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Welcome, everyone, to Scout24's Q1 2022 results call. My name is Ursula Caret, and I am head of investor relations and treasury at Scout24. As usual, we have Tobias Hartmann, our CEO, and Dirk Schmelzer, our CFO, on this call. Tobi will kick off the presentation, and Dirk will dive deeper into our Q1 financials. These are now, for the first time, based on our new segmentation. Please note that previous year comparables are pro forma numbers. As always, we will conclude the call with a Q&A session. You can find today's presentation on our website under Financial Reports and Presentations. If you are using the web link we provided beforehand, you can also follow the presentation live. This session will be recorded and a replay will be made available as quickly as possible after the event. Please be aware of the disclaimer on page two, and let us now turn to page three, where I hand it over to Tobi.

Thank you, Ursula, and welcome, everyone. At the start of our presentation, I want to remind you of our five value drivers, which we introduced at our Capital Markets Day in December last year. And I want to share with you, we are in full motion with regards to moving to the next level. As a quick recap, the five value drivers are. For professional, the first value driver is our agent membership business is our core offering. Second value driver are seller leads that we sell directly to our core customers via the realtor lead engine product or hand over to our Immo4Kauf24 partner agents who agreed to a commission split. The third value driver on the professional side is the mortgage business, where we aim for a strong mortgage lead engine together with providing mortgage advisory with our partners. For private, value driver number four entails the plus consumer subscription products. And last but not least, the fifth value driver is to increase the number of landlords, which we keep in our system, with the help of additional services provided via vermietet.de. Our five value drivers are firing on all cylinders thanks to our strategic focus on them. Let me update you on our key strategic initiatives in Q1. For Value Driver 1, we launched loyalty levers, which we already mentioned at the CMD. While the effects of these measures will materialize at a later stage, The aim is to increase customer satisfaction and decrease churn. Membership migration was completed last year, so we now worked on enhancing the underlying rate card mechanism and value proposition of each membership. As an example, you might have seen we renewed and enhanced our partnership with some of our largest core agent customers, such as Colliers, Von Paul and Engel & Völkers, among others, to help them on their path to more effective digitization. Value driver two. For future seller lead growth, we worked on optimizing the distribution between RLE and Immo4Kauf24, targeting 2,000 commission-based transactions in 2022. And we accelerated our marketing efforts across all channels. Regarding Value Driver 3, we are on track to build out our own mortgage advisory team, ramping it up from two advisors in Q1 to over 20 at the end of H1, i.e. more partners for our commission split mortgage product to then shift more and more leads. Value Driver 4. Here, we were able to substantially increase the number of plus subscribers. This is partly the result of an improved paywall and conversion efficiency. and there is still further optimization potential. We also reviewed the pricing of our Plus products in Q1 with the result of optimizing customer lifetime value versus merely driving customer acquisition. With regards to Value Driver 5, Vermeeted.de, we further integrated the offering into ImmoScout24 and vice versa, i.e., making ImmoScout24 landlords to Vermeeted.de subscribers, and directing Formita.de subscribers to Immoscout24, platform-wise and branding-wise. We are also in the process of developing monetization schemes. This includes testing different price points, but also subscription options. As you can see, we are full steam ahead to deliver against our five value drivers. All of them are contributing to our accelerated growth path. On page four, we are showing how those five value drivers have contributed to our growth in Q1. This is fully in line with what we wanted to achieve. Let me go through them one by one. Professional membership revenue has increased by 5.6% in Q1 year on year. Note, this is at the upper end of the range of our midterm 2026 target range of 4 to 6% CAGR. We grew seller leads revenue by more than 50% compared to the first quarter of 2021. This exceeds our midterm growth guidance of 30 to 40% annual growth on average until 2026. Please remember, when looking at ARPU growth, you need to consider this part as on top contribution as well. Our mortgage business-related revenue increased by 26%, which compares to a 2026 guidance of 18 to 20% growth per year. On the private side, the private subscription revenue without permitted DA grew by over 70%, with a healthy margin above midterm guidance of 26 to 28% average growth per year. With regards to Vermieter DE, we grew the number of registered units on the platform by 27% compared to the previous quarter at the end of last year. Multiply that by four to get an estimate of the annual growth run rate. Vermieter DE has only been a part of the Scout24 family since May 2021. Therefore, we are showing quarterly growth. Our goal remains to reach 4.5 million registered units by the end of 2026. For your reference, this requires an average annual growth rate of circa 55% starting from the September number we showed you at the CMD. We are fully on track to achieve this. Page 5 now shows you our strong performance in Q1. In line with our new segmentation structure reporting, we have also adjusted the KPI scoreboard. Along with group numbers, it shows professional customer segment KPIs and those of the private customer segment. At group level, Q1 revenue totaled €107.9 million, a 15.1% increase over the same quarter in the previous year. This is the highest growth rate of ImmoScout24 since 2015. ordinary operating EBITDA of the group came out at 58.6 million Euro, representing a margin of 54.4% and a growth over Q1 2021 of 6.5%. To give you a sense how that number comes together, if we excluded Fermita DE and PropStack, ordinary operating EBITDA would come out circa 1 million Euro higher 59.7 million euro at a margin of 55.7% and a growth of 8.5% over Q1 2021. Our professional customer subscription revenue increased by 11.5% to 64 million euro in Q1. This impressive growth is built a on solid professional customer growth of circa 3% to more than 20,800, as well as B, on an 8% higher ARPU with this increased customer base. On the private side, subscription revenue, including Vermietet.de, rose by more than 75% to 13.8 million Euro. This was fueled by growth of more than 85% to over 280,000 private customers. Private ARPU, on the other hand, decreased to €16.20. This is due to the longer subscription duration, which we have implemented over the last couple of months. That resulted in slightly lower revenue per month per user, but on the upside and in line with our strategy, we increase customer lifetime value with a better visibility over the next 12 months. DIRT will now provide more detail on our financial performance at group level and for each of the segments.

