Sto SE & Co. KGaA

Conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Schmalzer. Please go ahead, sir.

Dear ladies and gentlemen, panelists, let me welcome you to our call on our Q1 2024 results. I will start into our presentation with a brief overview of the key figures for the first three months, followed by comments on strategic topics we want to highlight and what trends and developments we see at the moment. Henning will then comment on the developments and effects of our Q1 figures in more detail. This will be followed by comments on what we expect for the second quarter and the rest of the year. As always, we are looking forward to your questions after our presentation. With that, let us start the call with a short overview of Q1 2024. In our comments on our prelims, we had already indicated that the strong developments at the end of last year should continue in the first quarter, particularly in the out of home segment. We were able to increase sales from 410 million to 453 million euro, an increase of 11%. Organic growth for the same period was 9%. At the same time, adjusted EBITDA increased slightly better than sales at 12%. In addition to easing cost pressure and declining inflation, this was due to the substantial positive development of our core out-of-home segment. As already commented in our outlook, we expect an almost stable IFRS 16 effect and almost stable depreciation and amortization for the financial year. As consequence, adjusted EBIT will increase significantly stronger compared with adjusted EBITDA. Corresponding effect can be clearly seen in the past quarter and adjusted EBIT growth of 33% to around 35 million euros speaks for itself. We had a strong focus on cost management in the last 18 months, and as inflation softens, we see the fruits of our efforts in clearly improving operational leverage. Net income adjusted increased by 41% year-on-year from €9 million to €12 million. Free cash flow for the quarter declined to €-24 million compared to €-15 million in the prior year period, mainly influenced by working capital phasing. At around 90 million Euro, CapEx for the quarter was 38% below the previous year's figure of 31 million Euro and reflects the back to normal and our objective of further optimizing and improving the fill rate of our digital portfolio. Full year, we plan with broadly stable investments, so the lower number in Q1 is rather a phasing effect, just like the working capital system. While 2023 was a rather weak year for the advertising market to start into 2024, of course, again, software comms was quite positive. Global platforms like Google, YouTube and Meta have substantial growth again, and also Nielsen Numbers saw double-digit growth for the German ad market. It's important to mention that Nielsen reports on a gross basis and therefore these numbers are inflated by some six to seven percentage points versus net figures. So realistically, the German net ad spend is up by five to six percent and out of home in total on a net base around 14 to 15 percent. Either way, on a like for like basis, out of home advertising continued to win market share. Our own sure developments in net revenues, plus 11% for our group, plus 16 for our core out-of-home segment. Organic growth was at 17.4% and therefore even two and a half points better than our best estimate nine weeks ago. With plus 30% for digital out-of-home, we were able to continue the strong momentum of Q4 last year. The developments are definitely outstanding against the German ad market and even global digital platforms from the US don't show the dynamics of digital out of home at the moment. Similar to 2023, apart from TikTok and Amazon retail, digital out of home is the most dynamic in the ad market. We have been talking about structural change for many quarters. In the last decade, the ad market has gone through massive changes, but the CAGR of the out-of-home business has constantly and substantially outperformed all other local media. The pandemic, with the various lockdowns, had special challenges for our medium, but the developments since the end of COVID show an even accelerated outperformance of out-of-home. OOH advertising has developed from a niche topic with 3% to one of the key media in the German advertising market. Overall, the share almost tripled in the last 10 years to a new record in Q1 2024 of 9.2% and the current momentum should take us to and beyond 10% in the coming 12 to 18 months. And the 10% won't be the limit looking at the various market projections from EGPWC, the industry body or others. The underlying growth drivers indicates a stable further momentum at least for the next 10 years. On the one hand, it's the ongoing digitization of our inventory that constantly improves the flexible advertising opportunities for brands. On the other hand, it's the ongoing integration of digital out of home into the digital marketing world via programmatic advertising. Instead of pitching the out-of-home medium as a separate channel, it becomes more and more seamlessly integrated in the flow of digital advertising money. So the growth of out-of-home is digital, and the digital growth is programmatic. That said, we still see good opportunities for classic out-of-home, and our Q1 results with double-digit growth for the classic sub-segment is a proof for that. On a local level and for local advertisers, the location of an advertising site is crucial. Of course, digital out of home might be more attractive, but ultimately, MEs advertise where their business is. As national advertisers shift more and more to public video, we use the last 12 months to focus our local sales force even more on classic products. So across all of our sales channels, we still see low to mid-single