Solocal Group · EURONEXT:LOCAL
Solocal — FY2013 Earnings Presentation
63 slides from Solocal's earnings presentation, Feb 13, 2014
Slide 1: Full Year 2013 Results
FULL YEAR 2013 RESULTS 02/13/2014
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: End of 2013 highlights
End of 2013 highlights Consolidated revenues of 998.9 million euros down 5.8% on a like-for-like basis1 Internet up +1.7%1, represents 63.3% of the Group's revenues Printed directories -16.41% Gross operating margin of 424.3 million euros slightly above the Group's forecasts with a sustained hig
Slide 4: Confirmed 2014 outlook
Confirmed 2014 outlook 2014 will be a year of structural changes, especially in the commercial area. In this context and in light of a mediocre economic environment, the outlook for 2014 is: Revenues decrease between -3 and -6% Normalized1 gross operating margin expected between €355 millions et
Slide 5: Capital increase of €440M
Capital increase of €440M subject to extension of debt maturities Capital increase of €440 M Debt maturities extention €361M capital increase with preferential Partial debt pay down in exchange for an extension subscription rights protecting interests of existing of 2015 maturities to March 2018
Slide 6: Fully backstopped capital increase of €440 M
Fully backstopped capital increase of €440 M ● Capital increase of €361 M with preferential subscription rights of shareholders Capital increase of ● Option to increase the size of the capital increase up to €481 M €361 M with ● Fully backstopped by: preferential ● MDH (mainly controlled by Cerberus
Slide 7: Decisive step of refinancing process started in April 2011
Decisive step of refinancing process started in April 2011 ■ Amend & Extend of €2.0 Bn 2013 Maturities (TLA1) (1st Part) Prepayment at par of a portion of the extended debt (€350M) through bond issue 2 years extension of debt maturity with a new €962M A3 tranche Apr-11 May-11 ■ Bond issue Seni
Slide 8: Solocal Group profile post transaction
Solocal Group profile post transaction ● Pro forma leverage below 3.0x GOM Substantial and ● Decrease of financial leverage by around 0.9x1 sustainable ● No significant maturities before 2018 strengthening of financial structure ● Solocal Group option to push back maturities to 2020 if the bond is r
Slide 9: 2013 Financial Results
2013 FINANCIAL RESULTS Martine GEROW
Slide 10: Group revenues: -5.8%
Group revenues: -5.8%1 Internet growing, Revenue decrease and disposal of Editus Printed directories contraction partially offset by cost discipline on commercial and Paper-Print-Distribution -6.3% Revenues in 1,066.2 M€ 998.9 M€ GOM in million Euros million euros 43.6% 42.5% -5.8% 1200 500 -1.1 pt
Slide 11: Printed directories: Revenues at -16.4%, stable high GOM ratio
Printed directories: Revenues at -16.4%1, stable high GOM ratio Controlled decrease High profitability maintained of Printed directories activity thanks to -21% decrease in Paper-Print-Distribution costs in France -17.3% Revenues in 416.6 M€ 344.7 M€ GOM in million euros -16.4% million Euros 44.4% 4
Slide 12: Internet: 63.3% of Group revenues, controlled margin
Internet: 63.3% of Group revenues, at +1.7%1, controlled margin Internet growth Controlled Internet margin thanks to impacted by Display activity commercial cost discipline +1.6% Revenues in 622.7 M€ 632.5 M€ GOM in million Euros +1.7% million Euros 43.3% 42.3% 700 300 -1.0 pt 600 250 153.3 -4.8% 26
Slide 13: GOM decreased by -8.7%
GOM decreased by -8.7% Change in consolidated gross operating margin (GOM) in million Euros 464.5 4.3 424.3 -8.7% 16.6 -8.0% 14.3 (8.1) (67.3) GOM 2012 Revenues Paper Other external Sales personnel Other personnel GOM 2013 Print expenses expenses expenses Distribution Change -6.3% +21.5% -5.0% +8.3%
Slide 14: Net income of €114.8 M impacted by reorganization costs
