SOLOCAL (EPA:LOCAL) - Q1 2021 Solocal Revenue

Transparency directive : regulatory news

15/04/2021 18:49

PRESS RELEASE
Boulogne-Billancourt, 15th April 2021

        Revenue in line with Group's expectations down -10% for Q1 2021
                             Customer base stable
                    Churn improved by +3 points vs. Q1 2020

Revenue in line with Group's expectations for Q1 2021

- Revenue (now 100% Digital): EUR106.6 million, i.e. -10.2% vs. Q1 2020(1)
  impacted by the effect of lockdown periods on order intake

- Digital order backlog unchanged: EUR282.7 million as at 31st March 2021
  (-0.5% vs. 31st December 2020)

- Based on order intake(2) already signed, EUR310 million of revenue(7) is
  secured as at 31st March 2021 for the year 2021 vs EUR235 million as at 31st
  December 2020 for the year 2021

- Contribution of the quarter's order intake to revenue for the next 12 months
  : +2.6% in Q1 2021 vs. Q1 2020(6)

Encouraging operational indicators despite the context

- Customer base unchanged(3) as at 31st March 2021 with 314k customers vs 315k
  customers as at 31st December 2020

- 88% of Digital order intake(2) in subscription mode, i.e. +9pts vs Q1
  2020(1)

- Continued churn(4) reduction: 16.7% in Q1 2021 vs 19% over the year 2020(1)
  and 19.7% in Q1 2020

- Almost stable ARPA(5): c; EUR 1,320, -0.8% vs c. EUR1,330 in 2020(1)

- PagesJaunes traffic: -3.9% vs. Q1 2020(vs c. -10% in Q1 2020 vs Q1 2019)

Outlook 2021 unchanged

To date and considering the current health restrictions announced so far in
relation to the Covid-19 health crisis, Solocal confirms its ambitions for the
year 2021, namely:

- Moderate growth in customer base driven by churn reduction and to a lesser
  extent an improvement in customer acquisition

- 2021 EBITDA at EUR120 million for a fully digital business

Arrival of Hervé Milcent, CEO, on 6th April 2021

When releasing revenue of the first quarter of 2021, Pierre Danon, Solocal
Chairman of the Board, said :

"The year 2021 began in a persistently difficult context, marked by new health
restriction measures which logically continued to weigh on our business.
However, we remain aligned with our roadmap and in this first quarter we are
recording encouraging operational indicators with, namely, a stable customer
base and a decrease in our churn. These developments constitute positive steps
given the context and reflect the benefits of the transformation that we are
pursuing month after month. The arrival of Hervé Milcent at our helm will
constitute an additional asset in the management of these changes. It will
enable us to come out stronger from the crisis, with a now 100% digital
activity backed by a subscription model with better visibility on our
business."

Quarterly financial statements have not been audited. Financial items presented
in this press release for Q1 2020 are revised in light of the scope of
continued activities1 as at 31st March 2021.

1. Revenue and order backlog

Reminder: The Print business was discontinued in November 2020 and is restated
as discontinued operations under IFRS 5 in the 2020 Income Statement. Solocal's
revenue consist only of Digital revenue since the year 2020.

Solocal revenue1 in the first quarter 2020 are as follows :

In million euros          Q1 2020   Q1 2021    Change
Digital Revenue            118.8     106.6     -10.2%
Total revenue              118.8     106.6     -10.2%

First quarter 2021 revenue amounted to EUR107 million, down -10% compared to
the first quarter 2020(1) revenue. This decrease in revenue is the direct
consequence of the conversion into revenue of the previous quarters' drop in
Digital order intake(2) linked to the Covid-19 health crisis (more particularly
the effect of the first lockdown in the first half of 2020).

The share of revenue for the quarter relating to order intake already carried
over by automatic renewal stood at 24% compared to 12% in the first quarter of
2020. The weight of those "automatically renewed order intake" in the total
revenue will mechanically keep on growing over the following next quarters. It
will enable increased visibility on revenue while mobilizing the Group's
salesforces on the development of existing customers and the acquisition of new
customers.

