COLOGNE (dpa-AFX) - Out-of-home advertising specialist Stroer wants to take the momentum from strong Christmas business into the new year. Group CEOs Udo Müller and Christian Schmalzl are relying above all on digital out-of-home advertising as their main source of hope. "In the past year, we observed that many customers increased the proportion of outdoor advertising," said Schmalzl in Koln, according to a press release on Tuesday. The Group's largest division is expected to grow over the course of the year. As a result, total sales should also grow more strongly under its own steam. The news was well received on the stock market.

The Stroer share rose by around nine percent at times in the morning. At the end of the morning, it was still up 6.6 percent at 55.85 euros, making it one of the strongest stocks in the MDax, the index of medium-sized stocks.

According to the company, organic sales growth in the Group in 2024 is expected to be significantly higher than the previous year's figure of 7.5%. Adjusted for exchange rate effects and acquisitions, revenue from the core out-of-home advertising business is expected to increase by up to 15% in the first quarter.

In a conference call with analysts, Schmalzl did not want to commit himself to the months thereafter: "In the last three to four years, there have been many external factors that could not be influenced". Accordingly, business in the second quarter could develop better or worse than at the start of the year.

Stroer also places its digital out-of-home advertising in its core business: according to Group figures, this sub-segment grew by a third in the final quarter of 2023. "We are noticing that our customers are no longer considering digital outdoor advertising as an additional option, but now as their preferred platform," explained CFO Henning Gieseke at an analyst conference.

JPMorgan analyst Marcus Diebel praised the "strong outlook" for the first quarter, which had exceeded average market expectations. For the year as a whole, however, the forecast still looks conservative. He expects analysts' estimates for adjusted operating profit to rise.

Stroer's business is divided into three areas: In addition to out-of-home advertising, the somewhat smaller, second pillar is Digital & Dialog Media. In this segment, the company combines its media brands and theme channels such as t-online.de, kino.de and Giga as well as its services and call centers for customer acquisition and recovery.

The Data as a Service (DaaS) and e-commerce segment, in which the Group includes the statistics provider Statista and the online cosmetics retailer AsamBeauty, is significantly smaller. The latter increased its turnover last year by around 28 percent to more than 200 million euros for the first time. AsamBeauty has been up for sale for some time, but a buyer still does not seem to have been found. According to JPMorgan analyst Diebel, the segment has performed weaker than expected due to investments.

Last year, Stroer increased its total turnover by just under eight percent to a good 1.9 billion euros based on preliminary figures. According to the company, this means that it performed significantly better than the advertising market as a whole, which had to contend with stagnating revenues. Adjusted for special effects, earnings before interest, taxes, depreciation and amortization (EBITDA) increased by five percent to 569 million euros. Analysts had expected roughly the same for both key figures.

At just under 81 million euros, the free cash inflow was around 60 percent higher than a year ago. The company plans to publish its full annual report on March 25. Competitors ProSiebenSat.1 and RTL plan to present their figures on March 7 and March 14./ngu/mne/stw