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Hello, everyone, and welcome to today's conference call. This is Thomas speaking and next to me is Ingo. It might sound boring to you, but XING has been growing very strongly again. And before I jump into all the details, I'd like to remind you that all 2017 financial KPIs has to be adjusted retroactively on the back of IFRS 15 and IFRS 16 to make them comparable with 2018 numbers.That said, in terms of housekeeping, let's have a brief look at what we achieved in Q1. In a nutshell, we continue to perform nicely.Financial KPIs across the board have been growing strongly. Even if you adjust growth rate for M&A transactions for Prescreen and InterNations, our organic performance remains strong. Revenues, EBITDA and operating cash flow, all of the KPIs have grown around 20%.Our most important nonfinancial KPIs also developed nicely, and we have been working hard in our core products as well as the new GDPR framework.Here are the main financial KPIs for Q1 2018. Our like-for-like revenues came in 28% higher than last year and totaled EUR 54 million. If you look at organic performance only, it's excluding our newly consolidated M&A transactions Prescreen and InterNations, we grew by 21% but remain fully on track or even slightly above our communicated top line growth ambition.EBITDA grew by 19% to EUR 14.8 million. Operating cash flow came in strong at EUR 25.1 million, up 23% on the previous year. This is very solid growth.Moving on to our net member growth. We kicked off 2018 quite strongly. As you know, or recall from previous calls, Q1 is usually the strongest quarter in terms of member and payer growth as we spend more marketing dollars in Q1 than in any other quarter.Having said that, for us, growing north of 500,000 in Q1 2018 is quite impressive. Why? We're looking at our total addressable market in Germany, Austria and Switzerland, we already crossed the penetration bridge of 50% last year. If you remember, we estimated about 25 million white and gray collar professionals in Germany, Austria and Switzerland as our total addressable market.Based on that number, we are currently at 56% penetration and still growing by more than 500,000 in Q1. Just to manage expectations here, this number is bound to come down once we extend our penetration even further.By looking at payer conversion, we are posting very solid growth. If you look at paying member conversion, it's clear we have delivered another solid quarter, growing very much in line with the previous year's adjusted quarter. We added 16,000 net new paying members, which saw our paying member base cross 1 million mark for the first time.Please remember that we consolidated InterNations for the first time in Q3 2017. This number is not included this year. InterNations currently serves 124,000 paying members, out of more than 2.9 million registered expats worldwide.Now I'd like to give you a snapshot of another recently introduced nonfinancial KPI, our B2B E-Recruiting customer growth. We have expanded upon our position as a HR department partner. Human resources managers use XING products such as XING TalentManager or the XING TalentpoolManager or go one step further and book our recently released full recruiting suite called XING 360 to boost their chances in the battle for talent. We provide them with tailored software solutions to help them find the right candidate for their vacancies or create a pool of potential applicants.Over the last 12 months, we added over 2,200 new corporate customers who booked license subscriptions for at least 1 XING product, counting more than 8,500 B2B subscription customers end of Q1. That's a growth of 36%.So we are very well on track to become a standard in many HR departments. Anyone looking to succeed in the battle for talent can't afford to overlook on modern solutions. That's also an excellent use for our members, since the more HR departments use XING to look for talent, the higher their individual chances of advancing their carrier.Let's have a look what we have [ shipped ] in our major segments B2C and B2B E-Recruiting and how we prepared ourselves for GDPR. During Q1, we have been quite busy working on core elements of our platform and overall user experience. And released an updated version of our iOS and Android apps to provide users with a novel interface, which clearly differs from that of our other social network apps. Users can swipe through content sorted by relevance to gain an overview of key information even faster than before. This is a conscious decision to move away from a vertical news feed typical to many other social networks. The new start page offers horizontal feed coming through various media libraries. This enables our members to quickly gain an overview of a certain section, and find out more about key aspects of modern working life.Also during the first