Francotyp-Postalia Holding AG — Earnings Release 2012

Aug 23, 2012

News Details

Ad-hoc | 23 August 2012 20:23

Francotyp-Postalia Holding AG: FP Group increases quarterly result to a lesser degree than expected and revises earnings forecast for the full year

Francotyp-Postalia Holding AG / Key word(s): Change in Forecast/Change in Forecast

23.08.2012 20:23

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

---

Ad hoc notification in accordance with section 15 of the German Securities
Trading Act (WpHG)
23 August 2012
Francotyp-Postalia Holding AG
Triftweg 21 - 26
16547 Birkenwerder (Germany)
ISIN: DE000FPH9000
WKN: FPH900
Frankfurt Stock Exchange, Regulated Market (Prime Standard)

FP Group increases quarterly result to a lesser degree than expected and
revises earnings forecast for the full year

Birkenwerder, 23 August 2012. The FP Group succeeded in increasing all key
revenue and earnings figures in the second quarter of 2012, according to
preliminary calculations, but were below expectations. After six months,
the company generated EBITDA of EUR 8.6 million and EBIT of EUR 4.0
million, with revenue of EUR 82.7 million. However, in this period the
challenges in the process and supply chain in the old and new production
sites in Birkenwerder and Wittenberge have proved slower to solve than
anticipated; the resulting supply backlogs have not been eliminated quickly
enough and are having a particularly negative impact on the German
business. On the revenue side, these led to a temporary adjustment of the
revenue structure in the direction of the high-growth but low-margin
consolidation business. Against this background, the FP Group continues to
expect revenue of at least EUR 161 million for 2012 as a whole, but is
reducing the earnings forecast. The company forecasts EBITDA of EUR 19 - 21
million instead of at least EUR 25 million as previously anticipated, and
expects EBIT of EUR 8 - 10 million instead of at least EUR 12 million.

Contact:
Francotyp-Postalia Holding AG
Investor Relations
Triftweg 21 - 26
16547 Birkenwerder
Tel.: +49-3303-525-410
Fax: +49-3303-53707-410
E-mail: s.prueser@francotyp.com

This notification does not constitute either a sale offer or a request to
buy securities of Francotyp-Postalia Holding AG. The shares offered as part
of the IPO have already been sold.

This notification must not be published, distributed or transmitted in any
other way in the United States of America. This notification does not
constitute an offer to purchase or sell securities of Francotyp-Postalia
Holding AG in the United States of America and does not aim to make
offerings of this type. The securities described in this notification are
not and will not be registered in accordance with the United States
Securities Act of 1933 in its currently prevailing version (the 'Securities
Act') and may only be offered for purchase or sale within the United States
of America without being previously registered if subject to an exemption
in accordance with the provisions of the Securities Act.

In the United Kingdom, this notification is only directed at persons and/or
is only intended for distribution to persons who (i) have sector experience
with investments in the context of Article 19 (5) of the U.K. Financial
Services and Markets Acts 2000 (Financial Promotion) Order 2005 (the
'Regulation') or (ii) who are covered by Article 49 (2) (a) to (d) of the
Regulation ('high net worth entities') (all such persons will be
hereinafter be referred to as 'qualified persons'). The notification is
only directed at qualified persons. Non-qualified persons should not
operate based on this notification or its contents or rely upon them. Every
investment or investing activity to which this notification refers is
available to qualified persons only and is processed solely by qualified
persons.

The information contained in this notification is not intended for
transmission to or within the United States of America.

---

Information and Explaination of the Issuer to this News:

FP Group increases quarterly result to a lesser degree than expected and
revises earnings forecast for the full year

• Preliminary figures for Q2 2012 compared with Q2 2011

  • Revenue rises from EUR 39.1 million to EUR 40.9 million

  • EBITDA grows from EUR 0.1 million to EUR 4.5 million

  • EBIT improves from EUR -3.6 million to EUR 2.3 million

• Chief revenue driver is low-margin consolidation business

• Challenges in the process and supply chain are proving slower to solve
  than anticipated

• Supply backlogs are affecting German sales organisation in a state of
  upheaval

• FP Group is reducing EBITDA forecast for 2012 as a whole to EUR 19 - 21
  million

