2015 Annual Report
113, RUE JEAN-MARIN NAUDIN 92220 BAGNEUX - FRANCE www.neopost.com
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Annual Report
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EDITO RIAL
Information, mail and parcel flows are in a process of deep-seated change. In an increasingly electronic and dematerialized world marked by non-stop growth in parcel volumes, players and users are looking both for more possibilities and greater simplicity. Yet the transition to this new world – one in which the physical and digital coexist and converge – can prove complex, especially for small and medium-sized companies. And that is where Neopost comes in. By providing the right tools and solutions, Neopost helps companies to manage this transition and adapt their practices so as to optimize dialogue with their own customers and place them at the heart of their organization while responding to the needs and opportunities stemming from the boom in e-commerce.
Send. Receive. Connect.
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ABOUT NEOPOST
Sales of €1.2bn 6,100 employees Solutions marketed in 90+ countries
N
eopost is the number two global provider of mailing solutions and a major player in digital communications and shipping solutions. Neopost provides large companies and SMEs alike with highly innovative solutions for managing their physical and digital communication and parcels. Its equipment, software and services facilitate the management of communication and goods flows.
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The Group’s solutions are also adapted to the needs of supply chain and e-commerce players. With direct presence in 31 countries and over 6,100 employees, Neopost works closely with a network of partners in order to market its solutions in more than 90 countries. In 2015, Neopost reported sales of €1.2 billion. Neopost is listed in Compartment A of Euronext Paris and belongs notably to the SBF 120 index.
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p.6
6 Interview with Denis Thiery
Reaching a new milestone
p.16
8 A majority-independent Board of Directors 10 A close-knit management team 12 Neopost’s transformation
TRENDS 18 The alliance of mail and digital communication 26 The e-commerce boom
TENDANCES 32 The customer at the heart of organizations
RESPONSIBILITIES 44 Neopost, a player in the circular economy 48 Committed teams 50 The transformation in figures 52 Neopost on the stock market
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REACHING A NEW MILESTONE Interview with Denis Thiery, Chairman & Chief Executive Officer
The structural decline in mail is intensifying, the digitalization of the economy is accelerating, and growth in e-commerce is booming.
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THE TRANSFORMATION IS ON THE RIGHT TRACK In this interview, Denis Thiery talks about his ambitions and reviews the most recent changes to Neopost’s range of solutions and its new organization structure.
Have there been any changes to the rationale of Neopost’s transformational approach initiated four years ago? Very few changes have been made to the foundations of our transformation strategy. But the dynamics in place have accelerated. The structural decline in mail is intensifying, the digitalization of the economy is accelerating, and growth in e-commerce is booming. We are harnessing our fields of expertise – from multichannel communication to logistics solutions – to support our customers by providing them with the means to manage these changes and convert them into opportunities.
How would you measure the success of the transformation achieved so far? The share of sales from digital communication and logistics solutions in total Group sales has tripled in four years, from 8% in 2011 to over 23% in 2015. We are targeting a share of 35% in three or four years’ time.
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How is your offer for large companies changing? We are integrating our data quality management solutions together with customer communication management. These activities address the same key accounts. As such, we are seeking to capitalize on the commercial wins of our GMC Software subsidiary with banks, insurance companies and public utility companies.
And do you now have a complete range of logistics solutions? Our offer was previously focused on traceability services. We have now extended it to include shipment management, e-commerce platform integrated solutions, and automated lockers for receiving parcels. We are also developing an order packing system to optimize parcel volumes, so we now cover the entire logistics processing chain.
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In August 2016, Neopost will move to a high environmental quality building in Bagneux.
You have changed the organization of your activities for SMEs. To what end?
What are your ambitions from a financial standpoint?
In a dematerialized world, we bring our SME customers a range of integrated, physical and digital solutions. These solutions are now managed by an autonomous global division with its own resources, the aim being to optimize our costs and safeguard our competitiveness while capitalizing on our customer base, distribution network and the technologies developed by our specialized subsidiaries.
We will return to growth once our digital and logistics activities have developed sufficient momentum to offset the decline in our mail activity. Neopost remains very profitable, which gives us the means to succeed in our strategy while implementing savings and optimization plans aimed at adapting the organization structure to this new mix of products and services.
How are you leading your transformation internally?
What message would you like to convey to your shareholders?
Change truly reveals the culture of a company. At Neopost, it is playing the role of a real driver. The shift in mindsets precedes the transformation rather than being subjected to it. Our agility, sense of innovation and values all stand as key strengths for the success of our project.
While our transformation is on the right track, it is part of a long-term process. Our stock price has been impacted by the stronger than expected decline in our mail business, as well as by the necessary reduction in our dividend, even though we continue to generate strong returns. So I would like to thank our shareholders for their trust in us and their patience.
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GOVERNANCE
A LARGELY INDEPENDENT BOARD OF DIRECTORS Neopost’s Board of directors approves the Group’s strategic directions. The Board members contribute with their expertise in diverse areas and are involved in major decisions, such as launching new projects and acquisitions.
