Stroeer SE & Co KgaA
XETRA:SAX
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Stroeer SE & Co KgaA
Earnings Call Analysis
Q1-2024 Analysis
Stroeer SE & Co KgaA
Ströer SE witnessed a robust Q1 for 2024, with sales increasing by 11% year-over-year, from EUR 410 million to EUR 453 million. This growth was supported by an organic growth rate of 9%. Key drivers included the positive performance of the out-of-home media segment, which benefited from easing cost pressures due to declining inflation. Adjusted EBITDA also showed strong growth, up by 12%, reflecting the company's focus on cost management over the past 18 months.
The company's adjusted EBIT increased substantially by 33% to approximately EUR 35 million. This figure highlights improved operational efficiency as net income adjusted rose by 41%, from EUR 9 million to EUR 12 million. However, free cash flow dipped to negative EUR 24 million, which reflects working capital phasing, a common phenomenon at the start of the year.
Capital expenditures for the quarter fell sharply to EUR 90 million, down 38% from EUR 31 million recorded in the previous year. The company anticipates stable investments for the full year and references this decline as a temporary phasing effect rather than a long-term trend.
The out-of-home advertising segment had a particularly strong quarter, achieving an impressive 17% organic growth, outperforming expectations. Digital out-of-home sales surged by 30%, while traditional formats also remained strong, recording a 13% increase. Overall, this segment's performance solidifies its increasing foothold in the advertising market, taking market share from other media types amid a recovering market landscape.
As the company prepares for Q2, they expect organic revenue growth to be 1 to 2 percentage points above Q1, with the out-of-home segment anticipated to maintain its strong momentum at about 15% to 17%. This growth is further supported by potential additional revenues from upcoming UEFA Euro 2024 advertising opportunities, predicting an upside of 3-4% from events taking place in June.
Ströer maintains a positive outlook for the full year, expecting organic revenue growth to exceed the previous year's 7.5% and to see substantial operational leverage, projecting EBITDA margins to remain stable year-over-year. They anticipate an adjusted EBIT growth rate double that of adjusted EBITDA, with free cash flow also expected to significantly surpass EBIT growth.
The advertising landscape is rapidly evolving, with digital out-of-home advertising becoming a core media strategy for national advertisers. The company is seeing substantial interest from large FMCG clients integrating digital out-of-home into their advertising strategies. This foundational shift should support continued growth in the sector over at least the next decade, led by innovations in programmatic advertising.
In the Data as a Service (DaaS) and e-commerce divisions, revenue growth in Q1 reached 5%. Notably, Statista is recovering with strong 20% growth in new subscriptions and improved customer experience from AI integration. The strategic changes made last year are seen as pivotal for Statista's resurgence in sales momentum, with a more aggressive pricing strategy enhancing both customer retention and sales performance.
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Ladies and gentlemen, welcome to the Ströer SE Q1 Figures 2024 Conference Call. I'm Vicky the chorus call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Schmalzl. Please go ahead, sir.
Dear ladies and gentlemen, the analysts, 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 3 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 EUR 410 million to EUR 453 million, as an increase of 11%. The 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 a consequence, adjusted EBIT will increase significantly stronger compared with adjusted EBITDA. The corresponding effect can be clearly seen in the past quarter and adjusted EBIT growth of 33% to around EUR 35 million 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 EUR 9 million to EUR 12 million. Free cash flow for the quarter declined to minus EUR 24 million compared to minus EUR 15 million in the prior year period, mainly influenced by working capital phasing. At around EUR 90 million, CapEx for the quarter was 38% below the previous year's figure of EUR 31 million 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 working capital section. While 2023 was a rather weak year for the advertising market to start into 2024, of course, against softer comps 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. But it's important to mention that Nielsen reports on a gross basis, and therefore, these numbers are inflated by some 6 to 7 percentage points versus net figures. So realistically, the German net add spend is up by 5% to 6% and out-of-home in total, on a net basis, around 14% to 15%. Either way on a like-for-like basis, out-of-home advertising continued to win market share.
