XING AG investor presentation May/June 2013


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XING AG investor presentation May/June 2013

  1. 1. XING – #1 ProfessionalSocial Network In GermanSpeaking EuropeInvestor Presentation, May/June 2013
  2. 2. Disclaimer2This presentation was produced in May 2013 by XING AG (the "Company") solely for use as an information source for potential business partners and is strictlyconfidential. 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 personby 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 offeror 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 berelied 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 itssubsidiaries, any directors, officers, employees, advisors nor any other person makes any representation or warranty, express or implied as to, and no relianceshould 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. Thesame 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, thisdocument is selective in nature and is intended to provide an introduction to, and overview of, the business of the Company. Where any information and statisticsare quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as beingaccurate.This presentation contains forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which theCompany 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 theCompany or information from third party sources, contained in this presentation are based on current plans, estimates, assumptions and projections and involveuncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. TheCompany does not represent or guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept anyresponsibility 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 March 2013. 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.IMPORTANT NOTICEPro-forma resultsResults contained in this presentation are partly based on unaudited pro-forma financial results that the Company derived from its preliminary and past financialstatements for the indicated periods in order to make these periods comparable and show non-recurring costs.Cautionary note regarding preliminary results and pro-forma financial resultsThis presentation contains preliminary results and pro-forma results. The preliminary results may change during their final review. While the Company believes thatits 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 willaccurately reflect these trends and status and therefore, its investors are urged not to rely solely upon the pro-forma results when making their investing decisionand the pro-forma results should always be reviewed together with its actual financial results.
  3. 3. Executive Summary3Large growth potentialClear strategy to double revenues#1 professional social network in D-A-CHHigh profitability and strong cash-generation
  4. 4. … in members… in social recruiting… in activity… due to strong local tiesLeading professional social network in D-A-CH…4Page Views Distributionof professional networks 2012280%19%1%> 250 local Ambassadors> 120,000 offline events p.a.XING belongs to Germany’s DNAWhich social media sites arebest for finding top talent1Member base and net growth2011 2012+816k5.28m6.09m4283 3 1XING Facebook Twitter LinkedIn OtherSource:1 Forsa survey among 201 HR decision makers in Germany, September 20122 Comscore Metrics 10/2012 Local customer service Largest local sales force Specialized for local needs#1
  5. 5. Members use XING for…5Digital identity managementNetworking andknowledge transfer>6m businessprofessionals in D-A-CHJobs/career opportunitiesEvent participation
  6. 6. Corporates use XING for…6e-Recruitingactive sourcing(Talent Manager)Passive sourcing(Job ads andemployer branding)Organize eventsIncrease reachof eventsAdvertisingIdentify potentialcustomers and businesspartnersAdexample>6m businessprofessionals in D-A-CH
  7. 7. XING has multiple ways of monetization7Premium Club Eventse-RecruitingPaidmembershipsPremium membership:• 3m @ €7.95 p.m.• 12m @ €6.95 p.m.• Total of 810k payers(D-A-CH: 786k)13% payer ratioAdvertising• CPM model13m+ members worldwide with 6.3m+ members in D-A-CHPassive recruiting• Fixed price job ads: €395 – €595• Click price job ads: €0.79 p.c.Active recruiting• XING Talent Manager: €249/license p.m.Employer brandingCompany Profiles• @ €395 - €1,095 p.m.Commissionto XING• 5.9% of ticket price• €0.99 per ticket sold• AdCreator(Event Lead Gen):CPM ModelExisting monetization models easily transferrable to mobile
