oOh!media (OML) H1 2024 earnings summary

Executive summary

• Out-of-home (OOH) advertising reached a record 15% share of agency media spend in 1H24, growing 8% year-over-year, with the company maintaining market leadership despite a 2.8–3% revenue decline due to contract exits and restructuring.

• Adjusted gross margin improved by 1.8 percentage points to 43.1%, and adjusted underlying EBITDA margin rose by 0.1 percentage points, driven by disciplined contract renewal, cost control, and digital asset rollout.

• Adjusted underlying NPAT fell 11% to $18.2m, and statutory NPAT declined 10% to $5.8m.

• Strategic investments, new contract wins, and digitisation are expected to deliver over $38m in incremental annualised revenue from 2025, offsetting recent contract losses.

• Retail media and programmatic trading remain key focus areas for diversification and future growth.

Financial highlights

• Revenue declined by 2.8–3% to $288.3m for 1H24, mainly due to contract exits and renegotiations; gross profit was $194.3m, down 1%.

• Adjusted gross margin improved to 43.1% (up 1.8ppts); adjusted underlying EBITDA was $48.6m (down 2%).

• Adjusted underlying NPAT per share declined by 7% year-over-year; statutory NPAT was $5.8m.

• Interim dividend of 1.75c per share, fully franked, was declared, representing a 51% payout of adjusted underlying NPAT.

• Net debt increased to $125m, with gearing at 0.97x, reflecting higher capex and working capital.

Outlook and guidance

• Revenue initiatives and new contract wins are expected to drive improved performance in H2 and into 2025, with $38m+ incremental annualised revenue projected from 2025.

• OOH industry revenue is projected to grow at a mid-to-high single-digit rate in 2024, with Q3 media revenue pacing up 2% and stronger Q4 growth anticipated.

• CapEx guidance for CY24 is $45–55m, focused on new and renewed advertising assets.

• Adjusted gross margin for CY24 expected to be in line with the prior year; opex growth to remain at or below inflation.

• Gearing expected to decline as working capital unwinds in H2.