Ströer : Analysts Conference, London

Deep Dive

November 26, 2019 | Ströer SE & Co. KGaA

How OOH+ works in real life…

INDEX

01		02		03		04		05
Financial Update /		Digitization of		Sales National /		Data /		Outlook
Statista Update		Infrastructure		Regional		Programmatic

3

Results 6M 2019 (continuing Operations)

m€	6M 2019	6M 2018
	Reported	787.4	725.9	+8%
Revenues
Organic(1)	7.3%	8.0%	-0.7%pts
EBITDA (adjusted)	256.0	236.9	+8%
EBIT (adjusted)	114.8	108.7	+6%
Net income (adjusted)(2)	84.0	78.5	+7%
Operating cash flow	173.7	153.0	+14%
Capex	47.0	60.0	-22%
		30 Jun 2019	30 Jun 2018
Net financial debt (incl. lease obligations)	1,691.7	1,676.0	+1%

Note: Disposal of OoH Turkey classified as discontinued operations	4
(1)	Excluding exchange rate effects and effects from (de)consolidation and discontinuation of operations
(2)	Adjusted for exceptional items and additional other reconciling factors in D&A (PPA related amortization and impairment losses), in financial result and in income taxes (applying a normalized tax rate of 15.8%)

Segment Perspective 9M 2019

	OoH Media			Digital OoH & Content*					Direct Media
m€	Org. growth
+5.5%
				Org. growth
	494.7
			+7.8%
	461.2										Org. growth
			Margin	394.4 399.5			+15.8%
			45.2%					318.4
							Margin	270.4
		212.8	223.7				34.1%						Margin
													13.2%
						122.1	136.2
												43.1	42.1
	Revenues	EBITDA adj.		Revenues	EBITDA adj.				Revenues	EBITDA adj.

• Sustainable growth in OoH Media fueled by all sales channels
• Ongoing strong profitable growth of Digital OoH
• Sustainable organic growth in Direct Media (driven by door-to-door business) overcompensates portfolio changes within the segment; material reshaping and restructuring efforts in call center business

Note: Disposal of OoH Turkey classified as discontinued operations			9M 2018		9M 2019		Organic growth rate		Margin	5
*Formerly Content Media

Focus on Sales & Performance in Direct Marketing

Reducing Service Share of Dialog Portfolio - tackling Results from GDPR

Door2Door Sales

• Strong development in last two years
• Structural tailwind expected for next 5 years
• Digitization of sales processes driving margin

Contact Centers "Sales & Service2Sales"

• Growing customer base into e-commerce and digital business including tech/data integration
• Good cross-selling opportunities with core business to strengthen share of wallet

Contact Centers "Service"

• Limited growth and margin potential and lower impact on group access to customer
• De-consolidationof 12 sites via joint venture partner as Discontinued Operations as of Q4 2019; annualized ~ 85m revenues

6

Ströer sustainably outperforming the Ad Industry

27th Quarter in a Row

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

7%*

Average organic Ströer growth rate

Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
2013	2013	2013	2013	2014	2014	2014	2014	2015	2015	2015	2015	2016	2016	2016	2016	2017	2017	2017	2017	2018	2018	2018	2018	2019	2019	2019

Source: Ströer data; *Median

7

OoH Market outperforming the German Ad Industry

Ströer with unique Position in a structurally growing Business

Index
2005 = 100	Google scaling	Economic and					Facebook scaling				Amazon Media
	their business	financial crisis					their business				Retail scaling their
160													business
														OoH
													151	154
150
											150
												CAGR
														3.1%1
140
											134			CAGR
130										131				1.5%1
														Ad
120									120				121	123
												119
						117		116		117
		111	111			109	113		112	114
110
	106	107					108		108
100		105		106
100	102			102	100
100
				96
90
2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019e

German Advertising Market2		German OoH Market2

1CAGR 2005 - 2019e | Source: 2Zenith Media/ZAW net

8

Tectonic Shifts in classic German Media Landscape

Decline of Print going on, Decline of TV becoming visible - OoH wins significantly

