Neopost Solid Business Levels in Second Quarter of 2004

Sales of EUR 187.5m, + 4.9% on a like-for-like basis(1) and at constant exchange rates (+ 3.7% over the first half(1))

OUTLOOK:

— 2004 full-year organic sales growth about the same as in the first half 2004

— Minimum operating margin of 22% in 2004

Neopost, the European leader and number two world-wide supplier of mailing solutions, today announced consolidated sales of EUR 187.5m for the second quarter of its 2004 financial year (three months ending 31 July 2004). On a like-for-like basis(1) and at constant exchange rates, sales expanded by 4.9%. Neopost's aggregate sales over the first six months of 2004 totalled EUR 371.0m, a rise of 3.7% on a like-for-like basis(1) and excluding currency effects.

Jean-Paul Villot, Neopost's chairman and chief executive officer, made the following comments: "We are very satisfied with Neopost's business levels for the second quarter of 2004. The rate of growth picked up in our two main markets – North America and France. In the United Kingdom, growth adjusted for the impact of postal rate changes remained solid. In Germany, the company's performance improved. In the rest of the world, growth reached very high levels. All these factors give us reason to be confident for the rest of 2004."

Sales

Change
In millions of euros Q2 Q2 Change excl.
2004 2003 currency
effects
———————————————————————
North America 75.0 74.8 +0.3% +5.5%
———————————————————————
France 57.8 56.0 +3.2% +3.2%
———————————————————————
UK 26.2 25.7 +2.0% -3.5%
———————————————————————
Germany 11.2 11.5 -2.4% -2.4%
———————————————————————
Rest of the world 16.6 12.4 +33.6% +32.4%
———————————————————————
Total(1) 186.8 180.4 +3.6% +4.9%
———————————————————————
Non-core businesses of Stielow (sold) 0.7 5.9
———————————————————————
Total reported 187.5 186.3 +0.6% +1.9%
———————————————————————

Change
In millions of euros H1 H1 Change excl.
2004 2003 currency
effects
———————————————————————-
North America 145.5 152.7 -4.7% +3.8%
———————————————————————-
France 116.0 114.1 +1.6% +1.6%
———————————————————————-
UK 55.2 49.8 +10.7% +6.7%
———————————————————————-
Germany 22.4 24.7 -9.3% -9.3%
———————————————————————-
Rest of the world 30.9 26.0 +18.9% +18.7%
———————————————————————-
Total(1) 370.0 367.3 +0.7% +3.7%
———————————————————————-
Non-core businesses of Stielow (sold) 1.0 11.8
———————————————————————-
Total reported 371.0 379.1 -2.2% +0.7%
———————————————————————-

In North America, excluding the currency effect, growth came to 5.5% in the second quarter of 2004 and 3.8% over the first six months of the year. Neopost confirmed its momentum and the competitiveness of its product range in the North American market, despite the weak dollar.

In France, despite an unfavourable basis of comparison because revenues generated by postal rate changes were lower in 2004 than in 2003, high levels of business were sustained during the second quarter of 2004, with growth of 3.2% during the period. Over the first half, sales increased by 1.6%.

In the UK, at constant exchange rate, sales declined in the second quarter. However, after eliminating the extra revenues generated by postal rate changes during the same period last year, sales increased. Over the first half, sales grew by 6.7% excluding the currency effect.

In Germany, growth is set to resume in the third quarter, when Neopost delivers significant quantities of machines that meet the new postal standards. Neopost remains confident in its ability to stabilise its sales in Germany over the full year 2004.

In the rest of the world, the full range of digital machines is being progressively extended to all markets, and the growth accelerated to 18.9% in the first half. However, it will probably be difficult to sustain such a pace over the full year.

Outlook for 2004

Reinforced by a further improvement in business level in the second quarter, Neopost is confident in its ability to achieve full-year sales growth in line with the expansion achieved in the first half of 2004.

The Group reminded that its target is to achieve a minimum operating margin of 22% over the full year 2004.

In conclusion, Jean-Paul Villot said: "Following this very good first half, we are confident in our new sales growth projections for 2004. Such a highly favourable sales trend can only help us achieve our ambitions to improve the Group's profitability."

Calendar

Half-year results will be released on 5 October 2004 after the stock market closes. Third-quarter sales are scheduled to be published on 7 December 2004 after the stock market closes.

Neopost

Neopost is the European leader and number two world-wide supplier of mailroom equipment and logistics solutions. Neopost offers the most advanced solutions for online or off-line postage, large volume mail insertions, occasional parcel delivery and logistics management and traceability.

Headquartered near Paris, France, Neopost has a direct presence in the world's top mailing and logistics markets, i.e. the US, France, the UK, Germany, Canada, the Netherlands, Italy, Belgium, Ireland, Japan, Norway and Spain. Neopost products are sold in 90 countries.

In 2003, Neopost posted sales of EUR 751m and net income of EUR 84m. In 2002, Neopost acquired Ascom Hasler, the world number three supplier of mailing solutions, and Stielow, Germany's leading supplier of folder/inserters.

Neopost is listed on the Premier Marche of Euronext Paris and is a constituent of the SBF 120 and Next 150 indices.

Note:(1) Excluding the non-core businesses of Stielow, which were sold in September 2003 ('label printing') and in March 2004 ('print finishing').

Contacts

Neopost
Gaele Chagnaud, 33 (0) 1 45 36 31 39
Investor Relations Officer
[email protected]
www.neopost.com
or
Gavin Anderson & Company
Nadege Morlais, 33 (0) 1 45 22 22 13
[email protected]