Q4 2020 Clear Channel Outdoor Holdings Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by welcome to the 2024th quarter and full year earnings Conference call for clear Channel Outdoor Holdings, Inc. All lines of them placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
And if you wish to ask a question. During this time simply press Star then the number one on your telephone keypad. If your question has been answered and you wish to remove yourself from the queue press the pound key I'll now turn the conference over to your host Eileen Mclaughlin Vice President Investor Relations. Please go ahead.
Good morning, and thank you for joining clear channel outdoor holdings, 2024th quarter and full year earnings call on the call today are really of Metro share Chief Executive Officer of clear Channel Outdoor Holdings, Inc, and Brian Coleman, Chief Financial Officer of clear Channel Outdoor Holdings, Inc, who will provide.
Overview of the fourth quarter and full year 2020 operating performance of clear Channel Outdoor Holdings, Inc, and clear channel International BV.
After the introduction and a review of our results. We'll open up the line for question and Scott Wells, Chief Executive Officer of clear channel outdoor Americas will participate in the Q&A portion of the call before we begin I'd like to remind everyone that this conference call includes forward looking statements. These statements include management's.
Patients beliefs, and projections about performance and represents management's current beliefs. There can be no assurance that management's expectations beliefs or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risks contained in our earnings press release and filings with the SEC during today's call we will provide.
Certain performance measures that do not conform to generally accepted accounting principles. We provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press release.
And the earnings conference call presentation, which can be found on the financial section of our website Investor day at clear channel Dot Com. Please note that our earnings release and the slide presentation are also available on our website and are integral to our earnings conference call. They provide a detailed breakdown of foreign exchange and non cash compensation expense items as.
The segment revenue.
Adjusted EBITDA of among other important information that reason, we ask that you view each slide as William and Brian comment on them.
So please note that the information provided on this call speaks only to management's views as of today February 25, 2021, and may no longer be accurate at the time of a replay.
With that please.
Turning to page three on the presentation and I will now turn the call over to William Apple share.
Good morning, everyone and thank you for taking the time to join today's call.
As with the past several quarterly calls.
Conducting the call remotely and respect for the all could be bad with us in case any technical issues during the call.
Like all of the view, we enthusiastically welcome the new year, we think of you going on.
To begin moving past the many impacts of COVID-19 has had on our personal lives our industry and our company.
Despite the unprecedented challenges brought on by the pandemic on the sporadic nature of the global recovery. We are heartened by the progress being made with regards to the development and distribution of the vaccine and we remain confident that our business will return to growth in 2021.
It's worth noting that the out of kind of industry has consistently of kind of two to 5% to 6% of global advertising spend and was one of the only growing traditional mediums pre COVID-19.
Our industry has proven to be very resilient to coming out of the previous downturn and we fully expect this will once again be the case as we emerge from the pandemic.
On the Tam the digital out of home sector is projected to grow at a 13% compound annual growth rate from 22 to 25. According to data published by Magna Global and December 2020.
We hope to capture a significant share of this great and we believe the actions we've taken during the past 12 months from strengthening our liquidity and implementing cost restructuring efforts.
Adjustments, we've made to our sales approaches.
The continued expansion of our digital platform and data analytics products.
In a stronger position to return to revenue growth as the recovery ultimately take hold.
As we previously noted while we continue to focus on carefully managing our expenses, we have begun to play often.
Throughout the pandemic, we have focused on strengthening our relationships with our advertising partners with an emphasis on collaborating more closely with them as they tap into the flexibility on the immediacy of our platform.
We have increasingly utilized on radar suites of solutions to help our customers understand how that's how the customers could change that would be the impact.
Instead, we have still to demonstrate our ability to deliver real time content changes, depending on the audience traffic as well as weather day part and the other relevant variables.
Overall, we are United across our organization and executing a clear strategic plan and the fully capitalizing on the fundamental strength and growth drivers of our global asset base in order to unlock shareholder value.
There are four key components that will continue to define our success now on well into the future.
And we have continued to deliver progress on across all of them.
These imperatives include first and foremost we are continuing to invest in our business, including securing premier of contracts and integrating the right technology to strengthen and expand the effectiveness of our assets.
Continue to grow on digital footprint and demonstrated the effectiveness and dynamically targeting influencing on delivering audiences on the mood.
Complementing on digital portfolio, we've added to our day to analytics capabilities and further strengthen about radar suite of tube through key partnerships in both of the U S on Europe.
And we continue to expand our integration with programmatic buying platforms.
All of these investments the range of monetizing our portfolio by delivering the data targeting and ease of AD placement that our customers increasingly appreciate.
We also finalized a new contract with the Port Authority of New York, New Jersey during the fourth quarter net.
