Interim / Quarterly Report • Nov 10, 2016
Interim / Quarterly Report
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Interim report For the period from January 1 to September 30, 2016
Q3
| Unit | 9M 2016 | 9M 2015 | Q3 2016 | Q3 2015 | Q2 2016 | |
|---|---|---|---|---|---|---|
| Revenues 1) | in € million | 108.3 | 89.9 | 37.8 | 30.5 | 36.2 |
| B2C segment | in € million | 57.1 | 49.9 | 19.9 | 17.4 | 19.0 |
| B2B E-Recruiting segment | in € million | 39.2 | 29.6 | 13.9 | 10.0 | 13.1 |
| B2B Advertising & Events segment2) | in € million | 9.2 | 8.2 | 3.1 | 2.7 | 3.2 |
| kununu International segment | In € million | 0.9 | 0.0 | 0.4 | 0.0 | 0.4 |
| EBITDA | in € million | 35.8 | 27.1 | 12.9 | 9.3 | 12.4 |
| EBITDA margin | in % | 33 | 30 | 34 | 31 | 34 |
| Net profit/loss for the period | in € million | 18.2 | 13.4 | 6.4 | 4.6 | 6.4 |
| Earnings per share (diluted) | in € | 3.23 | 2.40 | 1.14 | 0.83 | 1.14 |
| Cash flow from operations | in € million | 39.3 | 26.8 | 11.5 | 8.9 | 14.9 |
| Equity | in € million | 64.5 | 56.3 | 64.5 | 56.3 | 58.0 |
| Liquid funds | in € million | 82.3 | 74.2 | 82.3 | 74.2 | 75.2 |
| XING users Germany, Austria, Switzerland (D-A-CH), total | in million | 11.6 | 9.7 | 11.6 | 9.7 | 11.10 |
| thereof platform members (D-A-CH) | in million | 10.9 | 9.2 | 10.9 | 9.2 | 10.5 |
| thereof subscribers (D-A-CH) | in thsd. | 925 | 869 | 925 | 869 | 914 |
| B2B customers (D-A-CH) | ||||||
| in the E-Recruiting segment | in thsd. | 17.5 | 17.6 | 17.5 | 17.6 | 18.1 |
| in the Advertising & Events segment | in thsd. | 6.6 | 4.9 | 6.6 | 4.9 | 6.2 |
| Employees | number | 921 | 741 | 921 | 741 | 913 |
1) Total revenues including other operating income 2) Incl. intercompany revenues
3) Definition and disclosure of B2B Ad & Events customers adjusted retrospectively from 1/1/2015
30 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 11 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 Companyʹs 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 over 80,000 groups or get together at one of the more than 100,000 relevant events for professionals that are organized each year. Across all of its platforms, XING has more than 11.6 million users in its core markets of Germany, Austria and Switzerland, just under 11 million of whom are members of the XING platform. The Company has more than 900 employees at its locations in Hamburg, Munich, Aschaffenburg, Barcelona and Vienna.
www.xing.com
03 Executive Board letter
06 XING shares
The third quarter of this year was another really strong threemonth period for XING. Consolidated revenues including other operating income expanded by 24 percent year-on-year to €37.8 million (Q3 2015: €30.5 million). The B2C business, which increased by 14 percent to €19.9 million (€17.4 million), was again the principal revenue driver.
Growth was mainly driven by the B2B E-Recruiting segment, which reports the revenue from products and services that XING sells to companies so that these can prevail in the increasingly challenging "war for talents." Revenues in this segment climbed 39 percent year-on-year to €13.9 million (€10 million). B2B Advertising & Events, the smallest segment in terms of revenues, also achieved growth of 13 percent, generating revenues of €3.1 million (€2.7 million). Group EBITDA in the third quarter amounted to €12.9 million, an increase of 38 percent compared with the prior-year figure of €9.3 million.
Dr. Thomas Vollmoeller, Chief Executive Officer of XING AG
The dynamic growth in the third quarter is therefore also reflected in the figures for the nine-month period. In the first three quarters of the year, total revenues including other operating income rose by 20 percent, from €89.9 million to €108.3 million. Adjusted for an extraordinary item (the appreciation of the Swiss franc in the first quarter of 2015), growth in revenues from operations amounted to a robust 22 percent. The Group's operating result (EBITDA) in this period increased by 32 percent to €35.8 million (9M 2015: €27.1 million).