digit growth potential for classic out-of-home midterm, and the digital growth will not happen at our own expense. We will win market jack from other media. But we have to actively manage that process and our long-term investments in local sales infrastructure pay off now, i.e. for the classic part of the business. Let's have a closer look at some of our internal KPIs for our public video business to illustrate a bit more why we are so positive about the underlying trends of digital out-of-home. The number of active advertisers increased by 14% compared to Q1 2023. We are seeing a constant net customer growth over the last two years, correspondingly stronger market penetration, and thus an increasing market share for the out-of-home category. Net revenue retention in Q1 was a remarkable 111%, while we have increased prices at the same time by around 7%. Low churn and increasing budgets driven by demand and higher prices are ultimately the proof for the high relevance of digital out of home and a strong ROI for advertisers. Our share of programmatic digital out of home revenue from the national advertiser segment was 57% and eight percentage points higher than in Q1 last year. It shows that digital out of home is rather an element of the digital media universe than the digital version of out of home. Advertisers benefit from the integration with other digital channels via the same trading desks and data management platforms, work with the same targeting features and optimize transactional costs via machine-to-machine buying. national customers below our top 20 by size so beyond the large corporate key accounts are characterized by average ticket sizes of around 77 000 euros historically out of home only made sense for nationwide advertisers when they invested at least 1.5 million euro for a proper flight to have the necessary presence in the biggest cities Today, digital out of home is one module in the predominantly digital media plan and advertisers look at the combined coverage of all digital media. So the entry barrier has decreased massively. Advertisers start by adding smaller public video tickets to their media mix and then grow it based on the positive ROI impact. Our plus businesses play different roles in supporting our core out of home segment. A combination of our online business and digital out of home is a building block in the strong development of our digital sales. Let's also have a look at some trends from Q1 to illustrate that. We were able to expand the reach of our private marketplace on our SSE by over 40%, leveraging new partners like Sport One, as well as CTV publishers such as Warner Brothers, Discovery and others. This is a crucial driver for online video growth, which brings more new customers to our SSP that ultimately then also buy digital out-of-home. Combining online and digital out-of-home on our SSP is simply doubling our lever on programmatic demand. In a year with various sports events and highlights, sports publishing is another important revenue driver. We were able to sign Sport One, which covers the entire sports world 24-7 a couple of months ago. Other complementary formats such as Transfermarkt and Touralarm have a strong reach with a total of 5 million unique users. With this attractive sports portfolio, we have successfully established ourselves in the German online sports segment and are the market leader with over 27 million unique users ahead of Springer Media Impact or Kicker Quarter Media. We combine and bundle this portfolio with our public video network and offer more than 30 high-impact multi-screen formats on desktop, mobile, and public screens, covering over 80% of the sports-enthusiastic audience. We will talk at the end of the presentation about our expectations for Q1. There's a series of top sporting events in 2024 and historically they had a best case neutral impact on our core business. The Football World Cup in 2006 in Germany, for instance, was rather slightly negative for out of home. Some sponsors invested heavily, but most of the advertisers reduced their spend massively during the event to avoid the clutter. Since out-of-home is meanwhile in a different position and the combination of our online sports asset have also positive spin-off effects on especially digital out-of-home, there is a fair chance for a little bit of extra momentum in June and July, but it's a bit too early to have full transparency on the order book for the end of Q2. Let me quickly put all of the current developments around out of home in a little bit of broader context, because what we observe since the end of the pandemic is a rather fundamental change for our core business. until the 1990s the media landscape was dominated by print media our industry was dominated by billboards advertisers selected a range of individual sites and on average 400 000 euro for a campaign then tv became the lead medium in the market the out of home media focused on backlight products like strollers and street furniture and advertisers had to book predefined networks which forced them to spend at least 1.5 million Euro for out-of-home. Today, the leading medium in the market is digital, so anything that is digital across all channels gets in total two-thirds of the advertising cake globally. Digital out-of-home is clearly the leading product in our industry and advertises by programmatically their relevant audiences of public video in any possible budget size. Almost all historical entry barriers to use out-of-home advertisers have fallen. We are seamlessly integrated in the workflow of all digital media and the historic underpenetration of out-of-home offer substantial catch-up effects over the coming years. So far on my remarks and with that, over to Henning.

