Ströer Out-of-Home Media AG: We create Visibility. Investor Presentation Copenhagen January 26, 2011

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Anastasia Poole
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1 Ströer Out-of-Home Media AG: We create Visibility Investor Presentation Copenhagen January 26, 2011

2 # 1 operator in underpenetrated and very attractive growth markets #1 in GERMANY Europe s largest ad. market #1 in TURKEY Europe s largest emerging market 9 Month 2010 Financials 400 MM Net Sales (+13%) (1) 82 MM Op. EBITDA (+25%) (1) Ströer Poland 5% blowup 4% #1 in POLAND Largest CEE market Ströer Turkey (1) 18% #1 Giant Poster network in EUROPE (D, UK, E, Benelux) Cologne Warsaw Sales Breakdown Ströer Germany 73% Core markets blowup media Regional HQ Istanbul 23% of revenues generated from emerging markets (1) Source: Company Information Note (1) Ströer 2009* shows full consolidation of Ströer Turkey in 2009 assuming Ströer Turkey s stake had been increased from 50% to 90% at Jan 1, Investor Presentation Copenhagen January 26, 2011

State-of-the-art product portfolio with favorable margin and

Revenue 2009 Other Street 9% Furniture 25% Transport 14%

Company Information Note (1) 2009 numbers as if full

stake had been increased from 50% to 90% at Jan 1, 2009.

3 State-of-the-art product portfolio with favorable margin and capex profile Billboard Scroller Billboard Billboard 52% 503 MM Revenue 2009 Other Street 9% Furniture 25% Transport 14% City-Light-Poster/ Street Furniture Trains/ Transport Source: Company Information Note (1) 2009 numbers as if full consolidation of Ströer Turkey in 2009 assuming Ströer Turkey s stake had been increased from 50% to 90% at Jan 1, = margin intensity = capex intensity 3 Investor Presentation Copenhagen January 26, 2011

4 Germany: structural growth, consolidation dividend, growth initiatives Consolidation dividend expected in Germany 2009 OoH Ad Share (%) 12,8% Top 200 advertisers provide clear growth potential OoH Ad spend/ total Ad spend of top 200 advertisers 9,2% 9,4% 10,3% 7,8% Average (1) 9.3% x2.9 6,2% 4,3% 3,2% France Switzerland Belgium UK Germany OoH Net Ad Spend Source: ZenithOptimedia, July 2010 Source: Nielsen Media Research, TNS 2009 Germany was the last developed European OoH market to be consolidated in 2009 Notes (1) France, Switzerland, Belgium and UK revenue-weighted average OoH ad share in Investor Presentation Copenhagen January 26, 2011

5 Ströer Germany: the only player able to run a seamless national campaign Ströer Germany is #1 player in Europe s biggest market Based on 2009 net revenues ( MM) Ströer is the clear leader across key OoH segments Market share based on number of marketable faces 393 JCDecaux 17% Others 22% + 2.2x Ströer 83% AWK 25% Ströer 53% + 3.6x Scroller Billboards/ 9m 2 Traditional Billboards (2) / 9m Others 19% Ströer 41% JCDecaux 40% (1) Other City-Light-Posters/ 2m 2 Source: Company information/estimates Source: FAW 2009, company estimates Notes (1) Including Moplak and Degesta; AWK owns 33.3% of Moplak and 66.7% of Degesta, which in turn owns 33.3% of Moplak (2) Towns from 100k inhabitants and from 60g 5 Investor Presentation Copenhagen January 26, 2011

6 Germany - Case Study : OoH key to a strong brand building Campaign Advertising Mix Campaign Impact OoH 49.0% Daily Newspapers 3.0% TV 48.0% Advertising effectiveness of KPIs from Q until Q Index Daily Newspapers 9.0% OoH 19.0% TV 72.0% Spontaneous Ad Awareness BASE O2 Qualified Ad Recall Spontaneous Brand Awareness Brand Likeability Relevant Set Higher OoH share in media mix has led to outperformance in all relevant KPIs Source: Nielsen Media Research Jan Jun 2010 excluding internet; RSG Marketing Research 6 Investor Presentation Copenhagen January 26, 2011

