INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

Transcription

1 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 1

2 IMPORTANT INFORMATION The terms Eniro, the Company or the Group refer herein to Eniro AB (publ) (organisation number ) and its subsidiaries, unless otherwise indicated by the context. References to the board refer to the board of Eniro AB. This prospectus ("the Prospectus") has been prepared by the Company in connection with the new issue of a maximum of 305,642,220 new ordinary shares with a preferential right for existing shareholders of ordinary shares in Eniro ( the Rights Issue ) and the inclusion of the new ordinary shares for trading. This Prospectus has been approved and registered by the Swedish Financial Supervisory Authority in accordance with the provisions of chapter 2 sections 25 and 26 of the Act (1991:980) regarding trading in financial instruments. The approval and registration does not mean that the Swedish Financial Supervisory Authority guarantees that the information is correct or complete. Disputes arising from this Prospectus, the offer and associated legal circumstances will be exclusively decided by Swedish law and by the Swedish courts, with Stockholm District Court as the first instance. This Prospectus has been drafted in Swedish and this is an English translation. In case of discrepancies, the Swedish version shall prevail. Eniro has not taken and will not take any action to permit an offer to the general public in any jurisdiction other than Sweden. No subscription rights, paid subscribed shares or new shares ("Securities") may be offered, subscribed, sold or transferred, directly or indirectly, in or to the USA except in accordance with an exemption from the registration requirement in the United States Securities Act of 1933 in the current wording ("the Securities Act") or any securities authority in any state of the USA. This Prospectus represents neither an offer to transfer nor an offer regarding an offer to acquire any securities other than the Securities. The offer according to the Prospectus is not directed at persons with domicile in the USA, Australia, Singapore, New Zealand, Japan, Canada, Switzerland, Hong Kong or South Africa, or in any other jurisdiction where participation would require a further prospectus, registration or other measures than those that follow from Swedish law. Consequently this Prospectus, marketing material or other material relating to the Rights Issue may not be distributed in or to any other jurisdiction where distribution or the offer according to this Prospectus requires such actions or contravenes the rules of such jurisdiction. Subscription and acquisition of Securities in contravention of the above limitations may be invalid. Persons who receive copies of this prospectus must familiarise themselves with and follow such restrictions. Actions in contravention of the restrictions may represent a breach of applicable securities legislation. Eniro reserves the right, on its own judgement, to invalidate subscriptions that Eniro or its agents consider may involve the infringement or disregarding of laws, rules or regulations in any jurisdiction. An investment in subscription rights, paid subscribed shares or new shares is associated with risks; see the section on "Risk factors". New investors make an investment decision, they must rely on their on judgement of Eniro and the offer in the Prospectus, including all circumstances and risks. Before an investment decision, potential investors should engage their own professional advisers and carefully evaluate and consider the investment decision. Investors should only rely on information in this Prospectus and any additions to this Prospectus. No person has been permitted to provide any other information or make any other statement than what is found in this Prospectus and, if such should occur, such information or such statements must not be considered to have been approved by Eniro and Eniro will not be responsible for such information or statements. Neither the publication of this prospectus nor any transactions performed in relation to it may be considered under any circumstances to mean that the information in this Prospectus is correct and valid at any time other than the date of publication of this Prospectus or that no changes have occurred in Eniro's activities after the date in question. The financial advisers in respect of the Rights Issue are ABG Sundal Collier AB ( ABG ) who have assisted Eniro in preparing the Prospectus. ABG has relied on information provided by the Company and,since all information in the Prospectus derives from Eniro, ABG accepts no responsibility in relation to shareholders in the Company and in relation to other direct or indirect financial consequences as a result of investment or other decisions that have been wholly or partly grounded on information in the Prospectus. ABG represents the Company and no other in connection with the Rights Issue. ABG is not responsible to anyone other than the Company for providing the protection that is offered to its clients or for providing advice in connection with the Rights Issue or any other matter to which reference is made in this Prospectus. Skandinaviska Enskilda Banken AB (publ) ( SEB ) is the issue institution with regard to the Rights Issue. FUTURE-ORIENTED INFORMATION AND MARKET INFORMATION The Prospectus contains future-oriented information that reflects Eniro's current view of future events, as well as financial and operational developments. Words such as "considers", "judges", "expects", "may", "plans", "estimates" and other expressions that involve indications or predictions of future developments or trends, and that are not grounded on historical facts, represent future-oriented information. Future-oriented information is by its nature associated with both known and unknown risks and uncertainty factors, since it depends on future events and circumstances. Future-oriented information represents no guarantee with regard to future results or developments and actual outcomes may be considerably different from what has been expressed in the form of future-oriented information. Factors that may cause Eniro's future results and development to deviate from what has been expressed in future-oriented information include, but are not limited to, what is described in the section on "Risk factors". Future-oriented information in this Prospectus applies only on the date of the publication of the Prospectus. Eniro gives no commitment to publish updates or amendments to future-oriented information as a result of new information, future events or similar circumstances other than what follows from applicable legislation. The Prospectus contains certain market and industry information that comes from third parties. Even though the information has been repeated correctly and Eniro considers that the sources are reliable, Eniro has not independently verified this information, which means that its correctness and completeness cannot be guaranteed. As far as Eniro is aware and can ensure by comparison with other information published by these sources, however, no information has been given that could in any way render the information repeated incorrect or misleading. PRESENTATION OF FINANCIAL INFORMATION Certain financial and other information presented in the Prospectus has been rounded off to make the information more easily accessible to the reader. Consequently, the figures in certain columns do not necessarily correspond to the stated totals. With the exception of the Company's audited annual accounts for the financial years 2012, 2013 and 2014, no information in this Prospectus has been investigated or audited by the Company's auditors. In what is reported under the heading "Selected financial information" on page 45, figures for the 2013 financial year have been subsequently recalculated. With regard to these figures, refer to the annual report for INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

3 CONTENTS SUMMARY... 4 RISK FACTORS INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO BACKGROUND AND REASONS TERMS, CONDITIONS AND INSRUCTIONS MARKET SUMMARY THE COMPANY SELECTED FINANCIAL INFORMATION COMMENTS ON SELECTED FINANCIAL INFORMATION CAPITAL STRUCTURE AND OTHER FINANCIAL INFORMATION THE SHARE, SHARE CAPITAL AND OWNERSHIP STRUCTURE BOARD OF DIRECTORS, SENIOR EXECUTIVES AND AUDITORS CORPORATE GOVERNANCE ARTICLES OF ASSOCIATION LEGAL ISSUES AND OTHER INFORMATION CERTAIN SWEDISH TAX ISSUES ADDRESSES THE RIGHTS ISSUE IN SUMMARY PREFERENTIAL RIGHT: SUBSCRIPTION PRICE: Each existing shareholder in the Company is entitled to three (3) subscription rights. One (1) subscription right gives entitlement to one (1) new ordinary share. SEK 1.50 per share RECORD DATE: 12 March 2015 SUBSCRIPTION PERIOD: 16 March-30 March 2015 ISIN CODES: SUBSCRIPTION AND PAYMENT WITH PREFERENTIAL RIGHT: Ordinary share: SE Subscription right: SE Paid subscribed share: SE Subscription supported by subscription rights is by means of simultaneous cash payment during the subscription period. TRADING WITH SUBSCRIPTION RIGHTS: March 2015 TRADING IN PAID SUBSCRIBED SHARES: 16 March-24 April 2015 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 3

4 SUMMARY Prospectus summaries consist of points that contain certain information. These points are numbered in sections A E (A.1 E.7). This summary includes the points that are to be included in a summary referring to a new issue of shares with preferential rights for the Company's shareholders. Since some other points do not need to be included, there are gaps in the numbering of points. Even though a point should in itself be included in the current summary, it may be that relevant information about such a point is not to hand. In these cases the summary contains a brief description of the information requirement together with the statement "Not applicable". SECTION A INTRODUCTION AND WARNINGS A.1 Introduction and warnings This summary should be regarded as an introduction to the Prospectus. Every decision on investment in securities must be based on an assessment of the Prospectus as a whole by the investor. If a petition with regard to the information in the Prospectus is brought in court, the investor who is the plaintiff may in accordance with the member states' national legislation be forced to cover the costs of translating the Prospectus before legal proceedings can begin. A.2 Financial intermediaries Civil law liability may only be imposed on the persons who presented the summary, including translations thereof, but only if the summary is misleading, incorrect or inconsistent with the other parts of the Prospectus or if it does not, together with the other parts of the Prospectus, give key information to help investors when they consider whether to invest in the Company. Not applicable. The Rights Issue is not covered by financial intermediaries. SECTION B ISSUER AND ANY GUARANTEE PROVIDERS B.1 Company and trade name The Company's registered name is Eniro AB (publ) and the Company's organisation number is B.2 Headquarters, form of company etc. Eniro is a public company which was founded in Sweden. The board is located in the City of Stockholm. The company's form of association is a public limited company and its activities are regulated by the Swedish Companies Act (2005:551). B.3 Primary activity Eniro is a leading local search company with activities in Scandinavia, Finland and Poland. The Company has more than 250,000 customers and approximately 1,300 sales representatives. Eniro s business model is based on the interaction between users, customers and channels, which are mutually dependent on each other. By providing current and relevant information about customers, The Company attract users, and by providing high user benefit, the Company attracts customers. Eniro has a unique database that is continuously refined and updated with relevant content, which the approximately 8 million unique visitors per week use through Eniro s search offering. Eniro aggregates and processes information from a vast range of information sources, including websites, telecom operators and sales organizations. This information is filtered, sorted and organized in the database, which is Eniro s most important asset. Revenues from local search are generated through advertising. Eniro distributes information via digital channels, printed directories and by phone. Today the digital channel accounts for approximately 88 per cent of total advertising revenue. The digital search function is backed by a multiscreen solution, so that searches can be performed in the channel that suits the user best. The multiscreen channel consists of Desktop Search, Mobile Search, and Campaign Products. Eniro has well-known brands within all active segments. B.4a Trends Eniro's results and position are affected by the development of the net-based search market and the marketing market generally, which in turn depends on a number of 4 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

5 factors such as the willingness of companies to spend money on marketing and the choice of media in which companies wish to be visible. In 2014, the same market trends as have been in place for several years have continued, which is to say a continued flow into the digital channels. The business model is based on an interaction between the user, the customer and the channel. Above all, the mobile channel is increasing in relevance because of the increasing penetration of smart telephones and users becoming ever more mobile and using their mobile telephones increasingly to find what is needed in the vicinity, and to buy products and services. Unlike the digital channels, the market trend is still downward for printed catalogues and number information services. Users of these services continue to move to digital channels and this trend is expected to continue. B.5 Group Eniro AB (publ) is the parent company of the Group. The table below lists Eniro's directly owned subsidiaries. Subsidiary Country Shares (%) TIM Varumärke AB Sweden 100 Eniro Danmark A/S Denmark 100 Respons Group AB Sweden 100 Eniro International AB Sweden 100 Eniro Sverige AB Sweden 100 Eniro Initiatives AB Sweden 100 Leta Information Eniro AB Sweden 100 Eniro Treasury AB Sweden 100 Oy Eniro Finland Ab Finland 100 Eniro Polska Sp.z.o.o Poland 100 B.6 Major shareholders Listed below are the shareholders who, as at February 28, 2015, directly or indirectly held shares corresponding to 5.0 per cent or more of the votes or share capital in the Company. Shareholder Danske Capital Sverige AB Zimbrine Holding BV (Staffan Persson) Ordinary shares Preference shares Share capital (%) Votes (%) 10,195,518 80, ,800, Odey Capital 5,618,000 90, B.7 Financial information in summary The overview of the 2012, 2013 and 2014 fiscal years is derived from Eniro s annual reports. The group s accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations by IFRIC as adopted by the EU as well as applicable provisions in the Swedish Annual Accounts Act and RFR1 supplementary accounting regulations for corporate groups. The annual reports and the consolidated financial statements for 2012, 2013 and 2014 have been audited by the Company s auditors. Income statement in summary SEK M Operating revenues 3,002 3,588 3,999 Production costs Sales costs -1,055-1,140-1,288 Marketing costs Administration costs Product development costs Other revenue/costs Impairment of assets -1, Operating income -1, Financial items, net Income before tax -1, Income tax Profit for the period -1, INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 5

6 Balance sheet in summary SEK M Assets Intangible assets 5,108 6,948 7,330 Other non-current assets Other current receivables Cash and cash equivalents Total assets 6,176 8,174 8,944 Equity and liabilities Shareholders equity (parent company shareholders) 1,737 3,598 3,543 Non-controlling interests Long-term borrowing 1,767 2,115 2,527 Long term non-interest bearing liabilities Short-term borrowing Current non-interest-bearing liabilities 1,134 1,381 1,631 Total equity and liabilities 6,176 8,174 8,944 Cash flow analysis in summary SEK M Cash flow from operating activities Cash flow from investment activities Cash flow from financing activities Cash flow for the period Cash and cash equivalents at start of the period Exchange rate differences in cash and cash equivalents Cash and cash equivalents at end of the period Key figures EBITDA (SEK M) Adjusted EBITDA (SEK M) Operating margin - EBITDA 21% 22% 24% Operating margin - EBIT -48% 13% 12% Average equity (SEK M) 3,021 3,607 3,308 Return on equity -55% 5% 7% Interest-bearing net liabilities (SEK M) 2,208 2,340 2,704 Debt to equity ratio Equity ratio 29% 45% 40% Interest-bearing net liabilities/adjusted EBITDA 3.3x 2.6x 2.8x Significant events During the third quarter of 2014, impairment testing was conducted of the group s intangible assets with indefinite useful life. The impairment losses that were subsequently recognized pertained to Local Search, in the amount of SEK 1,235 million; Voice, for SEK 562 million; and capitalized IT projects, for SEK 6 million. The impairment in Local Search pertained mainly to goodwill attributable to the acquisition of the Norwegian company Findexa in Of the goodwill impairment in Voice, SEK 429 million is attributable to Sweden, SEK 67 million to Norway, and SEK 66 million to Finland. The impairment losses were recognized against the background of the declining market trend that is expected to continue in the Voice segment. By means of an amendment agreement, Eniro has agreed certain changes in the loan agreement with the bank consortium, which means among other things that the period to maturity is extended until 2018, amortisation is reduced from approximately SEK 375 million a year to SEK 150 million a year for 2015 and to approximately SEK 175 million a year for The changes in the loan agreement are conditional, among other things, on the Rights Issue being 6 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

7 completed. The extraordinary general meeting on 9 March, 2015 decided to approve the board s decision on a fully underwritten Rights Issue of approximately SEK 458 millon and on a convertible issue at nominal amount of SEK 500 million. The convertible issue is directed at and placed with institutional and qualified investors in Sweden and internationally. Pierre Mårtensson left the position of CEO of Eniro Norway in January Mattias Wedar, a member of group management and head of product development and marketing, has been appointed as acting CEO of the Norwegian company. Allan Jakobsen has been appointed as CEO of Eniro Denmark and is a member of group management. Allan took up his position in March Nils Carlsson has been appointed as the new CEO of Eniro Sweden. Nils Carlsson will take up the position in May B.8 Selected pro forma reporting Not applicable. This Prospectus does not include any pro forma reporting. B.9 Profit forecast Not applicable. This Prospectus does not include any profit forecast. B.10 Adverse audit report The Company s financial report for the 2014 fiscal year contains an adverse audit report. In the audit report, the auditors have stated that they do not recommend that Former President and CEO Johan Lindgren shall be discharged from liability for the 2014 fiscal year. According to information arising during 2014, Johan Lindgren was informed in November 2013 by personnel within the Company that the Company s revenue recognition could, in material respect, be erroneous. During 2014, the board of directors received information regarding the claimed errors and instigated an investigation of the claims. It could be concluded that the accounts for 2013 were erroneous and that the errors had continued during These errors were corrected in the Company s interim report for the third quarter The costs for the investigations undertaken during the year amount to at least of SEK 5 million. The opinion of the auditors is that a significant portion of these costs could have been avoided if the claimed errors had been investigated in November 2013, that is, when they were made known to Johan Lindgren. B.11 Insufficient working capital The Company does not have sufficient working capital to cover current needs over the next twelve months from and including the date of this Prospectus. The extraordinary general meeting of March 9, 2015 decided to approve the underwritten Rights Issue of ordinary shares of approximately SEK 458 million in accordance with the conditions described in the Prospectus and to approve a directed and placed convertible issue of a nominal SEK 500 million. These issues are expected to provide the Company a maximum of SEK 200 million in working capital after issue costs and agreed amortisation of the bank loan. The Company s assessment is that the additional working capital brought about by the issues and changes in the loan agreement will together cover the Company's working capital needs for the coming twelve month period. It should be noted that no collateral has been pledged for the subscription and guarantee undertakings which have been provided regarding the Rights Issue. Nor has collateral been pledged by the subscribers of the convertibles. In addition, the subscription and guarantee undertakings regarding the Rights Issue are conditional on the loan under the bank loan agreement not being terminated for repayment and the amendment agreement regarding the bank loan not being terminated. The subscriptions of the convertible issue are conditional on the Rights Issue being carried out, the bank loan agreement not being terminated for repayment and the amendment agreement regarding the bank loan not being terminated. The banks have the right to demand immediate repayment of the loan agreement if, inter alia, a material adverse effect occurs regarding the Company. In addition, the amended loan agreement does not enter into effect if a material adverse effect regarding the Company occurs or if the Rights Issue or convertible issue are not fully carried out. If the amended loan agreement does not enter into effect, the Company is at risk of lacking necessary working capital to meet the required repayments that apply according to the existing loan agreement. In such a situation, the Company will need INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 7

8 to reach a new agreement with the Company s lenders. If such renegotiation were not to succeed or if Eniro does not succeed in obtaining new financing in another manner, Eniro will be in breach of the existing loan agreement. Such breach would in such case arise on June 30, 2015, when Eniro shall make an agreed amortisation and would entitle the lending banks to demand immediate repayment of the outstanding bank loan. The outstanding loan amounted to SEK 2,392 million as per December 31, 2014 (at which date the Company s cash and cash equivalents amounted to SEK 58 million), and since Eniro lacks the possibility to make a repayment of that magnitude, Eniro would be forced to apply for bankruptcy if immediate repayment was demanded. SECTION C SECURITIES C.1 Securities that are offered New ordinary shares in Eniro (ISIN code SE ). C.2 Denomination The shares are denominated in SEK. C.3 Total number of shares in the Company C.4 Rights associated with the securities C.5 Restrictions on free transfer As at the date of this Prospectus, the registered share capital of the Company amounts to SEK 308,642,220 distributed over 102,880,740 shares. Each share has a quota value of SEK 3. All shares are fully paid. The new ordinary shares give entitlement to dividend for the first time on the first reconciliation date for dividend after the new ordinary shares are registered with the Swedish Companies Registration Office. The new ordinary shares have the same entitlement to dividend and share in the event of the Company's liquidation as the existing ordinary shares. The new ordinary shares will have the same voting rights as existing shares in Eniro. Not applicable. The shares are not subject to any limitation on transfer. C.6 Inclusion for trading The existing shares are and the new shares will be subject to trading on Nasdaq Stockholm. C.7 Dividend policy Eniro prioritises the reduction of net liabilities ahead of dividends. The board consequently proposes that no dividend is paid for the Company s ordinary shares for the 2014 financial year. The board further proposes that a dividend on preference shares amounting to a total of SEK 48 per preference share should be paid for 2014, which corresponds to a total dividend of SEK 48 million. The dividend is proposed to be paid out in an interval of three-month periods. SECTION D RISKS D.1 Risks relating to the issuer or the industry Before an investor decides to subscribe to new ordinary shares, it is important to carefully analyse the risks that are associated with the Company and the industry in which the Company operates. Presented below are the main risks that might have an effect on the Company's activities, results and/or financial position. The Company's loan agreement includes conditions that might limit Eniro's financial and operational flexibility and thereby Eniro's possibility of operating its activities. The loan agreement also contains financial undertakings (covenants). In the event that Eniro did not fulfil the defined loan conditions under the loan agreement, this might result in a breach of agreement that, if not relieved or the lender's rights thereby are not subject to a waiver by the lender, might result in all outstanding loans immediately falling due for payment and mortgaged assets having to be subject to realisation. The changed loan agreement is conditional, among other things, on the completion of the Rights Issue and convertible issue and if this condition is not fulfilled and the changes do not come into force, Eniro risks not being able to meet its undertakings with respect to the existing loan agreement, which, according to the existing loan agreement, could result in all outstanding loans 8 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

9 immediately falling due for payment and mortgaged assets having to be subject to realisation. D.3 Risks related to the securities The convertible issue is not secured and if subscribers do not pay for the convertibles in the convertible issue and the changed loan agreement thereby does not come into force, which would mean that Eniro would probably not be able to meet its undertakings with respect to the existing loan agreement, which could result in all outstanding loans immediately falling due for payment and mortgaged assets having to be subject to realisation. When the Company's liabilities mature, Eniro may need to refinance its existing liabilities on less advantageous terms for the Company than presently and there is a risk that new capital cannot be acquired when the need arises. Increasing competition on the Scandinavian, Finnish and Polish markets might lead to a reduction in the number of customers and users, reduced sales income and increased costs for Eniro. There is a risk that Eniro is unable to change or adapt its existing, or develop new products and services or to perform correct and adequate investments, which may lead to lost customers and users, or that Eniro is forced to change the pricing of its products and offer terms which are less favourable for the Company in order to keep or attract customers or users. Eniro s business operations are dependent on that IT-based support systems, including data security systems, work effectively and without disruption. Eniro is also dependent on individual consultants with certain specific and material knowledge of Eniro s IT and communication systems. If any of these consultants cease to provide Eniro with their services such consultant could be difficult to replace, which could lead to interruptions in Eniro s IT and communication systems. Each interruption, damage, breach or disturbance regarding Eniro s IT and communication systems could have a material adverse effect on the Company s activities, results and financial position. Eniro is dependent on the Company being associated with positive values. Any deterioration in reputation might lead to a reduced number of customers and users, increased staff turnover and difficulty in attracting new personnel. Disruptions, defects or inefficiency in the Company's internal control may lead to that the Company s operations are not conducted in accordance with applicable laws and regulations, that the Company s reporting systems do not operate or that the operations cannot be adequately controlled, which may have a material adverse effect on the Company s activities, results and financial position. Eniro's authorisation to publish and could be withdrawn by the Swedish Broadcasting Authority. Should such authorisation be withdrawn, the Swedish Data Protection Authority would have the right to take measures against certain services offered on and www. Proff.se. If the authorisation to publish relating to the latter website is withdrawn, it could result in Proff requiring a permit from the Swedish Data Protection Authority in order to publish financial and credit information without doing so unlawfully. According to IFRS, the need for impairment of Eniro's goodwill and other intangible assets with indefinite useful life must be tested annually. If global economic conditions continue to worsen and affect Eniro's activities more than is presently envisaged, or if Eniro's business deteriorates more quickly than the Company presently judges likely, there may be a need for further impairment. Eniro may be subject to serious infringement of the Company's intellectual property rights and Eniro's possibility of protecting its intellectual property rights in the future may deteriorate. It may also be the case that Eniro's databases are not considered to have intellectual property right protection. New laws, directives or regulations, or amendments to or new interpretations of existing ones, which affect the Company's activities may lead to increased costs or other disadvantageous consequences for the Company. Prices of the new ordinary shares, paid subscription shares and subscription rights may develop in an unfortunate direction. If a shareholder does not sell his or her subscription rights by March 26, 2015 or does not utilise his or her subscription rights by paying by March 30, 2015, the shareholder's subscription rights will be lost without value or compensation. If a shareholder does not utilise his or her subscription rights, his or her INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 9

10 proportionate holding and voting rights in the Company will also be correspondingly reduced. There is a risk that active trading in the subscription rights will not develop or that trading will be insufficiently liquid during the period. The price of the subscription rights will depend on many different factors, including the development of the Company's share price, but may be subject to significantly more volatility than the shares. Neither subscription nor guarantee undertakings are secured. The agreements contain conditions for fulfillment and provisions on expiration. If shareholders or guarantors should for any reason not meet their undertakings to subscribe for new shares in the Rights Issue or if the undertakings due to certain conditions are not fulfilled or due to any other reason would default, it could have a considerable negative effect on the Company's possibility of successfully completing the Rights Issue, which may have a material adverse effect on the Company s activities, results and financial position. SECTION E THE OFFER E.1 Issue amount and costs E.2 a Reason and application of issue liquidity The Rights Issue will bring Eniro a maximum of maximum SEK 458 million before issue costs. The total issue costs are estimated to be approximately SEK 41 million for the Rights Issue and approximately SEK 11 million for the convertible issue. The issue costs for the Rights Issue are comprised of inter alia compensation to the issue guarantors and certain major shareholders who have made subscription undertakings, in total amounting to approximately SEK 23 million. In addition to the issue costs for the convertible issue, it should be noted that the convertibles were issued at a subscription price of 95 per cent of the convertibles nominal amount, which entails a discount of SEK 25 million in total. During the autumn of 2014, Eniro completed a management change and the new management has determined a strategic objective with three distinct focus areas. The ambition is also to make Eniro's products even more attractive and create a more customer and market oriented sales organisation. Eniro intends to work more clearly on business development and focus on local services that complement and increase the value of the current local search offerings. Together with Eniro's unique and comprehensive local databases, the 1,300 person strong sales force and the wellknown brand, this provides good conditions in which to create further business possibilities in the growing digital market and increase profitability. Parallel with strengthening the position in local searches, the declining but still profitable activities in print and voice are also handled. At the end of 2014, Eniro's net liabilities amounted to approximately SEK 2.2 billion, after the Company had reduced liabilities by approximately SEK 1.3 billion over the last three years. During the same period, Eniro has focused strongly on optimising the cost structure and has made cost savings of more than SEK 900 million. In spite of these initiatives, the Company has high net liabilities in relation to the profitability being displayed by the Company at present. The Company does not have sufficient working capital to finance the current needs during the twelve months as from the date of this Prospectus. As part of its review of the Company's capital structure, Eniro came to agreement on changes in the loan agreement with the bank consortium, which is conditional on performing the new issues. The renegotiated agreement will mean among other things a longer time to maturity and a considerably lower rate of repayment, which would give the Company greater financial flexibility and room to manoeuvre. Against this background, the board of Eniro has decided, conditional on the approval of the extraordinary general meeting, to perform a fully guaranteed Rights Issue of ordinary shares amounting to approximately SEK 458 million and a directed and placed convertible issue of nominal SEK 500 million (the subscription price is 95 per cent of the convertibles nominal amount which results in the Company being provided with SEK 475 million before issue costs). The extraordinary general meeting on March 9, 2015 decided to approve the board's decision. The aggregate issue proceeds is SEK 933 million before issue costs, at least SEK 650 million of which will be used to repay the Company s bank loan. The purpose of the capital injection is to amortise the bank loan, to create greater financial 10 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

