Francotyp-Postalia Holding AG, DE000FPH9000

Francotyp-Postalia Holding AG, DE000FPH9000

17.11.2016 - 07:02:24

Francotyp-Postalia Holding AG: New era at FP Group: ACT strategy to turn FP Group into dynamic growth company

Corporate news New era at FP Group: ACT strategy to turn FP Group into dynamic growth company

- Francotyp-Postalia aspires to achieve around EUR 400 million in revenue and an EBITDA margin of approx. 20% by 2023

- ACT strategy based on strategic components: Attack - Customer - Transformation

- Increase in revenue and earnings in the first nine months of 2016 highlights the company's potential

Berlin, 17 November 2016. As announced, Francotyp-Postalia Holding AG will present its new ACT growth strategy today in addition to figures for the first nine months of 2016. The expert in secure and efficient communication aspires to double revenue to around EUR 400 million and achieve an EBITDA margin of approximately 20% by 2023, the year of its 100th anniversary. "We are taking a bold step forward. With ACT, we are turning the FP Group into a dynamic growth company," explained FP CEO Rüdiger Andreas Günther.

The company is already seeking to generate roughly EUR 250 million in revenue and an EBITDA margin of at least 17% in 2020. Günther, who has been at the head of the FP Group since the beginning of 2016, highlighted the following: "There is more potential in our company than one would think. We have looked at the facts from a different perspective and we are now evaluating these facts in a completely different way." This shows that digital transformation is changing the franking machine market only gradually. "Our market is moving towards systems for smaller mail volumes. Here, we have the most innovative product range with the PostBase family. We also see attractive growth opportunities in our core business," said Günther. At the same time, the FP Group will expand its service range with new solutions and services based on customer requirements and generate additional growth in this way. FP will also make use of its core competencies to develop innovative products and strategic options for FP's transformation. This is why the ACT strategy has three components: Attack, Customer and Transformation.

With its "FP FIT" measures, the company is creating the basis for ACT. Excellence measures that have already been initiated or newly defined are bundled here. With these measures, FP plans to increase efficiency and implementation expertise in all areas. These measures, which focus on four areas (finance, HR, sales and digitalisation), will be fully effective from 2019. The company aspires to achieve earnings per share (EPS) of at least EUR 1.00 from 2020 to 2023. Günther explained: "Our company is on track, but we could still be a lot better. Based on our unique DNA made up of cryptography, sensor and actuator technology and connectivity, we will lead FP to a successful future."

Rise in revenue and earnings shapes current fiscal year

Francotyp-Postalia is already on a profitable growth course in the current fiscal year. In the first nine months of 2016, the company increased revenue by 5.7% to EUR 149.4 million and increased EBITDA by 1.4% to EUR 20.6 million as against the same period of the previous year. In this context, the company grew in all business areas. In the first nine months of 2016, global revenue with franking machines rose by 3.0% to EUR 94.3 million despite negative currency effects totalling EUR 1.7 million. In the Mail Services segment, revenue rose by 12.5% to EUR 44.7 million in the first nine months of 2016. In the Software business, revenue increased by 3.9% to EUR 10.3 million in the same period.

A higher increase in EBITDA was prevented by unfavourable exchange rate changes and initial expenses for the preparation and implementation of the strategy. Negative currency effects amounted to EUR 0.7 million in the first nine months of 2016. In addition to EBITDA, the FP Group also increased EBIT and consolidated net income in particular in the first nine months of 2016. Despite an expected slight increase in depreciation and amortisation, EBIT improved by 2.9% to EUR 8.1 million. Consolidated net income also increased by 24.9% to EUR 5.3 million thanks to the implementation of announced measures to significantly improve the tax rate. Earnings per share improved to 31 cents in the period under review compared with 25 cents in the same period of the previous year. The rise in free cash flow to EUR 5.2 million in the period under review after minus EUR 4.0 million in the previous year highlights the company's good performance over the course of 2016.

