Improved performance IN A VERY
challenging MAIL MARKET environment
NEOPOST's TRANSFORMATION
Progresses
Paris, December 1, 2016
Neopost, the number two global
supplier of Mail Solutions and a major player in Digital
Communication and Shipping Solutions, announced today €279 million
in consolidated sales for the third-quarter of 2016 (period ended
on October 31, 2016), down -1.5% compared with the same period in
2015. Factoring in a negative foreign exchange effect of -1.1% and
a positive scope effect of +1.7%, organic growth came in at -2.1%,
which reflects the slowdown in the decline in SME Solutions and
steady organic growth in Communication & Shipping Solutions
Dedicated Units.
Sales for 9m 2016 totaled €836
million, down -3.9% on the same period in 2015. In organic terms,
sales were down -2.9%, reflecting a -1.7% negative currency impact
and a +0.7% positive scope effect[2].
Denis Thiery, Chairman and Chief
Executive Officer of Neopost, commented: "We recorded our best quarterly performance in the past 4
quarters thanks to a slower decline in our SME Solutions
division. Nonetheless the mailroom equipment
market remains very challenging. Besides, we are very pleased with
the strength of the underlying growth in our Communication & Shipping Solutions businesses in SME Solutions, Enterprise Digital Solutions
and Neopost Shipping. The integration of icon
Systemhaus in the Group is progressing to plan. We are continuing
with our transformation process and the Communication &
Shipping Solutions businesses as a whole accounted for close to 27%
of our sales in Q3 2016. At the same time, we are maintaining our
drive to control costs in the SME Solutions division. All these
factors validate our mid-term ambitions for the Group."
SALES BY DIVISION
€
million |
Q3 2016 |
Q3
2015 |
Change |
Change at
constant exchange rates |
Organic
change1 |
SME Solutions |
236 |
248 |
-4.3% |
-3.4% |
-3.4% |
Communication & Shipping Solutions Dedicated
Units* |
48 |
40 |
+18.4% |
+20.3% |
+7.4% |
Eliminations |
(5) |
(4) |
- |
- |
- |
Total |
279 |
284 |
-1.5% |
-0.4% |
-2.1% |
(Unaudited data)
€
million |
9M 2016 |
9M
2015 |
Change |
Change at
constant exchange rates |
Organic
change2 |
SME Solutions |
720 |
765 |
-5.9% |
-4.4% |
-4.4% |
Communication & Shipping Solutions Dedicated
Units* |
131 |
117 |
+11.5% |
+14.3% |
+8.3% |
Eliminations |
(15) |
(12) |
- |
- |
- |
Total |
836 |
870 |
-3.9% |
-2.2% |
-2.9% |
(Unaudited data)
*Including sales (insignificant) achieved through
innovation projects
SME Solutions
Sales for the SME
Solutions division were down -3.4% in third-quarter 2016, excluding currency effects.
Sales of Mail Solutions in this
division were down -4.7%, excluding currency effects, compared with
the same quarter in 2015. This change was due to the persistence of
tough market conditions, especially in Europe. However, the more
moderate decrease in equipment sales meant that the trend was less
pronounced than in previous quarters. Measures introduced by the
Group to limit the decline in revenue continued to prove effective,
especially in North America, where revenue was almost stable.
Communication & Shipping
Solutions activities in the SME Solutions division grew 5.8%, and
continue to show the impact of an adverse business cycle in graphic
activities. Stripping out these graphic activities, growth in SME
Solutions' digital and logistics businesses was in excess of
20%.
The SME Solutions division's sales
were down -4.4% in the first nine months of
2016, excluding currency effects, compared with the same period
in 2015.
Communication & Shipping
Solutions Dedicated Units
Q3 2016 sales
were up 20.3%, excluding currency effects, for Communication & Shipping Solutions Dedicated Units (CSS
DU) as a whole, including Enterprise Digital Solutions and
Neopost Shipping. Restated for the scope effect of the
consolidation of icon Systemhaus, organic growth in sales by CSS DU
stood at +7.4%.
