|By Marketwired .||
|May 8, 2014 07:00 AM EDT||
MONTREAL, QUEBEC -- (Marketwired) -- 05/08/14 -- Yellow Media Limited (TSX: Y)
-- The Company experiences a 10.6% year-over-year growth in digital revenues across its core YPG operations during the first quarter of 2014 -- Customer penetration of the Yellow Pages 360 degrees Solution reaches 29.9% as at March 31, 2014, as compared to 18.9% last year -- The Company records net earnings of $39.2 million during the first quarter of 2014, as compared to $53.5 million for the same period last year -- A $73.5 million principal mandatory redemption payment on the 9.25% Senior Secured Notes is anticipated to be made on June 2, 2014 -- Yellow Media develops a Return to Growth Plan to support its digital transformation and return the Company to revenue growth and stable profitability
Yellow Media Limited (TSX: Y) (the "Company" or "Yellow Media") released its operational and financial results today for the first quarter ended March 31, 2014. The Company continues to advance the second phase of its digital transformation, designed to bring Yellow Media closer to its long-term objective of becoming Canada's leading local digital company.
"Supported by a healthier capital structure, the first phase of our transformation established a solid digital foundation for us to build upon," said Julien Billot, President and Chief Executive Officer of Yellow Media. "We are currently executing the second phase of our digital transformation, using this strengthened foundation to gain a leadership position within Canada's local digital advertising market while returning the Company to growth."
First Quarter 2014 Financial Results
Revenues for the first quarter of 2014 decreased 11.9% to $223.2 million, as compared to $253.3 million for the same period last year.
For the first quarter of 2014, digital revenues across our core YPG operations, which exclude the impact of Mediative and Wall2Wall, increased by 10.6% year-over-year. Consolidated digital revenues reached $104 million in the first quarter of 2014, representing a growth of 5.1%, and were negatively impacted by the loss of a national account at Mediative during the second quarter of 2013. During the first quarter of 2014, consolidated digital revenues represented 46.6% of total revenues, up from 39.1% during the same period in 2013.
Growth in digital revenues continues to result from the ongoing migration of traditional media customers towards digital products and services, as well as continued customer adoption of the Yellow Pages 360 degrees Solution. The penetration of the Yellow Pages 360 degrees Solution offering amongst Yellow Media's customer base, which is defined as customers who purchase three product categories or more, grew to 29.9% as at March 31, 2014 compared to 18.9% the year prior.
Print revenues continued to show stable declines during the first quarter of 2014, decreasing 22.7% year-over-year to reach $119.3 million.
EBITDA decreased to $94.6 million during the first quarter of 2014, as compared to $115.5 million last year. EBITDA remains adversely impacted by print revenue pressure and a lower EBITDA margin.
The EBITDA margin decreased to 42.4% for the three-month period ended March 31, 2014, as compared to 45.6% for the same period last year. The EBITDA margin for the first quarter of 2014 was primarily affected by lower print revenues, a change in product mix and investments required to advance the Company's digital transformation. The EBITDA margin for the first quarter of 2014 was also impacted by a non-recurring benefit associated with a litigation outcome. Excluding this element, the EBITDA margin for the first quarter of 2014 decreased to 41%.
In an effort to promote long-term profitability, the Company continues to invest in business efficiencies and the streamlining of operational processes. During the first quarter of 2014, YPG enhanced its digital fulfillment processes by automating the creation of Virtual Business Profiles. In addition, the Company is presently standardizing its existing legacy architecture through consolidation of print publishing systems and IT data centers.
For the first quarter ended March 31, 2014, the Company recorded net earnings of $39.2 million and basic earnings per share of $1.43. This compares to net earnings of $53.5 million and basic earnings per share of $1.91 for the same period last year. The decrease is mainly explained by lower EBITDA.
The Company used free cash flow of $3.3 million for the first quarter of 2014, as compared to free cash flow generation of $67.7 million last year. This decline results mainly from higher income taxes paid in 2014, as the Company was not required to pay income tax installments in 2013, lower EBITDA and higher restructuring payments related to the November 2013 workforce realignment.
