• Organic Revenue Growth: 9.7% for 2024.
• Group Revenue: Above 2019 levels.
• Operating Margin: EUR764.5 million, up 15.3% year-on-year.
• Net Income: EUR258.9 million, up 23.8% year-on-year.
• Free Cash Flow: EUR231.9 million.
• Q4 Organic Growth: 3.6%, above guidance.
• Street Furniture Revenue Growth: 8.3% for 2024.
• Transport Revenue Growth: 13.1% for 2024.
• Billboard Revenue Growth: 6.6% for 2024.
• Digital Revenue Growth: 21.7% organically, increasing its share to 39% of total revenue.
• Programmatic Revenue Growth: 45.6% in 2024, reaching EUR145.9 million.
• Net Debt: Reduced from EUR1 billion to EUR756 million.
• Dividend Proposal: EUR0.55 per share.
• Operating Margin Rate: 19.4%, up by 80bps.
• EBIT Margin: 10.2% or 9% excluding APG capital gain.
• CapEx: EUR324 million, decreased by EUR30 million from 2023.
• Debt Leverage: Less than one time operating margin.
• Liquidity: Over EUR2 billion.

• Warning! GuruFocus has detected 3 Warning Signs with JCDXF.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• JCDecaux SE (JCDXF) reported a strong organic revenue growth of 9.7% for 2024, with double-digit increases in key financial indicators.
• The company achieved a record operating margin of EUR764.5 million, growing by 15.3%, and a net income of EUR258.9 million, up by 23.8%.
• Digital revenue grew by 21.7% organically, increasing its share of total revenue from 35.3% in 2023 to 39% in 2024.
• Programmatic advertising revenue grew strongly by 45.6% in 2024, reaching EUR145.9 million, and is expected to continue growing.
• JCDecaux SE (JCDXF) plans to resume its dividend policy, recommending a dividend of EUR55 cents per share, reflecting strong financial results and a robust financial structure.

Negative Points

• The macroeconomic and geopolitical environment remains challenging, with a lack of recovery in China, which is still below 2019 levels.
• Transport revenue, although rebounding, has not yet recovered its 2019 revenue share of more than 40%, currently at 35.3%.
• The company's largest market, China, now accounts for around 10% of total revenue, down from 18% in 2019.
• Despite the conversion of some premium sites to digital, analog revenue only grew by 3.2% this year.
• The company faces competitive pressures, as evidenced by the loss of some contracts, such as the Hong Kong tramway and certain street furniture contracts in Rio de Janeiro.

Q & A Highlights

Q: Could you provide more color on the environment in China and your expectations for 2025? Also, what is driving the improvements in free cash flow, and how confident are you in achieving your 2026 target? A: The business in China is stable but not recovering significantly. We have adjusted some contracts in good faith with our partners. We hope for recovery in 2025 but can't confirm it yet. Regarding free cash flow, our revenue growth exceeded expectations, positively impacting cash flow. We are confident in achieving the EUR300 million target for 2026, driven by revenue momentum and controlled OpEx.

Q: Can you provide the revenue figures for 2024 and expectations for 2025? Also, are you seeing similar trends in the German market as your peers? A: Revenue for 2024 was EUR146 million, growing by 46%. We expect significant double-digit growth in 2025. In Germany, our growth aligns with the organic growth indicated by our peers, despite differences in contract types and election impacts.

Q: Regarding the recent renewal in Paris, does it imply a reduction in advertising space? Is this a risk for future renewals? A: The Paris contract is unusual, with a significant reduction in advertising space over the next two years. However, this does not impact our market leadership in Paris and France. Our bus shelter contracts are secure until 2028, and we maintain strong momentum with our new kiosk offerings.

Q: Could you provide an order of magnitude for the impact of contract renegotiations in China on EBITDA for 2025? Also, what is the expected norm for billboard margins? A: We can't disclose specific impacts of contract renegotiations in China, but they are significant. For billboards, we aim to bring operating margins to 15-20% through digitalization, currently at 16.6%.

Q: What contracts did you lose in 2024, and what percentage of programmatic revenue is incremental? A: We lost contracts in Rotterdam and Ireland, among others. Programmatic revenue remains around 80% incremental, consistent with previous analyses.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.