JCDecaux : Q3 2023 – Business review
Q3 2023 – Business review
Paris, November
9th, 2023 – JCDecaux SE
(Euronext Paris: DEC), the number one outdoor advertising company
worldwide, published today this report for the nine months ended
September 30th, 2023.
THIRD QUARTER 2023: BUSINESS HIGHLIGHTS
Key contracts wins
In September, JCDecaux SE announced that,
following two different competitive tenders, it has won the bus
shelter contract of Toulouse Metropole (population: 796,203) and
the street furniture contract of the City of Toulouse (population:
471,941), the fourth largest city in France and the capital of the
Occitanie region for 15 years.
In September, JCDecaux SE announced that,
following a competitive tender, it has won the contract for the
self-service bikes in the City of Toulouse (the fourth-largest city
in France) for 12 years. 50% of the new fleet will eventually
comprise electric-assist bikes with onboard batteries that can be
recharged at the stations.
Other events
In July, JCDecaux SE announced that it has
teamed up with Senfa, a subsidiary of the Chargeurs group, to
develop a PVC-free advertising fabric. Dubbed "Pearlflex", this new
product will be available from September 2023. Compared with
current practices, this solution offers several advantages, in
particular a reduced carbon footprint and optimised end-of-life
cycle treatment.
In September, Jean-Charles Decaux, co-CEO of
JCDecaux, and Mr Jean Todt Special Envoy of the United Nations
Secretary-General's for Road Safety have launched a new UN Global
Road Safety campaign to address road traffic crashes, which are the
leading cause of death for people aged 5 to 29 around the world.
Over the next two years, the campaign will appear on billboards and
in public areas in 80 countries worldwide thanks to a global
partnership with JCDecaux. Displayed in about 1,000 cities,
the campaign will be translated into 30 languages.
In September, JCDecaux SE announced the
appointment of Sylvain Le Borgne at JCDecaux as JCDecaux Group
Chief Data Officer.
THIRD QUARTER 2023 REVENUE AND OUTLOOK
Commenting on the 2023 third quarter revenue,
Jean-François Decaux, Chairman of the Executive Board and
Co-CEO of JCDecaux, said:
“Our Q3 group revenue grew by +5.8%, +8.4% on an
organic basis, to reach €855.0 million, above our
expectations, thanks to solid trading momentum in most geographies.
While China continued to experience a soft recovery, our
third-quarter revenue outside China grew by +9.9% organically and
exceeded the 2019 level for the first time. This performance has
been driven by the strong growth of digital, the ongoing recovery
of our transport activities and by the continued growth of street
furniture.
Digital Out of Home (DOOH) grew strongly at
+27.9%, +31.1% on an organic basis, to reach a record 36.2% of
Group revenue vs 29.9% in Q3 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).
All activities grew positively organically.
Street Furniture delivered a solid organic revenue growth of +5.3%
driven by digital and a continued high demand from advertisers.
Transport’s organic revenue growth reached +15.4% reflecting the
global airport passenger traffic recovery over the period almost
back to pre-covid level except international traffic in China.
Billboard grew by +2.5% organically driven in particular by its
most digitised markets.
All geographies grew positively organically
including UK and Rest of the World growing double-digit. France,
Rest of Europe and Rest of the World were above their 2019 revenue
levels, while Asia was still significantly behind mainly due to
China which remained impacted by a soft recovery in consumer
spending and by international air traffic still c.50% below
pre-covid levels as well as by the non-renewal of the Guangzhou
airport and metro contracts.
As far as Q4 is concerned, we now expect an
organic revenue growth rate at around +6% partly driven by the
ongoing recovery of Transport.
We are confident that Out of Home (OOH) will
continue to grow its market share in a fragmented media landscape
with Digital Out of Home (DOOH) being the second fastest growing
media segment. JCDecaux as the industry leader and the most
digitised global OOH Media company is well positioned to benefit
from this digital transformation.”
Following the adoption of IFRS 11 from
January 1st, 2014, the operating data presented below are
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 2023 third quarter
increased by +5.8% to €855.0 million from €808.4 million
in the same period last year. On an organic basis
(i.e. excluding the negative impact of €33.4 million from
foreign exchange variations and the positive impact of €12.2
million from changes in perimeter this quarter), adjusted revenue
increased by +8.4%. Adjusted advertising revenue, excluding revenue
related to sale, rental and maintenance of street furniture and
advertising displays, increased by +8.7% on an organic basis in the
third quarter of 2023.
