JCDecaux:Q3 2020 – Business review
Q3 2020 – Business review
Paris, November 5th, 2020 – JCDecaux
SA (Euronext Paris: DEC), the number one outdoor
advertising company worldwide, published today its business review
for the third quarter of 2020.
THIRD QUARTER 2020: BUSINESS HIGHLIGHTS
Key contracts wins
·Rest of the World
In August, JCDecaux announced that it has won,
following a public bidding process, the 20-year street furniture
contract of Campinas (population: 1.2 million), the third most
populated municipality in the state of São Paulo. This exclusive
contract covers the conception, installation, management,
maintenance and advertising operation of 140 digital clocks, all of
which will offer creative and customized solutions to meet local
advertising demand.
Other
·Rest of the World
In July, JCDecaux announced the sale of its 25%
minority stake held by its subsidiary JCDecaux CEE, in ROOH
B.V., the holding company of Russ Outdoor activities in Russia to
Stinn, current main shareholder of ROOH B.V.
THIRD QUARTER 2020 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 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 2020
decreased by -41.5% to €541.2 million compared to
€925.8 million in the third quarter of 2019.Excluding the
negative impact from foreign exchange variations and the negative
impact from changes in perimeter, adjusted organic revenue declined
by -37.9%.Adjusted organic advertising revenue, excluding revenue
related to sale, rental and maintenance of street furniture and
advertising displays, decreased by -39.3% in the third quarter of
2020.
Q3 adjusted revenue |
2020 (€m) |
2019 (€m) |
Reported growth |
Organic growth(a) |
Street Furniture |
281.7 |
390.4 |
-27.8% |
-26.5% |
Transport |
172.6 |
400.7 |
-56.9% |
-52.0% |
Billboard |
87.0 |
134.8 |
-35.5% |
-28.7% |
Total |
541.2 |
925.8 |
-41.5% |
-37.9% |
(a) Excluding acquisitions/divestitures and the impact of
foreign exchange
9-month
adjusted revenue |
2020 (€m) |
2019 (€m) |
Reported growth |
Organic growth(a) |
Street Furniture |
761.6 |
1,180.9 |
-35.5% |
-34.8% |
Transport |
595.5 |
1,177.7 |
-49.4% |
-46.9% |
Billboard |
259.6 |
409.5 |
-36.6% |
-34.3% |
Total |
1,616.7 |
2,768.1 |
-41.6% |
-39.9% |
(a) 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 decreased by
-27.8% to €281.7 million (-26.5% on an organic basis), but
with diverging trends market by market, depending on measures taken
by national governments and local authorities such as lockdowns or
curfews. France and the Rest of Europe performed much better than
UK, North America, Asia-Pacific and the Rest of the World thanks to
better city audience figures, which were, in some countries, almost
back to pre‑Covid level.Third quarter adjusted organic advertising
revenue, excluding revenue related to sale, rental and maintenance
of street furniture were down -28.7% compared to the third quarter
of 2019.
TRANSPORT
Third quarter adjusted revenue decreased by
-56.9% to €172.6 million (-52.0% on an organic basis),
significantly impacted by the Covid-19 outbreak, reflecting a
strong decline globally in both airport passenger traffic as well
as public transport commuting. UK, the Rest of the World and North
America were the most affected regions. In Mainland China, the
on-going recovery in domestic traffic continued, in both metros and
airports which were almost at pre-Covid audience level towards the
end of the quarter but with advertising revenue lagging, while
international air traffic remained highly impacted.
BILLBOARD
Third quarter adjusted revenue decreased by
-35.5% to €87.0 million (-28.7% on an organic basis), but with
diverging trends market by market as well, depending on measures
taken by national governments and local authorities. UK and
Asia-Pacific were the most affected regions while France was the
least affected.
