Stroeer (SAX) Q2 2024 earnings summary

Executive summary

• Achieved record H1 2024 sales of €965 million, up 12% year-over-year, with 10.3% organic growth driven by strong out-of-home and digital out-of-home segments.

• Adjusted EBITDA rose 16% to €263.3 million, with margin improving to 27.3%; adjusted EBIT up 34% to €130 million, and adjusted net income increased 37% to €55 million.

• Free cash flow improved from -€16 million in H1 2023 to +€22 million, reflecting operational strength and lower CapEx.

• Digital out-of-home revenue grew 29% in Q2, now approaching 40% of total out-of-home revenue and expected to surpass 50% by end of 2026.

• National advertising clients rebounded, and programmatic sales contributed to robust fill rates and operational leverage.

Financial highlights

• Q2 organic sales growth accelerated to 11.5%, with reported sales up 12%.

• Adjusted EBITDA for Q2 increased 19% to €155 million; reported EBITDA up 18% to €151 million.

• Q2 adjusted EBIT rose 38% to €72 million; adjusted net income for Q2 was €42 million, up €11 million year-over-year.

• Operating cash flow for H1 reached €163 million; CapEx for H1 was €41 million, down 35% year-over-year.

• Leverage ratio remained stable at around 2x, with successful refinancing of €268 million in note loans.

Outlook and guidance

• Q3 2024 organic out-of-home revenue expected up ~10%, with digital out-of-home up over 20%.

• Full-year 2024 group revenue to exceed initial guidance by €40 million, offset by lower ASAM sales; annual guidance unchanged.

• Organic revenue growth for 2024 to be noticeably higher than 2023’s 7.5%, with substantial operational leverage and stable EBITDA margin.

• CapEx for 2024 expected slightly below prior year; from 2025, CapEx-to-sales ratio to decline further.

• Management maintains its 2024 full-year forecast as set out in the 2023 annual report.