quarter, we rolled out end-to-end encryption for our messaging section. As a result, XING is the only online business network in German-speaking countries to offer basic and premium members the option of exchanging sensitive and highly confidential information with one another, without the risk of unwanted third-party access. End-to-end encryption is available in the messaging section of our mobile apps.Talking about security. I'd quickly like to cover the GDPR legislation and what it means for us and how we prepare ourselves for the new regulatory framework. The General Data Protection Regulation (GDPR) provides EU-wide standards and designated standards designed to protect users of digital products and services. And we fully support this new regulation. We use intent and will to protect fundamental human rights and liberties in the online domain, particularly when it comes to personal data protection and privacy rights are and always will be the linchpin of our business model.In view of this, we introduced our privacy app to create end-to-end transparency and provide clear answers to a wide range of questions surrounding data protection and privacy. Users can also request all their saved data with a single click. User privacy settings have also been improved. While the GDPR represents a number of challenges for many companies, with some American competitors even going so far as to start moving millions of user accounts to servers outside Europe, we see it solely as a confirmation of the stance we have always adopted. To use a Hamburg analogy, while others are busy laying sandbags to prepare for the flood, we have already gone ahead and built up our [ dam ].Last but not least, we also improved our user experience on the B2B side and feature set with the introduction of the Smart Pools to make it even easier for HR departments to combine candidate searches within the XING TalentManager with Talentpool management within the XING TalentpoolManager. This means that searches in the TalentManager can be added to the TalentpoolManager as ongoing automated Smart Pools.In addition to manually added candidate pools, HR departments now can also benefit from pre-filled talent pools based on regular search profiles.To sum it up, XING is geared towards growth and with a clear focus on developing our business, our products help members benefit from the chances on the labor market, while also enabling companies to find talent, they need to drive innovation and succeed on the market. As a German network, we also comply with the standards in place there, which also extends to our members' data. This is an additional key advantage over American competitors.That concludes my presentation. So now I'll hand over to Ingo.
Thank you, Thomas. Hello, everybody. This is Ingo and I'm going to talk to you about our Q1 numbers in more detail. All in all, as Thomas has pointed out, Q1 has been a very good start for us into the year 2018. So let's start with a look at the key message points. #1, we are keeping up our strong member growth, which is important because that's the basis for our business overall. #2, our overall revenue growth amounted to 28% year-over-year, that's good, and organic growth is also very strong at 21% year-over-year. #3, EBITDA came in at EUR 14.8 million. And #4, we've had strong operating cash flows at EUR 25.1 million.I'm going to give you more details on the following charts. One general note, in 2018, we have started applying IFRS 15 and IFRS 16 to new regulations. They mean minor effects on revenue recognition and sales force cost on the one hand and one major effect on cost for rent on the other hand. I'll point out the respective effects during the presentation to give you maximum transparency and clarity regarding our numbers. And whenever we compare this year's numbers to previous period's numbers, the previous periods have been also adjusted for IFRS 15 and IFRS 16, so that we are comparing apples-to-apples.So let's start with the numbers and an overview of our Q1 P&L, revenues came in at EUR 54 million, that's up 28% year-over-year. Out of that, 7 percentage points came from acquisitions, approximately 6 percentage points from InterNations and 1 percentage points from Prescreen. Organic growth was 21%, which continues to be strong and which is fully in our target range. EBITDA amounts to EUR 14.8 million, which is up year-over-year.With that, we are fully on track and as usual, our results in Q1 is impacted by our extensive branding campaign. Q1 EBITDA margin is 27%. Depreciation amounts to EUR 4.7 million, that's up year-over-year, please note that this includes approximately EUR 1 million depreciation from purchase price allocation. Financial results is negative with minus EUR 0.8 million, which is up year-over-year. The main reason is that our Kununu joint venture in the U.S. is delivering better results compared to last year. Net effect over compensates the smaller negative noncash IFRS effects from discounting earn-out obligations from the acquisitions of InterNations and Prescreen.Now when you look at the joint venture overall, please remember that although it is improving the performance year-over-year, it is still incurring startup losses and that we do expect a small-to-mid single-digit million euro loss, which we will show in the financial result this year. Net income amounts to EUR 6.1 million, which is up 25% year-over-year and with that EPS came in at EUR 1.09.On the next chart, you can see the profitability by business unit. Let's start with the new B2C segment, in Q1 the B2C segment contributed EUR 10.5 million in segment EBITDA, which is as announced slightly down year-on-year. Main reasons for this development are investments in our new products, especially in Kununu D-A-CH, in our job market and in our platform and network.The B2B E-Recruiting segment contributed approximately EUR 15.7 million to profitability, that's up year-over-year. Return on sales is slightly down, mainly because our new applicant tracking system business Prescreen is diluting margin. This business is currently in a very high growth phase, revenues are developing very well, but in that phase it is naturally not contributing to profitability. And overall, everything is developing according to plan, we are very happy with the acquisition. The B2B Advertising & Events segment contributed EUR 1.3 million to profitability, that's up year-over-year, and we have a good development here as well.And in Q1, Kununu International EBITDA is neutral, that's exactly as it should be. Please remember, these are revenues from services to the joint venture, it's not the joint venture itself, so the revenue calculation is cost-based. So there is no profit expected here.Let's have a look at revenues. B2C revenues came in at EUR 24.2 million, that's up 18% year-over-year, and out of that, 12 percentage points are inorganic from the InterNations acquisition. The segment is developing according to plan, and about 2/3 of the growth are driven by InterNations, and 1/3 is driven organically by our paid memberships as a whole.Let's have a look at our E-Recruiting revenue development, again we've had a very good start into the year 2018 here. The revenues in E-Recruiting amounted to EUR 23.7 million, that's up 40% year-over-year. Thereof, 4 percentage points inorganic from the Prescreen acquisitions, organic revenue growth was 36%, which is fully on track with our plans. All of our E-Recruiting revenues streams are growing double-digit and the strongest drivers are again the modern forms of e-recruiting, active recruiting and employer branding.Also our 360 packages continue to sell well and support our growth.And finally, let's have a look at B2B Advertising & Events, revenues amount to EUR 5 million, which is up 40% year-over-year, that's also a good development, driven by both Advertising & Events, which are both up double-digit year-over-year.On the next slide, let's see an overview of our cost structure. In Q1, personnel cost amount to EUR 20 million, an equivalent of 37% of revenues, that's up year-over-year and this development is fully in line with our expectations. Year-over-year, we added 305 full-time equivalent. Thereof, 133 inorganic, 91 from InterNations and 42 Prescreen, and 172 FTE were added organically. Out of those, 64 in B2C mainly product and engineering; and here one important factor is that we are substituting freelance programmers by employed programmers in our new development center in Porto, which is overall significantly less expensive if you look at cash cost.We added 67 FTE in the B2B E-Recruiting business mainly sales and marketing, but also some in product and tech. We added 23 in B2B Advertising & Events across all functions in both business units. We've added 28 in the rest of the organization. If you look at marketing, Q1 overall marketing costs came in at EUR 8.2 million, that's 15% of revenues up year-over-year. As you know, we always do big branding campaign in Q1, this year we have increased our budget compared to last year, if you look at the result awareness in terms of quantity and quality had increased and we are very happy with the outcome.Last cost line is other operating expenses, it includes external services, legal audit consulting, payment processing, server hosting and other costs. Unlike before, in 2018 this cost line does not include cost for rent anymore.According to the new IFRS rule, the rental contract has to be shown as a right to use asset on the balance sheet and then written off and all presuming some fictional financing. Now I'm aware that this does not really make your job easier, but sorry to say these are the new rules and we will try to make it as easy as possible for you in our communications. The rent