Clear Channel Outdoor Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel Outdoor Holdings Incorporated's third quarter 2021 earnings conference call. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing the pound key. Please note, this call may be recorded. I'll now turn the conference over to your host, Eileen McLaughlin. Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining Clear Channel Outdoor Holdings 2021 third quarter earnings call. On the call today are William Eccleshare, Chief Executive Officer of Clear Channel Outdoor Holdings, Inc., and Brian Coleman, Chief Financial Officer of Clear Channel Outdoor Holdings, Inc., who will provide an overview of third quarter 2021 operating performance of Clear Channel Outdoor Holdings, Inc., and Clear Channel International, BV. After an introduction and a review of our results, we'll open up the line for questions, and Scott Wells, Chief Executive Officer of Clear Channel Outdoor Americas, will participate in the Q&A portion of the call. Before we begin, I'd like to remind everyone that this conference call includes forward-looking statements. These statements include management's expectations, beliefs, and projections about performance and represent management's current beliefs. There can be no assurance that management's expectations, beliefs, or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press release and filings with the SEC. During today's call, we will provide certain performance measures that do not conform to generally accepted accounting principles. We provide schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press release. and the earnings conference call presentation, which can be found in the financial section of our website, investor.clearchannel.com. Please note that our earnings release and the slide presentation are also available on our website in our integral to our earnings conference call. They provide a detailed breakdown of foreign exchange, segment revenue, adjusted EBITDA, and adjusted corporate expenses, including the impact of share-based compensation and restructuring charges, among other important information. For that reason, we ask that you review each slide as William and Brian comment on them. Also, please note that the information provided on this call speaks only to management's views as of today, November 9th, 2021, and may no longer be accurate at the time of replay. With that, please turn to page three in the presentation, and I will now turn the call over to William Escher.

Good morning, everyone, and thank you for taking the time to join today's call. We delivered very strong results during the third quarter, and we entered the fourth quarter with continuing business momentum as we capitalized on the broad-based recovery we're seeing across our markets. Advertisers are returning to launch new campaigns and rebuild brand awareness. This rebound, together with new advertisers discovering our medium for the first time, is driving growth in many of our markets ahead of 2019 revenue levels in both our digital and traditional assets. Our consolidated revenue in the third quarter increased 33.3% over the prior year. Excluding FX, consolidated revenue was $590 million, up 31.8% over the prior year. America's revenue was $319 million, up 42.6%, in line with our guidance, and at 97% of 2019 revenue. Europe's revenue was $256 million, up 18.2%, which was slightly ahead of our guidance, and 97% of 2019 revenue, both excluding FX. As we have highlighted on past calls, we have a resilient business that has consistently demonstrated its ability to bounce back from macro disruptions. We are clearly seeing this occur, and we are very pleased with how our business is performing in the current quarter. And it is with that confidence in our business and liquidity position that we repaid the $130 million outstanding balance of the revolving credit facility. Coming out of COVID, advertisers are embracing out of home as they recognize the enhanced capabilities we have built into our platform. The power of our assets is only matched by our team of talented and dedicated people and the deep relationships they have maintained across the industry throughout the pandemic. Given the expansion of our digital footprint and the related strategic investments in both data analytics and programmatic that we have made in our platform, advertisers are now utilizing an even stronger set of tools that will allow them to expand these relationships through highly creative, addressable, and measurable solutions. We're meeting our customers where they are by building on the very best features of out-of-home, and elevating what we can do for advertisers and their brands in a compelling manner. And so, this is an exciting time for our business as we execute on our vision to expand our share of total advertising spend. As we focus on delivering profitable growth, we also remain committed to reducing our overall indebtedness, strengthening our balance sheet, and elevating our ability to benefit from the operating leverage in our model. As part of this effort, and as momentum builds in our business, we will continue to evaluate disposition opportunities in line with our strategic goals and in the best interest of our shareholders. Now let me provide a brief update on each of our business segments, beginning with Americas. Based on the information we have for the fourth quarter, We expect America's revenue to be in the range of $360 and $370 million, which is above the period, reflecting the strong momentum in our business as we close out the year. In the current quarter, we're continuing to experience a notable uptick in demand with a strong volume of RFPs. National is increasing over the prior year at a slightly faster rate than local. Based on our current revenue bookings, all our small and most medium-sized markets are pacing above Q4 2019. We still haven't fully rebounded in a few markets in California, including San Francisco, although LA, which is our largest market, is now above 2019. In our larger markets, in addition to LA, New York, Miami, and Dallas are also exceeding 2019 levels, with