Neopost Investor Day. January 16, 2015

Transcription

1 Neopost Investor Day January 16, 2015

2 08:30 09:00 Overall Vision D. Thiery 09:00 09:15 Financial Projections J-F. Labadie 09:15 09:45 Market Trends & Branding N. Scholz 09:45 10:30 Neopost Integrated Operations C. Garvey & D. LeStrange 10:30 10:45 Break 10:45 11:00 Group Hardware Solutions T. Le Jaoudour 11:00 11:45 Neopost Shipping Solutions A. Férard 11:45 12:30 Enterprise Digital Solutions H. Dura 12:30 14:00 Lunch 14:00 15:15 Demos 15:15 15:30 SME Digital Solutions N. Scholz 15:30 15:45 Neopost Labs P. Boulanger 15:45 16:30 Conclusions & final Q&A D. Thiery

3 Overall Vision Denis THIERY Chairman and Chief Executive Officer Neopost Investor Day

4 Communication is becoming more complex Transactional mail continues to decline while new forms of digital communication are growing Our customers have to incorporate technology trends in order to effectively communicate to their customers across multiple channels 4

5 Multiple Source, New Channels and Data Richness Multiple sources of customer data and multiplication of media communication channels and delivery points Increased interactivity between companies and customers Richness of Data: Profile, Customer Type, Location Neopost can help with this complexity 5

6 The Shipping Market is changing too The parcel market is growing fast driven by the growth in e-commerce Carriers are expanding their focus from B2B to B2C The market is shifting its focus from the carrier to the Shipper and Consumer Postal Organizations are investing for their networks to leverage the growth in consumer parcels 6

7 Neopost Ambition MAIL SOLUTIONS COMMUNICATION & SHIPPING SOLUTIONS Continue Developing Mail Related Business Build a Complementary Offer for Current Customer Base Invest & Speed up Development in Non- Mail Related Business VAR OEM Software services SME oriented web / cloud based SaaS services NEOPOST INTEGRATED OPERATIONS (NIOs) CSS Dedicated Units 7

8 Neopost Ambition MAIL SOLUTIONS COMMUNICATION & SHIPPING SOLUTIONS Continue Developing Mail Related Business Build a Complementary Offer for Current Customer Base Invest & Speed up Development in Non- Mail Related Business VAR OEM Software services SME oriented web / cloud based SaaS services Marketed to enterprise accounts Developed for NIOs NEOPOST INTEGRATED OPERATIONS (NIOs) CSS Dedicated Units 8

9 Neopost Growth Areas: What they have in common Complementary to Neopost s current business: synergies Fast growing markets of good size (min $1Bn) Neopost has the ability to take a leadership position There is an opportunity for 15% ROCE Synergies, Synergies, Synergies! 9

10 SME Opportunity Much of Neopost s customer base is companies < 100 employees SaaS & Cloud are making digital solutions affordable for smaller companies >5m SMEs across Neopost s top 4 countries The SME market for Digital Solutions today is largely untapped 10

11 Positioning Neopost for the Future Integrated Operations CSS Dedicated Units MS/CSS Shipping Enterprise Digital Solutions New Projects CVP-500 SME Digital Neopost Labs 11

12 Neopost Opportunity Large Enterprises CSS DUs Shipping Enterprise Digital Medium Size NIO VAR OEM CSS DUs Shipping Enterprise Digital Partners SME/VSE NIO CSS DUs SME Digital Partners A p p s / S a a S / C l o u d 12

13 Positioning Neopost for the Future Integrated Operations CSS Dedicated Units MS/CSS Shipping Enterprise Digital Solutions New Projects Clem Garvey Dennis LeStrange Europe, APAC, Export USA, Canada Alain Férard Shipping Solutions Henri Dura Enterprise Digital Solutions Nikolaus Scholz New Projects 13

14 Neopost Executive Committee Chairman & CEO NIOs Europe, APAC, Export USA, Canada CSS DUs Enterprise Digital Solutions Neopost Shipping Solutions New Projects CFO R&D & Supply Chain CMSO CTO CHRO 14

15 Sales evolution billion billion 2014 (e) 1.1 billion Communication & Shipping Solutions 81m 186m 8% 17% 20% Mail Solutions 922m 909m CSS sales increased by more than 40% per year since 2011 EBIT margin around 22% in 2014 despite a high level of investment 15

16 Mid Term Ambition 2014 (e) 1.1 billion billion* Communication & Shipping Solutions 20% CSS: >35% Mail Solutions Ability to grow organically 2% to 4% from *Exchange rate: /USD 1.25 and /GBP

17 Mid-term projection Integrated Operations Shipping Enterprise Digital Solutions New Projects Total Group Organic Growth (%) +0-2%/year MS ~-2% CSS ~+20% >+15%/year +2%-4% Breakdown ambition 80% MS 20% CSS 100% CSS > 35% EBIT margin*(%) ~22% ~15% ~20% Max. 10m OPEX 17 /year 20-22% Sales: 1.4 to 1.5 bn** by * Calculated on sales including intercos ** Exchange rate: /USD 1.25 and /GBP

18 Financial projection Jean-François LABADIE Chief Financial Officer

19 Mid-term projection Integrated Operations Shipping Enterprise Digital Solutions New Projects Total Group Organic Growth (%) +0-2%/year MS ~-2% CSS ~+20% >+15%/year +2%-4% Breakdown ambition 80% MS 20% CSS 100% CSS > 35% EBIT margin*(%) ~22% ~15% ~20% Max. 10m OPEX 19 /year 20-22% Sales: 1.4 to 1.5 bn** by * Calculated on sales including intercos ** Exchange rate: /USD 1.25 and /GBP

20 2014 estimated landing Integrated Operations Shipping Enterprise Digital Solutions New Projects Total Group Organic Growth (%) ~-1% MS: ~-2.8% CSS: ~+15% ~+13% ~0% Breakdown ambition 89% MS 11% CSS 100% CSS 20% EBIT margin*(%) ~24% ~5% <15% OPEX ~ 10m 20 ~22% Sales: 1.1 bn * Calculated on sales including intercos 20

21 Maintain NIO profitability at a high level - UK example NIO UK proportion of CSS on total sales was 12% in 2013, is estimated to be at 14% in 2014 EBIT margin* of NIO UK was around 20% in 2013 and expected to remain stable in 2014 In 2015, CSS is expected to reach 16% of NIO UK total sales and NIO UK EBIT margin is expected to remain stable Increasing share of CSS in total revenues allows the UK to offset decline in MS * Before headquarter expenses and industrial margin allocation 21

22 Continue to improve Enterprise Digital Solutions profitability Both Satori and GMC have shown strong growth since acquisition Satori revenue evolution ( ) GMC revenue evolution ( ) $m Acquisition: 2009 CHFm Acquisition: 2012 CAGR (11-14E) +19.5% CAGR (11-14E) +22.0% E E 22

