ANNuAl REPORt 2 0 0 8

Enir o Annual Report 20 08

Reading instructions

Eniro is a Swedish corporation that is subject to Swedish law. All values are expressed in Swedish kronor. Millions of kronor are abbreviated as SEK M. The numbers in pa- rentheses refer to 2007 unless otherwise indicated. Data about markets and the competitive situation are Eniro’s own assessments, unless a specific source is indicated.

ANNuAl REPORt 2 0 0 8

Contents

2008 in brief 1

Jesper Kärrbrink, CEO 2

Market and Trends 7

Online 10

Offline Media 14

Voice 18

Geographic presence 22

Eniro’s responsibility 31

Corporate governance report 2008 39

Eniro share 52

Operative risks and Risk management 54

Board of Directors’ Report 58

Consolidated Income Statement 64

Consolidated Balance Sheet 65

Changes in Group equity 66

Consolidated cash flow statement 67 Parent Company Income Statement 68

Parent Company Balance Sheet 69

Changes in equity, Parent company 70 Parent Company cash flow statement 71

Accounting principles 72

Notes 82

Certification by the Board of Directors

and the President 103

Audit report 104

Quarterly Summary 105

Multi­year Summary 106

Definitions 108

Enir o Annual Report 20 08

Reading instructions

Eniro is a Swedish corporation that is subject to Swedish law. All values are expressed in Swedish kronor. Millions of kronor are abbreviated as SEK M. The numbers in pa- rentheses refer to 2007 unless otherwise indicated. Data about markets and the competitive situation are Eniro’s own assessments, unless a specific source is indicated.

These assessments are based on the best and most recently available facts from published sources within the media industry. The formal annual report, which has been subject to audit, includes pages 58–108.

ANNuAl REPORt 2 0 0 8

Contents

2008 in brief 1

Jesper Kärrbrink, CEO 2

Market and Trends 7

Online 10

Offline Media 14

Voice 18

Geographic presence 22

Eniro’s responsibility 31

Corporate governance report 2008 39

Eniro share 52

Operative risks and Risk management 54

Board of Directors’ Report 58

Consolidated Income Statement 64

Consolidated Balance Sheet 65

Changes in Group equity 66

Consolidated cash flow statement 67 Parent Company Income Statement 68

Parent Company Balance Sheet 69

Changes in equity, Parent company 70 Parent Company cash flow statement 71

Accounting principles 72

Notes 82

Certification by the Board of Directors

and the President 103

Audit report 104

Quarterly Summary 105

Multi­year Summary 106

Definitions 108

Eniro in brief

Eniro is the leading directory and search company in the Nordic media market. Eniro’s search database connects sellers to buyers and makes it easy to find people using Online, Voice and Offline Media channels. Eniro has operations in Sweden, Norway, Finland, Denmark and Poland. Eniro is listed on the Stockholm Stock Exchange and has some 5,000 employees.

Online

Online is a business unit showing sharp growth, and approximately 43 percent of the combined revenues from online and offline media come from Online, which makes Eniro one of the leaders in the industry in terms of the transformation from offline to online. Strong and in­

creasing usage of Internet and mobile services is the basis for Eniro’s growth, and it is in the Online segment where Eniro sees the most interesting opportunities for developing new products.

Offline Media

Offline Media is still an important business area for Eniro. Paper is still a strong information carrier, and despite a general decline in print media, due to changes in the con­

sumer behavior, this decline started from very high levels. One example is Sweden, where approximately

50 percent of the population uses the Gula Sidorna directory each month.

Voice

Voice is one business area that has seen a declining trend when it comes to the number of calls, as simple requests for names and numbers can be easily handled over the Internet. However, for more complicated requests, the trend is the opposite, and Voice will be a

Priorities in 2009

From print dependency to online opportunities

To continue to develop and improve the

ƒ

ƒ

core business, implement synergies and achieve cost savings and continue the strong offline to online transformation To grow the database with more and im­

ƒ

ƒ

proved content to increase the relevance of the searches

To launch several online services as part

ƒ

ƒ

of the Business Facilitating Services

To continue the work on creating more

ƒ

ƒ

offline niche products to meet specific needs of users and provide added value to customers

To continue to work on personal and

ƒ

ƒ

specialized services within voice

To increase the numbers of co­operations

ƒ

ƒ

Sweden

Eniro AB, Eniro Sverige Online AB and Eniro Gula Sidorna AB

SE-169 87 Stockholm Ph: +46 8 553 310 00 Fax: +46 8 585 097 25 info@eniro.com www.eniro.com www.enirosverige.se

Eniro 118 118 AB SE-169 87 Stockholm Ph: +46 8 553 310 00 Fax: +46 8 553 317 60 info@eniro.com www.enirosverige.se www.eniro118118.se

Visitors:

Gustav III:s boulevard 40 Solna, Stockholm

Din Del AB Solna Strandväg 78 P.O. Box 6010 SE-171 06 Solna Ph: +46 8 585 023 00 Fax: +46 8 704 18 30 www.enirosverige.se www.dindel.se

Norway Eniro Norge AS Olaf Helsets vei 5 P.O. Box 6705 Etterstad N-0694 Oslo

Ph: +47 81 54 44 18 Fax: +47 22 77 10 01 firmapost@eniro.no www.enironorge.no

Finland

Oy Eniro Finland Ab Säterinkatu 6 P.O. Box 290 FI-02601 Espoo Ph: +358 201 110 510 Fax: +358 201 110 511 info@eniro.fi

www.enirofinland.fi

Denmark

Eniro Danmark A/S Sydmarken 44 A DK-2860 Søborg Ph: +45 88 38 38 00 Fax: +45 88 38 38 10 www.enirodanmark.dk

Poland

Eniro Polska Sp. z o.o.

ul. Domaniewska 41 PL-02-672 Warszawa Ph: +48 22 314 2000 Fax: +48 22 314 2001 eniro@eniro.pl www.eniropolska.pl

Addresses

2009

TEMA

In order to improve Eniro´s long­term growth shall the current business transform from print dependency to online opportunities by developing the most consumer­ and customer­

valuable directory databases and transaction generator for all distribution channels, thereby positioning Eniro as a leading Nordic media company with a number one position in local search, online advertising and SME business facilitating services.

Share of operating

revenues Operating revenues per market, SEK M

SWEDEN 911 NORWAY 977

DENMARK 296 FINLAND 141 POLAND 105

37 %

Share of operating

revenues Operating revenues per market, SEK M

SWEDEN 1 362 NORWAY 839

DENMARK 420 FINLAND 271 POLAND 370

49 %

Share of operating

revenues Operating revenues per market, SEK M

SWEDEN 580 NORWAY 131 FINLAND 242

14 %

Eniro in brief

Eniro is the leading directory and search company in the Nordic media market. Eniro’s search database connects sellers to buyers and makes it easy to find people using Online, Voice and Offline Media channels. Eniro has operations in Sweden, Norway, Finland, Denmark and Poland. Eniro is listed on the Stockholm Stock Exchange and has some 5,000 employees.

