Capital Market Day November 6, 2008

Transcription

FROM PRINT DEPENDENCY
TO ONLINE OPPORTUNITIES
Copenhagen, November 6th, 2008
The directory business is
not the stable industry with
more or less guaranteed
cash flows as it were just a
couple of years ago
Denmark, Norway,
Sweden, Finland, Poland
#
1in the Nordics
4,500 employees
> 2,000 sales reps...
3,000,000 contacts
500,000 customers
...millions of end users
> 80% of the population are using
our products every year
400,000,000 look ups
+ 2,500,000,000
searches
70,000,000 calls
1,500 servers
25 million books
3 dl of skimmed milk
50% usage
300,000,000,000
6,443,000,000
2,004
online
3,500
print
939
voice
2,196,000,000
23–28%
voice
32–37%
print
26–31%
online
Among the highest
EBITDA margins on
the OMX
Resilient?
11,662,000,000
Goodwill
10,339,000,000
The Transformers...
Online as % of Online & Offline
r12 months Online reveneus
50%
2 000
40%
1 500
30%
1 000
20%
500
10%
SEK million
2 500
Q4-08
Q3-08
Q2-08
Q1-08
Q4-07
Q3-07
Q2-07
Q1-07
Q4-06
Q3-06
Q2-06
Q1-06
Q4-05
0
Online share of Offline and Online revenues
We are not in the Print, Online or Voice business.
We are in the business of connecting people to people
and customers to sellers, through our databases.
…we are a directory company within the media
industry generating transactions between
sellers and buyers.
50%
Source: OC&C
Transformation is key
From print dependency
to online opportunities
Yellow pages industry - in distress
150,0
112,5
75,0
37,5
Eniro
OMX Stockholm
Yell Group
Seat
0
1/10/07
29 aug 2008
Yellow pages industry
Directories peers – 2008 estimated revenue split
100
Online
Offline (incl Voice)
14
19
27
37
39
75
50
86
81
63
73
61
25
Seat
Yell
Eniro
Pages Jaunes
0
Average
Source: UBS
Transform Eniro
7
4 4 4 4 4 4
2 2 2 2 2 2 2 2
1 1 1 1 1 1 1 1 1 1 1
7
4 4 4 4 4 4
2 2 2 2 2 2 2 2
1 1 1 1 1 1 1 1 1 1 1
Print
“Print is the basis for the directory
business for years to come”
“Print is declining but not dead,
more than 50% of all Swedes are
using the printed books on a
monthly basis!”
“Change format, re scope and
work more with price models,
cost and ROI. Print still has
billions in earnings to deliver”
“Keep print and invest the
money in online”
“Get out of number two markets
and focus on a high margin last
iceman strategy where we are
number one”
Voice
“DA is going from name and
number to answers on anything
and we have to adapt”
“In the future DA is a personal
online service. We can book
restaurants, tickets and even send
an e-mail for you”
“Voice will get competition from
mobile broadband, we must work
more closely with online”
“We need to work with more
personalized services”
“Why don’t we expand into the
call center business - we are the
best call center there is”
Online
“Online is our future”
“Search is a fast growing
phenomenon, especially
online and mobile search”
“A basic listing is not enough.
What is needed is the ability to
match specific demand with
specific supply and execute the
transaction”
“Relevance is a key word”
“Pay per performance models will
become increasingly important”
“Leading digital and mobile
propositions are essential to
compete long term in local search”
“The power of digital media
means that SME’s are starting to
look for products beyond
traditional advertising”
“We must focus more on end
users and customers to keep up
with our competitors”
“Where are we in
mobile?”
“Behind...”
Corporate structure
“We need to start
investing in the
business”
“Schibstedt will invest 2-300
MNOK per year in online
development, and we?”
“We should go from
holding to group
structure”
“Group focus on Online
is key to success”
“Our holding company
structure is limiting IT and
product development
synergies”
“We need to start focusing on
outperforming our competitors”
“We need to differentiate
ourselves from our peers”
“Debt must down”
Continuing “as is”
is not an option
From Print dependency
to online opportunities
Relevant and modern
From name and number to ask us anything
Search > Transaction
Thin > Thick database
SALES REPS.
Thin > Thick database
CUSTOMERS
USERS
SALES
BLOGGERS
PRODUCT
From holding to Group with business focus
2008
2008
2008
“We need a group focus on each business segment to manage the
challenges in declining print, strong competition in Online and synergies in
Voice - then we can turn print, develop Voice and compete in Online”
One directory business with a channel driven organization
ENIRO GROUP
STAFF
OFFLINE
VOICE
ONLINE
Strategy, product and concept
development and ownership
Reporting Units
NORWAY
SWEDEN
DENMARK
FINLAND
POLAND
Strategy implementation, sales, operation, content
aggregation, co-operations and local marketing
From high print margins
to high online margins
From perceived boring
to fun and interesting
From high yield to growth
From high leverage
to normal leverage
From flat to growing
EBITDA
From YP multiples
to online multiples
150,0
112,5
75,0
37,5
0
1/10/07
29 aug 2008
1/10/07
0
37,5
75,0
112,5
150,0
29 aug 2008
Operational efficiency
Eniro shall by 2016, through:
• Market leading sales forces and customer base
• An unique, rich, qualified and transaction generating content database
• One directory business with a channel driven organization
• Strong local presence
• Future oriented consumer and customer driven product development
• Organization and people aligned with the mission
• Enhanced strong brands
• Organic growth, Strategic M&A´s, Co-operations
• …and operational efficiency
…transform the current business from print dependency to Online opportunities
by developing the most consumer and customer valuable directory databases
and transaction generator for all distribution channels, thereby position Eniro as
a leading Nordic Media Company with a number one position in local search,
Online advertising and SME business facilitating services.
