telegate analyst presentation results 2014 f1 - 11880.com · analyst presentation results 2014 3...

telegate Group

We make our customer visible on the Internet

Munich,

March 19th 2015

2Analyst presentation results 2014

Market & Strategy

Financials

Outlook

2


Digital Business

Market is expected to grow at rate of >10% p.a.

Focus is on Business Development and Growth

Directory Assistance

Market is expected to continue decreasing at a rate of 27-30% p.a.

Therefore, business is managed for cash maximisation

Strategy per business segment …

… with a clear focus on digital

3


341 429 459 515 574 638 701

383482 516

580646

717789

255

321344

386431

478526

341

429459

515

574

638

701

0

500

1000

1500

2000

2500

3000

2009 2010 2011 2012 2013 2014 2015 FC

Classified local

local Display advertising

local paid Searches

local Directories

The local online advertising market in

Germany …

Source: ovk, IAB Europe; Euromonitor; PwC; EIAA; Eurostat; Bain analysis

Relevant segments for

telegate

In k€

… is continuously growing


Growth derives from …

15

42

19

111313

35

26

1214

0

5

10

15

20

25

30

35

40

45

keineAusgaben

<100€ p.m. 100-250€ p.m. 200-500€pm >500€

SME allocation of online advertising spending in %

2013

2014

Source: GFK SME Advertising spending 2014

… increasing advertising spending of SMEs

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No information provided

5

250-500€ p.m. >500€ p.m.


Through customer segmentation …

Target Group Advertisingbehaviour

Ø onlineadvertising

Spending p.m.Offer

Beginnersin online advertising

No experience with online marketing or want to test several

providers

<100€ Easy online presence & low entry product

SMEs attracted to online advertising

(Focus target group)First positive experience

100-500€ p.m.Professional online

presence &performance products

Professional Long-standing positive experience

>500€ p.m. Performance product& VIP treatment

… we can professionally cover the market

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6


Traditional Alternative Digital Digital

Trying to defend print revenueFragmented / regionalEstablished customer relation

Innovative, „digital-only“ playersMany only offering one productrather than solution telegate is biggest player in respect of revenues generated with SMEs

Great brand / awareness & trafficBut: No sales force, accessto SMEs only via partner/reseller

Agencies

Competitive Landscape

7


Market research of our customers show …

��

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SMEs have realised the importanceof online marketing

SMEs have high expectations and seeperformance of online marketing withcritical eyes

If they have a positive experience,SMEs invest more in online marketing

87% already invest

in online marketing*

71,3% have difficulties

to reach local interestedprospects online*

Ø online marketing spending of SMEsincreased by approx.10% in 2014*

...their high expectations with regard to service a nd performance; especially at the beginning

*Source: GFK SME advertising spending 2014

8


With our market positioning …

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… we fulfil the expectations of our customers

● Local clients: Small & Medium Businesses

● 0 - 20 employees

Smart, easy to understand online marketing solutions

A clear „We-Do-It-For-You“ commitment

Solutions with easily visible positive results

9


… meets exactly customers’ expectation

• Website

• Listing

• Landingpage

• Google My Business

• Facebook Page

• Video clip

• Google Business View

• Google Adwords

• Top-Listing

• Facebook Advertising

Presence Advertising

Our product portfolio …

Advertising


… visible on the internet

We make our customer …

Websites#8,600

Facebook Launch April

Listings#19,000

Google Business View Launch April

Video#6,000

Google My BusinessLaunch April


… to advertise their presence on the internet

We help our customers …

Google AdWords10m € revenues (20% mobile)Best reseller DACH

Facebook AdvertisingLaunch Autumn

Top-Listings350 m searches on own and partner platform (30% mobile)


Market & Strategy

Financials

Outlook

13


2011 2012 2013 2014

-1,7-4,1

1,01,8

… and improving profitability* Media

Decrease of DA businessdriven by changed user behaviour from offline to online. Still, relevant profit contribution also for foreseeable future

Digital business withsignificant growthopportunities thanks to trend offline to online

16,424,2

2011 2012

11,17,7

2013 2014

Decreasing profit* contribution DA …

* EBITDA before non-recurring items, incl. platform cost and incl. website capitalisation

Financial transformation to a …

… digital company

14


20142011

-4.1 m€EBITDA*-0.6 m€

Customer Retention- Website Penetration- Churn

12%4%

1,023€

5%

15%43%

61%67%

1,523 €

29%41%32%

2014

1.8 m€

53%72%

1,608€

34 %

30 %29,6 %

Digital business improvements during past

three years clearly visible!

