JCDECAUX SE (DEC) Q2 2026 Earnings Call Transcript

Good morning, everyone, and welcome to our 2026 Half-Year Results Conference Call. The speaker on this call today will be Jean-Francois Decaux, Co-Chief Executive Officer, David Bourre, Chief Financial IT and Operation Officer, and I. Rémy Grisard, Head of Investor Relations, is also attending today's conference call. We delivered a strong performance driven by digital in the first half of 2026. Our revenue reached €1,953,9 million with a continued solid revenue momentum as organic revenue growth reached 5.7% despite an uncertain macroeconomic and geopolitical environment. Organic digital revenue grew double-digit by 14.5% and now represented 42.8% of total group revenue. Within digital, programmatic organic revenue was up 30.9% and accounted for 12.3% of our digital revenue. This confirms, once again, that digital and especially programmatic is a powerful growth engine and a key growth driver for our group. Leveraging our revenue growth and focused and disciplined execution, we achieved double-digit growth across all our key operational indicators, demonstrating our strong operating leverage. Our operating margin was up 16.8%, reaching $359 million. Our recurring EBIT was up 53.5% at $136.2 million. Our net in-group group share was up 84.7% at $140.1 million, and our operating cash flows were up 41.8% at €218 million. Finally, and importantly, we delivered a $91.1 million year-on-year increase in free cash flow reaching $26.2 million in the first half, which is a positive free cash flow despite the usual seasonality of our business. David, obviously, we'll come on this strong financial performance in more details later in the presentation. H1, our strong, profitable growth trajectory with digital as a key driver. Moving now onto the slide number five and looking at our top-line dynamics for H1 and Q2. For H1, we delivered 5.5% organic revenue growth, confirming a solid start to the year as Q1 grew also by 5.7% organically. This performance reflects growth across, again, all segments and geographies, with digital as the main driver of this great momentum. Turning to Q2, organic growth was also 5.7%, which is well above our guidance of around plus three, despite the conflict in the Middle East. This strong Q2 was driven by digital and by the 2026 FIFA World Cup beyond our initial expectation, which supported advertising demand in several key markets. By segments on the next slide, street furniture maintained a very strong momentum with reported growth of 5.3% and organic growth of 7.3%. This confirms the robustness of our core business, supported by both analog and digital in a context where urban audiences remain highly attractive for advertisers. Transport continued its rebound, with reported growth of 4.8% and organic growth of 5.3%. Headboard returned to growth, with reported growth of 1.2% and organic growth of 0.8%. This reflects a more disciplined and selective approach to our inventory, particularly in France, while still capturing opportunities in the most premium location and in the most digitized market. Slide number seven, you can see that growth in H1 2026 was well-balanced across geographies. North America at 19.6% organic growth, supported by the 2026 FIFA World Cup, and the United Kingdom at 12.8% were the fastest-growing geographies, both driven by digital. Rest of Europe grew 7.8%, confirming solid momentum across our European footprint, including in the southern part of Europe. Rest of the world grew by 3%, 18.3%, excluding the Middle East. Asia-Pacific grew by 2.3%, including low single-digit growth in China. France declined by 1.9% impacted by the high non-advertising revenue comparison base, while advertising revenue grew by 1%. This, again, demonstrates the strength of our geographically diversified model, especially relevant in the current environment, marked by geopolitical and macroeconomic tension in some geographies. As you can see on the next slide, we are not only well diversified geographically, but also by activities. Street furniture remains our largest segment, accounting for 51.3% of total revenue. Transport represents now 35.3%, still below its pre-COVID share, but continuing to recover, while Billboard is at 13.4% in line with our focus on premium and increasingly digital assets. On the right-hand side, you can see our geographical footprint. Europe represents 47.7% of total revenue, with France at 16.5% and the UK at 10.8%, making them our two largest countries. Asia-Pacific accounts for 20.3%, including less than 10% in China, the rest of the world 13.1%, and North America 8.1%. This, again, confirms our unique, balanced, and truly global OH media footprint. Turning to the next slide, our client portfolio remains, as you can see, highly and well diversified, with our top 10 clients accounting for less than 12% of our group revenue. We continue to see, obviously, a healthy rotation between categories. Telecom and technology, up 19% was particularly dynamic, driven by campaigns from tech companies, including generative AI brands, a picture here in the metro of Sao Paulo, which accounted for up to 30% of sales in the tech capital of the world that we cover, such as San Francisco in the U.S. and Shenzhen in China. We see a comeback of branding for consumer goods, as shown in the 13% growth of food and beverage and the 9% growth of retail. Meanwhile, finance is getting very competitive with the rise of online platforms, and we It