02 Business units
Voice
Wenche Holen
Voice challenge
2013 task for Eniro Voice
Maintain and develop a leading position in existing
Voice businesses with best in class European
operational efficiency. Develop the next generation of
Voice building a large and loyal customer usage with
extended services. Evaluate entering into the Danish
market and in selected markets offer high quality
Voice services for large corporations, public service
and other organizations supporting Eniros long
term objectives.
Leading position
Operational efficiency
Next generation of voice
New segments
Market Share
• Market position
No 1 position in Sweden
No 2 position in Finland
No 2 position in Norway
2
2
1
startup
Basis for growth
> 70 million of calls pr. year
+1,000 well trained operators
Excellent databases and search interfaces
Excellent Brands
Proven track record in product development and innovation
Operational efficiency as a main competence area
Opportunity of expansion to all Eniro markets
Well positioned among the audience
High customer satisfaction and
top-of-mind is success factors
96% of customers regard the 118 118 service to be “excellent” or “good”
55% Top-of Mind 118118
Voice Total Market
Revenue Total Market Voice [MSek]
2 000 000
1 500 000
1 000 000
500 000
2007
2008
SWEDEN Total DA
FINLAND total DA
NORWAY total DA
0
2009
2010
Source: Eniro
Mobile growth – opportunity
Sverige
Finland
Norge
80,00%
71,25%
62,50%
53,75%
45,00%
Source: Eniro, usage all countries Norway Sweden, Finland
Mobile opportunity
Improved service to customer – send maps, text message/SMS with information booking confirmation etc
Stronger market position “on the go” increased usage of new type of services e.g. price comparison etc
Mobile services drives revenue – compare total market slide
International Outlook
• Advertised based revenue in DA/Voice
Mix of user and advertised - most successful
Free DA services – not yet proven to be profitable
• Focus on either Informational Services or High Automation
Directory information Services: opening hours, maps&routing etc
• Growth in text messaging is expected
Name and number inquiries – starting service
“Ask us anything”
New services
• Expand strategic Position – “Ask us anything”
Access to database trough SMS, online and operator
When did
Charlie Chaplin
die and how?
Best price for
Timberlands
Where is the nearest
WIFI hotspot?
New services
• Easy access, always available – “Who is calling”
New services
• Services supporting: Closer to Transaction
E.g. booking, reservation… reviews
Book a taxi to
the Casino in
Sundsvall
Database
Simply, ask us anything!
=
Weather
Cinema programs
Family members
Maps and Routing
Name & number
Businesses, places
Organizations number
Direct numbers to departments
Trade mark
Opening hours
Family members
Available parking lot
ATM
Train /Bus stop,
WIFI hotspots
Post box
Price comparison
Traffic information
Where did Bing Crosby die
Kate Hudson's daughter
Number of calories in bread
Parties in parliament
Fastest car
What is pi
Who killed JFK
Olympic gold winners 2004
River floating trough Paris
Database – how does it work?
• Offline, Online, Voice:
Together we build the Eniro database
Millions of customers
ask us anything
+ 1,000 operators
Eniro sales force
Customer Service
self provisioning
Evaluate expanding in to new services
Based on our core competence
and well trained staff we have a
great opportunity in developing
into other services as well
Strategies
• From just name and number to ask us anything
• Brand building and top of mind marketing is essential
• Strive for number one position
• Explore new business areas to utilize on top performing
•
call centers
Rich, richer, richest database!
Offline Media
Östersund
Luleå
Umeå
Sundsvall
• Print is not dead
Gävle
Falun
Uppsala
Karlstad
Linköping
Västerås
Örebro
Eskilstuna
Norrköping
Gotland
Jönköping
Skövde
Uddevalla
Borås
Halmstad
Växjö
Blekinge
Kalmar
Kristianstad
Helsingborg
Ystad
Göteborg
Malmö
Stockholm
Offline Media - Print
Approximately 50%
70
60
50
40
30
Source: SIFO/Research International - Orvesto Konsument 2208:2 15 – 79 15 503 respondents
• The book is still larger than Internet in Sweden
Monthly reach in Sweden
%
80
60
40
20
0
Source: SIFO and Eniro
eniro.se
Yellow Pages
• But not so in Norway...
