Dear ladies and gentlemen, thank you for joining our today's call on our Q1 2023 results. Let me start the call with a short overview of the key figures of Q1 2023, go straight into more strategic topics. Henning will take over and present the financials of the Q1 in more detail before I give you a short outlook what to expect for Q2. After our presentation, we will be available for Q&A. In Q1, we deliver a very solid quarter, especially against the backdrop of a German advertising market that contracted by more than 5%. Developments are fully in line with our expectations published with the prelims in March. State growth in the mid single-digit percentage range and a significant outperformance compared to the overall advertising market.
Reported growth revenues in Q1 2023 in total were up 6% from EUR 385 million to EUR 410 million . Organic revenue growth was even higher, with 7.3% compared with reported revenue growth. Adjusted EBITDA increased by 3% from EUR 95 million to EUR 97 million. At the same time, Dialog, as well as Asam and Statista, contributed to the overall positive developments. Our further KPIs will be discussed by Henning in the finance section later on. 6% growth for the group, 4% growth for the core Out-of-Home segment, and 17% growth for digital Out-of-Home as expected strong numbers against the German ad market according to Nielsen. Out-of-Home media outperformed the German advertising market -5.4% by around 9 percentage points, and significantly outperformed TV -9.8 percentage points by around 13%.
As a consequence, we see an increasing market share of Out-of-Home in the German advertising market, which reached an all-time high of 8.6% in March 2023. We expect this number to grow further in the upcoming years, parallel with the planned digitalization of our Out-of-Home infrastructure. The next chart really shows these developments. In the years leading up to the corona pandemic, the German Out-of-Home media market has grown steadily and outperformed the overall advertising market on sustained basis. In the corona pandemic, the curfews and lockdowns hit our industry hard. However, our business picked up almost immediately after the harsh measures were eased, and our digital Out-of-Home business, in particular, developed in a textbook V-shape.
We were able to maintain a high growth pace and outperform the overall market, especially in 2022, and as described earlier, as well in the beginning of 2023. Our digital Out-of-Home business was the main contributor to this successful performance. We have continuously expanded the business and accelerated its build-up in 2022. Despite the aforementioned corona crisis and lockdowns, we were able to increase digital Out-of-Home sales double digital percentage points in the period of 2019 to 2022. We are achieving our digital Out-of-Home network a reach in the largest German cities that is on par with TV broadcasters. Our revenue growth of around 17% in the Q1 of 2023 speaks for itself. Let me talk briefly about two drivers that I believe are critical to the success of our digital Out-of-Home business.
StröerMatic and the unique carbon footprint of our premium digital Out-of-Home assets. We are developing technology in close collaboration between our proprietary tech stack and best-in-class partners in the industry. Integration of proven online solutions into the world of digital Out-of-Home is one of the major unique propositions of Out-of-Home plus inside the Ströer group. We have shown in the very beginning, TV as the largest sector of classical advertising is in a sustainable decline of audience and market share. Audiences are using other media. Advertisers are facing very volatile and pressure patterns by geographical breakdowns. Public video that is granular regularly targeting can improve classical TV plans and be used as a convergent media channel. The complete digital Out-of-Home inventory is available via Google DV 360 as of now and available in the most common demand-side platforms.
Next, screen retargeting allows the combination of campaigns in digital Out-of-Home with campaigns in the mobile media world. Whilst digital Out-of-Home quickly reaches audience and makes them aware of the ad, mobile allows immediate conversion. Finally, our public video planner system allows granular planning of campaigns and audiences and is a great practical tool to improve daily tactical executions. Through our sustainable portfolio, and especially with the accelerated expansion of our digital Out-of-Home portfolio, we have developed Ströer into the most sustainable national media sales house. The expansion of our digital communications infrastructure goes hand in hand with our sustainability strategy, where we target a net zero base on a SBTi path. We have reduced emission of greenhouse gases by using 100% green electricity in Germany. Digital Out-of-Home plays a very decisive role in this.
Thus, digital Out-of-Home is by far the most energy and resource efficient medium, with 5 gm CO2 per 1,000 contacts. By contrast, other traditional advertising media has a carbon footprint of up to 10,000 gm per 1,000 contacts. This means that every advertiser will be able to improve their own carbon footprint by giving a higher weighting to Out-of-Home, especially digital Out-of-Home, in their advertising portfolio. This is also due to structural reasons. Out-of-Home is a mass medium, one channel with many recipients, so it will always have a better carbon footprint than one-to-one media usage. Going forward, we anticipate additional impetus to the structural growth of our Out-of-Home media, as customers are attaching even greater importance to life cycle assessments in the context of marketing and advertising strategies.
