Welcome, everyone, to Scout24's 2020 Final 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. You can find today's presentation slides on our website under Financial Reports and Presentations. There you can also find our 2020 Annual Report and our Sustainability Report, which were both published today under the common theme Focus on What Matters. 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 Safe Harbor Statements on page two, and let's have a look at today's agenda on page three.
Tobias will kick off the presentation in a second, talking about how we are delivering on our strategy. Dirk will then cover the 2020 financials, our capital return roadmap, and dividend proposition. Together, they will conclude the presentation with a look into 2021. As usual, we will then have time for your questions. Tobi, the floor is yours.
Thank you, Ursula, and welcome, everyone. Let me start on page five with a recap of 2020. Business-wise, after a strong Q1 and two quarters quite shaken by COVID-19, Q4 2020 turned out very positively. A testament to our resilient business model. Actually, Q4 was the strongest revenue quarter ever in the history of ImmoScout24. This was achieved on the back of real estate market activity that has quickly adapted to the pandemic situation. As of today, we are seeing quite normalized listings and traffic data, at least on the residential real estate side. W hile we are still in a so-called lockdown situation in Germany, we remain optimistic that in H2, we will return to more normal business and private lives. We have also based our 2021 outlook on this assumption.
More importantly, our outlook is based on the progress we made in terms of strategy in 2020. Throughout the year, we delivered on our ecosystem strategy and made significant progress with key product and market initiatives while we did the right thing for our customers. Concerning the agents on this slide, let me highlight three things on which I will elaborate further later in the presentation: Our enhanced mandate acquisition offer to agents, the improved subscription packages, and the accelerated migration path, and the proactive integration of FlowFact into our agent product world. For homeowners, the rental journey is getting more and more digitized, which is very useful in the current situation. Since we implemented it in March last year, this private user group profits from our free-to-list offer. At the same time, we are generating additional seller leads.
With immoverkauf24, we are nurturing certain leads until they are qualified to be passed on to an agent. The last user group in our three-sided marketplace, the seekers, saw improvements in our consumer products, Tenant Plus and Buyer Plus, in 2020. We are also serving them with improved digital features like online viewings and a reworked Price Atlas. All in all, we used 2020, the first year with a sole focus on ImmoScout24, to innovate and accelerate product rollouts in our market, asking for greater digitization and convenience. W e made a big step forward in our goal to move closer to the transaction, but more on that later. Let me first run through our key performance metrics for 2020 on page six. These numbers show that despite unprecedented challenges from COVID-19, our company and the German real estate market have proven to be resilient.
Our group revenues increased by 1.2%, with our ordinary operating EBITDA margin slightly increasing to 60%. Without the immoverkauf24 acquisition, we would have shown stable revenues year-on-year, and the margin would have been slightly higher. We are very pleased with the 5% customer growth and the 2.5% residential partner ARPU increase. The latter reflects both some list price increases, which we resumed in Q4, and an additional value proposition such as the Realtor Lead Engine. On listings, we are down by 4% versus 2019. As I explained on several occasions before, besides COVID-19, this is mainly due to a general trend of a declining number of sales transactions. Another effect was the reduced standing time of listings. 13.8 million unique users per month on average for 2020, growing at 2%, underscores our highly relevant supply of listings on our marketplace, even during COVID-19 times.
According to our analysis, this growth would even be higher if the data collection wasn't influenced by the recent updates on cookie consent. Sessions grew by 7% year-on-year to 101.4 million visits per month. Here, the same data collection issue applies. In summary, all numbers on this slide underpin our distinct and intact market leadership position in Germany. Let us now take a closer look at the very solid agent and ARPU development on page seven. Already in Q3, we had cracked the 20,000 total customers mark. The number of residential real estate partners grew by 5.3% year-on-year to 17,213 partners at the end of 2020. ARPU for the Q4 was at EUR 717 back at the Q4 2019 level, but not yet at the high level of EUR 729 we had achieved in Q1 2020.
Looking at the 12-month period, residential real estate ARPU increased by 2.5% to 716 EUR. The number of business real estate partners increased slightly by 1% to 2,800 as of December 31, 2020. The business partner ARPU for the Q4 was at 1,801 EUR and 1,754 EUR for the full-year perspective. Here, we are seeing a stronger COVID-19 impact. Both numbers were slightly below previous year's levels. The most important takeaway here is we came out of 2020 with a strengthened relationship with our professional customers. We supported them promptly when the effects of COVID-19 came to light, and we demonstrated that they are most important to a functioning ecosystem with our [fall] marketing campaign. Speaking of the real estate ecosystem, let's turn to page eight. Most of the revenue we generate with our agent customers is included in the orange portion of the graph.
This represents the recurring subscription business with them, with a main focus on objects marketing and [bus] listings. Adding the pay-per-ad business to that brings revenues, which are directly linked to listings, to about 74%. Five years ago, this proportion was still much higher at 85%. At that time, as a pure classifieds player, we were also fully monetizing private listings. Nowadays, the balance are other ecosystem revenues coming from high-growth complementary products, which allows us to monetize consumers or leads. This clearly moves us closer to the real estate transaction, get more data, generate more transparency. This, in turn, is used to develop additional products and features as part of our monetization strategy. The development of leads revenues depicted in amber on this slide is clearly driven by our Realtor Lead Engine product, the revenues of which increased by 67% year-on-year.