Thank you, Tobi, and welcome everyone also from my side. Slide 6 presents our new reporting structure and reflects well what Tobi said at the beginning of the call. Our Q1 growth accelerated on the back of the five value drivers we presented at the Capital Markets Day across all segments. The 11.8% revenue growth in the professional segment is based on a strong core membership business. Plus, especially seller leads fueled the growth with additional tailwinds from an enhanced mortgage lead business. Including respective holding costs, the ordinary operating EBITDA margin of the professional segment came in at 60%. The private segment showed a revenue growth of 27% in Q1, strongly backed by the private subscription revenue, which grew by almost 77%, including for metered DE, as mentioned before, while private PPA slightly increased. The ordinary operating EBITDA margin of the private segment, including the allocated holding cost, was at 47.7% in Q1 2022. This margin reflects the higher selling cost for the integrated credit check, which comes with more plus products. It has an increased cost of goods sold, if you will. This is being mitigated in the future by higher revenue over a longer time horizon per customer. It also reflects the investments into Vermieter.de. The media and other segment revenue increased by 7.5% in Q1 2022. This includes the ImmoScout24 Austria business, which grew strongly by 14.5%, as well as our CRM business Flowfact and PropSec, which grew by 11.5%. The third-party media business showed declining revenues. The ordinary operating EBITDA margin of the media and other segment fell by 5.5 percentage points to 29.4%. Let's turn to page 7 and to the professional segment. As a reminder, the professional subscription APU takes into account the residential and commercial core membership revenues and the revenue from seller leads such as the Realtor Lead Engine and ImmoVacauf24 leads. all divided by the number of professional customers. These customers include our core customers and those Immovacauf agents who concluded a transaction in the respective period. Concerning the quarter one professional APU, which is free of inorganic effects, we see an increase of 8% year on year from €947 to €1023. Driven by a combination of customer growth, rate card and product upgrades for the membership business and additionally the very strong seller leads business, the subscription revenue grew substantially by 11.5%. Increased marketing spend contributed to get more leads into the funnel and improved lead qualification resulted in a better in-funnel conversion. While professional PPA business remained flat, the mortgage business increased by more than 26% from €3.5 million to €4.4 million. This was achieved by increased marketing as well as an improved algorithm, which led to further enhanced lead quality. Overall, this is resulting in an ordinary operating EBITDA of €42.8 million, a 2.6% increase compared to last year. The ordinary operating EBITDA margin came in at 60%, which is 5.4 percentage points lower, mainly due to the additional marketing investments. On page 8, let's have a look at the private segment and resulting APU. The year-on-year increase in the private segment revenue in the first quarter 2022 was 27% up to 28.2 million euros. The subscription revenue grew even stronger with 76.6% to 13.8 million euro, which now accounts for nearly half of the segment revenue. Customers increased by 86.6% from 152,000 in Q1 2021 to 283,000 in Q1 2022. The strong development of paying customers and the extended lifetime led to a slightly lower APU of €16.20 in Q1 2022 compared to €17.10 in Q1 last year. This is reflecting that the new customers pay lower monthly subscriptions, mainly because they subscribe to longer periods, which is in line with what we want to achieve. The EBITDA contribution from ordinary operating activities from the private segment increased by 26.2%, in line with revenues to 13.4 million euros in Q1 2022. The ordinary operating EBITDA margin came in at 47.4%, which is on a comparable level to Q1 2021 with 47.7%. Turning to page 9, let us go through the main ordinary operating items. And note that this includes growth investments that are naturally affecting our margin temporarily. I will go a bit deeper into these on the following page. Own work capitalized increased by 30% to 7.3 million euros in Q1. This translates into a capitalization ratio of 6.7%, which is above our target ratio of around 6%. This has mainly to do with capitalized developments and integration projects at Famita DE, which came on top of other accelerated product innovation efforts. However, I expect that by the end of 2022, the capitalization ratio will be near our target again. Personal costs increased by 10.8%, mainly due to integration of Vermieter DE employees and regular increases in wages. A significant portion of the temporary growth investment is in marketing. The higher marketing expenses reflect our strategic focus to generate valuable homeowner contacts through search engine optimization, search engine advertising, and performance marketing. With these leads, our agent customers can digitally accelerate their mandate acquisition efforts, eventually leading to more transactions. Our marketing expenses increased by 69.8% to €13.7 million in a year-on-year comparison. This also includes expenses for TV and online advertising. The year-on-year growth in IT cost by 35.3% to 5.3 million euro results from the integration of Formated DE and increased AWS cost. Selling cost increased mainly due to the offered Shufa service integrated into an increased number of Plus subscriptions. I already elaborated on that before. Putting all together, we get to a 6.5% higher ordinary operating EBITDA of 58.6 million euros in Q1 2022. The resulting margin is at 54.4%. Coming to page 10, this provides you with an update on our temporary strategic growth investments. We are focusing on high impact, high return on invest