Will JCDecaux Also Grow in 2019?

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JCDecaux is one of the big names in the outdoor advertising world. News about their impacts on the industry emerge nearly every day. Today, we take a look at some of the recent occurrences and some important events for the company in 2018. This way, we hopefully get an idea where the company is headed in 2019.

2018 was a big year for JCDecaux

Just a few weeks ago, we could finally take a peek at how JCDecaux did in 2018 as we got the full-year report. Below, we highlight only some of the more notable headlines.

  • 2018 was another year of record revenue at €3,618.5 million driven by a 28.4% revenue up tick from JCDecaux’s prime DOOH media assets and by a 16.4% organic growth rate in Asia-Pacific.
  • In 2018, adjusted free cash flow was €150.4 million compared to €142.9 million in 2017.
  • Dividend per share for the year 2018 was proposed at €0.58. That’s up by 3.6% over 2017.
  • Adjusted organic revenue growth expected to be up above 5% in Q1 2019.

Those were only a few points, but it is clear that the results are primarily positive. For the complete rundown on results, in case you look for something in particular, check out the full release. Included are quite a few additional details about the company besides the numbers, in particular the reasoning behind them and the causes which lead to them.

What does last year’s JCDecaux’s merger mean for the industry?

The past year was very important for JCDecaux as the company merged with APN Outdoor, Australia's leading Out-of-Home company. Alongside OOH Media taking over Adshel, this merger is one of the big ones. Although, the perception for the consumer is minimal, the changes are colossal for the industry: two large brands are gone, there is less competition; to name a few.

This merger granted JCDecaux more access to airports and public transportation. Nevertheless, although this merger seems to imply JCDecaux will become an even bigger threat to smaller outdoor operators, it doesn’t have to be the case. Smaller businesses adapt to keep up.

“It’s easy to think the big guys are going to stomp on you, but if you keep servicing clients and shopping centres correctly, you might pick up businesses from companies not treating them so well,” the COO of Shopper Media says. Of course, this is not a statement about large companies intentionally mistreating their clients. There is more detail to the matter! If you’re curious to see the perspective of the small guy in the tank with the big sharks like JCDecaux, check out this detailed article over at Mumbrella.com.

JCDecaux renews and extends street furniture contract in Bilbao

In February, JCDecaux announced that, following a competitive tender, its Spanish subsidiary has won the 15-year analogue and digital advertising street furniture contract for the city of Bilbao. The contract covers the installation, cleaning and maintenance of 254 ad bus shelters. Among those bus shelters are 32 digital screens, 44 ad smart clocks and 54 City Information Panels (CIP) of which 10 are digital screens.

These innovative bus shelters will provide information about local transportation and cultural activities. They will also feature USB charging ports, announcements for the visually impaired, Wi-Fi and more. This contract certainly further aids the status of JCDecaux as the number one worldwide company in street furniture. So far, they have 543,050 advertising panels.

Toilet contracts with San Francisco going down the drain?

Good news can’t last forever and even JCDecaux faces bad news here and there. The Board of Supervisors budget committee in San Francisco recently declined to extend the city's advertising kiosk and public toilet contract with the company. A pact, supervisor Aaron Peskin criticized as "arguably one of the worst contracts this city has ever entered into."

One of the issues brought up was that JCDecaux's deal mandates it pay the city a maximum of 7% of its ad revenue. This is a significantly lower cut than the city's other advertising deals. Titan Outdoor, for example, pays 65% of its ad revenue to the city.

There is also the issue with JCDeaux's toilets allegedly having a long history of poor maintenance and malfunction. They appeare to be frequently used by drug-users, sex workers, or people using them as informal homes. This stopped once the city initiated the "Pit Stop" program in which nonprofit workers attended the toilets. In the end, however, it was said that it might be better for the city to stop privatizing their public toilets, but rather do it themselves.

JCDecaux’s high NYC lobbying spend

From West Coast to East Coast. JCDecaux took over a $1 billion franchise of the NYC bus shelters, newsstands, and automated public toilets. JCDecaux has 3,793 bus shelters and 346 newsstands in the city.

As a result, JCDecaux became the fourth largest company in Outside Lobbying spend in NYC in 2018. While inside lobbying describes efforts to influence legislation or rule-making by directly contacting legislators, outside lobbying includes attempts to mobilize citizens outside of the policymaking community to prompt them to pressure public officials.

JCDecaux directed a total of $464 million to 3 lobby firms in order to prevent their competition from 'encroaching', i.e. building in front of shelters and block visibility. Read more here on all the details on how JCDecaux spend their funds in this matter.

As JCDecaux continues to make bold decisions, we eagerly await to see what’s next. It is certainly one of the faces of this industry. And it appears to be a great place to work, according to the Great Place to Work label. Still, all people and companies have their ups and downs, and JCDecaux is no different, as we’ve seen.