Ströer SE & Co. KGaA Q2 Earnings Call Highlights

Key Points

• Ströer reported solid first-half growth: Revenue rose 6% to €1.037 billion, organic growth accelerated to 2.7%, and adjusted EBITDA increased 3% to €273 million. Adjusted net income climbed 7% to €56 million.
• Out-of-home advertising was the main growth driver, with first-half revenue up 8% and digital out-of-home revenue up 18.5%; programmatic DOOH rose 29.3%. Management expects mid-single-digit out-of-home sales growth in the third quarter but warned that World Cup-related spending may have shifted forward.
• Data as a Service and e-commerce remained weak: Segment revenue fell 11.2% and adjusted EBITDA dropped 43%, while Digital and Dialog revenue growth was offset by margin pressure. Ströer maintained its 2026 guidance and expects leverage to decline to about 2.35 times by year-end.

Ströer SE & Co. KGaA ETR: SAX reported higher first-half revenue and adjusted earnings for 2026, supported by continued growth in digital out-of-home advertising, while its Data as a Service and e-commerce operations remained under pressure.

First-half revenue rose 6% on a reported basis to €1.037 billion from €980 million a year earlier. Organic growth accelerated to 2.7% from 0.5% in the prior-year period. Adjusted EBITDA increased 3% to €273 million, while adjusted EBIT rose to €150 million from €109 million. Adjusted net income increased 7% to €56 million.

For the second quarter, group revenue grew 7% to €542 million, with organic growth of 4.2%. Adjusted EBITDA rose 3% to €154 million. Reported net income, however, declined to €29.7 million from €32.3 million, reflecting higher exceptional items and a higher financial result. Adjusted net income increased 7% to €38.3 million.

Out-of-Home Advertising Drives Growth

Ströer said its out-of-home media business continued to outperform the broader German advertising market. On a gross-rate basis, the German advertising market expanded 1.9% in the second quarter, according to the company’s cited market data. Out-of-home advertising grew 8.8%, compared with a 1.1% decline in television and a 4.5% decline in print.

Ströer’s out-of-home media segment delivered reported revenue growth of 10.3% in the second quarter and 8% for the first half. Digital out-of-home, or DOOH, revenue rose 24.3% in the quarter and 18.5% in the first half, while programmatic DOOH rose 45% in the quarter and 29.3% over six months.

Interim CFO Christoph Vilanek said first-half out-of-home revenue reached €492 million. DOOH revenue increased to €207 million, aided by programmatic demand and the FIFA World Cup, which he said accounted for approximately €12 million in the segment during June. Classic out-of-home revenue declined 1% to €253 million, while services revenue rose 26.7% to €32 million.

Adjusted EBITDA for the out-of-home segment increased 10.3% to €224 million in the first half, lifting the segment’s adjusted EBITDA margin by 0.9 percentage points to 45.6%.

Management said it expects out-of-home sales to rise at a mid-single-digit percentage rate in the third quarter. The company cautioned that some advertising spending associated with the World Cup may have shifted from the second half into the second quarter. It said the order book indicated a softer third quarter but positive development in the fourth quarter.

Digital and Dialog Gains Offset by Margin Pressure

The Digital and Dialog Media segment posted reported first-half revenue growth of 14.4% to €476 million, while organic growth was 5.4%. Digital revenue increased 2.6% on a reported basis, and dialogue revenue grew 8% organically. Including revenue from the Amevida acquisition, dialogue revenue rose 25.5% on a reported basis.

Adjusted EBITDA in the segment fell 4%, or €2 million, to €57 million in the first half. Vilanek attributed the margin pressure to product mix changes and higher minimum wages in the personnel-intensive dialogue business.

He said the company has been moving some call-center work to nearshore locations in southern Europe, both for internal reasons and customer demand. The company is also reorganizing the client base acquired through Amevida. In Ranger, its dialogue operation, Vilanek said the Italian energy-contract business has been affected by a weak market environment.

During the second quarter, Digital and Dialog Media revenue rose 16.6% to €245 million. Digital revenue grew 8.3% to €113 million, as programmatic digital out-of-home activity offset a challenging online-media market. Dialogue revenue rose 24.9% on a reported basis, or 7.4% organically, to €131 million.

Statista Transition and E-Commerce Weakness Continue

Revenue in the Data as a Service and e-commerce segment fell 11.2% in the first half to €256 million. E-commerce revenue declined 10% to €83 million, which management linked to weak consumer spending in Germany. Data as a Service revenue fell 12.2% to €72 million. After adjusting for the disposal of Statista’s strategy and consulting unit and currency effects, the organic revenue decline was 4.4%.

Segment adjusted EBITDA declined 43% to €11.4 million in the first half. Management said it expects sales in the segment to continue declining at a low-double-digit percentage rate in the third quarter.

On Statista, management said the business is transitioning from selling user seats to a volume-based model. The company said customers must first implement CompanyGPT and connect internal and third-party data pools before expanding usage. Vilanek said initial tests that shifted some business-to-business customers from subscriptions to tokenized pricing had maintained roughly the same total revenue, calling that a positive early proof of concept.

He said Statista’s margins were expected to remain near current levels for the next three to four quarters before improving as the new model becomes more established. For AsamBeauty, management said sales have shifted from television toward e-commerce and retail, with retail carrying lower margins. The company expects a recovery to begin gradually in 2027.

Cash Flow, Leverage and Outlook

Operating cash flow improved to €161 million in the first half from €146 million, helped by working-capital development. Investment cash flow rose to €51.2 million from €39.6 million, including an exceptional real-estate investment. The company bought land near its Cologne headquarters for €9.8 million as part of longer-term plans to consolidate office locations.

Adjusted free cash flow was negative €1.9 million, broadly unchanged from negative €1.6 million a year earlier. Net debt rose €40 million year over year to €996 million, and the bank leverage ratio increased to 2.6 times from 2.47 times. Vilanek said the company expects leverage to be about 2.35 times by year-end.

Ströer spent €107 million on dividend payments and €21 million on share buybacks during the second quarter. Vilanek said the company had no current plan to continue the buyback, though it would review further purchases if the share price fell significantly below current levels.

The company confirmed its full-year 2026 guidance. Management also said the search for a permanent CFO was in an advanced stage, with a result expected within about four weeks.

About Ströer SE & Co. KGaA (ETR:SAX)

Ströer SE & Co KGaA provides out-of-home (OOH) media and online advertising solutions in Germany and internationally. It operates through three segments: Out-of-Home Media, Digital & Dialog Media, and Data As A Service (DaaS) & E-Commerce. The company offers various OOH advertising media services, such as traditional posters media and advertisements at bus and tram shelters and on public transport; and digital advertising services. It also operates t-online.de, which publishes news, analyses, reports and interviews through digital channels; information services for digital natives through special interest portals, such as giga.de, kino.de, desired, familie.de, spieletipps.de, and SpielAffe.de; and call centers focus on customer experience and sales for telecommunications, energy, retail, financial services, and medica sectors.

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