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Welcome everyone to Scout24's Q3 2020 earnings call. I am Ursula Keret, Head of Investor Relations at Scout24. I have Tobias Hartmann, our CEO, and Dirk Schmelzer, our CFO, with me on this call. Tobias will talk about the key events for Scout24 in the third quarter, including an update on the current COVID-19 situation in Germany. Dirk will then cover our nine-month and Q3 financial performance in more detail. After the presentation, we are available for your questions. The presentation slides are available for you on our website, and you can follow us live if you use the web link. I hand it now over to Tobias.

Thank you, Ursula, and welcome, everyone. I'm speaking to you today from our Berlin office. While Germany is currently going through a so-called lockdown light phase, business activities are ongoing. After a careful review of our office rules and protective measures at Scout24, we concluded that they are in line with the government regulations. Therefore, we continue to offer our employees the possibility to voluntarily work from home or the office. By the way, This is one of the last meetings we are holding in this specific office building here in Berlin as we are in the process of moving into a brand new building right next to Berlin's main train station. This is a good and life example that despite COVID-19 and some resulting slowdowns, our company as well as the real estate market are functioning and intact. Looking at our Q3 performance, I'm reiterating what I said in Q2. The Scout24 Group's business model is proving to be resilient and robust during the COVID-19 pandemic. Q3 accumulated nine-month revenues increased by 1% year-on-year. And this despite the fact that the free-to-list initiative for private listers was maintained in the third quarter and the third-party media business continued to decline. We are therefore well on track to achieve our forecast of almost stable full-year 2020 revenues, which we published in August. In parallel to slightly growing our revenues in Q3, we stepped up investments in our strategy again. For example, we launched a very meaningful marketing campaign, which we had originally planned for Q2. This multi-channel campaign is fully in line with our strategic objectives and emphasizes the importance of all our three stakeholder groups. By encouraging selling homeowners to sell their property with a real estate agent, we further promote digital farming, i.e. help agents to find their next mandate digitally through our platform. Of course, this marketing campaign comes at a price reflected in a slightly lower Q3 ordinary operating EBITDA margin than last year. For the nine-month period, however, the margin has slightly increased to 60%, which is like for revenues in line with our annual forecast. Q3 is the first quarter where we included Immo4Kauf24 in our financials. The integration of the acquired business is progressing well, and we are successfully expanding our homeowner platform. The revenues of Immo4Kauf24 are included in the residential real estate segment as part of the realtor lead engine revenues. Innovation remains at the heart of our strategy. In Q3, again, we significantly invested into our existing product suite while also launching new products. Product enhancements include our home seller hub, the agent directory, and our native app. Examples for new products are the digital rental contract with digital signature, the landlord subscription, as well as new membership additions for property managers and developers. These are excellent examples for our continued investment into the growth of our platform. While we are navigating through these challenging times and closely monitoring the short to mid-term effects on our ecosystem, we are seizing every opportunity to further consolidate our leadership position. As for the nine-month period, In a challenging environment, we have delivered a resilient performance and are taking the positive momentum into the rest of the year. Let me walk you through our key performance metrics on page four. As already mentioned, our nine-month revenues grew by 1%, reaching 263 million euros. Our group ordinary operating EBITDA margin increased by 0.8 percentage points to 60%. This is mainly due to the successful implementation of cost efficiency measures as well as COVID-19 cost savings in Q2. I am very pleased that from a nine-month perspective, we also managed to grow our ARPUs. Residential real estate ARPU grew by 2.1%, business real estate ARPU increased by 0.5%. Even more impressive, in Q3, again, we were able to grow our agent base by 5.5%. With 20,005 core agents subscribing to our product, we have now officially cracked the 20,000 mark. On listings, we are down by 4% versus the nine month in 2019. As I explained already in Q2, this is due to several effects. A general trend of a declining number of sales transactions while the transaction value increases. a decreasing relocation activity leading to a lower turnover of houses and apartments, reduced standing times of listings, especially in the top seven cities with the highest volume, and not to forget a still significant gray market. 14.5 million unique visitors per month on average for the nine-month period, growing at 8%, underscores our distinct leadership position in traffic and the highly relevant supply of listings on our marketplace, even during COVID-19 times. Sessions grew by 11.5% year on year to circa 107 million visits or sessions per month. You might have noticed that the growth slowed down a bit compared to the numbers we showed in Q2. This is mainly due to technical changes in the collection of data following recent updates on cookie content. Let's turn to page five where we show you some print advertising examples of our ongoing marketing campaign. For obvious reasons, we did not go live with this campaign in Q2. But mid of September, we were ready for it. We launched a multi-channel marketing campaign that circles around the topic, sell better with an agent. For the first time in six years, it also included extensive TV advertising. With this campaign, we are addressing the needs of our three user groups. We are staging our professional customers, the real estate agents, as key to a successful sale journey. We are doing this because we want to strengthen our partnership with the real estate agents, as we have also demonstrated with our COVID-19 support program. At