Venture is aimed at capturing the incredible potential of our platform on technology in a very big way as we emerge from the pandemic on audience travel begins to normalize.
Second we are focused on maximizing revenue by doing what we do best partner and placement of our customers to deliver compelling advertising solutions strengthening the long term relationships and remaining agile and flexible.
In the U S. We're doubling down on a ton of direct selling initiatives and emphasizing selling creative ideas rather than specific Billboard locations.
Similarly in Europe, we are working with advertisers and agencies to develop unique network solution, which exploit the flexibility of our medium.
These approaches along with the integration of radar broadening suite of related data analytic tools are simple.
Total deeper conversations with brands, who are selling the unique strengths of our platform.
Third we have remained diligent and prudently managing our cost structure on cash flow.
These initiatives have been treated negotiating reductions in site leases.
Temporary reductions in compensation and reductions in certain discretionary spending as well as the sovereign capital expenditures.
We've also moved forward with the restructuring plan to reduce head count throughout our organization.
And fourth we are committed to maintaining ample liquidity and continuing the continually reviewing products to strengthen our balance sheet over the long term.
This includes the recent refinancing of a portion of our debt through the issuance of $1 billion of senior notes.
Which extended our maturity profile and reduce our cash interest expense going forward and Brian will provide more details following my remarks.
The strength of the asset of our focus on the remaining agile in terms of maximizing on inventory in a difficult environment as evidenced in the fourth quarter as we continue to pose the sequential improvement in our performance.
We delivered consolidated revenue of $541 million down 27 per cent compared to the prior year.
Excluding China and FX the decline of the decline would have been 25 per cent in the fourth quarter, an improvement over the third quarter.
In Americas, we delivered results ahead of our expectations in both sequential revenue and adjusted EBITDA margin.
Our performance in Europe reflected the impact of the increased mobility restrictions by the government sorts to contain the second wave of the virus.
These results were also ahead of our expectations as we work diligently to adjust the selling approaches and maximize our assets in an unprecedented and volatile climate.
Similar to the third quarter, we saw promising signs regarding the resilience of our platform in select markets, particularly in the U K, where our business significantly outperformed the roadside market.
We believe this reflects both the premium locations about roadside inventory as well as the success of our digital screens with generation of close to 70% of our fourth quarter revenue in the U K.
These results as well about progress on continuing to drive operating efficiencies of certainly encouraging given the pandemic related circumstances, we face globally.
I'd like to call out all of our employees for their outstanding commitment to our mission and their contributions to our business. During this extraordinary operating period.
We truly have a first rate talented team laying the groundwork to deliver improved results this year on beyond.
Our people have adjusted brilliantly to new ways of working and the productivity and commitment through the crisis have been outstanding.
The many steps they are taking to further strengthen our operations while the <unk>.
Resting on our approach to serving our clients during the pandemic will pay dividends well into the future.
Looking ahead, we will be facing a very tough comparable first quarter of given our strong performance in the first three months of 2020 and the continued impact of COVID-19.
This is also traditionally our smallest quarter of in terms of revenue.
Based on the information we have as of today, we expect Americas segment revenue to be down in the high 20 percentage range as compared to the prior year.
The recent mobility restrictions in European countries following mutations of the virus.
To cause significant volatility in our European segment booking activity.
Due to this for the first quarter of 2021.
Europe segment revenue to be down in the mid 30 percentage range as compared to prior year.
The Latin American bookings continued to be severely constrained as the index impact continues in all four of our markets in the region.
Turning to our fourth quarter performance in the Americas segment, while year over year revenue was down 25%. We continue to show sequential improvement, which was better than expected.
Local continues to share recovery, and we're seeing national rebounding because not only of the number of sales of Rfps, increasing the were also seeing an increase in the size of those rfps, which is certainly a good sign on.
As a reminder, in 2019 national revenue was up 9%, we have begun to gain traction with the large agencies and brands on the ability of the out of home medium to the different result.
They will however, the first the pull back because of the pandemic hit, but we're navigating to rebuilding trust with them, which bodes well as we exited the pandemic.
In the U S programmatic types of thing grew encouraging of the year over year during the fourth quarter.
Although off a small base.
We believe programmatic could grow substantially over time.
We built a robust set of SSP partners on the rich network of more than 20, DSP, providing avenue to sell our inventory alongside all the digital media.
Our early entry into programmatic relative to the rest of the out of home industry conditions as well as we work to introduce our platform and capabilities to a greater number of brands across the larger media buying universe.
Europes fourth quarter revenue adjusted for foreign exchange was down 23% while.
While our performance was ahead of our internal expectations due to the second wave of Covid and associated travel restrictions specifically on our largest market shrunk we did not deliver sequential improvement.
