Ströer SE & Co. KGaA (SAX) Earnings Call Transcript & Summary

Dear, ladies and gentlemen, thank you for joining our preliminary results call for 2020. Together with my co-CEO, Christian Schmalzl; and our CFO, Christian Baier, we will present the unaudited financials for 2020 and give you the key information around our Out-of-Home plus strategy and our current performance; how our financials developed in a challenging year 2020 with COVID-19; and what we expect for 2021 and especially the first quarter. In the year 2020, we all faced a crisis of historic scale due to the corona pandemic, which had a significant impact on economy and public life, both globally as well as in our German home market. Against this backdrop, we were once again able to demonstrate the strength of our Out-of-Home plus strategy and mastered the challenges of corona crisis very well. In the Out-of-Home section, especially our strong local business was important for stabilizing our revenues at the peak of the pandemic and during the lockdowns. Our online business units were even able to benefit from the crisis to some extent and partially offset pandemic-related revenue declines in the Out-of-Home business. For example, our Ströer's flagship portal T-Online and in satellites were able to increase its reach significantly throughout the crisis. And our digital media sales business proved impressively its strength and leading market position. At the same time, Asam e-commerce business, in particular, recorded accelerated growth of 27%. And Statista was also performing very well during the crisis, growing some 24%. So all in all, the reported revenues of fiscal year 2020 for the group was EUR 1.442 billion, down 9% compared to 2019. Organic revenue development was minus 8%. Just as a reminder, we sold TubeOne and Ströer products at the beginning of 2020. The adjusted EBITDA declined by 19% to EUR 465 million compared to EUR 570 million in 2019. Our adjusted EBIT was down disproportionately compared to EBITDA from EUR 280 million to EUR 168 million, mainly due to the basically unchanged IFRS 16 effect, leasing and rental contracts compared to 2019 of EUR 178 million. Accordingly, adjusted net income was down 44% from EUR 210 million to EUR 118 million. Against the challenges of the corona year 2020, we were able to manage cash very efficient, resulting in an operating cash flow for 2020 with remarkable EUR 407 million, especially when compared to EUR 484 million of the pre-corona year 2019. As discussed earlier in our quarterly results calls, we continued and even accelerated to invest into our core strategic fields, especially digitalization of Out-of-Home inventory. Accordingly, net investments increased by 8% to around EUR 122 million compared to EUR 114 million in the prior year. An important element of our robust performance in 2020, but also the key reason why we are quite optimistic for 2021 and beyond is the fact that we experienced a classical V-shape trading recovery of Out-of-Home and public video after the lockdown in Q2 2020. In the first phase of the pandemic, the country was somewhat paralyzed, and our revenue dropped massively in Q2. The low point was in May, slightly behind the traffic curve because of the cancellation periods of our media. But from then onwards, our order book recovered month-over-month. And in October, we have been back on previous year's level. So 3 months of lockdown and its consequences were followed by 3 months of recovery to get back to where we had been before. The shorter cancellation and booking lead times as well as a more responsive audience profile in transport media, public video shows a sharper reaction in both directions, faster and tougher hit, followed by quicker and more dynamic recovery. Just in our core business was back on its normal level, infection rates went up again and the second lockdown was announced. The soft measures for November, followed by a harder shutdown of public life from mid of December onwards, we observed a, by far more, robust order book at the beginning of the second lockdown than 6 months before. There were less cancellations and more clients that rather optimized their campaign towards the end of the year across our portfolio instead of putting money out completely. So the advertising markets handled the impact of the second wave of the COVID-19 pandemic somehow more rational. An important backbone during the crisis was our local sales business. Of course, national advertisers reduced their spend in 2020 and regional campaign volume was going backwards. But the more long-term orientated contracts with SMEs proved to be the most resilient sales channel. Since 2014, we had invested in a constantly growing local and regional sales force. It took time to hire the right people, train them to improve revenue per capita and we had to swallow ramp-up costs in the first year to reach the current efficiency and profitability levels. But even during the more challenging months of COVID, we kept the sales force intact and we were able to grow 11% despite 2 lockdowns in 2020. So in consequence, the share of really small local businesses with ticket size below EUR 50,000 per year grew from 8% in 2014 to over 25% in 2020 and was an important stabilizing effect in the quarters 2, 3 and 4 of 2020. Most importantly, we also had almost no payment defaults. The fact that we offered also online products, like Google AdWords, locally targeted brand advertising, websites and SEO via our Regiohelden portfolio, helped especially in the peak of the lockdown to support our new business pipeline and reasonable exchange with SME customer base. As we believe that COVID-19 will rather accelerate the decline of print media and force more SMEs to rethink their advertising strategy, we plan to further increase quantity and quality of that sales channel as we see massive future growth potential. Another learning from 2020 was the accelerated shift towards automated programmatic media trading. Given our expertise in digital media and the investment in online ad tech in the past, we have been rather a pioneer in programmatic DOoH campaigns with 25% revenue share within public video in 2019. But COVID was a further catalyst, pushing the programmatic share of public video beyond 35%. Our market DSPs and trading desk, apart from Google, are meanwhile connected to our ecosystem. We have seen parallel developments also for our online business, where the programmatic business grew 19% and was close to 60% of our total online advertising business in 2020. Across online and digital out-of-home, so for mobile devices and tablets, while desktop to public video or roadside screens, half of our revenue come from automated trading systems. Across all digital product categories, we have executed over 4,500 individually negotiated private marketplace deals, and more and more online customers integrate public video in the programmatic deal setup. Furthermore, and probably most important, the so-called PLUS businesses have been crucial to take our sales through the crisis, as all of them have been either at pre-COVID performance level or even better. Overall, those businesses had an organic growth rate of around 8% in 2020. T-Online grew mid-single digits. The total online advertising and publishing business was flat due to a stronger market impact of the first infection wave in Q2. The market leading through online media sales house could defend its #1 market position throughout the crisis. Dialog & D2D Media grew almost double digit despite the fact that radio was off for 9 weeks. And Statista and Asam grew in the mid- to high 20s. From 2013 to 2018, we have invested roughly EUR 800 million in M&A in businesses outside of our core Out-of-Home segment. In 2020, we have generated EUR 200 million of EBITDA with Digital and Dialog Media as well as Statista and Asam, the ultimate proof that our diversification strategy has an outstanding ROI besides the fact that we are more resilient than peers in a crisis like