OUT - Earnings call 4 2023 | Outfront Media Inc.

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Operator

Hello, and welcome to the OUTFRONT Fourth Quarter 2023 Earnings Conference Call. My name is Harry, and I'll be coordinating your call today. [Operator Instructions] And I will now hand you over to Stephan Bisson, Vice President of Investor Relations at OUTFRONT to begin. Stephan, please go ahead.

Stephan Bisson

Good afternoon, and thank you for joining our 20,234th 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 lines a question-and-answer we'll

earnings Our presentation and the Relations that comments website, our on slide section find release of to can outfront.com. today refer Investor will the you

these cause call our After actual forward-looking our factors there as week. available expect statements replay will today's as XXXX be Relevant and materially differ call has to statements. This are we results listed been in this as our SEC Form earnings materials may conference XXXX well our from which concluded, file in Form XX-K, that forward-looking filings, including an could audio to archive XX-K include well.

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

now me the Let to call Jeremy. turn over

Jeremy Male

XXXX Stephan, Thanks, afternoon, pleased and We're be sharing good our results quarter everyone. here fourth to and outlook.

highlight QX, business in an up Canada, up some into to which the Revenues our essentially both rate. other, is basis our I'd digging U.S. XXXX. like with X% accomplishments from Before organic of on quickly finished year-over-year Media same and by

of on largest our terms an far, revenue, the up basis. by business, in billboard U.S. organic X% was Our for year

for expanding rates resulting growth last billboard of demand this higher predominantly case was driven the for has robust our by digital advertising and the couple been As revenue. from years,

programmatic. XXX our platform, fourth quarter, announced CAD growth approximately October, million, our of in continued was to our million or impressive up digits business digital including performance significantly the automated of XXXX. channels the USD the for Bell XX% quarter around XXX certain adjustments. we the from in of and XX% single to In contributing in comprised revenues Canadian subject to billboard sales These sale first Also our

our will International of honored Times and of with X expect creative X the by half Google first X Festival the stage transaction which into Creativity for the born bronze band in achievements for virtual The music gold year. the this a partnership also We to in a for at close and I'd the mention awards of was our revolution [indiscernible], Gorillas. team, like live in Square transforming award-winning team performance Gorillas. xLabs, this

the showcased industry. evolutionary of This event truly [indiscernible] potential the

OIBDA and results. Media the was X.X%. So our X increasing turn which year-over-year. the million end U.S. quarter now numbers grew we guidance $XXX to mostly fourth Other, consists provided Slide in was million. X.X% results, higher the November, Total let's X.X% our revenues $XXX Consolidated towards Slide headline you and on of while can segment X. Canada, shows AFFO of revenue was up see

pushed stronger Though to Billboard the entirely decline ended national to Kansas I'm performances X% East you November, early X, South, finally as our were and in the all but of our with New Dallas, Transit teams markets our growth the City more was Huston media call these and Slide X growth U.S. in in weaker effectively entertainment. revenue entire revenues detail. and year. in displayed can prior On financial geographies. our Orlando, out Prime the up Time leading The quarter extemporary TV York tech, strike the pleased over quarter. regions, media down revenues versus billboard see was the due season and X% fall was in

best-performing services, and education legal in retail. CPG, our basis, categories consolidated were a On QX

and earlier, local and, noted declined national, which weaker of government be while X.X% breakdown technology, by national revenues quarter, business seen the impacted [indiscernible] On on was U.S. were services heavily verticals grew X. financial political, Slide during X%. entertainment. our Local I side in more the of by course, entertainment can weaker The the

XX%, was skewed rate a the time. X,XXX quarter other shows of our growing year-over-year national billboard this month nearly As our revenues, remain drivers at [indiscernible] automatic revenue. more largest local shopping representing XX.X%, around more up growth again, and split X XX% a with digital a Digital and by our Slide was digital [indiscernible] higher first was revenue XX-XX transaction up during XX%, yield our than solid Slide fueled digital XX% growth conversions, The result, X transit yield the locally performance automotive and [indiscernible]. a new U.S. typical bit total for XX% inventory, while highlights for automotive our up billboard up channels a of X.X%. quarter in and revenue from programmatic X% [indiscernible] strong the other X% robust

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

Matthew Siegel

good and Jeremy, Thanks, afternoon.

