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Welcome everyone to Scout24's Q2 and half-year 2021 earnings call. My name is Ursula Caret and I am Head of Investor Relations and Treasury at Scout24. I have Tobias Hartmann, our CEO, and Dirk Schmelzer, our CFO, with me on this call. Tobias will kick off the presentation with a summary of the H1 2021 key events. Dirk will then cover our Q2 and H1 financial performance in detail. We will then have time for your questions. As usual, you can find today's presentation on our website under financial reports and presentations. There you can also find our half year 2021 report. If you are using the web link we provided beforehand, you can follow the presentation live. This session will be recorded and the replay will be made available as quickly as possible after the event. Please be aware of the disclaimer on page 2 and let us now turn to page 3 where I hand it over to Tobi.

Thank you, Ursula, and welcome everyone. Let me start on page 3 with a short recap. From classifieds to ecosystem, that is the goal we set ourselves after the sale of the car classifieds business. How do we define ecosystem for real estate? It is where all participants of a real estate transaction come together, operate and interact. And there are multiple interaction and multiple transaction events. Therefore, we also speak of a market network. Although it had a temporary dampening effect on our revenues, the introduction of free-to-list acted like a catalyst to our ecosystem strategy. And as we were in the middle of a pandemic, we used the time to pursue our strategy more forcefully. I will show you later that the traditional classified revenues, i.e. the share of one-off listings, is now lower than the revenue share generated by each subscription and leads. This is the proof that the ecosystem strategy is working with an increasing momentum in the first half of this year, especially Q2. What are the most notable initiatives which spurred this development? On the agent side, we pushed the real Elite Engine product further, both with the ImmoScout24 and the Immo4Cow24 offerings. We continued to migrate our residential real estate customers into our new membership editions. Here, we intentionally decelerated the process to focus more directly on pricing discussions. In Q2, we felt an increasing demand and willingness to pay on the agent side, so took a very agile approach on price increases. You will see on the next slides how this helped our ARPU development. On top of that, the sales force managed to again win new customers and increase our core customer base. Initiatives on the homeowner side comprised a dedicated campaign to market our valuation tool, which ultimately led to increased homeowner registrations for the homeowner hub. And with the acquisition of Vermita DE, we are building out our offering for private landlords. For consumers, or better said, seekers, we comprehensively reworked our price atlas. You should take a look at it on ImmoScout24 under Search and Real Estate Prices. The Atlas comprises object data from 43 million properties. Here you can see sale and rent prices for archived and active listings, including information on price developments. Against the background of the tense market situation, we were able to accelerate Tenant Plus and Buyer Plus subscriptions and we launched a dedicated multi-channel marketing campaign in Lower Saxony to increase awareness of seekers in that region. Page 4 shows you how the increasing momentum translates into numbers. Our revenue growth of almost 10% was mainly driven by residential real estate, while the business segment is still suffering from the pandemic. Within the residential segment, the realtor lead engine was the strongest growth driver. This is fully in line with our intended strategy. We want to help agents drive their business by providing them with unique and valuable leads for winning new mandates. One third of the real elite engine revenues came from ImmoVerkauf24, which we acquired in July 2020. The reduced EBITDA margin is mainly a result of investments linked to our ecosystem strategy, including acquisitions. Without the acquisitions, the organic, ordinary operating EBITDA would have been higher at 60.1%. Another important contributor to our revenue growth was the residential partner ARPU. While in Q1 it only increased by 1.1%, the Q2 increase was 9.0%. Of course, part of this comes from Lab's corona discounts, another part from the growing reel-to-lead engine revenues. But the larger portion, approximately 5-6% increase, is driven by pricing. The growing agent base also had a positive revenue effect. Compared to last year, it increased by 3.4%. On the residential side alone, we managed to win approximately 650 new partners over the last 12 months. Homeowners, the second group in our triangle, grew by an impressive 88% year-on-year. So, we now have 640,000 homeowners registered at Immoscout24. All of these are potential sellers or landlords entering into a transaction, with or without an agent, at some point in time. The number of subscribed consumers also grew very strongly. by 62%. At the end of June, we counted 198,000 tenant plus and buyer plus subscribers. By the way, in July, we passed the 200,000 subscriber mark. I hope all these growth rates on this slide demonstrate the strength of our company strategy and the ability to execute against it. And I can assure you, there is more to come. At the CMD in December, I would like to share more insights with you where and how we are planning to navigate the company over the next couple of years. While our financials are very strong, we must be aware of the current market conditions. We have devoted a separate page, slide five, to the topic. The German real estate market is a seller's market. While there is strong demand, both on the buy and rent side, There is a meaningful supply gap, and the housing initiative of the German government has not yet led to a noticeable relief. Therefore, rent and sale prices continue to rise. On top of that comes a shortage of building materials, which was spurred by the COVID-19 crisis. Consequently, we continue to see listings decrease. This is a result of the supply gap and shorter standing times. There might even be a minor besteller-principe effect since five more federal states introduced the 50-50 commission split in January 2021. Our competition is affected the same way. Therefore, we were able to maintain our listings advantage at 1.9 times. As a consequence of the high demand, we are seeing usage and hence relevance significantly increasing. Mobile traffic went up by 20%, overcompensating the decrease in desktop usage on a year-on-year basis. Next to improved mobile usage, we believe this trend is due to the changed cookie content, which leads to a reduced measurability of traffic. By the way, we have changed the provider for the tracking of user traffic, hence the new split between desktop and app. For the year-on-year developments, we used like-for-like data. Monthly sessions on InvoScout24 were only slightly down by 3% to 107.2 million and therefore almost back at previous year's level. So taking into account the cookie content, the number of sessions on desktop and app together actually implies a significant increase in demand, especially since the lockdown too in November. So let us now look at the bright side of the equation. Bright because we have exactly the right products for this contracted market situation. And our customers are willing to pay for these products because we help them to cope with the market as it is. Proof points for this are the increased APU, the increased customer base, some agents having committed themselves to list more inventory on ImmoScout24, Agent satisfaction scores are at highest levels, especially amongst Acquisition Edition customers. By the way, with the migration continuing, we had 2,040 agents or 15% in the Acquisition Edition at the end of June. This represents an increase of 130% since December 2020. Acquiring new mandates is the biggest pain point for agents in the current seller's market. Our acquisition edition and also our realtor lead engine are exactly addressing that pain point. Let me give you some more facts on the realtor lead engine. Revenues from that product came in at 15.7 million euros in H1 2021. This represents an increase by 162% year on year. ImmoScout24 referred approximately 53,400 homeowner contacts to agents from January till June this year. And ImmoScout24 sold 840 commission share leads to agents in the first half of the year. Let me give you one more proof point for our high customer and consumer satisfaction. The demand for tenant plus and buyer plus product is increasing. These products help seekers to find their dream property despite the contracted market situation. Revenues from these products reach 25.1 million euros in H1 2021, an increase of 30% year on year. Let us turn to slide seven to have a closer look at this specific revenue portion. The consumer subscriptions are depicted in teal on this slide. Their revenues exceeded the one-off listing or paper ad revenues for the first time. The same holds true for the leads revenues, the yellow portion of the graph. The consequence, as intended, we are becoming less and less dependent on our traditional classifieds business. From classifieds to ecosystem, that is our stated strategy. Listings are a commodity nowadays. The monetization is shifting towards other revenues, which are linked to a sale or rent real estate transaction. And these revenue streams have a greater recurring character. Through our enhanced membership additions, the largest and orange portion of the graph, we continue to value the partnership with our agent customers. We want to be perceived as a business and transaction enabler. The acquisition of Immo4Kauf24 pays 100% just into that. And I can share with you that the integration of the acquisition is completed. Immo4Kauf24 has been part of the Scout24 family for a year now. With the sale of roughly 840 commission share leads, they generated €5.2 million of revenue in H1 2021 at an increasing rate. These leads led to 840 completed real estate transactions in Germany corresponding to a property transaction value of more than half a billion euro on a full year basis. To put that into perspective and give you an idea of the growth potential, the total market value of residential sale transactions was estimated at 215 billion euros for the year 2020. For Vermietet DE, we are following a similar, i.e., fast integration playbook as for Immo4Cow24. Step one of the platform integration has already started. The plan is that after the private landlord has found a tenant through Immo4Cow24, the customer relationship is shifted to Vermietet DE, where the rental contract is automatically populated with the necessary data, ready to be signed. Vermita DE then offers the landlord a comprehensive cloud-based toolkit to manage all tenancy-related processes such as tenant relationship management, preparation of utility bills, assembling tax declaration data, or obtaining information on the market value of the units under management. At this point in time, the sole focus of Vermita DE is still on customer acquisition. There is no material revenue generation yet. With the integration of Vermieter.de, we will substantially extend our product offering in a rental market that is key in Germany. The acquisition allows us to accelerate our product development efforts in this space by approximately three years. With this, I'm handing it over to Dirk, who will dive deeper into our H1 financials.

