OUT - Earnings call transcript Q3 2020

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Operator

Good day and welcome to the Outfront Media Third Quarter Earnings Conference Call. At this time, I would like to turn the conference over to Gregory Lundberg. Please go ahead.

Gregory Lundberg

Hey. Good afternoon, everyone. XXXX earnings our joining for third call. quarter Thanks safe hope that well. are you We and

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

including after the This comments today’s statements. Relevant there and our XXXX website, quarterly that you presentation from in materially are filed today Form reports, the and slide our factors differ an concluded, XXXX listed will Our is may as quarter third including of be could filings, that our will find call refer earnings forward-looking Investor results in in XX-Q, our to audio forward-looking release outfrontmedia.com. be section tomorrow. to and which And conference the earnings statements actual will XX-K include Relations these can archive materials our call well. cause SEC our

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

Jeremy Male

given and back is suddenly offices. thanks the us did bit numbers disposal, pleased while billboard revenues We looking your feel were than XX% of I expected, our cost well continuing over of and reflected slowly our we more Things more in basis, apples-to-apples to today. quarterly after Total able on safely over Transit normal. year-over-year recovering in months, to bit sports performance Once say and are million helping on AFFO. range. this saw am again, our quarter, or that hope XX% better an a decline quite ours past OIBDA joining Greg structure, and for they down were many the marketing few you, better have low last is in than within X. time Slide been is and a our Thank guidance like you ridership. I $XXX I improve of Midtown take out spending that in

moment, if are that we good these sequential Importantly, go you of U.S. metric, the see and on here am the to the revenues, all going Slide improvement sequential I virtually adjusted at notable you look improvements billboard significant of AFFO. exception through can but X, with Transit. in OIBDA every not at figures have our media

more Slide Let’s with detail, X. total now beginning go revenues into on

operation will As as new and on appendix. owners. was The the us, mentioned, additional marketing there’s figures in know, I you the business and quarter. we the sports of you just during good but, a this here, from our revenues benefit color for other XXXX, disposed included was in in us, for non-core scale It our see its

Both drivers were improvement. rate they pandemic down quarter, national Slide was impacts of revenues but mix. local from down and that XX%, Media local can of the quarter which national on get last is XX U.S. call, this differential were National Slide improvement the on in let’s you but majority revenues the go from of Transit were I’ll later XX%, one they into local In broadly down point X a on XX%. fashion. were billboard of our our in billboard our a point were Media, X, than while down loss was revenues, drives quarter. of the the led it Canada advertising less last our way. the of local the majority improved weighed revenues. these the pronounced Overall, still XX% the drives similar While on them U.S. Transit the while during X, second see and quarter,

Turning in was and quarter to more was than no billboard far demand digital rate. driven yields. in There were performance Slide the static by yields this down pronounced our the XX% X, differentiation and between

with by of equipment also revenues at I’d out Canadian The U.S. business down improvements billboard in I’ll that Total both other is to with Billboards than last change sales. Digital had topic Slide XX%. our from to non-recurring last XX% big revenues than point million year remove on quite when like total sports organic cover quarter were business XX%, Looking digital the and revenues this by prior XX. were Digital up marketing, better told XX%, quarter, time a Transit the other Digital, on of $X a and driven that we the and on result year grew up X, a revenues third-party strong last you very and is the a The Slide XX%, down at line This billboard figures last better transit. right and declines factors driven similar rest bit in

convinced to be As key that Digital driver will business a growth recovers, business. continue that we for remain our

financials. over Let’s now he shift through you will the and Matt rest our walk Matt? to of

Matthew Siegel

good and everyone. Jeremy afternoon Thanks,

quarter much eliminate XX. attention year-over-year, by continued on again, $XXX Our as like costs. reduction teams overall and very Once XX% variable Slide with reflects million this expense fixed see you structure our can performed or last to

proactive the marketing, what of down can our with have transit to in dollars. maintenance reduced accounts lower conversations our was with our we Ridership annual still detail $X at the XXXX. at levels million as once regarding component. share the franchise particularly shifting which but revenue mentioned Billboard this as minimum payments. reduction of million implication. in level I’ll these over base systems, agreements SG&A from many to is certain very of XXXX year you due was in into $XX say were at happens million. down $X country expenses all business sports on to to note Transit Transit activities our I see of as have when XX. were lease and OIBDA, sales decreased to-date, sales expenses discussions furloughs working workforce Jeremy due will million a landlords, in is declined team sale again about majority of temporary in reduced that pre-pandemic, Slide half of restrictions lease negotiations equipment SG&A its reduced these in fiscal our lower than salaries. accounting. More there asked with for lease rail compared that XXXX. overall expenses, to marketing. you on from what Transit well midst billboard and with in lease across reductions, force partners $X from and that on primarily know earlier. by expense employee successful display expense discretionary other partners of ridership Posting, employee our over is also the advertising due this will I carry variable our to of in instead decreased expense and the slowed AFFO time the revenues is we in won’t also And guarantee and look continued from Let’s It

