Q1 2022 Pitney Bowes Inc Earnings Call
Yes.
[music].
Good morning, and welcome to the Pitney Bowes first quarter earnings 2022 results Conference call.
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I would now like to introduce your participants for today's conference call.
Mr. Marc Lautenbach Pres.
President and Chief Executive Officer.
Hannah Chadwick executive Vice President and Chief Financial Officer.
And Mr. <unk> zecher.
Vice President Investor Relations.
Mr. Zachary will now begin the call with a safe Harbor overview.
Good morning, everybody. This is zachary and I manage the Investor Relations program for Pitney Bowes.
I'd like to welcome everyone to the call. This morning, we very much appreciate your participation.
Part of my duties. This morning includes covering the usual and customary safe Harbor information. So please bear with me for just a moment.
Today's presentation will include forward looking statements about our expected future business and financial performance.
Forward looking statements involve risks and uncertainties that could cause actual results to be materially different from our projections for.
For more information on these topics. Please see our earnings press release.
Our 2020 Form 10-K annual report and.
And other reports filed with the SEC that are located on our website at www Dot <unk> dot com and by clicking on Investor Relations.
Please keep in mind that we do not undertake any obligation to provide updates to forward looking statements as a result of new information or developments.
Also for non-GAAP measures the reconciliations to GAAP accounting can be found in the tables attached to our press release and also on our Investor Relations website.
Additionally, we provided a slide presentation on our website that summarizes many of the points, we will discuss during today's call.
Our format. This morning, it's gonna be familiar Mark logging back our president and Chief Executive Officer will begin with opening remarks.
He will be followed by auto Chadwick, our Chief Financial Officer, who will provide a deeper discussion of our financial results I'd like to now turn the presentation over to Mark Mark the floor is yours.
Ned and good morning, everyone I appreciate everyone joining the call.
Our first quarter was very good and the trends that we experienced most of last year continues improvement in global ecommerce business.
Our G C margins and strong performance in our Centex financial services and presort businesses.
The headline for the quarter as revenue EBIT and EPS growth.
This is the dynamics that we've been working for and the trend we expect to continue for full year 'twenty two.
I know there is a tremendous interest in our GSE business and I get that but I want to spend a few minutes upfront talking about the other businesses.
In the aggregate Suntech and presort.
$2 billion business that has grown top line carries a 25% EBIT margin.
I want to make sure people do not overlook the incredibly strong base our traditional core businesses are built on.
Case in point Presort had another really strong quarter.
Very good top line growth solid EBITDA and great customer satisfaction.
Growth initiatives in center.
Our resonate with clients and are having a positive impact on the numbers there.
The shipping business within Santa <unk> grew 26% year over year.
First class mail continues to decline, but marketing mail office shipping and small business lending are terrific opportunities and we're hitting the ball.
Our new products and offerings are doing very well in the market.
As the disruption of Covid and the related supply chain dynamics gradually Wayne.
G C business continues to stabilize and improve.
It's hard to overestimate, how turbulent that e-commerce logistics market has been over the last 26 months.
In the first quarter, our service levels and unit economics improved G. C. Gross margins improved 500 basis points year over year and the business was EBITDA profitable.
Again, while this hasn't been and won't be a straight line improvement we expect these dynamics to continue.
And we expect GEC to be EBITDA profitable for the year.
We continue to really like the market dynamics in E Commerce logistics strong secular growth coupled with an industry where capacity is unlikely to outpace long run demand.
Hi, Brian plays really well in this market and our business model really works.
Integral to the business model N. G. C is our relationship with the U S. P S. Our marketing and sortation capability, coupled with the U S. P. S final mile deliberate, but a very strong combination.
Of note President Biden signed the postal reform Bill on April six.
To the extent there are any questions about the long term viability of United States Postal service, including its mandate to run a six day integrated mail and parcel network.
Postal reform legislation and the President signed puts those questions to rest.
All in all the first quarter was a good start and while the macroeconomic environment is turning less positive I continue to like how we're positioned.
Let me now turn the call over to Anna to walk through our financial details.
