OUT - Earnings call transcript Q3 2018

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Operator

Good day and welcome to the Outfront Media, Incorporated Third Quarter 2018 Earnings Call. At this time, I'd like to turn the conference over to Mr. Gregory Lundberg. Please go ahead, sir.

Gregory Lundberg

Good afternoon, everyone. our quarter joining call. for you XXXX earnings third Thank

Officer. Chairman are Executive Vice On lines of for Financial up today session. we'll Male, financial President a and results, our Chief a Executive the call the Siegel, Jeremy Chief open discussion Matthew Officer; and question-and-answer After and

This forward-looking SEC well. our to statements. factors call that can our forward-looking audio to Web conference from statements Investor in in materially the Relations and will filings, of results our actual Our refer release as including Relevant a earnings call in the comments may materials today an Slide listed find and are our outfrontmedia.com. has After include be could XXXX there today's site. differ these earning archive XX-K. will Presentation concluded, that you section cause Form

and measures our We this reconciliations will on non-GAAP And earnings an on adjusted to made on slide turn release are presentation, of over call. with the the site. Any OIBDA non-GAAP Jeremy. will certain the And today refer will to OIBDA in now the I be other call and to basis. that, appendix Web financial measures financial references of

Jeremy Male

if Thanks, for for quarter Greg and good, the year. you afternoon discuss balance of our could Please and join today outlook view us everyone. a third of the

X% Transit, up the help through Billboard, adjusted basis. a This up and very was strong board, flow a National, satisfying and It total grew XX.X%. profitability quarter to reported X.X% We revenues increased AFFO with a Third across on revenues U.S OIBDA drive quarter. our other. Local, Media

higher of both X% growth basis. main in U.S The and revenues into segment, in had the turn Canada. revenues Let's strength was organic Total a Slide we X. while reported this Media our percentage were over up on on engine

transit fourth from to in swung XX% advertisers. been closely Media consistently being X.X% growth was powering which This back local I U.S billboard, would total. and our quarter, up more the view growth to X.X%. down markets. improving the Local national local was gives and here up of trajectory we’re was time was After every up strength on revenues is grew Slide SlideX that over time our we all and address in represented this while which U.S of on X, the this and quarter. led last business growth. later quarter, mention call. at here, return the will growth for Media this X% like X% Out some with U.S Looking different between National revenues This by seeing to split see quarter we and quarter I in key Media things year-to-date. good has a slight, quarter forward of in the very sharply from you

Lastly double-digit in please other which business, due X. reported in Canadian more nicely, hand Billboard growth to now I up our but increased on performance. on quarter over was will Sports began The call which new XXXX. Matt. basis. accounting within revenues, first the to turn revenues was of notable standard largely to growth Slide X.X% our this We stronger marketing and saw both strong organic on the

Matthew Siegel

and Jeremy Thanks, afternoon. good

up bottom turn categories can of total please X statement, here look largest starting you our two percent income at revenues a the down with our We as that Moving were see the expenses to slide of for at of as transit slightly franchise combined X in we and and revenue lease of improved nearly billboard corporate points expense expenses. levels our and expenses. in other posting our our maintenance percentage

expenses for the same dollar we're translating expense expenses continued growth growth. reflecting In investments levels, quarter, and boots on as our of categories business investments shows national total and sales as OIBDA was very to X, local SG&A future. X.X% While a development million related we basis. force the more in much did well our were ground with on which digital $X.X in this higher strategic increased making Slide see it the X% the

see was You XX. new to Slide XX.X% bridge $XXX.X chart, OIBDA in our of is side the the million. you right On component, in represents in OIBDA/ would far change on a of of this can This by Media quarters U.S margin. up view OIBDA the X.X% also largest show we it the result resources year-over-year the

of Moving lays on capital XX expenditures, were as cash out our to revenues. percent flow. which year-over-year a Slide down

the total U.S XXX billboards digital conversions over from XXX digital in of to end primarily the the Total which XXX growth of our approximately of year. deployed last of Boston Our billboard expenditure will XX total, complete Transit CapEx we by unchanged. System, million in that capital decreased increased displays and XX. digitization further Maintenance September a annual at CapEx has next $XX year reflected now remains slightly, guidance XXX

