Francotyp-Postalia Holding AG — Earnings Release 2007

Aug 30, 2007

News Details

Corporate | 30 August 2007 06:50

Francotyp-Postalia Holding AG: Francotyp-Postalia Holding AG expects further growth in 2007 following strong second quarter

Francotyp-Postalia Holding AG / Half Year Results/Half Year Results

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Birkenwerder, Germany, August 30, 2007

Francotyp-Postalia Holding AG expects further growth in 2007 following
strong second quarter

• Revenues up by 10.7% to €37.4 million in the second quarter of 2007
• Mailroom business: 5% growth
• Mailstream business: Double-digit growth

Birkenwerder, Germany – Francotyp-Postalia Holding AG has today published
its report for the second quarter of 2007. There have been no material
changes from the preliminary numbers that were announced on August 9, 2007.
In the second quarter of 2007, the company revenues increased by 10.7% to
€37.4 million, as opposed to €33.8 million for the same quarter the year
before. Consolidated revenues for the first half of 2007 rose by 5.1% to
€75.1 million.

Mailroom business

Revenues in mailroom business (franking and inserting) increased by 5.3% to
€35.6 million in the second quarter of 2007, as opposed to €33.8 million
for the corresponding quarter the year before. Thereof, €0.6 million of
this total was attributable to a natural hedge, a positive effect due to a
partial payback of a U.S.-dollar denominated loan, with an effect on
profit. Regionally, the FP Group succeeded in growing in both Europe and
the United States. In the U.S., revenues in the first half of 2007 rose by
11.1% to US$27.1 million. In Europe (excluding Germany), the FP Group
posted a revenue growth of 10.4% to €24.9 million. As anticipated, revenues
in Germany remained at a stable level in the first half of 2007 due to the
effects of decertification and the new postage tables in 2006.

The new centormail franking machine is boosting new activity in mailroom
business. This new machine for the lower B segment was launched on the U.S.
market early in the second quarter of 2007.

Mailstream business

The mailstream business acquired in late 2006 (which primary activity
consists of consolidating and outsourcing outbound mail, as well as the
corresponding software solutions) contributed with €1.8 million in revenues
in the second quarter of 2007. Following the strategy, Francotyp-Postalia
Holding AG opened a further freesort GmbH branch office in Stuttgart.
Together with the locations in Berlin, Fürth and Cologne that were obtained
through the partnership agreement with Siemens IT Solutions & Services GmbH
& Co. OHG (SIS), freesort is now represented nationwide.

EBITDA

Adjusted for the natural hedge, earnings before interest, taxes,
depreciation and amortization (EBITDA) rose by 7.1% year-on-year to €8.4
million in the second quarter of 2007. The adjusted EBITDA margin stands at
22.3%.

On a six-month comparison basis, there was a change in adjusted EBITDA from
€18.0 million to €15.8 in the first half of 2007. This decline was
essentially attributable to the effects of the decertification program in
Germany in the first quarter of 2006, the sales channel investments in the
USA, Great Britain and Canada, the increase of rental business, the change
in product mix and the incurred start-up costs in mailstream business and
to a weaker U.S. dollar, with the latter impacting on profitability by €1.3
million.

Outlook

Francotyp-Postalia Holding AG forecasts a revenue growth of 5% before the
impact of currency effects in mailroom business and double-digit growth in
mailstream business for the 2007 fiscal year. In mailstream business,
outsourcing and hybrid mail operations are expected to contribute to future
growth, along with our consolidation activities, where most of our business
is done during the second half of the year.

We expect our adjusted EBITDA for the 2007 fiscal year will remain at the
previous year’s level. In the medium-term, Francotyp-Postalia Holding AG is
striving for a sustainable adjusted EBITDA margin of 25% in mailroom.

'During the coming months we will be optimizing processes and aligning our
organization to reflect the challenges and opportunities of the market,'
said Hartmut Neumann, Chief Executive Officer of Francotyp-Postalia Holding
AG. 'Mailstream business is providing us with additional opportunities to
benefit from the liberalization of postal markets.'

Francotyp-Postalia Holding AG plans to payout its very first dividend for
the current fiscal year, with a payout ratio of 60%.

Detailed comments on the first six months of the year are available at our
website:

http://www.francotyp.com/en/ir/FPH_HY2007_e.pdf

Should you have any questions, please contact:

Francotyp-Postalia Holding AG
Media Relations

Sabina Prueser
Telephone: +49 (0)3303 525 777
Telefax: +49 (0)3303 53 70 77 77
E-Mail: ir@ir@francotyp.comfrancotyp.com

Postal address:
Triftweg 21-26
D-16547 Birkenwerder
Germany

About Francotyp-Postalia Holding AG

Francotyp-Postalia Holding AG can look back on a corporate history of over
80 years. The focus of business activities is developing, producing and
selling franking machines and selling inserting machines. These activities
in the mailroom business generate a high level of recurring income, which
makes up more than 60 percent of group revenues. The engine of this
revenues stability is the 248,000 electronic franking machines installed
for customers which generate after-sales business. In Germany
Francotyp-Postalia is the market leader in the franking machine business
with a current market share of 45 percent. To the end of 2006, the global
market share was approximately 9 percent. The most important markets for
Francotyp-Postalia are Germany, the USA, the Netherlands and the UK.

In addition, in the mailstream business, postal services are provided.
These include collection, sorting and consolidation of outgoing customer
post and electronic hybrid mail, something which is gaining in importance.
In the 2006 financial year (year end 31 December), with 939 employees, the
Francotyp-Postalia Group generated consolidated revenues of approximately
EUR 143 million* and EBITDA adjusted for non-recurring effects of
approximately EUR 32.2 million*, representing an EBITDA margin of
approximately 22 percent*.

*In the 2005 annual financial statements reported as pro forma figures due
to the first-time consolidation of the FP Group in its present form in
2005.

Contact:
Francotyp-Postalia Holding AG
Media Relations
Telefon: +49 (0)3303 525 777
Telefax: +49 (0)3303 53 70 77 77
E-Mail: pr@francotyp.com

30.08.2007 Financial News transmitted by DGAP

Language: English
Issuer: Francotyp-Postalia Holding AG
Triftweg 21-26
16547 Birkenwerder
Deutschland
Phone: +49 (0)3303 525 777
Fax: +49 (0)3303 53 70 77 77
E-mail: ir@francotyp.com
Internet: www.francotyp.com
ISIN: DE000FPH9000
WKN: FPH900
Indices:
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in
Berlin, Stuttgart, München, Düsseldorf

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