Ströer : Annual financial report 2023

CONTENTS

The Group's financial figures at a glance

The Board of Management of the general partner

Foreword by the general partner

Supervisory Board report

3 4 5 8

Combined management report

Background and strategy of the Ströer Group

14

Economic report

25

Business environment

25

Financial performance of the Group Net assets and financial position

26

28

Financial performance of the segments

34

Information on Ströer SE & Co. KGaA Share information

36

40

Employees Opportunities and risks Forecast

43

46

59

Information required under takeover law

63

Consolidated financial statements

Consolidated income statement

Consolidated statement of comprehensive income

67 68

Consolidated statement of financial position

69

Consolidated statement of cash flows

Consolidated statement of changes in equity

Notes to the consolidated financial statements

71 73 74

Responsibility statement Independent auditor's report

147 148

Other information

Contacts and editorial information/ financial calendar

155

Ströer SE & Co. KGaA ('Ströer KGaA')

The Group's financial fifures at a flance

THE GROUP'S FINANCIAL FIGURES AT A GLANCE1

REVENUE

1,914.3

EUR m

(prior year: EUR 1,771.9m)

SEGMENT REVENUE

In EUR m

856.4

790.9

815.8

743.7

350.9

294.4

2022

OOH Media

2023

Digital & Dialog Media

2022

2023

DaaS & E-Commerce

2022

2023

Revenue

EBITDA (adjusted)

Exceptional items EBITDA

1 For further details on the individual financial figures, please refer to the section 'Value-based management'.

The Board of Manafement of the feneral partner

THE BOARD OF MANAGEMENT OF THE GENERAL PARTNER

Udo Müller Co-CEO

Udo Müller, born in Rüdesheim in 1962, entered the field of out-of-home advertising in 1987 by marketing his handball team, the Reinickendorfer Füchse, in Berlin.

In 1990, he teamed up with Heiner W. Ströer to establish Ströer City Marketing GmbH, which was reorganized as an Aktiengesellschaft (German stock corporation) in 2002. Acquiring Deutsche Städte Medien in 2004 and Deutsche Eisenbahn Reklame in 2005, Müller advanced the growth of the Company and took it public in 2010.

In 2011, he was awarded the title of Senator h. c. by the German Association for Small and Medium-sized Businesses (BVMW) in recognition of his exceptional entrepreneurial achievements.

Udo Müller added online marketing to the Company's portfolio in 2012. In 2017, he successfully expanded Ströer's product portfolio to include direct marketing.

Christian Schmalzl Co-CEO

Christian Schmalzl, born in Passau in 1973, studied politics, philosophy, literature, and sociology at the Universities of Passau, Munich, and Cardiff. After his studies, he joined MediaCom in Munich in 1999 and became the youngest managing director of the agency group in 2002.

In 2007, he assumed responsibility for the entire Germany business, before being appointed Worldwide Chief Operations & Investment Director (COO) of the international media group in 2009. Christian Schmalzl joined Ströer's Board of Management as COO at the end of 2012. He was appointed Co-CEO of the general partner of Ströer SE & Co. KGaA in March 2017, forming the Ströer Group's leadership duo alongside Udo Müller.

Henninf Gieseke CFO

Henning Gieseke was born in Hilden in 1971. He studied business administration at the University of Cologne and joined the Metro Group via Kienbaum Consultants. During his time at Metro, he held responsibility for functions such as corporate development, investor relations, and group financial planning and reporting. In 2012, he took up the position of Chief Financial Officer (CFO) at Real Holding and went on to become its Co-CEO.

Henning Gieseke was appointed CFO of the Ströer Group with effect from June 1, 2021.

FOREWORD BY THE GENERAL PARTNER

Dear reader, dear shareholder,

Overall, 2023 was a good year for the Ströer Group. We increased our revenue by 8% to EUR 1.9b and improved EBITDA (adjusted) from EUR 541m to EUR 569m, despite challenging economic conditions both at home and abroad. Our ability to break records in this climate comes down to having a robust and proven strategy in the form of our OOH+ strategy with its focus on Germany and, above all, on our core out-of-home business (OOH).

