SOLOCAL (EPA:LOCAL) - Solocal - Letter to shareholders

Transparency directive : regulatory news

14/09/2020 08:00

Boulogne-Billancourt, 14 September 2020

Dear shareholders,

During our last General Assembly, you approved by a large majority the
financial structure strengthening plan. I have already had the opportunity to
thank you for this support, which is decisive for the future of our Company and
the sustainability of its approximately 2,500 jobs. Thanks to you, the risk of
a new redundancy plan in an unexpected health crisis context is now over.

Henceforth, we have a financial solution which will allow us to cut our debt by
almost half, but also and above all, to ensure the immediate cash injection,
needed to consider the future with confidence and enhance our position as a
French champion of digital marketing.

We still have one more step to take together to meet this challenge: bringing
to success the rights issue with Preferential Subscription Rights (PSR), which
starts as of September 15th, 2020.

Although the transaction is already back stopped by our creditors, your
involvement remains essential. Financially speaking, beyond the reduction of
our annual financial interests, from the EUR45M to EUR20M, your commitment
would allow us to get a haircut of up to EUR14M on the reimbursement of the
bond and an immediate reimbursement of EUR15M of RCF credit lines. Finally,
your participation would lead to a new equity set up, while keeping the biggest
part for the historical shareholders, which you are part of.

Moreover, I am convinced that this operation is a relutive occasion to take
advantage from the creation of value at the heart of the transformation of our
Group. This transformation is now almost accomplished. Our offer is diversified
and 100% digital focused. It makes us ready to take full advantage of the
opportunities related to local businesses increased digitization appetite. More
than 335,000 companies - out of 4.9 million local companies classified in
France - already trust us: the potential development of this portfolio is
considerable!

Our current subscription-based revenue model ensures visibility and recurrence
of valuable revenue, especially in times of economic crises such as the one we
are facing this year. It is also a great operational leverage to develop the
added value we bring to our existing customers and to acquire new ones. This
will enable us to quickly resume with a sustainable results improvement
dynamic.

And last but not least, I think it is really essential that we rely on our top
fifty managers, competent, fully committed to our new strategy, and focused on
customer loyalty and satisfaction.

As you see, we are now on our way to meet the reasonable objectives that we
have targeted in terms of both growth and profitability: an average annual
growth of 8% per year for the period 2020-2023 to reach EUR560M in revenues and
an EBITDA of EUR190M by the end of this period.

Considering all these features, I hope that we can count on your participation.
As a shareholder, you are entitled, for each share held, to one free share and
one preferential subscription right that will enable you to subscribe, before
September 29th, to new shares for EUR0.03 per share, on a basis of 281 new
shares for 19 preferential subscription rights.

Aiming to provide you with the most accurate information on the transaction, a
dedicated landing page has been posted on our investor site solocal.com at the
address https://www.solocal.com/augmentation-de-capital-2020 where you can read
the operation terms and conditions and watch videos detailing the rationale of
supporting Solocal today. We also stand available to answer all your questions
on the 0805 650 064, toll-free number.

Once again, I would like to share with you my full confidence in the merits of
this rights issue, which will enable your company to overcome the ongoing
health crisis and to be ideally positioned to seize the huge opportunities of
digital marketing.

In summary, I hope that this operation will win your support and that many of
you will be committed to support us, as of September 15th, to build the future
Solocal and a new equity story that creates value for all our shareholders.

Thank you in advance for your cooperation and support.
Yours sincerely,

Pierre DANON

Chairman of the Board of Directors

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SOLOCAL (EPA:LOCAL) - Solocal - Letter to shareholders

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