

Realtor

Lead

Engine

and

the

membership

upselling

and

pricing

measures

I

mentioned

before,

the

ARPU

of

the

residential

real

estate

partners

increased

by

8.4%

to

€777

in

Q4.

This

is

all

the

more

impressive,

considering

that

listing

numbers

were

decreasing

in

a

very

tight

market

with

a

significant

shortage

of

supply.

Separately,

once

again,

we

were

able

to

grow

our

professional

customer

base

by

3.5%

to

20,711

customers.

Concerning

traffic,

we

continue

to

see

clear

shift

from

desktop

to

app

usage

supported

by

our

respective

app

download

campaigns.

So

while

the

desktop

traffic

declined

by

11%

in

Q4,

we

saw

a

strong

increase

in

monthly

app

users

by

38%

to

4.5

million

users.

Let

me

sum

it

up

with

page

number

7,

we

are

delivering

on

our

next

level

growth

roadmap.

Our

core

membership

business

representing

value

driver

1

increased

by

4.8%

and

5%

in

our

full-year

and

quarterly

comparison

respectively.

This

is

exactly

in

line

with

our

CMD

growth

outlook

of

what

we

are

expecting

in

the

next

couple

of

years.

So,

ticking

the

box,

on

track.

On

top

of

that,

there

are

network

effects

from

our

seller

leads

business,

value

driver

2.

Pure

organic

Q4

growth

of

46%

is

well

above

the

targeted

average

growth

rate,

with

a

range

of

30%

to

40%,

tick,

on

track.

We

also

ticked

the

mortgage

box,

i.e.

value

driver

3.

In

Q4,

we

managed

to

improve

the

lead

quality

and

lead

generation

so

that

we

delivered

30%

growth

with

the

MLE

business

alone

compared

to

13%

for

the

full

year.

On

top

of

that

will

come

first

revenues

from

our

new

mortgage

transaction

business

this

year.

Value

driver

4,

increased

Plus

subscribers.

Within

one

year

we

managed

to

double

the

number

of

Plus

subscribers

to

reach

circa

250,000

at

the

end

of

2021.

Hence,

we

already

made

a

large

step

towards

the

goal

of

400,000

subscribers

which

we

want

to

reach

by

2026.

Ticking

the

box

for

value

driver

4,

on

track.

Total

private

subscription

revenues,

including

a

small

portion

coming

from Vermietet.de

in

2021,

grew

by

54.6%

and

76%

for

the

full-year

and

Q4

respectively.

The

full-year

absolute

number

of

€39.4

million

is

therefore

the

basis

for

the

expected

CAGR

of

26%

to

28%

until

2026,

which

includes

value

drivers

4

and

5.

We

hope

this

helps

you

better

contextualize

the

CMD

strategy.

I

now

leave

it

to

Dirk

to

dive

deeper

into

what

we

delivered

financially

in

2021.

Dirk,

over

to

you.

[Dirk Schmelzer]

Thank

you, Tobi

and

welcome. Slide

7 (sic) [8] (00:11:55)

shows

the

old

segment

view

for

quarter

four

only.

As

Tobi

already

mentioned,

the

Residential

Real

Estate

revenue

increased

by

16.6%

in

the

Q4

year-on-year

comparison.

This

growth

was

driven

by

our

revenue

with

agents,

which

grew

by

11.6%,

strongly

supported

by

our

seller

leads

business.

Revenue

with

consumers

increased

even

more

by

28.8%

in

the

Q4

comparison.

This

is

due

to

the

high

demand

for

our

Plus

Products,

while

private

PPA

remains

stable

year-on-year.

The

ordinary

operating

EBITDA

margin

of

the

Residential

Real

Estate

segment

came

in

at

59.5%

for

Q4 2021,

which

is

3.1

percentage

points

below

previous

year.

This

is

due

to

the

investment

into

our

next

level

growth

roadmap,

which

are

mainly

product

and

marketing

driven

and

of

temporary

nature

at

this

magnitude.

The

Business Real

Estate

segment

revenue

is

still

affected

by

the

pandemic,

resulting

in

a

stable

revenue

development

with

€17.5

million

for

the

fourth

quarter

2021,

a

slightly

increasing

revenue

with

developers

and

new

homebuilders

compensated

for

the

declining

revenue

with

commercial

real

estate

agents

due

to

a

decreasing

pay-per-ad

business.

The

ordinary

operating

EBITDA

margin

of

the

Business

Real

Estate

segment

came

in

at

69.9%.

The

Media &

Other

segment

revenue

decreased

slightly

by

1.4%

in

Q4.

While

the

ImmoScout24

Austria

business

grew

strongly

by

19.4%,

FLOWFACT

recorded

a

declining

revenue

due

to

the

ongoing

conversion

to

a

SaaS-based

payment

model

and

the increased

integration

of

the

product

into

our

core

business

with

agent

memberships.

The

third-party

media

business

contracted

due

to

the

market

and

pandemic

related

factors.

Since

August

2021,

the

newly

acquired

Propstack

also

contributed

to

the

Media

&

Other

revenue

development

with

its

cloud-based

CRM

product

for

smaller

agents.

The

ordinary

operating

EBITDA

margin

for

the

Media

&

Other

segment

fell

by

3.4

percentage

points

to

32%.

Tobi

already

mentioned

the

continued

customer

growth

and

the

ARPU

increase.

Page

8

gives

you

the

customary

quarterly

and

year-to-date

overview

by

segment.

The

Residential

ARPU

increased

by

8.4%

in

Q4

is

driven

by

the

growing

Realtor Lead

Engine

revenues,

and

membership

upselling

and

pricing

initiatives.

At

the

same

time

the

growing

residential

agent

base

created

downward

pressure

as

it

mostly

applies

to

smaller

agents.

The

business

Real

Estate

ARPU

and

the

number

of

respective

customers

changed

only

slightly,

so

no

regrowth

to

report

here

as

the

segment

is

still

suffering

from

the

pandemic.

Slide

10

is

now

presented

in

our

new

reporting

logic

and

well

reflects

what

Tobi

said

at

the

beginning

of

the

call.

Our

Q4

growth

accelerated

on

the

back

of

the

five

value

drivers

we

presented

at

the

CMD,

hence

underpinning

that

we

are

fully

on

track

to

achieve

our

targets.

The

9%

revenue

growth

in

the

Professional

segment

is

based

on

a

strong

core

membership

business

with

additional

tailwinds

from

seller leads

and

enhanced

mortgage lead

business.

With

the transition

to

the

new

segment

structure,

we

took

the

opportunity

to

allocate

our

holding

revenue

and

cost

to

the

three

segments,

respectively.

While

the previous

holding

revenue

went

to

Media

&

Other,

the

largest

cost

portion

went

to

the

Professional

segment.

Including

those

holding

cost,

the

ordinary

operating

EBITDA

margin

of

the

Professional

segment

came

in

at

63.5%.

