Ströer Media AG posts significant improvement in annual earnings

Mar 28, 2014 7:06 AM

Ströer Media AG / Key word(s): Final Results

28.03.2014 / 07:06


Ströer Media AG posts significant improvement in annual earnings

- Consolidated revenue up sharply by 13.2% to EUR 634.8m

- Operational EBITDA improved by 10.3% to EUR 118m

- Profit for the period of EUR 5.1m

Cologne, 28 March 2014 Digitalization was the clear focus of Ströer Media AG's activities in fiscal year 2013. Seven acquisitions provided the basis for the Company's entry into the online advertising business, while the purchase of the international online marketer Ballroom also ensured the successful roll-out of Ströer's online strategy to its other core markets of Turkey and Poland. The continued expansion of the digital out-of-home infrastructure led to an increase in the proportion of total revenue generated by digital media. In addition, the Ströer Group drove forward its country-specific out-of-home strategies that reflect market conditions and offer a stable platform for further business growth based on actively managed portfolios of advertising concessions. In the space of 12 months, the Company was able to extend its position in all core markets to become a leading out-of-home and online marketer. Thanks to its focus on digitalization, Ströer has already seen its relevance increase among advertising companies and agencies.

Overall, the operating business of Ströer Media AG and all its operating units improved significantly year on year.

Consolidated revenue increased by EUR 74.2m compared with 2012 to EUR 634.8m. EUR 64.4m of this growth related to the online advertising companies acquired in the course of 2013 and EUR 9.9m to the out-of-home business. The Group's organic growth amounted to 3.5% in 2013.
The substantial improvement in revenue led to a corresponding increase in operational EBITDA from EUR 107.0m in the prior year to EUR 118.0m. The operational EBITDA margin was 18.6%, 0.5 percentage points below the prior-year figure. This decline is primarily due to lower EBITDA margins in the online business as a result of the business model.

Adjusted profit for the period rose by 51.5% in the fiscal year to EUR 36.3m. EUR 27.8m of the adjustment relates to the non-cash amortization of hidden reserves from advertising concessions that were recognized in connection with earlier acquisitions. Excluding the adjustment, the Group closed fiscal year 2013 with a profit of EUR 5.1m, compared with a loss of EUR 1.8m in 2012. This represents a EUR 6.9m improvement on the prior year due to growth in the operating business and improvements in the financial result.

Net debt, another key performance indicator for the Group, increased slightly to EUR 326.1m in the fiscal year due partly to additional earn-out liabilities entered into as part of the investments in online advertising. The leverage ratio (net debt to operational EBITDA) was reduced slightly as a result of improved operational EBITDA, while the equity ratio was comfortable at 30.9%.

"Our clear focus in 2013 was on digitalization. We successfully expanded our business model to include online marketing and have already rolled out this strategy in our core international markets. The capital markets also understood and rewarded our digital strategy," said Udo Müller, CEO of Ströer. "Digitalization will remain our top priority in all areas of the Company in the coming years."

Outside of its online business, Ströer continued to invest selectively in organic growth projects in Germany and abroad in 2013. The Group focused its resources primarily on rolling out more digital screens and backlit advertising media (premium billboards). Excluding acquisitions, Ströer reduced its investments overall by 8.6% to EUR 39.0m (prior year: EUR 42.6m).

Operating segments

Ströer Germany
Revenue in the Ströer Germany segment increased by EUR 9.0m to EUR 420.6m and was mainly driven by the transport product group, which ended the fiscal year with revenue of EUR 96.8m, up EUR 6.2m on the prior year. The product group profited especially from dynamic revenue growth in digital advertising media, to which its public portals (Out-of-Home Channel and infoscreen) in particular contributed low double-digit growth rates. Overall, the proportion of segment revenue generated by digital media rose to 10.6% (prior year: 9.2%).
Alongside the rise in lease payments and running costs that accompanied the increase in revenue, operational EBITDA also grew year on year by EUR 2.9m to EUR 100.5m. The operational EBITDA margin improved by 0.2 percentage points to 23.9%.

Ströer Turkey
Adjusted for exchange differences, the Ströer Turkey segment achieved organic revenue growth of 13.4%. However, this was offset by the weakness of the Turkish lira against the euro, which led to effective revenue growth of 3.5%. The Ströer Turkey segment generated revenue of EUR 94.6m in fiscal year 2013, a slight increase of EUR 3.2m year on year. This upwards trend was primarily attributable to a further improvement in the advertising media portfolio in Istanbul and the roll-out of the new giant and premium billboards, which are meeting with strong customer demand.
The increase in revenue was offset by an only moderate rise in cost of sales in the reporting year, in particular higher running costs due to capacity utilization. By contrast, increases in lease payments as well as rising electricity costs only had a limited impact due to the weakness in the Turkish lira. Overheads in the segment declined as a result of the exchange rates. Overall, operational EBITDA improved by EUR 1.0m to EUR 13.8m. The operational EBITDA margin increased slightly by 0.5 percentage points to 14.6%.

Online segment
Since the beginning of the second quarter of 2013, the Ströer Group has gradually entered the online advertising business. This step represents an important pillar of the Group's corporate strategy and its contributions are therefore reported in a separate segment. The new Online segment includes the revenue and earnings contributions of adscale, which was acquired in April, the Ströer Digital Group, which was acquired in full in June, the location-based advertising segment of Servtag GmbH, which was acquired by Ströer Mobile Media GmbH, the Ballroom Group and MBR Targeting GmbH. The revenue and operational EBITDA figures are in line with expectations to date. Overall, the Online segment contributed EUR 64.4m to the Group's total revenue. Operational EBITDA came to EUR 6.5m.

