Stroeer SE & Co KgaA

XETRA:SAX

Earnings Call Transcript 2019-Q3

[Operator]

Dear ladies and gentlemen, welcome to the Q3 conference call of Ströer SE. At our customer's request, this conference will be recorded. [Operator Instructions] May I now hand you over to Udo Müller, Co-CEO and Founder of Ströer, who will lead you through this conference. Please go ahead, sir.

[Udo Müller, Founder, Chairman of Management Board & Co]

Thank you. Dear, ladies and gentlemen, thank you for joining our Q3 results call today. Together with my co-CEO, Christian Schmalzl, and our CFO, Christian Baier, I will present our quarterly results and business updates for the third quarter of 2019. As usual, I will begin our presentation with some comments on our main KPIs and then what has changed in the past 6 to 9 months and the strategic midterm opportunities we currently see. Christian Schmalzl will then dive deeper and give you more detailed business update. Christian Baier will present the details of our financial performance in the first 9 months of the year before we update you on our outlook for the full year 2019. Let me start with our results of the third quarter, which are a proof point for the strength of our core business as well as the structural shifts in the German media market with out-of-home being the winner of this change. Q3 2019 was again a strong quarter, also overcompensating several disposals, mainly in the digital out-of-home and content segment announced at our Q1 release, which had a total effect of around EUR 11 million revenues in Q3 and a total effect of EUR 39 million in revenue and around EUR 3 million adjusted EBITDA in the past 9 months of 2019. That said, our reported revenue grew by 7% from EUR 1.11 billion to EUR 1.19 billion in the first 9 months. This is based on an organic growth of 7.3%, pretty much in line with our mid-single-digit organic revenue growth expectations for the year. Adjusted EBITDA increased by 7% from EUR 364 million to EUR 389 million despite the already mentioned disposals. Our adjusted EBIT also showed a positive development and increased by approximately 5% from EUR 165 million to EUR 173 million. Adjusted net income increased by 6% from EUR 119 million to EUR 126 million, mainly in line with revenue growth. Operating cash flow in 9 months 2019, developed very strong, and was up by 23% from EUR 226 million to EUR 279 million. The net investments of around EUR 79 million are fully in line with our CapEx plan, however, approximately EUR 10 million below previous year due to a phasing effect. On a full year basis, we expect unchanged CapEx of around 6% to 7% of sales. Net debt, including lease obligations, for the first 9 months of the year is at EUR 1.6 billion, slightly below the level of 2018 Q3 closing date. Apart from our strong execution, the structural growth momentum for out-of-home is giving us sustainable tailwind. In the last 8 years, the share of out-of-home within the total ad market grew from 3.5% to over 7%. And also, the market entry of Google, Facebook, and meanwhile also Amazon has clearly changed the media landscape. Out-of-Home has constantly outperformed the overall ad market. Our leading position in the German out-of-home market has furthermore helped to also outperform all our peers. But it's not only the historic long-term trends that gives us confidence. As already mentioned, in the 2 last quarterly calls, the advertising market context has changed over the last 6 to 9 months. After the ongoing decline of trend over the last decade, linear television is stagnating when you look at Nielsen data and gross billings. The reported net number shows a full picture. TV is going backwards, a roughly 4% at the moment. And online and especially out-of-home has a clear structure market than us. Latest forecast from Nielsen and other market research companies are underlining this trend and we are convinced that out-of-home will continue to win market share and outperform that market in the next 5 to 10 years. On top, and for the first time ever, we clearly see the various components of what we call digital dividend for out-of-home are coming through. For many years, we've worked very hard on the preconditions, and now we can take the credit for our efforts. The first dimensions of this digital dividend is a significant growth of programmatic revenue for digital out-of-home and public video. We are waiting for that for a couple of years, but we are now getting for the first time ever revenues from completely new budgets that are allocated in the online segment, and since their DSPs and trading deck like MediaMath, The Trade Desk, Active Agent or Adform. We have connected our digital out-of-home inventory with the online ecosystem enriches this data and have been seeing now in the last 12 months, a constantly increasing cash inflow via programmatic. We are still at the very beginning, also historically leading that change. As you share of programmatic online advertising is 65% on a global level, and 37% in Germany, the programmatic share, and digital out-of-home globally, and in Germany is below 2%, when you exclude Ströer. And our online business, we are quite advanced in Germany with 45% programmatic. And in digital out-of-home, our market position is outstanding with 24%. We are currently also the final stage of connecting our inventory to the Google's DSP, DV360, which will at least double the access to potential programmatic demand. Product as well as tech connections are already finalized, and we expect the first beta test campaign before the end of the year. We are convinced that this move is the ultimate step towards integrating digital out-of-home to the online ecosystem, a historic game changer for our industry. The second dimension of the digital dividends are out-of-home as it constantly decreasing prices for digital out-of-home displays, which gives us now the opportunity to start the digitization of our premium broadside inventory on a bigger scale, since the digitization [ are in the ] locations via our public video products is almost completed. We saw the huge digital upside for the out-of-home industry already 20 years ago, when we introduced 9 square meter pulsar scroller to the German out-of-home market, anticipating that the premium pulsar scroller locations with the executive events, which also would have the necessary quality for digitization LED technology on a later stage. After 10 years ongoing strong [Audio Gap] competition for big pharma premium locations in Germany in the early '90s, we were very satisfied to secure a market share of more than 90%, in premium 9 square meter and bigger sites in cities with more than 100,000 inhabitants. The existing scrollers on these locations from today have always been a bridge technology until pricing for LED screens reached a tipping point for these sites into digital. It is a bit like a real estate developer, who anticipates 20 years in advance where the city is going to build its new airport and secured the relevant plots on time before the prices of the plots are rising. A massive part of our CapEx overall goes into the deployment of another 500 premium screens, indoor and outdoor in 2019, and we have just started to leverage our market position for Roadside screens. The third dimension of this digital dividend is a special payback, which you now get for our investment into our strong and nationwide local sales force. And we convert, an analog pulsar scroller into a digital screen, we leverage at the same time our local sales force by tackling primarily local and regional clients. They pay higher prices, get a highly individualized package according to their funds, and we can, therefore, at least triple or quadruple the income per location. More than 93% of the revenue on roadside screens comes from SME. The combination of leveraging our huge investment in acquiring approximately 90% of Germany Prime big forward locations 20 years ago, and leveraging our huge investment in building up the globally only national sales force for local advertising products at the same time is putting us in a pretty comfortable position for the upcoming years. Additionally, supported by incremental new programmatic revenue stream from online budgets. As part of our out-of-home plus strategy, we support our core business out-of-home with online and direct media in the area of national customers, thereby significantly increasing our share of wallet. However, the results of GDPR has changed the market and detected the challenges as a stronger focus on sales and performance in our direct Media segment. The door-to-door sales have been showing strong growth in the last 2 years, and we see sustainable and structural demand tailwind from clients for the next 5 years, as digitization of our sales process continue to driving margins. The contact centers focusing on sales and services sales, they also handle more complex services and integrate cross and up-selling have a strong customer base, which is growing into e-commerce and digital businesses. The integration of tech and data is key for us and leverages our good client access, and therefore, we are targeting cross-selling opportunities in our core business. Those 2 sales are engaged at direct media subsegments are very close to our core business and Ströer's DNA and performed beyond our original expectations. In contrast, fuel service contact centers show limited growth and margin potential and have only lower impact on group customer access. Therefore, we took the opportunity to take action based in the overall positive business performance of the third quarter to deconsolidate trial sites and bring that business into a joint venture structure with an industry partner going forward. We've taken also those service orientated businesses, we are a key account structure to clients, who want to get everything out of one hand. But the management of the contact centers and the responsibility to be the hands of a new partner. The impact of this measure will be approximately EUR 85 million revenue on an annualized basis. We expect to sign in Q4, closing probably in Q1 and, therefore, consider that part of the business as discontinued operations from Q4 onwards. As a result, we focus 100% on our core sales business and our Out-of-Home plus approach, and think that we are in an even stronger position for 2020, now to drive the profitable growth of the group and to leverage our unique position in the out-of-home market. Let me just give you a brief update on Statista and where we stand in building a DAS Unicorn. We are very satisfied with the development of Statista in the first 9 months of the year, and we are very confident that Statista will achieve our ambitious targets for 2019, and we expect revenues unchanged to be up by some 30%. For the coming year, we plan to hire additional 200 statistic data specialists, of which roughly 50% are to ramp up our sales organization. The opening of our representative office in L.A is a proof point for our aspirations to grow in U.S., and to make the U.S. our #1 market. Consequently, we are planning a third sales office in the U.S. in the course of 2020. In addition, we plan to capture important markets in Asia, with the opening of 2 additional Asian sales offices in 2020, 2021, and thus, increase our footprint in this dynamic region as well. Besides expanding our distribution network and our international footprint, we are also expanding and optimizing our product range. As a new product, Statista launched recently a database containing all relevant data from over 43,000 companies. Let me now hand over to Christian, who will explain in more detail where our operational focus is at, at the moment.