Online

Online is a business unit showing sharp growth, and approximately 43 percent of the combined revenues from online and offline media come from Online, which makes Eniro one of the leaders in the industry in terms of the transformation from offline to online. Strong and in­

creasing usage of Internet and mobile services is the basis for Eniro’s growth, and it is in the Online segment where Eniro sees the most interesting opportunities for developing new products.

Offline Media

Offline Media is still an important business area for Eniro. Paper is still a strong information carrier, and despite a general decline in print media, due to changes in the con­

sumer behavior, this decline started from very high levels. One example is Sweden, where approximately

50 percent of the population uses the Gula Sidorna directory each month.

Voice

Voice is one business area that has seen a declining trend when it comes to the number of calls, as simple requests for names and numbers can be easily handled over the Internet. However, for more complicated requests, the trend is the opposite, and Voice will be a

strong complement to other distribution channels. Eniro has already responded to this trend by expanding the services with Voice, and now they can answer all types of questions.

Priorities in 2009

From print dependency to online opportunities

To continue to develop and improve the

ƒ

ƒ

core business, implement synergies and achieve cost savings and continue the strong offline to online transformation To grow the database with more and im­

ƒ

ƒ

proved content to increase the relevance of the searches

To launch several online services as part

ƒ

ƒ

of the Business Facilitating Services

To continue the work on creating more

ƒ

ƒ

offline niche products to meet specific needs of users and provide added value to customers

To continue to work on personal and

ƒ

ƒ

specialized services within voice

To increase the numbers of co­operations

ƒ

ƒ

Sweden

Eniro AB, Eniro Sverige Online AB and Eniro Gula Sidorna AB

SE-169 87 Stockholm Ph: +46 8 553 310 00 Fax: +46 8 585 097 25 info@eniro.com www.eniro.com www.enirosverige.se

Eniro 118 118 AB SE-169 87 Stockholm Ph: +46 8 553 310 00 Fax: +46 8 553 317 60 info@eniro.com www.enirosverige.se www.eniro118118.se

Visitors:

Gustav III:s boulevard 40 Solna, Stockholm

Din Del AB Solna Strandväg 78 P.O. Box 6010 SE-171 06 Solna Ph: +46 8 585 023 00 Fax: +46 8 704 18 30 www.enirosverige.se www.dindel.se

Norway Eniro Norge AS Olaf Helsets vei 5 P.O. Box 6705 Etterstad N-0694 Oslo

Ph: +47 81 54 44 18 Fax: +47 22 77 10 01 firmapost@eniro.no www.enironorge.no

Finland

Oy Eniro Finland Ab Säterinkatu 6 P.O. Box 290 FI-02601 Espoo Ph: +358 201 110 510 Fax: +358 201 110 511 info@eniro.fi

www.enirofinland.fi

Denmark

Eniro Danmark A/S Sydmarken 44 A DK-2860 Søborg Ph: +45 88 38 38 00 Fax: +45 88 38 38 10 www.enirodanmark.dk

Poland

Eniro Polska Sp. z o.o.

ul. Domaniewska 41 PL-02-672 Warszawa Ph: +48 22 314 2000 Fax: +48 22 314 2001 eniro@eniro.pl www.eniropolska.pl

Addresses

2009

TEMA

In order to improve Eniro´s long­term growth shall the current business transform from print dependency to online opportunities by developing the most consumer­ and customer­

valuable directory databases and transaction generator for all distribution channels, thereby positioning Eniro as a leading Nordic media company with a number one position in local search, online advertising and SME business facilitating services.

Share of operating

revenues Operating revenues per market, SEK M

SWEDEN 911 NORWAY 977

DENMARK 296 FINLAND 141 POLAND 105

37 %

Share of operating

revenues Operating revenues per market, SEK M

SWEDEN 1 362 NORWAY 839

DENMARK 420 FINLAND 271 POLAND 370

49 %

Share of operating

revenues Operating revenues per market, SEK M

SWEDEN 580 NORWAY 131 FINLAND 242

14 %

Text, graphic design and production: Eniro in co-operation with Hallvarsson & Halvarsson. Graphic production: Gylling Produktion. Photo: Lars Trangius. Printed by: Elanders.

Oper ating r ev enues 2008 in brief

2008 in brief

Operating revenues amounted to SEK 6,645 M

ƒ

ƒ (6,443)

Operational EBITDA (excluding capital gains

ƒ

ƒ

and restructuring cost) amounted to SEK 2,037 M (2,196)

Net income for the period amounted to SEK

ƒ

ƒ

–318 M (1,304) as a consequence in Norway of a write-down of goodwill and trade mark Tele- fonkatalogen of SEK 1,200 M

Net income per share amounted to SEK

ƒ

ƒ

–1.95 (7.27)

Operating cash flow amounted to SEK

ƒ

ƒ

1,098 M (1,485)

The Board of Directors will propose no

ƒ

ƒ

dividend for 2008

0 500 1,000 1,500 2,000 2,500 3,000

Poland Finland Denmark Norway Sweden

OPERATING REVENUES PER MARKET, SEK M

2008 2007, 2006 0

1,000 2,000 3,000 4,000 5,000 6,000

2008 2007

2006

OPERATING REVENUES, SEK M AND OPERATIONAL EBITDA-MARGIN %

Operating revenues, SEK M Operational EBITDA-margin, %

0 10 20 30 40 50 60 Key data, SEK M

2008 2007 2006

Operating revenues 6,645 6,443 6,372

Online 2,430 2,004 1,938

Offline Media 3,262 3,500 3,852

Voice 953 939 907

Operational EBITDA

(exkluding capital gains and restructuring cost) 2,037 2,196 2,177

Earnings before tax –276 1,401 1,276

Net income for the period –318 1,304 1,054

Net income per share, SEK * –1.95 7.27 5.82

Operating Cash flow 1,098 1,485 1,276

Cash Earnings per share, SEK 8.28 9.59 8.13

*) Attributable to equity holders of the parent company

2 Eniro Annual Report 2008

Str ategy

From print dependency to online opportunities

Dear Shareholders,

From games to directories, from print dependency to online opportunities. Sometimes the world is full of sur- prises. Although I have always been a frequent user of Eniro’s products, I had no idea what an exciting company was behind all the fast and accurate answers I obtained when dialing 118 118, searching the directories with their characteristically soft, yellow paper, or browsing the rel- evant search results on eniro.se. I was just like nine out of ten Swedes, a regular user of Eniro’s products.

