Financial hearingsQ1 20162016‐04‐27
Agenda
1) Q1 highlights
2) Strategic update
3) Traffic and product development
4) Financials
5) Summary
Interim report January – March 20162
Management’s focus in Q1 2016
Measures to reverse the negative trend in digital revenue• Actions to stabilize customer base
• Subscriptions• Google • Reduced amount of complaints
• Improved user and customer experience• On average, 8.1 million visitors/week
• Operational improvements to increase efficiency and support strategy• New organisation ‐ Nordic Sales• Reduced staff turn‐over
Interim report January – March 20163
Efficiency enhancing activities pays off
Profitability increases• Adjusted EBITDA increases 14%, reaching 119 MSEK (104)
• Adjusted EBITDA‐margin 24%
• EBITDA up 46%, reaching 136 MSEK (93)• EBITDA‐margin 27%
Operating revenue, decreases 20%, reaching 504 MSEK (632)• Q1 2016 compared to Q4 2015 ‐13%
Desktop/Mobile Search revenue, decreases ‐17%, reaching 356 MSEK (430)• Q1 2016 compared to Q4 2015 growth of 3%
Interim report January – March 20164
Contents
1) Q1 highlights
2) Strategic update
3) Traffic and product development
4) Financials
5) Summary
Interim report January – March 20165
Market drivers
Digital advertising growthImproved demand of ROI Programmatic buying Ads purchased 24/7Social media search
Interim report January – March 20166
Strengthen the position within Local search
Complement with digital marketing services
Manage mature business responsibly
Our strategy
Strengthen the position within Local search
- Subscriptions- Improved display ad
formats- New updates and
new features- Nordic sales
organization
Complement with digital marketing services
- Google AdWords in Sweden
- Google training- Facebook retargeting- Programmatic
Manage mature business responsibly
- Voice office in Kristianstad closed31/3
- Preparing technicalsolution for costinformation in II8118
Our strategy – Actions in Q1
Contents
1) Q1 highlights
2) Strategic update
3) Traffic and product development
4) Financials
5) Summary
Interim report January – March 20169
2 800 000
2 700 000
2 600 000
2 500 000
0DecNovOktSepAugJulJunMajAprMarFebJan
Actual 2016Actual 2015Actual 2014
1 550 000
1 500 000
1 450 000
1 400 000
1 350 000
1 300 000
1 250 000
0DecNovOktSepAugJulJunMajAprMarFebJan
1 450 0001 400 000
0
1 750 0001 700 0001 650 0001 600 0001 550 0001 500 000
DecNovOktSepAugJulJunMajAprMarFebJan
1 600 000
1 500 000
1 400 000
1 300 000
1 200 000
1 100 000
0DecSep NovOktJulJunMaj AugAprMarFebJan
Total UB decreased by ~1.5 % YTD
YTD 2016‐3,4%
YTD 2016‐6,1%
YTD 2016‐0,6%
YTD 2016‐1,2%
Interim report January – March 201610
900 000
850 000
800 000
750 000
0
950 000
DecNovOktSepAugJulJunMajAprMarFebJan
Actual 2016Actual 2015Actual 2014
650 000
600 000
550 000
500 000
450 000
0SepAugJulJunMajAprMarFebJan DecNovOkt
600 000
550 000
500 000
450 0000
DecNovOktSepAugJulJunMajAprMarFebJan
850 000
800 000
750 000
700 000
650 000
600 000
550 000
500 0000
NovOktSepAugJulJunMajAprMarFebJan Dec
Leads delivered to our customers increased by ~1 % YTD
YTD 20160 %
YTD 2016‐4 %
YTD 2016‐1 %
YTD 20167 %
Interim report January – March 201611
Mobile usage of our services continuous to increase
‐
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
7 000 000
8 000 000
9 000 000
2013 2014 2015 2016 Q1
Total desktop UB Total mobile UB
26%
74%
34%
66%
36%
64%
19%
81%
Interim report January – March 201612
13 Interim report January – March 2016
Push notifications in our apps Waste and recycling centers at
gulesider.no
Real estate boarders, eniro.se (above, Castle of Stockholm) Kitchen selector
when searchingfor restaurants
Login to rate and reviewin the apps
Improved menu in map view
Facebookphotos at infopages in the apps
Improved iPad format (allows both horisontal and vertical mode)
Timetable for busses at krak.dk
User experienceUpdates in Q1
14 Interim report January – March 2016
CustomerSatisfaction Index,
SE and DKGoogle Adwords SE
Facebook retargeting
CSIgulesiderinnsikt.no
Two new display ad formats (directions and and maps)
Customer experienceUpdates in Q1
Subscription based agreements
Customer Infopage Production Malmö
Contents
1) Q1 highlights
2) Strategic update
3) Traffic and product development
4) Financials
5) Summary
Interim report January – March 201615
Jan-Mar Jan-Mar Jan-DecSEK M 2016 2015 % 2015
Desktop/Mobile search 356 430 -17 1 546Complementary digital marketing products 33 57 -42 222 Digital search 389 487 -20 1 768Print 24 29 -17 210Local search 413 516 -20 1 978Voice 91 116 -22 460
Total revenue 504 632 -20 2 438
Focus on reversing the trend in Digital revenues
16
Operating revenue by category and operating segments Comments
Q1 2016 vs Q4 2015, 3% growth In Q1 2015 decision was made to
stop selling less profitable products within the segment
Improved performance in sales teams but still problems in some important teams handling larger volumes
Focus areas: Stabilize customer base through:
Reduced churn Increased prospects(eg. Subscription & Google)
Interim report January – March 2016
Revenue by category (%) Q1 2016
17 Interim report January – March 2016
Revenue Q1 2016 vs Q1 2015, decrease of 20%
18
25
24
74
Compl. Dig. Mkt. Prod.