[Christian Schmalzl, Co]

Thank you, Udo. Also, a couple of strategic parameters have obviously changed over the last 18 months, we are quite consistent in our focus on operational excellence. For 27 quarters in a row now, we do not only deliver robust organic growth rates, but constantly outperform the ad market. As Udo pointed out, print and meanwhile, also TV are going backwards, and in the first 9 months of 2019, the total ad market is down by roughly 2.7% in net numbers, and we outperformed the market by roughly 10 points. The growing attractiveness of out-of-home advertising for both investors and advertisers is also driven by 2 interesting USPs of the channel. First of all, it's the most popular advertising media amongst consumers, as many pieces of research have been proven over the last years. People suffer more and more from the advertising clutter and content-driven media when they get disrupted actively. Out-of-home is always on and doesn't annoy or disturb the audience. People decide when and where they take notice, and not the other way around. And that's form of pull advertising in times of over penetration of consumers give brands more interested and sustainable platform. Secondly, no other medium is so complementary to online and even more mobile media. Smartphone has become the 24/7 access point to the Internet and out-of-home or the Outernet is the always-on and natural companion. That's the reason why companies like Netflix, Google, Facebook, Airbnb or Amazon spend more and more advertising money on out-of-home as their business becomes more and more mobile. And even more interesting, Facebook is promoting advertising research about cases in the U.S. themselves that combine Facebook with out-of-home is delivering stronger sales uplift than Facebook only. Udo already talked about the extremely positive development of programmatic revenue streams for our digital out-of-home inventory. This is another proof of the smart integration of out-of-home and online, and it's definitely no longer just an innovation case. It has become a constantly growing basic part of the business. And when you look at the year-over-year development of programmatic digital out-of-home on a weekly basis, you see that the overall trend is not only positive, but we have more and more weeks with clients allocating bigger budgets that used to be exclusively on TV before. And there is one aspect that clearly differentiates us from other out-of-home peers. No one else around the globe has a nationwide video network that reaches half of the national population. We have our products at the most frequented locations in the country, no matter if you look at Hamburg, Munich, Berlin, Frankfurt or any other city in Germany, the frequency at the train stations, which build the backbone of public video, is 3x to 5x higher than the -- in the respective high streets in the city centers. Within the out-of-Home segment, we have continuously improved our market share to meanwhile roughly 60%. The broad range of over 20,000 long-term portfolio contracts is a strong fundamental of our operations. And with our acquisition team, we add another 1,200 to 1,500 top locations on private ground every year. This gives us even more flexibility to digitize the right inventory to deliver top class advertising solutions for our clients, parallel to profitable allocation of CapEx with reasonable payback times. Our leading position across all-digital out-of-home categories, public video and premium sites indoor, roadside streets on highly frequented outdoor areas and city centers as well as digital signage solutions and point-of-sale or point-of-interest locations is unchanged. And as Udo said before, our indoor market is already quite developed, but the big opportunity now for roadside digitization is still ahead of us. We see the biggest sources of revenue in the local and regional media market. According to the probably best media survey and research on local advertising spendings from the consultancy, Schickler, more than EUR 7 billion from regional clients and SMEs go to traditional media like newspapers, TV weekly radio, printed directories and telephone books, or printed direct marketing and fares, all those media facing massive structural changes. To further penetrate this local and regional ad market, we continue to increase our overall sales force capacities and are on track. We don't see any need to change organizational structures or recruiting or hiring process. It's rather an optimization game for us now to constantly improve the effectiveness of our teams while increasing the number of salespeople. Looking at the first 9 months of the year and considering a strong national sales development, we generate currently slightly more than 60% of revenues via regional and local customers. Over 53,000 active clients with an increasing share of multiyear deals make us more and more independent from the short-term volatility of campaign-oriented large customers, even if upfront investments in the sales force are necessary. On the back of our strong out-of-home portfolio and together with our 2 support businesses, we've continuously improved our marketing and sales positioning over time. The nearest number across all sales houses in Germany show that we get closer and closer to the 2 large TV groups. Our combination of out-of-home, online, mobile and direct media and the fact that all areas are growing gives us confidence for the coming years. In addition, there is no other sales organization that is combining a leading national position with a full nationwide local sales infrastructure. We are the only player in the market currently with full access to every single client, from the largest to the smallest advertiser. Our consistent organic growth is also fueled by our efforts to constantly improve our integrated key account management. And we've updated the overview on our top customers based on the first 9 months of the year. We are maximizing our share of wallet by investing in incremental key account structures, which service marketing team, almost like agencies, deliver strategic advice and planning as well as creative or production services out of one hand by bundling our offerings commercially and by leveraging existing contacts and client insights, cross and upsell within and across our different media categories. Outperforming the total ad market as well as the peers within our media categories is the ultimate proof for us increasing our share of wallet. That said, we constantly review our products and make sure that we stay close to the needs of our clients. In the last quarter, we've invested significantly in localizing our flagship port to T-Online, and we have meanwhile 27 local city portals live to sell traffic in combination with out-of-home in an even smarter way to local customers. The slide you see an example for Cologne and many other cities are at live online, as you'll see. In parallel, we have gone through the final modernization process of the 2015 and 2016 when we had bought the portal and have started implementing a new content management system that allows us to run all of our publishing assets, [the online Justice Watson,] desired.de [ GIGA ] and all others on the basis of this one platform. As our organic growth momentum in Q1 and Q2 was stronger than expected, we decided to pull that initiative forward from 2020. Even if that puts the Q3 margin in that segment a little bit under pressure, we will benefit over time from taking this business structurally to the next level and opening it up for more local recurring revenues. So let me summarize our unchanged operational focus areas. First of all, we massively invest and prioritize the digitization of our infrastructure. In the first 9 months of the year, we've installed another 381 premium screens indoor and roadside on top of our existing portfolio. So we are slightly ahead of our plan to get 500 new premium streets by the end of this year. Secondly, the further ramp-up of local sales resources more than remains the #1 sales priority. We want to add 221 more people this year and are generally on track with 176 hires year-to-date. Leveraging tech and data in a smart way to increase sales is our third focus area. The further acceleration of tech sales and programmatic revenues for our digital out-of-home products remains key. In the first 9 months of 2019, we already generated 24% of public video revenues via DSPs and trading desk, one of the key reasons that public video grew beyond 30% and attracted completely new, non cannibalizing budgets. Finally, the combination of out-of-home with online and direct puts us in quite a unique position, and we work hard on increasing our client relevance and maximize our share of wallet, especially amongst our top key accounts. The further optimization of the online as well as the stronger sales focus of direct media segments will support this in the future. While the ad market is going backwards by 2.7% in terms of net numbers, we are growing more than 7% as a group and outperformed the market by roughly 10 points, parallel to our investments in long-term organic growth opportunities. Let's look in more detail at our P&L, cash flow and segment results, and I hand over to Christian.

