Ströer Out-of-Home Media AG: Ströer gets off to a modest start to the new fiscal year

May 16, 2012 7:00 AM

Ströer Out-of-Home Media AG / Key word(s): Quarter Results

16.05.2012 / 07:00


Ströer gets off to a modest start to the new fiscal year

- Consolidated revenue down 3.5% to EUR 118.6m

- Organic growth at -2.9%

- Operational EBITDA falls from EUR 16.2m to EUR 9.3m

- Contract portfolio bolstered after winning tenders in Braunschweig and Salzgitter

Cologne, 16 May 2012   Ströer Out-of-Home Media AG was faced with an increasingly difficult environment in the first quarter of 2012. In particular, the major international and national customers retained their bookings noticeably in the first quarter. As anticipated, the Group was unable to top the very high prior-year results. Consolidated organic revenue was down 2.9% (prior year: up 9.7%). Taking into account in particular the exchange rate effects in comparison to the same quarter of the previous year, this led to a 3.5% decrease in consolidated revenue to EUR 118.6m (prior year: EUR 122.9m). The reduction in revenue and the start-up costs for the expansion of the advertising rights portfolio were reflected in operational EBITDA, which fell to EUR 9.3m (prior year: EUR 16.2m) and brought the operational EBITDA margin down to 7.8% (prior year: 13.2%).

Overall, the post-tax loss narrowed slightly from EUR 6.7m in the prior-year quarter to EUR 6.2m due to the improvement in the financial result. This was largely driven by the reduction in interest expenses on the back of the adjusted key borrowing terms agreed in the prior year and by now the considerable recovery in the most important foreign currencies for Ströer in 2012. The loss for the period adjusted for exceptional items widened from EUR 1.2m to EUR 6.2m due to the weaker operating performance.

'The tendency toward cautious bookings by the major national and international customers and the difficult market environment shaped the first quarter. Last year, we raised the bar with the nationwide roll-out of our Out-of-Home-Channel in Germany's train stations. We are systematically continuing our digitalization of out-of-home media and have now set up the two largest LCD displays in Germany in the main train stations of Hamburg and Düsseldorf. This is allowing us to gradually expand our portfolio of solutions in the moving-picture market for our customers,' said Udo Müller, CEO of Ströer. 'The two concessions won by tender also underscore the confidence that municipalities have in our high level of performance.'

Ströer invested EUR 8.0m in property, plant and equipment, intangible assets and equity interests in the first quarter (prior year: EUR 12.0m). Operating cash flow is generally shaped by significant lease prepayments in the first quarter and came to EUR -16.0m (prior year: EUR -10.1m) due to seasonal factors. This led to a marginal year-on-year change in the free cash flow (EUR -23.9m; prior year: EUR -22.0m). The Group's net debt was down 4.5% from EUR 347.8m as of 31 March 2011 to EUR 332.3m.

Operating segments

Ströer Germany
Revenue and earnings in the Germany segment were impacted by the cautious approach currently being taken by nationally operating customer groups. The segment saw its revenue decrease by 1.6% to EUR 90.4m in the first three months of 2012 in comparison to the prior-year period, which was shaped by high revenue growth (prior year: EUR 91.9m). Organic revenue, that is without the acquisition of ECE flatmedia, was down 2.1% (prior year: up 9.4%). As a result, operational EBITDA declined from EUR 18.7m to EUR 15.4m, and the operational EBITDA margin dropped from 20.4% to 17.0%. The contract portfolio in Germany, which is of high importance to Ströer, was further strengthened in the first quarter after winning the tender in Braunschweig, followed by the tender in Salzgitter in April.

