Q3 2021 Clear Channel Outdoor Holdings Inc Earnings Call
Ladies and gentlemen, thank you for standing by.
Welcome to clear channel outdoor holdings Incorporated's third quarter 2021 earnings conference call.
Later, you will have the opportunity to ask questions. During the question and answer session.
You May register to ask a question at any time by pressing the star and one on your telephone keypad, you may withdraw yourself from the queue by pressing the pound key.
Please note this call maybe recorded.
I'll 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 2021 third quarter earnings call on the call today are William macro Scherr, Chief Executive Officer of clear Channel Outdoor Holdings, Inc.
Brian Coleman, Chief Financial Officer of clear Channel Outdoor Holdings, Inc, who will provide an overview of third quarter 2021, the operating performance of <unk>.
Clear channel Outdoor Holdings, Inc.
Clear channel International BV after introduction and a review of our results well open up the line for questions.
<unk> 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 include forward looking statements. These statements include management's expectations beliefs and projections about performance and represents management's.
Current belief 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 measure 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.
Can be found in the financial section of our website Investor Doc 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 segment revenue adjusted EBITDA and adjusted corporate expenses.
Including the impact of share based compensation and restructuring charges among other important information.
That reason, we ask that you view each side as William and Brian comment on them also please note that the information provided on this call speaks only to management's views as of today November nine 2021 and may no longer be accurate at the time of replay with that please turn to page three of the presentation and I will now turn the call.
Over to William Alastair.
Good morning, everyone and thank you for taking the time to join today's call we.
We delivered very strong results during the third quarter, we entered the fourth quarter with continuing business momentum as we capitalize on the broad based recovery, we're seeing across our markets.
Advertisers are returning to launch new campaigns and rebuild brand awareness.
This rebound together with new advertisers discovering a medium for the first time is driving growth in many of our markets ahead of 2019 revenue levels in both our digital and traditional assets.
Our consolidated revenue in the third quarter increased 33, 3% over the prior year.
Excluding FX consolidated revenue was $519 million up 31, 8% over the prior year.
Americas revenue was $319 million up 42, 6% in line with our guidance and at 97% of 2019 revenue.
Europe revenue was $256 million up 18, 2%, which is slightly ahead of our guidance of 97% of 2019 revenue base excluding FX.
As we have highlighted on past calls we have a resilient business that has consistently demonstrated its ability to bounce back from macro disruptions.
We are clearly seeing this a car and we are very pleased with how our business is performing in the current quarter.
And it is with that confidence in our business and liquidity position that we repaid the $130 million outstanding balance of the revolving credit facility.
Coming out of Covid advertisers are embracing occupied as they recognize the enhanced capabilities, we have built into our platform.
The power of our assets is only matched by our team of talented and dedicated people and the deep relationships. They have maintained across the industry throughout the pandemic.
Given the expansion of our digital footprint and the related strategic investments in both data analytics and programmatic that we have made in our platform advertisers are now utilizing an even stronger set of tools that will allow them to expand these relationships through highly creative addressable and measurable solutions.
We're meeting our customers where they all by building on the very best features that out of home and elevating what we can do for advertisers and that brands and a compelling manner.
And so this is an exciting time for our business as we execute on our vision to expand our share of total advertising spend.
Yeah.
As we focus on delivering profitable growth. We also remain committed to reducing our overall indebtedness strengthening our balance sheet and elevating our ability to benefit from the operating leverage in our model.
As part of this effort and as momentum builds in our business. We will continue to evaluate disposition opportunities in line with our strategic goals and in the best interest of our shareholders.
Now let me provide a brief update on each of our business segments, beginning with Americas.
Based on the information we have it for the fourth quarter, we expect Americas revenue to be in the range of 360 and $317 million, which is above the $345 million. We reported in the 2019 comparable period, reflecting the strong momentum in our business as we close out the year.
In the current quarter, we're continuing to experience a notable uptick in demand with a strong volume of Rfps.
