Ströer SE KGaA's (ETR:SAX) Strong Earnings: A Closer Look at Quality

Ströer SE KGaA (ETR:SAX), a leading German media house, has been reporting strong earnings in recent quarters, driven by its "OOH+" strategy and expansion into digital and e-commerce segments. As of Q2 2024, the company reported a 22% increase in adjusted EBIT and an 8% increase in consolidated revenue, with the out-of-home (OOH) advertising segment growing around 9% (RTTNews). But how sustainable is this growth, and what factors contribute to the quality of Ströer's earnings?

Ströer's "OOH+" strategy, focusing on the strength of the OOH business, is supported by the 'Digital & Dialog Media' and 'DaaS & E-Commerce' segments. This combination has allowed the company to consistently grow its customer relevance and gain an above-average share in market growth. The strong market share and long-term agreements on the German market further solidify Ströer's position, ensuring the longevity of its earnings growth.

The company's expansion into digital and e-commerce segments has also played a significant role in its earnings growth. The digital out-of-home (DOOH) advertising segment grew 24% YoY to €93 million, reflecting the ongoing evolution of the media mix in Germany. With DOOH expected to account for at least 50% of segment revenue in the medium term, Ströer's earnings growth appears well-positioned for long-term sustainability.



Ströer's management team and corporate governance have also contributed to the sustainability of its earnings growth. Led by Co-CEOs Udo Müller and Christian Schmalzl, the company has benefited from their combined leadership and expertise in driving growth and adapting to market trends. The company's focus on transparency and continuous communication has further enhanced shareholder trust and value.

In conclusion, Ströer SE KGaA's strong earnings are not only a result of market conditions but also a testament to the sustainability and quality of its "OOH+" strategy. The company's expansion into digital and e-commerce segments, strong market share, and long-term agreements on the German market, combined with its effective management and corporate governance, contribute to the longevity of its earnings growth. As Ströer continues to adapt to evolving media mixes and capitalize on emerging opportunities, investors can expect the company to maintain its robust earnings performance.