Thank you, Tobi, and a warm welcome also from my side. Tobi already dipped into our key financials at group level. Slide 9 now presents the segment view with a strong performance of our largest segment, residential real estate. Here, revenue increased by 13.6% to 140 million euros in half year one and 19% to 71.2 million euros in Q2. This growth was mainly driven by the revenue from our professional customers, which grew by 15.3%. As Tobi already mentioned, we saw a very strong performance of the Realtor Lead Engine product, which showed a revenue increase of 162% to 15.7 million euros, including the 5.2 million from ImmoVerkauf24. At the same time, the APO increased by 5.1%, from 709 to 745 in half year one 2021. Revenue from consumers also performed very well, increasing by 9.9% for the first half year and 18% for the second quarter. Our plus product subscription revenue was up by 30.5% to 25.1 million euros and thus clearly overcompensated foregone revenues due to free to list. Moreover, consumer subscriptions exceeded total listing PPA revenues for the first time, underlining the transition of our revenue mix from listings to transactions. While we are accelerating our ecosystem strategy through selected bolt-on acquisitions such as ImmoVerkauf24 or Vermietet.de, we are also growing the core. As you can see, our organic revenue growth in half year one was 9.7% to 135.2 million euros. The ordinary operating EBITDA margin of the residential real estate segment came in at 60.1%, which is 3.4 percentage points below the previous year. On the one hand, this has to do with higher operating costs, for example, resulting from the acquisitions. On the other hand, the margin development reflects the change revenue mix associated with our market network strategy, with the recent acquisitions strongly contributing to this strategy. Organically, the ordinary operating EBITDA margin would have been at 62.9%. The business real estate segment revenue is still affected by the consequences of the pandemic, but was doing quite well in the second quarter, where segment revenues increased by 2.4% to 17 million euros. This is due to stronger growth in revenues with project developers and new home builders, while revenue with business real estate agents showed signs of stabilization. First half year 2021 revenues were still down 0.8% to 34.3 million euros with a slightly improved ordinary operating EBITDA margin of 72.3%. The media and other segment revenue increased by 1.1% to 15.2 million euros in the first half year and by 4.2% to 7.6 million in the second quarter 2021. This is mainly attributable to our fast-growing business at ImmoScout24 Austria, while the third-party media business and FlowFact are still showing decreasing revenues. The ordinary operating EBITDA margin of the media and other segment fell by 4.2 percentage points to 36.2% in the first half year 2021. All segments combined, we achieved a revenue growth of 9.6% to 189.5 million euros, and an even stronger plus of 14.4% to 95.8 million euros in the second quarter of 2021. The latter being against a pandemic affected prior year quarter. Organically, our half year one revenue growth was 7% to Euro 184.7 million. The change in revenue mix combined with a lower increase in absolute ordinary operating EBITDA resulted in a margin of 60.4% in half year one 2021. Again, organically, this would have been significantly higher at 62.4%. We already mentioned the continued customer growth and the APU increase. Slide 10 gives you the customary quarterly and half-yearly overview by segment. Looking at the residential real estate partner APU increase by 9% in Q2, you need to take into account the following effects. Part of the increase comes from corona discounts running out. The increase is spurred by the growing realty lead engine revenues. The growing agent base, however, creates downward pressure on the APU as it mostly applies to smaller agents. Therefore, approximately 5% to 6% of the increase is purely driven by pricing. Looking at the membership alone, the like-for-like APU increase is even higher. Turning to page 11, let us go through the main ordinary operating items affecting our margin development. The respective cost-based effects reflect mainly the ongoing implementation of our market network strategy. OwnWear Capitalized increased to €12.3 million in the first half year with a growing capitalization ratio of 6.5%. This ratio reflects our continued product enhancement activities. Examples of product investments we made in the quarter include further developments of the Home Seller Hub, the Plus products, the Membership Editions and the Price Atlas Tobi mentioned before. The total ordinary operating cost increased by 17.1% year-on-year to 91.8 million euros, outpacing revenue. This increase is mainly related to the change in revenue mix. It includes the additional cost of ImmoVerkauf24, which was not yet part of the Scout24 group the year before, and Vermieter.de. For example, the 16% increase in personal cost is mainly due to the integration of ImmoVerkauf24 employees. Additional costs were incurred due to an increase in personnel at ImmoScout24 and disk synergies after the carve-out of AutoScout24. You will also note the strong increase in marketing costs both in Q2 and over the first half year. In Q2, we increased our investments in marketing through targeted regional and national multi-channel campaigns. These were placed via TV, radio, billboard advertising, and online and served to increase the awareness for ImmoScout24 on a regional level, revive the vibrancy of the marketplace, and to generate new homeowner contacts. The costs also include additional marketing activities of ImmoVerkauf24 and Famike.de. The