EDITORIAL NEOPOST S MOMENTUM CONTINUES IN 2011

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1 2011 LANDMARKS

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3 EDITORIAL NEOPOST S MOMENTUM CONTINUES IN 2011 In North America, Europe and the Asia-Pacific region, 2011 was a robust year for Neopost. There was a number of new initiatives and successes in 2011, including new product launches, development of services, numerous contracts won in the area of logistics and the expansion of data management activities. In the course of the year, day after day, the Group s staff continued to find innovative ways of improving communications for companies and organisations, build solid relations with Neopost clients and partners and commit itself to an environmentally-friendly approach. Our achievements for the year are shown on each of the pages that follow. 1

4 C ONTENTS 2

5 LANDMARKS 2011 CONTENTS PROFILE 4 Neopost DIALOGUE 6 Interview with Denis Thiery, Chairman and CEO PORTRAIT 10 Management team TRENDS 12 A changing world WORLDWIDE 14 International presence 16 Around the world in 2011 HIGH-TECH 18 Renewed product ranges 22 Research & Development GOOD ADDRESSES 24 Data quality AT YOUR SERVICE 26 Making even more of a difference 28 Client testimonials TRAVEL 30 Tracking parcels and goods SPECIAL FEATURE 32 Responsibilities and commitments MEETING 36 Board of Directors FINANCE 38 Neopost on the stock market indicators summarised financial statements 3

6 A specialist in mail preparation and processing, Neopost supplies innovative and evolving solutions for mail and parcel processing, data and document management, and logistics. Neopost offers comprehensive solutions that include equipment and infrastructure, with a broad range of software, online services, as well as maintenance, advisory services and financing. T o allow companies, public authorities and associatons to focus on their core business activities, Neopost puts technology at the service of the quality of their relations with their customers. WE VALUE YOUR MAIL 4

7 LANDMARKS 2011 PROFILE 1st in Europe 2nd in the world 18 countries in which Neopost operates directly 90 countries in which Neopost solutions are sold 5,500 employees 800,000 clients worldwide 1,002,600,000 in sales in

8 INTERVIEW DENIS THIERY Chairman and Chief Executive Officer You have topped the 1 billion sales mark and your operating margin remains just as high. What are the key factors behind this performance? DENIS THIERY: We achieved a very impressive performance in In addition to exceeding the symbolic threshold of 1 billion, there are other reasons to be satisfied. Firstly, three-quarters of sales were generated outside France, which illustrates Neopost s strong international dimension. Furthermore, the 5.6% increase in sales at constant exchange rates stems from growth in all regions, all business lines and every category of revenues. At the same time, we managed to maintain operating margin of over 25%. I believe that this performance relates as much to our commercial performance and the competitiveness of our products and services, as to our rigorous management and the relevance of our business model, year after year. With the acquisition of GBC-Fordigraph in Australia, you have new aims for the Asia-Pacific region. Can you tell us more? D.T.: Optimising our distribution network is an integral part of our strategy. Acquiring our own distributors not only allows us to exercise tighter control over our marketing policy, but also provides an effective means of expanding our geographical presence. It is with this in mind that we acquired GBC-Fordigraph, our main distributor in Australia, in June This is a major acquisition, as GBC-Fordigraph represents additional full-year sales of 30 million. The integration of GBC-Fordigraph has proven particularly swift. In order to step up our development in this part of the world, we have opened a regional office in Singapore. The Asia-Pacific region, which represented sales of just 12 million in 2010, is expected to achieve sales of over 50 million in 2012, and our aim is to double this amount within the next three to five years marks your return to the low-end segment. What are your aims? D.T.: Over the past few years, we focussed on the mid and high-end markets, as we wanted to improve our profitability by increasing average revenues per customer. Cross-selling between our mailing and document management activities, as well as the development of services, have also made a significant contribution to this. We currently believe that we are in a position to increase our presence in the low-end segment, generating similar operating margin to other business lines. To do this, we have put in place a dedicated sales and support organisation in our major markets. This is based on remote handling of our prospects and clients via different means of communications, which allows us to avoid travel and increase productivity. The launch of the latest model in our IS range, the IS-280, a highly competitive entry-level mailing system, fits perfectly with our ambition in this segment. While we hope to be able to regain market share rapidly in this segment, this new organisational structure also allows us to redeploy our field sales teams to the mid and high-end segments. 6

9 LANDMARKS 2011 DIALOGUE In September 2011, you announced the adoption of a new optimisation plan. How is this plan progressing? D.T.: The continuous streamlining of our operations is very much part of our management culture, and the optimisation plan announced in 2011 fits in fully with this approach. The aim is to achieve additional savings whilst fostering new positive momentum thanks to a more efficient and dynamic organisational structure. The implementation of this plan is progressing well. In France, we have combined our two distribution subsidiaries so that we only use a single brand name and in order to optimise our coverage of the market. In the United States, the relocation of logistics activities to our head office in Connecticut has allowed for greater integration of this business with the rest of our operations. The relocation of address printer activities from Munich to Bagneux reflects the same aim. Economic conditions remain difficult and uncertain and Neopost is operating in a mature market. How do you see the future for your mail-related activities? D.T.: The mail room equipment market is a mature market. However, this is a highly profitable business which continues to provide strong recurring cash flows. We also have the capacity to create our own growth opportunities in this sector, with considerable strengths allowing us to develop our position as No. 2 worldwide and continue to capture a growing share of revenues in this market. To do this, we can count on the extension of our geographical presence, particularly in the Asia-Pacific region, as well as our commercial successes in high-end document 7

10 INTERVIEW CONT D management systems, for example, or the promising sales growth achieved directly with postal organisations. We shall also continue to apply the recipes for Neopost s success: investing in innovation, acquiring additional distributors, and developing leasing and financial services activities. We will then begin to capitalise on our new distribution channel dedicated to the low-end segment, and the focusing of our field sales teams on clients with the most complicated requirements. Our overall aim is to achieve growth of 2-3% a year at constant exchange rates in mail-related activities, while also maintaining high operating margin. You seem to be harbouring even greater ambitions in your associated activities not directly related to mail. D.T.: We already generate sales of around 80 million in activities not directly related to mail, such as address and data quality, shipping and tracking solutions, and document composition software. Our aim is to step up the rate of growth of this portfolio so that it represents sales of around 200 million within the next three years, on the basis of current exchange rates. This will be achieved through organic growth, acquisitions and the signing of partnership agreements. The logic behind this expansion lies in exploiting the potential represented by the quality of relations with our 800,000 clients and enhancing the range of solutions offered to them. As regards acquisitions more specifically, we have set ourselves a series of very clear investment criteria: we will be looking at niche markets offering potential for double-digit growth, synergies to be developed with our client base and acquisitions allowing us to achieve return on capital employed of around 15% after three to four years. What is the outlook for the next few years? D.T.: We are confident of our ability to continue to achieve profitable growth in revenues and market share in mail-related activities. At the same time, we want to step up the rate of growth in our associated activities. Our client base is made up of small and medium-sized businesses and institutions. In the long term, our aim is to support them through a series of issues relating to communications flows developed around and alongside traditional mailing activities. We believe that our clients will have a growing need for advice and technical assistance to manage and coordinate effectively all of the communications means they use. In total, and on the basis of current exchange rates, we believe that we are in a position to generate sales of around 1.2 billion within three years, with the proportion of revenues from activities not directly related to mail doubling from 8% to over 16% of total sales. Do you think that Neopost will be able to continue to pay high returns to its shareholders? D.T.: Despite the provision relating to the new optimisation plan, our net income has remained virtually stable and we have been able to maintain our dividend at the same level as last year, which illustrates the regularity of Neopost s returns to its shareholders. Neopost is in excellent financial health. Our equity has increased further and our debt has decreased despite the acquisition of GBC and the development of our leasing portfolio. Thanks to our recurring cash flow, we should be able to continue with our policy of paying out high returns, which along with the growth targets we have set increases the visibility we want to give to our shareholders. 8

