Q3 2018 - Business review
Paris, November
8th, 2018 -
JCDecaux SA (Euronext Paris: DEC), the number one outdoor
advertising company worldwide, published today its revenue for the
three months ended September 30th, 2018.
THIRD QUARTER 2018: BUSINESS
HIGHLIGHTS
Key contracts
wins
In August, JCDecaux announced that
it has won, following a competitive tender, the 10-year advertising
street furniture contract for the city of Perpignan (population:
117,000).
In September, JCDecaux announced
the signature of a 5-year deal with Network Rail that will see the
number one outdoor advertising company worldwide deliver an
improved station environment with a 100% digital transport
environment at Network Rail stations.
In September, JCDecaux announced
that it has commissioned the globally renowned Zaha Hadid Design to
create a landmark advertising structure in London that integrates
public art, contemporary design and digital media. Unveiled today,
The Kensington provides brands with a unique communications'
channel in the capital that combines the latest in digital screen
technology with a spectacular, curved double-ribbon stainless steel
design.
In September, JCDecaux announced
that its Japanese subsidiary, MCDecaux (85% owned by JCDecaux and
15% by Mitsubishi Corporation) has been awarded a 20-year Tokyo
advertising bus shelter contract by Odakyu Bus Corporation.
In September, JCDecaux announced
that its wholly-owned subsidiary JCDecaux Advertising (Shanghai)
Co., Ltd., following a competitive tender, has signed the 10-year
advertising contract with Tianjin Metro Resource Investment Co.,
Ltd., the subsidiary of Tianjin Rail Transit Group. The two parties
will establish a joint venture (60% owned by JCDecaux and 40% by
the Metro) for the operation and management of advertising on Lines
5 and 6 in Tianjin Metro.
In July, JCDecaux announced that
JCDecaux Côte d'Ivoire, joint venture jointly owned with Bolloré
Group has signed a 20-year contract with SOTRA, the Abidjan
Transport Company ("Société des Transports Abidjanais"), for the
implementation of a street furniture advertising program (bus
shelters and signposts) as well as advertising operations for
SOTRA's different transport networks (buses, train stations, bus
terminals, and water buses) in the Abidjan district (nearly 5
million inhabitants).
In July, JCDecaux announced that
JCDecaux Côte d'Ivoire, joint venture jointly owned with Bolloré
Group has signed a 20-year contract for a street furniture
advertising program with Cocody (around 800,000 inhabitants).
Acquisitions,
divestitures and financial investments
In August and September, JCDecaux
did several press releases regarding APN Outdoor acquisition, of
which the decision of the ACCC (Australian Competition and Consumer
Commission) to grant clearance of JCDecaux's acquisition of APN
Outdoor, the decision of the Federal Court of Australia approving
the dispatch of the scheme booklet to the shareholders and the
decision of the Australian Foreign Investment Review Board (FIRB)
indicating that the Commonwealth of Australia has no objection to
JCDecaux's acquisition of APN Outdoor.
In July, JCDecaux announced that
it has acquired 100% of Corameq, a holding company of Eumex, after
acquiring the stakes of the two founders and noncontrolling
shareholders: Antonio Torres and Carlos de Meer.
THIRD QUARTER 2018 AND
OUTLOOK
Following the adoption of IFRS 11
from January 1st, 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 page 3 of this
release for the definition of adjusted data and reconciliation with
IFRS.
The 2017 comparative figures are restated from the retrospective
application of IFRS 15 "Revenue from Contracts with
Customers", applicable from January 1st, 2018.
The application of IFRS 15 leads to the change in presentation of
invoices relating to advertising taxes. The impact on previously
published Q3 2017 and the first nine months of 2017 figures are
+5.1 million and +€15.1 million on adjusted revenue,
respectively.
Adjusted revenue for the third
quarter of 2018 increased by +6.2% to €867.7 million compared
to €817.1 million in Q3 2017.
Excluding the negative impact from foreign exchange variations and
the positive impact from changes in perimeter, adjusted organic
revenue grew by +7.3%.
Adjusted organic advertising revenue, excluding revenue related to
sale, rental and maintenance of street furniture and advertising
displays, increased by +8.0% in the third quarter of 2018.
Q3 adjusted revenue |
2018 (€m) |
2017 (€m) |
Reported growth |
Organic growth(a) |
Street
Furniture |
365.0 |
362.5 |
+0.7% |
+2.3% |
Transport |
384.9 |
335.3 |
+14.8% |
+15.5% |
Billboard |
117.8 |
119.3 |
-1.3% |
-0.5% |
Total |
867.7 |
817.1 |
+6.2% |
+7.3% |
-
Excluding
acquisitions/divestitures and the impact of foreign
exchange
9-month adjusted
revenue |
2018 (€m) |
2017 (€m) |
Reported growth |
Organic growth(a) |
Street
Furniture |
1,107.7 |
1,114.1 |
-0.6% |
+2.7% |
Transport |
1,044.3 |
987.0 |
+5.8% |
+9.9% |
Billboard |
359.0 |
367.4 |
-2.3% |
-0.8% |
Total |
2,511.0 |
2,468.5 |
+1.7% |
+5.1% |
-
Excluding
acquisitions/divestitures and the impact of foreign
exchange
Please note that the geographic
comments hereafter refer to organic revenue growth.
STREET
FURNITURE
Third quarter adjusted revenue
increased by +0.7% to €365.0 million (+2.3% on an organic
basis). Europe (including France and the UK) was slightly up,
negatively affected by the cancellation of the Paris "City
Information Panels" interim contract in France. Asia-Pacific was up
strongly with a double-digit growth, mainly driven by our new
contracts in Australia. North America was up. The Rest of the World
was down.
