Good day, everyone. Welcome to the Scout24 Q1 2021 Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ursula Keret. Please go ahead.
Welcome, everyone, to SCOUT24's Q1 2021 results call. My name is Ursula Keret, and I am Head of Investor Relations at Scout24. I have Tobias Hartmann, our CEO and Dirk Schmelser, our CFO, with me on this call. Tobias will kick off the presentation with a summary of our Q1 performance and how we are executing on our strategic agenda. Dirk will then cover the Q1 2021 financials in detail and will provide an update on our 2021 outlook.
We will then have time for your There, you can also find our Q1 2021 statement, which contains a detailed discussion of the Q1 results and the corresponding financial table. If you are using the web link we provided beforehand, you can see the presentation slides live. This session will be recorded, and a replay will be made available as quickly as possible after the event. Please be aware of the disclaimer on Page 2, and let us now turn to Page 3, where I hand it over to Toby.
Thank you, Ursula, and welcome, everyone. Let me start on Page 3 on a very positive note. We saw strong momentum in the Q1 of this year, and we delivered a higher than expected revenue growth of 5.2%, which also led us to increase our revenue outlook for the full year 2021. Dirk will talk about that later. This revenue growth was fueled by the double digit growth of our residential real estate partner business.
An increasing customer base is successfully using our realtor lead engine product to source and win new sale mandates, leading to more real estate transactions. And through our newly acquired Immuferkauf24 channel, we have enabled around 3.90 sales transactions in Q1 where we received part of the agent commission. 1 year ago, this commission share business did not yet exist at Cow24. On the rental side, we improved our services for home seekers to help them with successful rent transactions. Accordingly, our Plus product revenue increased by 28% year on year.
While acknowledging our success, let's not forget the challenges we faced at the beginning of the year. The most salient were the newly enacted Bristolaprencieb, COVID-nineteen with ongoing lockdown measures across Germany and the lack of supply of real estate for sale and rent. Our positive revenue development in Q1 clearly demonstrates that we managed to turn these challenges into growth catalysts in a market asking for greater digitization and convenience. Let me give you an example. While we saw a somewhat reduced agents listing activity on the back of bestelaprencip and COVID-nineteen, we continue to invest into our membership addition.
Through these, we are offering an even more efficient and complete product set for our partners and ultimately help them drive build a comprehensive network marketplace where we offer digital product along the value chain of real estate sale and rent transactions. The development of our key performance metrics on Page 4 shows that this transactional focus is translating into growth. The reduced EBITDA margin is a function of the changes in the revenue mix and the investments we are making into growth product. Dirk will explain this in greater detail. A key driver of our revenue growth was the increasing Realtor lead engine revenue.
This is derived from homeowners' contacts we refer to agents. The price for those leads depends on the quality. On the top of the funnel, we counted around 27,400 homeowners referred to agents via different acquisition products, which is 55% more than in the prior year quarter. As the migration of our residential agent customers to the new memberships is still ongoing, ARPU grew at only 1.1%. However,
we are
confident that this will accelerate in the second half of the year. I already mentioned the customer growth of 4.4% and the effect COVID-nineteen, the lack of supply and the bestseller print seat have on listings, which were down 4.1%. Traffic on IMOS Cowd measured in sessions was up 1.8% to 107,700,000 per month. Due to a change in the provider, we did not include the number of unique users for Q1 2021. In summary, we delivered growth across all relevant KPIs and this against a strong Q1 2020.
Especially the revenue growth of 5.2 percent is a strong performance, and this will further accelerate as our growth investments translate into accelerated revenue growth. Our investments and the execution of our network marketplace agenda not only translated into attractive growth. On Page 5, you can see the impact also in our revenue mix shift from one off listing revenues to recurring agent and consumer subscription revenues and leads. This upgrade in revenue mix proves that we are moving closer to the Real Estate transaction. Through our enhanced membership additions, the largest and orange portion of the graph, we are strengthening our partnership with the agents.
We want to be perceived as a business and transaction enabler rather than cost center by them. The acceleration of the lead engine product also pays into exactly that. The revenues are included in the amber portion of the graph, which represented 14% of IMOSCOW 24 revenues in Q1 2021, up from 10% the year prior. The consumer subscription revenues depicted in teal are composed of strong growth products such as Tenant Plus, Buyer Plus and Landlord Plus. They grew by 28% year on year to make up 14% of the total IMOS Cloud revenue in Q1.