German advertising market Q1-Q3 2018 vs. Q1-Q3 2019

TEuro 7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

		Total ad market:
< 1%		+ 0.7% gross*
		- 2.7% net (estd.)
	-2.8%
net
~ -4%				2018		2019

net ~ -8%

4.5%

9.6%

1.9%

TV

Print

Online

OoH

Radio

Source: Nielsen Media Research Gross Advertising (Germany); *Nielsen; PWC/ZAW/own estimates

9

Consumers (and Facebook) love Out-of-Home Advertising

Measurable Impact on Consideration and Purchase Intent

Popularity of media channels

Daily newspaper		57%
Magazine		55%
Radio		36%
Advertising letters	35%
Social Media	33%
Internet	27%
E-Mails/ Newsletter	27%
TV	25%
Smartphone	21%			Measuring shaft (n = 1.000)

Better together: Facebook and OoH

1.38

13% more efficient
than expected	1.33

1.20

1.11

only OOH	only FB	FB + OOH	FB + OOH
		(Expected)	(Actual)

Uplift factor in likelihood to purchase

Source: Statista; Question: How much does advertising disturb or annoy you in the different advertising channels? Please rate the channels on a scale from 1 =	10
"doesn't disturb / annoys me at all" to 5 = "disturbs / annoys me a lot". | https://specialreports.oaaa.org/facebook-combine-ooh-with-facebook-ads/

11

Statista Update

12

Statista

Building a global DaaS Unicorn

13

Statista fully on Track to achieve full Year Targets 2019

No.1 Business Data Platform fully on Growth Track

9 offices in international hubs

]^`ab YZ[ CDE &'()*+,-.#$% STUVWX PQR

;<=

FGHIJKLMNO

23456789: /01 fghijk >?@AB cde !"

North America: 3rd US Sales Office planned for 2020

Asia:2 additional Sales Office planned for 2020/21

Update

• Revenue:
  Expected to grow by approx. 30% in 2019
• Sales focus:
  200 additional employees, thereof 50% in sales
• Further internationalization:
  Planned for 2020/21 (Statista business)
• Launch of Statista Company Database: Information on 43,000 companies

Source: Statista data

14

Building a global DaaS Unicorn

Statista is the leading global Data as a Service (DaaS) Business

Tech		Media	Consulting		Corporate	Public Sector

15

INDEX

01		02		03		04		05
Financial Update /		Digitization of		Sales National /		Data /		Outlook
Statista Update		Infrastructure		Regional		Programmatic

16

Ströer with unparalleled Position in the Growth Industry OoH

Clear Market Leader overall and overproportioned in all DooH Categories

Above the line market

Public Video

Roadside

POS/Digital

Market share OoH

Network

Screens

Signage*

Net sales, share in %

Print

36%

Others

(only few key players)

22.9 bn€

TV

Digital

Others

Others

Others

33%

(strongly

20%

(strongly

(strongly

fragmented)

fragmented)

fragmented)

Radio

OoH

4%

7%

Pipeline

60%

40%

~340

~73,000

Ströer

Others

Screens

Screens

Screens

Source: PWC; Nielsen; Schickler Media Index 2019 - Forecast; Online: Display & Video & Search,

17

Ströer data, https://www.dmi-org.com/downloads/Digital_Out_of_Home_Standorte_Screens.pdf; *excluding rights of promotion

Digitalization drives Business Performance

Digitization

Quality

Customization

Flexibility

Programmatic System control

Highly efficient and performant infrastructure

18

Digital Dividend pays off

Long-term Portfolio Contracts converted into DOoH Assets

More than 5,000 screens

(>90% indoor)

Investing in

505

additional

premium screens

in 2019

Total Ströer share of

premium roadside locations*

Market share approx.

