SOLOCAL_Registration Document_2017

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FINANCIAL STATEMENTS 6.2 Annual financial statements for the financial years ended 31 December 2016 and 2017

MANAGEMENT REPORT ON THE ANNUAL FINANCIAL STATEMENTS 6.2.4 FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

Ladies and Gentlemen, We have called you to this General Shareholders’ Meeting, pursuant to French law and our Company’s Articles of Association, to report on the Company’s business activity during the financial year from 1 January 2017 to 31 December 2017 and to submit the Company annual and consolidated financial statements for your approval. For the record, in 2016, following the talks carried out under the aegis of Maître Abitbol and then Maître Bourbouloux, SoLocal Group presented an initial financial restructuring plan aiming to reduce its debt by two thirds. The terms of this initial draft amendment to the accelerated financial safeguard plan, implemented in accordance with the ruling of the Nanterre Commercial Court of 9 May 2014, had been approved by the Creditors’ Committee meeting of 12 October 2016 but were then rejected by the Company’s shareholders at the General Shareholders’ Meeting of 19 October 2016. A second draft amendment to the accelerated financial safeguard plan was therefore prepared, and was unanimously approved by the Board of Directors of the Company, by the Creditors’ Committee meeting of 30 November 2016, by the General Shareholders’ Meeting of 15 December 2016, on the first notice of meeting, and was finalised by a ruling given by the Nanterre Commercial Court on 22 December 2016. In 2017, SoLocal Group continued its financial restructuring, notably by strengthening its equity. This financial restructuring has comprised the following operations: a reduction of the share capital; l a capital increase with rights issue for shareholders; l free share allotments; l a capital increase without rights issue for shareholders in favour l of creditors holding debt instruments against the Company; a potential issue of subordinated bonds convertible into shares l (or cash, whatever the Company prefers). On 14 March 2017, SoLocal Group announced the finalisation of its financial restructuring plan resulting in an increase of €761.73 million in the Company’s equity. This strengthening of its equity has enabled SoLocal Group to reduce its gross debt by two thirds, from €1.158 billion to €398 million. SoLocal Group intends to refinance these new bonds as soon as market conditions permit, always maintaining a penalty-free early repayment option. HIGHLIGHTS OF THE FINANCIAL YEAR I.

On the SoLocal Group shareholdings portfolio, the 2017 financial year was characterised by the disposal of its shares in the subsidiary Chronoresto, the creation of GIE SoLocal and the acquisition of an 11% equity stake in Alliance Gravity.

SOLOCAL GROUP BUSINESS

II.

ACTIVITY, KEY FINANCIAL FIGURES AND PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The Company SoLocal Group is a holding company and, as such, has subsidiaries whose mission is to “reveal local know-how everywhere and boost local revenues of businesses”. The Group offers its customers digital services and solutions to increase their visibility and local contacts and creates and updates the best personalised professional local content for users. The Group’s activities can be broken down into two segments: the “Internet” segment and the “Print & Voice” segment. Operating income The SoLocal Group company posted revenues of €23.1 million in 2017, compared with €23.5 million in 2016. These revenues were mainly generated from the invoicing of real estate services to all subsidiaries. Operating expenses Personnel expenses totalled €1.1 million in 2017, compared with €11.8 million in 2016, with an average workforce of 2 in 2017, compared with 38 in 2016. This change reflects the transfer on 1 January 2017 of SoLocal Group employees to GIE SoLocal, with the exception of the corporate officer. Other operating expenses increased from €39.5 million in 2016 to €44.3 million in 2017. This increase of €4.8 million was primarily due to: the full-year effect of rents and rental charges of the Citylights l premises located in Boulogne-Billancourt (occupied with effect from May 2016) in the amount of €17.3 million, compared with €11.0 million in 2016 (i.e. an impact of €6.3 million); a re-invoicing of the GIE SoLocal contribution of €1.8 million, l which had no equivalent in 2016; the lump-sum retirement payments of SoLocal Group employees l transferred to GIE SoLocal on 1 January 2017 for €1.6 million, with the reversal of an equivalent provision under operating income; a €7.0 million reduction in debt refinancing costs (from l €17.7 million in 2016 to €10.7 million in 2017). The SoLocal Group company posted an operating loss of €20.7 million in 2017, having posted a loss of €27.3 million in 2016.

204 2017 Registration Document SOLOCAL