7 Success with TOP 200 Spenders 2010: Examples Newcomer Spend Increase TRADE FMCG AUTO 7 Investor Presentation Copenhagen January 26, 2011

Germany - Out-of-Home-Channel roll-out: First national digital network Unique Selling

population more than 20 percent Display size 60-82 inches Time-based pricing depending on

of locations already approved Installation of 700 units until April 2011 on track Sold out

8 Germany - Out-of-Home-Channel roll-out: First national digital network Unique Selling Propositions TV-like images with high emotions and short lead times Reach of German population more than 20 percent Display size inches Time-based pricing depending on hours and target groups Roll-Out Status on Track First class screen in HD quality Majority of locations already approved Installation of 700 units until April 2011 on track Sold out in December 2010 and January 2011 with top brands: 8 Investor Presentation Copenhagen January 26, 2011

9 First nationwide digital moving picture network globally (Berlin) 9 Investor Presentation Copenhagen January 26, 2011

10 High impact moving pictures at top locations (Bremen) 10 Investor Presentation Copenhagen January 26, 2011

11 TV-like images with high emotions and short lead times (Saarbrücken) 11 Investor Presentation Copenhagen January 26, 2011

Germany - Premium BB roll-out: High quality boards @ high-reach locations Key Features are Compelling First back-lit,

Introduction at highly sought after locations Roll-Out Status on Track Up to 500 sites bookable in first half of 2011

12 Germany - Premium BB roll-out: High quality high-reach locations Key Features are Compelling First back-lit, glass-covered Scroller Billboard in 9qm format Single selection for geo-targeting at special Point of Interest Foto Introduction at highly sought after locations Roll-Out Status on Track Up to 500 sites bookable in first half of 2011 Installation started in Tier I cities New pricing system with positive feedback 12 Investor Presentation Copenhagen January 26, 2011

13 Public contracts portfolio with successful track record city contract not yet extended (Wiesbaden/BB) Various public contracts renewed (Bochum/BB&SF, Bielefeld/BB, Mainz/BB&SF) 4 new contract tenders won in Germany (Bielefeld/SF, Jena/BB, Cottbus/BB, Karlsruhe/SF) Ströer in bidding process for 1 German tender in city < tier 3 (Lübeck/BB&SF) 1 new contract awarded in Turkey (Izmir/SF) Various contract renewals in Turkey (most recently Erzurum/BB&SF) Tendering of bus shelter contract in Warsaw expected early Investor Presentation Copenhagen January 26, 2011

14 Ströer Turkey is the only player able to run a seamless national campaign Ströer Turkey is the clear OoH market leader Ströer is the clear leader across key OoH segments Turkish OoH Market Share by 2009 Net Revenues (1) Others 60% Others 18% 18% CCO 12% Ströer 57% CCO 4% JCDecaux 9% Ströer 69% 40% JCDecaux + 4.5x 13% Scroller Billboards Traditional Billboards 58% 20% Others 21% 13% Ströer CCO 42% 0% 13% 9% 4% 4% Other 17% JCDecaux 20% Street Furniture (CLP/CLS) Source: Turkish Advertisers Association, Company estimates Source: Company estimates Additional upside from future Istanbul street furniture tender (1) Based on data from Advertisers Association and company estimates for local poster revenues 14 Investor Presentation Copenhagen January 26, 2011

