May 4, 2016 Last Updated 8:12 am

Clear Channel Outdoor revenue falls 4%, turns profit after selling off markets

In the first quarter of 2016, Americas outdoor sold nine non-strategic outdoor markets for $596.6 million, recognizing a net gain of $282 million

SAN ANTONIO, Texas – May 4, 2016 — Clear Channel Outdoor Holdings, Inc. today reported financial results for the first quarter ended March 31, 2016.

“We’re pleased with our progress at both our Americas and International outdoor operations, as we continued to win major contracts and roll out a full range of new technologies to better serve advertisers and consumers,” said Bob Pittman, Executive Chairman and Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. “Americas outdoor’s streamlined organization is redoubling its focus on customers while bringing powerful innovations to market, including our data analytics solution that uses aggregated, anonymous, statistical insights from third-party data providers to enable marketers to better target their campaigns and programmatic initiatives aimed at making it easier for agencies and advertisers to buy inventory. At International, our business plan is starting to drive results, as we are successfully bidding for the right opportunities at the right price.

“Americas outdoor delivered top- and bottom-line growth in the quarter after adjusting for non-strategic asset sales, with International essentially flat, excluding the impact from foreign exchange rates,” said Rich Bressler, Chief Financial Officer of Clear Channel Outdoor Holdings, Inc. “Americas outdoor continued to optimize our footprint during the quarter, enabling us to better focus our operations and free up resources for more investments in innovation, and at International outdoor we won a number of key contracts in the quarter while continuing to build out our digital business.”

Key Financial Highlights

The Company’s key financial highlights for the first quarter 2016 include:

  • Consolidated revenues increased 1.8% after adjusting for a $15 million impact from movements in foreign exchange rates and the $20 million impact of the non-strategic outdoor markets we sold in the first quarter of 2016. On a reported basis, consolidated revenue decreased 4.0%.
  • Americas revenues increased $12 million, or 4.2%, after adjusting for a $5 million impact from movements in foreign exchange rates and a $20 million impact from the sale of non-strategic markets. The increase was driven by higher revenues from digital and static billboards. On a reported basis, revenues decreased 4.5%.
  • International revenues decreased $1 million, or 0.3%, after adjusting for a $10 million impact from movements in foreign exchange rates. Revenue growth in certain countries including Australia, China and France was offset by decreases in other countries including the United Kingdom and Switzerland. On a reported basis, revenues decreased $11 million, or 3.4%.
  • OIBDAN1 increased 4.8% excluding the impact from movements in foreign exchange rates and the impact of the non-strategic outdoor markets we sold in the first quarter of 2016. On a reported basis, OIBDAN1 decreased 3.8%.

Key Non-Financial Highlights

The Company’s recent key non-financial highlights include:

  • Introduced RADAR – America’s new data analytics solution to plan and buy out-of-home (OOH) media and use aggregated, anonymous, statistical insights from third-party data providers to enable marketers for the first time to use the same sophisticated audience segmentation, targeting and insights for OOH advertising already available to their digital campaigns.
  • Secured an eight-year contract to provide new, state-of-the-art display advertising with interactive technology both indoors and outdoors at Washington Dulles International and Ronald Reagan Washington National airports to reach a combined 41 million travelers annually, expanding America’s leadership in digital OOH media in the Washington, D.C. metropolitan area.
  • Expanding the digital street furniture network and launching Adsmart in Australia and New Zealand through Adshel – International’s joint Australia/New Zealand venture with APN – that will add 365 digital screens for a total of 825 in the two countries and provide an ad-serving platform to enable advertisers to enhance their campaigns based on time of day, place, audience, context and business.
  • Awarded a seven-year advertising contract for Asda stores in the UK, including a complete re-build of Asda outdoor billboard and poster sites, as well as digital screens powered by International UK’s intelligent content management system – Play iQ – at up to 300 superstores.
  • Awarded 12-year contract to manage Madrid’s street furniture – one of the largest in Europe – that features environmental sustainability, universal accessibility and the most innovative communication and public engagement channel available anywhere across 1,610 advertising panels, including 300 digital with 350 WiFi spots, to better serve consumers and advertisers. This award is subject to an appeal under the applicable administrative legal procedures in Spain.
  • Installed 980 digital displays across our markets increasing the digital billboards to 1,056 in 28 markets in North America and to more than 7,645 across 19 international markets.
  • Hired Wade Rifkin to the newly created position of Senior Vice President of Programmatic to develop Americas outdoor’s programmatic strategy and work closely with its technology, marketing and sales operations teams to make it easier for agencies and advertisers to buy inventory.

Liquidity and Financial Position

For the three months ended March 31, 2016, cash flow provided by operating activities was $16 million, cash flow provided by investing activities was $524 million, cash flow used by financing activities was $466 million, and there was $4 million impact from movements in foreign exchange rates on cash. The net increase in cash was $77 million.

Capital expenditures for the three months ended March 31, 2016 were approximately $47 million compared to $42 million for the same period in 2015.

In the first quarter of 2016, Americas outdoor sold nine non-strategic outdoor markets including Cleveland and Columbus, Ohio, Des Moines, Iowa, Ft. Smith, Arkansas, Memphis, Tennessee, Portland, Oregon, Reno, Nevada, Seattle, Washington and Wichita, Kansas for net proceeds, including cash and certain advertising assets in Florida, of $596.6 million. The Company recognized a net gain of $282 million. These markets generated revenue of $2.5 million in the three months ended March 31, 2016, and $22.3 million in the three months ended March 31, 2015.

CCHO-Q1-16

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