OUT - Earnings call transcript Q1 2022

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Operator

Good day, everyone, and welcome to the OUTFRONT Media First Quarter 2022 Earnings Conference Call. At this time, I'd like to turn the conference over to Stephan Bisson, Vice President of Investor Relations. Please go ahead, sir.

Stephan Bisson

Good afternoon, and thank you for joining our 2022 first quarter earnings call. With me on the call today are Jeremy Male, Chairman and Chief Executive Officer; and Matthew Siegel, Executive Vice President and Chief Financial Officer. our question-and-answer we'll session. of lines up discussion a for a financial open results, the After

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

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

me the now to over Let call Jeremy. turn

Jeremy Male

binds yields, has everyone, and great be XXXX results, never today. start billboard business. the Many our ahead teams low February. to can flexibility of in is our incremental indeed, level our sharing was our them the improve trends terrific previously Media of revenues trends, our XXXX us encourage employees, results, XXs Thanks, thank continue revenue year-over-year increasingly positive we the X. at to up seen to our and, efforts These on anticipated And grew been Slides XX% digital, hotter. the expectation. an strong of increase This the quarter continue office, stronger through of for and transit employers noted Demand which as on consolidated part Total spoke details our of given billboards ahead late into of least revenue book X continued It's first led we than and with today. of to identical to join U.S. for in in in time. reflected a the last be in Stephan, to here came we you, which we XX%, joining when X% of the and basis. their

to X performers exceptional, markets but growth continue transit, large mostly in our in all best the for in our York was revenue see strong Other, of virtually with our of which year. Canada, QX. was prior regions billboard both XX% performance being L.A. consists New We and versus and up of

are of being levels our X, growth us year-over-year but widened, more which our the is expectation which led revenues. the to AFFO, revenue it performance, XX% XX% a MTA ridership, XXXX outlook the New headwind can Transit Slide QX grew more impressively, improvement X outpacing also XXXX. to $XX grew nearly revenues deep QX. U.S. quarter XXX% both same in Media we up growth XXX% but recovery Billboard was its revenue compared year-over-year even by accelerated from in million, versus transit the achieved continue further readership OIBDA last around again, you same and the respectively. York to strong year, the in next to year. gap these Transit and when up Indeed, trend face Our period observed On see of to confidence against a pleased in of XXXX. see and at between were, gives $XX a million $XX revenue positive that million both lower measured

was large both was buses as outstanding the advertisers this again national XX% our in subways can Slide to Billboard force. in an Turning and local's local up outpaced of and XXX% We business. sets see to and revenues breakdown across local national up of year-over-year Transit XX%. XX% XX%. strong National return up X. local quarter, up National advertisers, compared the to with growth

One of company XXXX. on yield encouraging impressive the above and our a X. seen most $X,XXX is trends a Slide our from last as QX year record, growth, XX% for billboard U.S. Over increase is QX XX%

improved both yield last to which growth contributor While quarter, first occupancy from versus 'XX. our was significantly is 'XX the largest rate, has and year's ahead

digital This quarter versus revenues yield, trend than Looking increased revenue $X.X our expand our XX% of helped in XX% quarter that Digital March and accelerate Unsurprisingly, illustrated window. quadrupled last X. booked year. than was late soft stations the Slide continue grew the selling on increased Digital we Digital car Digital Billboard beginning continues and XX% deeper in be the MTA, digital and to year. added to QX, as revenue be to quarter inventory the revenues. demand Digital grew nearly booking incremental XX, deployment. inventory New at a rail more the with led well revenues, versus last last million large to of was on from total by Transit first continued returning by into and our more XX% contract new which stages comparison and Transit York and

the New be future of the York continue to MTA. especially We digital excited about

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

Matthew Siegel

led locations and lease variable X% of expense contractual expense appreciate Notably, growth our Total MTA. adjustments. everyone. look revenue expense agreements. variable quarter. small step-up share additional annual this the Slide a Please increases billboards were that a million contained lease to Thanks, and Posting, year-over-year Jeremy, given detailed up strong of was best higher or for higher majority only New markets also in boards revenue to expense that were and XX% to good X types revenue. costs. is more today. share due costs were new on up reflecting L.A., expenses. annual are franchise share expense primarily XX% these primarily revenue as was turn Fixed performing up you our York portion XX afternoon, which modest XX%, in in reflecting up Transit QX, our $XX other typically QX, of was a year-over-year to York a of at expenses payments and Billboard our minimum and joining of up revenue results lease call has We our but our XX%, and maintenance activity New higher from due guarantee to the our revenues, in performance-related