The

Private

segment

showed

a

revenue

growth

of

25.1%

in

Q4,

strongly

backed

by

the

private

subscription

revenues,

which

grew

by

76%

including

from

EBITDA

while

Private

PPA

slightly

declined.

The

ordinary

operating

EBITDA

margin

of

the

Private

segment

including

the

allocated

holding

cost

was

at

48%

in

Q4

2021.

This

margin

reflects

the

selling

cost

for

the

integrated

credit

check,

which

comes

with

the

Plus

products.

It

also

reflects

the

investments

into Vermietet.de.

Apart

from

the

integration

of

holding

revenues

and

costs,

the

Media

&

Other

segment

is

unchanged

in

relation

to

the

old

segment

structure.

Let's

turn

to

page

11

and

to

the

ARPUs

of

the

new

segments.

As

a

reminder,

the

professional

subscription

ARPU

takes

into

account

the

residential

and

commercial

core

membership

revenues,

and

the

revenue

from

seller

leads

such

as

Realtor

Lead

Engine

and

immoverkauf24

leads,

all

divided

by

the

number

of

professional

customers.

These

customers

include

our

core

customers

and

those

immoverkauf24

agents

who

concluded

a

transaction

in

the

respective

period.

Concerning

the

Q4

professional

ARPU

which

is

free

of

inorganic

effects,

we

see

an

increase

of

6.4%

year-on-year

from

€920

to

€979.

You

can

very

well

see

the

effect

of

the

increasing

customer

base

here.

So

while the

absolute

professional

subscription

revenue

increased

by

9.6%,

the

underlying

ARPU

increases

at

a

lower

pace,

so

you

might

want

to

keep

this

in

mind

in

a

peer

group

ARPU

comparison.

Let's

have

a

look

at

the

private

subscription

ARPU

now.

Here,

the

customer

growth

effect

is

much

more

substantial

and

here,

we

also

have

a

minor

inorganic

effect as Vermietet.de

was

not

yet

part

of

the

group

in

Q4

2020.

So

while

private

subscription revenues

from

the

Plus

products

and

Vermietet.de

increased

by

76%

in

Q4

and

customers

increased

over

proportionate

by

95%

at

the

same

time,

the

ARPU

came

down

10%.

This

reflects

that

the

new

customers

pay

lower

monthly

subscriptions,

mainly

because

they

subscribe

to

longer

periods.

And

the

good

news

is

the

customer

lifetime

value

is

increasing,

which

is

in

line

with

what

we

want

to

achieve.

Turning

to

page

12,

let

us

go

through

the

main

ordinary

operating

items

affecting

our

margin

development

and

I

will

focus

on

the

full-year

developments

and

the

temporary

growth

investment

that

we

see

here.

Own

work

capitalized

increased

by

21%

to

€26.6

million

in

2021.

This

translates

into

a

capitalization

ratio

of

6.8%,

which

is

above

our

target

ratio

of

around

6%.

This

has

mainly

to

do

with

capitalized

project

developments

from

Vermietet.de,

which

come

on

top

of

the

other

accelerated

product

innovation

efforts.

However,

I

expect

that

by

the

end

of

2022

the

capitalization

ratio

will

be

near

our

target

again.

Personnel

cost

increased

by

15.7%

mainly

due

to

the

integration

of

Vermietet.de

and

immoverkauf24

employees

and

an

increased

staff

base

at

ImmoScout24.

As

a

recurring

topic

from

the

last

quarters,

the

higher

marketing

expenses

mainly

reflect

our

ambition

to

generate

valuable

homeowner

contacts

through

search

engine

optimization,

search

engine

advertising

and

performance

marketing.

With

these

leads,

our

agent

customers

can

digitally

accelerate

their

mandate

acquisition

efforts,

eventually

leading

to

more

transactions.

Our

marketing

expenses

increased

by

16.8%

to

€36.3

million

in

the

year-on-year

comparison.

This

also

includes

expenses

for

TV

and

online

advertising.

The

year-on-year

growth

in

selling

cost

by

63.6%

to

€26.6

million

results

from

the

increasing

third-party

SCHUFA

purchase

cost,

which

comes

with

a

successful

growth

of

Plus

products.

The

2021

selling

costs

also

reflect

the

accelerated

acquisition

of

leads

from

cooperation

partners.

Putting

all

together,

we

get

to

a

5%

higher

ordinary

operating

EBITDA

of

€222.8

million

in

2021.

The

resulting

margin

is

57.3%

mid

of

our

guidance

range.

Let's

turn

to

page

13,

where

you

see

the

items

below

the

ordinary

operating

EBITDA.

First

point

to

mention

here,

non-operating

cost

increased

by

€7.9

million

to

€22 million

in

2021.

The

strong

increase

is

mainly

due

to

€5.3

million

higher

M&A

costs

and

higher

share-based

compensation

by

€3.7

million.

The

latter

has

to

do

with

adjusted

assessments

within

the

LTIP

2018

and

the

launch

of

a

new

long-term

incentive

program

in

2021.

This

leads to

a

reported

EBITDA

of

€200.8 million

in

2021

which

is

1.3%

higher

than

the

year

before.

Second

point

to

note,

depreciation

and

amortization

increased

by

22.5%

to

€63.1

million,

of

which

€33.3

million

are

attributable

to

purchase

price

allocation.

The

largest

part

of

this,

namely

€30.3

million

represents

the

final

depreciation

installment

for

the

ImmoScout24

customer

base

which

is

now

fully

depreciated.

The

year-on-year

increase

in

D&A

was

mainly

due

to

the

following:

first,

higher

depreciation

on

rates

of

use

from

leases

due

to

the

move

to

the

new

Berlin

office

at

the

end

of

2020;

second,

higher

depreciation

on

own work

capitalized;

and

third,

an

impairment

of

€5.1

million

on

the

FLOWFACT

trademark.

As

the

CRM

system

is

more

and more

integrated

into

our

ImmoScout24core

membership

business

and

revenue

generation

in

the

SaaS-based

payment

model

takes

longer

than

expected.

With

a

quite

stable

financial

result

and

higher

taxes

on

income,

the

reported

net

income

decreased

by

11.6%.

However,

based

on

a

significantly

lower

average

number

of

shares

of

88.1

million

compared

to

102.2

million

the

year

before,

the

earnings

per

share

increased

by

3%

to

€1.03.

Adjusted

for

the

non-operating

effects

I

mentioned

before,

the

PPA

amortization

and

FLOWFACT

impairment

and

for

some

minor

AutoScout-related

effects

in

the

financial

results,

the

earnings

per

share

would

amount

to

€1.52

in

2021,

compared

to

€1.24

the

year

before,

therefore

a

highly

accretive

development

for

our

shareholders.

The

decreasing

number

of

shares

I

just

mentioned

is

well-depicted

on

the

next

slide

14.

What

you

see here

is

the

development

of our

outstanding

shares

and

treasury

shares

in

the

context

of

various

share

buybacks

we

conducted

over

the

last

two

years.

Including

the

latest

€200

million buyback

program

completed

mid-February,

we

have

repurchased

€1.8

billion

worth

of

shares.