1
* Independent director Member of the remuneration committee, chaired by Catherine Pourre 2 Member of the audit committee, chaired by Éric Courteille 3 Member of the appointments committee, chaired by Agnès Touraine
Readers are invited to refer to the 2015 registration document for more detailed information on corporate governance: www.neopost.com/en/annual-reports/2015-registration-document
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Composition as of 31 January 2016
Denis THIERY is Chairman & Chief Executive
Vincent MERCIER*1,3 was President of the
Jacques CLAY*2 spent most of his career
Catherine POURRE*1,2 was deputy executive director, and then member of the supervisory Board of Unibail-Rodamco, following 10 years as a partner at PricewaterhouseCoopers.
Officer of Neopost, having served as CEO from 2007 to 2010, and as chief financial officer from 1998 to 2007. Prior to joining the Group, he was CEO of Moorings and held various positions with Wang France and PricewaterhouseCoopers.
with Hewlett-Packard, in Europe and the United States, notably in charge of the PC division.
Éric COURTEILLE*2 is Chief Executive
Officer of La Redoute. He previously held a variety of positions in finance in groups such as PPR, CFAO or Redcats.
Cornelius GEBER3 acted as consultant
to senior management of the German post office and was Chairman of the Board of Kuehne + Nagel.
William HOOVER Jr* spent 30 years as a senior partner at McKinsey and is a specialist in high technologies, telecoms and industry.
supervisory Board of Roland Berger Strategy Consultants after having run its French and Chinese operations.
Isabelle SIMON*2 is legal and finance director, and member of the executive committee of Thales group after having worked at Cleary Gottlieb Steen & Hamilton, Goldman Sachs, Publicis and then Monte-Carlo SBM. Agnès TOURAINE*1,3 manages Act III Consultants, a growth strategy consulting company. Most notably during her career, she headed up Vivendi Universal Publishing. Jean-Paul VILLOT 1,3 was Chairman & Chief
Executive Officer of Neopost from 1996 to 2007 and Chairman until 2010, having held management positions at Bull, Schlumberger and Océ in France and abroad.
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GOVERNANCE
A CLOSE-KNIT MANAGEMENT TEAM The new composition of the management team reflects Neopost’s decision to organize its operations around three business units so as to optimize the value added created for its customers.
Denis THIERY Chairman & Chief Executive Officer
The streamlined executive committee brings the necessary flexibility and reactivity for transformation
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Henri DURA
Alain Fร RARD
Enterprise Digital Solutions
Neopost Shipping
An international team
Jean-Franรงois LABADIE
Thierry LE JAOUDOUR
Finance & Legal
Technology & Innovation
Sharing the same vision and developing our commitment together at all levels of the Group
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Dennis LESTRANGE
Nikolaus SCHOLZ
Gilles WOZELKA
SME Solutions
Strategy & Communication
Human Resources
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STRATEGY
NEOPOST’S TRANSFORMATION To respond to the digitalization of communication and information flows as well as the growth in parcel volumes, Neopost introduced a transformation plan in 2012 focused in particular on extending its range of solutions. Customer needs are changing, be they SMEs or SMIs, key accounts, carriers, logistics companies or e-commerce firms. To best address those changes, Neopost is expanding its activity beyond the supply of mail management systems and proposing solutions in the fields of digital communication and parcel management. In parallel, Neopost continues to adapt its organization structure.
€1.003bn
Growing share of digital communication and logistics solutions
€1.070bn
The transformation of Neopost will have reached a key milestone when sales from the digital communication and logistics businesses exceed 35% of total Group sales. Once that level is attained, the strong growth in these new businesses should begin to offset the structural decline in traditional physical mail businesses.
€1.095bn €1.113bn €1.190bn
Total Group sales Share of digital communication and logistics solutions as a % of total Group sales
Mid-term objective
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3
key areas
NEOPOST’S STRATEGY IS FOCUSED ON THREE KEY AREAS Supporting the digital transition of SMEs Neopost continues to develop its offering to the needs of SMEs, which account for the largest part of its traditional customer base. In addition to mail management systems, Neopost brings SMEs simple and accessible solutions to help them take up the challenge of integrating digital technology in their communication and information flows.
Reinforcing the Group’s leadership in Enterprise Digital Solutions Building on its position as a leader in customer communication management and its expertise in data quality, Neopost is working to integrate these solutions intended for key account customers. The Group is also pursuing its strategy on innovating and extending its business to vertical markets such as banking, insurance and public utilities.
Becoming a benchmark partner in Shipping Solutions
Staying agile The Neopost group is adapting its organizational structure around the world to bring all its customers solutions that match their size and needs. For its business with SMEs, the Group has decided to create an autonomous global division with its own resources, notably in research and development, production, and distribution. The aim is to equip the new division with all the resources needed to step up the deployment of digital and logistics solutions while adjusting and optimizing its structures.
In today’s fast-growing market, Neopost is harnessing its know-how in logistics and extending its offering with a view to providing innovative and high-performance solutions at each link in the parcel processing chain. A long-standing partner of carriers, postal operators and logistics firms, Neopost is expanding its role as a parcel facilitator with e-commerce companies, parcel shippers and recipients.
