Solocal Group · EURONEXT:LOCAL

Solocal — Investor Presentation (February 2018)

57 slides from Solocal's investor presentation, Feb 15, 2018

  1. Slide 1: Investor Presentation

    February 15th 2018 INVESTOR PRESENTATION 1

  2. Slide 2: Disclaimer

    DISCLAIMER This document contains forward-looking statements. Any forward-looking statement does not constitute forecasts as defined in European regulation (EC) 809/2004. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trend

  3. Slide 3: SoLocal 2020 Investment Case

    1 SOLOCAL 2020 INVESTMENT CASE

  4. Slide 4: SoLocal Overview

    SOLOCAL OVERVIEW THE PREFERRED LOCAL DIGITAL SERVICES PARTNER for ALL BUSINESSES in supporting THEIR GROWTH 2.4BN visits(2) €756M 2017 rev.(2) >450k web sites(3) 55% reach(1) 469K customers >50K camp/year 35M profiles 4M listed pros 150K daily updates (1) Source Médiamétrie October 2017. Reach is de

  5. Slide 5: 2017 Financial Results

    2017 FINANCIAL RESULTS (1) €M 2017 2016 Q4 Q4-16 REVENUE 756 -5.7% 200 -3.6% 2017 GUIDANCE % digital 84% 84% Internet 636 0% 172 +2.1%  INTERNET REVENUE GROWTH: ~ -1% EBITDA rec. (2) 196 -15.1% - -  EBITDA: ≥€190M NET DEBT 332 -70% - - CASH POSITION 86 27(3) - - (1) Continued activities; (2) EBI

  6. Slide 6: From PagesJaunes to digital services company

    FROM TO PAGESJAUNES CENTRIC DIGITAL SERVICES COMBINED WITH COMPANY LEVERAGING 2017 2018 -2020 DIGITAL MARKETING OWNED MEDIA • Revenue / EBITDA decline • Back to profitable growth • Local Search / Media • Full web & Apps Digital services • Sales centric • User / Customer Centric • SMB focus • All cus

  7. Slide 7: Key Investment Highlights

    KEY INVESTMENT HIGHLIGHTS 1 Fast-growing digital services company Key competitive advantage through combination of massive rich local content, powerful 2 data, local coverage, strong partnerships & scalable tech platforms 3 Recurring revenue businesses with increasing customer retention rate 4 EBITD

  8. Slide 8: SoLocal 2020 SoLocal Update

    2 SOLOCAL 2020 SOLOCAL UPDATE

  9. Slide 9: A Financial Restructuring Success

    A FINANCIAL RESTRUCTURING SUCCESS… SUSTAINABLE FINANCING OWNERSHIP STRUCTURE STRUCTURE (1) 1 JO Hambro Capi 2 River & Mercantile AM 3 DNCA Invest 4.7x 4 Ed de Rothschild AM 5 6 Top 20 7 [50-60%] 1.7x 8 9 10 2016 2017 … 20 Leverage (Net Debt/EBITDA) 02/15/2018 - INVESTOR PRESENTATION (1) Ownership as

  10. Slide 10: Coupled with a New Governance

    … COUPLED WITH A NEW GOVERNANCE… NEW BOARD NEW CHAIRMAN NEW CEO  Fully revamped board  Diverse and multi- disciplinary skills  100% independent directors Pierre DANON Eric BOUSTOULLER  Including two Former Chairman and CEO of Former Corporate Vice President of representatives of Numericable and

  11. Slide 11: A New Management Team Aligned with Shareholder Interests

    … AND A NEW MANAGEMENT TEAM ALIGNED WITH SHAREHOLDER INTERESTS Eric BOUSTOULLER Arnaud DEFRENNE Frédéric OBALA Christophe PARCOT Chief Product Officer* Chief Executive Officer Chief Tech Officer Chief Revenue Officer Chief Media Officer Former L’Oréal, SoLocal Former Teads COO Digitas CTO & Yahoo EM

  12. Slide 12: Leveraging Strong Assets to Deliver Success

    LEVERAGING STRONG ASSETS TO DELIVER SUCCESS #1 #2 #3 #4 #5 AUDIENCE DATA TECH PARTNERS COVERAGE 12 02/15/2018 - INVESTOR PRESENTATION

