Co-Chief Executive Officer, JCDecaux
JC Decaux's Chairman Says U.S. a Top Country for Growth
Mar.02 -- Jean Francois Decaux, chairman and co-chief executive officer at JC Decaux, discusses his outlook for the first quarter, his U.S. business and his guidance for the U.K. He speaks to Bloomberg's Anna Edwards and Manus Cranny on "Bloomberg Daybreak: Europe."
About Jean-françois Decaux
Jean-François Decaux, co-CEO of JCDecaux, discussed the company's performance and strategy in various media appearances. He stated in March 2022 that the company had not yet seen an impact from Russia's invasion of Ukraine on its business, noting that the firm had exited Russia nearly two years prior and that its exposure to Ukraine was only 0.1% of revenues. Decaux said the company was planning further acquisitions to grow in "core Europe" and South America, aiming to keep "maximum" financial firepower for consolidation opportunities. He also said the company's Chinese domestic advertising revenue was almost back to pre-COVID levels. In earlier appearances, Decaux said in 2019 that the company was looking at acquisition opportunities in the United States, including companies such as Clear Channel and Outfront Media, but would remain disciplined on price. In 2017, he described the U.S. as a top growth market for the company due to digitization of its bus shelters in Manhattan, while also noting a slowdown in emerging markets that represented 36% of revenues. Decaux has also spoken about the company's commitment to sustainability, stating in 2020 that JCDecaux aimed to reach 100% green energy usage by 2022.
Transcript (8 segments)
A
Anna0:00
Looking at your statement this morning, you talk about uncertainty, uncertain global economy as well as the uncertainty in the political outlook. You seem quite cautious, and yet we have a global stock rally that suggests there's a lot of investor enthusiasm and excitement for growth at the moment. Why do you see the world differently?
J
Jean-François Decaux0:21
Good morning Anna, good morning Manis. We delivered last year a record year in terms of revenue at 3.4 billion euros. We have a very strong first half with more than 6% organic growth, and the second half was affected by a slowdown in Asia Pacific, mainly in Greater China, and we continue to see some weakness in Greater China, which is about 20% of our total revenues, offset by some very strong momentum in our new digital networks in London and New York. And since you are in London, you have seen all the digital bus shelters that we've recently installed, and they are very popular among advertisers. So the good news is that we are making significant progress in three of the top four advertising markets worldwide with the digitization of London, New York as well, where we have now the most visible advertising locations on Fifth Avenue across the Trump Tower, and also recently we won some major contracts in Japan, which is still the third largest advertising market worldwide, where we now are providing a network which covers 40% of the Japanese population in the top 41 cities. So we have some very good news in terms of organic growth and in terms of digitization, which is transforming the way how advertisers are going to be buying out of home media in the future, and already buying some very dynamic campaigns.
M
Manis1:45
In the trend station in the UK, you spoil us, you spoil us for choice in which direction to go. You're spoiling me for choice and direction to go whether I go towards the Trump question or the Brexit question. Let's go with Trump, because that's where you've got a considerable presence. He's talking a great book. There's enthusiasm amongst manufacturers, amongst the consumer. Is that feeding through yet to bookings in the first month and a half of this year? Are you seeing any push higher in your US business apart from Trump Tower?
J
Jean-François Decaux2:20
But our US business is doing very well in Q1. Obviously we're not giving a guidance on a geographic basis. Our guidance is for the world as a whole, which was the first question of Anna: why are you so cautious? And we are cautious because we see a slowdown in most of our emerging countries, which represent 36% of our total revenues. Now having said that, coming back to your question, Manis, US in the first quarter is doing extremely well. The digitization of our bus shelters and newsstands in the core of Manhattan is proving very successful, and the US is going to be a top country for growth for JCDecaux in 2017, but the US is only representing a bit less than 10% of our group revenues.
A
Anna3:04
You've already mentioned the bus shelters, Jean-François, so let's come back to the UK. Last time I think you reported to the markets, you warned about the potential for Brexit delays to that project, but you did talk about the expectation that 50% of UK advertising revenues were going to come from digital in 2017. Can you update us on guidance for the UK?
J
Jean-François Decaux3:26
Yes Anna, you're perfectly right that we targeted a 50% share of revenues coming from digital in 2017. We are well on track because last year we generated 40% of our revenues from digital. So what I told you last year when we presented our 2015 results is going to be true: that we will be generating 50% of our revenues in the UK coming from digital. We operate the largest digital out-of-home media network in the world. We've now 600 screens. Oxford Street is 100% digital, as you know. Oxford Street is the biggest, the busiest shopping street in Europe. And we are selling to new advertisers, like obviously in the new economy, most of the GAFA companies have become major clients of JCDecaux with digital.
M
Manis4:20
Jean-François, France is 19% of your revenues I think at the end of 2015. There's a whole variety of ways to look at French risk at the moment. Give me your — everybody's got to have a worst case scenario, a little bit of disaster recovery planning. If Le Pen was to succeed and become the leader of France, what would be the immediate decision process that you might go through as a CEO? Would you consider moving your headquarters? What would go through your mind in terms of that risk? Have you thought about it?
J
Jean-François Decaux4:53
No, we are a French-based company. Paris is our showcase for the rest of the world. This is where we launched the most successful bike sharing system with last year 40 million trips compared to 9 million in the UK in London. We are most of our new products such as the automatic public toilets, the bus shelters with USB connections where you can recharge your iPhones at the bus stop while waiting for the buses — everything was kind of invented in France. So we will continue to obviously be a French-based company, there is no doubt about that. You should know, Manis, that out-of-home in France is 13.3% of media spend and was 12% 5 years ago, so we've gained market share. We have a strong position in France. We employ more than 4,000 people. We are committed to our country. Having said that, I've been living obviously many many years abroad, I'm still living in London, and we are now operating in 75 countries. France is only 18% of our total revenue, so it's no longer the biggest region. The biggest region remains now Asia Pacific. And for that reason, I don't see any reason why we should move out of our French home country.