We lower agreement. was maintenance of also of fees our XX. a driven bridge the Slide to and in weighted CapEx cost to outstanding a and XX.X% OIBDA related higher year. was AFFO last higher debt, to Turning and difficulty] cash to credit to higher [technical from year's overall average mostly this letter MTA up taxes. due growth The debt Interest by show AFFO expense

speak. LTM we as ratio national and continued in payout at was our long-term AFFO the cash compared XX% AFFO average basis of whose is payout Slide that our with by of AFFO our flow confident of growth historical free collations flow, and an and and are by dividends for looking quarter clients. cash year. closely recurring forecast, most our payment compared guidance slower to be adjusted mid single-digit will previous fourth from to the to As our shown this free be low a primarily operations, This on was quarter we of to of which large line we comfortably agencies ratio quarter impacted terms the coverage XX was aligns pressured result with the on results XXX% strong third normalizing ahead is

next last of per Board Our share. month approved was dividend by Directors quarterly $X.XX our of

XX. balance to and liquidity sheet our turn Now on Slide let's

We Our total million We unused at facility. $XXX liquidity any which cash availability equity our not feel of is remains which credit $XXX comprised September the on and XX level program, at market XXXX. and include we until offering unrestricted debt million an was ample requirements unused. future do our our over have maturities revolving at looking this of do liquidity, not when meaningful

net was contract. Our out build of XX. York as In September we to the a the New medium MTA fund digital term, of portion ratio the liquidity align this Xx leverage in

of Slide XX. on an see update our can progress You

the cumulatively across almost commuter of have two third we XXX quarter, rail stations. As displays and deployed XX subway

year-to-date. $XX.X and cash total costs Our $XX.X MTA million in the were project quarter million

back Our let costs. for purchase it $XXX me a including turn other With the future to deployment, estimate and Jeremy. a inventory of remains development that, million rolling startup full-year over for stock

Jeremy Male

on further Thanks, Matt. quarter the Slide fourth And into to early total we growth At double-digit XX. this moving territory. to accelerate point revenue time, in expect

experiencing strong performance billboards, Several categories, driving strong are expect of the We and that and in year. growth half in the factors all the local second in we're further resurgent revenues. national improvements transit,

management, yield and in thirdly, sales continued progress digital, Firstly, execution. secondly,

been increase over has yield, XX% our billboard Only XX.X% transformation. impressive noting revenues XX. and last that It's digital third were around of Let's digital an in revenue, and through and part digital now up represents The digital the billboard of total quarter of start growth worth we're digitized digital growth an inventory. X% with Total conversions with digital beginning three story. on of our has transit percentage be a important points and our Slide new transit increased of of our been year. portfolio just will combination

industries We yield per on as month. same as revenue real growth estate. is metric Another cable, like or that wireless is sort XX. is of of significant This define billboard per Slide driver to our used ARPU the yield seen average other

yield improvements total X.X% in was Our and both digital. static up with

vast cities is driving of our our for and but is execution business a local local talking as In an as majority early We In in upstream that national spending yield valuable out-of-home digital team the a with a just with growth, the proactively. top to we the has in starting mentioned which as to stable clients is now large national who particularly progress, this are cities, national, for compelling by success more today's this in we revenue reflecting our of out-of-home increase well on the working we playbook and strength portfolio are focus majority relevance of for agencies, viewed before, an see in out-of-home also driven of increasing this, strategic our we are media built third a now market have quarter. links And In the the advertisers. importance larger of into very clients. choice initiative. remains more have driving our social their responsible during tremendous team us execution. cities factor managing out-of-home. comfortable the and effective partners larger advertisers resurgence media XX whose mobile are This market. sales helping are signs of closing, and third They’re and increasingly get well from business sales our in of true our largest local, that perform assets markets are advertisers, they we about not been and yield is The being our for

the We quarter guidance let's With quarter open and are very very results, questions. pleased line that, our strong the revenue fourth for our for AFFO. outlook, third financial higher operator, with

Operator

JPMorgan. take Alexia you. Thank Quadrani will from Instructions] We [Operator

Alexia Quadrani

very Thank you much.