The

number

of outstanding

shares

after

buybacks

depicted

in

black

in

the

graph

forms

the

relevant

base

for

calculating

the

EPS.

The

volume

of

up

to

10%

of

our

total

share

capital

which

we

can

hold

in

treasury

shares

is

reflected

by

the

orange

portion

in

the

graph.

Such treasury shares

have

been

canceled

resulting

in

capital

decreases

in

December

2020

after

the

public

tender

transaction

in

April

2021

and

in

November

2021.

In

our

ad-hoc

notification

yesterday,

we

announced

another

capital

decrease

by

3.4

million

shares.

So

as

of

now,

our

share

capital

stands

at

80.2

million

shares. After

completion

of

the

next

buyback

program,

which

we

also

announced

yesterday,

there

is

another

cancellation

on

the

horizon.

So

let's

turn

to

page 15.

On

this

page,

I'm

giving

you

more

detail

on

our

upcoming

share

buyback

plans.

As

outlined

at

the

Capital

Markets

Day,

we

have

set

ourselves

a

target

leverage

of

about

zero

times

net

debt

over

ordinary

operating

EBITDA.

To

put this

into

context,

this

number

is

well

in

line

with

key

peers

in

the

real

estate

and

other

online

classified

area.

In

order

to

achieve

this

target,

we

will

continue

to

distribute

cash

to

our

shareholders

via

share

buybacks.

The

new buyback

program

announced

yesterday

will

have

a

total

volume

of

up

to

€350

million, which

is

the

biggest

since

the

public

tender

offer

one

year

ago.

Based

on

current

stock

market

prices,

this

corresponds

to

more

than

8%

of

our

reduced

share

capital.

The

program

is

planned

to

start

within

the

next

days

and

should

be

completed

at

the

very

latest

before

the

Annual

General

Meeting

in

2023.

If

we

apply

the

zero

leverage

metric

to

our

highly

cash

generative

business,

this

could

well

lead

into

further

share

buybacks

in

the

next

years

of

an

average

of

around

€150

million. Of

course,

this

is

subject

to

value-accretive

M&A

opportunities

which

may

arise.

So,

we

are

complementing

our

attractive

next

level

growth

roadmap

with

an

attractive

recurring

share

buyback

strategy.

Let me

conclude

our

presentation

on

page

16

by

reiterating

our

outlook

for

2022

and

beyond.

I

think

we

made

it

clear

with

the

proof

points

of

our

Q4

results,

we

are

very

confident

that

with

our

next-level

growth

roadmap,

we

will

deliver

attractive,

recurring

double-digit

growth

in

the

coming

years

per

our

CMD

guidance.

This

will

be

supported

by

the

five

value

drivers

we

presented

at

the

Capital

Markets

Day

and

mentioned

again

today.

So

for

2022,

we

are

expecting

a

group

revenue

growth

of

11% to

12%.

As

mentioned

before,

the

year

2022

is

a

year

of

temporarily

increased

growth

investment,

hence

we

plan

for

only

moderate

group

ordinary

operating

EBITDA

growth

of

6%

to

8%

for

this

year.

Starting

2023,

we

will

see

a

meaningful

acceleration

of

this

EBITDA

growth

to

a

recurring

level

of

13%

annually.

With

this,

let

me

open

the

floor

for

your

questions.

Operator,

over

to

you.

[Operator]

Thank

you.

[Operator Instructions]



And

our

first

question

is

coming

from

Christopher

Johnen

from

HSBC.

[Christopher Johnen, Analyst, HSBC Trinkaus & Burkhardt AG]

Yes.

Thanks,

everyone

for

taking

my

questions.

Two,

if

I

may.

First,

more

generally

on

inflation,

I

mean,

I'm

looking

at

your

membership

revenue

pricing

target

4%

to

6%

as

an

average

until

2026.

Now,

when

the

targets

were

set,

inflation in

Germany

was

arguably

a

little bit

lesser

issue

than

it

is

today.

So,

we're

talking

about

5%

inflation.

And

that

begs

the

question

do

you

think

you

have

a

bit

more

wiggle

room

looking

at

this

year

and maybe

also

next

year

to

be

a

bit

more

pushy

on

the

membership

side,

given

that

inflation

is

as

high

as

it

is.

That'll

be my

first

question.

[Tobias Hartmann]

Hi,

Chris.

This is

Tobi.

Thank

you

very

much.

You're

absolutely

right.

We

will

monitor

things

as

they

play

out.

On

the

membership

part,

as

you

probably

figured,

we've

tried

several

things

even

before

the

inflationary

impact

what's

the

right

pricing

for

which

group,

for

which

subscriptions

and

so

forth.

We

don't

think

that

longer-term

inflation

will have

a

meaningful

impact

as

of

yet.

So,

there's

nothing

that we've

planned

specifically

for

now,

but

we

will

keep

monitoring

things

and

obviously

it

will

have

an

impact

then on

the

house

pricing

and

real estate

prices,

which

should

be

rather

positive

for

our

membership

teams.

But

yes,

good

point.

Thank

you.

[Christopher Johnen, Analyst, HSBC Trinkaus & Burkhardt AG]

Great.

Then

the

second

question

on

the

shape

of

2022,

I'm

just

thinking

in

terms

of

the

EBITDA

guidance

for

the

current

year.

I

mean,

how

should

we

think

in

terms

of

the

phasing

of

the

investments

that

you've

mentioned.

Will

H1

be

a

bit

more

difficult

given,

I

don't

know,

ramp-up

in

sales

on

the

lead

side,

things

like

that?

Or

how

do

you

see

the

different

parts

of

the

year

phasing

out

with

respect

to

investment

versus

margins?

[Dirk Schmelzer]

Yeah.

Thanks,

Chris.

This

is

Dirk.

On

phasing,

I

would

suggest

that

you

will

see

a

very

strong

quarter

for

this

year,

as

you've

seen

in

2021.

And

calculating

backwards

from

that,

I

think

quarters

two

and

three

will

be

rather

investment

quarters.

And

as

we're

looking

at

the

numbers

that

the

current

quarter

one

is

delivering,

we're

quite

optimistic

with

the

development

of

the

business

and

how

this

is

flowing

through.

So,

I

would

think

to

sum

it

up,

quarter

two

and

quarter

three

will

be

rather

investment-heavy,

and

quarter

one

and

quarter

four

will

be

going

through

[indiscernible]



(00:29:27).

[Christopher Johnen, Analyst, HSBC Trinkaus & Burkhardt AG]

Perfect.

That's

very

helpful.

Thanks,

guys.

[Operator]

We

will

now

take

the

next

question

from

Miriam

Josiah

from

Morgan

Stanley.

[Miriam Josiah, Analyst, Morgan Stanley & Co. International Plc]

Great.

Great

afternoon, everyone,

and

thanks

for

the

opportunity

to

take

questions.

Firstly,

just

on

the

lead

products.