Now I am one of almost 5,000 employees and know considerably more about Eniro, including the fact that our presence is equally strong in Norway, Denmark, Finland and Poland. We are the market leader in local search. We have over 500,000 customers and millions of end users. We print over 25,000,000 directories and gen- erate more than 4,000,000,000 online searches. We gen- erate over SEK 300,000,000,000 in transaction value for our customers. We have a sales force of more than 2,000 sales representatives, who make over 3,000,000 sales contacts each year. Last but not least, we distribute a printed product that has the same environmental im- pact as approximately 3 dl of skimmed milk. So I was humble before the task and very proud to accept the position of CEO at Eniro on June 1, 2008.

The new strategy – from print dependency to online opportunities

Like all companies, Eniro faces challenges – the most obvious being the transformation from analog to digital distribution. We are at a historic point in time. We are witnessing the end of paper’s thousand-year era as the dominant form of distribution. The more basic the infor- mation, the faster the transition to the Internet. For us, it is clear – paper will continue to have a strong position over the next five to ten years, but we cannot be de- pendent on it; From print dependency! At the same time, it is not sufficient to simply publish the directory on the Internet. We need to go further and make searches more relevant; To online opportunities!

Yet paper, as well as the telephone and the Internet, are only distribution channels – our main business is bringing people together and connecting buyers to

sellers. We do this through our database. The database is what generates a transaction value of SEK 300 billion per year. The directories and voice services, Internet and mobile services are only distribution channels. However, they are important – our product development, busi- ness models and customer relations are based on our distribution channels and will remain so for many years to come. The future split of revenues between distribu- tion channels will change over time, but the key to Eniro’s future success is in the development of new products and distribution channels that will leverage its key assets, the database and the sales force.

Using this as a starting point, an extensive internal and external review was conducted over the summer and autumn to chart the way forward for Eniro. The new strategy for Eniro was presented at a Capital Market Day in Copenhagen in November. The strategy is straightfor- ward. We will use our strong position to improve Eniro’s growth opportunities over the long term and transform Eniro from its print dependency by taking advantage of all online opportunities.

Transformation [going from one physical form to

Jesper Kärrbrink, CEO

Tr ansformation Jesper Kärrbrink, CEO

another] is the key word in our new strategy, but it must be based on our core business: local search. In other words, our business concept is to connect people to people and buyers to sellers through a rich, unique, rel- evant and qualitative database. We will expand by tak- ing advantage of our business concept, our strong posi- tion, strong cost structure, and strong local presence. In order to truly succeed, we have decided to approach this transformation as a project; a task to solve, with a clearly defined starting point and an equally clear end point. The transformation will take place over a seven- year period, including an initial investment phase dur- ing the next two to three years.

The strategy rests on the following:

A market leading sales force and strong customer

ƒ

ƒ

base

A unique, rich, qualified and transaction-generating

ƒ

ƒ

content database

One directory business with a channel-driven

ƒ

ƒ

organization Strong local presence

ƒ

ƒ

Future-oriented consumer and customer-driven

ƒ

ƒ

product development

An organization and people aligned with the mission

ƒ

ƒ

Enhanced strong brands

ƒ

ƒ

Organic growth, strategic mergers and acquisitions

ƒ

ƒ

and co-operations Operational efficiency

ƒ

ƒ

This can also be expressed in another way. Within seven years, our ambition is to increase profitability while growing from 40 to 80 percent online revenues, from searching for basic information to transaction-driven searches, from the customer perception that the com- pany must be in the directory to exist to a conviction that it must be in Eniro’s database, if it does not want to loose business. Eniro wants to move from having what is today a good database to the best and most relevant database in the world in terms of local searches, and from what is perceived as a traditional, sometimes bor- ing yellow pages company into an exciting, future-ori- ented media company.

New organization will deliver results

In order to be able to deliver according to our new strategy, Eniro needs a different organizational struc- ture; Eniro was thus transformed from a holding com- pany structure to a corporate structure with a clear combination of both increased centralization and de- centralization. The seven-year mission, which is my re- sponsibility to realize, is broken down into individual tasks for all managers and employees within the Group.

This allows us to achieve two things: an expanded op- erational mandate and increased responsibility. This en- sures that everyone is heading in the same direction and creates strong momentum. The new organization is designed to capture the product development as well as the geographical dimensions of the business.

OuR NEw STRATEgy iN bRiEF

In order to strengthen our long term prospects, Eniro shall transform the current business from print depen- dency to online opportunities by developing the most consumer- and customer valuable directory databases and transaction generator for all distribution channels, thereby positioning Eniro as a leading Nordic media com- pany with a number one position in local search, online advertising and SME business facilitating services.

2009

THEME

CUSTOMERS

USERS

SALES

BLOGGERS

PRODUCTS

dATAbASE

4 Eniro Annual Report 2008

Financial targets

Jesper Kärrbrink, CEO

Eniro is also divided into three strategic business areas with profit responsibility: Online, Offline Media and Voice.

There will be a continued strong focus on the na- tional markets, where local implementation will take place. A matrix organization has been created in order to be able to focus on both the opportunities within each of the segments, as well as on the local markets.

The business areas will be responsible for the segmen- tation strategy for the entire Group and will have own- ership and development responsibility for products and concepts. The organization within each country is re- sponsible for implementing the strategies, sales, mar- keting, business operations, co-operations and content aggregation, as well as local support functions IT, HR and Finance. The Swedish subsidiaries, Din Del and 118 118, will be part of the Swedish organization. As part of the new strategy and the new organization, areas for potential synergies and increased efficiency have been identified. An overall review of the Group’s cost struc- ture was initiated at the end of 2008. The Group-wide review will be completed by the end of June 2009, and it expects to result in substantial cost savings over the coming three years.

New financial targets

Eniro is in a period of transformation, and our new strat- egy focuses on strengthening our position over the long term. New financial targets – long-term and short- term – have been established to deliver shareholder value and lower the financial risk.

By investing over the next three years in the devel- opment of online opportunities, Eniro expects that rev- enue growth in online will offset declining revenues from print, resulting in a strong online position with top-line growth of 3–5 percent over the long term. The target for the operating margin before depreciation is above 30 percent, with continued strong cash genera- tion. To lower the financial risk, the target for net debt in relation to EBITDA is revised to 3–3.5. Eniro’s revised divi- dend policy states that up to 50 percent of the year’s net income may be distributed to shareholders.

Medium-term financial expectations

Over the medium term during this investment period, Eniro expects annual online growth of 12–15 percent and a controlled print decline, resulting in top-line growth of 0–2 percent each year. Annual investments

ENIRO GROUP

STAFF

ONLINE

Reporting Units and ownership of strategy, product- and concept

development

Strategy implementation, sales, operation, content aggregation, co-operations and local marketing OFFLINE

MEDIA VOICE SWEDEN NORWAY DENMARK FINLAND POLAND

Online opportunities Jesper Kärrbrink, CEO

to capture opportunities in online operations of up to SEK 250 million are expected to reduce the EBITDA mar- gin to around 27 percent in the medium term. During this period, reduction of net debt will be given priority over dividends.