Weekly reach in Norway
%
60
45
30
15
0
Source: SIFO and Eniro
internet
Print
• Large customer base
• Good retention rate
Customer development Gula Sidorna 2001 - 2007
Number of customers
Retention rate
160 000
120 000
80 000
40 000
2001
2002
2003
2004
2005
0
2006
2007
• Print is declining
Kelsey Group estimates for Nordic –5.5% 07-12
Our estimates for the same markets are -8 to -10% 08-12
• The large customers have scaled down
• We have seen dramatic decline in large cities
4 500
3 375
2 250
1 125
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
• Eniro has a strong position
In a (declining) high margin print business
Sweden
Norway
Finland
Other
2%
Other
25%
Eniro
75%
Eniro
28%
Other
72%
Eniro
98%
Denmark
Other
59%
Poland
Eniro
41%
Other
48%
Eniro
52%
Source: IRM, Dansk Oplagskontrol, IAB, CR Media Consulting
Offline Media challenge
2013 task for Eniro Offline media
Maintain and develop a range of branded leading high
margin Offline consumer products, alone and with partners,
providing users with directory and transaction oriented
media services based on outstanding segmented content and
world class sales, creating leading marketplaces, forming the
basis for revenue driving services that enables Eniro to meet
its business objectives.
How can we minimize the decline?
• Product development
• Change the perception
Marketing, ROI and PR
• Continue developing sales
Ledare
Eniro Development Concept
How can we keep the margins?
• Cost control
• Pricing
• Rescoping
• Distribution
Active part in market consolidation
• If opportunities that strengthens Eniro’s new strategy and
improves share holder value appears – we will be ready
From Print to Offline Media
• Use the sales force to introduce other Offline Media
Products to the SME segment
We are testing this in Sweden
Summary
• Print is declining but still high margins
• Eniro has a strong position
• Sales
• Still billions to make
• Focus on opportunities and cost
• Develop and broaden the business
• And continue believe in print!
Online
Mathias Hedlund
Market
Nordic Directory Online Market Development
SEK Bn
5,00
CAGR
7
0
5
e0
Onlin 15.9%
3,75
CAGR
02-05 %
23.6
2,50
1,25
0
Online as % of
Total Directory
Advertising
2002
2003
2004
2005
2006
2007
16%
18%
22%
28%
33%
37%
Notes
1. Includes Sweden, Norway, Denmark and Finland
2. Includes Sweden, Norway, Denmark, Finland, UK, Spain, France, Italy, Germany, Belgium and Netherlands
3. Excluding voice
Source
The Kelsey Group
Eniro’s Share of the Nordic Online Directories Market
66%
65,67%
60%
59%
59,10%
55%
56%
54%
52,53%
45,97%
39,40%
32,83%
26,27%
19,70%
13,13%
6,57%
2002
2003
2004
2005
0%
2006
2007
Source
The Kelsey Group
Online Nordic Advertising Expenditure Development
• Internet Advertising Penetration(1)
• Internet Advertising Expenditure
SEK Bn
th
w
o
r
7 G 3%
0
06 40.
06 - 07
Growth
50.5%
82.0%
23.2%
41.2%
Source
IRM, Dansk Oplagskontrol, TNS Gallup, Eniro estimates
Notes
1. Internet as a % of total advertising expenditure. Total advertising expenditure defined as traditional media, directories print and internet
Eniro’s Share of Total Nordic Internet Advertising
Share of Advertising
SEK Bn
0.0
Notes
1. Total advertising defined as traditional media, directories print and internet
Source
IRM, Dansk Oplagskontrol, TNS Gallup, Eniro estimates
E-Commerce Nordic Development
B2C
CAGR
05-08
25.9%
$M
25 000
24 275
20 531
20 000
16 639
15 000
10 000
GR
00-04 CA
54.9%
5 000
3 413
1 519
2 151
2000
2001
12 161
8 738
5 290
0
2002
2003
2004
2005
2006
2007
2008
B2B
CAGR
05-08
17.3%
$M
150 000
147 430
134 631
116 595
91 268
100 000
GR
00-04 CA
75.8%
50 000
58 486
35 169
6 128
13 888
23 077
0
2000
2001
2002
2003
2004
Notes
1. E-Commerce defined as the value of products / services purchased by individuals by clicking an order button on the
Internet and intended for consumption. B2C and B2B are subsets of e-Commerce
2005
2006
2007
2008
Source
IDC
Mobile Phone Internet Penetration and Usage Development
Mobile phone penetration as % of total population
Sweden
Norway
0,900
0,900
0,675
0,675
0,450
0,450
0,225
17%
10%
0
0,225
12%
7%
0
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
Finland
Denmark
1,00
0,900
0,75
0,675
0,50
0,450
0,25
14%
8%
0
0,225
13%
8%
0
2004
2005
2006
2007
2008
2004
2005
2006
2007
Source
2008
Forrester
Mobile Market Development
Worldwide
Europe(1)
$M
M Users
M Users
$M
Mobile Search Users as
% of Mobile Int. Users
79%
81%
84%
75%
77%
80%
Mobile Search Rev. per
Mobile Search User
$0.03
$0.19
$0.54
$0.07
$0.52
$1.30
Notes
1. Includes UK, France, Germany, Italy and Spain
2. Earned from sale of display or text listings alongside mobile search results
Source
eMarketer
Outlook
Nordic Directory Online Market Outlook