[Christian Baier, CFO & Member of Management Board]

Thank you, Christian. Before I will run through our financials of Q3 2019, let me reiterate, as in the previous quarters, that 2019 will be straightforward as we will have only one set of numbers, including IFRS 16, and IFRS 11 and report consistently on the basis of continuing operations. Revenues of Q3 grew by 3% on absolute terms from EUR 387 million to EUR 399 million, despite the effects from disposals and digital out-of-home and content and direct media of a total EUR 11 million. Organically, we grew by 6.5% in a continued demanding German media market. Adjusted EBITDA increased by 4% from EUR 127 million to EUR 133 million, well in line with revenue growth. Exceptional items of EUR 5 million higher than in the previous year's period, mainly due to the described project to optimize the structure and the dialogue Media business. Depreciation and amortization was up by EUR 6 million to EUR 93 million due to an increased scope of IFRS 16, in line with business growth as well as technical effects from purchase price allocation. Tax expenses of a total EUR 3 million are on the same level as in the previous year. Adjustments to net income went up by EUR 8 million to EUR 27 million, primarily because of the increase in exceptional items and PPA-related amortization, as explained beforehand. With that, adjusted net income was up by 4% from EUR 41 million to EUR 42 million, in line with operational performance. Adjusted free cash flow for the third quarter 2019 developed very strongly and at EUR 41 million compared to EUR 19 million in Q3 2018. Against previous year's quarter, where working capital was affected by several phasing effects, working capital in Q3 2019, developed positively as planned. Tax payments of EUR 8 million, according to plan and expectedly below previous year's higher onetime tax-driven payment. Having said this, let me take the opportunity to reiterate our statement that we expect normalized cash tax at rate of 20% to 25% for the full year. Investments and our internal growth opportunities increased from EUR 29 million to around EUR 32 million, driven by the digitization of our infrastructure and investments into Statista, as explained by Udo and Christian. Our bank leverage ratio improved from 1.8 to 1.7 in the reporting period. For the full year, we expect to improve this ratio further to 1.4. As described before, Q3 2019 was again a strong quarter and showed positive sales and earnings momentum. We were able to sustain strong organic growth for both out-of-home media and digital out-of-home and content to 4% and 6%, respectively. For Direct media, organic growth was a remarkable 18.7%. And absolute terms, out-of-home media revenue grew by 5% from EUR 163 million to EUR 171 million, supported by all sales channels. Adjusted EBITDA of out-of-home media increased from EUR 75 million to EUR 77 million. The EBITDA margin stands at 45.1% on roughly the same level as in the prior year's quarter. The strong performance across all sales channels and the favorable product mix development in our core business, we are once again able to compensate the dilution effect of ambient media as well as the expansion of local and regional sales forces. Revenue growth of digital out-of-home and content was mainly triggered by a strong performance of our public video business as well as Statista, which overcompensated divestment effects such as twiago's poor Mobile Performance in the segment. All in all, reported revenue grew to EUR 134 million from EUR 132 million in the previous year's quarter. In Q3 2019, adjusted EBITDA of digital out-of-home and content was EUR 44 million, with a margin of around 32.8%, slightly below previous year's margin of 34%. Against the backdrop of the underlying strong performance in the quarter, we took the opportunity to optimize our [ G ] online operations, as described before, and invested into the sales footprint of Statista, when opening our Los Angeles Office. Reported revenue in the Direct Media segment was up from EUR 97 million to EUR 104 million, an organic revenue growth of 18.7% or 7% reported. This strong revenue development was fueled by an outstanding performance of our door-to-door business range, which was able to overcompensate changes in the segment portfolio, such as the known divestments of Conexus and Foodist. Adjusted EBITDA of the quarter was EUR 17 million, up by 25% versus the prior year quarter and with an EBITDA margin of 16%, remarkable 2.3 percentage points above Q3 2018 margin. Ranger, in particular, is responsible for this positive development. Let us now get to our guidance for the fourth quarter of 2019. Let me comment on our guidance for the fiscal year 2019. Given the strong order intake for the fourth quarter, we expect organic revenue growth at the upper end of the 3% to 7% guidance range that we previously communicated for the fiscal year as a whole. With that, let me close our presentation with a reference to our analyst presentations in Frankfurt and London on November 25 and 26 as well as the publication of our preliminary figures 2019 on March 3, 2020. Thank you, everyone. We are now happy to take your questions.

