JCDecaux - H1 2010 results: Revenues up 20% at €1,110.6 million and strong free cash flow generation

[Redactie Nederlands MediaNetwerk]

• Organic revenues up 11.3% in Q2 2010, + 8.7% in H1 2010
• Operating margin up 48.2% to €246.6 million
• EBIT up 129.7% to €113.7 million
• Net income increased to €65.0 million from €4.4 million in H1 2009
• Free cash flow of €119.0 million compared to - €1.7 million in H1 2009
• Q3 2010 organic revenue growth anticipated to be at least in line with Q2

JCDecaux SA, the number one outdoor advertising company in Europe and Asia-Pacific and the number two worldwide, published today its 2010 half year financial results.

Revenues for the six months ended 30 June 2010 were up 20.0% to €1,110.6 million compared to the same period last year. Excluding acquisitions and the impact of foreign exchange, organic revenue growth was 8.7%.

Core advertising revenues, excluding revenues related to the sale, rental and maintenance of street furniture products increased by 9.1% organically over the period. In the second quarter, consolidated revenues increased by 24.5% to €623.4 million (+11.3% on an organic basis) compared to the same period last year. Core advertising revenues increased by 11.8% organically in the second quarter. The rebound in advertising revenues continued in the second quarter across the different geographies of
the Group reflecting improved economic conditions as well as an easier comparable in Q2 2009.

Reported revenues grew faster than organic revenues mainly due to the integration of the recently acquired assets, Wall in Germany and Turkey and Titan in the UK. Reported revenues also benefitted from positive foreign exchange variations in the main currencies of the Group against the euro.
Operating margin increased by 48.2% to €246.6 million from €166.4 million in the first half of 2009.

The Group’s operating margin as a percentage of consolidated revenues was 22.2%, an increase of 420 basis points compared to the prior period (H1 2009: 18.0%), reflecting the operating leverage of the Group.

Commenting on the 2010 first half results, Jean-Charles Decaux, Chairman of the Board and co-Chief Executive Officer, said: “Our H1 2010 numbers reflect a clear improvement in organic revenues driven by our key markets – France, the United Kingdom, China and the USA – as advertisers raised their levels of spending and increasingly favoured the quality of JCDecaux’s portfolio. The assets recently acquired in Germany, Turkey and the UK also performed very well during the first six months of the year highlighting the significant potential of their further integration into JCDecaux’s commercial networks. As expected, the double-digit revenue increase led to a significant rebound in the Group’s operating margin and free cash flow. While the potential impact of austerity measures on consumption and the global economy remains unclear, short term trading conditions continue to be positive in most markets. As a consequence we anticipate for the third quarter of 2010 organic revenue growth to be at least in line with Q2 despite less favourable comparables. This, combined with continuous strict cost management and low capital expenditure, should sustain strong free cash flow generation. We believe that JCDecaux is increasingly well positioned within its industry thanks to the quality of its teams, its clear leadership in the dynamic Street Furniture and Transport advertising activities, a strong balance sheet and a well diversified geographical mix enhanced by its unique emerging market exposure.”

www.jcdecaux.com/en/