Please be reminded that the growth of the Plus product as well as the growth of the lead product is being pushed by a respective marketing investor. With this revenue shift, we are gaining both in quality and continuity. We are increasing the recurring portion of our revenues, orange plus teal, which increased from 67% in Q1 twenty nineteen over 69% Q1 2020 to 71% in Q1 2021. At the same time, the one off listing PPA revenues decreased from 20% in Q1 2019 to 18% in Q1 20 20 to 13% in Q1 2021. This development has been accelerated by the Free to List initiative, which we started at the end of March last year.
We have been using this slide for some time now. So it nicely shows you that we are developing from a pure classifieds play into a comprehensive ecosystem. And this transition will be further accelerated by the acquisition of Vermita DA, which we announced yesterday. With Vermita DA, we will apply a similar playbook on the rent side as with Immuforcalf24 on the sales side. With Immuforcalf24, we took the realtor lead engine product to the next level.
The impressive 95% revenue growth in Q1 from €3,800,000 to €7,500,000 was largely driven by Immu for CAF 24 contributing €2,500,000 towards that increase. Similarly, permitted D. A. Will take the landlord plus product to the next level. With the listing services of Landlord Plus, the right tenants can be found.
With Permita DA, landlords will be able to comprehensively manage the entire life cycle of the tenancy. Let me give you some facts on Vermita DA. The company was founded in 2016 by Johannes Fischer, who will remain in the company as Managing Director. Permita is a, if not the, market leading digital platform for private landlords in Germany with a few 100,000 registered rental objects. The platform offers its customers a comprehensive SaaS toolkit to manage all property related processes, such as tenant relationship management, preparation of utility bills, assembling tax declaration data or obtaining information on the market value of the properties under management.
With the integration of Amita. We will substantially extend our product offering within our rental journey, and this comes with a great advantage. We are accelerating our product development efforts in this space by approximately 3 years. Already by the end of this year, our private landlord customers will benefit from first synergies of both platforms. This acquisition is an important milestone on our way to build a comprehensive market network because the rental market is key in Germany.
3,200,000 rental transactions are handled per year compared to 626,000 sale transactions. With this, I'm handing it over to Dirk, who will dive deeper into our Q1 financials, which will include ImmoForkau24, but of course, not yet permitted.
Thank you, Toby, and a warm welcome also from my side. Tobi already talked about our key financials at group level. Slide 7 presents the segment view with a very positive outcome for our largest segment, Residential Real Estate. Here, revenue increased by 8.5% to €68,800,000 This growth was mainly driven by the revenue from our professional customers, which grew at a double digit rate by 11.3%. Main reason was the strong pickup of the realtor lead engine product, which led to revenue increase of 95%, including Immofacau 24%.
Revenue from consumers increased by 2.5%. This means that the loss of revenue due to Free to List was overcompensated for the first time by the growth of our Plus product subscription revenue. The latter grew by 28% year on year. The ordinary operating EBITDA margin of the Residential Real Estate segment came in at 61.7%, which is 3.3 percentage points below the previous year. On the one hand, this reflects the foregone private listing revenues and on the other hand, the changed revenue mix due to the higher growth products including ImmuFargo 24.
The Business Real Estate segment revenue declined by 3.8 percent to €17,200,000 due to the pandemic related decline in revenue with Business Real Estate Agents. The Business Real Estate margin fell by 1.7 percentage points year on year to 71.9%. The Media and Other segment revenue decreased by 1.8 percent to €7,600,000 We are now increasingly offering advertising space as an internal agency to our core customers. Flofac recorded declining revenues due to the ongoing shift in the payment model, while the growing business of Imoscopes 24 Austria had an opposite effect. The ordinary operating EBITDA margin of the Media and Other segment fell by 6.3 percentage points to 33.6%.
