Quarterly Report • Nov 19, 2015
Quarterly Report
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For the period from January 1 to September 30, 2015
| Unit | 9M 2015 | 9M 2014 | Q3 2015 | Q3 2014 | Q2 2015 | |
|---|---|---|---|---|---|---|
| Revenues 1 | in € million | 89.9 | 73.1 | 30.5 | 26.0 | 30.2 |
| Network/Premium segment | in € million | 52.8 | 44.5 | 18.5 | 15.6 | 17.8 |
| E-Recruiting segment | in € million | 30.2 | 23.3 | 10.2 | 8.8 | 10.2 |
| Events segment 2 | in € million | 4.8 | 4.0 | 1.5 | 1.2 | 1.8 |
| EBITDA reported | in € million | 27.1 | 19.6 | 9.3 | 9.1 | 9.5 |
| EBITDA excl. kununu earn-out 3 | in € million | 27.1 | 21.4 | 9.3 | 9.9 | 9.5 |
| EBITDA margin reported | in % | 30 | 27 | 31 | 35 | 31 |
| EBITDA margin excl. kununu earn-out 3 | in % | 30 | 29 | 31 | 38 | 31 |
| Consolidated net profit/loss reported | in € million | 13.4 | 8.5 | 4.6 | 4.7 | 4.7 |
| Consolidated net profit/loss excl. kununu earn-out | ||||||
| and Events impairment loss 3 | in € million | 13.4 | 10.2 | 4.6 | 5.4 | 4.7 |
| Earnings per share (diluted) reported | in € | 2.40 | 1.51 | 0.83 | 0.83 | 0.83 |
| Earnings per share (diluted) excl. kununu earn-out | ||||||
| and Events impairment loss 3 | in € | 2.40 | 1.83 | 0.83 | 0.97 | 0.83 |
| Cash flow from operations | in € million | 26.8 | 24.5 | 8.9 | 10.5 | 3.9 |
| Cash flow from operations excl. kununu earn-out 4 | in € million | 30.7 | 24.5 | 8.9 | 10.5 | 7.9 |
| Equity | in € million | 56.3 | 45.7 | 56.3 | 45.7 | 51.7 |
| Liquid funds | in € million | 74.2 | 57.8 | 74.2 | 57.8 | 68.1 |
| XING users Germany, Austria, Switzerland (D-A-CH), total | in million | 9.7 | 7.9 | 9.7 | 7.9 | 9.2 |
| thereof platform members (D-A-CH) | in million | 9.2 | 7.7 | 9.2 | 7.7 | 8.8 |
| thereof subscribers (D-A-CH) | in thsd. | 869 | 833 | 869 | 833 | 861 |
| B2B customers (D-A-CH) | ||||||
| in the E-Recruiting segment | in thsd. | 17.6 | 16.6 | 17.6 | 16.6 | 17.4 |
| in the Events segment | in thsd. | 2.0 | 2.4 | 2.0 | 2.4 | 2.1 |
| Employees | 741 | 638 | 741 | 638 | 727 |
1 Total revenues including other operating income and less €0.2 million in intercompany revenues in each of Q1, Q2 and Q3 2015.
2 Including €0.2 million in intercompany revenues in each of Q1, Q2 and Q3 2015.
3 Due to changes in the IFRS guidance on accounting for purchase price obligations from earn-out arrangements arising from the acquisition of companies, since 2013 these have been recognized as personnel expenses instead of as a component of the purchase price. At XING, this change affects the earn-out obligation for the kununu transaction. Approx. €0.5 million each was recorded under personnel expenses in Q1, Q2 and Q3 2014. These personnel expenses are non-operating expenses. In accordance with the contractually agreed earn-out period, they only reduce earnings for the 2013 and 2014 financial years and the cash flows from operating activities in the quarter in which the earn-out is paid out (Q2 2015). In its reports, XING AG also reports the key performance indicators eliminated by this effect to enable an appropriate interpretation of the development of operations based on EBITDA, net profit/loss for the period, and other earnings figures. 4 Due to changes in the IFRS guidance on accounting for purchase price obligations from earn-out arrangements arising from the acquisition of companies, earn-out payments must be recognized under cash flows from operating activities. At XING, this change affects the earn-out obligation for the kununu transaction. The effect is €–3.9 million. The change in liabilities in the reporting period excluding the non-operating kununu effect, amounted to €4.8 million. The cash flows from operating activities for the reporting period, excluding the non-operating kununu effect, amounted to €30.7 million.
03 Letter to our shareholders
06 XING shares
17 Consolidated statement of comprehensive income
19 Consolidated statement of changes in equity
24 Notes to the interim consolidated financial statements
29 Financial calendar, Publishing information and contact
XING is the social network for business professionals. Across all of its platforms, XING has 9.7 million users in its core markets of Germany, Austria and Switzerland. A total of 9.2 million of these users are members of the XING platform. XING is a platform where professionals from all kinds of different industries can meet up, find jobs, colleagues, new assignments, cooperation partners, experts, generate business ideas and find information about the latest trends in their industry. Members can meet and exchange views in around 74,000 specialist groups, while also getting together at XING networking events. The platform is operated by XING AG. The Company was established in 2003 in Hamburg, has been listed since 2006 and has been a TecDAX member since September 2011.
With the acquisition of kununu, the leading employer review platform in the German-speaking market, XING has further strengthened its position as the market leader in social recruiting.
XING also acquired Intelligence Competence Center AG in early 2015, adding the Jobbörse.com website – the biggest job search engine in the German-speaking market with over 2.5 million jobs – to the Company's portfolio.
Please visit www.xing.com for further details.