During the quarter, we continued to benefit from our strategic focus on roadside locations, which are kind of for about two thirds of our total European revenue and of <unk>.
Part of less affected by COVID-19, driven restrictions and the trends of the environment, which has historically accounted for just over the 10% of our European revenues.
Similar to the Americas, one encouraging outcome of it the pandemic is that in Europe, we have witnessed increased opportunities to demonstrate the flexibility immediacy and creativity of our platform from multiple standpoint, including messaging contact contract flexibility and the ability to use mobile data the better.
The specific audiences.
Moving on now to our outlook for the Americas business.
As I mentioned, we expect the Americas to be down in the high 20 percentage range as compared to the prior year.
This is slightly weaker than the fourth quarter due in part of the tough comps of 2020 as well as increased pressure on airports.
As a reminder, in last year's first quarter Americas segment revenue was up eight 5% on 2019.
The Hoffman of probably the increase audience movement weak trends that we're seeing all day to a showing of travel has actually remained close to normal with some weeks even exceeding the same week in the prior year the.
What we didn't see the back on the highways and we have no doubt advertisers will ultimately come back to the market.
The encouraging news is that similar to the fourth quarter, we are continuing to see an improvement in the volume and the size of RFP.
And it appears that advertisers are getting more confident in starting to plan for the future and the more structured manner.
The beverage vertical continues to improve with the restaurant vertical up versus prior year.
But it's also clear that advertisers of all continuing to delay decision, making on booking campaigns later, reducing our visibility.
The continuing to leverage our radar platform and expanded portfolio of partner tools to adjust to evolving travel pattern to maximize on inventory for our customers.
And this is helping to strengthen our relationships on demonstrating the unique attributes of our platform.
Turning to a review of the Americas technology initiatives, the new contracts during the quarter, we continued to invest in the right technology, including increasing our digital footprint strengthening of our data analytic capabilities and expanding in the programmatic space.
We added 17, new digital billboards in the fourth quarter.
The total of 74, new digital Billboards in 2020, giving us the total of more than 1400 digital billboards across the United States.
We also continued to strengthen our radar platform through partnerships aimed at further improving our data analytics on directly addressing our customers' needs.
We entered into a partnership with empower the.
Leading provider of BTB intent data.
And out of home industry firsts, we are integrating <unk> data with right of use audience insights demographics and location targeting low.
Advertisers can now understand how each of our display impact more than 100, b to b audience segments, making targeting the b to b customer more accessible and measurable.
Our partnership with the Bora followed the recent edition of the partnerships with tremor video on Geopolitics, which also added to the integrated suites of solutions, we deliver through radar.
As an example of the benefits of our technology investment, we leveraged our billable of presence in Florida, and our radar connect mobile re targeting capabilities to deliver of campaign for game day vodka.
The brand reported that the campaign was responsible for 65 per cent of the website traffic and achieved a picture of your rate that was twice the industry average.
As repeated case studies of shade, combining Billboard ads with mobile is far more effective than just using one or the other.
The success was such that game day Vodka was subsequently collected as an official committee of sponsor by the Tampa Bay Super Bowl host Committee.
This relationship is a very powerful example of radar connect the ability to.
Colorado of home footprint to another level through smart targeting the right audiences at the right time.
As I noted we are continuing to expand in the programmatic space.
Programmatic platform introduces ease and efficiency to the out of home sales price debt by enabling marketers to buy out of.
From inventory and audience base packaging.
Giving them a level of flexibility places to the online platforms relative to other traditional ad medium.
As Ive noticed the as I've noted on previous calls it's my firm belief that if you make something easier to buy you inevitably gremio business and.
And our growing programmatic president certainly ensure the we continue to capture of advertising dollars from other media and grow our share of the pie.
Finally, we're off to a good start with the Port authority contracts you have the inventory up and running on our platform and have begun selling add on.
Last quarter. The 12 of the ideal is the largest airport advertising contracts in the U S spanning JFK, Laguardia, and New York and see what happens.
The the addition of these tremendous airport assets brands will have the unique ability to execute campaigns that reached the vast array of consumers as they drive local fly throughout the vast metro area.
Despite the short term challenges related to pandemic, we remain confident in the growth potential of this contract.
Looking ahead in Europe, where we're seeing a range of performances within our market excuse me. The resurgence of COVID-19 cases, you variants of the virus and related government restrictions, particularly from on the U K.
As I noted earlier, we expect your revenues to be down in the mid 30 percentage range as compared to 2020.
Visibility into the remainder of the quarter continued to be impacted some advertisers pause their activity and greater clarity on the pace of the vaccination and timing of the market reopening.
In addition, advertisers of making buying decisions later in the buying in the buying cycle, which kind of lay bookings and the impact on visibility.