All segments combined, we achieved a revenue growth of 5.1 percent to €93,700,000 and this against a strong prior year quarter, which was largely unaffected by the pandemic. However, the change in revenue mix combined with a stable absolute ordinary operating EBITDA resulted in a lower margin 61.3%. Let us now take a closer look at the customer and ARPU development on Page 8. We have strengthened the relationship with our professional customers during the pandemic and we put a lot of effort in the improvement of the product suite. Once the agents have fully migrated to the new membership and the pandemic is fading, we will increase our focus on ARPU growth again.
The number of residential real estate partners grew by 4.8% year on year to 17,474 partners at the end of Q1 2021. The ARPU rose slightly by 1.1% compared to the strong prior year quarter. As Toby mentioned before, our focus in the first half of the year is more on a successful migration than on pricing. At the end of March, the migration rate was at 66%, 6 percentage points up from the 60% at the end of February. The number of business real estate partners also increased by 2% to 2,804 as of March 31, 2021.
The business partner ABU for the Q1 was at €1758 down 2.9% year on year. This decrease is mainly due to the decline in revenue with business real estate agents, while revenue with developers and new homebuilders increased slightly. Turning to Page 9, let us go through the main ordinary operating items affecting our margin development. Own work capitalized increased to €5,600,000 in the Q1 with a stable capitalization ratio of 6%. This ratio reflects our continued product enhancement activities.
Examples of product investments we made in the quarter include further developments of the Home Seller Hub, the Plus products, the memberships and the location analysis. The total ordinary operating cost increased by 12.5% year on year to €44,300,000 This increase is mainly related to the change in revenue mix towards more transactional product. It includes the additional cost of Immofacauf24, which was not yet part of the Skaust24 group in the year before. While Immofacau24 contributed €2,500,000 to our revenue in Q1, this contribution was not yet profitable. For example, the 16.6% increase in personnel cost is mainly due to the integration of Imhofacauf 24 employees.
More full time equivalents at Immokacao 24 and post carve out dissynergies are adding to that. The growth in other operating costs by 24 percent can be broken down as follows: Additional online marketing costs, these are primarily acquisition costs for our high growth lead products Increasing selling costs for the growing Plus products also had an effect. External personnel costs due to the additional call center activities as well as investments in Flofec. Finally, dissynergies contributing to the rising other operating expenses. As the operating effects increased more strongly in percentage terms than revenue and owned were capitalized, our ordinary operating EBITDA remained stable year on year at €55,000,000 and the margin decreased by 3.1 percentage points to 58 point 7%.
On Page 10, you see the items below the ordinary operating EBITDA line. Non operating cost increased by 9.9% mainly due to the higher share based compensation. As a result, the reported EBITDA declined slightly by 0.6 percent to €52,300,000 in Q1 2021. With the year on year improvement in the financial result with rising tax expenses, profit after tax from continuing operations fell by 8.2% to €24,400,000 in the first quarter of 2021. Based on the volume weighted average number of shares of €97,800,000 this results in a stable EPS for the continuing operations of €0.25 By the way, the declining number of shares reflects the share buybacks affected over the last year.
It does not yet reflect the capital decrease following the recent tender transaction, which brings me to the next page. With Page 11, let me update you on where we stand with our capital return road map. The key pillar of our capital return road map was the up to €1,000,000,000 buyback tender transaction, which we successfully completed in April with an acceptance rate of 82% translating into €794,000,000 of cash returned to shareholders and the corresponding decrease of our share we started with the up to €200,000,000 ordinary share buyback via the stock market. As of end of last week, we already bought back over €83,000,000 with that program. Our AGM will take place on 8th July, where we will propose a dividend for 2020 in the amount of €68,500,000 The amount per share depends on the total amount of shares without treasury shares at that time.
As of the end of last week, we had 85,200,000 shares outstanding excluding treasury shares. In relation to the proposed dividend amount, this number of shares would result in a pro form a dividend per share of €0.80 Post the ongoing share buyback program and the 2020 dividend, we had around €500,000,000 undistributed AutoScout 24 sale proceeds left. Against this background, we will seek shareholder approval at the upcoming AGM for an additional authorization to buy back shares in the amount up to 10% of the existing share capital. Now let's turn to Page 12 and our updated outlook. Based on the growth momentum we have seen in Q1, we are increasing our group revenue outlook for the year from a mid single digit percentage growth rate to a mid to high single digit percentage growth rate.