11 LANDMARKS 2011 DIALOGUE We are confident of our ability to continue to achieve profitable growth in revenues and market share gain in mail-related activities. At the same time, we want to step up the rate of growth in our associated activities. 9

12 LANDMARKS 2011 PORTRAIT Management TEAM A CLOSE-KNIT TEAM TO STEER OUR ACTIVITIES AROUND THE WORLD The management team develops and implements Neopost s strategic choices around the world. The team consists of 13 senior managers, all of whom have a truly international profile. On the strength of the highly complementary skills of its members, the management team embodies and gives life to the Neopost spirit of ambition, progress and commitment. A DECENTRALISED STRUCTURE IN ORDER TO BE CLOSER TO OUR CLIENTS Focused on its clients and their concerns, the Neopost group gives its subsidiaries a high degree of operational autonomy. The limited number of hierarchical levels helps to circulate information and knowledge within the Group, as well as ensuring responsiveness and agility in decision-making. Neopost s decentralised structure encourages the values of taking on challenges and recognition. 10

13 from left to right Jean-François LABADIE Finance Thierry LE JAOUDOUR Supply chain Chris HOCKEY Human Resources Enno EBELS Data quality solutions Philippe BOULANGER R&D Gavin MACRAE Strategic partnerships Henri DURA Document management solutions Denis THIERY Chairman and Chief Executive Officer Susan MACKE Marketing & Strategy Clem GARVEY Europe, Asia-Pacific & Exports Alain FÉRARD Neopost ID Alain MIDOWSKI Legal Dennis LESTRANGE North America 11

14 A CHANGING WORLD The world is changing. In order to develop while also improving their efficiency, companies are reviewing their processes and integrating technical innovations into their organisational structure and systems. The postal sector is in a state of flux. Postal organisations are reinventing and modernising themselves. Efforts to improve efficiency and profitability are reflected by the growing automation of processing and delivery tasks. New operators are coming into the frame, particularly in Europe against the backdrop of the complete opening up of the sector to competition since January International trade of goods and services is growing. E-commerce is boosting parcel flows. ADDRESSES AND DATA, VALUABLE ASSETS Data relating to clients, suppliers and prospects are valuable for many of the company s departments, as a pre-requisite for successful monitoring of trade payables and receivables, orders, settlement of invoices and deliveries. This data is vital for organising and customising commercial operations and implementing effective direct marketing campaigns. Addresses that are incomplete, incorrect, illegible or which do not correspond to the recipient are sources of unnecessary expenditure for postal carriers and represent such an additional cost that incentive rates are introduced to improve their quality. Whether the automation of the processing of packages and letters, the profusion of media used to target clients, development of companies operations in other countries or the need to adapt to different coding systems for contacts, development of e-commerce, invoicing and delivery forms, this is a long list of factors attaching even more value to the company s data and the quality of this data. The quality of information used by companies and organisations is vital. Having data that is valid, consistent and up to date determines their commercial, administrative and financial performance. 12

15 Both at home and at work, individuals are increasingly solicited and receive a large amount of information. Capturing the recipient s attention means more than ever being able to combine traditional and new ways of interacting and offering the right content via the right medium. LANDMARKS 2011 TRENDS AT THE HEART OF COMMUNICATIONS STRATEGIES Transactional and relational exchanges: companies are communicating more and more with their clients and partners. Their targets receive more and more information and messages via a larger number of channels. In this context, how can you ensure that communications are effective? This is above all what is shown by the best response rate, which allows the company to trigger the desired action, such as payment of an invoice on reception, signing up for a service, following up on a promotional offer, requesting additional information or returning response coupons. In order to obtain these results, the various media - namely , text message, printed documents and websites - need to be complementary rather than in opposition. Of these, mail - which is known for its reliability, ease of use and the confidence it creates - maintains a place of its own in the ways chosen by individuals to receive information. From the viewpoint of companies, thanks to its capacity for targeting, mail is particularly effective and generates high reading and recall ratings. It is therefore a favoured marketing medium for customised promotions and loyalty campaigns. As a means of conveying image, mail remains a key part of the multi-channel system used by companies and organisations to strengthen relations with clients and develop their activities. MAILING SYSTEMS AND AUTOMATED MAIL PREPARATION: EFFECTIVENESS AND OPTIMISATION OF COSTS In view of the challenges relating to the postal medium, optimising its management is a major concern for companies. The first advantage of using a mailing system is the time saved by automating the tedious processes of weighing items and sticking on stamps, and avoiding the need to go to the post office. It also allows for savings to be achieved thanks to franking calculated to the closest cent and in accordance with the right pricing tariffs (the system s memory is updated each time postal tariffs are changed). Besides, an increasing number of postal organisations offer discounts for metered mail. The latest-generation mailing systems are true intelligent postage terminals. Connectivity - which allows for communication between the user and the postal operator, or even the installation of a network of machines - and the various software tools, mean that mailing systems can be used to control and manage mailing costs. Systems connection capabilities have also allowed for the development of online services to facilitate everyday use. The different models equipped with software and numerous accessories, such as a weighing platform, provide a response to the needs of all companies, large and small. From the everyday processing of a dozen or so standard items to the franking of several thousand envelopes of varying formats and content - such as accompanying letters, product documentation and return envelopes - mailing systems allow for greater efficiency and optimisation of mailing costs. 60 %, the percentage of US consumers who said they enjoy checking the mailbox for postal mail* * Source: Consumer Channel Preference Study - Epsilon Targeting December

16 INTERNATIONAL PRESENCE With 75% of sales generated outside France, Neopost already has a very strong international presence. North America - the world s largest market - accounts for 40% of its business and the Group is continuing to see strong growth in this region. Neopost is also expanding by means of extending its geographical coverage in other parts of the world. EXPANDING NEOPOST S PRESENCE Acquiring distributors is a long-standing means of pursuing the Group s strategy. By strengthening its local position in markets of appropriate size and rates of growth, Neopost increases its sales, optimises its distribution, becomes closer to its clients and achieves greater control of its installed base. This also gives it more control of the roll-out of its marketing strategy, such as the development of services or cross-selling between its various businesses. In 2011, the acquisition of GBC-Fordigraph was added to the long list of takeovers of distributors by Neopost over the last few years. Opportunities still exist in North America and Europe. This is also the case for the Asia-Pacific region, where the Group has considerable ambitions following the integration of GBC-Fordigraph and the creation of a regional office in Singapore. Neopost currently has a direct presence in 18 countries. However, its products and services are sold in a total of 90 countries, through indirect distribution networks that are better suited to the structure or maturity of the markets concerned. ➌ ➊ ➋ COMMERCIAL ORGANISATION Direct distribution Direct and indirect distribution Indirect distribution INDUSTRIALS AND RESEARCH AND DEVELOPMENT SITES UNITED STATES ➊ Memphis: logistics platform ➋ Milford: R&D ➌ Seattle: Satori Software FRANCE ➍ Bagneux: R&D ➎ Cavaillon: Logistics systems ➏ Le Lude: Production of high-end mailing systems and logistics platform UNITED KINGDOM ➐ Loughton: R&D; Production of high-end folders/inserters THE NETHERLANDS ➑ Drachten: R&D; Production of mid-end folders/inserters MALAYSIA ➒ Penang: Subcontracting of mid-end mailing systems production 14

