PagesJaunes Groupe: revenues up 5.9% and GOM up 5.2% in Proposed dividend payment of 0.96 per share, representing a yield of 6.

Transcription

1 Sèvres, February 15, 2008 PagesJaunes Groupe: revenues up 5.9% and GOM up 5.2% in Revenues from online services exceed 400 million (1) - Revenues from printed directories unchanged - Proposed dividend payment of 0.96 per share, representing a yield of 6.5% The consolidated revenues of PagesJaunes Groupe amounted to 1,158.3 million in 2007, a rise of 5.9%. Almost 763,000 advertisers used one or more platforms of PagesJaunes Groupe as an advertising medium in France, Spain, Luxembourg and Morocco in The consolidated GOM (2) reached million in That represents a rise of 5.2%, or 4.3% compared to the 2006 GOM after adjustment to take account of the costs incurred by PagesJaunes Groupe as a result of its divestment by France Télécom in 2006 (3). Consolidated operating income advanced 8.8% to million in It includes 14.6 million of dilution profit recognised when M6 acquired an interest in the capital of PagesJaunes Petites Annonces in October The net income of the consolidated group amounted to million in 2007, a decrease of 9.5% compared to The decrease in net income from continuing operations was caused by the financial expenses related to the bank financing arranged at the end of November 2006 in order to fund the payment of the exceptional dividend. The net debt of PagesJaunes Groupe averaged approximately 1.86 billion in 2007, leading to net financial expenses of million. This result also includes 34.4 million of net income from divested operations (Kompass France and Kompass Belgium), including 33.0 million of consolidated capital gains on disposals. The Board of Directors of PagesJaunes Groupe of February 14, 2008 resolved to propose to the general meeting of shareholders, convened for April 29, 2008, the payment of a dividend of 0.96 per share, amounting to a total of million, in accordance with the target of distributing 100% of the consolidated net income. This represents a yield of 6.5% (4). 1 Press Release

2 On the publication of PagesJaunes Groupe s full-year results, Michel Datchary, Chief Executive Officer, said: PagesJaunes Groupe achieved 5.9% revenue growth in 2007, driven essentially by 24.3% growth in Internet activities. These contributed almost one-third of revenues, with over a billion visits to the Group s Internet sites in This growth, bolstered by the development and breakeven of the service, resulted in an increase of 5.2% in the consolidated GOM, taking the gross operating margin rate to 43.9% of revenues. The improvement in PagesJaunes overall performance offset the investments in Internet small ads, the relaunch of the printed directories and the launch of the new version of pagesjaunes.fr. Our new charging policy, which, with effect from the 2008 edition, aims to take fuller account of the differences observed in the use of the printed directories and pagesjaunes.fr, should accelerate the development of Internet services, which are expected to represent almost 40% of the Group s revenues in This strategy should also allow PagesJaunes Groupe to pursue revenue growth in excess of 5% and to raise GOM growth above 8%. The Group is also maintaining an attractive dividend policy and has set itself the target of distributing all the 2008 net income to its shareholders. I. Revenues PagesJaunes in France Segment The revenues of the PagesJaunes in France segment advanced 5.8% to 1,071.8 million in PagesJaunes recruited 120,700 new advertisers in France in 2007 (115,100 new advertisers in 2006), taking the total number of advertisers to almost 667,000, a rise of almost 4.5% compared to In this context of sustained recruitment of new customers, average revenue per advertiser rose 0.7% to 1,581 ( 1,570 in 2006). The advertiser retention rate remains high compared to our European counterparts, at 85.6% in 2007 compared to 84.5% in Printed directories Revenues from printed directories remained almost unchanged, at million in 2007 (-0.2%). The slowdown in growth from printed directories was concentrated in the Ile de France region and, to a lesser extent, a number of major provincial cities, most of which were the target of operations to widen the distribution of printed directories in the second half ( all address distribution and targeting of new occupants and second homes). The decrease in some directories results essentially from a decrease in revenue per advertiser, while the number of advertisers continued to rise. In the 2007 edition, over 80% of new PagesJaunes advertisers included the printed medium in their communication plan. The number of advertisers in the printed directories accordingly 2

