<23> YEAR ENDED 31 JANUARY 2003 COMPARED WITH YEAR ENDED 31 JANUARY 2002 Highlights in the 2002 financial year were as follows:  good performance in Neopost’s traditional business areas; the first consolidation  of  Ascom  Hasler,  with  the  North  American business  consolidated  for  11  months  and  activities  outside North America for 8 months; and the consolidation of Stielow for 5 months.  Earnings grew strongly and Neopost Online’s operating losses were kept firmly under control.The integration of Ascom Hasler  is almost  complete,  and  the Stielow integration is going very well. Consolidated sales up 32.3% Neopost’s sales grew by 32.3% in 2002.On a pro forma basis and  constant  exchange  rates, sales grew  by  1.1%, or by 2.5% excluding Stielow. This performance is all the more remarkable since 2001 was a  particularly  busy  year,  due  to  the  additional  business resulting  from  euro  conversion  programmes  especially in France. North American  growth  boosted  by  the Ascom  Hasler acquisition The  Ascom  Hasler  acquisition  almost  doubled  Neopost’s market share in North America, and sales in this market grew by 42.1%,despite the dollar falling by almost 8% against the euro. On a pro forma basis and at constant exchange rates, sales were flat, although there was organic growth of 2.8% in the fourth quarter due to the successful launch of the new IJ 35/45 franking machines.The IJ 35/45 machines were not yet available for the Ascom Hasler network. Weak growth in France, as expected Sales grew by 0.9% in France in 2002.This was a reasonable performance, given that the euro conversion programme had boosted sales by euro 9 million in 2001.  Another source of satisfaction  was  the  2.5%  growth  in  fourth-quarter  sales, resulting from the company’s strong commercial impetus.This is  encouraging  at  a  time  when  the  new  IJ  35/45  franking machines  have  just  been  launched  and  when  new  services, currently undergoing trials with the French postal service,look set to boost growth in the small franking machine market. Very strong growth in the UK As   a   result   of   the   Ascom   Hasler   acquisition   and   the decertification of mechanical franking machines,  Neopost’s UK sales grew by 42.1% in 2002.Pro forma sales growth was 17.8% at constant exchange rates,  making 2002 the third consecutive year of double-digit growth in this market.Despite the decertification programme ending in October,  pro forma growth remained positive in the fourth quarter, at 2.0%. A solid base in Germany The  Ascom  Hasler  and  Stielow  acquisitions  mean  that Neopost now directly controls more than 20% of Germany’s installed base of franking machines, and has consolidated its leading position in the folder / inserter market, with market share  of  over  50%.  The  German  market  was  very  strong in 2001 due to the euro conversion programme. The end of this  programme  and  the  weak  economy  led  to  a  4.2% pro forma decline in sales. Stronger positions in the rest of the world As a result of the Ascom Hasler and Stielow deals, Neopost has increased market share in Italy, the Netherlands, Belgium and export markets, and has developed its direct presence in Japan  and  in  Austria.  Pro  forma  growth  was  only  3.5%, however, since 2001 business levels had been boosted by the euro conversion in Italy, Belgium and the Netherlands. Reorganisation of Stielow underway Neopost  has  consolidated  Stielow  since  1  September  2002. Stielow generated sales of euro 27.9 million during the period,in line with Neopost’s forecasts. Neopost’s development strategy means   that   it   will   eventually   retain   only   Stielow’s   mail processing business (franking machines,folders / inserters,openers / extractors), which accounts for around two thirds of Stielow’s sales. Neopost plans to sell the non-strategic part of Stielow’s business  —  i.e.  the  print  finishing,  label  printing  and  parcel preparation activities — in 2003.These activities generated euro 6.9 million of sales for Neopost in the fourth quarter of 2002, euro 11.0 million in the five months during which Stielow was consolidated in 2002 and euro 26.2 million on a pro forma basis in full-year 2002. Recent  acquisitions  do  not  substantially  change  the breakdown of sales by business, nor the proportion of recurring revenues On the basis of 2002 pro forma accounts,68.4% of Neopost’s sales came from Mailing Systems and 31.6% from Document Systems.Ascom Hasler’s weak presence in Document Systems was offset by Stielow’s strong position in this business. Recurring  revenues  (rental,  leasing,  maintenance,  support and consumables) accounted for 58% of Neopost’s sales on a pro forma basis. Management discussion and analysis