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Ströer SE & Co. KGaA — Earnings Release 2014
Apr 1, 2015
417_ip_2015-04-01_04261117-7de6-4f2e-9b58-6792cc225578.pdf
Earnings Release
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Q4/FY 2014 RESULTS PRESENTATION
25th March 2015 | Ströer Media SE
Agenda Q4/FY 2014
- Key developments - Udo Müller, CEO
- Operational highlights - Christian Schmalzl, COO
- Financials - Dr. Bernd Metzner, CFO
- Summary & Outlook - Udo Müller, CEO
Ströer Media SE 2014 results
| EURm | FY 2014 | ▲ | Q4 2014 | ▲ | ||
|---|---|---|---|---|---|---|
| Revenues | reported (1) | 721.1 | +16% | 211.8 | +10% | |
| organic (2) | +11% | +10% | ||||
| Operational EBITDA | 148.1 | +25% | 60.2 | +20% | ||
| Op. EBITDA margin | 20.2% | +1.6%pts | 28.0% | +2.2%pts | ||
| EBIT (adj.) (3) | 98.5 | +37% | 45.9 | +25% | ||
| Net income (adj.) (4) | 56.3 | +55% | 29.1 | +25% | ||
| Free cash flow | 65.5 | +61EURm | 31.4 | +9EURm | ||
| (5) Capex |
45.2 | +16% | 19.4 | +57% | ||
| 31 Dec 2014 |
31 | Dec 2013 | ||||
| Net debt (6) / Leverage Ratio |
275.4 / 1.9x | 326.1 / 2.8x |
(1) According to IFRS 11 (2) Organic growth = excluding exchange rate effects and effects from the (de)consolidation and discontinuation of operations (3) EBIT adjusted for exceptional items, amortization of acquired advertising concessions and impairment losses on intangible assets (Joint ventures are consolidated
proportional) (4) EBIT (adj.) net of the financial result adjusted for exceptional items and the normalized tax expense (32.5% tax rate) (5) Cash paid for investments in PPE and intangible assets
(6) Net debt = financial liabilities less cash (excl. hedge liabilities)
FY 2014: Digitalization fuels revenue growth
We delivered well on our targets
| Actuals 2014 |
Targets 2014 |
|---|---|
| > 11% organic growth |
At least 10% organic growth rate |
| 148 EURm operational EBITDA |
Operational EBITDA of around 145 EURm |
| Net Income (adj) of 56.3 EURm |
Net Income (adj) of at least 50 EURm |
| Leverage 1.9 |
Leverage of at least 2.0 |
| ROCE at 14% | ROCE at least 10% |
Drivers behind success
Online consolidation:
Excellent position to monetize premium assets
| 2012 | End of 2014 |
||||||
|---|---|---|---|---|---|---|---|
| # | Vermarkter | % | Mio | # | Vermarkter | % | Mio |
| 1 | Tomorrow Focus Media | 61.4 | 31.22 | 1 | Ströer Digital |
66.5 | 37.02 |
| 2 | InteractiveMedia CCSP |
56.9 | 28.95 | 2 | InteractiveMedia CCSP |
62.2 | 33.95 |
| 3 | United Internet Media | 54.7 | 27.83 | 3 | Axel Springer Media Impact | 58.8 | 33.17 |
| 4 | Axel Springer Media Impact | 53.6 | 27.23 | 4 | SevenOne Media |
54,0 | 30.91 |
| 5 | eBay Advertising Group | 51.8 | 26.35 | 5 | Tomorrow Focus Media | 53.9 | 29.72 |
| 6 | IP Deutschland | 50.3 | 25.56 | 6 | United Internet Media | 51.3 | 29.19 |
| 7 | SevenOne Media |
50.1 | 25.49 | 7 | IP Deutschland | 47.4 | 26.28 |
| 8 | OMS | 45.2 | 22.98 | 8 | eBay Advertising Group Deutschland | 47.2 | 25.75 |
| 9 | Ströer Interactive |
45.2 | 22.98 | 9 | OMS | 45.5 | 24.50 |
| 10 | G+J Electronic Media Sales | 42.5 | 21.63 | 10 | G+J Electronic Media Sales | 38.4 | 22.79 |
Premium exclusive marketing for around > 400 websites
15 channels in place
Technological leadership
Access to agencies
Sales excellence: Delivering organic growth
actual prospect
0%
Business development: Strong M&A execution in place
| > 15 acquisitions the last 2 years |
Tech & Entertainment verticals |
|---|---|
| Focus on sales houses and bolt-on publishing acquisitions for marketing verticals |
Focus on sales houses and bolt-on publishing acquisitions for marketing verticals
Strong market position in all product segments
Inception – Research – Innovation – Combined Deals
Operational highlights FY 2014
Drivers behind the success in 2014: Deeper dive into online and sales
Current digital display market Germany: Schematic overview and key dynamics & trends
Beyond AGOF No. 1 position (reach): Broadest channel portfolio in the market!
Beyond AGOF No. 1 position (reach): Broad range of top premium sites & publisher!
Mobile and video as key market drivers: Massively growing share within Ströer portfolio!
Consolidation effects and strategy Example Tech & development resources
Ströer Digital Group end of 2014: PMI processes led to an integrated ecosystem!