3 rose 3.5% to 608,600 in 2007, and the average revenue per advertiser amounted to 1,073. A new charging policy, intended to take fuller account of the differences observed in the audience of the printed directories and pagesjaunes.fr depending on housing type, should have the effect of promoting growth in Internet services and causing a decline in revenues from printed directories in Such a decline is the logical result of the new product offering, which leads in particular to a decrease in charges for the printed directory in around ten departments representing less than 18% of the revenues from printed directories. The results of this new product offering are in line with expectations at this stage of the 2008 edition. Internet The Internet revenues of PagesJaunes in France (pagesjaunes.fr and Internet sites) experienced continued very buoyant growth of 22.9%, to million. The launch of the new version of the pagesjaunes.fr site in September 2007 (simplified input form, new search system, new visual identity and improved ergonomics) sustained the growth in the audience of the pagesjaunes.fr site, which recorded 11.2 million unique visitors in December 2007 (5), a rise of 12.5% compared to December This record audience gives pagesjaunes.fr a reach rate of 42.2%, making it one of the most visited Internet sites in France (6) and the most visited directory site in Europe. In addition, pagesjaunes.fr and mappy.com were among the ten most visited Internet sites on mobile devices in the September 2007 round of the Mobinaute survey. Pagesjaunes.fr and mappy.com occupy second and fifth positions respectively, excluding the sites of the mobile operators. The introduction of the new version of pagesjaunes.fr was also accompanied by the launch of new advertising products, particularly the national products sold on a costper-mille (CPM) basis with very short publication periods, which reinforced the growth in revenues from Internet services in the fourth quarter of Taking into account the impact of the decline in the Minitel service, accelerated by France Télécom s decision in September to charge users for the service from the first second, online services as a whole advanced 15.1% to million in The number of advertisers on the online services rose from 453,800 in 2006 to 471,200 in 2007, i.e. 71% of the total number of advertisers. Average revenue per advertiser rose 12.0% to 798 due to the Group s innovation policy. 3

4 Telephone directory enquiries PagesJaunes directory enquiry service, , generated revenues of 28.1 million in 2007 compared to 14.4 million in The period against which the 2007 revenues are compared comprised only nine months of post-liberalisation activity in These revenues comprised equal proportions of traffic revenues and revenues from advertisements, with 93,600 advertisers in 2007 compared to 68,350 in International & Subsidiaries segment The revenues of the International & Subsidiaries segment, excluding the businesses divested in March 2007 (Kompass France and Kompass Belgium), amounted to 93.8 million in 2007, an increase of 9.2% compared to Revenues from B to C directories (QDQ Media, Editus Luxembourg, Edicom) advanced 5.9% to 61.8 million in The revenues of QDQ Media advanced 5.4% to 47.6 million in 2007, driven by the 25.2% growth in revenues from online services (QDQ.com), which represented 22.8% of revenues of QDQ Media in The number of advertisers on QDQ Media decreased by 5.4% compared to 2006, to 77,200, due to lower recruitment of new advertisers resulting from the delay in the hiring of commercial resources. QDQ Media has introduced a new commercial structure, the positive effects of which are expected in the 2008 financial year. Revenues from direct marketing and geographic services rose 5.5% to 29.0 million in 2007, driven by the 26.3% growth of Mappy. The online small ads business generated 1.9 million of revenues in 2007, essentially in the second half, due to the portfolio of 3,900 customers as at December 31, The site recorded 831,000 unique visitors in December 2007 (9), making it one of the most visited online real-estate and vehicle small ad sites in France. Over 400,000 small ads were carried on annoncesjaunes.fr as at December 31, The revenues of Horyzon, the Internet advertising representation business in which PagesJaunes Groupe acquired a majority holding in October 2007 and which was consolidated in the fourth quarter of 2007, represented a net amount of 1.1 million. II. Gross operating margin PagesJaunes in France segment The GOM of the PagesJaunes in France segment increased by 7.9% to million, i.e. a margin rate of 48.3% in 2007 compared to 47.4% in The GOM of PagesJaunes in France rose in 2007 due to growth in activity and the operating breakeven of the service (return to normal levels of communication expenditure, increase in charges and growth of high-margin advertising revenues) and measures taken with regard to purchases. External 4

