Jc decaux sa. : With disappointing outlook for the second quarter, JCDecaux stumbles on the stock market


(BFM Bourse) – The outdoor advertising display specialist expects growth in adjusted revenue in the second quarter of around 9% on a like-for-like basis, when the consensus was expecting 11%.

The expected rebound in China should boost JCDecaux’s activity this year, which has moreover justified a marked renewed optimism on the part of analysts on the value in recent months. But this favorable wind will only really be felt from the second quarter.

For the time being, over the first three months of the year, the group’s adjusted sales fell by 14% in China on a like-for-like basis, the reversal of the bad trend not having been observed until of March in this country. Nevertheless, the bank UBS was counting on an even more pronounced plunge, with a fall of 22%.

JCDecaux does not give the distribution of its income in the world’s second largest economy. But analysts estimate that China represents around 20% of the group’s turnover. The company is notably present in the airports and metros of the country’s major cities.

>> Access our exclusive graphic analyses, and enter into the confidence of the Trading Portfolio

Growth above expectations in the first quarter

More broadly, the group’s adjusted turnover increased by 5% over the first three months of the year, on a like-for-like basis, to reach 721.3 million euros. Appreciable growth in view of the declines in income recorded by several groups in the media sector (such as TF1 and M6). This increase also proves to be higher than the consensus of the design offices which were counting on an increase of 3.2%, according to UBS.

Revenues were driven in particular by digital, up 13.6% like-for-like. The transport division (posting in airports, stations, metros) grew by nearly 8% “reflecting a significant rebound in air passenger traffic and public transport network traffic”, notes the company.

If the activity of the beginning of the year is therefore generally satisfactory, it is not quite the same for the group’s forecasts for its second quarter.

Contract not renewed

For the current three months, JCDecaux has indicated that it expects like-for-like growth in adjusted revenue of around 9%, “mainly driven by strong digital growth and the gradual recovery of our business in China as commercial momentum remains strong in most geographies,” the company said.

Except that analysts expected more, UBS evoking a consensus that expected an increase of 11%.

JCDecaux explains that while domestic air traffic should have almost completed its recovery in China in the second quarter, the same will not be the case for international traffic due to the reduced number of flights to and from abroad. Above all, growth in China will also be affected by the non-renewal of a contract on international terminal 2 at Guangzhou airport (Canton) “as well as by our mutual decision to end our joint venture with the metro of Canton”, explains JCDecaux.

On the Paris Stock Exchange, the JCDecaux share suffered, yielding more than 4.6% around 11:50 a.m. and showing the second largest drop in the SBF 120.

“The slight disappointment on the second quarter forecast is sanctioned. Moreover, the announcement of the non-renewal of the contract in Canton may perhaps raise questions about the group’s competitive positioning in China. But given the group’s good dynamics in the beginning of the year, the fall of the title seems to me exaggerated”, estimates an analyst.

UBS for its part qualifies the disappointment by recalling that the group has been very cautious about its outlook from one quarter to another, for 9 quarters now.

Julien Marion – ©2023 BFM Bourse

Are you following this action?

Receive all the information about JC DECAUX SA. in real time :




Source link -84