• Digital revenues for the year ended December 31, 2015 grew 9.8% year-over-year to reach $486.3 million, representing 58.6% of total revenues. For the fourth quarter ended December 31, 2015, digital revenues grew 10.5%  year-over-year to total $129.2 million, representing 62% of total revenues.
• EBITDA adjusted for restructuring and special charges ("Adjusted EBITDA") totalled $260.7 million in 2015, as compared to $316 million in 2014. The Adjusted EBITDA margin reached 31.4% in 2015, down from 36% the year prior. Adjusted EBITDA remained relatively stable in the fourth quarter ended December 31, 2015 at $64.5 million, as compared to $64.8 million the year prior. The Adjusted EBITDA margin during the fourth quarter of 2015 also remained stable at 30.9%, as compared to 30.1% the year prior.
• Yellow Pages made total principal mandatory redemption payments on its 9.25% Senior Secured Notes (the "Notes") of $100.3 million in 2015, reducing its outstanding balance to $406.7 million as at December 31, 2015. Since the Notes' inception on December 20, 2012, the Company repaid a total principal of $393.3 million on the Notes.
• The Company's customer count reached 245,000 customers as at December 31, 2015, as compared to 256,000 customers as at the same time last year. Yellow Pages acquired 30,800 new customers during the twelve-month period ended December 31, 2015, up from 22,100 new customers in 2014, in line with the Company's previously stated guidance of 30,000 new customers in 2015. The customer renewal rate also saw improvements, growing from 84% in 2014 to 85% for the twelve-month period ended December 31, 2015.

MONTREAL, Feb. 11, 2016 /CNW Telbec/ - Yellow Pages Limited (TSX: Y) (the "Company") released its operational and financial results today for the year and fourth quarter ended December 31, 2015, demonstrating timely and successful execution of its Return to Growth Plan.

"We are seeing tangible signs of progress related to the implementation of our Return to Growth Plan," said Julien Billot, President and Chief Executive Officer  of Yellow Pages. "We are on track to stabilizing our customer count, a milestone supported by accelerated customer acquisition and a strong customer renewal rate. With over $486 million in digital revenues, Yellow Pages has now grown to become one of Canada's most notable digital advertising companies, developing rich and diversified media and marketing solutions to best connect Canadian consumers and local businesses."

Full Year 2015 Financial Results
Revenues in 2015 decreased 5.4% year-over-year to reach $829.8 million, as compared to $877.5 million for the same period last year.

Digital revenues grew 9.8% year-over-year to total $486.3 million in 2015, as compared to $442.8 million the year prior. For the twelve-month period ended December 31, 2015, digital revenues represented 58.6% of total revenues, up from 50.5% in 2014.

Growth in digital revenues remains driven by the accelerated acquisition of digital customers, as well as continued growth in digital spending among the Company's renewing customers. Digital-only customers grew to 54,500, or 22% of the customer base, as at December 31, 2015. This compares to 37,000 digital-only customers, or 14% of the customer base, as at the same period last year. Digital revenue growth was also favourably impacted by the acquisition of the ComFree/DuProprio Network ("CFDP") on July 1, 2015. Excluding the contribution of CFDP, digital revenues in 2015 grew by approximately 6% year-over-year.

Print revenues decreased 21% year-over-year to reach $343.4 million in 2015, adversely impacted by a decline in the number of print customers and the migration of customers' print marketing spending to digital. Print revenue decline rates have, however, stabilized, in part supported by content enhancement and pricing initiatives that have helped to protect customers' investment in print advertising.

Adjusted EBITDA totalled $260.7 million in 2015, as compared to $316 million the year prior. Adjusted EBITDA in 2015 was principally impacted by revenue pressure and a change in product mix, partly offset by benefits realized from cost saving initiatives and lower employee related expenses. The Adjusted EBITDA margin for the year ended December 31, 2015 reached 31.4%, as compared to 36% in 2014.

Free cash flow for the year ended December 31, 2015 totalled $122.1 million, up from $72.6 million in 2014. The increase in free cash flow was mainly attributable to a favourable change in cash income taxes of $98.2 million, partly offset by lower Adjusted EBITDA.

Net debt reached $430.6 million as at December 31, 2015, down from $494.1 million the year prior. The Company made $100.3 million in principal mandatory redemption payments on the Notes over the course of 2015, reducing the balance of Notes outstanding to $406.7 million as at December 31, 2015. Since their inception on December 20, 2012, the Company made total principal repayments of $393.3 million on its Notes.