03 Letter to our shareholders
06 XING shares
Dr. Thomas Vollmoeller, Chief Executive Officer of XING AG
The third quarter was a successful one for XING. We managed to lift our revenues by 17 percent year-on-year. All three segments contributed to this with growth rates of between 16 and 24 percent.
Membership growth also developed encouragingly: After welcoming a total of 282,000 new XING members in the prior-year period, we acquired 401,000 new members in the 2015 reporting period, a gratifying increase of 42 percent over the previous year.
In addition, we made important investments in new products and services in the third quarter. One of these is a new product called XING Klartext, which we recently rolled out for our members. Klartext is a journalistic format in which experts and well-known personalities are selected to take a position and put their opinions on current and controversial topics concerning business and professions up for debate.
Kicking off the program, Dr. Frank Appel, CEO of the Deutsche Post DHL Group, warned against panicking in view of the latest developments in the Chinese economy. Dr. Marcus Schenck, CFO of Deutsche Bank, explained why digitization and its consequences were a "loud wake-up call" for the finance industry. And Elke Hannack, Deputy Chairwoman of the German Confederation of Trade Unions (DGB), criticized German companies for still not always paying the same wage for the same work.
The views held by the prominent representatives of industry and commerce are accompanied in each case by conflicting or different opinions. What makes Klartext so special is that 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, former editor-in-chief at the German weekly business news magazine WirtschaftsWoche, and editor-in-chief Jennifer Lachman, formerly of Financial Times Deutschland.
This new offering is aimed at further increasing relevance for the daily use of XING. Incidentally, non-members can also read the articles, but only people who are logged in can actively participate in the debate.
Our second major product innovation is the XING Jobs platform, which now registers over one million vacancies. Whereas other job sites are geared toward the interests of corporate clients, we focus squarely on the needs of our users, no matter how special these may be. At XING, users can find not only traditional career opportunities, but also family-friendly positions and jobs for people who are looking for meaning in their lives. No other company provides this. By offering one million jobs on a unique portal, we now supply our users with vacancies matching their needs – they no longer need to look anywhere else. We had supported the launch of this offering with a large-scale marketing campaign that included television commercials reaching large audiences.
We have also developed new offerings for our B2B customers, one of these being the XING Job Manager. The Job Manager gives customers a comprehensive overview of all published, designed, archived, and deactivated job advertisements. For the first time, clients can also see in detail how successful advertisements on XING are. Besides statistics on effectiveness, such as the number of clicks, HR managers additionally receive aggregated demographic data on the XING members who called up the advertisement.
All of these measures contributed to the encouraging growth that we again recorded in this quarter. For example, our core business with paid membership accounts witnessed further strong growth in the reporting period, expanding by 18 percent year-on-year to €18.5 million. Overall, we have acquired more than 36,000 new subscribers over the past twelve months, 8,359 of whom in the third quarter. This represents an increase of 115 percent compared with the third quarter of 2014 (Q3 2014: 3,880). As of the end of September, 869,000 XING members were thus using the advanced offerings (Premium and ProJobs) on the XING platform.
The E-Recruiting segment recorded growth of 16 percent in the third quarter, with revenue increasing to €10.2 million. On the whole, growth decreased compared with the previous year, due primarily to a special factor in the Employer Branding subsegment. We started no longer extending the old XING company profiles, which means that these profiles will expire in financial year 2015. This is leading to a temporary short-term slowdown in growth in the E-Recruiting segment in the third and fourth quarters of 2015 in particular.
The realignment of our Events business is also bearing fruit. Compared with the previous year, we lifted segment revenues by 24 percent to €1.5 million (Q3 2014: €1.2 million).
As you can see, XING is continuing to grow apace. We are firmly committed to continuing to write the XING success story. In the third quarter, we laid important foundations for this and made extensive investments in new products and services.
Thank you for placing your trust in us!
Kind regards,
Dr. Thomas Vollmoeller Chief Executive Officer of XING AG
| Number of shares as of September 30, 2015 | 5,620,435 |
|---|---|
| Share capital in € | 5,620,435 |
| Share type | Registered shares |
| IPO | 07.12.2006 |
| ISIN | DE000XNG8888 |
| Bloomberg | O1BC |
| Reuters | OBCGn.DE |
| Transparency level | Prime Standard |
| Index | TecDAX |
| Sector | Software |
| 9M 2015 | 9M 2014 | |
|---|---|---|
| XETRA closing price at the end of the period | 192.00 € | 84.29€ |
| High | 192.60 € | 105.85€ |
| Low | 92.19 € | 75.78€ |
| Market capitalization at the end of the period | €1,079 million | €471 million |
| Average trading volume per day (XETRA), number of shares |
15,330 | 7,125 |
| TecDAX ranking | ||
| based on trading volume | 23 | 28 |
| based on free-float market capitalization | 24 | 30 |
| Earnings per share (diluted) | ||
| excl. kununu earn-out | 2.40 € | 1.83 € |
| 1 — Burda Digital GmbH | 50.26% |
|---|---|
| 2 — Deutsche Asset & Wealth | |
| Management | 4.95% |
| 3 — Union Investment | 4.98% |
| 4 — Oppenheimer | 5.04% |
| 5 — Others | 34.77% |
| Broker | Analyst | Recommen dation |
Price target |
|---|---|---|---|
| Berenberg Bank | Sarah Simon | Hold | €18 |
| Commerzbank | Heike Pauls | Buy | €200 |
| Oddo Seydler | Marcus Silbe | Buy | €200 |
| Deutsche Bank | Benjamin Kohnke | Buy | €145 |
| Goldman Sachs | Carl Hazeley | Hold | €182 |
| Hauck & Aufhäuser | Lars Dannenberg | Hold | €180 |
| Jefferies | James Lockyer | Buy | €170 |
| Montega AG | Alexander Braun | Hold | €150 |
| Warburg Research | Jochen Reichert | Hold | €170 |
for the period from January 1 to September 30, 2015
Nine months into the current financial year, XING is still on a growth trajectory. Consolidated net profit and consolidated revenues (incl. other operating income) have been given a considerable boost. In the first three quarters of 2015, we lifted our revenues by 23 percent to €89.9 million compared with the prior-year period (9M 2014: €73.1 million). It should be noted that the figure posted for other operating income in the first quarter of 2015 is about €1 million above its typical level as a result of positive currency effects. Without this inflationary effect, revenue growth is about 22 percent. Consolidated net profit climbed by 31 percent in the same period to €13.4 million (9M 2014 excl. kununu earn-out obligations: €10.2 million).