or financial Billboard statements. turn Slide year-over-year. for decreased a expenses. into at in expense detailed up were QX. dive our $X year-over-year deeper Please lease about a For million X.X% more expenses to our look X [indiscernible] X%

of been the year, revenue share this and our billboards case throughout increase sites billboard the reflects variable on higher step-ups, expense acquired has agreements. that a annual As rent portion continued

unfavorable and reduced features to versus an was expenses. payments partially expense net expense the quarter entire flat these the offset were to expenses by in professional essentially the increase fees, higher the was for activity down lower by Corporate into [indiscernible] by offset expense on as related was related lower $X equity plan prior expenses and higher related compensation expenses. utilities lower the impact X.X% and fees. maintenance offset Posting, to MTA. share down were professional by higher repairment business compensation last versus index offset year by market fluctuations rate higher The million year. of franchise was unfunded franchises, other maintenance increased revenue with SG&A Transit partially X% X%

compared $XX.X $XXX just provides primarily OIBDA. as Slide XX.X%, was million U.S. last due represented margin consolidated described versus of again our billboard Transit million. additional but ago Jeremy earlier. million revenues sources was was $XX.X OIBDA to of a OIBDA. over XXXX. year XX% lower the on to decrease XX U.S. OIBDA OIBDA detail year's and up billboard down over The versus was

like While to moment take on a transit, York discuss our to I'd some of New the for MTA. expectations

of the Meg payments ] the about X.X% $XXX contained the up year within CPI Our million MTA by to [ step will contract. given this escalator

a MTA for account to year. a basis continue on will throughout York franchise expense streamlined New the We

to are our On deployment MTA are close the the very initial of pleased to say we completion front, we build.

our of deployment commitment. annual The our step replacement we around our installation XXXX $XX investment non-staff. XXXX capital as finishing look advertisings on being Specifically, we expect commences spend to capital will to in million forward where down

to with [indiscernible] expenditures just QX last XX. spend year. spend, essentially Slide including about Turning maintenance of $XX over capital of flat CapEx $X both on million, million

total CapEx about full just below year, our revenue the of For was million, historical X% $XX benchmark.

Including million in Of spending million about related this of around [indiscernible] XXXX, total in of offices San was the maintenance of [indiscernible] be almost our total $XX $XX spend Francisco. or New to $X total we amount, the U.S. will be spent CapEx. million York to X business. approximately $XX CapEx million to moves expect

item, close by we bridge see last $XX principally rent the our XX, the assumes growth currently you AFFO the QX in range to for a this AFFO in effective line expect XX principally was [indiscernible] XXXX, $XXX versus on $XXX high million The XXXX of which sale improvement streamline improvement reported of AFFO consolidated to noncash June million. swing the can by guidance with year. single-digit AFFO driven an Slide driven Looking AFFO Notably, million, our business. of OIBDA. is

to Slide sheet. balance our turn XX on update Please for an

and around liquidity is cash, secured the year million store. $XXX receivable million revolver proceeds notes For over million of our available to new this repay slightly by million $XX senior maturity July in available included offering out X XXXX, securitization store we million [indiscernible] accounts to a utilized and of note our in November, $XXX $XX by of completed pushing $XX nearly unsecured $XXX senior our million our XXXX.

not revenue total rigs. X.Xx, we stack our net less was than our comfortable with [indiscernible] total with facility, XX% our and maturity due XXXX XX, next December AR being remain of of with than gas other As debt until

mentioned, USD XXX in ] business to to to [indiscernible] [indiscernible] billion exchange subject reached to the related XD equates China laws [ we $XXX that sell which million As our certain Jeremy rate. adjustments --

expect [indiscernible] approximately interest transaction lever, XXXX We debt, continue of first intend to $XX proceeds this fee reduced down to to in by the half close the and expense use to million. pay and

Based of Canadian to our of today payable record announced the to business our on on that X. taxable the [indiscernible]. our dividend Directors March with we year a to pay created business, March need the close has $X.XX believe dividend. ended the of Turning our shareholders current XX dividend We cash to will on Board expectation large gain we and we for sale operational maintained

$X XXXX. are the a And excited In business on at events in we seeing spent our expect in acquisition XXXX deal million current to $XX our closing, at We total we similar to on million. to pipeline, looking we bringing about in quarter, that acquisition XXXX to the during our activity of the forward look about We accomplished in future, you lot our various delivering in coming remain and the comments to growth we and and many fully in quarter focused weeks. XXXX.

