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Stroeer SE & Co KgaA
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Dear ladies and gentlemen, welcome to the First Half Figures 2020 of Ströer. At our customer's request, this conference will be recorded. [Operator Instructions]May I now hand you over to Udo Müller, Founder and co-CEO of Ströer, who will lead you through this conference. Please go ahead, sir.
Thank you. Dear ladies and gentlemen. Thank you for joining our Q2 results call today. Together with my co-CEO, Christian Schmalzl; and our CFO, Christian Baier, we will present the financials for the first half of 2020 and our Q2 figures and give you some additional insights, where we stand to our long-term strategy, how we evaluate the midterm development and how we respond to the short-term challenges arising from COVID-19. Since the corona epidemic started in Germany, substantially at the end of week 10, roughly 60% of the first half of the year was suffering from the pandemic development. And the crisis is definitely not over and no one can really predict the overall economic impact and when or if a vaccine will really bring us completely back to the old normal. But we can focus on the areas that we can influence and concentrate on operation excellence as in the past. And that's what we did in the last weeks and months.Let me start with our results of the first half of 2020 and the reassurance around our long-term strategy. Christian Schmalzl will give you insights on how we managed through our second quarter during the crisis and what is now emerging for the third quarter at least on the basis of the current visibility. And Christian Baier will talk you then through the details of our financial performance in Q2 and will have some brief comments on our sustainability report, which we have recently published.The results of the first 6 months of 2020 are a perfect proof point that our Out-of-Home plus strategy performs in both, in normal but also in rough conditions. Content based businesses, like T-Online, our statistics platform, Statista as well as our direct businesses, Asam and contact centers performed comparably strong. However, the lockdown weeks and the quasi shutdown of public life took its share from our business performance, especially at out-of-home and public video in the second quarter, despite the expected slight improvement and easing of the pandemic impact end of May and throughout June.The reported revenues in the first half of 2020 for the group stands at EUR 632 million, down 15% compared to the prior year period. Organic revenue was at a comparable level at minus 14%. The adjusted EBITDA declined by 27% to EUR 185 million. Our adjusted EBIT was down from EUR 117 million to EUR 39 million, mainly due to basically unchanged IFRS 16 effects. When compared to the prior year period, adjusted net income fell by 74% from EUR 86 million to EUR 22 million, however, performed better in absolute terms than adjusted EBIT.Operating cash flow in the first 6 months was extremely solid with EUR 153 million. Also in the times of the pandemic, we continued to invest in our core strategic field, especially digitalization. Consequently, net investments of around EUR 64 million are still in line with our initial plans. Despite the overall numbers for the first half of the year, the really interesting part is, after our strong Q1, the Q2 development during the peak of the COVID-19 crisis in Germany.Let's maybe start with our expectations 3 months ago, when we published our Q1 numbers mid of May. At that time, we'd just been in the middle of the COVID-19 storm and we saw 3 benefits of strategic positioning. First of all, our focus on one country, which allows even tighter management and control of operations, especially in such a crisis situation, especially Germany with the health system as well as the government support for the economy proved to be very resilient compared to many other countries. Secondly, our so-called plus businesses generating over EUR 100 million cash earn on a year, were as robust as expected. And high-touch business got overproportionately under pressure, our digital businesses and big parts of our direct marketing businesses has and were -- and were and are an important stabilizing factor for the total group. And thirdly, our flexible and semi flexible cost structure gave us a lot of area to generate cost savings immediately without damaging any of our long-term growth initiatives, to make sure that we are in a strong position once we see sign of market recovery. Even if visibility was really low in that situation, we have been providing a detailed guidance per segment and key businesses units and were as close as possible to our customers.Looking at the results of Q2 now, we finished at a group level roughly 8 points better than we had expected mid of May as the market recovery started a bit earlier than expected. The OOH Media segment, with the longest lead times for new bookings, finished at around index 50 versus previous year, pretty much where we had expected to be. Also, Germany performed clearly better than Poland, and European blowUP business, especially local sales are back at an almost normal level during June, and we see a constant order book stabilization week over week. July and August are currently roughly 15% to 20% better than June in Q2. The digital out-of-home and content segment showed, as expected, quite a mixed picture, but was overall 8 points stronger than we had forecasted. Public video with index 40 whereas the prior year was better than the expected index of 25 due to positive developments in June. Statista as well as our publishing business were also better-than-expected and grew mid-single-digit in the challenging second quarter. The less profitable third-party online ad sales business was slightly below expectations. Also especially the programmatic part was strong in Q2 and the sales of TubeOne Networks to Bertelsmann end of Q1 was another good step to focus even more on our core businesses. July and August currently show an ongoing recovery and the total segment is another 15 to 25 points better than Q2.In Direct Media, we also used the crisis to further optimize our portfolio and sold Ströer products of more than EUR 3 million, the last commercial asset, apart from AsamBeauty, which got almost a push through the crisis and grew beyond 20% in Q2. Our call center business was robust as expected and Ranger, our door-to-door business, was suffering, but far less than we had feared. Also, there has been a complete sales stop for 9 weeks. We have been back on weekly pre COVID-19 performance already end of June. So overall, Direct Media in Q2 was 30 points better than what we had guided. And in July and August, the segment is already back on a mid-single-digit growth level overall. An important driver for this development and also crucial for our core out-of-home business is the fact that public life and mass mobility in Germany is recovering already since May. The closing of schools and kindergartens in mid of March as well as the nationwide restriction of public life beginning in the second half of March, led to a sharp decline of outdoor traffic. The low point was between week 12 and 15, so in the first half of April, looking at Apple's mobility report or also comparable data from telcos or Google. But with the reopening of shops and restaurants from May onwards, of course, in combination with the obligation to wear masks, the mobility of people were increasing week-over-week and public life came back again.So from the end of June, overall mobility got closely back to pre COVID levels, public transport still a bit behind, but also with a constantly positive trend. The overall recovery was supported by the beginning of the holiday season and most of the people rather than spending their time at home or at domestic holiday locations. Work from home was reduced in most of the larger corporates, which often started with roughly 50% office presence from July onwards for office jobs again.It's worth mentioning that according to the consensus data of the German Department of Transport, 21% of the overall mobility is caused by people commuting from and to work. Roughly 40% of the working population have an office job in Germany. 