- Digital revenues grew 12.5% year-over-year to reach
$127.8 million for the three-month
period ended September 30, 2015. For
the third quarter of 2015, digital revenues represented 60.7% of
total revenues.
- EBITDA adjusted for restructuring and special charges
("Adjusted EBITDA"), totaled $63.8
million for the three-month period ended September 30, 2015, as compared to $75.3 million the year prior. The Adjusted EBITDA
margin reached 30.3% for the third quarter ended September 30, 2015, as compared to 34.5% for the
same period last year.
- The Company acquired 27,200 new customers during the
twelve-month period ended September 30,
2015, up from 20,200 new customers the year prior. The
customer renewal rate remained stable year-over-year at 85%.
- Total organic digital visits grew 11.8% year-over-year to reach
123.1 million for the three-month period ended September 30, 2015. This compares to 110.2
million visits made to the Company's network of digital properties
over the same period last year.
- The Company anticipates making a total principal mandatory
redemption payment of $66.1 million
on its 9.25% Senior Secured Notes (the "Notes") on November 30, 2015. Principal mandatory redemption
payments will total $100.3 million in
2015, reducing the outstanding balance of Notes to $406.7 million as at November 30, 2015.
MONTREAL, Nov. 11, 2015 /CNW Telbec/ - Yellow Pages Limited
(TSX: Y) (the "Company") released its operational and financial
results today for the third quarter ended September 30, 2015, announcing continued progress
in its transformation into Canada's leading local digital company.
"We are on track to returning Yellow Pages to revenue and EBITDA
growth in 2018," said Julien Billot,
President and Chief Executive Officer of Yellow Pages. "With
246,000 customers purchasing our marketing solutions, Yellow Pages
is best positioned to champion Canada's local digital economy. We will
continue to actively leverage our unique market positioning to
empower Canadian users and merchants and provide them with
effective offerings to interact and transact in an evolving digital
marketplace."
Third Quarter 2015 Financial Results
On a consolidated
basis, revenues for the three-month period ended September 30, 2015 totaled $210.6 million. This represents a year-over-year
decline of 3.6% relative to revenues of $218.4 million as at the same period last
year.
Digital revenues grew 12.5% year-over-year to total $127.8 million for the three-month period ended
September 30, 2015, as compared to
$113.6 million the year prior. Growth
in digital revenues was driven by the acquisition of the
ComFree/DuProprio Network ("CFDP") on July
1, 2015, in addition to accelerated customer acquisition and
growth in digital spending among renewing customers. For the
quarter ended September 30, 2015,
digital revenues represented 60.7% of total revenues, up from 52%
during the same period last year.
Print revenue decline rates continue to show signs of
stabilization. Print revenues decreased 21% year-over-year to reach
$82.8 million for the three-month
period ended September 30, 2015. The
stabilization in print revenue decline rates continues to be
sustained by content enhancement and pricing initiatives geared at
encouraging renewal of print advertising spending among
customers.
Adjusted EBITDA totaled $63.8
million for the three-month period ended September 30, 2015, as compared to $75.3 million the year prior. Adjusted EBITDA for
the third quarter of 2015 was principally impacted by revenue
pressure and a change in product mix, partly offset by benefits
realized from cost saving initiatives. The Adjusted EBITDA margin
for the third quarter of 2015 reached 30.3%, as compared to 34.5%
for the same period in 2014.
"The Return to Growth Plan has strengthened the Company's
financial profile," said Ginette Maillé, Chief Financial Officer of
Yellow Pages. "Long-term, sustainable growth in digital revenues is
being supported by accelerated customer acquisition and an enhanced
merchant offering, as well as Yellow Pages' growing presence within
new search verticals and national channels. Complemented by a
reduction in investment spending and the deployment of cost saving
initiatives, declines in EBITDA are diminishing and helping support
free cash flow generation, debt repayment and a stronger capital
structure."
Net earnings for the third quarter of 2015 reached $13.2 million, as compared to $26.5 million for the same period last year,
principally impacted by lower Adjusted EBITDA and higher
restructuring and special charges. For the third quarter ended
September 30, 2015, the Company
recorded basic earnings per share of $0.49. This compares to basic earnings per share
of $0.98 for the same period last
year.
