LIMITATION OF LIABILITY

Transcription

1 2014 FULL-YEAR RESULTS April 2015

2 LIMITATION OF LIABILITY Forward-looking statement (Safe Harbour) This presentation contains forward-looking statements (made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995), which, by their nature, involve a degree of risk and uncertainty. Forward-looking statements represent the company s judgement regarding future events, and are based on currently available information. Consequently the company cannot guarantee their accuracy and their completeness. Actual results may differ materially from those the company anticipated due to a number of uncertainties, many of which the company is not aware of. For additional factors that may cause the company s actual results to differ materially from expectations and underlying assumptions, please refer to the reports filed by the company with the Autorité des Marchés Financiers (French financial markets authority - AMF). 2

3 AGENDA 2014 HIGHLIGHTS 2014 FINANCIAL STATEMENTS BUSINESS UPDATE OUTLOOK 3

4 STRATEGY RATIONALE Shipping Physical mail Digital communication Parcel management facilitator Mail facilitator, historical core business of the Group Digital transition facilitator Support customers in their changing needs Complementarity between Mail, Parcel and Digital Communication businesses 4

5 NEOPOST AMBITION Shipping Physical mail Digital Communication Neopost target market $2-3 bn* $3 4bn* $2 3bn* Annual growth % -3% % Market share ambition 10 15% 30% 10-15% High potential of Shipping and Digital Communication businesses Catalysts for transforming the Group * Source : Neopost and Gartner estimates 5

6 2014 KEY FACTS Mail Solutions Communication & Shipping Solutions Further decrease in recurring revenues Rentals Supplies High base of comparison Exceptional items No postal rate change in the USA in January 2015 Some big deals pushed to 2015 Further new product launches IN range of mailing systems in Germany New DS-90i folder/inserter worldwide New DS-150/180i folder/inserter worldwide New DS-1200 G3 folder/inserter worldwide Outperformed the industry Acceleration in CSS organic sales growth especially within the NIO network (+23.8% in Q4) Success of GMC notably in the financial services industry (+43%) Success of VAR* programs Launch of OMS-500 Deployment of Packcity Close to 150 parcel lockers installed Deployment of the RFID contract for the French Army Promising acquisition of ProShip +17% organic growth in 2014 Combination of CCM + DQ activities Integrated offer & top line synergies A difficult year in Mail Solutions Very strong growth in CSS * VAR: Value Added Reseller 6

7 TRANSFORMATION IN PROGRESS 2011 Total sales: 1.0 billion Communication & Shipping Solutions 8% 2014 Total sales: 1.1 billion Communication & Shipping Solutions 21% Mail Solutions 92% Mail Solutions 79% 7

8 STRATEGY AT WORK 2014 organic sales growth Neopost Integrated Operations (NIO) CSS Dedicated Units Total 25% 20% CSS organic growth* 15% Mail Solutions -3.4% % 10% Communication & Shipping Solutions (CSS) +19.0% +10.8% +14.2% Total -1.2% +10.8% -0.2% 5% 0% Q Q Q Q Strong organic growth in CSS notably within the NIO network Acceleration throughout the year * Quarterly change compared to the same period the year before 8

9 AGENDA 2014 HIGHLIGTS 2014 FINANCIAL STATEMENTS BUSINESS UPDATE OUTLOOK 9

10 2014 SALES Change in sales (in millions) 1, ,113 Growth: +1.6% Growth excluding currency effects: +1.1% Scope effect: +1.3% Organic growth: -0.2% 2013 Scope effect* Organic growth Change effect 2014 Growth of 1.6% thanks to positive scope and currency effects * Impact of acquisitions: 14.2m on 2013 sales for DMTI Spatial, ProShip and DCS 10

11 2014 SALES BY BUSINESS LINES FY 2014/2013 * 2014 sales : 1,113m Mail Solutions Communication & Shipping Solutions 21% Communication & Shipping Solutions Organic growth: +14.2% Total growth excl. currency effects Organic growth: -0.2% Mail Solutions 79% Strong growth in CSS offsetting the decline in Mail Solutions * Excluding currency impact 11

12 2014 SALES BY REGION FY 2014/2013 * 2014 sales : 1,113m North America +1.9% Asia Pacific 6% Europe +0.8% o/w France -2.7% Asia Pacific -0.5% North America 40% Total growth excl. currency effects +1.1% Europe 54% Growth in North America and in Europe * Excluding currency impact 12

