Clear Channel Outdoor(US:CCO)2020-08-07 20:19Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2020 decreased 54.9% year-over-year to $315 million, with an adjusted decline of 54.4% when accounting for foreign exchange [43] - Consolidated net loss increased to $143 million from $11 million in Q2 2019, with adjusted EBITDA showing a loss of $63 million compared to a profit of $180 million in the same quarter last year [44] - Cash and cash equivalents totaled $662 million as of June 30, 2020, including $317 million held outside the U.S. [49] Business Line Data and Key Metrics Changes - Americas segment revenue was down 39% year-over-year, while Europe segment revenue decreased 62% after adjusting for foreign exchange [43] - Americas adjusted EBITDA was $47 million, down from $137 million in Q2 2019, while Europe reported an adjusted EBITDA loss of $69 million [45] Market Data and Key Metrics Changes - In the U.S., revenue was down almost 40% in Q2 compared to the previous year, with traffic returning to about 95% of pre-COVID levels [13][18] - In Europe, revenue was down over 6% year-over-year, with a stronger rebound in markets that lifted lockdowns earlier, such as Switzerland [14][20] Company Strategy and Development Direction - The company is focused on preserving liquidity and has targeted cost cuts of over $100 million and capital expenditure savings of $25 million [14] - There is a commitment to enhancing the value of the business and driving shareholder value through strategic actions, including potential asset dispositions [16][64] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recovery, expecting a revenue decline in the low 30s for Q3, a significant improvement from the 55% decline in Q2 [10][62] - Visibility beyond Q3 remains limited, but there is an expectation of sequential improvement in revenue performance through the remainder of the year [24][62] Other Important Information - The company issued $375 million in senior secured notes to bolster liquidity, with total debt increasing to $5.3 billion [15][50] - The corporate social responsibility initiative remains a priority, emphasizing diversity and inclusion amid the pandemic [37] Q&A Session Summary Question: How are marketers thinking about returning to advertising? - Management noted that the return of audience traffic is crucial for advertisers, with early signs of recovery in Europe leading to increased bookings [66][68] Question: Can you discuss cash flow dynamics and CapEx management? - The company highlighted that working capital shifts positively impacted cash flow, but expects this to reverse as business activity increases [71][73] Question: What is the outlook on cash burn as recovery happens? - Management acknowledged that cash burn is expected to increase as receivables grow with business recovery, but remains focused on maintaining liquidity [77][80] Question: What is the fixed versus variable cost mix? - Management indicated that many cost reductions were temporary, and while some fixed costs remain, there are still variable expenses tied to revenue [85][86] Question: Are there any permanent changes expected in business flow due to remote work? - Management believes it is too early to determine permanent changes, but anticipates a hybrid model of work will emerge post-pandemic [90][92] Question: What is the current environment for M&A? - Management described the M&A environment as challenging, with limited activity and significant valuation concerns [120]