Interim Report January-September 2017

Transcription

1 European Directories Group, European Directories Midco S.à r.l. and European Directories BondCo S.C.A. Interim Report January-September 21 November

2 Interim Report January-September (Comparative numbers in brackets) Financial Summary July-September - Group revenues are MEUR 60 (MEUR 67, 11% below last year) - Revenues for key business driver, profile services and consumer services, declined 2% and 14% respectively (Q3 vs. Q3 ) - EBITDA is MEUR 15 (MEUR 14, 10% above last year) - Profit for the period after taxes is MEUR 2 (MEUR 5) - Net cash from operating activities is MEUR 7 (MEUR 6) January-September - Group revenues are MEUR 181 (MEUR 200, 9% below last year) - Revenues for key business drivers, profile services and consumer services, declined 4% and 13% respectively (Jan-Sep vs. Jan-Sep ) - EBITDA is MEUR 36 (MEUR 29, 24% above last year) - Loss for the period after taxes is MEUR -2 (MEUR -1) - Net cash from operating activities is MEUR 14 (MEUR 23) The Group continues to face a difficult trading environment, illustrated by revenue declines. Despite this, management has managed to arrest the long term decline in EBITDA through significant cost reduction programmes as part of the overall turnaround strategy for the operating businesses. Revenues continued to fall in the third quarter across most business areas. The decline in traditional revenues has continued in line with the Board of Directors expectations (volumes down 19% per annum in the year to date). The competitive nature of the digital markets remains a significant challenge and growth in this area continues to be insufficient overall to compensate for the decline in revenues from the traditional businesses. In order to counter these issues, cost saving actions continue such that profitability can be maintained broadly at the prior year level, which is also demonstrated by restructuring plan announcement at DTG in November. Net cash from operating activities for third quarter was MEUR 7 (: MEUR 6) due to MEUR 3 Finderia tax payment and working capital outflows. The digital businesses in total have continued to report negative operating cash flow after restructuring costs on an LTM basis due to MEUR 12 capital expenditure and working capital outflows mainly related to severance payments and decreased deferred revenues as the print revenue businesses contract. Accordingly, the Group remains heavily reliant on the declining consumer services business for its cash generation. Page 1

3 The overall risk profile of the Group remains as disclosed in the prior quarterly reports since the general operating environment continues to be challenging, either due to generic decline (print products and consumer services) or highly competitive markets (digital). The tax position of the Group remains unchanged. In light of the above matters and the level of operating cash flow that the Group can reasonably be expected to generate going forward, it is clear that, in the absence of alternative funding sources, repayment in full of the Group s bond would not be possible when it becomes due in December The Board of Directors is fully aware of this matter and is actively considering its strategic options, including divestments and / or alternative refinancing options, such that the issue is addressed well in advance of the bond maturity date. Events after the end of the period The Group, through its now 70% owned subsidiary, Dogado GmbH, has completed the acquisition of 100% of the share capital of Alfahosting GmbH, a similarly sized webhosting business in Germany. This transaction establishes Dogado as a leading mid-sized hosting company in Germany and greatly accelerates the Group s buy-and-build strategy in this sector. Page 2

4 Report of the Board of Directors * Revenues Group net revenue by segment, MEUR Q3 Q3 Q1-Q3 Q1-Q3 LTM Fonecta DTG Herold Other Total Group Group net revenue by product group, MEUR Q3 Q3 Q1-Q3 Q1-Q3 LTM Profile services Consumer services New media Print Other Total Group Product groups: Profile services are mainly internet yellow pages (IYP), Consumer services (only in Finland) are directory assistance and sms data information services, New media is mainly consisting of web presence and marketing services, Print is traditional printed directories and Other consists of mixed revenue streams. July-September Group revenues for the third quarter totalled MEUR 60, an 11% decline compared to the previous year due to the continued structural decline of traditional print revenues and Fonecta s consumer business. New media revenues totalling MEUR 18 declined by 10% in the third quarter due to lower marketing services revenues. Profile services revenues totalling MEUR 23 stayed at prior year level. The total share of online products in the Group s product portfolio totalled 68% (65%) in the quarter. Print revenues totalled MEUR 3 a decline of 45% compared to previous year. Print revenues represented 5% of total revenues, showing a decrease of 3 percentage points. Consumer services consisting of directory assistance and SMS data information services in Finland declined by 14% and totalled MEUR 13, representing 22% of total revenues, a decline of 1 percentage points. *) The term Board of Directors is referring to the Board of Managers in European Directories Midco S.à r.l Page 3

5 January-September Group revenues for January-September totalled MEUR 181, a MEUR 19 or 9% decline compared to previous year. New media revenues totalling MEUR 57 declined by 4% from previous year level. Profile services revenues totalling MEUR 68 decreased by MEUR 3 from previous year. The total share of online products in the Group s product portfolio totalled 69% (65%) in the year to date. Print revenues totalled MEUR 10 a decline of 43% compared to previous year. Print revenues represented 6% of total revenues, showing a decrease of 3 percentage points. Consumer services consisting of directory assistance and SMS data information services in Finland declined by 13% and totalled MEUR 39, representing 22% of total revenues. In addition to the structural decline in traditional print, the transition to online and digital services continues to be challenging in all three markets in which the Group operates due to strong competition and supplier power. Result Group EBITDA by segment, MEUR Q3 Q3 Q1-Q3 Q1-Q3 LTM Fonecta DTG Herold Other Total Group July-September Group EBITDA for the quarter amounted to MEUR 15 (MEUR 14), with EBITDA margin of 25% (20%). The Group s EBITDA margin improved due to MEUR 8 year-over-year decrease in the total operating costs and expenses. As the cost of consumables reduced due to lower print production costs, this was partially offset with higher fulfilment costs of the online products but personnel expenses decreased due to lower employee numbers. Other operating expenses have reduced mainly due to tighter cost management leading to lower third party service expenses and business support costs. The finance income of the Group decreased by MEUR 6 year-over-year. The decrease in income is attributable to gains recognized from bond purchases in the prior year. January-September Group EBITDA for the first nine months amounted to MEUR 36 (MEUR 29), with EBITDA margin of 20% (15%). The Group s total operating costs and expenses for the period decreased by MEUR 26 compared to the prior year due to continued cost saving measures. Page 4

