|By Marketwired .||
|August 6, 2014 07:00 AM EDT||
MONTREAL, QUEBEC -- (Marketwired) -- 08/06/14 -- Yellow Media Limited (TSX: Y)
-- Digital revenues across the Company's core YPG operations grew 10.8% year-over-year during the second quarter of 2014. -- Continued acceleration in the annual run-rate of customer acquisition, as YPG acquires 18,400 new customers during the twelve-month period ended June 30, 2014 as compared to 15,300 for the same period last year. -- Total digital visits across the YP, RedFlagDeals and ShopWise desktop and mobile properties reach 102.4 million during the second quarter of 2014, up from 100.1 million visits during the same period last year. -- Strong free cash flow generation of $42.1 million during the second quarter of 2014, as compared to $68.5 million during the same period last year. -- The Company records net earnings of $27.6 million during the second quarter of 2014, which compares to $50.3 million for the same period last year.
Yellow Media Limited (TSX: Y) (the "Company" or "Yellow Media") released its operational and financial results today for the second quarter ended June 30, 2014. The Company continues to execute upon the Return to Growth Plan (the "Plan"), a strategy dedicated at reacquiring revenue growth by helping Yellow Media gain a leadership position within Canada's local digital advertising market.
"The Return to Growth Plan supports our mission of championing neighborhood economies by allowing us to strengthen the relationships we foster between businesses and consumers," said Julien Billot, President and Chief Executive Officer of Yellow Media. "Completion of our Return to Growth Plan will provide Yellow Media with the resources required to enter new digital businesses and, ultimately, meet its long-term objective of becoming Canada's leading local digital company."
Second Quarter 2014 Financial Results
Revenues for the second quarter of 2014 decreased to $220.6 million, representing a 9.3% year-over-year decline. Consolidated revenues continue to be negatively impacted by ongoing declines in print revenues. For the three-month period ended June 30, 2014, print revenues decreased 22.5% year-over-year to reach $112.2 million, in line with prior quarters.
For the quarter ended June 30, 2014, digital revenues across our core YPG operations, which exclude the impact of Mediative, 411 Local Search Corp. ("411") and Wall2Wall, increased by 10.8% year-over-year. On a consolidated basis, digital revenues reached $108.4 million during the second quarter of 2014, growing 10.1% from the same period last year. Digital revenues represented 49.1% of total revenues for the second quarter of 2014, up from 40.5% during the same period in 2013.
Growth in digital revenues continues to be driven by the active migration of traditional media customers towards digital products and services. As at June 30, 2014, 63% of YPG customers were purchasing digital products, as compared to 61% the year prior. Digital revenue growth is also supported by the continued adoption of the Yellow Pages 360 degrees Solution among YPG's existing customer base. The customer penetration of the Yellow Pages 360 degrees Solution, which is defined as the percentage of YPG customers who purchase three product categories or more, grew to 32.9% as at June 30, 2014 compared to 21.1% for the same period last year.
EBITDA decreased to $81.3 million during the second quarter of 2014, as compared to $107.2 million the year prior. EBITDA remains adversely impacted by print revenue pressure and a lower EBITDA margin. The EBITDA margin decreased to 36.8% for the three-month period ended June 30, 2014, as compared to 44.1% for the same period last year. In addition to lower print revenues, EBITDA margins were adversely impacted by investments related to the Return to Growth Plan and employee related expenses.
For the second quarter ended June 30, 2014, the Company recorded net earnings of $27.6 million and basic earnings per share of $1.01. This compares to net earnings of $50.3 million and basic earnings per share of $1.81 for the same period last year. The decrease is mainly explained by lower EBITDA and a restructuring and special charge incurred during the second quarter of 2014.
Free cash flow during the second quarter of 2014 totaled $42.1 million, as compared to $68.5 million during the same period last year. This decline results mainly from lower EBITDA, a more stable working capital and higher income taxes paid in 2014, as the Company was not required to pay income tax installments in 2013. Following a $73.5 million mandatory redemption payment made on the senior secured notes on June 2, 2014, net debt totaled $515.7 million as at June 30, 2014, down from $533.1 million as at December 31, 2013.
"Successful execution of the Return to Growth Plan will strengthen the Company's financial profile and deliver long-term, sustainable value to shareholders," said Ginette Maille, Chief Financial Officer of Yellow Media. "The investments underlying the Plan are focused on returning Yellow Media to consolidated revenue and EBITDA growth by 2018, while also generating the free cash flow required to significantly delever the balance sheet over the next four years."