Net income of €114.8 M impacted by reorganization costs From gross operating margin to consolidated income In million Euros 2013 2012 Change Gross operating margin 424.3 464.5 -8.7% Legal employee profit-sharing (15.4) (14.7) -4.8% Share-based payment (1.5) (2.3) +34.8% Depreciation and amortisation
Slide 15: Net cash flow: €136 M as of 31 December 2013
Net cash flow: €136 M as of 31 December 2013 Net cash flow as of 31 December 2013 (in million Euros) 424 (55) (128) (86) (19) 136 (155) (19) GOM 2013 Capex Net Tax Other Net cash Decrease in ∆ net cash financial Operational flow borrowings 2013 income* Charges** 2013 (RCF 1&3) and other * Of which €
Slide 16: Compliance with covenants
Compliance with covenants Financial leverage Interest coverage 4.30x 4.30x 4.00x 4.00x 4.44x 3.75x 3.97x 4.00x 3.75x 3.57x 3.0x 3.0x 3.0x 3.0x 3.0x 3.82x 3.66x 3.71x 3.73x 3.63x 12/31/11 06/30/12 12/31/12 06/30/13 12/31/13 12/31/11 06/30/12 12/31/12 06/30/13 12/31/13 Net debt over GOM Maximum allowe
Slide 17: Acceleration of Digital Transformation
ACCELERATION OF DIGITAL TRANSFORMATION Jean-Pierre REMY
Slide 18: #1 in Local Digital Communication
#1 in Local Digital Communication ~€1 billion ~650,000 of revenues advertisers ~63% ~52% of Internet revenues Online and mobile reach1 COMMUNICATION LOCAL AND DIGITAL 1Source: Nielsen Médiamétrie indicator – Monthly average for January to November 2013 for Solocal Group Number of unique visitors of
Slide 19: Strategy established in digital local communication
Strategy established in digital local communication ~650,000 advertisers Leading brands, ~52% reach1 1 2 Listing & Display Digital Media Content Local Websites & Communication e-commerce Deals 3 Local Com. + Partnerships Expertise 2 300 conseillers 2,200 en communication local communication locale e
Slide 20: #1 in local digital contents
#1 in local digital contents Detailed pages Websites Videos & Deals Products & & Reviews Virtual visits Transactions 560k advertisers 125k customers 18k videos 16k deals Store/Product locator 800k reviews #1 France 17k virtual visits #1 France1 #1 Europe 10k FB pages #1 France Appointment on
Slide 21: Powerful audiences of Solocal Group
Powerful audiences of Solocal Group Reach Mobile 52% 27% Monthly fixed and of visits2 mobile Reach1 Visits Conversion Monetisation 1.3bn 70% 70c Visits converted Average cost Visits into contacts per contact per year (in cents of €) 1Source: Nielsen Médiamétrie indicator – Monthly average for Januar
Slide 22: Continued growth of PagesJaunes audiences
Continued growth of PagesJaunes audiences PAGESJAUNES AUDIENCE GROWTH IN VISITS TOWARDS PROFESSIONALS Q4 2013 VS Q4 2012 (in million of visits) 24 MOBILE +159% PARTNERS 9 90 FIXED +74% 52 30 +27% 39 MOBILE DIRECT -3% 105 93 FIXED -12% Q4 2012 Q4 2013 ∑ = +25% Fixed = +16% Mobile = +58% Internal sour
Slide 23: Local presence: growth by specialisation
Local presence : growth by specialisation Creation of 5 customer verticals Specialisation of teams Verticalisation of services Re-design of customer relationship Retail Services B2B Home Health & Public €193m Rev. €206m Rev. €175m Rev. €314m Rev. €110m€ Rev. KPIs* 184k customers
Slide 24: Growth in digital businesses by product
Growth in digital businesses by product Internet revenues growth since 2007 Change Estimation 2012 – 2013 2014 – 2017 CAGR 07-13 €633 M Digital Digital Marketing Marketing +4% +8.9% Websites Display Mobile search Websites +1% €380 M Display -13% +€211 M New Fixed Digital Fixed search search Mobile s
Slide 25: A digital transformation intensifying between 2013 and 2015
A digital transformation intensifying between 2013 and 2015 2009 – 2012 2013 – 2015 Online developpment Digital Company Priority given to Online Online > 75% in 2015 ■ Vision & strategy ■ 100% online focus ■ Online innovation ■ Partnerships with key players Digital 2015 program ■ Tactical acquisitio