The integration of icon Systemhaus
in the Enterprise Digital Solutions division
is going to plan. Note that this company had recorded a license
sale worth close to €2 million in Q3 2015. Icon Systemhaus'
business model includes occasional big license sales, in addition
to the company's significant recurring revenue base. As a result,
organic growth in Enterprise Digital Solutions this quarter is
penalized by this high basis for comparison. Excluding icon
Systemhaus, Enterprise Digital Solutions would be growing by
double-digits.
The Neopost
Shipping division reported growth of more than 10% this
quarter. The underlying growth is once again visible as the
division no longer has the effect of the high basis for comparison
caused by the roll-out of an RFID solution developed for the French
Army - (Direction générale de l'armement).
Communication & Shipping
Solutions Dedicated Units posted a 14.3% increase in sales in
9 months 2016, excluding currency effects.
Restated for scope effects, sales were up 8.3% on an organic
basis.
GENERAL OVERVIEW OF FINANCIAL
POSITION
Healthy financial
position
The Group has a sound financial
position at the end of October 2016. Net debt continues to be
related solely to rental, leasing and financing activities.
Interim dividend
The Board of Directors meeting on
November 25, 2016 set an interim dividend of €0.80 per share in
respect of FY 2016, following the announcement at the end of
September 2015 of a proposed dividend per share of €1.70 for the
next two or three financial years.
The interim dividend will be paid
entirely in cash. The ex-dividend date is February 3, 2017 and
payment will be made on February 7, 2017.
The balance of the dividend will
be paid in August 2017.
MEDIUM-TERM AMBITIONS
UNCHANGED
Note that the Group is engaged in
a transformation strategy.
-
In SME Solutions, the Group is pursuing the
roll-out of digital and shipping solutions to offset the decline in
sales of Mail Solutions. This roll-out comes with a plan to lower
net costs by more than €50 million[3] by 2018 in
the SME Solutions division. Under this program, restructuring costs
will represent €10-15 million per year for the next two financial
years.
-
In the Neopost Shipping and Enterprise Digital
Solutions divisions, the Group continues to invest to firmly anchor
its leadership position in these two rapidly growing markets. The
Group intends to pursue organic growth and to improve the
profitability of these core businesses.
-
Moreover, the Group continues to invest in
developing new innovation projects, including CVP-500 and digital
solutions for micro-businesses, with an annual budget allocation of
€10 million.
This strategy is designed to
return Neopost to organic sales growth in the medium term. It will
also ensure the Group maintains a current operating margin, before
acquisition-related expense, above 18% throughout the period of
transformation, and return it above 20% (before acquisition-related
expense) in the medium term.
The Group also intends to hold
sufficient cash flow to sustain growth, meet its dividend
distribution commitments and maintain a solid balance sheet
structure.
Calendar
The 2016 annual financial
statements will be published on March 28, 2017, after market
close.
ABOUT
NEOPOST
NEOPOST is the number two global provider of
mailing solutions and a major player in digital communications and
shipping solutions. Its mission is to guide and support
organizations in how they send and receive communications and
goods, helping them better connect with their business environment
through hardware, software and services.
Neopost supplies innovative user-friendly solutions for physical
and digital communications management for large enterprises and
SMEs, as well as shipping processes for supply-chain and e-commerce
players.
With a strong local presence in 31 countries and over 6,000
employees, Neopost works closely with a network of partners in
order to market its solutions in more than 90 countries. In 2015,
Neopost reported sales of €1.2 billion.