60% have not. We sometimes forget about the fact that still 25% work in industrial production, more than 5.5 million people work in the health system, or that we have roughly 6 million craftsmen. Only 4 out of 10 people can theoretically work from home. And even at the peak of the crisis, maximum 50% of the office workers stayed at home or worked from home according to recent studies from the University of Mannheim. So even if all office workers would do 50% work from home as in the peak of the crisis, it will only lead to roughly 4% traffic decline. At the same time, mobility overall might not necessarily decrease as people reallocate their commuting time in other forms of outdoor activity. So there's no doubt that COVID-19 will change partly mobility patterns and might change traffic across our different product offerings, but we don't see any substantial impact on the overall tailwinds for our industry. As the German government responded quickly and reasonably to the COVID-19 challenges and our health system proved to be really robust in the peak weeks of the epidemic development and as the government support of the economy, including the instrument of short-time work was really strong and fast, the drop of mass mobility was less sharp than in countries with harder lockdown. Furthermore, the recovery started earlier and had overall more momentum in comparison to U.S. or U.K. The federal and decentralized structure of Germany with many midsized and smaller cities and only few larger cities clearly supported the trend. It's also easier to control the spread of the virus as well as to isolate hotspots quickly. Cities like London or New York, with a stronger importance of the public transportation system and a even more dense population structure, have a slightly bigger challenge than larger German cities as Cologne or Munich, where people live on more expanded space. The one key learning for Germany for Q2 was the out-of-home product and the underlying audience coverage has mostly recovered by the end of Q2, and we, therefore, don't see any bigger issues with the performance of our out-of-home for advertisers. At least as long as there is no second wave or massive new restrictions on public life.With that, let me hand over to Christian.
Thanks, Udo. The next key question around the Q2 development is how the advertising market and especially the bookings for out-of-home responded to the crisis in general, but especially to the loss of audience as well as the beginning recovery. As we operate in exceptional times, we wanted to give you exceptional insight in our order book development at the moment. On the slide, you see the revenue development for Q2 week over week, for both traditional out-of-home products in Germany and public video. The light blue line is 2019 and the dark blue line is the cumulative revenues coming in for the second quarter 2020. The columns at the bottom show the deviation of the weekly order intake 2020 versus 2019. Higher order entry than previous year in a week is green, lower order entry than previous year is red. Until week 10, or mid of March, we have been in line with Q1, nicely ahead of previous year in the order book for the second quarter and fully on track of a strong organic growth development. Then schools and day care centers closed and restrictions of public life started. And first, incremental revenues stopped before the existing order book even went backwards for about 4 to 6 weeks because we had almost no incremental bookings, but many cancellations or shifts of campaigns in the peak phase of the soft lockdown in Germany. With the reopening of shops in week 19 and 20, the inflow for Q2 went back closer to previous year's level, but there was no chance to catch up the losses of the previous weeks for that quarter. And that is an important point in our traditional business, as you see on the left diagram, both booking and cancellation times lead to a delay of at least 4 to 6 weeks in the respondents to the overall environment. And the strong share of long-term contracts with SMEs give us a robust starting point at the beginning of a quarter. Public video or digital out-of-home has shorter lead and booking times, so the product responds more directly to both lockdown and recovery, as you see on the right graphic. Negative deviations in the order book for Q2 were higher, and as one of the key backbone of the product or trade stations, the low public transportation traffic in April and May made it difficult to start the recovery before June. But already from week 23, 24 onwards with more normalized public transport, order book was in some weeks already slightly stronger than in the same weeks of the previous year. A slightly different picture for the third quarter so far. On the one hand, you see that the weekly deviations versus previous year have never been as extreme for the second quarter for both classic and digital out-of-home. So the overall gap that we need to fill once the quarter started is already by far smaller. On the other hand, there was lower revenue inflow than previous year until week 24 and 25, that was the time when traffic had more or less and overall normalized again. Since that, and over the last 6 weeks, the weekly order book development for Q3 is not that far away from last year's comparable period. And we will now see what August and September will bring and if we are able to further close the gap, especially for digital out-of-home, we have potential until the last day of the quarter. But it's important to say we cannot decouple from the advertising market and especially the larger and regional national advertisers. And no one can predict if there are not increasing COVID-19 infections again and also the consumption climate is still not really robust. But you see the constant recovery of the advertising business. And as long as we are not facing a second lockdown, there are no indicators that the general recovery shouldn't continue week over week. To what level in Q3 is still difficult to predict as we are still in the holiday season, and many clients and agencies will come back in the next 2 weeks and work on their activities for September to Christmas. Despite cost-cutting initiatives and short-time work in our organization, we still try to use the second quarter to push some marketing and sales initiatives for our core business. We had ongoing video group sessions, so-called open talks, with clients, agencies and industry partners to keep all communication channels open and discuss in a positive way marketing solutions in and for the crisis to stay top of mind. We invested in keeping our sales force motivated, caught up with trainings and