6 Operating profit amounted to MEUR 13 (MEUR 10), representing an operating margin of 7% (5%). Balance sheet, cash flow and investment activities At the end of September, European Directories Group s consolidated assets totalled MEUR 385 (30.9.: MEUR 407). The decrease is mainly attributable to the reduced level of cash due to repurchase of bonds (with corresponding decrease in liabilities) and to amortisation and impairment of the other intangible assets. Group cash flow, MEUR Q3 Q3 Q1-Q3 Q1-Q3 LTM Ebitda Gains and losses from sales of fixed assets and other non-cash adjustments Net change in working capital Net cash from operating activities before financial items and taxes paid Financial items paid, net Taxes paid Net cash from operating activities Net cash used in investing activities Net cash used in financing activities Net increase/decrease in cash In January-September, despite improved EBITDA, the Group s net cash from operating activities before financial items and taxes paid decreased to MEUR 28 (MEUR 31) due to higher working capital outflows reflecting severance pay-outs accrued in and decreasing deferred revenue in line with the reduction in print business. Net cash from operating activities decreased to MEUR 14 (MEUR 23) due in part to MEUR 8 Finderia tax and interest payments. Net cash used in investing activities was MEUR -10 (MEUR -14), representing financial investments, acquisitions and capital expenditure on customer products and services. The financing activities cash flow is favourably impacted by the loan funding received, offset by the repurchase of bonds. The cash balance of the Group at the end of September was MEUR 35 (30.9.: MEUR 40). Investments in tangible and intangible assets In January-September, investments in tangible and intangible assets amounted to MEUR 10 (MEUR 14) mainly related to capital expenditure incurred in growing the online business offering and customer service capabilities. Acquisitions In March, the Group (through its group company Dogado GmbH) acquired the business of Hosting-Agency, a German domain and webhosting business for MEUR 0.6. Similarly, Dogado made two further German domain and webhosting business acquisitions in July and September for a Page 5

7 combined value of MEUR 0.8. The fair values of the acquired net assets have been determined on a provisional basis, pending completion of the final valuation. Divestments In February, the Group disposed of its 24.9 % shareholding in Binder Trittenwein GmbH for a nominal amount, resulting in minor loss to the Group. Interest-bearing net debt Net interest-bearing debt at 30 September was MEUR 58, excluding subordinated shareholder loans (compared to MEUR 71 at the end of September ). The amortised cost of the bond as of 30 September was MEUR 79. Personnel At the end of September, the number of Group employees (FTE) was 1,344, a decrease of 255 (FTE) compared to end of September. Composition of the Board of Directors The board of European Directories Midco S.à r.l. consists of the following members: Marcus Englert (Chairman), Hannu Syrjänen, Björn Osterloff, Peder Prahl, Marco Sodi, Fabrice Rota and Sébastien Rimlinger. The board of the general partner of European Directories BondCo S.C.A., European Directories GP S.à r.l. consists of John D. Sutherland, Manager A, Fabrice Rota, Manager B and Sébastien Rimlinger, Manager B. Page 6

8 For further information, please contact: Group CFO Neil Robson European Directories Group s interim report for the year will be published by 28 February European Directories Group will publish three further interim reports in 2018: - January-March by 31 May January-June by 31 August January-September by 30 November 2018 Interim reports will be released on the European Directories Group web site: About European Directories Group European Directories Group is an online partner for SMEs offering local search and lead generation with a scalable business model. The Group operates through three main brands: Fonecta in Finland, Herold in Austria and DTG in the Netherlands. The Parent company of the Group is European Directories Midco S.à r.l. in Luxembourg. European Directories BondCo S.C.A., a subsidiary of European Directories Midco S.à r.l., issued senior secured callable floating rate bonds in the amount of MEUR 160 in December 2013 which were listed in December 2014 at Nasdaq Stockholm. CONTACT INFORMATION Headquarters of European Directories Group: Herikerbergweg 88 Postbus LL Amsterdam The Netherlands European Directories BondCo S.C.A.: 46A, Avenue J.F. Kennedy L-1855 Luxembourg The Grand Duchy of Luxembourg Page 7

9 European Directories Group January-September Interim Financial Statements are unaudited Condensed consolidated income statement 1000 EUR Note Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Revenues 3 60,099 67, , , , ,798 Other income ,039 1, Cost of consumables -12,995-14,867-39,636-45,811-58,981-52,806 Personnel expenses -24,111-27,914-77,405-91, , ,761 Other operating expenses -8,337-11,072-28,676-33,899-44,912-39,689 EBITDA *) 3 14,884 13,547 36,226 29,322 47,350 54,254 Gain/(loss) from sale of subsidiaries Depreciation, amortisation and impairment charges -5,009-6,749-23,107-19,549-26,091-29,649 Operating profit/(loss) 9,875 6,798 13,119 9,703 21,180 24,596 Finance income 112 5,911 6,467 12,382 17,984 12,069 Finance expense -7,597-7,590-22,558-23,376-31,377-30,559 Finance costs - net -7,485-1,679-16,091-10,994-13,393-18,490 Profit/(loss) before income tax 2,390 5,119-2,972-1,291 7,787 6,106 Income taxes** ,306 13,375 Profit/(loss) for the period 2,499 5,136-2, ,093 19,481 Attributable to: Owners of the parent 2,592 5,244-2, ,420 19,742 Non-controlling interests ,499 5,136-2, ,093 19,481 *) EBITDA is defined as operating profit/(loss) before depreciation, amortisation and impairment charges and gain/(loss) from sale of subsidiaries. **) Income tax benefit mainly related to change in deferred taxes in traditional business areas 8

10 European Directories Group January-September Interim Financial Statements are unaudited Condensed consolidated statement of comprehensive income 1000 EUR Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Profit/(loss) for the period 2,499 5,136-2, ,093 19,482 Other comprehensive income Items that may be reclassified to profit or loss in subsequent periods Exchange differences on translating foreign operations Items that will not be reclassified to profit or loss in subsequent periods Remeasurements of defined benefit liability ,639 7,637 Related tax ,669 7,667 Other comprehensive income for the period, net of tax ,942 7,707 Total comprehensive income for the year 2,485 5,187-2, ,035 27,188 Total comprehensive income attributable to Owners of the parent 2,578 5,295-2, ,362 27,448 Non-controlling interests Total comprehensive income for the year 2,485 5,187-2, ,035 27,187 9

11 European Directories Group January-September Interim Financial Statements are unaudited Condensed consolidated balance sheet 1000 EUR Note Sep 30 Sep 30 Dec 31 ASSETS Non-current assets Goodwill 6 208, , ,040 Other intangible assets 5, 6 76,519 87,006 84,647 Property, plant and equipment 5, 7 7,087 5,643 6,547 Investments in associates Available-for-sale financial assets 4 3,229 1,471 1,471 Other financial assets Loan receivables from related parties 4 2,019 1,877 1,877 Deferred tax assets 2,216 2,761 2,215 Total non-current assets 299, , ,279 Current assets Inventories Trade and other receivables 4 50,101 50,775 53,597 Cash and cash equivalents 4, 8 34,833 40,472 30,800 Total current assets 85,458 91,541 84,919 Total assets 385, , ,198 EQUITY Equity attributable to owners of the parent Share capital Share premium 16,449 16,449 16,449 Other reserves Retained earnings -36,679-63,914-34,196 Total -20,120-47,355-17,637 Non-controlling interests 982 1,141 1,073 Total equity -19,138-46,214-16,564 LIABILITIES Non-current liabilities Bond 4, 9 79, ,208 99,016 Shareholder loan and accrued interest 4, 9 170, , ,110 Other non-current financial liabilities 4, 9-8,861 7,681 Deferred tax liabilities 32,379 47,154 33,024 Provisions 10 2,024 3,386 3,078 Pension obligations 6,577 13,982 6,525 Total non-current liabilities 290, , ,434 Current liabilities Current financial liabilities 4, 9 22, Trade payables 4 7,679 13,123 9,502 Deferred revenues 40,004 52,146 44,607 Current tax liability - - 6,489 Provisions 10 10,853 20,947 11,255 Other current liabilities 4 32,834 32,951 39,475 Total current liabilities 113, , ,328 Total liabilities 404, , ,762 Total equity and liabilities 385, , ,198 10