  8. 8. 4th largest economy worldwide1• 100m inhabitants• 77m internet users• $4.3 trillion GDP(35% of EU)1Significant potential to further drive member and revenue growth81 Source: International Monetary Fund2 Source: XING estimates3 Source: Convene’s annual meetings market survey & XING estimates>20m white collarprofessionals2>€1.3bn recruiting industry2~€500m events ticketingand fulfillment market3Particular challenges• Aging population• Shortage of skilled workforce• War for talentD-A-CH
  9. 9. Key strategic initiatives9Our strategy to double revenuesMantra andVisionSocial NetworkPremium Clube-RecruitingEventsSocializing businessWe are THE social fabric that creates andenriches business interactions every dayDesired membershipEvery single day a user knows thathis/her membership is valuableMatching people and jobsThere is no job search without XING –neither for recruiters nor for job-seekersDigital mastermind of eventsWe are the first point of reference for organizersand attendees of professional eventsIncrease relevant andunique user valueEstablish paidbusiness communityEstablish leading activesourcing and employerbranding platformBuild Europe’s largestplatform for conferencesand seminars
  10. 10. We are THE socialfabric that createsand enriches busi-ness interactionsevery day10Executing our growth strategy:Our Social Networking platformSocializingbusinessAddressable market: ~20m users• Strong network effects• Strong growth of mobile traffic• >300m P2P connectionsOur strategic initiatives to drivegrowth and traffic of our networkMantraVisionMembers in D-A-CH5.36.1 6.32011 2012 Q1 2013• Push mobile• Drive relevance for users• Pull in members through Verticals• Build API ecosystem• Evolve design and usabilityto become more engaging
  11. 11. 2332031961842052011 Q112 Q212 Q312 Q412 Q113 March 1311Continuing member growth in core regionLong runway left for further growth in D-A-CHDaily active users (DAU): Q1‘13 vs. Q1‘12: +29%Member base & net adds5.36.3mAddressable marketin D-A-CH~20m
  12. 12. 12Executing our growth strategy: Premium ClubDesiredmembershipEvery single daya user knows thathis/her membershipis valuableMantra• Revitalize current premiummembership with additional benefits(XING and 3rd party)• Add new paid special memberships• Seal new partnershipsOur strategic initiatives todrive growthVision45.148.8 51.32010 2011 2012Premium Club revenues in €mAddressable market:XING makes market• 810,000 paying members• 13% payer ratio• >90% renewal rate12
  13. 13. Matching peopleand jobsThere is no jobsearch withoutXING – neither forrecruiters nor forjob-seekersMantra• Claim the market and secure no. 1position for active sourcing in D-A-CH• Increase product offering:New products for active recruitingand employer branding(kununu acquisition in January 2013)• Build the market:By expanding into adjacent segmentsOur strategic initiatives todrive growthVisionExecuting our growth strategy: e-RecruitingXING offers the largest database for active and passive job-seekers137.813.316.72010 2011 2012Addressable market: €1.3bn Passive and active sourcing Headhunting market (skilled) Employer branding Freelancer market• XING is already #1 in social recruiting• Opportunity to establish active sourcingas most effective way to recruit• Social context makes passive sourcingmore effective• Large sales force with localcustomer servicee-Recruiting revenues in €m
  14. 14. Access to the largest talent networkin German-speaking countries14Executing our growth strategy: e-RecruitingXING Talent Manager (XTM) for active sourcing1 Source: ICR Recruiting Report 2012, 500+ Participants2 Regular price. Introductory offer includes discountGerman companies pursuingactive sourcing111%24%18%2010 20122011TALENT MANAGER (€3,000 p.a. per license)2“The long-term corporate recruiting solution”Launched Sep27, 2012User licenses are distributed by companyProject folders for current vacancieskeep things organizedTransparent teamwork forrecruiting projects>1,500seats soldalready
