Decaux Shrugs off SARS with 64% Profits Surge

16 September 2003

Outdoor ad giant J C Decaux has posted a 64% surge in first-half profits, allaying fears that the effect of the SARS crisis on its important airports business would dent its bottom line.

Decaux reported net earnings of €18.8 million ($21.2m; £13.2m) for the first six months of 2003, well above analysts’ forecasts of around €11.8m. Revenues slipped 2% to €758.2m, though in organic terms (excluding acquisitions and currency changes) they rose by 1%.

At the group’s transport unit, revenues slid 6.5% to €131.1m, though organic growth stood at 3.5%. The SARS epidemic did have an adverse effect on airport and metro advertising in Hong Kong, but this was mitigated by recoveries in France, the US, Italy, Spain and Portugal.

Of the group’s other divisions, street furniture revenues dipped 2.2% to €408.2m, and billboard income slipped 1.5% to €214.8m.

Chairman and co-chief executive Jean-Francois Decaux believes the group is well placed to capitalise on an upturn in the ad market.

“Our outlook for the full year remains unchanged,” he commented, “with trading conditions in Europe remaining challenging, particularly in Germany, but signs of an advertising recovery under way in the US.

Data sourced from: BrandRepublic (UK); additional content by WARC staff