OUT - Earnings call transcript Q4 2019

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Operator

Good day Ladies and gentlemen, and welcome OUTFRONT Media Inc. Fourth Quarter and Full Year Earnings Conference Call.

At this time, I would like to hand the conference over to Mr. Greg Lundberg. Investor Relations. sir. ahead go Please

Greg Lundberg

everyone. year joining earnings afternoon, quarter XXXX and full call. Thanks Good our for fourth Hi.

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

After Investor Our today's there which you can that the slide comments today presentation an website concluded will is as our refer in call to Relations the audio the is be of outfrontmedia.com. earnings release and will section find archive well.

our include statements. certain earnings Form OIBDA results our forward-looking Form and XXXX to to an may measures tomorrow call refer the presentation, conference of reconciliations is XX-K cause OIBDA also from release non-GAAP are could of the statements any the factors materials earnings website. today slide on actual and This to appendix this references and adjusted differ these will XXXX made materially We'll be which forward-looking non-GAAP be on financial measures and file including XX-K call. and Relevant in in Any that expected or our listed to also financial morning. other filings basis on SEC

with Jeremy. turn And that, the will to I call over

Jeremy Male

again Thank joining you, us and thanks, for Greg, everyone, today.

to be Before look we as get into it whole. QX, take a interesting quick I the might details on XXXX a thought at

our the three of financial annual shows review Slide X, key metrics.

our position reflects the up was think growth XX% and strengths over even with of AFFO We XXXX better, revenues up While good X% industry XX%, in OIBDA year a was our XXXX this it. and inherent up

key the Total X% fourth quarter, geographies. across growth with quarter. on our our gives OIBDA Slide results to X%. of the you again, and and AFFO and XX% in some now and as year's revenues local national highlights. This X, slightly we're last of Once top in our turn X% as ahead all well grew good billboards, broad, guidance. was in fourth was increased of this transit, quarter. grew Let's

item of points growth about Matt board in looking allowed unusual quarterly business dividend to our And $X.XX. the in will our raise forward, an took over talk directors off confidence a the the to that quarter. few

Let's is a our more growth look detail drove all on X% our in actually media at X. much beginning was slightly take was US in revenue quarterly smaller, off. while segment the and which our other of quarter, Slide up

X% side, US the you was on was transit see growth which On XX%. X, and can billboard Slide

driven national similarly, distributed And was to a were by national Slide up local across Billboard over was and transit our up both exposure assets. results healthy both on XX% and and this growth X. X%. strong again, As revenues Once shown local was

of and year mix to of quarter and For business was having We really like was XX% XX% advertisers the draw local, both the national. US our this balanced from.

as the drive board driven the Market now new Digital US on digital, our total in as This yield over addition execution see sales inventory of can of was revenues. increases traditional which well period. you yield X% increase demand and X. by billboard help XX% Slide Billboard same and digital up is

down spend revenues other like about Billboard Slide to segment I'd and the segment. a decline. to on of Turning moment X, were half our drove

offset been recur looking Equipment X impact, revenues around in other that sales by of and a have up worth and without sales forward transit from in half It's The back growth sports team very didn't legalization year. Digital this in strong solid that decrease good would and had to a XXXX. business noting a cannabis While reflects healthy total piece this marketing, We've as got reflected X%. quarter The Canadian comps Canada, fourth we're great year great our a whole, million XXXX. around other assets the flat.

the and five yields digital of actually XX. bigger These by up look of Slide beginning growth closely XXXX, mostly up digital our penetration from Digital the rates revenues. quarter revenues XX% this points more total accelerated quarter quarter area billboards and XXX%. more let's third growing we've jump bringing displays. over on digital fast Since at year, Now but three around XX%, rising picking were been each of year driven to again over a XX% of with transit Total up was up points,

We was It sense some very of in future, and indeed in XX% the XXXX. every you almost near business. year strong performance the our the that about the our international us to expect to we threshold gives XX% markets. in across We're business just cross part feeling other of way see the putting well good on good a QX,

let to But Matt you of to before into I hand take get the that, the the call me over financials. through rest

