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Jcdecaux — H1 2015 Earnings Presentation
52 slides from Jcdecaux's earnings presentation, Jul 30, 2015
Slide 1: H1 2015 Results
H1 2015 RESULTS July 30th, 2015 Digital screen branded for Jurassic World launching campaign in Waterloo station, London, UK
Slide 2: Business Overview
BUSINESS OVERVIEW Jean-François Decaux Chairman of the Executive Board and Co-CEO
Slide 3: H1 2015 Results
H1 2015 RESULTS In million Euros, except %. Adjusted figures (1) except when IFRS. H1 2015 H1 2014 (2) ► Revenues 1,459.7 1,304.8 +11.9% ► Operating margin 285.7 256.8 +11.3% ► EBIT before impairment charge (3) 134.6 124.4 +8.2% ► Net income Group share before impairment charge, IFRS (4) 78.6 73.9 +
Slide 4: H1 2015 Adjusted Revenues Growth by Segment
H1 2015 ADJUSTED REVENUES GROWTH BY SEGMENT Reported growth (%) Organic growth (%) (1) +23.0% +11.9% +9.7% +5.2% +4.5% +2.9% -6.3% -6.6% Street Street Transport Billboard Group Transport Billboard Group Furniture Furniture (1) Organic growth = excluding acquisitions / divestitures and the impact of
Slide 5: H1 2015 Adjusted Revenues Growth by Region
H1 2015 ADJUSTED REVENUES GROWTH BY REGION Organic growth (%) (1) +7.8% +5.6% +2.9% +2.9% +0.3% -1.4% -3.2% Asia- United Rest of the North Europe (2) France Group Pacific Kingdom World America (1) Organic growth = excluding acquisitions / divestitures and the impact of foreign exchange. (2) Excludin
Slide 6: H1 2015 Adjusted Revenues Breakdown
H1 2015 ADJUSTED REVENUES BREAKDOWN North America Billboard Rest of Street the World Europe (1) 14.4% 6.6% Furniture 10.0% 26.7% United 44.9% Kingdom 11.2% 40.7% 20.5% 25.0% Transport France Asia-Pacific (1) Excluding France and the United Kingdom. 6
Slide 7: Fast-Growing Countries Now Represent More Than a Third of Group Revenues
FAST-GROWING COUNTRIES NOW REPRESENT MORE THAN A THIRD OF GROUP REVENUES In million €. Adjusted figures. 34% 36% 32% 33% 29% 26% 23% 21% 19% 16% 952 859 764 638 8% 534 519 408 400 427 339 134 2004 2007 2008 2009 2010 2011 2012 2013 2014 H1 2014 H1 2015 Revenues from fast-growing countries Fast-growi
Slide 8: Strong Growth from Digital: +40.5% Increase in Revenues in H1 2015
STRONG GROWTH FROM DIGITAL: +40.5% INCREASE IN REVENUES IN H1 2015 UK, Greater China and US are still the largest contributors 17.2% 17.6% 14.0% 12.4% 9.9% 7.9% 5.1% 6.1% H1 2012 H1 2013 H1 2014 H1 2015 Digital revenues as a % of total revenues Transport digital revenues as a % of total Transport
Slide 9: Recent Contract Wins & Renewals
RECENT CONTRACT WINS & RENEWALS New contracts Contract renewals / extensions TRANSPORT STREET FURNITURE Brazil Rio de Janeiro Tom Jobim International Airport Denmark Copenhagen China Guangzhou Metro (9 months) Hong Kong Hong Kong island buses TRANSPORT Saudi Arabia Madinah Prince Mohammad bin Abdula
Slide 10: Innovation and Beautification
INNOVATION AND BEAUTIFICATION 2 awards at the “Janus de l’Industrie” organized by the French Institute of Design: “Grand Prix Design de la Réussite” “Janus de la Cité 2015” New bus shelter designed by Marc Aurel, Paris, France 10
Slide 11: Engaging the Rail Audience
ENGAGING THE RAIL AUDIENCE Twitter: Half a million tweets the first day of the campaign 71% engagement rate 100% UK national digital domination Box Office results: Jurassic World scored biggest opening weekend in history Jurassic World launching campaign in Waterloo station, London, UK 11
Slide 12: Full Outdoor Coverage in Hong Kong
FULL OUTDOOR COVERAGE IN HONG KONG Metro International airport Airport Express Bus shelters Bus Tram 12
Slide 13: Edinburgh: Exclusive Partnership
EDINBURGH: EXCLUSIVE PARTNERSHIP First important city in the UK to combine Street Furniture and Large Format in one tender Bus shelter designed by Lord Norman Foster with digital 84ʺ LCD screens on Princes Street, Edinburgh, UK 13
Slide 14: Premium Digital Billboards on Public Land