All three segments contributed to this encouraging development with growth rates of between 19 and 29 percent. What is more, overall cost increases were lower than revenue growth. Personnel expenses, our largest cost item, were up 17 percent over the year-earlier period to €34.2 million (9M 2014: €29.3 million excl. kununu earn-out obligations).
With regard to our marketing expenses, we expanded the range of our investments compared with the prior-year period, notably conducting two TV campaigns in the first nine months. We invested a total of €8.7 million (+30 percent) in building up the brand and our positioning and attracting new members (9M 2014: €6.6 million).
Other operating expenses rose by 27 percent to €20.0 million in the first nine months of the current financial year (9M 2014: €15.8 million). This rise is essentially due to additional external advisory services in connection with the development of XING's long-term strategy and the increased use of freelancers.
Consolidated revenues (incl. other operating income) (in € million)
Consequently, the Group's operating result (EBITDA) in the first nine months of 2015 rose by 27 percent to €27.1 million (9M 2014: €21.4 million excluding the non-operating kununu earn-out obligation). As a result, the margin in the first nine months was 30 percent, compared with 29 percent in the same period in 2014.
1 Due to changes in the IFRS guidance on accounting for purchase price obligations from earn-out arrangements arising from the acquisition of companies, since 2013 these have been recognized as personnel expenses instead of as a component of the purchase price. At XING, this change affects the earn-out obligation for the kununu transaction. Approx. €0.5 million each was recorded under personnel expenses in Q1, Q2 and Q3 2014. These personnel expenses are non-operating expenses and do not affect the free cash flow. Accordingly, they only reduce earnings for the 2013 and 2014 financial years corresponding to the contractually agreed earn-out period. In its reports, XING AG also reports the key performance indicators eliminated by this effect to enable an appropriate interpretation of the development of operations based on EBITDA, net profit/loss for the period, and other earnings figures.
Depreciation, amortization and impairment losses in the first nine months of 2015 amounted to €6.8 million, up 7 percent from the prior-year period (9M 2014: €6.4 million), and include write-downs of around €0.4 million for the assets of the acquired company Intelligence Competence Center (Deutschland) AG identified in the purchase price allocation.
As a result, EBIT for the period under review was €20.2 million, contrasted with EBIT (excluding non-operating expenses for the kununu earn-out) of €15.0 million for the same period of 2014 (+35 percent).
After deducting taxes of €6.7 million, consolidated net profit for the reporting period was €13.4 million and thus 31 percent higher yearon-year than in the first nine months of 2014, excluding non-operating expenses for the kununu earn-out (9M 2014: €10.2 million).
1 Due to changes in the IFRS guidance on accounting for purchase price obligations from earn-out arrangements arising from the acquisition of companies, since 2013 these have been recognized as personnel expenses instead of as a component of the purchase price. At XING, this change affects the earn-out obligation for the kununu transaction. Approx. €0.5 million each was recorded under personnel expenses in Q1, Q2 and Q3 2014. These personnel expenses are non-operating expenses and do not affect the free cash flow. Accordingly, they only reduce earnings for the 2013 and 2014 financial years corresponding to the contractually agreed earn-out period. In its reports, XING AG also reports the key performance indicators eliminated by this effect to enable an appropriate interpretation of the development of operations based on EBITDA, net profit/loss for the period, and other earnings figures.
Earnings per share in the reporting period therefore were €2.40, compared with earnings per share (excluding non-operating expenses for the kununu earn-out) of €1.83 for the first nine months of 2014 (+31 percent).
On a quarterly basis, the key financial metrics developed in line with expectations. For example, revenue incl. other operating income increased by 17 percent in the third quarter to €30.5 million (Q3 2014: €26.0 million). After deducting costs for staff (€11.4 million), marketing (€3.0 million), and other operating expenses (€6.8 million) in the third quarter of 2015, EBITDA amounted to €9.3 million. This is marginally lower than the prior-year figure of €9.9 million excluding the nonoperating expenses for the kununu earn-out. It should be noted that EBITDA and consolidated net profit in the third quarter of 2014 had been higher than average as a result of cost shifts and very low capital expenditure on marketing. This is contrasted in Q3 2015 by above average marketing expenses for the launch of XING Jobs and XING Klartext. Compared with the extraordinarily strong prior-year period (Q3 2014: €5.4 million), the net profit for the third quarter of 2015 was therefore down 14 percent at €4.6 million.
Our core business with paid membership accounts went from strength to strength in the reporting period. Segment revenues climbed 19 percent to €52.8 million (9M 2014: €44.5 million), expanding by 18 percent in the third quarter to €18.5 million.