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

Jeremy Male

Matt. you, Thank

today, the billboard ultimately what happy the reported to mid-single-digit the While first a which range our rates. a of revenue expect with on be we're proved to be foot XXXX, transit will turn at rather revenue growing and as improved accelerate our the in and we be will estimate page off based with QX we low similar trends year. performance We'll to starting we are on right total the challenging quarter to to growth XXXX, pleased billboard significantly

remainder $X despite our I we around expect last of from highlighted growth first May. as revenues, nonrecurring Further, XXXX including mentioned and in see year. revenue, acquired numerous inventory full Importantly, we our are by our encouraged seeing our by early we transit year implied this We million business. which the benefiting ramping just our billboard XXXX, continued guidance, signs quarter company AFFO condemnation are additional tailwinds for the of of the for recovery and the we in

return of the benefit the from well the as crowd We and industry a half. TV Prime fact, as we second will season election the out-of-home XXXX effects out in in the Olympics Time and also the entire expect of that

to our OUTFRONT like with And of year. position reiterating performance by in proud today that XXXX. effort continue their does team last then success prepared for close how I'm the for I'd comments us

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

Operator

Instructions] [Operator from of of question line Bazinet the Citi. Our is Jason first today

Jason Bazinet

right? pieces AFFO the details sort number Do June then of the the unpacking of Canada, a XX so guide. had we have below on I the you EBITDA just of any sort close that question And the just assuming mind guys headline also of occurs? impact just

Matthew Siegel

Thanks, Sure. of a -- this Jason. of We moving of a [Audio to because few the sale more timing that Gap] there's understand year the parts

growth the in assumes initial June of citing the we So seasonality Canada resale business. some that XX, midyear,

to the based compared timing. the in of So couple given Canada operation there's hit the full points get Probably comparative XXXX that available full AFFO in think a a year we on of more of on of the shorter growth year XXXX. basis Canada

Otherwise, once seasonality, in million That to Canada and XXXX [indiscernible], is range. about million, that cash AFFO quarter CapEx maintenance led $XXX in in that interest of our felt points Other better probably $XXX we fourth somewhere a $X heavy Canada of growth clarify taxes growth. XXXX. $XX million a expense sell won't was be AFFO to would felt million little from mentioned about the you AFFO

interest [indiscernible] rates low, course, Of too.

Jason Bazinet

it. Got Okay.

hung the you for a you to the would heard I be So if right? right, full Canada few on hear points that if I year. growth, Did higher

Matthew Siegel

Yes [indiscernible] .

Operator

Our line McVeigh today is of Stanley. question the from of Morgan Cameron next

Cameron McVeigh

the media greater was you In does on growth the like have impact us or a on year. this billboard last strikes that the year. through given had And help Just a growth couple. could should look faced of cadence hoping particular, the think comps what transit? I of impact we

Jeremy Male

than our that media impacted business because positions exposure look just others when quite in [indiscernible]. it both given that industry prominent to more in at you really particular, it, it termite So revenues, the certainly

dollar most very, very business transit the terms that's and billboard been So But because TV when we business, have in terms, was where us our look significant particularly within somewhere percentage revenue in into and the national it's it, impact and in in impacted, transit of is towards LA. schedules been been for transit clients. disposed all certainly typically more successful our reasonably

this that as to So full we we see schedule a year, obviously look year. this expect we'll

as we there's numbers there we telling promoted So out the we would part through will to benefit of go in because think early and the believe year, promoted bit as year. that we'll be that this those well will some new be maybe we a months that see been earlier content our year last in have of

that. generally, [indiscernible] last us feel for So for difficult just the difficult only reported make good [indiscernible] interesting while in at to doesn't we other bit It's far. difficult was so [indiscernible]. every actually summer, us. revenue is I And positive X on mean, company, year think that that's a category I our for holding it's not was It see ahead a that tech pacing QX. obviously about

So that's a positive sign.

Cameron McVeigh

ad tech M&A think what and you're your about about what's walk update how that Curious then 'XX. material you should impact could Got through year. you're if with just about thinking the causing I just most inflation, margins secondly, you're if through some margins, just impacts the how lapping And it. some wage trend and MTA the an how and of there's view, trend Board. commission further integration comps from throughout Yes, thinking

Matthew Siegel

Why in fixed improvement York given in middle transit some [indiscernible] to our and underneath transit, franchises to Movement 'XX we main revenue their breaks New or net forward I'm guarantees. help them expect moving will margin. down our business

had, pieces. that catches of early to billboard a again, think will XXXX. billboard costs transit that growth. lease in On up we though We margins, is see 'XX drag during higher of in outstripping on a renting And there expect and at mid-'XX We the 'XX, revenue bit be even side. just the which kind acquisitions

improve, some I lease and life pressure revenue will think a inflationary certain [indiscernible]. costs, of other there's our as some percent of areas course, in

quarter-to-quarter. So last it's think than hard media year. margins of to We this say similar better year a to little

