JCDECAUX SE (DEC) Q4 2025 Earnings Call Transcript

Good morning, everyone, and welcome to our 2026 Full Year Results Conference Call. The speakers on this call will be Jean-Charles Decaux, co-CEO, David Bourg, Chief Financial, IT, and Operations Officer, and myself. Remy Grisard, Head of Investor Relations, is also attending today's conference call. On the front cover, we chose this picture of one of our large digital kiosks on Market Street in San Francisco with an AI-related campaign, because this new client category generated last year 30% of all revenues in the San Francisco advertising market. Moving now to slide four, overall, 2025 is a solid year. with robust underlying growth and strong performance in our key financial indicators. First, revenue. Our organic revenue growth is up 1.8% and 3.2% if we exclude the impact of the Paris 2024 Olympic Games and UEFA Euro. So despite a tougher, comparable and a more challenging agro environment, our underlying top line continue to grow. Second, digital. Our digital revenue grew by 10% organically and now represents 41.7% of total group revenue, with programmatic up 17.3% and reaching 10.4% of digital revenue. This confirms that digital, and especially programmatic, remain a key driver of our growth and of the transformation of the group. On the profitability slide, we demonstrate the strength and operating leverage of our business model. Our operating margin rate improved to 20.9%, up 150 basis points year-on-year. Recurring EBIT increased by 18.6%, and our net results, excluding the APG SGA capital gain in 2024, is up 22.8%. Finally, and very importantly, we delivered record-free cash flow of €342 million, up 47.9%, but David will comment all of that later. Bottom line, we delivered our 2026 targets one year ahead of plan. On slide number five, focusing on Q4, we recorded an organic growth rate of 1.6% above our guidance and our expectations around FLAB. Advertising revenue recorded a plus 3.1% organic growth, reflecting an acceleration versus Q3, and a solid advertising momentum, especially compared to traditional media companies in Europe. Non-advertising revenue were affected by a high comparable base in 2024, linked to the contract of the Paris Automatic Public Toilet Network. Digital accounted for close to 45% of revenue, a 1.9 points increase, with programmatic digital out-of-home up 14% and representing 11% of digital revenue. Coming back to slide 6, coming back to our full year 2025 revenue performance, reported growth at 0.8% was affected by a negative foreign exchange impact, partially offset by acquisitions and other change in scope. Strip for Hedgehog maintained its strong momentum with plus 1.9% organic growth, even against a base that had benefited from sporting events in europe last year transport continued its rebound growing plus 3.3 percent organically despite a mid single digit revenue decline in china outside of china growth was much stronger reaching 6.8 percent organically billboard decreased by 2.3 percent organically mainly due to high comparable and further rationalization of our inventory in france on the next slide number seven you can see that North America and the rest of the world were key growth drivers as they grew high single digits while the rest of Europe grew low single digits and UK and Asia-Pacific decreased low single digits. France decreased mid single digits impacted by its high comparable, excluding the 2024 Paris Olympic Games. France grew by 1.8% on an organic basis. This shows the strength of our geographically diversified model. On slide number 8, we are well diversified geographically but also by activities. Street furniture now constitutes 50.7% of total revenue, while transport at 35.8% has not yet recovered its 2019 revenue share of more than 40%. Billboard remains our smallest segment, accounting for 13.4% of total revenue, as we continue to focus on premium assets and on digitization wherever possible in this segment. France is our largest country, representing 16.7% of total revenue, while Europe makes up nearly 50%. The UK ranks as our second largest country. Our exposure to China continues to decrease to around 10% in 2025 versus 18% in 2029. Turning to the slide number nine, our client portfolio is well diversified, with our top 10 clients contributing to less than 13% of revenue. We observe a healthy rotation among leading advertising categories, Fashion, luxury, and personal care, our largest category, at 18% of sales, turned slightly negative at minus 5%. Meanwhile, the next three categories showed robust growth, retail at plus 7%, entertainment and film at 11% plus, and finance at 13%. Next slide, number 10, digital out-of-home remained a key growth driver as it grew by plus 10% organically in full year 2025. Digital revenue penetration rose by almost 3 percentage points year on year, reaching 41.7% in full year 2025 and almost 45% in Q4. Our digital revenue distribution continues to closely mirror our business mix as demonstrated in the next slide. Digital penetration on slide number 11 increased across all three business segments. In street furniture, digital revenue climbed to 39.9% compared to 36.9% a year earlier. Digital revenue in transport, our most digitized segment, grew from 44.1% to 46.4%. In billboard, digital revenue reached 35.8% from 33.8% a year earlier. Let's move on to slide number 12. With programmatic advertising which soared by 19.2% in 2025, reaching €10.5 million, or 10.9% of our digital revenue, up from 9% the previous year. We consider that more than 50% of this revenue is purely incremental, coming from new advertisers and targeted campaigns. Programmatic revenues remain primarily incremental, sourced from smaller advertisers or from targeted campaigns such as this campaign for a new perfume in Berlin. On slide 13, we anticipate continuous strong growth. For programmatic revenue, as there is an important gap today between countries such as Germany at 36.5% and the Netherlands at 28.6%, surpassing the group average at 10.9%. And some major digital markets like the UK and the US, which have not yet fully embraced programmatic. We predict programmatic penetration will continue to rise in the medium term to above 20%. On the next slide, number 14, which is pretty full, you will find our most important contract wins and renewals in 2025. Taking a few examples, in street furniture, we secured contracts in Europe with Camila Carrefour, Rennes, freestanding units, Odense in Denmark, Barcelona, street furniture, and Spain. In Japan, the third advertising market worldwide, we strengthened our footprint with Fukuoka, Kawasaki, Nagano, Nara, and Sapporo. In Australia, we renewed the important contract of Melbourne, Yara Trans, which was announced last week. In transport, we renewed Northern Rail in the UK, brussels airport and buses metro in belgium national rail in norway in north america we want denver airport in in the usa the number 10 airport in the world with 82 million passengers finally in billboard we strengthen our portfolio both in portugal and in ireland to address the frequent analyst question regarding contract losses the two main examples are city bus in hong and Danish Rail in Denmark finally before handing over to David Burg we have confirmed our excellent ESG performance our performance was recognized as best in class by extra financial rating agencies including our placement on the CDPA list for the third year in a row and the silver medal status from Ecovalis we have received as well again the best score a triple a from MSCI and and Sustainalytics rated as a low-risk company among the media. More broadly, I would like to emphasize that out-of-home media is among the least carbon-intensive media formats for advertisers. I will now hand over to David for the presentation of our financial highlights of the year.

