PagesJaunes Groupe: Third-quarter revenues 2010: acceleration of Internet growth

Regulatory News:

On the announcement of PagesJaunes Groupe's (Paris:PAJ) revenues for the third quarter of 2010, Jean-Pierre Remy, Chief Executive Officer, said:

"In the third quarter of 2010, the Group accelerated the growth in its Internet revenues, which exceeded 9%, a level we had not achieved for over 18 months.”

"We are continuing our investments in our Internet sites, which are developing very rapidly. The growth in our Internet audience amounted to 30.2% in the first nine months of 2010, including +12% in France; our mobile Internet audience rose by a factor of 2.5. This audience is very beneficial for our customers, for whom we are providing an increasing number of websites; the Group occupies a leading position in business websites, with almost 75,000 sites under management.”

"The Group has continued its Internet investments while pursuing its cost reduction efforts, thereby enabling it to maintain the level of its GOM margin rate. The Group confirms its forecast of a GOM between €510 million and €530 million in 2010.”

I. Growth of 30.2% in the audience of the Group’s Internet sites in the first nine months of 2010

• The Internet audience of the Group’s sites increased strongly in the first nine months of 2010, with 1,444.9 million visits, a rise of 30.2% compared to the same period in 2009. In France, the Group’s sites recorded 1,039.2 million visits, a rise of 11.8% compared to 2009, and recorded 18.9 million unique visitors in September 2010 (47.6% of Internet users).
• PagesJaunes Groupe’s spectacular audience growth on mobile Internet is continuing. The audience grew by a factor of 2.5 in France in the first nine months of 2010 compared to the same period in 2009, and amounted to 59.9 million visits (6.1% of the fixed Internet audience). By the end of September 2010, the PagesJaunes and Mappy applications had been downloaded 3.1 million and 1.5 million times to all types of smartphones in France.
• The new services and content that will be the source of future growth are continuing to be launched successfully, as demonstrated by the rapid development of user generated contents. The number of reviews posted by visitors to pagesjaunes.fr reached 214,000 on 30 September 2010, and covered 107,000 businesses.
• In the third quarter of 2010, annoncesjaunes.fr ranked second in the market for business real-estate small ads in France with over 800,000 small ads online. Annoncesjaunes.fr recorded 2.3 million unique visitors in September 2010.

II. Acceleration of growth in the Group’s Internet revenues

Consolidated revenues decreased by 2.6% in the third quarter of 2010 and by 3.1% to €839.8 million in the first nine months of 2010. The Internet accounted for 47.4% of revenues (+4.2 points compared to 2009), representing growth of 6.3%.

The PagesJaunes in France segment saw its revenues decrease by 3.9% to €787.7 million in the first nine months of 2010:

• The decrease in revenues from printed directories amounted to 9.3% to €392.5 million in the first nine months of 2010. The decrease in revenues from printed directories relates to directories marketed in the first quarter of 2010.
• Internet revenues (pagesjaunes.fr, annoncesjaunes.fr, websites and mobile Internet) grew +4.0% to €357.8 million in the first nine months of 2010. This growth increased slightly in the third quarter of 2010 at 5.2%. However this increase was limited by an accounting recognition of revenues spreading out over the duration of contracts with advertisers (12 months in general).
• The growth of the new Internet services has been confirmed. With 52,000 Internet Visibility Packs (IVPs) and a total of almost 75,000 business websites as at 30 September 2010, PagesJaunes has confirmed its leadership in this market in France.

The revenues of the International & Subsidiaries segment amounted to €61.6 million in the first nine months of 2010, a rise of 15.8%, due to an increase of 54.4% in Internet revenues:

• The directories and search segment advanced 0.9% due to the 56.8% growth in Internet revenues, particularly from QDQ Media in Spain and the acquisition of 123people and Keltravo, which contributed €5.2 million in the first nine months of 2010.
• The contribution from the Horyzon Média Internet advertising representation segment to consolidated revenues amounted to €8.6 million in the first nine months of 2010, compared to €3.5 million in 2009. The gross revenues of Horyzon Média billed to advertisers amounted to €16.3 million, a rise of 37% compared to 2009.
• The revenues from direct marketing and geographic services rose 17.7% in the first nine months of 2010, due to a rebound in activity in the third quarter of 2010.

III. Trend in the financial situation

Three important facts should be emphasised:

• 14.1% headroom under the bank covenant on net debt to GOM.
• Bank debt hedged 88% against interest rate rises until the end of 2011.
• Bank debt maturing at the end of 2013.

Following the payment of a dividend of €182 million, the net financial debt of PagesJaunes Groupe amounted to €1,889.3 million as at 30 September 2010, compared to €1,941.0 million as at 30 September 2009.

• PagesJaunes Groupe's bank debt, amounting to €1,950 million, is repayable in full at the end of 2013. PagesJaunes Groupe also has a credit line of around €400 million granted by a diversified syndicate of banks and expiring at the end of 2013.
• PagesJaunes Groupe's bank debt is 88% hedged against rises in interest rates by a portfolio of interest rate swaps and collars maturing at the end of 2011, and 46% by forward swaps maturing at the end of 2013.
• As at 30 September 2010, the Group had 14.1% headroom under the covenant on its financial leverage ratio, which stood at 4.25 x compared to 4.40 x on 30 June 2010, with net debt amounting to 3.65 times an aggregate close to GOM, and 59.3% headroom under the covenant on its interest coverage ratio, which stood at 3.75 x compared to 3.50 x on 30 June 2010, with an aggregate close to GOM amounting to 5.97 times the net interest expense.

IV. Outlook

PagesJaunes Groupe is maintaining its financial targets for 2010:

• Decrease in revenues, in the low end of the range of -1% to -3%.
• GOM held at between €510 million and €530 million taking into account the continued investments in fixed and mobile Internet.
• Maintenance of a high dividend policy.

About PagesJaunes Groupe

PagesJaunes Groupe is the leader in France in local advertising and information, generating consolidated revenues of over €1.1 billion in 2009. PagesJaunes’ services can be accessed in particular through printed directories (the PagesJaunes and PagesBlanches directories), directory enquiry services by telephone and SMS (118008) and the Internet. PagesJaunes Groupe’s fixed and mobile Internet sites, primarily pagesjaunes.fr, mobile.pagesjaunes.fr, mappy.com and annoncesjaunes.fr, are visited by more than one Internet user in two in France each month.

PagesJaunes Groupe has a sales force of more than 2,200 sales advisers in France and Spain and provides a comprehensive range of advertising products for its 770,000 local and national advertising customers. With over €500 million of Internet revenues in 2009, representing 43% of consolidated revenues, PagesJaunes Groupe ranks first in Europe in terms of Internet advertising revenues.

PagesJaunes Groupe is listed on NYSE Euronext Paris - compartment A (PAJ). Information on PagesJaunes Groupe is available at http://www.pagesjaunesgroupe.com

This document contains forward-looking statements. Although PagesJaunes Groupe believes its expectations are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among other things: the effect of competition; PagesJaunes usage level; the success of the investments of the PagesJaunes Group in France and abroad; the effects of the economic situation. A description of the risks borne by the PagesJaunes Group appears in section 4 "Facteurs de risques" of the "Document de Référence" of PagesJaunes Groupe filed with the French financial markets authority (AMF) on 25 March 2010. The forward-looking statements contained in this document apply only from the date of this document, and PagesJaunes Groupe does not undertake to update any of these statements to take account of events or circumstances arising after the date of the said document or to take account of the occurrence of unexpected events. All the accounting data are presented in unaudited consolidated form.