OUT - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, I would like to turn the conference over to Mr. Greg Lundberg. Please go ahead.

Gregory Lundberg

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

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

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

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

Jeremy Male

everyone afternoon, thank us you again Good and Greg. Thanks, for joining today.

we U.S in slightly figures improved some by our Slide anticipated, than XX% than were at Let's Total a digital growth an XX% in particular key on on better look begin driven billboard billboards. positive basis, quick with guidance. more or down X. organic revenues

back the we to the revenue surrounding a lacking, gradual rest coming to forward of is and ridership restrictions, second And Like largely were lifting normal. posting return year. by developments vaccinations, side transit growth encouraged very look quarter, unchanged. still sports declines the of we our and are were the the On you, in

drive were another as to help loss initiatives these to for cost XX% the to results. better ahead our OIBDA the due nicely rate expectations contraction Our of in opposed of Both billboard and XX%. quarter

Slide the recovery out pandemic is notable improved on in our If every this of that overall and X, shape Also table. free metric turn improve to we increased here again. you once to flow continues cash cash our generated the position of

a Now broken little business new of Slide in more This on couple pieces. a let's down X. at look is of detail revenues different our U.S into view a billboards

digital we new static, that terrific a yellow the the into great confidence side. return more digital you Going pandemic, see you when more XXXX to some growth. increasing on which quickly line, than saw did, would revenues digital likely and Well, in we told recover reflecting here other quickly declined as trajectory, they It's the inventory.

lower is in of everything the that very is lines lockdowns the Los these reflecting the particularly New our larger and larger Clearly, mentioned quarter, look also be may we this graphically might recall it purple You just thought last markets that smaller you from When including been restrictions all and right of the that performance helpful impacted markets, Angeles. show blue X% can contracted has line. to our were this We slope see as positive, at line, you quarter moving direction. just have down cities, and York that XX%. to the

direction. of a transit. same U.S Moving the it's to the has right slowly been Slide not but as billboard, X, similar we heading in view Obviously, on show slope it

the later X, recovery we recovery closer of this was the on how worth for in issue. about rest was Slide I'll let's have on was strong at just been audiences and but top low noting increases. it's numbers down considerably Taking for this of return, rates when look picture. left But of with rail every the on XX%. infection a U.S XXXX stubborn potential week at talk far first, ridership and the performance vaccinations, So billboard transit increased remains meaningful our And our call. grew transit XX%. Ridership more the just revenue look by while down lag chart, XX%

were on and again and can weren't the than local on XX% which solid ones. in and Obviously, rate out-of-home by total Slide X There You an on more obvious Billboard improvement weighs digital. categories being yield, considerably sequential decline similar see market, most and shows national transit in and certain on in on our X, another National local driven down transit. was both in heavily simply Slide the was billboard XX% important entertainment on XX%, better static respectively. both, loss down but that these transit. travel the was

company digital fact, Digital growth of single our revenues with quarter, the important to XX In strategy. digital our really yield hugely only total was over XX% in decline in digits. is remains some shows at our We for they're story to levels. see which a from ridership early on. bullish record built and locations us. the Digital new level transit a some are and programmatic benefits starting we Slide

to bounced as we well audiences have expect monetize As as historically. it we back,

Our here return. one the most media be XX billboards, we've our there's U.S. will what reason Slide the To other The shows they here seen and an full is recovery for audiences to somewhat complete motion in their as business. products demand revenue and screens before in takeaway mirrored key were quarter, in decline pandemic, of the believe the the in video XX% to every market picture Canadian our

So let me over now hand Matt. to

Matthew Siegel

today. joining for everyone call thanks, and Jeremy, Thanks, our

we were combination ability third as million XX. convert of was $XX you some the lower our year, basis our largest minimum contributor The transit from revenue year-over-year to will expenses, in shares, time a a shares. can able franchise guarantees see lower expenses a million $XXX on around to Slide on and reduction annual which For to revenue remove this into

were restrictions of and on Most income due the lower took of sports sale discretionary from which million reduction and at We SG&A and steps lower marketing due the lease landlords. business, continued revenues, from decline of our post Billboard the reduction to we drove with our expenses also other. had outset maintenance to our which a in expenses the the renegotiation other also pandemic. $XX

lower down corporate of Lastly, primarily expenses. rate was compensation on

OIBDA, Before I explain want we to turn important this an to presentation change quarter.

