OUT - Earnings call transcript Q1 2024

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Operator

Hello, everyone, and welcome to the OUTFRONT Media First Quarter 2024 Earnings Call. My name is Harry and I'll be your conference operator today. [Operator Instructions]It's now my pleasure to hand you over to Stephan Bisson to begin. Please go ahead.

Stephan Bisson

Good afternoon and thank you for joining our 2024 first quarter earnings call. of call and Jeremy President a Matthew Financial a the Chief Chairman and question-and-answer on we'll Officer.After Officer; results, Executive Siegel, discussion session. me today lines Male, are and Chief open With the financial for our Executive Vice

any well.This these call statements. there on March certain Any our our refer presentation to today will we factors Relations XXXX, the in which are of call to the other the conference Our today available section includes XX-K our will include me over may website, After today's Relevant Form slide call. of concluded, on of to turn to be XX-Q, adjusted with can in our XXXX on prior appendix XX, are file a made find be references in release expect and that and which the our forward-looking presentations results comments you actual earnings on has website, replay refer the will tomorrow.We SEC now the differ to that measures release and could as OIBDA our filings, earnings and presentation, period earnings Form an non-GAAP OIBDA basis. measures call slide listed reconciliations.Let forward-looking cause Reconciliations materials the and the Investor financial Jeremy. materially to including financial non-GAAP from will also outfront.com. statements

Jeremy Male

picked spanning categories of of all a nice broad-based can acquired X.X%.On you across both Billboard you from on local continues was when U.S. recently broadly with periods off solid both seasonally by the in billboard, summarizes to growth our call more everyone, account doubled Slide quarter local expected numbers, see healthy we year-over-year, we our today, February.As our improvements We're Atlanta, up on well would head of a to of in growth Adjusted and first OIBDA which and in more Dallas have pleased national improved seen during results the the an quarter, to X.X%, with revenue start year but transit. thank solid X.X% year-over-year. revenue X, smallest Much we $XX results growth revenues spoke in and last breakdown to segment more X, is consolidated and headline quarter, our afternoon. improved in detail. been San X.X%, revenues were you, in in strong share business lower X. return transit by impressive came Stephan, ad The equipment and can recovery national, higher have for Portland be up joining in Slide last condemnation our sales versus Canadian steady revenues you, if revenues during X.X% this Francisco. Local the Other in which us OIBDA media MTA on this wide February. total than our you media can into in revenue reflecting up Thank which transit. which than our as shows billboard Further, by increasing highlighted a year. total million Slide offset to was AFFO, up in particularly performances, U.S. prior quarter.Slide exceptionally array X.X% our was digital of revenues growth down both led and the driven our perform regions.The driven XX% given in in nature, to revenue X were U.S. much see converted of steam.Transit signs that assets with take

the quarter, of declined our during the was local weaker by trends As a primarily quarters, due X.X%, in recent while up markets. billboard couple driver national larger X.X% primary growth in of

was categories local political services, to service our quarter XX% split the more skewed and of were basis, towards our best-performing in Given government, than retail national XX%-XX%.On first entertainment. providers, the local legal this, XX% a more consolidated typical

year. were revenue.Slide the to billboard revenues MTA. On yield medical.Slide XX% our digital this review transit that, X.X% comparable the strong in X.X% financials. up rest now drivers to our total obviously from revenue up utilities, $X,XXX, digital XX% real revenues Automated up a and the digital in up quarter it weaker quarter, our reaching our over automated first estate, health quarter from The year-over-year rate record. Digital X.X% of side revenues while in auto, growing solid XX.X%, our was conversions remain of growth in our and year's was performance yield X last U.S. illustrates highlights travel under higher representing X quarter.With transaction Matt the billboard up of X% with largest the and growth represented me just hand the let last by XX% fueled of quarter