growth in other operating costs by 16.4% can be broken down as follows. additional online marketing costs, which are primarily acquisition costs for the realtor lead engine, increasing selling costs for the growing plus products, rising external personal costs to accelerate product developments, and investments in flow effect. At the same time, reduced travel expenses have an opposite effect. As the operating effects grew more strongly in percentage terms than revenue and own were capitalized, our ordinary operating EBITDA increased at a lower rate of 4.5% year-on-year to 110.2 million euros. And the margin decreased by 2.9 percentage points to 58.1%. Again, organically, the margin would have been 2 percentage points higher. Looking at profitability on page 12, you see the items below the ordinary operating EBTA and the highly accretive development in earnings per share. Non-operating costs decreased by 1.2% mainly due to lower reorganization costs, while share-based compensation increased year on year. As a result, the reported EBTA was up 5.1% to 101.3 million euros in half year one 2021. Depreciation and amortization were driven by higher depreciation of rights of use from leases resulting from the move to the new Berlin office, as well as depreciation of own work capitalized resulting from our increased focus on product innovation since 2020. We saw a year-on-year improvement in the financial result, reflecting the investments of the proceeds from the AutoScout transaction in special security funds, but we also saw rising tax expenses. Profit after tax from continuing operations was up 2% to 46.8 million in the first half of 2021. Based on a sharply reduced volume-weighted average number of shares of 92.9 million, This results in a 13.6% higher EPS for the continuing operations. The declining number of shares reflects our share buybacks, including the April 2021 tender offer affected over the last year as part of our capital return roadmap, which brings me to the next page. With page 13, let me update you on where we stand with our capital return roadmap. The key pillar of our capital return roadmap was the 794 million euro buyback tender transaction with a corresponding capital decrease which we successfully completed in April. Right after settlement of the tender transaction, we started another ordinary share buyback tranche which was completed on June 30th at a total volume of 2.92 million shares or 200 million euros. At the AGM on 8th of July, we proposed a dividend for 2020 in the amount of 68.5 million euros corresponding to an amount of 82 euro cents per share however this is not yet reflected in our net cash position as of balance sheet date 30th of june 2021 thus excluding treasury shares we ended up with a total of 83.5 million shares and a net cash position of 414 million euros as of June 30th, 2021. Post the most recent share buyback program and the 2021 dividend, we have returned the majority of the AutoScout proceeds to our shareholders as part of a massive capital return program. At the AGM in July, we received shareholder approval for potential additional share buybacks in the amount of up to 10% of the existing share capital. Now let us turn to page 14 and our outlook. Based on the ongoing successful implementation of our ecosystem strategy and the growth dynamics we have seen in the first half year 2021, we confirm our group revenue outlook for the year of a mid to high single digit percentage growth rate. This translates into low double digit revenue growth for our residential real estate segment, a low single-digit revenue growth rate for our business real estate segment, which is still impacted by the consequences of the COVID-19 pandemic, and a declining to flat revenue development for our media and other segment. Assuming an improved margin, especially in the fourth quarter, and excluding the cost effects of Formit.de, we also confirm our earnings forecast. This assumes a group ordinary operating EBITDA margin of up to 60%. The acquisition of Formica DE fits perfectly into our market network strategy and gives us a significant head start in product development for the tenant market, which is so important in Germany and Austria. However, in the short term, the revenue contribution will still be low and necessary growth investments will be initially taken and have a negative impact on the EBITDA margin. From next year onwards, however, we expect a positive effect on group revenue and in the medium term also on the group margin. But to be clear, the respective margin effects are not yet reflected in the above outlooks. Before we open the call for your questions, let me sum it up very quickly on page 15. I think we made it very clear what we understand under ecosystem strategy and how we are shifting from a traditional classifieds business towards a more sustainable network marketplace model. This comes with a stronger revenue diversification and an expanding addressable market. With Immofacauf24 and Vermietet.de, we have shown that targeted add-on acquisitions accelerate our strategic agenda. For example, the Immofacauf24 offering enhances our Realtor Lead Engine product, accelerates the respective revenue growth, and opens new markets for us. And this is only one example for our market-leading product suite. The Membership Editions and Consumer Plus products are adding to that. At our Capital Markets Day, which we are planning for December, we want to make it even clearer how we are creating long-term shareholder value with our strategic agenda. In the first half of this year, we created shareholder value through massive capital returns, also leading to 14% EPS growth. And now we are happy to take your questions. Operator, over to you.

