Release Date: August 08, 2024
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 record sales growth of 12% in H1 2024, reaching EUR965 million.
- The digital out-of-home segment grew by 29%, showcasing strong market momentum.
- Adjusted EBITDA increased by 16%, from EUR227 million to EUR263 million, indicating effective cost management.
- The company reported a significant improvement in free cash flow, from a negative EUR16 million in H1 2023 to a positive EUR22 million.
- Stroeer's investment in digital infrastructure is paying off, with digital out-of-home expected to comprise over 50% of the business by 2026.
Negative Points
- The Asam segment faced challenges, with reduced trading and wholesale distribution impacting performance.
- Higher interest rates led to increased financial costs, affecting the financial result.
- The company faces continued headwinds in certain sectors, such as tourism and transport.
- Despite strong growth, the visibility of future bookings is reduced due to shorter planning cycles of national advertisers.
- The ongoing volatility in the China market poses challenges for the Asam business segment.
Q & A Highlights
Q: Can you provide more details on Statista's performance and future growth expectations?
A: Christian Schmalzl, Co-CEO, explained that Statista's growth had slowed due to structural changes and management transitions. However, the company is now on a positive trajectory with new leadership and operational improvements. They expect Statista to return to its historic growth track by 2025, with increasing revenue and profitability.
Q: How does the current performance of Asam affect its potential sale?
A: Henning Gieseke, CFO, noted that Asam's core business remains strong, and the volatility in the China market is not expected to impact the sale process significantly. The primary value lies in the DACH region's core business, which has grown substantially since acquisition.
Q: What is the impact of the UEFA Euro on out-of-home advertising growth, and what are the expectations for Q3?
A: Henning Gieseke mentioned that the UEFA Euro contributed significantly to Q2 growth, with organic growth reaching over 20%. For Q3, they expect around 10% organic growth, considering the absence of the Euro's impact and a two-year comparison showing consistent growth.
Q: How does the shift towards digital and national advertising affect forecasting and visibility?
A: Christian Schmalzl explained that digital and national advertising have shorter planning cycles, reducing visibility. However, this also allows for more revenue generation towards the end of the quarter. They are optimizing forecasting tools to better predict these patterns, despite the reduced visibility.
Q: What are the expectations for CapEx and programmatic revenue in the future?
A: Henning Gieseke stated that CapEx is expected to decrease as a percentage of revenue, with major investments behind them. Christian Schmalzl added that programmatic revenue accounted for about 55% of digital out-of-home revenue in the first half, driven by national demand.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
