By Jason Pollock | August 24, 2022
oOh!media announced a 10% increase in revenue in its half-year results, with key performance measures and statutory measures up, its EBITDA increased by 62%.
The company, which owns leading large-format printer Cactus Imaging, says a combination of printing and digital readers provides the best return on investment. Revenue for the half increased 10% to $276 million, with EBITDA reaching $51 million.
Print21 sister title AdNews spoke with Cathy O’Connor, CEO and Managing Director of oOh!media, about the drivers of these strong results, the role digital plays in the success of the outdoor advertising industry and the future of the media specialist exteriors.
O’Connor said strong performances in road, retail and street furniture, which are now ahead of pre-Covid figures from 2019, were the main drivers of results. “We’ve really seen a strong end to 2021, and what’s happened is that the momentum of these broadcast formats has just carried over into the first half. So that’s, first and above all, what determines the results.
“The other key factor is the operating leverage of the business, and we’ve had good results in terms of converting that revenue growth into earnings growth.
“We delivered underlying EBITDA growth of 62% year over year to $51.5 million and adjusted NPAT of $20.4 million, which is actually an eightfold increase from the previous year. So you’re really starting to see the structure and the fixed cost base of the business starting to do its thing with revenue growth.”
O’Connor said oOh!media is part of a dynamic industry that is increasingly interacting with customers, both in a traditional and digital sense. “Outdoor signage has really put a lot of innovation into its measurement. It’s doing some really good things in standardizing formats, and it’s becoming more and more available through programming, and we’re just seeing that translate into an increased share of total media compared to other media.
“For the first half of 2022, in SMI data, what we know is that out-of-home advertising accounted for 14% of total advertising growth, but the share is currently for half of 11.6% whole cake. You see, because we’re taking a high percentage of the growth, it bodes very well for out-of-home to continue to grow its media share relative to other media.”
O’Connor said the dividend announcement, combined with a share buyback of up to 10% of issued capital, demonstrates the board’s belief that the industry and oOh!media’s place in within it are well positioned for future growth.
O’Connor said unlike some of the stories about the current macro environment, oOh!media finds a much more engaged, proactive and forward-looking customer base than advertised.
“Certainly, in the case of the exterior, the information activities are strong. For the third trimester, oOh! media was up 37% year-on-year, which is obviously outside of a third quarter that was somewhat affected by lockdowns last year, but despite that the sector was up 19.8% in June .
“We won’t know the extent of this until the end of the quarter when the RMA releases industry data, but it certainly looks like the momentum has continued into the second half.”
O’Connor said digital is key to success, with 62% of industry revenue now coming from digital and oOh! Media being close to this average in their own portfolio. “Move 1.5 really allows us to give advertisers more work around measuring and evaluating digital and how it works and where it’s most effective.
“What we know about Move 1.5 is that it’s a combination of both classic and digital that delivers the best return on investment and superior reach and frequency. In the case of oOh!media, we will be supporting always that it is the mixture of static and digital which obtains an excellent return on investment.
“What we’re also seeing from a category perspective is that most of our top 10 categories are up year over year, and several of them are back ahead of the 2019 levels, which bodes well for the sector as it continues to go back to its top mark.”
O’Connor said that as the biggest player in the industry, there is a lot of growth for oOh!media ensuring they continue to push the industry ahead of other media.
“We have made a strong statement that we are first and foremost an out-of-home business and I believe the breadth of our assets and our mass reach proposition is very unique in the industry, and we believe this will continue to bring us growth in the future.
“We’re doing a lot of interesting partnerships, especially in the content space. We announced a major partnership with News Corp, which effectively brings a higher level of content to all of our various content environments, whether it’s offices, airports or parts of retail and suburban street furniture. .
“Continuing the digitization of our assets is an obvious thing that we will continue to do and we continue to innovate around things like anamorphic 3D technology, which is seeing a lot of interest from advertisers – just a revolutionary new thought for stimulate levels of creativity in the sector. .
“We’ve also launched our new creative services unit, Poly, and that’s our strategy in the post-Junkee era. We’ve had a huge response from top brands and agencies wanting to partner with us to really seek to inspire customers in this fascinating new world of digital out-of-home, and to use the medium in a more adaptive and tactical way.
“There are plenty of reasons to be optimistic. This is why we believe that all of our growth will come from within the industry and we will be a very proud, successful and leading out-of-home business if our strategies succeed, which they will.