OOH

Revenue in our OOH advertising business went up by around 8% to EUR 856m in 2023 (prior year: EUR 791m), whereas the overall advertising market in Germany only managed a rise of 0.3%. Our digital OOH advertising is a key driver of revenue and growth. Increases in revenue of 28% in digital OOH advertising and over 99% in the programmatic public video business are glowing testimony to the long-term focus of our strategy, the foundations of which we laid some 15 years ago. Thanks to our unique digital portfolio, we can now ride the wave of structural change in the German advertising market.

Today, we are on the cusp of a sea change in the advertising market and in OOH advertising, which the digital transformation of our OOH portfolio has helped to trigger. The transition from cityscapes dominated by analog street furniture to the digital age is under way all around us. The relatively high barriers to using OOH advertising are basically being torn down. Whereas the cost of a campaign on one of our analog networks amounted to a high six-figure sum even just recently, this barrier to entry is currently being lowered to an amount that is manageable even for small and medium-sized companies, and OOH advertising perfectly complements an increasingly digital marketing mix and adds a lot of reach. Campaigns are run programmatically, only being served for our customers' specific target audiences at specific locations. This allows us to reach new customer groups and tap new advertising budgets.

We are seeing convergence across all digital advertising channels, particularly for national customers. Based on our programmatic booking systems, contact with customers is becoming a common digital currency. Maximizing customer contacts, especially in performance marketing, is the key to success. The quick and flexible booking and serving of advertising, wherever the target audience happens to be, is critical to our success and to the long-term and profitable growth of the OOH business.

This trend is already casting its shadow and becoming increasingly apparent in German advertising market figures, which show that the market share of the OOH category rose from 7.8% in 2022 to a record high of around 8.6% as at the end of 2023.

Difital & Dialof

Our Digital & Dialog Media segment also performed well in 2023. Revenue, for example, increased by almost 10% year on year, from EUR 744m to EUR 816m. More specifically, the digital business (online advertising and content publishing) saw encouraging revenue growth from EUR 388m in 2022 to EUR 419m in 2023 that was broadly carried by the double-digit increase achieved by our own platforms, such as t-online. Our dialogue business with its call centers and direct sales activities (door-to-door) was even stronger than the digital business, advancing its revenue by around 12% to EUR 397m (2022: EUR 356m). In terms of earnings, the first six months of the reporting year were especially difficult as a result of shifts in the product mix. The steps we took to stabilize earnings had a rapid impact, however, and we overcame the challenges on the whole.

DaaS & E-Commerce

We continued our success story in the DaaS & E-Commerce segment in 2023 and prepared Statista for the next stage of its growth journey. A cornerstone of this was the launch of a CRM system and the optimization of our sales structures, particularly for Statista's largest market, the US. By refocusing on already established markets, Asam was able to accelerate its revenue growth even more, reaching some 28% and passing the EUR 200m mark for the first time. This is an important milestone for Asam, and for Ströer as a whole, particularly in view of our resolute focus on shareholder value.

Our aims are to make the net asset value of Ströer more transparent, streamline our portfolio, and refine our equity story. To this end, we plan to part with our peripheral activities, such as Asam, in the foreseeable future, and focus even more keenly on our strengths in our core businesses.

Besides managing revenue growth, we also prioritized operational steps to secure and enhance the Company's earnings in the reporting year. Despite inflation reaching double digits for a time, a tight interest-rate environment for the Company, and comparatively high wage settlements, EBITDA (adjusted) rose from EUR 541m to EUR 569m.

The positive course of business was also reflected in cash flow, with free cash flow (adjusted) surging by some 60% to around EUR 81m in 2023 compared with EUR 50m in 2022.

The leverage ratio remained largely steady year on year at 2.24, following 2.20 twelve months earlier, and was at an appropriate and comfortable level for our Company, despite a dividend distribution totaling EUR 103m, a share buyback of EUR 24m, and capital expenditure of around EUR 129m.

Shareholder value

In light of the solid results generated in 2023 and given our firm belief that we will continue to achieve sustained profitable growth over the coming years, we plan to propose to the shareholder meeting that we pay a dividend of EUR 1.85.

Besides the dividend, the performance of Ströer shares is an important component of our shareholder value strategy. And for this reason, communication and intensive and ongoing dialogue with the capital markets is very important to us. In our role as general partner, and together with the investor relations team, we reached out to investors and analysts at conferences and a number of roadshows in major international financial centers in the reporting year, taking the opportunity to present and explain our strategy, current trends, and our medium-term goals.