the same time, we want to become the number one point of contact for home sellers to enhance our leads business. Hence, the acquisition of Immo4Kauf24, the further development of the Home Seller Hub, additional performance marketing activities, just to name a few initiatives. And lastly, we want to show consumers who spend more and more time on our marketplace how we can make life easier for them, helping them for a life-changing decision with maximum transparency and a personalized home search journey. Now let's move to page six. You're already very familiar with this triangle summarizing our three key user groups. Today, I want to show you how we've enhanced our digital offering for each of these groups in Q3. Let me pick some examples from this slide. For agents, with our new three membership additions, we have a very comprehensive product set in place. Since the launch in November last year, and despite COVID-19, we managed to migrate already 30% of the targeted customer base into the new memberships by end of Q3. Just for your reference, at the end of June, we stood at 20%. we are planning to reach the 100% migration target by mid of next year. For property managers, who we count as agents focusing on rent transactions, we also launched a new membership edition in Q3. The products and services included cater for the specific needs of those professional customers in the rental journey. Last but not least, in September, our agent software company FlowFact presented its latest product world for real estate agents. This consists of three different packages depending on customer size. Customers who are also ImmoScout24 customers benefit from several advantages, both in terms of price and due to specially designed interfaces. For the benefit of consumers, we introduced several native app improvements catering for better user experience. Like in Q2, with an ongoing free listings initiative, we are seeing an increasing number of consumer subscriptions. The plus 74% year-on-year for the METO Plus products speak for themselves. For the recently introduced KUIFER Plus product, we already counted more than 6,000 subscribers at the end of Q3. We also added the option of a digital signature to the digital rental contract, which makes life easier for both consumers and homeowners. This brings me to our third user group. I already mentioned that we have continued the free listing initiative in Q3, which attracts more homeowners to our platform. It works like a free trial offer valid for a period of maximum two weeks. At the same time, the number of contact requests is fenced. If the advertiser needs additional services, costs will be incurred, which will result in additional revenues for Immoscout24. By the way, While placing the free ad on our marketplace, we make the users aware that calling on an agent might be advantageous to them. This ultimately fuels our leads business, which gets an additional focus with the acquisition of Immo4Kauf24. With the integration of this business, we are growing further along the home selling journey, thus enhancing our leading position in homeowner-related traffic and leads. In Q3, we have connected more than six homeowners with agents and therefore provided 36% more leads than in Q2. Adding the leads from Immo4Kauf24 on top of that brings us to over 14,000 leads in Q3. This clearly demonstrates our strengthened homeowner base, which allows us to tap into the mandated acquisition market even faster. Before I continue, let me summarize this page as follows. The pandemic came completely unexpected. And I'm afraid it will keep us busy for some time. How long? We cannot say here and now. What we do know, despite the prevailing uncertainty, is that the digitization of the German real estate ecosystem is accelerating. And we are playing an important role here with the continuous enhancement of our digital offering. What is the current pandemic situation in Germany and how does this affect our users and business? Let's take a look at page seven. Germany is currently in a so-called lockdown light mode. It started on November 2nd and is so far expected to last until the end of the month. The government will evaluate the infection numbers and decide whether an extension or any other measures are deemed necessary. We expect to have a first review by next week. The current contact restrictions in place mainly apply to the social life, which means a maximum of 10 people from two households can meet. Restaurants, bars, entertainment facilities are closed. Schools and kindergartens remain open and most corporate business activities like those of agents and notaries are continued. As I mentioned in the beginning, where possible, home office should be allowed. During this phase, we continue to stay close to our customers. We inform and educate our agent customers on the current situation through a dedicated website and through our customer care teams. As an example, we train residential real estate agents how to perform digital viewings in a most effective way. Because even if individual viewings are still possible, home seekers might be more reluctant to physically meet with an agent. In the business real estate arena, there is more pressure from a macro perspective. While we are still seeing increasing prices in residential real estate, a proof that rental and purchase transactions continue to take place, the commercial real estate market is hit harder by the COVID-19 pandemic, both short and medium term. Having said that, so far, we only see minor impact on the outlook for the current financial year. Talking about minor impacts, our listing and traffic analysis after one week of lockdown light mode does not yet show any meaningful negative effect. Other than in the March lockdown, we see an almost stable development of users, listings, and sessions in the first week of the lockdown light period, while email inquiries in reaction to listings even went slightly up. Let me summarize. COVID-19 continues to cause various challenges for our user groups in our own operations. Over the last month, we have demonstrated that we have a responsive and agile organization in place. While continuing our strategic path, we reacted to the crisis with the right products and support measures. Our nine-month results prove that we have a resilient business model and our growth drivers are intact. With that, I hand it over to Dirk to guide you through our financial performance.

