Solocal Group · EURONEXT:LOCAL
Solocal — Investor Presentation (January 2020)
40 slides from Solocal's investor presentation, January 2020
Slide 1: Solocal January 2020
Solocal January 2020 JANUARY 2020
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
Slide 3: Key investment highlights
Key investment highlights • Digital services company set up to capture double digit growth of digital market • Key competitive edge through combination of massive rich local content, powerful data, local coverage, strong partnerships & scalable tech platforms • Recurring revenue businesses driven by
Slide 4: Presentation
Presentation solocal
Slide 5: Solocal overview
Solocal overview 2.4bn visits1 €669m 2018 revenue 51% reach2 399k customers 4.7m listed pros >10m reviews4 >540k websites3 >40k camp./year 1) Continued activities 2) Source Médiamétrie, 2018 average, reach is defined as the number of unique visitors on a website expressed as a percentage of a refere
Slide 6: Financial Highlights
Financial Highlights • Deep transformation initiated in 2018: swift reorganisation, repositioning of the offer, towards operational excellence of the sales organisation • Digital order intake growth in Q3 2019 • Stabilisation of 2018 recurring EBITDA1, following stabilisation in 2018FY1 after 9 year
Slide 7: … in a market with substantial opportunities
… in a market with substantial opportunities Share of Internet expenses in total advertising spend 2018 (in €bn) 76.0 22.5 +12% +26% DIGITAL AD VIDEO AD 4.1 64% 60% 11.0 51% +11% 39% DISPLAY +41% +10% PROGRAMMATIC E-COMMERCE France Netherlands China UK Source: Historical data SRI-PWC Jan.18, Observa
Slide 8: Leveraging strong assets to deliver success
Leveraging strong assets to deliver success #1 #2 #3 #4 #5 AUDIENCE DATA TECH PARTNERS COVERAGE Become the trustworthy local digital services partner for all businesses in supporting their growth P.8
Slide 9: Unique combination of strengths vs. competitors
Unique combination of strengths vs. competitors WEB VERTICAL GAFAM PURE AD TECH SaaS PLAYERS AGENCIES PLAYERS AUDIENCE • Proprietary media • Rich content updated daily • SEO know-how • Premium partnerships LOCAL PRESENCE • Customer-facing employees • Field sales workforce • Local contact with nation
Slide 10: Value Proposition
Value Proposition solocal
Slide 11: New digital range in figures
New digital range in figures Digital Digital New Presence Websites Advertising Services Print 2018 Revenues €131 M €107 M €325 M €7 M €98 M1 Market +5% +20% +11% +25% -10% growth2 “FULL WEB” | ALL DEVICES | MULTICHANNEL IN SUBSCRIPTION MODE | WITH DIGITAL COACHING 1 Printed directories business P.11
Slide 12: Focus on the three main product ranges
Focus on the three main product ranges PRESENCE WEBSITES ADVERTISING Presence Presence Offline Websites Priority Ranking Visibility ESSENTIEL PREMIUM Performance Essentiel PRESENCE LEADS AND DISPLAY MINI-SITE MINI-SITE PREMIUM DRIVE TO STORE CAMPAIGNS Premium Booster Social Tract Contact Visibility
Slide 13: Websites: new Essentiel range
Websites: new Essentiel range https://www.lk-cuisine-agencement.fr/ https://www.soins-de-sophie.fr/ https://www.salon-artdoise.fr/ https://www.fabricant-panier-grillage.fr/ P.13
Slide 14: New Presence offer – Unique customer mobile app
New Presence offer – Unique customer mobile app Update Manage news reviews Add Monitor Edit profile dashboard pictures P.14
Slide 15: Automatic update of customer profile
Automatic update of customer profile on Searching professionals on Google Logo Geolocalisation Photos Website Address Opening hours Phone News P.15
Slide 16: Priority Ranking: customers choose keywords and geographical coverage interactively
Priority Ranking: customers choose keywords and geographical coverage interactively Selection of offers Presence settings Locations Activities P.16