For our Residential Real Estate segment, we are upgrading the 2021 revenue outlook to low double digit growth. Taking into account the corona impact, we see the Business Real Estate segment with a low single digit growth rate for the full year. Our outlook for Media and Other is unchanged. Here we expect a declining to flat revenue development. On the back of the current growth opportunities and the respective investment into our product suite, we are a bit more conservative regarding the ordinary EBITDA margin for the group.
Hence, our revised full year margin outlook of up to 60% versus prior outlook of around 60%. Please be aware that this updated outlook excludes the effect from the PharMEDe D. A. Acquisition. With this, I hand it back over to the operator and your question.
Thank you. Our first question comes from Craig Abbott from Kepler Cheuvreux.
Yes. Good afternoon, everyone. Thanks for taking my questions. Just 2 to begin with. First of all, on Formita DE, I just wondered if you could provide us some sort of ballpark financial metrics.
I mean, I saw they have 70 employees. I mean, would sales of around $10,000,000 be realistic? And if you could give us some indication of their profitability, that would be very useful. And then on the margin guidance, I'm just trying to see if you could maybe provide some feel for the scale, I. E.
You're now guiding for mid- to high single digit revenue growth. And obviously, it depends on mix, product sales mix and so forth. But if we assume between 4% sales growth and 9% sales growth, I mean, is there any kind of indication you can give us in sort of what which directional thinking there? Thank you.
Hey, Craig. This is Toby. Thank you for your questions. Let me kick it off on Formita DAA. While this may seem a rather small acquisition in terms of number of employees or so, the strategic value is really of the utmost importance to us.
The company was founded in 2016 again and it's perfectly fit into our journey, in this case the rental journey. And we will apply a similar playbook to what we did in sale for the sale journey where we acquired Immobil Per Cap24. So year over year is really it helps us propel our thrust towards transactions and customer or consumer relationships going through the landlords and really offering something that we don't have in place today. With that, I can turn it over to Dirk to give you a bit more color in terms of financials that we will not disclose today.
Hi, Greg. Back to you. And thanks, Toby, for that one. No. We did intend to give you an update on the overall revenue and EBITDA projection, but the number of €10,000,000 for the 70 employees that you mentioned for this year, certainly a bit too high.
So we don't see that negative EBITDA impact from the transaction. We'll give more color on that as we speak. But what we can say adding to what Toby just said is that this transaction really helps us to improve our position on consumer products, in this case, landlord products. So on the revenue side, don't expect too much maybe €500,000 from Zen Homes this year until the end of 2021. And on the EBITDA side, as I said, we will not guide this right now.
The guidance you were referring to also on EBITDA margin is mainly based on the organic development of the business. And yes, you are right and pointing to the right things here. We have taken guidance slightly down, whereas we said earlier on 60% around 60%, we're now going up to 60%. From our perspective, this is notched down 1, 2 percentage points down from previous indications. And the reason for that is twofold.
First of all, we are making tremendous steps forward on our Real Techniques product. And we saw that we want to invest more in that product and this product has a gap between acquisition of the customer and revenue recognition of 9 to 12 months. And therefore, we decided to accelerate our marketing spend and investments this year and we can harvest that in 2022 and going forward. Secondly, what we see is consumer revenues going up. Consumer revenues to a large extent coming in with a slightly lower gross margin than previous TBA revenues.
As you have and we have guided previously, we said we want to continue our free to list initiatives. Therefore, we are giving up PPA revenues and we are ramping up consumer revenues. This time is the Q1 where we have basically overtaken our revenue loss from PBA and increased our consumer revenues to COVID-nineteen. So that is the reason behind our slightly lower margin guidance. And therefore, I would like to hand over to the operator again.
Thank you very much.
Okay. And we'll take our next question from Miriam Adisa from Morgan Stanley.
Great. Thanks everyone for taking my questions. Firstly, just to get a bit more color on the RP dynamics within already migrated? And perhaps any color on where you are in terms of already migrated? And perhaps any color on where you are in terms of penetration?