two Just may. questions, I if

been question the of color in acceleration the continues you’re you. terms or more provide categories you? you is And second gives conviction for nice driver my to quite in for local more you can Any the well then First, strength really of QX? really in in there for on just good expecting do what’s growth color a bit what that in on what local real growth

Jeremy Male

Yes, for sure.

vast, are on of Francisco be got as the us all for majority the across fair Worth Alexia. our our fine, a honest, BART, in one time in going good. The San business QX, growth from So fine, forward way I look based. national said now around also transit out, well markets. thanks say everything very total for to performance right that benefit we get our business. in is contribute point operation going transit is in pointing a the terms, billboard of too about is going total feel is local as QX and we vast we down. It's very good a new the which broadly first for way that going is the in to and will question, call, To lays we Where on what's

local as that for broadly based of lot us XX categories, sort for and So a that’s the like, doing tailwind the local sort services, also, our if look across you Within geographies think But back fourth category, we you if into we and we services. look if great look us month, business across example, professional the if lawyers, strong trailing a When professional markets. actually assets. categories as our -- of business, the been we into for Internet, financial have I services other, computed we professional are slight a there's quarter. like, to local of within very of lot services of with say,

Alexia Quadrani

it it just have like sort it seasonal? sustainable a is pickup on in stronger the national you side, is a where it's Thank Does mean, to fourth looking one the lot you. think? or I more legs it can of more quarter. , And

Jeremy Male

wouldn’t I say particularly it's seasonal.

we we of remains outside Alexia, which don’t the to quarter when in our rather our national year of of we’re first majority months the guide or was six of look the year, while feel business the general in very forward, just it think six back year, was ahead we about QX, Our comment pickup as behind tend months local slightly as QX. of look first And into slightly positive QX. last trajectory Significant you as of we behind in. this But we business. know -- last business about to good

early having good are national year. next advertisers We conversations with for

are So specifically. as comment I to not say, wanting we absolutely

far as I see. think we we we're pretty feeling can are good about where as

Alexia Quadrani

you much. very Thank

Operator

from Please onto Marci Moving go Ryvicker Wolfe Research. ahead.

Marci Ryvicker

Hi.

It helpful. the thank of additional First incredibly you disclosure. is for all,

fourth anything Just third say that second, as source you and upfront. strength political about the want in a say of not to And the did Jeremy, quarter quarter.

So organic you its should some from political? completely have that we list assume do or

Jeremy Male

is It de be revenue very very, It's Marci, of really us, growth small. so X.X% honest. for minimis. It's to

Marci Ryvicker

on York had I Is transit, know in that you. in last that the that that something of whatever we’re mentioned on correct? contained Okay. trajectory, you now so terms happened is And had different was call. then New behind assume I and

Jeremy Male

now Yes, business but those QX both good few say national. York worth and And right our expected York months. having being York, we’ve been always forward and talked it, in as up with about we we It's as look strong linked we did quite in said when it's about are New our inextricably billboard not New we has New we a saying in very to business. transit that that

Marci Ryvicker

successful? seen And that you Boston which New York, build Boston of same you’ve major the you’ve in know any differences I York Okay. talk York be sort there between on now and has can about the trajectory New are or started very what New out, as been should

Jeremy Male

go good a everything and and digitization commence great we we’ve of in successful the very as gives us really Boston been confidence MTA. feeling has out Boston seen and

In obviously, feels in the But product traction is much like product, terms some the really been getting advertisers. that with much and terms product that’s in MTA looks certainly great Boston scale, is significant. more the of very of platform deployed

And we difference Road subway to one deploy on interesting we Rail Long where solely will indeed platform. time it's North also over are Island and looking in onto as year, from One be first half differences certainly necessarily going Metro in that New going the displays, and is next it's car we see in something which we’re screens be to be car. of we're the but in Boston think really to going York not

really digital right out of early that exciting at in very stages the come So to we’re and the city. build

Marci Ryvicker

you. Thank Great.