Sustainability

Sustainability was again a high priority for our Company in 2023 and we reaped the rewards of our efforts. Ströer was singled out as a leading company in terms of sustainability when it reached the final of the German Sustainability Awards. We also maintained - and even improved in some cases - our high ESG ratings from a number of major rating agencies.

We believe that we are in a very good position thanks to a combination of our robust OOH+ strategy, the steps we have taken this year to strengthen and protect our Company over the long term, our digital portfolio with which we are helping to shape the structural change in the German advertising market, our excellent market position, our sustainability strategy, and our transparent communications.

Thanks

We would like to extend our sincere thanks to our dedicated and highly skilled employees for their hard work last year and to our business partners and investors for the trust they have placed in our Company, and we wish you all a successful year in business in 2024.

The general partner, represented by its Board of Management

Udo Müller Co-CEO

SUPERVISORY BOARD REPORT

Christoph Vilanek

Chairman of the Supervisory Board

Dear reader,

It seems somehow boring to report, year after year, that your Ströer has had a good year and perhaps even performed better than expected given the circumstances. But someone from a major investment company once told me that "boring is good, because it means that everything's ok, there are no nasty surprises, and the management team is focusing on running the business". And that is precisely how it is. Ströer's Board of Management and its management team are focusing their efforts on looking after the business, which was not always easy in 2023. A range of factors - from war, inflation, and political uncertainty through to reticence about spending and existential fears among businesses and consumers - all tend to hit the marketing expenditure of advertising customers before anything else. The general thinking seems to be that marketing is the easiest thing to stop in order to save money.

I therefore find it all the more remarkable that Ströer - thanks to its intelligently designed portfolio of services - can cushion the impact of all of these external factors and offset a downturn in one line of business with advances in another. We, the Supervisory Board, are responsible for creating the conditions that enable the Board of Management to do just that. Our responsibility is to establish the rules, with adequate room for maneuver, that will enable the Company to do business successfully in the interests of all of its stakeholders. And I believe that we accomplished exactly that once again in 2023. Please read on to find out more about how we did it.

In 2023, the Supervisory Board discharged, in full, the responsibilities incumbent upon it under the law, the Company's articles of association, and its rules of procedure. We carefully monitored and advised the general partner, Ströer Management SE, on a regular basis. In doing so, the Supervisory Board primarily checked that the general partner, represented by its Board of Management, was running the Company lawfully, expediently, and properly. Both during and between Supervisory Board meetings, the general partner regularly provided the Supervisory Board with written and oral reports on business policy and all relevant aspects of business planning. It therefore fully complied with its obligations to provide information.

At additional meetings, the chairman of the Supervisory Board, the deputy chairman of the Supervisory Board, and the chairman of the Supervisory Board's Audit Committee discussed key business developments with each other and with the Board of Management of the general partner. The full Supervisory Board received regular oral reports on these deliberations.

Meetinfs of the full Supervisory Board

The Supervisory Board of Ströer SE & Co. KGaA met five times in 2023. In agreement with all members of the Supervisory Board, the chairman decided that the majority of these meetings would be held as hybrid events given that the COVID-19 pandemic had subsided. The Supervisory Board also approved a written decision.

The main subjects examined during these routine discussions were the Ströer Group's revenue and earnings, its financial position and financial performance, and personnel planning. An increasing amount of time at our meetings was devoted to the topic of sustainability. The general partner reported to us on the current situation with the Ströer Group's businesses in each of the meetings, and, on an ongoing basis, on the impact on the Ströer Group of Russia's war against Ukraine, the energy crisis, and the ever more pronounced weakening of the German and global economy. The Supervisory Board regularly discussed agenda items without the Board of Management of the general partner, particularly when the agenda items related to internal Supervisory Board matters.

Our meeting on March 23, 2023 was dominated by a discussion of the work on the separate and consolidated financial statements for 2022. In the presence of the auditor, who presented the focus of the audit and its findings, we discussed in detail and subsequently approved - as recommended by the Audit Committee - the separate financial statements of Ströer SE & Co. KGaA and the consolidated financial statements of Ströer SE & Co. KGaA. The auditor had issued an unqualified opinion for each of these sets of financial statements. We also reviewed and approved the non-financial declaration for 2022, the remuneration report, and the report on relationships with affiliated entities. The general partner then reported on the liquidity of the Company's equity. Another focus of the meeting was on agreeing the motions to be put to the shareholder meeting. We adopted motions to launch the 2023 Stock Option Plan, agreed with the Nomination Committee's proposed candidates for election to the Supervisory Board, and agreed on how the annual shareholder meeting should be held in light of the new option permitted by law. In light of the risk to the global economy from Russia's war against Ukraine and the accompanying uncertainty about the further course of business for the Ströer Group, we postponed the decision on the appropriation of profit for 2022. Finally, the general partner reported on the key outcomes of risk management and internal audit for the second half of 2022 and presented the compliance report and the data protection report for 2023.