11 E.3 The forms and conditions of the offer E.4 Interests that are significant to the offer flexibility and greater conditions to realise Eniro s strategy. In this way further value shall be created for the Company s shareholders and other stakeholders. General The Rights Issue is for a maximum of 305,642,220 new ordinary shares and is initially directed at existing shareholders in Eniro. Subscription price The new ordinary shares are issued at a price of SEK 1.50 per share. Record date The record date with Euroclear for determination of which persons are entitled to receive subscription rights in the Rights Issue is 12 March Subscription period Subscription to the new ordinary shares will be during the period from 16 March 2015 to 30 March 2015 inclusive. Trading in subscription rights Trading in subscription rights takes place on Nasdaq Stockholm during the period 16 March 26 March 2015 inclusive under the ticker ENRO TR. The ISIN code for subscription rights is SE Allocation If not all shares are subscribed using the subscription rights (primary preferential right), the board will decide on allocation of ordinary shares subscribed without subscription rights. The allocation would then be organised as follows: Initially, shares that have not been subscribed by means of primary preferential right will be offered to all shareholders for subscription (subsidiary preferential right). If the number of shares offered is insufficient for the subscription by subsidiary preferential right, the shares will be distributed between subscribers in relation to the total number of shares in the Company they already hold, regardless of whether their shares are common or preference shares. If distribution in this way proves not to be possible, lots will be drawn to decide distribution. Secondly, shares may be allocated to other persons who have registered for subscription without preferential rights and, if oversubscribed, proportionally in relation to the number of shares stated in the registration and, if this cannot be achieved, by drawing lots. Finally, any remaining shares will be allocated to persons who guaranteed the issue according to agreement with the Company. Date of liquidity The planned date of liquidity for shares allotted without subscription rights is estimated to be approximately 14 April The Company's shareholders Nortal Capital AB (a company controlled by Staffan Persson, a member of the board of the Company), Danske Capital AB, M2 Capital Management AB and Lars-Johan Jarnheimer who together represent approximately 18 per cent of shares and votes, have undertaken to Eniro and ABG to subscribe and pay for their respective pro rata share (proportionally in relation to shareholding) of the Rights Issue. These undertakings to subscribe were entered into on February 5, Nortal Capital AB and Danske Capital AB will receive compensation for their undertakings corresponding to other guarantors. The question on compensation has been tested at the Company's request by the Swedish Securities Council in its statement AMN 2015:02 and the board has carefully considered the Council's statement before its decision to approve the compensations. The Company has received guarantee undertakings from Bure Equity AB, Catella Fondförvaltning AB, Tedde Jeansson, SSE Capital, MGA Holding AB, Carl Rosvall, Schött & Tour Capital AB, Kristian Kierkegaard Holding AB, LMK Ventures AB, Myacom Investment AB, Göran Källebo and Shaps Capital AB ( the Guarantors ), under which the Guarantors have undertaken, on certain conditions, in the event that not all shares in the Rights Issue are subscribed, or subscribed but not paid for at the right time, to subscribe and pay for new shares to an amount corresponding to a total of approximately 82 per cent of the total issue amount. The guarantee undertakings were entered into between February 4 and February 6, The Guarantors, as compensation for their guarantee undertakings, will receive an amount of compensation corresponding to five per cent of the amount guaranteed. The compensation to the guarantors in the paragraph above, Nortal Capital AB and Danske Capital AB altogether amounts to approximately SEK 23 million. ABG acts as financial adviser in connection with the Rights Issue. ABG has provided the Company with advice in connection with the structuring and planning of the Rights Issue and receives compensation for such advice. ABG has performed and may also perform in the future various financial advisory services for the Company and its INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 11

12 closely related parties, for which it has received and may be expected to continue to receive fees and other compensations. E.5 Lock-up agreement Nortal Capital AB (a company controlled by Staffan Persson, a member of the board of the Company), Danske Capital AB, M2 Capital Management AB and Lars-Johan Jarnheimer have undertaken towards ABG not to reduce their holding of shares in the Company from February 5, 2015 when their subscription and guarantee undertakings were entered into to and including the public announcement of the results of the Rights Issue. Nortal Capital AB may however transfer shares to Zimbrine Holding BV. E.6 Dilution effect On the assumption that the Rights Issue is fully subscribed, this will mean that the number of ordinary shares will increase from 101,880,740 to 407,522,960. For shareholders who do not subscribe to ordinary shares in the Rights Issue, there will thus be a dilution effect of a maximum total of 305,642,220 new ordinary shares, corresponding to approximately 75 per cent. Shareholders who do not participate in the Rights Issue will have their holdings diluted, but have the opportunity to compensate for the dilution arising due to the Rights Issue by selling their subscription rights on Nasdaq Stockholm no later than March 26, The total issue costs are estimated to approximately SEK 41 million for the Rights Issue and approximately SEK 11 million for the convertible issue (the issue costs for the Rights Issue are comprised of inter alia compensation to the issue guarantors and certain major shareholders who have made subscription undertakings in total amounting to approximately SEK 23 million. In addition to the issue costs for the convertible issue, it should be noted that the convertibles were issued at a subscription price of 95 per cent of the convertibles nominal amount, which entails a discount of SEK 25 million in total). E7. Costs passed to investors. Not applicable. The issuer will not pass any costs on to investors. 12 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

13 RISK FACTORS An investment in shares is associated with risks. Stated below are risks that may be significant for Eniro's shares and the Group's results, activities and future development. The risk factors are not ranked in order of probability, significance or potential effect on Eniro shares or the Group's activities, results or financial position and are not claimed to be exhaustive. Consequently, further risk factors that are not presently known of or are not at present considered to be significant might also affect Eniro's shares or the Group's activities, results or financial position. The value of an investment in Eniro might be significantly affected if any of the risk factors stated below should be realised. Investors are therefore encouraged to make their own assessment of the significance of the risk factors below and potential other risk factors for Eniro's shares or the Group's activities and future development. Risks related to Eniro s activities LOAN AGREEMENT Eniro's loan agreement - the existing agreement as well as the changed agreement that comes into force if certain conditions (including completion of the Rights Issue and convertible issue) are fulfilled - contains conditions that limit possibilities for Eniro's management to freely decide on certain commercial circumstances. Among other things, the loan agreement limits Eniro's opportunities to pay dividends, make investments, lend or furnish guarantees, sell or otherwise transfer assets, merge or consolidate the business with another company or mortgage assets or otherwise submit them to a legal charge. These loan conditions may limit Eniro's financial and operational flexibility and thereby Eniro's ability to operate its activities, which might have a considerable negative effect on Eniro's activities, results and financial position. The loan agreement also contains financial undertakings (covenants) including a requirement regarding the lowest ratio between cash flow and interest and amortisation at group level, a requirement regarding the lowest ratio between EBITDA and financial net at group level, a requirement regarding the highest ratio between total net liabilities (after the changed loan agreement has come into force calculated exclusively among other convertible borrowing) and EBITDA at group level and a requirement that the Group's annual investments do not exceed a certain predetermined level. The loan agreement also contains restrictions and limitations regarding further borrowing, guarantees and security, significant change of business, acquisitions and disposals. The loan agreement also includes a right for the lender to transfer its rights under the agreement to another party that handles financial assets without Eniro's consent, which may mean that parties that Eniro does not currently have any relations with might become the lenders to Eniro under the agreement. Furthermore, shares in all significant subsidiaries, all significant brands and larger internal loans have been pledged as security for Eniro's liabilities under the loan agreement and associated financial documentation. In the event that Eniro does not fulfil the defined loan conditions under the loan agreement, this might result in a breach of agreement that, if not relieved or the lender's rights thereby are not subject to a waiver by the lender, might result in all outstanding loans immediately falling due for payment and mortgaged assets having to be subject to realisation, which could have a significant negative effect on Eniro's activities, results and financial position. THE CHANGED LOAN AGREEMENT IS CONDITIONAL The changed loan agreement involving relief in financial undertakings (covenants) and repayment requirements is conditional among other things on completion of the Rights Issue and convertible issue, but there are other conditions. If conditions are not fulfilled and the changes do not come into effect, Eniro risks not being able to meet its undertakings with respect to the existing loan agreement regarding amortisation and financial undertakings (covenants), which, according to the existing loan agreement, could result in all outstanding loans immediately falling due for payment and mortgaged assets having to be subject to realisation, which would have a considerable negative effect on Eniro's activities, results and financial position. THE CONVERTIBLE ISSUE IS NOT GUARANTEED The Company's convertible issue of a nominal SEK 500 million has been placed with institutional and qualified investors. Subscription is however conditional, among other things, on the Rights Issue being completed and the Company's lenders not terminating the loan according to the loan agreement or the amendment agreement regarding the loan agreement. The subscribers have not furnished security for their subscription of convertibles. If the subscribers do not pay for the convertibles in the issue and the amendment agreement thereby does not come into force, which would mean that Eniro would probably not be able to meet its undertakings with respect to the existing loan agreement, which could result in all outstanding loans immediately falling due for payment and mortgaged assets having to be subject to realisation, which would have a considerable negative effect on Eniro's activities, results and financial position. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 13

14 REFINANCING RISK The greater part of Eniro's bank debt runs up to and including May 2016 or, if the changed loan agreement comes into force, up to and including 31 December 2018, and the convertibles that the Company will issue run until 14 April 2020, if they have not previously been converted into shares. In connection with these liabilities maturing, the Company will need to seek an agreement on an extension and/or seek alternative financing. Eniro's possibility of successfully refinancing the liabilities depends on market conditions and Eniro's financial situation at the time of refinancing. Even if market conditions are good in respect of refinancing, access to finance may be limited and Eniro may need to perform such a refinancing on less attractive conditions for Eniro than the present ones, which could mean that such a refinancing might involve higher interest and more restrictive conditions and limitations on activities. There is a risk that new capital cannot be obtained when the need arises or that it cannot be obtained on terms acceptable to the Company. If Eniro is unable to obtain adequate financing when the liabilities mature or if the loan should fall due to payment early, it is uncertain whether Eniro's assets would be sufficient to repay the debts. All such events could have a significant negative effect on Eniro's activities, results and financial position. UNCERTAIN ECONOMIC FLUCTUATIONS Changes in financial markets and the global economy are difficult to predict and may affect demand on the Company's markets in Scandinavia, Finland and Poland. Eniro's customers' marketing plans govern demand for the Company's products and services. The Company works in an industry that is late in the economic cycle and uncertainty about economic developments and growth in Scandinavia, Finland and Poland could have a considerable negative effect on Eniro's activities, results and financial position. COMPETITION Eniro competes with both new and established local and international players. The competitors consist of traditional and new local and global search companies with activities in online and mobile channels, global social network pages and communities and niche search services and e-commerce sites in specific industry sectors. The printed products that are published by Eniro compete with other catalogues and other printed forms of advertising including traditional media such as newspapers, radio, TV and outdoor advertising, as well as direct marketing. Eniro's ability to successfully compete for both customers and users depends on factors both within and outside Eniro's control, including the users' demand for Eniro's services, successful development and launching of new products at the right time, Eniro's ability to provide relevant services to its users and relevant products to its customers, pricing, industry trends and general economic trends. The proportion of the advertising market served by media agencies also continues to grow and Eniro is to some extent dependent on these media agencies promoting the Company's products and services. A reduction in these agencies' promotion of the Company's products and services in favour of competitors' products and services could also lead to a smaller number of customers for Eniro. Increased competition on the Scandinavian, Finnish and Polish markets as a result of competitors' price reductions, launches of new services and products, reduced promotion of Eniro's products and services through media agencies or similar actions could lead to a reduction in the number of customers and users, reduced sales income and increased costs for Eniro, which in turn could have a considerable negative effect on Eniro's activities, results and financial position. ENIRO DEPENDS ON BEING ABLE TO PROVIDE A COMPETITIVE PRODUCT MIX Eniro's business model offers its customers exposure to users of Eniro's products and assumes an attractive product mix. Eniro's ability to offer its customers attractive products is in turn partly dependent on the users' behaviour and trends on the markets where Eniro is active. Users of digital channels are trend sensitive and quick to both take up and reject services. The markets where Eniro is active are characterised by rapid technical changes, new launches and improvements of competing products and services and varying demand from both customers and users, who moreover have different preferences, which means that Eniro is subject to a variety of challenges in its endeavours to provide an attractive product mix for its customers. If Eniro cannot offer its customers an attractive product mix, this could lead to reduced demand for Eniro's products, which could lead to reduced use of the Company's services, which could in turn have a considerable negative effect on the Company's activities, results and financial position. 14 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

15 ADAPTATION OF THE COST BASE A continuous adaptation of the cost base is a prerequisite for maintaining the Company's competitiveness. Every failure to adapt the cost base to an effective utilisation of the Company's resources could have a considerable negative effect on the Company's activities, results and financial position. DECREASING USE OF PRINTED PRODUCTS AND NUMBER INFORMATION SERVICES In recent years the total use of printed products and number information services in Europe has fallen. In line with usage transferring from printed catalogues and number information services to digital search channels, the Company's income relating to printed products and number information services falls, which is a trend that is expected to continue. However Eniro expects to continue to obtain some income from printed products and number information services for a certain period of time. If the use of number information services and printed products falls more quickly than the Company expects, this could have a considerable negative effect on Eniro's activities, results and financial position. PRODUCT OFFERINGS AND PRODUCT DEVELOPMENT The considerable technical development that characterises the Company's markets could mean that Eniro might need to make considerable investments for the purpose of changing or adapted existing products for customers or services for users, or developing new ones. Even if Eniro continues to invest in developing products and services, there is a risk that Eniro may not succeed in changing or adapted existing products for customers or services for users, or developing new ones that meet the demand from customers and users or that follow industry trends and technical developments. There is also a risk that new products or services do not achieve a breakthrough on the market, which means that Eniro's prioritising of which products and services the Company chooses to focus on is important. There is also a risk that Eniro's investments are not sufficient to achieve Eniro's strategic and financial goals, or that the Company cannot sell future products to customers at the same prices as the present products. If Eniro is unable to adapt its existing products and services, or develop new ones, or in Eniro does not make the right or sufficient investments, this could lead to Eniro losing customers and users, or being forced to change the pricing of products and offer conditions that are less attractive to the Company, in order to keep or attract customers and users, which could in turn have a considerable negative effect on Eniro's activities, results and financial position. SALES Eniro intends to attract new customers by developing its sales channels and improving its sales methods and sales effectiveness, which includes increasing sales per salesperson. Any failure in these strategic areas could have a significant negative effect on Eniro's activities, results and financial position. ENIRO DEPENDS ON ITS SALES FORCE Staff turnover among Eniro's salespersons is higher than that among other staff. The greatest staff turnover occurs among salespersons with less than two years' experience. Even if Eniro allocates significant resources and efforts in motivating and training sales people, Eniro's ability to attract and keep qualified salespersons depends on a number of factors, some of which are wholly or partly outside Eniro's control, including the competitive situation on the labour markets in which Eniro is active. Eniro's sales people have developed longterm relationships with the Company's customers and so the loss of a significant number of sales people could result in the Company's sales falling, which could have a significant negative effect on Eniro's activities, results and financial position. DEPENDENCE ON CUSTOMERS AND USERS Eniro's operating profit depends on the number of customers who buy the Company's products and the number of users of the Company's services. The number of customers and users depends on a number of factors, including Eniro's ability to offer competitive products and services. As well as keeping existing customers and users, Eniro is focusing on increasing the Company's low customer satisfaction, to attract both new customers and users as well as to offer further complementary products and services. It is also an important factor that Eniro can reliably measure user statistics for its services so as to be able to demonstrate customer benefits to the Company's customers. Any failure by Eniro to attract new or retain existing customers and users or to offer competitive products or services, to be able to reliably measure user statistics or increase customer satisfaction could lead to reduced demand and traffic and thereby reduced sales, which could have significant negative effect on Eniro's activities, results and financial position. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 15

16 DEPENDENCE ON IT AND COMMUNICATION SYSTEMS Most of Eniro's business activities depend on IT-based support systems, including data security systems, working efficiently and without disturbance. Any interruption or fault in existing or future systems could weaken Eniro's ability to collect, process and store data and operate the ongoing business. Eniro's support systems are also vulnerable to damage or interruption caused by attacks by computer viruses on websites and there is a risk that unauthorised persons could gain access to the content of Eniro's databases. In spite of security measures having been taken by Eniro and its external suppliers in respect of IT and communication systems and databases, accidents, unlawful acts by third parties, natural disasters or other unforeseen events could lead to information at Eniro or at third parties who maintain Eniro's databases, being damaged or lost. Eniro also depends on individual consultants with certain specific and system-critical knowledge about Eniro's IT and communication systems. If any of these consultants ceases to provide Eniro with his or her services, this consultant may be very difficult to replace, which might lead to interruptions and disturbance in Eniro's IT and communication systems. Any interruption, damage, intrusion or disturbance to Eniro's IT and communication systems could have a significant negative effect on Eniro's activities, results and financial position. DEPENDENCE ON EXTERNAL SUPPLIERS Eniro depends on external suppliers in its activities. For example a significant part of the Company's IT infrastructure and the development of certain IT applications are subject to outsourcing and certain software products are used by the Company under licence. Eniro also works with external suppliers in respect of certain web search services, such as so-called crawling functions, which are computer programs that search through websites in a structured and automated way and are used by search engines for the purpose of providing updated information. Eniro also uses external suppliers for the printing and distribution of the Company's printed products and for providing content such as maps, traffic information, addresses and number information, which represent an important part of the Company's products. This means that Eniro is dependent on these external suppliers' systems, services, content, knowledge and ability to provide on behalf of Eniro key functions on time and in accordance with agreed standards. If an external party does not provide its service in accordance with its undertakings to Eniro or if Eniro can no longer use any of its suppliers' services, products or content, this may lead to delays in deliveries etc., reduced availability to and lower quality of Eniro's products, which could have a considerable negative effect on Eniro's activities, results and financial position. DEPENDENCE ON KEY PERSONNEL Eniro's conditions for success depend to a large extent on its ability to continue to identify, recruit and keep qualified and experienced managers, salespersons and product developers. Eniro's ability to recruit and keep qualified personnel depends on a number of factors, some of which are outside Eniro's control, including the high level of competition in the local labour markets where Eniro is active. If any key personnel in Eniro's company management or other key personnel leave Eniro, this could significantly delay or hinder Eniro in achieving its goals for the development and sale of new products and services. If Eniro cannot recruit or keep qualified and experienced managers and other key personnel, this could have a significant negative effect on Eniro's activities, results and financial position. LOSS OF REPUTATION Eniro is dependent on the Company being associated with positive values. If the Company becomes subject to negative publicity, for example with regard to its financial position, as a result of the Company or any of its employees or board members committing an act that contravenes the values that Eniro represents or because of speculation or rumour, there is a risk that the Company's reputation will be weakened. Every such weakening of reputation could lead to a reduction in the number of customers and users, increased staff turnover and more difficulty in recruiting personnel, which in turn could have considerable negative effect on Eniro's activities, results and financial position. ACQUISTIONS AND DISPOSALS Eniro may from time to time acquire or dispose of assets, shares or companies. In connection with such transactions, various kinds of claims may be directed at Eniro. The Company may also incur considerable transaction costs and in the performance of such transactions restructuring and administration costs may arise. If such claims are directed at Eniro, such costs arise, Eniro is unable to integrate acquired operations or if such operations fail to live up to expectation, this may have a considerable negative effect on Eniro's activities, results and financial position. 16 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

17 RISK RELATING TO DEFICIENT INTERNAL CONTROL Eniro's activities are regulated by many different laws, regulations and internal and external rules. These require Eniro to have effective internal control. Internal control involves, among other things, managing and monitoring that daily activities are performed in accordance with applicable laws and provisions, including that the Company's financial reporting is in agreement with the principles and provisions of accountancy law, as well as ensuring that the Company has appropriate reporting systems for administration and other activities, as well as on-site controls to support the activities. Disruptions, defects or inefficiency in the Company's internal control may lead to the Company s operations not being conducted in accordance with applicable laws and regulations, that the Company s reporting systems do not operate or that the operations cannot be adequately controlled, which may have a material adverse effect on the Company s activities, results and financial position. COMPLEX PRICE AND DISCOUNT MODELS Eniro has complex products and services that are sold according to complex price and discount models. Eniro has historically displayed defects in income reporting as a result of defective system support for managing the Company's products and services. Against this background, Eniro has introduced an action programme to rectify the defects. Even though the Company's assessment is that the action programme is effective at present, it is not certain that the action programme will be effective in the future or that other faults or defects may not occur. Eniro may also change its existing products or offer new products, which may require adaptation of the Company's internal order system. If Eniro's action programme should prove to be ineffective in the future, if the Company's order system continues to display defects or if Eniro cannot adapt its order system to changed or new products or if other faults or defects should arise, this could have considerable negative effects on Eniro's activities, results and financial position. INTELLECTUAL PROPERTY RIGHTS Eniro's intellectual property consists among other things of the trademarks Eniro, Eniro , Gule Sider, PanoramaFirm, , 1880, 1888, De Gule Sider and Krak, which are important for Eniro's activities. Eniro uses a combination of intellectual property legislation and trademark legislation in order to protect its intellectual property rights. Eniro has also invested considerable resources over time in developing its databases, which among other things contain information about companies, products, services, web addresses and private individuals. It is an important assumption for Eniro that the databases are considered to be protected in accordance with legislation on intellectual property. If the databases should not be considered to be protected in accordance with legislation on intellectual property, or if it should become more difficult in future to obtain intellectual property right protection for Eniro's intellectual property, including its databases, this could affect Eniro's ability to successfully compete in the markets in which Eniro is active. Eniro may also from time to time need to take legal action against third parties in order to protect its intellectual property. Similarly, Eniro may be party to processes in which a third party takes legal action to contest Eniro's intellectual property rights or because Eniro may have done something to infringe another's intellectual property rights. It is not certain that legal action or other action that Eniro might take would be successful or that Eniro would not be considered to have infringed another party's intellectual property rights. Furthermore, misuse of or infringement of Eniro's brands may mislead customers and users into using services provided by other companies, which could have a negative effect on Eniro's reputation and in turn result in a lower number of users of Eniro's services and a reduction in the number of customers. If Eniro should be subject to significant infringement of the Company's intellectual property rights, regardless of whether this results in legal proceedings and regardless of the outcome of such proceedings, or if Eniro's databases cannot be considered to be protected in accordance with intellectual rights legislation, or if Eniro's ability to protect the Company's intellectual property rights in the future should be weakened, this could have a significant negative effect on Eniro's activities, results and financial position. DIFFERENT TAX SYSTEMS The Group's activities are affected by current tax regulations in the countries in which the Group has commercial activities. Even though in Eniro's assessment the activities are operated in accordance with applicable legislation, tax agreements and the provisions and requirements of the tax authorities in the countries in question, there is a risk that Eniro's interpretation of applicable laws, tax agreements, provisions or practice is incorrect or that such rules may change with retroactive effect. Through changes in legislation or decisions of the tax authorities Eniro's present or previous tax situation may be weakened, which could have a considerable negative effect on Eniro's activities, results and financial position. CHANGES IN AND NEW REGULATIONS INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 17

