Eniro Group — Investor Presentation 2017

May 9, 2017

Eniro Journey of Change

Örjan Frid, CEO 2017-05-09

Disclaimer

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Table of Contents

1. Q1 financial update

• 2. Business Introduction
• 3. Natural Digital Marketing Partner
• 4. Local Guide for People and Business
• 5. Future opportunities & KPIs
• 6. Summary of recapitalisation plan

Highlights in Q1

ARPA (average revenue per customer) is relatively constant

Stabilizing customer base

Continued cost control

EBITDA Q1, 55 MSEK, in line with the Group's expectations

Revenue bridge Q1 2017 vs Q1 2016

COMMENTS

• Revenues are down with 74 MSEK (-15%) to 430 MSEK
• Continued structural decline for Voice and Print of ~26 MSEK
• Less sales and prepaid revenues in 2016 compared to 2015, lead to lower revenues in Q1 2017 of 15 MSEK
• Currency effect of +12 MSEK
• Remaining reduction is mainly an effect of lower sales in local search
• Complimentary Digital Marketing Products has increased due to a broader focus on sales of 3 rd party products compared to previous year

Revenue breakdown Q1 2017

BREAKDOWN BY CATEGORY BREAKDOWN BY COUNTRY

• Desktop/Mobile search
• Complementary digital marketing products

Print

Voice

Key financials Q1 2017 (MSEK)

REVENUE AND RESULT COMMENTS

	Jan-Mar	Jan-Mar	Apr-Mar	Jan-Dec
SEK M	2017	2016	2016/17	2016
Operating revenue	430	504	1 893	1 967
EBITDA	55	136	347	428
Adjusted EBITDA	56	119	377	440
Operating income	-45	81	-790	-664
Net income	-60	- 2	-920	-862
Cash flow from operating activities	10	65	162	217
Interest-bearing net debt excluding
convertible bond and pension obligations	-1 228	-1 211	-1 228	-1 217

• Revenue down -74 MSEK QoQ with EBITDA decreasing -81 MSEK vs. prior year
• Like for like, cost is reduced with 31 MSEK compared to 2016, driven by
• Positive one-time effect of net 19 MSEK due to recalculation of pension debt in Q1-16
• Conservative application regarding capitalisation of development cost of 10 MSEK
• Headcount reduction

EBITDA margins declining

EBITDA BREAKDOWN COMMENTS

	Jan-Mar	Jan-Mar		Apr-Mar	Jan-Dec
SEK M	2017	2016	%	2016/17	2016
Operating income	-45	81	-156	-790	-664
Depreciation/amortization	47	55		211	219
Impairment losses	53	-		926	873
Total EBITDA	55	136	-60	347	428
Whereof Local search	55	114	-52	311	370
Whereof Voice	15	28	-46	104	117
Whereof Other	-15	- 6	-150	-68	-59
EBITDA margin %	12,8	27,0		18,3	21,8
Items affecting comparability
Restructuring costs	1	2		11	12
Other items affecting comparability	-	-19		19	0
Total adjusted EBITDA	56	119	-53	377	440
Adjusted EBITDA margin %	13,0	23,6		19,9	22,4

• EBITDA down -81 MSEK vs. prior year
• Lower EBITDA margins due to:
• Decline in Voice business
• Turnaround efforts to stop sales decline
• Implementation of new IT systems delays larger cost reductions until 2018
• Less positive effects from prepaid revenues compared to Q1 2016 (~15 MSEK)

Development net debt/EBITDA R12

Cash flow Q1 2017

CASH BALANCE PER MAR 31ST 2017 COMMENTS

	Jan-Mar	Jan-Mar	Jan-Dec
mSEK	2017	2016	2016
EBITDA Jan-Mar (Reported)	55	136	428
Other Non-Cash Items	- 8	-45	-71
Income Taxes Paid	- 7	-11	-14
Change in WC	-10	5	-25
Op. Cash Flow (Ex. Net Interest Expense)	30	85	318
Acquisition / Divestment of Group Companies	0	1	1
Investment in Non-Current Assets	- 8	-17	-93
Investing Activities (Disposals / Capex)	- 8	-16	-92
Dividend on preference shares	-12	-12	-48
Net financial items	-20	-20	-80
Interest convertible bond (Coupon)	0	0	-21
Change in borrowings	25	0	24
Debt Amortization (Scheduled)	0	0	-85
Dividend non controlling interests	0	0	- 8
Other (Long term investments)	-11	0	-56
Financing Activities	-18	-32	-274
Cash Flow for Jan-Mar 2017	4	37	-48
Exchange rate difference in Cash and Cash Equivalents	- 1	2	5
Cash Balance (EOP)	51	130	48
10