Asia-Pacific and other
7%
Current operating margin1 in 2015 North America
43 %
Europe
50 %
2015
19.7 %
of sales
Net margin2
11.2 %
Current operating margin before acquisition-related expense = current operating income before acquisition-related expense/total sales.
of sales
1
2
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Sales by geographical region
Net margin = Group attributable net income/total sales.
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TESTIMONIALS
HOW ARE CUSTOMER EXPECTATIONS CHANGING
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Large companies and organizations want to be able to communicate and interact with their customers in the right manner at the right time and via their preferred channel. We enable our customers to implement an omni-channel communication strategy (physical, digital and mobile) using a single technological platform while ensuring the optimal quality of the customer data that they use. Tamir Sigal - Marketing Director, Enterprise Digital Solutions
Given the increase in parcel volumes stemming from the strong expansion of e-commerce, shippers are looking for more efficient solutions in automated shipping and tracking. At the other end of the chain there is strong demand for new services. Carriers are looking to simplify parcel delivery, while recipients want more options for selecting their carrier and receiving their parcels. GĂŠrard AzĂŠ - Marketing Director, Neopost Shipping
Digitalization is a source of performance and competitiveness. And numerous small companies agree, but they are held back by the complexity of the tools themselves and the complexity of integrating them in their specific IT environments. Everyday use is the key factor for these customers. They want simplicity, easily accessible tools, autonomous users and a limited financial commitment. Xavier Neboit - Head of Marketing, SME Digital Solutions
In today’s world, businesses need to leverage digital as well as physical communications to secure maximum engagement from their customers. To send or receive mail, packages or digital invoices, delivery options are now so diverse, complex and powerful that they need expertise to help them chose the best solution for their company. Solving these new business problems, this is what is expected from us. Alain Fairise - President Neopost North America
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 Very
few changes have been made to the foundations of our transformation strategy. But the dynamics in place have accelerated. Denis Thiery
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THE ALLIANCE OF MAIL AND DIGITAL COMMUNICATION
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THE ALLIANCE OF MAIL AND DIGITAL COMMUNICATION
INTEGRATING DIGITAL TOOLS IN SME PRACTICES
S
mall and medium-size enterprises form the traditional customer base of Neopost, which has long provided them with its franking and mail management systems. Today’s wide array of communication channels and growing volume of communication flows are a source of major complexity for these companies, which cannot be expected to invest in resources specifically for information systems. Yet succeeding in the challenge of integrating mail and digital communication is vital to efficiency and productivity.
Intelligent mail solutions
Enriched offering
Neopost’s franking and document management systems automate all stages of mail flows, from production, optimized folding and inserting into envelopes, weighing and postal rate calculation to applying postmarks on envelopes. Processing costs are reduced and the sender may be eligible for preferential postal rates.
Alongside its range of mail processing solutions, Neopost is introducing supplementary tools allowing companies to develop true multi-platform customer communication and optimize parcel management. The development of solutions provided in SaaS mode will make it even easier for SMEs to adopt new tools.
Neopost’s broad range of equipment, software, financing and related services brings each company a need-adapted mail flow management solution whatever its size, business, mail volumes and the nature of the correspondence, whether transactional or promotional.
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The Neotouch solution Neopost brings customers a hybrid mail solution called “Neotouch”. Launched in France, the apps available on the Cloud manage the distribution of documents by mail, fax, email or SMS and then store them electronically. The offering is currently being launched in the United States and will subsequently be rolled out widely.
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22MILLION PAGES
Electronic billing is expanding as a result of regulatory change but requires the use of solutions that factor in constraints on traceability, security, legal storage and electronic signatures. Drawing on its experience in the development of solutions approved and certified by the relevant authorities, as is the case with franking machines, Neopost is now providing SMEs with SaaS/Cloud solutions for on-demand mail distribution and for electronic invoicing in France and in Germany.
processed by the Neotouch hybrid mail solution in 2015
m en t ip Sh
ng Fr an ki
de r/ in se
Legal storage
Em
ai
l
Recipients
El si ect gn ro at ni ur c e
Sender
Fo l
Pr
in
tin g
rt er
sy st em
s
Prepaid mail or digital mail, complementary options
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THE ALLIANCE OF MAIL AND DIGITAL COMMUNICATION
The digital move of Neopost customers
S
MEs are now firmly on the path towards digitalization. In 2012, 35% of the companies surveyed1 said they had yet to form a plan on integrating digital technology in their communication practices. That proportion fell to just 13% two years later. But in that second survey2, 46% of them said they had yet to initiate a plan, reflecting the size of the potential market for Neopost. Indeed, only 16% said they had equipped themselves with an entirely digital system.
The degree of digitalization of Neopost customers 2012 3%
2014 16%
Fully digitized Steady state reached On the agenda
62%
25%
No plan to digitize
46%
35%
13%
2012 - Survey carried out in collaboration with ReD Associates with 3,200 companies in eight countries: Canada, Denmark, Finland, France, Germany, South Korea, the United Kingdom and the United States. 1
2014 - Survey carried out in collaboration with CVA 2014 with 4,000 companies in four countries: France, Germany, the United Kingdom and the United States. 2
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The use of digital technology in marketing campaigns With its personal touch and affinity dimension, mail remains a preferred and effective medium for targeted communication. Technological evolutions are making it increasingly intelligent and providing high value-added services such as traceability, address quality and enhanced content. For example, QR codes combine print and digital in marketing campaigns, with recipients encouraged to find out more about a sales offer on a website by scanning the code printed on their mail item with their smartphone.