SEK Bn
10,0
CAGR
2
1
8
0
Online 14.2%
7,5
5,0
2,5
0
2007
Online as % of
Total Directory
Advertising
37%
2008
2009
2010
2011
2012
42%
46%
51%
55%
60%
Notes
1. Includes Sweden, Norway, Denmark and Finland
2. Includes Sweden, Norway, Denmark, Finland, UK, Spain, France, Italy, Germany, Belgium and Netherlands
3. Excluding voice
Source
The Kelsey Group
Online Advertising Market and Outlook
Nordic
08 - 12
CAGR
SEK Bn
08 - 12 CAGR
9.7%
14.3%
7.7%
6.0%
Source
JupiterResearch
E-Commerce Nordic Outlook
B2C
$ Bn
08-10 CAGR
11.2%
40
06-08 CAGR
20.8%
30
24
27
30
21
20
17
10
0
2006
2007
2008
2009
2010
B2B
08-10 CAGR
7.8%
$ Bn
06-08 CAGR
12.4%
200
135
150
147
159
171
117
100
50
0
2006
2007
2008
Notes
1. E-Commerce defined as the value of products / services purchased by individuals by clicking an order button on the Internet and
intended for consumption. B2C and B2B are subsets of e-Commerce
2009
2010
Source
IDC
Mobile Phone Internet Penetration and Usage Outlook
Mobile phone penetration as % of total population
Sweden
Norway
0,900
0,900
0,675
0,675
0,450
37%
17%
0,225
0,450
30%
0,225
0
12%
0
2006
2007
2008
2009
2010
2011
2012
2013
2006
2007
2008
2009
2010
2011
2012
Finland
Denmark
1,00
0,900
0,75
0,675
0,50
0,450
34%
0,25
2013
32%
0,225
14%
0
13%
0
2006
2007
2008
2009
2010
2011
2012
2013
2006
2007
2008
2009
2010
2011
2012
Source
2013
Forrester
Mobile Market Outlook
Worldwide
Europe(1)
$M
M Users
Mobile Search Users as
% of Mobile Int. Users
81%
84%
Mobile Search Rev. per
Mobile Search User
$0.19
$0.54
87%
$1.12
(2)
89%
$1.71
Notes
1. Includes UK, France, Germany, Italy and Spain
2. Earned from sale of display or text listings alongside mobile search results
92%
$2.62
M Users
$M
77%
80%
82%
85%
$0.52
$1.30
$2.64
$4.26
88%
$5.76
(2)
Source
eMarketer
Online challenge
2013 task for Eniro Online
Maintain and develop a range of branded leading
consumer web sites in all Nordic countries serving
Online- and mobile users with user friendly local search
and directory/transaction capabilities based on
outstanding content databases, alone and with partners,
creating leading market places as the basis for revenue
driving services for Eniro and its customers (advertising
and business facilitation) that makes it possible for
Eniro to meet its business objectives.
Local Search
Eniro has a strong
position in local search
We have reached all time high during 2008
(weekly average user sessions)
6000000
6000000
5250000
4500000
4500000
3000000
3750000
1500000
3000000
0
Jan Apr July Oct Jan Apr July Oct Jan Apr July
1200000
7000000
1056250
5250000
912500
3500000
768750
1750000
625000
0
…even if we use the broadest definition for
search it places us in the top 5 in all countries
5
3
4
2
…which makes us nr 4 in a Nordic perspective
4
But our position
is a sweet spot
Because we are nr 1 in
commercial search in our
core markets
Comparison of generated value
Eniro
Google
Billion
0
50
100
200
150
175 000 000 000 SEK
140 000 000 000 SEK
Source: SIFO / Research international Pris/Värde june 2008 Rolling 10-months. Sweden, Norway.
…hence we have
substantial revenue and
we have growth
New Online Revenues
Online rev 2005 (Proforma)
2500
1250
Q4-05 Q1-06 Q2-06 Q3-06
Q4-06 Q1-07 Q2-07
Q3-07
0
Q4-07
Q1-08
Q2-08
Q3-08
…and the
margins are
good
…but we will have to take
a strategic leap forward
to secure a rapid growth
in the future
Looking forward
Sweden: Eniro vs Hitta
2800000
Eniro
Hitta
2600000
2400000
2200000
2000000
1800000
We are picking up momentum…
Source: TNS Metrix, Gemius, Eniro Analysis
Sweden: Eniro vs Hitta
2800000
Eniro
Hitta
2600000
2400000
2200000
2000000
1800000
…and yet we need to and will improve our core products
substantially both in the short term and the long term perspective
Source: TNS Metrix, Gemius, Eniro Analysis
Short term improvements
Ease of use
Being dynamic
Relevance
Improving ease of use
Improving search to be more dynamic
Improving relevance
Relevance
Transaction
generating
Taking relevance further
Product search included in core product (in this case DinPris)
A search for ipod…
…will, like today, give a
list of companies that
sell ipods, but also a
’Product Hit’
ipod
Product search for customers with webshop
Example of transaction
generating. You buy your
ipod at gulesider.no
The informed choice – getting closer to transaction
A thick
database
End users
End users
We aim to have the best consumer knowledge in the industry
End users
we will improve presentation and interaction
to make comparisons and choice easier
End users
Cocktail
we will have site(s) and services that encourage consumer
participation to a much higher degree than today
End users
we will create younger and more modern brand(s)
