Earnings call transcript Q1 2023

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Operator

Good day and welcome to today's Outfront First Quarter 2023 Earnings Call. [Operator Instructions] At this time, I'd like to turn the conference over to Mr. Stephan Bisson.

Stephan Bisson

Good afternoon and thank you for joining our 2023 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 a we'll question of lines up discussion for up and a financial open results, the After answer session.

will that on replay will today the After today's of comments refer available concluded, earnings outfront.com. the Our a has release our slide website, presentation Investor there you the find be call can Relations section to and as well.

differ earnings are include forward-looking SEC our could XX-Q and results XX, file to to that listed our statements. cause statements this XXXX expect forward-looking our factors may materially Relevant call filings, these conference XXXX materials and This in Form Form in from our week. we actual including which XX-K March

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

me to turn Let call Jeremy. the over now

Jeremy Male

I year and than joining had sales pleased first that hoped, us our was continues. share illustrate today. results up Stephan February thank the slower I'm for which to our call, resilience On report and pace while quarter the of picking you performance. started the our to off We're Thanks, mentioned everyone business we happy

a on X% see which small to and condo numbers, business, solid summarizes million almost acquisitions X one-time can core Slide quarter during in billboard of the benefit an grew you which consolidated tuck-in As nations. some our the revenue number growth headline total related $X reflects

QX, have our been this guidance. of Excluding ahead low-single-digit revenues up mid-single-digits would in benefit,

are have interest But in-quarter able Adjusted provided down the expense this now quickly improvement the A clients the to digital this increased would lower of in efficiently for AFFO higher was largely flexibility decade OIBDA, quarter footprint, and timing CapEx. of given book ads transit been our maintenance by type post year-over-year, possible. and not OIBDA by quarter. and declined our given the and ago, driven

with versus X.X% Slide consists a and as-reported year flat organic results basis revenue X shows the reported an our up U.S. Other X% segment an Canada, prior year-over-year. dollar on essentially which on basis constant media basis. on mostly was total of increasing

flat On was Slide X, with the X% of by being most includes the every revenues. sports good of Digging York Transit last York grew as Miami essentially given XXXX. a our below-ground up subway comparison components New Nearly digitization. reflecting versus you were displays, revenues our New deeper, our performance was up which tough in continued that can we year-over-year. that year-over-year, created U.S. our particularly see worth markets year revenue of call it's betting strong. in the bit noting in legalization billboard Billboard out, and category should in media

gains were offset display revenues. these However, above-ground by lower

behind The can and business seen revenues U.S. our on in details local Slide X. national our be

early weakness local to up the national in February. saw X.X% national we XX% nearly As quarter, growth year-over-year you which discussed compared see, can from national's we outpaced that reflected this

and particularly national the local strong given local bit Our XX%, typical the quarter, XX% XX% higher than XX%, a our split growth. was in

driven grew X most for our year, a under year-over-year demand growth strong our last rate shows U.S. pushing yield yield inventory, up. prices average billboard our which by $X,XXX. just to premium Slide primarily Similar healthy to with X% was

nearly quarter strong and our performance representing Slide year. digital XX% X% up X basis XXX with from growing highlights in our last continued almost total the revenue, digital of points revenue

approximately versus contributed both XXXX. evenly, As X% up relatively you can see, billboard and transit both

the transit nearly revenues decline revenues static in X% by driven billboard year-over-year revenues. was up our of X% resilience the year-over-year. Static which given was growth illustrates X above-ground which year-over-year. Slide grew were This down

So over in more Matt let the detail. of financials review to our me now hand to rest

Matthew Siegel

Thanks, good appreciate you We call joining today. our afternoon, everyone. Jeremy and

on to turn XX% Slide just year-over-year lease of share lease various expense to more also approximately detailed developed XX% in expense a variable in our at agreements. adjustment X year-over-year. of contributing prior XXXX Times was out-of-period of expenses over for QX, operating over increase up a is up portion Outdoor which expenses as an variable our in million million to billboard many Please Billboard and Total Pacific locations look in this Signs including relating XX that $XX billboards inventory. or $X.X our increase Square the higher the expenses in year, were newly quarter Also recording property the such the Portland, mostly resulted acquired expenses. this and revenue other calculation nearly in new contained

guidance not to was this reflected in accordance the on any that of statements. and the respect that note we materiality our adjustment, financial amount With adjustment assessed previously have the material SEC of previously out-of-period we issued amount financial concluded in the statements issued to with our