The systematic realignment of XING AG's core business began with the revamping of the Premium offering at the beginning of 2013. In tandem with improving the quality of the Premium offering, we also established new pricing models in the market from mid-2013 and, for the first time since the formation of XING AG, between Q1 and Q3 2014 we began to migrate existing customers to the new prices once their regular contract periods had expired. Over and above this, we introduced an additional fee-based ProJobs membership account at the end of 2014/beginning of 2015. These measures are bearing fruit and are having a positive effect on the development of revenue in our core business.
In the first nine months of the current financial year, we acquired more than 34,000 new subscribers, 8,358 of whom in the third quarter of 2015. This represents an increase of more than 30 percent compared with the prior-year period (9M 2014: 25,800). Consequently, a total of 869,000 XING members were using the platform's advanced offerings (Premium and ProJobs) at the end of September (September 2014: 833,000).
At the same time, average revenue per user (ARPU) also rose from €5.4 (9M 2014) to €6.2 in the reporting period. ARPU in the third quarter of 2015 stood at €6.4 (Q3 2014: €5.6).
This enabled us to increase segment EBITDA to €33.0 million in the reporting period (9M 2014: €31.6 million).
869 833 +36
September 2014
Growth in memberships picked up speed in the first nine months of the current financial year. After welcoming a total of 739,000 new XING members in the prior-year period, we acquired around 1.2 million new members in the 2015 reporting period, a gratifying increase of 59 percent over the previous year. Correspondingly, the platform memberships base rose to 9.2 million at the end of September 2015 (September 2014: 7.7 million).
September 2015
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 0.5 million new users to the XING Group since January 2014. Together with the 9.2 million platform members, this gives a XING user base of 9.7 million at the end of September 2015.
In the E-Recruiting segment, we continued to experience unchecked growth in the first nine months of the current financial year, lifting segment revenues by 29 percent to €30.2 million (9M 2014: €23.3 million). Segment EBITDA rose by 16 percent to €14.9 million (9M 2014 excluding the non-operating kununu earn-out obligations: €12.9 million).
In the third quarter, the pace of growth in the E-Recruiting segment slowed to 16 percent, with revenue amounting to €10.2 million. It should be noted that due essentially to the effect of deactivating old XING company profiles and the above-average growth (base effect) in the second half of 2014 the Employer Branding subsegment does not record year-on-year growth in the second half of 2015. These effects should no longer impact on the revenue development of this subsegment at the beginning of next year. At €5.1 million, segment EBITDA in the third quarter is at approximately the same level as in the prior-year period.
The number of Corporate Customers (B2B customers) climbed from around 16,569 to 17,551 at the end of September 2015.
The detailed breakdown shows that the Active Recruiting subsegment with its XING Talent Manager product is witnessing the fastest growth. Here, the number of licenses sold to HR departments and recruitment companies increased from 3,644 to just under 5,000 as of the end of September 2015. From the beginning of April 2015, we also raised prices for new customers from €249.00 to €329.00 per license. Management believes that proactively searching for and approaching suitable candidates is one of the main pillars of a successful HR strategy and will become increasingly important.
Just as important in our opinion is focused marketing of the employer brand in the places where potential candidates find out about future employers. This was the reason why we acquired the kununu platform in 2011 and successfully merged it with the XING platform. Employers can specifically showcase themselves to potential customers using employer branding profiles on XING and kununu.
At the beginning of the second half of the year, we also concentrated our efforts on realigning the Passive Recruiting subsegment. In January, we acquired Germany's largest job crawler, jobbörse.com, with over 2.5 million job advertisements. Within the space of a few months, we had integrated the technology as well as the relevant job advertisements for the XING target group into the new XING Jobs platform and presented it to a wide audience with an extensive marketing campaign including TV commercials and a strong presence at the leading "Zukunft Personal" human resources trade fair in Cologne.
Whereas other job sites are geared towards the interests of employers, we focus squarely on the needs of employees, no matter how special these may be. At XING, users can find not only traditional career opportunities, but also family-friendly positions and jobs for people who are looking for meaning in their lives. This is facilitated by directly integrating information submitted on our employer rating portal kununu.
The fact that we do things differently – above all, standing on the side of employees – also bears out our claim "For a better working life." This includes our efforts to match users with the right job for their lifestyle. A prerequisite for being able to draw on unlimited resources is that with XING Jobs we want to offer every job that could fit the profile of one of our users. Since the successful integration of our XING Jobs platform at the end of September, our offering has run to one million potential jobs in German-speaking regions.
This means that, essentially, users no longer need to look anywhere else for exciting jobs because we have all the jobs for which they could be eligible – mostly in the form of advertisements from companies' careers websites.
And thanks to the diverse search and filter options, users can find the job that suits them best from the one million vacancies published. In addition to the obligatory search by industry, position or region, XING Jobs offers another unique selling point – the opportunity to filter for jobs that offer family-friendly working conditions, jobs in the environmental or social sector or even jobs in dog-friendly environments.
Frank Hassler (Senior Vice President E-Recruiting) presents the XING Jobs Marketplace at the "Zukunft Personal" human resources trade fair.
The realignment of our Events business initiated at the beginning of the current financial year is bearing fruit. Our revenue rose by 20 percent in the reporting period to €4.8 million (9M 2014: €4.0 million). On a quarterly basis, we lifted segment revenues by as much as 24 percent to €1.5 million (Q3 2014: €1.2 million).
As part of the strategic realignment, in recent quarters we also used the Events business to a much greater extent and in a more focused manner to acquire new platform members and thus generate corresponding intercompany revenue at segment level. In addition, we created more opportunities for our event organizers to extend their reach and market their event to the appropriate target group. The steps we took gained traction in previous quarters and have since made a significant contribution to the development of revenue and earnings.
Furthermore, we are continuing to work on optimizing our costs at segment level so that in the coming years we can achieve a sustainably positive EBITDA margin in this area as well. EBITDA in the first nine months of the current financial year amounted to €–40 thousand (9M 2014: €–1.5 million). This is indicative of a positive trend. In the third quarter of 2015, segment EBITDA amounted to €–0.2 million compared with €–0.4 million in the prior-year quarter.
On the product side, we rounded out our portfolio for trade fair organizers with XING EVENTS and provide full-service solutions for the complex requirements of exhibitions. Using intelligent marketing options in the XING business network and software solutions for visitor, ticket, and customer relationship management, we are focusing squarely on the key aspects of a trade fair: the exhibitors and visitors.
This entails the following products:
As of the end of September, 1,987 organizers were using the event services (September 2014: 2,397).
The realignment of the Events segment is thus in full swing to enable us to achieve the targets set.
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.
Each individual employee is required to avert potential loss from the company. Their task is to immediately remove all risks in their own area of responsibility and to immediately notify the corresponding contacts 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.
No further going concern risks were identified in addition to the risks presented in the 2014 Annual Report.
for the period from January 1 to September 30, 2015
for the period from January 1 to September 30, 2015
| 01/01/2015 — | 01/01/2014 — | 07/01/2015 — | 07/01/2014 — | |
|---|---|---|---|---|
| in € thousand | 09/30/2015 | 09/30/2014 | 09/30/2015 | 09/30/2014 |
| Service revenues | 87,291 | 71,875 | 30,001 | 25,604 |
| Other operating income | 2,642 | 1,240 | 454 | 372 |
| Total operating inc ome |
89,933 | 73,115 | 30,455 | 25,976 |
| Personnel expenses | –34,179 | –31,018 | –11,402 | –10,434 |
| Marketing expenses | –8,659 | –6,649 | –2,979 | –1,270 |
| Other operating expenses | –20,028 | –15,807 | –6,753 | –5,171 |
| EBITDA | 27,067 | 19,641 | 9,321 | 9,101 |
| Depreciation, amortization and impairment losses | –6,817 | –6,365 | –2,390 | –1,944 |
| EBIT | 20,250 | 13,276 | 6,931 | 7,157 |
| Finance income | 23 | 62 | 12 | 20 |
| Finance costs | –123 | –45 | –80 | –14 |
| EBT | 20,150 | 13,293 | 6,863 | 7,163 |
| Taxes on income | –6,725 | –4,827 | –2,223 | –2,511 |
| Consolidated net profit /loss |
13,425 | 8,466 | 4,640 | 4,652 |
| Earnings per share (basic) | 2.40 € | 1.51 € | 0.83 € | 0.83€ |
| Earnings per share (diluted) | 2.40€ | 1.51 € | 0.83 € | 0.83€ |
| Consolidated net profit /loss |
13,425 | 8,466 | 4,640 | 4,652 |
| Currency translation differences | –8 | 0 | 0 | 0 |
| Other comprehensive income | –8 | 0 | 0 | 0 |
| Consolidated total compre hensi ve inc ome |
13,417 | 8,466 | 4,640 | 4,652 |
for the period from January 1 to September 30, 2015
| in € thousand | 01/01/2015 — 09/30/2015 |
01/01/2014 — 09/30/2014 |
07/01/2015 — 09/30/2015 |
07/01/2014 — 09/30/2014 |
|---|---|---|---|---|
| Total operating income | 89,933 | 73,115 | 30,455 | 25,976 |
| EBITDA excl. kununu earn-out | 27,067 | 21,383 | 9,321 | 9,855 |
| EBIT excl. kununu earn-out | 20,250 | 15,018 | 6,931 | 7,911 |
| Consolidated net profit/loss excl. kununu earn-out | 13,425 | 10,208 | 4,640 | 5,405 |
| Earnings per share (basic) excl. kununu earn-out | 2.40 | 1.83 | 0.83 | 0.97 |
| Earnings per share (diluted) excl. kununu earn-out | 2.40 | 1.83 | 0.83 | 0.97 |
| Consolidated net profit/loss excl. kununu earn-out | 13,425 | 10,208 | 4,640 | 5,405 |
| Currency translation differences | –8 | 0 | 0 | 0 |
| Other comprehensive income | –8 | 0 | 0 | 0 |
| Consolidated total comprehensive income excl. kununu earn-out | 13,417 | 10,208 | 4,640 | 5,405 |
for the period from January 1 to September 30, 2015
| in € thousand | 01/01/2015 — 09/30/2015 |
01/01/2014 — 09/30/2014 |
07/01/2015 — 09/30/2015 |
07/01/2014 — 09/30/2014 |
|---|---|---|---|---|
| Consolidated net profit/loss excl. kununu earn-out | 13,425 | 10,208 | 4,640 | 5,405 |
| Consolidated net profit/loss before taxes excl. kununu earn-out | 20,150 | 15,035 | 6,863 | 7,917 |
| Cash flows from operating activities | 30,718 | 24,458 | 8,827 | 10,467 |
| Cash flows from investing activities | –19,882 | –9,388 | –4,792 | –3,558 |
for the period from January 1 to September 30, 2015
| in € thousand | Subscribed capital |
Capital reserves |
Treasury shares |
Other reserves |
Net retained profits |
Total equity |
|---|---|---|---|---|---|---|
| As of 01/01/2014 | 5,592 | 18,477 | –455 | 16,368 | 20,600 | 60,582 |
| Currency translation | 0 | 0 | 0 | 0 | 0 | 0 |
| Total income and expenses for the period recognized directly in equity |
