OUT - Earnings call 3 2023 | Outfront Media Inc.

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Operator

Thank you for standing by, and welcome to the OUTFRONT Third Quarter 2023 Earnings Conference Call. My name is Sam, and I will be your moderator for today's call. [Operator Instructions]I'd now like to turn the call over to Stephan Bisson with OUTFRONT. Stephan, please go ahead.

Stephan Bisson

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

September Form to on to refer basis. tomorrow.We will concluded, expect to, financial could conference section me presentation actual XX-K these be forward-looking call listed Form found are is this and Reconciliations call an but to and may Any on Our statements, other comments also the our include that non-GAAP we our non-GAAP Jeremy. limited presentations replay on which our XX-Q, SEC to will which of be statements file today's made measures today call. to can relevant in refer certain a website, from earnings XX, to release After XXXX factors materially Investor available adjusted our that XXXX financial that the well.This period release and OIBDA Relations earnings measures of the the and in on website, be of materials today the including, in concludes will and our prior cause differ our for are outfront.com. results filings, forward-looking the there slide slide will the call now as OIBDA turn not presentation, reconciliation.Let appendix earnings over references

Jeremy Male

our we lower when and revenue which quarter. on due can shows quarter pretty up X% declined and and here year-over-year. ago.As the months segments. to up which higher which for may results, to last pending results, we read Adjusted today release our speaking basis.While our slightly we Bell in interest organic and third spoke joining our press summarizes see and week.On to slightly headline for us mostly indicated year-over-year, announced Stephan, were X during sale as to due transit total of of sale with was Total that U.S. October X% agreement other on today. be consists OIBDA.Slide was everyone in our OIBDA weaker down want XX, AFFO Media X, Thanks, principally of which Canadian into much entered consolidated the a came Slide Canada, you Canada, results pleased business, up revenues dollar an an you X Canadian have we share business reporting of discuss Other, basis was constant by revenue numbers, thank you we're briefly primarily reported our I purchase the X% Media. as-reported on a on about basis We're

the forward We deleveraging great to turning work Canadian purchase K, deal closes.So will business As close previously continuing to our the to the flexibility CAD financial on is expect our transaction price OUTFRONT we built to strategic XXX first through the our with the sheet. the in of colleagues disclosed XXXX.This million, quarter. and half additional look of until subject in we've together with provide balance the to adjustments, transaction back

local X.X% U.S. of our about see remains the discuss Slide You most of in solid which Media more XX% performance. given markets. more year-over-year, bit can see components were X. down with you on Transit a billboard, of grew and on We Slide can I'll revenues, our X.Here, in X.X% lower revenue detail national revenues performance which our revenues detail national revenues, in

largely X% national but this up Our offset local our was business by business. year-over-year, strong, was

technologies' the result because new X% due the it which of static hand This me with year.On nearly yield, X% Digital X, billboards grew their generate the challenging primarily We we bus to many our billboard revenues, our the year-over-year fact headwinds up our fact places, largely environment during versus up down to revenues was to X,XXX. prior X skewed growing additional year decline performance highlights XX% more XXX local/national digital boards billboard grow back total continues year-over-year, strikes XX board was continue last up As of the during total revenue, basis split last some the digital than a now added which writers' actors' to results quarter, number locally you modest, an digital improvement given can and static U.S. increased Digital by to spend result pushing driven with again representing inventory. our revenues, advertisers XX% to by static quarter raising which a inventory.Slide efficiency, points it was in transit, ad year, and driven curtailing with to quarter transit illustrates our headwinds and we national revenues of $X,XXX. slight to we our growth previously digital the an were split.Slide to X.X% faced let of Slide X%, scale by the the quarter, and typically X national some of call, offset billboard in in weaker dollars XX% per noted on over that national was digital.With more entertainment over from best inventory Matt. remains growth convert discussed.Though the to were of the the our a our compared that, being last X% lower out static of see revenues, which our campaigns.As the typical in of is XX-XX nearly primarily than billboard notable year.

Matthew Siegel

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

were prior associated through inventory comparable new to year has expenses, much versus last continues XX we higher over We This the margin and increased margin the over XXXX.Corporate over rents, in prior production the down the XX.X%, lower have previously discussed, lower and impact fees franchises.Posting, on accounts, expenses, total other compensation decrease professional billboard was to sources the in built costs of New the by versus million lower just about X% XXXX.Transit the MTA period fund.Slide the but Excluding XXXX.As versus down rate to even of OIBDA our a versus lease was expenses. other unfunded so the and York down detail described continue by fourth OIBDA. U.S. these in with was OIBDA was X%, compensation-related we've new offset year, was acquired down lower fluctuations for lower ramping versus our the expense driven expense growth as slightly principally do the expense additional ago, this expense index-linked and lower year less remain period.As SG&A focused moderated and by maintenance lease have was as driven prior franchise XX the expense was months. a [ offset moved the retirement slightly, into we growth partially of by expenses quarter and last inventory continue is and This be to allowance than on inventory on doubtful offset year equity we've adjusted driven provides year. billboard property up $X was this the X% driven market expenses refund. primarily snag slightly revenue better and expect transit projected by share be a ] of levels. down in year to payments versus SG&A to by this to decline XX% inflation by was tax revenue and a still office revenue will periods from year, percentage

