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 Querette. Please go ahead.
Welcome everyone to Scout24's Q1 2021 results call. My name is Ursula Querette, and I am head of investor relations at Scout24. I have Tobias Hartmann, our CEO, and Dirk Schmelzer, 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 questions. As usual, you can find today's presentation slides on our website under Financial Reports and Presentation. 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 two. Let us now turn to page three, where I hand it over to Toby.
Thank you, Ursula, and welcome everyone. Let me start on page three 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. Through our newly acquired immoverkauf24 channel, we have enabled around 390 sales transactions in Q1, where we received part of the agent commission. one year ago, this commission share business did not yet exist at Scout24.
On the revenueal side, we improved our services for home seekers to help them with successful revenue 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 Bestellerprinzip, COVID-19 with ongoing lockdown measures across Germany, and the lack of supply of real estate for sale and revenue. 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 Bestellerprinzip and COVID-19, we continued to invest into our membership edition.
Through these, we are offering an even more efficient and complete product set for our partners and ultimately help them drive transactions. To this effect, we also accelerated our Realtor Lead Engine products. These initiatives paid into our strategic agenda and our goal to build a comprehensive network marketplace, where we offer digital products along the value chains of real estate sale and revenue transactions. The development of our key performance metrics on page four 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 products. 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 revenue 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, our pool grew at only 1.1%. We are confident that this will accelerate in the H2 of the year. I already mentioned the customer growth of 4.4% and the effect COVID-19, the lack of supply, and the Bestellerprinzip have on listings, which were down 4.1%. Traffic on ImmoScout measured in sessions was up 1.8% to 107.7 million 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, this against a strong Q1 2020.
Especially the revenue growth of 5.2% 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 five, 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 editions, 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 a 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 ImmoScout24 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 TenantPlus, BuyerPlus, and Landlord Plus. They grew by 28% year-on-year to make up 14% of the total ImmoScout 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 respective marketing investments. 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 2019 over 69% in Q1 2020- 71% in Q1 2021.
At the same time, the one-off listing PPA revenues decreased from 20% in Q1 2019- 18% in Q1 2020- 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. It nicely shows you that we are developing from a pure classifieds play into a comprehensive ecosystem. This transition will be further accelerated by the acquisition of vermietet.de, which we announced yesterday. With vermietet.de, we will apply a similar playbook on the revenue side as with immoverkauf24 on the sales side. With immoverkauf24, we took the Realtor Lead Engine product to the next level. The impressive 95% revenue growth in Q1 from EUR 3.8 million- EUR 7.5 million was largely driven by immoverkauf24, contributing EUR 2.5 million towards that increase.
Similarly, vermietet.de will take the Landlord Plus product to the next level. With the listing services of Landlord Plus, the right tenants can be found. With vermietet.de, landlords will be able to comprehensively manage the entire life cycle of the tenancy. Let me give you some facts on vermietet.de. The company was founded in 2016 by Jannes Fischer, who will remain in the company as managing director. Vermietet.de is a, if not the market leading digital platform for private landlords in Germany with a few hundred thousand registered revenue 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 vermietet.de, we will substantially extend our product offering within our revenue journey.
This comes with a great advantage. We are accelerating our product development efforts in this space by approximately three 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 revenue market is key in Germany. 3.2 million revenue 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 do include immoverkauf24, but of course not yet vermietet.de.
Thank you, Toby, and a warm welcome also from my side. Toby already talked about our key financials at group level. Slide seven presents the segment view with a very positive outcome for our largest segment, residential real estate. Here, revenue increased by 8.5% to EUR 68.8 million. 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 immoverkauf24. 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 immoverkauf24. The business real estate segment revenue declined by 3.8% to EUR 17.2 million 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% to EUR 7.6 million. We are now increasingly offering advertising space as an internal agency to our core customers. FlowFact recorded declining revenues due to the ongoing shift in the payment model, while the growing business of ImmoScout24 Austria had an opposite effect.
The ordinary operating EBITDA margin of the media and other segments fell by 6.3 percentage points- 33.6%. All segments combined, we achieved a revenue growth of 5.1% to EUR 93.7 million, 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 of 61.3%. Let us now take a closer look at the customer and ARPU development on page eight. 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 H1 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 16% at the end of February. The number of business real estate partners also increased by 2% to 2,804 as of March 31st, 2021. The business partner ARPU for the Q1 was at EUR 1,758, 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 home builders increased slightly.