18 The Company's activities are regulated by many different jurisdictions, laws, directives, regulations and other rules, which regulate among other things personal data protection, marketing, database protection, competition law and intellectual property rights. Generally these laws, directives and regulations apply to all Eniro's activities, but given Eniro's strategic transition from printed products to online, specific laws and regulations that regulate the provision of internet services, the use of the internet and the handling of personal data have become more relevant. In spite of the fact that Eniro's activities focus on specific geographical areas, namely Scandinavia, Finland and Poland, given the global structure of the internet, Eniro's activities may come to be regulated by laws in many different countries. Internet regulation in the countries where Eniro is active is still largely undeveloped, even in countries where legislative action has to a certain extent been taken. The growth and development of e- commerce may lead to an implementation of more stringent laws and regulations with regard to the internet or marketing on the internet, which could lead to further restrictions for companies that conduct their business on the internet. In addition to legislation, interest groups for issues of integrity and industry bodies for advertisers and direct advertising are considering the introduction of new or amended self-regulation for the internet. Changes in regulation with regard to marketing could also affect Eniro's activities. In Poland for example, provisions have been introduced that mean, with effect from 25 December 2014, it is prohibited to use telecommunication equipment, such as telephones and computers, as well as automated dialling systems for direct marketing without the subscriber or end user having given active consent for this. It should further be noted that according to competition law, Eniro's high market share in certain markets could lead to Eniro's being considered to have a position in these markets that could lead to limitations to Eniro's possibility of freely operating its activities i the markets affected and to grow by acquisition. New laws, directives or regulations, or amendments to or new interpretations of existing ones, which affect the Company's activities may lead to increased costs or other disadvantageous consequences for the Company and could have a considerable negative effect on the Company's activities, results and financial position. DATA PROCESSING Eniro is responsible for ensuring that the collection of information about users, which occurs via websites and other services, is done in accordance with applicable legislation. If the processing of information is defective, civil or criminal law sanctions may be directed at Eniro or its management, which could have a considerable negative effect on Eniro's activities, results and financial position. ENIRO IS RESPONSIBLE FOR MATERIAL THAT IS PUBLISHED ON WEBSITES Eniro publishes both its own content and that provided by third parties on its websites. Eniro might be held liable to a third party for published material if the third party's copyright, brand or other intellectual property right is infringed or if the content is belittling, misleading, criminal or in any other way in contravention of prevailing laws and regulations. Claims or counter claims could be time consuming, result in expensive proceedings and divert company management's focus away from the business. Eniro's customer conditions include guarantees wherein the customer ensures that the material that the customer provides for publication is in accordance with prevailing legislation. However Eniro still bears a responsibility for what is published and thus Eniro can incur costs in connection with proceedings, claims from third parties and proceedings for recourse. Eniro's reputation and relations with customers and users may also be damaged by this. A considerable negative effect on Eniro's activities, financial position and operating profits could this arise if material published on the websites contravened laws and regulations. Eniro's reputation or relations with customers could also be damaged if their advertising were mistakenly placed on a website with inappropriate content. Similarly, Eniro's reputation could be damaged if information that is available on the Company's websites were incorrect, which could result in users seeking out other companies' services or making claims against Eniro. Such damage to Eniro's reputation or relations with customers could have a considerable negative effect on Eniro's activities, results and financial position. RECALL OF AUTHORISATION TO PUBLISH Eniro Sverige AB ( Eniro Sverige ) holds an authorisation to publish for and Proff AB ( Proff ) holds an authorisation to publish for The authorisation to publish issued by the authorities for radio and TV means that the website is protected under the constitutional provision regarding freedom of expression (1991:1469). As part of this protection, the Personal Data Act does not apply to the publication of personal data on the website in cases where the application of the act would mean a limitation of freedom of expression. The authorities for radio and TV can recall the authorisation to publish if the conditions applying to it are not fulfilled. If Eniro's authorisation to publish were to be recalled, the Data Inspection Board would be entitled to take action against certain of the services that are offered on and If the authorisation to publish for the latter website were recalled, this could lead to Proff needing a permit from the Data Inspection Board in order to publish financial and credit information in order to avoid illegal publication. Such actions could have a significant negative effect on Eniro's activities, results and financial position. 18 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

19 LEGAL PROCEEDINGS Eniro is from time to time involved in proceedings in the courts or with authorities within the framework of the Company's activities. Eniro may for example be subject to claims relating to intellectual property rights, permits provided or misleading and improper marketing practice. Each such proceeding could be time consuming, relate to large sums and cause considerable costs to the Company regardless of outcome, which could have a considerable negative effect on Eniro's activities, results and financial position. CREDIT RISKS Most of Eniro's operating revenues are obtained from the sale of advertising to small and medium sized companies. In its ongoing activities, Eniro invoices the majority of these customers for advertising at the time each customer signs its agreement. Since small and medium sized companies tend to have fewer financial resources and a higher rate of bankruptcy than large companies, especially in times of economic downturn, full payment of receivables that have fallen due may take time or be lost. If the total amount of such receivables that have fallen due should become significant, this could have a negative effect on Eniro's activities, results and financial position. LIQUIDITY RISK Liquidity risk is the risk that Eniro cannot fulfil its payment obligations when these fall due without the cost of obtaining the means to pay increases considerably. If Eniro's sources of liquidity should prove to be inadequate or inaccessible when the Company had assumed that they would be accessible (for example because customers pay later than expected), this could have a considerable negative effect on Eniro's activities, results and financial position. CURRENCY RISKS Eniro has activities in Sweden, Norway, Denmark, Finland and Poland and thereby generates income and incurs costs in a number of currencies. Consequently, Eniro's operating profits are affected by exchange rate changes. Since Eniro's accounts at group level are in SEK, Eniro is also affected by a translation risk to the extent that assets, liabilities, income and costs for the Group's subsidiaries are accounted in currencies other than SEK. Against this background, there is a risk that increases or reductions in the value of SEK against EUR, DKK, NOK and the Polish zloty could affect the value of these items in Eniro's accounts at group level even if the value has not changed in their original currencies, which could have a considerable negative effect on Eniro's activities, results and financial position. INTEREST RATE RISK The Company's net interest costs are affected at any given time by the proportion of financing at variable or fixed interest rates in relation to changes in market rates. All of Eniro's borrowing is at variable interest rates, which means it is exposed to rate changes. Future interest rate changes could have a significant negative effect on the Company's activities, results and financial position. IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLE ASSETS According to IFRS, the need for impairment of Eniro's goodwill and other intangible assets with indefinite useful life must be tested annually. Testing must also occur when events or changes in circumstances indicate that the reported value may not be recoverable. Fixed assets in Eniro's balance sheet consist mainly of intangible fixed assets. As a result of impairment testing with regard to 2014, the Group's intangible assets with indefinite useful life were impaired by a total of SEK 1,797 million, of which SEK 1,235 million referred to local search and SEK 562 million referred to voice. The impairment in local search referred mainly to impairment of goodwill referring to the acquisition of the Norwegian Findexa 2005 and the impairment in voice was due to the continuing weakness of market trends for voice. As at 31 December 2014 goodwill amounted to SEK 4,051 million which, in relation to equity, amounting to SEK 1,797 million as at 31 December 2014, is a considerable amount. If global economic conditions continue to worsen and affect Eniro's activities more than is presently envisaged, or if Eniro's business deteriorates more quickly than the Company presently judges likely, there may be a need for further impairment, which could have a considerable effect on Eniro's activities, results and financial position. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 19

20 Risks related to Eniro's shares DEVELOPMENT OF THE SHARE The new ordinary shares, paid subscribed shares and subscription rights are expected to be traded on Nasdaq Stockholm. A potential investor should be aware that investments in ordinary shares, paid subscribed shares and subscription rights in the Company are associated with a high level of risk and that there are no guarantees that the prices of these securities will develop in a favourable direction. In addition to Eniro's results, the share price is dependent on several factors that Eniro cannot influence, such as the economic climate, market rates, capital flow, political uncertainty and market behaviour. These factors may result in the share price falling to a level that is less than the subscription price in the Rights Issue and thus an investor can make a loss when disposing of ordinary shares. FAILURE TO PARTICIPATE IN THE RIGHTS ISSUE OR UTILISE SUBSCRIPTION RIGHTS If a shareholder does not utilise his or her subscription rights by paying by March 30, 2015 or does not sell his or her subscription rights by March 26, 2015, the shareholder's subscription rights will be lost without value or compensation. Holders and financial intermediaries should therefore ensure that all necessary instructions regarding the utilisation of subscription rights are followed. If a shareholder does not utilise his or her subscription rights, his or her proportionate holding and voting rights in the Company will also be correspondingly reduced. Even if a shareholder chooses to sell his or her unused subscription rights, the compensation that is received may not reflect the immediate dilution of the percentage ownership of the Company's share capital when the Rights Issue has been completed. TRADING IN SUBSCRIPTION RIGHTS Subscription rights are expected to be traded on Nasdaq Stockholm during the period from March 16, 2015 to March 26, 2015, inclusive. There is a risk that active trading in the subscription rights will not develop or that trading will be insufficiently liquid during the period. The price of the subscription rights will depend on many factors, including the development of the Company's share price, but may be subject to significantly more volatility than the shares. DIVIDEND According to Swedish law the annual general meeting decides on dividends. Dividends may only be paid if there if there are funds for the payment of dividends at Eniro and on condition that such decisions appear reasonable in relation to the requirements that the nature, scope and risks of the business set for the amount of equity at Eniro as well as Eniro's consolidation needs, liquidity and financial position. Furthermore shareholders cannot as a general rule decide on a higher dividend than that proposed or approved by the board. With the exception of the right of minority shareholders' to request dividends in accordance with the Companies Act, if the annual general meeting does not decide to pay a dividend in accordance with the above, shareholders may not make claims for dividend. Moreover, Eniro's loan agreement imposes further restrictions regarding decisions to pay dividends. Against the background of the restrictions described, the payment of dividends on shares in the Company may not occur or may only partially occur. Also the Company's preference shares have a preferential right before ordinary shares to an annual dividend of SEK 48 per preference share until the first reconciliation date after the 2017 annual general meeting. With effect from the first reconciliation date after the 2017 annual general meeting, the annual dividend will increase by SEK 4 per year. In the event that Eniro's annual general meeting decides not to pay a dividend or to pay a dividend of less than a quarter of the annual dividend per preference share in one quarter, the amount not paid per preference share is accumulated and is subject to interest at an annual rate of 20 per cent until such time as the full accumulated dividend is paid. If against the background of the above named restrictions Eniro cannot pay a dividend (in full or in part) this may affect the Company's financial position. That the annual general meeting decides on a dividend is no guarantee that the dividend is paid. If there are insufficient liquid funds at the time of payment, the dividend that has been decided on may not be paid. FURTHER NEW ISSUES MAY DILUTE THE HOLDINGS OF EXISTING SHAREHOLDERS Eniro may decide in the future on further new share issues in order to acquire capital. All such further offers may reduce the proportional holding and votes for holders of shares in the Company and profit per share in the Company and any new issue could have a considerable negative effect on the market price of the share. 20 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

21 CONVERSION OF CONVERTIBLES On March 9, 2015, an extraordinary general meeting approved the board's decision of February 5, 2015 to issue convertibles to a total nominal amount of SEK 500 million. Future conversion of these would mean that the proportional holding and votes for holders of shares would be reduced. CERTAIN FOREIGN SHAREHOLDERS ARE PREVENTED FROM UTILISING THEIR PREFERENTIAL RIGHT Certain holders of shares in Eniro who are resident or have an address registered in certain jurisdictions other than Sweden can be prevented from using their preferential rights in respect of the shares they own in the Company in future issues if a registration measure or corresponding measure under applicable law in each jurisdiction is not taken in respect of such shares or an exemption to the requirement for registration or similar under applicable law in each jurisdiction is made. SUBSCRIPTION UNDERTAKINGS AND GUARANTEE UNDERTAKINGS ARE NOT SECURED Shareholders in the Company that together represent approximately 18 per cent of the shares and votes have undertaken to subscribe to their respective pro rata share (proportionally in relation to their shareholding) in the Rights Issue. The Company has also received guarantee undertakings from Bure Equity AB, Catella Fondförvaltning AB, Tedde Jeansson, SSE Capital, MGA Holding AB, Carl Rosvall, Schött & Tour Capital AB, Kristian Kierkegaard Holding AB, LMK Ventures AB, Myacom Investment AB, Göran Källebo and Shaps Capital AB as guarantors ("the Guarantors") corresponding to approximately 82 per cent of the total issue amount. This means that the Rights Issue is fully guaranteed. However neither subscription nor guarantee undertakings are secured. The agreement contains conditions for fulfilment and provisions regarding expiration. If shareholders or guarantors should for any reason not meet their undertakings to subscribe for new shares in the Rights Issue or if the undertakings due to certain conditions are not fulfilled or due to any other reason would default, it could have a considerable negative effect on the Company's possibility of successfully completing the Rights Issue, which may have a material adverse effect on the Company s activities, results and financial position. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 21

22 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO The Rights Issue Eniro's Board of Directors decided on 5 February 2015, subject to EGM approval, to increase the Company's share capital through a new issue of ordinary shares with preferential rights for Eniro's holders of ordinary shares. The Board of Director's decision on the Rights Issue was approved at the EGM on 9 March The rights issue resolution means that Eniro's share capital will increase by a maximum of SEK 152,821,110 through the issue of not more than 305,642,220 new ordinary shares. The Company's shareholders have a preferential right to subscribe for the new ordinary shares pro rata in relation to the number of ordinary shares they already own. The record date for the right to participate in the Rights Issue is 12 March Those who on the record date are registered as holders of ordinary shares in Eniro may subscribe for three (3) new ordinary shares for each existing ordinary share in Eniro. New ordinary shares that are not subscribed for with preferential rights will be offered to shareholders and other investors in accordance with what is stated in the section "Terms, conditions and instructions". Subscription takes place during the period from and including 16 March up to and including 30 March 2015 or until a later date decided by the Board of Directors and otherwise in agreement with what is stated in the section "Terms, conditions and instructions". The subscription price is SEK 1.50 per ordinary share, which means that Eniro will receive approximately SEK 458 million in total if the Rights Issue is fully subscribed. SUBSCRIPTION UNDERTAKINGS AND GUARANTEE COMMITMENTS The Company s shareholders Nortal Capital AB (a company controlled by Staffan Persson, a member of the Board of Directors), Danske Capital AB, M2 Capital Management AB and Lars-Johan Jarnheimer who jointly represent approximately 18 per cent of the shares and votes, have undertaken to subscribe for their respective pro rata share in the Rights Issue corresponding to a total of 18 per cent of the Rights Issue. Nortal Capital AB and Danske Capital AB will be paid the same commission as the other guarantors. Furthermore a consortium of qualified external Swedish investors have agreed, through guarantee commitments, to subscribe for new ordinary shares in the Rights Issue that have not been subscribed for with or without preferential rights, corresponding to approximately 82 per cent of the Rights Issue. The Rights Issue is thus fully guaranteed through subscription undertakings and guarantee commitments. CONVERTIBLE BOND ISSUE In addition to the rights Issue, the Eniro s Board of Directors decided on 5 February 2015 on a convertible bond issue subject to EGM approval. The Board of Directors' decision was approved at the EGM on 9 March Through the convertible bond issue, the Company issues a convertible loan for a principal amount of SEK 500 million through the convertible issue. The convertible issue has been directed to and placed with a number of Swedish and international institutional and qualified investors. The commitment is subject to the completion of the Rights Issue, on the existing term loans not being declared due and payable or the amended agreement with the bank syndicate not being terminated. The subscription price is 95 per cent of the convertibles' principal amount, which means that the Company will receive SEK 475 million in proceeds before issue costs. The term of the loan is for five years with a maturity date on 14 April In accordance with the conditions determined on the date of the resolution, the conversion price initially amounts to SEK 1.95, and the annual interest to 6 per cent, to be paid semi-annually in arrears. DILUTION ETC. With the assumption that the Rights Issue is fully subscribed, this will mean that the number of ordinary shares will increase from 101,880,740 to 407,522,960. For shareholders who do not subscribe for ordinary shares in the Rights Issue, there will thus be a dilution effect of a maximum total of 305,642,220 new ordinary shares, corresponding to approximately 75 per cent. In the event of conversion of all convertibles in the convertible bond issue, a further 256,410,256 shares in Eniro will be issued (assuming that conversion occurs at the initial conversion price), corresponding to a further dilution of approximately 39 per cent. The convertible terms include recalculation terms that may lead to changes in the additional number of shares from conversion. For more information see the section "The share, share capital and ownership structure Convertibles". For shareholders who do not subscribe for new ordinary shares in the Rights Issue, there will thus, conditional on full conversion of the convertibles in the convertible bond issue, be a dilution effect of a maximum of 562,052,476 new ordinary shares, corresponding to approximately 85 per cent. Shareholders who do not participate in the Rights Issue will have their shareholdings diluted, but have the opportunity to compensate for the dilution due to the Rights Issue by selling their subscription rights on Nasdaq Stockholm no later 22 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

23 than 26 March Total issue costs are estimated to approximately SEK 41 million for the Rights Issue and approximately SEK 11 million for the convertible issue. 1 Shareholders of ordinary shares in Eniro are hereby invited to subscribe with preferential right for new ordinary shares in Eniro in accordance with the terms set out in this Prospectus. Stockholm 13 March 2015 Eniro AB (publ) The board 1 The issue costs for the Rights Issue include, inter alia, compensation to the issue guarantors and certain major shareholders which have entered into subscription undertakings, amounting to approximately SEK 23 million in total. In addition to the issue costs for the convertible issue, it should be noted that the convertibles have been issued at a subscription price of 95 per cent of the nominal amount of the convertibles, which entails a discount of SEK 25 million in total. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 23

24 BACKGROUND AND REASONS Background and reasons The media market has changed considerably in recent years. The digital marketing segment has grown rapidly, and is currently representing more than one third of the advertising market in Scandinavia. Eniro has been early in the digital transition. From being a catalogue company, the Company today offers a complete digital product range where digital segments represented 88 per cent of total advertising revenues in The Company has approximately 8 million unique visitors on Eniro's sites every week and over 250,000 customers that have chosen to increase visibility in Eniro's different marketing channels. During the fall of 2014, Eniro went through a leadership change and the new management has determined a strategic approach with three clear focus areas, as described on pages The ambition is also to make Eniro's products even more attractive and create a more customer- and market oriented sales organization. Eniro will work more clearly with business development and focus on related services that complement and add value to the current local search offerings. Together with Eniro's unique and extensive local database, the 1,300 person strong sales force and well-known brands, this provides potential to create additional business opportunities in the growing digital media market and increase profitability. In parallel with the work to strengthen the position in Local Search, the Company is handling the shrinking but continuously profitable Print and Voice segments. At the end of 2014, after a SEK 1.3 billion reduction of debt during the last three years Eniro's net debt amounted to approximately SEK 2.2 billion. During the same period, Eniro has put a strong focus on optimizing the cost structure and has implemented cost savings exceeding SEK 900 million. Despite these initiatives, the Company has a high net debt level in relation to the Company s current profitability. The Company does not have sufficient working capital to cover the current needs during the twelve months as from the date of this Prospectus. As part of the review of the Company's capital structure, Eniro has agreed on amendments to the loan agreement with the bank syndicate, subject to completion of the issuances. Among other things, the new agreement means an extension of the maturity and a significantly lower amortization rate, which provides greater financial flexibility and discretion. Due to these circumstances, the Board of Directors of Eniro has decided, subject to EGM approval, on a fully guaranteed rights issue of ordinary shares of approximately SEK 458 million and a placed directed convertible bond issue in the principal amount of SEK 500 million. 2 The EGM resolved to approve the Board of Directors decision on 9 March The aggregate issue proceeds is SEK 933 million before issuance costs, whereof at least SEK 650 million will be applied towards repayment the Company's bank debt. The purpose of the issuances is to amortize on the bank loans and to create a greater financial flexibility to realize the Company's strategy. Thus, additional value will be created for the Company's shareholders and other stakeholders. The Board of Directors of Eniro is responsible for the content of this Prospectus. It is hereby declared that the Board of Directors of Eniro has taken all reasonable precautions to ensure that the information in the Prospectus, to the best knowledge of the Board of Directors, corresponds to the actual facts and that contains no omission likely to affect its import. Solna 13 March 2015 Eniro AB (publ) The board 2 The subscription price is 95 per cent of the nominal amount of the convertibles which entails that the Company will be provided SEK 475 million before issue costs. 24 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

25 TERMS, CONDITIONS AND INSRUCTIONS Preferential right and subscription right The Rights Issue comprises a maximum of 305,642,220 new ordinary shares. Those who on the record date, 12 March 2015, are registered as holders of ordinary shares in Eniro have preferential rights to subscribe for new ordinary shares in the Rights Issue. Those who on the record date are registered as holders of ordinary shares in Eniro receive three (3) subscription rights for every existing ordinary share in Eniro. One (1) subscription right entitles to one (1) new ordinary share. Provided that all new ordinary shares are subscribed for in the Rights Issue, the number of ordinary shares in the Company will increase from 101,880,740 to 407,522,960, corresponding to an increase of 300 per cent. For existing holders of ordinary shares who do not participate in the Rights Issue there will be a dilution effect corresponding to approximately 75 per cent of the total number of ordinary shares and votes in the Company after the Rights Issue. Holders of ordinary shares who choose not to participate in the Rights Issue may be financially compensated for the dilution effect by selling their subscription rights. Subscription price The new ordinary shares in Eniro are issued at a subscription price of SEK 1.50 per new ordinary share. No commission is charged. Record date The record date at Euroclear for determining who is entitled to receive subscription rights in the Rights Issue is 12 March Ordinary shares in Eniro were traded exclusive of the right to participate in the Rights Issue from and including 11 March The last day of trading in ordinary shares in Eniro including the right to participate in the Rights Issue was 10 March Subscription period Subscription for new ordinary shares takes place during the period from and including 16 March 2015 up to and including 30 March Eniro s Board of Directors is entitled to extend the subscription period which when applicable will be announced through a press release as soon as possible after such a decision has been made. A subscription for new ordinary shares on the basis of subscription rights is irrevocable and shareholders cannot cancel or modify such a subscription for new ordinary shares. Issue statement DIRECTLY REGISTERED SHAREHOLDERS A pre-printed issue statement with an attached payment form will be sent to directly registered holders of ordinary shares and representatives of holders of ordinary shares who on the record date are registered in the share register kept by Euroclear on Eniro's behalf. The issue statement sets forth the number of subscription rights received and the total number of new ordinary shares that can be subscribed for by virtue of the subscription rights. No securities notification will be sent out regarding the registration of subscription rights on securities accounts. Those who in connection with the share register are included in the specific list of pledge holders and trustees will not receive the issue statement but are informed separately. NOMINEE-REGISTERED SHAREHOLDINGS Shareholders whose holding is nominee-registered with a bank or other nominee do not receive the issue statement. Subscription and payment for new ordinary shares that are subscribed with subscription rights (subscription with preferential right) should instead be made through the respective nominee and in accordance with instructions from the nominee in question or, if the holding is registered with more than one nominee, through each of these. SHAREHOLDERS REGISTERED IN CERTAIN UNAUTHORISED JURISDICTIONS The allotment of subscription rights and issue of new ordinary shares by exercise of subscription rights to persons who are resident in countries other than Sweden may be affected by securities legislation in such INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 25

26 countries. Consequently, subject to certain exceptions, shareholders whose existing ordinary shares in Eniro are directly registered in securities accounts and the registered addresses are in Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa, the USA, or any other jurisdiction in which it would not be permitted to offer subscription rights or new ordinary shares will not receive subscription rights or be allotted to subscribe for new ordinary shares. The subscription rights that would otherwise have been delivered to these shareholders will be sold and the proceeds, less deduction for costs, will be paid to such shareholders. Amounts of less than SEK 100 will not be paid out. Trading in subscription rights Trading in subscription rights takes place on Nasdaq Stockholm during the period from and including 16 March 2015 up to and including 26 March 2015 under the symbol ENRO TR. SEB and other securities institutions with the required licenses are available for brokerage services in connection with the buying and selling of subscription rights. When subscription rights are sold, both the primary and the subsidiary preferential rights are transferred to the acquirer of the subscription rights. The ISIN code for subscription rights is SE Subscribing for new ordinary shares with subscription rights Subscription of new ordinary shares with subscription rights will take place during the period from and including 16 March 2015 up to and including 30 March Upon expiry of the subscription period, unexercised subscription rights will become invalid and will therefore have no value. After 30 March 2015, unexercised subscription rights will be removed from the holder's securities account, without notice from Euroclear. In order for the value of subscription rights not to be lost, the holder must either: exercise the subscription rights to subscribe for new ordinary shares no later than 30 March 2015, or in accordance with instructions from the subscriber's nominee, or sell the subscription rights that are not to be exercised no later than 26 March SUBSCRIPTION BY DIRECTLY REGISTERED SHAREHOLDERS Subscription supported by subscription rights is effected by means of simultaneous cash payment, either using the pre-printed payment form provided or by the use of a special subscription form in accordance with one of the following alternatives: The payment form shall be used if all subscription rights according to the issue statement from Euroclear are to be exercised. No additions or changes may be made to the payment form. The subscription form named "Subscription for shares with subscription rights" shall be used if the subscription rights have been bought, sold or transferred from another securities account, or if for any other reason the number of subscription rights differs from what is stated on the pre-printed issue statement. When the duly filled in subscription form is submitted, payment shall be made for the new ordinary shares being subscribed for; this may be done in accordance with other payments using bankgiro, for example by way of internet bank, giro transfer or through a bank branch office. Subscription forms in accordance with above may be ordered from SEB during office hours on telephone: The subscription form must be received by SEB no later than 30 March DIRECTLY REGISTERED SHAREHOLDERS WHO ARE NOT RESIDENT IN SWEDEN ELIGIBLE FOR SUBSCRIBTION FOR NEW ORDINARY SHARES WITH SUBSCRIPTION RIGHTS Directly registered shareholders who are not resident in Sweden and are entitled to subscribe for new ordinary shares with subscription rights and who are not subject to the restrictions described above under the heading "Shareholders registered in certain unauthorised jurisdictions", but who are unable to use the pre-printed payment form, may pay in SEK through a foreign bank in accordance with the instructions below: Address: SEB Emissioner RB Stockholm IBAN number: SE Account number: BIC: ESSESESS 26 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