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, press star 1 to ask a question. We'll take our first question from Christopher Johnan with HSBC.

Yes, thanks, guys, for taking my questions. First, for me, the acquisition, I'm just trying to understand the integration of the asset or better. the lack thereof. It seems that you want to keep this as a separate brand and sort of channel leads towards that. It may be a bit of an open question. I'm just trying to understand why that decision was made. I understand they have a couple hundred thousand units under management, but compared to the total market, that isn't large enough, why you couldn't just integrate this and absorb everything that they have completely onto your platform, which arguably would make it easier. So I just don't understand why you decided to keep this as a separate brand and why it wasn't integrated. Is there like, I don't know, is there an earn-out reason, something that's hard to track or I'll be interested in that because I think it's quite an important acquisition. That's the first question. On the competitive landscape, we've had Adewinta disclose quite a bit more information on eBay Kleinanzeigen. We've had significant, I would say, management changes at Immovelt, yet there seem to be very few product changes, at least none that I can really observe from the outside. So I'm just curious. I mean, is Immovelt still very much active, or are they only really significant in the northern parts of Germany? Is there something that's we should focus on from, you know, the information that Advinta has disclosed, anything you would point to. And then the last question on the guidance. Why did you decide to keep the guidance without the impact form for me today? Wouldn't it just been easier to give an EBITDA guidance including that? Yeah, that's it. Thanks.

Hi, Chris. It's Toby. Thank you.

For your question, so regarding your first question with regards to the brand of Formita DE, we believe that it's an established brand attracting landlords, and hence we will integrate everything right after that, i.e. there will be a single sign-on, there will be a full integration in terms of the journey for the rental journey, and of course there will also be a full integration if you started your journey on ImmoScout, and then obviously came in through, let's say, a tenant plus or any other product like that. But we do not believe that it would be advantageous right now to sunset the brand because we're not spending so much on brand advertising. Obviously, this is very targeted performance and growth advertising that we would also do in case we would funnel it directly through ImmoScout. On the competitive landscape, your second question, We do know that we have smart competitors out there, so we are trying to really focus on what we need to do. With regards to management changes, I can talk maybe a little bit about our own company. I think it's fantastic that we've also broadened our ELT. We've hired a new CTO, which is a key position. She just recently started. This is a key position for us as we're integrating the different companies. And obviously, as you know, we are a product and tech-driven company. We also have a new people leader who recently joined. So we believe that the talent is a key issue here and a key ingredient for being successful in the future. So that's what we focused on. There's nothing at this point that we see out there that, you know, at this point in time is noteworthy that would – lend us to believe that there is a significant change in product landscape, competitive landscape, or anything. But of course, we are watching it and monitoring it very, very closely. In guidance, maybe Dirk, I'll pass this on to you.

