Ströer Out-of-Home Media AG Cologne, Germany Price Range: E17.00 to E24.00

Transcription

1 PROSPECTUS DATED JULY 2, 2010 NOT FOR GENERAL DISTRIBUTION IN THE UNITED STATES OF AMERICA Prospectus for the public offering of up to 16,176,471 newly issued ordinary bearer shares from a capital increase for a contribution in cash to be approved by an extraordinary general shareholders meeting of the Company and of 4,156,238 newly issued ordinary bearer shares from the holdings of the Selling Shareholder deriving from a capital increase from contingent capital due to the exercise of warrants and of up to 2,033,271 existing ordinary bearer shares from the holdings of the Existing Shareholders to cover a potential overallotment and for admission to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of 23,552,000 existing ordinary bearer shares (existing share capital) and up to 16,176,471 newly issued ordinary bearer shares from a capital increase for a contribution in cash to be approved by an extraordinary general shareholders meeting of the Company and of 4,156,238 newly issued ordinary bearer shares from the holdings of the Selling Shareholder deriving from a capital increase from contingent capital due to the exercise of warrants and of up to 2,033,271 newly issued ordinary bearer shares from a potential capital increase from authorized capital to redeem the share loan of the Existing Shareholders which has been granted to cover a potential overallotment each such share with no par value and a notional value of A1.00 and full dividend rights as of January 1, 2010 of Ströer Out-of-Home Media AG Cologne, Germany Price Range: E17.00 to E24.00 International Securities Identification Number (ISIN): DE German Securities Code (Wertpapierkennnummer) (WKN): Common Code: Trading Symbol: SAX Joint Global Coordinators & Joint Bookrunners J.P. Morgan Morgan Stanley COMMERZBANK Co-Lead Managers Crédit Agricole CIB WestLB AG

2 CONTENTS SUMMARY... 1 Overview Summary of Our Key Strengths... 2 Summary of Our Strategy... 2 Recent Developments Auditors... 2 Summary of the Offering... 3 Selected Financial and Operating Information Summary of the Risk Factors GERMAN TRANSLATION OF THE SUMMARY OF THE PROSPECTUS ZUSAMMENFASSUNG DES PROSPEKTS Überblick Zusammenfassung unserer wesentlichen Stärken Zusammenfassung unserer Strategie Jüngste Entwicklungen Abschlussprüfer Zusammenfassung des Angebots Ausgewählte Finanzangaben und operative Informationen Zusammenfassung der Risikofaktoren RISK FACTORS Risks Relating to Our Industry Risks Relating to Our Business Risks Related to Our Capital Structure Risks Related to Our Shares, the Listing and Our Shareholder Structure GENERAL INFORMATION Responsibility Statement Purpose of this Prospectus Forward-looking Statements Sources of Market Data Documents Available for Inspection Currency Presentation THE OFFERING Subject Matter of the Offering Selling Shareholder, Existing Shareholders Price Range, Offer Period, Number of Offered shares, Offer Price and Allotment Currency of the Securities Issue Expected Timetable for the Offering Information on the Shares Transferability of the Shares Allotment Criteria Preferential Allocation Stabilization Measures, Overallotments and Greenshoe Option Market Protection Agreement, Limitations on Disposal (Lock-up) Admission to the Frankfurt Stock Exchange and Commencement of Trading Designated Sponsors Interests of the Parties Participating in the Offering REASONS FOR THE OFFERING AND USE OF PROCEEDS i

3 DIVIDEND POLICY General Provisions Relating to Profit Allocation and Dividend Payments Dividend Policy and Earnings Per Share CAPITALIZATION Statement of Working Capital No Significant Change DILUTION SELECTED FINANCIAL AND OPERATING INFORMATION Selected Consolidated Income Statement Data Selected Consolidated Data from our Consolidated Statement of Financial Position Selected Consolidated Statements of Cash Flow Data Summary Operating Segment Financial Data MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Non-IFRS Financial Measures Segment Reporting Summary Financial Performance Information Key Factors Affecting Our Financial Performance Period-to-Period Financial Performance Analysis Liquidity and Capital Resources Financial Obligations Contingent Liabilities Off-Balance Sheet Arrangements Quantitative and Qualitative Disclosure of Market Risk Critical Accounting Policies Information from the Unconsolidated Financial Statements of Ströer Out-of-Home Media AG Prepared According to HGB for the Year Ended December 31, INDUSTRY Sources of Information Presented in this Section and Certain Defined Terms European Advertising Market Out-of Home Advertising Drivers of Out-of-Home Advertising Growth Our Key National Markets BUSINESS Overview Strengths Strategy History Product Groups Private Contracts and Public Concession Licenses Operating Segment Information Building and Other Public Approvals Sales and Marketing Advertising Copy Research and Development and Production Installation and Maintenance Competition Employees Intellectual Property Corporate Social Responsibility ii

4 Environment Insurance Property Owned and Rented Material Contracts Litigation REGULATORY ENVIRONMENT Overview of the Regulatory Regime EU Regulatory Regime Regulatory Environment in Germany Regulatory Environment in Poland Regulatory Environment in Turkey CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Business Relationships between Ströer AG and Companies of the Ströer Group Business Relationships with Current and Former Principal Shareholders of the Company and with Companies and Enterprises over which these Principal Shareholders can exert Controlling Influence PRINCIPAL, EXISTING SHAREHOLDERS AND SELLING SHAREHOLDER GENERAL INFORMATION ON THE COMPANY AND THE GROUP Name, Registered Office, Formation, Financial Year and Duration of the Company Corporate Purpose Group Structure Auditor of the Financial Statements Notices and Paying Agent DESCRIPTION OF SHARE CAPITAL Current Share Capital of the Company Incorporation of the Company Share Capital of the Company and Development of Share Capital over the Last Three Years Authorized Capital Contingent Capital General Provisions Relating to Profit Allocation and Dividend Payments General Provisions Relating to Liquidation of the Company General Provisions Relating to Increases or Decreases in the Share Capital General Provisions Relating to Subscription Rights Exclusion of Minority Shareholders Shareholder Reporting and Disclosure Requirements MANAGEMENT Overview Management Board Supervisory Board Certain Information on the Members of the Management and Supervisory Boards Conflicts of Interest General Shareholders Meeting Corporate Governance UNDERWRITING The Underwriting Agreement and the Placement Agreement Commissions Greenshoe Option and Securities Loans Termination/Non-Occurrence of Conditions Precedent/Indemnity Selling Restrictions iii

5 TAXATION IN THE FEDERAL REPUBLIC OF GERMANY Taxation of the Shareholders Other Taxes TAXATION IN THE GRAND DUCHY OF LUXEMBOURG General Luxembourg Tax Residency of the Shareholders Withholding Tax Income Tax Net Wealth Tax Other Taxes FINANCIAL INFORMATION.... F-1 Unaudited Interim Consolidated Financial Statements of Ströer AG as of and for the three months ended March 31, 2010 (IFRS)... F-3 Audited Consolidated Financial Statements of Ströer AG as of and for the year ended December 31, 2009 (IFRS)... F-15 Audited Consolidated Financial Statements of Ströer AG as of and for the year ended December 31, 2008 (IFRS)... F-83 Audited Consolidated Financial Statements of Ströer AG as of and for the year ended December 31, 2007 (IFRS)... F-149 Audited Unconsolidated Financial Statements of Ströer AG as of and for the year ended December 31, 2009 (HGB)... F-209 GLOSSARY... G-1 RECENT DEVELOPMENTS AND OUTLOOK... R-1 Recent Developments in Our Business... R-1 Outlook... R-1 SIGNATURE PAGE... S-1 iv

6 SUMMARY Ströer Out-of-Home Media AG, with its registered office at Ströer Allee 1, Cologne, Germany, and registered with the Commercial Register maintained by the Local Court (Amtsgericht) of Cologne under HRB number (the Company, Ströer AG or we, and, together with its subsidiaries, we, our Group or the Ströer Group ), along with J.P. Morgan Securities Ltd., London, United Kingdom ( JP Morgan ), and Morgan Stanley Bank AG, Frankfurt am Main, Germany ( Morgan Stanley, and together with JP Morgan the Joint Global Coordinators and the Joint Bookrunners ) and COMMERZBANK Aktiengesellschaft, Frankfurt am Main, Germany ( COMMERZBANK ), Crédit Agricole Corporate and Investment Bank, Paris, France ( Crédit Agricole ),andwestlbag,dusseldorf,germany ( WestLB and, together with COMMERZBANK and Crédit Agricole, the Co-Lead Managers and, together with the Joint Global Coordinators, the Underwriters ), assume responsibility for the contents of this summary pursuant to Section 5 para. 2 Sentence 3 no. 4 of the German Securities Prospectus Act (Wertpapierprospektgesetz) ( WpPG ). This summary should be read as an introduction to this prospectus. The information in this summary is supplemented by more detailed information contained elsewhere in this prospectus. Investors should base their investment decision on an examination of this prospectus in its entirety. Where a claim relating to the information contained in this prospectus is brought before a court, the plaintiff investor might, under the respective national legislation of the relevant member state of the European Economic Area ( EEA ), need to bear the costs of translating this prospectus before legal proceedings are commenced. With regard to the content of this summary, liability attaches to those persons who have tabled the summary, but only if and to the extent that the summary is misleading, inaccurate or inconsistent when read together with the other parts of this prospectus. Overview We are, in our view, one of the world s leading out-of-home advertising groups in terms of revenues. Our portfolio consists of more than 280,000 advertising faces in Europe, and we have offices in more than 60 locations in Europe. We provide our clients with a variety of different out-of-home advertising products, including conventional, digital and interactive media products, through our four product groups: billboards, street furniture, transport and Other. We generated revenues of A469.8 million and operational EBITDA (before phantom stock) (1) of A100.0 million in the year ended December 31, 2009 and A105.1 million and A16.7 million, respectively, in the three months ended March 31, We have three reportable operating segments: Ströer Germany, Ströer Turkey and Other. (2) Ströer Germany contains the operating activities of Ströer Media Deutschland GmbH, Cologne ( SMD ), the subgroup parent for our street furniture, billboard and transport product groups in Germany, and its subsidiaries. Ströer Turkey comprises our street furniture, billboard and transport operations in Turkey. Our Other operating segment includes our operations under Ströer Poland, and the activities of our giant poster subsidiary, BlowUp Media GmbH, Cologne ( blowup media ) and its subsidiaries, which operate in Germany, the United Kingdom, Spain, Belgium and the Netherlands. In the year ended December 31, 2009, we generated 84% of our total revenues in our Ströer Germany operating segment, 7% in our Ströer Turkey operating segment, 6% in Poland and 3% through blowup media. We have the largest market share, based on net revenues, in the out-of-home advertising market in Germany (source: German Federal Cartel Office (Bundeskartellamt)), Europe s largest advertising market, with more than 230,000 advertising faces in more than 600 cities. Based on net revenues, we also have the largest market share in Turkey (source: Turkish Competition Board) with more than 41,000 advertising faces in 31 population centers. In Poland, we have the largest market share in the billboard market (source: SPC House of Media) and in the out-ofhome advertising market (according to our own estimates) in terms of net revenues, with a total of more than 20,800 advertising faces in 16 major cities across Poland (assuming closing and confirmation of the acquisition of News Outdoor Poland sp. z o.o.; the closing is subject to certain closing conditions). We believe that we operate Europe s largest giant poster network through blowup media. We obtain rights to use locations for the display of out-of-home advertising by entering into private contracts with private land and building owners and public concession licenses with governmental entities. Our private (1) Operational EBITDA (before phantom stock) is calculated by adding back to our EBITDA certain extraordinary items and the (non-cash) valuation impact to provisions on our statement of financial position covering phantom stock shares awarded to executive management under a long-term incentive program. This long-term incentive program will be discontinued and paid out in cash at the closing of the Offering. (2) See the unaudited interim consolidated financial statements as of and for the three months ended March 31, In the audited consolidated financial statements as of and for the year ended December 31, 2009 those segments were named SMD, Turkey and All other segments. 1

7 contracts generally require us to make fixed rent payments, whereas our public concession licenses require us to make a larger portion of revenue-share rent payments than fixed rent payments. We are currently party to more than 4,000 public concession licenses and more than 15,000 private contracts. Summary of Our Key Strengths We believe that we benefit from the following strengths: We have leading positions in some of the largest and highly attractive advertising markets in Europe. Our premium business model is reflected in our ability to generate high cash conversion. We have an extensive network of contractually secured, in our view prime out-of-home advertising units, offering advertisers broad networks for national advertising campaigns. We are well-positioned to benefit from the expected growth in the under-penetrated German out-of-home market and the expected overall growth of the Turkish and Polish advertising markets. We have a highly dedicated and experienced research and development team and continue to focus on product innovation and improvement. We have an experienced, growth-oriented and founder-led management team. The combination of our strengths enabled us to successfully navigate through the crisis and has put us in a position to benefit from the expected economic recovery. We are an experienced consolidator in the out-of-home advertising market. Summary of Our Strategy We are committed to a growth strategy. We are convinced that developing sustainable growth is a key aspect for maintaining a strong market position of the Company. With our overall approach to growing the Company, we particularly focus on the following points: We focus on markets where we believe we can achieve a leading market position. We aim to achieve scale/critical mass in each of the markets in which we operate. We aim to increase the market share of the out-of-home sector in comparison to other advertising media. We seek to drive technological innovation in the out-of-home sector. We carefully balance our portfolio between emerging and mature markets. We aim to drive our future growth both organically and through acquisitions. Recent Developments On March 10, 2010, we entered into an agreement to increase our 50% equity stake in Ströer Kentvizyon Reklam Pazarlama A.Ş. ( Ströer Kentvizyon ), the holding company for our activities in Turkey, to 90%. The aggregate purchase price for the acquired shares, corresponding to the higher of (i) a lump-sum amount of A55 million or (ii) 40% of Ströer Kentvizyon s equity value, will be paid with the proceeds of the Offering; Ströer Kentvizyon s equity value depends, inter alia, on the Offer Price achieved in the Offering. On June 15, 2010, we entered into an agreement to acquire a 100% interest in News Outdoor Poland sp. z o.o, a Polish company which is operating in the out-of-home media business in Poland, for a purchase price of approximately A26 million (subject to certain adjustments upon closing of the acquisition). In our opinion, News Outdoor Poland sp. z o.o is a leading premium format billboard contractor in Poland and the fourth largest outdoor company by revenues in Poland. Auditors Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft (formerly Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft), Ludwigstraße 8, Cologne, Germany ( E&Y ), a member of the German Chamber of Public Accountants (Wirtschaftsprüferkammer), Berlin, is the auditor of our statutory financial statements. 2

8 Summary of the Offering Offering Offer Shares Joint Global Coordinators and Joint Bookrunners Co-Lead Managers Underwriters Existing Shareholders Selling Shareholder This offering consists of (i) initial public offerings in the Federal Republic of Germany and the Grand Duchy of Luxembourg and (ii) private placements in certain jurisdictions outside the Federal Republic of Germany and the Grand Duchy of Luxembourg consisting of: Up to 16,176,471 newly issued ordinary bearer shares from a capital increase for a contribution in cash expected to be approved by the extraordinary general shareholders meeting of the Company on July 13, 2010 (the Company Shares ); 4,156,238 newly issued ordinary bearer shares from the holdings of the Selling Shareholder (as subsequently defined) deriving from a capital increase from contingent capital due to the exercise of warrants (the Warrant Shares ); and Up to 2,033,271 existing ordinary bearer shares from the holdings of the Existing Shareholders (as subsequently defined) to cover a potential overallotment (together the Offering ). The shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act ). In the United States of America, the shares are being offered and sold to qualified institutional buyers in private placements in reliance on Rule 144A under the U.S. Securities Act. Outside the United States of America, the shares will be offered in reliance on Regulation S under the U.S. Securities Act. The ordinary bearer shares that are the subject of this Offering (the Company Shares, the Warrant Shares and as defined below the Greenshoe Shares) have no par value and a notional value of A1.00 each (together the Offer Shares ). All of the shares are fully paid in. JP Morgan and Morgan Stanley. COMMERZBANK, Crédit Agricole and WestLB. JP Morgan, Morgan Stanley, COMMERZBANK, Crédit Agricole and WestLB. The existing shareholders are Dirk Ströer and Udo Müller (together the Existing Shareholders ). The selling shareholder is Saberasu Japan Investments II B. V., Baarn, The Netherlands ( Saberasu or the Selling Shareholder ), an entity controlled by Cerberus Capital Management, L.P., New York, U.S. and certain of its affiliates (together Cerberus ). Offer Period This Offering will commence on July 5, 2010 and end on July 13, 2010 (i) at 12:00 noon (Central European Summer Time) for retail investors and (ii) at 4:00 p.m. (Central European Summer Time) for institutional investors (the Offer Period ). The Company reserves the right, in consultation with the Joint Global Coordinators, to extend or shorten the Offer Period. Price Range The price range within which offers to purchase may be submitted is between A17.00 and A24.00 per share. Within this price range, the offers may be furnished with a price limit. However, every offer must refer to a minimum order size of 100 shares and be made out to a plain euro amount or to full 25, 50 or 75 euro cents. The Company reserves the right, in consultation with the Underwriters, to reduce or increase the upper and/or lower limits of the price range. 3

9 Offer Price; Number of Company Shares Stabilization Measures, Overallotments and Greenshoe Option The Company expects to determine the offer price together with the Joint Global Coordinators, on the basis of a bookbuilding process, on or about July 13, 2010 (the Offer Price ). The number of Company Shares that the Company will issue and sell pursuant to the Offering will be determined based on the Offer Price and will be such number of shares as is necessary to provide the Company with gross sale proceeds of A275.0 million. As a result of this precondition, at the high-point of the price range (A24.00) as set out above, the Company would be offering 11,458,334 Company Shares (or 48.7% of the existing share capital), at the mid-point of the price range (A20.50) the Company would be offering 13,414,635 Company Shares (or 57.0% of the existing share capital) and at the low-point of such price range (A17.00) the Company would be offering 16,176,471 Company Shares (or 68.7% of the existing share capital). The Offer Price and the final number of Company Shares and Offer Shares are expected to be published by means of electronic media, such as Reuters or Bloomberg, and on the Company s website ( Following the publication of the Offer Price in the electronic media, investors may obtain the Offer Price from the Underwriters. The Company reserves the right, in consultation with the Underwriters, to reduce or increase the number of shares offered. The Company may increase the total number of shares offered in this Offering up to a maximum of the total number of shares for which the application for admission to listing and trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange is being made in accordance with this prospectus. In connection with the placement of the Offer Shares, Morgan Stanley, or persons acting on its behalf, may, as Stabilization Manager (the Stabilization Manager ) and acting in accordance with legal requirements, make overallotments and take stabilization measures with a view to supporting the market price of the shares of the Company at a higher level than that which might otherwise prevail in the open market and thereby counteract any selling pressure and demand for the shareholders (together the Stabilization Measures ). The Stabilization Manager is under no obligation to take any Stabilization Measures. No assurance can therefore be provided that any Stabilization Measures will be taken. Where Stabilization Measures are taken, these may be terminated at any time without notice. Such measures may be taken from the date the shares of the Company are listed on the regulated market of the Frankfurt Stock Exchange and must be terminated no later than the thirtieth calendar day after that date (the Stabilization Period ). For stabilization purposes, the Stabilization Manager may overallot up to 2,033,271 shares in the Company (10% of the aggregate sum of (i) the final number of Company Shares and (ii) 4,156,238 Warrant Shares) to investors as part of the allocation of the shares to be placed. For the purposes of allowing the Stabilization Manager to cover short positions resulting from any such overallotments and/or from sales of shares effected by it during the Stabilization Period, the Stabilization Manager will be provided for the account of the Underwriters in the form of a compensated securities loan (entgeltliches Wertpapierdarlehen) with up to 2,033,271 shares by the Existing Shareholders. In addition, the Company has granted the Stabilization Manager an option, exercisable for 30 calendar days following the date on which the shares commence trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange, to acquire up to 2,033,271 additional ordinary bearer shares of the Company (the Greenshoe Shares ) for the account of the Underwriters at the Offer Price, less 4

10 underwriting commissions, solely to redeem the securities loan, if any, in connection with the Offering (the Greenshoe Option ). The Greenshoe Shares will be issued from a capital increase from authorized capital. Once the Stabilization Period has ended, an announcement will be made within one week in various media distributed across the EEA as to whether Stabilization Measures were taken, when price stabilization started and finished and the price range within which Stabilization Measures were taken. The price range will be made known for each occasion on which Stabilization Measures were taken. Exercise of the Greenshoe Option, the timing of exercise and the number and type of shares involved will also be announced promptly in the manner stated above. Shareholdings before and after the Offering The table below shows information relating to the shareholdings immediately before and after the Offering. Such information is based on an Offer Price at the mid-point of the price range (A20.50) and assumes that the Selling Shareholder disposes of its entire shareholding and the Greenshoe Option is not exercised. Upon completion of the Offering, the Existing Shareholders (Udo Müller and Dirk Ströer) will hold more than 50% of the shares in the Company. Immediately prior to the completion of the Offering Number of Percentage of shares shares Upon completion of the Offering (no exercise of Greenshoe Option) (1) Number of Percentage of shares shares Udo Müller... 11,776, ,836, Dirk Ströer... 11,776, ,922, Alfried Bührdel.. 46,180 (2) 0.1% (2) Saberasu ,156, Freefloat ,317, Total... 27,708, ,122, (1) Excluding Preferential Allocation (for further information see Preferential Allocation ) (2) Assuming that Alfried Bührdel will invest one third of the net Phantom Stock Bonus payable to him. Assuming (i) that the Greenshoe Option is exercised in full, (ii) the completion of the capital increase from authorized capital to issue the new ordinary bearer shares to cover the Greenshoe Option and (iii) an Offer price at the mid point of the Price Range (A20.50), the number of shares held by Udo Müller will be 11,836,975 (representing 27.6% of the shares in the Company), the number of shares of Dirk Ströer will be 11,922,341 (representing 27.8% of the shares in the Company) the number of shares of Alfried Bührdel will be 46,180 (representing 0.1% of the shares in the Company) and the number of shares publicly held (free float) after the Offering will be 19,074,465 (representing 44.5% of the shares in the Company). Allotment Criteria Preferential Allocation The Company will make the ultimate decision regarding the allotment of shares to retail investors and institutional investors after consultation with the Joint Global Coordinators. Allotments will be made on the basis of the quality of the individual investors and individual orders and other allotment criteria to be determined after consultation with the Joint Global Coordinators. The allocation to retail investors will be compatible with the Principles for the Allotment of Share Issues to Private Investors published by the Stock Exchange Expert Committee (Börsensachverständigenkommission). Qualified investors under the WpPG, as well as professional clients and suitable counterparties under the German Securities Trading Act (Wertpapierhandelsgesetz) ( WpHG ) are not viewed as private investors within the meaning of the allocation rules. The Company has set up a preferential allocation program for the benefit of all employees of Ströer Group, including all members of the 5

11 governing bodies, employed and resident in Germany with an unterminated and active employment contract since more than one year (record date June 1, 2010) in the total amount of up to 5.0% of the issuing volume of the Offering (without Greenshoe Option) (the Preferential Allocation Program ). Pursuant to the conditions of the Preferential Allocation Program, such qualified employees of the Company are entitled to acquire shares of the Company within the Offering as employee shares (Belegschaftsaktien) pursuant to Section 3 no. 39 German Income Tax Act (Einkommensteuergesetz) in the form of a preferential allocation in the amount of up to A900 and A1,800 respectively, having a discount free of tax and social insurance contribution (steuer- und sozialabgabenfreier Preisnachlass) of 20%, that is up to A180 and A360 respectively. Beyond that, the qualified employees are entitled to acquire additional shares of the Company within the Offering in the amount of A1,000, A2,500 or A5,000 at the Offer Price without discount. The lock-up period for the acquired shares will expire on July 31, The two Existing Shareholders, Udo Müller and Dirk Ströer, and Alfried Bührdel will subscribe in the Offering for approximately A5 million worth of shares at the Offer Price, representing up to 253,496 shares (at the mid-point of the price range, assuming that Alfried Bührdel will invest one third of the net Phantom Stock Bonus payable to him). The Existing Shareholders and Alfried Bührdel will receive a guaranteed allocation after such subscription. Listing and Admission to trading Delivery and Payment Lock-up Agreements The Company expects to apply on July 2, 2010 for admission to listing and trading in the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange and, simultaneously, in the sub-segment thereof with additional post-admission obligations (Prime Standard) of up to 43,884,709 ordinary bearer shares, consisting of (i) 23,552,000 existing ordinary bearer shares (existing subscribed capital), (ii) up to 16,176,471 newly issued ordinary bearer shares from the capital increase for a contribution in cash and (iii) 4,156,238 newly issued ordinary bearer shares from the capital increase from contingent capital. An admission decision for listing is expected to be announced on July 14, The decision on the admission of the Company s shares for listing and trading will be made solely in the discretion of the Frankfurt Stock Exchange. Trading on the Frankfurt Stock Exchange is currently expected to commence on July 15, If the Greenshoe Option is exercised, the Company will additionally apply for admission to listing and trading at the Frankfurt Stock Exchange for up to 2,033,271 newly issued ordinary bearer shares from a potential capital increase from authorized capital to redeem the share loan of the Existing Shareholders which has been granted to cover a potential overallotment. Delivery of the shares against payment of the Offer Price is expected to take place on or about July 16, The Offer Shares will be made available to the shareholders as co-ownership interests in the global share certificate. At the shareholder s discretion, the Offer Shares purchased in the Offering will be credited either to a securities deposit account maintained by a German bank with Clearstream Banking AG, Neue Börsenstraße 1, Frankfurt am Main, Germany, for the account of such shareholder or to the securities deposit account of a participant in Euroclear Bank S.A./N.V., 1, Boulevard Roi Albert II, 1120 Brussels, Belgium. The Company will, in the underwriting agreement among the Company, the Existing Shareholders and the Underwriters, which is expected to be entered into on July 2, 2010 (the Underwriting Agreement ), commit to an obligation vis-à-vis the Underwriters in accordance with the relevant provisions of German securities law, 6

12 that it will not, and will not agree to, without the prior consent of the Joint Global Coordinators, within a period of six months following the first day of trading of the shares of the Company: announce or carry out a capital increase from authorized capital; submit a resolution for a capital increase to its general shareholders meeting; announce, implement or propose the issuance of any financial instruments carrying conversion or option rights with respect to the shares of the Company; or conduct any transactions that would have an economic effect similar to the above measures. These lock-up restrictions do not apply to issuances or sales of shares or other securities as part of management participation plans of the Company or its affiliates, nor to any corporate actions undertaken for purposes of entering into joint ventures or acquiring companies, provided the respective counterparty agrees to be bound by the same lock-up restrictions vis-à-vis the Joint Global Coordinators that apply to the Existing Shareholders as described below. The Existing Shareholders will, in the Underwriting Agreement, and Alfried Bührdel will, in a lock-up agreement, commit to an obligation visà-vis the Underwriters that they will not, and will not agree to, without the prior consent of the Joint Global Coordinators, within a period of 12 months following the first day of trading of the shares of the Company: directly or indirectly sell, offer, transfer or otherwise dispose of shares or other securities of the Company; the same applies to all transactions that have an economic effect similar to a sale, such as the issue of option or conversion rights with respect to shares of the Company; or conduct any transactions that have an economic effect similar to the above measures. These lock-up restrictions do not apply to transactions with persons that agree to be bound by these restrictions. In the Underwriting Agreement, the Existing Shareholders will also give representations and warranties regarding the legitimate existence of the shares they are selling and their right to sell such shares, their sole and unencumbered ownership in these shares and their status as fully paid up, compliance with the applicable rules of supervisory and securities regulatory authorities, and the absence of insider information. The Existing Shareholders will make no other representations and warranties. Use of Proceeds and Costs of the Offering The Company will receive the proceeds of the Offering resulting from the sale of the Company Shares and, additionally, if any, the proceeds from a potential capital increase from authorized capital to redeem the share loan of the Existing Shareholders which has been granted to cover a potential overallotment. The Company will not receive any proceeds from the sale of shares of the Selling Shareholder. The Company estimates that the gross sale proceeds from the sale of the Company Shares will amount to A275.0 million (without exercise of the Greenshoe Option). If the Greenshoe Option has been fully exercised and the share loan of the Existing Shareholders to cover a potential overallotment is redeemed by way of a capital increase from authorized capital, we estimate that at the mid-point of the price range the gross proceeds to the Company would amount to approximately A36.0 million and, together with the gross sale proceeds from the sale of the Company Shares to a total of approximately A311.0 million. 7

13 At the mid-point of the price range, gross sale proceeds to the Selling Shareholder would amount to approximately A85.2 million. Costs of the Company related to the Offering are expected to total approximately A36.8 million, including underwriting commissions of approximately A10.6 million (assuming (i) that the capital increase from authorized capital to redeem the share loan of the Existing Shareholders to cover a potential overallotment has been fully exercised and (ii) an Offer Price at the mid point of the price range as well as payment in full on the discretionary fee of up to 1% of the aggregate gross Offering proceeds; excluding tax effects) and estimated other expenses of A26.2 million (including the cash out on the terminated long-term incentive program and costs in connection with the amendment of the existing A545.0 million and US$29.4 million credit facility). The Selling Shareholder will pay the portion of the Underwriters fees attributable to the offer and sale of the Warrant Shares. We estimate, that at the mid-point of the price range, the net proceeds to the Company (assuming that the Greenshoe Option has been fully exercised and the share loan of the Existing Shareholders to cover a potential overallotment is redeemed by way of a capital increase from authorized capital) would amount to approximately A274.2 million. At the mid-point of the price range, the net proceeds to the Selling Shareholder from the sale of the Warrant Shares would amount to approximately A83.3 million (only reflecting Underwriters fees). The Company intends to use its net proceeds received from the Offering as follows: to raise its 50% equity stake in Ströer Kentvizyon, the top tier company for its Turkish operations, by 40% to 90% for a purchase price that corresponds to the higher of (i) a lump-sum amount of A55.0 million or (ii) 40% of Ströer Kentvizyon s equity value, depending, inter alia, on the Offer Price achieved in the Offering; to acquire 100% of the issued and outstanding share capital in News Outdoor Poland sp. z o.o. for a purchase price of approximately A26.0 million; to fully repay indebtedness for Ströer Kentvizyon under a term loan facility in the amount of A51.0 million and partially repay indebtedness under a revolving credit facility in the amount of approximately A4.0 million; to fully repay A75.0 million of indebtedness (book value: A74.3 million) under the Group s credit facility agreement; to repay a total of A21.2 million of the aggregate amount of A42.5 million under the subordinated loan agreements between the Company and NRW.Bank and SKB Kapitalbeteiligungsgesellschaft, respectively; and for general corporate purposes, in particular costs related to the Offering, investments in the acquisition of new companies, investments in new organic growth initiatives, such as the launch of its Outdoor Channel and its Scroller 5000 Premium Billboard products, and to further reduce leverage. Voting Rights Dividend Rights and Dividend Policy Each of the shares is entitled to one vote at the Company s general shareholders meeting. The shares carry full dividend rights as of January 1, We currently intend to retain all available funds for use in the expansion and operation of our business and do not anticipate paying dividends in the foreseeable future. Any future dividend will depend on our profits and our investment policy at the time. 8

14 International Securities Identification DE Number (ISIN) German Securities Code (Wertpapierkennnummer) (WKN) Common Code Trading Symbol SAX Paying Agent and registrar COMMERZBANK AG, Mainzer Landstraße 153, Frankfurt am Main, Germany. 9

15 Selected Financial and operating Information The summary financial information presented in the tables below is derived from our audited consolidated financial statements as of and for the financial years ended December 31, 2009, 2008 and 2007 and our unaudited interim consolidated financial statements as of and for the three months ended March 31, 2010 (with comparable figures of the preceding year). The audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted in the European Union ( IFRS ) and the unaudited interim consolidated financial statements have been prepared in accordance with IFRS on interim financial reporting (IAS 34). Additional information included in this prospectus has been taken or derived from the Company s audited unconsolidated financial statements as of and for the year ended December 31, 2009, which were prepared in accordance with the German Commercial Code (Handelsgesetzbuch) ( HGB ). IFRS and HGB differ in certain material respects. E&Y audited in accordance with Section 317 HGB and issued an unqualified auditors report with respect to our consolidated financial statements as of and for the years ended December 31, 2009, 2008 and 2007 and the Company s unconsolidated financial statements as of and for the year ended December 31, Where financial data in the tables below is labeled audited, this means that it was taken or derived from these audited financial statements. The label unaudited is used in the tables below to indicate financial data that was taken or derived from a source other than the audited financial statements mentioned above. Some of the financial and performance indicators and ratios including the Non-IFRS Financial Measures reproduced below were taken from our accounting records and are unaudited. All of the financial and other operating data are presented in the tables below in millions of Euro (B million), commercially rounded to one decimal point. The percentages stated in the tables below have also been commercially rounded to one decimal point. As a result, the figures shown in the tables below may not add up exactly to the totals given, and the percentages shown may not add up to 100%. Selected Consolidated Income Statement Data As of and for the As of and for the year ended December 31, three months ended March 31, (audited) (E million) (unaudited) (E million) Revenue Cost of sales.... (300.7) (300.1) (302.5) (69.1) (68.3) Gross profit Selling expenses... (67.3) (74.5) (70.9) (17.2) (15.6) Administrative expenses... (64.6) (70.0) (68.0) (18.0) (16.7) Other operating income Other operating expenses... (11.9) (10.8) (8.3) (2.0) (2.2) Share in profit or loss of associates... (0.0) (4.1) (3.0) Net finance costs (1)... (47.3) (54.8) (46.5) (10.5) (14.1) Profit or loss before taxes from continuing operations... (8.3) (0.9) 28.4 (7.5) (13.4) Income taxes (13.7) 6.6 (1.9) (3.4) Post-tax profit or loss from continuing operations (14.6) 35.0 (9.5) (16.8) Post-tax profit or loss from discontinued operations... (0.1) (0.1) Profit or loss for the period (14.6) 35.0 (9.5) (16.9) (1) Net finance costs are calculated by subtracting finance costs from finance income. In accordance with IFRS, the line items cost of sales, selling expenses, administrative expenses and other operating income and expenses include depreciation, amortization and impairment losses. In addition, some of the line items include income and expenses that we deem to be exceptional items. For the purposes of presenting the non-ifrs items, the depreciation, amortization, impairment losses and exceptional items have been eliminated to reflect our management s analysis of the financial performance of the Company. Consequently, we have regrouped the structure reported in our IFRS consolidated financial statements into the following (non-ifrs) Management 10

16 structure: (i) Direct cost (as regrouped), (ii) Selling, general and administrative expenses (as regrouped) as well as (iii) Other operating result (as regrouped). The following table shows the regrouping of the costs reported under IFRS into the resulting (non-ifrs) Management structure cost positions stated in the previous sentence for the periods indicated. As of December 31, As of March 31, (unaudited) (unaudited) (E million) Cost of Sales (as reported) (1) Depreciation, Amortization and Impairment losses... (44.5) (31.2) (33.4) (9.0) (12.1) Direct costs (as regrouped) Selling expenses (as reported) (1) Depreciation, Amortization and Impairment losses... (2.0) (2.9) (2.6) (0.4) (0.5) Selling expenses (as regrouped) Administrative expenses (as reported) (1) Depreciation, Amortization and Impairment losses... (3.8) (3.5) (3.1) (0.9) (0.9) Exceptional items, net income (net expenses) (2)... (6.5) (7.5) (3.5) (3.4) (1.0) Phantom stock share (3)... (0.3) 0.0 (4.7) Administrative expenses (as regrouped) Selling and administrative expenses (as reported) (1) Selling, general and administrative expenses (as regrouped) Other operating income (as reported) (1) Other operating income (as regrouped) Other operating expenses (as reported) (1)... (11.9) (10.8) (8.3) (2.0) (2.2) Goodwill impairment losses... (4.0) Exceptional items, net income (net expenses) (2) Phantom stock share (3) Other operating expenses (as regrouped) Other operating result (as reported) (1)(4) Other operating result (as regrouped) (5) (1) For the years 2009, 2008 and 2007 derived from the respective audited consolidated financial statements and for the three months ending March 31, 2010 and March 31, 2009 derived from the unaudited interim consolidated financial statements as of and for the three months ended March 31, (2) For the years 2009 and 2008 derived from the audited consolidated financial statements as of and for the year ended December 31, 2009 and for the three months ending March 31, 2010 and March 31, 2009 derived from the unaudited interim consolidated financial statements as of and for the three months ended March 31, These exceptional items are labeled as Adjustment effects in the above-mentioned financial statements. These exceptional items are (a) reorganization and restructuring measures; (b) changes in the investment portfolio (c) capital measures; (d) extraordinary expenses and income. In the unaudited interim consolidated financial statements as of March 31, 2010, due to the intended Offering, these exceptional items are supplemented by the (non-cash) valuation effects relating to phantom stock shares. (3) This line item refers to the (non-cash) valuation impact to provisions on our consolidated statement of financial position covering phantom stock shares awarded to executive management under a long-term incentive program. This long-term incentive program will be discontinued at the closing of the Offering. In the interim consolidated financial statements as of and for the three months ended March 31, 2010, due to the intended Offering, these valuation effects are added to the exceptional items. (4) Other operating result is calculated by subtracting other operating expenses from other operating income. (5) Other operating result (as regrouped) is calculated by subtracting other operating expenses (as regrouped) from other operating income (as regrouped). 11

