“A first-class and much-needed product, extremely well brought together and full of useful information.”
(Veronis Suhler Stevenson)

“The summaries and strategic analysis are very good and the introduction was very succinct and strategic. Other reports don’t provide this type of in-depth information.”
(PagesJaunes)

Following the success of AMR’s 2003 and 2005 European telephone directory market reports, the third edition was published in April 2007. This remains the leading strategic analysis of a sector that continues to face significant change, driven by M&A activity and technology.

With significant activity in 2005 and 2006, the transformation of the European directory market continues into 2007. As AMR predicted in its 2005 report, the consolidation of the sector has begun in earnest. September 2005 saw the acquisition of Findexa, the Norwegian incumbent, by Sweden’s Eniro, creating a pan-Nordic directory and search giant. This was followed in April 2006 by Yell’s first major European acquisition of the Spanish incumbent, TPI. Driven by buoyant debt markets, and the scarcity of assets equalling the quality of directory businesses, acquisition multiples are on the increase. Yell’s acquisition of TPI valued the Spanish business at 15 x EBITDA, a record amongst recent transactions. Two years ago, we wrote that “Yell, Seat PG, Wanadoo and Eniro have been conspicuous by their absence from the latest round of M&A activity.” This has clearly changed. However, private equity activity continues, most notably the €3.3bn investment in PagesJaunes by US buyout firm, KKR. At the same time the revenue shift continues with slowdown in print revenues: print declined in 13 of the 19 countries covered in AMR’s report.

So what does this all mean?
What is driving this consolidation? Is it empire-building, new competition, healthy balance sheets, or decelerating growth in core markets? The answer is probably all of these. But there is also a more persuasive, if subtler, rationale: namely, best practice. An emerging group of directory publishers are leading the industry in terms of their internet development, sales approach, and in driving print and online innovation. Their performance is better than average. Analysis of World Directories, Eniro and Findexa, European Directories, and Yell and TPI clearly demonstrates that applying best practice across businesses can improve performance. AMR’s report explores the extent to which the implementation of best practice can be realised.

Google: friend or foe?
Over the last two years the directory publishing industry has seen a divergence of views on the best approach to search engines: should they be embraced or ignored? Which is the most productive approach: competition, co-operation, or co-opetition? As yet the answer is unclear. Yell in the UK distributes its listings via Google, as does Seat in Italy. Thomson in the UK has begun to sell ‘click’ packages for a range of search engines, including Google. PagesJaunes in France has so far steered clear of search engine partnerships of any kind, as has Eniro in Sweden. AMR will explore which is the best model for publishers. Does partnering with search engines risk disintermediation as search engines develop a local offering on the back of directory publishers’ databases?

An indispensable guide
With the current high level of private equity ownership in the directory market, there is likely to be further change and M&A activity in the European telephone directory market. Financial owners will exit their directory assets and industry consolidation will increase. AMR’s report remains an indispensable, authoritative, and strategic guide to the market and its future prospects.