Wednesday, February 29, 2012

Service Point Solutions Announces Results for Full-year 2011

This morning, Service Point Solutions (SPS) issued a Press Release to announce its financial results for the full year 2011. Unfortunately, I found (on SPS’s webs-site) only a Spanish-language version of the press release.

For those of you who read Spanish, here’s a link to the Spanish-language version of the Press Release (feliz lectura!)…..

For those of you who do not read Spanish, I used Google-Translate to create an English-language version of the press release. Note that Google-Translate does not do a perfect job. In addition, I could not translate the tables and graphs that were in the Spanish-language version of the press release, so, if you want to see the tables and graphs that were in the press release – and I would encourage you to look at them - click on the Spanish-language version of the press release (see above for link).

Okay, here’s the English-language version of the press release:

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Service Point increased its sales by 6.4% in 2011

• The company specializes in information management and documentation, reached sales of 218.6 M €.

• EBITDA stood at 64% above that obtained in 2010, reaching € 14M.

• Sanitation of the goodwill on its investment in Spain, the USA and the Netherlands by 27.5 M €.

• Integration of Holmbergs, Swedish company acquired during the year has been positive and this subsidiary has strengthened the group's leadership in Scandinavia and has contributed to improved operating results.

February 29, 2012. - Service Point closed 2011 with net sales of 218.6 M €, representing an increase of 6.4% over the previous year.

In a context in which its main competitors have experienced a drop in sales figures, the company achieved an increase in its market share thanks to the continuous development of new services such as online printing platform B2C, Print Oasis, websites print graphic design and image development services photo albums and the transformation of some of the service centers to custom printing. At the same time, Service Point has made a bid to strengthen relations with its customer base and streamline B2B printing activity on demand.

Geographic diversification is one of the keys to the better position the company in the sector and its ability to withstand market swings.

2011 Sales by geographic area, variation from 2010 and% of sales totals

United States has shown an evolution of "low to high" throughout the year with fourth quarter significantly better than the same period in 2010.

The acquisition of Holmbergs in Sweden has been successfully integrated in 2011 and has been a decisive step towards consolidating the presence of Service Point as the leading digital printing company in the Scandinavian market.

UK business behavior has advantages over the competition mainly within its financial business.

In Central Europe (Spain, France, Belgium, Holland and Germany) developments has been mixed. Spain has decreased sales due to lower customer demand, while Germany has grown thanks to the dynamism of the business of photo albums. In the Netherlands has increased the services business activity related to mail management (mailroom and postage).

Gross margin has been placed online to our objectives with the exception of business in the Netherlands where the weight of the activity of the lowest postage and printing activity of our clients have worsened slightly in order to gross margin of the subsidiary. Gross margin was 63.1% versus 66.6% obtained in 2010 (excluding postage line in the Netherlands the gross margin in 2011 was 68.6% versus 71.0% in 2010). The company has continued its policy of demanding operational cost reductions which offset the reduction in gross margin operating cost base has been reduced by € 4.5 million in comparable terms over 2010.

EBITDA grew by 64% compared to that obtained in 2010, reaching € 14 million, assuming an improvement of 5.5 M €. Operating profit was of 1.8 M € compared to an operating loss of € 2.5 million last year.

Taking into account the environment and the negative forecasts for 2012 for most developed economies Service Point has decided, following a prudent approach, by undertaking a reorganization of part of the goodwill of our investments in Spain, USA and Holland to properly reflect the net book value in relation to anticipated results of their business plans over the medium term cleaning up goodwill totaling € 27.5 m. Amortization of goodwill is an accounting record does not affect the operational running of the business or its cash position, or the solvency purposes is considered as an extraordinary outcome.

Evolution and Development of the Business Model

During the last quarter, the company strengthened its management structure to focus the direction of business in strategic areas and creation of value.

It has created a global address for e-commerce activities and online grew 30% in 2011, have established four geographic directions to better meet the dynamics of markets in the countries where Service Point (Scandinavia, Continental Europe, UK and U.S.) and have strengthened the core functions with a new global marketing management and international purchasing function.

In geographical terms this structure will strengthen the focus and synergies and efficiencies both operationally and in terms of international clients.

Negotiations Syndicated

Service Point is currently negotiating with the banks that make up its syndicated a long-term financial structure to replace the current maturity of which is expected in July 2013. To date, negotiations are progressing positively and the company expects to conclude within the next two months.

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Blog Publisher’s comments:

Although SPS does (in the press release) make mention of its acquisition of Holmbergs in 2011, the press release does not make it clear that most of SPS’ 2011 sales increase resulted from the Holmbergs acquisition deal. Without that deal, SPS’ 2011 sales would likely have been “flat” with 2010 sales. However, even though that (i.e., flat sales) may be the case that, to me, is not all that bad. 2011 was not a particularly great year for any company involved in the reprographics industry, or, for that matter, in the printing industry. Any company that “simply” held its own in 2011 should, I think, take a bow.

When SPS released its Q1 2011 financial results report, SPS did say this about its acquisition of Holmbergs…..

“Holmberg’s Acquisition: Service Point closed the acquisition of Holmbergs in Sweden on 30 April 2011. Holmbergs is the leading provider of digital print and document management services in southern Sweden (Malmo and Lund) and northern Denmark (Copenhagen.)”

SPS went on to say…..

“Acquisition Highlights: The acquisition will boost 2011 revenue by 6% and EBITDA by 9%, in line with Service Point’s targets, we well as being significantly EPS accretive.”