benefited from higher marketing budgets as this category grew by 15%. Patient, personal care, and lunchery, our largest category at 17% of revenue, was stable year-on-year. On slide number 10, as you can see, DOH remains a key growth driver, with organic digital revenue of 14.5% in H1 2026. Digital revenue penetration continued to increase. It reached 42.8% of total group revenue in H1 and 43.7% in Q2 2026. Our digital revenue mix also closely mirrors our overall business mix with street furniture representing 49.1% of digital revenue, transport 39.6% on billboard 11.2% as shown on this slide. Over 10 years, our digital CAGR reaches 16%. Digital penetration increased again across all three business segments in H1 2026. In street furniture, digital revenue reached 41% of segment revenue, up from 37.5% a year earlier. In transport, our most digitized segment digital grew from 44.5 to 48.1, and in billboard, digital penetration edged up from 35.4 to 36.1. This confirms the steady rollout and success of our digital assets across the portfolio. Let's move now onto the programmatic at the tiding, which remains our fastest growing revenue stream. In H1 2026, programmatic revenue reached 102.8 million euros, up 30.9% organically versus H1 2025, and now represents 12.3% of our digital revenue compared with 10.1% a year ago. This growth is supported by our announced capabilities. We are now connected to 50 DSPs and over 3,050,000 screens, including more than 35,000 G-Seloco screens in 48 countries across five continents, as well as 48 third-party media owners on view and eight third-party SSP on display. As you can see, programmatic revenue remains largely incremental, especially from smaller advertisers and highly targeted campaigns such as the campaign picture here, which shows only during the Marathon of Stockholm on key location for the runners. We anticipate also continued strong growth for programmatic revenue And this is illustrated by the important gap today between countries where Germany at 42.7% and the Netherlands at 30.8% are well above the group average of 12.3, while some major digital markets like the UK and the U.S. have not yet fully embraced programmatically. The PDOH campaign you see on the right in Oslo is a good illustration of this momentum in our most advanced markets. we expect programmatic penetration to continue to rise in the medium term to represent more than 20 percent of our digital revenue while the contract activity has been quite limited in this half year on this slide we wanted to zoom in one one in on one flagship example of our commercial momentum the renewal of our long-standing partnership with isro where we have secured a new eight-year advertising contract, which means we will continue to operate the media in what is both the UK main international gateway and the world's most connected airports with more than 80 countries served and close to 85 million passengers last year. This, again, renewal, is a good illustration of our ability to not only retain key strategic contracts, but also to further strengthen our leadership in the airport growing segment. On this slide, number 15, we highlight the strong potential of DOH retail media for JEC Deco. Our new exclusive partnership with Carmilla Carrefour now being deployed with Unlimitel is a key milestone. It will create a new data-driven DOH network across shopping centers on retail access points in France and Spain over the next few years, as illustrated by the example you'll see here in the Carrefour Camilla Mall in Toulouse. Retail media is already, as you know, a dynamic and mostly digital activity for JC Deco, with around 90% of revenue coming from digital across 44 countries, leveraging our partners' data to deliver highly targeted, contextual, and programmatic DOH campaigns. Globally, retail media represents a $174 billion U.S. market, including online, and remains underpinned by the fact that around 84% of retail sales still happen in stores. DOH, retail media, is expected to grow at around 11.6% CAGR between 2025 and 2031. Combined with our broad portfolio of leading retail partners, this positions JC Deco very well to capture the acceleration of EOH retail physical media. On slide 16, we have once again confirmed our excellent EAG performance. Our extra financial ratings remain based in class, with JC Deco included on the CDPA list 2026 on 80 over 100 gold, top 5%, rating from ECOVADIS the highest AAA rating from MSCI, and an 11.1 low-risk score from sustained analytics, all significantly above the media sector averages. More broadly, I would like to emphasize that OOH continues at GCDCO to be one of the least carbon intensive media for advertisers on the slide 17 this slide illustrates the strengths of our corporate culture through a selection of awards won by our teams across the world you can see that our subsidiaries are being recognized on multiple fronts for innovation and technology for example in ai driven tools media tech or digital experiences for creativity and campaign effectiveness, including international creative awards, or for commercial excellence with several sales house of the year-type distinctions. This recognition, from Europe to Asia Pacific and the Americas, demonstrates a high level of engagement and expertise of our teams and supports our positioning as a premium innovative partners for cities, transport authorities, and advertisers. I will now hand over to David to comment on our financial highlights.