Free cash flow for the three-month period ended September 30, 2015 totaled $34.6 million, as compared to $37.6 million during the same period in 2014. The
change in free cash flow is mainly attributable to lower Adjusted
EBITDA, partly offset by net income taxes received of $6.9 million following the receipt of a
previously announced tax settlement. This compares to net income
taxes paid of $7.1 million during the
third quarter of 2014.
Net debt decreased to $455.8
million as at September 30,
2015. This compares to net debt of $494.1 million as at December 31, 2014. The Company will make a
$66.1 million principal mandatory
redemption payment on the Notes on November
30, 2015 (the "November Payment"), bringing total principal
mandatory redemption payments in 2015 to $100.3 million. Following the November Payment,
the Company will hold $406.7 million
of Notes outstanding, having repaid $393.3
million since the Notes' inception on December 20, 2012.
Operational Update
"Enhancements made to Yellow Pages'
consumer and merchant value proposition are allowing us to deliver
a strengthened operational and financial profile," continued Mr.
Billot. "Our network of media properties is hosting richer, more
verticalized content and user experiences. Coupled with accelerated
customer acquisition and an improved end-to-end customer
experience, we have grown adoption and usage of our digital
properties, while significantly reducing declines in our customer
count. These achievements are key drivers, and thereby bring us
closer, to returning Yellow Pages to revenue and EBITDA
growth."
Strengthening its Media Assets
- Total digital visits, which measures the number of visits made
across the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411,
Bookenda and dine.TO online and mobile properties, grew to 123.1
million for the three-month period ended September 30, 2015. This represents a
year-over-year growth of 11.8% relative to 110.2 million visits
made on the Company's network of digital properties during the same
period last year.
- Yellow Pages owns one of Canada's richest and most comprehensive
databases of local information. YP's network of digital properties
hosts over 1.8 million business listings, alongside a growing base
of diversified editorials to help Canadians discover their
neighbourhoods. Recognizing the richness of Yellow Pages' content,
Apple Maps has started syndicating YP's business information across
its Canadian search engine results pages. Syndicated information
will include addresses, phone numbers, hours of operations,
geo-coordinates, website URLs, photos, ratings and reviews. Yellow
Pages will also receive brand attribution on Apple Maps, helping
promote increased adoption of YP's digital properties and enhanced
return on investment for merchants advertising on the Company's
media.
Enhancing its Customer Value Proposition
- The Company's customer count totaled 246,000 as at September 30, 2015, as compared to 260,000 as at
the same period last year. This represents a customer count decline
of 14,000 during the twelve-month period ended September 30, 2015, a significant improvement
from a customer count decrease of 23,000 the year prior.
- Customer acquisition for the twelve-month period ended
September 30, 2015 totaled 27,200, an
acceleration relative to 20,200 the year prior. Sales incentive
programs, alongside an enhanced customer relationship management
platform, a growing acquisition sales team and the introduction of
the Presence suite of digital solutions, have played a key role in
accelerating customer acquisition during seasonally slower sales
periods.
- For the twelve-month periods ended September 30, 2015 and 2014, renewal among Yellow
Pages' customers remained stable at 85%. The Company's customer
renewal rate continues to land ahead of internal expectations,
supported by the delivery of systems, processes and technologies
that enhance customers' sales, service and digital fulfillment
experience.
Gaining Efficiencies
- As the Company advances in its digital transformation and
strengthens its offerings to audiences and merchants Canada-wide, material interdependencies
between Yellow Pages' information technology, strategy and
marketing functions have been created. In addition, legacy systems
and platforms are in the process of being decommissioned to best
respond to the Company's growing digital operations. In light of
these dynamics, and to promote continued success in the execution
of its Return to Growth Plan, Yellow Pages has undertaken a
comprehensive organizational review (the "Corporate Realignment")
to build a leaner, agile and more collaborative organization. The
Corporate Realignment reduced the Company's workforce by
approximately 300 during the third and fourth quarters of 2015,
principally affecting roles that have been integrated within other
functions or that are no longer aligned with Yellow Pages' digital
reality.