15 Turkey: Multiple growth drivers supporting future OoH market growth Strong future ad market growth expected in Turkey 236,1 Ad Spend/ Capita Growth drivers of Turkish OoH market Young attractive demographics, >70MM inhabitants Full control of Ströer Turkey (1) 9 cities with more than 1MM inhabitants 71,9 42,0 Low advertising market penetration 18,2 17,7 8,4 Czech Republic Hungary Poland Romania Turkey Ukraine First audience measurement system initiative Source: Turkish Advertisers Association, Starlink Mediahouse, ZenithOptimedia, March 2010 (1) Factor that could act as positive catalyst for the Turkish advertising spend 15 Investor Presentation Copenhagen January 26, 2011

16 Acquisition of News Outdoor Poland catapults Ströer to #1 position in Polish OoH market Ströer Poland becomes the OoH market leader Ströer s leadership in billboards % 32,8% 30,8% News 11,9% News 11,2% Ströer 20,9% Ströer 19,7% 29,0% 24,8% 14,5% 13,7% Including Agora intercompany revenues Adjusted to exclude AMS Agora intercompany revenues Source: Company estimates 2009 market share based on net revenues 9,2% 9,8% 18,3% 17,2% Others AMS 40% AMS 39% Others CCO 8% 1% Classical Billboards Megalights (Scroller 9m 2 ) Ströer + News 51% (+0%) 11,911 Ad Units Ströer + News 61% (+0%) 1,032 Ad Units Others CCO 2% 13% Ströer + News 38% (+17%) Cityboard 5,914 Ad 32% Units AMS 15% 18m 2 Billboards (Front and Back Lit) CCO 3% Others 25% Cityboard 26% AMS 14% Ströer + News 32% (+31%) 741 Ad Units Large Format (32m 2 /36m 2 / 48m 2 ) Source: Polish Outdoor Chamber of Commerce (IGRZ) data, based on number of advertising units at year end 2009 Note: News Outdoor Poland acquisition is subject to regulatory approval Consolidation will enable Ströer to unlock organic growth in Polish OoH market 16 Investor Presentation Copenhagen January 26, 2011

17 Poland: Multiple growth drivers supporting future OoH market growth Strong future ad market growth expected in Poland 236,1 Consolidation dividend expected (1) Ad Spend/Capita Drivers for future Polish OoH market growth Consolidation dividend expected Street furniture market opportunity 71,9 42,0 Macroeconomic recovery 18,2 17,7 8,4 Czech Republic Hungary Poland Romania Turkey Ukraine First audience measurement system initiative Source: Turkish Advertisers Association, Starlink Mediahouse, ZenithOptimedia, March 2010 Notes (1) Factor that could act as a positive catalyst for the Polish advertising spend 17 Investor Presentation Copenhagen January 26, 2011

Rebranding of assets started Targeted costs and synergies Restructuring costs: approx.

18 Poland Integration of News Outdoor Poland on track Restructuring on track Overhead reduction key synergy Integration of operations underway (sales, IT, assets) Rebranding of assets started Targeted costs and synergies Restructuring costs: approx. 1 MM (2010) Synergy effects: 2-3 MM (2011) 18 Investor Presentation Copenhagen January 26, 2011

19 Ströer Group P&L Summary ( MM) Revenue Direct costs SG&A Other operating result Operational EBITDA Depreciation Amortisation Exceptional items EBIT Net financial result Income taxes Net Income Net Adjusted Income 9M 2009 Change(%) > > Investor Presentation Copenhagen January 26, 2011

20 Ströer Germany MM Revenues Operational EBITDA CAPEX* Organic Growth 6.6% 7.4% 6.9% 20.3% % Margin 21.2% 21.1% 23.5% 19.1% 19, % % ,5 Q Q M 2009 Q Q M M 2009 Revenue growth primarily due to improved trading of Billboard, Street Furniture and Other Strong 9M operating leverage supported by flat overhead spending Capex reduction resulting from fewer renewal actions and inventory usage * Excluding cash paid for investments in non-current financial assets and acquisitions 20 Investor Presentation Copenhagen January 26, 2011