[Operator]

And the first question received is from Marcus Diebel from JPMorgan.

[Marcus Diebel, Research Analyst]

Yes, great results again. Maybe 3 questions from my side, and more a higher level, if that's okay. Well, firstly, you commented on the U.S. players focusing more on outdoor. You commented on the activities that you are doing with Google. What is the opportunity really from connecting their DSPs to yours in terms of the economics?For some reason, I hear music now. I'll just keep going. And the second question will be on the speed of transformation, the digitization of reversals, so what's the current share of online? And where do you want to go? And how quickly can it actually happen? And then lastly, for Christian...

[Udo Müller, Founder, Chairman of Management Board & Co]

Sorry, guys. [indiscernible] out. Can you repeat it, please?

[Marcus Diebel, Research Analyst]

Yes, for some reason I heard music for a while, while asking the question. Can you hear me now?

[Udo Müller, Founder, Chairman of Management Board & Co]

Yes. Yes.

[Marcus Diebel, Research Analyst]

Sorry. So again, so the first question is on the opportunity from Google and the connection of their DSP. What does it mean in terms of the economics? Are they -- what are potential margins of this? I mean, more conceptually, is it the same? Is it better? Is it worse than, I'm not sure, with other clients? [ Please ], a lot of volume coming through, probably, but what the economics on the margin side, I would be quite interested?Secondly is the speed of digitization of your billboards. What -- how should we think about it? I mean, what is the current share of revenues that are generated digital? And where should the share be in, let's say, 2, 3 years' time? And then maybe lastly, for Christian, I guess, more on the advertising market overall. Clearly, a lot of structural growth ahead of us, but how should we think about cyclical risks at the moment, given that the advertising market is down, the latest trends on the ad market, do you think is getting worse or better or flat from here? We do you see it?

[Operator]

Mr. Diebel, sorry for interruption. Just one second, we will continue in a second.[Technical Difficulty] Ladies and gentlemen, thank you for your patience, we go on now.

[Christian Baier, CFO & Member of Management Board]

Okay. So just going through your questions, Marcus, the first one regarding Google, DSP or double-click video 360. So I mean, we are just in the final phase of getting the connection a 100% automated. But the terms with them commercially are the same as with any other DSP. So they are connected to our supply side platform. They take share for their demand side services from the media buyer. And that's it, and we control pricing, and it's all based on our data. So the terms are not different than with any other demand partner. But of course, if you just look at the online market, they represent 2/3 of the demand. So difficult to say, if it's possible to get to that share as well as far as digital out-of-home is concerned, but it will open up definitely more sources of business and clients for us, but it's maybe a little bit too early to say, exactly what the precise potential is. I think on the ad market, in general, I think dynamic hasn't changed that much in Q3 versus the first half of the year. But I mean, it's fair to say that if you look at the official TV numbers reported by the 2 larger group that represent, I think, 80% of the TV market, I think they -- they are losing a little bit more revenues than in the first half of the year, I think print media declined as before. And as -- and those 2 media somehow represent 60% of the total market. That's why I would say, the general ad market hasn't changed that dramatically. And we don't see that it's getting really worse in the fourth quarter. But we also don't see any changes in the general trend that we've seen in the first 6 or first 9 months of the year. So we feel comfortable with what -- with the opportunities that the market offers for our business to continue our growth path. On the digitization and the speed of, I don't know, digital share at the moment, if you take the public video business in combination with the traditional out-of-home segment, and I think our share of digital of the total out-of-home universe is roughly 20%. Assuming that, first of all, public video is growing by far faster than the traditional part, and assuming secondly, that we deliver more and more roadside digital inventory, and I'd just take those 2 aspects in combination, I think, next year we will probably already get somewhere between 22% and 24% share of digital out-of-home. And depending on the speed of digitizing roadside inventory, I guess, it can be in 2 to 3 year time, it can be already 30%. But it's driven, I think, by the fact if we can even accelerate the public video growth versus where we are now, driven by programmatic, and if we maybe also accelerate the speed of deploying digital screens faster than we've done it in the last 2 or 3 years. I mean we just started with it.

[Udo Müller, Founder, Chairman of Management Board & Co]

By the way, we don't believe that the market is declining. Nobody knows today if the market is declining or not because Google, Facebook and Amazon don't deliver any national numbers. If you -- the first year, the market is declining, but only if you look on traditional media. So if we -- I mean, we experienced quite a strong demand throughout the year, and we don't see any changes for next year. So we clearly see a big structural shake up. We already talked about it for many years. But now it's completely visible on TV and free-to-air TV and print is going down. And the radio stagnating and online and out-of-home is growing. But only out-of-home is integrated in the official statistics which you can see. So in fact, nobody knows if the market is growing or shrinking. We believe that the market is at least stable. But I think more realistic is that the market is slightly growing, unchanged, because you get a good feeling if you talk with the customers, you talk with the agencies. But many of the customers, if the agencies don't know any more if the market is growing or shrinking, because there's a lot of direct spend between the big America, the big GAFAs and the big advertisers. And if you talk to the big advertisers, you don't see any market declines. Everybody's talking about market decline. We think this nondebt. And one last comment to Google, this is clearly a landmark situation because the majority of the business in the future will come clearly, from the digital side, the majority of digital will come from programmatic trading. And Google is controlling in online almost 2/3 of the whole demand. So this is clearly a very strategic situation. And we already discussed it a couple of weeks ago with what can we compare it? And some people said you can compare this with the first licenses for private TV in Germany as actually [LMPV1] came in the market. But don't forget, this is now a preliminary [ preserving] connection. So it will take another, at least, let's say, 12 months, when you have it fully integrated with a standard solution. But this is the first step, and we are expecting the first actually turnovers maybe already this year. But this is clearly a really a landmark situation for the integration of Out-of-Home and the overall digital environment.

[Operator]

And the next question received is from Annick Maas from Exane BNP Paribas.

[Annick Tonie Maas, Analyst]

My first question is with regards to out-of-home advertising. I see that street furniture and transport were actually down in the quarter. So my question is here, do you attribute this to structural reasons or cyclical reasons? My second question is on Statista, you've highlighted lots of initiatives to further ramp up Statista. Shall we take this as a signal that you're looking to sell the company by the start of next year once these initiatives have started coming through? And my third question is on public video for the third quarter. If you could just highlight us, how much of the growth is driven through volumes and how much is driven through pricing, please?

[Udo Müller, Founder, Chairman of Management Board & Co]

Let me take the Statista question first. No. No. This is a misunderstanding. We are fully on track. We have execution plan to achieve EUR 200 million in 2022, 2023. And this is the earliest moment when we think about the -- actually deploying the real value of the company. So this is -- Statista is going to be a fully global business. And this is online now exactly with our growth story for Statista. So nothing will happen in the next 3 years.