Thank you, Jean-François. On this first slide, page 17, you can see our key financial metrics for 2025. On this picture, the message is clear. 2025 is a very solid year, as Jean-Francois already mentioned. On revenue of $3,967,000,000, up 0.8% on a reported basis, we deliver strong operating leverage across the P&L, a record level of free cash flow, and a lower net debt. while we continued to invest and resumed our dividends. Bottom line, with an operating margin at $831 million, 20.9% of the revenue, and a free cash flow at $342.9 million, we exceeded our 2026 target one year in advance. Let's now look in more detail at each KPI on the following slides, starting first with the evolution of our operating margin on the next slide. As you can see on the left side, our operating margin increased by 66.6 million from 764.5 million to 831.1 million, 7% year-on-year, while the revenue increased by 0.8%. And so, as you see on the right, the margin rate improved by 150 basis points from 19.4% to 20.9%. This strong performance mainly reflects lower rents and fees, in particular after the contract resets in mainland China and a very tight control of other operating costs which are almost flat. This means we captured almost all of the 1.7% growth in advertising revenue. You also see lower cost of goods sold linked to a 6.5% decline in non-advertising revenue, partly due to the end of the automatic toilet installation program in Paris. As you can see again on the right hand side, margin expansion is visible across all segments. Street furniture is now above 27%, a level we hadn't reached 0.6%, and transport at 13.5%, with the strongest improvement of 230 BIPs, mainly driven by China and the rest of the world. On slide 19, from operating margin of 831.1 million, on the top of the table, we deduct net amortization and depreciation, which are slightly up, and maintenance per part almost a bit in the middle of the table at 376.7 million, up 59 million year on year, broadly in line with the increase in operating margin or plus 18.6% with the margin improving from 8.1% to 9.5%. Below recurring EBIT after adding positive non-recurring items lower than last year because of the APG-SGA gain in 2024 and a small impairment, EBIT reaches 431 million euros up plus 5.5%. So in summary, this slide clearly confirms that we are not only growing our EBIT, but also delivering solid operating leverage at EBIT level on a recurring basis. On next slide, page 20, you find the bridge in our net income group share, two key numbers at the bottom of the table, reported net income at 262.6 million plus 1.4% versus 2024, but But excluding the APG-SGA capital gain in 2024, net income group share is up plus 22.8% in 2025, globally in line with our recurring EBIT. Between EBIT on the top of the slide and net income at the bottom, the main points are a better financial result, as we no longer have the $22.6 million one-off on a loan in China, and we benefit from lower IFRS 16 discount cost, or lease liability, partly offset by lower interest income after the bond repayment in October 2024. Higher tax charge as well, reflecting our improved results with an effective tax rate around 25.6% against 20.8% in 2024, which benefited from the non-taxable capital gain from APG, adjusted from that 2024 effective rate we would be above 24% so close to 2025 rate moving now to cash generation as you can see at the bottom of this slide 2025 is a record year with a free cash cash flow of 342.9 million, a positive variation of 111 million, only 20% versus 2024. The main drivers of this increase are, in the middle of the table, higher operating cash flow from 50 million, directly linked to the improvement in operating margin. Below the operating cash flow, a positive contribution from working capital of 33 million, in particular, from lower inventories, mainly thanks to inventory optimization. And finally, a disciplined capex allocation with net investment down to around 7.5% of revenue, while still keeping a strong focus on digital, which represents close to 40% of net capex. It is to be noted that the impact of factoring on working capital variation is negative, by $5 million, as we did a lower volume of factoring at your end than in 2024. We did $272 million versus $277 million in 2024. And also to be noted, a strong free cash flow generation before working capital variation as it reached $284 million. So in summary, this slide shows that our business generates strong operating cash flow and we continue to be disciplined on capex and working capital slide 22 on the left left bar chart you see the evolution of the net debt excluding IFRS 60 goes down from 756 million to 587 million a reduction of 169 million mainly thanks to record free cash flow partly offset by dividends, Bolton M&A, and share buybacks. This gives us, with a net debt around 0.7 times our operating margin. On the right side of the slide, you can appreciate a very solid financial profile, 1.3 billion cash, 825 million Android credit facility, 1.9 billion gross debt, 3.1 year average maturity, 3.4% financial cost, and 91% of our debt, which is on a fixed rate basis. On the last slide, we present our recommendation for 2025 dividend. Given our strong 2025 result, record-free cash flow, and solid financial position, we will propose to the AGM to increase the dividend per share to 0.65 cents per share from 0.55 last year. This is an increase of plus 18.2% globally in line with our underlying earning growth. It represents a payout ratio of around 52% of net result group share and about 40% of our free cash flow. As already indicated, our intention is to continue to gradually increase the dividend in the coming years while maintaining a balanced cash allocation between CAPEX to support organic growth, targeted Bolton M&A, and an attractive and sustainable shareholder return. That's all from my side on the financial, and I now end over to Jean-Charles for the Jean-Charles M. Thank you, David, and good morning to everyone.