In 2008, we entered one of the worst financial crises ever. Historically, Eniro has been more resilient to fluc- tuations in economic cycles than many other compa- nies, but we are not immune. In the current economic environment, we see no reason for changing our finan- cial targets for the medium term. However, due to bet- ter visibility of our online projects, we have lowered our online investments estimates for 2009 – from up to SEK 250 M to approximately SEK 180 M.

dividend proposal

The revised dividend policy states that up to 50 percent of the year’s net income may be distributed to share- holders. The Board of Directors will propose no dividend for 2008 as a consequence of the negative full-year net income followed by write-downs and the financial tar- get of a lower net debt.

Summary

Eniro is a solid company with great people who have done terrific work during the year. We have launched a new transformation strategy to move from print de- pendency to online opportunities, from a holding struc- ture to a Group structure to find synergies and cost sav- ings – all to create long-term growth. 2008 has been an exceptional year, which in many respects has been characterized by one of the deepest financial crises ever. The media sector has experienced a sharp slow- down and further declines in total advertising expendi- ture are to be expected during 2009. So far, the crisis has only marginally affected our core business, but in this uncertain macro-economic environment we need to be prepared for any potential changes that may im- pact our business. We will pursue Eniro’s new strategy for transformation with a clear view of where we are heading, but while having one foot on the gas pedal, we will also have one foot ready to hit the brakes if needed. In 2009 we will continue to focus on develop- ing and improving our core business, implementing synergies and achieving cost savings to continue our offline-to-online transformation.

I wish to thank all Eniro employees. I am very proud of what we have accomplished so far and I am tremen- dously excited to take the next step forward in trans- forming Eniro.

Stockholm, February 2009

Jesper Kärrbrink

President and CEO

sports_

230 hits in Stockholm

Sear ch mark et Market and Trends

The search market is growing and changing rapidly. In- ternet, broadband and continual technological devel- opments are dramatically affecting how we search for information. Accessibility is greater, while user patterns are changing. Laptop computers, mobile broadband and smartphones make it easier to search for informa- tion online. In addition to vastly more choices than just a few years ago, it is also much faster to find what you are looking for.

Likewise, developments in broadband technology are enabling more and more advanced broadband-de- pendent services, which include text, sounds and even moving images. While more and more people are on- line for longer periods of time, the demand for more and better search options is growing.

The Nordic region is leading this trend

The Internet’s portion of the search market, which also includes directories, mobile services and voice, e.g. di- rectory assistance, is already large and is growing. The trend has reached its peak in the Nordic region, which is at the top of the world in terms of Internet usage, the number of households with a broadband connection and the number of mobile telephone subscribers.

The increased importance of the Internet has led to advertising money moving from newspapers, TV and other traditional media to the Internet, which has cre- ated new advertising formats and payment options.

Online has been the fastest growing advertising media in the Nordic region. During 2008, growth reached 26 percent, and of the total advertising volume of SEK 81.7 billion, Internet advertising accounted for SEK 14 billion or 17 percent. The fastest growth has been in paid search advertising, which involves buying advertising space linked to one or more search terms. The effects of the advertisement can be measured, and the advertiser pays only for the number of “clicks” that the advertise-

ment generates. Paid search advertising grew by 27 percent in the Nordic region, according to Jupiter Research.

This trend will continue. The advertising market for local Internet search in the Nordic region, which is Eniro’s core business, will continue to grow by an aver- age of 14 percent annually up to 2012, according to the international analysis company The Kelsey Group. Based on the same forecast, the Internet will account for 60 percent of the overall market for search advertising, compared with 42 percent in 2008.

directories are shrinking

The growth in online comes partly at the expense of the printed directories. The reach of the directories has in large part remained unchanged, but use of directo- ries is dropping, especially in urban areas, where Inter- net penetration is high, and usage is declining among younger age groups, which will affect advertising rev- enue in the long term. Kelsey Group estimates that ad- vertising revenue from directories in the Nordic region will drop by an average of 5.5 percent until 2012. Eniro’s own prognosis is somewhat higher – an annual reduc- tion of 8–10 percent.

As mobile telephones become more advanced, mo- bile searches are also increasing. So far, the extent is somewhat limited, but most estimates point to a strong increase and doubling in the next three to four years.

Apple’s iPhone and other smartphones are leading the way.

A leading position in online and mobile services is therefore required to maintain long-term competitive- ness in local search. In turn, this puts great demands on the development of new products, services and busi- ness models.

Relevance is the key word

Simply providing basic information such as the name, telephone number and address of businesses and peo- ple online is not enough in the long run. Demands from the users are continuously increasing.

Search services must become better at satisfying the information needs of users by offering richer con- Increased Internet usage, new technological

solutions, a growing demand for better and more advanced search services puts great demands on the ability of search companies to develop new and innovative products and business models.

New thinking is necessary if the search market

is to be transformed

8 Eniro Annual Report 2008

Partnership

Market and Trends

tent, expanded functionality and a better experience.

For example, it may include providing information about products and prices, booking services and even the option to complete purchases. A strong trend on the Internet is so-called user-generated content, where the users not only contribute information but can also read opinions and reviews from other users. This trend can be summarized with the term “increased relevance”.

The winners on the search market are the companies with the best services that provide users with the infor- mation they are seeking as quickly as possible.

Strong brands are critical

The online market is characterized by stiff competition.

Even if an ever larger portion of advertising budgets are invested in the Internet, the competition for money still increases as new players arrive. It involves both large, global companies as well as smaller, local companies, in addition to niche players, media conglomerates and traditional directory companies. Examples of such com- panies are Google, MSN, hotels.com and Schibsted, in- cluding Hitta.se, Blocket, alltomstockholm and Finn.

Strong brands, a database with rich and qualitative content, as well as a large sales force are required to successfully capitalize on the growing search market.

iNduSTRy COllEAguES Unlisted

companies Primary markets Owners Revenues 2007*

EDSA Denmark, Austria,

Finland, Sweden, Poland, Nether- lands, Czech Republic, Slovakia, Gibraltar

Macquarie Capital Alliance Group, Caisse de Depot et Placement du Québec and Nikko Principal Investment Ltd

SEK 6.3 billion

Truvo Belgium, Ireland, Portugal, Romania, South Africa, Puerto Rico

Apax Partners Worldwide LLP and Cinven Ltd

SEK 3.7 billion

Listed companies

Eniro Sweden, Norway,

Finland, Denmark and Poland

Listed in Stockholm SEK 6.4 billion

Pages Jaunes France, Spain, Luxembourg and Morocco

Listed in Paris SEK 11.1 billion

SEAT Italy, Germany and Great Britain Listed in Milan SEK 14 billion

Yell Great Britain, USA, Spain, Argentina, Chile, Peru

Listed in London SEK 27 billion

Google Active around the globe Listed on the Nasdaq SEK 110 billion

*) Due to different fiscal year periods, the 2008 figures for all Eniro’s peers were not available at the time for the printing of the Eniro Annual Report

2008.