Thank you, Jean-Charles.

Hello, everyone. On this first slide, you can see the main financial KPIs for the first half of 2026. As you can see, we delivered a strong set of results with a strong growth across all our key indicators. Revenue reached almost €2 billion, up 4.6% on a reported basis, with organic growth of 5.7%, which has been already largely commented by Jean Charme. FX had a negative impact of circa 100 basis points, around €21 million, but with no significant impact on margins due to our natural edging. At the same time, our operating margin, EBITDA before impairment, and net income grew much faster than revenue at plus 16.8%, plus 56.1%, and plus 84.7%, respectively. Cash flow also improved significantly in the first half, turning positive despite the usual seasonality of our business and leading to lower net debt year on year in summary this clearly shows a strong operating leverage of our business model let's now have a look at each item in more detail starting with the operating margin on page 20. on this slide you can see the evolution of operating margin. It increased 16.8% from 307.4 million to 359 million euros. This is a strong result, especially when compared with revenue growth of 4.6% and shows, once again, the strength of our operating leverage. There are two main reasons for this improvement. First, our rents fees increased at a lower pace than revenue, at plus 3.4%, despite new contracts such as Barcelona and Stockholm, which are still in their startup phase, and also some pressure on prices due to the macro and geopolitical situation. Second, we kept tight control of other operating costs, with an increase limited to 0.9% As a result, our operating margin rate improved by 190 basis points from 16.5% to 18.4%. And as you can see from the chart on the right hand side, this improvement was visible across all segments, mainly driven by top-line growth in street furniture and transport, and for billboard by the rationalization of our inventory portfolio in France and our most digitized market. Let's now move to EBIT. On this slide, you have the EBIT bridge. Starting from an operating margin of $359 million, we deduct net amortization and depreciation as well as per-part maintenance, both increased year-on-year by 4.8 million and 0.8 million euros, respectively, or plus 2.4 percent and 3.2 percent, which is, again, slower than revenue growth. This brings us to recurring EBIT of 136.2 million euros compared with 88.7 million last year, an increase of 47.5 million or plus 53.5% year on year with a margin expansion of 220 basis points from 4.7% to 7%. Below recurring EBIT, we have positive non-recurring items for 60 million euros, including a 47.5 million capital gain from the sale of a stake in APG SGA. The year-on-year increase in non-recurring items was nevertheless limited to 23 million as H1 2025 also included some one-off asset sales and reversals of dismantling provision linked to contract expiry. After non-recurring items and impairments, EBIT reached 192.5 million euros, up 52.4% compared to last year. In summary, a strong operating leverage, not only on operating margin, but on EBIT as well. Let's now move to net income, page 22. On this slide, you can see the bridge from EBIT to net income. Here again, the message is clear. The strong operating improvement also led to a strong increase in net income. Between EBIT and net income, there are two main points to mention. First, the financial results improved by 8.9 million euros, mainly due to lower interest expense, thanks to lower IFRS 16 lease liability and financial debt. Second, we had a higher tax charge, reflecting our improved results, with an effective tax rate of around 16% compared with 16.4% in H-1 2025. As a reminder, H-1 2026 benefited from the non-taxable capital gain on EPG, SGA. Excluding that effect, the 2026 H-1 effective rate would have been around 22.4%, an increase from last year, reflecting the geographic mix of profit generation. So, at the bottom of the table, reporting net income group share reached $140.1 million, up 84.7% year-on-year, and up 23.3%, excluding the APG capital gains. So overall, the solid underlying earnings. On the next slide, we move to cash generation. As you can see at the bottom of this slide, the free cash flow improved strongly in the first half by 91.1 million euros. The first result is that higher operating margin led to higher operating cash flow, which improved by 64.2 million euros year on year. The operating cash flow also benefited from favorable impact in the line of other items compared with last year, mainly due to higher dividend received from affiliates, one-off bank fees paid in H1 2025, and lower restructuring costs. The second reason is better working capital management than last year. This is a good result, especially because in June we had a higher level of revenue linked to the FIFA World Cup and also a higher level of inventory linked to new contract rollout, mainly Carmilla in France. Last but not least, net capex came to $115.6 million below the same period last year, both in absolute terms and as a percentage of revenue at 5.9% versus 6.4% in H1 2025. Now, this partly reflects lower sales of assets than in H1 2025 that I have mentioned before, and also some delays in the rollout of new contracts, which also explains the increase in inventory that I have just commented. So, our free cash flow turned positive in H1 2026 at 26.2 million euros, which is quite positive at this period of the year, and confirms our ability to generate strong free cash flow through strong profitability combined with strict discipline on capex and working It is also worth noting that the cash flow before changes in working capital requirements almost tripled, rising from 35 million euros in H1 2025 to more than 100 million euros in H1 2026. Finally, on this last slide, page 24, you can see our strong financial structure. First, net debt decreased by €284.1 million compared with June 2025, and by more than €200 million after excluding the €79 million proceeds from the sale of the APG. Compared with the end of 2025, December 2025, net debt increased by $41 million, but this is quite normal at this period of the year, given the dividend payment in May for $150 million and the seasonality of the activity. Second, our liquidity remains very solid with 1.28 billion euros in cash, a fully unused 825 million euros revolving credit facility. Our debt profile is also solid with an average maturity of 2.6 years and 92% of the debt had fixed. Finally, both raising agencies improved their outlook from stable to positive, which is a good sign of the strength of our financial profile. So to conclude, we delivered a strong first half with a very good combination of strong revenue growth, strong profitability, strong cash generation, and strong balance sheet. That's all from my side on the financial, and I will now hand to Jean-Francois Lecaux.

Thank you, David. Good morning, everyone.

