Adrian J Cotterill, Editor-in-Chief
JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, announced this week its revenue for the nine months ended 30 September 2017.
Following the adoption of IFRS 11 from January 1, 2014, the operating data presented below is adjusted to include our prorata share in companies under joint control.
Adjusted revenue for the third quarter of 2017 increased by +2.4% to €812.0 million compared to €792.7 million in Q3 2016.
Excluding the negative impact from foreign exchange variations and the positive impacts from changes in perimeter, adjusted organic revenue grew by +4.9%.
Adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +4.9% in the third quarter of 2017.
|
Q3 adjusted revenue |
2017 (€m) |
2016 (€m) |
Reported growth |
Organic growth(a) |
|
Street Furniture |
360.1 |
341.2 |
+5.5% |
+7.7% |
|
Transport |
335.0 |
331.7 |
+1.0% |
+5.5% |
|
Billboard |
116.9 |
119.8 |
-2.4% |
-4.5% |
|
Total |
812.0 |
792.7 |
+2.4% |
+4.9% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
|
9-month adjusted revenue |
2017 (€m) |
2016 (€m) |
Reported growth |
Organic growth(a) |
|
Street Furniture |
1,106.6 |
1,067.1 |
+3.7% |
+4.1% |
|
Transport |
986.2 |
986.4 |
-0.0% |
+1.7% |
|
Billboard |
360.6 |
356.5 |
+1.2% |
-4.4% |
|
Total |
2,453.4 |
2,410.0 |
+1.8% |
+1.9% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
STREET FURNITURE
Third quarter adjusted revenue increased by +5.5% to €360.1 million (+7.7% on an organic basis). Europe (including France and the UK) delivered good growth. Asia-Pacific was up. The Rest of the World and North America were up double-digit.
Third quarter adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture were up +8.4% compared to the third quarter of 2016.
TRANSPORT
Third quarter adjusted revenue increased by +1.0% to €335.0 million (+5.5% on an organic basis). Europe (including France and the UK) and Asia-Pacific delivered good growth. North America delivered double-digit growth. The Rest of the World showed negative growth, partly due to strong comparable (mainly the Olympics Games in Rio de Janeiro in 2016).
BILLBOARD
Third quarter adjusted revenue decreased by -2.4% to €116.9 million (-4.5% on an organic basis). Europe (including France and the UK) was down. The Rest of the World was up, benefitting from a solid performance in Latin America. In North America, our iconic digital freeway billboard network in Chicago delivered a strong double-digit growth.
Commenting on the 2017 third quarter revenue, Jean-François Decaux said “Our better than expected Q3 organic revenue growth rate of +4.9% reflects both the strong performance of our digital Street Furniture assets which are only available in a small number of cities for the time being as well the recovery of our Transport division driven by the ongoing improvement of our Chinese business. Our Billboard division remains difficult despite a good performance of our premium large-format screens in London, Chicago and Moscow.
France, which remained challenging during the quarter, started to show positive signs of recovery in September while trading conditions in the UK were impacted by the slowdown in the economy. The Rest of Europe and North America remained strong while, as expected, China returned to growth in Q3 with an improving airport advertising business.
As far as Q4 2017 is concerned, our good advertising sales momentum continues and we currently expect our adjusted organic revenue growth rate to be around +4.5% leading to a full year organic revenue growth rate around +2.5%.
In a media landscape increasingly fragmented, out-of-home advertising reinforces its attractiveness. With our accelerating exposure to faster-growth markets, our growing premium digital portfolio combined with a new data-led audience targeting platform, our ability to win new contracts and the high quality of our teams across the world, we believe we are well positioned to outperform the advertising market and increase our leadership position in the outdoor advertising industry through profitable market share gains. The strength of our balance sheet is a key competitive advantage that will allow us to pursue further external growth opportunities as they arise.”
ADJUSTED DATA
Under IFRS 11, applicable from January 1, 2014, companies under joint control are accounted for using the equity method.
However, in order to reflect the business reality of the Group, operating data of the companies under joint control continue to be proportionately integrated in the operating management reports used to monitor the activity, allocate resources and measure performance.
Consequently, pursuant to IFRS 8, Segment Reporting presented in the financial statements complies with the Group’s internal information, and the Group’s external financial communication therefore relies on this operating financial information. Financial information and comments are therefore based on “adjusted” data which are reconciled with IFRS financial statements.
In Q3 2017, the impact of IFRS 11 on adjusted revenue was -€99.9 million (-€94.5 million in Q3 2016), leaving IFRS revenue at €712.1 million (€698.2 million in Q3 2016).
For the first nine months of 2017, the impact of IFRS 11 on adjusted revenue was -€300.5 million (-€297.1
ORGANIC GROWTH DEFINITION
The Group’s organic growth corresponds to the adjusted revenue growth excluding foreign exchange impact and perimeter effect. The reference fiscal year remains unchanged regarding the reported figures, and the organic growth is calculated by converting the revenue of the current fiscal year at the average exchange rates of the previous year and taking into account the perimeter variations prorata temporis, but including revenue variations from the gains of new contracts and the losses of contracts previously held in our portfolio.
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