PREMIUM DIGITAL BILLBOARDS ON PUBLIC LAND Innovative outdoor offer in the US: Iconic digital billboards on public land Revenue share with the Municipality 6.5 million public service messages since launch in March 2014 Chicago contract roll-out: 21 billboards (35 screens out of 60) as end o
Slide 15: Airport Advertising: Strong Growth Potential in Latin America
AIRPORT ADVERTISING: STRONG GROWTH POTENTIAL IN LATIN AMERICA JCDecaux recently won 2 of the 10 largest airports in Latin America 5 of the 10 largest airports of the region are in Brazil Passengers # Airports (million) 1 São Paulo – Guarulhos (Brazil) 39.8 2 Mexico City (Mexico) 34.3 3 Bogotá (C
Slide 16: N°1 in Africa
N°1 IN AFRICA JCDecaux has closed the acquisition (1) of Continental on June 18th, 2015 This new platform allows JCDecaux to further expand in Africa (13 new countries) This transaction is both OM and EPS accretive in the first full year following the closing Algeria Cameroon Uganda Countries
Slide 17: 60% Stake in IGPDecaux (Italy)
60% STAKE IN IGPDECAUX (ITALY) Purchase of RCS Media Group’s stake, post- acquisition: JCDecaux goes from 32.35% to 60% stake in the new structure Publitransport (Du Chène de Vère family) goes from 33.15% to 40% The Universal Exhibition in Milan, a unique event: From May, 1st to October, 3
Slide 18: Cemusa: Update on the Acquisition Process
CEMUSA: UPDATE ON THE ACQUISITION PROCESS Approval from the Spanish regulators obtained in October 2014 Portugal: Withdrawal of the notification addressed to the Portuguese competition authorities On-going change of control discussions with New York City 18
Slide 19: Top 30 Global Media Owners
TOP 30 GLOBAL MEDIA OWNERS Unique ranking of the world’s largest media companies by media revenue, as estimated by ZenithOptimedia Media revenue is defined as all revenues deriving from businesses that support advertising (excluding simple redistribution of third‐party content) # Media owner Cou
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS David Bourg Chief Financial & Administrative Officer
Slide 21: H1 2015 Results
H1 2015 RESULTS In million Euros, except %. Adjusted figures (1) except when IFRS. H1 2015 H1 2014 (2) ► Revenues 1,459.7 1,304.8 +11.9% ► Operating margin 285.7 256.8 +11.3% ► EBIT before impairment charge (3) 134.6 124.4 +8.2% ► Net income Group share before impairment charge, IFRS (4) 78.6 73.9 +
Slide 22: Analysis of Operating Margin
ANALYSIS OF OPERATING MARGIN Forex effect + Organic In million Euros, except %. Adjusted figures. H1 2014 (1) H1 2015 Perimeter effect growth ► Revenues 1,304.8 116.9 38.0 1,459.7 +11.9% • Rent and fees (508.7) (63.7) (26.7) (599.1) • Other net operational expenses (539.3) (33.3) (2.3) (574.9) ► Ope
Slide 23: Operating Margin to EBIT
OPERATING MARGIN TO EBIT In million Euros, except %. Adjusted figures. H1 2015 H1 2014 (1) ► Operating margin 285.7 256.8 +11.3% • Maintenance spare parts (20.1) (18.7) • Amortization and provisions (net) (124.0) (120.6) o Of which net depreciation of PP&E and intangible assets (121.6) (118.9) o Of
Slide 24: Margins by Segment
MARGINS BY SEGMENT Operating margin (% of revenues) EBIT (1) (% of revenues) Adjusted figures Adjusted figures +110bps -10bps 30.3% +130bps -170bps -30bps 19.6% -230bps 12.8% +10bps 13.4% 8.7% 9.2% 5.5% -180bps -2.3% Street Street Transport Billboard Group Transport Billboard Group Furniture Furnitu
Slide 25: EBIT to Net Income
EBIT TO NET INCOME In million Euros, except % H1 2015 H1 2014 (1) ► Adjusted EBIT after impairment charge 135.8 121.0 +12.2% • Restatement of EBIT from companies under joint control (32.9) (24.6) ► EBIT after impairment charge, IFRS 102.9 96.4 +6.7% • Financial income / (loss) (2) (13.1) (15.6) • Ta
Slide 26: Cash Flow Statement
CASH FLOW STATEMENT In million Euros, except % H1 2015 H1 2014 (1) ► Adjusted funds from operations net of maintenance costs 210.0 183.1 +14.7% • Adjusted change in working capital requirement 7.1 (10.8) ► Adjusted net cash flow from operating activities 217.1 172.3 +26.0% • Adjusted capital expendi
Slide 27: Breakdown of Capex
BREAKDOWN OF CAPEX In million €. Adjusted figures 168 306 304 180 155 168 168 222 200 71 108 350 14.5% 14.0% 300 250 126 8.6% 141 8.3% 9.4% 7.1% 200 6.8% 6.4% 7.4% 6.6% 150 67 142 101 57 5.4% 93 86 100 125 93 163 42 92 54 50 110 50 53 55 31 39 42 45 23 38 25 29 25 25 19 17 2 23 17 0 2006 2007 2008 2
Slide 28: Success of the Share Buyback (OPAS)
SUCCESS OF THE SHARE BUYBACK (“OPAS”) 194,419,422 shares, accounting for 87% of the share capital, were tendered to the offer Out of these, 61% of the free float were tendered The buyback allocation was determined through a pro rata reduction on an equal basis between all shareholders based on
Slide 29: Renegotiation of the Syndicated Loan
RENEGOTIATION OF THE SYNDICATED LOAN Committed revolving credit line New terms renegotiated: Increase of the amount from €600m to €825m Credit period of 5 years + 2 one-year extensions Reduction of the margins 29
Slide 30: H1 2015 Financial Highlights
H1 2015 FINANCIAL HIGHLIGHTS Solid performance in revenue – Slower Q2 in the Transport segment Stable operating margin ratio driven by a good performance in Street Furniture and continued tight cost-control Strong free cash flow generation despite a sustained capex program A strong and lever
Slide 31: Growth Strategy and Outlook
GROWTH STRATEGY AND OUTLOOK Jean-Charles Decaux Co-CEO
Slide 32: Rapid Urbanization over the Next 10 Years
RAPID URBANIZATION OVER THE NEXT 10 YEARS 50% of the global GDP is generated by the 300 largest metropolitan areas By 2025, there could be nearly 40 cities with a population of over 10 million people Cities occupy 0.5% of the world’s surface, represent 50% of the global population and consume
Slide 33: Private Consumption to Become Important Growth Driver in Emerging Countries
PRIVATE CONSUMPTION TO BECOME IMPORTANT GROWTH DRIVER IN EMERGING COUNTRIES Share of total world private consumption (%) Private consumption in emerging countries will increase by 87% from 2004 57% 63% to 2034 69% 77% +87% Emerging countries will represent 43% of the 37% 43% 31% world private co
Slide 34: Passenger Traffic Is Outperforming GDP Growth
PASSENGER TRAFFIC IS OUTPERFORMING GDP GROWTH Between 2014 and 2034, revenue per passenger will increase by 5.8% CAGR in emerging countries (vs. 3.8% in mature markets) World real GDP and passenger traffic year-on-year growth 7% 5% 3% 1% -2% -4% H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2008 20
Slide 35: A Unique Airport Platform for a Global Reach
A UNIQUE AIRPORT PLATFORM FOR A GLOBAL REACH JCDecaux covers 59% of the passenger traffic over the Top 10 airports JCDecaux is present in 50% of the largest airports in Europe, Asia-Pacific and North America #1 London #6 Chicago #2 New York #7 Shanghai #3 Tokyo #8 Beijing #4 Atlanta #9 Dubai #5
Slide 36: Transport Continues to Lead Digital Transformation
TRANSPORT CONTINUES TO LEAD DIGITAL TRANSFORMATION Transport is an ideal environment with a valuable and captive audience More than 45,000 screens, in all segments, in 26 countries In H1 2015, JCDecaux Transport digital revenues accounted for 73% of digital revenues Roissy-Charles de Gaulle ai
Slide 37: Digital Moves to Street Furniture
DIGITAL MOVES TO STREET FURNITURE Breakdown by segment H1 2014 H1 2015 Street Street Billboard Billboard Furniture Furniture 5.1% 7.1% 14.7% 20.1% 80.2% 72.8% Transport Transport Digital screen in Hamburg, Germany 37
Slide 38: Exposure to Outdoor Advertising Is Rising
EXPOSURE TO OUTDOOR ADVERTISING IS RISING More advertising displays being 45% built in public spaces Example of the UK Media time share vs. Ad spend share Migration to cities in emerging markets 28% Media time share Consumers’ greater willingness to 25% Ad spend share 21% 22% spend their leisu
Slide 39: Connectivity: A Strategic Development
CONNECTIVITY: A STRATEGIC DEVELOPMENT JCDecaux Link: a dedicated entity created in January 2015, to coordinate Group’s connectivity initiatives and assist subsidiaries in the roll-out of local connectivity strategy JCDecaux Link has been awarded in the category of “Small cell technology and depl
Slide 40: Successful Projects with Connectivity
SUCCESSFUL PROJECTS WITH CONNECTIVITY 52 Wi-Fi hotspots deployed in Düsseldorf with a 5-year extension on the contract Free Wi-Fi sponsored in “Aéroports de Paris” JCDecaux value added: The efficiency of the business model Complementarity with both online and offline On-field teams who c
Slide 41: A Unique Global Presence
A UNIQUE GLOBAL PRESENCE North America: JCDecaux n°4 Europe: JCDecaux n°1 Transition to digital billboards Beautification Outdoor market share gains Smart/connected street furniture Organic growth and consolidation opportunities JCDecaux well placed to benefit from a European recovery Mi
Slide 42: The Strongest Balance Sheet in the Industry
THE STRONGEST BALANCE SHEET IN THE INDUSTRY JCDecaux Ströer Lamar Outfront Media CCO / iHeartMedia Net debt (1) / EBITDA (2) 0.1x 1.9x 3.4x 5.2x 6.4x / 10.4x Gross debt $699m $364m $1.9bn $2.3bn $4.9bn / $20.5bn Maturity date 2018 2020 2019-2024 2022-2025 2020-2022 / 2017-2027 Credit Rating (S&P) BB
Slide 43: Main Tenders Expected in 2015-2016
MAIN TENDERS EXPECTED IN 2015-2016 Street Furniture Transport Billboard Europe Europe Rest of the World Leipzig, Bonn, Aachen Istanbul St. Petersburg Brussels bus shelters Rome buses London (TfL bus shelters) Naples metro and buses Dublin London metro Paris’ kiosks North America Madrid CIPs & Column
Slide 44: Consolidation Continues with Mid to Small Size Operators
CONSOLIDATION CONTINUES WITH MID TO SMALL SIZE OPERATORS 3,737(1) 2014 outdoor revenues ($m) International operations 2,961 excluding North America North America operations Equity method Equity method Joint control 1,708 3,513 30% 33% 25% 1,253 1,354 1,287 1,126 958 580 96 225 340 276 254 252 233 22
Slide 45: Conclusion
CONCLUSION Solid financial achievements in H1 2015 Solid performance in revenue – Slower Q2 in the Transport segment Stable operating margin ratio driven by a good performance in Street Furniture and continued tight cost-control Strong free cash flow generation despite a sustained capex prog
Slide 46: Q3 2015 Outlook
Q3 2015 OUTLOOK “Bearing in mind the limited visibility and the on- going volatility in most markets, we currently anticipate Q3 organic revenue growth to be in line with our H1 performance.” 46
Slide 47: Implementation of IFRS 11
IMPLEMENTATION OF IFRS 11 Under IFRS 11, applicable from January 1st, 2014, companies under joint control previously consolidated using the proportionate method are accounted for using the equity method. However, operating data of the companies under joint control will continue to be proportiona
Slide 48: Reconciliation Between IFRS and Adjusted Figures – Profit & Loss
RECONCILIATION BETWEEN IFRS FIGURES AND ADJUSTED FIGURES – PROFIT & LOSS H1 2015 H1 2014 (1) Impact of Impact of companies companies In million Euros Adjusted IFRS Adjusted IFRS under joint under joint control control ► Revenues 1,459.7 (172.0) 1,287.7 1,304.8 (153.7) 1,151.1 • Operating costs (1,17
Slide 49: Reconciliation Between IFRS and Adjusted Figures – Cash Flow Statement
RECONCILIATION BETWEEN IFRS FIGURES AND ADJUSTED FIGURES – CASH FLOW STATEMENT H1 2015 H1 2014 (1) Impact of Impact of companies companies In million Euros Adjusted IFRS Adjusted IFRS under joint under joint control control ► Funds from operations net of maintenance costs 210.0 1.5 211.5 183.1 (5.1)
Slide 50: Financial Definitions
FINANCIAL DEFINITIONS Operating margin Revenues less Direct Operating Expenses (excluding Maintenance spare parts) less SG&A expenses EBIT (Earnings Before Interests and Taxes) Operating Margin less Depreciation, amortization and provisions (net) less Impairment of goodwill less Maintenance spare pa
Slide 51: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation 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 publica
Slide 52: JCDecaux
JCDecaux