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Clear Channel Outdoor Holdings, Inc. Reports Results for 2016 First Quarter

SAN ANTONIO, May 04, 2016 (BUSINESS WIRE) -- Clear Channel Outdoor Holdings, Inc. CCO, +1.96% 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%.
  • OIBDAN [1] 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, OIBDAN [1] 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.
Revenues, Operating Expenses and OIBDAN by Segment [1]
(In thousands) Three Months Ended

March 31,

%

Change

2016 2015
Revenue [1]
Americas $ 282,528 $ 295,863 (4.5%)
International 308,193 319,180 (3.4%)
Consolidated revenue $ 590,721 $ 615,043 (4.0%)
Operating expenses [1,2]
Americas $ 193,341 $ 201,871 (4.2%)
International 277,154 288,230 (3.8%)
Consolidated operating expenses $ 470,495 $ 490,101 (4.0%)
OIBDAN [1]
Americas $ 89,187 $ 93,992 (5.1%)
International 31,039 30,950 0.3%
Corporate [1] (25,819) (26,828) (3.8%)
Consolidated OIBDAN $ 94,407 $ 98,114 (3.8%)
Revenues, Operating Expenses and OIBDAN by Segment Excluding Movements in Foreign Exchange [1,2]
(In thousands) Three Months Ended

March 31,

%

Change

2016 2015
Revenue [1]
Americas $ 287,543 $ 295,863 (2.8%)
International 318,297 319,180 (0.3%)
Consolidated revenue $ 605,840 $ 615,043 (1.5%)
Operating expenses [1,2]
Americas $ 197,315 $ 201,871 (2.3%)
International 287,467 288,230 (0.3%)
Consolidated operating expenses $ 484,782 $ 490,101 (1.1%)
OIBDAN [1]
Americas $ 90,228 $ 93,992 (4.0%)
International 30,830 30,950 (0.4%)
Corporate [1] (26,246) (26,828)
Consolidated OIBDAN $ 94,812 $ 98,114 (3.4%)

Certain prior period amounts have been reclassified to conform to the 2016 presentation of financials throughout the press release.

[1] See the end of this press release for reconciliations of (i) OIBDAN for each segment to consolidated operating income (loss); (ii) revenues excluding effects of foreign exchange to revenues; (iii) direct operating and SG&A expenses excluding effects of foreign exchange to expenses; (iv) OIBDAN excluding effects of foreign exchange to OIBDAN; (v) corporate expenses excluding non-cash compensation expenses to corporate expenses; (vi) Consolidated and Americas outdoor revenues, operating expenses and OIBDAN excluding the effects of foreign exchange and outdoor markets sold to Consolidated and Americas outdoor revenues, operating expenses and OIBDAN; and (vii) OIBDAN to net income (loss). See also the definition of OIBDAN under the Supplemental Disclosure section in this release.

[2] The Company’s operating expenses include direct operating expenses and SG&A expenses.

First Quarter 2016 Results

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%.

After adjusting for movements in foreign exchange rates and the impact of the sale of outdoor markets, the Company’s OIBDAN [1] was up 4.8% in the first quarter 2016 compared to the same period of 2015. Included in the 2016 first quarter OIBDAN [1] were $2 million of operating expenses and $0.3 million of corporate expenses associated with the Company’s strategic revenue and efficiency initiatives, $1 million lower than such expenses in the prior year. On a reported basis, OIBDAN [1] was down 3.8% to $94 million for the first quarter compared to the same period in 2015.

The Company’s consolidated net income totaled $141 million in the first quarter of 2016 compared to consolidated net loss of $33 million in the same period of 2015. The increase was primarily due to the $282 million gain recognized on the sale of nine non-strategic markets at the beginning of the year.

Americas

Americas outdoor 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. In the first quarter of 2016, we sold nine non-strategic markets for net proceeds of $596.6 million in cash and certain assets in Florida. These non-strategic markets generated revenues of $2.5 million in the first quarter of 2016 compared to $22.3 million in the first quarter of 2015. The revenue increase was driven by higher revenues from digital billboards as a result of new deployments, organic growth and higher occupancy, as well as higher revenues from static bulletins as a result of higher occupancy. On a reported basis, revenues decreased $13 million, or 4.5%.

Operating expenses increased $8 million, or 4.1%, during the first quarter 2016 as compared to the first quarter 2015 after adjusting for a $4 million impact from movements in foreign exchange rates and a $12 million impact from the sale of non-strategic markets, primarily due to higher variable compensation and higher variable site lease expenses related to the increase in revenues from remaining markets. On a reported basis, operating expenses decreased $9 million, or 4.2%.

OIBDAN increased 4.5% during the first quarter 2016 as compared to the first quarter 2015 after adjusting for a $1 million impact from movements in foreign exchange rates and the $8 million impact from sale of non-strategic markets. On a reported basis, OIBDAN was down $5 million, or 5.1%.

International

International outdoor revenues decreased $1 million, or 0.3%, during the first quarter 2016 as compared to the first quarter 2015 after adjusting for a $10 million impact from movements in foreign exchange rates. Higher revenue in Australia due to new digital assets and China due to new contracts and higher occupancy, as well as in several European countries including France and Belgium, was offset by decreases in revenue driven primarily by lower revenue in the United Kingdom as a result of the London bus shelter contract not being renewed and decreases in Switzerland. On a reported basis, revenues decreased $11 million, or 3.4%.

Operating expenses...


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