Quarterly Report • May 4, 2017
Quarterly Report
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Q1 INTERIM REPORT FROM JANUARY 1 TO MARCH 31, 2017
| Einheit | Q1 2017 | Q1 2016 | Q4 2016 | |
|---|---|---|---|---|
| Revenues 1 | in € million | 42.2 | 34.3 | 40.2 |
| B2C segment | in € million | 20.5 | 18.3 | 20.1 |
| B2B E-Recruiting segment | in € million | 17.1 | 12.2 | 15.2 |
| B2B Advertising&Events segment 2 | in € million | 3.6 | 2.9 | 4.2 |
| kununu International segment | in € million | 0.4 | 0.0 | 0.4 |
| EBITDA | in € million | 12.0 | 10.4 | 12.2 |
| EBITDA margin | in % | 28 | 30 | 30 |
| Net profit/loss for the period | in € million | 5.1 | 5.3 | 5.4 |
| Earnings per share (diluted) | in€ | 0.91 | 0.95 | 0.96 |
| Cash flow from operations | in € million | 19.6 | 12.9 | 10.7 |
| Equity | in € million | 75.0 | 65.9 | 69.9 |
| Liquid funds | in € million | 62.1 | 83.2 | 83.4 |
| XING users Germany, Austria, Switzerland (D-A-CH), total | in million | 12.7 | 10.6 | 12.1 |
| thereof platform members | in million | 12.0 | 10.1 | 11.4 |
| thereof subscribers (D-A-CH) | in thsd. | 956 | 904 | 929 |
| B2B customers (D-A-CH) | ||||
| B2B E-Recruiting | in thsd. | 17.7 | 18.5 | 17.0 |
| B2B Advertising&Events | in thsd. | 7.2 | 5.9 | 6.6 |
| Employees | number | 988 | 852 | 961 |
1 Total revenues including other operating income 2 Incl. intercompany revenues
32 Financial calendar, publishing information and contact
The leading social network for business professionals in the German-speaking market gives advice and support to its members during the upheavals in the world of work. In an environment marked by a shortage of skilled workers, digitalization, and changes in values, XING helps its over 12 million members achieve as harmonious a work/ life balance as possible.
For example, members can use XING Jobs to find the position that meets their individual needs, keep up to date with the news offerings on XING and participate in the debate, or find out about changes and trends in the new world of work on the XING spielraum topics portal. In early 2015, the Jobbörse.com website – the biggest job search engine in the German-speaking market – was added to the Company's portfolio. Prior to this, XING had further strengthened its position as the market leader in social recruiting by acquiring kununu, the leading employer review platform in the German-speaking market.
Established in 2003, XING has been listed since 2006 and has been a TecDAX member since September 2011. Members can meet and exchange views on XING in around 80,000 groups or get together at one of the more than 150,000 relevant events for professionals that are organized each year. XING has a presence in Hamburg, Munich, Barcelona, Vienna and Zurich.
Please visit www.xing.com for further details.
03 Executive Board letter
06 XING shares
XING made an excellent start to the new year. We recorded double-digit percentage growth in all of our business units. The increasingly palpable skills shortage is fueling a sharp rise in demand for our state-of-the-art e-recruitment solutions, which is reflected in gratifying revenue growth. At the same time, the changes in the world of work are making more and more people realize one thing: a XING profile is simply essential.
In the first quarter of this year, we were again very successful in monetarizing these trends and developments. Total revenues rose 23 percent in the reporting period to €42.2 million (Q1 2016: €34.3 million). In the B2C segment, we saw revenues increase by 12 percent to €20.5 million (€18.3 million). The B2B E-Recruiting segment was again the Company's biggest driver of growth. Thanks to its successful hiring solutions, XING generated revenues of
€17.1 million, an improvement of 40 percent on the previous year (€12.2 million). The B2B Advertising&Events segment also showed robust growth, with revenues up 23 percent to €3.6 million (€2.9 million).
EBITDA rose by 15 percent in the reporting period to €12.0 million (€10.4 million). This was attributable to higher marketing expenses for our Really out-of-home campaign and the New Work Experience event in Berlin – see below for more information. Due to the scheduled investments for expanding the US presence of XING's subsidiary kununu, profit is on a level with the previous year at €5.1 million (€5.3 million).
Membership growth is still at a record high. XING broke the 12 million members mark in March; overall, we welcomed 567,000 new members, more than ever before in a single quarter. Including XING Events users, the total number of users came to 12.7 million at the end of March (10.6 million at the end of March 2016).
We also continued to expand our positioning as a partner to our members so that they benefit from the tectonic changes in the world of work. All communication is focused on this and was enhanced in the first quarter through the addition of an important element: the New Work Experience – arguably the largest event on the topic of new work in the German-speaking region. This was attended by some 1,000 guests from the worlds of science, start-ups, human resources and the media, whom XING offered an event comprised of 80 high-caliber speakers, panel participants, and a 40-hour program.
On the product side, XING also launched important innovations in the first quarter. For example, the first steps were taken to turn the XING message area into an instant messenger. This move takes account of new usage practices that require increasingly accelerated and spontaneous communication in the professional environment – including via mobile devices. In addition to a new design, the XING Messenger now allows users to see their entire communication flow with a contact at a glance. A check mark shows them whether a message has already been read. The Messenger will also be developed further in the coming months.
As you can see, we are superbly positioned to continue the XING success story. Growing numbers of people are asking themselves what the change in the world of work means for them personally. We help them to answer this question and to seize the opportunities that these changes entail. We do this with helpful contacts, inspiring information, and the right jobs. What is more, we are constantly updating our product so that we continue to meet the requirements of our members at all times.
In this spirit, I would like to thank you for your commitment. We hope you will continue to give us your support. Kind regards,
Kind regards,
Dr. Thomas Vollmoeller, Chief Executive Officer of XING AG
| Number of shares as of March 31, 2017 | 5,620,435 |
|---|---|
| Share capital in € | 5,620,435 |
| Share type | Registered shares |
| IPO | 12/07/2006 |
| ISIN | DE000XNG8888 |
| Bloomberg | O1BC |
| Reuters | OBCGn.DE |
| Transparency level | Prime Standard |
| Index | TecDAX |
| Sector | Software |
| Q1 2017 | Q1 2016 | |
|---|---|---|
| XETRA closing price at the end of the period | €193.90 | €161.15 |
| High | €200.35 | €185.40 |
| Low | €174.95 | €138.40 |
| Market capitalization at the end of the period | €1,090 million | €906 million |
| Average trading volume per day (XETRA) | 5,596 | 13,646 |
| TecDAX ranking | ||
| based on free-float market capitalization | 23 | 22 |
| based on trading volume | 32 | 25 |
| Earnings per share (diluted) | €0.91 | €0.95 |
| Bank Analyst |
Recommendation | Price target | |
|---|---|---|---|
| Berenberg Bank | Sarah Simon | Buy | €217 |
| Commerzbank | Heike Pauls | Buy | €240 |
| Deutsche Bank | Nizla Naizer | Buy | €220 |
| Hauck&Aufhäuser | Lars Dannenberg | Hold | €205 |
| Jefferies | David Reynolds | Buy | €185 |
| Oddo Seydler | Marcus Silbe | Hold | €183 |
| Warburg Research | Jochen Reichert | Buy | €233 |
for the period from January 1 to March 31, 2017
EBITDA (in € million)
We completed the first three months of the new 2017 financial year with strong revenue growth of 23 percent.
Consolidated revenues (including other operating income) increased from €34.3 million in the first quarter of 2016 to €42.2 million in Q1 2017.
The two main drivers of the significant growth were:
After deducting operating expenses, EBITDA for the first three months of 2017 is €12.0 million, which is a year-on-year increase of 15 percent (Q1 2016: €10.4 million).
In the first quarter, EBITDA increased less substantially than total revenues, mainly due to the 48 percent rise in marketing expenses (including TV campaign, out-of-home marketing and the New Work Experience or NWX) compared to Q1 2016. Personnel expenses rose at a slightly slower rate of 21 percent to €15.3 million, while other operating expenses increased roughly in line with revenue performance by 24 percent to €8.7 million in the first quarter of 2017.
Depreciation, amortization and impairment losses in the first three months of the current financial year amounted to €2.9 million (Q1 2016: €2.2 million). The increase is mainly due to the continued increase in the speed of innovation and the development of new products and services resulting in an increase in capitalized development costs.
As a result, EBIT for the period under review was €9.1 million, contrasted with EBIT of €8.2 million for the prior-year quarter.
At €–1.4 million, the financial result was down €1.3 million year-on-year, as the business activities of the US joint venture only started at the end of the previous quarter . As a result, quarterly net profit was €5.1 million, approximately 4 percent lower than the prior-year figure (Q1 2016: €5.3 million).
This translates into earnings per share €0.91 for the first three months of the current financial year, compared with earnings per share of €0.95 for the first quarter of 2016.
Cash flow from operations amounted to €19.6 million in the first three months (Q1 2016: €12.9 million).
There are no changes compared to the forecast published in the 2016 Annual Report.
We achieved good growth thanks to an extremely strong trend in the B2C segment that saw us add around 52,500 paying members (Premium, ProJobs and ProCoach) over the last twelve months. Segment revenues rose by 12 percent, from €18.3 million to €20.5 million in the first quarter of 2017.
In addition to sustained strong membership growth, we also continued to report dynamic subscriber growth in the first three months of the current financial year. The subscriber base thus increased to a total of around 956,000 at the end of March 2017 (around 27,000 in Q1 2017).
It should be noted that organic subscriber growth amounted to around 17,000 (Q1 2016: around 23,000).
The difference of around 10,000 net subscriber additions is primarily a one-time effect attributable to a refined counting method. This method was adjusted as of January 1, 2017 as part of the change in payment service provider during the second half of the year.
Segment EBITDA recorded a similarly positive trend. The operating result in the B2C segment climbed from €9.7 million in the first quarter of 2016 to €10.7 million in the first quarter of 2017. At 52 percent, the segment's EBITDA margin in the first quarter of 2017 remained at the prior-year level (Q1 2016: 53 percent).
