Neopost has set itself the goal of accelerating its tranformation strategy and getting back to sustainable organic growth by 2022.
To achieve this ambitious target, the company decided to prune its existing activity portfolio in order to rebalance it and focus on key growth engines.
Organic investments and bolt-on acquisitions will be made in a disciplined way, squarely focusing on strategic areas in which Neopost has already proven its legitimacy and strengths.
On the other hand, Neopost will continue to reinforce its positions in key geographies where prospects for profitable growth have been identified.
To support this ambition, Neopost is changing its operating model to become an integrated company, so that it can act smarter and faster to better meet customers' expectations. Clear priorities, new way of doing business, a renewed management team, a new approach to manage solutions in a more integrated way, foster cultural change throughout the organization, which is key in the success of execution.
Rationale behind Neopost's new strategic plan and its outlines
Levers to support this strategic vision and impact on the organization
Expected outcome and vision for the years to come
With its Back to Growth strategy, the investment focus is on organic growth and bolt-on acquisitions in two key geographies: on the one hand, North America and, on the other hand, the main European countries, that together, account for 85% of the company's annual turnover.
Neopost selected the activities where it can leverage its expertise and legitimacy, the value proposition of its existing solutions, its market position and its deep understanding of customer needs.
They are the four pillars of Back to Growth strategy, the fields where Neopost will continue to strengthen its positions in its key geographies by delivering value-added hardware and software solutions, as a partner of choice.
such as Cloud-based solutions
Over the period of the plan, organic growth will be fueled by c. €100 million capex per year and strict financial criteria will be applied to bolt-on acquisitions, with an overall allocation of c. €400 million (net of divestments) on that period. Sensible re-leveraging and a tailored shareholder return policy will help to increase capital allocation flexibility.
All this is reflected in a set of targets for no later than 2022:
- Be positioned to achieve sustainable and profitable organic growth
- Rebalance our portfolio with Mail Related Solutions representing less than 50% of sales
- Maintain a high level of recurring revenues
- Remain highly cash-generative
- Keep a sound financial position