Seat CEO to focus on Italy for growth

PARIS (Reuters) - Italian yellow pages publisher Seat Pagine Gialle PGIT.MI is ready to sell its businesses outside Italy as it shifts strategy to tap growth in its home country, Chief Executive Luca Majocchi said.

Seat Pagine Gialle CEO Luca Majocci addresses the Reuters Technology summit in Paris May 21, 2008. REUTERS/Mal Langsdon

“Internationally we are more opportunistic now,” Majocchi told the Reuters Technology, Media and Telecoms Summit in Paris on Wednesday.

“We are listening for potential interest. Seat Italy is strategic. Anything outside this perimeter is potentially not strategic.”

Seat, Italy’s third-largest media group, is shifting its attention back to Italy to mine a boom in Internet use in the country instead of looking for growth abroad. That means units Telegate in Germany, Thomson Directories in Britain and Europages in France are on the auction block.

The non-Italian units together account for 80 million euros ($126.1 million) in earnings before interest, tax, depreciation and amortization (EBITDA), Majocchi said. He declined to give the units a value, saying they each had different multiples.

Seat had not been formally approached by a potential buyer, Majocchi said.

Rival Yell Group Plc YELL.L said on Tuesday it was not interested in Thomson Directories because of likely opposition from antitrust authorities.

Seat publishes print and Internet directories and owns directory assistance numbers the public can call for a fee in Italy, France, Germany and Britain. Italy is Seat’s largest and most profitable operation.

Majocchi’s shift to focus on Italy comes after Internet use suddenly soared in the country.

Only 30 percent of Italian adults used the Internet in 2006 compared with almost 50 percent in France and Britain. Just a year later, the proportion of Italian adults using the Internet jumped to 42 percent thanks to massive campaigns by Italian broadband providers, Majocchi said.


“This totally changed our perspective,” he said.

As a result, Seat will sell Internet ads as a stand-alone product this year instead of as an addition to print ads and will expand its sales force by 10 percent to 2,200, many of them focused on Internet sales, Majocchi said.

Seat expects 2008 to be a transitional year with sales and profit remaining “stable” - with a small decline in print sales and an increase in Internet sales - and to see the results of its new Internet offers in 2009, Majocchi said.

One concern was the slowdown in Italy’s economy, which may reduce the capacity of small and medium enterprises to buy ads. The International Monetary Fund forecast the Italian economy would grow 0.3 percent this year and next.

“I agree with the IMF that growth will be very low or we will even see a recession,” unless the new government, elected in April, manages to increase business and consumer confidence, Majocchi said.

He also dismissed Italian press reports his job was at risk.

Asked if he thought his role was safe and that he would stay on to oversee Seat’s strategic shift towards the Internet, Majocchi said: “I’m absolutely confident as I know the facts.”

Following a leveraged buyout in 2003, Seat is controlled by private equity firms BC Partners, Capital Partners, Investitori Associati and Permira PERM.UL, who brought in Majocchi from Italian bank UniCredit.

Reporting by Mathias Wildt; Editing by James Regan