Eniro acquires largest directory company in Poland

Eniro acquires largest directory company in Poland · Eniro has agreed to acquire Polish Panorama Polska Sp. z.o.o from Telia for approximately SEK 1 170 million. · Eniro will pay through newly issued shares in Eniro with a value of approximately SEK 860 million and with cash of approximately SEK 310 million. Telia's holdings in Eniro will not exceed 49.9 percent after the transaction · Panorama Polska is the largest directory company in Poland with a market share of more than 50 percent. The company offers directory services, both offline and online · Panorama also owns one of Poland's largest Internet portals · Panorama Polska's revenue for year 2000 was approximately SEK 410 million, with an EBITDA of approximately SEK 70 million · Panorama Polska was in 1999 awarded "Company of the Year in Poland" · After the acquisition, approximately 50 percent of Eniros revenues are generated outside of Sweden For further information: Lars Guldstrand, President and CEO Eniro AB, +46- 8-634 70 01, +46-70-528 81 81 Lennart Bernard, Chief Financial Director, Eniro AB, +46-8-634 70 30, +46-70-825 18 34 Anna-Carin Gripwall, Chief Communications Director Eniro AB, +46-8-634 70 04, +46-70-349 30 64 Eniro is the leading directory company in Northern Europe, offline and online. The business has a turnover of SEK 3 004m and an EBITDA of SEK 891m. After the acquisition, Eniro operates in 23 countries and has 3 200 employees. In total, Eniro has 800 directory titles, of which 35 million copies are distributed. The number of searches at Eniro's Online-services amount to more than 65 million. www.eniro.com The acquisition of Panorama Polska Eniro AB (publ.) ("Eniro") has agreed to acquire 100 percent of the shares in Panorama Polska Sp. z.o.o ("Panorama") from Telia AB (publ.) ("Telia"). Until recently Swedish Telia owned 49 percent and GTE Information Services (UK) Limited, a Verizon company, owned 51 percent of Panorama. In a related move, Telia has acquired GTE's shares in Panorama and is now selling all of its interests in Panorama to Eniro. The purchase price amounts to SEK 1,170 million. The consideration will be paid approximately 75 percent in shares and 25 percent in cash. The number of shares to be issued will be calculated so that Telia's holding in Eniro will not exceed 49,9 percent after the transaction. The value of the share part of the consideration will be set according to the average of the closing stock market quotation of the Eniro share at OM Stockholm Exchange during a 20-trading day period after signing. The cash portion of the consideration will be calculated as the remainder of the purchase price. The split between shares and cash will be approximately SEK 310 million in cash and 8 197 400 newly issued shares in Eniro to a value of SEK 860 million. The acquisition is scheduled to take place in April 2001, after necessary regulatory and Anti-Trust approvals in Poland. The new Eniro shares will be issued in accordance with an authorisation granted the Board of Directors of Eniro by an Extra Ordinary Shareholders Meeting. Panorama Polska Panorama was founded in 1992 and is the largest directory company in Poland and operates in all regions of the country. Revenue for 2000 amounted to approximately SEK 410 million, of which more than 5 percent derives from the online business. EBITDA was approximately SEK 70 million. Panorama is the market leader in Poland and holds a market share of more than 50 percent. Panorama has 690 employees. The largest employee group is direct sales representatives and constitutes over 60 percent of the total. Services comprise traditional directory business as well as online business. Panorama's database consists of approximately 700,000 businesses and the number of advertisers amounted to approximately 50,000 in 2000, a net growth of 15 percent compared with 1999. Panorama publishes approximately 50 directory titles with a total circulation of more than 4.1 million copies. Panorama owns one of the largest Internet portals in Poland, with almost 6 million unique users annually. The Polish market The GDP growth rate is currently 3.5-4 percent. The economy is stabilising and there is a high growth of foreign investments. Poland has applied for EU membership with the goal of becoming a member in 2003. Poland has 39 million inhabitants. The number of telephone subscribers per hundred inhabitants was 27.5 in 2000. The number of telephone subscribers is expected to increase during the coming years. The Polish Internet market is estimated at 2.8 million users, which is twice the 1999 level. The market is expected to grow significantly in the next few of years and is estimated to reach approximately 9 million Internet users in 2002 1) . The Polish advertising market has shown exceptional growth in recent years. This rate of growth is expected to continue, but the rate will decrease somewhat. The market grew by approximately 11 percent during 2000. The growth of the advertising market in general and the market for directory advertising in particular, can to a large degree be explained by Poland's dynamic growth, adjustment to the European infrastructure, and to its consumer behaviour. The Polish directory market is still fairly under developed 0,05 percent of GDP and 2 USD per capita of the advertising market vs. Swedens 0,12 percent and 32 USD respectively. B2B companies dominate the market, while the B2C segment currently is less developed. There are two major directory companies, of whom Panorama is the market leader, and several small local publishers. Acquisition rationale Panorama has a leading position in the Polish directory advertising market. The acquisition of Panorama will enable Eniro to establish itself in an important market viewed from several perspectives. Poland is among the largest market in Eastern Europe and a market that is demonstrating significant change and growth. The acquisition is a further step in Eniro's strategy to become one of the leading directional media companies, in Europe. The Polish acquisition added to the two recent acquisitions in Germany clearly solidifies Eniro's leading position in Northern Europe. After the acquisition is completed, Eniro will be present in 23 countries and have approximately 3,200 employees. Eniro will publish more than 800 directory titles with 35 million copies distributed. The number of searches on Eniro's Internet services will exceed 65 million a year. "We are very pleased