Having said that it is important to note that the impact of current government restrictions remains well below the impacts that we saw in March and April of last year and.
And longer term as we've continued to emphasize the resilience of the business is clear on when audiences returned to the street.
Alright of home business will rebound sandy.
At this point, we believe restrictions across our European markets will begin to lift the spring and we're working closely with our advertisers to develop campaign targeting audiences as they return.
For example, in the UK, where the roadmap to lifting of Lockdown was issued earlier. This week. The expected rebound is being marketed as the Renaissance moment, highlighting why out of home is better positioned than ever to help brands reach and engage audiences as they emerge from the restrictive stay at home orders.
Turning now to our European technology investments, we continue to make progress in utilizing smart data to help advertisers plan and adjusted that campaign.
Sales team has integrated the radar technology in Spain on the U K and advertise the interest has been very positive, particularly as we demonstrate the agility of our platform and using aggregated anonymous data to target audiences as the return to the street.
In Spain, we recently launched the radar driven campaign centered on driving consumer interests from Disney plus and types of bank.
Disney plus campaign for the mini series, one of the vision and targeted in 18 to 45 year old demographic with interesting comic cinema on video game on the.
The types of bank campaign with sort of that young I'd products and targeted 14 to 30 year olds with interest in music Museum and the other cultural locations in Barcelona.
We're also rolling out of programmatic offering in Europe, similar to the Americas, our programmatic offering will build up of time simplifying the buying process, providing us with additional revenue stream and a growing avenue to leverage our scale and technology to target new advertising partners.
Our digital footprint continues to expand in Europe, We added 545 digital displays in the fourth quarter on 244 in 2020 for a total of over 16000 screens now live.
Overall, we have of broad asset base in Europe, which is enabling us to develop and market scale digital networks with the focus on road side, which can be thought of flexibly by time of day and day of week. This aligns well with rising episodes of expectations regarding our scale on the strength of our technology and targeting the <unk>.
Audiences on the move.
I should also note that we recently secured several key contract in Europe to the.
On winning the bid to renew the range contract cover in bus shelters pullback on stopping points across the city.
And we are skilled of renewal in Spain for the Madrid, the outskirts on January the first of this year.
As you would expect the posture of it was not particularly active the big tenders given COVID-19 on several were pushed out to this year. Nevertheless, we were successful in securing these major contracts.
So in summary, we are intensely focused on executing on our strategy, which is centered on strengthening our technology.
Aim of fully monetizing our digital boards and expanding our customer base.
Notwithstanding the challenges we face the pandemic because it'll extend presented us with the number of opportunity the demonstrate the flexibility and immediacy of a platform with a broad range of advertisers as we look to deepen our relationships and accelerate our digital conversion.
It remains early in the recovery.
Our markets gradually open up we will continue to take steps to preserve our liquidity and tweaking of balancing the need to the third capital expenditures and reduce costs, while still investing in strengthening our platform.
Overall, we believe we remain in a strong position to capitalize on the audience of the ability of increases given the steps we've taken on continued to take throughout the global crisis.
And now I'd like to turn it over to Brian to discuss our fourth quarter of 2020 financial results.
Thank you William Good morning, everyone and thank you for joining our call. This morning.
As William mentioned in the past year was challenging, but we moved quickly to address our cost base strength on our liquidity and improve our financial flexibility.
As we look to build a stronger company. We've also continued to make strategic investments in critical areas aimed at strengthening and expanding the effectiveness of our assets. While also the refining our sales approach.
Taken together these initiatives and our improved cost structure places from a solid position to benefit as the worldwide economy recovers.
Moving on to the results on slide four.
Before discussing our results I want to remind everyone that during our GAAP results discussions I'll also talk about our results adjusted for foreign exchange, which is of non-GAAP measure. We believe this provides greater comparability when evaluating our performance.
Additionally, as you know we tendered our shares in clear media in April of last year. Therefore of Q4 results from 2020 do not include clear media. However, our results in Q4 and full year 2019 did include clear Media's results.
In the fourth quarter consolidated revenue decreased to 27, 4% to $541 million.
<unk> per foreign exchange revenue was down 29, 3%.
If you exclude China and adjusted for currency the decline in revenue was 24 of 5% the <unk>.
Finish was better than our internet internal expectations due to stronger than expected performance in United States and certain markets in Europe.
William mentioned this was sequentially better than the third quarter.
Consolidated net loss in the fourth quarter was $33 million compared to net income of $32 million in the fourth quarter of 2019.
Consolidated adjusted EBITDA was $101 million down 51, 1% excluding.
Excluding FX consolidated adjusted EBITDA was down $52, one per cent compared to the fourth quarter of 2019.