Dirk Van Den Hoekstra Thanks very much, Tobi, yeah. Chris, it might also be a relief for you to hear that we are rather focusing on product changes than management changes. With regards to guidance, We deliberately said that we wanted to give all our investors and analysts an update on Famidity Zen Home's integration into our product portfolio at the Capital Markets Day. Until then, you can just assume that for the second half of this year, we will have a stable cost base for the business going forward of around 3 million euros. That's a run rate of 500,000 per month. And once integration is partly finished, which we anticipate for October, November, when you have an integrated user funnel, as Toby just outlined, we will give you a bit more flavor on our strategy going forward. So, all in all, I would think slightly less than a margin point that we are spending on Famigate for this year.

Okay. Thank you. Thanks, guys.

We'll take our next question from Nizhla Nizer with Deutsche Bank.

Great. Thank you. I have three from my end. The first is on the comment you'd made about the migration to the new membership agents were intentionally slowed. Could you give us some color there as to why that was the case and whether you intend to accelerate it in the second half? The second is on IMO for CALV. Could you give us some color as to how profitable it is at the moment and how long would it be before it reaches your sort of ideal profit margin for the business? And what sort of investments are you making? Are you hiring more agents? Is that really what's holding the profitability back? Some color there would be great. And related to that as well, I guess, is how do your agents feel about sharing the commission with you through the model you've built in IMOFO-CALF. Again, how much of the commission do you actually share? And how large do you think this revenue pool could be given, you know, it's 800 plus sort of leads sold now on a commission sharing basis, but could it be twice, thrice that amount on a first half sort of basis if you think of the potential? Some kind of that would be great.

Thank you. Basically, from a value perspective, the biggest customers are migrated.

Some strategic key accounts need to be migrated, and you can imagine that these are longer discussions with them. But I can also assure you that what Tobi also has said on other occasions, what is really, really good and what we are seeing here is that the customers in the highest rate card, it is the acquisition edition. are the most satisfied customers. And that is something which we are also taking forward when we are continuing with the migration of our customers into the different rate cards. On ImmoVerkauf, I can assure you the business is running at the moment at an overall EBITDA margin of one single digit because we are investing in the company and we are investing in also buying leads for our agent base. But certainly that will change. And that also has to do with our strategy of buying more and more leads for our customer base and transforming them into commission-based leads, where we find a very high acceptance in the market at the moment. As of today, I think we have... Commission-based sold leads of more than 800 And that trend is continuing and growing and with that I would hand over to Toby for the remainder of the question.

Yeah, I thank you on Thank you for the question because this is a very strategic question you're asked with regards to the share of commission and the growth potential we see and So currently, we are anywhere between, let's say, 38 to 45, 47 percent share of the commission that we get paid for some of those transaction-led deals through Immo4Calc24. We've actually increased that number as we've also increased the quality and the reputation in the market with the agents that we're working with. In terms of growth potential, We don't think that the key growth driver is that we are actually increasing that share rather than the sheer number of agents, i.e. the sheer number of transactions that we are processing. As you know, there's approximately 600,000 plus sales transactions in Germany per year. So Dirk mentioned, you know, we currently completed, let's say, 890 or so. So on an annual basis, that would be, you know, let's say 1,800 or so. So that's a very, very small number compared to the total market out there. And we absolutely think that we are off to something here with that approach, which is a blend of a very, very specific consulting approach and support for people who are homeowners and do not really know yet what to do. And then at the appropriate time, trust a party, a third party, which is us in that case, to funnel them through and link them and connect them with the right agents. So we do think that there's a niche there that can be expanded. We also think that we are in a good position to do definitely more.

Thanks, Toby. And how do your agents actually feel about sharing the commission with you? Do they feel threatened in any way or is this something that they're happy to do because you bring them more leads, some color that would be great?

Excellent question. So a year ago or You know, slightly more than a year ago when we looked into doing this acquisition and asked these questions, we weren't 100% sure, but we can state now that these agents are actually our very, very close friends. We are not in a competitive situation with them. They have totally understood that those are leads, that they only get through the hard work that we did up front, and that we then act as a partner, as a business partner. So we're not competing for something that they could have gotten on their own. We're not competing with other agents and put them up against each other. We have a very clear set of rules of lead allocation and of qualification criteria for those agents. So that's why we are in a very good relationship with them. And now the key question is how can we expand that system by also adapting that playbook and not changing that and threatening to reverse roles, as you pointed out. So that's actually absolutely right. But so far, we feel very confident that we can do that.

Understood. Thank you very much.

We'll take our next question from Adam Berlin with UBS.

Hi. Good afternoon, everyone. I've got three questions, if I can. The first question is on real estate partner trends. Q2 ARPU was 9% growth. Should we expect that growth to accelerate in the second half as more discounts expire? Or is that the right run rate to be thinking about in H2? And are agent trends, can you comment on agent trends going into Q3 so far? That's the first question on real estate partners. The second question is on IMOVACALP24. You talked about how you've invested in that business during H1. Do you think that business needs more investment now? Or is the revenue growth that's going to come going to just drop through now and the margins start to improve? Or will second half OPEX in the mobile gap 24 be higher than in H1? And the third question is, given your permission from the AGM to buy back more shares, should we expect more buybacks during H2? Thanks very much.

