November 16, 2017 / 8:12 PM / a month ago

JCDecaux sees China becoming its number one market in 2018

(This version of the Nov 16 story corrects name of OutFront Media in second-to-last paragraph)

BARCELONA (Reuters) - French outdoor advertising company JCDecaux sees China becoming its number one market next year against a backdrop of rising urbanization and demand for its digital products, co-chief executive Jean-Charles Decaux said.

The family-controlled group has posted strong underlying growth so far this year in a stark contrast with that of large advertising groups WPP and Publicis, hurt by the growth of online advertising.

The signing in June of a contract to design, build and operate the advertising concession at China’s Guangzhou international airport from 2018 will drive JCDecaux sales in the country.

“It’s the year during which China should become our first market in the world,” Decaux said in an interview on the sidelines of the annual Morgan Stanley conference on tech, media and telecoms in Barcelona.

France, where the group the company was founded in 1964 by Decaux’s father, accounted for 18.5 percent of JCDecaux’s 3.4 billion euro adjusted revenue last year, before China and Britain.

The group’s shares have risen by more than 18 percent so far this year, valuing the company at 7 billion euros. By comparison, shares of the world’s three biggest ad groups WPP, Publicis and Omnicom, have fallen by 19 percent or more.

“At a moment when the sector is a bit disrupted, JCDecaux is becoming a safe haven for advertisers,” Decaux said.

The family-controlled group is also seeking to grow in the United States, which had 8 percent of its sales last year.

One option would be to take advantage of the company’s strong balance sheet to bid for one of its two smaller U.S. rivals, Clear Channel Outdoor (CCO) and Outfront Media Inc, Decaux said.

“It’s something that makes sense from a strategic point of view,” Decaux said, repeating previous comments, adding it was all a question of price.

Reporting by Mathieu Rosemain, editing by David Evans

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