COVID-19. T-Online, the largest acquisition we have made in the last 8 years, is a leading German Internet portal and had again a really strong year. That is not only COVID-driven momentum for a news publisher, it's a logical consequence of our development planned since 2015. We moved the editorial team to our cutting-edge newsroom in Berlin with more than 100 journalists, hired a new leadership team. And from 2016 onwards, traffic of the portal grew meanwhile to an outstanding number of 5 billion visits per year. We have also diversified the product and partnership range of the platform. We kicked off distribution partnerships with Google, Upday, Huawei and Deutsche Bahn. The online is, meanwhile, also part of Apple News, size will improve for top-quality news and user preference. And T-Online shows a fully revamped design and user experience rather than old school Internet exit point 5 years ago. We furthermore created new content extensions like a new economy and finance subsection and a sustainability spin-off. As a result, we have a really balanced age structure across all target group clusters. We are #1 over all age groups, #1 above 50 years and amongst the top 3 below 50 years. And T-Online is a good example of how we integrate the PLUS businesses and create multiple synergies on several business levels across our group. Let me highlight 3 key areas around T-Online and Digital Out-of-Home. First of all, content becomes a continuously growing topic for municipalities and smart city concepts. Public screens should not only show advertising, they should also be a tool for services and public information. And T-Online delivers tailor-made local content. In parallel, the user local presence of the portal allows our Digital Out-of-Home inventory to launch and promote meanwhile 28 local T-Online portals, which helps us monetizing our SME customer base. The probably biggest push for both reach and revenue of T-Online was our multiscreen and multichannel model. We leverage our public video network to distribute T-Online branded content nationwide and, therefore, increase organic traffic. And the other way around, advertising is embedded in content delivered by T-Online and, therefore, increases the attractiveness of the screen network for the audience. And finally, we can offer our brand advertisers a fully integrated multiscreen product. Advertising on the T-Online platform means reaching 47 million unique users on desktop and mobile via voice as well as on social media, but most importantly, on public video and Digital Out-of-Home in a fully brand-safe environment with excellent visibility. Roaming over 5 years, we have established a really powerful news brand, and our reach is ahead of all other top publishers, like Focus, BILD, SPIEGEL or Welt. More importantly, the strategic transformation of T-Online has also converted into excellent financial results, comparing where we are in the COVID year 2020 versus the acquisition in Autumn 2015. We have grown T-Online's top line by 15% and almost tripled EBITDA in the last 5 years. And all the investments and growth initiatives, especially the local expansion with the various city portals, are creating a promising source of growth for the upcoming year. At the same time, we created the Ströer online media sales, the leading online media sales house through a series of acquisitions, followed by a period of strong organic growth. There is meanwhile more than EUR 350 million of revenue. Ströer online media sales is Germany's #1 digital media sales house, ahead of Bertelsmann's Ad Alliance, ProSiebenSat eines or United Internet. Including the strong tech stack which we use for Digital Out-of-Home as well, we have our own assets as well as third-party publishers to monetize any kind of digital product and develop convenient ad solutions for agencies and direct clients. Also, our direct marketing unit, Ranger, couldn't save our 9 weeks during the first lockdown in Q2 2020 was an outstanding year for our Dialog Media business. We grew more than 8% and increased the margin by 2 points. Since the acquisition in the second half of 2017, we increased top line by 40% and bottom line by 60%. The investment in more tech and data pays off and the broad access to clients via our Ströer key account teams help winning new customers in promising segments like biotech, and the broad geo in e-commerce. The 2020 development also proves that the carve-out of the customer service-oriented contact centers, the former D&S business, at the end of 2019 was the right move and to focus our call center teams towards sales, products and services. At the same time, we saw immediate positive effect through integrating the D&S locations in a new joint venture with Tricontes, 360-degree group. As a result, we turned the business from loss-making in 2019 to high single-digit margin business in 2021. At the end of 2021, beginning of 2022, we expect the value of our 50% stake in the newly formed Tricontes 360 group to exceeding the original value of the 100% in D&S by the end of 2021. We have seen an even more positive development for our e-commerce asset, Asam, where the pandemic was a real accelerator in the transformation to digital beauty product platform. We outperformed historic growth rates by 10 points and grew beyond 25% in 2020 despite the fact that the traditional retail arm was temporarily under pressure. But e-commerce was growing around 50%, Q1 even above 70%. And the number of new customers on the platform more than doubled in the last 12 months. And despite the necessary investments in marketing, we improved Asam's margin slightly and finished 2020 with more than 20% EBITDA margin. The share of e-commerce business grew to above 40% and was clearly beyond that level in Q4. And we expect 2021 to reach more than 50%, a remarkable result of our strategy to convert a multibrand beauty company with 80% TV Sales in 2015 into a multichannel cosmetic platform with a strong proprietary e-commerce backbone in 2020. Asam is today already the biggest digital beauty platform for private label brands in the DACH region, ready to go international with its advanced digital and scalable platform. The interest we observe and analyze the latest IPO activities in the beauty and fashion market with peers like Mytheresa, with a similar growth rate but smaller margin profile and the valuation of 100x EBITDA at the time of the IPO. This is a promising benchmark for Asam business in the next 18 to 24 months. 2020 was also an interesting year to understand how resilient our global Data as a Service asset, Statista, operates in times of a massive crisis. And of course, during the first wave in Q2, we saw a couple of weeks less new subscribers as many companies, especially in the U.S. and Europe, were cautious with their expenses as long as they had not fully analyzed the impact of COVID-19. But already from May onwards, sales growth got back to normal levels, and it finished the full year with around 24% top line growth in Statista. And we get beyond EUR 100 million revenues in 2021, unchanged, targeting EUR 200 million revenue by 2024. In January, we were able to follow our long-term growth plans, but in the crisis, was also an opportunity to optimize a couple of KPIs and, therefore, accelerate future growth. Organic traffic on the platform grew beyond 150%. We fine-tuned user experience to improve the stickiness on the platform and improved conversions of free registrations into paying customers. We're constantly opening offices, like in Tokyo, at the same time, accelerate market entering tests of remote capacities in our headquarters. All of our key KPIs, top line growth, gross margin, net revenue retention improved substantially year-over-year. From today's purposes, Statista is a clear candidate for potential NASDAQ IPO as soon as the company reaches its EUR 200 million turnover target. Let me now hand over to Christian Baier, who will give you a more detailed overview about our preliminary financial results of 2020.

