OUT - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to the Fourth Quarter 2021 Earnings Conference Call. At this time I would like to turn the conference over to Mr. Stephan Bisson. Please go ahead, sir.

Stephan Bisson

Good afternoon and thank you for joining our 2021 fourth quarter earnings call. call and Jeremy President Matthew Financial the Chief Chairman and on Officer. Officer; Executive Siegel me today Male, are and Chief With Executive, Vice lines results, discussion open our a question-and-answer financial After up of the for a session. we'll

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

non-GAAP non-GAAP with measures the this period Reconciliations the are an We and reconciliations. presentation, will will OIBDA made financial website, release on the also our appendix on which in references on measures refer earnings other call. and to adjusted presentations of be basis. slide today, OIBDA financial certain includes of to Any prior

over Let me call now turn to Jeremy. the

Jeremy Male

and great XXXX. Stephan and joined new have Thanks, President results to of for for indeed you OUTFRONT, just to like who covering and enthusiasm in for joining optimism our here are a out join today our everyone and share Stephan my sell-side Stephan, research delighted Bisson, home. time Vice industry. thank has heard good chosen to Investor and us mid-November today. recent It It's from to of We we from Relations, confidence be our seems us

and reacted changes stronger indeed momentum the diversified November XXXX. we and Billboard the quarter high, guidelines. portfolio expected call us right fourth consumer parts even was continued short-term to our to into and again of ahead year, on communicated economy of as and transit keep enabled our demand behavior Our certain in and through as than in the even sharply were clients municipal of end

You can on low book revenue up notice. enables was doubling this short due quarter transit seen revenue Business to write our in our on continues all XXs XXXX other and across very later Once expectation. products billboard XX%, Total us the growth grew above to XX% business highlights within and to on X. digital that of company with again, the slide each see particular, inventory flexibility from year-on-year. US

seeing are gradual all especially of prior We mid-December, strong transit billboard franchises and gains transit. were in by short-term performance quite variant the Omicron put reasonably and when in fourth concerns our both on in a ridership to various We almost during pause the large trend. geographies quarter small encouraged that

that We return growth performance audience see AFFO to than and growth. respectively OIBDA with of and double as demonstrates offices. resuming improvement further again, companies our operating our are and more strong revenue to leverage revenue rates, pleased attractive their triple This more employees

which And this $X.XX our Board share AFFO. of AFFO release for outlook make quarterly I noticed sure We surpassed to also per common also to provide press about year starting earlier everyone also dividend our our that Matt and our announcing into full far detail raised more Directors XXXX go in want guidance, our will has quarter.

our revenues. is X% detailed which impressively, pre-pandemic Canada Transit by entirely XXXX. widening US prior accelerated more it the some was the you significant lockdowns. that up revenue US last outlook to our in are outpace growth lower also third people revenue market, see the XXXX. continued XX% in year. us around impacted On when Media ridership step both year XX% and almost consists versus Billboard grew performance a ridership periods grew XXXX achieved which also was In more and Media and Other quarter. slide was the can eclipsed New again York, almost XXXX, recovery measured XX% X, its to daily bring in X year-over-year But the more same at largest quarter. even despite subway Slide than that the our towards closer of by same for obviously to driven we're compared grew the from quarter OUTFRONT major doubling segment which XX% a ridership this transit three recovery million transit performance in pleased against a level see our look highlights dividend encourage for revenue Our goal. to our by

Turning to see revenue. can Media of where US sources slide we six

notice in XXXX's again level. interest advertiser You'll almost led our double growth more up with was year. billboard growth overall our This business and that last almost from national transit XX% revenue than represents larger national inventory

through returned split been pandemic XX% impressive more typical well, in performed volatile US in our local transit. has QX. and XX% to with our the which growing Notably also XX%- quarter mix business billboard Our extremely growth this less both local-national

increase in further our positive higher company and is almost XX% the above us on from XX% both. last for the helping in XXXX. for is our large see occupancy billboards push can indicator quarter increase room seven. for there's improvement represents slide demand that $X,XXX and you really -- both year Strong a think we in Another yield comparable XX% and price

from yield, and result Billboard Focusing than later grew incremental MTA the revenue an for new and further bookings. of total slide year. its and its transit to and of opportunity the on above quarter XX% last in below tripled from ground. digital Digital digital eight. digital XX% New as above XX% more last than impressive level the pandemic-impacted on more by acceleration grew digital performance inventory, increased quarter more revenue a demand was improving Transit led continued with and inventory York

other indicator we where growth our again somewhat had government restrictions. great was for slide picture, a and future. primarily To exciting nine, Canada revenue the good quarter hugely is that in opportunity digital by complete Our the impacted is on