Growing market share for Out of Home: Category leader Ströer driving market development
| Q1 | Q2 | Q3 | Q4 | Q1-Q4 | |||
|---|---|---|---|---|---|---|---|
| S S O R G n e s el Ni |
Total Ad Market (in T€) | 6,284 | 6,919 | 6,228 | 8,865 | 28,296 | |
| Change in % vs. previous year |
2.8% | 6.5% | 2.9% | 5.10% | 4.5% | ||
| Total OoH market (in T€) |
330 | 403 | 395 | 429 | 1.557 | ||
| Change in % |
0.8% | 6.6% | 6.8% | 5.3% | 5.3% | ||
| OoH share (in %) |
5.3% | 5.8% | 6.3% | 4.8% | 5.5% | ||
| Ströer clearly outperforming both total ad markets & OoH peers |
Incremental local sales development: Current performance fully on track
Revenue development: Currently 70% retention rate yoy through high signage share!
More traction on key advertisers, e.g. GM/Opel: OoH Branding in combination with mobile
More traction on key advertisers, e.g. GM/Opel: OoH Branding in combination with mobile
Broad communication over the social web: Social interaction hub
Mobile ads within facebook newsfeed
More traction on key advertisers, e.g. mobilcom: OoH Branding in combination station domination
More traction on new clients, e.g. Lemonaid: Public Video incl. reserach (sales-tracking)
Broad Public Video campaign in stations, shopping malls and underground-systems
Integrating "outernet" and internet: Best in class case for EBAY!
Video to be shown during Earnings Presentation
Financials
Ströer Media SE 2014 results
| EURm | FY 2014 | FY 2013 | ∆ |
|---|---|---|---|
| (1) Revenues (reported) |
721.1 | 622.0 | +16% |
| Adjustments (IFRS 11) |
12.5 | 12.8 | -2% |
| Cost of Sales |
-505.2 | -434.2 | -16% |
| SG&A | -179.6 | -166.8 | -8% |
| Other operating result |
13.6 | 8.9 | +55% |
| Operational EBITDA | 148.1 | 118.0 | +25% |
| Margin % | 20.2 | 18.6 | +160bps |
| Depreciation | -40.2 | -39.1 | -3% |
| Amortisation | -42.4 | -37.7 | -13% |
| Exceptional items |
-9.9 | -5.2 | -89% |
| (2) EBIT (adjusted) |
98.5 | 72.0 | +37% |
| (3) Net income (adjusted) |
56.3 | 36.3 | +55% |
| Net income | 24.0 | 4.5 | >400% |
(1) According to IFRS 11 (2) EBIT adjusted for exceptional items, amortization of acquired advertising concessions and impairment losses on intangible assets (Joint ventures are consolidated proportional) (3) EBIT (adj.) net of the financial result adjusted for exceptional items and the normalized tax expense (32.5% tax rate)
< 27 >
Performance of Ströer Germany
- Organization realignment and numerous sales initiatives
- Revenue growth from all product segments
- Significant EBITDA Margin improvements
Performance of Ströer Digital
- Revenues doubled to 122.9 EURm
- Organic growth at 34% yoy
- Operational EBITDA almost doubled
Performance of Ströer Turkey
- Slight organic growth based on regional demand despite macro uncertainties
- Currency devaluation effects impaired reported revenue line
- Improved cost base leading to higher operational EBITDA y-o-y
Performance of Ströer Poland and BlowUp
- In Poland, media markets still soft but overall stabilized vs 2013
- Op. EBITDA of Ströer Poland benefitting from rigorous cost saving program
- BlowUP with strong topline and operational EBITDA performance
Free cash flow: Doubled within one year
| Free cash flow (before M&A) |
12M 2014 | 12M 2013 | ∆ |
|---|---|---|---|
| Op. EBITDA | +148.1 | +118.1 | +25% |
| - Interest (paid) |
-14.4 | -18.0 | +20% |
| - Tax (paid) |
-8.4 | -17.0 | +51% |
| -/+ ∆ WC | +15.0 | +1.6 | >800% |
| - Others |
-16.7 | -10.1 | -65% |
| Operating Cash Flow | +123.4 | +74.4 | +66% |
| - Capex |
-44.2 | -35.1 | -26% |
| Free cash flow (before M&A) |
+79.2 | +39.3 | +102% |
Better underlying performance leading to increase of operational EBITDA
- Continuous improvement of net interest cash out
- Tax in 2014 normalized
Comfortable financial situation for future growth
Financial situation
- Strong free cash flow of 65 EURm
- Net debt down 51 EURm to 275 EURm (PY: 326 EURm)
- Leverage of 1.9x by year-end
Future use of free cash flow
- Value enhancing investments and acquisitions in digitalization
- Increase of dividends to 0.40 Euro per share proposed (19.5 EURm payout)
Summary & Outlook
Summary: Ströer's strategy pays off
Revenue growth by 15.9% to 721.1 EURm
Operational EBITDA expanded by 25.5% to 148.1 EURm
Net income (adj.) improved by 55% to 56 EURm
Free cash flow improved by 61 EURm to 65 EURm YTD
Strong financial position, leverage ratio down to 1.9x EBITDA
For the full year of 2015 we expect a mid single digit organic growth rate and an operational EBITDA between 170 and 180 EURm
Contact
Ströer Media SE Ströer Allee 1 50999 Köln
Investor Relations: Dafne Sanac
Tel. +49 2236 / 96 45 - 356 Fax +49 2236 / 96 45 - 6356
[email protected] www.stroeer.de
Disclaimer
This presentation contains "forward looking statements" regarding Ströer Media SE ("Ströer") or Ströer Group, including opinions, estimates and projections regarding Ströer 's or 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 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 presentation 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 presentation is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning Ströer or 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.