Shortly before the end of the first quarter, we reached the 12 million member mark for the first time and set another record with quarterly growth of 567 thousand new members. XING's growth has never been as strong as in the first three months of the current financial year. This achievement reinforces our market-leading position in the German-speaking region and offers proof that maintaining a profile on the leading professional network is part of the modern world of work. We see this growth as an incentive to continue developing services and products that help our members fulfill their professional desires, develop their potential and simply create a better working life for themselves. Including XING Event users, total XING users came to 12.7 million at the end of March 2017 (Q1 2016: 10.6 million).
March 30 was a particularly special Labor Day, as XING hosted the inaugural "New Work Experience" in the sophisticated surroundings of the Westhafen Event&Convention Center in Berlin. Almost 1,000 guests from the worlds of science, startups, corporations and the New Work movement immersed themselves in an agenda as diverse and exciting as the concept of New Work itself. More than 80 high-caliber speakers and panel participants engaged in around 40 hours of sessions on eight stages that included specially-chartered boats on the River Spree named MS New Work and MS Deep Dive.
XING CEO Thomas Vollmoeller clearly defined the event's objective at the outset: "As a company deeply committed to the topic of New Work, we want to make another statement here by creating NWX17, the first major event and the strongest communication platform for 'New Work' in the D-A-CH region. We want to celebrate the issue of New Work while at the same time providing information and, of course, expanding and creating networks – all in the knowledge that New Work is never done and is constantly evolving."
The event in Berlin was soon in full swing: in addition to presenting new ideas and concepts on corporate culture, leadership, collaboration and HR at dozens of NWX sessions, there was plenty of opportunity for debate, interspersed with occasional passionate disputes and even more laughter. It was almost as if the conference attendees were keen to demonstrate the creative power a group of people can unleash when freed from top-down instructions, rigid hierarchies and other formalities, and determined to prove keynote speaker Thomas Sattelberger's point that New Work is about more than just fruit bowls and table football.
This view was reinforced by the considered contributions of prominent speakers. Bestselling author Frederico Pistono, Oxford University professor Dr. Carl Benedikt Frey, HR experts Sophia von Rundstedt and Florian Kienbaum, VOX TV judge Ralf Dümmel and former St. Pauli soccer coach Holger Stanislawski impressed audiences with their lectures and debates and received much acclaim.
Those filling the NWX auditorium reserved their most rapturous applause for guest of honor and founder of the New Work movement, Professor Dr. Frithjof Bergmann, who flew in from the USA to enthrall the audience with his wisdom, charm and humor during his podium discussion with XING's head of corporate communications Marc-Sven Kopka. His stories about the early days of the New Work movement in the 1980s proved as captivating for the guests as the verve with with the 86-year-old spoke about his future plans. Bergmann received a standing ovation from the audience, many of them visibly moved, as the session drew to a close.
This was soon followed by the next highlight of the New Work Experience: the New Work Award (NWA), being presented by XING for the fourth time this year. The company received around 200 submissions for the 2017 NWA, creating an impressive list of the brightest minds and concepts in the future working world. First place in the Established Company category went to Cisco Systems, while the Edition F network prevailed in the Start-up Company category. This year also saw individuals recognized in the New Worker category for the first time. The shortlist was once again selected by the Ideas Laboratory, an expert panel of visionaries from society, business and politics, together with Thomas Sattelberger and Thomas Vollmoeller.
For Vollmoeller, one aspect of this year's award ceremony was particularly important: "Major companies and start-ups are not the only businesses that concern themselves with new working models," he said. "Companies from more traditional sectors are also increasingly daring to organize their work in new and different ways." According to Vollmoeller, the concepts submitted are "as colorful and diverse as the resumes of our individual employees."
Many of the attendees left NWX17 with an array of ideas and inspiration. There was almost unanimous praise not only for the perfect organization and wonderful setting but, most importantly, for the fact that XING succeeded in hosting an event that demonstrated the full extent of the New Work movement and provided guests with a forum. Attendees also commented that the variety and depth of discussions was unique and groundbreaking.
Hamburg's Minister of Culture Carsten Brosda, whose role also includes responsibility for the digital economy, added that "changing the world of work is about far more than just technology. NWX is setting a vital social bearing for the way we want to work in the future." As the "landlord" of the Elbe Philharmonic Hall, Brosda is looking forward to welcoming the second New Work Experience to the Hamburg venue on March 6, 2018.
Embarking into the new world of work! On March 30, 2017, the New Work Experience transformed Berlin's Westhafen complex into the home port of new work.
All signs pointed to growth in the B2B E-Recruiting segment during the first three months of 2017. Segment revenues increased by 40 percent and, combined with growth of approximately €4.9 million, contributed the majority of consolidated revenue growth (+€7.9 million) compared to the prior-year quarter.
The detailed breakdown shows that all three subsegments – Active Recruiting, Employer Branding and Passive Recruiting – contributed to the strong growth. The biggest increase was generated by XING TalentManager and XING ReferralManager in the Active Sourcing business, where more than 1,700 additional licenses (Q1 2017: ~7,200) were sold to corporate customers over the past 12 months.
However, we also recorded significant growth in employer branding profiles to almost 3,200 (around 840 since Q1 2016) profiles sold by the end of March 2017.
