Ströer SE & Co. KGaA

Earnings Release • Nov 13, 2018

Results 9M 2018 (Continuing Operations)

		Results 9M 2018 (Continuing Operations)
m€		9M 2018	9M 2017 (pro forma)(1)	▲
	Reported	1,112.7	870.4	+28%
Revenues	Organic(2)	8.1%	9.1%	-1.0%pts
Operational EBITDA		363.9	317.2	+15%
EBIT (adjusted)(3)		164.4	139.9	+18%
EBIT (adjusted) margin		14.8%	16.1%	-1.3pts
Net income	(adjusted)(3)	119.1	100.6	+18%
Operating cash flow		226.0	213.5	+6%
Capex		88.9	88.6	+0.4%
		30 Sep 2018	30 Sep 2017
	Net Debt(4) / Leverage Ratio(5)	623.2 / 1.8x	545.9 / 1.8x

We stay fully on Track with our organic long-term Growth Strategy

Focus on Germany: Successful Termination of Engagement in Turkey Ilbak Holding acquired final 90%

• Valued around 15m€

Sustainable Momentum for OOH in Germany

Mobility in Germany Development Gross Advertising Spendings

ma 2018 Plakat confirms Out-of-Home growing reach: reach of outdoor advertising remains consistently stable Forecast Outdoor 2020**** +3,3% Billboard, gross advertising 2016 – 2019** 1.460.553 1.517.881 1.537.359 1.627.992 2016 2017 2018*** 2019*** +5,8%

across all advertising media, local sizes and target groups, other broadcasting media declining (TV, radio)

* Increase in city mobility (traffic performance) compared to 2008, Source: Report "Mobility in Germany 2017"; ** Source: Nielsen Media Research,

Strategy of regional Excellence and Digitization fully on track

European Innovation Award

Do it for you 'Service Platform'

Buildup of Digital Infrastructure Roadside and in Malls / Station on Track

Strong growth of local & digital sales force

Broad Office Coverage Local Market Know-How

Integrated Offering gains Traction for large national Customers

Data aggregation

OoH Media: Sustainable Growth Performance

• Sustainable growth in Germany supported by local and regional sales initiatives
• Op. EBITDA growth influenced by product mix effects and further investments into organic growth

*Pro forma **Continuing Operations 10

Out-of-Home Media – Success Cases Q3

Oatly! 30 Creatives for Social Talk-of-town

Mc Donalds

Nestlé Purina Digital Brand Cube

Out-of-Home Media – Summary

Content Media: Profitable Growth in Q3 2018

• Strong organic growth in both newly acquired and established content media assets, all product groups positively effected
• Profitability increase driven by strong performance of Digital OOH (Public Video) and Statista
• Ongoing portfolio optimization to sharpen segment profile and focus on profitable growth

Content Media – Success Cases Q3

Tinder

Visual Storytelling TOL

roastmarket.de M.I.A. Targeting

Content Media – Summary

1 Strong backbone of highly profitable owned assets across all relevant target groups incl. unique Public Video Network (~ 20-25% of Segment) ³ Sustainable and broad range of exclusive 3rd party inventory – with further growth potential

2 Platform business opens up opportunities for further German market consolidation

4 Unique B2B Service Offering of Statista constantly outperforming midterm plan with growth rates Beyond 50% and increasing profitability

5 Proprietary tech stack with measurable results and clear path for GDPR compliant data solutions

Direct Media: Strong Growth backed by new Businesses

• Direct Media strongly above PY especially driven by acquired business in Dialog Marketing

Direct Media – Success Cases Q3 Realperson Chat Suite®

by optimise-it

DeutschlandCard Service Provider Change

Media Markt Saturn Customer Service for Online/Offline Retail

Direct Media – Summary

1 Better access to clients strengthens OOH product sales and increases share of wallet

2 Growing clients demand is driving growth for the business segment in combination with higher expectations towards integration of tech and data

3 Significant relevance after one year into the business and excellent position for further growth and margin oriented market consolidation

4 Huge potential for integrated Ströer group solutions with clients already being leveraged

5 Consolidation of all agents and direct channels on one tech and campaign management platform driving margin improvements as well as quality and flexibility for clients

IFRS 16: Implications at Ströer Group in Q3 2018 (Continuing Operations)

Impact of IFRS 16 on Ströer KPIs in Q3 2018

(Continuing Operations)		Impact of IFRS 16 on Ströer KPIs in Q3 2018	IFRS 16: Implications at Ströer Group in Q3 2018 Comment
m€	Q3 2018	Impact
Revenues	386.8	No changes
Operational EBITDA	127.1	Increase by +45.8 m€ (elimination of operating lease expenses)	leasing contracts
D&A	-85.7	Increase by -43.7 m€
EBIT (adjusted)	55.9	Increase by +2.1 m€ (as operating lease expenses are replaced by depreciation and interest)	Income
Financial result	-7.4	Increase by -5.3 m€
Net Income (adjusted)	40.6	Decrease by -2.7 m€ (timing effect due to higher interest during first years, neutral over time)	of our lenders
Free Cash Flow (before M&A)	44.1	Increase by +25.0 m€ (reclassification of lease liability repayments in Financing Cash Flow)
Liabilities	1,851.4	Thereof 1.1 bn€ IFRS 16 lease obligations (capitalized future operating lease payments)

Comment

• Scope at Ströer Group: >16,000 leasing contracts
• Main P&L effects: increase in EBITDA and EBIT, long-term neutral to Net Income Additional 1.1 bn€ liabilities have no
• Strongest effects in OoH Media
• impact on our leverage ratio definition of our lenders