- Customer > 3 years5% 35 %- Customer > one product

Customer Acquisition- Website Penetration- 24-Months-Penetration - ARPA

15

* EBITDA before non-recurring items, incl. platform cost and incl. website capitalisation


Cost-optimization program with visible results:

● Fixed cost base/gen. admin -13%

● Selling & distribution -10%

*all figures in m€ and excluding non-recurring items

Revenue & EBITDA* in line with guidance

16

TG Group YTD 2014 YTD 2013 % D

Revenues 62,3 72,3 -14% -10,1

Cost of revenues 29,1 32,1 -9% -2,9

Gross profit 33,2 40,2 -17% -7,0

Gross profit % 53,3% 55,6%

Selling and distribution costs 25,9 28,8 -10% -2,9

General administrative expenses 9,5 10,9 -13% -1,4

Other operating income/expense 0,1 0,0 0,0

EBITDA w/o OTEs 9,4 12,0 -22% -2,6

TG Group YTD 2014 YTD 2013 % D

Revenues 62,3 72,3 -14% -10,1

Cost of revenues 29,1 32,1 -9% -2,9

Gross profit 33,2 40,2 -17% -7,0

Gross profit % 53,3% 55,6%

Selling and distribution costs 25,9 28,8 -10% -2,9

General administrative expenses 9,5 10,9 -13% -1,4

Other operating income/expense 0,1 0,0 0,0

EBITDA w/o OTEs 9,4 12,0 -22% -2,6


Non-recurring items – cost items

Non-recurring items – topics

Structural cost

reduction of

> 6 m€ p.a.

Temporarily very high non-recurring items is

driven by aggressive fixed-cost reduction …

17

m€ YTD 2014 YTD 2013 D

Non-recurring items Group total 7,1 2,9 4,2

thereof data costs 0,3 -0,2 0,5

thereof structural costs 6,8 3,1 3,7

thereof structural costs Media 2,8 1,8 1,0

thereof structural costs DA 4,3 1,1 3,2

m€ YTD 2014 YTD 2013 D

Non-recurring items Group total 7,1 2,9 4,2

thereof data costs 0,3 -0,2 0,5

thereof structural costs 6,8 3,1 3,7

thereof structural costs Media 2,8 1,8 1,0

thereof structural costs DA 4,3 1,1 3,2

YTD 2014 YTD 2013 D

Group total 7,1 2,9 4,2

Cost of revenues 2,1 0,7 1,5

Selling and distribution costs 1,4 1,2 0,2

General administrative expenses 3,7 1,4 2,3

Other operating income/expenses -0,1 -0,3 0,2

YTD 2014 YTD 2013 D

Group total 7,1 2,9 4,2

Cost of revenues 2,1 0,7 1,5

Selling and distribution costs 1,4 1,2 0,2

General administrative expenses 3,7 1,4 2,3

Other operating income/expenses -0,1 -0,3 0,2


2013*** 2014

2.17.8

2013 2014

-2.8 -3.3

Operating Cash Flow * (m€) Net Cash Flow * ,** (m€)

** Net Cash Flow: Operating CF + investing CF (w/o available for sale financialassets) +/- interest income/expenses

*** amount adjusted according to IAS 8

● Decrease in operating cash flow* driven by expenses of non-recurring items

● Investments (Capex) 2014 are on much lower level vs. 2013, compensating partially higher non-recurring items

* adjusted by effects related to data cost claims and tax payments following tax audit & data cost claims

Cash position of 26.9 m€ available to strengthen our digital businessCash position of 26.9 m€ available to strengthen our digital businessCash position of 26.9 m€ available to strengthen our digital business

… accordingly operating Cash Flow suffers

from expenses of cost reduction program

18

19Analyst presentation results 2014 19

● telegate AG claims for 86 Mio.€ plus interest

● German Federal Court has stated violation of cartel law by DTAG for data-records already in reclamation claims of telegate

● Reasoning:● Violation of cartel law by DTAG● Telegate was not able to spend more marketing at the times of market

liberalisation; therefore less market share in the directory business● Damage: loss of profit

Next milestone: Oral hearing scheduled for April 15 , 2015

Damage claim against Deutsche Telekom AG

19


Market & Strategy

Financials

Outlook

20


We sharpen our own digital presence …

… and further develop as online company

● New positioning and re-launch of our B2B brand

● Sharpen and widen our digital communication strategy

● Focus our SEO expertise to increase visibility of all our online activities

21


● Further development of customer journey and integrating of new products

● Investments in CRM and better qualityof customer service

Optimisation of our customer journey …

… will strengthen customer loyalty

22


Continued focus on automation and opti-

misation of the production processes …

… in order to offer high quality to our customers

● Shorter production times and significantly higher production quality through automated production processes

