Slide 1: Investor Presentation Q2 2016
Investor Presentation Q2 2016 Available in English Only
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about the objectives, strategies, financial condition, results of operations and businesses of Yellow Pages Limited. These statements are considered “forward-looking” because they are based on current expectations about our business an
Slide 3: The Way Consumers and Merchants Are Interacting is Evolving
The Way Consumers and Merchants Are Interacting is Evolving The vast majority of Canadians are connected online (web and mobile) More than ever before, Canadians are researching online before making a purchase decision… …and turning to their smart devices to transact directly within their neighbourh
Slide 4: Our Mission
Our Mission We aim to champion the digital economy by offering consumers and merchants media and marketing solutions that help them interact and transact 4
Slide 5: Acting as the Chief Marketing Officer for SMEs
Acting as the Chief Marketing Officer for SMEs Owned & Operated Solutions Paid advertising on Yellow Pages’ verticalized network of digital and print media Services Dining Real Retail Estate Comprehensive Digital Services Full suite of digital solutions that attract consumers wherever they search We
Slide 6: Uniquely Positioned to Capture Further Growth in the Canadian Digital Marketing Landscape
Uniquely Positioned to Capture Further Growth in the Canadian Digital Marketing Landscape * Size of bubble denotes approximate advertising revenue in Canada Serving over 20% of the Canadian SME market Search Engine People Local Digital Product Offerings Marketing Boutiques Breadth of Self-Serve Webs
Slide 7: Acting as a Leading Digital Advertising Agency for National Brands
Acting as a Leading Digital Advertising Agency for National Brands Creating one of Canada’s leading digital advertising agencies, leveraging proprietary programmatic technologies and an extensive publisher network to connect Canadians with the brands they love Network of Brand Relationships Extensiv
Slide 8: A Verticalized Digital Experience for Consumers
A Verticalized Digital Experience for Consumers Business & People Search Retail YP App YP Shopwise Discover everything the local Everyday shopping app to help Canadians save time neighbourhood has to offer and money Canada411 & 411.ca RedFlagDeals Network of Canada’s most frequented and Canada’s lea
Slide 9: Uniquely Positioned to Capture Audience Growth in Key Verticals
Uniquely Positioned to Capture Audience Growth in Key Verticals Further Differentiating Our Properties Via Key Search Verticals Remain Underpenetrated1 Rich Content and Transactional Experiences Total Unique Reach Visitors (in M) Proven C2C Marketplace 1. Google 29 M 95% 3. Facebook 25 M 82% 5. eBay
Slide 10: We Are Starting from a Position of Strength
We Are Starting from a Position of Strength Canada’s Most Comprehensive Provider of Digital Marketing Solutions A Leader in Dedicated Chief Marketing Officer for 244,000 local businesses Digital Marketing Largest national network of sales, customer service and digital fulfillment professionals A lea
Slide 11: Our Path to Growth is Clear
Our Path to Growth is Clear Debt Free Capital Structure Growth in Adjusted EBITDA Growth in Revenues Growth in the Customer Count 2017 2018 11
Slide 12: Significant Deceleration in Net Customer Count Decline
Significant Deceleration in Net Customer Count Decline Annual Customer Acquisition1 Net Customer Count Decline1,2 (in thousands) (in thousands, unless otherwise noted) 23 38.6 20 34.6 19 30.8 17 27.2 24.8 14 23.7 22.1 20.2 11 7 4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 TTM 2015 TTM 2016
Slide 13: Delivering Sustainable Print and Digital Revenue Performance…
Delivering Sustainable Print and Digital Revenue Performance… Print Revenue Performance Digital Revenue Performance (in millions, unless otherwise noted) (in millions, unless otherwise noted) YoY Change YoY Change (21%) (21%) (19%) (23%) (23%) +7% +12% +11% +17% +22% 88 142 83 132 79 128 129 72 116
Slide 14: …and Reducing Revenue and Adjusted EBITDA Declines
…and Reducing Revenue and Adjusted EBITDA Declines Consolidated Revenue Performance Adjusted EBITDA Performance (in millions, unless otherwise noted) (in millions, unless otherwise noted) YoY Change YoY Change (7%) (4%) (3%) (1%) +3%1 (24%) (15%) (1%) (13%) (4%) 211 209 210 205 204 64 64 62 62 59 Pr
Slide 15: Maintaining Strong Profitability During Our Digital Transformation
Maintaining Strong Profitability During Our Digital Transformation Relative Size of Gross Margins of our Local Digital Solutions Print Cost structure is High principally variable, with profitability Margin tracked on a Online & Mobile Priority Placement book-by-book basis Websites Over 90% of traffi
Slide 16: Delivering Strong Free Cash Flow to Reduce Outstanding Debt
Delivering Strong Free Cash Flow to Reduce Outstanding Debt (in millions, unless otherwise noted) June 30, 2016 Dec. 31, 2015 Dec. 31, 2012 Senior Secured Notes1 371 407 800 Exchangeable Debentures2 91 90 87 Obligations Under Finance Leases 0 1 2 Total Debt 462 498 888 Cash and Cash Equivalents 14 6
Slide 17: Strengthening Our Financial Profile in 2016
Strengthening Our Financial Profile in 2016 Stabilization of the Customer Count YoY Pro Forma Digital Revenue Growth Between 9% and 11% Improvements to Revenue and Adjusted EBITDA Declines $100 Million in Principal Debt Repayment 17