Clear Channel Outdoor Holdings, Inc.

2023 third quarter earnings conference call. During the presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. I will now turn the conference call over to your host, Eileen McLaughlin, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining our call. On the call today are Scott Wells, our CEO, and Brian Coleman, our CFO. They will provide an overview of the 2023 third quarter operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International, BV. We recommend you download the earnings presentation located in the financial section in our investor website and review the presentation during this call. After an introduction and a review of our results, we'll open the line for questions. And Dustin Cochran, CEO of Clear Channel UK and Europe, and Dave Thaler, CFO of Clear Channel Outdoor Americas, will join Scott and Brian during the Q&A portion of the call. Before we begin, I'd like to remind everyone that during this call, we may make forward-looking statements regarding the company, including statements about its future financial performance and its strategic goals. All forward-looking statements involve risks and uncertainties, and there could 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 our findings with the SEC. During today's call, we will also refer to certain 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 the earnings presentation. Please note that the information provided on this call speaks only to management views as of today, November 8, 2023, and may no longer be accurate at the time of a replay. Please turn to slide four in the earnings presentation, and I will now turn the call over to Scott.

Good morning, everyone, and thank you for taking the time to join us today. We're pleased to report we delivered consolidated revenue of $517 million for the third quarter, excluding movements in foreign exchange rates, reflecting a 2.7% increase as compared to the prior year. This revenue is within our guidance after excluding Europe South, which was moved to discontinued operations. Airports in Europe North stood out with the America segment lagging, as anticipated when we provided third quarter guidance in August. Brian will go deeper on the drivers in America, but the combination of soft national sales and our market mix drove the challenge. We are seeing improving trends domestically and believe we'll have a better performance in the U.S. in the fourth quarter. While we knew 2023 would be a challenging year for several reasons, including unwinding COVID renovations and absorbing higher costs on a large roadside contract, as previously described, We expect our full year 2023 results to be within the guidance we provided in February, excluding Europe South, and are excited about the trajectory we are on as we head into 2024. As we've discussed previously, our management team and board are focused on driving meaningful deleveraging over the near to medium term. There are two key levers to affect this. One, continue to execute our operating plan to organically grow adjusted EBITDA and improve free cash flow, including taking action to further optimize our cost structure, and two, methodically working to monetize our European assets while we focus on our higher margin markets. With our recently completed sale of our business in France, we have made significant progress on our portfolio this year, selling or agreeing to sell all of the businesses in our Europe South segment. In addition, we have commenced the process to sell the businesses in our Europe North segment, and potential buyers are reviewing preliminary information. We have also initiated a strategic review of our businesses in Latin America and have hired an advisor to explore options for these businesses. While we can't guarantee the outcome of either process, we are confident that upon the sale of these assets, we will be a more focused U.S.-centric out-of-home operator with less debt and enhanced optionality to become a REIT. We also know that we must increase our adjusted EBITDA in order to meaningfully reduce our leverage multiple. So while we are executing our international divestiture processes, we are simultaneously continuing to focus our energies on executing our operating plan, including growing adjusted EBITDA organically, expanding our advertiser base, optimizing our deployment of capital, and reducing corporate expenses. These actions include things like growing key verticals in the US, developing multiple channels to advertisers, turning around challenged markets conducting a zero-based budget review of corporate expenses as our portfolio simplifies, and the deployment of proceeds from our divestitures to improve our liquidity position, reducing debt. We believe these actions provide the roadmap to achieve meaningfully lower leverage multiples over the next few years, which in turn should enable us to generate stronger free cash flow to support further deleveraging and to unlock shareholder value. Let me share a few proof points that support our belief in our ability to deliver. In the second quarter of 2022, I stated that we were pivoting on our plan to sell all of Europe with the intention to sell the lower margin, lower priority European assets first, with the remaining businesses expected to have substantially higher adjusted EBITDA minus CapEx margins. As you can see from slide five, which compares fiscal year 2022 actual results for the combined Europe North and Europe South segments to the Europe North segment guidance for fiscal year 2023, We now have a business that is more digitized with higher segment adjusted EBITDA minus CapEx margins as compared to our combined European businesses in 2022. These results demonstrate our team's ability to execute our strategy, including expanding our digital footprint and programmatic platform and underscore the strength of the out-of-home industry. We believe we now have a much more valuable and attractive Europe North business. And while we are committed to selling these assets, we will be disciplined in doing so to maximize value. Second, let me share some insight on the fourth quarter. We expect two of our fastest-growing verticals in the U.S. will be pharma and packaged goods. These are verticals we've called out as opportunities for several quarters, and our sales teams are making good inroads in building business in both areas. In addition, we continue to see success in building our programmatic platform. Following a strong September, October has been our best month to date. Finally, let me return to where I started and call out that we believe our 2023 results will be within the guidance range we provided in February after excluding the Europe South segment. Looking forward, we believe we are poised for significant organic adjusted EBITDA growth in 2024, and we will provide an in-depth outlook for 2024 on our Q4 fall in February. So we know we have a lot of work ahead of us. but we believe we have the right team and strategy in place to deliver the full value we believe is inherent in our business. And on this score, I would like to share our appreciation for all the work our global team is doing as we focus on achieving our objectives. With that, let me hand the call over to Brian.