Year-end report 2006
CEO Tomas Franzén’s comments in the year-end report 2006.
For Eniro 2006 has been a very important year. It has been the year when we laid the foundation for accelerated online growth through increased product development, increased focus on separate sales in most of our markets, enhancing our online market position through important acquisitions such as Din Pris and Leta.se and new partnerships like the joint venture with Aller regarding our portal in Norway, sol.no. We will continue to focus on these areas during 2007 and continue to add interesting online business through acquisitions and create new business opportunities by adding more partnerships.
2006 was also the year when we integrated the acquisition of Findexa and became the Nordic market leader in search. The integration has developed according to plan and the synergies we aimed for in the acquisition have been realized.
We have improved our operational EBITDA margins in all our business units and I am pleased with the improvement in our smaller markets Finland and Denmark where we are competing from a challenger position.
EBITDA for the Group improved by 9 percent to SEK 2,290 M (2,093), including a capital gain of
SEK 43 M. Our guidance was an improvement of 5-7 percent. Excluding the capital gain we came in at the high end of this range and with a margin at Group level of 34 percent.
Online revenues for the Group increased organically by 14 percent for 2006, a good figure in a competitive market. By introducing new service concepts and developing our directory assistance services, we were able to increase revenues from voice by 2 percent, organically. Offline revenues in the Group declined by 5 percent, organically.
Our ambition for revenue growth in a mid term perspective is 3-5 percent. To achieve this
we must accelerate growth in online revenues increase revenues from voice and reduce revenue decline in offline. At the same time we need to retain cost controls, but also become better at realizing Group synergies.
Norway, Finland, Denmark and Poland are experiencing high growth in online revenues. The challenge lies in increasing growth in Sweden. In Germany we have the turning point behind us and we see strong increase in order intake and new customers.
To meet user requirements and to increase Internet traffic, new versions of eniro.se, eniro.fi, eniro.dk, gulesider.no and kvasir.no have been launched with new designs and improved functionalities. Significant effort is being devoted to new customer offerings. Examples of new offerings include transaction-based payment and services that bring users closer to the transaction. These solutions enable Eniro to be an active participant in the fastest growing market segment, which is the market for sponsored links.
Revenues from offline declined by 5 percent during 2006. The ambition is to reduce and preferably stabilize the revenue decline. Denmark and Poland already report stable offline revenues. Sweden and Finland are making satisfactory progress while Norway is the market in which Eniro currently faces the greatest challenge. The keys to success are continuous product development that stimulates usage while increasing the effect of advertising, our ability to lead and develop the sales force based on Eniro´s sales concept, and our ability to demonstrate the value of advertising for our advertisers.
For 2006 the Board will propose to the AGM a dividend in line with our dividend policy - 76 percent of net income, meaning 4.40 SEK per share – in total SEK 797 M.
Tomas Franzén
President and CEO
Last updated: 2007-04-25