5 purchases remained almost unchanged at million in 2007 (+0.7%), despite the increase in publishing expenses (paper, printing, distribution) for printed directories, in view of an increase of over 7% in their circulation in Salaries and charges rose 7.6% to million. This rise was due essentially to revenue growth and the increase in the number of sales employees. The sales force of PagesJaunes in France rose from 1,918 on December 31, 2006 to 2,022 on December 31, International & Subsidiaries segment The International & Subsidiaries segment recorded a negative GOM of 8.7 million in 2007, compared to a positive GOM of 3.7 million in This was due essentially to the losses at PagesJaunes Petites Annonces, which bore the launch, communication and marketing costs of its new annoncesjaunes.fr site, partly offset by the progressive rise in revenues. PagesJaunes Petites Annonces is set to maintain a sustained investment programme in The GOM of QDQ Media showed a slight loss in 2007, after a slight profit in 2006 due to a slowdown in the recruitment of new advertisers, which weighed on profitability, while QDQ Media made a number of investments. The commercial reorganisation that is currently under way and the new geographic breakdown of the printed directories in certain large Spanish cities should enable QDQ Media to return to a positive GOM from The Horyzon segment, which has formed part of the consolidated group since October 2007, made a positive contribution to GOM. III. Financial structure PagesJaunes Groupe generated an operating cash flow of million in 2007, compared to million in The rate of conversion of GOM into operating cash flow therefore rose from 88.9% in 2006 to 98.6% in 2007, due in particular to a return to normal in the change in the working capital requirement. The net cash flow (after financial result and corporation tax charge) decreased from million in 2006 to million in 2007, taking into account the change in the financial result from a net receipt of 9.3 million in 2006 to a net disbursement of million in The net financial debt (7) slightly decreased at 1,854 million as at December 31, 2007, compared to 1,867 million as at December 31, As at December 31, 2007, this net financial debt represented financial leverage of 3.6 times 2007 GOM, which is below the sector average (estimated at 4.8 times). With debt of 1,950 million repayable on a bullet basis on November 20, 2013 and a revolving credit line of 400 million maturing on the same date, PagesJaunes Groupe has real financial flexibility and no refinancing requirement. The Company also has interest rate hedging in place up to December 13, 2011 on approximately 82% of its net debt. Consequently, the average cost of the debt, taking into account the effect 5

6 of the rate hedging, was only slightly impacted by the sharp rise in interest rates in 2007 and averaged 5.85% over the 2007 financial year. At its meeting of February 14, 2008, the Board of Directors of PagesJaunes Groupe resolved to propose to the General Meeting of Shareholders, convened for April 29, 2008, the payment of a dividend of million, representing the entire consolidated net income of the Group excluding the impact of the non-disbursed part of the share-based payment charge and the financial result, and not taking into account the dilution profit. The latter results from the increase in the capital of PagesJaunes Petites Annonces to finance the company s future development. IV. Financial targets For 2008, on a like-for-like basis, PagesJaunes Groupe has set itself the following financial targets: Consolidated revenue growth in excess of 5%, sustained by growth in Internet revenues of more than 25%; Internet revenues representing almost 40% of consolidated revenues, confirming the leading position in France in local Internet advertising; GOM growth in excess of 8% due to a return to strong operational leverage. PagesJaunes Groupe aims to distribute the entire net income of the Group in respect of the 2008 financial year. This distribution target in no way constitutes a commitment on the part of PagesJaunes Groupe. Future dividends will depend on the Group s results, its financial situation and any other factor which the Board of Directors and the shareholders of PagesJaunes Groupe deem relevant. 6

7 About PagesJaunes Groupe PagesJaunes Groupe is the leading European publisher of directories on the Internet (pagesjaunes.fr, qdq.com) and the leading publisher of printed directories in France (the PagesJaunes directory and l Annuaire). PagesJaunes Groupe also publishes directories for the general public in Spain, Morocco and Luxembourg, operates telephone directory enquiry services in France ( ) and provides complementary services such as the geographic services of Mappy and the direct marketing services of PagesJaunes Marketing Services, as well as online small ads in the real-estate and vehicle markets with PagesJaunes Petites Annonces (annoncesjaunes.fr). It is also present in the field of Internet advertising representation with Horyzon Média. PagesJaunes Groupe had almost 763,000 advertisers in France, Spain, Luxembourg and Morocco in PagesJaunes Groupe is the second largest French company in terms of advertising revenue. PagesJaunes Groupe is listed on Euronext Paris (PAJ). Information on PagesJaunes Groupe is available at Contacts: PagesJaunes Press Thomas Barbelet / Orith Tabeur +33 (0) tbarbelet@pagesjaunes.fr otabeur@pagesjaunes.fr PagesJaunes Investors Vincent Gouley +33 (0) vgouley@pagesjaunes.fr 7