Another example for a high-growth product is the Tenant Plus consumer subscription. Here, revenues profited from the free-to-list initiative and grew by 30% year-on-year. With this slide, we wanted to show you that our transition towards full transaction monetization is well underway. At the same time, our revenue structure is gaining both in quality and continuity, and we are doing our homework to foster deeper relationships with our customers. Let's now take a look at the market applicable to our ecosystem strategy described on page nine. As mentioned before, while we are experiencing a decreasing number of real estate transactions, the transaction value in Germany continues to increase. For 2020, it is estimated at EUR 280 billion. Out of that, the residential real estate market alone accounts for up to EUR 215 billion. Real estate agents operating in this growing market generate their revenues from commissions.
The commission pool is estimated at approximately EUR 8.5 billion or even higher, as this number relates to 2017. According to a survey we conducted in 2019, we assume that 12% of an agent's revenue is spent on marketing. This brings us to roughly EUR 1 billion, of which an increasing proportion, we currently assume around EUR 700 million, is used for online marketing. With agents more and more recognizing the needs and advantages of digital farming, we now assume a 55-45 split between objects marketing and mandate acquisition, resulting in an addressable market of EUR 400 million and EUR 300 million, respectively. Let us first take a look at how we navigate the objects marketing piece with our core agent subscription business.
Then, I would like to talk about how we are increasing our share of wallet within the mandate acquisition term while at the same time helping our customers to improve their business. Talking about business improvements, I will quickly touch on our FlowFact CRM offering for agents. Last but not least, I will come to the rent journey and additional revenue streams resulting from our consumer product here. As you know, we introduced our new membership product world in 2019. The aim is to offer our residential sales agent population optimal and flexible solutions to market their inventory. The higher membership translates into a more visible listing and increases the agent's brand. The acquisition edition offers the greatest acquisition power. Page 10 clearly illustrates how we are progressing in migrating our agents to the new memberships.
While in October 2019, all customers were still in a legacy product world, one year later, in October 2020, 35% had already migrated into the new world. In December 2020, we already stood at 45%, and now, as of the end of February, we have migrated over 60%. The acceleration stems from auto- migrations, which we started in December [2020]. As previously shared, we plan to have completed the migration at the end of H1. T he upgrades have taken up speed again. More and more customers are moving up the ladder into the Image and Acquisition Edition. And with this new mix, the blended ARPU over all memberships is increasing. Please note that we are only talking memberships ARPU here, without on- top product and without Realtor Lead Engine.
This blended ARPU increase is due to the COVID-19 situation and related discount schemes stemming from 2020, with 3% quite moderate and therefore leaves us with a comfortable headroom for further ARPU rises. This membership model represents an important pillar of our growth strategy. With the corresponding rate card system, which we plan to publish at the end of 2021, we provide a fair and transparent price product system for our core customers. Moving on to page 11, let's get to the mandate acquisition piece of our addressable market. Our goal to move closer to the real estate transaction is at the heart of our ecosystem strategy. Over the last years, we have invested a significant amount of money into making this goal happen. The development of the Homeowner Hub and the recent acquisition of immoverkauf24 are good examples of this strategy.
They enable us to develop a direct and meaningful relationship with homeowners. We assume that there's a total of around 19 million private homeowners in Germany, around one million of which visit our marketplace every month. Half a million homeowners have already registered to our Homeowner Hub as of the end of December 2020. This is the most important source for our Lead Engine product, which allows agents to source mandates digitally. With this, we want to be perceived as a business partner rather than a cost center by the agent. We help them as a partner to conduct future business successfully. This is a very meaningful shift from a few years ago, where the discussion used to be around the pricing for listings on our platform, and this is at the heart of our strategy.
Last year, we helped more partners than ever before at an unprecedented level to generate more business than ever before. Let me repeat that. In the toughest year, we delivered the highest value add to our customers. Let's have a look at the numbers. In 2020, we handed over approximately 73,000 leads to our agents, generating EUR 17.5 million of Lead Engine revenues, 900 of these leads were commission share leads. This gives you an idea of what we mean by moving closer to the transaction, and when considering the total sale transaction number of 626,000 per year in Germany, you also get an idea of the growth potential, which is still ahead of us. Moving to page 12, an efficient CRM tool also supports the successful business of an agent.
As consumers and the industry become more digitized, the agent's ability to conduct their business in a more digitized and personalized way becomes mission-critical. With a powerful CRM tool as part of our offering, we will be able to increase our customers' business effectiveness. This will help drive customer stickiness and our recurring revenue base. In addition, we can push digital sales. Therefore, we decided to further invest into our software company, FlowFact, and to consider it key to our ecosystem strategy. With its new cloud-based product world, FlowFact now offers the most modern SaaS CRM solution in the German market. As of today, already 23% of all FlowFact seats have migrated into the cloud solution from the legacy on-premise solution. T he migration is continuing as we speak.