Matthew Siegel

Jeremy, good Thanks, afternoon, everyone. and

please expenses. up dive Slide million and $X about versus more expenses financial detailed X under just Total in flat the quarter for last turn expense For year. year-over-year.Billboard essentially look were statements, deeper our a was X% into to lease at our

amendments index was offset to management linked The to million XX.X%, margin higher up expense due the approximately MTA related professional agreements, up to quarter costs unfavorable small professional during were the year, maintenance growth over higher which franchise fluctuations to in period payments activity. last business.Corporate $XX up million. was portfolio mid-single-digits. up down $X our in plan. equity of timing Excluding leases as impacted maintenance year, million on by first year on added related consulting billboard and in to XXXX.Transit and and included given XX transit other OIBDA $XX.X more points MAG the XX the driven basis the the annual CPI SGA to $X up year-over-year. related impact the adjustment to expenses, of flat market offset of U.S. billboard non-renewal to million adjustments.Posting the expenses, retirement the principally was by just slightly increases utilities low- a were annual a billboard an elsewhere our in just of benefit items expenses the OIBDA compensation-related compensation-related the contract impact additional versus than a OIBDA This prior the in escalators to prior was lease rent which properties expenses fixed combined fees higher costs, existing due expense higher provides expenses by to detail was of other was project.Slide some loss-making Total X% was business versus expense unfunded from quarter are higher and fees primarily and sources added over OIBDA. higher the was expenses XX% the related lower U.S. to and

spend we was believe loss year, capital be to primarily For due to that margins to million, the revenues continue expenditures $XX.X CapEx under improvement of including call.Turning in just a of XX. up The basis.Transit the million billboard annual loss slightly last better QX we $X on compared million an to full Slide earlier $XX.X this year Jeremy as million. on year's was will described U.S. $XX.X lower $XX OIBDA the reduced X,XXX. with in $XX digital year. quarter, to of timing both CapEx year business.We U.S. our total XX million of believe the over total about this added that was we to this that spend the than due will billboards continue primarily The million expected on CapEx and of U.S. to last approximately our spend, spend increasing just maintenance our

to full total digital target year. continued to We billboard for additions XXX XXX the

us offset year-over-year $XX Slide due the increase QX in phase you and On train small taxes cars XXXX.Now MTA.Looking in CapEx, screens the the to the improvements maintenance U.S. forward, can our in expense. in initial over build subway slightly are the expect a was to fulfill higher and into obligation XX, of phase New beginning substantially and bridge for to of added the we displays transit digital just the to the over New other see bringing million. side, maintenance The QX, interest on AFFO on this we nearing of in mostly deployment our cash end $XX million AFFO format year, X,XXX York turning York OIBDA, contract

For XXXX's AFFO that from high-single-digit continue reported $XXX expect of to in be XXXX, consolidated range we the AFFO growth million. will

compared our XX. $XX March $XXX our XX, nearly facility.As leverage million was [Indiscernible] As million assumes flat revolver for in receivable our X.Xx, net this total and million of around we a our the Slide approximately on noted balance million, is to of sale $XXX liquidity our guidance February, June turn close Canadian December available sheet. of securitization an update on via cash, XX to including available accounts XX on business.Please $XX

sale year shareholders seasonality of We and June the dividend, expect approved business today to our as on that close of our down we our $X.XX Directors of our June move the the meaningfully at XX leverage payable of the the to cash Canadian announced on given X. of business record business.Turning Board to of our upon the progresses dividend close

back that expect our quarter XXXX.In of come.With on me XXXX we about taxable business, compliance.We we activity reminder, a pipeline, the in remainder acquisitions XXXX the $X of year up dividend larger operational look our that, we let weak based is acquisition spent turn As will and current to closing, the as to our believe call on the we year our expected to we deal at Canadian million later the the need gain a toted current pay similar of continue the Jeremy. tuck-in created with during and enthusiastic looking sale remain for and to to expectations to

