Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stroeer SE & Co KGaA (SOTDF, Financial) achieved a significant milestone by surpassing the EUR2 billion revenue mark for the first time, with a 7% increase in total revenue.
- Digital out of home (DOOH) revenue grew by over 23%, significantly boosting the group margin and demonstrating strong performance in the fastest-growing advertising category.
- EBITDA adjusted increased by 10% to EUR626 million, reflecting effective cost management and operational leverage in the core out of home segment.
- Free cash flow adjusted nearly doubled from EUR81 million to EUR158 million, driven by positive business development, lower capital expenditure, and tax expenses.
- The company has a strong order book for Q1 2025, expecting top-line growth between 13% and 14%, with digital out of home projected to grow in the mid to high-20% range.
Negative Points
- The Christmas advertising season in November and December was softer than expected, impacted by the unclear political situation in Germany.
- Classic out of home advertising experienced a decline of 6.8% in Q4, indicating challenges in the traditional advertising segment.
- The financial result decreased due to higher interest costs and currency effects, impacting overall earnings.
- Sales growth in the digital and dialogue segment was somewhat muted, with digital revenues only increasing by 4.5% in Q4.
- The Asam business faced challenges due to reduced trading and wholesale distribution in China, affecting overall segment performance.
Q & A Highlights
Q: Can you provide more details on the Q4 performance of Statista and the outlook for Q1, especially in comparison to Asam?
A: Christian Schmalzl, Co-CEO, explained that while Statista's Q4 growth was slightly below 20%, they are satisfied with the overall development. For Q1, they prefer to provide guidance at the segment level due to minor quarterly deviations. Statista is expected to continue its positive trajectory into 2025, driven by restructuring efforts, AI integration, and changes in client research processes.
Q: What is the status of the ongoing sales process, and can you provide any updates on the potential disposal of Asam?
A: Christian Schmalzl clarified that there is no formal sales process. They have been approached by external parties, leading to open-ended discussions. Regarding Asam, Henning Gieseke, CFO, stated that it remains a non-core asset, and they will communicate any progress when appropriate.
Q: Why was Q4 classical out of home relatively weak, and what gives you confidence in its growth for Q1?
A: Christian Schmalzl attributed the Q4 weakness to advertisers pulling forward their budgets to earlier in the year. However, Q1 is already booked, and they have confidence in mid-single-digit growth due to strong regional and local sales efforts and the need for classic advertising in specific campaigns.
Q: Can you provide more color on the Q1 outlook for out of home media and the impact of RBL acquisition?
A: Christian Schmalzl noted that the RBL acquisition contributes roughly 2% to the Q1 growth, with the remaining growth being organic. The out of home media segment is expected to see strong growth, driven by national advertisers, digital out of home, and programmatic sales.
Q: How do you view the potential for double-digit growth in digital out of home for 2025, and what factors are driving this?
A: Christian Schmalzl expects digital out of home to continue its strong growth, driven by increased inventory, pricing, and demand. They plan to add approximately 500 new screens in 2025, with ongoing improvements in technology and data enhancing targeting capabilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
