The perils of Yellow Pages: Solocal Group revenues decreased 5.6% for the quarter ended September 30th. Print revenues declined 15.9% and Internet revenues grew by 2.0%. Accordingly the company is reducing its 2013 outlook to approximately Euro 1bn.
Internet business represents 63% of Group’s revenues and with low growth of +2.0% on a like-for-like basis (increase of 1.7% on reported figures) over the first nine months of 2013 impacted by the slowdown in display and search. The decrease in Printed directories is in line with management’s expectations and stands at -15.9% on a like-for-like basis8 (down 17.1% on reported figures) over the first nine months of 2013 thanks to an appropriate pricing policy.
The Group’s gross operating margin of 328.8 million euros over the first nine months of 2013 is down -8.3% on a like-for-like basis (down 9.1% on reported figures) compared to 2012: the drop in gross operating margin is affected by the revenues decrease and the disposal of Editus partially offset by cost discipline on Paper-Print-Distribution and personnel. The gross operating margin amounts to 43.9% as of 30 September 2013 compared to 45.2% as of 30 September 2012, penalised by the absence of non-recurring income and by the lower Internet margin following the slowdown in display and search.
The Group’s operating income, down -12.5% over the first nine months of 2013 compared to 2012, reached 282.6 million euros. The decrease in operating income mainly results from the decline in gross operating margin and the increase in depreciation and amortisation in line with the increase in Internet investments.
Audiences on the Group’s websites (excluding 123people) grew by +8.2% in the first nine months of 2013 compared with 2012, thanks in particular to the strong growth of 53.0% in mobile Internet visits. At the end of September 2013, Solocal Group applications (primarily PagesJaunes and Mappy) had been downloaded more than 28 million times across all smartphones and tablets in France.
the Group’s websites continue to enjoy strong audiences in the 3rd quarter of 2013: 20 million unique visitors7 on the fixed Internet and 6 million unique visitors7 on the mobile Internet in September 2013 (respectively the 6th and 7th Group which websites are the most visited in France).
Jean-Pierre Remy, Chairman and CEO stated: “The Group’s 3rd quarter results are in line with our expectations in a deteriorated environment. In this context, we have achieved important steps of our digital transformation program: very strong growth of +25%2 of our fixed and mobile Internet traffic towards professionals, enrichment of our offers, commercial agreement signed with Google and on-going verticalization of our sales approach. 2014 will see an acceleration of the transformation program and investments to enable the Group to return to growth in 2015. One of our priorities is both to sustain the very dynamic growth of our traffic and to better monetize and market our digital audiences, one of the challenges of Digital 2015.”