SOLOCAL (EPA:LOCAL) - Solocal - Q3 2019 Activity and Revenues

Transparency directive : regulatory news

21/10/2019 07:00

PRESS RELEASE

Boulogne-Billancourt, 21 October 2019

                      Q3 2019 Digital order intake growth
                Digital order intake growth momentum confirmed
Revenues nonetheless impacted by previous quarters' decrease in order intake

Q3 2019 Digital order intake growth, and Q3 2019 Activity vs. Q3 2018

- Digital order intake: EUR 101 million, +5.3%
- Total order intake: EUR 109 million, -1.6% including a -46.3% decrease in
  Print order intake
- New digital services fully rolled-out during Q3 2019
- Almost 60% of Q3 2019 Digital order intake in subscription mode
- Strong increase in salesforce dynamics and efficiency(2): +40% in weekly
  Digital order intake per sales representative

Q3 2019 Revenues(5) vs. Q3 2018

- Digital revenues: EUR 129 million, -7.5%
- Consolidated revenues: EUR 142 million, -11.1%

2019 Outlook confirmed

- Return to growth of Digital order intake in H2 2019, and stabilised Digital
  order intake in 2019
- Moderate growth of recurring EBITDA in 2019
- Growth dynamics to be pursued over the following quarters

When releasing Q3 2019 revenues, Eric Boustouller, Solocal CEO, said:

"This third quarter 2019 is a key milestone in Solocal's transformation
project. The roll-out of new digital services has enabled us to be back to
growth. Our customers supporting our new services is an evidence that our
strategy, as well as the reworking of our product offer which brings more value
and simplicity, are relevant.

We delivered +5.3% Digital order intake growth vs. Q3 2018. I am delighted to
see that the Solocal 2020 strategic plan, implemented by our teams since
February 2018, is coming to fruition.

Beyond Digital order intake growth, this is a structural shift in our company's
business model, with nearly 60% of Digital order intake in subscription mode
this quarter. Based on these positive dynamics carried by our new products and
the tireless execution of our transformation, we are staying on course and are
confident in the delivery of the announced growth path in forthcoming
quarters."

Quarterly financial statements have not been audited. Financial items presented
in this press release for Q3 2018 are revised in light of the scope of
continued activities as at 30th September 2019.

  1. Order intake, Revenues and Order backlog

Solocal order intake in Q3 2019 is as follows:

In million euros            Q3 2018  Q3 2019   Change
Digital order intake          95.9     101.0    +5.3%
Print order intake            14.9       8.0   -46.3%
Ventes totales               110.8     109.0    -1.6%

Total order intake amount to EUR 109 million in Q3 2019, down -1.6% compared to
Q3 20181. Digital order intake increased by +5.3%, while Q3 2019 Print order
intake are down -46.3% compared to Q3 2018(1).

This +5.3% increase of Digital order intake in Q3 2019 marks the return to
growth of order intake, after a first semester marked by a trend reversal in
Digital order intake (-5% average). This increase is mainly due to the roll-out
of the new Digital services this quarter and the ongoing transformation of the
sales organisation. The second half of 2018 was marked by the implementation of
the restructuring plan.

Regarding Print order intake, customers and users continue to move away from
conventional printed products towards digital. Solocal will cease the Print
business at the end of 2020.

Solocal's performance indicators for Q3 2019 are as follows:

Subscription-based order intake
(as a % of Digital order intake)      Q3 2018  Q3 2019   Change
                                        22.2%   59.2%   +37 pts

Traffic : number of PagesJaunes visits
(in millions)                            429     510     +19.0%

Note : Subscription-based order intake based on order intake after
cancellations

Order intake in subscription mode(3),(4) as a percentage of Digital(3) order
intake amounted to 59% of Digital(3)  order intake and were up +37 points in Q3
2019 compared to Q3 2018(1). Subscription-based order intake(3),(4) mainly
include the Priority Ranking and Presence offers, Websites and Booster Contact.
New digital services Presence and Priority Ranking are rolled out to customers
since July 2019. This growth in subscription-based order intake increases
revenue visibility and is structural to the transformation of our business
model.

PagesJaunes traffic increased by +19% in Q3 2019 compared to Q3 2018. Mobile
visits increased in Q3 2019, in line with global trend.

Revenues for Solocal in Q3 2019 are as follows:

In million euros     Q3 2018   Q3 2019   Change
Digital revenues       139.4    128.9    -7.5%
Print revenues          20.6     13.4   -35.1%
Total revenues         160.0    142.3   -11.1%

Note: Q3 2018 for the scope of continued activities.

Consolidated revenues for the third quarter of 2019 amounted to EUR 142
million, down -11.1% compared to total revenues for the third quarter of 20181.
It breaks down into EUR 129 million Digital revenues and EUR 13 million Print
revenues.

