Solocal Group · EURONEXT:LOCAL
Solocal — Investor Day (August 2016)
36 slides from Solocal's investor day presentation, Aug 31, 2016
Slide 1: Investor Day: Conquer 2018 Plan, Financial Restructuring
#INVESTOR DAY Conquer 2018 Plan Financial Restructuring 31 August 2016
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements. In particular the business plan as disclosed today is subject to certain risk factors which are detailed in this presentation. Any forward-looking statement does not constitute forecasts as defined in European regulation (EC) 809/2004. Fo
Slide 3: Agenda
Agenda 1. Conquer 2018 2. Financial restructuring 3 INVESTOR DAY
Slide 4: Conquer 2018
1. Digital 2015: Transformation into a digital leader Conquer 2018 2. Conquer 2018 : Strategy and objectives Jean-Pierre Remy Chief Executive Officer 3. 2016-2018 Business plan
Slide 5: Digital 2015: Transformation into a digital leader
Digital 2015: Transformation into a digital leader Christophe Pingard Deputy Chief Executive Officer
Slide 6: Digital 2015: Invest and Transform
« Digital 2015 »: Invest and Transform Values / IT Digital Talents KPIs Management Customer experience Targeted and efficient traffic SoLocaI Business Digital Company Impact Partnerships & International SoLocal Corporate Culture 6 INVESTOR DAY
Slide 7: SoLocal transformation into a leading digital player in Europe
SoLocal transformation into a leading digital player in Europe Position in 2015 Latest news €640 M Internet revenues, Internet revenue growth reached €144 M revenues in Digital Marketing, supported by new lines 4% and represented 73% of group’s revenues of business (~380k business websites, onli
Slide 8: SoLocal owns leading positions in local online advertising
SoLocal owns leading positions in local online advertising N°1 N°3 N°1 N°1 N°1 €183 million €124 million €131 million €71 million €110 million 29%1 20%1 21%1 12%1 18%1 Audience2: 110m Audience2: 200m Audience2: 470m Audience2: 550m Audience2: 210m Client base: 116k Client base: 77k C
Slide 9: A competitive organisation to Conquer 2018
A competitive organisation to « Conquer 2018 » Creation of 5 vertical business units + 1 large account business unit Specialisation of teams in sales, marketing, operations Local Search Verticalisation of offerings New tools, sales approach and customer service Sites Internet et contenus D
Slide 10: H1 2016 strong new order dynamic
H1 2016 strong new order dynamic New order dynamic Local Search H1 2016 Decrease in new client acquisition given the ongoing New order growth1 constraints offset by ARPA growth thanks to increasing audience monetisation and focus on high ARPA clients Group +2% Digital Marketing +10% Successful a
Slide 11: Conquer 2018: Strategy & Objectives
Conquer 2018: Strategy & Objectives Jean-Pierre Remy Chief Executive Officer
Slide 12: Meaningful and scalable mission
Meaningful and scalable mission Reveal local know-how, everywhere, … … and boost local revenues of businesses 12 INVESTOR DAY
Slide 13: Two lines of Internet business
Two lines of Internet business Provide service and digital solutions to increase visibility and leads for local businesses and create and update best local, professional and personalised content for users Local Search Digital Marketing €496M of revenues1 €144M of revenues1 i.e. 78% of total Inte
Slide 14: Key assets & strategy
Key assets & strategy Local Search Digital Marketing Own media platforms Enriched Content 59% reach1 ~380,0002 business websites and store/product ~45M mobile apps2 locators of which ~50% on an international basis Leader of online scheduling Partnerships with global players Unique local data
Slide 15: Conquer 2018: growth and profitability objectives
Conquer 2018: growth and profitability objectives Local Search Digital Marketing Accelerate client acquisition while Target new revenue streams and maintaining ARPA growth scalability opportunities Digital Targeted growth by 2018 Marketing >15% targeted growth by 2018 Local ARPA : +3% to +6% Inc
Slide 16: High profitability due to the power of our audiences
High profitability due to the power of our audiences 2015 EBITDA to revenue margin 76% Internet players with media Internet players without media 62% 61% 56% 38% 31% 31% 29% 24% 21% 16% 17% 13% 8% 6% 1% Colonne1 Colonne2 Colonne3 Colonne4 Colonne5 Colonne6 Colonne7 Colonne8 Colonne9 Colonne10 Colonn
Slide 17: Business Plan 2016-2018
2016-2018 Business Plan Virginie Cayatte Chief Financial Officer
Slide 18: Expected market growth and additional catch up opportunity
Expected market growth and additional catch up opportunity Addressable markets Share of digital in local advertising (France; € billions, 2015 growth %) 43% ~34 Digital Marketing ~4,0 ~+5-10% 40% Digital Advertising ~2,5 ~+4% 30% 20% 15% Traditional Advertising ~27,1 ~-2% 15% 12% 3% 6% 1% Source: In
Slide 19: Conquer 2018 plan is aiming at accelerating digital growth by 2018
Conquer 2018 plan is aiming at accelerating digital growth by 2018 GAME CHANGERS 2018 EXPECTATIONS1 Stabilise client base through investment in client acquisition and optimised retention GROUP > 0% Build-up branding REVENUE GROWTH Internet Sustain audience growth through growth tactical traffi
Slide 20: Accelerate Internet growth with a stable client portfolio