Thank you, Tobi, and welcome, everybody. On slide eight, we summarized our nine-month and Q3 financial performance. With 262.6 million euros group revenues, we achieved a growth of 1% versus the nine-month period in 2019. This is a result of a strong Q1 with 5.6% revenue growth, a Q2 hit by COVID-19 with a revenue decline of 3.5%, and the third quarter, where we saw a slight increase in revenues again. Q3 revenues were at 89.6 million euros, 1% up year on year. This includes the revenues of Immo4Kauf24. We are very pleased to have been able to demonstrate growth in Q3, despite the ongoing pandemic, despite maintaining the free-to-list initiative for private listers, and despite the continuous softness in the third-party advertising business. The beginning of the year marked a strong momentum where the first success of our membership migration became visible and our B2C business showed significant growth. The economic consequences of the COVID-19 pandemic materialized towards the end of Q1. In Q2, our COVID-19 support program kicked in. While contractual agent revenues grew due to spillover effects, we focused on customer retention and paused price increase discussions. Consumer subscriptions even showed accelerated growth with an increased number of listings due to the free-to-list initiative. We have continued this initiative in Q3 and in view of the very positive effects on consumer subscriptions, we will continue to do so going forward. Particularly because of the short-term cost cutting measures introduced in Q2, The group's ordinary operating EBITDA rose by 2.4% to 157.6 million euros in a nine-month comparison, outpacing revenues. Accordingly, the nine-month ordinary operating EBITDA margin was up 0.8 percentage points year-on-year at 60%. In Q3, mainly due to higher marketing expenses, the ordinary operating EBITDA margin decreased slightly by 0.5 percentage points to 58.2%, while the absolute group ordinary operating EBITDA amount remained almost stable at around 52 million euros. As you can see on page 9, the quarterly ordinary operating EBITDA margin of ImmoScout24, it asked all three segments combined came out at 61% in Q3 2020 versus 63% in Q3 2019. The decline of two percentage points is also a result of recurring dis-synergies following the sale of AutoScout24. I will come to the operating expenses later. The residential real estate segment showed a strong year-on-year growth with revenues up 3.3% to 64.9 million euros. This was mainly due to contractually secured revenues from professional customers like agents, finance customers and property managers during the COVID-19 crisis. These revenues were up by a strong 5.7%. They include the revenues of ImmoVerkauf24, which are allocated to the Realtor Lead Engine revenues. Revenues from consumers decreased by 1.6% in Q3. This decline is due to foregone revenues resulting from the free listing offer for private listers. As I mentioned before, part of these could be compensated by strongly growing consumer subscription revenues, which increased by more than 30% in Q3. While growing on a nine month basis, the margin decreased by two percentage points to 61.4 in Q3. The decline was a result of our free listing offer and increased marketing spend on growth initiatives. The Immofacauf24 activities also impacted that margin. On the background of a tougher macro situation, the business real estate segment revenues slightly decreased by 1.5% to 17.1 million euros in Q3. Revenues with project developers were soft due to a lower number of projects and the partial booking of lower priced packages by project developers. This was partially offset by an uptick in contractually secured revenues with business real estate agents. The ordinary operating EBITDA margin of the business real estate segment remained almost stable quarter on quarter, coming out a bit below 70%. The media and other segment, which contributed only 8% to the total group revenue in Q3, was mainly impacted by an overall decreasing ad sales market, which is accelerated by COVID-19. Revenues from third-party advertising alone accounted for only 2% of total revenues in the third quarter after a year-on-year decline of over 30%. The subsidiary FlowFact recorded declining revenues due to the ongoing change from licensed payment models to a software-as-a-service model. ImmoScout24 Austria showed above average growth despite COVID-19 with a revenue increase of 5.5% in Q3. The ordinary operating EBITDA margin of the media and other segments fell by 8 percentage points year on year to 38.6%. Let us now take a closer look at the very solid customer and APO development. As Tobi mentioned before, we have cracked the 20,000 customer mark. The number of residential real estate partners grew by 6.5% year on year to 17,216 partners at the end of Q3. APU for the third quarter was at 703 euros, 2.1% lower than the previous year, but 1.9% higher than the previous quarter, which was more heavily impacted by COVID-19. Over the nine-month period, residential real estate APU increased by 2.1% to 709 euros. The number of business real estate partners fell slightly by 12 partners year on year to 2,789 as of September 30, 2020. APU for the third quarter was at 1,715 euros, 2.6% lower than in the previous year. This decrease is primarily due to lower revenues with project developers. On a nine-month perspective, the business real estate APU increased by 0.5%. Turning to page 11. Let us go through the main ordinary operating items affecting the margin development. Own work capitalized has increased significantly by 34% in Q3 and 64% in the nine month period. This is due to our various innovation initiatives. Toby has mentioned before that we strongly invested into our existing product suite while also launching new products. Personal cost decreased by 3% for the 9 months and 1% for Q3, mainly due to efficiency improvements, although Q3 includes the personal expenses of Immofacauf24. This line does not include share-based compensation, which is considered a non-operating effect. Marketing expenses show an over-proportionate increase by 7.2% in Q3. This is due on the one hand to the multi-channel marketing campaign postponed to this quarter and on the other hand to the resumption of performance marketing activities, for example, for the Realtor Lead Engine product and consumer products. This figure also includes the online marketing activities of Immofacauf24. In a nine-month comparison, marketing expenses fell by 4.7%. The increase in IT expenses slowed down in the third quarter of 2020 as the migration of our data center to cloud-based solutions is largely complete. Nevertheless, the use of cloud solutions suggests that costs will