23 Continue to improve Enterprise Digital Solutions profitability Track record: Satori EBIT margin grew from 10% in 2009 to around 20% in 2014 GMC EBIT margin grew from 10% in 2012 to above 15% in 2014 DMTI, Human Inference still around 10% Mid-term potential: Bring all units EBIT margin to 20% Improvement factors: Strong top line growth Highly profitable VAR activity R&D and G&A spending not growing as fast as sales 23

24 Improve Shipping profitability Business model Lockers with 7-year commitment 1. Year one: recognition of a hardware sale for the value of the locker and a lease receivable (leasing model) 2. Following years: financial interest recognition in the P&L 3. Service and maintenance revenues billed on top every year Lockers without long-term commitment 1. Shared use of lockers or below 7-year exclusive commitment 2. No hardware sale 3. Billing per parcel or per locker 4. Service and maintenance revenues billed on top every year 20-30m sales potential by with ~15% EBIT margin 24

25 Improve Shipping profitability Software editor License sales and maintenance contracts Strong growth potential VAR activity possible 10% EBIT margin when acquired Same model as Satori or GMC 15-20% EBIT margin potential 25

26 Mid-term projection EBIT margin 22 Best case Base case 20 to 22% 18 Worst case 18% Horizon 26

27 Market Trends & Branding Nikolaus SCHOLZ Chief Marketing & Strategy Officer

28 Mail volumes are declining Mail* volume in Main 4 (US, UK, France, Germany) Historical Trend Projections % -5.3%? -6.6% -3.5% Sources: Historical: US (USPS Quaterly Reports), Germany (Deusche Post Annual Reports), France (ARCEP Observatoire Postal), UK (Ofcom Reports) * only addressed mail 28

29 Example of the USA Source: USPS Quaterly Reports 29

30 Worldwide MS Performance Neopost MS vs PB SMB Perimeter Revenue (M ) CAGR CAGR % -2.9% M % +0.0% Neopost PB+Neopost Revenue excluding currency effects Nb: Neopost estimates at constant currency 30

31 Two Expansion Directions from our Core Shipping Physical Communication Digital Communication 31

32 Electronic Invoices Market Expects strong growth over the next 3 years Electronic Invoices Overall Market Revenue (in $B) +24% CAGR B2B/B2G/G2B B2C 8% 5% Focus on Europe penetration rate in Europe 10% 7% 24% 20% 15% 13% 14% 13% 11% 9% E Source: Technavio market survey E 2016E Source: Billentis Global E-invoicing Market by Geographical Segmentation 2012 APAC 9% Americas 36% (Estimates in %) Source: Technavio market survey 2013 EMEA 55% European market The regulation is a key pillar to adopting a full digital invoicing solutions The governments are switching quickly to the Electronic invoicing, pushing SMBs to adopt this process as well Ex: Denmark is the most advanced in Europe, due to government who established E-invoices as mandatory Other markets USA: Need to Enhance Invoicing Process Brazil: E-invoice adoption is pushing by regulation, however the complexity involved, remains an hurdle 32

33 CCM Software Market Overall Market Revenue (in $M) Magic Quadrant for Customer Communication Management Software +9% 1,550 1, E * Source: Gartner reports, NEDS analysis 33

34 Data Quality Software Market Overall Market Revenue (in $M) Magic Quadrant for Data Quality Tools +14% +12% ~1,850 1, E * Source: Gartner reports, NEDS analysis 34

35 SMEs are digitising rapidly Immediate opportunity for Neopost Mid-term opportunity 13% 13% Held Back Physical Only 9% 26% Digitising Digitising Internal Push External Pull 25% Steady State reached (for now) 16% Fully Digital Increasing Level of digitization Neopost is legitimate to accompany its customers in their transformation from a communication 100% physical to a mix of digital and physical communication 35

36 Large software providers try to bring their offers down market, while new entrants have a disruptive approach New Entrances Start with SaaS based freemium offer to attract customers who then pay for value added elements Larger players Try to move down to the pyramid, targeting the SMB s customersby developing a SaaS solution mostly for retention and new customer acquisition 36

37 Shipping: Market Trends Value of E-Commerce is growing fast in the main 4 countries Germany: Value of E-Commerce, (in Million Euros) UK: Value of E-Commerce, (in Million Euros) 41,100 50, % 76,400 83,047 63,400 90,272 98, % E 2015E 2016E 2017E E 2015E 2016E 2017E Source: E-Commerce Europe Report 2014 Source: E-Commerce Europe Report 2014 France: Value of E-Commerce, (in Million Euros) US: Value of E-Commerce, (in Million Euros) +13.2% 79,278 71,229 63,998 57,500 45,000 51,100 37, % E Source: E-Commerce Europe Report E 2016E 2017E E 2015E Source: E-Commerce Europe Report E 2017E 37

38 Shipping: Market Trends Parcel s volume is growing fast in the Main 4 countries Germany: Parcel Volumes UK: Parcel Volumes % % E 2015E 2016E 2017E E 2015E 2016E 2017E Source: Transport Intelligent Data Report Source: Transport Intelligent Data Report France: Parcel Volumes +11.2% US: Parcel Volumes +12.2% 4,527 4,062 3,588 2,741 3,161 4,993 5, E 2015E 2016E 2017E E 2015E 2016E 2017E Source: Transport Intelligent Data Report Source: Transport Intelligent Data Report

39 Conclusion on market trends Shipping Physical Communication Digital Communication Market addressed by Neopost Growth rates $2-3bn* $3-4bn* $2-3bn* 10-12% -3% 10-12% * Source: Neopost and Gartner estimates 39

40 Neopost s Branding Journey January 2015

41 A global launch in 31 countries in February

42 A branding aligned with our business strategy is required to create awareness and claim legitimacy Before 2012, we only had to manage Neopost as our sole brand to claim legitimacy in mailing - our core business Our business strategy extended to developing digital communication and shipping solutions, in addition to our core mailing activity Acquisitions are increasing the brand portfolio: GMC, Satori, Human Inference, DMTI Spatial, ProShip 42

43 Our objective «Our Brand is the sum total of how our customers perceive us. Branding is about shaping that perception Take our brand on a journey of transition (not create a new brand) Create brand consistency throughout the whole organization and offer portfolio Develop brand awareness and legitimacy in the digital and shipping world Support a change in mindset Make every employee a brand & strategy ambassador «43

44 Brand awareness: our journey will continue to gain legitimacy for our new activities Whilst viewed positively by customers, Neopost has a long way to go outside its customer base Which brand (from a short-list) would you most associate with your preferred attributes? Rebranding is the 1 st step Now we need to convince SMEs that Neopost is a trusted advisor for their migration to digital communication CVA study over 2,000 companies (2014) 44

