FP GROUP: DEVELOPMENT OF NEW PRODUKTION SITE SHAPES HALFYEARLY REPORT

Francotyp-Postalia Holding AG, the first multi-channel provider for mail communication, is constructing a new production line in Wittenberge, Brandenburg in the current financial year. Manufacture of the new Phoenix franking system is scheduled to begin at the new site from the first quarter of 2012. The new direction for production and the associated discontinuation of production at the previous Birkenwerder site dominate the 2011 halfyearly report.

Restructuring costs and higher personnel costs have meant that the EBITDA result for the first half of the current financial year was EUR 3.9 million, compared with EUR 12.8 million in the same period of the previous year. The development of the new production line and the impending closure of the production site in Birkenwerder have resulted in restructuring costs of EUR 8.0 million in the first half of 2011. Thereof, a provision of EUR 5.4 million was made for the redundancy scheme in the second quarter, which comprises a total volume of EUR 7.5 million for the redundancy scheme. In addition, the company had made a provision of EUR 0.3 million in the first quarter 2011 for cost adjustments at its Dutch subsidiary. Thereby, the restructuring costs for the first half-year sum up to EUR 8.4 million, while EBITDA, adjusted for restructuring costs, therefore amounts to EUR 12.3 million. Owing to an increase in provisions, the companies’ consolidated net income before non-controlling interests in the first six months of the year amounted to EUR -4.2 million, against EUR -0.8 million in the same period of the previous year.

Growth in revenue of 22.6%

In the first six months of the current financial year, the FP Group increased revenue to EUR 80.9 million, against EUR 66.0 million for the previous year. This was largely due to the change in the reporting logic as part of the new regulations for sales tax on postal services in Germany that came into effect on 1 July 2010; this resulted in a positive revenue effect of around EUR 11.6 million in the first half of 2011. At the same time, the Group moved forward with its ongoing development into a complete service provider. In March, the company acquired a majority stake in Mentana-Claimsoft, which specialises in electronic signatures and is also a member of the De-Mail project.

Development of new direction for production will pay off from 2012

This successful ongoing development has been a major contributing factor in the FP Group reaffirming its forecast for 2011 as a whole. The company expects a revenue corridor of between EUR 160 and EUR 165 million and an EBITDA range of between EUR 25 and 27 million before restructuring costs. However, on account of higher personnel costs, the FP Group anticipates that the EBITDA result before restructuring costs will come in at the lower end of this range of between EUR 25 and EUR 27 million. Hans Szymanski, CEO of FP-Group, explains: “This restructuring is a measure of key importance in securing the future of the FP Group. It may impact our result in the current financial year, but from next year onwards we will benefit from it in the long term.”