AutoScout24: strong growth despite weak spots
08 Nov 2017
Once again, AutoScout24 (AS24) pulled more than its weight, despite weakish performances of some adjacent products. Perhaps the best news: ImmobilienScout24 (IS24) grew the number of its German core agents (clients) in Q3 for the first quarter this financial year.
Scout24 total revenue rose 8.3 percent to €354 million ($410 million U.S.) in the first nine months of FY2017, up from €326 million ($378 million U.S.) in the first nine months of FY2016. EBITDA grew 10.7 percent y-on-y to €186 million ($216 million U.S.). Total revenue grew 8.7 percent in Q3 to €120 million from €111 million in Q3 of FY2016.
In the first nine months of FY2017, AS24 revenue grew to €127 million, a 14.8 percent increase over the same period in FY2016 (€111 million). EBITDA reached €62 million, an impressive jump of 30 percent y-on-y, with an EBITDA margin of 49 percent after nine months of FY2017.
Main contributors to growth were increases in dealer prices and in the sales of visibility products in core markets Germany, Benelux and Italy, said CFO Christian Gisy in an investor/analyst call today.
Weak spots so far this year have been flat growth in Spain, where AS24 holds the No. 3 spot, and a “less dynamic development” in other dealer revenue, namely Express Sale, the German site’s lead-generation tool that enables consumers to sell autos to AS24 dealers through an auction model. Also slower in the first nine months of FY2017 have been sales of third-party display ads, said Gisy.
Responding to a question about the impact of CarGurus’ launch in Germany in June, Gisy responded that he hasn’t noticed any impact because AS24 (and market leader Mobile.de) have both introduced price evaluation tools this year that do what CarGurus does. “Both verticals have taken the oxygen out of the selling proposition of CarGurus,” he commented.
In the first nine months of FY2017, IS24 revenue grew to €222 million, up five percent from €212 million in the same nine months of FY2016. In Q3, revenue grew almost six percent to €75.5 million. EBITDA for the 9-month period was €139 million, a four percent increase over the first nine months of FY2016, and the EBITDA margin stood at an amazing 62.5 percent.
Revenue generated from core agents grew a modest two percent y-on-y, but what lifted the boat was revenue from so-called adjacent products, which grew 12 percent y-on-y in the first nine months, and 14 percent in Q3. Gisy explained that most of this came from b-to-c services along the value chain, such as consumer credit checks (Schufa) and relocation services. “We are growing very nicely here,” he said.
IS24 added around 200 new agents in Q3 to bring its total to around 17,230 – the highest number this year, and only slightly less than it had been at the end of FY2016. Gisy said he expected this trend to continue into Q4. He also claimed IS24 has been winning core agents back who had quit the site after the introduction of the “landlord-pays-agent rule”.
Scout24 promised to give a deep dive into the businesses at its Capital Markets Day presentation on November 14. We’ll cover it, of course.