Multi-channel communication accessible to SMEs The tools provided by Neopost in addition to its mail management systems enable customers to develop true multi-channel communication. The centralized output management software OMS-500 uses expert technology developed by GMC Software that has been simplified and adapted to the Group’s SME customers. The software takes the preferences of each user into account and sends the right mail to the right person at the right time via the right distribution channel, be it mail or email.
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THE ALLIANCE OF MAIL AND DIGITAL COMMUNICATION
Further extending the digital experience
B
ecause it understands the needs of SMEs, Neopost is the ideal partner for supporting them in their digital transition and changing needs. By bringing them digital and shipping solutions in a format adapted to their specific needs, the Group offers solutions that supplement physical mail management.
From flat mail to parcels In several countries, Neopost brings SME customers, small parcel volume senders, solutions for managing shipments online and comparing prices negotiated with Neopost partner carriers. In the United States, Neopost has successfully launched its NeoShip software that allows customers to use franking machines to print USPS-compliant labels valid for parcels. The innovation means users can qualify for attractive rates.
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In one year in the United States, over one million parcels have already been shipped using NeoShip, Neopost’s dedicated software.
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Calendar
Contacts
CRM/Sales
Invoices
Marketing email
Surveys
Employees
Recruitment
Settings
Neopost Business Apps To take things even further, Neopost has developed a special platform for receiving professional apps in a broad array of fields including finance, accounting, customer relations management and human resources. The platform is already up and running in the United Kingdom and the United States.
At the heart of the start-up ecosystem
NEWS
The creation of Neopost Labs illustrates the Group’s intention to structure its open-innovation policy. Neopost Labs was designed to position Neopost as the large-scale industrial partner of business accelerator investors and innovative start-ups in technologies, business models, working or marketing methods. Neopost can therefore better spot the new trends that will lead to future products and services, notably intended for SMEs.
Neopost Labs In early 2015, Neopost had invested €5 million in Partech Entrepreneur II, the largest seed capital fund for Tech and Internet start-ups in Europe. The fund is managed by Partech Ventures and is set to invest between €300,000 and €1 million per start-up.
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THE E-COMMERCE BOOM
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THE E-COMMERCE BOOM
STRONG MOMENTUM IN PARCELS MARKET
T
he e-commerce boom is generating sweeping change in the parcels market. Volumes are increasing, the online activity of retailers is expanding, recipients are getting more and more demanding and the issue of last-mile logistics is getting tougher than ever. The needs of shippers, carriers and recipients are in continuous flux as they are looking for ever greater flexibility, visibility and productivity.
Facilitating parcel management
Software solutions for parcel shipping
Neopost has built up substantial expertise in managing parcels logistics with dispatch, tracking and reporting solutions originally developed for carriers and postal operators. These solutions facilitate the combined management of physical flows and the corresponding information flows. Drawing on this know-how, the Group has succeeded in strengthening its offering and positioning itself as a facilitator of parcel management in the space of a few years, providing solutions tailored to all the players in the value chain and adapted to the new needs stemming from the rise of e-commerce.
Shipping management solutions serve the needs of shippers and carriers. To bring these players an increasingly cutting-edge service without their having to make development and maintenance investments, the solutions on offer are operated and hosted by Neopost Shipping. They take the form of either customized web solutions or multi-carrier/multi-service delivery web services. The shipping services are managed in full compliance with the protocols of each carrier. The processes of preparation, pricing and labeling, the generation of transport documents and the transfer of information to carriers are handled in their entirety.
30MILLION parcels processed every month by Neopost Shipping solutions.
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MARKET EVOLUTION LINKED TO THE E-COMMERCE BOOM
The boom in e-commerce is generating sharp growth in parcel volumes. Carriers are shifting their business models from B2B to B2C. Long-standing postal operators are developing their parcel business. The market, long focused on carriers, is increasingly turning in to the needs of retailers, shippers and consumers.
NEWS
In January 2016, Neopost Shipping signed a new three-year contract with Royal Mail, its biggest customer. Neopost will provide Royal Mail and its express parcel division Parcelforce Worldwide with shipping and tracking solutions including the supply of software and IT equipment along with the provision of services. The new contract will respond to the strong growth in the parcel business of Royal Mail and Parcelforce Worldwide. Neopost also works with other large postal operators including Australia Post, Chronopost and Singapore Post.
Solutions for large shippers In the United States, the solutions of ProShip, a company acquired by Neopost in 2014, are certified by the leading carriers and adapted to the needs of the leading players in traditional and online retailing, logistics companies and distributors, which ship an average 50,000 parcels a day. 29
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THE E-COMMERCE BOOM
Leading-edge technologies for logistics flows and parcel processing
N
eopost Shipping continues to extend its offering and introduce innovative technological solutions for the needs of the supply chain and parcel processing. In 2015, Neopost followed through on large-scale projects in e-commerce, last-mile management for parcel collection, and traceability.