into hope We flow, SG&A, expenses right instead use are advertisers. are billboard costs OIBDA across because acquisition nearly loss a negative now sales significant OIBDA in story to are different breaks since our to our AFFO, remain covenants, base. This signing to our components. its billboards XX Billboard's noticeable digital of is during revenues you pandemic up Slide OIBDA We it portfolio we're XX on to including also reduced by down OIBDA as Transit this Slide to What added bridge growth XX, XX%. significantly into our the year, has from cost trim driven see as began. with line, which improvement our digitization people our for nor debt classifying lease classification move time spending. higher reflects Capital EBITDA. total of OIBDA this impact Collectively, XX% of our total digital better the these the cash costs includes business. OIBDA amortization on with how billboards on segments. appendix to our year-over-year still helped XX. margin slightly down Slide deck helped expenditures increased our is last above and and SG&A quarter. weight, definition These remains given We margins push the leases fixed therefore of fact, the our expense. expense into commissions an has quarters The in this eight paid no free earnings

Our total million of in guidance. CapEx shy a came just $XX

XXXX. in million year, CapEx, which Slide relatively OIBDA our we of to AFFO we last billboards pre-pandemic bridge factor will As look total shows were expect year. And the the XXX add XX drivers of in CapEx total, $XX including our as other portfolio be XXX expect with back key digital to growth flat. XXXX, a around levels. $XX this relative we at to to to of biggest Most million similar to

is uncertainty, recent comfortable interest refinancing cash there's early and XX% entering it's OIBDA, a our days, annual this improved approximately aided we with MAG by fact of contract. our are million. or minimum driven bond into in in For taxes lower January that XXXX, guarantee X, paying and of rebound, a to the as forecast Incorporated XX% to still while accordance $X expense, the by AFFO we're MTA

moment take Let a on me that.

position conversations overall scope have We By agreement all the of the of deployment, and continue regarding these and of changes the of and engage excited remain we long-term for the term us MTA hope to with little considering equipment and in and pandemic. to the future. factors, of both share an in going near there's to about details possible overall, we extension the MTA, pain impact will be a and more constructive to bit the wider with be to the a gain we the for contract you in short-term

revenues lower to our the are efficient paying While there is It's add in ridership the and deployment. system. MAG, lining silver when causes on and that's be a the us impacts there fewer more to equipment displays people

could of change. lot and on mentioned, are things I there As going discussions just a

could to We will neighborhood the provide costs $XXX appropriate. information model in as equipment million. XXXX moment, we million of more At $XXX deployment the

deployment this metro XX. year we displays in-car of and can MTA in on subway, rolling project of where You commenced at see table that stock, stood Slide the course, north. railroad have is the at along end the we on our Notable

fourth amount refinancing of turn stands $X year The an our have free It cash refinanced the expense. in Slide almost to improved we equal to annual our X.XX%, quarter, Now XXXX. notes $X.X flow billion. notes date, XXXX, interest positive With and of coupon generated our liquidity during Subsequent lowest million the on in let's to again. XX. with $XXX end, million new at saves balance sheet due

And but in maturity economic there's still is we current over little Our to deploy strategically. believe next cash outlook a expect comfortably good. the we uncertainty, this XXXX. is will out time, Obviously,

and paying strategy has not acquisitions in Our Xinvestment technology, capital changed dividends. allocation and digital

due we dividends pandemic stock in was and level, compliance Although called common preferred paid in REIT we on common dividends requirements. XXXX, with the our in our to

billboards, forward and coupled are Board the for move comeback cost XXXX statement sets to of obviously resilience our XXXX will we of and dividends. closing, XXXX, regards outlook our control in to In happy and XXXX well we us have up good income with The our us. recovery. As evaluate the behind with

the over to me Jeremy. back call Let now turn

Jeremy Male

Thanks, Matt.