Although adjustment we course environment. we reflected our the evaluating have on of not adjustment material, is control the amount concluded that impact in are the of the

the and was lower the revenue. to in transit revenue impact the Transit also under owed share MAG from at franchise XX% guarantee up because the first The due increased has to New MTA on York expense of relative largest to markets quarter higher the MTA annual minimum agreements. XXXX revenues seasonally

additional professional driven market on Posting, retirement plan The costs equity billboard of index-linked utilities unfunded from year. million that an revenue, X.X%, just fluctuations combined and maintenance maintenance increase under compensation. increased impact primarily expenses. $XX given higher versus adverse expense increased other up was our Corporate fees, and and and results the SG&A higher by higher compensation-related last and was activity expense increased

million inventory developed signs revenue new revenue newly fixed for pre-existing the especially OIBDA higher increased no portion of XX, comprised a you This higher due substantial from smallest seasonally activity last a On expense year. of with for lease M&A ramps acquired has is and $XX and the from and to last which quarter Slide true headcount can inventory costs year our compensation in declined the expectations. to XXXX see impacts costs our MAG as from quarter up

provides the OIBDA U.S. The prior XX than well largely was XX.X%, on additional of was versus the over year billboard key the decline down this Slide by but margin higher up versus margin of expenses, Transit due driven higher to MAG. adjustment, expense growth was earlier. OIBDA revenue relative essentially share as OIBDA. mentioned York down OIBDA ago our was increase QX the $X and million lease previously the year, XXXX. a sources the New detail certain outperformance XXXX the markets billboard flat M&A of as recording versus quarter mentioned driven by approximately of inventory average in as in last MTA year and versus

X,XXX adding and Turning $XX quarter through management with to Slide capital during to spend CapEx expenditures win million, fully up versus on the developments, ago XX was XX. agreements. months XXX displays QX acquisitions new conversions,

We assets expect for revenue years and will driver both investments, technology, of a be and to new in these come. OIBDA growth

interest of AFFO taxes. down our OIBDA on also is lower QX AFFO given of approximately year-over-year Slide cash million of Looking $X but expense XX, the higher can because course you see higher and at

unchanged. the for year remains Our guidance AFFO

million including XX revolver $XX our cash, $XXX on million an over almost securitization update $XXX about Committed receivable under our Slide and million turn available of is Please to on $XX balance accounts facility. sheet. for our million, available liquidity approximately

maturity subject our As leverage our next total level. rates. X.Xx, debt of a mid-XXXX net approximately QX with with up floating our from comfortable to March stack We debt until X/X and XX, not total very was our tick of remain being

$X we the working made quarter, of We of on couple tuck-in were year. a last acquisitions million in including deals

in last given activity we our in continue carried current dollar completed over in XXXX, additional see marketplace, than -- both 'XX quantity a in from to lower continue expect terms. Looking year, the the pipeline forward, close of in while volume to and we tuck-ins to and deals

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

performance will we dividend February, we our As continue policy. year go our to drive financial Board we REIT to through our evaluate allow and and in the and will mentioned as requirements

up a start closing, meet In off solid sets we're our expectations. to year in full us which XXXX to

me call let to the that, back turn Jeremy. With

Jeremy Male

Thanks, Matt.

environment somewhat the the flattish. throughout uncertain, up macroeconomic we quarter visibility and this pick with as first estimate range revenues that mid-single-digit to range business grow our the of again were in continues While will remains pace into pleased we billboard of trend that see on total and our transit the QX above today, Based QX.

system automation is, business spoke last couple this portion to is since late billboards today, concluding years quickly the The Before part delivery bookings in enabled on digital of touch to made our that of want meaningful our a of last our our growing automated digital the we is rapidly small And and and part many of programmatic. February. a for our but that becoming revenues. the business includes call much is we purchasing I more which and of

around channels digital our of fact, automated In towards are XX% revenues. moving billboard

contribute we're said meaningfully growth excited automation it we've even As going over coming the our before, to more the by potential years. and believe forward will of

improving reach, reason poised out-of-home's continue that pie. Automation is advertising the the I total share is capabilities one why believe ubiquitous industry more taking just Add of out-of-home to to digitization, according compared measurement grow to value X%. the to current media advertising media, relative other of forecast in that MAGNET's forecast, overall it's out-of-home well expected X% no surprise XXXX, and ahead of is to continuing

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

Operator

from take We'll first Jason Citi. Instructions] question the Bazinet [Operator from

Jason Bazinet

or and about and question ridership guess I'd If just aspiration be pre-COVID about transit, for a that an terms one how transit on could of you just to sort thinking possible of wondering happened questions; your guys on lower comment you seems flat your commentary the are given back And that. given it's then what to on one second just going SG&A. had top-line bit quarter I this the if in that's quick if not to I getting love on levels? of still was get levels. I X XQ, like expenses. in sort color on

something think linked about How SG&A plan? much was to is continue? that retirement index-linked of million. is I should that it the And equity up that $XX

Jeremy Male

that underground bit with just into drill in guess, ridership, little on I transit. milestone York a revenues first up. you were last actually And riders. script, particular, the maybe week mentioned a is of color in sort thing X actually million that New Yeah, reached if the I more

So about I don't think in riders all it's necessary this instance.

of I some tough us the of above-ground one of I big few as comps from betting. to pretty that buses. called down for said, you I particularly also, of that sort which Part of categories users was it, we is year sports remember, part it and have media just down think out they're this were media,

about So of think specifics. it's I some more the

it's frustrating, in think as I we transit we significant until much little be year. prefer transit. seeing drive can a confident curve it a go the honest, growth to the we'd Obviously, growth to little to that able we'll recouping. elongates through we're But some we -- start more be be

I'll question Matt. hand to the over SG&A

Matthew Siegel

SG&A, the you I the think Jason, equity-linked. the what impact of asked

It's an So unfunded million XXX(k) pension participation. bad guide guide last million have $X about a we clearly, swing -- million $X it's plan about a this of good year. $X plan, made year, executive

Jason Bazinet

that's just equity... mean, go something when I it it sort the the tends of up So always P&L. in to that's --

Matthew Siegel

the the way be market. of opposite could It

particularly S&P it's to So exposure the XXX.

a down, the an benefit. we goes shadow funding the S&P And have if up, have it will when expense. goes So

Operator

We Richard Choe. from the next question take will

Richard Choe

going wanted or the to mix normal expect continue stay you Do on national? strong to do to go you mix that I national. a towards follow-up the think about will is comments local more to relative the

Jeremy Male

saw to which at expect local into I XX% to think just extreme, national as sort that local is, mean, would of that up it's reasonably a about particularly I the look you swing QX, fair when say said, of some outpacing year. was the great weakness I we -- QX, national, be the see. the And nearly that pretty look in significantly. will which at of that point reflected I When we start

the made that script I in comment think normalizing. I local was sort the of

So implies in sort of more the low-mid-single-digit for that range local.

Richard Choe

rest the to out-of-property forward And lease seems then growth growing a that, of and more expecting be And one-time of should a because at of lower what kind be margins going rate? I expense moving side, year in is the property guess, with on going terms we parts out-of-period or few on? be should the it for the there

Matthew Siegel

Yeah, Matt. Richard, it's

first year recently second, think continued the I of in margin, quarter a certain a bit is you're quarter. of parts; booked and performance the digitization, last portfolio the and kind fourth here adjustment geographic has expenses been A headwind. positive lot right, that moving out-of-period from we third of

the guidance inventory. been notable but of has last full sure year, wouldn't expense high not inventory for slightly side. from fixed share One I'm maybe nothing be the year to the expect profile it outperforming revenue more either I materially on we're giving higher but different

Operator

We will our next Morgan question Swinburne, take Stanley. Ben from

Benjamin Swinburne

QX guidance organic you but growth yes to that's to basis are Jeremy, but... of acquisition think both mid-single-digits I ask to just wanted points just a answer to quarter. the range I the an realize of for rate? about you guys is had if XXX clarify speaking benefit this I and

Matthew Siegel

it's that. Ben, Matt. grab I'll

ton we For of a a do of -- tuck-ins. lot our guidance, We it's did all a in.

is out we called So mid-second Portland which the one quarter. did only we've

performance. quarterly would include that So guide

Benjamin Swinburne

Okay.

lap will deal? the acquisition actually benefit as in QX So you that moderate

Matthew Siegel

Yes. lap of part it. We'll

not new that inventory So number. is in there benefit it's but some number a big

Benjamin Swinburne

then think structure a New lot And remarks, that sure prepared Jeremy, transit noted transit versus focus business obviously, and today the in was or but certain strength ridership. think you the if about MTA I your of billboard a York. Okay. your wasn't I kind on specific of call and there's I to in

think City. well tend you in rev called doing York So guys parts are of like York guys New New a and and high because I York out Board it's which seems doing have Square a huge Times share. also New business is well to you of it

kind the what's And which your market you is about New And think not? that what's versus that going where could York maybe So is And recovery? largest? just of talk working the forward? about you and how