Thank you, Christian, and good morning to everyone from my side. Altogether, we had a strong start into the new fiscal year, exceeding our own forecasts and expectations for sales, earnings, and cash flow. Reported sales growth in the first quarter came in at 11%. Their organic growth accelerated to 8.9%. The delta results mainly from the net effect of changes in the portfolio in fiscal year 23. The acquisition of some call center locations in Q2 last year, as well as the disposal of a non-core service activity in our out-of-home sector. Overall, an accelerating growth trend in out-of-home, more than compensated for a top-line moderation at Azam and Statista. The group achieved profitable growth with EBITDA adjusted improving by some 11 million or 12%. Exceptional items in the quarter were roughly 5 million euro. The increase compared to the prior year mainly resulted from reorganization costs in our content business and to a lesser extent in Statista. For the full year, we are currently expecting lower exceptionals than in the prior year. Reported EBITDA came in at 104 million Euro, up 10% compared to the prior year quarter. After a temporary increase in Q4, including some extraordinary write downs, now depreciation amortization for the quarter was basically flat. With that, reported EBIT for the quarter improved significantly from 18 to 27 million Euro. The financial result came in at around minus 18 million Euro compared to minus 14 million Euro in Q1, 23. The development mainly reflects higher interest rates. The oil report at the beginning of last year was still below 2% and kept rising to more than 3.8% until September 23. Based on that, we shall still see rising interest costs in the coming month, but with reduced dynamics and eventually an improvement towards the end of the year, depending on ECB rate action. Sequentially, compared to Q4 last year, the Q1 financial result was broadly stable. With that, EBT came in 9 million euro compared to 5 million euro in the previous year's quarter. Adjustments to be considered in the quarter were 6 million euro and related mainly to the exceptionals mentioned before, and PPA-related amortizations of around 3 million euro. To remind us, the corresponding assets were recognized by way of purchase price allocation in the context of the major acquisitions of the past. The corresponding annual amortization level is declining since more and more assets are fully written down in the meantime. After 23 million euro in 22 and 19 million in 23, in the current fiscal year, we talk about 12 million euro. Considering the effects described above, net income adjusted came in at around 20 euro, so approximately 4 million euro higher than in the prior year. Let us now switch over to the cash flow. The improvement in EBITDA and lower cash out per taxes was contrasted by higher cash out for interest and working capital, as well as a decline in other. The capital development reflects seasonality patterns, in particular also after quite strong development towards the end of last year. For the full year, we expect a moderate buildup in working capital. The increase in the position other reflects a slightly higher utilization of provisions compared to Q1 last year and higher equity income included in the EBITDA that has not yet become cash effective and as such is corrected via the position other. All in all, that leads to an operating cash flow of 44 million euro, including lower investments, free cash flow was slightly up year on year. Leased liability repayments last year benefited from phasing effects. The free cash flow adjusted, so after leased liability repayments, amounted to minus 24 million euros for the quarter and exceeded our own internal forecast. As already discussed in early March, we expect significantly improved free cash flow generation for 2024. In the sequential view, from the end of Q4 to the end of Q1, net debt was up by 13 million euros. including the adjusted free cash flow for the quarter of minus 24 million euro and a cash in from the equity contribution of exercise stock options of plus 4 million euro. The remainder of 7 million in the net debt reconciliation resulted from the reduction of previous customer overpayments. As a reminder, these overpayments do not impact net debt since the corresponding cash out is offset by the reduction of the financial liability to the With that, our leverage ratio remains stable, credit Q4 last year, and slightly better than in prior years Q1. Including the expected dividend payment in Q2, our leverage ratio will increase before we expect an improvement again for the second half. Let me now discuss the performance of the individual operating segments, starting with our core segment, out-of-home media. As expected, out-of-home media got off to a strong start into the new fiscal year. Organic growth came in stronger than the 14% in Q4 and also stronger than the 15% we expected as part of our guidance for the quarter. Organic growth for Q1 was 17% and included a strong finish in the last weeks of the quarter. Against the background of improving market conditions, growth was fueled by both our classical product as well as digital. Our regional and local business continued to deliver solid growth, but our business and national accounts reflected a very promising trajectory based on our strongly improved reach, targeting options, as well as easy programmatic accessibility. Sales in classic out-of-home were up by 13%. Sales in digital out-of-home improved by 30%. and the service category compared to the prior year were characterized by the disposal of a non-core activity. EBITDA adjusted for the quarter increased from 59 to 73 million euro, supported by moderating cost inflation and the better utilization also of our classic infrastructure. The EBITDA margin improved by 270 basis points. As we have said in March, for the full year 24, we expect sales in EBITDA to show a more synchronized development than in 23. And for the time being, we would stick to that while the chances and risk profile is clearly improving. In digital and dialogue, revenue in the first quarter increased by 13%. Within digital, sales growth was driven by programmatic demand, while our content business remained broadly stable in a normalizing market context. Growth in our dialogue activities was 13% and still benefited from the acquisition of some call center locations last year. Organic sales growth was around 3% after a decline in Q4. Altogether, the segment delivered an EBITDA adjusted of €31 million after €33 million last year, including a technical effect of around €-3 million from the loss of the Bauer contract that I mentioned in the last call. The effect on EBITDA adjusted for the full fiscal year will be around €-10 million. There is and will be no effect on sales, EBIT and net cash flow due to the compensation of business volume through newly acquired business mandates such as SPORT 1, for instance. Excluding that technical impact, the segment EBITDA adjusted showed a slight improvement compared to the prior year Q1. Moving over to our data as a service and e-commerce segment with Statista and ASAM. In total, revenue rose with 5% in the first quarter. While sales in ASAM's core retail and online activities continued to deliver double-digit growth rates, sales in the wholesale distribution channel were impaired by volatility and demand. Wholesale distribution last year delivered a very strong performance throughout the year, essentially from wholesalers catering for Chinese and consumer demand. And here in particular for products outside the classical beauty and care assortment of Assam. Our visibility on that channel is by nature lower than the core business and core markets. Sales at Statista, as expected, developed at more or less the same growth rate like in Q4 last year. Underlying dynamics, however, are recovering, and new customer growth for subscription revenue grew by 20% in Q1 24. Last year, we have made some key changes to prepare Statista for the next growth level, including the transition from the co-founder team to our new CEO, Mark Berg, new pricing and sales organization, and the first better version of AI-backed search on the platform. So the operational low point was already autumn last year. But in a subscription-driven business, you see the revenue impact six to eight months later. Based on that, we are expecting accelerating sales growth in the coming quarters of this year. EBITDA adjusted was stable compared to Q1 last year and amounted to 12 million euro. With that, let me hand you back over to Christian for the outlook and closing remarks.