New thinking Market and Trends

For many players – in particular smaller companies – this poses a great challenge.

Partnerships increasingly common

One way to handle this is through consolidation, acqui- sitions and alliances. After the recent mergers among directory producers in Europe – resulting from the changing market conditions – the market has been dominated by just a handful of large companies. From previously having primarily distributed printed tele- phone directories, these companies now offer both on- line, mobile and voice services, by developing services or acquiring sites for price comparisons, auctions and classified advertising. In the Nordic region, Eniro is the leading search company with European Directories S.A.

(EDSA) as the primary competition.

Strategic co-operations are also increasingly com- mon, for example, between traditional directory com- panies and media conglomerates. Eniro has a number of co-operations in different markets. By taking advan- tage of each other’s distribution channels, the hope is to generate more traffic to the search services and thereby increase advertising revenues. Partnerships are also a way to meet Google’s expansion. Google, which is the world’s largest search engine, has so far focused on general Internet searching, but the trend toward in- creasingly local, customized services is clear.

New thinking necessary

Despite the increased competition from online, the di- rectories continue to have a strong position internation- ally with high revenues and high usage rates. The cur- rent drop underway actually started from very high levels, which is why the directories will continue to play an important role in the near future.

Changing user patterns, however, require a new way of thinking and a greater focus on product develop- ment among search companies. By creating new prod- ucts that are customized for specific user groups or cer- tain industries, usage of directories can be stimulated.

There are many examples of so-called vertical directo- ries, such as those aimed at home owners or couples that are planning their wedding.

Another expression of new thinking includes hy- brids, where editorial material is interwoven with lists of companies and suppliers. A hybrid of a newspaper and directory that is geared toward people interested in home furnishings has been tested in Canada with good results.

Even Voice, the so-called Directory Assistance ser- vices, are undergoing large changes. Deregulation of the 118-number series in Europe has opened the door for competition. At the same time, a number of large

Did you know:

The paper required to produce Eniro’s directories in Sweden corre- sponds to 0.018 percent of Swedish logging

players with operations in several countries have come to the forefront. Directory Assistance is also being af- fected by more and more people looking for informa- tion online and via their mobile phones, resulting in a decrease in calls asking for numbers and names.

Product development is necessary by expanding serv- ice offerings. The latest trend is “Any-Question-An- swered”, where users can get answers to all of their questions and which has been met with success in both Great Britain and USA. Ad-financed Directory As- sistance is also being tested in other places. Users avoid paying but must listen to a recorded advertisement in return.

This is probably only the beginning. Many analysts

have predicted that the future of the Voice industry is in

personal service. Instead of simply providing name,

number and perhaps driving directions, the next gen-

eration of Voice services will function as a type of per-

sonal “concierge”, that can provide tips on good restau-

rants and make reservations.

10 Eniro Annual Report 2008

Online

Online

Database

During 2008, Eniro strengthened its position as the Nor- dic region’s leading local search company on the Inter- net. Both the amount of traffic and the number of unique visitors to the company’s websites increased dramatically. A total of more than 4 billion searches were performed using Eniro’s network of Internet services.

The Online business unit was formed at the end of 2008 as part of Eniro’s new strategy to improve the Group’s long-term growth opportunities and to trans- form Eniro from print dependency to capturing online opportunities. This involves focusing on taking advan- tage of the development opportunities provided by Eniro’s online position. The creation of the Online busi- ness unit also provides more efficient use of Eniro’s col- lective expertise and stronger, more coordinated efforts to expand Eniro online.

The Online business unit includes all of Eniro’s Inter- net services, including the leading local search websites in all the Nordic countries, as well as mobile services in Sweden, Norway, Denmark and Finland. Online is a re- porting business unit with profit responsibility.

Online – the basis for Eniro’s growth

Strong and increasing usage of Internet and mobile services is the basis for expansion, and it is in the online segment that Eniro sees the most interesting opportu- nities for developing new products. Eniro should offer the best local search assistance for each individual geo- graphic market and it should be the first choice when users are looking for companies, people, products, ser- vices and places. Up until 2012, there is a mandate on investing up to SEK 250 M annually in new and im- proved services, primarily in Online and Mobile. Growth for the business unit during the same period is expect- ed to amount to approximately 12–15 percent annually, which is expected to compensate for the decreased revenues from Offline Media during the same period.

Customer database is a competitive factor

At the same time that Internet use and Internet adver- tising is growing, the competition is increasing. A large number of companies with different types of Internet services are competing in Eniro’s markets in the Nordic region and Poland. For example, this includes global players such as Google and MSN Microsoft, and national players such as hitta.se in Sweden and degulesider.dk in Denmark, with websites for information about private persons and companies. The competitors also include price comparison services such as Pricerunner and Kelk- oo, as well as lots of local and niche search services, such as alltomstockholm.se, tjenstetorget.no, folkferie.

dk etc. Eniro has in this connection clear competitive advantages including the unique database, with infor- mation on virtually all companies in the Nordic region and other local information, and the sales force, with over 2,000 dedicated sales persons, who make over three million customer contacts each year. There are few companies that can match Eniro in this respect.

New or updated information is entered into the da- tabase daily. The growth of the database in as well width as depth is a high priority because the value of Eniro’s search services is directly connected to the amount of relevant information.

Online is the reason for Eniro’s continued growth and the heart of the strategy to transform Eniro from print dependency to online opportunities.

The transformation from print to online creates new business opportunities, and over the next three years there is a mandate to invest a total of SEK 600–750 M in new and improved services.

Investing in new services is the key to continued growth

0 500 1,000 1,500 2,000 2,500 3,000

2008 2007

2006

OPERATING REVENUES ONLINE, SEK M

12 Eniro Annual Report 2008

Local sear ch

Online

Focus on transaction-generating services

Eniro’s business concept is to connect people to people and buyers to sellers through a rich, unique, relevant and qualitative database. Eniro’s services are an important channel for companies who want to reach out to buyers.

Even if general search engines like Google have higher traffic, Eniro is still the largest in commercial searches in both Sweden and Norway. According to a survey by Sifo Research International in 2008, searches using Eniro’s Norwegian and Swedish Internet network generated up to SEK 175 billion worth of business, while Google gener- ated SEK 172 billion.

