OUTFRONT Media CEO Jeremy Male was bullish on programmatic and digital billboard conversions in a talk yesterday at the Citi Global TMT West January 2020 conference. Some highlights.
Programmatic will grow.
It’s being made by advertisers. Last year’s run rate $20 millions. It wouldn’t surprise me if that were to double over the next 12 months…It’s going to be a great tailwind for the industry
2021 priorities
We want to keep digitizing our estate. We turned off growth capexp for a few months last year. We would like to get up to 200 digital boards runway. We have a balance sheet which is poised for growth in terms of any M&A.
Capital Allocation
We’ve been in the $80 million range in a normalized environment…I would expect that to continue…We’ll be looking at our dividend again…
There’s still a bid-ask spread in the acquisitions market
It’s a little premature. For any seller of assets right now the default position is “I did this in 2019″…We’re not entirely on the same page in that regard…We’re focused on some smart M&A at prices which make sense.
Digital billboard conversions are a huge opportunity
We’ve still got huge opportunity…So far we’ve digitized 3% of our plant. I sign off every digital billboard proposal that we decide to invest in. We continue to make 20-25% and sometimes more than that on these projects.
There’s still a role for static billboards as Apple demonstrates
We have a huge number of static locations…Some people don’t want to share space. Our largest advertiser prefers key locations…They want to dominate them exclusively.
Covid categories probably won’t come back till the second half of this year.
We will continue to have difficulty with venue based entertainment, movies…travel is certainly in that category although I’ve noticed AirFrance is up on some of our boards…
OUTFRONT stock an attractive value
In a way you’re almost getting our transit business for nothing in our valuation right now…Urbanization is a trend that is going on forever and will continue…We’re confident for our medium and confident for our bounce back.
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