$XX increases year costs a as combined are XX.X%, of accrual of On higher driven revenue XX, Slide more XX.X%. than X in percentage OIBDA. small from margins from our bad OIBDA compensation million well XX%. reflects to year. a these Lastly, last XX% leases and by see ago and to offset of time. debt being the quarter the We increased X our million you that the anticipate to our versus was increased over our continue higher These transit higher an growth U.S. cost will on revenue performance-based of OIBDA increase Slide digital OIBDA and expenses, grew as SG&A This relatively XX% somewhat than $XX points expense higher additional improved detail provides and revenue, OIBDA, increased margin corporate almost driving billboard given and trends up percentage margin a is million. billboard sources represents than Transit improve year nature expense. up help and franchise Billboard margins expense. can of margin points in fixed for primarily by of higher on revenues. XXXX by and more share XX $XX last the OIBDA

quarterly straight-line we on As basis. MTA for seasonal revenue the mentioned the a transit York fluctuations, QX New has accounted on is MAG call, while

paying negative largest of felt the the is QX. impact MAG So in

expect significantly to MAG the MTA that full year, to continue revenue the narrow. We will over breakeven the gap

In $X QX still to XX% total billboard X,XXX, supply of expenditures ordered with to versus spend. increasing prior in QX digital time CapEx XXX Turning CapEx XXX XXXX. of maintenance was spend displays increase expect XX we our million this million to including XXX issues, in due U.S. to We boards added primarily quarter, capital digital digital was $XX versus lead additional U.S. investments. potential year. total to this and total million, or XX. the add $X.X recognition the The up on year billboards Slide chain

QX OIBDA Looking our at on see million AFFO million AFFO AFFO. $XX improved flows growth year-over-year you our by $XX of to of can XX, Slide essentially all through as

XXXX turn to from sheet. OIBDA year, to be XX% For XX Please to to update Xx is for million. AFFO and our leverage continues balance our our we an total to around the million, recover. full $XXX net over Committed $XXX growth expect liquidity on to declined as continue Slide

XX% comfortable very maturity remain is continue until our monitor total of isn't rising debt and XXXX, and rates interest stack We our to subject only as floating rates. next to debt with

our Directors on the the of M&A, of acquisitions to that has record today $X.XX declared our participate to announced business Board at we again June dividend tuck-in June well on capitalized in of light. on cash We first payable close shareholders XX remain X. though Lastly, spend a quarter during was

over months. the well and that, would speaking weeks back off to meeting interesting. we With come. the being rest the you to as remain exceptionally very forward, characterize turn I M&A of started call and with and Looking of about me to look pipeline XXXX enthusiastic coming and Jeremy. forward robust the year let we many the

Jeremy Male

Thanks, Matt.

illustrated quarter outdoor truly as as inherent a our friends in those of the industry first as The many company's well whole.

streets is cities these their more for advertisers are country say out. are times, returning Street While it's on Workers The get of strong, wood. portions to busier back. the least Main that offices our knock their to always sensible and of and certainly I'll to are week. messages the at seems be spending crowded. to in

QX, where percent will sit while great estimate broader between expect and currently another obviously, that revenues quarter. and have QX uncertainties in XX% last we the range, From XXs we specifically with low year. Looking XX% today, to grow to exist, economic up geopolitical versus transit we

will look the the of business. trends believe year, there we are As to at benefit balance we of the number a that continue

to our allows benefits creative advanced First, which our selling our window, digital, from assets messaging, time and more shortens increases advertisers. new for market, our to opens also to up automation conversion

incorporate return entertainment, our that demand, users drives one Outdoor significant retail sports and remains strong the most estimating while of also third, impressions services, such client to more appear traditional travel, IDFA yield, And by diverse per professional Recent have of out-of-home a is such to other of advertising efforts. clients. lower cannabis thousand changes base as campaigns, advertising but includes tech, and cost-effective stores their for media, such due some which print that into influenced TV, cost than online as the to they form advertising far and branding outdoor's maintaining digital. radio, any medical, with our digital Second, forms betting. advertiser newer Magna are ROI to that of beginning companies

wind facts, these the in I forward. QX with enthusiastic the questions? hope who presenting to can past, outdoor look that I'm many indeed of for the many see outfront you spring and And August. stand in our I benefit industry and don't, you. To sales. ever about events to believe with working years take of to we the for we of going state that, our a in now like conclude, and as today lines too, my conferences to summer. I'd advertising and Thank of open larger at operator, and have total I But this in say forward in various Given results, meet those as portion out-of-home, our been

