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.
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.)