One, out-of-home media is more than ever a growth story, supported by increasing urbanization and mobility, rising audiences, and the premium nature of our assets and their fast digitization. As shown on this slide 26, WPP Media, the world's largest media buyer, forecast in its latest June update, digital out-of-home to grow by 7.2% CAGR over 2025-2030, with total out-of-home expected to grow by plus 5.2% CAGR over the same period. This robust growth trajectory clearly sets out-of-home apart from other traditional media, many of which are facing structural stagnation or decline moving to slide 27 which highlights the strong runway for digital growth across our major markets by combining ongoing screen deployments programmatic capabilities data and now ai we continue to expand our digital footprint even in our most mature markets as you can see on the left top performers like brazil 83 percent the uk 77 percent and the us 76%, are leading the way with digital penetration well above our group average of 43%. What makes this picture particularly compelling is a substantial upside that lies ahead. Key markets like China at 41%, Spain 39%, Italy and Austria 28%, as well as France at 9% remain below the group average. In France, our largest market, digital penetration stands at just 9%, largely due to the historical regulatory frameworks. Slide 28 illustrates our end-to-end ad tech ecosystem. On the far left, we capture demand from global agency groups, independent players, and digital-native buyers. In the middle, our platform strategy spans both sides of the ecosystem. On the demand side, this place acts as a leading DSP for out-of-home. On the supply side, VIEW serves as an open SSP, leveraging both Jesse Deco and third-party media owners to global demand with the highest number of DSPs connected in the market. In addition, the number of third-party media owners on VIEW has doubled, from 20 to 49 today, including out front, demonstrating its strong market appeal. Moving up the value chain through view and displays was a deliberate strategic choice to capture value at every transaction step rather than leaving margins on the table. Today, this open full-stack infrastructure remains a unique competitive advantage, perfectly positioning us to capture the long-term structural growth of programmatic out-of-home. It is worth noting that Jesse Deco is ahead of the game, with 12% of its digital revenues being traded programmatically, versus 7% for the sector as a whole. On slide 29, our conviction remains that AI is first and foremost an enabler for us. Our assets are physical in cities, transport networks, and billboards. AI will transform the way we work by automating processes and improving the productivity of our media, but it will not replace premium real assets such as bus shoulders, metro networks, airport screens, or large billboards. The large format digital screen you see here in Melbourne are a good example of these high value assets in which we continue to invest. On this slide, we highlight a few concrete use cases. In campaign planning and trading, our tools can now optimize the whole process from planning to booking and delivery through a simple prompt. In dynamic content creation, AI allows the generation of telemade visuals customized for each location for both print and digital campaigns. And for content moderation, AI automatically screens creatives to pre-approved visuals and speed up validation. Our physical assets are therefore structurally resilient and AI enhances their value by improving productivity, targeting, and measurement moving to slide 30 airports remain a structural growth driver despite episodic crisis over the long term air traffic has been growing by around three to five percent per year and forecast remains very soft with passenger expected to reach 12 billion in 2030 and over 20 billion in 2050. on july 23rd global air traffic reached a record high with 153,359 aircraft simultaneously in the sky. We are uniquely positioned to capture this growth as we operate advertising concessions in 154 airports worldwide with 14 of the top of the world's 25 largest airports, including Denver, which will start next week, meaning nearly a six-month delay, as mentioned by David. Moving to slide 31, which outlines our main upcoming tender pipeline across our three business lines. In street furniture, key upcoming opportunities include the Paris CIP, meaning freestanding structures and columns, the unlimited in-store retail network in France, transport for Greater Manchester in the UK, Hamburg and Dusseldorf in Germany, The Hague in the Netherlands, as well as Wiener Linen and Vienna freestanding advertising structures in Austria. In transport, major tenders coming up include Amsterdam Schriempel Airport, A&R Spanish Airports currently suspended, Hong Kong Airport, and several key U.S. airports such as Chicago, San Francisco, and Phoenix, where we are competing as non-incumbents. Finally, in Billboard, notable opportunities include the private land contract for the city of Paris, as well as transport for New South Wales and Australia. Moving to slide 32 on our ESG leadership, we are a sustainable media company. First, 46.7% of our revenue is EU taxonomy aligned, and our SBTI approved net zero trajectory targets a 68% drop in scopes one and two emissions by 2025. Second, we drive urban ecological transition to concrete innovation, such as diversity in Paris. Finally, we measure our broader environmental and social impact with Jesse Deco 360 footprint, already active in major markets and expanding globally through 2026. Moving to slide 33, which highlights the ongoing fragmentation of the global out-of-home media landscape. As you can see, Jesse Deco stands out as the global market leader and the only truly worldwide out-of-home media company. While some major US peers have retrenched to their home market, some local companies emerge. Yet the overall market remains highly fragmented beyond the top players. This structure gives us significant strategic runway, positioning Jesse Deco to drive future growth both organically and through targeted value accretive consolidation. Moving to slide 34, which puts our global positioning into perspective within the broader advertising landscape. As you know, the global media market is heavily concentrated, the top five tech giants account for 58% of total ad spend, and the top 25 represents 75%, with 14 players from the U.S. and nine from China. In this highly concentrated environment, Jesse Deco runs number 23 globally, making us one of only two European companies in the world's top 25 media companies. More importantly, while digital platforms dominate online inventory, Jesse Deco stands out as the only true global out-of-home media company. We offer global brands a unique, high-reach, truly international platform. To wrap up, our key takeaways for H1 2026 reflect a strong performance across the board. First, we delivered solid top-line growth alongside significant improvements in profitability and cash generation. Second, our growth momentum remains robust, fueled by digital expansion and a rapid acceleration in programmatic. Third, our geographic and business diversification continues to drive growth while strengthening our resilience in the context of geopolitical and macroeconomic tension. Fourth, as our digital platform scales, we are further increasing our competitive edge. And finally, all of this is driven by continuous operational and financial discipline across our teams. To conclude on the next slide, as far as Q3 is concerned, with a continued solid revenue momentum. We now expect organic growth around plus 5% despite macroeconomic and geopolitical tension, uncertainty. Thank you for our attention. Jean-Charles, David, and I are now ready to take your question.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, please press the star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first call comes from the line of Marcus Diebel at JPMorgan. Please go ahead.