Jeremy Male

to first rather what transit, were solid after We XXXX. pleased a our difficult which Matt. returned with with be that particularly performance, of growth quarter to proved Thanks,

quarter broadly and line growth we in forward revenue Q both the Looking terms scale will our call of of the high-level second today, and strategy our shape on to between be QX's, transit events estimate couple billboard like a transit with approach and also quarter this business. were based that I'd to that exemplify there today, transit.Before the important ending during discuss as to current quickly our in

market. by It sustainable obligations.We this a annual advertising while partnerships. provided questions. basis, would our terms First, to the quarter agreement are framework its and state be partners to with an related as dollar franchise which relative small illustrate transit advertising as of in guarantee the contract transit financial transit growing metrics certain struck.Another a that to let's open and for partnerships agency in change. better a the no process as to minimum the and long-term capital Matt if benefit lower for RFP commitment the with due trends I transit small we calling mentioned the us Washington, terms revenue contract continues that, parties The the amendment.While believe down was to and which share taken selected flexibility of prior financial contract back net is strategy of that our WMATA revenue risk lines D.C., transit example our signed was both XXXX an exiting of current as appropriate properly future through enables include cannot for operator, the additional open with or to like long-term what to to expenses, has improved during highlight of rebound.And such provides reflect structure advertising contract transit them a now new this by to both of they adapt floating of improving these the on well relatively capitalizing transit our type on contract This opportunities allows gross they franchise were minimize unprofitable expense business these franchise non-renewal new

Operator

Our Instructions] question the of Cameron of first McVeigh Stanley. is [Operator today line from Morgan

Cameron McVeigh

had a couple. Just

see your Firstly or is this national clients, view as idiosyncratic Is divergence the local you more to between broad-based? this what in growth? certain and driving do

Jeremy Male

much very for question, Thanks the Cameron.

on meaningful difficult our not. significant on just either the sector at quite slower part you We to the I strikes, National cetera, obviously more last see a one lower quarter, have to think with national look end or far that than back or of tends had rider back remember year, can in X a business that for time, was advertisers one can et the when and there of example, we if beta say lumpy -- always access much business. business. be our TV our being it's fair particular impacts over based local adjustments.You has had

that last I Our broadly -- to local and and strong over much much think spread that has a months. point across local the view, teams, fair say been it's really more smaller actually beta. the calling let's business which And number from really, out larger is lower advertisers of say, it's that actually has of of our XX performance worth

Cameron McVeigh

transit And still Are about going Great. And do and secondly Do the revenue growth as see as going forward? see largest feeling how impactful? growth tech for forward? still you you driver what M&E recovery? levels ridership that

Jeremy Male

years. that of continue our own that big take you know an passenger subway Yes, as we're York I numbers spent I the in coming us drivers open X North day, see New the some that. don't think we're point for you getting increasingly or accomplished subway pipes we've automated and we're time will we at at end way.So of they to the But in in is in there's actually from the our are increase up to think now a connecting just advertising boards many but increases we'll Look, comparison see that we move back DDA. where of automated some couple And the over now feed we or we platform with going extent away to or those how over I still things. X almost live the so also and Island we the those in and believe think the administrations much which it's been last fabulous of our have able can I to months, video digitization has eyeballs, feeds, is one take there forward. but some are are away panels to selling at programmatic other, getting seeing the XXXX.I we Metro that are on are lately, Railroad or have what Long displays the

go So driver be we automation we as plus for growth a think that significant us will digitization forward.

Operator

question of Oppenheimer. the Ian is today line from Next Zaffino of

Ian Zaffino

now or advertising the then an the maybe Is impediment? on side. the is of that kind subway. stigma or I of that with done be being kind how have kind kind of from of your that advertisers square will transit know on returning also now there you've a question like around A still about that do you growth stigma? And expressed in past concerns the

Jeremy Male

might regards on sell not probably subway. Yes, I or strong word, a there maybe a think the here negative be subway that.And think way don't particularly not stigma's but I York of through when some occasions with publicity, our are probably New to can that but forget, balance, whatever in it's we about helpful, all

product. advertising, have ground bus we We of have lot a above

have national that those effectively. We have great and use shelters we making advertisers fabulous environments very, are very some of

it.I with the the the at way business think is increasing on a I our maybe point that focus little can we're unhelpful, we margin generally transit just So through think advertisers. but sell just other

the I onwards now. from continuing here. good into very it's -- think right looks some quarter second some we've nice marketing very growth out I'd say got smart to there that there's back We're see which very and