So OH and DOH is more than ever, as you have seen, a growth media driven by increasing urbanization and mobility leading to rising audiences as well as by the premium nature our media on its digitization. As shown on this slide 25, Group M, the world largest media buyer, forecasts DOH to be growing at 7.2 percent over the next five years and OOH as a whole is expected to grow by 5.5% CAGR. This robust growth trajectory clearly sets us apart from other traditional media which are facing a structural decline. This is part of our ambition to take OH and DOH to the next level based on three key pillars. First, a unified ad tech stack that enables us to manage our entire inventory consistently for advertisers and fully capture the growth of DOH. Second, data-powering campaigns allowing for more relevant targeting and activations, including through programmatic buying. And finally, artificial intelligence which acts as a catalyst by continuously optimizing delivery, performance and creativity across our networks. On slide 27, you can see our digital footprint by major geographies. Key growth drivers remain Brazil, the US, Australia, the UK and Germany. While the group average is 42% digital, many countries are still below that level, which means strong future. Our largest country, France, is at the moment only at 9% digital penetration, for reasons we all know. Retail development will help accelerate digital, and any opening of cities like Paris to more digital will be a real boost for the whole sector. On the next slide, programmatic, as you can imagine and see, gives us three major advantages. First, trigger-based buying. We can buy based on real-time contextual signals. Second, we can now measure campaign performance at a level that is completely different from classic OOH. Third, whenever we sell audience based on programmatic, in more than 8 cases out of 10, we achieve a higher revenue per impression than on classic campaign. That's higher yield. This is made possible by combining first, second, and third-page party data. Today, programmatic is around 11% of our digital revenues versus 85% in web and mobile. The catch-up potential on the same inventory is huge. On the next slide, as you can see on the left, you have advertisers and agencies, large media groups, independents, and digital agencies. Then, the DSPs with displays and the major third-party DSPs, OH or multi-channel, such as the Trade Desk. Then you have the SSPs with Vue, our open platform available to JC Deco, but also, more importantly, to third-party media owners. On the right are the media owners. If we have not moved up the value chain with Vue and then displays, we will leave a significant share value on the table. We are now onboarding other major players as you can see. OutFront in the US is joining Vue recently and others may follow. Our full ad tech stack is unique in our sector, although this value is not yet fully reflected in our share price. Our conviction on the next slide is that AI is primarily an enabler force. Our assets are physical in cities, in transport networks, in retail environment, and it's a critical path of audiences. AI will transform, as we all know, our ways of working, collaborating, automating our business processes, and increasing the productivity of our media, but it will not replace premium real assets such as bus shelters, metro networks, airport screens or retail screens. We have highlighted here a few use cases. In campaign creation and planning, Campaign AI by displays optimized planning and trading through a simple prompt, while the maker generates tailor-made visuals customized for each location for both print and digital campaigns. For content moderation, KISS automatically screens creative to pre-approval visuals and accelerate validation. For content optimization, Optics leverages attention, prediction, and optimization technology to maximize campaign impact. Again, our physical assets are therefore structurally resilient, and AI enhances their value by improving productivity, creativity, targeting, and more importantly, measurement. This slide, 30.1, highlights the strong potential of DOH retail media for JEC.co. Our new exclusive partnership with Carrefour, Carmilla, and Limitel is a key milestone. The data-driven OHDOH network will be deployed across 161 shopping centers and 297 access areas in France from 2026, and 91 shopping centers and 88 access areas in Spain from 2027. Retail media, as you know, is already a significant and fast-growing activity for JC Deco with close at 90% of revenue coming from digital across 44 countries, leveraging our partners' data and enabling highly targeted contextual and programmatic DOH campaigns. Globally, the retail media market represents a $174 billion opportunity, including online. Retail media has already over-seconded TV in the US and is growing fast in Europe, a a major growth driver for DOH as 85% of retail sales still take place offline in stores. DOH retail media is expected to grow at 11.6% on a CAGR basis between 2025 and 2031. Combined with our broad portfolio of seeding retail partners, this position J.C. Deco very strongly to capture the acceleration of DOH retail media. Moving on to the next slide, 32, as you can see, airports remain a structural growth driver despite episodic crisis, and over the long term, air traffic grows by 3-5% per year, and the projections from 2025 to 2030 slash 2040 are very solid, including a plus 3.9% for 2026 and more than 23 billion passengers by 20. We are uniquely and extensively positioned to capture this growth as we operate advertising concession in 154 airports worldwide, including now 14 of the world's 25 largest airports. With the next slide, 33, we would like to illustrate how OH media, driven by digital, innovation, and growing audiences, continued in 2025 to gain market share in several major markets in the top 10. Over the past 10 years, OH has gained around 5 percentage points in the media mix in Germany, Brazil, and Australia, and added roughly 1 percentage point year on year now, accounting for more than 10% of the total main upcoming tenders. Among the most significant in street furniture are contracts such as Clépierre, a retail environment in France, transport for Greater Manchester in the UK, Hamburg and Dusseldorf in Germany, as well as Washington and Vancouver in North America. In transport, key opportunities include INR Spanish airports, Wiener Linen in Austria, Torino metro and buses in Italy, several major U.S. airports where we are not incumbent at the moment, such as Chicago, San Francisco, and Phoenix, as well as Hong Kong in Asia. On the next slide and moving into the sustainable part of our presentation as you know basically Justineco stand by being the sustainable media company. First we have a virtual business model. In fact 46.7% of our revenues is already aligned with the EU taxonomy through the financing of public transportation, and our 2050 net zero climate pathway approved by the SBTI target by 2025 versus 2020-19, a 68% reduction in emissions on Scope 1 and 2, and a 42% reduction on Scope 3. Second, as you know, we keep innovating to support the ecological transition. Beyond promoting public transportation, our bus stops are used to announce urban biodiversity, as illustrated by the pilot project we went in Paris in 2025. And third, we apply a robust approach to measuring our impact with the GCDECO 360 footprint tool, which covers carbon, water, and economic and social dimensions. This tool is already available in several countries, including France, the UK, and Brazil, and is being rolled out to additional markets from 2026 onwards. We also operate in an OOH market that remains highly fragmented, where we are the number one player and the only truly global OOH media company. We even see a form of deconsolidation, in fact some large U.S. players have scaled back their international presence. New names appear, such as Bauer Media, Al-Arabia, some Brazilian operators, but the overall structure is still that of a very fragmented market overall. These fragmentations leave ample room for us to grow, both organically and through selective consolidation. On slide 37, our key takeaways for today are as follows. First, saline underlining revenue growth in 2025, driven by digital despite the challenging macroeconomic environment, as we all know. Second, programmatic continues to increase its share within digital revenues. Then, strong operating leverage with a 150 basis points improvement in the operating margin, a continued tight control over OPEX and discipline-selective APEX allocation, 226 financial targets already achieved, one year ahead of plan, including an all-time high level of pre-cash flow generation. Then a dividend, as it was highlighted by David, will be proposed as the next AGM at 0.65 euros per share. Finally, with a solid business momentum in early 26, with no material impact observed to date from the recent Middle East conflict, We expect above 5% organic revenue growth in Q1-2026, including a positive impact from the 2026 Milano-Cortina Winter Olympics, and the revenue growth turning positive in China. Going forward, building on this momentum revenue, we expect to continue to gradually increase our key financial metrics, including margins and cash generation. We thank you for your attention and Jean-François, David and I are now ready to take your questions.