Yes. Hi, Adam. Thanks very much for the questions. I'll start with the last one. Yes, certainly there will be additional buybacks in the second half of this year. As I outlined on another occasion, we are in talks with our banks with regards to refinancing, but also with regards to the use of proceeds and cash, and therefore will continue in the second half of this year. On your first question with regards to real estate, Apu, I think that for the remainder of the year, you can assume what we have been communicating earlier and what we have shown with our numbers now. There will be a mid-single-digit growth continuing for the second half, and that is exactly on strategy and is exactly on where we wanted to go with that rate card migration. On ImmoVerkauf24, thanks for raising that topic again, because when Nisa asked earlier in the call around that, I didn't elaborate on the fact that we are looking at a combined business of a realtor lead engine. Don't forget that with ImmoVerkauf, we are only processing 900 sales in the first half year. With regards to our overall lead engine product, that is where we are also selling non-commission-based leads, we sell a few thousand leads. And both businesses are optimized amongst themselves. So a lead that has a lower conversion ability and has a lower ability to lead into a commission share is... done and handled via ImmoScout, and a lead that has a high likelihood of converting into a commission-based lead is handled via ImmoVerkauf. And that is the way we look at the business, and therefore the overall business needs marketing spend, but I can assure you that regarding a return on investment here and a customer lifetime value that we are generating, this is very well-invested money.

We'll take our next question from William Packer with Exane BNP Paribas.

Hi there. Will here. Thanks for taking my questions. Three on MoverCalv, please. So firstly, I imagine you've got some pretty good visibility on trends due to the long lead time of revenues. Are there any leading indicators you could share for how the business is trading and how that momentum is? Secondly, could you comment on the type of agents that are interested in using that product? Is it right to think of it as the small, longer tail agents who perhaps have less bandwidth to acquire vendors themselves? Or is it a pretty broad subset of your agent clients? And could you confirm how many different agents are using the IV24 products? And then finally, could we have some color on the competing products in the market within the commission share lead generation space? Axel Springer obviously have some pretty interesting vendor lead assets in their wider portfolio. Have they brought anything to the German market yet? Thanks.

Hey, Will. It's Toby. Let me start with the type of agents and the number of agents that are using that product. Again, as Dirk pointed out, if we solely focus on the commission-based lead business, where we receive a share of the commission for IV24. We've currently established a basis of, call it, over 600 agents. So, yes, your assumption in terms of are these predominantly really large agents or smaller agents, I would say these are usually smaller agents. These are not the large and biggest chains because they are not the core segment that we are tackling because they have their own lead gen mechanisms and own sites and so forth. if you do the math, in other words, let's assume someone does an average one and a half or two or maybe two and a half or three transactions in the future using our IV24, you see that doesn't make a living yet. But depending on which segment you're tackling, we are becoming a more and more important partner. So these are typical agents that have a deeper partnership with us where we are a grown partner and that have some major business going with us. Could we expand that to other segments? We do think so. So we're pivoting around that. There's different go-to-market strategy. There's different lead quality, and there's different volumes that we're talking about. But yes, we are actively looking into that. In terms of lead gen mechanisms and other instruments that competitors have, absolutely, you're right. there's other portfolios out there and they do have, let's say, in the case you mentioned, I guess you referred to the hybrid agents also and to their platforms. So we're absolutely aware of that. And I think you're pointing towards something which is key in that discussion, which is the leads business is obviously a key here in Germany. And it's particularly a key because the supply and demand check is is not in balance right now. And there is a lack, still a major gap in supply. So it's getting harder and it takes more work to get the right leads out of any kind of system. And we do believe that this is also a part of our multi-brand, multi-platform strategy to create different leads from different angles to then repurpose them as Dirk pointed out. Maybe on some visibility in terms of long-term trends. I don't know if you want to comment on that, Will's first question.

Basically, Will, your first question was based on long-term trends with regards to the development of the business. I can only add to what Toby has just said. What we're seeing here is a very positive trend. We're adding customers. We're adding agent base. We're adding more and more objects that we are putting in the funnels. And what we are seeing is, as you can also see within our platform, what we are seeing is that the turnover of objects has significantly decreased. So whereas in the past, we were talking about rather six to nine months, we're not talking three to six months and faster. And therefore, your hypothesis is right. The turnover has increased, yes.

Maybe to add in terms of long-term trend, what we are doing here with the company, there is a trend that we are pushing hard for, and we mentioned it obviously during the call, but I want to iterate on that. So if you take, let's say, full year 2019, you saw that our revenue generation was predominantly driven by the listings and subscription revenues from our membership additions, And then you would add the listings PPA business, and that would have represented 78% of our revenue base. Now, that is now down to 69%. And instead, what we've done is we have grown the consumer subscription business and the leads business. Why? Because we do believe that we need to create these subgroups, i.e., by tackling the consumer subscriptions to have a plateau that we can use for selling, renting, and transacting with the different parties. But in order to do so, you need the leads business going. And that's why we also push the leads business. So that is the trend that we are seeing. So you should expect that portion to grow.