17 LANDMARKS 2011 WORLDWIDE CREATION OF A REGIONAL OFFICE IN THE ASIA-PACIFIC REGION ❼ ❽ ❻ ❺ ❹ ❾ ❿ Neopost has a direct presence in Japan and now Australia. In the majority of south-east Asian countries - such as Thailand, Malaysia and Indonesia - we rely on a panel of distributors. In the specific case of India, we have set up an office of representation to manage our relationship with the Indian Post and to coordinate the activities of our dealers network. Singapore proved to be the best location for Neopost s regional office. The country is one of the most buoyant markets in Asia and offers an extremely dynamic environment, with many international companies having set up their regional head offices there. With its central location, Singapore is well positioned for commercial expansion throughout the Asia-Pacific region. CHINA ➓ Jiangmen and Shenzhen : Subcontracting of low-end mailing systems and folders/inserters production VIETNAM Hanoi: Subcontracting of R&D Gilles Nauche Managing Director Neopost Asia-Pacific 15

18 AROUND THE WORLD IN 2011 Applying a postmark with a franking machine effectively means printing money. As a result, the industry is highly regulated by accreditation, ownership rules and postal tariff structures, which are national in nature. This means that each country is a quite specific market. HIGHLY SPECIFIC LOCAL CHARACTERISTICS ACCREDITATION A franking machine can only be used subject to certification, accreditation of the supplier and approval of the ink used, by each country s postal authority. OWNERSHIP In some markets, Neopost remains the owner of franking machines installed at the premises of its customers, who must therefore rent the machines. This is the case in France. In North America, the obligation to rent equipment is limited to the meter, the part that tallies the franked amounts. In other markets, such as Germany and the United Kingdom, the user may own the entire machine. PAYMENT In most countries, the user s system must be credited to be able to frank mail. In France, postal charges are billed by La Poste on the basis of information recorded and transmitted by the franking machine every month. FRANKING The amount is calculated on the basis of the postage rates in effect in each country, based on the weight of the item. In the United States and the United Kingdom, in particular, the amount also depends on its shape and size. 16

19 LANDMARKS 2011 WORLDWIDE COUNTRY NEWS AUSTRALIA In June 2011, Neopost acquired GBC-Fordigraph, Australian market leader in the distribution of mail processing and document finishing solutions, with a solid reputation for quality, reliability and service. As the exclusive distributor of Neopost solutions, GBC won a call for tenders end of 2010 to supply around 100 DS-75 machines for the New South Wales Parliament. The successful integration of GBC- Fordigraph in 2011 has enabled Neopost to establish itself as No. 1 in the Australian market. Since March 2009, users of Australia Post s services have been able to send large letters and packages to other countries in just one click using the Click and Send online delivery solution of Neopost ID. In 2011, this service was extended to domestic mail. FRANCE Neopost has committed itself to a new sales and marketing drive combining its two distribution subsidiaries - Neopost France and Satas - in a single company operating under the Neopost name and allowing it to optimise its coverage of France. Activities relating to production mail solutions have been combined within a dedicated business unit that accompanies its clients in the roll-out and monitoring of their document management and addressing equipment. In 2011, Neopost won Chronopost s tender offer for complete management of its new mobile delivery tracking solution. GERMANY In 2011, Neopost completed the updating of its range of mailing systems with the launch of the IS-280, targeting low-volume mail senders, and the launch of a specific distribution channel for this market segment. Major contracts to supply high-end mailing and document management systems have been won with large clients. The development and technical support activities of Rena, a specialist in address printers - which was acquired in have been transferred to the research centre in Bagneux, France. INDIA Neopost recently set up a representative office in this modestly-sized market for the mailing systems industry that is nevertheless committed to the process of decertifying non-digital equipments. At the end of 2011, around 2,000 digital mailing systems had been installed since certification was obtained for Neopost machines and marketing began in summer RUSSIA Neopost obtained certification for its equipment in December The first call for tenders was won in the area of high-end mailing systems in early SCANDINAVIA Despite being among the European economies with the most advanced use of technologies, the Scandinavian countries nevertheless present attractive potential relating to the very strong financial incentives given to mail senders to use mailing systems, thereby encouraging the automation of processing by postal operators. Neopost has been able to capitalise on this and delivered a further strong performance in the region in SINGAPORE Neopost has set up its new regional office in Singapore covering operations in the Asia-Pacific region in order to achieve the Group s expansion aims in the region. Singapore Post has selected the new Neopost ID solution to develop the service that will allow all of its customers to prepare their parcels and registered mail items using their Internet browser. UNITED KINGDOM In 2011, Neopost capitalised on its new range of IS mailing systems, the roll-out of which was completed in late 2010, with the launch of the IS-280 entry-level model and the development of a dedicated distribution channel suited for this market segment. The United Kingdom was the first country for the expansion of Satori Software s activities outside the United States in the area of address quality management. UNITED STATES The roll-out of the IS range was completed in late 2011 with the launch of the latest model intended for low volumes, the IS-280, and the creation of a specific distribution channel. In folders/inserters, Neopost has successfully launched the DS-200, a high-end model. In 2011, the Group has won a significant number of calls for tender offers among large customers in both mailing systems and high-end document systems. The Research & Development centre specialising in package shipping has been transferred from Austin, Texas to Milford, Connecticut in order to bring together marketing and technical support teams, thereby creating an organisation able to seize new market opportunities relating to the development of e-commerce. 17

20 INTELLIGENT SYSTEM LATEST GENERATION MAILING SYSTEMS In 2011, the new range of IS mailing systems was fully rolled out in the major countries for Neopost: Canada, France, Germany, the United Kingdom and the United States. CONTINUING ROLL-OUT OF THE IS RANGE The first new generation models correspond to the middle of the range (from IS-350 to IS-480) and were launched between 2008 and The launch of the IS the new model marking Neopost s return to the entry-level segment - began at the end of 2010 and continued in In the high-end segment, the IS-5000 and IS-6000 models - already introduced in 2010 in the United States and then in Germany - were launched in Canada, France and the United Kingdom. In other countries, the roll-out of the IS range started with the launch of mid-range models in As regards the low-end segment, initial launches of the IS-280 took place in In 2012, Neopost will continue with the roll-out of the IS-280, IS-5000 and IS-6000 machines. We have created a specific organisation for the marketing of entry-level models. We are conducting marketing campaigns via the Internet or by telephone. We rely on particularly responsive remote sales teams that are equipped with appropriate IT tools. This allows us to reach users who can decide to buy the equipment very quickly. Elie du Pré de Saint Maur Remote Channels Director Europe Neopost IS 280 EFFICIENT AND EASY TO USE OFFICE EQUIPMENT - Modern and compact - Easy to use - 20 items per minute - Integrated weighing platform - LAN connection With the IS-280, Neopost offers a range of services such as downloading postal information and tariffs, ink level alerts and even remote diagnosis for low volumes users. 18