To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now take the first question. Coming from the line of David Amorim from Berengber, please go ahead.

Bonjour Jean-Charles, bonjour Jean-François, bonjour David. Vous m'entendez bien?

Oui, très bien.

Congratulations on the solid set of results. I have three questions, please. First, I know that you only guide by quarter, but how should we think about the growth for the rest of 2026? Q1 is the quarter facing the toughest comps. Should we expect growth above 5% level from Q2 onward as well? Secondly, in China, you mentioned a return to positive growth in Q1. Could we explain what changes are you seeing in the region and what is actually new or improving there? And finally, obviously, the advertising markets continue to be challenging, but momentum for JCDCO is improving.

What has changed in your discussion with your client between the start of this year and last year merci beaucoup thank you and i will take your first and third question and rasha will take the second one so the the guidance of above five percent does not benefit from the new contracts that we that we signed announced last year or only marginally so going forward we it's hard to predict obviously given the current geopolitical situation but what we can say is that from q2 q3 q4 q2 onwards we expect to have some tailwinds from the new contract winds including Barcelona, Stockholm. In the second half of this year it will be Carrefour because we need some time to build to build the new inventory as well as Denver which are significant contract winds which will fuel the organic growth rate. Pacing numbers right now for q2 are pretty strong and it's it's obviously impossible to predict if the oil price continues to be above 100 dollars per barrel what will be the impact on the economy and if the economy starts suffering worldwide it will have an impact on the advertising market and the core jesse lucro is not operating in a vacuum and we will be affected as well and so overall we are quite optimistic about 2026 and also you need to take into account that we already have about 20 million euros booked extra money extra advertising spent booked as a result of the World Cup which will take place in in North America as well as in Mexico so we have this effect as well which will mainly affect Q3 of this year. So overall 2026 and should be a good year for Jesse Deco. Having said that if the world economy starts to suffer from the geopolitical tensions in the Middle East this could have an impact as well.

On China three major drivers for this I would say positive in Q1 2026. The first one is, as you can imagine, and as we have highlighted this in previous calls, the gradual increase of digitization in our Chinese environment, both in airports and in metro, is clearly benefiting our growth profile in the country. Second, a bit more, let's say, optimism in some client categories and a big boost from the giant tech companies, which is interesting to see because we can see that in the US, we can see that in China, when the big names in the tech sector is really using our products and solutions in the different environments in China to boost basically their brand, to boost their solution to their audiences. And third, as you can imagine, the Chinese New Year this year was the biggest ever travel experience in terms of number of people moving around China. So those three factors are really helping the Q1 numbers. The key question will be, what about Q2? Q2 is also looking good, but still to be seen and early to be called. But basically, those are the three factors that are sustaining, basically, our positive return in the Chinese growth finally in our portfolio in China.

On your last question, no real change with our customers and clients, advertisers in terms of sentiment. Out of home remains an attractive media solution, especially given the decline of TV audiences. Free-to-air TV is in decline and we benefit from that, for example, in markets like Germany, Australia and highlighted by Jean-Charles in his presentation and ie the win of agency advertising spend which is very significant if you look at the last last years where share of ad spend continues to increase you should also take into account the fact that we've got a lot of new clients coming through the new trading trading channel which we call programmatic which is programmatic which is growing at twice the rate of digital which is now representing in the in Q4 of last year nearly 45% of sales so when you have digital growing at double digit I just want to remind you that we had a 16% compound organic growth rate in our digital segment when you have programmatic growing at twice the rate of digital it fuels the growth and that's why we are now firing on another cylinder which we didn't have a couple of years ago which is programmatic trading which is now representing 10 percent a bit more than 10 percent of our digital sales thank you thank you we will now take the next question

from the line of Marcus Dibble from JPMorgan. Please go ahead.