Thank you Mike from a financial standpoint, the primary takeaway here is that we have started 2022 with a solid quarter.
Better revenues improved margins, especially in global ecommerce and more balance sheet improvement.
It's energizing to get 2022 started on a positive note.
Unless otherwise noted I will speak to revenue comparisons on a constant currency basis.
Other items, such as ebay EBITDA, EPS and cash flow on an adjusted basis.
First I'll take you through the high level financial statement data points.
<unk> with the income statement.
Total revenue for the quarter was 927 million, which is a 2% improvement year over year.
Gross margin for the company was $306 million compared to 299 million for the same period last year, a 2% increase.
As a percent of total revenues gross margin increased 30 basis points to 33%.
Total EBITDA was $95 million and EBIT was $53 million, both of which were 6% higher than first quarter 2021 .
Total EBITDA margin improved 40 basis points to 10, 2% and EBIT margin moved up 30 basis points to five 7%.
Interest expense was 34 million down from 37 million in the prior year.
Driven by reductions in total debt outstanding.
Our tax rate returning to more normal levels and was 25% in the quarter.
Adjusted EPS was eight cents.
One <unk> better than last year, and GAAP EPS was 12% driven by a handful of non reoccurring items, which are detailed in the press release.
At the end of the quarter diluted shares outstanding were approximately $178 million.
Turning to cash flow.
GAAP cash from operations was a use of 2 million, while adjusted free cash flow was a use of $30 million driven largely by changes in working capital.
Which we expect to normalize as we move through 2022 .
I'll have more to say on that topic, shortly but I'll repeat that.
We continue to expect to generate healthy levels of free cash flow for the year.
During the quarter, we paid $9 million in dividends and made $4 million in restructuring payments.
As we signaled in our last call capital expenditures are expected to be lower in 2022 and for the quarter Capex was $33 million down from 43 million in the same period last year.
We also spent a little over 13 million on share repurchases during the quarter as we manage overall share count.
Looking at our balance sheet linked.
Our liquidity remains excellent with cash and short term investments of approximately $634 million and our $500 million revolver remains undrawn.
We continued to make progress in reducing debt levels.
We redeemed our 'twenty 'twenty three maturity during the quarter and total debt was $2 $2 billion at the end of the quarter compared to $2 $3 billion at the end of last year, and 2.4 billion a year ago.
Let's look at first quarter results by segment.
The following segment information is outlined in our press release and slide presentation, which were posted to our Investor Relations website. This morning.
Well, let me start with pre sorry.
Research revenues were 161 million in the quarter, which is 12% better than last year, driven by new customer additions and increased revenue per piece.
Total sortation volume of $4 4 billion pieces was down 2% compared to prior year.
A 3% decline in first class mail volumes was partially offset by 3% increase in marketing mail.
EBIT for the quarter was 20 million compared to $19 million a year ago.
The margin was 12, 2% compared to 13, 3% for first quarter 2021 .
The decline in margins was driven largely by increased transportation and labor costs.
Also we refined our allocation methodology for transportation costs, which resulted in a $3 million shift of expenses to presort from GEC.
The new approach better represents actual cost incurred within each segment and will continue for the balance of 2022.
In addition, our terrific new Las Vegas facility, which has the capability to process first class mail and marketing mail across the product portfolio was not yet running at scale in the quarter, but we expect that to happen in the <unk>.
Second half of 2022 .
Presort team is taking several steps to attack rising labor and transportation costs.
We are adding more automation, including new sorters, additional conveyors and more robotics.
We also expect to use higher mix of employees versus temporary labor and wider variety of transportation vendors.
All in the effort to return margins to the mid teen levels, which we believe is attainable in the medium term.
We continue to feel very good about the growth prospects for precinct driven by better revenue per piece and.
An increased mix of marketing mail.
And the above referenced cost measures.
Moving to centric sent that reported revenues of $348 million in the quarter down 2% from the same period last year.
EBIT was $105 million compared to $114 million and EBIT margin was 31% down 180 basis points from first quarter 2021 .
The decrease in segment margins was driven primarily by law.
Lower high margin finance revenues and higher freight costs.
As we said last quarter, we are implementing surcharges and price increases generally in combination with value added products and services to offset the increased cost.
Key bright spots include equipment sales, which were up 4% to 89 million and shipping revenues, which increased 26% and now exceed 10% of segment revenues.
In terms of operational highlights, we lunched Pitney ship pro which is a new cloud based sending solution built on the powerful SaaS shipping 360 platform.
It integrates next generation design with advanced shipping and mailing functionality, which we think is a significant differentiator in the marketplace.
In addition, we continue to see excellent demand for our Central Mail station, which was launched in April 'twenty 'twenty.
We have now shipped over 60000 devices up from approximately 50000 at year end.
N G. A fashion we are encouraged by the stabilization of finance receivables and continued improvement in portfolio quality.
Total assets actually grew $5 million in the quarter and stand at 1.2 billion, while assets have begun to expand it will naturally take some time to translate into revenue growth.
Portfolio quality improvement is evidenced by lower delinquencies and write offs as a percentage of assets on a year over year basis.
Let me turn now to global E Commerce.
Within global ecommerce revenue in the quarter increased 1% to $419 million.
Strength in domestic parcels and fulfillment was offset by lower cross border and digital revenues.
Ross border was affected by a stronger U S dollar and weaker international E Commerce trends.
Domestic parcel revenue increased in the mid teens, primarily due to solid increase in revenue per parcel.
Domestic parcel volumes were $41 million in the quarter compared to $41 7 million last year.
In context, we did well and here's why.
The comparisons from a year ago were somewhat more difficult because of the spillover of parcels from the fourth quarter of 'twenty 'twenty the peak pandemic quarter.
And second broad market trends became more challenging as we move through the quarter.
U S E Commerce sales were actually down 6% month to month in March.
Gross margin in the quarter it was $50 million a record for us and was up considerably from the $29 million figure a year ago.
It was also up $33 million versus the $17 million level in the fourth quarter.
As a percent of segment revenues gross margin was 12% in the quarter much better than last year's 7%.
EBITDA for the quarter was positive 8 million compared to a loss of $8 million in the first quarter of 2021 .
EBITDA margin was one 9% an improvement of almost 400 basis points year over year.
EBIT was a loss of $14 million compared to a loss of $26 million a year ago, an improvement of $13 million.
EBIT margin was negative three 3% an improvement of approximately 310 basis points from the same period last year.
Margin improvement was driven largely by both.
Better revenue per parcel and lower labor cost per parcel.
Let me point out a couple of long term trends for our global ecommerce segment.
Year over year revenues have now grown seven out of the last nine quarters.
And for EBITDA, we have seen year over year improvement in six of the last seven quarters.
These are tangible reasons for investors to be encouraged with the progress of our global ecommerce segment. Despite the challenges we have all faced since early 2020.
Our investments in automation robotics transportation and Labor management systems are all contributing to that progress and our ongoing network optimization efforts are having a very positive impact on service levels.
Let me now shift to the outlook.
As it pertains to guidance, we are maintaining our low to mid single digit revenue and EBIT growth expectations for full year 2022 .
We expect to generate similar levels of adjusted free cash flow as compared to 2021.
As I think about the second quarter, we continued to see cost pressure in transportation and labor.
Though we are taking actions, where we can to offset these effects, namely through transportation and fuel surcharges. We will also increase pricing for customers where appropriate usually in combination with more value added.
Lastly, I'll note that we are not immune to the ongoing supply chain issues and we continue to proactively manage these challenges.
We will provide further updates as the year progresses.
In closing I am very pleased with the financial performance of all three segments in the quarter.
Presort and centric in aggregate again produced top line gains in the quarter, which is impressive for mature businesses.
Fortunately the progress in global ecommerce profitability gives me confidence that our capital efficient business model will generate the long term margins that we all expect.
Thanks for listening operator, please open the line for questions.
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Once again, if you have a question you May press one zero at this time.