SPS’ USA 2011 sales came in at 16.508 mil Euros. That’s about 8% of SPS’s total (worldwide) sales. As I’ve pointed out in one or more previous articles on this blog about SPS, SPS’ USA division, in its heyday (when Mark DiPasquale was President of that division) had sales of around $43 mil (USD.) I’m sure you can do the conversion math on your own, then do a comparison of “before” and “now.” (I’m having dinner with Mark in Boston, tomorrow night.)

Monday, February 27, 2012

President of Canon Business Solutions resigns

This message is to inform you that Tod Pike has resigned his position as President of Canon Business Solutions, Inc. in order to pursue another opportunity. Over the past 18 years, Tod has contributed to our success in several leadership positions including President of MCS, Executive Vice President of Canon Canada, Senior Vice President of ISG and as President of CBS.

Please join me in wishing Mr. Pike success in his new endeavors.

As Chairman and CEO of Canon Business Solutions, I will also assume the duties of CBS President effective immediately. I will delegate my responsibility as the leader of the CBS Sales function to Toyo Kuwamura until a more long term solution can be arranged. The functional areas of Budget and Human Resources will permanently report to Mr. Kuwamura effective immediately.

I look forward to spending more time with the people of CBS as we work together to reach our 2012 goals. Please support me in this effort.

Joe Adachi

President and CEO

Canon U.S.A., Inc.

Autodesk (ADSK) earnings-call transcript; comments about AEC

From the comments made by Carl Bass, Autodesk’s CEO:

Fourth quarter revenue was driven by growth across all of our major geographies, with particular strength in Americas. All of our businesses performed well, driven by demand for our suites. We achieved record results in several areas, and we made solid progress in advancing our operating margin and EPS.

There were several areas of notable growth and achievement during the quarter, including 12% growth in total revenue; 25% growth in total suites revenue; 18% growth in revenue from commercial new licenses; record revenue levels in AEC, Manufacturing and the Americas; record maintenance billings in deferred revenue; 360 basis point improvement in non- GAAP operating margin; 31% growth in non-GAAP EPS; and solid cash flow from operations.

We also continued to see our investment in the government vertical payoff. We won some high profile contracts with large federal and international agencies. We recently closed deals with the Brazil National Department of Transportation Infrastructure and the New Mexico Department of Transportation. In only 2 short years, we have won 6 state DOTs, and we believe that we can further expand our business in this sector.

So to wrap things up, the fourth quarter was another strong quarter, capping what was a terrific year of consistency and growth for Autodesk. We're confident in our ability to deliver continued double-digit growth in FY '13 as we focus on our 5- year targets of 12% to 14% revenue CAGR and operating margins of at least 30%. And finally, I want to thank our employees and partners for their outstanding efforts and essential role in delivering these great results.

From the analyst Q&A session:


Your next question comes from the line of Steve Ashley from Robert W. Baird.

Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division

I would just like to drill down on the AEC business. The assumption, I guess, is that the U.S. was probably very strong. But could you comment on how the AEC business was in Asia Pac and EMEA, and what your kind of outlook is for the business in those markets?

Carl Bass

Yes, it certainly was strong in the U.S., and we were seeing some form of recovery in the AEC market in the United States. We've really hit the tipping point with BIM or building information modeling. I mean, we've hit the point where there's huge amount of demand from owners. It's being mandated by government agencies. And as we've always talked about, the drivers -- to a large extent, the place where most of the money is spent is in the construction part of AEC. And what we've seen around the world definitely differential rates. But worldwide, we're seeing the adoption of BIM technology. And so for example, historically, Japan has been a laggard with respect to the adoption of technology. They've been primarily doing 2D technology in AEC. And just in the last year, we've seen the leading firms, the genecoms [ph] in Japan all adopt BIM technology. So that's a dramatic change that, again, like I talked about before, has a huge spillover effect for the entire industry. And I've said it before, say it again, it's no longer a question of if, but really of when people will be doing 3D modeling and simulation and visualization in AEC. And so I think we're just in the sweet spot of the adoption. Certainly, the macroeconomics in each of these countries affects it on a quarterly basis. But if you kind of stand back and squint, you can just see broad adoption of a new way of doing business.

Leading-edge Document Management, Reprographics, Scanning and Archiving Services and Cloud Distribution and Storage services – brought to you by

Dudley's Blueprint Service ….. or by Speedy Repro, or by Bobby’s Quick-Print, or by Andy’s JiffyPrint.

From a branding perspective, is the name of your company important or is it a non-factor? And, if it is important, than does your company’s name reflect the image that you want to, need to, present to prospects?

While I certainly do realize that tradition is important (and I, myself, am quite nostalgic) and, like you, understand that your “customers” know who you are, know what you offer, and know how you go about your work – growing a company requires one to attract new business – I’m talking about firms referred to as “prospects”, people you do not do business with, but would like to.

Prospects do not know who you are. Their first impression of you will come from the name of your company. Does the name of your company create the perception, in the minds of prospects, that you are the company they should choose to do business with? Or, does it create the perception that you are stuck back in the 80’s, 70’s, or worse, the 60’s or 50’s?

My mom used to say “you can’t judge a book by its cover.” But, while that may well-apply to dating, I certainly don’t think that statement applies to branding and perception.

When’s the last time you gave some though to rebranding, changing the name of your reprographics company?