I

guess at

the

end

of

the

year,

you

sort

of

delivered

a

better

number

than

your

previous

guidance,

particularly

on

IV24,

so

– and

that's

both

in

terms

of

the

volume

and

then

also

the

average

revenue

per

transaction.

So,

could

you

talk

a

bit

about

what

is

driving

that,

has

there

been

any

change

in

terms

of

the

response

from

agents

towards

these

products

and

perhaps

if

you

could give

us

some

guidance

on

sort

of

the

number

of

leads

that

you're

expecting

to

do

this

year

under

the

Realtor

Lead

Engine

and

IV24?

And

then

secondly,

just

on

the

cost

side,

just

wondering

if

anything

has

changed

in

the

last

couple

of

months

in

terms

of

your

expectations

versus

when

you set

guidance,

any

particular

or

additional

areas

of concerns.

And

then

finally,

if

you

could

just

talk

a

bit

about

what

you're

thinking

the

outlook

for

the

housing

market

looks

like

this

year

in

terms

of

transactions,

house

prices

and

also

what

you're

expecting

to

happen

to

listing

volumes?

Thanks.

[Dirk Schmelzer]

Thanks,

Miriam.

Let

me

start

with

your

first

question,

which

is

the

lead

numbers. We

had

a

few

spillover

effects

from

December

to

January. So

basically,

2021

played

out

as

we

wanted

to.

We

saw

a

slight

uptick

on

the

overall

lead

value

that

we

delivered

and

the

commission split

revenues

we achieved.

You

might

see

that

we

are

now

in

the

area

of

around

about

€7,000

here,

so

getting

tick

more

than

40%

of

the

commission

share

which

makes

us

quite

optimistic.

On

the

overall

lead

volume

that

we

are

planning

for

this

year,

we're

sticking

to

what

we

said

at

the Capital

Markets

Day;

you're going

to

see

a

significant

growth

here,

20%

to

30%

that

we

are

trading

through

the

[indiscernible]



(00:31:27)

platform

and

overall

30%

to

40%

CAGR

on

the

specific

lead

business.

Nothing

changes

on

that

side.

We're

executing

as

we

are

speaking.

On

the

cost

side, thanks

for

the

question,

we've

been

looking

at

the

obvious

candidates

here.

Energy

prices

which

we

locked

in

for

more

than

the

next

12 months

in

our

last

negotiations,

so

nothing

to

expect

from

that

side.

Also

most

license

contracts

that

we

have

and

specifically

the

more

spend-heavy

ones

to

name

AWS,

for

example and

the

cloud

provider

here

are

long-term

for

the

next four

years,

so

no

changes

on

that.

And

also

on

the

personnel

cost

side,

we

don't

see

big

issues

here

as

we

can

balance

quite

nicely

between

external

and

internal

cost.

And

lastly

on

some

of

the

marketing

spend

in

Google Ad

services,

we're

not

expecting

any

big

changes

here,

so

nothing

to

add

on

that

and

no

risk

from

our

side

on

that.

The

housing

market

I

would

hand

over

to

Tobi.

We're

still

seeing

quite

healthy

numbers

here.

But

Tobi,

if

you

want

to add

something

with regards

to

that

housing

market

development

in

2022...

[Tobias Hartmann]

Yeah.

[Dirk Schmelzer]

...and

our

expectations.

[Tobias Hartmann]

Yeah.

So

for

the

housing

market

for

the

residential

parts,

we're

going

to

talk

about

the

top

seven

cities

for

new

and

residential

homes,

we

think

anywhere

between

6%

to

11%,

maybe

6%

to

12%

price

increase

that

we

will

see.

With

regards

to

listings

development,

we

have

to

really

watch

and

see

how

it

plays

out

with

the

current

supply

chain

issues

that

we're

currently

facing

already

which

puts

an additional

pressure

on

any

planned

new

units.

But

we

don't

see

any

major

change

of

the

situation

from

what

we're

currently

experiencing. So

overall, still

a

lot

of

pressure we'll

be

expecting on a housing

market.

[Miriam Josiah, Analyst, Morgan Stanley & Co. International Plc]

Great. Thank

you.

[Tobias Hartmann]

Thank

you.

[Operator]

We

will

now take

the

next

question

from

Lisa

Yang

from

Goldman

Sachs.

[Lisa Yang, Analyst, Goldman Sachs International]

Good afternoon.

Thanks

for

taking

my

question.

I

just

want

to

follow

up

on

the

earlier

question

on

the

phasing

of

top

line

growth

and

cost

growth.

Is

it

fair to

say

that

based

on

your

comment,

we

should

assume

Q1,

Q4

margin

this

year

higher

than

the

consensus

average

you

have

I think

65%

for

the

full

year

and

then

Q2,

Q3

below

55%?

Is

that

the

way

to

think

about

it?

And

could

you

also

give

us

a

bit

more

detail

in

terms

of

what

is

driving

the

higher

cost

growth

in

Q2,

Q3

and

why

do

you

think

that

that's

not

going

to

impact the

recurring

in

Q4?

That's

the

first

question.

The

second

one

is

on

the

competitive

landscape,

we

see

quite

a

few

changes,

I

mean

the

numbers

from

[indiscernible]



(00:34:31)

were

pretty

strong

as

well. So

I'm

just

wondering

like

if

you

can

comment

on

any

change

expected

behavior

from

[indiscernible]



(00:34:42),

anything

you've been

doing

on

pricing

or

discounting

or

marketing,

that'll

be

helpful.

And

the

third

question

is

on

the

buyback.

Could

you

maybe

just

give us

a

bit

more

detail

in

terms

of

how

you

think

about

implementing

the

buyback

this

year

and

just

sort of

limitations

and

I

think

depleting

issue.

So,

yeah,

just

wondering

like

how

you

think

about

the

phasing

of

the

€300

million

spending

over

the

next 12

months?

Thank

you.

[Dirk Schmelzer]

Hi,

Lisa.

Welcome

back,

first of

all. So,

your

first

question,

what's

driving

the

different

margin

profile

for

the

year.

Obviously,

quarter

two

in our planning, we were expecting to increase our marketing

spend

because

this

is

a

crucial quarter

for

the

business.

The

same holds

true

slightly

going

into

Q3

and

coming

out

of

Q3

and

as

I

said

earlier

from

our

history,

you

know

that

Q4

is

traditionally on

the

margin

side a

quite

good

quarter.

To

be

honest,

I

mean,

we're

giving

you

a

quite

detailed

guidance

on

the

overall

year.

I

wouldn't

go

into

quarterly

guidance

right

now.

Just

follow

the

shape

that

I

just

outlined

when

answering

Chris

Johnen's question.

But

as

you

can

probably

hear

from

Tobi

and

me, we're

quite

happy

with

how

we

ended

the

year

and

how

we're

navigating

through

the

year

as

we

speak.

So,

don't

expect

any

surprises

by

the

end

of

this

year.