continue to rise as business volume increases. Other operating costs include other selling costs, consulting, and for Q2, bad debt provisions relating to Liquidity+. Adding the own work capitalized to the revenues and deducting the operating cost brings us to the ordinary operating EBITDA, which amounted to 52.2 million euros in Q3 and 157.6 million euros for the nine-month period. On page 12, you see the items below the ordinary operating EBITDA line. Non-operating costs decreased strongly by 53.1% for the nine-month period and by 2.1% in Q3. This includes a lower share-based compensation in Q1 and Q2, which then increased in Q3. In addition, M&A-related costs were lower year on year. As a result, the reported EBITDA increased by 19.8% in a nine-month comparison and by 0.7% in a Q3 comparison. Regarding the key items below reported EBITDA, I will concentrate on Q3. Depreciation and amortization decreased by 9.3% due to lower IT equipment depreciation and PPA amortization. The financial result improved by 63.5% to minus 1.4 million euros due to lower interest expenses after debt repayments and to positive effects from investments in special funds. Tax expenses at 10 million euros were a bit above previous year's level. Net income amounted to 20.5 million euros, an increase of 21.3% versus Q3 2019. This translates into a basic EPS of 20 euro cents. This is calculated with an average number of 101.5 million shares. It is without treasury shares. By the way, the nine-month EPS shown in the table does not consider the after-tax result from the discontinued operations, which would include the capital gain from the AutoScout transaction. Talking about the AutoScout transaction, let us now turn to page 13. Since the transaction, we reduced our debt balance by a total of 680 million euros, which brings us to a current loan volume of 252 million euros. As per end of September, we have settled share buybacks in cash with a total amount of 317 million euros. As you will see on the next slide, this cash settlement does not account for the total value of repurchased shares at this point. Deducting M&A costs, the May dividend payment in taxes and adding the Q2 and Q3 operating cash flows, the performance of the special fund and other non-recurring items, brings us to 1.888 billion euros of available funds at the end of Q3. This includes cash invested in money market and special funds. Such investments are based on clearly defined guidelines to reflect liquidity needs and control risk exposure. Moving on to page 14, this one starts with the available funds position of 1.888 billion euros I just mentioned. We have then outlined the key pillars of the top 1.69 billion euro capital return roadmap, which we have initiated following the sale of AutoScout24. The up to 490 million euro share buyback program, which we commenced in April 2020, forms the first pillar of this. As per end of September, we have successfully repurchased shares with a total volume of circa 330 million euros, which has further increased to circa 404 million euros at the end of October. following the repurchase of the outstanding up to 160 million euros under the first share buyback we intend to launch an additional up to 200 million euro share buyback in 2021 in order to comply with existing regulations we will redeem shares to ensure that our treasury share position does not exceed 10 of our prevailing share capital in addition to the 2020 dividend payment The up to 1 billion capital decrease via buyback tender in the first half of 2021 represents the key pillar of our capital return roadmap, which we will cover in detail on the following slide. On page 15, you can see the key terms of our announced buyback tender, for which we have already received shareholder approval in our last annual general meeting. As mentioned previously, we have opted for this route as it is the most effective and efficient way to return capital to our shareholders. In order to deliver on our path towards our target capital structure, we will repurchase up to 27.88% of our current share capital at a fixed share price via a public tender offer. We will announce the resulting tender ratio and offer price before the launch of the buyback tender. The most important feature of this buyback will be tradable tender rights which shareholders will receive pro rata to their existing shareholding. These tender rights offer our shareholders a high level of flexibility as they can either exercise their rights, acquire additional rights or sell rights depending on whether they want to keep, increase or decrease their shareholding. The tender rights ensure an equal treatment of all shareholders and provide shareholders certainty on the tender acceptance while at the same time avoiding a share overhang. In terms of timing, we plan to execute the buyback tender following the publication of our full year 2020 results and before our 2021 AGM. Now moving to page 16. As Tobi already indicated in his opening remarks, our nine-month performance shows that we are well on track towards our full year guidance formulated in the half-year report on August 13, 2020. The month of October developed largely according to plan two. Therefore, despite the strong resurgence in COVID-19 infection numbers and the lockdown light measures announced by the German government from November, we confirm our outlook for the full year 2020. In line with that, we expect group revenue for the full year to be around previous year's level and the group's ordinary operating EBITDA margin to reach around 60%. With respect to segment revenues, we expect our residential real estate revenues to be stable or slightly up. The further rise in residential real estate prices in the third quarter shows that rental and purchase transactions continue to take place in this market. And agents and consumers are increasingly using our digital products. The commercial real estate market is hit harder by the COVID-19 pandemic, both short and medium term. Having said that, we expect this to have only minor impacts on the business real estate outlook for this year. We therefore see business real estate revenues to be stable or slightly decreasing. And lastly, we expect media and other segment revenues to decrease in the low teens percentage area, mostly driven by decreasing advertising revenues. The aggregate EBITDA margin for the three segments is expected to come in at around 62%. Of course, this guidance is based on the assumption that the currently known lockdown light measures will not have a significant impact on our business with customers and users in November and December. And with this, I hand back to the operator to open the queue for questions.

