Francotyp-Postalia Holding AGBerlinFrancotyp Postalia Holding AG Quartalsmitteilung Q3 20193/2019 Quarterly reportKey FiguresFIGURES IN ACCORDANCE WITH CONSOLIDATED FINANCIAL STATEMENTS (in EUR thousand)scroll
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Adjusted for currency effects and JUMP expenses. FP with strong third quarter 2019 -Significant growth in earnings in the first nine months of 2019Total revenue in first nine months of 2019 comes to EUR 152.4 million compared with
EUR 154.3 million in same period of previous year Revenue in core business grows by 2.7% to EUR 98.3 million, including positive exchange-rate
effects of EUR 2.2 million Revenue in Software/Digital business posts double-digit increase of 16.1 % to EUR
12.9 million in first nine months of 2019 Revenue in Mail Services business rallies in third quarter of 2019; revenue in first
nine months of 2019 declines by -13.1 % to EUR 41.1 million and thus less significantly
than in first half of 2019 (decline ofl8.3%) EBITDA adjusted for positive currency effects and expenses for the ACT project JUMP
climbs by 19.9% to EUR 22.0 million Adjusted free cash flow increases substantially to EUR 7.0 million Forecast for 2019 as a whole confirmed Third Quarter 2019HIGHLIGHTSAUGUSTNew FP study shows that missing signatures are a "process killer" in day-to-day businessFP publishes a study on the digitalisation of document management at German companies.
One key finding was that at 66% of German companies, work processes are held up by
delays in getting signatures. However, using digital signatures can considerably speed
up business processes. One Solution for this is FP Sign, FP's secure digital signature
Solution that enables companies from all sectors to imple-ment efficient and binding
signature processes. The study was conducted by an independent market research institute
on behalf of FP. It surveyed a total of 1,004 employers, employees and self-employed
persons from 38 sectors on handling documents and signatures at their companies and
on digital signatures. SEPTEMBERFP Sign roadshowFP Sign tours Germany. In four major German cities, FP presented its secure electronic
signature Solution that companies can use to bring about a digital revolution in their
business processes - resulting in a better overview and efficiency, shorter and faster
paths to their customers, and reduced costs. New FP Sign users such as the Würth Group
reported on their positive experiences. The FP Sign roadshows were also supported
by the German printing Company Bundesdruckerei, with which the highest and most secure
level of digital signature, the qualified electronic signature (QES), is offered and
facilitated through FP Sign. OCTOBERFP wins SME awardFrancotyp-Postalia wins the 2019 Mittelstandspreis der Medien (SME Media Award) in
the "Digital Innovation" category. Explaining its choice, the jury cited the company's
exemplary approach to utilizing the digital revolution to reinvent itself and its
products. FP is the developer of a wide ränge of cryptographic solutions for high-security
transmission of digital data in the industrial sector, with innovations including
the e-signature Solution "FP Sign" and the FP Secure Gateways for the Industrial Internet
of Things (lloT). CDO Sven Meise accepted the award and thanked the entire FP team
for their commitment. NOVEMBERFP Sustainability Report 2018 wins award!The FP Sustainability Report 2018 entitled "ACT SUSTAINABLY - Vision and values in
accordance" is award-winning! The League of American Communications Professionals
(LACP) is of the same opinion and the report impressed the jury in two different catego-ries,
winning the 2019 Inspire Award Platinum for Excellence in Global Communications as
well as the Spotlight Award Platinum for Corporate Publishing. The FP Sustainability
Report thus ranks number ten worldwide of all reports that were submitted to the contest
this year. Submissions were rated on their key messages, overall impression, design, creativity
and understandability. In the Software/Digital segment, we achieved double-digit growth rates in the first
nine months of 2019. Our rollout of various new Software solutions in summer 2019
developed well. We have a well-filled project pipeline for our high-security gateways
for loT applications. We are confident that we will achieve further milestones and
continue our growth in the months ahead. Sven Meise, CDO/COO As expected, FP impressed with a strong third quarter 2019. We were thus able to increase
our earnings in the first nine months of 2010 significantly: Adjusted EBITDA grew
by almost 20% year-on-year. Although it will need our füll focus and despite the recent
deterioration of global economic sentiment, we are optimistic that we will achieve
our targets for 2019. Rüdiger Andreas Günther, CEO/CFO The sales launch for our new franking system, the innovative PostBase Vision, in the
US has got off to a good start. In our core business, we further increased our global
market share to 12% and generated revenue growth in the first nine months of 2019.