At our meeting on May 12, 2023, we approved after extensive discussion the motion to be put to the shareholder meeting on the appropriation of profit for 2022 and concurred with the Audit Committee's recommendation to propose KPMG AG Wirtschaftsprüfungsgesellschaft as the auditor for 2023.

During our meeting on July 5, 2023, immediately before the Company's annual shareholder meeting, we elected Ms. Elisabeth Lepique to the Audit Committee to succeed Mr. Christoph Vilanek, who stepped down from the Audit Committee as agreed.

On Aufust 26, 2023, we adopted a written resolution to reduce the Company's share capital as the general partner had decided to redeem its limited partner's shares.

As planned, we began our meeting on September 13, 2023 without the Board of Management of the general partner. We discussed the measures identified in 2022 to improve the efficiency of the Supervisory Board's work and established that they had mostly been implemented. The chairman of the Audit Committee then reported on the main results of the committee's review of the quality of the audit by KPMG AG Wirtschaftsprüfungsgesellschaft of the separate and consolidated financial statements of Ströer SE & Co. KGaA for 2022.

At our meeting on December 11, 2023, we concurred with the recommendation of the general partner and the Audit Committee to engage the Company's auditor to formally examine the Company's remuneration report for 2023 and to conduct our own review of the Ströer Group's non-financial declaration for 2023. Furthermore, the general partner explained the internal audit plan for 2024 prepared in consultation with the Audit Committee. Finally, we agreed the declaration of compliance for 2023 with the general partner.

10

Supervisory Board committees

The Supervisory Board had two committees in the reporting year. These committees are tasked with preparing resolutions and topics to be discussed by the full Supervisory Board. The committee chairpersons reported regularly and comprehensively to the Supervisory Board on the work of the committees.

The Audit Committee

The Audit Committee met six times in 2023. It supported us in the monitoring of the financial reporting process and held in-depth discussions on the separate and consolidated financial statements, the interim financial statements, the dependent company report, the non-financial declaration, and the sustainability report. The committee also monitored the effectiveness of risk management, discussed at length the ongoing improvements to the internal control system, heard reports on the work of internal audit, approved the latter's audit plan, and examined the annual compliance report. Discussion of these topics gave the committee a detailed insight into the status of governance, risk, and compliance certification. The discussions also involved an analysis of the internal resources of the relevant internal departments. The Audit Committee devoted an increasing amount of time to the discussion of sustainability topics, receiving reports from the ESG officer of the Supervisory Board.

The Audit Committee resolved to recommend to the Supervisory Board that it engage KPMG AG Wirtschaftsprüfungsgesellschaft as an independent auditor, a decision that took account of the review of the auditor's independence, which did not indicate any shortcomings. The committee monitored the quality andefficiency of the auditor as well as the services it provided (audit quality review) in accordance with the plan for reviewing the quality of the auditing of the financial statements that it adopted in the prior year. It also discussed the preparatory measures for the audit of the 2023 separate and consolidated financial statements and agreed the key audit matters with the auditor.

The Audit Committee convened regularly in the presence of the CFO of the general partner and in some cases also with the auditor. During preparations for the audit and while it was being conducted, the members of the Audit Committee also held regular discussions with the auditor without the Board of Management of the general partner.

The Nomination Committee

The Nomination Committee held one meeting in 2023. Its deliberations focused on succession and appointment matters relating to the Supervisory Board and, taking due account of the legal and regulatory requirements, it sought a candidate for election at the shareholder meeting on July 5, 2023 and proposed said candidate to the Supervisory Board. Furthermore, it reviewed the profile of skills and expertise for the shareholder representatives on the Supervisory Board, taking into consideration the requirements of the German Corporate Governance Code and the German Act to Strengthen Financial Market Integrity (FISG) in doing so.

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Stroeer SE & Co. KGaA published this content on 25 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2024 09:02:07 UTC.