Scout24, the leading operator of digital marketplaces specialising in the real estate and automotive sectors in Germany and Europe, has announced strong financial results for 2016 and turned its attention to its performance in 2017.
- Strong top-line growth with revenues up 12.3% to EUR 442.1 million
- Surge in profitability with ordinary operating EBITDA up 18.4% to EUR 224.5 million yielding a margin of 50.8%
- 20.4% increase in cash contribution supports deleveraging
- Positive outlook for the financial year 2017: high-single-digit revenue growth and continued margin expansion
Scout24 CEO Greg Ellis said the group’s strong performance in 2016 was due to debt reduction and a focus on new digital products
“2016 was another very good year for Scout24,” Ellis said. “We maintained our growth momentum, delivering not only world-class digital services but also record-breaking financials. Next to top performance of our core verticals, product innovations through Scout24 Media have begun to pay off. Based on our proven ability to generate high cash flows, we were able to further reduce debt reaching a leverage ratio of 2.82:1at the end of 2016.”
The company’s property portal grew external revenues by 6.7 % in the reporting period compared to 2015, according to the company’s press release. As in the previous year, the largest revenue share is attributable to revenues from core agents, which were up by 4.9 %. This revenue growth was driven by strong ARPU growth of 18.1 % to EUR 711 for the full 2016 year (2015: EUR 602), partially offset by a declining number of core agents.
The number of core agents decreased by 1,944 to 17,411 at the end of December 2016 due to churn and shifts to the professional pay-per-ad model, as well as some agents leaving the market in response to the so called “Bestellerprinzip” introduced in June 2015 and market conditions in Germany. As customer migration to the membership model continues, 86.9 % of the approximately 90.0 % of core agents to which the membership model was offered in 2016, have already switched. Initiatives in the field of services across the entire real estate selling and rental process, driven by the Group-wide Scout24 Media function, contributed primarily to the 10.7 % growth in other revenues. Most important, IS24 further expanded its market position during the past financial year.
Though the overall number of listings on the IS24 platform reduced slightly in 2016 (around 466 thousand listings vs. 504 thousand listings) in line with the market trend, market share expanded and the number of listings compared with the next competitor went up from 1.4 x in 2015 to 1.6 x in 2016.
Based on its extensive content offering, IS24 also maintained its leading position in terms of consumer traffic and engagement. An average of 72 million visits per month (2015: 72 million) resulted in an average of 477 million minutes monthly time spent (desktop and mobile, 2.6 x vs. closest competitor). Supported by the “mobile-first” approach the average number of visits via mobile devices grew by 9.6 % now accounting for 68.6 % of total visits (63.2 % in 2015).