francotyp-postalia holding ag · founded in 1923 as a franking machine manufacturer, fp evolved...

Francotyp-Postalia Holding AG

Company Presentation and Third Quarter 2009 Financial Results

Company Presentation Francotyp-Posalia Holding AG2/35

AGENDA

Business Model

Strategy & Markets

Third Quarter 2009 Financial Results

Appendix

FP at a Glance


FP at a Glance

� Founded in 1923 as a franking machine manufacturer, FP evolved into a successful mail management company with around 1,000 employees worldwide.

� IPO in 2006 and extension of product portfolio

� FP’s products cover the entire value chain in the outbound mail market .

� Market leader in Germany and Austria

� Expanding in key markets US and UK

� Globally 9.7% market share

� Large worldwide base of approx. 260,000 customers

� Strong aftermarket business leads to more then 62% recurring revenues and strong cash flow generation

Overview Key Figures

14.214.6

14.313.5

EBITDA in % of revenue

262,317266,634Installed Base

4.88.1Free Cashflow

97.3106.1Revenue

9M 20099M 2008€ million


Worldwide Presence

= Countries in which FP is active

(1) USA, Germany, UK, The Netherlands, Canada, Italy, Belgium, Austria, Singapore

= FP centres (subsidiaries) (1)

= potential FP Locations/ Points of Print or preferred partners

= Emerging markets

� International presence covered by high market entry barriersin core business

� Asia-Pacific as emerging FP target market

� Active in 9 countries with own subsidiaries and a dealer network in 44 countries

� International presence covered by high market entry barriersin core business

� Asia-Pacific as emerging FP target market

� Active in 9 countries with own subsidiaries and a dealer network in 44 countries

Business Modell


Will Electronic Mail Substitutes Letters?

?


We say: No!

Why? =>

Will Electronic Mail Substitute Letters?


The Written Letter Will Always Be Part Of Your Busi ness Life

Source: UPU, Postal Organisations

billi

on le

tters

Letter Volume Worldwide

395 394

400397397

394392394

2002 2003 2004 2005 2006 2007 2008e 2009e


YOUR MAIL IS OUR BUSINESS

Digital Mail Solutions:

The letter is sent out directly byyour IT-System .

Printing – Franking (DV) –Inserting – Consolidation

will be done by FP

Franking/Inserting:

Easy handling and highcustomer service standards on the base of high security technology

Clichee:

Space for professional advertisement

Consolidation:

Cost savings by pick-up service and presorting (Germany)


Our Competencies Support Customer‘s Needs

Competencies

� Technology complies to highest security standards by using powerful hardware and methods for cryptographic operations

� Elaborate customer service with professional after sales business

� Software solutions provider withcustomised products

� Unique network of cooperations with in-house and external companies

� Nationwide logistics with nine state-of-the-art sorting centres

Competencies

� Technology complies to highest security standards by using powerful hardware and methods for cryptographic operations

� Elaborate customer service with professional after sales business

� Software solutions provider withcustomised products

� Unique network of cooperations with in-house and external companies

� Nationwide logistics with nine state-of-the-art sorting centres

Customer’s Needs

� Efficient handling of letters through inserter and franking machines

� Professional image of letters combined with low cost marketing

� Processing of high letter volume through easy digital solutions

� Advantage of a physical letter

� Collection of individual and regular mail volume

� Unlock of discount potential

� Cost savings of up to 80%

Customer’s Needs

� Efficient handling of letters through inserter and franking machines

� Professional image of letters combined with low cost marketing

� Processing of high letter volume through easy digital solutions

� Advantage of a physical letter

� Collection of individual and regular mail volume

� Unlock of discount potential

� Cost savings of up to 80%

Digital Mail Solutions

Consolidation

Franking and Inserting


Tailored Solution for Every Customer

Approx. 50 letters/day

� Savings in time and cost when franking

� No excess franking charges or trips to the post offices

� Reliable, fast mail processingand letters with professional look

Approx. 50 letters/day

� Savings in time and cost when franking

� No excess franking charges or trips to the post offices

� Reliable, fast mail processingand letters with professional look

Till Klages, MD, Sparks Advertising, Munich

Over 250 letters/day

� Using franking machines andinserters

� FP konsomail to collect mail from the company and generatepostage discounts

� Highly professional and efficient mailroom management

Over 250 letters/day

� Using franking machines andinserters

� FP konsomail to collect mail from the company and generatepostage discounts

� Highly professional and efficient mailroom management

Michael Ulbrich, GM, MEDIA Logistik GmbH, Dresden

Type A Type B Type C

Around 3 million letters p.a.