45 The new brand positioning and design

46 New Positioning and Design - Overview A new color unique and fresh A new logo A new baseline 46

47 A brand architecture to reflect our main lines of business 47

48 What will our customers think

49 We asked for customers feedback 3 major markets 2 focus groups with decision makers USA (Philadelphia) UK (Manchester) France (Paris) from SMEs from larger organizations 8 participants per group Branding is the art of aligning what we want people to think about us with what people actually do think about us. And vice-versa. 49

50 The new identity was seen in a positive light in all three markets I get the sense they are fast moving, I like what they are trying to do The slogan helps to describe what they do The color is great, it absolutely stands out This shows they are finally moving into the present day Now they feel less like a manufacturer and much more like a provider of software and services It was agreed to be contemporary, adding dynamism and innovation to the brand Respondents agreed that the new identity suggested a company that was moving into software and services, moving away from being a manufacturer The brand end line (Send. Receive. Connect.) received a strong endorsement from all markets Connect is the key word: it adds modernity and helps articulate this enlargement of Neopost s core business Film Branding 50

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52 Neopost Integrated 0perations Clem GARVEY, Chief Operating Officer Europe, APAC, Export Dennis LESTRANGE, Chief Operating Officer North America

53 Positioning Neopost for the Future Integrated Operations CSS Dedicated Units MS/CSS Shipping Enterprise Digital Solutions New Projects Clem Garvey Dennis LeStrange Europe, APAC, Export USA, Canada Alain Férard Shipping Solutions Henri Dura Enterprise Digital Solutions Nikolaus Scholz New Projects 53

54 Worldwide MS Performance Neopost MS vs PB SMB Perimeter Revenue (M ) CAGR CAGR % -2.9% M % +0.0% Neopost PB+Neopost Revenue excluding currency effects Nb: Neopost estimates at constant currency 54

55 NIO Key Objectives Strongest Resilience Possible on MS Grow CSS Activities where net of MS and CSS is overall growth even if it s small (assumptions -2% in MS & +~20% in CSS) Bring Products from Dedicated Units to NIO Customers Maintain highest level of EBIT 55

56 OVERVIEW Europe Defend Market Share while striving to maintain margins through synergies and shared services Accelerate CSS digital solutions North America Take market share in MS Improve cross selling FI Accelerate CSS digital solutions Asia-Pacific Continue to take share in MS Launch first CSS Digital Solutions South America Eastern Europe Seize opportunities - Continue to optimize distribution network 56

57 North America Dennis LESTRANGE Chief Operating Officer North America

58 North America Key Objectives Slight overall revenue growth Mail Solutions: -2% to 0% CSS ~ 20% Align sales coverage strategy by product/channel neodirect Direct Dealer Enhance customer experience Consistency of systems & processes Improve web presence and self-service options Automate/streamline Quote to Cash Maintain EBIT rate Finish District consolidation Re-balance OPEX between MS and CSS Drive more efficiency & productivity 58

59 North America Productivity Evolution Revenue / Employee ($K) +9% in 5 years Jan Jan Jan Jan Jan

60 Neopost USA Market Share Trends Market Share in units 18.1% 18.0% 18.5% 18.6% 17.4%

61 Neopost USA Market Share Trends Small Market Share in units Mid/Comm 25.7% 26.5% 26.4% 27.1% 28.2% 15.1% 15.7% 15.6% 16.0% 15.8%

62 North America MS Performance Neopost MS vs. PB SMB Perimeter Revenue (M ) ,880 1,722 1,635 1,555 1,449 1,393 CAGR % M % Neopost PB+Neopost Revenue NA excluding currency effects Nb: Neopost estimates at constant currency 62

63 North America Organic Growth Mail Solutions Increase market share Better cross-sell with Document System Federal Government Market More Competitive Displacement CSS Align sales coverage Enterprise shipping: ProShip Document Management OMS-500 GMC Inspire Mailroom ToolKit Data Quality Infuse Data Improver Shipping/Parcel Lockers ProShip Neoship 63

64 North America market segmentation CSS Solutions Distribution & Support GMC, Satori, ProShip Enterprise GMC, Satori, ProShip (Direct from BU) OMS500, Infuse, ESS Major Accounts Local Specialist DSS, Shipping OMS100, Bulk Mailer, EMS, WTS Neo Pref, Data Improver, NeoShip Mail Center Small Business AR and Telesales certified on CSS low end solutions 64

65 North America field productivity and neodirect 400 Field Sales Productivity and NeoDirect FIELD SALES PRO DUCTIVITY a nd NEO DIREC T NeoDirect Bookings $M Sales Productivity $K/qbs * 14.0 SALES PRODUCTIVITY $K/ QBS NEODIRECT BOOKINGS $M B - *Field Sales Increase Field Sales Productivity due to shift of low end hardware sales to NeoDirect 65

66 NeoShip NeoShip: Use the franking machines for Parcels Impb requirements Value of postage for a parcel = 10 times a letter Discounted rates Ease of use for customers Simple cash collection for USPS Customer retention / acquisition of new customers Expansion of postage financing 66

67 NeoShip and Leasing/Postage Finance Synergies Financials Shipments $2,066, ,206 $1,200,000 $250,000 $77,270 15, (e) Revenue PostageFinance Pass through (e) A model that can easily apply to most SaaS/Cloud based applications 67

68 North America - GMC Inspire Synergies Results $5.5M in licenses, professional services organization (PSO) and maintenance Current pipeline $10M+ Critical Success Factors Alignment with Sales Coverage Model Tier 2 is the NIO sweet-spot Vertical Market approach Insurance segment at $3.2M Government segment at $800K GMC partnership and brand Benefits Supports a higher and wider approach within the account Workflow and solutions based Pulls Equipment in solution DS1200 placements ROI sale 68

69 North America Conclusion Continue gaining market shares in MS Continue developping CSS activities Continue optimizing the organization according to the mix of MS/CSS 69

70 Europe, Asia-Pacific & Export Clem GARVEY Chief Operating Officer Europe, APAC, Export

71 NIO Europe - A Transformational Challenge SALES Resilience in MS, maintaining margins Accelerated growth in CSS OFFERING From CSS DU (OMS 500, DataImprover, etc) Through strong partnership SHARED SERVICES & SYNERGIES To increase productivity To enhance customer experience FAST GO TO MARKET Sales & Marketing coordination to speed up GO TO MARKET, especially in software and solutions NEW MOBILISATION OF OUR PEOPLE Engagement of Multinational teams across Region-wide Projects 71