Slide 26: Digital 2015: invest in transformation
Digital 2015: invest in transformation 3-year Reorganisation OPEX CAPEX investment costs ■ Media and audiences Mobile and indirect audiences €30 M ~€10 M PagesJaunes new search p.a. as of 2014 Transactional services Web-2-Store / products and deals ■ Customer and monetisation Sales and m
Slide 27: Reach and Efficiency of Audiences
REACH AND EFFICIENCY OF AUDIENCES Julien AMPOLLINI
Slide 28: A unique know-how
A unique know-how Consumers Professionals Efficiently connecting consumers with brands and professionals most adapted to their needs at local level, as close as possible to the purchasing Full Year 2013 Results 28
Slide 29: 2 key success factors
2 key success factors 9 French out 4 M POI1 of 10 1 Power of the audiences and reach ~650k clients 2 Efficiency of the conversion funnel >70% of visits generate a contact Consumers Professionals 1. POI: Points of interests … Full Year 2013 Results 29
Slide 30: Historically, a simple funnel
Historically, a simple funnel Consumers Professionals 1 2 1 content: 1 media: Addresses and Printed telephone numbers directories 3 Sales staff Full Year 2013 Results 30
Slide 31: We enriched our approach to take advantage of environment changes
We enriched our approach to take advantage of the changes in our environment 1 Several brands and services + richer content to accompany consumers at every step of their path to purchasing 4 Specific offers and dedicated salesforces Prepare by vertical Find Go 3 RETAIL Partnerships to cover the … en
Slide 32: Sustained growth in audiences in 2013
Sustained growth in audiences in 2013 Reach: Strong growth in useful traffic: +20% >90% of French use our media Digital reach Visits in M 920 ~52% direct… 1000 770 +20% …completed by out-portalling and partnerships 500 7 people out of 10 use printed directories 0 2012 2013 Leadership on Mobile U
Slide 33: 5 priority levers to strengthen our leadership
5 priority levers to strengthen our leadership 1 Develop our media and our distribution 4 partnerships Enhance our "web-2-store" 2 content and services Engage our users & customers communities 5 Integrate transactional services 3 Strengthen our leadership in local promotions Consumers Professionals
Slide 34: Engage our users and customers communities
2 Engage our users and customers communities professionals ~1M user accounts 300K with ratings French pros contacted via ~1.5M ZoomOn fans 60% multi-channels pros contacting Solocal each ~75% opt-ins* 0.5M year To go further in 2014 + Intensification in the collection of UGC and AGC (reviews, phot
Slide 35: Strengthen our leadership in local promotions
3 Strengthen our leadership in local promotions in 46 of the 58 largest cities in France* A unique inventory in France: Deals 16,000 deals published 95% of French towns covered Innovative solutions: Pilot in progress Product No. 1 offering for with 5 leading promotions local inventory retailers and
Slide 36: Enhance our contents and services as part of a web-2-store process
4 Enhance our contents and services as part of a "web-2-store" process 125K websites 120K shops as store-locator Paris area businesses 30% collected by Mappy indoor views (Paris area and 17K Bordeaux) Product locator, Click & 600K opening hours info + Collect, Theme contents by vertical Full Year 20
Slide 37: Integrate transactional services to optimize conversion
Integrate transactional services to further accompany 5 consumers and to optimize conversion Get info Find it Go There Purchase / transactional Consumers Professionals 30M Appointments 1,1M real estate ads* 500K orders / year 500K quotes / year Pick-up-in store * On AVAL and AnnoncesJaunes + Partner
Slide 38: Deployment of a New Organisation
DEPLOYMENT OF A NEW ORGANISATION Christophe PINGARD
Slide 39: Digital organisation at the service of customers