0 | 0 | 0 | 0 | 0 | 0 |
| Net profit/loss for the year | 0 | 0 | 0 | 0 | 8,466 | 8,466 |
| Consolidated total comprehensive income | 0 | 0 | 0 | 0 | 8,466 | 8,466 |
| Sale of treasury shares | 0 | 0 | 23 | 0 | 0 | 23 |
| Dividend for 2013 | 0 | 0 | 0 | 0 | –23,433 | –23,433 |
| Personnel expenses, stock option program | 0 | 0 | 0 | 45 | 0 | 45 |
| As of 09/30/2014 | 5,592 | 18,477 | –432 | 16,413 | 5,633 | 45,683 |
| As of 01/01/2015 | 5,592 | 18,479 | –434 | 2,429 | 17,341 | 43,407 |
|---|---|---|---|---|---|---|
| Currency translation and other income and expenses | ||||||
| for the period recognized directly in equity | 0 | 0 | 0 | –8 | 0 | –8 |
| Net profit/loss for the year | 0 | 0 | 0 | 0 | 13,424 | 13,424 |
| Total comprehensive income for the period | 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 September 30, 2015
| in € thousand | 09/30/2015 | 12/31/2014 |
|---|---|---|
| Non-current assets |
||
| Intangible assets | ||
| Purchased software | 3,673 | 3,645 |
| Internally developed software | 17,944 | 12,631 |
| Goodwill | 8,478 | 2,169 |
| Other intangible assets | 2,296 | 2,168 |
| Property, plant and equipment | ||
| Leasehold improvements | 386 | 442 |
| Other equipment, operating and office equipment | 4,378 | 4,687 |
| Financial assets | ||
| Equity investments | 51 | 51 |
| Other financial assets | 31 | 25 |
| Deferred tax assets | 553 | 483 |
| 37,790 | 26,301 | |
| Current assets |
||
| Receivables and other assets | ||
| Receivables from services | 12,811 | 12,013 |
| Other assets | 3,252 | 2,622 |
| Cash and cash equivalents and short-term deposits | ||
| Cash | 74,157 | 63,951 |
| Third-party cash | 6,150 | 3,248 |
| 96,370 | 81,834 | |
| 134,160 | 108,135 |
| in € thousand | 09/30/2015 | 12/31/2014 |
|---|---|---|
| Equit y |
||
| Subscribed capital | 5,620 | 5,592 |
| Treasury shares | 0 | –434 |
| Capital reserves | 22,622 | 18,479 |
| Other reserves | 2,436 | 2,429 |
| Net retained profits | 25,620 | 17,341 |
| 56,298 | 43,407 | |
| Non-current liabilities |
||
| Deferred tax liabilities | 6,559 | 4,503 |
| Deferred income | 2,173 | 2,314 |
| Other provisions | 270 | 249 |
| Other financial liabilities | 1,554 | 0 |
| Other liabilities | 290 | 251 |
| 10,846 | 7,317 | |
| Current liabilities |
||
| Trade accounts payable | 1,153 | 2,489 |
| Deferred income | 43,333 | 35,780 |
| Other provisions | 602 | 489 |
| Other financial liabilities | 435 | 3,896 |
| Tax liabilities | 1,860 | 1,089 |
| Other liabilities | 19,633 | 13,668 |
| 67,016 | 57,411 | |
| 134,160 | 108,135 |
for the period from January 1 to September 30, 2015
| in € thousand | 01/01/2015 — 09/30/2015 |
01/01/2014 — 09/30/2014 |
|---|---|---|
| EBT (earnings before taxes) | 20,150 | 13,293 |
| Amortization and write-downs of capitalized development costs | 2,274 | 1,761 |
| Depreciation, amortization and impairment losses | 4,543 | 4,604 |
| Personnel expenses, stock option program | 15 | 45 |
| Interest income | –23 | –62 |
| Interest received | 25 | 77 |
| Interest expense | 123 | 45 |
| Taxes paid | –4,292 | –2,886 |
| Change in receivables and other assets | –1,436 | –1,805 |
| Change in liabilities and other equity and liabilities | 885 | 6,474 |
| Non-cash changes from changes in basis of consolidation | –15 | 0 |
| Change in deferred income | 7,412 | 6,000 |
| Elimination of amiando third-party obligation | –2,902 | –3,088 |
| Cash flows from operating acti vities |
26,759 | 24,458 |
| Payment for capitalization of internally generated software | –7,587 | –5,665 |
| Payment for purchase of software | –457 | –1,722 |
| Payments for purchase of other intangible assets | –407 | –179 |
| Payments for purchase of property, plant and equipment | –1,646 | –869 |
| Payment for acquisition of consolidated companies (less cash acquired) | –5,820 | –947 |
| Payments for investments in other financial assets | –6 | –6 |
| Cash flows from investing acti vities |
–15,923 | –9,388 |
| in € thousand | 01/01/2015 — 09/30/2015 |
01/01/2014 — 09/30/2014 |
|---|---|---|
| Proceeds from the exercise of options | 2,942 | 0 |
| Proceeds from the sale of treasury shares | 1,635 | 23 |
| Dividend payment | –5,145 | –23,433 |
| Interest paid | –54 | 0 |
| Cash flows from financing acti vities |
–622 | –23,410 |
| Currency translation differences | –8 | 0 |
| Net change in cash funds | 10,206 | –8,340 |
| Cash funds at the beginning of the period | 63,951 | 66,160 |
| Cash funds at the end of the peri od 1 |
74,157 | 57,820 |
| Third-party cash funds at the beginning of period | 3,248 | 2,820 |
| Change in third-party cash and cash equivalents | 2,902 | 3,088 |
| Third -part y cas h funds at the end of the peri od |
6,150 | 5,908 |
1 Cash and cash equivalents consist of liquid funds.
for the period from January 1 to September 30, 2015
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.