21 Ströer Turkey (100% view)* MM Revenues Operational EBITDA CAPEX* 35.4% Organic Growth 38.5% 49.0% 48.4% % -13.7% % Margin 14.0% 22.7% 22.6% % ,5 8, Q Q M 2009 Q Q M M 2009 Outstanding headline and organic revenue growth Increase in sales mainly driven by higher filling ratios across all major asset classes Operating leverage impacted by temporary changes in rent mix and bonus scheme dynamics * Assuming Ströer Turkey s stake had been increased from 50% to 90% at Jan 1, Investor Presentation Copenhagen January 26, 2011

22 Ströer Rest of Europe* MM Revenues Operational EBITDA CAPEX* 17.5% Organic Growth 9.8% 16.5% % % % % Margin 5.5% 6.0% 5.7% % 2.1 1,7 0,9 Q Q M 2009 Q Q M M 2009 Significant revenue growth generated in Polish and blowup business Q3 organic sales growth of +6% in Poland and even double-digit in giant poster operations 9M Operational Ebitda margins strongly up in blowup with Poland yet to improve * blowup business and Ströer Poland 22 Investor Presentation Copenhagen January 26, 2011

23 Substantial underlying cash generation year-to-date MM Cash flow from Operations +129% Cash Flow from Investing % 9M 2009 reported / normalized 6.6 reported 26.1 IPO cashout 32.8 normalized -17,1 9M ,9% -11,8 Free Cash Flow Comments M 2009 reported reported 54.3 Acquisition CAPEX 26.1 IPO cash out 21.6 normalized Cash flow from operations more than doubled leaving aside IPO exceptionals Cash flow from investing decreased following less renewal requirements and inventory usage Strong FCF generation excluding acquisitions and IPO costs 23 Investor Presentation Copenhagen January 26, 2011

24 Significant Net Debt reduction following IPO MM % Net debt Cash Financial liabilities Ströer Turkey consolidation effect Ströer Turkey loan repayment Repayment term loan Repayment of subloans Other Financial liabilities (1) (1) Cash Net debt Notes (1) Excluding derivative financial instruments 24 Investor Presentation Copenhagen January 26, 2011

25 Country Highlights 2011 Growth drivers: Germany Growth Drivers: Turkey Growth Drivers: Poland GDP growth 2011E of 3.8% (1) Consolidation dividend Digitalization of media business + Initiatives: Increase Top 200 customer penetration Premium Billboards Out-of-Home-Channel GDP growth 2011E of 10.0% (1) Dynamic ad market Restriction on TV airtime + Initiatives: Push for digital products Inventory increase from new tenders Exploitation of regional sales potential GDP growth 2011E 7.8% (1) Consolidation dividend Emergence of public OoH concessions + Initiatives: Integration of News Outdoor Poland Sales cycle optimization Street furniture opportunities Ströer on track for growth in 2011 Note (1) Source: Global Insight October Investor Presentation Copenhagen January 26, 2011

26 Outlook 2010 (last guidance ) In the traditionally strong 4 th quarter, Ströer is looking to repeat the sales successes achieved year-to-date despite relatively high prior-year figures. Overall, management is optimistic going into the 4 th quarter and, based on the assumption that the Turkish joint venture Ströer Kentvizyon had been fully consolidated since 2009, anticipates at least 9% organic growth for the whole of Investor Presentation Copenhagen January 26, 2011

27 Disclaimer This presentation contains forward looking statements regarding Ströer Out-of-Home Media AG ( Ströer ) or Ströer Group, including opinions, estimates and projections regarding Ströer s or 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 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 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 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. 27 Investor Presentation Copenhagen January 26, 2011

Continued Growth Ströer Out-of-Home Media AG Investor Presentation Roadshow Stockholm, June

Continued Growth Ströer Out-of-Home Media AG Investor Presentation Roadshow Stockholm, June 7 2011 1 # 1 in underpenetrated and attractive growth markets #1 in GERMANY Europe s largest ad. market #1 in