JCDecaux reports strong H1 2024 results, digital revenue growth surges

JCDecaux SE, the world's largest outdoor advertising company, announced its financial results for the first half of 2024. The Paris-based firm reported a significant increase in revenue and profitability, showcasing the resilience of the out-of-home (OOH) advertising sector and the company's successful digital transformation strategy. This announcement, made just four days ago, provides valuable insights into the current state of the global advertising market and the ongoing shift towards digital outdoor advertising.

According to the official press release, JCDecaux's adjusted revenue for the first half of 2024 reached €1,807.6 million, representing a 14% increase compared to the same period in 2023. This growth was primarily driven by a strong performance in digital revenue and robust trading momentum across all activities. The company's adjusted organic revenue growth, which excludes the impact of acquisitions, divestitures, and foreign exchange fluctuations, stood at an impressive 13.4% for the half-year period.

One of the most notable aspects of JCDecaux's H1 2024 performance was the substantial growth in its Digital Out of Home (DOOH) segment. DOOH revenue surged by 28.3% on a reported basis and 27.8% organically, accounting for 36.8% of the group's total revenue. This marks a significant increase from the 32.7% share recorded in the first half of 2023. The company's focus on the selective roll-out of digital screens in prime locations, coupled with ongoing investments in data and programmatic capabilities, has clearly paid dividends.

Programmatic advertising, a key driver of DOOH growth, saw particularly impressive gains. Revenue from programmatic advertising through the VIOOH supply-side platform (SSP) grew by 61.8% to reach €59.7 million, representing 9% of JCDecaux's total digital revenue. This growth underscores the increasing adoption of data-driven, dynamic advertising campaigns in the outdoor space.

Breaking down the results by business segment, all of JCDecaux's activities experienced double-digit organic growth in the first half of 2024. Street Furniture, which includes bus shelters and other urban advertising installations, grew by 10.6%. The Transport segment, covering advertising in airports and public transit systems, saw an 18.8% increase, reflecting the ongoing recovery in global travel. Billboard advertising also performed well, with 10.4% organic growth driven by the company's most digitized markets.

Geographically, JCDecaux reported positive organic growth across all regions. Asia-Pacific, the United Kingdom, Rest of Europe, and Rest of the World all achieved double-digit growth rates. The company noted a continued gradual recovery in China, although activity there remained below pre-COVID levels. This broad-based growth demonstrates the global nature of the advertising market's recovery and JCDecaux's strong positioning in key markets worldwide.

The company's financial performance also showed significant improvement. Adjusted operating margin increased by 28.7% year-on-year to €261.4 million, outpacing revenue growth and demonstrating strong operational leverage. This improvement was seen across all business segments, with Billboard showing particularly strong margin expansion due to growth in digitized markets and the rationalization of activities in France.

JCDecaux's EBIT (earnings before interest and taxes) before impairment charges saw a substantial increase, rising from €12.5 million in H1 2023 to €112.6 million in H1 2024. This improvement was driven by both the increase in operating margin and a €45.2 million capital gain from the sale of a 13.56% stake in APG|SGA, a Swiss out-of-home media company.

The company's net income Group share also showed remarkable growth, increasing by 149.6% year-on-year to reach €94.4 million. This significant improvement in profitability reflects both the recovery in the advertising market and JCDecaux's successful cost management initiatives.

Cash flow metrics also showed positive trends. Adjusted operating cash flows increased by 21.5% to €138.9 million, while adjusted free cash flow improved by €159.6 million to reach -€20.1 million. While still negative, this represents a substantial improvement and a satisfactory level given the seasonality of the business.

JCDecaux's balance sheet remains strong, with net debt decreasing to €956.8 million as of June 30, 2024, compared to €1,005.9 million at the end of 2023. The company maintains a solid liquidity position, with nearly €1.7 billion in cash and an €825 million undrawn revolving credit facility.

Looking ahead, JCDecaux provided guidance for the third quarter of 2024, expecting organic revenue growth of around 10%. This growth is anticipated to be driven by continued strong digital revenue performance across all business segments, as well as the positive impact of the Paris Olympic Games in France.

The company's results and outlook reflect broader trends in the advertising industry. The shift towards digital and programmatic advertising continues to accelerate, with advertisers seeking more targeted, flexible, and measurable outdoor campaigns. The recovery in global travel and urban mobility has also benefited the out-of-home sector, particularly in transport hubs and city centers.

JCDecaux's performance also underscores the resilience of out-of-home advertising in an increasingly fragmented media landscape. As traditional media channels face challenges from digital platforms, outdoor advertising has successfully adapted by integrating digital technologies and data-driven approaches.

The company's commitment to sustainability was also highlighted in the results announcement. JCDecaux reaffirmed its position as an industry leader in environmental performance, with best-in-class ESG ratings and its inclusion on the CDP A List. The company's climate strategy, aiming for Net Zero Carbon by 2050 across scopes 1, 2, and 3, has been approved by the Science Based Targets initiative (SBTi), demonstrating a commitment to addressing climate change that goes beyond mere rhetoric.

JCDecaux's results come at a time when the global advertising market is showing signs of recovery after the disruptions caused by the COVID-19 pandemic. According to recent industry reports, outdoor advertising has been one of the fastest-recovering segments of the advertising market. The ability to reach consumers as they return to public spaces and the increasing integration of digital technologies have made OOH advertising an attractive option for brands looking to reconnect with their audiences.

The company's strong performance in programmatic advertising is particularly noteworthy. Programmatic OOH allows advertisers to buy and place ads in real-time, using data to target specific audiences and optimize campaigns. This approach brings the efficiency and measurability of digital advertising to the physical world, making outdoor advertising more attractive to a wider range of advertisers.

JCDecaux's results also reflect the ongoing importance of innovation in the advertising industry. The company's investments in digital screens, data capabilities, and programmatic platforms have positioned it at the forefront of the OOH sector's digital transformation. This focus on technology and innovation has allowed JCDecaux to offer advertisers more dynamic, interactive, and measurable campaigns, increasing the value proposition of outdoor advertising.

The geographic diversity of JCDecaux's growth is another key takeaway from the results. While the recovery in China remains gradual, strong performance in other regions demonstrates the company's ability to capitalize on varying rates of economic recovery and advertising market growth around the world. This global footprint provides a degree of resilience to regional economic fluctuations and regulatory changes.

In conclusion, JCDecaux's first half 2024 results paint a picture of a company successfully navigating the changing landscape of outdoor advertising. By embracing digital technologies, focusing on operational efficiency, and maintaining a global presence, JCDecaux has positioned itself for continued growth as the advertising market recovers and evolves. The company's performance offers insights not just into its own operations, but into broader trends shaping the future of advertising and urban communications.

Key facts

Adjusted revenue increased by 14% to €1,807.6 million

Adjusted organic revenue growth of 13.4%

Digital Out of Home (DOOH) revenue grew by 28.3%, accounting for 36.8% of total revenue

Programmatic advertising revenue increased by 61.8% to €59.7 million

Adjusted operating margin rose by 28.7% to €261.4 million

EBIT before impairment improved from €12.5 million to €112.6 million

Net income Group share grew by 149.6% to €94.4 million

Adjusted free cash flow improved by €159.6 million to -€20.1 million

Net debt decreased to €956.8 million

Q3 2024 organic revenue growth expected to be around 10%