oOh!media (OML) H1 2024 earnings summary

Executive summary

• Out-of-home (OOH) advertising sector reached a record 15% share of agency media spend in 1H24, growing 8% year-over-year and remaining the fastest-growing media sector in Australia and New Zealand.

• Revenue declined 2.8–3% to $288.3m in H1 2024, mainly due to contract exits and restructuring, but adjusted for these, underlying revenue grew 3%.

• oOh!media maintained its leading market position, reaching over 98% of metropolitan Australians weekly.

• Margin expansion achieved through disciplined contract bidding, cost control, and digital asset rollout, with adjusted gross margin up 1.8ppts and EBITDA margin up 0.1ppts.

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

Financial highlights

• Revenue for H1 2024 was $288.3m, down 2.8–3% year-over-year, with gross profit at $194.3m (down 1%).

• Adjusted gross margin improved by 1.8ppts to 43.1%; adjusted underlying EBITDA was $48.6m (down 2%), and adjusted underlying NPAT was $18.2m (down 11%).

• Interim dividend of 1.75c per share, fully franked, with a payout ratio of 51%, maintained in line with the prior year.

• Net debt increased to $125m, with gearing at 0.97x, within target range.

• CapEx for H1 was $23.4m, up 42% year-over-year, focused on digital asset rollout.

Outlook and guidance

• Revenue outlook improving into Q3 and Q4, with Q3 media revenue pacing up 2% and stronger momentum expected in Q4.

• Adjusted gross margin for CY2024 expected to be in line with CY2023; opex growth to remain at or below inflation.

• CapEx guidance for FY/CY 2024 is $45–55m, focused on growth and renewals.

• Gearing expected to decline in H2 as cash flow improves and new revenues come online.

• New contract wins and digital asset rollouts anticipated to drive growth from 2025 onwards, with $38m+ incremental annualised revenue expected.