Pitney Bowes 2013 Annual Report Download - page 33

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22
Enterprise Business Solutions
Enterprise Business Solutions revenue for 2013 was $942 million, an increase of 3% compared to 2012 and EBIT was $138 million, a
decrease of 11% compared to 2012. Enterprise Business Solutions revenue for 2012 of $910 million was flat compared to 2011, and
EBIT of $155 million was up 1% compared to 2011. Within the Enterprise Business Solutions group:
Production Mail
Production Mail revenue increased 6% in 2013 to $512 million compared to 2012. Higher sales and installations of large production
printers globally and sorters in North America resulted in an 8% increase in Production Mail revenue, while higher supplies sales due to
the growing base of production printers contributed to a 2% increase in Production Mail revenue. Lower support services revenue primarily
due to fewer maintenance contracts on new equipment installations resulted in a 3% decline in Production Mail revenue. EBIT increased
12% to $55 million in 2013 compared to 2012 primarily due to the increase in revenue and productivity improvement initiatives.
Production Mail revenue decreased 6% in 2012 to $480 million compared to 2011 primarily due to global economic uncertainty that
existed throughout the year. Foreign currency translation had an unfavorable impact of 2% on revenue. EBIT decreased 7% to $49 million
compared to 2011 primarily due to the decline in revenue and higher mix of lower margin sales.
Presort Services
Presort Services revenue of $430 million in 2013 was flat compared to 2012 as reduced discounts in certain presort categories offset the
impact of a 2% increase in presort mail volumes. EBIT decreased 22% to $83 million in 2013 compared to 2012 primarily due to a benefit
in 2012 of $11 million from insurance recoveries, as well as margin compression in 2013.
Presort Services revenue increased 8% to $430 million in 2012 compared to 2011. A fire at one of our presort facilities adversely impacted
2011 revenue by $20 million. Excluding this impact, revenue in 2012 increased 2% primarily due to higher standard mail volumes. EBIT
increased 5% to $106 million compared to 2011; however, taking into account the impact of the 2011 fire, EBIT increased 1% primarily
due to the increase in revenue.
Digital Commerce Solutions
Digital Commerce Solutions (DCS) revenue increased 3% to $596 million in 2013 compared to 2012. Revenue from our e-commerce
cross-border parcel management solution and our digital mail delivery service drove a 12% increase in DCS revenue. However, this
revenue growth was partially offset by a decline in worldwide software revenue, which resulted in a 5% decline in DCS revenue, and
lower marketing services fees, which resulted in a 4% decline in DCS revenue. EBIT increased 14% in 2013 to $43 million compared
to 2012 as higher volumes in cross-border parcels helped partially offset the high level of fixed costs and our continuing investment in
this business.
DCS revenue in 2012 decreased 3% to $578 million compared to 2011 primarily due to a decline in worldwide software revenue attributable
to weak economic conditions and constrained public sector spending in Europe. EBIT decreased 19% to $37 million compared to 2011
primarily related to costs to build up the infrastructure for our cross-border parcel management solution offering.