National is increasing over the prior year at a slightly faster rate than local.
And our current revenue bookings all are small and most medium sized markets are pacing above Q4 2019.
We still haven't fully rebounded in a few markets in California, including San Francisco, Although L. A which is our largest market is now above 2019.
In our larger markets. In addition to L. A New York Miami and Dallas are also exceeding 2019 levels with Houston and Boston twice behind.
I'd also highlight a promising rebound we're seeing in airports across the country.
We believe our success is attributed to our team's doing a better job accessing our customer needs and matching them to the best asset type for example at our traditional sales team is now selling all apples inventory.
We should note that this point inflation and supply chain issues are not materially impacting our business, but we are of course, keeping an eye on macro trends and how they're playing out.
Our digital Billboard business, which continues to lead the recovery is central to our long term growth strategy.
Deployed 17, new digital Billboards in the third quarter, giving us a total of more than 1500 digital billboards across the United States.
We all and we remain at the forefront in driving innovation in the out of home industry.
We built a dynamic platform that delivers mass broadcast level reach along with a sophisticated insights similar to that as digital display platforms with the ability to target consumers on the move.
Yeah.
Our radar solutions continue scaling up in opening new opportunities, including with major CPG brands.
<unk>, we were able to match individual consumer behaviors using our radar proof attribution tool with household purchase data from an IV resolution partner life ramp.
In the CPG World this advancement masses as households, rather than individuals often are the decision makers in this product category.
So we cannot measure the household impacts of exposure to our hardest hit them advertising.
For example in separate campaigns for a snack brand sports beverage and a new packaged food brand, we delivered hasso sales insights about the consumer buying these products and how out of home attracts new customers to these brands.
Radar proof also demonstrated the ability of out of home exposure to increase the lifetime value of repeat brand purchases a key metric for consumer packaged goods brands.
Further through our strategic expansion into the programmatic space, we continue to see a notable uptick in brands experimenting with programmatic and we are positioned to participate in this opportunity.
For instance, these innovations are evident in our recent campaign for Twitch and media have global to promote that second annual Streamer Bowl gaming event.
The campaign won best use of programmatic digital out of home. This year as part of Adweek annual media plan of the year Awards.
Our commitment to technology, and improving the buying process and enhancing our ability to demonstrate attribution are key drivers of performance in our Americas business and I believe Scott and his exceptional leadership team should be proud of that work in delivering such a strong performance as the business emerges from the pandemic.
Turning to our business in Europe based on the information we have today, we expect fourth quarter segment revenue to be between 335 and $350 million, which is in line with Europe's top line performance in the fourth quarter of 2019 of $349 million all amounts.
Movements in FX.
Similar to the U S. In Europe, we are demonstrating the resilience of our platform and its ability to rapidly return to growth.
As we've noted in the past about two thirds of our European revenue comes from roadside assets.
This is benefit our performance in the current environment given that we have limited exposure to the transit sector, which has of course seen a greater impact from COVID-19.
This is most evident in the U K, where we have continued to deliver revenue ahead of 2019.
For the last six months U K revenue has been ahead of 2019 led by the strength of our street furniture footprint and from the benefits of both new contracts and further development and investment in digital roadside inventory.
Overall, we are continuing to benefit from pent up demand across Europe, although orders are still coming in later than pre COVID-19.
Based on current trends out pipeline across CPG and retail our largest verticals is looking strong with fashion and beauty also looking healthy.
Our digital expansion is also a central part of our growth strategy in Europe.
We added 314 digital screens in the third quarter for a total of over 16900 screens now live including digital screens in the U K, Italy and Ireland.
And we are further elevating the value proposition of our digital footprint through the rollout of our radar suite of solutions, which is now gaining traction in all of our major European markets.
For example in Spain, we are now able to target campaigns based on online behavior. In addition to physical store visits and we are having significant success using the tool in the auto category, where brands are able to efficiently target likely car buyers.