growth within the framework of the five value drivers. In the first quarter of 22, 11.5% of the operating effects, or about 6.5 million euro, were invested in future growth and can be classified as temporary investments. That is exactly in line with the investments announced at the capital markets day of around 26 million euros for a full deployment within one whole year. Adjusting for these temporary investments, the ordinary operating EBITDA margin, excluding these effects, comes out at 60%. You can see that we focused the investments along our Value Drivers 2 to 5. Most of the investments, in fact, contribute to Value Driver 2, the Seller Leads business, and Value Driver 5, Vermietet.de. We invested in particular into marketing, affiliate, and performance marketing spend to generate leads for Realtor Lead Engine and ImmoVerkauf24, but also for mortgage. Rolling out the business of Vermietet.de and getting as many units on the platform as possible is one of the key challenges in 22. That requires investments in the staff base of Formita DE, in marketing, and also in infrastructure investments, which appear within IT cost. As evidenced in Q1, our growth investments translate into catalyzed value accretive growth. Let's turn to page 11, where you see the items below the ordinary operating EBITDA. First point to mention here, non-operating cost increased by about 82% to 5 million Euro in the first quarter 2022. the increase is mainly due to higher M&A costs and a higher share-based compensation. The reported EBITDA of €53.6 million in Q1 is 2.5% higher in a year-on-year comparison. Depreciation and amortization decreased significantly by 43.3% due to the termination of the purchase price allocation amortization of the ImmoScout24 customer base, which overcompensates the higher non-operating effects. This leads to an overproportionate and sustainable growth in EBIT of 18.2% to 46.1 million euro. The financial result of minus 16.6 million euro is driven by the negative performance of our managed liquidity due to negative returns in the equity and interest rate markets. Since the sale of AutoScout, the overall performance of the managed liquidity of minus 0.38% as of 31st of March has nonetheless still outperformed the ECB deficit facility rate of minus 0.5%. With a higher negative financial result and a lower tax expense, the reported net income decreased by 17.7% in Q1 2022. Adjusted for non-operating effects, the EPS amounted to 44 Eurocent in Q1, which is 30% higher than the year before and perfectly leads over to the message on the next page. On page 12, we would like to highlight how earnings growth in combination with our share buyback program translates into a higher attractive shareholder return profile. So what you have is the best of both worlds. On the one hand, you have accelerating growth that is superior to our peer group. On the other hand, you have a highly attractive shareholder remuneration program consisting of ongoing share buybacks plus dividends at 50% of net income. We just launched another €350 million share buyback program in March on the back of the roughly €1.7 billion already returned to shareholders over the past two years until February. I would like to emphasize that our attractive earnings per share and dividend per share trajectory is set to continue in 2022. We are guiding for a 6-8% EBITDA growth, so naturally we expect adjusted net income to increase as well compared to 2021. At the same time, due to the share buybacks in 2021 and 2022, including the ongoing €350 million share buyback, the average number of shares will in any case be clearly lower than in 2021. Both these positive effects are adding up, translating into strong growth of both earnings per share and dividend per share in 2022. It goes without saying that we can only achieve these results whilst focusing strongly on our improved ESG measures. Turning to page 13, I'm very happy to share that we have made great progress in this area, reflected in a substantially improved Sustainalytics rating. We are very proud that we are now ranked first in our peer group, Internet Software and Services. How we are tackling the measurable success going forward you can see on the left side of this slide in recent years we have implemented key levers to continuously reduce our energy consumption to the minimum possible for example we switched to green electricity moved our data centers to the cloud implemented a new travel policy increased the proportion of electric cars in our fleet and constantly improved our databases in 2020 we were able to reduce our emissions by 43%. So we are well on track to achieve our goal of carbon neutrality by 2025. For us, sustainability does not only include the environmental aspect. For over 20 years, we have been an agile, dynamic and multicultural company at which our employees make a difference. We aim to increase the proportion of women and non-binary people in management positions from 37 to 42% until 25 and become even more diverse. Therefore, we have evolved our recruitment process to win even more talents for Scout24. In 21, we add conduct guidelines for business partners, suppliers, and service providers to our code of conduct. These cover the environment, society, quality, and governance. We want to increase the share of business partners, service providers, and suppliers who accept the code of conduct or comply with its requirement by 80% for physical products and 40% for professional services by 22. This slide shows sustainability is part of our DNA, and we strive to reach the next level of sustainability. Let me conclude our presentation on page 14 by reiterating our outlook for 22. Based on our first quarter performance, we are confident that group revenue growth for the full year will be at the upper end of the forecasted range of 11-12%. Also, we are expecting ordinary operating EBITDA growth for the year 2022 to come out at the upper end of the forecasted range of 6-8%.

