Quadient Sa · EURONEXT:QDT
Quadient Sa — Neopost — H1 2009 Earnings Presentation
39 slides from Quadient Sa's earnings presentation, October 2009
Slide 1: Interim results
2 0 0 9 Interim results September/October 2009 1
Slide 2: Disclaimer: Safe Harbour Statement
DISCLAIMER Safe Harbour Statement This presentation contains forward-looking statements (made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995). By their nature, forward-looking statements involve risk and uncertainty. Forward-looking statements represe
Slide 3: First half 2009
FIRST HALF 2009 First half 2009 key figures Trends in mail volumes Highlights First half 2009 financial statements 2009 outlook 3
Slide 4: First half 2009 key figures
Vv" | : ee FIRST HALF 2009 KEY FIGURES neopost*
Slide 5: First half 2009 key figures
FIRST HALF 2009 KEY FIGURES Sales: €457.3 million +1.0% year-on-year -1.8% year-on-year excluding currency impacts Current operating income: €116.4 million Current operating margin*: 25.5% of sales Improvement relative to H1 2008 (25.4%) Net income: €74.8 million 16.4% of sales (unchanged) +0.6% yea
Slide 6: Trends in mail volumes
neopost* TRENDS IN MAIL VOLUMES
Slide 7: Conventional segmentation of mail
CONVENTIONAL SEGMENTATION OF MAIL BB C B C Marketing Transactional Correspondence Neopost's market corresponds to 7 B2C and B2B mail volumes
Slide 8: Changes in mail volumes
CHANGES IN MAIL VOLUMES Marketing Transactional + % of total mail volume in the US* Correspondence 82bn 96bn BB 40bn C BB 40bn C 27bn 24bn 2002 7bn 2006 6bn 19bn 20bn B 15bn C B 14bn C B B BTotal = 190bn units C Total = 200bn units Business = 88% Business = 90% Increased weighting of business mail 8
Slide 9: Changes in mail volumes
CHANGES IN MAIL VOLUMES Marketing Transactional + % of total mail volume in the US* Correspondence 96bn 91bn BB 40bn C BB 40bn C 24bn 23bn 2006 6bn 2008 6bn 20bn 17bn B 14bn C B 13bn C B B BTotal = 200bn units C Total = 190bn units Business = 90% Business = 90% Decrease in mail volumes against 9 the
Slide 10: Decisive factors in changes to mail volumes
DECISIVE FACTORS IN CHANGES TO MAIL VOLUMES Transactional mail Marketing mail Increase in number Economic Increase in activity of transactions conditions Increase in number Increase in number Demographics of transactions of households 8 Importance of an Growing demands for Postal exhaustive, integra
Slide 11: Correlation with economic growth
CORRELATION WITH ECONOMIC GROWTH U.S. Total Mail Volumes CAGR 1990-00 2000-06 06-08 (Bn Units) 250 GDP : +3.4% +2.4% +1.4% Mail volume : +2.3% +0.4% -2.5% Subprime 9/11 200 Other Mail* 150 Standard Mail (Marketing mail) 100 First Class Mail (Transactional mail mainly) 50 0 90 92 94 96 98 00 02 04 06
Slide 12: Greater sensitivity to economic conditions
GREATER SENSITIVITY TO ECONOMIC CONDITIONS U.S. Total Mail Volumes & GDP Evolution from 1990 to 2008 (% YoY variation, fiscal years) 6% 4% 2% 0% 1992 1996 2000 2007 -2% -4% Mail Volume YoY Variation -6% GDP YoY Variation Difference Variation Mail Volume - GDP Linked to the increased weighing of mark
Slide 13: Increasing share of mail in advertising expenditure
INCREASING SHARE OF MAIL IN ADVERTISING EXPENDITURE U.S. Advertising Spending by Medium U.S. Share of Direct Mail (Bn USD) within Total Ads Spend (%) 300 24% 250 Other 22% 200 Internet Magazines Radio 150 20% Television 100 Newspapers 18% 50 Direct Mail 0 16% 2002 2003 2004 2005 2006 2007 2008 2002
Slide 14: NICT: contrasting consequences for mail services