And our first question will come from Ananda Baruah with loop capital. Please go ahead.
Yeah, Hey, good morning, guys. Thanks for taking the taking the question.
Yeah, just a this is mark.
So love your thoughts.
With the start to global ecommerce did you below sort of the the Incrementals slowly that you saw in a global ecommerce.
Can you sort of that to the maintaining of the guidance for the year. How are you seeing the progression of that and then I guess also in that context.
You know for a a setback as well you know if you.
So I guess, how much of that like with the macro perspective baked into our into Centex. EDA has you maintained the guidance as well and I have a quick follow up thanks.
Great. So let me start and see if I can unaware of the GEC performance a little bit.
So as always there's different currents running through the business you know to your point about macroeconomic circumstance.
Our cross border business.
One of our competitors reported earlier in the week faced headwinds in.
In the quarter that was principally although not exclusively due to currency rates.
So that was a hurt what what helped was our domestic parcel business and if you look at that.
And from a unit economic perspective, the first thing that you would see is pricing caught up to cost.
So on a year on year basis, you know pricing was a help you know I would say that was a remedial dynamic to help cover cost that we had incurred.
Labour Similarly was a touch of a help.
In terms of the unit economics.
So that's what you know those are the principal dynamics that ran through the quarter as we worked through the balance of the year.
We now have a set of capabilities that we've been working on for the last several years in terms of our warehouse our team in the warehouse our leadership team and our transportation.
That has both the capability and important the capacity.
To drive improved economics going forward.
So if you look at the warehouse capacity.
Or if you look at the transportation capacity, we've got significant incremental capacity. So we can add volume.
Without adding incremental costs. So if you look at the marginal economics are of the domestic parcel business for incremental volume.
They're very favorable in terms of.
The marginal economics.
So the key there for us are incremental volume. So we've completed some work, which built off of our other stuff, but we have done in terms of how we run the network that will.
Improve our service lines across you know certain lanes.
Which we.
Have very clear feedback from clients are will drive incremental volume. So you know the dynamics in the first quarter, a little bit different than the going forward dynamics first quarter was driven by.
Price.
Prices similar to the fourth quarter, but no different than the first quarter of last year, a little bit of flavor going forward, we expect the unit.
Economics unit cost continue to improve.
But much more of the.
The.
Incremental value driven by volume.
So that's a global ecommerce on Centex, you know as you know, it's got a lot of reoccurring revenue and a lot of recurring cash flow. So you know what what what weighs on the margin for Centex are in terms of quarterly performance.
Really equipment sales.
Yeah, that's the one thing that's kind of non reoccurring.
I mean supply is to a degree.
As well, but that's pretty much of a function of the volume in that business. So you know where.
We are paying close attention to whats going on macro economics, you know I would say.
In fact, I, just got a little bit of susceptibility to that in terms of equipment sales and you know.
Volume gets hurt, but its pretty steady I mean, we've seen that you know most recently in a pandemic recession, we've seen that now in the great recession of 2008, so it's a business that tends to keep on chugging through with not a lot of variability.
In down economic cycles.
So that those ounces because of the words structure in the business model is fairly insulated.
Against you know downturn. So you know when we look at all of that you know kind of in aggregate no Juicy with you know a huge market opportunity even if it is a market opportunity.
Opportunity that you know it was a little bit less growth than what we had seen or because of a recession.
If we do have a recession, but I.
Juge opportunity Nonetheless, you know, whether it's going slightly up or slightly down with.
With a very clear path for margin appreciation.
With line of sight to that volume from our customers.
And then you know what a base not just with Suntech and presort that has very reliable revenue and cash flow. So I think it's a very powerful business model in general that's a particularly.
I think strong business model in times like this where there's uncertainty because you know that the market seems to be working for you know a little bit of growth with clear margin appreciation and I think we answered that though right.
Clearly.
Hey, Mark Thanks for that time.
Is that to say are you mentioned something about line of sight, when you're going through your your UGC remarks.
Something about line of sight from customers to that regard to volume is is that to say that there is some sort of some degree of volume commitments or how would you how would you characterize that.