Based on the good business performance expected in the first nine months of 2016, the Management Board confirms its forecast for 2016 as a whole. On the assumption that exchange rates remain unchanged, the company anticipates a slight year-on-year increase in revenue and EBITDA and positive free cash flow.

Key figures at a glance:

in EUR million 9M 2016 9M 2015 Change Revenue 149.4 141.3 5.7% - of which franking 94.3 91.6 3.0% machines - of which Mail Services 44.7 39.8 12.5% - of which Software 10.3 9.9 3.9% EBITDA 20.6 20.3 1.4% EBIT 8.1 7.9 2.9% Consolidated net income 5.3 4.2 24.9% Earnings per share 0.31 0.25 21.3% (basic, in EUR) Earnings per share 0.30 0.25 21.6% (diluted, in EUR) Investment 11.9 13.6 -12.7% Free cash flow 5.2 -4.0 n.a. 30 Sep. 2016 31 Dec. 2015 Net debt 18.0 20.4 -11.8%

Further information on the new ACT growth strategy

ACT is leading the FP Group into a new era and will ensure dynamic growth. The new strategy has three components: Attack, Customer and Transformation. It is based on current FIT measures to increase efficiency and implementation expertise in all areas with a focus on four areas: finance, HR, sales and digitalisation.

Attack: Expanding the customer base and increasing the market share in the core business The FP Group's core business with franking machines has more growth potential than previously anticipated; this was the result of extensive market analyses. According to these analyses, an increasing number of business customers rely on machines for smaller mail volumes which FP covers worldwide with the innovative PostBase family. With this, the company is already capable of increasing its revenue today. With a targeted market development strategy in the USA and France, which are still the most attractive markets, the FP Group is now seeking to successively gain market shares in the core business and enlarge the customer base. FP is also expanding the service range.

Customer: Developing new solutions and services for existing and new customers At the same time, the FP Group is reacting to changing customer requirements and evolving into a company that provides assistance with the gradual digitalisation of processes for inbound and outbound business communication at companies and authorities. The existing services of the IAB subsidiary are consistently expanded for this purpose using the nationwide sorting centres of the freesort subsidiary. Digitalisation hubs for inbound and outbound mail are emerging in this way. The FP Group is strengthening its market position with additional innovations. For instance, FP Sign is forward-looking. With this new solution for digitally signing contracts and exchanging documents in compliance with the law, the FP Group is addressing a growth market that is set to increase by 43% every year in the next five years (Aragon Research).

Transformation: Developing new digital business areas At the same time, the FP Group is promoting the development of innovative products and strategic alternatives for FP's transformation based on its core competencies in cryptography, sensor and actuator technology and connectivity.

The FP Management Board will present its ACT strategy at an investor conference in Frankfurt. You can find the corresponding presentation on the company's website at: www.fp-francotyp.com.

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: s.prueser@francotyp.com De-Mail: s.prueser@francotyp.de-mail.de

About Francotyp-Postalia Holding AG

The FP Group, which has its headquarters in Berlin, is expert in secure and efficient communication. The global company offers all products and solutions for communication and document processes and thus focuses on business and private customers. In addition to traditional machinery to frank and insert mail, the company's range comprises services such as the collection of business mail and innovative software solutions such as De- Mail. The FP Group is now present in many developed countries with its own branches and has a global market share of more than 10% in the area of franking machines. Having existed for over 90 years, the FP Group now benefits - on all markets - from the willingness of companies to digitise business processes and outsource their business mail to a professional service provider. In the 2015 fiscal year, the company generated EUR191.1 million in revenue. The FP Group employees over 1,000 people worldwide.

Contact: Francotyp-Postalia Holding AG Media Relations Telephone: +49 (0)30 220 660 410 Telefax: +49 (0)30 220 660 425 E-Mail: pr@francotyp.com

17.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

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: ir@francotyp.com 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 End of News DGAP News Service

521685 17.11.2016

@ dgap.de

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