Interim report January September October 26, 2006

Transkript

1 Interim report January September 2006 October 26, 2006

2 2 Q Highlights Operating revenues was SEK 1,432 M (969) Q pro forma operating revenues incl. Findexa was SEK 1,526 M EBITDA was SEK 464 M (194) Q pro forma EBITDA incl. Findexa was SEK 453 M Net income for the period was SEK 187 M (158) Net income from discontinued operations of SEK 84 M included 2005 Market outlook 2006 for Group EBITDA remains unchanged Market outlook 2006 for Swedish offline revenues is revised from organically flat to an organic decline of 2 percent

3 3 1. Print Sweden Actions 2005 New features: layout, heading structure, guides, search functionality, increased circulation Proving ROI: More statistics, measure individual ad performance Actions 2006 Pocket edition of YP in Stockholm to enhance value for advertisers very well received Ads from YP also on Internet service More flexible payment conditions Continued ROI focus YP sales force divided into print and Internet Decision made to publish pocket editions in Gothenburg and Malmö for 2007 Decision made to close down classified paper Gula Tidningen Development 2006 We expect offline revenues to be organically down 2 percent for the full year compared to 2005 Weaker development than expected on large accounts Local directories showed a weaker performance in Q3 due to bad performance in one geographical are

4 1. Print Norway Action program for 2007 canvasses Product development Four new guides in Yellow Pages, activity guide in local directory, mobile numbers in White pages Price and offerings Simplification of product offering, new offerings, trigger earlier order intake by Oslo pocket edition, moderate price increase and simplified price list Sales Focus on call measurement and ROI, laptops to field sales and improved sale tools, segmentation programs, centralized telesales, new and simplified incentive system Marketing and distribution Marketing campaign from May, full household distribution and addressed distribution to businesses and public customers, strengthen internal pride Development 2006 Offline revenues in Q3 are organically down 9 percent We are confident with guidance of organic revenues of -10 percent for

5 2. Finland Focus areas 2006 Improve print business by stopping revenue decline in Helsinki and Tampere and grow ETD revenues Grow the online business by leveraging the online opportunity Grow the voice business by gaining market share Implement cost saving program Improve efficiency in sales Development 2006 Organically, offline revenues declined by 14 percent for the nine-months period, while online revenues increased by 36 percent and voice revenues increased by 17 percent Effects of the cost saving program improved EBITDA margin to 12 percent for the first nine months, compared with 3 percent in the same period

6 6 3. Leverage on Internet opportunity Actions 2006 Product search: Continued information gathering, new functionality Sponsored links: Broadened customer offering and more sophisticated price models based on paid search made possible by MIVA platform Statistics package transparent way of demonstrating ROI Surveys and lab sessions to gain better understanding of customers and users needs Click to call: Demonstrate ROI, potential revenue source Restaurant bookings Road cameras User ratings and reviews Aerial photographs (Internet and mobile) Integration with MS Office Shopping service incl. price comparison service in Sweden and Norway (Din Pris) Specialized Internet sales forces (currently in Sweden, Norway & Denmark) New version of Norwegian web search site, Kvasir, launched New versions of eniro.s, eniro.dk and eniro.fi to be launched during Q4 Development 2006 Group online revenues increased organically by 14 percent in the first nine months In Norway, online revenues grew organically by 24 percent In Sweden, online revenues were organically up 11 percent

7 4. Cost reduction program Cost savings program was implemented in 2004 to reduce Eniro s overall cost level In 2005, cost savings of SEK 100 M was delivered Total cost savings of SEK 300 M, net savings based on cost base (SEK 3.7 bn) extrapolated with inflation 2005 SEK 100 M 2006 SEK 200 M (accumulated) 2007 SEK 300 M (accumulated) The cost saving program is on track 7

8 5. Findexa integration Actions 2006 Integration of the two Norwegian entities done by July 1 Work to realize cost synergies proceeds according to plan Number of brands reduced - focus on the market leading brands Gule Sider and Kvasir - resulting in continued strong revenue growth The two entities fully integrated and Findexa renamed to Eniro as of October 1 8

9 9 Market outlook Based on the first nine months results for 2006 and the visibility in revenues for the rest of the year, the Group s total EBITDA is expected to increase in 2006 by 5-7 percent, compared with the 2005 pro forma consolidated accounts. EBITDA in the pro forma accounts for 2005 totaled SEK 2,093 M, excluding non-recurring expenses of SEK 113 M in Findexa. Organic offline development for Sweden 2006 is expected to decrease by 2 percent. This is an adjustment from the previously announced outlook of a flat organic development in Swedish offline revenues. Online revenues for Sweden, are expected to increase by more than 10 percent in Norwegian offline revenues are expected to decline organically by approximately 10 percent in 2006, compared with A step-up program for the Norwegian print business is now in place. For 2007, this program is expected to reduce the organic decline in offline revenues to 2-3 percent. In addition, and as earlier communicated, the publishing fee from Telenor of NOK 42 M expires as of The aim for 2008 is a flat development of offline revenues. Online revenues for Norway are expected to increase by percent in 2006.

