Speaking Sensis

 

This announcement was made as part of our Commitment to Climate Change, which details how we’ll play our part in combating climate change from by: managing our footprint, working with our suppliers, leading in product stewardship, supporting small business and connecting Australians.

Sensis CEO Bruce Akhurst said: “With this announcement, the millions of Australians who use our directories each week can be assured Sensis is committed to playing our part in combating climate change and working to reduce our carbon emissions.”

February was a busy month, which also saw the launch of the refreshed Sensis in the Community program, which was first introduced in 2006. Following the external review, the new program now includes 20 new Payroll Giving partners, which were selected as the top 20 charities Sensis employees donated to. When employees donate money to one of our partners, Sensis matches the donations dollar-for-dollar at the end of the financial year.

Other new features of the Sensis in the Community program include a more user-friendly volunteer leave process, national partnerships formed focusing on small businesses and conservation, and emergency relief partnerships with The Red Cross and The Salvation Army.

Our sustainability initiatives were recognised by our 2009/10 Corporate Responsibility Index (CRI) result, with Sensis achieving a 2009 CRI Gold band score of 92.51% recording a 13.07% improvement from our Bronze band score of 79.44% in 2008.

Looking forward
There are lots of exciting initiatives planned for 2011, including our transition to the Australian Government endorsed carbon neutral certification of our print and online directories. This will be obtained through the Australian Carbon Trust under the National Carbon Offset Standard. Other initiatives include introducing Forest Stewardship Council (FSC) certified paper stock for the paper used within the print directories as well as more sustainable packaging systems.

We’re also developing an Environmental Management System (EMS) compliant to International Standardisation Organisation (ISO) 140001, to help identify and manage negative impacts on the environment and subsequently improve our environmental performance.

We will also be releasing a Triple Bottom Line report, detailing the economic contribution, environmental impact and social value of the Yellow Pages and White Pages directories.

Assurance

The report has been independently assured by Environmental Resources Management Australia (ERM), which has been prepared to A+ standard, as defined in the Global Reporting Initiative (GRI) G3 application level. This is the second one of our Sustainability reports that has been independently assured by ERM using the AA1000 principles.

You can download the complete 2010 Sensis Sustainability Report from our corporate site. If you have any questions or feedback, email the Sensis Sustainability team.

Hi. I hope you all had a great Christmas break. It seems like such a long time ago now, but I really appreciated the chance to get away and recharge the batteries with my family. Of course, we’re all well and truly back in full swing now and, as always, there’s a lot happening.

December half year financial results
On 11 February, Sensis’ financials for the six months to December (1H10) were reported as part of Telstra’s results announcement. You may have already seen the headlines. When adjusted for the transfer of Trading Post to Telstra Media, the sale of Universal Publishers and the rising Australian dollar, earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 4.8% on flat (-0.1%) revenue.

This has been a challenging time for the advertising market. Our print directories revenue, for example, was earned at a time when the main media market (including online) declined by 8.5% and print advertising (including newspapers, magazines etc) declined by 12.5%ⁱ.

Sensis has delivered a good result in this uniquely challenged market. Underlying these results are two achievements I believe are worth highlighting. They say a lot about the progress Sensis has made in recent times:

• the growth of digital media and the evolution of our revenue mix; and
• the support we continue to receive from customers: the buyers and sellers who rely on our services.

Changing revenue mix: In recent years, we’ve broadened our horizons by expanding into both digital media and new markets, like China. In 1H07, 18% of revenue came from digital media. In 1H10 (just three years later) digital revenue has doubled to more than $300m and is now more than 30% of total revenue.

This is exciting progress. Our focus on diversity has dramatically improved the services we offer our customers and the underlying strength of our business for investors. As a result, Sensis today is the largest Australian-owned digital advertising business: a position further strengthened by our exciting investments in China, which now has the largest online audience in the worldⁱⁱ.

Continued strong support from our customers: A particularly pleasing aspect of this result is the enduring vote of confidence from our customers. Advertiser numbers remained largely intact despite the downturn. At the same time, advertiser satisfaction remained high. Advertisers gave the performance of our White Pages® and Yellow Pages® sales consultants a rating of more than 90% positiveⁱⁱⁱ, which is a tremendous ‘thumbs up’ for the work they’re doing. Finally, on the usage front, we continue to meet the needs of millions of potential buyers. The potential audience reach for Yellow Pages® advertisers grew to 11.5m unique users a month^iv, mobile usage grew by about 70%^v and MediaSmart online usage grew by 7.4%^vi.