Matthew Siegel

and the a revenue was XX growth, not level Slide expense Thanks, total only as level, of expenses but I our percentage afternoon. highlight to fairly a flat. it's lowest Jeremy. that our then And of good were been year, want

at a coming Looking and costs a of maintenance of from. our would rate lease revenue expect, expenses our a transit in increased with Combined, components revenue. lease grew Posting year our come and reflects of of six Slide in at than expenses XX% growth on Billboard billboard Transit were the essentially franchise you expense, also lower the category markets. growth, at revenue. flat. XX, historical view larger a gives were franchise as you largest where line much average

total, X% so strong growth and The investment. of to we're to quarter. And analogy added market equity ongoing revenues this technology the In the expense our corresponding compared And benefits. and this small and link SG&A driver compensation absolute fourth $X especially support also strong equity retirement sales, of plan declined earlier; although million and lastly, Jeremy a performance half relatively corporate mark as expense a the with size, to increase quarter a markets, referred large XXXX. our of point about in [ph] to reflecting in as usually just to quarter. percent some non-cash

Slide at up off healthy XX and looking X.X% have rate I how shows you over growth XX. would Slide at media the transit OIBDA look been expense one on was this OIBDA year year XX%. expenses X%. growth around X% just a excluding US mentioned OIBDA let's these of Total billboard Now

will expanded to XX.X%. points XX You and Billboard margins by the transit points XX to notice increased basis Billboard increased that basis And we by transit both quarter. XX.X%. in

flow, variance $XX a was ahead XXXX, digital nice XXX. our conversions. goal bump increased of above of We do gears Year but expenditures. XX capital ended to we million digital shows in considerably in guidance, completely in CapEx up the for total by XXX to units Switching million at CapEx cash our our up growth Slide billboards date, billboard $XX

of For maintain XXXX, maintenance pace expect this and accelerated growth to to we around split similar the spend help of level same with conversions. a

on Slide netting Moving bridge roughly year-over-year to driver the flat. XX AFFO the order other that shows components on the that out was was

quarter taxes X.X%. expense the In $XX AFFO cash are AFFO grew range. interest the incorporates expecting and assumptions, XXXX, in currently growth of we For approximately This lower million. digit high to single be

On coverage ratio was LTM both flow XX%. our ratio cash XX%. payout adjusted for significantly AFFO free Slide The of XX and different down to AFFO, in shows payout flow. decline a basis, dividend continued free dividend we saw adjusted cash

expands. our to levels over our per in the to and coverage these X.X% dividend to or business quarterly step business increase $X.XX March. dividends outlooks share reflects as our by a With and time payable intention This board enabled $X.XX improved up grow

million. million our sheet to It's The pushed out turn bond a another maturity year $XXX Last have let's Now, in $XXX time, balance was worth this Slide and XXXX on next we year in to is and XXXX million in in maturity last position at XXXX our we noting XXXX liquidity those that XXXX. also had XX. respectively. gone, $XXX

million you $XXX can increase at of see over remaining excludes now of here, As equity capacity ATM $XXX our XX%. program. This or $XXX we're on million million, and

and times now second down last in last cost net compared leverage of average the to is is half weighted of Our X.X% times X.X% five debt from X.X year, year. our

great overall, I balance agree think is significantly sheet you'll improved in shape. and So the has

XXX XX. XXXX over more total New which December to displays carry at on of Let's look our XX sold deployment advertising. an of as MTA half Slide York update than on bring displays We

to Our year right total guidance of $XXX MTA project our cost recent most and date. in the million We're with $XX quarter million. million on $XXX

were these As recruitment of costs our $XX project [ph] million. QX $XXX December, million QX costs and our was of

gross be estimate to highlighted to $XXX XXXX approximately a updated on important will before call deployment. million as the our complete financing level necessary we for equipment of recruitment. the is basis last external year, you on And deployment this expect we be We costs

million, incremental total to the estimate. on $XXX build current our from be projections, to down million expect now we complete Based needed $XX the out our prior financing

and XX, the $XXX We have million XXXX peak of amount expect December incurred as to of reach QX this the XXXX. end around of of

and are and be liquidity So pleased our there. more to million with to comfortable current position we $XXX very million ATM, a feel $XXX excluding halfway go

a revenue to improving cash sheets In and flow still growing ample back closing, to drive growth and deliver is in our team us invest into balance continues business allowing dividend. our