Net earnings for the twelve-month period ended December 31, 2015 reached $61.1 million. This compares to $188.5 million the year prior, principally impacted by an $84.8 million income tax recovery recorded in 2014 related to the cancellation of certain income tax liabilities following the settlement of past tax assessments. Net earnings in 2015 were also adversely impacted by lower Adjusted EBITDA. For the year ended December 31, 2015, the Company recorded basic earnings per share of $2.29, as compared to basic earnings per share of $6.95 in 2014.

Fourth Quarter 2015 Financial Results
Revenues for the fourth quarter ended December 31, 2015 decreased 3.2% to $208.5 million, as compared to $215.3 million for the same period last year.

Digital revenues grew to $129.2 million during the fourth quarter of 2015, up 10.5% from $116.9 million last year. For the fourth quarter ended December 31, 2015, digital revenues represented 62% of total revenues, increasing from 54.3% during the same period last year.

Digital revenue growth was favourably impacted by the acquisition of CFDP, accelerated customer acquisition as well as continued growth in digital spending among Yellow Pages' renewing customers. Excluding CFDP, digital revenues for the fourth quarter of 2015 grew by approximately 4% year-over-year.

Print revenues during the fourth quarter of 2015 decreased 19.4% year-over-year to reach $79.3 million, exhibiting stable declines.

Adjusted EBITDA remained relatively stable in the fourth quarter of 2015 at $64.5 million, as compared to $64.8 million the year prior. Adjusted EBITDA was favourably impacted by benefits realized from cost saving initiatives and lower employee related expenses, offset by lower revenues. For the quarter ended December 31, 2015, the Adjusted EBITDA margin reached 30.9%, as compared to 30.1% for the same period in 2014.

"Successful execution of our Return to Growth Plan is being demonstrated by the delivery of sustainable growth in digital revenues, a gradual reduction in investment spending and the realization of cost savings across the organization," said Ginette Maillé, Chief Financial Officer of Yellow Pages. "These trends will continue in 2016 as year-over-year revenue and Adjusted EBITDA declines are anticipated to materially improve relative to 2015."

The Company generated $25.2 million of free cash flow during the fourth quarter of 2015, up from $3.9 million of utilized free cash flow during the same period last year. The increase in free cash flow is mainly attributable to lower capital expenditures and a favourable change in cash income taxes of $14.2 million.

Net earnings for the three-month period ended December 31, 2015 reached $5.9 million, as compared to $95.2 million the year prior. The decrease in net earnings was principally impacted by the cancellation of certain income tax liabilities following the settlement of past tax assessments, which led to the recording of an $84.8 million income tax recovery during the fourth quarter of 2014. For the quarter ended December 31, 2015, the Company recorded basic earnings per share of $0.22, as compared to basic earnings per share of $3.53 the year prior.

Operational Update
"The value proposition Yellow Pages offers to merchants and consumers is unparalleled in Canada," continued Mr. Billot. "Supported by the introduction of new marketing solutions and improved technologies within our sales, fulfillment and customer service functions, we are building richer relationships with small and medium sized businesses Canada-wide. In addition, we have enhanced the user experience on our network of mobile applications and introduced digital properties within the dining and real estate verticals to facilitate the way local businesses and consumers interact and transact within today's digital marketplace."

Enhancing its Customer Value Proposition

• The Company's customer count reached 245,000 customers as at December 31, 2015. This compares to 256,000 customers as at December 31, 2014 and represents a net customer count decline of 11,000 in 2015, down significantly from 20,000 and 33,000 net customers lost in 2014 and 2013, respectively.
• Yellow Pages acquired 30,800 new customers during the twelve-month period ended December 31, 2015, in line with internal targets and exceeding last year's acquisition of 22,100 new customers. This performance was supported by the introduction of new sales incentive programs and marketing solutions, in addition to a stronger acquisition culture within the sales organization. The Company is also enhancing the sales process across its face-to-face and telephony channels by equipping its representatives with technologies that utilize proven, fact-based selling strategies in building value-enhancing digital marketing programs for small and medium sized businesses ("SMEs").
• The customer renewal rate grew to 85% for the year ended December 31, 2015, up from 84% last year. Yellow Pages' customer renewal rate continues to land ahead of internal expectations, supported by the delivery of processes and technologies that have improved the sales, fulfillment and customer service experience for SMEs.

