Clear Channel Outdoor reports declining domestic sales, but growth in international markets
Sales in the Americas fell 5 percent, but revenue overall grew 2 percent in Q2 report
SAN ANTONIO, Texas – July 23, 2014 — Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) today reported financial results for the second quarter ended June 30, 2014.
“We are continuing to make progress across our Outdoor businesses, engaging global consumers more deeply than ever with the industry’s most advanced solutions and initiatives,” said Bob Pittman, Executive Chairman of Clear Channel Outdoor Holdings, Inc. “At last month’s Cannes Lions International Festival of Creativity, William Eccleshare and our Clear Channel Outdoor team represented their groundbreaking vision and innovation to the leadership of the world’s biggest global brands and agencies in advertising, creative and media. We were especially proud to see our recent innovative work with partners earn well-deserved international industry recognition, including Clear Channel UK’s collaborative work with British Airways to create its digital out-of-home campaign, which earned nine awards.”
“Our International business delivered standout growth of 7% in revenues and 5% in OIBDAN during the quarter, with continued momentum in Western Europe, as well as China and Brazil,” said Chief Executive Officer William Eccleshare. “The growth of our local advertising business in the Americas was strong, and we are refocusing national sales operations to fully capitalize on growing demand for out-of-home advertising in the US.”
“At the recent Cannes Lions Advertising Festival, we had an unprecedented display of our digital and mobile capabilities, showcasing work by leading global brands and agencies with high-profile displays, including the world’s biggest-ever rooftop HD digital screen,” Eccleshare added. “We are also delighted to have entered into a pioneering multi-year partnership with China’s BlueFocus Communications Group to promote prominent Chinese brands to American consumers in Times Square and major American airports. This is a great example of how we’re able to bring together brands and advertisers with world class inventory.”
Second Quarter 2014 Results
Consolidated revenues increased $14 million, or 2%, to $781 million in the second quarter of 2014 compared to $767 million in the same period of 2013. Excluding the effects of movements in foreign exchange rates, revenues increased $4 million or less than 1%.
- Americas revenue decreased $16 million, or 5%, (or $15 million excluding foreign exchange impacts) driven mainly by lower national account revenues, the nonrenewal of certain airport contracts and lower revenues in our Los Angeles market as a result of our digital boards that became inactive in April 2013.
- International revenue increased $30 million, or 7%, (or $19 million excluding foreign exchange impacts) primarily driven by revenue growth in western Europe including Italy, due to a new airport contract in Rome, as well as other countries such as Sweden, France and the UK. Revenue in emerging markets also increased, including in Brazil where revenue growth was driven by digital advertising and the FIFA World Cup, and in China as a result of new contracts.
The Company’s OIBDAN1 was down 3%, or $6 million, to $197 million for the three months ended June 30, 2014, compared to $203 million for the same period of 2013. Included in the 2014 second quarter OIBDAN of $197 million were $3 million and $6 million of operating and corporate expenses, respectively, associated with the Company’s strategic revenue and efficiency initiatives to attract additional advertising dollars to its businesses and improve operating efficiencies. OIBDAN for the three months ended June 30, 2013 included $10 million of such operating expenses.
The Company’s consolidated EBITDA, as defined under the CCWH Senior Notes indenture, was $763 million for the preceding twelve months ended June 30, 2014, down 4% compared to the same period of 2013.
The consolidated net income attributable to the Company was $51 million in the second quarter of 2014 compared to consolidated net income attributable to the Company of $9 million in the same period of 2013.
The Company’s recent key highlights include:
- Installed nearly 400 new digital displays in international markets for an end of quarter total of more than 4,100 displays and 27 new digital billboards in the U.S. for an end of quarter total of 1,107 across 39 markets.
- Partnered with Monster Media, an interactive technology pioneer and designer of award-winning digital out-of-home advertising solutions, to launch a nationwide network of interactive charging stations in major U.S. airports that will service smartphones, tablet computers and laptops. Starting with Hartsfield-Jackson Atlanta International Airport, Chicago O’Hare International Airport and Dallas/Fort Worth International Airport, the interactive charging station network will help advertisers to reach the busy traveler demographic in a new and exciting way with touch-enabled LCD screens embedded in the stations.
- Expanded Outdoor Connect to 29 markets in North America, building on the successful global launch of Connect in the first quarter. Connect enables national and regional advertisers to reach mobile consumers at scale by turning pedestrian accessible inventory into interactive environments where a consumer can use a smartphone to engage in various brand experiences from couponing to social media interaction and games.
- Won a 10-year contract to provide a comprehensive advertising program for Billy Bishop Toronto City Airport’s passenger terminal. With Toronto Pearson, Vancouver International and Canadian Regional Airports already in its portfolio, Clear Channel is in the unique position to help brands reach nearly two-thirds of passengers travelling annually through Canadian airports.
- Announced a groundbreaking, multi-year deal with BlueFocus Communications Group to promote prominent Chinese brands to American consumers via digital out-of-home media in Times Square and in major U.S. airports, starting with San Francisco International Airport.
- Showcased the powerful combination of Out-Of-Home and Mobile advertising at Cannes Lions International Festival of Creativity, using the world’s largest rooftop digital screen and interactive digital totems. British Airways’ digital out of home campaign “The Magic of Flying” – on which Clear Channel UK was a key collaborator – earned nine awards, including the Direct Lions Grand Prix and a Gold Lions in the Outdoor category. Another winning campaign – to which International contributed – was Apotek Hjartat’s “Blowing in the Wind,” which used motion sensor technology to detect incoming metro trains in the Stockholm subway and trigger an on-screen creative showing a model’s rippling hair. Clear Channel Outdoor also displayed the 2014 Outdoor Lions winners and a giant mobile interactive soccer game.
- Simulcasted the 2014 Tony Awards® in Times Square in partnership with the Times Square Alliance and the City of New York for the sixth straight year, with Clear Channel Spectacolor as an official media partner of the awards.
- Appointed Andrew Morley, former Head of Motorola at Google in the UK and Ireland, as new CEO of Clear Channel’s UK business. He replaces Matthew Dearden, who has been promoted to President of Clear Channel Europe.