Ad group Stroer's sales drop to €493 million |
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The advertising crisis did not hit hard on The Stroer Group, as the 2008 business year results unfolded with a slight three per cent decline in sales.
Germany's market leader for outdoor advertising and third top player in Europe said it was successfully holding its own against the advertising crisis.
Its sales dropped to €493 million (Dh2.5 billion) compared to the previous year. The fall is a combined result of decline in operational ebitda from €118m to €103m, effects of valuations and currency developments.
In autumn 2008, Stroer had already reacted to the advertising crisis with a group-wide cost cutting programme that effectively raised the operational ebitda by four per cent over the first four months of 2009. By the end of April, Stroer sales had declined slightly, by five per cent.
On an optimistic note, The Stroer Group expected 2009 to see stability, although slightly below the previous year's level, leading to an overall improvement in results.
The 2008 business year was characterised by the international economic crisis that made national advertising clients act with reluctance over the second half of the year. Stroer's sales declined by 3.5 per cent with regard to posters, as the biggest product group.
The European giant's poster business also dropped by 29.4 per cent.
For the transport product group, on the other hand, Ströer was able to increase sales by 8.2 per cent. The main factors in this development are the good booking situation of mostly regional advertising spaces on transport media in the domestic market, such as buses and trains, and digital out-of-home advertising in Germany and Poland.
The Ströer Group was able to achieve a significant increase in sales in Poland equivalent to 12 per cent in local currency, in addition to 22 per cent increase in Turkey (in Turkish currency) while the sales of Stroer Media Germany declined by 4.2 per cent. Despite opposite currency effects, the international business activities climbed to a share of nearly 20 per cent of overall group sales compared to 16 per cent in the previous year. In this context, StröerPoland achieved the strongest positive development of all, increasing the operational ebitda by 21.7 per cent.
Ströer increased the group's investments in 2008 by 46 per cent, to €62.2m - about half of the investments in Germany were spent on new city advertising spaces and street furniture.
"In 2008, we fought hard and successfully to stand up to the advertising crisis. In 2009, we will continue on this path, clearly focusing on our core markets," explains Udo Müller, CEO of Ströer.
"In addition to our cost cutting programme, which will have a positive effect in 2009, we have launched sales campaigns in Germany, Poland and Turkey. Since these markets were consolidated only recently, they still have potential even in the crisis. We want to seize the opportunity to increase the market share of outdoor advertising with regard to overall advertising budgets," said Müller.
"Besides Hamburg, the biggest investments were made in Turkish cities Istanbul and Ankara."
Ströer also advanced the Group's ongoing media digitalisation with the introduction of infoscreens on Warsaw's metro trains and with the installation of "Outdoor TV" in Turkey.
The newly developed programme is the first to create a network of screens on busy thoroughfares and in underground stations, which allows for the synchronisation of advertising messages above and under ground. Ströer also plans to promote the further development of moving images in out-of-home advertising with the introduction of "Outdoor TV".
By Staff Writer
© Emirates Business 24/7 2009
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