Thank you, Udo, and hello to everyone. Let me start with my remarks on the financials of 2020. As in the past quarters, for the full year as well as for the fourth quarter, we will again present straightforward figures which include the effects of IFRS 11 and IFRS 16. Disposals, such as Ströer products, TubeOne Networks and kajomi, are included in the reported numbers of the prior year. To have a fair view on the development of fiscal year 2020, especially on organic revenue development, these numbers are eliminated. Although we have discussed the effects of these divestments over the course of the prior year, let me reiterate the total full year effect, minus EUR 25 million on revenue, but no significant effect on adjusted EBITDA. Please also note that the numbers presented in this call are preliminary and unaudited at present. The final figures will be published in our annual report on March 30. The figures of 2020 must be seen in light of the developments of last year. Q1 marked a very strong start into the year, but was followed by Q2, which was hit hard by the pandemic. Our business rebounded sharply in Q3 as infection rates were quite moderate from July to September and overall business sentiment eased in that time frame. Despite a second lockdown from November onwards, Q4 proved to be back almost on 2019 level. In sum, revenues of fiscal year 2020 were down by 9% or in absolute terms from EUR 1.591 billion to EUR 1.442 billion. Organic growth was down by 8%. At a very early stage of the crisis, we looked at all cost positions and derived stringent cost-reduction measures. Most notably, we reduced workload by leveraging the instrument of short-time work across many of our businesses in Q2 and Q3 and renegotiated our rents and leases with our key partners in the top 40 cities. The effect of these measures became clearly visible in the second half of last year. As a result, the decline in EBITDA could be kept within limits, with adjusted EBITDA declining by minus 19% from EUR 570 million to EUR 465 million. Exceptional items are EUR 23 million for the full year, significantly down compared to the EUR 34 million in 2019. This contains EUR 4 million from the disposal of Ströer products, another EUR 6 million results from restructuring in different parts of our business, including our call centers and content business. The remainder relates to diverse nonmaterial topics. Depreciation and amortization was at EUR 356 million, almost on the same level of 2019. The financial result of minus EUR 34 million was on previous year's level. A significant part of it is attributable to IFRS 16 effects. With EUR 12 million tax expenses were significantly below previous year due to a lower tax base. Net income adjusted and unadjusted decreased in line with operational performance. Adjusted net income was down by minus 44% from EUR 210 million to EUR 118 million. Free cash flow adjusted for fiscal year 2020 developed better than operational performance, but was down versus prior year from EUR 195 million to EUR 130 million. Interest payments declined by EUR 4 million compared to 2019 because of lower IFRS 16 related interest, a result of a declining yield curve in the valuations of our IFRS 16 contracts. Tax cash out dropped to EUR 28 million in 2020 from EUR 39 million in the previous year, mainly because of lower tax prepayments, given the decline in profits in 2020. Working capital developed negatively in 2020 as we decided to be less strict in our cash management in order to avoid further strain on our customers' liquidity. The quite significant increase in Others to EUR 33 million primarily reflects making provisions. Among them, provisions for bonuses for management, employees in our well-performing businesses and for a potential increase in defaults in 2021. With regards to CapEx, we continued as planned to invest into the buildup of our digital Out-of-Home infrastructure as well as software, resulting in EUR 122 million for the year, EUR 9 million up versus 2019. Lease liability repayments decreased by EUR 20 million from EUR 175 million to EUR 154 million, a reflection of successfully renegotiating rents and leases with our key landlords. Our bank leverage ratio increased to 2.2 due to the negative effects from COVID-19. However, it is still below our internal target level of 2.5 and well below the covenant levels in the credit agreements agreed with our banks. As mentioned before, the financials of 2020 are negatively influenced by the pandemic. This is the case, particularly for Out-of-Home Media and Digital Out-of-Home and Content, which showed organic growth of minus 23% and minus 5%, respectively. The latter was predominantly affected by the decline in Digital Out-of-Home. Only direct media fared well throughout the crisis with an organic growth rate of plus 11%. In absolute terms, Out-of-Home Media revenue declined by 23% from EUR 709 million to EUR 548 million. This negative development was a result of Q2 specifically, where revenues were down by 50% because of first COVID wave and the resulting lockdown. While campaign-focused business was volatile throughout the crisis, business with our regional and local customers proved to be more stable. Another positive point. As soon as traffic returned, Out-of-Home sales recovered along with it in September and October nearly to 2019 level. Adjusted EBITDA of Out-of-Home Media decreased from EUR 324 million to EUR 238 million. The EBITDA margin stands at 44%, only 2 percentage points below prior year's levels. This was achieved through very tight cost management, especially reducing personnel costs via short-time work and not replacing vacancies, renegotiating rents and leases and cutting maintenance expenditure. Despite the challenging environment, we continue to invest into the buildup of our digital screens to be prepared for a quick reboot of the business in the upcoming months. Revenue growth of Digital Out-of-Home and Content was negatively influenced by weak performance of public video as traffic and public transportation was hit particularly hard by corona. In contrast, the PLUS businesses of the segment performed very well. Our online advertising and content publishing businesses showed robust performance. With sales growth of more than 20% in such difficult conditions, Statista had another successful year. Overall, revenue reported of the segment was down by EUR 40 million from EUR 588 million to EUR 548 million. In 2020, adjusted EBITDA of Digital Out-of-Home and Content was EUR 188 million with a margin of 34.3%, only 160 basis points below previous year's margin of 35.9%. Again, the result of stringent cost-reduction measures. Direct Media performed more strongly in 2020, with reported revenues of the segment being up by EUR 29 million from EUR 341 million to EUR 369 million. Our call centers benefited both from better accessibility of consumers at home and easier recruiting in a tightened job market. The same was true for our door-to-door business, Ranger, which was able to overcompensate the pandemic-related temporary stop of sales activities in Q2. On top, Asam showed double-digit growth driven by extremely strong e-commerce sales. For Direct Media, adjusted EBITDA for the year was EUR 68 million, up by EUR 14 million versus 2019. This corresponds to a strong and significantly