For the full year consolidated revenue decreased 39% to $1 9 billion.
Excluding foreign currency exchange impact consolidated revenue from 2020 declined 31, 4%.
Consolidated net loss for the full year was $600 million compared to $362 million in 2019 and.
The consolidated adjusted EBITDA for 2020, gross $120 million down 88% compared to 2019.
Excluding FX adjusted EBITDA was down 82% for the full year.
These are certainly not the results we anticipate of delivering when we started 2020, but.
But we do believe the team did an exceptional job responding to the pandemic and taking the necessary steps to adapt to the dynamics on the marketplace.
Normally during the fourth quarter earnings call of review both of the fourth quarter and full year results for each of our big business segments.
But this year for efficiency I will focus only on the fourth quarter additional.
Details of the full year results can be found on the 10-K, which was filed this morning.
Now please turn to slide five for a review of Americas fourth quarter results.
The Americas segment revenue was $258 million in the fourth quarter down 25, 3% compared to 345 million of last year.
As William noted the smart further sequential improvement compared to the previous two quarters.
Total digital revenue, which accounted for 32% of total revenue was down $29 six per cent.
Digital revenue from Billboards and street furniture was down $15 four per cent.
Digital revenue as compared to the prior year improved sequentially over the third quarter, which was down 34, 8% and print continues to perform a bit better than digital do our permed inventory.
National was down 27% and accounted for 37% of total revenue with local down slightly less of 24% accounting for 63% of revenue.
National local improved over the third quarter.
Our top performing categories on the quarter included business services, our largest category as well as beverages.
The regionally, we're still seeing strength on our small markets and weakness in the largest cities.
Direct operating and SG&A expenses were down 16, 8% due in part to lower site lease expenses related to lower revenue and renegotiated fixed site lease expense as well as lower compensation costs from lower revenue and operating cost savings initiatives.
Adjusted EBITDA was $94 million down 34, 35, 4% compared to the fourth quarter of last year with an adjusted EBITA margin of 36, 5%.
Next please turn to slide six kind of review of our performance in Europe in the fourth quarter.
Europe revenue of 268 million was down 17, 9% on excluded excluding foreign exchange revenue was down 23% in the fourth quarter.
This was a bit weaker than the performance in the third quarter as the stricter lockdowns in key European countries, including France impacted or off the fact that our results.
Our results for the quarter finished ahead of our expectations, which speaks to the execution of our team as well as the strength of our assets.
The level of restrictions vary by country.
Seven of our top 10 European markets posting sequential revenue improvements in the quarter with the majority of showing top line declines less than half of what we saw at the outset of the pandemic in last year's second quarter.
Digital accounted for 34 per cent of total revenue was down 18, 8%, excluding the impact of foreign exchange.
The adjusted direct operating SG&A expenses were down 17% compared to the fourth quarter of last year, excluding the impact of foreign exchange the.
The decline was driven primarily by lower direct operating expenses in large part due to our success in renegotiating fixed lease expenses.
Additionally, SG&A expense was down slightly due to lower compensation to the lower revenue operating cost savings initiatives and government support and wage subsidies.
And adjusted EBITDA was $35 million down 46, 9% from $65 million in the year ago period, excluding the impact of foreign exchange. This was driven by lower revenues in the period.
In August as you know, we issued senior secured notes through our indirect wholly owned subsidiary clear Channel International B V, which we prefer to see CIBC.
Net proceeds from the note offering provides incremental liquidity for our operations.
Our European segment consists of the businesses operated by CIBC and its consolidated subsidiaries.
Accordingly, the revenue for our Europe segment is the revenue for <unk> <unk>.
Europe segment adjusted EBITDA does not include an allocation of <unk> corporate expenses deducted from CCI be vs operating income and adjusted EBITDA.
As discussed above Europe, and CCI D D revenue decreased $59 million during the fourth quarter of 2020 compared to the same period of 2019, the $268 million.
After adjusting for four of 16 $5 million impact from movements in foreign exchange rates.
Europe, and CCI TV revenue decreased $75 million during the fourth quarter of 2020 compared to the same period of 2019.
So the CIB. The operating income was <unk> 8 million in the fourth quarter of 2020 compared to operating income of $38 million on the same period of 2019.
Now, let's move to slide seven and a quick review of other which includes Latin America.
As a reminder, the prior year results include clear media, which was the vesting in April of 2020.
Latin American revenue was $15 million in the fourth quarter down $11 million compared to the same period last year.
The new was down to the widespread impact of COVID-19.
Direct operating expenses in SG&A from our Latin American business of $15 million down $4 million compared to the fourth quarter in the prior year due in part to lower revenue as well as cost savings initiatives.
