European Directories Group, European Directories Midco S.à r.l. and European Directories BondCo S.C.A. Financial Statements Bulletin January-December

Transcription

1 European Directories Group, European Directories Midco S.à r.l. and European Directories BondCo S.C.A. Financial Statements Bulletin January-December February 2018

2 Financial Statements Bulletin January-December 2017 (Comparative 2016 numbers in brackets) Financial Summary October-December Group revenues are MEUR 65 (MEUR 75, 13% below last year) - Revenues for key business drivers, profile services and consumer services, declined 4% and 10% respectively (Q vs. Q4 2016) - EBITDA is MEUR 12 (MEUR 18, 35% below last year) - Loss for the period after taxes is MEUR -6 (MEUR 22) - Net cash from operating activities is MEUR 5 (MEUR 4) January-December Group revenues are MEUR 246 (MEUR 274, 10% below last year) - Revenues for key business drivers, profile services and consumer services, declined 4% and 12% respectively (Jan-Dec 2017 vs. Jan-Dec 2016) - EBITDA is MEUR 48 (MEUR 47, 1% above last year) - Loss for the period after taxes is MEUR -8 (MEUR 21) - Net cash from operating activities is MEUR 20 (MEUR 27) Headlines The Group continues to face a difficult trading environment, illustrated by the revenue decline across the digital businesses, together with the perpetual decline in consumer services and print. However, management action to implement significant cost reduction programmes has resulted in a continued improvement in EBITDA despite substantial investment in one-off expenditure to achieve the cost reductions. The decline in traditional revenues (print products and consumer services) has continued in line with the Board of Directors expectations (volumes down 20% per annum in the year). Disappointingly, the digital businesses suffered a small decline in revenues as customer churn outstripped new customer acquisition. This illustrates the competitive nature of the digital markets and remains the Group s most significant challenge. Management is looking to develop new products to provide a competitive edge and seek to arrest this decline. In the meantime, cost reduction programmes, including the restructuring plan announced in DTG in November 2017, continue to be pursued to maintain and grow EBITDA. Conversely, the development of Dogado through acquisitions was continued with the purchase of Alfahosting, a similarly sized business in Germany. Net cash from operating activities for the fourth quarter was MEUR 5 (2016: MEUR 4) as EBITDA was absorbed by MEUR 2 interest on Finderia tax payment and working capital outflows. For the first time the digital businesses in total reported positive operating cash flow after restructuring costs on an LTM Page 1

3 basis. Whilst the digital businesses cash flow has turned positive, the Group remains reliant on the declining consumer services as its principal source of cash generation. The key operational risks facing the Group continue to be the generic decline in traditional revenues (print products and consumer services) and the highly competitive nature of the digital markets. In ongoing Austrian tax audits, the tax inspector has challenged the company on calculations in relation to advertising tax, VAT deductibility of certain expenses, and on tax deductions related to refinancing cost, certain expenses and intercompany recharges. The Group has assessed the tax and associated interest charge exposure on the above mentioned issues for the audited and subsequent years, and has recorded an additional MEUR 3.6 provision in December The cash tax risk of these items is dependent on the outcome of the existing tax appeal in Austria. Refinancing As highlighted in the third quarter report, the Group would not be in a position to repay its bond in full when it becomes due in December 2018 from cash generation and so would be reliant on either divestments and / or alternative refinancing options. On 30 January 2018, the Group announced its proposal for an extension of the bond which, if accepted by the requisite majority of bondholders will extend the maturity date to June Approval of the amended bond terms and conditions would lead to MEUR 0.8 one-time consent fee payment and an additional MEUR 1.2 annualized interest cash outflow impact for the Group. The Board of Directors considers that this cash flow impact is manageable for the Group. Events after the end of the period On 30 January 2018, the Group s subsidiary, European Directories BondCo S.C.A. (BondCo), announced a proposal to amend certain terms and conditions of its issued bonds which requires approval by the requisite majority of bondholders. The principal terms of the proposal include an extension to the bond maturity date of 2.5 years to 9 June 2021, an increase in the interest margin of 150bps to 8.5% and cancellation by the Group of those bonds which it holds. Further details of the other proposed amendments and additional provisions to the bond Terms and Conditions were set out in a Notice of Written Procedure which was sent to bondholders on 22 February In addition, following receipt of the requisite majority of bondholders voting in favour of the proposal, BondCo will pay a consent fee of 1% to all bondholders. BondCo has received irrevocable undertakings to vote in favour of the proposal from certain investors, including Kaleva Mutual Insurance Company and Sampo Group s Mandatum Life Insurance Company Limited, who as per today jointly hold 41.3% of the bonds not held by BondCo, the Group and its affiliates. As per today, BondCo, the group and its affiliates hold 50.1% of the bonds which will not be eligible to vote and which will be cancelled immediately following receipt of the requisite majority of bondholders voting in favour of the proposal. Page 2