13 2014 SALES BY REVENUE TYPE FY 2014/2013 * 2014 sales : 1,113m Sales of equipment & licenses +5.3% Sales of equipment & licenses 34% Recurring revenues -1.0% Total growth excl. currency effects +1.1% Recurring revenues 66% Strong growth in equipment & license sales Decline in recurring revenues in Mail Solutions * Excluding currency impact 13

14 CURRENT OPERATING INCOME In million Sales 1,096 1,113 Gross margin % of sales 76.5% 76.0% EBITDA % of sales 30.2% 28.5% Current operating income (before acquisition-related costs) % of sales 24.0% 22.0% High level of EBITDA maintained, EBIT margin reflecting, as anticipated, the ongoing transformation of the Group /$ 2014 = 1.31 and 2013 = 1.33; / 2014 = 0.80 and 2013 =

15 CURRENT OPERATING MARGIN BY SEGMENT In million NIO CSS DU TOTAL NIO CSS DU Eliminations Eliminations TOTAL Mail Solutions Communication & Shipping Solutions Total Sales 1, ,096 1, ,113 Current operating margin (excluding acquisition-related costs) 24.8% 12.2% 24.0% 23,1% 10,1% 22.0% Including 3 months of DMTI Spatial Including 12 months of DMTI Spatial and 9 months of ProShip and 9 months of DCS Impact of mix effects and expenses related to new projects /$ 2014 = 1.31 and 2013 = 1.33; / 2014 = 0.80 and 2013 =

16 OPERATING INCOME In million Current operating income (before acquisition-related costs) Acquisition-related costs Current operating income Acquisition-related income 15 - Optimization expenses & others Operating income Non-current items mostly linked to the ongoing transformation /$ 2014 = 1.31 and 2013 = 1.33; / 2014 = 0.80 and 2013 =

17 NON-CURRENT ITEMS Re-negociation of GMC acquisition agreement Non-taxable income related to the settlement of the earn-out payment Provision related to structure optimization Supply Chain : remanufacturing & reengineering of production flows between Asia and Europe Continued tuning of distribution networks Provision related to further structure optimization USA Germany Termination of 2 pilots Sendeasy in Germany Delivery Preference Manager in the US Fiscal adjustment in the UK 17

18 NET INCOME In million Operating income Cost of debt Currency gains and losses and other -1 0 Net financial income/(expense) Taxes Income from associated companies 0 1 Net attributable income Net margin as a % of sales 15.0% 12.0% EPS Fully diluted EPS * Higher cost of debt due to higher debt and temporary carrying costs /$ 2014 = 1.31 and 2013 = 1.33; / 2014 = 0.80 and 2013 = 0.85 * Fully diluted EPS restated from the repayment of the Convertible Bond on 1 February

19 CASH FLOW GENERATION Change relative to 31 January, in million EBITDA Other items Cash flow* Change in WCR Change in lease receivables Interest and income tax paid Cash flow from operations Capital expenditure Acquisitions Cash flow after capital expenditure High level of cash flow maintained * Before cost of net debt and tax /$ 2014 = 1.31 and 2013 = 1.33; / 2014 = 0.80 and 2013 =

20 FINANCIAL STRUCTURE In million 31/01/ /01/2014 Restated* 31/01/2015 Financial debt 995 1,057 1,366 Cash and marketable securities Net financial debt Shareholders equity Net debt / shareholders' equity 105% 113% 118% Net debt / EBITDA ratio Covenants : minimum 525M of shareholders equity and leverage ratio below 3.25 Balance sheet reflects position just before repayment of the convertible bond (1 February 2015) Restated from the impact of the interim dividend paid in February 2014 /$ 2014 = 1.13 and 2013 = 1.35; / 2014 = 0.75 and 2013 =

21 DEBT SCHEDULE AFTER REDEMPTION OF THE CONVERTIBLE BOND* USD 23% EUR 77% USPP $US90 million Public Bond 2.5% Revolving facility Bond 3.5% Schuldschein in French Private Placements USPP $US175 million USPP $US50 million 2014 refinancing : longer maturity and reduced cost of debt * The 300 million convertible bond (OCEANE) was repaid on 1 st February