  13. Slide 13: Massive & Growing O&O Audience Across All Devices

    MASSIVE & GROWING O&O AUDIENCE ACROSS ALL DEVICES #1 55% +2.4% 2M MONETIZATION ENGINE SoLocal reach Growth versus Daily used App in October 2017 2016(1) INTENT-DRIVEN 2.4bn (1) +5% DATA Visits on SoLocal Growth contacts media in 2017 (1) Fixed & mobile audience for fiscal year 2017. Continued activi

  14. Slide 14: Unique Local User & Pro Data

    UNIQUE LOCAL USER & PRO DATA #2 2 > 5M DIRECTLY GEO-LOCATED MOBILES 1 2.4BN VISITS & 35M PROFILES  Geo-profiling: high value data Physical location, moment of life, data  Allow in-store tracking: Geotracking (2M daily) on users purchasing intent MASSIVE DATA MONETIZATION OPPORTUNITIES 3 >7M SALES

  15. Slide 15: In-House Digital Services Platform

    IN-HOUSE DIGITAL SERVICES PLATFORM #3 OWNED MEDIA PROGRAMMATIC DMP – Adserver- Bidder SCALABILITY / INDEPENDENT PRESENCE MGT WEB SITES Full web diffusion platform Building platform 15 02/15/2018 - INVESTOR PRESENTATION

  16. Slide 16: Balanced and Strong Partnerships with GAFAM – 1/2

    BALANCED AND STRONG PARTNERSHIPS WITH GAFAM – 1/2 #4 LOCAL CONTENT DIGITAL ADVERTISING PROVIDER INTEGRATOR Purchase SoLocal services 1 Content: addresses, Customer opening Purchase: 3 1 FREE 2 Attribution hours, Adwords, booking,… Audience: 2 Create / manage / redirection BingAds,.. optimize campaig

  17. Slide 17: Balanced and Strong Partnerships with GAFAM – 2/2

    BALANCED AND STRONG PARTNERSHIPS WITH GAFAM – 2/2 #4 LOCAL CONTENT DIGITAL ADVERTISING PROVIDER INTEGRATOR  150 K/day UPDATES OF  HIGH GROSS MARGIN DIGITAL BEST-IN-CLASS LOCAL CONTENT SERVICES DELIVERED >50%  PRIVILEGED APIs(1)  STATE-OF-THE-ART IN-HOUSE EXPERTISE: - Display design / AdText - Te

  18. Slide 18: Full Local Coverage: Sales & Customer Support

    FULL LOCAL COVERAGE: SALES & CUSTOMER SUPPORT(1) #5 LONGSTANDING RELATIONSHIP 1,800 Sales reps HIGH LEVEL OF SUPPORT customer 220 support (1) As of 12/31/2017 18 02/15/2018 - INVESTOR PRESENTATION

  19. Slide 19: Unique Combination of Strengths to Serve Customers

    UNIQUE COMBINATION OF STRENGTHS TO SERVE CUSTOMERS GAFAM WEB AGENCIES PURE AD TECH AUDIENCE • Owned media • Massive Audience DATA & TECH • Rich daily updated local content • Purchase-driven & geolocated data • Proprietary programmatic technology LOCAL PRESENCE • 1,800 sales reps • SMB field approach

  20. Slide 20: SoLocal 2020 Strategic Outlook

    3 SOLOCAL 2020 STRATEGIC OUTLOOK

  21. Slide 21: Our Vision

    OUR VISION Become THE PREFERRED LOCAL DIGITAL SERVICES PARTNER for ALL BUSINESSES in supporting THEIR GROWTH 21 02/15/2018 - INVESTOR PRESENTATION

  22. Slide 22: At the Centre of Growing Market Opportunities

    AT THE CENTRE OF GROWING MARKET OPPORTUNITIES Market growth Key drivers assessment Presence • Full web presence Market leader • Growing number of publishers 0 - 5 % (2) • Programmatic display Advertising Market • Video challenger • Social • Mobile 12 - 15% (1)(2) Sites • Basic presence Market leader

  23. Slide 23: Transforming to Grow

    TRANSFORMING TO GROW FULL WEB REINVENTED SMART / X-DEVICE OFFER MEDIA ORGANIZATION DIGITAL PRESENCE DIGITAL DIGITAL DIGITAL PRESENCE ADVERTISING WEBSITES DIGITAL DIGITAL PRINT TO FEATURES SOLUTIONS DIGITAL 23 02/15/2018 - INVESTOR PRESENTATION