Alongside traditional campaign performance indicators, such as reach and cost per 1,000 contacts, we expect the carbon footprint to become an increasingly significant measure for advertising customers. Consequently, we predict that advertising companies will aim to continually improve the carbon emissions. This will clearly create additional growth for Ströer's core business, Out-of-Home advertising, particularly digital Out-of-Home. Let me now hand over to Henning for his comments on our Q1 results.
Thank you, Udo, and good morning, everybody. As already mentioned, our group revenue developed in line with our guidance and increased by 6% from EUR 385 million to EUR 410 million in Q1. Just like in previous quarters, organic growth was slightly higher compared to reported revenue growth due to the disposal of our Turkish online marketing business, SEM, which was still included in the prior year comps. As explained already, adjusted EBITDA increased by 3% from EUR 95 million to EUR 97 million. Adjustments stood at EUR -2.8 millio n, so some EUR 500,000 lower compared with the prior year period. Accordingly, reported EBITDA came in at EUR 94 million.
Depreciation and amortization for the quarter increased from EUR 71 million to EUR 76 million, or 7%, due to the accelerated ramp up of our digital portfolio over the last couple of quarters.
Taking this into account, EBIT decreased by EUR 2 million from EUR 20 million-EUR 18 million . The financial result came in at EUR -14 million . The change is due to two main effects. Firstly, a net interest expense in a narrower sense, which reflect the higher interest rate level in the past quarter compared with Q1 2022. On the other hand, in a broader sense, the effects of IFRS 16. Here we have an implication if we, for instance, change the parameters of an existing lease contract, where we then have to apply the now higher interest rates for the value in use calculation. This effect amounted to roughly EUR 3 million higher interest rate expenses for the quarter. At the same time, a reverse impact on the corresponding depreciation, which is declining by more or less the same amount.
Taking the described effects into account, EBT was at EUR 5 million compared to EUR 14 million in the previous year's quarter. Accordingly, tax expenses are down to EUR 1.3 million, which corresponds to a tax rate of 27.5%. All in all, reported net income stands at EUR 3 million in Q1 2023. Adjustments to be considered in the quarter are down from EUR 8 million-EUR 5 million, which leads to a net adjusted income of EUR 9 million, so EUR 10 million lower compared with Q1 2022. Moving on to the cash flow development. Altogether, we see a quite positive operating cash flow, despite a continued challenging business context. Operating cash flow increased from EUR 32 million-EUR 53 million. Let's have a short look into the different effects that contributed to this development.
Cash out from working capital declined significantly from EUR 39 million to EUR 7 million due to the tighter net working capital management, as well as some normalization following a quite substantial outflow in Q4. Tax payments increased from EUR 5 million to EUR 15 million, especially due to the catch-up effects in total of EUR 7 million from the deferral of 2022 tax payments aligned with the tax authorities and following energy crisis mitigation measures implemented by the German government last year. In addition, the position others declined to minus EUR 8 million due to lower adjustments on non-cash items like changes in provisions and accruals. All in, operating cash flows stood at EUR 53 million as mentioned before.
Following the record high investments into the accelerated expansion of our digital portfolio last year, the expansion and thus CapEx is returning to a lower normalized level.
In total, we invested around EUR 31 million, not only in digital Out-of-Home, but also in sustainable growth at Asam and Statista. All in, free cash flow before M&A increased significantly from EUR -2 million in Q1 2022 to EUR 21 million in Q1 2023. IFRS 16 repayments declined from EUR 42 million to EUR 36 million as lower office rents had to be considered, as well as some phasing effects compared to Q1 2022. This led to a free cash flow adjusted of minus EUR 15 million after EUR -44 million in the prior year period. Net debt year-on-year was up by EUR 93 million from EUR 653 million to EUR 746 million in Q1 2023.
This increase includes returns to Ströer shareholders, either via dividends or via our share buyback program of more than EUR 170 million over the last 12 months.
In a sequential view, the bank leverage ratio increased only slightly by 8 basis points from 2.2x to 2.28 x. Let me now talk you through the performance of the individual segments, starting with Out-of-Home media. Out-of-Home showed a strong revenue performance, especially against the backdrop of an overall challenging German media market, which was going down by -5.4%. When considering the second stage of the tobacco ban, total revenue increased by 3.5% from EUR 152 million to EUR 157 million. When taking out sales from tobacco advertising, growth even amounted to 5.6%. Main contributor for the strong revenue development was our digital Out-of-Home business, which continued to grow double- digit by 17% to EUR 49 million and which stands now for 31% of Out-of-Home revenues.