Turning to page nine, let us go through the main ordinary operating items affecting our margin development. Own work capitalized increased to EUR 5.6 million 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 EUR 44.3 million. This increase is mainly related to the change in revenue mix towards more transactional products. It includes the additional cost of immoverkauf24, which was not yet part of the Scout24 Group in the year before. While immoverkauf24 contributed EUR 2.5 million to our revenue in Q1, this contribution was not yet profitable.
For example, the 16.6% increase in personal cost is mainly due to the integration of immoverkauf24 employees. More full-time equivalents at ImmoScout24 and post-carve-out dyssynergies are adding to that. The growth in other operating costs by 24% 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 FlowFact. Finally, dyssynergies contributing to the rising other operating expenses. As the operating effects increased more strongly in percentage terms than revenue and own work capitalized, our ordinary operating EBITDA remained stable year-on-year at EUR 55 million, and the margin decreased by 3.1 percentage points to 58.7%. On page 10, you see the items below the ordinary operating EBITDA line.
Non-operating costs increased by 9.9%, mainly due to the higher share-based compensation. As a result, the reported EBITDA declined slightly by 0.6% to EUR 52.3 million in Q1 2021. With a year-over-year improvement in the financial result, but rising tax expenses, profit after tax from continuing operations fell by 8.2% to EUR 24.4 million in the Q1 of 2021. Based on a volume weighted average number of shares of 97.8 million, this results in a stable EPS for the continuing operations of EUR 0.25. By the way, the declining number of shares reflects the share buybacks effected 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 roadmap. The key pillar of our capital return roadmap was the up to 1 billion buyback tender transaction, which we successfully completed in April with an acceptance rate of 82%, translating into EUR 794 million of cash returned to shareholders, and a corresponding decrease of our share capital. Right after settlement of the tender transaction, we started with the up to 200 million ordinary share buyback via the stock market. As of end of last week, we already bought back over EUR 83 million with that program. Our AGM will take place on July 8th, where we will propose a dividend for 2020 in the amount of EUR 68.5 million. 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 85.2 million shares outstanding, excluding treasury shares. In relation to the proposed dividend amount, this number of shares would result in a pro forma dividend per share of EUR 0.80. Post the ongoing share buyback program and the 2020 dividend, we had around EUR 500 million undistributed AutoScout24 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. 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 operating 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 vermietet.de acquisition. With this, I hand it back over to the operator and your question.
Thank you. Ladies and gentlemen, if you would like to as a question today, please press star and then one on your touchtone phone. If you are using a speakerphone, you might have to pick up the handset or depress the mute function, so the signal can reach our equipment. Again, that is star and then one if you would like to ask a question today. Our first question comes from Craig Abbott from Kepler Cheuvreux.
Yeah. Good afternoon, everyone. Thanks for taking my questions. Just two to begin with. First of all, on Vermietet.de, I just wonder if you could provide us some sort of ballpark financial metrics. Excuse me. I saw they have 70 employees. Would sales of around EUR 10 million be realistic? If you could give us some indication of their profitability, that would be very useful. 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. Obviously it will depend on product sales mix and so forth, but if we assume between 4% sales growth and 9% sales growth, is there any kind of indication you can give us in sort of which directional thinking there? Thank you.
Hey, Craig. This is Toby. Thank you for your questions. Let me kick it off on vermietet.de. 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 perfectly fits into our journey, in this case, the rental journey. We will apply a similar playbook to what we did in sale for the sale journey, where we acquired immoverkauf24. The idea here 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 play 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, Craig. Thanks, Toby, for that one. We didn't intend to give you an update on the overall revenue and EBITDA projection, the number of EUR 10 million for the 70 employees that you mentioned for this year, certainly a bit too high. We don't see that negative EBITDA impact from the transaction. We'll give more color on that as we speak. 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. On a revenue side, don't expect too much, maybe half a million from vermietet.de this year until the end of 2021. On the EBITDA side, as I said, we will not guide this right now.
The guidance you are referring to also on EBITDA margin is mainly based on the organic development of the business. Yes, you are right in 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 a notch down, 1, 2 percentage points down from previous indications. The reason for that is twofold. First of all, we are making tremendous steps forward on our real estate product. 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 nine- 12 months. 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 PPA 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 PPA and increased our consumer revenues to cope with that. That is the reason behind our slightly lower margin guidance, and therefore, I would like to hand over to the operating team.
