Stroeer (SAX) Q1 2025 earnings summary

Executive summary

• Revenues rose 5% year-over-year to EUR 475.5 million, with adjusted EBITDA up 8% to EUR 117.4 million and adjusted net income up 30% to EUR 16.2 million, driven by strong digital and programmatic Out-of-Home growth.

• Out-of-Home Media outperformed the broader advertising market, maintaining high customer retention and low churn, while AsamBeauty's revenue declined due to a strong prior-year quarter.

• Digital Out-of-Home and Programmatic Digital Out-of-Home were key growth drivers, with respective growth rates of 27% and 36%.

• Net debt increased to EUR 864.2 million, with a leverage ratio of 2.18, mainly due to negative free cash flow, M&A expenses, and seasonal effects.

• Proprietary technology investments, including AI-based creative analyzers, continued to drive digital growth and innovation.

Financial highlights

• Adjusted EBITDA rose to EUR 117.4 million (+8% YoY), adjusted EBIT to EUR 40 million (+15% YoY), and adjusted net income to EUR 16.2 million (+30% YoY).

• CapEx in Q1 was EUR 17.9 million, 8% below the prior year.

• Free cash flow before M&A was EUR 21.4 million, while adjusted free cash flow was EUR -35 million, reflecting seasonality and higher lease repayments.

• ROCE improved to 21.3% from 19.1% a year earlier.

• Cash at period end was EUR 70.6 million, EUR 4.8 million lower than at year-end 2024.

Outlook and guidance

• Q2 revenue growth in core business expected up to mid-single digits, with June being decisive.

• Full-year 2025 guidance remains unchanged, with long-term double-digit CAGR expectations for core business.

• Second half of the year expected to accelerate significantly due to softer comps.

• Digital & Dialog Media revenues expected to remain stable; DaaS & E-Commerce to see single-digit growth.