15. May 2013
Press release
Ströer Media AG: Positive business performance in the first quarter
<ul> <li> Consolidated revenue up 5.8% to EUR 125.5m </li> <li>5.9% organic growth </li> <li>Operational EBITDA falls by 19.1% to EUR 107m</li> <li>Operational EBITDA increases by 45.6% to EUR 13.5m</li> <li>Clear improvement in adjusted profit or loss for the period</li> <li>Further reduction in net debt</li> </ul> </br> </br>
Cologne, 15 May 2013
In the first quarter of 2013, Ströer Media AG built on the positive trends already indicated in the final weeks of 2012 and increased its revenue by EUR 6.8m year on year to EUR 125.5m. Organic consolidated revenue grew by 5.9%, mainly due to higher revenue in Germany and Turkey – across all product groups. Gross profit was also up 5.0% to EUR 31.3m.
Operational EBITDA rose significantly by 45.6% to EUR 13.5m, boosted by a favorable product mix and continous cost control. As a result, the operational EBITDA margin therefore increased from 7.8% to 10.8%.
At EUR minus 6.3m, the loss for the period remained virtually unchanged against the prior-year level. The financial result in the first quarter of 2013 deteriorated slightly by EUR minus 0.6m to EUR minus 4.6m. In the prior-year quarter, the appreciation of the Turkish lira and the Polish zloty led to exceptional income due to revaluation of intragroup euro loans granted by the holding company to its foreign subsidiaries. This effect, which was not repeated in the first quarter 2013, could not be fully compensated by lower interest expenses from the optimization of the Group’s financing structure in August 2012. The optimized financial result is particularly reflected in the
2 significant improvement in the adjusted loss for the period which, at EUR minus 2.0m, was 67.6% lower than in the prior year (loss of EUR minus 6.2m).
The Group’s net debt decreased slightly by EUR 2.5m in the reporting period to EUR 299.6m, primarily due to the positive free cash flow of EUR 9.0m. As a result, the leverage ratio (the ratio between net debt and operational EBITDA) fell slightly to 2.7.
In the first quarter of 2013, Ströer continued to adjust the pace of its investments to reflect the market conditions and invested selectively in specific growth projects in Germany and abroad. Overall, Ströer reduced its investments by 23.8% to EUR 6.1m (prior year: EUR 8.0m).
“We are very pleased with the first quarter. We were able to carry forward the momentum from the final weeks of 2012 into the new year and report a positive business performance in Germany and Turkey,” said Udo Müller, CEO of Ströer. “2013 will also be shaped by our entry into the online advertising market. We will use our existing and new infrastructure to strategically focus on issues such as the regionalization of online advertising.”
Operating segments
Ströer Germany
In the first quarter of 2013, the Ströer Germany segment increased its revenue by EUR 5.0m year on year to EUR 95.4m. Higher lease and electricity costs were partially offset by savings in other areas such as administration and maintenance. Therefore our operational EBITDA also improved considerably by 12.5% to EUR 17.3m (prior year: EUR 15.4m). At the same time, the operational EBITDA margin rose to 18.2% (prior year: 17.0%). In addition to the segment’s regional operations, business with nationally operating customers picked up. In particular, revenue in the transport product group was up by a significant 18.4% on the prior-year 3
quarter to EUR 20.8m due to improved Out-of-Home Channel and Infoscreen bookings. Overall, the proportion of segment revenue generated by digital media rose to 8.9% (prior year: 6.4%).
Ströer Turkey
The improvement in the booking situation seen by the Ströer Turkey segment at the end of the last quarter of 2012 continued in the first quarter of 2013. This led to 19.0% growth in segment revenue to EUR 20.3m. Ströer Turkey’s business profited from the ongoing expansion of advertising media capacity in Istanbul as well as the giant and premium board formats launched in the past year. Overall, the increase in revenue more than offset higher lease payments and operating costs for the advertising media portfolio, allowing the segment to improve both its operational EBITDA (EUR minus 0.3m) and its operational EBITDA margin (minus 1.7%).
Other segment
The “Other” segment includes Ströer’s Polish out-of-home activities and the western European giant poster business of the blowUP division. Continuing price pressure and reduced demand were felt in the Polish market in particular. However, there were signs of a recovery in the international giant poster business towards the end of the first quarter. Segment revenue fell by 12.8% to EUR 9.8m. This decline was largely offset by savings in running costs and overheads. Consequently, operational EBITDA deteriorated only slightly by EUR 0.2m year on year to EUR minus 1.5m. The corresponding operational EBITDA margin went from minus 11.9% to minus 15.2%.
Forecast
For the second quarter of 2013 we are expecting a slight growth in total organic revenue of 1%. The dynamic growth in Turkey will continue, while the revenue in Germany will be subdued and in the segment Other will be decreasing. In addition, Ströer will also first-time account for the unorganic revenue and profit contributions from the two acquisitions in the online marketing field, one completed in April and one to be completed in June.