financials. to Matt hand the Let it our of review rest to me over now

Matthew Siegel

Jeremy and joining for Thanks call our afternoon everyone. today. Thank you good

a our year-over-year. turn expenses. has deeper first the look to Strong increases growth costs. performance-related dive into were million most please expenses whole for revenue variable XX the up a P&L, has $XX year our our our company in trend Overall, at and following to been For This the slide led total of for quarter. across

versus And XXXX is component, level revenue cost you the see transit only York that were which XX% under some MTA Jeremy increased largest billboard this billboard XX% has our increase been in or the cost as arrangements our New minimum by lease certain demonstrated all franchise, quarter leverage X.X% demonstrating component Our costs strong in annual noted, revenue-share our to operating Most this year. in a with primarily under is revenue-sharing by expenses operating went geographies. up lease This revenue fixed very which business. expense, its in a increased been exception can has approximately in XXXX. franchise XXX%. MAG franchises The of guarantee

of gross of moved revenue the quarter, to full cost the guarantee. fourth impact the minimum positive a stronger franchise the and some annual margin MTA performance mitigated during year However,

million Once again, XX% expense. in from you is the our lastly, expense quarter in its operating revenue or reach. but and of twice a remain revenue revenues. offset expect model. growth SG&A year. related this costs, in can reflects was to still which by revenue revenue in for For up quarterly inception, was given partially to see as higher the our additional higher figure driving to and XXXX, OIBDA see performance-based our increases year Slide expense likely This than XX debt activity XX% almost and than last up more And This York the of reduction OIBDA quarter over fourth were our MTA XX%, maintenance XX%. leverage under New improve, up business higher since of other XXXX. Posting level bad $XXX requires MAG our as we inherent corporate nearly combined, OIBDA highest million quarter compensation around you high On last $XXX can

Our was points. basis almost full than OIBDA year-over-year increase points and of XXX margin higher a of XX.X% eight XXXX percentage

revenue were our has business. more way of Lots billboard OIBDA. detail going moving MTA XX Slide and driven the on favorable quarter. higher parts a this mix by of greater of Our yields, growth higher margins and sources

to returned of MTA strong remained our share the more year percentage likely also. of by lifted turned and the transit guarantee. yield above points of breakdown our expect Billboard as mix as geographic for favorable previously margin our positive and will billboard Media XX% a a be Looking you XX%, growth, XXXX fourth revenue. true XXXX and franchise revenue peak can more comfortably six this digital OIBDA, XX.X%, more annual performance growth was U.S. improvement MTA OIBDA margin we quarter from of year at XXXX general And minimum full this Transit level. is billboard mentioned, driven higher business. up seasonally typical increased This performance in revenue XXXX. than that $XXX than and ago total million, below see revenue OIBDA quarter a to

has accounted revenue MAG the for and fluctuations transit is seasonal a basis. quarterly reminder, a on As straight-line

improve reflect the to revenue transit and So expect narrow MAG full over to to while OIBDA this the significantly we will gap QX annual the year, MTA OIBDA XXXX. versus

XX. expenditures capital to turn now slide Let's on

added spend, maintenance we some large those fourth for tools CapEx we had OUTFRONT acquisition year them we XXX chain targets million, as The spent million spend $XX XXXX, of markets. with and expected, waited than half and up our had $XXX various tuck-ins existing restrictions line this both on finished meet and We needs. with and acquisitions all but that in supply growth equipment a quarter. general through largest our all received previously digital and quarter conversion transaction of of XX U.S. a we in As $XX the were operational with that the year in million combination screens, was the We expectation. opened and of other a communicated billboards more in We of to to in market. digital

conversion Our discussions pipeline active. locations acquisition and remains of very digital

target again XXXX. to of XXX new for we large-format have XXX So a digitals

the We hold we inventory order earlier and expected improvement the chain in but supply have some some seen year for intend still in to screens, demand. manage to

$XX late XXX%, XX through double million million, around spend. year. our quarter XX%, as growth familiar expect was last booking annual of to of year an identified this maintenance straight flowing than of recently CapEx shows revenue AFFO. that guidance reflecting AFFO Slide AFFO We bounce is around above attractive more $XX Full to to sharply chart a back including level raised

to $XXX We see pre-pandemic year. full throughout we strong year. of strength to back XXXX, XX% growth next XXXX, transit transit expect another around million, currently revenue continued from For as until improving year XXXX's AFFO not look billboard XXXX forward but we yet and

$XXX momentum can tax MTA deployments spend has our and Our rolling to stock acquisition partially an update surge The from maintaining million quarter depend We our end last for year. our million. the Slide liquidity to for expectation through pace quarter. the Slide very revenue look its our quarter, we recoup to of variant of quarter. MTA up spend and efficiency $X retains forward unlikely from value is at turn the remains further during deployment last on low pace during is and with will costs we expect quarterly closing market XXXX, Please XX supply year pleased you used cash were various see in around we separate with Committed active were the tools as over billion subway improvement. of $X We REIT In XX we doubled million, down performance for chain third will update and structure approximately the with Omicron picked our MTA the deals the $XX the our it a fourth balance and from the on on and almost strong deployment parts quarter, sheet. growth. approximately attachments. a of deployment in availability million six spend $XXX

we additive our geographies. for opportunities look inventory for to of continue prospect teams to are growth, excited Our about so the more existing

Our as our net to six to total OIBDA climb leverage back continues declined toward levels. under times, pre-pandemic

movements debt subject of only but comfortable rate We next our rates. is total and floating interest are over three away very as feel maturity years is XX% we to watching

and grow in outlook is of Directors current $X.XX mentioned, our confidence to increase substantial share common for quarterly business Board and increase payable dividend manage move Jeremy our further reflects requirement forward. in our our we approved to our desire an to potential As dividend This also our appropriate a dividend our this a March. REIT year in as

and I questions. the really in our are of our are answer turn finish forward many me that enthusiasm We strong in about few With you talking XXXX next and excited Jeremy. with person share to weeks pleased to the increasingly look XXXX. call we back to to let about your

Jeremy Male

expectations. Thanks, Matt. about share today, to markedly above The even And we more certainly fourth as we are excited our the future. quarter was are excited these as results

place audiences Further, our a flexibility demand again time at right seeing enjoy with billboards the right messages in hotter, people never been in every the and great marketers is move day. growing industry the for Our eye-catching the displays digital has as to display on place.

specifically, remain, up COVID pandemic-related are incremental and are uncertainties and of More of of to surge in we position has The loosening restrictions the is geopolitical set believe currently Omicron OUTFRONT remains diverse a looking be and on again in share some media capture of changing. vibrant The challenges quarter. assets, this we other it and towards advertising attitudes business. while is to passed, obviously the the capitalize great our Given shaping pie. our facing pace seeing great QX, economy to once a are

television with broad economy coming helped of you of of low the months. the for the XXXX's strength also we're we our advertisers advertisers many further Billboard performance look pleasure performance shifts and will constantly to newer And continue And will our many up We feel communicate levels as to range I retail and to and conferences you by forms year. yields than again be will of be so of again also that like versus from such advertisers seeing that betting. those its transit in various active see at for categories movies a the in forward out-of-home opportunities strengthen person. to portfolio It audiences. and of of strong widen you a in be double more to entertainment meeting last events train really, serve as are various online and we to of categories further great and our us updates right but don't, sports and some QX subway hopefully we'll see the and rooted it technology positive in front revenues users, pleased This currently on QX year. will indeed our growth about our well and of our – to signs. about range specifically, you likely So book. in will continued diversified be from return of last sharing We again is strength some in historically anticipate the traffic in on in talking feel really stuck forward progress. or business and of looking XXs

the that if with can line now operator, for open So we questions.

Operator

will [Operator Swinburne Stanley. We question first Ben Instructions] take from the from Morgan

sir. go Your open. Please line ahead, is

Ben Swinburne

I a questions afternoon. Good of you. Thank guess Jeremy. couple

helping market talk LA, like about revenue. seeing you're now think holding of been some take I comments the versus market You a favorably on spending. couldn't small think large of attention – that and about on lately in back you markets from terms but there's the remarks, whether growth? pull a ad, lead Could and kind getting in betting guys your talked a New been I help they prepared York -- mix has you And geographic have the which because sports have bit your you lot which might I outlook been revenue actually slide back slide of you Caesars notice just

at Matt control, think maybe to in that's seeing stuff sports expenses the betting guys. run Thanks about talk size any if in QX and that SG&A thinking could in should then you're about least any we help area? corporate the in the moderation in you for how and relative growth your maybe XXXXX of about And Just rate? that

Jeremy Male

Thanks Ben. Yeah.

me Let couple. the first take

rural transit back a we markets. going versus when a us last look So of slightly was more cities at couple obviously drag. big were holding things were One, And geographies, on year.

back -- and to to include exposed XXXX look QX York would LA. were that we exposed New we was largely level at when to and still also behind transit look that that So the markets

look there So about opportunity a just in bit really markets the as a be If of business, catch-up for we ahead. as we And that had it betting. slower sports now indeed to last could seems relatively market to then go that those outperform year, just forward. go them we larger in is billboard our now back forward billboard we actually that every maybe think

now that's about XXXX. something And back think right QX going million QX, $X category So in from it be a around to that. up we could $X like about million

And, that's tailwind delta. for the a obviously, the us. So nice scale it's definitely of

Matthew Siegel

on expenses, it's Ben Matt.