Neopost is listed in Compartment A of Euronext Paris and belongs
notably to the SBF 120 index.
|
For more information please
contact:
Gaële Le Men, Neopost |
FTI Consulting |
Financial, External
& Internal
Communications Director |
Arnaud de
Cheffontaines
Cosme Julien-Madoni |
Tel: +33 (0)1 45 36 31
39 |
Tel : +33 (0)1 47 03
68 19 |
E-mail:
g.le-men@neopost.com |
E-mail:
neopost@fticonsulting.com |
Or visit our website:
www.neopost.com
Appendices
Glossary
- Mail
Solutions: mailing systems, document management systems
(folder/inserters for offices and mailrooms; other mail room
equipment) and related services
- Communication
& Shipping Solutions (CSS): digital solutions software
(customer communication management and data quality software),
shipping solutions, print finishing and graphic solutions
- SME Solutions
(formerly Neopost Integrated Operations - NIO): Neopost
subsidiaries developing, producing and distributing Mail Solutions
and CSS products and services to long-standing customers of the
Group.
- CSS Dedicated
Units (CSS DU): entities distributing CSS solutions to key
account customers: Enterprise Digital
Solutions (Customer Communication Management -
GMC Software Technology - and Data Quality - DMTI
Spatial, Human Inference, Satori Software-) and Neopost Shipping (formerly Neopost ID, ProShip and
Temando)
Sales by business line
€
million |
Q3 2016 |
Q3
2015 |
Change |
Change
at constant exchange rates |
Organic
change2 |
|
9M 2016 |
9M
2015 |
Change |
Change
at
constant exchange rates |
Organic
change1 |
Mail Solutions |
204 |
217 |
-5.9% |
-4.7% |
-4.7% |
|
625 |
672 |
-7.0% |
-5.5% |
-5.5% |
Communication & Shipping Solutions |
75 |
67 |
+13.0% |
+13.8% |
+6.1% |
|
211 |
198 |
+6.6% |
+9.0% |
+5.5% |
Total |
279 |
284 |
-1.5% |
-0.4% |
-2.1% |
|
836 |
870 |
-3.9% |
-2.2% |
-2.9% |
(Unaudited data)
Sales by region
€
million |
Q3 2016 |
Q3
2015 |
Change |
Change
at constant exchange rates |
Organic
change2 |
|
9M 2016 |
9M
2015 |
Change |
Change
at
constant exchange rates |
Organic
change1 |
North America |
127 |
125 |
+1.6% |
+1.1% |
+1.1% |
|
374 |
378 |
-1.0% |
-0.1% |
-0.1% |
Europe |
131 |
139 |
-5.5% |
-2.0% |
-5.3% |
|
399 |
431 |
-7.4% |
-4.8% |
-6.1% |
Asia-Pacific
and others |
21 |
20 |
+7.2% |
+0.9% |
+1.0% |
|
63 |
61 |
+3.0% |
+3.5% |
+2.1% |
Total |
279 |
284 |
-1.5% |
-0.4% |
-2.1% |
|
836 |
870 |
-3.9% |
-2.2% |
-2.9% |
(Unaudited data)
Sales by revenue type
€
million |
Q3 2016 |
Q3
2015 |
Change |
Change
at constant exchange rates |
Organic
change2 |
|
9M 2016 |
9M
2015 |
Change |
Change
at
constant exchange rates |
Organic
change1 |
Equipment
and license sales |
90 |
95 |
-4.4% |
-3.4% |
-6.1% |
|
265 |
294 |
-10.0% |
-8.3% |
-9.2% |
Recurring
revenue |
189 |
189 |
+0.0% |
+1.1% |
+0.0% |
|
571 |
576 |
-0.7% |
+1.0% |
+0.3% |
Total |
279 |
284 |
-1.5% |
-0.4% |
-2.1% |
|
836 |
870 |
-3.9% |
-2.2% |
-2.9% |
(Unaudited data)
1 Q3 2016 sales are compared with
Q3 2015 sales with the addition of €4.8 million in sales generated
by icon Sytemhaus (three months).
2 9M 2016 sales are compared with
9M 2015 sales with the addition of €6.5 million in sales generated
by icon Sytemhaus (four months) and Temando (two months).
[3] Relative to
the 2014 cost base
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information contained therein.
Source: NEOPOST via Globenewswire