Operator

from Our Jim comes question Barrington next Goss Research. from

Jim Goss

Thanks.

very from? have figures where growth the of your of do Some I'm sense coming a share you be revenue gain are share impressive. gains And -- wondering, might

Jeremy Male

I the relation to we've we say is we the business, our again, that said other would at competitors, in key our our I -- markets. operate when and I important guess think look point in different slightly at when we look before business

we're We have focused We operate versus more of urban a in much our example. bigger and geographies competitors. for transit focus and top DMA different some in

to like, what in about that I not if that look So think I'm as it share you and total. our all of media that versus, market to like, But you’re I certain actually would is does think out-of-home can out-of-home think good terms our that we it anecdotally direct much in competitors. going And have GDP. out-of-home pretty outpace a outpace like year certainly year this

in So biggest years sector is the more actually what is total we be are coming focusing over hope. which on to for this the share of the driver out-of-home going we

Jim Goss

Yes, of thinking and providers media … competing in I more other that terms was out-of-home

Jeremy Male

Yes.

Jim Goss

are … because those … some

Jeremy Male

months the like, say, share kind we out-of-home does season. of said, though you going feel like think feel are this I it as its it's to of, if are XX as as -- is it the increase Yes, does -- I kicking off -- over the hopefully we I reporting But anecdotally, year.

Jim Goss

about I I could But unit, there Canada you if took in got think you curious charge. impairment Canadian was the wondering I goodwill a if correct. was reporting those up things? thing said X.X%, a write-down rationalize Another then two I’m you you,

Jeremy Male

start acquire was always asset, -- the for there, the thanks set were take another of guidance this of They’ve actually did time we last particularly have there actually very you then we showing balance the that And at argue in up to outlook very at that we sheet an time, this great positive current fourth a assets when up we auditors, returns. around Law -- our One is we reflects that’s didn't the carrying digital great could argue of our up actually could assets Murphy's question, which to there, now and Jim. out once would of it's what through and you Canada. some legacy with business. quarter, value assets that likely for combined the felt strongly view of got we that flow quarter come about a we the Yes, assets there, look the that year, Whenever that part our in match moment or our those in at value good started moment in impairment, obviously time. the

Jim Goss

final And there up M&A some be that Are activity would additive Thanks. one new for maybe elements? Okay. transformational projects or thing. any bid other

Jeremy Male

to there, all I think market when we market number if on the there the the at like put assets are at look at time. it tuck-in what's acquisitions are going like, certainly on out the that. in that We of look moment, a of you

conclusion. in or them, We win wouldn’t Having for may are we they’re said if range, may reach be transformational, on will selective and business. say but I right couple very great this not they’re we’re now working smaller and a the that that,

is other particularly talked as worth particularly the really our And hardware as believe the really transacting transformational thing that I very deployment can I’ve making mentioned field be getting way the future, that investments with in our of actually of in in in out more transit, focused much digital think moving pointing I before, then previous that we’ve guidance. digitizing a we’re that that’s out with we we’re we're on estate, the hardware on calls. overlay which combine and QX as our the organic showing onto growth

terms will for consolidation So that feel further we business. we where in are any certainly assets good be the about very work and in for competitive of we market our

Jim Goss

very Thanks much. All right.

Operator

ahead with with Goldman your Sachs. go Borst Please Drew question.

Andrew Borst

where from about it the the what’s Great. I did hoping other to a It's little its definitely but impressive. that growth, Thank transit quarter, and Congratulations there? want flat provide of context ask could organically. going still bit was only very U.S the was organic you basically about improving last I growth. on you. it's organic on recognizing in

Jeremy Male

have it's The business bit that was click transit year. we fair And good was the also will transit the end questions relevance other seeing up was improvement of it the a a also of to for frankly part that QX, answer first the that a and It certainly flat. to and disposed the national believe, our other transit in Part Drew, our a say, is of may indeed nice we're any in from that little business up I and whole. the fact that flatter. naturally transit growth as quite bit market over reflects little see

Andrew Borst

I couple thanks. if may. more, Okay, A

On speak improvement I driven was be a a yield, I you haven't disclosed may just long occupancy if little the and any for color the to a improvement provide on provide know -- can in wondering detail? price price the might you it level time, bit willing or guys more at be is that? mostly to you high but you a being mostly could yield is over occupancy