[Christian Schmalzl, Co]

Okay. And on the other 2 questions, out-of-home, street furniture in Q3, it actually really just shifts between quarters driven by a couple of campaigns. So I think that you will see the reversed effect probably in Q4 because what we -- from what we see, October, November was overproportionately strong in that segment, so nothing structural or cyclical. It's just normal shifts between quarters in a subsegment of a segment, which is rather small. So we talk about, I don't know, EUR 1.5 million or something like that, which makes the impact.And public video, assuming that the top line growth is above 30%, and we've increased prices this year by roughly 6%, I think the growth of the category is by -- well, 85% or so driven by demand and 15% by price. So I think quite a comfortable situation that we increased prices probably 3 to 4x above the normal inflation level, but still demand is growing massively.

[Annick Tonie Maas, Analyst]

That's great. And just looking at pricing for public video going into the next 2 to 3 years, do you think the 6% price rise per year is a sustainable level? Or do you expect more of the growth being driven by volumes as programmatic takes off?

[Christian Schmalzl, Co]

Well, I think when you look at the last 2 or 3 years, the price increases have been always around that, between 5% and 7%. And we haven't published the ultimate rates for next year yet but just are under way, and we work with similar rate cards increases for 2020 as in 2019. So difficult to say what we'll do in -- for '21, '22 already today, but I would assume, if the demand doesn't change, we will continue with that. And we still think that, yes, we can get to the same or similar growth rates in public video as this year.And as Udo said, it's a bit difficult to predict how programmatic will develop because, I mean, we've seen that bigger cash inflows for the first time in end of Q3, beginning of Q4 last year. So it's now 4, 5 quarters. And still early days, I think, if you look at the overall trend. So there might be quarters where we are even stronger, and there might be quarters where there's a little bit less demand. But I would say the midterm trends on demand and also our ability to improve pricing look quite robust at the moment.

[Operator]

And the next question we received is from Julien Roch from Barclays.

[Julien Roch, MD & European Media Analyst]

I'll go for 4 questions, but they're all short number question. Could we get a breakdown of out-of-home revenues between Germany and international and video between online and out-of-home so we can get a number for German out-of-home? Something you're not disclosing but should because there's a lot of slides about German out-of-home, but we actually don't know the numbers. So both revenues and organic, if possible.Statista, could we get revenue for Q3 and organic? Because you're now guiding to 30% growth, but at the first half, you said EUR 60 million of revenue in euros, which was 22% growth, so it looks like Statista has accelerated. That's my second question.My third is on the deconsolidation of call center. You said the impact would be EUR 85 million on revenues. But can we have the impact on EBITDA?And fourth question is on Page 16. Your sales force going for 434 people in 2016 to 1,320 in 2020, so 3x more people. Can we have the impact on margin comparing '16 to '20?

[Christian Schmalzl, Co]

Okay. Just we are looking at the details. Maybe on your first question, if you look at the video subsegment, I think, meanwhile, 85% of the revenues come from public video and only 15% in that subsegment come from online. And when I look at traditional out-of-home, I think Poland and blowUP in combination in the first 9 months was roughly EUR 50 million, which leaves EUR 590 -- sorry, EUR 520 million for Germany, which means 90% of that segment is Germany, including public video. Does it make sense to you?

[Julien Roch, MD & European Media Analyst]

Yes.

[Christian Schmalzl, Co]

Call center, your last question. So on that service-oriented businesses, we operate at the moment at mid-single-digit margin. So meaning, we are currently working on the final carve-out because it also is driven by the fact what kind of services do we charge to that company because we -- the buyer asked us to provide a couple of services in key accounting, invoicing and so on. But yes, mid-single-digit margin means something between EUR 4 million and EUR 6 million EBITDA on the basis of EUR 85 million revenues. Preliminary numbers at the moment. We are working on that term sheet at the moment.Statista, I think it has slightly accelerated versus the first half of the year. And at the moment, we target for roughly EUR 63 million annual revenues. So I think Q3 was, as you said, slightly ahead, 5 or 6 points better than the first half of the year. And we assume that Q4 will also be at least on that level. I think now you need to help me with the second question.

[Julien Roch, MD & European Media Analyst]

So the last question was on Page 16 of the presentation. You highlight your whole investment in regional advertising by having a very, very large increase in your sales force. So your sales force goes from 434 people in 2016 to an estimated 1,320 in 2020. So you're going to multiply by 3 your sales force to cater to regional advertisers. And I wanted to know the impact on margin, which is quite difficult because in 2016, it was pre-IFRS 16, and in 2020, it's going to be post-IFRS 16. So they're not comparable. But on a comparable basis, does that mean flat margin or decreasing margin?

[Christian Schmalzl, Co]

I think we'll get to somehow flattish margin maybe. So the impact might be plus/minus 0.5 percentage point. It's quite difficult to isolate this because it's also driven by the fact how many revenues we generate with the people when they come to our organization throughout the year and how many months we ultimately have all of the people on the payroll. So my -- I would -- at then EUR 5 million, more or less, revenues on a national level can overcompensate it. So at the moment, I would say, flattish margins or maybe 0.5 percentage point less based on the investments, but that's the corridor we are currently looking at, so no bigger impact of that.

[Operator]

Next question received is from Patrick Schmidt from Warburg Research.

[Patrick Schmidt, Analyst]

First one would be, could you explain the strong performance in Direct Media a little bit more? So what were the drivers for growth and especially for profitability? So is that linked to consolidation effects or some sort of seasonality maybe? Or how should we think about that segment going forward?And following on this, secondly, maybe you could provide some more details about the divestments. Are they linked to any payments, cash flows, P&L impact? I mean you acquired it, more or less, not that far ago. So might there be some goodwill impairments we might have to consider?And last question, generally, on tobacco, again, there were some discussions recently about some law changes. So could you maybe give us your prospects about this development in terms of the e-cigarette that might be excluded from that? So is there -- do you see more downside or even upside potential from that?

[Udo Müller, Founder, Chairman of Management Board & Co]

Yes. Let me take the cigarette, my favorite issue for many years. More than likely, for now, it's going to be a ban for traditional tobacco advertising in 3 years from now, so looks like that 2020, 2021 will be unchanged. In 2022, looks like that e-cigarette is -- would not be banned. So in total, we see neutral, the situation, with no downside or upside for cigarette advertising as it was anyway cut down year by year. And e-cigarette advertising is growing. So in total, we think it's neutral for us.

