European Directories Group, European Directories Midco S.à r.l. and European Directories BondCo S.C.A. Interim Report January-March 2016 23 May 2016
Interim Report January-March 2016 (Comparative 2015 numbers in brackets)
Financial Summary January-March 2016 -
Group revenues are MEUR 64 (MEUR 71, -9% below last year, or -3% LFL) Revenues for key business drivers profile services and consumer services declined 8% and 16% respectively (Q1 2016 vs. Q1 2015) EBITDA is MEUR 7 (MEUR 7, at last year level, or MEUR 3 favourable LFL) Loss for the period after taxes is MEUR -7 (MEUR -7) Net cash from operating activities is MEUR 8 (MEUR 5) Net debt excluding shareholder loans is MEUR 89 (MEUR 73)
Revenues continued to decrease in the first quarter but due to intensified cost cutting profitability has remained approximately at prior year levels. The Board of Directors and management expect that certain markets for the Group’s products and services will continue to decline. Further, it has been difficult to generate profitable growth in the digital businesses. Board and management are fully aware of these challenges and jointly work towards finding measures to mitigate those risks.
Key events during the first quarter -
-
On 22 January 2016 De Telefoongids Holding B.V. (“DTG”), a European Directories Group company, acquired 100% of the shares in DR3 B.V. (“DR3DATA”). DR3DATA is a Dutch company holding an extensive business-to-business marketing database with annual turnover of c MEUR 1.5. The acquisition of DR3DATA will reinforce DTG’s position as the online marketing services company for the Dutch SME sector. Leafy S.á r.l., the majority shareholder of European Directories, acquired further shares in European Directories Midco S.à r.l. for a nominal sum, thereby increasing its shareholding from 86.7% to 91.1%.
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Events after the end of the period -
-
-
On 2 May 2016, Marcus Englert replaced David Anderson on the board of European Directories Midco S.à r.l. As a result, the board of European Directories Midco S.à r.l. consists of the following members: Marcus Englert, Hannu Syrjänen, Björn Osterloff, Peder Prahl, Marco Sodi, Fabrice Rota and Sébastien Rimlinger. As part of an intra-group restructure in order to reduce administrative costs and bring the Austrian trading companies under the direct ownership of a Dutch holding company, the European Directories Group has finalised merger proceedings in May 2016 of its 100% owned Austrian subsidiary, Herold Holding GmbH, with a newly incorporated 100% owned Dutch subsidiary, European Directories (DH8) B.V. Both companies are 100% direct subsidiaries of European Directories (DH7) B.V. Neither company conducts any trading business, nor has any employees and the operations of the Dutch and Austrian business are completely unaffected by this matter. On 12 April 2016, the Group disposed of its 76.34 % shareholding in Tupalo Internetservices GmbH for a nominal amount. The sale resulted in a minor loss to the Group.
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Report of the Board of Directors* Revenues Group net revenue by segment, MEUR Q1 2016
Q1 2015
2015
LTM
Fonecta
32
36
142
137
DTG
17
19
74
72
17
18
68
67
DTG
LFL1)
Herold
15
16
79
78
Herold LFL2)
15
12
73
76
Other
0
0
0
0
Total Group
64
71
294
288
1) DTG Net revenues excluding the impact from change in the Terms and Conditions for sales. The impact in the first quarter 2015 was MEUR 1, MEUR 6 in January-December 2015 and MEUR 5 for last twelve months period. 2) Herold Net revenues excluding impact from divested “secondary entries” business unit. The impact in the first quarter 2015 was MEUR 4, MEUR 6 in January-December 2015 and MEUR 2 for last twelve months period.
Group net revenue by product group, MEUR Q1 2016
Q1 2015
2015
LTM
Profile services
24
26
106
104
Consumer services
14
17
67
64
New media
18
17
76
77
Print
7
10
33
30
Other
2
2
13
12
Total Group
64
71
294
288
Product groups: New media is mainly consisting of web presence and marketing services, Profile services are mainly internet yellow pages (IYP), Consumer services (only in Finland) are directory assistance and sms data information services, Print is traditional printed directories and Other consists of mixed revenue streams.
*) The term Board of Directors is referring to the Board of Managers in European Directories Midco S.à r.l
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Group revenues for the first quarter totalled MEUR 64, a 9% decline compared to the previous year due to the structural decline of traditional print revenues and Fonecta’s consumer business. The divestment of “secondary entries” business unit by Herold in 2015 adversely impacts the year-onyear comparison since revenue from the divested business was MEUR 4 in Q1 2015. New media revenues, mainly website and marketing services have shown a small improvement, however not overall compensating the decline in traditional business. Profile services revenues totalling MEUR 24 decreased by MEUR 2 from the previous year due to the divestment of “secondary entries” business unit and the terms and conditions change one-off impact in previous period. The total share of online products in the Group’s product portfolio totalled 66% in the quarter. Print revenues totalled MEUR 7, a decline of 29% compared to previous year. Print revenues represented 11% of total revenues, showing a decrease of 3 percentage points. Consumer services consisting of directory assistance and SMS data information services in Finland declined by 16% and totalled MEUR 14, representing 22% of total revenues. In addition to the structural decline in traditional print, the transition to online and digital services continues to be challenging in all three markets in which the Group operates due to prevailing economic weakness.
Result Group ebitda by segment, MEUR Q1 2016
Q1 2015
2015
LTM
Fonecta
6
7
29
28
DTG
3
3
13
13
3
2
8
9
10
12
DTG
LFL1)
Herold
-1
-2
Herold LFL2)
-1
-4
6
10
Other
-1
-1
-5
-5
Total Group
7
7
48
48
1) DTG EBITDA excluding the impact from change in the Terms and Conditions for sales. The impact in the first quarter 2015 was MEUR 1, MEUR 6 in January-December 2015 and MEUR 5 for last twelve months period. 2) Herold EBITDA excluding impact from divested “secondary entries” business unit. The impact in the first quarter 2015 was MEUR 2, MEUR 4 in January-December 2015 and MEUR 2 for last twelve months period.
Group EBITDA for the quarter amounted to MEUR 7 (MEUR 7), with EBITDA margin of 11% (10%). EBITDA in Q1 2015 included a c MEUR 2 benefit from the divested “secondary entries” business unit and a c MEUR 1 positive one-time effect from change in contract terms and conditions in the Netherlands. The decline in high margin traditional business (print and consumer business) also has a negative impact on margin and EBITDA in all countries. The Group’s total operating costs and expenses for the quarter decreased by MEUR 6 compared to the prior year. As the cost of consumables reduced due to lower print production costs, partially offset Page | 4
with higher fulfilment costs of the online products and personnel expenses decreased due to lower employee numbers. Other operating expenses have reduced mainly due to tighter cost management leading to lower third party service expenses and business support costs. Operating profit amounted to MEUR 1 (MEUR -1), representing an operating margin of 1% (-1%). The net finance costs of the Group increased by MEUR 1 year-over-year. This increase is mainly driven by accrued interest on the capitalized Shareholder Loan (Preferred Equity Certificate). The shareholder loan interest is not paid and will not lead to cash interest whilst the bond is outstanding.
Balance sheet, cash flow and investment activities At the end of March 2016, European Directories Group’s consolidated assets totalled MEUR 423 (MEUR 491). The decrease is mainly attributable to wind down of the Dutch companies’ cash pool arrangements in December 2015, following which there are no bank overdrafts. Further, a amortisation of other intangible assets, in the ordinary course, is also contributing to the decrease. Group cash flow, MEUR
Q1 2016
Q1 2015
2015
LTM
Ebitda Gains and losses from sales of fixed assets and other noncash adjustments
7
7
48
48
0
2
0
-2
Net change in working capital Net cash from operating activities before financial items and taxes paid
3 10
-1 8
-27 21
-22 23
Financial items paid, net
-2
-2
-11
-11
Taxes paid
0
0
-6
-6
Net cash from operating activities
8
5
4
7
Net cash used in investing activities
-5
8
-6
-19
Net cash used in financing activities
0 3
0 13
-2 -4
-2 -14
Net increase/decrease in cash
In January-March 2016, the Group’s net cash from operating activities before financial items and taxes paid increased to MEUR 10 (MEUR 8) and net cash from operating activities increased to MEUR 8 (MEUR 5) due to lower working capital outflows. Net cash used in investing activities was MEUR -5 (MEUR 8), representing primarily capital expenditure on customer products and services. The positive investing cash flow in the previous year was driven by the divestment of the business unit “secondary entries” by Herold (MEUR 10) and the divestment of the Swedish partnership, HB Förlaget (MEUR 1). The cash balance of the Group at the end of March 2016 was MEUR 50 (MEUR 64).
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Investments in tangible and intangible assets In January-March 2016, investments in tangible and intangible assets amounted to MEUR 3 (MEUR 3). Investments were mainly related to growing the online business offering and customer service capabilities.
Acquisitions In January 2016, the Group acquired 100% of the shares in DR3DATA. The acquisition price of MEUR 1.1 was paid by way of a capital contribution to DR3DATA. In January 2016, the Group (through its group company Dogado GmbH) acquired 100% of the shares and votes in Media Webline AG. The acquisition price was MEUR 1.9, creating a goodwill of MEUR 0.9. In March 2016, the Group acquired an additional 10 % interest in its group company Dogado GmbH, increasing its ownership from 51 % into 61 %. The additional capital of MEUR 1 will be used for further acquisitions to increase the group webhosting base.
Divestments The Group did not have any divestments in the first quarter.
Interest-bearing net debt Net interest-bearing debt at 31 March 2016 was MEUR 89, 1.9 x EBITDA (LTM), excluding subordinated shareholder loans (compared to MEUR 73 at the end of March 2015).
Personnel At the end of March 2016, the number of Group employees (FTE) was 1,744, a decrease of 158 (FTE) compared to end of March 2015.
Composition of the Board of Directors The board of European Directories Midco S.à r.l. consists of the following members: Marcus Englert (Chairman), Hannu Syrjänen, Björn Osterloff, Peder Prahl, Marco Sodi, Fabrice Rota and Sébastien Rimlinger. The board of the general partner of European Directories BondCo S.C.A., European Directories GP S.à r.l. consists of John D. Sutherland, Manager A, Fabrice S. Rota, Manager B and Sébastien Rimlinger, Manager B.