NICT: CONTRASTING CONSEQUENCES FOR MAIL SERVICES Transactional mail Marketing mail Disappearance effect Value of paper remains relating to the dematerialisation of certain parts of the economy Complementarities between conventional direct marketing activities / new Substitution effect relating techn
Slide 15: Working towards a more efficient mail processing chain
WORKING TOWARDS A MORE EFFICIENT MAIL PROCESSING CHAIN Improve the cost/efficiency ratio of the mail processing chain Economic aspects Technological investment in all parts of the chain (preparation, sorting, delivery) allowing for cost cuts Qualitative aspects Technological investment, competition
Slide 16: Highlights
WE VALUE YOUR MAIL HIGHLIGHTS neopost’
Slide 17: Satori: new acquisition in Neopost's core business
SATORI: NEW ACQUISITION IN NEOPOST'S CORE BUSINESS Address cleansing and postal pre-sorting Address correction, elimination of duplicates Access to favourable postal tariffs Effective direct marketing actions mail delivered to recipient Useless expenditure avoided benefiting both postal operators an
Slide 18: Satori: acquisition of a fast growing company
SATORI: ACQUISITION OF A FAST GROWING COMPANY Satori: key information Based in Seattle - Main markets: US, Canada + start of operations in the UK Created in 1982 – Fast-growing (average growth of 25% per year) and profitable Sales = $11.8m in 2008, with a large proportion of recurring revenues Custo
Slide 19: Distribution networks
DISTRIBUTION NETWORKS Europe: acquisition of Kontur in Sweden Consolidation of Neopost's position in Scandinavia US: acquisition of a distributor in Washington DC Neopost Further strengthening entering the postal of direct address distribution market 19
Slide 20: Optimisation plan
OPTIMISATION PLAN R&D and supply chain: Programmes almost completed US distribution Head offices of the two US subsidiaries combined on the East Coast Call centres transferred to Dallas 2 sites closed More than 300 positions relocated Close to 200 recruitments Progressing in line with expectations 2
Slide 21: H1 2009 results
WE VALUE YOUR MAIL A | RESULTS neopost“
Slide 22: H1 2009 sales
H1 2009 SALES Sales (€ million) 500 480 460 12.7 457.3 452.8 -8.2 440 420 400 Organic H1 2008 Currency H1 2009 Growth* impacts 1.0% increase in sales in H1 2009, 22 -1.8% at constant exchange rates * At constant exchange rates
Slide 23: Sales growth per country
SALES GROWTH PER COUNTRY Change H1 2009 / H1 2008* H1 2009 sales: €457.3m North +2.8% America Rest of world France - 4.0% 11% North America 39% United Germany Kingdom - 2.3% 8% UK Germany - 4.9% 13% Rest of the world - 6.0% France 29% Group - 1.8% Growth in H1 in North America, 23 Decline in the res
Slide 24: Sales growth per revenue type
SALES GROWTH PER REVENUE TYPE Change H1 2009 / H1 2008* H1 2009 sales: €457.3m Rental Recurring Services and +4.0% & leasing revenues supplies 30% 41% Equipment sales -13.5% Equipment sales 29% Continued growth in recurring revenue 24 * At constant exchange rates
Slide 25: Sales growth per business line
SALES GROWTH PER BUSINESS LINE Change H1 2009 / H1 2008* H1 2009 sales: €457.3m Mailing systems -1.2% Document and logistics systems 27% Documents and logistics -3.3% systems Mailing systems 73% Good performance of Document and 25 Logistics systems in Q2 2009 * At constant exchange rates
Slide 26: 25.5% EBIT margin in H1 2009
25.5% EBIT MARGIN IN H1 2009 H1 H1 Change € million 2008 2009 % Sales 453 457 +1.0% Gross margin 351 368 +4.6% As % of sales 77.6% 80.4% Current Operating Income 115 116 +1.2% As % of sales 25.4% 25.5% Improvement in profitability 26 €/$ H1 2009 = 1.35 and H1 2008 = 1.55 ; €/£ H1 2009 = 0.88 and H1
Slide 27: Net income