We intend to continue this positive trend in a targeted way with the sales launch
of the PostBase Vision on other core markets for FP over the Coming months. Patricius de Gruyter, CSO Overview of the first nine months 2019Overall Statement: FP impresses with a strong third quarter 2019FP impresses with a strong third quarter of 2019 and was able to almost completely
make up for the mixed first half of 2019 and to in-crease earnings significantly.
In the first nine months of 2019 the FP Group's revenue amounted to EUR 152.4 million
as against EUR 154.3 million in the same period of the previous year. In its core
business franking, FP increased its revenue against the market trend. The Software/Digital
Segment also continued to develop positively with a double-digit growth rate in the
period under review. The revenue decline in the Mail Services Segment in the first half of the year was
reduced in the third quarter of 2019. Overall, FP there-fore recorded a slight decrease
in revenue (-1.2%) for the first nine months of fiscal year 2019. Adjusted for currency
effects and expenses for the ACT project JUMP, EBITDA amounted to EUR 22.0 million
and was thus well above the comparable figure from the previous year of EUR 18.4 million
by 19.9%. The first nine months of fiscal year 2019 were still dominated by the consistent
implementa-tion of the ACT strategy and the ACT project JUMP. Expenses for JUMP totalled
EUR 2.4 million in the reporting period after EUR 1.4 million in the same period of
the previous year. Adjusted free cash flow amounted to EUR 7.0 million, against EUR
4.3 million in the same period of the previous year. Revenue in the core business with franking systems rose by 2.7% from EUR 95.8 million
in the equivalent period of the previous year to EUR 98.3 million in the first nine
months of 2019. This includes positive currency effects of EUR 2.2 million. Even without
currency effects, the FP Group put in another good Performance in its core business
in the reporting period, slightly increasing its revenue (by 0.3 %) in contrast to
the market trend and its competitors. FP's global market share has now increased to
12.0 %. The successful sales launch for the innovative new franking system PostBase Vision
in August 2019 accelerated revenue growth in the biggest foreign market, the US, in
the third quarter (adjusted for currency effects, revenue was up 4.1% compared to
the first nine months of 2018, as against 3.0% in the first half of 2019). The PostBase
Vision is the next-generation franking machine from FP's successful PostBase series
and sets new Standards in both design and functionality. On the home market of Germany,
the launch of the new franking system began in the fourth quarter of 2019, and other
core markets such as the UK and France are to follow before the end of fiscal year
2019 or at the start of 2020. The new franking system is poised to make a significant
contribution to further growth in the core business over the next few years as part
of the ACT strategy. In addition, consid-erably higher income in Service business
from fee-based Software Updates in connection with postage changes, particularly in
Germany, had a positive impact in the reporting period as compared to the same period
of the previous year. The Mail Services business regarding the collection, franking and consolidation of
business mail continued to decline in the first nine months of 2019. However, the
revenue decline from the first half of 2019 was slowed signifi-cantly in the third
quarter. In the first nine months of 2019, revenue in the Mail Services segment came
to EUR 41.1 million compared with EUR 47.3 million a year before. This corresponds
to a decrease of -13.1%. The decline in this business segment is still attrib-utable
to the clear focus on earnings-focused management of the business, changes in the
customer mix and a significant decrease in the mail volume. As expected, the increase
in postage fees by Deutsche Post as of 1 July 2019 had a positive impact on revenue
and earnings in the third quarter of 2019. Revenue in the Software/Digital product segment posted a double-digit increase of
16.1% to EUR 12.9 million in the first nine months of 2019. FP has continuously expanded
the ränge of services in this business area as part of the ACT strategy and is now
benefiting from this. For example, several new Software solutions and products were
launched inter-nationally in summer 2019, including the innovative electronic signature
Software FP Sign. The successful market launch and expan-sion of sales of the new
products were still the main focus in the third quarter of 2019. In August 2019, FP
Sign gained a major customer with around 70,000 employees. The FP Group also successfully
completed the integration of Tixi in the reporting period, thereby systemat-ically
expanding its applications and product solutions in the field of high-security gateways
for IoT applications, and has a well-filled project pipeline. In addition to Software
solutions such as FP Sign and applications in the IoT sector, hybrid mail services
also contributed to the dynamic growth of the new product area. FP is thus continuing to resolutely pursue its path of transformation based on its
ACT strategy. At the same time, the Company has a solid equity base as well as financial
flexibility and reserves on the basis of the existing syndi-cated loan agreement.
