Solocal : Consolidated financial information as at Dec 31 2015

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Consolidated financial information as at 31 December 2015‌

Board of Directors of 10 February 2016

Unofficial translation of the French-language "Informations financières consolidées au 31 décembre 2015" of SoLocal Group, for information purposes only.‌

This English-language translation of the consolidated financial information prepared in French has been provided solely for the convenience of English-speaking readers should be read in conjunction with, and construed in accordance with French law and accounting standards applicable in France. In the case of any divergences with the French original and the English version, only the French original has legal value. In consequence, the translations may not be relied upon to sustain any legal claim, nor be used as the basis of any legal opinion. Despite all the efforts devoted to this translation, certain errors, omissions or approximations may subsist. SoLocal Group, its representatives and employees decline all responsibility in this regard.

SoLocal Group

Public limited company with a Board of Directors with capital of 233,259,384 euros Registered office: 7 avenue de la Cristallerie - 92317 Sèvres Cedex

Commercial and Companies Register Nanterre 552 028 425

CONTENTS

1. Annual activity report as of 31 december 2015 3

2. Overview 3

3. Commentary on the 2015 full-year results 5

4. Analysis of the revenues and recurring EBITDA of continued activities 7

5. Analysis of operating income for continued activities 7

6. Analysis of the results for continued activities 8

7. Net financial expense for continued activities 8

8. Recurring results for the period for continued activities 8

9. Result for continued activities 8

10. Presentation of the results and the consolidated cash flows with the detail for "Continued activities" and " Divested activities" 10

11. Revenue and key indicators by vertical 12

12. Consolidated liquidities, capital resources and investment expenses 14

13. Off-balance-sheet commitments, disputes and related parties 17

14. Risks and uncertainties relating to the 2016 financial year 17

15. Events subsequent to the closing date of 31 December 2015 17

16. Research and development 17

17. Quaterly financial data 18

18. Consolidated financial statements 22

Consolidated income statement 22

Consolidated statement of comprehensive income 23

Consolidated statement of financial position 24

Consolidated statement of changes in equity 25

Consolidated cash flow statement 26

Note 1 - Information on the Group 27

Note 2 - Context of publication and basis for preparation of the 2015 financial information 27

Note 3 - Accounting policies and changes of estimates 29

1. - Accounting positions adopted by the Group pursuant to paragraphs 10 to 12 of IAS 8 29

2. - Consolidation 29

3. - Transactions in foreign currencies 29

4. - Presentation of the financial statements 30

5. - Revenues 30

6. - Advertising and similar expenses 31

7. - Earnings per share 31

8. - Goodwill 31

9. - Other intangible assets 32

10. - Tangible fixed assets 33

11. - Impairment of fixed assets 33

12. - Financial assets and liabilities 34

13. - Measurement and recognition of financial assets 34

14. - Measurement and recognition of financial liabilities 35

15. - Measurement and recognition of derivative instruments 35

16. - Inventories 36

17. - Deferred taxes 36

18. - Provisions 37

19. - Pension and similar benefit obligations 37

20. - Post-employment benefits 37

21. - Other long-term benefits 38

22. - Termination benefits 38

23. - Share-based payments 38

24. - Own shares 38

Note 4 - Segment information 39

1. - By business sector 40

2. - By geographic region 40

Note 5 - Changes in the scope of consolidation 41

Note 6 - Personnel costs 41

Note 7 - Other operating expenses and income 42

Note 8 - Net financial expenses 42

Note 9 - Corporation tax 43

1. - Group tax analysis 43

2. - Taxes in the balance sheet 44

Note 10 - Earnings per share 45

Note 10 - Earnings per share 45

Note 11 - Goodwill in respect of consolidated companies 45

Note 12 - Other intangible fixed assets 46

Note 13 - Tangible fixed assets 47

Note 14 - Other available-for-sale assets 48

Note 15 - Other non-current financial assets 48

Note 16 - Derivative financial instruments 48

Note 17 - Net inventories 48

Note 18 - Trade debtors 49

Note 19 - Acquisition costs of contracts 49

Note 20 - Other current assets 50

Note 21 - Changes in provisions for impairment of assets 50

Note 22 - Share-holders' equity 51

1. - Share capital 51

2. - Other reserves and other comprehensive income 51

3. - Own shares 51

4. - Dividends 52

Note 23 - Trade creditors 52

Note 24 - Personnel benefits, provisions and other liabilities 52

Note 25 - Stock options and free shares 56

1. - Description of the plans 56

2. - Stock options 56

3. - Free shares 56

1. - Movements in stock option and free share plans during the year 57

2. - Description of the valuation models 57

3. - Expense relating to stock option plans and free grants of shares 58

Note 26 - Cash and cash equivalents, net financial debt 59

Note 27 - Deferred income 61

Note 28 - Financial instruments 62

1. - Financial instruments in the balance sheet 62

2. - Effect of financial instruments on income 63

Note 29 - Financial risk management and capital management policy objectives 63

Note 30 - Information on related parties 66

1. - Remuneration of executive committee and board of directors members 66

2. - Transactions with related parties 66

Note 31 - Contractual obligations and off-balance-sheet commitments 67

Note 32 - Disputes and litigation 69

Note 33 - Information on continued and disposed activities, as at 31 December 2015 70

Note 34 - Auditors' fees 74

Note 35 - Scope of consolidation 75

Note 36 - Events subsequent to the closing date 75

1. Annual activity report as of 31 december 2015

   
   

2. Overview

   
   

   The "Digital 2015" programme has transformed SoLocal into an Internet Group of which the mission is to "reveal local know-how everywhere and boost local revenues of trusted businesses". The Group provides its customers service and digital solutions to increase visibility and leads for local businesses and creates and updates the best local, professional and personalized content for users.

   
   

   The Group's activities are organised in two product segments: the "Internet" segment and the "Print

   & Voice" segment.

   
   

   Internet

   
   

   The Group's Internet growth is based on two businesses: "local search" on the one hand, and "digital marketing" on the other hand.

   
   

   The "local search" products are the historical base of SoLocal Group's Internet activities and represent the largest share of Internet revenues. The Group is diversifying more and more in "digital marketing" activities, primarily by proposing new service offerings to its existing base of "local search" customers.

   
   

   • Local search: The main products are the creation and marketing of content and advertising space, listing, targeted advertising and the provision of advertising space for local and national advertisers (often referred to as display), as well as a complete range of products and services for the provision and distribution of information with local content. The related products are by far based on the Group's media offering "pagesjaunes.fr", "Mappy" and "Ooreka" (formerly "ComprendreChoisir") as well as on the partnerships set up by the Group with Bing, Google and Apple in particular.

     
     

   • Digital marketing: Digital marketing products and services make it possible to reinforce the pertinence of the presence of the Group's customers on the Web and revolve around three lines:

     
     

     • Sites and content: Among its digital presence solutions, SoLocal Group offers the creating and hosting of Websites and listing them on pagesjaunes.fr, affiliated partners and search engines - (SEO - natural listing or SEM - paid listing). The sites developed by SoLocal Group for its customers are compatible for mobile use.

       
       

     • Local programmatic marketing and adwords: In addition, Internet user retargeting solutions (ADhesive offering) make it possible to extend the visibility of the Group's customer sites on premium partner portals. The Group has also reinforced its expertise in managing adword campaigns for its customers through the acquisition of Effilab at the end of 2015.

       
       

     • Transactional services: the Group also proposes transactional services that are suited to the specific needs of certain professionals, PagesJaunesdoc intended for health-care professionals and PagesJaunesresto, an online ordering service for the delivery of meals from locally-listed restaurants.