With this, let me open the floor for your questions.

Thank you. If you would like to ask a question, you may signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, star 1 for questions. We'll go first to Chris Shohan with HSBC.

Perfect. Thanks everyone for taking the questions. I'd like to do them one by one if possible. So first on the guidance for the private segment. I mean, you did, what was it, 27% in Q1. Guidance for the year is 12 to 14. You've clearly seen strong customer growth. Yeah, I mean, I would just like to pick your brain here. I don't see why there should be a strong deceleration. So would you agree that 12 to 14 looks somewhat cautious, let's put it like that?

Hi, Chris. Thanks for the question. Yes, and I agree with you.

We were positively surprised about the development in the private segment over the first quarter. We see that development continuing into the second quarter. However, we would like to remind you that it's not only the number of customers, but also the ARPU and the customer lifetime value we are looking at for that segment. And therefore, we are not at a point in time where we would say we are reaffirming our guidance here. I think what we stated also in our announcement this morning holds true for this segment. We are guiding towards the upper end and will closely watch what's happening over the years.

Got it. Second one, I know I asked this last time around, on inflation and not necessarily on your the cost side of your business but on the revenue side so i know that the the guidance you've given a particular for uh driver one with respect to the five to six percent membership price growth was made um before we had seen a let's say more pronounced increase um in the inflationary environment so i'm just trying to see if there is an update um you know whether you're more confident that This looks somewhat conservative, as it's arguably easier to confront agents and say, look, general inflation is at more than 7%. Underlying core pricing growth of 5% to 6% doesn't look particularly strong. I'd just like to, again, pick your brain here.

Hi, Chris. It's Toby here.

So you're correct in stating that when we held the CMD, it wasn't really considered what exact inflationary policy we would see. But it's also important that this does not change our approach or plan with regards to pricing policy in general. Our pricing policy is value-based. We always approach this by providing better solutions, stronger products, and then convincing our partners However, fair point you made. It's certainly helpful and doesn't hurt in some of the discussions we're having with customers given the evident overall price and cost increases. So, you know, we're certainly very open to that and to a certain extent a little bit of tailwind. Thank you.