Digital organisation at the service of customers Customer Decentralisation Focus Operational Specialisation Performance Full Year 2013 Results 39
Slide 40: Key steps in the transformation
Key steps in the transformation 2013 2014 2015 Project Deployment Expected Definition Implementation Growth Agility Integration and Engagement transformation Customer satisfaction Managing Quality of life Negotiations change in the workplace Full Year 2013 Results 40
Slide 41: Setting up a new agile organisation
Setting up a new agile organisation Major Retail B2B Home Services Health & Accounts Public Marketing and commercial management Customer Service and Solutions Operational Excellence Customer Experience Full Year 2013 Results 41
Slide 42: Decentralisation: agility and close contact with customers
Decentralisation : agility and close contact with customers ● Accountability of local teams ● Continuous prospection throughout the year ● Strengthening of the multichannel strategy ● Optimised geographical coverage ● Real time VS batch With eGeo, customer selection by Then, display and selection of
Slide 43: Specialisation: the first achievements
Specialisation: the first achievements Health Offering Catering Offering Search Offer on fixed and mobile pagesjaunes.fr Performance-based offer and on-line reservations Growth in revenues of nearly 9% in 2013 11% of market share (35,000 advertisers) Market share of 5% in less than 4 months with
Slide 44: Operational performance
Operational performance Sales efficiency New Sales Tools New contractual system: flexibility and abandoning Save time the VRP sales representative contract Adaptation to the digital products Management by objective Pleasant and ergonomic environment For telesales, switching from 30 hours
Slide 45: Customer focus
Customer focus Real time Customer service CRM: 360° view Dematerialising flows Investments in salesforce.com Service and availability commitment Monitoring and enriching customer "Once & done" relationship Full Year 2013 Results 45
Slide 46: Return to sustainable growth by 2015
Return to sustainable growth by 2015 Reduction in the Acquisition of ARPA1 Growth churn rate new customers • Specialisation of the sales force • Reducing the customer portfolios • New contract / method of compensation • Reorganisation of customer services • Demonstration of ROI / Tra
Slide 47: Questions & Answers
Sobcal GROUP : QUESTIONS & ANSWERS
Slide 48: Appendices
Sobcal GROUP : APPENDICES
Slide 49: -5.8% decrease in revenues
-5,8%1 decrease in revenues Internet: 63.3% of Group revenues and growth of +1.7%1 Consolidated revenues by segment Like-for-like In million Euros 2013 2012 Change basis1 Group revenues 998.9 1,066.2 -6.3% -5.8% Internet 632.5 622.7 +1.6% +1.7% as % of Group revenues 63.3% 58.4% Printed directories
Slide 50: GOM of 424.3 million euros, 42.5% of Group revenues
GOM of 424.3 million euros, 42.5% of Group revenues Gross operating margin by segment Like-for-like In million euros 2013 2012 Change basis1 Group gross operating margin 424.3 464.5 -8.7% -8.0% as % of Group revenues 42.5% 43.6% -110 bps -100 bps Internet 267.4 269.6 -0.8% -0.3% as % of Internet rev
Slide 51: Stable GOM margin
Stable GOM margin 2013 2012 Change Q4 2013 Q4 2012 Change Reported gross operating margin (€M) 424.3 464.5 -8.7% 95.5 102.7 -7.0% Reported GOM margin 42.5% 43.6% -110 bps 38.3% 38.6% -20 bps - Expensing of fixed salesforce costs na +1.4 - 2008 and 2009 ResearchTax Credit -2.2 na accounted for in 201
Slide 52: Revenues and Gross operating margin: Q4 and financial year 2013
Revenues and Gross operating margin: 4th quarter and financial year 2013 In million euros Q4 2013 Q4 2012 Change 2013 2012 Change Internet 161.5 159.4 +1.3% 632.5 622.7 +1.6% Printed directories 82.5 100.4 -17.8% 344.7 416.6 -17.3% Other businesses 5.4 6.5 -16.9% 21.7 26.9 -19.3% Revenues 249.5 266.
