The Nordics search and directory company Eniro has suffered a series of increasingly embarrassing developments in recent weeks. It began back in July with a “disappointing” second quarter earnings result, which led to a management shake-up. In mid-August the company announced that it has reached a “mutual decision” to part ways with CEO Johan Lindgren, replacing him on an interim basis with Stefan Kercza, who was acting head of Eniro.se and president of Eniro Denmark.

The bomb arrived late last week when the company announced that it had discovered “accounting inaccuracies” that required it to scale back profit forecasts, leading to a huge sell off that wiped out about a third of the company’s market value. Eniro said it was considering inviting an investigation by Swedish authorities.

Further, according to news reports, the company’s chairman Lars Johan Jarnheimer amended Eniro’s earlier statement that Lindgren’s departure was “mutual” saying the former CEO was in fact dismissed.  The company also announced Lindgren’s severance package was being cancelled.

The original announcement of Lindgren’s departure said simply that the company needed to move from an emphasis on cost cutting and debt reduction to a focus on growth, a role for which Kercza was deemed more suited.

Lindgren’s tenure was just shy of four years. He was named Eniro’s CEO back in September 2010, replacing Jesper Kärrbrink. At the time, Eniro’s board felt Kärrbrink, who had served since May 2008, lacked the credibility with the financial markets Eniro needed as it faced debt issues and other financial challenges. Lindgren was seen as a seasoned financial manager. His previous position was CEO of Telenor Svierge AB, with prior experience as a public company CFO.

Here is what then Eniro Chairman Lars Berg said at the time of Lindgren’s appointment.

“Our strategy remains unchanged, we are determined to continue developing our opportunities, with particular emphasis on online. Jesper Kärrbrink has played a vital role in initializing this process and we are grateful for his contributions during the two years he has been CEO. However, in light of these new financial challenges, the Board of Directors believe it is necessary to appoint a new CEO with relevant experience to implement the strategy. We are confident that Johan Lindgren possesses the skills and experience to lead Eniro through the next step in the transformation.”

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The Swedish search company Eniro has replaced the management of its Swedish online property following a “disappointing” second quarter, in the words of CEO Johan Lindgren, who addressed the issue head on during today’s earnings call. The biggest outcome of the weak quarter was to shave about SEK100 million off of Eniro’s full year 2014 EBITDA guidance.

The culprit in the weaker than expected sales performance is Eniro’s Swedish online property, Eniro.se. Eniro’s other digital products in Sweden, which it calls “campaign” products, fared better, as did the full digital products portfolio across its other markets, Denmark, Norway and Poland.

Eniro, once predominately a print publisher, is now primarily a digital business, with mobile being an increasingly important piece of search traffic and revenue. Eniro has discontinued Yellow Pages in its biggest markets (Sweden, Norway and Denmark), though it continues to publish local directories. Eniro also has operations in Poland.

For the group, organic revenue declined  by 10 percent organically in the second quarter. Digital or “multiscreen” revenue fell by 5 percent organically in Q2. “We need that to be positive in order to compensate for declines in print and voice,” Lindgren said.

Lindgren was very direct and blamed the weak Q2 performance on poor management, and hence poor sales execution, as well as Eniro’s decision to move some existing contracts from the first into the second quarter. The latter, according to Lindgren, “proved to be a strategic mistake, because we had too much volume in the second quarter.” The result was that the sales organization had to scramble to cover all of its renewals, which undermined the quality of sales interactions as well as crowding out new sales.

Lindgren announced the following measures to address the weak performance. First, he replaced the management of Eniro.se, bringing in Eniro Denmark CEO Stefan Kercza to take control of Eniro.se. Mattias Wedar, will run all other operations within Sweden. This is reminiscent of last year, When sales performance in Noway was weak, Lindgren acted swiftly to change management in that market, bringing in Pierre Martensson to run Norway, which has since returned to growth.

Lindgren also announced some changes to the sales organization in Sweden to address the weak performance. When sales resume August 4 (following Sweden’s summer holiday season), Eniro will experiment with packaging its search and campaign products for higher spend customers, will do more segmentation to match products with customers more effectively and will emphasize new customer acquisition, among other changes.