issue is the single biggest issue with the impact of IFRS 15 and IFRS 16 on our accounting.In Q1, other operating expenses amount to EUR 11 million or 20% of revenues, which is up year-over-year. If you look at cash flows, operating cash flows excluding organizer cash amount to EUR 25.1 million, that's up year-over-year. You know that Q1 is always seasonally strong with the key drivers being EBITDA and net working capital especially.Operating cash flow now does not include rent anymore, which according to the new rules any cash [ content ] has to be shown as financing cash flows. Cash-outs for operating investments amount to minus EUR 8.4 million, that's up year-over-year and is in line with our plans. Cash-out for acquisitions amount to minus EUR 1.2 million, which is financing for our U.S. joint venture and cash-out for interest paid FX and rent amounts to minus EUR 0.8 million, these are mainly our cost of rent, according to the new IFRS rules.With that, free cash flow excluding organizer cash amounts to EUR 14.6 million. To sum it up for Q1, overall, we've had a good start into the year, we're keeping up strong member growth, we have strong revenue growth and our bottom line developed according to plan.Now let's talk briefly about our outlook for the year. In the last call, I told you that we were shooting for an EBITDA of EUR 70 million before applying the new accounting rules of IFRS 15 and IFRS 16. I also said that we estimate the overall effect of IFRS 15 and IFRS 16 to be approximately plus EUR 4 million and that I would give you an update in this call.So after we gained some experience with the new rules and practice for 1 quarter, I can confirm the numbers that I had given you already. So after applying IFRS 15 and IFRS 16, we are shooting for a full-year EBITDA of EUR 74 million. Of course, this is purely an accounting effect without impact on cash flows. So that's it for the numbers and we are now happy to take your questions.
First question comes from Sarah Simon from Berenberg.
A couple of questions. First one is on the B2C business. [Technical difficulty]
Sarah, that is a bad connection, can you just repeat and speak a little slowly, we don't understand you simply.
Okay, I'll take the question offline.
Okay, sorry. But it's very difficult to understand you, I don't know where you are.
Or maybe you dial in again and take the second question later and maybe we have a better connection.
[Operator Instructions] Our next question comes from Nizla Naizer from Deutsche Bank.
I just have a couple from my end. Firstly, on the growth of the B2B customer base year-over-year, thanks for providing the KPIs, very helpful to see, just wanted to understand, can this growth be sustained over the next 3 quarters looking into 2018 in your view? Secondly, is this growth largely attracted by the new 360 product that you've launched into the market, is that one of the key drivers of growth? And thirdly, do you think the e-recruiting market in the D-A-CH region has reached an inflection point, where people now understand the value of it, perhaps, and previously [ over the ] market maker but now is there more of a pull effect where these customers, the HR department is actually coming to you and saying can we sit down and talk about our recruitment needs, so that's on the B2B side. And maybe afterwards, I'll ask you my B2C related questions.
Question on the inflection point is always a difficult one, because you never know exactly how the future will look like. My reading currently is that, yes, more and more companies have understood the need of active recruiting and talent pools and referral management all being part of that. So yes, we are getting incoming calls. Also, obviously, the size of our portfolio in the meantime is so big, we really have -- we are the other most attractive partner for them on the other side. 360 is not really driving this growth. We still have a -- I mean, a sizable 3 digit number of 360 customers, but those ones that we do have are usually customers we had already before. So we are upselling customers that had already experienced with XTM or with employer branding and now making them 360 customers. So those are today the older customers, who have already experienced XING in the pre-time. And the growth of 2,200 new subscription customers is really new customers coming in. [ Happy to see you looking on ] with the answer. Okay, last question on can we sustain this growth? I mean, whether it would be always 36%, we don't know, but we always said that we want to grow north of 30%. So this is, obviously, where we want to go. And yes, don't want to grow with ARPU. We do want to grow by penetrating the market. There is about 70,000 potential customers out there. So when you come from 8,500 today, growing on a 30%, 40% base, that can keep us several years from here. And we are quite hopeful this will happen.