The Group’s financial figures at a glance
| In EUR m | 3M 2013 | 3M 2012 | Change |
| Revenue | 125,5 | 118,6 | 5,8% |
| Ströer Germany | 95,4 | 90,4 | 5,5% |
| Ströer Türkei | 20,3 | 17,1 | 19,0% |
| Other | 9,8 | 11,3 | -12,8% |
| Billboard | 61,6 | 60,1 | 2,5% |
| Street Furniture | 34,9 | 33,4 | 4,5% |
| Transport | 21,0 | 17,8 | 18,1 % |
| Other | 8,0 | 7,4 | 7,6 % |
| Organic growth[1] | 5,9 | -2,9 | |
| Gross profit[2] | 31,3 | 29,8 | 5,0% |
| Operational EBITDA[3] | 13,5 | 9,3 | 45,6% |
| Operational EBITDA[3]-Marge | 10,8 | 7,8 | |
| Adjusted EBIT[4] | 2,5 | -0,4 | n.d. |
| Adjusted EBIT4-Marge | 2,0 | -0,3 | |
| Adjusted profit or loss for the period[5] | -2,0 | -6,2 | 67,6% |
| Adjusted earnings per share[6] (EUR) | -0,04 | -0,13 | 69,2% |
| Earnings per share | -6,3 | -6,2 | -1,8% |
| Earnings per share8[7] (EUR) | -0,14 | -0,13 | -7,6% |
| Investments[8] | 6,1 | 8,0 | -23,8% |
| Free Cash-Flow[9] | 9,0 | -23,9 | n.d. |
| 31.03.2013 | 31.12.2012 | Change | |
| Total equity and liabilities | 889,6 | 863,7 | 3,0% |
| Equity | 274,5 | 279,6 | -1,8% |
| Equity ratio | 30,9% | 32,4% | |
| Net debt[10] | 299,6 | 302,1 | -0,8% |
| Employees[11] | 1.754 | 1.750 | 0,2% |
Key financials of the segments
Ströer Germany
| In EUR m | Change | Change | ||
| 3M 2013 | 3M 2012 | In EUR m | in % | |
| Revenue | 95,4 | 90,4 | 5,0 | 5,5% |
| Billboard | 36,9 | 36,3 | 0,6 | 1,6% |
| Street Furniture | 30,0 | 29,4 | 0,6 | 2,1% |
| Transport | 20,8 | 17,6 | 3,2 | 18,4% |
| Other | 7,6 | 7,1 | 0,6 | 8,3% |
| Organic growth | 5,5% | -2,1% | 7,6% points | |
| Operational EBITDA | 17,3 | 15,4 | 1,9 | 12,5% |
| Operational EBITDA margin | 18,2% | 17,0% | 1,1% points |
Ströer Turkey
| In EUR m | Change | Change | ||
| 3M 2013 | 3M 2012 | In EUR m | in % | |
| Revenue | 20,3 | 17,1 | 3,2 | 19,0% |
| Billboard | 15,6 | 13,3 | 2,3 | 17,6% |
| Street Furniture | 4,7 | 3,8 | 0,9 | 24,0% |
| Transport | 0,0 | 0,0 | 0,0 | -3,6% |
| Other | 0,0 | 0,0 | 0,0 | -8,0% |
| Organic growth | 20,0% | -5,1% | 25,1% points | |
| Operational EBITDA | -0,3 | -2,7 | 2,3 | 87,2% |
| Operational EBITDA margin | -1,7% | -15,6% | 13,9% points |
Other
| In EUR m | Change | Change | ||
| 3M 2013 | 3M 2012 | In EUR m | in % | |
| Revenue | 9,8 | 11,3 | -1,4 | -12,8% |
| Billboard | 9,2 | 10,6 | -1,4 | -12,9% |
| Street Furniture | 0,1 | 0,1 | 0,0 | -13,4% |
| Transport | 0,1 | 0,1 | 0,0 | -9,5% |
| Other | 0,4 | 0,5 | 0,0 | -10,7% |
| Organic growth | -13,1% | -5,3% | -7,8% points | |
| Operational EBITDA | -1,5 | -1,3 | -0,2 | -11,2% |
| Operational EBITDA margin | -15,2% | -11,9% | -3,3% points |
[1]Organic growth: 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 net of the financial result adjusted for exceptional items and the normalized tax expense
[6]Calculated as adjusted profit for the period divided by the number of shares outstanding after the IPO
[7]Calculated as actual profit or loss for the period divided by the number of shares outstanding after the IPO
[8]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
[9]Cash ?ows from operating activities less cash ?ows from investing activities
[10]Financial liabilities less derivative financial instruments and cash
[11]Headcount
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 www.stroeer.de.