Q3 2009
CEO Jesper Kärrbrink's comments on the Interim report January - September 2009
Our work to transform Eniro from print dependency to online opportunities continues. We are now in the midst of a Group-wide change process that will result in more relevant searches, greater customer confidence and a more efficient cost structure. To support the major projects now in progress and to gain additional cost savings, we established a new organization at the beginning of October.
The third quarter was characterized by intensive work to enhance our core local search business to become more relevant and user-friendly and to provide greater customer value. This work included launching Eniro Procurement, based on the Oreo acquisition, and a successful launch of white search. We are also conducting a test of a new sales concept based on a changed product mix over time and a single sales force that sells a directory database offering in which the key concepts are searchability, visibility and leads. The objective is to introduce a more effective sales concept that will be gradually introduced in our major markets during 2010. Thus far, the test has been successful.
Revenues declined three percent organically in the third quarter. We are never satisfied with negative growth figures, but today’s weak economy continues to command great respect, at the same time as the structural decline in print continues. During the quarter, we have also seen lower operational cash flow. The extensive change projects that we are implementing resulted in restructuring costs during the quarter that had a negative impact on earnings.
When we presented our strategy for transforming Eniro a year ago, we set mid-term targets to illustrate the development during the transition from declining demand for printed products to increasing online usage. We now see signs of a more rapid decline in print as a result of a general weakening of the economy. This is now affecting development in the short term before the full effect of the online investments now being made can be achieved. Despite this development, the medium-term outlook of a top line growth of 0 to 2 percent remains even though we expect the negative growth to continue into 2010.
However, I am convinced that we will see results of implementing our strategy towards the end of 2010 and that the development will continue during 2011 to finally achieve full effect as we reach the end the investment period in 2012. I am certain that the changes and investments now being implemented will strengthen Eniro’s position over the long term.
Jesper Kärrbrink, President and CEO
Last updated:2009-10-28