• Positive cash flow in Q1:
• Cash flow during Q1 was +4 MSEK (37 MSEK)
• Available cash Mar 31st 2017 was 51 MSEK
• Payments after 31st March:
  • 7th Apr Dividend Non controlling interest -3,6 MSEK
  • 12th Apr Bond coupon -7,6 MSEK
• Other -11 MSEK (Payment to pledged bank funds for future obligations (PRI)

Highlights from sales

• Customer base in core business is down with 4% in Q1 2017 compared to 10% in Q1 2016 (effect of lower churn and improved prospect sales)
• Denmark is showing a net increase of customers
• Digital revenues Q/Q down with 1% (Q1 2017 vs Q4 2016)
• Desktop/Mobile revenues Q/Q at par with previous quarter (Q1 2017 vs Q4 2016)

Table of Contents

1. Q1 financial update

2. Business introduction

• 3. Natural Digital Marketing Partner
• 4. Local Guide for People and Business
• 5. Future opportunities & KPIs
• 6. Summary of recapitalisation plan

Mission

To digitize 200.000 SME's in the Nordics

Our market has become very fragmented - with an increasing amount of competitors – and growing fast

In this market with all its possibilities, where shall I put my money?

Introducing two new concepts to increase the value for customers and users

The local media partner for small businesses

The new Local Guide for people and businesses

Increase Customer loyalty and engagement

Increase user usage of Eniro and connect users and customers

Customer Journey : Key customer needs and our role in each stage

Table of Contents

• 1. Q1 financial update
• 2. Business introduction

3. Natural Digital Marketing Partner

• 4. Local Guide for People and Business
• 5. Future opportunities & KPIs
• 6. Summary of recapitalisation plan

ENIRO NEW DIGITAL MARKETING SALES PACKAGES

Eniro will bundle and sell packages of other sites, such as Google and Facebook, adapted for the specific customer in an automated process

Roadmap Digital Products Nordics All launches include SE / NO / DK

• Partnership Yext
• Launch POC Marketing

partner approach

• New value based offer
• Launched Netcheck
• Launch Discover Apps

H2 2016

• Online sales channel

• Add on sales teams that sales the new offering
• Partnership Google

• Selected Bing Partner

• Launch Homepage

H1 2017

• Offers supported by Marketing
• Automation &
• Nordic Display network
• Facebook &

H2 2017

Instagram Ads

• Full Online sales channel
• Transaction based offers
• Add on offerings and functions like, bookings, email marketing, bots, video, AR etc. etc

2018+

Target

New
Customer Dashboard
Local Search
Yext
SEM

New business model

Recurring revenues, subscription based offering

Level of engagement, dialogue and help more than hard sell towards Customers

1 2 3

Driving towards "Pay for performance", like bookings

Roll-out of new business model

Roll-out timeline

May-17

Launch new offering on new developed platform (based on Sales Force) in tele Sweden

June-August 17

Launch field Sweden, Norway and Denmark

• Drive leads and conversion on new channel "On-line sales"
• Change Sales Pitch from "Advertise on Eniro" to "Get Customer Leads/Sales from Eniro's marketing ecosystem"
• Change culture to be more conversion driven (convert inbound traffic to customer leads) and Data driven (take decisions based on data instead of guesstimates)

Table of Contents

• 1. Q1 financial update
• 2. Business introduction
• 3. Natural Digital Marketing Partner

4. Local Guide for People and Business

• 5. Future opportunities & KPIs
• 6. Summary of recapitalisation plan

Eniro Apps Local discoveries at your fingertips

Eniro app achievements: Step by step towards full discovery…

September: Discover nearby November: User tip March: Events

Local Deals Target nearby users

Table of Contents

• 1. Q1 financial update
• 2. Business introduction
• 3. Natural Digital Marketing Partner
• 4. Local Guide for People and Business