72 NIO Europe - A Transformational Challenge SALES Resilience in MS, maintaining margins Accelerated growth in CSS 72

73 NIO Europe - SALES (1/3) Growth in CSS Digital Solutions Revenue >= decline in MS Revenue (the principal focus of the NIO companies) Sales of new Group-sponsored Digital Solutions (own and OEM) VAR sales of CSS DU product Regional alignment of Sales Coverage Strategy by Product/Channel Direct Sales General sales-force Direct Sales Specialised sales-forces NeoDirect SME digital solutions and on-line offerings Strengthening and leveraging of Pre-Sales & PSO resources to support greater sales of solutions Regional coordination of investment 73

74 NIO Europe - SALES (2/3) Appropriate Pay-plans to address core resilience and solutions simultaneously Leveraging of experience across territories and across Regions (US/Europe-ROW) Salesforce.com deployment All European operations on SFDC by 31 January 2016 Neopost VAR Programmes Central liaison with CSS DUs Major account coordination OEM development and management FP New channels 74

75 NIO Europe - SALES (3/3) Key Measures of Success: Increase in Sales Productivity % of Sales-People having sold Digital Solutions Evolution in ratio of Sales & Marketing Costs as a % of Sales Actions engaged: Transfer of Channel Marketing resources from GMS to Operations Study of existing Sales, Sales Support and Marketing resources in NIO s Engagement of Region s Senior Managing Directors in ambitions 75

76 NIO Europe - A Transformational Challenge OFFERING From CSS DU (OMS 500, DataImprover, etc) Through strong partnership 76

77 NIO Europe - OFFERING Continue to integrate CSS Digital Solutions into NIO catalogue proposed by the existing sales-force Focus CSS Digital Solutions in areas where our research identifies Customer Pain-Points Selectively develop VAR activity in companies where we can appropriately support it Coordinate local initiatives so that we don t lose focus on key strategic challenges and projects 77

78 NIO Europe - OFFERING Output Solutions, own technology: Strong and complete product range for all type of customers and all countries VAR program success Output Solutions, OEM: Industrialisation of NeoTouch offer Incoming Solutions: Real success with DCS but only in UK so far. The offer is still limited through local initiatives. DCS & UK Neopost Channel Feb 12 to Jan k Feb 13 to Jan k Feb 14 to Sep 14 (8 months). 766k Data quality: DataImprover success in UK to be replicated in the other countries. (USA Germany) Partnership with Deyde, 3rd party provider, for Italy (and Iberia, Mexico) Shipping Solutions: Track inside development in major account (Samsung Axa AG2R ) SaaS solutions proving difficult on existing technologies 78

79 NIO Europe Neotouch OFFERING Outsourcing mail E invoicing 79

80 NIO Europe Neotouch OFFERING Results of the pilot phase Revenue impact of Neotouch on Neopost France traditional customers. Sample: 115 accounts - 1 full year revenue CORE = All core revenue (FM, FI, leasing, ink,services ) NEOTOUCH = 1 full year revenue of services without franking x3 80

81 NIO Europe Neotouch Key findings Key findings: Neopost France knows to market this type of product Most of the contracts signed are over 36 months (64%) Incremental revenue with high margin Next steps: Full launch in France Launch under preparation with major NIOs: First, the USA Then, Germany and UK 81

82 NIO Europe - A Transformational Challenge SHARED SERVICES & SYNERGIES To increase productivity To enhance customer experience 82

83 NIO Europe - SHARED SERVICES As the Traditional Business declines, we must ensure that every euro spent on its support gives the maximum return across the entire Region and not just locally Deployment of CSS Digital Solutions requires a level of support which smaller individual countries cannot provide on their own Resources at Head-Office can be pooled in virtual teams with resources in NIO s to provide better Employee support and a better End-User Customer experience 83

84 NIO Europe - SHARED SERVICES Identified projects: Product Engineering & Support Leasing Operational Marketing Call Centers Web-shops & On-Line activity Information Technology Sales Order Processing Other (Accounting, Human Resources, ) 84

85 NIO Europe - A Transformational Challenge FAST GO TO MARKET Sales & Marketing coordination to speed up GO TO MARKET, especially in software and solutions 85

86 NIO Europe - NEW & FAST GO TO MARKET Better co-ordination of Marketing Activities Mutualisation of Operational Marketing Methodology Search-Engine-Advertising, Search-Engine-Optimisation Lead-generation for core-business Deployment of new Neopost Branding will afford an Opportunity to achieve uniform messaging across Region, facilitating economies in: Product collateral Document conception and preparation Website management Local Marketing in NIO s can be exclusively focused on real customer-facing value-added generation 86

87 NIO Europe - A Transformational Challenge NEW MOBILISATION OF OUR PEOPLE Engagement of Multinational teams across Region-wide Projects 87

88 NIO Europe - PEOPLE MOBILISATION Engagement of People in new Vision through new Group Internal Communication efforts and through New Branding Project Leverage creation of new Group of Senior Neopost Leaders Team Engagement of People in International and Regional Projects to prepare Structures, Systems and Processes for the future: Information Technology NeoDirect SME Digital Solutions Leverage Neopost Talent Management Programme Inventorying of Digital Skills 88

89 NIO Europe - Conclusion Substitution of decline in MS Revenue by CSS sales Productivity optimisation through synergies and sharing of Regional resources Engagement of our People in an evolving Business Model, leveraging their entrepreneurship to the benefit of the Region as well as their local Operations Accelerating the Go-To-Market of our Offers, especially in the Digital space 89

90 Group Hardware Solutions Thierry LE JAOUDOUR R&D and Supply chain

91 Group Hardware Solutions Overview International organization developing, producing and distributing Hardware Solutions to NIO and Shipping Dedicated Unit R&D Centers Bagneux (Fr) Drachten (NL) Loughton (UK) Supply Chain Le Lude (Fr) Memphis Loughton Drachten Bagneux /Le Lude In-Tech Kong-Yue Hong Kong Drachten (NL) Loughton (UK) Precico/Benchmark Memphis (USA) OEM Partners (Asia) Mail Solutions Mailing Systems Document Systems Parcel Hardware Sol. Packing Systems Parcel Lockers 91

92 Group Hardware Solutions Strategic Direction Group Hardware Solutions Maintain EBIT, Optimizing Mail Solutions and Innovating in Parcel Hardware Solutions Remanufacturing Mail Solutions Optimization with NIO Balancing workload between sites optimizing fixed cost Provide services to NIO: Spare parts management, Swap Transfer of activity from Supply Chain to support NIO Shared Services Parcel Hardware Solutions Innovation with Shipping DU Parcel Lockers Packing Solutions Partly reallocate R&D resources from Mail Solutions to Parcel Hardware Solutions Reduce R&D resources in Mail Solutions 92