8 Appendices: Table 1: Consolidated income statement (in millions) Second half 2006 Second half 2007 Change 2007/ Change 2007/2006 Net revenues 596,7 631,5 5,8% 1 093, ,3 5,9% External purchases (160,2) (176,5) 10,2% (302,6) (314,6) 4,0% Other operating income 5,9 5,7-3,2% 11,6 10,1-12,9% Other operating expenses (12,4) (13,5) 9,0% (23,0) (23,9) 3,9% Pers - Salaries and charges (153,5) (165,9) 8,0% (295,7) (321,0) 8,6% Gross Operating Margin 276,5 281,4 1,8% 483,6 508,9 5,2% - Employee profit-sharing (7,7) (7,2) -6,6% (13,5) (14,4) 6,4% - Share-based payment (6,6) 1,3 na (8,6) (5,2) -39,5% Depreciation and amortisation (6,1) (8,0) 30,6% (11,9) (14,9) 25,2% Result of asset disposals (0,3) 14,3 na (0,6) 14,3 na Cost of restructuring and other items (0,0) (0,1) na (0,0) 0,0 na Operating income 255,8 281,7 10,2% 449,0 488,7 8,9% Financial income 12,8 (0,2) -101,2% 21,2 1,0 na Financial expenses (12,9) (61,3) na (13,8) (131,1) na Result of disposal of financial assets and other items 0,6 0,7 na 0,8 2,1 na Financial result 0,5 (60,7) na 8,1 (128,0) na Corporation tax (90,5) (72,2) -20,2% (161,0) (126,4) -21,5% Net income from continuing operations 165,8 148,8-10,2% 296,1 234,3-20,9% Net income from divested operations (0,4) 0,2 na 0,8 34,4 na Net income of the consolidated Group 165,4 149,0-9,9% 296,9 268,6-9,5% - Group share 165,4 149,0-9,9% 296,9 269,6-9,2% - Minority interests (1,0) na 8

9 Table 2: Consolidated revenues (in millions) 4th quarter th quarter 2007 Change 2007/2006 Change on constant publication basis Change 2007/2006 Printed directories 173,2 175,2 1,1% 1,1% 654,1 653,0-0,2% Online services 85,3 96,1 12,7% 12,7% 320,7 369,3 15,1% of which Internet 74,7 91,6 22,6% 22,6% 280,0 344,0 22,9% of which Minitel 10,6 4,5-57,5% -57,5% 40,8 25,3-38,0% directory enquiry service 4,6 9,6 108,3% 108,3% 14,4 28,1 na Other revenues 8,2 6,8-16,7% -16,7% 24,0 21,4-10,8% Total PagesJaunes in France 271,4 287,7 6,0% 6,0% 1 013, ,8 5,8% B to C directories 15,9 20,2 26,8% 5,8% 58,3 61,8 5,8% of which QDQ Media 12,7 16,5 29,7% 3,9% 45,2 47,6 5,4% Small ads - 0,9 na na - 1,9 na Internet advertising representation - 1,1 na na - 1,1 na Direct marketing and geographic services 9,3 9,7 4,2% 4,2% 27,5 29,0 5,5% Total International & Subsidiaries 25,2 31,9 26,7% 12,6% 85,9 93,8 9,2% Inter-segment (1,8) (2,3) 32,7% 26,8% (5,9) (7,4) 24,6% Total Group 294,8 317,3 7,6% 6,5% 1 093, ,2 5,9% Table 3: Income statement by business segment (7) (in millions) PagesJaunes in France Segment International & Subsidiaries Segment Change 2007/ Change 2007/2006 Net revenues 1 013, ,8 5,8% 85,9 93,8 9,2% External purchases (268,9) (270,8) 0,7% (39,5) (51,2) 29,6% Other operating income 10,9 12,6 15,6% 2,2 1,4 na Other operating expenses (21,3) (22,7) 6,1% (3,3) (5,1) na Salaries and charges (254,1) (273,4) 7,6% (41,6) (47,6) 14,5% Gross Operating Margin 479,9 517,5 7,8% 3,7 (8,7) na 9