In order to illustrate the evolution of new digital services, Digital revenue
is presented in three business lines:

In million euros         Q1 2020   Q1 2021     Change
Connect                     26.2      31.1     +18.5%
Booster                     71.7      59.9     -16.5%
Websites                    20.8      15.7     -24.7%
Total revenue              118.8     106.6     -10.2%

The Booster activity includes services related to digital advertising and
represents 56% of the first quarter of 2021 revenue (Booster Contact, Priority
Ranking, etc). The Connect activity includes Digital Presence services and
represents 29% of the revenue for the first quarter of 2021. Websites represent
15% of the revenue of the first quarter 2021 and encompasses all the ranges of
websites sold (Essentiel, Premium, Privilège). This decrease mainly derives
from a unfavorable basis effect while Q1 websites revenue is line with previous
quarters (Q2, Q3 and Q4 2020). In addition to this, this activity has not
benefited yet from the refocus performed over the last 6 month (digital audit,
optimized production...).

Solocal order backlog as at 31st March 2020 breaks down as follows:

In million euros          31/12/2020   31/03/2021     Change
Digital order backlog          284.2        282.7      -0.5%

The order backlog is flat (-0.5%) as of 31st March 2021 compared to 31st
December 2020. This variation can be explained by a slightly lower value of
order intake recorded in the first quarter of 2021 compared to the revenue
booked over the same period.

The EUR283 million order backlog is expected to convert into revenue to the
tune of 73% over the year 2021 (i.e. over the next nine months of 2021) and 25%
in the year 2022.

Based on management's best estimates, as of 31st March 2021, secured revenue(7)
amounts to EUR310 million for the year 2021 thanks to the revenue already
booked & the order intake already recorded as at this date.

In million euros                 31/03/2020  31/12/2020  31/03/2021
Secured Digital
revenue for current year             361         235         310

Note: for 31/12/2020, secured revenue for the year 2021

2. Operational performance indicators

Solocal's operational performance indicators for the first quarter of 2021 are
as follows:

                                       Q1 2020   Q1 2021   Change

Subscription-based order intake

- as a % of Digital order intake         79%       88%     +9 pts

"Growth KPI" (6)                           -     +2.7%

Traffic : number of PagesJaunes visits -
in million                               479       461      -3.9%

In the first quarter of 2021, 88% of order intake(2) were recorded as
subscription-based products, i.e. an increase of +9 points compared to the
first quarter of 2020. This subscription-based order intake rate has been
experiencing an ongoing ramp-up since the full roll-out of new digital Connect
(previously Presence) and Priority Ranking services in July 2019.
Subscription-based products are pivotal for the transformation of the business
model, as it enables (i) a decrease in churn, while (ii) more importantly, it
fosters the increase in new customer acquisition and cross-selling of existing
clients by freeing up some salesforce time historically devoted to renewal.

Since February 2021, Solocal has been disclosing a "growth KPI"(6), which
corresponds to the contribution of order intake of the quarter to revenue for
the next twelve months. This indicator allows the group to monitor its order
intake conversion into revenue and is up + 2.6% in the first quarter of 2021
vs. the first quarter of 2020. This means that the first quarter of 2021 order
intake helped secure + 2.6% in revenue over the upcoming 12 months compared to
the order intake recorded in the first quarter of 2020.

PagesJaunes traffic is down -3.9% in the first quarter of 2021 compared to the
first quarter of 2020 as it is impacted by the health crisis as well as by the
lockdown and curfew measures which penalized the entire French economy. As a
reminder, the first effects of investments aimed at strengthening the
PagesJaunes platform are expected to take place from the second half of 2021.

Solocal customer base(3) evolved as follows in the first quarter of 2021:

                               Q1 2020    FY 2020    Q1 2021    Change
Q1
Customer base - BoP (a)           349k       349k       315k
+ Acquisitions                      9k        32k         9k          +1k
- Churn                           -23k       -82k       -14k          +9k
+ Winbacks                          3k        16k         4k          +1k
Customer base - EoP (a)           338k       315k       314k
Net change                        -11k       -34k        -1k
Churn(b) - in %                 -19.7%     -19.0%     -16.7%        +3pts
Digital ARPA (c)              c. 1,380   c. 1,330   c. 1,320

Note : BoP = Beginning of Period / EoP = End of Period

The Group's customer base(3) is stable at 314k customers, with a reduction of
c. 1,000 customers as at 31st March 2021 compared to 31st December 2020, i.e. a
decrease of approximately -0.3% over the quarter. This quasi-stability
constitutes a clear progress with 9,000 fewer customers lost than in the first
quarter of 2020. This decrease in the number of lost customers can be explained
(i) by the setting-up of a team dedicated to customer retention in spring 2020,
(ii) by the first effects of the subscription model, which has been rolled out
since summer 2019 and which tends to limit customer attrition, and (iii) by
improving the product offer and gradually implementing solutions aimed at
placing customer satisfaction at the heart of the Group's strategy.