Latin America, adjusted EBITA was $1 million down 6 million compared to the fourth quarter and the prior year due to the impact on revenue from COVID-19, partially offset by cost savings initiatives.
Now moving to slide eight and a review of capital expenditures.
Capex totaled $31 million in the fourth quarter, the decline of $62 million compared to the prior year period as we continued to focus on preserving liquidity given the current operating conditions. Capex was also lower due to the sale of clear media, which as I mentioned occurred in April of 2020, although fourth quarter. Capex did include a small amount related to the Port authority Contra.
Net.
For the full year, Capex was $124 million down $108 million compared to the full year of 2019 again, the reduced capex for the full year was primarily due to our liquidity preservation measures on the divestiture of clear media.
Now on to slide nine.
Clear channel outdoor is consolidated cash and cash equivalents totaled 785 million assets.
As of December 31, 2020.
These plans, we expect an additional annualized pretax cost savings of approximately $5 million corporate operations.
Additionally, as I mentioned in my remarks on both of the Americas and Europe segments. We continue to work on negotiating six sightly savings and I've achieved $28 million in rent abatements in the fourth quarter for a total of $78 million a year to date.
Also we received European government support and wage subsidies in response to COVID-19 of $1 million from the fourth quarter and 60 million year to day.
The duration of severity of COVID-19 impacts continued to evolve in Romania, no as such we will consider expanding refining are implementing further changes to our existing restructuring plans and short term cost savings initiatives as circumstances warrant.
Moving on to our financial flexibility initiatives or earlier. This month was successfully completed an offering of a billion dollars of seven and three quarters senior notes to 2028.
Proceeds from the author and will be used to redeem 940 million of of nine and a quarter per cent senior notes do 2024, as well as to pay transaction fees and expenses, including the associated called premium and of crude interest the.
The timing was right for the software and giving the strength and the high yield credit market as well as our improving outlook. In addition, we've derisk on maturity profile by refinancing approximately half of our nine and a quarter per cent notes, which were unsecured and represent our next nearest material maturity.
[noise] are weighted average maturity is now five six years up from 4.9 years with a run rate cash interest savings of approximately $10 million per year due to the the lower coupon rate.
All in the hall the offerings speaks to the continued support the financial markets half of clear channel outdoor.
And reflect on improving outlook strong global assets and leading market position.
Turning the side of 11, and our outlook for the first quarter of 2021.
That was William mentioned Americas first quarter of 2021 segment revenue is expected to be down in the high 20 per cent range as compared to the prior year. This.
This is slightly weaker than the fourth quarter due in part to the tough cops with the first quarter of 2020, when revenue increased 8.5 per cent over the prior year as well as the continued impact of COVID-19.
And our Europe segment, we expect revenue to be down in the mid 30 per cent range in the first quarter historically, the first quarter of the year is the smallest quarter of for revenue the weakness just due to the resurgence of COVID-19 cases, new variant of the virus related government restrictions, particularly in France on the U K.
Well that in America bookings continued to be severely constrained and.
<unk>, we expect cash interest payments in 2021 of 362 million and 335 million of 2022.
The increase in 2021 is primarily due to the interest payments on the C. C. A D V notes issue been 2020 as well as various timing differences.
And now.
Let me turn the call back the William for his closing remarks.
Thank you Brian.
To reiterate despite the near term challenges, we continue to face and the uncertainty regarding the pace of the worldwide recovery the.
Are encouraged by the resilience of our business and the fact that infection right. There in decline and the majority of the market, which together with the vaccination programs gathering pace is leading to a real sense of optimism on.
National and local businesses in the U S continue to recover and in Europe with competent the restrictions are starting to the left and I'll pipeline strengthening.
Cause we exit the third quarter on the environment continues to improve we remain can make the two explicating against the growth strategy and deliver of year on year growth in 2021.
We believe on focusing on working closely with our customers to give them real time audience in fact, they need including a effort to expand our technology initiatives spanning a digital platform data on another day capabilities and programmatic capability put us in an even stronger position to return to the revenue growth and benefit from the operating leverage at the recovery takes hold in the.
The second quarter and beyond.
We are now of stronger and more efficient company and the way that we operate both in terms of the unique value proposition, we deliver in the manner in which we run out of business.
People who've shown that creativity and commitment and we are poised to maximize the opportunities the head.
I look forward to providing updates regarding our progress on the month ahead and the skull John Brown on myself and taking your question.
All right Huh.
Thank you at this time I would like to remind everyone. If you would like to ask a question. Please press the star than the number one on your telephone keypad. If your question has been answered and you wish to remove yourself from the queue press the pound key.
The first question comes from the line of Stephen K Hall of all Spargo.