For the second quarter, 2024, the group expects organic revenue and earning development, one to two points above Q1. Organic out-of-home momentum for Q2 is broadly in line with Q1, 15% to 17%, with a potential smaller acceleration on top, depending on package sales for UEFA Euro 2024. Vigilant dialogue with similar double digit momentum in Q2 as in Q1 and Dallas and e-commerce with an accelerating growth rate versus Q1. Full-year guidance remains unchanged for the moment. Organic revenue growth noticeably higher than 2023, which was plus 7.5% last year, and substantial operational leverage based on an EBITDA margin around prior year level and IFRS effects roughly stable, but EBIT adjusted with double the growth rate of EBITDA adjusted and free cash flow adjusting significantly above the growth rate of the EBIT adjusted. We'll give an update on our full year guidance with the Q2 numbers in early August and we plan for a capital markets day with a focus on our out-of-home midterm projections for Q4. Let's now close the presentation with a short look into our financial calendar for 2024. Next agenda topic will be our annual general meeting. which will be held on June 11. On August 8, we will release the half-year report 2024. The year 2024 will then be concluded with the publication of our Q3 report on November 13. As always, updates, reports and roadshow presentations can be found on our IR website. So thank you everyone and we are now happy to take your questions.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. First question from Christopher Johan, equity analyst. Please go ahead.

