Francotyp-Postalia Holding AG - Earnings Release 2017

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Corporate | 24 August 2017 06:43

Francotyp-Postalia Holding AG: Francotyp-Postalia speeds up transformation: revenues rise in first half of 2017

DGAP-News: Francotyp-Postalia Holding AG / Key word(s): Quarterly / Interim Statement/Quarter Results

24.08.2017 / 06:43

The issuer is solely responsible for the content of this announcement.

**Corporate news

Francotyp-Postalia speeds up transformation: revenues rise in first half of 2017**

– Revenues grow by 4.1% to EUR 104.4 million

– FP accelerates ACT growth strategy and relaunch Mail Services business to increase profitability

– EBITDA reaches EUR 12.7 million; EBITDA of EUR 14.9 million not including non-recurring effects from Mail Services and ACT investments

– FP maintains guidance 2017

Berlin, 24 August 2017. Francotyp-Postalia Holding AG, an expert in secure and efficient communication, continued growing in the first half of 2017 and increased its revenues by 4.1% to EUR 104.4 million. The company was given supporting momentum by the consistent implementation of the ACT strategy. FP is unchanged attacking in the core business with franking systems. Revenues increased by 2.4% to EUR 64.6 million in the first half of 2017. Growth of as much as 9.4% was achieved in product sales. The PostBase Mini in particular is proving a sales hit in many countries. As a result, FP again enlarged its global market share.

Management Board brings forward relaunch of Mail Services business

Revenues in the Mail Services business increased by another 9.6% to EUR 33.0 million in the first half of 2017. Despite the ongoing strong revenue growth over the last five years, from EUR 20.0 million in the first half of 2013 to EUR 33.0 million in the current fiscal year, margins in the product segment remained weak, with profits recently even deteriorating. For this reason, FP is moving forward the restructuring planned in the context of ACT, due to the fact that potential for enhancing efficiency and reducing costs was identified in the context of an operational review. The triggers for the more in-depth analysis were not only the decline in profitability in the first half of 2017, but also the detection of deviations and occasional irregularities due to employee misconduct in the internal recording and billing of letter volumes in the consolidation business, although this did not affect customers. This reduced earnings by EUR 0.5 million in the first half of 2017. As a result, an extensive automation of fulfilment processes is to be introduced together with greater integration with the software solutions business.

At EUR 12.7 million in the first half of the year, EBITDA fell short of the previous year’s figure of EUR 14.6 million. As in previous years, earnings in the second quarter 2017 proved weaker than in the opening quarter. In addition to the non-recurring expenses in the Mail Services segment, the successful implementation of the ACT strategy requires further expenses of EUR 1.7 million. Adjusted for these expenses, EBITDA amounted to EUR 14.9 million.

As announced, successes in the franking machine business due to the modernisation of the product portfolio in previous years and the investments in production, software and acquisition of customer lists are resulting in increasing amortisation and depreciation. The latter grew by EUR 1.5 million to EUR 9.8 million in the first half of 2017. EBIT totalled EUR 2.9 million in the first six months of the current fiscal year, consolidated net income EUR 2.2 million. This results in earnings per share (EPS) of 13 cents. Despite a EUR 1.9 million decline in EBITDA year on year, the FP Group generated a sound adjusted free cash flow of EUR 6.7 million (previous year: EUR 7.6 million).

FP maintains guidance 2017

For the second half of 2017, the FP Group expects higher profitability while revenues continue to rise. Efficiency measures as part of ACT will increasingly make a positive impact here. The company therefore continues to anticipate, based on the assumption of constant exchange rates, a slight year-on-year increase in revenues and EBITDA and adjusted free cash flow at the level of the previous year.

ACT strategy takes effect

The company continues to consistently implement the measures associated with ACT and is unchanged attacking in the core business and beyond.

Rüdiger Andreas Günther, CEO of the FP Group, explains: “ACT is the right strategy at the right time, as shown by the sustainable growth in the franking machine business. We are now pushing ahead with our transformation in the domestic Mail Services business earlier than planned. There are still reserves to be found here in terms of both revenues and costs. It was clear from the start: We are now laying the foundations for FP to evolve into a profitable growth company. 2017 and 2018 will be years of transition. This major feat needs time and will pay off. The FP Group is on track to generate revenues of EUR 250 million and an EBITDA margin of 17% by 2020.”

Key figures at a glance:


in EUR million	H1 2017	H1 2016	Change
Revenue	104.4	100.3	4.1%
Cost of materials	51.8	47.8	8.4%
Staff costs	30.3	28.7	5.4%
Other expenses	16.3	17.0	-4.0%
EBITDA	12.7	14.6	-13.2%
Adjusted EBITDA	14.9	15.0	-0.9%
Amortisation and depreciation	9.8	8.3	18.1%
EBIT	2.9	6.3	-54.5%
Adjusted EBIT	5.1	6.7	-24.4%
Consolidated net income	2.2	4.0	-46.9%
Earnings per share (basic, in EUR)	0.13	0.24	-45.3%
Earnings per share (diluted, in EUR)	0.13	0.23	-44.0%
Free cash flow	4.0	6.3	-35.9%
Adjusted free cash flow	6.7	7.6	-11.7%

More information can be found on the FP company website: http://bit.ly/2vi2WM I

Contact

Francotyp-Postalia Holding AG

Investor Relations/Public Relations

Sabina Prüser

Tel: +49 (0)30 220 660 410

Fax: +49 (0)30 220 660 425

E-mail: [email protected]

De-Mail: [email protected]

About Francotyp-Postalia Holding AG

The FP Group, which has its headquarters in Berlin, provides businesses and authorities with innovative solutions for secure communications. In addition to systems for franking and inserting mail, the company’s range currently comprises services such as the collection of business mail and software solutions. Thanks to its 90-year history, the FP Group boasts a unique combination of organically grown mail processing expertise and digital know-how. The company has branches in many developed countries and has a global market share of more than 10% in the area of franking machines. In the 2016 fiscal year, the FP Group generated over EUR 200 million in revenues. It aspires to double revenues to around EUR 400 million by 2023. As part of the ACT strategy, the company will be on the attack in the core business, provide additional products services to its customers and press ahead with its digital transformation.

Contact:

Francotyp-Postalia Holding AG

Media Relations

Telephone: +49 (0)30 220 660 410

Telefax: +49 (0)30 220 660 425

E-Mail: [email protected]

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Language:	English
Company:	Francotyp-Postalia Holding AG
	Prenzlauer Promenade 28
	13089 Berlin
	Germany
Phone:	+49 (0)30 220 660 410
Fax:	+49 (0)30 220 660 425
E-mail:	[email protected]
Internet:	www.fp-francotyp.com
ISIN:	DE000FPH9000
WKN:	FPH900
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange