JCDecaux : Q1 2023 - Business review
Q1
2023 –
Business review
Paris, May
11th,
2023 – JCDecaux
SE (Euronext Paris: DEC), the number one
outdoor advertising company worldwide, published today its revenue
for the three months ended March 31st, 2023.
FIRST QUARTER
2023: BUSINESS HIGHLIGHTS
Key contracts
wins
In February, JCDecaux SE announced that its
Norwegian subsidiary “JCDecaux Norge AS” has been awarded a 10-year
contract for the advertising street furniture, including digital in
Stavanger, which is the oil capital and the centre of the third
largest urban area in Norway.
In February, JCDecaux SE announced that JCDecaux
Eesti OÜ, its Estonian subsidiary, has won an exclusive 21-year
advertising street furniture contract with Tallinn – population
452,000, the capital city of Estonia.
In January, JCDecaux SE announced the renewal of
its advertising concession with Singapore Changi Airport for 7
years, from 2023 until 2029, with an option for further 5 years’
extension to 2034. This is the 3rd contract since the concession
started in 2011, in a partnership that will span more than 20
years.
In January, JCDecaux SE announced that its JV
subsidiary, JCDecaux (Macau) Limited, created in partnership with
HN Group (JCDecaux 80% / HN Group 20%), has been awarded a 15-year
exclusive contract for the advertising street furniture in the
Macau Special Administrative Region of the People's Republic of
China (population: 682,000). This new concession covers the entire
inventory of about 150 Bus Shelters and 150 City Information Panels
(CIPs).
In February, JCDecaux SE, announced that its
subsidiary JCDecaux India – 100% owned by JCDecaux – has won an
exclusive 12-year contract to advertise inside and outside
Bengaluru’s Kempegowda International Airport (KIAB / BLR Airport).
The award follows a competitive tender.
In January, JCDecaux SE announced the signing of
a 10-year contract with CCR Metro Bahia to take over the
advertising operations of the two metro lines in Salvador (Brazil)
– Red-Line 1 and Blue-Line 2. This new partnership, effective in
March 2023, sustains the expansion strategy of JCDecaux,
reinforcing its position as the largest metro media player in
Brazil.
Other events
In January, JCDecaux SE announced the report of
a very strong performance of its self-service bike schemes
throughout the world in 2022, with total rentals up 21% compared
with 2021. In France, the number of rentals has increased by 14%
compared to last year.
In January, JCDecaux SE announced the signing of
a global strategic partnership with the United Nations Development
Program (UNDP) to support the “UN Joint Sustainable Development
Goals Fund” (Joint SDG Fund), a Fund devised to stimulate the
development of Sustainable Development Goals (SDGs) worldwide.
In February, JCDecaux SE announced that Elina
Valtia has been appointed as the new CEO of JCDecaux Finland
starting from 1st April 2023.
FIRST QUARTER
2023 AND
OUTLOOK
Commenting on the 2023 first quarter revenue,
Jean-Charles Decaux, Chairman of the Executive Board and
Co-CEO of JCDecaux, said:
“Our Q1 2023 Group revenue grew by +5.6%, +5.0%
on an organic basis, to reach €721.3 million, above our
expectations driven by a strong digital revenue growth, an
increasing revenue growth throughout the quarter and, as
anticipated, an inflection point from March in China. Our Q1 2023
organic revenue growth reached +8.2% outside China and -14.0% in
China.
Digital Out-Of-Home (DOOH) grew by +13.3% in
reported growth and +13.6% organically in Q1 2023, to reach 31.2%
of Group revenue vs 29.1% in Q1 2022 including a continued strong
momentum of the programmatic advertising sales ecosystem through
the VIOOH SSP (Supply Side Platform) and Displayce DSP (Demand Side
Platform).
By activity, Street Furniture was strong at
+4.1% organically in Q1 2023 and was above Q1 2019 globally
including double-digit above Q1 2019 in France and Rest of Europe;
Billboard grew by +1.0% on an organic basis in Q1 2023, above Q1
2019 in Asia-Pacific and North-America; Transport grew strongly by
+7.9% organically, including a double-digit revenue growth in
France, Rest of Europe, UK and Rest of the World reflecting the
ongoing audience recovery in both airports and public transport
across most regions with Rest of the World above 2019 in Q1. From a
historically low level of activity, China improved throughout the
quarter following the end of mobility restrictions at the end of
2022.
By geography, Rest of the World, Asia-Pacific
excluding China, France and Rest of Europe were the fastest growing
regions while revenue for North America and China decreased in Q1
2023 but the trading momentum improved significantly in these two
geographies in March. As far as Q2 is concerned, we expect organic
revenue growth around +9% mostly driven by a strong digital growth
and a gradual recovery in China while advertising sales in most
geographies remain solid.In China, we are seeing encouraging signs
of recovery with domestic mobility now back to normal leading us to
a strong year-on-year double-digit revenue growth in Q2. As
domestic air travel reached an all-time high for the Labor Day
holiday, our domestic airport business is expected to almost
recover to pre-Covid levels in Q2, in line with the air traffic
rebound. Our strong revenue growth in China for Q2 is nevertheless
affected by low international air traffic due to much reduced
international airlines connections and the non-renewal of the
Guangzhou International Terminal 2 airport advertising contract as
well as our decision to mutually terminate our joint venture with
Guangzhou metro.
As the most digitised global OOH media 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, the high quality of
our teams across the world and our recognised ESG excellence, 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 drive economic growth as
well as positive changes.”
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” 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 first quarter 2023 increased by
+5.6% to €721.3 million compared to €683.0 million in the
first quarter of 2022.Excluding the negative impact from foreign
exchange variations and the positive impact of changes in
perimeter, adjusted revenue increased by +5.0%.
Adjusted advertising revenue, excluding revenue
related to sale, rental and maintenance of street furniture and
advertising displays, increased by +4.2% on an organic basis in the
first quarter of 2023.
By
activity:
Q1 adjusted
revenue |
2023 (€m) |
2022 (€m) |
Reported growth |
Organic
growth(a) |
Street Furniture |
364.3 |
347.5 |
+4.8% |
+4.1% |
Transport |
254.0 |
234.9 |
+8.1% |
+7.9% |
Billboard |
103.0 |
100.6 |
+2.4% |
+1.0% |
Total |
721.3 |
683.0 |
+5.6% |
+5.0% |
a. Excluding acquisitions/divestitures and the impact of foreign
exchange
Please note that the geographic comments below
refer to organic revenue growth.
STREET FURNITURE
First quarter adjusted revenue increased by
+4.8% to €364.3 million (+4.1% on an organic basis). Rest of
the World, France, Rest of Europe and Asia-Pacific were the drivers
of growth while UK and North America registered a single-digit
revenue decrease vs Q1 2022. France, Rest of Europe and Rest of the
World were above Q1 2019 revenue levels. First quarter adjusted
advertising revenue, excluding revenue related to sale, rental and
maintenance of street furniture was up +3.9% on an organic basis
compared to the first quarter of 2022.
TRANSPORT
First quarter adjusted revenue increased by
+8.1% to €254.0 million (+7.9% on an organic basis),
reflecting a rebound in both air passenger traffic and public
transport systems. Most geographies grew double-digit and Rest of
the World was already above Q1 2019 revenue levels. Transport
remained nevertheless meaningfully impacted by the lower level of
mobility compared to pre-Covid levels, particularly for China
international air travel.
BILLBOARD
First quarter adjusted revenue increased by
+2.4% to €103.0 million (+1.0% on an organic basis).
Asia-Pacific and North America were above Q1 2019 revenue
levels.
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 Q1 2023, the impact of IFRS 11 on adjusted
revenue was -€49.5 million (-€54.4 million in
Q1 2022), leaving IFRS revenue at €671.8 million
(€628.5 million in Q1 2022).
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 |
|
|
|
2022 adjusted
revenue |
(a) |
683.0 |
|
|
|
2023 IFRS revenue |
(b) |
671.8 |
IFRS 11 impacts |
(c) |
49.5 |
2023 adjusted
revenue |
(d) = (b) + (c) |
721.3 |
Currency impacts |
(e) |
1.2 |
2023 adjusted revenue at 2022 exchange rates |
(f) = (d) + (e) |
722.5 |
Change in scope |
(g) |
-5.7 |
2023 adjusted
organic revenue |
(h) = (f) + (g) |
716.8 |
|
|
|
Organic growth |
(i) = (h) / (a) –
1 |
+5.0% |
€m |
Impact of currency as of March
31st, 2023 |
|
|
RMB |
1.7 |
USD |
-2.1 |
GBP |
3.7 |
HKD |
-1.1 |
Other |
-1.0 |
|
|
Total |
1.2 |
Average exchange rate |
Q1 2023 |
Q1 2022 |
|
|
|
RMB |
0.1362 |
0.1404 |
USD |
0.9320 |
0.8915 |
GBP |
1.1324 |
1.1956 |
HKD |
0.1189 |
0.1142 |
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 revenue is the major factor
which to impact the operating margin, free cash flow or net debt
during Q1 2023.
- 11-05-23 # Q1 2023_Business Review_UK
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