Accessibility, relevance and high usage are impor- tant factors that determine the value of the search ser- vice for advertisers, which in turn affects advertising sales. Eniro continues to work on increasing the rele- vance and accessibility of different search services for both advertisers and users, thereby getting closer to the actual transaction between buyers and sellers.

Local search – Eniro’s core business

During 2008, several of Eniro’s online search services showed new records for visits at the same time as ad- vertising sales reached a new high. Eniro’s share of the Nordic online directories market was approximately 65 percent in 2008, according to the Kelsey Group. Hence, Eniro is in a very strong position to expand its core busi- ness in local online search. Eniro is the market leader in the online market segment in Sweden, Norway, Den- mark and Poland and is in the number two position on the Finnish market.

Using Eniro’s strong position in local search, new products are steadily being developed to offer custom- ers more ways to reach their target markets through Internet advertising. Through its search services, Eniro sells different types of information pages containing more detailed information than simply just basic infor- mation, i.e. company name, address and telephone number. Basic information is not enough. Customers and users are asking for more relevant and extensive information. The information pages are sold per inser- tion and for a given period of time. The price depends on the amount and type of information included on the

page, for example, searchable headings, search terms, the amount of text and images. A large part of Eniro’s online revenues comes from these types of advertise- ments. Beyond company search Eniro’s people search and map services are the most important core services within local search.

Local search forms the basis for the continued devel- opment and success of the business unit Online. Efforts to expand our core business, to create more relevant ser- vices for consumers and better products for customers, will continue.

Opportunities in Internet advertising

In addition to the subscription services market, where Eniro is currently one of the leading players, there are two other large market segments in Internet advertising: ban- ner advertising and sponsored links. Eniro currently re- ceives only a limited portion of its revenues from these market segments, but our ambition is to expand within these areas.

Banner advertising is currently available on many of Eniro’s search services. The customer purchases a set space for a set amount of time. The advertisement is most often linked to a number of search terms and is displayed for users who are searching these terms, and making them highly relevant for these users. There are also advertisements that are visible to all users. Eniro sees opportunities to expand the product offerings in terms of banner advertising, and therefore become a more relevant media site that can increase revenues from larger advertisers.

Sponsored links are another form of Internet market- ing that Eniro has offered since 2007, when it was intro- duced in Sweden, Norway and Finland. The sponsored links are displayed in connection with the search results and help to generate more traffic for the companies’

websites. The sponsored link is displayed when a person

searches for the words that the advertiser has selected,

thereby making the traffic directed to the website highly

relevant for the advertiser. Eniro charges per “click” on the

link or advertisement, and the price is determined

through an Internet auction procedure. Sponsored links

are the fastest growing type of advertising on the Inter-

Mobile services Online

net. Eniro’s revenues from sponsored links in 2008 amounted to approximately SEK 65 M and is expected to increase sharply in the coming years. Eniro’s goal is to grow faster than the market in terms of sponsored links.

In 2008, several strategic partnership agreements were signed, which are important to be able to offer Eniro’s cus- tomers a greater reach. In June, co-operation with Aller was expanded to also include Suomi24 in Finland and Passagen in Sweden, and in the autumn, co-operation was expanded with Hemnet, Sweden’s largest housing market on the Internet. In December, Eniro entered a part- nership with mktmedia, which is an incubation and devel- opment company for Sweden’s largest newspaper group, Stampen. The co-operation initially involves sponsored links, web searches and map information on more than 25 sites in Sweden and will make Eniro a supplier of local search services on their websites. The co-operation agree- ments will make searches more relevant and generate increased traffic within Eniro’s Internet network. Additional co-operations are expected in 2009.

Stronger customer relations with

“Business Facilitating Services”

The goal of Business Facilitating Services is to support day-to-day operations for small and medium-sized com- panies, who are Eniro’s main customers. Providing new services that create more business opportunities for cus- tomers increases the value of working with Eniro’s Inter- net services.

From previously having been an advertising site on the Internet, where “you need to be in order to be seen”, Eniro will become a market place “where you want to be” because there are so many benefits. The target group for these services is primarily the 500,000 small and medium-sized businesses that already advertise using Eniro’s Internet services and in Eniro’s directories.

Mobile services growing

The Online business unit also includes mobile search services in Sweden, Norway, Finland and Denmark, which provide access to Eniro’s services via mobile tele- phones – either as search services directly from a mo- bile telephone or through SMS.

The use of mobile services is growing and is expect- ed to increase sharply in the coming years as more and more people have access to advanced telephones.

However, revenues from this distribution channel are expected to lag behind for a few years until phone us- age has increased further.

High growth and increased profitability in 2008 The core business local search developed as planned during the year, and Eniro’s largest websites: eniro.se, gulesider.no, krak.dk, eniro.fi and pf.pl reached new re- cords of unique browsers. Increased traffic and sales resulted in increased online revenues in 2008 with 21 percent to SEK 2,430 M. The organic growth was 13 per- cent. The share of online revenues from among the Group’s total Online and Offline Media revenues in 2008 amounted to almost 43 percent, compared with 36 per- cent in 2007 and 30 percent in 2006. In an international comparison, Eniro is one of the companies that have made the most progress in the transformation from printed directories to online.

The profitability of Online varies between the differ- ent markets and different products. In Norway, where the transformation has been the greatest, the Online margins are comparable to the margins for Offline Media.

Priorities for 2009

Eniro will increase its rate of development and make more strategic investments in the business unit Online. In 2009, action will be taken to modernize and strengthen Eniro’s position. Several services within Business Facilitating Ser- vices are expected to be launched during the year. The number of co-operations is also expected to increase sharply.

Due to better visibility of our projects we have lowered

our online investments estimates for 2009 – from up to

SEK 250 M to approximately SEK 180 M.

14 Eniro Annual Report 2008

Offline

Media

Dir ectories Offline Media

Even with increased competition from the Internet, printed media will continue to be an im- portant information carrier in the coming years.

With improved offerings, increased usability and relevance, directory usage can be stimulated.

Increased relevance and better offerings provide new life for an important information carrier

Eniro is the leading search company for printed directo- ries in the Nordic region. Eniro produces and distributes approximately 25 million regional and local directories annually with approximately 750 editions in Sweden, Norway, Denmark, Finland and Poland. Over 400 million directory searches are made each year.

At the end of 2008, the Offline Media business unit was launched as part of the strategy to maximize the printed directories profitability. Offline Media includes the Group’s production of directories and other printed media, as for example map books in Denmark. Offline Media is a reporting business unit with profit responsibility.

Did you know:

The environmental impact of each telephone directory is comparable to the environmental impact of three deciliters of skimmed milk

Even if the the new strategy means that Online is the area where Eniro makes the greatest investment, print- ed directories will continue to have great importance for Eniro. Paper is a strong information carrier that is in demand by users and it will remain so for the foresee- able future. Rapid technological development, however, has resulted in a decline in the demand for printed me- dia. As a result of this Eniro needs to reduce its depen- dency on printed directories in the long run.

Eniro was one of the first companies to start the transformation from printed directories to online ser- vices, and is one of the few search companies in the world that has made the most progress in terms of the trend toward Online.

Eniro has a strong position in the directory market.

In Sweden, Norway and Poland, Eniro is the market leader, and is in second place in the Finnish market. In Denmark, Eniro is the largest supplier of local directories and the second largest supplier nationally. The directo- ries are well received and usage is high in all markets. In Norway, the usage rate for Gule Sider is approximately 55 percent annually, according to TNS Gallup, Forbruker

& Media (Consumers & Media). One survey by Sifo Re- search International shows that 71 percent of the Swedes use Gula Sidorna at least once per year and roughly 50 percent do so each month.

Transaction-generating directories

For many small and medium-sized businesses, Eniro’s directories are a very important marketing channel – sometimes the only one. Directory users are often very close to making a purchase, and Eniro then becomes the link between the buyer and the seller. Advertise- ments in the Swedish directory, Gula Sidorna, generate approximately SEK 52 billion worth of business each year, according to Sifo Research International. Accord- ing to Eniro’s own estimates, every krona invested in an advertisement in Gula Sidorna provides 52 kronor in average back in sales.

Eniro’s largest assets are its database and its sales force. The customer database contains information about virtually every active company in the Nordic re- gion, and our sales force of more than 2,000 people contacts approximately three million customers each year. An important part of the sale person’s contact with

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2008 2007

2006

OPERATING REVENUES OFFLINE MEDIA, SEK M

16 Eniro Annual Report 2008

New format

Offline Media

the customer is explaining the value of advertising.

Eniro offers customers a way to track calls to demon- strate the actual value of the advertisement. This in- volves using a unique telephone number in the cus- tomer’s directory listing, which allows them to measure how many calls the listing generates.

Increased relevance for satisfied users

The product offerings in Offline Media are continuously being developed to achieve increased usability and rel- evance. Innovative solutions and improved offerings for our advertisers help to stimulate demand for directories.

In order to remain on the cutting edge of product devel- opment and to educate the sales force, a close dialog is maintained between advertisers and users. Examples of product development terms of Offline Media that in- creases relevance for users are the specific guides, such as Bröllopsguiden (Wedding Guide), Restaurangguiden (Restaurant Guide) and Kropp & Själguiden (Body & Soul Guide). These were launched as an offprint in 2008 in Sweden and distributed in selected magazines. The re- ception has been very positive. The recipients noticed the guides and saved them for the most part. Similar guides are being produced in Norway, for example the Restaurantguiden (Restaurant Guide). The guides are highly appreciated by both advertisers and users.

New format for Gula Sidorna

Part of the work of increasing usability has involved giv- ing the 2009 editions of Gula Sidorna in Sweden and Gule Sider in Norway a new, smaller format that makes the directories more convenient and easier to handle.

This has been the first time in 40 years that the Swedish directory has changed its size, and the change has had a positive reception from both users and advertisers.

The new size does not affect the amount of information in the directory, but with fewer advertisers per page, the exposure is better for the customer.

Increasing competition from the Internet

It is no secret that the directory market in recent years has been suffering a decline due to changing user pat- terns. However, the drop is starting from much higher,

previous levels and is due to a number of factors, the most important of which is the social transformation from printed media to online. This change is taking place concurrently as broadband penetration and Inter- net access is increasing. It can also be seen in how Eniro’s printed products are used. The directories are used significantly more often in rural areas, where the broadband penetration is lower than in the cities.

Eniro estimates that the market for printed directo- ries will continue to decline by 8–10 percent annually until 2012. However, the market for printed products is still active, and the directories will still supply a large demand among users and advertisers for many years.

Did you know:

Just over 70 percent of Swedes use the telephone directory annually

Limited environmental impact from directories Eniro is actively working on reducing the environmental impact of the directories. In 2008, an environmental as- sessment was conducted on the Swedish directories by the international consulting and engineering company Econ Pöyry, at the request of Eniro. The results of the environmental assessment show that the environmen- tal impact for each directory is comparable with the environmental impact of three deciliters of skimmed milk. The conclusion is that the environmental impact of the directories is quite small in relation to their ben- efit to the community. A similar life cycle analysis was conducted on the directories in Norway in 2007–2008 with similar results. Even in Denmark, an analysis has been done to determine the directories’ environmental impact.

In Norway, Eniro has successfully managed to reduce the amount of paper required to produce the directories.

Paper consumption was reduced by 30 percent between

2007 and 2008. For more detailed information about

Eniro’s environmental work see the section, “Eniro’s Re-

sponsibility”. Eniro’s website, eniro.com, includes con-

stantly updated information on this topic.

High margins Offline Media

High market share

Eniro holds a very large share of the market for printed directories in the Nordic region and Poland. Competi- tors consists of both local and international companies.

The largest is European Directories S.A. (EDSA), which is active in all of Eniro’s markets except Norway with the wholly owned subsidiaries Lokaldelen AB in Sweden, Fonecta in Finland, De Gule Sider in Denmark and PKT and DiTel S.A. in Poland.

Continued high margins

During 2008, revenues from Offline Media amounted to SEK 3,262 (3,500) M. This was a decline of 7 percent compared with the previous year. The organic revenues fell by 9 percent.

In 2008, Norway was the market where the transfor- mation from print to online was most developed and where Offline Media represented the largest decline. In Denmark, however, the organic development for Offline Media revenues was flat, as a result of increased market shares.

Priorities for 2009

Working on multiple price models, revising product of- ferings and streamlining distribution are some of the prioritized tasks. Eniro will continue to work on creating more niche products that meet the specific needs of users and provide added value to advertisers.

ADDED vALuE FOR ADvERTISERS

Eniro offers advertisers different types of statistics for advertisement in directories and on the Internet. On the Internet, Eniro can show statistics on number of clicks to the advertiser’s website, number of calls generated by

“Phone without charge” ads as well as the number of e-mails sent via the function in the ad.

Common to both directory and Internet ads is that Eniro

offers call metering by using a unique telephone num-

ber in the customer’s advertisement that makes it easy

to measure how many calls the ad generates.

18 Eniro Annual Report 2008

Voice

P ersonal sear ch services voice

With over 70 billion queries per year, Eniro is the largest in personal search services in the Nordic region. In Sweden, Eniro 118 118 is the leading player in Directory Assistance, and in 2008, approximately 50 percent of Swedes used one of Eniro’s 118 services one or more times. In Norway, Eniro’s voice service holds a strong second place, as is also the case for Eniro’s voice service in Finland. Eniro’s voice service in Poland is available for the three largest telephone operators. The Polish busi- ness was started at the end of 2006 and is still in the start-up phase.

