Francotyp-Postalia publishes half-year figures: Revenue and earnings down, EBITDA margin stable, free cash flow increases significantly

Berlin, 29 August 2024 - Francotyp-Postalia Holding AG (ISIN DE000FPH9000) recorded a decline in revenue and earnings in a difficult market environment in the first half of 2024.

In the first six months of the current financial year, FP generated consolidated revenue of EUR 116.2 million compared to EUR 124.6 million in the same period of the previous year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 14.1 million after EUR 15.3 million in the same period of the previous year; the EBITDA margin thus reached 12.1%. Free cash flow increased significantly to EUR 10.7 million compared to EUR 5.5 million in the same period of the previous year. Net debt was further reduced to EUR 4.2 million after EUR 14.4 million at the end of 2023.

Revenue in the Mailing, Shipping & Office Solutions area fell by 4.1% to EUR 72.3 million. While revenue from product sales increased, the after-sales business was again affected by the declining letter volume. Based on the solid business model with high recurring revenues, the focus is on stabilizing revenue and increasing cost efficiency.

Revenue in the Mail Services area, which covers the collection, franking and consolidation of business mail, decreased by 9.3% to EUR 30.8 million. This segment also reflects the declining letter volumes in Germany.

Revenue in the Digital Business Solutions area declined by 13.2% to EUR 13.0 million in the reporting period. This was mainly due to a further decline in output management. The positive development in SaaS solutions continued: revenue from SaaS solutions grew by 29.9% in the first half of the year compared to the same period of the previous year. However, the share of SaaS revenues in absolute terms still plays a minor role in relation to FP's total revenue. In addition to FP Sign and the e-Justice solutions, FP Parcel Shipping, which has now been launched in four countries, and FP TRAXsuite also contribute to the positive business development.

Drive the transformation process with determination

FP CEO Friedrich Conzen says: "The figures once again highlight the necessity of driving FP's transformation with determination across all business areas, sometimes requiring significant measures. In the segments dependent on mail volume, our focus is on counteracting the declining market trend, maintaining revenue levels as much as possible, and generating additional cash through increased efficiency. In the digital sector, FP has built a small but attractive portfolio of solutions. Here, we will expand sales efforts and accelerate internationalization."

CFO Ralf Spielberger explains: "Business performance in the first half of the year was characterized by major challenges. The measures taken to reduce costs have contributed to the EBITDA margin remaining almost stable. Despite the decline in revenue and EBITDA, we were able to increase free cash flow and significantly reduce debt."

Earnings per share of 0.18 Euro

In the first six months of 2024, the FP Group generated EBITDA of EUR 14.1 million compared to EUR 15.3 million in the same period of the previous year. The EBITDA margin thus remained almost stable at 12.1% compared to 12.3% in the previous year. The cost of materials fell by 7.5% to EUR 54.1 million in the first six months, primarily as a result of the reduced activities in the Mail Services area. Despite salary increases in the first half of 2024, personnel expenses were reduced by 3.6% to EUR 32.6 million thanks to the cost-cutting measures introduced. Other operating expenses fell by 12.0% to EUR 18.4 million in the first half of 2024 compared to the same period of the previous year.

Depreciation, amortization and impairments increased by 22.4% to EUR 10.7 million compared to the same period of the previous year. While depreciation and amortization decreased, the increase was due to impairment losses on capitalized development costs. EBIT thus totaled EUR 3.4 million compared to EUR 6.5 million in the previous year. Consolidated net income improved to EUR 2.8 million compared to EUR 0.9 million in the same period of the previous year. The effect of the lower EBITDA and increased depreciation and amortization was more than offset by the improved interest, financial and income tax result. Earnings per share (EPS) rose to EUR 0.18 compared to EUR 0.05 in the same period of the previous year.

Forecast for 2024 adjusted

The development in the 2024 financial year will continue to be influenced by the difficult overall and sector-specific economic conditions. Based on preliminary figures for the first half of 2024, the Executive Board determined on 2 August 2024 that business development was not in line with Group planning for the financial year. It was therefore decided to adjust the forecast. Instead of sales at or slightly below the previous year's level, a decline in sales of up to 6% is now expected. Despite the measures already taken, profitability will also not develop as originally expected. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) are now expected to fall not just slightly but by up to 12% compared to the previous year. In the 2023 financial year, FP generated revenue of EUR 241.8 million and EBITDA of EUR 31.0 million.

The expected development of the financial performance indicators for the 2024 financial year is generally based on the assumption of constant exchange rates.

Key figures at a glance:

Disclaimer

Statements in this release that relate to the future development and forecasts of the Group are based on our careful assessment of future events. Additional negative macroeconomic developments may result in the actual performance for the 2024 financial year deviating from the forecast.

For Investor Relations inquiries, please contact:

Dr. Monika Plum
Phone.:
49 (0)30 220 660 410
E-Mail: ir@francotyp.com

About Francotyp-Postalia:

Francotyp-Postalia Holding AG, a listed company based in Berlin, is the holding company of the globally active FP Group (FP). FP is an expert in solutions that make office and working life easier and more efficient. FP has the following business divisions: Digital Business Solutions, Mailing, Shipping & Office Solutions and Mail Services. In the Digital Business Solutions division, FP optimizes customers' business processes and offers solutions such as electronic signatures, hybrid mail, input/output management for physical and digital documents and data-driven automation of complex business processes. In the Mailing, Shipping & Office Solutions division, FP is the world's third-largest provider of mailing systems and the market leader in Germany, Austria, Scandinavia and Italy. FP is represented in 15 countries with its own subsidiaries and in many other countries with a dealer network. In the Mail Services division, FP offers the consolidation of business mail and is one of the leading providers in Germany. In 2023, FP generated revenue of more than EUR 240 million.