Solocal Group · EURONEXT:LOCAL
Solocal — FY2014 Earnings Presentation
41 slides from Solocal's earnings presentation, Feb 10, 2015
Slide 1: Full Year 2014 Results
FULL YEAR 2014 RESULTS TUESDAY 10TH FEBRUARY 2015
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements. Although Solocal Group believes its expectations are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Important factors that could cause actual results to differ materially from the result
Slide 3: Business Update
Sobcal GROUP : BUSINESS UPDATE
Slide 4: Our mission: Simply connect people with local businesses
Our mission Simply connect people with local businesses Full Year 2014 results 4
Slide 5: What we do for our clients
What we do for our clients WE MANAGE ONLINE LOCAL PRESENCE WE CREATE ONLINE BUSINESS CONTENT Verticals Full Year 2014 results 5
Slide 6: Digital 2015 Plan: main achievements in 2014
Digital 2015 Plan: main achievements in 2014 Achievements Impacts ● Reach1 55% (+2 pts) ● Record growth and ongoing verticalisation of the 3 main media: Audience PagesJaunes, Mappy, ComprendreChoisir ● Audiences: >2 billion visits +12% vs. 2013 ● Bing partnership renewed for 4 years ● Mobile: 687 mi
Slide 7: Strong Internet audiences: Solocal 6th group in France
Strong Internet audiences: Solocal 6th group in France REACH 9th 46% # 6 in France REACH +2 pts 37th 20% REACH REACH 55% GLOBAL 53% REACH (Internet fixed and mobile) 2013 2014 REACH 84th 12% Source: Nielsen Médiamétrie indicator – October 2014 – reach global (Internet fixed and mobile) Number of uni
Slide 8: Internet audiences: Solocal Group reached 2 billion visits in 2014
Internet audiences: Solocal Group reached the milestone of 2 billion visits in 2014 2014 Internet audiences of Solocal Group (in million visits) +12% 2,044 1,824 +35% 687 510 2013 2014 PagesJaunes audiences towards professionals* 925 +22% 1,132 *Internal source: PagesJaunes only, excluding PagesBlan
Slide 9: Growth of PagesJaunes audiences driven by mobile and partnerships
Growth of PagesJaunes audiences driven by mobile and partnerships PagesJaunes audiences1 towards professionals Annual growth (in million of visits) 2014 VS 2013 1 132 +22% TOTAL 341 +54% 925 221 +53% 288 +83% SYNDICATION 188 305 +57% SEO & AFFILIATES 194 +80% DIRECT +15% PAGESJAUNES 543 -1% +50% 539
Slide 10: Internet dynamic by vertical
Internet dynamic by vertical Internet revenues 2015 Initiatives & offers (in million euros and ‘14/’13 change) trend Health & Public 67 69 +3% ++ PagesJaunesDoc B2B 120 116 -3% + Websites, direct marketing Verticalised and targeted Services 130 129 -1% + (big data) offers Retail 134 135 +1% ++ Trans
Slide 11: Digital 2015 Plan: Acceleration of Internet revenue growth in 2015
Digital 2015 Plan — Acceleration of Internet revenue growth in 2015 Initiatives Impacts ● Mobile: development of transactional services and the web-2-Store ● Increased internet audiences Audience ● Direct: new version of pagesjaunes.fr towards professionals ● Develop partnerships ● Leverage the full
Slide 12: 2014 Financial Results
Sobcal GROUP : 2014 FINANCIAL RESULTS
Slide 13: A deep transformation in 2014 to ensure return to Internet revenue growth
A deep transformation in 2014 to ensure return to Internet revenue growth Exceptional efforts were undertaken 2014, the year of transition to drive the digital transformation ● Stable Internet revenue ● Sales reorganization costs ● Commercial investment partially offset by ● Assistance from outside
Slide 14: Group revenues: -6.3%, Internet revenues stable
Group revenues: -6,3% Internet revenues stable over the year, +2% in Q4 2014 versus 2013 revenues (in million euros / change in %) -6.3% +2.0% 998.9 936.2 161.6 164.8 -5.3% Q4 2013 Q4 2014 249.5 236.1 +0.0% 63% 68% 65% 70% 632.5 632.5 Q4 2013 Q4 2014 2013 2014 2013 2014 Internet Printed directories
Slide 15: Normalised GOM decreased by -17.4% in 2014