27 The subscriber's name, address, securities account number and payment identity stated on the issue statement must be quoted. The last date for payment is 30 March Payment shall be made in accordance with the above instructions, however, the payment identity from the subscription form shall be stated. The subscription form must be received by SEB at the address above no later than 30 March NOMINEE-REGISTERED SHAREHOLDERS Nominee-registered ordinary shareholders who wish to subscribe for new ordinary shares supported by subscription rights must apply for subscription in accordance with the instructions from their nominee. Paid subscribed shares After payment and subscription, Euroclear will distribute a securities notification to confirm that paid subscribed shares have been registered on the securities account. The newly subscribed ordinary shares are entered as paid subscribed shares on the securities account until the new ordinary shares have been registered with the Swedish Companies Registration Office. It is expected that new ordinary shares subscribed for with subscription rights will be registered with the Swedish Companies Registration Office on or about 20 April The paid subscribed shares will then be re-registered as ordinary shares. No securities notification will be issued in connection with this re-classification, which is expected to occur on or about 30 April TRADING IN PAID SUBSCRIBED SHARES Trading in paid subscribed shares is expected to take place on Nasdaq Stockholm during the period from and including 16 March 2015 up to including 24 April 2015 under the symbol ENRO BTA. SEB and other securities institutions with the required licenses will provide brokerage services in connection with the buying and selling of paid subscribed shares. The ISIN code for the paid subscribed shares is SE Subscribing for ordinary shares without subscription rights If not all ordinary shares are subscribed for with subscription rights (primary preferential right), the Board of Directors will decide on allotment of ordinary shares subscribed for without subscription rights. DIRECTLY REGISTERED SHAREHOLDERS AND OTHERS Application for subscription for ordinary shares without subscription rights must be made on the special subscription form, called "Subscription of shares with subsidiary preferential rights or without subscription rights". More than one subscription form may be submitted, but only the most recently dated subscription form will be considered. Subscription forms may be obtained from one of SEB's offices in Sweden or SEB's website, or from Eniro's website, The subscription form may be sent to SEB, Emissioner RB6, Stockholm or handed in at any of SEB's offices in Sweden. The subscription form must be received by SEB no later than 30 March NOMINEE-REGISTERED SHAREHOLDINGS Subscription for new ordinary shares without subscription rights shall be made to the respective nominee and in accordance with instructions from the nominee or, if the holding is registered with more than one nominee, through each of these. ALLOTMENT OF NEW ORDINARY SHARES SUBSCRIBED FOR WITHOUT SUBSCRIPTION RIGHTS If not all shares are subscribed for with the subscription rights (primary preferential right), the Board of Directors shall decide on allotment of ordinary shares subscribed for without subscription rights. The new ordinary shares will be allotted in the following order: Firstly, shares that have not been subscribed by means of primary preferential right will be offered to all shareholders for subscription (subsidiary preferential right). If the number of shares offered is insufficient for the subscription by subsidiary preferential right, the shares will be distributed between subscribers in relation to the total number of shares in the Company they already hold, regardless of whether their shares are common or preference shares. To the extent this is not possible allocation will be made through drawing of lots. Secondly, shares may be allotted to other persons who have registered for subscription of ordinary shares without subscription rights and, in case of oversubscribtion, pro rata in relation to the number of ordinary shares stated in the subscription and, if this cannot be achieved, through drawing of lots. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 27

28 Finally, any remaining shares will be allocated to persons who guaranteed the issue according to agreement with the Company. As a confirmation of allocation of new ordinary shares subscribed for without subscription rights, a settlement note will be sent to the subscriber or nominee. Subscribed and allotted new ordinary shares must be paid for in cash on the settlement date in accordance with the instruction on the settlement note, on or about 14 April Shareholders whose holdings are nominee registered will receive confirmation of allotment in accordance with the procedure of the respective nominee. No confirmation will be sent to those who are not allotted new ordinary shares. Subscription for new ordinary shares is binding. If payment is not completed when due, the new ordinary shares will be allotted to others. In the event that the sales price is lower than the subscription price, the person who was initially allotted the new ordinary shares is responsible for paying the entire or part of the difference. The new ordinary shares subscribed for without subscription rights will be delivered as soon as the required registration has taken place with the Swedish Companies Registration Office. Registration is expected to take place on or about 20 April As a confirmation that shares have been included in the securities account, a securities notification will be sent to the directly registered shareholder or nominee. Right to dividend The new ordinary shares entitle the holder to dividend for the first time on the first record date for dividend that occurs immediately following the registration of new ordinary shares with the Swedish Companies Registration Office. Announcement of the outcome of the Rights Issue The preliminary subscription results from the Rights Issue are expected to be announced on or about 2 April 2015 through a press release from Eniro. The final subscription results are expected to be announced on or about 10 April 2015 through a press release from Eniro. Trading in new ordinary shares Eniro's ordinary shares are traded on Nasdaq Stockholm. After the Swedish Companies Registration Office has registered the shares, these will also be traded on Nasdaq Stockholm. The first day of trading in new ordinary shares that are subscribed for with subsidiary preferential rights or without subscription rights is estimated to be 28 April Other information Eniro is not entitled to revoke the Rights Issue. In the event that a larger amount than necessary has been paid in by a subscriber for new ordinary shares, Eniro will ensure that the excess amount is repaid. No interest will be paid on the excess amounts. Subscription for new ordinary shares, whether with the use of subscription rights or otherwise, is irrevocable and subscribers for new ordinary shares cannot withdraw or change such a subscription for new ordinary shares, unless otherwise follows from this Prospectus or applicable law. Incomplete or incorrectly completed subscription forms may be rejected. If the subscription payment is paid too late, is insufficient or is paid in an incorrect manner, the subscription application may be rejected. Payments submitted will in this case be refunded. No interest will be paid for such payments. Questions regarding the Rights Issue will be answered SEB during office hours: telephone Estimated schedule First day of trading in shares excluding subscription rights 11 March 2015 Record date for participation in the Rights Issue 12 March 2015 Subscription period starts 16 March 2015 Trading in subscription rights starts 16 March 2015 Trading in paid subscribed shares starts 16 March 2015 Last day of trading in subscription rights 26 March 2015 Subscription period ends 30 March 2015 Final subscription results from the Rights 10 April 2015 Issue expected to be announced Last day of trading in paid subscribed shares 24 April INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

29 How to proceed: Terms Subscription price Record date for participation in the Rights Issue Subscription period Trading in subscription rights For each share in Eniro you will receive three (3) subscription rights. Each subscription right entitles to subscribe for one (1) new ordinary share SEK 1.50 per ordinary share 12 March March 30 March March 26 March 2015 Subscription for new ordinary shares with subscription rights 1. YOU WILL BE ALLOTTED SUBSCRIPTION RIGHTS For every ordinary share in Eniro that you hold on 12 March 2015 you receive three (3) subscription rights 1 ordinary share in Eniro 2. HOW TO USE THE SUBSCRIPTION RIGHTS One (1) subscription right + SEK 1.50 gives one (1) new ordinary share in Eniro 1 subscription right +SEK subscription rights 1 new ordinary share 3. ARE YOU A DIRECTLY REGISTERED SHAREHOLDER OR DO YOU HAVE THE SHARES WITH A MANAGER? If you are exercising all the subscription rights, use the pre-printed payment form from Euroclear. You have a securities account (i.e. are directly registered) and are resident in Sweden If you have bought, sold or transferred any subscription rights to or from your securities account, use the special subscription form that is distributed with the issue statement. The subscription form can also be obtained from SEB: telephone Payment is made according to the instructions on the subscription form. You have a securities account (i.e. are directly registered) and are not resident in Sweden 3 Contact SEB for information about subscription and payment and about the restrictions that apply in certain jurisdictions. You have a custody account (i.e. you have a nominee) If you have your shares in Eniro in one or more custody accounts with a bank or securities institution, you can obtain information from your nominee(s) about the number of subscription rights you have received. Follow the instructions from your nominee(s) Subscription for ordinary shares with subsidiary preferential right or without preferential right (by shareholders and others) 4 You are a directly registered shareholder Use the special subscription form. The subscription form can be ordered from SEB: telephone You have a depository (i.e. you have a nominee) Subscription and payment must be through the nominee. Follow the instructions from your nominee(s). 5 3 Note that certain rules apply to shareholders resident in the USA and certain other jurisdictions. See "Shareholders registered in certain unauthorised jurisdictions in the section Terms, conditions and instructions. 4 Allotment will be in accordance with what is stated under "Allotment of new ordinary shares subscribed for without subscription rights" in the section "Terms, conditions and instructions". 5 Note that some nominees may have shorter deadlines for applications. Check the instructions from your nominee(s). INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 29

30 MARKET SUMMARY Below is a general description of the Scandinavian, Finnish and Polish search markets, including their driving forces and the competitive landscape that Eniro encounters. Certain market- and industry information in this section come from third parties. Summary of the search market The Scandinavian market for digital marketing continues to grow. Per capita advertising investment is at a high level. The Polish market is also showing stable growth, but from a lower investment level. The areas experiencing the highest growth are mobile advertising, display advertising, keyword marketing and web TV. 30 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

31 Driving forces of the search market Digital marketing accounts for around a third of the media market and has overall seen similar growth in 2014 as in The greatest increase was in mobile marketing, but banner advertising, search word marketing and web-tv also increased. The search market, whatever the channel, is characterised by a high level of competition, rapidly changing user behaviour and a high level of technological innovation. The advertising companies' requirements for effect and clear follow-up are also increasing. A COMPLEX COMPETITIVE PICTURE Eniro s services encounter both direct and indirect competition from companies that offer searchability. At the same time, several competitors are also business partners. The direct competitors are local players, which in Sweden are Hitta, in Norway Opplysningen 1881 and in Poland PKT. Among generic international players are Google and Yahoo, and specialized players in certain areas so-called verticals which are either international players like Tripadvisor or Booking.com, or national players like Sushikartan in Sweden. Google is an example of a company that operates both as a competitor as it moves closer to local search and a partner that uses Eniro to gain access to customers as it does not have its own local sales organization. Apart from the various search companies are various social network sites that are approaching the small and medium-sized companies segment. Their challenge is that they currently do not have own sales structures for penetrating their customer segment. In the market for media investments, Eniro also competes with alternative channels, such as daily newspapers, radio, TV, outdoor advertising, and direct marketing. Operators and other manufacturers of telecom equipment are also players in the market that have many users and a vast amount of information. USERS DRIVE DEVELOPMENT Today s users are engaged in a continuous exchange of information surrounding their own consumption through their social networks. They make purchasing decisions and buy products locally, where they are, and everything is made possible by mobile internet access. The commercial aspects are also growing, since the use of various e-commerce solutions is becoming increasingly common. Prior to a purchase, a search engine is typically a key starting point. More and more users today have a smartphone or tablet, and they know where to search for information about a company, product or service. Users are well-read, and they are not loyal. If they do not find what they are looking for, many will choose another company or brand. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 31

32 One distinct trend is that users today move between different digital devices smartphones, desktop computers and tablets. They expect all types of information to be searchable and accessible on the internet even via mobile devices. Users search needs vary. Some people spend less time searching and are slow to use new technology, while others spend more time searching and embrace new technology. Another search pattern involves finding out what other consumers have bought or asking questions about tips and advice. Other users are hunting for the lowest price, knowledge, or inspiration. KNOWLEDGE GAP AMONG BUSINESSES Users changing search needs are having a major impact on how businesses and advertisers reach various target groups. Aside from broad mass marketing campaigns, niche channels are becoming increasingly important. It is for this reason that businesses are increasingly investing in digital marketing such as web advertising, advertising in digital search services, and keyword advertising. And while the digital media market is opening up new opportunities for businesses to market products and services, the rapid pace of change is presenting challenges. Surveys in Scandinavia indicate that small and medium-sized companies risk falling behind in digital marketing. It is no longer enough for a business to have a website and be searchable. A large knowledge gap currently exists between what businesses believe is important and what users expect. For example, many users expect to find more detailed information about price, product pictures and special offers when they search online. From the advertisers side, studies show that the demands to be able to measure the impact of digital marketing are growing from large as well as from small and medium-sized businesses. TECHNOLOGICAL INNOVATION The development of digital technology is advancing rapidly and creating new opportunities in digital marketing. Automated advertising solutions are one example. Today a business can buy marketing solutions on digital advertising exchanges. By registering certain parameters, a company can automatically buy and sell banner and keyword ads and in such way optimize its marketing based on a set of predetermined options. Ads can also be automatically generated based on a set of selected graphic templates. Another clear trend is that advertising is becoming increasingly data driven. The technology involved in gathering and analysing large volumes of information is creating opportunities to be proactive and adapt advertising content to individual users areas of interest. This means that ads can be more targeted and shown only on sites whose content matches certain keywords. An example is for an ad to be placed in the right context based on the content of a website. Another development is retargeting, where merchants display products based on the user s previous search behaviour. Retargeting is a way of enticing users to return to a web store or website. Based on the user s previous searches, a merchant can display a targeted ad when the user visits another website that is included in the same advertising network. Retargeting does not give businesses new users, but it can help bring a digital transaction to fruition. This is particularly attractive for e- commerce merchants. 32 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

33 The table above is produced internally by the Company. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 33

34 THE COMPANY Eniro in brief Eniro is a leading local search company with activities in Scandinavia, Finland and Poland. The Company has more than 250,000 customers and approximately 1,300 sales representatives. Eniro has a unique database that is continuously refined and updated with relevant content, which the approximately 8 million unique visitors per week use through Eniro s search offering. Eniro has a brand awareness exceeding 90 per cent on all Scandinavian markets and just below 80 per cent in Poland 6 The Company was spun off from Telia in 2000, the share is listed on Nasdaq Stockholm and the head quarter is located in Solna outside Stockholm. Eniro's operating revenues for 2014 amounted to SEK 3,002 million and the number of full-time employees was 2,256 at year end. Important historical events 2000 Eniro AB is created after being hived off from Telia and the Company is listed on OM Stockholmsbörsen O list. Operations in Russia and Germany are acquired. Eniro, in partnership with Ericsson and Telia, becomes the first supplier to offer MPS (mobile positioning services). Eniro becomes Sweden's biggest player in internet advertising The company Respons, with the Swedish number information service and several number information services in Finland, is acquired Strategic decision to focus the business on the Nordic countries and Poland Findexa, the leading Norwegian search company, is acquired The leading Danish search service Krak is acquired and the German operation is disposed of New strategy: From print-dependent to online opportunities New sales concept search opportunities, visibility and leads Offline and online activities in Finland are disposed of or closed down. Product search and other services are launched on new technical platforms Collaboration with Google begins. 6 Source: LynxEye 2014 and Brand Tracking Study, Nepa Research (ages 15-75) 34 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

35 De Gule Sider acquired Eniro disposes of Inform and Scandinavia Online i Denmark. Eniro issues 1,000,000 preference shares amounting to SEK 400 million. Eniro Denmark strengthens its position and its network offerings for sponsored links by acquiring Open AdExchange Collaboration with Google is extended. New long-term financing signed with six banks in Eniro's bank consortium. Amalgamation with 1888 in Norway Eniro disposes of Scandinavia Online AS and InTouch in Norway, Krak Markedsdata in Denmark and Bloggerfy in Sweden. Eniro announces that the Company's financial statements for the fourth quarter of 2013 until the second quarter of 2014 contains accrual errors. Eniro report the pevious CEO Johan Lindgren to the police due to the accrual errors in the Company s financial statements for the fourth quarter 2013 to and including the second quarter Vision, business concept and values VISION Eniro's vision is to be the symbol for Local Search. Eniro has an established position to work with as a foundation to continue developing the best quality and technology for meeting users future needs for local search in Scandinavia, Finland and Poland. BUSINESS CONCEPT Eniro s business concept is the same as when the Company was started more than 130 years ago to provide the best local information and thereby bring buyers and sellers together. Eniro aggregates and processes information from a vast range of information sources, including websites, telecom operators and sales organizations. This information is filtered, sorted and organized in the database, which is Eniro s most important asset. Revenues from Local Search are generated through exposure and rankings from advertisers. VALUES Eniro s three values devoted, perceptive, and reliable are to permeate the entire organization. Devoted entails that Eniro always strive to offer customers and users the best possible solution. Perceptive means that Eniro work according to the needs of the specific target groups by actively listening and having an open dialog. Reliable Eniro will be perceived as being reliable by delivering what we have promised. Goals OPERATIONAL GOALS Eniro s strategy is steered by a set of operational goals for ensuring stability and profitability. Eniro s user benefit is measured in terms of the number of unique visitors to the search sites and their frequency of visits. The goal for 2015 is to both increase the number of visitors to sites and how often the same visitors return to the sites. By adapting the offering to advertisers needs to a greater extent, their exposure will improve. This will be reflected in the level of traffic documented in the effect reports and can be measured in terms of customer satisfaction. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 35

36 The goal for 2015 is to continue to improve customer satisfaction. Another goal is to increase employee satisfaction, which is measured by monitoring staff turnover, among other things. The goal for 2015 is continuously to reduce staff turnover. FINANCIAL GOALS The strategic actions outlined above will lead to improved profitability over time. DIVIDEND POLICY For information about Eniro's dividend policy, see the section The share, share capital and ownership Dividends and dividend policy and page 25 in the annual report Business model Eniro s business model is based on the interaction between users, customers and channels, which are mutually dependent on each other. By providing current and relevant information about customers, the Company attract users, and by providing high user benefit, the Company attracts customers. By staying at the forefront in the development of distribution channels and products, we attract both users and customers. USERS, CUSTOMERS AND CHANNELS Users needs, behaviours and preferences steer Eniro s development, which means that Eniro adapts its development focus accordingly. What is decisive for users is that Eniro s information provides the most relevant search results, is up to date, and has a high level of quality. Eniro s high-quality database includes some 5 million searchable companies, more than 23,000 registered online stores, over 13 million searchable private individuals, more than 1.3 million web addresses and 19 million products. Eniro sells exposure and an effective ranking to hundreds of thousands of customers. Most of them are small and medium sized companies working mainly in a local market, where the professional category is often a stronger search target than the companies own brands. Eniro has approximately 250,000 customers in Scandinavia, Finland and Poland. Sales are conducted by Eniro s approximately 1,300 salespersons, representing one of the largest sales forces in the Nordic region. The work of the field sales force is concentrated on larger customers with more advanced needs, while other customers are contacted by phone. When a contract is nearing renewal, existing customers are contacted mainly by phone and to a decreasing extent by letter. Eniro offers customers a broad presence in the local search market through rankings in Eniro s channels, establishment of company websites, videos, banners, search engine optimization (SEO) and sponsored links on partner sites such as Google and Bing. Eniro distributes information via digital channels, printed directories and by phone. Today the digital channel accounts for approximately 88 per cent of total advertising revenue. 7 The digital search function is backed by a multiscreen solution, so that searches can be performed in the channel that suits the user best. The multiscreen channel consists of Desktop Search, Mobile Search, and Campaign Products. Eniro has well-known brands within all active segments. The mobile search channel is the fastest growing part of Eniro s operations. Printed directories (Print) exist today only locally as a complement to digital search channels and are delivered primarily to targeted groups. The directory information service (Voice), along with more qualified services by phone, will continue to be offered as long as users continue to use the service and it has satisfactory profitability. Eniro's strategy A CLEAR STRATEGIC FOCUS ON LOCAL SEARCHES Eniro has leading positions to work from in its continued development of the best quality and technology to meet the market s future needs for local search services in Scandinavia, Finland and Poland. 7 Excluding Voice 36 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

37 Eniro s strategy is based on its presence in three market segments. (1) Focus is on strengthening the Company s position in Local Search. This will be achieved by offering a superior search experience for users and generating market-leading returns to advertisers. (2) The value of the current search offerings will be enhanced by augmenting them with innovative, complementary services in digital marketing. (3) Parallel with this, the Company will responsibly manage its contracting business in Print and Voice. Eniro s strategic direction in the years immediately ahead will revolve around being even more attractive for users, improving the conditions for advertisers exposure, and creating an internal culture that drives growth in value for users and advertisers alike. GREATER USER BENEFIT Users have high demands on information and use the search sites that offer the most relevant information. Eniro must continuously strengthen content to ensure that it is always relevant for the millions of visitors who use Eniro s sites to search for information every week in the various countries. To more clearly define its market position, going forward Eniro will highlight specially selected search categories, with the goal to be recognized as the most relevant search function in those areas. At the same time, Eniro will offer the industry s best user interface, ensuring that users find it easy to search whether they are using a desktop computer, tablet, or smartphone. Through continued focus on app development, Eniro will consolidate its leading position in Mobile search. To a greater extent than before, Eniro will aspire to engage and inspire users, among other ways by offering realtime information, more images, and a greater array of personal settings. MARKET-LEADING RETURN FOR ADVERTISERS Higher user benefit leads to more traffic, which attracts advertisers. All customers receive effect (ROI) reports that show the traffic generated by Eniro s search services. In this way, customers can see the impact of their marketing and measure the return on their investment. Customers that monitor their marketing impact via Eniro s result reports have a higher repeat purchase rate than those that do not regularly take an interest in their advertising results. Eniro will help customers to a greater extent in seeing the opportunities and impact of their marketing investment. One way Eniro will achieve this is by being more perceptive and improving its dialog with advertisers. By working from individual customers current needs and market situations, Eniro will increasingly focus on guiding its customers through the digital marketing process and offer customized solutions. These can entail, for example, price models, seasonal offers, or specific solutions for selected market segments. Surveys conducted in Sweden by the market research company TNS Sifo in 2014 show that today s users are more tech-savvy than many advertisers. There is a great difference between what consumers are looking for among small and medium-sized businesses, and what these companies offer in terms of search results. For example, users want more detailed information in their product searches mainly regarding price but also more images, consumer reviews, and information on where they can buy the product they are researching. Eniro s platform offers this type of information, among other things through an image gallery. This function is a vital step in an e-commerce solution and enables advertisers to achieve deeper penetration into the user s search and purchase process. INTERNAL CULTURE THAT DRIVES VALUES FOR USERS AND ADVERTISERS A more customer- and market-oriented sales effort requires that the sales force handles a broader product portfolio, which puts higher demands on the competence of Eniro s salespeople. Clear control and monitoring of results will be an increasingly important part of leadership within sales. The management function that was previously established in Denmark has served as inspiration for the sales management that began to be implemented in the other geographic markets in Eniro is working actively to reduce staff turnover. Clear career opportunities, training, and an upgraded competency profile in recruitment are examples of measures that have been taken to further improve employee satisfaction. COMPLEMENTARY SERVICES Eniro will serve its customers as an advisor in their digital marketing. In fulfilling this advisory function, Eniro must offer comprehensive digital services that are relevant for users and customers alike. Solutions will have to include both a packaging of existing products and the resources to offer new services that complement the current portfolio. Eniro s new offerings will include closely related digital solutions that enhance the total value of INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 37

38 customers marketing, and where Eniro either serves as a retailer of external partners products or develops its own services. Eniro will put greater emphasis on business development. The company will channel its own development resources into users experiences of Eniro s search and navigation services. In other areas, Eniro will collaborate with niche entrepreneurs in order to tap into their specialist expertise. Through such partnerships Eniro can integrate third parties technical solutions with Eniro s content, be more flexible, and shorten the time from idea to product launch. Description of Eniro's business areas Eniro's revenue categories are divided into Desktop Search, Mobile Search, Campaign Products, Print and Voice (number information), of which Desktop and Mobile Search account for most of the revenue. Eniro's business areas are divided into Local Search, which includes Desktop Search, Mobile Search, Campaign Products and Print as one area and Voice as the other. Figures and tables in this section are taken from the Company s 2012, 2013 and 2014 annual reports. Operating revenues by category SEK M Local Search* Voice Operating revenues Sweden 1,024 1,281 1, Norway , Denmark Finland Poland Total 2,429 2,899 3, *Local Search includes the operating areas Desktop Search, Mobile Search, Campaign Products and Print 38 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

39 DESKTOP SEARCH Revenue from Desktop search decreased during the year to SEK 1,484 M (1,861), as an ever-greater share of users is migrating to the mobile search channel. Desktop search revenue accounted for 49 per cent (52) of Eniro s total revenue in OPERATIONS Eniro s role is to guide users and businesses in a digital market. This entails making it easy for users to find what they are looking for by connecting them with the right vendor in the local market. Eniro helps users to conduct local searches, no matter where they are at the moment or where they are headed. As an advertiser on Eniro, companies pay for a better ranking and better exposure. The higher up a company is positioned on a hit list and the better it is profiled, the more business can be generated. Advertisers can see the results of their marketing through the effect reports that Eniro provides, which include information about the number of search hits and additional contacts, among other things. Eniro has hundreds of thousands of customers in Sweden, Norway, Denmark and Poland. The primary channels for conducting searches from a desktop computer or tablet are eniro.se, gulesider.no, krak.dk, degulesider.dk, and panoramafirm.pl. In addition to searching for people and companies, it is possible to search for services and products as well as to conduct map searches. Eniro s local search services are among the most highly visited sites in their respective markets. Brand recognition among end users is higher than 90 per cent in Scandinavia and slightly below 80 per cent in Poland. In addition to the local search services, Eniro offers financial search services under the Proff brand on the websites proff.se, proff.no, proff.dk and proff.pl, where users can find official company information, information about a company s board and management, financial information including balance sheets and income statements, and selected key ratios about all stock corporations. FUTURE OUTLOOK In 2014 Eniro conducted efficiency improvement work in its development organization in an effort to accelerate launches of products and services and increase flexibility by working with continuous updates. Going forward, Eniro will strive to enhance the value of advertisers investments by generating additional traffic and clicks to customers. Eniro has opportunities to increase involvement from its large user base and get users to visit the service more frequently. Investments will be made in search logic, content relevance and basic data in an effort to consolidate Eniro s leading position in local search in the respective markets. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 39

