Pitney Bowes Discusses Business Strategy at the Bank of America Leveraged Finance Conference

Rhea-AI Summary

Pitney Bowes (NYSE: PBI) presented its business strategy at the Bank of America Securities 2022 Leveraged Finance Conference. Executive Jason Dies emphasized the potential of their Sending Technology Solutions, anticipating shipping to contribute about a third of segment revenue by 2026. Gregg Zegras noted that the Global Ecommerce sector is set for significant growth, with projected Domestic Parcel network volumes between 195-200 million by year-end 2022 and an expected gross margin increase of 400 basis points in 2023. Ned Zachar highlighted durable market positions despite industry headwinds.

Positive

• Projected shipping revenue to be one-third of segment revenue by 2026.
• Domestic Parcel network volumes expected to reach 195-200 million by 2022 year-end.
• Gross margin improvement of up to 400 basis points in 2023 for Domestic Parcel.
• Long-term EBIT margins for Global Ecommerce projected at 6-8% by 2026.

Negative

• None.

STAMFORD, Conn.--(BUSINESS WIRE)-- Pitney Bowes Inc. (NYSE: PBI), a global shipping and mailing company that provides technology, logistics, and financial services, outlined their business strategy today at the Bank of America Securities 2022 Leveraged Finance Conference. Jason Dies, Executive Vice President, Pitney Bowes Sending Technology Solutions (SendTech), Gregg Zegras, Executive Vice President, Pitney Bowes Global Ecommerce, and Ned Zachar, Vice President, Investor Relations spoke at the conference.

Jason Dies spoke about new possibilities in growing markets for the legacy Sending Technology Solutions business. He defined a durable and profitable business model, with shipping expected to be roughly a third of segment revenue by 2026.

“SendTech is a predictable and durable cash generation engine on the mailing side and we have a growth opportunity we can take advantage of on the shipping side as well,” said Dies. “We aspire to and will become a growth business overall when you put those two addressable markets together.”

Gregg Zegras highlighted how the Global Ecommerce Business is well positioned to pursue a large and rapidly growing market opportunity. He spoke about the work the team has done to build the network, improve service levels and customer satisfaction, and increase volumes and margins.

“Off a strong Black Friday and Cyber Monday, we expect 2022 exit-rate volumes to be on the high end of 195 to 200 million in our Domestic Parcel network and Domestic Parcel gross margin improvement of up to 400 basis points in 2023,” said Zegras. “Long-term, we expect the Global Ecommerce business to achieve 6 to 8 percent EBIT margins in 2026 based on our current product mix and Capex levels to be approximately 20 percent of EBITDA.”

“We have seen consistent service levels in the low to mid 90 percent. This bodes well for the future of our business. These service levels allow us to go out and win new business and retain the customers we have,” added Zegras.

Ned Zachar added, “SendTech and Presort have leading market positions and are finding new ways to grow despite some natural headwinds and are much more durable businesses than people may have thought. In Global Ecommerce, EBITDA should be higher than Capex in 2023.”

A replay of the audio webcast, transcript and slides can be accessed at www.pb.com/investorrelations.

Today’s presentation underscored the Global Ecommerce strategy outlined in September at the Deutsche Bank 30^th Annual Leveraged Finance Conference.

About Pitney Bowes

Pitney Bowes (NYSE:PBI) is a global shipping and mailing company that provides technology, logistics, and financial services to more than 90 percent of the Fortune 500. Small business, retail, enterprise, and government clients around the world rely on Pitney Bowes to remove the complexity of sending mail and parcels. For the latest news, corporate announcements and financial results visit https://www.pitneybowes.com/us/newsroom.html. For additional information visit Pitney Bowes at www.pitneybowes.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221129006059/en/

Editorial -

Bill Hughes

Chief Communications Officer

203.351.6785

203.252.1153

Financial -

Ned Zachar, CFA

VP, Investor Relations

203.614.1092

Alex Brown

Senior Manager, Investor Relations

203.351.7639

Source: Pitney Bowes Inc.

FAQ

What are Pitney Bowes' growth projections for shipping revenue?

Pitney Bowes expects shipping to contribute about one-third of segment revenue by 2026.

What are the 2022 year-end volume expectations for the Domestic Parcel network?

The company anticipates Domestic Parcel network volumes to be between 195 to 200 million by the end of 2022.

What margin improvements does Pitney Bowes expect in 2023?

Pitney Bowes expects a gross margin improvement of up to 400 basis points in 2023 for the Domestic Parcel segment.

What is the long-term EBIT margin target for Pitney Bowes' Global Ecommerce business?

The long-term EBIT margin for the Global Ecommerce business is projected to be between 6-8% by 2026.