Investor Presentation • Apr 6, 2012
Investor Presentation
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Roadshow Presentation March 2012
This presentation was produced in March 2012 by XING AG (the "Company") solely for use as an information source for potential business partners and is strictly confidential. It has been made available to you solely for your own information and may not be copied, distributed or otherwise made available to any other person by any recipient. This presentation is not an offer for sale of securities in the United States. The distribution of this presentation to you does not constitute an offer or invitation to subscribe for, or purchase, any shares of the XING AG and neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever.
The facts and information contained herein are as up-to-date as is reasonably possible and are subject to revision in the future. Neither the Company nor any of its subsidiaries, any directors, officers, employees, advisors nor any other person makes any representation or warranty, express or implied as to, and no reliance should be placed on, the accuracy or completeness of the information contained in this presentation. Neither the Company nor any of its subsidiaries, any directors, officers, employees, advisors or any other person shall have any liability whatsoever for any loss arising, directly or indirectly, from any use of this presentation. The same applies to information contained in other material made available at the presentation.
While all reasonable care has been taken to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of the Company. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate.
This presentation contains forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. These statements are generally identified by words such as "believes," "expects," "predicts," "intends," "projects," "plans," "estimates," "aims," "foresees," "anticipates," "targets," and similar expressions. The forward-looking statements, including but not limited to assumptions, opinions and views of the Company or information from third party sources, contained in this presentation are based on current plans, estimates, assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. The Company does not represent or guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any forward-looking statements.
This presentation speaks as of December 2011. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date.
Results contained in this presentation are partly based on unaudited pro-forma financial results that the Company derived from its preliminary and past financial statements for the indicated periods in order to make these periods comparable and show non-recurring costs.
This presentation contains preliminary results and pro-forma results. The preliminary results may change during their final review. While the Company believes that its pro-forma financial results are reflective of its recurrent trends and the on-going status of its business, there can be no assurance that its pro-forma results will accurately reflect these trends and status and therefore, its investors are urged not to rely solely upon the pro-forma results when making their investing decision and the pro-forma results should always be reviewed together with its actual financial results.
2
Strong Economics 4
Leading social network for professionals in Europe´s largest economy (D-A-CH)
Large and loyal customer base creating strong barriers to entry
Strong top and bottom line performance
Successful revenue diversification
Large growth potential in core markets
1
2
Executive Summary
Clear Strategy For Growth 3
Strong Economics 4
"A more successful and rewarding working life for every professional"
* Pricing for all new paying members since April 2011 (Discount of 20% for first term, auto-renewal with new pricing)
With >5.3m+ members in D-A-CH XING is the largest business network in a region with 100m inhabitants and the world's #4 in GDP
800k net new members in 2011
with more than 4/5 of all segment page views, XING is the most active business network
* Source: United Nations World Population Prospects 2006, United Nations Economic Commission for Europe – Statistical Division, European Commission Long-Term Labour Force Projections 2005, OECD's Committee Information Service, CEDEFOP Future Skill Needs in Europe Forecast 2008, Sal. Oppenheim estimates
Executive Summary
1
Significant growth potential ahead in core markets (D-A-CH) to become a €100m+ company in a few years
Business networking penetration in selected countries1
XING mobile visits in m
1 Source: XING analysis & LinkedIn demographics as of December 2011
2 Source: Comscore MobilLens, 3month avg. ending Dec-2010 vs. Dec 2009
3 Source: United Nations World Population Prospects 2006, United Nations Economic Commission for Europe – Statistical Division,
European Commission Long-Term Labor Force Projections 2005, OECD's Committee Information Service, CEDEFOP Future Skill Needs in Europe Forecast 2008, Sal. Oppenheim estimates
90% renewal rate
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| Visitors to your profile | Advanced Search | References |
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| Base of her Stores Prodits Retard Novmann W KNAIL Consulting Julia Instrume 10 Advertised Automotivene Deal of The Dealers considered |
