Ströer Media SE posts record-high earnings in fiscal year 2014

Ströer Media SE continues its profitable growth, with its fiscal year 2014 record figures in company history. Thanks to its strategic realignment, Ströer is now successfully established in the market as an integrated and increasingly digital media company and is one of the leading nationwide marketers in the media segment. The expansion of our business to include the new Digital segment made a significant contribution to this development. Due to its broad portfolio, Ströer is capable of providing its customers with individual communication solutions across the entire value chain.

Revenue grew in fiscal year 2014 by around 16% to EUR 721.1m with organic revenue growth at 11%. Revenue amounted to EUR 211.8m in the fourth quarter of 2014, up by 10%. Organic revenue growth also came to 10%. The Digital segment was strongly influenced by the digital transformation and was a significant driver of growth, while the proactive management of the German out-of-home business and the expansion of the regional business also had a positive effect. Operational EBITDA climbed to EUR 148.1m (up 25%) as a result of the considerably improved revenue situation. The operational EBITDA margin was 20.2%, 1.6 percentage points above the prior-year figure. The EBITDA margin rose by 2.2 percentage points in the fourth quarter to 28%.

Adjusted profit rose to EUR 56.3m in the reporting period (up 55%) and to EUR 29.1m in the fourth quarter (up 25%). Ströer’s profit underscores the profitable growth course which the Company embarked upon two years ago.

The healthy performance of the operating business also had a positive effect on the financial position. Within the space of a year, Ströer reduced its leverage ratio (net debt to operational EBITDA) considerably from 2.8 to 1.9 at the end of the fiscal year, the lowest ratio since the Company went public.

“2014 was a record-setting year for Ströer. Our key financial figures show a very positive development. We are in the process of becoming an integrated and increasingly digital media company. The digital transformation presents an excellent opportunity for us to significantly advance our business,” commented Udo Müller, CEO of Ströer. “The new fiscal year has got off to a very good start and promises further profitable growth. For the whole of 2015, we anticipate organic growth in the mid single-digit range and operational EBITDA of between EUR 170m and EUR 180m.”

The board of management and supervisory board of Ströer Media SE will propose to the shareholder meeting on 30 June 2015 to increase the dividend to 40 cents per qualifying share for fiscal year 2014.

 

Operating segments

Ströer Germany
Revenue for the year in the Ströer Germany segment increased by 10.6% to EUR 465.1m. In the fourth quarter, revenue grew by 11.4% to EUR 132.1m. Operational EBITDA made a highly positive development, rising 26.1% in the fourth quarter to EUR 47.5m. EBITDA came to EUR 118.9m for 2014 as a whole, marking an increase of 18.4%. The EBITDA margin also improved considerably to 36% in the fourth quarter and to 25.6% for the year overall. Revenue growth in 2014 was primarily driven by the expansion of national and regional sales activities. The Ströer Group’s wide variety of digital and analog products also had a strong positive impact on the revenue development. The segment thus grew more sharply than the overall national advertising market.

Ströer Digital
The expansion to include online advertising companies constitutes a cornerstone of the Ströer Group’s corporate strategy and is a primary driver of growth within the Group. Annual revenue in the Digital segment rose to EUR 122.9m, nearly double the prior-year figure. Revenue grew by 18.7% in the fourth quarter to EUR 43.5m. The sharp rise in revenue growth is attributable to strong organic growth and a more broadly focused market approach. Organic revenue growth came to 34.4% for 2014 as a whole and to 16.2% for the final quarter of the fiscal year. Operational EBITDA in the Digital segment climbed to EUR 12.4m in 2014, nearly double the prior-year figure. Operational EBITDA grew by 15.4% in the fourth quarter to EUR 6.4m.

Ströer Turkey
The Turkey segment remained stable in the face of a still-challenging market environment. Operational EBITDA rose slightly to EUR 14m for the year as a whole. The EBITDA margin rose to 16.4% in the reporting period, a positive development that is attributable to improved cost efficiency. Adjusted for exchange differences, the Ströer Turkey segment achieved organic revenue growth of 3.5%, which is due to increased regional demand. However, this was offset by the weakness of the Turkish lira against the euro, which led to an effective decline in revenue of 9.6%. As a result, the Ströer Turkey segment generated revenue of EUR 85.5m in fiscal year 2014.