� FP businessmail as software-based solution to deal with thetotal of all outbound mail

� Inbound mail solutions

� Savings of 80% hidden costs

Around 3 million letters p.a.

� FP businessmail as software-based solution to deal with thetotal of all outbound mail

� Inbound mail solutions

� Savings of 80% hidden costs

Gisbert Beckmann, GM, BAS AbrechnungsserviceGmbH & Co. KG, Berlin


Essential Savings Potential

A company may save up to 80% of hidden costs

Sav

ings

0 €

500.000 €

1.000.000 €

1.500.000 €

2.000.000 €

Janu

aryFebr

uary

Mar

ch

April

May

June July

Augus

tSep

tembe

rOcto

ber

Novem

ber

Decem

ber

- 80% 2.1mLetter/year

7,000Letter/day

€0.75savings/letter

€0.25Outsourcingcosts/letter

€1.00costs/letter*

Savings Outsourcing:~€1.500.000 per year

++~€170,000

postage savings

*based on studies of Fraunhofer Institute, McKinsey, Bundesnetzagentur, FP estimate

Strategy & Markets


FP Faces Opportunities in the World Wide Letter Mar ket

GlobalisationIndustrialisation

Technology Legislation

Development of emerging

markets

Need of high security standards

and alternative franking methods

Worldwide network of cross-

bordercommunication

Liberalisationand

deregulationof marketsT

echn

olog

yIn

dust

rialis

atio

n

Globalisation

Legislation


Multiple Growth Strategy of FP in the Coming Years

Expansion into

emerging markets

Growth in traditional markets

New growth opportunitiesthrough shift to

digital solutions

Push ofMail services

Markets

new

trad

ition

al

newtraditional Products


New Growth Opportunities Through Shift to Digital S olutions

Franking Methods (US)

60 68

2319

116 13

30%

40%50%

60%

70%

80%90%

100%

2004 2008

Stamped MailOthersFrankingPermit Mail (DV)

Emerging markets

Traditional markets

Markets

new

trad

ition

al

newtraditional

Source: USPS

Products

DigitalSolutions

MailServices

Taking the US-market as example we notice:More and more companies see the advantages of digital solutions for there mail processing.


2.54%

-0.40%

-16.31%

Growth in Traditional Markets Due to Positioning of Franking Machines

* USPS, Installed Base

<200 letters/day

Segment A

Frankingvolume

Key players / segments franking machine market

Marketgrowth*

(US marketCAGR

2004-08)

Neopost

Pitney BowesManu-

facturers

Emerging markets

Traditionalmarkets

Markets

new

trad

ition

al

newtraditional

B

200 – 2,000 letters/day

C

>2,000 letters/day

Products

DigitalSolutions

MailServices

Mainly the A-Segment is growing. Exactly the segment, where the FP-group provides state-of-the-art franking machines.


Strong Market Position of FP Group in Matured Marke ts

• 9.9% global market share

• 262k Installed base

• Installed base >80 countries worldwide

• Leading position in key markets

FP Market ShareFranking Machines

Global MarketFranking Machines

• Installed base: 2.7m

USA

4.1% 4.2%4.4%

4.6%

2006 2007 2008 Sep-09

UK

7.0%7.9%

8.7% 8.7%

0%

1%

2%3%

4%

5%

6%

7%8%

9%

10%

2006 2007 2008 Sep-09

GER

44.8% 44.6%43.8% 44.1%

2006 2007 2008 Sep-09


5 17 28 28 45 47

172

253

335

666

India

China

Russian Fed.

Thailand

Brazil

Malaysia

Japan

Germ

any

UK U.S.

Expansion into Emerging Markets

Source: UPU, Postal Organisations

Emerging markets

Traditional markets

DigitalSolutions

MailServices

Markets

new

trad

ition

al

newtraditional

Industrialised countries use letters more often. This reflects theopportunities of emerging markets and the BRIC countries.