An intelligent platform for e-commerce players In March 2015, Neopost acquired a majority stake in Temando, an Australian firm specialized in software solutions for managing multi-carrier shipments for the e-commerce sector. Its platform connects all the logistics resources involved (carriers, warehouses, shops, stocks, etc.) to provide e-retailers and their customers with a seamless delivery solution. They can use the platform to prepare quotations in real time with numerous carriers, calculate the total transport cost, including taxes and duties, schedule shipping, check inventory and the location of stock, and offer the most economical routing options according to the end customer address. Temando’s platform will be launched in France, the United Kingdom and the United States in 2016.
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In 2015, seeking to ensure logistics excellence for its customers, La Redoute, the French e-commerce leader in fashion and homeware, selected Temando’s solution for its flexibility in terms of the choice of carriers across Europe, the quality of its tracking and traceability functions, and for its scalability.
NEWS
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2MILLION
parcels have already been packed by the four Neopost packing machines in the pilot phase.
In January 2016, Neopost announced a partnership project with Yamato Transport for the implementation and management of a network of automated parcel lockers in Japan.
NEWS
Innovation for parcel optimization Neopost has developed a continuous wrapping system, called CVP-500, which optimizes parcel size in three dimensions and automates production. By adapting the parcels on a customized basis to the shape and volume of their content, the system avoids the need to use filling material and reduces parcel bulk. The technology of the concept has been validated and four prototypes are currently in operation in Benelux. A fifth machine will soon be installed at Cdiscount, a major French e-commerce player. In a favorable environment of volume-based pricing by carriers, Neopost is evaluating the business model of CVP-500.
Automated lockers for parcel collection
Bespoke traceability solutions
In France, Neopost has created a joint venture with GeoPost to develop Packcity, a network of automated lockers implemented in public places with high footfall (including train stations, shopping malls and city centers) and used for the collection of web orders. Users receive email or text notification when the parcel is ready for pick-up at the locker of their choice, with a secure access code. Neopost’s automated lockers also meet the needs of specialist Click & Collect retailers and large companies keen to offer their employees a concierge service.
Neopost provides bespoke traceability solutions. The solutions are implemented by the Group, which is then responsible for operational monitoring. The solutions cover all the key links in the supply chain, from shipment through to the delivery of goods and parcels. They are based on the collection of information via systems using barcode scanning or RFID technology. Neopost handles the analysis and storage of the data, to which it ensures real-time access through a Track & Trace database hosted on Neopost servers. In 2015, working together with Capgemini and BearingPoint, Neopost Shipping finalized the roll-out for the French Defense Ministry of an information system for managing the shipment and traceability of military material and equipment using RFID technology.
NEWS
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THE CUSTOMER AT THE HEART OF ORGANIZATIONS
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THE CUSTOMER AT THE HEART OF ORGANIZATIONS
THE GOLDEN AGE OF THE CUSTOMER
S
olicited on all fronts, over-informed and mobile, customers are becoming increasingly demanding. They expect rapid interaction, immediate answers and easy access to the information they need on their various screens.
Creating the bases of an optimal customer experience Companies are placing the customer at the heart of their organizations. Faced with growing demand for selective information and instant exchanges, companies are developing adapted, customized and interactive communication via the various channels covering the entire customer experience. To boost their effectiveness and responsiveness, they are adopting practices that allow them to establish lasting relationships with their customers while constituting a true performance lever.
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What is Customer Communication Management (CCM)? Customer Communication Management tools are used to create, disseminate and store all customer communications, regardless of the nature of the exchange – sales, promotion, regulation or accounting. They can also be used to manage the various distribution means.
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GMC Inspire™, the Neopost solution Inspire™ is the software suite developed by GMC Software, a Neopost subsidiary since July 2012. It is a unique solution for customer communication management, compliant with ISO standards and international quality standards. Using its preview, approval and distribution functions for printed and digital documents, companies can optimize all of their customer interactions, whatever the form or communication media, from call centers, mobile phones, and tablets to SMS, web, email and print.
1 ,600 CUSTOMERS & PARTNERS SUPPORTED WITH GMC SOFTWARE A LEADER
In 2015, for the third consecutive year, in its analysis of the customer communication management software market, Gartner ranked GMC Software in the leading quadrant and number-one in terms of vision. GMC Software is also recognized as a leading solution by Forrester Research.
35
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THE CUSTOMER AT THE HEART OF ORGANIZATIONS
Innovating and satisfying users
G
MC Software is the partner of large companies looking to employ digital resources to boost their customer relations. Backed by the world’s largest research and development team in the market of customer communication, GMC Software keeps a close eye on changes in the needs of its users. In June 2015, GMC Software launched the R10 version of Inspire™. Meanwhile, the continued integration of mobile and Cloud technology is opening up even more new avenues for the development of its platform.
new customers for GMC Software in 2015.
