Clear Channel Outdoor Revenues Down 33% in 1Q 2021

Clear Channel Outdoor revenues are beginning to come back but expenses remain stubbornly high, especially in Europe.  Here are the results from the Clear Channel Outdoor 1Q 2021 earnings release, Clear Channel Outdoor 1Q 2021 earnings presentation and conference call.

  • Revenue declined 33% to $371 million.  North America revenue was down 28% due to reductions in airport revenue and digital revenue.  European revenue was off 29%.  Other revenue was off 78% due to the sale of the company’s Clear Media venture in April 2020 and reductions in Latin America.  Clear Channel Outdoor CFO William Coleman suggested revenues will be down 10% from the prior year by the end of 2020.
  • Cash Expenses declined by 19% to $403 million.  North America and other expenses were down the most.  European expenses were down the least.   It’s taking  a long time to wring an additional $28 million of costs out of the company’s European operation.  Here’s what the earnings release says (italics ours): “In April 2021 we revised the Europe portion of our international restructuring plan, which we began in the third quarter of 2020 primarily in response to the impact of COVID-19.  We expect this plan to be substantially complete buy the end of the first quarter of 2023…”
  • Adjusted Cashflow was a negative $33 million during the first quarter of 2021 compared to positive cashflow of $52 million for the first quarter of 2020.
  • Capital Expenditures totaled $18 million during the first quarter of 2021, down from $36 million during the first quarter of 2020.

Clear Channel Outdoor Worldwide CEO William Eccleshare says North America is improving.

Entering May we are seeing a notable uptick in bookings…some key ad categories such as restaurants and amusements remain challenged due to capacity restrictions…we continue to see an increase in the number and value of RFP’s.  Categories showing particular strength include beverages, insurance and business services…We’re also beginning to see an upturn in theatrical…

Clear Channel Outdoor Americas CEO Scott Wells on Americas performance.

The more you go south and the more you go to somewhat smaller locales the more robust things are…we have about one third of our markets…trending to be ahead of 2019 this year…

Scott Wells on new Los Angeles out of home rules.

…The city planning commission had put forth their response to some of the Ordinance language that the city council had drafted.  It’s now back in the city council’s land use committee…it definitely got de-prioritized during covid.  We had felt pretty bullish the early part of last year that things were going to move through.  I do think that the city council is engaged and is serious about getting an ordinance out…

Insider’s take:  Clear Channel Outdoor performance is dragging because the company’s US airport revenues are down 60% and European expenses have been hard to cut.  A cashflow deficit means there’s little room for growth spending at least through the end of the year.  It was telling the no one on the earnings call even bothered to ask about possible acquisitions.   The company has access to the capital markets, however, and has amended borrowing agreement covenants to stay in compliance.

Clear Channel Outdoor stock declined by 13% on a day when the S&P 500 dropped 1%, Lamar was down 2% and OUTFRONT was down 3%.

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