JCDecaux: Airports to follow other channels on road to recovery
As the COVID-19 pandemic swept across Asia and began to hit Europe in the first three months of the year, revenue for JCDecaux’s Transport division declined sharply on falling passenger traffic. And while the outdoor advertising company sounds an upbeat note about recovery after the crisis, it admits that the airports channel will take longer to rebound. Liam Coleman reports.
JCDecaux is anticipating its airport advertising business will take longer to rebound from the impact of COVID-19 than its Street Furniture and Billboard divisions. That was one of the key messages from the advertising group’s first quarter results announcement recently.
Adjusted revenue for the Transport division for the first three months of 2020 was down -23.8% year-on-year at €281.7 million. JCDecaux said this reflected the sharp decline in both airport passenger traffic and public transport commuting due to the COVID-19 pandemic.
The company’s European Transport business posted a double-digit decline in revenue for the quarter, Asia Pacific was “down significantly” in the period, while North America was up and the Rest of the World slightly down.
The company’s total revenue across its three divisions (Street Furniture, Transport and Billboard) was €723.6 million, a -13.9% year-on-year decline.
“Transport was the most impacted segment with a -23.8% organic revenue decline mainly due to a significant passenger traffic decrease in both airport and transit systems and to a material drop in advertising sales in Asia Pacific with China being the first country to be affected by this pandemic,” says JCDecaux Chairman of the Executive Board and Co-CEO Jean-François Decaux.
Jean-François Decaux: Depth or duration of the COVID-19 impact remains unclear
He adds: “We now expect the negative impact of COVID-19 on our business to significantly increase in the short term but it is not possible to quantify its depth or duration of the impact.”
On how the months ahead might look, Decaux says: “The lockdown measures are reminding billions of people around the world that we all need to be out of home in order to live a normal life with friends and families. For this reason, we expect out of home media to benefit from the reopening of countries and cities with Street Furniture and Billboard advertising rebounding faster than Transport, which will be affected by social distancing, while airport advertising will take longer to recover to pre-COVID-19 level.”
The outdoor advertising company says the shape of a partial recovery is illustrated by the booking of street furniture and billboard campaigns in France, where lockdown started to ease in the second week of May. It has also started to see an improvement across its business in China as domestic air travel resumes and travel within cities reached more than 60% of the level it was at before the crisis.
As reported, JCDecaux had been in discussions with its airport partners about securing rent relief. “We have initiated discussions with all airports, cities and transport authorities around the world and we welcome the recent decision, among others, from the Houston City Council to waive minimum annual guarantees for airport concessionaires until December 2021,” Decaux says.
Looking to the out of home landscape after the pandemic, Decaux concludes: “We believe we are well-positioned to outperform the advertising market and increase our leadership position in the outdoor advertising industry through profitable market share gains after the crisis.”
JCDecaux has used its network to promote public health messaging across travel centres (Macau pictured)
The Moodie Davitt eZine
Issue 280 | 3 June 2020
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