- Digital revenues for the year ended December 31, 2015 grew 9.8% year-over-year to
reach $486.3 million, representing
58.6% of total revenues. For the fourth quarter ended December 31, 2015, digital revenues grew
10.5% year-over-year to total $129.2
million, representing 62% of total revenues.
- EBITDA adjusted for restructuring and special charges
("Adjusted EBITDA") totalled $260.7
million in 2015, as compared to $316
million in 2014. The Adjusted EBITDA margin reached 31.4% in
2015, down from 36% the year prior. Adjusted EBITDA remained
relatively stable in the fourth quarter ended December 31, 2015 at $64.5
million, as compared to $64.8
million the year prior. The Adjusted EBITDA margin during
the fourth quarter of 2015 also remained stable at 30.9%, as
compared to 30.1% the year prior.
- Yellow Pages made total principal mandatory redemption payments
on its 9.25% Senior Secured Notes (the "Notes") of
$100.3 million in 2015, reducing its
outstanding balance to $406.7 million
as at December 31, 2015. Since the
Notes' inception on December 20,
2012, the Company repaid a total principal of $393.3
million on the Notes.
- The Company's customer count reached 245,000 customers as
at December 31, 2015, as compared to 256,000 customers as at
the same time last year. Yellow Pages acquired 30,800 new customers
during the twelve-month period ended December 31, 2015, up from 22,100 new customers
in 2014, in line with the Company's previously stated guidance of
30,000 new customers in 2015. The customer renewal rate also saw
improvements, growing from 84% in 2014 to 85% for the twelve-month
period ended December 31, 2015.
MONTREAL, Feb. 11, 2016 /CNW Telbec/ - Yellow Pages Limited
(TSX: Y) (the "Company") released its operational and financial
results today for the year and fourth quarter ended December 31, 2015, demonstrating timely and
successful execution of its Return to Growth Plan.
"We are seeing tangible signs of progress related to the
implementation of our Return to Growth Plan," said
Julien Billot, President and Chief
Executive Officer of Yellow Pages. "We are on track to
stabilizing our customer count, a milestone supported by
accelerated customer acquisition and a strong customer renewal
rate. With over $486 million in
digital revenues, Yellow Pages has now grown to become one of
Canada's most notable digital
advertising companies, developing rich and diversified media and
marketing solutions to best connect Canadian consumers and local
businesses."
Full Year 2015 Financial Results
Revenues in 2015
decreased 5.4% year-over-year to reach $829.8 million, as compared to $877.5 million for the same period last year.
Digital revenues grew 9.8% year-over-year to total $486.3 million in 2015, as compared to
$442.8 million the year prior. For
the twelve-month period ended December 31,
2015, digital revenues represented 58.6% of total revenues,
up from 50.5% in 2014.
Growth in digital revenues remains driven by the accelerated
acquisition of digital customers, as well as continued growth in
digital spending among the Company's renewing customers.
Digital-only customers grew to 54,500, or 22% of the customer base,
as at December 31, 2015. This
compares to 37,000 digital-only customers, or 14% of the customer
base, as at the same period last year. Digital revenue growth was
also favourably impacted by the acquisition of the
ComFree/DuProprio Network ("CFDP") on July
1, 2015. Excluding the contribution of CFDP, digital
revenues in 2015 grew by approximately 6% year-over-year.
Print revenues decreased 21% year-over-year to reach
$343.4 million in 2015, adversely
impacted by a decline in the number of print customers and the
migration of customers' print marketing spending to digital. Print
revenue decline rates have, however, stabilized, in part supported
by content enhancement and pricing initiatives that have helped to
protect customers' investment in print advertising.
Adjusted EBITDA totalled $260.7
million in 2015, as compared to $316
million the year prior. Adjusted EBITDA in 2015 was
principally impacted by revenue pressure and a change in product
mix, partly offset by benefits realized from cost saving
initiatives and lower employee related expenses. The Adjusted
EBITDA margin for the year ended December
31, 2015 reached 31.4%, as compared to 36% in 2014.
Free cash flow for the year ended December 31, 2015 totalled $122.1 million, up from $72.6 million in 2014. The increase in free cash
flow was mainly attributable to a favourable change in cash income
taxes of $98.2 million, partly offset
by lower Adjusted EBITDA.
Net debt reached $430.6 million as
at December 31, 2015, down from
$494.1 million the year prior. The
Company made $100.3 million in
principal mandatory redemption payments on the Notes over the
course of 2015, reducing the balance of Notes outstanding to
$406.7 million as at December 31, 2015. Since their inception on
December 20, 2012, the Company made
total principal repayments of $393.3
million on its Notes.