As a next step, we are now planning to replace the ScoutManager uploading system by FlowFact, which would then create a significant critical mass. Currently, around 44% of ImmoScout24 listings are uploaded by the ScoutManager and 10% by FlowFact. Combining these would bring us to about 54% of uploads handled by FlowFact. This alone would make FlowFact the clear number one. As already explained during the analyst day, we will use FlowFact like a wedge. Owning this CRM tool has various strategic advantages. Let's now move from the sale journey to the rent journey. On page 13, I want to show you how, in addition to the agents term, we are managing to move deeper into the consumer term. We assume around 3.2 million rent transactions are happening in Germany every year.
This number would probably be much higher if it wasn't for the lack of supply, especially in the top German cities. At the end of February, we saw 166,500 rent listings on ImmoScout24 platform. This is only a snapshot at a specific moment. Some listings are removed from the platform within minutes due to the constrained market situation. Those listings could be viewed and searched by 117,500 Tenant Plus members at that point in time. Rent seekers have booked the product for a duration of two, six, or 12 months, respectively. With our free-to-list offer introduced last year, we saw a significant uptake of consumer subscriptions as the first 48 hours of the free listings are exclusively shared with TenantPlus subscribers. We generated total revenues of EUR 39 million with this high-growth product in 2020. This represents an increase of 30% year-on-year.
With these meaningful revenue growth numbers resulting from a clear strategic approach, I would now like to hand it over to Dirk.
Thank you, Tobi, and a warm welcome also from my side. Let's move to page 15. Tobi already showed you our key financials at group level. This slide presents the segment view. The residential real estate segment has been the most resilient in the COVID-19 crisis, with a year-on-year revenue increase of 3.5%, corresponding to EUR 253.4 million. This growth was mainly driven by the revenues from our professional customers, most of which are recurring revenues. They were up by a strong 6.4% and include EUR 4.3 million of immoverkauf24 revenues, which are allocated to the Realtor Lead Engine revenues. Revenues from consumers decreased by 2.7% in 2020. This decline is due to foregone revenues resulting from the free listing offer.
A large part of these could be compensated by the strongly growing consumer subscription revenues. The ordinary operating EBITDA margin of the residential real estate segment remained stable at 63.2%. The business real estate segment revenue of EUR 69.1 million in 2020 came in roughly at previous year's level on the back of a softer macro environment. The business real estate margin increased to 71.2%. The media and other segment revenues decreased by 12.1% to EUR 31 million. The segment was mainly impacted by an overall decreasing ad sales market, which was accelerated by COVID-19. FlowFact recorded declining revenues due to the ongoing migration to the cloud-based product world. ImmoScout24 Austria showed above-average growth of more than 11% despite the COVID-19 crisis. The ordinary operating EBITDA margin of the media and other segment decreased slightly to 38.7%.
All segments combined, we achieved a revenue growth of 1.1% to EUR 353.5 million and thus fully met our annual guidance. Q4 turned out as the strongest revenue quarter ever in the history of ImmoScout24, with EUR 91.1 million of revenue. The ordinary operating EBITDA margin for all segments combined reached 62.6%, in line with our guidance, and slightly exceeded the previous year's level. The Q4 ImmoScout24 ordinary operating margin was at 61.7%. Turning to page 16, let us go through the main ordinary operating items affecting our margin development. Own work capitalized increased significantly by 57.1% year-on-year to EUR 21.9 million. This is due to our various and accelerated product innovation initiatives Tobi has mentioned before. The remaining ordinary operating effects rose by 5.9% year-on-year to EUR 163.5 million in 2020, outpacing revenue.
This was largely driven by increased IT cost and other operating costs. The growth in IT cost by 20.9% is mainly due to the continued deployment of cloud-based platform and software solutions. License costs now make up more than 50% of that. The 18.6% increase in other operating cost is, on the one hand, due to the increased external labor for the product development. On the other hand, this stems from higher selling costs in connection with the increased marketing of the consumer products and the Realtor Lead Engine. COVID-19-related bad debt provision also contributed slightly to the rising other operating expenses. Marketing expenses increased by 2.2%. This reflects the marketing campaign carried out in the Q3 and increased performance marketing activities in [H2] 2020. While the operating expenses have increased overall, we saved cost where possible short-term with COVID-19 and additionally leveraged structural cost efficiencies.
This brings us to the ordinary operating EBITDA of EUR 212.3 million for the financial year 2020. This EBITDA level at a margin of 60% reflects our refocus on ImmoScout24 and a more diversified revenue base with a stronger focus on high-growth consumer and lead products. On page 17, you see the items below the ordinary operating EBITDA line. Non-operating cost decreased sharply by 69.1% to EUR 14 million in 2020. Main reasons for this were lower share-based compensation, lower M&A cost, and lower reorganization cost after the successful completion of the AutoScout24 transaction. The strong reduction in share-based compensation is, on the one hand, due to the Scout share price performance, with a lower 2020 share price increase compared to 2019. On the other hand, the number of long-term incentive program shares has decreased in 2020 as a result of the completion of the AutoScout24 transaction.
