Good morning, ladies and gentlemen. Thank you for standing by. Welcome, and thank you for joining the conference of analyst and investor call of HomeToGo. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press star and one. Press the star key, followed by zero for operator assistance. It's been my pleasure to turn the conference over to Carsten. Please go ahead.
Thank you, Francine, and good morning, dear analysts and investors, and welcome to HomeToGo's analyst call on the majority acquisition of KMW GmbH and Super Urlaub GmbH. My name is Carsten Fricke, Senior Investor Relations Manager at HomeToGo. With me today is our Co-founder and CEO, Dr. Patrick Andrae, and our Chief Investment Director, Dr. Bodo Thielmann. As always, this call is being recorded and will be made available later today on our investor relations website. Towards the end of this call, you will have the opportunity to ask questions to management. With this, I would like to hand over to you, Patrick. Please go ahead. The floor is yours.
Thank you, Carsten. Dear analysts and investors, we are very excited to report that we have accomplished the largest transaction in HomeToGo's history. The majority acquisition in the combined business of Super Urlaub and KMW Reisen marks the entry into the thematic travel for short trips space, while further strengthening HomeToGo on both the demand and the supply side. This transaction allows us to boost our marketplace, which already offers the largest selection of vacation rentals worldwide and will further accelerate our flywheel. Basis for this acquisition is boosting customer demand, especially on the repeat side. Our booking revenues, as you might recall, from repeat customers, have increased by 50% year-over-year in 2023, and many of these bookings are coming in the main summer/winter high season.
Now, combined with these two brands, we have the opportunity to increase the frequency of touch points with our customers through offering more travel options. On the one hand, on the HomeToGo side, by adding more and new unique offers, especially for shoulder seasons or short weekend trips, but also on the other side, introducing new customers to existing inventory and vice versa for KMW and Kurzurlaub, as new customers. So let's take a closer look what that means in detail. On the demand side, we are adding not only new demand platforms, but specifically shoulder season travelers. So typically travelers wanting to travel during spring and fall or just looking for a weekend trip. And we can upsell our existing HomeToGo customers to thematic travel and hotel space for these short trips. You may ask, what is behind thematic travel?
It basically includes value-enhanced services, for instance, around dining, sports, or wellness and spa. Offering higher monetization of existing customers by combining it with accommodation. This also means that travelers regularly show lower price sensitivities given the blended offer rates. Let's continue on the supply side. We are not only adding new unique supply for our demand with this acquisition, but can also utilize our existing vacation rental inventory at some point and enhance the offering with the same thematic services. Just think of going to a vacation rental and getting a wellness offering of a nearby spa or dining included. And this we can offer through all our brands, HomeToGo, and the newly acquired brands, of course, Kurzurlaub and Kurz Mal Weg. As a consequence, we first unlock new demand for our existing HomeToGo Marketplace supply partners that wasn't accessible to them before.
Second, we unlock traveler demand for Kurz Mal Weg and Kurzurlaub suppliers with the power of the HomeToGo Group. Thinking of our HomeToGo Pro customers, our B2B segment, where we offer software and service solutions, we will have another benefit to offer, especially for our HomeToGo Doppelgänger or redistribution partners. For those that couldn't join last week's Capital Markets Day, that is our latest product launch of HomeToGo Pro. It provides technological solutions for inventory redistribution to travel brands that want to better monetize their demand. For these partners, this acquisition opens the option to leverage newly added unique supply across all our product offerings in the future. On top, this acquisition also allows us to expand our core offering to reach city travelers. This is very complementary to our worldwide largest selection of especially rural vacation rentals.
Very important to note on that, in that regard is that with this acquisition, we leverage city travel portfolio of our new subsidiaries and are, unlike others, that might bet mostly on private hosts in cities, much, much less exposed to changes in existing or potentially upcoming regulations for inventory from private hosts in urban areas. I would like to round up by inviting you to look at the well-known flywheel of our marketplace. Starting with the demand side on the left-hand side, we are convinced that this acquisition will give an additional boost to efficiently increase our repurchase revenues. It will add thematic travel offers to shoulder seasons and short trip weekend travelers, as well as adding newly untapped demand to the whole HomeToGo Group.
At the same time, we can enhance our current supply with newly value-added services, with a clear objective to create even more unique stays listed on our marketplace. What does it all mean from a financial perspective? We are enabling our partners to increase occupancy for their properties, and we can increase margins by adding highly margin-accretive thematic short-term trips to our offering. By this, create a win-win-win situation for our customers, partners, and us. Let me now share with you an insight into how this deal positioned us to better serve our existing and new customers. What you see here are the results of a very recent survey from the European Travel Commission. It summarized the top planned type of leisure travel for Europeans within the next six months.