Net earnings for the twelve-month period ended December 31, 2015 reached $61.1 million. This compares to $188.5 million the year prior, principally
impacted by an $84.8 million income
tax recovery recorded in 2014 related to the cancellation of
certain income tax liabilities following the settlement of past tax
assessments. Net earnings in 2015 were also adversely impacted by
lower Adjusted EBITDA. For the year ended December 31, 2015, the Company recorded basic
earnings per share of $2.29, as
compared to basic earnings per share of $6.95 in 2014.
Fourth Quarter 2015 Financial Results
Revenues for the
fourth quarter ended December 31,
2015 decreased 3.2% to $208.5
million, as compared to $215.3
million for the same period last year.
Digital revenues grew to $129.2
million during the fourth quarter of 2015, up 10.5% from
$116.9 million last year. For the
fourth quarter ended December 31,
2015, digital revenues represented 62% of total revenues,
increasing from 54.3% during the same period last year.
Digital revenue growth was favourably impacted by the
acquisition of CFDP, accelerated customer acquisition as well as
continued growth in digital spending among Yellow Pages' renewing
customers. Excluding CFDP, digital revenues for the fourth quarter
of 2015 grew by approximately 4% year-over-year.
Print revenues during the fourth quarter of 2015 decreased 19.4%
year-over-year to reach $79.3
million, exhibiting stable declines.
Adjusted EBITDA remained relatively stable in the fourth quarter
of 2015 at $64.5 million, as compared
to $64.8 million the year prior.
Adjusted EBITDA was favourably impacted by benefits realized from
cost saving initiatives and lower employee related expenses, offset
by lower revenues. For the quarter ended December 31, 2015, the Adjusted EBITDA margin
reached 30.9%, as compared to 30.1% for the same period in
2014.
"Successful execution of our Return to Growth Plan is being
demonstrated by the delivery of sustainable growth in digital
revenues, a gradual reduction in investment spending and the
realization of cost savings across the organization," said Ginette
Maillé, Chief Financial Officer of Yellow Pages. "These trends will
continue in 2016 as year-over-year revenue and Adjusted EBITDA
declines are anticipated to materially improve relative to
2015."
The Company generated $25.2
million of free cash flow during the fourth quarter of 2015,
up from $3.9 million of utilized free
cash flow during the same period last year. The increase in free
cash flow is mainly attributable to lower capital expenditures and
a favourable change in cash income taxes of $14.2 million.
Net earnings for the three-month period ended December 31, 2015 reached $5.9 million, as compared to $95.2 million the year prior. The decrease in net
earnings was principally impacted by the cancellation of certain
income tax liabilities following the settlement of past tax
assessments, which led to the recording of an $84.8 million income tax recovery during the
fourth quarter of 2014. For the quarter ended December 31, 2015, the Company recorded basic
earnings per share of $0.22, as
compared to basic earnings per share of $3.53 the year prior.
Operational Update
"The value proposition Yellow Pages
offers to merchants and consumers is unparalleled in Canada," continued Mr. Billot. "Supported by
the introduction of new marketing solutions and improved
technologies within our sales, fulfillment and customer service
functions, we are building richer relationships with small and
medium sized businesses Canada-wide. In addition, we have enhanced the
user experience on our network of mobile applications and
introduced digital properties within the dining and real estate
verticals to facilitate the way local businesses and consumers
interact and transact within today's digital marketplace."
Enhancing its Customer Value Proposition
- The Company's customer count reached 245,000 customers as at
December 31, 2015. This compares to
256,000 customers as at December 31,
2014 and represents a net customer count decline of 11,000
in 2015, down significantly from 20,000 and 33,000 net customers
lost in 2014 and 2013, respectively.
- Yellow Pages acquired 30,800 new customers during the
twelve-month period ended December 31,
2015, in line with internal targets and exceeding last
year's acquisition of 22,100 new customers. This performance was
supported by the introduction of new sales incentive programs and
marketing solutions, in addition to a stronger acquisition culture
within the sales organization. The Company is also enhancing the
sales process across its face-to-face and telephony channels by
equipping its representatives with technologies that utilize
proven, fact-based selling strategies in building value-enhancing
digital marketing programs for small and medium sized businesses
("SMEs").
- The customer renewal rate grew to 85% for the year ended
December 31, 2015, up from 84% last
year. Yellow Pages' customer renewal rate continues to land ahead
of internal expectations, supported by the delivery of processes
and technologies that have improved the sales, fulfillment and
customer service experience for SMEs.