17 The following table shows our financial performance in the Management structure using both IFRS and non- IFRS financial measures for the periods indicated: Three months Year ended December 31, ended March 31, (unaudited, except as noted) (unaudited) (E millions, except as noted) Revenue (1) Direct costs (as regrouped) (2)... (256.2) (268.9) (269.1) (60.1) (56.2) Selling, general and administrative expenses (as regrouped) (2).. (119.3) (130.5) (125.0) (30.5) (29.9) Other operating result (as regrouped) (2) Operational EBITDA (before phantom stock) (2) Operational EBITDA (before phantom stock) margin (2)(4) (%) % 20.3% 24.1% Phantom stock share (2)(3) (2.5) Operational EBITDA (2) Operational EBITDA margin (4) (%) % 20.8% 23.2% 15.9% 15.0% Exceptional items, net expenses (net income) (2)(5) EBITDA (2) Depreciation, amortization and impairment losses... (54.3) (37.7) (39.1) (10.3) (13.5) EBIT (2) EBIT margin (2)(6) (%) % 11.8% 15.3% 2.9% 0.8% Net finance costs (1)(7)... (47.3) (54.8) (46.5) (10.5) (14.1) Share in profit or loss of associates (1)(8) (4.1) (3.0) Profit or loss before taxes from continuing operations (1)... (8.3) (0.9) 28.4 (7.5) (13.4) Income taxes (1) (13.7) 6.6 (1.9) (3.4) Post-tax profit or loss from continuing operations (1) (14.6) 35.0 (9.5) (16.8) Post-tax profit or loss from discontinued operations (1)... (0.1) (0.1) Profit or loss for the period (1) (14.6) 35.0 (9.5) (16.9) (1) For the years 2009, 2008 and 2007 derived from the respective audited consolidated financial statements and for the three months ending March 31, 2010 and March 31, 2009 derived from the unaudited interim consolidated financial statements as of and for the period ended March 31, (2) Non-IFRS Financial Measures. (3) This line item refers to the (non-cash) valuation impact to provisions on our consolidated statement of financial position covering phantom stock shares awarded to executive management under a long-term incentive program. This long-term incentive program will be discontinued at the closing of the Offering. At the mid-point of the price range, the net Phantom Stock Bonus payable to Alfried Bührdel would amount to approximately A2.8 million (after tax effects, assuming a tax-rate of 50%); the net Phantom Stock Bonus payable to Udo Müller would amount to approximately A5.0 million (after tax effects, assuming a tax-rate of 50%). In the interim consolidated financial statements as of March 31, 2010, due to the intended Offering, these valuation effects are added to the exceptional items. (4) Operational EBITDA (before phantom stock) margin is calculated by dividing operational EBITDA (before phantom stock) by revenue, expressed as a percentage. Operational EBITDA margin is calculated by dividing operational EBITDA by revenue, expressed as a percentage. (5) For the years 2009 and 2008 derived from the audited consolidated financial statements as of and for the year ended December 31, 2009 and for the three months ending March 31, 2010 and March 31, 2009 derived from the unaudited interim consolidated financial statements as of and for the three months ended March 31, These exceptional items are labeled as Adjustment effects in the above-mentioned financial statements. These exceptional items are (a) reorganization and restructuring measures; (b) changes in the investment portfolio; (c) capital measures; (d) extraordinary expenses and income. In the unaudited interim consolidated financial statements as of and for the three months ended March 31, 2010, due to the intended Offering, these exceptional items are supplemented by the (non-cash) valuation effects relating to phantom stock shares. (6) EBIT margin is calculated by dividing EBIT by revenue, expressed as a percentage. (7) Net finance costs are calculated by subtracting finance costs from finance income. (8) These losses relate entirely to non-controlling interests held in XOREX Beteiligungs GmbH (formerly Ströer Media International GmbH) and XOREX GmbH. 12

18 Selected Consolidated Data from our Consolidated Statement of Financial Position As of As of December 31, March 31, (1) 2007 (2) 2010 (audited) (unaudited) (E million) Non-current assets Intangible assets Goodwill Property, plant and equipment Investment property Investments in associates Financial assets Trade receivables Financial receivables and other assets Income tax assets Deferred tax assets Current assets Inventories Trade receivables Financial receivables Other assets Current income tax assets Cash and cash equivalents Non-current assets held for sale Total Assets Equity... (43.4) (35.8) 0.2 (53.3) Subscribed capital Capital reserves Earned consolidated equity... (77.7) (77.1) (63.4) (87.3) Accumulated other comprehensive income.... (17.1) (10.8) 11.5 (17.6) Non-controlling interests Non-current liabilities Pension provisions and similar obligations Other non-current provisions Non-current financial liabilities Non-current trade payables Deferred tax liabilities Current liabilities Other current provisions Financial liabilities Trade payables Other liabilities Current income tax liabilities Liabilities associated with assets held for sale Total Equity and Liabilities (1) In order to improve the meaningfulness of the Group s presentation in relation to financial assets and liabilities and in order to present negative equity in line with internationally established IFRS the presentation in the audited consolidated financial statements as of and for the year ended December 31, 2009 was changed. The figures for the financial year 2008 are derived from the comparative financial information included in the audited financial statements as of and for the year ended December 31, (2) The figures for the financial year 2007, as far as they are deviating from those of the audited financial statements as of and for the year ended December 31, 2007, are recomputed by adding as well as subtracting the amounts taken from section A.4 of the notes to the audited consolidated financial statements as of and for the year ended December 31, 2009 from the amounts shown in the consolidated balance sheet of the audited consolidated financial statements as of and for the year ended December 31,

