Solocal Group · EURONEXT:LOCAL
Solocal — Q3 2013 Earnings Presentation
40 slides from Solocal's earnings presentation, Nov 13, 2013
Slide 1: Financial Results for the 3rd Quarter of 2013
FINANCIAL RESULTS FOR THE 3RD QUARTER OF 2013 13 NOVEMBER 2013
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: Highlights of 3rd quarter 2013
Highlights of 3rd quarter 2013 Revenues decrease at the end of September in a deteriorated environment Group revenues decrease of 5.6%1 Print revenues decrease of 15.9%1 Internet revenues growth of 2.0%1 … in an advertising market in France expected for 2013 at -2.5%2, 4% lower than in Q4 20
Slide 4: Financial Results for the 3rd Quarter of 2013
FINANCIAL RESULTS FOR THE 3RD QUARTER OF 2013
Slide 5: 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 Paper- Print-Distribution 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
Slide 6: 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 7: 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 8: 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 9: Stable underlying GOM margin
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 Underlying gross o
Slide 10: From gross operating margin to consolidated income
Increase of amortisation 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 11: 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 12: 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 13: 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 14: Outlook 2013
Outlook 2013 The Group slightly lowers its 2013 objectives: Revenues of around € 1 billion Gross operating margin of around € 420 million And confirms the priority given to deleveraging. 13 November 2013 • Q3 2013 Results 14
Slide 15: Acceleration of Digital Transformation and 2014 Outlook
ACCELERATION OF DIGITAL TRANSFORMATION AND 2014 OUTLOOK
Slide 16: A digital transformation becoming more intense in 2013 and 2014
A digital transformation becoming more intense in 2013 and 2014 2009 – 2012 2013 – 2015 Online development 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 acquisi
Slide 17: Digital 2015: invest in transformation
Digital 2015: invest in transformation Impact Investments (cumulated over 3 years) ■ Media and audiences Mobile and indirect audiences +++ €30 m PagesJaunes new search Transactional services Web-2-Store / products and deals ■ Client and monetisation Sales and marketing specialization / 5
Slide 18: Very dynamic growth of PagesJaunes audiences
Very dynamic growth of PagesJaunes audiences PAGESJAUNES AUDIENCE GROWTH IN VISITS TOWARDS PROFESSIONALS Q3 2013 VS Q3 2012 4% 10% MOBILE +170% PARTNERS 23% 30% FIXED +70% 16% 20% MOBILE +55% +2% DIRECT 57% 40% FIXED -10% ∑ = +25% Q3 ’12 Q3 ’13 Fixed = +12% Mobile = +77% Internal sources: PagesJaune
Slide 19: PagesJaunes: a powerful, engaged and mobile audience
PagesJaunes: a powerful, engaged and mobile audience PagesJaunes attractiveness Power1 Engagement2 115 M Strong mobile growth visits per month 82% Downloads: 16 millions of visits converted web and mobile into contacts iOS, Android, Windows, Tizen 43% reach 30% of audience, growth of +77%2
Slide 20: A partnerships offer unique in the market
A partnerships offer unique in the market Partnerships and offers of Solocal Group Development of Solocal indirect audience and offer of sponsored links in major search engines and social networks Bing: a strategic partnership on contents extended to Windows8 and mobile Facebook: a social loca
Slide 21: Monetization: Search, Display, Websites & Digital Marketing
Monetization: Search, Display, Websites & Digital Marketing Revenues evolution 9M 2013 versus 9M 2012 Search Performance-based offers on PagesJaunes Transactional services, deals Mappy Shopping launch Growth of Comprendre Choisir +5% ROI / Business Center: +330k customers +4% Display Mai
Slide 22: Digital 2015: invest in a new sales model
Digital 2015 : invest in a new sales model Main challenges A redesign of the business model of our transformation in 5 vertical BUs Marketing tailored to customers Retail B2B Home Service Public Marketing approach tailored to each vertical Integration of new business models Institutional organiz