93 Optimization Of Mail Solutions Supply Chain General Environment Placement of Mail Equipment is decreasing Growing Neopost activity in Production Mail Opportunity to sell our products to other vendors (FP, Datacard ) Employee Retirement in our European sites (Direct and Indirect) Remanufacturing (not applicable in China) is impacting production of new equipment For Low volume, variable Cost of Internal production is similar to OEM + Transport Opportunity in new Parcel hardware equipment Industrial Plan Transfer of low volume products from Asia to Europe Deployment of Remanufacturing in Europe and Malaysia Review OEM partnership Continuous reduction of fixed cost Use of Supply Chain organization to support Shipping Results Flexibility >10% in all sites Reduction of product cost from OEM Maintain Growth Margin despite decrease of Mail Solutions Revenue 93

94 Remanufacturing: a Strategic Project Based on 4 Key Pillars Development Eco Design approach engaged 10 years ago Product Roadmap with limited evolution allowing reused of previous platform Supply Chain Local expertise in our sites Remanufacturing quality same as new Leasing Integrated Operation Allow to easily sale the Product as a service End of lease is generating a regular Return flow Promoting the Environmental benefit selling product without distinction between Remanufactured and New products 94

95 Contributing to Corporate Social Responsibility Environmental Benefits Decrease the environmental impact of the product up to 40% Anticipate future environmental regulations, Social Benefits Circular economy generating local employment External communication Economical Benefits Strong cost reduction Maintain retail price 95

96 A Worldwide Approach A worldwide approach managed within existing organization 96

97 Decrease Overall R&D Expense in Hardware Solutions, Reallocate Resources to Parcel activities M 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 - Mail Solution Parcel Hardware Sol. 2,9 3,4 3,9 38.5m 29.8m Mail Solutions Mailing System Minimize development of new product Focus on rollout and quality improvement, Document System Minimize development of new product, focus on support Production Mail Maintain investment in this growing segment Parcel Hardware Solutions Parcel Locker Innovate in collaboration with NID Packing Solutions CVP-500: - Continuous improvement based on pilot feedback - Lower cost 97

98 While Reducing our Investment in Mail Solutions, Continuous Evolution of our Product Range is Minimizing Impact of Market Trend Evolution of Industrial revenue of Document System +3.5%/Y DS-1200 G3 DS-200 DS-85/90 DS-75 DS-150/180 DS-90i Renewal of offer every 5 years minimum DS-65 DS-35 DS-63 98

99 Neopost Shipping Solutions Alain FERARD Chief Operating Officer Neopost Shipping

100 Positioning Neopost for the Future Integrated Operations CSS Dedicated Units MS/CSS Shipping Enterprise Digital Solutions New Projects Clem Garvey Dennis LeStrange Alain Férard Europe, APAC, Export USA, Canada Shipping Solutions Henri Dura Enterprise Digital Solutions Nikolaus Scholz New Projects 100

101 Global B2C e-commerce figures 2013 show double digit growth, driving parcel volumes Asia-Pacific is the largest ecommerce region and shows a solid growth rate Asia-Pacific is the largest ecommerce region and shows a solid growth rate Out of the 1.2 billion eshoppers, 8% buy cross-border Considering ~55% of online orders are goods, the global e-commerce market for goods accounts for 645 bn Top-3 (USA + China + UK) = 57% of global B2C sales 101

102 Global e-commerce figures show double digit growth, driving parcel volumes 102

103 Parcel delivery industry trends «Most of Innovation and investments are driven by ecommerce» Carriers B2C delivery leaders are expanding their delivery hours to meet with consumers needs DPD UK will start Sunday deliveries soon DPD DE will start Saturday deliveries soon PostNL UK delivers up to 9.30pm on tuesdays and thursdays Rico Logistics UK offers sameday delivery services 7 days a week Royal Mail will trial Sunday delivery in London area UPS and Fedex to shift to dimensional pricing on many US ground parcel shipment on Jan 2015 Cross border shipping on IPC and UPU agendas Parcel lockers DHL is introducing parcel lockers for household DHL/DP plans to extand the PackStation network in other countries (like NL, IT, ) emerchants Parcel shops Giants (Amazon, Google, ebay, Uber) are expanding sameday delivery in local areas (LA, SF, NYC, ) Amazon acquired 25% of Colis Privé (aka Adrexxo) Mondial Relay introduces «web-to-shop» service Pickup Services extending its network in France, Benelux and Germany Alibaba investing 10% stake in SingPost to expand in APAC According IMRG, 17,5% of online orders on UK eshops are delivered outside the UK DPD integrates ParcelShop network in Germany, Austria, Benelux for cross-border deliveries UK market is now covered by multiple large networks (Collect+, Hermes, UPS) UPS Parcel point pan european network set up 103

104 Demand on the Parcel Market Buyer 3 Shipper 1 Carrier / Operator Recipient 2 order pack ship collect accept, sort & route Deliver Collect /receive return Needs to address Trust in shipment Delivery time Cost of shipment Order packing systems (cost of packing, volume optimization ) Client-server application for warehousing Compliance control and landing costs calculation Tracking and tracing Cost of transport (last mile) Accessibility Proof of delivery management Cloud/Saas application for e-commerce Neopost, the only player on the market with a global view of the logistic chain 104

105 Neopost current offer on the Parcel Market Buyer 3 Shipper 1 Carrier / Operator Recipient 2 order pack ship collect accept, sort & route Deliver Collect /receive return Trust in shipment CVP-500 OSS Parcel Lockers Delivery time Cost of shipment Compliance control and Landing costs calculation Mobile tracking solution Multi-carrier tracking software / RFID Cloud/Saas application for e-commerce Be for PARCELS what NEOPOST is for MAIL: THE FACILITATOR 105

106 CVP-500 packing solution Continuous packing system delivering 3D optimisation of parcel size Since January 2015, in the USA, UPS and FedEx decided to charge shippers according to the volume of parcels. CVP-500 clearly addresses new needs of shippers A first machine is operated by Doc Data, one of the largest Dutch e-commerce fulfilment providers Two other machines sold to fulfilment companies in the Netherlands Pack size = Product size Up to 500 parcels per hour 1 to 10 items per parcel Very broad range of sizes No need for packing fillers Carton reusable for returns or other No stock of predefined boxes, but pallets of corrugated cardboard Order details printed and packed at the same time Shipping label printed and applied on the box Film CVP 106

107 CVP-500 * -40% CVP-500 * Manual Main advantages: Automation & optimisation Significant savings on labour Up to 40% less shipping volume No filler material needed Up to 20% reduction in cardboard used Flexibility for peak times E-tailers E-fulfilment professionals Carriers Operators concerned: Any company handling large volumes of parcels 107

108 CVP-500 challenge CVP-500 Parcels per day 3,000 8,000 We are still working on the go-to market Technical development: smaller or bigger box size (currently: min high 10cm, max high 60cm) bigger number of items per box Further development: We need to: stabilize the technology study the range we want to provide our customers with larger scope of dimension set up partnership with cardboard supplier and other players potentially address other segments 108