Houston and Boston close behind. I'd also highlight a promising rebound we're seeing in airports across the country. We believe our success is attributed to our teams doing a better job of surfacing our customer needs and matching them to the best asset type. For example, our traditional sales team is now selling our airport inventory. We should note at this point, inflation and supply chain issues are not materially impacting our business. But we are, of course, keeping an eye on macro trends and how they're playing out. Our digital billboards business, which continues to lead the recovery, is central to our long-term growth strategy. We deployed 17 new digital billboards in the third quarter, giving us a total of more than 1,500 digital billboards across the United States. We are and we remain at the forefront in driving innovation in the out-of-home industry. We built a dynamic platform that delivers mass broadcast-level reach, along with the sophisticated insights, similar to the digital display platforms, with the ability to target consumers on the move. Our radar solutions continue scaling up and opening new opportunities, including with major CPG brands. Recently, we were able to match individual consumer behaviors using our radar-proof attribution tool with household purchase data from an ID resolution partner, LiveRamp. In the CPG world, this advancement matters as households rather than individuals, often are the decision makers in this product category. So we can now measure the household impact of exposure to our out-of-home advertising. For example, in separate campaigns for a snack brand, a sports beverage, and a new packaged food brand, we delivered household sales insights about the consumer buying these products and how out-of-home attracts new customers to these brands. RadarProof also demonstrated the ability of out-of-home exposure to increase the lifetime value of repeat brand purchases, a key metric for consumer packaged goods brands. Further, through our strategic expansion into the programmatic space, we continue to see a notable uptick in brands experimenting with programmatic, and we are positioned to participate in this opportunity. For instance, these innovations are evident in our recent campaign for Twitch and MediaHub Global, to promote their second annual streamable gaming event. The campaign won Best Use of Programmatic, the digital out-of-home this year, as part of Adweek's annual Media Plan of the Year awards. Our commitment to technology in improving the buying process and enhancing our ability to demonstrate attribution are key drivers of performance in our America's business. And I believe Scott and his exceptional leadership team should be proud of their work in delivering such a strong performance as the business emerges from the pandemic. Turning to our business in Europe, based on the information we have today, we expect fourth quarter segment revenue to be between $335 and $350 million, which is in line with Europe's top line performance in the fourth quarter of 2019 of $349 million. All amounts exclude movements in FX. Similar to the US, in Europe we are demonstrating the resilience of our platform and its ability to rapidly return to growth. As we've noted in the past, about two-thirds of our European revenue comes from roadside assets. This has benefited our performance in the current environment, given that we have limited exposure to the transit sector, which has, of course, seen a greater impact from COVID. This is most evident in the UK, where we have continued to deliver revenue ahead of 2019, For the last six months, UK revenue has been ahead of 2019, led by the strength of our street furniture footprint and from the benefits of both new contracts and further development and investment in digital roadside inventory. Overall, we are continuing to benefit from pent-up demand across Europe, although orders are still coming in later than pre-COVID. Based on current trends, our pipeline across CPG and retail, our largest verticals, is looking strong. with fashion and beauty also looking healthy. Our digital expansion is also a central part of our growth strategy in Europe. We added 314 digital screens in the third quarter for a total of over 16,900 screens now live, including digital screens in the UK, Italy and Ireland. And we are further elevating the value proposition of our digital footprint through the rollout of our radar suite of solutions, which is now gaining traction in all of our major European markets. For example, in Spain, we are now able to target campaigns based on online behavior in addition to physical store visits, and we are having significant success using the tool in the auto category where brands are able to efficiently target likely car buyers. In addition, we recently completed the launch of our programmatic offering, Launchpad, in Italy, and we are now executing on our programmatic strategy across Europe, allowing brands to connect at the right time with consumers through multiple touchpoints, plan real-time digital out-of-home campaigns, and control exactly when, where, and at what times their ads are deployed. We are also continuing to selectively pursue contract tenders that meet our strategic objectives in multiple markets. In Sweden, we won a seven-year contract to operate the advertising related to a public bike program in the center of Stockholm, consisting of 350 static and digital panels in prime locations, further strengthening our footprint across the city. So in summary, we are executing at a high level across every facet of our strategic plan. The recovery continues to gain momentum, and we are seeing good progress in our business in the current quarter. Coming out of the pandemic, we are well positioned to maximize our performance as we leverage our digital expansion and the investments we are making in our data analytics and programmatic resources, which is broadening the universe of advertisers we can pursue and strengthening our growth profile. And with that, let me now turn it over to Brian to discuss our third quarter 2021 financial results. Thank you, William.