SoLocal : 2021 first half results

PRESS RELEASE

Boulogne-Billancourt, 28th July 2021

2021 first half results

Flat revenue in Q2, limiting H1 revenue decrease to 5% vs prior year

Stable customer base for three quarters in a row

H1 2021 EBITDA on track to deliver €120m guidance for the year 2021 Presentation of the new 3-year roadmap on October 20th 2021

2021 second quarter: Stable Revenue1,2, supported by a stabilized customer base3 for the past 3 quarters

• Q2 2021 stable revenue : €107.9 million, i.e. +0.6% vs. Q2 20201,2
• Stabilized customer base3 over the quarter with 314k customers, thanks to an improved churn rate at 13.9% vs. 16.7% in Q1 2021
• ARPA6 slightly up at €1,337 vs. €1,321 in Q1 2021
• More than 85% of Q2 order intake 4 in subscription mode5, i.e. +9 pts vs. Q2 2020

Results of the first semester of 2021

• Consolidated revenue: €214.6 million, -5.1% vs. H1 20201,2
• Secured revenue7 for current year of €365 million as at 30th June 2021, vs. €388 million as at 30th June 2020
• Decreased order backlog at €266 million as at 30th June 2021 vs. €282.7 million as at 31st March 2021
• Recurring EBITDA of €56.5 million, vs. €73.8 million in H1 20202 (-23.4%)
• Consolidated operating profit: €34.2 million vs. €47.6 million in H1 20201,2 (-28.2%)
• Cash on balance sheet: €71 million as at 30th June 2021 vs. €61.4 million as at 31st December 2020
• Net debt slightly down at €187 million as at 30th June 2021, with a net leverage ratio of 2.3x8
• Confirmation of the partial and mandatory repayment of the RCF of €6 million as of 30th September 2021 (including €3 m in cash), as committed during the financial restructuring

Outlook 2021

• Stabilization of the customer base3 over theyear 2021, in line with the business momentum in the second quarter 2021
• Confirmed EBITDA of c. €120 million for 2021
• Strategic review to be completed and 3-year financial objectives to be presented on 20th October 2021

1

When releasing revenue of the first half of 2021, Hervé Milcent, Solocal Chief Executive Officer, said :

• Solocal realized a first half of the year in line with expectations, with key operational indicators either stable or in slight progression. While the Group is still facing the consequences of a lengthy health crisis, these are encouraging signals regarding the Group's ability to get through the crisis, and more importantly, to fully benefit from the upcoming return to normal. These positive developments constitute strong foundations for our new strategic roadmap which will enable Solocal to engage in a long-lasting growth path. This is all the work that I have been carrying out since my arrival, with the support of our teams and the trust of our new Chairman of the Board of Directors, Philippe Mellier. A strategic presentation will take place on 20th October 2021 in order to present the new roadmap and our financial targets over the next 3 years".

________________________________________________________________________

The Board of Directors approved the Group's consolidated financial statements as at 30th June 2021. Limited review procedures on the half-yearly accounts were carried out. The limited review report is to be released.

Financial performance indicators are commented on the scope of continuing operations. The financial elements presented in this press release for 2020 are revised in light of the scope of activity as at 30th June 2021.

________________________________________________________________________

2

1. Revenue and order backlog

Reminder: The Print business was discontinued in November 2020 and is restated for 2020 as discontinued operationsunderIFRS 5. Printrevenueand directcosts arethereforepresented under « Income before tax from discontinued activities » in the first half 2020 Income Statement

Solocal revenue1,2 in the second quarter of 2021 and over the first half of 2021 are as follows:

In million euros	Q2 2020	Q2 2021	Change	H1 2020	H1 2021	Change
Connect	25.9	30.7	+18.8%	52.1	61.8	+18.6%
Booster	66.8	61.5	-8.0%	138.6	121.4	-12.4%
Websites	14.6	15.7	+7.2%	35.4	31.3	-11.6%
Total revenue	107.3	107.9	+0.6%	226.1	214.6	-5.1%

Secondquarter2021consolidatedrevenue1,2 amount to €107.9 million, up +0.6% compared to the second quarter 2020 revenue1,2. This revenue's stability in the quarter is due to :

1. the conversion into revenue of the decrease in past quarters' Digital order intake4 because of the health crisis and especially the lockdown that took place in Q1 2020, offset by
2. a substantial improvement in business activity on Connect & Websites

Firsthalf2021 consolidatedrevenue1 amount to €214.6 million, down -5.1% compared to the first half 2020 revenue1,2. This reduction is mainly the result of the decrease in order intake recorded during lockdown periods in 2020, while the Group had not yet benefited from the virtues of its transition to the subscription model.