For the first half of 2014, Eniro produced total revenues of SEK 1.58 billion, an 11 percent decline. Mobile remains the bright spot, growing 73 percent to SEK 202 million, or about 13 percent of total revenue.

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The Swedish search company Eniro has replaced the management of its Swedish online property following a “disappointing” second quarter, in the words of CEO Johan Lindgren, who addressed the issue head on during today’s earnings call. The biggest outcome of the weak quarter was to shave about SEK100 million off of Eniro’s full year 2014 EBITDA guidance.

The culprit in the weaker than expected sales performance is Eniro’s Swedish online property, Eniro.se. Eniro’s other digital products in Sweden, which it calls “campaign” products, fared better, as did the full digital products portfolio across its other markets, Denmark, Norway and Poland.

Eniro, once predominately a print publisher, is now primarily a digital business, with mobile being an increasingly important piece of search traffic and revenue. Eniro has discontinued Yellow Pages in its biggest markets (Sweden, Norway and Denmark), though it continues to publish local directories. Eniro also has operations in Poland.

For the group, organic revenue declined  by 10 percent organically in the second quarter. Digital or “multiscreen” revenue fell by 5 percent organically in Q2. “We need that to be positive in order to compensate for declines in print and voice,” Lindgren said.

Lindgren was very direct and blamed the weak Q2 performance on poor management, and hence poor sales execution, as well as Eniro’s decision to move some existing contracts from the first into the second quarter. The latter, according to Lindgren, “proved to be a strategic mistake, because we had too much volume in the second quarter.” The result was that the sales organization had to scramble to cover all of its renewals, which undermined the quality of sales interactions as well as crowding out new sales.

Lindgren announced the following measures to address the weak performance. First, he replaced the management of Eniro.se, bringing in Eniro Denmark CEO Stefan Kercza to take control of Eniro.se. Mattias Wedar, will run all other operations within Sweden. This is reminiscent of last year, When sales performance in Noway was weak, Lindgren acted swiftly to change management in that market, bringing in Pierre Martensson to run Norway, which has since returned to growth.

Lindgren also announced some changes to the sales organization in Sweden to address the weak performance. When sales resume August 4 (following Sweden’s summer holiday season), Eniro will experiment with packaging its search and campaign products for higher spend customers, will do more segmentation to match products with customers more effectively and will emphasize new customer acquisition, among other changes.

For the first half of 2014, Eniro produced total revenues of SEK 1.58 billion, an 11 percent decline. Mobile remains the bright spot, growing 73 percent to SEK 202 million, or about 13 percent of total revenue.

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The Nordics search and directory company Eniro needs to grow its digital revenue by roughly 5 percent to 6 percent in order to bring its entire business back to growth. Not a bad position for a company that not so many years ago was known primarily for publishing print Yellow Pages in some of the world’s most digitally advanced markets.

Today, Eniro’s CEO Johan Lindgren describes the company as, “An aggregator that organizes, filters and presents local information. We are in the same part of the market as Google, except that Google does global search, and we do local search.”

On last week’s 2013 earnings call, Eniro executives noted that the decision, announced last year, to stop producing printed Yellow Pages directories in 2014 helps explain why the company is poised for a return to growth. In 2013, print revenues declined by 29 percent, and represented 14 percent of total revenue.

Once regional Yellow Pages books stop printing, the company will be left with its much healthier hyperlocal directories business, which generated revenues of SEK333 million (US$51 million) in 2013, about 9 percent of Eniro’s group revenue. Regional Yellow Pages revenues totaled SEK174 million (US$27 milion) in 2013. The regional Yellow Pages business, once the crown jewel, was on the verge of becoming a rounding error for Eniro.

“I don’t think we will see the same kind of decline in print as in 2013 because these hyperlocal books have a better usage,” Lindgren said. “We will see a slight decline, bot not as dramatic as big, regional books.”

Lindgren said early indications are sales are going more smoothly in the post-PYP environment.

“The perception of the company is better [post PYP], and it makes sales calls more simple,” he said. “It is easier to sell the digital portfolio without having to explain the presence of print.” The hyperlocal books are sold by a separate sales force.