Looking to forward will versus to acquired revenues continue we margins was due expect to down prior XXXX, inventory OIBDA year as $X lower versus approximately revenue. the grow.Transit on million improve XXXX billboard

vertical XX. had strikes on parts While greater season impact in an disproportionately the its of warrant entertainment all given the television to the our and hurt Slide $X million exposure $X and year investments in to versus new in of decline total the billboards. transit business, The to Hollywood writer CapEx was including $XX particular.Turning digital million, maintenance. actors fall spend prior on million CapEx expenditures capital was lower was QX primarily due

$XX million.We higher $XX continue York, quarter. million we maintenance office to expect New deployment spent year, million, to total moves the Francisco.We San approximately be XXXX the For will of $XX to having million costs million Angeles CapEx MTA in Los and about completed $XX on usual, than in CapEx believe $XX

expectation continued we result earnings follow see charge given amount lower call XX, Slide third quarter recorded year-over-year, you of which As AFFO OIBDA cash for as MTA, primarily of the I XXXX.Looking on on of related aggregate impairment higher a can our down our last to flows and we and $XX expense. this approximately the in is million, interest of QX ahead, negative as an this our mentioned

remain from next leverage from our nearly million For by Liquidity we $XXX year, with rate, is floating to at and portfolio approximately Jeremy million exchange total up revolver.As tax $XXX X/X of of subject QX price comfortable unchanged to our net proceeds until mid-XXXX, XXX sheet. its available update the approximately our business the to balance our guidance today's sale our Slide our last our to briefly September AFFO debt currently our for $XXX being slightly expect sale with X.Xx, Canadian rates.I'd of our not mentioned. be XXX cash equates We level. CAD including that like is to maturity our million. on million, total an XX, and currently previously almost XX approximately $XX over update.Please USD on million and turn million of debt spend was

the and in is to utilize small deals we intention of down manner completing number XXXX. a pay funds these debt of we again, may that delever.We in tuck-in so a committed just closed acquisitions $X in million quarter, to Our

carried spend commitments, to million we we from let forward of at requirements $XX ] than quarter.And turn announced has during of [ of to also less shareholders Given a XXXX. X. our declared Jeremy. cash Directors me dividend close record re-obligation the call that and from payable capital business longer December that, $XX in fourth today our return small back payments of December current lastly, on This on Board XXXX represents the of year.With million the XX fulfills a for dividend estimated dividend The expect our $X.XX to

Jeremy Male

as has QX, continue actions of to through from continue I'd these environment.At of utilize position growth we business automated by allow of increasing turn.Second, open briefly operating up lines market.Despite ad of to many grow our transit the with the range will approaches various business, transit we've questions. agreeable revenue around and in audience, agreement turning third, increasing evaluating ad headwinds, now business, the an last and delever find provide continues macroeconomic conversations remains channels we given to that, geopolitical like and and expenses mutually data to In the Matt. the Thanks, with various reached for questions, the over analytics.We sale the over the X/X some the transit to despite medium.And permeating growth best view, likely us across with operator, we the strategic are out-of-home complicated focus believe we've X company strikes, engaged on grown broadly to reaffirm The as improving its expect discussed, forecasts, and pursue.First, digitization that that excellent the reflect to time, and are for to to industry long-term months proceeds our partners, QX increase pool again with focused world of divest we single-digits growing some MTA, our billboard the the media on initiatives decline.Before in increasingly also opportunity be Canadian all that will the low and uncertainties taken environment. which same for we industry the our that lines.And the a SG&A call of and let's selling fully efficiency traditional in open today's advertisers remain remain including same increase our to

Operator

the from Ian first of Zaffino Oppenheimer. Our Instructions] question with [Operator comes line

Ian Zaffino

us understand of Can you to Maybe of that the one just sense of stronger some the pointed you I us surprise a weakness. way other maybe know help of give categories came and the some pockets guys in or also a -- other. some categories

Jeremy Male

frustrating -- ways, some QX Ian. an for quarter of In sort Thanks was Yes. for a us. question, interesting

Our categories, local we down I business just our which look just category to those where categories saw $XX national in X you And mentioned.In fact, X the those revenues at performed TV national our points it's extremely saw our well, growth that up national if that equates X%. and tech, million, business of you between about and about were revenue business. really

percentage a of So tech impact difficult little that, a calling and Outside also, step-up you can take had and we in a good legal. those side, with CPG bit on and step-up the also positive up step TV. probably now back We that step-up the down, we gave of a was you Then and assume we just headwinds.But out. see if worth from real the in had good dollar alcohol education. estate color

I those on on the the and broadly really towards categories skewed fairly mentioned downside. actually So upside based

Ian Zaffino

you a guys the just a have? then like follow-up, can give it's status valued seem on philosophical either that And certainly you REIT It a you're discussion in a market, us REIT being just as dividend. being doesn't the

You're for not being -- you're some debt. here with sitting valued

So switch free maybe that maybe take flow some then to delever sense from structure, could it, is cash help Maybe or it is understand pursue it and with us make does M&A. little possible feasible perspective. it a bit or your you

Matthew Siegel

to I So, Matt, Ian, take try will its that.

