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Comparing Results from Second Quarter 2023: Lamar Advertising, Outfront Media, and Clear Channel Outdoor

Comparing Results from Second Quarter 2023: Lamar Advertising, Outfront Media, and Clear Channel Outdoor

Comparing Results from Second Quarter 2023: Lamar Advertising, Outfront Media, and Clear Channel Outdoor

 Three major players in the outdoor advertising sector – Lamar Advertising, Outfront Media, and Clear Channel Outdoor – recently released their second-quarter 2023 results, offering insights into their performance and strategies in an evolving market.

Lamar Advertising: A Strong Recovery

Lamar Advertising’s Q2 2023 results paint a picture of resilience and growth. The company reported a 4.5% increase in net revenues, climbing from $517.9 million in Q2 2022 to $541.1 million in Q2 2023. This increase can be attributed to the rebound of the advertising market and the strong demand for its digital and transit advertising products.

The company’s operating income also exhibited positive growth, rising by $10.3 million from Q2 2022 to Q2 2023. This improvement, with operating income reaching $176.8 million in Q2 2023, indicates effective cost management and operational efficiency alongside revenue growth.

Lamar Advertising’s success can be partially attributed to its strategic focus on digital and transit advertising products, which align with changing consumer behaviors and advertisers’ preferences for targeted and engaging ad formats. The second quarter’s results suggest that Lamar’s adaptability and product diversification have positioned it well to thrive in the evolving advertising landscape.

Outfront Media: Driving Growth through Diversification

Outfront Media also reported encouraging results for the second quarter of 2023. The company’s revenues increased by 4.1%, from $450.2 million in Q2 2022 to $468.8 million in Q2 2023. This growth was fueled by higher billboard yields and gains from both local and national business segments. Although transit revenues increased by a modest 1%, the overall performance indicates a balanced portfolio contributing to Outfront Media’s success.

A notable aspect of Outfront Media’s Q2 report is the declaration of a quarterly dividend of $0.30 per share, payable in September 2023. This gesture reflects the company’s confidence in its financial position and future prospects. The dividend announcement adds a layer of attractiveness for investors interested in consistent returns.

Outfront CFO Matt Siegel was at the Oppenheimer 26th Annual Tech Internet and Communications conference last week and had this to say about a recent $511Million writedown on their transit business, “Our portfolio was greatly impacted…first during the pandemic and post pandemic as people have changed their commuting and traveling habits ridership…in all of our transit franchises is down…more than 50% in San Francisco…down 30% like New York…in the first quarter of this year transit the growth of transit stalled…we didn’t think it was a cause for concern…then we came into the second quarter and we see transit still flat and our forecasting our pacing for the rest of the year isn’t very robust… we took a write down, an impairment charge a little over $500 million to our transit business…we also felt the need to change our full year guidance….

Clear Channel Outdoor: Navigating Challenges and Opportunities

Clear Channel Outdoor’s Q2 2023 results reveal a more complex narrative. While the company experienced a slight decrease in overall revenues, dropping from $641.5 million in Q2 2022 to $637.2 million in Q2 2023, this decline was primarily attributed to factors such as foreign exchange rates and the sale of its operations in Italy and Spain.

The company’s America’s division, however, showcased growth of 1%, signifying stability and potential in its core market. Importantly, Clear Channel Outdoor reported a significant reduction in net loss, decreasing from $65.8 million in Q2 2022 to $36.6 million in Q2 2023. This reduction in loss indicates effective cost containment and strategic adjustments that contributed to improved profitability.

Clear Channel Outdoor’s announcement of exclusive discussions to sell its business in France and ongoing evaluation of strategic alternatives for its European operations underscores the company’s proactive approach to addressing challenges and capitalizing on opportunities. By streamlining operations and focusing on core markets, Clear Channel Outdoor aims to enhance its competitiveness and financial health.

The second-quarter 2023 results of Lamar Advertising, Outfront Media, and Clear Channel Outdoor reflect a mix of growth trajectories, highlighting the nuances of the advertising industry, but a general slowdown in revenue growth. Lamar Advertising’s modest revenue growth, Outfront Media’s transit struggles, and Clear Channel Outdoor’s strategic adjustments underscore the diverse approaches these companies are employing to navigate an evolving market. As the advertising landscape continues to transform, the success of these companies lies in their ability to adapt, innovate, and align with changing advertiser demands and consumer behaviors.

