JCDecaux : Financial report - Business report FY 2021

Business report FY 2021

March 17th, 2022

1

Annual business review - FY 2021

Annual financial release - FY 2021

Contents

Annual business review - FY 2021	..........................................................................3
Annual financial release - FY 2021.....................................................................................	3
Business highlights of 2021 ..............................................................................................	11
Perspectives .....................................................................................................................	13
Related parties..................................................................................................................	14
Risk factors .......................................................................................................................	15

Annual consolidated financial statements - FY 2021 ...........................................	21
Annual consolidated financial statements .........................................................................	21
Notes to the annual consolidated financial statements ......................................................	26

Statutory Auditors' report .....................................................................................

100

2

Annual business review - FY 2021

ANNUAL BUSINESS REVIEW - FY 2021

PRESS RELEASE OF FULL-YEAR2021 FINANCIAL RESULTS

Full-Year 2021 results

• Adjusted revenue up +18.7% to €2,744.6 million
• Adjusted organic revenue up +18.5%
• Adjusted operating margin of €422.3 million, +€280.6 million yoy
• Adjusted EBIT, before impairment, of €16.3 million, +€369.2 million yoy
• Net income Group share of -€14.5 million, +€590.0 million yoy
• Adjusted free cash flow of €211.5 million, +49.6 million yoy
• Best-in-classESG ratings
• Proposal to AGM not to pay any dividend in 2022
• Adjusted organic revenue expected to be above +40% in Q1 2022

Paris, March 10th, 2022 - JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, announced today its results for the year ended December 31st, 2021. JCDecaux Supervisory Board, which met on March 9th, 2022, approved the audited financial statements for fiscal year 2021. A report with an unqualified opinion is being issued by the Statutory Auditors.

Commenting on the 2021 results, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:

"Our 2021 group revenue grew by +18.7%, +18.5% on an organic basis with a very strong digital revenue growth, to reach €2,744.6 million despite national and local mobility restrictions including semi-lockdowns in some European and Asia-Pacific countries.

Digital Out Of Home (DOOH) grew by +33.2% in full-year 2021 to reach a record 26.9% of Group revenue for 2021 as we continued to accelerate our digital transformation and maintained our focus on the roll-out of digital screens and on the development of our automated data-driven planning and trading solutions. Programmatic advertising gained good momentum via the VIOOH platform which is now trading in 15 countries, connected to multiple DSPs (Demand Side Platforms).

While our client portfolio is diversified with the top 10 clients representing c.13% of our revenue, internet companies increased their spend by 69.4% representing now 7.3% of total revenue and our biggest category is now Fashion/Personal care and Luxury Goods with 15.0% of total revenue ahead of retail at 14.6%.

With revenue growing by €432.8m in 2021, our adjusted operating margin has reached €422.3m improving by €280.6m reflecting a strong operating leverage thanks to a revenue mix geared toward the higher margin Street Furniture business segment, our ongoing strict cost control and some rent relieves in line with the revenue shortfall linked to Covid-19 restrictions. Although improving by €590m year-on-year, our net result group share is still slightly negative at -€14.5m. Our tight management over working capital requirements and selective capex reduction as well as the decision not to distribute dividends allowed us to generate an improved positive free-cash-flow at €211.5m in 2021 and to reduce our net debt at around €925m at the end of the period (vs €1,086m at the end of 2020).

We continued to strengthen our ESG leading initiatives and commitments such as our global carbon neutrality contribution with France as a first step from 2021 onwards. The acknowledgement of our sustainability strategy by extra-financial rating agencies such as our A Leadership ranking in the Carbon Disclosure Project (CDP) and our new Gold Medal status by EcoVadis demonstrates the excellence of our environmental, social and governance practices which have been in our DNA since the company was created, as well as our ongoing commitment to ensuring transparency towards our stakeholders.

In order to continue to optimize our financial flexibility, we will propose at the Annual General Meeting which will take place on May 11th, 2022, not to pay any dividend in 2022.

3

Annual business review - FY 2021

Annual financial release - FY 2021

As far as Q1 2022 is concerned, we expect an organic revenue growth of above +40% driven by Europe, UK, US, Rest of the World while Asia-Pacific revenue growth is lower due to ongoing mobility restrictions. Our digital revenue growth continues to be very strong while analogue growth remains robust.

I would like once again to sincerely thank our teams across the world for their hard work, their strong commitment, their resilience, their agility, and their innovation spirit.

The Executive Board decided to immediately put in place financial and other measures to support the Ukrainian people as well as our local staff of the BigBoard JV suffering from the disastrous humanitarian consequences caused by the war against their country. JCDecaux has no exposure in Russia since the sale of its 25% stake in Russ Outdoor in 2020. Revenue in Ukraine in Q4 2021 accounted for c. 0.1% of total revenue.

As the most digitised global OOH company with our new data-led audience targeting and programmatic solutions, our well diversified portfolio, our ability to win new contracts, the strength of our balance sheet and the high quality of our teams across the world, we believe we are well positioned to benefit from the rebound. We are more than ever confident in the power of our media in an advertising landscape increasingly fragmented and more and more digital and in the role it will play to support the economic recovery as well as to drive positive changes."

*****

Following the adoptions of IFRS 11 from January 1st, 2014 and IFRS 16 from January 1st, 2019, and in compliance with the AMF's instructions, the operating data presented below are adjusted:

• to include our prorata share in companies under joint control, regarding IFRS 11,
• to exclude the impact of IFRS 16 on our core business lease agreements (lease agreements of locations for advertising structures excluding real estate and vehicle rental contracts).

Please refer to the paragraph "Adjusted data" on page 5 of this release for the definition of adjusted data and reconciliation with IFRS.