Hi, everyone. Congratulations on your results. Questions. The first question I have is on free cash flow. And David, there was obviously a very strong swing factor in terms of working capital, the 33 million. Conceptually, how should we think about working capital management going forward as well? if you can help us sort of like what you what would you say is a sort of like normalized working capital number um are there any one-off effects in in the sort of like impressive performance this year that would be quite helpful and maybe then one one question for francois on um the discussion about video yeah um slide 29 you were talking about adding another eight ssps could you tell us a little bit more about the sort of like development of other parties joining the platform that would be very interesting thank you okay thank you marcus uh david will take your first

question and i will answer the second one hello marcus working capital is always quite difficult to to forecast precisely as i mentioned during the presentation and as you were properly indicated in your question. The improvement in 2025 is mainly coming from the work we did on inventory optimization. Trees do not grow to the sky and we can consider at some point that our working capital is now broadly normalized. In 2026, working capital should normally roughly follow top-line evolution. And therefore, if the momentum we are currently having in our trading continue, the working capital should have a negative impact on the free cash flow in 2026. But obviously, we will continue to mitigate this impact and we will continue our active action in terms of working capital management. But when you look at our free cash flow before working capital, as i mentioned is is very strong at 284 million euros and so driven by a good operating performance and capex discipline we should continue to grow okay perfect can we just say just conceptually just since i have you that the cash conversion so free cash flow 26 should we assume broadly the same percentage of operating margins just conceptually we are not getting on that uh and

we should as i as i mentioned our focus and our target marcus is to continue to gradually increase our key metrics including our operating free cash flow and our and and our cash generation On your second question, Marcus, so SSView, as mentioned earlier by Jean-Charles, most connected supply-side platform in the out-of-home media sector, with 65 DSP connections, including DV360, and operating now in 35 markets. For many years, there has been some skepticism about the ability from view, given that JC Deco is the majority shareholder, to attract big out-of-home media companies, what we call third-party media owners. And so far, we were able to attract the small guys, as well as out-of-home media companies which are related to JC Deco, such as Metro Bus in France, where we have a minority stakes, and APG. The recent announcement by VIEW, it's inventory on the platform, it's very good news, and I think that this is driven, I cannot speak on behalf of you, but I think that this is mainly driven by the fact that those American billboard companies are lacking some international view in China and that Chinese brands are expanding think of BYD but you name it there are some other brands as well is I think one of the main reasons why those companies are now interested in joining VIEW in order to capture international out-of-home media spent which will be traded programmatically so we are having this they are having discussions with some other big out-of-home media owners are looking promising but it's it's obviously quite in a significant event for VIEW now to have the out front inventory which is the second largest billboard company in the US after Lamar on on its platform and again it's mainly due to the fact that we are the view is now the leading SSP in many over 35 markets around the world perfect thank you thank you we will now take the next question from the line of James Tate from Goldman Sachs.

Please go ahead.

Thank you. Good morning, James Tate from Goldman. I had a few questions, please. I guess, firstly, could you just talk a bit more about your exposure to the Middle East? I think it's around 5% of revenues. I guess within the mix, which Middle East countries do you have the greatest exposure to? And is it mainly within airports? And I guess, what impact have you seen to current booking trends as escalation in the conflict a couple of weeks go any color here would be very helpful and secondly on EBITDA you know that was much better than expected for 25 and ahead of your 2026 targets I think you've guided to a gradual increase going forward could you give some more color on the moving parts of 26 in particular and perhaps remind us what the right way to think about the normalized thought through of revenue to EBITDA thank you James Jean-Charles will take your first question on the Middle East and I take the second one on the APTA.

So on the Middle East question James, so the Middle East represents a bit less than 5% of our total revenues. Today the Middle East region is reported within the rest of the world. In the Middle East we are mainly operating in the airport environment. And our major exposure is in Dubai, in the Emirates, followed by basically, to a lesser extent, Saudi Arabia, in Qatar, and in Oman. You're right in your question to say where we are the most exposed. I mean, today what we have to understand about the Middle East situation is that depending on the country, the conflict does not have the same intensity, so today Saudi Arabia, Oman is less exposed, more exposed Abu Dhabi. Our view is that in our guidance for Q1, but if the conflict continues, EA intensifies, it will have an impact on our business and so we will try to deal as we have always done it before with our clients with our partners at the airport where they are partners so discussion and we will do our best to mitigate obviously. I think the Middle East remains a region where SSO and so the people are calm, our Our teams are distance working at the moment for security reasons, but the business is operating normally, even though obviously the situation is quite tense in some countries. So that's what we can say today. To say more than this will be certainly political fiction, because things can change by the day, obviously. and so we have to be very reactive, we have to adapt ourselves. Our people are safe at the moment, but they are prepared because this is a region where tensions are before so far. So that's where we are at the moment.