Ströer Turkey
The Ströer Turkey segment was also affected by the cautious bookings of its nationally operating customers and was unable to repeat the positive revenue trend of the prior year. In addition, a low-margin sales agreement was terminated at the end of 2011, leading to a year-on-year decrease of around EUR 1m in revenue. Overall, revenue was down 8.8% from EUR 18.7m to EUR 17.1m in the first quarter. Organic growth stood at -5.1%, compared with 8.9% in the prior year. If the sales agreement had not been terminated, organic growth would have been approximately flat.
The cost of sales also increased significantly in Turkey as additional lease payments were incurred in the first quarter for the sites for the new billboard contract in Istanbul that were not yet matched by income. Additional revenue from the upcoming doubling in capacity to around 4,000 billboards will be generated over the course of the year. The decrease in revenue and the higher cost of sales led to a decline in operational EBITDA to EUR -2.7m (prior year: EUR 0.9m) which in turn reduced the operational EBITDA margin from 4.6% in the prior year to -15.6%.

Other segment
The 'Other' segment includes the Polish out-of-home activities and the blowUP division, which bundles the western European giant poster business. Revenue in the Poland sub-segment increased. Direct costs declined at the same time after the billboard portfolio was streamlined, thus improving operational EBITDA and the operational EBITDA margin. In contrast, the blowUP sub-segment did not match the prior-year quarter's revenue and earnings as the volume of international campaigns was lower. Overall, revenue in the 'Other' segment dropped 8.2% to EUR 11.3m (prior year: EUR 12.3m) while organic growth deteriorated to -5.3% (prior year: 13.8%). Operational EBITDA slipped from EUR -0.8m to EUR -1.3m, taking the operational EBITDA margin down from -6.6% to -11.9%.

The current media market remains soft and difficult to predict as the sentiment and booking behavior of the national clients is still very short term and volatile. In this challenging environment, Ströer expects an organic revenue decline in the range of a mid or even high single digit percentage rate for the second quarter of 2012, depending on the level of bookings in the remainder of this quarter. This is caused by lower trading especially in Germany, while the Turkish operations may achieve a similar underlying revenue performance as reported in the second quarter of last year. Irrespective of the current difficulties in the trading environment, Ströer is still convinced that the outstanding market position and quality product offering will give the company the strength to benefit from the ongoing structural change in the media markets.

The Group's financial figures at a glance

In EUR m Q1 2012 Q1 2011 Change
Revenue 118.6 122.9 -3.5%
Ströer Germany 90.4 91.9 -1.6%
Ströer Turkey 17.1 18.7 -8.8%
Other 11.3 12.3 -8.2%
Billboard 60.1 62.9 -4,5%
Street furniture 33.4 33.7 -1,1%
Transport 17.8 18.4 -3,6%
Other 7.4 7.8 -5,0%
Organic growth1 -2.9% 9.7%  
Gross profit2 29.8 36.7 -18,7%
Operational EBITDA3 9.3 16.2 -42,6%
Operational EBITDA³ margin 7.8% 13.2%  
Adjusted EBIT4 -0.4 6.8 n.d.
Adjusted EBIT4 margin -0.3% 5.5%  
Adjusted profit or loss for the period5 -6.2 -1.2 <-100%
Adjusted earnings per share (EUR)6 -0.13 -0.02 <-100%
Profit or loss for the period7 -6.2 -6.7 8,0%
Earnings per share (EUR)8 -0.13 -0.15 11,6%
Investments9 8.0 12.0 -33,2%
Free cash flow10 -23.9 -22.0 -8,5%
  31 Mar 2012 31 Dec 2011 Change
Total equity and liabilities 994.7 982.6 1.2%
Equity 272.4 273.5 -0.4%
Equity ratio 27.4% 27.8%  
Net debt11 332.3 304.3 9.2%
Employees12 1,729 1,730 0.0%


[1] Excluding exchange rate effects and effects from the (de-) consolidation and discontinuation of operations

[2] Revenue less cost of sales

[3] Earnings before interest, taxes, depreciation and amortization adjusted for exceptional items and effects from the phantom stock program which was terminated as of the IPO

[4]Earnings before interest and taxes adjusted for exceptional items, effects from the phantom stock program which was terminated as of the IPO, amortization of acquired advertising concessions and impairment losses on intangible assets

[5] Adjusted EBIT before non-controlling interests net of the financial result adjusted for exceptional items and the normalized tax expense

