Two global directory companies at different stages of transformation reported their 2012 earnings this week. Eniro and Yellow Media both reported deep print declines, as well as progress in repairing balance sheets burdened by debt. Mobile development was a high point for both companies with strong customer and usage growth. Both companies similarly experienced their worst revenue declines among their largest advertisers.
Here are some quick highlights from the two earnings calls.
Canada’s Yellow Media generated total revenue of C$1.1 billion in 2012, down 16.6 percent from C$1.3 billion in 2011. Excluding sold assets and discontinued directories (leftover from its Canpages acquisition), the real decline was 11.9 percent. Print revenues dropped 24.6 percent to C$740 million. Online grew 6.1 percent to C$367 million. The adjusted growth rates for print and online were (21.2 percent) and 15.7 percent respectively.
Online now accounts for 38 percent of Yellow Media’s total revenue, up from 29 percent in 2011.
Mobile was a strong area for YPG in 2012, with the company claiming 25,000 mobile advertisers and nearly 50,000 mobile ad units.
New customer acquisition is one area of concern for Yellow Media. In 2012, the company acquired 17,000 new customers, compared with 23,000 new advertisers in 2011. YPG ended 2012 with 309,000 advertisers and an 86 percent retention rate.
Large advertisers account for much of YPG’s lost revenue. The company launched initiatives in 2012 to stem losses among its biggest customers, including the Digital Power Play (optimizes digital presence to maximize lead generation) and the High Priority Accounts initiative, which provides advertising solutions tailored to specific advertisers based on detailed customer profiles.
Finally, the company earned itself some breathing room on its debt with a recapitalization completed late last year. The recap reduced Yellow Media’s total debt as well as extended maturities.
On today’s 2012 earnings call, Eniro CEO Johan Lindgren declared that the Swedish search and directory company has completed its print to digital transformation. That doesn’t mean Eniro lacks significant challenges, most notably insufficient digital growth.
“The transformation is done in the sense that we now see a stable long tail in print and voice. Print is down but it is a profitable business,” Lindgren said. “We will have print in our portfolio even for the longer term. But it is now at such a level that it can no longer jeopardize the total earnings of Eniro.”
Eniro had total revenues of SEK4 billion in 2012 (about $615 million) excluding its voice business. Eniro finished the year with 77 percent of its advertising revenues coming from digital sources.
Online growth was 6 percent for the year, but on a comparable basis, the rate was just 2 percent. Lindgren acknowledged that mobile, which grew 116 percent, helped bring digital revenue into the black. The company has set a target of at least 6 percent real growth in 2013.
“We need to grow both (online and mobile) to reach the 6 percent target,” Lindgren said.
Mobile ad revenue totaled 150 million SEK (US$23 million) in 2012, which represents about 7 percent of online directory revenue. Mobile is expected to double in 2013. Mobile also accounts for about 25 percent of Eniro’s online directory usage.
Update: The Australia directory publisher Sensis also announced its half year results this week. Sensis, which is a unit of the Australian telecom Testra, operates on a financial year ending June 30. The results show an increasingly difficult environment for print in Australia.
For the six months ending December 31, Sensis generated A$479 million in revenue, which is a 12.6 percent decline over the previous 1H. Print revenue declined by 27.9 percent, partly due to the rescheduling of the Brisbane directory from 1H to 2H. Digital revenue was up 11 percent to A$201 million. Other revenue was down 12.6 percent to A$76 million.
Adjusting for schedule shifts, White Pages (print and online) was down 8 percent and Yellow (print and online) was down 22 percent.
Because Sensis books revenue at publication, its financial first half is less meaningful than the second half, when most of its biggest directories hit the street. Sensis generates two-thirds if its revenue and 80 percent of its EBITDA in the second half of the financial year.