So limited exposure, but an exposure, and the key question will be the duration of this conflict. that there is no doubt of JC Decaux that we want to continue to improve our operating margin rate which is at 20.9% meaning above 21% going to 22% we can't give you a timetable on this obviously we have the major contract wins which will impact the operating margin rate to start with during the ramp-up phase. As you know, we are not getting 100% of the revenue in year one. And the so-called ramp-up phase means that we are not able to optimize the operating margin on this contract. and that has obviously at the beginning some impact on the overall operating margin rate of the of the company having said that as mentioned in our you know press release we want to continue to gradually increase both the overall number as well as the operating margin rate and we are working out on that as demonstrated in 2025 where in the end we ended up being one year ahead of our target but we cannot give you any guidance on this but be assured that we are working very hard to continue to increase both the overall number as well as the operating margin rate thank you we will now take the next question from the line of Jérôme Podin from Odo BHS.

Please go ahead.

Yes, good morning all. Three quick questions on my side. The first one is on the CapEx for 2026. So what should we expect given the contract that you recently won? And is there any add-on linked to AI? And maybe more generally, Could you make an update on the CapEx requirement and demand that you see regarding the ongoing call for tenders? That's my first question. Second one on VIEW. So you mentioned the nice partnership that you signed with bigger players. Could you just make an update on the capital structure? Because I remember that a few years ago you were open to open the capital structure, which has not been the case. Is it still a project or not anymore? And lastly, maybe just a general update on the fees. So you made a lot in the last few years in terms of restructuration and reduction of the minimum guarantee, especially in China. Is there still to come or most of it has been finished now?

Thank you, Jerome. David will take the first one. I'll take the second one and Jean-Charles the third one.

Edo-Jérôme, regarding your colleague, we are working hard in 2026 to remain or to keep our capex level in a range of 7% to 8% of the revenue, as you mentioned with new contract deployment. Potentially, this will push the capex towards the top of the hand. Regarding the profile of the capex, we will continue to invest around 40% of the total capex into digital. Regarding AI, we are investing quite a lot in our IT system, as you know. AI is included in our IT and technology call investments has grown over to continue to be or to stay in the same range as what we are currently. We are investing about 3.5%. Our cash out in IT is about 3.5% of our total revenue and will remain in this kind of end.

On your second question regarding VIEW equity, JC Deco remains the majority shareholder. I just want to repeat that the press release on the partnership with Outfront didn't come from JC Deco but from VIEW. Reason being that the company is a separate company. We have an independent chairman who used to be the leading outdoor advertising guy at WPP Group M. I think that also is a reason why the big guys are more relaxed about them joining. We never get any specific numbers on their trading volume so that it's truly an independent company despite the fact that we are the majority shareholder. So far, we haven't had any discussions on them joining as an equity partner. Having said that, that could change in the future. Bearing in mind that there is also an ongoing consolidation in the sector, which because there are too many SSPs, there is also consolidation on the DSP side. So it's too early to tell you whether or not some third-party media owners will not only join the SSP platform view by putting their inventory on the platform, but also by becoming an equity partner. We would certainly encourage this move because at the end of the day, it's a long-term goal, but we want to become the DV360 of out-of-home media. That's the goal. And given that our inventory is, for example, in transport sector competing but not competing because most of transport franchise agreements are exclusive. So either you have Paris Charles de Gaulle Airport or you don't have it. Either you have Heathrow or you don't have it, either you have New York or you don't have it. Meaning that the inventory is very complementary between, for example, in the U.S. Clear Channel Airport and Jay Sudoku Airport. Of course, we are competing from the franchise. We just won Denver against Clear Channel, which was the incumbent. But at the end of the day, when the Chinese brands wants to use this channel, it obviously makes sense for them to use the SSP, which has the best connections with, or which has the best inventory, airport inventory worldwide, by adding their airport footprint. Because at the end of the day, we don't have New York anymore. So rather than having different SSPs and having to deal with two different SSPs on Chinese brands trying to advertise in New York, then having just one kind of a one-stop-shop solution, SSP solution, offering them the biggest airport platform, mixing Clear Channel or some other third-party media owners, which have some other airports as well, makes common sense. So, therefore, I'm quite optimistic that we will manage to get some more third-party media owners. And I think they realize now that what we said from the beginning, that we want this company to be independent and to be trading also in the interest, not only of JT Le Co., but also in the interest of third-party media owners, is reality. It's not bullshit.

On China, so the situation on China is that, regarding your fees-related question, Jerome, Most of the fee-based after COVID and so on is over now. I think now we are on a strong business again, but on the fee, most of it has been done. And you always have on the portfolio of so many contracts all over the world, fees assessment and discussion, depending on different, for example, will be an obvious one, depending on the duration of the crisis and the magnitude of it depending on the contract so it would be a contract or contract analysis in the best interest of of the stakeholders at the moment is work is in progress or in china thank you very much thank you we will now take the next

question from the line of Connor Oshie from Caprice Evrae please go ahead yes good morning everybody thanks for taking my questions and congratulations on the results three three questions from my side firstly on the on your biggest client sector luxury and fashion 18% of revenues I think Jean-Francois you mentioned uh minus five percent uh in 25 you've seen that uh spend we can further uh i think there's some reports um from within and without that sector that uh spend is under incremental pressure or is that not uh what you're seeing at the moment uh second question just in terms of the contribution uh from the new wins uh the the most significant ones denver stockholm and so on and and the sports events um on a full year 26 basis uh if we could just get a sense of that uh i appreciate the 20 million number on the fifa world cup but if you could maybe just round up and get a rough estimate of how much that's contributing in 26 um either on a reported basis or on a run rate basis that would be great and then just the final question just i think it's implied by your comments in the q2 but just just to check in the q1 uh was the trading in terms of growth uh quite even from january february march uh you know across the months um just just a

little bit of color and that would be would be helpful thank you okay thank you uh jean charles will take the luxury question i will take the second one on the new wins and david will take the third one on Q2. As a matter of fact, Connor, good morning.