Membership growth is also at a record level. In the third quarter, we welcomed 441,000 new members in Germany, Austria and Switzerland, more than in any previous third quarter. As of the end of Q3, XING therefore had 10.9 million members; we exceeded the 11 million mark in October.
These figures are the result of our strategic initiatives and the product innovations arising from these that all build on a single megatrend: the fundamental changes in the world of work. In these times of multiple paradigm shifts, our challenge is to support our members in the same way as a mentor. To make useful, inspirational contacts available to them. To draw their attention to opportunities in the job market. And to help them stay abreast of developments in a convenient manner that fits perfectly with their industries and interests. A "flagship" in these endeavors is our "Klartext" media format that celebrated its first anniversary in the third quarter. And the figures are indeed impressive: Klartext has produced over 5 million article views and attracted nearly 600 authors including prominent figures such as Deutsche Post CEO Frank Appel, Federal Minister of Labor and Social Affairs Andrea Nahles, and Dieter Hallervorden.
In recent weeks, we also expanded the solutions for our corporate business by adding another key component, the XING ReferralManager. This gives companies a simple and straightforward opportunity to contact talent for their vacancies systematically and in digital form by using their employees' contact network – a very effective recruitment channel and the supreme discipline of recruitment, so to speak.
Dear shareholders, as you can see, rather than resting on the laurels of past successes we are systematically pursuing our mission with the highest level of dedication. We are firmly committed to helping our members to grow in their jobs and realize their full potential – and to continuing to delight you with reports of XING's successful business performance. Thank you for your commitment to XING. We hope you will continue to give us your support.
Hamburg, November 2016
Kind regards,
Dr. Thomas Vollmoeller, Chief Executive Officer of XING AG
| Number of shares as of September 30, 2016 | 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 |
| 9M 2016 | 9M 2015 | |
|---|---|---|
| XETRA closing price at the end of the period | 187.05€ | 192.00€ |
| High | 194.95€ | 192.60€ |
| Low | 138.40€ | 92.19€ |
| Market capitalization at the end of the period in € million |
1,051 | 1,079 |
| Average trading volume per day (XETRA) | 9,340 | 15,330 |
| Earnings per share (diluted) excl. kununu | ||
| earn-out | 3.23€ | 2.40€ |
| Bank | Analyst | Recommendation | Price target |
|---|---|---|---|
| Bankhaus Metzler | Nicholas Balz | Buy | 195€ |
| Berenberg Bank | Sarah Simon | Buy | 217€ |
| Commerzbank | Heike Pauls | Buy | 240€ |
| Deutsche Bank | Benjamin Kohnke | Buy | 200€ |
| Goldman Sachs | Carl Hazeley | Hold | 185€ |
| Hauck & Aufhäuser | Lars Dannenberg | Hold | 205€ |
| Jefferies | James Lockyer | Buy | 192€ |
| Montega | Alexander Braun | Hold | 180€ |
| Oddo Seydler | Marcus Silbe | Hold | 183€ |
| Warburg Research | Jochen Reichert | Buy | 217€ |
for the period from January 1 to September 30, 2016
The first three quarters of the current financial year were a successful period of unabated growth for us in which we increased revenues and earnings substantially year-on-year.
Consolidated revenues including other operating income climbed 20 percent from €89.9 million to €108.3 million. Adjusted for an extraordinary item (the appreciation of the Swiss franc in the first quarter of 2015), growth in revenues from operations amounted to a robust 22 percent in the reporting period.
The B2B E-Recruiting and B2C segments contributed to this development with growth rates of 32 and 15 percent, respectively.
The Group's operating result (EBITDA) rose even more appreciably compared with the prior-year period. This was because the main operating expenses increased at a lower rate than revenues in the reporting period. For instance, personnel expenses, the largest single cost item, rose by just 17 percent to €40.0 million (9M 2015: €34.2 million).
Marketing expenses also increased at a substantially slower pace than revenues, at just 13 percent. Altogether, we invested €9.8 million in building the brand, in our positioning and in acquiring new members. In addition, we also further grew our B2B marketing activities, particularly to market our innovative e-recruiting solutions.
