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Preliminary Resultsfor the year ended 31 March 2007
22 May 2007
2
Disclaimer
During this presentation we will be discussing Yell’s business outlook and making certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially.
We urge you to read the Risk Factors and cautionary language in the annual report posted on our website.
We also draw your attention to our press release which is posted on our website, for more information on the risks and uncertainties.
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John Davis, CFO
John Condron, CEO
John Condron, CEO
Agenda
Financials
Introduction
Strategic update
FinancialsJohn Davis CFO
5
Headline results
Adjusted Earnings figures stated before exceptional items and amortisation throughout this presentation
Year ended 31 March 2007 £m Actual
Growth at constant
FX
Revenue 2,075.1 32.6%
Adjusted EBITDA 677.5 39.3%
Operating cash flow 541.6 24.2%
Cash conversion79.9%
Free cash flow before refinancing costand exceptionals
252.2
Adjusted diluted earnings per share up 8.2% 35.5p
Underlying adjusted diluted earnings per share
37.1p 13.1%
Total dividends per share up 11.8% 17.1p
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The Yell Group
Yell UK 36%
Yell Publicidad 22%
Adjusted EBITDA margin 32.6%
Yellow Book USA46%
Yell Publicidad 21%
Yell UK 33%
FY 07 revenue pf* FY 07 EBITDA pf*
Yellow Book USA42%
* Proforma figures including Yell Publicidad on a LTM basis
Organic revenue growth 6.8%
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FY 03 FY 04 FY 05 FY 06 FY 07
Printed products Yell.com and other
FY 03* FY 04* FY 05 FY 06 FY 07
Yell UK
Revenue (£m) Total adjusted EBITDA (£m)
36.8 36.7 34.9 35.0 35.1
Adjusted EBITDA margin %
226 233 232 245
* Figures reported under UK GAAP
CAGR 4.0%
615 635 664 699 720
-4.4 -4.8 -3.3 -2.9 -2.8
Effective Yellow Pages price reduction %
253
CAGR 2.9%
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FY 03* FY04* FY 05 FY 06 FY 07
19.4 23.0 25.9 28.0 29.3
Adjusted EBITDA margin %
Yellow Book USA
Revenue ($m) Total adjusted EBITDA ($m)
FY 03 FY 04 FY 05 FY 06 FY 07
Existing Acquired
151
* Figures reported under UK GAAP
CAGR 26%
775940
1,149
1,636
1,932
216
297
458
566
CAGR 39%
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5
1.6
8.3 8.1
3.2
18.1
10
Same marketgrowth
New launches Internet Acquisitions Growthbefore FX
Exchangeimpact
Total growth
Yellow Book USA revenue growth
Organic Growth 9.8%
Contribution to revenue growth (%)
10
Yellow Book USA margins
Adjusted EBITDA margin of new directories since launch
6% 10% 8% 76% 100% 57 books 92 books 82 books 738 books969 books
Share of revenue FY 07
18.6%
25.6%
33.1%29.3%
-9.1%
1 Year 2-3 Years 4-5 Years 6+ Years All Directories
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Yell Publicidad
£m
8 monthssince
acquisitionLast 12 months
Total Revenue 340.9 470.7
Adjusted EBITDA 127.8 158.4
Adjusted EBITDA margin 37.5% 33.6%
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90
211
79678
252181
71542
46
AdjustedEBITDA
Workingcapital
Capex Operatingcash flow
Cash interest Cash tax Free cashflows beforeexceptionals
Refinancingcosts and
exceptionals
Free cashflows
Cash
Group cash conversion 80%
£m
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Analysis of debt
At 31 March 2007 £m
Net loans and other borrowings (3,729.3)
Cash 66.7
Net debt (3,662.6)
41% $ denominated 37% £ denominated 22% € denominated
c.96% of debt fixed until June 2009 falling to c.50% until March 2011
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Effective tax rate
Effective tax rate as % of adjusted PBT of £419 million 33%
Allowable amortisation (8%)
Losses (1%)
Other tax allowable items (including exceptionals) (5%)
Cash tax paid in year as a % of adjusted PBT 19%
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Adjusted diluted earnings per share
EPS
Contribution
to growth
Actual EPS 35.5p 8.2%
TPI equity placing 0.4p 1.3%
FX movement 1.2p 3.6%
Underlying EPS 37.1p 13.1%
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Refinancing and exceptional costs
£m Cash effectP&L
exceptional
Refinancing
Rolled up interest 46.7
Write off of deferred financing fees 13.8
High yield bond redemption premium 22.5 22.5
Restructuring
US and Spain post acquisition restructuring costs
2.1 14.7
Brazil book loss 6.4
Total 71.3 57.4
Tax on the above (19.4)
Spanish deferred tax movement (46.6)
Net post tax P&L credit (8.6)
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Operations guidance
UK– Revenue growth c 3% driven entirely by Yell.com
– Adjusted EBITDA margin flat
US– Organic revenue growth c 3% plus $20m revenue from
acquisitions to date
– Adjusted EBITDA margin flat (29%)
Yell Publicidad (see next slide)
– Revenue growth of around 5% on continuing LTM revenue (€650m net of disposals) plus €20m from acquisition