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For further information, please contact: Group CFO Neil Robson e-mail:
[email protected] European Directories Group will publish two further interim reports in 2016: - January-June by 31 August 2016 - January-September by 30 November 2016 Interim reports will be released on the European Directories Group web site: www.europeandirectories.com/investors
About European Directories Group European Directories Group is an online partner for SMEs offering local search and lead generation with a scalable business model. The Group operates through three main brands: Fonecta in Finland, Herold in Austria and DTG in the Netherlands. The Parent company of the Group is European Directories Midco S.à r.l. in Luxembourg. European Directories BondCo S.C.A., a subsidiary of European Directories Midco S.à r.l., issued senior secured callable floating rate bonds in the amount of MEUR 160 in December 2013 which were listed in December 2014 at Nasdaq Stockholm.
CONTACT INFORMATION
Head quarter of European Directories Group: Herikerbergweg 88 Postbus 77863 1070 LL Amsterdam The Netherlands
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European Directories BondCo S.C.A.: 46A, Avenue J.F. Kennedy L-1855 Luxembourg The Grand Duchy of Luxembourg
European Directories Group January-March 2016 Interim Financial Statements are unaudited
Condensed consolidated income statement
1000 EUR
Note
Q1 2016
Q1 2015
2015
Last twelve months
Revenues
3
64 371
70 639
293 917
287 649
711
505
1 511
1 717
Cost of consumables
-14 477
-14 823
-60 139
-59 793
Personnel expenses Other operating expenses
-32 332 -11 159
-33 659 -15 259
-132 514 -54 826
-131 187 -50 726
7 114
7 403
47 949
47 660
0 -6 267
-343 -7 906
-399 -32 741
-56 -31 102
Other income
*)
EBITDA
3
Gain/(loss) from sale of subsidiaries Depreciation, amortisation and impairment charges
847
-846
14 809
16 502
Finance income Finance expense
Operating profit/(loss)
37 -7 859
69 -6 438
82 -28 050
50 -29 471
Finance costs - net
-7 822
-6 369
-27 968
-29 421
Loss before income tax
-6 975
-7 215
-13 159
-12 919
262
-71
818
1 151
Profit/(loss) for the period
-6 713
-7 286
-12 341
-11 768
Attributable to: Owners of the parent
-6 650
-7 301
-12 095
-11 444
-63
15
-246
-324
-6 713
-7 286
-12 341
-11 768
Income taxes
Non-controlling interests
*) EBITDA is defined as operating profit/(loss) before depreciation, amortisation and impairment charges and gain/(loss) from sale of subsidiaries.
8
European Directories Group January-March 2016 Interim Financial Statements are unaudited
Condensed consolidated statement of comprehensive income
1000 EUR
Profit/(loss) for the period
Q1 2016
Q1 2015
2015
Last twelve months
-6 713
-7 286
-12 341
-11 768
142
182
195
155
142
182
195
155
-24
-21
17 756
17 753
6
5
0
1
-18
-16
17 756
17 754
Other comprehensive income Items that may be reclassified to profit or loss in subsequent periods Exchange differences on translating foreign operations Items that will not be reclassified to profit or loss in subsequent periods Remeasurements of defined benefit liability Related tax
Other comprehensive income for the period, net of tax
124
166
17 951
17 909
-6 589
-7 120
5 610
6 141
Owners of the parent Non-controlling interests
-6 526 -63
-7 135 15
5 856 -246
6 465 -324
Total comprehensive income for the year
-6 589
-7 120
5 610
6 141
Total comprehensive income for the year Total comprehensive income attributable to
9
European Directories Group January-March 2016 Interim Financial Statements are unaudited
Condensed consolidated balance sheet
1000 EUR
Note
Mar 31 2016
Mar 31 2015
Dec 31 2015
ASSETS Non-current assets Goodwill
5, 6
214 693
210 500
213 816
Other intangible assets
6
92 793
102 524
93 613
Property, plant and equipment
7
5 346
5 733
5 486
403
434
403
Investments in associates Available-for-sale financial assets
4
1 471
1 678
1 471
Other financial assets Loan receivables from related parties
4
36 1 763
35 1 560
36 1 731
4
Deferred tax assets
2 829
4 300
2 837
319 334
326 764
319 393
4
668 52 867
683 57 697
712 59 553
4, 8
49 604
105 842
46 705
5
-
-
-
Total current assets
103 139
164 222
106 970
Total assets
422 473
490 986
426 363
100 16 449
100 16 449
100 16 449
Total non-current assets Current assets Inventories Trade and other receivables Cash and cash equivalents (excluding bank overdrafts) Assets held-for-sale
EQUITY Equity attributable to owners of the parent Share capital Share premium Other reserves
10
10
10
Retained earnings
-69 819
-76 018
-63 026
Total
-53 260
-59 459
-46 467
1 207
1 399
1 003
-52 053
-58 060
-45 464
Non-controlling interests Total equity LIABILITIES Non-current liabilities Bond
4, 9
138 255
137 221
138 084
Shareholder loan and accrued interest
4, 9
139 576
122 151
134 781
4, 5, 9
8 558
8 282
8 270
Deferred tax liabilities
47 110
48 731
46 884
Provisions Pension obligations
2 522 12 174
4 257 29 744
1 930 12 050
348 195
350 386
341 999
10 854
13 526
12 164
56 252
71 987
58 009
10
21 042
28 073
21 596
4
38 183 -
42 988 42 086
38 059 -
Total current liabilities
126 331
198 660
129 828
Total liabilities
474 526
549 046
471 827
Total equity and liabilities
422 473
490 986
426 363
Other non-current financial liabilities
Total non-current liabilities Current liabilities 4
Trade payables Deferred revenues Provisions Other current liabilities Bank overdrafts
4
10
European Directories Group January-March 2016
Condensed consolidated statement of changes in total equity
1000 EUR Total equity 31 December 2015
Share capital
Share premium
Other reserves
Retained earnings
Owners of the parent
Non- Total equity controlling interests
100
16 449
10
-63 026
-46 467
1 003
-45 464
Loss for the period Other comprehensive income
-
-
-
-6 650 124
-6 650 124
-63 -
-6 713 124
Total comprehensive income for the period
-
-
-
-6 526
-6 526
-63
-6 589
122
122
-122
0
Acquisition of non-controlling interest*) Capital injection to subsidiary with a non*) controlling interest
-
-
-
-389
-389
389
0
Total equity 31 Mar 2016
100
16 449
10
-267 -69 819
-267 -53 260
267 1 207
0 -52 053
Total equity 31 December 2014
Total changes in ownership interests
100
16 449
10
-60 694
-44 135
429
-43 706
Loss for the period Other comprehensive income
-
-
-
-7 301 166
-7 301 166
15 -
-7 286 166
Total comprehensive income for the period **) Put option arising on business combination Non-controlling interest arising on business combination
-
-
-
-7 135
-7 135
15
-7 120
-
-
-
-8 189
-8 189
0
-8 189
100
16 449
10
-76 018
-59 459
955 1 399
955 -58 060
Total equity 31 March 2015 *)
In March 2016, the Group acquired an additional 10 % interest in Dogado Gmbh increasing its ownership from 51 % to 61 %. The non-controlling interest's share decreased from 49 % to 39 %. The acquisition was made by the issuance of new shares (TEUR 1,000) by Dogado. The Group recognised a a decrease in noncontrolling interest of TEUR 122 from the acquisition and an increase in non-controlling interest of TEUR 389 from the capital injection. The carrying amount of Dogado's net assets in the Group's financial statements on the date of the acquisition was TEUR 1,225. **)
The Group has recognised a financial liability for a put option relating to the acquisition of non-controlling interest in Dogado GmbH. The put option entitles the non-controlling interest of Dogado GmbH to sell their shares to the Group during 2018-2019. See note 5 and 9.
11
European Directories Group January-March 2016
Condensed consolidated cash flow statement Q1 2016
Q1 2015
2015
Last twelve months
-6 713
-7 286
-12 341
-11 768
-262 7 822
71 6 369
-818 27 968
-1 151 29 421
6 267
7 906
32 741
31 102
50 -2 488 3 -34
343 1 540 53 -2 443 2 31
399 -360 144 -9 938 -834 -5 804
56 -1 900 141 -9 983 -833 -5 869
4 645
6 586
31 157
29 216
Net change in working capital
3 014
-1 283
-26 786
-22 489
Net cash from operating activities
7 659
5 303
4 371
6 727
-1 647
-
-3 135
-4 782
-
-27
-20
7
-2 869
-2 976
-14 314
-14 207
Sales of subsidiaries and businesses, net of cash
-
1 038
985
-53
Proceeds from sales of intangible assets and property, plant and equipment Proceeds from other interest-bearing receivables
-
10 000
10 099
99
-
-
-2
-2
Net cash used in investing activities
-4 516
8 035
-6 387
-18 938
Cash flow before financing activities
3 143
13 338
-2 016
-12 211
Proceeds from long-term liabilities
-
-
788
788
Payments of long-term liabilities
-
-
-559
-559
-211 -
-298 -
-1 918 -135
-1 831 -135
1000 EUR Cash flow from operating activities Loss for the period Adjustments for: Income tax expenses Finance costs - net Depreciation, amortisation and impairment charges Gain/(loss) from sale of subsidiaries Gains/losses from sale of fixed assets Interest received Interest paid Other financial items and realised foreign exchange gains Taxes paid Operating cash flow before movements in working capital
Cash flow from investing activities Acquisitions of subsidiaries and businesses, net of cash acquired Purchases of available-for-sale investments Purchases of intangible assets and property, plant and equipment
Cash flow from financing activities
Payments of short-term liabilities Dividends paid to non-controlling interests
-33
-48
-219
-204
-244
-346
-2 043
-1 941
2 899
12 992
-4 059
-14 152
Cash and cash equivalents at the beginning of period
46 705
50 764
50 764
63 756
Cash and cash equivalents at the end of period
49 604
63 756
46 705
49 604
Loans granted to related parties Net cash used in financing activities Net increase (+) / decrease (-) in cash and cash equivalents
12
European Directories Group January-March 2016
Notes to the condensed consolidated interim financial statements 1. Basis of preparation These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the EU. The accounting policies adopted are consistent with those of the previous financial year. In addition, the Group has adopted those new and amended IFRS standards effective for the financial year ending 31 December 2016, which have been presented in the condensed consolidated financial statements for the year ended 31 December 2015. Those new and amended IFRS standards have not had any material impact to the interim financial statements. The interim financial statements are unaudited. All figures in the consolidated interim financial statements have been rounded and consequently the sum of individual figures may deviate from the sum presented.
