FRANCOTYP-POSTALIA UPDATES ITS FORECAST FOR 2010

Francotyp-Postalia Holding AG, a global services provider active in the mail processing segment, has announced its third quarter 2010 figures and has revised its forecast upwards for the full year. The Company now expects to close 2010 with revenue between 140 million euros and 145 million euros and EBITDA between 24 million euros and 26 million euros (excluding restructuring charges). Due to the planned restructuring of its production area, the Company has made a provision in the third quarter of 2010 of 1.3 million euros to cover related charges.

The FP Group greatly improved its earnings ability in the first nine months of the current year, despite increased material expenses. The Company's EBITDA result improved to 18.9 million euros, compared to 14.2 million euros for the comparable period of 2009. After allowing for restructuring charges of 1.3 million euros, the FP Group achieved an EBITDA result of 20.2 million for the first three quarters of 2010.

The FP Group has also greatly improved consolidated net income. Positive developments in the previous quarters continued in the third quarter 2010. Whereas the Company reported flat net income in the second quarter of 2010, by the third quarter of 2010 consolidated net income came to 1.6 million euros. The result for the same reporting period of the previous year was negative at -1.6 million euros. Regarding the first nine months of 2010, the Company posted consolidated net income of 0.8 million euros, compared to a consolidated loss of -6.5 million for the same period of the previous year.

Free cash flow, the difference between cash inflow from operations and cash outflow from investment activity, rose during the first nine months of 2010 to 7.4 million euros, compared to 5.5 million euros for the same period of the previous year.

Increased sales revenue due to changes in sales tax rules in Germany

The FP Group reported revenues of 105.8 million euros for the first three quarters of 2010, compared to 97.3 million euros in the same period of the previous year. Apart from a general improvement in the global economy and the Company's declared strategy to move forward into the future as a service provider, increases revenues were also due to a change in the declaration process as part of the new sales tax rules (VAT) for postal services in Germany which came into force on 1st July 2010. As a result, the FP Group reported revenue of 39.8 million euros in the third quarter of 2010, compared to 30.4 million euros in the third quarter of 2009. The positive revenue effect due to the new tax legislation was also reflected in the increase in revenue from recurring revenues, amounting to 79.5 million euros during the first nine months of 2010 as against 72.5 million euros for the same nine months of 2009. In addition to the Company's mail processing services, a sustained upturn in revenue came from service agreements, rental business, teleporto, the sale of consumables and software solutions.

Future ability of the FP Group

"The results of the first nine months show that our Company is on a good path. Nevertheless, we must implement the planned restructuring of our production area successfully if we are to safeguard the FP Group's long-term future," declared Hans Szymanski, the Company's CFO. Francotyp-Postalia is planning to restructure its production area, where a total of 120 staff is employed. This will involve partial closures of individual production areas, as well as other restructuring measures.