Our own Ströer 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 2.5 points better than our best estimate 9 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 the global digital platforms from the U.S. 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 product 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 and even accelerated outperformance 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 for others. The underlying growth drivers indicate sustainable 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 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 subsegment is approved 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, SME 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 market -- win market share from other media, but we have to actively manage that process and our long-term investments in local sales infrastructure payoff 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 also 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 2 years, correspondingly stronger market penetration and thus an increasing market share for the out-of-home category.
Net revenue retention in Q1 was at 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 8 percentage points higher than in Q1 last year. It shows that digital out-of-home is rather an element of the digital media universe and 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 buy.
National customers below our top 20 by size, so beyond the large corporate key accounts are characterized by average ticket sizes of around EUR 77,000. Historically, out-of-home only made sense for nationwide advertisers when they invested at least EUR 1.5 million 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. The 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 SSP 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 TorAlarm 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 other market leader with over 27 million unique users ahead of Ströer Media Impact or TikTok 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 assets 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 observed 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 and advertisers selected a range of individual sites and on average EUR 400,000 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 EUR 1.5 million for out-of-home. Today, the leadium/medium the market is digital. So anything that is digital across all channels gets a total 2/3 of the advertising cake globally. Digital out-of-home is clearly the leading product in our industry and advertisers by programmatically their relevant audiences on public video in any possible budget size.
Almost all historical entry barriers to use out-of-home by advertisers have fallen. We are seamlessly integrated in the workflow of all digital media and the historic underpenetration of out-of-home offers 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 on my side. Altogether, we had a strong start into the new fiscal year, exceeding our own forecast and expectations for sales, earnings and cash flow. Reported sales growth in the first quarter came in at 11%, the 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 noncore service activity in our out-of-home segment.
Overall, an accelerating growth trend in out-of-home more than compensated for a top line moderation at Asam and Statista. The group achieved profitable growth with EBITDA adjusted improving by some EUR 11 million or 12%. Exceptional items in the quarter were roughly EUR 5 million, 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 EUR 104 million, up 10% compared to the prior year quarter. After a temporary increase in Q4, including some extraordinary write-downs, now depreciation and amortization for the quarter was basically flat. With that, reported EBIT for the quarter improved significantly from EUR 18 million to EUR 27 million. The financial result came in at around minus EUR 18 million compared to minus EUR 14 million in Q1 '23. The development mainly reflects higher interest rates. [indiscernible] 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 months, 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, EBIT came in at EUR 9 million compared to EUR 5 million in the previous year's quarter. Adjustments to be considered in the quarter were EUR 6 million and related mainly to the exceptionals mentioned before and PPA-related amortizations of around EUR 3 million. 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 EUR 23 million in '22 and EUR 19 million in '23, in the current fiscal year, we talked about EUR 12 million. Considering the effects described above, net income adjusted came in at around EUR 12 million, so approximately EUR 4 million higher than in the prior year.
Let us now switch over to the cash flow. The improvement in EBITDA and lower cash out for taxes was contrasted by higher cash out for interest and working capital as well as a decline in other. The work -- the capital development reflects seasonality patterns, in particular, also after a 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 in 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 EUR 44 million including lower investments, free cash flow was slightly up year-on-year. Lease liability repayments last year benefited from phasing effects. The free cash flow adjusted, so after lease liability repayments amounted to minus EUR 24 million 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 EUR 13 million, including the adjusted free cash flow for the quarter of minus EUR 24 million and a cash in from the equity contribution of exercise stock options of plus EUR 4 million. The remainder of EUR 7 million in the net debt reconciliation resulted from the reduction of previous customer over payments. As a reminder, these over payments do not impact net debt since the corresponding cash out is offset by the reduction of the financial liability to the [Audio Gap].
With that, our leverage ratio remained stable compared to Q4 last year and slightly better than in prior year's 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 out-of-home.
Our regional local business continued to deliver solid growth, while our business with large 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%. Sales in the service category compared to the prior year were characterized by the disposal of a noncore activity.
EBITDA adjusted for the quarter increased from EUR 59 million to EUR 73 million, supported by moderating cost inflation and a 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 and 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 were 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 EUR 31 million after EUR 33 million last year, including a technical effect of around minus EUR 3 million from the loss of the [indiscernible] contract that I mentioned in the last call. The effect on EBITDA adjusted for the full fiscal year will be around minus EUR 10 million. There is and will be no effect on sales, EBIT and net cash flow due to the compensation of business volume through a newly acquired business mandates such as Sport 1, for instance.