First, commissions, billboard that all from comp Transit, expected improve it's to its think little think margins, we to back the still seem keeps our to -- pull with as doesn't the going year keeps impact. will bonuses, again. performance yet. improve SG&A, again anything also will and On the MTA performance narrows pre-pandemic we revenue performance MAG we It they're related as gap. a appropriate next think digitization to elevated we levels growth its as the having it to And elevated. costs, year and that time level on continue stay our going to think gets is reward just closer stay

Ben Swinburne

Matt. you Thank Jeremy. Thanks

Matthew Siegel

Thanks Ben.

Operator

will JPMorgan. take from the question We Lizzul next from Anna

ahead, ma’am. line is open. Your go Please

Anna Lizzul

on any seeing chain verticals issues? inflation their other more spend advertising? that are also the Hi. that then or for about strength outdoor have wondering seeing out you And spend question. allocating verticals so Thanks. now various any weakness verticals of to pandemic. to supply Thank more Are the of much talk ad back was I we can pulled due you hand, you ad of if or the coming we're the on

Jeremy Male

Thanks Anna.

we time forward, as clients. just I pie think tell I might of I But the more did allocations as terms it to some the year the of of across rather share quarter media capturing start would I hope a again than look out-of-home prior expect in larger So that will was the and that in of pandemic. think percentage remark indeed doing

are broader more I QX generally we of see look will through but apparent as and But the year we that today and So in fashion live one how television strength signs also. tech life. and Movies, as our show entertainment, so venue-based entertainment, think and here some the of come categories. the is of travel obviously I good market seeing sit does entertainment, starting trends go we're at good, even which core streaming, sort is to

say So I favorite some broadly based of advertising the of advertisers outdoor with and betting with blood and others. then fresh of the sports as

Anna Lizzul

you. Thank

Operator

comes Mr. from Barrington from next The question Jim Research. Goss

open. Your go line ahead. is Please

Jim Goss

Thanks. potentially Are you meet to be I about flow a to to try of dividend more the then quarterly return dependability a issue. requirements? need was the intending if year-end at true-up for and to wondering regular create

Matthew Siegel

the Hey expect or again we we starting Jim, that it's $X.XX increase through quarter and Matt. business our to increasing Thanks until to year our this it Yes. question. We're dividend the quarterly carry for changes.

So great meets all think $X.XX. reflective around think We outlook performance we outlook. it's at of news generally it and think REIT can our annualize it people and We requirements.

Jim Goss

parts mentioned of you on. a as -- been going moving the with And what's there Okay. lot are

traffic got return. You've

Your increasing. yield is

to more -- demonstrate of to able your are if negotiations pricing could the shift behind and able the medium? of right and you at take way. going what scenes especially you how hold the You have wonder own as some been go the are point. mix I are us control to tide you Like that seen are market where you've of in the you the value in gaining command in maybe terms some share

Jeremy Male

national across rate. And good been the to I of that local And able it's I higher value demand you to be has that. increases still is our Yes. the -- pricing majority advertisers. I of Board. to to we're achieve In piece are the playing we When as out-of-home and think to both mean been we've now well when fair seeing ability we been our always below achieving a media. look at other look increasingly demonstrate CPMs

that's other the that I words in on that, a billboards we other permanent for on think months. going XX attractive one our has And done if is market rates of you interesting number trend in that not other signs. what the a achieve that's sold of I basis; taken sort in business have more some us helped is on like is available inventory out and think therefore

Jim Goss

you media are Okay. And competing which you are -- where you? do of giving picking think? you share way up market do to the think What

Jeremy Male

think be of And growth. issues the the year is only to we're I be that and whole. XX, look for that obviously an of in I Radio, still store we see trends February year suspect digital some outpace. would also margin there so that we'll a from the some mix may of that we stress. of dollars we well, media the think right the total, will need in that will do some and up think as still the sort at also. a I early it's in look at at time I digital expect -- a linear Well, I picking huge under media as I sort actually media margin TV part But regarding

Jim Goss

your just to focused the lastly is billboard in margins achieve acquisitions for given geographies, been And look tuck-in that the you've challenges as with Okay. I added current high transit and where able you recently? been to presume you're exposed could you've

Jeremy Male

throughout tuck-ins. focus on our been has billboard Well, Yes.

a made are is which for with haven't obviously And that acquisition. transit the time-based. prime operates reason that We transit Jim franchises

basis, DCF it billboard unless transit doesn't multiple our that sense is focus. a undoubtedly always but so sense acquire on makes and be the So, kind unless businesses to -- it very low will make it of

Jim Goss

Thank fair. very you. Okay,

Jeremy Male

you. Thank

Operator

Instructions] [Operator

Jeremy Male

Thanks over looking you there's to many questions, for joining very with you thanks to forward us speaking speaking Okay. much and much. -- I'm really months. again very weeks Well, no of more if today. next the to few

Operator

This disconnect. can concludes now you. today's Thank Everyone call.

Outfront Media (OUT) 24 Feb 222021 Q4 Earnings call transcript