Scout24 SE (G24) Earnings Call Transcript & Summary

Good day and welcome to the Scout24 H1 2021 Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ursula Querette. Please go ahead.

Welcome, everyone, to Scout24's Q2 and Half Year 2021 Earnings Call. My name is Ursula Querette, 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 a 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 classifieds 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 Realtor Lead Engine product further, both with the ImmoScout24 and the immoverkauf24 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 that increasing demand and willingness to pay on the agent side took a very agile approach on price increases. You will see on the next slide 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 Vermietet.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 TenantPlus+ and BuyerPlus+ subscriptions, and we launched a dedicated multichannel 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. 1/3 of the Realtor Lead 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 lapsed corona discounts, another part from the growing Realtor Lead Engine revenues, but the larger portion, approximately 5% to 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 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 TenantPlus+ and BuyerPlus+ 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 5, 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 Bestellerprinzip effect since 5 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 1.9x. 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 consent, 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 ImmoScout24 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 2 in November. So let us now look at the bright side of the equation. Bright because we have exactly the right product 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 ARPU; 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 continue, 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 EUR 15.7 million in H1 2021. This represents an increase by 162% year-on-year. ImmoScout24 referred approximately 53,400 homeowner contacts to agents from January until June this year. And immoverkauf24 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 TenantPlus+ and BuyerPlus+ product is increasing. These products help seekers to find their dream property despite the contracted market situation. Revenues from these products reached EUR 25.1 million in H1 2021, an increase of 30% year-on-year. Let us turn to Slide 7 to have a closer look at this specific revenue portion. The consumer subscriptions are depicted in teal on this slide. Their revenue exceeded the one-off listing or pay-per-ad revenues for the first time. The same holds true for the leads revenue, 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 editions, 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 immoverkauf24 pays 100% just into that. And I could share with you that the integration of the acquisition is completed. immoverkauf24 has been part of the Scout24 family for a year now, With the sale of roughly 840 commission share leads, they generated EUR 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 EUR 0.5 billion 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 sales transactions was estimated at EUR 215 billion for the year 2020. For Vermietet.de, we are following a similar, i.e., fast integration playbook as for immoverkauf24. Step 1 of the platform integration has already started. The plan is that after the private landlord has found a tenant through ImmoScout24, the customer relationship is shifted to Vermietet.de, where the rental contract is automatically populated with the necessary data, ready to be signed. Vermietet.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 Vermietet.de is still on customer acquisition. There is no material revenue generation yet. With the integration of Vermietet.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 3 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 the strong performance of our largest segment, Residential Real Estate. Here, revenue increased by 13.6% to EUR 140 million in half year 1 and 19% to EUR 71.2 million 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 EUR 15.7 million, including the EUR 5.2 million from immoverkauf24. At the same time, the ARPU increased by 5.1% from 709 to 745 in half year 1 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 EUR 25.1 million 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 1 was 9.7% to EUR 135.2 million. 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 changed 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 EUR 17 million. 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. Overall, first half year 2021 revenues were still down 0.8% to EUR 34.3 million, with a slightly improved ordinary operating EBITDA margin of 72.3%. The Media & Other segment revenue increased by 1.1% to EUR 15.2 million in the first half year and by 4.2% to EUR 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 & 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 EUR 189.5 million and an even stronger plus of 14.4% to EUR 95.8 million in the second quarter of 2021, the latter being against the pandemic effect of prior year quarter. Organically, our half year 1 revenue growth was 7% to EUR 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 1 2021. Again, organically, this would have been significantly higher at 62.4%. We already mentioned the continued customer growth and the ARPU increase. Slide 10 gives you the customary quarterly and half yearly overview by segment. Looking at the residential real estate partner ARPU 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 Realtor Lead Engine revenues. The growing agent base, however, creates downward pressure on the ARPU 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 ARPU increase is even higher. Turning to Page 11, let us go through the main ordinary operating items affecting our margin development. The respective cost base effects -- reflect mainly the ongoing implementation of our market network strategy. Own work capitalized increased to EUR 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 EUR 91.8 million, 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 Vermietet.de. For example, the 16% increase in personnel cost is mainly due to the integration of immoverkauf24 employees. Additional costs were incurred due to an increase in personnel at ImmoScout24 and dissynergies after the carve-out of AutoScout24. You will also note the strong increase in marketing costs, both in quarter 2 and over the first half year. In quarter 2, we increased our investments in marketing through targeted regional and national multichannel campaigns. These were placed via TV, radio, billboard advertising and online and serve to increase the awareness for ImmoScout24 on a regional level, revive the vibrancy of the marketplace and to generate new homeowner contacts. The cost also include additional marketing activities of immoverkauf24 and Vermietet.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 personnel costs to accelerate product developments; and investments in FLOWFACT. At the same time, reduced travel expenses had an opposite effect. As the operating effects grew more strongly in percentage terms than revenue and own work capitalized, our ordinary operating EBITDA increased at a lower rate of 4.5% year-on-year to EUR 110.2 million, 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 EBITDA and a highly accretive development in earnings per share. Nonoperating costs decreased by 1.2%, mainly due to lower reorganization costs, while share-based compensation increased year-on-year. As a result, the reported EBITDA was up 5.1% to EUR 101.3 million in half year 1 2021. Depreciation and amortization was 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 EUR 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 effected over the last year as part of our capital return road map, which brings me to the next page. With Page 13, let me update you on where we stand with our capital return road map. The key pillar of our capital return road map was the EUR 794 million 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 30, at a total volume of 2.92 million shares or EUR 200 million. At the AGM, on 8th of July, we proposed a dividend for 2020 in the amount of EUR 68.5 million, corresponding to an amount of EUR 0.82 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 EUR 414 million as of June 30, 2021. Post the most recent share buyback program and the 2021 (sic) [ 2020 ] 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 the declining to flat revenue development for our Media & Other segment. Assuming an improved margin, especially in the fourth quarter, and excluding the cost effects of Vermietet.de, we also confirm our earnings forecast. This assumes a group ordinary operating EBITDA margin of up to 60%. The acquisition of Vermietet.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 the 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 outlook. 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 on the 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 immoverkauf24 and Vermietet.de, we have shown that targeted add-on acquisition accelerate our strategic agenda. For example, the immoverkauf24 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 a 14% EPS growth. And now we are happy to take your questions. Operator, over to you.