Excluding the 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 growth was 5% in the first quarter. While sales in Asam 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 Asam.
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 6 to 8 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 EUR 12 million. 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 earnings development, 1 to 2 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 the UEFA Euro 2024. Digital and dialogue with similar double-digit momentum in Q2 as in Q1, and DaaS and e-commerce with an accelerating growth rate versus Q1.
Full year guidance remains unchanged for the moment. Organic revenue growth noticeably be 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 adjusted 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 planned for a Capital Markets Day with a focus on our out-of-home midterm projections for Q4.
Let me 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 30. 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.
[Operator Instructions] First question from Christopher Johnen, Equity analyst.
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 I think the focus here is what the deceleration in growth, particularly Asam, does to the sales process, 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. So I'm curious if you could give an update on that. Because obviously, the question is, with the strong growth also continuing in out-of-home in the second quarter, whether you feel comfortable with double-digit growth for the full year.
Maybe the first one on Asam. I mean, as you said, in general, we are committed to sell the business as we see as non-core. I think secondly, we are constantly monitoring the market and see that in general, M&A is slowly, yes, but nevertheless, M&A market is picking up a little bit. UT sector seems also okay. So we are working on the preparation here. And we are extremely happy with the loss, I would say, 2, 3 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-Daas businesses over the last 2 or 3 years. Yes, we had very strong quarters. We had a bit softer quarters. So the last 2 or 3 quarters have been extremely strong for us, especially in China. At the moment, we're a little bit 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 are -- 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 Asam is the product, the brand and its historic heritage in the Daas 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 I mean we look at it over time and over the coming months.
Regarding the order book, as you said, I think last time was 9 or 10 weeks ago and there we had about 1/3 of our Q2 revenues in our books. So at the beginning of May, we have the full April, which just shows unchanged momentum from Q1 May is done by 80% or so, looks similar. The pre-bookings for June look even a bit stronger, but they are the final results will depend on what the final package sales for the European Cup might bring. And the rest of the year is -- looks unchanged positive double digit. And yes, we are 8, 9 weeks further down the order book growth. So nothing has changed on comparable momentum also in the second half based on the prebookings, but nevertheless, now there is, I don't know, 55% to 60% to come. So a bit too early to be 100% what the precise performance in the second half should look like.
But overall, that we continue with strong growth that the growth has more momentum than last year and that we are outperforming the advertising market. I wouldn't know why any of those aspects should change throughout the year. So yes, that's why we are unchanged, very positive also about the second half, but felt like it's a bit too 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 gives probably then also a clear indication for Q1 -- Q4, sorry, and the rest of the year.
The next question from Craig Abbott, Kepler Cheuvreux.
I just have a question for now on Statista, please, reformulated my originally formulated question. Based on your comments on the call, which were encouraging that you expect to see revenue growth there begin to reaccelerate in the next month as new subscriptions one to drive that. I just wondered if we could get a little more color on like the dimensions that acceleration rate? And also, you mentioned just very briefly in your comment that you've seen some supportive effects from 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 will be helpful.
Well, I think as Statista is selling subscription contracts that go beyond 1 year at 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 in reported revenue in Q1. I think the more important point is that sales are again moving beyond 20% at the moment because ultimately, that defines what we will -- we can expect in the next 2 or 3 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 prepare 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 also something we are constantly improving, but we see the results.
And I think all the 3 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 are 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 scrollable 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 mid-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 see at the moment that it's the upside potential through improving user experience by just helping our paying customers to find the right data on the platform faster than without generative AI.
And then maybe to add on that. I mean, also what we're expecting to that further improvement of earnings. So last year, I think margin that we have was sometime below 10%, and we will clearly see a step up of that margin or earnings trajectory this year, and particularly in the second half.
Okay. All very, very useful. I just have one tiny quick follow-up right on that, is -- so the customer retention rate is unchanged with existing customers?
