JCDECAUX SE Q3 2017 - Business review
Paris, November 7th, 2017 - JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, published today its business review for the third quarter of 2017.
THIRD QUARTER 2017: BUSINESS HIGHLIGHTS
Key contracts wins
· France
In September, JCDecaux announced that, following a competitive tender, it has won the 15-year smart street furniture and self-service bike rental contract for Lyon Métropole (population: 1.3 million).
In September, JCDecaux announced that it has won, following competitive tenders, 21 advertising street furniture contracts in France since January 2017: nine in the Ile-de-France region (five new contracts and four renewals or extensions) and twelve in French regions (eight new contracts and four renewals or extensions).
· Rest of Europe - Belgium
In July, JCDecaux announced that its subsidiary, JCDecaux Belgium, has renewed the 7-year exclusive advertising concession for Brussels Airport, following a competitive tender.
· Rest of Europe - Sweden
In September, JCDecaux that the city of Stockholm (population 950,000) has awarded JCDecaux Sweden following a competitive tender the contract for bike sharing funded by advertising street furniture starting in April 2018.
· Rest of the World - Brazil
In July, JCDecaux that it has won, following a competitive tender, the 10-year exclusive advertising concession for the São Paulo Guarulhos International Airport.
· Rest of the World - United Arab Emirates
In July, JCDecaux that it has won with its Emirati partner, DXB Media Advertising, a new street furniture contract in Dubai (population 2.7 million) for 10 years, following a competitive tender by RTA (Roads and Transport Authority). This contract will be exercised jointly by an entity that will be ultimately 75% owned by JCDecaux and 25% by DXB Média Advertising.
· Rest of the World - Bahrain
In September, JCDecaux that it has entered the Bahrain market (population: 1.4 million) with the advertising contract for the Bahrain International Airport, awarded by Bahrain Airport Company (BAC). Operations at the new Airport are planned to commence July 2019.
Other business highlights
· National contract with Vivo
In July, JCDecaux announced the signing of a non-exclusive 10-year framework agreement with Vivo, number one in mobile communications in Brazil with 74 million clients, to deploy Small Cells in JCDecaux street furniture in Brazil.
· JCDecaux OneWorld
In August, JCDecaux announced the opening of a new JCDecaux OneWorld office. The new branch is located in Munich and covers German speaking international customers based in Germany, Austria and Switzerland. The opening of Munich is the newest addition to a network of branch offices that spans around the globe, with London, Paris, New York, Shanghai and San Francisco.
· Nomination
In September, JCDecaux announced that Carole Brozyna-Diagne joined the Group's Finance and Administration Department as Director of Sustainable Development and Quality from 18 September 2017.
THIRD QUARTER 2017 AND OUTLOOK
Following the adoption of IFRS 11 from 1st January, 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.
Adjusted revenue for the third quarter of 2017 increased by +2.4% to €812.0 million compared to €792.7 million in Q3 2016.
Excluding the negative impact from foreign exchange variations and the positive impacts from changes in perimeter, adjusted organic revenue grew by +4.9%.
Adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +4.9% in the third quarter of 2017.
| Q3 adjusted revenue | 2017 (€m) | 2016 (€m) | Reported growth | Organic growth(a) |
| Street Furniture | 360.1 | 341.2 | +5.5% | +7.7% |
| Transport | 335.0 | 331.7 | +1.0% | +5.5% |
| Billboard | 116.9 | 119.8 | -2.4% | -4.5% |
| Total | 812.0 | 792.7 | +2.4% | +4.9% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
| 9-month adjusted revenue | 2017 (€m) | 2016 (€m) | Reported growth | Organic growth(a) |
| Street Furniture | 1,106.6 | 1,067.1 | +3.7% | +4.1% |
| Transport | 986.2 | 986.4 | -0.0% | +1.7% |
| Billboard | 360.6 | 356.5 | +1.2% | -4.4% |
| Total | 2,453.4 | 2,410.0 | +1.8% | +1.9% |
(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 +5.5% to €360.1 million (+7.7% on an organic basis). Europe (including France and the UK) delivered good growth. Asia-Pacific was up. The Rest of the World and North America were up double-digit.
Third quarter adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture were up +8.4% compared to the third quarter of 2016.
TRANSPORT
Third quarter adjusted revenue increased by +1.0% to €335.0 million (+5.5% on an organic basis). Europe (including France and the UK) and Asia-Pacific delivered good growth. North America delivered double-digit growth. The Rest of the World showed negative growth, partly due to strong comparable (mainly the Olympics Games in Rio de Janeiro in 2016).
BILLBOARD
Third quarter adjusted revenue decreased by -2.4% to €116.9 million (-4.5% on an organic basis). Europe (including France and the UK) was down. The Rest of the World was up, benefitting from a solid performance in Latin America. In North America, our iconic digital freeway billboard network in Chicago delivered a strong double-digit growth.
Commenting on the 2017 third quarter revenue, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:
"Our better than expected Q3 organic revenue growth rate of +4.9% reflects both the strong performance of our digital Street Furniture assets which are only available in a small number of cities for the time being as well the recovery of our Transport division driven by the ongoing improvement of our Chinese business. Our Billboard division remains difficult despite a good performance of our premium large-format screens in London, Chicago and Moscow.
France, which remained challenging during the quarter, started to show positive signs of recovery in September while trading conditions in the UK were impacted by the slowdown in the economy. The Rest of Europe and North America remained strong while, as expected, China returned to growth in Q3 with an improving airport advertising business.
As far as Q4 2017 is concerned, our good advertising sales momentum continues and we currently expect our adjusted organic revenue growth rate to be around +4.5% leading to a full year organic revenue growth rate around +2.5%.
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."
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 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 which are reconciled with IFRS financial statements.
In Q3 2017, the impact of IFRS 11 on adjusted revenue was -€99.9 million (-€94.5 million in Q3 2016), leaving IFRS revenue at €712.1 million (€698.2 million in Q3 2016).
For the first nine months of 2017, the impact of IFRS 11 on adjusted revenue was -€300.5 million (-€297.1 million for the first nine months of 2016), leaving IFRS revenue at €2,152.9 million (€2,112.9 million for the first nine months of 2016).
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.
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 Q3 2017.
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