FP is continuing to in-vest in its core business in line with its ACT strategy and
is developing new digital products and business models from its core areas of expertise
in sensor technology, actuator technology, Connectivity and cryptography. Despite
some challenges, particularly in the Mail Services segment, FP is being realigned
across the Group as part of the ACT project JUMP. JUMP increases efficiency and estab-lishes
the organisational structures for future profitable growth of the FP Group. First-time application of IFRS 16 LeasesThe FP Group has applied the new Standard IFRS 16 Leases since 1 January 2019. As
a result, individual items of the opening Consolidated Statement of financial position
as at 1 January 2019 have been adjusted in relation to the Consolidated financial
statements as at 31 December 2018. In the opening Consolidated Statement of financial
position adjusted as at 1 January 2019, the first-time application of IFRS 16 for
operating leases resulted in an increase in assets and financial liabilities of EUR
12.0 million. The FP Group applied IFRS 16 for the first time using the modified retrospective method.
For this reason, the cumulative effect from the application of IFRS 16 was recognised
as an adjustment of the opening amounts as at 1 January 2019. Comparative information
is not restated. The FP Group used the convenience option to retain the definition of a lease when
making the transition. This means that the FP Group applies IFRS 16 to all contracts
concluded before 1 January 2019 and which are identi-fied as leases in accordance
with IAS 17 and IFRIC 4. Further information can be found in the re-port on the first half of 2019 (notes to
the Consolidated financial statements, Section I). Results of Operations: EBITDA up significantlyIn the first nine months of 2019, the FP Group generated EBITDA of EUR 20.7 million
as compared to EUR 17.0 million in the previous year's reporting period. This corresponds
to an increase of 21.7%. Currency effects of EUR 1.0 million had a positive effect.
EBITDA was also positively influenced in an amount of EUR 2.8 million by the first-time
application of the new Standard IFRS 16 Leases. By con-trast, EBITDA was reduced by
expenses for the ACT project JUMP of EUR 2.4 million (same period of previous year:
EUR 1.4 million). In the reporting period, JUMP generated recurring savings of some
Euro 1.5 million. Adjusted for positive currency effects and expenses for JUMP, EBITDA
amounted to EUR 22.0 million in the first nine months of 2019 and was thus well above
the adjsuted fig-ure from the previous year of EUR 18.4 million. The adjusted EBITDA
margin reached 14.7% (9M 2018: 11.9%). The cost of materials decreased in the first nine months of 2019 to EUR 74.7 million
against EUR 77.3 million in the same period of the previous year, mainly due to the
decline in revenue in the Mail Services business. As a re-sult, the cost of purchased
services decreased significantly year-on-year. By contrast, staff costs of EUR 45.8
million were almost at the previous year's level of EUR 45.9 million. Other expenses
increased to a total of EUR 27.5 million as against EUR 26.4 million in the previous
year and included expenses for Consulting services for the ACT project JUMP of EUR
2.1 million (9M 2018: EUR 0.9 million). Due to the changed recognition of lease expenses
in accordance with IFRS 16, other expenses in the first nine months of 2019 feil by
EUR 2.8 million compared with the same period of the previous year. Conversely, the
new Standard IFRS 16 resulted in a EUR 2.7 million increase in the FP Group's depreciation
and amortisa-tion. Primarily due to increased amortisation of intangible assets, there
was also an increase in amortisation, depreciation and write-downs to a total of EUR
16.3 million in the first nine months of 2019 as against EUR 12.8 million in the first
nine months of 2018. Earnings be-fore interest and taxes (EBIT) therefore totalled
EUR 4.4 million after EUR 4.2 million in the same period of the previous year. Based
on a slower business development and scaling than originally anticipated at the time
of ac-quisition, FP made an impairment on an Investment valued at equity (Juconn)
of EUR 0.9 million in the third quarter of 2019. Lower earnings before taxes that
were partially com-pensated by lower income taxes affected Consolidated net income
for the first nine months of 2019, which stood at EUR 2.6 million compared to EUR
3.2 million in the previous year. Earnings per share (EPS) reached 16 Cent compared
to 20 cents in the previous year. Without the impairment, Consolidated net income
and EPS would have been on previous year's level. Financial position and net assets: Positive free cash flow in first nine months of 2019The FP Group is pursuing a focused invest-ment strategy. With its modern product port-folio,
the FP Group is successful in all import-ant markets. The FP Group is investing in
future growth, and particularly in product development, on the basis of the ACT strategy.