We basically on the luxury brands, so the dynamic remains, I would say, very solid. The minus five percent that was highlighted in our presentation this morning and commented by Jean-Francois earlier in the presentation has to be taken into account of a very strong Olympics Paris event in 2024. So So the minus 5% was also impacted by this predominance of events in Paris, which is in the world. So that was impacting, but so far we don't see any slowdown, I must say, around the globe, number one. Now again, coming back to the 5% for the luxury brands as a whole, I'm not talking about specific groups, it's also less than 5% of their revenue exposure. So it's an important region obviously for everyone. It's a region where Europe could be. So that's what we can see on the luxury brands. I think our solutions and our products remain very attractive, especially what we see is that we see in some other hubs around the world more and more luxury brands.

Your second question, so I can confirm that the 20 million euros benefit from the World Cup. positively the US and Mexico. Regarding the contract wins, there has been some delay both in Barcelona as well in Stockholm. I remember Stockholm was announced in 2024 and was signed late in 2025 due to a legal challenge from the incumbents. We were not the incumbent. Same in Barcelona. A contract was signed recently as a result of a legal challenge from our competitor, the incumbent because we were the incumbent in Barcelona so this means there's been some delay in both signing the contract following the award and as a result the deployment of the digital screens will not happen for example in the Stockholm Metro before probably the beginning of Q3 bearing in mind that we are going to be deploying the largest cross-stripe digital screens ever installed in the world 18 square meter at the platform cross track is going to be hugely impressive so we have to sort out some technical issues because as long as the contract was not signed we didn't have access to the to the platform into the engineers working for SL SL is the RATP of Stockholm in Barcelona we have as indicated in our press release a very significant digitization plan we've at least 300 digital screens, which will complement Madrid, where we have a strong position with the Barcelona and the underground. So that's why it's very hard to give you a number at this stage, as opposed to the World Cup due to this postponed signature of the contracts. But if we were able to give you a number, obviously we would, but at this stage it's very hard to give you a number. but nevertheless this will be a tailwind for the organic growth in 2026 okay and also 2027 presumably given this staged rollout okay okay thank you regarding your question on the q1 trading across the months what i can say is the start of the year was was quite positive across all business segments.

The month of February was quite good. Digital revenue growth, mainly driven by the transport business segment and China with the Chinese New Year that has been mentioned by Jean-Charles before and also to a lesser extent with the impact of the Winter Olympic Games in Italy. And regarding the month of March, you know the jury is still out. The momentum is positive, especially on street furniture and on the street furniture business segment. The quarter, only two geographies, one geography is suffering a bit in Germany, having some headwinds, but otherwise, across all geographies, the momentum is quite good and March is going into the good direction in order to deliver the guidance.

Just to complement on what David just said, obviously the trading timing varies from market to market, but to give you an example, in the UK, which is our second largest market, we do 25% of the revenue of the month in the month. So when David tells you that March is still, obviously we are pacing well, but it's still not done. In a market like the UK, a quarter of the revenue of the month is done in the month. So that shows you the short-term nature. France is a completely different story. We are more advanced in France due to various reasons. But there is this short-term nature of our business is very different from market to market.

Okay, very clear, very helpful.

Thank you. We will now take the next question from the line of Bern Clanton from Barclays. Please go ahead.

Yes, hi, morning, everyone. Thanks for taking my question. I think most have already been answered, to be honest, but just a final one from my side.

On your retail media initiative, Can you remind us of the expected contribution to revenue and also maybe how we should think about the impact on rent and fees in that front?

The only thing is we don't disclose the sub-segment. We don't disclose. And so I can't really give you... This is growing. So it's a business model that is in business, as you know, of the clients because of the nature of the profile of the audiences and because of the quality of the data that we are to understand that when we do a retail media deal, whether it is we spend our own retail...

Thank you very much.

We will now take the next question from the line of Nidla Neisser from Deutsche Bank. Please go ahead.

Great, thank you. I also just have two more questions remaining. The first, thank you for the colour you gave on the fees in China. But my question is, are you actively also looking at renegotiating and lowering your fees, lease expenses in other parts of the world as well? And how could this be a positive sort of contributor to margins in 2026? Some color on your efforts there would be great. And second, on the AI solutions that you described, they're all quite interesting. I just wanted to check if this is also going to be used as a tool to go after more small and medium-scale clients globally to sort of get them onto the out-of-home inventory space a bit more aggressively as well. What are you thinking in terms of the impact that could bring if you go after more SME sort of clients with these new AI initiatives? Thank you.