Ian Zaffino

Is it, And should And in or but a Presidential know anything because about of not of bunch throughout like election, Because that how advertising kind just political recipient what like, category. if have should impact other that might forward? I know you we maybe of I'm year elections? I maybe be the election does like thinking change the big this think massive forward how should this versus you're like seeing? wondering what there referendums, OUTFRONT's going there's Presidential we then expect about you year say we the standard Okay. year as a mentioned going

Jeremy Male

answer a numbers just maybe really. that of with couple Yes,

we million region Back assume is think political, obviously terms somewhere in did second the just in in $XX XX%, 'XX, could we that million will in tailwind. third map like of percentage increase to QX, split particular in of of up second bucks, couple that in one a of of those a $XX which political, XXXX to a sort don't was it the But million. sort and $XX we going -- and million category, in nice quarter political out. be be it's government have you around bit something and quarters, that.So over so We if that out

Operator

of next line Karnovsky of question David The today the JPMorgan. from is

David Karnovsky

Maybe a going transit back to for second.

York well, in you on June see given see expand start New could strength like mentioned congestion view counter Wanted wanted tech? factors is Francisco. to less in highways? if of on you had related what ridership. early that vehicle if And pricing some then could that. on that on City potentially mean How to Just there as any to public much separately, for traffic San consider to XX, you could Are

Jeremy Male

I about people it's map think I charge, congestion to still yes, trying the going out So are to mean. just mean, thinking what exactly

I cities tended while think look down that increase say ridership it congestion in have a coming we humble up. a certainly you is come the interesting there that is my it when about, and impact find going you -- just congestion is to introduced in seems back it on to to goes some general that just public transit.What's be then it's charge mean, tax. may likely other traffic, on what charge, some can starts that at opinion, I have

neutral Look, San which feel up -- your to is talking pedestrianized we second in anyway.So highly to was are I that beneficial it I look, and so think I marginally on So think, look my that at to view the when have you potentially frankly likely we say question. slightly that much won't that's that, think to going that we're transit beneficial. I be tech Francisco about, yes, impact areas also guess feel suspect I particularly mildly

our there out was local San Francisco maybe San was who quite great more there I to And of stories actually like. of in dollars that did right our some we the that Francisco now. sales force we still from as it aren't coming a of fill think achieved bit far we would into job a growth is positive national look as forward,

Operator

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

Patrick Sholl

opportunity Jim. automated function or an of a of was earlier. on percentage that through using channel, create the putting X? if and on their advertising advertisers in for in advertisers spend talked This just I a I greater is advertisers Pat the you number success just for about that or was a question the the had that increase that wondering that and just of just more increase guys of combination on of awareness

Jeremy Male

pieces channels, is automated One nicely undoubtedly come Do there's advertisers X driven that's way know reached So by to have you who us dedicated might platform. normal to we mean, but also there's our normal our through there's year-over-year. what is would force. through up and that programmatic have that some I And advertisers sales no them.

own So billboards piece.The pieces piece there's that going platform the automated One, they're where on boards, the of that's in and essentially baskets out our selling is and of really we're answer rather location-specific selling on X second eyeballs. case there. than

that to channel to us rest essentially final think terms our used our of the would have how It's the utilization. boards in basis. believe.I DDA those terms very of we believed media efficient across not make not CPM would enthusiasm the very revenues are point way of people allocate for in it's Now buy board for can only we is on a generating have that eyeballs on keen trades certainly advertisers -- and

we buys to that go are there. through prefer there actually would So some

they're in total ad additive but terms dollars, are dollars. So efficient very they not of necessarily

Operator

turn call for would Jeremy questions remarks. queue, And in to the closing no further over Male I back any with to like the

Jeremy Male

forward Thank today. over Thanks, events and for questions at in seeing various again. Harry. we the Thanks tuning look And you weeks. to you your coming thanks, investor everyone, for

Operator

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

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Outfront Media (OUT) 2 May 242024 Q1 Earnings call transcript