These results and H1 2004 comparables are published under IFRS standards.
· Revenues up 5.5% to €833.7 million, organic revenues up 5.1%
· Operating margin rises 4.7% to €229.1 million
· Net income Group share rises 20.2% to €83.3 million
· Strong free cash flow at €80.6 million (+45.0%)
· Major expansion into Asian markets
Paris, 14 September 2005 - JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company in Europe and number two worldwide, today announced its results for the six months ended June 30, 2005, which confirmed a sound performance despite softening advertising conditions in some European markets.
Revenues
As reported on 27 July 2005, consolidated revenues of €833.7 million increased by 5.5% in the first half of 2005. Excluding acquisitions and the impact of foreign exchange, organic revenues increased by 5.1%. The Group’s revenue performance was driven by strong organic growth in Street Furniture and the continued improvement in Transport, which grew in double digits.
Operating Margin
The Operating Margin increased by 4.7% to €229.1 million from €218.9 million in the first half of 2004. The Group’s Operating Margin as a percentage of consolidated revenues reached 27.5%, a decrease of 20 basis points compared to the prior period (H1 2004: 27.7%), reflecting a decrease in the Street Furniture Operating Margin as a percentage of revenues and the higher contribution from the lower-margin Transport division, offsetting the increase in Billboard profitability.
· Street Furniture: Operating Margin rose by 2.7% to €191.3 million. The Operating Margin as a percentage of revenues was 42.1%, a decrease of 130 basis points compared to the same period last year. This decrease is mainly due to the challenging French advertising market, with flat advertising revenues over the period. However, strong Operating Margin improvements were recorded in Spain, Portugal, the United States and in Asia-Pacific, where recently signed Street Furniture contracts in Japan and Korea increased their contributions.
· Billboard: Operating Margin increased by 15.1% to €29.8 million. As a percentage of revenues, the Operating Margin reached 13.9%, an increase of
190 basis points compared to the first half of 2004. While revenues were flat over the period, this good performance was mainly driven by tight control on leases, particularly in France and in Spain.
· Transport: Operating Margin increased by 17.6% to €8.0 million, leading to an improvement in Operating Margin as a percentage of revenues of 10 basis points to 4.8%. This improvement was mainly driven by the first-time impact of the Chinese MediaNation acquisition to the Group’s earnings.
EBIT
EBIT increased by 1.9% to €138.3 million, up from €135.7 million in the first half of 2004. The Group’s EBIT margin reached 16.6% of consolidated revenues, down from 17.2% in the same period last year. Excluding the non-recurrent €10 million fine imposed by the French Competition Council -a decision which JCDecaux is appealing, as announced last July-, EBIT would have increased by 9.3% over the same period last year and the EBIT margin would have reached 17.8% of consolidated revenues.
Net income Group share
Net income Group share increased by 20.2% to €83.3 million, compared to
€69.3 million last year. This strong performance was driven by the increase in EBIT, the increase of equity affiliates, the positive foreign exchange variations within the financial result and the decrease of minority interests.
Capital expenditure
Net capex (acquisition of tangible and intangible assets, net of disposals of assets) was €60.1 million, compared to €66.8 million in the same period last year.
Free cash flow
The Group continued to generate strong net cash flow from operating activities, up 15.0% to €140.7 million compared to €122.4 million in the first half of 2004.
Free cash flow (operating cash flow less total tangible and intangible capital expenditure, net of disposals of assets) improved by 45.0% to €80.6 million. This strong progression reflects the decrease in net capex as well as a better monitoring of working capital.
Net debt
Most of the free cash flow was used to finance acquisitions in the first half of 2005. As a consequence, net debt (under IFRS standards) as of 30 June 2005 increased by €14.9 million to €508.1 million compared to €493.2 million as of 31 December 2004.
New business
During the first half, the Group has made very good progress in expanding its presence in Asia and increasing its exposure to the predicted higher growth rates in the region. In January, the Group moved into mainland China, becoming the exclusive partner of Airports of Shanghai for 15 years, and in April acquired MediaNation and became the N°1 Chinese outdoor company with high quality Transport contracts in major Chinese cities. More recently the Group acquired Texon, the leading Street Furniture advertising company in Hong Kong, operating long-term bus shelter contracts.
In Japan, in June, JCDecaux won the exclusive 20-year bus shelter contract of Nagoya, the fourth largest Japanese city. More recently, JCDecaux has won a
15-year advertising contract with Ito Yokado shopping malls, mainly located in the Greater Tokyo region.
Commenting on the H1 2005 results, Jean-François Decaux, Chairman of the Executive Board and Co-CEO, said:
“ Our first half 2005 results are in line with our previous comments and reflect the softening of advertising conditions in certain European markets as well as the evolution of our business mix, with a growing revenue contribution from the lower-margin Transport division.
In the last six months we have successfully expanded our footprint in Asia, where advertising markets are growing rapidly. Our latest business developments in China and Japan pave the way for a higher exposure for us in the fastest growing geographic area in the world.
For 2005, we still expect to achieve organic revenue growth of around 4%, with a slower profit growth rate at operating margin and EBIT levels, reflecting the slight first-half revenue decrease in France and the higher revenue proportion from the lower-margin Transport division.”
Next information:
Q3 2005 revenues: 26 October 2005 (before market)
Key figures
2004 revenues: €1627.3 million ; H1 2005 revenues : €833.7 million
JCDecaux is listed on the Eurolist of Euronext Paris and is part of the Euronext 100 and
FTSE4Good indexes
N°1 worldwide in street furniture (311,000 faces)
N°1 worldwide in airport advertising with 155 airports and more than 150 transport contracts
in metros, buses, trains and tramways (208,000 faces)
N°1 in Europe for billboards (197,000 faces)
716,000 advertising faces in 45 countries
Present in 3,500 cities with more than 10,000 inhabitants