Measured in terms of the total number of individual visitors worldwide, XING operates one of the leading professional networking websites. The international, multilingual, Internet-based platform is a "relationship engine" which provides its members with the opportunity of establishing new business contacts, maintaining existing contacts, extending their operations to new markets, and exchanging opinion and information. XING generates its revenues primarily from fee-based products and services 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, 2015, 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, 2014.
The period under review began on January 1, 2015, and ended on September 30, 2015. The corresponding prior-year period began on January 1, 2014, and ended on September 30, 2014. The interim consolidated financial statements and the interim group management report of XING AG as of September 30, 2015, were approved for publication on November 5, 2015, 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, 2014. These interim financial statements have not been audited by the auditor, nor have they been subjected to a review.
Several amended IFRSs became effective for 2015. However, the application of these IFRSs did not have any effects on the annual consolidated financial statements or the condensed interim consolidated financial statements.
On January 22, 2015, XING AG acquired all shares in Intelligence Competence Center (Deutschland) AG, Aschaffenburg ("ICC"). Business assets owned by ICC include the website www.jobbörse.com, the biggest job portal in the German-speaking market with a portfolio of over 2.5 million job ads. XING also acquired the Jobbörse.com search technology, which now indexes some 15 million domains, including over 1.3 million corporate websites. To acquire its 100 percent stake, XING AG paid around €6.3 million to ICC shareholders. Other purchase price payments in the amount of €2.4 million could be lower if certain assured targets are not met. The Austrian company was consolidated for the first time on the date on which ownership of the interests was transferred.
Transaction costs amounting to €175 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 cash outflow as a result of the business acquisition is shown below:
Purchase price allocation was initially performed on a provisional basis in the interim consolidated financial statements as of March 31, 2015. This estimate has not changed as of September 30, 2015. The fair values of the assets and liabilities identified in connection with the purchase price allocation as well as the goodwill were as follows at the date of initial consolidation:
| in € thousand | 2015 |
|---|---|
| Purchase price payments, January 1 – September 30, 2015 | 5,820 |
| plus costs directly attributable to the acquisition | 175 |
| less third-party cash acquired with the subsidiary |
59 |
| Cash outflow, January 1 – September 30, 2015 (net) | 6,054 |
| plus unpaid portion of the purchase price (discounted) | 1,898 |
| Total cas h outflow (net ) |
7,952 |
The assets and liabilities of ICC at the acquisition date before purchase price allocation were as follows:
| in € thousand | 01/22/2015 |
|---|---|
| Assets | |
| Intangible assets | 13 |
| Property, plant and equipment | 122 |
| Trade accounts receivable | 83 |
| Other assets | 18 |
| Cash and cash equivalents | 59 |
| 295 | |
| Liabilities | |
| Trade accounts payable | 53 |
| Other liabilities and provisions | 63 |
| 116 | |
| Total identifiable net assets at fair value | |
| before purchase price allocation | 179 |
| in € thousand | 01/22/2015 |
|---|---|
| Purchase price | 7,836 |
| Equity of ICC (before purchase price allocation) | 179 |
| Value of purc hase price all ocati on |
7,657 |
| Value of internally generated software | 1,006 |
| Value of customer relations | 335 |
| Value of brand/domain | 326 |
| Deferred tax assets | 219 |
| Deferred tax liabilities | –538 |
| Goodwill | 6,309 |
Since its acquisition by XING, ICC has contributed €511 thousand to revenues and €139 thousand to EBITDA. If the merger of the two companies had taken place at the start of the year, these figures would be €572 thousand and €147 thousand, respectively.
The goodwill recognized results primarily from synergies arising from the integration of the search technology and job advertisements into the XING platform. Recognized goodwill is not tax-deductible.
In the reporting period, 12,067 treasury shares of XING AG and 28,298 shares issued out of Contingent Capital 2010 were issued to eligible parties to service claims under stock option plans 2008 and 2010. As of September 30, 2015, XING AG had share capital of €5,620,435 (December 31, 2014: €5,592,137) and the Company no longer held any treasury shares (December 31, 2014: 12,067).
Pursuant to the resolution of the Annual General Meeting held on June 3, 2015, XING AG paid out a dividend of €0.92 per share for the financial year (2014: €0.62 per share plus a special dividend of €3.58 per share). With 5,592,137 shares carrying dividend rights, this corresponds to a total payout of €5,145 thousand.
The sale of the treasury shares resulted in a transfer of €1,201 thousand to the capital reserves. In connection with the issue of the newly created shares, an amount of €2,942 thousand was transferred to the capital reserves.
Other operating income includes income of €1,246 thousand (previous year: €267 thousand) from currency translation.
The following summary breaks down the primary items of other operating expenses:
| in € thousand | 01/01/2015 – 09/30/2015 |
01/01/2014 – 09/30/2014 |
|---|---|---|
| IT services, management services | 6,237 | 4,305 |
| Occupancy expenses | 3,148 | 2,883 |
| Server hosting, administration and traffic | 1,684 | 1,711 |
| Payment transaction costs | 1,574 | 1,510 |
| Travel, entertainment and other business expenses |
1,458 | 1,261 |
| Other personnel expenses | 1,003 | 815 |
| Bad debts | 990 | 414 |
| Legal consulting fees | 587 | 358 |
| Training costs | 473 | 452 |
| Exchange rate losses | 466 | 161 |
| Phone/cell phone/postage/courier costs | 374 | 313 |
| Accounting fees | 342 | 369 |
| Financial statements preparation and auditing costs |
260 | 228 |
| Supervisory Board remuneration | 215 | 214 |
| Expenses attributable to prior periods | 128 | 240 |
| Other | 1,089 | 573 |
| total | 20,028 | 15,807 |
The other expenses mainly comprise costs of contributions, other charges, office supplies and insurance costs.
