JCDecaux profits up 25% boosted by Chinese expansion

by Sarah Woods, Brand Republic 15-Mar-06, 10:07

LONDON – French outdoor advertising giant JCDecaux has reported net income of €195.3m (£134.6m) for 2005, a rise of 25% on last year.

The group announced 2005 revenues of €1.75bn in February, a rise of 7.2% from 2004, and organic revenue increases of 4%, following a major expansion into China.

Last year, JCDecaux increased its exposure to the fast-growing Chinese advertising market, through acquisitive and organic growth.

Following the purchases of MediaNation and Media Partners International, JCDecaux became the number one outdoor advertising operator in China, with a strong presence in the largest cities mainly through bus and subway promotion.

In terms of organic growth, the group won the Shanghai Airports' advertising contract and the rights to install and operate 500 newspaper reading stands with scrolling panels in some of the best locations in Beijing.

These factors contributed to a transport operating profit increase of 51.7% to €31.1m, leading to an improvement in operating margin. Billboard operating profit rose by 0.7% to €58.6m while revenues declined slightly.

These results were driven by tight control on costs and leases, particularly in France, the UK, Spain, Portugal and Italy.

Jean-Francois Decaux, chairman and chief executive, said: "The strong increase in earnings and the first-time dividend are the result of a sound operational performance.

"In 2005, as part of our strategy to expand into emerging markets, JCDecaux penetrated the fast-growing Chinese advertising market and became the country's number one outdoor advertising company.

"Our development in this market, which will represent more than 10% of group revenues in 2006, and the solid revenue increase from the US and the rest of Asia-Pacific, will fuel the acceleration of our organic revenue growth, which should exceed 5% in 2006."

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