Q4 Reports From CCO, Lamar, and Outfront

Mar 17 2023

Q4 Reports From CCO, Lamar, and Outfront.

Clear Channel Outdoor Holdings, Inc. had a strong year, driven by healthy demand from advertisers and a rebound from the pandemic, particularly from digital assets in the Americas and Europe, The company plans to focus on expanding its digital footprint, strengthening data analytics, and improving customer experience to improve revenue and gain business leverage. Additionally, Clear Channel is reviewing strategic options for its European businesses and plans to expand financial reporting to four segments to reflect changes in business management and resource allocation, with the goal of driving improved operating and free cash flow and value creation for shareholders. CCO Q4

Despite weakening demand from national customers, Lamar Advertising Company announced its operating results for the fourth quarter with net revenue increasing by 8.26%. Lamar reported solid financial results for the fourth quarter, with strong local sales helping them exceed their guidance range for full-year diluted AFFO per share. Looking forward, the company anticipates solid revenue growth for 2023, with full-year diluted AFFO per share expected to be between $7.40 and $7.55, despite interest expense posing a significant challenge. CCO Q4

OUTFRONT reported strong financial results for the fourth quarter of 2022, with reported revenues of $494.7 million, a 6.5% increase from the prior-year period, and adjusted OIBDA of $153.7 million, a 1.7% increase. Despite macroeconomic uncertainty, OUTFRONT achieved significant growth in 2022, with revenues increasing over 20%, adjusted OIBDA nearly 40%, and a record amount of digital inventory added. OUTFRONT expects to continue growing revenues, adjusted OIBDA, and AFFO in 2023. OUTFRONT Q4

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SignValue Celebrates International Women’s Day

Mar 15 2023

SignValue Celebrates International Women’s Day

OOH Today has released its annual shortlist of the Top Women Driving Growth in Out of Home. The list includes 24 accomplished women in various roles, including salespeople, executives, presidents and luminaries, who have been making a difference in the industry. These women are a driving force in the OOH industry, bringing new perspectives and ideas that help revitalize old approaches and prevent stagnation. One of the women on the list is Cynthia Beiler, a Regional Vice President at Adams Outdoor Advertising. She specializes in developing and implementing sales strategies that help accelerate profitable growth. She believes that the key to taking a bigger slice of total ad spend is enhancing the sales approach and conversation to increase the value of OOH in the mind of buyers. Claudia Damas, CEO and Partner at Altermark, is another woman on the list. She has over 20 years of experience in the Latin America OOH markets and is currently focused on developing the industry on a global scale. Dawn Del Mastro Chruma, CEO at Del Mastro Outdoor, and Alice Gogh, SVP Strategy, Innovation & Product at Captivate, are also on the list. All of these women are passionate, accomplished and they serve as examples of how diversity can help bring new ideas and perspectives to an industry.

At SignValue, we understand the importance of diversity and believe that it is crucial to the success of our industry. By bringing together individuals from different backgrounds and perspectives, we can create innovative solutions and drive growth in new and exciting ways. We congratulate all the women on this year’s list and are inspired by their dedication, leadership and innovation. We are committed to continuing our support of women in the out of home industry and look forward to a bright future of progress and success.

A Comparison of 2022 Q4 Financial Reports from Lamar, Outfront, and Clear Channel.

Mar 08 2023

Lamar reported a strong 2022 Q4 financial performance, with a total revenue of $535 million, an increase of 8% compared to 2021 Q4. Lamar’s operating income was $110 million, a decrease of 26% compared to the previous year’s Q4. The company’s net income was $439 million, a 13% increase compared to the previous year’s Q4.

Outfront Media also reported a strong 2022 Q4 financial performance, with a total revenue of $495 million, an increase of 6% compared to the previous year’s Q4. Outfront Media’s operating income was $105 million, nearly unchanged compared to the previous year’s Q4. The company’s net income was $59 million, a 16% decrease compared to the previous year’s Q4.

Clear Channel Outdoor reported a total revenue of $357 million for the 2022 Q4, a 2.1% increase compared to the previous year’s Q4. The company’s digital revenue was $157.5 million, an increase of 2% compared to the previous year’s Q4. Clear Channel Outdoor’s operating income was $27 million, a 51% decrease compared to the previous year’s Q4. The company’s net income was $99.4 million, an increase of 51% compared to the previous year’s Q4.

Lamar was the most successful of the three companies in Q4 2022, with higher total revenue, operating income, and net income compared to Outfront Media and Clear Channel Outdoor. Outfront Media’s performance was steady compared to the previous year, while Clear Channel Outdoor experienced significant decreases in operating income and net income. These results indicate that Lamar has been strategic and successful in their focus on digital transformation, while Outfront Media and Clear Channel Outdoor may need to adjust their strategies to remain competitive.

Billboard REITs: A Hedge Against Inflation

Feb 28 2023

Billboard REITs: A Hedge Against Inflation

Hoya Capital recently published an informative article in Seeking Alpha on billboard REITs, titled “Billboard REITs: We’re Paying Attention (Lamar Vs Outfront)“. It covers the basics of the out-of-home industry and it outlines both its benefits (such as the regulatory barriers to entry, the potential for digital billboards, and the low maintenance capex) and its risks (primarily advertising cyclicality).

A few points that SignValue would like to highlight is the major billboard companies’ performance, billboard REIT dividend, and billboard REITs serving as a hedge against inflation.

Investors have rewarded Lamar’s focus on its traditional billboard business (89% of their assets are billboards), paying back the company with an average yearly total return of 14.7%, in contrast to the average general REIT return of 6.7% in the same time frame. Outfront has had a much greater exposure to transit advertising and has only produced 3.0% in annual returns through the same duration. Both REITs have shown markedly better performance than Clear Channel, whose high debt burden and similar transit-focused portfolio have weighed it down.

The average dividend yield for Billboard REITs is 4.9% compared to the average for REITS at 3.6%. Analysis from Billboard Insider believes that this is due to the fact that billboard assets require lower maintenance costs compared to commercial buildings. Billboard companies are typically acquired at a 10-12 times multiple of billboard cashflow, which is equivalent to an 8-10% cap rate, whereas commercial real estate is usually purchased at a 5-7% cap rate, which translates to 14-20 times cashflow multiple. The higher the cashflow multiple to purchase an asset, the less the dividend will be naturally.

While the billboard industry is susceptible to economic downturns like everyone else, the OOH industry is remarkably resistant to inflationary pressures. Hoya Capital states Billboard REITs’, “growth profile […] is especially compelling for REITs trading with 4.5%-6% dividend yields and with a rather unique investment characteristics as one of the least-sensitive REIT sectors to interest rate movement and the single-best sector in our Inflation Hedge Factor metric”. Billboard land leases are usually long-term contracts (5-15 years), and ad contracts are short-term (1-12 months), leading to ad rates outpacing lease payments due to inflation. This dynamic serves are a reliable and unique hedge against inflation.

Learn more about OOH assets by emailing info@signvalue.com or calling 480.657.8400!

Cookies Are a Thing of the Past: How DOOH Is the Solution

Feb 14 2023

Is Digital OOH advertising the answer to a future without cookies?

Digital Out of Home (DOOH) advertising is quickly becoming the answer to a future without third-party cookies. As more users become increasingly aware of their data privacy, they are more likely to delete cookies or use browser settings that block them. Without cookies, marketers would not be able to track user activity, which would mean less effective targeting and lower ROI from ad campaigns.

Google recently announced that it will discontinue third-party cookies in its Chrome web browser. This move is part of Google’s Privacy Sandbox initiative, which aims to develop technologies for more privacy-preserving online advertising. DOOH advertising can fill the gap left by third-party cookies by providing an alternative way for marketers to reach their target audiences.

DOOH advertising offers numerous advantages compared to traditional digital advertising. For instance, DOOH displays are not affected by browser settings, as they are seen on physical displays. Furthermore, they are often placed in high-traffic areas, providing greater visibility and reach. Additionally, they can be GEO-targeted, as advertisers can choose exactly where to place their ads in order to reach the right audiences.

Overall, DOOH advertising is emerging as the answer to a future without third-party cookies, as it provides an effective alternative way for marketers to reach their target audiences. With its unique advantages, DOOH is quickly becoming a popular choice for advertisers, and it is likely to remain a key part of the marketing landscape in the years to come.