Other operating expenses likewise increased at a significantly lower rate than revenues, rising by only 13 percent to €22.6 million in the first nine months of the current financial year.
Consequently, the Group's operating result (EBITDA) in the reporting period rose disproportionately by 32 percent to €35.8 million (9M 2015: €27.1 million). As a result, the margin in the first nine months was 33 percent, up from 30 percent in the prior-year period.
EBITDA (in € million)
Depreciation, amortization and impairment losses totaled €7.2 million, six percent higher than the prior-year figure of €6.8 million. This was mainly due to an increase in investments in new products. The figure includes write-downs of around €0.2 million for the assets of the acquired company Buddybroker identified in the purchase price allocation.
As a result, EBIT for the period under review was €28.6 million, compared with EBIT of €20.2 million for the same period in 2015 (+41 percent).
After deducting taxes of €8.7 million, net profit was €18.2 million and thus 35 percent higher than net profit reported in the same period of 2015 (€13.4 million).
Net profit for the period (in € million)
The XING platform is witnessing unabated growth in the D-A-CH region. We added over 1.3 million new members to the XING platform in the first nine months of the current financial year (9M 2015: 1.2 million), more than in any other nine-month period. This increased the membership base to 10.9 million at the end of September (September 2015: 9.2 million).
Ever since our event ticketing platform amiando was rebranded as XING Events and thus integrated even more closely with the XING platform, we have also reported on the growth of XING Events users. We added around 670,000 new users to the XING Group since figures were first recorded. Together with the 10.9 million platform members, this gives a XING user base of 11.6 million at the end of September 2016.
Earnings per share in the reporting period therefore were €3.23, compared with earnings per share of €2.40 for the same period of 2015.
XING Klartext was rolled out as a novel journalistic platform one year ago for experts and well-known personalities to take a position and put their opinions on current and controversial topics concerning business and professions up for debate.
The views held are accompanied by conflicting or different opinions. XING members not only have the chance to comment on opinion pieces, but can themselves also become Klartext authors and participate interactively in the debate. Klartext authors are chosen by the editorial team headed up by publisher Roland Tichy and editor-in-chief Jennifer Lachman.
This offering aims to help our members stay abreast of developments in their industries. We offer XING members a customized portfolio of information that is local, nearby and relevant.
Here, too, we are concerned with the activity of our members. We want to make users' address books come alive.
Summing up after the first year of Klartext:
XING's robust member growth has resulted in a further increase in the rate of conversion from free to paid memberships. In the reporting period, we added more than 44,000 new subscribers for the enhanced and fee-based functions (9M 2015: +34,000). In the third quarter of 2016, the number of subscribers increased by around 11,000 (Q3 2015: 8,000). At the end of the third quarter, the membership base of paying B2C customers in the D-A-CH region therefore comprises around 925,000 subscribers.
The dynamic development in relation to non-financial key performance indicators in the B2C segment had a correspondingly positive impact on the segment's revenue performance. Revenues rose from €49.9 million to €57.1 million, representing growth of 15 percent in the first nine months. We are very satisfied with the results achieved. The B2C segment's growth is largely due to the rise in the number of subscribers (Premium, ProJobs) and the further increase in average revenue per user (ARPU).
Segment EBITDA rose six percent in the reporting period, from €29.0 million to €30.7 million. This result in a segment margin of 54 percent.
The XING recruiting products offer innovative solutions enabling companies to be successful in the "war for talents" and attract the right talent to their organizations. XING supports corporate customers with products for active sourcing and passive sourcing (XING Talent Manager and XING Jobs), and for building and maintaining their employer brand (Employer Branding Profiles). By acquiring Eqipia Technologie in the second quarter of 2016, we also expanded our range of products through the addition of a highly efficient recruitment tool – the XING referral manager (XING EmpfehlungsManager – XEM). This gives companies a simple and straightforward opportunity to contact talent for their vacancies systematically and in digital form by using their employees' contact network – a very effective recruitment channel and the supreme discipline of recruitment, so to speak.
