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Yellow Pages Limited Reports First Quarter 2015 Financial Results


MONTREAL, QUEBEC--(Marketwired - May 8, 2015) - Yellow Pages Limited (TSX:Y)

--  Digital revenues grew 8.6% year-over-year to reach $112.9 million for
    the three-month period ended March 31, 2015. For the first quarter of
    2015, digital revenues represented 54.8% of total revenues.

--  The EBITDA margin was 34.4% for the three-month period ended March 31,
    2015. EBITDA totaled $70.8 million in the first quarter of 2015, as
    compared to $94.6 million for the same period last year.

--  The Company acquired 23,700 new customers over the twelve-month period
    ended March 31, 2015, up from 16,500 new customers the year prior. For

the twelve-month period ended March 31, 2015, YP's customer renewal rate

    remained stable at 85%.

--  Total digital visits grew 10.5% year-over-year to reach 104 million for
    the three-month period ended March 31, 2015. This compares to 94.1
    million visits across our network of digital properties during the same
    period last year.

--  The Company continues to invest in its verticalization strategy by
    providing merchants and users with more targeted solutions. As such, in
    March 2015, Yellow Pages launched YP Dine, a mobile application
    dedicated to the restaurant and dining sector.

--  The Company anticipates making a $34.2 million principal mandatory
    redemption payment on its 9.25% Senior Secured Notes on June 1, 2015.
    Total principal mandatory redemption payments in 2015 are expected to
    amount to approximately $100 million.

Yellow Pages Limited (TSX:Y) (the "Company") released its operational and financial results today for the first quarter ended March 31, 2015. The Company's Return to Growth Plan (the "Plan") continued to make strong progress, with investments concentrated on returning Yellow Pages to revenue and EBITDA growth in 2018.

"A number of initiatives are currently underway across the organization, dedicated to increasing awareness of Yellow Pages as a digital brand, delivering verticalized solutions to our customers and users, growing traffic to our digital properties and accelerating customer acquisition," said Julien Billot, President and Chief Executive Officer of Yellow Pages. "Ultimately, our Plan will strengthen our relationship with consumers and merchants and allow us to gain a leadership position within Canada's digital advertising industry."

First Quarter 2015 Financial Results

Revenues for the three-month period ended March 31, 2015 totaled $205.9 million, representing a 7.8% year-over-year decline. This compares favourably to a year-over-year revenue decline of 11.9% in the first quarter of 2014. The decline in revenues remains principally impacted by a lower customer count, as well as a decrease in spending among the Company's larger customers. Revenue decline rates in 2015 will continue to improve relative to 2014, driven by sustainable digital revenue growth and abatement in print revenue pressure.

Digital revenues for the quarter ended March 31, 2015 represented 54.8% of total revenues, up from 46.6% during the same period last year. Digital revenues increased 8.6% year-over-year to total $112.9 million, as compared to $104 million the year prior.

Growth in digital revenues is driven by customer acquisition and the ongoing migration of customers' print spend towards the Company's digital solutions. Digital-only customers grew to 40,800 as at the end of the first quarter of 2015, up from 26,100 at the same time last year, as the majority of newly acquired customers only purchase digital solutions. As at March 31, 2015, 65% of the Company's customer base was purchasing digital solutions.

During the first quarter of 2015, print revenues decreased 22% year-over-year to reach $93 million. Print revenue decline rates have stabilized, in part due to initiatives implemented to protect usage and adoption of the print directory. Yellow Pages is presently expanding its Print Product Simplification ("PPS") initiative to nearly all rural and urban markets. By increasing print advertisement sizes at little-to-no incremental cost to the customer, PPS promotes customer renewal while preserving content and usage of the print directory. PPS also simplifies the selling process for the Company's Media Account Consultants by reducing the number of print offers available for sale to customers.

EBITDA decreased to $70.8 million for the three-month period ended March 31, 2015, as compared to $94.6 million the year prior. EBITDA remains adversely impacted by print revenue pressure and investments related to the execution of the Company's Return to Growth Plan. The EBITDA margin for the first quarter of 2015 was 34.4%, as compared to 42.4% for the same period in 2014.