Perfect. And the last one in terms of the phasing for the year. I mean, you've given a bit of a Bit of an outlook with respect to Q2 being somewhat of a weaker quarter and Q4 being somewhat of a stronger quarter. Could you maybe talk about the current momentum? I mean, what have you seen in April? How do you see Q2 running with respect to maybe both professional and private?

Chris, I believe you're targeting at the cost side here. As you have seen in my presentation, we have spent around $6.5 million on our growth initiatives for the first quarter. That is exactly in line with what we said at the Capital Markets Day, where we are targeting $26 million for the whole year. Now, they are not fully equally loaded amongst the quarters, so what you will see is a higher investment in quarter two as we speak. Slow ramp up in Q3 and as you are used to covering our assets for a while, Q4 will be the strongest quarter in the year. And you can expect that for the remainder of the year. Coming into April and early, very early signs we're seeing from May, we're quite satisfied with the development. Everything is developing according to our plans. And we don't see any reason to change our plans with regards to that. So as you outlined perfectly in your question, Q2, slightly lower margin. Q3, starting to recover again. And Q4, strong margin.

OK, perfect. Thanks a lot, guys.

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

Good afternoon. Thanks for taking my questions. So I think just to follow up to the previous question, I mean, you had a very strong start of the year of 15 and you're planning to invest more in Q2 and Q3. So I'm just wondering why that shouldn't drive, you know, an even stronger momentum for the rest of the year. Like if you're investing more, shouldn't we also expect revenue to accelerate? So I'm just trying to understand, you know, why is there a bit of a disconnect between revenue decelerating and EBITDA growth accelerating throughout the year? That's the first question. The second question is on the lead engine business. It feels like a lot of the growth has come from the realtor lead engine. And actually, Imovecalf was sort of a flat quarter-on-quarter or flattish quarter-on-quarter. It didn't grow much. So I'm just wondering what's going on there because I thought you wanted to prioritize Imovecalf 24. So do you expect that sort of mix to change throughout the year? Or is there any sort of timing impact which slowed the growth of Ibovac Health? Any call on that would be helpful. The third question is on the co-agent membership. So you mentioned customer growth, rate card adjustments, upselling. Could you give a bit more detail? I mean, firstly, on the customer growth, like who are you taking share from, do you think? that customer growth could continue throughout the year, especially given the macro situation, and those rate call adjustments, could you also give a bit more detail in terms of what adjustments you have made, when did you make those adjustments, and should we see a continuous benefit for the rest of the year as well? Thank you.

Thank you, Lisa, and thanks for the questions. I think first and second questions are... deserving the same answer. It has a little bit to do with the fact that we are seeing the realtor leads that we are handing over to ImmoVacauf coming into revenues six to 18 months afterwards. So what you are seeing is a increase of time between investment and revenue generation. And that also explains the shape of our margin as well as our revenue growth in 2022. And if you look at, you mentioned it rightly, the very healthy development of the Realtor Elite engine, we saw significant growth from from Immo-Verkauf here. We believe that 30% is a significant number. And what we also saw, and that is creating the flywheel that we referred to at the Capital Markets Day, what this also helped us is to also generate more realtor leads that we are selling on a cost per lead model instead of a commission split model that you see here. So on both metrics and on both value drivers, we believe that we made very good progress and we are right on target to achieve what we wanted to achieve with ImmoVac Health 24 this year. On your question around customers and memberships, you have seen that we've been growing customers by roughly 3%. Once again, quarter 1.22 versus quarter 1.21, we believe this is a good result that pays into our strategy and that is part of our strategy. And on top of that, we have been managing to slightly change the mix in our rate cards towards more customers in the image edition and towards more customers in the acquisition edition. So on the base edition, we're currently looking at 28% versus 30% we had there in the first quarter of 2021. And we also saw a movement in the image edition where we have now more than 52% of our overall customer base, and the acquisition edition still holds at 20%. So it's a very healthy mix, but also creating some upside potential for the future when we are targeting 20% and more in our acquisition edition.

Thank you. That's helpful. Thank you.

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

Hi there. Thanks for taking my questions. Firstly, on Immovacaf24, could you share some specific data points for that asset rather than for the vendor lead bucket as a whole? So for IV24, the revenue, the number of transactions facilitated, the number of leads, etc.? ? Secondly, my understanding is that you push through a price increase in Q1 with your estate agent customers. Could you talk through the size of the price increase, the number of agents affected, and how agents have responded? Have you seen a pickup in Chernon, or obviously it's been an issue in the past? And then finally, there's been plenty of speculation in the press regarding interest from private equity. Obviously, as I mentioned in the release. Could you just remind us under what circumstances you would update the market? Is there a specific catalyst? Thank you.