The initiatives had a positive effect on the revenue and earnings performance of the B2B E-Recruiting segment in the reporting period, with nine-month revenues climbing 32 percent from €29.6 million to €39.2 million. In the third quarter of 2016, segment revenues jumped by a very healthy 39 percent. Segment EBITDA rose at a disproportionately high rate of 48 percent to €26.1 million (9M 2015: €17.6 million). At around 17,500, the number of corporate customers (B2B customers) matched the prior-year level. However, this is only due to the fact that we discontinued old XING company profiles at the end of 2015.
We generated considerable growth over the prior-year period in the B2B Advertising & Events segment, lifting revenues by 12 percent to €9.2 million. The revenue boost is largely due to the success of XING AdManager, which is winning over more and more customers: We increased the total number of B2B customers from around 4,900 (Q3 2015) to over 6,600 as of the end of September 2016. We retrospectively adjusted the disclosure of B2B customers compared with prior periods and prior-year periods. Using AdManager, our customers increase the range for their events, products or profiles by additionally marketing or positioning their offerings and services on XING. Customer growth had a positive impact on the segment's profitability. EBITDA climbed from €1.4 million (9M 2015) to €1.8 million in the first nine months of 2016.
In the (kununu) International segment, which we report on separately, the revenues and results currently reported are those generated by XING AG from the provision of technical infrastructure and services to the joint venture between kununu and US-based Monster, Inc. The joint venture's results are consolidated in the financial result of XING AG using the equity method. In this case, we expect start-up losses in 2016 and the following year.
The joint venture was formed with its registered office in Boston and is already doing business in the US market. The first steps are quite promising. Since its foundation in the past year, it has generated more than 200,000 reviews of US companies on the US kununu platform.
Risk report
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. It is every employee's 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 and XING E-Recruiting GmbH&Co.KG 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 long-term impact on the Company.
The risk management system covers only risks but not opportunities.
No further going concern risks were identified in addition to the risks presented in the 2015 Annual Report.
for the period from January 1, 2016 to September 30, 2016
| In € thousand | Note no. | 01/01/2016 – 09/30/2016 |
01/01/2015 – 09/30/2015 |
07/01/2016 – 09/30/2016 |
07/01/2015 – 09/30/2015 |
|---|---|---|---|---|---|
| Service revenues | 106,054 | 87,291 | 37,154 | 30,001 | |
| Other operating income | 7 | 2,224 | 2,642 | 599 | 454 |
| Total oper ating income |
108,278 | 89,933 | 37,753 | 30,455 | |
| Personnel expenses | –40,027 | –34,179 | –14,004 | –11,402 | |
| Marketing expenses | –9,817 | –8,659 | –2,919 | –2,979 | |
| Other operating expenses | 8 | –22,639 | –20,028 | –7,923 | –6,753 |
| E BITDA | 35,795 | 27,067 | 12,907 | 9,321 | |
| Depreciation, amortization and | |||||
| impairment losses | 9 | –7,196 | –6,817 | –2,502 | –2,390 |
| E BIT | 28,599 | 20,250 | 10,405 | 6,931 | |
| Share of profits and losses of equity-accounted investments |
–1,674 | 0 | –866 | 0 | |
| Finance income | 156 | 23 | 22 | 12 | |
| Finance costs | –234 | –123 | –119 | –80 | |
| EBT | 26,847 | 20,150 | 9,442 | 6,863 | |
| Taxes on income | –8,681 | –6,725 | –3,017 | –2,223 | |
| Consol idated net prof it/loss |
18,166 | 13,425 | 6,425 | 4,640 | |
| Earnings per share (basic) | 3.23€ | 2.40€ | 1.14€ | 0.83€ | |
| Earnings per share (diluted) | 3.23€ | 2.40€ | 1.14€ | 0.83€ | |
| Consol idated net prof it/loss |
18,166 | 13,425 | 6,425 | 4,640 | |
| Currency translation differences | 0 | –8 | 0 | 0 | |
| Other comprehensive income | 0 | –8 | 0 | 0 | |
| Consol idated total comprehe nsive income |
18,166 | 13,417 | 6,425 | 4,640 |
as of September, 30 2016
| In € thousand Note no. |
09/30/2016 | 12/31/2015 |
|---|---|---|
| Non- curre nt a ssets |
||
| Intangible assets | ||
| Purchased software | 4,578 | 3,784 |