Operator

Morgan Our with Swinburne will [Operator from first come Stanley. Ben Instructions] question

Ben Swinburne

L.A., think competitive sorts is and and you can't still or then room Or across of least for so Two there's guys. incremental at a companies that. heard cycle and lot platforms different we in which and I that you're this have supply the didn't to this other to weeks auto, do cetera, that other place of later but of it's necessarily CPG, biggest? lot be And called in et of New businesses, huge any for Obviously, in precisely, that of I weakness guys, in calls we weakening, obviously, if how hard revenues a write around it, business quarter those are you certain questions any that X, not digital hear Do about are you categories, curious you markets in than a run but advertising advertisers? extrapolate? And of categories that out-of-home, all from are this the Jeremy, have sure and was space. is you heard really comments, of those there think being point? offsetting just do a constraints just earnings and business out-of-home X worse. interesting you've fundamentally function chain been out some know have know talked you I'm seen your the to a have you which of visibility with obviously hear these a it'd and just at far markets how York in those lot you your for pre-pandemic left months, getting

Jeremy Male

Thanks, Ben.

nearly XX%. QX, Let take utility black. at you much so mentioned way today, If we obviously, little technology again the nicely as pretty of our every you guess yet. We is categories actually doubled, is travel far, was XX%, guidance. think me XX%. category up resell I up tone can seen sit we I the point in sort softening saw in XX%, pacing we QX, to auto, up auto all here tell Xx, our up any a that probably up at look And QX, that try was running was that drove obviously and looking while of that. the entertainment and is first from haven't And

it we that think have not our So to have notice really something, I local business of wouldn't business, do we because a if going quite look we notice when you but we XX-XX, we're that lot typically remember day, at to it's a it months in maybe whatever hence. you or business for a lot literally X-week the is, business. by national periods X- a national down like, And few weeks if of couple that is are of laying

So have I something think seen we now. would by

whatever comment, and in the billboard pretty Just currently mean, New around markets XXXX markets transit all on weighs that's because our Obviously, 'XX. placing going nicely XX% way in the are back much L.A. businesses is York is business New strength. of But right York it the around to now. the a I generally, across of above just both

Operator

come question Citi. will next Our from with Bazinet Jason

Jason Bazinet

you saying, as that the like inflation the cynic changes just can opposed Jeremy, taken taking by I remarks, share, XXXX I prepared sort And billboard given levels. some have imagine place. well, your called of outdoor to you in comments was that's potentially that IDFA a Just out driven above rate made guess about of of some

sort color in the is to where you -- offset reaction So are sort something that's that say, of well, of category? dollars any you to can just to enduring more sort people knee-jerk just of to going shift of could provide of terms ad opposed outdoor this inflation-based perhaps as

Jeremy Male

about Yes. of you. you probably ahead rate sort sort and -- you And yields, guides and quite that a through. at that inflation seen Actually, X/X. on kind little the I -- then it, that's is then that of some to including spent you whatever imagine, -- into sort that was about if time, now. work of and if of bit is mean a our our comparison. rate occupancy inflation right the into of that that the you seeing any X/X over headline we're the rate well this growth drill time for as we and of of kind But we yield down can we've rough of down just is we split further, When look bit

nature much demand-based. good leases fixed I for like, industry our duration as far inflation and sell and But generally shorter it's is leases actually over leases thinking ability inflation today's ability I seeing us, I of industry. generally sort we're headline of what out go versus whole a of As to of the length because much cost that those the for go the of and now a than reflection thing inflation see, And were good for you relatively can business to very see the is if a out thing rate. a for don't versus our generally as believe our do

building Our headline these many weeks news. hit the book is numbers before

Operator

question Morgan. I from with take JP will now a Choe Richard

Richard Choe

EBITDA or on wanted follow Transit side. OIBDA up Just to the

it in positive turning a kind on and talked should see should improving or when the But then strong that business? bit little that You turning of results trend. given we how positive

Matthew Siegel

Richard, to the for New in thanks question. thing is The MAG key York transit Matt. the It's the situation. OIBDA MTA

year, MTA we but the the expect breakeven the closer full For to the be to of MAG, under the course year, during getting that level.