2. Critical accounting estimates and judgements The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2015.
3. Segment information The Board of Directors is the Group's chief operating decision maker. Management has determined the operating segments based on the information reviewed by the Board of Directors for the purposes of allocating resources and assessing performance. The Board of Directors considers the business from a geographic perspective in Finland (Fonecta), Austria (Herold) and the Netherlands (DTG). • Fonecta reporting segment consists of print, consumer services, profile services, new media and other onlineproduct lines in Finland. • DTG reporting segment consists of print, profile services, new media and other online product lines in the Netherlands. • Herold reporting segment consists of print, profile services, new media and other online product lines in Austria. • "Other" is not a reporting segment, but consists of corporate headquarter costs and corporate financing. As of 1 August 2015, the Group has changed its reporting structure. Two holding companies were transferrred from Fonecta to Other segment. The comparable segment information has not been restated due to the immaterial impact of the change to income statement items. The impact to balance sheet comes mainly from non-operational items, which include intra-group financing and group contributions between Fonecta and the holding companies.
Revenues by segment Q1 2016
Q1 2015
2015
Last twelve months
Fonecta
31 955
36 066
141 510
137 399
DTG
17 212
18 728
73 643
72 127
Herold
15 204
15 845
78 764
78 123
1000 EUR
-
-
-
-
64 371
70 639
293 917
287 649
Other Group total
13
European Directories Group January-March 2016
EBITDA by segment Q1 2016
Q1 2015
2015
Last twelve months
Fonecta
5 685
7 441
29 444
27 688
DTG
3 294
3 047
13 217
13 464
1000 EUR
Herold Other Group total
-520
-2 071
10 405
11 956
-1 345
-1 014
-5 117
-5 448
7 114
7 403
47 949
47 660
EBITDA is calculated by adding back depreciation, amortisation and impairment charges and gain/(loss) from sale of subsidiaries to operating profit/loss.
Capital expenditure by segment 1000 EUR Fonecta DTG Herold Other Group total
Q1 2016
Q1 2015
2015
Last twelve months
420
944
3 931
3 407
1 747
1 561
5 376
5 562
702
471
5 007
5 238
-
-
-
-
2 869
2 976
14 314
14 207
Mar 31 2016
Mar 31 2015
Dec 31 2015
279 929
277 443
277 482
88 168
104 040
86 893
132 532
98 206
140 456
Assets by segments 1000 EUR Fonecta DTG Herold Other
-78 156
11 297
-78 468
Total assets in the balance sheet
422 473
490 986
426 363
Mar 31 2016
Mar 31 2015
Dec 31 2015
Fonecta
168 927
481 190
168 621
DTG
284 369
317 412
283 077
Herold
191 852
202 446
196 424
Other
-170 622
-452 002
-176 295
474 526
549 046
471 827
Liabilities by segments 1000 EUR
Total liabilities in the balance sheet
14
European Directories Group January-March 2016
4. Financial risk management The Group has not made any significant changes in policies regarding risk management during the period. Aspects of the Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the year ended 31 December 2015. The Group has no financial instruments measured at fair value. Available-for-sale financial assets consist of unquoted shares, which are measured in the Group at their acquisition price in the absence of a reliable fair value. Classification of financial instruments
31 Mar 2016
1000 EUR
Available for sale financial assets
Loans and receivables
Measured at amortised cost
Total
-
52 867
-
52 867
Assets as per balance sheet Trade and other receivables Cash and cash equivalents Available-for-sale financial assets Other financial assets Loan receivables from related parties
-
49 604
-
49 604
1 471
-
-
1 471
-
36
-
36
-
1 763
-
1 763
1 471
104 270
-
105 741
Bond
-
-
138 255
138 255
Shareholder loan
-
-
139 576
139 576
Other non-current financial liabilities
-
-
8 558
8 558
Trade payables
-
10 854
-
10 854
Other current liabilities
-
38 183
-
38 183
Book value total
-
49 037
286 389
335 426
Book value total
Liabilities as per balance sheet
31 Dec 2015
1000 EUR
Available for sale financial assets
Loans and receivables
Measured at amortised cost
Total
-
59 553
-
59 553
-
46 705
-
46 705
1 471
-
-
1 471
36
-
Assets as per balance sheet Trade and other receivables Cash and cash equivalents Available-for-sale financial assets Other financial assets
-
Loan receivables from related parties
1 731
Book value total
36 1 731
1 471
108 025
0
109 496
Bond
-
-
138 084
138 084
Shareholder loan
-
-
134 781
134 781
8 270
8 270
Liabilities as per balance sheet
Other non-current financial liabilities Trade payables
-
12 164
-
12 164
Other current liabilities
-
58 009
-
58 009
Book value total
-
70 173
281 135
351 308
15
European Directories Group January-March 2016
5. Acquisitions and disposals Acquisitions in 2016 On 22 January 2016, De Telefoongids Holding B.V. (“DTG”), a European Directories Group company, acquired 100% of the shares in DR3 B.V. (“DR3DATA”). DR3DATA is a Dutch company holding an extensive business-to-business marketing database with annual turnover of c MEUR 1.5. The acquisition price was TEUR 1,100 and was paid by way of a capital contribution to DR3DATA. The acquisition of DR3DATA will reinforce DTG’s position as the online marketing services company for the Dutch SME sector. The fair values of the acquired net assets have been determined on a provisional basis, pending completion of the final valuation. On 14 January 2016 the Group (through its group company Dogado GmbH) acquired 100 % of the shares and votes in Media Webline AG. Media Webline AG is a German company, which provides domain, webhosting and managed hosting services. The acquisition of Media Webline AG provides the Group with increased customer base. The acquisition price was TEUR 1,884, creating a goodwill of TEUR 877 which is mainly attributable to the synergies expected to be received from integrating the company into the Group's existing hosting business.The fair values of the acquired net assets have been determined on a provisional basis, pending completion of the final valuation. Detailed information about these two acquisitions has not been presented due to the small size of the acquisitions. In March 2016, the Group acquired an additional 10 % interest in Dogado Gmbh increasing its ownership from 51 % to 61 %. See details in statement of changes in total equity on page 11.
Acquisitions in 2015 On 16 November 2015 the Group acquired 100% of the shares and votes in Vilperi Digimediat Oy which is a leading Finnish company engaged in providing digital sales and marketing solutions to the SMB sector in Finland. The total consideration was TEUR 2,014 including goodwill on account of synergies of TEUR 1,894. The acquisition provided the Group with an increased customer base. On 8 August 2015, the Group acquired 100% of the shares and votes in Kontaktia Oy, which is a Finnish digital marketing agency offering a variety of digital marketing solutions and directory services. As a result the Group gains control of Kontaktia Oy. The total consideration was TEUR 2,396 including goodwill on account of synergies of TEUR 1,410. The acquisition provided the Group with an increased customer base. Detailed information about these two acquisitions has not been presented due to the small size of the acquisitions. On 10 March 2015, the Group acquired 51% of the shares and votes in Dogado GmbH. As a result the Group gained control of Dogado GmbH. The acquisition allows the Group to enter the webhosting and SaaS (Software-as-a-service) sector. In addition, the Group will through its existing sales force in Austria (but also increasingly in Germany) be an important customer and sales channel for Dogado's products and solutions. Goodwill of TEUR 1,006 is the strategic value of entering the Web-Hosting and SaaS market as well as the access to the German market/customer and the Hosting/Business know-how of key-employees at Dogado GmbH. The Group recognised a financial liability for a put option relating to the acquisition of the non-controlling interest in Dogado GmbH. The put option entitles the non-controlling interest of Dogado GmbH to sell their shares to the Group during 2018-2019. The financial liability, with nominal value of TEUR 10,000, was discounted and recorded at its net present value of TEUR 8,188 as of 31 March 2015. The unwind of the discount for January-March 2016 was TEUR 204. The carrying amount of the liability was TEUR 8,430 as of 31 March 2016.
Disposals after the reporting period On 12 April, 2016 the Group disposed of its 76.34 % shareholding in Tupalo Internetservices GmbH for a nominal amount. The sale resulted in a minor loss to the Group.
16
European Directories Group January-March 2016
6. Changes in intangible assets
1000 EUR Opening balance
Mar 31 2016
Mar 31 2015
Dec 31 2015 327 818
307 429
327 818
Acquisitions
3 193
1 504
8 996
Capital expenditures
2 599
2 526
12 495 -11 592
Disposals
-
-11 540
-5 735
-7 284
-30 288
Closing balance
307 486
313 024
307 429
Goodwill included in closing balance
214 693
210 500
213 816
-
-
-
Mar 31 2016
Mar 31 2015
Dec 31 2015
424 413
418 774
418 774
877
2 323
5 639
425 290
421 097
424 413
-210 597
-210 597
-210 597
-
-
-
-210 597
-210 597
-210 597
Balance at the beginning of period
213 816
208 177
208 177
Balance at end of period
214 693
210 500
213 816
Amortisation
Change in goodwill during the period due to impairments
Reconciliation of carrying amount of goodwill
1000 EUR Cost Balance at the beginning of period Acquisition through business combination *) Balance at end of period Impairment losses Balance at the beginning of period Impairment loss Balance at end of period Carrying amounts
*) Acquisitions during January-March 2015 (TEUR 2,323) include an adjustment of TEUR 1,317 relating to acquisition of Klantenvertellen group made in 2014.