12 European Directories Group January-September Interim Financial Statements are unaudited Condensed consolidated statement of changes in total equity 1000 EUR Share capital Share premium Other reserves Retained earnings Owners of the parent Noncontrolling interests Total equity Total equity 31 December , ,196-17,637 1,073-16,564 Result for period ,260-2, ,453 Other comprehensive income Total comprehensive income for the period ,269-2, ,462 Acquisition of non-controlling interest *) Capital injection to subsidiary with a noncontrolling interest **) Total changes in ownership interests Dividends to non-controlling interests Total equity 30 September , ,679-20, , Total equity 31 December , ,026-46,467 1,003-45,464 Result for the period Other comprehensive income Total comprehensive income for the period Acquisition of non-controlling interest *) Capital injection to subsidiary with a noncontrolling interest **) Total changes in ownership interests Dividens to non-controlling interests Total equity 30 September , ,914-47,354 1,141-46,214 *) During, the Group acquired an additional 2,5 % interest in Dogado GmbH increasing its ownership from 66 % to 68,5 % in accordance with the Organisation Agreement entered into on the acquisition of the original 51% shareholding. The non-controlling interest's share decreased from 34 % to 31,5 %. The acquisition was made by the issuance of new shares (TEUR 800) by Dogado. The Group recognised a decrease in non-controlling interest of TEUR 38 from the acquisition and an increase in non-controlling interest of TEUR 252 from the capital injection. **) In March, the Group acquired an additional 10 % interest in Dogado GmbH increasing its ownership from 51 % to 61 % in accordance with the Organisation Agreement entered into on the acquisition of the original 51% shareholding. The non-controlling interest's share decreased from 49 % to 39 %. The acquisition was made by the issuance of new shares (TEUR 1,000) by Dogado. The Group recognised a decrease in non-controlling interest of TEUR 122 from the acquisition and an increase in non-controlling interest of TEUR 389 from the capital injection. 11

13 European Directories Group January-September Interim Financial Statements are unaudited Condensed consolidated cash flow statement 1000 EUR Cash flow from operating activities Profit/(loss) for the period Adjustments for: Income tax expenses Finance costs - net Depreciation, amortisation and impairment charges Gain/(loss) from sale of subsidiaries Operating profit before depreciations Interest received Interest paid Other financial items and realised foreign exchange gains Taxes paid Operating cash flow before movements in working capital Net change in working capital Net cash from operating activities Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months 2,499 5,136-2, ,093 19, ,306-13,375 7,485 1,679 16,091 10,994 13,393 18,490 5,009 6,749 23,107 19,549 26,091 29, ,884 13,547 36,226 29,322 47,349 54, ,495-2,509-6,373-7,663-9,170-7, , , ,067 9,899 11,042 22,753 21,654 38,276 39,375-3,047-4,637-8,369 1,246-11,319-20,934 6,852 6,405 14,384 22,900 26,957 18,441 Cash flow from investing activities Acquisitions of subsidiaries and businesses, net of cash acquired ,721-4,750-4,746-1,717 Purchases of available-for-sale investments , ,758 Purchases of intangible assets and property, plant and equipment Sales of subsidiaries and businesses, net of cash Proceeds from sales of intangible assets and property, plant and equipment Proceeds from other interest-bearing receivables Net cash used in investing activities -2,084-3,163-6,621-8,720-13,805-11, ,734-3,485-10,164-13,505-18,617-15,276 Cash flow before financing activities 4,118 2,920 4,220 9,395 8,340 3,165 Cash flow from financing activities Payments of long-term liabilities Proceeds from short-term liabilities Dividends paid to non-controlling interests Loans granted to related parties Net cash used in financing activities 66-8,445-13,916-14,879-23,491-22, , , , ,627-24,245-8,805 Net increase (+) / decrease (-) in cash and cash equivalents Cash and cash equivalents at the beginning of period Foreign exchange differences in cash and cash equivalents Cash and cash equivalents at the end of period 4,145-5,840 4,033-6,232-15,905-5,640 30,688 46,313 30,800 46,705 46,705 40, ,833 40,472 34,833 40,472 30,800 34,833 12

14 European Directories Group January-September Interim Financial Statements are unaudited Notes to the condensed consolidated interim financial statements 1. Basis of preparation These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the EU. The accounting policies adopted are consistent with those of the previous financial year. In addition, the Group has adopted those new and amended IFRS standards effective for the financial year ending 31 December, which have been presented in the condensed consolidated financial statements for the year ended 31 December. Those new and amended IFRS standards have not had any material impact to the interim financial statements. The interim financial statements are unaudited. In accordance with the new guidelines on Alternative Performance Measures (APMs) issued by the European Securities and Markets Authority (ESMA) the Group has reviewed the terminology and measures used in its financial reporting. The Group no longer uses alternative performance measures referred in the Guidelines to describe its operational and financial performance. Therefore, the Group no longer presents LFL information for "Group net revenue by segment, MEUR" and "Group ebitda by segment, MEUR". Also "Net debt to EBITDA" measure is no longer presented. All figures in the consolidated interim financial statements have been rounded and consequently the sum of individual figures may deviate from the sum presented. 2. Critical accounting estimates and judgements The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December. 3. Segment information The Board of Directors is the Group's chief operating decision maker. Management has determined the operating segments based on the information reviewed by the Board of Directors for the purposes of allocating resources and assessing performance. The Board of Directors considers the business from a geographic perspective in Finland (Fonecta), Austria (Herold) and the Netherlands (DTG). Fonecta reporting segment consists of profile services, consumer services, print, new media and other online product lines in Finland. DTG reporting segment consists of profile services, consumer services, print, new media and other online product lines in the Netherlands. Herold reporting segment consists of profile services, consumer services, print, new media and other online product lines in Austria and Germany. "Other" is not a reporting segment, but consists of corporate headquarter costs and corporate financing and other group eliminations. As of 1 April, the Group has changed its reporting structure. An Austrian holding company in Herold was merged with a Dutch holding company in Other segment. The comparable segment information has not been restated due to the immaterial impact of the change to income statement items. The impact to balance sheet comes mainly from non-operational items, which include tax related items and intragroup financing between Herold and the holding companies. 13