Jeremy. Let back turn me now over to the call

Jeremy Male

Thanks, Matt.

to on turn outlook our let's XX. Now Slide

is digit comp total first on that comfortably quarter, range. of last year. the to at expect double mid-single growth digit time, we the this recall revenue in point be Looking this it at top in We

terms mix businesses particularly of well. In our performing billboard

strong issue, have XXXX XX Our continuing about expect year things its transit transit as a QX. timing this We're with highlights we We Slide in several is view currently another great this a and supporting feeling view little slower digital and good to growth.

economic we're we're great feel keeping some having coronavirus currently our all denying the the eye of clients. the where [ph]. on here environment And US an in conversations While still news,

New And later should year and conversions, DC, revenue on continue grow escape political can't you and this digital the to important an more that in push billboard we in lastly, year. San screens Francisco. and York, digital fact is as Digital transit deploy this

systems, on While business. that political to into would broader the positive we are media we transit performance to of drivers strong also of our going There market some should advertising the our waste as be whole a money can't carry tailwind our continue. a expect

important local Firstly, clients, every growth local, these top national of Hollywood, had professional this was years services, revenues national. advertisers LTM that's local And retail, total in a clients, from our ago, Interestingly, category. national weight mostly Mostly consistency revenues. The national categories it's in generated all business. almost mix services. our financial around the nice from XXXX all same and our both to XX on and basis and were

talk You've about heard before retention. customer me

I'm them. top three years past XX% the this each positive me you hundred across urban all we let assets a of clients importantly, had an you can XXX in both Billboard for brands XX% affirmation with deliver give that focused are clients assets to audiences referring So very of transit, same And XXXX those purchase many of our update that and particularly advertisers our us, work in top telling these our attractive that is on

Operator great XXXX. closing, for the In got well positioned we've let's we're rewarding assets, now teams, open great for and questions. line

Operator

Our [Operator question Instructions] Alexia Quadrani, JPMorgan. from first

Unidentified Analyst

Anna the is much question. this thank on for so [ph] Hi, for Alexia, you

market volatility regarding Just have coronavirus? any news, are so the the to recently due the impact the we seeing you far that from coronavirus seen in

Jeremy Male

one actually main thanks of which any business, North issues obviously other inventory. come think comfort. our principally the summer pieces supply supply out the huge which are mean, stocks, about America regards light think digital our there revenues us that, transit that for significant not MTA chain, in derived a So, the platform right the two through now. to are and we into I have of we about and us as With putting out going to we all take question. to for we're Asia, billboards seeing gives that If systems, actually there we are boards at until are our

our there. may at year a don't part from the delays you the We actually, on-train the build pretty of year, there any be as we plans because is that Looking that anticipate which out were or this know, anticipating the inventory, on our mid slow revenue our build we is, some think of having it with for part marked year. that impacts was for forecasts

any from So, market. at coronavirus comfortable changes an now look, right daily see obviously view, weather look it. as But pretty basis, of we situation be able point you We'll you if almost on the the we're if our certainly, issues. to

Unidentified Analyst

All right. so you much. Thank Great.

Operator

Next Morgan up, we'll hear Stanley. from Ben Swinburne,

Unidentified Analyst

you. on This thank [ph] is Hi, for Grace Ben.

in on out that, a called the QX transit You you full in more some slower Could by impacted and the timing gives growth year? kind confidence bit what you little issues. touch

Jeremy Male

Yes, absolutely, Grace.