Thanks very much, William.

Let me start off with question one and two, and then I believe Toby will elaborate on Question three, you are asking about the split on the realtor lead side and on the transaction-based side between Immofacauf24 and our realtor lead engine. So what you can see here is that the revenues with Immofacauf have been at 3.3 million in the first quarter, and the revenues on the realtor lead engine have been around 8 million. However, we managed to increase the overall amount of transaction on Immofacom to 450, and the average revenue per lead here is 7,200. Sorry, the average revenue per commission split lead is 7,200. Whereas we're seeing around 40,000 leads that we are putting through the real estate lead engine in the first quarter. with an average revenue per lead of €171. So quite healthy measures and quite healthy numbers that we're seeing here, helping us to grow forward. Your second question was how our agents reacted to our price increases. As Toby outlined earlier on, we saw very positive reactions from our agent base on the changes we did in the first quarter. Not because they like price increases, but because the value they get from our product. And that helped us to discuss with our agent base, based on our value-based pricing strategy, to slightly improve pricing and slightly move them between the rate cards and help them to grow their business. Because that's what we're here to. We're here to help our customers grow the business. On the question around private equity interest, I would like to point to the fact that we are not commenting on that, but you were also asking under which circumstances we were taking that. I think there's quite clear legal guidance in Germany around that. And when we are approached with an approach by a private equity company, what we have to do and rest assured that we as a management team will do what's in the best interest of the company and the shareholders. But apart from that, we wouldn't like to comment any further on that.

Thanks for all the useful color. Appreciate it. Thank you.

We'll take our next question from Miriam Josiah with Morgan Stanley.

Great. Good afternoon, everyone. Thanks for the opportunity to take a question. Firstly, just on private subscriptions, just wondering specifically what has been pushing customers to take up the longer-term subscriptions. Have you made any adjustments on pricing there that's driving that? Or if you could just go into a bit more detail on the investment. I think you mentioned selling costs as the investment driver. If you could just talk a bit about that in more detail. and then just broadly how you're thinking about pricing on the subscription products as well, just given the strong customer growth you're seeing. And then secondly, if you could just comment on the latest thoughts around the monetization of Vimitit. I believe you've been doing a number of tests there, so if you could just give any feedback around those. Thanks.

On the subscription piece, we've elaborated and we've optimized more so around the paywall mechanics and also the duration and the terms of particular subscriptions. We're also testing different levers depending on the region where we have subscribers and where we are getting new subscribers onto the product. We will continue to do so and to be clear on this call, this is by far not at the end of the road. So we have more to do. We are doing this well, but there's more to go and we can still optimize a lot. And that's what we are finessing. And on the monetization piece for Formitas, we have just recently started to test different pieces. It's too early to disclose that here, what it will do. This is also, remember, is now fully integrated from a brand perspective, from a funnel perspective, for the traffic of integration. And we are now better and better understanding what different landlords we're getting onto the platform, also from ImmoScout24 and what sort of campaign triggers different landlords to hop on the platform and then register their unit. So it's too early to really give significant or share significant details with the early innings of trying out different organization pricing letters.

Okay, thank you.

We'll go next to Joe Barnett-Lam with Credit Suisse.

Excellent. Thank you for taking my questions. A couple from me. Firstly, on the private side, so private saw a pretty strong top line and an encouragingly strong margin as well. I wanted to ask about sort of the evolution of operational leverage within private. From my understanding, the most significant sort of cost associated with those subscriptions is the Schufa credit check. Please correct me if I'm wrong in that. How often can a subscriber get a Schufa credit check? And is it fair to say that everyone takes one up front and then takes them infrequently or irregularly after that? I guess the point I'm sort of trying to get at here is, as the business progresses, does the effective margin get better because the main cost associated with it is up front? That's sort of the first set of questions, if that's all right. And then the second one, not entirely dissimilarly, when we look at the blend of seller leads as it pertains to organically developed versus inorganically acquired leads, How has that shifted in OneQ? And can you talk a little bit about what you're doing to try to drive that blend towards organic? Thank you.

Okay, let me start off with, Joe, thanks for the questions.

