Sto SE & Co. KGaA

Dear ladies and gentlemen, thank you for joining our Q3 2021 results call today. Together with my colleague Henning, our group CFO, we will present you a brief update on the developments of Q3 2021, our proceeds in converting the top locations of our portfolio from analog to digital, the financials of the quarter and what we expect for the remainder of the year. Following our presentation, the entire Executive Board with Udo and Christian will be available for Q&A to you. Before we go into the details of our performance in the first nine months of this year, it's worth mentioning that we have gone through extremely different quarters. Until the beginning of June, our country has been under hard lockdown restrictions and the decline of public traffic was a real challenge for our core out-of-home business. Accordingly, the first quarter, was earmarked by a rigid cost management while our plus businesses showed strong momentum in the lockdown phase. The second quarter, however, marked the tipping point with the beginning of a textbook type of V-shaped recovery of out-of-home media over the quarter. The end of Q2 was characterized by an economic recovery on a broad basis and driven by a continuously rising vaccination rate, a significant revitalization of public life. Against this background, our out-of-home strategy again proved its strength and flexibility when switched gears in real-time from crisis to growth mode, bringing back group performance in the third quarter to and above pre-COVID level, despite some minor after-effects of the pandemic, like a muted ramp-up of contact center agents and door-to-door salespeople and tough comms and dialogue media. The reported revenues in the first nine months of 2021 for the group stand at €1.1 billion, up 11% compared to the prior year period. Organic revenue was at a comparable level with 11.3% or 22 percentage points above the level of January to December 2020. The adjusted EBITDA increased by 10% to €319 million, basically following the overall revenue development. It's worthwhile mentioning that our adjustments came down from €20.5 million in 2020 to €5.6 million in 2021, so earnings quality is continuously improving. Our adjusted EBIT benefited from the accelerated performance in the last three months of the reporting period versus the prior year and a slightly lower DNA volume. Due to the low comparative value of the previous year, adjusted EBIT improved over proportionally by 49% from 84 to 125 million euro. Adjusted net income accelerated basically accordingly and was up by 54% from 54 to 83 million euro. Operating cash flow in the nine months was more or less flat with €222 million, despite a clearly better performance in Q1 to Q3 2021, which was compensated by a higher receivables level, triggered by the overall higher business volume in the current reporting period. CapEx spend in the first nine months of the year was at €62 million, or 16% below the spend of the same period 2020-2021. In the fourth quarter, we accelerate the ramp up of our digital footprint, especially for digital roadside screens and expect a full year capex spend at prior year level. Even if the pandemic isn't completely over yet, we see that COVID was a real stress test for our strategic setup, but ultimately only a bump in the road for the long-term targets within our out-of-home plus strategy for Germany. All key business drivers are still or again fully intact. We operate in a robust advertising market which will and is already quickly recovering post-COVID and has massive potential for us. There are still some after effects of the pandemic. The automotive industry doesn't advertise as they have not enough chips for the production. The event business has still not recovered and the energy sector has stopped new business and marketing due to the uncontrolled energy price developments. But the total ad market is really vital and the demand for out-of-home is strong again. The out-of-home market is consolidated and has high market entry barriers, and few players control real premium inventory. That is unchanged. Our market leader share is well above 60% in our core business, and you can do out-of-home only with Stoer, but you cannot do out-of-home without Stoer in Germany. Our strong programmatic and data capabilities from the digital media business, including our tech stack, help us to unlock the potential of programmatic digital out-of-home faster than any other competitor. Our scalable sales force is able to address the huge local SME market still dominated by declining print media. We constantly grow our share of wallet with large key accounts by embedding out-of-home with top-class digital and dialogue media. Our proprietary long-term secured portfolio has just started to convert step-by-step into a more digital infrastructure. and our unique DARS and e-commerce assets are on a strong growth track since meanwhile more than five years. On that basis, we have the confidence to clearly explain and communicate our midterm plans and just as a recap from our capital markets day four weeks ago, where we have shared more details, there are three key strategic areas that we see as the core value drivers for our company. First of all, the accelerated digitization of our out-of-home infrastructure, especially with more digital roadside inventory to strengthen our highly profitable public video proposition. COVID has definitely accelerated the shift towards digital out-of-home, and we just enter a completely new phase here. Secondly, the continued optimization of the synergy potential of out-of-home and digital and dialogue media, i.e. the areas of content, tech, data, and customer access. In combination with a fast-growing digital out-of-home business, this will drive the strong cash generation over the next years. And finally, there is the unlocked value crystallization potential of ASAM and Statista, which will support us optimizing total shareholder return in the next three to four years. Let me close the group update with a couple of really illustrative examples that show how we have worked on converting top analog out-of-home locations to digital in the first nine months of this year. Dusseldorf, Dresden, and Cologne are just three exemplary cities where we have focused on implementing a digital roadside network that reaches between 55% and 80% of the total local population, including the existing inventory. but we are also combining the high traffic locations with large format highlights and screens in city centers and pedestrian areas. The so-called Stachus in Munich is a good example. More than 300,000 people pass by this underground station every day, and we have implemented an outstanding screen at the strategically best spot. Bonn and Essen are two exemplary cities where two square meter screens are an integrated element of the shopping areas in the heart of the town since Besides the rollout of necessary standard formats, the beauty of out-of-home advertising is that we can offer really outstanding platforms for brand communication that are highly individualized and integrated in the physical context. The 500 square meter media facade in Hamburg is a really good example and new in our portfolio since this year and widely used by top brands. The so-called media stage in Hamburg In Hamburg's most exciting street in St. Pauli is another good showcase. The 138-square-meter full-motion screen delivers a completely new brand experience platform addressing especially young urban target group profiles. In contrast, the smart setting of many smaller screens in Sylt-Nibul, when you enter the famous German holiday island via a car train, focuses on a completely different target group profile, and another way of leveraging the potential of a location via digital out-of-home. So the various examples hopefully illustrate we massively invest in digitizing our infrastructure, the sum of the screens form a completely new level of digital out-of-home product, advertisers benefit from the flexibility and scale of our network, municipalities and landlords can generate incremental incomes, and the midterm unit economics are very favorable for us. With that impression of what you can expect in the nearer future, let me hand over to Henning, who will guide you through the financial details and the results of the third quarter 2021.

