Clear Channel Outdoor Holdings, Inc. Q3 FY2024 earnings call

• Revenue growth: Consolidated revenue in line with guidance, growth across all segments. - Initiatives: Leveraging technology and sales teams in US; partnership with Circana; success in pharma vertical; award of NY MTA 15-year roadside contract. - Cash generation: AFFO exceeded discretionary CapEx in Q3, expects same in Q4 and improvement in 2025. - M&A: Sale of Europe-North ongoing; JCDecaux terminated acquisition of Spanish business; LatAm sale process ongoing.

Consolidated revenue for the third quarter was $559 million, a 6.1% increase. Excluding foreign exchange rates, it was up 5.7%. Americas segment: revenue $293 million, up 5%. Digital revenue (36.1% of Americas revenue) was up 8.4% to $106 million. National sales (36.3% of Americas revenue) up 8.4% on a comparable basis. Local sales (63.7% of Americas revenue) up 3.2% on a comparable basis. Segment adjusted EBITDA $128 million, up 5.8%, margin 43.8%. Airports: revenue $82 million, up 9%. Digital revenue (51.1% of Airports revenue) up 0.8% to $42 million. National sales (58.6% of Airports revenue) up 8.7% on a comparable basis. Local sales (41.4% of Airports revenue) up 9.3% on a comparable basis. Segment adjusted EBITDA $17 million, up 9%, margin 20.6%. Europe-North: revenue $162 million, up 8.6% (excluding foreign exchange). Digital (58.1% of Europe-North total revenue) up 12.4% to $94 million. Segment adjusted EBITDA down 4.5% to $27 million, margin 16.7%. CCIBV: revenue $166 million, up 8.1% (5.4% excluding foreign exchange impact). Operating income $5 million vs $9 million prior year.

Fourth quarter: Consolidated revenue $628M - $653M (down 1% to up 3% y/y). Americas revenue $308M - $318M. Airports revenue $111M - $116M. Europe-North revenue $185M - $195M. Full year 2024: Consolidated revenue $2.222B - $2.247B (4% - 6% y/y). Americas revenue $1.141B - $1.151B. Airports revenue $356M - $361M. Europe-North revenue $648M - $658M. Adjusted EBITDA $560M - $580M. AFFO $90M - $105M. CapEx $130M - $140M.

Regulatory hurdles affecting M&A deals (e.g., JCDecaux terminating acquisition of Spanish business due to regulatory issues). Market uncertainty in national ad spend environment, competitive landscape, and potential macroeconomic factors.

Q: Color on NY MTA roadside contract and drivers of improved national ad spend A: Scott Wells discussed strategic rationale of NY MTA contract for expanded footprint, and national ad spend driven by CPG, pharma, telecom, and mix of strategic efforts and math.

Q: Balance sheet and free cash flow impact on debt reduction A: David Sailer mentioned AFFO covering discretionary CapEx, and considering bond pricing and strategic initiatives for debt paydown Q: Europe-North cost breakdown and margin impact A: Justin Cochrane explained higher costs due to site lease, property taxes, and some one-offs, with underlying business margin similar to prior year Q: Cancellations and early 2025 commitments, national ad spend cross pressure A: Scott Wells stated no notable cancellation uptick, early 2025 commitments encouraging, and focus on tapping national ad spend by leveraging relationships in various verticals Q: Airport digital growth and NY MTA inventory cannibalization A: Scott Wells explained airport digital growth due to advertiser preference and campaign mix, and NY MTA inventory being largely incremental with no significant cannibalization