Desktop/Mobile Revenue Q1 2016
504
VoicePrint products
5
Revenue Q1 2015
632CommentsRevenue bridge
Currency effects of ‐15 MSEK included, primarily due to a weaker NOK
Interim report January – March 2016
Declining digital revenues remains a challenge
19
Revenue by country Comments
Jan-Mar Jan-Mar Jan-DecSEK M 2016 2015 % 2015
Sw eden 219 276 -21 1 038Norw ay 127 173 -27 641Denmark 68 84 -19 366Finland 37 43 -14 178Poland 53 56 -5 215
Total revenue 504 632 -20 2 438
Comparison of revenue in Norway year by year is affected by a currency effect of ‐12MSEK, excluding the currency effect the decline was ‐20%
Interim report January – March 2016
Starting 2016 with a 371 MSEK lower cost base on a yearly basis
20
Improved EBITDA margins due to:‐ Higher cost efficiency
Remaining restructuring costs from previous year’s reorganization
”Other items affecting comp.” is primarily effects from changes to the calculations of pension liabilities
EBITDA by operating segments CommentsJan-Mar Jan-Mar Jan-Dec
SEK M 2016 2015 % 2015Local search 114 65 75 273Voice 28 43 -35 189Other -6 -15 60 -79
Total EBITDA 136 93 46 383EBITDA margin % 27,0 14,7 15,7Items affecting comparabilityRestructuring costs 2 11 73Other items affecting comparability -19 - -2Total adjusted EBITDA 119 104 14 454
Adjusted EBITDA margin % 23,6 16,5 18,6
Interim report January – March 2016
Key financials: Q/Q comparison
21
65
-17-20
5
119136
504502
60
-22-2-8
10493
632577
CapEx Operating cash flow
Net financial items
Change in working capital
Adj. EBITDAEBITDARevenuePrepaid revenue
Q1 2016Q1 2015
1) Cash flow from operating activities according to Q1 report
1
Interim report January – March 2016
Development net debt/EBITDA R12
22
1 211
426
3,2
2,8
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2012 2013 2014 2015 Q12016
Net debt* EBITDA Net debt/EBITDA
*Net debt is equal to net senior debt, i.e excl. convertibles
366
3362390
Remaining convertibles
Q4 2015Q3 2015Q2 2015 Q1 2016
Convertibles converted to shares
Q2 2015 438 779 366Q3 2015 460 317 825Q4 2015 477 240 899Q1 2016 477 240 899
Total number of shares
Interim report January – March 2016
Contents
1) Q1 highlights
2) Strategic update
3) Traffic and product development
4) Financials
5) Summary
Interim report January – March 201623
Summary
Efficiency enhancing activities pays off, profitability increases• Adjusted EBITDA increases 14%, reaching 119 MSEK (104)
• Adjusted EBITDA‐margin 24%
Desktop/Mobile Search ‐17%, reaching 356 MSEK (430)• Q1 2016 compared to Q4 2015 represent a growth of 3%
Measures to reverse the negative trend in digital revenue• Customers: Stabilise customer base (Subscriptions and Google AdWords Sweden)
• Users: 8.1 million visitors/week (new features and updates)
• Internally: Improve culture, reduce staff turn‐over (Nordic Sales, training)
24 Interim report January – March 2016
Q&A