Driving customer value with a commitment to innovation
Critical to achieving all of these objectives is our commitment to continually improve the quality of our services for both buyers and sellers. In just two months since my last update, we’ve been able to:

• launch Yellow Pages® enhanced business search in Whereis.com. Now, when you search on Whereis® for the address of a Yellow Pages® advertiser, you’ll see the business details of the advertiser pop up. A simpler experience for buyers and more potential returns for advertisers. In just one month, this new service has resulted in almost half a million new views of Yellow Pages® advertiser listings; and,
• launch the Yellow Pages® In the Car Book in a number of new markets following successful trials in Melbourne and Sydney. We’ve already seen ‘In the Car’ usage double year-on-year and there should be more growth to come as the books are distributed in these new markets;
• begin trials of a new ‘midi’ Yellow Pages® Book in Sydney. This smaller sized book is designed to be easier and more appealing for apartment owners living in high density areas;
• re-launch www.yellowadvertising.com.au – the Yellow Pages® advertiser site. This site gives advertisers ready access to the information they need to make the best advertising decision for them.

We’ve also seen positive activity in Location & Navigation. The Whereis® Navigator GPS service for mobile phones is growing rapidly and had a record month for subscriptions in December. There are also some early signs of a potential turnaround in the sat nav sector after a difficult 18 months or so.

And in MediaSmart, we’re working on phase 2 of our online targeting capability. When launched, advertisers will have the ability to target not just on the basis of user demographics but also online browsing behaviour (using purchase life cycle, life events and interest triggers across specific site categories, such as auto or small business). We’re also working to extend these capabilities to mobile. Ultimately, this will provide digital advertisers with the ability to deliver highly targeted cross platform advertising.

Behind the scenes, we’ve also switched Yellow Pages® over to the new iGen system. This is our largest ever technology innovation program and, after a few nervous weeks, the transition is now starting to show meaningful progress.

Its common knowledge major systems redevelopment projects are often difficult but, I must say, that’s pretty cold comfort when you’re going through one. While the program has been mostly successful, we are disappointed the upgrade didn’t go exactly to plan and we’re very conscious of the impact it has had in areas such as customer care levels.

Nevertheless, I’m pleased to say the biggest system challenges seem to be behind us and iGen is now stable and operating effectively. We have dedicated teams working through the backlog of change requests and service orders to bring us back to our usually high standards of customer service. And I’m also pleased to see our latest regional books – the first produced using iGen – are now being distributed.

Moving forward, we can look forward to delivering real customer benefits from iGen. These improvements will impact areas such as customer care, speed to market, search capabilities, product integration and content management – among many other capabilities.

Print and online directories certified carbon neutral
Recently, in a world’s first for a major directories company, we announced our print and online directories have been certified carbon neutral through the Australian Government’s Greenhouse Friendly™ program. We have committed to offset the carbon emissions of our directories through Greenhouse Friendly™ accredited providers and projects. At the same time, we have committed to reducing our operational greenhouse gas footprint by 5% year on year to 2012.

We also recently celebrated ten years of directory kerb-side recycling. This program has been an immense success. Recycling rates are up from 4% in 1999 to 96% recycled or re-used today. As a result, more than 175m directories have been recycled since 2000.
I’m incredibly proud of these achievements. Together, these two initiatives demonstrate not only our commitment to sustainability but our success in turning that commitment into positive action.

Federal Court copyright decision
Recently, a single judge (Justice Gordon) of the Federal Court found there was no copyright in the compilation of factual information in our White Pages® and Yellow Pages® print directories. ‘Factual information’ in this case refers to the names, numbers and addresses contained in the directories but, importantly, does not affect copyright in display ads. Not only is this outcome disappointing for Sensis and Telstra, it has far reaching implications for any business that invests in the development of compilations, such as customer lists, postcodes, TV guides, anthologies, racing information, and marketing lists.

We have been granted leave to appeal the Federal Court’s decision and are likely to do so. In the meantime, there is a critical assurance I want to make – particularly to our customers: our success as a business is not solely reliant on copyright protection.

For more than a decade now, Sensis has been operating in a competitive market in both print and online. In print, competitors have been copying our data for years in certain markets. And, in online, we’ve been operating in the same market as some of the world’s largest online businesses for the same period of time.

Despite this competition and the negative comments you occasionally read in the media, our business and, most importantly, the value we offer both buyers and sellers are stronger than ever.

It’s business as usual as far as we’re concerned. Continuing to build the returns for our customers, investors and the community is what matters.