"The Return to Growth Plan is aimed at strengthening Yellow Media's relationship with consumers and local businesses," said Billot. "Having the right strategy is critical, and the Company will continue investing in growing the digital awareness of the Yellow Pages brand, enhancing the user experience across its media assets and delivering an improved end-to-end customer journey in order to grow customer acquisition and, ultimately, return Yellow Media to revenue and profitability growth."
Extending our Brand Promise
-- Yellow Media ran national and local campaigns to promote the download and use of the YP mobile application. A national television and digital campaign was launched in April 2014 to highlight the improved content and search functionalities available on the YP mobile application. Increased adoption of the YP mobile application was further supported through an extensive local, multimedia advertising initiative across Canada's largest urban markets in June and July 2014. -- The Company's national and local campaigns contributed positively to the usage of the YP mobile application, with average weekly downloads and visits having increased by 65% and 20%, respectively, when compared to pre-campaign periods. -- The Company launched radio and digital advertising campaigns in Montreal and Calgary to introduce prospective customers to its entry-level Booster Pack digital solution. To further promote customer acquisition, Digital Seminar Series were launched in Alberta and Atlantic Canada to educate small business owners on digital trends and strategies, as well as the solutions offered by YPG to help them champion local digital marketing.
Strengthening our Media Assets
-- Total digital visits, which measures the number of visits made across the YP, RedFlagDeals and ShopWise desktop and mobile properties, reached 102.4 million during the second quarter of 2014. This compares to 100.1 million visits for the same period last year. -- The YP mobile application received various acknowledgments on the App Store, including "Editor's Choice" and "Best New App" in May 2014, "Best of May 2014" and "Top Canadian-Made App" in June 2014. These recognitions followed the release of an enhanced version of the YP mobile application on the iPhone and iPad, providing users with an improved user interface, more relevant search results, a richer database of local business information and quicker search response times. -- The Company delivered a richer search experience on its ShopWise mobile application, introducing personalization features that allow users to select preferred categories of deals to appear on the homepage. A version of the RedFlagDeals.com mobile application was also officially launched and made available on the Android platform.
Enhancing our Go-to-Market Strategy
a) Promoting Customer Acquisition
-- The rate of customer acquisition continued to improve, with customer acquisition for the twelve-month period ended June 30, 2014 having totaled 18,400, up from 15,300 during the same period last year and 16,500 for the twelve-month period ended March 31, 2014. Total customer count was 265,000 as at June 30, 2014, compared to 291,000 at the end of the same period last year. -- Promoted by an acceleration in customer acquisition, digital-only customers increased to 29,400 as at June 30, 2014, compared to 19,700 at the same period last year and 26,100 as at March 31, 2014. -- Yellow Media acquired the remaining 70% interest of 411 for a purchase price of $22.7 million, net of cash acquired of $3.6 million. The acquisition results from the exercise of a put option by the other shareholders of 411, requiring the Company to acquire the remaining 70% interest of 411. 411 is the operator of 411.ca, an online search engine dedicated to finding people and local businesses in Canada. With a sales force of 60 call center representatives servicing approximately 15,000 digital customers nationwide, 411 holds a proven track record in lead generation, lead conversion and customer acquisition. The acquisition of 411 complements Yellow Media's Return to Growth Plan, allowing the Company to leverage the expertise of 411's sales team to best support its customer acquisition efforts.
b) Promoting Customer Retention
-- YPG experienced a customer renewal rate of 85% over the twelve-month period ended June 30, 2014, remaining stable versus the same period last year. -- In an effort to improve the customer experience and develop enhanced customer-facing tools, the Company launched a redesigned version of its B2B 360 degrees Solution website entitled the 360 degrees Business Centre (http://businesscentre.yp.ca/). The 360 degrees Business Centre delivers a simplified architecture and more appealing design, making it easier for existing and prospective customers to be informed on YPG's digital products and services, claim their listings and book consultations. -- A new version of Yellow Pages Analytics was developed, now featuring an easier-to-navigate interface, enhanced performance monitoring of customers' marketing activities, as well as the introduction of a Revenue Calculator to provide insight as to the contacts and revenues generated from customers' respective marketing campaigns.
Improving Business Efficiencies
-- In the context of a decline in print revenues, Yellow Media is presently consolidating and replacing its legacy print publishing systems, as well as reviewing its existing national print distribution model, to protect the profitability of the print platform. The Company is also enhancing core platforms and infrastructure, having consolidated eight of its IT data centers and replaced legacy telephony systems and exchange servers, to further promote cost savings across the organization.
Investor Conference Call
Yellow Media Limited will hold an analyst and media call at 1:00 p.m. (Eastern Time) on August 6, 2014 to discuss the second 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/second-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 August 6 to August 13, 2014 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside Toronto.
The conference passcode is 1997641.
