OUTFRONT EVP/CFO Matt Siegel says there are no distressed OOH sellers right now. Here’s a selection of Siegel’s comments at the Deutsche Bank Media Internet and Telecom Conference last week.
On Acquisitions
We always do tuck ins. We put them on hold when the pandemic hit. We just closed a few…in the first quarter…they don’t really move the needle although they improve the business of each market…We rang the bell and knocked on doors after we raised capital…and said we’re ready to buy things. There were no distressed sellers…We let people know we were interested…
Reacting to the crisis.
Right away we got a bank amendment to make sure we had access to our revolver. We drew down our revolver just to make sure we had ample cash…We went to the private market…$400 million from two private equity investor, one of which joined our board. That’s a convertible preferred…it helped with our leverage metrics. Following that we did a bond offering…to shore up our liquidity…now we have the best liquidity we’ve ever had.
We went to all our transit partners and…asked for relief…We were able to turn 100% of our transit franchises into revenue shares for may…some continuing to 2021…Our real estate team went out to all of our landlords…
We addressed some of our compensation costs. We had compensation setbacks for our executives, for management, for the board, for everybody…We let about 5% of our team, our employees, go…and we furloughed a few hundred people, many in operations where we were seeing less activity…
Weak ad categories
What’s missing is certain categories…movies, entertainment, broadway and to a lesser degree retail, travel, fitness. They’re not advertising…TV, entertainment, movies were about 17% of our 2019 revenue…it’s hard to recover all that…
Why digital billboard revenues are coming back fast.
Digital US billboard was up for us in the fourth quarter…Digital is a shorter time decision…Static is printing and logistics and planning and getting someone out to put it up…A digital flip is a cheaper price point. So if you want to come in and take one flip to get your message out…it’s cheaper…
Digital billboard conversions.
Our range is 150 to 200…In 2019 we did…a little over 200…Our capexp budget is primed to get back there again.
OUTFRONT’s Canadian Business is where it tries new ideas.
For us they’re a billboard market primarily…The business is very healthy. It’s a lot of digital…We sometimes use it as…a 51st state and we can test some things there. Some of our programmatic initiatives we’ve done in Canada before the US…It’s a core asset. It’s an out of home, billboard, North American asset.
When will OUTFRONT make up ground lost to COVID
Billboard will get back to 2019 by the end of 2021…Transit – we probably need another year. That’s probably 2022 to get to where it was in 2019…
OUTFRONT’s dividend
We suspended our common dividend after the first quarter…Our dividend remains suspended…We’d like to get back to being a dividend payer. Our board is going to reevaluate that on a quarterly basis…when we do bring the dividend back we would anticipate a steeper growth curve.
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