15 European Directories Group January-September Interim Financial Statements are unaudited Revenues by segment 1000 EUR Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Fonecta 28,052 33,132 86,581 98, , ,114 DTG 14,696 15,604 44,457 49,039 66,140 61,558 Herold 17,351 18,504 50,212 52,101 78,015 76,126 Group total 60,099 67, , , , ,798 EBITDA by segment 1000 EUR Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Fonecta 11,124 12,216 30,576 24,254 32,520 38,842 DTG 2,392 1,211 5,520 6,516 9,498 8,502 Herold 3,148 1,724 3,859 2,750 10,001 11,110 Other -1,780-1,604-3,728-4,198-4,671-4,201 Group total 14,884 13,547 36,226 29,322 47,350 54,254 EBITDA is calculated by adding back depreciation, amortisation and impairment charges and gain/(loss) from sale of subsidiaries to operating profit/loss. Capital expenditure by segment 1000 EUR Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Fonecta ,608 2,656 1,934 DTG 915 1,818 4,245 4,365 6,284 6,164 Herold ,490 2,747 4,861 3,604 Other Group total 2,084 3,163 6,621 8,720 13,805 11,706 Assets by segment 1000 EUR Sep 30 Sep 30 Dec 31 Fonecta 252, , ,655 DTG 78,400 90,243 86,083 Herold 73,968 81,380 82,102 Other -19,571-33,947-33,642 Total assets in the balance sheet 385, , ,198 Liabilities by segment 1000 EUR Sep 30 Sep 30 Dec 31 Fonecta 104, , ,012 DTG 284, , ,243 Herold 40,633 39,464 41,308 Other -25,043-22,764-46,801 Total liabilities in the balance sheet 404, , ,762 14

16 European Directories Group January-September Interim Financial Statements are unaudited 4. Financial risk management The Group has not made any significant changes in policies regarding risk management during the period. Aspects of the Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the year ended 31 December. The Group has no financial instruments measured at fair value. Available-for-sale financial assets consist of quoted and unquoted shares, which are measured in the Group either at acquisition price in the absence of a reliable fair value. Classification of financial instruments 30 Sep 1000 EUR Available for sale financial assets Loans and receivables Measured at amortised cost Total Assets as per balance sheet Trade and other receivables - 50,101-50,101 Cash and cash equivalents - 34,833-34,833 Available-for-sale financial assets 3, ,229 Loan receivables from related parties - 2,019-2,019 Book value total 3,229 86,953-90,182 Liabilities as per balance sheet Bond ,183 79,183 Shareholder loan , ,827 Current financial liabilities 22,130 22,130 Trade payables - 7,679-7,679 Other current liabilities - 32,834-32,834 Book value total - 40, , , Dec 1000 EUR Available for sale financial assets Loans and receivables Measured at amortised cost Total Assets as per balance sheet Trade and other receivables - 53,597-53,597 Cash and cash equivalents - 30,800-30,800 Available-for-sale financial assets 1, ,471 Other financial assets Loan receivables from related parties - 1,877-1,877 Book value total 1,471 86,353-87,824 Liabilities as per balance sheet Bond ,016 99,016 Shareholder loan , ,110 Other non-current financial liabilities - - 7,681 7,681 Trade payables - 9,502-9,502 Other current liabilities - 39,475-39,475 Book value total - 48, , ,784 15

17 European Directories Group January-September Interim Financial Statements are unaudited 5. Acquisitions and disposals Acquisitions in On 10 March, the Group (through its group company Dogado GmbH) acquired the business of Hosting-Agency, a German domain and webhosting business for TEUR 643. The fair values of the acquired net assets have been determined on a provisional basis, pending completion of the final valuation. On 7 July, the Group (through its group company Dogado GmbH) acquired the business of PCCNET a German domain and webhosting business for TEUR 220. The fair values of the acquired net assets have been determined on a provisional basis, pending completion of the final valuation. On 21 September, the Group (through its group company Dogado GmbH) acquired the business of Speicherhosting, a German domain and webhosting business for TEUR 600. The fair values of the acquired net assets have been determined on a provisional basis, pending completion of the final valuation. The following table summarises the consideration paid and the amounts of the assets acquired and liabilities assumed recognised at the acquisition date. Consideration transferred 1000 EUR Cash Total consideration transferred Deferred consideration Net cash outflow from acquisition 1,463 1, ,148 Recognised amounts of identifiable assets acquired and liabilities assumed Fair value recognised on acquisition 1000 EUR Intangible assets Property, plant and equipment Trade and other receivables Total net assets acquired Consideration price, satisfied in cash 1, ,463 1,463 In addition to the acquisitions made, deferred consideration of TEUR 591 was paid relating to acquisitions made in previous years. 16

18 European Directories Group January-September Interim Financial Statements are unaudited Acquisitions in On 22 January, DTG Holding B.V. ( DTG ), a European Directories Group company, acquired 100% of the shares in DR3 B.V. ( DR3DATA ). DR3DATA is a Dutch company holding an extensive business-to-business marketing database with annual turnover of c MEUR 1.5. The final acquisition price was TEUR 800 and was paid by way of a capital contribution to DR3DATA. The acquisition of DR3DATA will reinforce DTG s position as the online marketing services company for the Dutch SME sector. On 14 January, the Group (through its group company Dogado GmbH) acquired 100 % of the shares and votes in Media Webline AG. Media Webline AG is a German company, which provides domain, webhosting and managed hosting services. The acquisition of Media Webline AG provides the Group with increased customer base. The acquisition price was TEUR 1,884. The acquired intangible and tangible assets resulted in a goodwill of TEUR 891 which is mainly attributable to the synergies expected to be received from integrating the company into the Group's existing hosting business. On 24 June, the Group (through its group company Dogado GmbH) acquired 100 % of the shares and votes in Busymouse Business Systems GmbH. Busymouse Business Systems GmbH is a German company providing hosted exchange and cloud services through more than 700 IT channel partners to German SME customers. The acquisition price was TEUR 2,018, creating a goodwill of TEUR 1,274 which is mainly attributable to the synergies expected to be received from integrating the company into the Group's existing hosting business. On June 1, the Group (through its group company Dogado GmbH) acquired Canhost business. Canhost is a German domain and webhosting business. The acquisition price was TEUR 358. Disposals during On 28 February, the Group disposed of its 24.9 % shareholding in Binder Trittenwein GmbH for a MEUR 0.1. The sale resulted in small loss to the Group. Disposals during On 12 April, the Group disposed of its % shareholding in Tupalo Internetservices GmbH for a nominal amount. The sale resulted in a minor loss to the Group. 17

19 European Directories Group January-September Interim Financial Statements are unaudited 6. Changes in intangible assets 1000 EUR Sep 30 Sep 30 Dec 31 Opening balance 300, , ,429 Acquisitions 1,390 6,281 6,509 Capital expenditures 4,393 7,194 10,711 Disposals Amortisation -13,911-17,842-23,715 Impairments -7, Other Closing balance 285, , ,687 Goodwill included in closing balance 208, , ,040 Impairment tests of goodwill In light of the challenges facing the operating businesses, the Board of Directors concluded that the conditions existed for undertaking impairment testing at the half year. The resultant calculations implied impairment to the goodwill of DTG due to an increase, compared with the prior year end, in the discount rate used. This reflects the additional risks which the Board considers to apply to this business unit. No impairment was implied for the other business units. The DTG impairment loss of MEUR 7.5 was allocated fully to goodwill. The recoverable amount of all cash-generating units have been determined based on value-in-use calculations. The cash-generating units equal the reporting segments. These calculations use pre-tax cash flow projections based on financial plans approved by management covering a three-year period. Value in use was determined by discounting the future cash flows expected to be generated from the continuing use of the units. Value in use at 30 September was determined similarly to the 31 December goodwill impairment test. The discount rates (pre-tax) used in the valuation were Fonecta 11.4% (12.8% Dec 31 ), DTG 13.5% (12.0%) and Herold 11.8% (13.2%). Reconciliation of carrying amount of goodwill 1000 EUR Sep 30 Sep 30 Dec 31 Cost Balance at the beginning of period 456, , ,179 Acquisition through business combination - 2,224 2,224 Balance at end of period 456, , ,403 Impairment losses Balance at the beginning of period -240, , ,363 Impairment loss -7, Balance at end of period -247, , ,363 Carrying amounts Balance at the beginning of period 216, , ,816 Balance at end of period 208, , , Changes in property, plant and equipment 1000 EUR Sep 30 Sep 30 Dec 31 Opening balance 6,547 5,486 5,486 Acquisitions Capital expenditures 2,181 1,809 3,339 Disposals Depreciation, amortisation and impairment -1,700-1,712-2,376 Closing balance 7,087 5,643 6,547 18