  15. 15. Digital mastermindof eventsWe are the firstpoint of referencefor organizers andattendees ofprofessional eventsMantraOur strategic initiativesto drive growthVision15Executing our growth strategy: Events• Integration of amiando@XINGafter founders left• Strengthen marketplaceand lead generation• Mobile now!• Change passiveto active salesEvents revenues in €mAddressable market: ~€500m• >120k events organized• >700k event participants• Strong local sales force• AdCreator to promote events online02.53.92010 2011 2012
  16. 16. 16Our goal: double revenues until 2016201520142013EBITDAmarginexpansionbecomesvisibleStrengthenexecutionexcellence andaccountabilitySelectiveinvestmentsin product andmarketing/salesHeadcountincreasesignificantly lowerthan in previousyears2016Year oftransitionGrowingtop line20%+ yoyRevenuesdoubled
  17. 17. 17Our FinancialsRegular dividendsAttractive revenue growth withfurther growth potential aheadNegative invested capitalStrong cash flow generationStrong profitability despite increasedinvestments in growth
  18. 18. FY 2012: Revenue growth 11%, flat EBITDA18One-time effects on €1.9m related to mandatorytakeover bid by Burda Digital & kununu acquisition2012adjusted2011 2012vs. 20112012vs. 2011Abs.2) Abs.3) Abs. Rel.Total revenue1 73.3 66.2 7.1 11%Costs (51.3) (43.9) (7.4) (17%)EBITDA 22.0 22.2 (0.2) (1%)Margin 30% 34% (4% pts) (4% pts)Depreciation (8.3) (8.0) (0.3) (4%)Financial result 0.3 0.5 (0.2) (32%)Taxes (4.8) (5.3) 0.5 9%Net result 9.2 9.4 (0.2) (3%)(1) Including other operating income(2) 2012 figures adjusted for one-time expenses related to Burda takeover bid & kununu GmbH acquisition (€1.9m) & taxes adjusted by €0.5m accordingly(3) 2011 figures adjusted for one-time write-down of market entries for Spain & Turkey (€14.4m) & taxes adjusted by €0.3m accordingly
  19. 19. All business units profitable except “Events”192012NetworkPremium Clube-RecruitingEventsEBITDA margin (group) 30%Profitability by business unitOngoing investments in “Events” dilutes group EBITDA margin by 5-6% ptsN/A
  20. 20. FY 2012: Revenue Split20e-Recruitingin €m2011 201213.316.726%Eventsin €m2011 20122.53.954%2011 201248.8 51.35%Premium Clubin €m
  21. 21. Full year operating cash flow €18.9m212012 2011 2012vs. 20112012vs. 2011Abs. Abs. Abs. Rel.EBITDA 20.1 22.2 (2.2) (10%)Interest/tax/ESOP (3.8) (9.1) 5.3 59%Net working capital 2.6 0.8 1.8 224%Operating cash flow excl. organizer cash 18.9 13.9 5.0 36%Investment – operating (7.3) (6.5) (0.8) (12%)Investment – acquisitions (2.5) (5.4) 3.0 55%Financing incl. transaction of own shares 3.9 5.2 (1.3) (27%)Free cash flow excl. dividends & organizer cash 13.0 7.2 (5.8) N/ACapital return (20.0) 0.0 (20.0) N/ARegular dividend (3.0) 0.0 (3.0) N/AFree cash flow excl. organizer cash (10.0) 7.2 (17.2) N/AEffects organizer cash 0.6 2.0 (1.4) (71%)Free cash flow incl. organizer cash (9.4) 9.2 (18.6) N/AAdjusted for distortions in 2011 operating cash flow is on previous years level[2011 adjusted for tax-cash-outs for years 2006-2010 (€4.8m) = OpCF: €18.7m]21
  22. 22. Q1 2013 numbersThe professional
  23. 23. Q1’13: €19.6m revenues, €5.3m EBITDA23(1) Including other operating income(2) Adjusted for one-time expenses related to Burda bid and kununu acquisition (€1.9m)Q1’13 Q4’12 Q1’13vs. Q4’12Q1’12 Q1’13vs. Q1’12Abs Abs.2 % Abs. %Total revenue1 19.6 19.0 3% 17.7 11%Costs (14.3) (12.4) (15%) (12.9) (11%)EBITDA 5.3 6.6 (19%) 4.8 11%Margin 27% 35% (8%pts) 27% 0%ptsDepreciation (2.3) (2.3) 2% (1.8) (25%)Financial result 0.0 0.0 19% 0.1 (70%)Taxes (1.1) (1.4) 22% (1.1) 5%Net result 2.0 2.9 (32%) 2.0 1%Q1 first-time consolidation of kununu
  24. 24. Q1’2013: e-recruiting with 32% yoy growth24e-Recruitingin €mQ112 Q1134.05.332%Eventsin €mQ112 Q1131.0 1.15%Q112 Q11312.4 12.84%Premium Clubin €m
  25. 25. Personnel main investment area to further drive company growth25Personnelin €min % of total revenueMarketingin €min % of total revenueOther Expensesin €min % of total revenueInvestment into product/technologyorganization & sales/marketing22 new FTEs in Q1(inkl. 25 from kununu)65 new FTE’s since Q1’12Online display & social media adv.Search engine marketing (SEM)Offline marketing expenditure(conferences & events,print, sponsoring)Affiliate marketingExternal services, legal, audit &consultingPayment processing, serverhostingRent & other costs7.3 7.68.8Q112 Q412 Q11341% 41%1.90.6 1.2Q112 Q412 Q11310%3%3.84.2 4.4Q112 Q412 Q11321% 22%45%22%6%(38%) 16%20%Cost development reflects first-time consolidation of kununu