EBITDA adjusted was flat with EUR 59 million, as we had to compensate for higher costs, as discussed before. Q1 sales of the Digital and Dialog segment returned to the growth path again. In total, revenue increased by 6% from EUR 170 million to EUR 180 million. In digital, sales declined by 4%, reflecting the disposal of our Turkish subsidiary, SEM, in summer last year. Organic sales in digital were broadly flat. Against challenging comps, especially in the current online advertising environment, digital altogether had a solid start into the year from a sales perspective. At the same time, traffic on T-Online was still subdued to the high prior year base, as well as several Google core updates impacting traffic. We expect stabilization against easing comps going forward.
On the Dialog side, the business delivered remarkable 16% growth, driven by our successful direct sales activities for telecommunication products. Thus more than compensated the sales decline in digital. Given the higher operating leverage of digital from our own assets such as T-Online, however, earnings declined by EUR 4 million to EUR 33 million. Finally, let us have a look into our Data as a Service and e-commerce segment with Statista and Asam. Revenue increased again with close to 24% and achieved a new Q1 record high with EUR 88 million sales. In the last couple of quarters, Statista prepared its sales organization for the next level and further optimized structures, including the implementation of Salesforce, which enables us to serve customers even more efficiently and closely.
On the organizational side, Statista has also further focused the sales team with the development of a hunter and farmer structure, which will help to provide our customers with optimal support in every phase of the customer life cycle. With this setup, we will be well prepared for further profitable growth. Against the backdrop also of quite a bit internal optimization, revenue increased by 13% from EUR 34 million-EUR 39 million. With great excitement, we follow the dynamic developments in the field of generative AI and especially in its most prominent representative, ChatGPT. Here we see great opportunities and potential for our product, especially in the area of improving customer experience and usability of the platform. In addition, we see great chances for a more efficient, automated and thus cost-efficient collection and preparation of data records.
Asam's revenue were up by 34% to above EUR 49 million, driven by significant revenue growth across all different sales channels. As for the valuation of high growth assets, such as Asam and Statista, profitability is getting more important. We have also applied more focus on the trajectory of the bottom line. EBITDA adjusted for the segment was strongly up to more than EUR 12 million, reaching a margin of 14% and demonstrating the profitability potential from the scaling of both assets. Let me now hand you back over to Udo for a brief outlook on what we expect for our Q2 and our financial calendar.
Thank you, Henning. Based on our current trading as well as what we see in our order books, we expect organic revenue growth for the Q2 as well as the EBITDA development to be broadly in line with what you have seen in Q1. In parallel, we expect to further substantially outperform the German ad market. For the second half of the year, we should be able to benefit from easing comps, assuming no further macro deterioration. Finally, we see our structural growth drivers unchanged on track. Digitalization of our Out-of-Home infrastructure, sustainably growing SME business backbone, client access via Plus businesses, and value growth of non-core assets. Let me now close the presentation with looking out at our financial calendar for 2023.
Our AGM will take place on July 5, and the invitation, including our dividend proposal, which has to pass the final stages in the statutory committees, will be published in the next days. Our H1 figures will be published on August 9. In November, on the 9th, we will update you on the Q3 performance. As always, further dates can be found on our financial calendar on our IR website. Thank you, everyone. We are now happy to take your questions.
Ladies and gentlemen, at this time, we will begin the Q&A session. The first question comes from the line of Christopher Johnen from HSBC. Please go ahead.
Yes, good morning, everyone. Thanks for taking the time to answer my questions. A couple. First, on the lack of a full-year guidance. I was hoping that we got a bit more color on how you see the year. If I'm not mistaken, business has gotten basically better over the last couple of quarters, essentially on the monthly basis. I'm kind of curious to pick your brain as to why you decided to just focus on Q2, although that is clearly appreciated. Yeah, just some color on how you see the year. I'm aware of the uncertainties, but yeah, just to pick your brain, even if just with relation to the current state of the consensus estimates. Second question on Statista.
I mean, the growth has decelerated a little bit. I'm aware that the comp in Q1 was super high, that point is already taken. I'm just curious, consensus expects 21% growth for the full-year. Again, I would just, you know, want to hear your thoughts as to what do you think of that estimate and, you know, where the parts of that business is going. I also didn't fully understand the impact. You said there was a bit of a revenue backdrop in Q1 on the back of some internal changes. I didn't fully catch that. Color on Statista would be great. A question on the margins in the segment. The DaaS and eCom segment.
Yeah, just again, to hear your thoughts. I mean, obviously a big step up in margin this quarter. Is this the sort of new normal? I mean, Asam growth was sort of exceptional, but I cannot really pinpoint this to anything. So I'm just trying to understand whether, you know, the developments here are a reflection of, well, one-off-ish type development or whether this is indeed sustainable. Thank you.
Hi, Christopher. It's Christian. Yeah, full-year guidance, interesting topic. I mean, as you say, I think, in general, our business is performing very well. Even the circumstances are difficult. We've seen that in Q1. We see roughly the same development currently for the Q2 as well. At least at the moment, we also don't see any changing momentum for the rest of the year as far as the pre-bookings and the overall order book is concerned. I think without the last two or three years, and the experiences we've made with pandemic, with inflation, with suddenly a war, I think in general, I think what we see in the first half of the year would be the minimum of an annual guidance going forward.
We've been surprised in the last two or three years constantly with external stuff that was just out of our original expectation. I think that is the only reason why for the moment we decided to, on the one hand, guide more quarter- by- quarter, but give you also a general outlook, what the business performance looks like for the rest of the year without any bigger macro impact. We just wanna be a little bit more cautious, not because of stuff that we can control, but because of all the external effects. In general, I think we are very happy with the business. I think Henning mentioned it in his part.
If you look at the momentum of our business in 2022, it almost got a little bit softer month-by-month because of the constantly growing pressure from the macro environment, which means this year, the comps from prior year becomes a little bit softer month-over-month. As I think we've lined out in our outlook statement, we expect a little bit more momentum potential for the second half of the year if there are no bigger changes. Being a little bit more cautious in times where the macro environment is still unclear is the reason for not giving a very precise full-year guidance. On your Statista question, yes, on the one hand, as you said, I think the consensus is around or above 20%. That, I guess, that's not wrong.
At the same time, Q1 was a little bit softer. The key reason for that is that already, I think, mid of last year, we changed a couple of our sales structures just in line with the company getting bigger and bigger. I think that's meanwhile 1,300-1,400 employees. Specific markets like the U.S. become really big, and we've historically worked with one sales structure. One team per market, approaching more or less all customers, no matter if it's a new customer, no matter if it's an existing customer. We've changed that into a former hunter model. We've also kicked off to a sales hub for large global corporates in London and the U.S.
As always, when a sales organization needs to deal with a little bit of internal optimization restructuring, you sometimes lose a little bit of momentum. That's what we see in Q1, but nothing that is not reflected in our internal plans. It's just a necessary step to get to the EUR 250 million revenue or sales that we are planning for 2025- 2026. I think it's just driven by internal aspects. In general, we also don't see that Statista faces a lot of macro headwind at the moment. We're very happy with the development. That's leading to your last question as well, the margins step-up that you've seen in Q1 in general in the segment.
Reflecting both profitability improvement of Statista and Asam, that's something that is also a result of what we've been working on in the last, I would say, six to nine months on both assets. In Statista being a bit smarter in investing into topics that are relevant for the long-term growth and at the same time regarding Asam around activities outside of Germany and our marketing spend. Maybe the step up in Q1 was an extraordinary one. In general, what you will see over the coming quarters and for the full-year is significant margin improvement in that segment. I think after Q2, we can be a bit, little bit more specific on that one, what you can expect for the full-year. It's definitely not a one-time effect.
It's something which is the outcome of, in general, margin improvement projects we've been working in the last six to nine months.
Okay. I don't know if it became clear, but we feel completely comfortable with the projected growth for Asam for this 20%. That's for Statista. This is fully on track, the company. This is a one-off in the Q1.
Got it. Thank you.
The next question comes from Annick Maas from Societe Generale. Please go ahead.
Good morning. My first question is also on Asam Beauty. Now, the growth has been good, but if I remember well, in Q1 2021, you had suggested that over the next years, actually up to 2026, you would multiply Asam Beauty revenues. I guess my first question, is that guidance still holding? Or I guess it potentially is not, and therefore you are focusing on margin. My second question would be, why are you now prioritizing margin growth for Asam Beauty as opposed to revenue growth? Then my second bigger question, I guess, is on the Out-of-Home market. Do you have an idea of how much the Out-of-Home market has grown net to just make a comparison in between your performance and the market actually in Q1? Thank you.
I mean, with Asam, I think it's the point is clear. On the M&A side, clearly profitability plays a much bigger role than 18 months ago everywhere. Valuations are more based on profitability. That's why we clearly focus on profitability because we always said when the business is around EUR 200 million, what ballpark we expect for this year, our target was always to go in the process. But by the way, the business was growing above 30%. I mean, luckily, we could show very strong growth and with a massively improved profitability.
Because the last year was also deteriorated by all these problems with China, and the delivery problems, logistic problems, cost explosion on the pre-product side, et cetera, et cetera. We are confident that we show strong revenue growth in Asam this year and a strong improvement of profitability. From the date perspective, we think Q4 could be a good window to start the stabilization process. Clearly, there's a different appetite now. Whatever, two years ago, even 18 months ago, even with a very low profitability, you got a high valuation, but this has really changed. We have, we need to take that into account.
On your second question, I mean, there are no public numbers out for the net development of the market. I think what we've given you on slide 4 is our net numbers and the gross numbers from the market. Our estimate for the Out-of-Home market in the Q1 on a net basis is around about 1% to 1.5 percentage points of growth. Just to put that number into context, yeah, I think in gross terms, the Out-of-Home market is 7%+ . We think that converts net into maybe 1.5%, max 2% based on us analyzing the market. Just as a reference, the TV market in gross numbers is down 10%.
If you look at Nielsen, I think what RTL has so far announced is for the pure TV spendings, net-wise, - 17%. I would say in the current environment, there is a gap between 5% and 7% in the gross versus the net numbers. I think for Out-of-Home, it's a little bit on the lower end, given that I think the discount development there is different one than, for instance, in television.
Don't forget, I think we are actually the Out-of-Home markets.
Yeah .
65%- 70% market share, and we have almost 100% of the digital Out-of-Home market, which, so when we grow 17% in digital Out-of-Home, then you can understand how much better we are developing than our competitors. In reality, we are in a duopoly with JCDecaux, us, and the others are really, really tiny companies in the meanwhile. We are in virtually the market.
Okay. On the Asam Beauty crystallization in Q4, so, you know, have you prepared the company? Are you talking to someone? Is that meaning in Q4 we will see a sale, or does it mean in Q4 you start getting ready and start to scan the market, I guess?
Exactly. It's the second.
Okay.
option.
Thank you.
No, we have we are very confident that we see a very positive year, we just got approval last week to get access to the last biggest department store chain for next year. We already can see, have a high transparency of a positive development for Asam in this year, next year. That's why we think on the back of a successful 2023, Q4 could be a good if on the macro side, everything stays like it is from today's perspective, we think Q4 could be a good window to start the process.
Very clear. Thank you.
The next question comes from Craig Abbott from Kepler Cheuvreux. Please go ahead.
Yes. Hi, good morning, everyone. Yeah. I just wanted to come back on your optimism on the how you could maybe use ChatGPT and to your advantage, I would say in Statista. You went through that rather quickly, and I didn't really quite understand it. If you could maybe elaborate a little bit on that. Thank you.
Okay, Craig. Well, I think it's if you just look maybe at it from a defensive side first, the most important point is that all, I would say 55%, maybe a little bit more of the Statista content and the data is proprietary. We are doing the surveys and so it's behind the paywall, and it's not accessible by anyone else. Secondly, there is another 30%-35% coming from other sources, from research partners that also have that content behind the paywall. In general, what you see at the moment is that those generative AI solutions will need to work on something. The most important point is the core product is not available for anyone else than us. That's the most important topic.
I think especially in times when generative AI can create a lot of stuff, the question what kind of numbers are true and what is really double-checked and where can you be sure that the quality is really first class is something that is more important than ever. We also think that there Statista is meanwhile almost the feel for really reliable data and data journalism. That said, if we look at the two challenges in general of the business we are constantly working on, and we always thought so far we have good solutions, we just see that ChatGPT or any other generative AI solutions can deliver even more. There's two things. The first one is creating smart visualization of the data. That's what at the moment is predominantly done by people.
Data journalists that create the diagrams and everything, distill the data in a way, package it, visualize it in a way that you can easily consume it and get the insight out of the data as smart as possible. That's one aspect. We need a lot of people for that. And on the other hand, for the growing database, you need more and more know-how on the customer side, yeah, because they are looking for something specifically in the database and need to get there, and that requires time. Solutions like the ones from ChatGPT have been a fast track for both things. A lot of the work that is currently manually done by data journalists will be sooner or later be also possible to handle it via, for instance, ChatGPT.