Together with thousands of companies that post their vacant positions in XING Jobs, the number of B2B customers in the segment amounts to around 17,700. The slight decline in corporate customers was primarily caused by discontinuing the old XING Company Profile business in favor of the more expensive kununu employer branding profile.
Thanks to the dynamic revenue growth, earnings in the operating segment (EBITDA) also rose appreciably from €8.7 million to €11.9 million. The segment's EBITDA margin was 69 percent in the first three months of 2017 (Q1 2016: 71 percent).
As one year ended and another began, we reflected on our legacy issues from 2016 and New Year's resolutions for 2017. The days "between the years" are renowned for providing a useful break from hectic everyday life while stirring our motivation for the year ahead. Yet the word "really" is often heard during this period, as that inner voice says that you shouldn't really leave the dog alone at home anymore or that you really want to have more time to spend with your family. To highlight this issue and remind people about the things that "really" matter, we launched one of the largest online and offline campaigns in the history of the Company. By running this campaign, we want to meet people where the word "really" is most prevalent and where that inner voice is at its loudest: on the way to work. That means billboards, information screens, smartphones, buses, trains and even bakery bags.
The aim of the campaign was to harness the word "really" to bring both new and existing members onto the XING platform – a place where professionals can tackle what "really" matters and find the ideal solution, namely by changing jobs. This is where XING's corporate customers come into play, as potential candidates are actively looking for specific attractive job advertisements on our platform. This offers the perfect opportunity for companies to publish the most compelling job offers possible while at the same time revamping their employer branding profile.
During the course of the Really campaign, revenues in the Passive Recruiting segment also rose significantly in the first three months of the year.
The word "Eigentlich" ("Really") takes center stage in the visuals and clips. XING launched its major advertising campaign in early 2017.
XING events offer something unique that has never existed in this form before: it connects the digital world with the real world. It has made networking popular. Instead of ephemeral online contacts, you can find "real people" on XING who you can get to know in real life. This establishes valuable contacts that will ideally have a lasting effect and bring genuine benefits to your business: as business partners, discussion partners or for your career prospects.
No other social network can give events such significance. It is XING events have created such strong brand identity and loyalty and helped make XING itself so successful.
In addition to ticketing revenues, this segment also includes revenue from selling advertising space on the XING platform. We accelerated revenue growth in this area thanks to the successful implementation of new and additional advertising formats such as the business pages or AdManager.
As a result, revenues in the B2B Advertising&Events segment grew by 23 percent to €3.6 million in the first quarter of 2017.
Segment EBITDA even improved from €0.4 million to €0.8 million, pushing up the segment EBITDA margin from 14 percent to 23 percent.
This segment mainly generates revenues relating to the provision of services (Q1 2017: €0.4 million vs. Q1 2016: €0.0 million) for the joint venture. The segment profit increased slightly from €–0.3 million in Q1 2016 to €0.0 million in Q1 2017. XING's share of the joint venture's net profit/loss for the year is accounted for as the share of profits and losses of equityaccounted investments.
Permanent monitoring and management of risks are key tasks of a listed company. For this purpose, the Company has implemented the risk early warning system required in accordance with Section 91 (2) AktG and continuously develops it within the context of current market and company developments. As was the case in the previous year, the auditor of the annual financial statements again confirmed the functionality of the system.
Each individual employee is required to avert potential loss from the Company. Everyone has the task to immediately remove all risks in their own area of responsibility and to immediately notify the corresponding risk management contacts at XING in the event of any indications of existing risks or risks which might arise. An essential requirement for such a task is knowledge of the risk management system and maximum risk awareness of each individual employee. For this reason, XING familiarizes its employees with the risk management system using information material and draws their attention to the significance of risk management.
Potential risks are continually identified and analyzed. Identified risks are then systematically evaluated as to their probability of occurrence and the expected potential loss. The persons with risk responsibility and senior executives are questioned with regard to the status of existing risks and the identification of new risks in the course of quarterly risk inventories and status queries. Risks are measured using the gross method, which means that the probability of occurrence and the expected loss is estimated without taking into account countermeasures.
The subsidiaries XING Events GmbH, kununu GmbH, XING E-Recruiting GmbH&Co. KG, XING News GmbH and XING Marketing Solutions GmbH have been integrated into the Company's risk management system. Here, potential risks are also continually identified and analyzed and persons with risk responsibility and senior executives are also questioned with regard to the status of existing risks on a quarterly basis. This integration helps to ensure early recognition too of any risks originating from the operating subsidiaries that may have a negative longterm impact on the Company.
