Clear Channel Outdoor Revenue Down 27% in 4Q 2020

An uptick in Covid cases has taken some of the wind out of Clear Channel Outdoor’s recovery.  Here are the results from the company’s 4th quarter 2020 earnings release and conference call.

  • Total revenue was down 27% to $541 million as an uptick in covid cases delayed the company’s recovery.  Americas revenue was down 25%.  Europe was down 18%.  Other revenues were down 80% due to the sale of the company’s Clear Media unit in China and a 42% decrease in revenue in Latin America.
  • Total expenses were down 18% to $440 million due to lower lease costs and personnel costs.  The company has a hiring freeze and is reducing head counts.  Expenses in Europe have been sticky.  They declined only 11% in the fourth quarter.
  • Total EBIDTA was down 51% to $101 million because expenses haven’t dropped as fast as revenues.
  • For the first quarter of 2021 the company expects to revenues to be down at least 20% in the Americas and 30% in Europe due to a resurgence of covid 19 cases.
  • The company spent $30 million on capex in the fourth quarter of 2020 down from $92 million in the fourth quarter of 2019 as discretionary spending was put on hold.  Clear Channel Outdoor deployed 17 new digital billboards in the fourth quarter.

CFO Brian Coleman said the company’s expense cuts in Europe have been delayed.

In September we announced restructuring plans throughout our organization.  In Americas we completed our restructuring plans in the fourth quarter and we expect annualized pretax cost savings of $7 million to begin in 2021.  However our plans for Europe have been delayed due to the evolving nature of covid 19 impacts and the complexity of executing the plan.  We now expect to substantially complete the plan by the first half of 2021…in addition to these plans we expect an additional annualized pretax cost savings of approximately $5 million in our corporate operations.

Worldwide CEO William Eccleshare said assets sales will be postponed until the economy improves.

We certainly remain open…The strategy that we talked about a year ago is focusing on our higher margin US business…But I still believe the valuation gap remains pretty significant and that now would not be the time to look at any significant M&A activity.

Insider’s take:  A surge in covid cases has pushed back Clear Channel Outdoor’s recovery and the company’s plan to cut $32 million in expenses is taking longer than anticipated due to delays in Europe.  The market was unimpressed.  Clear Channel Outdoor declined 12.5% while the S&P 500 declined 2.5%, Lamar declined 3.7% and OUTFRONT declined 5.5%.

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