Slide 23: Benefits and costs of the new sales organization
Benefits and costs of the new sales organization 2014 sales orders Internet sales (‘édition 2015’) ( in €M) Acquisition 47 50 45 ++ Sales investment around €30 millions from 2014 in order to strengthen sales teams, training, and improve customer Churn -56 -61 + service -69 Increase acquisition of
Slide 24: Digital 2015: invest in online technology
Digital 2015: invest in online technology Capex 2012 / 2013 (YTD end September) Trend Media and products : €36 M 2014/2015 • + 30M€ in 2014/2015 • Media : mobile, search, and new €29 M media • Content : websites, deals, transactional, products Infrastructure and IT : • + 30M€ in 2013/2015 = • Sa
Slide 25: Outlook 2014
Outlook 2014 2014 will be a year of deep 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% Normalized1 gross operating m
Slide 26: Questions & Answers
Sobcal GROUP : QUESTIONS & ANSWERS
Slide 27: Appendices Financial Results
APPENDICES FINANCIAL RESULTS
Slide 28: -5.6% decrease in revenues
-5.6%1 decrease in revenues Internet: 62.9% of Group revenues and growth of +2,0%1 Consolidated revenues by segment Like-for- In million Euros 9M 2013 9M 2012 Change like basis1 Group revenues 749.4 799.9 -6.3% -5.6% Internet 471.0 463.3 +1.7% -2.0% as % of Group revenues 62.9% 57.9% Printed directo
Slide 29: GOM of 328.8 million euros, 43.9% of Group revenues
GOM of 328.8 million euros, 43.9% of Group revenues Gross operating margin by segment Like-for- In million Euros 9M 2013 9M 2012 Change like basis1 Group gross operating margin 328.8 361.8 -9.1% -8.3% as % of Group revenues 43.9% 45.2% -130 bps -130 bps Internet 202.5 206.2 -1.8% -1.2% as % of Inter
Slide 30: Revenues and Gross operating margin: 3rd quarter and 9 months 2013
Revenues and Gross operating margin: 3rd quarter and 9 months 2013 In million Euros Q3 2013 Q3 2012 Change 9M 2013 9M 2012 Change Internet 154.9 154.8 +0.1% 471.0 463.3 +1.7% Printed directories 88.7 113.8 -22.1% 262.2 316.2 -17.1% Other businesses 5.5 6.3 -12.7% 16.2 20.4 -20.6% Revenues 249.1 274.
Slide 31: Income statement: 3rd quarter and 9 months 2013
Income statement: 3rd quarter and 9 months 2013 In million Euros Q3 2013 Q3 2012 Change 9M 2013 9M 2012 Change Revenues 249.1 274.9 -9.4% 749.4 799.9 -6.3% Net external expenses (52.6) (55.1) +4.5% (155.5) (164.1) +5.2% Salaries and charges (83.2) (90.2) +7.8% (265.2) (274.1) +3.2% Gross operating m
Slide 32: Cash flow statement: 3rd quarter and 9 months 2013
Cash flow statement: 3rd quarter and 9 months 2013 In million Euros Q3 2013 Q3 2012 Change 9M 2013 9M 2012 Change GOM 113.3 129.6 -12.6% 328.8 361.8 -9.1% Legal employee profit-sharing (3.5) (4.8) +27.1% (10.6) (11.6) +8.6% Non monetary items included in GOM 2.4 (3.4) na 6.1 (1.6) na Net change in w
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% 13 November 2013 • Q3 2013 Results 33
Slide 34: Balance sheet as of 30 September 2013
Balance sheet as of 30st September 2013 In million Euros 30 Sept 2013 31 Dec 2012 30 Sept 2012 ASSETS Total non-current assets 215.3 212.3 221.6 Net goodwill 83.9 82.3 93.9 Other net intangible fixed assets 76.7 69.4 70.3 Net tangible fixed assets 23.6 25.5 26.3 Other non-current assets of which def
Slide 35: Net debt as of 30 September 2013
Net debt as 30st September 2013 In million Euros 30 Sept 2013 31 Dec 2012 30 Sept 2012 Cash and cash equivalents 112.0 111.5 524.0 Gross cash position 112.0 111.5 524.0 Bank overdrafts (7.3) (19.6) (3.0) Net cash position 104.7 91.9 521.1 Bank borrowings (1,347.1) (1,368.2) (1,600.1) Bond borrowings
Slide 36: Financial structure as of 30 September 2013
Financial structure as of 30st September 2013 Marge (bps) / Size (€M) Maturity Rate (%) Tranche A1 49.6 November 2013 175 Tranche A3 954.5 September 2015 400 Tranche A5 342.8 September 2015 360 RCF 1* - November 2013 175 RCF 3* - September 2015 360 Total bank debt 1,347.0 - 382** Senior secured note
Slide 37: Glossary
Sobcal GROUP : GLOSSARY
Slide 38: 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 39: 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 40: www.solocalgroup.com
So www.solocalgroup.com GROUP