[Christian Schmalzl, Co]

And on the Direct Media segment, I mean, what we always had as the main target, and I think we've been working more aggressively on that, it's focusing really on sales and more complex solutions for customers that are higher paid than simple service revenues. And I think that focus have improved the business. It's fair to say that we are also running against a weaker Q3 last year, that was just after the GDPR event. And the following weeks last year have been probably less challenging to beat, that's fair to say.And I think that's, in total, also the reason why we, going forward, want to focus on the sales-oriented capacities and keep a minority stake in the service locations to being able to offer it to customers in case they want to have it coordinated out of one hand. But the margin profile, and I think that's the P&L effect, the EUR 85 million revenue, roughly, preliminary, go hand-in-hand with probably EUR 4 million to EUR 6 million EBITDA. And that's clearly below our group margin. So the overall group margin will clearly improve. But we will disclose the precise detail as soon as we have signed the deal in Q4 and then give you the exact numbers of what the impact on the P&L.So for the moment, we can just give you the rough numbers and I think the logical outcome that it will improve the group margin by more than 0.5 percentage point. I think it will focus all of what we do even more on sales-oriented topics, which is the core DNA of the company. And I think that's also based on the discussions we have with clients. Yes, they book on top service capacities, but the stuff that really differentiates you from competitors that creates deeper relationship with clients is helping them with sales and tech integration. And I think that's what we want to focus on going forward with that segment.

[Operator]

The next question is from Christoph Bast from Bankhaus Lampe.

[Christoph Bast, Analyst]

Three quick questions from my side. Firstly, could you provide us with the organic growth numbers of display and digital marketing services in Q3?Secondly, could you explain a bit in more detail the moving parts behind the only modest EBITDA development in digital out-of-home and content? So assuming that video, Statista, Regiohelden and also BodyChange reported a rather satisfying result, it looks to me like T-Online, as you already mentioned, but also StayFriends must have had some headwinds on the earnings side.And the third point, one follow-up on Slide 5 of your presentation. And I think you are comparing net advertising revenue growth numbers of TV and print with gross -- net -- gross advertising numbers in out-of-home. So could you share with us the net advertising revenue growth in out-of-home for the first 9 months? That would be it.

[Christian Schmalzl, Co]

Okay. First of all, maybe on the margin question in the digital out-of-home and content segment, as you said correctly, public -- our public video performed very well, just as Statista, and the margin drop came from -- actually from our owned assets. So in general, the ad sales business for third party was okay, but investing on top in local websites of T-Online and building the editorial teams and the tech setup for 27 local versions of it without any revenues in the quarter when you launch it, that's where the margin drop in the segment comes from.And just one second on the display number because that's also in line -- or coming with that initiative around moving the whole T-Online platform on a new content management system. It's slightly positive but not that much [ above ] 0. And I think the fact that it's not plus 4% or plus 5%, it's really driven by that T-Online impact.

[Christoph Bast, Analyst]

Okay. And Digit Marketing Services, DMS?

[Christian Schmalzl, Co]

Around, I think, 6.5% to 7%. And BodyChange is already out of the calculation because I think the disposal was back in 2018 -- end of 2018.And just because you asked for StayFriends, stable development versus the previous year. So I think at the moment, the core of the platform, so the StayFriends platform, is going backwards by 2%, revenue and profit. But at the same time, we've launched last year a spin-off called Liebes Grindr. It's a dating platform for adults 50 plus. So unfortunately, you are not yet in the target group, so it's difficult for you to register. But if you go on the website, you'll see we have, meanwhile, more than 200,000 registrations and 15,000 paying subscribers. And that's part of our initiatives to stabilize and develop the StayFriends universe for the future. So the combination of the 2 things is stable. That's why StayFriends has no negative impact on the P&L, and that's -- it's really coming from the investments and the reorganization of T-Online. Does it make sense to you?

[Christoph Bast, Analyst]

Yes. Perfect. Just the last question with the net advertising revenue growth in out-of-home?

[Christian Schmalzl, Co]

Yes. I mean it's always -- when you assume that we are 60% of the out-of-home market and our combination of -- and we are maybe around 7% overall, and we think we clearly outperform the rest of the market and grow twice as fast as the rest of the market, the out-of-home net number should be around 5.5%.

[Christoph Bast, Analyst]

Okay. And you say, first 9 months, you were up 7%. Because if I compare the organic revenue numbers you provided during the last presentation, I think it was 4.5%, Q1; 7.5%, Q2; and 4% in Q3. And I struggle to add this up to 7%. Or am I misunderstanding something here?

[Christian Schmalzl, Co]

Also the public video revenues, the traditional [ one in ] areas. The net statistics of the -- well, of the out-of-home association. I think that's always the missing bit when you look at the total out-of-home universe.

[Operator]

The next question received is from Catharina Claes from Hauck & Aufhäuser.

[Catharina Claes, Analyst]

I'd like to -- for you to highlight the disposal of call centers. You said that you will -- mentioned deconsolidated business in Q4 already. Does that mean that we -- that you're going to exclude the revenue from Q4 already or just from Q1 when it's actually out of the business? Yes, and I think that actually probably all my other questions have been asked already, except for this one.

[Christian Baier, CFO & Member of Management Board]

Yes. I'm happy to take the question on the disposal of the call center or to be more exact, that we're selling. Actually, we're looking at a joint venture structure, so we are selling 50% of our share there. So what that means is we will list it. So we will have the closing, as Udo said, in Q4 this year. The signing and the closing probably in Q1 next year. That means that we will list it as discontinued operations in Q4 and the full year 2019. So we'll take those numbers out of the P&L in terms of top line and also EBITDA.

[Catharina Claes, Analyst]

Okay. And then just to confirm whether I got it correctly. The organic growth in Q3 must have been 8.4% when I -- from the press, look that I had. Is that correct then?

[Christian Baier, CFO & Member of Management Board]

Are you referring to the business overall or to the call center?

[Catharina Claes, Analyst]

Yes. Top line. No. No. Sorry, top line, [ generally ] group.

[Christian Baier, CFO & Member of Management Board]

Top line for the business overall, organic revenue growth was 6.5% end in Q3.

[Catharina Claes, Analyst]

6.5%. Okay.

[Operator]

And the next question received is from Nizla Naizer from Deutsche Bank.

[Fathima-Nizla Naizer]

I guess I have 3 final questions. The first is on out-of-home media. Q3 organic growth, 4%, was similar to Q3 last year. And last year, we saw a nice acceleration in Q4. So looking into this year, do you think we can see a similar trend where Q4 would be an acceleration from the Q3 levels reported? And linked to that as well, in Q3 this year, Christian, could you give us a breakdown as to how National grew versus the local and regional as you've previously sort of disclosed to us?My second question is on digital out-of-home. Could you remind us what the fill rates currently are at the moment and how far you think these fill rates can go even with sort of Google coming into the picture starting next year? And my last question, you've sort of streamlined the revenue guidance for the full year. Could you remind us what your EBITDA growth target would be for the full year on a group level as well, please?