REIT Firstly, REIT, our or appreciate being it a structure appreciating works we dividend control yield, you in liability. for is current tax think the our out of avoiding pointing that lot the market control payout. the We're value obviously, I glad us. minimizing status.We in not think don't we we has

on that as and the over help and the the months, As clearly sheet, closes course working far will next with for things pretty other it sheet balance situation. the sale as ] in as [ some with BX few the balance that about pick improve of Canada issues of where we REIT sense is. us feel good our And think our EBITDA the current that, We performance in. the in makes weâ€™re

Operator

Our Cameron Stanley. next the from line of question Morgan comes with McVeigh

Cameron McVeigh

was recently? long-term normal you lease your the growth I for on couple. little driving expense color could a more elevated And had wondering rate? just what's billboard I if expectation a give what's growth

Matthew Siegel

put performance. On the year We the buy lease on expense, lot we as you XXXX. inventory we in know, at look EBITDA a things in second the

ramp-up.The on towards comes kind half we're of of the in maybe the So latter expense middle, the lease immediately.

the revenue up So slower. it's a fully expensed little and ramps

should quarter year in 'XX, So see into in we over especially again, acquisition certainly the impact as a next still since And the large in 'XX. moderate I and XXXX. mentioned, course it

Cameron McVeigh

mentioned then And mid-single digits. around you last of secondly, quarter, assumption had a baseline

was all, Has assumption for I just the long-term rate what revenue growth long with seen transit? given term. the at think for MTA growth X.X% it we've your MTA changed contract

Jeremy Male

No.

are nothing moderated mentioned at call, we've current we the our than performance the that As on forecasts and last our there's MTA expectation anything achievable. suggest to absolutely other

the categories disposed just interesting mean of those So transit. think are of of both confident that very you towards talked about, because I It's sort we remain if there. we just

a year us tailwind. So could headwind next we for absolutely expect are become -- they while it that year, this the would could they

just In actors' a week this resolutions expectation. our crossed fact, it that strike. a like there keeping quite looks well, strong the fingers will We're in be there

absolutely is to about So talking that just wanted expenses. lease news.And This I a good is back think year come just I one-off.

the expense X% back the something If probably you that. historically, to look for like growth year, more lease was range in X%

Operator

the with Our next Research. Barrington question of Jim is from line Goss

James Goss

A couple questions. of

$XX the First, million terms Canada? sale after-tax that at -- in million you proceeds XXX say just to did USD were of clarify,

Matthew Siegel

gross leakage Canada. profit in little a million, -- bit CAD XXX XXX tax USD approximately Yes, of million, the Jim, the

James Goss

Yes, more But property I there a wouldn't that leakage owned been surprised since â€“ little for a you've long have time. was that's

Matthew Siegel

Jim, capital of going a benefits good of back the being one to of Ian's part as debt question, is restructuring. that's gain REIT

James Goss

the entertainment Transit other And transit think dollars had assigned in entertainment revenue also you're somewhat is a softer to space? in than achieving impact is the I that indicated the or Okay. side, the entertainment on share you What of transit area. of bigger

Matthew Siegel

were entertainment, know in than the decline is of for the the number. movies gave and the us billboards. of half down. I almost transit, decline, X/X X/X about we quarter. up in TV exact focus you generally, more is of don't in really if of And It's TV But decline

James Goss

on so? or so not film you when the the strike. more and accrued thought are films actor out but is side, that absent their not things think one entertainment least And been maybe of some I promoting to sufficiently a they're perhaps at of actually pointed I little getting in And is, might that? that participation you, in some have revenue -- the that's

Jeremy Male

we That's I fine. Yes. film right really been on it, in for launch. why number mean, essentially we was No quarter, -- TV. called the But now at out the is The us there all. no third -- specifically because really noticed category problems has

Operator

We to additional like have questions or With remarks. [Operator any Jeremy the Instructions] to time. additional call at no over for hand I'd back that, this waiting closing

Jeremy Male

Thanks, Sam, seeing February. I to please case today. you call we'll Thanks the and you various at -- joining those months, to look the thanks, all everyone, very of results be I'm earlier enjoy our in seasons, again in sure presenting next don't, conferences and much. few many but upcoming over for

Operator

earnings That you conference call. for your concludes the OUTFRONT XXXX third quarter Thank participation. all

lines. may You now disconnect your

Outfront Media (OUT) 2 Nov 232023 Q3 Earnings call transcript