FP GROUP OFF TO GOOD START IN 2014 AS EXPECTED

Francotyp-Postalia Holding AG, a multi-channel provider for mail communication, succeeded once again in increasing its revenue and earnings in the first quarter – traditionally a strong quarter for the Group – despite the strong Euro. In the first quarter of 2014, revenue increased by 2.1% to EUR 44.4 million. This growth was primarily attributed to significantly higher recurring revenue, particularly in the Mail Services and Software segments.

The higher total revenue and stable personnel costs decisively contributed to increasing earnings power in the first quarter of 2014. The FP Group generated EBITDA, operating earnings before interest, taxes and depreciation, of EUR 6.7 million compared with EUR 6.2 million in the first quarter of 2013. The EBITDA margin rose to 15%. As a result, EBIT rose, despite higher amortisations, to EUR 3.7 million versus EUR 3.4 million in the previous-year period. By contrast, the consolidated profit was down from the previous year (EUR 2.2 million) to EUR 1.9 million due to a higher tax result and negative financial result. However, free cash flow – the balance of cash inflows from operating activities and cash outflows from investing activities – improved significantly in the first three months of 2014 reaching a total of EUR 2.3 million compared with EUR 1.2 million in the first quarter of 2013.

Outlook for 2014: FP Group anticipates profitable growth

In view of the anticipated strong start to the financial year, the FP Group confirms its forecast for 2014 as a whole. The company expects revenue to grow to at least EUR 173 million, EBITDA to increase to at least EUR 25 million and an improvement in EBIT to at least EUR 12 million. With regard to free cash flow, the FP Group is anticipating a one-off negative value of EUR -2 million. The reason for this is the high level of capital expenditure expected in 2014.

Capital expenditure in 2014 primarily concerns investments in the rental markets of the USA and France. As a result of ongoing decertification, many companies in the USA are replacing their older franking machines with the new PostBase. At the same time, the FP Group is expanding its business in Europe’s largest market for franking machines, namely France. With the company also continuing to invest in the development of a new franking system and machines for production, total investments in the current year are expected to increase by approximately EUR 5 million to total EUR 19 million.

FP CEO Hans Szymanski explains: "In the current year, we will continue to lay the foundation for long-term success. In Germany, we are optimising sales activities with the Aufbruch 2015 initiative. At the same time, we are firmly establishing our franking machine business in two large markets: the USA and France. As a result, we are investing to a considerable extent in future growth and, at the same time, plan to increase revenue and our operating earnings. This demonstrates that the FP Group is well positioned and still has potential."