No further going concern risks were identified in addition to the risks presented in the 2016 Annual Report.
for the period from January 1 to March 31, 2017
for the period from January 1, 2016 to March 31, 2017
| In € thousand | Note no. | 01/01/2017– 03/31/2017 |
01/01/2016– 03/31/2016 |
|---|---|---|---|
| Service revenues | 5 | 41,437 | 33,330 |
| Other operating income | 7 | 768 | 957 |
| TOTAL OPERATING INCOME | 42,205 | 34,287 | |
| Personnel expenses | –15,318 | –12,623 | |
| Marketing expenses | –6,168 | –4,179 | |
| Other operating expenses | 8 | –8,745 | –7,039 |
| EBITDA | 11,974 | 10,446 | |
| Depreciation, amortization and impairment losses |
9 | –2,892 | –2,233 |
| EBIT | 9,082 | 8,213 | |
| Share of profits and losses of equity-accounted investments |
3 | –1,260 | –103 |
| Finance income | 1 | 1 | |
| Finance costs | –112 | –26 | |
| EBT | 7,711 | 8,085 | |
| Taxes on income | –2,594 | –2,741 | |
| CONSOLIDATED NET PROFIT / LOSS | 5,117 | 5,344 | |
| Earnings per share (basic) | 0.91 | 0.95 | |
| Earnings per share (diluted) | 0.91 | 0.95 | |
| CONSOLIDATED NET PROFIT / LOSS | 5,117 | 5,344 | |
| Currency translation differences | –3 | 0 | |
| Remeasurement of available-for-sale assets | 11 | 39 | 0 |
| CONSOLIDATED TOTAL COMPREHENSIVE INCOME | 5,153 | 5,344 |
as of March, 31 2017
| In € thousand | Note no. | 03/31/2017 | 12/31/2016 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Intangible assets | |||
| Software and licenses | 4,401 | 4,453 | |
| Internally developed software | 9 | 35,174 | 30,975 |
| Goodwill | 13,143 | 13,143 | |
| Other intangible assets | 1,959 | 2,188 | |
| Property, plant and equipment | |||
| Leasehold improvements | 441 | 513 | |
| Other equipment, operating and office equipment Advance payments made and construction in progress |
7,661 | 5,585 | |
| Financial assets | 823 | 2,709 | |
| Equity investments | 3 | 2,022 | 1 |
| Other financial assets | 30,090 | 79 | |
| Prepaid expenses | 402 | 372 | |
| Deferred tax assets | 1,803 | 1,477 | |
| 97,919 | 61,495 | ||
| CURRENT ASSETS | |||
| Receivables and other assets | |||
| Receivables from services | 21,379 | 19,637 | |
| Other assets | 3,662 | 2,672 | |
| Cash and short-term deposits | |||
| Own cash | 62,084 | 83,428 | |
| Third-party cash | 8,454 | 3,214 | |
| 95,579 | 108,951 | ||
| 193,498 | 170,446 |
| In € thousand | Note no. | 03/31/2017 | 12/31/2016 |
|---|---|---|---|
| EQUITY | |||
| Subscribed capital | 6 | 5,620 | 5,620 |
| Capital reserves | 22,622 | 22,622 | |
| Other reserves | 2,474 | 2,438 | |
| Net retained profits | 44,299 | 39,182 | |
| 75,015 | 69,862 | ||
| NON-CURRENT LIABILITIES | |||
| Deferred tax liabilities | 12,103 | 10,766 | |
| Deferred income | 2,835 | 2,152 | |
| Other provisions | 610 | 604 | |
| Other financial liabilities | 3,285 | 3,220 | |
| Other liabilities | 2,715 | 2,493 | |
| 21,548 | 19,235 | ||
| CURRENT LIABILITIES | |||
| Trade accounts payable | 1,563 | 3,316 | |
| Deferred income | 65,443 | 54,922 | |
| Other provisions | 560 | 625 | |
| Other financial liabilities | 1,304 | 2,037 | |
| Income tax liabilities | 813 | 1,247 | |
| Other liabilities | 27,252 | 19,202 | |
| 96,935 | 81,349 | ||
| 193,498 | 170,446 |
|---|---|
for the period from January 1, 2016 to March 31, 2017
| In € thousand Note no. |
01/01/2017– 03/31/2017 |
01/01/2016– 03/31/2016 |
|---|---|---|
| Earnings before taxes | 7,711 | 8,085 |
| Amortization and write-downs of internally generated software | 1,322 | 775 |
| Depreciation, amortization and impairment losses on other fixed assets | 1,570 | 1,458 |
| Interest income | –1 | –1 |
| Interest received | 1 | 3 |
| Interest expense | 112 | 26 |
| Share of profits and losses of equity-accounted investments | 1,260 | 103 |
| Taxes paid | –2,036 | –1,387 |
| Profit from disposal of fixed assets | 0 | –5 |
| Change in receivables and other assets | –2,762 | –2,021 |
| Change in liabilities and other equity and liabilities | 6,430 | 552 |
| Change in deferred income | 11,204 | 7,039 |
| Elimination of XING Events third-party obligation | –5,240 | –1,776 |
| CASH FLOWS FROM OPERATING ACTIVITIES | 19,571 | 12,851 |
| Payment for capitalization of internally developed software | –5,521 | –3,289 |
