Scout24 Reaps Rewards of Revenue Diversification and Booming Q4 in FY21 Results

The German real estate portal operator Scout24 has released a report on its activities for the 12 months ending 31st of December 2021. Highlights of the company's operations during the period include:

• Group revenue up 10.0% year-on-year at €389 million, Q4 revenue grew by 11.7%
• Ordinary operating EBITDA up 5.0% at €223 million, and up 6.3% in Q4
• Residential Real Estate revenue grew by 13.8% for the full year and by 16.6% in Q4 – strong
  core agent business benefitting from growth products
• Full-year guidance for 2021 met and outlook for 2022 confirmed

The company benefitted from what it called an "outstanding" Q4, particularly in the residential real estate segment where demand remained high and supply was very tight in the German real estate market.

Since outlining its strategy to investors at a capital markets day in 2019 the group has pursued a pragmatic approach to revenue diversification which has involved targeting all stakeholders in German property transactions, launching new consumer subscription products and moving into the increasingly popular seller lead generation model.

For company bosses, the goals set out in 2019 have largely been achieved in the two years since and the company is now in a position to enjoy the growth that its investment in diversification can offer:

“For more than two decades, Scout24 has been one of the pioneers in digitizing real estate brokerage. Time and again, we were quick to identify and drive new trends early. The same applies to our product innovations, which are paving the way to a transaction-supporting platform. These are currently not only our biggest growth drivers, they are also helping us to diversify our revenue structure and tap into new market potential that will sustainably drive our growth in the future,” said Tobias Hartmann, CEO of Scout24.

“We have achieved what we set out to do. Our growth products and acquisitions have added momentum to our core business. The strategy presented at the Capital Markets Day will deliver attractive double-digit growth in the coming years. To this end, we will continue to invest in employees, technology, and products, but also to distribute capital to our shareholders in the form of dividends and share buybacks. With that we create value for all our stakeholders,” added Dirk Schmelzer, CFO of Scout24.

Scout24's revenue diversification was confirmed in its latest set of results which saw its dependence on income from one-off listings decrease from 16% to 13% over the financial year. Its Immoverkauf mandate lead gen business and its 'Plus' subscription services also saw their revenue share grow over the period increasing +45% and +69% respectively on a year-on-year basis in Q4.

In terms of other operational metrics, Scout24's professional customer base increased by +3.5% on a yearly basis (20,711) while its ARPU (average revenue per user) increased by +8.4% for residential customers but decreased slightly compared to 2020 for business real estate agents (€777 and €1,787 for 2021 respectively).

The last two years have seen the company invest heavily in its revenue diversification but according to Scout24's yearly investor presentation, the company's cost base already reflects what it is calling "next level" investments. Despite personnel costs being up 21%, marketing costs up 17% and selling costs up 64% on FY2020, the company's EBITDA margins remained resilient, only dipping -2.7pp on the year.

Scout has bought back some €1.8 billion worth of its own shares over the last 2 years and today alerted investors to a further €350m buyback program which will be enacted subject to AGM approval in March.