40 MOBILE SEARCH Revenue from Mobile search has continued to grow and amounted to SEK 385 M (275) in The share of traffic via smartphones continued to grow sharply and accounted for 31 per cent (23) of total digital use. Mobile search revenue accounted for 13 per cent (8) of Eniro s total revenue in OPERATIONS Eniro s business model in the mobile channel works the same way as for Desktop search. By investing in better rankings and better graphic design, advertisers increase the number of transactions generated via the search service. Searches performed from smartphones continue to grow sharply and are expected to account for half of total searches within the near future. Eniro s Mobile search business includes the mobile responsive versions of eniro.se, gulesider.no, krak.dk, degulesider.dk and panoramafirm.pl, as well as the corresponding mobile applications for ios and Android. FUTURE OUTLOOK Mobile search is a priority area for Eniro. Going forward, Eniro will strive to enhance the value of advertisers investments and generate more traffic and clicks through, among other things, improved user interfaces, a more image-centric service and more advanced search logic. 40 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

41 CAMPAIGN PRODUCTS In the Campaign products segment, Eniro offers complementary advertising solutions via third-party vendors and external networks. Revenue grew 8 per cent in 2014, to SEK 265 M (246). Revenue from Campaign products accounted for 9 per cent (7) of Eniro s total revenue in OPERATIONS Eniro offers its customers a digital presence and advertising both via its own sites and via external partners, such as Google and Bing. Eniro is active on various advertising exchanges for automated advertising solutions. Campaign products are sold by a separate sales force in Denmark and under the Kvasir Media brand in Sweden. In Poland, websites are sold under the Panorama Firm core brand. Eniro helps its customers optimize their searchability and digital presence by offering digital add-on services such as search engine optimization, keyword and banner advertising, and establishment of websites and videos. Through a special customer website, customers have the opportunity to monitor their ads and see the results of their marketing investment. Eniro is an authorized retailer for Google and Bing in Sweden, Norway and Denmark. As a result of these partnerships, the margins for Campaign products are lower than the Group s other revenue areas. Due to low profitability margins, Eniro has discontinued re-selling of Google AdWords to small and medium business. Campaign products are a volume business that requires effective sales and matching processes in order to be able to achieve satisfactory profitability. Revenues are generated when delivery takes place through a keyword click or when a banner ad is shown. Revenues for websites and search engine optimization services are based on a subscription model. FUTURE OUTLOOK Starting in 2015 Eniro will no longer use external vendors to produce websites, but will do so under own management. This measure will lead to improved profitability and higher quality. Going forward, sales of campaign products will increasingly be integrated with Eniro s other digital sales organization. Focus within campaign products will be shifted to digital presence, websites, and banner advertising. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 41

42 PRINT In 2014 Eniro phased out its regional telephone directories in all markets and now offers only local printed directories in Sweden, Norway and Denmark. As a result of this and the declining market, Print revenue continued to decline, to SEK 295 M (517). Print accounted for 10 per cent (14) of Eniro s total revenue in OPERATIONS In recent years Eniro has adapted its business to users changed search behaviour. An ever-growing share of information searches today are performed in digital channels, and the advertising market for printed phone directories has contracted steadily. Eniro offers advertising in local printed directories in Sweden, Norway and Denmark. Advertising in local directories is sold by a separate sales force as a complementary offering to digital advertising packages. Products are sold under the local, well-known brands Din Del in Sweden, Ditt Distrikt in Norway, and Mostrup and Den Røde Lokalbog in Denmark. Studies show that there is still demand for local directories, mainly among people over 50 years 8. Eniro targets advertisers who direct their marketing specifically to this target group. FUTURE OUTLOOK Eniro will continue to publish printed local directories as long as they remain in demand among the Company s users and customers, and satisfactory profitability can be maintained. Operations will be adapted on a continuous basis to reduce overheads. Eniro expects revenues from Print to decrease by SEK 37 M in 2015 as a result of changed publication dates. 8 Source: Sweden, TNS Sifo, Norway, Forbrukermedia, Denmark, TNS Gallup 42 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

43 VOICE The market for personal directory information services continued to contract during the year as a result of greater use of the Internet via smartphones. In line with Eniro s expectations, revenue continued to decrease, to SEK 573 M (689). Profitability remained satisfactory, and EBITDA amounted to SEK 237 M (251). OPERATIONS With the rise of digitization and growing use of smartphones to perform online searches, the market for directory information services has decreased. Despite this directory information will continue to be of interest for various user groups in the foreseeable future. Eniro provides directory information services by voice and text message (SMS) in Sweden, Finland and Norway. In Sweden Eniro is the market leader with its service, while Eniro s phone operators handle incoming calls from other companies offering phone-based directory information services. In Finland, in addition to the directory information service , Eniro has a small call centre that provides switchboard and customer service operations. In Norway, Eniro operates the 1880 and 1888 directory information services. Eniro strives to offer a personal, knowledgeable and engaged directory information service. Customer surveys indicate that Eniro s level of service is high and the offer is appreciated by users. Over time, Eniro has developed its traditional directory information service to also encompass route descriptions, map links, business hours and other searchable information. However, in Sweden the Post and Telecom Authority (PTS) has limited the scope of services that may be provided through an injunction prohibiting responses to questions of a strictly knowledge or entertainment character, starting in FUTURE OUTLOOK The volume of incoming calls and requests via text message is expected to continue falling, although to a lesser extent than previously. The service of providing information by text message is expected to disappear within a few years. The commercial impact of PTS s injunction is considered to be negligible. Despite the drop in revenue, the Voice revenue category is expected to continue to make a significant contribution to Eniro s profitability and cash flow. The channel is expected to continue to have a long life and stay relevant as long as Eniro s customers and users perceive the service as attractive and as long as satisfactory profitability can be achieved. The ability to continue carrying out price increases to counter lower volumes is judged to be low. Operating revenue, MSEK INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 43

44 SELECTED FINANCIAL INFORMATION The overview regarding the financial years 2012, 2013 and 2014 is derived from Eniro s annual reports. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as endorsed by the EU, as well as with applicable stipulations in the Swedish Annual Accounts Act and Swedish Financial Reporting Board Recommendation RFR 1 Supplementary Accounting Policies for Groups. The annual reports and consolidated financial statements for 2012, 2013 and 2014 have been audited by the Company s auditors. In August 2014, the Board of Directors commissioned an investigation to validate the Group s accounts as of the fourth quarter of The investigation showed primarily accrual inaccuracies, entailing that revenues have been recognized earlier than they should have. The accrual inaccuracies pertained to Desktop Search and Mobile Search revenue categories within the Local Search operating segment and stem from discounts offered to customers. These discounts were incorrectly allocated only to revenue accrued over time (subscription fees). The discounts were not allocated to the portion of revenue recognized immediately (the services provided at the time of sale). As a result the amount recognized at the point of sale was too high. The incorrect accounting of discounts affected the financial statements for the fourth quarter of 2013 through the second quarter of Consequently, the 2013 figures have been recalculated and do not agree with what was stated in the 2013 annual report. In terms of the figures for 2013, reference is made to the figures as presented in the 2014 annual report. The accounts for 2012 were not affected by the aforementioned accrual inaccuracies but have been recalculated due to changes in accounting principles with regards to pensions. This section should be read in conjunction with the section Comments on selected financial information, Eniro s financial statements 2012, 2013 and 2014, which are incorporated in this prospectus by reference (see Documents incorporated by reference in the section Legal issues and other information ). All reports are available on Eniro s webpage Condensed income statement SEK M Operating revenue 3,002 3,588 3,999 Production costs Sales costs -1,055-1,140-1,288 Marketing costs Administration costs Product development costs Other revenue/costs Impairment of assets -1, Operating income -1, Net financial items Income before tax -1, Income tax Profit for the period -1, INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

45 Condensed balance sheet SEK M Assets Intangible assets 5,108 6,948 7,330 Other non-current assets Other current receivables Cash and cash equivalents Total assets 6,176 8,174 8,944 Shareholders equity and liabilities Shareholders equity (owners of the Parent Company) 1,737 3,598 3,543 Non-controlling interests Long-term borrowing 1,767 2,115 2,527 Non-current non-interest-bearing liabilities Short-term borrowing Current non-interest-bearing liabilities 1,134 1,381 1,631 Total shareholders equity and liabilities 6,176 8,174 8,944 Condensed statement of cash flows SEK M Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Cash flow for the period Cash and cash equivalents at start of the period Exchange rate differences in cash and cash equivalents Cash and cash equivalents at end of the period Key ratios EBITDA, SEK M Adjusted EBITDA, SEK M Operating margin - EBITDA 21% 22% 24% Operating margin - EBIT -48% 13% 12% Average shareholders equity, SEK M 3,021 3,607 3,308 Return on shareholders equity -55% 5% 7% Interest-bearing net debt, SEK M 2,208 2,340 2,704 Debt/equity ratio Equity/assets ratio 29% 45% 40% Interest-bearing net debt/adjusted EBITDA 3.3x 2.6x 2.8x INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 45

46 Definitions of key ratios EBITDA Operating income before depreciation, amortization and impairment losses. ADJUSTED EBITDA EBITDA excluding restructuring costs and other items affecting comparability. OPERATING MARGIN - EBITDA EBITDA divided by operating revenue. OPERATING MARGIN - EBIT EBIT divided by operating revenue. AVERAGE SHAREHOLDERS EQUITY, SEK M Calculated as average shareholders equity attributable to owners of the Parent Company per quarter, based on the opening and closing balance for each quarter. RETURN ON SHAREHOLDERS EQUITY Net income for the period divided by average shareholders equity attributable to owners of the Parent Company. INTEREST-BEARING NET DEBT Borrowings excluding interest rate derivatives less cash and cash equivalents and interest-bearing assets. DEBT/EQUITY RATIO Interest-bearing net debt divided by shareholders equity, including holdings with a controlling influence. EQUITY/ASSETS RATIO Shareholders equity including non-controlling interests divided by total assets. INTEREST-BEARING NET DEBT/ADJUSTED EBITDA Interest-bearing net debt divided by EBITDA. 46 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

47 COMMENTS ON SELECTED FINANCIAL INFORMATION Comparison between January 1 - December 31, 2014 with January 1 - December 31, 2013 PERFORMANCE 2014 The Eniro Group s total operating revenue in 2014 amounted to SEK 3,002 M (3,588), a decrease of 16 per cent (-10). Revenue decreased organically by 13 per cent (-9). Operating revenue from Eniro s multiscreen channels (Desktop search, Mobile search and Campaign products) decreased by 10 per cent, to SEK 2,134 M (2,382 9 ). Organically, revenue decreased by 8 per cent (-1). Multiscreen revenue as a share of total advertising revenue (Local Search) was 88 per cent (82). Operating revenue from Desktop search decreased by 20 per cent to SEK 1,484 M (1,861 9 ). Revenue decreased organically by 19 per cent (-8 9 ). Revenue from Mobile Search increased by 40 per cent to SEK 385 M (275), with 39 per cent organic growth in revenue (90). Campaign products showed an 8 per cent increase in revenue, to SEK 265 M (246). Organic revenue growth was 22 per cent (7). Operating revenue from Print and Voice continued to decline during the year as a result of the shift towards digital search channels. Operating revenue from Print amounted to SEK 295 M (517 9 ), a decrease of 43 per cent. During the third quarter of 2014, Eniro published its last printed regional directory Gula Sidorna in Sweden. Local directories, which continue to have high use and a stabilized rate of decline, accounted for 89 per cent (65) of Print revenue, which decreased organically by 33 per cent (-29). Operating revenue for Voice decreased by 17 per cent to SEK 573 M (689). Market volumes for directory information services continued to contract as a result of increased digitization. Organically, the revenues declined by 18 per cent (-15). EBITDA amounted to SEK 631 M (777), corresponding to a margin of 21.0 per cent (21.7). EBITDA is broken down as follows: SEK 474 M (598) for Local Search, SEK 237 M (251) for Voice, and SEK -80 M (-72) for other Group functions. Earnings for the year were negatively affected by weak sales performance, mainly in Sweden and Norway. The capital gains on the sales of InTouch, Scandinavia Online AS, Krak Markedsdata and Bloggerfy AB had a positive impact on earnings by SEK 69 M (-1). Adjusted EBITDA, excluding restructuring costs and other items affecting comparability, amounted to SEK 675 M (884), corresponding to a margin of 22.5 per cent (24.6). Restructuring affected adjusted EBITDA positively by SEK 63 M (106). Other items affecting comparability had a net negative impact of SEK 19 M (1), mainly attributable to the capital gains described above, and provisions for severance pay and synthetic shares. Operating income was SEK -1,441 M, compared with SEK 462 M a year ago. Operating income was charged with impairment losses totalling SEK 1,803 M (104). During the third quarter, impairment testing was conducted of the Group s intangible assets with indefinite useful life. The impairment losses that were subsequently recognized pertained to Local Search, in the amount of SEK 1,235 M (13); Voice, for SEK 562 M (91); and capitalized IT projects, for SEK 6 M. The impairment in Local Search pertained mainly to goodwill attributable to the acquisition of the Norwegian company Findexa in Of the goodwill impairment in Voice, SEK 429 M (0) is attributable to Sweden, SEK 67 M (91) to Norway, and SEK 66 M (0) to Finland. The impairment losses were recognized against the background of the declining market trend that is expected to continue in the Voice segment. Net financial items amounted to SEK -153 M (-142). Net financial items were positively affected by lower interest rates and a lower level of debt, and by exchange rate differences of SEK 7 M (39). 9 In previous years some products including in Desktop Search and Print have been presented in their own category Other Products. As of the 2014 annual financial statements, these are allocated to the respective category. This means that SEK 42m (96) has been removed from Other Products, of which SEK 38m (87) was included in Desktop Search and SEK 4m (9) in Print. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 47

48 Income before tax for the year was SEK -1,594 M (320). The reported tax cost for the year was SEK -68 M (-141). The effective tax rate for the year was 4.3 per cent (44.1). Income for the year was SEK -1,662 M (179), of which SEK -1,664 M (177) is attributable to shareholders of the Parent Company. FINANCIAL POSITION Total assets decreased by 24 per cent to SEK 6,176 M (8,174). The Group s intangible assets amounted to SEK 5,108 M (6,948), of which goodwill accounted for SEK 4,051 M (5,763) after recognition of SEK -1,781 M (103) in goodwill impairment. Of the year s goodwill amortization, SEK 1,235 M is attributable to the 2005 acquisition of Findexa, which was amortized due to negative market development. In addition, goodwill attributable to the Voice operations was amortized with in total SEK 562 M due to that a continued declining market trend is perceived. Brands with an indefinite useful life amounted to SEK 119 M (112). Brands with a finite useful life decreased to SEK 673 M (804). Total amortization of intangible assets amounted to SEK 132 M (61), of which the Gule Sider and Ditt Distrikt brands accounted for SEK 92 M (23). Tangible assets in the Group, pertaining to equipment, amounted to SEK 21 M (40). Investments in intangible assets and in tangible assets, mainly pertaining to product development, amounted to SEK 139 M (157) during the year. Trade accounts receivable amounted to SEK 353 M (430). The decrease is attributable to lower sales. Shareholders equity decreased by SEK 1,869 M, mainly attributable to the year s negative result of SEK -1,662 M (179), to SEK 1,797 M (3,666) at year-end. No dividend was paid to holders of ordinary shares during the year. The dividend for holders of preference shares that was approved by the 2014 Annual General Meeting amounted to SEK 48 M (48). As per December 31, 2014, shareholders equity per share was SEK (35.56), and the equity ratio was 29 per cent (45). The Group s interest-bearing net debt amounted to SEK 2,208 M (2,340). At year-end, borrowings amounted to SEK 2,392 M (2,567), a decrease of SEK 175 M, where loan repayment during the year totalled SEK 284 M. Repayment as per December 31, 2014, was reduced by SEK 90 M to SEK 97 M as per an agreement with the bank syndicate. Interest-bearing net debt in relation to adjusted EBITDA was 3.3 (2.6). Outstanding debt at yearend under existing credit facilities was NOK 356 M (452), DKK 71 M (90) and SEK 1,956 M (1,943). As per December 31, 2014, Eniro had an unutilized credit facility of SEK 53 M (133). Cash and cash equivalents, and unutilized credit facilities amounted to SEK 111 M (246). Eniro s pension obligations have increased by SEK 328 M to SEK 601 M (273). The increase is mainly attributable to a change in the discount rate that is used to calculate the pension liability in Sweden from 4.2 per cent at year-end 2013 to 2.5 per cent in connection with changed interest rates for Swedish mortgage bonds. The actuarial loss that is reported in other comprehensive income amounted to SEK -297 M, compared with an actuarial gain of SEK 233 M in the preceding year. Deferred income amounted to SEK 583 M (620), a decrease of 6 per cent, mainly attributable to lower sales. Advance payments are made in the Desktop and Mobile Search segments, as customers pay in advance for an annual subscription, and also in Print in Sweden, where customers pay in advance, but the revenue is not recognized until the directories have been printed and distributed. CASH FLOW Operating cash flow decreased to SEK 151 M (329), mainly owing to the lower earnings. Cash flow from operating activities, excluding changes in working capital, amounted to SEK 427 M (572). Cash flow was negatively affected by changes in working capital in the amount of SEK -139 M (-91). Working capital was positively affected by a lower level of trade receivables, but the net effect was negative due to an even lower level of trade payables, deferred income, and accrued staff costs. Cash flow from investing activities was SEK - 75 M (-119). The lower cash flow compared with the preceding year is attributable to the proceeds received from the sales of primarily Scandinavia Online AS and InTouch. Cash flow from financing activities was SEK -271 M (- 440). This year s lower level is mainly attributable to a lower net change in loan debt, by SEK -206 M (-342). In addition, SEK -7 M pertained to payment of a dividend to the minority owners of 1880 Nummeropplysning AS. 48 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

49 Long-term investments increased by an additional SEK -10 M (-50) and pertain to pledged bank funds for continued credit insurance with PRI Pensionsgaranti. Cash flow for the year was SEK -58 M (-78). INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 49

50 Comparison between January 1 - December 31, 2013 with January 1 - December 31, 2012 PERFORMANCE 2013 The Eniro Group s total operating revenue for 2013 amounted to SEK 3,588 M (3,999), a decrease by 10 per cent (-7). Revenue decreased organically by 9 per cent (-10). Operating revenue from Eniro s multiscreen channels (Desktop Search, Mobile Search and Campaign products) decreased by 3 per cent to SEK 2, M (2,358). Organic growth displayed a decrease of 1 per cent (3). Operating revenue from Desktop Search decreased by 10 per cent and amounted to SEK 1, M (1,977); the revenue decreased organically by 9 10 per cent (-3). Revenue from Mobile Search increased by 87 per cent to SEK 275 M (147); revenue increased organically by 90 per cent (116). Campaign products increased by 5 per cent to SEK 246 M (234); revenue increased organically by 7 per cent (26). Other products increased by 27 per cent to SEK 97 M (132); revenue increased organically by 1 per cent (-14). Operating revenue from Print amounted to SEK M (740), a decrease of 31 per cent. Print decreased organically by 29 per cent (-33). Operating revenue for Voice decreased by 10 per cent to SEK 689 M (769). Organic revenue decreased by 15 per cent (-13). EBITDA amounted to SEK 777 M (976) which corresponds to a margin of 21.7 per cent (24.4), distributed over SEK 598 M (777) in EBITDA for Local Search, SEK 251 M (279) for Voice and SEK -72 M (-80) for other Group functions. Adjusted EBITDA, excluding restructuring costs and other items affecting comparability, amounted to SEK 884 M (976), which corresponds to a margin of 24.6 per cent (24.4). Other items affecting comparability had a positive net effect on adjusted EBITDA. The positive effect is primarily attributable to restructuring costs. Operating income amounted to SEK 462 M compared with SEK 481 M the year before. As the market trend for Voice is assessed to continue to decline, an impairment loss has been charged to Voice in Norway (1880/1888) in an amount of SEK 91 M (-). An impairment loss of approximately SEK 8 M (-) has been applied regarding goodwill to the company Leta and SEK 5 M (-) charged to goodwill for Local Search. The impairment loss of SEK 12 M in 2012 was attributable to an impairment of IT-projects. Net financial items amounted to SEK -142 M (-140 including SEK 154 M in capital gain) and was positively affected by lower interest rate levels and a lower leverage. Exchange rate differences impacted net financial items positively by SEK 39 M (-7). Income before tax for the year was SEK 320 M (341). The reported tax cost for the year was SEK -141 M (-100). The effective tax rate for the year was 44 per cent (29). Net income for the year was SEK 179 M (241) of which SEK 177 M (241) is attributable to shareholders of the Parent Company. 10 In the comparison of operating revenue between 2013 and 2012, operating revenues for 2013 is not updated to reflect the distribution of Other products made in conjunction with the annual financial statements This means that operating revenues for Desktop Search, Print and Other Products differ for 2013 in the comparison between and INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

51 FINANCIAL POSITION In 2013, total assets decreased by approximately 9 per cent to SEK 8,174 M (8,944). The Group s intangible assets amounted to SEK 6,948 M (7,330), of which goodwill accounted for SEK 5,763 M (6,124) after the goodwill impairment for the year of SEK 103 M (0). Brands with an indefinite useful life amounted to SEK 112 M (923). During the fourth quarter, a reclassification was made of the Gule Sider and Ditt Distrikt brands from indefinite useful life to a finite useful life of 5-10 years, which explains the change from the preceding year. The reclassification contributed to an increase in other brands to SEK 804 M (22). Changes during the year in property, plant and equipment and intangible non-current assets are explained by negative currency effects of SEK -326 M, customary depreciation/amortization of SEK 211 M (483), and an impairment loss of SEK 104 M (12). Investments, primarily in product development, amounted to SEK 157 M (122) during the year. The change in other assets is due to an increase in bank balances pledged as collateral for credit insurance with PRI Pensionsgaranti in an amount of SEK 50 M (61). Total pledged funds including return amounted to approximately SEK 111 M (61) at year-end. Trade receivables amounted to SEK 430 M (560); the reduction is attributable to lower sales. Shareholders equity increased by SEK 123 M to SEK 3,666 M (3,543) at year-end. No dividend was paid to holders of ordinary shares during the year. The established dividend to preference shareholders according to the 2013 Annual General Meeting of SEK 48 M reduced shareholders equity. At December 31, shareholders equity per share amounted to SEK (35.02) and the equity/assets ratio was 45 per cent (40). Group interest-bearing net debt amounted to SEK 2,340 M (2,704). Borrowing decreased by SEK 399 M after the year s planned repayments, reductions upon a change in loan agreements and currency effects. Interest-bearing net debt relative to adjusted EBITDA, excluding items affecting comparability, was 2.6 (2.8). At year-end, outstanding debt under existing credit facilities amounted to NOK 452 M (1,114), DKK 90 M (57) and SEK 1,943 M (1,599). In December 2013, Eniro had a utilized credit facility of SEK 133 M (165). Cash and cash equivalents and unutilized credit facilities amounted to SEK 246 M (363). Prepaid revenue amounted to SEK 620 M (852), a decrease of 27 per cent. CASH FLOW Operating cash flow increased to SEK 329 M (299). The trend in working capital was negative, by SEK 91 M (- 66). Working capital was affected by lower sales, which meant lower trade receivables and advance payments. Cash flow from investing activities was SEK -119 M (-51) and included the receipt of deferred consideration from 2010 for a divested operation in Finland and investments in operations for a net total of SEK -152 M (-121). Cash flow from financing activities was SEK -440 M (-730) and is attributable to a net decrease in loan debt of SEK 342 M (-1,021) and paid dividends on preference shares of SEK -48 M (-24). Long-term investments increased by an additional SEK -50 M (-61) and pertain to pledged bank funds for continued credit insurance with PRI Pensionsgaranti. Cash flow for the period was SEK -78 M (-361). INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 51

52 CAPITAL STRUCTURE AND OTHER FINANCIAL INFORMATION NET DEBT Consolidated net debt at December 31, 2014 is presented below. 11 SEK M December 31, 2014 (A) Cash 58 (B) Cash equivalents - (C) Easily realizable securities - (D) Sum liquidity (A)+(B)+(C) 58 (E) Current receivables 3 (F) Current bank debt 625 (G) Current component of non-current liabilities - (H) Other current liabilities - (I) Sum current liabilities (F)+(G)+(H) 625 (J) Net current indebtedness (I)-(E)-(D) 564 (K) Long-term bank loans 1,767 (L) Issued bonds - (M) Other long-term loans - (N) Non-current debt (K)+(L)+(M) 1,767 (O) Net indebtedness (J)+(N) 2, The difference between the net debt in the table above and the net debt reported in Eniro's annual report 2014 is that the calculation of net debt in the annual report for 2014 also includes long-term interest-bearing receivables, amounting to SEK 123 million. These receivables relate to a credit insurance with PRI Pensionsgaranti (PRI) which runs until Eniro has pledged bank deposits for future commitments, a so called pension guarantee. Eniro's net debt reported in the annual report and is mentioned in other sections of this prospectus amounts to SEK 2,208 million. 52 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