improved adjusted EBITDA margin of 18%. Let me briefly say a few words about the fourth quarter. The positive recovery seen in Q3 continued in Q4 with the quarter being almost back in 2019 level. Reported revenues were down by minus 3%, organic growth only down by minus 2% versus prior year. While Out-of-Home and public video were down by minus 17% and minus 32%, respectively, our PLUS business continued to perform well. Statista and Asam even grew by 30% plus in the quarter. Despite the strong revenue development, adjusted EBITDA was down by minus 16% or minus EUR 29 million, largely because of the need to build accruals, as mentioned beforehand. Just as 2020 shows how stable and robust we are positioned with our Out-of-Home plus strategy, even in rough conditions, as just presented, the long-term view proves our sustainable and profitable growth. The development of the period 2012 to 2019 reflects, in addition to the ongoing structural growth of Out-of-Home, above all, the success of our digital diversification strategy, both stand-alone and from the resulting synergies between the newly established digital business and our Out-of-Home core business. The numbers speak for themselves. Revenue nearly tripled from EUR 561 million to EUR 1.591 billion. Net adjusted income more than eightfolded from EUR 24 million to EUR 210 million. Adjusted EBITDA more than tripled from EUR 107 million to EUR 379 million. Dividend increased from EUR 0 to EUR 2 per share. Equity ratio was stable at 32.4%. Net debt increased by 1.8x, from EUR 302 million to EUR 448 (sic) [ 548 ] million. Leverage ratio shrunk from 2.8 to 1.4. To make these developments even clearer and more transparent, also per division, we have decided to change our segmentation. In our Q3 presentation, we already shared with you our initial ideas for new segmentation. The new structure should reflect the dynamics, changes and developments of our business, especially since the introduction of Out-of-Home plus. Let me briefly guide you through the changes. Out-of-home and public video will be combined in one segment. To provide additional transparency, we will split sales and results between analog and digital performance. That should make things easier to compare our core business with other pure-play Out-of-Home companies. Furthermore, the PLUS businesses with a focus on advertising, marketing and sales services, will be proved in Digital and Dialog Media. We will provide more detailed transparency around online versus direct media. Finally, Asam and Statista form the third segment, Data as a Service and e-commerce. We will report on the performance of both entities separately. With regrouping the segments, it is our ambition to maximize transparency and to unveil the potential of Ströer and the Out-of-Home plus strategy. To make it easier for you, we will send out a support slide deck with adjusted figures for 2019 and 2020 on a quarterly basis in the next weeks. In addition to our financial reporting, let me give you an update on our progress on combining economy and ecology, i.e., on our sustainability strategy 2030. We've addressed environmental issues through a variety of products and measures for many years. Our key objective is to reduce CO2 emissions. To develop a targeted action plan, we are currently conducting a CO2 baselining to understand our corporate carbon footprint. We are also measuring our product carbon footprint with a special focus on our digital Out-of-Home screen. We expect first results by the end of April and will then derive measures to reduce our CO2 emissions over time. A first significant step on this journey was to convert the electricity supply of our office buildings across Germany to green power. But we didn't stop there. In fact, as of now, we have also converted 80% of power consumption for our Digital Out-of-Home screens to green energy. This is a quantum leap forward in reducing our CO2 emissions and it makes sure that our Out-of-Home digitization program does no undue harm to the atmosphere. On the social dimension, we continue our existing proponent activities by providing our Out-of-Home and online assets to NGOs basically at almost no cost. This allows our partners to appeal for donations and consequently expand their activities. On T-Online, we launched a sub-website and forming about and promoting sustainability. Going forward, we want to additionally support a few long-term projects with selected partners. Most probably, we will focus on projects for children, environment and diversity. On the governance side, we've also made substantial progress. First, we developed a KPI framework that we will use to monitor and steer our ESG activities in the future and to comply with EU taxonomy and regulation. Second, together with the leading German IT consultancy, we have embarked on a comprehensive and multidimensional program to strengthen our cybersecurity. This includes professional vulnerability management, i.e., active detection of weaknesses through scans and penetration tests. Third, we changed our auditor to have our accounting principles and procedures pressure-tested by a new external challenger. Key audit matters for KPMG for our 2020 financial statements include revenue recognition policies, goodwill impairment tests and M&A activities. Related partly order volume in the area of cover bill posting for technical cost went down to approximately EUR 100,000 in 2020, around 0.007% of total turnover, based on the ongoing closing down process of respective private equity businesses of the main shareholders. Business volume from sales mandate of privately owned traditional wet glued billboards of the Ströer family owned since the '60s and '70s of the last century were almost stable. Ströer is generally not investing in traditional billboards, but is increasingly fast-digitizing its Out-of-Home infrastructure in the upcoming years. In case this will change, Ströer would also, in the future, not be able to acquire those privately-held billboards from the Ströer family or any other third-party billboards portfolio in Germany with more than EUR 5 million turnover because of merger control reasons based on first market position in the German Out-of-Home market. Besides environmental and social topics, governance is key for Ströer. Ströer was, is and will be a family business, and the founding families feel very close to the company. Both are invested with the majority of the assets in Ströer and act on the interest of the company at all times. As a sign of their close ties, the 2 founding families will each contribute around 80% of their shares to the foundation structure. This also ensures a structured transition to the next family generation, and above all, continuity in the shareholder structure. Based on the implementation of the 2-family foundations, the 2 main shareholders had to unpledge and repledge a part of the total shareholding for Ströer. On speculations in a local magazine regarding a potential overhang risk related to these pledges, the 2 main shareholders reported to us that they can exclude any potential overhang risk due to the limited volume of the actual economical relevance of these pledges in relation to their total amount of assets. Let me hand over to Christian, who will now give you more details on our business outlook.