sales this But was worth it’s to quarter. went offset provision for our in days reduced a mentioning One doubtful well that We outstanding. higher again accounts COVID-XX. collections related

for can at XX, costs the turn by low fluctuations Please corporate certain the reduction. an plan Lastly, a employees. through temporary at change despite able In salaries, impact base see chart, certain market remain you Slide equity-linked to partially XX% OIBDA to to levels year-over-year. were of to decline retirement reductions the the of expense revenue offset offset on we offered look

decline so improvements strong fixed in flow Overall, billboard revenue lease especially XX% to XX% quarter. of this last costs, OIBDA quarter large was a future through a will have structure, to We compared down OIBDA. in cost have a

back. run XX year growth. but XX%, on quarter. we’re toward rollout our good XX still display both came in closer. Overall, fact despite from we that and actually back only during historical in Slide Transit expenditures did a step Capital annual was were rate, the significantly shows down quite recommenced at last OIBDA way on that digital negative maintenance margins billboard better XX% not the this So, quarter. slightly Slide our

billboard XX by quarter. digital increased this count Our

build our prior extent leads to Our million us expected quarter. XX $XX team increase This by quarter small by other and drivers. to digital a fourth our approximately lesser that million. to compared $XX out our was driven within Slide the shows positive annual OIBDA to this forecast higher our mostly turned AFFO

can third It’s dividend Slide our were noting quarter. flow positive to worth see as cash XX, that usual, also Turning we again in the you free coverage.

minimum our stated on ongoing allocation Our remains board will evaluates basis, distribution our that intention we meet our and requirements. capital rate

position, business and Slide liquidity. continue lot financial billion this economy provide actions in a see you we as of and We with a year, the XX. on still us can of this of evaluate remain in cash ample So, $X.X the to improves. There uncertainty earlier our took as is liquidity strong

in thereafter, XXXX. with maturity Our next added our dated our is maturity nicely maturities significant XXXX, and longest are

access cycle OIBDA out not Our adversely ability OIBDA expect higher as lower our and but to to impact net revenue of of reflects immediate during the pandemic, X.Xx obviously liquidity, improves. does we it

we Now, update MTA up, where quarter. display Slide on announced deployment an the let’s as to XX for picked turn last

revenues were compared to the again in any sufficient to for just adds Transit net recoup Our displays not quarter. XXX capital quarter. XX deployment second were this us

time. of better previously expect closing, key where future to Out Most total a observers spent driver under We and to uncertainty the of XXXX balance is all In subject Outfront capital see pleased from with $XX our disclosed all be to the a have aboveground a for sheet revenues, that. deal million we’re deployed positive recoupment $XXX of recovery will deployment our Home remains place amended in billboard and business volumes plan. so in to-date, industry million good a far the doing roughly this of except

growing to expect country. pick in take and up markets preferred advantage We presence the to billboard opportunities attractive selectively around acquisition our our continue also our of activity

Jeremy. Let back me over now call turn to the

Jeremy Male

turn in quarter, be in Relative the fourth billboard which revenues. revenues of is third we’ve and been March, regarding national. we be This sequential to the and range. by of since improving we Thank you, local low Matt. improvement return Slide gave the quarter, in a today. both we the our reflects return about would total XX% the down for the what see talking quarter, look picture driven expect guidance as we audiences, outlook that what is future our spring we business as Back to second our on improve for it trend revenues in attention continues. at were period. That And and in May, each numbers now, when guidance puts happened XX. let’s trough our the confident And in largely our The expect the pre-requisite to will you

As audience about. regarding have back. you’d likely a data increasingly story. people we still indeed The what different It’s is others and is you Transit, billboard lagging. however, [indiscernible] and shared street-level outing mobility, are

While revenues, still buses Transit aboveground street our subway are shows and majority the XX have systems, on The recent very which drives subway delivering commuter our chart ridership rail and Slide commuter furniture rail the ridership. across of audience and low systems.