JCDecaux Reports Strong Growth in 2023 half year benchmark

JCDecaux Reports Strong Growth at 2023 half year benchmark

Paris, July 31st, 2023 – JCDecaux SE, the leading global outdoor advertising company, has recently announced its financial results for the first half of 2023. The company reported a robust performance, with revenue growth exceeding expectations.

Positive Revenue Growth

In the first half of 2023, JCDecaux achieved a group revenue of €1,585.0 million, representing a remarkable growth of +7.5% compared to the same period last year. Even on an organic basis, which excludes the impact of foreign exchange fluctuations and changes in perimeter, the revenue increased by an impressive +7.8%. The second quarter alone witnessed a growth rate of +10.3% on an organic basis, indicating strong momentum in the business.

Driving Force: Digital Out of Home (DOOH)

A significant driver of JCDecaux’s success has been the strong growth of Digital Out of Home (DOOH). In the first half of 2023, DOOH revenues surged by +17.1% (+18.0% on an organic basis) and accounted for 32.7% of the group’s total revenue. This marks an increase from 30.0% in the same period last year. The company’s strategic focus on selective digital screen placements in prime locations and the development of data capabilities has paid off handsomely.

Programmatic advertising revenues through the VIOOH SSP witnessed a substantial growth rate of +63.3% during the same period. The innovative dynamic data-driven campaigns and new advertisers contributed significantly to these impressive figures. Programmatic advertising now constitutes 7.1% of JCDecaux’s digital revenue for the first half of 2023.

Segment-wise Performance

The different business segments within JCDecaux also demonstrated varying growth rates. Street Furniture, one of the company’s core segments, experienced organic growth of +3.8% in the first half of 2023 and outperformed its 2019 revenue levels globally. Billboard, however, faced a slight decline of -0.5% organically during the same period. Nevertheless, it surpassed 2019 revenue levels in Asia-Pacific and North America.

Transport, the segment significantly affected by the pandemic’s impact on air travel, saw a remarkable rebound with +19.0% organic growth. While global air travel has already surpassed 90% of pre-Covid levels, certain regions like Asia, especially China, are still recovering at a slower pace due to lower international air traffic and non-renewal of metro and airport contracts in Guangzhou.

Geographical Expansion

JCDecaux witnessed positive growth across all geographies in the first half of 2023. Asia-Pacific and Rest of the World experienced double-digit growth, driven by a strong recovery of mobility in these regions. France, Rest of Europe, and Rest of the World were nearly at 2019 revenue levels, indicating a promising comeback from the pandemic’s impact. However, Asia, particularly China, still lags due to the challenges posed by the pandemic.

Improvement in Operating Margin

JCDecaux’s adjusted operating margin improved by €19.6 million, reaching €203.1 million for the first half of 2023, showcasing a significant year-on-year increase of +10.7%. This achievement is particularly noteworthy given the inflationary pressures on costs. The street furniture division played a key role in driving this positive operating leverage through revenue recovery and contract renegotiations. Meanwhile, the transport and traditional billboard businesses are gradually recovering, but at a slower pace, primarily due to challenges in certain regions.

Strategic Acquisitions and Contract Wins

The growth strategy of JCDecaux continues to be focused on both organic contract wins and strategic acquisitions. Notably, the company secured the largest OOH/DOOH media franchise in Norway, contributing to its expansion in the region. Additionally, the acquisition of Clear Channel’s activities in Italy and Spain during the second quarter further bolstered JCDecaux’s position in the market.

JCDecaux’s first half of 2023 results demonstrate strong growth, driven by the rise of digital out-of-home advertising and a gradual recovery in the transport segment. The company’s strategic initiatives, including selective digital screen placements, data capabilities, and programmatic advertising, have proven successful in generating incremental revenue. While some challenges remain, JCDecaux’s positive operating leverage and geographic expansion bode well for its continued growth and success in the outdoor advertising industry.

Please note that the financial data and figures mentioned in this article are based on JCDecaux’s press release for the first half of 2023 and should be referred to as such for accurate and up-to-date information: JCDecaux’s press release

Equinox Industries to Acquire Clear Channel Outdoor Holdings’ Business in France: A Strategic Move to Unlock Potential

Equinox Industries to Acquire Clear Channel Outdoor Holdings' Business in France: A Strategic Move to Unlock Potential

In a recent announcement, Clear Channel Outdoor Holdings, Inc. (CCO) has revealed that it is in exclusive discussions with Equinox Industries, a Paris-based industrial holding company, to sell its business in France. This potential transaction signals a strategic move that could have significant implications for both companies involved.