90%

Investment volume OoH 2019

Clear focus on digitization of inventory

Roadside

Screens

24%

Public

Video

36%

Roadside

Screens

Others

(only few key players)

Under construction

High expansion potential

~350

Indoor - almost completed

Roadside - at the beginning

Source: Ströer data; *Premium locations for >9 sqm Megalight/ Digital Screens

19

Dominating Location

Marketplace - Train Stations & Malls

Infoscreen		DERG		Building up		ECE Flatmedia
acquisition		acquisition		Public Video Network		take-over

2004

	1.000	Screens
Infoscreen	500
	0

2005		2011
	3.000	Screens
Video	2.000
Station	1.000
0

2012

	5.000	Screens
Mall Video	2.500
	0

20

Digitalization at German railway stations by Ströer - earlier and today

Hamburg

2011

2019

Cologne

1965

2019

21

Dominating Location

POS - UAM is the dominating Player in DOoH Longtail

Mediamarkt-TV

Cinema Channel

Active-TV

Apotheken-TV

McDonald's-TV

Taxi-Channel

POS/Digital Signage: 73,000 screens in total

22

Strong build-up Phase still goes on this Year

Massive Investments in additional Screens until 2024 with major Focus on Roadside

July 2019

July 2019

August 2019

October 2019

23

By becoming less expensive throughout the Years the Digitalization of Locations is more economical

Panel price development

- 62%

• Ströer uses own sourcing with priority Shanghai office (under native management, 100% Ströer employed)
• Prices for high quality LED screens are constantly declining more locations become efficient due to decreasing CAPEX per location

2013

2014

2015

2016

2017

2018

Source: SMD outdoor pricelist 2013-2020

24

Megavision Duesseldorf 64 m²

Example of large private Screen in roadside Location

25

Digital Dividend pays off

Local Sales Approach maximizes Monetization of digital roadside Assets

>93% RSS revenues SMEs/signage

Medium sized

	Regional
Content	key account

26

INDEX

01		02		03		04		05
Financial Update /		Digitization of		Sales National /		Data /		Outlook
Statista Update		Infrastructure		Regional		Programmatic

27

National Sales

28

Continuously improved Marketing- and Sales-Positioning

Best prepared to fully access local and national Clients

Media sales house ranking Q3 2019		OoH Content Direct

SevenOne Media

IP Deutschland

Axel Springer

RMS

El Cartel Media

ARD-Werbung, Sales & Service

Gruner + Jahr

Discovery

Communications

Burda

1

2

3

4

5

6

7

8

9

10

TV, Online

TV, Online

OoH, Online

Print, Online

Radio

TV, Online

TV, Radio

Print, Online

TV, Online

Print, Online

Sources: Nielsen Media Research; gross advertising, Q1-Q3 2019 (Germany); cons. gross sales Ströer: OoH Germany + all digital saleshouses of the group

29

Huawei Impressions

30

VW Impressions

31

Google Impressions

32

Facebook Impressions

33

myblue Impressions

34

Regional Sales

35

Potential of more than 7bn traditional Media Spend in regional Market

Growing Quantity and Quality of Salesforce is Key to drive (D)OoH

l

13.4

(27.8%)

reg. Ad- market

						Strong growth of local &
Ströer potential			digital sales force
	Sales team/FTEs	2016	2017	2018	e2019	e2020
						Regional consultants	89	178	198	158+	170+
						Local sales	243	295	441	662+	850+
						"Digital only"	62	76	124	162+	220+
						consultants
						Ströer SME only	40	56	58	60	80+
						call center agents
						TOTAL	434	605	821	1,042+	1,320+
		0.5	5.2
			(3%)
		(39%)
						Ströer customer mix
							OoH revenues

Regional

National

61%

OoH Online

Source: Schickler Research | Simplified presentation of categories | Adjusted for regional advertising spendings of national advertisers

36

Our Backbone: Broad Coverage

Local Market Know-How

On-site presence		Local execution quality
Local Do-it-for-you solutions		Local presence enables short routes to the customer

37

Existing Sales Team is constantly being expanded

Attractive Conditions and a lasting Recruitment Path

• Ten-weeksales trainee program
• Individual support and regular trainings
• Qualification phase with defined turnover target