As a result, the reported EBITDA increased by 21.1% to EUR 198.3 million in 2020. Worth mentioning, with the items below, the reported EBITDA is the financial result, which was improved by 68%. This was driven by lower interest expenses after debt repayments and by positive effects from investments in special funds. The net income amounted to EUR 102.4 million, an increase of 61.3% versus 2019. This translates into a basic EPS of EUR 1, which is calculated with an average number of 102.1 million shares without treasury shares. The 2020 adjusted earnings per share, which you can see on the next slide 18, include three months of AutoScout24, corresponding to the closing of the transaction in Q1 2020.
The adjustments mainly relate to non-operating effects and special effects in connection with the AutoScout24 transaction, such as the finance income from the special securities fund, which we have set up to invest excess cash. The adjusted net income builds the basis for our 2020 dividend proposal. Putting ourselves at the 50% payout ratio, which is at the upper end of the dividend policy range, leads us to a dividend per share of EUR 0.70. This corresponds to a total payout of EUR 68.5 million that the supervisory board and the management board will be proposing at this year's annual general meeting. Please be aware that the precise amount of the dividend per share depends on the planned capital reduction and share buybacks effected before the annual general meeting.
Those form part of our capital return roadmap, which we have communicated in connection with the AutoScout24 transaction to our shareholders. The key pillar of our capital return roadmap is the up to EUR 1 billion capital decrease transaction, which, now that we have closed our 2020 accounts, is right around the corner. You are already familiar with the next slide 19, which we have recently shown on several occasions. There we have communicated that the capital decrease transaction will happen after the publication of our fiscal year 2020 results and before our 2021 annual general meeting. Assuming that US investors are on this call, I regret that I cannot discuss the transaction further here. Reason being that the offer will only be made in accordance with German law and will not be made in the United States or by any US jurisdictional means.
To non-US investors, I recommend our investor relations website, where we inform you about the transaction and have included some frequently asked questions and answers under Repurchase Offer 2021. After completion of the transaction, the next milestone of our capital return roadmap will be an additional up to EUR 200 million share buyback and, as mentioned before, our 2020 dividend payment. Before I hand it back to Tobi, let me give you a short update on how we have been trading so far in 2021. Listings at 390,000 are up 1% versus end of December 2020 and slightly down versus prior year. This decrease is probably a result of three effects. First, COVID-19, which has only started in March 2020. Second, transition to the newly enacted Bestellerprinzip. T hird, the general market trend of reduced transactions in Germany. However, this listing effect does not result in a financial effect.
Revenues and earnings for the first two months of the year are even slightly above our expectations. We therefore feel comfortable with a group outlook for the year of a mid-single-digit percentage revenue growth and a near-stable ordinary operating EBITDA margin. Now let's have a look at traffic KPIs, monthly users and sessions in February [2020]. We see them almost at the level of last year, which was still pre-Corona, and considering the data collection impact Tobi mentioned earlier, our data suggests a significantly higher demand year-on-year. This is very positive news despite the recent COVID-19 third- wave discussions and despite the uncertain development of the commercial real estate market. The group revenue outlook I just gave you confirms the segment forecast made at the analyst day in December [2020], and which you can see again on page 21.
For our largest segment, residential real estate, we assume a mid- to high-single-digit percentage growth mainly on the back of continued customer growth and ARPU increases, as well as a strongly growing realtor lead and consumer business. Although we have several promising product initiatives underway in the business real estate segment, this needs to be put into perspective against a market environment torn by COVID-19. We therefore only expect a slight growth for this segment. The media and other segment is forecasted to decline or remain flat. The third-party advertising business is still suffering due to COVID-19, and we are actively reducing advertising inventory in line with our shift towards an in-house agency. FlowFact will see decreasing revenues due to the cloud migration of its customers, while ImmoScout24 Austria is expected to continue its strong growth despite COVID-19.
I would now hand it back to Tobi for some concluding remarks.
Thank you, Dirk. Let me sum it up on page 22. In 2020, despite the challenging environment, we have never lost sight of our strategic objectives. We used the year to our advantage. We increased our customer base and created more value for our agents than ever. By doing so, we proved that we are no longer a platform but a business enabler within the real estate ecosystem. We used the accelerated digitization trend to bring our customers closer to the transaction, and consumers and seekers are being enabled to proactively participate. We strengthened our internal organization and built out our three journeys: Sale, rent, and devcom. On the back of this, we accelerated key product and market initiatives, which create strong tailwinds for 2021. We made significant progress with integrating immoverkauf24 and FlowFact into our organization.
Not to forget, our priorities for capital allocation remain unchanged. We aim to reinvest into the business to continue our long-term growth trajectory. We also continue to return capital to shareholders, and we remain open to suitable M&A opportunities in line with our strategy. In summary, we are very confident that what we have achieved in 2020 will translate into attractive growth in 2021 and beyond. Thank you. Operator, let's open the floor for questions.
Thank you. Ladies and gentlemen, if you would like to ask a question over the phone at this time, please signal by pressing star one on your telephone keypad. Please note if you're using a speakerphone, just to make sure your mute function is turned off to allow your signal to reach our equipment.
Once again, that's star one to ask a question at this time, and we'll pause for just a moment to allow everyone an opportunity to signal for said questions. We'll now move to our first question over the phone, which will come from William Packer from Exane. Please go ahead. Your line is now open.
