NEOPOST_REGISTRATION_DOCUMENT_2017

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Neopost group activity

History

Investments

Excluding acquisitions, Neopost invested 98.8 million euros in 2017, compared with 82.2 million euros in 2016 and 85.9 million euros in 2015. Details of investments are shown in the table below:

(In millions of euros)

31 January 2018

31 January 2017

31 January 2016

Acquisition of rights and licences

3.8

4.4

4.6

Capitalisation of research costs

27.9

24.9

25.6

Acquisition of equipment

3.6

1.8

2.7

Replacement of installed base of franking machines

52.4

33.4

32.9

IT costs

1.4

5.2

8.2

Other investments

9.7

12.5

11.9

TOTAL

98.8

82.2

85.9

The breakdown of investments by geographical area is the following:

(In millions of euros)

31 January 2018

31 January 2017

31 January 2016

Europe

48.4

54.0

57.5

North America

23.6

24.7

27.8

Asia-Pacific & rest of the world

26.8

3.5

0.6

TOTAL

98.8

82.2

85.9

Regarding acquisitions, the Group invested 23.4 million euros in 2017, mainly for the acquisition of the minority interests in Temando compared with 24.0 million euros in 2016 and 27.8 million euros in 2015. These investments and acquisitions were financed either with Group cash or with existing credit lines.

For 2018, the level of investment will depend on the strategy defined by the new Chief Executive Officer. The Group may continue to acquire targeted companies in the future if opportunities arise.

History

Neopost was formed in 1992 through the buy-out of Alcatel’s mailroom solutions division by a group of investors led by Fonds Partenaires. This division had been set up in 1970 following the acquisition of Société des Machines Havas and Satas, two companies operating in the French market for more than 40 years. It was then built up by the successive acquisitions of Roneo Vickers in the UK and the Netherlands in 1980, and FME Corp. in the USA in 1981. In 1997, Neopost was taken over by another group of investors advised by BC Partners in association with the management. Neopost listed on the main Paris Euronext market on 23 February 1999 at a price of 15 euros per share. Neopost, already number two worldwide in 2002, strengthened its position significantly with the acquisition of Ascom Hasler, the mailing systems division of the Swiss company Ascom, which was then number three in the world. In 2009, Neopost enhanced its service offering with the acquisition of Satori Software in the United States, one of the

world market leaders in postal address quality management tools. In 2012, Neopost acquired GMC Software AG a leader in the field of Customer Communications management, and Human Inference, one of the leading European Data Quality solution providers. In 2014, Neopost acquired ProShip, one of the largest providers of multi-carrier parcel shipping solutions in the United States. In 2015, the Group took a majority stake in Temando, an Australian technology company providing shipping solutionsfor the e-commerce industry. In 2016, Neopost continued to develop in digital communications through the acquisition of icon Systemhaus, the German leader in Customer Communications Management. In 2017, Neopost bought back all the minority shareholdings and now holds 100% of the company's capital.

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REGISTRATION DOCUMENT 2017 / NEOPOST