● Optimisation of packaged production and consistent production processes for new products

● Positive sales confirmation and proactive managing of customer communication

● Investment in qualification of SEM specialists& technical website producers

23


Revenues DigitalRevenues Digital

Double digit growth 2016 YoyDouble digit growth 2016 Yoy

ProfitabilityProfitability EBITDA** of 2-3 m€ in 2015EBITDA** of 2-3 m€ in 2015

… to boost growth in Digital Business

Investments in Digital Business …

Investments DigitalInvestments Digital

Net cash flow* 2015: -6 to -7 due to investments & business transformationNet cash flow* 2015: -6 to -7 due to investments & business transformation

24

*without data cost items **before non-recurring items


This presentation contains “forward looking statements” regarding telegate Group (telegate), includingopinions, estimates and projections regarding telegate’s financial position, business strategy, plans andobjectives of management and future operations. Such forward looking statements involve known andunknown risks, uncertainties and other important factors that could cause the actual results,performance or achievements of telegate to be materially different from future results, performance andachievements expressed or implied by such forward looking statements. These forward lookingstatements speak only as of the date of this presentation and are based on numerous assumptionswhich may or may not prove to be correct.

Whilst all reasonable care has been taken to ensure that the information and facts stated herein areaccurate and that the opinions and expectations contained herein are fair and reasonable, norepresentation or warranty, express or implied, is made by telegate with respect to fairness,completeness, correctness, reasonableness or accuracy of any information and opinions containedherein. The information in this presentation is subject to change without a prior notice, it may beincomplete or condensed, and it may not contain all material information concerning telegate. telegateundertakes no obligation to publicly update or revise any forward looking statements or otherinformation stated herein, whether as a result of new information, future events or otherwise.

Disclaimer

26


Backup

27


ISIN DE0005118806

63m EuroMarket capitalisation (December 31, 2014)

2.75 Euro52W low

6.40 Euro52W high

CDAX, Prime All Share, Technology All ShareIndices

Prime StandardTransparency standard

37k EuroAverage turnover per day (12-months)

19.111.091Outstanding shares

0.40 Euro/shareDividend 2013

Frankfurt and XetraOfficial market

2Liquidity class

Close Brothers Seydler Research AGMarket makers

Key data of the share

28


ISIN DE0005118806

Shareholder Structure

29

54,60%

18,54%

15,95%

10,91%

Freefloat:

SEAT Pagine Gialle

Golden Tree asset management Lux. S.à.r.l

(incl.Steven A. Tananbaum):

GL Europe Lux. S.à.r.l.