[laughter]. Thanks, maybe first of all you have you talked to a lot of out digital sales and programmatic, we'd seen digital pricing bounce back in a couple of other advertising mediums I was wondering if you're seeing any of that yet you know digital revenue was down in the corner, but any kind of areas in the call of mine yet on that side of the business.
Yeah. Thanks, Steve I mean, it depends on the way, where you look Europe, we've seen a very strong performance bye bye digital of placing setting the remaining strong.
In the UK as I said in the area.
The full we saw seven.
70 per cent of our revenues coming from from digital in the U S. Just slightly different picture of because you know the very different format for digital Ah and I'll, just I'll sculpted kind of touch on the on what we're seeing in digital the in the U S. B.
Comprehensive on for that.
Yeah. Thanks, William I think Steve if you're looking at our notes as we break out some of our our numbers on digital you'll see the digital performance and true 1500 basis points queue for over Q3.
And I think you know I can comfortably say, we had our best programmatic wherever in queue for.
So we we do see it recovering I think you know Q1, we have a really tough comp and that'll probably you know.
<unk> will probably be flattish to a little worse off than the the performance that you see for queue for but there's definitely there's definitely recovery coming in that area and we're definitely seeing improve demand. The the drag overall on our digital does come from our our airports segment of.
Which you know has has had a tougher run of it and I'm sure we'll get into that as we talk about segments later on.
Yeah.
And then maybe just turning to margins incremental margins were really strong in the corner.
How do we think about the fixed slightly savings well those continue as revenue returns are those are those structural or are those the variable.
Well, there's there's a day see this is Brian the there's.
There's a little bit of both you know I think you know to the extent of it we have achieved abatements and and and concessions or altered the underlying the contracts than those should be expected to continue but but there's a significant amount of what I called the third wreck and as revenue start to return.
Those knows the deferred the rent expense will will start to be paid and you can see that as you look at our you know our of crude expense line rent expenses gone up the the accrued expenses gone up associated with those to per grant.
I I think I think the best way to answer your question is as follows the.
The team continues to work very diligently on on getting rid of of payments. We continue to defer payments. During this challenging times, we had a lot of success throughout the year in the quarter Fourthquarter, we of $28 million of rent abatements and that brought the the the year of the year.
The day total of Us of December 30th the 78 million. So a lot of success on that front both of them the Europe and the Americas divisions, but there's also kind of the whole deferred ran outside that's an action that's important from of liquidity management standpoint, it's reflected in our working capital, but as revenue start to return me to expect to to make the.
<unk>, the payments and and it will start to reverse the kind of in the working capital of mine.
Yeah, and then last one from me, Brian Uhm, what would make you comfortable enough to start paying down the revolver.
[laughter] Yeah. It's it's it's a good question of it's almost it's almost emotional on that you'd rather have the cash then the knot I think the way I think the right answer on that one is.
As we see the recovery start to emerge and and it's it's upward sloping trajectory is one where we don't think there'll be a setback that's probably the the the right answer from a holistic perspective, I mean from the liquidity management perspective, our ability to have the outstanding as condition of panic you know of.
Hundred and $50 million liquidity covenant. So we're somewhat indifferent just from the liquidity position, but I think from an optical and Ah you know just of good.
You know the good cash management perspective will probably keep it on our balance sheet until we see the recovery that doesn't look like it's kind of a nurse.
Yep. Thank you.
For the next question comes from the line of been Sweaty.
Morgan Stanley.
Thanks, Good morning.
When you guys look into the queue. One of them just wondering if you could give us, especially in the U S. A little more of car on sort of the trends you're seeing through the quarter of I would imagine the comp gets easier I just look in the March.
And I'm wondering if you give us any more specifics around the Billboard Transit International local et cetera, and then back to cash flow can you just remind us on the term loan or actually across the cap structure to what extent you've got floating rate that I. Just you you gave us some helpful guidance on cash.
Ash interest in 22 of just trying to figure out how kind of locked and loaded that is ex guys.
Hey, Ben Scott here I'll I'll take the first part and then and then handed the Brian to take your second part of.
So you you guys remember eight and in the U S last year, we didn't actually see a lot of softness from Covid. In Q1, we had a very strong Q1, we were up eight and a half per cent.
And actually airports had a very strong quarter of that quarter. They had house. So I had a very strong Q1 in in 19, and so when you think about the dynamic of what's going on with our with our numbers. It it was against the relatively COVID-19 free comp for us on queue, one in the U S and.
So I think I think what you're gonna see is you're gonna see that we had a couple of big deals last year that didn't come back you know census was was out in the marketplace. There are a couple of other commercial advertisers.
That that we're we're hitting the ground hard beginning of last year that have not come back this year and that that would be the primary reason in the traditional roadside business why why we'd be a bit.