HomeToGo is, as you are all obviously aware, highly focused on traditional rural hotel holiday destinations, especially around the coast, lakes, and mountains. This covers already one-third of the overall European travel motives as per the said survey. The majority acquisition of Kurzurlaub and Kurz Mal Weg now allows us to enter yet another third of the total addressable scope of thematic travel motivations. We will strongly foster our presence in city break offers and enter new segments such as wellness and relaxation, as well as serve the culinary and food-oriented traveler. Additionally, culture and heritage, the second most popular motive to travel, is at the core of the experiences market. We are very well positioned to service this segment already before this deal, thanks to collaboration with brands like GetYourGuide.
And as a reminder, this close correlation allows us to offer the experiences during and after the checkout of our booking process. So all in all, by complementing our existing inventory through the thematic short-term travel segment, we are now in an even stronger position to cover the vast majority of travelers' use cases. Key promise, not only of our marketplace, but especially also of our brand. And with that, I would now like to hand over to Bodo, our Chief Investment Director, who has successfully accomplished this amazing acquisition as his first project, leading the HomeToGo M&A strategy. And with that, over to you, Bodo.
Thank you very much, Patrick. Dear analysts and investors, it's my pleasure to present you more about the details of our transaction announcement we just made over the weekend. This acquisition marks a new product segment for HomeToGo. Through this 51% majority acquisition of Super Urlaub, with its main brand, Kurzurlaub, as well as Kurz Mal Weg, we are merging the two leading specialist providers for the thematic short-term stays in the DACH market. The offering is mainly centered around short trip hotel stays and then combined with in-destination offerings such as dining, wellness and spa, sports, and other activities, which in aggregate is known as value-enhanced services. From a regional perspective, both companies are very much focused on the DACH region, so Germany, Austria, Switzerland, and are also strongly present in regions which have a high density of HomeToGo supply.
This perfectly complements our existing inventory in traditional vacation rental destinations. On top of that, the acquisition allows us to significantly strengthen our position for city trips, as these are destinations that are demanded multiple times over the year in shoulder seasons. On the acquired companies, I can tell you, Super Urlaub owns the brands kurzurlaub.de and kurzurlaub.at, also Austria, and also operates kurzreisen.de in Germany. And it is the leading specialist in the DACH region and will now merge with KMW, so kurz-mal-weg.de, operating under their brand, kurz-mal-weg.de, and being a strongly number two player, but strongly growing in the segment. So we are creating really a heavyweight in leading in combining these two players in the market for thematic stays. Combined, they will offer around 50,000 travel bundles for their customers.
As Patrick has already mentioned before, the business activities of the combined acquired companies are focused on short-term trips, which are enriched by value-added services. One example, for instance, is where our bundles are for the short-term stay in a hotel, enriched by a massage in the hotel's own spa, or a nice multi-course dinner in the hotel's restaurant, or also sports activities within the accommodation or outside the accommodation. Besides these thematic stays, the companies are also well-placed in offering exclusive gift vouchers, for instance, as a Christmas present, for such thematic travels, as you can see on the right-hand of that respective slide. But I assume you're also interested in learning more about the deal structure, so I would like to shed some more light on the deal structure of this acquisition.
HomeToGo acquires via a holding company, that we fully own, a 51% majority stake in the company business, in the combined business of Super Urlaub and KMW Reisen. So after the successful signing we did last Saturday, the closing is expected early January, so we will fully consolidate both businesses from first of January onwards. Within the HomeToGo Group's financial statements, and of course, with the respective 49% minority interest. In all aspects, this transaction follows the financial deal brokerage area that we just announced last week at our Capital Markets Day, i.e., it's a value accretive deal from day one. It adds to our top and bottom line growth and profitability.
The consideration we have paid or we will pay for the 51% stake in the combined business is around EUR 31 million and, of which around EUR 6 million will be paid in HomeToGo SE shares. The shares will be used as a payment. We are fully financed through the already existing treasury shares that we own. On the financials of the target, the combined businesses are expected to generate pro forma revenues of around EUR 30 million and a pro forma Adjusted EBITDA margin of more than 25%. Please note that these figures are unaudited and according to German GAAP, so there might be some variations once converted into IFRS. Please also note that the transaction includes a vendor loan, which will be repaid out of the free cash flow from the operating businesses.