7. Changes in property, plant and equipment
Mar 31 2016
Mar 31 2015
Dec 31 2015
5 486
5 660
5 660
Acquisitions
129
245
269
Capital expenditures
266
450
2 010
1000 EUR Opening balance
Disposals Depreciation, amortisation and impairment Translation differences and other adjustments Closing balance
17
-1
-
-
-532
-622
-2 453
-2
-
-
5 346
5 733
5 486
European Directories Group January-March 2016
8. Cash and cash equivalents
1000 EUR
Mar 31 2016
Mar 31 2015
Dec 31 2015
Cash at bank and in hand
49 141
105 379
46 242
Short-term bank deposits
463
463
463
49 604
105 842
46 705
1000 EUR
Mar 31 2016
Mar 31 2015
Dec 31 2015
Cash and cash equivalents
49 604
105 842
46 705
-
-42 086
-
49 604
63 756
46 705
Cash and cash equivalents (excluding bank overdrafts)
Cash and cash equivalents include the following for the purposes of the statement of cash flows:
Bank overdrafts Cash and cash equivalents
9. Financial liabilities
Carrying Carrying Carrying amount Mar 31 amount Mar 31 amount Dec 31 2015 2015 2016
1000 EUR Bonds
138 255
137 221
138 084
Shareholder loan and accrued interest
139 576
122 151
134 781
Other non-current financial liabilities Total
8 558
8 282
8 270
286 389
267 654
281 135
The amortisation of the bond transaction costs during January-March 2016 was TEUR 171. The amortised cost of the bond as of 31 March 2016 was TEUR 138,255. On 10 December 2013 European Directories Midco S.à r.l. issued 103,313,950 preferred equity certificates (“PECs”) with nominal value of Euro 1.00 each. Leafy S.à r.l., the parent company of European Directories Midco S.à r.l. has subscribed all issued PECs. The maturity date of the PECs is 10 December 2043. The PECs are unsecured and subordinated to all other obligations of the Company and no cash interest will be paid whilst the senior secured callable floating rate bonds issued by European Directories BondCo S.C.A. are outstanding. Each PEC carries the right to receive a fixed yield of 7.24% p.a. and a compounding profit yield of 6.26% p.a. The principal as well as accrued interest is payable on the PECs at their maturity or if the PECs would be redeemed by the Company at an earlier date. Such optional redemption is possible only to the extent that i) the Company will have sufficient funds available to settle its liabilities to all other creditors as a result of the redemption payment, and ii) the Company is not insolvent and will not become insolvent after making the redemption payment. Whilst the PECs mature in 2043, it would the Board's intention to prepay this loan as early as possible after maturing of the bond, potentially in 2019. The accrued interest on the PECs as of 31 March 2016 was TEUR 36,262 (31.3.2015: TEUR 18,837). The Group has recognised a financial liability for a put option relating to the acquisition of non-controlling interest in Dogado GmbH. The put option entitles the non-controlling interest of Dogado GmbH to sell their shares to the Group during 2018-2019. The financial liability with nominal value of TEUR 10,000 was discounted and recorded at its net present value of TEUR 8,188 as of 31 March 2015. The unwind of the discount for January-March 2016 was TEUR 204. The carrying amount of the liability was TEUR 8,430 as of 31 March 2016 and was included in other non-current financial liabilities.
18
European Directories Group January-March 2016
10. Other provisions
Other provisions
Tax provisions
1000 EUR
Mar 31 2016
Mar 31 2015
Dec 31 2015
Mar 31 2016
Mar 31 2015
Dec 31 2015
Opening balance
18 022
24 446
24 446
5 504
8 398
8 398
-
-
-
125
250
1 064
Increase in the provisions Provisions used Other
*)
Closing balance
Of which non-current
-
-
-6 424
-642
-764
-3 958
-
-
-
555
-
-
18 022
24 446
18 022
5 542
7 884
5 504
-
-
-
2 522
4 257
1 930
Of which current
18 022
24 446
18 022
3 020
3 627
3 574
Total
18 022
24 446
18 022
5 542
7 884
5 504
*) The Group reclassified TEUR 555 of provisions relating to onerous leases from other current liabilities to provisions in 2016.
Uncertain tax positions/Tax provisions The Group is involved in various discussions with local tax authorities. Austria In a recent Austrian tax audit (years 2007-2009), the tax authority denied Herold tax deduction for goodwill amortization relating to a previous acquisition. The tax authority considers the transaction a related party transaction (thereby disqualifying goodwill amortisation from 2005 and interest deduction as of 2011). In addition, the tax authority questions the arm’s length nature of certain intercompany interest expenses. The financial impact for all years up to 31 March 2016 is estimated to be maximum MEUR 10 (including interest and penalties). Herold has appealed the decision to the local court but provided for the majority of the amount claimed. In the event that a final ruling would be issued consistent with the tax authority’s view, this could potentially further increase tax costs (depending on the future Group’s financing structure) by MEUR 2 to MEUR 4 annually (depending if goodwill amortization deduction or full interest deduction is disallowed). Finland Fonecta Group has received Board of Appeal decisions for pending tax disputes in respect of European Directories Group Oy, European Directories Services Oy, European Directories Corporations Oy and Fonecta Oy. Based on these decisions, Fonecta Group companies paid MEUR 6.4 taxes (including penalties) in December 2015 which were recognized against the MEUR 15.0 tax provision. Helsinki Administrative Court issued in September 2015 a ruling in a tax dispute against Finderia Oy (a dormant subsidiary of Fonecta Oy which has been in liquidation since 2003). The Administrative Court’s ruling imposed an income tax (incl. interest) to Finderia Oy amounting to approximately MEUR 38.8. Finderia Oy has appealed the Administrative Court's decision and requested that the payment of the tax and interest would be deferred. The Supreme Administrative Court (“SAC”) in Helsinki granted Finderia Oy a deferral in full of the MEUR 38.8m tax assessment. The deferral is granted until the matter has been finally resolved by the SAC. The Group’s position is that the tax claim is unfounded and that the ruling contravenes previous court rulings and misinterprets applicable law. Finderia Oy does not have any information on whether or not the leave to appeal will be granted, nor of the timing of the process. In the event that the SAC rejects the appeal and the full claim of MEUR 38.8 (plus additional interest) becomes payable – which the Group considers unlikely in the short term, or indeed, at all – then this could put a strain on the Group’s funding, representing as it does 80% of annual EBITDA. Management is aware of this issue and is keeping it under constant review. In the condensed consolidated interim financial statements of the Group, of MEUR 15 provision initially recognised for the Finnish tax cases, MEUR 6.4 has been used in 2015 and the remaining provision amounts to MEUR 8.6 as of 31 March 2016. The remaining provision for the Austrian tax cases amounts to MEUR 9.4.
19
European Directories Group January-March 2016
11. Operating lease commitments
Mar 31 2016
1000 EUR
Mar 31 2015
Dec 31 2015
Due within a year
6 891
8 905
8 530
Due after one year and within five years
8 734
17 628
15 936
Due after five years
1 891
3 876
1 889
17 516
30 409
26 355
Total
12. Contingent liabilities Guarantees European Directories Midco S.à r.l is a guarantor for the obligations of European Directories BondCo S.C.A. under the bond (see note 10). No other Group companies are guarantors. European Directories Midco S.à r.l. and European Directories BondCo S.C.A. have provided security for certain assets (shares in certain Group companies, loan receivables and bank accounts) to secure the obligations of European Directories BondCo S.C.A. under the finance documents.
13. Legal actions and official proceedings Group companies All on-going legal actions and official proceedings are related to open tax cases. See note 10 for details on page 19.
14. Related party transactions Related party of the Group includes its subsidiaries, key management personnel and associated companies. Related party transactions include such operations that are not eliminated in the group's consolidated financial statements.
Parent and Ultimate controlling party Leafy S.à r.l., a company incorporated in Luxembourg is the immediate parent company of the Company and has majority control over the Company. The ultimate parent of European Directories Midco S.à r.l. is Triton Masterluxco 3 S.à r.l., a company incorporated in Luxembourg. Key management personnel The Board of Managers (also referred to as the Board of Directors) of European Directories Midco S.à r.l. and the CEOs in the operating companies (Fonecta, DTG, Herold) are considered as key personnel who have authority and responsibility for planning, directing and controlling the activities of the European Directories Group. Key management personnel remuneration The Key management personnel received the following benefits: 1000 EUR Short-term employee benefits
*)
Post-employment benefits Other long-term benefits Total *)
Q1 2016
Q1 2015
2015
600
730
2 987
32
32
20
-
-
-3
632
762
3 004
Includes amounts paid as remuneration to individuals or as reimbursement for services paid to enties providing the service.
The above represents the expense arising in the relevant period. As at 31 March 2016 and 31 March 2015, the management had no personal shareholdings in the Group. Management has not been granted any loans.
20
European Directories Group January-March 2016
Transactions with related parties Mar 31 2016
1000 EUR Interest on loan receivables Long-term interest-bearing loan receivables Shareholder loan and acrrued interest
Mar 31 2015
Dec 31 2015
3
1
2
1 763
1 560
1 731
139 576
122 151
134 781
On 10 December 2013 European Directories Midco S.à r.l. issued 103,313,950 preferred equity certificates (“PECs”) with nominal value of 1 Euro each. Leafy S.à r.l., the parent company of European Directories Midco S.à r.l. has subscribed all issued PECs. The PECs have a maturity date of 10 December 2043. The PECs are unsecured and subordinated to all other obligations of the Company and no cash interest will be paid whilst the bond is outstanding. Whilst the PECs mature in 2043, it would the Board's intention to prepay this loan as early as possible after maturing of the bond, potentially in 2019. Long-term interest-bearing loan receivables and interest on loan receivables include receivables from European Directories Holdco S.A, European Directories Parent S.A and Leafy S.à r.l. All transactions with related parties are with arm’s length, and are with similar terms than transactions carried out with independent parties.
15. Events after the reporting period On 2 May 2016, Marcus Englert replaced David Anderson on the board of European Directories Midco S.à r.l. As a result, the board of European Directories Midco S.à r.l. consists of the following members: Marcus Englert, Hannu Syrjänen, Björn Osterloff, Peder Prahl, Marco Sodi, Fabrice Rota and Sébastien Rimlinger. As part of an intra-group restructure in order to reduce administrative costs and bring the Austrian trading companies under the direct ownership of a Dutch holding company, the European Directories Group has finalised merger proceedings in May 2016 of its 100% owned Austrian subsidiary, Herold Holding GmbH, with a newly incorporated 100% owned Dutch subsidiary, European Directories (DH8) B.V. Both companies are 100% direct subsidiaries of European Directories (DH7) B.V. Neither company conducts any trading business, nor has any employees and the operations of the Dutch and Austrian business are completely unaffected by this matter. On 12 April, 2016 the Group disposed of its 76.34 % shareholding in Tupalo Internetservices GmbH for a nominal amount. The sale resulted in a minor loss to the Group.
