First estimate of health crisis impacts on 2020-2023 trajectory
Impact on the financing and cash situation of the Group
Under the current health crisis circumstances, which have had a deep impact on
Solocal, and in the wake of the suspension of the quarterly coupon payment
which occurred on 16th March 2020, Solocal initiated discussions with its
bondholders in order to protect its cash position and secure its financial
In an attempt to ensure transparency and equal access to information, Solocal
discloses a first estimate of its business plan for the 2020-2023 period.
Considering the current environment and the uncertainty in the upcoming months,
this information shall be reviewed and updated on a regular basis according to
the evolution of the health crisis and its impacts on the economic
Estimated impact of Covid-19 crisis on 2020 activity
As announced on 22nd April 2020, the impact of the health crisis caused by
Covid-19 on the Group's business activity is very significant. Solocal recorded
a 55% order intake(3) decrease over the lockdown period. Moreover, Solocal
forecasts a very slow recovery in May and June. September should be the
milestone of a progressive return to normalised business activity.
In terms of order intake, the health crisis impact should translate into a
decrease of EUR 150 million compared to the initial 2020 budget, which was the
basis for the outlook announced on 27th February 2020. This should represent a
EUR 100 million order intake decrease in 2020 compared to 2019(1).
As a consequence, this should result in a 2020 revenue(1) decrease by c. 20%,
including a 2020 Digital revenue1 decrease by c. 15%. This slowdown will be
partially offset in 2020 by cost reductions and the support measures announced
by the government, for a total cumulated amount of c. EUR 40 million.
Therefore, the 2020FY EBITDA1 is expected at c. EUR 130 million.
Based on available information at the present date the Group has proceeded to a
full review of its three-year outlook. Amid a booming digital marketing and
online business sector and building on its new digital service offer, based on
the enhancement of its products, the subscription mode and a longer maturity,
Solocal will be able to deliver a return to growth from 2021 onwards after
being affected by Covid-19 health crisis in 2020.
Indeed, despite the impact of the crisis on the volume of new contract
acquisition in 2020 and on the timing of its customer base migration towards
new services, the Group anticipates a return to Digital revenue growth from
2021 onwards and should be able to generate revenues to the tune of EUR 560
million in 2023. The average growth over the 2020-2023 period would as such
amount to c. 8% per annum.
2021 EBITDA(2) will be affected by the decrease in 2020 order intake and the
end of the Print activity, and should therefore amount to c. EUR 120 million. A
return to normalised business conditions should be observed in 2022, with the
Group being able to deliver an EBITDA on a growth path while maintaining an
EBITDA(2) margin above 30%. 2023 EBITDA(2) should return to its 2019 level, at
c. EUR 190 million.
From 2022 onwards, the Group should generate operating free cash flow(4) of
c. EUR 90 million per annum.
Impact of the crisis on the Group's financing and cash position in 2020 and
The impact of order intake decrease on the Group's cash position is already
tangible, with an average 25% decrease in monthly cash collection compared to
last year(1). The Group will thus be facing a liquidity need as described
- From summer 2020 until the end of the year: EUR 40 million
- An additional requirement of EUR 35 million in the first half of 2021
The forecasted EUR 75 million cash requirement does not include any Bond
interest payment (EUR 10 million per quarter) nor any repayment of the tax and
social security liabilities as at end of April 2020 (EUR 32 million).
In that respect, the Group initiated discussions with its partner banks and the
government authorities to benefit from a "State Guarantee Scheme" loan. It also
announces that it must suspend the payment of the Bond coupon due 15th June
Discussions with Bondholders are ongoing and a standstill pertaining to the
suspension of the 15th March 2020 coupon payment has been agreed until 14th
June 2020. All solutions are currently under review in order to secure the
financial situation of the Group.
Solocal will disclose in due time the outcome of the ongoing discussions with
Next major dates in the financial calendar
The next dates in the financial calendar are as follows:
- Publication of H1 2020 results on 28th July 2020
- Annual Shareholders General Meeting postponed to 28th July 2020
Reminder of previous published information
million EUR FY 2019 Q1 2020
Digital order intake 519.6 -
Total order intake 564.3 -
Digital revenues 520.5 117.9
Total revenues 584.1 126.1
Recurring EBITDA 190.6 -
Consolidated EBITDA 167.6 -
(1) Comparable scope. 2019 and 2020 figures are restated for QDQ subsidiary,
which was disposed of on 28th February 2020
(2) 100% of the Group's business will be Digital
(3) Scope excluding ClicRDV, Effilab, Leadformance, Mappy, Ooreka, SoMS and
non-significant subsidiaries, i.e. 96% of consolidated revenues. Average change
in Digital order intake for weeks 12-18 (2020 vs. 2019)
(4) Operating free cash flow: Ebitda + non-monetary items + change in WCR -
Order intake: Orders booked by the salesforce, that gives rise to a service
performed by the Group for its Customers
Solocal - www.solocal.com
We are the local digital partner for companies. Our job: advising and
supporting them to boost their activity thanks to our digital services (Digital
Presence, Digital Advertising, Websites, New Print Solutions). We also provide
users with the best possible digital experience with PagesJaunes, Mappy and
Ooreka, and our partners (Google, Facebook, Apple, Microsoft/Bing, Yahoo!,
etc.). We provide professionals and the public with our high audience services,
geolocalised data, scalable technology platforms, unparalleled order intake
coverage across France, our privileged partnerships with digital companies and
our talents in terms of data, development, digital marketing, etc. We gather
375,000 companies all over France and 2.7 billion visits on our services.
Solocal moreover benefits from the "Digital Ad Trust Classique" label for its
PagesJaunes and Mappy digital services. To know more about Solocal (Euronext
Paris "LOCAL"): let's keep in touch @solocal.