I understand that you're not focused on sort of driving up the ARPU at the moment, but it would just be good to get that color. And then also on the consumer revenue dynamics, was there anything in particular that changed in this quarter that drove that acceleration? Or is it simply just sort of lapping comps and also just the
sort of normal growth in
the business? Just wondering if there's anything specific there or sort of market related that drove that growth?
Hi, Miriam. I'll start with the consumer revenue dynamics. What we've seen is we've played around with different sorts of offerings. As you mentioned, the market is very, very tight. So the question is how do you narrow that to the best pricing.
So we've had different terms around pricing and subscription offers. We've made some good progress there. We've also actually launched and played around a little bit with an important segment, which students are having a hard time finding their right preference. So that's also something. But aside from that, we can just honestly say it's a very solid product fit and we are financing the product around pricing and terms.
That's it. Dirk?
Yes. To add on that, I think when you were referring to ARPUDynamics, we're still very happy, especially when you compare our ARPU to the Q4 2020. So you've seen significant uptakes in the Q1 this year. Secondly, Miriam, you were referring to the migration initiatives we're having in place. I can now confirm and I think we have that in the presentation as well.
We are at 66% finished and will take the next 2.5, 3 months to finalize that. On customer numbers, you saw that we continue to grow on absolute customer numbers and we are very happy with that. And that also translates into low churn. Otherwise, we wouldn't be able to improve our customer base overall. So we believe that this has to do with the fact that agent satisfaction significantly improved over the last quarters, especially with the rate card migration and the acquisition additions we put in place.
We are now seeing very satisfied customers across the board, which also plays positively into a low churn.
Thank you. Yes, my question was more on within the migrate within the 66%, what the sort of split is between image and base and then also sort of trading up and down between the tiers?
Yes. I mean, Miriam, we had some information around that earlier, but what you can see is certainly that the 5 of our customers is now in the Image Edition and we are seeing slight improvements on the Acquisition Edition and most of the customers that are now automatically migrated by this summer will land in the base edition. And that overall certainly paid into an improved ARPU, right. Blended ARPU still increases over time and we're very happy with that product and the products that we have in the end.
Great. Thank you.
And we'll take our next question from Adam Berlin from UBS.
Hi, good afternoon. Just wanted to talk about the retail lead engine revenue. Two questions. The first is, can you share how much of the retailer lead engine revenue you reported in Q1 came from these commission share based transactions? You mentioned that 3.90 transactions in the quarter.
How much of the total retailing revenue comes from those versus just more normal lead revenue per lead model? And secondly, can you tell us a bit more about the pricing model for the commission based transactions? We know the typical commission is around 4%. Roughly how much of that do you get out of that house transaction for those 390? Thanks very much.
Maybe I'll start off with the revenue split. What I can confirm is that we have run about €3,000,000 in the Q1 of rent from commission based leads that we are giving to real estate agents. And this is this corresponds to what you just said, Adam, to around 350 to 390 overall commission
based leads that we sold.
Here, we can This product is developing This product is developing very, very well and paying into customer and agent satisfaction. And therefore, we also decided put a bit more focus and also a little
bit more
capital allocation under this product as it pays out in the next year. With the rest of the question, which is more of a strategic nature, I will hand over to Toby.
Yes. So on the exact split we're getting from a particular commission, we've been trading upwards. It's probably due to a fact that agents are still facing very positive environment in terms of total price of a property that is sold. We're seeing an upward trend and the scarcity value. And these really forms a group of real estate agents now that are highly familiar with the product.
They do know that these leads that we provide are charitable within 6 or 9 or 12 months maximum and this is how we price it. So there's a different price depending on how hot the heat is and what the expected turnaround time is. Think of it as the following way, Adam, that there's instances where we are well maturing across the 40% share of the commission that we are taking, in some instances even slightly above. That's where we're trending. Now I would not count on ultimately reaching out to pushing this too far over the 50% mark, but we feel comfortable where we are right now and it's about increasing the volume rather than increasing the total pricing.
Hope this helps.
And just one follow-up.
Is all of the retailer lead engine revenue that you're generating coming from Immovacal 24? Or are we also now got Scout original products that are contributing to the lead engine revenue as well?