Equinox Industries, founded in 1999, is renowned for its expertise in making long-term majority equity investments in mid-cap companies to transform and unlock their potential. With a specialization in corporate carve-outs and spin-offs, Equinox’s Managing Partners, Charles-Henri Rossignol and Thibaud Caulier, bring over two decades of investing and operating experience to the table. Currently, Equinox actively manages a diverse portfolio of nine companies, showcasing their ability to nurture and develop businesses to thrive in their respective industries.

As part of the proposed transaction, Didier Quillot, a Senior Advisor to Equinox, will be actively participating alongside the company and would be appointed Non-Executive Chairman of Clear Channel France once the deal is finalized. This strategic move underlines Equinox’s commitment to leveraging its seasoned leadership and industry knowledge to drive Clear Channel France’s growth and success.

The timing of the potential transaction is set for the fourth quarter of 2023, subject to the completion of an information and consultation process with Clear Channel France’s employee works council, execution of a share purchase agreement, and satisfaction of customary closing conditions. Importantly, the transaction does not require regulatory approval, streamlining the process and reducing potential hurdles.

While the financial details of the contemplated transaction have not been disclosed, it is important for investors not to make assumptions until the terms are officially announced. Nonetheless, the market’s anticipation of the deal reflects the potential value and growth prospects that Equinox sees in Clear Channel France’s operations.

For Clear Channel Outdoor Holdings, Inc., the sale of its business in France marks a significant strategic decision. However, it is essential to note that the Company’s Board of Directors is actively reviewing strategic alternatives for its other European businesses. Therefore, there may be further transactions or outcomes in the pipeline. The absence of a set timetable for completion of these processes reflects the Company’s cautious approach, indicating its readiness to suspend the processes if necessary.

The proposed transaction between Clear Channel Outdoor Holdings and Equinox Industries holds several potential benefits. For Clear Channel France, being under the stewardship of Equinox with its expertise in transforming and enhancing companies’ potential could lead to renewed growth and expansion in the French market. Equinox’s track record of investing in mid-cap companies and nurturing them to success positions them as a capable partner to take Clear Channel France to new heights.

Moreover, the appointment of Didier Quillot as Non-Executive Chairman brings valuable experience and insights to Clear Channel France’s boardroom. His role as Senior Advisor to Equinox signifies the company’s commitment to providing expertise and guidance to its portfolio businesses.

For Equinox Industries, the acquisition of Clear Channel France represents an opportunity to further diversify its portfolio and reinforce its presence in the advertising and outdoor media sector. By adding a renowned player like Clear Channel France to its roster of investments, Equinox showcases its confidence in the growth potential of the out-of-home advertising industry.

The exclusive discussions between Clear Channel Outdoor Holdings, Inc. and Equinox Industries to sell Clear Channel France highlight a strategic move with the potential to unlock significant value for both parties involved. If completed as planned, this transaction could pave the way for exciting developments in the French advertising landscape. As the companies move forward with the proposed deal, the market will be eagerly awaiting further announcements regarding the terms and potential outcomes for all parties involved.

Clear Channel Outperforms Market During Second Quarter 2023

Clear Channel Outperforms Market During Second Quarter 2023

Clear Channel Outdoor, has emerged as a top performer in the stock market during the second quarter of 2023. While its competitors Lamar Advertising and OUTFRONT struggled to keep pace with the market, Clear Channel experienced significant growth and exceeded investor expectations. Billboard Insider has provided some excellent insights on this, including:

Clear Channel Outdoor’s stock price surged by an impressive 14.2% during the three months ending June 30, 2023. This remarkable performance can be attributed to several key factors that have propelled the company forward.

One notable event that contributed to Clear Channel’s stock surge was the publication of a letter by Legion Partners, a shareholder activist group. In mid-May, Legion Partners urged Clear Channel Outdoor to expedite its asset sales. This call for action sparked investor confidence and ignited a rally in Clear Channel’s stock price.

Subsequently, Clear Channel made a strategic move by announcing the sale of its assets in Italy and Spain for a substantial sum of $80 million on May 30, 2023. This decision further bolstered investor sentiment and solidified Clear Channel’s financial position.

 

Stock performance for the 3 months ended June 30, 2023, for Lamar (green), OUTFRONT (purple), Clear Channel Outdoor (blue), and the S&P 500 (black)

In addition to the asset sales, Clear Channel Outdoor announced on June 12, 2023, an extension of its AR line and revolving line of credit. This move provided the company with increased financial flexibility, allowing it to pursue growth opportunities and navigate potential challenges with greater ease.