coachings to make sure that we are fully standby as soon as we can accelerate our work with clients again. And we have run many charity campaigns, including a cooperation with the Department of Health on digital out-of-home to inform the population already early in the crisis to create visibility and talk of town for out-of-home and demonstrate the benefit of our broad and near casting medium. Together with the German out-of-home association, FAW, and the network agency Omnicom, we published a synopsis of 250 marketing mix modeling and key learnings and insights around the impact of out-of-home and especially the powerful combination with online media. In the crisis, advertisers challenge their existing media mix and return on investment, facts based, is more important than ever. We used exactly that topic to discuss midterm strategies with clients and where and how out-of-home can drive sales and footfall. Any crisis is also a chance to build new plans from scratch again. And as a growing challenger medium, we see midterm more opportunities than risks for us.Finally, we invested in demonstrating our total and broad portfolio to enhance the discussions around the impact of COVID-19 in a positive way. Even if the overall impact on mass mobility is lower than expected, some target groups changed their mobility pattern and use, for instance, the car instead of public transport or walk specific distances or do their shopping rather once a week than several times. As we manage around 60% of all out-of-home touch points in Germany from the small screen in the supermarket via traditional street furniture and screens and stations, to billboards around pharmacies and columns in residential areas, there are incredibly many opportunities to reach people out-of-home. So the question is not if out-of-home makes sense, the point is how do you make best use of it as an advertiser and we're the smart solutions in the COVID-19 context. We had to maneuver through the so far most challenging quarter in the history of the company and the crisis is, of course, not over. But when we look at the key growth drivers and KPIs of our business, we are in a robust situation, while the German advertising market is slowly recovering and moving from a red to an at least yellow traffic light. The out-of-home market is highly consolidated, and our huge market share puts us in a pole position in the recovery scenario. For programmatic sales, tech and data, the crisis will be an accelerator, and we will be -- we are well positioned through our online and digital business in combination with digital out-of-home. The scalable local sales force is fully up to speed and the robust long-term contracts of SMEs have helped us to get through the challenging Q2 and might be even more important to win market share from local print in the future. The plus businesses have helped to stay in positive touch with clients even when audience of out-of-home media was down. We see the structural challenges of TV and magazine haven't become less challenging in the crisis. And most importantly, apart from 4 to 6 weeks post, we still follow our long-term digitization strategy for our out-of-home infrastructure. Of course, with reasonable allocation of CapEx, that Christian will share in more detail the financial numbers and our performance around cost management in Q2. So let me hand over to him to comment on the financial side.
As Udo explained briefly in his opening remarks, the figures of the second quarter must be seen in light of the effects of the corona pandemic. Overall, group revenue declined in Q2 2020 by 33% from EUR 393 million to EUR 264 million. At a very early stage of the crisis, we looked at all cost positions and derived stringent cost-reduction measures. Most notably, we reacted to reduce workload by leveraging the instrument of Kurzarbeit across many of our businesses. To not risk projects of strategic importance, we selectively eased cost reduction efforts once public life in Germany regained traction in May. As a result, adjusted EBITDA declined by minus 56% from EUR 139 million to EUR 62 million, exceptional items at EUR 10.6 million and contained EUR 4 million from the disposal of TubeOne Networks and Ströer products. Another EUR 6 million result from ongoing restructuring, the comparable level to Q2 last year.With EUR 94 million, depreciation and amortization is 4% higher than in Q2 2019 due to scope effects from IFRS 16 prior to corona. The financial result of minus EUR 8 million is EUR 1 million higher compared to the previous year's quarter as we drew our credit line to secure liquidity and the peak of the corona crisis. The tax result of the quarter was plus EUR 8 million compared to minus EUR 6 million in the previous year's quarter, a technical effect resulting from the negative tax base in Q2. Adjusted net income of the quarter was minus EUR 60 million.Our free cash flow adjusted for Q2 2020 is EUR 80 million, a quite remarkable level in the current environment, quite close to previous year's level and reflecting our high payment discipline. Tax cash out was EUR 5 million in Q2 2020 compared to EUR 12 million in the previous year's quarter as there were no tax prepayments for the current year. Working capital in Q2 2020 was EUR 31 million compared to minus EUR 12 million in the previous year's quarter. This positive development is mainly due to ongoing working capital management improvements, a lower level of receivables in line with this quarter's business development and our high payment discipline. The change in others is mainly attributable to less utilization of provisions in Q2 this year as compared to Q2 2019. Despite the challenges and rough conditions, we continued to invest into our growth and digitization strategy, for instance, in digital screens, software and other intangibles pretty much as budgeted, with a total of EUR 30 million. Lease liability repayments were down by approximately EUR 10 million from EUR 39 million to EUR 29 million because of ongoing negotiations with cities and communities.Our bank leverage ratio increased slightly from 1.8 to 1.84 in the second quarter 2020 that is far below our covenant levels. In absolute terms, financial debt fell significantly by more than EUR 100 million from EUR 672 million to EUR 565 million, mainly because we haven't paid a dividend so far this year. As mentioned before, the financials of the second quarter were fully hit by the corona crisis. All 3 segments, out-of-home media, digital out-of-home and content as well as direct media suffered from these developments; however, to a different extent. Out-of-home media showed organic growth of minus 51%. Digital out-of-home and content decreased by 22%, and direct media fell by 12%.In absolute terms, out-of-home media revenue fell from EUR 181 million to EUR 89 million. This development can be explained mainly by the significant decline in national advertising, whereas regional and local sales remained relatively robust. Given this revenue drop, we imposed significant cost reduction measures across all our main cost items, including rent and lease payments, personnel costs and maintenance expenditure. In total, we were able to reduce EBITDA relevant costs by 37%. This significant reduction was achieved, although many of the negotiations with cities and communities are still ongoing, despite keeping our sales team fully operational as well as continuing our IT and digitization projects.As a result, gross margin out-of-home