No, there's a split from the traditional real lead engine revenues that are stemming from the IMO-twenty 4 traditional world, so to say. And then there's the IMO for CAL24 world, which is really focused on turning that into a commission based share price. And that as Dirk pointed out is call it €2,500,000 to north of €2,500,000 for the past quarter and the rest was from the traditional long run of IMO's Couch 24 wheeler lead engine business.
Great. Thanks. That's so much. It's really helpful.
Thank you, Adam.
And we have a question from William Packer from Exane.
Hi there. Thanks for taking my questions and apologies if you already covered it. I joined the call late. My first question would be could you update us on the cyclical momentum of the Business Real Estate division? How the underlying market of commercial and new home developers are doing?
Just give us a flavor. Clearly, you've highlighted the revenue trends will be a bit weaker, but as we exit the latest lockdowns, it'd be interesting to see how things have developed there. And the second question was, it sounds like you've done a pretty good job adjusting your revenue model for private listings, whereby although paper advertising fees are down, you're compensating for that through other new products. Could you just kind of update us what those key products are? What's doing well?
How underlying private listings trends are going? Thank you.
Hi, Will. It's Toby. Thank you for your questions. So on the business real estate development there, I think there's a couple of things we can mention with you. It's still very mixed picture here due to the COVID situation.
As you probably know, up until recently, Germany was still in full lockdown. So it's opening up now as we see vaccination process across the board. In terms of hardest sectors, it's certainly the retail restaurant and hotel sectors which are currently still being supported by some sort of rent deferrals and assisted payments from the landlords and their counterparties. For office space, we see still a relatively stable trend. We even saw some prices increasing last year and that trend is stable throughout 2021 so far.
But due to the mix outlook for the commercial real estate market, we as you saw, we expect low single digit revenue growth for the Business Real Estate segment for 2021. There is first attempt of new offerings and new product offerings in terms of sub renting and subleasing and so forth and cutting it into smaller pieces as you did. But it's fairly early still to give you a trend and to share mature trend with you. So what are we doing about this? We've also focused on what we can do in terms of product and we are co reacting with some new product initiatives such as memberships for commercial agents addressing that and also pushing a little bit more focus on some of the new markets that we see such as our property circle offerings.
So that's pretty much the mix we see in the business we have listed. And the other question I would hand over to Dirk.
Hi, Will. Yes, on your PBA question and consumer growth, we commented on this earlier in the presentation. We saw consumer revenues going up 28%, which translated in total to
a
2.5% growth on the total consumer segment. Now that splits up into roughly €20,000,000 revenues in the Q1 and more than 50% of those revenues are now coming from the consumer products, which is landlord, which is tenant plus and the homebuy plus product that we're having.
Thanks very much.
And we'll take our next question from Erik Karlsson from KPU.
Hi, this is Erik Karlsson from KPU Capital. First of all, thanks for doing a phenomenal job for shareholders. I wanted to ask you about the balance sheet. You still have a very balanced sheet despite having returned a lot of cash to shareholders. What type of balance sheet structure do you think is ideal for you to have?
I'm not talking next month or quarter, but in 1 or 2 years' time.
Thanks. I'll take the question, Eric. Think you're more referring to the leverage structure that we would that we are investing rather than the pure balance sheet structure. In this case, I commented earlier on that we are entering discussions with our banks in this summer. We have also on a second note asked our shareholders in the AGM and will ask our shareholders in the AGM to give us another 10% of capital that we can buy back.
And lastly, we are looking at the M and A market. And I think the sum of all of that, we will come back to our investors by latest our Capital Markets Day in November or December. We will revert to you on that. But I think that at the moment with the amount of cash on our balance sheet, I would agree with you and the underlying tone in your question that the capital structure is inefficient and the business can carry more leverage.
Okay, fantastic. Thank you so much for that.
We'll take our next question from Marius Furberg from Warburg Research.
Yes. Just one left for me. With regards to the acquisition of Amity, do you expect synergies with the real toll lead engine as well in terms of the thermal pipeline? Or are those 2 completely separate things and do not interact with each other?
Maybe I'll start off and Toby has on the strategic element of that. I mean, as we presented Mario, the Famicity product is pure rent product. And we are aware of the fact that with other comparables in other countries, the rental market in Germany is pretty high. And you saw that it's about 5 times in the year on a number of transactions than compared to the sale market. So for us, it's really important to get the synergies from the journey.
