Clear Channel Outdoor had a great 3rd quarter 2019 in the US but struggled internationally. Here’s a summary of comments from the company’s senior execs on the 3rd quarter 2019 earnings call.
William Eccleshare, CEO, Clear Channel Outdoor Holdings on the China subsidiary’s 19% drop in revenue
In the International segment the strength in our highly digitized European and Latin American markets including the UK was more than offset by the continued weakness in China’s consumer economy. You will recall that we own just over 50% of our Chinese Investment, Clear Media Limited, but consolidate 100% of its results under US GAAP.
Eccleshare on whether Clear Channel Outoor will divest China
We’re obviously looking very hard at the China business. At the moment it’s no secret that the China economy is going through a bit of a readjustment…and GDP was the slowest for 30 years last quarter. So we’re looking closely at our investments in China and looking at every option going forward. But no news at the moment.
Eccleshare on a growing digital footprint
In the United States we installed 18 new digital billboards during the quarter and now have more than 1,300 digital boards and more than 1,600 digital displays which represent approximately 32% of our Americas revenue in the third quarter. And in our international markets we installed approximately 1,000 new digital displays for a total of more than 15,000, which represented approximately 27% of international revenues during the quarter.
Brian Coleman, CFO, Clear Channel Outdoor Holdings on leverage
We are excited about the path of our business and can see a path whereby we can generate $100 million of free cashflow and have net leverage of approximately 6.5 times by the end of 2021. We believe this is achievable through growth in the business and early refinance of our 9.75% note which become callable in February 2021.
Coleman on increased corporate overhead
We’ve incurred some costs as it relates to operations in China. We’ve incurred some costs as it relates to Italy…They’re about $4 million. Hopefully we’ll wind up those investigations and those will go away.
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