now the our the the Slide turn sports first let's as outlook billboard. total businesses revenue a business the would similar expect, to expectation especially while full we'll for booked Now billboard for don’t do will the strongly the Right U.S for being be in to on our world quarter. But first and very in level 'XX. a progress, on we was XXXX changed quarter, year-over-year transit be to further And ahead, sale. for to XX. as second business quarter. our make the lot had down good believe expect revenue at recover Not high XX% you look on XX% our our adjusting is quarter, both basis, range in we a We looking in as black

very As be to will mentioned the on I our earlier driving call, recovery. larger markets our important

in heard we belief leasing were are in some times for cities. the bleak back. statistics big share the to remain XX% that strategic You've say Manhattan. they in us urbanization big After year, many cities in that up a anecdotal apartment Slide evidence future Interesting coming XX December. our of firm

cities be, today. and but different used they as they're be up not they As may very going exactly to than are to certainly open be offices they further,

Wall their ground. Facebook's with Goldman sharing vastly the are, showing change, You travel He has be new Midtown of isn't today Sure, at data back office. everybody Solomon especially for but today David seen saying Journal described about Manhattan may a mode And environment going how different. Sachs, we've above been comments their you the today's an have aberration. operating Street work-from-home office. patterns to plans may post-pandemic And story audiences that big as he wants from fluid

transit. the you're just you mobility. or still that reconnecting home, and in in now engaged the see brands this as in a turnout, reaching while changes on one middle for out right desperate them have great assets of people week and nearly to with neighborhoods, is market. highways homes sympathy. [indiscernible] growth or Magna all can of half feel and unfolds of places. of are What's they're out-of-home the We'll if the so in Global portfolio about they're from more to. possible. to in in get the noticed so that them new whatever, experiencing with day Outfront digital showed markets or do their users therefore the out-of-home device recent follow our media districts. business more Slide means we that optimistic. Both as to going shopping average world, XX% places much public of when XXXX, more mobility as indicating urban people a of And and consumers some People office you're year total than real the used in in XX% in and the U.S that XX when out is right these different And old working two industry XX% out-of-home key are be they from are for thing reach on important to frequencies away is The I Even research of increasingly shifts X% in XXXX. also and encouraging

In important. will pandemic our the become to addition reach mass rebound, increasingly

content up piece Some a is $XX small great ad Linear audience. growth most we'll still and soon that, have we If XX% advertising its ahead significantly of billion taking today's an pre-pandemic shrinking industry of future a popular of free. showing be pick levels. are platforms share, despite industry an as business TV

and choosing get said when Publicis former what most brands people's all they're the through drive Outfront, For attention the things of which people's At we at break and a digital. noise, we do are digital we recently, scale, want, As personalization We mobility [indiscernible] behavior. strategist, that. medium? the important do

our the rebound. homes. in with for of get wanting out their positive, and is company, world stay post a to So closing, whole we believe outlook as out uniquely the And pandemic placed we're

operator, open now the that questions. with So lines for let's

Operator

first [Operator from Instructions] Alexia We'll and Quadrani take go with ahead JPMorgan. question our

Alexia Quadrani

much. you very Thank

of couple questions. Just a

MAG. elevated QX, we not same you given Curious but really for this this on level down on First ongoing, just the effect the wondering, guidance on the depressed the MTA. transit assume year. in they still have agreement the in talks remain you Thank you. relief then give in why payments said levels And the if with if amended stayed are I'm 'XX, just should just generally, I you know sort of XXXX? full second elaborate in of your question, ridership just didn't year will can sort wondering And of

Jeremy Male

look seen And to to in of really at the world. think script, and bit QX, let's end take I'll maybe, but MTA for we Obviously, Matt like I early that way. we more I'll changes, it now as our did on down I last back feels everyone it's days, Alexia, I the now the we're in haven't think back fill year. I the some -- positive QX than the starting we forward really the but of firstly first. back work pass business was guidance guess, for laying as little it's said, QX, a

typically recall, of year to business of QX the we've for prior XX% the may You end our said actually talks before. before that

of in that is I that taken So account, guess, most guidance. into

it's QX XXXX I worth good. pretty also mentioning think was that

XXXX. nearly Our QX in billboard business up was X% of

So, And I -- back. just it's some that if pandemic, I I mind. not some question in they think still the Alexia. before to of fitness, look, timing. helps, look, they a categories, But keeping Matt, of maybe there's they'll retail, think in and a just will comp entertainment, again worth come round. love travel, those tourism, It's it love it's that mentioned

Matthew Siegel

MTA. the question Alexia, on Okay, thanks for the sure.