38

Scaling our local Salesforce

Efficiency: Fully automated local Sales Process (do-it-for-you)

o

Displays pall clients on google maps with

blockers for the hunter q (red=blocked, green=

available)

r m
Booking of Out-of-Home	Check adress, contract
media via Google Maps	partner details, payment
Booking of sign media	Terms
via bookingnform	Create Contract

Printing of signed or unsigned contract or mail to client with contract details

39

EasyS Walkthrough

40

Multi-Layer Data Pool allows deep View into regional Market Data

Company cluster

Categories

Regions

Branches

41

Structural Investments in future Growth of t-online.de

Localization of Portal, new Tech & Product Team, Integration of Verticals

Building a new local portal		Next level tech & product

Second bigger optimization initiative of tech, marketing and product departments since 2015

Introduction of a new content management system (CMS) with short-term impact on monetization

Final step of "modernization" completed earlier than originally planned

Integration of total publishing into one organization

One consistent tech & monetization platform across all publishing assets around flagship t-online.de

Vertical platforms like:

https://t-online.de/region/koeln

27 local city portals already online

42

INDEX

01		02		03		04		05
Financial Update /		Digitization of		Sales National /		Data /		Outlook
Statista Update		Infrastructure		Regional		Programmatic

43

Digital Dividend pays off

Incremental programmatic Revenues from Online to Public Video (DOoH)

Global programmatic ad spends		German programmatic ad spends	Ströer programmatic share in
2019*		2019* (WITHOUTStröer)	2019**

Online

DOoH

		Programmatic
						Programmatic
65%		Traditional					Traditional
37%		45%

		Programmatic				Programmatic
					Traditional
2%		Traditional
2%
24%

Source: *Zenith Programmatic Marketing Forecast 2019; **Ströer data

44

Programmatic Public Video at top Frequency Locations

Constant weekly Revenue Inflow since more than one Year now

	Sustainable growth of bookings			Frequency is king
Q1	Q2	Q3	Q4

													Main shopping streets	Main stations
														Hamburg
												120,000	(Mönckeberg Str.)	450,000
														Munich
												175,000	(Kaufinger Str.)	400,000
														Frankfurt
												180,000	(Frankfurter Zeil)	460,000
1	5	9	1 3	1 7	2 1	2 5	2 9	3 3	3 7	4 1
		Berlin
						2018		2019				60,000	(Friedrich Str.)	300,000

45

From Loop to Ad Server

Classic Public Video

Ad server based Public Video

Development

Currently both systems can be used for campaign delivery.

The approach and execution differs strongly among them.

46

Audience based Playout

Programmatic planning approach

• Contact based: additional parameters (area, time, audience etc.) can be added
• Data based decision-making
• Playout based on audience aggregation and further external data

Reactive	Tactical	Target	Content
(e.g. merchandise	based
(connect to	audience
management	(connect to sport,
ad server/SSP)	(e.g. men)
system)	News, content etc.)
Time based	Rule based	Geographical
(e.g. rush hour)	(e.g. weather)	(station, mall)

Data based, programmatic playout

6h 7h 8h 9h 10h 11h 12h 13h 14h 15h …h

Station 1

Station 2

Mall 1

Metro S. 1

Metro S. 2

Mall 2

High target	Low target
audience	audience
accumulation	accumulation

47

What is new since beginning of 2019

live

• Successful integration of the Public Video inventory into Ströer SSP

Public Video is available for all… more to come Video DSPs connected to Ströer

SSP

• New Deal Art: Fix Price Deal

48

How to book programmatic Public Video?

Since 2017 - Programmatic Guaranteed

• The purchase decision is made in the ad server
• Every Bid results in a playout

Since 2019 - Fix Price Deal

• The purchase decision is made in the DSP / at the customer's premises
• DSP/customer decide whether to accept the bid - which may lead to a playout - or not to answer the bid

Is the inventory traded through an auction?

