Lamar exits Covid with fewer people and fewer displays but more digital signs and more easements.  Here are five things about Lamar that Insider noticed after reading Lamar’s 2020 10k.

1. Fewer people

Lamar comes out of Covid with 8% fewer people.  Sales reps dropped 8%.  Regional employees dropped 10%.  Corporate staff, however, increased by 8% in 2020, a surprising turn of events for a lean, decentralized company.  New programmatic and data employees?

2. Fewer displays

Digital displays increased by 3% in 2020 but other displays declined.  It’s not unusual for a company to reduce displays in a recession by terminating leases and removing signs at unproductive locations.  Displays can also shrink over time if a municipality requires a 2-4 to 1 takedown ratio in connection with a a digital sign conversion.  Insider expects Lamar displays to grow in 2021 due to acquisitions.

3. More easements.

Lamar owns land under about 1 in every 8 sites that it operates.  This is a smart long term strategy if you expect revenues to continue rising due to permit scarcity and digital conversions.  The number of Lamar easements increased by nearly 10% during 2020.  Looks for Lamar’s easements to keep growing.

4. Steady lease costs

Lease expenses ended 2020 at 20% of billboard revenue, up slightly from 19% of revenue during 2019.   Lamar has the lowest lease costs of any of the big three.  Buying all those easements helps.

5. Capital Spending down but heading up.

Capital spending dropped dramatically in 2020 as Lamar preserved cash during covid uncertainty.  Lamar’s executives, however, say that capital spending will rebound sharply in 2021.  Sean Reilly said this at a Morgan Stanley conference on March 3: “Covid has changed the landscape…At $671 million in EBIDTA that Lamar turned in last year that was more than JCD, OUTFRONT and Clear Channel Outdoor combined…we emerge from covid as one of the strongest players…year in year out we do $150 million of tuck-ins…I don’t think there’s any place that’s off-limits in terms of domestic out of home for Lamar.”

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