Seat Pagine Gialle: An Overview of Their New Strategic Plan


Last Friday, the exec team at [praized subtype=”small” pid=”7a4e7f1586dc54f8f2f5f0da536a084d” type=”badge” dynamic=”true”] presented their 2009-2011 plan to financial analysts. I just read through the presentation and here are the interesting highlights:

2008 Overview:

  • Difficult year 2008 for the group (total revenues are down 4.8%) but they met their ebitda guidance (nonetheless down 6.6%)
  • In Italy, print revenues were down 1.1% but online revenues were up 18.4%. Online revenues represent more than 15% of all Italian revenues.
  • Interestingly, Seat experienced explosive online revenue growth (+27%) in Q3 and Q4 2008 because of new Internet offers launched in September. I believe those new products are priority placement and SEO/SEM offers (see slide 10 of this presentation).
  • Online product gross margins (72%) are almost as high as print margins (75%)

Usage and advertiser data:

  • 22M print users
  • 11M online users
  • 500M look-ups per year (print & online)
  • 500,000 advertisers

Ongoing strategy:

  • Their main strategy: “Invest in the Italian core business and protect Seat’s strong cash flow generation to position the Group for successful refinancing of debt in 2011”. It could be summed up as “Italy and Online” + “International assets not core”.
  • 2011: they expect Internet revenues to be higher than 25% of total revenues
  • Online usage will be driven by improved functionalities, SEO and branding
  • Online revenues will grow through product innovation and new salespeople
  • Move to pay-for-performance in their voice product

Insights From the SEAT Pagine Gialle Dividend Cut Announcement

Many articles today in the international business press about the SEAT Pagine Gialle dividend cut announcement. Obviously, their stock has been badly hit by the news but I found three interesting insights about their future online strategy.

Reuters: “Seat will not pay a dividend this year because, it said, “in the current credit market environment, the company has adopted a financial policy devoting available financial resources to debt repayment and Internet development in Italy.”

Bloomberg: “Majocchi [Seat’s CEO] is focusing on Italy this year, a strategy shift after betting on expansion abroad to lift sales and earnings. Seat is also introducing new products such as Web-based directory services to attract clients.”

The Guardian: “Seat, which has focused on print directories and selling Internet ads as an additional product to its core products, aims to change and sell Internet ads as a stand-alone product.”

What it means: first insight, SEAT has decided it will be investing in its core market instead of internationally to expand revenues. Second, it will be investing heavily in their online products as this is where the growth is coming. Third, it will un-bundle print and online to try to maximize online revenues. With a difficult financial market and possible worldwide economic slowdown, I suspect that this emerging strategy will be replicated in many territories. Focus on core market, invest heavily in online opportunities (new products, new technology development, and acquisitions) and un-bundle the print and online will be key in the next couple of years.

SEAT Pagine Gialle’s 2008-2011 Business Plan


Seat Pagine Gialle SpA’s 2008-2011 business plan, due to be released on May 11, will include investments into the company’s internet activities and its international operations, chief executive Luca Majocchi said.

In an interview with Milano Finanza on Saturday, Majocchi said investments will be financed via the strong cash flow he expects from Seat PG’s activities in Italy, where also an ‘interesting’ sales growth is expected.

Majocchi said the re-engineering project at is UK unit Thomson will be brought ahead, and in Germany an internet business will be launched.

Turning to new markets, he said in that Turkey Seat is developing a joint venture with Dogan and in China it plans to reinforce its position.

In further comments, Majocchi said he expects a ‘strong growth’ of operating margin this year thanks to the absence of one-off costs for the launch of new products and organic growth in Italy.

What it means: I consider SEAT PG one of the most innovative directory publishers in the world (and they are very fun to work with!). Can’t wait to see what they have in store. Check out their 3D view of major cities in Italy (similar to what I blogged about on Monday) to get an idea of their innovations online. Click on the 3D button and select Roma to see Rome’s colosseum. Very cool!