Very important to note is that the sellers of both companies, they believe in the future of this business, they are reinvesting 49% of the share capital into the new holding company, so they remain bound to the business with skin in the game and believe in the joint future of developing the business together with us. Wrapping it up, you'll find the deal structure illustrated on a slide. Besides the aforementioned majority acquisitions we have signed just now, HomeToGo has always the step, the rights to step up to 100% in five years from now. So there's a simple and normal put and call option mechanism, which is in place and has been agreed with the minority shareholders.
Let me also emphasize that the acquired businesses, Super Urlaub and KMW Reisen, and their teams and offices in Berlin, Frankfurt, Hamburg, Leipzig, Vienna, and so on, will remain operationally independent from HomeToGo. The existing management will stay on and realize synergies, in particular, in bringing the two businesses itself together and combining best of both businesses, that leads to predominantly top-line synergies. They will really become one company. But also, in addition, we, as majority owner, will offer every support from the HomeToGo Group that they want and, that will contribute to their ambitious growth. We have broad experience, in knowledge, especially in marketing, product, tech, but lastly, also our position as a pioneer in artificial intelligence in the travel sector will add, to the benefit of the now newly acquired business.
Summing it up, we are more than excited to work closely together as the leading marketplace for vacation rentals with the leading specialist provider for thematic short stay travel from now on. We look forward to continue HomeToGo's successful growth story together in the future. Thank you very much. With that, I thank you very much for your attention. We will now open the floor for your questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star and one. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. One moment for our first question, please. Our first question is from Wolfgang Specht from Berenberg. Please go ahead with your question. Berenberg, your line is open. Maybe you're on mute?
Hello?
Yes, we can hear you now. Please go ahead, Mr. Specht.
Okay. Thanks a lot. I'll start with two questions before handing over to the audience. What would be interesting for me is the course, the growth track of the assets, let's say, before and after COVID. Can you shed some light on what kind of growth we can expect from these assets? Second question would be on guidance. Do you believe you can make adjustments to your guidance now that an EBITDA positive asset is entering the group? That's it from my side.
I think, Bodo Thielmann takes the first question, and then Steffen will take the second question on future targets and goals.
Of course. So, we have published the EBITDA profitability of the business, and you are probably all aware about the Rule of 40, which adds also the respective growth over the last couple of years. That is clearly matched. So we see a good track record of growth, which the companies have delivered in the past and will continue to do as well. And for the guidance, Steffen, thanks, Steffen.
Yep. Hi, Wolfgang. Thanks for your question. So, yeah, as Bodo already outlined, the companies are the Rule of 40, and that was one of the reasons why we are also so excited about this opportunity. And, of course, we expect, you know, significant impact from them for both growth and profitability. We have not come up with, let's say, an official working on that yet. You know, we just signed it the morning of Saturday, and there will be some integration work that will done, but all in all.
Well, thanks, Steffen, as much to be here anymore. Maybe, Francine, you can continue with the Q&A session. Thanks.
The next question comes from Christian Salis, from Hauck Aufhäuser Investment Bank. Please go ahead with your question.
Yeah, good morning, everyone. Christian Salis from Hauck. I've got two questions, please. So the first one would be on profitability. So could you maybe share more light on the adjustments of the two targets in terms of Adjusted EBITDA margin? So how large are the adjustments in percent of sales, and what does it include, please? And then, secondly, why are these targets already so profitable despite the, the lower scale? And then secondly, why did you acquire majority stake in two companies and not just integrate them into your on-site business, please? Thank you.
Maybe I'll answer the second question first. Why did we buy a majority instead of 100%? Because, first of all, we believe in forming these kind of partnerships, and it's, in fact, the first time that we, as HomeToGo Group, have not acquired 100%, but we wanna grow further the business together with the selling shareholders that believe in that business. And we also want to do more M&A acquisitions at the same time, and therefore not use our full firepower just for one acquisition.
To add, yeah, I think what is important for us, adjustments are obviously like in line with what HomeToGo would normally adjust. Yeah. Secondly, why we are not like integrating them fully in our on-site business, because obviously, HomeToGo has a history of looking and understanding and with eight years in every aspect. Which means, if we are acquiring a company, obviously that runs, for instance, a vacation rental, pure vacation rental marketplace, for sure, it makes totally sense to integrate them as fast as possible. Whereas here, we have a specialist for short stays and thematic travel, which is their strength. So we want that they like keep on working with their own strength.
