JCDecaux SA, the number one outdoor advertising company worldwide, has announced its 2020 half year financial results.
According to the outdoor giant, its half year 2020 results’ adjusted revenue was down 41.6% to €1,075.4million, while adjusted organic revenue was down 40.8%, with Q2 at 63.4%. The company recorded an adjusted operating margin of €61.8million and an adjusted EBIT, before impairment charge of -€258.5million. It has a net income group share of €254.9million, including an impairment charge of €55.9million with a positive adjusted free cash flow of €69.5million.
However, JCDecaux did not provide a quarterly guidance on its adjusted organic revenue growth in 2020 due to the Covid-19 pandemic.
Commenting on the 2020 first half-year results, Jean-Charles Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said: “During the Covid-19 lockdown period, the temporary historic drop in urban and transport audiences as well as severe economic uncertainties led companies to react immediately and to reduce their advertising spend in an unprecedented scale. Once lockdown measures were lifted, urban audiences started to recover progressively in street furniture and in billboard, while transport audiences are still lagging significantly, mainly in airports.
“Advertising revenue has, for the time being, not followed the same pace of recovery and we see an important difference between audiences’ levels, which are in some geographies close to pre-Covid-19, and revenue levels which do not yet reflect the positive momentum in urban audiences. Our Group revenue declined by €766.9million reaching €1,075.4million with a decrease in adjusted organic revenue at -40.8%, mainly in Q22020 (-63.4%).”
He continued: “Our H12020 operating margin reduced significantly to -€61.8million. While the Group started the year positively, mainly in street furniture (up +3.9% by the end of February), the performance was hardly hit by the Covid-19 outbreak from March onwards. Immediate and dedicated action was taken on operating and financial levers to mitigate this decline and save cash, including but not limited to rent reliefs, severe cost management, reduced capital investment, tight control over working capital requirement and dividend cancellation.
“Our digital revenue now represents 24.0% of Group revenue, up +10bp for the same period last year. After a solid Q12020 performance, digital revenue declined in Q22020, to post for H12020 a -41.3% decline. We have further reinforced our global leading position by completing the acquisition of a minority stake in Clear Media Limited as part of a consortium of investors (including Han Zi Jing, Chief Executive Officer of Clear Media, Antfin (Hong Kong) Holding Limited and China Wealth Growth.
The company Chairman believes this strategic move combined with the structural long-term growth of the outdoor advertising industry in China will enable the Group to come out of the Covid-19 crisis in a stronger position.
JCDecaux has obtained the maximum AAA score in the Corporate Social Responsibility (CSR) rankings of the Morgan Stanley Capital International (MSCI) ratings agency for the third consecutive year. The ranking confirms the robustness of the CSR practices and sustainable development policy that the company has employed for many years, and also reflects its long-term resilience to environmental, social and governance risks.
Looking forward, the global advertising market remains highly volatile with low visibility. Considering the risk of new waves of Covid-19 and new local lockdowns being implemented, it remains very difficult to give a guidance for Q32020.
Jean-Charles Decaux concluded: “Finally, I would like to thank all of our teams around the world. Our employees have demonstrated exemplary behaviour, with outstanding commitment and solidarity, including salary cuts, despite the challenges they may have faced, professionally and personally, during and after lockdown periods. 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.”