cities and average, leads here, and major the investment substantial Diego. the New markets. ridership As other obviously news will that mentioning office sorts to been all absolutely in last York, Facebook transit again real to at the begin of Transit audience, space to has is Phoenix Outfront Denver, of Dallas, of flow, increase Manhattan. on and our And recovery. any these assets about in recover, it’s only Detroit, revenues major to the a the some which believe written support announced the you further that year. San system future Amazon XX% And has ridership week Transit worth same revenues we estate ridership, can new is making which is them. But contrary and Midtown, of in see

and believers are in We advertisers. urbanization, big are tracking to we continued these audiences

of Outside smaller markets, important and markets that in markets down more only these top have right third recovering around to talking remember we geographies, XX% While main assets down it’s about street our quickly and were XX quarter XX%. revenues local are now. also

entertainment, impacted While a categories have points. XX% total movies Revenues in like categories these from our the XX substantial three quarter disproportionately are largest down business, and and local over they reliant our results were TV. cities by on national

years. will categories They been – have Now, these for top performances consistently among top our come customers obviously back.

our are in major recovers we superior advertising drove a to national see bigger trajectory As that more likely and our will to performance we our we’re cities, absolutely post-pandemic. they and saw pre-pandemic growth in generally, XXXX. similar drive superior growth to convinced market back Transit growth which steeper that

the now So, questions. with open line let’s for operator, that,

Operator

from [Operator from you. Instructions] Alexia course. question JPMorgan. our take first Of Quadrani we’ll And Thank

Alexia Quadrani

just Hi. questions. I two guess,

The QX a provide first you the one that just could on, on if guidance is, Jeremy. more bit you color touched

fair Thank we and step won’t of post sort just but If not the below you clearly what just assumption? recovery appreciated? we And I then see as color normalized Transit we just pandemic, full improvement on you any kind this expect until Transit that second of until Billboard, give normal, in kind Transit and that but modest of terms assume we us just a the Should my levels is in has a see that ridership go, you. the can of we’re chart well sort a side. return more Ridership really per question still be guess, showed would us. as business to improved, of by function, that we

Jeremy Male

Thanks, Alexia. they time movies, QX, Maybe TV, definitive are were to for this still and step to local We that look obviously that positive. – much about, very entertainment which headwind talked the at of we just prove huge continuing to both and do said, improve, is year. we have direction, categories right as Okay. national last in continuing us

And so move as forward. will are anytime coming soon, they but not come obviously, we back back they

category QX auto has So, look seen of stronger the that years. noting And we when into we’re improvements declining maybe is auto. couple that of a one actually that in number giving categories, a over for guidance have we actually us been certainly in worth looking last the is now,

that’s really see. So, to good

– to said we for due audiences I the have that a think think we Just step until back question, yes, second were, those Part sort of of necessarily coming that I where is of up say won’t see to will us to we right XXX% before. your be fact the of to think don’t that audiences it’s revenues improvement that we of were I to that they get increasing. delivering some we’re, source get obviously, we expect sort we think, go And besides, to Transit do we our going a that see to But are in forward. further that which to And go ridership near-term audiences, be are give revenues still it significant audiences Transit we lift investing track as [indiscernible] is then to in the Alexia, Transit challenged. displays, will would attractive that a very as generally. digital – along. pickup to we likely in extent that I increase to

Alexia Quadrani

you very Thank Okay. much.

Operator

Swinburne We Ben will from question take go next Stanley. Morgan our Please from ahead.

Ben Swinburne

help heading are for and Matt how plans into ‘XX. both fourth then afternoon. Good think in the quarter, the expenses asset just sale you just expenses first, you. should any trends about investment assume impact Thank or or that year-over-year Marketing we the the fourth Matt, might of could quarter? on and in Sports And Maybe you, how wondering help you about Jeremy us your thinking

Thank specifically. Transit I’m be as You M&A you you. sit and Authority spending, like feel at things capital we able your some saw sort may look was to yields, about appetite there stabilize outlook, do here wait and and or that to business to able But new just things even confident Port not more want do to of opportunistically think for communicate the you money see you business as picked. you to we further? wondering, the still work put if in be that

Matthew Siegel

Ben, thank.

third quarter. fourth be – in quarter we’ve me and of same more Let seen is going expenses, on quarter second the as to the

transit Transit of are the revenue, agreements benefits all COVID, variable of fourth we’ve extend should depressed – of from a shares, measures because dramatically in been And are the from maintenance revenues that of our operational the or into components, cost reduction our of a One revenue the down. lower decrease quarter. lot has taken lot

to On about Sports in the million XXXX the related Marketing. quarter had of question, Marketing we Sports $XX for expenses fourth

well. as out comes that obviously, So

think of lease I stood same. at base So, course, see improved you’ll revenue, but expense slightly

Ben Swinburne

Marketing you quickly revenue the so just have hit what’s if Matt, whole to in the from picture? follow-up, we can, QX, Sports

Matthew Siegel

million. $XX actually were Expenses Okay.

mid-teens. higher than the dropped that, in think revenue I the

Ben Swinburne

Got it. Thank you.