Yes, good morning, everyone. Thanks for the opportunity to ask questions. My first one is on ASAM. The deceleration in growth seen here, I mean, is there – I mean, I'm basically trying to get a bit more color on how you see the acceleration in the coming quarters. The guidance is, I guess, somewhat vague, but, yeah, I think the focus here is, what the deceleration in growth, particularly at Azam, you know, does to the sales process, you know, whether there is any sort of color you can give on that. And my second question would be on the order book. I think last quarter you suggested that roughly, if I'm not mistaken, 30% of H2 was in the books. I'm curious if you could give an update on that, because obviously the question is, you know, with the strong growth also continuing in out-of-home in the And in the second quarter, we know whether you feel comfortable with double-digit growth for the full year. Thank you.

Hey, Chris. Thanks for your question. Maybe the first one on ASAM. I mean, as you said, in general, we are committed to sell the business as we see it as non-core. I think secondly we are constantly monitoring the market and see that in general M&A is slowly, but nevertheless M&A market is picking up a little bit, beauty sector seems also okay. So we're working on the preparation here. And we are extremely happy with the last, I would say, two, three years in our core markets, in the German-speaking markets, where I think, as Henning mentioned in the segment details, we are also in a challenging 2024. When you look at other players there, we are growing clearly double-digit in the core markets across all sales channels. What we've seen is some kind of volatility in the non-DAH businesses over the last two or three years. We had very strong quarters, we had a bit softer quarters. So, the last two or three quarters have been extremely strong for us and especially in China. At the moment, we're a little bit of a temporary victim of that success because one of our sales partner has some advertising challenges in one of the key sales platforms, but I think that's just the normal process when you expand your business out of your core markets. So I think in our plans, we feel comfortable with some kind of volatility. And I agree with you, it's always better and easier if everything is perfect on the road to a potential exit. But I think there's nothing that really concerns us on the long run, because the ultimate value of Assam is It's the products, the brand and its historic heritage in the doch markets. I think the potential outside of Germany and German speaking markets is like the upside potential over the coming years. And that's especially one of the reasons why we are also willing to sell the business over time because that's not our core competence, but nothing that really concerns us at the moment. But we look at it over time and over the coming months. Regarding the order book, as you said, I think last time was nine or ten weeks ago. And we had about a third of our two revenues in our books. So at the beginning of May, we have the full April, which just shows unchanged momentum from April. Q1 May is done by 80% or so, looks similar. The prebookings for June look even a bit stronger, but there the final results will depend on what the final package says for the European Cup might bring. And the rest of the year looks unchanged positive, double digit. And yes, we are eight, nine weeks further down the order book road. So nothing has changed on comparable momentum also in the second half based on the pre-bookings. Nevertheless, now there is, I don't know, 55 to 60% to come. So a bit too early to... be 100 sure what the precise performance in the second half should look like overall yeah that we continue with strong growth that the growth is has more momentum that last year and that we are out forming the advertising market I wouldn't know why any of those aspects should change throughout the year. So, yes, that's why we have unchanged very positive, also about the second half, but felt like it's a bit early to update anyone on the full year guidance. That's probably easier when we have a clearer picture on the precise Q3, because that is probably then also a clear indication for Q4 and the rest of the year.