If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one to ask a question.

We'll go ahead and take our first question from William Packer with Exane.

Hi there, it's Will from Exam B&B Paribas. Thanks for taking my question. Firstly, you delivered some healthy residential agent ads up mid-single-digit year-on-year. I suppose it's a little bit surprising considering the market backdrop and the listings down. Could you just talk to how you continue to achieve this and whether that's sustainable going forward? Secondly, my understanding is that one of the ways in which you avoid the discounting was by kind of bundling for 12 months or so no price increases. Should we therefore expect H1... growth to be impacted by that next year. And then finally, I think you were the last set of results that withdrew the longer-term guidance. Should we expect new guidance at the capital markets day in December for FY21-22? Thank you.

Hi, Will. This is Toby. Thank you for your questions. I'll start off with the first one where you ask about the development of the residential segment and how we accomplished this. As we had shared and we've intensified that also throughout Q3, we stayed very, very close to our partners during this certainly challenging time. What we saw is a trend where some of the partners had to decide who they'd like to do business with. And as you saw from our net gain also during this quarter, we were able to win some new customers, which is a great outcome. It was also underpinned by the fact that we launched a multi-channel marketing campaign that was really centered around the partnership with the real estate agents, which definitely was heard positively and showed our commitment, not just on paper, but actually following through. The last point with regards to your question here is there's uncertainty in the market and we try to be a stable partner. We have intensified our customer care operations. We've intensified our partnership with local partners, so we've actually regionalized even more so our sales coverage model, and we continue to be very, very close to the partners when it comes to any concerns that they might have to address. With that, I hand it over. Maybe, Dirk, you can answer the other ones.

Will do. Hi, Will. Will, first of all, to your question regarding guidance, I would like to handle guidance as we handled it in the first one and two quarters of this year. And that was basically once we had visibility, we shared that with you and we will continue to do so. I would like to remind you that we picked up guidance again in August and we are delivering on that for the end of the year. With regards to 2021, I think what we have to take into account that this pandemic has induced various restrictions, right? Be it lockdown, lockdown light, no lockdown mode. And those measures will remain in place for some time, weakening the macro outlook. This will continue to have an impact on our business in different shape and value, but I think across the board. Now, as I said in the beginning, let's share some learnings. Let's take a closer look at what we have learned over time and what of those learnings we have taken to take some longer term decisions based on these developments we saw. So to start off with, I believe the market for business real estate is affected by the crisis and it will continue to be affected. Over the course of 2021, the business for developers and commercial real estate agents will be very hard to predict. Growth in that market segment we believe will be moderate, if at all. The advertising market will remain volatile. Our dependency on advertising sales has significantly decreased. In the future, we will focus on ads that are very close to our product as usability and customer satisfaction improve with more specific and product-related ads. Revenues in the advertising market will not come back to previous levels. Pre-listings on a third element have proven to be a catalyst for improved reach and consumer satisfaction. Revenue downsides can particularly be compensated by improved and more diversified monetization levers that we see. So price per ad revenues will not come back to old levels. But the combination of revenue streams from membership models, leads business, upsell activities, these will improve and overcompensate the lost revenues in PPA in the future. And we will continue with free listings. The residential market itself has proven to be very resilient. You have seen our growth figures year to date in that segment. Membership packages are selling very well, and we have successfully addressed other markets, like lead generation. Lead generation revenues, we believe, will increase as agents seek new customers. Agent membership revenues will be driven by package upsell and price increases, as you mentioned them as well in your question. And both in 2021 will be balanced versus the financial health of our customer base and its net promoter score. So price increases will be very moderate and hence revenue increases will be moderate as well. So all in all, I would like to reiterate that our business itself is very resilient also going into 2021 and beyond. The structural growth drivers remain intact and we are well positioned to capitalize on them. As a market leader, we, however, need to act responsibly in context of continued uncertainties due to COVID-19. So in this context, I mean, no surprise we're here, but we are not guiding 2021. But I can assure you, once we have more visibility, we will evaluate the situation and see if we can revert, maybe also at the analyst day in December.

Thank you so much for that detailed answer. I suppose one thing you didn't talk about was the regulatory backdrop and any risk from best-seller principle. Should we interpret that as good news that you're not talking about that?