21 LANDMARKS 2011 HIGH-TECH The IS-6000 was designed with the user in mind, as demonstrated in particular by the colour touch screen that can tilt backwards and forwards and swivel left and right, an intuitive interface and the improved ergonomics of the work-station. The touch screen is close to the feeder, so requiring fewer operator movements and making loading and unloading operations more fluid. It is on the basis of these attributes that the IF Design jury awarded the IS-6000 a Product Design Award in the Office & Business category in October Yann Le Rigoleur Group Design Coordinator Neopost Technologies S.A. IS 6000 THE SYSTEM OF CHOICE FOR LARGE VOLUMES - Dynamic scale allowing for mail of various sizes, weight and dimensions to be processed at a rate of 10,800 envelopes an hour - Easy-to-use 15-inch touch screen - Comfortable working environment The IS-6000 is 20% more productive than other similar capacity mailing systems on the market. 19

22 DS RENEWAL OF THE RANGE OF DOCUMENT SYSTEMS The new DS-35 increases Neopost s competitiveness in the entry-level segment, while the launch of the DS-200, suited to the needs of clients who previously had to use production machines, gives us the means to win new clients. Franck Sillard Head of Group Strategic Marketing Document management systems Neopost In 2011, Neopost further extended its range of document systems with the successful launch of the DS-35 entry-level model and the DS-200 high volume folder/inserter. NEW LAUNCHES IN THE DS RANGE The new generation of DS machines and associated software meet the needs of all clients, from users of small office machines to production centres, as well as mail rooms. Neopost s flexible, modular and evolving document systems provide a tailored response, whether for putting a few items into envelopes, processing large volumes of ordinary mail or even complicated correspondence campaigns with selective insertion of various contents. DS 35 THE SMALL FORMAT, BIG PERFORMANCE FOLDER/INSERTER - Flexibility, speed and ease of use - Silent and compact design - Highly intuitive colour touch screen able to configure up to 15 saveable programmes 20 The ability to connect the DS-35 to a mid-range mailing system puts uninterrupted mail processing within the reach of low-volume users, allowing for faster preparation of ready-to-post items.

23 LANDMARKS 2011 HIGH-TECH AUTOMATION OF THE PROCESSING CHAIN: NEOPOST S MAIL ROOM SOLUTIONS From design to mailing, automated document processing presents new prospects for companies and allows them to make the most of Neopost s document and mailing systems. The most sophisticated configurations allow for the folder/inserter to be connected to a printer and for documents to be retrieved automatically. If the documents have been created using desktop publishing software such as Neopost s PrintMachine, they are customised by attaching OMR codes or barcodes. The document system, which has a reader and offers optical mark recognition, selects and groups together the documents to be inserted. Interfaces also allow for the folder/inserter to be connected to a mailing system that receives envelopes of various formats and weights, weighs them and applies the postmark and, if applicable, the corresponding additional postal specifications. DS 200 THE HIGHLY VERSATILE DOCUMENT SYSTEM - Simplicity, modularity and flexibility - Bespoke configuration, up to 11 high capacity feeders able to accept all types of document (catalogues, CDs, brochures etc.) - All envelope formats up to C4 - Unlimited number of programmes - Intuitive colour touch screen - Speed and flexibility The DS-200 is connected to Neopost s technological platform via a LAN connection, which allows for remote diagnosis of how it is operating and technical assistance via OLS (Online Services). These comprehensive configurations are particularly well suited for sending items in large numbers and allow for the automation of the entire mail preparation chain, thus increasing productivity and reliability. 21

24 DEVELOPMENT Neopost allocates 4 to 4.5% of its revenues each year to research and development. More than 300 engineers with different areas of expertise and backgrounds use the very latest technology to continue to improve the quality and performance of the Group s products. They are able to anticipate the new needs of clients and work on future generations of systems, software, infrastructures and networks relating to the management of documents, mail, data and logistics flows. Innovation drives the market. Technological advances are being made at a very swift rate. While our development teams are working on the international roll-out of the IS range - our latest range - we are already in the process of preparing the future generation of mailing systems. THE ROLL-OUT OF A NEW RANGE OF MAILING SYSTEMS For development teams, bringing to the market a new generation of mailing systems marks the start of a process of adapting each model and its embedded software to the requirements of each country: calculating franking, pre-funding the postage account before use or billing for consumption at the end of the period, specific inks, telecommunication infrastructures and specific data management protocols for each postal organisation. The mailing system is connected to the postal organisation s computerised management system and provides access to postal services. It effectively prints money and records franking costs. For all of these reasons, mailing systems must be certified by the post offices technical departments, which test for compliance with applicable standards in the country and check the accuracy of weighing items and therefore the franking calculation. These development and approval stages, which are a prerequisite for launching each model in each country, can take from a few weeks to six months. Consequently, the international roll-out process takes a number of years. Neopost gives priority to launches in the countries with the largest postal markets (Canada, France, Germany, United Kingdom, United States). Philippe Boulanger Head of R&D and Sustainable Development Neopost 22

25 LANDMARKS 2011 HIGH-TECH Neopost is working with postal operators around the world and developing practical and innovative solutions to help them to control and monitor their mail processing operations. Jean-François Badet Head of Postal Solutions Neopost TECHNOLOGY AT THE HEART OF NEOPOST S SOLUTIONS Connectivity has made mailing and document management systems intelligent; nowadays, multiple connection capabilities are opening up still more new possibilities. In addition, mobile IT and information capture technologies enable Neopost to offer unique traceability solutions to carriers, postal organisations and many industrial companies. Neopost s R&D teams have knowledge of a wide range of technologies and many areas of expertise : - Information capture via bar codes, RFID, voice servers and EDI - Analogue, LAN or GPRS connectivity - Electronics - Infrastructure and network software - Embedded software - Paper handling - Precision mechanics - Mail security and cryptology - Printing technology - Traceability. EC-500 WINS 2011 WORLD MAIL AWARD The EC-500 is a solution for the control and validation of trays of mail in postal sorting centres. It was initially developed to meet the needs of French operator La Poste, which was looking for a simple solution allowing it to check that the volume of the contents of incoming mixed mail trays corresponded to the amount stated on the declaration form. In order to avoid the need to remove envelopes from trays, a solution based on laser technology was devised. The tray is conveyed forward and back on a short belt under a laser eye in order to arrive at a correct count of envelopes. 23