109 Multi carrier software: Acquisition in may 2014 Carrier relationships $10 million in sales in 2013, double-digit growth Market leader Industry/Domain Expertise Brand Recognition Top 5 volume shipping software in the US Fastest performing software product on the market today Capable of shipping millions of packages per day Average customer volumes at 50K packages per day Diamond FedEx partner (one of only four Diamond Partners worldwide) Fastest growing volume solution for UPS FedEx and UPS expressed excitement with this marriage as they see this driving international shipping business using the ProShip product and the Neopost name and infrastructure VAR* programme launched in Neopost USA International perspective Film ProShip 109

110 , the ultimate solution for parcel delivery Convenient and easy-to-use automated parcel point to pick-up online shopping orders and drop returns in less than a minute when and where it suits you! No waiting line Pick-up online shopping and drop returns in less than a minute Convenient Automated lockers to pick-up your online goods and drop your returns Easy-to-use A user-friendly screen and easy steps to collect and return your goods Secured Electronic lockers, alarm and security camera to ensure goods Film Packcity 110

111 offer 2 main offers Exclusive Lockers With commitment 1. Exclusive use of lockers 2. Monthly billing per locker 3. Customer pays 100% of locker price, whether used or not 4. Customer could decide terminal configuration (column types,...) 5. Customer takes the risk of not filling the lockers 6. Customer can propose a location to place the new terminal Shared Lockers Without commitment 1. Shared use of lockers 2. Billing per parcel 3. Customer pays locker on demand: price is defined per day and per season (yield management ) 4. Terminal configuration is decided by the Packcity JV 5. The Packcity JV takes the risk of not filling the terminal, so price is higher than exclusive lockers Services provided through Packcity: Online order delivery, Click & Collect, Conciergerie 111

112 Packcity Operator Target markets and usage 112

113 agreement 1. Two JVs between Neopost-GeoPost: Packcity France: Open network for all carriers and retailers (Click & Collect, conciergerie) Packcity GeoPost: Operating exclusively parcel lockers of GeoPost Majority and management: Neopost 2. Packcity sourcing hardware (via Keba), software and Services from Neopost 3. Geopost committed to install 1,000 parcels lockers by 2016 (Packcity GeoPost) 4. A global network of 3,000 parcel lockers in the long term 5. A total investment of 50m (2/3 Neopost, 1/3 GeoPost) 6. Estimated sales by : 20 to 30m 7. EBIT potential by : 15% 113

114 in France 40 parcel lockers at our partners: 95 parcel lockers already installed in SNCF and RATP train station in Paris and suburb 100 installed by the end of January 2015 Relais Colis has partnership with major players: With Mondial Relay Full list available on Close to 150 parcel lockers will be already installed by the end of January

115 activities 2014: 14,485 delivered parcels and 1,055 returns Average elapsed time to pick-up the parcel: 1.01 day and 0.47 at SNCF terminals Decathlon Paris Cnit La Défense 115

116 global potential USA 3 main markets will be launched in 2015: Residentials Universities Corporate Brazil Pilot phase: 6 machines have been installed in July

117 RFID solutions Case study: French Army General Headquarters (DGA) Neopost Cap Gemini - BearingPoint consortium selected by the French Ministry of Defence to implement the SILRIA IT system SILRIA: a solution to ensure the optimisation and traceability of each stage of the French armed forces transportation flows all over the world, particularly in foreign theatres of operation Neopost provides: identification and traceability solutions, from the RFID reader gates for ground lorries with portable readers to bar code printers and RFID tag encoders Successful RFID pilot initiated in 2013 Deployment has started in H m contract. 4m have been already recognised ( 1m in 2013, 3m in 2014) Neopost recognised as an expert in the RFID technology Promising contact with other NATO armies and suppliers (pilots are running in Europe) 117

118 Neopost ambitions Buyer 3 Shipper 1 Carrier / Operator Recipient 2 order pack ship collect accept, sort & route Deliver Collect /receive return Delivery time CVP-500 ProShip Parcel lockers Trust in shippment Cost of shippment Define the appropriate business/ distribution model Cover larger packing needs Compliance control and landing costs calculation for international trading Maintain strong position acquired with key players Continue installation in France International development Set up solution for e-commerce players 118

119 Neopost shipping key messages Market growth (CAGR at 2 digits on e-commerce) Value chain showing how Neopost has a unique position to manage shipping without having to handle a parcel (and not competing with the main actors) Competitive in terms of each position where we are active We are getting organized to grow We are building leadership Be for PARCEL what NEOPOST is for MAIL THE FACILITATOR 119

120 Enterprise Digital Solutions Henri DURA Chief Operating Officer Enterprise Digital Solutions

121 Positioning Neopost for the Future Integrated Operations CSS Dedicated Units MS/CSS Shipping Enterprise Digital Solutions New Projects Clem Garvey Dennis LeStrange Europe, APAC, Export USA, Canada Alain Férard Shipping Solutions Henri Dura Enterprise Digital Solutions Nikolaus Scholz New Projects 121

122 Enterprise Digital Solutions Focus 122

123 CCM - Market Definition / Description Customer communications management (CCM) is a strategy and a market fulfilled by applications that improve the creation, delivery, storage and retrieval of outbound and interactive communications. CCM supports the production of individualized customer messages, marketing collateral, new product introductions and transaction documents. CCM software is a set of software components for composing, personalizing and formatting content (acquired from various sources) into targeted and relevant electronic and physical communications between an enterprise and its customers, prospective customers and business partners. CCM software enables customer interactions through a wide range of media including mobile, , SMS, Web pages and print. The CCM market has evolved from the convergence of document generation/composition and output management technologies. CCM solutions today include the core elements of a design tool, a composition engine, a workflow/rule engine and multichannel output management. Vendors are providing new delivery models, such as cloud SaaS, and incorporating social and mobile features into their product road maps. We estimate that CCM software was an $1070-million market in 2013, based on total software revenue worldwide. It is forecast to grow at a five-year compound annual growth rate of approximately 10-11%. 123

124 DQ - Market Definition / Description (1/2) Data quality assurance is a discipline that focuses on ensuring data is fit for use in business processes. These processes range from those used in core operations to those required by analytics and for decision making, regulatory compliance, and engagement and interaction with external entities This market includes vendors that offer stand-alone software products to address the core functional requirements of the discipline, which are: Data profiling and data quality measurement: the analysis of data to capture statistics (metadata) that provide insight into the quality of data and help to identify data quality issues. Parsing and standardization: The decomposition of text fields into component parts and the formatting of values into consistent layouts, based on industry standards, local standards (for example, postal authority standards for address data), user-defined business rules, and knowledge bases of values and patterns. 124