20 European Directories Group January-September Interim Financial Statements are unaudited 8. Cash and cash equivalents 1000 EUR Sep 30 Sep 30 Dec 31 Cash at bank and in hand 34,370 40,009 30,337 Short-term bank deposits Cash and cash equivalents 34,833 40,472 30, Financial liabilities 1000 EUR Bonds Shareholder loan and accrued interest (PECs) Other non-current financial liabilities Carrying amount Sep 30 Carrying amount Sep 30 Carrying amount Dec 31 79, ,208 99, , , ,110-8,861 7,681 Total Non-current financial liabilities 250, , ,807 Bank loan 13, Other current financial liabilities 8, Total Current financial liabilities 22, Total financial liabilities 272, , ,807 On 10 December 2013 a direct subsidiary of European Directories Midco S.à r.l., European Directories BondCo S.C.A. issued senior secured callable floating rate bonds in the amount of TEUR 160,000 to the market. The proceeds of the bonds were used to repay all bank debt. The interest rate for the bonds is charged at 3 months EURIBOR rate plus a 7% margin. Interest is payable quarterly in arrears. The bonds have a maturity date of 10 December 2018 and rank above the preferred equity certificates. European Directories Midco S.à r.l. has issued a guarantee for the obligations of European Directories BondCo S.C.A. under the bonds. The bonds were listed on Nasdaq Stockholm in December In January-September, European Directories (DH7) B.V. (a group holding company) purchased TEUR 17,928 nominal value of the bonds for a consideration of TEUR 13,916. The gain and amortized cost was booked to other financial income. The amortisation of the bond transaction costs during January-September was TEUR 264. The amortised cost of the bond as of 30 September was TEUR 79,183 and nominal value TEUR 79,580. On 10 December 2013 European Directories Midco S.à r.l. issued 103,313,950 preferred equity certificates ( PECs ) with nominal value of Euro 1.00 each. Leafy S.à r.l., the parent company of European Directories Midco S.à r.l. has subscribed all issued PECs. The maturity date of the PECs is 10 December The PECs are unsecured and subordinated to all other obligations of the Company and no cash interest will be paid whilst the senior secured callable floating rate bonds issued by European Directories BondCo S.C.A. are outstanding. Each initial PEC carries the right to receive a fixed yield of 7.24% p.a. and a yearly compounding profit yield of 12.50% p.a (). The principal as well as accrued interest is payable on the PECs at their maturity or if the PECs would be redeemed by the Company at an earlier date. Such optional redemption is possible only to the extent that i) the Company will have sufficient funds available to settle its liabilities to all other creditors as a result of the redemption payment, and ii) the Company is not insolvent and will not become insolvent after making the redemption payment. Whilst the PECs mature in 2043, it would the Board's intention to prepay this loan as early as possible after maturing of the bond, potentially in The accrued interest on the PECs as of 30 September was TEUR 67,513 (30.9.: TEUR 45,938). The Group has recognised a financial liability for a put option relating to the acquisition of non-controlling interest in Dogado GmbH. The put option entitles the non-controlling interest of Dogado GmbH to sell their shares to the Group during The financial liability with nominal value of TEUR 10,000 was discounted and recorded at its net present value of TEUR 8,188 as of 31 March In December, the Group revalued the put option to a net present value of TEUR 7,676. The unwind of the discount for January-September was TEUR 583 and was included in other financial expenses. The carrying amount of the liability was TEUR 8,259 as of 30 September and was included in other current financial liabilities. On 20 March, the Group utilised the Permitted Basket under the bond terms to raise bank funding of MEUR 12.5 for general corporate purposes. The borrowing facility has been arranged by group holding company European Directories (DH7) B.V. and is repayable within 12 months. 19

21 European Directories Group January-September Interim Financial Statements are unaudited 10. Provisions 1000 EUR Sep 30 Tax provisions Sep 30 Dec 31 Sep 30 Other provisions Sep 30 Dec 31 Opening balance 9,447 18,022 18,022 4,886 5,504 5,504 Increase in the provisions ,235 3,453 Provisions used ,456-1,678-2,310 Unused provisions reversed Other *) , ,240 Closing balance 9,447 18,022 9,447 3,430 6,311 4,886 Of which non-current ,024 3,386 3,078 Of which current 9,447 18,022 9,447 1,406 2,925 1,808 Total 9,447 18,022 9,447 3,430 6,311 4,886 *) The Group reclassified the Finderia tax provision to current tax liabilites and other current liabilities in. Uncertain tax positions/tax provisions The Group is involved in various discussions with local tax authorities. Austria In a recent Austrian tax audit (years ), the tax authority denied Herold tax deduction for goodwill amortization relating to a previous acquisition. The tax authority considers the transaction a related party transaction (thereby disqualifying goodwill amortisation from 2005 and interest deduction as of 2011). In addition, the tax authority questions the arm s length nature of certain intercompany interest expenses. The financial impact for all years up to 31 December is estimated to be maximum MEUR 10 (including interest and penalties). Herold has appealed the decision to the local court but provided for the majority of the amount claimed. In the event that a final ruling would be issued consistent with the tax authority s view, this could potentially further increase tax costs (depending on the future Group s financing structure) by MEUR 2 to MEUR 4 annually (depending if goodwill amortization deduction or full interest deduction is disallowed). In ongoing tax audits, the tax inspector has queried the company's calculations in relation to advertising tax. Herold has allocated revenue for certain bundled products between print and online revenue from 2010 onwards. The print revenue is subject to advertising tax, whereas the online revenue is not taxed under the current tax law. The allocation of revenue between print and online has been made based on an external study of consumer behaviour by a market research company. The tax inspector is challenging the allocation and is claiming that the online share of revenue should be subject to advertising tax. This claim represents a MEUR 2 potential advertising tax exposure for The same allocation methodology has been applied for years This could further increase tax exposures by MEUR 2. Management strongly believes that the allocation of revenue has been applied correctly and the claims by the tax inspector are unjustified. Finland The Supreme Administrative Court ( SAC ) issued its decision in the tax dispute against Finderia on 13 December. In its decision, the SAC granted a leave of appeal to Finderia and examined the case. The SAC changed the decision made by the Helsinki Administrative Court (which led to a tax risk of up to MEUR 39 including interest) and determined that the fair value of the contracts in connection with the liquidation of Finderia is MEUR 25. This decision will lead to a further tax and interest payment of MEUR 10. The Finnish tax office decided in October that it does not accept the tax deductibility of intragroup loan interest costs for two Finnish holding companies. According to the decision, the EDSA Group companies are not allowed to deduct MEUR 16 interest for tax year Loss carry-forwards from previous tax years are sufficient to cover the related increase in taxable income, such that the 2015 decision does not trigger immediate cash tax for the companies. However, if the tax office's decision is upheld and applied for all of years from 2014 onwards, tax losses carried forward of MEUR 48 could be absorbed and therefore no longer available to offset current and future taxable profits. The companies find the decision unfounded and will appeal the decisions to the Tax Administration s board of appeal. Tax provisions In the condensed consolidated interim financial statements of the Group, of MEUR 15 provision initially recognised for the Finnish tax cases, MEUR 6.4 was used in 2015 and the remaining amount of MEUR 8.6 was identified for the Finderia tax case. Since the Finderia tax and interest payment will be made during, MEUR 6.2 was reclassified to current tax liabilities and MEUR 2.4 to current liabilities of which MEUR 7.8 bas been paid during January-September. The remaining provision for the Austrian tax cases amounts to MEUR