Thanks, Dirk and Tobias. Just a quick follow-up. So that was all very helpful, Carla. I suppose my final question was more getting to the point that I imagine that you give an agent a lead and then it takes a few months for the lead to gestate into a transaction and at that point you get paid the revenue. So my expectation would be that you would have pretty good visibility on Q3 trends and perhaps even Q4 trends already based upon the pipeline of leads which are forthcoming. Is that a fair assessment and how does that pipeline look?

It is a fair assessment and the pipeline looks promising.

Thanks.

And we'll take our next question from Craig Abbott with Kepler-Shavra.

Yes, good afternoon, everyone. I'm going to try to follow up on Femita DE. I realize you're probably going to say we need to wait until the CMD in December for more detail. But I would just like to understand, first of all, I know you're not generating any meaningful revenues yet, but how are the KPIs developing, i.e., how many landlords are you seeing coming onto the model and signing up for longer-term subscriptions? And, yeah, and secondly, you know, I just wondered if you could already at this stage give us some kind of indication on a timeline for that sort of nearly 300 base point margin impact to be reversed, you know, over the next couple of years. And along those lines, are you able to capitalize any of these development costs? Thank you.

Thank you, Craig. This is Toby.

With regards to the key drivers for the business, you're absolutely right. The number of landlords, or better said, the number of units is a key indicator. We are really focused right now on integrating the business, bringing the journeys together, bringing the leaders together, putting the infrastructure together. And all we can say at this point, it's a very early, you know, journey that we're still in. It's just a couple weeks that we acquired the company. But yes, we are growing the base of number of units that are subscribed and are registered on the platform. So we're talking about still a couple hundred thousand that has grown already since we acquired the company. And this is exactly the focus for our entire integration path. We need to make it as easy and convenient as possible to register your unit on the platform, be it coming through ImmoScout or coming through Formeetit, and then also the journey, what happens thereafter. That's what the teams are focused on right now. With regards to the financial questions, maybe Dirk can state a few things.

Yes, Craig, hi. On your last question, we certainly can capitalize some of the development cost here. especially as they are linked towards an integration of the platform into ImmoScout, as Chris Jonen was asking at the beginning of this call as well. And secondly, on the margin impacts that we are seeing, certainly we're going to see a sort of height of impact until mid of next year, and then we expect the company to grow additionally on revenues and hence reduce the margin impact And that's going to be leaned towards 23 and 24 when we then see accelerated growth. Now, when we will display KPIs that we measure the success of this transaction on, you can certainly and should certainly look at the number of units that this asset has sort of indirectly under management on the platform. And we're now talking about around about 400,000 units, which are quickly growing and will continue to grow over the next years.

Okay. Thank you very much.

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

Great. Thanks, and hope everyone's well. First one's a clarification on Adam's question earlier around your expectation for residential ARPU in the second half. Did you say you expected to grow by mid single digit or did I misunderstand that? If you clarify that would be great. Second one is to follow up on the 600 or so agents who are using your commission share lead generation products. Can you talk a bit about that cohort of agents and their overall ARPU development with you? When you look across the blend of what they're paying you for lead gen, the price increases, package migration, et cetera, do they actually have a materially different growth profile in ARPU to the rest of your agent base? Thanks.

I start off with the first question, Antu. As I outlined earlier on, and that was absolutely clear, ARPU growth, as you have seen it right now, will continue until the end of this year. compared to last year, right? So, we're going to see continuous growth of around about mid-single-digit. That is 5 percent, right? Then, on the second part of the question, you were elaborating on a customer base of 600. Can you repeat that second part of the question, please, again, for me, Andrew?

One of the challenges that we have in modeling lead generation is trying to understand if an agent is more for lead generation, are they paying you less elsewhere because you give price discounts or whatever to get them to move up the packages? So in aggregate, are those 600 agents actually showing a much better RP profile than those who are not using your lead generation products?

Okay, so first answer to that question is the lead price is sort of a market price. And in this context, we are setting the price here with a commission split. And therefore, those agents that are customers of IMO Verkauf and IMO Scout are, as your hypothesis is leading to, higher engaged with us and have a higher customer satisfaction and across the board also have a slightly higher ARPU than their peers in the same customer group. That's what I can say. And that is roughly in line with what Toby has outlined earlier on, on the question of IMO-VACAO from Nisa and Adam.

Sure, that's helpful. And just to follow up on the ARPU point, If I take 5% growth in the second half on residential ARPU, it leaves me with a number that isn't that different to what you've just done in Q2. So are you saying that ARPU is not going to grow sequentially from here, or have I got that wrong?

No, I think you got it right. Q2 ARPU was specifically high because in Q2 last year, we had some... lead generation products, which we pulled out for free. So the comparison is not right. So if you take the half year one comparison versus last year, you see a 5% growth. And my answer to your question was simply, you're going to see that in the second half as well.

Okay. So in absolute terms from the 752 and Q2, it's not going to grow in the second half. Is that correct? Or?

We're going to see slight output growth, but certainly not 5% compared to half year one, to be very clear on that. Okay.