No, consider that I have talked about it a lot in the past, and I thought our thoughts on that haven't changed. And as we previously guided, we see the revenue impact of up to 5 million. That's what we previously mentioned on that, Will. But that's all baked into what I just outlined to you. And therefore, it will have an impact on 2021. But I mean, we have taken all the measures on the product side to come across with that. We are currently, Toby, correct me if I'm wrong, but having educated more than 2000 agents in Germany around the legal consequences of the Besteller Principe, and we use this also as a tool to educate our agents better in order to help them to monetize in the future. That's correct.

Thanks very much.

Welcome.

We'll take our next question from Joe Brantland with Credit Suisse.

Excellent. Thank you very much, Toby, Dirk. And so, Dirk, I think you may have answered about four of my questions just on Will's R2 question there. So thanks very much for that. Two from me. You touched on revenues across the group. On to cost. You spoke about having costs well under control currently. How do you think about costs into next year? And is a mid-single-digit percentage growth rate on costs across the businesses reasonable in 21 and 22? And then my second question on consumer is actually a bit stronger than I anticipated in 3Q. You mentioned that the free packages lasting only two weeks and the contract requests being limited. Can you give some more detail on the C2C revenues? If you could even give us the actual revenues for 3Q this year versus last year, just so we can understand the scale of decline within that business area. It sounds like it's maybe not as much as we previously thought. Thank you.

Yes, I start with the question on cost. Certainly, I outlined that on the previous quarterly calls we had. We try to keep structural costs under control. What you can see us doing is what Toby outlined also in his first part of our presentation today. We will keep investing into products, and you see that in improved CapEx here. With regards to personal costs, all other structural costs, we want to remain in the single-digit growth range. um but we will certainly improve and increase marketing spend mainly performance marketing next year with regards to improving our lead generation revenues and secondly we will increase sales cost as part of the consumer products that we are selling when it comes to business to consumer revenues for the quarter ending September 2020. We are looking at an improvement of around 35% year on year for the period Q3 2019 versus Q3 2020. So it's around 11 million euros for the quarter.

Excellent. Thank you. And then, so with regards to cost, you're effectively saying mid-single digits for most of your costs, but then incremental marketing and incremental sort of sales costs, effectively.

Yeah, mid to upper single digits, that's a reasonable figure, yes. Excellent. Thank you.

We'll take our next question from Lisa Yang with Goldman Sachs.

Good afternoon. Thanks for taking that question. I just want to follow up on one of the answers you gave earlier about the residential revenue next year being up moderately because price increase will be moderate. I think consensus today has residential revenue up 11%, so I'm just wondering, like, is your moderate implied that 11% could be too high? I think that's the first question. The second question is on ARPA growth. I'm just wondering why the residential agent output was down 2%. And I think previously you expected the free output to be flat beyond year, which would imply a bit of a return to growth in Q4. So I'm just wondering, do you think that's still possible? And maybe if you could give us an update in terms of where you are thinking in terms of resuming price increases for agents, that would be helpful. And the third question is on your comments about commercial real estate not having much impact this year, but will be having an impact mid-term. So I'm not sure if you can maybe quantify what's the potential impact on your revenue next year from commercial real estate. Thank you very much.

Lisa, yeah, let me start off with the latter one, maybe on commercial real estate. As I said, we cannot quantify it at the moment. We don't know how the market will develop. What we can tell you is that we believe earliest by summer next year, we as a company expect sort of our business life to come back to normal, right? People coming back into the office, using the office space, doing some work from home, but spending most of their time in the office. And that is a, I think, also a summary of the rest of the companies in Germany. And that creates a demand for commercial real estate. So can I tell you today how the demand will be mid of next year? Honestly, I don't think you will find anyone giving you a concrete answer on that, and neither do I. However, I don't think that this will cause a structural change for the commercial business when it comes to our business model. As I said at earlier times, even if companies decide to reduce their footprint, they are stuck in long-term lease agreements and they will need to sell sub-lease agreements. And those sub-lease agreements might be marketed on our platforms as well. So on that, I think we should be okay. On the overall APU development, I mean, as Toby outlined, Lisa, you have seen €709 for the nine months commencing 2020. compared to 698 for the full year 2019. So we're seeing a slight growth here. Yes, you are right. We saw Q1 being at 730 euros roughly and Q2 going down to 690 euros with regards to, on the one hand, pause price increases, but on the other hand, also lower um revenues in uh in the lead engine because we had the free to list initiative free to lead free initiatives here so we're now coming up in the third quarter to 703 million residential apu uh 700 euros sorry residential apple which is an increase against q2 so we are coming back to where we expect it to come um and then coming to the residential revenue I mean, as I said earlier on, some of the analysts, as you said, have a low double-digit growth in here. We are not guiding with regards to our residential revenue development next year. And as I said, as soon as we have better visibility on that, we will do so. Overall, I can think 2021 certainly being a year of growth for us.

not uh i won't tell you in which in which area that's going to be and can't tell you and lisa maybe this is toby maybe just to add on what dirk just said um we are very happy about the net growth also in terms of customers which is an outstanding result and obviously that has an impact on the output as well but again this overall as part of that growth we cracked the 20 000 mark which is um which is a good sign of what we're doing and that we're staying close to the partners and they need our support.

