Russ Curry, Ministry of New Media
JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, announced this week its revenue for the full-year 2018.
Jean-Charles Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said “2018 was another record year for JCDecaux with revenue at €3,618.5 million. Our full-year organic revenue growth rate of +5.2% was driven by a better than expected Q4 which grew +5.4% on an organic basis. This strong performance reflects both, our exposure to faster-growth markets which represent 37% of our Group revenue, as well as the growing contribution of our prime DOOH media assets delivering a revenue increase of +28.4% and representing 20.4% of Group revenue with 5 countries (UK, US, China, Australia and Germany) delivering 68% of our DOOH revenue worldwide.
Street Furniture’s organic revenue growth of +2.7% was mainly driven by a very strong digital revenue increase at +30.4% with digital revenue representing 18.1% of total Street Furniture revenue while analogue revenue continued to be negatively affected by the unexpected cancellation of the Paris “City Information Panels” interim contract in France”.
The 2017 comparative figures are restated from the retrospective application of IFRS 15 “Revenue from Contracts with Customers”, applicable from January 1st, 2018. The application of IFRS 15 leads to the change in presentation of invoices relating to advertising taxes. The impact on previously published Q4 2017 and the full-year 2017 figures are +5.6 million and +€20.7 million on adjusted revenue, respectively. 2018 adjusted revenue increased by +3.6% to €3,618.5 million compared to €3,492.6 million in 2017. Excluding the negative impact from foreign exchange variations and the positive impact from changes in perimeter, adjusted organic revenue grew by +5.2%.
Adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +5.0% in 2018. Adjusted revenue of the fourth quarter of 2018 increased by +8.1% to €1,107.5 million compared to €1,024.1 million in Q4 2017. Reported growth’s acceleration was driven by a two-month contribution from APN Outdoor. Excluding the negative impact from foreign exchange variations and the positive impact from changes in perimeter, adjusted organic revenue increased by +5.4%. Adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +4.6% in the fourth quarter of 2018.
By activity:
| Full-Year adjusted revenue | 2018 (€m) | 2017 (€m) | Reported growth | Organic growth (a) |
|---|---|---|---|---|
| Street Furniture | 1,587.6 | 1,586.7 | +0.1% | +2.7% |
| Transport | 1,517.0 | 1,399.2 | +8.4% | +10.2% |
| Billboard | 513.9 | 506.7 | +1.4% | -0.9% |
| Total | 3,618.5 | 3,492.6 | +3.6% | +5.2% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
| Q4 adjusted revenue | 2018 (€m) | 2017 (€m) | Reported growth | Organic growth (a) |
|---|---|---|---|---|
| Street Furniture | 479.9 | 472.6 | +1.5% | +2.6% |
| Transport | 472.7 | 412.2 | +14.7% | +10.8% |
| Billboard | 154.9 | 139.3 | +11.2% | -1.2% |
| Total | 1,107.5 | 1,024.1 | +8.1% | +5.4% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
By geographic area:
| Full-Year adjusted revenue | 2018 (€m) | 2017 (€m) | Reported growth | Organic growth (a) |
|---|---|---|---|---|
| Europe (b) | 960.7 | 942.8 | +1.9% | +3.1% |
| Asia-Pacific | 957.3 | 818.7 | +16.9% | +16.4% |
| France | 602.6 | 622.2 | -3.2% | -3.2% |
| Rest of the World | 438.0 | 450.0 | -2.7% | +4.2% |
| United Kingdom | 369.0 | 362.4 | +1.8% | +2.7% |
| North America | 290.9 | 296.5 | -1.9% | +2.5% |
| Total | 3,618.5 | 3,492.6 | +3.6% | +5.2% |
(a) Excluding acquisitions/divestitures and the impact of foreign exchange
(b) Excluding France and the United Kingdom
Please note that the geographic comments hereafter refer to organic revenue growth.
STREET FURNITURE
Full-year adjusted revenue increased by +0.1% to €1,587.6 million (+2.7% on an organic basis). Europe (including France and the UK) was down, negatively affected by the cancellation of the Paris “City Information Panels” interim contract in France. Asia-Pacific was up strongly with a double-digit growth, mainly driven by our new contracts in Australia. The Rest of the World and North America delivered a strong performance.
In the fourth quarter, adjusted revenue increased by +1.5% to €479.9 million (+2.6% on an organic basis). Europe (including France and the UK) was down, negatively affected by the cancellation of the Paris “City Information Panels” interim contract in France. Asia-Pacific was up strongly with a double-digit growth, mainly driven by our new contracts in Australia. The Rest of the World showed double-digit growth fuelled by Latin America and North America was up.
Fourth quarter adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture were up +1.5% compared to the fourth quarter of 2017.
TRANSPORT
Full-year adjusted revenue increased by +8.4% to €1,517.0 million (+10.2% on an organic basis). Asia-Pacific was up double-digit. Europe (including France and the UK) posted strong growth. The Rest of the World was up and North America was down.
In the fourth quarter, adjusted revenue increased by +14.7% to €472.7 million (+10.8% on an organic basis). Asia-Pacific and Europe (including France and the UK) posted double-digit growth. North America was down and the Rest of the World was up.
BILLBOARD
Full-year adjusted revenue increased by +1.4% to €513.9 million (-0.9% on an organic basis). Reported growth was fuelled by the contribution of APN Outdoor since October 31st, 2018. Europe was down, affected by our multi-year plan to reduce our traditional UK billboard portfolio, while our UK digital billboard business remained strong and our performance in France was good. The Rest of the World was virtually flat and North America was down.
In the fourth quarter, adjusted revenue increased by +11.2% to €154.9 million (-1.2% on an organic basis). Europe was virtually flat, affected by our multi-year plan to reduce our traditional UK billboard portfolio, while our UK digital billboard business remained strong and our performance in France was good. The Rest of the World was down and North America posted double-digit growth.
Jean-Charles Decaux added “Transport’s organic revenue growth of +10.2% continues to benefit from both, the strong double-digit growth in China, despite a softer metro advertising business in Q4 which we flagged in our guidance, and the strong digital revenue increase at +26.1% with digital revenue representing 25.8% of total Transport revenue. Our Transport segment, which derives 70% of its total revenue outside of Europe, is now nearly as large as our Street Furniture business. Billboard’s slight organic revenue decline of -0.9% was mainly due to our multi-year plan to reduce our traditional UK billboard portfolio offset by a strong Group digital billboard revenue increase at +34.6% representing 11.6% of total Billboard revenue while France delivered a good performance.
2018 was also marked by several strategic contracts wins such as the renewal and extension of numerous European cities such as Berlin or The Hague. We also won Singapore Street Furniture on Orchard Road and Yangon Street Furniture in Myanmar. In Transport, we renewed and extended significant contracts such as Hong Kong MTR, Network Rail in the UK as well as Dubai airport. In China, we strengthened our footprint with the renewal of Beijing Capital airport and the extension to Beijing Daxing airport. While the OOH industry worldwide consolidation continues, we completed, on October 31st, 2018, the acquisition of one of the Top 10 OOH companies, APN Outdoor operating in Australia (world’s 7th largest media market) and in New-Zealand. Both markets enjoy good growth potential given the low penetration of OOH. As usual, we will provide guidance for Q1 when we release our full-year 2018 results on March 7th, 2019. 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 and to continue to invest significantly in digital.”
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