Who uses Inspire™ ? GMC Software is a long-standing preferred partner of print service providers, a market in which it holds a 60% share with its leading product, Inspire™ software. GMC Software has successfully launched Inspire™ in vertical markets over the last few years. The company today boasts a large user base in banking and insurance as well as in telecoms, public utilities and healthcare. In 2015, a full 53% of sales were made in these new markets, compared with 30% in 2012.
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GMC continued to develop its business with financial services and insurance companies. In 2015, attracted by its omni-channel operating mode and ease of use, 37 such companies chose Inspire™, convinced of its key contribution to their customer loyalty strategies and appreciative of the benefits for recipients in receiving pleasantly laid out documentation whatever the distribution channel used.
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INSPIRE TM USERS TALK “ The support team is highly responsive, replying quickly to each one of our requests ” Manager, Financial Services, France.
“ Easy to use ” Manager, Insurance, China.
Listening to the market In 2015, GMC Software commissioned an independent market research company to survey 390 customers around the world (China, France, Germany, the United Kingdom and the United States).
“ Long-term relationship, professionalism, services ” Head of Desktop Publishing, Financial Services, United States.
“ GMC products cover virtually all our needs ” Desktop Publishing Manager, Financial Services, Germany.
98%
the survey revealed a record level of overall customer satisfaction.
The survey showed that three-quarters of the customers surveyed have been committed to a relationship with GMC Software for more than three years. 37
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THE CUSTOMER AT THE HEART OF ORGANIZATIONS
Reliable data for effective communication
Q
uality data is key to the effectiveness of a company’s communication with its contacts, customers and prospects. Missing or erroneous information leads to breakdowns in customer communication management. With Neopost’s data quality offering, customers can work on the basis of reliable, relevant and up-to-date information. For example, the address quality software captures, checks and updates customer data consistent with postal standards in the company’s databases or on its website, be it at the time the data are entered or while they are being used.
VISIONARY In 2015, Gartner ranked Neopost in the quadrant of visionaries in its market analysis of data quality.
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PREVENTING DATA MADNESS! “ I have too much data to manage .” “ We don’t know who is who .” “ Too many shipments came back to us undelivered.” “ Duplicated data? We even have quintuplicated data! ”
When top-quality data means top-quality communication A source of additional costs and dysfunctions in relationships with stakeholders, the influx of unmanaged data and a lack of information checks can pose a threat to the health of companies. The experts at Neopost’s specialized subsidiaries, including Satori Software in address quality, Human Inference in customer reference databases and DMTI Spatial in geolocation data, develop tools that guarantee the quality, integrity and intelligence of data.
OVER NEWS
, 000
Complementary fit between data quality and customer communication offers In 2015, the Inspire™ platform was extended to include an address quality module supplied by Satori Software. The new functionality has already been launched in the US market.
organizations of all sizes use Neopost address quality solutions.
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TESTIMONIALS
CUSTOMER TESTIMONIALS
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We wanted to take the human element out of our mail preparation as much as possible for compliance purposes. For Claim Eazy, quality and accuracy of documents are vitally important to us as a business, as we are working towards ISO 9001. Commenting on Neopost’s mail processing solutions. James Treacy, Co-Founder, Claim Eazy, claims management company for individuals, United Kingdom.
We don’t have to try to support the old homegrown systems. We’re now letting ProShip, the expert, do what it does best and support the systems for us. Tom Spoke, IT Global Distribution Manager, Trek Bicycles, designer and manufacturer of bicycles and related products, United States.
Sending invoices by email rather than by post ensures they are delivered to the right person through their preferred media and this also means we get paid in time. Commenting on OMS-500, a version of GMC Software’s Inspire™ software adapted for SMEs. Marcin Rutkowski, Office and Administration Manager, Ranson, bakery products supplier, United Kingdom.
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Our values and commitments guide the day-to-day conduct of Neopost, a responsible Group. Denis Thiery
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R ESP ONS IB I LITIE S 43
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RESPONSIBILITIES
NEOPOST, A PLAYER IN THE CIRCULAR ECONOMY
F
ully mindful of environmental issues, Neopost is a responsible company committed to sustainable development. In terms of the environment, the Group has taken advantage of regulatory constraints by preparing for them ahead of time and transforming them into a competitive advantage.
Ecodesign at the root of production
The 3 R’s rule
From the product design phase through to end-of-life dismantling, Neopost takes all environmental aspects into account. Be it in the choice of materials, the number of components, the ratio between product mass and packing volumes, sound emissions or energy consumption, ecodesign determines the technical specificities in production, in the equipment in use, and in recyclability conditions so as to limit environmental impacts.
The Group applies the 3 R’s rule of repairing, reusing and recycling to its ecodesigned products. Because the durability of the product is an essential component in ecodesign, the product has to be able to be dismantled, repaired and reused, and the non-toxic materials recovered must be easily recyclable.
For example, thanks to an automated standby function, a DS-35 folder/inserter, an entry-level model for office use, consumes seven times less electricity than the previous-generation equivalent model.
What is circular economy? The circular economy is an economic concept tying in with sustainable development. The aim is to produce goods and services while limiting the consumption and waste of raw materials, water and energy sources at each stage in the life cycle of the product or service.