The values shown in the tables are generally expressed in millions of euros. The sum of the rounded amounts or variations calculations may differ, albeit to an insignificant extent, from the reported values.

ADJUSTED REVENUE

As reported on January 27th, 2022, adjusted revenue increased by +18.7% to €2,744.6 million compared to €2,311.8 million in 2020, with a strong sequential revenue rebound when restrictions are lifted. Excluding the positive impact from foreign exchange variations and the negative impact from changes in perimeter, adjusted organic revenue increased by +18.5%. Adjusted organic advertising revenue, excluding revenue related to sale, rental and maintenance of street furniture and advertising displays, increased by +18.9% in 2021.

By activity, Street Furniture rebounded the most followed by Billboard and Transport. Pedestrian and car traffic audiences recovered rapidly when lockdowns were lifted while for Transport international air traffic remained low throughout the year due to the Covid19 pandemic. Public transport assets remained temporarily affected by local mobility restrictions.

All geographies performed strongly in 2021 compared to 2020, especially in Q4 despite Omicron and mobility restrictions in some countries. Rest of the World improved the most, from a low level in 2020 while Europe (including France and UK) was the closest to 2019 levels as Street Furniture performed well. For Transport, in China, businesses exposed to domestic audiences recovered well as revenues were close to pre-Covid levels for domestic transport advertising (including metros, buses, domestic airport terminals) and already above 2019 revenue levels for domestic airport advertising more specifically.

ADJUSTED OPERATING MARGIN(1)

For 2021, adjusted operating margin reached €422.3 million vs €141.6 million in 2020, a significant increase by €280.6 million reflecting a strong operating leverage with 65% of the revenue increase going to the operating margin thanks to a tight management of operating costs.

The adjusted operating margin as a percentage of revenue was 15.4%, +930bp above prior year, reflecting a strong operating leverage.

		2021		2020	Change 21/20
	€m		% of	€m		% of	Change	Margin rate
		revenue		revenue	(€m)	(bp)
Street Furniture	323.4		22.5%	145.4		12.9%	+178.1	+960bp
Transport	58.2		6.6%	2.6		0.3%	+55.6	+630bp
Billboard	40.7		9.5%	-6.3		-1.7%	+47.0	+1,120bp
Total	422.3		15.4%	141.6		6.1%	+280.6	+930bp

4

Annual business review - FY 2021

Annual financial release - FY 2021

Street Furniture: In 2021, adjusted operating margin increased by €178.1 million to €323.4 million. As a percentage of revenue, the adjusted operating margin was 22.5%, +960bp above prior year.

Transport: In 2021, adjusted operating margin improved by €55.6 million to €58.2m. As a percentage of revenue, the adjusted operating margin was 6.6%, +630bp above prior year.

Billboard: In 2021, adjusted operating margin improved by €47.0 million. As a percentage of revenue, the adjusted operating margin was 9.5%, +1,120bp above prior year.

ADJUSTED EBIT(2)

In 2021, adjusted EBIT before impairment came back to positive territory at €16.3 million compared to - €352.9 million in 2020. As a percentage of revenue, this represented a 1,590bp increase to 0.6%, from -15.3% in 2020. The positive variation of €369.2 million is mainly due to the increase of the operating margin and non-recurring other operating income / expenses in 2020 (such as a net loss on sale of our minority stake in Russ Outdoor in Russia and restructuring costs to adjust our cost base) while net amortisation and provisions were relatively stable.

The impairment on property, plant and equipment and intangible assets is limited to -€7.6 million in 2021, no impairment charge on goodwill was recorded in 2021.

In 2020, an overall -€222.3 million impairment charge was recognised mainly due to the consequences of the Covid- 19 situation: -€36.7 million impairment charge on intangible assets and PP&E, a -€9.4 million net provision for onerous contracts and -€0.2 million provision on net assets from companies under joint control and -€176.0m impairment charge on goodwill, of which -€128.0m related the Pacific region and -€48.0m related to the Billboard business in the Rest of the World (-€10.0m impairment charge on goodwill was recorded in 2019).

Adjusted EBIT, after impairment charge, has improved by €583.9 million from -€575.2 million in 2020 to €8.7 million in 2021.

NET FINANCIAL INCOME / (LOSS)(3)

In 2021, interest expenses on IFRS 16 leases were -€82.2 million compared to -€118.1 million in 2020, a favourable variation of €35.9 million mainly coming from the mechanical reduction of the IFRS 16 lease liability related to the contract life progression.

In 2021, excluding IFRS 16, other net financial income / (loss) was -€42.8 million compared to -€40.6 million in 2020, a variation of -€2.2 million mainly corresponding to the financial interest expenses relating to the €1 billion bond placed in April 2020 partially compensated by some positive FX variation.

EQUITY AFFILIATES

In 2021, the share of net profit from equity affiliates turned positive to €48.6 million, increasing significantly compared to 2020 (-€1.3 million) reflecting the improvement in their operational performance.

NET INCOME GROUP SHARE

In 2021, net income Group share before impairment charge increased by +€384.6 million to -€8.7 million compared to -€393.3 million in 2020.

Taking into account the impact from the impairment charge, net income Group share increased by €590.0 million to -€14.5 million compared to -€604.6 million in 2020 due to the impairment charges recognized in 2020 as reminded above.

ADJUSTED CAPITAL EXPENDITURE

In 2021, adjusted net capex (acquisition of property, plant and equipment and intangible assets, net of disposals of assets) was reduced by -14.8% from €185.0 million in 2020 to €157.5 million from a base already significantly reduced in 2020 compared to 2019. A selective reduction nonetheless as growth capex including capex to pursue digitisation in premium locations and to roll-out our programmatic trading solutions continued to increase in percentage of total capex.

5