| Internally developed software 9 |
28,582 | 19,855 |
| Goodwill | 13,143 | 8,228 |
| Other intangible assets | 1,883 | 1,930 |
| Property, plant and equipment | ||
| Leasehold improvements | 327 | 411 |
| Other equipment, operating and office equipment Advance payments made and construction in progress |
4,928 | 4,570 |
| Financial assets | ||
| Equity-accounted investments | 1,033 | 0 |
| Other equity investments | 1 | 51 |
| Other financial assets | 50 | 34 |
| Deferred tax assets | 1,054 | 378 |
| 55,579 | 39,241 | |
| Curre nt a ssets |
||
| Receivables and other assets | ||
| Receivables from services | 16,646 | 15,873 |
| Income tax receivables | 0 | 237 |
| Other assets | 2,778 | 3,547 |
| Cash and short-term deposits | ||
| Cash | 82,346 | 78,034 |
| Third-party cash | 6,321 | 2,993 |
| 108,091 | 100,684 | |
| 163,670 | 139,925 |
| In € thousand | Note no. | 09/30/2016 | 12/31/2015 |
|---|---|---|---|
| Equ it y |
|||
| Subscribed capital | 6 | 5,620 | 5,620 |
| Treasury shares | 0 | 0 | |
| Capital reserves | 22,622 | 22,622 | |
| Other reserves | 2,432 | 2,432 | |
| Net retained profits | 33,780 | 29,834 | |
| 64,454 | 60,508 | ||
| Non- curre nt li abil ities |
|||
| Deferred tax liabilities | 10,196 | 6,992 | |
| Deferred income | 2,358 | 3,244 | |
| Other provisions | 336 | 333 | |
| Other financial liabilities | 3,129 | 1,304 | |
| Other liabilities | 2,229 | 2,495 | |
| 18,248 | 14,368 | ||
| Curre nt li abi lities |
|||
| Trade accounts payable | 1,640 | 3,797 | |
| Deferred income | 53,284 | 44,234 | |
| Other provisions | 752 | 588 | |
| Other financial liabilities | 2,017 | 435 | |
| Income tax liabilities | 1,989 | 154 | |
| Other liabilities | 21,286 | 15,841 | |
| 80,968 | 65,049 | ||
| 139,925 | 163,670 | ||
|---|---|---|---|
for the period from January 1, 2016 to September 30, 2016
| In € thousand Note no. |
01/01/2016 – 09/30/2016 |
01/01/2015 – 09/30/2015 |
|---|---|---|
| Earnings before taxes | 26,847 | 20,150 |
| Amortization and impairment of capitalized development costs | 2,734 | 2,274 |
| Depreciation, amortization and impairment losses on other fixed assets | 4,462 | 4,543 |
| Personnel expenses, stock option program | 0 | 15 |
| Interest income | –28 | –23 |
| Interest received | 30 | 25 |
| Interest expense | 233 | 123 |
| Share of profits and losses of equity-accounted investments | 1,674 | 0 |
| Taxes paid | –4,294 | –4,292 |
| Profit from disposal of fixed assets | –134 | 0 |
| Change in receivables and other assets | –22 | –1,436 |
| Change in liabilities and other equity and liabilities | 3,294 | 885 |
| Change in deferred income | 8,031 | 7,412 |
| Non-cash changes in basis of consolidation | –228 | –15 |
| Elimination of amiando third-party obligation | –3,328 | –2,902 |
| C a sh f lo ws fr om oper ating act ivities |
39,271 | 26,759 |
| Payment for capitalization of internally developed software | –11,461 | –7,587 |
| Payment for purchase of software | –526 | –457 |
| Payments for purchase of other intangible assets | –468 | –407 |
| Payments for purchase of property, plant and equipment | –2,525 | –1,646 |
| Proceeds from the disposal of fixed assets | 178 | 0 |
| Payments for acquisitions of consolidated companies (less cash acquired) 4 |
–3,148 | –5,820 |
| Payments for equity-accounted investments 3 |
–2,706 | 0 |
| Payments for investments in other financial assets | 0 | –6 |
| C a sh f lo ws fr om invest ing act ivities |
–20,656 | –15,923 |
| 01/01/2016 – | 01/01/2015 – | |
|---|---|---|
| In € thousand | 09/30/2016 | 09/30/2015 |
| Proceeds from the exercise of options | 0 | 2,942 |
| Proceeds from the sale of treasury shares | 0 | 1,635 |
| Payment of regular dividend | –5,789 | –5,145 |
| Payment of special dividend | –8,431 | 0 |
| Interest paid | –83 | –54 |
| C a sh f lo ws fr om f inancing act ivities |
–14,303 | –622 |
| Currency translation differences | 0 | –8 |
| Net change in cash funds | 4,312 | 10,206 |
| Cash funds at the beginning of the period | 78,034 | 63,951 |
| C a sh funds at the end of the per iod 1) |
82,346 | 74,157 |
| Third-party cash funds at the beginning of period | 2,993 | 3,248 |
| Change in third-party cash and cash equivalents | 3,328 | 2,902 |
| Third -part y c a sh funds at the end of the per iod |
6,321 | 6,150 |
1) Cash and cash equivalents consist of liquid funds.