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THE EQUIPMENT LIFE CYCLE
Reusable components
Raw materials + energy
Waste
End of life
Production Remanufacturing
Waste
Waste
Use Energy
Maintenance + energy
Distribution
All of Neopost’s franking machines comply with the specifications of the US certification Energy Star.
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RESPONSIBILITIES
REMANUFACTURING PROCESS OF A NEOPOST MACHINE
NEW CYCLE
New contract and set-up of franking machine
5 Distribution to new client
4 Recuperation of franking machine (end of contract‌) and expedition to remanufacturing site
Reception and technical diagnosis
Machine testing and packing
3 Wear parts changed, re-assembly
2 New production order
1 Franking machine to recycle
Machine to remanufacture
Disassembly and added to stock
Optimizing repair Neopost favors remote repair work, which limits travel on the part of technicians and the environmental impact of the distance traveled. Today, over 50% of repair jobs are carried out remotely. The percentage rises to a full 90% for the IS-280 entry-level franking machine. Standard exchange is possible for entrylevel and mid-range franking machines that cannot be repaired without the direct intervention of a technician. In this case, a new machine is sent to the customer within 24 hours. The original equipment is returned and integrated in the recycling process. In addition to the savings generated in terms of maintenance costs, this system improves both customer service and the quality of the machines in circulation, which will require less maintenance in the future. The standard exchange system has thus far been rolled out in Benelux, France, Germany, the United Kingdom and the United States.
Remanufacturing for a second life Neopost has been developing remanufacturing for entry-level and mid-range machines since 2012. Remanufacturing involves refurbishing equipment based on a combination of parts and sub-assemblies from machines recovered at the end of the leasing or rental contract or standard-exchange machines. Nevertheless, some products and components are systematically replaced to ensure the same high levels of quality, reliability, functionalities and appearance as a new product. In 2015, about 30% of franking machines placed to Neopost customers were from remanufacturing.
WASTE AVOIDED
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Reduced environmental impact Factoring in the entire life cycle of equipment (production, transport and use), refurbishing serves to significantly reduce Neopost’s carbon footprint. By increasing the share of refurbished machines in its installed base, the Group shrank its carbon footprint by 25% in 2014 and expects to reach 30%* reduction in 2016. * Neopost estimates on the basis of a carbon footprint of under 37% for refurbished machines.
The ecodesign process ensures a 75% recycling potential for franking machine components, notably thanks to the elimination of metallic inserts and the use of the same plastics. This ratio exceeds the thresholds set out in the WEEE directive.
In 2015 Neopost achieved an actual recycling rate of 85% with the waste from its franking machines range.
The environmental footprint of franking systems 100
37%
5%
63
3%
5% 15%
40% New product
75%
5% 15%
Remanufactured product
environmental gain
Raw materials end of life Production of raw materials Logistics Use
Contributing to job creation Refurbishing is also a way for Neopost to safeguard activity and jobs at its production site in France. By doing so, it has protected 20 direct jobs and six indirect jobs at Le Lude.
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RESPONSIBILITIES
COMMITTED TEAMS
FOSTER TEAMWORK
T
he commitment of employees is essential to the Group’s responsible approach. As such, Neopost rolls out initiatives aimed at fostering the key principles and ethical standards informing behavioral rules relative to stakeholders.
Breakdown of employees by activities (at 31 January 2016)
Headquarters and central functions: 1 % Neopost Shipping: 5 % Enterprise Digital Solutions: 13 % SME Solutions: 81 % (o/w Supply chain: 15 %)
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PROMOTE INNOVATION DRIVE TO SUCCEED
Diversity
Involvement in local communities
Neopost is a global employer. It is proud of the diversity of its employees and encourages them to create, innovate and work together. To this end, the Group has also established high ethical standards to uphold the dignity and respect of its employees.
Neopost respects local cultures and customs and supports the communities in the operating countries of its subsidiaries. Each Group entity is encouraged to play a role in social and community activities aligned with its values.
Skills development The commitment, motivation and development of employees are vital to the success of Neopost. The Group is determined to develop the employability of its staff, foster internal mobility and safeguard the balance between personal and professional life.
The Group contributes to socio-economic development through employment, through partnerships with local educational institutions and participation in charity initiatives, and by signing contracts with local suppliers as much as possible.
FOCUS ON CUSTOMERS
Freedom of expression Neopost favors dialogue and relations with its employees. Each Group entity is responsible for initiating communication with its employees and the conditions for constructive dialogue with them. In addition to its locally implemented initiatives, every two years the Group carries out a global commitment survey that gives each employee a chance to voice his or her opinions anonymously.
OUR VALUES The integration of new businesses and the new strategic direction taken by the Group in the last few years have led it to redefine its values so as to best reflect its identity.
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RESPONSIBILITIES
THE TRANSFORMATION IN FIGURES
T
he extension of Neopost’s offering is reflected in a change to its business model. Mail processing solutions generate income stemming from the sale of equipment along with recurring revenues. Neopost’s new activities are mainly software solutions provided in customer/server mode or accessible in SaaS/Cloud mode, which generates transaction-based income.