That's also why, as Bodo just outlined, we have the structure of being highly incentivized by owning still 49% of the acquired businesses. And at the second time, at the same time, sorry, this obviously allows us, nonetheless, to utilize any other synergies we have within the group. Yeah, so like, basically, letting the specialist be the specialist, while having access to all group kind of experience and knowledge around marketing, product, and tech. And this has been very successful for us also in the past, when we look at our past acquisition, dividing them by adding new businesses and new parts where we add specialists and let them be the specialists, while on the other side, integrating fully what makes sense to fully integrate.
Very-
Our next question comes from Ben Blue from Stifel. Please go ahead with your question.
Good morning, gentlemen. Hope you can hear me all right?
Yeah, thanks, Ben.
Perfect. Good morning. A few technical questions first, please. Could you just share who the selling shareholders are, please? And second one around that, how do you value your own shares in this deal? Is it the current market price? And on to, let's say, the strategic part of the transaction. What I don't fully get yet in terms of cross-selling and upselling, so travelers come to your homepage, obviously, to you know, to look for vacation rentals. And would they then find a new tab on that homepage, basically saying, "City trips," whatever value added services, does this come at the whatever final stage of the booking transaction? If you could shed a little more light around that, how the cross-selling, upselling would work.
And then lastly, you know, just, just conceptually, also around cross-selling and upselling, integrating the inventory. I mean, you, you just introduced the Doppelgänger product at the recent CMD. Why would you have to, why would you have to buy a company rather than just, you know, doing this as a, as a sort of white label product, you know, white labeling their product into your offering and the other way around? Thank you.
Okay. So maybe the M&A-related questions first. We, in general, do not disclose who are the individuals behind the selling vehicles, but nevertheless, they are partially still within the management and will continue to form the management together with us. And in terms of the share price of our contribution in shares, that will be based on the Xetra opening trading price at closing date.
Good. And, Patrick, here, I'm happy to answer. I'm happy to answer, the other questions on the rationale. Yeah. So, obviously we are not like building a half-filled already, like, product, and you will see it from tomorrow on the HomeToGo website. I think, like, the most important thing is, and why we acquired, and also to your second question about right labeling, I will touch on that. It's for sure that we see as HomeToGo, that we have a lot of demand, not only for what people currently most people book on HomeToGo, like the summer vacation, like the big vacation in the summer, but also like their winter vacation. But we also have demand for shorter seasons and short trips, like weekend trips.
Obviously, with the offering of the two acquired entities, we can now offer even more to these customers in general. Yeah, in the first place. Adding really, like, new inventory and how this will be productized, you can have obviously a lot of ideas. One could be what you mentioned, but it will most likely be part of offerings that you will have and see throughout HomeToGo. As we are already today, like, by the way, also Airbnb have in our offering also hotels included that sometimes are interesting for certain types of travelers that we identify. So we have an idea and knowledge around how this could be interesting.
Secondly, just looking at the possibility that this creates, is obviously super interesting because we can now not only offer, this new supply that is currently being offered, by Kurzurlaub and Kurz Mal Weg, but also, bundle and add these additional value-enhanced services, like, to our vacation rents. And by this, like, basically, enrich also like, like you might already witness today in the HomeToGo booking, you see that, you can add, for instance, travel-related topics around, like, that you want to be taken from the airport to your vacation rental and these kind of things.
You can add experiences of GetYourGuide, but we can for sure also add their more thematic things and put on top vacation rental plus, for instance, a spa offering from a hotel next to your vacation rental as an option in the booking process, while at the same time we can then take this inventory and put it for people that are searching on Kurzurlaub or Kurz Mal Weg for short trips. Yeah, so it's really like a from both sides and both directions, we can enhance the offering of supply. And why we are not doing that with a white label kind of integration of someone else? Because we are very interested in doing this ourselves, yeah. Otherwise, we wouldn't have done it.
Even more on top, this allows us, and will allow us, to utilize this new inventory that we directly get, but also the newly, in the future, the added inventory of combining vacation rentals with very enhanced services, like, for the whole market via our solution, like HomeToGo Doppelgänger. So basically, it made totally sense for us to not only add new supply, but also in the long term, combine it with our classical offering and offer all of that then to the market as an additional service.
Okay. All right, Patrick, thank you.
I think there was still a question of if there's debt involved. I think I mentioned that before. As part of the transaction structure, there is a vendor loan that is the debt element.
What's the size of that vendor loan, please?