At EUR 17.3 million, investment in the first nine months of 2019 was higher than in
the same period of the previous year (EUR 16.6 million). Cash outflows for investments were offset by cash inflows of EUR 18.0 million from
cash flow from operating activities in the first nine months of 2019. Free cash flow
thus improved to EUR 0.6 million, compared with EUR -2.7 million in the same period
of the previous year. Adjusted for investments in finance lease assets, M8cA and expenses
for the ACT project JUMP, the FP Group generated free cash flow of EUR 7.2 million
in the reporting period as against EUR 4.3 million in the same period of the previous
year. Positive cash flow from operating activities is an important funding source for the
FP Group. In addition, there are loan agreements with financial institutions and finance
leases that already existed or were adjusted during the year. The FP Group's financial liabilities rose to EUR 49.4 million as at 30 September 2019,
compared with EUR 39.3 million as at 31 De-cember 2018. This increase was mainly due
to the new Standard IFRS 16 and the first-time recognition of lease liabilities of
EUR 11.3 million. The FP Group's cash and cash equiva-lents feil to EUR 18.3 million
as at the end of the third quarter of 2019 (31 December 2018: EUR 21.1 million). The FP Group's net debt increased to EUR 31.2 million as at 30
September 2019, compared with EUR 18.1 million as at the end of fiscal year 2018. Risks and opportunitiesCompared with the risks and opportunities described in detail in the 2018 annual report
under "Risk and Opportunity Report". There have been no significant changes in the
period under review except for the valuation risk of an investment valued at equity. FP Group confirms forecast for fiscal year 2019The Company is confirming its forecast for fiscal year 2019. Based on the forecast
adjusted and published on 22 August 2019, FP expects revenue for the year as a whole
to be slightly higher than the previous year's level. Adjusted for expenses for the
ACT project JUMP, the Company still expects a strong year-on-year rise in EBITDA.
In light of further investments in ACT and in new products and services, FP anticipates
positive adjusted free cash flow significantly below the previous year's level in
2019 as a whole. The anticipated development of financial Performance indicators is
based on the assumption of constant exchange rates. CONSOLIDATED FINANCIAL STATEMENTSConsolidated Statement of Comprehensive Income for the Period from 1 January to 30 September 2019scroll
Consolidated Statement of Financial Position as at 30 September 2019ASSETSscroll
PASSIVAscroll
Consolidated Cash Flow Statement for the Period from 1 January to 30 September 2018scroll
Consolidated Statement of Changes in Equity for the Period from 1 January to 30 September 2019scroll
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Further InformationInformation about the CompanyThe listed and globally operating FP Group with headquarters in Berlin, Germany, is
an expert for secure mailing business and secure digital communication processes.
As market leader in Germany and Austria, the FP Group offers digital solutions as
well as products and services for the consolidation of business mail and the efficient
processing of mail for companies and authorities in the "Software", "Mail Services"
and "Fränking/Inserting" segments. The Group achieved revenue of more than EUR 200
million in 2018. Francotyp-Postalia has subsidiaries based in ten different countries
and is represented by its own trading network in an additio-nal 40 countries. With
a Company history spanning 96 years, FP possesses a unique DNA in the areas of actuating
elements, sensor systems, cryptography and Connectivity. FP's global market share
for franking systems is more than twelve percent. You can find out more at www.fp-francotyp.com. ImprintEditor and ContactFrancotyp-Postalia Holding AG Corporate Communications /Investor Relations Prenzlauer Promenade 28 13089 Berlin Germany Concept, design and productionGroothuis. Gesellschaft der Ideen und Passionen mbH für Kommunikation und Medien,
Marketing und Gestaltung scroll
FRANCOTYP-POSTALIA HOLDING AG Prenzlauer Promenade 28 13089 Berlin Telefon: +49 (0)30 220 660 410 E-Mail: ir@francotyp.com www.fp-francotyp.com |
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