Yeah. Hi, everyone. Could you talk a little bit more about the friends in addition to what you said as a broad comment? I'm very interested in developments in the Middle East. it looks like that the sort of like development was not as bad as fiat and also farms yeah um if you couldn't maybe give a little bit more um on the development there that would be quite um quite helpful and then the second question was um clearly programmatic is very very strong and a key driver of the business and it's really coming through you mentioned um that you feel still there are a lot of incremental revenues coming through could you explain a bit more particular how the smaller clients you mentioned the smaller clients are actually starting to to

come to jason deco as well that would be maybe as in sort of like broader comment very helpful thank you thank you for your question so regarding the middle east i must say that as you know it is always on such an unexpected basically event, such as basically the conflict that is going through at the moment, it was very hard to assess and calibrate the right basically top line revenues declined in this environment. So, yes, we did slightly better than anticipated because I think also the traffic in most of our airports, especially in Dubai, but also in Abu Dhabi, was a bit better than expected. I think also the authority in the region has stated a business as usual, which is helping also to basically keep the demand at a good level. I think it's a good, I would say, way of striving through this very difficult situation for some countries in the region. And I think the team at JC Deco has done a terrific job to navigate in the best interest of our clients as well as our JC Deco ecosystem to tackle this difficult situation. So, a bit better than expected in Q2. Hopefully, this conflict will end soon, but who knows? It's impossible to predict, so we remain, as you know, optimistic for the future, but also cautious because of the current situation. So moving into, obviously, moving into France, yes, I think the advertising business has grown in France in the first half of the year, despite quite good comparison the year before, has grown by 1%. The reason why France is minus 1.9 is due to a one-off sale of our automatic public toilet state-of-the-art product in the Paris municipality a year before. But on the advertising side, the business has been resilient. And Q3 also is looking in that direction. So, yes, friends, the business is doing, I think, better than the expectation in the market, growing slowly but growing. And this is obviously good news for our largest market so far at JEC Decoff. Moving on to your last question, Marc, on programmatic, Jean-Francois. Good morning, Marcus.

Because on Programmatic, we had a very strong first half and Q2 as well, obviously, 30% growth on Programmatic. Well, what we can say in addition to what was already mentioned in the introduction is that the fact that we have our own ad tech system is a plus. We see now more and more third-party media owners joining the platform view. In terms of SME contribution, it's still very small, but we are starting to get new clients and new SMEs, but it's still a small percentage, so we are working hard on that. And I think AI will help by simplifying the planning and trading for the small clients as well. So all in all, it's pretty good news. Also, the platform view is now break-even, cash on cash. In the first six months, we generated positive free cash flow for the first time ever. So that's good news as well. Investment is paying off. I just want to remind you, Marcus, that we are the only out-of-home media company having its own SSP and DSP. and which obviously is attractive for third-party media owners and then we continue to gain momentum on attracting more um third-party media owners on the on the on the supply side and it's it's hard to predict um future growth on programmatic but the bottom line is that we believe that we can now start attracting more and more companies i known out-of-home media clients through our portfolio and and and the programmatic is a very helpful tool yet those for example during the World Cup we had some some campaigns that triggered by the results of the different football teams and this was mostly a programmatic trade so all in all we are very bullish on on programmatic. It represents now 12% of our digital revenues, well ahead of the sector, because at the Woo conference last month, it was mentioned that 7% of out-of-home digital revenues are coming from programmatic, and the co is at 12%. So, all in all, I think we are in a good spot.

Yeah, perfect. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Julian Rock with Barclays. Please go ahead.

Yes, good morning, everybody. Marcus only asked two questions. I'm going to go for four. On page 20 for David. Yeah?

We can't hear you very well. Is that better now? It's a bit better, but not very clear. But let's try it.

Okay, is that better now?

Yeah, much better. much better.

Okay. All right. So on page 20, rent and fees up 3.4% in the first half. Other operating costs up 0.9. Is there seasonality or can we expect both to be up broadly the same for full year 2026? Then North America was up 19.6 in the first half. How much in Q1 and in Q2? Or can you isolate impact of World Cup on Q2 results, contribution to Q2 Organic. Then on ETHRO renewal, no clear channel to be against you. So what can you tell us in terms of rent and fees, same, lower or higher versus before?

And then lastly, on page 31, outside of the U.S., where is clear channel and incumbent in all those renewals? thank you much better now so david will take the first question jean-francois second and third and i will take the fourth so david yes regarding the pace of uh we have to keep in mind that we will have the new contract in in startup phase which as you know the phase has always dilutive on our margin first. So, you know, the pace of the growth in the second part of the year, we should be cautious and should be, let's say, evolving a bit different from the first half. Not significantly, but it won't be exactly at the same pace.

Regarding the U.S., first of all, Julien, well tried, but we don't break down revenues geographically on a quarterly basis, but only every six months. It was worth trying from you. Second, Q2 was obviously very strong in the U.S. What we can tell you is that overall World Cup incremental revenues was above 30 million. When we announced our Q2 guidance, we gave you a breakdown between Q2 and Q3 of this plus 30 million euros of 50-50. What we can tell you now is it was more than 60-40, i.e. 60% for Q2 and 40% for Q3, i.e. less revenue uplift in Q3 than in Q2. And this extra $30 million was mostly in the U.S., but also in Mexico, as well as in countries like the U.K., which did pretty well in the World Cup. and then back to the answer I gave to Marcus in the previous question that was some programmatic campaigns in the UK given that the UK team did pretty well On Clear Channel can you repeat your question Julien?