It's around EUR 14 million.
One four?
Yeah.
One four.
All right. Thank you very much from my side.
Next question comes from Felix Ellmann from Warburg. Please go ahead.
Yeah, good morning. I have two questions. One is, you mentioned before you kept some of your powder dry for further acquisition.
Looking at the last one, one gets the impression that you get more and more away from the pure marketplace business you've been before. Will the next acquisition - Could the next acquisition also be, let's say, quite far away from what you did before, like the, these are, or will they be more, more in the topics you are, you have been in before? That's the first question. And the second question, which is much more interesting to me than that, is, you already elaborated on synergies, but what is the synergy you, you are, you see the most potential, the highest potential, or let's say, the, the lowest hanging fruit? That, what is the one you're aiming, the concrete business case you're aiming at, if you're starting now?
Yeah. So, let me check this. Obviously, we cannot comment on what is a plan or next acquisition. As we always said, we look for highly accretive and value-adding profitable companies, yeah? And this, as Bodo also like mentioned on the Capital Markets Day, this can be a wide range of different companies, yeah? And, obviously, we are always looking, on one hand, to either basically add something to our marketplace business or add something to our HomeToGo Pro, our B2B segment. And this is what we will also continue like looking for in further M&A.
But this could also be, let's say, an offering for flights or something, that which sounds far away from the first place. But for example, looking at Booking.com, going into the flight business also, that could also be the case, though. Or will this be nearer to your business?
As that, we wouldn't comment in detail on it, but we are currently not planning to add a flights business to HomeToGo so far. I can tell you because it obviously needs to have closer synergies with the overall business.
Okay.
And to the biggest potential, obviously, we see a lot of potentials, but especially as mentioned, for us, one key element is the offering of additional touchpoints for our existing customers, as we have a ton of customers in our CRM systems and so on, and we know that they are looking not only for the big vacation, but mostly book the big vacation with HomeToGo, so we can really, like, foster these short trips, weekend trips, thematic trips. And this is one of the key rationales and obviously one of the high potentials of this deal.
Thank you.
Next question comes from Volker Bosse, from Baader Bank. Please go ahead.
Hello, can you hear me?
Hi, Volker. I can hear you.
Okay, sorry. No, first of all, yeah, congratulations on the two new great additions to your group, and thanks for all the provided detailed information you gave so far. Two questions are left from my side. First of all, the 51% majority deal. So what is the outcome from EUR 7.5 million EBITDA to net earnings? So the question is regarding minorities, which we should take out of the P&L. And the second question to Bodo, you mentioned it's the first project, and at your Capital Markets Day, you stated that you're looking for acquisitions in both segments, marketplace as well as B2B. So for clarification, if it's more to come, so you continue to remain on the hunt for interesting company.
Is that right to understand in that way? Thank you.
I think I can answer both. First of all, the precise minority interest you will find in our financials, which will be published right on time. There's not much more we can give you at hand before that due date. In terms of the pipeline, of course, our joint pipeline is ranging across the whole scope of businesses and criteria that we presented last week at the Capital Markets Day. You can expect more M&A transactions from us. We cannot comment, as Patrick said, on within which of the segments it will be or what character and background it has.
But we can clearly say, and this is the first example, we will also do majority acquisitions, not necessarily always 100% acquisitions, because we believe in the concept of a joint development with strong entrepreneurs, and co-owners.
Yeah. Okay, got the message. Thank you very much.
Of course, last comment on that, the firepower we have left in terms of cash, debt, leverage, potential, and own shares has not dried out at all. It will be enough for further meaningful acquisitions in the short future.
Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star and one. Our next question is a follow-up from Mr. Specht. Mr. Specht, please go ahead.
Yes, hello. One additional one from my side. Now that you're entering a kind of tour operator business, will this change your risk profile? Or in other words, are you now in a higher need to pre-purchase capacities? So will there be increased need for, let's say, working capital?
No, not at all. So it's not a tour operator, per se. It's an OTA business model, like you're familiar with what is the HomeToGo Group's main profile so far. So there's not any kind of additional risk attached to this business.
Okay, thanks a lot.
There are no further questions at this time, and I hand back to Carsten for closing comments.
Thank you, Francine. Dear analysts and investors, thank you very much for dialing in. In case of any follow-up questions, please feel free to approach Sebastian or myself. With that, I wish you a peaceful holiday season, stay healthy, and have a good start to the new year, 2024. Thank you and goodbye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you very much for joining, and have a pleasant day. Goodbye.