They're they're not commitments and the contractual sense the way it works in that marketplace not just for US as you know you have a book of clients are and they have you know I would say volume agreements without the contracts under underneath them no typically in aggregate those contract agreement.
Those agreements in terms of volume has been pretty reliable putting fourth quarter aside when it when they weren't but you know what we saw up until the fourth quarter of last year and what we're seeing again this year certain 98% 99% accurate.
So it's not a contractual commitment per se, but there their volume direction has been pretty positive.
Correlated to what the what that what we actually realized.
That's helpful.
And then just last one for me.
What would you yes.
So how would you characterize the various priorities yeah for as you as you move through the year here.
Right.
Priorities for our Pitney Bowes repairs, Virginia soon.
Oh, sorry for Pitney Bowes.
Yeah.
Yeah. So let me kind of a run through on a business level for global ecommerce It has increased.
Increased volumes.
And continued operating.
Operating efficiency.
For <unk>.
It is.
<unk> continued to hit the ball on the growth.
Incentives so as Ana mentioned.
I mentioned rise I mentioned in our prepared remarks, I mean shipping them center grew 26%.
So you know 26% off of about a business. That's you know 140 $150 million of starting to be real.
Real growth in the absolute terms so that's that.
Talk to me is to continue to hit the ball.
On the on the growth.
Our growth in China. Similarly in our GFS, so on and talked about the assets growing you know that's been a combination of three or four years' worth of work they've got some really terrific.
Growth opportunities both in terms of working capital as well as.
Equipment lending and leasing.
Those are you know those are starting to you know similarly hit the mall inside our presort.
It's it's really around continued operational excellence.
Their margins are.
In the first or the growth was terrific.
Expect that growth to come.
For another quarter or two based on some of the dynamics last year.
You know their margins have you know an opportunity to grow up so they're there are slightly more balanced.
Hum.
That's it that's really helpful. Okay. Thanks, so much guys appreciate it.
Thank you. Our next question comes from the line of Kartik Mehta with Northcoast Research. Please go ahead.
Hey, good Oh, good morning, Mark I apologize Dan I'm wondering just from a inflationary pressures I know you talked a little bit about some of the impact that could be having if you look from an inflation.
Perspective overall.
What are some of the positives and negatives or pick me.
It's hard to say Inflations are positive and in anyway, but what I will say as you know we've been able to manage price relatively well in this environment of so.
If you look at the.
The respective businesses, you know transportation labor inflation has been a net headwind.
Both presort as well as global ecommerce I would say in both businesses as you know we've been able to price for that so that's a positive thing zantac.
You know.
It's a little bit more subtle, but you know transportation.
Affects them as well I would say they've got you know they've had some luck with pricing they've got more opportunities.
In front of them, so I don't see it.
Inflation as you know positive or negative per se, it's kind of a fact of life for the question is can you price for it in your businesses and you know our answer is yes, we've absolutely been able to price for it and now we can do real life.
Oh, you know real life. Examples I mean, if you look at Ups's results on Tuesday, whenever they announced that I think it was on Tuesday.
I mean their volume was domestic volumes were down a couple percent, but their revenue was up you know close.
Close to double digit I think eight or nine a M.
Check the numbers, but you know they pointed to price so it's.
I make that point, you know not to talk.
Talk about Ah Ah another party, but it's it is an industry that historically and now continues to be pretty disciplined from a pricing perspective.
Our marketplace you know from a client decides it's pretty mature.
I've been in business for.
A long time now.
Some.
Some are good some customers you have more constructive conversations around price than others. This is a market where you have pretty constructive conversations around price I mean customers get it.
And similar things in our business.
And just as a follow up just on global ecommerce I know in the past you've talked about kind of.
Parcels as a way to look at when one global ecommerce can maybe breakeven and then start.
Producing positive EBITDA.
He has that changed at all or how would you look at global ecommerce and maybe revenue of parcels as to when you think you could tell breakeven on the business.