NET INCOME H1 H1 Change 2008 2009 % € million Sales 453 457 +1.0% Current Operating Margin 115 116 +1.3% Operating Income 115 116 +1.3% Financial Results (10) (12) Taxes (31) (30) Share of associated companies 0 1 Net Income 74 75 +0.6% As % of sales 16.4% 16.4% Diluted EPS 2.39 2.44 +2.1% Diluted E
Slide 28: Working capital requirement
WORKING CAPITAL REQUIREMENT 31/07 31/07 Change 2008 2009 % € million Inventories 55 56 +1.8% Accounts receivable 128 126 -1.9% Prepaid income (133) (142) +6.7% Other payables and receivables (256) (235) -8.4% Total excluding leasing (206) (195) -5.4% WCR maintained at a high negative level 28
Slide 29: Update on leasing
UPDATE ON LEASING Leasing portfolio In €m 498.9 500 428.8 400 300 200 100 0 31/07/08 31/07/09 H1-09 vs H1-08, growth at constant exchange rates: +11,5% Target 75% average penetration rate at Group level Strong growth potential 29
Slide 30: Gradual and controlled increase in gearing
GRADUAL AND CONTROLLED INCREASE IN GEARING 31/07 31/07 € million 2008 2009 Financial debt 743 842 Cash and marketable securities (131) (118) Net financial debt 612 724 Shareholders’ equity 435 443 Net debt / shareholders’ equity 140.7% 163.6% Net debt / EBITDA ratio 2.0 2.4 EBITDA / financial charge
Slide 31: Debt purpose (reminder)
DEBT PURPOSE (REMINDER) Net debt: €724m at end July 2009 Leasing portfolio: €499m Rental business Net book value of assets for rent on balance sheet: €81m (recognition at production cost) Net present value of future rental income = net rental assets >> €81m Leasing portfolio + net book value of asse
Slide 32: Debt structure
DEBT STRUCTURE 4 credit lines US Private Placement $175m, of which $75m at variable rates and $100m at a fixed rate (4.83%) €25m at a fixed rate (4.52%) Maturity: September 2010 Private placement with Crédit Agricole Regional Banks €133m at a fixed rate (4.09%) Maturity: December 2012 Revolving cred
Slide 33: A new private placement
A NEW PRIVATE PLACEMENT A new credit line to finance Neopost’s growth Signed in September 2009 with Natixis / Banque Populaire / Caisse d’Epargne Characteristics of this new credit line Revolving line Nominal amount €175m (yearly amortisation after two years) Maturity: Sept 2014 Conditions: EURIBOR
Slide 34: 2009 outlook
f WE VALUE YOUR MAIL & 2009 neopost”~
Slide 35: 2009 outlook
2009 OUTLOOK Recovery signs in North America and the UK Stabilisation in Europe and Export markets Favourable comparison base in Europe and Export markets in H2 Continuing roll-out of IS range Completion of the optimization programme in the US Continuing growth in recurring revenues FY 2009 sales: a
Slide 36: Appendix
APPENDIX neopost*
Slide 37: Correlation between mail volumes and GDP
CORRELATION BETWEEN MAIL VOLUMES AND GDP CAGR CAGR CAGR 90-00 00-06 06-08 Total mail volumes +2.3% +0.4% -2.5% Standard Mail +3.5% +2.2% -1.7% (Marketing mail) First Class Mail (Transactional mail mainly) +1.5% -1.0% -3.3% Other mail* +0.7% -1.5% -2.8% GDP +3.4% +2.4% +1.4% 37 * Other mail includes
Slide 38: Consolidated balance sheet (1/2)
CONSOLIDATED BALANCE SHEET (1/2) € million 31/07 31/07 Assets 2008 2009 Goodwill 621 684 Intangible fixed assets 56 64 Tangible fixed assets 139 141 Other non current financial assets 12 26 Other non current receivables 6 8 Leasing receivables 429 499 Deferred tax assets 39 11 Inventory 55 56 Accoun
Slide 39: Consolidated balance sheet (2/2)
CONSOLIDATED BALANCE SHEET (2/2) € million 31/07 31/07 Liabilities 2008 2009 Shareholders’ equity 435 443 Non current provisions 26 9 Non current financial debt 280 293 Short-term financial debt 462 549 Other non-current liabilities - 11 Deferred tax liabilities 28 41 Non-current financial instrumen