[Christian Schmalzl, Co]

On your first question, I mean, we've guided for the full year. If you assume that in -- for the full year, we are at the upper end of our corridor, then realistically, Q4 will be probably, in the out-of-home segment, better than Q3. So how much better we will see, but we'll expect a stronger Q4 than Q3 for the out-of-home business.And fill rate in digital out-of-home at the moment is 34%. I think it's -- last year, at that time, we've been at roughly 32%. So we've increased prices, have more demand, but we've also added a couple of new screens to broaden the inventory and have more capacities. So the other way around. Even if massive demand from Google comes in, we have still 65% unfilled capacity going forward. And then on top, we have, well, probably 6% price increase and also more screens that we deploy to make sure that we always have more than enough capacities, at least for the next 5 to 10 years, I would say. But we're happy to report one day that we have fully sold out. I think that would be a nice problem to have.

[Christian Baier, CFO & Member of Management Board]

I think, yes, on the guidance for the full year, what we did is we made the guidance on organic growth a bit more specific simply because we now have certain visibility on the order intake in Q4. That's why we said that we're very confident that we end up at the upper end of the corridor, the mid-single-digits corridor, defined between 3% and 7%.And for the EBITDA development, simply because our visibility on top line is slightly better, obviously, we hope to go into a similar range, but we leave that guidance where it is.

[Fathima-Nizla Naizer]

Great. And if I could just confirm the national versus regional local growth in the out-of-home media segment, something, that would be great.

[Christian Schmalzl, Co]

If you look at the total growth, I think 2/3 at the moment come from the regional and local business and 1/3 of the national. And if you look at the regional local growth again, then half is coming from really the long-tail SME business and half is coming from regional customers.

[Operator]

[Operator Instructions] And the next question received is from Stephan Klepp from Commerzbank AG.

[Stephan Klepp, Head of Small and Mid Cap Research]

I have a rather fluffy question, but I'm hoping for unfluffy answer. And going back to what other people have referred to, if I look and think about 2020 -- 2019, I don't really care much about at the moment. If I think about 2020 and see that you have been growing organically plus 7% throughout the first 9 months and the last quarter is going to be strong too, and we see the recession in Germany, we see all your strategic initiative, how should we think about growth going into the next year when you have a relatively high comparable basis? And we all understand the argument that you are the structural winner and continue to be a structural winner in terms of advertising. But in absolute terms and absolute growth terms, what do you think Ströer is going to achieve in 2020?

[Udo Müller, Founder, Chairman of Management Board & Co]

We always said an average 5% for the next 10 years. This is unchanged.

[Stephan Klepp, Head of Small and Mid Cap Research]

How can that be unchanged when there's a recession in Germany in production, which is trickling down to the service sector and as well maybe to the consumption sector? I don't see that for the short term.

[Udo Müller, Founder, Chairman of Management Board & Co]

Yes, but we already also answered this question by, first of all, clearly focusing on our regional business, which is more or less untouched from any recession. Second, everything that we see today in deterioration and the overall economy is very much focused on exports. And I think it's also a long way down. This is going to end up really in change of consumer behavior, et cetera. So I mean we have now already all our talks with some big clients. So next year, we don't see any impact from that in the local clients at all. Plus, we see strong structure tailwinds. So that's why we don't expect any changes for next year.

[Stephan Klepp, Head of Small and Mid Cap Research]

And if you think about those 5% that you mentioned, how would you break that down over the 3 buckets of business that you're having?

[Udo Müller, Founder, Chairman of Management Board & Co]

That's too early. It's too early. If we would know that, then we would not sit here anymore. Probably I'll make a lot of money with investment.

[Christian Schmalzl, Co]

Not a fluffy question, you're just fishing for more guidance, which we won't give you.

[Stephan Klepp, Head of Small and Mid Cap Research]

No. I'm not fishing for more guidance at all. I'd rather like to understand how your discussions with clients are because at the moment, people are worried that if we see -- as you say, recession is probably export-driven, but if this becomes a more German topic, then people are concerned that you probably are not able to hold up to the 5% growth. I may rather want to understand your view on that. I have my view on your growth. I don't need any numbers on guidance for 2020 now. But I want to understand what's going on in Germany really at the moment. And you mentioned your talks to clients. Can you elaborate on those? Can you elaborate on those forward-looking conversations with your big clients that you're having at the moment?

[Christian Schmalzl, Co]

Yes. We don't see that they have, in general, less total budget, but we see that they invest general relatively more in digital media. I think that's one of the reasons why that connection from public video to the online programmatic world helps. And we see that in general, they discuss with us what the alternative to linear television and print are and where we can help them. That's why we don't see that there is less money necessarily in the pot, and we see that we have positive, well, areas where we have reasonable discussions to develop the business together.And I think whatever -- even if there would be a little bit less in their pockets, I think still the relative growth opportunities that we have just through the shifts of how advertisers allocate the budget, those midterm trends are fully intact, as Udo said, and the local business is unchanged. And we -- the other way around, it's great to have 53,000 customers. But the other way around, we are not happy that we don't have the other 547,000 yet, and we can work on them. And the reason that we don't have them is that we had no resources to visit them and talk with them about our products.

[Udo Müller, Founder, Chairman of Management Board & Co]

I mean, I do it now for almost 30 years, and we saw quite some downturns in these 30 years. And this feeling now is completely different. It's -- we don't see any -- and we see quite in advance because I think people are questioning is -- it depends on the -- depends obviously on the industries and especially in some more, let's say, luxury areas, et cetera, especially [ Aspen], but there's nothing to see up to now. So that's why we exclude -- if there's another external shock like a financial crisis and the banks f**k up the overall economy, then we are quite confident that for the next 12 months, we're going to see a pretty stable, strong and satisfying trading environment.

[Stephan Klepp, Head of Small and Mid Cap Research]

Let's not hope for this external shock, please. And if I look then to margins, so with the deconsolidation, you say that's going to bring you 50 basis points. And then from the mix perspective, if regional is growing with higher margins, if the programmatic advertising is growing and your digital displays are growing, so we should assume that the margin trend should remain rather positive as well in next year then.

[Udo Müller, Founder, Chairman of Management Board & Co]

This is also too early because at the same time, we set the things Christian Baier started. We were launching a couple of initiatives for automatization of our processes. And this will also cause some investments in our processing landscape. So this is something that is also important to us because if you talk about digitalization, most of the companies only think about the products but not about structures and processes. And this is something what we have clearly a road map for the next 3 years. And so it's too early now.I mean, we don't think the margins go backwards. If the margins are going to be better, let's see. I mean, all in all, we are positive for what we see for the next year. And I think this is -- we don't want to say actually any more than that. For the last, I think, 25 quarters, we delivered growth quarter-on-quarter. We always fulfilled and overfulfilled our guidance, and that's actually our target also for next year.

