NEOPOST_REGISTRATION_DOCUMENT_2017

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Management Report

Review of the Neopost group’s financial position and results in 2017

Review of the Neopost group’s financial position and results in 2017

In full-year 2017, the Group generated sales of 1,111.7 million euros, down (4.1)% year-on-year, (2.0)% excluding currency effects, and (2.2)% on an organic basis. 2017 current operating income before acquisition-related expense was 202.3 million euros, down from 216.0 million euros in 2016. The Group’s current operating margin before acquisition-related expense (1) was 18.2% of sales in 2017

versus 18.6% in 2016. After acquisition-related expense, the current operating margin amounted to 191.0 million euros or 17.2% of 2017 sales. The tax rate shrank to 0.6% from 25.1% in 2016 due to the lowering of the tax rate in the United States as well as the cancellation of tax on dividends in France.

Income statement

(In millions of euros)

31 January 2018

31 January 2017

Sales

1,111.7 100.0% 1,158.7 100.0%

Cost of sales

(279.3)

(25.1)% (293.3)

(25.3)%

Gross margin

832.4

74.9% 865.4

74.7%

R&D expenses

(56.9)

(5.1%)

(52.0)

(4.5)%

Selling expenses

(279.6)

(25.1)% (293.0)

(25.4)%

Administrative expenses

(194.9)

(17.6)% (197.1)

(17.0)%

Maintenance & other operating expenses

(99.9)

(9.0)% (106.8)

(9.2)%

Employee profit-sharing and share-based payments

1.2

0.0%

(0.5)

(0.0)%

Current operating income excluding expenses related to  acquisitions

202.3

18.2% 216.0

18.6%

Expenses related to acquisitions

(11.3)

(1.0)% (13.1)

(1.1)%

Current operating income

191.0

17.2% 202.9

17.5%

Proceeds from asset sales

(0.1)

0.0%

0.0

0.0%

Structure optimization expense

(13.2)

(1.2)% (15.3)

(1.3)%

Other operating expenses

(11.3)

(1.0)%

(6.7)

(0.6)%

Operating income

166.4

15.0% 180.9

15.6%

Financial income/(expenses)

(34.6)

(3.1)% (30.5)

(2.6)%

Income before taxes

131.8

11.9% 150.4

13.0%

Income taxes

(0.8)

(0.1)% (37.7)

(3.3)%

Income from associated companies

1.7

0.1%

1.3

0.1%

NET INCOME

132.7

11.9% 114.0

9.8%

Attributable to:

• •

holders of the parent company

133.8

12.0% 118.2

10.2%

non-controlling interests

(1.1)

(0.1)%

(4.2)

(0.4)%

Current operating margin before acquisition-related expense = current operating income before acquisition-related expense/sales. (1)

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REGISTRATION DOCUMENT 2017 / NEOPOST