21
European Directories Midco S.à r. l. Interim financial statements for the period of 1 January to 30 September 2015
European Directories Midco S.à r.l. Interim financial statements January-March 2016
R.C.S Luxembourg B 155418 46A avenue J.F. Kennedy L-1855 Luxembourg Subscribed capital: EUR 100,000
European Directories Midco S.à r.l. Interim financial statements for the period of 1 January to 31 March 2016
Table of contents Interim statement of profit and loss and other comprehensive income Interim balance sheet Interim statement of cash flows Interim statement of changes in equity Notes to the interim financial statements
2 3 4 5 6 - 15
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016 Interim financial statements are unaudited
Interim statement of profit and loss and other comprehensive income
Note
1000 EUR
Q1 2016
Q1 2015
2015
Last twelve months
Board fees Other expenses Operating loss
4 5
-131 -60 -191
-181 -83 -264
-616 -214 -830
-566 -191 -757
Finance income Finance costs Net finance costs
9 11
2,329 -4,808 -2,479
2,159 -3,952 -1,793
8,757 -16,630 -7,873
8,927 -17,486 -8,559
-2,670
-2,057
-8,703
-9,316
-2,670
-2,057
-5 -8,708
-5 -9,321
-2,670
-2,057
-8,708
-9,321
Loss before income tax Income tax Loss for the period
6
Total comprehensive income
The notes on page 6 to 15 form an integral part of these interim financial statements 2
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016 Interim financial statements are unaudited
Interim balance sheet 1000 EUR
Note(s)
Mar 31 2016
Mar 31 2015
Dec 31 2015
ASSETS Non-current assets Investments in subsidiaries Available-for-sale financial assets Loan receivables Total non-current assets
7 8 9
2,043 1,153 120,198 123,394
2,043 1,160 111,938 115,141
2,043 1,153 112,109 115,305
9
3,605 47 3,652
2,937 8 2,945
9,481 9,481
127,046
118,086
124,786
Current assets Accrued interest and other receivables Cash and cash equivalents Total current assets Total assets
EQUITY Equity attributable to owners of the parent Share capital Share premium Other reserves Retained earnings Total equity
10
100 16,449 10 -43,633 -27,074
100 16,449 10 -34,313 -17,754
100 16,449 10 -40,963 -24,404
LIABILITIES Non-current liabilities Shareholder loan and accrued interests Other financial liabilites Total non-current liabilities
11 (a) 11 (a)
139,576 139,576
122,151 1,130 123,281
134,781 134,781
11 (b) 11 (a) 11 (b)
1,130 81 13,333 14,544
24 12,535 12,559
1,130 66 13,213 14,409
Total liabilities
154,120
135,840
149,190
Total equity and liabilities
127,046
118,086
124,786
Current liabilities Other financial liabilites Accrued interest Trade and other payables Total current liabilities
The notes on page 6 to 15 form an integral part of these interim financial statements 3
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016 Interim financial statements are unaudited
Interim statement of cash flows
Q1 2016
Q1 2015
2015
Last twelve months
Loss for the period
-2,670
-2,057
-8,708
-9,321
Adjustments for: Income tax expenses Finance costs - net Operating loss
2,479 -191
1,793 -264
5 7,873 -830
5 8,559 -757
165 -
-
-
165 -
1 -25
-3 -267
-7 -5 -842
-3 -5 -600
16 -9
-11 -278
34 -808
61 -539
-
-27 -27
-20 -20
7 7
-9
-305
-828
-532
89 -33 56
324 -48 276
1,010 -219 791
775 -204 571
47
-29
-37
39
-
37
37
8
47
8
-
47
1000 EUR Cash flows from operating activities
Interest received Interest paid Realised foreign exchange gains and losses and other finance items Taxes paid Operating cash flow before movements in working capital Net change in working capital Net cash from operating activities Cash flow from investing activities Purchases of available-for-sale investments Net cash used in investing activities Cash flows before financing activities Cash flows from financing activities Proceeds from current liabilities Proceeds from non-current liabilities Loans granted to related parties Net cash from financing activities Net increase (+) / decrease (-) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at the end of period
The notes on page 6 to 15 form an integral part of these interim financial statements 4
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Interim financial statements are unaudited
Interim statement of changes in equity Equity attributable to owners of the parent Q1 2016
Share capital
1000 EUR
Balance at 31 December 2015 Total comprehensive income for the period Q1 2016 Balance at 31 March 2016
Share premium
Other reserves
Retained earnings
Total equity
100
16,449
10
-40,963
-24,404
-
-
-
-2,670
-2,670
100
16,449
10
-43,633
-27,074
Equity attributable to owners of the parent Q1 2015
Share capital
1000 EUR
Balance at 31 December 2014 Total comprehensive income for the period Q1 2015 Balance at 31 March 2015
Share premium
Other reserves
Retained earnings
Total equity
100
16,449
10
-32,256
-15,697
-
-
-
-2,057
-2,057
100
16,449
10
-34,313
-17,754
The notes on page 6 to 15 form an integral part of these interim financial statements 5
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Notes to Interim Financial Statements for the period ended 31 March 2016 Note 1 Basis of preparation The interim financial statements for the three months ended 31 March 2016 have been prepared in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting. The interim financial statements do not include all the information and disclosures required in the annual financial statements. The accounting policies adopted are consistent with those of the previous financial year. In addition, the Company has adopted those new and amended IFRS standards effective for the financial year ending 31 December 2015, which have been presented in the financial statements for the year ended 31 December 2015. Those new and amended IFRS standards have not had material impact to the interim financial statements. The interim financial statements are unaudited.
Note 2 Use of judgements and estimates The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the year ended 31 December 2015.
6
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Note 3 Segment reporting
The Company is a holding company. Following from this it has no business operations generating revenues, nor any employees. Based on the internal reporting model used by the Board of Managers, for the assessment of results and the use of resources, the Company reports as a single segment, which complies with the approach to the organisation and management of activities. The chief operating decision maker is the Board of Managers. Note 4 Board of Managers fees The Company had no employees during the period. The Company is paying remuneration to the members of the Board of Managers. Note 5 Other expenses
Q1 2016
1000 EUR
Q1 2015
2015
Last twelve months
Auditor remuneration Other administrative expenses
11 49
11 72
45 169
45 146
Total
60
83
214
191
Auditor remuneration Audit fees Total
11 11
11 11
45 45
45 45
2015
Last twelve months
Note 6 Income taxes The Company is subject to taxation under the Luxembourg tax regulation applicable to companies.
Q1 2016
1000 EUR
Q1 2015
Current income taxes
-
-
5
5
Total
-
-
5
5
7
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Note 7 Investments in subsidiaries 31 Mar 2016
1000 EUR
Balance at the beginning of the period
2,043
Changes in investments in subsidiaries
31 Mar 2015
2,043
-
Balance at the end of the period
2,043
2,043
31 Dec 2015
2,043 2,043
The Company has shareholdings in the following companies: Name
Proportion of the capital held, %
Registered office
European Directories BondCo S.C A. ("BondCo")
2C, rue Albert Borschette, L-1246 Luxembourg, R.C.S. Luxembourg
99.99%
European Directories GP ("ED GP")
2C, rue Albert Borschette, L-1246 Luxembourg, R.C.S. Luxembourg
100%
Capital and reserves
Profit / loss
1,686
-262
13
-61
On 2 December 2013 the Company contributed TEUR 2,031 to the share capital of European Directories BondCo S.C.A. and TEUR 13 to the share capital of European Directories GP. The amount of capital and reserves and the loss for the latest financial year of the said companies, as presented above, are based on the financial statements as at and for the period ended 31 December 2015. European Directories BondCo S.C.A has prepared its financial statements under IFRS and European Directories GP S.á r.I under Lux GAAP. The Company has issued a guarantee as for its own debt for the obligations of European Directories BondCo S.C.A.. under the Bonds. The Company has also pledged the shares it owns in European Directories BondCo S.C.A. and European Directories GP as well as all claims under the PIK intercompany loans as security to the Bonds. Note 8 Available-for-sale financial assets Available-for-sale financial assets comprise of the investment in Bokadirekt i Stockholm AB for an amount of TEUR 1,153 which represents 14,83% of total shares.
8
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Note 9 Non-current and current receivables Non-current receivables 1000 EUR
Loan to European Directories BondCo S.C.A. Original loan amount 10 Dec 2013 Set up fee capitalised 2014 Interest capitalised Total Loan to European Directories Parent S.A. Loan to European Directories Holdco S.A. Loan to Leafy S.á r.l Total loan receivables
31 Mar 2016
31 Mar 2015
31 Dec 2015
103,314 451 15,569 119,334 361 250 253 120,198
103,314 451 7,513 111,278 246 161 253 111,938
103,314 451 7,513 111,278 333 245 253 112,109
On 10 December 2013, in order to facilitate the financial restructuring of its group, the Company entered into a TEUR 103,314 loan agreement with its immediate subsidiary, European Directories Bondco S.C.A. The loan is bearing an interest rate of 7,9% payable annually in arrears. As of 31 March 2016 the Company has a loan receivable totalling TEUR 864 from European Directories Holdco S.A., European Directories Parent S.A. and Leafy S.à r.l. payable on demand. The loans are bearing an interest rate of 0,1% payable in arrears on 30 June and 30 December each year. From the date of the interim financial statements the Company does not have the intention to ask for repayment in the next 12 months. Current receivables
31 Mar 2016
1000 EUR
31 Mar 2015
31 Dec 2015
Interest income on financial assets classified as loans and receivables Loan to European Directories BondCo S.C.A.