  24. Slide 24: Delivering on Customer Expectations

    DELIVERING ON CUSTOMER EXPECTATIONS FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION BUILD DIGITAL VISIBILITY FIND NEW CUSTOMERS BE MORE EFFICIENT € DIGITAL COACHING 24 02/15/2018 - INVESTOR PRESENTATION

  25. Slide 25: Digital Services Gateway for All Companies

    DIGITAL SERVICES GATEWAY FOR ALL COMPANIES FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL DIGITAL PRESENCE DIGITAL DIGITAL DIGITAL DIGITAL PRINT TO FEATURES PRESENCE ADVERTISING WEBSITES SOLUTIONS DIGITAL PRESENCE MGT SEARCH: ALL RANGE OF BOOKING MGT FLYERS Ranking, Performanc

  26. Slide 26: From Highly Complex Offering …

    FROM HIGHLY COMPLEX OFFERING … FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION O ffre identité visuelle O ffre Accompagnement Digital S ite Connect / Site First > 50M€ > 20M€ P r ise de RDV en ligne S ite Visibilité SOCIAL S ite Premium > 15M€ P ermanence Téléphonique P ack Présence Fa

  27. Slide 27: … To Packaged, Full Web, Evergreen

    … TO PACKAGED, FULL WEB, EVERGREEN FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL DIGITAL PRESENCE AD. SERVE SMBs LIKE TOP AD AGENCIES SERVE TOP BRANDS Pack 1 Pack 2 Pack 3 Pack 4 BOOSTER TRAFFIC* BOOSTER CONTACT Guaranteed results Performance BOOSTER CLIC DIGITAL AD. SEA Serv

  28. Slide 28: Unique Integrated Offer for Network Accounts

    UNIQUE INTEGRATED OFFER FOR NETWORK ACCOUNTS FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL DIGITAL PRESENCE AD. UNIQUE SAAS PLATFORM FOR NETWORK ACCOUNTS PRESENCE PERFORMANCE Display & Store locator Pack Presence Ranking programmatic €1.5Bn €130M >200 2016 digital com. 2017 s

  29. Slide 29: New Go To Market: Lifetime Management

    NEW GO TO MARKET: LIFETIME MANAGEMENT FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION Year N Digital Coach Year 1 x month Automatic Mon agence Upsell digitale 3 month Product renewal JE GERE Automatic use MON IMAGE 1 month Upsell renewal Product J’ACQUIERS DES CLIENTS use Fulfilment JE

  30. Slide 30: Early Successes | Pack Presence

    EARLY SUCCESSES | PACK PRESENCE FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL PRESENCE  Fully launched in Q4 2017  20+ web publishers  23K customers (1)  1,500 new customers per week(2)  Gross margin >60% Site Présence  ARPA: €290 Site Visibilité Site Premium Site Privi

  31. Slide 31: Early Successes | Digital Advertising

    EARLY SUCCESSES | FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL AD.  Relaunched in Q4 2017  Full range of Boosters’: clics to real contacts  Scaled in-house digital platform  3,000 customer/month  ARPA: €260/month  Gross margin: >50%  Partners: … Full web Target 2018:

  32. Slide 32: Early Successes | Evergreen – SaaS-like

    EARLY SUCCESSES | EVERGREEN – SAAS-LIKE FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL DIGITAL DIGITAL PRESENCE AD. WEBSITES DIGITAL DIGITAL PRINT TO FEATURES SOLUTIONS DIGITAL 10% >25 K Of 2017 sales are customers already already automatic equipped with automatic renewal rene

  33. Slide 33: Early Successes | ARPA Boost – Premium Telesales

    EARLY SUCCESSES | ARPA BOOST – PREMIUM TELESALES FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION  Launched in January 2017  + 159% Av. ARPA compared  9 premium tele-sales teams to traditional prospect tele- sales (€1.1K vs €0.4K)  High ARPA target vs high number of customer  + 54%

  34. Slide 34: Full Range Offer of Web Sites

    FULL RANGE OFFER OF WEB SITES FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION DIGITAL WEBSITES INCREASE UPSELL TO PREMIUM CUSTOMER BASE SITES  Industrialized starter  Customized creatives offer based on few templates  Large range of features: booking, e-  “Do It With Me” model comm