Let me start off with the first one on the private side and the operational leverage we have here. As we've been touching on answering the question from Miriam before, What we are doing here is a mixture between customer lifetime value optimization and pricing testing. Now what we have been doing is we have increased versus Q1 last year the average lifetime from four to five months. That means we have more customers that are eligible of having two to three Shufa inquiries during their lifetime. But what we are seeing, and that is really operational leverage and in favor of us, is that the Shufa costs only represent a very minor effect because we are only seeing 1.2 queries per user on the average at the moment. So obviously users are happy to start and continue their journey with the first credit check inside and then taking that forward. So that helps us in line with a large amount of organic traffic we're getting onto that product to deliver on the margin, which is quite healthy, as you rightly pointed out in your question. On the question around the seller lease, I would hand over to Toby.

It's still approximately the same what we told you. We think we believe in the path. There's a similar split, which is there's about 33% of organically generated and about 67% inorganically generated lease.

So that hasn't changed much. Excellent. Thank you. Welcome.

We'll take our next question from Phan Udomsupa with RBC Capital Markets.

Hi, thank you for taking my questions. Two questions from me, please. So firstly, on the professional segment, looking at the membership revenue growth of 5.6%, could you provide us some qualitative comments around the growth rate of the residential and commercial businesses in any color around the rate of agent growth or ARPU development for each business would be great, please? And the second question is on plus product. Could you provide some color around the current competition for the product, please, and remind us the competitive advantage of the meter plus and cover plus compared to competitors? Thank you.

Okay. So, hi, phone, and thanks for pointing out the quite healthy development of the 5.6% of the professional segment.

What pays into that is, to one extent, the amount of... rate card and price adjustments we could do here. And secondly, the amount of new customers we're getting in. As I said earlier on, we're quite happy with 3.3% customer growth in the first quarter, and we continue to do that. And apart from that, on this 5.6%, the remainder is moving in the rate cards plus value-based price increases that we have taken through the first quarter of 2022. On the plus products, your question was what is driving that and how is competition around that? Frankly, I have to say there is not much competition around that in Germany. Why is that the case? It's simply the case because we are the largest real estate portal in Germany with the highest amount of sale assets. And that's the reason why our buyer plus product is performing well. We have more than 30,000 subscribers on that right now. And we are the portal with the highest quality of leads that can be generated for landlords. And therefore, we are not seeing much from the competition. What we are seeing is happy landlords and happy tenants.

Thank you very much. We'll take our next question from Marius Ferberg with Warburg Research.

Yeah, thanks for taking my question. Actually, just one remaining from my side. With regards to the liquidity management, which had quite a negative impact this quarter, could you give us an update on how much is still managed in there and what kind of products are you investing there? I mean, considering that this is not really your core business and the current times are not really the most safest times to invest in such posts, I guess. Would you consider repaying some debt with or out of these funds that are currently in the liquidity management?

Good question.

We will be paying back our term loan with 100 million out of the existing 290 million that we're still holding as liquidity in our assets, which are managed by Allianz on the one hand and the Landesbank Baden-Württemberg on the other hand. And yes, you are right, Q1 was not the best quarter to invest money. However, looking at the time from initiation of our more than one billion investment into those funds, And comparing that to the amount we would have paid and would have negative financial results on our balance sheet over that period, we are still positive here. So, yes, we saw a downside in Q1, but looking at the overall timeframe, we have managed the liquidity for our shareholders quite well and have outperformed the negative interest rate of the European Central Bank.

Yeah, sure. I mean, I was not doubting that because in the past it yielded quite well, I guess. But my presumption times have changed a little bit, especially since last quarter. And that's why I was pointing to this question.

Absolutely fair point, Marius. And also an unusual statement by a CFO maybe. But I'm not a friend of having too much liquidity on the balance sheet. And that's why we are repaying debt. And as you know, we are in an ongoing share buyback program. And we are investing the rest of the amount of the AutoScout transaction liquidity that we are having for those share buyback programs. So expect us to slowly decrease and reach our overall leverage guidance that we gave out at the capital market thing.

Okay. Thank you very much.

We'll take our next question from Sarah Simon with Baerberg.

Yes, it's just one question. If your trajectory remains similar in terms of revenues and you end up towards the upper or let's say above the high end of the guidance range, to what extent are you focused on the EBITDA range or would you be prepared to invest more aggressively in just Deliver the same EBITDA range, but a lower margin as a percentage for better revenues. Thanks.

Sarah, thanks for the question.

We feel comfortable with the $26 million we announced to our shareholders, and we feel comfortable for the remainder of the year with that, and that answers your question. If there is additional revenue upsides, you will certainly also see an improvement of margin.

Perfect. Thanks.