Softer you know sequentially the airports business I don't think we've hit the trough yet and it I think we're getting close in terms of in terms of where that's gonna bottom out, but it is doing substantially less.
Less well than than the rest of the business I mean, I think one one way to look at that if you. If you look at our percentage of airports last year, we went from about 17% of.
In 2019, which is something we've we've disclosed in terms of our revenue mix airports last year was about 13% and it didn't really start degrading until kind of May June.
So.
That that degradation you know, it's something that the cost of them about 300 bps in our mix or four 2020, and you know I I do think we'll see that bottom out, but it has not bottomed out yet.
Got it and just kind of quickly follow up follow up if I could I'm, sorry, I think the Williams.
William started the call talking about 21 being a year of gross I guess [laughter], yeah that that really kicks. It as you get into the queue to Q3 of the calm start to get substantially easier is that the right way to think about it yeah, I I would definitely be comfortable saying, we're gonna see gross returning cute too.
Got it yeah.
Then I would just I would just add from the from a European perspective, as well P. O T O Q1 point I mean.
In Europe, we did we did talk to see some kind of an impact in in March of last year, but.
Day right to to the notes that would be the area that we have seen pretty significant income movement in the right at the start of January of this year.
With the the the second or third wave of infection hitting the you pay for on particularly.
So it's from really being a tough of cool to have the than we expected and I would say the the they're all very positive indication.
This week and beyond as we stopped cause the clear route acts of today's knocked on and that by government across Europe, and pipelines guarding to grow into into the queue to.
Yeah of again of the Greek significantly take off the comes in the queue too, but it'll say of real sign of the of the market coming back force in the in the second quarter of both of the U S on Europe.
Got it.
And the had been on the kind of of the the the floating rid of exposure questions. Our our our balance she's actually pretty straightforward. We don't have any material interest rate derivatives. So you can you can take the.
And the little over 2 billion of of you know bank facilities is floating.
It would put you a little over a third of our total debt floating interest rate I would point out, though that's the somewhat by design as we kicked out of maturities.
On our on our you know our our bonds our free payable debt. It becomes you know an important feature for us and so we have maintained a certain amount of free table of floating rate interest on that and that's about you know about a little over a third of the total balance.
Gotcha. Thank you.
Your next question comes from the line of lamps, the turns out of.
Allen.
Hi, guys. Thanks, so very much for taking the questions. Maybe just just starting as of quick follow up to the last question about returning the growth in the second quarter. It sounded like solid you are pretty confident in the U S. At that would be the case and then William I you know of.
Heard your comments, but with that also sort of of your expectation that you guys. In Europe. You will also return to go to the the second quarter and I presume. The we're talking about year over year gross the discussions about the easier comps, but how about on the sequential basis do we would we accept that I would assume of the reset button both Europe.
In the U S as as well as we think about the second quarter.
Thank loans, yeah, that's right.
We would I think we would affect the sequential improvement on me with at the back to see if you say again the software called the of 2020 gross coming back in in the second quarter of I mean, what we're seeing in Europe to the elaborate a little is that I think government check towards the.
The end of December and the major market the we operating.
<unk> got Super cautious at the at the virus you take the eight in the day so of infection rate rise.
And we buy the had.
Significant restriction go further restrictions imposed and I think now as the vaccines distributed in the market.
I hadn't country. The UK went out of it what was the 25 per cent of Seattle population vaccinated.
Nothing to see <unk>.
Level of the confidence returning inc tons of government restraint.
And we know from what we feel of back in Q3 that as of strengthening lifted.
As our audiences returned to the street for a lot of advertising come back and you know just just this week anecdotes lay in the UK day that were made by the government on on Monday, and Tuesday, Yeah. The the the volume of cold from advertisers and the sense of of pipeline filling up was it was pretty possible. So.
You know you find that the in a in a reason to be optimistic mood I would say for for the second quarter, but there's no question that Q1 of being tough that day.
Put down.
Okay, and then I just wanted to ask you about the the the cash position yeah. We we had actually been thank you and it sounds like you know.
The first quarter is kind of of the trough from an operational standpoint, but from a cash balance perspective, we at least had been thinking that that would come a couple of quarters later in part because of the timing of interest payments, but also in part because of those red squirrels and winding that you talked about earlier.
Could you talk about what what are your expectations in terms of the time day and again I know no one has a crystal ball, but.
Started at least what you're seeing now should we still be thinking about sort of like of three Q cash software or is that harder to tell of the stage.
I I I think it's still a challenge you know we are seeing positive signs of recovery and we're optimistic and and we also feel very comfortable that are you know of assets are quite resilient and we saw some of that no Q3, and and the first part of Q4.
But you know, it's it's tough to really to predict where things.