Q3 2020 Trading Update

17 November 2020

Ocean Outdoor Limited

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

Q3 2020 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 Q3 2020 revenue trading update.

Q3 2020 Highlights:

· Group revenue of £20.99m, down 36% for the quarter (2019: £32.91m) on a proforma basis  

· Ocean Netherlands appointed strategic media partner for Westfield Mall of the Netherlands

· Roll-out of our first premium large format DOOH screen in Norwich, one of the UK's top 10 fastest growing cities

· Expansion of Ocean's Two Towers® concept in Birmingham

· Continued investment and progress in automation systems

· Awarded Amsterdam bus and tram media contract, which includes over 300 vehicles and 1,688 digital screens

· Awarded contract by Kroonenberg Groep in the Netherlands, covering three shopping malls in Amsterdam and one in Hilversum

· In Sweden, a new exclusive media contract with Centrumkanalen has been won, covering 15 shopping malls

· Negotiations with landlords continue as well as strict cost management across the Group

The Group continued to experience improving market trends on a sequential quarterly basis, with Q3 2020 revenue reaching £20.99m (Q3 2019: £32.91m), down 36% on Q3 2019.

A national lockdown in the UK and more stringent local measures in the Netherlands and across the Nordics have temporarily paused the improving trend, and we now anticipate a weaker end to the year than previously envisaged. The ongoing developments mean that it is not yet possible to reinstate guidance.

The cost cutting and redundancy programmes are now complete across the Group, the balance sheet is robust and Ocean's teams have been restructured for the 2021 fightback. The Group is strategically well placed for the return of audiences in the digital out of home arena on retail and roadside environments.

Despite the ongoing economic uncertainty, Ocean has continued to invest in its organic growth plans and invest in its premium DOOH product offering and brand expansion across Northern Europe. Ocean believes the quality and coverage of its full motion DOOH and premium roadside networks will put the Group in an excellent position to capitalise on advertising demand as levels of spend return to normal. 

In the UK, the Group's first premium large format DOOH screen in Norwich is now operating, marking the 13th UK city where Ocean is now present, whilst Ocean's Two Towers® network concept has been expanded to Birmingham, adding to its coverage already in Manchester, Leeds and London.

At the start of September, Unibail-Rodamco-Westfield appointed Ocean Netherlands as its strategic media partner for Westfield Mall of the Netherlands, the country's largest shopping, dining and leisure destination. Ocean Netherlands has also won the media contract covering all buses and trams in Amsterdam, which includes over 300 vehicles and 1,688 digital screens, and renewed its contract with property company Kroonenberg Groep for three shopping malls in Amsterdam and one mall in Hilversum.

Ocean Nordics has continued to win new contracts and is operating well following the integration of the two businesses. In Sweden, a new exclusive media contract with Centrumkanalen has been won, covering 15 shopping malls, which expands Ocean Nordics' mall network in Sweden to 115, whilst a 900 sqm banner location was launched in Stockholm in one of highest roadside vehicular audience locations in the country.

In Norway, the business strengthened its ties with Alti, the shopping malls group, with a contract for 24 malls, which includes both small and large format digital screens, and in Denmark a new contract was awarded by shopping centre owner Danske for 39 event areas in 16 malls, extending the current relationship. 

Commenting on Ocean's performance, CEO Tim Bleakley said:

"The hardening lockdown measures introduced as we entered the key Q4 autumn trading period have stalled the momentum the business had built up, creating a more difficult environment for advertisers to make decisions. However, the recent vaccine news is encouraging as we look beyond 2020 to later in H1 2021. Given the digital structure of the business and its focused approach during the pandemic, we are well placed in our market to capitalise on the recovery."

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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 February 2020, Ocean 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.