16 February 2021

Ocean Outdoor Limited  

("Ocean" or the "Company" or the "Group") 

Full Year Revenue Trading Update

Ocean Outdoor Limited (LSE: OOUT), a leading operator of premium Digital Out-of-Home ("DOOH") advertising in the United Kingdom, the Netherlands, the Nordics and Germany, today provides the market with a trading update for the full year ended 31 December 2020.

Highlights:

·      Unaudited Group revenue of £86.0 million on a proforma basis, down 38% (2019: £139.6 million) ¹ 

·      Unaudited Adjusted EBITDA of £(0.4) million down from £33.0 million¹ 

·      Ocean Netherlands appointed as 10-year strategic media partner for Westfield Mall of the Netherlands, contract value of €7 million

·      Renewed 3 and extended 2 roadside contracts in the Netherlands related to €1.8m of annual revenues

·      Won 4 new media contracts, most of which from large competitors, across the Nordics, leading to an additional 58 shopping malls across Sweden, Norway, Demark and Finland 

·      Continued roadside network expansion in UK cities including expansion of Two Towers® concept in Birmingham

·      Rebrand of wholly owned subsidiary ACM Retail Tech to Ocean MediaTech

·      Continued to invest for growth - capital expenditure in new locations of over £5 million (2019: £15.9 million)

·      Reduced overheads (excluding depreciation and non-recurring items) by £4.7 million to £25.9 million, down 15% (2019: £30.6 million)

·      Agreed £35 million of debt facilities of which £5 million drawn by the year end

·      Cash on balance sheet at year end of £30.0 million

2020 brought unprecedented challenges for the Out-of-Home sector as a result of the public lockdowns and social restrictions brought in by governments across all our territories. The Group responded rapidly at the start of the pandemic, implementing a series of initiatives to preserve cash, ensure business continuity and protect employees. The Group continued to work closely with landlords and suppliers throughout the pandemic, negotiating rent and payment deferrals and reductions.  

The easing of the initial restrictions at the start of the summer period consequently saw bookings and revenues rebuild week on week during late Q2 and Q3. However, the reintroduction of lockdown measures across all territories in Q4 led to brands pulling back on advertising spend and deferring campaigns, resulting in a weaker conclusion to the year.

Despite the level of lockdown restrictions throughout 2020, Ocean pressed ahead with its organic growth plans, expanding and enhancing its network and premium DOOH product offering. This places the Group in the best possible position to capitalise on demand as the sector re-emerges. As a leader of digital out of home and almost no exposure to transit environments, the Group is well poised for the return of advertising expenditure. In the UK, major projects to strengthen the Company's position included the expansion of Ocean's Two Towers® concept in Birmingham and the ongoing expansion of the XL roadside network in 5 UK cities.  

Ocean Netherlands won a series of new contracts during the period, including the high-profile strategic media partnership with Westfield Mall of the Netherlands, and the tender for the large screen at the Amsterdam World Trade Centre. The Dutch division has also renewed three roadside contracts covering Almere and Gorinchem, extended two Amsterdam road contracts and installed two new roadside screens in Schipol and Nieuwegein.

Ocean Nordics secured a number of new shopping mall contracts across the region, including an exclusive contract for 15 malls with Centrumkanalen, expanding its mall network in Sweden to 115, whilst it also launched a 900 sqm premium banner location in Stockholm. In Norway, the relationship with Alti was extended, with a contract for 24 malls, which includes both small and large format digital screens. In Denmark, Ocean Nordics was awarded a new contract by shopping centre owner Danske for 39 event areas in 16 malls, whilst in Finland, Ocean Nordics was awarded contracts for 3 further malls. It is pleasing to see the Ocean brand competing and beating its peers in these new markets for the Group.  

Whilst DOOH continues to face headwinds, the Board believes these challenges have served to highlight the power of the medium and the strength of Ocean's portfolio. The Group's automated buying capability has also crucially benefitted agencies and advertisers, by offering a highly effective and low risk route to market to those needing greater flexibility to respond to the rapidly changing environment. This has enabled them to quickly implement targeted DOOH campaigns, and changes to messaging and locations.