media stayed quite stable and the decline in EBITDA could be softened. Nevertheless, adjusted EBITDA decreased from EUR 84 million to EUR 25 million in Q2 2020. With that, EBITDA margin stands at 28.4%, well below the level of the comparable period of 46.4%. Despite the challenging environment, we invested into buildup of our digital screens in order to be prepared for a quick reboot of the business in the upcoming months.As mentioned before, public video suffered significantly from corona as there was basically no traffic in public transportation in the first weeks of the quarter. However, the plus businesses of the segment, i.e., T-Online and Statista performed very well. Overall, revenue reported was down to EUR 108 million compared to EUR 141 million in the second quarter of the previous year.In Q2 2020, adjusted EBITDA of digital out-of-home and content was EUR 33 million, with a margin of 30.5% or 380 basis points below previous year's Q2 margin of 34.3%. Reported revenue of the Direct Media segment was down by minus EUR 10 million from EUR 81 million to EUR 71 million, which is easy to explain. The lockdown prevented our door-to-door sales business Ranger couldn't do its job for many weeks, which left its marks in both revenue and adjusted EBITDA. In contrast to this, Asam, which grew double-digit and our contact centers performed strongly throughout the crisis.Adjusted EBITDA for the quarter was EUR 8 million, down by EUR 4 million versus prior year's quarter and corresponded to an adjusted EBITDA margin of 11%. Before closing the section of our financial status, let me reiterate one important point. Our core business development strategy remains unchanged. In the current situation, we do not only see challenges, but are confident about the future and see an opportunity to further strengthen our market position. We will, therefore, resolutely and as planned, push ahead with the 3 growth drivers of our successful out-of-home plus strategy, digitizing out-of-home, expanding and diversifying our sales and distribution forces and bundling and leveraging our proprietary technological advantages. Where we are slightly behind our plans due to the lockdown, we will have caught up by the following fiscal year at the latest.Let me now say a few words about a topic that is very important to us, sustainability. Sustainability and environmental issues has been on everyone's agenda for a while now. With the green deal, for example, the European Union has planned to achieve climate neutrality in the territory of its member states within 30 years and a more effective circular economy. The profitable combination of economy and ecology is an exciting, serious and long-term challenge, a challenge that we take. To document the importance of this topic to us, we published our first sustainability report last week, which you can download from our Investor Relations page. The report outlines our sustainability strategy 2030 and addresses the 3 key dimensions: environment, social and governance, 1 by 1 in a subject-specific manner. We have addressed environmental issues through a variety of products and measures for many years. For example, we installed particulate filters and the digital screens in bus waiting areas. As a result, the exhaust has a much better air quality for the waiting passengers than before.Another big topic is energy efficiency, of course. By inverting the display on our roadside screens, which many of you know as dark mode, we save up to 90% on energy costs. This is only an example and certainly only the beginning, using more sustainable materials in our billboards and screens, further improving LED energy efficiency and covering street furniture with plants are other topics on our agenda.Social topics comprise the second key sustainability dimension. We plan to further strengthen the sustainability culture across all hierarchy levels of our organization, for example, through specialized staff development and training. We also want to raise awareness on sustainability matters among all other stakeholders and will continue to up our advertising space pro bono, for example, to ecology groups or for other good causes, such as the search for missing children. Good governance is the third component of sustainability and a key success factor for our business. We're adapting our corporate structure to the growing size of the company so that it remains effective.Data privacy, IT security and compliance are key topics in this dimension. Moreover, we provide comprehensive transparency on the composition of our most important governance body, our supervisory board. With the publication of our sustainability report, we have formulated our sustainability strategy 2030. The next step for us is to raise awareness for our ambitious goals to sensitize all those involved and to bring them on board. We will pursue our sustainability goals and implement our plan measures also in times of crisis. To measure our progress against our goals, we will define a set of key performance indicators that we will track consistently. Only in this way can we continuously improve. In order to document our progress to all stakeholders, we will report on all relevant ESG topics regularly in our sustainability report.Let me now hand over to Christian to give you some flavor on what we expect for Q3.
Yes, at the moment, it's still not possible to oversee and predict all potential developments around COVID-19, to give a reasonable guidance for the full year for Q3 and on the basis of the current order book visibility. Therefore, based on July and August, we expect our group's top line development in the range of index 80 to 85 versus previous year, so an improvement of 13 to 18 points versus Q2.Let me close our presentation with a reference to our next 2 key dates. End of September, we will send out the invitation, including our dividend proposal for our AGM, which will be held on November 4. By then, we will have also a better overview on the pre bookings for Q4. Our Q3 quarterly statement will be on November 12, where we will give you also more detailed insights on Q4 and the expected year-end business.So thank you, everyone, and we are now happy to take your questions.
[Operator Instructions] And the first question received is from Annick Maas, Exane BNP Paribas.
I have a few questions. The first one is on the digital out-of-home and content bid. I'm referring here to Slide #5, you gave an index indication for July and August, at 85 to 95 versus the prior year. I was wondering what is within that segment driving that performance? Is it public video? Or is it the other bids in the segment? The second one is also, again, referring to that slide and this time about the traditional out-of-home media business. So again, looking at this July and August number, and referring to the lead times that you suggested that might be a bit longer in traditional out-of-home. Maybe by now, you should have an indication, therefore, what September looks like, or at least the start, if you could give us an indication there? And also maybe tell us into which quarter the campaigns that have been canceled in Q2 or respectively delayed in Q2 have been put? Are they expected to come through in Q3 or more in Q4? Then in terms of working capital management, which has been rather strong in the first half. Just how shall we think about it for the second half? And then just one more on the digital roadside screens. Can you tell us how many you have today?
