Operating losses under control at Neopost Online
In January 2003, Neopost decided to wind down its Simply
Postage business. The 20 000 Neopost Online customers are
being given the opportunity to switch to traditional products
such as the IJ 25.Neopost Online made an operating loss of just
under dollar 8 million in 2002, in addition to dollar about
5 million of asset write-downs and a dollar 1 million provision
for the expected cost of winding down the service in 2003.
Overall, the loss resulting from Neopost Online totalled euro
13.5 million in 2002,to be compared with euro 39.1 million in 2001.
Strong growth in operating income
Operating income surged from euro 83.3 million to euro
132.9 million, due to:
• the sharp reduction in Neopost Online losses,
• an improvement in margins due to new product launches
(IJ 35/45/85 - SI 76/92) and increased use of subcontractors
in China.
Operating margin rose from 14.5% to 17.5% and from 12.5%
to 16.5% on a pro forma basis.
This improvement should be confirmed next year as synergies
resulting from measures implemented in 2002 start to
show through, and since there will be no more losses from
Neopost Online.
Financial expenses under control
Despite a large increase in net debt, Neopost’s financial
expenses of euro 25 million equalled only 3.3% of sales, the
same level as in 2002.This is due to:
• lower interest rates,
• dynamic currency hedging, (Swiss franc following the
Ascom Hasler acquisition, dollar from operations),
• the introduction of centralised cash management,
• a net debt in dollar accounting for 43% of net debt.
Strong growth in net income
Net income is euro 69.7 million,an increase of 83% relative to
the euro 38.1 million in 2001.This was due to strong growth in
operating income and the firm grip on financial expenses, but
also a lower tax charge, following the acquisitions of Ascom
Hasler and Stielow.
YEAR ENDED 31 JANUARY 2002
COMPARED TO YEAR ENDED
31 JANUARY 2001
Fiscal year 2001 was marked by a strong increase in sales, an
improvement of the EBIT margin of Neopost core business, a
controlled level of investment in Internet activities, and a strong
growth of Neopost net profit excluding extraordinary items.
Increase of 11.8% in consolidated sales
The Group’s consolidated sales increased of 11.8%
in 2001 to reach euro 575.0 million.
Based on comparable exchange rates, sales for the year
were up 10.4%.
Fiscal year 2001 was marked by a balanced growth on
Neopost main markets: United States, France and United
Kingdom and by a very strong growth in the rest of the
world. The break-down by business did not change much.
Mailing Systems account for 69% of sales, whereas
Document and Logistics Systems account for 31% of sales.
Very good resilience in the North American market
Despite an environment disrupted by the September 11
events, Neopost reinforced its growth pace in the last
quarter, thanks to the on-going decertification of certain
type of electronic meters. The Group benefited in 2001 from
a postal rate change that generated additional sales of
dollar 5.5 million, versus dollar 7.5 million in 2000. Despite
this rate change situation, organic growth excluding
currency impacts was 4.9% in 2001. Without postal rate
changes and excluding currency impacts, organic growth in
2001, excluding currency impacts, was 6.1%.
Strong growth in France
In a market pushed by the euro conversion and the
deployment of CredinetTM, Neopost achieved high
growth of 10.2% thanks to renewed product range and
services in Mailing and Document Systems. Logistics
sales were sharply up, Neopost now being a supplier to
most main carriers in France. During 2001, Neopost also
benefited from a postal rate change which produced
additional sales although these were slightly lower than
the previous year. Excluding the postal rate change, sales
growth was 10.7%.
Dynamism of sales organization in the UK
In 2001 Neopost continued its investments in sales
organization to better capitalize on the launches of
competitive products and to maximize the opportunities
from the ongoing decertification of mechanical meters.
Sales growth was 13.3% for the full year 2001.
Excluding currency impacts, sales in the UK increased
by 14.8% .
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Management discussion and analysis