26 DATA QUALITY Neopost s offering has been enhanced by the inclusion of address quality management. This allows it to target new clients and develop additionnal services provided to existing clients. Neopost made its first steps into the market with the acquisition in 2009 of US company Satori Software, one of the market leaders in postal address management tools. In 2011, the proportion of Satori Software s business generated via Neopost s distribution network in the United States has strongly increased. A number of initiatives have been implemented to support the expansion and international roll-out of this buoyant new business line, including its launch in the United Kingdom commencing in 2010, an extension of the range of services and the signing of strategic partnership agreements. EXPERT IN ADDRESS QUALITY MANAGEMENT Satori Software develops software solutions for organisations that collect, maintain and exploit databases of contacts. The software corrects addresses by ensuring that they comply with standards and post office requirements for the country and eliminates duplicates. The data can then be sorted by post code or filtered according to various criteria. Address quality management software provides senders of letters and parcels with reliable databases. In addition to reducing the number of returned or undeliverable items, it offers the advantage of fast and economical mail delivery. FIRST STREET OR 1 ST ST? If data is not checked on entry and cross-referenced with existing information, a database saves two different contacts if the name of the street has been spelt in two different ways or if the same person alternates between his full first name and an abbreviation. ROBERT OR BOB? We are seeing robust growth in demand for our address quality management solutions. Neopost is reaping the rewards of a development process focused resolutely on the client and their needs. Carl Amacker, U.S. Marketing Neopost Inc. 24

27 LANDMARKS 2011 GOOD ADDRESSES We verify all addresses that enter our system. About 80% of time, adjustment is necessary to ensure consistency in data format and improve the database quality. This is the only way to enable the matching of information. Satori Software s solution definitely saves Sub-Zero time and money. For companies sending out full-colour catalogues that are undeliverable, the costs add up, perhaps $1 per print, in addition to another $1.50 in bulk mail postage and return fees. Jason Van Pee Database Administrator Sub-Zero Inc. ENTERING THE WORLD OF DATA QUALITY In 2011, Satori Software launched a new range of software that checks and updates information when it is entered into the user s databases, into its website or while it is processed. The scope of data covered goes beyond postal information, to which various information fields can be attached containing addresses, telephone numbers and other criteria. With this range of software, users have a high quality tool for managing all of their contact information. PROMISING PARTNERSHIPS With Uniserv, for providing address validation solutions for clients outside the United States and the United Kingdom SATORI SOFTWARE HELPS SUB-ZERO TO STRENGTHEN ITS CUSTOMER RELATIONS Sub-Zero, Inc., a market leader in high-end refrigerators and freezers, opted to use Satori Software s solutions in The company handles on average 2,000 client contacts a day. Product information requests or warranty registrations are sent by customers via a variety of channels, including , telephone, post and web forms. Sub-Zero needed a unique criterion to enable it to identify new contacts and differentiate them from already known contacts by matching them with existing accounts. Telephone numbers can no longer play this role due to the rise of cell phones for each individual member of the same family. accounts have the same issue. The most effective method still is the postal address, provided that their quality and integrity can be guaranteed. The partnership between Neopost and Uniserv established in early 2012 will speed up the international roll-out of Neopost s address quality management solutions. Following the launch of Satori Software solutions in the United Kingdom, Neopost is now able to offer an address correction service for clients in other European countries. This service has been integrated into PrintMachine, Neopost s desktop publishing flow management software, which constitutes a concrete illustration of product synergies and the potential for a large-scale roll-out of Satori Software s data quality expertise. With SAP AG for the distribution of BusinessObjects Postalsoft software in the United States Under the agreement signed in December 2011, Satori Software has become SAP s main partner in the United States for address and data quality management. Satori Software will now distribute SAP s BusinessObjects Postalsoft software in addition to its own software, and will gradually enable SAP s clients to benefit from new solutions depending on how needs develop in terms of address and data quality. 25

28 MAKING EVEN MORE OF A DIFFERENCE Neopost s innovative equipment ranges are at the heart of its success. With a broad spectrum of services and associated software, these ranges constitute comprehensive and competitive solutions that help clients to optimise, manage and control their postal flows. 26

29 LANDMARKS 2011 AT YOUR SERVICE EASY-TO-USE ONLINE SERVICES In addition to consulting, telephone assistance and the provision of supplies, Neopost s range of services has been considerably enhanced by the ability to connect systems. Services delivered online include updating of postage rates, ink level alerts, remote diagnosis and maintenance, as well as downloading of new versions of the software. INTEGRATED SOFTWARE Software solutions extend the features of equipment and transform them into real integrated mail organisation and franking cost control systems. For example, management software allows for monitoring of the activity of a fleet of multi-site systems and all of the company s postal costs. DESKTOP PUBLISHING TO FACILITATE MAIL PREPARATION Use of desktop publishing software facilitates the automation of mail preparation by the sender and then its processing by the post office. It helps to reduce postal costs while bringing the quality of documents and mailings up to the best professional standards. Neopost s PrintMachine solution is a software application that retrieves raw data from the user s IT system (integrated management software, client database etc.) in order to create and format customised and composite documents, including images, graphics and even page backgrounds. The software creates and applies bar codes or OMR codes to the document according to different grouping or associated document criteria, or even security criteria, and then programmes the document for printing. At the time of enveloping, the codes read by the folder/inserter allow for content selection and ensure integrity. FINANCIAL SERVICES TO HELP WITH CLIENT MANAGEMENT In order to provide a continually higher standard of service for its clients, Neopost develops financing solutions that allow for costs to be spread out and to replace equipment at the end of the contract. This is offered in all the countries where Neopost has direct representation. This service has just been launched in Australia following the acquisition of GBC-Fordigraph. In countries where franking needs to be prepaid, in particular the United States, Neopost provides its clients with a new service aiming to finance postage payment payable to the postal operator in advance. UPDATING OF POSTAL TARIFFS If tariffs are changed by a country s postal organisation, the mailing system needs to be updated. Neopost offers its clients the option of an annual contract which covers the cost of purchasing an update each time the postal service implements a price increase, regardless of how many times it decides to change its tariffs. TAILORED SERVICES Large and national account sales staff are organised by sector, such as banks, insurance and local authorities. Thanks to their knowledge of their clients industry, they are able to help them to identify ways of optimising their mailing activities, implement Neopost solutions and integrate them into their own systems. 27

30 CLIENT TESTIMONIALS Neopost US helps Affinity Plus Federal Credit Union to improve its customer relations and make cost savings For years, the processing of 50,000 to 60,000 Affinity Plus documents a month - such as account statements, tax notices and daily letters - was outsourced. In order to speed up distribution, reduce operating expenses and provide a better guarantee of confidentiality, the company made the decision to process these documents in-house. Loffler Companies, the service provider appointed by Affinity Plus, quickly recommended the DS-1200 as the central component of its solution. With the support of Loffler and Neopost, the team at Affinity Plus rapidly became experts in using the DS We can make changes on the fly and respond to regulatory changes more quickly. Now we can easily add and send communications to our members as needed. We have simply gained more control and flexibility, and that has helped us increase member satisfaction. Keith Malbrue COO Affinity Plus Since bringing the process in-house, the number of calls we receive from our 140,000 members about their statements is a fraction of what it was, simply because they are receiving them so much quicker. In addition, the in-house process has helped us save more than $750,000 a year. Cary Tonne VP of IT Affinity Plus 28