22 European Directories Group January-September Interim Financial Statements are unaudited 11. Operating lease commitments 1000 EUR Sep 30 Sep 30 Dec 31 Due within a year 6,153 6,436 7,415 Due after one year and within five years 12,890 14,654 14,413 Due after five years 6,247 9,180 7,397 Total 25,289 30,270 29, Contingent liabilities Guarantees European Directories Midco S.à r.l is a guarantor for the obligations of European Directories BondCo S.C.A. under the bond (see note 9). No other Group companies are guarantors. European Directories Midco S.à r.l. and European Directories BondCo S.C.A. have provided security for certain assets (shares in certain Group companies, loan receivables and bank accounts) to secure the obligations of European Directories BondCo S.C.A. under the finance documents. 13. Legal actions and official proceedings Group companies All on-going legal actions and official proceedings are related to open tax cases. See note 10 for details on page Related party transactions Related party of the Group includes its subsidiaries, key management personnel and associated companies. Related party transactions include such operations that are not eliminated in the Group's consolidated financial statements. Parent and Ultimate controlling party Leafy S.à r.l., a company incorporated in Luxembourg is the immediate and ultimate parent company of the Company. Key management personnel The Board of Managers (also referred to as the Board of Directors) of European Directories Midco S.à r.l., and the European Directories Group CFO and CEOs in the operating companies (Fonecta, DTG, Herold) are considered as key personnel who have authority and responsibility for planning, directing and controlling the activities of the European Directories Group. Key management personnel remuneration The Key management personnel received the following benefits: 1000 EUR Q3 Q3 Q1-Q3 Q1-Q3 Short-term employee benefits *) ,891 1,957 2,992 Post-employment benefits Other long-term benefits Total ,017 2,029 3,091 *) Includes amounts paid as remuneration to individuals or as reimbursement for services paid to entities providing the service. The above represents the expense arising in the relevant period. As at 30 September and 30 September, management had no personal shareholdings in the Group. Management has not been granted any loans. 21

23 European Directories Group January-September Interim Financial Statements are unaudited Transactions with related parties 1000 EUR Sep 30 Sep 30 Dec 31 Interest on loan receivables 4-2 Long-term interest-bearing loan receivables 2,019 1,877 1,877 Shareholder loan and acrrued interest 170, , ,110 On 10 December 2013 European Directories Midco S.à r.l. issued 103,313,950 preferred equity certificates ( PECs ) with nominal value of 1 Euro each. Leafy S.à r.l., the parent company of European Directories Midco S.à r.l. has subscribed all issued PECs. The PECs have a maturity date of 10 December The PECs are unsecured and subordinated to all other obligations of the Company and no cash interest will be paid whilst the bond is outstanding. Whilst the PECs mature in 2043, it would the Board's intention to prepay this loan as early as possible after maturing of the bond, potentially in Long-term interest-bearing loan receivables and interest on loan receivables include a receivable from Leafy S.à r.l. All transactions with related parties are with arm s length, and are with similar terms than transactions carried out with independent parties. 15. Events after the reporting period The Group, through its now 70% owned subsidiary, Dogado GmbH, has completed the acquisition of 100% of the share capital of Alfahosting GmbH, a similarly sized webhosting business in Germany. This transaction establishes Dogado as a leading mid-sized hosting company in Germany and greatly accelerates the Group s buy-and-build strategy in this sector. 22

24 European Directories Midco S.à r. l. Interim financial statements for the period of 1 January to 30 September 2015 European Directories Midco S.à r.l. Interim financial statements January-September R.C.S Luxembourg B A avenue J.F. Kennedy L-1855 Luxembourg Subscribed capital: EUR 100,000

25 European Directories Midco S.à r.l. Interim financial statements for the period of 1 January to 30 September Table of contents Interim statement of profit and loss and other comprehensive income 2 Interim balance sheet 3 Interim statement of cash flows 4 Interim statement of changes in equity 5 Notes to the interim financial statements 6-13

26 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Interim financial statements are unaudited Interim statement of profit and loss and other comprehensive income 1000 EUR Note Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Board fees Other expenses Operating loss Finance income 8 2,512 2,446 7,455 7,103 9,456 9,808 Finance costs 10-5,634-4,858-16,718-14,508-19,366-21,576 Net finance costs -3,121-2,412-9,262-7,405-9,910-11,767 Loss before income tax -3,177-2,641-9,595-8,034-10,603-12,163 Income tax Loss for the period -3,177-2,641-9,600-8,034-10,606-12,171 Total comprehensive income -3,177-2,641-9,600-8,034-10,606-12,171 The notes on page 6 to 13 form an integral part of these interim financial statements 2

27 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Interim financial statements are unaudited Interim balance sheet 1000 EUR Note(s) Sep 30 Sep 30 Dec 31 ASSETS Non-current assets Investments in subsidiaries 7 2,043 2,043 2,043 Loan receivables 8 128, , ,312 Total non-current assets 131, , ,355 Current assets Accrued interest and other receivables 8 8,518 7,930 10,134 Cash and cash equivalents Total current assets 8,614 8,024 10,173 Total assets 139, , ,528 EQUITY Equity attributable to owners of the parent Share capital Share premium 16,449 16,449 16,449 Other reserves Retained earnings -61,169-48,998-51,569 Total equity 9-44,610-32,439-35,010 LIABILITIES Non-current liabilities Shareholder loan and accrued interests 10 (a) 170, , ,110 Total non-current liabilities 170, , ,110 Current liabilities Accrued interest 10 (a) Trade and other payables 10 (b) 13,334 13,485 13,347 Total current liabilities 13,415 13,566 13,428 Total liabilities 184, , ,538 Total equity and liabilities 139, , ,528 The notes on page 6 to 13 form an integral part of these interim financial statements 3

28 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Interim financial statements are unaudited Interim statement of cash flows 1000 EUR Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Cash flows from operating activities Loss for the period -3,177-2,641-9,600-8,034-10,606-12,172 Adjustments for: Income tax expenses Finance costs - net 3,121 2,412 9,262 7,405 9,910 11,767 Operating loss Interest received Realised foreign exchange gains and losses and other finance items Taxes paid Operating cash flow before movements in working capital Net change in working capital Net cash from operating activities Cash flows before financing activities Cash flows from financing activities Proceeds from current liabilities Loans granted to related parties Net cash from financing activities Net increase (+) / decrease (-) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at the end of period The notes on page 6 to 13 form an integral part of these interim financial statements 4