Okay. Annick, maybe I'll start with the first one. So digital out-of-home and content. I mean, if you look at the results of Q2, then you see that actually, Statista and the publishing business has -- have been already quite strong. So the improvement, July, August is clearly coming from public video. But also from an improving third-party online sales business. And I think the fact that -- well, also the index range even for July and August, we are now in the second week of August. Still index 85 to 95, we see that at the moment. The picture is really changing on a daily basis. And we see that state by state people in Germany come back from the holidays. And therefore, the question at the moment is, I think what will be the dynamics in the next 2 or 3 weeks look like. And that's also -- and I think that was another question of you. That's also true for the traditional out-of-home business. You're right, there are more lead times, but we've changed a little bit the logistics that we can for short time bookings can bring campaigns live within 72 hours. So we have a couple of reservations. We have a lot of clients contacting us, and we think the next 2, 3, 4 weeks will -- can make a big difference for September. So either that the momentum remains the same as in July and August or it really accelerates. But the tricky part is we are just at the end of the holiday season, and there's still a lot of room to maneuver in both directions. And I think sometimes it just needs to trigger from one of the players in an industry and all the others are following. But in general, I would say we are anything but negative. Yes, we see that the recovery in June was already quite nice. We see constant improvement. We see that there is a lot of discussions around what people want to do from September to December. So as long as the health situation, I think, remains stable, we are quite positive about the developments beyond August, at least on the basis of what we see today.I mean, campaign shifts were probably equally split between Q3 and 4. We tried to push clients as much into Q3 when we allowed them to shift away from the second quarter. But not everything works the way you want. So I think there is no specific effect through that shift of campaigns of any of the 2 -- in any of the 2 following quarters. I think it will just be part of the normalizing development around that.
Yes, I'm happy to take the question on working capital. Indeed, we saw a very positive development on working capital, an impact of EUR 31 million in Q2. And if you compare to the previous quarter in 2019, the difference is actually almost EUR 44 million. As I mentioned, I think there are 3 driving forces. One is generally a better working capital management process that we're continually working on. But then there's also 2 other drivers. One is, in Q2 this year, the lower level of assets or the lower level of receivables that we have, which basically went down simply also because of the declining business. And the third factor was the higher payment discipline explaining why we saw a relatively little reduction of liabilities there. So these last points, the receivables and liabilities, I mean, this is obviously something where we will return to normality once the business picks up again. We actually believe, to some extent, there will be a reversal of that effect, the positive effect that we've seen in Q2 than in the upcoming quarters of Q3 and Q4. I think what exactly is the extent, we still need to figure out and we'll see, but you can expect that there will be a reverse effect, at least coming from these 2 drivers in the next 2 quarters.
And the number of roadside screens at June 30 is exactly 400. So not a made up number. It's exactly 400. And I think without corona situation, we probably would have roughly 25 to 30 more, but that's still something that we can catch up in the remaining weeks because I mean, there's an ongoing process around approvals from municipalities, you need to prepare electricity and so on for the ramp-up period. So I think on the basis of the long-term mechanics of what we are planning here, it had no real impact.
Can I just ask one more? So I'm again referring to the Slide 5. You say under the outdoor segment, local sales back at normal level since June. Can you just maybe explain a bit what that means? And talk about your SME client base, how you are seeing them responding to the current environment?
Yes. So again, if you structure our revenues in a normal situation, 20% come from really local clients that book mid- to long-term subscription models, 40% come from regional customers that have campaigns plus a couple of subscription elements and 40% come from national advertisers. So that's kind of 20% are quite solid because you have a lot of rollover revenues from previous years. And then in the peak phase of the crisis, the people just couldn't go out and really create a lot of new business, but that has already started with the beginning of June. But that said, all of the deals they make have a time over the next 2 to 5 years. So the immediate impact for the coming weeks or months is limited, so that's more a business that you build over time. The other way round, even if the crisis is tough, you have that at least as long as clients pay, you have that in your order book already, and you have the revenues. So what we see on the remaining 80%, and that's more of a campaign-driven business with regional national advertisers that normalizes. You have a couple of industries that spent by far more than that, funny enough. It's the tourism category at the moment, which is almost counterintuitive. But yes, it's not TUI and Lufthansa that advertise at the moment, but all the domestic destinations for local tourism here in Germany are very active in the last couple of weeks. And automotive sector is quite active around e-mobility. So there are a lot of triggers. We see that FMCG companies come back since about 4 weeks or so. So with the first bigger programmatic public video campaigns on fast-moving consumer goods for summer-oriented products. It's really across the board. That's why we somehow feel it's a step by step recovery and there's more followers every week. And I think the only risk that we currently see is really completely new situation around the virus and the pandemic development. The business recovery itself really looks robust.
And generally, the -- our SMI -- client base gives us a lot of more stability. That's exactly what we expected because there were a lot of questions in the beginning if we don't expect many SMEs to collapse, and this absolutely didn't happen. So also very minimal, let's say, problems in collecting money, not even EUR 1 million. So it's totally negligible. And the decline also in the middle of the crisis was much lower than the national customers. And so this strong local and regional customer base what we have gives us a much higher stability in a situation like we see now.
Just concrete numbers on that because I think it's an important point. In Q2, we had losses on receivables of EUR 600,000 versus EUR 300,000 in the previous year's quarter. So it's really minor and not that substantial, at least for the moment. We also don't see anything dramatic coming up for July, August and September because that's what we would see already today. And it's the same with requests for deferral of payments. I think the total volume that we had in the peak phase was EUR 3.5 million, of which 80% have already been paid. So the question of are the clients -- still the client's liquidity, okay? And do you see a lot of clients going bankrupt? Nothing at all. And on the basis of more than 50,000 booking SMEs at the moment, I think that also shows that, at least for the moment, we don't see any bigger problems and risks embedded in the business.