The Group's net churn rate(4) thus stands at 16.7% in the first quarter of
2021, i.e. a drop of more than 2pts compared to the 19% churn rate in 2020 and
a drop of 3pts compared to the first quarter of 2020 (19,7%), thus reflecting
the first effects of the retention measures detailed above.

Group ARPA(5) is almost stable at c.EUR1,320 as at 31st March 2021 (based on a
last 12 months average) compared to c. EUR1,330 in 2020. This trend can be
explained by the adverse health environment and by the measures penalizing the
French economic activity this year, offset by an upsell and cross-sell
dynamic.

3. Outlook 2021 unchanged

To date, based on improved operational indicators and the restrictive measures
related to the Covid-19 health crisis announced so far, the Solocal Group
confirms its 2021 objectives.

Indeed, Solocal aims at a moderate growth in customer base and a EUR120 million
EBITDA for 2021.

4. Other information

As previously announced, Hervé Milcent has been appointed as Chief Executive
Officer of Solocal on 6th April 2021.

Furthermore, as of 31st March 2021, Solocal had disbursed a cumulative amount
of EUR214 million (out of a total estimated amount of EUR225 million), in
salaries and compensation as provided by the 2018 transformation plan and its
extension in 2019; i.e. 98% of the amount planned. There is still EUR5 million
to be disbursed over the rest of 2021, under this transformation plan.

Next major dates in the financial calendar

The next financial calendar dates are as follows:

- Combined General Meeting on 3rd June 2021
- Publication of first half 2021 results on 28th July 2021

Notes :
(1) Comparable scope. 2020 figures are restated from the figures of the QDQ and
Mappy, subsidiaries sold on 28th February 2020 and 30th October 2020
(2) Digital order intake, scope Solocal SA, based on order intake net of
cancellations.
(3) The customer base now represents the number of customers recorded at a
defined moment (Beginning or End of Period) and no longer the average number of
customers over the last twelve months. Group scope (excluding non-significant
subsidiaries) and restated from QDQ & Mappy, which were subsidiaries sold
during fiscal year 2020.
(4) Churn: Number of lost customers (net of winbacks) over the last twelve
months (LTM) divided by number of BoP customers
(5) ARPA calculated as LTM revenue divided by the average customer base over
the past 12 months, scope restated from QdQ and Mappy
(6) Based on order intake from 15th December in year n to 15th March in year
n+1. This KPI does not imply a similar trend in 2021 revenue.
(7) Secured revenue including Vocal and Offline activities but excluding Mappy
& QdQ

Definitions

Order intake : Orders recorded by the salesforce, that gives rise to a service
performed by the Group for its customers

Order backlog : The order backlog corresponds to the outstanding portion of
revenue yet to be recognised as at 31st March 2020 from order bookings such as
validated and committed by customers. For subscription-based products, only the
current commitment period is considered

Traffic : Indicator of visits and of access to the content over a given period
of time

ARPA : Average Revenue per Advertiser, based on the last twelve months order
intake for Solocal SA

Winback : Acquisition of a customer who has been lost in the previous 12
months

Churn : Number of lost customers out of number of customers at Beginning of
Period

Growth KPI : Indicator to monitor the evolution of the contribution of order
intake for a given period to revenue for the following 12 months

EN - About Solocal - www.solocal.com

Solocal is the digital partner for all local companies in France, from VSEs, to
SMBs or Large Companies with networks. Our job; vitalize local life. We strive
every day to unveil the full potential of all companies by connecting them to
their customers thanks to our innovative digital services. We advise over
314,000 companies all over France and support them to boost their activity
thanks to our digital services (Relational Presence, Websites and Digital
advertising). We also bring users the best possible digital experience with
PagesJaunes, and Ooreka, and our GAFAM* partners.
We provide professionals and the public with our high audience services,
geolocalised data, scalable technology platforms, unparalleled commercial
coverage across France, our privileged partnerships with digital companies and
our talents in terms of data, development and digital marketing. Solocal
moreover benefits from the "Digital Ad Trust" label. To know more about Solocal
(Euronext Paris "LOCAL"): let's keep in touch @solocal
*GAFAM : Google, Microsoft/Bing,, Facebook, Apple, Amazon

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

Colin Verbrugghe
+33 (0)1 46 23 40 13
cverbrugghe@solocal.com

Xavier Le Tulzo
+33(0)1 46 23 39 76
xletulzo@solocal.com

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