MONTREAL, May 10, 2016 /CNW Telbec/ - Yellow Pages
Limited (TSX: Y) (the "Company") released its operational and
financial results today for the quarter ended March 31, 2016, demonstrating successful
implementation of its Return to Growth Plan and transformation into
Canada's leading digital
advertising company.
- Digital revenues grew 16.6% year-over-year to reach
$131.6 million for the three-month
period ended March 31, 2016,
representing 64.6% of total revenues.
- EBITDA adjusted for restructuring and special charges
("Adjusted EBITDA") totalled $61.9
million for the three-month period ended March 31, 2016, as compared to $70.8 million for the same period last year. The
Adjusted EBITDA margin was 30.4% during the first quarter of 2016,
as compared to 34.4% the year prior.
- The Company's customer count totalled 244,000 customers as at
March 31, 2016, as compared to
251,000 customers as at the same time last year. Customer
acquisition continued to accelerate, with 34,600 new customers
acquired during the twelve-month period ended March 31, 2016, as compared to 23,700 new
customers acquired during the same period last year.
- Yellow Pages acquired the net assets of JUICE Mobile ("JUICE")
on March 17, 2016 for a total
consideration of $35.3 million, paid
with cash on hand. The acquisition positions Yellow Pages as a
leader in national mobile advertising, significantly expanding its
reach of brands and media publishers and providing the Company with
proprietary programmatic technologies to connect national
advertisers with mobile users across North America.
- The Company anticipates making a $36
million principal mandatory redemption payment on its 9.25%
Senior Secured Notes (the "Notes") on May
31, 2016. Total principal mandatory redemption payments in
2016 are expected to amount to approximately $100 million.
"Generating over $526 million in
annualized digital revenues, Yellow Pages remains one of
Canada's largest media and
marketing solution providers. Over 244,000 small and medium sized
businesses trust our advertising services to grow their local
presence, with over one third of Canadians also consulting our
network of digital media properties to interact and transact with
merchants in and around their neighbourhoods," said Julien Billot, President and Chief Executive
Officer of Yellow Pages. "Now two years into the implementation of
our Return to Growth Plan, we have successfully leveraged our
expertise and market positioning to grow and enrich the connections
made between Canadian consumers and businesses, as well as
strengthen our financial profile."
First Quarter 2016 Financial Results
Revenues for the
quarter ended March 31, 2016
decreased 1.1% year-over-year to $203.6
million, as compared to $205.9
million for the same period last year.
Digital revenues grew 16.6% year-over-year to total $131.6 million for the quarter ended March 31, 2016, as compared to $112.9 million the year prior. Digital revenues
represented 64.6% of total revenues for the three-month period
ended March 31, 2016, up from 54.8%
during the same period last year.
Growth in digital revenues continues to be driven by accelerated
customer acquisition and growth in digital spending among the
Company's renewing customers. Digital revenue growth was also
favourably impacted by the acquisitions of ComFree/DuProprio
("CFDP") and JUICE on July 1, 2015
and March 17, 2016, respectively. On
a pro forma basis, digital revenues for the three-month period
ended March 31, 2016 grew 8%
year-over-year. Pro forma digital revenue growth adjusts digital
revenues for the full inclusion of CFDP and JUICE during the
three-month period ended March 31,
2015, as well as for the full inclusion of JUICE during the
first quarter of 2016.
Print revenues decreased 22.6% year-over-year to $72 million during the first quarter of 2016,
remaining adversely impacted by a decline in the number of print
customers and the ongoing migration of customers' print advertising
spending to digital. Print revenue decline rates are anticipated to
remain relatively stable, in part supported by initiatives geared
at protecting usage of the print directory and encouraging
customers' renewal of print advertising spending.
Adjusted EBITDA totalled $61.9
million for the three-month period ended March 31, 2016, as compared to $70.8 million during the same period last year.
The Adjusted EBITDA margin for the first quarter of 2016 was 30.4%,
as compared to 34.4% for the first quarter of 2015. The decrease in
Adjusted EBITDA and Adjusted EBITDA margin was principally impacted
by lower print revenues and a change in product mix, partly offset
by the realization of cost saving initiatives.
Free cash flow for the three-month period ended March 31, 2016 totaled $8.8 million, as compared to $44.9 million during the same period last year.
The decrease in free cash flow was principally impacted by income
taxes paid of $1.9 million during the
first quarter of 2016, as compared to income taxes received of
$25.6 million during the first
quarter of 2015 related to a past tax settlement. Free cash flow
for the three-month period ended March 31,
2016 was also impacted by a decrease in Adjusted EBITDA.
Net debt totalled $463.1 million
as at March 31, 2016, as compared to
$455.1 million the year prior. The
Company anticipates making a $36
million principal mandatory redemption payment on its Notes
on May 31, 2016, with principal
mandatory redemption payments expected to total approximately
$100 million in 2016.
"Our cash flow profile remains strong, providing us with the
financial flexibility required to delever the balance sheet and
transfer value to shareholders," said Ginette Maillé, Chief
Financial Officer of Yellow Pages. "As we continue implementing the
Return to Growth Plan, our cash flow profile will continue to
strengthen, driven by the delivery of sustainable digital revenue
growth, a reduction in operational and capital expenditures, and
cost savings generated from the realization of operational
efficiencies."
Net earnings for the three-month period ended March 31, 2016 amounted to $13.2 million. This compares to net earnings of
$25.5 million the year prior,
principally impacted by lower Adjusted EBITDA. For the quarter
ended March 31, 2016, the Company
recorded basic earnings per share of $0.49, as compared to basic earnings per share of
$0.95 for the same period last
year.