Depreciation, amortization and impairment losses include impairment losses of €281 thousand (previous year: €414 thousand) recognized on platform modules that are no longer used.
The reporting format to the Executive Board and the Supervisory Board is divided into the following business lines: Network (basic functions of the XING platform); Premium (subscription memberships and enterprise groups); E-Recruiting (job advertisements, company profiles, and the XING Talent Manager); and Events (event organization and ticketing).The breakdown into these divisions and regions is in line with the internal organizational structure and the reporting to the Executive Board and Supervisory Board. For the sake of clarity, the Network and Premium business lines have been consciously combined into one segment jointly covering the basic business of XING AG (generating revenue from the marketing of the platform through subscription memberships). The reconciliation statement 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. Intersegment revenues were generated for the first time in 2015. 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, division-related IT expenses (development costs, etc.). Expenses that are not directly attributable to a segment (e.g., central IT expenses), depreciation/amortization, write-downs, 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. Extraordinary items eliminated include restructuring expenses, gains/ losses on disposal, impairment losses, as well as other non-operating expenses and income.
The segment revenues and results for the period under review are shown in the following tables:
| Consolidation of intersegment |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in € thousand | Network/Premium | E-Recruiting | Events | revenues/expenses | Total segments | |||||
| 01/01/2015 – | 01/01/2014 – | 01/01/2015 – | 01/01/2014 – | 01/01/2015 – | 01/01/2014 – | 01/01/2015 – | 01/01/2014 – | 01/01/2015 – | 01/01/2014 – | |
| 09/30/2015 | 09/30/2014 | 09/30/2015 | 09/30/2014 | 09/30/2015 | 09/30/2014 | 09/30/2015 | 09/30/2014 | 09/30/2015 | 09/30/2014 | |
| Revenues | 52,803 | 44,542 | 30,154 | 23,310 | 4,334 | 4,023 | — | — | 87,291 | 71,875 |
| (from third parties) | ||||||||||
| Intragroup | ||||||||||
| revenues | 0 | 0 | 0 | 0 | 476 | 0 | –476 | 0 | — | 0 |
| Total revenues | 52,803 | 44,542 | 30,154 | 23,310 | 4,810 | 4,023 | –476 | 0 | 87,291 | 71,875 |
| Intragroup | ||||||||||
| segment expenses | –476 | 0 | 0 | 0 | 0 | 0 | 476 | 0 | — | 0 |
| Other segment | ||||||||||
| expenses | –19,301 | –12,965 | –15,218 | –12,155 | –4,850 | –5,549 | — | — | 39,369 | –30,669 |
| Segment operating result | 33,026 | 31,577 | 14,936 | 11,155 | –40 | –1,526 | 0 | 0 | 47,922 | 41,206 |
| Other operating | ||||||||||
| income/expenses | –20,855 | –21,565 | ||||||||
| EBITDA | 27,067 | 19,641 |
| in € thousand | 01/01/2015 – 09/30/2015 |
01/01/2014 – 09/30/2014 |
|---|---|---|
| D-A-CH | 83,535 | 68,630 |
| International | 3,756 | 3,245 |
| 87,291 | 71,875 |
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, 2014, the non-current assets (excl. deferred tax assets) of €37,237 thousand (December 31, 2014: €25,818 thousand) are attributable exclusively to the D-A-CH region.
During the period under review, the Group designated a currency futures contract as a fair value hedge for foreign currency assets in the amount of CHF 7,000 thousand. Since the contract has been assessed as having a low level of counterparty risk, the hedge has been determined as having been highly effective. Effective September 30, 2015, an unrealized gain in the amount of €283 thousand was netted against expenses from the remeasurement of assets.
At the start of 2015, increased volatility was seen in the EUR-CHF exchange rate, as well as some volatility in the EUR-USD exchange rate. This has led to an increase in the income from the revaluation of cash and cash equivalents reported under other operating income.
Please refer to the consolidated financial statements as of December 31, 2014, for information about related parties. From the perspective of XING AG, no significant changes with respect to the Burda Group occurred until September 30, 2015.
There were no claims against members of the Executive Board and the Supervisory Board as of September 30, 2015.
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 5, 2015
Dr, Thomas Vollmoeller Ingo Chu
Timm Richter Jens Pape
Interim Report Q3 2015 November 5, 2015
XING AG Dammtorstraße 30 20354 Hamburg
For Annual Reports, Interim Reports and current financial information about XING AG, please contact:
Patrick Möller (Director Investor Relations) Phone +49 40 41 91 31 — 793 Fax +49 40 41 91 31 — 44 [email protected]
For press inquiries and current information about XING AG, please contact:
Marc-Sven Kopka (Vice President External Affairs) Phone +49 40 41 91 31 — 763 Fax +49 40 41 91 31 — 44 [email protected]
http://blog.xing.com (Corporate blog of XING AG)
Twitter: xing_ir (Information and news related to the capital markets)
Twitter: xing_de (Topics and news related to the Company in general – German only)
Twitter: xing_com (Corporate information and news in English)
Youtube: www.youtube.com/user/XINGcom?gl=DE (XING AG's Youtube channel)
Facebook: www.facebook.com/XING (XING AG's Facebook profile)
CAT Consultants, Hamburg www.cat-consultants.com
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 Phone +49 40 41 91 31 — 793 Fax +49 40 41 91 31 — 44 [email protected]
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