In addition, we recently completed the launch of our programmatic offering launchpad in Italy, and we are now executing on our programmatic strategy across Europe, allowing brands to connect at the right time with consumers through multiple touch points.
<unk> real time digital out of home campaigns and control exactly when and where and at what times that ads are deployed.
We are also continuing to selectively pursue contract tenders that meet our strategic objectives in multiple markets.
In Sweden, we want a seven year contract to operate the advertising related to a public bike program in the center of Stockholm, consisting of 350 static and digital panels in prime locations further strengthening our footprint across the city.
So in summary, we are executing at a high level across every facet of our strategic plan the.
The recovery continues to gain momentum and we are seeing good progress in our business in the current quarter.
Coming out of the pandemic, we are well positioned to maximize our performance as we leverage our digital expansion and the investments, we're making in our data analytics and programmatic resources, which is broadening the universe of emphasizes we can pursue and strengthening our growth profile.
And with that let me now turn it over to Brian to discuss our third quarter 2021 financial results.
Thank you William Good morning, everyone and thank you for joining our call.
As William mentioned, we continued a strong rebound in our business as reflected in our third quarter results and outlook for the fourth quarter.
And we continue to manage our cost base, including negotiating rent abatements and some of the markets most affected by COVID-19, as well as strengthening our capital structure.
Moving on to the results on slide four.
In the third quarter consolidated revenue increased 33, 3% to $596 million, excluding FX revenue was up 31, 8%.
Consolidated net loss in the third quarter was $41 million compared to a consolidated net loss of $136 million in the prior year.
Adjusted EBITDA was $136 million in the third quarter, representing a substantial improvement over the prior year, which was $31 million.
Excluding FX adjusted EBITA was $135 million in the third quarter.
Please turn to slide five for a review of the Americas third quarter results.
The Americas segment revenue was $319 million in the third quarter up 42, 6% compared to the prior year and in line with guidance. We previously provided in July.
Revenue was up across all of our products, most notably print Billboards digital Billboards and airport displays.
Digital revenue rebounded strongly and was up 68, 4% to $115 million.
National local continued to improve with both up 43%.
Direct operating and SG&A expenses were up 15, 8%.
The increase is due in part to a 15, 3% increase in site lease expense driven by higher revenue combined with higher compensation costs driven by improvements in our operating performance.
This was partially offset by lower credit loss expense related to our recovery from COVID-19.
Segment, adjusted EBITDA was $139 million in the third quarter up 96, 7% compared to the prior year with segment adjusted EBITDA margin of 43, 6% above our guidance in Q3 2019.
Result, due to temporary savings included including site lease savings primarily related to airports as well as lower spending and a reduction in the credit loss expense.
Please turn to slide six.
This slide breaks out our Americas revenue into Billboard and other and transit.
Billboard in other which primarily includes revenue from Billboards Street furniture spectacular and wall Scapes was up 37, 6%.
Transit was up 82, 7% with airport display revenue up 88, 7% to $43 million in the third quarter.
Airport revenue was helped by the return of airline passenger traffic and the New Port Authority of New York, and New Jersey advertising and sponsorship contract.
Please turn to slide seven for a bit more detail on Americas Q3 Billboard another.
Digital revenue rebounded strongly in Q3 and was up 59, 5% to $91 million and now accounts for 33, 4% of total Billboard and other revenue non.
Non digital revenue was up 28, 7%.
Next please turn to slide eight and review of our performance in Europe.
Please note that as I comment on the percentage change from the prior year, all percentages are excluding movements and foreign exchange.
Europe revenue was $263 million in the third quarter, excluding movements in foreign exchange revenue was $256 million up 18, 2% compared to the prior year ahead of the guidance, we provided in our second quarter earnings call.
As you May remember in Q3, 2020 restrictions were lifted and the business bounce back quickly, which created tougher comps than in the second quarter.
Revenue in the third quarter was up across most of our products, primarily street furniture and retail displays and in most countries.
Digital revenue was up 39, 3% to $89 million excluding FX.
Strong performance driven in large part by the rebound in the U K.
Direct operating and SG&A expenses were up six 4% compared to the third quarter of last year.
The increase was largely driven by a $13 million increase in cost related to our restructuring plan to reduce head count as.
As a reminder.
Cost related to our restructuring plan are not included in adjusted EBITDA.
Site lease expense declined three 7% to $99 million, excluding FX driven by negotiated rent abatements.
Segment, adjusted EBITDA was $30 million, excluding movements and foreign exchange in the third quarter as compared to negative $8 million in the prior year.
Moving onto CCI BV.
Our Europe segment consists of the businesses operated by CCI D V and its consolidated subsidiaries Accordingly, the revenue for our Europe segment is the same as the revenue for <unk>.
<unk> segment adjusted EBITDA the segment profitability metric reported in our financial statements does not include an allocation of <unk> corporate expense that are deducted from CCI be these operating income and adjusted EBITDA.
<unk> revenue increased $46 million during the third quarter of 2021 compared to the same period of 2000 $20 million to $263 million.
After adjusting for a $6 million impact from movements in foreign exchange rates.
<unk> revenue increased $39 million.
CCI be the operating loss was $26 million in the third quarter of 2021 compared to $38 million in the same period of 2020.
Let's move to slide nine and a quick review of other which includes Latin America.
Note. This is the first quarter that the prior year results do not include our China business.
Latin America revenue was $15 million, excluding movements in foreign exchange rates. It was $14 million in the third quarter up $7 million compared to the same period last year.
Direct operating expense and SG&A from our Latin American business were $14 million up $1 million compared to third quarter in the prior year.
Latin America, adjusted EBITA rounded to zero in the third quarter.
Now moving to slide 10, and a review of capital expenditures.
Capital expenditures totaled $33 million in the third quarter, an increase of approximately $6 million compared to the prior year period, as we ramped up our investment in our Americas business.
Now onto slide 11.
Clear channel outdoor is consolidated cash cash equivalents totaled $600 million as of September 32021.
Our debt was $5 7 billion up 106 hundred $66 million due in large part to the refinancing of the CCW H senior notes in February and in June.
Cash paid for interest on debt of $52 million during the third quarter and $264 million year to date.
Our weighted average cost of debt was five 5% as of September 32021, 60 basis points lower than the prior year.
Additionally, as William mentioned, given our improved outlook for both our business and liquidity position.
We repaid the $130 million outstanding balance under the Companys revolving credit facility with cash on hand.
Tober 'twenty six.
Resulting in a corresponding increase in excess availability under such revolving credit facility.
Finishing with our guidance on slide 12.
Again as William noted for the fourth quarter 2021, Americas segment revenue is expected to be in the range of between 360 and $370 million.
Which is above the $345 million reported in Q4 2019.
Segment adjusted EBITDA margin is expected to return to close to Q4 2019 levels of 42, 3%.
Q4, adjusted EBITDA margin is expected to benefit from the topline improvement, but also from one time or one time items, including site lease savings and temporary cost savings.
Our Europe segment revenue is expected to be in the range of between 335 and $350 million, which is in line with Europe's revenue in Q4 2019 of $349 million.
Both the guidance and Q4 2019 consolidated revenue are based on 2020 exchange rates and exclude China.
Our consolidated Q4 revenue guidance is $715 million to $740 million, which is in line with or better than our Q4 2019 consolidated revenue of $717 million as noted above guidance. In Q4 2019 consolidated revenue are based on 2020 exchange rates and exclude China.
Additionally, we expect cash interest payments of $123 million in the fourth quarter of 2021 and $319 million in 2022.
We expect consolidated capital expenditures to be in the $150 million to $160 million range in 2021.
Lastly, we are once again, increasing our guidance for liquidity as of December 31, 2021, including unrestricted cash and availability under the company's credit facilities.
We expect liquidity of approximately $525 million to $575 million.