for the period from January 1, 2016 to September 30, 2016
| Net | ||||||
|---|---|---|---|---|---|---|
| Subscribed | Capital | Treasury | Other | retained | Total | |
| In € thousand | capital | reserves | shares | reserves | profits | equity |
| As of 01/01/2015 | 5,592 | 18,479 | –434 | 2,429 | 17,341 | 43,407 |
| Currency translation | 0 | 0 | 0 | –8 | 0 | –8 |
| Other comprehensive income | 0 | 0 | 0 | –8 | 0 | –8 |
| Consolidated net profit/loss | 0 | 0 | 0 | 0 | 13,424 | 13,424 |
| Consolidated total comprehensive income | 0 | 0 | 0 | –8 | 13,424 | 13,416 |
| Capital increase from share-based payment | 28 | 2,942 | 0 | 0 | 0 | 2,970 |
| Sale of treasury shares | 0 | 1,201 | 434 | 0 | 0 | 1,635 |
| Dividend for 2014 | 0 | 0 | 0 | 0 | –5,145 | –5,145 |
| Personnel expenses, stock option program | 0 | 0 | 0 | 15 | 0 | 15 |
| As of 09/30/2015 | 5,620 | 22,622 | 0 | 2,436 | 25,620 | 56,298 |
| As of 01/01/2016 | 5,620 | 22,622 | 0 | 2,432 | 29,834 | 60,508 |
| Consolidated net profit/loss | 0 | 0 | 0 | 0 | 18,166 | 18,166 |
| Consolidated total comprehensive income | 0 | 0 | 0 | 0 | 18,166 | 18,166 |
| Regular dividend for 2015 | 0 | 0 | 0 | 0 | –5,789 | –5,789 |
| Special dividend | 0 | 0 | 0 | 0 | –8,431 | –8,431 |
| As of 09/30/2016 | 5,620 | 22,622 | 0 | 2,432 | 33,780 | 64,454 |
for the period from January 1 to September 30, 2016
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 over 10 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 September 30, 2016, 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, 2015.
The period under review began on January 1, 2016, and ended on September 30, 2016. The corresponding prior-year period began on January 1, 2015, and ended on September 30, 2015. The interim consolidated financial statements and the interim group management report of XING AG as of September 30, 2016, were approved for publication on November 7, 2016, 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, 2015. 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, 2020.
Several amended IFRSs became effective for 2016. 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 sounding out the opportunities for success with shared service provision in the USA.
The aim is to bring increased employer transparency to the US labor market. For the US service, kununu's expertise in the fields of employer rating and employer branding will be enhanced by the market knowledge, marketing expertise and market penetration offered by Monster. The head office of the joint venture is Boston.
XING contributed US\$3,000 thousand (€2,706 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\$1,876 thousand (€1,674 thousand).