Perfect. That's very clear. Thank you very much.

The next question from Craig about capital schedule. Please go ahead.

Yes, hi. Good morning. I have a question for now. Statista, please. I reformulated my originally formulated question based on your comments in the call. We're encouraging that you expect to see revenue growth there begin to reaccelerate in the next month as new subscriptions, one, should drive that. I just wondered if we could get a little more color on the dimensions of that acceleration rate. And also you mentioned just very briefly in your comment that you've seen some supportive effects in the use of AI tools. If you can maybe update us on what your current thoughts are there, both in terms of opportunity, but also in terms of threat, that would be very helpful. Thank you.

Okay. Hi, Craig. Well, I think as Statista is selling subscription services contracts that go beyond one year and the sales are always different to the reported revenue. And I think what we see at the moment that month over month sales are increasing and the second quarter will already show an impact by means of reported revenues. So we can probably double, triple what you see reported revenue in Q1. I think the more important point is that sales are again moving beyond what we can expect in the next two or three years. The dimension behind the sales is quite simple. First of all, I think last year was a year with management changes, the founders moved into new roles, we changed structurally a couple of things. And as always, if you deal with internal topics, you have a little bit less focus on your clients. That said, I think it's just necessary and also normal for a growing company to reorganize from time to time, just to be prepared for the next step. So I think that's behind us. And at the moment we have again full focus on developing the business with our clients. I think secondly, we've done some exercises on pricing. We've been historically always a bit cautious, especially on new clients. So I think we are a little bit brave on pricing and see the benefits that The product has a quality that new and existing clients are also willing to pay a little bit more money for the substance of the product. And I think the third dimension is that winning new customers is easier when the user experience is better. And I think we've launched a couple of weeks ago the first beta version of that AI-backed search on the platform for subscribers. that clearly delivers faster more precise results on what people are looking for and i think that's that's also something we are constantly improving but we see the results and i think all the three aspects changes are behind us pricing delivers on top momentum and user experience gets better, which makes the sales process in itself a little bit easier to convince new customers. I think that's something that is ongoing for the coming months and quarters. That's why we're quite confident about the positive development of Statista and that we've operationally seen probably the low point in reorganizing everything last year in autumn and the momentum is going in the right direction. We've done different analysis on AI and what we do on a monthly basis comparing What does our database deliver by means of output? What do you get from Google and what do you get from crawlable content in the web via generative AI? And meanwhile, we feel quite comfortable that the downside risks or threats of AI are very, very limited because ultimately it's meant to long-term the quality and the substance of the data and the content that you have. And then again, the question for people do you rely on those kind of facts and figures especially if you take crucial business decisions on the basis of the data and I think we clearly at the moment that it's the upside potential improving user experience by just helping our paying customers to find the right data on the platform faster than without generative AI.

Maybe to add on that, also what we expect is to criticize further improvement of earnings. So last year, I think the margin that we had was sometimes below 10%, and we will clearly see a step up of that margin or earnings trajectory this year, particularly in the second half.

Okay, thank you. All very, very useful. I just have one tiny quick follow-up right on that. So the customer retention rate, has that changed? Does it exist?

slightly, which was also a good learning for us because I think one of the biggest, why not fears, but I think we've just been cautious in being more aggressive on pricing because we always felt like, okay, we have long and loyal customers that were used to decent pricing models, given the kind of quality of content. So what we've seen is that more aggressive pricing has not changed any net revenue retention numbers. So that looks all solid. And we hope that we make one or two bigger steps throughout the year on the search function and the next AI-backed releases, because that's where we see at the moment the strongest potential going forward. We have thousands of statistics and data And people normally have a very concrete question, and it takes a while to search in that huge library for exactly the right pieces of content that, in combination, give the answer to the ultimate question that you have for your business challenge. And I think that's something where we just see, after a year, massive progress, and we feel like the next releases might – might make it even easier for customers so that they clearly see the difference between what was Statista platform search two years ago and what is it at the end of 2024.