53 SHAREHOLDERS EQUITY AND LIABILITIES Consolidated equity and liabilities are presented below as at December 31, SEK M December 31, 2014 Total current interest-bearing liabilities 625 Against guarantee or surety 625 Against collateral - Without guarantee/surety or collateral - Total non-current interest-bearing liabilities 1,767 Against guarantee or surety 12 1,767 Against collateral - Without guarantee/surety or collateral - Shareholders equity 1,797 Share capital 309 Other capital contributions 5,125 Cash and cash equivalents -277 Retained earnings including income for the period -3,420 Minority interest 60 Working capital The Company does not have enough working capital to cover the needs during the next 12 months as from the date of this Prospectus. ACTION PLAN AND CONSEQUENCES The Extraordinary General Meeting on March 9, 2015 resolved to approve the underwritten Rights Issue of ordinary shares amounting to approximately SEK 458 million in accordance with the terms described in the Prospectus as well as to approve a placed and directed convertible issue of a nominal SEK 500 million. These issues are expected to raise a maximum of SEK 200 million in working capital for the Company after issue costs and agreed repayments on the bank loans. The Company assesses that the working capital injected through the issues and the amendments to the loan agreement together meet the Company s working capital needs for the upcoming 12-month period. It should be noted that no collateral has been pledged for the subscription and guarantee undertakings which have been provided regarding the Rights Issue. Nor has collateral been pledged by the subscribers of the convertibles. In addition, the subscription and guarantee undertakings regarding the Rights Issue are conditional on the loan under the bank loan agreement not being terminated for repayment and the amendment agreement regarding the bank loan not being terminated. The subscriptions of the convertible issue are conditional on the Rights Issue being carried out, the bank loan agreement not being terminated for repayment and the amendment agreement regarding the bank loan not being terminated. The banks have the right to demand immediate repayment of the loan agreement if, inter alia, a material adverse effect occurs regarding the Company. In addition, the amended loan agreement does not enter into effect if a material adverse effect regarding the Company occurs or if the Rights Issue or convertible issue are not fully carried out. 12 Shares in all Group companies that are directly owned by Eniro, all material Group companies and all Group companies that owns or holds the rights to the search engines, databases or any other rights or assets that are essential for the Group's operations have been pledged as security for the Company's loan agreement. In addition, essential brands and other intellectual property rights, significant intercompany loans and other significant assets are pledged as security for the loan agreement. Some Group companies are also guarantors under the loan agreement. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 53

54 If the amended loan agreement does not enter into effect, the Company is at risk of lacking necessary working capital to meet the required repayments that apply according to the existing loan agreement. In such a situation, the Company will need to reach a new agreement with the Company s lenders. If such renegotiation were not to succeed or if Eniro does not succeed in obtaining new financing in another manner, Eniro will be in breach of the existing loan agreement. Such breach would in such case arise on June 30, 2015, when Eniro shall make an agreed amortisation and would entitle the lending banks to demand immediate repayment of the outstanding bank loan. The outstanding loan amounted to SEK 2,392 million as per December 31, 2014 (at which date the Company s cash and cash equivalents amounted to SEK 58million), and since Eniro lacks the possibility to make a repayment of that magnitude, Eniro would be forced to apply for bankruptcy if immediate repayment was demanded. Investments SEK M Intangible assets Tangible assets Total investments In Norway, Eniro s directory assistance service 1880 merged with the challenger brand 1888 in February Eniro controls 64 per cent of the joint operations and the remaining 36 per cent is controlled by the owners of No purchase consideration was payable for the transaction. In April 2013, the Company s subsidiary Eniro Sverige AB acquired 51 per cent of the shares in Bloggerfy AB from FameAds Sweden AB. Bloggerfy develops and conducts sales of sponsored links and banners on blogs which have been connected to the network in Sweden and Norway. The purchase consideration for the acquisition was SEK 0.5 million. Eniro Sverige AB sold its entire holding in Bloggerfy AB to Soffiliate AB on December 18, ON-GOING AND FUTURE INVESTMENTS The Company currently has no significant on-going or planned investments. Tangible assets The Company s tangible assets consist of equipment and amounted to SEK 21 million at December 31, There are no known environmental factors that affect the Company s use of the tangible assets. Tendencies Eniro s performance and position are affected by the development on the net-based search market and the marketing market in general, which in turn are dependent on a number of factors such as the willingness of companies to spend money on marketing and the selection of media where companies want to be visible. In 2014, the same market trend that has been under way for several years continued meaning a continued flow in to the digital channels. The business model is based on an interaction between the user, costumer and digital channel. Above all, the mobile channel is growing in relevance due to the rising penetration of smartphones and users becoming increasingly mobile and using the mobile phone to a greater extent to find what they are looking for nearby and to buy products and services. In contrast to the digital channels, the market trend is still downward for printed catalogues and directory assistance services. Users of these services continue to move over to the digital channels and this trend is expected to continue in the future as well. Significant events after December 31, 2014 Through an amendment agreement, Eniro has agreed on certain amendments to the loan agreement with the bank consortium which among other things means that the tenor is extended to the end of 2018, repayments are lowered from apprioximately SEK 375 million per year to apprioximately SEK 150 million for 2015 and apprioximately SEK 175 million annually for The amendments to the loan agreement are conditional on the implementation of the Rights Issue, among other things. 54 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

55 The Extraordinary General Meeting on March 9, 2015 resolved to approve the Board of Directors decision on a fully underwritten Rights Issue amounting to approximently SEK 458 million and an issue of convertibles of a nominal amount of SEK 500 million. The convertible issue is directed to and placed with institutional and qualified investors in Sweden and internationally. In January 2015, Pierre Mårtensson resigned as the President of Eniro Norway. Mattias Wedar, member of Group Management and the Senior Vice President for Group Product Development and Marketing, was appointed acting President of the Norwegian company. Allan Jakobsen has been appointed President of Eniro Denmark and is a member of the Group Management. Allan took office in March Nils Carlsson has been appointed President of Eniro Sweden. Nils Carlsson will take office in May INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 55

56 THE SHARE, SHARE CAPITAL AND OWNERSHIP STRUCTURE General Eniro is a Swedish public limited liability company that was formed on March 6, 2000 and registered with the Swedish Companies Registration Office on March 30, Eniro s current company name, Eniro AB (publ), was registered with the Swedish Companies Registration Office on August 16, Eniro s corporate identity number is and Eniro s registered offices are in Stockholm, Sweden. Eniro s address is Gustav III:s Boulevard 40, SE Stockholm, Sweden, and Eniro s phone number is The Company s ordinary shares and preference shares are issued according to Swedish law and denominated in SEK. The ordinary shares and preference shares are registered with Euroclear Sweden, which also maintains Eniro s shareholders register through account operations in a CSD register. Euroclear s address is Euroclear Sweden AB, Box 7822, SE Stockholm, Sweden. No share certificates have been issued for the shares. Each ordinary share entitles the holder to one (1) vote and each preference share entitles the holder to one tenth (1/10) of a vote at the General Meeting and every shareholder is entitled to vote for the full number of owned and represented shares without limitation in the voting rights. There has not been a public offering for the shares in Eniro during the current or previous fiscal year and the shares are not subject to offers that have been provided as a result of a mandatory offer, redemption rights or redemption obligations. The number of shares in Eniro as of the date of this Prospectus is the same as at the beginning of The Company conducts its operations in accordance with the Swedish Companies Act (2005:551) and the rights that according to the Company s Articles of Association are associated with the shares can only be changed in accordance with the provisions of the Swedish Companies Act. Shares and share capital THE COMPANY S SHARES According to Eniro s registered Articles of Association, the share capital shall be a minimum of SEK 300,000,000 and a maximum of SEK 1,200,000,000 distributed over a minimum of 100,000,000 shares and a maximum of 400,000,000 shares. According to Eniro s Articles of Association, shares can be issued in three classes: ordinary shares, preference shares and C shares. Before the Rights Issue, the registered share capital in the Company amounts to SEK 308,642,220 distributed over 102,880,740 shares, of which 101,880,740 are ordinary shares and 1,000,000 are preference shares. No C shares have been issued as of the date of this Prospectus. Each share has a quota value of SEK 3. Ordinary shares and C shares may be issued in a number corresponding to the maximum number of shares that can be issued under the Company s Articles of Association and preference shares may be issued in a maximum number of 1,000,000 preference shares. All outstanding shares are fully paid. CHANGES IN SHARE CAPITAL, THE NUMBER OF SHARES AND THE ARTICLES OF ASSOCIATION To enable the Rights Issue, the Extraordinary General Meeting on March 9, 2015 resolved to reduce the Company s share capital by SEK 257,201,850 without withdrawal of shares. The reduction in the share capital presupposes that the limits for the Company s share capital in the Articles of Association are changed. The Extraordinary General Meeting therefore resolved to change Section 4, Paragraph 1 of the Articles of Association such that the limits for the Company s share capital are changed from a minimum of SEK 300,000,000 and a maximum of SEK 1,200,000,000 to a minimum of SEK 50,000,000 and a maximum of SEK 200,000,000. After the reduction of the Company s share capital, the Company s share capital will amount to SEK 51,440,370 distributed over a total of 102,880,740 shares (before the Rights Issue), each with a quota value of SEK The reduction in the share capital can be done without permission from the Swedish Companies Registration Office or a public court since the Company simultaneously conducts the Rights Issue and a bonus issue which simultaneously increases the share capital by SEK 257,201,850, which means that neither the Company s restricted equity nor its share capital decreases. The Rights Issue presupposes further changes of the Company s Articles of Association. To enable the Rights Issue, the Extraordinary General Meeting therefore resolved on (i) an additional change of Section 4 Paragraph 1 of the Articles of Association, meaning that the share capital limits are changed from a minimum of SEK 50,000,000 and a maximum of SEK 200,000,000 to a minimum of SEK 300,000,000 and a maximum of SEK 1,200,000,000 and (ii) a change of Section 5 of the Articles of Association meaning that the limits for the number of shares changes from a minimum of 100,000, INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

57 shares and a maximum of 400,000,000 shares to a minimum of 300,000,000 shares and a maximum of 1,200,000,000 shares. At the date of this Prospectus, the changes to the Articles of Association described above have not yet been registered with the Swedish Companies Registration Office. CONVERTIBLES The Extraordinary General Meeting on March 9, 2015 resolved to approve the Board of Directors decision of February 5, 2015, on a placed and directed convertible issue to a nominal amount of SEK 500 M. The convertibles are issued at 95 per cent of the nominal amount. On every convertible, there is an annual interest rate of 6 per cent from April 14, 2015, exclusive. The interest falls due for payment every six months in arrears on April 14 and October 14 of every year, and for the first time on October 14, The convertibles can be converted to ordinary shares in the Company at an initial conversion price of SEK The conversion price may be recalculated, inter alia in the event of an issue of shares or warrants, a bonus issue and dividend payments. The holder of convertibles has the right to request conversion of the convertibles to new ordinary shares in the Company during the period from the second banking day after the registration with the Swedish Companies Registration Office and up to and including the earlier of the tenth banking day before April 14, 2020 and the tenth banking day before the date determined as the date for redemption of the convertibles. The convertibles nominal amount falls due for payment on April 14, 2020 (insofar as conversion or redemption has not occurred before then). A potential conversion of these convertibles will result in that the proportional ownership and the voting share for holders of shares in the Company will decrease. The convertible issue is directed at and placed with Swedish and international institutional and qualified investors. Subscription is conditional on the Company s existing bank loan not being terminated for repayment and the amendment agreement regarding the bank loan not being terminated. TRADING ON NASDAQ STOCKHOLM The ordinary shares and the preference shares are listed on Nasdaq Stockholm and are included in the Nordic Mid Cap segment. The ISIN code for the ordinary shares is SE and the short name is ENRO. The ISIN code for the preference shares is SE and the short name is ENRO PREF. Development of share capital The table below illustrates how Eniro s share capital has changed in the past three years and in the current fiscal year including the number of shares that the share capital has been distributed over. Year Transaction Change in number of ordinary shares Change in number of preference shares Change in number of C shares No. of Ordinary shares No. of Preference Shares Share capital (SEK) Quota value (SEK) Registered 2012 New issue - +1,000, ,180,740 1,000,000 2,529,518, July 2, Decrease in share capital ,180,740 1,000, ,542,220 3 May 7, New issue ,700, ,880,740 1,000, ,642,220 3 Sept. 3, Decrease in share capital ,880,740 1,000,000 51,440, Rights Issue ,642, ,522,960 1,000, ,261, Bonus issue ,522,960 1,000, ,522, ) The C shares have been converted to ordinary shares in accordance with stipulations in the Company s Articles of Association. 2), 3), 4) As of the date of this Prospectus, the decrease in the share capital, the Rights Issue or the bonus issue have not yet been registered by the Swedish Companies Registration Office. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 57

58 Ownership structure At 28 February 2015, the ten largest shareholders holdings amounted to 41.0 per cent of the votes in the Company, corresponding to 40.9 per cent of the share capital, according to the shareholders register kept by Euroclear. At the same date, Eniro s holdings of treasury shares amounted to 1,703,266. The table below provides an overview of Eniro s largest shareholders at 28 February 2015 with changes known to the Company thereafter. Shareholders Ordinary shares Preference shares Share capital (%) Votes (%) Danske Capital Sverige AB 10,195,518 80, Zimbrine Holding BV (Staffan Persson) 7,800, Odey Capital 5,618,000 90, Deutsche Bank AG 3,488, Morgan Stanley customer account 3,208, Försäkringsaktiebolaget Avanza Pension 3,088,100 93, Skandinaviska Enskilda Banken S.A. 2,257,308 5, Länsförsäkringar Fondförvaltning AB 2,226, Banque Öhman S. A. 2,221, Eniro AB (publ) 1,703, Total, 10 largest shareholders 41,807, , Shareholders agreements Insofar as the Board of Directors of the Company is aware, there are no shareholders agreements, other agreements or the equivalent that can lead to the control of the Company changing. Restrictions regarding foreign ownership There are no restrictions under Swedish law or Eniro s Articles of Association regarding the right to own and vote for shares with regard to persons resident outside Sweden or persons who are not Swedish citizens. Dividend and dividend policy Eniro prioritizes a reduction of the net debt over dividends. In light of this, no dividend was paid on the Company s ordinary shares for the 2013 and 2012 fiscal years. According to the Company s Articles of Association, the preference shares have a preferential right over the ordinary shares at an annual dividend of SEK 48 to be paid quarterly in an amount of SEK 12 per dividend occasion. From the first reconciliation date for dividends after the Annual General Meeting in 2017 and for the time that follows, the dividend shall be increased by a total of SEK 4 per annum evenly divided on quarterly payments. The 2014 Annual General Meeting resolved to pay a dividend totalling SEK 48 per preference share to be paid quarterly in an amount of SEK 12 per dividend occasion until the 2015 AGM. The Company paid dividends totalling SEK 24 per preference share in 2012 and a total of SEK 48 per preference share in Refer to the Articles of Association section below for further information regarding the Company s preference shares. The board of Eniro proposes to the 2015 Annual General Meeting that no dividend is paid for the Company s ordinary shares for the 2014 financial year. The board further proposes that a dividend on preference shares for 2014 amounting to a total of SEK 48 per preference share should be paid, which corresponds to a total dividend of SEK 48 million. The dividend is proposed to be paid out in an interval of three-month periods. RIGHT TO DIVIDEND The right to a potential dividend goes to anyone who on the reconciliation date set by the General Meeting for the dividend is registered as a holder of shares in the shareholder register kept by Euroclear. If shareholders cannot be reached through Euroclear, the shareholder s claim on the Company remains regarding the dividend amount and is limited in time only by rules regarding limitations. Upon exceeding the statutory limitation, the dividend amount goes to the Company. Neither the Swedish Companies Act nor Eniro s Articles of Association contain any restrictions regarding the right to dividends to shareholders outside Sweden. Beyond potential limitations pursuant to the banking and clearing system in affected jurisdictions, payment to such shareholders takes place in the same way as to shareholder resident in Sweden. For shareholders that are only limited taxpayers in Sweden, normal Swedish withholding tax is however payable, see the section Tax issues in Sweden. 58 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

59 BOARD OF DIRECTORS, SENIOR EXECUTIVES AND AUDITORS Board of Directors According to Eniro s Articles of Association, the Board of Directors shall consist of a minimum of four and a maximum of ten members with a maximum of three deputies. The Board members are elected by Eniro s General Meeting for the period until the end of the next Annual General Meeting. Before the 2015 AGM, Eniro s Board of Directors consists of the Board members Lars- Johan Jarnheimer (chairman), Cecilia Daun Wennborg, Ketil Eriksen, Leif Aa. Fredsted, Staffan Persson and Stina Honkamaa Bergfors. Lars-Johan Jarnheimer (born 1960) Chairman of the Board since 2011 Education: M.Sc. Econ. Other directorships: Chairman of the Boards of Arvid Nordquist Handelsaktiebolag, INGKA Holding BV and Qliro Group AB (publ), Board member and CEO of Varningsinfo i Sverige AB, member of the Boards of SSRS Fastighets AB, SSRS Holding AB and SAS AB and deputy member of the Board of Jarnverken AB. Professional experience (on-going assignments): Previous assignments in the past five years: President and CEO of Tele2, Marketing Director, Northern Europe for Saab Automobile, Chairman of the Board for BRIS, member of the Boards of Teleopti AB, BabyBjörn AB, Seamless Distribution AB, Energibolaget i Sverige Holding AB, Egmont International AS, Advertising direct Development Stockholm Invest AB and Apoteket AB and President of Comviq. Shareholding: 200,000 ordinary shares and 5,000 preference shares. Independent: Yes Cecilia Daun Wennborg (born 1963) Director since 2011 Education: M.Sc. Econ. Other directorships: Board member and Chairman of the Board of Proffice AB, member of the Boards of ICA Gruppen AB, AB Svensk Bilprovning, Hotell Diplomat AB, Sophiahemmet AB, Sophiahemmet IF (non-profit association), Stiftelsen Oxfam Sverige, Getinge AB, Loomis AB, Atvexa AB, CDW Konsult AB and deputy member of the Board of Johan Wennborg Marketing AB. Professional experience (on-going assignments): Previous assignments in the past five years: CEO/CFO of Carema, acting CEO of Skandiabanken, Country Manager Sweden Skandia, President of Skandia Link and Senior Vice President of Ambea AB and member of the Board of Carnegie Fonder AB and Ikano Bank AB (publ). Shareholding: 25,000 ordinary shares and 210 preference shares. Independent: Yes Ketil Eriksen (born 1963) Director since 2011 Education: M.Sc. Econ. Other directorships: Chairman of the Boards of Britax Childcare Ltd., Helly Hansen AS, Plantasjen AB and Capunio AB and member of the Boards of Polarica AB, Fazer group and Purity Vodka AB. Previous assignments in the past five years: CEO of The Absolut Company, Vin & Sprit AB and Colgate Palmolive AB and member of the Boards of Swedish Pelican Self Storage AB and Bayn Europe AB. Professional experience (on-going assignments): Shareholding: 4,165 ordinary shares and 200 preference shares. Independent: Yes Leif Aa. Fredsted (born 1961) Director since 2012 Education: M.Sc. Econ. Other directorships: Chairman of the Boards of Vivaki Norway AS, Vivaki Sweden AB, Vivaki Denmark AS and Aphelion AS and member of the Board of West Wacker Holding Norway AS. Previous assignments in the past five years: Chairman of the Board of Star Partners AS. Professional experience (on-going assignments): Nordic President of Vivaki Norway AS. Shareholding: 7,500 ordinary shares. Independent: Yes INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 59

60 Staffan Persson (born 1956) Director since 2014 Education: M.Sc. Econ. Other directorships: Chairman of the Boards of Swedia Capital AB, Accelerator Nordic AB, DIBS Payment Services AB (publ), Synthetic MR AB (publ), Sveab Holding AB, Nortal Investments AB, Swedia HighP AB, Swedia Fastigheter AB, Nortal Capital AB and Darkathlon AB, member of the Boards of Quizz Golf AB, The Lexington Company AB (publ), Cinnober Financial Technology AB and AB Klar-Invest and deputy member of the Board of Jiver River AB. Previous assignments in the past five years: CEO and Chairman of the Board of Neonet AB, Managing Director of Nordia Fondkommission, Director HSBC Investment Bank, member of the Boards of Orc Group AB, EcoDevelopment in Europé AB, Rite Internet Ventures AB, Rite Internet Ventures Holding AB, Satchmo Invest II AB and Quesada Kapitalförvaltning AB and Chairman of the Boards of Svenska Entreprenad i Mälardalen AB, Neonet Securities AB, Frank Dandy AB and Rite Internet Ventures II AB. Professional experience (on-going assignments): CEO of Swedia Capital AB. Shareholding: 7,800,000 ordinary shares. Independent: Yes Stina Honkamaa Bergfors (born 1972) Director since 2014 Education: M.Sc. Econ. Other directorships: Member of the Board and CEO of United Screens AB, member of the Board of Carat Sverige AB, INGKA Holding BV and SBE Holding AB and deputy member of the Board of Erik Malte Holding AB. Previous assignments in the past five years: Managing Director in Sweden for Google and YouTube and Carat and member of the Board of TV4 AB and the Swedish Ski Association. Professional experience (on-going assignments): CEO of United Screens AB. Shareholding: 24,000 ordinary shares, of which 20,000 ordinary shares are held through related parties. Independent: Yes Jonas Svensson (born 1966) Employee representative since 2011 Education: Upper-secondary and folk high school education. Other directorships: Member of the Board of Eniro AB and Chairman of the Unionen local chapter Eniro. Previous assignments in the past five years: Project Manager and Business & Sales controller Eniro AB. Professional experience (on-going assignments): Shareholding: - Independent: - Katarina Emilsson-Thudén (born 1969 ) Employee representative since 2014 Education: Diplomaed information broker and market intelligence officer. Other directorships: Deputy Chairman of the Board of Unionen local chapter Eniro. Previous assignments in the past five years: Facility Manager, Information Officer, Environmental Auditor. Professional experience (on-going assignments): Shareholding: - Independent: - Senior executives Allan Jakobsen (born 1969) President of Eniro Denmark since 2015 Education: M.Sc Business Administration, Aarhus University, management courses at INSEAD, IMD Business School and Henley Management College. Other assignments: Chairman of the Board of Energi Cool A/S. Previous assignments in the past five years: SVP Financial Services for Nets and President of Mi-Pay Ltd, CEO of TDC Finland and DanNet A/S, Chairman of the Board of Unwire ApS and member of the Board of Nets Estonia. Shareholding: 0 60 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

61 Bożena Chmielarczyk (born 1965) President of Eniro Poland since 2012 Education: MBA, Regent University. Other assignments: - Previous assignments in the past five years: President of Reader s Digest in Poland. Shareholding: 6,194 synthetic shares. Maria Åkrans (born 1970) Head of Group Business Controlling since 2013 Education: FEI Företagsekonomiska institutet. Other assignments: - Previous assignments in the past five years: CEO of Rite Internet Ventures AB, CFO of NeoNet AB, member of the Board of DGC One AB, Klikki.com Oy, 24 Media Network AB and Nord Software Oy and Chairman of the Board of Frank Dandy AB, Armstrong The Shirt AB and Simstore AB. Shareholding: 5,000 ordinary shares. Martina Smedman (born 1963) Senior Vice President, Group Human Resources since 2011 Education: B.Sc. in Human Resource Management, Linköping University. Other assignments: Chairman of the Board of the association Trygg Affär. Previous assignments in the past five years: Head of Human Resources for Preem AB. Shareholding: 1,000 ordinary shares and 23,791 synthetic shares. Mattias Wedar (born 1973) Senior Vice President, Group Product & Marketing since 2013, acting President of Eniro Sweden and Finland (excluding eniro.se) since June 2014 and acting President of Eniro Norway since January 2015 Education: M.Sc. Informatics and Systems Analysis, Lund University. Other assignments: - Previous assignments in the past five years: President of Eniro Sweden and Finland and IT Director of Eniro AB. Shareholding: 9,000 ordinary shares and 97,356 synthetic shares. Roland M. Andersen (born 1968) CFO since July 2014 Education: M.Sc. Econ./Finance, Aarhus School of Business. Other assignments: Member of the Board of Unifeeder A/S. Previous assignments in the past five years: CFO of TORM A/S. Shareholding: 25,000 ordinary shares. Stefan Kercza (born 1964) President and CEO of Eniro since August 2014 and acting head of eniro.se since June 2014 Education: MBA, AVT Business School. Other assignments: Member of the Boards of Fibetco ApS and 1dataplan ApS. Previous assignments in the past five years: President for Telenor India and Eniro Denmark. Shareholding: 24,000 ordinary shares and 54,363 synthetic shares. Vilhelm Hallström (born 1972) Senior Vice President, Group IT since May 2014 Education: B.Sc. in Computer and Systems Sciences, Stockholm University. Other assignments: - Previous assignments in the past five years: Head of Business Support Systems for Eniro AB. Shareholding: 11,554 synthetic shares. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 61