22 RE-NEGOTIATION OF COVENANTS UNDERWAY Covenants dating back 2007 are no longer adapted to the current weight of leasing activities: Leasing portfolio: 781m in 2014 vs. 425m in 2007 Renegotiation of covenants done for the revolving facility Leasing operations treated separately Maximum drawing: 90% of outstanding leasing portfolio Non-leasing debt Maximum leverage of 3.0* Minimum equity: 600m Minimum interest cover**: 4.0 Process underway for all other credit lines (USPP & French PP) Adaptation of covenants to better reflect Neopost profile *Net debt excluding leasing/ EBITDA excluding leasing **EBITDA/ net cost of debt 22

23 2014 DIVIDEND * Final dividend 2.10 EPS Dividend (100% in cash) Interim dividend Pay-out ratio: 82% 100% Dividend maintained in absolute value representing a yield of 7.6%** * Final dividend to be approved by the shareholders at the AGM to be held on 1 st July 2015 ** Based on share price as of 27 March

24 AGENDA 2014 HIGHLIGTS 2014 FINANCIAL STATEMENTS BUSINESS UPDATE OUTLOOK 24

25 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 25 /year 20-22% Sales: 1.4 to 1.5 bn** by * Calculated on sales including intercos **Projection initially based on the following exchange rates: /USD 1.25 and /GBP

26 ENTERPRISE DIGITAL SOLUTIONS (EDS) NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects CUSTOMER TYPE Dedicated Digital Communication Units: Customer Communications Management (CCM) + Data Quality (DQ) Large Accounts, PSPs Direct sales by EDS subsidiaries Software platform for production and multichannel customer communications Mid size companies SMEs/VSEs EDS solutions distributed by NIO (1) under VAR (2) or OEM (3) agreements SMB Cloud/SaaS solutions developed by EDS and distributed by NIO Customer data and address quality Customer data management Geo-localized data management (1) NIO : Neopost Integrated Operations (Neopost network) ; (2) VAR : Value Added Reseller ; (3) OEM : Original Equipment Manufacturer 26

27 EDS: BUSINESS UPDATE ON CCM* NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects Successful development of GMC Strong growth in vertical markets: banking and insurance (FSI) and others (Enterprise) Print Service Providers (PSP) market share maintained at 60% GMC Revenue Trend ( ) CHFm** Acquisition: 2012 CAGR (11-14) +22.0% 74 Index 100 in * CCM: Customer Communication Management ** CHF converted at avg exchange rate over each period 27

28 EDS OFFERING RATIONALE NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects Quality of addressing, customer data and geolocalized data Know Quality of customer data and geolocalized data Analyze Golden Customer record Understand & analyze Quality of addressing, customer data and geolocalized data Communicate Create and Manage Marketing Campaigns Feedback Data quality CCM Other applications Management of customer communications * Golden Customer Record Solution fit and customer synergies 28

29 SHIPPING SOLUTIONS NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects CUSTOMER TYPE Dedicated Shipping Units Large Accounts, Postal Organizations, Carriers, Logistics Companies Direct sales by Neopost Shipping OSS RFID Mid size companies Shipping solutions distributed by NIO (1) under a VAR (2) agreement SMEs/VSEs Solutions for SMEs and VSEs (1) NIO : Neopost Integrated Operations (Neopost network) ; (2) VAR : Value Added Reseller 29

30 SHIPPING SOLUTIONS NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects Buyer Shipper Carrier/Operator Recipient sort and collect / order pack ship collect deliver return route receive CVP-500 Automated parcel lockers for pick-up / drop off Online Shipping Stations (OSS) Multi-carrier tracking software/rfid Mobile tracking solutions Neopost, the only player in the market to cover the logistics chain endto-end. Ideally positioned to benefit from the e-commerce boom 30

31 E-COMMERCE SOLUTIONS: PROJECT TO TAKE A CONTROLLING INTEREST IN TEMANDO Project of acquisition of a controlling interest in Temando Australian company supplying intelligent solutions to players in the e-commerce and logistics sectors NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects Neopost investment could take the form of a combination of existing and new shares The cash injection will be used to finance product development and geographic expansion Software platform dedicated to managing online order processing Handles the entire chain from shopping cart to delivery, plus product returns Easy integration with e-commerce platforms such as Magento and IBM 50,000 users Completes Neopost Shipping's current offering Processing capability several thousand shipments a day Processing capability several hundred thousand shipments a day Online Shipping Stations (OSS) Bespoke solutions for carriers 31