So, when as our XX%. year, up business, transit is last at of know, we look you sort

transit some last a depending that in and major, we'll quite business ramp believe year. within can of It year major obviously transit say well. continue look we It's the the on growth to particular transit billboard had is this see our we of not part be performing be fair is timing month. year, and So, good to that smaller to the a there's good another of it forward, business coming really growth. advertisers nothing we or given the Certainly, won't importantly very market as And indicate lumpy, into

Unidentified Analyst

provide one? That's digitization helpful. BART of you any Francisco you. thank contract, the could update the Okay, on if have And you if San

Jeremy Male

building out test two slower be with York. the the that also to that we'll on We're in say of we Brooklyn, the remember digitalization It's New be end a QX. the absolutely. out XXX end we as Worth Washington, screens bit gate going that this of fair be to year. that, based we're back year. there did stations MTA Yes, with those expected. of a here going putting been building in in to next out, has development And going back of you be further got little than originally we're ramping little the in stations We've may to mentioning towards test sort there

going seen three footprint and that Washington two the there or will recently years options, years. next have the five-year might You the further over renewed two with X,XXX news screens XX be for a our we into

that's to going very the be actually, exciting development for business. digital another So

Unidentified Analyst

Great, thank you.

Operator

Miller, Imperial next question David is Capital. from Our

David Miller

at terms that new guys. outdoor Great see kind weaknesses, and, during fray And there the And can some geographic you about the Hey, country? had of all of the prior of segmented or follow-up. talk that Jeremy, quarter. not What Thanks. the in that then strengths of were I out embraced categories kind the there? you did entered geographies quarter over you then a quarter? any surprise have by

Jeremy Male

Thanks, David. Okay.

the the broad. around West If the So, strong, on Coast, growth we think fire quarter. fourth New really a the about being the Obviously, the in think lot I prepared Washington. during including and Boston, in is that a of and us York, talked so about focused continued pretty billboard was XXXX Coast as our East we remarks, transit footprint was for business, whole, on fairly that

So, West over Coast as XX-month I really if we spread. at outperformed, was pretty say, But broadly look that it the it basis.

David Miller

because of time deployments Okay. evens in Side? last number And and on trains then Metro forgive terms the of of When the just Los the my believe LIRR platforms. naivety on ahead out, Island But in displays spoke about the the live that way you said in Long terms of on North was I both the I that think do North you we this Metro the your Angeles. on the deployments Thanks. Railroad,

Jeremy Male

it's that's developments with the about much think of sort where screens where going. subway and the been we of of North are the that with LIRR our they're where principal difference. year, at Metro our last expectation. made driver following. smaller much of look and sort David, really revenues is of But have really vast cracking our we've MTA the the majorities Pretty line been if business in on, the for Yes, been Thanks. vast, and in subway, the total, we sort

David Miller

Thank you.

Jeremy Male

going that just back one probably because particularly. categories, nail to I maybe David, didn't

sort last back that are boards, and end that our seen of of categories sort As certainly we important us time. But one of our for for some On go seen year. of have is consistent and sort earlier, and in just we of us I became that a we Plus, we Disney we've to others. And at as coming be XXXX. continue have the into and will Hulu, Netflix, we hope that going. thing not It's like new numbers remarks gave very the over really tailwind streaming huge, that

David Miller

you. wonderful. Okay, Thank

Operator

we'll hear next, Zaffino, Ian Oppenheimer. Up from

Ian Zaffino

on maybe for for kind versus seeing in actually political Interesting expectations And in that? time just you would Thanks. gauge comments appetite XXXX? political you more maybe XXXX? year. thanks. your advertising remind how this Or us political this was around are you Great, what Can of

Jeremy Male

sure. Yes,

go and -- that in actually, relatively smaller political saying we for us to for been we've if back So, consistent our that indeed us has pretty footprint. slightly and been of some competitors XXXX small, credit than have a equated different

relatively So, it if small. we 'XX, would go back have been to

generally, traditional that avid think there in weight money, that we think to feel media market. cut we well political I noise markets think the now, this I expect home. feel how want out contenders with and through, that we for good actually be likely get presidential to in across I of up be some some think advertisers in we can And of well environment, pricing advertising to just for is TV, a year, pretty to and that of our that's a involved on the they don't what one and may tight may of may welcome of have do think number board. the interesting digital It's we as

boards. advertising the actually might So, in that that our hopeful of we're increasing be political sign interest

more digital out of think And very fast change efficient the now, obviously product, with we compared have and that change I obviously, a way political, in home. issues we to rapidly. particularly can a because much traditional

dollars that last. So, out election the this in helps, helps this more of than could home rather for industry something the actually garner cycle general