Clear Channel was bidding Clear Channel was basically we don't see Clear Channel now outside of the US so basically now they they are back in the u.s as a u.s operator so we don't if your question is where do do we do you see do we see them we don't see them outside of the u.s no my question was on page 31 i understand they've gone back to the u.s but in page 31 it's renewal or it's it's it's um renewal a lot of contracts right and some of them must be clear channel outside of the u.s before they left.

So I just want to identify the opportunity where you could gain contract because Clear Channel is no longer bidding on page 31. That was one question. And then the other one was on ETH renewal. As it's the first time you're bidding without Clear Channel, I was wondering whether you can give us some color on what happened to the rent and fees. Are they higher? Are they lower? Are they the same as before? So it's kind of two questions.

Yeah, Jean-François will take the ETH row one. will take the clear channel one so on on clear channel um basically in europe even if clear channel now as you know is gone from europe you have now local operators so certainly the local operators we pick up some some of those beads to uh to compete but it's it will be obviously and it will certainly be a a different approach every every company has a different approach to the way they bid. And we will see that in the coming future. In France now, it's the local players. In basically other markets in Europe, in northern part of Europe, it's Bauer Media. So it depends on the market, but it's not anymore global competitors as it used to be with Clear Channel, Julien. So as we said at the last conference call, because I think we have the questions it's a bit too early to um to uh to to draw a conclusion but what we can say is more rationality in the bidding process across basically across the board with sometimes some few exceptions but it's certainly more rational that it used to be uh prior to covet and we got regarding ethro So, Heathrow did a market consultation, Julien, in order to assess whether or not they wanted to do a bidding process.

And the result of this market consultation is that they decided to extend, renew our contracts for eight years without going out to tender. There was no obligation on Heathrow's part to go out to tender. and they basically came to the conclusion that given our footprint and our track record of the last 30 years operating the advertising business in ETHRO, that it wasn't necessary for them to go out to tender. The terms and conditions are pretty much the same as they were in the previous 10 years.

Thank you. One moment for our next question. Our next question comes from the line of David Amorim with Buremberg. Please go ahead.

Morning, everyone. Thank you for the presentation. Three questions for me, please. Firstly, you delivered a very strong H1 on profitability. Congratulations. As you mentioned, some of your contracts will start in Q3. Could you please help us understand the expected direction of operating margin in H2 and for fiscal year 2026? Secondly, in the press release, you mentioned a low single digit organic growth in china in h1 we have recently heard a more positive comment on china from several media companies what can what trend are you seeing in the market at the start of the q3 and lastly more broadly speaking out of form advertising seems to be becoming increasingly attractive to advertisers are you seeing this stronger demand showing up in more volume or are able to push for higher yield especially in digital screens merci thank you for your questions david the first one i will take the second one and jean-francois will take the third one okay

perfect thank you davide uh it's clear that the trajectory of the operating margin in h1 quite was quite strong which confirmed the strength of our business model We will need to build on this momentum, keeping a focus on discipline and execution. But as I mentioned before, we are in the second part of the year, the startup phase of new contracts, which is typically diluted on margin. And we need also to navigate, you know, in uncertain environment, as in H1, but maybe with less tail-ins coming from the sport events. So we don't provide, as you know, Davide, it's a good try, but any guidance for the full year and for the second half, but you know perfectly the usual seasonality pattern of our operating margin, and I will let you do the modeling, staying cautious on H2 due to, you know, the startup phase of the new contracts?

On China, as you know, we don't break down basically guidance, as it was said by Jean-Francois earlier, on a quarterly basis. But what we can say is that the mainland Chinese business has been good in has been okay in the in the first half of the year where in hong kong and macau the business has been a bit more difficult um so we have a true dynamic in our chinese business at the moment this continues to be the case for the summer without being able obviously to give you more details into that but we we don't really see let's say we still see a quite soft environment we don't see basically a major recovery business is doing okay with those kind of two tracks between mainland and Hong Kong and Macau but but I think we the good news is that we have been able to achieve those I think strong performance results as it was presented this morning despite the fact that China is still a soft in our portfolio so we continue to digitalize which is a good news because digital is is doing well as you can see now digital in china as which was said in previous quarter publication publication we basically now are 41 contribution from digital in china and this is the way to go And so we strongly believe that we have very sound and good contracts, terms and conditions, long duration, and business is certainly promising for the future in China. But at the moment, it's still basically in slow mode, let's say. And I think it's quite common in different industries to see China as a soft recovery.

On your last questions, it's a combination of both, volume and pricing. Pricing on digital when traded programmatically is at a CPM uplift of 25 to 30 percent. In some countries, even more than 30 percent uplift on programmatic trading, given the targeted nature of the campaigns. and and volume of course because we invest a lot in in new premium digital inventory but it's a combination of both it's not easy on a worldwide basis to give you a breakdown between volume and pricing but it's a combination of both obviously pricing is a is the is a way to for us to enhance the yield per screen, which we are monitoring on a regular basis, the yield that we generate. And then the trade-off is always, do we put more screens and accept a lower yield, or do we keep the number of screens static and try to enhance the yield? London is a good example. We had 1,000 screens, now we doubled the number of screens. Obviously, the yield per screen is a bit lower, but overall, we generate more revenues, and then the medium has become more – the digital media has become more attractive, reaching out in certain neighborhoods where we didn't have digital in a previous contract with TFL. So it's always a balance between volume and pricing, which differs from market to market.