Your

third

question,

before

Tobi's

diving

into

the

competition

question

you

were

raising,

on

the

buyback

side,

it's

pretty

hard

given

the

volatility

of

the

market

to

really

predict

when

we

will

be

done

with

that

buyback

program.

As

you

know,

according

to

German regulations,

our

bank

will

be

limited

to

buy

a

maximum

amount

of

25%

of

the

daily

float

and

will

be

limited

to

not

influencing

the

daily lever.

So

under

those

limits,

we

have

seen

quite

volatile

buyback

volumes

in

the

past

with the

last

year

we've

been

doing,

and

taking

the

experience

from

the

last two

months it

can

go

pretty

fast.

So

by

the

Annual

General

Meeting

with

this

year,

we

might

already

be

through

with

€60

million to €70

million

or

a

bit

more.

But

to

be

honest,

I

cannot

give

a

clear

guidance

on

that

because

it's

depending

really

on

the

volatility

of

the

market.

[Tobias Hartmann]

Hi, Lisa. This

is Tobi.

With regards

to

your

question

on

the

competitive

landscape,

I

think

we've

shared

our

update

in

what

we

call

the

next-level

strategy

in

our

CMD

and

hopefully

you

will

connect

today

with

the

announcement

and

the

details

behind

it

additional

proof

points

that

this

strategy

is

not

just

a

PowerPoint

strategy,

but

it's

in

full

swing,

it's

working.

We

have

an

enhanced

focus

on

transaction

and

that's

why

we

think

the

numbers

speak

for

themselves.

We

are

staying

focused

and

we

don't

see

any

changes

in

the

markets

by

any

competitor

as

of

now.

Having

said that,

of

course,

we

have

to

watch

out

for

anything

that

happens

and

we

believe

that

this

strategy

that

we

presented

in

which

we're

implementing

now

represents

the

next

growth

year-out.

And

so

we

think

we're

pretty

unique

there.

So,

no

other

changes

to

share

at

this

point.

[Lisa Yang, Analyst, Goldman Sachs International]

Thank

you. And

maybe just

a

quick

follow-up

on

the

competition,

although

I

know

they

are

very

small.

It

looks

like

the

reset

– the

depreciation

of

reset

agents

in

Germany

recently

made

some

changes

to

the

branding or anything

like

that.

So

I'm

just

wondering

if there's

any

[indiscernible]



(00:38:21)

or

anything

we

should

be

expecting

on

that

front.

[Tobias Hartmann]

I

think

it's

pretty

clear

that

if

you

have

a

rather

small

business

in

any

sector

that

your

growth

potential

is

absolutely

there,

so

you

certainly

do

expect

that

this

certain

competitor

will

drive

growth

and

that's

fine.

But

we

think that's

a

different

footprint.

The

offering

and

the

services

that

we

are

offering

today

is

something

completely

different,

a

lot

more

comprehensive

and

a

lot

more

prudent

since it's

been

in

the

making

for

the

past

two

to

three

years

than

what

you're

just

talking

about,

so.

But,

yes,

absolutely,

competition

is

out

there

and

will

be

[indiscernible]



(00:39:03).

[Lisa Yang, Analyst, Goldman Sachs International]

Great.

Thank

you.

Very clear.

[Tobias Hartmann]

Thank

you,

Lisa.

[Operator]

We

will

now

take

the

next

question

from Fon Udomsilpa

from

Royal

Bank

of

Canada.

[Wassachon Fon Udomsilpa, Analyst, RBC Europe Ltd.]

Hi.

Good

afternoon.

Thank

you

for

taking

my

questions,

few

from

me

please.

The

first

one,

could

you

share

with

us

your

thought

around

the

current

mix

of

memberships

here.

I

believe

around

20%

of

agents

are

Acquisition

edition,

over

50%

in

Imagine and

the

remaining

on

Base

edition.

Do

you

see

the

current

mix

as

optimal

and

is

there

any

potential

for

a

higher

tier

than

Acquisition

edition

indicates

that

demand

exceeds

your

expectations?

And

the

other

question

is

just

wondering

now

that

the

migration

has

been

done,

what

is

the

focus

of

the

sales

team

currently,

are

they

still

having

conversations

with

agents

on

encouraging

migration,

or

sorry,

encouraging

upgrades

or

pushing

the

products

like

Realtor

Lead

Engine?

Thank

you.

[Dirk Schmelzer]

Maybe

I

start

before

Tobi

goes

into

the conversations

we're currently

having

with

our

agents.

Fon,

thanks

for

the

questions.

What

you

will

see

in

the

end,

and

that

might

be

a

few

quarters

down

there,

is

a

typical

backlog

as

I

outlined

earlier

on

our

different

editions.

So,

you're

going

to

see roughly

50%

of

our

subscribers

in

the

Image

edition,

you're

going

to see

25%

to

30%

in

the

Acquisition

edition

and

around

about

20%

in

the

Base

edition.

This

is

what

we're

targeting

and this

is

what

we

are

going

for

and

the

experience

we

are

having

with

our

agents

at

the

moment

and

the

satisfaction

of

the

different

products

tell

a

very

clear language.

Customers

in

the

Acquisition

edition

are

really

happy

with

the

product

and

notably

they're

the

highest

paying

customers

and

that

is

a

good

sign.

So

with

regards

to

that,

I

would

hand

over

to

Tobi

who

will

elaborate

a

bit

more

on

the

conversations

we're

having

with

regards to

Realtor

Lead

Engine

and

on

top of it.

[Tobias Hartmann]

Yeah.

Thank

you.

The

focus

of

this

year

would

certainly

be

to

educate

our

partners

in

the

market

about

the

capability

of

mandate

sourcing

and

using

ImmoScout

as a

key

driver

for

their

mandate

sourcing

in

the

future.

So

we

talk

about

Realtor

Lead

Engine.

Obviously,

you

see from

the

numbers

that

we

have

a

very

compelling

offer

there

and

there

is

more

and

more

agents

who've had

a

fantastic

experience

with

that.

Number

two

is

also

that

we're widening

and

expending

on

our

IV24

network

with

affiliated

partners

out

there.

We've

also

talked

about

that,

that's

also

an

investment

here.

And

then

number

three

is

certainly

also

to

work

with

specific

and

supporting

our

partners

in

specific

campaigning

and

positioning

within

their

own

ZIP

codes

and

against

their

direct

competitors

in

their

respective

areas.

This

is

something

that

they

now

have

a

better

understanding

for

because

they've

moved

on

into

one

of

the

three

clusters,

mainly the

two

memberships

either

Image

edition

or

the

Acquisition

edition,

and

now

they

get

the

full

stack

in

terms

of

KPIs

and

understanding

of

what

it

takes

to

have

better

visibility,

more

reach

and

more

relevance.

So,

this

is

certainly

what

we're

focused

on.

Now,

also

to

support

that

because

that's

a

part

of our

sales

team

and

our

customer

service

and

support

teams.

As

you

can

imagine,

there was a

lot of

heavy

lifting

in

completing

the

migrations,

and

now

it's

about

making

them

feel

comfortable

that they're in

their

membership

categories.

