Francotyp-Postalia Holding AG — Earnings Release 2007

Feb 26, 2008

News Details

Corporate | 26 February 2008 08:51

Francotyp-Postalia Holding AG: Correction Francotyp-Postalia announces preliminary 2007 results and guidance for 2008

Francotyp-Postalia Holding AG / Results Forecast/Results Forecast

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Birkenwerder, Germany, November 15, 2007

Correction: Francotyp-Postalia announces preliminary 2007 results and
guidance for 2008

• Revenues advance moderately during past fiscal year to €144.9 million

• EBITDA reaches €26.2 million as opposed to €32.0 million the year
  before

• Francotyp-Postalia envisions revenues of between €150 and €160 million
  for 2008

• Company planning on EBITDA of between €22 and €26 million for 2008

Birkenwerder, Germany, February 26, 2008. According to preliminary results,
Francotyp-Postalia Holding AG, one of the world’s leading manufacturers of
franking and inserting machines and a service provider for the mailstream
market, recorded revenues of €36.0 million in a notedly
weaker-than-anticipated fourth quarter of 2007, as opposed to €35.8 million
for the comparable period the year before. The company’s revenues also rose
moderately by 1.4 % to €144.9 million for the full 2007 fiscal year (2006:
€142.9 million).

In fiscal 2007, Francotyp-Postalia succeeded in significantly boosting
revenues in its high-growth mailstream business (consolidating and
outsourcing outgoing mail, as well as hybrid mail solutions) by 39.3% to
€8.5 million (2006: €6.1 million). Delays in the sale of the hybrid mail
software prevented an even stronger rise. In its traditional mailroom
business (franking and inserting), on the other hand, revenues for fiscal
2007 stood at €136.4 million, as opposed to €141.5 million the year before.
In addition to the foreign exchange effects brought on by the weak U.S.
dollar, this was also attributable to the unsatisfactory course of mailroom
business, and in particular to the cool-down of the economy in the United
States.

Profitability impacted by weaker U.S. dollar

Francotyp-Postalia posted preliminary earnings before interest, taxes,
depreciation and amortization (EBITDA) of €26.2 million for the full 2007
fiscal year, as opposed to €32.0 million in 2006. In this regards, alone
the weak U.S. dollar, had an impact of €1.5 million on the company’s
operating profit. This was in addition to planned mailstream business
start-up losses in the amount of €1.3 million. Profitability was also
negatively affected by the weaker-than-anticipated course of the mailroom
business during the fourth quarter of 2007, in particular on the U.S. and
German markets: EBITDA for the fourth quarter of 2007 amounted to €4.2
million (not €4.5 million), as opposed to €7.0 million for the comparable
quarter the year
before. Adjusted for currency translation effects, the EBITDA margin for
the full fiscal year for the mailroom business continues to stand at 20%.

Conservative forecast for the full 2008 fiscal year

Following the need to void its forecast in 2007, Francotyp-Postalia is
applying conservative planning for the 2008 fiscal year: The company
expects revenues of between €150 and €160 million and an EBITDA of between
€22 and €26 million. This conservative planning by the company under the
leadership of its new Chief Executive Officer Dr. Heinz-Dieter Sluma, who
has been in office since January 1, 2008, takes into account both
insecurities relating to the further course of the economy, in particular
in the United States, and to the development of exchange rates, as well as
the uncertainty as to whether the impending decertification program in the
United States will lead to correspondingly positive revenue and
profitability contributions in the mailroom business. The company expects
the mailstream business to again remain the company’s growth driver in 2008
with a double-digit rise in revenues, enabling this business to provide its
first positive contribution to profitability after reaching the breakeven
point in January 2008.

Following his first 100 days in office, the company’s new Chief Executive
Officer Dr. Sluma will comment in greater detail on the initial
cornerstones of his strategy in connection with the presentation of the
2007 Annual Report on April 24, 2008. He already sees considerable
opportunities for efficiency gains within the company to strengthen its
mailroom business. Moreover, further potential for sales growth in its
mailstream business will be achived through the realization of synergies
between the mailstream and mailroom businesses as well as through a greater
sales and marketing focus throughout the entire company. His initial
conclusion: 'With its traditionally strong market position, its competence
throughout the entire mailstream process and its innovative products and
services, Francotyp-Postalia possesses significant potential for the coming
years.'

Should you have any questions, please contact:

Francotyp-Postalia Holding AG
Investor Relations

Andreas Drechsler
Telephone: +49 (0)3303 525 555
Telefax: +49 (0)3303 53 70 77 77
E-Mail: ir@francotyp.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

26.02.2008 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
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Stuttgart, München, Düsseldorf

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