  26. 26. Q1’2013: Operating cash flow: €6.4m26Q1’13 Q4’12 Q1’13vs. Q4’12Q1’12 Q1’13vs. Q1’12Abs. Abs. Abs. Abs. Abs.EBITDA 5.3 4.7 0.6 4.8 0.5Interest/tax/ESOP (1.1) (1.4) 0.2 (0.8) (0.4)Net working capital 2.2 0.5 1.8 2.4 (0.2)Operating cashflow excl.organizer cash6.4 3.8 2.6 6.5 (0.1)Investment – operating (1.8) (2.1) 0.3 (1.3) (0.5)Investment – acquisitions (2.9) (2.5) -0.4 (0.0) (2.9)Financing incl.transaction of own shares0.0 1,9 -1,9 0,0 0,0Free cashflow excl. distribution offunds & organizer cash1.7 1.1 0.6 5.2 (3.5)Special distribution 0.0 0.0 0.0 (20.0) 20Free cashflow excl.event organizer cash1.7 1.1 0.6 (14.8) 16.5Effects organizer cash 1.0 (2.1) 3.1 1.2 (0.2)Free cashflow incl.organizer cash2.7 (1.0) 3.7 (13.6) 16.3
  27. 27. Negative invested capital from shareholders’ perspective27in €m[Excl. event organizer cash and NWC]As ofMarch2013Abs.Assets 101.2Operating assets 25.0Acquisitions 16.8TAX A/R 1.5Cash 57.9Liabilities 101.2Equity 53.8Deferred income 30.0Liabilities 14.1Tax liabilities 3.3Other 0.0Operating assets €25.0mDeferred income (€30.0m)Liabilities (€14.1m)Invested capitalw/o cash(€19.1m)
  28. 28. Q1 2013product updateThe professional
  29. 29. 29Public launch of XING projects – a marketplace for freelancers Logical extension fore-Recruiting business Public launch January 28, 2013 >700,000 freelancers on XINGalready (D-A-CH) 5 digit-number of projects arebeing posted already Monetization will start at theend of Q2 Listing fee for a project will be@195 for 30 days
  30. 30. 30Launch of XING ipad App Mobile XING usage now at 36% oftota visits iPad closes the gap between theLaptop and the smartphone Extending XING usage into earlymorning and evening times Focus on key functions: Contacts Messages Search Exclusive iPad feature:“Bookmarking“ job ads andmember profiles
  31. 31. 31Update on kununu integrationLots of progress in the first quarter 2013Rate youremployeraction onCPXING IDonKununuFebruary March AprilKununuonBASICsKununucompulsoryfor newbusinessCompetitiveAdvertisingon CPsNewRatingstab on CPXING JobsonKununu Pricing for new CP customersdepending on company size andfeature set Kununu sales force to exclusivelysell XING CPs starting Q2‘2013
  32. 32. 32XING Talentmanager update – Significant productimprovements thanks to valuable customer feedback XTM selling above internalplans: >1,500 seats sold >4,000 recommendedfeature additions receivedfrom users Fast iteration with weeklyfeature updates to XTM Positive customer feedbacks Old “Recruiter Membership”will be phased out at the endof 2014
  33. 33. Investorinformation& ContactThe professional
  34. 34. XING AG IR statsMarket cap: ~€250m / €58m cash / no debt34Average trading volume per day (XETRA)Consensus from10 brokers 2013e 2014e 2015eTotal revenues 81.8 91.4 94.1EBITDA 24.0 29.3 32.1Margin 29% 32% 34%Depreciation (8.1) (8,1) (8,1)EBIT 15.9 21.1 23.2Margin 19% 23% 25%Net income 11.1 14.6 16.7EPS in € 2.04 2.69 3.02DPS in € 0.71 0.82 0.87Analyst coverageBerenberg Bank, Commerzbank,Close Brothers, Deutsche Bank,Hauck & Aufhäuser, HSBC,JP Morgan Cazenove,MM Warburg, MontegaShares 5,554,503Consensus(AnalystestimatesasofMay27,2013)TecDax ranking end of April 2013Market Cap. 35Turnover 29 Numbers based on last filing – actual shareholdings can differBurda Digital GmbH 2,922,244 52.61%DWS Investment 361,000 6.50%Ennismore 293,622 5.29%Schroders 282,421 5.08%Ruane, Cunniff & Goldfarb 169,259 3.05%Treasury Shares 37,832 0.68%Other 1,487,865 26.79%27,67714,15611,6016,21615,43721,2599,8076,2223,6836,537 6,989 6,62112,335May-12 Jun-12 July 12 Aug-12 Sep-12 Oct-12 Nov-12 Dec - 12 Jan-13 Feb-13 Mar-13 Apr-13 May-13
  35. 35. XING share price development since IPO in Dec 06as of May 27, 201335+31%+13%+38%+56%0%50%100%150%200%250%XING AG TecDAX SDAX DAX
  36. 36. Investor RelationsContact details & social media channels36Patrick MoellerDirector Investor RelationsXING AGDammtorstraße 29-3220354 HamburgGermanyTel.: +49 (0)40 419 131-793Fax.: +49 (0)40 419 131-44(Please use this number to submit “WpHG notifications”)Email.: patrick.moeller@xing.comIR website: