SAN ANTONIO, Feb. 26, 2024 /PRNewswire/ — Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) (the “Company”) today reported financial results for the quarter and year ended December 31, 2023.
“Our fourth quarter consolidated revenue of $632.1 million increased 12.4%, or 10.8% excluding movements in foreign exchange rates, reflecting improving business trends and solid execution from our operating team. The Airports and Europe-North segments both performed very strongly, while the America segment returned to growth in the quarter. We see those trends continuing with the America segment, in particular, accelerating into the new year,” said Scott Wells, Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. “We are delivering on our strategic roadmap to transform into a technology-fueled, visual media powerhouse reaching a growing audience.
“In the year ahead, we remain focused on driving our key initiatives to focus our organization on our higher-margin U.S. markets. The sale process of our Europe-North segment is ongoing, and we have initiated a sale process for our Latin American businesses. We are also evaluating paths to optimize our cost structure, while strategically investing in our technology and digital infrastructure. We believe these efforts will increase operating leverage in our business and enhance our ability to organically grow Adjusted EBITDA and free cash flow. These efforts all reflect our priority to reduce leverage over the next few years.
“The out-of-home industry is forecasted to deliver healthy growth in 2024, and we are optimistic about our outlook given the improving climate in our largest markets and the strength of our Airports segment, coupled with the investments we have made to expand the range of advertisers we serve. We remain committed to maintaining ample liquidity on our balance sheet and operating in a disciplined manner.”
Financial Highlights:
Financial highlights for the fourth quarter of 2023 as compared to the same period of 2022, including financial highlights excluding movements in foreign exchange rates (“FX”)1:
(In millions)
Three Months Ended
December 31, 2023
% Change
Revenue:
Consolidated Revenue2
$ 632.1
12.4 %
Excluding movements in FX1,2
623.1
10.8 %
America Revenue
298.5
0.5 %
Airports Revenue
111.2
44.3 %
Europe-North Revenue
191.8
17.8 %
Excluding movements in FX1
184.6
13.4 %
Net Income:
Income from Continuing Operations
25.4
(76.2) %
Adjusted EBITDA1:
Adjusted EBITDA1,2
190.0
9.2 %
Excluding movements in FX1,2
188.0
8.1 %
America Segment Adjusted EBITDA3
136.2
0.6 %
Airports Segment Adjusted EBITDA3
30.1
42.7 %
Europe-North Segment Adjusted EBITDA3
52.5
17.5 %
Excluding movements in FX1
50.5
13.1 %
1
This is a non-GAAP financial measure. See “Supplemental Disclosures” section herein for more information.
2
Financial highlights exclude results of discontinued operations. See “Dispositions and Discontinued Operations” section herein for more information.
3
Segment Adjusted EBITDA is a GAAP financial measure. See “Supplemental Disclosures” section herein for more information.
Dispositions and Discontinued Operations:
During the first three quarters of 2023, we sold our businesses in Switzerland and Italy (on March 31 and May 31, respectively) for aggregate cash proceeds, net of direct costs to transact the sales and cash sold, of $89.2 million. In May 2023, we also entered into an agreement to sell our business in Spain for cash consideration of approximately $64.3 million. This transaction is expected to close in 2024, upon satisfaction of regulatory approval and other customary closing conditions. We are using the net proceeds from these sales, after payment of transaction-related fees and expenses, to improve liquidity and increase financial flexibility of the business as permitted under our debt agreements.
On October 31, 2023, we sold our business in France to Equinox Industries (“Equinox”). We delivered our business in France to Equinox with $44.5 million of cash, subject to adjustment for related customary items, tax and other costs, to support ongoing operations of the business, and Equinox assumed the $29.7 million state-guaranteed loan held by Clear Channel France. In December 2023, Equinox repaid us $4.9 million to satisfy certain post-closing obligations. Additionally, we incurred certain direct costs to transact the sale. In total, cash delivered to the buyer (net of the repayment) and payment of these additional direct costs was $43.0 million, with an additional $0.8 million of accrued direct costs to be paid in 2024.
During 2023, our plan to sell these businesses (collectively comprising our entire Europe-South segment) met the criteria to be reported as discontinued operations. As a result, each of the Europe-South segment businesses has been reclassified to discontinued operations in our financial statements for all periods presented, resulting in changes to the presentation of certain amounts for prior periods. The discussion in this earnings release presents the results of continuing operations and excludes amounts related to discontinued operations for all periods presented, unless otherwise noted.
International Sales Processes:
We have initiated processes to sell the businesses in our Europe-North segment and in Latin America. There can be no assurance that these processes will result in any additional transactions or particular outcomes. We have not set a timetable for completion of these processes, may suspend the processes at any time and do not intend to make further announcements regarding the processes unless and until our Board approves a course of action for which further disclosure is appropriate.
Guidance:
Our expectations for the first quarter and full year of 2024 are as follows:
First Quarter of 2024
% change from prior year
(in millions)
Low
High
Low
High
Consolidated Revenue1,2
$ 465
$ 490
6 %
12 %
America
245
255
4 %
8 %
Airports
74
79
38 %
47 %
Europe-North1
130
140
1 %
9 %
1
Excludes movements in FX
2
Excludes results of discontinued operations
Full Year of 2024
% change from prior year
(in millions)
Low
High
Low
High
Consolidated Revenue1,2
$ 2,200
$ 2,260
3 %
6 %
America
1,135
1,165
3 %
6 %
Airports
345
360
11 %
16 %
Europe-North1
635
655
2 %
6 %
Loss from Continuing Operations1
(131)
(101)
(17) %
(36) %
Adjusted EBITDA1,2,3
550
585
3 %
9 %
Adjusted Funds from Operations (“AFFO”)1,2,3
75
100
(10) %
20 %
Capital Expenditures2
130
150
(10) %
4 %
1
Excludes movements in FX
2
Excludes results of discontinued operations
3
This is a non-GAAP financial measure. See “Supplemental Disclosures” section herein for more information.
Expected results and estimates may be impacted by factors outside of the Company’s control, and actual results may be materially different from this guidance. See “Cautionary Statement Concerning Forward-Looking Statements” herein.
Results:
Results provided herein exclude amounts related to discontinued operations for all periods presented.
Revenue:
(In thousands)
Three Months Ended
December 31,
%
Change
Year Ended
December 31,
%
Change
2023
2022
2023
2022
Revenue:
America
$ 298,520
$ 297,069
0.5 %
$ 1,100,846
$ 1,105,552
(0.4) %
Airports
111,213
77,095
44.3 %
311,605
256,402
21.5 %
Europe-North
191,779
162,781
17.8 %
619,557
566,119
9.4 %
Other
30,602
25,302
20.9 %
95,132
85,955
10.7 %
Consolidated Revenue
$ 632,114
$ 562,247
12.4 %
$ 2,127,140
$ 2,014,028
5.6 %
Revenue excluding movements in FX1:
America
$ 298,520
$ 297,069
0.5 %
$ 1,100,846
$ 1,105,552
(0.4) %
Airports
111,213
77,095
44.3 %
311,605
256,402
21.5 %
Europe-North
184,559
162,781
13.4 %
618,716
566,119
9.3 %
Other
28,791
25,302
13.8 %
89,674
85,955
4.3 %
Consolidated Revenue excluding
movements in FX
$ 623,083
$ 562,247
10.8 %
$ 2,120,841
$ 2,014,028
5.3 %
1 This is a non-GAAP financial measure. See “Supplemental Disclosures” section herein for more information.
Revenue for the fourth quarter of 2023, as compared to the same period of 2022:
America: Revenue up 0.5%:
Billboards revenue up driven by digital deployments and programmatic growth
Digital revenue up 2.4% to $114.0 million from $111.3 million
National sales comprised 37.1% of America revenue, compared to 36.7% in the prior year
Airports: Revenue up 44.3%:
Revenue up across most airports and verticals; increased demand and continued investment in digital infrastructure
Digital revenue up 57.9% to $73.1 million from $46.3 million
National sales comprised 58.9% of Airports revenue, compared to 56.0% in the prior year
Europe-North: Revenue up 17.8%; excluding movements in FX, up 13.4%:
Revenue up across all products and countries, most notably the U.K. and Belgium, driven by increased demand, deployment of additional digital displays and new contracts
Digital revenue up 22.9% to $109.7 million from $89.2 million; digital revenue, excluding movements in FX, up 17.9% to $105.2 million
Other: Revenue up 20.9%; excluding movements in FX, up 13.8%:
Higher revenue in Brazil and Mexico
Direct Operating and SG&A Expenses1:
(In thousands)
Three Months Ended
December 31,
%
Change
Year Ended
December 31,
%
Change
2023
2022
2023
2022
Direct operating and SG&A expenses:
America
$ 162,863
$ 162,218
0.4 %
$ 633,021
$ 607,618
4.2 %
Airports
81,109
55,998
44.8 %
243,383
195,538
24.5 %
Europe-North
140,479
118,067
19.0 %
507,185
462,787
9.6 %
Other
23,380
18,254
28.1 %
80,740
73,625
9.7 %
Consolidated Direct operating and
SG&A expenses2
$ 407,831
$ 354,537
15.0 %
$ 1,464,329
$ 1,339,568
9.3 %
Direct operating and SG&A expenses excluding movements in FX3:
America
$ 162,863
$ 162,218
0.4 %
$ 633,021
$ 607,618
4.2 %
Airports
81,109
55,998
44.8 %
243,383
195,538
24.5 %
Europe-North
135,224
118,067
14.5 %
509,520
462,787
10.1 %
Other
22,130
18,254
21.2 %
76,632
73,625
4.1 %
Consolidated Direct operating and
SG&A expenses excluding
movements in FX
$ 401,326
$ 354,537
13.2 %
$ 1,462,556
$ 1,339,568
9.2 %
1
“Direct operating and SG&A expenses” as presented throughout this earnings release refers to the sum of direct operating expenses (excluding depreciation and amortization) and selling, general and administrative expenses (excluding depreciation and amortization).
2
Includes restructuring and other costs of $2.2 million and $0.4 million during the three months ended December 31, 2023 and 2022, respectively, and $3.1 million and $1.8 million during the years ended December 31, 2023 and 2022, respectively.
3
This is a non-GAAP financial measure. See “Supplemental Disclosures” section herein for more information.
Direct operating and SG&A expenses for the fourth quarter of 2023, as compared to the same period of 2022:
America: Direct operating and SG&A expenses up 0.4%:
Site lease expense up 2.1% to $89.5 million from $87.7 million driven by lower rent abatements
Offset by lower property taxes related to a legal settlement, maintenance costs and credit loss expense
Airports: Direct operating and SG&A expenses up 44.8%:
Site lease expense up 46.4% to $64.9 million from $44.3 million driven by higher revenue
Higher variable incentive compensation costs
Europe-North: Direct operating and SG&A expenses up 19.0%; excluding movements in FX, up 14.5%:
Site lease expense up 15.7% to $63.5 million from $54.9 million; site lease expense, excluding movements in FX, up 12.0% to $61.5 million driven by higher revenue
Higher property taxes and compensation costs
Other: Direct operating and SG&A expenses up 28.1%; excluding movements in FX, up 21.2%:
Higher site lease expense driven by lower rent abatements and higher revenue
Restructuring costs to reduce scale of Singapore business following loss of contract
Corporate Expenses1:
(In thousands)
Three Months Ended
December 31,
%
Change
Year Ended
December 31,
%
Change
2023
2022
2023
2022
Corporate expenses2
$ 42,897
$ 38,529
11.3 %
$ 172,324
$ 161,852
6.5 %
Corporate expenses excluding
movements in FX3
42,282
38,529
9.7 %