It has improved slightly, which is -- was also a good learning for us because I think one of the biggest -- we're not fierce, but I think we've just been cautious and 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 1 or 2 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 release might make it even easier for customers so that they clearly see the difference between what was Statista platform search 2 years ago and what is it at the end of 2024.
The next question from Julien Roch, Barclays.
If I look at Page 7, can we get the base in millions of euros for '23. So 3 numbers out-of-home, digital out-of-home nonprogrammatic 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 4 numbers?
Second question on free cash flow. You mentioned that working capital is phasing but you also add cash exceptional going up in Q1, cash interest going up and lease payment going up a lot. So can we get a full indication for this 3 numbers, cash exceptional, cash interest and cash leases?
And then last one, again, on free cash, CapEx down. Can we get full year guidance 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?
Julien, I mean your fourth one, Amazon, was on Page 7, right, the market projection. I think Christian will cover that in a minute. Coming to the point on cash flow, and you asked for some indication on the individual lines for the full year. As I said in the speech, I would say we expect a moderate buildup in working capital. Interest expenses, I would still expect to be above the prior year level, but we should not see the same step up in absolute millions that we have seen in Q1. So we'll 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.
Cash leases?
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. By no means you will see sort of a relative increase that you have 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, Julien. 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 between 100, 105, depending on how you deal with SSP commissions, they were programmatic. So about half the national advertising spend. So -- and I have to -- 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 EUR 1.34 billion for the total market in 2023, roughly 380 for digital in total, of which 205 were programmatic. But that's the external data that we've been referencing here to for the total market.
I think it's worth to note that the increase, strong increase in programmatic strategically for us, the most important KPI because this is actually reflecting in the turning point, what Christian said before in the speech, that out of home now through digitalization is moving from ad-on media in earlier times, whatever 20 years ago was Print and it was TV, but now it's digital. Digital means out-of-home but comes now from 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 not actually happening, and this is a significant growth in part for the next 5, 6, 7, 8, 9, 10 years, that digital out-of-home is part of a core media strategy of all national advertisers. So the growth is coming from national advertisers and from programmatic. For example, right now, we are discussing this 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 a strategic talks from workshops et cetera, with all the big clients, how to integrate our digital out-of-home in the digital media strategy. So this is clearly going to -- this is a big turning point for us as out-of-home industry around the world.
I think last question is coming from Annick, if I see it right?
Next question from Annick Maas, Bernstein.
My first question is on Asam again. Can you give us the split of how much revenues you do in Daas 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 a bit 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 2 quarters?
Well, on the ionic on the question around classic out-of-home so 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 substantial. 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 flattish classic out-of-home spendings. Also we had lost tobacco advertising, which was like 1.5 to 2 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 better than the ad market and therefore, in relative terms, better than prior year, and we also had no final tobacco ban stage.
So I would say it's a bit above our expectations, and it's also driven by 3 or 4 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 3, 4, 5 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 focused on very specific locations, no matter if they are 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 beyond our own expectations midterm 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, Asam, 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 exporters, that amounted to, I would say, the whole auto distribution channel is something like 15% to 20% of the EUR 200 million or so we had last year in sales.
And sorry, your last question, I didn't get that acoustically, it was [Technical Difficulty].
Yes. On the UEFA Cup, how much extra advertising would you expect in the worst case or in the best case, for the football UEFA?
As on the progress of the German team, I mean.
So you must have exactly the [indiscernible] German's win and the other one.
So I mean we said like we see similar momentum for the second quarter than the first one, to the range of 15 to 17. So assuming that June gets like 10 percentage points extra in June representing, I don't know, 1/3 of that quarter, yes, 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 Henning said if as we all expect, the German team might win, yes, 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. So we might also see something similar in July, like 2 or 3 percentage points for the quarter, but it depends on the quality of our teams. But that's roughly the range. So we don't talk about 20% on top in the quarter, it's 1 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 as we don't see any downside risk, we only see some kind of upside potential.
Right. So we hope the German wins then.
[Operator Instructions]. Gentlemen, at the moment, I have no more questions registered.
Good. So thank you very much for your time for your questions, and have a great [indiscernible] weather and hope to see you soon at least at our half-yearly presentation. Take care.
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