Yellow Media expects to generate sufficient cash flow from its operations to invest in its digital transformation and service all future debt obligations. As at March 31, 2014, net debt totaled $541.2 million, which compares to $533.1 million as at December 31, 2013. On June 2, 2014, the Company anticipates making a $73.5 million mandatory redemption payment on its Senior Secured Notes.
"Yellow Media remains committed to delivering long-term, sustainable value to its shareholders," said Ginette Maille, Chief Financial Officer of Yellow Media. "We will increase shareholder value through execution of our digital transformation, thereby investing in projects that promote revenue growth and protect profitability. In addition, we will further strengthen and optimize our capital structure by maintaining a focus on debt repayment."
"Yellow Media's long-term objective remains unchanged, and we strive to develop into Canada's leading local digital company," said Billot. "The realization of this objective will come in multiple, distinct phases to be executed over the medium-to-long-term. As part of our second phase of transformation and Return to Growth Plan, we have focused our investments in projects that enhance our brand, media assets and go-to-market strategy, and, ultimately, improve our positioning within the local digital advertising market."
Extending our Brand Promise
-- The Company repositioned its flagship local search property from "yellowpages.ca" to "YP.ca" to boost brand recognition and strengthen the Company's digital identity. -- A television and digital advertising campaign was launched across Canada to grow usage and traffic on the YP mobile application. The campaign introduces Canadians to the new YP brand, while also highlighting the enhancements made on the mobile application to provide shoppers with an improved search experience.
Strengthening our Media Assets
-- Total digital visits, which measures the number of visits made across the YP, RedFlagDeals and ShopWise desktop and mobile properties, grew to 94.1 million. This compares to 93.8 million visits for the same period last year. -- The Company launched its redesigned YP online and mobile properties to provide users with more relevant search results, quick access to trending local search themes, an improved ability to discover local deals and popular merchants in and around their neighborhoods, as well as faster response times. -- Yellow Media expanded its database of business information by creating 250,000 new, more targeted business categories and adding richer information to its national and local merchant pages. The Company also continued the rollout of Merchant Content Collection Applications across its sales force to promote the real-time collection and publishing of customer information.
Enhancing our Go-to-Market Strategy
a) Promoting Customer Acquisition
-- Total customer count was 270,000 as at March 31, 2014, compared to 300,000 at the end of the same period last year. -- Customer acquisition for the twelve-month period ended March 31, 2014 stood at 16,500. The rate of customer acquisition continued to improve, with customer acquisition for the twelve month periods ended March 31, 2013 and December 31, 2013 having totaled 16,400 and 15,200, respectively. -- A new Customer Relationship Management platform was implemented across the Company's acquisition call centers, automating the routing and assignment of incoming leads to promote effective leads management and nurturing.
b) Promoting Customer Retention
-- The customer renewal rate declined slightly to reach 85% as at March 31, 2014, as compared to 86% for the same period last year. -- The Company remains committed to providing local businesses with the industry's most valuable, diversified and comprehensive digital services. Yellow Media recently launched Smart Digital Display across its sales channels, a display advertising solution that helps small and medium enterprises ("SMEs") build an online presence by exposing their digital banner ads to local online audiences. -- Yellow Media also introduced a social media solution to help SMEs establish and maintain visibility on Facebook. Currently being rolled out to customers in Ontario and Western Canada and anticipated to be launched nationally by June 2014, this solution provides customers with professional Facebook Page creation, optimization of their social media presence and Facebook Ad campaign management.
The Return to Growth Plan
Following the Company's progress in the first quarter of 2014, the Return to Growth Plan (the "Plan") has been established to efficiently guide the Company as it continues to execute upon its second phase of digital transformation. The Plan serves to leverage investments made in 2013, as well as the Company's strengthened digital foundation, to gain a leadership position within Canada's local digital advertising market.