Thank you. One moment for our next question. Our next question comes from the line of Conor O'Shea with Kepler-Chevereaux. Please go ahead.

Yes, good morning. Thanks for taking my questions. Three questions also from my side. Just to come back on the comments on China, Jean-Charles, just to be clear that the low single-digit growth that you mentioned in the press release, that's for greater China, including Hong Kong or mainland China. and directionally, I guess, a bit slower in Q2 than Q1 because I think the comments were a little bit more optimistic in Q1, if you could just confirm that. And maybe in the same region, if you could just give a little bit of color on trends in Australia, I think which is also an important region for you guys as well. Then second question, just in terms of your slide 13, the comments on the penetration in the market of programmatic digitalization the fact that it's so low in the US and the UK which seems surprising and maybe could explain why you think that is and what could change there going forward and then last question maybe for David you know you looked at to give specific capex guidance for the full year but just you know directionally you mentioned that some delayed rollout of contracts meant that you know capex was actually slightly down in the first half but you know looking into the second half as

those contracts roll on you know what what kind of difference could that make to the second half year on year thank you thank you Connor for your question so first first of all on China and Jean-Francois will take the Australian and the program meeting in the US in the UK and David the last one but on China what what we can say the numbers that are disclosed are obviously for greater China as a whole but we wanted to give you a bit of more color of the dynamic within China today given basically the importance in the size of Hong Kong and Macau within the greater China numbers so what you have seen on the numbers are greater China numbers your assessment on Q1 versus Q2 is the right assessment Connor so I can confirm what you are implying in your question is right on Australia, Jean-Francois?

Yeah, Australia was low single digit in the first six months.

Yes, we have some delays in the installation of some contracts, but it's more a swing between H1 and H2, which explains, you know, the increase in inventory, as I mentioned during the call. and so we keep, you know, what we indicated in March that net capex should land at around 8% of the revenue on a full year basis.

Okay, great. And on the programmatic, low penetration in U.S. and U.K.?

As I mentioned on previous calls, we need two to tango And for a couple of years, media agencies and more specifically what we call the poster specialist or outdoor specialist were not prepared to engage on programmatic. I think there was fear on their side to be totally disintermediated by the programmatic trading. so the kind of kinetic which doesn't exist anymore which is now embedded in the WPP group M we are very slow to embrace problematic the same with Talon which is buying on behalf of OMG but now it's starting to change and Talon created its own DSP and WPP Group M now buying outdoor centrally or centrally I mean that there is no longer a dedicated unit to buy and plan plan out of home starting to embrace programmatic which is the reason for the low penetration in the UK but UK had the best with Brazil the strongest programmatic revenue growth in the H1 came from Brazil and the UK. So the UK is playing catch-up versus Germany and the Dutch or Belgian markets, which are above group average. And in the U.S., don't forget that 75% of out-of-home media revenue in the U.S. is coming from the billboard sector. The billboard has the lion's share of out-of-home media revenues in the U.S., and we only have 51 or 52 digital billboards in Chicago, which are doing extremely well, but it's only 52. So unfortunately, street furniture, which is the mainstream, the main segment of out-of-home in Europe, is not the main segment in the U.S., even if it's doing very well. And that's why most of the programmatic demand on U.S. out-of-home media is coming the other billboard segment. So that's the reason for the low programmatic penetration of digital for Jesse Deco in the U.S., which is, apart from those 50-plus digital billboards in Chicago, mainly operating, only operating transport airport contracts as well as split furniture.

Very clear. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Nisla Naser of Deutsche Bank. Please go ahead.

Great, thanks. I have two final questions remaining from my end as well. First, it was interesting to see the breakdown of your demand from certain customer categories and the tech company growth. It was really fascinating to see. But do you think that this spending is sustainable when you look at sort of the contracts that you've got in place for H2? Is this spending likely to continue to continue to grow? or do you think this is sort of a one-off as they try to gain more visibility? Some color there would be great. And second, thank you for quantifying the impact of the World Cup on your revenue. But I was also curious, how much of that incremental revenue do you think came from campaigns that were meant for Q4, that were brought forward during this sort of World Cup excitement period? In other words, would Q4 continue to be a strong quarter for out-of-home as it has traditionally been based on the conversations that you're having? Some color there would be great.

Thank you, Nisla. I will take the first question, and Jean-François will take the second one on the World Cup. So on the customer, basically, dynamic that we have seen in the first half, It's obvious that we are working hard to make those basically recurrent clients for us. As you can see, we have quite basically loyalty on our client base. If you look over the years at the same slide, you will see that the client base is pretty stable, growing obviously, as it should be, but pretty stable. And on the telecom, on the technology, we think that those clients are in some regions in the world, especially in China, especially in the U.S., where our footprint is basically very much appreciated by those clients that are looking for brand performance media. and brands performing media is what basically JCDCO out-of-home solution can bring to the market in terms of quality, in terms of locations, in the downtown area or in the top airports around the world. And this is true especially in San Francisco, for example. This is true in Shenzhen, but this is true also in major capital cities around the world. So we think that our unique portfolio, the quality of our portfolio, the quality of our digitization is certainly bringing those big tech companies in our portfolio of clients on a recurrent basis. And if you look at it from different phases, this is the case, mostly in the two dominant markets in tech, which are the U.S. and China. So, yes, we think that this is sustainable, Nislam, this is your question. We never know, obviously, but we think that when you look at the capex that is deployed by those firms in the industry, both in China and the U.S., they still need to make their solution available for the customers. And we think that we have the best assets to serve that purpose and to bring their solutions in the eyes of our, basically, audiences in metros, in airports, in city centers, and in retail areas where they want to reach the people on the move. World Cup, Jean-Francois?

