September 1, 2011

Neopost: Q2 2011 sales

Acceleration of growth in second quarter 2011

  • Sales up 7.8% at constant exchange rates

2011 outlook

  • Sales growth expectations revised upwards to between +4% and +6% at constant exchange rates 

  • Expectations regarding the current operating margin1 confirmed at between 25.5% and 26% of sales 

1 Current operating profit / sales
 

Paris, 1 September 2011

Neopost, the European leader and the world's number-two supplier of mailroom solutions, today announced consolidated sales of €249.4 million for the second quarter of the 2011 financial year (ended 31 July 2011), an increase of 2.2% compared with the second quarter of 2010. At constant exchange rates, sales increased 7.8%. In the first half of 2011, the Group generated sales of €483.6 million, up 5.9% at constant exchange rates.  

Denis Thiery, Chairman and Chief Executive Officer of Neopost, stated:  "Our growth accelerated in the second quarter and all our sales components increased. North America is still a key growth engine, but all our other markets also reported growth. Our two divisions, Mailing systems and Document and logistics systems, increased at the same pace. By type of revenue, recurring revenues continued to grow and equipment sales rose strongly." 
 

Sales growth by region  

 

€ million Q2 2011 Q2 2010 Change Change at constant exchange rates
North America 96.4 102.2 -5.7% +7.2%
France 66.7 65.9 +1.2% +1.2%
UK 29.6 28.8 +2.6% +7.2%
Germany 19.2 17.8 +8.3% +8.7%
Rest of the world 37.5 29.2 +28.2% +24.6%
Total 249.4 243.9 +2.2% +7.8%

 

€ million H1 2011 H1 2010 Change Change at constant exchange rates
North America 194.2 194.4 -0.1% +8.2%
France 126.5 127.5 -0.8% -0.8%
UK 57.6 56.3 +2.3% +3.7%
Germany 35.8 34,8 +2.8% +2.9%
Rest of the world 69.5 57.9 +20.0% +16.5%
Total 483.6 470.9 +2.7% +5.9%

 

North America

The Group's positive momentum in North America continues. Sales increased 7.2% at constant exchange rates in the second quarter of 2011 compared to the second quarter of 2010. This strong growth is due to an optimized organisation as well as renewed product lines which enabled Neopost to continue to seize opportunities following the expiration of a large number of contracts signed at the time of the 2006 decertification programmes in the USA and Canada (decertification echo effect). 

 

France 

Second quarter 2011 sales increased 1.2% compared to the same period in 2010. This growth is mainly due to a major contract for Neopost ID, while recurring revenues continued to decline due to weak equipment placements over the past few years.  

 

UK

Sales in the UK increased 7.2% at constant exchange rates in second quarter 2011 compared to the year-earlier period. Although mainly due to a postal rate change, this growth confirms the expected improvement in trends. High-end mailing systems were successfully launched at the end of the quarter.  

 

Germany 

Second quarter 2011 sales increased 8.7% at constant exchange rates compared to the year-earlier period. This growth is due to the completion of a major contract in mailing systems.  
 

Rest of the World 

At constant exchange rates, second quarter 2011 sales increased 24.6% compared to the same period in 2010. This strong growth can be attributed to the first two months of consolidation of the Australian distributor GBC and to the Group's positive momentum in other markets, notably in Scandinavia, Belgium and Switzerland.  
 

Sales growth by business line and activity  

 

€ million Q2 2011 Q2 2010 Change Change at constant exchange rates
Equipment sales 79.9 72.7 +10.0% +15.8%
Recurring revenues 169.5 171.2 -1.0% +4.4%
Total 249.4 243.9 +2.2% +7.8%

 

€ million H1 2011 H1 2010 Variation Change at constant exchange rates
Equipment sales 150.4 138.7 +8.4% +11.7%
Recurring revenues 333.2 332.2 +0.3% +3.4%
Total 483.6 470.9 +2.7% +5.9%

Equipment sales grew strongly, increasing by 15.8% at constant exchange rates in the second quarter of 2011. This growth reflects the success of all the  Group's product lines in both mailing systems and document and logistics systems.  Recurring revenue improved in the second quarter of 2011, up 4.4% at constant exchange rates, and accounted for 68.0% of total Group sales. 
 

 

€ million Q2 2011 Q2 2010 Change Change at constant exchange rates
Mailing systems 169.4 166.2 +1.9% +8.0%
Document and logistics systems 80 77.7 +3.0% +7.2%
Total 249.4 243.9 +2.2% +7.8%

 

€ million H1 2011 H1 2010 Change Change at constant exchange rates
Mailing systems 332.9 327.0 +1.8% +5.3%
Document and logistics systems 150.7 143.9 +4.7% +7.1%
Total 483.6 470.9 +2.7% +5.9%

At constant exchange rates, mailing system sales increased 8.0% in the second quarter of 2011 thanks to the success of the IS product range, notably in North America. In the second quarter 2011, mailing systems accounted for 67.9% of total Group sales.  

Document and logistics system sales continued to grow: sales were up 7.2% at constant exchange rates thanks to the competitiveness of our products and services. This positive trend should be confirmed in the upcoming quarters thanks notably to the launch of the DS 35 and DS 200 models of folders/inserters.

 

2011 outlook 

Based on the Group's strong second-quarter performance, management has raised its growth expectations. Neopost now expects sales growth of  between 4% and 6% at constant exchange rates, compared to its previous forecast range of 3% to 5%.  

The Group also confirms that it expects its current operating margin to reach between 25.5% and 26% of sales.  

Denis Thiery concludes: "Our strong growth in equipment sales, our resilient performance in recurring revenues, our new product launches and  the smooth integration of GBC in Australia are all good reasons for us to  approach the forthcoming quarters with confidence.” 
 

Agenda 

First half 2011 results will be published after the market close on 27 September 2011. 

Third quarter 2011 sales will be published after the market close on 1 December 2011.
 

About Neopost

NEOPOST IS THE EUROPEAN LEADER and the number two world-wide supplier of mailing solutions. It has a direct presence in 19 countries, with 5,700 employees and annual sales of €966 million in 2010. Its products and services are  sold  in  more  than  90  countries.  The  Group  is  a  key player in the markets for mailroom equipment and logistics solutions.  

Neopost supplies the most technologically advanced solutions for franking, folding/inserting and addressing as well as logistics management and traceability. Neopost also offers a full range of services, including consultancy, maintenance and financing solutions.  

Neopost is listed in the A compartment of Euronext Paris and belongs notably to the SBF 120 index.  

For further information, please contact:

Gaële LE MEN, Investor Relations Officer
Tel: +33 1 45 36 31 39
Fax: +33 1 45 36 30 30
E-mail : g.le-men@neopost.com

Fabrice BARON, DDB Financial
Tel: +33 1 53 32 61 27
Fax: +33 1 53 32 61 00
E-mail : fabrice.baron@ddbfinancial.fr

Or visit our website: www.neopost.com