The next question we received is from Marcus Diebel, JPMorgan.
Just one add-on the previous comment. And given that the outlook -- your outlook into Q3, could you talk a bit about the cost base as well? I think outdoor was clearly helped by, yes, some delay of payments or cancellation of payments for life -- for rent. You commented on this in the past. Where are we on this? Is that also quickly following? I assume so. And then, therefore, if you could help us understand some -- how the operational leverage now works on the way upwards, that would be very interesting.
Marcus, right. I mean, probably best to really talk about the out-of-home media segment because there we had the largest revenue drop and sales went down by roughly 50% in absolute numbers, by EUR 92 million. If we look at EBITDA costs, we were actually able to reduce them by 37% to EUR 55 million, that's actually affected by 37%. And if you look at the different cost components, 2, 3 months ago, we split it down into rent and lease, personnel, maintenance and others. I mean, obviously, the cost reduction potential there was slightly different. What we have in EBITDA cost per rental lease mainly tied to revenues. So those we could actually take that effect over proportionally. So we save more around 70% on these costs compared to the 50% in revenues.On personnel, as I mentioned before, one -- a huge lever for us, obviously, was Kurzarbeit, which for the entire company allowed us to save around EUR 20 million in Q2. That amounted for the out-of-home segment to drop in costs, say, of around 20% plus. Maintenance costs, we were able to reduce by 40% and also other costs like rents for our office buildings, travel costs and all of that also going down by roughly 20%. So that brings you overall to this minus 37% in EBITDA cost. If you compare that to the revenues, we basically talk about a drop to rate of 60% then or differently that 40% of our costs could be variablized.
But there's nothing postponed anymore. We are completely on track in paying our rents, our costs, et cetera. So everything is completely [ assured ] here.
Yes. And I think what's also important is, as I mentioned, as soon as we saw mobility and frequency is picking up again, that our business is picking up again in May, that we really continued to spend on, for example, our digitization efforts both the screens, but also the processes behind that, that we fully put our sales force back into work to actually capture all opportunities there. So we made very deliberate decisions in order not to forego a potential for the future.
Okay. And from your previous comments, you really feel that the SMEs will remain resilient also in the next couple of months, yes? And does it sound like you really expect any impact on that part of the business?
No. No, no. And don't forget, there's a lot of permanent advertising here. And a decline in -- from region to national was 1:3 almost. So local business was doing 3x better in terms of decline than the national business. So I think this is -- that's what we already said in the last conference, I mean, the crisis is the biggest threat as ever for strategies and also for management teams, I think. And I think we are really satisfied that our portfolio did extremely well, supported from the plus businesses on one hand and inside the auto businesses, it's a local business, it's much more difficult actually to generate the turnover because they are smaller tickets, but is much more resilient. And if you look on our leverage, I mean, nobody asked about that up to now, but leverage stands at the same number like last year, since this is a really, really remarkable result.
The next question we received is from Christoph Bast, Bankhaus Lampe.
Only 2 questions left for me. Firstly, coming back on out-of-home costs, please. So the drop-through in out-of-home of more than 60% was, I think, relatively high. Although you stressed in the past that you have a very flexible cost base. So can you tell us how your 15% to 20% guidance for the revenue decline in Q3, obviously for the group level, is going to translate into adjusted EBITDA? And secondly, could you just remind us what percentage of roadside screens replacements of traditional billboards? And what percentage are, let's say, additional payables or additional locations? That's it.
Yes. And starting with the cost base question, and I think there was also along lines that Marcus asked about. So as we see that business is recovering, we ease some of these cost-reduction measures. Specifically the short-time work. We've already started to ease a bit. So we believe that we will not see as high savings on that dimension there. For all the rent and lease payments, we are still in negotiations. It remains to be seen where we go. So I would not expect that we cut back EBITDA cost by 37% in Q2; Q3, probably slightly less. But again, also, we don't expect 50% of sales decline, but rather 30%. So yes, I think that's basically the outlook and how our take is on Q3 development in terms of cost.
And if you look at the structure of the roadside screen locations, if you really go for that billboard format, probably more than 95% are existing locations. Just here an example also why at the moment, I think, in that recovery phase, we need to balance a little bit focus on cost versus long-term sales potential. We have municipalities where the negotiations around special discounts for us in the second quarter started with -- it's all about price and we are currently in a phase of a negotiation where we just switch it and say, listen, we are fine with paying the rent for Q2, but we want to have 50 approved roadside screen location and here is exactly the locations that we would like to have. So there is different ways now to just create the best value. And of course, we tried to optimize costs especially to make sure that there was sustainable benefits in there. But I think we also need to make sure that we don't forget about developing the business as well. I think if the format roadside are larger than billboard, there can be also a couple of new formats. But in general, it's really about converting existing locations with the digital technology.
And the next question received is from Craig Abbott from Kepler Cheuvreux.
A couple of questions from my side, please. Just in terms of look -- you've made clear your customers are coming back also on the national side. But I just wondered if there have been any changes in their mindset in terms of their ordering behavior. And here, I'm thinking about, has there been any change in terms of leads of prebooking? How far in advance customers are prepared to prebook? You went into Q2 with about 50% of your zin expected around in public video sales already prebooked. I just wondered, going forward, if this might structurally change? And secondly, on that front, I just wondered if there's been any change in the mindset of customers with regards to pricing. And sticking operationally, in terms of the post video network, you've shown us nicely all the traffic trends have been recovering. But one situation within the shopping malls and as -- if you could maybe just give us an update there because it's a pretty sizable side of your -- size -- part of your asset base there? And finally, on the dividend, you mentioned AGM will be held on the 4th of November. Would we expect any decision on dividend to be announced with the AGM invitation? Or if you could just maybe give us an update there?
