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Berlin, May 26, 2020 - Francotyp-Postalia Holding AG (FP), the expert for secure mail business and secure digital communication processes, has significantly increased its revenue and EBITDA in the first quarter of 2020. The company continues to successfully implement its ACT strategy and maintains its profitable growth.
In the first three months of the year, revenue rose by 9.4 % to EUR 57.0 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose significantly by 15.1 % to EUR 8.0 million. In the first quarter, FP generated free cash flow of EUR -17k compared to EUR 2.9 million in the same period last year. Adjusted for investments in finance lease assets, M&A and payments for the ACT project JUMP, the FP Group achieved a free cash flow of EUR 2.8 million in the reporting period, compared with EUR 7.4 million in the same period last year. Free cash flow was affected by a change in working capital as of the balance sheet date and, in particular, by the planned build-up of inventories during the year to ensure delivery capability during the SARS-CoV-2 pandemic.
FP continues to grow in its core business
In the core business of franking and inserting, revenue increased by 7.1% to EUR 35.3 million. Sales contributions from the acquisition of Hefter Systemform are included for the first time (EUR 0.7 million). The effect of the reassessment of the useful life of leased products in 2019 (EUR 0.9 million) and positive currency effects (EUR 0.3 million) also contributed to the increase in sales. Compared with the rest of the industry, FP is thus continuing to set itself apart from the competition in an increasingly challenging market environment and has been steadily increasing its market share since 2016; worldwide, this is more than 12%.
Revenue in the Mail Services business area, the product area surrounding the collection, franking and consolidation of business mail, rose by 19.3% to EUR 17.2 million. The business unit is thus demonstrating the results of its successful reorientation and is growing profitably again. The volume of letters processed grew slightly; the postage increase by Deutsche Post AG in the previous year also contributed to this success.
The revenue in the Software/Digital business was slightly lower in the first quarter of 2020 at EUR 4.5 million compared to EUR 4.7 million in the same period of the previous year. In addition to a decline in business with Hybrid Mail Services, there were still no significant revenue contributions from FP Sign and, as a result of the SARS-CoV 2 pandemic, also from the Internet of Things (IoT) business. Nevertheless, the Company remains positive about the new digital business in the long term. The digital transformation will be sustainably accelerated by the changed working conditions during the pandemic and offers a positive environment for secure digital solutions.
Consolidated net income increases by more than 50 %
In the first three months of 2020, the FP Group increased EBITDA and the EBITDA margin to 14.0 %, compared with 13.3 % in the same period of the previous year. The Mail Services segment also added to this, making a clearly positive contribution to earnings for the first time again. As expected, the ACT project JUMP also delivered increasingly recurring positive savings effects.
Depreciation and amortisation fell slightly in the first quarter of 2020 to EUR 5.4 million, compared with EUR 5.6 million in the previous year. EBIT doubled to EUR 2.6 million and consolidated net income rose by 52.9% to EUR 1.9 million. This corresponds to earnings per share of EUR 0.12 compared with EUR 0.08 in the first quarter of 2019.
Rüdiger Andreas Günther, CEO of the FP Group, says: "FP had a good operational start to the 2020 financial year, with the corona pandemic not having a noticeable impact until mid-March. With our solid business model and comfortable liquidity position, we will steer the Group safely through this crisis. Like many companies, we are experiencing a reluctance to make purchases on the part of our customers, but FP has a supporting share of recurring income".
Guidance for 2020 confirmed
The successful start to the 2020 financial year strengthens the management's conviction that with ACT it has set the right strategic course for the FP Group. While the Company is showing solid growth in its core business, its digital products hold considerable potential for the future. This is all the more true in view of the expected acceleration in digitisation triggered by the corona pandemic, which will be sustainable.
The full economic consequences of the SARS-CoV-2 pandemic are not yet foreseeable. Nevertheless, the FP Group is expecting a significant slump in economic output in all of the Company's business areas, at least temporarily. For this reason, the FP Group continues to expect a significant year-on-year decline in revenue, EBITDA and adjusted free cash flow for fiscal year 2020 (assuming exchange rates remain unchanged).
Dates: The full quarterly report will be published on 28 May 2020 and will then be available for download at https://www.fp-francotyp.com/de/quartalsberichte/fb7e70a45043a8b4.
|in € mill.||Q1 2020||Q1 2019||Change|
|Cost of materials||28.0||25.3||10.8 %|
|Personnel expenses||16.0||15.7||1.8 %|
|Other expenses||8.7||8.9||-2.8 %|
|Depreciation and amortisation||5.4||5.6||-3.8 %|
|Group net result||1.9||1.2||52.9 %|
|Earnings per share (in €)||0.12||0.08||52.6 %|
|Adjusted free cash flow||2.8||7.4||-62.1 %|
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The internationally active, listed FP Group, headquartered in Berlin, is an expert in secure mail business and secure digital communication processes (FP = "Secure Digital Communication"). As the market leader in Germany and Austria, the FP Group offers digital solutions for companies and public authorities, as well as products and services for efficient mail processing and consolidation of business mail, in its "Software/Digital", "Franking and Inserting" and "Mail Services" product segments. In 2019, the Group achieved revenues of around 210 million euros. FP is represented by its own subsidiaries in ten countries and by its own dealer network in 40 other countries. From its almost 100-year corporate history, FP has a unique DNA in the fields of actuator technology, sensor technology, cryptography and connectivity. FP has a global market share of more than twelve percent in franking systems and, in the digital sector, has unique, highly secure solutions for the Internet of Things (IoT/IIoT) and for digital signatures on documents.