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Berlin, 1 March 2018 - Francotyp-Postalia Holding AG (FP), the expert in secure mail business and secure digital communication processes, continued its successful growth course in fiscal year 2017. The ACT growth strategy and associated projects are already showing positive effects in the year of their implementation. The forecasts for revenue and EBITDA were met, while the forecast for adjusted free cash flow was actually exceeded, according to the provisional figures. The company will pick up the pace again with further measures in the current fiscal year 2018, the year in which ACT will be implemented, and will lay the foundations for the significantly faster growth rate that is planned and for the achievement of its medium-term profitability targets.
For fiscal year 2017, FP had forecast a slight increase in revenue and EBITDA and adjusted free cash flow at the level of the previous year, based on the assumption of constant exchange rates. Revenue moved up by 2.7% to EUR 208.4 million, adjusted for currency effects (2016: EUR 203.0 million), while EBITDA rose by 1.1% to EUR 27.5 million (2016: EUR 27.2 million). Adjusted for the investment in finance lease assets and M&A, free cash flow amounted to EUR 9.9 million, compared with EUR 9.5 million in fiscal year 2016.
The strong euro, particularly in relation to the US dollar and pound sterling, is reflected in the figures reported for 2017. Even taking into account exchange rate effects, however, consolidated revenue grew by 1.7% to EUR 206.3 million. In contrast, EBITDA was down 3.3% year on year at EUR 26.3 million. Negative exchange rate effects across all currencies totalled EUR 2.1 million in terms of revenue and EUR 1.2 million in terms of EBITDA in 2017.
FP spent a total of EUR 3.5 million on the implementation of the ACT growth strategy in 2017. These expenses are already paying off in many areas. Key aspects included the strengthening of international sales, particularly in the strategic target markets of the US and France, and the further professionalisation of administrative areas of the Group.
The considerable effort put into this began to show positive effects in 2017. Revenue in the traditional franking and inserting business increased by 1.1% to EUR 127.3 million in 2017, despite the strong euro. Adjusted for negative exchange rate effects, the company achieved growth of 2.8% in its core business in 2017. Income from product sales was up 6.3% at EUR 43.7 million (2016: EUR 41.1 million). This confirms the basic assumption behind the ACT growth strategy: FP can grow against the market trend in its core business and further increase its market share as planned.
Revenue in the Mail Services product segment grew by 4.6% year on year to EUR 65.7 million (2016: EUR 62.8 million). This growth resulted primarily from the increase in revenue from the franking service, which had a correspondingly strong impact on the cost of purchased services. Revenue in the software business came to EUR 13.3 million in 2017, compared with EUR 14.2 million in the previous year, owing to a temporary decline in the volumes of mail processed by hybrid mail services.
Rüdiger Andreas Günther, CEO of the FP Group, said: "We kept our word and achieved all the annual targets we had set for 2017 in full – despite the known challenges in the Mail Services segment. We believe in our core business with franking systems. We are gaining market share. We are developing innovative products: with the discoverFP portal solution and with FP Sign, we are accompanying our customers into the digital age. Last year we focused on implementing our ACT growth strategy. 2018 will be the year of ACTion. The figures we have presented show that our strategy is right. But we can and must continue to grow. We are getting closer to our customers and gaining new ones. We want to become even faster and more agile. We're setting the course for that now."
Along with the planned investment in the ACT growth strategy, there were one-time expenses totalling EUR 1.5 million in 2017, including in connection with the decision to bring forward the realignment of the Mail Services segment and the concentration of production-related activities at the Wittenberge site. There was a positive effect of EUR 2.8 million from statute-barred liabilities.
As expected, depreciation and amortisation increased to EUR 19.1 million, compared with EUR 17.5 million in the previous year. EBIT came to EUR 7.3 million, compared with EUR 9.7 million in the previous year.
The FP Group had implemented measures in the previous year to significantly improve the tax rate, which continued to have an effect in 2017. The tax rate consequently came to 34.3%, compared with 35.5% in the previous year.
Consolidated net income amounted to EUR 4.6 million, compared with the previous year's figure of EUR 6.2 million. Earnings per share (basic) thus stood at EUR 0.29, compared with EUR 0.36 in 2016.
Continuity in dividend policy
Also in the course of implementing its ACT strategy FP Group holds on to its dividend policy. The Management Board and Supervisory Board will propose to the Annual General Meeting to distribute a tax-free dividend of EUR 0.12 for the last fiscal year from the tax account. As a result shareholders are receiving a net dividend of EUR 0.12 for the fourth time in succession. In the previous year, a gross dividend of EUR 0.16 per share was granted. This corresponds to a net dividend of EUR 0.12.
FP anticipates profitable revenue growth2017 was all about the implementation of the ACT growth strategy. 2018 will be the year of ACTion. The company has a clear focus on its medium- and long-term goals. With this in mind, FP will accelerate the implementation of its numerous projects and measures in 2018. It will invest EUR 6 million to EUR 8 million in the projects that have been launched to improve the structure and organisation (project name JUMP) in 2018. The FP Group's performance will be sustainably enhanced.
Adjusted for the associated expenses, the FP Group expects a slight year-on-year increase in EBITDA. The FP Group anticipates a slight increase in revenue compared with the previous year. Owing to increased investment in new products, and not including possible payments in connection with the JUMP project, the company expects adjusted free cash flow, excluding additions to finance lease assets and M&A, for 2018 to be positive but well below the previous year. The anticipated development of financial performance indicators for fiscal 2018 is based on the assumption of constant exchange rates.
FP will use the value-enhancing effects achieved and expected from the implementation of ACT to meet its targets for 2020 as planned. By 2020, FP plans to generate revenue of EUR 250 million and an EBITDA margin of 17%.
Key figures at a glance:
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*Assuming constant exchange rates.
For press enquiries please contact:
Dr Joachim Fleϊng, Head of Investor Relations
Tel.: +49 (0)30 220 660 410
Contacts in the company:
Karl R. Thiel, VP Corporate Communication
Tel.: +49 (0)30 220 660 123
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About Francotyp-Postalia (FP)
The FP Group, a listed international company headquartered in Berlin, is an expert in secure mail business and secure digital communication processes. As the market leader in Germany and Austria, the FP Group offers products and services for efficient mail processing, consolidation of business mail and digital solutions for businesses and authorities with its product segments "Franking and Inserting", "Mail Services" and "Software". The Group generated revenue of more than EUR 200 million in 2016. Francotyp-Postalia is represented in ten countries with its own subsidiaries and in a further 40 countries via its own network of dealers. Thanks to a history spanning more than 95 years, FP has a unique DNA in the fields of actuator and sensor technology, cryptography and connectivity. It has a share of over 10% in the global market for franking systems.
You can find out more at www.fp-francotyp.com.