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1 Source: Company estimates, RW Baird estimates (2008), Monster.com research & internal estimates
2 Source: OVK Report 2/2011
3 Source: Meeting- und Eventbarometer (GCB 2009 & 2010), Anbieterbefragung 2008 (ghh consult GmbH), PR 17.06.2008 (Verlagsgruppe Handelsblatt), Bilanz 2009: Kennzahlen der Messewirtschaft (AUMA)
Executive Summary
1
Strong Economics 4
Strong profitability with EBITDA margin of >30%
Business model with strong cash flow generation
(1) Including other operating income
(2) Adjustment for one time write-down of market entries for Spain & Turkey (€14.4m) & taxes adjusted by €0.3m accordingly
Bottom line adjusted for one time write-down of €14.4m At the same time reinforced investment mode since H2 2011
Low market penetration promises further potential for growth c
38 46 38 39 37 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 716 731 741 751 756 784 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Intl. Total 28 Gross subscriber adds D-A-CH in thousands Net subscriber adds D-A-CH in thousands Subscriber base in thousands 12 15 10 10 5 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 +6%
| 2011 | 2010 | 2011 vs. 2010 |
2011 vs. 2010 |
|
|---|---|---|---|---|
| Abs. | Abs. | Abs. | Rel. | |
| EBITDA | 22.2 | 16.7 | 5.5 | 33% |
| Interest/tax/ESOP | (9.1) | (1.4) | (7.7) | na |
| Net working capital |
0.8 | 7.1 | (6.3) | (89%) |
| Operating cash flow excl. organizer cash |
13.9 | 22.4 | (8.5) | (38%) |
| Investment – operating |
(6.5) | (5.7) | (0.8) | 15% |
| Investment – acquisitions |
(5.4) | (1.1) | (4.4) | na |
| Financing incl. transaction of own shares |
5.2 | 0.5 | 4.7 | na |
| Free cash flow excl. organizer cash |
7.2 | 16.2 | (9.0) | (56%) |
| Effects organizer cash |
2.0 | na | 2.0 | na |
| Free cash flow incl. organizer cash |
9.2 | 16.2 | (7.0) | (43%) |
Adjusted for distortions operating cash flow has increased from €15.6m in 2010 to €18.7m in 2011
| 2010 | 2011 | Comment | |
|---|---|---|---|
| Subscription | + | + | Scale of existing business |
| E-recruiting | + | + | Scale of existing business |
| Advertising w/o Company Profiles |
+ | + | Scale of existing business |
| Company Profiles | - | + | Growth to profitability |
| International | - | + | Turnaround |
| Events | n/a | - | Major investment field |
| Total EBITDA margin | 31% | 34% |
| 2011 | |
|---|---|
| [excl. Event organizer cash] |
Abs. |
| Assets | 112.4 |
| Operating assets | 25.7 |
| Acquisitions / international |
19.8 |
| TAX A/R | 0.7 |
| Cash | 66.2 |
| Liabilities | 112.4 |
| Equity | 56.7 |
| Deferred income |
22.9 |
| Liabilities (incl. 20m distribution Feb'12) |
30.0 |
| Tax liabilities | 2.8 |
| Other | 0.0 |
| (€22.9m) |
|---|
| (€30.0m) (€27.2m) |
Return of €3.76 per share to shareholders on Feb 7, 2012 [Record date was August 1, 2011]
Executive board recommends to start paying out dividends
Significant growth potential ahead in core markets (D-A-CH) to become a €100m+ company in a few years
The professional network www.xing.com
| Market Opportunity |
Social media is rapidly gaining traction as efficient recruiting tools for corporates Platforms for business professionals are unique channels to target job seekers – both active & latent ~€300m* online job advertising market in D-A-CH |
|---|---|
| Why XING? |
Millions of talented professionals - best profile database in D-A-CH Attractive service offer of XING has already attracted recruiters |
| Growth Strategy |
Increase traffic by expanding base of recruiters and further improve matching Build e-recruiting sales force in 2011, implement further partnerships and increase number of job postings |
| Market Opportunity |
Total display advertising market ~€4bn +12% market growth expected in 2012 Social networks are among the fastest growing channels for digital advertising |
|---|---|
| Why XING? |
Detailed information on customers available for targeting Unique community attracts strong brands and quality advertisers |
| Growth Strategy |
Create new ad formats Provide new targeting options Continue to concentrate advertising on basic membership |
| Total revenues | 76.2 | 86.0 | 92.0 | 98.4 | |
|---|---|---|---|---|---|
| s | EBITDA | 25.1 | 29.6 | 33.2 | 38.8 |
| u s 2) |
Margin | 33% | 34% | 36% | 39% |
| 201 n e |
Depreciation | -7.5 | -7.8 | -8.2 | -8.5 |
| March s n |
EBIT | 17.6 | 21.7 | 24.8 | 30.3 |
| o ( C |
Margin | 23% | 25% | 27% | 31% |
| Net income | 12.2 | 15.1 | 17.3 | 21.4 | |
| EPS in € | 2.26 | 2.81 | 3.23 | 4.03 | |
| Free cash flow | 0.5 | 12.6 | 19.3 | 23.8 |
DPS in €* 0.56
2012e 2013e 2014e 2015e Average trading volume per day (XETRA)
Feb 11 Mrz 11 Apr 11 Mai 11 Jun 11 Jul 11 Aug 11 Sep 11 Okt 11 Nov 11 Dez 11 Jan 12 Feb 12
| Analyst coverage | Commerzbank, Close Brothers, Deutsche Bank, DZ Bank, Hauck & Aufhäuser, HSBC, Jefferies, MM Warburg, Macquarie, Montega |
|---|---|
| Shares | 5,426,321 |
| TecDax ranking end of February 2012 |
|
|---|---|
| Market Cap. | 26 |
| Turnover | 24 |
Free float according to Deutsche Börse: 68.7%
* Will be recommended to shareholders on June 14, 2012
Director Investor Relations
XING AG Gaensemarkt 43 20354 Hamburg Germany
Tel.: +49 (0)40 419 131-793 Fax.: +49 (0)40 419 131-44 (Please use this number to submit "WpHG notifications")
Email.: [email protected]
IR Website: http://corporate.xing.com/english/investor-relations/
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