4 Report of the Board of Directors * Revenues Group net revenue by segment, MEUR Q Q Fonecta DTG Herold Other Total Group Group net revenue by product group, MEUR Q Q 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. October-December 2017 Group revenues for the fourth quarter totalled MEUR 65, a 13% decline compared to the previous year due to the continued structural decline of traditional print revenues, Fonecta s consumer business and lower new media revenues. New media revenues totalling MEUR 23 declined by 15% compared to the previous year due to lower marketing services revenues. Profile services revenues totalling MEUR 25 stayed at prior year level. The total share of online products in the Group s product portfolio totalled 74% (70%) in the quarter. Print revenues totalled MEUR 2, a decline of 73% compared to previous year. Print revenues represented 2% of total revenues, showing a decrease of 6 percentage points. Consumer services consisting of directory assistance and SMS data information services in Finland declined by 10% and totalled MEUR 13, representing 19% of total revenues. *) The term Board of Directors is referring to the Board of Managers in European Directories Midco S.à r.l Page 3

5 January-December 2017 Group revenues for January-December 2017 totalled MEUR 246, a MEUR 28 or 10% decline compared to previous year. New media revenues totalling MEUR 80 declined by 7% from previous year level. Profile services revenues totalling MEUR 92 decreased by MEUR 4 from previous year. The total share of online products in the Group s product portfolio totalled 70% (66%) in the year to date. Print revenues totalled MEUR 12 a decline of 50% compared to previous year. Print revenues represented 5% of total revenues, showing a decrease of 4 percentage points. Consumer services consisting of directory assistance and SMS data information services in Finland declined by 12% and totalled MEUR 52, representing 21% 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 Q Q Fonecta DTG Herold Other Total Group October-December 2017 Group EBITDA for the quarter amounted to MEUR 12 (MEUR 18), with EBITDA margin of 18% (24%). The Group s EBITDA margin decreased mainly due to one-off restructuring related costs and accruals at DTG. 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-December 2017 Group EBITDA for the year amounted to MEUR 48 (MEUR 47), with EBITDA margin of 20% (17%). The Group s total operating costs and expenses for the period decreased by MEUR 29 compared to the prior year due to continued cost saving measures and despite higher one-off costs in 2017 to achieve the longer term savings. Operating profit amounted to MEUR 20 (MEUR 21), representing an operating margin of 8% (8%). Page 4

6 Balance sheet, cash flow and investment activities At the end of December 2017, European Directories Group s consolidated assets totalled MEUR 396 ( : MEUR 398). 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 Q Q Q1-Q Q1-Q 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-December 2017, the Group s net cash from operating activities before financial items and taxes paid increased to MEUR 37 (MEUR 36) due to improved EBITDA. Net cash from operating activities decreased to MEUR 20 (MEUR 27) mainly due to MEUR 10 Finderia tax and interest payments. Net cash used in investing activities was MEUR -27 (MEUR -19), 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 December 2017 was MEUR 24 ( : MEUR 31). Investments in tangible and intangible assets In January-December 2017, investments in tangible and intangible assets amounted to MEUR 27 (MEUR 19) mainly related to acquisitions along with capital expenditure incurred in growing the online business offering and customer service capabilities. Acquisitions The Group (through its group company Dogado GmbH) made three German domain and webhosting business acquisitions in March, July and September Further, in October 2017 Dogado acquired Alfahosting GmbH, a comparable sized webhosting business in Germany. This transaction establishes Dogado GmbH as a leading mid-sized hosting company in Germany and greatly accelerates the European Directories group s buy-and-build strategy in this sector. Page 5

