“During the fourth quarter our America segment delivered record revenue of $311 million representing an increase of 4.1% driven by strength in digital and local sales” was how Clear Channel Outdoor CEO Scott Wells introduced the company’s 4Q 2024 financials. Here are the results of the CCO 4Q 2024 earnings release, CCO 4Q 2024earnings presentation and conference call, analyzed and sponsored by SignValue.
- Consolidated revenue increased 2.6% to $426 million in 4Q The company projects consolidated revenue for all of 2025 to grow by 4-7% to $1.56-1.61 billion.
- Adjusted EBIDTA increased by 2.5% to $145 million in 4Q 2024. The company projects adjusted EBIDTA to grow by 3-6% to $490-505 million for all of 2025.
- Capital expenditures totaled $35 million for 4Q 24. Capexp is projected at $75-85 million for all of 2025.
- Total debt was $5.6 billion at December 31, 2024 with a weighted average cost of 7.4%. The pending $626 million sale of the company’s Europe North assets will reduce total debt but probably not result in a huge decrease in Total Debt to Cashflow (EBIDTA). Total Debt to Cashflow (EBIDTA) was a high 12.5 times based on the trailing twelve months ended December 31, 2024. Looks to SignValue like Total Debt/Cashflow will be in excess of 10 times even if 100% of the Europe North sale proceeds are applied against debt.
- Here’s a breakout of Clear Channel Outdoor’s America performance. Revenue increased 4.1% but cashflow (Segment Adjusted EBIDTA) was up only 0.7%. Costs were up due to an increased headcount, increased site lease expense from the MTA billboard contract and high production and maintenance costs.
CEO Scott Wells gives an update on asset sales
Our recent agreement to sell our Europe North segment as well as the recent sale of most of our businesses in Latin America marks significant progress in the execution of our plan to optimize our portfolio and focus on our higher margin U.S. business. To-date we’ve closed deals amounting to approximately $120 million and agreed to sell our Europe North segment for $625M. We are also optimistic about our ability to divest our businesses in Spain and Brazil given their strong performance..we anticipate prioritizing the use of sales proceeds after retiring the $375M in CCIVB term loans to retire the most advantageous debt in our stack as permitted in our agreements to reduce cash interest.
Wells suggests there will be some cost cutting after the international spinoffs are complete
Once we complete the Europe North divestiture, we will be in a position to take steps to further address our cost structure through zero-based budgeting as we prioritize our spending to drive growth in our America and airport segments…
Wells says Clear Channel Outdoor is seeking joint ventures which generate cashflow without requiring capital
I think we’re a really interesting and really credible partner for people who want to invest in this space and that there might be some creative things we can do along those lines to create opportunities for growth maybe not using our capital but maybe with us benefiting…
SignValue’s take: Disappointing that Clear Channel Americas cashflow doesn’t go up as fast as revenues. Whatever the reason – more sales staff, the MTA contract – we think some hard cost decisions need to be made. We wonder if Wells is signaling that CCO would like to do more deals where it manages signs for other people in exchange for a fee or a share of the upside. Managed signs won’t have the same value as owned signs, but maybe the extra cash flow can help. Clear Channel Outdoor dropped 2.2% on a day when Lamar was up 1.4%, OUTFRONT was up 1%, the S&P 500 was down 0.5% and JCDecaux was down 20%.
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