While Clear Channel Outdoor enjoyed significant gains, the broader market, represented by the S&P 500, grew by 8.3% during the same period. This indicates that Clear Channel’s performance outpaced the overall market, further emphasizing its strength and resilience.

In contrast, Lamar Advertising, another major player in the outdoor advertising industry, experienced a slight decline of 0.6% in its stock price during the second quarter. Likewise, OUTFRONT faced a more significant setback, with its stock declining by 3.1%.

The divergence in performance among these industry competitors underscores the unique strengths and strategies of each company. Clear Channel Outdoor’s ability to capitalize on asset sales, coupled with its proactive financial management, has undoubtedly set it apart from its rivals.

As the second quarter of 2023 concludes, Clear Channel Outdoor has demonstrated its ability to navigate the evolving advertising landscape successfully. With a solid financial position, strategic decision-making, and the ability to adapt to market demands, Clear Channel is well-positioned for continued growth and success in the outdoor advertising industry.

 

Source: Billboard Insider

Programmatics: Ad Targeting and Optimization Comes to Digital Out-of-Home

Navigating Digital OOH in the Age of Load Shedding: Lessons from South Africa

Load shedding, the deliberate and temporary interruption of power supply, has become a prevalent challenge in many countries, including South Africa. In this era of digital transformation, load shedding poses unique difficulties for the digital out-of-home (OOH) advertising industry. In a recent article titled “Digital OOH in the Age of Load Shedding,” published on The Media Online, the author sheds light on the impact of load shedding on digital OOH and offers valuable insights on how the industry can navigate this challenging landscape.

Understanding the Challenges:

The article rightly highlights that digital OOH advertising relies heavily on a continuous power supply to deliver dynamic and engaging content. Load shedding disrupts this flow, leading to potential revenue loss and diminishing the effectiveness of digital OOH campaigns. Furthermore, the unpredictable nature of load shedding adds an additional layer of complexity, making it difficult for advertisers to plan and execute their campaigns effectively.

Adapting Strategies:

To overcome these challenges, the article suggests several strategies for the digital OOH industry to consider. Firstly, diversifying energy sources is a crucial step towards ensuring uninterrupted power supply. This can involve investing in alternative power solutions such as solar panels, generators, or even exploring battery storage options. By reducing reliance on the main power grid, digital OOH networks can minimize the impact of load shedding and maintain consistent visibility for advertisers.

Another important aspect highlighted in the article is the need for effective campaign scheduling. Advertisers must work closely with digital OOH networks to align campaign timings with load shedding schedules. By carefully planning and adjusting the delivery of content during periods of stable power supply, advertisers can maximize the impact of their campaigns and ensure optimal audience reach.

Additionally, the article emphasizes the importance of leveraging real-time data and automation. By utilizing sophisticated data analytics and programmatic advertising, digital OOH networks can dynamically optimize campaigns based on audience behavior, environmental conditions, and power availability. This flexibility allows advertisers to deliver contextually relevant content, even during load shedding periods.

Collaboration and Innovation:

The article emphasizes the significance of collaboration between stakeholders in the digital OOH ecosystem. Advertisers, digital OOH networks, and technology providers should work together to find innovative solutions that mitigate the effects of load shedding. Sharing best practices, knowledge, and experiences will foster the development of strategies that enable the industry to adapt and thrive in challenging environments.

Furthermore, the article encourages the exploration of emerging technologies, such as energy-efficient displays, remote monitoring systems, and smart power management solutions. These advancements can significantly reduce power consumption, optimize operational efficiency, and improve overall sustainability in the digital OOH sector.

Load shedding presents formidable challenges for the digital OOH industry, but with the right strategies and collaborative efforts, these obstacles can be overcome. As the article on The Media Online rightly points out, diversifying energy sources, effective campaign scheduling, leveraging data analytics and automation, and fostering collaboration and innovation are key pillars to navigate the age of load shedding successfully.

South Africa’s experience with load shedding serves as a valuable lesson for the global digital OOH industry. By implementing the insights shared in the article, advertisers and digital OOH networks can adapt their operations, enhance campaign effectiveness, and ensure consistent visibility, even in the face of unpredictable power disruptions.

As the industry evolves and continues to embrace advancements in technology and sustainability, it is crucial to remain agile and proactive in finding innovative solutions. By doing so, the digital OOH sector can thrive amidst adversity and contribute to the growth and transformation of the advertising landscape as a whole.