So

that

is

the

focus

and

that'll

keep

us

busy

for

quite

some

time.

[Wassachon Fon Udomsilpa, Analyst, RBC Europe Ltd.]

Very

clear.

Thank

you.

[Tobias Hartmann]

Thank

you.

[Operator]

Our

next

question

comes

from

Adam

Berlin

from

UBS.

[Adam Berlin, Analyst, UBS AG (London Branch)]

Hi.

Good

afternoon,

everyone.

I

just

got

three

questions

as

well.

Just

a

follow-up

on

this

point

about

your

sales

force

trying

to

sell

more

leads

to

the

agents.

What

percentage

of

your

subscription

customer

base

of

agents

are

currently

regularly

buying

mandate

leads

to

get a

sense

of

what

the

penetration

is of how many people

have been

convinced

of

these

detailed

value.

Second

question

is

there

was

a

comment

in

the

presentation

about

including Vermietet

revenue.

So,

have

you

now

started

monetizing Vermietet,

roughly

how

much

revenue

did

you

generate

from

that

business

in

Q4,

and

how

is

that

monetization

of that

asset

going? That'd

be

really

helpful

to

know. And

then

the

third

question

just

clearly these

are

preliminary

results. So

you

haven't

got

balance

sheets

and

cash

flows

in

that,

but

can

you

give

us

any

steer

on

how

operating

cash

flow

performed

in

2021

overall. You've

given

us

the

net

debt

number,

but

that's

obviously

been

impacted

by

all the

buybacks and

dividends,

et

cetera.

So

if

you

can

give

us

some

sense

of

where

operating

cash

flow

landed

for

the

year,

that'd

be

really

helpful

as

well.

[Tobias Hartmann]

Yeah.

Thank

you

so

much.

So,

first

of

all – this

is

Toby.

First

question

with

regards

to

what's

the

current

penetration,

again,

we're

talking about

still

a

very

low-single-digit

penetration,

6%

approximately

is

currently

the

penetration

of

our

customer

base

participating.

Again,

just to

give

you

some

color

on

that.

It's

a

shift

in

terms

of

also

what

we

are

positioning

as

a

company,

how

we

can

help

them

drive

more

business.

And

so

that

takes

a

while

in

terms

of

adoption

rate.

But

the

good

news

is

there's

obviously

lots

of

headroom.

And

I

think

second

question,

Adam,

if

we understood

it

correctly,

I

think

you

asked

about

Vermietet.de, was

that

correct,

whether

that

was

included.

[Adam Berlin, Analyst, UBS AG (London Branch)]

Yeah.

I

thought

you

said

when

you

bought

it

that

it

wasn't

generating

much

revenue,

but

I

noticed

in

the

presentation

you

guys

are

including

Vermietet

revenue.

So,

does

that

mean

you've

started

monetizing

the

audience

on

that

platform?

[Tobias Hartmann]

Okay,

got

it. Okay.

We

have

actually

concluded

the

integration

of

the

company

as

of

end

of

last

year,

and

that

again

is

roughly

about

500,000 units.

But

there's

not

a

lot

of

monetization

that

went

on.

You're

really

playing

with

monetization

and

starting

to

play

with that

in

the

year

2022.

So,

yes,

there

were

a couple

revenues

here and

there,

but

it

didn't

follow

through

the

strategic

logic.

So

that's

now,

2022

action

plan,

we

need

to

figure

out

what

is

the

right

pricing?

We've

also

now

combined

the

flow

in

from

the

immoverkauf

platform

onto

the

Vermietet.de

platform.

So

once

you

have

a

listing,

you

automatically

get

the

subscription

on

the

Vermietet.de

platform.

So

we're

now

checking

whether

that

sticks,

whether

that

resonates

and

whether

we

can

then

take

particular

landlords

for

monetization.

So

there hadn't

really

been

a

lot

of monetization

in

2021.

So,

that's

for

us

to

do

in

2022.

[Dirk Schmelzer]

Yeah,

and

your

third

question,

I

believe

when

you

see

the

final

numbers,

you

will

be

looking

at

our

cash

flow

profile,

which

has

developed

quite

healthy

over

2021 as

well.

And

we

have

seen

some

downside

from

tax,

as

you

could

see

from

the

prelims

results

that

we

just

were seeing,

some

upsides

from

working

capital

movement.

So

that

was

quite

nice.

And

we

didn't

see

any

specific

changes

with

regards

to

payment

profiles

of

our

agent

base.

So,

overall,

rather

healthy

and

reconfirming

than

anything

else.

[Adam Berlin, Analyst, UBS AG (London Branch)]

Right,

thanks

very

much

for

the

answers.

[Tobias Hartmann]

Thank

you.

[Operator]

Our

next

question

comes

from

William

Packer from

BNP

Paribas.

[William Packer, Analyst, Exane BNP Paribas]

Hi

guys.

Thanks

a

lot

for

taking

my

questions.

Three,

please.

So,

just

coming

back

on

the

competition

angle, vendor

leads and

consumer

subscriptions

are

going to

be

the

key

growth

driver

of

the

group.

Can

you

just

update

us

what

your

payers

are offering?

[indiscernible]



(00:47:15)

no change

and

they

remain

very

nascent?

Secondly,

there

was an

impressive

growth

in

the

number

of

consumer

subscriptions

over

2021,

although

we

have

seen

a

little

bit

of

a

decline in

the

quarter-on-quarter

growth.

Could

you

just

remind

us

looking

backwards,

why

were

the

subscriptions

so

strong

in

your

view

and

[indiscernible]



(00:47:25)

you

take

into

the

new

year?

And

then

finally,

on

the

margin

question,

you've

given

some

very

useful

detailed

guidance

for

the

margin

overall,

but

could

you

kind

of

help

us

think

through

what

particular

items

of

the

cost

base

they're

going to

be

growing

faster?

What's

the

mix

of

costs

and

what

are the

key

drivers

of

that

in

the

mix

between

marketing,

people

costs,

et

cetera,

just

to

help

us

think

through

the

modeling?

Thank

you.

[Tobias Hartmann]

Sure.

It's

Tobi.

On

the

consumer

subscription

competitive

landscape,

we

don't –

right

now

we're

not

aware

of

anything

that's

as

comprehensive

or

that

can

be

compared

to

our

offering.

There's

a

couple

of,

also

we

think

explanations

for

that.

If

you

do

that,

you

probably

want

to

do it

with

the

market

leader

or

someone

who

is

positioned as

the

market

leader.

If

you're

doing

this,

depending

on

which

product

you

choose,

there's

some

work

involved

i.e.

you

upload

your

application,

you

get

your

folder

organized

digitally

and

so

forth.

So

that

has

a

certain

impact

in

terms

of

who

you

want

to

be doing

business

with.

We

are

very

visible.

We

have

a

98%

brand

awareness

amongst

18-year

olds

and

above.

But,

again,

having

said

that,

maybe

someone else

is

working

on

something

right

now,

we

think

we

have

a

sweet

spot

there

and

we

have

the

most

comprehensive

offering.