Accelerate Internet growth with a stable client portfolio and an increased penetration of Digital Marketing CAGR Growth 2015 2018 Key success factors 2015-2018 2017-2018 Stabilised client base Internet +6% +10% Sustainable ARPA growth revenues 640 764 (in millions of euros) Accelerated penetra
Slide 21: Stabilise cost base and deliver sustainable EBITDA margin between 28% and 30%
Stabilise cost base and deliver sustainable EBITDA margin between 28% and 30% CAGR Growth 2015 2018 Key success factors 2015-2018 2017-2018 Total costs (602)1 (603) 0% Fuel Internet growth while stabilising cost base (in millions of euros) +1% Cost of Internet Investment in 2016 scaled over the
Slide 22: Cash flow profile before debt service
Cash flow profile before debt service... Annual Impact Key success factors Target on FCF Recurring EBITDA Accelerate Internet growth ~ 250 (in millions of euros) Margin ~ 29% Focus investments and scale platforms Support product development keeping AdTech competitive advantages CAPEX ~ (70
Slide 23: Sizeable unexpected market and business risks could significantly reduce FCF
… but sizeable unexpected market and business risks could significantly reduce FCF RISK FACTORS POTENTIAL ONE-OFF IMPACTS OF ANNUAL FCF3 (in # of years (y) ) Consolidation or competitor pressure in the Market most competitive verticals (Retail and (0,7) y Services) Rise in the price of paper or
Slide 24: Digital business profile requiring drastically delevered financial structure
Digital business profile requiring drastically delevered financial structure Net debt / Recurring EBITDA Internet players with media Average1 = 0,0x Average = (0,4x) Internet players without media 3,8x 3,6x 3,4x 2,2x 2,0x 1,3x 0,4x 0,3x 0,1x (0,1x) (1,0x) (2,6x) (3,2x) (3,3x) (5,4x) Source: Annual r
Slide 25: Unchanged current financial structure would lead to a run-off trajectory
Unchanged current financial structure would lead to a run-off trajectory1 2015 2019 Impacts Continuous revenue decline with no digital Group revenues 873 667 growth and accelerated Print decline (in millions of euros) Evolution -5% -8% Continuous client base erosion in absence of brand revival a
Slide 26: Financial Restructuring
Financial Restructuring Robert de Metz Chairman of the Board of Directors Jean-Pierre Remy Chief Executive Officer
Slide 27: Gross Debt reduced by two-thirds, from €1,164m to €400m
Gross Debt reduced by two-thirds, from €1,164m to €400m 100% Take-Up of Rights Issue 0% Take-Up of Rights Issue In millions of euros In millions of euros Current Pro Forma Current Pro Forma Net Leverage Net Leverage Net Leverage Net Leverage 4.2x 1.5x 4.2x 1.5x 1 Debt Cash raised to Debt-for-Equity
Slide 28: Terms of the capital increase designed to incentivise take-up of the rights issue
Terms of the capital increase designed to incentivise take-up of the rights issue by existing shareholders Significant strengthening of the equity 69% to 83% of total new shares issued by way of rights issue Rights Issue preserving shareholders preferential subscription 100% take-up 0% take-up rig
Slide 29: Warrants
Warrants (Bons de souscription d’actions) Number issued Strike Price Maturity To Existing 39M 1.5 € 24 months Shareholders To Creditors 45 to 155M1 2.0 € 60 months In case of full exercice of the warrants: Additional capital increase in cash €367 M % capital held by shareholders2 67.0% % capital hel
Slide 30: Existing Shareholders pro forma Ownership in various cases
Existing Shareholders pro forma Ownership in various cases Before the Existing shareholders hold 100% of the Group financial restructuring plan with a gross debt of €1,164 M 100% Cash subscription 0% Cash subscription to the €400 M Rights Issue to the €400 M Rights Issue Reinstated debt €400 M €400
Slide 31: Creditors' package in various cases
Creditors’ package in various cases Before the financial restructuring plan Gross debt: €1,164 M 100% Cash subscription 0% Cash subscription to the €400 M Rights Issue to the €400 M Rights Issue Reinstated debt €400 M €400 M Reimbursement in cash €380 M €0 M Mandatory convertible bonds (MCB) €0 M €2
Slide 32: Key Dates of the Transaction
Key Dates of the Transaction Plan to be approved by at least 2/3 rd of creditors voting in favor of an amendment of the 2014 1. Sauvegarde Financière Accélérée plan Plan agreed in principle by creditors representing more than 50% of Solocal’s total debt Creditors vote envisaged to take place pri
Slide 33: Appendices
Solocal GROUP bd Appendices
Slide 34: Additional information illustrating the financial restructuring plan (1/2)
Additional information illustrating the financial restructuring plan envisaged (1/2) Debt Conversion into Reserved Capital Reinstated Debt & MCBs Rights Issue Shareholders Warrants Creditors Warrants Equity Increase (€m ) Am ount of # of # of Participation Am ount Am ount Reinstated Cash Issue Price
Slide 35: Additional information illustrating the financial restructuring plan (2/2)
Additional information illustrating the financial restructuring plan envisaged (2/2) # of Shares (m ) created through: # of Shares (m ) # of Shares (m ) created through: # of Shares (m ) Am ount of Existing # of before dilution after dilution Cash Raised Shares (m ) Reserved from MCB and Shareholder
Slide 36: SoLocal Group
SoLocal GROUP Immeuble Citylights – Tours du Pont de Sèvres 204 Rond-point du Pont de Sèvres 92100 Boulogne Billancourt T. 01 46 23 30 93