Pitney Bowes 2015 Annual Report Download - page 40

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24
Enterprise Business Solutions
Production Mail
Production Mail revenue decreased 9% in 2015 compared to 2014. Revenue was unfavorably impacted by 5% from foreign currency
translation and by less than 1% from Divested Businesses. Excluding the impacts of foreign currency and Divested Businesses, production
mail revenue decreased 3% primarily due to declines in support services revenue of 5% as some in-house mailers moved their mail
processing to third-party service bureaus who service some of their own equipment. Equipment sales decreased 1% compared to the prior
year as lower sales in Europe and Asia-Pacific were mostly offset by higher sales in the United States. Despite the decline in revenue,
EBIT increased 1% in 2015 compared to 2014 primarily due to a higher margin product mix and ongoing cost reduction initiatives.
Production Mail revenue decreased 10% in 2014 compared to 2013 primarily due to a 19% decline in equipment sales due to significant
installations of production mail inserters and high-speed printers to certain enterprise customers in 2013. Support services revenue also
declined but was more than offset by higher supplies revenue due to the growing base of production printers. EBIT decreased 14% in
2014 compared to 2013 primarily due to the decline in revenue.
Presort Services
Presort Services revenue increased 4% in 2015 compared to 2014 primarily due to a 6% increase in the volume of mail processed. EBIT
increased 7% in 2015 compared to 2014 primarily due to the increase in revenue and lower transportation costs.
Presort Services revenue increased 6% in 2014 compared to 2013 primarily due to a 2% increase in the volume of first-class mail processed
and improved operational efficiencies. EBIT increased 18% in 2014 compared to 2013 primarily due to the increase in revenue and
improved operational efficiencies.
Digital Commerce Solutions
Software
Software Solutions revenue decreased 10% in 2015 compared to 2014. Foreign currency translation unfavorably impacted revenue by
5%. Software revenue in 2015 compared to 2014 was also impacted by 4% due to more significant licensing deals in 2014 as compared
to 2015. Excluding the impact of foreign currency and significant licensing deals in 2014, software revenue declined 1%, primarily due
to declines in maintenance, data and services revenue. EBIT decreased 5% primarily as a result of lower high-margin licensing revenue.
Software Solutions revenue increased 9% in 2014 compared to 2013, primarily due to a higher worldwide licensing revenue from our
software solutions products, particularly enterprise location intelligence. Licensing revenue increased 36% in North America and 29%
internationally, primarily due to product enhancements and investments in the specialization of the software sales channel. EBIT increased
7% primarily due to the increase in revenue.
Global Ecommerce
Global Ecommerce revenue increased 29% in 2015 compared to 2014 primarily due to the acquisition of Borderfree and higher volumes
of packages shipped from our U.K. outbound cross-border service facility, which began in the fourth quarter of 2014. Volumes of packages
shipped from our U.S. outbound cross-border service facility were lower than the prior year and continue to be pressured by a strong
U.S. dollar. EBIT increased 16% in 2015 compared to 2014 as synergy savings from the Borderfree acquisition and recognition of $6
million of deferred cross-border delivery fees were more than offset by the incremental costs related to the Borderfree acquisition including
$9 million of additional amortization expense.
Global Ecommerce revenue increased 66% in 2014 compared to 2013 due to an increase in the number of orders processed and parcels
shipped. Late in the third quarter of 2014, we began outbound ecommerce services from the U.K., which had a small benefit to the full-
year revenue. EBIT increased significantly in 2014 compared to 2013 primarily due to the increase in revenue and improved operating
leverage which offset fixed costs and continued investments in global ecommerce technology and infrastructure.
Other
Other includes our Marketing Services business which was sold in May 2015.