Ströer increases revenue and earnings significantly in the first six months following the acquisition of T-Online

Ströer continued on its successful growth course in the second quarter of 2016. Revenue in the first six months was up 38.2% from EUR 363.4m to EUR 502.3m. The increase primarily stems from the acquisition of T-Online in November 2015, along with organic revenue growth of 8.7%. Bolstered by the good operating performance and the acquisition of T-Online, operational EBITDA climbed steeply by 46.2% to EUR 114.6m. Adjusted EBIT also increased in this context and was up 68.7% to EUR 75.9m. Adjusted H1 earnings likewise rose sharply, up 79.2% to EUR 60.6m. The free cash flow before acquisitions improved significantly, increasing by more than EUR 35m to EUR 37.8m (prior year: EUR 0.2m). The leverage ratio at the end of the first six months of 2016 improved to 1.5 compared to 1.9 in the prior-year period.

“We had an excellent first half year and our financial ratios also developed exceptionally well. We recorded a strong increase in revenue and earnings from organic growth as well as our value-enhancing acquisitions. We combine the profitability of well established businesses with the dynamics of fast-growing and young business models – paving the way for long-term and profitable growth. Our strategy is paying off,” says Udo Müller, CEO of Ströer. “Given the positive outlook, we are confirming our current guidance of EBITDA of more than EUR 280m and consolidated revenue of between EUR 1.1b and EUR 1.2b for 2016.”

Operating segments

Digital

The Ströer Digital segment was able to further increase revenue in the first half of the year. Revenue in the Digital segment was up from EUR 88.2m to EUR 210.3m in the first six months of 2016. The increase primarily stems from the acquisition of T-Online in November 2015, along with organic revenue growth of 10.0%. The revenue contributions from the investments made in new digital business models for the Transactional product group (such as Statista and stayfriends) also contributed to this development. Thanks to Ströer's digital strategy, the Company is increasingly able to leverage synergies and economies of scale on both the revenue and cost side. However, Ströer is also investing heavily in the development of fast-growing business models. This is reflected by the operational EBITDA margin of 25.6% compared with 27.2% in the prior year.

Out-of-Home Germany

The Out-of-Home Germany segment was able to build on the excellent performance in the prior year in the first half of 2016. H1 revenue rose 9.6% from EUR 214.1m to EUR 234.6m. In addition to the continued robust demand, additional sales measures spurred on growth. The large formats product group (previously the billboard product group), which targets both national and regional customer groups, benefited above all from the continued demand for traditional out-of-home products. Numerous other measures in the national sales organization also boosted revenue. The ongoing expansion of the regional sales force is stimulating growth too. The street furniture product group, whose customers tend to have a national or international focus, likewise grew noticeably. The transport product growth also made use of the positive momentum in the segment, albeit at a lower level. The tangible rise in revenue was accompanied by a slower rate of growth in cost of sales. The operational EBITDA margin rose to 25.2% (prior year: 23.4%). 

Out-of-Home International

The OOH International segment includes the Turkish and Polish out-of-home activities and the western European giant poster business of the blowUP group. Revenue in the OOH International segment was down slightly by 4.5% to EUR 69.8m (prior year: EUR 73.1m) in the first half of 2016. Although growth in Turkey in particular slowed in the second quarter, all three subsegments notched up growth of 3.2% year on year in local currency despite very challenging external conditions due to the geopolitical tensions in Turkey in particular in the second quarter. The exchange rates also had a noticeably dampening effect on cost of sales, with revenue-linked higher costs being offset by exchange rate effects. Overall, the segment generated operational EBITDA of EUR 11.3m (prior year: EUR 11.7m) and an operational EBITDA margin of 16.2% (prior year: 15.9%).