Matthew Siegel

Not big overall, years. couple EBITDA of a contributor,

Ben Swinburne

Right. Right.

Jeremy Male

on So, off switched jump principally in quarter, sort the – in maybe, which and outlook. terms reflecting the is side. expenditure [indiscernible] about I’ll investment limited in the really caution, just Ben, of given second capital We digital the

We’re were year, that a seeing Billboard balance next now in that year. levels strong, position up we we now in healthy – looking where certainly to we’re have to ramping sheet, Digital and investments last our

implies that are in fact growth kind Matt every proposal off $XX that? and we next range the do conversion, well sign for that is we organic but million, couple spent. that And is year. and making CapEx So, that hundred of and Well, it’s I very think million of returns. dollars why boards And $XX still great digital that would slightly

our in opportunities We’re tuck-in investment also continuing keep eye other and out terms for of acquisitions.

be of couple And airport billboards New and vast our the ability business not great York we that we’re assets. at in didn’t – we Not saw channel we’ll along. Authority forward. right we in earlier that the as business airport is bid the both airport announcement Port and – What think week. assets By big State, obviously and total but the addressing piece the you bid, the did we bid that significant looking big to business, to Port the way, for the was the you on this we majority Authority, the for Authority really clear develop those was property go Port be as that We’re would fit a of the dollars, now. mentioned of go

we and win. develop way able great locations that to think we’ll nice some be that a was that time, through So, over

Ben Swinburne

you. Thank

Operator

go ahead. John our question Janedis take from Please Research. now next from We’ll Wolfe

John Janedis

seemingly audience was One year. coming improved I tailwind data a is, questions. had into measurement the two

So, how you. And and versus a billboard any impact transit you for us going bit this incremental Thank benefit from can restrictions you you outlook, revenue still data talk then expect of separately, to can breakout XQ? about had a forward? COVID-related the within further from possibly give

Jeremy Male

take me let part the sort So, of that. second of

obviously for at take have color, Billboard Whenever at give can don’t we what the we We Transit typically account that given on we stage. we incremental beyond look into color guidance guidance, XQ, time. but this and at see some

hopeful significant right are deliver, we It’s have obviously earlier and that We able within interesting, we the aware – certainly the that that we call. now lock levels. so ability because downs, to have an will further we that just on regards do as audience to we without absolutely. with will our measurement, and we are be [indiscernible] is to climate have we guided that climate of prior location given Billboard have down that the to we the performance own billboard-by-billboard, smartSCOUT, What certainly, now, and to have industry and what the go COVID

the when was the on the gone perception well, hasn’t. audience is actually Billboard that depths particularly XX%. away. actually – we So, no, under say And despair, At was to able were of that everything it actually, it all is of location,

for business still there. – a actually to billboard-by-billboard. the to of billboard able retain So, look, that through our audiences say information out are it And we actually feel was granular lot were to a of having us degree great advertisers, actually

John Janedis

Thank you.

Operator

ahead. Please from question take now go Citi. Bazinet next Jason from will our We

Jason Bazinet

changes there on numbers, lag trends? want to be one sort just comparable and of revenues? of a those better to do sort XX sort bit you question for I Or the revenues. before playing of those one sort rail a that they have make weekly begin does that through dollars, to – market Thanks. levels getting map the If you along sure view in of is going year-over-year think Thanks. where mapping to audience your were numbers of audience the of the redeploy of Slide there the trajectory sort audience there on between quick the to a it is little following is versus and investors had in – flowing

Jeremy Male

seen thing before within that of – certainly is first Yes. have is guess Well, never the our changes which we sort have OEMs never the of area sense, relative I prime we interest.

we we suspect Transit sort will plan how So, numbers thinking that There one we and when account is will but obviously we and impacted slight aboveground. coming there a which of to by returning. that got audience of, cannot that into say be other back reasonably point a lag take Transit, sized about those we audiences is that out, saw, revenues between are have that actually need piece isn’t you that exactly

And recovering Billboard to be business. shelters buses for that would sort certainly, in we rail expect rate more etcetera. example, than we the them rather much going seeing than our So, are bus at and be the to of – rather business

Jason Bazinet

And up something that’s you Transit mix versus below-ground that side? on of is that sort the aboveground of the sort offer would

Jeremy Male

afraid than I able be I think color a that will to – – am a little bit not more I – little more that. bit provide a

Jason Bazinet

Okay, perfect. Thank you.