10 10 Market outlook cont. The merger of the two Norwegian units is expected to generate SEK 50 M in cost savings from Norwegian operations in 2006 and SEK 100 M in Continued strong competition is expected in the Finnish market in 2006, with continued price pressure in the print market. A cost savings plan has been implemented in Finland and the Finnish EBITDA margin is expected to exceed 10 percent. In 2004, a cost-savings program was implemented to reduce Eniro s overall cost level, calculated in terms of fixed monetary value and stated as net savings. Total savings to be achieved were SEK 300 M, out of which SEK 100 M were achieved in 2005 and an additional SEK 100 M will be received in 2006 and another SEK 100 M in As announced in the second quarter report, Eniro has the flexibility to return to its stated dividend policy one year earlier than expected after adjustments to the loan agreement.

11 11 Eniro Group Q Oct/Sep Jan-Dec SEK M % % 2005/ % Results compared with proforma 2005 incl. Findexa Offline revenues Online revenues Voice revenues Operating revenues EBITDA EBITDA margin Results compared with actual 2005 Jul-Sep Jan-Sep Earnings before tax Net income from continuing operations Net income Cash flow from operating activities The organic development of operating revenues was flat Offline revenues decreased by 6 percent organically Online revenues improved in all markets except Germany, the organic increase is 12 percent Improved EBITDA from last year due to lower costs in Sweden, Finland and Poland Earnings before tax up 58 percent, net income from continuing operations up 153 percent and net income per share from continuing operations up 115 percent Cash flow from operating activities is up 36 percent from last year

12 12 Sweden excl. Voice 34 % * *Share of total revenues Oct-Sep 2005/06 Jul-Sep Jan-Sep Oct-Sep Jan-Dec SEK M % % 2005/ Offline revenues Online revenues Total Revenue EBITDA EBITDA Margin, % Offline revenues declined by 4 percent organically Online revenues increased organically by 10 percent EBITDA increased to SEK 147 M (119), due to lower costs and lower bad debts

13 13 Sweden Voice 9 % * Jul-Sep Jan-Sep Oct-Sep Jan-Dec SEK M % % 2005/ * Share of total revenues Oct-Sep 2005/06 Voice revenues Total Revenue EBITDA EBITDA Margin % Revenues down 2 percent Decline in volumes partly offset by new service concept EBITDA increased to SEK 51 M (41) partly explained by positive timing effects on costs

14 14 Norway Nordic 28 % * *Share of total revenues Oct-Sep 2005/06 Jul-Sep Jan-Sep proforma % vs proforma % vs SEK M proforma proforma Offline revenues Online revenues Voice revenues Total Revenue EBITDA EBITDA Margin, % Total revenues decreased organically by 1 percent Offline revenues decreased organically by 9 percent Online revenues increased organically by 20 percent EBITDA affected negatively by moved publication and currency, while realized cost synergies had a positive effect

15 15 Finland Nordic 10% * *Share of total revenues Oct-Sep 2005/06 Jul-Sep Jan-Sep Oct-Sep Jan-Dec SEK M % % 2005/ Offline revenues Online revenues Voice revenues Total Revenue EBITDA EBITDA Margin, % Total revenues increased organically by 5 percent Offline revenues decreased organically by 17 percent Online revenues increased organically by 27 percent and Voice increased organically by 8 percent Improved EBITDA, besides higher revenues, also driven by lower costs

16 16 Denmark 7 % * *Share of total revenues Oct-Sep 2005/06 Jul-Sep Jan-Sep Oct-Sep Jan-Dec SEK M % % 2005/ Offline revenues Online revenues Total Revenue EBITDA EBITDA Margin, % Organic revenues increased by 8 percent Offline revenues increased organically by 2 percent and online revenues increased organically by 30 percent EBITDA negatively affected by costs for new sales personnel and costs related to change of premises

17 17 Poland Central Europe 6% * *Share of total revenues Oct-Sep 2005/06 Jul-Sep Jan-Sep Oct-Sep Jan-Dec SEK M % % 2005/ % Offline revenues Online revenues Total Revenue EBITDA N/a EBITDA Margin, % A small quarter since most of the directories are published in Q4 Organic total revenues up 6 percent EBITDA more than doubled higher revenues as well as lower production and administration costs