Thank you, Christian. The current lockdown in Germany started already 4 months ago in November with some softer restrictions that led into a hard lockdown from mid of December onwards. So both pre-booking season end of last year as well as the entire Q1 so far are challenged with massive restrictions of public life. That said, we currently only expect our Out-of-Home segment impacted by COVID in the first 3 months of the year. The revenue decline of our Out-of-Home business is less dramatic than during the first shorter lockdown in Q2 2020, and we already see slightly better momentum towards March and April. Local sales still show slight growth, but national sales campaign business and public video with less traffic suffer, and we expect the overall segment revenues at around index 50 to 60 versus last year's very strong Q1. A very different picture in our other 2 segments. Digital and Dialog Media are overall fully in line with the normal performance as in times without pandemic. Our own portal and especially the new segment with T-Online and watson continues to grow mid-single digit. Programmatic third-party ad sales show strong momentum beyond 10%, and even branding-oriented IO business on third-party website is quite robust given the fact that most advertisers hold back campaign budgets. The Dialog business with the contact centers is beyond 2020 momentum and we expect Q1 at least 15% ahead of last year, similar with the door-to-door business. Despite some smaller lockdown effects, we also see growth at around 15% there. So in total, we expect Digital and Dialog marketing in Q1 at an organic growth rate of around 8%. Data as a Service and e-commerce, Statista and Asam, are fully on track with their historic performance levels. Statista probably beyond 25%, including, once again, more diversified global revenue base. Asam is outperforming pre-COVID growth and especially the e-commerce sales channel grows more than 70%. So Q1 will show organic growth of around or even beyond 25%. In total, our group's top line performance should be around index 80 to 85 versus a really strong Q1 2020 and under the assumption that the lockdown won't end before mid of March. So Q1 is challenging, but our Out-of-Home plus strategy continues to be the perfect hedge in such a crisis. And we are still optimistic about the full year as Q1 represents based on the seasonality of the advertising market, on average, around 19% of our annual top line and an even smaller part of our profits. So as only Out-of-Home segment is impacted and even if the lockdown might last in parts until Easter, we expect a moderate impact of around 4 percentage points of our total annual revenue. No doubt, advertisers are cautious for Q1, but based on the conversations that we have, they haven't reduced their annual marketing budget yet. So there is still a very realistic potential for catch-up effects, especially in the second half of the year. We have given you already a quite detailed outlook for the first quarter, but it's still challenging to come up with a detailed guidance for the full year as there is still no clarity when the current lockdown is going to end. There is still a risk that mutations could cause new problems. At the same time, vaccine works and the planned timings in Germany might also accelerate. But we see at least the first indication, also based on last year's learnings, for 2021, we expect our business on 2019 level, minus lockdown effects, plus catch-up effects in the quarters 3 and 4. As already shown in the second half of 2020, we do not expect any medium- and long-term structural changes in our revenue and profitability profile. If there are any, they are rather positive. And since the end of last year, we have a weekly updated real-time tracking of the audience of our Out-of-Home infrastructure. Obviously, the pandemic and the lockdown leads to restricted public life, but there is still audience and many of our locations deliver reasonable and strong target group coverage. And that's why we have established RAAI, real-world audience attribution index. This index is a permanent investigation of mobility development under conditions of the abnormal mobility caused by COVID-19. The basis is location data from more than 20,000 different apps installed on more than 35 million unique mobile devices in Germany, which are collected and processed by the company Placense. They focus on mobility in the environment of Out-of-Home advertising media in order to quantify campaign effects. Mobility in the 2,000 most relevant postcode areas surveyed representing more than 95% of our Out-of-Home revenues. Measurements are taken in the immediate vicinity, 80-meter radius of all Ströer advertising media in this area. The RAAI is a proprietary product of the Ströer Group and is made available to customers free of charge upon request. Long-term customer relationship is built on trust, and this tool gives our clients confidence about the current performance of our advertising solutions. Based on 2020 learnings and the current dynamics, our long-term prospects are unchanged. Driven by digitization and the further development of local advertising markets, we expect a continued structural growth of 5% and beyond for our core business Out-of-Home over the next 10 years. And we are best positioned to benefit over-proportional from that development. Our PLUS businesses, Digital and Dialog Media as well as DaaS and e-commerce have benefited from the developments triggered by the pandemic, and we expect this trend to continue after corona. So we fully confirm our strategic master plan with a focus on Germany. We operate in a robust advertising market, which will quickly recover post COVID and has massive potential for us. The Out-of-Home market is consolidated and has high market entry barriers. Our market leader share is well above 60% in our core business. Our strong programmatic and data capabilities from the Digital Media business, including our tech stack, help us to unlock the potential of programmatic Digital Out-of-Home faster than any competitor. Our scalable sales force -- local sales force is able to address the huge SME market, still dominated by declining print media. We constantly grow our share of wallet with large key accounts by embedding Out-of-Home with top-class Digital and Dialog Media. Our proprietary long-term secured portfolio has just started to convert step-by-step into a more digital infrastructure. And our unique Data as a Service and e-commerce assets are on a strong growth track since meanwhile 5 years. Already in 4 weeks' time, we will publish our annual financial report and might provide more information on our business dynamics if the situation changes; Q1 results will be published May 11; the half yearly financial report, August 17; and we plan our AGM for September 3. Thank you, everyone, and we are now happy to take your questions.