IFRS 16: Financial Reporting

Consolidated Financial Statements

IFRS 16: Financial Reporting
	Consolidated Financial Statements				Comment
		Q3 2018		Q3 2017
	incl. IFRS changes	w/o IFRS changes	incl. IFRS changes	w/o IFRS changes
Quarterly Statement		*/	*/	
Presentation on Q3 2018 Statement				
					presentation

Comment

• In our quarterly statement no adoption of IFRS 16 retrospectively for 2017 (so called modified retrospective approach) changes
• For better transparency, like-for-like comparison of our financials before and after IFRS changes depicted in this presentation

Disposal OoH Turkey – Effect on Profit and Loss Statement Q3 2018 (incl. IFRS 16)

(incl. IFRS 16) m€	Group incl. discont. operations*	Discontinued operations*	Group continuing operations	Comment
Revenues (reported)	392.0	5.1	386.8
Operational EBITDA	129.4	2.3	127.1
Exceptional items	-8.4	-0.2	 -8.2	Turkish business has not been part of
EBITDA	121.0	2.1	118.9	Ströer's core business and was sold for
Depreciation & Amortization	-88.3	-2.6	-85.7	a Transaction Value of 15m€
EBIT	32.7	-0.5	33.2	 For Turkish business was originally an op. EBITDA for FY 2018 in the amount of 6m€ planned  The transaction is slightly accretive in terms of earnings and cash and unlocks management attention
Financial result	-8.3	-0.9	-7.4
Tax result	-4.0	-0.8	-3.2
Net Income	20.4	-2.2	22.6
Adjustment	19.4	1.4	18.0
Net Income (adjusted)	39.8	-0.8	40.6

Profit and Loss Statement Q3 2018 (Continuing Operations)

(Continuing Operations)
m€	Q3 2018	Q3 2017*	▲ %	Analysis
Revenues (reported)	386.8	303.6	+27%	Expansion driven by 8.1% organic growth and M&A
Operational EBITDA	127.1	108.7	+17%	Strong growth
Exceptional items	-8.2	-7.2	-14%	Material M&A and integration expenses
EBITDA	118.9	101.5	+17%
Depreciation & Amortization	-85.7	-75.6	-13%	Scoping effects of IFRS 16
EBIT	33.2	25.9	+28%
Financial result	-7.4	-7.8	+4%
Tax result	-3.2	-2.3	-38%
Net Income**	22.6	15.8	+43%
Adjustment***	18.0	18.1	-1%
Net Income (adjusted)	40.6	33.9	+20%	Strong growth – adjusted and non-adjusted

Bank Leverage Ratio (Continuing Operations)

• IFRS 16 leads to a paradigm shift in lease accounting but has no impact on our bank definition of the financial leverage of our lenders` banks
• From now on, use of leverage ratio definition based on our facility agreement as our solvency KPI ("Bank Leverage Ratio")
• Bank Leverage Ratio amounts to 1.8 as of 30st September 2018

Profit and Loss Statement Q3 2018 – As If (Before Application of IFRS 11 and IFRS 16, Continuing Operations)

(Before Application of IFRS 11 and IFRS 16, Continuing Operations)
m€	Q3 2018*	Q3 2017	▲ %	Analysis
Revenues (reported)**	386.8	303.6	+27%	Expansion driven by 8.1% organic growth and M&A
Adjustments (IFRS 11)	3.3	3.2	+3%
Revenues (Management View)	390.1	306.8	+27%
Operational EBITDA	82.6	71.8	+15%	Strong growth
Exceptional items	-8.5	-7.6	-11%	Material M&A and integration expenses
IFRS 11 adjustment	-1.4	-1.2	-18%
EBITDA	72.8	63.0	+15%
Depreciation & Amortization	-41.9	-40.2	-4%	Stable D&A
EBIT	30.9	22.9	+35%
Financial result	-2.1	-2.5	+16%
Tax result	-4.1	-3.2	-29%
Net Income***	24.7	17.2	+44%
Adjustment****	19.7	19.8	-1%
			+20%

Free Cash Flow Perspective Q3 2018 – As If (Before Application of IFRS 11 and IFRS 16, Continuing Operations)

m€	Q3 2018*	Q3 2017	Comment
Op. EBITDA	82.6	71.8
Exceptional items	-8.5	-7.6
IFRS 11 adjustment	-1.4	-1.2
EBITDA	72.8	63.0
Interest	-0.8	-0.8	2019 and 2020
Tax	-12.3	-5.6
-/+ WC	-13.1	-13.0	level
Others	+1.3	-1.8
Operating Cash Flow	48.0	41.9
Investments (before M&A)	-26.6	-27.4
	21.4	14.5

	Comment
	Free Cash Flow increased by almost 50% from 15 to 21 million Euro
	Higher taxes mainly due to procedural changes of Fiscal Tax Authorities, which lead to anticipation of prepayments; this will relieve 2019 and 2020
	Working Capital increase in line with prior year's level
	Investments into internal growth opportunities according to plan

Guidance Statement 2018: Reconfirmed

For 2018 we expect total revenues of around 1.6 billion Euro and

an Operational EBITDA of around 375 Million Euro*

Outlook for Q4: Annual Results 2018 on March 26

• 1. Similar to development of the last 23 quarters: solid business across the entire group with expected growth for 2018 in line with annual guidance 2. Overall challenging OoH Media business despite robust regional and local sales
• development and accelerating momentum in national OoH
• 1. Content Media segment consistently on track regarding top line growth, market share development as well as consolidation and integration processes with successful launch of new assets 4. Direct Media on track and in line with expectations – significant group synergies,
• cost cutting opportunities post merger and investments in new technologies

Financial Calendar 2019

Disclaimer

This presentation 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 presentation 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 presentation 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.