Successful implementation of the Plan will be promoted through ongoing focus on the following pillars of transformation:
-- Extending the Brand Promise - Investments will be made to evolve legacy perceptions of the brand and boost awareness of the Company's platforms and solutions. A simplified brand architecture will be implemented, positioning Yellow Media as a differentiated, unique digital player within the local neighborhood economy. National multi-media campaigns will also be deployed to increase usage of its properties and promote customer acquisition. -- Strengthening its Media Assets - Investments will be made across the Company's owned and operated digital media to attract and grow audiences. Improved content and functionalities will be added onto the YP properties to help users best fulfill their daily needs. In addition, the Company will develop new verticals to deliver a more targeted search experience and expand Yellow Media's share of business search in underpenetrated categories such as shopping, restaurants, real-estate and leisure. An enhanced focus will also be maintained on evolving the Company's mobile and tablet properties and providing an upgraded on-the- go local search experience. -- Enhancing its Go-to-Market Strategy - The Company will evolve its suite of digital products and services by introducing simplified and more verticalized offerings, as well as performance-based solutions that best leverage the power of its owned and operated digital properties and protect profitability. In conjunction with improved customer acquisition and retention efforts, Yellow Media anticipates returning to a growth in customer count by 2017. An expanded sales force, as well as new technologies, processes and training programs, will be developed to promote an acquisition-centric sales culture throughout the organization. Furthermore, Yellow Media will enhance customer satisfaction by improving basic service levels and introducing more personalized levels of customer service to its clients. Lastly, Meditative will invest to strengthen its offerings to national agencies, customers and retailers. They will also engage in research, development and innovation within digital marketing to help support Yellow Media's ongoing transformation.
The Company has put in place an internal Transformation Office to implement the Return to Growth Plan. Reporting to the Chief Executive Officer, the Transformation Office will be led by Stephen Port, Vice President - Transformation Office, and assume full ownership and delivery of projects supporting the Plan.
"Successful execution of our Return to Growth Plan will significantly improve our relationship with Canadian businesses and audiences," said Billot. "Upon completion of the Return to Growth Plan, Yellow Media will be equipped with a strengthened platform onto which it can diversify, start new digital businesses and, ultimately, meet its objective of becoming Canada's leading local digital company."
The Plan is expected to allow the Company to achieve consolidated revenue growth by 2018. Digital revenues are anticipated to surpass print revenues in 2015 and grow at high single-digit annual rates thereafter. As print revenue stabilization remains challenging to forecast, the Company will continue to optimize the profitability of the print platform through redesigned offers, targeted directory distribution, as well as the streamlining of operational processes. Profitability will also be promoted through the automation of various digital fulfillment processes and improved productivity across our sales channels.
The Company will be required to make incremental operating and capital expenditures over the short-to-medium term to promote proper execution of the Return to Growth Plan. Consequently, EBITDA margins will remain under pressure relative to 2013, as additional investments will be made during the remainder of 2014 and in 2015 to strengthen the brand promise, improve the user experience and grow and maintain digital audiences.
Annual capital expenditures will increase to approximately $85 to $90 million in 2014 and $70 to $75 million in 2015 as the Company develops IT platforms to support growth in digital audiences, customer acquisition, customer retention and new product introduction.
By 2018, upon returning to revenue growth, the Company anticipates EBITDA margins to stabilize between 30% and 35% and capital expenditures to be maintained at approximately 5% of consolidated revenues.
"The Return to Growth Plan will significantly strengthen Yellow Media's financial profile, allowing it to maintain a sustainable level of revenue growth and profitability," said Maille. "In conjunction, the Company will continue to maintain an enhanced focus on debt repayment and aim to significantly delever its balance sheet by 2018."
The Company has made organizational changes to ensure it has the right expertise in place to implement the Return to Growth Plan. Among these changes, Rene Poirier, Chief Information Officer of Yellow Media, will lead the organization's Information Services and Information Technology functions and direct the end-to-end fulfillment of all related projects. Paul Ryan, previously Chief Technology Officer of Yellow Media, will become Mediative's Chief Technology Officer to support their growth in the Canadian national digital advertising market as well as foster an environment of continued digital innovation.
Investor Conference Call
Yellow Media Limited will hold an analyst and media call at 2:00 p.m. (Eastern Time) on May 8, 2014 to discuss the first quarter 2014 results. The call may be accessed by dialing (416) 340-2218 within the Toronto area, or 1 866 225-2055 outside of Toronto.
The call will be simultaneously webcast on the Company's website at http://www.ypg.com/en/investors/financial-reports/2014/quarterly-reports/first-quarter-webcast.