End users
we will improve our time to market
Customers
More Customers
Nr of customers
are important…
…to grow revenue and
develop the database
Deeper customer relationships through more products
Moving from
“have to be in the directory”
to
“they help me grow my business”
Business facilitating
services for SME’s
SMEs are increasingly spending
their money on online tools to
grow their business
Booking
e-commerce
Web
development
Tender services
Eniro is in a perfect position to
develop the business of SMEs
2,000 sales reps
500,000 customers
millions of end users
A number of business
facilitating services to be
expected within the
next 12 months
Online
advertising
A Directory Company in
the Online Media Market
Moving a Directory Company in the Online Media Market
Develop position within directory
Gain market share within search
Grasp opportunities within
display marketing
Develop position within directory
• Outperform our competitors in each market
Eniro
Hitta
Sweden
Denmark
2800000
Google
2600000
ENIRO
MSN Search
2400000
Facebook
Wikipedia
2200000
EDSA
2000000
Yahoo Search
DBA.dk
1800000
600 000
1 200 000
1 800 000
2 400 000
3 000 000
Gain market share within search
2008 we expect a revenue of
approx. sek 65 m from sponsored links
We aim to have a higher growth
than the rest of the search market
the next coming years
Grasp opportunities within display marketing
Further exploration on our own
sites and extended co-operations
will open up opportunities in
display marketing
Co-operations
Co-operations
More co-operations to be expected
Traffic
Ad networks
Content
Co-operations
We have something others want – a
market leading position in local search!
Mobile search
Mobile search – opportunities
Number of directory lookups
Index: 2007 = 100
200
150
100
50
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: UBS OC&C
Eniro is in good position
to generate revenue
Mobile search
A strategy for creating
consumer usage
Leverage on customer base
Expect to improve position and create
substantial revenue by 2010–2011
And we have created one
more revenue source...
...of the same database!
ONLINE - ORGANISATION
ONLINE
IT co-ordination
Nordic Business Development
Core product development and
consumer experience
Sponsored links and other
media offerings + SEO/SEM
ONLINE
SWEDEN
ONLINE
NORWAY
ONLINE
DENMARK
ONLINE
FINLAND
Co-operations, classifieds and
verticals
Business facilitating services
Mobile search
Summary
• Eniro has a strong online position
• Eniro is well positioned to take advantage of the online
opportunities
• Eniro will speed up development and invest more in online
within a strategic context
• In four years time Eniro will be an online company with a
supporting voice and print business
DK
Henrik Dyring
Denmark is small !
Denmark is small!
Denmark small share of Eniro group
Revenue share
2007
EBITDA share
2007
9%
2%
Small # 2 in Denmark
De Gule Sider
Eniro
Factor
3,5
1500
1125
750
375
0
2001
2002
2003
2004
2005
2006
2007
Agenda 1
•Grow the business
•Gain market share
A print company
2003
Online
9%
Print
91%
Print revenue
320
290
260
230
200
2000
2001
2002
2003
2004
2005
2006
2007
Marketshare local directories
2007
2003
Other
14%
Other
11%
DGS
32%
DGS
45%
Eniro
45%
Eniro
53%
Marketshares print directories
2007
2003
Krak
12%
Other
7%
Other
4%
Eniro
19%
Eniro
41%
DGS
66%
DGS
53%
Still small # 2
De Gule Sider
Eniro
Factor
3,5
DKK
1500
Factor
2,2
1125
750
375
0
2001
2002
2003
2004
2005
2006
2007
Agenda 2
• Get online position
• Keep growing
• Keep gaining market share
Acquire Krak
• Krak acquired June 2007 for 400 MDKK
# 1 online brand
Strong online position
Online revenue
DKK
300
225
150
75
0
2000
2001
2002
2003
2004
2005
2006
2007
Q4/Q3
From print dependency to online opportunities
2008
2003
Online
9%
Online
44%
Print
56%
Print
91%
Revenue Eniro Denmark
DKK
600
500
400
300
200
2000
2001
2002
2003
2004
2005
2006
2007
Q4/Q3
EBITDA Eniro Denmark
DKK
120
85
50
15
-20
2000
2001
2002
2003
2004
2005
2006
2007
Q4/Q3
Still #2 … But close to #1 position
De Gule Sider
Eniro
Factor
3,5
DKK
1100
Factor
2,2
825
Factor
1,3
550
275
0
2001
2002
2003
2004
2005
2006
2007
EBITDA is also changing
DGS
Eniro
DKK
400
275
150
25
-100
2003
2004
2005
2006
2007
Q4/Q3
Competitive edge
Mostrup
Den Røde
Lokalbog
We have very
Strong brands
KRAK
Eniro
NI
SOL
Competitive edge
We have a large
Customer base
and,
It’s growing!
90000
67500
45000
22500
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
Competitive edge
We have a large
data base
750.000 companies
83.000 customers
329.000 decision makers
168.000 financial informations
and,
It’s growing!
200.000 search words
5.400.000 people
2.500.000 adresses
101.000 roads
Competitive edge
and!