Thank you, Christian, and hello to everyone. When looking into the single third quarter, we see a very strong operational development compared against both last year's Q3, but also in comparison to the pre-COVID Q3 of 2019. Group revenues were up by 17% on absolute terms from 355 to 414 million euros. Organic roles developed accordingly and fully in line with our expectations shared with you in our Q2 conference call. This is also true for the adjusted EBITDA, which came in well above the levels of Q3 2020 and Q3 2019. EBITDA adjusted increased from 119 to €139 million. The adjusted EBITDA margin was 33.5% and thus on the same level as in Q3 2020. Exceptionals have been more than half from €5.2 million in 2020 to €2.5 million in Q3 2021. This improving earnings quality is fully in line with the guidance we have given However, as said before, this does not imply that there will be no adjustment effects in the future quarters, but the magnitude should be much lower than what we have seen in the last couple of years. Depreciation amortization, including mainly the depreciation on IRP16 assets, was minus 75 million euro, 8 million euro below the level of Q3 2020. The main driver behind that development are lower amortizations from PPA assets. Some assets, which have been recognized in the process of historical purchase price allocations, are fully written down in the meantime. Based on the strong EBITDA development and declining DNA, EBIT more than doubled to €61 million. With €-7 million, the financial result was more or less flat compared to Q3 2020. The tax result came in with approximately €-30 million compared to €-3 million in Q3 2020. following the improvement of the tax base. Summing all this up, reported net income for the quarter increased to €40 million. Driven by our healthy operational development, net income adjusted improved to €56 million compared to €36 million in Q3 2020. Thereby, adjustments remain on prior year level, including some non-PPA-related impairment of assets. Moving over to cash flow, we see an operating cash flow which went up from 79 to 100 million euros, a development which underlines our strong cash conversion capabilities. Cash outflows from the change in working capital came in below the prior year period and reflected our strong business dynamics over the quarter, leading to a build-up in receivables. Cash out from non-M&A investments came in virtually flat at 25 million euros. Free cash flow before M&A was €77 million after €56 million in previous year's third quarter, and free cash flow, including leasing payments, went up to €37 million from €40 million in Q3 2020. With this development, financial net debt came in at €706 million, mainly due to our dividend payment of €2 per share during the reporting period. our leverage ratio moved up to 2.5 times in line with our expectations. Based on our expected development for the traditionally very cash-generated fourth quarter, we expect the leverage ratio to improve again. Let us now have a closer look at the operating business segments and where we stand. As expected, the third quarter 2021 performance of the out-of-home media segment was on pre-COVID level and significantly above the revenues of the prior year period. In numbers, revenue increased by 25% from €156 to €194 million. This positive development was also reflected in adjusted EBITDA, which increased even stronger by 33%, from €72 to €95 million due to better leverage on our fixed cost structures. Accordingly, the margin went up from 46% to 49%, and with that again back on pre-COVID profitability levels. Our digital and dialogue media segment delivered a sound performance, also considering stronger prior year costs. Revenues increased by around 4%, from €164 million in Q3 2020 to €170 million in the reporting period 2021. Our online advertising and content publishing showed continuing growth, as well as a stable margin development. Against the strong development seen in Q3 2020, our dialogue business performed robustly, however facing a slightly increased employee churn following a tightening post-corona labor market here in Germany, as well as worsening market conditions for some of our utility customers following strongly increasing energy prices. All in all, adjusted EBITDA of the segment in Q3 2021 was with €43 million pretty much in line with the reporting period in 2020, and the adjusted EBITDA margin was at 25%. Our data as a service and e-commerce segment added another quarter of strong growth and achieved the highest sequential Q3 sales in the reporting periods and accelerated revenue growth to 43%. In total, segment revenues increased from 44 to 63 million euros. With organic sales growth of 39%, Statista continued its success story. With revenues up 45%, ASAM was the main growth contributor to the strong sales performance of the segment. Due to increasing investments and accelerated growth and the expansion of our international business, especially at ASAM, adjusted EBITDA margin declined to 12%, and adjusted EBITDA was €8 million in Q3 2021, and with that on the same level as in the prior year reporting period. Let me now hand you over back to Christian for some closing remarks on our Q4 outlook and a confirmation of our four-year guidance and our 2022 financial calendar.

Our expectations for the full year 2021 are unchanged. With regards to our targets, we remain confident to achieve group sales of around 1.6 billion euro and an EBITDA in the range of 490 to 510 million euro, assuming that the now again rising COVID numbers will not lead to any serious implication of public mobility towards the end of the year. For the fourth quarter, we see an out-of-home order put, which is currently developing quite in line with the 2019 levels, although characterized by a different mix. From a product perspective, more digital, which is supportive for our margins. And from a customer perspective, less supported by industries, which are currently exposed to supply chain shortages. This, however, we are able to balance out given our well-diversified customer portfolio. Let me close the presentations by looking at our financial calendar for the coming months. The next presentation, the publication of our preliminary numbers, unaudited numbers for the full year 2021, will be due in the first half of March 2022. The effective date will be announced beginning of 2022. The release of our annual report 2021 is scheduled for March 30. Further dates can be found in our financial calendar on our newly designed website. Thank you, everyone, and we are now happy to take your questions.