Here are some of OUTFRONT CEO Jeremy Male’s comments at last weeks Citi Global TMT Conference, excerpted and analyzed by SignValue.
2025 priorities: adding digitals, reducing leverage and improving efficiency
A key area of focus we will continue to be…digital development…it’s probably the best deployment of capital in terms of bang for the buck… we’ll continue to be focused on leverage… and…general operating efficiency…
Recession risks?
It’s been coming for about 2 1/2 years… I think all we can say is… we’re seeing our national business improving a little bit. Local business seems solid.
On the importance of amending transit contract to get better terms
We’ve obviously got pre COVID contracts so if the revenues have taken a step step down we need to retain a higher share of the reduced revenue order to pay our fixed costs…the second point is that we would seek to de risk any…guaranteed payments as we go forward by making sure you have the appropriate protections…
Why OUTFRONT focuses on big markets
We are very dominant in the top 2025 DMA’s. It’s a different margin profile because you have a higher rent higher rent structure…I still think that we’ve got a long way to go with those national dollars and ultimately that… those markets can potentially grow faster than local markets
Canadian sale was at 13-15 times cashflow (EBIDTA)
The canadian sale brought in $300 million…it was 13.3 times trailing… by the time we closed because the business…went off a bit it was about 15 times.
SignValue’s Take:
The Canadian sale is a win. It puts OUTFRONT’s leverage back within its 4-5 times Debt/EBIDTA target range. The sale creates a gain of $80 million which will be dividend to shareholders later this year. Finally, the sale refocuses management on the US.
If you have questions contact Paul Wright, CEO, SignValue, paul@signvalue.com, 480-657-8400.
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