This is our competitive edge
• 600 employees
• 65 % in sales
Eniro Denmark- a great place to work at
•
•
Good work environment
People development
•
Eniro values
•
Employer Branding
Employer branding
Agenda Denmark
Transformation from:
Small # 2
Offline
Dominant # 1
Online
Traditional company
Modern fast moving company
We are on track !
Online order intake
+49%
Q3/07 – Q3/08
NO
Wenche Holen
Eniro acquires Findexa
Strengthened position in the high tech Norwegian market
Transformation from
No.2 to No.1 through
acquisition
Eniro aquires Findexa
Strengthened position in the high tech Norwegian market
• Basic data Norwegian market • Internet usage, monthly: 83%
(of population 12yrs+, Q2 2008)
Population:
4,737
m
•
Households 2,064m
Population 12yrs+ 3,955m
• Broadband penetration: 73%
(of all households, 1.1.2008)
• Mobile Phones, Customers 5,139 m
10% have 2 or more subscriptions
• Internet access: 88%
(of population 12yrs+, Q2 2008)
Source: Statistics Norway, TNS Gallup, Norwegian Post and Telecommunications Authority
From no 2 Online..
Market position
-
No 2
-
Print
Online
DA/Mobile
From no 2 Online..
1
1
2
Print
Online
DA/Mobile
B2B
Local
National/regional
Market position
Revenues and Customers increase
Customers
Revenue and EBITDA
EBITDA
650
150 000
475
100 000
300
50 000
125
0
2005
-50
2004
2005
2006
From Print Dependency to Online Opportunities
Internet is the key information channel for search
EUL 2007
EUL 2006
EUL 2005
EUL 2004
100
89 89
82
76
75
63
53
57
50
37
29 29
33
22
25
9
3
4
7
8 10 8
2
7
6
11
7
5
5
6
5
2
2
2
4
1
3
4
D
o
no
ts
ea
rc
h
in
fo
th
er
O
/a
cq
ua
in
ta
nc
es
D
ire
ct
M
ar
ke
tin
g
/r
el
at
iv
es
/n
ew
sp
ap
er
s
Fr
ie
nd
s
M
ag
az
in
es
Se
rv
ic
es
M
ob
ile
as
si
st
an
ce
D
ire
ct
or
y
Pr
in
te
d
D
ire
ct
or
ie
s
0
In
te
rn
et
%
Source: Research International 2007, Base: All
Directory services, news and search the most popular online activities
Q2-08
Telefonkatalog/nummeropplysning
81
76
Søkemotorer/søketjenester
Magasiner/blader/tidsskrifter
Bøker
Spill
Mat
Biler
Utenlandske nyhetssider
Diskusjonssider
Kjøpeguider
Erotikk
60
48
33
35
30
25
21
26
30
25
24
20
23
19
18
19
17
20
17
0 22,5
Har du besøkt noen av de følgende kategorier
nettsider siste 30 dager?
67,5
TNS Gallup, Interbuss Q?, Base: alle
Intensified competition...
Eniro search brands uniquely positioned
in the Norwegian market
Aggressive competition has failed to challenge Eniro position
Traffic Data (Unique Weekly Visitors, in thousands), TNS Metrix, Q3 2008 average
1500
1210
1125
712
750
613
405
375
215
99
18
0.
no
al
og
at
tk
et
N
pp
ly
O
en
81
sn
in
ge
n1
8
Se
sa
m
K
va
si
r
G
ul
e
Si
de
r
0
Multichannel Strategy
DIRECTORY ASSISTANCE
ONLINE
PRINT
WAP/SMS
Brand usage shifts from print to online
Gulesider.no
Gule Sider (print)
Brand usage development pr channel (unique visitors -quarterly figures)
100%
26%
75%
50%
74%
50%
74%
50%
25%
26%
0%
Q4 2003
Q4 2005
Q4 2007
Eniro estimates
Online usage increases...
...and print usage declines
Total brand usage
Gulesider no
1 200 000
140 000
+46%
956 250
122 500
-8%
+102%
712 500
105 000
468 750
87 500
225 000
70 000
Q4 2003
Q4 2005
Q4 2007
Source: TNS Metrix
-36%
Q4 2003
Q4 2005
Q4 2007
Source: TNS Gallup, Forbruker & Media
Total usage of Gule Sider increases
Total brand usage
400 000
+24%
331 250
+35%
262 500
193 750
125 000
Q4 2003
Q4 2005
Q4 2007
Eniro estimates
Print Usage is still high
•
505.000 persons use Gule Sider print every week
•
60% of the population 12 years+ has used one of
Eniros printed directories during the last 12 months
Source: TNS Gallup, Forbruker & Media Q2 2008
Gule Sider generates 132 BnNOK of purchases per year
Pris/Värde Tracker Norge, maj 2008 Annual Value of Purchases generated from Search Estimerade årsvä
150,0
132
112,5
Online
75,0
52
37,5
Print
Online
Voice
0
Gule Sider Totalt
Google
Kilde: Research International, Maj 2008
Revenues shift from print to online
GS/RS Print
GS Online
Gule Sider Revenue 2003 – 2005- 2007
100%
75%
63%
81%
50%
90%
25%
37%
19%
10%
0%
2003
2005
2007
EBITDA margins for Gule Sider stays over 50%
Eniro Norway
Revenues shift from print to online – EBITDA stable
Voice
Online
Print
100%
75%
6,00%
7,00%
43,00%
51,00%
50%
25%
51,00%
42,00%
0%
2007
EBITDA: 41,4%
Q407-Q308
EBITDA: 40,3%
Summary
• From a niche player to a major player in Norway
• From one distribution channel to multi channel offering
• From low profitability to a profitable company
• Gule sider revenue mix changed, with continuously high
EBITDA, high brand usage and strong ROI to customers
FI
Ilkka Wäck
Voice 80%
Strong brand!