Digital revenues of EUR 129 million in Q3 2019 were down -7.5% compared to Q3
2018(1), due to the slowdown in Digital(1) order intake in previous quarters,
and due to the conversion pattern of order intake into revenues.
Digital order intake for the first 9 months of 2019 represented 34% of revenues
for the same period, up 4 points compared to the first 9 months of 2018. This
reflects an acceleration in the conversion of order intake into revenues, in
line with the transformation of our business model.

Print revenues of EUR 13 million in Q3 2019 are down -35.1% compared to Q3 2018
while customers and users alike continue to move away from printed directories
towards digital media. Print activity accounts for 9.4% of total revenues this
quarter.

Solocal's order backlog (4) as of 30th September 2019 is as follows:

In million euros          30/06/2019   30/09/2019   Change
Digital order backlog        349.3        317.9     -9.0%
Print order backlog           31.0         25.8    -16.8%
Total order backlog          380.3        343.8     -9.6%

Note: Order backlog based on order intake after cancellations.

Total order backlog(4)  amounts to EUR 344 million as of 30th September 2019,
down -9.6% compared to 30th June 2019. This fall is partly due to the strong
decline of the Print business (-16.8% decrease of Print order backlog as of
30th September 2019 compared to 30th June 2019). The Digital order backlog(4)
results from order intake seasonality in Q3 (very low order intake in August)
compared to the almost linear revenue recognition over the quarter.

  2. Other information

At the end of October 2019, Solocal will have paid 86% of salaries and
indemnities planned for the year 2019 in relation to the 2018 restructuring
plan.

In addition, Solocal is implementing its anticorruption compliance program
required under the Sapin II Act of 9th  December 2016 (on transparency, fight
against corruption and modernisation of economic life). In this context,
Solocal has set up a code of conduct, a whistleblowing system and a training
plan for all employees, in order to assert within the group, its 4 main ethical
principles which are trust, integrity, transparency and respect.

2019 Outlook

Solocal confirms the pursuit of Digital order intake growth in Q4 2019 and
stabilisation for the full year 2019, as well as moderate growth of recurring
EBITDA.

Solocal has created structural growth dynamics, to be continued over future
quarters.

Next dates in the financial calendar

The next date in the financial calendar is as follows:

   - Release of 4th quarter 2019 revenues and 2019 full year results: 27th
     February 2020

Notes:

(1) Continued activities
(2) Weekly Digital order intake / sales representative producing in Q3 2019 vs.
Q3 2018, scope excluding ClicRDV, Effilab, Leadformance, Mappy, Ooreka, QDQ,
SoMS and non-significant subsidiaries
(3)Scope excluding ClicRDV, Effilab, Leadformance, Mappy, Ooreka, QDQ, SoMS and
non-significant subsidiaries
(4) Based on order intake after cancellations. Backlog End of Period = Backlog
Beginning of Period + Quarterly order intake - Quarterly revenues
(5) Order intake are converted into revenues on average in 18 months, this
pattern is accelerating month after month pursuant to the transformation of our
business model.

Definitions:
Traffic: Indicator of visits and of access to content in a given period of
time.

Order backlog: Order backlog corresponds to the outstanding portion of revenues
still to be recognised as of 30th September 2019 from order bookings validated
and engaged by customers. Regarding products in subscription mode, only the
current commitment period is taken into account.

Order intake: Orders booked by the sales force, which should translate into the
performance of a service by the Group for its customers.

Solocal - www.solocal.com
We are the local digital partner for companies. Our job: advising and
supporting them to boost their activity thanks to our digital services (Digital
Presence, Digital Advertising, Websites, New Print Solutions). We also provide
users with the best possible digital experience with PagesJaunes, Mappy and
Ooreka, and our partners (Google, Facebook, Apple, Microsoft/Bing, Yahoo!,
etc.). We provide professionals and the public with our high audience services,
geolocalised data, scalable technology platforms, unparalleled order intake
coverage across France, our privileged partnerships with digital companies and
our talents in terms of data, development, digital marketing, etc. We gather
nearly 400,000 companies all over France and 2.4 billion visits on our
services. Solocal moreover benefits from the "Digital Ad Trust Classique" label
for its PagesJaunes and Mappy digital services. To know more about Solocal
(Euronext Paris "LOCAL"): let's keep in touch @solocal

Contacts presse

Charlotte Millet +33 (0)1 46 23 30 00
charlotte.millet@solocal.com

Edwige Druon +33 (0)1 46 23 37 56
edruon@solocal.com

Contacts investisseurs

Julie Gualino-Daly
+33 (0)1 46 23 42 12
jgualino@solocal.com

Alima Lelarge Levy +33 (0)1 46 23 37 72
alelargelevy@solocal.com

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