Birkenwerder, 23 August 2012. The FP Group succeeded in increasing all key
revenue and earnings figures in the second quarter of 2012, according to
preliminary calculations, but were below expectations. After six months,
the company generated EBITDA of EUR 8.6 million and EBIT of EUR 4.0
million, with revenue of EUR 82.7 million. However, in this period the
challenges in the process and supply chain in the old and new production
sites in Birkenwerder and Wittenberge have proved slower to solve than
anticipated; the resulting supply backlogs have not been eliminated quickly
enough and are having a particularly negative impact on the German
business. On the revenue side, these led to a temporary adjustment of the
revenue structure in the direction of the high-growth but low-margin
consolidation business. Against this background, the FP Group continues to
expect revenue of at least EUR 161 million for 2012 as a whole, but is
reducing the earnings forecast. The company forecasts EBITDA of EUR 19 - 21
million instead of at least EUR 25 million as previously anticipated, and
expects EBIT of EUR 8 - 10 million instead of at least EUR 12 million.

Challenges in the process and supply chain as well as in German sales

Since the beginning of April 2012, the FP Group has been producing its
franking machines exclusively at the new Wittenberge site. However, it has
taken longer than originally anticipated for the process and supply chain
to establish itself at the new site and in the new spare part centre near
Bremen. This has also delayed the elimination of supply backlogs which had
accumulated prior to the discontinuation of production in Birkenwerder.
Training and the use of experienced employees were required before
production in Wittenberge reached a steady state in summer 2012.

The foreign subsidiaries were able to partially absorb the supply backlogs
in the first half of 2012. In contrast, the bottlenecks directly impacted
the FP Group in Germany, the biggest market, where the customers are
supplied directly from the factory, in the midst of a state of upheaval. In
the case of franking machines, the company focused increasingly here on the
telesales sales channel, as it has previously in the USA and the UK.
However, in contrast to these two strong telesales markets, the reaction
among customers to telephone contact in Germany has remained restrained for
the time being. Since June, sales in Germany have therefore strengthening
on personal contact and have recorded increasing sales figures accordingly.
Already beforehand direct sales had comparable success prior to this and
boosted software and mail services revenue in particular in the first half
of 2012; consolidation revenue alone rose by 15% compared with the
prior-year period. On the other hand, dealer distribution, the second
pillar of German sales, significantly trailed its original targets. The
increase in the consolidation business during a period of growing price
competition and the concurrent drop in the high-margin franking machine
business did impact the German organisation's EBITDA in the first half of
2012 stronger than expected.

In this context, the Management Board is adjusting its forecast for the
year as a whole. Hans Szymanski, CEO and CFO of the Francotyp-Postalia
Holding AG explained: 'Production has been in a steady state since summer
2012 and will achieve an optimum level from autumn onwards. The German
sales organisation is also reporting increasing sales figures again, with
the dealer channel yet to reach its targets. We will not, however, be able
to compensate for the losses from the second quarter of 2012. This is even
more regrettable given that the FP Group is strategically on the right
path'. PostBase, the new innovative franking system, is being very well
received on the market, and interest in the De-Mail solution is high.
Following the conclusion of the restructuring, the company is also
profiting from considerable cost benefits and can now operate more
efficiently on the market with streamlined organisation. Szymanski: 'Last
but not least, based on the earnings increase in the first half of 2012, I
remain confident of a sustainable strengthening of the FP Group's earnings
power in the coming years'.

Contact

Francotyp-Postalia Holding AG
Corporate Communications
Sabina Prüser
Tel: +49 (0)3303 525 410
Fax: +49 (0)3303 53707 410
E-mail:s.prueser@francotyp.com

The FP Group in Brief

Francotyp-Postalia Holding AG is the first multi-channel-provider provider
for mail communications. The FP Group's range of products and services
includes franking and inserting machines, the direct collection of business
mail to hybrid-mail and full digital mail solutions for private and
commercial users. Headquartered in Birkenwerder near Berlin, the Group's
wide product spectrum enables it to provide tailored mail management
services. With a corporate history that goes back over 85 years and local
branches in many industrialised countries, the FP Group currently holds
around 10% of the worldwide franking machine market. Today it is profiting
in all its segments from the increasing liberalisation of mail markets and
the trend for businesses to outsource their outbound mail processes to
professional service providers. Total revenue in financial 2010 came to
147.3 million euros. Worldwide, the Group employs over 1,000 people.

23.08.2012 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---

Language: English
Company: Francotyp-Postalia Holding AG
Triftweg 21-26
16547 Birkenwerder
Germany
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, Düsseldorf, München, Stuttgart

End of Announcement DGAP News-Service

---