Successful start to fiscal year 2014 for Ströer Media AG

Ströer Media AG’s business developed positively in the first quarter of 2014. Consolidated revenue grew 19.1% year on year to EUR 145.7m. Organic growth also developed well, rising by 4.5%. This positive trend was primarily driven by significant revenue from the new Digital segment (Online) and two-digit organic growth in Turkey. Strategic acquisitions such as Tube One Networks and marketing partnerships such as with the digital sports advertising agency mediasports also laid promising foundations for a continuation of our positive business development.

Operational EBITDA was up a significant 22% to EUR 16.5m. The operational EBITDA margin also increased from 10.8% to 11.1%.

Adjusted profit for the period stood at EUR 0.1m, which was a clear improvement on the negative figures reported in the last four years.

Net debt increased marginally by EUR 2.4m in the reporting period to EUR 328.5m. In relation to operational EBITDA, this computes to a leverage ratio (the ratio of net debt to operational EBITDA) of 2.72. During the fiscal year, Ströer Media AG concluded an agreement on early refinancing of the credit facilities at considerably more favorable terms which will reduce borrowing costs from 2015 by more than 75% compared to the 2010 financing. The new credit facility was used to repay the existing syndicated loan.

The supervisory board and board of management have decided to propose to the shareholders at the Company’s annual shareholder meeting on 18 June 2014 that a dividend of EUR 0.10 per qualifying share be distributed for the first time. This means that the dividend originally planned for fiscal year 2014 is being brought forward one year in response to the positive business performance. The board of management intends to pursue a sustainable dividend policy for the years to come.

“We are extremely pleased at making such a good start to the year. Positive contributions have been reported by all the divisions. We are particularly happy that our digital activities have contributed positively to revenue and are confident that they will continue to be a significant driver of our growth in the quarters ahead,” said Udo Müller, CEO of Ströer.

Operating segments

Ströer Germany
In the first quarter of 2014, the Ströer Germany segment increased its revenue by EUR 2.0m year on year to EUR 97.4m. The segment’s operational EBITDA hovered around the prior-year level at EUR 17.3m. At the same time, the operational EBITDA margin decreased slightly to 17.8% (prior year: 18.2%).

Ströer Turkey
The Ströer Turkey segment generated organic revenue growth of 10.1% in the first quarter of 2014. Owing to negative exchange rate effects, segment revenue expressed in euros was down 14.4% to EUR 17.4m. In contrast to prior years, positive operational EBITDA of EUR 0.7m (prior year: EUR -0.3m) was generated in Turkey. The operational EBITDA margin was also boosted significantly, from -1.7% to 4.1%.

Ströer Digital (Online)
Revenue in the new Ströer Digital (Online) segment totaled EUR 22.6m in the first quarter of 2014. As expected, operational EBITDA amounted to EUR 0.6m in the reporting period due to seasonal effects. At the same time, the integration of the newly acquired entities into the Ströer Group remained on schedule. Digital business represents an important pillar of Ströer’s corporate strategy going forward. The new Digital (Online) segment includes the revenue and earnings contributions of adscale GmbH, which was acquired in April 2013, the Ströer Digital Group, which was acquired in full in June 2013, the location-based advertising segment of Servtag GmbH, which was acquired by Ströer Mobile Media GmbH, the Ballroom Group and MBR Targeting GmbH.

“Other” segment
The “Other” segment includes our Polish out-of-home activities and the western European giant poster business of the blowUP division. Poland improved its contribution significantly and broke even with largely unchanged revenue. The international giant poster business reported steep revenue growth of 57%. The segment’s revenue increased by 17.7% to EUR 11.6m. Operational EBITDA was positive for the first time at EUR 0.1m (prior year: EUR -1.5m). The operational EBITDA margin increased to 0.8%.

Outlook

For the second quarter of 2014, Ströer expects a mid to high single digit percentage organic revenue growth rate, and reported revenue in the low teens.

The Group’s financial figures at a glance