10 Table 4: Operating metrics PagesJaunes in France segment Total number of advertisers Average revenue per advertiser ( ) New advertisers Retention rate (%) 86,8% 84,5% 85,6% Number of advertisers in printed directories Average revenue per advertiser in printed directories ( ) Number of online advertisers Average revenue per online advertiser ( ) Number of advertisers on Average revenue per advertiser on ( ) na International & Subsidiaries segment QDQ Media Number of advertisers Average revenue per advertiser ( ) Number of Internet advertisers Small ads Number of regular customers Number of advertisements

11 Table 5: Simplified cash flow statement (in millions) Change GOM 483,6 508,9 5,2% Employee profit-sharing (13,5) (14,4) 6,4% Change in WCR (9,7) 23,6 na Acquisitions of tangible and intangible fixed assets (30,6) (16,4) -46,3% Operating cash flow 429,8 501,6 16,7% Operating cash flow / GOM conversion rate 88,9% 98,6% Net financial income / (expense) 9,3 (114,7) na Non-monetary items included in GOM 2,9 3,0 3,4% Corporation tax paid (162,8) (121,7) -25,2% Net cash flow 279,3 268,2-4,0% Increase (decrease) in long-term borrowings and bank overdrafts 1 911,6 8,0 na Decrease (increase) in deposits and other financial assets 81,6 2,4 na Capital increase 34,4 4,4 na Contribution of minority shareholders - 16,0 na Dividends paid (2 803,7) (303,1) na Acquisitions of investment securities and subsidiaries, net of cash acquired (2,0) (10,8) na Income from sales of financial assets, net of cash divested 0,0 32,0 na Others 4,2 (1,1) na Net change in cash position (494,8) 16,2 na 11

12 Table 6: Net financial debt (in millions) 31/12/ /12/2007 Hedging instruments 17,5 30,0 Short-term investments > 3 months and < 1 0,3 0,0 Cash and cash equivalents 55,0 71,2 Cash assets 72,8 101,2 Bank loan (1 950,0) (1 950,0) Loan issue expenses 47,3 41,2 Liabilities in respect of hedging instruments (8,3) (6,8) Accrued interest not yet due (5,6) (6,8) Bank overdrafts (7,5) (16,7) Other financial liabilities (15,3) (16,1) Gross financial debt (1 939,4) (1 955,2) Net cash (debt) (1 866,6) (1 854,0) Notes (1) Sum of Internet, Minitel and Pages Pro revenues of PagesJaunes SA, Internet revenues of QDQ Media, Editus and Edicom, revenues of Horyzon, Mappy and PagesJaunes Petites Annonces. (2) Gross Operating Margin (GOM): revenues less external purchases, operating expenses (net of operating income) and salaries and social charges. The salaries and social charges included in the GOM do not include employee profit-sharing or the cost of share-based payment. (3) Fees for merchant banks, legal advisers and experts paid by PagesJaunes Groupe in the context of France Télécom s sale of its holding in PagesJaunes Groupe for a total of 4.1 million. (4) On the basis of the average share price since the previous coupon detachment date (May 4, 2007) (5) Source: Cybermétrie - Médiamétrie / estat for the number of visits to pagesjaunes.fr. (6) Reach rate: number of Internet users visiting the site at least once in the month in question as a proportion of the actual number of active Internet users during this period - Source: Nielsen//Netratings Home & Work domain ranking December (7) Net financial debt corresponds to the total gross financial debt less or plus derivative asset and liability cash flow hedging instruments less cash and cash equivalents including mutual funds and investment securities. (8) The PagesJaunes in France segment includes the expenses of PagesJaunes Groupe SA (9) Source: NielsenNetRatings *** 12

13 This document contains forward-looking statements. Although PagesJaunes Groupe 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 results anticipated in the forward-looking statements include, among other things: the effect of competition; PagesJaunes usage level; the success of the investments of the PagesJaunes Groupe in France and abroad. A description of the risks borne by the PagesJaunes Groupe appears in section 4 Facteurs de risques of the Document de Référence of PagesJaunes Groupe filed with the French financial markets authority (AMF) under the number R of March 27, The forward-looking statements contained in this document apply only from the date of this document, and PagesJaunes Groupe does not undertake to update any of these statements to take account of events or circumstances arising after the date of the said document or to take account of the occurrence of unexpected events. 13