(News Bulletin 247) – The advertising display specialist falls on the stock market after publishing its annual results and its outlook for the first quarter.

JCDecaux is suffering this Thursday. The outdoor advertising specialist plunged 9.8% around 3 p.m. after revealing all of its results for the 2023 financial year as well as its revenue forecast for the first three months of the year.

“It’s still very severe. In reality the publication just didn’t have any good surprises. The market still remains focused on China, where the recovery will be very gradual, with JCDecaux shares being mainly perceived by the market as a vehicle to play on China’s rebound”, dissects an analyst.

Already published at the end of January, the group’s adjusted turnover increased by 7.6% on a published basis and by 8.7% on a comparable basis to stand at 3.57 billion euros. The Transport division (displays in stations and airports) drove the increase in revenue with an increase of 18.4% like-for-like. This division is aligned “with the recovery of passenger traffic at global airports, which is now at pre-Covid levels, with the exception of international traffic in China,” the company explained.

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Transport margin below expectations

The group announced that it had generated an operating margin of 663 million euros in 2023, up 10% year-on-year and right in line with the consensus of 664 million euros. Its adjusted operating profit before charges and depreciation stood at 266.2 million euros, up 25.5% year-on-year. The corresponding margin stood at 6.6% of revenues, up 1.5 percentage points.

The group’s profit stood at 209.2 million euros, reflecting an increase of 58.3% over one year.

However, the devil can be in the details. UBS notes that the adjusted operating margin in the transport division disappoints, standing at 129.7 million euros against a consensus of 137 million euros. “This poor performance is explained by a drop in the operating margin in China year-on-year, due to a weak rebound in the advertising market,” notes the Swiss bank.

The group’s sequential forecast is also disappointing. JCDecaux expects growth of 9% on a comparable basis for the first quarter of 2024 compared to a consensus of 10.3%. But the company is known to be cautious about its forecasts, especially at the start of the year.