5. Future opportunities & KPIs

6. Summary of recapitalisation plan

Enables Eniro to monetise our Big Data

Our knowledge of the user base will be used to make better services, provide rich customer experience and find new business revenues

Road to monetising Big Data

Age, Gender, Locations, Search Intent, Clicks, etc

Building Eniro Genio Platform for Eniro Group & Commercial offerings including partners Enabling

Smart local data enabling exact targeting and personalized marketing, benefitting both users and customers

2

Customer base development – online services

A growing customer base is the strongest indicator of a recovery of the business. Leading up to Q1-17 it seems like the customer churn has flattened out

Group unique browsers / week (millions)

Stable user base with around 8 million unique browsers per week

Illustrative revenue composition

Going forward, the bulk of revenues will no longer come from local search, but instead stem from Eniro's new product portfolio, including display, content sales etc.

Table of Contents

• 1. Q1 financial update
• 2. Business introduction
• 3. Natural Digital Marketing Partner
• 4. Local Guide for People and Business
• 5. Future opportunities & KPIs

6. Summary of recapitalisation plan

Background on the recapitalisation plan

• In the last few years, the Group has faced challenging business environment with declining demand for its products and services
• In combination with a large debt burden, the Group's performance has not been satisfactory
• All excess cash have gone to service debt instead of investing in the business
• The Group has in total amortised SEK 8.5bn and paid SEK 1.15bn in interest and fees to its lending banks over the last 10 years
• In light of the structural change in market dynamics, the Group has repositioned itself and its service offering
• Eniro's current capital structure is detrimental to the company's long-term survival, hence a "full-fix" is needed

Transaction step-plan dependent on successful exchange offerings

Offer to holders of preference shares and convertible bonds to exchange for common equity

Contingent on step 1

Existing Bank Lenders exchange debt for equity in an amount of SEK 150 million

Cash issue of common equity of up to SEK 275 million to holders of existing common equity and others

Proceeds from cash issue used to amortize bank debt at a 50% discount.

- Banks committed to subscribe for any equity amount not covered by existing/new shareholders and reduce debt claim by way of equity conversion¹

Note: 1) In the event the cash issue is in any part subscribed for by the Banks, the Banks have committed to swap additional debt for equity in a supplementary rights issue to the extent required for debt to be reduced by SEK 550 million 44

2

3

4

Illustrative transaction impact (SEKm)

Post transaction ownership and balance sheet

POST TRANSACTION OWNERSHIP POST TRANSACTION CAPITAL STRUCTURE 1,2

Cash issue subscribed by current common shareholders in full

		Ownership (%)
Stakeholder	# of shares	Capital	Votes
Existing common shareholders	2,120	46%	50%
Preference shareholders	1,290	28%	31%
Convertible bondholders	758	16%	18%
Bank Lenders	484	10%	1%
Total	4,652	100%	100%

SEKm	Dec-16	Adjustments	Pf Dec-16
Interest bearing debt	1,454	-612	842
Long-term interest bearing receivables	189		189
Cash and cash equivalents	48		48
Net debt	1,217	-612	605

Cash issue subscribed by Banks only
		Ownership (%)
Stakeholder	# of shares	Capital	Votes
Existing common shareholders	530	9%	18%
Preference shareholders	1,290	22%	45%
Convertible bondholders	758	13%	26%
Bank Lenders	3,174	55%	11%
Total	5,752	100%	100%

46

Note: 1) The number of shares issued in the cash issue is based on a discount to TERP of 30% and an assumed price before the cash issue of SEK 0.31, i.e. the same as the conversion price for preference shares / convertible bonds and Bank Lenders, 2) Assuming acceptance of exchange offers

Indicative timeline

• 7 June: AGM • 8 June: Publication of prospectus for exchange offer • 13 June – 4 July: Acceptance period for exchange offer	• 6 July: Outcome of exchange offers • 20 July: Publication of the terms of the Cash Issue • 27 July: Publication of prospectus for the Cash Issue • 28 July: Record date for participation in Cash issue	• 1 Aug – 29 Aug: Subscription period for Cash issue	• Possible supplementary issue to the Lending Banks to compensate for the portion of the cash issue not subscribed for
June	July	August	September

Post recapitalisation, the Group will have lowered its total debt with SEK 612 million New loan agreement entailing lower amortization and interest rate and adapted financial covenants For more detailed information regarding the transaction, please refer to the press release published on 3 April