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 August 6, 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 6 of our August 6, 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 For the six-month periods ended June 30, periods ended June 30, Yellow Media Limited 2014 2013 2014 2013 ---------------------------------------------------------------------------- Revenues $220,579 $243,183 $443,782 $496,460 Income from operations $56,331 $92,455 $129,633 $188,050 Net earnings $27,551 $50,326 $66,773 $103,791 Basic earnings per share attributable to common shareholders $1.01 $1.81 $2.45 $3.71 Cash flow from operating activities $57,823 $86,457 $68,733 $173,045 ---------------------------------------------------------------------------- EBITDA(1) $81,261 $107,234 $175,882 $222,712 EBITDA margin(1) 36.8% 44.1% 39.6% 44.9% ---------------------------------------------------------------------------- Weighted average number of common shares outstanding 27,188,087 27,872,822 27,302,919 27,913,722 ----------------------------------------------------------------------------
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.
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Oct. 9, 2015 11:45 AM EDT Reads: 115
SYS-CON Events announced today that Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, will keynote at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Oct. 9, 2015 11:15 AM EDT
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi's VP Business Development and Engineering, will explore the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context w...
Oct. 9, 2015 11:15 AM EDT
The IoT market is on track to hit $7.1 trillion in 2020. The reality is that only a handful of companies are ready for this massive demand. There are a lot of barriers, paint points, traps, and hidden roadblocks. How can we deal with these issues and challenges? The paradigm has changed. Old-style ad-hoc trial-and-error ways will certainly lead you to the dead end. What is mandatory is an overarching and adaptive approach to effectively handle the rapid changes and exponential growth.
Oct. 9, 2015 11:00 AM EDT Reads: 126
There will be 20 billion IoT devices connected to the Internet soon. What if we could control these devices with our voice, mind, or gestures? What if we could teach these devices how to talk to each other? What if these devices could learn how to interact with us (and each other) to make our lives better? What if Jarvis was real? How can I gain these super powers? In his session at 17th Cloud Expo, Chris Matthieu, co-founder and CTO of Octoblu, will show you!
Oct. 9, 2015 10:31 AM EDT
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, along with new ways to engage with users.
Oct. 9, 2015 10:00 AM EDT Reads: 170
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new data-driven world, marketplaces reign supreme while interoperability, APIs and applications deliver un...
Oct. 9, 2015 10:00 AM EDT Reads: 288
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Oct. 9, 2015 10:00 AM EDT Reads: 222
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of at least three separate application components: the software embedded in the device, the backend big-data service, and the mobile application for the end user's controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target - this makes the integration of these separate pipelines and the coordination of software upd...
Oct. 9, 2015 09:00 AM EDT Reads: 291
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text message to Betty – mobile messaging now offers tremendous value to businesses for customer and empl...
Oct. 9, 2015 08:30 AM EDT Reads: 287
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Oct. 9, 2015 07:00 AM EDT Reads: 5,881
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.
Oct. 9, 2015 06:00 AM EDT Reads: 1,415
The IoT is upon us, but today’s databases, built on 30-year-old math, require multiple platforms to create a single solution. Data demands of the IoT require Big Data systems that can handle ingest, transactions and analytics concurrently adapting to varied situations as they occur, with speed at scale. In his session at @ThingsExpo, Chad Jones, chief strategy officer at Deep Information Sciences, will look differently at IoT data so enterprises can fully leverage their IoT potential. He’ll share tips on how to speed up business initiatives, harness Big Data and remain one step ahead by apply...
Oct. 9, 2015 05:15 AM EDT Reads: 521
The broad selection of hardware, the rapid evolution of operating systems and the time-to-market for mobile apps has been so rapid that new challenges for developers and engineers arise every day. Security, testing, hosting, and other metrics have to be considered through the process. In his session at Big Data Expo, Walter Maguire, Chief Field Technologist, HP Big Data Group, at Hewlett-Packard, will discuss the challenges faced by developers and a composite Big Data applications builder, focusing on how to help solve the problems that developers are continuously battling.
Oct. 9, 2015 04:00 AM EDT Reads: 503
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
Oct. 9, 2015 04:00 AM EDT Reads: 570
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete end-to-end walkthrough of the analysis from start to finish. Participants will also be given the pract...
Oct. 9, 2015 03:00 AM EDT Reads: 296
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing these ideas and some early experiments performed in the Kurento open source software community in areas ...
Oct. 9, 2015 03:00 AM EDT Reads: 730
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust IoT ...
Oct. 9, 2015 02:00 AM EDT Reads: 2,223
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Oct. 9, 2015 01:45 AM EDT Reads: 7,032
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
Oct. 9, 2015 12:00 AM EDT Reads: 1,136