Clear Channel Outdoor Americas CEO Scott Wells and CFO Brian Coleman were optimistic about the future in their comments at the 29th Annual Deautsche Bank Leveraged Finance Conference. The highlights:
Wells is optimistic on the future
I’m excited about the future of out of home. I don’t think there’s a medium that can touch us…it’s the last mass reach medium…We’ve made huge strides in digitizing our business. Covid in some ways helped us in that because it forced us to accelerate…in terms of getting electronic contracts, bar coded inventory…
Wells on US out of home revenue growth.
GDP plus is definitely what we think is the right way to think about this business…We definitely see the industry growing robustly in 2022 and I think 11% would count as a robust number.
Wells on markets doing well
The recovery is robust in many of our big markets. We definitely have some markets that are recovering a little less quickly. San Francisco has been a challenge…Chicago has been a challenge. But we’ve seen lots of strength in LA, lots of strength in New York. Our southern and western assets – many of them didn’t skip a beat during covid and are…continuing to be strong…in the airport space the return of travelers has been good as well.
Coleman on permanent expense cuts.
We did a restructuring in the US to save $7 million a year…We cut corporate costs $5 million a year on an annualized basis…And we entered into a longer tail European restructuring process which is expected to generate $23 million or annualized savings. US and the corporate are largely done. Europe will take a little while because of the process you have to go through…we expect to see some of those in 2022. They likely won’t be completed until 2023. Those are more permanent.
Coleman on deleveraging
There are no plans to issue equity…The way to think about deleveraging is first lets see the recovery of the business…let’s also take a look on what happens on the M&A front. As the businesses recover valuation gaps are continuing to close. We’re starting to see some activity in the US and Europe. The tone of discussions in the M&A marketplace has improved…let’s see what happens over the next 12-18 months…
Coleman on Capexp
In 2020 we’ve given guidance of $200-210 million…When you’re looking at a baseline that’s a good number to think about. In 2021 we’ve talked about capexp being in the $165-175 million range…we’re likely to approach the higher end of that range. Opportunities are there…In 2022…you can expect us to get back to normal levels…$200-210 million…
Wells on M&A
The door is opening pretty robustly here in the States. We’ve seen a couple of transactions – Stott and Lamar in California and then the Adams transaction that was just announced a couple weeks ago…They’re indicative of what we’re seeing…of the door being open. Many of the smaller operators didn’t get hit hard by covid…You’ve seen the recovery start to take hold…the key thing is getting buyers confident on a trajectory and in the US I just think we are a little bit farther ahead than we are across the world…
Billboard Insider’s take: Looks like 2022 will be a return to normal for Clear Channel Outdoor capexp. Billboard Insider expects some asset sales will be required to get the company’s leverage down to a sustainable level.
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