European Yellow Pages Case

Over 2008-2015 Total Revenues went down by 27% under a scissors effect:

- Non internet revenues divided by 3; and Internet revenues increased by 25% only over the period.

- Not enough to fully compensate for the fall of printed revenues.

- EBITDA margin went down by 15% (from 44.8% to 31%).

- Mobile revenues grew rapidly and account for more than 34% of total revenues in 2014 (vs 11% in 2011).

 

 Losing comparative advantage as customers shift to online and mobile publishing, using Google, Yahoo…

  Not transforming the business fast enough to compensate yearly print revenue decline (minus 15% p.a) by online and mobile revenues (+9% p.a.).  

The high-speed transition is vital for the survival of these companies.

- EBITDA margin was at a high 42-45% in 2008. - From 2005 onwards key players were acquired by Top Tier Buy Out funds. - high brand awareness.
- minimum scale is needed to acquire an audience/user base sufficiently large. - the recruitment, training and motivation of a large sales force is time and cash consuming. - significant investment are required to obtain up-to-date SME databases. - long-term customer relationships are essential.

Disruptive factors came with internet search engines: Yahoo, Google, Bingo...

Financial difficulties started with the increased penetration of internet search engines. Pages Jaunes, Yell, SEAT and Truvo lost ground and could not anticipate a sharp decline of their revenues.