2,329
2,159
8,757
Total interest income in the statement of profit and loss
2,329
2,159
8,757
Interest accrued previous year
9,457
8,212
8,212
-8,222
-7,512
-7,512
3,564
2,859
9,457
41
78
24
3,605
2,937
9,481
Set up fee/interest capitalised or paid during the period Total accrued interest Prepayments Total accrued interest and other receivables
In Q1 European Directories BondCo S.C.A. has paid TEUR 166 of intercompany interest to the Company. Other current receivables comprised prepayments made in relation to insurance contracts, recognised in the following years. The Managers assessed that interest receivables approximate their carrying amounts largely due to the short-term maturities of these instruments.
9
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Note 10 Capital and reserves 1000 EUR
Number of shares (pcs)
Share capital
Share premium
Other reserves
Total
31 Mar 2015
10,000,000
100
16,449
10
16,559
31 Mar 2016
10,000,000
100
16,449
10
16,559
Share capital The issued share capital consists of 10,000,000 shares with a nominal value of Euro 0.01 each, all of which are fully paid up. The share capital is divided into three classes of shares, namely 4,990,000 class A shares, 4,010,000 class B shares and 1,000,000 class C shares. Each share entitles the holder to one vote at the Annual General Meeting. Different shares entitle their holders to a different dividend. Other reserves Legal reserve: In accordance with the Luxembourg company law, the Company is required to transfer a minimum of 5% of its net profit for each financial year to a legal reserve. This requirement ceases to be necessary once the balance on the legal reserve reaches 10% of the issued share capital. The legal reserve is not available for distribution to the shareholders. Note 11 Non-current and current financial liabilities and other liabilities 31 Mar 2016
a.) Non-current financial liabilities
Shareholder loan (preferred equity certificates) Accrued interests on Shareholder loan Total
103,314 36,262 139,576
Long term loan from Fonecta Oy
-
Total non-current liabilities
139,576
31 Mar 2015
31 Dec 2015
103,314 18,837 122,151
103,314 31,467 134,781
1,130 1,130
0
123,281
134,781
Loan from Fonecta Oy is maturing in 2016 and therefore transferred to current liabilitites. On 10 December 2013 the Company issued 103,314 preferred equity certificates ("PECs") for an aggregate amount of TEUR 103,314 ("PECs"). Leafy S.á r.I. is the holder of all outstanding PECs. The PECs have a maturity date of 10 December 2043. The PECs carry a fixed yield and a profit yield which can be paid in full or in part by issuing new PECs to the holders. As at 31 March 2016 the accrued interest amounts to TEUR 36,262 (31 Mar 2015: TEUR 18,837).
10
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
31 Mar 2016
Accrued interest
31 Mar 2015
31 Dec 2015
Interest expenses on financial liabilities classified as loans and borrowings Shareholder loan Loan from Fonecta Oy
4,794 15 4,809
Other finance expenses
-1
Total finance cost in the statement of profit and loss
3,935 14 3,949 3
16,565 56 16,621 9
4,808
3,952
16,630
31,467
14,902
14,902
66
10
10
Accrued interest previous year Shareholder loan Loan from Fonecta Oy Interest expenses capitalised
36,261
18,837
31,467
Loan from Fonecta Oy
81
24
66
Total interest payable on borrowings
81
24
66
31 Mar 2016
31 Mar 2015
31 Dec 2015
Interest payable on borrowings
b. ) Current liabilites
Other financial liabilities Loan from Fonecta Oy Amounts due to group companies De Telefoongids Holding B.V. Fonecta Oy Herold Business Data GmbH European Directories Corporations Oy European Directories Services B.V. European Directories OpHoldco S.à r.l European Directories (Dh7) B.V.
Current tax Accrued expenses Other Total trade and other payables
1,130 1,130
-
1,130 1,130
64 85 -38 8 3,706 9,341 13,166
83 82 14 11 2,861 9,341 12,392
64 2 -38 2 3,706 9,341 13,077
1 166 13,333
1 122 20 12,535
1 134 1 13,213
The Managers assessed that trade payables and other current financial liabilities approximate their carrying amounts largely due to the shortterm maturities of these instruments.
11
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
Note 12 Financial risk management Financial risk factors
The Company’s activities expose it to a variety of financial risks: - market risk (including currency risk), fair value interest rate risk and price risk - credit risk; and - liquidity risk. The Company’s overall risk management programme focuses on the structure of the assets and liabilities. Management aims in achieving risk minimisation through the use of a (“back to back”) structure.
1. Market risk Price/Interest rate risks Market risk is the potential of suffering losses due to changes in market prices or parameters influencing market prices. It includes changes concerning illiquidity of sub-markets resulting in the inability of buying/selling positions of a special size, within a special period of time or at fair value conditions. Interest rate risk is covered by the structure of the assets and liabilities. Through back to back structuring management consider the interest cash flow risk to be mitigated. Sensitivity analysis A reasonable possible change of 100 basis points in the interest rates at the reporting date would not impact the value of assets, liability or shareholder equity in a significant way. The back to back structure of assets and liabilities offsets this risk. Currency risk The Company has no significant currency risk as borrowings and lending contracts are denominated in Euro, the functional and presentation currency of the Company. The Company is only subject to individual insignificant transactions in foreign currency which may arise. Sensitivity analysis A reasonable possible strengthening (weakening) of the Euro, US dollar (USD) or Swedish Crown (SEK) against all other currencies as at reporting date would not significantly affect the measurement of the value of assets, liabilities or shareholder equity. The back to back structure of assets and liabilities is offsetting this risk.
12
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016
2. Credit risk Credit risk is associated with potential losses arising from a business partner’s (counterparty, issuer, other contractual partner) default, i.e. its inability or unwillingness to meet contractual obligations, or the deterioration of its creditworthiness, e.g. changes in the issuer credit rating. The maximum credit risk exposure of the Company in the event of other parties failing to perform their obligations is considered to be the carrying value of the loans to the Company's subsidiary. 3. Liquidity risk Liquidity risk is the risk that the ability to meet payment obligations cannot be ensured at all times. In economic terms, this is the risk resulting from the Company’s exposure to an increase of liquidity premiums. As presented under Note 8 “Current and non-current receivables” and Note 10 “Non-current and current financial liabilities and other liabilities”, the management ensures that liquidity risk minimised by matching the liquidity and maturity structure of assets and liabilities at all times.
Changes in interest, currency and market prices would not impact the liquidity of the Company at the reporting date, value of assets, liabilities or shareholder equity in any significant way. The back to back structure of assets and liabilities offsets these risks.
13
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016 Carrying amounts and fair value The following table shows the carrying amounts of financial instruments. All financial instruments presented are valued at amortized cost through the use of the effective interest rate method. The carrying values of the financial instruments, other than shareholder loan, are considered to be a good approximation of the fair value of the financial instruments. 31 Mar 2016 Non- current assets Trade and other receivables
Financial assets not measured at fair value Trade and other receivables Cash and cash equivalents Corporate securities TOTAL
Investments
Current assets Trade and other Cash and cash receivables equivalents
Total
47 47
123,803 47 3,196 127,046
Non- current liabilities
Current liabilities
Interest bearing loans and borrowings
Interest bearing loans and Trade and other borrowings payables
Total
13,333 13,333
13,333 140,787 154,120
Current assets Trade and other Cash and cash receivables equivalents
Total
120,198 120,198
3,196 3,196
Financial liabilities not measured at fair value Trade and other payables Borrowings 139,576 TOTAL 139,576
3,605 3,605
-
1,211 1,211
31 Dec 2015 Non- current assets Trade and other receivables
Financial assets not measured at fair value Trade and other receivables Cash and cash equivalents Corporate securities TOTAL
Investments
112,109 112,109
3,196 3,196
Non- current liabilities
Interest bearing loans and borrowings
Financial liabilities not measured at fair value Trade and other payables Borrowings 134,781 TOTAL 134,781
-
121,590 3,196 124,786
Current liabilities Interest bearing loans and Trade and other borrowings payables
Total
9,481 9,481
1,130 66 1,196
14
13,213 13,213
14,343 134,847 149,190
European Directories Midco S.à r.l., Interim Financial Statements for the period ended 31 Mar 2016 Note 13 Related parties Related parties of the Company The Company’s related party comprise the following: * European Directories BondCo S.C.A. * Eurpean Directories Parent S.A. * Leafy S.à r.l * Board of Managers. * European Directories Holdco S.A. Key management personnel of the Company consist of the Board of Managers ("the Managers"). Ownership structure European Directories Midco S.à r.l. is the parent company of the European Directories Group. Triton Fund, majority through Leafy S.á r.l., holds at the balance sheet date 91.1 % of the shares in European Directories Midco S.à r.l. European Directories Midco S.à r.l. has shareholdings in two subsidiaries, European Directories BondCo S.C.A., and European Directories GP. For further information, see Note 7 "Investment in subsidiaries".
Related party transactions
1000 EUR Loan receivables Loan payables Interest income Interest expenses Accrued interest on loan receivables Accrued interest on loan payables Board fees*
Q1 2016
Q1 2015
120,198 139,576 2,329 4,809 3,564 81 185
111,938 122,151 2,159 3,949 2,859 24 238
2015 112,109 134,781 8,757 16,621 9,457 66 954
*The Midco board is active as well at the level of the Group, therefore TEUR 54 (TEUR 57) was recognised by another European Directories Group company in Q1 2016 and TEUR 131 (TEUR 181) by European Directories Midco S.à r.l. There are no commitments in respect of retirement pensions for members of the management and supervisory bodies. There are no advances, loans or commitments given on their behalf by way of guarantee of any kind granted to the members of those bodies during the year period 31 March 2016.
Note 14 Contingencies and commitments The Managers of the Company are not aware of any significant contingent liabilities as at 31 March 2016. European Directories Midco S.à r.l is a guarantor for the obligations of European Directories BondCo S.C.A. under the bond. No other Group companies are guarantors. European Directories Midco S.à r.l. and European Directories BondCo S.C.A. have provided security for certain assets (certain shares, loan receivables and bank accounts) to secure the obligations of European Directories BondCo S.C.A. under the finance documents. Note 15 Events after the balance sheet date On 2 May 2016, Marcus Englert replaced David Anderson on the board of European Directories Midco S.à r.l. As a result, the board of European Directories Midco S.à r.l. consists of the following members: Marcus Englert, Hannu Syrjänen, Björn Osterloff, Peder Prahl, Marco Sodi, Fabrice Rota and Sébastien Rimlinger.
