Solocal Group · EURONEXT:LOCAL
Solocal — Q2 2014 Earnings Presentation
45 slides from Solocal's earnings presentation, Jul 30, 2014
Slide 1: Investor Presentation 2nd Quarter 2014
INVESTOR PRESENTATION 2ND QUARTER, 2014 WEDNESDAY 30 JULY 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: Key Figures & Transformation Update
KEY FIGURES & TRANSFORMATION UPDATE
Slide 4: Highlights
Highlights Finalisation of the strengthening of the financial structure Net debt decreased by € 461M in H1, down to € 1.12bn Financial leverage reduced to 2.92x GOM as of 30 June, with a 35% headroom on covenant 2nd Quarter results in line with the outlook announced Consolidated revenues of €
Slide 5: Digital 2015: a transformation well underway
Digital 2015: a transformation well underway AUDIENCE CLIENT TECHNOLOGY +22% of business traffic Set up of 5 vertical BUs CRM & new sales tools New transactional services New organization of sales, New marketing / in PagesJaunes marketing and customer targeting tools service New site &
Slide 6: Business Highlights 2nd Quarter 2014
BUSINESS HIGHLIGHTS 2ND QUARTER 2014
Slide 7: Our mission
Our mission Simply connect people with local businesses Q2 2014 Results 7
Slide 8: Our strategy: Local Communication
Our strategy AUDIENCE BUSINESS Leading brands, CONTENT ~52% reach1 ~650,000 advertisers LOCAL Communication EXPERT SALES FORCE 2,200 local communication experts Figures at 12/31/2013 1Source: Nielsen Médiamétrie indicator – Monthly average for January to November 2013 for Solocal Group Number of uni
Slide 9: Content & Engagement Q2 highlights
Content & Engagement Q2 highlights BUSINESS CONTENT New collection of websites Integration of Leadformance Transactional services integrated within PagesJaunes Product shopping launch in Mappy New website A Vendre A Louer Q2 2014 Results 9
Slide 10: Growing business content & engagement
Growing business content & engagement 4M businesses detailed pages 235K websites ● New collection New ● Leadformance in Q2 integration 596K live accounts in business center (campaign management) 21K deals 885K reviews Figures at 06/30/2014 Q2 2014 Results 10
Slide 11: Leadformance acquisition: leading European stores & products locator
Leadformance acquisition: leading European stores & products locator More than 130 large brands (Darty, Orange,…) >40M visits on websites dedicated to stores More than 110 countries covered Figures at 06/30/2014 Q2 2014 Results 11
Slide 12: Audiences and media Q2 highlights
Audiences and media Q2 highlights AUDIENCE #6 in audience in France / ~53% reach1 Solocal Group: +11% of visits2 PagesJaunes.fr: +22% of traffic3 towards professionnals Mobile: 34% of total visits More than 33M apps download up +28% in one year Q2 figures at 06/30/2014 1Source: Nielsen Méd
Slide 13: Mobile: growing engagement and revenues
Mobile: growing engagement and revenues Applications Visits Contacts Revenues +28% +39% +47% +43% Q2 figures at 06/30/2014, compared to Q2 2013 Q2 2014 Results 13 Group data for apps, visits and revenues, PagesJaunes data for contacts
Slide 14: Steady growth of PagesJaunes audiences
Steady growth of PagesJaunes audiences PagesJaunes audiences1 towards professionals Growth in visits (in million of visits) Q2 2014 VS Q2 2013 13 +68% SYNDICATION 55 8 +49% 37 21 9 +135% SEO & AFFILIATES 52 35 +47% 35 48 +14% DIRECT +38% 102 85 -16% T2 2013 T2 2014 ∑ = +22% 1Internal source: PagesJa
Slide 15: PagesJaunes: from deep, rich business content to transaction
PagesJaunes: from deep, rich business content to transaction PJ global reach in France 44%1 +22% of traffic towards professionals2 Booking Integration of transactional services : ● Online booking New ● Online appointments in Q2 ● Home delivery ● Request for quotes Mobile application : Home delivery
Slide 16: Mappy: Web-2-Store opportunity