Eniro is not quite where it needs to be on the digital side. In 2013, digital revenues (mobile and desktop) grew by 2 percent organically, improving to 4 percent in  the fourth quarter. One reason for the lagging digital revenues was a sub-par revenue performance in Norway, which Lindgren says was addressed through a management change last year. The CEO said on Eniro’s Q3 earnings call that digital would begin to pick up in Q4 and that’s exactly what happened.

Lindgren is also encouraged by Eniro’s strong digital traffic growth, which is directly tied to monetization. In 2013, “unique browsers per week” grew by 10 percent companywide. The company has 8 million weekly uniques across all of its digital properties and markets. Eniro currently has online properties in Sweden, Norway, Denmark and Poland.

The entire Eniro business, which includes directory assistance and print directory revenues, declined by 8 percent, though adjusted for currency effects and publication changes, the fall was a more modest 5 percent. The company ended the year with total revenue of SEK3.7 billion (US$564 million) and EBITDA of SEK956 million (US$147 million). 

Mobile is central to Eniro’s digital growth prospects. The company grew mobile revenue by 95 percent in 2013, to SEK287 million (US$44 million), and expect to more than double mobile revenue to SEK600 million (US$92 million) this year, Eniro projects mobile to reach SEK900 million (US$139 million) by 2015. Currently, 34 percent of searches on Eniro properties come in via mobile devices.

Eniro plans to expand its product set, adding new offerings during 1H 2014 in navigation, video, social media and e-commerce.

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Here are some quick highlights from the two earnings calls.

Yellow Media

Canada’s Yellow Media generated total revenue of C$1.1 billion in 2012, down 16.6 percent from C$1.3 billion in 2011. Excluding sold assets and discontinued directories (leftover from its Canpages acquisition), the real decline was 11.9 percent. Print revenues dropped 24.6 percent to C$740 million. Online grew 6.1 percent to C$367 million. The adjusted growth rates for print and online were (21.2 percent) and 15.7 percent respectively.

Online now accounts for 38 percent of Yellow Media’s total revenue, up from 29 percent in 2011.

Mobile was a strong area for YPG in 2012, with the company claiming 25,000 mobile advertisers and nearly 50,000 mobile ad units.

New customer acquisition is one area of concern for Yellow Media. In 2012, the company acquired 17,000 new customers, compared with 23,000 new advertisers in 2011. YPG ended 2012 with 309,000 advertisers and an 86 percent retention rate.

Large advertisers account for much of YPG’s lost revenue. The company launched initiatives in 2012 to stem losses among its biggest customers, including the Digital Power Play (optimizes digital presence to maximize lead generation) and the High Priority Accounts initiative, which provides advertising solutions tailored to specific advertisers based on detailed customer profiles.

Finally, the company earned itself some breathing room on its debt with a recapitalization completed late last year. The recap reduced Yellow Media’s total debt as well as extended maturities.

Eniro

On today’s 2012 earnings call, Eniro CEO Johan Lindgren declared that the Swedish search and directory company has completed its print to digital transformation. That doesn’t mean Eniro lacks significant challenges, most notably insufficient digital growth.

“The transformation is done in the sense that we now see a stable long tail in print and voice. Print is down but it is a profitable business,” Lindgren said. “We will have print in our portfolio even for the longer term. But it is now at such a level that it can no longer jeopardize the total earnings of Eniro.”

Eniro had total revenues of SEK4 billion in 2012 (about $615 million) excluding its voice business. Eniro finished the year with 77 percent of its advertising revenues coming from digital sources.

Online growth was 6 percent for the year, but on a comparable basis, the rate was just 2 percent. Lindgren acknowledged that mobile, which grew 116 percent, helped bring digital revenue into the black. The company has set a target of at least 6 percent real growth in 2013.

“We need to grow both (online and mobile) to reach the 6 percent target,” Lindgren said.

Mobile ad revenue totaled 150 million SEK (US$23 million) in 2012, which represents about 7 percent of online directory revenue. Mobile is expected to double in 2013. Mobile also accounts for about 25 percent of Eniro’s online directory usage.