62 Remuneration to the Board of Directors and Group Management REMUNERATION OF THE BOARD The Annual General Meeting on April 24, 2014 resolved that directors fees were to be paid in a total amount of SEK 1,100,000 to the Chairman of the Board and SEK 420,000 to each of the other AGM-elected directors for the period until the 2015 AGM. Directors fees may, after special agreement with the Company, be invoiced by a company wholly owned by the director on condition that this is cost neutral for the Company. In addition, the AGM resolved that work in the Audit Committee would be remunerated in an amount of SEK 150,000 to the Chair and SEK 75,000 to each director of the Audit and Remuneration Committee. The remuneration received by Eniro s directors for the 2014 fiscal year is presented below. NAME DIRECTORS FEES (SEK) FEE FOR COMMITTEE WORK (SEK) TOTAL (SEK) Lars-Johan Jarnheimer 1,100, ,000 1,250,000 Cecilia Daun Wennborg 420, , ,000 Ketil Eriksen 420,000 75, ,000 Leif Aa. Fredsted 420, ,000 Stina Honkamaa Bergfors 420,000 75, ,000 Staffan Persson 420, ,000 Jonas Svensson Katarina Emilsson-Thudén None of the directors have an agreement that entitles them to compensation upon the end of the assignment. In addition, the Company has no reserved or accrued amounts for pensions or similar benefits upon the directors withdrawal from service. REMUNERATION TO SENIOR EXECUTIVES Guidelines that shall be applied to remuneration of the senior executives (including the President and CEO) were adopted by the Annual General Meeting on April 24, The remuneration of the senior executives shall consist of a fixed and a variable salary, pension provisions, a long-term incentive program and other remuneration and benefits. The fixed salary is based on the individual executive s area of responsibility, expertise and experience, and serves as the base for variable salary. The variable salary consists of cash payment and the targets shall primarily comprise the Group s financial result and is measured against the Group s income and EBITDA. The targets for variable salary shall be set by the Board beginning January 1, Eniro s pension policy is based on either an individual occupational pension plan or a defined contribution pension plan corresponding to a maximum of 35 per cent of fixed salary. Other remuneration and benefits, such as a company car and health insurance, shall be market-based. The table below presents the remuneration received by the CEO and senior executives for the 2014 fiscal year. Remuneration (SEK M) Fixed salary incl. vacation supplement Variable remuneratio n 1 Long-term share-based remuneration Other benefits Pension cost Other remuneration Total Stefan Kercza, CEO Other senior executives 1) Pertain to an adjustment of the value growth for synthetic shares allocated to the years No variable remuneration was paid for The Company has no reserved or accrued amounts for pensions or similar benefits upon the senior executives withdrawal from service. Severance pay, etc. The President and CEO Stefan Kercza has a period of notice of six months upon resignation and 12 months upon termination by the Company. Upon termination by the Company, an additional six months of deductible severance pay is payable. Between the Company and other senior executives, a period of notice of up to six months applies upon resignation and up to 12 months upon termination by the Company. 62 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

63 For the CFO an additional 12 month severance pay and a guaranteed bonus is payable upon termination by the Company. This agreement was made in 2014 by the former managing director Johan Lindgren and differs from the guidelines resolved by the annual general meeting. The agreement has not been approved by the remuneration committee or the board of directors. Incentive program The 2013 AGM approved the Board s proposal to establish a share-based Long Term Incentive Program, LTIP The program includes 17 senior executives and key personnel in the Eniro. Participants in LTIP may receive grants of ordinary shares in Eniro. To be able to participate in the incentive program, a personal investment in Eniro shares ( savings shares ) is required. For each savings share held by the participant, the participant will be granted target-based stock options and performance-based stock options and warrants. The number of ordinary shares the target-based stock options and the performance-based stock options and warrants will later entitle the employees to depend on the extent to which certain targets and performance-based conditions set in advance by the Board are met. Participants who resign, are let go or leave Eniro for some other reason before the publication of the interim report for the period January-March 2016 have, as a main rule, no right to continued participation in the incentive program. The Board intends to present the outcome of the incentive program in the annual report for the 2015 fiscal year. The 2014 AGM resolved on a similar long-term share-related incentive program. Since no allocation has taken place according to the program, it has never been implemented. Other information on the Board of Directors and senior executives No director or senior executive has any family relationships or other related party relationships to any other director or senior executive. Insofar as the Company is aware, no director or senior executive has any interest that conflicts with the Company s interests. No special agreements with major shareholders, customers, suppliers or other parties have been made, under which any senior executive or director has been appointed. No director or senior executive has been involved in a bankruptcy, liquidation, receivership or fraud-related legal process in the past five years. In the past five years, no accusations have been made and/or sanctions ordered by authorities or organizations that represent a certain professional group and is regulated by public law against any of these individuals and none of them have in the past five years been prohibited by a court to be a member of a company s administrative, management or governance bodies or from having a senior or overall role in the Company. None of the aforementioned senior executives or directors has been prevented by an authority or court from serving as a member of the Company s Board or management group in the past five years. All directors and senior executives can be reached via the Company s office with address Gustav III:s Boulevard 40, SE Stockholm. AUDITORS The Company s auditor is the registered public accounting firm PricewaterhouseCoopers AB. The Auditor-in- Charge is Bo Hjalmarsson, Authorized Public Accountant and member of the professional association FAR. The auditor has been the Company s auditor for the entire period covered by the historic financial information ( ). The office address to PricewaterhouseCoopers AB is Torsgatan 21, SE Stockholm. The Nomination Committee s proposal for the 2015 AGM For the 2015 AGM, the Nomination Committee has proposed that Cecilia Lager and Anna Settman should be elected as new directors. The Nomination Committee also proposes the re-election of Leif Aa. Fredsted, Stina Honkamaa Bergfors, Lars-Johan Jarnheimer and Staffan Persson. Cecilia Daun Wennborg and Ketil Eriksen have declined re-election. Lars-Johan Jarnheimer is proposed to be the Chairman of the Board. In addition, the Nomination Committee has proposed that the registered public accounting firm PricewaterhouseCoopers AB shall be elected as the auditor. PricewaterhouseCoopers AB has notified that, if the Nomination Committee s proposal is also supported by the AGM, it intends to appoint Mikael Eriksson, Authorized Public Accountant as the Auditor-in-Charge. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 63

64 CORPORATE GOVERNANCE General Eniro is a Swedish public limited liability company listed on Nasdaq Stockholm. Eniro s shareholders are those who ultimately make decisions regarding the Group s corporate governance by appointing the Company s Board of Directors at the General Meeting. Eniro s Board of Directors is responsible for Eniro s governance. According to Eniro s Articles of Association, the Board with some exceptions shall be elected annually at the Annual General Meeting for the period until the end of the next AGM and shall consist of a minimum of four and a maximum of ten directors. The corporate governance in Eniro is based on the Swedish Companies Act (2005:551) and the Annual Accounts Act (1995:1554), Nasdaq Stockholm s Rulebook for Issuers, the Swedish Code of Corporate Governance, Eniro s Articles of Association and other relevant regulations and guidelines such as the Group s corporate governance documents (including the terms of reference to the President from the Board and the Board s formal work plan), and Eniro s values and internal policies. Swedish Code of Corporate Governance Eniro has applied the Swedish Code of Corporate Governance ( the Code ) since The Code is based on the principles of comply or explain, which means that a company that applies the Code may deviate from its stipulations and choose other solutions deemed to better match the circumstances in the individual case. A condition for such a deviation is that it is openly reported and that the company describes the solution chosen instead. Eniro reports no deviations from the Code regarding the 2014 fiscal year. Board committees In accordance with the Swedish Companies Act and the Code, the Board has established an Audit Committee and a Remuneration Committee. The tasks of the respective committee are presented by the formal work plan the Board establishes annually as well as the Swedish Companies Act and the Code. The formal work plan also states what decision-making powers the Board has delegated to the committees. AUDIT COMMITTEE During the period after the 2014 AGM, the Audit Committee has consisted of Cecilia Daun Wennborg (Chair), Lars-Johan Jarnheimer and Ketil Eriksen. The Audit Committee is responsible for the preparation of the Board s work of ensuring the quality regarding the Group s financial statements. This includes monitoring the processes for audit and the efficiency of the internal control of the financial reporting. In addition, the Audit Committee shall also continuously meet with Eniro s auditor and stay informed of the direction and scope of the audit work and evaluate it, and continuously discuss the view of Eniro s risks regarding financial reporting with the auditor. In connection with the election of an auditor, the Audit Committee shall also assist the Nomination Committee in its work regarding the preparation of proposals for auditors and remuneration for the audit work. For their work in the Audit Committee, the 2014 AGM resolved that remuneration shall be payable in an amount of SEK 150,000 to the Chair and SEK 75,000 to each of the other committee members. During the 2014 fiscal year, the Audit Committee held seven meetings. REMUNERATION COMMITTEE During the period after the 2014 AGM, the Remuneration Committee has consisted of Lars-Johan Jarnheimer (Chair) and Stina Honkamaa Bergfors. According to the Code, the Remuneration Committee shall prepare the Board s proposals to the AGM regarding guidelines s for the determination of salary and other remuneration to the President and CEO and other senior executives. According to the Board s formal work plan, the Remuneration Committee s proposals shall be presented to the Board that makes decisions on presenting the proposal to the Annual General Meeting. For their work in the Remuneration Committee, the 2014 AGM resolved that remuneration shall be payable in an amount of SEK 75,000 to each of the committee members. During the 2014 fiscal year, the Remuneration Committee held six meetings. Nomination Committee Since 2005, the Annual General Meeting has annually resolved that the four largest shareholders shall be provided the opportunity to each appoint a representative to constitute the Nomination Committee together with the Chairman of the Board for the period until a new Nomination Committee is appointed. The composition of the Nomination Committee is published by press release as soon as the members have been appointed, and no 64 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

65 later than six months before the Annual General Meeting. If a member of the Nomination Committee withdraws from the assignment before its work is concluded, the shareholder that appointed the withdrawing member shall appoint a successor, on condition that the shareholder remains one of the strongest shareholders in terms of votes. If a shareholder that appointed a member to the Nomination Committee is no longer one of the four largest shareholders up to three months before the AGM, he/she shall make his/her place available to the new major shareholder. For the 2015 AGM, the Nomination Committee consists of (based on the ownership as of 31 August 2014): Ulric Grönvall (Chair), Danske Capital AB (11.5%) Åsa Nisell, Swedbank Robur fonder (8.9%) Staffan Persson Zimbrine Holding BV (7.7%) Sebastian Jahreskog, through own holding and companies (4.0%) Lars-Johan Jarnheimer, Chairman of the Board of Eniro. The Nomination Committee s task is to present proposals for the Annual General Meeting on March 27, 2015 regarding the number of Board members to be elected by the AGM, directors fees, potential remuneration for committee work, the Board s composition, election of the Chairman of the Board and the election of auditors and auditor fees. The Nomination Committee has up until the Annual General Meeting 2015 held seven recorded meetings. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 65

66 ARTICLES OF ASSOCIATION The Articles of Association that are registered with the Swedish Companies Registration Office as of the date of this Prospectus is presented below. Refer to the section The Share, Share Capital and Ownership Structure - Changes in share capital, number of shares and the Articles of Association for a description of the changes of the Articles of Association adopted by the Extraordinary General Meeting on March 9, Company name The name of the Company is Eniro AB. The Company is a public limited liability company (publ). 2 Registered office The Board of Directors shall have its registered office in Stockholm. 3 Object of the Company s operations The Company s objects are to develop, produce and market information- and media products and conduct thereto related business. 4 Share capital, etc. The share capital shall amount to not less than 300,000,000 SEK and not more than 1,200,000,000 SEK. The share capital shall amount to not less than 300,000,000 SEK and not more than 1,200,000,000 SEK. It shall be possible to issue three classes of shares, ordinary shares, preference shares and class C shares. Ordinary shares shall have one (1) vote per share. Preference shares and class C shares shall have one tenth (1/10) of a vote per share. Ordinary shares and class C shares may be issued up to an amount corresponding to the highest number of shares permitted by these Articles of Association. Up to 1,000,000 preference shares may be issued. In the event that the company decides to issue new shares of more than one class, by a cash issue or a set-off issue, holders of ordinary shares, preference shares and class C shares shall carry pre-emption rights to such new shares pro rata to their existing shareholding in that class (Primary Preferential Right). Shares not subscribed for on the basis of Primary Preferential Rights shall be offered for subscription to all shareholders (Secondary Preferential Right). If the number of shares offered is insufficient for subscription demand based on Secondary Preferential Rights, the shares shall be distributed among the subscribers pro rata to the total number of shares in the company already held by them, regardless of whether the shares in the company already held by them are ordinary shares, preference shares or class C shares. To the extent this is not possible as regards a certain share or certain shares, the distribution shall be made by lottery. In the event that the Company decides to issue new shares of only one class, by a cash issue or a set-off issue, the existing shareholders of the class of shares that is the subject of the new issue shall carry pre-emption rights to such new shares pro rata to their existing shareholding in that class (Primary Preferential Right). Shares not subscribed for on the basis of Primary Preferential Rights shall be offered for subscription to all shareholders (Secondary Preferential Right). If the number of shares offered in this manner is insufficient for subscription based on Secondary Preferential Rights, the shares shall be distributed among the subscribers pro rata to the total number of shares in the Company already held by them, regardless of whether the shares in the company already held by them are ordinary shares, preference shares or class C shares. To the extent this is not possible as regards a certain share or certain shares, the distribution shall be made by lottery. In the event that the company decides to issue new warrants or convertible debt instruments, by a cash issue or a set-off issue, the shareholders shall have pre-emption rights to subscribe for the new warrants as if the issue related to the shares that may be subscribed for following an exercise of the warrants or, in case of an issue of convertible debt instruments, as if the issue related to the shares that may be subscribed for following a conversion. What is stipulated above shall not restrict the ability to disapply shareholders pre-emption rights on a cash issue or set-off issue. An increase of the share capital by a bonus issue, where new shares are issued, may only occur by an issue of new ordinary shares. In such case, holders of ordinary shares have pre-emption rights to such new ordinary shares pro rata to their existing holdings of ordinary shares. The above shall not prevent the issuance of new 66 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

67 classes of shares through a bonus issue subject to the necessary amendments to the Articles of Association having been made. All class C shares shall be converted to ordinary shares upon the resolution of the Board of Directors. The Board of Directors shall immediately thereafter report the conversion to the Swedish Companies Registration Office for registration. The conversion is executed once such registration has been made and a record has been made in the share register. 5 Number of shares The number of shares shall be not less than 100,000,000 and not more than 400,000, Board of Directors The Board of Directors shall, besides persons who may, due to legal requirements be elected in another manner, consist of no less than four and not more than ten Directors, with a maximum of three Deputy Directors. The Directors and Deputy Directors are elected yearly at the Annual General Meeting for a term until the end of the next Annual General Meeting. 7 Auditors For the purpose of reviewing the annual accounts, the Company s financial statements and the Board of Directors and the Chief Executive Officer s management, no less than one and not more than two Auditors with maximum the same number of Deputy Auditors are to be elected. A registered audit Company may be elected as Auditor. 8 Notice of General Meeting Notice of General Meetings shall be given through an announcement in Post- och Inrikes Tidningar and on the Company s web site. At the time of the notice, a statement to the effect that notice has been issued shall be published in Svenska Dagbladet. 9 General Meeting The General Meeting shall be held in Stockholm or in Solna. To be entitled to participate in a General Meeting, shareholders shall, be registered/recorded in the transcript or other list reflecting the entire share register regarding the shareholding in the Company five working days prior to the General Meeting and also, notify the Company of their intention to attend the General Meeting not later than 4 p.m. CET on the day stipulated for that purpose in the notice convening the General Meeting. The latter mentioned day must not be a Sunday, any other public holiday, Midsummer s Eve, Christmas Eve or New Year s Eve and must not be more than five working days before the General Meeting. Shareholders may be accompanied at the General Meeting by a maximum of two assistants, on condition that the shareholder notifies the Company of the number of assistants in the manner stated in the preceding paragraph. The following items shall be addressed at the Annual General Meeting: 1. Election of Chairman of the General Meeting; 2. Preparation and approval of the list of shareholders entitled to vote at the General Meeting; 3. Approval of the agenda; 4. Election of two persons to verify the minutes; 5. Determination of whether the General Meeting has been duly convened; 6. Statement by the Chief Executive Officer; 7. Statement regarding the work of the Board of Directors and its Committees; 8. Presentation of the Annual Report and the Auditor s Report, and as applicable, the Consolidated Annual Report and the Auditor s Report in respect thereof; 9. Decisions concerning: a. the adoption of the income statement and balance sheet and of the consolidated income statement and consolidated balance sheet; b. the disposition of the Company s profits or losses as shown in the balance sheet adopted by the General Meeting, and if applicable, the adopted consolidated balance sheet and resolution of record date for dividends; and c. the discharge of the members of the Board of Directors and the Chief Executive Officer from personal liability for the period covered by the financial accounts. 10. Determination of the number of members and deputy members of the Board of Directors to be elected by the General Meeting; INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 67

68 11. Determination of the fees to be paid to the Directors; 12. Election of the Chairman of the Board of Directors, the other members of the Board of Directors, and any deputy members of the Board of Directors; 13. Where applicable, determination of the number of Auditors and deputy Auditors; 14. Where applicable, determination of the fees to be paid to the Auditors; 15. Where applicable, election of Auditors and deputy Auditors; and 16. Other business to be addressed by the General Meeting in accordance with the Swedish Companies Act or the Articles of Association. 10 Financial year The Company s financial year shall be the calendar year. 11 Dividends Preference shares have priority to dividends In the event that the General Meeting resolves to distribute dividends the preference shares shall have priority over the ordinary shares to receive annual dividends as follows. Class C shares do not entail a right to receive dividends. Calculation of the Preference Distribution Priority to dividends per preference share ( Preference Distribution ) shall: From the first payment of dividends (see below) after the preference shares were registered at the Swedish Companies Registration Office until the last payment of dividends before the Annual General Meeting in 2017, amount to twelve (12) SEK every quarter of a year, not totalling more than 48 SEK per annum with record dates as set out below. From the first payment of dividends after the Annual General Meeting in 2017 and for the time that follows, the Preference Distribution shall be increased by a total of four (4) SEK per annum evenly divided on quarterly payments. Adjustment will be made in connection with the first payment after each Annual General Meeting. Payment of dividends Payments of dividends on preference shares shall be made quarterly. The record dates shall be January 31, April 30, July 31 and October 31. If such a record date is not a banking day, i.e. a day that is not a Saturday, Sunday or a public holiday, the record date will be the closest preceding banking day. Payments of dividends shall be made on the third banking day after the record date. The first time payments of dividends to the preference shares may be made is on the first payment day following the first record date after the preference shares are issued. Calculation of Retained Amounts If no dividends are paid on preference shares, or if only dividends of less than the Preference Distribution have been paid, the preference shares shall, on the condition that the General Meeting resolves to pay dividends, confer a right on the preference shares to receive, in addition to future Preference Distribution, an amount equally divided on each preference share, constituting the difference between what should have been paid and the actual amount that was paid ( Retained Amounts ) before dividends are paid on ordinary shares. Retained Amounts, shall be adjusted upwards by a factor corresponding to an annual interest rate of twenty (20) per cent, whereupon upward adjustment shall take place beginning from the quarterly date on which the payment of dividends has taken place (or should have taken place, in the event that no dividend has been paid at all). Recalculation at certain events of the company In the case of a change in the number of preference shares through a share split or a reverse share split or other company events that have a similar effect, the amount of dividends that the preference share is entitled to according to in these Articles of Association shall be recalculated to reflect this change. Miscellaneous Except as set out above, the preference shares do not entitle the holder to receive any other dividends. 12 Redemption Redemption of preferred shares A reduction of share capital, although not to a level below the minimum share capital, may be done through the redemption of a certain amount of or all preference shares after a decision of the General Meeting. When a redemption decision is made, an amount corresponding to the amount of the reduction of the share capital shall be set aside to the statutory reserve if for that purpose necessary funds are available. 68 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

69 The shares will be redeemed pro rata to the number of preference shares held at the time the redemption resolution is passed by the General Meeting. If the allocation, as stated above, does not amount to an even number of shares, the Board of Directors shall allocate the additional preference shares to be redeemed. If the resolution by the General Meeting is supported by all preference shareholders, the General Meeting can, however, decide which preference shares are to be redeemed. The redemption price shall be an amount, evenly divided upon each redeemed preference share, as follows: From the first record date after the Annual General Meeting in 2012 until the first quarterly record date for dividends after the Annual General Meeting in 2015, of SEK 560 per preference share with addition of Retained Amounts. From the first quarterly record date for dividends after the Annual General Meeting in 2015 and for the time that follows, an amount of SEK 480 with addition of Retained Amounts. An owner of preference shares that are to be redeemed, is obliged to, within three months after receiving a written notification regarding the redemption resolution by the General Meeting or, where approval of the Swedish Companies Registration Office or the court is required, following notification that the Swedish Companies Registration Office or the court s final resolution has been registered, accept the redemption price. Redemption of Class C shares The Board of Directors retains the right to decide upon a reduction in share capital via the redemption of all class C shares, although not to a level below the minimum share capital prescribed in these Articles of Association. Upon redemption, holders of class C shares shall be required to accept a redemption price for the share of an amount corresponding to the share s quotient value, indexed with a rate equal to STIBOR 1M, with the addition of three (3) percentage points, running from the share subscription payment due date until such payment is made. STIBOR 1M is determined for the first time on the day the share subscription payment falls due. Before the decision to reduce the share capital is executed, an amount equal to the reduction shall be allocated by decision of the Board to a reserve fund, if the requisite funds are available. 13 Liquidation of the Company In the event the Company is liquidated, the preference shares shall have priority over the ordinary shares to receive an amount per preference share corresponding to the redemption amount according to 12 from the Company s assets at the time of the liquidation, equally divided between the preference shares, following which, any remaining proceeds are to be distributed among the ordinary shares. The preference shares are not entitled to any other distribution in connection with a liquidation of the Company. Class C shares are not entitled to any distribution in connection with a liquidation of the Company. 14 Record date provision The shareholder or nominee who at the stipulated record date is entered in the share register and noted in the list of shareholders in accordance with Chapter 4 of the Swedish Financial Instruments Act (1998:1479) or if the person is noted in a record account in accordance with Chapter 4, Section 18, Paragraph 1, 6-8 of said Act, will be assumed to be entitled to exercise the rights stated in Chapter 4, Section 39 of the Swedish Companies Act (2005:551). 15 Collection of proxies The Board of Directors may collect proxies at the expense of the Company in accordance with the procedure described in Chapter 7, Section 4, Paragraph 2 of the Swedish Companies Act (2005:551). INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 69

70 LEGAL ISSUES AND OTHER INFORMATION Group structure Eniro AB (publ) is the Parent Company of the Group. The table below lists Eniro s directly owned subsidiaries. Subsidiary Country Shares (%) TIM Varumärke AB Sweden 100 Eniro Danmark A/S Denmark 100 Respons Group AB Sweden 100 Eniro International AB Sweden 100 Eniro Sverige AB Sweden 100 Eniro Initiatives AB Sweden 100 Leta Information Eniro AB Sweden 100 Eniro Treasury AB Sweden 100 Oy Eniro Finland Ab Finland 100 Eniro Polska Sp.z.o.o Poland 100 Significant agreements The following is a summary of the significant agreements that Eniro or its subsidiaries have entered into or extended in the past two years and that contain rights or obligations that are of material significance to the Group as of the date of this Prospectus. SUBSCRIPTION UNDERTAKINGS The Company s shareholders Nortal Capital AB (a company controlled by Staffan Persson, a director in the Company), Danske Capital AB, M2 Capital Management AB and Lars-Johan Jarnheimer who jointly represent around 18 per cent of the shares and votes, have undertaken to Eniro and ABG to subscribe and pay for their respective pro rata shares of the Rights Issue. The subscription undertakings were entered into on 5 February Nortal Capital AB and Danske Capital AB will receive compensation for their undertakings corresponding to the other guarantors. Upon the Company s request, the question on the compensation has been reviewed by the Securities Council in the statement AMN 2015:02 and the Board has carefully considered the council s statement prior to deciding to approve the compensations. The shareholders which have entered into the subscription undertakings can be reached through ABG on the following address: Regeringsgatan 65, Box 7415, SE Stockholm. GUARANTEE COMMITMENTS The Company has received guarantee commitments from Bure Equity AB, Catella Fondförvaltning AB, Tedde Jeansson, SSE Capital, MGA Holding AB, Carl Rosvall, Schött & Tour Capital AB, Kristian Kierkegaard Holding AB, LMK Ventures AB, Myacom Investment AB, Göran Källebo and Shaps Capital AB ( the Guarantors ), under which the Guarantors have pledged, on certain conditions and if all new shares in the Rights Issue have not been subscribed for or subscribed for but not paid in due time, to subscribe and pay for new shares up to a total amount corresponding to approximately 82 per cent of the total issue amount. The guarantee commitments were entered into on February 4 and February 6, As compensation for their commitments, the Guarantors will receive a compensation amount corresponding to 5 per cent of the guaranteed amount The Guarantors can be reached through ABG at the following address: Regeringsgatan 65, Box 7415, SE Stockholm. In total, the compensation to the Guarantors, Nortal Capital AB and Danske Capital AB amounts to approximately SEK 23 million. LOAN AGREEMENT On 30 November 2010, Eniro entered an loan agreement with, among others, Danske Bank A/S, Denmark, Sverige Filial, DNB Bank ASA, Sweden Branch, Handelsbanken Capital Markets, Svenska Handelsbanken AB (publ), Merchant Banking, Skandinaviska Enskilda Banken AB (publ), Nordea Bank AB (publ) and Swedbank AB (publ). The loan agreement has since been changed on a number of occasions. For the Rights Issue, the Company has agreed with the lenders on certain changes in the loan agreement through an amendment agreement. The changes in the loan agreement will enter into force only after the Rights Issue and the convertible issue of a nominal SEK 500 million have been carried out and certain other conditions for execution as stated in the amendment agreement are met. 70 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

