HEnri Ford once said, “Fifty percent of ads are always thrown away. But you don’t know which half it is.” From the perspective of a successful car pioneer, this might have been the case at the time. In today’s (consumer) world, advertising has become indispensable.And also have Corona The advertising industry has shown its limitations. In Germany, Ströer is one of the major players in the advertising industry. According to its own information, it markets and operates approximately 300,000 advertising offers.
In the past few years, M-Dax has been busy transitioning to digital advertising content. The corona crisis has not made life easier for the Cologne-based company. Because the advertising spaces provided by Ströer are usually placed in the railway stations, streets, shopping centers, subways and S-Bahn platforms in major cities in Germany. However, after the coronavirus pandemic, many people are forced to work from home more frequently. Accordingly, advertisers require less advertising space. Digitalization, which has become faster due to corona, has also shaken the entire advertising industry.
Corona is shaking up the advertising industry
Unlike linear TV, people who are particularly interested in the advertising industry appear more and more frequently on video portals and streaming services such as YouTube. Netflix Or social media offers from Facebook or Instagram. During the corona-related blockade, the target group appeared more frequently on the Internet than before, which did not completely simplify Ströer’s life. Ströer was able to recover from the corona dent and put the crisis behind. When the latest half-year results were announced in mid-August, the company announced that its business would return to the level before the new crown epidemic.
In addition, Ströer is increasingly solving digital problems. The mid-term plan for 2026 was proposed in early October. The “Outdoor +” strategy continues to focus on the “Outdoor” core business. There are various analog and digital outdoor media (OOH) for customers. There are also digital and conversational media and DaaS (desktop as a service) and e-commerce (Asambeauty) fields. The company’s t-online portal, which was acquired in 2015 and hopes to develop into Germany’s No. 1 media brand, aims to help.
Reliable numbers and strong prospects
For the core areas of outdoor and digital and conversational media, management expects average annual sales to increase by 8.5% to 200 to 2.1 billion euros by 2026. The adjusted earnings before interest, tax, depreciation and amortization over the same period are expected to increase by an average of 9% to 12.5%, reaching approximately 75 to 850 million euros.
In the first nine months of the 2021 fiscal year, sales of the entire group increased by 11% to 1.1 billion euros. Organically, sales also increased by 11%. EBITDA (adjusted) increased by 10% to 319 million euros. Management assumes that the full-year sales in 2021 will be approximately 1.6 billion euros, and the adjusted EBITDA will be 490 to 510 million euros.
Anchoring shareholders to provide stability
In addition, the owner families Müller and Ströer ensure the stability of future ownership. For this reason, Udo Müller and Dirk Ströer, the main shareholders, co-CEOs and founders of Ströer SE & Co. KGaA, introduced most of their 42% limited partnership shares in Ströer SE & Co. KGaA into the German foundation structure .
The company’s plans and forecasts are well received by analysts. The major Swiss bank UBS has raised Ströer’s target price from 84 euros to 92 euros. At the same time, Barclays has a target price of 88 euros, and German bank Hauck & Aufhäuser even thinks Ströer’s share price is 95 euros.
Exciting charting technology
Judging from the course of the course, such a course goal seems unrealistic. Ströer’s stock price plummeted by more than 50% in the first quarter of 2020. After falling to a low of 37 euros in March, a new price rebound began, during which it rose to a record high of 82.50 set in December last year. .
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After being revised to 65 euros in May this year, the price sometimes rose back to 72 euros. If the recent recovery continues, the December 2020 all-time high may be a target—and a strong buying signal. Anyone who is already a Ströer shareholder knows the strength of the company and its stock price. From a ten-year perspective, prices have risen by an average of 22% per year. However, the high return on the stock price is mainly the result of price increases from 2013 to 2015, as Ströer’s stock price sometimes fell sharply repeatedly over the next few years.
This is why this small-cap stock is more suitable for risky investors, who have strong staying power and can simply avoid intermittent corrections. On the other hand, Ströer is by no means unattractive to bonus fans. M-Dax has been a reliable dividend payer in recent years, and its current dividend yield is 2.8%, which is relatively high.