Jeremy Male

East has really -- York Yeah, We've -- billboard digital X the years, developed we've also We've X Times also sort new last New strong. been locations. great business in -- some Square been or pretty positive generally of York, over a But up, New actually, actually, higher in regions. actually other was way sense. the which bubbling X split And region. is business the definitely into our east we down any than includes

pretty was would much Northeast it was of billboards. we in So stronger the what say, all

Benjamin Swinburne

get revenue quarter. just It lastly, margins. enough it back quarter? Okay. seem guys but you, on Matt, there's bunch obviously, And like in in to margin a is to should of that would jumping QX, growth then this expansion Mid-single-digit second bad

second be just answer I that wanted willing to you'd see So to margins? if on quarter

Matthew Siegel

months. in Miami locations St. you New Jeremy's can are revenue Northeast are doing improvement LA we in we'll in course, of think doing up. going York bit is. well. And Obviously, let the parts transit. MAG matters gone as revenue is New of can't a but well helpful. it we York is few headwinds To matters as doing be much expensive see should It But the and of know has all And revenue we are great. point, and continued [ph] where get if softness not just The outpacing somewhat it how a that's [indiscernible] those and Louisville some well Certain to in growth headwind. growth, more Louis. be

Operator

next the question from from take Zaffino Oppenheimer. We'll Ian

Ian Zaffino

at look color ex-gambling? to or how and tell just us of the to your much business the I'm Does perform can. And get we the on similarly? national maybe compare MTA pretty billboard I does Can compare you as in that as trying did it York? New side how can base

Jeremy Male

and give in. local national, billboard split at look transit the and national national we when -- certain not I'm Yeah. we don't

add So I'm definitive. not certain that that I can much

think the I country. was quarter billboard across first say can is national I all underperformed generally that the for

Operator

from is Goss Jim Barrington. Next question from

James Goss

transit. about couple A

wonder And is in well? update lately. And might wonder a a by opined you if in reach to the outside might worked if the of rebound the as update I could Francisco press out say? an in have been pricing? of correctly then that's couple pricing of there week, of of lies some in on whether York, bad New I decline finally, any of you value lot of that day terms transit mitigated variance advertisers. San a would terms provide ago that and transit you impressions You market has quarters in your getting

Jeremy Male

first not reach, about, XXXX number of certainly into to much absolutely the that to audience very just it's but that say, what terms was XXXX okay, argument in the of in to you're the there believe is that The play. fact come the XXXX, reach back compared, that absolute XX% again, I proportion XXX% of when guess, continue will we it's lap that utilizing transit. past the to really of And question we get now don't said much it's -- need that believe revenues. audience we we

an real of be to So to we continue It's business. advocates part our advertising. transit integral

huge we advertisers. a terms -- frustrating in a And for as than it's to have curve piece more the good XXX as we We is crossover that little elongated continue top reach firmly forward. be of hoped. move will guide recovery said all believe earlier, We us the a that I that will

of week, can In don't think noticed. they're to usership, coming be of actually Interesting numbers daily going you weekdays price service upping the it's used terms into we MTA that's is weekends over going benefit that their to it certainly for a be look on us. just saying be to to the Jim. when positive day one also of sort that that trends but the a than is What that's weeks we've of the at of and heavier also we basis, we relative that the say the

business. mostly of up it billboard Francisco business, of transit answer Francisco, was that where it good terms San QX. But actually, terms actually The to want in we San be is not I a of the terms is probably In it's in our question. in think, generally Jim,

San Francisco. out sort of of mixed So signals coming

James Goss

One final one.

and posting, and spending you wondering or those value of with if I'm cost cost category better the maintenance other. what used digital doing categories of in mentioned type expense terms of you're Is are worse with changing impact? versus some it of now to spend? or You

Jeremy Male

digital that's the don't The have kind do any change of in part repairs. to more to or roll of enhanced the margin Obviously, from. truck we we digitize, to where a comes copy

as there's still most very inventory So of know, our And cost. static. site you some is

a inventory We're digital tens X% servicing total. of less impact than Our still revenue. boards. It's on of of thousands is static big

Operator

at any this no back like you appears question remarks. the or closing additional that further for I'd Speaker, It there time. Mr. to to conference is turn

Jeremy Male

thanks and today. many of those and our our for QX see of the in operator at hope but everyone summer call Thanks, conferences look I meet August. forward to presenting joining very to I I Thank again. that spring with you over results And various to course you don't, and much for you

Operator

today. all for That's

Your disconnected. line can be

Outfront Media (OUT) 3 May 232023 Q1 Earnings call transcript