“We’re proud to deliver on our original guidance especially in light of some of the headwinds in the macro environment and the rapid rise in interest rates,” was how OUTFRONT CEO Jeremy Male led off the fourth quarter 2022 earnings call.  Here are the results from the OUTFRONT 4Q 22 earnings presentation, quarterly earnings release and conference call.

• OUTFRONT revenues grew 7% to $495 million in the fourth quarter of 2022.  US billboard revenues grew 7%.  Transit revenue grew 6%.  Local revenue grew 8%.  National revenue grew 5%.  Jeremy Male said New York and Miami are particularly strong markets.
• The US media billboard yield  increased by 6%  to $2,912 in the fourth quarter of 2022 versus the fourth quarter of 2021.

• Adjusted OIBDA (earnings before interest, depreciation and amortization) increased by 2% to $154 million.
• Capital expenditures totaled $23 million during the fourth quarter consisting of $6.5 million of maintenance and $17 million of growth capexp primarily for digital billboard conversions.  The company projects $90 million of capital spending during 2023 in addition to $100 million of build costs for the MTA contract.  It installed a record 330 digital billboards in 2022.
• The company did $370 million in acquisitions during 2023 with the $180 million Pacific Outdoor acquisition accounting for half the increase.  OUTFRONT CFO Matt Siegel expects deal activity to moderate in 2023.
• Debt was $654 million at December 31, 2022 a weighted average cost of debt of 5.2% and a Net Leverage Ratio (Debt less cash divided by Consolidated EBIDTA) of 5.0.  Three quarters of the company’s debt is fixed which protects it from recent interest rate rises.
• Outfront announced a quarterly dividend of $0.30.  That equates to a 6.5% annual yield on a share price of $18.57.  Matt Siegel suggested OUTFRONT may need to increase the dividend later in 2023 to stay in compliance with REIT rules.

Jeremy Male on Pricing.

We had a year of significant rate increases last year…This year we’ll be focused on our occupancy as well.

Male projects single digit growth in the first quarter of 2023

Q1 total revenues will grow in the low single digital range with billboards slightly higher and transit flattish…activity has definitely picked up over the past few weeks…

Matt Siegel says acquisitions will slow.

We remain interested in anything in our footprint…Otherwise we stick to our large market focus.  There’s plenty of opportunity for tuck-ins…our pipeline is lower than last year.

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