Yell UK Business Presentation - 15 May 2019
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Yell UK Business Presentation 15 May 2019 hibu confidential / © hibu 2019
Disclaimer This presentation is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America, the United Kingdom or in any other jurisdiction. Securities may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended. The information contained in this presentation does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2018 have been filed with the Registrar of Companies. The auditor has reported on those accounts and its report was unqualified and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006. Statutory accounts for the year ended 31 March 2019 will be filed with the Registrar of Companies. The auditor has not yet reported on those accounts but is expected to do so prior to filing. This presentation may include forward-looking statements within the meaning of the securities laws of certain applicable jurisdictions. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without limitation, those regarding our intentions, beliefs or current expectations concerning, among other things, our future financial conditions and performance, results of operations and liquidity, our strategy, plans, objectives, prospects, growth, goals and targets, future developments in the markets in which we participate or are seeking to participate, and anticipated regulatory changes in the industry in which we operate. These forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, terms such as “aim”, “anticipate”, “assume”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intend”, “may”, “outlook”, “plan”, “predict”, “project”, “should”, “will” or “would” or, in each case, their negative, or other variations or comparable terminology. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and are based on numerous assumptions. Our actual financial condition, results of operations and cash flows, and the development of the industry in which we operate, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this presentation. In addition, even if our financial condition, results of operations and cash flows, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods. We undertake no obligation publicly to update or revise any forward-looking statements, except as may be required by law. hibu confidential / © hibu 2019 2
FY19 Business commentary • Transition to fully digital business now complete; last print book delivered January • Revenue challenges, especially in Q3 and Q4; operational actions already underway to address this • Yell.com strengthened: underlying traffic stabilised at around 10 million monthly visits; partners adding additional c. 25m1 monthly usage; strong growth in reviews; messaging capability being rolled out • Pension deficit at April 2018 covered by subsequent contributions, no further regular contributions required before the next valuation expected in 2021 • Operations and capital structure separate from US and Group • Raised £225 million bond May 2018 Financial commentary • Digital revenue in Q4 was £3m lower than Q3 for a variety of reasons largely relating to the final transition from print to digital. These include the roll-off of some Yell.com spend from customers transitioned a year earlier from print to digital; the loss of certain national digital customers with the end of print; the loss of some high revenue (but low margin) search campaigns; the short term impact of sales force reorganisation; and headcount being below target • Digital EBITDA margins held up well at 34% with lower costs offsetting the revenue decline • Trading operating cash flow in Q4 was £4m lower than Q3 due to the timing of payments 1. Searches for businesses via Yell’s content syndication partners, where Yell data was used in the search results provided. Source: Syndicated partner stats, January to March 2019. hibu confidential / © hibu 2019 3
Market Overview
SME DIFM Digital Marketing Services
(£ Billions)
• £2.6bn market growing at c. 8%
£3.7
(although management view is
this may be softening)
• Yell is number one provider of
£2.6
managed digital marketing
services with c. 7% share
• Fragmented market dominated
by small service providers
2018E 2022E
Source: ONS, PwC E&M outlook, PwC merchant survey, Management Information, PwC Analysis
hibu confidential / © hibu 2019 4Digital Marketing Made Easy
• Businesses lack the time,
knowledge and resources to
Measurement Presence
Tracking, Measuring & Strong & Synchronized manage their digital marketing
adapting via Y4B App
• Yell offers the ‘one stop shop’
to be successful at digital
marketing
• Compelling market
Performance proposition – broad range,
Drive qualified traffic & Connect local service and leading
re-marketing to existing Maintain & Update your
customers business info technology
• Partnering with the leading
providers in the industry
Reputation
Manage reviews and
distribute dynamic relevant
content
hibu confidential / © hibu 2019 5Yell.com
Connecting Businesses & Consumers
Average Monthly Usage (m)
• Yell.com is more than an online directory
Yell.com Core Traffic
• Omnichannel platform (Mobile, Web & App)
Syndicated Partner Usage
• Voice search enabled
• Messaging & booking with AI & Chat bots