32 TEMANDO'S INTELLIGENT PROCESSING PLATFORM NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects Efficient tools providing end-to-end control of the order management chain Premium service level for delivery and returns management Efficient multi-carrier quoting and booking engine Unify inventory across multiple locations Consumers can be exactly located Displays of all delivery and returns options Transportation cost optimization based on stock and recipient locations Reliable prediction of courier speed Compliance controls and calculation of full landed shipping cost E-retailer benefits Transforms shipping management into a competitive advantage Reduces transportation costs and increases conversion rates Boosts service quality and contributes to increased online sales 32

33 PROSHIP BUSINESS UPDATE NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects ProShip, multi-carrier parcel shipping software solutions provider acquired in May 2014 Among the Top 5 in the American market 2014 sales growth of 17% The most successful software on the market (capable of handling several million parcels per day) Major carrier certification: FedEx ("Diamond Elite" status), UPS, DHL, USPS Used by major players in traditional and e-commerce, logistics companies, pharmaceutical distributors (avg 50,000 parcels/day; max > 1 million parcels/day) VAR* program already launched with Neopost USA: 7 contracts signed in 2014 Cornerstone of Neopost Shipping Solutions strategy in the US * VAR : Value Added Reseller 33

34 PACKCITY BUSINESS UPDATE NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects France International 2 partners More than 150 parcel lockers installed 100 at SNCF and RATP stations in Paris and Paris region Over 40 installed with major players in retail and commercial real estate USA 3 market segments set to be launched in 2015 Residential University Enterprise Brazil Pilot project 6 lockers installed in July 2014 in partnership with Concierge service for large enterprises 34

35 NEOPOST INTEGRATED OPERATIONS (NIO) NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects CUSTOMER TYPE N I O network Large Accounts Mid size companies SMEs/VSEs Mail Solutions EDS and Shipping solutions distributed under a VAR (1) or OEM (2) agreements Cloud/SaaS solutions developed by EDS and Neopost Shipping (1) VAR : Value Added Reseller; (2) OEM : Other Equipment Manufacturer 35

36 NIO STRATEGY NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects Maximize resilience of Mail Solutions business Outpace the industry by continuing to gain market shares particularly in North America Continue developing cross-sales of franking machines and folders/inserters Accelerate growth of CSS businesses Provide NIO customers with solutions developed by dedicated units or other partners Continue developing VAR programs Launch OEM programs Provide a Cloud/SaaS offering for SMEs/VSEs Generate high growth in CSS to, at least, compensate for the decline in Mail Solutions and maintain a high EBIT margin 36

37 SUCCESS OF VAR* PROGRAMS NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects Customer Communication Management GMC Inspire: global customer communication solution VAR Programs + 22% in 2014 sales versus 2013 Data Quality Solutions developped by Satori VAR Programs + 10% in 2014 sales versus 2013 Shipping Solutions Solutions developped by ProShip 7 contracts already signed in 2014 Validates the Group's ability to capitalize on its distribution network and customer base * VAR : Value Added Reseller 37

38 DYNAMISM OF OEM PROGRAMS NIO CSS Dedicated Units MS/CSS Shipping EDS New Projects OMS-500 : Centralized document management and production automation system for mail and distribution 1 st application developed by a dedicated unit (GMC) for Neopost's traditional customer base Powerful and easy to use (processes up to 10,000 documents per minute) Global launch in 2015 Solution named "Product of the year" by Postmaster Magazin in Germany and Editor's Choice by Print.it in the UK Shipping Solutions : For the US market: sales growth >20% 2013/

39 SME/VSE OFFERING: NEOSHIP IN THE USA NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects Compliant with USPS standards (Intelligent Mail package barcode IMpb) Franking value of a parcel = 10x that of a letter Use of franking machine discounted tariffs User-friendly Simplifies collection and franking for USPS Boosts customer loyalty and acquisition Helps to develop Neopost's franking financing business Use of franking machines for parcels 39

40 ROLL-OUT OF DIGITAL MAIL OFFERING NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects Success of Neotouch, hybrid mail pilot solution launched in France Esker solution distributed by Neopost France under an OEM agreement Outgoing mail offering complements Neopost's physical mail solutions Commercial success: 500 customers, around 2/3 of contract terms > 3 years New agreement with Esker: creation of a joint venture to roll out a digital mail offering worldwide Esker software solutions for document distribution, and for processing and automation of customer and supplier invoicing Distributed to SME customers by the NIO network under an OEM agreement with France and the US as first priorities Company 70% Neopost /30% Esker, with full consolidation into Neopost accounts Extension of digital solutions offering aimed at SMEs 40