Slide 17: Complementary digital offers: La Grange aux cuirs
Complementary digital offers: La Grange aux cuirs located in Le Perreux- Sur-Marne Presence management Lead generation PagesJaunes GMB Priority Ranking on PagesJaunes Ranking on Bing E-reputation Solocal Manager CTA SEA (digital ad) Website P.17
Slide 18: Consistent and simplified service range
Consistent and simplified service range Priority Ranking SIMPLIFIED Presence ACTIVITIES Presence Premium Essentiel GEOGRAPHY « FULL WEB » ? ? 12-month subscription, automatic renewal SUBSCRIPTION MODE P.18
Slide 19: Positive first results on SME segment
Positive first results on SME segment Migration rate1 Telesales Development rate2 Field sales Development rate3 > 80% + 20-25% + 5-10% Being top ranked means PagesJaunes accounts for 30% more leads calling, It brings me customers, of requests for quotes and 18% hence more work. prospects and more of
Slide 20: Reinforced Large Account dynamics
Reinforced Large Account dynamics • Ongoing momentum of Large Account customer segment Examples of Q3 2019 new Large Account contracts • Solocal provides local support to all Large Accounts’ points of sale via comprehensive product range, including - Site Locator / Presence - Priority Ranking - Driv
Slide 21: Large Account contract case study: Intermarché
Large Account contract case study: Intermarché • Strategic 3-year contract announced in July 2019 • Intermarché, Bricorama, Bricomarché, Brico Cash, Roady et Netto brands benefit from Presence product • Les Mousquetaires drive visibility and branding for c. 3,000 points of sale: reliable and consist
Slide 22: PagesJaunes traffic positive trend in Q3 2019
PagesJaunes traffic positive trend in Q3 2019 + 19% + 81 M Number of visits PagesJaunes + partnerships 510 (in Millions) * 429 ▪ Growth driven by partnerships Desktop ▪ Increase in RGPD-compliant first-party data for Desktop Solocal ▪ Mobile traffic up (vs. Q3 2018) Mobile Mobile Q3 2018 Q3 2019 P.2
Slide 23: Recent activity and highlights
Recent activity and highlights
Slide 24: Q3 2019: Key messages
Q3 2019 : Key messages • Back to growth in H2 2019 • Q3 2019 Digital order intake growth: +5.3% vs. Q3 2018 • New digital service range fueling growth • Close to 60% subscription sales: driving long-term recurring revenues • Long-term profitable growth P.24
Slide 25: Accelerated order intake conversion into revenues
Accelerated order intake conversion into revenues • Order intake are converted into % of quarterly order intake converted into revenues in the following quarters (average of first two quarters) revenues faster than previous years thanks to: Digital - Sales work on clearing and incresing quality of o
Slide 26: Q3 2019: Digital order intake growth
Q3 2019: Digital order intake growth • +5.3% growth of Digital order intake in Q3 2019 In million euros Q3 2018 Q3 2019 Change vs. Q3 2018: - Roll-out of new products in subscription mode to customers Digital order intake 96 101 +5.3% - Organisation upgrade delivering short & long-term productivity
Slide 27: Q3 2019: Structural shift to deliver sustainable growth
Q3 2019: Structural shift to deliver sustainable growth • Ongoing organisation upgrade ensuring • Leading to further increase in productivity long-term growth acceleration, including: & profitability - New product launch - New sales tools and training - Upgrading management in sales organisation Wee
Slide 28: H1 2019: Growth in recurring EBITDA despite decrease in revenues
H1 2019: Growth in recurring EBITDA despite decrease in revenues In million euros H1 2018 H1 20191 Change H1 2019 (IFRS 16) • Revenues are still impacted from ▪ Digital revenues 293 268 -9% 268 H2 2018 order intake decrease ▪ Print revenues 57 36 -37% 36 Total revenues 350 304 -13% 304 • Moderate gr
Slide 29: H1 2019: Focus on recurring EBITDA