125 DQ - Market Definition / Description (2/2) Generalized "cleansing": The modification of data values to meet domain restrictions, integrity constraints or other business rules that define when the quality of data is sufficient for an organization. Matching: The identifying, linking or merging of related entries within or across sets of data. Monitoring: The deployment of controls to ensure that data continues to conform to business rules that define data quality for an organization. Issue resolution and workflow: The identification, quarantining, escalation and resolution of data quality issues through processes and interfaces that enable collaboration with key roles, such as data steward. Enrichment: The enhancement of the value of internally held data by appending related attributes from external sources (for example, consumer demographic attributes and geographic descriptors). 125

126 Gartner Magic Quadrant for CCM (Nov 2014) Strengths: Good market understanding, robust product strategy, deep geographic penetration. Leading with interactive and multichannel offerings. Ability to execute on its offering and customer installations exceptionally well. One of the strongest customer experience ratings among users surveyed for the Magic Quadrant. Cautions: GMC's overall viability, and in particular our assessment of the likelihood that Neopost will continue investing in the product and will advance the state of the art of the portfolio of products, is about average for the providers in this Magic Quadrant. 126

127 Gartner Magic Quadrant for DQ (Nov 2014) Strengths: Deep experience of customer/party data issues Strong results from growth strategy: acquiring companies HI, Satori Software and DMTI Spatial, with customer-centric data management leading to further opportunities in the MDM / analytics areas. Adoption of alternative delivery models: SaaS and cloud-based deployments have seen strong adoption by Neopost reference customers Product support: Reference customers reported high levels of satisfaction Cautions: Deep experience of customer/party data issues Limited support beyond customer/party domains Limited mind share and market presence Longer time-to-value mainly due to installation issues and product upgrades Pricing and cost are seen as in need of improvement 127

128 EDS Footprint EDS presence EDS Offices GMC (23) Satori (2) HI (4) DMTI (1) 128

129 EDS Strategy & Positioning Customer Engagement - Customer Experience Who you are communicating with. Identify my customers within different data sources. Trustworthy data. Correct and append if needed Enrich with external data Merge into one golden customer profile Know DQ CCM Other applications Reporting and analyses Improve your processes Improve your customer profile Compare Analyze Golden Customer Record Understand and analyze Do I want to do business with this customer? Is this a risk or an opportunity What is relevant for him Can I find look a likes Deliver a highly relevant, personalized message. Deliver the message on the most relevant channel at right place. Save cost delivering it in the most efficient way. Reduce handling and correction cost. Communicate Create and manage campaign Feedback Customer Engagement Customer Experience Customer Journey 129

130 Case example Know : Correct / merge customer data EDS entity Know Customer Kitchen appliances reseller, US Customer was struggling to maintain its CRM data quality Analyze Communicate Golden Customer Record Understand and analyze Create and manage campaign Client situation Benefits 2,000 addresses are collected everyday, at different stages of customer journey: when asking for information, ordering, and registering products, generating a mismatch A unique customer identification was created; Satori solution enabled putting all addresses in correct form and eliminate database duplicates 130

131 Case example Understand and Analyze : Customer opportunity assessment EDS entity Know Customer Major Canadian Natural gas provider Analyze Golden Customer Record Understand and analyze Client situation Uniongas was looking to further promote Union Gas solutions to additional eligible customers with a focused marketing effort Union Gas was looking for key data on potential customers, including visualizing location, property characteristics, as well as estimated income Communicate Create and manage campaign Benefits Thanks to DMTI solution, response rate from potential customers have been brought from 1% to 4% and even 8% in some areas 131

132 Case example communicate : Deliver appropriate message to key customer EDS entity Know Customer Analyze Golden Customer Record Understand and analyze Client situation BAG (Business Advantage Group) is an integrated communication services provider in Mexico BAG was looking for a solution that could help leveraging customer insight for relevant and effective communication Communicate Create and manage campaign Benefits BAG is now able to deliver completely personalized campaigns for VW bank being sent to customers with good credit history, classified as not risky, and finishing their credit Inspire enables multi channel and response tracking 132

133 Case example Analyze : Improve your customer profile EDS entity Know Customer Care insurer in Netherlands Analyze Golden Customer Record Understand and analyze Client situation 4.5 millions of records on three different systems, with update of databases to be replicated manually from one system to another Communicate Create and manage campaign Benefits Achmea is able to serve its customers with a single customer view Customer relationship database is kept optimally up to date 133

134 CCM and DQ Vision From: CCM offer and fragmented DQ positioning To: Consolidated DQ positioning Leader in quadrant + An un paralleled CCM offer N 1 in Quadrant And A presence in new quadrants: Customer Experience Customer Engagement Customer Journey 134

135 CCM Vision CCM VISION Become n 1 (Market, Analyst reports) and Enter a new wave / quadrant Maintain leadership in CCM and enter a new wave / quadrant Maintain innovation and technical leadership Attract ecosystem partners Attract talents Provide unmatched customer support 135

136 Inspire future releases will take us to a new wave / quadrant CCM VISION Cross-channel marketing platforms Web analytics Customer interaction The Forrester Wave : Enterprise Marketing Software Suite Gartner Magic Quadrant for the CRM Customer Engagement Center Projects for self-service, mobile, social engagement and real-time analytics. Cross channel data integration capabilities Real time analytics The Forrester Wave : Real-Time Interaction Management The Forrester Wave : Digital Experience Delivery Service Providing personalized experiences across channels 136

137 Verticalisation strategy has been successful in the past 2 years at GMC % growth 60 GMC Inspire revenues growth by vertical ( ) 57% PSP 1 Entreprise FSI % 28% 28% % 0% 12/13 13/14² Note: 1 Print Service Providers; 2 Based on 11 months YTD; excludes some unallocated revenues 137

138 GMC has acquired key customers in bank and insurance, while it is still a leader in PSPs Banks Insurance PSPs 138

139 Data Quality Vision DQ VISION Strategic: Unify the offer and build a «differentiated» value proposition combining the different «know-how». Be recognized as a leader by Analysts Operational: Optimize technological platforms Rationalize the support functions (shared services) 139

140 Data Quality Unified Offer DQ VISION Know DQ CCM Other applications Analyze Golden Customer Record Understand and analyze Communicate Create and manage campaign Feedback 140

141 In order to help our customers to leverage the power of Data DQ VISION Behavioral Data Social Media Data Suppression Data Enterprise Data Master Data Customer Profile Data quality is actually more important in the world of big data. Ted Friedman, VP, Gartner 141

142 The combination of the 3 companies offer can bring an unprecedented level of Data Quality DQ VISION Enabling companies to create operational efficiency gains, customer retention and acquisition 142