15
European Directories BondCo S.C.A. Interim financial statements for the period of 1 January 2015 to 30 September 2015
European Directories BondCo S.C.A. Interim financial statements January-March 2016
R.C.S. Luxembourg : B181401 46A, avenue J.F. Kennedy L-1855 Luxembourg Share Capital : 2,031 Mio EUR
European Directories BondCo S.C.A. Interim financial statements for the period ended 31 March 2016
Table of contents
Interim statement of profit and loss and other comprehensive income Interim balance sheet Interim statement of changes in equity Interim statement of cash flow Notes to the interim financial statements
2 3 4 5 6 - 15
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016 Interim financial statements are unaudited
Interim statement of profit and loss and other comprehensive income Note
1000 EUR
Q1 2016
Q1 2015
2015
Last twelve months
Administrative expenses Operating loss
5
-23 -23
-36 -36
-238 -238
-225 -225
Finance income Finance costs
8 10
5,288 -5,288
5,129 -5,130
20,696 -20,711
20,855 -20,869
-
-1
-15
-14
-23
-37
-253
-239
-23
-37
-9 -262
-9 -248
-23
-37
-262
-248
Net finance costs Profit or Loss before income tax Income tax Profit or Loss for the period
Total comprehensive income
6
The notes on page 6 to 14 form an integral part of these interim financial statements 2
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016 Interim financial statements are unaudited
Interim balance sheet 31 Mar 2016
31 Mar 2015
31 Dec 2015
7 8
2,000 277,186 279,186
2,000 269,208 271,208
2,000 268,990 270,990
8
4,083 30 4,113
3,454 85 3,539
9,856 128 9,984
283,299
274,747
280,974
2,031 -346 -23 1,662
2,031 -84 -37 1,910
2,031 -84 -262 1,685
10 10
119,334 157,852 277,186
111,277 157,931 269,208
111,277 157,712 268,989
10
4,245 206 4,451
3,546 84 3,630
10,138 162 10,300
Total liabilities
281,637
272,838
279,289
Total equity and liabilities
283,299
274,747
280,974
Note(s)
1000 EUR
ASSETS Non-current assets Investments in subsidiaries Loan receivables Total non-current assets Current assets Accrued interest and other receivables Cash and cash equivalents Total current assets Total assets
EQUITY Equity attributable to owners of the parent Share capital Profit or (loss) brought forward Profit or (loss) for the year/ period Total equity
9
LIABILITIES Non-current liabilities Interest bearing loans and borrowings Bond Total non-current liabilities Current liabilities Accrued interest on loans and borrowings Trade and other payables Total current liabilities
The notes on page 6 to 14 form an integral part of these interim financial statements 3
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016 Interim financial statements are unaudited
Interim statement of changes in equity
Equity attributable to owners of the parent Q1 2016
Share capital
1000 EUR
Opening balance 1 January 2016 Total comprehensive income for the Q1 Balance at 31 March 2016
Retained earnings
Total equity
2,031
-346
1,685
-
-23
-23
2,031
-369
1,662
Equity attributable to owners of the parent Q1 2015
Share capital
1000 EUR
Retained earnings
Total equity
2,031
-84
1,947
-
-37
-37
2,031
-121
1,910
Opening balance 1 January 2015
Total comprehensive income for the Q1 Balance at 31 March 2015
The notes on page 6 to 14 form an integral part of these interim financial statements 4
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016 Interim financial statements are unaudited
Interim statement of cash flows
Q1 2016
Q1 2015
2015
Last twelve months
Loss for the period
-23
-37
-262
-248
Adjustments for: Income tax expenses Finance costs - net Operating loss
-23
1 -36
9 15 -238
9 14 -225
2,897 -2,984
2,895 -2,833
11,618 -11,392
11,620 -11,543
-110
-1 25
-15 -9 -36
-14 -9 -171
12 -98
36 61
140 104
116 -55
Changes in loan receivables Net cash used in investing activities
-
-
640 640
640 640
Cash flow before financing activities
-98
61
744
585
Cash flow from financing activities Prepayment of Bonds Net cash used in financing activities
-
-
-640 -640
-
-98
61
104
585
128
24
24
85
30
85
128
30
1000 EUR Cash flow from operating activities
Interest received Interest paid Realised foreign exchange gains and losses and other finance items Taxes paid Operating cash flow before movements in working capital Net change in working capital Net cash from operating activities
Net increase (+) / decrease (-) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at the end of period
The notes on page 6 to 14 form an integral part of these interim financial statements 5
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Notes to Interim Financial Statements for the period ended 31 March 2016 Note 1 Basis of preparation The interim financial statements for the three months ended 31 March 2016 have been prepared in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting. The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the audited annual financial statement for the period ended 31 December 2015.
The accounting policies adopted are consistent with those of the previous financial year. In addition, the Company has adopted those new and amended IFRS standards effective for the financial year ending 31 December 2015, which have been presented in the financial statements for the year ended 31 December 2015. Those new and amended IFRS standards have not had material impact to the interim financial statements. The interim financial statements are unaudited. Note 2 Use of judgements and estimates The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at and for the period ended 31 December 2015.
6
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Note 3 Segment reporting The Company is a holding company. Following from this it has no business operations generating revenues, nor any employees. Based on the internal reporting model used by the Company’s general partner European Directories GP S.à.r.l. for the assessment of results and the use of resources, the Company reports as a single segment, which complies with the approach to the organisation and management of activities. The chief operating decision maker is the Board of European Directories GP S.à r.l.
Note 4 Employee benefits During the year the Company did not employ any personnel and, consequently no payments for wages, salaries or social securities were made. Note 5 Administrative expenses
For the period ended the administrative expenses mainly comprise administration and corporate secretarial fees.
1000 EUR
Q1 2016
Auditor remuneration Other administrative expenses Total Auditor remuneration Audit fees Fees for other assurance services Tax advisory fees Total
Q1 2015
2015
Last twelve months
4
-
18
22
19 23
36 36
220 238
203 225
4 4
-
18 18
22 22
Note 6 Income taxes The Company is subject to taxation under the Luxembourg tax regulation applicable to companies. The Company’s tax position at 31 March 2016 is based on the Company’s best estimate using the available information on local taxation rules and regulations and taking into account tax facilities and non-deductible costs. The tax return for the year ended 31 December 2014 has been filed in February 2016. Any temporary difference arising on assets will be offset by a corresponding difference in liabilities. Therefore, the Company does not have any deferred tax expense.
7
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Note 7
Investments in subsidiaries
31 March 2016
1000 EUR Balance at the beginning of the period
31 March 2015
31 December 2015
2,000
2,000
2,000
-
-
-
2,000
2,000
2,000
Proportion of the capital held, %
Capital and reserves as at 31 December 2015
Changes in investments in subsidiaries Balance at the end of the period The Company has a shareholding in the following company:
Registered office
Name
European Directories OpHoldco S.à r.l
46A avenue J.F. Kennedy, L-1855 Luxembourg, Luxembourg R.C.S. B 155420
100%
-137,938
Profit for the year ended 31 December 2015
10,284
The Company was acquired on 10 December 2013. The above figures are presented under statutory requirements of Luxembourg GAAP. The Company’s general partner, European Directories GP S.à r.l., performs an impairment test annually. Note 8
Non-current and current receivables
On 10 December 2013 European Directories BondCo S.C.A. entered into loan agreements with European Directories Opholdco S.à r.l.: 1) For an amount of Euro 160,000,000.00. The interest is accrued on a daily basis at a floating rate of EURIBOR 3M + 7% p.a. and paid quarterly. 2) For an amount of Euro 103,313,950.00. The interest is accrued on a daily basis at a rate of 7.9%. Maturity of loan receivables
1000 EUR
Due in one year Due in two to five years Due in more than five years Total
8
31 Mar 2016
31 Mar 2015
157,852 119,334 277,186
157,931 111,277 269,208
31 Dec 2015 157,713 111,277 268,990
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Note 8
Non-current and current receivables (continued)
Non-current assets 31 Mar 2016
1000 EUR
Loan to subsidiary Loan 1 Loan 2 Original cost Amortisation of original cost Set up fee capitalised 2014 Prepayment of loan Interest capitalised Total loan receivables
31 Mar 2015
31 Dec 2015
160,000
160,000
103,313 263,313
103,313 263,313
160,000 103,313 263,313
-2,800
-2,800
-2,800
1,292
731
1,153
451
451
451
-640
-
-640
15,570
7,513
277,186
269,208
268,990
7,513
31 Mar 2016
31 Mar 2015
31 Dec 2015
2,959
2,966
11,940
2,328
2,163
8,756
5,288
5,129
20,696
Current assets 1000 EUR
Interest income on financial assets classified as loans and receivables during the period Loan 1 Loan 2 Total interest income in the statement of profit and loss Interest receivable beginning of the period Loan 1 Loan 2
396 9,455 9,851
Interest income received or capitalised during the period Loan 1 Loan 2 Amortised during the period Loan 1 Loan 2 Total interest receivables from loans to European Directories Opholdco S.à r.l. Loan 1 Loan 2 Other receivables
633 8,212 8,845
-2,820 -8,133 -10,953
-2,895 -7,513 -10,408
-11,618 -7,513 -19,132
-139 -139
-138 -4 -142
-559 -559
396 3,651 4,047
566 2,858 3,424
396 9,455 9,851
36
Total accrued interest and other receivables
633 8,212 8,845
4,083
30 3,454
5 9,856
The interest is calculated using the effective interest method. The nominal interest rate is 7.9% for the TEUR 103,313 shareholder loan and EURIBOR 3M +7% for the TEUR 160,000 senior secured callable floating rate bond. The Managers assessed that interest receivables approximate their carrying amounts largely due to the short-term maturities of these instruments.