Okay, I'll take the first one. Jean-Charles will take the second one on the small SME, basically the long tail, which which is the strength of the large online companies such as Google and Facebook. On the first one, a contract is a contract. So the renegotiation which was done successfully by the teams in China was led by the fact that there is a new China, that the consumption is not what it used to be, and therefore our landlords in the end agreed that the reset was necessary bearing in mind that in a lot of Chinese contracts we had a joint venture so we're in equity partners with the our landlords and the other example which I can give you about reset was the COVID we see we had as you know a very major reset strategy during COVID very successfully in some regions but not so successfully in other regions and so once the contract is signed for 10 15 or 20 years we are bound to the terms and conditions unless there is a significant event which allows us to renegotiate the contract in good faith so don't expect a major contract renegotiations in other parts of the world obviously having more nearly 4 000 cities 157 airports there is always and some some reasons to uh and renegotiate middle east will be obviously will be one if airports are being closed because of or having less passengers as a result of the ongoing war with Iran, then our teams will obviously start renegotiations of these contracts. But apart from those external events and some other Amsterdam with the ban on fossil fuels, which hasn't been enacted yet, well, there is no doubt that we will, even if it has not such a significant impact on the top line. It's a decision by the authority to restrict the abilities to sell to all categories, such as a couple of years ago in London with HFSS, and this is another reason where we can have some renegotiations. But those renegotiations are reflecting the fact that we cannot maximize the revenue, so it's a good faith renegotiation, but But the top line has some negative impact, is negatively impacted by those local events such as bans, and therefore the renegotiation is, in our opinion, a normal renegotiation between partners, long-term partners. But having said that, it doesn't necessarily trigger a better profitability because the top line is missing some advertising spend from those categories which are banned. But this is against very local, for example, HFSS, which was done in London, didn't happen in many markets around the world. So there is no, you cannot take from what I say, the kind of a trend regarding bans of certain categories around the world.

Different aspects. First of all, AI is in action at the moment within the group, is in action obviously also within our ad tech platform in other words campaign creation and planning first ESP in the market to optimize planning and training through a simple prompt in this place so we are trying to basically simplify the media buying on the out of home we also add an initiative which is interesting with ai inside obviously with the creation of tailor-made visual customized for each location for both print and digital campaigns and this is already done in action now we have to scale it up we have to make it even more efficient if we change the way for your question on the platform to access basically the international clients thank you very helpful thank you we will

We will now take the next question from the line of Laurent Gilles-Lebarre from BMP Paribas. Please go ahead.

Good morning all. I have three questions. The first one, could you elaborate on your new global programmatic offer targeting street furniture, transport and retail at the same time? I know it is a fairly recent offer, but what is the market response and what do you expect mid-term on this initiative? The second one regards cash proceeds from APG SGA. So what are you going to do with this? And the third one regards view. If other equity partners join the party, do you still wish to keep the control of these assets?

Okay. I'll take the first one. The second one, cash proceeds, will be taken by David. And Jean-Charles will take the third one.

The first one, my answer will be very quick. it's too early to give you any response on this one second one regarding APG the procedure of APG I have to just mention that the transaction is not yet done it is clearly going into the good direction since a APG as the approval from the APGEN, AGN on the opting up mechanism. To your question what we will do with the cash proceed, we will do exactly the same as we did with the proceeds from the first transaction. We will invest in our business with higher returns than that we could have with this cash. So it will be reinvested in the business.

I think it's worthwhile mentioning that selling at 220 Swiss francs per share, the multiple that we get from this divestiture is between 13 and 14 times. So it was an opportunistic decision to reallocate the cash in markets where we need to speed up the digitization and as you can see selling a minority stake at 13 times reflects the quality of the asset apg which has been in business for the last 126 years created in 1900 but the company is not growing it's a mature market so we felt at the board that it was a wise decision given that we received a very attractive offer and if you consider that we are trading at between five and six we used to be trading at nine times clear channel was sold to Mubadala at 12 12 plus 12 and we are selling a minority stake and in Switzerland at nearly 13 and 14. I think it's a good trade for us and so that's why we we did it and we are expecting now the the antitrust decision in Switzerland which should happen soon.

So regarding the shareholding structure of view, you remember that we always said that basically we will take an entrepreneurial view on creating this SSP back six years ago now, a bit more than six years ago, seven years ago. Number one, number two, you're right to said that we are the majority shoulder we have more than 95 percent of the shares of this company but we want to operate it independently as it was said before for obvious reasons and for the benefit of obviously all the stakeholders taking part on view and I think more and more are coming as you can see from all over the globe and all over the world and finally we are open-minded to continue to grow this platform. It is clear that from 95% shares a bit more to remain majority shareholder is something that we will consider. But if there is a transaction that makes sense to grow, to transform the business and to boost basically the programmatic revenue, we will consider anything that makes sense to boost basically our programmatic development and the programmatic development of the industry because we think that this is clearly something that could be a game-changer given the magnitude of the market to really help boost out-of-form advertising in terms of market share. So as you know in GCCCO I think we have two things that will always remain, entrepreneur vision on anything we do and second very pragmatical approach on everything we look at when it comes to transforming basically existing businesses in making it bigger for the whole industry. So Vue is bigger than us impacting a lot of interest from third-party players as you can see the one side very diversified in terms of geography so practical approach if at some point we have something we can do something which makes sense to boost this business and it's only the beginning and because this is running year-on-year thank you very much we will now take the last question from the line of Eric Ravary from CIC CAB please go

ahead yes good morning so I have several questions on view to assess the operating leverage potential of the business so what is was it profitable in 20 25 and could we have a sort of magnitude of the EBITDA of you last year and also the number of people you have in in view and your plan for you hiring in 2026 and also the kind of operating costs you expect on VIEW this year. Thank you.

David? As we said, I think I remember we had the question, it was in the Alphir result, 2025 was the year where VIEW turned slightly positive in terms of ABDA, still in cash in order to invest in the platform, to turn positive in terms of cash very soon. But when we look at the profitability of the platform at consolidation level, group level, as you know, 50% of the revenue is incremental that we get from Programmatic. It benefits to our group operating margin, quite accretive revenue stream. looking at the headcount we are quite maturity but we have reached a level platform where we continue to develop the platform with the current team obviously we could have some there are no further questions at this time i would like to hand back over to

jean-franchois deco for closing remarks okay thank you thank you for your questions and I don't have anything else to add because the questions covered pretty much all the important topics, so all the best, have a nice day, and talk to you soon. Bye everyone.