SoLocal Group

Decrease of Q3 Internet Revenues -5% - Seite 2

Note: Chart concerning the continued activities

The Group recorded revenues of € 177 million in Q3 2017, down -10% versus Q3 2016, as the double-digit growth of Digital Marketing (+13%) does not offset the decline of Local Search (-11%) and Print & Voice (-29%).

Internet revenues of €148 million in Q3 2017 were down -5% vs Q3 2016 :

• Audience growth : Internet visits recorded a growth of +3% in Q3 2017 versus Q3 2016, of which +11% for mobile audience (representing 43% of total audience).
• Local Search revenues: -11% in Q3 2017 versus Q3 2016 :
  • Local Search ARPA² : -6% in Q3 2017 versus Q3 2016, this decrease is mainly related to the impact of financial restructuring plan on the sales order dynamic in Q4 2016, especially on large accounts.
  • Client base : -5% in Q3 2017 vs Q3 2016, a lesser decline (-7% in Q3 2016 vs Q3 2015) resulting from the improvement of client retention as seen in the sales order dynamic in the last months.

• Digital Marketing revenues : revenues increased by +13% in Q3 2017 vs Q3 2016, thanks to the acceleration of the Group's innovative offerings : websites (Premium and Privilège websites) and AdWords (Booster Contact offering). This quarter, Digital Marketing revenues represented 23% of total revenues.

Print & Voice revenues of €29 million in Q3 2017 decreased by -29% versus Q3 2016. This business represented 17% of total revenues this quarter.

II. Financial situation

As of 30 September 2017, the Company’s net det³ amounted to € 357m vs € 1,106m as of 31 December 2016, before financial restructuring, and € 355m as of 30 June 2017, with a financial leverage reaching 1.81x as of 30 September 2017, compared to 4.72x as of 31 December 2016, before financial restructuring, and 1.71x as of 30 June 2017.

The net debt was nearly stable between 30 June 2017 and 30 September 2017 as the net cash flow in the quarter was close to zero but is improving compared to Q3 2016 (where the net cash flow reached - € 15m), thanks to a working capital improvement.

² Average Revenue Per Advertiser – ³ Net debt is the gross financial debt plus or minus the fair net asset value of asset and/or liability derivative instruments used for cash flow hedging purposes, minus cash and cash equivalents.

III. Outlook

In Q3 2017, the Internet sales order rebounded positively (+4%¹), creating however volatility in the pattern of accounting revenue recognition.