Mappy: Web-2-Store opportunity Mappy global reach in France 20%1 Mappy : new version Web-2-Store, 3 services : ● Location New ● Shopping in Q2 ● Itinerary Mobile application 13M app, +32% over a year Figures at 06/30/2014 Q2 2014 Results 16 1Source: Nielsen Médiamétrie indicator – April 2014
Slide 17: Client sales Q2 highlights
Client sales Q2 highlights New organisation to better meet client needs and customise traffic growth New sales approach and customer service to increase ARPA of renewed clients New tools to increase new client acquisition Demonstrated ROI to reduce churn New business center and improved ad
Slide 18: A new organisation to better monetise traffic growth
A new organisation to better monetise traffic growth Retail Services Home B2B Public 77 M visits* 54 M visits* 23 M visits* 38 M visits* 82 M visits* 175K 90K 145K 105K 85K KPIs customers customers customers customers customers 500 300 430 340 290 sales rep sales rep sa
Slide 19: Client business center and sales advisors to demonstrate traffic growth
Client business center and sales advisors to demonstrate traffic growth ROI evidence through 3 measures Business Center: client example o Views o Clics o Contacts Performance reporting on Group (PagesJaunes, Mappy,…) and partnerships websites (Google, Bing,…) 596K1 existing and prospect clients i
Slide 20: Financial Results 2nd Quarter 2014
FINANCIAL RESULTS 2ND QUARTER 2014
Slide 21: Group revenues for the 2nd quarter: -6.3%
Group revenues for the 2nd quarter: -6.3% Revenues affected by Decrease in GOM linked the slowdown of the Internet business to the business slowndown and management of the digital transformation Revenues 272.3 M€ 255.1 M€ -6.3% GOM in €M 43.9% 39.5% in €M 300 150 -4.4 pts 5.0 4.1 250 100.8 -15.6%1 1
Slide 22: 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 23: Impact of new sales contracts
Impact1 of new sales contracts 2014 In € million Q2 H1 FY Reported GOM 96 182 330-345 In % of revenues 37,7% 38,7% Normalisation impact 5 5 25-30 Normalised GOM 101 186 355-375 In % of revenues 39,5% 39,7% 1The impact in terms of figures corresponds to an estimate based on forecast projections. Q2 2
Slide 24: Normalised GOM of €100.8 M
Normalised GOM of €100.8 M 39.5% of Group revenues Normalised gross operating margin by segment In million Euros Q2 2014 Q2 2013 Change Group normalised gross operating margin 100.8 119.5 -15.6% as % of Group revenues 39.5% 43.9% -440 bps Internet 59.8 68.6 -12.8% as % of Internet revenues 37.1% 42.
Slide 25: Normalised GOM decreased by -15.6% as of 2nd quarter
Normalised GOM decreased by -15.6% as of 2nd quarter Change in consolidated gross operating margin (GOM) in million euros 119.5 3.6 3.8 100.8 (17.3) (6.6) 96.2 (2.2) (4.6) Published GOM Revenues Paper Sales personnel Other external Other personnel Normalised 2014 Published GOM Q2 2013 Print expenses
Slide 26: Net income of €40.9 M strongly impacted by non recurring elements
Net income of €40,9 M strongly impacted by non recurring elements Net income evolution in million Euros Operational impacts = (21.9) Non recurring impacts = (21.1) 70.6 9.0 13.3 40.9 (28.7) (7.8) (2.2) (8.7) (4.6) Net income Normalised Other Financial Reorganisation Other non- Normalisation Corporat
Slide 27: Compliance with covenants as of 1st half 2014
Compliance with covenants as of 1st half 2014 Financial leverage1 35% Interest coverage2 22% 4.50x 4.30x 4.00x 4.00x 3.75x 3.97x 4.00x 3.75x 3.57x 3.65x 3.00x 3.00x 3.00x 3.00x 3.00x 3.66x 3.71x 3.63x 3.73x 2.92x 06/30/12 12/31/12 06/30/13 12/31/13 06/30/14 06/30/12 12/31/12 06/30/13 12/31/13 06/30/
Slide 28: Key terms of financial debt
Key terms of financial debt Average cost of debt of ~6.9%, i.e. cash Margin (bp) / interest charge of ~€80 M, down ~€16 M on Size (€M) Rate (%) Maturity an annualized basis Bank debt1 813.8 6.0%3 March 20182 Margin on bank debt of 400 bps 325 bps if financial leverage (L) < 3,0x Senior secured