Understood. Thank you very much. That's very helpful. And now coming to the B2C side, which I guess as you mentioned is the driver or the attractive point here. A) You mentioned that Q1 is a very strong quarter, was that helped by the marketing that you all have done? What sort of run rate do you think we can expect in the next 3 quarters? I'm assuming it won't be the 580,000 new members, but if you all have any internal sort of ideas on that. That would be great. And secondly, the 6% organic growth, is that something that you all are happy with, or do you think that given the organic growth could be taken to 10%, or the double-digit rate with maybe new verticals that you would like to launch in terms of the monetization potential. So just wanted to get an understanding there. And my final question is on the marketing spend. So it was 15% of revenue in Q1. Q2 onwards, do you think -- could we expect it to normalize to that 10% sort of range that we typically see going into the year?
Okay. So if we look at revenues on the B2C side, for the full year, we are expecting growth of a little over 10%, okay. So for the full year. So if we have 18%, you know that we now have the -- we have a large part of which is inorganic, so you would see that once we reach Q3, we go down because we don't have the inorganic growth effect anymore. With regarding organic growth, we have several initiatives in place, which we shoot for keeping that growth or maybe even increasing it, but it's very difficult to say before and whether that's going to work out or not. In general, we do see growth potential there. But for the full year, a little over 10% for B2C overall in revenue growth. When it comes to marketing, of course 50% or 70% of revenues in Q1 is not the run rate. For the full year, we are shooting for a little over 10% of revenues in marketing from this point of view.
[Operator Instructions] There appears to be no other questions. At this time, I'd like to turn it back for any additional or closing remarks.
We got the question from Sarah by email, I'm reading to the rest, one is passive recruiting, a growth of low 20s your realistic assumption? And B2C, am I right in thinking that [ in relation ] to Q1, it's little less than Q4 and it's still [ what ]. Okay. I'll take the first one and Ingo will take the second one. Passive recruiting, yes, we are growing double-digits and to be very honest, in the meantime, passive recruiting has been a kind of giveaway for all 360. So it's relatively difficult for ourselves to really find out how much passive recruiting is still left. We still believe passive is a commodity, passive recruiting it will remain a commodity, people are expecting Google for jobs coming in. Q3, Q4 in Germany, they will make passive recruiting even more of a commodity. So our strategy, making passive recruiting part of 360 and growing all 360 customer base significantly over the next years is really the way to go. For the moment, somewhere in this area between 15% and 25% for passive recruiting, growth seems to be realistic. Even though taking out parts of that passive recruiting as a kind of flat rate into 360 business. Is that helping you Sarah?
Okay. I'm going to take the B2C. It's true, when you look at the B2C segment, overall, including InterNations, and if you compare Q4 to Q1, revenues are slightly down EUR 200,000, EUR 300,000 and there are several reasons for that. #1 is, in Q4 in the B2C segment, we had some positive one-off extraordinary deals, which we did not have in Q1. And so that increases the Q4 revenue in B2C. And then secondly, if you look at the different B2C unit, including InterNations in Q1, we are thinking about repositioning the coaches business a little bit, so we stepped on marketing a little. So we had lower process there than normal. And then in InterNations, we had free trials. So what you have, you have gross pay ads, but they don't produce revenues. So that will be a shift over time. And this all together with the fact that in Q1, you always have fewer days than in Q4. So in general, the pure seasonality independent of all growth dynamics that you have within the unit, usually could have, if there was no growth at all, you should have always lower revenues in Q1 and Q4. So these are the factors in growth. But overall, as I've said, we expect on a full year basis to grow the B2C segment a little over 10%.
Operator, any further questions?
There appears to be no other questions at this time.
Okay, well then, thanks a lot to listening to us and your trust in XING. Have a nice day and hear you back for the next quarter. Bye-bye.