We've been already testing it, and I think the latest beta version that is out there in the market can already read and create, visualize data. Secondly, if you are a user, the kind of the result that you wanna get out of the database is accessible by far faster. You don't need to go through the different sections to find the right data. You simply ask, the system is doing the work for you and giving you the answer. That's why we think those two aspects can be real accelerators for both consumption, but potentially also profitability of the product.
Okay. That's very interesting. Very helpful. Thank you. My second and final question is just more general. You gave us in response to an earlier question, you know, your general thoughts on the underlying business development based on today's knowledge the rest of the year in terms of revenues and earnings, but also from a free cash flow perspective, Henning, you talked us through some of the effects in Q1. Thank you for that. Just in general, your directional thinking on the free cash flow generation potential for the full-year. Thank you.
Craig, happy to take that one. I mean, it's basically unchanged to what we, what we shared with you on the occasion of our prelim publication. I think, you know, first of all, in the Q1, you see we have a good operating cash flow, maybe a bit exaggerated by a shift in working capital. We also talked about that we will have lower CapEx this year, which should compensate for higher tax expenses. In general, I think we are set for an improvement in free cash flow vis-à-vis 2020, vis-à-vis 2022. That is unchanged.
Okay. Thank you very much. Okay, thanks.
The next question comes from Julien Roch from Barclays. Please go ahead.
Yes. Good morning, everybody. Second question of AI, which is the topic of the day, of the week, of the month. Very clear answer on Statista. On Dialog, if you see the stock performance of Teleperformance, which has been very poor, it seems that the market has a negative view of the impact of generative AI on call centers. Can you give us your view on why the market is right or the market is wrong? That's the first question. Second question, you gave us a timing for Asam, where you're gonna start to look for selling it in Q4. An update on Statista.
The third question is, the gap between net outdoor growth and net TV growth is widening. You are outperforming TV more and more. Any pointers on why that is? Thank you.
Let me take the last question. If you look at the pandemic, actually, the pan disrupted the structural development. There was also a high on TV, and TV also, low in Outdoor in times of lockdowns. Now actually the market is catching up to what we see since years and what we always said. There's a structural decline because eyeballs are actually going away from print and free-to-air TV. This is a bit later, always reflected in the turnover, because the market is a little bit tied up in deals between agencies and the media companies, especially the big TV companies. For a long time, this can overcompensate the structural media usage changes. Sooner or later, this will take place.
This exactly what you see now, and we expect it also to accelerate in the upcoming quarters. I mean, in general, you see that we outperformed the TV by 13%, overall market by 8%. Don't forget the situation what we have now with -5% for the overall market. Since I'm in the business, and this is now 30 years, it only happened once in 2008. In 30 years, this is the second time that the market is going down by 5%.
We are in extraordinary situation, and we are quite happy, I have to say, that everything what we predicted before, that we see the structural growth, that we see that digital Out-of-Home and Out-of-Home is constantly growing now with 8.6% of the market. When I started the business, the market share of Out-of-Home was 2.7% in Germany. It's constantly growing. We said a couple of times, we believe that market share of Out-of-Home will become clearly double-digit and beyond that in Germany and also in Europe and worldwide. This is clearly driven right now 17%. Let's not forget, digital Out-of-Home is the fastest media segment globally right now.
Nothing is growing faster than digital Out-of-Home. These are the reasons why we get widening, yeah. As more digital inventory we have, as stronger we can outperform the market, and as more, let's say, the eyeballs are moving away from print and TV, as more difficult it becomes. This is clearly a generation issue because the older people are still watching TV, but younger people don't watch TV anymore. This is now, let's say a long-term, really structural development, but for the next 10 years, we will see a very, very similar situation.
On your first question, Julian, I mean, I cannot comment on Teleperformance or anything like that, but I mean, we're somehow expecting the question. A couple of numbers when you just look at our Dialog business, I mean, we are not a global
BPO company. We focus only on Germany and German language, we have a special set up that we do not only offer services via contact centers, but also field sales and have all kind of direct consumer contact opportunities in our portfolio. That said, currently 60% of the segment of the Dialog sub-segment come from direct sales, so door-to-door sales, 40% from contact centers, roughly. 84%-85% of the contact center business is either sales, outbound, inbound sales, or cross and upselling stuff. Where you have maybe sometimes, and that's the most complex point, a service request from a customer, and you convert that into cross and upselling opportunities.