Yeah. So that has changed so you know not not surprisingly the pandemic has changed lots of different things in that world. So you know.
I would say the first thing you know, we're finishing off the long term plan, but no I would say the long term plan ultimate profitability, you're never going to get that 8% to 12% was predicated on 250 million parcels are I think a more lightweight figures today is probably 300 million parcels. So you know up but not.
Up you know a crazy amount.
You know on a referenced the 41 million parcels that were at this year. You know, we think a 41 million parcels, where we're at in the first quarter. We did a 175 last year.
No I think it will be.
I think the first handle would be to this year I mean 200, something another might be now.
Over that threshold.
As it relates to profitability you know what I, what I said I don't know if that will be EBITDA profitable this year.
From an EBIT perspective, you know I would say a couple of things we have a.
What I would characterize as a high risk and in some ways low probability internal plan that gets them to EBIT profitable. This year I'd say that planes are logical I mean, but it's you know you'd have to acknowledge given the environment and candidly, though given where we are in our maturity curve. It's.
High risk. So we've got an internal plan, we're not betting our external guidance on them getting.
EBIT profitable, but there has been internal plan and I'd say you know, while it's high risk, it's not biological but they've got a lot of money.
There's a lot of money on the table for them to do that so they're running hard for that we're enthused about the opportunities or enthuse about building this business.
And they can make real money.
As that business gets profitable in terms of ultimate profitability. You know, it's still kind of in the 24 might be 25 timeframe, but right now things have changed a little bit you know.
Which is not terribly surprising when the minimum wage as you know our wages have gone from <unk>.
14 Bucks an hour ago, you know close to 20.
Unit transportation has gone from <unk>.
65 cents a unit.
Over double that so it's not surprising that you know the.
Sure.
Underlying plan has changed.
But I'd say, it's kind of changed on the edges.
Does that helps you.
No that does help thank you I appreciate the answers mark.
Thank you. Our next question comes from the line of Jeff Heartlands with Barclays. Please go ahead.
Hi, good morning, So with E Commerce I, just wanted to kind of understand where we're headed in near term on the last call you talked about a very challenging conditions in E. Commerce in the first half it seems like you've managed that very well in <unk> and in your 8 million positive EBITDA.
You know on this call you talked about some of the weakness in E. Comm was more recently I think it was more industry wide, but you know what are you seeing volume wise and what are some of the cost pressures versus pricing you know that you see in the near term.
And you know should adjusted EBIDTA and E. Commerce are turned back negative and two can you just just some more details on that would be helpful.
Yeah.
So let me kind of start with the market you know what you know you P F.
As announced in the first quarter and we saw similar dynamics as you know volume was flat to down a little bit.
So that's kind of a general market statement I don't have any reason to believe that that's going to change dramatically.
Dramatically what what I.
Well, what I have always said and the team reminds me of the other day is when you've got one 5% market share I'm not sure that.
The most relevant factor is whether the market is going up one or 2% or down one or 2%. You know, we've got tremendous opportunity in front of us and tremendous addressable market in front of us.
I'm, assuming we've got the right offering and you know so.
I think the market will continue to be a little bit choppy from a volume perspective, you know as I've said to.
To the earlier question and you know others upset as well pricing as a net positive. So you can still get good revenue performance.
Performance, even with fairly flat volumes.
In terms of how the.
The year unfolds.
I'm not going to get into quarter by quarter.
EBITDA profitable for the year, you know I I.
I'm, probably going to stick with that it's it's hard to kind of call what's going on in the 90 day period.
But I do like you know how we're.
Started in the quarter in terms of the.
The kinds of conversations we're having with customers in terms of incremental volume so assuming the end economics hold and you know this.
These conversations with customers come to fruition in terms of you know.
First you know getting more volume from existing customers and second you know onboarding new customers.
That bodes well for the for the year.
Yeah.
Okay, and then you said free cash flow is supposed to be comparable with 'twenty one.
All I know capex will be lower but you had some pretty good working capital performance last year can you just give us some of the puts and takes on that.
With some of the key cash flow items.
I'm sure this is Anna.