[Operator Instructions] And the first question received is from Craig Abbott of Kepler Cheuvreux.

I'll ask a couple now to begin with. Just -- you highlighted your net debt -- net financial debt at the end of the year was around EUR 600 million, 2.2x leverage. Still a good bit below your internal target of 2.5, but Q1, obviously, is going to be heavily impacted by lockdown again. I just wondered if -- how this might be impacting your early thinking on the dividend. As you highlighted, your AGM has been scheduled for September, which gives you more time to evaluate the potential lockdown effects. Yes. If you could just maybe give us an early indication of how we should think about that? Secondly, I just wondered if you're seeing any -- I noticed there was a statement that you were seeing better momentum heading into March and April. But just wondering if you have any early visibility on Q2 orders, and from obviously the Out-of-Home Media division, that would be very helpful. And also, I just wondered if you could maybe give us an update on sort of your outlook for tax rate, both for the statutory and the cash taxes. Not just for '21, but maybe also looking beyond.

Craig, I can start with the first question on our net debt. You're right, it was EUR 600 million by the end of last year, which brings us to a leverage ratio of 2.2. Obviously, I mean, we gave -- we provided the outlook in Q1, and this goes against a very strong Q1 last year, 2020. It's what we expect is that, that leverage ratio for Q1 will go up further, somewhere probably around 2.5 to 2.8. That's our current estimation. But then looking into Q2, obviously, we are quite confident. And then we are running against the baseline of a very weak Q2 in 2020. So that will give us the chance that we'll actually drop the leverage ratio quite significantly already in Q2. So with regard to the dividend, we will actually have the chance to look at Q2 and then make our decision in time for the general meeting in September.

Okay.

Momentum towards Q2, I mean, it's really difficult to predict over a longer period at the moment, but what we see is, especially regarding Easter, a lot of clients and agencies have, well, options for the Easter weeks. They have somehow made very detailed plans. So they just wait for -- some are pulling the trigger. But at the moment, that's why we see there is money on agency and client side. There's the willingness and almost eagerness to do something. I think everyone for the moment tries to wait and understand a little bit what concrete decisions from the government will look like when and how they start opening up different businesses. But that's why we mentioned, I think, regarding Q2, we see already a little pickup in March, and there would be still enough campaign options to deliver an okay-ish March. But there's some elements, I think, on the way forward that are rather influenced by political decision-makers than by marketeers. That's the situation at the moment.

By the way, the 2.5 are not set in stone, Craig. So this is actually our target leverage for a normal trading environment. So now we have obviously, let's say, a one-off crisis, so we might also accept a slightly higher leverage throughout the crisis. So this is not set in stone.

Okay.

Craig, and then regarding your last question on tax rate. Looking in 2019, our tax rate was roughly at 17.5%. If you look at 2020 figures, that already went up. For next year or for this year, we expect to end up around 23% in terms of tax rate. And then obviously, the cash tax out vary a bit because that also deals with tax payments for the last 3 years.

Next question received is from Annick Maas of Exane BNP Paribas.

My first question is on CapEx, which increased this year despite declining revenues. So can you just maybe give us a -- or how do you think about CapEx going forward? Or maybe a potential guidance as a percentage of sales, for instance, for CapEx, that would be great. And the second one is on programmatic Out-of-Home pricing versus traditional Digital Out-of-Home pricing. If you could give us a like-for-like comparison to understand if it's really volumes or the pricing that is driving this growth? And then the last one, let's focus on the operational business, but you've referred to this share pledge that was mentioned in the local magazine. Maybe could you give us a time line of the share pledge, it would be great.

Annick, starting with your first question on CapEx, you already saw a slight increase in 2020 versus 2019. As we've stated before, we want to continue investing into digitizing Out-of-Home, specifically roadside, and wherever we have the chance to actually accelerate that. So for this year, we're probably looking at something around EUR 130 million to EUR 140 million in terms of CapEx.