Strengthening its Media Assets
- Total digital visits ("TDV") grew to 464 million for the year
ended December 31, 2015, up 9.4% from
424.1 million visits in 2014. TDV measures the number of visits
made across the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411,
Bookenda and dine.TO online and mobile properties, as well as
visits made across the properties of the Company's application
syndication partners.
- TDV totalled 118.2 million for the fourth quarter ended
December 31, 2015, up from 117.4
million during the same period last year. TDV during the fourth
quarter of 2015 was impacted by a change to the layout of Google's
mobile web search results pages, which pushed organic results for
all mobile web publishers lower on Google's search pages. The
ranking of Yellow Pages' listings on Google's mobile web search
results pages remained relatively unchanged despite this layout
change, a reflection of the relevancy and quality of the Company's
listings.
- The Company will continue to improve the quality, completeness
and relevance of the user experience across its network of digital
media properties. Yellow Pages aims to differentiate itself from
other local digital search properties by integrating
functionalities that empower consumers and allow them to quickly
and easily transact within their local neighbourhoods. Launched
nationally in June 2015, YP Dine was
the Company's first mobile application to incorporate these
features, leveraging Bookenda's technologies to help users search
for, discover and book a restaurant directly from their mobile
devices. Recognizing the property's unique value proposition, YP
Dine was selected by Apple as one of 2015's best new mobile
applications.
Gaining Efficiencies
- Yellow Pages has finalized a comprehensive organizational
review (the "Corporate Realignment") during the fourth quarter of
2015, which resulted in the elimination of 300 positions. The
Corporate Realignment follows suit to the progress Yellow Pages has
made in the execution of its Return to Growth Plan, particularly as
a result of interdependencies built between the Company's
information technology, strategy and marketing functions, as well
as the decommissioning of legacy systems, platforms and processes.
The Corporate Realignment principally affected roles that have been
integrated within other functions or that are no longer aligned
with the Company's digital reality.
Extending its Brand
Promise
- In further support of local shopping and the growth of local
economies, Yellow Pages hosted its third annual Shop The
Neighbourhood ("STN") event on Saturday,
November 28, 2015. Held during a weekend when many Canadians
shop at U.S. retailers to take advantage of Black Friday and Cyber
Monday deals, STN garnered the participation of over 12,500 local
Canadian merchants offering 6,300 deals exclusive to the YP
Shopwise mobile application. For the first time in the event's
history, STN introduced Beacon technologies in various
neighbourhoods, allowing participating merchants to push
deal-related notifications to YP Shopwise users while they shopped
on location.
2016 Financial Outlook
The Company reaffirms its long-term financial outlook relative
to the Return to Growth Plan, targeting a return to revenue
and Adjusted EBITDA growth by 2018. For the year ended December 31, 2016, Yellow Pages anticipates
delivering:
- Year-over-year organic digital revenue growth in the high
single digits;
- Adjusted EBITDA margins of 30%;
- Capital expenditures, net of related lease incentives, of
$60 million; and
- Principal mandatory redemption payments of approximately
$100 million on its
Notes.
Conference Call
Yellow Pages Limited will hold an
analyst and media call at 2 p.m. (Eastern
Time) on February 11, 2016 to
discuss full year and fourth quarter 2015 results. The call may be
accessed by dialing (416) 340-2219 within the Toronto area, or 1 866 225-2055 outside of
Toronto.
The call will be simultaneously webcast on the Company's website
at
https://corporate.yp.ca/en/yellow-pages-news/events/q4-2015-and-full-year-2015-financial-and-operational-results/
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 February 11 to March 11, 2016 by dialing (905)
694-9451 within the Toronto area,
or 1 800 408-3053 outside of Toronto.
The conference passcode is 4111167.
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 February 11, 2016, 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 February 11, 2016 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 December 31,
|
For the years
ended
December 31,
|
Yellow Pages
Limited
|
2015
|
|
2014
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Revenues
|
$208,505
|
|
$215,319
|
$829,771
|
|
$877,528
|
Adjusted
EBITDA1
|
$64,498
|
|
$64,832
|
$260,687
|
|
$315,976
|
Adjusted EBITDA
margin1
|
30.9%
|
|
30.1%
|
31.4%
|
|
36.0%
|
Net
earnings
|
$5,866
|
|
$95,225
|
$61,055
|
|
$188,540
|
Basic earnings per
share
|
$0.22
|
|
$3.53
|
$2.29
|
|
$6.95
|
Cash flow from
operating activities
|
$42,417
|
|
$30,566
|
$197,566
|
|
$156,507
|
Free cash
flow1
|
$25,249
|
|
($3,869)
|
$122,145
|
|
$72,557
|
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