Yes. Maybe I'll start with mindset of customers. Yes, you're right. I mean, normally, the level of pre bookings for Q4 in -- at the beginning of August has been higher than now. And we see that customers, especially the national ones book rather month-over-month based on 2 points. First one, no one knows what the situation might look like in -- especially in Q4. And secondly, it's also not the challenge that we have fully sold out already. So that -- so people just book later to be sure what the situation looks like. And I think that has changed. If that is, in general, long-term aspect, I don't know, I would say, over the last 5 years, especially national customers used to book later and later. I think the digitization of our inventory is supporting that, and clients want more flexibility. And in such a situation as now, yes, we expect everything coming in a little bit later, at least until the rest of the year and probably also Q1, just to be sure that you don't have to cancel stuff that you've already booked, maybe your out of the normal booking location.Mindset on pricing. I mean, as you ask us about costs, you would assume that every advertiser will also ask his marketing team internally, what about costs? So yes, we really have discussions where clients, at least not also talk about what about prices. We see that advertising is still not where it was. I can put my money anywhere, yes. But I think we've been, so far, quite good in defending existing bookings and being reasonable about pricing. We've been giving audience-based discounts, especially for public video until mid of June. And from then onwards, we are really now switching to the normal rate card again. And at least for the moment, it looks like, I think, as Udo said in his part, the audience is back. So the product is not really questioned again. We try to be here also quite clear around the pricing and rather try to be then flexible when it's about cancellation period for Q4, just to give customers the confidence that if it comes to the worst, we will find together a reasonable solution. And shopping malls are back on a normal level traffic wise. And I think also the revenues develop in line with what we see for the public video product in total. So it's 1 part, a smaller part of the public video network. But I think it was probably ultimate crash in April when they were simply shut down. But what we see now in the summer weeks, there's a lot of people were not leaving the country for holidays and stayed here. They spend more time in the shopping centers. So I think everything is there quite normal again, apart from the fact that people wear masks anything else is more or less normalized again.
But our total turnover is less than 0.5% in shopping centers. So it's a super small business.
On the AGM, which indeed is happening on the 4th of November, you're right, we will send out our dividend proposal along with the invitation, which will be end of September this year.
The next question we received is from Patricia Pare, UBS.
I just have 2 from my side. On CapEx, can you remind us how much are you budgeting for 2020? And then thinking of 2021, how many more roadside screens and public video screens, are you planning to add? And are you thinking about potentially shifting away from public video into more roadside? And then just to come back on public video. I don't know if you've given that number, maybe I missed it, but what's -- you mentioned that for digital out-of-home and content segments, you're seeing July, August at 85 to 95 index level. What is that number for -- specifically for public video?
Okay. I can start with the last one. So I think public video at the moment is slightly better than the number of traditional out of homes. So we're around index 70 until mid of August -- until middle of August, and as there's a lot of stuff coming really in on a daily basis, that number could still change over the next 2 or 3 weeks. So the [indiscernible] level or maybe even a couple of points better even up to 10 points better. That's exactly what we mentioned at the beginning. At the moment, we see a lot of dynamics. And we just want to be cautious that, yes, we are not too positive, too early, given that there's also a little bit higher infection numbers again in Germany. But the product itself develops quite nicely again.And screens, you're right, we probably switch from -- little bit more from indoor to outdoor screens when we look at 2021, realistically, even if we haven't really made detailed plans for that. But I think the original plan for 2020 was to add another, in total, roughly 500 screens indoor and outdoor. And we probably will get into that direction, maybe a little bit less, not because we have less roadside, but maybe that we just skip a couple of the indoor screens, and that number will be clearly higher for 2021, but we haven't decided about the final pace. It's just difficult to predict it right now. We just -- we'll see what the next 2 or 3 months will bring business-wise.
And on CapEx, in terms of numbers, nothing really changed compared to what we have communicated earlier with that 6% to 7% CapEx as a percentage of turnover. I would apply that rather on last year's turnover as we want to continue to grow and invest into our future. That leads you to the EUR 100 million to EUR 120 million corridor for this year. Currently, we stand at EUR 64 million. So I think we are right on track to get somewhere into this corridor.
The next question we received is from Nizla Naizer from Deutsche Bank.
Great. My questions revolve around the plus business, if I may. Firstly, on Statista in Q2, the index implies that it was up 5%, and that's still a deceleration from its previous growth levels. Just wanted to understand what's impacting this? And when can we see a return to maybe the 30% type of growth that Statista previously generated? Secondly, on AsamBeauty, clearly benefiting from the e-commerce sort of tailwind. How should we think of growth in Q3? And how large is this business on an annual revenue sort of contribution to Ströer. Lastly, you mentioned that TubeOne was sold at the end of Q1. Could you give us the impact to financials from the sale? And connected to that, I guess, online advertising, how is the outlook for T-Online and the third-party advertising business going into Q3? Is it holding up strong? Some color there would be great.
