Slide 1: Pitney Bowes' Failings During the Roth-Lautenbach Era
® Pitney Bowes’ Failings During the Roth-Lautenbach Era Prepared By Hestia Capital Management January 2023
Slide 2: Disclaimer
Disclaimer ® The materials contained herein (the “Materials”) represent the opinions of Hestia Capital Partners, LP and the other participants named in the anticipated proxy solicitation (collectively, “Hestia,” the “Hestia Group” or “we”) and are based on publicly available information with respect
Slide 3: Value Destruction Under Leadership
Value Destruction Under Leadership ® Chairman Michael Roth and Chief Executive Officer Marc Lautenbach have presided over negative total stockholder returns (“TSR”) while the S&P 500 has delivered outsized returns. CEO Lautenbach 10-Year Tenure TSR Chairman Roth 26-Year Tenure TSR vs. S&P 500 vs. S&
Slide 4: Abysmal Total Stockholder Returns
Abysmal Total Stockholder Returns ® Over all relevant time horizons, including the Board of Directors’ (the “Board”) respective tenures (which average 10+ years), the Company has delivered disastrous returns while market indices have significantly outperformed. Pitney Bowes TSR CEO and Director TSR
Slide 5: A Failed, Cash-Burning Strategy
A Failed, Cash-Burning Strategy ® Under Messrs. Roth and Lautenbach, post-2014 strategic decisions and investments have resulted in the burning of $300+ million in capital – meanwhile, the Company’s stock price is down more than 85%. Leadership’s Decision Strategic Misstep Poor Capital Allocation Fa
Slide 6: Poor and Unreliable Forecasting
Poor and Unreliable Forecasting ® Under Messrs. Roth and Lautenbach, Pitney Bowes has shown a sustained inability to set reliable guidance and hit targets (instances denoted in red below). Guidance vs. Actual Results for 2015-2021 ($ in millions) Metric 2015 2016 2017 2018 2019 2020 2021 Revenue Gui
Slide 7: A Battered Credit Rating
A Battered Credit Rating ® Largely due to poorly executed acquisitions and sustained losses within Global Ecommerce, Pitney Bowes’ credit ratings have steadily deteriorated under Messrs. Roth and Lautenbach. Moody’s Senior Unsecured Credit Rating 15 14 13 12 Aa3 A111 A210 “ The path to sustainable g
Slide 8: Impugned Credibility in the Market
Impugned Credibility in the Market ® At a Deutsche Bank event late last year, Pitney Bowes said Global Ecommerce should be Free Cash Flow positive in 2023 and hit EBIT margins of 6%-8% in 2026 – however, the market appeared to shrug off the news and the Company’s securities still hovered near 1-year
Slide 9: Extremely Poor Governance
Extremely Poor Governance ® We believe an insular, clubby boardroom has resulted in a number of governance missteps that need to be addressed by a reconstituted Board – and urge the Company to avoid any defensive director “refreshments” or entrenchment maneuvers ahead of the 2023 Annual Meeting. Gov
Slide 10: Evidence of Lost Focus
Evidence of Lost Focus ® We believe Mr. Lautenbach and management have been allowed to lose focus and avoid accountability for their ineffectiveness. Misguided “Moonshot” Bets Poor Employee Morale Weekday Golfing Pitney Bowes announced last year it would Glassdoor’s current and former employee Mr. L
Slide 11: Unaddressed Stockholder Unrest
Unaddressed Stockholder Unrest ® During the second half of 2022, several stockholders made Pitney Bowes aware – privately and publicly – that change was needed atop the Company. According to a recent article in Reuters, “[i]n September BWM AG wrote a letter to the board highlighting poor execution i
Slide 12: Our Solution: The Hestia Slate
Our Solution: The Hestia Slate ® We purposefully assembled a seven-member slate with capital allocation acumen, corporate governance expertise, relevant sector backgrounds, transaction experience and ownership perspectives. Candidates 1-4 Key Qualifications Rationale for Nominating Ms. Alberti-Perez
Slide 13: Our Solution: The Hestia Slate (Cont.)
Our Solution: The Hestia Slate (Cont.) ® Our slate also has deep knowledge of the Company’s balance sheet, business segments, market opportunities and secular headwinds Candidates 5-7 Key Qualifications Rationale for Nominating Mr. McBride is a legend in the shipping industry based on his successful
Slide 14: Hestia Capital Management
® Hestia Capital Management 175 Brickyard Road, Suite 200 Adams Township, PA 16046 info@hestiacapital.com (878) 217-4800