	No		Yes		Yes		Yes
	Is the inventory volume		Is the auction for selected buyers?
	guaranteed?
	Yes		No		Yes		No
	Programmatic		Fix Price Deal		Private		Open Auction
	Guaranteed			Auction

transparent transparent

Tbd.

49

Fix Price Deal Types & Pricing

• 3 different Deal types available which differentiate by transparency level (Low, Mid, High)
• DSP receives one unique Deal ID per medium and transparency level
• The deal CPM varies depending on the transparency level
• All fixed price deals are customer-specific, i.e. each fixed price deal is linked to one dedicated client
• Agency deals that apply to multiple clients are not permitted

Deal-Typ	LOW	MID	HIGH
Network
visible
City	X
visible
Location	X	X
visible
Baseprice	Network	Network	Medium
	+Time	+Time	+Time
		+City	+City
			+Location

50

Customized Public

Video Solutions

Location / Time Targeting		Target Audience Optimization

With audience based Public Video,
campaigns can be individually
adjusted to customer media goals	Content Marketing
Event (Weather) Targeting

51

Event Targeting

• Automated, rule-based campaign set up
• The first standardized event targeting solution is weather-/ pollen flight targeting
• The ad playout is triggerd by a predefined weather situation
• Weather types are geographically available at city level and updated every three hours
• Further customer-specific Event Targetings are possible

52

Content Marketing

Ströer Media Brands are credible and convey brand trust and quality.

Contextual consumer approach to leverage the clients brand with a positive image transfer of the Ströer media brands.

Content Marketing Ads:

• Companion Ad, Split Screen Ad
• Sponsoring (on/off presenter)
• Advertorial (digitally renewable)

53

OS Data Solutions

The German Data Alliance

Beispiel desired (da Punkt

Content Marketing am

Beispiel Frauen gezeigt wird)?

• New targeting segments - e.g. purchasing intent data, performance products, residential targeting, lookalike modeling etc.
• Pre-qualifiedreach for Retail Media - Lookalike modelling of product intents on entire cookie pool for new customer approach
• Maximizing quality and reach for our customers by consolidation of know-how from OTTO BI and Ströer BI
• More than 2,000 new segments

54

Cross-Media Targeting Solutions based on German Data Pool

Sociodemographic		Product intent
age | gender | HHNI | education |		Product | brand | assortment etc.
activity | children etc.

Psychographics

Personas | Sinus Milieus

Geographic

countries | states | cities |

postcode areas | double select

Seasonality

Christmas | Easter | New Years Day

Interest

Automobile | movies | finance | fashion |

insurance | travel | sport etc.

ConsumerRetail

Characteristics Behaviour

Interest &	Customized
Affinity	Audiences

Individual retargeting

Retrieving tagged users, e.g. shop or website visit

Shopping behavior

supermarket | discounter | wholefood shop |

online | specialized trade etc.

Prospecting

Modeling brand-affine users with the help of statistical twins

Site Retargeting

Find marked users again

Hobbies

Sport | games | photography | etc.

Technical

Browser | device | OS |

mobile device | language etc.

55

Ströers Data Product Logic

Audience Based	Location Based	Context Based
Addressing target groups in public	Addressing target groups at the	Addressing target groups in a
space and online	location or after visiting a location	contextual context

56

Audience based

Addressing Target Groups in Public Space and Online

• Segmented geographical areas and online users in different target groups
• Data sources:
• • Online data of Ströer DMP
  • Data from cooperation with Otto Group Media and others
  • Household data of Deutsche Post
• Database:
• • Bid requests, logins, household data, movement data and online shop visits
• Application in OoH target group optimization, online targeting

57

LOHAS

Interest in Health

• According to the micro dialog database*, LOHAS have a high affinity to the product range in online retail:
• • Pharmacy products
  • Sun protection
  • Hygienic means
  • Homeopathic remedies

*Source: Deutsche Post Direkt

58

LOHAS: Heatmaps

Strongest expression =		59

Location based

Addressing target groups at the location or after visiting a location

• Approx. 1.6 million location data with addresses, coordinates, information on type and retail chains
• Data sources:
• • HERE
  • Nielsen TradeDimensions
  • OpenStreetMap
  • Ströer DMP
• Database:
• • Navigation data
  • Trade data
• Application in touchpoint, drive- to-store and retargeting campaigns

60

Campaign Extension: Mechanics

A virtual geofence is placed around all covered OoH surfaces.