Hi Tobias, hi Dirk. Thanks for taking my questions. Three for me, please. Thank you for the update on the vendor lead revenue opportunity, and now you've had some time to integrate immoverkauf24. Could you just talk in a bit more detail about how you're planning to monetize the wider space going forward? Is it right to think of it as a blend of some commission sharing and some ARPA-based subscription fees? How should we see that developing going forward? That's the first question.
Secondly, you've guided for margin flat year-on-year despite mid-single-digit revenue growth. Should we think of that as reflecting the mix of growth this year, and then in the future we return to the typical margin expansion that you've delivered historically? F inally, could you talk us through the phasing of growth for the real estate subscription segment this year? Am I right to think that it will be flattish in H1 as the 2020 price freezes flow through and then back to healthy growth in the second half of the year? Thanks.
Thank you, Will. This is Tobi. I'll start off with the first one on the vendor lead strategy.
As we had pointed out, we integrated immoverkauf24, and we have some great experience and further best practice on where it's worth and what it takes to really go into the commission sharing model and where it's not applicable. A s we had shared previously, we will move towards more commission-based sharing models with those agents that feel comfortable where we have a more intimate relationship and where we also have more history in terms of transacting with them. By and large, it will be a healthy mix between commission sharing and traditional lead fees for those leads that we are generating. Y es, you're probably right in assuming that we will increase the share of the commission sharing part over the course of 2021. I'll hand over the other questions to Dirk.
Yeah, that's a nice handover. Will, thank you very much for your question.
Handing over to the phasing of the real estate growth. I mean, if you look at growth simply percentage-wise, you might recall that Q1 2020 was a very high growth quarter for us. That's why this will certainly not be the highest growth quarter for 2021. Q2 has been impacted by free leads we've been given away and also our initiative on free listings. While we have been able over the last two to three quarters to monetize the free listings better without selling to consumers, and we have also managed to improve on other ends of the business, we assume that Q2 growth will be overproportionate, and then certainly most of the rest of the growth will come into the [H2] 2021. Speaking about margin, you were mentioning a term saying historical margin expansion.
I would like to say here that if you do the math on immoverkauf24 and assume that they have been delivering around about EUR 4 million revenues and a negative EBITDA in 2020 in the second half, and if you deduct that, we had a margin expansion of roughly one percentage point, and we continue to optimize our structural cost, and I think we're quite successful with that. Having said that, I mean, we are pushing towards more high-growth products such as consumer subscriptions, such as the Realtor Lead Engine, and we are remonetizing the free-to-list offerings, and when we see a chance to increase relevance of Scout24 in the German real estate market, when we see a chance to test new products and increase customer lifetime value, we will take that chance, but nonetheless, our guidance on the margin remains at around 2020 levels.
Many thanks for the color. Appreciate it .
Ladies and gentlemen, if you find that your question has been answered, you may remove yourself from the queue at any stage by pressing star two. We'll now move on to our next questioner, which is Adam Berlin from UBS. Please go ahead. Your line is now open.
Hi, good afternoon, Tobi and Dirk. Thanks for taking the questions. Three from me. The first one is about the guidance for residential revenues for 2021. Can you help us think about the difference between consumer and real estate growth? Just listening to you, it sounds like consumers are going to be impacted a bit by lower number of subscribers and some comps around the free listings. So just want to understand if they grow at the same rate or real estate grows faster than consumer this year.
The second question is about the migration process for these new models. You talked about the weighted average ARPA being EUR 6 to 9 in February [2021]. Where do you think that number goes once you finish the process at the end of the year? O nce you've finished that migration process, what happens next with then just raising the price of those thresholds and continue to upsell people. Is that the best way to think about it? T he final question was about what you said around customer numbers. You said in the real estate segment, you expect customer numbers to be positive. So I was just wondering what happened with Bestellerprinzip. Has that ended up not being as big a deal as everyone thought? A re you still able to attract new agents despite the impact of that regulation change? W hat's the impact been so far?
Thanks very much.
Hi, and thanks very much for your questions. I mean, please understand we will not comment on ARPU and ARPA growth, but I would like to point you to some developments that you see from our figures when you look at the blended ARPU. For the full year 2020, blended ARPU has ended up at EUR 716 in residential, which is + 2.5%. Y ou can assume that that is roughly the level we saw in Q4 2019. It has been going up in Q1 and then in Q2 and Q3 2020, slightly decreasing. I recall a question from Lisa Yang on the Q2 call where she was asking whether we return to our ARPU growth, and we did so, and we continue to do so.
On the impact of Bestellerprinzip versus absolute customer numbers, I think we haven't seen that, and we see customers continue to grow, and there is no impact of the Bestellerprinzip on our residential real estate customer numbers at the moment. It is quite the opposite. We see customers deciding themselves to list their real estate on our platform, and those customers that haven't done that previously. O bviously, we have done a few things right, and our reach is at full speed with the numbers Tobi has showed you. On the growth in residential consumers versus real estate agents, I mean, you can imagine that still real estate agent subscriptions are the largest part of the overall revenue.
