JCDecaux has warned it will post its first ever revenue decline this year as the global economy slows at “rates rarely seen before”.
The outdoor advertising company says revenues are expected to dip 10% in the first quarter and that it will not provide further earnings guidance because of the uncertain economic environment.
Charles Decaux, chairman of the executive board and co-chief executive of the company, says the slump in revenues is unavoidable.
“In 2009, with economies slowing down at rates rarely seen before, this will inevitably lead to reduced advertising budgets, increased competition between media, and increasingly reduced visibility,” he says.
The gloomy prediction came despite a 6.3% increase in organic revenue, which excludes the impact of acquisitions and exchange rates, last year with total revenue hitting €2.2bn (£2.03bn).
Its street furniture decision saw a 2.4% decrease in operating margin to €396.9m (£365.8m), impacted by lower advertising revenues in the UK and North America while billboard operating margin dipped 18.2% to €70.5m (£65m) on revenue declines in the UK and Spain.
A 32.4% increase in operating margin for the company’s transport division partly offset the slumps elsewhere.
JCDecaux’s revenues for last year compare favourably with CBS Outdoor, which posted a 15% drop in revenues last month.