• Leading data & rich content
25.9 • Over 2m reviews
17.9
• Total monthly usage has grown to 36m
9.1 throughout FY19 through partner usage
• Usage partnerships with Apple & Bing
driving growth
10.1 10.5 10.3 10.8
FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4
hibu confidential / © hibu 2019 6Technology and Data Evolution
From To
Manual error prone and Efficient AI assisted
Processes
inefficient processes automated processes
Cyber Reactive approach with Proactive approach with
Security limited capability advanced tooling
Fragmented data and Single version of truth for
Data and MI
irregular MI reporting an Insight driven business
In house hosting creating Efficient, modern and
Hosting
cost and obsolescence leading cloud services
Standard content on Rich content with
Yell.com
Business Listings Omnichannel experience
Siloed Tools with duplication Simple Tools and Self-Serve
Tools
and complexity Digital journeys
hibu confidential / © hibu 2019 7UK FY20 Priorities
Priorities
• Continuing priority is to address revenue trend
• Organisational stability and improved execution are key: focusing on priorities; removing
distractions; getting sales headcount up to strength; optimizing territory allocations and
sales commission plans; sales training and performance management
• HQ cost reduction program initiated, reducing costs by up to £8 million annual run rate over
course of year, to help protect profitability and ensure the business is “leaner and fitter”
• Opportunity to simplify and improve the customer journey, automate, and leverage scale
advantage in technology and data
• UK CEO recruitment process well advanced
hibu confidential / © hibu 2019 8Strategic Outlook • First major YP company to transition to fully digital • Significant transition; addressing challenges • Number 1 provider in growing, fragmented market1 • Yell.com a high usage and increasingly differentiated platform • Opportunities to improve customer journey and to automate • Opportunities to leverage scale advantage in technology and data • Challenge is to out-compete the many small service providers and grow above market 1. Managed digital marketing services for SMEs hibu confidential / © hibu 2019 9
Appendix hibu confidential / © hibu 2019
UK: FY19 Quarterly
£m Q1 Q2 Q3 Q4 Full Year
vs vs vs vs vs
Actual Actual Actual Actual Actual
Prior Yr Prior Yr Prior Yr Prior Yr Prior Yr
Digital revenue
Digital directories 27.2 0.4 27.7 0.4 26.9 0.2 24.7 (3.0) 106.5 (1.9)
Growth 1.6% 1.5% 0.9% (10.7)% (1.7)%
Digital marketing services 21.4 (0.2) 21.3 (1.6) 20.8 (2.7) 19.8 (3.3) 83.2 (7.8)
Growth (0.8)% (6.9)% (11.5)% (14.5)% (8.7)%
Total digital revenue 48.6 0.2 49.0 (1.2) 47.6 (2.5) 44.5 (6.3) 189.7 (9.7)
Growth 0.5% (2.4)% (4.9)% (12.4)% (4.9)%
Digital product contribution
Digital directories 27.1 0.6 27.5 0.2 26.7 0.2 24.5 (3.0) 105.8 (2.0)
% of revenue 99.6% 99.4% 99.4% 99.4% 99.3%
Digital marketing services 11.4 (0.3) 11.9 (0.6) 11.1 (2.2) 10.8 (2.1) 45.2 (5.2)
% of revenue 53.4% 55.6% 53.6% 54.4% 54.3%
Total digital contribution 38.5 0.3 39.3 (0.4) 37.8 (1.9) 35.3 (5.1) 151.0 (7.1)
79.2% 80.4% 79.4% 79.4% 79.6%
Total semi-var & indirect (23.0) 0.1 (23.3) 0.7 (24.2) (0.6) (20.1) 5.0 (90.6) 5.3
DIGITAL EBITDA 15.5 0.4 16.0 0.3 13.7 (2.5) 15.2 (0.1) 60.4 (1.9)
% of revenue 31.9% 32.7% 28.7% 34.2% 31.8%
Print revenue 3.5 (1.6) 3.9 (3.4) 3.0 (3.8) 1.2 (7.1) 11.5 (15.8)
underlying growth (31.0)% (46.7)% (56.2)% (85.2)% (57.8)%
Print contribution 0.9 (1.9) 0.6 (2.6) (0.2) (3.0) 0.0 (5.0) 1.4 (12.5)
% of revenue 27.1% 16.8% (8.3)% 0.5% 11.7%
Print costs recharged (0.3) 0.3 (0.4) 0.2 (0.3) (0.2) (0.4) 0.6 (1.4) 0.9
PRINT EBITDA 0.6 (1.6) 0.3 (2.3) (0.6) (3.2) (0.4) (4.4) (0.1) (11.5)
TOTAL UK EBITDA 16.1 (1.2) 16.3 (2.0) 13.1 (5.7) 14.8 (4.5) 60.3 (13.4)
% of revenue 30.9% 30.9% 25.9% 32.4% 30.0%
Exceptional cash flows (0.4) (0.4) (0.8) 0.2 (0.4) 0.2 (2.3) (1.5) (3.9) (1.5)
Working capital movement (0.0) - (5.6) (6.9) 2.6 4.4 (1.5) 0.4 (4.5) (2.1)
Pension contributions (2.5) 0.7 (2.5) - (0.8) 2.2 - 2.2 (5.8) 5.1
Capital expenditure (1.7) (1.0) (2.1) (0.7) (1.7) 0.0 (2.2) (0.4) (7.7) (2.0)
Trading operating cash flow 11.5 (1.9) 5.3 (9.5) 12.7 1.1 8.8 (3.7) 38.3 (13.9)
11UK: FY19 Cash Analysis
£m Q1 Q2 Q3 Q4 FY
Actual Actual Actual Actual Actual
Trading operating cash flow 11.5 5.3 12.7 8.8 38.3
Hibu Group management costs 1 (2.7) 0.9 (0.8) (0.9) (3.5)
Hibu brand Transfer to US - - 1.5 - 1.5
Pension (one off contribution) (10.0) - - - (10.0)
Adjusted operating cash flow (1.2) 6.2 13.4 7.9 26.3
Cash tax (0.2) (0.4) (0.5) (0.2) (1.2)
Withholding tax on US dividends (0.7) - - - (0.7)
Refinancing Costs 2 (8.8) (0.0) (0.0) (0.2) (9.1)
UK bond interest - (7.1) - (9.6) (16.6)
RCF commitment fee - (0.1) (0.1) (0.1) (0.2)
Excess cash flow (11.0) (1.2) 12.7 (2.1) (1.6)
Opening cash balance 33.6 12.0 10.7 23.4 33.6
Excess Cash flow (11.0) (1.2) 12.7 (2.1) (1.6)
Cash returns to shareholders 3 (11.4) - - - (11.4)
Intercompany - - - (1.7) (1.7)
Foreign exchange movement 0.6 0.0 (0.1) 0.0 0.6
Closing cash balance 12.0 10.7 23.4 19.6 19.6
1. Management costs recharged from the Hibu Group.
2. Included £0.9m outflow classified as part of cash generated from operations for statutory purposes.
3. Legacy PIK repayment.
12You can also read
