Earnings Release • Nov 8, 2021
Earnings Release
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Paris, November 8 th, 2021 – JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, published today its business review for the third quarter of 2021.
In September, JCDecaux announced that Sydney Trains has appointed the company as its main advertising partner across the concourses and platforms of train stations for a term of up to 10 years. In 2019, pre-COVID, Sydney Trains recorded 420 million journeys per year.
In July, JCDecaux announced that the company has been awarded, following a competitive tender, the advertising bus shelters contract for the city of Antwerp, capital of Antwerp Province, Belgium's biggest province with 1.9 million inhabitants. Previously held by a competitor, the 10-year contract covers all nine districts in Antwerp, with its 540,000 inhabitants.
In September, JCDecaux announced the launch of JCDecaux Data Solutions - a portfolio of global and local data-driven solutions that enables advertisers to maximise the power and ROI of their media investment. JCDecaux Data Solutions is a combination of in-house products and solutions developed by JCDecaux's data team (50 people) and 3rd party solutions. JCDecaux Data Solutions is due to launch first in the following markets (by geographical area): France, UK, Germany, Belgium, Netherlands, Spain, Italy, UAE, South Africa, USA, Hong Kong SAR (China), Japan, Singapore, Australia, Brazil. More markets will roll out JCDecaux Data Solutions in 2022.
In September, JCDecaux announced that a consortium of investors to which it is part of has, through the special purpose vehicle ("Offeror") owned as to approximately 89% by the consortium and as to approximately 11% by Aimia Inc. (Toronto Stock Exchange: AIM), completed the acquisition of all the remaining shares of Clear Media Limited ("Clear Media") on September 27th, 2021. As a result, Clear Media is now a wholly-owned subsidiary of the Offeror and the listing of the shares of Clear Media on the Hong Kong Stock Exchange has been withdrawn.
Commenting on the 2021 third quarter revenue, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:
"With +30.5% revenue growth and +28.6% organically, our Q3 2021 group revenue reached €706.5m. This strong rebound, above our expectations despite significant and sometimes unforeseen mobility restrictions (such as regional lockdowns in Asia-Pacific and ongoing international flight restrictions all over the world), demonstrates the growth potential of our media, especially once mobility restrictions are lifted.
By activity, Street Furniture and Billboard (roadside) were strong and already back to Q3 2019 levels in Europe (including the UK), while Transport remained meaningfully impacted by ongoing
restrictions on global international passenger traffic and, to a lesser extent, by lower commuter traffic in public transport than pre-pandemic, although improving throughout the quarter.
By geography, France and Rest of Europe recorded a significant improvement in Q3 2021, driven by roadside. For the United Kingdom, roadside was strong as well while Transport (large segment in the UK) recorded a low level of activity, although significantly improving vs 2020. North America, Asia-Pacific and Rest of the World recorded also a strong rebound vs 2020 but remained the most affected regions across the 3 business segments, mainly due to their Transport exposure and to local mobility restrictions (especially in Asia-Pacific). In China, activities exposed to domestic audiences (mainly metros, buses, domestic airport terminals and street furniture in Hong Kong SAR and Macau SAR), are almost back to pre-Covid levels, while international terminals are still impacted by very low passenger traffic.
Digital Out Of Home (DOOH) grew by +55.8% yoy and reached 24.5% of Group revenue year-todate. We continued to accelerate our digital transformation and maintained our focus on the roll-out of digital screens and on the development of our automated data-driven planning and trading solutions. Programmatic trading gained good momentum via the VIOOH platform which is now connected to 34 DSPs (Demand Side Platforms) and trading in 14 countries.
Given the ongoing rebound, we now expect an organic revenue growth for Q4 2021 of above +20% provided that mobility restrictions do not rise significantly.
As the most digitised global OOH company with our new data-led audience targeting and programmatic solutions, our well diversified portfolio, our ability to win new contracts, the strength of our balance sheet and the high quality of our teams across the world, we believe we are well positioned to benefit from the rebound. We are more than ever confident in the power of our media in an advertising landscape increasingly fragmented and more and more digital and in the role it will play to support the economic recovery as well as to drive positive changes."
Following the adoption of IFRS 11 from January 1 st, 2014, the operating data presented below is adjusted to include our prorata share in companies under joint control. Please refer to the paragraph "Adjusted data" on pages 2 and 3 of this release for the definition of adjusted data and reconciliation with IFRS.
The values shown in the tables are generally expressed in millions of euros. The sum of the rounded amounts or variations calculations may differ, albeit to an insignificant extent, from the reported values.
Adjusted revenue for the third quarter of 2021 increased by +30.5% to €706.5 million compared to €541.2 million in the third quarter of 2020.
Excluding the positive impact from foreign exchange variations and the positive impact from changes in perimeter, adjusted organic revenue increased by +28.6%.
Adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +29.8% in the third quarter of 2021.
| Q3 adjusted revenue | 2021 (€m) | 2020 (€m) | Reported growth |
Organic growth(a) |
|---|---|---|---|---|
| Street Furniture | 369.2 | 281.7 | +31.1% | +29.4% |
| Transport | 231.8 | 172.6 | +34.3% | +32.2% |
| Billboard | 105.5 | 87.0 | +21.3% | +19.0% |
| Total | 706.5 | 541.2 | +30.5% | +28.6% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
| 9-month adjusted revenue |
2021 (€m) | 2020 (€m) | Reported growth |
Organic growth(a) |
|---|---|---|---|---|
| Street Furniture | 930.8 | 761.6 | +22,2% | +21,7% |
| Transport | 570.2 | 595.5 | -4,3% | -2,4% |
| Billboard | 287.9 | 259.6 | +10,9% | +13,6% |
| Total | 1,788.8 | 1,616.7 | +10,6% | +11,5% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
Please note that the geographic comments hereafter refer to organic revenue growth.
Third quarter adjusted revenue increased by +31.1% to €369.2 million (+29.4% on an organic basis). France, UK and Rest of Europe performed strongly in line or above pre-Covid levels. North America, Asia-Pacific and Rest of the World remained affected by local restrictions on mobility linked to Covid19 despite a very strong improvement yoy.
Third quarter adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture were up +32.3% compared to the third quarter of 2020.
Third quarter adjusted revenue increased by +34.3% to €231.8 million (+32.2% on an organic basis), thanks to the rebound in public transport and domestic airports in China and US. All regions are growing positively yoy except France and North America (due to the end of the New-York airport contract).
Third quarter adjusted revenue increased by +21.3% to €105.5 million (+19.0% on an organic basis). All regions are growing strongly yoy except France.
Under IFRS 11, applicable from January 1st, 2014, companies under joint control are accounted for using the equity method.
However, in order to reflect the business reality of the Group, operating data of the companies under joint control will continue to be proportionately integrated in the operating management reports used by directors to monitor the activity, allocate resources and measure performance.
Consequently, pursuant to IFRS 8, Segment Reporting presented in the financial statements complies with the Group's internal information, and the Group's external financial communication therefore relies on this operating financial information. Financial information and comments are therefore based on "adjusted" data, consistent with historical data prior to 2014, which is reconciled with IFRS financial statements.
In Q3 2021, the impact of IFRS 11 on adjusted revenue was -€59.4 million (-€46.2 million in Q3 2020), leaving IFRS revenue at €647.1 million (€495.0 million in Q3 2020).
For the first nine months of 2021, the impact of IFRS 11 on adjusted revenue was -€147.4 million (-€153.1 million for the first nine months of 2020), leaving IFRS revenue at €1,641.5 million (€1,463.6 million for the first nine months of 2020).
The Group's organic growth corresponds to the adjusted revenue growth excluding foreign exchange impact and perimeter effect. The reference fiscal year remains unchanged regarding the reported figures, and the organic growth is calculated by converting the revenue of the current fiscal year at the average exchange rates of the previous year and taking into account the perimeter variations prorata temporis, but including revenue variations from the gains of new contracts and the losses of contracts previously held in our portfolio.
| €m | Q1 | Q2 | Q3 | 9M | |
|---|---|---|---|---|---|
| 2020 adjusted revenue | (a) | 723.6 | 351.9 | 541.2 | 1,616.7 |
| 2021 IFRS revenue | (b) | 416.7 | 577.7 | 647.1 | 1,641.5 |
| IFRS 11 impacts | (c) | 37.6 | 50.3 | 59.4 | 147.4 |
| 2021 adjusted revenue | (d) = (b) + (c) | 454.3 | 628.1 | 706.5 | 1,788.8 |
| Currency impacts | (e) | 10.6 | 4.8 | -6.6 | 8.8 |
| 2021 adjusted revenue at 2020 exchange rates |
(f) = (d) + (e) | 464.9 | 632.8 | 699.9 | 1,797.6 |
| Change in scope | (g) | 8.0 | 1.0 | -3.8 | 5.2 |
| 2021 adjusted organic revenue |
(h) = (f) + (g) | 472.9 | 634.0 | 696.1 | 1,802.9 |
| Organic growth | (i) = (h) / (a) - 1 |
-34.6% | +80.2% | +28.6% | +11.5% |
| €m | Impact of currency as of September 30th, 2021 |
|---|---|
| USD | 5.9 |
| HKD | 5.0 |
| AUD | -6.3 |
| RMB | -3.8 |
| Other | 7.7 |
| Total | 8.8 |
| Average exchange rate | 9M 2021 | 9M 2020 |
|---|---|---|
| USD | 0.8360 | 0.8889 |
| HKD | 0.1076 | 0.1146 |
| AUD | 0.6341 | 0.6014 |
| RMB | 0.1292 | 0.1271 |
This news release may contain some forward-looking statements. These statements are not undertakings as to the future performance of the Company. Although the Company considers that such statements are based on reasonable expectations and assumptions on the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual performance to differ from those indicated or implied in such statements.
These risks and uncertainties include without limitation the risk factors that are described in the annual report registered in France with the French Autorité des Marchés Financiers.
Investors and holders of shares of the Company may obtain copy of such annual report by contacting the Autorité des Marchés Financiers on its website www.amf-france.org or directly on the Company website www.jcdecaux.com.
The Company does not have the obligation and undertakes no obligation to update or revise any of the forward-looking statements.
The evolution of revenues is the major factor which to impact the operating margin, free cash flow or net debt during Q3 2021.
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