March 5, 2020 / 7:49 AM / 24 days ago

Advertising group JCDecaux warns on sales, operating margin due to coronavirus outbreak

FILE PHOTO: The logo of outdoor advertising group JCDecaux is seen on an advertising panel in Paris, France, August 10, 2018. REUTERS/Regis Duvignau

(Reuters) - French outdoor advertising company JCDecaux (JCDX.PA) said on Thursday it expected first-quarter adjusted revenue and 2020 operating margin to be negatively affected by a “very material impact” from the coronavirus outbreak in China.

The company said it expects its adjusted organic revenue to fall around 10% in the first quarter due to a significant decline in passengers and commuters at Chinese airports and on underground rail systems in China, where the company advertises.

“All our landlords in China fully recognise the significant setback for the advertising business and have all already expressed their intention to grant us rent reductions,” Chief Executive Jean-Francois Decaux said.

Despite saving measures undertaken to mitigate the impact, the company also expects full-year operating margin to be negatively affected, but did not quantify the impact.

The company also on Thursday reported a 7.5% rise in 2019 adjusted revenue to 3.89 billion euros (£3.36 billion), helped by a strong performance in the United States and growth in its digital business. Full-year operating margin rose by 110 basic points, it said.

The group’s digital revenue, which grew by more than a third last year, comes mainly from five markets, including China.

JCDecaux proposed a dividend of 0.58 euro per share for 2019, unchanged from the previous year.

Reporting by Pawel Goraj; Editing by Susan Fenton

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