ENIRO Q3 REPORT 2012-10-25 Johan Lindgren, CEO Mattias Lundqvist, CFO Cecilia Lannebo, Head of IR
CEO INTRODUCTION & SUMMARY A digital media company with 74 percent of revenues being digital the transformation is done long-tail Print and Voice Continue to streamline and concentrate operations Continued strong EBITDA and free cash flow generation loan repayments ahead of timetable head-room to bank covenants solid platform for future growth Online & Media is growing, but at a lower pace than expected full-year top-line guidance for 2012 revised Reiterated guidance for: EBITDA De-leverage 2
DEVELOPMENT NET DEBT/EBITDA SEK M X 3
TOP-LINE CHALLENGE AND ACTIONS TAKEN Lower revenues due to weaker development within larger customer accounts and Media Products Actions during autumn: Launch of new mobile products and extended mobile packages Ramp up in sales force Extended service element within Online/mobile and Media products Further third-party co-operations planned for Other factors contributing during remaining's of 2012: Acquisition of Open AdExchange to strengthen Media products Move of print publications to impact revenues favorably during the remaining's of 2012 Voice price increases in Sweden on sms and calls 4
FINANCIAL HIGHLIGHTS, Q3 2012 Revenues SEK 948 M (1,012), a decline of 6% (-11). Negative currency effects accounts for some 30 MSEK, or 3 percent. Moved publication effect is positive with some SEK 15 M. Organically revenues declined by 8 percent (-8). Online/mobile revenues increased by 4%, organically revenues increased 1% Digital media share, rolling 12M, is 74 percent excl Voice (65) Cost reductions SEK 41 M i.e. SEK 213 M in savings 9M. Full year target increased to SEK 250 M EBITDA SEK 261 M (269), EBITDA margin of 27,5% (26,6) Adjusted EBITDA SEK 273 M (271) Operating cash flow is improving by SEK 78 M to SEK 25 M (-53) Interest bearing net debt SEK 2,863 M (3,849), (Q2 2,887) Net debt/ebitda 2.9 (3.4) (Q2 2.9) 5
FINANCIAL HIGHLIGHTS, 9M 2012 Revenues SEK 2,908 M (3,129), a decline of 7% (-19). Organically revenues declined by 8 percent (-10) Online/mobile total revenues increased by 6%, 1% organically Cost reductions SEK 213 M exceeding the earlier communicated full year target of SEK 200 M. Full year target increased to SEK 250 M EBITDA SEK 668 M (710), EBITDA margin of 23,0% (22,7) Adjusted EBITDA SEK 693 M (738) Operating cash flow is improving with SEK 215 M to SEK 138 M (-77) 6
LAUNCH OF NEW APP, MAPS, ONLINE FEATURES Launch of new mobile apps with extended mobile features Local search done directly from the location on the map Facebook check-in integration High speed map resolution and responsive design More than 1 million downloads since launch in September No:1 in all countries in the Appstore category Navigation; high overall listing in all countries New online interface with improved user benefits 7
TRAFFIC DEVELOPMENT Weekly user sessions, monthly average YELLOW USAGE eniro.se 1 600 000 YELLOW USAGE gulesider.no 1 200 000 1 400 000 1 000 000 1 200 000 1 000 000 800 000 800 000 600 000 600 000 400 000 400 000 200 000 0 2012 2011 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 200 000 0 2012 2011 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 YELLOW USAGE krak.dk 2012 2011 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1 600 000 1 400 000 1 200 000 1 000 000 800 000 600 000 400 000 200 000 0 ONLINE YELLOW USAGE panormafirm.pl 2012 2011 2010 8
PROS AND CONS IN THE Q3 REPORT Pros EBITDA supports full year guidance Cost saving ahead of plan, new cost saving guidance No further goodwill write-downs Net debt lowered Conditions in bank agreements fulfilled Cons Top-line development and guidance Prepaid development 9
ORGANIC DEVELOPMENT 15% 10% 5% 0% -5% -10% -15% -20% Q1-2009 Q2-2009 Q3-2009 Q4-2009 Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011 Q2-2011 Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012 Total organic Reported revenues Online organic Reported revenues seasonally impacted from moved publication shifts 10
PREPAID REVENUES; BALANCE SHEET 1 400 1 275 1 200 1 233 1 190 1 145 1 000 1 089 1 049 1 083 1 117 1 073 1 031 1 043 990 948 800 854 600 11
REVENUE BRIDGE Q3 2012 1,012 3 30 25 1,004 3-6% 62 8 6 38 921 27 948-8% Reported revenues 2011 Divested business Currency Moved effects publications Organic baseline Online Print Media Other Voice 1-30 18 16-17 Adj. Revenues Acq. Reported -6% Revenue effect from divested operations, currency and moved publications, totaled SEK -8 M Revenues decreased by 8% organically Digital revenues 74% of total Eniro excl Voice, 12M rolling 12
COST SAVINGS 2.420 24 23 2.373 25 8 67-185 12 2.348 105 8 41 2.188 69 2.257-213 54 2.134 Operating cost 2011 YTD Divested Currency effect Organic baseline 2011 Net Savings Q1 Net Savings Q2 Net Savings Q3 Adj Operating cost 2012 YTD Acquired Operating cost 2012 YTD 3 rd party cost Cost Including De Gule Sider Total savings SEK 213 M in 9M 2012, of which SEK 67 M in Q1 and SEK 105 M in Q2 and SEK 41 M in Q3 Of which Staff SEK 97 M, Print and Paper SEK 32 M and Outsourced services SEK 12 M Some SEK 1,1bn in cost savings during the last three years 13
