Scout24 Grows Revenue 15% in Q1 as Revenue Diversification Pays Off

The market-leading German real estate portal operator Scout24 has released the results of its Q1 activities. Notable figures from the company's report include:

• Revenue up 15% overall to €107.9m with revenue from consumers up 27%
• Ordinary operating EBITDA up 6.5% to €58.6m
• Earnings after tax dropped by -17.7% to €20.1m

Over the last few years, Scout24 has been on a well-documented transformation to diversify its revenue streams and zero in on real estate transactions. A big focus for the company has been monetizing home hunters through its consumer subscription products. The company now reports three segments: Professional (revenue from agents), Private (revenue from consumers) and Media & Other.

While revenue from professional clients grew 11% on the corresponding period of 2021 and Media & Other grew 7.5% on the back of a strong Austrian business, Scout24's revenue from consumers grew by 27%. The portal's 'Plus' subscription products continue to be a hit with consumers with the number of subscribers having increased 86% year-on-year from around 152,000 to now stand at around 284,000.

The revenue growth in Q1 came despite an 11% drop in listings over the period. Individual users of the portal were also down by -9.2% (15.9 million), a decline which was put down to the war in Ukraine, although app usage was up slightly at 4.7m.

"Scout24's strategy of quickly rolling out transaction-based products is gaining traction amid strong customer demand. This has given us a successful start to the first quarter. Our path to a digital transaction platform not only creates added value for our customers, but also great sustainable growth potential," comments Tobias Hartmann, CEO of Scout24.

Investment in marketing, especially around seller lead generation and the company's property management platform Vermietet.de, meant that although operating EBITDA increased by 6.5%, the company's margin contracted by 4.4 percentage points compared to the comparison period. The drop in earnings after tax was chalked up by Scout24's report to "declining prices on the global capital markets as a result of the Ukraine war, supply shortages and rising inflation rates".

"Throughout the remainder of 2022, we will continue to focus our investment plan on the five value drivers presented at the Capital Markets Day in order to sustainably increase our growth potential. The impressive Q1 2022 growth demonstrates the success of this strategy. At the same time, we are continuing to optimise our capital structure and launched another share buyback programme of up to EUR 350 million in March. Furthermore, we have proposed a dividend payout of around EUR 67 million for the 2021 financial year," adds Dirk Schmelzer, CFO of Scout24.

Scout24 is on track to achieve annual revenue growth at the upper end of company guidance of 11% to 12% and earnings growth of 6% to 8%. Investors are likely to be pleased not only by the company's performance and diversification but also by rumours doing the rounds that Scout24 may be the subject of a takeover bid which may value the company at €80 per share (a €19 premium on the stock's current price).