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H1 09 Interim Resultsfor the six months ended 30 September 2008
11 November 2008
2
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 Risk Factors and cautionary language in the annual report posted on our website.
We also draw your attention to our press release which is posted on our website, for more information on the risks and uncertainties.
3
John Davis, CFO
John Condron, CEO
John Condron, CEO
Agenda
Financials
Introduction
Strategic update
FinancialsJohn Davis CFO
5
Headline results
Adjusted earnings figures stated before exceptional items and amortisation throughout this presentationNet Debt : EBITDA ratio calculated at consistent currency
Six months ended 30 September 2008 (£m) Actual Growth
Growth at constant
FX
Revenue 1,023.2 6.0% 1.0%
Adjusted EBITDA 344.3 7.7% 2.7%
Adjusted EBITDA margin 33.6% +0.5p p
Operating cash flow 338.7 20.3% 14.5%
Cash conversion 98.4% +10.3p p
Free cash flow pre exceptionals 181.8 53.5%
Adjusted diluted earnings per share 17.0p 16.4% 11.0%
Net Debt: EBITDA 4.7x -0.4x
6
Internet momentum continues
Revenue (m)Growth at
constant FX% of total revenue
UK £80.3 23% 23%
US $101.6 104% 11%
Spain €23.6 11% 11%
LatAm €7.4 42% 26%
Total £158 41% 15%
Sold momentum even stronger
7
Yell UK results
Six months ended 30 September2007£m
2008£m Change
Revenue
Printed directories 284.0 257.2 (9.4%)
Yell.com 65.1 80.3 23.3%
Other 13.2 12.5 (5.3%)
Yell UK 362.3 350.0 (3.4%)
Yell EBITDA UK 137.9 139.5 1.2%
Margin 38.1% 39.9%
Yell UK Cost 224.4 210.5 6.2%
8
Yellow Book USA results
Six months ended 30 September2007£m
2008£m Change
Revenue
Printed directories at 07/08 FX rate 414.8 408.7 (1.5%)
Yellowbook.com at 07/08 FX rate 24.9 50.7 103.6%
Yellow Book USA at 07/08 FX rate 439.7 459.4 4.5%
Exchange impact - 21.4
Yellow Book USA 439.7 480.8 9.3%
EBITDA
Yellow Book USA at 07/08 FX rate 125.7 130.1 3.5%
Exchange impact - 6.0
Yellow Book USA 125.7 136.1 8.3%
Margin 28.6% 28.3%
Yellow Book USA Cost at 07/08 FX rate 314.0 329.3 (4.9%)
9
4.5
9.3
(4.5)
2.0
5.9
4.8
2.9
0.6
0.9
1.6
Print SameMarketDecline
Launches Internet OrganicGrowth
Acquisitions GrowthBefore
Resheduling
Resheduling Total $ FX TotalReported £
Yellow Book USA revenue growth
Organic Growth 2.0%
Contribution to revenue growth (%)
10
Yell Publicidad results
Six months ended 30 September2007£m
2008£m Change
Revenue
Yell Publicidad at 07/08 FX rate 163.4 165.8 1.5%
Exchange impact - 26.6
Yell Publicidad 163.4 192.4 17.7%
EBITDA
Yell Publicidad at 07/08 FX rate 56.2 58.8 4.6%
Exchange impact - 9.9
Yell Publicidad 56.2 68.7 22.2%
Margin 34.4% 35.7%
Yell Publicidad Cost at 07/08 FX rate 107.2 107.0 0.2%
11
Yell Publicidad revenue growth
€m % growth
Revenue for 6 months to 30 Sept 2007 240.8
Organic (5.1) (2.1)%
Resheduling 14.2 5.9%
Discounted or non core operations (5.5) (2.3%)
Revenue at constant FX 244.4 1.5%
Latam FX (2.0) (0.8%)
Revenue 6 months to 30 Sept 2008 242.4 0.7%
12
344.3 338.7 (13.5)
168.3
(30.9)
(126.0)
181.8
AdjustedEBITDA
WorkingCapital
Capex OperatingCash Flow
Cash Interest Cash Tax Free CashFlow pre