Letters per inhabitant p.a.

Products


Liberalisation Opened a Myriad of Possibilities

Beta Systems Software

SAP

OracleCarriers

Software for document creation

Software/Services

Printer manufacturers

Diebold

Pitney Bowes

Neopost

Frama

Sage Software

USPS

RR Donnelley

DST Systems

FedEx

UPSDHL

Xerox HP

Ikon Office Solutions

Lexmark

Deutsche Post

Microsoft

PayPal (eBay)

Trustweaver

Automatic Data Processing

Totemo

ReadSoft

PGP Corporation GNU Privacy Guard

Niit Smart Serve

Elsag Datamat

Franking/Inserting

Esker

Captaris

omtool

eCopy

IBM

Printsoft

Kern

Nirva SystemsQM Technologies

Inscerco

PostCon (TNT)BriefGenioPresort

PrintCom(DPAG)

Cendris

Seiko Epson

CanonSamsung

OKI

Data-Pac

Telefrank

Ricoh

Gunther

Adobe

Stamps.com

StampIt (DPAG)

SmartStamp (Royal Mail)

Endicia.com

Click-n-ship (USPS)

Rena

Royal Mail

TNT

Hybrid mail

Service Point Solutions

Dymo

WincorNixdorfzazzle

Brother

Böwe Bell & Howell

Océ

BTA Digital Works (Neopost)

PIN Group

iq letternet

Mentana Claimsoft

Technology

Hefter

foxrayecom

Consulting

CodX Software

Grützmacher

AuthentiDate

Electronic Signatures/ Timestamps

Pitney Bowes

La Poste

WebStamp (CH Post)

PolyIC3M

DATEVD-Trust

TC Trustcenter

Deutsche Post Com

Deutsche Telecom

Print And MoreHasler

Accu-Sort Systems

AsmarcSystems

Bixolon

Zebra Tech.

Opex

Buhrs

CendrisDocument

Management

CodXSoftware

DDD

DuoShare

Duplo

Earth Class Mail

Eastman Kodak

Emtex

IBC

IBML

Harte-Hanks

Integram Expedited

Kofax

Pegasus Gruppe

PostMaticQuickSortTrackMyMail

Videojet Tech.

Solystic

Ernst Reiner GmbH

iab

freesort

MailConsult

Zöller & Partner

Xerox

Satori Software

Astro

Innosource

Stralfors

Outbound mail

Inbound mail

Franking

Inserting

Business ProcessOutsourcing

Consolidation / SortingOnline Postage

Softwaresolutions

Emerging markets

Traditionalmarkets

Markets

new

trad

ition

al

newtraditionalProducts

DigitalSolutions

MailServices


First Tasks to Transmit FP Strategy

Asia-Pacific

India

Singapore, Indonesia, Malaysia

Organic growth of installed base

High standard of customer service

InternationalRoll-out of

FPbusinessmail

mailOneConsolidation

DE-Mail

Markets

new

trad

ition

al

newtraditional

Emerging markets

Traditional markets

Shift

Services

Markets

new

trad

ition

al

newtraditionalProducts

Products

Third Quarter 2009 Financial Results


29.6 26.4

94.885.4

4.03.8

11.3

11.9

9m 2008 9M 2009 Q3 2008 Q3 2009

€ m

illio

n

Franking/Inserting (Mailroom) Software/Services (Mailstream)

High Stability of Recurring Revenue

� Franking/Inserting (Mailroom):� Stable recurring revenue with €60.5m (2008: €60.4m)

� US business on prior year’s level due to positive currency effect of €2.4m

� Currency effect leads to a minus of €1.2m in UK together with ongoing challenges of recession (€-0.5m)

� Germany feels also recession and reaches revenue of €44.6m (€-2m)

� Effect of cancelled high volume inserter business in NL end of 2008 (€-2m)

� Less decertifications and difficult economical environment reason for drop in revenue rest of europe (€-2m)

� Software and Mail Services (Mailstream):� Slight increase of revenue, but still reluctance to change processes

� Franking/Inserting (Mailroom):� Stable recurring revenue with €60.5m (2008: €60.4m)

� US business on prior year’s level due to positive currency effect of €2.4m

� Currency effect leads to a minus of €1.2m in UK together with ongoing challenges of recession (€-0.5m)