31 LANDMARKS 2011 AT YOUR SERVICE ROYAL MAIL IMPROVES SERVICE TO SME SECTOR THANKS TO THE DESPATCH MANAGER ONLINE SOLUTION OF NEOPOST NEOPOST IS SUPPLIER OF CHOICE FOR DOCUMENT PREPARATION AT REGENT We particularly liked the flexibility of PrintMachine and the ability of Neopost s technicians to implement a solution specifically designed to meet our requirements. I would definitely recommend Neopost as a supplier. Rob Seaward Head of IT Regent We now use PrintMachine software to print all our customer invoices, delivery notes and statements, using our specified layout. The DS-70 then collates the documents for each recipient into envelopes. We have been able to significantly improve the look of our financial documentation; process customer documents faster and in a more efficient manner. We have also been able to answer our customers queries far more quickly. Overall, our investment has rapidly proved exceptionally cost effective. Karen England Company Secretary Regent The delivery of goods ordered online represents a tremendous growth opportunity for us. Not only does Royal Mail Tracked deliver 98 per cent of parcels within two days, it also enables consumers to check the progress of their order online. This helps reduce the number of failed deliveries, improving shopper satisfaction and reducing customer service costs for the retailer. Gary Winter Head of Goods Fulfilment Royal Mail United Kingdom IMPROVEMENT IN PRODUCTIVITY AND SAVINGS FOR JLS MAILING SERVICES THANKS TO THE IS-6000 We ve been using our two IS-6000 systems for more than a year now and I can say that it is the best system I have seen in the marketplace. The IS-6000 has delivered reliable production and maximum uptime. In addition to the systems ruggedness, we like its design and advanced features like Neopost s new internet-connected imeter postage meter that incorporates powerful apps like the MAS App, the software for management of postage costs. The IS-6000 s capabilities have helped us save tens of thousands of dollars annually. This new system, combined with Neopost s service commitment, has worked out great for JLS and has helped us fulfill our promises to customers better than ever. Jim Clark President JLS Mailing Services 29

32 TRACKING PARCELS AND GOODS S OLUTIONS SHIPPING, TRACKING AND TRACEABILITY Neopost ID s in-depth knowledge of the logistics sector and its expertise in data capture technologies has enabled it to develop a broad range of products and services. Traceability solutions are targeted at the various parties involved in the logistics chain, from carriers, logistics operators and postal organisations to companies using logistics processes, such as industrial groups, distributors, and companies sending and receiving goods. Traceability is a key component of the processing of parcels, registered letters and various goods, such as items of value and spare parts. Neopost ID s solutions incorporate various data capture technologies - such as web, bar codes, RFID, EDI and voice - as well as processing and reporting information. This activity benefits from growth opportunities relating to the expansion of the parcel market, driven by the rise of e-commerce and international trade, as well as technological developments allowing solutions to be provided to Neopost s SME clients via an internet platform. 30

33 LANDMARKS 2011 TRAVEL NEOPOST ID S ACTIVITIES SHIPPING - Online shipping solutions and shipping stations for post offices and carriers - Multi-carrier online shipping solutions and shipping stations for companies sending parcels TRACING - Real-time mobile traceability solutions to facilitate parcel collection and delivery, inventory management and tracking of goods MANAGEMENT - Solutions for providing information and managing traceability databases for all parties involved in the shipping chain PROOF - Proof of delivery of the parcel to the recipient provided online SINGAPORE POST OPTS FOR THE NEW CYBERSTATION OSS Following Click & Send for Australia Post in 2009 and Despatch Manager Online for Royal Mail in the United Kingdom in 2010, Neopost ID is continuing to develop its online delivery management platform for international post offices. Singapore Post has selected the new Cyber Station OSS solution, a multi-carrier online platform for preparing and labelling transport orders, to create its ezy2ship service, which will allow all of its customers to prepare their registered mail items using the new solution from their internet browser. This software-as-a-service is operated and leased on a transactional basis, which presents an advantage for Neopost clients, who do not need to invest in order to benefit from the application. WITH NEOPOST ID, CHRONOPOST FOCUSES ON ITS CORE BUSINESS 5,000 Mobile terminals rolled out Chronopost, Europe s second-largest operator in the parcel and express delivery market, has been using Neopost ID s delivery and collection traceability solutions for years. The solution is embedded in mobile handsets and allows for confirmation of delivery and collection of the recipient s digital signature. In 2011, Chronopost assigned complete management of its new mobile delivery traceability solution to Neopost ID, including hardware, software and services. Neopost has rolled out more than 5,000 Honeywell Dolphin 9900 mobile terminals equipped with an application based on its Collect n Deliver product, which is able to read bar codes on parcels when loading vehicles and provides access to all information concerning deliveries. Thanks to its expertise in telecommunications and the infrastructure set up by Neopost ID, the information collected is sent in real time to Chronopost s IT system and made available to its clients on its website. A COMPREHENSIVE RANGE OF LOGISTIC FLOWS TRACEABILITY SOLUTIONS FOR DHL In 2008, Neopost ID launched France s largest RFID roll-out in partnership with DHL Exel Supply Chain and Metro Group. A total of 1.5 million RFID tagged pallets are traced each year using portals installed at DHL s six logistics platforms (at the time of loading and on shipping) and at the 90 Metro Cash & Carry self-service sales outlets (on delivery). The service provided by Neopost ID includes the portals, the remote equipment supervision tool, the flow monitoring IT system, maintenance, deployment services and user training. In 2011, Neopost ID went even further and installed five truck portals able to scan all of the pallets contained in a vehicle without the need for human intervention. 31

34 RESPONSIBILITIES AND COMMITMENTS Neopost s profitable growth is set to continue for the long term as it is based on strong and lasting values of recognition, innovation, entrepreneurial spirit and environmental responsibility, which are held dear by the Group driven by its culture of challenger. These values guide Neopost s concrete commitments towards its clients and partners, as well as towards the environment and the communities in which its teams live and work. Employee involvement is a key aspect of Neopost s responsible approach. In order to share its values with each of its employees, Neopost has put together an ethical code of conduct published in eight languages in The white paper A sustainable approach for sustainable development attests to Neopost s approach and its concrete achievements. This paper, published in 2012 after several years of commitment to this approach, illustrates the Group s principle of communicating by means of best practices and by example. A CROSS-FUNCTIONAL STRUCTURE FOR SUSTAINABLE DEVELOPMENT Sustainable Development is overseen by a Director who reports directly to the Chairman and CEO of Neopost. This structure is based on two specialist committees, one relating to the Group s development and production activities, and the other relating to its distribution activities. These committees meet on a very regular basis and are made up of Sustainable Development correspondents from each of the Group s subsidiaries. THE KEY STAGES OF NEOPOST S APPROACH 2004 Start of ISO certification (validation of environmental management system) for all sites: R&D centres, production plants and network of distribution subsidiaries. All sites will be certified in Publication of the Neopost guide to product ecodesign Start of OHSAS certification (validation of health and safety in the workplace management system). This will apply to all sites in Integration of Human Resources and Investor Relations in Neopost approach Audit of the Group s CSR practices 2010 Publication of the new version of the Group s charter of values, extended to all social, ethical, human resources and environmental aspects Publication of the Neopost white paper: «A sustainable approach for sustainable development». 32