7 Divestments In February, 2017 the Group disposed of its 24.9% shareholding in Binder Trittenwein GmbH for a nominal amount, resulting in minor loss to the Group. In December 2017, the Group disposed of its 100% shareholding in DR3 B.V. for a nominal amount, resulting in small gain to the Group. Interest-bearing net debt Net interest-bearing debt at 31 December 2017 was MEUR 70, excluding subordinated shareholder loans (compared to MEUR 68 at the end of December 2016). The amortised cost of the bond as of 31 December 2017 was MEUR 79. Personnel At the end of December 2017, the number of Group employees (FTE) was 1,294, a decrease of 206 (FTE) compared to the end of December Composition of the Board of Directors On 7 February 2018, Domenico Latronico replaced Fabrice Rota on the board of European Directories Midco S.à r.l. As a result, the board of European Directories Midco S.à r.l. now consists of the following members: Marcus Englert (Chairman), Hannu Syrjänen, Björn Osterloff, Peder Prahl, Marco Sodi, Domenico Latronico and Sébastien Rimlinger. On 7 February 2018, Domenico Latronico replaced Fabrice Rota on the board of European Directories GP S.à r.l. 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, Domenico Latronico, Manager B and Sébastien Rimlinger, Manager B. Page 6

8 For further information, please contact: Group CFO Neil Robson European Directories Group s Financial Statements will be published during the week of 26 March 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-December 2017 Interim Financial Statements are unaudited Condensed consolidated income statement 1000 EUR Note Q Q Revenues 3 64,600 74, , ,440 Other income ,160 1,057 Cost of consumables -13,662-13,170-53,299-58,981 Personnel expenses -27,007-32, , ,254 Other operating expenses -12,645-11,013-41,321-44,912 EBITDA *) 3 11,751 18,028 47,977 47,350 Gain/(loss) from sale of subsidiaries Depreciation, amortisation and impairment charges -5,203-6,542-28,310-26,091 Operating profit/(loss) 6,549 11,477 19,668 21,180 Finance income - 5,602 6,467 17,984 Finance expense -7,336-8,001-29,894-31,377 Finance costs - net -7,336-2,399-23,427-13,393 Profit/(loss) before income tax ,078-3,759 7,787 Income taxes** -5,171 12,856-4,652 13,306 Profit/(loss) for the period -5,958 21,934-8,411 21,093 Attributable to: Owners of the parent -5,928 22,002-8,188 21,420 Non-controlling interests ,958 21,934-8,411 21,093 *) 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-December 2017 Interim Financial Statements are unaudited Condensed consolidated statement of comprehensive income 1000 EUR Q Q Profit/(loss) for the period -5,958 21,934-8,411 21,093 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 129 7, ,639 Related tax , ,669 Other comprehensive income for the period, net of tax 137 7, ,942 Total comprehensive income for the year -5,821 29,650-8,283 29,035 Total comprehensive income attributable to Owners of the parent -5,791 29,717-8,060 29,362 Non-controlling interests Total comprehensive income for the year -5,821 29,650-8,283 29,035 9