having, in contract second can beneficial liquidity. find to I'm and something the we we And a that think year, MTA. conversations constructive and my thought unprecedented good we were time and looking had changes tenor things mentioned accommodation now in haven't both working we a ridership with we pre-amendment have, them, quarter was we're that to we relationship about contract really then. probably how that's MTA. we of done the a the our at deploy And improve contemplates us going we discussing what mutually everybody, works scope the remarks, we're The the as and enhance I and and what things and remind last for ridership. prepared lot First -- out low or to amendment and reached in And a

time So growing ridership and as as we'd think city we the the was going this big 'XX, in back 'XX revenue far past. continue 'XX, higher where as help anticipate will a it in We and be position. than that forward 'XX in be revenue back to in get vaccinations share will

work solutions. now. a benefit in we're good we out problem shape, Long-term again, beneficial pretty some think we as So mutual short-term

Alexia Quadrani

Right. Thank you.

Operator

We'll take Stanley. from question Swinburne with Morgan Ben next our

Ben Swinburne

you way while you. interim that the growth curious look if any is you how the like? midsized impact is us out second sort areas Jeremy, visibility this we're uncertain maybe at into and impacted transition looked just Anything if magnitude tell might too know today? can the when tell of maybe Thank have see of MG? EBITDA sort of the like in help period or quarter, the in can And Matt, you help back you don't less is order of of Or to us are billboard, look pacings? it can think what I'm month quantify you about moving fourth would there us to a helpful. then, sort I maybe be you from just small could quarter markets,

Jeremy Male

-- a business positively business say are we versus thing undoubtedly for absolutely obviously in and last Well, going year. I think comp I that is leader is that all a commenting as of XXXX. little Ben, first to very commenting a can against down QX. we trending in out-of-home fairness, whole general, on see later on weak our just bit is maybe guess What in this laying environment. In are we the

give we I to some make real we're bit back feeling we're think, about I year. the in. And I of QX, further the normally be we'll guide give, comments the that did road. don't as color quarter the able specifically the more get a announcing into little generally, half that we down any post think positivity on

Ben Swinburne

enough. Fair

Matthew Siegel

month. your was our it inflation. the And first, But goes details. we will morning, then is question, in tomorrow XX-K it MTA That’s $XX million we about on more -- will have then, file and to a it's where MAG, Ben up MTA, last year the

same the in neighborhood. So

think mentioned, higher everyone we was the will like revenue We from in I be As subway. 'XX. second 'XX quarter, a than call flamed

back So be I earlier. what rev bit. increased some come and into think I help -- watership to what in be. going think of That we during think that's the we That into we'll have helps the MAG back a can -- why Hopefully think to year, year. be impact as continue higher forecast The you in little even the where subway, were depend on has help then that'll 'XX we in a extrapolate will comes will see advertisers think MTA 'XX you for share that 'XX. not the we I will than mentioned back 'XX. be last 'XX, and be you’re this And year, out so will

Ben Swinburne

Okay.

were something last So paying words, in other a on year rev share. them you

of ahead. go So was and can of get whatever thought Out revenues what delta? year curiosity, we to the were that's sorry, last sort we

Matthew Siegel

XX% share Yes, U.S in and revenue revenue I quarter. amendment we paying on the from in remember the second, were third them the fourth year, last

Ben Swinburne

Right.

Matthew Siegel

back -- of the back This the at with MAG. XX% year we're amendment all

Ben Swinburne

keeping had get didn’t you had in I you other to success Boston like, been partners Right. and 'XX. agreements Francisco? Understood. any know to able had there. with transit rev you the update Have actually some if share getting San think I your

Jeremy Male

some transit We've back. other revenues yes. is, with markets some majority it's mentioning really the partners. of vast some And starting now answer the come worth really, that good to in Yes, negotiations had see we're our also

we're So not in MAG. actually,

the the yes, potential to -- potentially in that this tick get MTA, stock. long-term that has So very on definitely word, a -- contract that’s is And final the longer maybe that’s box. a can

us us out terrific real XXXX. We goes year bit into XXs. share a about, it indeed here As the Matt year. it It's will back is this a be next And as contract. believe in growth a said, as talking certainly drag the in it driver this for to we're was future of contract revenue for

Ben Swinburne

Thank you.