Q3 adjusted revenue |
2023 (€m) |
2022 (€m) |
Reported growth |
Organic growth(a) |
Street Furniture |
432.0 |
412.5 |
+4.7% |
+5.3% |
Transport |
302.1 |
277.7 |
+8.8% |
+15.4% |
Billboard |
120.8 |
118.1 |
+2.3% |
+2.5% |
Total |
855.0 |
808.4 |
+5.8% |
+8.4% |
(a) Excluding acquisitions/divestitures and the impact of
foreign exchange
9-month adjusted revenue |
2023 (€m) |
2022 (€m) |
Reported growth |
Organic growth(a) |
Street Furniture |
1,254.7 |
1,201.9 |
+4.4% |
+4.3% |
Transport |
838.8 |
736.8 |
+13.9% |
+17.6% |
Billboard |
346.5 |
344.5 |
+0.6% |
+0.5% |
Total |
2,440.0 |
2,283.2 |
+6.9% |
+8.0% |
(a) Excluding acquisitions/divestitures and the impact of
foreign exchange
Please note that the geographic comments below
refer to organic revenue growth.
STREET FURNITURE
Third quarter adjusted revenue increased by
+4.7% to €432.0 million (+5.3% on an organic basis),
significantly above 2019 revenue levels. All geographies grew
strongly, including double-digit for France and Asia-Pacific while
North America posted a negative revenue growth year-on-year
including the non-renewal of the street furniture contract with the
city of Los Angeles (50/50 JV with Outfront).
Third quarter adjusted advertising revenue,
excluding revenue related to sale, rental and maintenance of street
furniture were up +5.4% on an organic basis.
TRANSPORT
Transport remained significantly below 2019
revenue levels mainly due to China. France, Rest of the World and
North America (excluding the non-renewal of the New-York airport
contract) were significantly above the 2019 revenue levels.
Third quarter adjusted revenue increased by
+8.8% to €302.1 million, +15.4% on an organic basis reflecting
the strong recovery of air travel and the rebound of commuter
traffic in public transport. France, UK, North America,
Asia-Pacific excluding China and Rest of the World grew
double-digit year-on-year. Rest of Europe grew at a low
single-digit pace.
BILLBOARD
Third quarter adjusted revenue increased by
+2.3% to €120.8 million, +2.5% on an organic basis including
UK growing double-digit and Asia-Pacific high single-digit driven
by our digital billboard business. North America and Asia Pacific
were double-digit above Q3 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, which is
reconciled with IFRS financial statements.In Q3 2023, the
impact of IFRS 11 on adjusted revenue was -€66.0 million
(-€60.9 million in Q3 2022), leaving IFRS revenue at
€789.0 million (€747.5 million in Q3 2022).For the
first nine months of 2023, the impact of IFRS 11 on adjusted
revenue was -€184.1 million(-€167.8 million for the first
nine months of 2022), leaving IFRS revenue at €2,255.9 million
(€2,115.4 million for the first nine months of 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 |
Q2 |
H1 |
Q3 |
9M |
|
|
|
|
|
|
|
2022 adjusted revenue |
(a) |
683.0 |
791.8 |
1,474.8 |
808.4 |
2,283.2 |
|
|
|
|
|
|
|
2023 IFRS revenue |
(b) |
671.8 |
795.2 |
1,466.9 |
789.0 |
2,255.9 |
IFRS 11 impacts |
(c) |
49.5 |
68.6 |
118.1 |
66.0 |
184.1 |
2023 adjusted revenue |
(d) = (b) + (c) |
721.3 |
863.7 |
1,585.0 |
855.0 |
2,440.0 |
|
|
|
|
|
|
|
Currency impacts |
(e) |
1.2 |
19.1 |
20.3 |
33.4 |
53.7 |
2023 adjusted revenue at 2022 exchange rates |
(f) = (d) + (e) |
722.5 |
882,8 |
1,605.3 |
888.4 |
2,493.7 |
Change in scope |
(g) |
-5.7 |
-9.3 |
-15.0 |
-12.2 |
-27.2 |
2023 adjusted organic revenue |
(h) = (f) + (g) |
716.8 |
873.6 |
1,590.3 |
876.2 |
2,466.6 |
|
|
|
|
|
|
|
Organic growth |
(i) = (h)/(a)-1 |
+5.0% |
+10.3% |
+7.8% |
+8.4% |
+8.0% |
€m |
Impact of currencyas of September
30th, 2023 |
|
|
CNY |
14.8 |
AUD |
12.5 |
GBP |
6.8 |
USD |
3.7 |
Others |
15.9 |
|
|
Total |
53.7 |
Average exchange rate |
9M 2023 |
9M 2022 |
|
|
|
CNY |
0.1312 |
0.1425 |
AUD |
0.6170 |
0.6647 |
GBP |
1.1484 |
1.1804 |
USD |
0.9230 |
0.9400 |
Forward looking statementsThis
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 universal registration document
registered in France with the French Autorité des Marchés
Financiers.Investors and holders of shares of the Company may
obtain copy of such universal registration document 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
that impacted the operating margin, free cash flow or net debt
during Q3 2023.
- 09-11-23 # Q3 2023_Business Review_UK
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