11 European Directories Group January-December 2017 Interim Financial Statements are unaudited Condensed consolidated balance sheet 1000 EUR Note Dec Dec ASSETS Non-current assets Goodwill 7 221, ,040 Other intangible assets 5, 6 79,621 84,647 Property, plant and equipment 5, 7 7,944 6,547 Investments in associates Available-for-sale financial assets 4 3,231 1,471 Other financial assets Loan receivables from related parties 4 2,227 1,877 Deferred tax assets 1,701 2,215 Total non-current assets 316, ,279 Current assets Inventories Trade and other receivables 4 55,590 53,597 Cash and cash equivalents 4, 9 23,961 30,800 Total current assets 79,837 84,919 Total assets 396, ,198 EQUITY Equity attributable to owners of the parent Share capital Share premium 16,449 16,449 Other reserves Retained earnings -34,343-34,196 Total -17,784-17,637 Non-controlling interests 1,383 1,073 Total equity -16,401-16,564 LIABILITIES Non-current liabilities Bond 4, 9-99,016 Shareholder loan and accrued interest 4, 9 176, ,110 Other non-current financial liabilities 4, 9-7,681 Deferred tax liabilities 34,355 33,024 Provisions 10 2,314 3,078 Pension obligations 5,759 6,525 Total non-current liabilities 218, ,434 Current liabilities Bond 4, 9 79,267 - Current financial liabilities 4, 10 14,260 - Trade payables 4 10,330 9,502 Deferred revenues 42,391 44,607 Current tax liability 477 6,489 Provisions 10 14,067 11,255 Other current liabilities 4 32,830 39,475 Total current liabilities 193, ,328 Total liabilities 412, ,762 Total equity and liabilities 396, ,198 10

12 European Directories Group January-December 2017 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 , ,197-17,638 1,074-16,564 Result for period ,188-8, ,411 Other comprehensive income Total comprehensive income for the period ,060-8, ,283 Acquisition of non-controlling interest *) Capital injection to subsidiary with a noncontrolling interest *) Total changes in ownership interests Derecognization of put option**) 8,259 8,259 8,259 Dividends to non-controlling interests Total equity 31 December , ,343-17,784 1,383-16, Total equity 31 December , ,026-46,467 1,003-45,464 Result for the period ,420 21, ,093 Other comprehensive income ,942 7,942-7,942 Total comprehensive income for the period ,362 29, ,035 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 31 December , ,197-17,638 1,074-16,564 *) During 2017, the Group acquired an additional 4% interest in Dogado GmbH increasing its ownership from 66% to 70% 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 30%. The acquisition was made by the issuance of new shares (TEUR 2 350) by Dogado. The Group recognised a decrease in non-controlling interest of TEUR 71 from the acquisition and an increase in non-controlling interest of TEUR 715 from the capital injection. **) The Group has derecognised a financial liability for a put option relating to the acquisition of non-controlling interest in Dogado GmbH. See note 9. ***) During 2016, the Group acquired an additional 15% interest in Dogado Gmbh increasing its ownership from 51% to 66% 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 34%. The acquisition was made by the issuance of new shares (TEUR 2,000) by Dogado. The issuance was an intercompany transaction with no cash flow effect for the Group. The Group recognised a decrease in non-controlling interest of TEUR 50 from the acquisition and an increase in non-controlling interest of TEUR 583 from the capital injection. 11

13 European Directories Group January-December 2017 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 Q Q ,958 21,934-8,411 21,093 5,171-12,856 4,652-13,306 7,336 2,399 23,427 13,393 5,203 6,542 28,310 26, ,751 18,028 47,977 47, ,327-1,507-9,700-9, , ,223 16,623 30,976 38,276-2,904-12,565-11,273-11,319 5,319 4,058 19,703 26,957 Cash flow from investing activities Acquisitions of subsidiaries and businesses, net of cash acquired -13, ,676-4,746 Purchases of available-for-sale investments ,758 - Purchases of intangible assets and property, plant and equipment -2,311-5,085-8,932-13,805 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 -16,610-5,112-26,774-18,617 Cash flow before financing activities -11,291-1,054-7,071 8,340 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 - -8,612-13,916-23, , , ,245 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 -10,872-9,672-6,839-15,905 34,833 40,472 30,800 46, ,961 30,800 23,961 30,800 12