Right. And I was wondering if you can comment more specifically about when you're thinking of resuming price increases for agents and maybe you can comment on what competitors, your competitors have been doing or what you've seen so far.

Yeah, so the plan was, again, we are currently at about 30% of the migration in terms of total stack. The plan was to resume that again. Now, obviously, we have now COVID lockdown light mode. We don't know what is going to happen after the government will evaluate the situation next week. We have a good experience in terms of when is the right time to position that. So we are continuing at this point. but we play it by the year. We have to see what the developments are and we need to do the right thing to act responsibly. We've seen in other markets what it does if you overdo it and if you overstretch it. And so right now the status is, yes, we are migrating and we're continuing our migration, i.e. that means there's also price increases with the discounts that are running off for next year. And at this point in time, we reconfirm our objective that we would like to have that completed by mid of next year, 100% of the migration. But again, disclaimer, let's see what else happens as part of COVID-19.

Okay, thank you.

Very welcome, thank you.

We'll take our next question from Craig Abbott with Kepler Chevro.

Yeah, hi, good afternoon. Three remaining questions from my side, please. First one, a very simple technical question. Second one on commercial. And then lastly, a more strategic one. Just real quick, technically, I mean, I wondered if you could give us an indication of the scope impact of MOB and FACALF in residential revenues and earnings in Q3. It was a material. Second question is, you know, on commercial, again, I realize it's only, you know, 19% of group revenues, but I just wondered if you could give us kind of a ballpark figure how the split for your customers, your aging customers, breaks out amongst the various subsegments, i.e., office, real estate, retail, gastro, and warehouse, because obviously we're seeing strong investment in e-commerce-related warehouse capacities. But you mentioned in your presentation that gastro demand is obviously weak, and this will probably continue for quite some time. Yeah, that would be interesting. And the final question is a question I raised in the last call, more strategic. I know it's still early days, but what your thoughts may be in terms of any potential impact on the competitive landscape post Adaventa's recent acquisition of Klein and Sagan. Thank you.

Thanks, Craig. This is Dirk. First question on ImmoVerkauf24. You can assume that ImmoVerkauf has, for the second half of this year, will have between 1% and 2% of our overall revenues. So it's a roughly small part of the overall revenues. Group revenues. Yeah, yeah, group revenues. On e-commerce versus gastro in business real estate, I doubt that we have enough visibility to really guide to specific sub-segments of the business segment here. And therefore, to be really honest, we don't have enough visibility. Certainly, Gastro is affected by that and will continue to be affected next year. E-commerce, yes, they are profiting to a certain extent from the COVID development on the one hand. On the other hand, Most of the warehouses are built exclusively for certain companies and not necessarily marketed over the platform. So tough to say. On the third question, I would hand over to Tobi.

Yeah, hi, Craig. Thank you. As we had shared, we believe we have the right strategy in place. We are accelerating that strategy and we have not changed the strategy at all, despite or in context of COVID-19. You heard us talk about diversifying our monetization drivers, which is in full swing. You heard us talk about approaching differently the private segment and the private listings, which is in full swing. You heard us talk about getting closer to the key stakeholders of the system with a particular focus on real estate agents, including the marketing campaign that is in full swing. We do know now and we understand very, very well the interdependence of the private listings implication of going to free or to a fenced product and the gain in market share and gain in listings. And we also know how to monetize that in a different cycle. So we feel comfortable there. Now, having said that, we do know that competition is certainly getting stronger and not weaker. So we are fully aware of that. And that's why we try to do our homework this year. You saw product investments and our investments into new products also, plus in some add-on activities like Immo4Cal. So that's what we're doing. That's what we are focused on and concentrated on, and we stay course, but obviously we watch out for anything that happens and changes the picture.

Okay. Excuse me. Thank you very much. Thank you, Craig.

We'll take our next question from Andrew Ross with Barclays.

Great, thank you, and good afternoon, everyone. I've got two. The first one is on the membership migration, of which you're 30% of the way through now. Can you just give us a sense as to how you're thinking about this in April next year? Because you're kind of painting a picture where there could still be quite a lot of agents you need to migrate to the new model, but then there are also going to be some agents who are already migrated who are annualizing those deals, and you're going to be putting on, maybe putting their prices up. So that seems like a lot for your sales force to bite off. So which of those is more important and how are you thinking about strategy communicating to agents kind of in April, May next year? That's my first question. And then the second question has been a lot of helpful comments on the call around how we might directionally think about numbers for next year. But kind of putting it together, it sounds like residential will grow. We don't know how much. commercial or business will decline, and then other comes back a bit, and then you're talking about some pretty decent cost growth. So could we be in a position where EBITDA declines next year? It would just be helpful to get any clarity as to how you see the overall profit growth, or at least what the worst case would be if you can't get the pricing away. Thank you.