Normalised GOM decreased by -17.4% in 2014 Change in consolidated gross operating margin (GOM) in million Euros 424.3 14.7 0.0 350.3 (62.7) (14.9) 322.2 (11.1) (28.0) Reported GOM Printed Paper Internet Sales Other Normalised GOM 2014 Reported GOM 2013 directories & Print revenues investment expense
Slide 16: Net income of €59 M in 2014
Net income of €59 M in 2014 Group revenues 936 (-6%) of which @ 633 (+0%) Net external expenses Salaries and charges1 228 (+3%) 358 (+2%) Normalised GOM 350 (-17%) Reported GOM Legal employee profit-sharing and 322 (-24%) Restructuring and integration costs2 share based payment 36 (+21%) 19 (+11%) E
Slide 17: Net Cash Flow reduction due to GOM decrease and restructuring
Net Cash Flow reduction due to the GOM decrease, restructuring costs and a non-recurring net change in working capital Net cash flow as of 31st December 2014 (in million Euros) 136.2 25.1 42.2 (16.2) 37.9 (33.2) (102.0) (14.2) Net Cash Flow Reported GOM CAPEX Cash financial Coporate Income Restructu
Slide 18: Improvement of operational cash flow in Q4
Improvement of operational cash flow in Q4 Operational and net cash flow by quarter (in million Euros) 2013 2014 358 (-11%) 210 (-41%) 105 111 87 Operational 73 68 65 Cash Flow 41 17 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Cash Flow 74 21 21 20 51 10 (24) 1 136 (-26%) 38 (-57%) Full Year 2014 results 18
Slide 19: Outlook
Sobcal GROUP : OUTLOOK
Slide 20: 2015 outlook
2015 outlook Full Year Outlook 2014 2015 Internet revenues +0% +5% / +10% Group revenues -6,3% stable Group EBITDA / revenues1 29% 29% / 30% Group net income -48% ≥ +30% Furthermore, the Group would like to: • proceed with partial purchases of its high yield debt during 2015 • achieve a reverse spli
Slide 21: Questions & Answers
Sobcal GROUP : QUESTIONS & ANSWERS
Slide 22: Appendices
Sobcal GROUP : APPENDICES
Slide 23: Revenues and normalised gross operating margin: Q4 and FY 2014
Revenues and normalised gross operating margin : 4th quarter and financial year 2014 In million Euros Q4 2014 Q4 2013 Change 2014 2013 Change Internet 164.8 161.6 +2.0% 632.5 632.5 +0.0% Printed directories & other 71.3 87.9 -18.9% 303.7 366.3 -17.1% Revenues 236.1 249.5 -5.3% 936.2 998.9 -6.3% Inte
Slide 24: Impact of new sales contracts on gross operating margin
Impact of new sales contracts on gross operating margin ■ Change in structure of salesforce compensation following implementation of new Background contracts starting in April 2014: ~75% recognized as incurred (fixed part + expenses) vs ~40% previously ■ No change in accounting principles: increment
Slide 25: Revenues and reported gross operating margin: Q4 and FY 2014
Revenues and reported gross operating margin : 4th quarter and financial year 2014 In million Euros Q4 2014 Q4 2013 Change 2014 2013 Change Internet 164.8 161.6 +2.0% 632.5 632.5 +0.0% Printed directories & other 71.3 87.9 -18.9% 303.7 366.3 -17.1% Revenues 236.1 249.5 -5.3% 936.2 998.9 -6.3% Intern
Slide 26: Normalised GOM decreased by -27.2% in Q4 2014
Normalised GOM decreased by -27.2% in Q4 2014 Change in consolidated gross operating margin (GOM) in million Euros 95.5 3.2 5.0 (16.6) (11.4) 69.5 (6.2) 57.6 (11.9) Reported GOM Printed Paper Internet Sales Other Normalised GOM 2014 Reported GOM 2013 directories & Print revenues investment expenses
Slide 27: EBITDA, a new performance indicator
EBITDA, a new performance indicator From reported GOM to EBITDA In million Euros 2014 2013 Change Reported gross operating margin 322.2 424.3 -24.1% as % of Group revenues 34.4% 42.5% Legal employee profit-sharing (10.3) (15.4) +33.1% Share-based payment (8.6) (1.5) na CIR reclassification (GOM => c
Slide 28: Income statement: Q4 and financial year 2014
Income statement: 4th quarter and financial year 2014 In million Euros Q4 2014 Q4 2013 Change 2014 2013 Change Revenues 236.1 249.5 -5.3% 936.2 998.9 -6.3% Net external expenses (69.0) (66.6) -3.6% (228.3) (222.1) -2.8% Salaries and charges (109.5) (87.4) -25.3% (385.7) (352.5) -9.4% Reported gross
Slide 29: Income statement with EBITDA: financial year 2014
Income statement with EBITDA: financial year 2014 In million Euros 2014 2013 Change Revenues 936.2 998.9 -6.3% Net external expenses (228.3) (222.1) -2.8% Salaries and charges (357.7) (352.5) -1.5% Normalised gross operating margin 350.3 424.3 -17.4% as % of revenues 37.4% 42.5% Impact of normalisat
Slide 30: Effective tax rate evolution
Effective tax rate evolution 2014 2013 Change Statutory tax rate 34.4% 34.4% Additional tax 3.6% 3.6% - Partial deductibility of financial interests 6.8% 3.5% 330bps CVAE (Corporation Value Added Tax) 5.8% 3.9% 180 bps Other 1.5% 0.5% 100 bps Effective tax rate 52.0% 45.9% 610 bps before exceptional
Slide 31: Cash flow statement: Q4 and financial year 2014
Cash flow statement: 4th quarter and financial year 2014 In million Euros Q4 2014 Q4 2013 Change 2014 2013 Change Reported GOM 57.6 95.5 -39.7% 322.2 424.3 -24.1% Legal employee profit-sharing (1.7) (4.8) +64.6% (10.3) (15.4) +33.1% Share-based payment - - na (4.2) - na Non monetary items included i
Slide 32: Operational cash flow with proforma EBITDA: Financial year 2014
Operational cash flow with proforma EBITDA: Financial year 2014 In million Euros 2014 2013 Change Reported GOM 322.2 424.3 -24.1% Legal employee profit-sharing (10.3) (15.4) +33.1% Share-based payment (8.6) (1.5) na Restructuring and integration costs (23.8) (28.2) +15.6% Non recurring other income
Slide 33: Balance sheet as of 31st December 2014
Balance sheet as of 31st December 2014 In million Euros 31 Dec. 2014 31 Dec. 2013 ASSETS Total non-current assets 229.6 214.8 Net goodwill 82.5 78.7 Other net intangible fixed assets 107.3 80.8 Net tangible fixed assets 25.3 23.6 Other non-current assets of which deferred tax assets 14.6 31.7 Total
Slide 34: Net debt as of 31st December 2014
Net debt as of 31st December 2014 In million Euros 31 Dec. 2014 31 Dec. 2013 Net cash position 43.6 73.1 Bank borrowings (833.8) (1 297.5) Bond borrowings – Senior secured notes (350.0) (350.0) Loan issuance expenses 25.8 25.4 Capital leases (0.8) (0.0) Fair value of hedging instruments (9.9) (20.2)
Slide 35: Compliance with covenants as of 31st December 2014
Compliance with covenants as of 31st December 2014 Financial leverage1 17% Interest coverage3 21% 4.50x 4.00x 3.75x 4.00x 3.57x 3.64x 3.00x 3.00x 3.00x 3.71x 3.73x 3.73x 12/31/12 12/31/13 12/31/14 12/31/12 12/31/13 12/31/14 Net debt over reported GOM2 Maximum allowed Reported GOM2 over net financial
Slide 36: Glossary
Sobcal GROUP : GLOSSARY
Slide 37: Glossary - Operating P&L (1/2)
Glossary - Operating P&L (1/2) Internet revenues: The sum of income from Internet operations, the main products being the creation and marketing of content and advertising space, listing, targeted advertising and the provision of advertising space for local and national advertisers, as well as a c
Slide 38: Glossary - Operating P&L (2/2)
Glossary - Operating P&L (2/2) Net external expenses: Include external purchases: mainly printed publishing costs (cost of paper, printing and distribution of printed directories), database costs, information system development and operating expenses, communication and marketing expenses, and over
Slide 39: Glossary – Financial Structure
Glossary – Financial Structure Net financial debt: Total gross financial debt plus or minus the fair value of derivative asset and liability hedging instruments and minus cash and cash equivalents Ratio of Net Debt to GOM: Such as defined in the agreement concluded with the creditors, i.e. the r
Slide 40: Glossary – Reach & Audiences
Glossary – Reach & Audiences Reach (an audience indicator created and published by Nielsen Médiamétrie) Number of unique website visitors: the number of fixed, mobile phone and tablet Internet users who have visited a website during a given month Reach: the traffic of a website or group of websi
Slide 41: www.solocalgroup.com
So www.solocalgroup.com GROUP