oOh!media Limited has announced its financial results for the year ended 31 December 2020, posting a 34 per cent dip in reviews to $426.5 million.
Highlights of today’s results included:
- Increased market share in Australia and New Zealand, maintaining #1 position
- Strong audience and revenue recovery in Q4CY20 – Revenues at 70 per cent of the prior comparative period vs 57 per cent in Q3
- $167 million capital raised in 1H and debt refinanced in 2H
- Further strengthened balance sheet with over $120m cash savings delivered in CY20:
- net fixed rent temporary expense savings of $63m in CY20
- capital expenditure reduction of $49m vs February 2020 guidance
- operational expenditure savings of $16m (excluding JobKeeper)
- gearing ratio (Net Debt/Underlying EBITDA) 1.8 times vs 2.6 times (31 Dec 2019)
- net debt $111m (down from $346m)
- Revenue declined by 34 per cent to $426.5m for CY20. Significant revenue recovery in Q4 across key formats (Road, Retail, Street Furniture, NZ)
- Underlying EBITDA of $63.2m in CY20 compared to $139.0m in CY19
- Underlying NPATA loss of $8.0m compared to $52.4m profit in CY19
- Reported Net Loss after Tax of $35.7m for CY20 (post AASB16)
Chief executive officer, Cathy O’Connor said oOh!’s decisive response to the COVID-19 movement restrictions across Australia and New Zealand ensured the Company managed the short term challenging conditions during the year.
“The unprecedented restrictions on people movement and resulting audience decline impacted Out of Home more severely than other media segments.
“In response, oOh! acted quickly and decisively to maintain and strengthen our competitive position. That included a $167 million equity raising, refinancing of debt facilities, negotiation with property partners to deliver $63 million in net fixed rent savings, capital expenditure reduction of $49 million and operational cost savings of $16 million (excluding JobKeeper).
“In the meantime, the Company adapted and refined our offer to advertisers, leveraging the strength of our suburban and regional network. The Company also continued to invest in our network assets, including key digital sites such as Military Road in Mosman.
“The Company remains focused on margin growth through the recovery cycle by achieving rent reductions beyond 2020, delivering structural cost savings approaching $10m annual run rate achieved at the end of CY20 and remaining disciplined on capital expenditure.
“As a result, oOh! has strengthened its capacity to manage in the current environment while remaining well positioned to leverage the audience and revenue recovery already evident across our key formats.”
The company experienced a strong recovery in revenue across key formats in the final quarter of 2020 which has continued into 2021 as people movement restrictions have eased. Overall Q4 paced at 70 per cent of Q4 2019 versus 57 per cent in Q3.
This has been most pronounced in Road, Retail, Street Furniture and New Zealand. Q4CY20 revenue in Retail and NZ was over 90 per cent of the prior corresponding quarter (Q4CY19).
The recovery has continued into 2021 with total revenue for January 2021 pacing at 80 per cent of January 2019 levels. Road, Retail, Street Furniture and NZ revenue levels for January 2021 were at close to 100 per cent of January 2019 revenue levels.
As expected, Fly and Locate continue to be impacted by significantly reduced passenger numbers and CBD audiences.
Despite the challenges caused by COVID-19, O’Connor said the longer term fundamentals for Out of Home remain positive.
“Out of Home is a highly effective medium to deliver impactful national broadcast reach in all markets during this period and beyond.
“The Company saw this through the COVID-19 pandemic with our network playing a pivotal role in public messaging for government agencies and regulatory authorities.
“Equally, the Company continued to deliver ground-breaking and award-winning campaigns for advertisers, leveraging the diversity and scale of our market leading inventory across formats and geographies.
“Our strategy remains focused on capitalising on the key structural drivers of growth in Out of Home and leveraging our diverse product portfolio, backed by data, to deliver results for advertisers.
“We are uniquely positioned to help drive the Out of Home industry’s share of overall media spend to around 10% in the next few years,” O’Connor said.
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