9
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Note 9
Capital and reserves
Share capital On 25 October 2013 the initial capital was set at TEUR 31 represented by 1 unlimited share having a nominal value of Euro 1, which is fully paid-up and 30,999 limited shares having a nominal value of Euro 1 each, which are fully paid-up. The holders of Limited Shares bear a liability which is limited to the amount of their contribution to the Company as share capital, share premium or capital surplus. The liability of the holders of Unlimited Shares for the liabilities of the Company shall be joint and unlimited, as set out in article 102 of the Companies Act. During 2013 the entity increased the share capital by an amount of TEUR 2,000 by way of contribution in kind by issue of 2,000,000 new limited shares of a nominal value of Euro 1 each. At 31 March 2016 the share capital is represented by 2,031,000 shares with a total amount of TEUR 2,031. Legal reserve In accordance with the Luxembourg company law, the Company is required to transfer a minimum of 5% of its net profit for each financial year to a legal reserve. This transfer is made following approval of its statutory accounts by the shareholders. This requirement ceases to be necessary once the balance on the legal reserve reaches 10% of the issued share capital. The legal reserve is not available for distribution. Dividends on ordinary shares are recognised in the financial statements in the period in which they are approved by the Company's shareholders. Note 10 Non-current and current liabilities On 10 December 2013 the Company entered into a loan agreement with European Directories Midco S.à r.l. for Euro 103,313,950.00. The interest is accrued on a daily basis at a rate of 7.9%. On 10 December 2013 the Company issued senior secured callable floating rate bonds ("Bonds") in the amount of Euro 160,000,000.00 to the market. The proceeds of the Bonds were used to grant a loan to European Directories OpHoldco S.à r.l., which used the proceeds to repay all previous bank debt. The Bonds have been listed on Nasdaq Stockholm since 5 December 2014 ("ISIN SE0005505831"). The interest is accrued on a daily basis at a floating rate of 3 months EURIBOR rate plus a 7% p.a. margin. Interest is payable quarterly in arrears. The Bonds have a maturity date of 10 December 2018. The Bonds rank above the preferred equity certificates ("PECs") issued by the parent, European Directories Midco S.à r.I. European Directories Midco S.à r.I. has issued a guarantee for the obligations of the Company under the bonds. Maturity of borrowings 1000 EUR
Due in one year Due in two to five years Due in more than five years Total
10
31 Mar 2016
31 Mar 2015
157,852 119,334 277,186
157,931 111,277 269,208
31 Dec 2015 157,712 111,277 268,989
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Note 10 Non-current and current liabilities (continued) Non-current financial liabilities 31 Mar 2016
1000 EUR
31 Mar 2015
31 Dec 2015
Bond issuance
160,000
160,000
160,000
Loan to European Directories Midco S.à r.l.
103,313
103,313
103,313
263,313
263,313
263,313
Original cost Amortisation of original cost Set up fee capitalised 2014 Prepayment of bond Interest capitalised 1 January 2016 Total non-current liabilities
-2,800
-2,800
-2,800
1,292
731
1,152
451
451
451
-640
-
-640
15,570
7,513
7,513
277,186
269,208
268,989
31 Mar 2016
31 Mar 2015
31 Dec 2015
Current liabilities 1000 EUR
Interest expenses from financial liabilities measured at amortised cost during the period Loan to Midco S.à r.l Bonds
Other finance expenses
2,328 2,959
2,163 2,966
8,756 11,940
5,288
5,129
20,696
1
15
5,288
5,130
20,711
9,455 683 10,139
8,212 693 8,905
8,212 693 8,905
-8,221 -2,820 -11,040
-7,513 -2,833 -10,345
-
Total finance costs in the statement of profit and loss
Interest payable begining of the period Loan to Midco S.à r.l Bonds
Interest expenses paid or capitalised during the period Loan to Midco S.à r.l Bonds
-7,513 -2,820 -10,333
Amortised during the period Loan to Midco S.à r.l
-
Bonds
-140 -140
-4 -138 -142
-599 -559
Interest payable on loan to Midco S.à r.l. Interest payable on bonds
3,563 682
2,858 688
9,455 683
Total accrued interest on loans and borrowings
4,245
3,546
10,138
11
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016
Note 10 Non-current and current liabilities (continued) Trade and other payables comprise accrued audit remuneration. The Board assessed that trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
Note 11 Financial risk management Financial risk A Company’s activities expose it to a variety of financial risks: • Market risk, including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk • Credit risk; and • Liquidity risk The company’s overall risk management programme focuses on the structure of the assets and liabilities. Management aims in achieving risk minimisation through the use of a (*back to back”) structure. Market risk Price/ Interest rate risk Market risk is the potential of suffering losses due to changes in market prices or parameters influencing market prices. It includes changes concerning illiquidity of sub-markets resulting in the inability of buying/ selling positions of a special size, within a special period of time or at fair value conditions. Interest rate risk is covered by the structure of the assets and liabilities. Through back to back structuring management consider the interest cash flow risk to be mitigated. Sensitivity analysis A reasonable possible change of 100 basis points in the interest rate at the reporting date would not impact the value of assets, liability or shareholder equity in a significant way. The back to back structure of assets and liabilities offsets this risk. Currency risk The Company has no significant currency risk as borrowings and lending contracts are denominated in Euro, the functional and presentation currency of the Company. The Company is only subject to individual insignificant transactions in foreign currency which may arise. Sensitivity analysis A reasonable possible strengthening (weakening) of Euro, US dollar (USD) or Swedish Krona (SEK) against all other currencies as at reporting date would not significantly affect the measurement of the value of assets, liabilities or shareholder equity. The back to back structure of assets and liabilities offsets this risk. Credit risk Credit risk is associated with potential losses arising from a business partner’s (counterparty, issuer, other contractual partner) default, i.e. its inability or unwillingness to meet contractual obligations, or the deterioration of its creditworthiness, e.g. changes in the issuer credit rating. The maximum credit risk exposure of the Company in the event of other parties failing to perform their obligations is considered to be the carrying value of loans to the Company's subsidiary. Liquidity risk Liquidity risk is the risk that the ability to meet payment obligations cannot be ensured at all times. In economic terms, this is the risk resulting from the Company’s exposure to an increase of liquidity premiums. As presented under Note 8. “Non-current and current receivables” and 10. “Non-current and current financial liabilities and other liabilities”, the Board ensures that liquidity risk is minimised by matching the liquidity and maturity structure of assets and liabilities at all times. Changes in interest, currency and market prices would not impact the liquidity of the Company at the reporting date, value of assets, liabilities or shareholder equity in any significant way. The back to back structure of assets and liabilities offsets these risks.
12
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016 Note 11
Financial risk management (continued)
Carrying amounts and fair value The following table shows the carrying amounts of financial instruments. All financial instruments presented are valued at amortized cost through the use of the effective interest rate method. The carrying values of the financial instruments, other than bond, are considered to be a good approximation of the fair value of the financial instruments. 31 Mar 2016 Non- current assets
Trade and other receivables 1000 EUR Financial assets not measured at fair value Trade and other receivables 277,186 Cash and cash equivalents Corporate securities TOTAL 277,186
Current assets
Investments in subsidiaries
Trade and other receivables
Cash and cash equivalents
Total
2,000 2,000
4,083 4,083
30 30
281,269 30 2,000 283,299
Current liabilities Interest bearing loans Trade and other and borrowings payables
Total
Non- current liabilities
1000 EUR Interest bearing loans and borrowings Financial liabilities not measured at fair value Trade and other payables Borrowings 119,334 Bond issue 157,852 TOTAL 277,186
3,563 682 4,245
206 206
206 122,896 158,534 281,637
Current assets Trade and other Cash and cash receivables equivalents
Total
31 Dec 2015
1000 EUR
Non- current assets Trade and other Investments in receivables subsidiaries
Financial assets not measured at fair value Trade and other receivables 268,990 Cash and cash equivalents Corporate securities TOTAL
268,990
2,000 2,000
Non- current liabilities
1000 EUR
Interest bearing loans and borrowings
Financial liabilities not measured at fair value Trade and other payables Borrowings 111,277 Bond issue 157,712 TOTAL 268,989
9,856 9,856
128 128
278,846 128 2,000 280,974
Current liabilities Interest bearing loans Trade and other and borrowings payables
Total
9,455 683 10,138
13
162 162
162 120,732 158,395 279,289
European Directories Bondco S.C.A. Interim financial statements for the period ended 31 March 2016 Note 12
Related parties
Related parties of the Company
The Company’s related parties comprise the following: * Leafy S.à.r.l. * European Directories OpHoldco S.à r.l. * European Directories Midco S.à r.l. * European Directories GP S.à r.l. * Supervisory Board. Key management personnel of the Company consist of the members of the Supervisory Board. Ownership structure
European Directories BondCo S.C.A. is a Luxembourg partnership limited by shares with European Directories GP S.à r.l as its unlimited partner and European Directories Midco S.à r.l., the parent company of the European Directories Group, as its limited partner. European Directories Midco S.à r.l. is a holding company and is registered with the Luxembourg register of commerce under number B 155418. Triton Fund, through Leafy S.á r.l., holds 91.1 % of the shares in European Directories Midco S.à r.l. European Directories BondCo S.C.A. owns 100 % in European Directories OpHoldco S.à r.l. (see Note 7 "Investments in subsidiaries".)
Related party transactions
1000 EUR Loan receivables Loan payables Interest income Interest expenses Accrued interest on loan receivables Accrued interest on loan payables
Q1 2016
Q1 2015
2015
277,186 119,334 5,288 2,328 4,047 3,563
269,208 111,277 5,129 2,163 3,424 2,858
268,990 111,277 20,696 8,756 9,851 9,455
There are no commitments in respect of retirement pensions for members of the management and supervisory bodies. There are no advances, loans or commitments given on their behalf by way of guarantee of any kind granted to the members of those bodies during the financial period ended 31 March 2016. Note 13
Contingencies and commitments
The members of the Supervisory Board of the Company are not aware of any significant contingent liabilities as at 31 March 2016. European Directories Midco S.à r.l is a guarantor for the obligations of European Directories BondCo S.C.A. under the bond. No other Group companies are guarantors. European Directories Midco S.à r.l. and European Directories BondCo S.C.A. have provided security for certain assets (certain shares, loan receivables and bank accounts) to secure the obligations of European Directories BondCo S.C.A. under the finance documents.
Note 14
Events after the balance sheet date
The general partner of European Directories BondCo S.C.A., European Directories GP S.à r.l. has on 13 May 2016 resolved on changes to the board members of European Directories GP S.à r.l. Dr. Thomas Sonnenberg has resigned from the board as of 13 May 2016 and Mr. John Sutherland has been appointed as board member as of 13 May 2016.
14