Roughly only 15% of the call center business, so 15 out of the 40 of the segment, roughly 6%, 7% of our Dialog business are pure service. If you look into that, and I think that is the area where with standardized requests on customer care, customer service, I think that's the area that could be attacked the easiest by artificial intelligence solutions. That said, I think we only have voice topics there. We don't do any messaging text solutions. That's where I would say again, that's the area where AI might get in first. That's what you see with ChatGPT. Texting works almost perfectly. Voice is already a more complex and difficult thing, especially, I would say, for German language, if it's not English.
That's, just to put it into a context, I think we have nothing that I would see over the next one to three years that is critical. If I look at the total market in Germany, only 30%-35% of the customer service is really outsourced. I think it can be also a trigger to, for a couple of customers because of that new situation, that part of what they do in-house gets handled by AI. Parts of what AI cannot do is maybe outsourced as well. That's why I would say in general, yes, it's clearly as many other business sectors, is something where you need to have an eye on. It's definitely something where artificial intelligence might help.
It already helps today 'cause we are working with support systems, especially on the sales side, with AI solutions that is just listening to the calls and then proposing different products, giving keywords the agents should use, which might be supportive to actually cross and upsell something in the context of what AI understands. That's why I would say mid to long term, it's something you need to have an eye on. In our situation, short term, I don't think that there is any bigger impact just because of the structure of our business.
Last one on Statista timing.
Well, I think that has not really changed. We always said we think we want to take the company to around EUR 200 million-EUR 250 million revenue first, and also work on profitability topics that come in line with a couple of scale effects throughout the growth. I think we'll get to roughly such a revenue base, I don't know, around 2025. I think unless the business is on that level, it also doesn't make sense to think about a potential disposal. I think maybe it's worthwhile talking about it in two years time. Yeah. That said, you never know what happens. If valuations would get crazy again, I think it would be always worth looking at it. I think for the moment, it's nothing where we have any hurry. We do our homework.
We love to see that the business is performing very well. We love to see as I think Q1 indicates that the margins will now increase step- by- step, so that people will not only see a nicely growing business, a quite unique business, they will also see what the margin potential will look like over time. Yeah, we take it to a level where we think it's worthwhile talking about value crystallization.
Okay, very clear. Thank you.
The next question comes from Nizla Naizer from Deutsche Bank. Please go ahead.
Great. Thank you. I have two from my end. Firstly on digital Out-of-Home. Can you give us some color as to which type of customers, like which sectors are most active these days? Are you getting entirely new customers on a national basis who were previously not classic Out-of-Home clients? Or is the overlap quite significant? Some color there would be great. Secondly, on digital advertising, I mean, another quarter of declines. By when could we sort of expect a return to growth here? Any portfolio pruning that you think is necessary to sort of stimulate growth in that segment. Within that, perhaps some color on how T-Online in particular is performing would be great. Thank you.
Hi, Nizla. Maybe we start with the first one. Digital Out-of-Home. I think we see at the moment what we've seen throughout the years, almost as Udo described, I think we have growing volumes from existing customers, and we have new clients. What we see is that especially on digital Out-of-Home, we have a lot of overlaps and more and more overlaps with TV. We just see that pure TV-focused clients start that maybe have historically combined TV with pre-roll advertising, YouTube, and so on now add also digital Out-of-Home and grow that. The ones that haven't done it so far start doing it. I think it's coming from all industries, but especially from the new clients come especially from fast-moving consumer goods and retail. I think the growing categories at the moment is clearly tourism.
They're doing a lot, but also transport is something airlines that has gone up in the last three months versus prior years significantly. It's difficult to say that it's a specific industry. We really see it across the board, I think, as Out-of-Home, and especially digital Out-of-Home is growing its share in the ad market. It becomes more and more a natural element for almost every advertiser. Yeah, that's I would say a continuous and ongoing process. We see that the most intense discussions that we have also around audience measurement, across media tracking and so on is clearly with FMCG clients.
I think they still have such a high share in TV. They see that they need to work on alternative solutions. They almost see that beyond global platforms, it's only digital Out-of-Home that can be a reliable partner to deliver video eyeballs on the long run, also structurally. I think that's where in general, most of the positive momentum comes from. I think on your second question on digital in general, I would say even I think the organic digital development in Q1 is already almost flat. Yeah, I think with the reported number is a little bit lower because of the disposal we had last year on SEM. That happened, I don't know, April or May.