  35. Slide 35: Successful Management of Legacy Business

    SUCCESSFUL MANAGEMENT OF LEGACY BUSINESS FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION PRINT TO DIGITAL SUCCESSFUL TRANSITION TO DIGITAL PRINT & VOICE: NO CLIFF IMPACT Revenue by business (%) Print & Voice financial evolution (€m) 439 439 366 20% 16% 32% 366 304 304 233 187 151 233 1

  36. Slide 36: Transforming to Grow

    TRANSFORMING TO GROW FULL WEB REINVENTED SMART / X-DEVICE OFFER MEDIA ORGANIZATION DIGITAL PRESENCE DIGITAL DIGITAL DIGITAL PRESENCE ADVERTISING WEBSITES DIGITAL DIGITAL PRINT TO FEATURES SOLUTIONS DIGITAL 36 02/15/2018 - INVESTOR PRESENTATION

  37. Slide 37: Growing Audience & Engagement

    GROWING AUDIENCE & ENGAGEMENT FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION RELEVANCE / ENGAGEMENT / REACH FREQUENCY  New UX, UI  Deeper engagement through:  User first  Booking  Transaction,  Mobile first  Leads, …  Single field search  Ratings / recommendations  Natural l

  38. Slide 38: End-to-End Vertical User / Customer Model

    END-TO-END VERTICAL USER / CUSTOMER MODEL FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION Restaurants, Services, House construct. Booking, leads, Health Hotels, Retail, .. driving school,… maintenance ratings, transactions, social … In partnership with vertical pure players to syndicat

  39. Slide 39: New UX UI Roadmap

    NEW UX UI ROADMAP FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION Conversational – Natural 2019 Single Field Search language Content Syndication RESHAPE UI RECOMMENDATION PARTNERSHIP APP & BROW BOOKING RELEVANCE D RESHAPE N LOYALTY BASIC CONTENT PROGRAM O S GDPR (2) J J A M 2018 J F M

  40. Slide 40: Transforming to Grow

    TRANSFORMING TO GROW FULL WEB REINVENTED SMART / X-DEVICE OFFER MEDIA ORGANIZATION DIGITAL PRESENCE DIGITAL DIGITAL DIGITAL PRESENCE ADVERTISING WEBSITES DIGITAL DIGITAL PRINT TO FEATURES SOLUTIONS DIGITAL 40 02/15/2018 - INVESTOR PRESENTATION

  41. Slide 41: Building Smart Organization & Culture

    SMART BUILDING SMART ORGANIZATION & CULTURE FULL WEB / X DEVICE OFFER REINVENTED MEDIA ORGANIZATION OPERATING MODEL LEAN ORGANIZATION  New customer journey  Headcounts reduction across all orgs.  Evergreeen contracts  Fewer & more accountable mgt  Lifetime management - Minus 2 mgt layers  All

  42. Slide 42: R&D & IT | Fast Move to Cloud

    R&D & IT | FAST MOVE TO CLOUD FULL WEB / X DEVICE OFFER REINVENTED MEDIA SMART ORGANIZATION Platform As A Service  Hybrid / public cloud for in-house platforms: owned media, programmatic, presence mgt., sites R&D  Leveraging AI, Machine learning, Cognitive serv.  Create data as a service platform

  43. Slide 43: SoLocal 2020 Financials

    SOLOCAL 2020 FINANCIALS Solocal

  44. Slide 44: Key Growth Drivers

    KEY GROWTH DRIVERS COST CHURN REDUCTION REDUCTION UP SELLING  Headcount reduction  Evergreen contracts  Customer Journey  Procurement discipline  Dedicated retention team  Premium tele sales-teams  Real Estate optimization  Customer scoring  New pay plan LARGE OFFERS ACCOUNTS  Presence pen

  45. Slide 45: 2017 Revenue Breakdown

    2017 REVENUE BREAKDOWN  DRIVERS 2017 VS 16 2016 2017  Success of innovative Digital Marketing 148 site and Booster 175 +18% offerings Local Search 490  Client base decline: -5% 461 -6%  Stable ARPA: -1%  Clients migrating Print & Voice 164 120 -27% towards digital TOTAL 801 756 -6% 45 02/15/201