71 The loan is divided into four so-called tranches, which currently amount to the following loan amounts: Tranche A1 of approximately SEK 987 million, A2 of approximately NOK 356 million and A3 of approximately DKK 71 million and B of SEK 800 million. In connection with the changed loan agreement entering into effect, the loan with be repaid through the issue funds raised down to around the following amounts: Tranche A1 of approximately SEK 761 million, A2 of approximately NOK 250 million and A3 of approximately DKK 50 million and B of SEK 600 million. If the changed loan agreement does not enter into effect, the entire proceeds of the issue after issue expenses will be used for the repayment of the loan in accordance with the current loan agreement. In such a case, an additional repayment of SEK 87.5 million falls due for payment on 30 April The loan agreement also contains a revolving credit facility that can be used in various currencies up to a limit amount corresponding to SEK 250 million. If the changed loan agreement enters into effect, the limit amount for the credit facility will be SEK 150 million. The loan falls due for final payment on 27 May If the amendment agreement enters into effect, the final maturity date will be moved to 31 December The agreed annual repayment on the loan is currently approximately SEK 375 million. The repayment is divided up into six-month payments. If the changed loan agreement enters into effect, the annual repayment amount will initially be SEK 150 million. As from of 30 June 2016, the annual repayment will increase by SEK 25 million to approximately SEK 175 million. Eniro can terminate the facilities or repay the outstanding loan in advance (in part or in full) if Eniro would so desire. The loan agreement contains conditions regarding compulsory repayment in advance regarding revenue from divestments, insurance cases and capital market transactions. In the amendment agreement, it has been especially agreed that the higher of (i) the total proceeds from the Rights Issue and the convertible issue less reasonable transaction costs and SEK 200 million and (ii) SEK 650 million, shall be used for repayment of the loan. In addition to this, it has been agreed that the issue proceeds from certain possible future capital market transactions used to redeem the Company s preference shares shall be exempt from compulsory repayment when the changed loan agreement enters into effect. The loan agreement also contains conditions regarding compulsory advance repayment upon a delisting of Eniro s shares and ownership changes in Eniro resulting in more than 30 per cent of the votes in Eniro being acquired by one person who alone or together with another person in the same group or a related party or acts together with that person. In addition to this, 50 per cent of so-called surplus cash flow shall be used for compulsory advance repayment. Under the conditions of the loan agreement, this requirement applies until the total net debt is not more than twice as large as EBITDA at a Group level. Thereafter, the obligation to use surplus cash flow for repayment ceases. If the changed loan agreement enters into effect, 75 per cent of the surplus cash flow up to SEK 100 million and 50 per cent of the part in excess of SEK 100 million shall instead be used for compulsory advance repayment. Under the conditions of the changed loan agreement, this requirement applies until the total net debt is lower than EBITDA at a Group level. Thereafter, the obligation to use surplus cash flow for repayment ceases under the changed loan agreement. Interest on the loan is set by a reference interest rate with the addition of a margin. For loans in Tranche A1-3 and the revolving credit facilities, the margin is initially 3.75 percentage points. If the quota between the total net debt and EBITDA drops below 2, the margin is decreased to 3.00 percentage points. For loans in Tranche B, the margin is 5.00 percentage points. If the changed loan agreement enters into effect, the margin for Tranche A1-3 and the revolving credit facilities is initially 4.00 percentage points. If the quota between the total net debt and EBITDA drops below 1.5, the margin is decreased to 3.50 percentage points. For Tranche B, the margin is initially 5.00 percentage points. The margin will after one year be increased gradually on three occasions to amount to 7.50 percentage points after 1.5 years. Shares in Group companies that are directly owned by Eniro, all significant Group companies (i.e. each Group company with an EBITDA corresponding to 5 per cent or more of EBITDA at a Group level, have gross assets or a turnover corresponding to 5 per cent or more of the Group s gross assets or turnover) and all Group companies that own or hold rights to search engines, databases or other assets that are significant to the Group s operations have been pledged as collateral for obligations under the loan agreement and associated financing documentation. Eniro and the significant Group companies also guarantee the other Group companies obligations under the loan agreement and associated financing documentation. In addition to this, collateral has been pledged over all significant brands and significant intra-group loans. There is also an obligation under the loan agreement to pledge security over all other significant assets acquired after the loan agreement is entered into. The loan agreement contains conditions regarding guarantees, commitments and breach of contract that are customary for financing transactions with a high level of indebtedness. These conditions include limitations regarding further borrowing, guarantee commitments and pledges, significant changes to the operations and acquisitions and divestments. The loan agreement also contains a limitation INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 71

72 regarding the right for the Board of Directors to propose dividends. However, the limitation does not apply to dividends on the Company s preference shares on condition that such a dividend does not exceed a certain level and that there are no delays in payment under the financing documents. The following financial commitments (covenants) are included in the loan agreement: i. a requirement of a certain minimum relation between cash flow and interest and repayments on a Group level, ii. a requirement of a certain minimum relation between EBITDA and net financial items on a Group level, iii. a requirement on a certain highest permitted relation ship between senior net debt and EBITDA on a Group level, and iv. a requirement that annual investments do not exceed a certain amount. The financial commitments listed in i.-iii. above are measured quarterly on a rolling 12-month basis. The financial commitments are calculated based on how the financial terms are defined in the loan agreement. These definitions are to some extent tailored to the loan agreement and accordingly differ from the definitions used in Eniro s financial reporting. If the changed loan agreement enters into effect, some indebtedness, including convertibles, will be exempt from the calculation of iii. above. The changed loan agreement will also entail some relief from the requirement as per the financial commitments compared with those applicable in the loan agreement today. The loan agreement contains a right for a lender to transfer its rights under the loan agreement to another bank or financial institution or a so-called trust, fund or other unit that is regularly engaged in or is established for the purpose of providing, acquiring or investing in loans, securities or other financial assets. Eniro s consent is not required for such a transfer. CONVERTIBLES The General Meeting on March 9, 2015 resolved to approve the decision made by the Board of Directors on February 5, 2015 for a new issue of convertibles at a nominal amount of SEK 500 M. For further information regarding the convertibles, refer to section The Share, Share Capital and Ownership Structure - Convertibles above. AGREEMENT WITH GOOGLE Eniro Sverige AB and Google Ireland Limited entered an agreement, dated December 12, 2013, under which Eniro is appointed a non-exclusive Google AdWords Premier SMB Partner in Sweden, Denmark and Norway. The collaboration makes it possible for Eniro to sell Google AdWords products together with Eniro s own products. The agreement runs to the end of December 31, 2015 and can only be terminated by the parties under special circumstances. Eniro entered an agreement with Google Ireland Limited, dated December 6, 2012, that in part related to providing sponsored links (backfill) to some of the Group s sites. The original agreement period expired November 30, However, the parties entered an amendment agreement in December 2014 under which the parties agreed to extend the agreement up to and including January 31, Thereafter, Eniro and some of its subsidiaries entered new agreements with Google that apply up to an including February 1, 2015 and until further notice with a period of notice of 10 days. COOPERATION AGREEMENT WITH ETISALAT In January 2014, Eniro Global AB entered a cooperation agreement with Etisalat Information Services LLC ( Etisalat ), a company based in the United Arab Emirates that provides digital search services, among others. Through the agreement, Etisalat is given a non-exclusive license to use Eniro s platform for Local Searches in its operations in the United Arab Emirates. For the provisioning of the license, Etisalat shall pay a license fee to Eniro Global AB. The agreement initially applies for 36 months as of January 14, If the agreement is not terminated by either party, it is extended by 12 months at a time with a six-month mutual period of notice. LICENSE AND PRODUCTION AGREEMENT WITH METRIA In March 2014, Eniro Sverige AB entered a license and production agreement with Metria AB. Under the agreement, Eniro provides a non-exclusive license to use Metria provided geographic information such as maps, 72 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

73 coordinates, addresses and orthocorrected aviation photos. For the receipt of the license, Eniro Sverige AB shall pay a fixed fee to Metria. The agreement runs until April 1, If the agreement is not terminated by Eniro no later than six months before the end of the agreement period, the agreement is extended by 12 months and thereafter expires automatically. OUTSOURCING AGREEMENT WITH KEYSTEP A.S. In June 2012, Eniro Initiatives AB and Keystep A.S ( Keystep ) entered a service provisioning agreement regarding a contract for IT services as of August 20, Under the agreement, Keystep is responsible for managing operations, maintenance and improvements of the systems, ensuring high availability and optimal performance in Eniro s applications, databases and middleware. The agreement runs until September 30, In June 2014, parties entered into an amendment agreement whereby the term is prolonged until 30 September 2018 with the possibility for further prolongations of one year at the time, however until 30 September 2020 at the latest. Eniro Initiatives AB has the right to terminate all or part of the agreement with a three-month period of notice. Such termination entails agreed termination fees. DIVESTMENT OF SCANDINAVIA ONLINE AS Eniro Holding AS and Aller Media AS entered a share assignment agreement on March 27, 2014 under which Eniro Holding AS divested its total holdings of 1,093,739 shares in Scandinavia Online AS, corresponding to 50.1 per cent of the total number of shares in Scandinavia Online AS, to Aller Media AS. The purchase consideration amounted to approximately SEK 50 M. In connection with entering the share assignment agreement, a cooperation agreement dated December 15, 2006 between the parties ceased to apply. DIVESTMENT OF CERTAIN ASSETS ATTRIBUTABLE TO THE OPERATIONS KRAK MARKEDSDATA On June 30, 2014, Eniro Danmark AS and NN Markedsdata ApS entered a business assignment agreement under which Eniro Danmark AS assigned all assets attributable to the operations Krak Markedsdata to NN Markedsdata ApS. The purchase consideration amounted to approximately SEK 12 M. DIVESTMENT OF INTOUCH In March 2014, Eniro Norge AS and Link Mobility ASA entered a business assignment agreement under which Eniro Norge AS divested the Norwegian B2B-service InTouch. InTouch is a business service whose principal business revolves around the publication of company directories. The sale comprised brands and other intellectual property rights, customer contracts and personnel. The purchase consideration amounted to SEK 35 million. Legal proceedings and arbitration proceedings The company has a dispute with the former CEO Johan Lindgren regarding compensation in connection with the end of his employment. The Company has reserved provisions for the main potential costs due to the dispute and assess that the dispute will not have a significant effect on Eniro s financial position or profitability. In September 2014, an investigation regarding the Company by Nasdaq Stockholm regarding potential errors in the Company s historic revenue recognition and insufficient disclosure of information to the market and investors. Nasdaq Stockholm has in a petition notified the Company that the exchange deems that the Company has breached certain provisions of the Nasdaq Stockholm s Rule Book for Issuers ( the Rule Book ). According to Nasdaq Stockholm, Eniro s financial reports of 2013 have contained significant errors and these errors could have been investigated and corrected by the Company at an earlier stage. Further, Eniro has according to Nasdaq Stockholm failed in its internal control. Nasdaq Stockholm has notified that this matter in its opinion should be submitted to Nasdaq Stockholm s Disciplinary Committee for further assessment and determination of any potential sanction. Before the decision is made on whether the matter shall be submitted to the Disciplinary Committee, the Company have been given the opportunity to counter the exchange s opinions. As of the date of the Prospectus, Eniro has not countered the exchange s opinions. If the exchange s Disciplinary Committee finds the Company responsibly of the abovementioned breaches of the Rule Book, the Disciplinary Committee can decide on sanctions in accordance with the Rule Book. On February 20, 2015, the Consumer Ombudsman sued the Company s subsidiary Eniro AB in the Market Court. In the application for summons, the Consumer Ombudsman moves that the Market Court order Eniro AB, upon penalty of find, in the marketing of directory assistance to consumers by phone and SMS to state the cost of the directory assistance service before the agreement with the consumer is entered into. Even if the outcome of the matter may entail changes to Eniro s operations, the Company however assesses that the matter will not currently have significant effects on Eniro s financial position or profitability. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 73

74 In April 2014, the National Post and Telecom Agency ordered Eniro AB to cease providing information other than phone subscriptions in the scope of the directory assistance service , and to report the measures the Company has taken to comply with the order. Eniro has reported what steps it has taken to comply with the order and is awaiting final decision from the National Post and Telecom Agency. Eniro s assessment is that the matter will not have significant effects on Eniro s financial position or profitability. Eniro has disputes with earlier trading agents of the Company since it in 2010 liquidated the German subsidiary Eniro Windhager Medien GmbH, regarding a claimed right for the previous trading agents to receive pension benefits from Eniro. Eniro has also been informed that additional agents will sue Eniro on the grounds of similar claims. The Company s assessment is, however, that the disputes will not have significant effects on Eniro s financial position or profitability. In addition to the above, Eniro has not been a party to any legal proceedings or arbitration proceedings in the past 12 months that have had or could have significant effects on Eniro s financial position or profitability. In addition to the above, Eniro has also not been informed of claims that may lead to the Company becoming a party to such a process or proceeding. Insurance situation Eniro considers that the operations and other assets are insured in accordance with customary market standards for the industry and fulfills all applicable legal and contractual requirements Eniro is subject to. Intellectual property rights With the support of a combination of various intellectual property laws and, as necessary, licensing agreements, Eniro registers and protects its company names, domain names, brands and other trademarks in the countries in which Eniro conducts operations. Eniro also enters into confidentiality agreements and agreements on the right to intellectual property rights that employees and consultants produce, and confidentiality agreements with cooperation partners and suppliers and monitors the use of intellectual property protected technology over which Eniro has control. Eniro s databases are protected by the respective country s laws in the countries in which Eniro is active. No patent or license can individually be viewed as material to Eniro s operations. The databases are considered protected under copyright protection for databases. Transactions with related parties In the past three fiscal years, Eniro has not been a party to any agreement or transaction with any related party to the Company, except as regards compensation for senior executives. Also refer to the section Board of Directors, senior executives and auditors - Remuneration of senior executives. Employees At December 31, 2014, there were 2,256 full-time employees. The following table shows the number of employees at Eniro at the given date. Dec. 31, 2014 Dec. 31, 2013 Dec. 31, 2012 Sweden incl. other Norway Denmark Poland Local Search incl. 1,906 2,411 2,598 other Sweden Norway Finland Voice Total Group 2,256 2,816 3,187 ABG s interests ABG is serving as the financial advisor in connection with the Rights Issue. ABG has provided the Company advice in connection with the structuring and planning of the Rights Issue and receives compensation for such advice. ABG has carried out and can also carry out in the future various financial advisory services for the 74 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

75 Company and its related parties, for which they have received and can be expected to receive remuneration and other compensation. Information from third parties In the Prospectus, information from third parties has been accurately repeated and, insofar as the Company is aware and can ascertain through a comparison with other information published by the affected third party, no information has been omitted in a manner that would cause the information provided to be incorrect or misleading. Lock-up agreements Nortal Capital AB (a company controlled by Staffan Persson, a member of the board of the Company), Danske Capital AB, M2 Capital Management AB and Lars-Johan Jarnheimer have undertaken towards ABG not to reduce their holding of shares in the Company from 5 February 2015, when their subscription undertakings were entered into, to and including the public announcement of the results of the Rights Issue. Nortal Capital AB may however transfer shares to Zimbrine Holding BV. Documents incorporated by references The following documents, which previously have been made public, are incorporated into this Prospectus be reference and thereby form part of the Prospectus. The parts of the financial information that have not been incorporated through reference are either not relevant to an investor or are found elsewhere in the Prospectus. The Company s audited annual report for the 2014 fiscal year. The reference is only made to the profit and loss statement on page 54, the balance sheet on page 55, the cash flow analysis on page 57, notes on pages and the audit report on pages The Company s audited annual report for the 2013 fiscal year. The reference is only made to the profit and loss statement on page 68, the balance sheet on page 69, the cash flow analysis on page 71, notes on pages and the audit report on page 90. The Company s audited annual report for the 2012 fiscal year. The reference is only made to the profit and loss statement on page 60, the balance sheet on page 61, the cash flow analysis on page 63, notes on pages and the audit report on page 95. Except for Eniro s audited annual reports for the 2012, 2013 and 2014 fiscal years, ni onformation in this Prospecus has been reviewed or audited by the Company s auditor. As further stated under the heading Selected financial information on page 43, the numbers for the fiscal year 2013 have subsequently been recalculated. For these numbers, reference is made to the annual report for Documents available for review Copies of the following documents can be reviewed during the entire period of validity of the Prospectus at the Company s head office, Gustav III:s Boulevard 40, SE Stockholm, during ordinary office hours on weekdays: The Articles of Association for the Company. The documents incorporated by reference. This Prospectus. The documents above will also be available on the Company website, Eniro s financial report for 2014 contains an adverse audit report The Company s financial report for the 2014 fiscal year contains an adverse audit report. In the audit report, the auditors have stated that they do not recommend that the former President and CEO Johan Lindgren shall be discharged from liability for the 2014 fiscal year. The auditors further state that they recommend that the members of the board and the current President and CEO are discharged from liability for the fiscal year The background for the adverse audit report is set out below. According to information arising during 2014, the Company s former Managing Director, Johan Lindgren, had been informed in November 2013 by personnel within the Company that the Company s revenue recognition could, in material respect, be erroneous. No information has arisen during the audit indicating that Johan INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 75

76 Lindgren instigated an investigation as to whether there were any grounds for the claims and, as far as the Company s auditors can assess, neither did he inform the board of directors that he had received information that the accounting could contain material misstatements. Chapter 8, Section 29 of the Swedish Companies Act stipulates that the Managing Director is to undertake such measures as necessary to ensure that the company s accounts are maintained pursuant to law and that the management of funds is conducted in a sound manner. According to the opinion of the Company s auditor, Johan Lindgren has, regardless of whether the claims of erroneous accounting were correct or not, disregarded his obligations according to the abovementioned regulation by failing to undertake the appropriate investigative measures on the basis of the information provided to him. Nor did he inform the Company s board of directors of the information he had received regarding material misstatements in the revenue recognition. During 2014, the board of directors received information regarding the claimed errors and immediately instigated an investigation of the claims. It could be concluded that the accounts for 2013 were erroneous and that the errors had continued during These errors were corrected in the Company s interim report for the third quarter The costs for the investigations undertaken during the year amount to at least of SEK 5 million. The opinion of the auditors is that a significant portion of these costs could have been avoided if the claimed errors had been investigated in November 2013, that is, when they were made known to Johan Lindgren. According to the auditors, Johan Lindgren s negligence in failing to instigate an investigation into the claims of errors in revenue recognition and his negligence in failing to inform the board of directors of the information he had received have, as a consequence, resulted in economic damage which is not insignificant. This has led to that the board of directors reported Johan Lindgren to the police on the grounds of suspicion of crime and that a prosecutor has initiated a preliminary inquiry. 76 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

77 CERTAIN SWEDISH TAX ISSUES Certain Swedish tax rules of relevance due to the Rights Issue are summarized below. The summary is based on currently applicable legislation and is only intended as general information for investors who, unless otherwise indicated, are residents of Sweden for tax purposes. The presentation does not address situations when securities are held as current assets in business operations or held by, inter alia, partnerships, investment companies, insurance companies or investment funds. Nor does it address: the special rules on tax-free capital gains (including non-deductible capital losses) and dividends in the corporate sector when the investor holds shares which are deemed to be held for business purposes (Sw. näringsbetingade andelar), the specific rules that could be applicable to shares acquired on the basis of holdings in companies that are, or have been, closely held companies (Sw. fåmansföretag), shares, subscription rights or other equity related securities that are held through a so called investment savings account (Sw. investeringssparkonto). The tax treatment of each individual holder of securities depends in part on his/her particular circumstances. Special tax consequences that are not described below may become applicable for certain categories of taxpayers. Each investor should therefore consult with a tax advisor about the tax consequences that may arise for him or her, including the application and effect of foreign tax rules and tax treaties. General INDIVIDUALS For individuals, all capital income such as dividends and capital gains are taxed in the capital income category. The tax rate is 30 per cent. Capital gains and losses are calculated as the difference between the sale proceeds, less selling expenses, and the tax basis (Sw. omkostnadsbeloppet). The tax basis for all shares of the same class and type shall be added together and computed collectively in accordance with the so-called average method (Sw. genomsnittsmetoden). Upon application of the average method, shares of various series in the same company do not constitute shares of the same class and type. In addition, paid subscribed shares are not regarded as being of the same class and type as the existing shares in the Company until the resolution on the share issue has been registered with the Swedish Companies Registration Office. As an alternative, the so-called standard method (Sw. schablonmetoden) may be used at the disposal of listed shares. This method implies that the tax basis may be determined at 20 per cent of the sale proceeds less selling expenses. Capital losses on listed shares and other listed securities that are taxed as shares (e.g. warrants and paid subscribed shares) may be deducted fully against taxable capital gains in the same fiscal year on shares and listed securities that are taxed as shares (although not participations in security funds or special funds only containing Swedish bonds, so-called fixed income funds). Capital losses not absorbed by these set-off rules are deductible at 70 per cent in the capital income category. If a deficit arises in the capital income category, a tax reduction is granted against tax on income from employment and business operations as well as property tax and municipal property charges (Sw. fastighetsavgift). The tax reduction may be granted with 30 per cent of the part of the deficit not exceeding SEK 100,000 and 21 per cent on losses in excess of this amount. Losses cannot be saved for later tax years. For individuals, a preliminary tax of 30 per cent is withheld on dividends. The preliminary tax is normally withheld by Euroclear or, in respect of nominee-registered shares, by the nominee. Limited liability companies For limited liability companies all income, including taxable capital gains and dividends, is taxed as income from business operations at a rate of 22 per cent. Capital gains and capital losses are calculated in the same manner as for individuals as described above. INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 77

78 Capital losses on shares and subscription rights (Sw. teckningsrätter) may only be offset against taxable capital gains on shares and other securities taxed as shares. If a capital loss cannot be deducted by the company that has incurred the loss, it can - if certain conditions are met - be deducted against capital gains on shares and other securities taxed as shares by another group company provided the companies can tax consolidate through group contributions. Capital losses that cannot be utilized in a particular year may be offset against capital gains on securities taxed as shares during subsequent tax years without any limitation in time. Rights Issue SUBSCRIPTION OF NEW SHARES Taxation is not triggered for shareholders that exercise their received subscription rights to subscribe for shares in the Rights Issue. The shares tax basis consists of the subscription price. DIVESTMENT OF RECEIVED SUBSCRIPTION RIGHTS Shareholders who do not wish to exercise their preferential right to participate in the Rights Issue can sell their subscription rights. Taxable capital gains must then be calculated. Subscription rights deriving from holdings in the Company are deemed to be acquired for SEK 0. The standard method may not be applied to determine the tax basis in this situation. The entire sale proceeds less selling expenses are thus taxable. The tax basis for the original shares is not affected. A subscription right that is not exercised or sold and therefore expires is considered sold for SEK 0. Since subscription rights acquired in the manner stated above are considered acquired for SEK 0, neither a capital gain nor loss arises. ACQUIRED SUBSCRIPTION RIGHTS If the divested subscription rights have been bought or otherwise acquired against payment, the consideration constitutes the acquisition cost. Exercise of the subscription rights for subscription of shares triggers no taxation. If subscription rights exercised for subscription for shares have been purchased, the price paid for these subscription rights is added in the calculation of the tax basis of the shares. The tax basis for the subscription rights is calculated by applying the average method. The standard method may be applied in the calculation of the tax basis for listed subscription rights acquired in the way stated here. A subscription right that is not exercised or sold and therefore expires is considered sold for SEK 0. SHAREHOLDERS WHO ARE LIMITED TAXPAYERS IN SWEDEN Swedish withholding tax is normally withheld on dividends paid by a Swedish company to shareholders not resident in Sweden for tax purposes. The same withholding tax applies to certain other payments from a Swedish limited liability company, for example in connection with the redemption of shares and repurchase of shares through an offer directed to all shareholders or all holders of shares of a certain class. The tax rate is 30 per cent. This tax rate is, however, generally reduced through tax treaties for the avoidance of double taxation. Deductions for withholding tax are normally made by Euroclear or, for nominee-registered shares, by the nominee. Shareholders or holders of subscription rights not resident in Sweden for tax purposes, and that do not conduct business through a permanent establishment in Sweden, are normally not liable for capital gains taxation in Sweden upon disposal of shares, paid subscribed shares and subscription rights. The holder can, however, be subject to taxation in his or her country of residence. According to a special rule, individuals not resident in Sweden for tax purposes are, however, subject to Swedish capital gains taxation upon the disposal of shares and subscription rights, if they at some time during the calendar year of the disposal or the previous ten calendar years have been resident in Sweden or have had a habitual abode in Sweden. The applicability of this rule is, however, limited through tax treaties in many cases. 78 INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL)

79 ADDRESSES Eniro AB (publ) Gustav III:s Boulevard 40 SE Stockholm Tel: Financial advisor ABG Sundal Collier AB Regeringsgatan 65, Box 7415 SE Stockholm Legal advisor Gernandt & Danielsson Advokatbyrå KB Hamngatan 2, Box 5747 SE Stockholm Auditors PricewaterhouseCoopers AB Torsgatan 21 SE Stockholm Issuing institute Skandinaviska Enskilda Banken AB (publ) Kungsträdgårdsgatan 8 SE Stockholm Central securities depository Euroclear Sweden AB Box 7822 SE Stockholm INVITATION TO SUBSCRIBE FOR ORDINARY SHARES IN ENIRO AB (PUBL) 79