The Voice business unit was formed in 2008, as a part of Eniro’s new strategy to take better advantage of business opportunities more quickly in the area of personal search services via telephone and SMS.

Did you know:

Nine out of ten Swedes between the ages of 15 and 79 use an Eniro product at least once per year

Creating a separate business unit for Voice allows new concepts and services to be developed and introduced more quickly. Voice is a reporting business unit with profit responsibility.

New patterns provide new business opportunities The market for personal search services is undergoing great changes. As the competition increases and more new players appear, the traditional Directory Assistance service is shrinking. The number of calls from the fixed telephone network is dropping as simple requests for names and numbers are increasingly being made via the Internet. This is not just happening in the Nordic region. It is an international phenomenon.

In terms of complex queries, where users want help with driving directions, maps, information about busi- ness hours, and other information from various web- sites, the trend is somewhat different. This type of call is increasing, especially from mobile telephones. Another area of strong growth is text-based SMS queries.

The trend toward more advanced personal search services is positive. This benefits Eniro, which has well documented experience in expanding services and cre- ating innovative, new offerings that stimulate usage.

One example is 118 118’s SMS service “Fråga oss om vad som helst” (“Ask us anything”), which was launched in Sweden in autumn 2008. Now you can ask Eniro Swe- den about anything at all, regardless of the subject. The customer just needs to send the question as an SMS message.

With over 1,000 knowledgeable and dedicated em- ployees and access to the group’s joint search database, Eniro has all the conditions for meeting their customer’s needs in terms of relevance and accessibility when they are looking for personalized assistance. Eniro’s search database, with millions of companies, people and other information, is an important competitive factor that in- creases in importance as the database grows and is filled with new information.

Smart mobile services provide new revenues As mobile telephones become more advanced, the op- portunities to develop new, smart mobile services are expanding. One example is the “Eniro Vem Ringer”

By offering more and better features with a high level of service, Eniro will reinforce and expand its leading position in terms of Voice. In 2008, work on creating the next generation of personal search services was intensified.

New patterns creating new business opportunities

0 250 500 750 1,000

2008 2007

2006

OPERATING REVENUES VOICE, SEK M

20 Eniro Annual Report 2008

Tr ansaction

voice

(“Eniro Who is Calling”) service, which was introduced in Sweden in 2008 and displays the name of the person calling, even if the name is not in the mobile phone’s address book. According to a survey, 56 percent of Swedes do not answer calls from an unknown number.

With the “Eniro Vem Ringer” service, Eniro’s database runs a search and displays the name and address of the person calling. Missed and received calls can be looked up in the software. As described earlier, Eniro has also expanded its SMS-service, and now customers can send an SMS with a question about anything at all. What is the capital of Kenya? Why is water blue? The service is available 24 hours a day, and the answers are sent with- in a few minutes.

Closer to the transaction

Eniro’s new strategy involves an increased focus on transaction-generating services. By bringing buyers and sellers together, Eniro can help small and medium-sized companies to grow and expand. In terms of Voice, Eniro

Did you know:

Eniro’s sales team makes over 3,000,000 sales contacts each year

is looking at options for eventually offering ordering and reservation services, as well as other features that generate business for companies. When a customer wants help finding an address or directions to a restau- rant, Eniro in the future may also be able to reserve a table or order a taxi.

Offering companies and business people reserva- tion and ordering services increases customer satisfac- tion and creates new and increased revenues for Eniro.

Growth in new markets

Personal search services require a high level of opera- tional efficiency to achieve profitability. Eniro’s opera- tions are some of the most cost-efficient in the industry.

This knowledge can be applied to other segments such as call-center operations, or help to run switch- boards for larger companies and organizations. Eniro took the first step in 2008 by acquiring the customer service company Sentraali Oy in Finland. Sentraali has 250 employees and offers various types of customer services, primarily call-center services. In Sweden, Eniro 118 118 launched Svarsservice (Answer Service) which is a switch board service.

Eniro feels that room for growth can be created in all markets by offering high-quality services.

Satisfied customers provide increased profitability The competition within personal search services is fierce. Only in Sweden there are a dozen firms that offer personal or SMS-based Directory Assistance. The com- petitors include Telenor and Ahhaaa. In Norway, the competition is foremost from Opplysningen 1881, and Fonecta is the main competitor in Finland.

Brand awareness and customer satisfaction are the

most important factors that determine which service the

customer chooses. 95 percent of the Swedes know the

number for Eniro 118 118 (spontaneous and prompted

awareness), and 95 percent of customers rated the ser-

vice good or excellent. Thanks to this, Eniro has a strong

starting position and is in good condition to further

strengthen its position as the leading Nordic company

for personal search services. More services and better

service leads to more satisfied customers. At the same

time, calls are becoming longer as the requests are more

complicated.

value-gener ating services voice

Increase of revenue in 2008

Voice revenues in 2008 amounted to SEK 953 M, which is an increase of 1 percent compared to the previous year as a result of the acquisition of Sentraali Oy. Organi- cally revenues declined by 2 percent.

The decision was made during the year to consoli- date switchboard operations in Sweden from nine to seven locations by shutting down the operations in Örebro and Gävle, and to offer the employees, approxi- mately 140 people, work at other locations which re- sulted in restructuring costs of SEK 20 M.

Priorities for 2009

Several new value-generating services are also planned to be launched during 2009. Eniro will continue to work on personal, specialized solutions for customers, and thereby maintain its leading position while adapting services to changing customer patterns.

SvARSSERvICE (ANSwER SERvICE)

In Sweden, Eniro 118 118 expanded its product portfolio and launched its Svarsservice (Answer Service).

With its experienced team of telephone operators, Eniro has the ability to manage switchboards for larger companies in Sweden. There are three subgroups within Svarsservice: The switchboard service which involves telephone operators running switchboards for external companies, Overflow, which consists of calls that the business customer’s own switchboard is not able to respond to, as well as telephone customization, which can be compared to a messaging service.

Eniro is constantly working on product development, and the new Svarsservice is an example of how we can increase growth and create new revenue sources for Eniro.

SATISFIED CuSTOMERS PROvIDE INCREASED PROFITABILITy

Customers place a lot of value on being greeted by a pleasant and knowledgeable telephone operator. A full 95% of customers viewed our operators as pleasant or very pleasant and 93% feel the help answering their questions was efficient.* Eniro focuses on measuring and following up on customer satisfaction on a monthly basis.

*) Customer satisfaction survey 118 118 AB, Sweden December 2008.