29 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Interim financial statements are unaudited Interim statement of changes in equity Equity attributable to owners of the parent Q EUR Share capital Share premium Other reserves Retained earnings Total equity Balance at 31 December , ,569-35,010 Total comprehensive income for the period Q ,600-9,600 Balance at 30 September , ,169-44,610 Equity attributable to owners of the parent Q EUR Share capital Share premium Other reserves Retained earnings Total equity Balance at 31 December , ,963-24,404 Total comprehensive income for the period Q ,035-8,035 Balance at 30 September , ,998-32,439 The notes on page 6 to 13 form an integral part of these interim financial statements 5

30 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Notes to Interim Financial Statements for the period ended 30 September Note 1 Basis of preparation The interim financial statements for the three months ended 30 September have been prepared in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting. The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the audited annual financial statement for the period ended 31 December. The accounting policies adopted are consistent with those of the previous financial year. In addition, the Company has adopted those new and amended IFRS standards effective for the financial year ending 31 December, which have been presented in the financial statements for the year ended 31 December. Those new and amended IFRS standards have not had a material impact on the interim financial statements. The interim financial statements are unaudited. Note 2 Use of judgements and estimates The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the year ended 31 December. 6

31 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Note 3 Segment reporting The Company is a holding company. Following from this it has no business operations generating revenues, nor any employees. Based on the internal reporting model used by the Board of Managers, for the assessment of results and the use of resources, the Company reports as a single segment, which complies with the approach to the organisation and management of activities. The chief operating decision maker is the Board of Managers. Note 4 Board of Managers fees The Company had no employees during the period. The Company pays remuneration to the members of the Board of Managers. Note 5 Other expenses Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months 1000 EUR Auditor remuneration Other administrative expenses Total Auditor remuneration Audit fees Total Note 6 Income taxes The Company is subject to taxation under the Luxembourg tax regulation applicable to companies EUR Q3 Q3 Q1-Q3 Q1-Q3 Last twelve months Current income taxes Total

32 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Note 7 Investments in subsidiaries 1000 EUR 30 Sep 30 Sep 31 Dec Balance at the beginning of the period 2,043 2,043 2,043 Changes in investments in subsidiaries Balance at the end of the period 2,043 2,043 2,043 The Company has shareholdings in the following companies: Name Registered office Proportion of the capital held, % Capital and reserves Profit / loss European Directories BondCo S.C A. ("BondCo") 46A, Avenue J.F. Kennedy, L-1855 Luxembourg, R.C.S. Luxembourg 99.99% 1, European Directories GP S.á r.i ("ED GP") 46A, Avenue J.F. Kennedy, L-1855 Luxembourg, R.C.S. Luxembourg 100% On 2 December 2013 the Company contributed TEUR 2,031 to the share capital of European Directories BondCo S.C.A. and TEUR 13 to the share capital of ED GP. The amount of capital and reserves and the losses for the latest financial year of the said companies, as presented above, are based on the financial statements as at and for the period ended 31 December. BondCo has prepared its financial statements under IFRS and ED GP under Lux GAAP. The Company has issued a guarantee as for its own debt for the obligations of BondCo under the Bonds. The Company has also pledged the shares it owns in BondCo and ED GP as well as all claims under the PIK intercompany loans as security to the Bonds. Note 8 Non-current and current receivables Non-current receivables 1000 EUR 30 Sep 30 Sep 31 Dec Loan to European Directories BondCo S.C.A. Original loan amount 10 Dec , , ,314 Set up fee capitalised Interest capitalised 24,233 15,569 15,569 Total 127, , ,334 Loan to European Directories Parent S.A Loan to European Directories Holdco S.A Loan to Leafy S.á r.l Total loan receivables 128, , ,312 On 10 December 2013, in order to facilitate the financial restructuring of its group, the Company entered into a TEUR 103,314 loan agreement with its immediate subsidiary, European Directories Bondco S.C.A. The loan bears an interest rate of 7,9% payable annually in arrears. As of 30 September the Company has a loan receivable totalling TEUR 978 from Leafy S.à r.l. payable on demand. The loans from European Directories Parent S.A. and European Directories Holdco S.A. totalling of TEUR 724 were transferred to Leafy S.à r.l. in November. The loans bear an interest rate of 0,1% payable in arrears on 30 June and 31 December each year. From the date of the interim financial statements the Company does not have the intention to ask for repayment in the next 12 months. 8

33 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Current receivables 1000 EUR 30 Sep 30 Sep 31 Dec Interest income on financial assets classified as loans and receivables Loan to European Directories BondCo S.C.A. 7,455 7,011 9,364 Other loans Total interest income in the statement of profit and loss 7,455 7,011 9,365 Other financial income Total financial income in the statement of profit and loss 7,455 7,103 9,456 Interest accrued previous year 10,110 9,457 9,457 Set up fee/interest capitalised or paid during the period -9,063-8,713-8,712 Total accrued interest 8,502 7,755 10,110 Prepayments Other receivables Total accrued interest and other receivables 8,518 7,930 10,134 In Q3 European Directories BondCo S.C.A. paid TEUR 100 (TEUR 400) of intercompany interest to the Company. Other current receivables comprised prepayments made in relation to insurance contracts, recognised in the following years and receivables from other European Directories Group companies. The Managers assessed that interest receivables approximate their carrying amounts largely due to the short-term maturities of these instruments. Note 9 Capital and reserves 1000 EUR Number of shares (pcs) Share capital Share premium Other reserves Total 30 September 10,000, , , September 10,000, , ,559 Share capital The issued share capital consists of 10,000,000 shares with a nominal value of Euro 0.01 each, all of which are fully paid up. The share capital is divided into three classes of shares, namely 4,990,000 class A shares, 4,010,000 class B shares and 1,000,000 class C shares. Each share entitles the holder to one vote at the Annual General Meeting. Different shares entitle their holders to a different dividend. Other reserves Legal reserve: In accordance with the Luxembourg company law, the Company is required to transfer a minimum of 5% of its net profit for each financial year to a legal reserve. This requirement ceases to be necessary once the balance on the legal reserve reaches 10% of the issued share capital. The legal reserve is not available for distribution to the shareholders. Note 10 Non-current and current financial liabilities and other liabilities a.) Non-current financial liabilities 30 Sep 30 Sep 31 Dec Shareholder loan (preferred equity certificates) 103, , ,314 Accrued interests on Shareholder loan 67,513 45,938 50,796 Total non-current liabilities 170, , ,110 On 10 December 2013 the Company issued 103,314 preferred equity certificates ("PECs") for an aggregate amount of TEUR 103,314 ("PECs"). Leafy S.á r.i. is the holder of all outstanding PECs. The PECs have a maturity date of 10 December The PECs carry a fixed yield and a profit yield which can be paid in full or in part by issuing new PECs to the holders. As at 30 September the accrued interest amounts to TEUR 67,513 (30 Sep : TEUR 45,938). 9

