OUT - Earnings call transcript Q2 2022

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Operator

Good day, everyone, and welcome to the Second Quarter 2022 Earnings Conference Call. This call is being recorded. At this time, I'd like to turn the conference over to Stephan Bisson. Please go ahead, sir.

Stephan Bisson

Good afternoon, and thank you for joining our 2022 second 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 for results, discussion open our a session. financial After the of line a question-and-answer we'll

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

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

the to call Let me now turn Jeremy. over

Jeremy Male

our function return yields everyone, during the and to remained billboard recovery and Thanks, strong, second be to in here the has QX We're quarter that that transit, a demand pushing buses allow through Stephan, rails sharing has in nicely results, and to QX Advertiser riders a continuing today. business QX. you, flourish. driving and as us cities for record observed strength our thank continued joining pleased to which illustrate

Slide headline the numbers X. to Turning on

assets, XX.X% May. acquisition XX%, back in the early consolidated provided in right excluding on acquired line total these Poland, and You'll grew including the with we organic basis when expectation an see our revenue in

year, Media our to and which during recovery from strong Our improvement the and a in can which to coming ridership to OIBDA Again, recovery, and transit lower encouraging activity. from measured pre-pandemic, QX sequentially are our are XXXX, revenue travel, in continues year, all year-over-year at grew Other, around X, XX%; prior every to our $XXX year-over-year. recovery. up $XX On category strength Canada, from you'll of On year-over-year up there XX% up strong up the up compared million, Canadian trends Slide pandemic more business more mostly revenues. growth million note. respectively. million and face improved that as both this continued XX% AFFO recovering you X, our Though which to Slide led its as team. versus to pre-pandemic continuing from in XX%; was retail, revenue both U.S. significant than execution transit up was revenue up compared detailed Billboard ridership in XX%; XX%. billboard the Nearly franchises, see consists was strong and with XX% also, entertainment, headwinds with quarter, $XX prior versus Media also great quickly U.S. was when performances XX% is all versus up Transit grew look for regions. restrictions ridership major was some year-over-year its business see technology,

and Turning revenues national our can the of to X. We local Slide breakdown see in business. U.S.

X strong local closer year-over-year illustrates U.S. our moving to for year. our during XX% to us of XX% quarter, impressive XX% continue local. up year-over-year be again digital teams. business strong growth performance compared up great of last National by healthy, our quarter, This the of parts outpaced of demand highlights the this to local's revenue and primarily XX%, revenue, increases, highlighting accounted XX%. to rate which run and grew over by again, extremely XX% XX% rate our XX%, from representing in was growth, the and $X,XXX. quarter historic national XX% with yield execution revenue total billboard both national While Slide just Slide growing driven X

higher to continues and, of growth be yields Our driven course, inventory. by increased

programmatic addition, digital and late In revenues. bookings lift incremental to continue our

digital you As grew XX% and digital billboard see, can to an $XX transit impressive XXX% grew million.

in where revenue completed now X,XXX and since led digital New to our advertising XXXX. over Our be transit the digital continues installation renewing we've of growth by the York contract displays MTA,

of adds We capability which, these are of full-motion display potential highly a assets, many by encouraged by video valued the advertisers.

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

Matthew Siegel

call We everyone. afternoon, million good a for at $XX expenses our up look or XX% were detailed turn and to appreciate joining Total Please our you Jeremy, today. year-over-year. Thanks, more Slide X expenses.

were plan. deferred fees. as year. favorable the the maintenance equity an from in share higher results Posting, As grew, last driving given retirement and XX%, commensurate and billboards our the index-linked and costs. case These versus revenue and market also we contain and reflects guarantee up unfunded reflecting Angeles. achieved increases in the OIBDA contractual and revenue to but our revenue in up amortized New strong small was is higher revenue that QX, led increases our Corporate increases amendment. as our revenue costs expense annual expense expense lease SG&A MAG with XX% activity the in our was and performance-related was growth higher expense typically due New of fluctuations performance-based by to the the to XXXX MTA due Variable that portion XX% York on QX, expense expense has of on of impact increased agreements. revenues, a robust well revenue. expense higher payment franchise our share offset a accrual per the variable year-over-year primarily in other Los York also payments up additional growth lease combined of step-up costs partially Transit of This XX% Billboard professional variable higher was to compensation minimum

represents see over quarter XXXX. grew a Slide percent fell a XX%, of OIBDA. million detail for the billboard but you Slide grew from additional our to OIBDA OIBDA expenses up $XXX leverage growth mentioned, on in of from X $XX year-over-year is in U.S. XX% a provides up and XX%, On as percentage and XX% points from business. XX revenue, nearly points ago. year percentage year the as OIBDA margin can our of last the margin and XX.X% was operating reflecting XX, sources up Lastly, total million, billboard X.X

driven fixed and digital leases margins higher be relatively by Our the nature to an of leverage cost our share by of revenue. the continue provided operating increased

margins expand over long to to million particularly MAG the term. billboard breakeven revenue, that which expect improved by closer its Transit the at essentially OIBDA York to grew will continue MTA, We higher $XX level. given New

prior capital in up quarter total million QX to QX XX CapEx the count increased versus these total Slide converted CapEx to versus units, $XX while increase expenditures Canada. maintenance digital digital was XXX primarily acquiring of also We and Portland Turning XX spend actions primarily Combined, or million, The was $X to million or due this billboard in digital on investments. X,XXX, XX% 'XX. billboards our digital including XX. $X spend. year of built