60
45
30
15
0
03/05
06/05
09/05
12/05
03/06
ToM Eniro
06/06
09/06
12/06
ToM Fonecta
03/07
06/07
Spont. Eniro
09/07
12/07
03/08
Spont. Fonecta
06/08
09/08
12/08
Strong competition, two
players in the market
Focus on cost cutting and
running for EBITDA
Finland EBITDA development
EUR
15
12
K EUR
9
6
3
0
2005
2006
2007
...on behalf of growth
Strong online position
though...
eniro.fi has the highest
number of online visitors
among the competitors
Strong brands in S24.fi & YT.fi
But we should have invested
more to fully leverage on a great
market position online...
Print in Finland is tough
Print market value - Regional directories
The total market value has declined due to heavy price competition
EUR
Eniro
Fonecta/ Finnet
90000000
67500000
45000000
22500000
2002
2003
2004
2005
2006
0
2007
2008
2009f
Source: Eniro estimates
Market shares – regional directories
Market shares - regional directories 2008
Eniro
Fonecta/ Finnet
Source: Eniro estimates
Two print actors is
one to many...
Voice is a high margin
business
Exposed to financial slowdown
and increased mobile
broadband penetration
Expand into new concepts and
product areas: Sentraali
acquisition is one such example
Way forward
1.
start investing in an online
position
2.
strong focus on gaining
market shares from Fonecta
3.
taking active part in restructuring
the Finnish directory market
4.
develop a strong DA position
PL
Roger Asplund
The directory business in Poland
Eniro
PKT
DiTel
Zumi
200
PLN
150
100
50
0
2001
2002
2003
2004
2005
2006
2007
Source: Financial reports, Eniro estimates
Eniro Customer split
Print & Online customers
Online customers
Print customers
150 000
112 500
75 000
37 500
2005
2006
0
2007
Eniro revenue split
Online revenue
Print revenue
200 000
14%
18%
22%
150 000
100 000
50 000
2005
2006
0
2007
The directory business in Poland
Eniro
PKT
Ditel
Net profits of YP players
40
PLN
30
20
10
0
-10
-20
-30
Category Title
Source: Financial reports, Eniro estimates
Eniro Poland EBITDA development
EBIDTA
PLN
50 000
40 000
30 000
20 000
10 000
0
2001
2002
2003
2004
2005
2006
2007
Market shares 2007
Internet Advertising
Total Advertising Market
Radio
6%
YP
4%
other
E-mail mrkt 4%
7%
Outdoor
7%
TV
46%
Internet
9%
IYP
15%
Display
47%
Classifieds
5%
Press
27%
SEM
23%
7,992 B PLN (19,492 B SEK)
743 M PLN (1,812 M SEK)
Source: CR Media Consulting, IAB reports
Key market trends 2007 (vs 2004)
• High growth in advertising spending 7,99 bn PLN(CAGR 10%)
• Internet advertising spend PLN 743 M vs 100 M
• Portal usage declining
• Decrease of daily press, readers and revenues
• Profiled services growing popularity (Internet, TV, magazines)
• Increased purchases online (18% population in 2007)
(CAGR 65%)
4,6 bn PLN turnover in online auctions 2007 vs 921 M
3,5 M PLN turnover in online shopping 2007 vs 980 M
Source: IAB report, May 2008; CR Media Consulting
Eniro Product Portfolio
B2I
Local
National
B2B
Improving brand
47%
50%
42%
36%
35%
2003
2004
37%
23%
2002
Source: PBS research house, 2002-2008, representative study
2005
2006
2007
2008
Spontaneous brand awareness
High recognition in the market
From three to two Directory Players
But five Directories (plus Google) on Internet
Eniro market shares 2007
Printed Directories
Internet Directories
Tel
11%
Tel
28%
Zumi
3%
Eniro
43%
Eniro
52%
PKT
43%
PKT
20%
262M PLN (639 M SEK)
77 M PLN (188 M SEK)
Source: Financial reports
The largest database in Poland
1.800.000
1.400.000
And it is proprietary...
Market penetration
1.400.000
13%
833.000
108.000
Growth
potential
Rescoping
2001
18
2008
38
User driven product development
… guides
… after hours
User driven product development
…maps
…verticals
Value proposition
+
Sales by product line
Summary
• Poland is a growth economy
• High internet growth over time
• Eniros proprietary database is a great advantage in the
transformation process
• We will use innovations from rest of the group
• The market consolidation from 3 to 2 Directories is most
likely a good thing
• Opportunities in product development
• Potential in improved sales offering
dzikuj...