Slide 53: Income statement: Q4 and financial year 2013
Income statement: 4th quarter and financial year 2013 In million euros Q4 2013 Q4 2012 Change 2013 2012 Change Revenues 249.5 266.3 -6.3% 998.9 1 066.2 -6.3% Net external expenses (66.6) (64.2) -3.7% (222.1) (228.2) +2.7% Salaries and charges (87.4) (99.4) +12.1% (352.5) (373.5) +5.6% Gross operatin
Slide 54: Tax rate evolution
Tax rate evolution Q4 Q4 2013 2012 Change 2013 2012 Change Statutory tax rate 34.4% 34.4% 34.4% 34.4% Additional tax1 3.6% 1.7% +190 bp 24.4%1 1.7% +2270 bp Partial deductibility of financial interest 3.5% 2.3% +120 bp 22.5% 14.5% +800 bp (85%) CVAE (Cotisation à la valeur ajoutée 3.9% 3.2% +70 bp 1
Slide 55: Cash flow statement: Q4 and financial year 2013
Cash flow statement: 4th quarter and financial year 2013 In million euros Q4 2013 Q4 2012 Change 2013 2012 Change GOM 95.5 102.7 -7.0% 424.3 464.5 -8.7% Legal employee profit-sharing (4.8) (3.1) -54.8% (15.4) (14.7) -4.8% Non monetary items included in GOM 0.4 2.0 na 6.5 0.4 na Net change in working
Slide 56: 2013 net cash flow
2013 net cash flow 2013 2012 Change Q4 2013 Q4 2012 Change Reported Net Cash Flow (€M) 136.2 185.0 -26.4% 20.2 19.8 +2.0% - Timing of 2012 interest +10.0 -10.0 -10,0 payments - 2011 Income tax refund -5.0 na na - Reimbursement of income tax on previous years -10.5 -10.5 Net Cash Flow excluding 135.6
Slide 57: Balance sheet as of 31st December 2013
Balance sheet as of 31st December 2013 In million euros 31 Dec 2013 31 Dec 2012 ASSETS Total non-current assets 214.8 212.3 Net goodwill 78.7 82.3 Other net intangible fixed assets 80.8 69.4 Net tangible fixed assets 23.6 25.5 Other non-current assets of which deferred tax assets 31.7 35.1 Total cur
Slide 58: Net debt as of 31st December 2013
Net debt as of 31st December 2013 In million euros 31 Dec 2013 31 Dec 2012 Cash and cash equivalents 75.5 111.5 Gross cash position 75.6 111.5 Bank Overdrafts (2.5) (19.6) Net cash position 73.1 91.9 Bank borrowings (1,297.5) (1,368.2) Bond borrowings – Senior secured notes (350.0) (350.0) Revolving
Slide 59: Financial structure and debt maturity as of 12/31/2013
Financial structure and debt maturity as of 12/31/2013 2014 2015 2018 Total Margin (bp) / Size (€M) Rate (%) €126 M1 €1 171 M €350 M €1 647 M Tranche A3 954.5 400 Tranche A5 342.8 360 RCF 3* - 360 289 ** Senior Total bank debt 1 297.3 382 / 6.38% secured notes Senior secured notes 350.0 8.875% A5 **
Slide 60: Glossary
Sobcal GROUP : GLOSSARY
Slide 61: Glossary – Operating P&L
Glossary – Operating P&L Group Digital revenues: Total of Internet revenues from PagesJaunes (pagesjaunes.fr, annoncesjaunes.fr, pagespro.com, websites and mobile Internet) and Internet revenues from all other subsidiaries in the Group Net external charges: Include external purchases: primarily
Slide 62: Glossary – Financial structure
Glossary – Financial structure Net financial debt: Total gross financial debt plus or minus the fair value of derivative asset or liability hedging instruments and minus cash and cash equivalents Ratio of net debt to GOM: As defined in the agreement concluded with the financial establishments, i
Slide 63: www.solocalgroup.com
So www.solocalgroup.com GROUP