Yeah, World Cup. So your question implied that we bundled some of, unless I didn't understand your question, that we bundled some of Q4 campaigns with the World Cup?

It was more like, was there demand from Q4 that was brought forward to the World Cup time? So campaigns that would have typically gone in Q4 were brought forward just to take advantage of the World Cup buzz by your customers. So in other words, would Q4 still be a decently strong quarter as it is typically the largest quarter for advertising? Or is there some sort of impact negatively in Q4? because there was demand pulled forward for Q2.

No, we don't think that that demand has been brought forward in Q2 because of the World Cup. Q4, you're right to say that it's our strongest quarter. For obvious reasons, a lot of clients generate a lot of sales in the pre-Christmas in Q4. So we don't have a crystal ball, But pacings are pretty good right now, but it's too early to call. With the exception of markets like France, which have more visibility than, for example, in the UK or in the US, for historic reasons, because we guarantee brand exclusivity in France, meaning that we can get earlier bookings because clients, especially in the luxury sector, are very keen to secure their prime positions. in the key weeks of the year. Because in France, we are selling on a weekly basis. And given that France is our largest market with more than 16% of sales, it's a pretty important market for us. And so bottom line is we don't think that the World Cup will affect in any form of shape the Q4 trading.

Great. Thank you very much.

Thank you. One moment for our next question. Our next question comes from the line of Jérôme Baudin with Odo BHF. Please go ahead.

Yes, good morning. Thank you for taking my question. My first question is from the contract win and loss for 2026. Can you just remind us what's the impact in Q2? So if I remember well, Q1 was slightly negative probably. What's the impact on Q2? Is there any impact, negative, positive, or is it neutral? and should we expect the same impact between Q3 and Q4? That's my first question. Second question on programmatic. Could you give us a bit of indication on the profitability? If you keep such growth which accelerates, should we see any operating leverage linked to programmatic? And does that compensate for the year and for next year the ramp-up of the new contract that you mentioned in terms of dilution and last question more structural to come back to follow up on the question on the on the impact of the the demand for for outdoor between yield volumes and price is there any change in terms of commitment from clients in terms of visibility do they commit earlier do you have more visibility on the business because of this new demand thank you very much okay thank you thank you for your questions David we take the first and the second I will take the

last regarding you know the contract win and loss as you probably mentioned in Q1 the net impact was negative progressively we can see a positive contribution from the new contract but in q2 it was not yet positive so globally in h1 we can say that contribution is progressing positively but not yet positive in h1 programmatic profitability david programmatic profitability as we mentioned properly during the the calling march if we look at the profitability of the view on a standalone basis we say that it was already in 2025 positive in terms of the bda uh year to date we can say that in 2026 it will be also positive in terms of not yet in terms of free cash flow but it will come very soon as we say but the the good way to look at it is not only on the standalone basis it is also but this is what we said during the last call to look at it on a global basis and the impact on GC Le Co group, because as we said, it is mainly incremental revenue, and so bringing new money to GC Le Co, so on a group basis, it has been already positively contributing to the margins and to the free cash flow, or to the margin, positively.

And on what you call the structural questions on the going forward, basically demand activity at the group level, what we can say is very clear. We are still among, I think, the most anticipated business in the media sector in some markets, as Jean-Francois highlighted it before on France, for example, but also in some other markets to a lesser extent. France being basically the most advanced booking market in the world at GSelico so far. What is also important to understand is that digital drives business up to the last minute before the campaign can be basically on air, on the streets, on the airport. And this is a major change. And this is a boost, obviously, to our business. And you can see that on the World Cup, for example, that we've discussed earlier, or the fact that we can do event triggering campaign now, it brings money until the end. And so that makes our guidance judgment more and more difficult, because this is obviously not bringing volatility, but this is bringing more money until the end. And so that's for sure a new component of our business profile going forward. But this is more positive than a negative, we think, obviously, and we can see that in the numbers. And so this is not a major change, but this is a quite significant one, even if, as you can see, because of the nature of our business and the limited supply in some of our key locations around the world, EA, major city centers, Fifth Avenue, major airports around the world, Our limited supply helps us to keep, basically, the value of our assets in this media environment. And this is quite unique in Autopop because you not only have physical assets, but also you have scarcity in some locations. In 5W, you have 15 locations. In Madison, you have a bit more. But at the end of the day, it's 15. So this gives us also pricing power, obviously, on those locations, especially with the digital and the fact that more and more clients want to be on our key assets. And that's something that makes the demand today also very compelling for some of those brands.

Thank you very much.

Thank you.

I'm showing no further questions at this time. I would now like to turn the call back to Jean-Charles Ducot for closing remarks.

Thank you for all of you for being active on this conference call. And on behalf of our GC Ducot executive board, I would like to thank you for your support. And we look forward to seeing you soon on our roadshow, physical roadshow or basically distance roadshow or conferences. We wish you a good break for those of you that are going into a few days of vacation. and be sure that we remain very active in the meantime. All the best and thank you for your attention today.