Mobile devices which are inside the geofence area during the OoH campaign are marked. This is mainly done through partner apps (weather, navigation, dating, news, etc.) that have permission from users to use their location data for advertising purposes.

If the mobile devices are used afterwards (even outside the geofence, e.g. at home or at work), mobile advertising can be played to reinforce the message of the OoH advertising.

61

Summary: Sustainable and reliable Business Development

The Core of the OoH+ Strategy

1.

2.

3.

4.

Ongoing digitization	Developing	Leveraging	Increasing
of infrastructure	local sales forces	programmatic & tech	client relevance

More than 500 new premium	+221 incremental people	Massively accelerating	Focus of maximizing
screens to be installed	(to in total 1,042+)	programmatic DOoH	share of wallet
in 2019	by the end of 2019	revenues ytd	on top 30 clients ytd
381 in 1st 9 months	+176 in 1st 9 months	24% programmatic share	Total Ad Market: -2.7%
Ströer: +7.3%

62

INDEX

01		02		03		04		05
Financial Update /		Digitization of		Sales National /		Data /		Outlook
Statista Update		Infrastructure		Regional		Programmatic

63

Ströer Group's Key Performance Indicators - Guidance 2019*

Given the strong order intake for the 4th quarter, we expect organic revenue growth at the upper end of the 3% to 7% guidance range, that we previously communicated, for the full year.

*incl. IFRS changes

64

Financial Calendar 2020

Q4 2019

November 13th

Publication of Q3 Quarterly Statement

November 25th/26th

Analysts' Conference

Frankfurt/London

Q1 2020

March 3rd

Publication of Preliminary

figures 2019

Guidance 2020

March 30th

Annual Financial Report

and Proposal of Dividend

Q2 2020	Q3 2020	Q4 2020
		November 12th
		Publication of
		Q3 Quarterly Statement
	August 13th
May 12th	Publication of Half-Yearly
Financial Report

Publication of

Q1 Quarterly Statement

June 30th

Annual General Meeting

65

Disclaimer

This presentation contains "forward looking statements" regarding Ströer SE & Co. KGaA ("Ströer") or the Ströer Group, including opinions, estimates and projections regarding Ströer's or the 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 the 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 release 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 the 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.

67

Appendix

68

Contact Center Industry experiences secular Growth

On a global and a German scale

Industry growth globally		Industry growth Germany
(in b EUR)		(in m EUR)

90

80

70

60

50

40

30

20

10

0

	4500
4% CAGR	4000	8% CAGR

3500

3000

2500

2000

1500

1000

500

						0
2015	2016	2017	2018	2019	2020	2015	2016	2017	2018	2019	2020

Source: PricewaterhouseCoopers - "Der deutsche Contact-Center und CRM-Service-Markt" 2018

69

Multiple Drivers cause this secular Trend

Strong growth	Transformation	Shift from in- to	New products with
in service-centric	from retail to	outsourcing of	integrated service
business models/	digital driven	customer	components and
culture	omni-channel	experience	increasing
	models	centers	complexity

Source: Ströer analysis

70

In this Context Ströer Dialog is uniquely positioned in Germany

01

02

03

04

05

Product offering

Sales synergies

Recruiting

Technology

Local

Only player with multi-	Strong business
channel capacity:	Unique recruiting
development synergies	Tech resources and	Heritage and local
contact center, direct	capabilities through
through Ströer sales	tech driven spirit	foundation in Germany
sales, OoH, digital	Ströer media network
organization
marketing

71

This Position drives our Growth along three Dimensions in 2020

New technology

Deeper vertical integration through BPO projects and holistic sales offerings

New client segments

72