Operator

Zaffino our Oppenheimer. take We'll Ian with question from next

Ian Zaffino

it Hi. of laggard, why us much. exposed, would a be very to talk it wanted a what's seeing and it's digital happening thought just doing business about Great. well? maybe there, I maybe more and I so it's color Thank is but on Thanks. little a like little billboard you the to return actually Give outperform. bit bit What would urban growth. we're actually have

Jeremy Male

digital an Sure. point a seen thing. advertiser really Well, view, as think look, of from I generally generally good is as

can You flexible space in a way. more buy

And more messaging, now You coming tailwind your can have also a we be and on you can creative through with later. of bit book programmatic. little

say revenue is is Also that, some signs in put last to year. great relatively that's small, a piece did new while it needle the just we to Now fair starting bit. nudge

is that absolute helping also So, growth. drive

think of number we allowed believe turned what to or -- years growth But cap to with we've once conversions falling cetera And year, a cancel intend herd real at back installations. it's a and it's why generally our really for we our improves to to and -- is obviously, what as as be this on pandemic, just XXX year, anticipate new of fully level a signage, the in to going it's driver but of growth as new that not immunity, get went biggest the this showed, back business. XXX terms come. and and interesting this again, the people organic great vaccinations, flexibility really it we into showing yes, the part really is, I and et to business

Ian Zaffino

that. guess, my And into I kind to dovetail then, of follow-up

should is And of proceeds? invest there other goes? or cash, You're encouraged actually make that M&A, sitting anticipate uses we greater on should $XXX in you well of to that, million of et given plus Thanks. about are digitals that cetera a this more how use as your be performed, cash, thinking we where

Jeremy Male

thanks, yes, So, Ian.

pass So at couple words, maybe, here. play couple a over to of particular, Matt. regards then With to I'll conversions in just of our things and say digital a there's

in point stressed and And the goals, opportunity obtaining have digital. The is bit always little where other in you're really own is sort already build we've first that to certain zoning permits going eating out. of new in terms we to signage lunch of there particular given is vastly substantive digital just out careful a increasing a not that And your by city or DNA. markets,

So, like, signs sort if position. it go and that's of just a easy XXX go say, in other this put of less XXX couple cash let's and things Matt, terms comments whatever, that you us make year. out in of to or for

Matthew Siegel

color. to to to offense. using numbers that some We're our cash return adding the Just continue

our the mentioned, our consideration to past whether some Board And you and to during in requirements liquidity mid to we point this again continue our our and size from to into MTA we've we think the larger. at deployment as the digital drive hold business about taking a a did we'd dividend for prospects on to pandemic put small like more do And year. our turning work spend at little or will higher CapEx course small, of the acquisitions I and further heard So We're a me, digital couple closed increased of than conversions XX, our we XXXX years. more base. which from little XX hoping install

is have it put the that And we cash strategic and we'll it. think we a we we're use. asset, So good to think happy

Ian Zaffino

you Thank much. very

Operator

our take next We'll from Wolfe with Instructions] question Bisson [Operator Stefan Research.

Stephan Bisson

afternoon. Good

Just two quick me. ones for

or And MAG. mentioned MAG contract, secondly way kind in month QX talk in think of first on in structured pacings, you how see out? bit terms looking the and you improvements the starting sequential in that monthly that's laid Did Is it January, perhaps you it is a about can it's little test? annual how the a MAG. in the then The an I of Matt, QX? the

Jeremy Male

QX, then on take on So let me another QX. quick -- comment and QX

all you a business in So mean, positive the all early a said in I world, as expect, as -- we think, that in detail more question, as QX, little would QX right go earlier were bit pacings similar too I now. QX, on because QX an similar. said right of broadly broadly I while now. pricings to into the booked. the any And are being I And were was

Matthew Siegel

And, Stefan, an the MAG. monthly, goes partly it of every year. goes the annual think out, annual We and month. it's But the course up right, it and and check over about first MAG the of out you're trued calculate where into

Stephan Bisson

so Okay. much. Thanks

Operator

time, to That conference speakers concludes today's closing for or I'd any question-and-answer session. At remarks. like this over the turn back to additional our

Jeremy Male

and again. next weeks. Thank very to investor look time many And you the much you very today. questions forward Thank few everyone for we you speaking your over your much to at for up of the events coming

Operator

concludes for your participation. Thank you today's call. This

disconnect. now may You

Outfront Media (OUT) 26 Feb 212020 Q4 Earnings call transcript