Lamar Advertising Company (LAMR) Morgan Stanley Technology, Media & Telecom Conference summary

Market performance and outlook

• Q1 expected to be light due to leap year and Super Bowl effects, but sequential improvement is anticipated for the rest of the year, with pacing above guidance targets.

• 62% of annual revenue goal already contracted, with digital inventory pacing ahead of the overall platform.

• No signs of macroeconomic or tariff-related headwinds impacting ad spend; digital remains a leading indicator.

• Local advertising remains stable and has grown for 15 consecutive quarters, while national remains more volatile.

• Political ad spend creates a crowding-out effect, but Q4 pacing is strong, and efforts are focused on replacing political revenue.

Strategic initiatives and technology

• Ongoing enterprise ERP conversion is a major priority, with phase one complete and full benefits expected by 2027.

• ERP is projected to add at least one margin point, targeting 48% margins, and improve sales productivity.

• Digital conversions are accelerating, with a target of 350-375 boards in 2024, up from 235 last year.

• Digital deployments and tuck-in M&A drive incremental EBITDA margin, with digital conversions yielding 4-5x revenue uplift.

• Programmatic advertising is expected to grow above mid-teens in 2025, with local beta testing underway.

M&A and financial strategy

• Completed 24 acquisitions in the past year for $45 million, with a robust pipeline and potential to exceed $150 million in 2024.

• Regulatory environment for large deals remains unpredictable, but REIT status provides some flexibility.

• Leverage target is up to 4x, with current levels at 3x; a large transaction could increase leverage closer to the target.