Jeremy Male

Jason. you, Thank

Operator

Research. Please [Operator Instructions] from Jim take Barrington And Goss question our next ahead. we go from will

Jim Goss

billboards changes Thanks. speaking. that interested discussion you are was working billboard-by-billboard this the billboards, something – wondering the in are in be quickly on pricing decline clients advertising a talk am we at deep we relatively the just or come talking those continual measurement. Is and pandemic little having as least of well, how the emerged were how I granular going given back about quite billboard-by-billboard particular had in the measurements year? those it’s given pricing a can Jeremy, to reflected dramatic this the press you adjustment with is I basis in, about the

Jeremy Male

level. guess back I important kind sort of point Sure. audiences is Well, that now of are to Billboard pre-pandemic the

now level of of audience. kind are set in we terms So,

But think able are helpful parts, I actually I as audiences was And what it XXX%. exactly be for when audiences our back the to more on granularity obviously the severely that more Billboard say being were was going very to was of mentioned, audiences. really, to important with most impacted. So,

of geographic bit variation. little a got you So,

right But beyond at other in they actually for U.S. levels. are wouldn’t part reflecting transit So, car now, Square the markets in pre-pandemic in versus ridership. across pre-pandemic usage Times be levels, example,

So, something now. moved is it through think I that have we

with categories I little we that way great. we there any bit media, earlier and about now advertising still of where But particular Billboard a impact are there are are is certainly When very an New obviously, of selling that we at new movies, how fact are audience, for those think as and particular, you disposed both impact meager are an biggest market back, player portfolio in macro other important a is us on, the the which in talked TV, it’s we some those in our entertainment. of is look by dollars. LA, long and in quite York through a audiences

So, challenged it’s where going categories than are we that we others. of until markets where be is those come are– to there couple a more just back, reasonable

Jim Goss

guidance those And are QX deployments. XX, might there going up is other there Is in outlining move Slide provide next how been of deployment. year? any will one significant you develop in thing, in how the a the And sounds it’s like to step terms MTA you it and

Matthew Siegel

during maybe higher of but screens spend. fourth do quarter. sort of screens smaller, very We so of fourth think We reflects Hi, subway little and we We restarted Jim, in off quarter. – second I the we at the very, stepped March, going – XXX the number cars on deployments. very plus, up in – be contractors, quarter, to I and the the of will we putting did third expect a go We listed the we the pacing start the teams our the took little our in end same keep of it’s think quarter, the sort pace, Matt. at probably our same end lines would June,

Jim Goss

Okay. of taken in And comfort that will bring of there City to finally return, around it New are sort riders safety or York getting steps necessity is being in particular back? related to out to that, them to provide

Matthew Siegel

are The are letting doing the that and lights they taking the everybody. their subway for because making we of other a things. of politicians good clean, see either people Hopefully, partly lot pretty MTA have know has ridership celebrities the and of keeping can They A trains benefit job increased been it. clean. case and or been riding

Jeremy Male

offices. Maybe slow I well. their is in in Manhattan, are that say office in offices from that the still to that as CBRE What suggests data at could to the people jump We just – get we saw some seeing moment back that been sub it’s workers there are sad have into XX%.

for to and So, back we are do, successfully that we And I audience for when need selling their think substantively growth seeing high the to be many we increasing, been going see will in years. so in ridership people more we to offices. restart value that have

Jim Goss

Okay. Thank you very much.

Jeremy Male

Jim. Thanks,

Operator

closing now does back no And today’s would hand further additional question-and-answer to we have our I session. conclude or questions. like remarks. That it over to speakers any for

Jeremy Male

and today. of you questions forward and very And with look much, Thank operator weeks. thank time you events over investor the for we during you all your to Thanks your speaking many much again. very coming

Operator

call. for that Thank you your that conclude with does today’s And participation.

You may now disconnect.

Outfront Media (OUT) 5 Nov 202020 Q3 Earnings call transcript