143 Business Impact of an Increasing Data Quality DQ VISION Orchestrated workflows Automated decisions Efficiency Customer Retention & Acquisition 143

144 Synergies will be implemented within EDS, starting with shared services EDS synergies implementation Description Timing Increased commercial, marketing and R&D effort: Optimization of R&D resources Optimization of go-to market organization Common product vision / roadmap Enhance / consolidate Gartner relationship Rationalization of shared services: Finance HR Corporate Development 6-24 months 144

145 SME Digital Solutions Nikolaus SCHOLZ Chief Marketing and Strategy Officer

146 Positioning Neopost for the Future Integrated Operations CSS Dedicated Units MS/CSS Shipping Enterprise Digital Solutions New Projects Clem Garvey Dennis LeStrange Europe, APAC, Export USA, Canada Alain Férard Shipping Solutions Henri Dura Enterprise Digital Solutions Nikolaus Scholz New Projects 146

147 Neopost Opportunity Large Enterprises CSS DUs Shipping Enterprise Digital Medium Size NIO VAR OEM CSS DUs Shipping Enterprise Digital Partners SME/VSE NIO CSS DUs SME Digital Partners A p p s / S a a S / C l o u d 147

148 Investing to claim a relevant share in fast growing market 5m SMEs >50% of SMEs not digitized Transactions Document/SME Market Opportunity 3-5bn Adoption rate for value added services 148

149 3 key pillars of our SME SaaS solutions Portal & Platform Applications Go-To-Market 149

150 Saas Platform complex, powerful and highly scalable released H

151 Saas Platform Portal & Platform 2014 launched in H1 in the UK ongoing evolution (v1.2) Software Development Kit (SDK) for App integration successfully validated It is the common platform for delivering all Nepost branded SaaS offerings targeting SME with respective products & services (Apps) Status powerful and scalable platform ready to be leveraged for business and ready for app integration The foundation for our future business is ready in

152 3 key pillars of our SME SaaS solutions: Focus 2015 Portal & Platform Applications Go-To-Market 2014 launched in H1 in the UK ongoing evolution (v1.2) Software Development Kit (SDK) for App integration successfully validated 2015 Increase number of Apps Test & iterate fast 2015 Establish the right go to market Test & Iterate Fast Status powerful and scalable platform ready to be leveraged for business and ready for app integration 152

153 A variety of APPS & the right go to market 153

154 Mid Term Revenue Ambition Vision Mid Term 300k Users Ambition Short Term 50k customer 10-15m 70k Users 15% Paying Customers 15% 18 months 36 months 154

155 Investing to claim a relevant share in fast growing market Market Stage Relevant Market Volume Mature / H1 Market Opportunity 3-5bn Growth / H2 Innovation / H3 mid 2016 * Market share similar to GMCs positioning in the Enterprise market end t 155

156 Neopost Labs Philippe BOULANGER Chief Technology Officer

157 Evolution of R&D/Project practices Starting point: Mail is a mature industry with long cycles Time to deliver isn t much an issue As long as we can replace old with new within 5 years Evolution 1: Get timing back in control By isolating innovation projects to de-risk product projects Evolution 2: Optimization using best practices in software Using Agile & Hanoï R&D Centre Evolution 3: Focusing on incremental innovation New projects: By reusing the maximum of existing proven parts / modules Outcome: Reduced time to market (6 months for DS63 vs 7 years for DS65) Reduced R&D costs Improved remanufacturability Improved reliability 157

158 Evolution of R&D practices Historic project cycles of our mature market: 3 to 7 years Marketing specifies R&D Develops &Industry Builds NIOs launch, sell & support Our success of the past in a mature market could make us believe we will succeed in our digital transformation, using the same way of working However, we are facing very different parameters in the Digital world. 158

159 What are the Key Parameters of the Digital World? Exponential Technology It s more and more easy to create a new set of apps and to test new business models Disruption: part of newcomers basic vocabulary. Old business models and industries are easy targets Comes with velocity, adaptability & uncertainty 159

160 What is Happening in the Industry? A clear recognition that established corporations are outsmarted by external creativity Too few individuals are allowed to innovate: the focus is usually to optimize the bottomline and historic business activities Internal innovation is not better than external one, and is usually not allowed to disrupt A common practice from startups to large corporations is to embrace the experiment based culture GE has trained more than 6,000 people* to Lean Startup methodology and hundreds of projects are experiencing linked benefits. Intuit spends 10% of resources on Lean Startup based innovation All startups are trained with Lean Startup, Effectuation, Growth Hacking, Business Model Canvas. Stanford University has a specific course Open Innovation uptrend While 40% of CAC40 are considering Open Innovation as a key direction, only 20% are active. (Source:BNP-Paribas/Navi Radjou) *Planned for end of

161 Neopost answer: Catching up on Open Innovation key parameters Startups Needs of Cash And Access to Market Neopost Needs of New Biz, DNA and Tech Neopost LABS Investors/Accelerators Needs of Valorization And Exit 161

162 Neopost LABS targets for next months Other firm s market Potential new market SME Digital Solutions Resources for Neopost LABS are multidisciplinary. 162

163 Targeting Startups in their lifecycle Concept Scalability Profitability Angels Seed capital Seed+, Series A Revenue «Valley of death» Time +++ Risk profile 163

164 Feeding the funnel: Interfacing the Startups Ecosystem Partnering with Accelerators Started with 2 French accelerators Next, extension to our local Neopost subs with accelerators in other countries Accessing the Deal Flow of key investors We are in the process of selecting a lead investor giving us access to a curated deal flow of opportunities Using existing govt initiatives BPI France knows 99% of French startups and all Intermediate-Sized Enterprises (ETI) and Large Companies Increasing our visibility of Industrial Partner and our credibility Through our website ( Through our participation to conferences, events, blogs, social networks 164

165 Executing Governance on Opportunities Feeding Filtering: Use Partner Fund JV Acquire (proposals) or SME Digital Solutions Investment Decision: Strategic & Investment Committee 165

166 Key Takeaways about Neopost Labs It allows to capture best practices and trends in Technologies Business models Go to market methods Ways of working It s a validated win/win/win setup between Neopost, startups and the investing community Fueling partnerships or acquisitions And last, it s a best in class activity supporting the transformation of Neopost 166

167 Conclusions and Q&A Denis THIERY Chairman and Chief Executive Officer

168 Leadership Ambition Shipping Physical Communication Digital Communication Market addressed by Neopost Growth rates $2-3bn* $3-4bn* $2-3bn* 10-12% -3% 10-12% Market share ambition 10-15% 30% 10-15% * Source: Neopost and Gartner estimates 168

169 Neopost in 5 years Revenue bn Minimum 35% of CSS in total sales Organic growth: +2% to +4% EBIT margin: 20% to 22% (trending to 22%) 169

170