35 LANDMARKS 2011 SPECIAL FEATURE We did not communicate about the ecodesign project until we had achieved our first results. Our external communication comprises scientific publication and conference speeches. This has facilitated specific in-house communication exercises to be undertaken, intended for example, for the sales reps, who now convey the right message to Neopost s customers. Guillaume Moenne-Loccoz Sustainable Development Manager Neopost Group COMMITMENT TO THE ENVIRONMENT: THE ECODESIGN APPROACH The ecodesign approach consists of taking account of the impact of a product over the whole of its life cycle in relation to various environmental aspects. Neopost s ecodesign guide sets out the priorities, including use of materials and number of components, the relationship between the products mass and packaging volumes, noise levels, energy consumption, and end-of-life recyclability and dismantling. Applied to the development of the latest generation of IS mailing systems, the ecodesign approach has allowed for a much lower environmental impact relative to the previous range. The IS-480 model launched in 2008 was the first concrete achievement. The approach was then extended to other models, as well as the range of document management machines. The performance of IS machines has been improved considerably compared with the previous generation of mailing systems, with a 10% reduction in the number of different materials used in production and a 40% reduction in mass, as well as a reduction in packaging volumes. During the utilisation phase, energy consumption is reduced by 50%, thanks primarily to the standby mode, and carbon dioxide emissions are reduced by around 4kg per year per machine. Maintenance is also made easier by the choices made during the design phase. Lastly, the recyclability rate of components has been improved significantly to 74%. The entire IS range meets the requirements of the American Energy Star seal of approval. In addition to the product itself, the approach also applies to design processes, manufacturing and even transport. For example, the choice of sea transport for the transport of machines from factories, rather than by air, has had a powerful impact on the amount of carbon dioxide that is emitted. Neopost also launches initiatives relating to use of the product, such as collecting and recycling used ink cartridges or the remanufacturing of machines at the end of the contract period. 33

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37 LANDMARKS 2011 SPECIAL FEATURE COMMITMENT TO THE COMMUNITY: LOCAL INITIATIVES Neopost s actions within the communities in which it operates are based on local initiatives spearheaded by its subsidiaries intended to support charitable associations and organisations providing social assistance. In the United Kingdom, employees vote each year for the charity that will receive funds collected through the events they organise. In 2011, Diabetes UK was selected. The subsidiary also helps employees wanting to invest their own time and effort by offering volunteering within a charitable association two days a year. This allowed for ad hoc help to be provided for a variety of charities in 2011, such as the St Francis Hospice and a wildlife protection fund. In France, since 2007, Neopost has paid 5 to SOS Villages d Enfants for each mailing system rental contract signed. This organisation allows brothers and sisters who are unable to live with their parents to grow up together within village communities. In 2011, the subsidiary helped to finance the renovation of the Marly SOS Village in the North of France. In the United States, the Bikes for Tykes scheme is one of the initiatives that has been running for several years. Employees of Neopost USA organise collections to buy bicycles for an association that helps families in Connecticut. A total of 1,000 bicycles have been donated in this way in the last 10 years. COMMITMENT TO PARTNERS, MAKING PROGRESS TOGETHER COMMITMENT TO EMPLOYEES Neopost devotes a significant budget to training, amounting to about 3% of the total payroll. The major objectives of this training are to develop innovation, entrepreneurial spirit and management skills Surveys of all our employees are carried out regularly, providing the opportunity to make suggestions concerning the working environment in particular. The Group favours diversity and cultural pluralism, particularly through multi-site projects that bring together employees with varied skills and experience. Neopost also encourages staff transfers between companies within the Group, both locally and abroad. The Group uses its internal newsletter NNN, Neopost Network News, together with its Intranet system, to bind its geographically widely dispersed employees together. Neopost aims to provide all employees with an interest in the company s earnings, in particular through a variable portion of their compensation, profit-sharing agreements, as well as stock option and bonus share programmes. Neopost sponsors a number of initiatives at Group level and at each subsidiary with the aim of fostering entrepreneurial spirit and promoting employees ideas. A dedicated section in the NNN quarterly newsletter provides internal information about the best ideas and achievements. Innovation is also central to the training programme in partnership with French business school HEC, where some 40 senior executives are trained each year. Neopost operates on good terms with postal organisations, distributors, suppliers and all its other business partners. The Group s main suppliers and subcontractors have ISO certification and are committed to complying with International Labour Organization conventions, United Nations resolutions and local legislation on environmental protection and working conditions. The Group s Purchasing department ensures that suppliers and subcontracting partners are carefully monitored. We have created a suggestion box to collect ideas and innovative solutions from all over the country. Around half of the suggestions made since it was created come from branches, Customer Excellence Districts, training, the Dallas call centre and the Memphis distribution centre. Dan Lynch Research and Development Neopost USA 35

38 Neopost s BOARD of Directors A BOARD COMPRISING A MAJORITY OF INDEPENDENT DIRECTORS Neopost is led by a Board of Directors consisting of 10 members. The directors have recognised expertise and come from diverse backgrounds. They have worked within major companies in areas that have similarities with Neopost s business. In matters of corporate governance, Neopost refers to the Corporate Governance Code for listed companies published by AFEP and MEDEF in December 2008 as its reference point. Seven directors are independent, as defined in the Viénot and Bouton reports. 36

39 LANDMARKS 2011 MEETING COMPOSITION OF THE BOARD OF DIRECTORS as of 26 March 2012 Denis Thiery Chairman of the Board since January Chief Executive Officer of Neopost since June He joined the Group in 1998 as CFO after being CEO of Moorings and holding various positions with Wang France and PricewaterhouseCoopers. Henk Bodt A Board member since June He was previously Vice- Chairman of Philips and then Chairman of Océ. Jacques Clay* A Board member of Neopost since January He spent the majority of his career with Hewlett Packard, in Europe and the United States, in charge of the PC division. Éric Courteille* Was co-opted by the Board of Directors on 26 March The appointment of Eric Courteille as director will be subject to ratification by the shareholders at the annual general meeting of 4 July Eric Courteille is Chief Financial Officer and General Secretary of Redcats. Cornelius Geber* A Board member of Neopost since July He acted as a consultant to senior management of the German Post Office and was Chairman of the Board of Kuehne + Nagel. Éric Licoys* A Board member since July He was previously Chairman of Fonds Partenaires Gestion, then Chief Executive Officer of Vivendi Universal. Vincent Mercier* A Board member since July He is Vice-Chairman of the Supervisory Board of Roland Berger Strategy Consultants after having run the French and Chinese operations. Catherine Pourre* A Board member since July She is Executive Director Central Functions and member of the Management Board of Unibail-Rodamco, having been a partner at PricewaterhouseCoopers for 10 years. Agnès Touraine* A Board member since July She manages Act III Consultants, a management consulting company dedicated to growth strategies. During her career, she notably was in charge of Vivendi Universal Publishing. Jean-Paul Villot Chairman of the Board from 1996 to January Chief Executive Officer of Neopost from 1996 to He joined Neopost in September 1995 having held management positions at Bull, Schlumberger and Océ in France and abroad. * Independent director. MISSIONS The Board of Directors approves the strategic orientation and large projects of the Group, whether related to internal or external developments. The Board met seven times during the 2011 financial year and had an attendance rate of 95%. The Board of Directors is supported in its work by three dedicated committees. These committees both met twice each and had an attendance rate of 100%. APPOINTMENTS COMMITTEE: Eric Licoys (Chairman), Cornelius Geber and Jean-Paul Villot. COMPENSATION COMMITTEE: Eric Licoys (Chairman) and Jean-Paul Villot. AUDIT COMMITTEE : Henk Bodt (Chairman), Jacques Clay and Catherine Pourre. 37