Other segment
The "Other" segment includes Ströer's Polish out-of-home activities and the western European giant poster business of the blowUP division. The segment closed fiscal year 2013 with revenue of EUR 56.4m, a slight decline of EUR 1.5m. By contrast, operational EBITDA increased by EUR 2.1m to EUR 6.4m thanks to systematic cost savings in Poland and only moderate increases in the BlowUP Group's costs. The operational EBITDA margin rose from 7.5% to 11.4%.

Regarding the first quarter of 2014, Ströer expects a revenue growth in the low teens, mainly driven by the entry into online marketing. Also expected is an organic growth rate in the low single digits for the whole group.

The Group's financial figures at a glance

In EUR m 2013 2012        Change
Revenue 634.8 560.6 13.2%
Ströer Germany 420.6 411.7 2.2%
Ströer Turkey 94.6 91.3 3.5%
Online 64.4 0.0 n.d.
Other 56.4 57.9 -2.7%
Billboard 288.8 286.6 0.8%
Street furniture 144.9 147.2 -1.5%
Transport 97.7 91.5 6.7%
Online 64.2 0.0 n.d.
Other 39.2 35.3 11.2%
Organic growth 3.5 -4.0  
Gross profit 196.2 174.1 12.7%
Operational EBITDA 118.0 107.0 10.3%
Operational EBITDA3 margin 18.6 19.1  
Adjusted EBIT 72.0 67.4 6.8%
Adjusted EBIT4 margin 11.3 12.0  
Adjusted profit or loss for the period 36.3 24.0 51.5%
Adjusted earnings per share (EUR) 0.76 0.54 39.7%
Profit or loss for the period 5.1 -1.8 n.d.
Earnings per share (EUR) 0.08 -0.07 n.d.
Investments 39.0 42.6 -8.6%
Free cash flow 1.8 10.8 -83.7%
  31 Dec 2013               31 Dec 2012 Change
Total equity and liabilities 957.1 863.7 10.8%
Equity 296.0 279.6 5.9%
Equity ratio 30.9 32.4  
Net debt 326.1 302.1 7.9%
Employees            2,223                          1,750 27.0%

Key financials of the segments
Ströer Germany

in EUR m     Change Change
        2013              2012                in EUR m in %
Revenue 420.6 411.7 9.0 2.2
Billboard 165.9 164.4 1.5 0.9
Street furniture 120.7 123.4 -2.7 -2.2
Transport 96.8 90.6 6.2 6.8
Other 37.3 33.3 4.0 12.0
Organic growth 2.2% -4.5%            up 6.66 percentage points
Operational EBITDA 100.5 97.5 3.0 3.0
Operational EBITDA margin 23.9% 23.7%   up 0.19 percentage points

Ströer Turkey

in EUR m                         Change Change
        2013         2012 in EUR m in %
Revenue 94.6 91.3 3.2 3.5
Billboard 70.8 67.7 3.0 4.4
Street furniture 23.6 23.2 0.4 1.8
Transport 0.2 0.2 0.0 -19.6
Other 0.0 0.2 -0.2 -86.9
Organic growth 13.4% -0.3%   up 13.78 percentage points.
Operational EBITDA 13.8 12.9 1.0 7.5
Operational EBITDA margin 14.6% 14.1%   up 0.54 percentage points


in EUR m                           Change Change
       2013      2012 in EUR m in %
Revenue 56.4 57.9 -1.5 -2.7
Billboard 52.2 54.5 -2.4 -4.3
Street furniture 0.6 0.6 0.1 9.1
Transport 0.7 0.7 0.0 0.8
Other 2.9 2.1 0.8 35.7
Organic growth -1.5% -6.0%   up 4.51 percentage points
Operational EBITDA 6.4 4.4 2.1 47.0
Operational EBITDA margin 11.4% 7.5%   up 3.85 percentage points

Note: all figures are rounded.

About Ströer
Ströer Media AG is a leading provider of online advertising and out-of-home, and offers its advertising customers individualized and fully integrated premium communications solutions. In the field of digital media, Ströer is setting new standards for innovation and quality in Europe and is thus opening up new and innovative opportunities for targeted customer contact for its advertisers.

The Ströer Group commercializes several thousand websites and more than 280,000 out-of-home advertising faces. With consolidated revenue of EUR 634m for the full year 2013, Ströer Media AG is one of largest providers of out-of-home media in Europe in terms of revenue.

The Ströer Group has approximately 2,200 employees at over 70 locations.

For more information on the Company, please visit

Press contact
Ströer Media AG
Marc Sausen
Head of Group Communication
Ströer-Allee 1. 50999 Cologne
Telephone: +49 (0) 2236 / 96 45-246
Fax: +49 (0) 2236 / 96 45-6246

IR Contact:
Ms. Dafne Sanac
Ströer Media AG
Investor & Credit Relations Manager
Ströer Allee 1 | D-50999 Cologne, Germany
Phone: +49 (0)2236 / 96 45-356
Fax: +49 (0)2236 / 96 45-6356

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