Net earnings for the first quarter of 2015 decreased to $25.5 million, as compared to $39.2 million for the same period last year, principally explained by lower EBITDA. For the quarter ended March 31, 2015, the Company recorded basic earnings per share of $0.95. This compares to basic earnings per share of $1.43 for the same period last year.

Free cash flow for the three-month period ended March 31, 2015 increased to $44.9 million, as compared to $3.3 million of utilized free cash flow for the same period in 2014. This increase is mainly attributable to net income taxes received of

$25.6 million, following the receipt of a tax settlement covering prior years. This compares to net income taxes paid of $34.5 million in the first quarter of 2014, as 2014 was a double taxation year. Growth in free cash flow was also impacted by improvements in the collections experience of the Company's trade receivables, partly offset by lower EBITDA.

Net debt as at March 31, 2015 totaled $455.1 million, as compared to $494.1 million as at December 31, 2014. On June 1, 2015, the Company anticipates repaying an additional $34.2 million of its 9.25% Senior Secured Notes, with total principal redemptions expected to amount to approximately $100 million for 2015 as a whole.

"The investments underlying the Company's Return to Growth Plan are geared at establishing the media, technologies and processes required to operate a strong, standalone digital business," said Ginette Maille, Chief Financial Officer of Yellow Pages. "Although 2015 will remain a heavy investment year for the Company, we expect to maintain EBITDA margins between 30% and 35% going forwards, allowing us to generate the free cash flow required to further strengthen the capital structure."

Operational Update

"We are rapidly evolving to best meet the digital needs of local shoppers and business owners," said Mr. Billot. "We continue to deliver verticalized solutions to businesses and users, and have recently introduced YP Dine, a new mobile application dedicated to helping Canadians discover the local tastes of their neighbourhoods. On the merchant front, we have added a digital content syndication product to our suite of marketing solutions, while introducing easy-to-use self-serve functionalities on our 360 degrees Business Center to provide customers with greater control of their digital marketing programs. Underlying these initiatives are ongoing investments in branding to grow traffic on our media and attract new merchants to our offerings."

Extending its Brand Promise

-- Investments in branding remain critical to the Company's ability to grow

awareness of its digital media and marketing solutions. During the first

    quarter of 2015, a media campaign dedicated to increasing user adoption
    of the YP and YP Shopwise mobile applications was rolled out in
    Vancouver, Calgary, Toronto and Montreal. In conjunction, seminar
    sessions were hosted in association with Chambers of Commerce and local
    business associations to promote Yellow Pages' digital solutions to
    business owners and position the Company as an expert in digital

--  Wall2Wall Media, a subsidiary of Yellow Pages Limited, announced a
    corporate name change to Yellow Pages NextHome in March 2015. Yellow
    Pages NextHome specializes in the Canadian real estate industry by

offering construction leaders, real estate brokers and agents, landlords

    and property management firms print and digital marketing solutions to
    help them connect with prospective buyers, sellers and renters. This
    rebranding reflects the Company's strategy to regroup all properties
    under the Yellow Pages brand to enhance awareness and recognition.

Strengthening its Media Assets

--  Total digital visits, which measures the number of visits made across
    the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411, Bookenda and

dine.TO online and mobile properties, grew to 104 million for the three-

month period ended March 31, 2015. This represents a year-over-year

growth of 10.5% relative to 94.1 million visits for the same period last


-- Yellow Pages launched its new restaurant application, YP Dine, in March

2015 to help Canadians discover and make dining choices in and around

their neighbourhoods. The application allows users to browse through

local bars and restaurants based on preference, mood, as well as time of

day and week. YP Dine also showcases editorial content written by

notable chefs, restaurant owners and food bloggers, while incorporating

transactional functionalities that allow users to access local deals and

make table reservations from their mobile phones. YP Dine is currently

available in the Montreal market, with Toronto, Vancouver and Calgary to

    be rolled out by summer 2015.

Enhancing its Customer Value Proposition

--  The Company's customer count totaled 251,000 as at March 31, 2015,
    compared to 270,000 as at the same period last year. This represents a
    decrease in the customer count of 19,000 customers for the twelve-month
    period ended March 31, 2015, down from 30,000 customers the year prior.

--  Customer acquisition for the twelve-month period ended March 31, 2015
    totaled 23,700, as compared to 16,500 the year prior. An enhanced leads
    management functionality was deployed on the Company's customer

relationship management platform during the first quarter of 2015, aimed

    at promoting self-prospecting, improving the management and assignment
    of new incoming leads, and growing conversion rates across sales

--  The Company launched its first ever content syndication solution,
    PresencePro, to help merchants keep their business information
    standardized and up to date across the digital marketplace. As part of
    the PresencePro solution, Yellow Pages will serve as merchants' single-
    point of contact for developing and updating comprehensive business
    profiles. In conjunction, the information will be automatically
    syndicated across YP's digital properties, in addition to over forty
    network partners including Google, Foursquare, Yahoo and MapQuest.

--  The renewal rate among Yellow Pages' customers remained stable year-
    over-year, landing at 85% for the twelve-month period ended March 31,
    2015. New features have been introduced within the Company's business-
    to-business 360 degrees Business Centre (
    to better address the evolving needs of YP's digital customers. In an
    effort to provide easy-to-use self-serve functionalities to customers
    and help them gain direct control of their digital marketing programs,
    the 360 degrees Business Centre now allows merchants to chat with

advertising experts and purchase entry-level placement products directly

through the online portal.

Investor Conference Call

Yellow Pages Limited will hold an analyst and media call at 2:00 p.m. (Eastern Time) on May 8, 2015 to discuss first quarter 2015 results. The call may be accessed by dialing (416) 340-2219 within the Toronto area, or 1 866 223-7781 outside of Toronto.

The call will be simultaneously webcast on the Company's website at

The conference call will be archived in the Investors section of the site at

A playback of the call can also be accessed from May 8 to May 15, 2015 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside Toronto.

The conference passcode is 1129606.

About Yellow Pages Limited

Yellow Pages Limited (TSX:Y) is a Canadian digital media and marketing solutions company that supports local economies by helping neighbourhood businesses reach new customers and foster stronger relationships with existing clients through its various media and products. Yellow Pages holds some of Canada's leading local online search properties including,,,, dine.TO and YP NextHome. The Company also holds the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411, Bookenda and YP NextHome mobile applications and Yellow Pages(TM) print directories. Yellow Pages is also a leader in national digital advertising through Mediative, a division of Yellow Pages devoted to digital marketing and performance media services for national-scale agencies and customers.

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 May 8, 2015, 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 May 8, 2015 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 percentage and per share information)


                                                For the three-month periods
                                                            ended March 31,
Yellow Pages Limited                                    2015           2014


Revenues                                            $205,902       $223,203
EBITDA(1)                                            $70,786        $94,621
EBITDA margin(1)                                        34.4%          42.4%
Net earnings                                         $25,524        $39,222
Basic earnings per share                               $0.95          $1.43
Cash flow from operating activities                  $62,834        $10,910
Free cash flow(1)                                    $44,892        



Non-IFRS Measures(1)

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 is therefore not likely to be comparable to similar measures used by other publicly traded companies. Management believes EBITDA to be an important measure. As well, free cash flow is a non-IFRS measure generally used as an indicator of financial performance. It should not be seen as a substitute for cash flow from operating activities. Free cash flow is defined as cash flow from operating activities, as reported in accordance with IFRS, less an adjustment for capital expenditures. Free cash flow is not a standardized measure and is not comparable with that of other public companies.

Investor Relations
Amanda Di Gironimo
Director, Corporate Planning
and Investor Relations
(514) 934-2680

Fiona Story
Director, Public Relations
and Corporate Communications
(514) 934-2672

Source: Yellow Pages Limited