Update: The Australia directory publisher Sensis also announced its half year results this week. Sensis, which is a unit of the Australian telecom Testra, operates on a financial year ending June 30.  The results show an increasingly difficult environment for print in Australia.

For the six months ending December 31, Sensis generated A$479 million in revenue, which is a 12.6 percent decline over the previous 1H. Print revenue declined by 27.9 percent, partly due to the rescheduling of the Brisbane directory from 1H to 2H. Digital revenue was up 11 percent to A$201 million. Other revenue was down 12.6 percent to A$76 million.

Adjusting for schedule shifts, White Pages (print and online) was down 8 percent and Yellow (print and online) was down 22 percent.

Because Sensis books revenue at publication, its financial first half is less meaningful than the second half, when most of its biggest directories hit the street. Sensis generates two-thirds if its revenue and 80 percent of its EBITDA in the second half of the financial year.

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On Thursday’s Q4 and full-year 2011 earnings call, Eniro announced that it will phase out its print Gula Sider (Yellow Pages) directory in Norway, leaving only local directories as a print product choice in the Nordic country with a population of 4 million.

The move is yet another sign that the core Yellow Pages directory is nearing the end of its natural life in some of Europe’s more densely populated and digitally advanced markets. In December, European Directories shuttered the print operations of its Gule Sider (Yellow Pages) operation in Denmark and sold its online assets to Eniro.

This move shouldn’t come as a huge surprise given the rapid migration of directory revenues from print to digital, particularly in large markets like Stockholm, Oslo and Copenhagen, where declines in usage and revenues have been steep in recent years.

BIA/Kelsey forecasts that print will account for just 40 percent of Nordic revenues in 2011, and barely 20 percent in 2015.

Eniro will continue to publish its local directories product in Norway, called Ditt Distrikt, in 74 smaller communities around Norway. There was no word given on the fate of the Gula Sidorna (Yellow Pages) directory in Sweden, Eniro’s largest market.

For the full year 2011, Eniro reported group revenues of SEK4.3 billlion, a decline of nearly 19 percent, though the organic decline was a more manageable 11 percent. Adjusted EBITDA was SEK1.1 billion.

Poland, once one of Eniro’s more stable markets, experienced a dramatic 44 percent revenue decline in 2011. Another troubling sign for Eniro was very modest 1 percent organic-only growth in its core Scandinavian markets. However, the company is maintaining its guidance to return to growth in 2012.

BIA/Kelsey will have a more complete rundown of full-year 2011 results in an upcoming Advisory.

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The Sweden-based local search company Eniro has acquired some of the assets of De Gule Sider in Denmark, the Yellow Pages operation closed down recently by European Directories.

EDSA has made the decision to discontinue print directories in Denmark, where it held the incumbent position, while selling many of its online/mobile assets to Eniro. Among the properties Eniro has acquired include the dgs.dk domain, as well as trademarks, intellectual property, IT and customer lists. Eniro emerges as the leading online and local directory player in Denmark.

EDSA’s decision to shut down an incumbent print operation might have once been shocking, but in the Nordic markets in particular, the shift from print to digital has been under way for some time. Before the decision was made to shut down the Danish print operation, BIA/Kelsey estimated that 2012 directory revenues in the Nordic markets would be 67 percent digital.

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Two companies investing in self-service advertising for SMBs agree that self-service is an important and growing category, but isn’t likely to replace direct sales.

This morning’s panel at DMS ’11, “SMBs and Self-Serve: Ready for Prime Time?” featured Paul Levine, COO of the real estate site Trulia, and Ørjan Hanssen, a product manager at the Swedish directory and search company Eniro.

Also, a service component is critical to transitioning small-business advertisers from full-service to self-service.

Speaking first, Levine tried to debunk some myths he sees about online advertising and self-serve, and offered some tips for successful execution.

Myth No. 1: Online Is an Add-On. Levine pointed out that newspaper print classified revenues have plummeted over the past five years, with the main categories of real estate, autos and jobs having more digital revenues than print.

Myth  No. 2: Online Can’t Deliver Foot Traffic. Levine had a two-word response to this: ask Groupon. Online can also drive phone calls.

