New Work SE Half Year Report 2024

First half of 2024: "New Work SE restructuring progressing well and on schedule"

• Revenues declining, while cost reduction measures are working
• Pro forma EBITDA forecast of €55 million to €65 million confirmed
• CFO Ingo Chu decides not to renew his current contract ending mid-2025

Hamburg, 6 August 2024 – New Work SE, parent company of the XING and kununu brands, presented its half-year financial figures today. Group revenues for the first half-year stood at €133.7 million, down from €151.7 million in H1 2023 due to the decrease in B2C revenues as part of the strategic realignment and owing to the challenging economic environment which has affected the recruiting solutions business. EBITDA in the first half of 2024 was €1.8 million (H1 2023: €38.6 million), a significant decline attributable also to one-off restructuring expenses of €24.7 million. As a result, the Group reported earnings of -€7.8 million.

The restructuring successfully effected on 1 April had a positive effect on results, which – in addition to the cost-saving measures initiated last year – have significantly reduced personnel costs compared to the previous year. Despite the challenging revenue development and ongoing further investment, particularly in the repositioning of XING and to continue growing kununu, the pro forma EBITDA margin more than doubled from 13 per cent in the Q1 2024 to 27 per cent in Q2 2024.

Revenue development by segment

Revenues in the largest segment, HR Solutions & Talent Access, decreased by 8 per cent to €98.6 million in the first half of 2024 compared to the previous year (€107.1 million). This was largely due to the ongoing weak labour market and the planned discontinuation of Honeypot. As expected, B2C revenues fell by 18 per cent to €31.1 million (H1 2023: €38.2 million). The repositioning of XING as a jobs network aims to enhance access to talent for employers. Consequently, monetisation of B2C users is less of a focus than it has been in the past. The smallest segment, B2B Marketing Solutions, reported a 38 per cent decrease in revenues to €4.0 million. The main reason for this is the general downturn in advertising budgets and revenues in Germany.

CEO Petra von Strombeck said: “The company is undergoing comprehensive restructuring. The measures we agreed on at the beginning of the year are taking effect as planned. We needed to take these steps because we saw the difficult economic developments ahead and took action to counteract them at an early stage. We can now confirm our pro forma EBITDA forecast of €55 million to €65 million for 2024. In addition, the non-financial key performance indicators of our strong brands XING and kununu are developing well and showing positive trends in many areas.”

For instance, the number of Workplace Insights from kununu – authentic insights behind the scenes of companies – increased significantly by 25 per cent to 11.7 million. This is also thanks to a successful regional branding campaign that kununu conducted with a focus on the German state of North Rhine-Westphalia. Under the slogan “First you visit kununu, then you apply”, the campaign was targeted at young professionals and graduates.

The number of XING members in German-speaking countries grew by 630,000 to some 22.5 million as of 30 June 2024. At the start of the year, XING launched the largest branding campaign in its history, which was part of the company’s various investments to reposition the brand.

In terms of product, both XING and kununu rolled out numerous innovations to the market. For example, kununu now offers a job alert where users are automatically notified about jobs they’re interested in. Meanwhile, XING now gives recruiters even more visibility on the platform thanks to a Hiring badge that highlights them to jobseekers, while also letting them set certain skills and disciplines they’re looking to hire.

CFO Ingo Chu decides not to renew his current contract ending mid-2025

After a successful 15-year tenure as CFO at New Work SE (formerly XING AG), CFO Ingo Chu (53) informed the Supervisory Board early on of his decision not to renew his current contract ending in the middle of 2025 in order to pursue new challenges. The Supervisory Board has expressed its regret about this decision.

Tom Bureau, New Work SE Supervisory Board Chair, said: “I deeply regret Ingo Chu’s decision. When he joined XING back in 2009, the company was generating revenues of around €44 million with an EBITDA of some €12 million. In 2023, revenues exceeded €300 million, while the EBITDA came in at around the €100 million mark. On behalf of the entire Supervisory Board, I would like to thank him for his excellent achievements.”

New Work SE CEO, Petra von Strombeck, added: “I also deeply regret Ingo’s decision. In his role as CFO, he was a co-pilot for me in the best -possible way. I would like to thank him sincerely for the excellent and successful collaboration over the years, and wish him all the best for his professional and private endeavours.”