– Adjusted EBITDA margins c 37%
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Revenue Proforma €m Guidance
Spain 509 4% growth
Latin America 141 7% growth
Continuing 650 5% growth
Discontinued 51
Acquired €20m
Reported 701
Adjusted EBITDA Margin 34% 37%
Yell Publicidad guidance
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Group guidance at constant FX
Revenue growth around 9% (4% organic)
Adjusted EBITDA margins flat
Cash conversion 80% to 85%
Cost of debt 7%; 96% fixed
Tax rate around 31% of adjusted PBT; cash tax rate around 20% of adjusted PBT
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Q1 dilution due to phasing
UK: strong weighting of investment in H1– Q1 adjusted EBITDA decline of 5%
US: heavy rescheduling of revenue from Q1 to latter quarters – around $20 million
Yell Publicidad: Q1 ⅛ annual adjusted EBITDA versus ¼ financing cost - margins less than 30%
Q1 EPS dilution: weaker dollar approaching $2 : £1 versus $1.83 : £1 last year
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Financial summary
FY 07 in line with expectations
Dividends up in line with underlying earnings
Strong Group financial characteristics including good growth, high margins and strong cash generation
Strategic UpdateJohn CondronCEO
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Yellow Book acquired 1999
McLeod acquired 2002
TransWestern acquired 2005
Platform acquisitions, in-fills and launches since 1999
Yellow Book USA – 970 markets
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Yellow Book USA revenue drivers
363 386
455489
692
FY 03 FY 04 FY 05 FY 06 FY 07
Unique advertisers (000s) ARPA ($)
2,135
2,434 2,4772,690 2,694
FY 03 FY 04 FY 05 FY 06 FY 07
Printed directories only
70 70 71 70 69Retention %
Unique advertisers up 41.5%
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Yellowbook.com revenue drivers
Note: Includes Worldpages.com acquired with TransWestern in July 2005* Revenue per average searchable advertiser
Searchable advertisers down 2.8%
Visitors up 154.2%
391 380
FY 06 FY 07
2.4
6.1
FY 06 FY 07
Searchable advertisers
at 31 March (000s)
VisitorsMarch (m)
123
178
FY 06 FY 07
RASA* ($)
RASA up 44.7%
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US competitive forces
Over-capacity in directories
Companion directories
Incumbents launching independent directories
Pricing
Independent start-ups
Sustainability of this level of competition in doubt
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Yellow Book USA initiatives
Sharpening focus on competition– Retain best sales people; retune products; refine sales
techniques
Driving usage in print and online– Investment in brand
– Print and online usage up
– Monetise usage
Expansion of footprint continues– Well placed for potential consolidation
Yellowbook.com development
Positioning for competitive shift and opportunities
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UK revenue drivers – win and keep
* Unique print advertisers only
Total unique advertiserslive at 31 March (000s)
Yell.com searchable advertisers
at 31 March (000s)
37 42
FY 03* FY 04* FY 05* FY 06 FY 07
499 492
78 77 75 76 76 Retention %
478480451
Total unique advertisers down 1.4%Non-print only advertisers up 13.5%
75103
196174
141
FY 03 FY 04 FY 05 FY 06 FY 07
Non-print only
Up 12.6%
462 450
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UK revenue drivers – grow
1272 1237 12811341 1335
FY03 FY 04 FY 05 FY 06 FY 07
-4.4 -4.8 -3.3 -2.9 -2.8Effective Yellow Pages price
reduction %Down 0.4%
Print ARPA (£)
378
518
FY 06 FY 07
Yell.com RASA* (£)
Up 37.0%
6.87.6
FY 06 FY 07
Unique users
of Yell.comMarch (m)
Up 11.8%
* Revenue per average searchable advertiser
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Yell UK initiatives
Driving usage – Advertising campaign
– New Yell.com maps, verticals, home page
– Enhanced Yell.com-by-mobile
Growing volumes– RPI-0% opportunity – ground work
– Retention – Proven Value
– Yell.com online-only prospecting
– 118 24 7 growing call volumes
Monetising usage– Up-sell – print and online
– Pay per performance trials
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Yell Publicidad initiatives
Back to basics– Driving usage – advertising
– Rationalisation of products
– Simplification of rate card
– Targeting customers
Synergies a year early – Print, paper, pre-press
Portfolio – Non-core businesses
– Disposal of Brazil
– Expansion in Argentina
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Priorities for FY 08
Yellow Book USA - focus on competing intough market
Yell UK - marketing and sales under RPI-0%
Yell Publicidad - Back to Basics
Investment in brands Channel neutral
Win, keep and grow
Investor Relations: Jill Sherratt +44 (0)118 950 6984
www.yellgroup.com
Yell, Queens Walk, Oxford Road, Reading, Berkshire RG1 7PT
™Trade mark of Yell Limited