If you look at the 2020 numbers in the residential real estate agent revenue growth, you've seen figures of 5%, 6%, 7%, and you have seen decreasing or shrinking revenue numbers on the consumer business, which simply had to do with the fact that the pay-per-ad business is for free now. We managed to substitute those revenues now with consumer subscription revenues. In total, if you look back at 2020, consumer revenues have only been reduced by around about 2%, although we have been publishing free-to-list offerings from Q2 onwards. I think that's quite a good signal when you make your models coming into 2021, where we will see growth on consumer subscription products.
Thank you very much.
Our next question now comes from Lisa Yang from Goldman Sachs. Please go ahead. Your line is now open.
Good afternoon, Tobias and Dirk.
Thanks for taking my question. I had no doubt you will return to ARPU growth, by the way. My first question actually is on ARPU growth. I just want to double-check. W hen you talk about the 3% blended ARPU increase, is that just the increase related to just the migration? C ould you give us a bit more color in terms of what are you doing in terms of rate card increase so far, and how do you expect that rate card increase to evolve for the rest of the year, and how much ARPU growth you are seeing from then add-on products and your lead engine products? A ny sort of color in terms of the mix of the contribution from those different elements to ARPU growth would be really helpful. That's the first question.
The second one is on the trend you're seeing so far in January [2021] and February [2021]. You're saying it's slightly ahead of expectations. Should we expect basically Q1 to be positive or slightly positive despite the comp based on what you're seeing so far? T he third question is about your overall sort of balance sheet. Once you complete the tender offer and the EUR 200 million buyback you talked about and the dividend payment, how do you think about the leverage target? Are you thinking of going back to 3.5x target as early as maybe end of this year or next year? Thank you.
Thank you very much, Lisa. Let me start. Let's start with your last question, which is leverage target and our guidance on that. Certainly, we all agree that we have an inefficient capital structure at the moment.
That's why we are returning cash to our investors with the tender offer and with consecutive share buybacks. Secondly, we will start negotiations with our credit and debt- providing banks during the summer this year, and once we finish that, I will give a bit more color on leverage, but the numbers you mentioned represent the previous guidance, and at the moment, I don't see a reason to go away from that, but we will keep you updated. Yes, trading into—t hat's on your second question— trading into 2021 has started according to our plans, slightly above. Let's see how this will develop over the course of [H1] and the [H2] .
You know that our guidance is relying on specialty growth in the [H2] , and therefore, I wouldn't give more color on that as we sort of basically repeated what we said in December [2020] at the Analyst Day for the segment and now for the group. I would also like to remind you that mid-single-digit growth is somewhere between 3% and 7%, and we feel comfortable with what we see in the consensus at the moment. On ARPU growth, I will hand over to Tobi later on, but the comment I just made, the 3% was core ARPU growth on the subscription/memberships. Tobi, you want to give some more color on the rate card migration ARPU, and I'll share it with you.
Sure. Lisa, thank you for your question.
I think there's a couple of points to make and also come back to some of the prior questions you asked previously. We are fully on track with the migration. That's the good news. I think there were some questions in the past about percentages and so forth. I t's going fairly well despite or in spite of COVID circumstances. Number two, yes, we do have a stack of various price drivers. We do have the migration as a starting point, but then we have obviously a very clear set of OTP sales that come on top, which are enhancing the memberships. W e spent quite a bit of effort on educating the audience and our customers on what these OTP products can do and how it could drive, particularly in the mandate acquisition environment going forward.
We also have the regular price increase as part of a rate card going forward, which is part of our [Ts&Cs], which we implemented, which was quite a bit of heavy lifting that allows us to increase based on any rate card up to 5% per year in the future. So we have different levers depending on what the circumstances are with those particular customers to drive our growth in the future, and that's why we think pretty positively about our growth in the future.
Okay. J ust to double-check, so you think 3% core ARPU growth on the subscription, but I guess you're also raising the rate card prices on, I guess, the customers where the contract is up for renewal. Is that correct?
In my answer, I was referring to a comment I was making earlier on Adam Berlin's question around the ARPU, the 3%, and I was confirming that this was in 2020, referring back to the core membership ARPU versus 2019. On the growth, I mean, Tobi has commented that, and that's what we see at the moment with the rate card migrations and increases, and your number doesn't seem totally out of line here.
Okay. Thank you.
We'll now move to our next question, which comes from Nizla Naizer from Deutsche Bank London. Please go ahead. Your line is open.
Great. Thank you very much. I have two questions from my end. Firstly, you've mentioned that consumer subscription revenue is low margin at the moment. Just trying to understand, is this because you still have to keep going after new subscribers?
A t some point, could this revenue stream also become a similar margin business to the private listings business that you no longer generate? S ome comparison as to the margins there would be great. S econdly, I'd like to take a step back. W hen you look at 2020, it looks like you've really transformed the business to monetize most parts of this real estate value chain. L ooking forward, if you look at 2022, which of these initiatives do you really expect to take off after building scale in 2021? Do you expect a meaningful acceleration in growth in 2022 from 2021 levels on the back of everything that you've done last year? So some forward-thinking color would be great. Thank you.
Thank you, Lisa.