$50 million increase from the guidance provided in July this is reflective of our improved performance in our businesses.
The guidance also includes a near term acquisition pipeline of approximately $20 million to $25 million that we could potentially close by year end that represents small selective tuck in Billboard acquisitions in the Americas.
Please keep in mind that liquidity could vary based on timing of cash receipts <unk> payments at year end.
That concludes my formal remarks, now let me turn the call back over to William.
Thank you Brian.
I'll make the transition into the new relative executive Vice chairman at the close of the year and Scott moves to take over as CEO I am confident that we will continue to build on the momentum we're seeing in our business with leading the digital transformation of our industry innovating our platform and strengthening our ability to serve a large universe of advertisers.
We're coming out of Covid with a stronger and more dynamic platform supported by an energized worldwide team focused on growth and execution.
As we continue to invest in our technology, while carefully managing our costs, we remain focused on driving profitable growth and evaluating all avenues to delever, our balance sheet, including dispositions.
As this will be my last quarterly conference call I'd like to thank all of our investors for their support over the last few years.
It's been a pleasure to have met so many of you and so we are engaged in conversations with you regarding our industry, our company and the direction of the global advertising market.
I'd also like to record my thanks to my exceptional leadership team, who have maintained that focus you are in an extraordinary period of change both in our business and the world in which we operate.
You remain of course in very good hands with Scott and the management team as they continue to execute on our plan to fully serve as the growth potential and intrinsic value of our assets.
So a very heartfelt thanks to all of you and now let me turn over the call to up to the operator for the Q&A session.
At this time, if you would like to ask a question. Please press star one on your telephone keypad again that is star one on your telephone keypad, you may withdraw yourself from the queue by pressing the pound key.
I'll take a question from Steven Kay Hall of Wells Fargo.
Thanks, maybe first Scott you mentioned national it's growing I think are a little bit better than local do you anticipate national becoming a bigger proportion of revenue over time on particularly as you use radar and maybe have more agency buys and if that does happen does that give you any benefits to your EBITDA margins.
Thanks, Steve.
So right now we're right around 37% on national and historically, we've been closer to 40, So I think theres definitely.
Short term room to improve.
I also think that.
There is room beyond that for the reasons that you mentioned.
Our programmatic business skews, a little bit national as well and so that's a that's an opportunity to drive it.
National does tend to buy our very best assets they tend to.
Go for a lot of the premium locations and premium products. So.
Having national increase.
We'll generally help our margins, but it's not.
It's not like a big light switches.
A modest improvement as the mix moves in that direction hopefully that helps.
Yeah, and then just sticking with Americas, just wondering if you perceived any real benefit in the quarter from rent abatement activity and as we think about maybe some of those costs catching up next year any commentary you can provide on how we should think about Americas margins or operating leverage I think I'm gonna have Brian.
Speak to that but yes, we definitely have an opinion here, yeah, and I would I would answer that for the entire company because I'm not sure. The story is that much different in the Americas than it is internationally and that is you know our operating teams continue to work with our municipal partners and are in our various landlords on seeking appropriate renovate.
<unk>.
And we're going to see some of that and you know in the fourth quarter. I mean, we saw some of that in the third quarter are.
About $22 million of the $79 million year to date we.
We would expect that to continue for the next few quarters into Q4 and on albeit likely at a decreasing rate as the business starts to improve.
And so I think I think that the team is doing a good job I. There is a bit of a lag. So it may continue for a while.
It is.
Impacting our margins I think you can see both in the results and in the guidance that our margins.
They are back to.
Levels at or around.
2019, but that does reflect some of these rent abatements and temporary cost savings so.
I think that that's the right way to think about rent abatements, both in the Americas and internationally.
Great and then lastly, how are you thinking about Capex for next year, just as the business continues to improve and get back to prior levels. You were confident enough to pay down some debt in the quarter and I could capex came up so.