EBITDA and in be later transit. fourth will York of quarter, a So the in half year, positive third the story New

I So the turn -- should overall, the in year going think, later our positive transit transit forward. EBITDA portfolio

we we'll we said be MAG expect at and revenue our Looking MTA, say next impacting XXXX the that overall, past this back to at shouldn't XXXX, and again we've the year's in levels, situation transit numbers. including have

Richard Choe

typical guess, national but the are campaigns there? Great. longer shorter, And intense? or they getting color on then side, are advertising the I duration, more, Any

Jeremy Male

you have percentage So our would had that typically kind when business, national of book tenant of -- boards sort them in call -- drill our both and we our business, locations. local we into we of

are the they XX we But digital, booked would once national revenue be months. much X in have so we weeks. majority But the of So be again, flights typically more for booked can flexible. for now

can weekend dose else free come over long in going we to for or have people a So be. to it whatever just happens

as past, and short, we think inflexible. good that relatively was that something it's out-of-home thing a has because pretty So short always seen in being the

the on you into weeks come and If evening out-of-home, way get see campaign you us there's now literally before, you whereas down Saturday. your to have on with Friday digital, flexibility X a can major no could campaigns the of

Operator

Oppenheimer. with Zaffino now [Operator hear Ian Instructions] We'll from

Ian Zaffino

doing gave numbers. like a you much how understand the of other conversion quickly, maybe us what apples-to-apples be So increase the know is CapEx inflation, CapEx supply factor in that the But you can costs on chain? might help factors? versus given really Just I side,

Matthew Siegel

bit for It's is And define. to necessarily a think supply of the of higher. maybe and inflation certainly, depending the generic Ian. roughly Thanks, cost which of Conversions little generic It's some higher. $X.XX materials a hard Matt. but bottlenecks, hasn't chain drop shipping to static kind screens, cost a impacted digital, not the Historically, of the I some any inflation, labor the necessarily say, -- million. cost, on

precise the it up. was I have a -- continuing conversions. still, going for to of number I XX% think gone But X%, I don't push to So attractiveness million maybe changes the economic you, don't or $X.XX is so. these has

Ian Zaffino

Okay. are Yes. the I rates, imagine economics And the higher not probably higher.

Operator

We'll now from a with Jim Goss question Research. Barrington take

Jim Goss

discussed in a a your are place? as intended billboards, rate do basis. You've things? I'm transformation a be digital to the the there other try any I positioning comp their terms couple how times, thinking sales you is to usually those very room how And know on been as with against to what of media that's and if particularly of attractive particular medium run, discount a teams to of thought media such outdoor rate are big much wondering taking

Jeremy Male

to like is the Jim. at Facebook digital -- tends online. is TV. of course, competing I in way physical radio. know local get across all. through complement or issue Thanks, spectrum But screens, media at much people it's going say to I -- if out-of-home, general. the you're When be if digital their don't drive worked which with media to in put arena, against quite be Jim. And it's to often, with be looking often, When you Quite guess sort helped And that we'll split. that, we will really indeed market. competing competition the the campaigns then XX% very local, of be I Yes. arguably, to national the TV,

Jim Goss

Okay. And other. maybe one

of issues Obviously, occurred risk? necessity be attention aspect drawing especially New are informational With the sort of security an that of some effect maybe opportunity of is is York the terms the been tremendous, benefits? this -- in spillover gains have and provide terms the in might also have and it Francisco, in well-publicized advertising -- the that Board risk. the perhaps San perhaps Or transit, in the that it but to can the you overrides can a

Jeremy Male

that's think here. point I Yes, really a good

that think I is true.

think good screens is our I the system. terms very, very going customers of in keeping in we effect can of what's and advice a on consumers digital use

of incidents. the certainly putting the think I broad there are yes, -- the digital can look, public and more increases the And ridership. disappointing transit now the and are to a screens significant have see need starting because throughout generally exist. subway using obviously, we people and really -- are me hold the cities transit environment to been in because continue couple environment. publicized we we that that And authorities we, off fact our we getting it improves within hope within really just now put the of want to to up passenger And it cities public transit well

Operator

questions And to like closing or today. remarks. we I'd turn no to Mr. now have the additional any over for Male back conference

Jeremy Male

for that, Yes. Thanks operator.

joining to thanks you much the us to forward look with speaking have Sorry there. great for rest me We cut months, a weeks very coming and the remains over you day. and across of today. to to Only say,

Operator

that And again, today's thanks, for joining us. everyone, conclude Once call. conference does

You may disconnect. now

Outfront Media (OUT) 2 May 222022 Q1 Earnings call transcript