Okay, very interesting. Okay, all very, very useful answers. Thank you. Thank you.

The next question from Julian Rock, Barclays. Please go ahead.

Yes, good morning, everybody. Thank you for taking the question. If I look at page seven, can we get the base in millions of euros for 23, so three numbers, out-of-home, digital out-of-home, non-programmatic, and digital out-of-home, programmatic? And can we get how much was programmatic out of your 299 of digital out-of-home revenue in 23, please? So four numbers. Second question on pre-cash flow, you mentioned that working capital is phasing. but you also had cash exceptional going up in Q1, cash interest going up, and this payment going up a lot. So can we get a full indication for these three numbers, cash exceptional, cash interest, and cash leases? And then last one, again, on free cash, capex down, can we get fuller guidance, but more strategically, your outdoor growth is largely coming from digital and programmatic, which is a function of existing screens, but also new screens. So How much of your digital growth last year came from new screens, and can you continue to grow at the same level with less capex and less digitalization? Thank you.

Okay, maybe, I mean, your first one, Julian, was on page seven, right, the market projection. I think Christian will recover that in a minute. Coming to the points on cash flow, and you asked for some indication on the individual lines for the first year. As I said in the speech, I would say we expect a moderate built-up in working capital. Interest expenses, I would still expect to be above the prior level, but we should not see the same step-up in absolute millions that we have seen in Q1, so it will be less than that going forward. Cash out for taxes, I think I've said that on the occasion of the full-year call, we expect to go down compared to the prior year. The line other is kind of difficult to forecast, but without knowing anything better, I would take the prior year as an indication. I think that was the main topics you read.

Sorry?

Cash leases, I would expect, I mean, first of all, what you see in the quarter is not an indication as a change for the full year. I would rather expect the cash leases to be slightly up, but by no means you will see sort of the relative increase that you've seen in the first quarter. And for CapEx, as we have said, we should expect more or less what we have seen last year, maybe a touch below the cash CapEx of 2023.

And on your question, Julian, so our internal numbers for 2023, as you said, we had roughly 300 digital out of home, of which 210 came from national advertisers, 90 from regional and local ones. And out of the 210, we had 150 between 100, 105, depending on how you deal with SSP commissions, they were programmatic. It's about half the national advertising spend. Sorry, I had to open the PowerPoint slides to get the data because it's external estimates for 2023. So the rough numbers that I see here is like 1.34 billion for the total market in 2023. roughly 384 digital in total, of which 205 were programmatic. But that's the external data that we've been referencing it to for the total market.

Okay, fantastic. Thank you very much.

I think it's worth to know that the strong increase in programmatic It's strategically for us the most important KPI because this is actually reflecting the turning point, what Tristan said before on the speech, that out-of-home now through digitalization is moving from an add-on media, you know, in earlier times, whatever, 20 years ago it was print and it was TV, but now it's digital. Digital means we have out-of-home becomes now from an add-on media to a core media. And this is actually reflected in the strong growth in programmatic. And this is maybe also the most important message in this year for outdoor, that what we were expecting for a long time is now actually happening. And this is a significant growth in part for the next five, six, seven, eight, nine, ten years, digital out-of-form is part of the core media strategy of all national advertisers. So the growth is coming from national advertisers and from photo analytics. For example, right now we are discussing with almost all the big FMCG customers. For the last 20, 30 years, we didn't get one single penny from FMCG customers. And now we have strategic talks, workshops, et cetera, with all the big clients, how to integrate now digital out-of-home in the digital media strategy. So this is clearly going to, this is a big turning point for us as an out-of-home industry around the world.

