INVESTOR MEETINGS MayJune 2004

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INVESTOR MEETINGSMay/June 2004
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Directories a Highly Attractive Industry

• Simple, cost-effective advertising medium first
  stop for SMEs
• High cash conversion, low capex, attractive
  margins
• Growth opportunities
• Increasing penetration of SMEs
• Shareshift and consolidation
• Recession resilient

26bn Global Directories Revenues
16Rest of World
29Europe
55US
Source The Kelsey Group, May 2004
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The Yell Group at a Glance

• Group FY 2004
• Turnover up 6.5 to 1,186.9m
  UK 53 US 47
• Adjusted EBITDA up 11.5 to 360.1m UK 65 US
  35
• Operating cash flow 303.5m
• Pro forma diluted EPS before amortisation 25.3p
• Dividend 9p per share

• UK
• 5 turnover CAGR FY 00 - 04
• Yellow Pages price capped at RPI - 6
• 8 growth in volume and yield
• Yell.com 23 turnover CAGR FY 02 - 04 36

• US
• 42 turnover CAGR FY 00 - 04
• Organic growth 11.5
• Expansion through acquisition
• Strong margin progression

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The Yell Proposition

• Focused strategy Win, Keep, Grow
• Target driven remuneration
• Sales excellence
• World class processes
• Usage and brand building
• Proven management team
• Focus on strong revenue, margin growth and cash
  conversion
• Acquisition and integration experience

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UK - Driving Growth in a Regulated Environment (1)

• Win
• Move In / targeted pricing
• Sales Segmentation
• Rescoping
• Growth in addressable market
• Keep
• First Year Renewals price offers
• Sales channel focus
• Proven value

UK directories turnover growth (m) CAGR 5 FY00
- FY04
Unique advertisers (000s) CAGR 6 FY00 - FY04
UK printed directories only
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UK - Driving Growth in a Regulated Environment (2)

• Grow
• Colour
• 6 options across 10 sizes
• price premium from 30 to 75
• Move Up price offers
• Advert size / multi-heading / multi-book
• High impact adverts
• Cross-sell - Yell.com

Average turnover per unique advertiser
Does not include Yell.com cross sell
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Driving Growth in the UK - Yell.com

• 27 turnover growth
• searchable advertisers up 37
• page impressions up 72
• Established SME relationships
• Sales expertise
• Proven usage and brand -building competencies
• Broad range of online products

Turnover growth (m)
Usage growth page impressions per month (m)
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Competing for the SME
Local press
Directories
Online
CUSTOMERS
Consumer magazines
Business magazines
National press
Yell thrives through building relationships with
SMEs based on delivering better value than
competitive media
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Regulatory Environment the Last Review
2001
1996 - 2001

RPI-6 from January 2002
RPI-2
Formula for setting maximum price of ads in
re-scoped directories - unchanged
Formula for setting maximum price of ads in
re-scoped directories
Discounts require OFT permission to be
withdrawn
Restriction removed
Changes in Business Practice e.g. new ad sizes
or features such as colour require OFT
permission
Restriction removed

Yell can introduce new overlapping directories if
no competitor in same area after 2 years from
undertakings
No new overlapping directories
Affected books published from March 2002
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US Expansion 53 share of Independents
536 OUT OF 6500 US DIRECTORIES
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Trends in US Market Shares
Revenue growth for publishers
Independents market share
Source The Kelsey Group with Yell estimates for
2002 to 2004. Independents include online only
publishers.
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US Growth Strategy

• Win
• Content
• Price point
• New launches / relaunches
• Usage and brand focus
• Service
• Keep
• Rescoping
• In-product development
• Maintain service levels
• Grow
• Headings development programme
• Step Up price offer
• Geographic footprint

• Expansion through acquisition
• Opportunities arising from continued
  consolidation
• Platforms
• In-fills
• Build margins
• Portfolio development
• Integration benefits

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Compelling Financial Characteristics

• Balanced group
• High levels of recurring revenues
• Early revenue visibility
• High margins and improving profitability
• Integration benefits
• High earnings growth
• High cash generation
• Low capex

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Yell Group - Strong Historic Growth
Turnover (m)
Adjusted EBITDA (m)
CAGR 18
CAGR 14
34.7 30.2 28.3 29.0 30.3 EBITDA margin
Adjusted EBITDA excludes buyout arrangement under
BT ownership in FY02, IPO costs and restructuring
costs relating to the closure of a Yellow Book
West production site in FY03
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Yell UK - Growth under Regulation
Turnover (m)
Adjusted EBITDA (m)
CAGR 5
CAGR 3
38.2 37.2 36.2 36.8 36.7 EBITDA
margin

1.3 0.6 -0.4 -4.4 -4.8
Effective Yellow Pages price reduction
Adjusted EBITDA excludes buyout arrangement under
BT ownership in FY02, IPO costs and restructuring
costs relating to the closure of a Yellow Book
West production site in FY03
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Yell US Organic and Acquisition Growth
Turnover (m)
Adjusted EBITDA (m)
CAGR 42
CAGR 74
12.7
12.3
19.4
23.0
Existing
EBITDA margin
Acquired
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Building US Margins
EBITDA margin of new directories since launch
7 30 63 100 Share
of turnover
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Cash Conversion and Operating Free Cash Flow
Group cash conversion 83 72 76 95 84 Capex
m (11) (23) (14) (16) (25) Working capital
m (26) (43) (46) (0) (32)
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Use of Free Cash Flow

• Acquisitions
• c 2/3 FCF
• Under 10x proforma EBITDA
• Positive net present value
• Earnings accretive, before goodwill amortisation
  and one-off costs

• Dividends
• c 1/3 FCF
• 1/3 interim, 2/3 final
• Growth in line with earnings

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Value Creation
Right model in the right markets
Strong positioning for growth
Driving performance
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• Investor Relations Jill Sherratt 44 (0)118 950
  6984
• www.yellgroup.com
• Yell, Queens Walk, Oxford Road, Reading,
  Berkshire RG1 7PT
• Trade mark of Yell Limited