Operator

line Barrington is of Our the Goss of Research. [Operator next Instructions] from question today Jim

James Goss

Whether billboard, dominant had right. year has on last mix those What was impact an made. versus category. digital I that All to regard wondering the of year? versus this your was with static you've gains trend

Jeremy Male

QX, digital rather the Thanks, revenues, -- to back was the Jim. very Yes, numbers towards weighted that's much look and billboard our than when we XX% transit. of are

of the previous XX% versus XX% revenues QX. our So

that, step a that when see can is you and go up. big So [indiscernible] number that's you're That's X to way. think going we

XXX to board be to opportunistically in range. would board. we And continue that We XXX convert to this year, expect new

with goes of exciting have to and business. before, needle final essentially this field So digital automation. And more as revenues that we as our be enhancing And the you And believe automated the for have assets the will trend starting in be swing towards billboard then in and in we to general, an that's size time also margin on, become our business. digitally XX% the quarter that's said everything. we [indiscernible]

thing. global certainly But it's over So the linear a think necessarily if it's to not we positive look to business. we time, be going

James Goss

trends disadvantage, a the in of slower being period, is price? because improving Are could revenue ad a it's you now but think terms things of by helped I it be market plus generally it are rebounding ad feeling because that a terms in in

Jeremy Male

to headwinds are and digitize were state, I Yes, Look, adding Jim. supply. year, thanks, supply when ad tailwind it's the obviously, of a is on those on lows obviously, yes, you adding Yes. until last grow bunch always But revenue there your market. you whenever in helpful a still actually, digital have say And you're you significantly.

our So digitize. to confident investments the we're very further net-net, making still we're that in in business

money able company before. of able a have just we factors year started take to that big take been the the seeing were wouldn't in that we we years to last late One that as

today, up have we next had Yes, wants to the get or can the out in we if in really hour. through pull flexibility, This add is keyword. in it one. previously that of an Someone where looks an industry

So we to the a the flexibility, industry that think bonus for have real of whole. there's

James Goss

And right. just one. All X other

those particularly were out from commonality the you where markets you Is of that draw called among billboard a thought number your what any in conclusions You there markets might can strength be? you out and there any business. called notable

Jeremy Male

south. markets the of number in were a Look, the

So we good. has [indiscernible] state, as obviously, generally strong Florida a been Texas is

in So for Nashville, so speaks us up really Tennessee Coast saying, was that Poland with itself. with difficult particular, the particular, be obviously for and talked and us also about noted San think West [indiscernible] that in The only Francisco markets, a then being on included for difficult And some think, some maybe markets I reasons in we last we what so I And of will button. actually the year. and from were self-evident as that [indiscernible]. of

Operator

JPMorgan. of the question line of Our next is Richard Choe from today

Richard Choe

revenue wanted digits. just XQ to follow single I the low of up on guide

of transit, that you're much terms coming where is how strength contributing that? programmatic and to the from? billboard seeing potentially strength And In between is the

Jeremy Male

Okay.

Richard, to guidance, thanks So for the going the back question.

both guided is going revenues, to digits. Part to business, will we low grow continue And be going So automated year. of we're we up, a parts which side. to that mid-single that great said is to to the be which this of

local businesses why the weeks that is, it keep reason right a that to expect now. and will We that should to are be is there's now while will see up, take go thing. it also whatever is pacing good out, up few national that our What still, do and and businesses, in both right be a the creeping quarter, graph good

strength. to So see that's good

had nice year talked acceleration Look, of the already last rate we about. achieved to very in growth it of that that half from broad-based, feels the some it's with challenges see and we've back that the

Richard Choe

this at where there's feel versus do change customers comfortable and a that to you of environment lot in point the uncertainty? last wanting been home your of in more with given a that, -- more out year there's And do see they

Jeremy Male

was X that yes, really about year, actually, I X of last there up. face the do show or it, mean, all didn't really on So categories

amounts same years will the for showing in coming that that we The a undoubtedly back the So getting will the have positive think bit be given be [indiscernible] media last support we just And us that's very that expect of [indiscernible]. certainly us. clients be will that positive. support

Operator

[Operator Instructions] today. the We queue have no further in questions

like So further back remarks. I'd Jeremy for to Male hand to any

Jeremy Male

-- today. thank to X much you coming for again. many don't and we'll joining conferences at over the presenting events And seeing weeks. I Thanks. in a was very you be of us [indiscernible] everyone, sure thanks I'm results

Operator

This concludes joining. you all today's for call. Thank

disconnect may lines. You your now

Outfront Media (OUT) 21 Feb 242023 Q4 Earnings call transcript