Myth No. 3: Creating Content Is a Hassle. Levine talked about new tools making this easier than ever. Example? Food cart culture in San Francisco, where vendors use Twitter as their sole marketing platform.

Next Levine offered three tips for selling online in a self-serve environment.

Trulia has kept the freemium funnel filled, with reviews, free webinars and so on. It drives to a ratio of 10 free engagements for every one that is paid.

Tip No. 2: Peer Pressure Is Powerful. Ego plays a big role in SMB decisionmaking, so it makes sense to exploit it. “Realtors are all about their personal brand, so we make sure they understand what their peers are doing.”

Tip No. 3: Cross Over and Back. It’s a mistake to treat self-serve as a discreet channel. Trulia has both self-serve and direct sales, and the two should be integrated. When a customer comes into Trulia via self-serve, a salesperson is assigned to make contact to retain and upsell the customer.

Eniro‘s Hanssen talked about the Scandinavia Ad Networks product, built with the help of systems software vendor Amdocs.

Hanssen said Eniro’s key insight was that if it is going to compete with 100 percent self-service business models, it needed to differentiate itself with a strong service component.

“We had the opportunity to use service as leverage to help SMBs take a step toward self-serve,” Hanssen said. “There is a need for a solution that supports them on the journey from full-serve to self-serve.”

Some of the methods Eniro has used to help SMBs down the path to self-serve include using detailed performance reporting as well as live customer support. The reporting is designed to promote engagement by the advertiser with the self-service platform.

During the questions and answers session, Levine said he doesn’t see self-service as a replacement for live salespeople. “You will find few examples of services that are 100 percent self-service to SMBs.”

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The Scandinavian directory and local search player Eniro has unveiled a pay-per-click advertising network, which it calls Scandinavian Ad Networks. The product leverages traffic from Eniro’s own properties (including eniro.se, gulesider.no, krak.dk, and kvasir.no) as well as third-party partner sites to feed the network.

This launch is part of Eniro’s strategy of becoming a dominant player in digital advertising in Scandinavia. Eniro once had pan-European ambitions, but now is focused largely on three markets — Sweden, Norway and Denmark — where it hopes to solidify its place as the leading homegrown player in local search and online advertising. Eniro has largely divested its operation in Finland, though it maintains a voice (DA) business there.

A key partner in this effort is Amdocs, which provides the platform for Eniro to offer a pay-per-click advertising that is competitive with Google AdWords.

The new ad network is part of a clear effort by Eniro to be the dominant player in online advertising in the Nordic markets. From the press release:

The advertising platform is based on an open and user friendly interface where advertisers, either with the help of Eniro’s editors or by themselves, can design and publish pay-per-click advertisements in local search results and on branch-specific websites. The new platform can also be integrated smoothly into existing media agency systems for increased efficiency.

The pay-per-click market is growing rapidly and we will be a clear and relevant alternative. We have grown in the market are during 2010 and are planning for a continued growth rate, says Mathias Hedlund, Eniro’s SVP for group products and services.

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The Nordics directory publisher Eniro seems to have a success on its hands with its new “search and purchase” directory, launched Sept. 29. The company announced today that since that product was launched, the number of searches for “points of sale and companies” on Eniro.se has increased by 40 percent.

In addition, the company’s stock price spiked today, closing at SEK 7.75, up more than 33 percent from yesterday’s close. It is unclear whether the spike is related to the successful online directory launch, but Eniro did announce the traffic figures this morning.

The new site is the outcome of a strategy focused on building a much more robust content database, and then monetizing that data through a variety of channels. The strategy was developed by former CEO Jesper Karrbrink, who was recently let go and replaced by former Telenor CEO Johan Lindgren, who the Eniro board felt had a stronger financial background.

You can learn more about the new directory here.

UPDATE Oct. 6, 2010: The Nasdaq OMX Stockholm exchange halted trading on Eniro shares today due to rumors of an offer being made on the company, which explains yesterday’s surge in Eniro’s share price. The company released a statement today regarding the trading halt. Eniro is currently in negotiations with its banks to modify the terms of its debt.

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