And on programmatic Out-of-Home, the ultimate net CPM of programmatic campaigns is slightly better. Because besides only buying inventory, most of the customers buy more targeted parts of our inventory and that kind of selection options that they have in programmatic are linked to slightly higher CPMs. The base prices for the same target group is similar, but there is higher investments of clients into targeting features. So that's why I would say 90% of the growth is really volume-driven and maybe 10% is pricing-driven because of extra features in the targeting area.

Yes. On the last question, I mean, I have to say it's a private thing, but I'm answering it anyway. There's no time line for the pledges. I mean the out [Audio Gap] as you already said, it's let's say, a minor position in comparison to my total assets. And I mean, it's really private, but I have nothing to hide here. I use it for bridge financing. If I buy real estate, whatever, for EUR 50 million, I need 8 weeks to arrange a financing for the real estate based on real estate. So -- and from there -- from signing the purchase agreement, 8 weeks later, I have a bridge based on a framework, which I agree with my bank here. This is -- there's 0 overhang risk. And that's why I think it's really not -- it's also not interesting here for anybody. I mean you might have seen we disclosed in detail that we moved 80% of our shares in private foundations. We would not do that if we are intending to sell anything from our shares because now actually, we have no access to the shares anymore, the shares are owned by the foundations. And the target here is to have to have stability in the shareholder structure reaching into the next generation. So you can be 100% sure that there will be never a situation where we are going to sell not even one share, which we do not want to sell.

The next question received is from Marcus Diebel of JPMorgan.

We also like 3 questions. I mean, the first one, again, for Christian Schmalzl on advertising trends. I mean could you talk a bit more about the development in September, October -- or in August, September last year, when we really saw momentum coming back relatively quickly? I guess we are looking at the market now and see some, hopefully, fast ease in terms of lockdown measures. I mean can you just describe a bit more how you think this will play out eventually? I mean advertising momentum overall seems strong. But obviously, you're impacted by the lockdowns. But if you can maybe elaborate a little bit more on that topic? Then one question is for Udo is on portfolio. I mean you highlighted AsamBeauty and Statista several times. And clearly, a very strong growth story. But how severe is the plan to dispose it relatively soon? You mentioned potentially a spin-off of those businesses. Valuations are currently very high for these kind of assets. Could you give us a little bit more on potential time lines, how you think about it? Or is it for now just a long-term plan, yes, which is what we communicated before? Is there any change in this regard? I think on the article, I think the previous question highlighted this, you addressed this relatively well in terms of the drawdown. Just thank you to highlight this. And if you could just, yes, tell us a bit more about the amount of the drawdowns also from Ströer, that would be very helpful. I'm sorry, the questions would come from investors.

Yes. I mean, again, it has nothing to do with the company, but Dirk also writes me to talk about it. The drawdown from Ströer is close to 0, so he generally -- to have a line in place, which is, by the way, always a fraction. If you have a single stock as baseline, a fraction of what is, let's say, the headline numbers. For security reason is one thing, to draw down is another thing. So Dirk is close to 0 right now. And again, this is what you could theoretically land against a pledge is, I don't want to say not material, but it's not a substantial amount in relation to the total assets also of Dirk. The whole story here is, it may be good for creating some noise in the press, if you have read the article, but it's far off any issue what could materialize. And again, what are we talking about? We talk about, if in the worst-case scenario, there could be overhang and the shareholders would be forced to sell some stock. And I can only repeat. Now that significant preparation by limiting our own rights as shareholders massively to avoid exactly that because the point for the family foundations is, in case something would happen to me today, my kids had to pay 30% tax plus another 30% income tax. So this would create a significant overhang. And that's why we created a family foundation to avoid exactly that, to create any overhang situation for the stocks. And so also on this activity, you'd see that everything what we're doing is focused on having a long-term stable shareholder structure even into the next generation because we want to avoid that our kids actually are doing exactly this, in case we would die, selling the stocks because they want to do anything else. And so that's why now with the family foundation, I think we locked it in for the next, I don't know, 30, 50, 60, 80, whatever years, to give a crystal clear signal also to the market that we are not on the seller side. And on the other side, I think everybody has a right to monetize also the value you have in your portfolio. And this is nothing unusual. I mean it was only looked a bit sizable because we had to unpledge every pledge and to pledge it again. There was no new pledge in November. So this was just in connection here with the foundations. So is the question answered for that?

Yes.