In

terms

of

what

have

we

done

to

improve

the

offering,

we've

played

around

[indiscernible]

(00:49:14)

playbook

from

other

products

that

we've

launched,

which

is

we've

increased

the

payroll

efficiency.

We've

also

increased

and

worked

around

in

better

understanding

the

promotion

drivers.

And

we've

also

allowed

to

generate

more

traffic

and

direct it

towards

the

[indiscernible]



(00:49:34)

so

that

we

can

convert

those

relevant

customers

into

active

subscribers.

So

that

is

something

that is

obviously

we're

working

constantly

on.

This

will

also

be

the

name

of

the

game

for

2022.

We

have

by

far

not

reached

the

end

of

the

optimization

there.

It

takes

a

lot

of

time

and

it's

also

different

in

terms

of

regionality

within

Germany.

We

see

obviously

differences

not

only

within

the

top

seven

cities,

but

also

outside

of

the

cities

that

hasn't

picked

up

pricing

on

terms

what

we

are

offering

and

on

the

payrolls

that

we

are

setting

up.

So

hopefully

this

– Dirk,

can

say

something

about

the

margin

question?

[Dirk Schmelzer]

Yeah.

Hi,

Will. This is

Dirk.

So

on

the

marketing

sales

cost,

product

development

cost,

I'm

giving

you

the

numbers

which we

basically

baked

into

our

guidance

here

and

all

of

the

projections

that

we

baked

in

there.

As

I

said

earlier

on,

with

regards

to

the

question

on

cost

inflation,

we've

basically

planned

our

budget

based

on

a

reasonable

uplift in

personnel

cost,

and

that

is

fine.

And

as

we

can

see

from

attrition

numbers

at

the

moment,

we

can

very

well

navigate

through

that.

People

are

very

attracted

by

Scout

as

brand.

So

our personnel

costs are

well-planned

and

well

in

line

with

what

we've

planned.

Main

items

that

you

have

seen

in

personnel cost

in

2021 have

been

the

acquisition

of

other

businesses.

So

that was

the

reason,

an

organic

increase

in

personnel

spend.

What

you're

going

to

see

on

a

like-for-like

basis

is

increased

marketing

spend

as

we

outlined

it

before,

increase

in

selling

costs

with

regards

to

the

subscription

business

that

we

are

growing,

and

some

slight

improvement

and

increases

in

product

development

cost.

License

cost IT

cost

and

all

the

rest

will

move

within

the

mid-single digit

range.

And

we're

not

going to

see

any

major

developments

there.

So

as

of

today,

I

think

we're

navigating

quite

well

through

the

financial

year

2022

and

continue

to

do

so.

[William Packer, Analyst, Exane BNP Paribas]

Thanks.

Just

one

quick

follow-up.

You

gave

a

very

useful

data

point

at

the

CMD

and you've

commented

over

time

which

is

the

portion

of

IV24

vendor

leads

that

are

sourced

via

your

own

website

versus

via

third-parties.

And

my

memory

is

it's

about

one-third,

two-third.

So,

one-third vendor

leads, and

originated

on

platform.

How

is

that

developing

at

the

moment?

Are

you

succeeding

in

shifting

a

greater

share

of

your

sourced

vendor

leads

to

your

own

platform?

[Dirk Schmelzer]

No.

Will,

that

has

exactly

stayed

as

we

stated

it

on

the

Capital

Markets

Day,

so

one-third,

two-third

is

the

metric

you

can

deploy

here.

And

what

you

also

can

deploy

is

that

organic

traffic

that

we

are

getting

through

the

platform

that's just

higher

quality

than

the inorganic.

[William Packer, Analyst, Exane BNP Paribas]

Right,

thanks

very

much.

[Tobias Hartmann]

Thank

you,

Will.

[Operator]

Our

next

question

comes

from

Craig

Abbott

from

Kepler

Cheuvreux.

[Craig Abbott, Analyst, Kepler Cheuvreux]

Yes.

Good

afternoon.

Two

remaining

questions

please,

the

first

one

just

on

the

financials.

I

just

want

to make

sure

we

understood

this

correctly.

You had

another –

final

PPA

installment

on

the

IS24

allocation

of

around

€30

million in

total.

So

just

to be

sure,

when

we're

looking

at

total

DNA,

starting

with

the

base

of

€63

million,

I

think

it

was

in

2021,

expecting

expansion

on

that

depending

on

your

investments.

But

then

we

should

deduct €30

million

from

this,

i.e.,

we'll

see

a

sizable

step-down

on

the

group

D&A?

I

just

want to

make

sure

I

understood

that

correctly.

And

secondly

more

operational,

I

just

wondered –

I

know

it's

early

days

as

you're

rapidly

growing

your

Plus

subscriber

base,

but

I

just

wonder

if

you

could

give

us

an

update

on what

you're

seeing

or

anticipating

in

terms

of

churn

rates

and

average

contract

duration?

Thank

you.

[Dirk Schmelzer]

Yeah, Hi,

Craig.

First

of

all,

just

start

with

your

question

on

PPA,

thanks

very

much

for

asking that. I

think

that's

helpful

for

everybody

around

the

call.

The

number

you

were

referring

to,

the

€30.3

million,

that

is

the

number

we

have

amortized

in

2021

for

the

customer

base

of

ImmoScout24.

According

to

IFRS

we

needed

to

amortize

for

that.

And

that

is

done.

So

you're

not

going

to

see

that

€30 million

in

2022 going

forward.

And

there

was

an

[indiscernible]



(00:54:14),

you

correctly

pointed

out

on

FLOWFACT,

which

was

much

lower,

that

was

€5

million

that

we

saw

running

through

the

balance

sheet,

which

was

mainly

on

the

FLOWFACT

trademark,

which

we

also

accounted

for

at

the

time

of

the

purchase

of

FLOWFACT.

And

as

you

can

imagine,

with

our

new

strategy,

the

FLOWFACT

trademark

is

not

used

to

the

extent

it

has

been

in

the

past

because

it's

bundled

into

the

IS24

product.

And

as

I

said

in

my

commentary

on

the

slides,

we

also

see

that

the

shift

to

the

cloud-based

business,

although

makes

us

[indiscernible]



(00:54:51)

a

bit

less

of

recurring

revenues,

which

will

increase

in

the

future.

[Tobias Hartmann]

Yeah,

and

in

terms of

your

questions

about

the

operational

KPIs for

the

full-year

2021,

we

have

on

a

CLV basis,

blended

estimation

for

the

MieterPlus

and

KäuferPlus

across

the

portfolio

of

approximately

€120

and

the

lifetime

duration

is

about

5.4

months.

And

in

Q4,

it's

slightly

different,

but

pretty

close

to

that,

it's

about

a

hundred

and,

slightly

north

of €110

CLV

and

5.2

months.