[6] Adjusted profit or loss for the period net of non-controlling interests divided by the number of shares outstanding after the IPO (42,098,238)

[7] Profit or loss for the period before non-controlling interests

[8] Actual profit or loss for the period net of non-controlling interests divided by the number of shares outstanding after the IPO (42,098,238)

[9] Including cash paid for investments in property, plant and equipment and in intangible assets but excluding cash paid for investments in non-current financial assets and cash paid for the acquisition of consolidated entities

[10] Cash flows from operating activities less cash flows from investing activities

[11] Financial liabilities less derivative financial instruments and cash


[12] Headcount (full and part-time employees)

Financial figures of the segments

Ströer Germany

In EUR m     Change Change
  Q1 2012 Q1 2011 In EUR m in %
Revenue 90.4 91.9 -1.5 -1.6%
Billboard 36.3 38.3 -2.0 -5.1%
Street furniture 29.4 28.7 0.7 2.5%
Transport 17.6 18.1 -0.4 -2.5%
Other 7.1 6.9 0.2 2.9%
Organic growth -2.1% 9.4%   n.d.
Operational EBITDA 15.4 18.7 -3.3 -17.8%
Operational EBITDA margin 17.0% 20.4%   -3.4 percentage points


Ströer Turkey

In EUR m     Change Change
  Q1 2012 Q1 2011 In EUR m in %
Revenue 17.1 18.7 -1.7 -8.8%
Billboard 13.2 13.5 -0.3 -2.1%
Street furniture 3.8 4.9 -1.1 -22.3%
Transport 0.0 0.3 -0.3 -86.5%
Organic growth -5.1% 8.9%   n.d.
Operational EBITDA -2.7 0.9 -3.5 n.d.
Operational EBITDA margin -15.6% 4.6%   n.d.



In EUR m     Change Change
  Q1 2012 Q1 2011 In EUR m in %
Revenue 11.3 12.3 -1.0 -8.2%
Billboard 10.6 11.1 -0.6 -5.2%
Street furniture 0.1 0.1 0.0 2.2%
Transport 0.1 0.1 0.1 n.d.
Other 0.4 1.0 -0.5 -53,3%
Organic growth -5.3% 13.8%   n.d.
Operational EBITDA -1.3 -0.8 -0.5 -65.2%
Operational EBITDA margin -11.9% -6.6%   -5.3 percentage points


About Ströer
Ströer Out-of-Home Media AG, Cologne, together with its subsidiaries, specializes in all forms of out-of-home advertising media, from traditional posters and advertising at bus and tram stop shelters and on vehicles, through to sophisticated digital out-of-home advertising media. The Group commercializes more than 280,000 advertising faces and, with consolidated revenue of EUR 577.1m for fiscal year 2011, is one of the leading out-of-home advertising companies in Germany, Turkey and Poland. In terms of revenue, Ströer is one of Europe's largest providers of out-of-home advertising.
The acquisition of ECE flatmedia GmbH has enabled the Ströer Group to expand its digital out-of-home media portfolio to include shopping malls. The advertising media portfolio of the Cologne-based SDAX-listed company thus comprises digital moving-picture networks in Germany's largest train stations, in underground and suburban railway stations and now also in the country's largest shopping malls.
In addition, Ströer boasts a broad offering of out-of-home advertising products that set new standards in terms of the quality, innovation and design of advertising media and street furniture. Ströer's street furniture has won 27 international awards. The Ströer Group has approximately 1,700 employees at over 70 locations.

For more information on the Company, please visit

Press contact
Claudia Fasse
Ströer Out-of-Home Media AG
Director Group Communication
Ströer Allee 1 D-50999 Cologne
Telephone: 02236 / 96 45-246
Fax: 02236 / 96 45-6246

IR Contact
Stefan Hütwohl
Ströer Out-of-Home Media AG
Director Group Finance and Investor Relations
Ströer Allee 1 | D-50999 Cologne, Germany
Phone: +49 (0)2236 / 96 45-338
Fax: +49 (0)2236 / 96 45-6338

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