I'll take you through that a little bit. We are we have had the two key drivers from a cash flow perspective that.
Our most significant for the quarter were working capitalized as we mentioned.
And isn't that we also had a.
Nowhere reduction of our finance receivables, which we actually ended up growing some of our finance receivables. So we've seen that stabilization.
The votes for something very good which means you know more profits into the future. It's a hurt initially on free cash flow. So as we as we look through the year you know there's seasonality in our free cash flow first quarter is always lower and we expect that to normalize one of the dynamics in working capital to point out.
Specifically around <unk>.
Receivables is we have had historically and improvement of days sales outstanding that has been significant and we will continue to push for that but that rate of improvement is going to level life as well.
Those are the broad key dynamics, you mentioned a slowdown in capex, we're going to be very focused on optimizing.
The network that we have and not as focused on building additional capacity. We do have a commitment that we feel very good about eating into Chicago building it.
But beyond that we will be very focused on optimization.
And those are probably the key highlights to mention that just bill and I are honestly very well and not surprisingly so.
I was asked about the the dynamics with N. G. C. You know one of the dynamics that's also changed.
Post.
Covid is the team now thinks they're going to require a less nodes are in the overall network, which will diminish.
Diminish them.
Incremental capital that we need to put behind that business, which is important now one of the one of the metrics that we do work out as EBITDA minus capex with respect to the businesses.
Which has been a key.
The inflection point for our global ecommerce when does that when does that when.
When does that number turned positive I think it's got a good chance to be positive this year.
Okay. Thanks, so much.
Thank you if there are any additional questions. Please press one zero at this time.
And there are no additional questions in the queue I will now turn it back to Marc Lautenbach for closing remarks.
Thanks, operator, and I'd like to thank everyone for joining the call I mean, let me just close by making a couple of points I often asked my opinion was okay. What are the highlights and.
What are the headlines for the quarter and maybe pointed I think appropriately.
Is revenue EBIT and EPS growth.
That's really important for all kinds of reasons because that just speaks to the trajectory of your business and you know camera ready to work we've been doing for the last 10 years to two we created this business and to turn it into a no going forward.
Successful business so growth.
Growth in revenue EBIT and EPS in the quarter with continued prospects for that for the full year.
Secondly.
I think it kind of gets overlooked.
Too often that if you look at the combination of our presort and global financial services as well as Suntech.
That is a $2 billion business are that as you know growing but for the moment and we expect that to continue.
To grow and it's got 25% or so EBIT margins that is a tremendously strong franchise to build off of.
And we are and it will continue the third point is you know all around global ecommerce. So you know I would say that the fog of COVID-19 starting to lift.
Well you know COVID-19 is not totally behind us and it does affect.
Now supply chain of our customers and it affects our own supply chain with Samsung.
You can begin to see the fog of COVID-19 lifting and the path forward for.
Our global E Commerce has become much square, we have a clear view.
Where the the.
The economic fly Oh, we have a clear view of the market opportunity.
Had no significant and meaningful conversations with clients about bringing that volume on and as we do that you'll continue to grow the top line for sure.
But as I you know as I mentioned, the marginal economics between where we are today and 300 million parcels is really compelling. So you really have a very clear view from where I said of of how this works going forward in a way that creates tremendous incremental value I'll just.
To remind everyone that you know global ecommerce.
At a $2 billion business, and we think it'll be higher than that now with the completion of a long term plan with 8% EBIT margins is $160 million of incremental EBIT.
From zero and you know close to $250 million of incremental EBIT from where we are.
That's a pretty strong proposition, particularly in this marketplace. So we got a lot of work to build a for sure.
I'm just going to continue to be choppy or we didn't get a lot of questions on China, but China's.
No no COVID-19 policies, a touch problematic, but that will pass as well, but all that being said the.
The dynamics in this business are very very positive so enough for now. Thank you for your time day particular, thanks to the team to Pitney Bowes team they've done tremendous work over the last couple of years.
And are you beginning to see the fruits of that work show up in the marketplace. Thank you very much.
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