14 European Directories Group January-December 2017 Interim Financial Statements are unaudited Notes to the condensed consolidated 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 2017, 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 financial statements. The financial statements bulletin is 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 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 2016, 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-December 2017 Interim Financial Statements are unaudited Revenues by segment 1000 EUR Q Q Fonecta 27,930 31, , ,285 DTG 12,713 17,101 57,170 66,140 Herold 23,957 25,914 74,169 78,015 Group total 64,600 74, , ,440 EBITDA by segment 1000 EUR Q Q Fonecta 8,673 8,266 39,249 32,520 DTG -2,380 2,982 3,140 9,498 Herold 6,244 7,251 10,103 10,001 Other ,514-4,671 Group total 11,751 18,028 47,977 47,350 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 Q Q Fonecta 517 1,048 1,403 2,656 DTG 1,133 1,919 5,378 6,284 Herold 661 2,114 2,151 4,861 Other Group total 2,311 5,081 8,932 13,805 Assets by segment 1000 EUR Dec Dec Fonecta 254, ,655 DTG 73,685 86,083 Herold 100,994 82,102 Other -33,340-33,642 Total assets in the balance sheet 396, ,198 Liabilities by segment 1000 EUR Dec Dec Fonecta 131, ,012 DTG 284, ,243 Herold 62,849 41,308 Other -66,119-46,801 Total liabilities in the balance sheet 412, ,762 14

16 European Directories Group January-December 2017 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 31 Dec EUR Available for sale financial assets Loans and receivables Measured at amortised cost Total Assets as per balance sheet Trade and other receivables - 55,590-55,590 Cash and cash equivalents - 23,961-23,961 Available-for-sale financial assets 3, ,231 Loan receivables from related parties - 2,227-2,227 Book value total 3,231 81,778-85,009 Liabilities as per balance sheet Bond ,267 79,267 Shareholder loan , ,461 Current financial liabilities 14,260 14,260 Trade payables - 10,330-10,330 Other current liabilities - 32,830-32,830 Book value total - 43, , , Dec 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-December 2017 Interim Financial Statements are unaudited 5. Acquisitions and disposals Acquisitions in 2017 The Group (through its group company Dogado GmbH) made three German domain and webhosting business acquisitions on 10 March, 7 July and 16 September Further, on 16 October 2017 Dogado acquired 100% of the shares and votes in Alfahosting GmbH, a comparable sized webhosting and cloud service business in Germany. The combined total acquisition price for the acquisitions through Dogado was TEUR 18,422, creating a goodwill of TEUR 12,591 which is mainly attributable to the synergies expected to be received from integrating the businesses into the Group's existing hosting business. The following table summarises the consideration paid and the amounts of the assets acquired and liabilities assumed recognised at the acquisition dates. Consideration transferred 1000 EUR Cash Total consideration transferred Cash in the acquired company Deferred consideration Net cash outflow from acquisition 18,422 18,422-2, ,126 Recognised amounts of identifiable assets acquired and liabilities assumed Fair value recognised on acquisition 1000 EUR Intangible assets Property, plant and equipment 7, Other non-current assets 2 Trade and other receivables Cash and cash equivalents Trade and other payables 1,001 2,981-4,565 Deferred tax liabilities -1,613 Total net assets acquired Goodwill on acquisition Consideration price, satisfied in cash 5,831 12,591 18,422 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-December 2017 Interim Financial Statements are unaudited Acquisitions in 2016 On 22 January 2016, 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 2016, 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 2016, 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 1 June 2016, 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 2017 On 28 February 2017, 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. On 1 December 2017, the Group disposed of its 100% shareholding in DR3 B.V. for a nominal amount. The sale resulted in small gain to the Group. Disposals during 2016 On 12 April 2016, the Group disposed of its 76.34% 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-December 2017 Interim Financial Statements are unaudited 6. Changes in intangible assets 1000 EUR Dec Dec Opening balance 300, ,429 Acquisitions 19,822 6,509 Capital expenditures 6,474 10,711 Disposals Amortisation -18,394-23,715 Impairments -7,496 - Other Closing balance 300, ,687 Goodwill included in closing balance 221, ,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 Group also performed a customary year-end impairment testing in December. Based on the year-end testing, there are no further impairment indicators. The recoverable amounts 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 31 December 2017 was determined similarly to the 31 December 2016 goodwill impairment test. The discount rates (pre-tax) used in the valuation were Fonecta 12.8% (12.8% December ), DTG 14.5% (12.0%) and Herold 13.4% (13.2%). Reconciliation of carrying amount of goodwill 1000 EUR Cost Dec Dec Balance at the beginning of period 456, ,179 Acquisition through business combination 12,591 2,224 Balance at end of period 468, ,403 Impairment losses Balance at the beginning of period -240, ,363 Impairment loss -7,496 - Balance at end of period -247, ,363 Carrying amounts Balance at the beginning of period 216, ,816 Balance at end of period 221, , Changes in property, plant and equipment 1000 EUR Dec Dec Opening balance 6,547 5,486 Acquisitions Capital expenditures 3,038 3,339 Depreciation, amortisation and impairment -2,419-2,376 Closing balance 7,944 6,547 18