| Payment for purchase of software | –336 | –308 |
| Payments for purchase of other intangible assets | –140 | –331 |
| Proceeds from the disposal of fixed assets | 0 | 8 |
| Payments for purchase of property, plant and equipment | –937 | –1,047 |
| Payments for acquisitions of consolidated companies (less cash acquired) 4 |
–732 | 0 |
| Payments for equity-accounted investments 3 |
–3,281 | –2,706 |
| Payments for investments in other financial assets 11 |
–29,954 | 0 |
| CASH FLOWS FROM INVESTING ACTIVITIES | –40,901 | –7,673 |
| 01/01/2017– | 01/01/2016– 03/31/2016 |
|---|---|
| –17 | –15 |
| –17 | –15 |
| 3 | 0 |
| –21,344 | 5,163 |
| 83,428 | 78,034 |
| 62,084 | 83,197 |
| 3,214 | 2,993 |
| 5,240 | 1,776 |
| 8,454 | 4,769 |
| 03/31/2017 |
1 Funds consist of liquid funds.
for the period from January 1, 2016 to March 31, 2017
| Subscribed | Capital | Other | Net | Total | |
|---|---|---|---|---|---|
| In € thousand | capital | reserves | reserves | retained profits | equity |
| AS OF 01/01/2016 | 5,620 | 22,622 | 2,432 | 29,834 | 60,508 |
| Consolidated net profit/loss | 0 | 0 | 0 | 5,344 | 5,344 |
| Consolidated total comprehensive income | 0 | 0 | 0 | 5,344 | 5,344 |
| AS OF 03/31/2016 | 5,620 | 22,622 | 2,432 | 35,178 | 65,852 |
| AS OF 01/01/2017 | 5,620 | 22,622 | 2,438 | 39,182 | 69,862 |
| Consolidated net profit/loss | 0 | 0 | 0 | 5,117 | 5,117 |
| Other comprehensive income | 0 | 0 | 36 | 0 | 36 |
| Consolidated total comprehensive income | 0 | 0 | 36 | 5,117 | 5,153 |
| AS OF 03/31/2017 | 5,620 | 22,622 | 2,474 | 44,299 | 75,015 |
Financial information 25 Notes to the interim consolidated financial statements
for the period from January 1, 2016 to March 31, 2017
The registered offices of XING AG are located at Dammtorstrasse 30, 20354 Hamburg, Germany; the Company is registered at the Amtsgericht (local court) Hamburg under HRB 98807. The parent company of XING AG is Burda Digital GmbH, Munich, and the ultimate parent company of XING AG since December 18, 2012 has been Hubert Burda Media Holding Kommanditgesellschaft, Offenburg, Germany. The next most senior parent preparing consolidated financial statements is Burda Gesellschaft mit beschränkter Haftung, Offenburg.
Operating the leading social network for business professionals in the German-speaking market, XING gives advice and support to its members during the upheavals in the world of work. In an environment marked by a shortage of skilled workers, digitalization, and changes in values, XING helps its around 12 million members achieve as harmonious a work/life balance as possible. XING generates its revenues primarily from fee-based products for end customers and businesses. It is a model in which our customers pay for most of the services provided in advance.
These condensed interim consolidated financial statements of XING AG for the reporting period ending on March 31, 2017, have been prepared in accordance with the International Financial Reporting Standard for interim financial reporting (IAS 34). The condensed interim consolidated financial statements do not contain all of the information required for full annual consolidated financial statements, and should therefore be read in conjunction with the consolidated financial statements as of December 31, 2016.
The period under review began on January 1, 2017, and ended on March 31, 2017. The corresponding prior-year period began on January 1, 2016, and ended on March 31, 2016. The interim consolidated financial statements and the interim group management report of XING AG as of March 31, 2017, were approved for publication on May 3, 2017, by the Executive Board.
The accounting policies applied to these condensed interim consolidated financial statements are consistent with those used for the consolidated financial statements as of December 31, 2016. These interim financial statements have not been audited by the auditor, nor have they been subjected to a review.
Preparation of the consolidated financial statements to a limited extent requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, income and expenses, as well as contingent liabilities. Although these estimates are made in accordance with the best knowledge of management and with due consideration being given to all available knowledge, actual results may differ from these estimates.
The amortization period, the residual values and the amortization method used for finite-lived intangible assets are reviewed regularly. The review of the remaining useful lives in the reporting period revealed that the useful life of the XING platform had been extended by a further 12 months to December 31, 2021.
Several amended IFRSs became effective for 2017. However, the application of these IFRSs did not have any material effects on the annual consolidated financial statements or the condensed interim consolidated financial statements.
XING entered into a joint venture with the leading US job portal Monster with the aim of establishing a US service of kununu in the fields of employer rating and employer branding.
XING contributed a further US\$3,500 thousand (previous year: US\$3,000 thousand) to the joint venture in the reporting period. The financial result includes XING's share of the start-up loss of the joint venture in the amount of US\$1,001 thousand (€942 thousand; previous year: €103 thousand). Previously unrecognized losses from 2016 in the amount of €318 thousand were also recognized in the reporting period.
On April 14, 2016, XING AG acquired all of the shares of Buddy-Broker AG, Zurich/Switzerland, eqipia GmbH, Zug, Switzerland (hereafter: BuddyBroker). In accordance with IFRS 3, the purchase comprises cash price in the equivalent of €2.7 million for 100 percent of the shares, which becomes due immediately, and an earn-out component (up to CHF 4.8 million),
which is based on certain assurances and revenue figures. The fair value of this contingent purchase price component is estimated at €3.7 million. Most of the contingent purchase price will become due in 2019.
Transaction costs amounting to €225 thousand have been posted as expenses and are reported in the income statement under other operating expenses and in cash flows from operating activities in the statement of cash flows.
