(News Bulletin 247) – The number one in outdoor advertising expects moderate growth in adjusted revenue for the first quarter of 2023. In China, the company anticipates a double-digit decline in revenue.

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JCDecaux will not immediately grasp the rebound in growth in China. This is what emerges from the forecasts for the first quarter of 2023 of the world number one in outdoor advertising, which also published its annual results for 2022 on Thursday.

The group is relatively cautious for the first three months of the year. JCDecaux thus anticipates an increase excluding currency and scope effects in its adjusted revenue of 2.5%, compared to, for comparison, 5.1% in the fourth quarter of 2022.

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This forecast includes a double-digit drop in revenues in China for the period, the return to normal mobility in the country having only been observed from March, underlines the company.

“The inflection point is in March (…) especially after Chinese New Year. We can clearly see that activity has returned to normality, the Shanghai metro has returned to its 14 million passengers per day, domestic airports have left The economic action as a whole has resumed, which allows our advertisers to return to our activities, which is very good news”, explained this Thursday on BFM Business Jean-Charles Decaux, chairman of the management board and co- CEO of JCDecaux.

Profitability below expectations

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

The recovery in China due to the economic reopening of the country should gradually boost the group’s activity during the year, which has also led several research departments to revise their forecasts upwards for JCDecaux. But it will therefore be necessary to wait a few months to observe this improvement in the company’s accounts.

For TP ICAP Midcap, JCDecaux should really benefit from sanitary standardization in the country from the second quarter of 2023.

Regarding its 2022 results, the group had already published its turnover, which in adjusted data increased by 16.6% excluding currency and scope effects.

Adjusted operating margin stood at 603 million euros, up 43% year-on-year. However, it is lower than the consensus of analysts quoted by UBS, which stood at 615 million euros.

No dividend payment

The group is back in the green in terms of net income group share, which stands at 132.1 million euros against a loss of 14.5 million euros in 2021.

The company has also decided not to propose a dividend payment for the 2022 financial year at its next general meeting.

On the Paris Stock Exchange, JCDecaux shares are under pressure, falling 11.3% around 11 a.m. “The margin and therefore the operating leverage for 2022 are a bit disappointing, as is the growth outlook for the first quarter. The group nevertheless remains confident on the rebound in China and there is perhaps a bit of exaggeration in the fall of the course”, underlines a Parisian analyst.