20 European Directories Group January-December 2017 Interim Financial Statements are unaudited 8. Cash and cash equivalents 1000 EUR Dec Dec Cash at bank and in hand 23,490 30,337 Short-term bank deposits Cash and cash equivalents 23,961 30, Financial liabilities 1000 EUR Bonds Shareholder loan and accrued interest (PECs) Other non-current financial liabilities Carrying amount Dec Carrying amount Dec , , ,110-7,681 Total Non-current financial liabilities 176, ,807 Bonds 79,267 - Bank loan 13,967 - Other current financial liabilities Total Current financial liabilities 93,527 - Total financial liabilities 269, ,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 The bonds were reclassified from non-current liabilities to current liabilities as the bonds maturity date was less than 12 months on 31 December In January-December 2017, 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 amortization of the bond transaction costs during January-December 2017 was TEUR 348. The amortized cost of the bond as of 31 December 2017 was TEUR 79,267 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 (2017). 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 31 December 2017 was TEUR 73,147 ( : TEUR 50,796). The put option relating to the acquisition of the non-controlling interest in Dogado GmbH expired when a new shareholder agreement became effective in October The put option entitled the non-controlling interest of Dogado GmbH to sell their shares to the Group during The carrying amount of the liability TEUR 8,264 was written down to retained earnings. The unwind of the discount for January-October 2017 was TEUR 583 (2016: TEUR 843). As of 31 December 2016 the carrying amount of the liability was TEUR 7,681 and was included in other non-current financial liabilities. In 2016 a fair value gain of TEUR 1,391 was recognized in other financial income. On 20 March 2017, the Group utilized 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. In February 2018, the Group has agreed to extend the borrowing facility repayment term by further 12 months to March

21 European Directories Group January-December 2017 Interim Financial Statements are unaudited 10. Provisions 1000 EUR Tax provisions Dec Dec Other provisions Dec Dec Opening balance 9,447 18,022 4,886 5,504 Increase in the provisions 3,560-5,637 3,453 Provisions used ,579-2,310 Unused provisions reversed Other *) - -8, ,240 Closing balance 13,007 9,447 3,374 4,886 Of which non-current - - 2,314 3,078 Of which current 13,007 9,447 1,059 1,808 Total 13,007 9,447 3,374 4,886 *) The Group reclassified the Finderia tax provision to current tax liabilities 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 amortization 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 2016 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 challenged the company on calculations in relation to advertising tax, VAT deductibility of certain expenses, and on tax deductions related to refinancing cost, certain expenses and intercompany recharges. 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 behavior 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 0.6 advertising tax exposure for The tax inspector is also challenging MEUR 0.9 tax and VAT deductions for specific barter transaction and certain customer events (event marketing). Related to the same tax audit, the tax inspectors have also challenged tax deductions related to refinancing cost, certain expenses and intercompany recharges and are claiming interest on the unpaid tax amounts. This claim represents a MEUR 2.0 tax and associated interest exposure for The Group has recorded an additional MEUR 3.6 provision in December 2017 for the above mentioned tax and interest on the unpaid tax exposures. 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 lead to a further tax and interest payment of MEUR 10 in The Finnish tax office has decided that it does not accept the tax deductibility of intragroup loan interest costs for two Finnish holding companies for tax years 2015 and According to the decision, the EDSA Group companies are not allowed to deduct MEUR 29 interest for tax years 2015 and Loss carry-forwards from previous tax years are sufficient to cover the related increase in taxable income, such that the decisions do 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 recognized 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. As the Finderia tax and interest payments are made during 2017, the tax provision was reclassed in December 2016 to MEUR 6.2 current tax liabilities and MEUR 2.4 current liabilities. Related to the Austrian tax audit for , and considering interest on unpaid taxes and consistent approach for subsequent years, MEUR 3.6 tax provision was recorded in December The December 2017 MEUR 13.0 tax provisions amount represents the total provision for the Austrian tax cases. 20

