SOLOCAL_Registration Document_2017

FINANCIAL STATEMENTS 6.1 Consolidated financial statements for the years ended 31 December 2016 and 2017

The results of this study are that the Group considers that implementing IFRS 9 does not call into question the financial balance.

Recognition of Revenue per SoLocal Group (SLG) product range “Sites” range: Currently the revenue for sites is recorded in the following way: the designing and producing of sites are subject to an 1. assessment according to the costs incurred and are recognised at the delivery of the sites for about 38% of the total sales price; the putting online and updates are accounted for the residual 2. amount of the sales price on a time pro rata basis over the duration of the contract. In application of IFRS 15, two separate performance obligations are retained for the sites offer: designing of the intellectual content over the duration of 1. realisation (between 30 days and 90 days according to the products); making available and updating the site during the contractual 2. hosting period Applying IFRS15 generates an allocation that is different in value between the first obligation and the second, resulting in a modification in the rate of recognising the revenue. A greater portion of the revenue is spread out over the duration of the publication. “Search and Digital Marketing (excluding Sites)” range: The main offers are currently recorded, in reference to practices in the sector, by distinguishing: technical costs for designing and realisation between 20% and 1. 50% of the price of the offer, taken into account at the beginning of the contract; an online publishing service recognised on a time pro rata basis 2. over the contractual duration. Applying IFRS 15 will result in recognising all these offers in a linear manner over the duration of the contracts. Taking revenue into account will as such be delayed with respect to the current methods. “Print Voice” range: Revenue from the “Print and Voice” range is currently recorded in the following way: Revenues from the sale of advertizing space in printed directories are recognised at the time of publication of these printed directories. Technical costs for the manufacturing of the directories are currently the object of separate billing to the advertizers which is recognised at the beginning of the contract. The revenue generated by the traffic relating to the telephone enquiry services 118 008 is recognised as the calls are made based on the gross revenue billed to the user. The advertizer revenue is spread out over the duration of the publication, which is generally 12 months. Applying IFRS 15 leads to no longer distinguishing the technical costs. Insertions into the directories will now represent a single performance obligation for which the revenue will be recognised in full in the month the directory is distributed. Applying IFRS 15 has no impact on the other offers in this range.

IFRS 15 “Revenue from Contracts with Customers”

Introduction to the standard and methodology followed In May 2014, standard IFRS 15, “Revenue from Contracts with Customers”, was published by the IASB and ratified by the European Union. It became mandatory in France for all financial periods opened starting on 1 January 2018. IFRS 15 sets out a single model that companies must use to account for the revenue from contracts with customers. It replaces the current standards of the IASB on the recognition of revenue, in particular IAS 18, “Revenue”. According to the basic principle of IFRS 15, the accounting for revenue must reflect the transfer of the control of the goods and services promised to the customer for an amount which represents what the entity expects to receive in exchange for these goods and services. The new standard also includes recommendations on accounting for contract costs. A project was set up during the year 2017. It consisted in analysing the main offers of the Group and the contracts that materialise them, in preparing the technical notes for each one of the offers and in assessing the potential impact of the foreseeable changes. The approach and the technical analyses were presented to the Audit Committee. SoLocal has opted for the full retrospective method for the application of IFRS 15 on 1 January 2018. The main impacts of the new standard per category of commercial offering are described hereinafter. Choice of the accounting policies retained: The offers of SoLocal Group are grouped into 3 major families: sites which are developed to be made available to customers for 1. a contractual period of 12 or 24 months; the Search local products around the presence on internet via 2. the internet Business Card and its complements intended to improve the visibility or the audience or to allow for transactional possibilities, typically offered over a period of 12 months which can be renewed and the digital marketing offers which correspond to one-off services or campaigns; the Print and Voice offer, which for the most part corresponds to 3. inserts in paper directories for annual publication.

1

2

3

4

5

6

7

8

153

2017 Registration Document SOLOCAL