I was like we're sort of getting back to normal and maybe relatedly any more color on some of these additional potential tuck in Americas acquisitions that you highlighted thanks, yes.
Yes, Steve I think you hit it as our business normalizes and we are we are we do have visibility and it looks like it is as you know it is.
It is recovering.
You should expect our 2022 capex to to also go back to kind of pre COVID-19 levels. I think that's a good that's a good estimate and that number is probably 200 $225 million. It would exclude China, because we no longer have that that operation.
I think in addition to that you are seeing enough of these tuck in acquisitions that we chose to kind of break it out in our commentary.
That number is about 2000 $25 million, we do expect.
And that could close in the fourth quarter. It could it could it could go on a little little longer each one of those acquisitions takes a little bit of time in and it's you know it's difficult to predict but it was it was material enough that material enough that we wanted to break out break it out and I think the other thing is as you know it's reflective of the current environment.
The recovery has.
[noise] broad potential sellers into the market for various reasons.
The valuation gap has narrowed these are unique opportunities that we want to take advantage of but we are in a position where we can I think you've heard others talk about it so as long as long as it's a material number will continue to talk about it and I would it would be on top of our capex expectations, So really leading into these opportunities if they're available and.
I think it's a positive reflection of where we see the business.
Great. Thank you.
Thanks, Steve.
Our next question is from Cameroon Mcveigh of Morgan Stanley.
Okay.
Hey, guys. Thanks Kamran for Ben.
We'd be interested in which verticals in the U S have not fully recovered.
And then as a follow on.
Earlier in 2022 bookings looking versus pre COVID-19 growth rates right.
Sure I think both of those are U S. So I'll I'll take them. Thanks, thanks for the questions cameras.
You know on the on the verticals, we have seen good recovery.
You know pretty pretty broadly.
Lagging relative to historical norms would be areas like amusements.
See Africa and restaurants.
But theyre not lagging a ton and particularly theatrical has has really been.
<unk> been bouncing back nicely and has a really strong pipeline.
Releases that.
That bodes well and theyre using the medium very effectively so.
Those would be the ones that I'd call out on kind of not fully recovered.
As far as early 'twenty two.
It's too early for us to give out.
A full read on 2022.
But what we're seeing right now.
Early buying in in the early bookings is that we are running nicely ahead of our pre pandemic times. So.
It looks like we are positioned for a strong 2022.
Great. Thanks.
Our next question is from Lance Vitanza of Cowen.
Hi, Thanks, guys for taking the questions I have one on U S and one on Europe in the U S. The digital.
At 33% of the Billboard revenues could you remind me what's the all time high in that number and when do you expect to get back to that war, where if that is the all time, where do you think that this percentage goes in say three to five years is.
Is there a point in the future, where it's where half the business is digital or how are you thinking about that.
Yes, so lance I don't have at my fingertips, the all time high but we'll follow up with you and get you.
That information you were asking specifically about billboards I think it.
A third of revenue was about the all time high in the U S for all digital across everything I'm not 100% shirts, it's in the ballpark of what our all time high in Billboards would've been but I'm not I'm not sure. If that's exactly the highest so on the first part of your question we will follow up.
Second part of the question in terms of where it could go.
And I'm sure you get tired of hearing us talk about regulation and the regulatory constraints, but there are markets in the U S that are north of 50% I think.
We've talked about.
The U K being north of 60% in terms of in terms of digital revenue.
I think the potential for the business is quite a bit higher than the third.
The path to get to it.
Going to require more cities embracing digital signage and us getting the ability to convert.
More.
More universally because within our portfolio I think this is against something I've mentioned before we have markets that are at zero.
<unk> digital and we have markets that are you know.
In the mid fifties. So the the ranges and then of course internationally, it's even higher in the U K. So.
I think it is going to be a long term trend for us I think we're going to see that number creep up over time, but it probably won't be a sudden move it will probably just be a steady move over the years to come.
