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Pitney Bowes Annual Report 20142
Letter to Shareholders
now committed to reducing our going-rate expense
by another $100 –$125 million by 2017.
Our third strategic priority is growing our business
through digital commerce. Two years ago we identifi ed a
series of digital markets that represented approximately
$25 billion of opportunity growing at a double-digit
rate. In 2014, we grew our Digital Commerce Solutions
segment by more than 20 percent. Longer term we expect
to grow at double-digit rates in these markets. By 2017, we
expect this segment will represent 30 –35 percent of our
total revenues.
We’ve accomplished a great deal in a short period of
time and delivered on our commitments. For the fi rst
time in several years, we grew revenue for the full year.
We also met our 2014 objectives for adjusted earnings
per share and free cash fl ow. We were able to do this
This disruption continues to accelerate as the business
world embraces new software and applications, cloud
computing, mobility and social media. Pitney Bowes
is transforming to take advantage of these enormous
shifts and to extend our leadership into this new, hybrid
world. Whether we are simplifying overseas shipping
for our eCommerce clients or enabling major social
media platforms to use our location intelligence
technology, our clients are fi nding value in our ability
to help them navigate the complex world of commerce
and create lasting impact for their own customers.
Transforming a company is a signifi cant undertaking,
but we have the strategy, the assets, and the team
to succeed. We are building on our formidable
strengths — a culture of innovation, market-leading
technologies, and an enviable base of more than
1.5 million clients. We also have an outstanding team
of experienced leaders who have built businesses,
launched new brands, and optimized sales operations
in this new world of commerce.
Our Progress
While it’s still early in our multiyear journey, we have
made tremendous progress on the three strategic
priorities we introduced in May 2013.
The fi rst is to stabilize our mail business. We have
moderated the rate of decline in our SMB business
during the past two years. We have taken important
steps to evolve our go-to-market model to make it more
robust, e ective, and e cient to reach clients. We also
grew services in our Enterprise business, where we
sorted more than 14 billion pieces of U.S. mail last
year alone.
Our second strategic priority is to drive operational
excellence. We continue to enhance our business
processes, reduce ine ciencies, and streamline the
organization. We have reduced our days sales outstanding
and inventory levels. In fact, our inventory is a little
more than half what it was in 2012. In May 2013, we
committed to reducing our going-rate expense by
$100 –$125 million by 2015. We did that, and we are
pieces of mail presorted
by Pitney Bowes in 2014
14 B
of the Fortune 500 use
our products and solutions
Powering Physical and Digital Commerce