Commenting on the 2020 third quarter revenue,
Jean-Charles Decaux, Chairman of the Executive Board and
Co-CEO of JCDecaux, said:
“Our Q3 2020 organic revenue decline at
-37.9% was less than Q2 2020 (-63.4%) but remained highly
affected by the Covid-19 pandemic. This improvement was driven by
the post-lockdown urban audience recovery which was nonetheless not
the same all over the world. This explains the better performance
of both Street Furniture and Billboard, while Transport remained
meaningfully impacted by a significant decline globally in airport
passenger traffic and, to a lesser extent, in public transport
commuting.
By geography, France and the Rest of Europe
recorded green shoots, mainly in Street Furniture. The improvement
over the third quarter in Mainland China in businesses exposed to
domestic audiences which are almost back to pre-Covid level, mainly
metros and domestic airport terminals, was offset by the poor
performance in our airport business related to international
traffic which remained heavily affected by little international
traffic. North America, the Rest of the World and UK were the most
affected regions across the 3 business segments.
As far as digital revenue, which represents
23.6% of Group revenue by the end of September 2020, is
concerned, programmatic sales, which are still a very small part of
our business, achieved their best performance ever during the
quarter, through the VIOOH trading platform which is now connected
to 30 DSPs (Demand Side Platforms)
While we do not see any real change in current
trading compared to Q3 2020 but with Covid‑19 cases growth
throughout the world triggering new mobility restrictions such as
lockdowns, curfews, closures of restaurants, cinemas, … it
remains impossible to give any guidance for Q4 2020.
In order to mitigate the revenue decline,
JCDecaux remains highly focused and proactive in dedicated actions
including but not limited to rents & fees reliefs, severe cost
management, reduced capital investment, tight control over working
capital requirement and debt refinancing.
Finally, I would like to sincerely thank for the
hard work, commitment and motivation of our teams across the
world.
In a media landscape increasingly fragmented and
more and more digital, out-of-home and digital out‑of‑home
advertising reinforce its attractiveness. As the most digitised
global OOH company with our new data-led audience targeting and
programmatic platform, 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.”
ADJUSTED DATA
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 2020, the impact of IFRS 11 on adjusted
revenue was -€46.2 million (-€93.7 million in
Q3 2019), leaving IFRS revenue at €495.0 million
(€832.1 million in Q3 2019).For the first nine months of
2020, the impact of IFRS 11 on adjusted revenue was
-€153.1 million (-€284.6 million for the first nine
months of 2019), leaving IFRS revenue at €1,463.6 million
(€2,483.5 million for the first nine months of 2019).
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 |
9M |
2019 adjusted revenue |
(a) |
840.0 |
1,002.3 |
925.8 |
2,768.1 |
2020 IFRS revenue |
(b) |
658.2 |
310.4 |
495.0 |
1,463.6 |
IFRS 11 impacts |
(c) |
65.4 |
41.5 |
46.2 |
153.1 |
2020 adjusted revenue |
(d) = (b) + (c) |
723.6 |
351.8 |
541.2 |
1,616.7 |
Currency impacts |
(e) |
1.7 |
8.0 |
15.5 |
25.2 |
2020 adjusted revenue at 2019 exchange rates |
(f) = (d) + (e) |
725.3 |
359.9 |
556.7 |
1,641.9 |
Change in scope |
(g) |
(2.3) |
7.0 |
18.4 |
23.1 |
2020 adjusted organic revenue |
(h) = (f) + (g) |
723.0 |
366.8 |
575.2 |
1,665.0 |
Organic growth |
(i) = (h) / (a) |
-13.9% |
-63.4% |
-37.9% |
-39.9% |
€m |
Impact of currency as of September 30th, 2020 |
BRL |
7.2 |
RMB |
3.8 |
AUD |
3.2 |
MXN |
1.9 |
Other |
9.1 |
Total |
25.2 |
Average exchange rate |
9M 2020 |
9M 2019 |
BRL |
0.1751 |
0.2291 |
RMB |
0.1271 |
0.1296 |
AUD |
0.6014 |
0.6220 |
MXN |
0.0408 |
0.0462 |
Forward looking statementsThis
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 2020.
- 05-11-20 # Q3 2020_Business Review_UK_vDEF
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