That's helpful. Thanks, and then with respect to Europe could you discuss a little bit more detailed the situation in France in particular and I apologize you probably called this out in the prepared remarks, but where did you come out versus 2019 in France and is that business profitable today.
We didn't break out the individual.
<unk> of the European market, so our coffee I cant be specific on the.
The exact numbers or I would say is that France is showing.
Strong recovery along with most of our other major European markets. So we're certainly seeing a.
Strong snapback in the in the French business and recovering or very very well.
We don't give individual.
As for the individual European markets.
We're also going through the restructuring plan in Europe some of that.
In France as well.
You should expect to see results from the restructuring plan.
Starting now in 2022, but largely and finished in 2023.
Yeah.
Thanks, very much I appreciate it thanks.
We'll take our next question from David Joyce of Barclays.
Thank you Don well first I wanted to clarify something it seems like the capex guidance for the year is a little bit below your.
Previously.
You discussed is that because of the you know the tuck ins that you just mentioned that the $20 million to $25 million being a replacement use of cash.
And then secondly is there any way you can point to your digital revenue growth.
Taking share from other radio or or share of AD budgets. Thank you.
David I'll take the first one and then I'll flip it to Scott for the for the second piece of that you're spot on it. It does look like our Capex guidance came down a little bit.
The way to think about that is when acquisitions are immaterial, which they have been largely over the past few quarters.
Or just to kind of look at Capex in.
You can kind of include that number in the Capex guidance.
Don't want to like not talk about cash needs, but I think when you get to the level that we were out today, it's more appropriate to break it out so in aggregate I think we are still within our actually have increased the range for capex and acquisitions. If you combine the two numbers, but since we broke out acquisitions.
Capex look like it would be retracted a little bit so youre thinking about it the right way I think going forward, we're just going to break the two out they are different so that's probably the best way to handle it.
And then Scott over to you for the digital question, Yes, I'm happy to take a crack at it for the U S. And then William can weigh in if there are other aspect.
Aspects of it internationally.
It is always difficult to pin down in the aggregate.
I'll add.
AD budget flows.
You get buried under anecdotes very quickly when you when you look at what goes on but a couple of things that I'd anchor on and it's really specific to the programmatic space.
Vas majority of our programmatic AD revenue is coming in via non traditional.
Agency partners that it's not predominantly coming from the agency partners in the agency divisions that buy out of hall, and so as we grow programmatic I do believe that that is a tangible way to think about us.
Capturing more of the digital AD budget space and.
It is still <unk>.
Small to a degree that youre not going to see.
Percentage points moved in that but I think it gives us a lot of headroom as.
As we think about capturing those budgets I mean as I think about the conversations we're having with advertisers. The two primary things that we're having related to other media in terms of the role that we're playing is helping people diversify diversify away from digital where they feel like they were overexposed pre COVID-19 during COVID-19 they've got EBIT.
Moreover exposed to.
Digital display and search and so forth and then the other place that I see us having dialogue about other media is around TV and us.
Playing a role.
But linear used to play.
That.
Being able to have a broad reach I don't know William if there are other aspects should call out from your perspective, no I mean, I think the direction of travel is actually as Scott described.
Europe is a little bit behind the U S. In terms of the development of programmatic platforms for for out of home.
That is the that is the direction of travel and that will enable us to I think.
Be able to take.
Take more share from digital the digital platforms.
Great. Thank you very much.
Yeah.
And once again, please press star one on your phone will go next to Jim Goss of Barrington Research.
Thank you and good luck William.
And the challenging period to manage through so congratulations on that.
Okay.
The one question I have is.
I am interested in the new advertisers.
That you've been able to secure.
It's sort of a best kept secret that's right in front of us and I'm wondering what is driving the new awareness and adoption.
Maybe you can comment on that a little bit.
Sure. So I'll I'll again take a first pass at it and then.
And if I Miss anything you should definitely definitely weigh in.
We're working on a number of fronts to bring in new advertisers, we have evolved our sales model.
Have people devoted to calling on large brands as well as calling on the.