Jeremy Male

The we and board-by-board with It's you manage Drew, helping yield. in talk we our quite a is drill into basis. rare is of about that occupancy teams, When way yield to far sort how business price, we more terms talk and our of maximizing about rate. on occupancy really about we’re is seeing think that drive up that,

tend the focused of our as that. something Across are right very sort a being on our billboard like occupancies We business XXs, rate now. low to be whole,

of way thinking rate as this as tool So that unit in I to as say, most that manage average increasing such way. revenues got kind we’ve to occupancy a be there but we a than use in occupancy our take importantly up, still quite rather per inventory room to

Andrew Borst

want the increase I ask is in Okay, thanks. Matthew. this about Maybe SG&A quarter. the to for

about growth like of help you strategic think a guess, a quarters? seem you there's us is up, bit four maybe maybe about does you I with us I sort next sort of the It growth the excluding there investments. initiatives, think mentioned that? help million of could of little step $X.X can more

Matthew Siegel

to you for can year, pretty giving our haven't budget assume finished consistent. it's We be going or guidance but next

put interesting other We are and some think and digital But it. any we digital industry. for be we haven't the our valuable internal still quantitative initiatives, backing both investing could enablement, for are DMP to our us which

Andrew Borst

Okay.

Matthew Siegel

the of fair I sales the help and revenue with we’ve in SG&A in Plus a mentioned, hired, support growth. as amount people sales to

of a seen invoices. we’ve build out So

Andrew Borst

months I in just it's of it Can guys you dividend for is for trailing the about And cash bit a quarter. getting and the the second about the ask me, you and flow Okay. about is to lastly guys the think cash then us sort help free how quarter and dividends this you these to difference little million are dividend thanks the on free about consecutive show of fund want and wider, ability XX, slide where responses. outpacing third the the XX a of out sort are thinking it? $XX flow

Matthew Siegel

Yes, sure.

week underfunding -- over working delayed was from of end week had agencies the capital. the of mostly This from the half collected quarter quarter. really two the the large collections from a in outstanding in We or the which the change last national about

it's So was in in now. we knew and feel accounts the coming comfortable We we our were in. going money

into feel time. we We When public, we where yield, good will the little that we think that Obviously, pretty comfortable the were we first think like is. it grow to yield. a over but don’t yield dividend, X% we we over there. control was do it went So

Andrew Borst

much. very appreciate it. Thanks Okay. I

Jeremy Male

Sure.

Operator

Moving on to Imperial David Capital. Miller from

David Miller

the Congratulations what’s you question, going on to here. didn’t guys. as to the very which was question, a your be quarter robust results. response digital hear out fourth in Hey, contributor call to stellar Alexia's the first I a Yes. obviously Jeremy, nor Canada

that would touch just previous I didn’t the or guidance than better might any better, the but iteration, specifics. in then, my of but apologize you you faded of guidance. level be kind I I when about out contribution? audio heard were maybe So And you talking of if Matt, said on hear terms those

you I if Thank would you that repeat much. appreciate it. So could very

Matthew Siegel

AFFO guidance low the for for our which Matt. will It's said the to -- a better mid previous I I’m was of single-digit full-year be Thanks, year. than David. Sure. guidance be sorry head our will previous

David Miller

Okay.

great. Okay,

Matthew Siegel

to comfortable, are that. we well going are perform We

Jeremy Male

So AFFO upgrade … that answered I think the

David Miller

Yes.

Jeremy Male

… point, David.

digital we into you at we’re QX, got range be and the I’ve of other were to up going driver will in certainly terms part now, digital XX%. in looking strongly from of So point, growth that key saw QX up double-digit all that revenues as a And right no that up we've be go certainly Canada that of also. as in also given. outlook be where will is doubt

David Miller

Thank Okay. you.

Operator

no And further I like the hand call there would to to Male. Mr. are questions. back Jeremy over

Jeremy Male

Thanks to Thanks much, everyone the on call. today. very much. time operator, your you Thank and very for your and questions

much We much good of at a are very the looking over seeing Thanks forward weeks. have events you investor many to coming and very evening.

Outfront Media (OUT) 5 Nov 182018 Q3 Earnings call transcript