19 Selected Consolidated Statements of Cash Flow Data Three months ended Year ended December 31, March 31, (audited) (unaudited) (E million) Cash flows from operating activities (3.0) Cash flows from investing activities... (19.5) (62.7) (35.5) (3.4) (4.5) Cash flows from financing activities... (1.9) (0.9) 6.2 Cash and cash equivalents at the end of the period Summary Operating Segment Financial Data Three months ended Year ended December 31, March 31, (unaudited, except as noted) (E million, except as noted) Ströer Germany (1) Revenue (2) Operational EBITDA (3)(4) Operational EBITDA margin (3)(5) (%) % 22.4% 25.0% 20.0% 18.8% Capital expenditures (6) Ströer Turkey (1) Revenue (2) Operational EBITDA (3)(4) Operational EBITDA margin (3)(5) (%) % 28.2% 36.9% 17.8% 12.5% Capital expenditures (6) Other (1) Revenue (2) Operational EBITDA (3)(4) (0.7) 0.2 Operational EBITDA margin (3)(5) (%) % 12.4% 19.0% 7.8% 2.2% Capital expenditures (6) (1) In the segment reporting of our consolidated financial statements as of and for the year ended December 31, 2009, Ströer Germany is labeled SMD, Ströer Turkey is labeled Turkey and Other is labeled All other segments. (2) For the years 2009 and 2008 derived from the audited consolidated financial statements as of and for the year ended December 31, 2009 and for the three months ending March 31, 2010 and March 31, 2009 derived from the unaudited interim consolidated financial statements as of and for the three months ended March 31, (3) Neither operational EBITDA nor operational EBITDA margin should be considered as an alternative to operating income or cash flow from operations. Neither operational EBITDA nor operational EBITDA margin is a generally accepted accounting measure under IFRS. (4) Operational EBITDA is calculated by adding back to EBITDA income/expenses from certain exceptional items. These exceptional items are (a) reorganization and restructuring measures; (b) changes in the investment portfolio; (c) capital measures; (d) extraordinary expenses and income. Exceptional items are labeled as Adjustment effects in the audited consolidated financial statements as of and for the year ended December 31, 2009 and in the unaudited interim consolidated financial statements as of March 31, In the unaudited interim consolidated financial statements as of March 31, 2010, due to the intended Offering, these exceptional items are supplemented by the (noncash) valuation effects relating to phantom stock shares. (5) Operational EBITDA margin is calculated by dividing operational EBITDA by revenue, expressed as a percentage. (6) Includes cash paid for capital expenditures ( Capex ) in connection with investments in intangible assets and with investments in property, plant and equipment. 14

20 Summary of the Risk Factors In deciding whether to invest in our shares, investors should carefully consider the following risks, in addition to the other information contained in this prospectus. The market price of our shares could fall if any of these risks were to materialize, in which case investors could lose all or part of their investment. The risks presented below, alone or together with additional risks and uncertainties not currently known to us or that we might currently deem immaterial, could materially adversely affect our business, financial condition and results of operations. The order in which the risk factors are presented below is not an indication of the likelihood of the risks actually occurring, the significance or degree of the risks described or the scope of any potential impairment to our business. Risks Relating to Our Industry We may be adversely affected by a general deterioration in economic conditions. The advertising industry is highly competitive. The success of our business is dependent on our ability to obtain key public concession licenses from municipalities and other local governmental entities, which we may not be able to obtain on favorable terms. We may be unable to obtain the necessary public permits to expand or upgrade our advertising display networks. Changes in laws and regulations could adversely affect our business and competitive position and force us to incur additional costs. Changes in laws and regulations concerning out-of-home advertising content could adversely affect our business and competitive position. Risks Relating to Our Business Some of our public concession licenses with municipalities and other governmental entities or corporate entities ultimately held by governments or other public bodies may be subject to antitrust concerns and could be terminated prior to their scheduled expiration date due to antitrust law concerns and individual clauses in these licenses and contracts may be found to be invalid. Future acquisitions in Germany, Turkey and Poland might give rise to antitrust concerns. At certain advertising locations, we may be unable to generate revenues that exceed our minimum payment obligations for these locations. In addition, the terms of our payment obligations may be in certain cases subject to conflicting interpretations. Public concession licenses may be cancelled or revoked if they have not been awarded in compliance with EU law. We might be unable to successfully integrate or achieve the expected benefits from future acquisitions. We may have to recognize goodwill impairment losses. Loss of key executives and failure to attract qualified management could limit our growth and negatively impact our operations. Changes in foreign exchange rates and interest rates could have material adverse effects on our financial results. Certain of our video advertising products may be subject to approvals under German media laws. We rely on the proper and efficient functioning of our computer and data-processing systems, and a large-scale malfunction could result in disruptions to our business in the countries or regions affected by the disruption. We cannot guarantee that our decentralized structure will not lead to incidents or developments that could damage our reputation, operations or financial condition. Our business is subject to certain operational risks for which we might not be adequately insured. Our results of operations and working capital are subject to seasonality. We are exposed to ongoing litigation and other legal and regulatory actions (including tax audits) and risks in the course of our business and otherwise, and we could incur significant liabilities and substantial legal fees. Our business is subject to the general tax environment in the countries in which we operate. Changes in tax legislation, administrative practice or case law or treatments of tax facts by the relevant tax authorities which 15