Exceptionals
Exceptionals Free CashFlow
Cash
£m18.2
(23.8)
Group cash conversion 98%
13
Analysis of debt
Net Debt at 31 March 2008 (£3,759m)
Free cashflow pre exceptionals £182m
Dividend (£44m)
Exceptionals and other (£27m)
FX impact at closing rate (£163m)
Net debt at closing FX rate (£3,811m)
FX impact at effective LTM rate £203m
Net debt at 30 September 2008 at effective range
(£3,608m)
Natural hedging – debt denominated in currency of earnings
c.96% of debt fixed until September 2010 – gives stability
20% covenant headroom reinstated on future earnings
Cost of debt increased to just over 8%
14
Adjusted diluted earnings per share
Period ended 30 September 2007pence
2008 pence Change
Actual diluted EPS 10.7 10.9 1.9%
Exceptional (0.9) 1.0
Amortisation 4.8 5.1
Adjusted diluted EPS 14.6 17.0 16.4%
FX - (0.8)
Adjusted diluted EPS at constant FX
14.6 16.2 11.0%
15
Guidance
Q3 Organic revenue guidance– UK -6%
– US -4%
– Yell Publicidad -7%
Full year EBITDA guidance maintained as broadly flat at constant FX
Q3 EBITDA considerably lower than prior year due to timing of expenditure
Cash conversion 85-90% of EBITDA
Cash tax around 20% of adjusted PBT
16
Cost focus
£150 million previously announced
Flexing of discretionary cost this year
Additional cost savings being identified to offset further revenue pressure next year
Investment remains, particularly on internet
17
Financial summary
Robust start to the year
Continuing to invest
Cost management to protect EBITDA
Deleveraging continues
Strategic updateJohn CondronCEO
19
Managing in a downturn
Proving value – £24 return for every £1 spent in the UK
– Call counter in UK >40,000 lines
– Lead tracker in US > 37,000 lines
Investing for the future– Usage
– New product development
– Product rationalisation – Business Pages
– Mobile
20
Managing in a downturn cont/d…
Efficiencies and cost management– How we sell
– How we produce
– How we do things
Share shift continuing in US– 21% of all YP usages
– Shake out continues
21
Yellow Pages metrics
UK Spain
Dow
n 4
.7%
US
74% 72%Retention 87% 80%69% 71%
Advertisers
ARPA
No C
han
ge
Dow
n 8
.9%
Up
9.8
%
Dow
n 1
.5%
Dow
n 0
.6%
£1,268
£1,261
$2,404
$2,369
€712€782
Sept 07 Sept 08 Sept 07 Sept 08 Sept 07 Sept 08
204224
Sept 07 Sept 08
346 346
Sept 07 Sept 08
150 143
Sept 07 Sept 08
22
Internet usage growth
Sept 07 Sept 08 Sept 07 Sept 08 Sept 07 Sept 08
Up
48
%
Unique users(millions)
Unique visitors(millions)
Unique visitors
(millions)Yell.com Paginasamarillas.es
Up
78
%
Up
17
%
Yellowbook.com network from ComScore
Paginasamarillas.es network OJDSource: Yell.com ABCe
6.7
9.9
7.7
13.7
Yellowbook.com network
Rapid growth in Yell’s online usage
4.8
5.6
23
Internet momentum continues
UK Spain
Dow
n 5
3.9
%
USAdvertisers
RASAU
p 7
.7%
Up
2.4
%U
p 2
2.2
%
Up
88
.5%
€210
Sept 08
297
137
Sept 07 Sept 08
366394
Sept 07 Sept 08
$443
$235
Sept 07 Sept 08
£737
£603
Sept 07 Sept 08
213208
Sept 07 Sept 08
Investor Relations: Rob Hall +44 (0)118 950 6838
www.yellgroup.com
Yell, Queens Walk, Oxford Road, Reading, Berkshire RG1 7PT
™Trade mark of Yell Limited