The good news is second half of last year, we've seen double-digit decline in some months and beyond that. The business has been coming slowly back to where it was beginning of last year. I think there is a turning point somewhere in Q2 for the digital segment, where we see different aspects. On the one hand, softer comps from last year, but at the same time, a couple of the Google updates that Henning mentioned are over now and traffic has normalized, especially across all publishers in Germany a little bit more than in the past. We also see that demand is coming back a little bit more than what we've seen in the second half of last year.
I would say in general, that's also true for T-Online. Traffic has had a softer dip the second half of last year is coming back again. We're happy with organic traffic there via search. We see that bookings have stabilized throughout Q1. That's why I would say including the full-year guidance for the group, I think the toughest comps and the most difficult situation from what we see at the moment was a little bit in the Q1. It gets better throughout Q2. Versus rather softer comps in the second half of the year, I think we'll also see again up to mid-single digit growth, maybe even more in Q4 for the digital segment.
I would say given the overall market environment that we see, we think we are relatively performing quite well. I think again, because it's not for bashing any competitors because—i t's the, at the moment, the only local peer that has announced Q1 numbers, RTL TV spend, was - 17%, I think, and the digital advertising spend they've announced was - 8% or - 9%, I think, for Q1. I would say the organic roughly - 0% that we have looks quite robust in that environment. We're happy with the momentum we see there.
Very helpful. Thanks, Christian.
The last question comes from James Tait from Goldman Sachs. Please go ahead.
Hi, everyone. It's James Tait from Goldman Sachs. I've got two questions, please. I think firstly, just following up on your answer on generative AI for Statista, how much of your data is from public sources like government statistics, et cetera? You also mentioned that you have proprietary data, including surveys. Could you give some color on what else is proprietary? How do you tend to protect from other large language models getting behind the paywall and training of the data that you do have? Secondly, your guidance implies a margin compression in Q2. What's really driving that? Do you expect to follow similar trends in H2? Thank you.
Hi, James. Let me start with the first question. Well, I think really crawlable public available content, what you've mentioned is, I think, below 10%. Again, for most of the output that we deliver, it's just one element. The full effect of that is probably less than the share of the total. Because sometimes to give someone a proper valuation of market potential, you use that data as a source, but it's only the add-on that you put on top. Just to put that on the context. As I said before, 55% is proprietary. That's really staff service that we create, and it's built behind our payroll, and we decide who has access to that and how you can approach it.
It's not that easy for someone to just do something with it and steal it. If it's outside our business regulations. 35-40 come from business partners. They are like in the ad market from players like Nielsen or also GfK, for instance. That where we have a deal and the data is they get back links. If clients look for more detailed and specific information that they would get from a specialist, like for instance, Nielsen. While for sending them those back links, we get the access to the data for free or for a specific amount of money. Again, I think that kind of generative AI can only work with data they have access to.
I would say the fully-fledged database is available to only us or our customers, and our customers in the way we allow them to access. Secondly, I think it's not the pure data. You also need to mix and match the data from different sources to get the kind of full, reliable picture that we deliver. That's why at the moment we are testing it already with APIs and see what you can do with the system. But we also see the difference if you're looking for really specific and reliable information, if you do that on the basis of our database versus what creates the system. If it's just crawling free content in the Internet, that's massive.
I think ultimately in the B2B context, people look not just for, I don't know, the
Oh, that's interesting. Set out. Let's see if it's coming back or is the question answered for you?
Yeah, that's helpful. Just on the margin heading into second half in Q2.
Yeah, maybe, Udo, I take that. I mean, what you described, I mean, is correct. We more or less believe that in a relative sense we can achieve the same development as we've seen it in Q1. I think it's quite strong that we were able to cover a lot of the cost increases that we're seeing now in many lines of the P&L. We're still able to deliver on earnings improvement, which is good. However, at the same time, clearly this is more of a challenge in like 2023 than in the normal year before. I think there's also some opportunity in the second half once we face a lower comm situation, particularly in the Q4, if you remember, where we had a slight earnings decline.
Okay. Thank you.
The ref, I think I was interrupted on my line.
Question was answered, but listen, I think we were done. Gentlemen, there are no further questions at this time. Hand back over to Udo Müller for closing comments. Please go ahead, sir.
Yes. Just thank you very much for attending our call. I hope we could answer your questions, and we are happy to see you back for the Q2 results. Thank you very much and goodbye.
Goodbye, everybody.