Strengthening its Media Assets

• Total digital visits ("TDV") grew to 464 million for the year ended December 31, 2015, up 9.4% from 424.1 million visits in 2014. TDV measures the number of visits made across the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411, Bookenda and dine.TO online and mobile properties, as well as visits made across the properties of the Company's application syndication partners.
• TDV totalled 118.2 million for the fourth quarter ended December 31, 2015, up from 117.4 million during the same period last year. TDV during the fourth quarter of 2015 was impacted by a change to the layout of Google's mobile web search results pages, which pushed organic results for all mobile web publishers lower on Google's search pages. The ranking of Yellow Pages' listings on Google's mobile web search results pages remained relatively unchanged despite this layout change, a reflection of the relevancy and quality of the Company's listings.
• The Company will continue to improve the quality, completeness and relevance of the user experience across its network of digital media properties. Yellow Pages aims to differentiate itself from other local digital search properties by integrating functionalities that empower consumers and allow them to quickly and easily transact within their local neighbourhoods. Launched nationally in June 2015, YP Dine was the Company's first mobile application to incorporate these features, leveraging Bookenda's technologies to help users search for, discover and book a restaurant directly from their mobile devices. Recognizing the property's unique value proposition, YP Dine was selected by Apple as one of 2015's best new mobile applications.

Gaining Efficiencies

• Yellow Pages has finalized a comprehensive organizational review (the "Corporate Realignment") during the fourth quarter of 2015, which resulted in the elimination of 300 positions. The Corporate Realignment follows suit to the progress Yellow Pages has made in the execution of its Return to Growth Plan, particularly as a result of interdependencies built between the Company's information technology, strategy and marketing functions, as well as the decommissioning of legacy systems, platforms and processes. The Corporate Realignment principally affected roles that have been integrated within other functions or that are no longer aligned with the Company's digital reality.

Extending its Brand Promise

• In further support of local shopping and the growth of local economies, Yellow Pages hosted its third annual Shop The Neighbourhood ("STN") event on Saturday, November 28, 2015. Held during a weekend when many Canadians shop at U.S. retailers to take advantage of Black Friday and Cyber Monday deals, STN garnered the participation of over 12,500 local Canadian merchants offering 6,300 deals exclusive to the YP Shopwise mobile application. For the first time in the event's history, STN introduced Beacon technologies in various neighbourhoods, allowing participating merchants to push deal-related notifications to YP Shopwise users while they shopped on location.

2016 Financial Outlook

The Company reaffirms its long-term financial outlook relative to the Return to Growth Plan, targeting a return to revenue and Adjusted EBITDA growth by 2018. For the year ended December 31, 2016, Yellow Pages anticipates delivering:

• Year-over-year organic digital revenue growth in the high single digits;
• Adjusted EBITDA margins of 30%;
• Capital expenditures, net of related lease incentives, of $60 million; and
• Principal mandatory redemption payments of approximately $100 million on its Notes.
  

Conference Call
Yellow Pages Limited will hold an analyst and media call at 2 p.m. (Eastern Time) on February 11, 2016 to discuss full year and fourth quarter 2015 results. The call may be accessed by dialing (416) 340-2219 within the Toronto area, or 1 866 225-2055 outside of Toronto.

The call will be simultaneously webcast on the Company's website at https://corporate.yp.ca/en/yellow-pages-news/events/q4-2015-and-full-year-2015-financial-and-operational-results/

The conference call will be archived in the Investors section of the site at https://corporate.yp.ca/en/investors/financial-events-presentations/

A playback of the call can also be accessed from February 11 to March 11, 2016 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside of Toronto.

The conference passcode is 4111167.

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 properties including YP.ca™, RedFlagDeals.com™, Canada411.ca, Bookenda.com, dine.TO, DuProprio.com, ComFree.com and YP NextHome. The Company also holds the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411, Bookenda, DuProprio, ComFree and YP NextHome mobile applications and Yellow Pages™ print directories. In addition, Yellow Pages is 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. More at www.corporate.yp.ca.

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 February 11, 2016, 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 February 11, 2016 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)

Non-IFRS Measures¹
In order to provide a better understanding of the results, the Company uses the term Adjusted 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. Adjusted 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 Adjusted 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.

SOURCE Yellow Pages Limited