Okay. So let's start Statista. I think with a lot of companies sending people to the home office and procurement and CFOs internally just stopping any kind of expenses where possible, you could just see strong impact, very short-term oriented on Statista in April. But from the beginning, mid of May onwards, that's the overall global picture, it recovered again. So that kind of 5% growth in Q2 was a mixture of an almost normal June, yes; no growth May and slight shortfall in April. If you look at the global picture, you'll see that there is an over proportionally negative impact from the U.S. exactly in the last 3 months. I mean, our -- we have 2 offices there. And like 90% of our sales team sits in New York. That's currently quite a challenging situation. There's no one in the office anywhere in downtown Manhattan. And I think that's roughly where we are at the moment. But we think that already Q3 will be probably on maybe 2/3 of the growth where we are normalized, and there is a fair chance that at the end of the year, we are back on the growth level where we used to be pre COVID. But it's a little bit driven by the development in the U.S. because I mean we globalized the business. The U.S. is the key market. Meanwhile, it's the biggest market. And the situation there has obviously also some impact on new business rollout.Asam, I think the summer months are normally a little bit weaker in general, yes, because people have other things to do than shopping. But -- so it's -- we might get close to where we've been in Q2, but maybe just seasonality-driven slightly below that, but the general development, e-commerce, very strong. Also the historic telesales business is still surprisingly very good and still small, but more and more relevant, retail arm is also developing nicely here in Germany, especially as all the shops are open again. So the -- what we've seen in Q2 seems to be a sustainable development, and we probably get to roughly EUR 100 million revenue, maybe a little bit less or a little bit more by the end of the year. So it's meanwhile then a really remarkable piece of business inside our group.T-Online, and yes, I think they had really good Q2. At the moment, we don't see any reasons that Q3 shouldn't be where it was in Q2. So yes, the whole news traffic around COVID is going a little bit backwards again. But you cannot monetize any way all of that incremental traffic and not all advertisers want to place their ads next to infection statistics and those kind of things. But we see that the traffic of the portal is developing nicely. It's growing, and we don't see that the advertising revenues don't follow in line. So that's good.Programmatic business is probably even accelerating in Q3 versus Q2. There's still little bit open point is how the normal IO business develops. So that's the higher-priced individual head solutions across our portfolio, especially the third party assets. That's where advertisers just as normal in a crisis, they are a little bit more cautious here. That has recovered already in the last 6 weeks. So we are probably not already where we've been before the crisis. But at least by the end of the quarter, we will be close to pre COVID levels, I guess that.
On TubeOne. With the disposal of TubeOne, we realized a profit of around EUR 3 million, and that we exceptionalized. So it's really part of the exceptionals, which is also a key driver why the exceptionals were a bit higher in Q2 this year than in the previous year.
[Operator Instructions] And we received a question now from Patrick Wellington from Morgan Stanley.
Two questions. The first one is actually on the dividend. Your business is improving. The balance sheet is fine. So what are the considerations going into the payment or not of the dividend? Why shouldn't you pay a dividend given that improving trend? And then secondly, just trying to summarize your overall trading trends. It looks to me as though, obviously, July and August is smaller months, but the underlying trends are good, should look at a reasonable September. So would you say that your guidance for Q3 is relatively conservative. And in that context, how close do you think you might get to sort of 0 year-on-year revenue growth in Q4? Or you might want to answer this one in the context of when do you think in your -- using your skill and judgment, best guess, when do you think the group will be back into positive organic revenue growth? Will it be Q1? Or the very easy comp in Q2? What's your best feel if you had to make a guess on that?
Yes. Thank you, Patrick. So regarding the dividend, we're going to pay a dividend. And what we already said a couple of months ago, and we're going to decide in the AGM about the amount we're going to pay, but it will be a substantial dividend because our balance sheet is strong. We have a lot of cash and business is doing reasonably good. Much better than expected originally. You might remember that we made a full draw down of our credit lines at the beginning of the crisis. This was definitely not necessary, if you look back now. So we're definitely going to pay a dividend now.
And on evaluation of the guidance and to not give a guidance for Q2, maybe just 2 comments. I think, first of all, if you look at how we were looking at Q2 and where we ended up and what we are guiding now for Q3, I think it's fair to say that there is a really good chance that we end up at the higher end of the corridor that we've given for Q3. That would mean that our business jumps from index 70 in Q2 to index 85 in Q3. And if you just -- I don't know, I'm not as smart as you, but a linear curve would lead to index 100 in Q4, but no one really knows what the fourth quarter will actually look like, yes? I mean, we have the flu season coming, people will be now back from the holidays. People will optimize their year-end budget. No one can really predict it. I think that's why we cannot say anything on the fourth quarter. I think the general underlying trend is very good and probably in line with what you were describing. But for the moment, we can only really predict what is realistic for Q3. And I think the corridor is a realistic one. And if you look at the lower end, if you are more positive, I think the higher end is also doable for us.
I mean, most of the businesses don't give any guidance right now. And so I think that is also an expression of that we are really tied to the business. And that we control our processes very well and we have very strong relation to our customers. But clearly, the big announcing is what kind of second wave is coming. That infection numbers are picking up. That's obvious already. And this is what we're also expecting for the winter, especially. On the other hand, everybody get more used to the situation. So it's a glass ball now really if -- to answer what exactly is going to happen. I think 0 growth for the fourth quarter, that's too aggressive. That's not going to happen. We definitely hope that in beginning of next year, we come back to organic growth territory. If it's Q1 or Q2, it's definitely too early, it depends on what's going to happen in the winter flu season. But in general, I think -- and that's what we want to express today, we are really happy with our performance. And I have to say all of our teams made tremendous job here. And if I look on the leverage, again, I'm more than pleased that on the financial side, we are in a very, very good situation. That's also a reason why we are able to pay a dividend. And I think if you look on the media sector, besides Google, Facebook, et cetera, you won't see many companies who are able to pay a dividend this year. And I think this is also an expression of the strength of our portfolio and our strategy.
There are currently no further questions. [Operator Instructions]
That's it? Okay. Thank you very much. Have a nice remaining summer and stay healthy.
Bye-bye.
Bye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.