Throughout 2020, Ocean was able to use its platform to support small businesses, charities and the arts, whilst continuing to break barriers with a series of firsts. From carrying The Queen's message to the Nation and a tribute to the heroic achievements of war veteran Captain Sir Tom Moore on the Piccadilly Lights, to launching LEGO Group's 'Rebuild the World' campaign, which was developed by Ocean Labs. Ocean was also the first DOOH media owner in the UK to deploy the use of Ultraleap's mid-air haptics technology to facilitate touchless campaigns in key experiential spaces. Ocean has continued to showcase DOOH as a safe, innovative, influential and growing channel.

With further lockdown measures in place since the start of 2021, it is appropriate to continue to withhold guidance until there is greater visibility. However, Ocean remains in a strong financial position and has continued to invest to position the business for recovery. The Board believes that it is now strategically better placed to capitalise on advertising demands once restrictions are fully lifted and audiences return to Ocean's locations, and outdoor advertising spend begins to recover.

The Group expects to publish its 2020 year end audited results in April 2021 and will confirm the date in due course.

Commenting on Ocean's performance, Tim Bleakley, CEO, said: "The way Ocean has navigated its way through 2020 and created a much stronger business in terms of our DOOH network, product offering and efficiencies, is an extraordinary achievement and I thank everyone across the business for their endeavours. We have in place a world-class digital platform that enables us to offer a hybrid of long-term impact and short-term flexibility, allowing brands to respond in real time to the evolving and changing environment. The business is ready for the economic fight back when social restrictions are lifted and brands reengage with the rapidly growing out-of-home audiences."

1.      Pro-forma basis assumes Ocean Outdoor Limited and all subsidiaries in the Group had been owned from 1 January 2019. For comparative purposes, the proforma figures are at constant currency using the average exchange rates for 2019, excluding IFRS16 accounting, impairment of intangibles and earn out payments designated as post completion compensation under IFRS3.

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About Ocean Outdoor

Ocean Outdoor operates some of the most prestigious digital out-of-home (DOOH) locations in the UK, Northern and Continental Europe. The Group portfolio includes 4,000 screens in seven countries and 270 cities.

In the UK, Ocean operates the most iconic DOOH locations including the BFI IMAX; the Landsec Piccadilly Lights; and has a significant presence in the top 13 UK cities. Ocean's high-profile landlords and partners include Birmingham, Manchester, Glasgow and Southampton City Councils, Landsec, Unibail-Rodamco-Westfield, the BFI and Intu. A continued focus on Ocean's Digital Cities for Digital Citizens philosophy has significantly augmented the Group's position as an operator of high quality DOOH assets. Ocean continues to deliver good organic development through new City tender wins, the rollout of new locations in Scotland, London, the West Midlands and Manchester and significant screen investment.

Strategic acquisitions that complement the existing DOOH portfolio remain a strategic pillar of the growth programme. This continued with three Dutch acquisitions in spring 2019, giving the company a significant share of the Netherlands market where it has become a major DOOH player. These subsidiaries have since been rebranded as Ocean Outdoor Netherlands.

In September 2019, Ocean acquired the assets of Visual Art, a Sweden based independent, pure-play DOOH media and tech group which operates in three Nordic countries (Sweden, Norway, Denmark) and key cities in Germany. This transaction expands Ocean's portfolio across 23 Unibail-Rodamco-Westfield shopping malls in Europe, in addition to holding the exclusive external rights to two of the largest premium urban shopping malls in Europe: Westfield London and Westfield Stratford in the UK.

In December 2019 Ocean took control and in February 2020, closed the acquisition of AdCityMedia, a Sweden-based premium out-of-home and digital screen tech operator focused on large format digital and high-end city centre locations across Sweden, Norway, Denmark and Finland. The combined entities of Visual Art and AdCityMedia, referred to as Ocean Outdoor Nordics, creates the leading DOOH operator in the region.