Clear Channel Outdoor Revenue Up 28% in 2Q 2022 but Europe Sale Uncertain

Revenues grew nicely in the second quarter but Clear Channel Outdoor is backing away from the sale of all European assets.  Here are the results of the  2Q 2022  Clear Channel Outdoor earnings release, earnings presentation and conference call.

  • Clear Channel Outdoor Revenue increased by  28% to $678 million in 2Q 2022.  Americas revenue grew 27% due to an increase in airport displays and billboards.  European revenue grew 28%.  Here are the results of the Americas group.

  • Adjusted EBIDTA increased by 74% to $169 million during the second quarter of 2022.
  • Capital expenditures totaled $45 million in the second quarter of 2022.  American accounted for two. thirds of spending as the company added 29 new digital billboards.
  • Total Debt was $5.5 billion at June 30, 2022.  The weighted average cost of debt was 6%.  Leverage (Total Debt/Cashflow) was a high 9.7 times.  Billboard Insider considers Total Debt/Cashflow of 6:1 or less as sustainable for an out of home company.
  • Clear Channel Outdoor is pulling back from a sale of European assets.  The earnings release says: “Our Board of Directors has authorized the Company to focus the strategic review on the potential disposal of certain of our lower-margin European assets (and/or other European assets of lower priority to our European business on the whole), while retaining, for now, our higher-margin European assets, which are performing well. Accordingly, the Company is currently focused on strategic dialogues with potential acquirers of such lower-margin and/or lower-priority European assets.” 
Clear Channel Outdoor CEO Scott Wells
  • Clear Channel CEO Scott Wells discussed Europe on the earnings call:  “Since the time we began the strategic review, there has been a negative shift in the environment regarding transactions and for obtaining related financing which has raised hurdles to transact for the whole of our European business…The interactions we’ve had with buyers to-date have convinced us that a single transaction…may not be ideal path to take to accomplish our goals.  In light of these developments we are focusing on strategic dialogue with potential acquirers regarding the disposition of certain of our lower margin or lower priority European assets.  If we are able to convince those types of sales we expect that our remaining European perimeter will have substantially higher EBITDA margins…than our current European business…and to be more able to meet its own cash needs.  Also, if we are able to complete those types of sales we think that our remaining European perimeter could be helpful in bringing our leverage down over time…We cannot guarantee the timing or success of our efforts to dispose of those lower margin or lower priority assets…

Billboard Insider’s take:  Not good.  International distractions continue and Europe will demand a portion of Clear Channel Outdoor’s constrained capital budget.  The market was disappointed.  Clear Channel stock finished the day down 9% on a day when the S&P was down 0.4%, Lamar was down 0.2% and OUTFRONT was up 0.4%.

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