22 European Directories Group January-December 2017 Interim Financial Statements are unaudited 11. Operating lease commitments 1000 EUR Dec Dec Due within a year 6,202 7,415 Due after one year and within five years 9,935 14,413 Due after five years 4,196 7,397 Total 20,334 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 On-going legal actions and official proceedings are related to open tax cases. See note 10 for details. 14. 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 Q Q Short-term employee benefits *) 406 1,035 2,297 2,992 Post-employment benefits Other long-term benefits Total 434 1,062 2,451 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 31 December 2017 and 31 December 2016, management had no personal shareholdings in the Group. Management has not been granted any loans. 21

23 European Directories Group January-December 2017 Interim Financial Statements are unaudited Transactions with related parties 1000 EUR Dec Dec Interest on loan receivables 6 2 Long-term interest-bearing loan receivables 2,227 1,877 Shareholder loan and accrued interest 176, ,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 On 30 January 2018, the Group s subsidiary, European Directories BondCo S.C.A. (BondCo), announced a proposal to amend certain terms and conditions of its issued bonds which requires approval by the requisite majority of bondholders. The principal terms of the proposal include an extension to the bond maturity date of 2.5 years to 9 June 2021, an increase in the interest margin of 150bps to 8.5%, a new covenant on capital expenditure and acquisitions and cancellation by the Group of those bonds which it holds. Further details of the other proposed amendments and additional provisions to the bond Terms and Conditions were set out in the Notice of Written Procedure which was sent to bondholders on 22 February In addition, following receipt of the requisite majority of bondholders voting in favour of the proposal, BondCo will pay a consent fee of 1% to all bondholders. BondCo has received irrevocable undertakings to vote in favour of the proposal from certain investors, including Kaleva Mutual Insurance Company and Sampo Group s Mandatum Life Insurance Company Limited, who as per today jointly hold 41.3% of the bonds not held by BondCo, the Group and its affiliates. As per today, BondCo, the group and its affiliates hold 50.1% of the bonds which will not be eligible to vote and which will be cancelled immediately following receipt of the requisite majority of bondholders voting in favour of the proposal. 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-December 2017 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 31 December 2017 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 31 Dec 2017 Interim financial statements are unaudited Interim statement of profit and loss and other comprehensive income 1000 EUR Note Q Q Board fees Other expenses Operating loss Finance income Finance costs Net finance costs Loss before income tax Income tax Loss for the period Total comprehensive income 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 31 Dec 2017 Interim financial statements are unaudited Interim balance sheet 1000 EUR Note(s) ASSETS Dec Dec Non-current assets Investments in subsidiaries Loan receivables Total non-current assets Current assets Accrued interest and other receivables Cash and cash equivalents Total current assets Total assets EQUITY Equity attributable to owners of the parent Share capital Share premium Other reserves Profit or (loss) brought forward Profit or (loss) for the year Total equity LIABILITIES Non-current liabilities Shareholder loan and accrued interests 10 (a) Total non-current liabilities Current liabilities Accrued interest 10 (a) Trade and other payables 10 (b) Total current liabilities Total liabilities Total equity and liabilities 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 31 Dec 2017 Interim financial statements are unaudited Interim statement of cash flows 1000 EUR Q Q Cash flows from operating activities Loss for the period Adjustments for: Income tax expenses Finance costs - net 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 31 Dec 2017 Interim financial statements are unaudited Interim statement of changes in equity Equity attributable to owners of the parent EUR Share capital Share premium Other reserves Retained earnings Total equity Balance at 31 December Total comprehensive income for the year Balance at 31 December Equity attributable to owners of the parent EUR Share capital Share premium Other reserves Retained earnings Total equity Balance at 31 December Total comprehensive income for year Balance at 31 December 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 31 Dec 2017 Notes to Interim Financial Statements for the period ended 31 December 2017 Note 1 Basis of preparation The interim financial statements for the three months ended 31 December 2017 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 2017, 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