Ian Zaffino

further. to drill Okay. down And just I want bit little a

question you're would much by stream kind the that political of market? of sort go the be new weighted impact revenue Because here is after larger a is, now dollars. markets. now, what the it have you landscape But you of I the to digital media to that think that's look interesting direct But not in? you at markets you across the all will of have they tend kind what expect competitive Thanks. the strength markets? to see market, Or kind of if be arguably just really do there's best

Jeremy Male

tend not markets, question. has Yes. markets it's we dollars classic up of either some as to. other sort actually substantive. the do of words, markets is candidate red But media Look, pretty bought they're In in necessarily or that and the a the XX blue. be to that be the I flock of Ian, larger said larger we've of And is before maybe where typically, fair to markets which sort the those sort moment there's would said, from us, at tend

Ian Zaffino

great. you right, Thank All very much.

Operator

Steven next Bison has [ph], question. Wolfe the Research,

Unidentified Analyst

Good afternoon.

a couple Just ones. quick

First, in costs, MTA the faster revenue that by the improvement financing, recruitment? more is driven lower

Matthew Siegel

answer yes, Thanks, Steven. The both. is It's Matt.

Our flatter stock. had of deployment cost a than rolling of slower curve partially we little because is little expected, a

our importantly, More been fund a Recruitment's been more better. self enabled revenue expected. It's us to higher. than little has we

Unidentified Analyst

mid-single the And Great. I comfortably think the it be was QX than the then in Would as to fair digits. X% X%, to on translate phrase that rather guide, X%?

Jeremy Male

is get guess We'd own maybe conclusions this granular our just from in can mid-single X% prefer your and not to I to stuff. draw X% within, you comfortably digits too book, on The that.

Unidentified Analyst

Right, thanks so much.

Operator

Our comes Barrington next Goss, question Jim Research. from

Jim Goss

Thanks.

into to be what that higher XX%, your that share or other that that? base XX%, terms of digital some of generate you countries area be would would had, than it the target require Within getting ultimately it display in XX% objective, Would sort that revenue. of said of

Jeremy Male

we think the our where about X% think revenues. about fair to you our moment, our you boards ratio say XX% we just we've and while -- because billboard billboard first, wouldn't our boards, billboard saying, digital to digital. the convert it's our moment, that digitize think do we the or maybe XX generating And necessarily ones on get of same At got tend sort at around If let's are of revenues to we're to billboards, we where revenues. still assets that of we as -- our best continue

goal. which possible, and sort contribute. similarly start we significant see digital or of So, that having we'll is we quite we're In will likely, as our a be it's that up boards, going evolution of also, triple double towards nudging transit, sort

Jim Goss

you the full maybe the the ads video mentioned motion And to talk of the of advertising? ads Does displays valuation you have a And rail, about those the does -- of of Jeremy, share next the include half commuter -- the MTA, that nature is include that also, boards and extent the of within introductions over could and of Okay. enabled. you wave the advertising. higher

Jeremy Male

When XX% for think of XX% So, the assets, I things. advertising by the advertising something a as certainly I information. we the at proportion information build rather and couple increases. of mean, couple of time on, the Yes, a displays. they're than of end only goes [Technical media, And much pretty like example, we're look Difficulty] out, on-train

market. sort And go creativity you So, move if over the time. the of added into value of the displays, look that video some to you and can sort the allows see out to just of that will when the yourself of full see of tap when us at And it subway these sort us we video to tap down pricing, for us. that you -- the allows dollars. also for creates It

So, advertisers just just are able rate. the to number this suddenly about that of the not utilize exciting about the format. it's opportunity, It's

Jim Goss

the that'll for All Well, Thank you. right. Okay. be moment. it

Jeremy Male

much. very Thanks

Operator

any or hand to there back questions. for At I'll no additional this closing the company are further time, remarks.

Jeremy Male

forward we Thanks, your today. questions and operator, over investor to seeing at time much. your coming of Thank many everyone, weeks. events you the and look thanks, for And very you

Operator

participation. conclude today's you your Thank That conference. all for does

Outfront Media (OUT) 25 Feb 202019 Q4 Earnings call transcript