The conference call will be archived in the Investors section of the site at www.ypg.com.
A playback of the call can also be accessed from May 8 to May 15, 2014 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside Toronto.
The conference passcode is 3237581.
About Yellow Media Limited
Yellow Media Limited (TSX: Y) is a Canadian digital and print media company, offering businesses comprehensive media solutions to meet their key marketing objectives and providing consumers with platforms to access reliable local business information. By helping local businesses foster stronger relationships with their consumers through its various media, the Company encourages the growth of thriving neighbourhood economies. Yellow Media holds some of Canada's leading local search properties and publications including YP.ca, Canada411.ca and RedFlagDeals.com, the YP, ShopWise and RedFlagDeals mobile applications and Yellow Pages print directories. Yellow Media is also a leader in national digital advertising through Mediative, a division of Yellow Pages Group devoted to digital marketing and performance media services for national-scale agencies and customers. For more information, visit www.ypg.com.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements about the objectives, strategies, financial conditions, results of operations and businesses of the Company. These statements are forward-looking as they are based on our current expectations, as at May 8, 2014, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in section 7 of our May 8, 2014 Management's Discussion and Analysis. We disclaim any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available, as a result of future events or for any other reason.
Financial Highlights (in thousands of Canadian dollars - except share information) ---------------------------------------------------------------------------- For the three-month periods ended March 31, Yellow Media Limited 2014 2013 ---------------------------------------------------------------------------- Revenues $223,203 $253,277 Income from operations $73,302 $95,595 Net earnings $39,222 $53,465 Basic earnings per share attributable to common shareholders $1.43 $1.91 Cash flow from operating activities $10,910 $86,588 ---------------------------------------------------------------------------- EBITDA(1) $94,621 $115,478 EBITDA margin(1) 42.4% 45.6% ---------------------------------------------------------------------------- Weighted average shares outstanding 27,419,026 27,955,077 ----------------------------------------------------------------------------
In order to provide a better understanding of the results, the Company uses the term EBITDA, defined as income from operations before depreciation and amortization and restructuring and special charges. Management believes this measure is reflective of ongoing operations. This term is not a performance measure defined under IFRS. EBITDA does not have any standardized meaning and are therefore not likely to be comparable to similar measures used by other publicly traded companies. Management believes EBITDA to be an important measure.
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Aug. 27, 2016 11:00 AM EDT Reads: 2,339
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Aug. 27, 2016 11:00 AM EDT Reads: 3,956
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Aug. 27, 2016 10:15 AM EDT Reads: 1,877
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
Aug. 27, 2016 07:45 AM EDT Reads: 653
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Aug. 27, 2016 03:15 AM EDT Reads: 1,770
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
Aug. 27, 2016 02:30 AM EDT Reads: 2,004
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Aug. 27, 2016 01:45 AM EDT Reads: 1,734
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Aug. 27, 2016 01:15 AM EDT Reads: 2,016
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Aug. 27, 2016 12:45 AM EDT Reads: 2,938
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Aug. 26, 2016 10:00 PM EDT Reads: 1,861
SYS-CON Events announced today Telecom Reseller has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
Aug. 26, 2016 07:00 PM EDT Reads: 689
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
Aug. 26, 2016 04:45 PM EDT Reads: 1,553
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Aug. 26, 2016 03:15 PM EDT Reads: 509
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Aug. 26, 2016 10:15 AM EDT Reads: 3,600
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Aug. 26, 2016 05:00 AM EDT Reads: 3,064
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Aug. 25, 2016 11:45 PM EDT Reads: 2,326
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Aug. 25, 2016 09:15 PM EDT Reads: 2,250
Is the ongoing quest for agility in the data center forcing you to evaluate how to be a part of infrastructure automation efforts? As organizations evolve toward bimodal IT operations, they are embracing new service delivery models and leveraging virtualization to increase infrastructure agility. Therefore, the network must evolve in parallel to become equally agile. Read this essential piece of Gartner research for recommendations on achieving greater agility.
Aug. 25, 2016 05:15 PM EDT Reads: 801
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Aug. 25, 2016 01:00 PM EDT Reads: 2,642
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Aug. 25, 2016 08:45 AM EDT Reads: 2,168