The strategy and planning parts of agencies in a way that we historically have not been arrayed. So part of part of what's going on is that we're just covering the market.
Better and I think that continues to have upside for us not just at the large advertiser and but also with the small advertiser ends of the spectrum.
William talked about it is meeting advertisers, where we are where they are excuse me.
That has been a really important theme for us as we as we are radar sales forces. So that's sort of the first the first part of it the second part of it is that we.
We are bringing to bear new capabilities that many people don't associate without a home, particularly data and analytics.
But also the ability to trade programmatically and you put those two things together.
We're having a very contemporary conversation with advertisers relative to what out of home was having five or six years ago.
And so that that is really what's making it possible.
For us to bring in new advertisers the category, we're able to do things.
Like associate with App downloads look at look at the impact of an out of home campaign on people downloading apps, we're able to look at prescription uptake.
As a result of out of home campaigns.
The types of things, we're able to measure and that we're able to do attribution or are much richer than they were just a couple of years ago and the advertisers are very focused on data and very focused on seeing ROI.
Making it easier for them to do that so those are the kinds of things that are leading to us, bringing new advertisers with category.
Yes, the other thing I would add within Europe, as we have been putting quite an effort into working with startups and encouraging startup incentivising startup companies to come to come into the medium.
So the the way in which with a relatively low cost of entry into advertising. They can build brand awareness and drive activity through through the use of our medium.
Okay and.
<unk> just been mentioning data analytics and links to other media are these likely to remain sort of informal ties or are there couldnt be far more relationships you're establishing.
So you know to create those bonds.
When you say formal relationships, you mean with other media or what do you mean, yes, yes with other media sellers there.
Where this is happening Jim as it's happening in the data management platforms of the advertisers a lot of the time many of the advertisers have spent extraordinary amounts to build first party data on their customers.
What we're enabling is the ability to associate out of home assets in analyses that theyre doing with other media. So it is often the agency or the advertiser themselves that are doing those analytics, we're just enabling it by by offering the feet of.
The data on audiences that are exposed to Idaho.
Okay, and then one last one if I could.
Could you comment on the impact on your airport business with the U S borders reopening.
There any shape or scope of any recovery that you can.
Thanks, you too.
I mean, yes, we were seeing that just happened yesterday William was actually on the first be a flight.
That was generally open with the CEO wanted it was quite a quite a celebration.
Going into JFK.
But the.
That has been something we've been aware of for six or eight weeks you can see in our results that airports was having.
A good trajectory on their recovery already in Q3, and I would just say that that trajectory has continued into Q4 and were definitely seeing.
Advertisers get excited about the fact that international travel is happening it's.
Probably a little early too.
Declare that we're back on the international part of it given that the first flight was just yesterday.
The first flight so I shouldn't say, we're just yesterday, but.
I would say, it's a very encouraging development for sure.
Alright, thanks very much.
I'd be happy to return the call to management for concluding comments.
Great. Thank you very much and thanks, everybody for engaging the this morning and for him.
Excellent questions as ever this is.
The first time that Scott, Brian and I being in a room together for earnings but 21 months.
Just referenced the Sky's the right thing so it's been really good to be in the room together nicely set a seamless Q&A as being net working together on this.
And my final remarks again, just to thank everybody for that for that support.
You are truly excellent hands with Scott, leading the business and Brian continuing as a CFO a its a great leadership team that we have here.
I am pleased to be able to announce the kind of talking gesture that we will be issuing but ESG report in the next few weeks, which pulls together all of the really excellent work, we do around environmental and social issues.
All around our global business and therefore, it will be available on Investor Web site within the next few weeks and I commend it to you.
Quite an impressive quite impressive record of all that we do.
So with that said I will say, thank you very much indeed wish everybody all the very best and we look forward to talking to you.
Over the coming weeks and months.
This does conclude today's conference you may now disconnect your lines and everyone have a great day.
Hum.
Uh huh.
Okay.
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