Solocal Group · EURONEXT:LOCAL
Solocal — BNP High Yield & Leveraged Finance Conference 2014
39 slides from Solocal's conference presentation, January 2014
Slide 1: BNP High Yield & Leveraged Finance Conference
BNP HIGH YIELD & LEVERAGED FINANCE CONFERENCE JANUARY 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: About Solocal Group = connect businesses with local customers
About Solocal Group = connect businesses with local customers 1 Strong online business ● 1 Bn€ revenues, 44% GOM margin ● 58% of revenues online ● Leader in online local communication with ~30%1 share in France ● Resilient model 2 #1 local business content base in France ● 650k customers ● #1 in dig
Slide 4: Digital Transformation: 2 stages
Digital Transformation: 2 stages 2007 – 2012 2013 – 2015 ONLINE DEVELOPMENT DIGITAL COMPANY Online 1st Online 360° ● Vision & strategy ● Digital 2015 program ● Innovation Audience sources, user search experience, transactional Platforms, products & services services Bridge gaps (M&A) Client
Slide 5: A local online strategy built on content, medias and communication expertise
A local online strategy built on content, medias 2007-2012 and communication expertise ~700 000 advertisers Leading brands, 46% reach1 Listing & 1 2 Display Digital Media Content Local Websites & e-commerce Communication Social 3 content Local Marketing + Partnerships Expertise Deals 2 300 conseille
Slide 6: Growth in online traffic and revenues driven by innovation
Growth in online traffic and revenues 2007-2012 driven by innovation Traffic (PagesJaunes Brand) Online Revenues +8% 623 M€ 1,194 M +11% CAGR CAGR New Mobile NA products & services 830 M +206 M€ 380 M€ + 364 M +17% visits Fixed Fixed Fixed Fixed 2007 2012 2007 2012 % of % Direct 100% 75% Solocal 33%
Slide 7: A transformation to digital, unique in the YellowPages space
A transformation to digital, 2007-2012 unique in the YellowPages space Reach Data FY2012 Revenues Change Digital in % Fixed Internet -3% 58% 46% -8% 53% ND -17% 33% 32% 2 -18% 27% 28% 1 -13% 30% 8% 2 -14% 29% 9% -12% 22% 1% 1 -18% 18% 8% Sources : Annual reports, BIA Kelsey 1Online weight 2011 2Reac
Slide 8: A resilient business
A resilient business 2007-2012 Revenues (M€) GOM Margin (% of revenues) 43,9% 44,2% 1,158 1,066 58% Internet 33% 2007 2012 2007 2012 January 2014 • Investor Presentation 8
Slide 9: Audiences: sustain momentum
Audiences: sustain momentum 2013-2015 PAGESJAUNES AUDIENCE GROWTH IN VISITS TOWARDS PROFESSIONALS Q3 2013 VS Q3 2012 Innovate, invest in content, 4% engage users 10% MOBILE +170% ● Create unique rich content.. PARTNERS 23% 30% ● Enrich user and customer experience FIXED +70% ● Store & product locato
Slide 10: Go-to-market model focused on customer
Go-to-market model focused on customer 2013-2015 Key challenges From 1 to 5 Business Units Retail B2B Home Service Public Marketing tailored to customer needs 19% 18% 32% 20% 11% Insurance / Automotive Regulated professions Segment marketing approach by BU Hotels / Restaurants / Real estate / Bank
Slide 11: IS and Technology changes
IS and Technology changes 2013-2015 Focus on differentiating technology ● Innovate for differentiation ● Partition and adapt to gain speed and flexibility Develop « fail fast » culture ● Try, fail, fix ● Data driven Drive change through technology ● Online sales ● Client business center ● Sales and