Third quarter adjusted organic advertising revenue, excluding
revenue related to sale, rental and maintenance of street furniture
were up +3.6% compared to the third quarter of 2017.
TRANSPORT
Third quarter adjusted revenue
increased by +14.8% to €384.9 million (+15.5% on an organic
basis). Europe (including France and the UK), Asia-Pacific and
North America delivered a strong double-digit growth. The Rest of
the World showed negative growth.
BILLBOARD
Third quarter adjusted revenue
decreased by -1.3% to €117.8 million (-0.5% on an organic
basis). Europe (including France and the UK) was down, affected by
the on-going footprint reduction in our UK traditional portfolio,
while our UK digital billboard business remained strong and our
performance in France was good. The Rest of the World and North
America were up.
Commenting on the 2018 third
quarter revenue, Jean-Charles Decaux, Chairman of
the Executive Board and Co-CEO of JCDecaux, said:
"Our strong Q3
organic revenue growth rate of +7.3% is our second best quarterly
revenue performance since 2011 and reflects both, the strong
performance of our Transport advertising business in China, as well
the successful on-going digitisation of our prime OOH media assets
across all business divisions. Street Furniture's organic revenue
growth of +2.3% was mainly driven by a +37.5% digital revenue
increase, while analogue revenue continued to be negatively
affected by the unexpected cancellation of the Paris "City
Information Panels" interim contract in France. Transport's organic
revenue growth rate of +15.5% was driven by both, a double-digit
revenue growth in China combined with a good sales performance in
Europe as well as in North America, and digital growing at +48.6%.
Our slight organic revenue decline of -0.5% in our Billboard
division was mainly due to the on-going dismantling of traditional
billboard panels in the UK while Group digital billboard revenue
grew at +29.6% and our performance in France was good.
The closing of
the APN Outdoor acquisition on October 31st, 2018 is
paving the way for JCDecaux to grow its OOH market share close to
40% in Australia which is the world's 7th largest
media market with a significant exposure to DOOH (c.50% of outdoor
advertising revenue).
As far as Q4 2018
is concerned, and bearing in mind the strong Q4 2017 as well as a
soft current trading in our metro business in China in Q4 2018, we
expect our adjusted organic revenue growth rate to be at around +4%
leading to a full year organic revenue growth
rate around +4.5%.
In a media
landscape increasingly fragmented, out-of-home advertising
reinforces its attractiveness. With our accelerating exposure to
faster-growth markets, our growing premium digital portfolio
combined with a new data-led audience targeting platform, our
ability to win new contracts and the high quality of our teams
across the world, we believe we are well positioned to outperform
the advertising market and increase our leadership position in the
outdoor advertising industry through profitable market share gains.
The strength of our balance sheet is a key competitive advantage
that will allow us to pursue further external growth opportunities
as they arise and to continue to invest significantly in
digital."
ADJUSTED
DATA
Under IFRS 11, applicable from
1st January,
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 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 2018, the impact of IFRS 11 on adjusted revenue was
-€108.0 million (-€99.9 million in Q3 2017), leaving
IFRS revenue at €759.7 million (€717.2 million in Q3
2017).
For the first nine months of 2018, the impact of IFRS 11 on
adjusted revenue was -€303.5 million (-€300.5 million for
the first nine months of 2017), leaving IFRS revenue at
€2,207.5 million (€2,168.0 million for the first nine
months of 2017).
ORGANIC GROWTH
DEFINITION
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 |
9-month |
|
|
|
|
|
|
2017 adjusted revenue |
(a) |
762.6 |
888.8 |
817.1 |
2,468.5 |
|
|
|
|
|
|
2018 IFRS revenue |
(b) |
658.0 |
789.8 |
759.7 |
2,207.5 |
IFRS 11
impacts |
(c) |
84.5 |
111.0 |
108.0 |
303.5 |
2018 adjusted revenue |
(d) = (b) + (c) |
742.5 |
900.8 |
867.7 |
2,511.0 |
Currency
impacts |
(e) |
42.1 |
32.2 |
10.6 |
84.9 |
2018 adjusted revenue at 2017 exchange rates |
(f) = (d) + (e) |
784.6 |
933.0 |
878.3 |
2,595.9 |
Change in
scope |
(g) |
(0.3) |
(0.5) |
(1.5) |
(2.3) |
2018 adjusted organic revenue |
(h) = (f) + (g) |
784.3 |
932.5 |
876.8 |
2,593.6 |
|
|
|
|
|
|
Organic growth |
(i) = (h) / (a) |
+2.8% |
+4.9% |
+7.3% |
+5.1% |
€m |
Impact of currency
as of September 30th,
2018 |
|
|
USD |
14.2 |
HKD |
11.8 |
BRL |
11.3 |
RMB |
9.0 |
GBP |
3.3 |
Other |
35.3 |
|
|
Total |
84.9 |
Average exchange rate |
9-month 2018 |
9-month 2017 |
|
|
|
USD |
0.8374 |
0.8976 |
HKD |
0.1068 |
0.1152 |
BRL |
0.2327 |
0.2829 |
RMB |
0.1286 |
0.1320 |
GBP |
1.1312 |
1.1452 |
Forward looking
statements
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.
FINANCIAL SITUATION
The evolution of revenues is the
major factor which to impact the operating margin, free cash flow
or net debt during Q3 2018.
08-11-18 # Q3 2018_Business
Review_UK_vDEF
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: JCDecaux via Globenewswire
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