First question, I would take, and Tobi will elaborate a bit more on the strategic implications of what we're doing at the moment into the coming financial years. Yes, you are absolutely right in your analysis. Consumer revenues are providing a positive margin at the moment. T he reason why this margin is not where a margin is, for example, for a real estate agent with a membership, is mainly the fact that we are, first of all, having cost of sales, and in this case, affiliate marketing, [SEA] marketing. Secondly, we are adding cost of sales here in collaboration with our credit rating partner, SCHUFA. T hirdly, we are following a strategy of low return on investment here because we want to improve our market position here. Th at's the reason why this is low margin at the moment.
You can be assured that this margin is improving year-on-year, quarter- on- quarter, and month- on- month as we are improving our market position with that product here in the German real estate market. I hand over to Tobi for the other part.
Thank you, Nizla. So we tried to paint a picture and provide more color on today's call as well to show you and show the audience how the different pieces are all coming together. W hat we mean by that is there is a very strategic anchor with regards to, let's say the consumer subscription business, because the consumer subscription business is something that is the starting point where we establish relationships with consumers that then have an account with us, which then serves as an entry point to take them through the journeys.
The journeys, on the other hand, are the second part of the strategic wedge, so to say, because we are enriching those journeys with functionality, with functionality that drives value to have these consumers or subscribers interact with us and engage with us. The third point is that we talk about FlowFact and the ScoutManager, which is on the customer side, something really strategic because this will be used as a transaction communication and sales hub for our customers in the future. If you want, we are creating a network where we connect with consumers as part of a journey through the accounts that they have subscribed with us.
On the other hand, we are connecting in a more engaging framework with our customers where we're simplifying the FlowFact environment, which used to be ScoutManager, to be quicker, to be faster, and to promote our products and services and provide guidance towards their efficiency of how they are conducting their business on their end. W hat is the road ahead in terms of growth? The growth ahead is we're bringing this all together as part of the network marketplace, which gets us closer to the transactio. That transaction will be a rental transaction, a sale transaction, and so forth. We are not here to share any new numbers or provide an outlook for 2022, but we want to provide more color on how we're bringing all these assets together. T his is why we're so excited about the future because this is not just PowerPoint. It's happening.
Thank you. Very helpful.
Our next question now comes from Andrew Ross from Barclays. Please go ahead. Your line is now open.
Great. Thank you. G ood afternoon, everyone. I've got three questions. The first one is on M&A. You mentioned at the end of your prepared remarks, Tobi, that you were still looking at things in line with your strategy. Maybe you can just give us an update in terms of the types of things you're looking at. I guess you've had a pretty deep firepower for quite some time, but you haven't done any kind of big deals. J ust any update there would help. Question two, could you update us on your listings share, both against Immowelt and against eBay Kleinanzeigen, both B2C and C2C, if possible?
Then the third question, and I apologize if it's stupid, but just to come back on the ARPU point for residential real estate. Did you say that you expect residential real estate ARPU to grow mid-single digits from the EUR 716 base? Or did I misunderstand that? J ust to be clear, are you saying there are three points for membership migration plus some on price plus some on vendor leads? Or have I misunderstood that? S orry if that's a silly question, but there's quite a lot of moving parts, and it's a bit confusing. Thank you.
Sure, Andrew. This is Tobi. So on M&A, the strategy obviously has not changed. We previously talked about looking into the following areas around valuation, mortgage financing, and Homeowner Hub enhancement. For the Homeowner Hub enhancement, one could argue that ImmoScout24 clearly was in that space. W e feel very comfortable there.
The second thing I would like to mention is the functionality enhancement and enrichment around the current journeys, be it rental or sale. T hat's also something that we are looking into. T he third overall and overarching theme is that we are obviously getting deeper into the value chain. Now, having said that, as you know, the markets are very heated, and finding the right targets at a value-accretive price point and being able to fully integrate them, it's not that there's hundreds out there. W e're working very closely, and we are open for business, and we think we have a very clear strategy, and we'll see what comes along our way. W e will not change our strategy. W ith that, I would hand it over with regards to some of the numbers, ARPU and listing share.
Yeah. Yeah, Andrew, thanks for the questions.
First of all, we are not too obsessed with that, so we haven't actually followed it up, but I think our listing share versus Immowelt and eBay has roughly been unchanged. We believe they are seeing the same implications from Bestellerprinzip and COVID as we're doing. As our audience has improved, that might also be a positive signal on our side on that. On your ARPU growth, your understanding was correct, as I said on previous occasions, roughly 5% up to 5% of our overall ARPU growth will come from terms and conditions price changes, and the rest will come from rate card migrations, and you're going to see that reflected in our pure membership ARPU, certainly, and then on top of that, you're going to see reflected additional opportunities like the Realtor Lead Engine and on-top products the real estate agent is buying.
So there will be an ARPU growth in the area of mid-single-digit over the course of the year.
Thanks, Dirk. Just to follow up on that last point, you're saying the price increase is anywhere up to 5%, and you've got three points from migration plus some from vendor leads. Ho w can we only get to mid-single-digit guidance overall? It sounds like it might be more high single-digit or even double-digit.
Andrew, where you're coming from, but we have discussed that at certain occasions. You know that we have our cohorts are equally distributed among the 12 months of the year, and some of the cohorts are not part of price increases until the second half of 2021. T hat technical effect we have elaborated also at the Capital Markets Day in December 2020. T hat leads me to what I just told you.