The following table shows the financial effects of this business combinations on the consolidated financial statements of XING AG. The table includes only those items of the statement of financial positions that include a value:
| Acquisition of BuddyBroker AG | |
|---|---|
| In € thousand | 04/14/2016 |
| Purchased software | 1,940 |
| Property, plant and equipment | 9 |
| Deferred income tax assets | 145 |
| Non-current assets | 2,094 |
| Trade accounts receivable | 40 |
| Other assets | 17 |
| Current assets | 57 |
| Deferred income tax liabilities | 358 |
| Non-current liabilities and provisions | 358 |
| Trade accounts payable | 24 |
| Deferred income | 76 |
| Other liabilities | 187 |
| Current liabilities and provisions | 287 |
| Net assets | 1,506 |
| Purchase price pursuant to IFRS 3 | 6,420 |
| Goodwill | 4,914 |
The goodwill recognized results primarily from synergies arising from the integration of the technology into the XING platform. Recognized goodwill is not tax-deductible.
Financial information 27 Notes to the interim consolidated financial statements
| in € thousand | B2C | B2B E-Recruiting |
Advertis ing&Events |
(kununu) International |
Consolidation of intersegment reve nues / expenses |
Total segments | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 01/01/ – 03/31/ 2017 |
01/01/ – 03/31/ 2016 |
01/01/ – 03/31/ 2017 |
01/01/ – 03/31/ 2016 |
01/01/ – 03/31/ 2017 |
01/01/ – 03/31/ 2016 |
01/01/ – 03/31/ 2017 |
01/01/ – 03/31/ 2016 |
01/01/ – 03/31/ 2017 |
01/01/ – 03/31/ 2016 |
01/01/ – 03/31/ 2017 |
01/01/ – 03/31/ 2016 |
|
| Revenues (from third parties) | 20,549 | 18,265 | 17,104 | 12,244 | 3,433 | 2,774 | 351 | 47 | - | - | 41,437 | 33,330 |
| Intragroup revenues | 0 | 0 | 0 | 0 | 152 | 133 | 0 | 0 | –152 | –133 | 0 | 0 |
| Total revenues | 20,549 | 18,265 | 17,104 | 12,244 | 3,585 | 2,907 | 351 | 47 | –152 | –133 | 41,437 | 33,330 |
| Intragroup segment expenses | –152 | –133 | 0 | 0 | 0 | 0 | 0 | 0 | 152 | 133 | 0 | 0 |
| Other segment expenses | –9,678 | –8,390 | –5,220 | –3,537 | –2,750 | –2,499 | –303 | –390 | 0 | 0 | –30,232 | –14,816 |
| Segment operating result | 10,719 | 9,742 | 11,883 | 8,707 | 835 | 408 | 48 | –343 | 0 | 0 | 23,485 | 18,514 |
| Other operating income / expenses | –11,511 | –8,068 | ||||||||||
| EBITDA | 11,974 | 10,446 |
| in € thousand | 01/01/2017– 03/31/2017 |
01/01/2016– 03/31/2016 |
|---|---|---|
| D-A-CH | 39,612 | 31,872 |
| International | 1,825 | 1,458 |
| 41,437 | 33,330 |
The Company is not reliant on major customers because a significant percentage of Group revenues is not generated with any single customer.
As was the case as of December 31, 2016, the non-current assets (excl. deferred tax assets) of €96,116 thousand (December 31, 2016: €60,018 thousand) are attributable exclusively to the D-A-CH region.
As of March 31, 2017, XING AG had share capital of €5,620,435 (December 31, 2016: €5,620,435) and the Company no longer held any treasury shares.
The Supervisory Board and the Executive Board will propose to the Annual General Meeting on May 16, 2017, to pay a dividend of €1.37 per share for the 2016 financial year (2015: €1.03 per share) plus a special dividend of €1.60 per share (previous year: €1.50). With 5,620,435 shares carrying dividend rights, this corresponds to a total payout of €16.9 million (previous year: €14.2 million). The liquid funds of €62.1 million as of March 31, 2017 and XING's cash-generative business model enable the Company to pay special dividends without changing its business strategy, which is aimed at achieving growth.
Other operating income includes income of €1 thousand (previous year: €92 thousand) from currency translation. The previous year's figure included income from receivables written off in the amount of €392 thousand and from expired liabilities in the amount of €195 thousand.
The following summary breaks down the primary items of other operating expenses:
| 01/01/2017 – | 01/01/2016– | |
|---|---|---|
| in € thousand | 03/31/2017 | 03/31/2016 |
| IT services, management services | 2,242 | 2,321 |
| Travel, entertainment and other business expenses |
1,672 | 460 |
| Occupancy expenses | 1,422 | 1,084 |
| Server hosting, administration and traffic | 789 | 583 |
| Payment transaction costs | 625 | 510 |
| Other personnel expenses | 427 | 431 |
| Training costs | 274 | 142 |
| Expenses attributable to prior periods | 184 | 115 |
| Legal consulting fees | 136 | 462 |
| Accounting fees | 124 | 130 |
| Rental/leasing expenses | 119 | 84 |
| Phone/cell phone/postage/courier costs | 109 | 120 |
| Bad debts | 99 | 125 |
| Supervisory Board remuneration | 81 | 71 |
| Financial statements preparation and auditing costs |
76 | 90 |
| Exchange rate losses | 74 | 78 |
| Office supplies | 62 | 46 |
| Other | 230 | 187 |
| Total | 8,745 | 7,039 |
The other expenses mainly comprise costs of contributions, other charges and insurance costs.