AFFO on at Slide Looking XX.

year-over-year, essentially by You $XX can of converted see million million our QX all $XX improved AFFO with our growth to OIBDA of AFFO.

confident significantly $XXX rates expect million in And provided we than including liquidity and to year, turn over growth our approximately For sheet. $XXX when back anticipated this balance the we around recently for forecast initially we million program. of available an grown to having in million via revolver $XXX XX%. AFFO this available Committed update to Please $XXX reactivated be is remain via despite Slide receivable XX million, full on accounts continue cash, almost our forecast interest had faster February. we our

We As our floating June rates. as X.Xx, with next stack remain offset XX% debt activity OIBDA subject net to during not slightly of to only acquisition mid-XXXX, total in the XX, our of very the with comfortable is until our and recovery leveraging total a debt more maturity declined than leverage quarter.

to cash the of we on of on our declared Directors shareholders Lastly, today at $X.XX record of that September a payable close announced September Board dividend XX has X. business

can acquisitions Portland, you million capitalized $XXX million OUTFRONT M&A. including completed $XXX new the As we from to participate see total quarter, Oregon. a well sheet, market in balance the remain of We our in purchase of additional in

largest pleased We our opportunities are the approximately as to employees region. to we well XXst team extremely new welcoming to sales assets and national and XX realized be in May closed development market as expect as be adding approximately strategic U.S. leverages on we in acquisition phases revenue synergies XXX wider pursue XX, This these the advertising OUTFRONT.

of of that, remain about the turn great With confident let be speaking back Jeremy. forward, the robust and and our you interesting. for the I over business with weeks current remainder and continues the many call pipeline forward QX quarter, months. look and to the to enthusiastic coming meeting and we to M&A year. me was a Looking

Jeremy Male

Matt. last much in not there's currently seeing this, caution, remains lead financial which the healthy. markets our Though we we're and since spoke, Thanks, volatility been to advertiser may business

currently expect good grow quarter percentage majority booked, about XX% in quarter. revenues today, last of the with up QX estimate with vast QX, to Looking on the the teens versus we'll we Based that specifically we have already our range will as transit another trends that low total year.

today in forecast which that experienced comp pandemic as this revenue moderating, year, revenues lockdown second since Interestingly, billboard half from now XXXX. we and rates world guidance of the had which the surpassed fears. levels a had internal growth against the substantial mirrors is we've for obviously are XXXX of our we're recovery QX of we are and the the comparing emerged our start in reflected essentially providing essentially periods had While the function rising already a

the total industry other confident remain now way. grapples the intended to share and attribution. time, out-of-home the measure the in prospects with This, digital for lines and dynamic, is in are and confident also of short-term much are come the OUTFRONT an Even these ability strength week, in our confidence programmatic broad-based. is trends, This Also, QX. and analyze say, to additional up conversions We pie to that, as with of the long-term of And of take with outlook more improving, ahead last a audiences flexibility strength pricing of important ad our the questions. industry. to advertising, the as Needless IDFA relative categories are digital our let's their over in and allowing that target issues. Out-of-home seeing QX to entire is long-term business. combined sell And industry. grew operator, out-of-home in With and creativity for the attractive than evolving. we is we outdoor's data pacing set better our incredibly particularly constantly in all forms open however, more automated advertisers in currently

Operator

Instructions] the [Operator come with Jason Citi. question will And Bazinet first from

Jason Bazinet

on is business seasonality getting had the all, the Congratulations, just there. of to fair a in I transit. Is there's sort where question EBITDA say generally this first it on normal breakeven back-end year? of weighted in that EBITDA

Matthew Siegel

It's biggest revenue Yes. the The revenue Matt. is back-ended quarter, Jason. calculation. the but is fourth our thanks, MAG back. with being straight-lined business quarter The we've

the So you quarter first the quarter, and underwater. second see both

breakeven. have quarter, and MAG quarter New maybe Third closer the EBITDA. to be we Fourth will expect York a closer, stronger be above

Operator

question our And Ian Oppenheimer. come Zaffino next from will with

Ian Zaffino

there's these helping wanted that you do in quarter? or you much of in guys just sustain helping last ahead truly Is that's pacing think market basically grow know pretty Or year-over-year to helping gains? what's types it? advertising talk, that's you. you the you really I underlying think mentioned strength of I these and the IDFA a Do categories