On April 14, 2016, XING AG acquired all of the shares of Buddy-Broker AG, Zurich/Switzerland, eqipia GmbH, Zug/Switzerland (hereafter: BuddyBroker). Among others, BuddyBroker operates eqipia, the leading program for employee referrals in Switzerland. This product enables us to offer a referral manager to all of our customers in the D-A-CH region, which makes us the first professional network to offer such a product. 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. The initial preliminary consolidation was carried out as of the date on which ownership of the interests was transferred (April 14, 2016).
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 |
First-time purchase price allocation was initially performed on a provisional basis in the interim consolidated financial statements as of June 30, 2016.
Since its acquisition by XING, BuddyBroker has contributed €50 thousand to revenues and € –323 thousand to EBITDA. If the merger of the two companies had taken place at the start of the year, these figures would be €92 thousand and € –576 thousand, respectively.
The goodwill recognized results primarily from synergies arising from the integration of the technology into the XING platform. Recognized goodwill is not tax-deductible.
Since January 2016, we have reported on four segments (B2C, B2B E-Recruiting, B2B Advertising&Events, (Kununu) International).
The B2C reporting segment includes the Platform/Content, Premium Network, Pro Work, Kununu DACH and New B2C business units. They serve XING members who use XING.com, XING Jobs (formerly E-Recruiting) and kununu.com (formerly E-Recruiting) to network with other professionals, find a suitable job, obtain information about potential employers, or read about career-related topics. These services are monetized mainly through paid memberships (Premium, ProJobs). New B2C activities are also included here (e.g. Pro Coach).
The B2B E-Recruiting segment serves B2B customers who seek access to employees and talent. This service is monetized through the development, marketing and sale of the XING Talent Manager (Active Recruiting), job ad (Passive Recruiting), and Employer Branding Profile products. The necessary profiles and traffic from candidates are generated by the B2C segment.
The Advertising & Events segment comprises the Advertising (formerly Network/Premium) and Events business units. They serve advertising and events clients. This service is monetized via advertising income and ticketing.
We report on other activities outside of the D-A-CH (Germany, Austria, Switzerland) region in the (Kununu) International segment. The reconciliation statement (other operating income/ expenses) includes corporate divisions such as IT, Finance, and Human Resources, as well as other business activities that by definition do not constitute segments.
Assets, liabilities and investments are not segmented on the basis of the operating segments because these indicators are not used as control parameters at segment level. For example, a large share of the investments relates to the internally developed platform that cannot be allocated to the segments. Segment data is calculated on the basis of the accounting policies applied in the consolidated financial statements. Costs are allocated to the originating divisions. Business transactions between the companies in the segments are conducted on an arm's length basis. As the measure of segment earnings XING uses the operating result for the segment, calculated as gross profit or loss less costs that are directly attributable
to the segment (staff, marketing, rental expenses, divisionrelated IT expenses (e.g., development costs), etc.). Expenses that are not directly attributable to a segment (e.g., central IT expenses), impairment losses and reversals of impairment losses are presented in the reconciliation statement along with the operating result from central functions that do not constitute a segment. Extraordinary items and items arising from purchase price allocation are eliminated. Adjusted
extraordinary items include restructuring expenses, gains/losses on disposal, impairment losses, and other non-operating expenses or income.
The figures for the prior-year period have been reconciled with the new structure applicable to the reporting period. The segment revenues and results for the period under review are shown in the following tables:
| B2B | B2B Advertising |
kununu | Consolidation of intersegment reve |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in € thousand | B2C | E-Recruiting | & Events | International | nues / expenses | Total segments | ||||||
| 01/01/ – | 01/01/– | 01/01/ – | 01/01/– | 01/01/ – | 01/01/– | 01/01/ – | 01/01/– | 01/01/ – | 01/01/– | 01/01/ – | 01/01/– | |
| 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | 09/30/ | |
| 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |
| Revenues (from third parties) | 57,123 | 49,880 | 39,229 | 29,642 | 8,795 | 7,769 | 907 | 0 | 0 | 0 | 106,054 | 87,291 |
| Intragroup revenues | 0 | 0 | 0 | 0 | 414 | 476 | 0 | 0 | –414 | –476 | 0 | 0 |
| Total revenues | 57,123 | 49,880 | 39,229 | 29,642 | 9,209 | 8,245 | 907 | 0 | –414 | –476 | 106,054 | 87,291 |
| Intragroup segment expenses | –414 | –476 | 0 | 0 | 0 | 0 | 0 | 0 | 414 | 476 | 0 | 0 |
| Other segment expenses | –26,056 | –20,380 | –13,163 | –12,028 | –7,377 | –6,891 | –890 | 0 | 0 | 0 | –47,485 | –39,298 |
| Segment operating result | 30,654 | 29,024 | 26,066 | 17,614 | 1,832 | 1,355 | 17 | 0 | 0 | 0 | 58,569 | 47,992 |
| Other operating income/expenses | –22,773 | –20,925 | ||||||||||
| EBITDA | 35,795 | 27,067 |
| In Tsd.€ | 01/01/2016 – 09/30/2016 |
01/01/2015 – 09/30/2015 |
|---|---|---|
| D-A-CH | 100,886 | 83,535 |
| International | 5,168 | 3,756 |
| 106,054 | 87,291 | |
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, 2015, the non-current assets (excl. deferred tax assets) of €53,598 thousand (December 31, 2015: €38,863 thousand) are attributable exclusively to the D-A-CH region.