So any landlord that is putting up a new listing for a classified that he wants to a classified listing that he wants to rent out in his apartment or her apartment, we want to translate that into a long term relationship. And that long term relationship is provided and as a German, you know that there's a lot of headache around it. When you need to do additional cost, turning that back to the landlord and everything else that you need to do around administrating a real estate in Germany. And that is taken fully away from the landlord into a cloud based service and that cloud based service is for me to deliver and that helps us as ImmoScout to improve the customer relationship that we have with landlord from a one time relationship to a multi year relationship. Sorry, Pavi.
Yes. So it's relatively fresh. So let's add some more color. As Dirk pointed out, if you want to play in the real estate arena in Germany, you got to be present with a really powerful offering in the rental space. And to be clear, we did not have that in IMOZCOR24.
We were great in the search and discovery process, but then it lacked. In terms of value proposition. We're closing that gap strategically now because RMB 3,200,000 rental transactions per year versus 600,000 sales transactions per year. That is a lot where you want to play and the best way to get to homeowners is to get to the landlords that actually own those homes and helping them to register their units to then establish a relationship with their tenants. And that's exactly why we're so excited about this acquisition.
And we do have the playbook. We know how to integrate it. We know how to take the traffic and take it to the next level. So this is a really, really long term play, but it's the right thing and strategically it's 100% right in our wheelhouse. So you'll definitely hear more about that as we are integrating the journey and as we also then getting into a position how to monetize the relationships between the landlords and
Okay. And we will take our last question as a follow-up from Craig Abbott from Kepler Cheuvreux.
Yes. Thanks again. Yes, just quickly, you did a great job in the Q1 increasing the number of agent partners again in the residential real estate. And I just wondered if you could give us a feel for how significant do you still see your growth potential there as being looking out over the next couple of years? Thank you.
Hey, Craig, it's let me give it a try, it's Toby. Yes, we are very happy about that because it's a reflection of despite the uncertainty in the market and the clear headwinds we have, we are very proud that we could add new customers. However, we should not count on huge customer growth numbers going forward. We do have a penetration rate that's pretty high. We are pretty well known as we know as a brand and we have good sales force working the market.
So it's not a core pillar to assume that we can grow our customer numbers quarter by quarter in a meaningful way. However, I think what that shows is that this company and the entire organization is customer centric and is customer focused. And this is what makes us happy because we've seen an improvement there across the board. We're tracking KPIs in a much more granular way. And this is a great barometer also in times when it gets tough.
And we have tough times out there. Again, if you are an agency, you need to think about where to spend money and where to get a mandate from. We do have the right tools, but we also have the right culture, the right platform to engage with them. And so long story short, we are proud of it, but that's not the core pillar of growth in the future. It's about monetizing these relationships in the right way long term and making sure that they're really happy with what we bring to the table.
Okay. And if I could maybe just one follow-up, getting back to sort of the thought process on the margin progression and again ignoring Fermita DE, but you mentioned that these new real estate agent generators, excuse me, customers, many of them will first convert into commission sharing revenue over the next 9 to 12 months. And that's due to the other factors like the rollout of the COVID holidays and so forth as your ARPU growth should start to accelerate in the second half of year too. So all else being equal, moving into 2022, should we expect then the margin progression then to pick back up a couple of basis points versus this year? Thank you.
Thanks, Craig. I think in due course, we will give you an update on our margin and revenue projections for 2020. But as I said on earlier occasions, this business is a digital business. This business is able to scale significantly. And therefore, we rather see margin going up than down.
Having said that, taking opportunities in the market like now getting landlords, real estate agents and home sellers on board in order to get them together in our market and investing into that, I think is the right strategy going forward. And therefore, I think we have a strong margin growth potential, but we also have a strong growth potential on most of our revenue lines, and we would pay into that in 2022 as well.
And we have no further questions in the queue. I would like to turn the conference back over to Ursula Ghat for any concluding remarks.
Yes. Thank you all very much for joining the call. If there are any further questions, don't hesitate to e mail or call me. And let's talk in the coming weeks. Thank you and bye bye.
Once again, ladies and gentlemen, that does conclude today's conference. We appreciate your participation today.