Slide 12: Migrate toward Digital Culture and HR
Migrate toward Digital Culture and HR 2013-2015 Bring in digital culture ● 80% new top executives ● Hire digital natives ● Digital values ● All leaders are digital leaders Develop digital talents ● Expertise, culture and behavior ● Hire, Reveal, Grow ● Embark all teams in transformation, Engage and
Slide 13: Capital structure, ownership and governance
Capital structure, ownership and governance Capital Structure Ownership & Governance Priority given to deleveraging MDH Shareholder structure as of 12/31/2013 19% ● Debt repayment (488 M€) ● Ex-lender last lock-up on ● Dividend blocker 12/27/2013 81% ● Cerberus lock-up end Refinanced 100% of 2013 ma
Slide 14: YTD Q3 2013 Financials
Sobcal GROUP : YTD Q3 2013 FINANCIALS
Slide 15: Q3 2013 highlights
Q3 2013 highlights Sustained acceleration of growth in audiences in Q3 2013 Solocal Group: +9% of visits1 of which 29% mobile visits PagesJaunes.fr: +25% traffic2 towards professionals Mobile: more than 28 million application downloads at the end of September 2013, up +44% in one year Moving f
Slide 16: Q3 2013 highlights
Q3 2013 highlights Like-for-like revenues down 5.6% YTD, Internet revenues up 2% Advertising market still in negative territory, expected at -2.5%1 FY2013, a 5 pts drop since Q4 2012 projection In Q3, like-for-like revenues down 7.7% with a slowdown in Internet GOM margin steady through the firs
Slide 17: Group revenues: -5.6% in a still difficult environment
Group revenues: -5.6%1 in a still difficult environment Revenue decrease and disposal of Editus Business contraction partially offset by cost discipline on Print and HR -6.3% €799.9 M €749.4 M -5.6% Revenues in GOM in 45.2% 43.9% million Euros 20.4 million Euros 800 16.2 400 -1.3 pt 700 -17.1% 600 3
Slide 18: Trend in Printed directories: -15.9%
Trend in Printed directories: -15.9%1 Stable GOM ratio Revenues decrease thanks to -23% decrease in in line with expectations Paper-Print-Distribution costs in France -17.1% Revenues in €316.2 M €262,2 M GOM in million Euros -15.9% million Euros 46.7% 46.3% 350 200 6.7 -0.4 pt 300 53.0 0.0 150 250 4
Slide 19: Trend in Internet: +2.0% growth
Trend in Internet: +2.0%1 growth Internet growth slowdown GOM impacted by the disposal of Editus and the absence of non-recurring income +1.7% Revenues in 463.3 M€ 471.0 M€ GOM MBOinen M€ +2.0% million Euros million Euros 44.5% 43.0% 500 250 -1.5 pt 400 121.3 116.5 -3.9% 200 206.2 202.5 300 150 -1.8
Slide 20: GOM decreased by -9.1%
GOM decreased by -9.1% Change in consolidated gross operating margin (GOM) in million Euros 361.8 7.9 1.0 328.8 -9.1% 12.1 -8.3% (3.5) (50.5) GOM 9M 2012 Revenues Paper Other external Sales personnel Other personnel GOM 9M 2013 Print expenses expenses expenses Distribution Change -6.3% +24.9% -3.0%
Slide 21: Increase of amortization and tax charges
Increase of amortization and tax charges Moderate increase in financial expenses From gross operating margin to consolidated income In million Euros 9M 2013 9M 2012 Change Gross operating margin 328.8 361.8 -9.1% Legal employee profit-sharing (10.6) (11.6) +8.6% Share-based payment (1.8) (0.7) na De
Slide 22: Net cash flow: €116 M as of 30 September 2013
Net cash flow: €116 M as of 30 September 2013 Net cash flow as of 30 September 2013 (in million Euros) 329 (36) (93) (71) (13) (103) 116 13 GOM Capex Net Tax Other Net cash Decrease in ∆ net cash 9M 2013 Financial operational flow borrowings 9M 2013 income* charges** 9M 2013 (RCF1&3) and other * of
Slide 23: Compliance with covenants
Compliance with covenants Financial leverage* 6% Interest coverage 18% 4.3x 4.0x 4.0x 4.0x 4.0x 4.06x 4.00x 3.92x 3.75x 3.55x 3.0x 3.0x 3.0x 3.0x 3.0x 3.65x 3.71x 3.62x 3.63x 3.74x 09/30/12 12/31/12 03/31/13 06/30/13 09/30/13 30/09/12 31/12/12 31/03/13 30/06/13 30/09/13 Net debt over GOM Maximum all
Slide 24: Acceleration of Digital Transformation and 2014 Outlook
ACCELERATION OF DIGITAL TRANSFORMATION AND 2014 OUTLOOK
Slide 25: Digital 2015: invest in transformation
Digital 2015: invest in transformation 3-year GOM Restructuring CAPEX investment ■ Media and audiences ~10 M€ Mobile and indirect audiences (p.a. as of 2014) PagesJaunes new search 30 M€ Transactional services Web-2-Store / products and deals ■ Client and monetisation ~ 25M€ 25 M€ (p.a
Slide 26: Outlook 2014
Outlook 2014 2014 will be a year of profound changes with an acceleration of the digital transformation and investments, especially in Sales. In this context and in light of an uncertain economic environment, the outlook for 2014 is: Revenues decrease between -3 and -6% Normalised1 gross operati
Slide 27: Questions & Answers
Sobcal GROUP : QUESTIONS & ANSWERS
Slide 28: Appendix
Sobcal GROUP : APPENDIX
Slide 29: Group
So GROUP mappy “people idGal Aree | Qmbavche.com Kettravo.com CHRONORESTO @ Zoom Sobcal CVs s@rcrierpv ~RUMS HORYZON MEDIA leadformance4 (Q0Q) (ecius
Slide 30: Solocal Group Applications
Solocal Group Applications January 2014 • Investor Presentation 30
Slide 31: Solocal Group Partnerships
Solocal Group Partnerships January 2014 • Investor Presentation 31
Slide 32: 9M 2013: stable underlying GOM margin
9M 2013: stable underlying GOM margin 9M 2013 9M 2012 Change Reported gross operating margin (€M) 328.8 361.8 -9.1% Reported GOM margin 43.9% 45.2% -130 bps - Expensing of fixed salesforce costs -1.4 - 2008 and 2009 Investment Tax Credit -2.2 accounted for in 2012 - Disposal of Editus -3.0 Underlyin
Slide 33: 9M 2013: underlying Net cash flow
9M 2013: underlying Net cash flow 9M 2013 9M 2012 Change Reported Net Cash Flow (€M) 115.9 165.2 -29.8% - Timing of 2012 interest payments +10.0 - 2011 Income tax refund -5.0 Underlying NetCash Flow (€M) 125,9 160,2 -21,4% January 2014 • Investor Presentation 33
Slide 34: Continued reduction of net indebtedness
Continued reduction of net indebtedness Net debt* (in million Euros) 1,770 1,742 1,684 1,629 1,613 09/30/2012 12/31/2012 03/31/2013 06/30/2013 09/30/2013 * Net financial debt: total gross financial debt plus or minus the fair value of derivative asset and liability hedging instruments and minus cash
Slide 35: Financial structure and debt maturity profile as of 09/30/2013
Financial structure and debt maturity profile as of 09/30/2013 2013 2014 2015 2018 Total Marge (bps) / Size (€M) Rate (%) 71 M€ 84 M€1 1,213 M€ 350 M€ 1,718 M€ Tranche A1 49.6 175 Tranche A3 954.5 400 Tranche A5 342.8 360 Senior 289 secured RCF 1* - 175 notes A5 RCF 3* - 360 Total bank debt 1,347.0
Slide 36: Glossary
Sobcal GROUP : GLOSSARY
Slide 37: 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 38: 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 39: www.solocalgroup.com
So www.solocalgroup.com GROUP
Solocal Group — BNP High Yield & Leveraged Finance Conference 2014 on 6ix