Ströer SE & Co. KGaA Q3 Earnings Call Highlights

Key Points

• Ströer reaffirmed its full-year outlook after third-quarter revenue rose 4% year over year to €513 million, though organic growth was 0.8% and adjusted EBITDA was broadly flat at €148 million.
• Digital out-of-home advertising was the main growth driver: third-quarter segment revenue increased 3.6%, with digital out-of-home up 11% and programmatic advertising up 21.1%.
• Reported net income fell to €23 million from €30 million, and adjusted free cash flow declined to €7 million from €21 million, pressured by restructuring costs, exceptional items and higher lease repayments. Ströer also cited ongoing challenges at Statista and Asam.

Ströer SE & Co. KGaA ETR: SAX reaffirmed its full-year outlook as growth in digital out-of-home advertising helped lift third-quarter revenue, although restructuring costs weighed on reported earnings and free cash flow declined.

The German advertising company reported third-quarter revenue of €513 million, up 4% from a year earlier, including organic growth of 0.8%. Adjusted earnings before interest, taxes, depreciation and amortization were broadly stable at €148 million. Interim Chief Financial Officer Christoph Vilanek attributed the lack of earnings growth despite higher revenue primarily to a business mix effect.

Reported net income fell to €23 million from €30 million a year earlier. Third-quarter adjusted free cash flow declined to €7 million from €21 million, as higher lease repayments and exceptional items weighed on the result.

Chief Executive Officer Udo Müller said the outlook was supported by current-quarter trends, order books and bookings, but added that the remaining weeks of the fourth quarter would be decisive. The executives did not provide numerical full-year guidance on the call.

Digital Advertising Drives Out-of-Home Growth

Ströer’s out-of-home media segment posted third-quarter revenue growth of 3.6%. Digital out-of-home revenue rose 11%, while programmatic digital out-of-home advertising grew 21.1%, Müller said. For the first nine months, segment revenue rose 6.5%, with digital out-of-home up 15.9% to €309 million.

Traditional out-of-home revenue fell 2.1% to €379 million over the nine months. Vilanek said the shift toward digital advertising was reducing the footprint of paper-based advertising. He also said the World Cup supported nine-month performance, with some spending moving from July into June.

Müller described the third quarter as soft across Europe and Germany but said Ströer had outperformed the out-of-home market. He cautioned that Nielsen’s gross rate-card figures were not directly comparable with net revenue growth, which he said was typically 6 to 7 percentage points lower.

The company is launching an Iconic Screen Collection combining 14 large screens. Müller said sites such as The Whale serve partly as marketing investments, helping attract customers and raise the industry’s visibility, rather than materially changing Ströer’s revenue or profit profile.

Cash Flow and Restructuring Costs

For the first nine months, group revenue rose 5% to €1.55 billion, while adjusted EBITDA increased 2% to €421 million. Adjusted net income rose to €90 million from €86 million.

Adjusted free cash flow fell to €5 million from €19 million, while capital expenditure before acquisitions rose to €80 million from €67 million. Operating free cash flow improved to €258 million from €243 million, helped by a smaller working-capital outflow.

Vilanek said exceptional items included restructuring and layoffs across businesses including Statista and Asam, as well as the IT organization. Further restructuring is planned for the first quarter of 2027, he said.

Financial net debt stood at €1.015 billion at the end of September, up €19 million from the previous quarter, and bank leverage was 2.66 times. Vilanek said he was aiming for a similar capital expenditure level next year, although the mix of investments could change. Excluding acquisitions, he also expected free cash flow and net debt to remain at levels similar to this year.

Statista and Asam Remain Under Pressure

Data-as-a-service revenue fell 10% to €110 million in the first nine months. Adjusting for the exclusion of Statista’s strategy and consulting unit and currency effects, the organic decline was 3.8%, Vilanek said. E-commerce revenue dropped 13.6% to €120 million.

Müller said Statista was losing smaller customers as they use large language models, while its corporate business was developing strongly. Customers using Statista Connect had consumed credits faster than expected, he said, but adoption depends in part on customers building their own AI infrastructure.

Vilanek said larger customers accounted for 48% of Statista revenue, up from about 30% a year earlier, but warned that the loss of smaller customers could continue for another 12 to 18 months. Müller said he expected a sustainable positive development in 2027, particularly in the second half.

At Asam, Vilanek said the company was reviewing marketing spending, limiting some retail expansion and focusing more on higher-margin skincare products. The current 2027 budget discussions anticipate lower revenue but higher EBITDA, he said. He added that Asam was not a strategic long-term business for Ströer and that an improvement could eventually attract interest in the company’s 50% stake.

Portfolio Review and CFO Search

Müller said Ströer was reviewing smaller disposals and potential add-on acquisitions, but did not consider it the time for larger deals. Asked about a potential private-equity transaction, he said there was nothing new and that the company had never been close to a deal.

Vilanek said his CFO role would remain interim. Ströer is looking for a successor to join in the first quarter of 2027, with a goal of having someone aboard by the end of that quarter, he said.

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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