Obviously,

again,

repeating

myself

a

little

bit

here,

we

are

optimizing

within

those

KPIs

as

we

are

learning,

as

we

are

adding

additional

service

features,

as

we're

connecting

it

also

with

the

other

platform

features

[indiscernible]



(00:55:55),

so

should

be

more

great

use

of insights

throughout

the

year.

Thank

you.

[Craig Abbott, Analyst, Kepler Cheuvreux]

Okay.

Thank

you

both.

[Operator]

Our

next

question

comes

from

Joseph

Barnet-Lamb

from

Credit

Suisse.

[Joseph Barnet-Lamb, Analyst, Credit Suisse Securities (Europe) Ltd.]

Excellent.

Thank

you.

Just

one

more

left

from

me.

You

were

asked

on

political

backdrop

back

at

3Q,

and

you

said

it

was little

bit

too

early

to

say

much

with

confidence.

[ph]



Just

wanted

hear if you

had (00:56:24)

any

updated

thoughts

on

that

front?

Thank

you.

[Dirk Schmelzer]

So,

sorry,

this

is quite

openly

stated,

I

didn't

get

the

question.

[Tobias Hartmann]

Yeah.

[Joseph Barnet-Lamb, Analyst, Credit Suisse Securities (Europe) Ltd.]

Sorry.

back

at

3Q,

can

you

hear

me?

Can

you hear

me?

[Dirk Schmelzer]

Yes.

Yes.

Yes.

[Joseph Barnet-Lamb, Analyst, Credit Suisse Securities (Europe) Ltd.]

Excellent.

Yeah,

back

at

3Q,

you were

asked

about

the

evolution

of political

backdrop

and

the

impact

that

that

may

have

on

your

business.

And

I

think

you

basically

said

it's

a

little

bit

too

early

to

say

with

much

confidence

so

what

was

happening

or

what

it

would

mean

for

you

guys?

Do

you have

any

updated

thoughts on

the

political

backdrop

on what

it

means

for

the

housing

market

and

your

business?

[Dirk Schmelzer]

No,

what

we

have

seen

is

that

the

German

government

became

a

little

bit

under

pressure after

announcing

that

they

are

planning

to

build

more

than

400,000 apartments

per

year

or

housing

units

per

year

in

Germany.

And

now

more

and more

people

are

knocking

on

the

door

of

the

government

and

saying,

hey,

how

are

you

going to

plan

to

do

that

because

when

we

look

at

January, we

saw

the

German

mortgage

bank,

which

is

delivering

or

helping

people

to

energy-efficient

mortgages

here

have

stopped

giving

out

new

mortgages.

And

also

we

haven't

seen

any

significant

new

laws

coming

in

on

speeding

up

the

process

to

come

to

a

new

apartment.

So

the

government

really

has

come

under

pressure

to

say

exactly

how

they

want

to

reach

400,000

buildings.

So,

it's

rather

sort

of

an

ongoing

and

very

well-looked

at

political

battle

here

in

Germany.

But

in

the end,

we

help

as

a

tailwind

for

our

business

rather

than

headwind.

[Joseph Barnet-Lamb, Analyst, Credit Suisse Securities (Europe) Ltd.]

Excellent, thank

you very

much.

[Operator]

And

we will

now

take

the

last

question

from

Nizla

Naizer

from

Deutsche

Bank.

[Nizla Naizer, Analyst, Deutsche Bank AG]

Thanks.

I

just

have

two

remaining

questions.

The

first

is

on

the

decline

in

listings.

Do

you

expect

this

to

continue

given

the

backdrop

that

you

just

explained

to

us?

And

does

this

make

an

environment

where

the

agents

are

more

willing

to

talk

to

you

to

go

with

the

Realtor

Lead

Engine

product,

et

cetera?

Some

color

there

would

be

great.

And

the

second

is

on

the

M&A

potential

going

forward,

what

sort

of

entities

are

you

still

looking

at

to

add

to

the

portfolio

to

make

the

offering

more

compelling

to

any

part

of the

value

chain

that

you're

focused

on?

So

some

color

there

would

be

great.

[Dirk Schmelzer]

Thank you. So,

yes, I'll

start

before

Tobi

will

elaborate

on

the

first

question.

On

M&A,

I

think

we

clearly outlined

that

we

have

set

our

strategy,

we

communicated

our

strategy.

We

mentioned

the

key

investment

areas

that

we

are

undertaking

with

the

five

growth

areas

we've

been

presenting

to

you.

Anything

that

can

help

us

along

those

lines

to

accelerate

growth,

we

will

consider.

And

anything

else,

we

will

not

consider.

And

with

regards

to

where

are

we

standing,

what

are

we

looking

at,

we'd

rather

see

some

targets

in

the

mortgage

piece,

if

at

all.

And

on

other

growth

areas,

we

don't

see

targets

because

we

are

at

the

forefront

of

developing

those

businesses,

and

there's

simply

one

outside

doing

what

we

are

doing.

So

with

that,

I

hand

over

to

Tobi.

[Tobias Hartmann]

Yeah.

So,

Dirk

pointed

out

the

areas

of

potential

[indiscernible]



(00:59:56)

the

geographical

scope

we've

talked

about,

that's

unchanged,

and

it's

either

bolt-on

acquisitions

and

hassles with

product

acceleration

or

hassles

going

deeper

into

any

of

our

existing

competencies.

On

the

declining

listings

question, we

don't

expect

a

significant

change

again.

The

view

that

we

have

right

now

on

the

German

real

estate

market

is

the

question

marks

will

not

be

resolved

i.e.,

there

are

supply

chain

constraints.

Housing

still

is

short

of

providing

enough

supply

and

politicians

have

crafted

a

plan,

but

execution

lacks.

So

that

means,

yes,

it

should

be

theoretically

favorable

for

agents

to

understand

that

they

need

to

use

different

sources

to

get

to

their

new

mandates,

which

is

why

we're

glad that

we've

completed

the

migration,

which

is

why

we're

glad

that

we

have

gotten

a

better

penetration

and also

a

more

completed

offering,

including

all

the

way

up

to

IV24.

So,

normally,

I

would

say,

yes,

it

should

be

okay

with

the

product

setting

that

we

have

now,

but

also

we've

shared

with

you

that

we've

rolled

that

out

and

we're

working

with

our

sales

force

to

make

sure

everyone

understands

what's

available.

So

all

in

all,

no

changes

neither

on the

M&A

strategy

nor

on

our

aspiration

to

really

help

forcing

mandates

for

the

agents.

[Nizla Naizer, Analyst, Deutsche Bank AG]

Understood,

thank

you.

[Tobias Hartmann]

Thank

you.

[Ursula Querette]

Okay, thank

you,

Toby

and

Dirk

and

thank

you

all

for

this

very

lively

discussion.

I'm

looking

forward

to

continuing

this

discussion on

the

phone.

So

if

you

have

questions,

please

call

the

Investor

Relations

team.

Thank

you

and

talk

to

you

soon.

Bye-bye.

[Operator]

This concludes

today's

call.

Thank

you

for

your

participation.

You

may

now

disconnect.