Interim report January-June 2011

Interim report January-June 2011

 

Second quarter: April - June 2011

  · Operating revenues totaled SEK 1,151 M (1,442), an organic decline
of 8 percent
  · Online revenues rose for the first time since 2009
  · EBITDA amounted to SEK 285 M (397), negatively affected by a
nonrecurring cost
of SEK 36 M for pension premiums
  · Net income amounted to SEK 55 M (-108)
  · Net income per share amounted to SEK 0.55 (-6.60)
  · Operating cash flow amounted to SEK 54 M (115), negatively affected
by a nonrecurring payment of SEK 70 M for pension premiums
  · Additional and planned amortization totaled SEK 209 M
  · Cost saving target for 2011 increased by SEK 50 M to SEK 250 M

First six months: January - June 2011

  · Operating revenues totaled SEK 2,117 M (2,709), an organic decline
of 10 percent
  · EBITDA amounted to SEK 405 M (567)
  · Net income amounted to SEK 2 M (-102)
  · Net income per share amounted to 0.02 SEK (-6.23)
  · Operating cash flow amounted to SEK -24 M (54), negatively affected
by a payment of
SEK 70 M for pension premiums and SEK 101 M for additional tax

Table included in attached PDF file

Johan Lindgren, Eniro's President and CEO, commented:

Eniro is now half way through the turnaround plan that was set in fall
2010. Similar to other media companies, Eniro finds itself in a process
of change caused by the transition from printed to digital media.
However, compared with similar companies, we have made significant
progress in that printed media currently accounts for a low percentage
of our revenues.

Our overall objective continues to be to turn around the negative
revenue trend by increasing the attractiveness of our core services,
broadening the offer and improving our sales efficiency, while
implementing cost adjustments. We continued our work according to this
plan in the second quarter. The organic revenue decline during the
second quarter amounted to 8 percent, an improvement compared with the
first quarter. Profitability was also improved and in Voice the EBITDA
margin increased to 36 percent after a price increase in the Swedish
operation.

Online revenues reported growth for the first time since 2009,
organically online increased by
10 percent. The order intake for online services is also increasing.
Mobile services remain the product with the highest growth rate for both
sales and usage, and we have strong positions in the growing
Scandinavian mobile advertising markets.

During the second quarter we made several improvements of our core
services, resulting in higher usability and better quality of search, We
have further introduced Proff in all of Scandinavia, differentiated the
mobile offering and improved our online service in Poland. A key
strategic move was made in May with the launch of Deals, signaling
Eniro's first ever participation in the transaction between buyer and
seller. With our large and diversified customer base, high usage, strong
brands and large sales force, we have an excellent starting point in the
growing coupon market and we are very pleased with the Deals venture to
date.

We are working on the challenge of improving our sales efficiency at the
same time as the complexity of our product range is increasing. Several
efficiency-enhancing measures have been taken. For example, our Swedish
customer service center, which receives more than 1,000 calls a day, has
started conducting sales activities, and the sales process in relation
to certain customer segments has been partly automated.

The rate of saving has exceeded plans and we increase the target for
this year's savings by SEK 50 M. In view of our current attractive
product portfolio and good market conditions, we have at the same time
decided to increase investments in additional sales personnel to enhance
our sales activities during the second half of the year, primarily in
search word marketing. We also expect increased costs for third party
collaborations and increased investment in the mobile channel.

In line with our strategy of focusing on profitable core operations,
Findexa Forlag, an operation in Norway that publishes a number of niche
publications and has not been reporting profitability in recent years,
was sold. The divestment will not have a significant impact on our
operations.

The revenue forecast remains unchanged while the cost target for 2011 is
increased. For 2011, a single-digit organic revenue decline is expected.
We estimate an organic improvement in the third quarter and a decline in
the fourth quarter, which has more scheduled print publications. A
turnaround to organic revenue growth is expected in 2012. Cost
reductions are expected to total SEK 250 M in 2011. In 2012, the cost
base is estimated to be reduced by an additional SEK 200 M.

Johan Lindgren,

President and CEO

For further information, please contact:

Johan Lindgren, President and CEO
Tel: +46 8 553 310 01

Mattias Lundqvist, CFO
Tel: +46 70-555 14 90

Lena Schattauer, Acting Head of IR
Tel: +46 70-595 51 00

Eniro AB (publ)
SE-169 87 Stockholm
Corp. reg. no. 556588-0936

www.eniro.com (http://www.eniro.com/)