Financial information 29 Notes to the interim consolidated financial statements
In the reporting period from January 1 to March 31, 2017, the useful life of internally developed software was extended by a further 12 months to December 31, 2021. This led to the recognition of lower amortization of €330 thousand than as stipulated in the previous amortization schedule.
Please refer to the consolidated financial statements as of December 31, 2016, for information about related parties. From the perspective of XING AG, no significant changes with respect to the Burda Group occurred until March 31, 2017.
As of March 31, 2017, there are receivables in the amount of €484 thousand (previous year: €988 thousand) outstanding from kununu US LLC, the joint venture with Monster Inc. established in the reporting period. These receivables are shown under trade accounts receivable.
There were no claims against members of the Executive Board and the Supervisory Board as of March 31, 2017.
XING AG acquired various securities in the first quarter of financial year 2017 for the purpose of investing excess liquidity. The fair values of these instruments, all of which are assigned to Level 1, correspond to their notional values multiplied with the prices quoted as of March 31, 2017. All of the securities are available for sale. XING AG recognizes fair value changes in other comprehensive income and reclassifies these changes to profit or loss upon disposal.
The financial liabilities assigned to Level 3 include obligations from contingent purchase prices (earn-out obligations). Estimates with regard to the parameters made as of March 31, 2017 have not changed compared with December 31, 2016.
The following table provides an overview of the carrying amounts and fair values:
| in € thousand | Measurement category |
Carrying amount on 03/31/2017 |
Amortized cost | Cost | Fair value, recognized in OCI |
Fair value, recognized in P&L |
Fair value on 03/31/2017 |
|---|---|---|---|---|---|---|---|
| Non-current receivables and other | |||||||
| financial assets | AfS | 30,090 | 30,033 | 57 | 30,090 | ||
| Current receivables from services | LaR | 21,379 | 21,379 | 21,379 | |||
| Cash and cash equivalents | LaR | 70,538 | 70,538 | 21,379 | |||
| Current trade accounts payable | FLAC | 1,563 | 1,563 | 1,563 | |||
| Other non-current liabilities | FLFVtPL | 3,285 | 3,285 | 3,285 | |||
| Other current liabilities | FLFVtPL | 1,304 | 1,304 | 1,304 |
| in € thousand | Measurement category |
Carrying amount on 03/31/2016 |
Amortized cost | Cost | Fair value, recognized in OCI |
Fair value, recognized in P&L |
Fair value on 03/31/2016 |
|---|---|---|---|---|---|---|---|
| Non-current receivables and other | |||||||
| financial assets | AfS | 79 | 79 | 79 | |||
| Current receivables from services | LaR | 19,637 | 19,637 | 19,637 | |||
| Cash and cash equivalents | LaR | 86,642 | 86,642 | 86,642 | |||
| Current trade accounts payable | FLAC | 3,316 | 3,316 | 3,316 | |||
| Other non-current liabilities | FLFVtPL | 3,220 | 3,220 | 3,220 | |||
| Other current liabilities | FLFVtPL | 2,037 | 2,037 | 2,037 |
Explanation: AfS = Available-for-sale financial assets LaR = Loans and receivables
FLAC = Financial liabilities measured at amortized cost. FLFVtPL = Financial liabilities at fair value through profit or loss
No events which will have a significant impact on the course of business of the XING Group have occurred since the end of the reporting period.
Hamburg, May 3, 2017
The Executive Board
Dr. Thomas Vollmoeller Alastair Bruce
Ingo Chu Jens Pape
Timm Richter
Interim Report on Q1 2017 May 3, 2017 Annual General Meeting May 16, 2017 Half-year Report 2017 August 7, 2017 Interim Report on Q3 2017 November 6, 2017
For Annual Reports, Interim Reports and current financial information about XING AG, please contact:
Investor Relations Patrick Möller Dammtorstraße 30 20354 Hamburg Telefon +49 40 41 91 31 – 793 Telefax +49 40 41 91 31 – 44
For press inquiries and current information about XING AG, please contact:
Marc-Sven Kopka Telefon +49 40 41 91 31 – 763 Telefax +49 40 41 91 31 – 44 [email protected]
Concept, Design and Production Silvester Group, Hamburg, Germany www.silvestergroup.com
Corporate blog of XING AG http://blog.xing.com
Information and news related to the capital markets Twitter: xing_ir
Topics and news related to the Company in general – German only Twitter: xing_de
Corporate information and news in English Twitter: xing_com
XING AG's YouTube channel YouTube: www.youtube.com/user/XINGcom?gl=DE
XING AG's Facebook profile Facebook: www.facebook.com/XING
This interim financial report is available in both German and English. In the event of diversity in interpretation, the German version shall prevail. Both versions and further press information are available for download at http://corporate.xing.com.
Dammtorstraße 30 20354 Hamburg Germany Phone +49 40 41 91 31–793 Fax +49 40 41 91 31–44 [email protected]
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