[Stephan Klepp, Head of Small and Mid Cap Research]

Okay. Perfect. Fair enough. Can I have a last number question. I'm very sorry for that. Can you explain to me what your line other operating income includes? Because it's always a quite high line and that as well contributes quite a couple of percentage points to margins. What's in there actually? I don't know. I can't understand that from your notes in your financial disclosures.

[Christian Baier, CFO & Member of Management Board]

So Stephan, indeed, it's kind of like a bucket where we have different things in there, all rather minor things, but it ranges from accruals to different other things. I think...

[Stephan Klepp, Head of Small and Mid Cap Research]

It's EUR 40 million in total on an annual year. So it's not minor things in my opinion. So that's why the understanding...

[Udo Müller, Founder, Chairman of Management Board & Co]

Compared to EUR 1.6 billion...

[Christian Baier, CFO & Member of Management Board]

No, I agree with regard to the overall number, just kind of like what's behind there, I think...

[Udo Müller, Founder, Chairman of Management Board & Co]

We can just deliver you a detailed breakdown if you're interested.

[Stephan Klepp, Head of Small and Mid Cap Research]

Yes, please.

[Christian Baier, CFO & Member of Management Board]

Okay. Will do.

[Operator]

And the last one for today is a follow-up from Marcus Diebel from JPMorgan.

[Marcus Diebel, Research Analyst]

Just wanted your thoughts since we have you on the phone. I mean you commented a lot on TV today again. In the past, you've been proven good execute on buying, let's say, unlost businesses, yes? And you have been answered several times a question on a potential merger with TV operators in Germany. At that time, my impression was that this was a category. No. Has anything changed to this given the developments in the last 6 months?

[Udo Müller, Founder, Chairman of Management Board & Co]

No.

[Marcus Diebel, Research Analyst]

Okay.

[Udo Müller, Founder, Chairman of Management Board & Co]

Shortest part of an answer. The business -- when we acquired T-Online, our expectation was it's going to be flat for the next 10 years. And we knew we were going to have a couple of strategic advantages in combining it with our digital out-of-home and using the content for our city contracts, et cetera, et cetera, et cetera. So we, I mean, clearly see this is a falling knife. And nobody knows where this is going to end. Maybe in 5 or 6 or 10 years, we have like the T-online situation where you have a flattish outlook. Maybe it recollects. Nobody knows that. One thing is for sure, advertising for free-to-air TV will go down. But this is too risky for us.And we have a great business. It's growing the structure, they're not by chance. It was not because we are so smart. By chance, we're sitting on the right asset now. And we just started our digitization of the roadside and -- our roadside infrastructure. So this is a big adventure of what we are facing for the next 10 years because the business will look completely different in 10 years than now completely. And this is a lot of work, a lot of execution, concentration to do that properly. And we didn't even really started with that. Now what we see up today in digital out-of-home is inside of [ radio ] stations and others station, et cetera. But the real out-of-home advertising business is not digitalized up to now. So we are completely focused on that. And we believe that we can nowhere create more value than there, and it would be crazy to combine such a big problem to our overperforming business now.

[Christian Baier, CFO & Member of Management Board]

Maybe one last comment regards regarding Stephan's question about operating income. I'm just looking at our annual report, 2018, and we believe the numbers will not change dramatically. So the EUR 40 million you just mentioned, there is indeed different positions in there. It ranges from income from the reversal of provisions and derecognition of liabilities, and to the income from the reversal of earn-out liabilities, to many other different things that basically, Page 110 in the annual report, I think that already gives quite a bit of transparency of where this EUR 40 million come from.

[Operator]

Are your question answered, Mr. Diebel?

[Marcus Diebel, Research Analyst]

Yes, yes.

[Operator]

And we received a follow-up from Stephan Klepp from Commerzbank.

[Stephan Klepp, Head of Small and Mid Cap Research]

Me again. Thanks for clarifying that. I am aware of that page in the annual report.Just other topic because I will probably try to answer those questions on the other operating income in the one-on-one telephone conversation with you guys. Can we talk about AsamBeauty because everybody talks about Statista? So what are your plans with AsamBeauty for now? Because here, the growth is quite good. The margins are not too shabby. If I'm not wrong, it's around 30% EBITDA margins as well. So -- and it's strongly growing. So what are you going to plan to do with AsamBeauty?

[Christian Schmalzl, Co]

Well, I think at the moment, we grow it further. We -- I think we diversify the business in Germany where, on the one hand, the e-commerce part gets bigger and bigger and also the presence with bigger retailers is growing. And we've also started internationalization, the internationalization of the business. I think the first starting point, and I think that already started when we bought the company, was via telesales because that's an easy way without any risk to go to the U.S., to go to Asia. And we are currently internationalizing also the e-commerce business. I think, currently, we are just deploying a new or a slightly localized platform for the Netherlands. And I think all the key drivers for growing the business on the basis of the KPIs that we've seen in the last 2 or 3 years is -- are quite intact for the next 3 to 4 years. And -- but we have no plans to sell anything at the moment. And that's also the agreement that we have with our partner there, with Marcus Asam, who has founded the company, and he still owns 49%. He's still very motivated. He's developing new products. He's pushing telesales. We help more on the e-commerce side and supporting the retail arm with marketing support to support then also the sell of a product. And we are happy seeing the asset growing for the next 2 or 3 years. And we will probably do a review and see what both shareholders plan to do with the assets.

[Stephan Klepp, Head of Small and Mid Cap Research]

Can you remind me of the top line? Is it EUR 85 million this year? Is it the right number that I remember?

[Christian Schmalzl, Co]

Yes. That's the number that we communicated, I think, in the half yearly results and on the basis of what we see. Plus/minus EUR 1 million, that is where we will be at the end of the year.

[Stephan Klepp, Head of Small and Mid Cap Research]

Yes. And last question there, your partner, Mr. Asam, how old is he at the moment? Is he rather young or rather old? Has he an agenda?

[Christian Schmalzl, Co]

He's my age, so I'll leave it up to you to judge that positively or negatively.

[Stephan Klepp, Head of Small and Mid Cap Research]

Obviously positively, so I would say rather young.

[Operator]

And the last one is from Catharina Claes from Hauck & Aufhäuser.

[Catharina Claes, Analyst]

Can you please highlight a bit more on how public video was doing in Q3? And maybe also give actual figures on that for revenue.

[Christian Baier, CFO & Member of Management Board]

Public video?

[Catharina Claes, Analyst]

Yes. Exactly.

[Christian Baier, CFO & Member of Management Board]

Only Q3, we were around EUR 28 million, EUR 29 million revenues compared against a little bit more than EUR 20 million last year.

[Operator]

There are no further questions. I hand back to the speakers.

[Christian Schmalzl, Co]

Okay. Many thanks for your time, and hope to see you all soon. Have a good day. Take care. Bye-bye.

[Operator]

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.