Yell Overview
November 2006
Disclaimer
During this presentation we will be discussing Yell’s business outlook and making certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We urge you to read the section on Risk in the annual report. We also draw your attention to our press release which is posted on our web site.
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The Yell Group at FY 06
Revenue up 26% to £1,621m; organic growth of 10% at constant FX
Adjusted EBITDA up 28% to £503m Cash conversion 89%; free cash flow £253m
Adjusted diluted EPS up 25% to 32.8p
Total dividends per share up 21% to 15.3p
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Adjusted EBITDA excludes costs from lawsuits associated with a Yellow Book advertising campaign in FY 05 and costs arising from the TransWestern acquisition, and an exceptional credit from releasing a provision for IPO costs in FY06
The Group following the TPI acquisition
Combined Group with TPI FY 06 revenue
LatAm 3%
Spain 17% US 47% Spain 20% US 41%
Combined Group with TPI FY 06 EBITDA
LatAm 3%
UK 33%
UK 36%
EBITDA margin 31.8%
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The Yell proposition
Leading market positions
Simple, focused strategy: win, keep and grow Investment in brand and usage Channel neutral approach – the best information bridge between buyers and sellers Recession resilient Sales excellence – 9,000 sales people World class processes Proven management team Strong organic growth, high margins and strong cash flow Acquisition and integration track record
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Yell Group - strong historic growth
Revenue (£m)
US UK 922 499 284 664 699 552 621
Adjusted EBITDA (£m)
US UK 258 97 35 210 226 233 232 245 127 161
581
615
635
FY 02
FY 03
FY 04
FY 05
FY 06
FY 02*
FY 03*
FY 04*
FY 05
FY 06
28.3
29.0 30.3 30.6 EBITDA margin %
31.0
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* Figures for years 1-3 reported under UK GAAP Adjusted EBITDA is stated before exceptional costs arising from the buyout arrangement under BT ownership in FY02; IPO costs and restructuring costs relating to the closure of a Yellow Book West production site in FY03; IPO costs in FY04; costs from lawsuits associated with a Yellow Book advertising campaign in FY05; and costs arising from the TransWestern acquisition, and an exceptional credit from releasing a provision for IPO costs in FY06
UK print – win, keep, grow
Unique advertisers (000s)
New advertisers Retained customers
438 451 480
ARPA (£)
478
462
104
1,234
1,272
1,237
1,281
1,341
101
102
116
117
FY 02
FY 03
FY 04
FY 05
FY 06
FY 02
FY 03
FY 04
FY 05
FY 06
80
78
77 75 Retention %
75
-0.4 -4.4 -4.8 -3.3 -2.9 Effective Yellow Pages rate reduction %
FY 06: 5% total UK revenue growth H1 07: 3% total UK revenue growth
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Yell.com
Searchable advertisers
at 30 September (000s)
182 159
171
Revenue per average searchable advertiser (RASA) (£)
241
H1 06
H1 07
H1 06
H1 07
September (m)
Unique users
FY 06: 65% revenue growth H1 07: 67% revenue growth
4.6 H1 06
6.2
H1 07
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US platform – 60% of Independents
Yellow Book acquired 1999
McLeod acquired 2002
TransWestern acquired 2005 NDC, Feist, in-fills and launches since 1999
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Leading the shareshift in the US market
% Revenue growth for publishers
Incumbents Independents 25 20 25
% Independents’ market share
19
20
13 13
17 15 11 12
18
12
9 4.0 4.0
10
10
3.0 3.0
10
8
-0.4 -0.2
2003
-2.0
2004
-1.5
-0.4
1998 1999 2000 2001 2002 2003 2004 2005 2006E
1998
1999
2000
2001
2002
2005 2006E
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Source: The Kelsey Group, March 2006
Yellow Book print – win, keep, grow
Unique advertisers (000s)
489
ARPA ($)
2,693
455 363 386
2,450 2,135
2,434
2,477
166
FY 02
FY 03
FY 04
FY 05
FY 06
FY 02
FY 03
FY 04
FY 05
FY 06
70
70
70 71 Retention %
70
FY 06: 42% total revenue growth; 15% organic H1 07: 26% total revenue growth: 12% organic
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Note: Revenue growth is stated at constant exchange rates
Yellowbook.com
Searchable advertisers
at 30 September (000s)
390
55
Revenue per average searchable advertiser (RASA) ($)
76
348
H1 06
H1 07
H1 06
H1 07
September (m)
5.2
Visitors
FY 06: 91% revenue growth H1 07: 69% revenue growth
Note: Includes Worldpages.com acquired with TransWestern in July 2005
1.9 H1 06 H1 07
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TPI – a high quality company
Print - Spain
Leading directory publisher - estimated market share 90% 182 directory titles
Latin America
Leading market positions in high growth regions
– No 1 in Peru and Chile
83 directory titles
New media
Internet products and directory assistance
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The Spanish directories opportunity
Spain
Real GDP growth(b)
UK
Europe(a)
3.4%
27%
1.8%
65%
1.5%
43% 20%
Print usage %(c)
Print penetration % Online penetration % of population(e)
( a)
14% 37%
24% 60%
49%
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Average of UK, Germany, France, Italy and Spain (b) Growth rate for 2005. Source Deutsche Bank economic research (c) Defined as the probability of a representative individual to use Print to look up a business in his/her area. Source KelseyGroup report March 2006 (d) Defined as number of separable businesses who advertise in directory print as a proportion of total businesses. Source Kelsey Group Global Yellow Pages 2005 (e) Defined as percentage of population with access to Internet. Source Kelsey Group report November 2005
Transferral of best practice at TPI
Grow usage
– Refocus on in core product – Improve comprehensiveness and scoping – Speed up distribution
Grow customer numbers
– Focus on core products
Grow ARPA
– Reinvest on sales force and refocus sales force on core products – Redesign discounting programme and simplify advert range
Internet opportunity
– Accelerate unbundling, review and simplify pricing structure – Incentivisation of sales force and specialised training
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Yell Group
Simple, focused strategy Leading market positions Strong management
Excellent financial track record
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Investor Relations: Jill Sherratt +44 (0)118 950 6984
www.yellgroup.com
Yell, Queens Walk, Oxford Road, Reading, Berkshire RG1 7PT
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