2014

37.0

1 before non-recurring items

2013

11.1

27.7

7.7

-25%

Revenues

EBITDA

-32%

1

DA business remains a very profitable due to revenu e & cost optimization

KPIs Directory Assistance `13 vs. `14

30


34.6

+1.8

2014

35.3

1 before non-recurring items

2013

1.0

Revenues

EBITDA1

Digital business displays steady improvement in pro fitability

KPIs Digital Business `13 vs. `14

31


Consolidated P & L

32

k€ 2014 2013 %

Continuing operations

Revenues 62.262 72.333 -14%Revenues DA solutions 27.678 37.032 -25%

Revenues Media 34.584 35.301 -2%

Cost of revenues -31.310 -32.793 -5%

Gross profit 30.952 39.540 -22%Gross profit in % 49,7% 54,7%

Selling and distribution costs -27.325 -30.001 -9%

General administrative expenses -13.150 -12.271 7%

Other operating income 140 317

Other operating expense -103 -33

EBITDA incl. non-recurring effects 2.287 9.110

non-recurring effects 7.149 2.917

EBITDA w/o non-recurring effects 9.436 12.027 -22%

Financial income 381 20

Income (loss) before income tax -9.105 -2.428

Income tax 2.334 783

Net income (loss) from continuing operations -6.771 -1.645

Discontinued operations

Net income (loss) from discontinued operations 376 -111

Net Income (loss) -6.395 -1.756

Earnings per share (in Euro) -0,33 -0,09

k€ 2014 2013 %

Continuing operations

Revenues 62.262 72.333 -14%Revenues DA solutions 27.678 37.032 -25%

Revenues Media 34.584 35.301 -2%

Cost of revenues -31.310 -32.793 -5%

Gross profit 30.952 39.540 -22%Gross profit in % 49,7% 54,7%

Selling and distribution costs -27.325 -30.001 -9%

General administrative expenses -13.150 -12.271 7%

Other operating income 140 317

Other operating expense -103 -33

EBITDA incl. non-recurring effects 2.287 9.110

non-recurring effects 7.149 2.917

EBITDA w/o non-recurring effects 9.436 12.027 -22%

Financial income 381 20


Income tax 2.334 783

Net income (loss) from continuing operations -6.771 -1.645

Discontinued operations

Net income (loss) from discontinued operations 376 -111

Net Income (loss) -6.395 -1.756

Earnings per share (in Euro) -0,33 -0,09


Consolidated balance sheet

33

in kEUR 2014 2013

Assets

Cash and cash equivalents 4.262 9.950

Trade accounts receivable 11.915 13.158

Current tax assets 145 499

Available for sale financial assets 22.606 30.128

Other financial assets 413 24.570

Other current assets 1.697 2.274

Total current assets 41.038 80.579

Tangible and intangible assets 20.921 25.770

Other non-current assets 15 15

Total non-current assets 20.936 25.785

Total Assets 61.974 106.364

Liabilities & Shareholders' equity

Current liabilities 11.888 40.273

Non-current liabilities 2.506 4.383

Shareholders' equity 47.580 61.708

Total liabilities & shareholders' equity 61.974 106.364

in kEUR 2014 2013

Assets

Cash and cash equivalents 4.262 9.950

Trade accounts receivable 11.915 13.158

Current tax assets 145 499

Available for sale financial assets 22.606 30.128

Other financial assets 413 24.570

Other current assets 1.697 2.274

Total current assets 41.038 80.579

Tangible and intangible assets 20.921 25.770

Other non-current assets 15 15

Total non-current assets 20.936 25.785

Total Assets 61.974 106.364

Liabilities & Shareholders' equity

Current liabilities 11.888 40.273

Non-current liabilities 2.506 4.383

Shareholders' equity 47.580 61.708

Total liabilities & shareholders' equity 61.974 106.364


Consolidated Cash Flow statement

34

in kEUR 2014 2013

Income (loss) from continuing operations -9.105 -2.428

Income (loss) from discontinued operations 376 -95


Depreciation & amortisation 11.840 11.701

Changes in operating assets & liabilities -1.643 -3.650

Interest income / expense -348 1

Income taxes paid -745 -10.876

Other items -466 770

Cash used in operating activities -91 -4.577

Purchase of assets -5.620 -10.746

disposal of subsidiaries -180 982

Purchase / disposal of other current financial assets 24.208 -24.209

Purchase / disposal of available for sale financial assets 7.507 -29.966

Interest received 394 125

Cash provided by (used in) investing activities 26.309 -63.814

Dividends paid to Seat Pagine Gialle S.p.A. und Telegate Holding GmbH -30.122 0

Dividends paid to free float -1.730 -14.014

Interest paid -53 -894

Cash used in financing activities -31.905 -14.908

Effect of exchange rate changes on cash and cash eq uivalents -1 -1

Change in cash and cash equivalents -5.688 -83.300

Cash and cash equivalents at the beginning of reporting period 9.950 93.250

Cash and cash equivalents at the end of reporting p eriod 4.262 9.950

in kEUR 2014 2013

Income (loss) from continuing operations -9.105 -2.428

Income (loss) from discontinued operations 376 -95


Depreciation & amortisation 11.840 11.701

Changes in operating assets & liabilities -1.643 -3.650

Interest income / expense -348 1

Income taxes paid -745 -10.876

Other items -466 770

Cash used in operating activities -91 -4.577

Purchase of assets -5.620 -10.746

disposal of subsidiaries -180 982

Purchase / disposal of other current financial assets 24.208 -24.209

Purchase / disposal of available for sale financial assets 7.507 -29.966

Interest received 394 125

Cash provided by (used in) investing activities 26.309 -63.814

Dividends paid to Seat Pagine Gialle S.p.A. und Telegate Holding GmbH -30.122 0

Dividends paid to free float -1.730 -14.014

Interest paid -53 -894

Cash used in financing activities -31.905 -14.908

Effect of exchange rate changes on cash and cash eq uivalents -1 -1

Change in cash and cash equivalents -5.688 -83.300

Cash and cash equivalents at the beginning of reporting period 9.950 93.250

Cash and cash equivalents at the end of reporting p eriod 4.262 9.950

Thank you for

your attention!

telegate AGFraunhoferstr. 12 a82152 Martinsried bei München

Tel 089/8954-0Fax 089/8954-1010

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