Ladies, gentlemen, dear shareholders,
It has been an honor and privilege to chair Neopost Board of Directors over the past few years.
Throughout 2018, the Board has been deeply involved in helping and challenging Neopost's management in the definition of its new strategic plan for the next four years.
The world is changing fast. Physical mail continues to decline but it will remain a very large and profitable market for the years to come. SMEs still have a long way to go to digitize and automate their business processes. The efficient management of high volume and on-demand multi-channel personalized customer interactions is becoming every day more critical as part of the customer experience.
Last but not least, as e-commerce continues to expand, solving the last mile issue of parcel delivery is a growing challenge.
For all these reasons, I can attest that the Board is fully supportive of Neopost's new strategy and firmly believes that this plan is well-suited to bring the company “Back to Growth”. The healthy financial position of the company provides a strong base to support the acceleration of its transformation.
As I have not applied for the renewal of my mandate as director, let me emphasize that over the past 18 months our governance will have greatly evolved, from a joint Chairman and CEO leadership towards an independently chaired Board. I would like to thank you for the confidence you have placed in me all along my career at Neopost, from Chief Financial Officer to Chief Executive Officer and Chairman of the Board.
The Board of directors of Neopost has ten members who are predominantly independent. Its role is to examine and approve the strategic directions taken by the Group.
The directors have been selected for their experience in strategic business development, their expertise in relevant areas of Neopost business, combined with the international scope of their careers. They come from major French or international companies acting in the fields of e-commerce, banking, software and consulting.
A lead director ensures the smooth operation of governing bodies, the absence of conflicts of interests and the good consideration of the shareholders' concerns regarding governance.
• Except for the Chairman and the Chief Executive Officer, all the members are independent
• 4 out of 10 board members are women
• The Board of directors is supported in its work by three committees
• Board meeting attendance in 2018: 95%.
Under the exclusive and collective responsibility of the Board of directors, the Audit Committee must monitor issues related to the establishment and control of accounting and financial information.
• This Committee consists of Éric Courteille (Chairman), William Hoover Jr. and Hélène Boulet-Supau, all three independent directors.
• It met 3 times in 2018.
The Appointments Committee has merged with the Remuneration Committee in September 2018, the two bodies handling highly complementary issues. In particular, this new Committee's responsibility is to provide guidance on the independence of directors and, if needed, to preselect candidates for the presidency and general management. It also makes proposals to the Board of directors regarding directors' fees, the remuneration of Group executives and the allocation of stock options and free shares.
• This Committee consists of Vincent Mercier (Chairman), Virginie Fauvel and Hélène Boulet-Supau, all three independent directors.
• The Remuneration Committee and the Appointments Committee met 2 times each separately, and 2 times as one committee in 2018.
A Strategy and Corporate Responsibility Committee was created in September 2018. The Board of directors relies on this new Committee for topics relating to the strategy and its implementation.
• This Committee consists of Richard Troksa (Chairman), Nathalie Wright and Vincent Mercier.
• It met 3 times in 2018.
The management team is a mix of managers with international skills and diverse backgrounds. It brings together the heads of centers of excellence and operations, the latter being organized into solution lines and geographical areas.
Neopost is fundamentally reorganizing its support functions. From Portfolio Management, Strategic Marketing, Supply Chain, R&D and Innovation to IT, Human Resources and Finance, central teams are positioned as centers of excellence to serve the entire organization. In addition, at the geographical level, Neopost’s range of capabilities provides opportunities for customer-based synergies and cross-selling.
The new organizational structure aims at pooling strengths, reinforcing the efficiency of common processes and creating synergies.
Product portfolio management
Neopost has decided to rationalize its existing business portfolio in order to rebalance it and focus on the main growth drivers. Resources are concentrated on a smaller number of products. Opportunities are selected according to their high potential and the objective is to offer solutions designed for a global market.
R&D and Supply Chain
Similarly, adopting shared methods, processes and subcontracting is one of the most essential initiatives undertaken by Neopost. For software solutions, the intention is to take advantage of better sharing tools, resources, best practices and infrastructure in order to streamline development costs.
Neopost invests around 5% of its revenue each year in innovation and R&D to develop cutting-edge technologies for all the company's activities. In particular, it supports NeopostLabs, the team dedicated to innovation and its experiments on major technological trends such as artificial intelligence, augmented reality and machine learning.
Neopost aims to develop cross-selling opportunities between geographies and product lines. In its traditional mail processing business, the company has a large customer base to which it can also offer its other lines of solutions for Business Process Automation, Customer Experience Management and Parcel Locker Solutions.