Conference Call
Yellow Pages Limited will hold an
analyst and media call at 2 p.m. (Eastern
Time) on November 11, 2015 to
discuss third quarter 2015 results. The call may be accessed by
dialing (416) 340-2216 within the Toronto area, or 1 866 223-7781 outside of
Toronto.
The call will be simultaneously webcast on the Company's website
at
https://corporate.yp.ca/en/yellow-pages-news/events/2015-third-quarter-earnings-release/
The conference call will be archived in the Investors section of
the site at
https://corporate.yp.ca/en/investors/financial-events-presentations/
A playback of the call can also be accessed from November 11 to December 12, 2015 by dialing (905)
694-9451 within the Toronto area,
or 1 800 408-3053 outside of Toronto.
The conference passcode is 9361319.
About Yellow Pages Limited
Yellow Pages Limited (TSX:
Y) is a Canadian digital media and marketing solutions company that
supports local economies by helping neighbourhood businesses reach
new customers and foster stronger relationships with existing
clients through its various media and products. Yellow Pages holds
some of Canada's leading local
online properties including YP.ca™, RedFlagDeals.com™,
Canada411.ca, Bookenda.com, dine.TO, DuProprio.com,
ComFree.com and YP NextHome. The Company also holds the YP, YP
Shopwise, YP Dine, RedFlagDeals, Canada411, Bookenda, DuProprio,
ComFree and YP NextHome mobile applications and Yellow Pages™
print directories. In addition, Yellow Pages is a leader in
national digital advertising through Mediative, a division of
Yellow Pages devoted to digital marketing and performance media
services for national-scale agencies and customers. More at
www.corporate.yp.ca.
Caution Concerning Forward-Looking Statements
This
press release contains forward-looking statements about the
objectives, strategies, financial conditions, results of operations
and businesses of the Company. These statements are forward-looking
as they are based on our current expectations, as at November 11, 2015, about our business and the
markets we operate in, and on various estimates and assumptions.
Our actual results could materially differ from our expectations if
known or unknown risks affect our business, or if our estimates or
assumptions turn out to be inaccurate. As a result, there is no
assurance that any forward-looking statements will materialize.
Risks that could cause our results to differ materially from our
current expectations are discussed in section 6 of our November 11, 2015 Management's Discussion and
Analysis. We disclaim any intention or obligation to update any
forward-looking statements, except as required by law, even if new
information becomes available, as a result of future events or for
any other reason.
Financial
Highlights
|
(in thousands of
Canadian dollars - except percentage and per share
information)
|
|
|
|
|
|
|
|
|
|
|
|
For the
three-month periods
ended September 30,
|
For the nine-month
periods
ended September 30,
|
Yellow Pages
Limited
|
2015
|
2014
|
2015
|
2014
|
|
|
|
|
|
Revenues
|
$210,593
|
$218,427
|
$621,266
|
$662,209
|
Adjusted
EBITDA1
|
$63,810
|
$75,262
|
$196,189
|
$251,144
|
Adjusted EBITDA
margin1
|
30.3%
|
34.5%
|
31.6%
|
37.9%
|
Net
earnings
|
$13,155
|
$26,542
|
$55,189
|
$93,315
|
Basic earnings per
share
|
$0.49
|
$0.98
|
$2.07
|
$3.43
|
Cash flow from
operating activities
|
$54,287
|
$57,208
|
$155,149
|
$125,941
|
Free cash
flow1
|
$34,625
|
$37,641
|
$96,896
|
$76,426
|
Non-IFRS Measures1
In order to provide a
better understanding of the results, the Company uses the term
Adjusted EBITDA, defined as income from operations before
depreciation and amortization and restructuring and special
charges. Management believes this measure is reflective of ongoing
operations. This term is not a performance measure defined under
IFRS. Adjusted EBITDA does not have any standardized meaning and is
therefore not likely to be comparable to similar measures used by
other publicly traded companies. Management believes Adjusted
EBITDA to be an important measure. As well, free cash flow is a
non-IFRS measure generally used as an indicator of financial
performance. It should not be seen as a substitute for cash flow
from operating activities. Free cash flow is defined as cash flow
from operating activities, as reported in accordance with IFRS,
less an adjustment for capital expenditures. Free cash flow is not
a standardized measure and is not comparable with that of other
public companies.
SOURCE Yellow Pages Limited