40 NEOPOST ON THE STOCK MARKET Neopost provides its shareholders with transparent, regular and reliable information. Neopost regularly communicates with its shareholders with whom it maintains an ongoing dialogue. A total of 280 meetings were held in Since the IPO of Neopost on 23 February 1999, the share price has seen a three-fold increase. The Group s market capitalisation amounts to about 1.5 billion. DATA SHEET Listing market: Euronext Paris ISIN code: FR Reuters code: NPOS.PA Bloomberg code: NEO FP Number of outstanding shares: 33,452,042 at 31 January PUBLICATIONS CALENDAR THURSDAY 1 MARCH 2012 FOURTH-QUARTER 2011 SALES TUESDAY 27 MARCH FULL-YEAR RESULTS THURSDAY 31 MAY 2012 FIRST-QUARTER 2012 SALES WEDNESDAY 4 JULY 2012 ANNUAL GENERAL MEETING THURSDAY 6 SEPTEMBER 2012 SECOND-QUARTER 2012 SALES TUESDAY 25 SEPTEMBER INTERIM RESULTS MONDAY 3 DECEMBER 2012 THIRD-QUARTER 2012 SALES Gaële Le Men Investor Relations Tel.: [email protected] 38

41 LANDMARKS 2011 FINANCE SHAREHOLDERS PROFILE GEOGRAPHICAL SPLIT OF SHARES HELD BY INSTITUTIONAL INVESTORS Public : 96.9 % At 31 January 2012 institutional investors: 94.7 % individual investors: 2.2 % Management and employees: 2.6 % Treasury shares: 0.5 % At 31 January 2012 United States: 38 % France: 12 % United Kingdom: 36% Other countries: 14% 120 SHARE PRICE Source: Factset 23 February 1999 Neopost: 15.0 SBF 120: 2, April 2012 Neopost: SBF 120: 2,497 Change Neopost: +192% SBF 120: -11.5% A dividend of 3.90 per share for 2011 will be submitted for approval by the Shareholders Meeting in July This represents a yield of 8.6% based on the share price on 18 April 2012 ( 43.75). 39

42 2011 INDICATORS % change in sales at constant exchange rates SALES million 1,003bn sales In 2011, Neopost s sales increased by 3.8% following growth of 5.8% in At constant exchange rates, growth gained pace in 2011, with a 5.6% increase compared with 2.0% in Consolidated since it was acquired in June 2011, GBC-Fordigraph contributed around 2 % % current operating margin 3.90 A NEW OPTIMISATION PLAN In 2011, the Group launched a new optimisation plan in the United States and Europe in order to continue to streamline its organisational structure and create new momentum. The plan is progressing well. A provision of 19.5 million was booked in 2011 to cover costs relating to the plan, which should generate savings of around 7-8 million a year as of dividend per share 40

43 LANDMARKS 2011 FINANCE CURRENT OPERATING INCOME 16 % 7 % 40 % 12 % 25 % North America: %* France : %* Germany: %* United Kingdom: %* Rest of the World: %* SALES BY REGION million Current operating income increased by 3.4% in 2011 relative to Despite the slight dilutive impact on operating margin of the acquisition of GBC-Fordigraph, current operating income remained at a high level, representing 25.6% of sales, virtually in line with the 25.7% achieved both in 2009 and In 2011, sales increased in all regions. North America, Neopost s largest market, continued to drive the Group s revenues. France and the United Kingdom saw a return to growth, while sales in the rest of the world benefited in particular from brisk momentum in the Scandinavian markets and the successful integration of GBC-Fordigraph. 32 % 68 % Mailing systems: %* Document and logistics systems: %* SALES BY BUSINESS CATEGORY In 2011, sales from mailing systems benefited from the continuing roll-out of the IS range and a few notable successes among major clients. The document and logistics systems business saw strong growth thanks primarily to the success of high-end folders/inserters and the various contracts won in the area of logistics and traceability million NET INCOME Despite the provision relating to the optimisation plan booked in July 2011, net income for 2011 remained virtually stable relative to Excluding the provision for the optimisation plan, net income came to 167 million, an increase of 6.4%. This represents improvement in net margin to 16.7% compared with 16.2% in 2009 and OPERATING CASH FLOW Neopost s ability to generate solid operating cash flow is one of the characteristics of its business model. In 2011, while leasing activities continued to develop, net cash flow from operating activities rose by 22.4%. This reflects million an increase in cash flow before net cost of debt and taxes and tight control of the working capital requirement. 32 % 68 % Recurring revenues : %* Equipment sales : %* SALES BY REVENUE CATEGORY In 2011, growth in equipment sales gained pace significantly, illustrating the Group s business momentum driven by the competitiveness of the IS and DS ranges. Growth in recurring revenues was more modest. Rental and leasing revenues accounted for 28% of sales. Revenues from services and sales of consumables accounted for 40% of sales. *Change relative to 2010 at constant exchange rates NET DEBT/EBITDA Despite the acquisition of GBC- Fordigraph, net debt decreased by 23 million to 665 million at the end of This debt is used to finance equipment installed at customers premises and is more than covered by future cash flow from leasing and rental activities. At the same time, EBITDA rose by 1.7%, allowing for further improvement in the net debt/ebitda ratio. 41

44 SUMMARISED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS SUMMARY year ended Excl. provision year ended 31/01/2012 for optimisation plan 31/01/2011 million Sales 1, % 1, % % Cost of sales % % % Gross margin % % % R&D expenses % % % Selling expenses % % % G&A expenses % % % Maintenance & other operating expenses % % % Employee profit-sharing and share-based payments % % % Current operating income % % % Goodwill amortisation Optimisation charges % - - Operating income % % % Net financial items % % % Income before taxes % % % Taxes % % % Income from associates % % % Net income % % % Minority interests Net attributable income

45 LANDMARKS 2011 FINANCE CONSOLIDATED BALANCE SHEET SUMMARY ASSETS 31-January January-11 million Goodwill Intangible assets Tangible assets Other non-current financial assets Leasing receivables Other non-current receivables Deferred tax assets Inventories Net accounts receivable Other current assets Financial instruments Cash and cash equivalents TOTAL ASSETS 2, ,055.6 EQUITY & LIABILITIES 31-January January-11 million Shareholders equity Long-term provisions Long-term debt Other non-current liabilities Short-term debt Deferred tax liabilities Non-current financial instruments Deferred income Current financial instruments Other current liabilities TOTAL EQUITY & LIABILITIES 2, ,055.6 A reference document was filed with the AMF on 27 April It is available on request from the company or at: 43

46 Editorial and writing: Neopost DDB Financial Graphic design and production: Marie-Louise Illustrations: Marguerite Lecointre Photos: Philippe Zamora (pages 6 to 11) & Neopost s photographic library Printed on Recycled Paper Cocoon

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48 113, RUE JEAN-MARIN NAUDIN BAGNEUX - FRANCE