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FP Group investing in future growth in 2014
Birkenwerder, 28 August 2014. As expected, the half-year financial statements of Francotyp-Postalia Holding AG, the multi-channel provider for mail communication, were dominated by increased investments in future growth. In the first half of 2014, investments amounted to EUR 8.6 million compared to EUR 7.3 million in the same period of the previous year. In line with the increased investments, free cash flow amounted to EUR -1.1 million compared with EUR 0.3 million in the same period of the previous year.
Currency effects influence revenue and income
The continued strength of the euro made its effect felt in operations. Overall, revenue amounted to EUR 84.6 million in the first half of 2014 compared with EUR 85.5 million in the year earlier period, whereby revenue was depressed by exchange rate effects of EUR -0.9 million. A downward trend in product revenues was balanced by increased recurring revenues, especially in the software and mail service business.
EBITBA for the first six months of 2014 improved to EUR 11.8 million, against EUR 11.5 million for the same period in 2013; the EBITDA margin increased to 14 percent. An even greater improvement was prevented by currency effects totalling EUR -0.6 million. In view of increased writedowns due to the successful exchange business in leased machines in the USA, EBIT was only slightly below the previous year's EUR 5.9 million. The consolidated net income increased to EUR 2.9 million, following EUR 3.2 million in the first half of 2013.
Growth in revenue projected to reach at least EUR 173 million
In view of a first half business performance that was largely in line with expectations, the FP Group continues to assume that its ambitious targets for 2014 – before adverse exchange rate effects - can be reached. Discounting currency effects, the Group is aiming for revenue growth to at least EUR 173 million and improvements in the EBITDA and the EBIT to at least EUR 25 million and EUR 12 million respectively. This profitable growth is contingent on conditions in the second half continuing to develop in line with expectations and on sales and sales initiatives taking effect. The FP Group is currently developing a dealership sales channel in its German home market and is promoting the sales of its franking machines in the US lease market. Furthermore, the Group is at present very successfully introducing its PostBase franking system in Italy – also in the form of a leasing business. In addition, the launch of PostBase is planned in France, Europe's largest franking machine market, likewise as a purely leasing business. In view of the associated investments, the Group is projecting a non-recurring negative free cash flow of EUR -2 million for 2014.
"2014 will be entirely dominated by investments in future growth," says FP's CEO Hans Szymanski. However, it is not yet possible to quantify to what extent these investments will start to pay off in the coming year and thus make the required contribution to achieving the medium-term targets for 2015. The Management Board is assuming that there will be an improvement in the operational result in the coming year, whereby it is unlikely that the EBITDA target of EUR 30 million will be fully met in 2015. The medium-term targets primarily provide a clear perspective of the opportunities open to the FP Group after achieving an increase in revenues and successful restructuring. Szymanski noted: "We are now realising these opportunities step-by-step, thus enhancing the financial and earning capacity of our Group."
Szymanski is convinced that the successes in the major leasing markets and in the promising software and mail services business primarily demonstrate that: "Even if we need a little more time in some places, FP's strategy is working. And this creates a solid basis for shareholders to share in the Group's success in the form of dividends into the future."
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Consolidated net income
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Consolidated net income