Thank you very much.
Okay. 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 ARPU dynamics within the residential real estate. Could you give some color on what you're seeing in terms of churn and also potentially are you seeing any trading down between the tiers, from agents that have already migrated? Perhaps any color on where you are in terms of penetration. 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. Also on the consumer revenue dynamics, was there anything in particular that changed in this quarter that drove that acceleration? Is it simply just sort of lapping comps and also just the sort of normal growth in the business?
Just wondering if there was anything specific there or sort of market related, that drove that growth? Thanks.
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 can imagine, the market is very, very tight. The question is, how do you narrow that to the best pricing? 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 apartment. That's also something. Aside from that, we can just honestly state, it's a very solid product fit and we are finessing the product around pricing and terms. That's it. Dirk?
Yeah. To add on that, I think, when you were referring to ARPU dynamics, we're still very happy, especially when you compare our ARPU to the Q4 2020. 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. We'll take the next two and a half, three 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. That also translates into low churn. Otherwise, we wouldn't be able to improve our customer base overall.
We believe that this has to do with the fact that agent satisfaction significantly improved over the last quarters, especially with rate card migration and the Acquisition Editions we put in place. We are now seeing very satisfied customers across the board, which also plays positively into a low churn.
Thank you. Yeah, my question was more on 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.
Yeah. I mean, Miriam, we had some information around that earlier, but what you can see is certainly that the bulk of our customers is now in the Image Edition. We are seeing slight improvements on the Acquisition Edition. Most of the customers that are now automatically migrated by this summer will land in the Base Edition. That overall certainly paid into an improved ARPU, right? Blended ARPU still increases, over time. We're very happy with that product and the product split we have in here.
Great. Thank you.
We'll take our next question from Adam Berlin from UBS.
Hi. Good afternoon. Just wanted to talk about the Realtor Lead Engine revenue. Two questions. The first is, can you share how much of the Realtor Lead Engine revenue you reported in Q1 came from these commission share-based transactions? You mentioned the 390 transactions in the quarter. How much of the total Realtor Lead Engine revenue comes from those, versus just more normal revenue per lead model? Secondly, can you tell us a bit more about the pricing model for the commission-based transactions? We know the typical commission's around 4%. Roughly how much of that do you get out of that house transaction for those 390. Thanks very much.
Maybe I start off with the revenue split. What I can confirm is that we have around about EUR 3 million in the Q1 of rent from commission-based leads that we are giving to real estate agents. This corresponds to what you just said, Adam Berlin, to around 350-390 overall commission-based leads that we sold. Here we can confirm, and I said that in my comments on the margin dilution in the beginning a little bit. This product is developing very well and paying into customer and agent satisfaction. Therefore, we also decided to put a bit more focus, and also a little bit more capital allocation onto this product as it pays out. With the rest of the question, which is more of a strategic nature, I will hand over to Toby.
On the exact split we're getting from a particular commission, we've been trending upwards. It's probably due to the 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 there's a scarcity value. We've really formed a group of real estate agents now that are highly familiar with the product. They do know that these leads that we are providing are turnable within six or nine or 12 months maximum, and this is how we price it. There's a different price depending on how hot the lead 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. I would not count on ultimately reaching up 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.
Just one follow-up. Is all of the Realtor Lead Engine revenue that you're generating coming from ImmoScout24, or we also now got Scout original products that are contributing to the Realtor Lead Engine revenue as well?
No, there's a split from the traditional Realtor Lead Engine revenues that are stemming from the ImmoScout24 traditional world, so to say. There's the ImmoScout24 world, which is really focused on turning that into a commission-based share price. That, as Dirk pointed out, is call it EUR 2.5 To north of EUR 2.5 Million for the past quarter, and the rest was from the traditional home run of ImmoScout24 Realtor Lead Engine business.
Great. Thanks. That's really helpful. Thank you.
Thank you, Adam.
We have a question from William Packer from Exane.
Hi there. Thanks for taking my questions. Apologies if you've 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. The second question was, it sounds like you've done a pretty good job adjusting your revenue model for private listings, whereby although pay per advertising fees are down, you're compensating for that through other new products. Could you just update us, what those key products are, what's doing well, how underlying private listings trends are going? Thank you.
Hi, William. It's Toby. Thank you for your questions. On the business real estate development there, I think there's a couple things we can mention with you. It's still a very mixed picture here due to the COVID situation. As you probably know, up until recently, Germany was still in full lockdown, 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, that trend is stable throughout 2021 so far.
Due to the mixed outlook for the commercial real estate market, 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 sub-leasing and so forth, and cutting it into smaller pieces and units. It's fairly early still to give you a trend and to share a mature trend with you. What are we doing about this? We've also focused on what we can do in terms of product, and we are collaborating 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. That's pretty much the mix we see in the business real estate.
The other question, I would hand over to Dirk.
Hi, Will. Yeah, on your PPA question and consumer growth, we commented on this earlier in the presentation. We saw consumer revenues going up by 28%, which translated in total to a 2.5% growth on the total consumer segment. That splits up into roughly EUR 20 million revenues in the Q1 , and more than 50% of those revenues are now coming from the consumer products, which is Landlord, which is TenantPlus and the BuyerPlus product that we are having.
Thanks very much.
We'll take our next question from Eric Carlson from K2.
Hi, this is Eric Carlson from K2 Capital. First of all, thanks for doing a phenomenal job for shareholders. I wanted to ask about the balance sheet. You still have a varied balance 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 one or two years' time.
Thanks. I take the question, Eric. I think you're more referring to the leverage structure that we are investing rather than the pure balance sheet structure.
Yes.
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. Lastly, we are looking at the M&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. 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.
Once again, ladies and gentlemen, if you would like to ask a question at this time, please press star and then one. We'll take our next question from Marius Fuhrberg from Warburg Research.
Yeah. Just one left from me. With regard to the acquisition of vermietet.de, do you expect synergies with the Realtor Lead Engine as well in terms of a stronger pipeline, or are those two completely separate things and do not interact with each other?
Maybe I'll start off, Tobi adds on the strategic element of that. As we presented it, Marius, the vermietet.de product is a pure rent product. We are aware of the fact that with other comparables in other countries, the rental market in Germany is pretty high. You saw that it's about 5x in the number of transactions than compared to the sale market. For us, it's really important to get the synergies from the journey. Any landlord that is putting up a new classified listing that he wants to rent out his apartment or her apartment, we want to translate that into a long-term relationship. 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 costs, turning that back to the landlord and everything else that you need to do around administrating a real estate in Germany, that is taken fully away from the landlord into a cloud-based service, and that cloud-based service is vermietet.de, and that helps us as ImmoScout24 to improve the customer relationship that we have with landlord from a one-time relationship to a multi-year relationship. Sorry, Tobias Hartmann.
Yeah. It's relatively fresh. 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. To be clear, we did not have that at ImmoScout24. We were great in the search and discovery process, but then it lacked. It lacked in terms of value proposition. We're closing that gap strategically now because 3.2 million rental transactions per year versus 600,000 sale 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. That's exactly why we're so excited about this acquisition. 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. This is a really, really long-term play, but it's the right thing, and strategically, it's 100% right in our wheelhouse. You'll definitely hear more about that as we are integrating the journeys and as we are also then getting into a position how to monetize the relationships between the landlords and.
We will take our last question as a follow-up from Craig Abbott from Kepler Cheuvreux.
Yes, thanks again. Just quickly, you did a great job in the Q1 of increasing the number of agent partners again in the residential real estate. I just wondered if you could give us a feel for how significant you still see your growth potential there as looking out over the next couple of years. Thank you.
Hey, Craig. Let me give it a try, Tobi. Yeah, we're very happy about that because it's a reflection of despite the uncertainty in the market and the clear headwinds we had, we're 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. 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. 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.
This is a great barometer also in times when it gets tough, and we have tough times out there. Again, if you are an agent, 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. 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. If I could maybe just one follow-up, just coming back to sort of the thought process on the margin progression, again, ignoring vermietet.de . 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 nine- 12 months. That's due to the other factors like the rollout of the COVID holidays and so forth, that your ARPU growth should start to accelerate in the second half of year two. 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. As I said on earlier occasions, this business is a digital business. This business is able to scale significantly, and therefore, we rather see margins 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. 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 will pay into that in 2022 as well.
Okay. Very helpful. Thank you.
Thank you, Craig.
We have no further questions in the queue. I would like to turn the conference back over to Ursula Querette for any concluding remarks.
Yes. Thank you all very much for joining the call. If there are any further questions, don't hesitate to email or call me. 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.