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

Yes, hi. Good afternoon, everyone. One more follow-up from my side, please. It's just maybe just misunderstanding from my side, but I'm just trying to understand a little bit the apparent disconnect between the strong increase in the marketing spend and strong development in nearly all of your KPIs in the quarter. On the one hand, but on the other hand, the further declines or stagnant traffic figures, if you could maybe help me understand a little bit better why there doesn't seem to be a, you know, there seems to be a bit of a disconnect there. Thank you.

Hi, Craig. Thanks for outlining that and pointing to that. I have to say, as a market leader with more than 130 million visits a month, it's tough to increase that number. And starting from that, I would say it's not a disconnect. It's just we reached a certain limit here. Secondly, if you look at the figures, we still managed to increase some of those unique monthly visitors. But what has come in between is a war in the Ukraine based on the aggression from Russia we saw here. And that has taken a lot of eyeballs to more important points in the world than getting the next real estate in Germany. And we perfectly understand that, but it doesn't have any impact on our strategic decisions, nor on our operational decisions to invest money into the right initiatives.

And if I may add, Craig and Strogi, that points towards the strength of our business model and the strategy we're pursuing, which is we have different levers of monetization, and we're pulling them, and we're pulling on all triggers. And creating this ecosystem has a phenomenal advantage, which is we're creating all these subgroups of interested parties. We do have their customized data. We have their accounts. We have plus subscribers. We can be in touch with them, so we can still do monetization and transactions and be a little bit more independent of what's happening overall. So I think that's one of the advantages that we've been working on behind the scenes.

Okay. Thank you for the clarity. Thank you very much. Thank you.

We'll take our next question from Nizla Nazer with Deutsche Bank.

Great. Thank you. I just have a couple of questions remaining. Firstly, with rising inflation, there's a fear of potentially a recession in Europe and Germany. And could you give us some color on how you as management think about this and how it could affect your business? And are you worried about changing consumer behavior on the back of this and or fewer transactions in the real estate market in Germany? So some color as to how you think about this would be great. And secondly, could you remind us again what your ideal sort of target leverage is? And with the $350 million, you know, your new buyback, is this sort of a part of your leverage management, and would you still consider opportunistic M&A, or are you doing this buyback because you feel like there isn't much out there to go after? Some color there would be great. Thank you.

Thank you.

Yeah, on the overall situation in Germany, I think there's a few things that we probably all know, but yet we don't know how they're going to play out and how do we prepare for it. So let's try to approach this. Inflation is probably something that won't go away. We know that. We also know that there's an increasing level of mortgage rates going up. Now one could say there's actually a negative impact to our business because it's harder to get financing and there's higher financing costs on the other hand. That's the flip side which could be a positive thing. It also revamps our marketplace for marketing properties and for being able to get at least a little bit more supply in terms of times where we've had for very long periods lack of supply the next thing is the rising energy prices i think homeowners as well as landlords and tenants would only see the full picture once they get to the bills for 2022 i think there's going to be quite a bit of a surprise which with a huge impact on people being able to analyze what they can afford going forward it also will Potentially drive a change in pattern in terms of what I'm looking for What it will shape in terms of making moving plans or sticking to a half So in a nutshell how we pay for it We think either way we won't be impacted that heavily But we are observing it and if it may have a dampening effect on the one side It may also have a positive effect on the other side so far knock on wood we've fared pretty well, and we do see that people have more and more of a need for really understanding what's going on in the marketplace, and they're using InvertScout for just that. Second question, I would hand it over to Dirk.

Yeah, Nislam. On the leverage guidance, we stick to what we said at the Capital Markets Day. So there's a midterm target of zero here, and I also outlined on various occasions that we are feeling very, very confident with our ability to deliver again, given the cash conversion of the business. So from time to time, you might see us at minus 0.5, minus one, but it will always be returning back to zero. And on M&A, yes, there's a lot of, there's targets out there. And as I said on earlier occasions as well, if those targets can help us to deliver on our five value drivers, we might consider it. At the moment we feel very comfortable with the direction we've taken and with the direction the year has taken. So there's no imminent M&A that we are looking at, while at the same time I have to say that even if we did We have an ability to go up to three and a half to four times leverage. That's also what we outlined at the capital market stage.

Thank you. Very helpful.

That will conclude our question and answer session. At this time, I'd like to turn the call back over to our speakers for any additional or closing remarks.

Yes, thank you very much for joining this call, this Q1 call. If there's any remaining questions, please don't hesitate to contact the IR team under irsgap24.com. Thank you and bye-bye.