Certainly, we are seeing a good development on our rate card migration. As Tobi said, I mean, we have roughly 60% of our customers migrated. We're having good progress. We're seeing additional customers coming in, customers growing. T hat is a development we are watching very closely and very positive at the moment.
Just to add on, Andrew, what Dirk stated, it's Tobi, we would like to make sure that everyone understands that we are still in unusual times. W e navigated last year by implying a success formula that was basically, we're not treating everyone the same, but we rather have a very detailed approach depending on which customer, where you come from, what your needs are, and so forth. B road-stroke approach, treating everyone the same will not be our philosophy.
That's why we'd like to give ourselves a little bit of room in terms of playing with the different tools that we just talked about.
Perfect. That's very clear. Thank you.
Our next question will come from Remi Grisad from Société Générale. Please go ahead. Your line is now open.
Yes, good afternoon. Thank you for taking my questions. T hree for me, please. The first one on your market shares for mandate leads, it seems to be around 13% compared to 60% for sales. What part of your growth is linked to immoverkauf24 and who are your main competitors today? How do you see the market evolving for mandates, and who will you take market shares from in the future? T hen my second question is to know where you stand on your initiatives for financing and insurance. It's an important growth level, I guess.
Did you launch some repricing and new initiatives in this space or not yet? C an you please explain to me how FlowFact is different from ScoutManager, and will it increase your revenues in the short term or just enhance the possibilities for your customers? Thank you very much.
Thank you very much, Remi. This is Tobi. I'll take questions one and three. T he market share for mandate leads, as we had pointed out, we see a shift in the business that's happening. W hen we talked about the total addressable market, the shift that's happening is called digital farming. W hat used to be a rather conventional traditional farming shifts over towards online channels. W ho are our competitors?
The competitors are the traditional channels of how mandates are generated, i.e., being at the tennis club, being at the soccer club, or the traditional physical real estate agent that has a physical branch where people are popping by and basically saying, "Look, I'm thinking about potentially selling my home in six to 12 months." This is is the main traditional challenger out there. W e've seen a spike and some tailwind, obviously, through COVID. Y es, we are at the very beginning of an exciting chapter, and we think there will be further growth, but we can't give you an exact number of market share going forward.
The third question with regards to FlowFact is, think of it as ScoutManager for many, many years, was established as some sort of a hub where customers can log in and out to see what they have booked and how they can use uploads and listings on Scout. What FlowFact is, FlowFact is a modern cloud-based full and comprehensive suite of CRM tools that allows the real estate agent to completely work in his or her own workflows, track productivity efficiently, get insights from data, and be much, much closer to the real processes that they are driving. W e are comparing here an outdated administration tool to a modern, fast-charged enhancement of your activities and guidance. T hat's what it is. Dirk?
Yeah. Remi, on your second question regarding financing and insurance, M&A, to be very clear on that, we will not do M&A on insurance.
That is absolutely clear because insurance is a bit too far away from our sale and rent journey and from consumer needs when they are looking for real estate to buy or rent. Financing certainly is very close to the consumer needs when they are on our platform, and we have said that in the past. Now, we also said that we are leaning towards value-accretive M&A, and value accretion has to do with the product suite and the customer base that you can purchase when you buy a company on the one end, but it also has to do with the price you are paying for the company.
We haven't found the right formula here, to be really honest, with the companies we've been looking at, but we are making good progress on developing our own journey further here in order to add value to the brokers in Germany by selling them really enriched leads.
Thank you.
Our next question comes from Fon Udomsilpa from Royal Bank of Canada. Please go ahead. Your line is now open.
Hi. Thank you for taking my question. Just two questions from me, please. On the first one, on the ongoing membership migration, how is the current take rate to the higher membership tier compared to your original expectation? Is there any surprise there? O n the second question, given that 12% of agents already subscribe to Acquisition Edition, do you plan to limit the proportion of agents on this tier in order to maintain the level of exclusivity?
In case of higher demand, do you plan to introduce an additional tier on top of that? Thank you.
Thank you. Good question. It's Tobi. With regard to the first question, no, there are no surprises, nothing really to call out other than that migration is going pretty well despite COVID, given our fully digitized sales force and how we work in terms of customer care and customer operations. Th at's certainly on a positive note. With regards to limiting the acquisition engine, we are looking at this from different angles. It's certainly the number and the type of customers we will have there at the very end. It's then the activity that we are seeing. Again, let's remember we have more transparency given our digital tools now and our IT architecture than we used to have.
Then it's the pricing level at the end of the day on how we're going to set the new pricing into the future. T hese are the dimensions we're looking at. I wouldn't rule it out, but I would also not want to confirm that we are creating some sort of an exclusivity club at this point. We'd rather get people excited about it and show them how much we can enable them to conduct additional business because, again, this is the overarching strategy. We're moving from being perceived as pure listings and cost center into an enabling business partner. Th at's really the punchline.
That's very clear. Thank you.
We have no further questions queued up at this time. I would like to turn the conference back over to our speakers for any additional or closing remarks.
Yeah. Thank you very much for dialing in.
I think we had a very comprehensive call today. If there's anything open, don't hesitate to call me. Thank you, everybody, and talk to you soon. Bye-bye.