Business News

Yellow Media Inc. Reports Fourth Quarter and 2010 Financial Results

Friday 11. February 2011 - -Significant investments made in 2010 to further accelerate business transformation -Record annualized online revenues of $495 million -Online revenues now represent 29% of consolidated revenues

Yellow Media Inc. (TSX:YLO) announced fourth- quarter and full-year results today, capping off a year of progress in YPG’s transformation into Canada’s leading performance media and marketing solutions company. During the quarter, the Company successfully completed its conversion from an income trust to a corporate structure. Trading of the common shares of Yellow Media Inc. on the Toronto Stock Exchange commenced on November 1, 2010, under the symbol “YLO”.
For the fiscal year ending December 31, 2010, net earnings were $274.0 million compared to $208.9 million in 2009. Income from operations stood at $515.8 million versus last year’s $395.7 million.
Revenues grew 2.4% from the prior year’s $1.64 billion to reach $1.68 billion. EBITDA declined from $893.4 million in 2009 to $850.3 million in 2010. Excluding non-recurring items1, EBITDA grew 1% to reach $898.8 million, as compared to the prior year. EBITDA on a reported basis is net of non-recurring costs aggregating $48.5 million for the year. These costs are related to the Company’s conversion to a corporate structure and to its rebranding efforts.
Online growth remained strong during the fourth quarter. Combined online revenues for Directories and Vertical Media were $123.4 million, or approximately $495 million on a fourth- quarter annualized basis. This represents organic growth of 16% for the year.
“We are encouraged by the progress we have made during 2010 to transform our business. With continued focus on operational excellence and strategic investments, we are now Canada’s #1 internet company” said Marc P. Tellier, President and Chief Executive Officer of Yellow Pages Group. “Consumers are benefiting from a richer user experience while our sales professionals are now better equipped to offer the right solutions that fit our advertisers’ evolving needs.”
Fourth-Quarter Results
For the fourth quarter ended December 31, 2010, Yellow Media Inc. reported a loss of $2.3 million compared to net earnings of $128.4 million during the same prior-year period due to non-recurring costs and amortization of intangibles from business acquisitions. Income from operations stood at $79.1 million versus $164.6 million for the same quarter in 2009.
Fourth-quarter revenues were $422.8 million, as compared to $405.7 million in the last quarter of 2009. Meanwhile, EBITDA declined from $219.3 million to $192.7 million during the same period. EBITDA excluding non-recurring items1 grew 3% to reach $225.2 million. EBITDA on a reported basis is net of non-recurring items aggregating $32.5 million for the quarter.
Directories
Full-year 2010 revenues in the Directories business were $1.37 billion compared with $1.39 billion in 2009. EBITDA excluding non-recurring items1 was $805.0 million compared with $821.9 million in the prior year, representing an EBITDA margin of 59.0%, unchanged from 2009.
For the fourth quarter of 2010, revenues decreased by 1% from $345.4 million to $340.6 million. EBITDA excluding non-recurring items1 was $198.8 million compared with $203.2 million for the prior year, representing an EBITDA margin of 58.4% compared with 58.8% in 2009.
Business Transformation Gaining Traction
In 2010, YPG entered into a significant number of strategic partnerships and acquisitions that are enriching its online and mobile offerings and setting the stage for future growth.
They include the acquisition of Canpages, to further YPG’s online reach and expand its sales force; Clear Sky Media, to add RedFlagDeals.com and other leading online shopping destinations to YPG’s portfolio; Restaurantica.com, aggregating Canada’s largest online restaurant/dining community; and the 411.ca brand.
During the year, YPG also launched Mediative, a digital advertising and marketing solutions provider for national agencies and advertisers. Concurrent with the launch of Mediative, YPG acquired Enquiro, Ad Splash and UPTREND Media and entered into an exclusive licensing agreement with Acquisio to accelerate Mediative’s market positioning.
YPG continued to focus on improving the user experience and enhancing the advertiser value proposition. In 2010, YPG expanded its network of properties, made significant investments to enhance its YellowPages.ca flagship site that now includes a top-of-the-line mapping function, and expanded its digital product and service portfolio.
New product launches included YPG’s Search Engine Solutions, composed of Search Engine Marketing (SEM) and Search Engine Optimization (SEO). With its SEM offering, YPG works closely with advertisers to build and manage effective paid-search advertising campaigns across multiple search engines including Google, Yahoo! and Bing. SEO solutions help advertisers improve their website rankings on search engines and ultimately attract new customers.
In addition, YPG introduced Deal of the Day from RedFlagDeals.com, an innovative way for consumers to shop for local goods and services whereby consumers get daily deals that are activated if enough people want to buy it.
Vertical Media
Driven by strong performance from Dealer.com, full-year revenues grew 27% to $314.6 million compared with $247.9 million in 2009. Trader’s real estate and generalist verticals remained impacted by market conditions while the automotive category improved due to the strength of Dealer Smart Solutions.
As at December 31, 2010, 3,430 unique advertisers had subscribed to Dealer Smart Solutions out of a total of 7,470 commercial vehicle advertisers. Building on this success, the roll-out of Dealer Smart Solutions continued and was expanded to the non-passenger vehicle segment during the year.
EBITDA excluding non-recurring items1 for 2010 was $93.9 million compared with $71.5 million a year ago, which represents an EBITDA margin of 29.8% compared with 28.9% in 2009.
Meanwhile fourth-quarter revenues grew 36.3% to $82.2 million, once again fueled by Dealer.com. Trader’s organic trend continued to improve, with positive growth in the commercial vehicle segment.
Fourth-quarter EBITDA excluding non-recurring items1 was $26.4 million compared to $16.1 million during the same period in 2009. Given these positive trends, cyclical revenue pressures appear to be abating.
In 2010, Trader acquired CanadianDriver.com, an online magazine showcasing automotive articles and reviews. This acquisition has enriched Trader’s offering and extended its online and mobile leadership in the automotive category.