Inorder toillustrate the evolutionof new digital services, Digital revenueis presented in three business lines:

• Booster: Businesses related to advertising, representing 56% of Digital revenues for 2020 (Booster Contact, Priority Ranking, etc);
• Connect (29% of revenue, formerly Presence) which includes the business of Digital Presence; and
• Websites (15% of revenue) for the different ranges of websites (Essentiel, Premium, Privilege).

Thesubscriptionmodel has been rolled out since the second half of 2019, and therefore the revenue is now composed of first-year engagement order intake (75% over the first half of 2021) and order intake4 generated by autorenewal (25% over the first half of 2021). These figures were respectively at 91% and 9% over the first half of 2020. The share of autorenewed order intake will keep on increasing in the upcoming quarters, which will provide additional visibility on revenue generation while enabling the Group salesforce to focus more on the development of existing accounts & the acquisition of new customers.

3

Moreover, 70% of H1 2021 revenue stems from order intake4 recorded in previous years and 30% from 2021 order intake4. This 30% share increased by +10pts compared to H1 2020 (20% of H1 2020 revenue came from 2020 order intake), thus reflecting the switch to subscription mode of the digital services and, hence, the time reduction between the order intake recording and revenue generation.

Solocal order backlog as at 30th June 2021 breaks down as follows:

In million euros	31/03/2021	30/06/2021	Change
Digital order backlog	282.7	266.0	-5.9%

The order backlog represents €266 million as at 30th June 2021, a -5.9% decrease compared to 31st March 2021. This decrease is explained by a lower value of order intake4 recorded in the second quarter 2021 in comparison with revenue booked over the same period,

The €266 million order backlog is expected to convert into revenue to the tune of 57%over the second half 2021 and 39% in the year 2022.

Based on management's best estimates, as of 30th June 2021, secured revenue7 for 2021 amounts to €365 million for the year 2021 thanks to the order intake4 already recorded at this date. This figure amounted to €388 million as at 30th June 2020 for the year 2020. As a reminder, this secured revenue7 was down -€52 million as at 31st March 2021 compared to 31st March 2020. The reduction of this gap illustrates the gradual stabilization of the Group's activity.

2. Operational performance indicators

Solocal's operational perfomance indicators for Q2 2021 and H1 2021 are as follows:

	Q2 2020	Q2 2021	Change	H1 2020	H1 2021	Change
Subscription-based order intake - as a % of Digital	76%	85%	+9 pts	78%	87%	+9 pts
order intake
Growth KPI		65%		-	26%
Traffic : number of search PagesJaunes - in million	-	-	-	790	784	-0.8%

4

In the second quarter 2021, 85% of order intake4 were recorded as subscription-based products5, i.e. an increase of +9 points compared to Q2 2020. In total over the first half 2021, 87% of order intake7 were subscription - based5, i.e. an increase of +9 pts compared to H1 2020, mainly stemming from Priority Ranking and Connect offers, Websites and Booster Contact. This subscription-based order intake rate has been experiencing an ongoing ramp-up since the full roll-out of new digital Connect (previously Presence) and Priority Ranking services in July 2019. Subscription-based products are pivotal for the transformation of the business model, as it allows (i) a decrease in churn, while (ii) more importantly, it should foster an increase in new customer acquisition and cross-selling of existing clients by freeing up some salesforce time historically devoted to renewal.

Since February 2021, Solocal has been disclosing a "growth KPI", which corresponds to the contribution of order intake4 of the quarter to revenue for the next twelve months. This indicator allows the group to monitor its order intake conversion into revenue and is up

• 65% in the second quarter of 2021 vs. the second quarter of 2020. This means that the second quarter of 2021 order intake helped secure + 65% in revenue over the upcoming 12 months compared to the order intake recorded in the second quarter of 2020. This increase is explained in particular by a favourable base effect linked to the negative impact of the crisis and health measures in the second quarter of 2020.

PagesJaunes traffic is based on :

• Direct trafficfrom visits made directly by user on pagesjaunes.fr or PagesJaunes App or via search engines using SEO (search for our content);
• Traffic on partner websites on which Solocal display content. Since April 2021, the
  "cookies and other tracers" guidelines of the CNIL require the explicit consent of individuals to measure Solocal's traffic on its partners' website. The "visits" indicator is weakened as the traffic of syndicated directories is no longer measurable in a certified manner. The progressive ban of third-party cookies by internet browsers reinforces the weakness of this indicator for the future.

For these reasons, the group no longer communicates its « total traffic » figure but now the number of « searches ». The total number of searches thus stands at 784 million in the first half of 2021 vs. 790 million in the first half of 2020, i.e. a decrease of -0.8%.

5