Thank you. We'll go to our next question from Eric Carlson with Capeview.

Yes, hi, this is Erik Halter from KQ. Thanks for taking my question. I think you touched on this earlier, but it was just a little bit unclear to me. Can you just please repeat the reasons for the slowing move to the new pricing model? What was behind that? That would be very helpful to understand. And then I had one question on the margins as well. Just on your guidance, you know, you say it's up to 60% if we take out from meet.de, which, of course, you know, it could be anything from zero to 60%, you know. How much below 60% is that? Is it 1%, 2%, 5%? That would be helpful to just understand a little bit more the magnitude there. Thank you.

Thanks for asking for the clarification. As I said, the impact of Formated DA on the second half year will be around 3 million. I also said that you can assume a negative run rate of 500,000 per month on that asset, and that corresponds to

margin impact of one percentage points one percentage point sorry that's very helpful I was more asking about the margin X excluding for me that de you know it's it's so up to sixty percent you know how much below sixty percent could that be excluding that company yeah that was exactly the reason why we gave it in order to have some wiggle room with regards to growth spend it's

Certainly, 55% is not up to 60%, so I can assure you that there is a limit downwards. I would say that anything beyond 56%, 57% in our language, including Vermieter.de, will be up to 60%.

Okay, thank you. And again, just on the flowing of the move to the new pricing model, could you just help me understand that again? I think you touched on it, but I didn't quite understand it.

My answer was in the direction that we have mid of summer and we have migrated three quarters of our customer cohorts and we are continuing to migrate our customer cohorts until late summer, early autumn this year. And that is one or two cohorts, so we're talking about one or two months that we are delaying at the moment, and that doesn't have an impact on the comments I just made on APU development, customer development, and revenue development or profitability.

And this, Tobi, if I may add, these are purely practical reasons, so there's nothing structurally behind it, because we saw that a couple of cohorts and customers we talked to were actually willing to accept, let's say, Rather price increase instead of a full migration. So we basically said look let's not force fit everyone onto something that May not be the absolute right thing to do at this point. So that's why You could look at it and say, okay, there's a delay. You could also look at it and say well, they're pretty pragmatic because This is the right thing to do. Let's not forget. We're still in a specific situation here in Germany where things are pretty uncertain about you know, what COVID will do and so forth. So we felt this was a pragmatic approach that has a higher reward than sticking to the plan and force fitting everyone into a bucket.

Makes a lot of sense. Thanks. And thanks for doing a great work for our shareholders.

Oh, thank you very much. You're absolutely welcome. Thanks for being our shareholder.

Our last question from Miriam Adisa with Morgan Stanley.

Oh, good afternoon, everyone. Thanks for taking my question. Just one left from me. Apologies if you did cover this at the beginning, but just on the business and the commercial segment, if you could just sort of comment on what you're seeing there in the market in terms of the recovery. Then also, I think there was a slight sequential decline in ARPU there. So just wondering if you'd comment on that as well and sort of Talk about your expectations for the second half for the ARPU there. Thank you.

Thanks, Miriam. I'll start. So on the pure business side, where we talk about smaller offices, objects on the high street, and so on, we are expecting slightly better trading towards the end of this year. When it comes to developers, which we also have under the umbrella of our business segment here. So when it comes to developer customers, what we are seeing is that any German government, we're talking August and September, we have votes here, any German government needs to accelerate building of new objects in Germany. And that's why we believe in the mid to long term, this will continue to be a very interesting segment. What we're seeing at the moment is that a lot of developers, although the demand is very high, have difficulties in getting their developments allowed from the state agencies and then really starting their business. So we are optimistic on that segment. Where we see it is more towards Q4 or half year one next year. And then when it comes to new home builders, the business is quite intact. We're seeing slight single-digit growth here, and we believe that this will continue in the future. A small effect that we are also seeing is we saw a 14% increase in building costs in Germany. And that's not real estate prices. That is building costs. And that might have an effect in the near term. And we're going to have to watch that very closely. But in total, I would say commercial working better towards the end of the second half. Developers, certainly very positive outlook, really much depending on government activities here. And new home builders, let's see how they will develop, but at least slight growth here. and maybe a continuation of growth towards the next year.

Great, thank you. And then just on the ARPU in the second quarter versus Q1?

The ARPU in the second quarter, I mean, we commented already. There was an ARPU growth of 9%. You saw an ARPU growth in the first quarter of 1%. Blended half year one, ARPU growth was 5%. What were you referring to, Miriam? Help me.

Yeah, that the ARPU in the second quarter was slightly lower than Q1 for business specifically.

Ah, okay. Yeah, that had to do with some technical effects with regards to developers and customers we were seeing there. We are working on pricing mechanisms with regards to those customers and we believe that the APU will roughly be flat to what we've seen in the first and second quarter. These are more technical effects than anything else.

Got it. Thanks a lot.

There are no further questions at this time. We'll turn the conference back for any additional or closing remarks.

Yes, I'll take over for the closing remarks. Thank you all for dialing in. If there's any further questions, please send me an email or call me. I'll be still there until tomorrow and then on holiday for two weeks. So thank you all and speak to you in September. Bye-bye.

Thank you very much. Bye-bye.