The digital mailroom provider Francotyp-Postalia Holding AG remains on a profitable growth path. Revenue increased to EUR 100.3 million in the first half of 2016 compared with EUR 95.2 million in the previous year. On a quarterly basis, revenue rose from EUR 45.7 million in the second quarter of 2015 to EUR 49.0 million. The company recorded growth in its traditional franking machine business as well as in its new Mail Services and Software business areas. Against the market trend, franking machine revenue increased to EUR 63.1 million in the first half of 2016 compared with EUR 62.2 million in the same period of the previous year despite the growing headwind resulting from the strong euro. The company's growth was due to the success of the multiple award-winning PostBase family. In 2016, the FP Group introduced two new PostBase systems for larger mail volumes on the first markets.
In the new business areas, the FP Group increased its revenues by 12.6% to EUR 37.2 million in the first half of 2016. The Mail Services segment relating to the collection, franking, sorting and delivery of business mail with postage discounts were main contributors to this success. Revenue in this area increased by 15.3% to EUR 30.1 million.
EBITDA and EBIT growth
The success in the business areas is reflected in the Group's earnings for the first half of 2016. EBITDA improved by 2.5% to EUR 14.6 million, while EBIT increased by 3.5% to EUR 6.3 million despite the slightly higher level of amortisation and depreciation as anticipated. Consolidated net income was unchanged year-on-year at EUR 4.0 million. The company has already implemented operational excellence measures aimed at optimising the tax rate. As a result, it expects the tax rate for 2016 as a whole to be considerably lower than in the previous year. The main operational excellence measures also include the improved and significantly expanded Group funding. In June 2016, the company concluded a new, extended loan agreement with a volume of EUR 120 million at improved terms and conditions. This gives the FP Group the necessary scope to finance the planned growth over the coming years, including the possibility of acquisitions.
Free cash flow improves to EUR 6.3 million
In addition to its earnings power, the FP Group considerably improved its financial strength in the first half of 2016. Free cash flow improved significantly to EUR 6.3 million after EUR -0.6 million in the previous year thanks to the planned reduction in investments in leased products as well as an improvement in working capital. There was also a positive effect due to non-recurring cash inflows not recognised in earnings in the amount of EUR 1.7 million from the successful conclusion of mutual tax agreement procedures.
In light of the positive development in the first half of 2016, the Management Board is confirming its forecast for 2016 as a whole: Assuming that exchange rates remain unchanged, the company expects to see a slight year-on-year increase in revenue and EBITDA as well as a positive free cash flow.
Increased growth potential in the medium term
Rüdiger Andreas Günther, CEO of the FP Group, commented: "As a start, I am satisfied with our performance in the first six months of 2016. We recorded growth and demonstrated our strength in all business areas as expected. In the medium term, however, our company has a great deal more profitable growth potential to offer. To achieve this, we are currently enhancing our strategy and initiating operational excellence measures." The FP Group will present its enhanced growth strategy and information about the next steps in the autumn. Günther: "I am confident that we will leverage our company's potential."
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