[Operator Instructions] We'll take our first question from Christopher Johnen with HSBC.

First, on the Vermietet.de acquisition. I'm just trying to understand the integration of the asset or better, the lack thereof. I mean it seems that you want to keep this as a separate brand and sort of channel leads towards that. I'm just -- maybe a bit of an open question. I'm just trying to understand why that decision was made. I mean I understand they have a couple of 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 earnout reason? Something that's hard to track? Or -- I'd be interested in that because I think it's quite an important acquisition. That's the first question. The second, on the competitive landscape, we've had Adevinta disclose quite a bit more information on eBay Kleinanzeigen. We've had significant, I would say, management changes at Immowelt, 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 Immowelt still very much active? Or are they only really significant in the Northern part of Germany? Is there something that we should focus on from the information that Adevinta 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 from Vermietet.de? Wouldn't it just been easier to give an EBITDA guidance including that? Yes, that's it.

Chris, it's Tobi. Thank you for your questions. So on -- regarding your first question with regards to the brand of Vermietet.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 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 TenantPlus+ or any other products 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 at 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're focused on. There's nothing at this point that we see out there that, 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. Guidance, maybe, Dirk, I'll pass this on to you.

Thanks very much, Tobi. Yes. 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 Adevinta -- sorry, on Vermietet.de [ as then on ] integrated into our product portfolio at the Capital Markets Day. Until then, you can just assume that for the second half of this year, we would have a stable cost base for the business going forward of around EUR 3 million. That's a run rate of EUR 500,000 per month. And once integration is partly finished, which we anticipate for October, November, when you have an integrated user funnel, as Tobi 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 for Vermietet.de for this year.

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

I have 3 from my end. The first is on the comment you've made about the migration to the new membership agents, which 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 immoverkauf. 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 into immoverkauf? 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 immoverkauf? Again, how much of the commission do you actually share? And how large do you think this revenue pool could be given its 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 color there would be great.

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're 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 listings -- sorry, 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 to date, 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 Tobi for the remainder of the question.

Yes. I thank you on -- thank you for the question because this is a very strategic question you asked with regards to the share of commission and the growth potential we see. So currently, we are anywhere between, let's say, 38% to 45%, 47% share of the commission that we get paid for some of those transaction-led deals through immoverkauf24. 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 the key growth drivers 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 we currently completed, let's say, 890 or so. So on an annual basis, that would be, 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 is a niche there that can be expanded, and we also think that we are in a good position to do definitely more.

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 there would be great.

Excellent question. So a year ago or slightly more than a year ago when we look 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 upfront 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.

We take our next question from Adam Berlin with UBS.

I've got 3 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 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 immoverkauf24. 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, you're going to just drop-through and the margins start to improve? Or will second half OpEx in immoverkauf24 be higher than H1? And the third question is, given your permission from the AGM to buy back more shares, should we expect more buybacks during H2?

Yes. 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 in cash and therefore, will continue in the second half of this year. On your first question with regards to real estate ARPU, 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 it's exactly on where we wanted to go with that rate card migration and our ability to increase prices based on terms and conditions. On immoverkauf24, thanks for raising that topic again because when Nizla 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 noncommission-based leads, we sell a few thousand leads. And both businesses are optimized amongst themselves. So a lead that is -- 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.

Will here. Three on immoverkauf, 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?

Will, it's Tobi. 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 received our share of the commission for IV 24, 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. So if you do the math, in other words, let's assume someone does an average 1.5 or 2 or maybe 2.5 or 3 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 important partner. So these are typical agents that have a deeper partnership with us, where we are a growing 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 a different lease quality and there's different volumes that we're talking a bit 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 demands check 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, Dirk, you're going 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 Tobi 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 funnel. And what we are seeing is, as you can also see it 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 6 to 9 months, we're now talking 3 to 6 months and faster. And therefore, your hypothesis is right. The turnover has increased, yes.

And Will, maybe to add -- this is Tobi. 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 they 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.

Just a quick follow-up. So that was all very helpful color. 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 just date 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.

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

I want to try to follow up on Vermietet.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 on to the model and signing up for longer-term subscriptions? And secondly, I just wondered if you could, already at this stage, give us some kind of indication on kind of time line for that, sort of, nearly 300 basis point margin impact to be reversed over the next couple of years. And along those lines, are you able to capitalize on these development costs?

Thank you, Craig. This is Tobi. 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 journey that we're still in. It's just a couple of 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 of hundred thousand that has grown already since we acquired the company. And this is the exact -- 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 Vermietet 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. On your last question, we certainly can capitalize some of the development costs here, especially as they are linked towards an integration of the platform into ImmoScout, as Chris Johnen was asking at the beginning of this call as well. Secondly, on the margin impacts that we are seeing, certainly, we're going to see a, sort of, a height of impact until middle 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, where we then see accelerated growth. Now when we would 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.

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