Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Scout24 SE (SCOTF, Financial) reported a revenue growth of 8.5% in Q3 2024, contributing to an 11.4% increase for the first nine months of the year.
- The company's core agent membership business and private subscription segment showed strong performance, with membership business revenue growing by 9.0% during the quarter.
- The private subscription business experienced a significant growth of 27.6% in Q3, with the customer base surpassing 470,000.
- Scout24 SE (SCOTF) achieved a 16.1% growth in operating leverage and a 4.1 percentage point margin expansion in Q3.
- Adjusted EPS rose by 16.0% to EUR0.75 during the reporting period, indicating strong profitability.
Negative Points
- Transactional volumes in the real estate market remain lower than historical levels due to decreased buyer affordability.
- The market for commercial developers and new homebuilding remains challenging, with no clear signs of recovery yet.
- Demand for mortgage leads remains soft, impacting the transaction enablement segment.
- The ordinary operating EBITDA margin for the Professional segment decreased slightly by 0.1 percentage points to 62.5%.
- Non-operating effects increased by 41.4% year-on-year for the nine-month period, driven by higher accruals for share-based compensation.
Q & A Highlights
Q: When do you expect to see a substantive improvement in transaction levels in the German real estate market, and how will this impact your key business lines?
A: Dirk Schmelzer, CFO, explained that while transaction enablement grew by about 3%, indicating a recovery, a return to 2021-2022 transaction levels is expected in the longer term, around 2027-2028. The recovery will benefit their mortgage and seller leads businesses, with organic seller leads expected to increase. The core membership business will also profit from more transactions, ensuring the health of their agent base.
Q: Is the new level of customer numbers in the Private segment sustainable, and what is driving this growth?
A: Tobias Hartmann, CEO, stated that they are confident in reaching their target of 500,000 subscribers by 2026. The growth is driven by innovation and scaling of initial ideas, with a focus on providing more value to existing customers through services like LivingPlus and BuyerPlus, rather than just increasing subscriber numbers.
Q: Can you provide more color on the improved EBITDA margin in the Private segment and the guidance range for the ordinary operating EBITDA margin?
A: Dirk Schmelzer, CFO, noted that the Private segment's margin improvement is sustainable due to a dual vendor strategy on credit checks. The guidance for the ordinary operating EBITDA margin is not less than 61%, indicating potential for it to be above 61%.
Q: What are the key focus areas for M&A, and where are the new agent additions coming from?
A: Tobias Hartmann, CEO, highlighted that M&A will focus on strategic acquisitions in valuation services and data space to drive Professional segment growth. Dirk Schmelzer, CFO, added that most new agents are from Germany, with around 2,000 from Austria, aiming to reach 25,000 agents.
Q: Can you clarify the message on FY24 margins and the impact of mortgage leads on transaction enablement?
A: Dirk Schmelzer, CFO, clarified that the FY24 margin guidance is not less than 61%. On mortgage leads, he noted that while the market is seeing more refinancing, Scout24 is focused on profitable growth, expecting improvement in mortgage business performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