� Germany feels also recession and reaches revenue of €44.6m (€-2m)

� Effect of cancelled high volume inserter business in NL end of 2008 (€-2m)

� Less decertifications and difficult economical environment reason for drop in revenue rest of europe (€-2m)

� Software and Mail Services (Mailstream):� Slight increase of revenue, but still reluctance to change processes

Revenue-8.3%

106.1

97.3

-9.2%33.4

30.4

Software/Services (Mailstream)

3.3

8.68.3

3.0

9M 2008 9M 2009

€ m

illio

n

11.3 11.95.3%1.1

2.92.7

1.1

Q3 2008 Q3 2009

€ m

illio

n

iab (Outsourcing /Hybrid Mail

freesort(consolidation)

3.8 4.05.3%


EBITDA on Previous Year‘s Level and Increase of Pro fitability

EBITDA Margin

4.7

14.3 14.2

4.5

9M 2008 9M 2009 Q3 2008 Q3 2009

14.6%13.5%

15.4%

13.5%

9M 2008 9M 2009 Q3 2008 Q3 2009

EBITDA -0.7%

4.4%

€m

illio

n


Strong Free Cash Flow

* incl. currency effect of €0.0m (previous year €-0.2m) ** including €0.7m securities

€ million 2008 9M 2009

Cash flow from operating activities 18.7 10.7

Cash flow from investing activities -15.8 -5.9thereof:

R&D -3.7 -1.9

Tangible assets -3.6 -1.1

Intangible assets -3.8 -0.4

Leased inventories -4.9 -2.1

Corporate acquisitions 0.0 -0.4

Free cash flow 2.9 4.8

Cash flow from financing activities* -3.3 -3.6

Cash and cash equivalents 7.0** 8.3**


2008 2009e

Revenue guidance:

� Economic environment is still negative� Increased recurring revenue underlines FP’s

stable business model� Start of 2D barcode in Austria Q4� New product WebPost will be introduced in UK

market in Q4� Expansion of cooperation between Deutsche

Post AG and FP for digital solutions

EBITDA guidance:

� EBITDA reflects reduced revenue expectations � Agreement of protection of sites and cost cutting

programme will have positive impact on EBITDA� Restructuring costs for 2009: approx. €2.0m

(2008: €4.0m)

Revenue guidance:

� Economic environment is still negative� Increased recurring revenue underlines FP’s

stable business model� Start of 2D barcode in Austria Q4� New product WebPost will be introduced in UK

market in Q4� Expansion of cooperation between Deutsche

Post AG and FP for digital solutions

EBITDA guidance:

� EBITDA reflects reduced revenue expectations � Agreement of protection of sites and cost cutting

programme will have positive impact on EBITDA� Restructuring costs for 2009: approx. €2.0m

(2008: €4.0m)

Outlook 2009 – FP Confirms Guidance for 2009

Revenues

EBITDAbefore restructuring

136.0

€m

illio

n

142.4133.0

22.0

21.0-

€m

illio

n

22.219.0

2008 2009e

21.0


FP Stock Information

ISIN: DE000FHP9000

Segment: Prime Standard/ All Industrial

IPO: 30. November 2006

Reuters: FPHG.DE

Freefloat: 71.18%

Shares: 14.7 million

2.5%Treasury Stock

3.9%Quadriga Capital Ltd.

Main Investors:

22.4%Quadriga Capital Private Equity Fund II L.P.

4.85%Richelieu Finance Gestion Privée

3.28%Eric Spoerndli

5.11%Financiére de l'Echiquier

5.39%Baillie Gifford & Co

11.30%Amiral Gestion

Freefloat


Reasons to Invest in Francotyp-Postalia

� Founded in 1923, FP is an experienced manufacturer and service provider of mail handling equipment and services and for more than 85 years being The Number One player in Germany

� Strong global presence in all major markets and a strategic position in emerging markets

� Future-oriented product and services portfolio to fulfill customer needs worldwide

� High competence in technology and market knowledge

� Stable after-sales-business generating high percentage of recurring revenues result in strong cashflows underlining a sustainable and profitable business model

� Clear strategy for next years to lay foundation for further growths


Thank you for your attention.

We’ll be happy to answer your questions.