H1 2019: Focus on recurring EBITDA 90.0 90,0 81.2 • IFRS 16 accounting rule applied 80.0 80,0 since 1st January 2019 +5.2% 7.6 70.0 70,0 70.0 • IFRS 16 impact on EBITDA: +€8m 9.4 11.0 as of 30th June 2019 60,0 60.0 - Due to rent costs 50,0 50.0 • Estimated 2019FY impact: c. €16m 40,0 40.0 • Recurrin
Slide 30: Ongoing decrease in the fixed cost structure in H1 2019
Ongoing decrease in the fixed cost structure in H1 2019 • €50m reduction in costs in H1 2019, In million euros H1 2018 H1 20191 on top of €60m cost reduction in 2018 Revenues 350 304 (already booked in 2018FY), driven by ▪ Variable costs (33) (33) - Decrease in personnel expenses ▪ Fixed costs (247)
Slide 31: Optimising investments for successful transformation & growth
Optimising investments for successful transformation & growth OTHER 2 MEDIA PLATFORMS IT & CLOUD Investments in Group media IT infrastructure modernization 6 • Pages Jaunes 4 and Move to Cloud • Search engine • Voice search H1 2019 Capex • Mappy MaaS (mobility as a service)… DATA €21m Big Data and a
Slide 32: Cash flow generation
Cash flow generation o/w IFRS 16 • IFRS 16 included for H1-2019 In million euros H1 2018 H1 20191 impact Recurring EBITDA 70 81 +8 • Seasonality in cash generation: ▪ Non monetary EBITDA 5 6 - H2 historically higher than H1 ▪ Change in WCR (25) (19) - - More Print revenues recognised − of which Chan
Slide 33: Cash outflows related to the 2018 restructuring plan
Cash outflows related to the 2018 restructuring plan Disbursed1: €151m Forecast: €54m 63 42 32 22 18 16 Total 9 3 1 €205m 2018FY 2018FY Q1 19 Q1 Q2 19 Q2 Q3 19 Q3 Q4 19 Q4 Q1 20 Q1 Q2 20 Q2 Q3 20 Q3 Q4 20 Q4 Notice period • Monthly salary (2-3 months) Mobility / reclassification leave • 80% of the m
Slide 34: H1 2019: Stable financial leverage
H1 2019: Stable financial leverage In million euros H1 2018 H1 20191 • Debt covenants according to the bond ▪ Gross debt 398 409 documentation are not based on IFRS 16 ▪ Cash EoP 72 58 - €398m bond maturing March 2022 ▪ Net debt 326 349 • Financial leverage2 = 1.9x, ie 45% headroom relative to the b
Slide 35: Next quarters: Accelerating growth
Next quarters: Accelerating growth • Keeping up growth into Q4 2019 - Focus on new Products roll-out (existing & new customers) - Cross-media ad campaign to fuel new customer acquisition - Building on Q3 2019 sales momentum and positive energy • 2019 target: • Stabilised Digital order intake in 2019
Slide 36: Appendix
Appendix
Slide 37: Main features of 2022 bond
Main features of 2022 bond • Amount: €398m Interests: 8% payable quarterly • BASKETS IN THE 3-month EURIBOR rate – with a minimum of 1 % + margin based BOND DOCUMENTATION on the level of consolidated net financial leverage ratio (consolidated net debt/consolidated EBITDA) at the end of each semester
Slide 38: H1 2019: Impact of the IFRS 16 standard on leases
H1 2019: Impact of the IFRS 16 standard on leases IFRS 16 Estimated • Applicable as of 1st January 2019 Impact IFRS 16 In million euros as of Impact as - Recognition on balance sheet of all lease commitments 30/06/19 of 31/12/19 currently recognised as off balance sheet commitments and finance lease
Slide 39: Value-added Website range
Value-added Website range * Upfront payement WEBSITES WEBSITES ESSENTIEL PREMIUM PRIVILEGE Customisable templates Exclusive templates, optimised design Fully customised design with tailor by dedicated webmaster made functionalities and pro photos SEO optimised content SEO strategy including 10 keywo
Slide 40: Focus on Presence and Priority Ranking product range
Focus on Presence and Priority Ranking product range Presence Priority Ranking Essential Premium Initial Privilege Integral All relevant keywords Up to 35 keywords Foursquare … Up to 20 keywords + + + Visibility on: Visibility on: Visibility on: Visibility on: 21 websites & media 21 websites & media