“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 2014 with revenue of EUR 61.8m, an increase of 9.5%. Operational EBITDA in particular rose considerably by 64.7% to EUR 10.6m for the year on the whole. The EBITDA margin also recorded a sharp rise to 17.1% for the year as a whole. With strong revenue and sound operational EBITDA performance, the blowUP division has helped to sustain this trend. A strong increase in cost efficiency led to an improvement in Poland’s contribution to operational EBITDA. Although the Polish advertising market remains dogged by a low level of activity, it has nonetheless stabilized compared with the prior year.

The Group’s financial figures at a glance

In EUR m	2014	2013	Change
Revenue (1)	721.1	622.0	15.9%
by segment
Ströer Germany (2)	465.1	420.6	10.6%
Ströer Turkey	85.5	94.6	-9.6%
Ströer Digital (Online)	122.9	64.4	90.8%
Other (Ströer Poland and blowup)	61.8	56.4	9.5%
by product group
Billboard (2)	322.1	288.8	11.5%
Street furniture (2)	149.5	144.9	3.1%
Transport (2)	101.9	97.7	4.3%
Digital (Online)	122.2	64.2	90.3%
Other (2)	38.0	39.2	-3.2%
Organic growth (%) (3)	11.4	3.5
Gross profit (4)	215.9	187.8	14.9%
Operational EBITDA (5)	148.1	118.0	25.5%
Operational EBITDA margin (5) (%)	20.2	18.6
Adjusted EBIT (6)	98.5	72.0	36.9%
Adjusted EBIT margin (6) (%)	13.4	11.3
Adjusted profit or loss for the period (7)	56.3	36.3	55.0%
Adjusted earnings per share (8) (EUR)	1.10	0.77	43.7%
Profit or loss for the period (9)	24.0	4.5	>100%
Earnings per share (10) (EUR)	0.44	0.08	>100%
Investments (11)	45.2	39.0	16.1%
Free cash flow (12)	65.5	4.1	>100%
	31 Dec 2014	31 Dec 2013	Change
Total equity and liabilities (1)	952.0	953.6	-0.2%
Equity (1)	320.1	296.7	7.9%
Equity ratio (%)	33.6	31.1
Net debt (13)	275.4	326.1	-15.5%
Employees (number) (14)	2,380	2,223	7.1%

(1) Joint ventures are consolidated at-equity - according to IFRS 11
(2) Joint ventures are consolidated proportional (management approach)
(3) Excluding exchange rate effects and effects from the (de-)consolidation and discontinuation of operations (Joint ventures are consolidated proportional)
(4) Revenue less cost of sales (Joint ventures are consolidated at-equity - according to IFRS 11)
(5) Earnings before interest, taxes, depreciation and amortization adjusted for exceptional items (Joint ventures are consolidated proportional)
(6) Earnings before interest and taxes adjusted for exceptional items, amortization of acquired advertising concessions and impairment losses on intangible assets (Joint ventures are consolidated proportional)
(7) Adjusted EBIT before non-controlling interest net of the financial result adjusted for exceptional items and the normalized tax expense (Joint ventures are consolidated proportional)
(8) 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) plus time-weighted addition of the shares from the capital increase (6,771,546) on 3 June 2013
(9) Profit or loss for the period before non-controlling interest (Joint ventures are consolidated at-equity - according to IFRS 11)
(10) 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) plus time-weighted addition of the shares from the capital increase (6,771,546) on 3 June 2013
(11) Including cash paid for investments in property, plant and equipment and in intangible assets (Joint ventures are consolidated at-equity - according to IFRS 11)
(12) Cash flows from operating activities less cash flows from investing activities (Joint ventures are consolidated at-equity - according to IFRS 11)
(13) Financial liabilities less derivative financial instruments and cash (Joint ventures are consolidated proportional)
(14) Headcount of full and part-time employees (Joint ventures are consolidated proportional)