  46. Slide 46: Key Financial Data | Profit & Loss Statement

    KEY FINANCIAL DATA | PROFIT & LOSS STATEMENT In millions of euros 2016 2017 change  Internet revenues 638 636 0%  Print & Voice revenues 164 120 -27% Revenues from continued activities 801 756 -6%  Recurring staff costs (363) (367) +1%  Recurring net external expenses (207) (192) -7% Recurring E

  47. Slide 47: Key Financial Data | Cash Flow Statement

    KEY FINANCIAL DATA | CASH FLOW STATEMENT In millions of euros 2016 2017 change Recurring EBITDA from continued activities 231 196 -15%  Change in Working Capital (57) (41) -27%  CAPEX (67) (53) -21%  Corporate income tax paid (13) (45) +254%  Non cash and non recurring items (24) (24) -2%  Cash

  48. Slide 48: Massive Net Debt Reduction & Sustainable Cash Position

    MASSIVE NET DEBT REDUCTION & SUSTAINABLE CASH POSITION In millions of euros 1 106 1,097 332 31/12/2016 31/12/2017 FINANCIAL LEVERAGE 4.7x 1.7x CASH POSITION (IN €M) 91 86 02/15/2018 - INVESTOR PRESENTATION

  49. Slide 49: Cost Savings Plan: >€120M Full Year Savings

    COST SAVINGS PLAN: >€120M FULL YEAR SAVINGS FOR €180M ONE-OFF COSTS Q3-Q4 2017 2018 2018 - 2019 2020 & Further > €15M SAVINGS AND OPERATIONAL LEVERS LEAN COST AVOIDANCE Staff: Headcount reduction Further headcount reduction >€5M • Hiring Freeze • Management performance Procurement: Business: • Revis

  50. Slide 50: Transforming While Securing Business Continuity

    TRANSFORMING WHILE SECURING BUSINESS CONTINUITY % of reduction of total employees by function Mitigation plan  Evergreen  Customer Journey FIELD SALES [- 25 ; -30%]  New market seg.  New pay plan  Customer scoring  Tele-sales reinforcement : +100 positions in 2018 TELESALES [+ 8 ; + 12%]  Pre

  51. Slide 51: Strongly Aligned Interests

    STRONGLY ALIGNED INTERESTS  Strict alignment of interests between the CEO and shareholders  New Long-Term Incentive Plan (“LTIP”) to be submitted to shareholders on March 9th, 2018  Key drivers of the new LTIP are directly linked to performance in terms of value creation: - EBITDA – CAPEX - Stock

  52. Slide 52: New KPIs and Guidance

    NEW KPIS GUIDANCE  Recurring EBITDA Stable in 2018 1. Internet revenues Double-digit growth in 2020 MID TERM 2. Recurring EBITDA Double-digit growth from 2019 onward KPI 3. EBITDA to cash convertion Trending to 50% in 2020  Digital Sales growth OPERATIONAL  Audience growth Quaterly KPI’s  Evergr

  53. Slide 53: Key Take Away

    KEY TAKE AWAY Digital services company set up for growth High impact customer offer & media experience Recurring revenue growth Lean fixed cost structure EBITDA growth / cash flow generation Management aligned with shareholders 53 02/15/2018 - INVESTOR PRESENTATION

  54. Slide 54: Appendix

    APPENDIX Solocal

  55. Slide 55: IFRS 15 – Revenues from Contracts with Customers

    IFRS 15 – REVENUES FROM CONTRACTS WITH CUSTOMERS  As of January 1, 2018, SoLocal applies the IFRS 15 standard to revenue recognition in its IFRS consolidated accounts  IFRS 15 introduces new principles for revenue recognition which require the following for each product in the digital range:  Pre

  56. Slide 56: IFRS 9 – Financial Instruments

    IFRS 9 – FINANCIAL INSTRUMENTS  The new standard will come into effect on January 1, 2018.  The Group has no more hedging instruments but the norm also impacts the recognition of credit losses on client account receivables.  The average 3-year credit loss rate (credit loss/turnover) for client ac

  57. Slide 57: IFRS 16 – Rental Agreements

    IFRS 16 – RENTAL AGREEMENTS  The new standard will come into effect on January 1, 2019.  Operating leases of longer than 12 months will be recorded on the balance sheet as financial debt along with an asset reflecting the right to use the asset over the lease term.  The norm impacts mainly the tr

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