41 BUSINESS UPDATE: NEW PROJECTS NIO MS/CSS CSS Dedicated Units Shipping EDS New Projects Open Innovation Project Targets start-ups at proof of concept stage needing to prepare production phase Investment partnerships decision to invest 5m in a fund managed by Partech Ventures Opportunity related to supporting digital transformation of SMEs/VSEs with SaaS/cloud solutions Platform launched in the UK and the US CVP-500 Bespoke continuous packaging system permits 3D parcel size optimization Two operational prototypes: Doc Data in the Netherlands, one of the country's largest e-logistics companies, and Lasaulec Third machine being ordered Since January 2015 UPS and FedEx in the US have been billing parcels based on volume 10m annual expenses dedicated to new projects 41

42 AGENDA 2014 HIGHLIGTS 2014 FINANCIAL STATEMENTS BUSINESS UPDATE OUTLOOK 42

43 SHORT TERM OUTLOOK 2015 organic sales growth expected in the range of -1 to +2% 2015 current operating margin before acquisition-related expenses expected between 19.5% and 20.5% of sales Based on current exchange rates, significant upside potential expected in 2015 on the level of sales and results in absolute value 43

44 MID-TERM AMBITION IN SALES billion Communication & Shipping Solutions 21% billion* Communication & Shipping Solutions > 35% Mail Solutions 79% Mail Solutions <65% * Projection initially based on the following exchange rates: /USD 1.25 and /GBP

45 MID-TERM AMBITION IN PROFITABILITY EBIT margin 22% Worst case Best case Base case 20 to 22% 18% Horizon 45

46 FUTURE OPTIMIZATION PROGRAMS Shared services implementation in Europe & the USA Further optimization of distribution channels Further optimization of Supply Chain and R&D Estimated costs from 10m to 15m per year over the next 3 years with savings estimated between 20m and 30m per year from 2019 onward 46

47 RETURN TO SHAREHOLDER POLICY Maintain the dividend at a high level Possibility contemplated to propose an optional scrip dividend If necessary, temporarily adjustment of dividend policy to finance one significant acquisition or a series of smaller acquisitions made in a same given period Share buyback to cover dilution from long term incentive plans Strong return to shareholders 47

48 APPENDICES 48

49 CONSOLIDATED BALANCE SHEET (1/2) Assets ( millions) 31/01/ /01/2015 Goodwill 977 1,045 Intangible fixed assets Tangible fixed assets Non-current financial assets Other non-current receivables 2 3 Leasing receivables Deferred tax assets 10 9 Inventories Trade receivables Other current assets Financial securities Current financial instruments 0 6 TOTAL 2,579 3,042 49

50 CONSOLIDATED BALANCE SHEET (2/2) Liabilities ( millions) 31/01/ /01/2015 Shareholders equity Non-current provisions Non-current financial debt 908 1,007 Current financial debt Other non-current liabilities Deferred tax liabilities Non-current financial instruments 3 1 Prepaid income Other current liabilities Current financial instruments 0 1 TOTAL 2,579 3,042 50

51 2014 SALES BY CURRENCY 2014 GBP 10-12% Other* USD 37-40% EUR >40% * Other includes mainly AUD, CAD, CHF and Nordic currencies 51

52 FRANKING MACHINES Price in thousands IN-700 IS-6000 IN-600 IN-360 IS IS-280 IS-350 IS-420 IS-460 IS IS Volume envelopes per day envelopes per day Over 200 envelopes per day 52

53 FOLDERS/ INSERTERS Price in thousands 250 DS-1200 G DS DS-150/ DS-90 i DS DS DS DS DS Office Mailroom Mail center 53

54 GLOSSARY Mail Solutions: mailing systems, document systems (folder/inserters for offices, mailrooms, other mailroom equipment) and related services Communication & Shipping Solutions (CSS): customer communication management and data quality software, logistics solutions, document finishing and graphics solutions Neopost Integrated Operations: Neopost subsidiaries developing, producing and distributing Mail Solutions and CSS services to the Group's long-standing customers CSS Dedicated Units: entities distributing CSS solutions to large accounts: Enterprise Digital Solutions (GMC Software Technology, DMTI Spatial, Human Inference and Satori Software), Neopost Shipping Solutions (former Neopost ID and ProShip) 54