As of September 30, 2016, XING AG had share capital of €5,620,435 (December 31, 2015: €5,620,435) and the Company no longer held any treasury shares.
In accordance with a resolution adopted by the Annual General Meeting on June 2, 2016, a dividend of €1.03 per share for the 2015 financial year (2014: €0.92 per share) plus a special dividend of €1.50 per share was paid. With 5,620,435 shares carrying dividend rights, this corresponds to a total payout of €14.2 million. The liquid funds of €75.2 million as of September 30, 2016 and XING's cash-generative business model enable the Company to pay a special dividend without changing its business strategy, which is aimed at achieving growth.
Other operating income includes income of €92 thousand (previous year: €1,246 thousand) from currency translation. Also included is income from receivables written off in the amount of €392 thousand (previous year: €36 thousand) and from expired liabilities in the amount of €195 thousand (previous year: €0 thousand).
The following summary breaks down the primary items of other operating expenses:
| in € thousand | 01/01/2016 – 09/30/2016 |
01/01/2015 – 09/30/2015 |
|---|---|---|
| IT services, management services | 7,241 | 6,237 |
| Occupancy expenses | 3,827 | 3,148 |
| Server hosting, administration and traffic | 1,879 | 1,684 |
| Travel, entertainment and other business expenses |
1,812 | 1,458 |
| Payment transaction costs | 1,517 | 1,574 |
| Other personnel expenses | 1,338 | 1,003 |
| Legal consulting fees | 890 | 587 |
| Bad debts | 813 | 990 |
| Training costs | 669 | 473 |
| Accounting fees | 492 | 342 |
| Phone/cell phone/postage/courier costs | 416 | 374 |
| Financial statements preparation and auditing costs |
265 | 260 |
| Rental/leasing expenses | 257 | 208 |
| Supervisory Board remuneration | 241 | 215 |
| Office supplies | 195 | 218 |
| Expenses attributable to prior periods | 193 | 128 |
| Exchange rate losses | 139 | 466 |
| Other | 455 | 663 |
| Total | 22,639 | 20,028 |
The other expenses mainly comprise costs of contributions, other charges and insurance costs.
In the reporting period from January 1 to September 30, 2016, the useful life of internally developed software was extended by a further 12 months to December 31, 2020. This led to the recognition of lower amortization of €745 thousand than as stipulated in the previous amortization schedule.
Please refer to the consolidated financial statements as of December 31, 2015, for information about related parties. From the perspective of XING AG, no significant changes with respect to the Burda Group occurred until September 30, 2016.
As of June 30, 2016, there are receivables in the amount of €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 September 30, 2016.
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, November 7, 2016
The Executive Board
Dr. Thomas Vollmoeller Ingo Chu
Timm Richter Jens Pape
Interim Report Q3 2016 November 7, 2016 Annual Report 2016 March 22, 2017 Interim Report Q1 2017 May 3, 2017 Annual General Meeting May 16, 2017 Half-year Report 2017 August 7, 2017 Interim Report Q3 2017 November 6, 2017
(Preliminary dates)
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]
Silvester Group, Hamburg 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
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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