that we were able to acquire Panorama Polska, an excellent company in one of the most dynamic and promising markets in Europe. We know both the Polish market and the company quite well, since our time with Telia and think this is an excellent opportunity for Eniro, both from a geographic fit and growth perpective " says Lars Guldstrand, President and CEO of Eniro. Financial effects of the acquisition The acquisition is expected to have a slightly negative effect on earnings per share (before goodwill amortisation) during 2001. The acquisition results in goodwill of approximately SEK 1 030 million. The goodwill will be amortised over 20 years. Exchange rate: 1 PLZ = 2.458 SEK Fact sheet Facts about Eniro Eniro is Northern Europe's largest supplier of off- and online directory services. The company was listed on the Stockholm Exchange O-list on October 10, 2000 (today on the Attract 40 list). Eniro's portfolio consists of local directories, regional directories and B2B directories. Eniro delivers directories and services both offline (printed and CD-ROM) and online (fixed and mobile Internet, voice telephony and other interactive media). Eniro acquired three companies during December 2000: ZAO Yellow Pages (Russia), Windhager (Germany) and Wer liefert was? (Germany). During 2000 Eniro's revenues increased by 13 percent compared with 1999, and amounted to SEK 3 004 million. Revenues from online business amounted to SEK 442 million, an increase of 111 percent. Eniro's business is to create marketplaces, connecting buyers and sellers. During 1999, 1 billion searches were made in Sweden alone on Eniro's marketplaces, which facilitated trade with a value exceeding SEK 300 billion. Eniro has successfully offered its products and services in the Swedish, Danish, Finnish and East European markets. This has been accomplished through acquisitions and through greenfield investments. Eniro also recently established a presence in Germany. Eniro has achieved a strong and competitive position in almost all of its geographical markets. In Sweden in 2000, Eniro gained 11 percent of the traditional advertisement market and 33 percent of the total Internet advertisement market, resulting in Eniro being Sweden's largest Internet advertising company. Eniro holds a strong second position in the Danish and Finnish directory markets with an estimated 22 percent share of the Danish market and 32 percent of the Finnish market. Eniro is a leading supplier of directory information in key geographical regions in the Baltic countries (Estonia, Latvia and Lithuania) and also in a number of other Eastern European countries (Russia, Belarus and the Ukraine). After the acquisitions of the German companies, the German market is the second largest market for Eniro, after the Swedish market. Facts about Panorama Polska Panorama was founded in 1992 as US WEST Polska. The company grew its operation substantially during the mid-1990s. In 1997 GTE Information Services (UK) Limited (today a part of the Verizon family of companies) and Telia respectively bought 51 and 49 percent of the company. The name was subsequently changed to Panorama Polska. Panorama operates in all regions of Poland, including local and regional Yellow Pages products. Panorama publishes approximately 50 directory titles, with a circulation of approximately 4.1 million copies. Panorama also provides information on the Internet and CD-ROM. In addition to being successful in the sales and marketing areas, Panorama has achieved its strong market position through offering reliable high quality products and services covering all of Poland. The development of new media offers excellent growth opportunities, and the size of Panorama's customer database creates new opportunities to capitalise on the new technology. In 1999, Panorama Polska was awarded "Company of the year in Poland". All Polish companies were considered in the contest and Panorama entered in the information category. This distinguished award was presented by the Polish Business Club. The company has also received recognition, the Laurel trophy, for its environment and recycling initiatives. Products The main products are local and regional directories, B2B and niche directories. During 1999 Panorama established Panorama Firm as one of the leading Internet portals in Poland, and the first CD-ROM product was also released. Panorama's range of directory titles has established high brand awareness and recognition in Poland. Distribution is targeted to all firms in Poland and at an increasing rate to households. The directories are distributed free of charge. Facts about the directory advertising market The Polish advertising market has shown exceptional growth in recent years. This rate of growth is expected to continue, but the rate will decrease somewhat. The market grew by approximately 11 percent during 2000. The directory advertising market is a quite new segment in Poland, being established some eight years ago. The growth in the directory advertising market, 25 percent growth compared to previous year, is higher than the total advertising market growth. The directory advertising market is estimated to account for 4-5 percent of the total advertising spending and thus being in line with the level in Germany, the lowest share among the major Western economies. With a population of 39 million inhabitants and a total directory advertising spending of USD 74 million, the average per capita is approximately USD 2 per capita, thus being 6 percent of the average spending in Sweden and 14 percent of the average spending in Germany. The Swedish and Polish advertising and directory advertising markets 1999 Swede Poland n Population (million) 8.9 39 Internet users (million), 2000 3) 5.0 2.8 Internet penetration (%), 2000 3) 56.2 7.3 Advertising market (USD million), 2000 1 904 1 753 1) Directory advertising market (USD 287 74 million) 2) Directory advertising's share of the 15.1 4.2 advertising market (%) 2) Internet advertising market (USD 59.9 2.5 million) 4) Advertising market per capita (USD) 1) 214 45 Directory advertising market per 32.2 1.9 capita (USD) 2) Internet advertising market per capita 6.7 0.06 (USD) 3) Sources: 1) Estimates made by Zenith 2) Simba, IRM, Eniro 3) NUA, MMXI (Sifo) 4) CDM Pekao S.A (SEK 100 = 42,28 PLN, $1 = SEK 9,47) OBOP/Taylor Nielsen Dec. 2000 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/03/12/20010312BIT00220/bit0001.doc http://www.bit.se/bitonline/2001/03/12/20010312BIT00220/bit0001.pdf