Hi, Andrew. Hi, Andrew. Thank you. I'll start off with the first one on the membership migration plan. We're not breaking this down by quarter where we'd like to stand. We think we've given enough evidence and data points and transparency where we are, where we kick this off, what happened then in between, and now we have another, you know, eight months to go to bring this over the finish line. We have certain levers. We've tested those levers. We know how they're working. Again, even under a certain impact of COVID measures, and we're confident that we'll get there. With that, Dirk, do you want to take the next one?

We'll do so, Andrew. Maybe to add one thing on what Toby just said on membership migrations, you need to keep in mind that we have cohorts which are equally split over the year. So as we migrate them, the burden on our sales force is also equally split over the periods of the year. Now, coming to your question on EBITDA guidance for next year, As I said, as we have more visibility on that, we will give you more input. But one thing I would like to keep you in the back of your mind is we have successfully managed our structural cost in the past, and we will continue to do so in the future. And secondly, when we see an opportunity to accelerate our growth, then we might invest additionally in selling costs, which are going in line with the consumer products we're putting out there. For example, the rental plus for consumers or with our lead generation business. So when we see an opportunity with improved marketing, performance marketing measures, affiliate marketing measures to improve revenue here, we might want to do that at the cost of a ROI at 100%, right? But we're certainly not going to increase structural cost next year, beyond what I just outlined earlier on, the five to six points.

Okay, so just to be clear, your guidance earlier on with the overall cost base would go up mid-single digits, I think. Have I understood that correctly? Absolutely, absolutely. Yes, yes, absolutely. Got it. Thank you.

We'll take our next question from Naila Nazair with Georgia Bank.

Great. Thank you. I have three questions from my end. Firstly, on the buyback tender that is planned for next year, could you just help us understand what happens if shareholders do not tender and you're unable to sort of buy back the volumes that you want and you're left with a lot of cash on the balance sheet? Is there a plan to deploy that cash, whatever gets left over? Some color around how you're thinking about that would be great. Secondly, on consumer revenue, you did mention that it was up 35%, but the overall sort of subsegment was down 1.5%. So what was the part of consumer revenue that was impacted? And also on the subscriber numbers, could you kind of give us an update as to how many you had? You mentioned that in Q2 it did dip slightly as, I guess, retention was tougher. Have you managed to pick up those subscriber numbers in Q3? Some color there would be great. Thank you.

Hi Nisa, it's Dirk again. I start with the letter, the subscriber numbers. If I look at Q3, we had around 6,000 subscribers on the Call for Plus. We had around 130,000 to 140,000 subscribers on the Rental Plus. And in the area, I think of 4,000 to 5,000 subscribers on the landlord product that we are offering. And that is a very healthy growth. Then coming to PPA revenues, I think I just told you that certainly there is a substitution effect from PPA revenues, which we had with consumers, substituted by subscription revenues. And this is what I outlined earlier on. And this is where the 35% growth is mainly coming from. And we are seeing that improving and increasing. On your first question, what happens if the shareholders do not tender? We will certainly not stop our efforts to buy back or give money back to the shareholders from the proceeds of the AutoScout transaction. So theoretically, if we are not able to tender, we have an option to ask for a super dividend at any given AGM, or we have an option to continue to buy back shares over the market. Our balance sheet for 2020, I think I can say that, gives us flexibility to do so. And we will watch that very closely. And in case we see the tender not being successful with regards to the buyback, then we're going to act accordingly and ask for additional. Thank you. It's rather a timing issue than an issue of do we do it at all.

Thank you. We'll take our final question from Marius Ferberg with Magorberg Research.

Yeah, thanks. Actually, just one left from my side. I noticed that the listings were down, whereas the number of agents were up, or the customer number. So is this a result of just less offering of flat or houses in the market, or this is a figure of less listings per agent? And in addition to that, could you elaborate a bit on the distance that you have to immobile with regard to this? Was this stable in Q3 or how to develop this?

Thanks, Markus. I think I kick off and Toby mentioned it already in his comments in the first part of our presentation today. There is four factors mainly influencing the number of listings. First of all, the relocation rate across Germany. And that relocation rate fell 10% over the past four years. We saw it going down from 9.9% to 8.8%. We also see a decrease in residential transactions. This is down roughly 1% year on year. and hence has an impact on the number of listings. What we also see as a third element of this is that the listing duration has been decreasing. That is, the throughput has been up, right, and therefore less listings at a given point in time on the platform. And fourth, there is a substantial gray market in Germany, and that is still in place given that we are still acting in a seller's market. Now, with regards to listing gap to our competition, I can confirm that this has not materially changed. As to our previous communication on that, there still is a listing gap of 1.9 to 2.2x, depending on which competitor of ours you're looking at.

Okay, thank you very much. There are no further questions at this time.

Well, thank you very much for joining our session today and tuning in. Thank you for the interest. Take care. Stay healthy. Bye-bye.

Bye-bye. Bye-bye.