Operational Update
"We have grown into a reputable
digital advertising company, enriching the services and solutions
we offer to merchants to help them thrive in today's complex
digital economy," continued Mr. Billot. "Our platforms and
operations have evolved to support the digital needs of our local
and national customers, while new processes have been introduced to
enhance the service levels provided by our customer-facing teams.
These initiatives continue to play a key role in accelerating
customer acquisition, protecting customer renewal rates and growing
digital advertising spending among renewing customers, drivers
critical to returning our company to revenue and Adjusted EBITDA
growth by 2018."
Enhancing its Customer Value Proposition
- The Company's customer count totalled 244,000 customers as at
March 31, 2016, as compared to
251,000 customers as at March 31,
2015. This represents a year-over-year net customer count
decline of 7,000, down significantly from 19,000 net customers lost
during the same period last year.
- Yellow Pages acquired 34,600 new customers during the
twelve-month period ended March 31,
2016, exceeding 23,700 new customers acquired during the
same period last year. The Company has made significant progress in
developing a sales culture focused on acquiring new customers,
while also implementing technologies that have boosted the
productivity and performance of its sales channels. A dialer has
been introduced across the Company's call centers to automate the
qualification and assignment of customer leads. In conjunction,
Yellow Pages' sales force is being equipped with enhanced
customer-facing tools that leverage proprietary competitive
intelligence and fact-based selling techniques to provide clients
with more valuable digital marketing campaigns.
- The renewal rate among customers remained relatively stable at
84% for the twelve-month period ended March
31, 2016, as compared to a renewal rate of 85% during the
same period last year. This performance continues to be supported
by the delivery of an improved sales, customer service and digital
fulfillment experience to the Company's customers.
Strengthening its Media Assets
- Total digital visits ("TDV"), which 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, amounted to 100.2 million for the
first quarter ended March 31, 2016,
as compared to 105.3 million visits during the same period last
year.
- TDV during the first quarter of 2016 remained adversely
impacted by a change made to the layout of Google's mobile web
search results pages in late 2015, which pushed organic results for
mobile web publishers lower on Google's search pages. Yellow Pages'
leading ranking among Google's organic listings on mobile web
remained relatively unchanged despite this layout change, a
reflection of the high relevance and quality of the Company's
listings.
- The YP Dine mobile application continued to receive various
enhancements over the course of the first quarter of 2016, offering
better content, a larger repertoire of restaurant listings, and
easier-to-use search and booking functionalities. The YP Dine
desktop property (http://www.yellowpages.ca/dine) also saw
improvements, now allowing users to optimize their search
experience by filtering and booking restaurants by
availability.
Acquisition of JUICE Mobile
- On March 17, 2016, Yellow Pages
closed the acquisition of the net assets of JUICE for a total
consideration of $35.3 million. JUICE
is a leading Canadian mobile advertising technology company whose
proprietary programmatic direct and real-time bidding platforms
facilitate the automatic buying and selling of mobile advertising
between brands and publishers. Since its inception in 2010, JUICE
has successfully leveraged its mobile advertising platforms to
build valuable relationships with numerous Fortune 500 customers
across North America, while also
operating a mobile media publisher network attracting over 11
billion impressions annually. The acquisition positions Yellow
Pages as a leader in national mobile advertising, significantly
expanding its existing reach of brands and media publishers, and
equipping the Company with leading technologies to better fulfill
mobile advertising campaigns. The transaction will also help to
accelerate Yellow Pages' monetization of local mobile audiences,
leveraging JUICE's publishers and advertising platforms to create
more targeted hyperlocal mobile advertising campaigns for small and
medium sized businesses nationwide.
- Following the acquisition of JUICE, the Company anticipates
delivering, for the year ending December 31,
2016, year-over-year pro forma digital revenue growth
between 9% and 11%. While the acquisition of JUICE is accretive to
Adjusted EBITDA, the Company is revising its Adjusted EBITDA margin
guidance for 2016 to approximately 28%, as JUICE operates at a
lower Adjusted EBITDA margin relative to Yellow Pages prior to the
acquisition.
Conference Call
Yellow Pages Limited will hold an
analyst and media call at 2 p.m. (Eastern
Time) on May 10, 2016 to
discuss first quarter 2016 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/q1-2016-financial-and-operational-results-and-2016-annual-general-meeting/
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 May 10 to June 8, 2016 by dialing (905) 694-9451
within the Toronto area, or 1 800
408-3053 outside of Toronto.
The conference passcode is 6191781.
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, 411.ca, Bookenda.com, dine.TO, DuProprio.com,
ComFree.com and YP NextHome. The Company also holds the YP, YP
Shopwise, YP Dine, RedFlagDeals, Canada411, 411, Bookenda,
DuProprio, ComFree and YP NextHome mobile applications and Yellow
Pages™ print directories. In addition, Yellow Pages is a leader in
national advertising through its various channels and services
devoted to North American businesses. The Company also owns JUICE
Mobile, a mobile advertising technology company whose proprietary
programmatic platforms facilitate the automatic buying and selling
of mobile advertising between brands and publishers. For more
information visit 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 May 10, 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 May 10, 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 March 31,
|
Yellow Pages
Limited
|
2016
|
2015
|
|
|
|
Revenues
|
$203,627
|
$205,902
|
Adjusted
EBITDA1
|
$61,893
|
$70,786
|
Adjusted EBITDA
margin1
|
30.4%
|
34.4%
|
Net
earnings
|
$13,151
|
$25,524
|
Basic earnings per
share
|
$0.49
|
$0.95
|
Cash flows from
operating activities
|
$24,248
|
$62,834
|
Free cash
flow1
|
$8,823
|
$44,892
|
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 flows 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