31 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Dec 2017 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 Q Q 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 Q Q Current income taxes Total

32 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Dec 2017 Note 7 Investments in subsidiaries 1000 EUR 31 Dec Dec 2016 Balance at the beginning of the period Changes in investments in subsidiaries - - Balance at the end of the period 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% 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 31 Dec Dec 2016 Loan to European Directories BondCo S.C.A. Original loan amount 10 Dec Set up fee capitalised Interest capitalised Total Loan to Leafy S.á r.l Total loan receivables 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 7,24% payable annually in arrears. As of 31 December 2017 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 31 Dec 2017 Current receivables 1000 EUR 31 Dec Dec 2016 Interest income on financial assets classified as loans and receivables Loan to European Directories BondCo S.C.A Other loans 1 1 Total interest income in the statement of profit and loss Other financial income 4 91 Total financial income in the statement of profit and loss Interest accrued previous year Interest capitalised Interest received during the period Total accrued interest Prepayments 7 24 Total accrued interest and other receivables In Q European Directories BondCo S.C.A. paid TEUR 100 (2016: 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 31 December December 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 31 Dec Dec 2016 Shareholder loan (preferred equity certificates) Accrued interests on Shareholder loan Total non-current liabilities 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 31 December 2017 the accrued interest amounts to TEUR 73,147 (31 Dec 2016: TEUR 50,796). 9

34 European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Dec 2017 Accrued interest 31 Dec Dec 2016 Interest expenses on financial liabilities classified as loans and borrowings Shareholder loan Loan from Fonecta Oy Other finance expenses - 23 Total finance cost in the statement of profit and loss Accrued interest previous year Shareholder loan Loan from Fonecta Oy Interest expenses capitalised Interest payable on borrowings Loan from Fonecta Oy Total interest payable on borrowings b. ) Current liabilities 31 Dec Dec 2016 Amounts due to group companies DTG Holding B.V Fonecta Oy 4 45 European Directories Corporations Oy European Directories OpHoldco S.à r.l European Directories (DH7) B.V Current tax 2 2 Accrued expenses Other Total trade and other payables 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 31 Dec 2017 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 ability to 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 31 Dec 2017 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 31 Dec 2017 Investments Trade and other receivables Current assets Cash and cash equivalents Total 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 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 2016 Investments Trade and other receivables Current assets Cash and cash equivalents Total TOTAL 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

37 Note 12 Related parties European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Dec 2017 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 Loan receivables Loan payables Interest income Interest expenses Accrued interest on loan receivables Accrued interest on loan payables Board fees* *The Midco board is active as well at the level of the Group, therefore TEUR 216 (2016: TEUR 216) was recognised by another European Directories Group company in Q1-Q and TEUR 212 (2016: TEUR 499) 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 31 December Note 13 Contingencies and commitments The Managers of the Company are not aware of any significant contingent liabilities as at 31 December 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 that would have a material impact on the result or financial position of the Company. 13

38 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-December 2017 R.C.S. Luxembourg : B A, avenue J.F. Kennedy L-1855 Luxembourg