Thursday, June 27, 2013

Service Point – Update and New Documents

Earlier today, I came across a couple of fairly recent documents Service Point (the Spain-based parent company) filed with the Spanish Bolsa Stock Exchange, and, for those of you who follow developments with and at the two “publicly traded” companies who are involved in the Reprographics Industry, I thought I’d share these documents with you …. and add a few comments.

We previously posted a note on the Reprographics 101 Blog (back when it was being published through the IRgA web-site) about SP’s Q1 2013 financial results and full-year 2013 projections), and we aren’t going to make any further mention of that.  But, here’s a link to the report SP recently filed with the Bolsa Exchange, and please note that this report is in Spanish.  If you want to read it in English, you can download the document and then upload it to Google Translate.

SP Q1 2013 Financial Results

Going further, this next document, Service Point’s most recent “Investor Presentation” is in English!  I enjoy reading through SP’s Investor Presentation Documents; SP’s person who puts these together does an outstanding job, graphically speaking!

SP Investor Presentation (May 2013)

A few comments about the information in the Investor Presentation:

As to SP’s sales in the U.S., SP points this out:

“United States (8% of total group revenues): The U.S. business showed clear signs of recovery during the year 2012, and continues at the same rate of evolution during the first quarter of 2013.”

SP’s sales in the U.S. in 2012 were 15.9 million Euros, which, at an exchange rate of 1.30 works out to approximately $20.7 million US Dollars.  In previous posts on Repro 101, we’ve pointed out that SP’s U.S. Sales had (back around 2005-6) reached the $43-$45 million USD range (per information we received from an ex-President of the Service Point USA subsidiary.)

In a previous note about Service Point’s Q1 2013 financial results, we pointed out that we were a bit fuzzy as to the status of SP’s 51%-owned French subsidiary (known at Reprotechnique.)  We previously reported that Reprotechnique had gone through and completed a reorganization of its debt, but, now that we’ve seen what SP says in its most recent Investor Presentation, the picture – as to what’s going on with Reprotechnique – is much clearer.  Here’s the paragraph I’m referring to:

“Service Point sales in the first quarter amounted to 46.2 M €, 15.7% by below those obtained in the same period last year, mainly due to changes in the scope of consolidation (out of France), changes in the conditions of invoicing of certain contracts with customers in the Netherlands (which have no impact at the level of margins) and the impact of Easter, which this year took place during the month March. Excluding this impact, sales declined by 9.8%”

And, going a bit further on the point above (“out of France”) the Investor Presentation document, which reveals SP’s “sales by country” (flags indicate the countries SP operates in) does not have a French flag! So, SP does indeed appear to be “out of France.”

Well, anyway, this was an interesting development, SP “out of France”, for SP only bought into Reprotechnique in May 2008:

“Barcelona, 24 April 2008 - Yesterday Service Point Solutions S.A.(ticker: SPS.MC) has reached an agreement to acquire a 51% (interest) in Reprotechnique S.A., one of the leading digital business-to-business reprographics companies in France with yearly sales in excess of 21 Mil EUR . SPS has agreed the call option for the remaining 49% of the shares that can be executed in 2012. Reprotechnique, founded in 1963, has a long and established market presence. Since then, the Company has grown both organically and through acquisitions. The Company has national network of approximately 20 locations and currently employs around 300 people.”
From Reprotechnique’s home page (copied off of home page and translated to English) on June 27, 2013:

“Since 1963, the group Reprotechnique mastery of new technologies related to its business, digital printing, and leads a permanent change that allows it to constantly adapt to the changing needs of its customers in terms of copying. Since 14 May 2008, is part of Reprotechnique Service Point Solutions and joins the No. 1 in Europe for document management solutions. Service Point Solutions is listed on the Madrid Stock Exchange company. In total, approximately 120 employees, technical staff, sales engineers and consultants, operators and deliverymen, spread over most of the country providing the best service tailored to the needs of our customers.”

Well, it “sounds like” Reprotechnique, from May 2008 to the present day, went from 300 employees to 120 employees.  I had no idea that the reprographics business in France had been rocked to that extent.  Wow!

Recently, SP reached a “standstill” agreement with its lenders and, in conjunction with that, mentioned this in one of its filings:

“From the standpoint of equity, the company is currently undergoing a financial deleveraging. After selecting a firm of professional advice, the company is exploring various alternatives that can include the acquisition of new resources or the divestment of certain assets, in order to get a solid boost in the capital structure.”

For those of you who like to compare your own strategic plans with those developed by others in the industry, I encourage you to view SP’s Investor Presentation.

SP’s share price closed at .11 Euro cents per share yesterday.

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