NEO - Neopost

[ebdem]

Dear all,

 

I am doing my first post on Neopost. The company does this:

http://www.neopost.de/sites/neopost.de/files/neopost-settings/images/neopost_logo-nav-off_2.png

Neopost SA engages in the provision of delivery solutions, mailing services and equipment . It operates through the following activities: Mail, Communication and Shipping Solutions.

 

The Mailing Solutions business provides print finishing solutions that produce professional printed materials.

 

The Communication & Shipping Solutions include logistics services and management of quality of deliveries and client communication.

Source: http://www.4-traders.com/NEOPOST-4674/company/

 

It's main competitors are Pitney Bowes http://www.4-traders.com/PITNEY-BOWES-INC-13938/financials/ and Francotyp Postalia http://www.4-traders.com/FRANCOTYP-POSTALIA-HOLDIN-530892/financials/.

 

There is some debate going on at Seeking Alpha http://seekingalpha.com/symbol/NPACY and in a german message board http://www.wertpapier-forum.de/topic/47588-neopost/. Some value funds are also investing in this company. The P/E seems historically very low and the margin of safety is around 40% - 60% - depending on the inner value that's estimated.

 

Did anyone take notice of this company? What are you opions?

 

Best

[bookie71]

I think it depends on the future of "snail" mail.  I had their equipment in my office before I retired, because I was aggravated wit Pitney Bowes.  It worked well and their service was good. (BUT so does Pitney Bowes)

[ebdem]

Thanks for your reply, bookie 71.

 

It's about the use of mail and the possibility of turning to new growth opportunities. In the new fields Communications & Shipping Neopost is growing fast - but with lower margins.

Compared to the industry Neopost (still a profitable business) has a P/E of 5-6 - the other competitors have a P/E around 10-14.

 

By the way, I have re-read the investors presentation of Neopost. Some picks:

 

debt

- the debt is highly linked to the machines. In Q1 2015 108 Mio € was operation debt an 702 Mio € were leasing debt. machines are sold as a product with long term contracts, which generats stable cash flows. in my eyes, the debt risk is small

 

growth

- eCommerce is still growing. Neopost tries to get his share of this market/growth.

- the Communication & Shipping Solutions part grew from 8% sales in 2011 to 20% in 2014. They want to have at 35% to return to positive organic growth

- the margin of the growing segments is lower as the mail segment, but the plan is to bring it to 20%

- the products in the shipping segment are interesting and innovative. for instance, look at this: http://bit.ly/1SUoGSC. so the growth plan might work out.

- in North America they seem to stabilize their numbers by growing in a shrinking market of mail solutions.

- they are still renewing the mail solutions machines - so there is a incentive to sell new ones

- the big data analysis thing of mails seems also interesting

 

organization

- Neopost is a global company. this offers opportunities for partnership. for instance they are working with FedEx and UPS.