1, 003
1 ,070
1, 096
1, 113
1 ,190
Trend in sales (In € million)
Mail Solutions Communication & Shipping Solutions
80
137
186
228
278
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In 2012, Neopost initiated a deep-seated transformation of its business by developing high-performance and relevant solutions in digital communication while extending its shipping solutions offering. The strong growth in these digital and logistics activities has made a substantial contribution to sales, which have increased 18.6% in four years. Excluding currency effects, this represents annual average growth of 1.9%.
20 15
912
20 14
885
20 13
910
20 12
933
20 11
923
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Strong growth in new businesses Whether digital and logistics activities are proposed to key accounts at Enterprise Digital Solutions and Neopost Shipping or to Neopost’s traditional customer base, mainly SMEs, their total sales have achieved substantial annual growth rates in the last four years.
Average annual sales growth rate
Enterprise Digital Solutions
Neopost Shipping
Average annual organic sales growth rate 2012/2015 1
CSS = Communication & Shipping Solutions
234
2
245 CSS1 business within SME Solutions Average annual growth rate 2012/2015 excluding currency effects
Current operating income1
134
134
Net income
158
20 15
+15%
20 14
+11
%
20 14
%
20 15
+19% +21
20 15
(In € million)
+30%
20 14
+30%
Neopost, a highly profitable group generating strong cash flow
187
Net operating cash flow
In 2015, Neopost successfully maintained a current operating margin before acquisition-related expense of 19.7% of sales. Net income was stable, representing a net margin of 11.2% of sales. Restated for an extraordinary VAT payment of €37 million in VAT in the United Kingdom, net cash flow from operating activities increased by 18%.
1
Before acquisition-related expense
Excluding an extraordinary VAT payment of €37 million in the United Kingdom
2
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RESPONSIBILITIES
NEOPOST ON THE STOCK MARKET
T
o fully raise awareness on the objectives of Neopost’s transformation, the Group leads a policy of transparent and informative financial communication both with equity investors and institutions holding bonds and credit lines.
In 2015, it organized nearly 400 meetings with the financial community. It has also entirely redesigned the financial section of its website to make information searches quick and easy.
Gaële Le Men
Investor Relations Officer
Shareholding structure as of 31 January 2016 Institutional investors 83.6 % Individual shareholders 13.7 % Directors, management and employees 2.3 % Treasury shares 0.4 %
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Share price
3.72
Neopost (price per share - €) SBF 120 index (rebased)
(as of 30 April 2016) 70
€
Net income per share
60
1.70
50
40
30
€
Dividend per share in respect of 2015
20
A 30
1J
an
.2
pr .2
0 16
0 16
0 15 .2 1J
an
.2 an 1J
1F eb .2
0 13
0 14
10
Financial Communications Schedule 31 January 2016
Closing of 2015 accounts
5 February 2016
Ex date for the 2015 interim dividend
9 February 2016
Payment of the 2015 interim dividend: €0.80 per share
29 March 2016*
2015 full year sales & results
30 March 2016
Information meeting
1 June 2016*
2016 Q1 Sales
1 July 2016
General Meeting of shareholders
9 August 2016
Payment of the balance of the 2015 dividend
27 September 2016*
2016 half-year sales & results
28 September 2016
Information meeting
1 December 2016*
2016 Q3 sales
31 January 2017
Closing of 2016 accounts
End of March 2017*
2016 full year sales & results
* Publication after the closing of the Premier Marché of Euronext Paris
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CREDITS
The Neopost 2015 annual report is printed on Satimat Green paper produced from 60% recycled fibre.Compared to non-recycled paper, this choice reduces the impact the environment by:a non-recycled paper, the environmental impact was reduced by: By usingon Satimat Green rather than By using Satimat Green rather than a non-recycled paper, the environmental impact was reduced by:
790
kg of landfill
18 538 litres of water
790
91
kg of landfill 91
913 kg CO
118 704538 litres of water
1 704 1 283 kWh of energy
kg CO2 and greenhouse gases
kWh of energy
2
and greenhouse
km travel in the average gases European car
kg of wood
913
km travel in the average European car
1 283 kg of wood
Source : Carbon footprint data evalated Labelia Conseil. Source : Carbon footprint data evaluated by Labelia Conseil. Virgin fibre paper data from by latest European BREF Source : Carbon footprint data evaluated by Labelia Conseil. Virgin fibre paper data from latest European BREF Virgin fibre paper data. data from latest European BREF data.
data.
Editorial and writing: Neopost - DDB Financial Creation, graphic design, illustrations and production: Futurama Links - Futurama PDF enhanced by Goodbye [static] PDF / Publishing for Good Photos: P. Boulanger (p. 5, 6, 10, 11 et 52) Neopost (p. 7, 18 et 48) Samot / Shutterstock .com (p. 5, 32) Denis Vrublevski / Shutterstock .com (p. 19) Connel / Shutterstock .com (p. 26) Moustache Girl / Madiz / Naypong / Shutterstock .com (p. 27) Baranq / Shutterstock .com (p. 33)
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2015 Annual Report
113, RUE JEAN-MARIN NAUDIN 92220 BAGNEUX - FRANCE www.neopost.com
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Annual Report
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