Ströer exceeds own expectations in the third quarter of 2020
Confident outlook for robust year-end business / Ströer successfully protects prior-year margin of 35 percent during the crisis thanks to its ‘OOH plus’ strategy / Moderate decline in consolidated revenue (down by 6 percent) to EUR 355m (prior year: EUR 380m) due to the coronavirus pandemic; decrease in organic revenue (down by 5 percent) / EBITDA (adjusted) contracts by 5 percent from EUR 131m to EUR 125m
Ströer SE & Co. KGaA is presenting its results for the third quarter of 2020. Against the backdrop of the coronavirus pandemic and the revival of most aspects of public life, Ströer was once again able to demonstrate the strength of its ‘OOH plus’ strategy – the combination of the core OOH business and the supporting Digital OOH & Content and Direct Media segments. Content-based business segments such as T-Online, the world’s leading business data platform Statista, and direct media activities proved to be particularly robust in this challenging environment.
Rather than falling by 15-20 percent as anticipated, the Group’s consolidated revenue declined relatively modestly – by approximately 6 percent – in the third quarter of 2020, from EUR 380m to EUR 355m. Organic revenue contracted at a similar rate (down by 5 percent). EBITDA (adjusted) for the period from July to September 2020 was down by 5 percent year on year at EUR 125m (prior year: EUR 131m).
“Our performance in the third quarter clearly demonstrates the strength of our strategic setup. Our ‘OOH plus’ strategy and our focus on Germany enable us to take on the challenges of the coronavirus pandemic and to leverage both short-term and long-term opportunities and potentials,” says Udo Müller, founder and co-CEO of Ströer. “Our out-of-home advertising business, in particular, bounced back just as quickly in the second half of the third quarter as it had declined in the first half of the second quarter. Some areas have even seen catch-up effects and revenue growth compared with the corresponding prior-year period.”
“Thanks to our market insight, the disciplined and consistent implementation of our cost management approach, and our highly motivated workforce, we were able to exceed our targets for the third quarter of 2020 and, most importantly, protect the margin we achieved in the previous year. We continue to take a confident view of our long-term structural prospects. Based on the information available to us, we do not expect the renewed lockdown in November to have a substantial impact on our year-end business,” says Christian Schmalzl, co-CEO of Ströer.
Against the backdrop of decline in corona virus cases in the first half of the third quarter, revenue from regional and local marketing business remained very robust. By contrast, the performance of the national business was modest, especially due to the renewed rise in infections towards the end of the quarter. As a result, revenue in the OOH Media segment in the third quarter of 2020 declined both in reported and in organic terms by around 24 percent, from EUR 171m to EUR 131m. The segment’s EBITDA (adjusted) fell by 27 percent over the same period, from EUR 77m to EUR 57m. Thanks to the successful implementation of efficiency enhancement measures, the EBITDA margin (adjusted) stayed more or less on a par with that of the corresponding prior-year period at 43.4 percent (Q3 2019: 45.1 percent).
Digital OOH & Content
Revenue growth in the Digital OOH & Content segment clearly illustrates the strength of the ‘OOH plus’ strategy. In the third quarter of 2020, this segment generated almost the same level of revenue as in the comparative prior-year period despite the coronavirus pandemic. Total reported revenue for the quarter came to EUR 133m (Q3 2019: EUR 134m), which represents only a minor contraction of 0.2 percent. In organic terms, revenue increased by around 3 percent. EBITDA (adjusted) grew at an even greater rate than revenue, coming to EUR 53m. This represents an improvement of around 20 percent compared with the corresponding prior-year figure of EUR 44m. The EBITDA margin (adjusted) stood at 39.5 percent (Q3 2019: 32.8 percent) and therefore exceeded the corresponding prior-year figure significantly.
Revenue growth in the Direct Media segment was very encouraging, thanks to better access to customers for Ranger as well as growing acceptance of call center services and the success of the ASAM Beauty business. All in all, segment revenue went up by around 15 percent in the third quarter to EUR 97m (Q3 2019: EUR 84m). Organic growth over the same period amounted to around 20 percent. EBITDA (adjusted) in the third quarter came to around EUR 20m (Q3 2019: EUR 15m) and the corresponding EBITDA margin (adjusted) was 20.5 percent (Q3 2019: 18.2 percent).
This press release contains “forward looking statements” regarding Ströer SE & Co. KGaA (“Ströer”) or the Ströer Group, including opinions, estimates and projections regarding Ströer’s or the Ströer Group’s financial position, business strategy, plans and objectives of management and future operations. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Ströer or the Ströer Group to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements speak only as of the date of this press release and are based on numerous assumptions which may or may not prove to be correct. No representation or warranty, express or implied, is made by Ströer with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. The information in this press release is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning Ströer or the Ströer Group. Ströer undertakes no obligation to publicly update or revise any forward looking statements or other information stated herein, whether as a result of new information, future events or otherwise.