Slide 29: Net cash flow: €65 M as of 1st half 2014
Net cash flow: €65 M as of 1st half 2014 Net cash flow as of 30 June 2014 in million Euros 95.0 3.4 33.3 (13.9) 64.9 (7.1) (45.8) Net Cash Flow GOM & Cash Corporate CAPEX Other* Net Cash Flow H1 2013 Net change in financial income income tax paid H1 2014 working capital H1 2014 195.1 (37.5) (44.8) (
Slide 30: Outlook
Sobcal GROUP : OUTLOOK
Slide 31: 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% Normalised1 gross operating margin expected between €355 millions an
Slide 32: Questions & Answers
Sobcal GROUP : QUESTIONS & ANSWERS
Slide 33: Appendices
Sobcal GROUP : APPENDICES
Slide 34: Revenues and normalised gross operating margin: 2nd quarter and 1st half 2014
Revenues and normalised gross operating margin: 2nd quarter and 1st half 2014 In million euros Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change Internet 161.3 160.7 +0.4% 315.3 316.0 -0.2% Printed directories 89.6 106.7 -16.0% 146.4 173.5 -15.6% Other businesses 4.1 5.0 -18.0% 9.1 10.7 -15.0% Revenues
Slide 35: Revenues and reported gross operating margin: 2nd quarter and 1st half 2014
Revenues and reported gross operating margin: 2nd quarter and 1st half 2014 In million euros Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change Internet 161.3 160.7 +0.4% 315.3 316.0 -0.2% Printed directories 89.6 106.7 -16.0% 146.4 173.5 -15.6% Other businesses 4.1 5.0 -18.0% 9.1 10.7 -15.0% Revenues 25
Slide 36: Income statement: 2nd quarter and 1st half 2014
Income statement: 2nd quarter and 1st half 2014 In million euros Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change Revenues 255.1 272.3 -6.3% 470.8 500.3 -5.9% Net external expenses (59.8) (56.9) -5.1% (106.5) (102.9) +3.5% Salaries and charges (99.1) (95.9) -3.3% (182.0) (182.0) na Reported gross opera
Slide 37: Effective tax rate evolution
Effective tax rate evolution Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change Statutory tax rate 34.43% 34.43% 34.43% 34.43% Additional tax1 3.57% 1.67% 190 bps 3.57% 1.67% 190 bps Partial deductibility of financial interest 5.66% 1.95% 371 bps 6.09% 0.91% 518 bps CVAE (Cotisation à la valeur ajoutée d
Slide 38: Cash flow statement: 2nd quarter and 1st half 2014
Cash flow statement: 2nd quarter and 1st half 2014 In million euros Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change Reported GOM 96.2 119.5 -19.5% 182.2 215.5 -15.5% Legal employee profit-sharing (3.4) (4.1) +17.1% (6.0) (7.0) +14.3% Non monetary items included in GOM 1.4 2.9 -51.7% 3.0 3.7 -18.9% Net
Slide 39: Balance sheet as of 30th June 2014
Balance sheet as of 30th June 2014 In million euros 30 June 2014 31 Dec 2013 30 June 2013 ASSETS Total non-current assets 227.3 214.8 210.6 Net goodwill 82.2 78.7 83.9 Other net intangible fixed assets 97.6 80.8 72.2 Net tangible fixed assets 26.2 23.6 24.1 Other non-current assets of which deferred
Slide 40: Net debt as of 30th June 2014
Net debt as of 30th June 2014 In million euros 30 June 2014 31 Dec 2013 30 June 2013 Cash and cash equivalents 54.6 75.5 107.9 Gross cash position 54.6 75.6 107.9 Bank overdrafts (1.9) (2.5) (2.0) Net cash position 52.7 73.1 105.9 Bank borrowings (813.9) (1,297.5) (1,368.2) Bond borrowings – Senior
Slide 41: Glossary
Sobcal GROUP : GLOSSARY
Slide 42: 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 expenses: Include external purchases: primarily
Slide 43: 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 44: Glossary – Audiences
Glossary – Audiences Audiences Syndicated: indirect audiences on PagesJaunes contents excluding PagesJaunes digital media (such as Bing, Yahoo!, Comprendre Choisir,...) SEO & affiliates: audiences on PagesJaunes digital media from affiliate partners (MSN, Nosibay, Free & Alice, Planet, L’interna
Slide 45: www.solocalgroup.com
So www.solocalgroup.com GROUP