So the second point with the 2 assets. I mean this is, let's say, a dynamic process, but also our view on that. But we clearly differentiate between AsamBeauty and Statista. So in Asam now, I'd say, in this beauty and fashion area, we saw the IPO of Mytheresa, which I have to say surprising valuation results. I mean I don't know if you follow that. Originally, they went public or they tried to make an IPO with the target price of EUR 14 to EUR 18. And then they came out, they raised it from EUR 14 to EUR 18, I think, from -- to EUR 24 to EUR 28. And then they came out above EUR 30 with valuation of more than 100x EBITDA. So I have to say, we're quite surprised because we believe that AsamBeauty is more attractive than Mytheresa because Mytheresa is a pure retailer of third-party brand. And Statista is a private label brand business, so the margins are much better and the growth is similar, profitability is higher. And let's say, in the next 24 months, we're going to be in the same level of profitability where Mytheresa was when they went public. I don't want to say now we go public in New York for a couple of billions. But clearly, this IPO changed our view on the topic a little bit. So we are actually -- it's totally possible that we see activity in the next 18 months, 18 -- maximum 24 months. Because we always said that in case that Statista and Asam are reaching EUR 200 million turnover, we believe it's the right point. Clearly, now we have to take into consideration that the multiples are crazy right now for a business like Asam. We talk about, let's say, already for a trade sale. So strategic, we talk about 26, 27, 28x EBITDA right now, up to 100x now for the IPO. So we are working on that. And I think it's most likely that we see activity in this period, which I described, until the end of the next year. Statista, we already said today, unchanged 2024, EUR 200 million turnover. So it's more -- if you talk about AsamBeauty, let's say, during 2022, second half of 2022, maybe. So Statista would be, let's say, more focused on 2023 -- second half of 2023, beginning of 2024, because we are not concerned that valuation for Statista would go down. Statista is a unique business, globally unique business. It's completely scarcity value. It's growing more or less unimpressed through the crisis. And from today's perspective, it's very likely that we're going to see an IPO in America, where it's also Statista's biggest market. So the timing, most likely 2022 from today's perspective, Asam; and second half of 2023 for Statista. Could become both an IPO, maybe. 4 weeks ago, I would have said Asam is more likely a trade sale. Now I really -- we deeply believe that we have to go to do a track when the day come and to elaborate where we can achieve the higher valuation.

On your first question, Marcus, advertising trends. I mean, as you said, we had a fast recovery in third quarter last year. And on October -- or in October, also, there were already growing infection rates. We've been with Out-of-Home advertising back on the level where we had been the year before. Nevertheless, it's fair to say at that point, the whole COVID situation was still by far unclear. Something like vaccine was far, far away. And I think the pandemic was like, for our generation at least and for most of the marketeers, well, the first time that they experienced such a situation. What we see now, looking at development in the last weeks, we've made with most of our customers and agencies normal annual deals; of course, with a floating scheme; of course, with a couple of regulations about what happens due to lockdowns, but they are in a normal annual planning logics. That's why -- I mean, it's a little bit predictions, but I think it's possible that as soon as the lockdown ends, we can get, with the Out-of-Home business, back to a normal level within 2 to 4 weeks because everything is prepared for that. Clients just need to say go and book the reserved sites and networks. That's why I think we are quite confident that as soon as clarity around the next couple of months, there is a lot of potential for catch-up effects. The money, the marketing budgets for 2020 are not gone yet, they're just postponed. And I think there's more than enough time in the rest of the year to get to a reasonable annual performance.

Perfect. Since I have you, could you also share the EBITDA for 2020 for Asam and Statista?

Sure. Asam, as we said were a 20% margin. So it's above EUR 20 million. So that's -- I have to say, it's really impressive because Asam is growing strongly. As you know, it's more than 20%, 25% with a margin of 20%. And if you look now, we said that already in the presentation, if you look on online, online growth is above 75% in the first weeks of 2021. So it's Statista -- Asam is exploding right now. So that's why we actually keep all options open here.

And Statista was also close to 20% EBITDA margin. We've continued with the normal investments that we had planned. Also there was that smaller dip in Q2. And we've been also set up a new bonus scheme for the management for the next 5 years, but the margin was plus/minus 1 percentage point was also around 20%, like Asam.

The next question received is from Katherine Tait of Goldman Sachs.

Just 2 questions from me. Firstly, you were clearly very successful over the course of the pandemic at sort of adjusting your rent and lease-negotiated contracts with the landlords. How should we think about that in terms of maybe operating leverage that we can see on the sort of recovery over the next sort of 12-plus months? You've talked about the kind of medium-term outlook being unchanged from a sort of profitability perspective. So yes, I just want to check that if a good sort of proportion of sort of fixed cost that you're giving to these landlords have shifted and, therefore, how we should sort of think about the medium-term margins going forward? Then on the second question, you've clearly continued to invest in sort of digital screens rollout. Has there been any change in terms of the locations that you're choosing when prioritizing as part of this strategy as a result of what we've seen over the last 10 to 12 months? And I suppose how you anticipate movements in consumer behavior to change? Just interested to see if that shifted your strategy at all.

On your second question around the -- which parts of the portfolio do we focus on with the digitization, we always had in plan, after a couple of years with a clear indoor focus to accelerate now digitization of roadside inventory. And I think the developments in the pandemic have just given us even more confidence that it's the right thing to do. Because at the moment, you see that especially the top locations, the main streets in the cities are almost unaffected by any kind of traffic decline. And that's what we currently focus on accelerating as much as possible. Approval processes are sometimes a bit slower than you would wish. But over the next 2 or 3 years, clearly, stronger focus or key focus on roadside inventory. And on the rents and leases side, maybe just to recap what we have done last year. We've been not aggressive, not in any way focusing on legal ways to improve rents or minimize rents and leases. We really try to find partnership solutions. And we have to say, I think with 49 out of the top 50 partners, we found mutual agreements and that we're focusing on 3 areas. The first one was compensation for the quarters or months with limited audience. Second was where possible prolongation of the contract so that you have, besides short-term benefit, you also have a chance to make your money for the investment over a longer period of time. And the third focus area was getting more support in digitizing inventory. That's why I think your point is maybe -- the situation is a bit more complex. So the pure rent saving is probably the smaller part over the next 2 or 3 years. But the fact that we were able to prolong a couple of contracts at very reasonable conditions earlier and converting more locations into digital ones, where we have a margin, will probably have a stronger impact. But in general, the answer is yes, we think we -- the overall negotiations will lead step-by-step over the next 3, 4 years to improve gross margins here. But not based on, okay, we minimize rents. We really try to find a partnership model where both sides can win.

And the next question is from Julien Roch of Barclays.