Okay. Okay. The last question is coming from if I see it right.

Next question from . Please go ahead.

Can you hear me? Hello?

Could you please speak up a little bit? We can't hear you very well.

Can you hear me down further?

Yeah. Okay. Perfect.

My first question is on Azam again. Can you give us the split of how much revenues you do in DACH versus international? My second one is on classic out of home. I mean the growth was very strong there and clear acceleration versus previous quarters actually. So was there an inventory change there or can you give us more detail on classic out of home? And then on UEFA, can you give us your internal bull and bear estimates of how much it could contribute in terms of incremental advertising revenues in the next two quarters? Thank you.

Well, on the question around classic out-of-homes inventory has not changed. It has minimally gone down because we constantly convert classic sites into digital ones. But that's, to be honest, that's not really... So as mentioned, I think in the presentation, we focused our local and regional sales force more on the classic products, because we just see over proportional demand from national advertisers on digital out of home. So that is one, I think, underlying aspect. I would say the second point is that The momentum in the total advertising market has changed. And I think last year we had flat-ish classic out-of-home spendings, although we had lost tobacco advertising, which was like one and a half to two points. So like for like, it was growing maybe 1% or 2%. In a market that was down 5%, 6%, 7% on a net basis. So at the moment, the advertising market is up 5%, 6%. and classic just is moving in line yeah better than than yet market uh and therefore in relative terms better than than prior year and we also had no no final tobacco band stage so i would say it's a bit be above our expectations. And it's also driven by three or four larger advertisers that had a focus on classic again. But in general, I think that's what we mentioned in the presentation. I think classic has a potential of up to mid single digit growth midterm over the next three, four, five years, because we see that the biggest part of that growth is something we can control ourselves via our local and regional sales force. And we see that national advertisers that focus on very specific locations, no matter if they're digital or analog, they still have that kind of demand if they, for instance, support their dealer structures and so on. That's why I would say the momentum, the strong momentum in Q1 is maybe a little bit And it's driven by a nice solid advertising market in combination with more focus on that product from our regional and local sales guys.

Well, Assam, where Christian talked about the good run we had last year in the wholesale distribution business that is actually finally going to Chinese end consumers via headquarters, that amounted to, I would say, the whole auto distribution channel of something like 15% to 20% of the 200 million or so we had last year in sales.

And sorry, your last question. I didn't get that acoustically. It was in a bullet there, and then I lost it.

Yeah, on the UEFA Cup, how much extra advertising would you expect in the worst case or in the best case for the football UEFA?

Depends on the progress of the German team, I think.

So you must have exactly the bullseye now where the Germans win and the other ones.

So, I mean, we said like, we see similar momentum for the second quarter than the first one, so the range of 15 to 17. So assuming that June gets like 10 percentage points extra and June representing, I don't know, a third of that quarter, it could take our growth rate up to 20% or so. So it's the upside for the quarter might be 3, 4% because we talk about June. We'll then see if there's a little bit of spillover and that's what Henning said. If, as we all expect, the German team might win, people will be very enthusiastic. Advertisers will want to jump on the train short term. Digital out of home is one of the few media where you have mass audiences short term available. We might also see something similar in July, like two or three percentage points for the quarter, but It depends on the quality of our team. But that's roughly the range. So we don't talk about here's 20% on top in a quarter. It's one month and maybe up to 10% on top. As I said before, historically, everyone was crazy about sports events, even especially in Germany. And then ultimately, everyone was disappointed because the number was rather lower than prior year number. But we don't see any downside risk. We only see some kind of upside potential.

Right. Thank you. So we have the German Swindon.

Thank you. Thank you.

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Good. So thank you very much for your time, for your questions, and have a great spring, good weather, and hope to see you soon, at least at our off-yearly presentation. Take care. Thank you.

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