34 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Accrued interest 30 Sep 30 Sep 31 Dec Interest expenses on financial liabilities classified as loans and borrowings Shareholder loan 16,717 14,471 19,329 Loan from Fonecta Oy ,717 14,486 19,344 Other finance expenses Total finance cost in the statement of profit and loss 16,718 14,508 19,366 Accrued interest previous year Shareholder loan 50,796 31,467 31,467 Interest expenses capitalised 67,513 45,938 50,796 Interest payable on borrowings Loan from Fonecta Oy Total interest payable on borrowings b. ) Current liabilities 30 Sep 30 Sep 31 Dec Amounts due to group companies DTG Holding B.V Fonecta Oy Herold Business Data GmbH European Directories Corporations Oy European Directories OpHoldco S.à r.l 3,706 3,706 3,706 European Directories (DH7) B.V. 9,341 9,341 9,341 13,104 13,211 13,165 Current tax Accrued expenses Other Total trade and other payables 13,334 13,485 13,347 The Managers assessed that trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. 10

35 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Note 11 Financial risk management Financial risk factors The Company s activities expose it to a variety of financial risks: - market risk (including currency risk), fair value interest rate risk and price risk - credit risk; and - liquidity risk. The Company s overall risk management programme focuses on the structure of the assets and liabilities. Management aims to achieve risk minimisation through the use of a "back to back" structure. 1. Market risk Price/Interest rate risks Market risk is the potential of suffering losses due to changes in market prices or parameters influencing market prices. It includes changes concerning illiquidity of sub-markets resulting in the inability of buying/selling positions of a special size, within a special period of time or at fair value conditions. Interest rate risk is covered by the structure of the assets and liabilities. Through back to back structuring management considers the interest cash flow risk to be mitigated. Sensitivity analysis A reasonable possible change of 100 basis points in the interest rates at the reporting date would not impact the value of assets, liability or shareholder equity in a significant way. The back to back structure of assets and liabilities offsets this risk. Currency risk The Company has no significant currency risk as borrowings and lending contracts are denominated in Euro, the functional and presentation currency of the Company. The Company is only subject to individual insignificant transactions in foreign currency which may arise. Sensitivity analysis A reasonable possible strengthening (weakening) of the Euro, US dollar (USD) or Swedish krona (SEK) against all other currencies as at reporting date would not significantly affect the measurement of the value of assets, liabilities or shareholder equity. The back to back structure of assets and liabilities is offsets this risk. 2. Credit risk Credit risk is associated with potential losses arising from a business partner s (counterparty, issuer, other contractual partner) default, i.e. its inability or unwillingness to meet contractual obligations, or the deterioration of its creditworthiness, e.g. changes in the issuer credit rating. The maximum credit risk exposure of the Company in the event of other parties failing to perform their obligations is considered to be the carrying value of the loans to the Company's subsidiary. 3. Liquidity risk Liquidity risk is the risk that the abilityto meet payment obligations cannot be ensured at all times. In economic terms, this is the risk resulting from the Company s exposure to an increase of liquidity premiums. As presented under Note 8 Non-current and current receivables and Note 10 Noncurrent and current financial liabilities and other liabilities, management ensures that liquidity risk is minimised by matching the liquidity and maturity structure of assets and liabilities at all times. Changes in interest, currency and market prices would not impact the liquidity of the Company at the reporting date, value of assets, liabilities or shareholder equity in any significant way. The back to back structure of assets and liabilities offsets these risks. 11

36 Carrying amounts and fair value European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep The following table shows the carrying amounts of financial instruments. All financial instruments presented are valued at amortized cost through the use of the effective interest rate method. The carrying values of the financial instruments, other than shareholder loan, are considered to be a good approximation of the fair value of the financial instruments. Financial assets not measured at fair value Trade and other receivables Cash and cash equivalents Corporate securities TOTAL Non- current assets Trade and other receivables 30 Sep Investments Trade and other receivables Current assets Cash and cash equivalents Total 128,975-8, , , , ,975 2,043 8, ,632 Non- current liabilities Current liabilities Financial liabilities not measured at fair value Trade and other payables Borrowings TOTAL Interest bearing loans and borrowings Interest bearing loans and borrowings Trade and other payables Total ,334 13, , , , , ,242 Financial assets not measured at fair value Trade and other receivables Cash and cash equivalents Corporate securities Non- current assets Trade and other receivables 31 Dec Investments Trade and other receivables Current assets Cash and cash equivalents Total 120,312-10, , , ,043 TOTAL 120,312 2,043 10, ,528 Financial liabilities not measured at fair value Trade and other payables Borrowings TOTAL Non- current liabilities Interest bearing loans and borrowings Current liabilities Interest bearing loans and borrowings Trade and other payables Total ,347 13, , , , , ,538 12

37 Note 12 Related parties European Directories Midco S.à r.l., Interim Financial Statements for the period ended 30 Sep Related parties of the Company The Company s related parties comprise the following: * European Directories BondCo S.C.A. * Leafy S.à r.l * Board of Managers * all European Directories Group companies. Key management personnel of the Company consist of the Board of Managers ("the Managers"). Ownership structure Leafy S.à r.l., a company incorporated in Luxembourg is the immediate and ultimate parent company of European Directories Midco S.à r.l. European Directories Midco S.à r.l. has shareholdings in two subsidiaries, European Directories BondCo S.C.A., and European Directories GP S.à r.l. For further information, see Note 7 "Investment in subsidiaries". Related party transactions 1000 EUR Q1-Q3 Q1-Q3 Loan receivables 128, , ,312 Loan payables 170, , ,110 Interest income 7,455 7,011 9,365 Interest expenses 16,717 14,486 19,344 Accrued interest on loan receivables 8,502 7,755 10,110 Accrued interest on loan payables Board fees* *The Midco board is active as well at the level of the Group, therefore TEUR 162 (Q3 ; TEUR 162) was recognised by another European Directories Group company in Q3 and TEUR 188 (Q3 ; TEUR 462) by European Directories Midco S.à r.l. There are no commitments in respect of retirement pensions for members of the management and supervisory bodies. There are no advances, loans or commitments given on their behalf by way of guarantee of any kind granted to the members of those bodies during the year period 30 September. Note 13 Contingencies and commitments The Managers of the Company are not aware of any significant contingent liabilities as at 30 September. European Directories Midco S.à r.l is a guarantor for the obligations of European Directories BondCo S.C.A. under the bond. No other Group companies are guarantors. European Directories Midco S.à r.l. and European Directories BondCo S.C.A. have provided security for certain assets (certain shares, loan receivables and bank accounts) to secure the obligations of European Directories BondCo S.C.A. under the finance documents. Note 14 Events after the balance sheet date There are no material events after the balance sheet date. 13

38 European Directories Bondco S.C.A. Interim financial statements for the period ended 30 September Interim financial statements are unaudited European Directories BondCo S.C.A. Interim financial statements for the period of 1 January 2015 to 30 September 2015 European Directories BondCo S.C.A Interim financial statements January-September R.C.S. Luxembourg : B A, avenue J.F. Kennedy L-1855 Luxembourg