Comments on financials Amortizations Depreciable intangible assets that arose in connection with the acquisition of Findexa 2005 will be fully amortized by December 2012. Lowering amortizations 2013 by some SEK 280 M Taxes Eniro's tax payments are primarily in the first half. Paid tax will thus be low in the second half of 2012 A completion of the proposed corporate tax cut would result in a onetime increase of tax costs in Q4 with approx. SEK 30 M, (no impact on cash flow) Working capital The assessment is that working capital will be slightly negative for the full year 2012 14
CHANGE IN NET DEBT ------- 3 months -------- ------ 9 months ------ ------- 12months ------- 2 012 2011* 2012 2011 * 2011/12 * 2011* SEK M Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec Opening balance -2 887-3 787-3 535-3 756-3 849-3 756 Operating cash flow 25-53 138-77 445 230 Acquisitions and divestments 1 0 27 27 0 0 Share issue -2-376 -9 375-10 Translation difference and other changes 0-9 131-34 166 1 Closing balance -2 863-3 849-2 863-3 849-2 863-3 535 Net debt /EBITDA adjusted for other item s affecting com parability, tim es 2,9 3,4 2,9 3,4 2,9 3,4 Operating cash flow in Q3 improved by SEK 78 M Operating cash flow 9M improved by SEK 215 M Net debt/ebitda 2.9 (3.4) Q2 2.9 15
Loan repayments 2012-2014 Re-payments during 2012 (approx. SEK 1.2bn): Extra re-payment of SEK 158 M in Q1 SEK 150 M re-paid in June 2012 SEK 192 M in re-paid interest swaps August 2012 Earlier debt re-payment to one bank in consortium SEK 362 M, and SEK 154 M in discount on loan SEK 150 M due in December 2012 Re-payments during 2013 (approx. SEK 436 M): SEK 218 M due in June 2013 SEK 218 M due in December 2013 Re-payments during 2014 (approx. SEK 268 M): SEK 268 M due in June 2014 Maturity of loan facility November 2014 16
REVENUE OUTLOOK FOR 2012 & 2013 2012 The objective of reporting revenue growth in 2012 will not be realized. However, the pace at which revenues are declining is expected to become slower during the fourth quarter. 2013 In 2013, Eniro will further streamline the business. Revenues from digital media, which currently account for about two-thirds of sales, are expected to increase. Revenues from Print and Voice, which represent the remaining one-third of the business, will continue to decline as a result of changing user patterns. Eniro will maximize cash flow from these media. Continued cost savings and a more efficient organizational structure are expected to yield a strong cash flow, which will be used to further reduce debt. 17
OUTLOOK FOR 2012 EBITDA EBITDA for 2012 in line with 2011 Cost reductions Net cost reductions 1 of SEK 250 M in 2012 Dividend and capital structure Priority will be given to the reduction of net debt 1) The planned cost savings do not include effects from divestments and acquisition of operations, or the higher third-party costs that arose as a result of the strategic shift in the revenue mix to higher revenues from third-party partnerships. 18
APPENDIX
ONLINE/MOBILE Total revenues increases 4 percent (SEK approx. 25 M contribution from De Gule Sider) Organic development +1 percent 20
PRINT Total revenues decreased -24 percent Change in publication shift of print books impacts positively with SEK 15 M compared with last year Organic development -30 percent 21
MEDIA PRODUCTS Total revenues increased by 16 percent. Organic revenues increased by 18% A continued ramp up in growth is expected 22
VOICE Total revenues decreased 19 percent. Organic revenues decreased 17 percent Q3 EBITDA SEK 73 M (102), an EBITDA margin of 39,0 percent (44,3) Co-operation agreement with 118 100 to administer their volumes 23
Revenue overview Revenues by category 2012 2011* 2012 2011 * 2011/12 * 2011* SEK M Jul-Sep Jul-Sep % Jan-Sep Jan-Sep % Oct-Sep Jan-Dec Total revenues 948 1 012-6 2 908 3 129-7 4 102 4 323 Directories 761 782-3 2 340 2 453-5 3 311 3 424 Online/mobile 528 510 4 1 588 1 505 6 2 091 2 008 Print 142 187-24 473 681-31 843 1 051 Media products 52 45 16 166 136 22 218 188 Other products 39 40-3 113 131-14 159 177 Voice 187 230-19 568 676-16 791 899 Revenues by country 2012 2011* 2012 2011 * 2011/12 * 2011* SEK M Jul-Sep Jul-Sep % Jan-Mar Jan-Sep % Oct-Sep Jan-Dec Total revenues 948 1 012-6 2 908 3 129-7 4 102 4 323 Sweden 443 475-7 1 366 1 489-8 1 924 2 047 Norway 266 301-12 870 975-11 1 181 1 286 Denmark 134 116 16 368 318 16 522 472 Finland 61 73-16 184 211-13 257 284 Poland 44 47-6 120 136-12 218 234 24
EBITDA overview EBITDA by revenue area 2012 2011* 2012 2011 * 2011/12 * 2011* SEK M Jul-Sep Jul-Sep % Jan-Sep Jan-Sep % Oct-Sep Jan-Dec Total EBITDA 261 269-3 668 710-6 989 1 031 Directories 187 193-3 531 535-1 766 770 Voice 73 102-28 196 243-19 297 344 Other 1-26 -59-68 -74-83 Items affecting comparability Restructuring costs 12 2 29 28 44 43 Other items affecting comparability 0 - -4-0 4 Total adjusted EBITDA 273 271 1 693 738-6 1 033 1 078 * Restated comparison year in accordance with new accounting principle regarding pensions 25