18 18 Germany Central Europe Wer Liefert Was? 5 % * *Share of total revenues Oct-Sep 2005/06 Jul-Sep Jan-Sep Oct/Sep Jan-Dec SEK M % % 2005/ % Online revenues Total Revenue EBITDA EBITDA Margin, % Revenues decreased organically by 5 percent Telesales center installed EBITDA amounted to SEK 16 M (20)

19 19 Balance sheet Balance sheet Eniro Group SEK M Sept 30, 2006 Sept 30, 2005 Total assets whereof total goodwill whereof goodwill Findexa whereof cash Equity Net debt Net debt/ebitda, times Net debt/ebitda pro forma, times Return on equity, % Balance sheet Parent Company SEK M Sept 30, 2006 Sept 30, 2005 Equity whereof unrestricted

20 20 Financing position as of September 30, 2006 Loan agreement in 2005 corresponding to SEK 12,000 M in new credit facilities with the purpose to: finance the cash payment in the acquisition of Findexa refinance Eniro s and Findexa s former debt working capital and operational requirements As of September 30, 2006 NOK 7,062 M - whereof NOK 6,262 M hedged until maturity (Sept 2010) and NOK 800 M with floating interest rates EUR 100 M - hedged until maturity (Sept 2010) SEK 1,126 M - floating interest rates SEK 873 M - unutilized Repayment of loans SEK 900 M 2006 SEK 850 M for each of the years SEK 600 M for each of the years Flexibility to return to dividend policy, 75 percent of net income, earlier than expected

21 21 Background financial information Consolidated financials Revenues EBITDA Revenues by quarter EBITDA by quarter Balance sheet Cash flow Shareholders

22 22 Consolidated financials Income statement Jul-Sep Jan-Sep Oct-Sep Jan-Dec (SEK M) / Continuing operations Operating Revenue growth % Where of Offline growth % Where of Online growth % 37 na 41 na Where of Voice growth % 13 na 15 na Offline Share % Online Share % Voice Share % EBITDA margin % Net income from continuing operations Discontinued operations Net income from discontinued operations NET INCOME Net Income per Share SEK na na na na Key ratios 30-sep June 30 March Equity / Asset Ratio % Interest bearing net debt, SEK M Interest bearing net debt / EBITDA, times 4,7 5,6 6,8

23 23 Revenues Revenues Jul-Sep Jan-Sep Oct-Sep Jan-Dec (SEK M) % % 2005/ Continuing operations Sweden excl Voice Voice Nordic Norway Finland Denmark Central Europe Wer Liefert Was? Poland Total operating revenues

24 EBITDA EBITDA Jul-Sep Jan-Sep Oct-Sep Jan-Dec (SEK M) % % 2005/ Continuing operations Sweden excl Voice Voice Nordic Norway Finland 3-12 N/a Denmark Central Europe Wer liefert was? Poland N/a Other N/a N/a Head office & group-wide projects N/a N/a EBITDA Total

25 Revenues by quarter Revenues by quarter (SEK M) Q3 Q2 Q1 Q4 Q3 Q2 Continuing operations Total % of annual revenues Sweden excl Voice Voice Nordic excl. Sweden Norway Finland Denmark Central Europe Wer liefert was? Poland

26 EBITDA by quarter EBITDA by quarter (SEK M) Q3 Q2 Q1 Q4 Q3 Q2 Continuing operations Total % of annual EBITDA Sweden excl Voice Voice Nordic excl. Sweden Norway Finland Denmark Central Europe Wer liefert was? Poland Other

27 27 Balance sheet Balance sheet Eniro Group (SEK M) September 30, 2006 June 30, 2006 Assets Intangible assets Other non-current assets Total non-current assets Total current assets Total assets Equity Total non-current liabilities Total current liabilities Total shareholders equity and liabilities Interest-bearing net debt

28 28 Cash flow Cash flow Jul-Sep Jan-Sep Oct-Sep Jan-Dec (SEK M) / Operating income before interest and taxes Depreciations and amortizations Other non-cash items Interest paid Income taxes paid Cash flow from operating activities before changes in working capital Changes in net working capital Cash flow from operating activities Cash flow from discontinued operations Acquisition of subsidiaries, net of cash acquired Purchases and sales of non-current assets, net Cash flow from investing activites New loans raised Loans paid back Buy back of shares Dividend Cash flow from financing activities Cash flow

29 29 Shareholders 30 September 2006 Ownership by country Others 11% USA 36% Luxemburg 5% Italy 8% UK 18% Sweden 22% Largest shareholders % Fidelity funds 9.8 Hermes Focus Asset Management 7.7 Kairos funds 4.9 Richmond Capital 4.9 Parvus Asset Management 4.9 SHB/SPP funds 3.4 Robur funds 3.2 SEB funds 2.4 Vanguard funds 1.6 DWS-Scudder funds 1.1 Others 56.1 Total 100.0