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Francotyp-Postalia Holding AG
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Preliminary figures for fiscal year 2018:
Berlin, 7 March 2019 - Francotyp-Postalia Holding AG (FP), the expert in secure mail business and secure digital communication processes, achieved its forecasts for revenue and EBITDA and actually exceeded its forecast for adjusted free cash flow. This is demonstrated by today’s company publication of its preliminary figures for fiscal year 2018. The ACT strategy constitutes the foundation for successes achieved in 2018 and will provide the basis for further significant growth in revenue and earnings in 2019.
In the fiscal year 2018, the FP Group generated revenues of EUR 204.2 million and grew slightly to EUR 206.9 million after adjustment for currency effects. FP is thus continuing to perform better than its competitors.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 17.1 million, growing by 1.3% to EUR 26.7 million on an adjusted basis. This figure was adjusted for currency effects and expenses for the ACT project JUMP, which totalled EUR 8.0 million in fiscal year 2018, putting them inside the initially planned range. Negative currency effects impacted revenue by EUR 2.7 million and EBITDA by EUR 1.5 million.
As a result, EBIT fell to EUR -0.3 million. As planned, depreciation and amortisation declined by 9.0% to EUR 17.3 million in 2018. Consolidated net income amounted to EUR 0.9 million. At EUR 0.06, earnings per share (EPS) were down significantly on the previous year’s level of EUR 0.29.
Adjusted for investments in finance lease assets, M&A and expenses for the ACT project JUMP, the FP Group generated a free cash flow of EUR 10.9 million in fiscal year 2018 (previous year: EUR 9.9 million). As planned, the cash flow was impacted by high investment in new products, offset by successful efforts made in the area of working capital management. Another positive effect came from a contribution of EUR 5.7 million from a mutual tax agreement procedure in accordance with the Double Taxation Convention between Germany and the USA, which was brought to a successful conclusion faster than expected.
FP again plans dividend distribution
In view of the positive free cash flow and having achieved its targets for 2018, the FP Group is adhering to its dividend policy despite the investments into the growth strategy ACT. At the Annual General Meeting, the Management Board and Supervisory Board will propose that the meeting approves a dividend payment of EUR 0.03 per share for fiscal year 2018. This represents a distribution rate of more than 50 percent of the consolidated net income. As in the previous year, the distribution for fiscal year 2018 will be paid in the form of a tax-free gross dividend (previous year: EUR 0.12).
Based on the assumption of constant exchange rates, FP had anticipated a slight year-on-year increase in revenue and adjusted EBITDA in fiscal year 2018. FP had also expected adjusted free cash flow to be positive but far below the level of the previous year. Among the financial performance indicators used to manage the company, the FP Group also reports adjusted key figures in order to convey decision-relevant information for assessing changes in revenue and on the development of the FP Group’s operational performance and changes in its cash and cash equivalents.
FP achieves operating growth in its core business
Revenue in the franking business reached the previous year’s level of EUR 127.3 million; after adjustment for currency effects, revenue in the core business increased by 2.1% to EUR 130.0 million. The stronger euro compared to the previous year was also reflected in the FP Group’s figures here. In a competitive market, its global market share increased in the meantime to over 11.5%, setting the basis for further growth, also in other product segments of the Group. FP continues to gain market share, especially in its strategic core markets of the USA and France, but also from a leading position in mature markets, it performed better than the competition for the last 12 quarters.
Revenue in the Software segment saw particularly strong growth, increasing by 13.5% to EUR 15.1 million, partly related to postage. This product segment also includes initial revenue contributions from the new digital products IoT (Internet of Things) and FP Sign. These innovative products will provide a basis for further profitable growth in the FP Group. The discoverFP web portal will be a gateway to a wide range of digital products in FP’s current and further growing customer base in the future.
The acquisition of the Berlin-based IoT specialist Tixi.com in 2018 and the investment in Juconn in January 2019 will complement in-house production and sales of hardware secure gateways, which form the cornerstone of secure communication and are an essential component in the IoT field. This allows for end-to-end solutions to be offered to customers in this growth market. IoT is expected to make significant contributions to growth over the next few years.
Revenue in the Mail Services segment amounted to EUR 61.8 million in 2018 against EUR 65.7 million in the previous year. This development comes as a result in particular of a reduction in processed mail volumes (-4.9%) combined with a more active management of the customer portfolio in line with revenue and profitability aspects.
ACT project JUMP is making FP fit for the future
The reorganisation and transformation program JUMP is the central project of the ACT growth strategy. Through this program, FP is becoming a more agile, dynamically growing company. Implementation began in the fourth quarter of 2018 and, as planned, expenses were incurred for this accordingly. Despite the fact that implementation has only just begun, initial recurring savings of EUR 0.3 million were already generated on an annualised basis.
With these measures, FP is being realigned across the Group in order to raise profitability to the targets communicated for 2020 and to accelerate revenue growth. Starting from 2020, the company anticipates annual EBITDA improvements of EUR 6.0 million. Key elements of JUMP include the company-wide introduction of standardised processes supported by a uniform ERP/CRM system and the establishment of two Shared Service Centres for North America and Europe in order to handle administrative tasks in a concentrated manner. The JUMP measures also include streamlining the management level in international sales and replacing the current decentralised organisation consisting of independent sales companies with three sales regions. Sales across all product segments (excluding IoT) and sales regions will be headed up by a single management in the future.
Rüdiger Andreas Günther, CEO/CFO of the FP Group, explains: “2018 was characterised by the transformation of FP. We are making FP fit for the future in order to achieve our targets for 2020. We lost a bit of momentum with regard to revenue in the fourth quarter, but we are growing in our core business – and will continue to grow in the franking business in 2019. We will also gain further momentum with our new digital products and business models. We already anticipate strong revenue growth for 2019, and earnings are also expected to improve strongly. Our target for 2020 is a revenue of EUR 250 million and an EBITDA margin of 17%.”
Strong revenue and earnings growth expected for 2019
For fiscal year 2019, FP anticipates a strong increase in revenue. Adjusted for expenses for the ACT project JUMP, the company also expects a strong year-on-year increase in EBITDA. In view of the fact that investment in ACT and new products is once again expected to be high, as in the previous year, the FP Group anticipates free cash flow for fiscal year 2019 to be positive but well below the previous year when adjusted for investment in finance lease assets, M&A and payments in connection with the ACT project JUMP.
The anticipated development of financial performance indicators for the 2019 fiscal year is based on the assumption of constant exchange rates.
Key figures at a glance:
|in EUR million||2018||2017||Change|
Revenue (as reported)
|Cost of materials||101.6||102.9||-1.2 %|
|Staff costs||64.7||59.2||9.3 %|
|Other expenses||36.4||34.1||6.9 %|
EBITDA (as reported)
|Consolidated net |
|Earnings per share|
(in €, basic)
|Earnings per share|
(in €) diluted
|Adjusted free |
*Assuming constant exchange rates.
For press enquiries please contact:
Maik Laske, Treasury/M&A, 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 2018. 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 96 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.