Solocal : Q3 2016 results

• Internet revenues of €156 M (representing 79% of total revenues), up +3%1

• EBITDA2: €60 M, down -24%1, EBITDA/revenue margin3of 30%

  Outlook for 2016 confirmed:

• Internet revenue growth rate between 0% and +2%

• EBITDA/revenue margin2: ≥ 28%

We urgently need more visibility on our refinancing to be able to work on our business priorities and to focus on mid term growth objectives."

1 In Q3 2016, compared to Q3 2015

2 Total (Internet + Print & Voice) recurring EBITDA

3 Total (Internet + Print & Voice) recurring EBITDA to revenue margin

1. Revenues and EBITDA

   The Board of Directors approved the Group's consolidated accounts on the basis of going concern as of 30 September 2016.

   In millions of euros	Q3 2015	Q3 2016	Change	9M 2015	9M 2016	Change
   Internet revenues	152	156	+3%	477	478	0%
   Local Search	119	120	+1%	371	363	-2%
   Number of visits (in million)	569	616	+8%	1 678	1 822	+9%
   ARPA 1(in €)	226	245	+8%	698	728	+4%
   Number of clients (in thousand)	525	490	-7%	532	499	-6%
   Digital Marketing	33	36	+10%	106	115	+8%
   Penetration rate (in number of clients)	22%	23%	+1pt	22%	23%	+1pt

   Print & Voice revenues	60	41	-32%	181	124	-32%
   Revenues	212	197	-7%	658	602	-9%

   The Group posted revenues of €197 million in Q3 2016 a decrease of -7% compared to Q3 2015:

   • Internet revenues at €156 million in Q3 2016 (representing 79% of total revenues) areup +3% versus Q3 2015:
     • Audience growth: Internet visits record a growth +8% in Q3 2016 vs Q3 2015 of which

       +24% mobile (representing 47% of total audience).

     • Local Search revenues: +1% in Q3 2016 vs Q3 2015 resulting from
       • Local Search ARPA1: +8% in Q3 2016 vs Q3 2015, leading to year-to-date Local Search ARPA growth of +4% in line with historical trends
       • Client base: -7% in Q3 2016 vs Q3 2015, still limited by reduced investments in telesales client acquisition.
     • Digital Marketing revenues: +10% in Q3 2016 vs Q3 2015, with a steady growth of local programmatic, not yet fully reflecting sales order dynamic.
   • Print & Voice revenues at €41 million in Q3 2016 aredown by -32% over the period, mainly due to the strong decline of PagesBlanches.

     In millions of euros	Q3 2015	Q3 2016	Change	9M 2015	9M 2016	Change
     Internet recurring EBITDA	56	47	-16%	155	137	-12%
     EBITDA / revenue margin	37%	30%	-7 pts	33%	29%	-4 pts
     Print & Voice recurring EBITDA	22	12	-44%	62	34	-44%
     EBITDA / revenue margin	36%	30%	-6 pts	34%	28%	-6 pts
     Recurring EBITDA	78	60	-24%	217	171	-21%
     EBITDA / revenue margin	37%	30%	-7 pts	33%	28%	-5 pts

     Note: Internet EBITDA and Print & Voice EBITDA for 2015 quarterly data have been adjusted to have indicators computed on comparable methods between 2015 and 2016

     Recurring EBITDA was€60 million in Q3 2016, down -24% versus Q3 2015, mainly driven by the drop in Print & Voice EBITDA.

     The EBITDA to revenue margin was 30% in Q3 2016, down -7 points compared to Q3 2015, due to a strong decline in Print & Voice revenues (-32%).

     1 Average Revenue Per Advertiser

2. Net income and financial structure

   In millions of euros	Q3 2015	Q3 2016	Change	9M 2015	9M 2016	Change
   Recurring EBITDA	78	60	-24%	217	171	-21%
   Depreciation and amortisation	(13)	(15)	+17%	(35)	(44)	+26%
   Net financial expense	(21)	(19)	-11%	(64)	(56)	-13%
   Corporate income tax	(21)	(11)	-44%	(50)	(30)	-40%
   Recurring income from continued activities	24	14	-41%	68	41	-39%
   Contribution to net income from non recurring items	(1)	(0)	-73%	(4)	(3)	-38%
   Net income from divested activities	(6)	-	na	(13)	-	na
   Net income	17	14	-19%	51	39	-24%

   Depreciation and amortisation amounted to -€15 million in Q3 2016, up +17% compared to Q3 2015, due to impact of IT refoundation investments. Net financial expenses was-€19 million in Q3 2016, reduced by -11% compared to Q3 2015, as the hedging instruments matured at the end of 2015. Corporate income tax expense was -€11 million in Q3 2016, reduced by -44% compared to Q3 2015, and in line with the profit before tax. Recurring net income from continued activities amounted to€14 million Q3 2016, down -41% compared to Q3 2015.

   Net income from divested activities was nil in Q3 2016 as the divestment of non-growing and non-profitable Internet businesses has been fully achieved in 2015.

   The Group's net income was €14 million in Q3 2016, down -19% compared to Q3 2015.

   Net debt4totalled €1,097 million as of 30 September 2016.The Group is in breach with its leverage bank covenant but complies with all other bank covenants. This provides creditors (excluding Tranche C1) with the right to accelerate at any time (subject to the mandatory provisions of the Commercial Code) the payment of the entire amount of SoLocal Group's financial debt owed to external creditors. The three creditors parties to the agreement with the Company agreed, provided that the revised financial restructuring plan is adopted, to abstain from requesting the acceleration of SoLocal Group's debt, as a result of the breach of covenant leverage.

   The Group's free cash flow was -€15 million in Q3 2016, down -€24 M compared to Q3 2015, mainly driven by drop in EBITDA and negative working capital impact due to higher pressure from clients and suppliers given the uncertainty linked to the financial restructuring of the Group.

   As of 30 September 2016, the Group had a net cash position of €90 million5.

   4 Net debt is the gross financial debt plus or minus the fair net asset value of asset and/or liability derivative instruments used for cash flow hedging purposes, minus cash and cash equivalents

   5 Net of bank overdrafts, including own bonds

3. Outlook

• Internet revenue growth between 0% and +2%6

• EBITDA to revenue margin ≥ 28%7

Subject to the approval of the revised financial restructuring plan by creditors and shareholders, the implementation of "Conquer 2018" plan has been delayed by 6 months due to the delay in the financial restructuring plan impacting the commercial performance and cash flow generation.

6 in 2016 compared to 2015

7 Total (Internet + Print & Voice) recurring EBITDA to revenue margin