Jeremy Male

I growth, on, out-of-home and the a Probably was that question. the to thing there's Ian, thanks media XXXX. going if things think first couple to you back of go remember outstripping is for

So about the think we if only mean, growth were certainly, sales total out-of-home's look IDFA -- you then. piece, it's When worth were had national sort of X.X% remembering of healthy that I at media. you

certainly sort difference -- not of So all considerable to as IDFA consider of revenue about shift, But a quite forward. this. you make of don't we our need go much tailwind much to quite a it's growth a from a coming

I just other summary of out-of-home of strength that the a lot talked some think in my I of there. about reflects closing it

that helps So doing this out-of-home just IDFA. And of generally, extremely is well. is piece one

Ian Zaffino

that's business mainly XX% -- now, punching going then pre-COVID very see glad Again, ridership. year. I an And like but you Or side be by XXXX still of MTA the The that about potentially under this Again, They and grow stated XXXX. feel it's yields, came follow-up. low in only for the of is to Is out. one they're and this renegotiate contract congratulations can there calling in continue you're may XX% well opportunity? hitting that OIBDA Okay. on just and doing to throughout positive again? to it transit the then ridership because

Or that? be So is there there? something opportunity should we an to how do thinking about

Jeremy Male

Xx. feel We revenue keep time. very, now, using week three And message five, I When -- you think digital rather that that is we rather confident the example, subway already you're moving Ian, over we've of we very well, we way XX%. been growth. to for certainly think the this products, it And we're at doing now can you're quality we if that a than about than have about talk positively. before the that forward with lot advertising very said frequency. a we've that growth outpacing look digitization Because the reach audience sell that getting at times

frequency. subway. you're still the on little just a So less It's

So confident negotiation we could would With time. regards at ability we grow, that. if our to about not very, to the something MTA, that want think that further to period continue in to we comment do very this on really it's we're with

I already was XX-year what noting a three-year that extension we did worth think achieve to it's a contract.

our a this business. asset is long-term So in

Operator

Choe We'll JPMorgan. take with from question our Richard next

Richard Choe

the just growing national Is seeing historical. to amount list. Both environment's up what And follow room local a the versus are you that's what's in there of risk wanted on probably there? are good under economic because but recently or at still national, is most national I growth most side. for indexing advertiser is well,

Jeremy Male

Richard, right, being may where national we change. most to you're Thanks. the regards area with obvious And see

to to get to can regards just guidance I color the some think that look you we've given with national.

very to that been that more to point And the local last the are XX%, over very, the alone, XX%, scripted I back think, in I think make bit other little challenging is actually year. our a has it that growth local will quoted get strong national, that remarks.

Richard Choe

mentioned things for but deal more room front, you see of big And much in going the a that forward? you on prepared Is quarter. remarks should kind pretty second still the the M&A did going look deals M&A interesting, in How forward? we there

Matthew Siegel

it's We have -- Richard, Matt.

a that very have in full yet, pipeline some agreed due and of an we're and reached we've continue haven't have discussions. to agreement but deals diligence we We to even

promises of our size really in interested So Portland, that we think be we'll anything half. lack have the no be but there'll second active sellers. there's we in No And interest of out footprint. the filling

Operator

We next Morgan will Cameron take question from our from McVeigh Stanley.

Cameron McVeigh

and the any secondly, has discuss recently? then you that Could how in current advertiser demand on for there been pushback advertisers programmatic been increase rate? has And from trending the

Jeremy Male

those. Let me take

forward, tailwind the to doubt As for to assets, going out-of-home, no particularly us. for that real we continue automation is there's go digitized be a within

expect go our We to business we nicely programmatic as forward. grow

when It's sort with look we I you it I on advertiser pricing, and incremental demand, rather In achieve that And haven't -- one a tend yield We're some of pricing you on in sort terms occupancy mean were peak down, occupancies high I of currently demand, or word yield that interesting, mentioned those pricing, to if talk range. more -- certainly and supply-and-demand rates. but of actually industry. another to than occupancy. about up our able maybe it's rather, break the sort of XX% worth to mean Cameron, extent we're we're at

occupancy sort gap some room achieving like, our And slight got if some still with we're we've -- pricing So to growth. in occupancy. there you get still of good to that interestingly, that

grow that we'll we as So pretty able confident occupancy. yes, to pricing and go be we feel forward

Operator

turn now over will or Jeremy to conclude for question-and-answer [Operator session. remarks. additional that back Instructions] closing things any I'll today's And

Jeremy Male

joining us everyone, for thanks, And today's call. on operator. Thanks,

I you to with events November. this on Matt many call indeed. forward fall look our and much, don't and conferences I seeing likewise As said, to at that you of talking you very Thank those in results QX

Operator

And that conference for everyone, does today's conclude participation. Thanks, call. your

You may disconnect. now

Outfront Media (OUT) 4 Aug 222022 Q2 Earnings call transcript