One Customer at a Time

At the recent EADP congress in Rome, Peter Darpo, CEO of European Directories, provided the audience with detailed information about the recently created European Directories. The company covers seven markets and has annual revenues of around 620 million euros and EBITDA of approximately 225 million euros. It employs 4,000 people across seven countries and serves 700,000 customers. On average, 70 percent of its revenues come from print media and 30 percent from online. ("However, in Finland, over 70 percent of our revenues come from online directories and 30 percent from print products.")

In line with the subject of the conference, "Getting Personal," Mr. Darpo's presentation was titled "Getting Personal in an International Context." A key takeaway is European Directories' belief in the importance of evolving from a one-size-fits-all model to one that is trying to meet the specific needs of its users in different markets. "Our future depends on our ability to provide the user with the content or purchase information that they need, when they need it and where they need it." Recognizing the need to enhance the range and quality of the local information that is available, the company is using what it calls the "Chinese Army" approach. It has hired students to download e-mail addresses, keywords and URLs to send to its databases, thus enhancing the user experience and the customer sales pitch.

Mr. Darpo shared three charts that compared the largest European publishers by revenues, EBITDA and percentage profitability. Not surprisingly, the largest publishers in general had the largest absolute EBITDA. The correlation did not hold up when comparing absolute EBITDA with percentage profitability. For instance, the highest percentage EBITDA in Europe belongs to ED's own De Telefoongids with a whopping 51 percent margin. Not bad for the 12th-largest European publisher with the 11th-largest EBITDA. In contrast, the second-largest publisher, DeTeleMedien, generated the third-largest profit, but at 30 percent it was the 12th most profitable.

Obviously there are particular reasons for the profitability of publishers in specific markets. Nevertheless, the five smallest publishers, which also had the lowest amount of EBITDA, were in general far more profitable than their positions would indicate.

Like Yellow Pages Group in Canada, which we covered last Friday, they recognize that success in this business comes one customer at a time.