Francotyp-Postalia Holding AG — Earnings Release 2007

Aug 9, 2007

News Details

Corporate | 9 August 2007 07:01

Francotyp-Postalia Holding AG: Francotyp-Postalia Holding increases revenues and profitability in second

Francotyp-Postalia Holding AG / Preliminary Results/Quarter Results

Release of a Corporate News, transmitted by DGAP - a company of EquityStory
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Birkenwerder, Germany, August 9, 2007

Francotyp-Postalia Holding increases revenues and profitability in second
quarter of 2007

• Revenues up by 10.7% to €37.4 million

• EBITDA advances by 16.9% to €9.0 million

• 2007 EBITDA expected to remain at last year’s level

Francotyp-Postalia Holding AG, a leading, globally operating manufacturer
of franking machines and inserting machines and a service provider for the
mailstream market, grew its revenues to €37.4 million in the second quarter
of 2007 according to preliminary calculations, as opposed to €33.8 million
for the comparable quarter the year before. This represents an increase of
10.7%. In its traditional mailroom business (franking and inserting),
revenues rose by 5.3% in the second quarter of 2007 to €35.6 million. Of
this total, €0.6 million was attributable to a natural hedge, a positive
effect due to a partial payback of a U.S.-dollar loan, with an effect on
profit. Francotyp-Postalia Holding AG (FP) succeeded in significantly
increasing its mailroom business, in particular sales of smaller franking
machines in the so-called A segment; on a regional basis, the company
advanced first and foremost in the United States and the United Kingdom. In
its mailstream business that was acquired in late 2006 and which includes
the fields of consolidating and outsourcing outbound mail as well as
corresponding software solutions, the FP Group generated quarterly revenues
of €1.8 million.

Year on year, preliminary consolidated revenues for the first six months of
the year increased by 5.2% to a total of €75.1 million. In this context it
should be noted that during the first half of 2007 the company placed some
70 percent more franking machines than the year before in rental business.

According to preliminary calculations, cost of materials totaled €11.9
million in the second quarter of 2007; this represents 31.8% of revenues,
as opposed to 29.3% for the same quarter the year before. This rise was
primarily attributable to the increase in the rental business, changes in
the product mix, e. g. a higher percentage of sales of smaller franking
machines in the mailroom business, as well as to the start-up costs in the
mailstream business. Personnel expenses amounted to €13.6 million in the
second quarter of 2007 according to preliminary calculations, which means
that the corresponding expense ratio stood at 36.4%, as opposed to 35.8% in
the second quarter of 2006. This rise is mainly due to the company’s new
mailstream business and the relatively high collective-bargaining agreement
in Germany by comparison with previous years. Other operating expenses
improved to €7.8 million in the second quarter of 2007, representing a
ratio of 20.9% as opposed to 24.3% for the comparable period the year
before.

EBITDA margin 22.5%

In the second quarter of 2007 the FP Group increased its earnings before
interest, taxes, depreciation and amortization (EBITDA) by 16.9% to €9.0
million according to preliminary calculations; adjusted to reflect the
natural hedge, EBITDA was €8.4 million, making the adjusted EBITDA margin
22.5%. On a semiannual comparison basis, the adjusted EBITDA reached €15.8
million as opposed to €18.0 million in the first half of 2006. It has to be
considered that the weaker US$ burdened the EBITDA with € 1.3 million and
the start-up costs for the new mailstream business led to an EBITDA loss of
0.4 million.

Outlook

For the full 2007 fiscal year, the FP Group continues to anticipate seeing
mailroom revenues rise by some 5% before the impact of currency effects,
coupled with double-digit revenue growth in mailstream business; the
adjusted EBITDA is likely to remain at last year’s level for the full 2007
fiscal year. Given this basis, the FP Group plans to pay its very first
dividend for the current fiscal year, with a pay-out ratio of 60%. With a
view to the future, FP Chief Executive Officer Hartmut Neumann said: 'We
intend to expand our profitability in the years to come. In our mailroom
business, we are striving for a sustainable EBITDA margin of 25%
medium-term, and our mailstream business will begin generating positive
contributions to profitability beginning in 2008.'

Table of Quarterly and Semiannual Numbers

In millions of Q2 2006 Q2 2007 +/- in % H1 2006 H1 2007 +/- in %
euros
FP-Group
Revenues 33.8 37.4 + 10.7% 71.4 75.1 + 5.2%
Output 36.7 40.6 + 10.6% 77.8 83.5 + 7.3%
EBITDA 7.7 9.0 + 16.9% 17.8 16.4 - 7.9%
EBITDA (adjusted) 7.8 8.4 + 7.7% 18.0 15.8 - 12.2%
Mailroom
Revenues 33.8 35.6 + 5.3% 71.4 71.3 - 0.1%
EBITDA (adjusted) 7.8 8.5 + 9.0% 18.0 16.2 - 10.0%
Mailstream
Revenues 1.1(1) 1.8 + 63.6% 2.4(1) 3.8 + 58.3%
EBITDA (adjusted) n/a(2) - 0.2 n/a(2) n/a(2) - 0.4 n/a(2)

1 These numbers are not included in the consolidated figures, as the
mailstream business segment was not a part of the FP Group in the second
quarter of 2006.

2 These numbers are not available, as the mailstream business segment was
not a part of the FP Group in the second quarter of 2006.

Further information

Francotyp-Postalia Holding AG

Investor Relations

Sabina Prüser

Telephone: +49 (0) 3303 525 777

Fax: +49 (0) 3303 53 70777

E-mail: ir@francotyp.com

This Corporate News contains forward looking statements as defined by the
U.S. Private Securities Litigation Act of 1995. These forward looking
statements are based upon current expectations and forecasts of future
events by the management of Francotyp-Postalia Holding AG. As a result of
risks or incorrect assumptions, actual results could differ significantly
from these forward looking statements.

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

DGAP 09.08.2007

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

End of News DGAP News-Service

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