All the best,

Bruce Akhurst

ⁱ CEASA, Main Media Report. June 2009. Note: 1H10 print directories results backdated six months to align sales cycles with the rest of the media market.
ⁱⁱ Clickz.com Web Worldwide http://www.clickz.com/stats/web_worldwide
ⁱⁱⁱ TNS, Sensis KPI Report, December 2009. Average monthly satisfaction score – July 2009 to December 2009
^iv Roy Morgan, Single Source Australia. September quarter 2009. Base: Australians14+
^v Omniture, December quarter 2009 compared to 2008
^vi Roy Morgan, Single Source Australia. September quarter 2009. Base: Australians14+

You may have heard of TrueLocal. In their words, they are an online business directory. As such, they compete directly with Yellow Pages® for the advertising dollar of local businesses.

So it’s not surprising to see them attack the value of the Yellow Pages® Book, which is used by millions of Australian buyers and sellers, in order to hopefully pick up some extra business for themselves.

For a business that has been in the market for a number of years now and has had limited success (Roy Morgan shows truelocal.com.au had an average of 249,000 users a month in the year Oct 08 – Sep 09, compared to 2.5 million a month for yellowpages.com.au),  it’s not surprising to see TrueLocal go on the offensive. They did it in June 2009 with a dedicated website and direct marketing campaign, they’re doing it now and we expect they’ll do it again.

But what is surprising, is that for a business whose parent is News Ltd, and synonymous with print publications, they make claims such as:

Gone are the days when these delivered directories were the only way to find a plumber, accountant or doctor. Some people still use them, absolutely. And they’re important for those who don’t have internet access. But [Clover] Moore is right in saying that today most Australians find businesses online – in fact 91.4 per cent do, according to a survey done by TrueLocal in conjunction with Coredata last year.

If you’ve looked at one of News Ltd’s 108 free, weekly, advertiser funded local newspapers recently, you might have noticed the classified ad section – where people might look for a plumber, accountant or doctor – is brought to you by TrueLocal.

And these 108 local newspapers are distributed to Australian homes each week– with no known way for people to be able to opt-out.

But what’s even more surprising, is that in the Victorian regional centres of Ballarat, Geelong and Colac, News Ltd and TrueLocal believe print directories are a valuable resource for the local community. So much so that they produce their own and deliver them to homes and businesses.

It seems TrueLocal will tell people anything to get one up on Yellow Pages® and further their own interests.

At Yellow Pages®, we use independent and credible research to demonstrate the value we deliver. You could say this is talking to our strengths or letting our results speak for themselves, rather than focusing on what our competitors are doing.

But sometimes you’ve just got to call a spade a spade and make sure the truth does get in the way of what some might consider a good story.

Yellow Pages® facts

Usage – the Yellow Pages® network (Book, Online and Mobile directories) is searched 13 million times by 4.5 million Australians each week. This includes 8.5 million searches in Yellow Pages® Books ⁱ.  We also give people the choice to request not to receive a book by calling us on 1800 008 292.

Carbon neutral –Yellow Pages® and White Pages® print and online directories have been certified carbon neutral through the Australian Government’s Greenhouse Friendly™ program. The carbon emissions created through the production of our directory products will be offset through Greenhouse Friendly™ accredited providers and projects in Australia.

Recycling – 96% of directories were recycled (75%) and re-used (21%) last yearⁱⁱ.

ⁱ Roy Morgan Single Source Australia, 14 years and above, last 7 day average, July 2008–June 2009.

ⁱⁱ DBM Consulting, Sensis 2008/2009 Recycling Measurement Program, June 2009].

Today is an exciting day for me. Actually, it is an exciting day for Sensis. Today we announce that our Yellow Pages® and White Pages® print and online directories are certified carbon neutral through the Australian Government’s Greenhouse Friendly™ program.

We have achieved this by offsetting the carbon emissions of our directories through Greenhouse Friendly™ accredited providers and projects in Australia. I am working for the first major directories company in the world to have its print and online directories certified carbon neutral, which makes me feel pretty good. Our carbon neutrality announcement wasn’t referring to our businesses operational carbon footprint (fleet, facilities and flights) – we’re taking responsibility for the full ‘cradle to grave’ impacts of the print and online directories. That’s the production, use, disposal and distribution of the directories. We’re talking around 175,000 tonnes of carbon emissions.

We know how many tonnes we’re taking responsibility for because we”ve commissioned environmental professional services company URS Australia to undertake a full life cycle assessment on the directories. In addition to offsetting the carbon emissions through Greenhouse Friendly™ accredited providers and projects in Australia, we are also announcing our target to reduce our operational carbon emissions by five per cent year-on-year. This means we’re working with people across the entire Sensis business to embed an understanding of what sustainability is and how they can reduce emissions in their areas of the business.

It’s great to be working for a company that is committed to taking a leadership role in corporate sustainability. Read more about this exciting news here: http://about.sensis.com.au/Sustainability/Environment/Our-Commitment-to-Climate-Change