Neopost : Consolidated sales
Neopost, the European leader and the number two worldwide supplier of mailing solutions, today announced consolidated sales of euro 196.3 million for the second quarter of 2002 (ended July 31 2002), representing an increase of 28.1% with respect to the second quarter of 2001. On a constant structure and exchange rate basis, sales grew by 1.1%. In the second quarter, the company finalised the acquisition of Ascom Hasler (May 31) and acquired the German distributor Stielow (deal announced on July 24 and completed on August 31). Over the first half of 2002, consolidated sales increased by 27.1%, and by 4% on a constant structure and exchange rate basis, coming in at euro 364.2 million. Jean-Paul Villot, Neopost Chairman and CEO, made the following comments: ' The second-quarter performance is in line with our announced forecasts, and supports our full-year growth targets. Business levels during the quarter were especially satisfying, since the base for comparison in the second quarter of 2001 was very high due to euro changeover revenues. In addition, the integration of Ascom Hasler is progressing as expected, and is giving us new stature. For the first time, all of Ascom Hasler's geographical businesses contributed to Neopost's consolidated sales in the second quarter. Finally, the recent acquisition of German distributor Stielow will enable us to strenghen our number two position in Germany.' Ascom Hasler fully consolidated in the second quarter Neopost has consolidated Ascom Hasler North America since March 1 2002. The second-quarter sales figures include as well for the first time the contribution from Ascom Hasler's businesses outside North America (mainly UK, Germany and Switzerland), albeit for only two months. Ascom Hasler boosted Neopost's consolidated second-quarter sales growth by 31.9 points, representing additional sales of euro 49.3 million. As previously announced, organic sales growth (excluding Ascom Hasler) was limited in the second quarter, at 1.1%. This was mainly due to the high base for comparison in the second quarter of 2001. Weak growth was also due to a holdover effect in franking machine sales after the company announced the forthcoming launch of the new IJ35 and IJ45 digital machines. These machines constitute Neopost's largest product segment. Following this announcement, orders focused on the new machines, which will only become available for delivery in Neopost's main markets (UK, USA, France and Germany) in the second half of the year. These new products should ensure firm growth in sales in the rest of the year, particularly in the fourth quarter.
Millions of euros Q2 2002* Q2 2001 % change % change: Ascom Hasler impact* % change on a constant structure and exchange rate basis
North America 100.1 67.1
49.2% 57.9%
1.1%
France 53.9 55.4 (3.2)%
- (3.2)%
UK 23.2 18.4 25.7%
23.9% 6.4%
Rest of the
world 19.1 12.1 59.2% 46.4%
12.9%
Total 196.3
153.0 28.1% 31.9%
1.1%
* Ascom Hasler North America consolidated for 3 months and Ascom Hasler's non-North American businesses consolidated for 2 months Excluding Ascom Hasler, Neopost's sales in North America in the second quarter of 2002 rose by 1.1% at constant exchange rates. During the second quarter, Neopost benefited from a postal rate change as in the second quarter of 2001. On the other hand, there was a wait-and-see attitude among customers after Neopost announced the launch of the new IJ35/IJ45 digital franking machines, which will not be available until the end of the third quarter. In the first six months of the year, Neopost's North American sales were near-flat, coming in down 0.3% before currency effects. Ascom Hasler North America, which Neopost has consolidated since March 1 2002, generated sales of euro 39.2 million in the second quarter, making a total of euro 61.7 million in the first half. As of the fourth quarter of 2002, Ascom Hasler North America will benefit from Neopost's entire range of digital franking machines. In France, although Neopost benefited from a postal rate change as in 2001, sales in the second quarter of 2002 were slightly below the same quarter in 2001 (-3.2%). This dragged first-half growth down to 1%. Neopost had anticipated and warned about this weak growth, which was due to a very high base for comparison in the first half of 2001. This was caused by the euro changeover, which boosted sales by an estimated euro 5 million in France over the first half of 2001. In the UK, second-quarter sales growth was 6.4% on a constant structure and exchange rate basis. The UK was the only market in which Neopost was able to start delivering its IJ35 and IJ45 machines in the second quarter. The order book is full, since the successful launch of these machines caused demand to exceed supply. Ascom Hasler's UK business added 23.9% to Neopost's UK sales during the quarter. From the start of the fourth quarter, Ascom Hasler will sell Neopost's product range. Neopost and Ascom Hasler's combined UK sales rose by 25.7% in the second quarter and by 26.5% in the first half of 2002. In the rest of the world, Neopost's sales rose by 59.2% in the second quarter, with 46.4% coming from Ascom Hasler. Although the Dutch and Belgian subsidiaries continue to generate strong growth, business levels in Italy slowed sharply due to the end of the euro changeover programme. Neopost has recently won a large franking machine contract in China, worth 2.5 million US dollars, and will deliver the machines before the end of 2002. First-half sales:
Millions of euros H1 2002* H1 2001 % change % change - Ascom Hasler impact % change on a constant structure and exchange rate basis
North America 180.6 124.3 45.3%
49.7% (0.3)%
France
105.4 104.3 1.0% -
1.0%
UK 43.9
34.7 26.5% 13.0%
14.9%
Rest of the world 34.3 23.2 47.9%
24.0%
24.0%
Total 364.2 286.5 27.1%
25.1% 4.0%
* Ascom Hasler North America consolidated for 5 months and Ascom Hasler's non-North American businesses consolidated for 2 months Outlook The second half will see the arrival of the IJ35/45 franking machines, first in the UK then in North America, France and Germany, together with the initial impact of integrating Ascom Hasler's UK, Belgian, Dutch and Italian subsidiaries and the gradual roll-out of Neopost products in Ascom Hasler's North American and German networks. As a result, Neopost is confident as regards the second half, and business levels should be firm. The acquisition of Stielow, consolidated as of September 1 2002, strengthens Neopost's number two position in Germany, giving it direct control over 21% of the franking machine market and more than 50% of the folder/inserter market. Jean-Paul Villot concluded as follows: 'For full-year 2002, we confirm our stated target of 5% sales growth, excluding acquisitions and currency effects. Based on current exchange rates, consolidated 2002 sales should come in around euro 775 million. We have slightly increased our net profit forecast to at least euro 60 million. Looking beyond 2002, the work we are doing today makes us confident as regards Neopost's ability to continue achieving strong growth in sales and profits.' Diary First-half results will be published on October 2 2002, after the close of market. Neopost Neopost is the European leader and the second worldwide 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 markets, i.e. the USA, France, the UK, Canada, Italy, the Netherlands, Belgium, Spain, Ireland and Germany. Neopost products are sold in 70 countries. In 2001, Neopost generated sales of euro 575 million. In 2002, Neopost acquired Ascom Hasler, the world's third-largest supplier of mail processing solutions, and Stielow, Germany's leading supplier of folder /inserters. Neopost is listed on the Premier Marché of Euronext Paris and is a constituent of the SBF 120 and Next 150 indices. For additional information, please contact: Gaële Chagnaud, investor relations