SE
Martin Carlesund
Strong position online
3000000
2400000
1800000
1200000
600000
2003
2004
2005
2006
0
2007
2008
vs. hitta.se
Eniro
Hitta
3000000
2700000
2400000
2100000
1800000
w.16
w.30
w.44
1500000
Strong position offline
Sweden
Others
2%
Eniro
ED
Others
ED
23%
Eniro
75%
Strong position Voice
Eniro 118 118
Ahhaaa 118100
Telenor 118228
Teleinfo 118800
3% 2%
13%
82%
High usage of our products
118100
hitta.se
Lokaldelen
118100
hitta.se
Lokaldelen
The Swedish
success story
Total kundutveckling Sverige Gula Sidorna print & online 2000-2008 (excl. Din Del)
Nr of customers
180 000
160 000
140 000
120 000
2000
2001
2002
2003
2004
2005
2006
2007
100 000
2008
High penetration and high
amount of customers – the
fundament for high margins – the
law and order of Yellow pages
Sales force!
More than 1.000.000 sales
contacts 2009
Doubled the online customer
base during 12 months
Increased our customer base in
print over the last 12 months
Goal of 200,000 customers
Nr of online customers
85 000
63 750
42 500
21 250
2003
2004
2005
2006
0
2007
2008
Customer
strategy
1. More customers ->
2. Lower arpa ->
3. New products ->
4. Increased arpa ->
5. Increased revenues
1. More customers ->
2. Lower arpa ->
3. New products ->
4. Increased arpa ->
5. Increased revenues
Online is high
margins!
The future is
ahead waiting
for us!
IT
Mattias Wedar
Current IT situation @ Eniro
• Strong and deep technical competence
• Multiple platforms and systems serving the same
purpose
• Differences in IS/IT sourcing strategies across the group
• Lack of pan-group structure to prioritize IT-investments
• Historically, no holistic approach for maximizing synergies
across the group from a IT perspective
• However, a balanced IT spending in line with industry
peers
2013 task for Eniro Group IT
• Develop and implement a coordinated, central led and
pan-Nordic IT structure, including a best in class, flexible
and scalable development and sourcing process, acting like
one unit towards BU:s, partnering with business units
building a group platform covering all future functions
needed, regardless of distribution channel, for directory
services enabling Eniro to reach its business objectives
• Pan Nordic IT Structure
• Best in class developing and sourcing
• Group platform
• One concept – one (group) development
Future platform
• A platform where we reuse internal assets and leverage
best practice rather than in starting from scratch
• A platform that easily integrates partners
• Most components exists today within the group, we need
to bring them together in a context
• The rich database is the fundamental building block
• A platform that enables stable operations
Cost approach
Examples:
IT operations
Application maintenance
Support and service desk
Discretionary
Non-discretionary costs (“must
have”) are costs required to
maintain current IT functionality
and operations
Non-discretionary
Examples:
New search capabilities
New Concepts & Products
CRM and sales support
Discretionary
Discretionary costs (“want
to”) are investments in new IT
and improvements to the IT
capabilities
IT Spending
Non-discretionary
Definition
ILLUSTRATIVE
Eniro approach
INCREASE
Discretionary
DECREASE
Non-discretionary
How will we manage this change?
• Build once and use multiple times; i.e. work smarter. Leverage
on centralized product development, specifically online
• Harmonize the architectural landscape and technical platforms
Consolidate, harmonize and shut down systems
Standardize environments for workplace and support platforms
Asses and revise sourcing and IT Operations strategy
• Use our Group power to negotiate
Towards software providers, consultancies, offshore partners
• Build a multi-year IT transformation plan guided by business
value run by dedicated resources on a group level
• Run IT from a group perspective as opposed to a holding
structure
Eniro IT must change to become
greater than the sum of its parts
building a world-class IT
organization.
05 Financial Plan
Background
• Eniro is in a transformation phase for the coming 7 years
• Our new strategy focuses on strengthening long term prospects
- manage print revenue with focus on cost efficiency, product development and
sales force selling additional services that exploit the core database
- online growth through increase of advertisers and broader product base
- sale of new online/rich content following adoption of new organizational
structure
- monetize usage behavior shift in directory assistance
• Strict focus on managing cost base
- operational cost efficiency
- synergies from changing holding company structure to central company
structure
• Will position Eniro to deliver sustainable shareholder value
Long-term financial targets
• Growth
Average total revenue growth of 3-5% sustained by growth
from Online operations
• Margin
EBITDA margin above 30% with strong cash flow
• Capital structure
Net debt in relation to EBITDA in the range of 3-3,5
• Dividend policy
Up to 50% of net income
Short to medium term financial expectations
• Investments of 200-250 MSEK p.a. over the next three
years to capture long term online potential
(divided over the P&L and balance sheet)
• Organic online growth of 12-15% over the next 3 years
• Controlled print decline over the period, resulting in an
overall 0-2% total revenue growth
• EBITDA margin down to 27% during
investment phase and increasing
from that level
• Reduction of net debt will be given priority over dividend
in the medium term
Summary
Thank you!

Capital Market Day November 6, 2008

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