April 23, 2024
Q1 2018 trading update
- First quarter 2018 adjusted revenue down -2.6% to €742.5m
- First quarter 2018 adjusted organic revenue up +2.8%
- Adjusted organic revenue growth in Q2 2018 expected to be around +3.5%
- Paris
JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, announced today its revenue for the three months ended March 31st, 2018.
Following the adoption of IFRS 11 from January1st, 2014, the operating data presented below is adjusted to include our prorata share in companies under joint control. Please refer to the paragraph “Adjusted data” on page 2 of this release for the definition of adjusted data and reconciliation with IFRS.
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 Q1 2017 figures is +€5.0 million on adjusted revenue.
Adjusted revenue for the first quarter decreased by -2.6% to €742.5 million compared to €762.6 million in Q1 2017.
Excluding the negative impact from foreign exchange variations and the positive impact from changes in perimeter, adjusted revenue increased by +2.8%.
Adjusted advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +2.7% on an organic basis in the first quarter of 2018.
a. Excluding acquisitions/divestitures and the impact of foreign exchange
Please note that the geographic comments below refer to organic revenue growth.
STREET FURNITURE
First quarter adjusted revenue decreased by -2.5% to €337.1 million (+2.1% on an organic basis). Europe (including France and the UK) was down, affected, as expected, 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, as well as North America thanks to digital in New York and Chicago. The Rest of the World was also up double-digit benefiting from a strong performance in Latin America.
First quarter adjusted advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture was up +2.8% on an organic basis compared to the first quarter of 2017.
TRANSPORT
First quarter adjusted revenue decreased by -2.9% to €293.5 million (+5.0% on an organic basis). Europe (including France and the UK) posted good growth. Asia-Pacific delivered strong double-digit growth. The Rest of the World was up thanks to our new contracts in Brazil partially offset by negative growth in the Middle East where the market environment remains difficult. North America was down due to high comparable in Q1 2017.
BILLBOARD
First quarter adjusted revenue decreased by -2.4% to €111.9 million (-0.6% on an organic basis). Europe (including France and the UK) was flat. The Rest of the World was slightly negative while North America was down more significantly due to high comparable in Q1 2017.
Commenting on the 2018 first quarter revenue, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:
“Our Q1 2018 revenue of €742.5m, down -2.6% on a reported basis due to a negative impact from foreign exchange was up +2.8% on an organic basis. Street Furniture’s organic growth of +2.1% was mainly driven by a double-digit digital revenue increase while analogue revenue was negatively impacted by the cancellation of the Paris “City Information Panels” interim contract. Transport’s good performance reflects our strong revenue growth in China as well as a good sales performance in Europe and the contribution from new contracts in Latin America. Our traditional Billboard business remains challenging while our digital Billboard business is growing double-digit, although it only represents less than 10% of our Billboard revenue.
As far as Q2 2018 is concerned, and bearing in mind that it is becoming more and more difficult to assess forward advertising revenue because of late bookings which are now possible with digital out-of-home, we currently expect an organic growth around +3.5%.
In a media landscape increasingly fragmented, out-of-home advertising reinforces its attractiveness. With our strong exposure to faster-growth markets, our growing premium digital portfoliocombined 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 continue to outperform the global 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 1st January, 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 will 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, consistent with historical data prior to 2014, which is reconciled with IFRS financial statements.
In Q1 2018, the impact of IFRS 11 on adjusted revenue was -€84.5 million (-€87.4 million in Q1 2017) leaving IFRS revenue at €658.0 million (€675.2 million in Q1 2017).
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.
Next information:
Annual General Meeting of Shareholders: May 17th, 2018
H1 2018 results: July 26th, 2018 (before market)
Forward looking statements
This news release may contain some forward-looking statements. These statements are not undertakings as to the future performance of the Company. Although the Company considers that such statements are based on reasonable expectations and assumptions on the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual performance to differ from those indicated or implied in such statements.
These risks and uncertainties include without limitation the risk factors that are described in the annual report registered in France with the French Autorité des Marchés Financiers.
Investors and holders of shares of the Company may obtain copy of such annual report by contacting the Autorité des Marchés Financiers on its website www.amf-france.org or directly on the Company website www.jcdecaux.com.
The Company does not have the obligation and undertakes no obligation to update or revise any of the forward-looking statements.
Following the adoption of IFRS 11 from January1st, 2014, the operating data presented below is adjusted to include our prorata share in companies under joint control. Please refer to the paragraph “Adjusted data” on page 2 of this release for the definition of adjusted data and reconciliation with IFRS.
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 Q1 2017 figures is +€5.0 million on adjusted revenue.
Adjusted revenue for the first quarter decreased by -2.6% to €742.5 million compared to €762.6 million in Q1 2017.
Excluding the negative impact from foreign exchange variations and the positive impact from changes in perimeter, adjusted revenue increased by +2.8%.
Adjusted advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +2.7% on an organic basis in the first quarter of 2018.
| Q1 adjusted revenue | 2018 (€m) | 2017 (€m) | Reported growth | Organic growth(a) |
|---|---|---|---|---|
| Street Furniture | 337.1 | 345.6 | -2.5% | +2.1% |
| Transport | 293.5 | 302.3 | -2.9% | +5.0% |
| Billboard | 111.9 | 114.7 | -2.4% | -0.6% |
| Total | 742.5 | 762.6 | -2.6% | +2.8% |
Please note that the geographic comments below refer to organic revenue growth.
STREET FURNITURE
First quarter adjusted revenue decreased by -2.5% to €337.1 million (+2.1% on an organic basis). Europe (including France and the UK) was down, affected, as expected, 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, as well as North America thanks to digital in New York and Chicago. The Rest of the World was also up double-digit benefiting from a strong performance in Latin America.
First quarter adjusted advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture was up +2.8% on an organic basis compared to the first quarter of 2017.
TRANSPORT
First quarter adjusted revenue decreased by -2.9% to €293.5 million (+5.0% on an organic basis). Europe (including France and the UK) posted good growth. Asia-Pacific delivered strong double-digit growth. The Rest of the World was up thanks to our new contracts in Brazil partially offset by negative growth in the Middle East where the market environment remains difficult. North America was down due to high comparable in Q1 2017.
BILLBOARD
First quarter adjusted revenue decreased by -2.4% to €111.9 million (-0.6% on an organic basis). Europe (including France and the UK) was flat. The Rest of the World was slightly negative while North America was down more significantly due to high comparable in Q1 2017.
Commenting on the 2018 first quarter revenue, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:
“Our Q1 2018 revenue of €742.5m, down -2.6% on a reported basis due to a negative impact from foreign exchange was up +2.8% on an organic basis. Street Furniture’s organic growth of +2.1% was mainly driven by a double-digit digital revenue increase while analogue revenue was negatively impacted by the cancellation of the Paris “City Information Panels” interim contract. Transport’s good performance reflects our strong revenue growth in China as well as a good sales performance in Europe and the contribution from new contracts in Latin America. Our traditional Billboard business remains challenging while our digital Billboard business is growing double-digit, although it only represents less than 10% of our Billboard revenue.
As far as Q2 2018 is concerned, and bearing in mind that it is becoming more and more difficult to assess forward advertising revenue because of late bookings which are now possible with digital out-of-home, we currently expect an organic growth around +3.5%.
In a media landscape increasingly fragmented, out-of-home advertising reinforces its attractiveness. With our strong exposure to faster-growth markets, our growing premium digital portfoliocombined 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 continue to outperform the global 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 1st January, 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 will 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, consistent with historical data prior to 2014, which is reconciled with IFRS financial statements.
In Q1 2018, the impact of IFRS 11 on adjusted revenue was -€84.5 million (-€87.4 million in Q1 2017) leaving IFRS revenue at €658.0 million (€675.2 million in Q1 2017).
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.
| €m | Q1 | |
|---|---|---|
| 2017 adjusted revenue | (a) | 762.6 |
| 2018 IFRS revenue | (b) | 658.0 |
| IFRS 11 impacts | (c) | 84.5 |
| 2018 adjusted revenue | (d) = (b) + (c) | 742.5 |
| Currency impacts | (e) | 42.1 |
| 2018 adjusted revenue at 2017 exchange rates | (f) = (d) + (e) | 784.6 |
| Change in scope | (g) | (0.3) |
| 2018 adjusted organic revenue | (h) = (f) + (g) | 784.3 |
| Organic growth | (i) = (h) / (a) | +2.8% |
| €m | Impact of currency as of March 31st, 2018 |
|---|---|
| USD | 8.2 |
| HKD | 7.2 |
| RMB | 5.8 |
| BRL | 3.4 |
| GBP | 2.2 |
| Other | 15.3 |
| Total | 42.1 |
| Average exchange rate | Q1 2018 | Q1 2017 |
|---|---|---|
| USD | 0.8135 | 0.9391 |
| HKD | 0.1039 | 0.1210 |
| RMB | 0.1280 | 0.1363 |
| BRL | 0.2507 | 0.2988 |
| GBP | 1.1320 | 1.1627 |
Annual General Meeting of Shareholders: May 17th, 2018
H1 2018 results: July 26th, 2018 (before market)
Forward looking statements
This news release may contain some forward-looking statements. These statements are not undertakings as to the future performance of the Company. Although the Company considers that such statements are based on reasonable expectations and assumptions on the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual performance to differ from those indicated or implied in such statements.
These risks and uncertainties include without limitation the risk factors that are described in the annual report registered in France with the French Autorité des Marchés Financiers.
Investors and holders of shares of the Company may obtain copy of such annual report by contacting the Autorité des Marchés Financiers on its website www.amf-france.org or directly on the Company website www.jcdecaux.com.
The Company does not have the obligation and undertakes no obligation to update or revise any of the forward-looking statements.
Key figures
- 2017 revenue: €3,493m*
- JCDecaux is listed on the Eurolist of Euronext Paris and is part of the Euronext 100 and Euronext Family Business indexes
- JCDecaux is part of the FTSE4Good and Dow Jones Sustainability Europe indexes
- N°1 worldwide in street furniture (543,050 advertising panels)
- N°1 worldwide in transport advertising with more than 215 airports and 250 contracts in metros, buses, trains and tramways (356,320 advertising panels)
- N°1 in Europe for billboards (141,630 advertising panels)
- N°1 in outdoor advertising in Europe (672,220 advertising panels)
- N°1 in outdoor advertising in Asia-Pacific (216,290 advertising panels)
- N°1 in outdoor advertising in Latin America (77,190 advertising panels)
- N°1 in outdoor advertising in Africa (26,770 advertising panels)
- N°1 in outdoor advertising in the Middle-East (18,650 advertising panels)
- Leader in self-service bike rental scheme: pioneer in eco-friendly mobility
- 1,074,113 advertising panels in more than 80 countries
- Present in 4,033 cities with more than 10,000 inhabitants
- 13,040 employees
* Restated from the retrospective application of IFRS 15, applicable from January 1st, 2018