Appendix


� Working capital project lead to declining change in inventories

� Material expenses decline due to cost reduction and less product sales

� Personnel expenses €-1.5mdue to first results out of protection of site agreement and restructuring

� Depreciation shows mainly impact of currency effects in US and UK

� Scheduled amortisation of €9.3m

� Working capital project lead to declining change in inventories

� Material expenses decline due to cost reduction and less product sales

� Personnel expenses €-1.5mdue to first results out of protection of site agreement and restructuring

� Depreciation shows mainly impact of currency effects in US and UK

� Scheduled amortisation of €9.3m

Cost Cutting Programme and Restructuring Show Posit ive Impact

* before minorities ** after minorities

€ million 9M 2008 9M 2009 Q3 2008 Q3 2009

Revenue 106.1 97.3 33.4 30.4

Change in inventoriesOwn work capitalised

1.86.3

-2.24.2

0.32.1

-1.41.4

Total output 114.2 99.3 35.8 30.4

Material expensesin % of revenue

34.132.1

24.525.2

10.431.1

7.023.7

Gross profit 80.1 74.8 25.4 23.4

Personnel expensesin % of revenueOperating expenses ./. income

42.239.8

23.6

37.738.7

22.8

13.339.87.6

10.835.58.0

EBITDA before restructuringin % of revenue

16.815.8

15.415.8

5.115.3

5.217.1

EBITDAin % of revenue

14.313.5

14.214.6

4.513.5

4.715.4

Depreciation 7.4 8.6 2.6 2.9

EBITA 6.9 5.7 1.9 1.8

Amortisation 11.8 9.3 3.9 3.1

EBIT -4.8 -3.6 -2.0 -1.3

Interest resultFinancial resultTax result

-2.3-0.70.8

-2.70.6

-0.8

-1.00.7

-0.1

-0.80.6

-0.2

Net profit/loss* -7.0 -6.5 -2.4 -1.6

EPS (€)** -0.45 -0.42 -0.15 -0.10

EPS (€)adjusted by amortisation

0.14 -0.01 0.05 0.03


61.350.9

33.627.2

22.1

20.3

24.022.2

14.1

14.8

60.2

55.3

16.1

13.0

5.1

18.7

15.1

10,5

9,7

39.3

40.1

7.5

0.7

0.724.6

21.9

2008 9M 2009 2008 9M 2009

Cash and cash equivalents

Trade receivables

Inventories

Deferred taxes

Other assets

Tangible assets

Intangible assets

Trade payables

Other liabilities

Financialliabilities

Provisions

Equity

Assets Equity and Liabilities

Further Improvement of Cash and Cash Equivalents

164.6 164.6

€m

illio

n

149.9 149.9

Securities

� In Q3 2009 loan redemption of €4m

� Net debt of €47.7m (€53.2m in 2008)

� Further improvement of cash and cash equivalents

� Equity ratio of 18.2% (20.4% in 2008)

� Other liabilities on the way back to year end level of 2008

� In Q3 2009 loan redemption of €4m

� Net debt of €47.7m (€53.2m in 2008)

� Further improvement of cash and cash equivalents

� Equity ratio of 18.2% (20.4% in 2008)

� Other liabilities on the way back to year end level of 2008


Financial Calendar

Results Q3 2009 – Equity Forum Frankfurt/M 10 November 2009

Investor‘s Day February 2010Full Year Results 2009 April 2010


Investor Relations Contact

Sabina PrüserVice-President Investor Relations/Public Relations

Francotyp-Postalia Holding AG

Telephone+49 (0)3303 525 410Fax+49 (0)3303 53707 410

[email protected]

AddressTriftweg 21-2616547 Birkenwerder


Disclaimer

This report contains forward-looking statements on the business development of the Francotyp-Postalia Group. These statements are based on assumptions relating to the development of the economic and legal environment in individual countries and economic regions, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given entail a degree of risk, and the actual developments may differ from those forecast. Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as Western Europe (and especially Germany) or in the USA, UK, or Canada, and Singapore will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, Canadian dollars, Singapore dollars. In addition, expected business development may vary if the assessments of value-enhancing factors and risks presented in the 2008 Annual Report develop in a way other than we are currently expecting.

francotyp-postalia holding ag · founded in 1923 as a franking machine manufacturer, fp evolved...

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