Quadient delivers solid profitable growth with 8.0% organic
increase in H1 2023 current EBIT
Quadient delivers
solid profitable growth
with 8.0% organic increase in H1
2023 current EBIT
Key highlights
-
H1 2023 consolidated sales of
€522 million,
up
+2.0%
organically(1)
-
H1 2023
subscription-related
revenue up
+4.2% on
an organic basis, representing
71% of
total revenue
-
Strong performance from North America with all
three solutions contributing to the +4.4% organic growth in the
region in H1 2023
-
H1 2023 current
EBIT(2)
of €68
million, up
8.0%
organically(3)
driven by both software and lockers profitability
improvement. Current EBIT(2) margin
stands at 13.0%
-
Net attributable income of
€36
million, up
24.2%
-
Net debt at €746
million as of 31 July 2023. Consolidated leverage
ratio stable at 1.8x(4) excluding leasing
-
FY 2023 outlook confirmed
Paris, 20 September 2023,
Quadient S.A. (Euronext Paris:
QDT), a leader in business solutions for meaningful customer
connections through digital and physical channels, today announces
its 2023 second-quarter consolidated sales and half-year results
(period ended on 31 July 2023). The half-year 2023
results were approved by the Board of Directors during a meeting
held on 19 September 2023.
Geoffrey Godet, Chief Executive Officer of
Quadient S.A., stated: “2023 is the final year of the second phase
of our “Back to Growth” strategic plan. This plan was designed to
leverage and increase the penetration of our existing customers
base of over 400,000 companies by selling them additional
solutions. This enlarged product offering has been accompanied by a
continuous focus on developing our integrated B to B subscription
model. This allows us to deliver stronger recurring top line
growth, year after year.
In addition, our current strategy was also
designed to deliver growth in a profitable manner as shown by our
ambitious mid-single digit organic growth at the current EBIT(2)
level over the three-year period of the plan. In this respect, the
8% organic growth achieved in the first half of the year is clearly
encouraging. Importantly, this performance is driven by a strong
improvement in the profitability of our software business, as the
evolution of the business mix towards a SaaS subscription model is
almost completed.
The solid results achieved in the first half of
2023 demonstrate our ability to develop our integrated platform
sustainably and profitably. We are therefore confident that organic
growth at both revenue and current EBIT(2) levels will continue in
the second part of the year enabling, the Group to successfully
complete its strategic plan.”
FIRST HALF-YEAR 2023
CONSOLIDATED SALES
Group sales stood at
€522 million in H1 2023, a 2.0% organic growth compared to H1
2022 and a (0.3)% decrease on a reported basis. The variation
includes a negative currency impact of €7 million and a
negative scope effect of €5 million. The change of scope is
related to the divestments of the Graphic activities in the Nordics
and the Shipping business in France, both sold in June 2022.
Consolidated sales and
current
EBIT(2)
by Solution
Consolidated
sales
In € million |
H1 2023 |
H1 2022 |
Change |
Organic change(1) |
Intelligent Communication Automation |
120 |
108 |
+10.8% |
+11.8% |
Mail-Related Solutions(a) |
358 |
367 |
(2.4)% |
(1.4)% |
Parcel Locker Solutions(a) |
45 |
44 |
+2.2% |
+5.5% |
Other solutions divested in 2022 |
0 |
5 |
n/a |
n/a |
Group total |
522 |
524 |
(0.3)% |
+2.0% |
(a) Mail-Related Solutions and Parcel Locker Solutions
2022 data have been restated to reflect the fact that they now
include activities previously accounting for in Additional
Operations. |
Current
EBIT(b)
and current EBIT
Margin(b)
|
H1 2023Reported |
H1 2023(Excluding IFRIC
impact) |
H1 2022Reported |
In € million |
Current EBIT(c) |
EBIT Margin(c) |
Current EBIT(c) |
EBIT Margin(c) |
Current EBIT |
EBIT Margin |
Intelligent Communication Automation |
(3) |
(2.9)% |
(3) |
(2.5)% |
(10) |
(9.7)% |
Mail-Related Solutions(a) |
82 |
23.0% |
84 |
23.4% |
89 |
24.2% |
Parcel Locker Solutions(a) |
(11) |
(24.1)% |
(11) |
(23.7)% |
(13) |
(29.7)% |
Other solutions divested in 2022 |
- |
- |
- |
- |
(0) |
- |
Group total |
68 |
13.0% |
70 |
13.5% |
65 |
12.5% |
(a) Mail-Related Solutions and
Parcel Locker Solutions 2022 data have been restated to reflect the
fact that they now include activities previously accounting for in
Additional Operations.(b) Before
acquisition-related expenses(c) 2023 current EBIT
and EBIT margin were negatively impacted by the €2.3 million
negative impact from the new IFRIC accounting standard for cloud
computing. There was no IFRIC impact in H1 2022
Intelligent Communication
Automation
In H1 2023, sales from Intelligent
Communication Automation reached €120 million, up
11.8% organically and up 10.8% on a reported basis compared to H1
2022. Subscription-related revenue, which recorded a strong
20.5% organic growth, accounted
for 80% of Intelligent
Communication Automation total sales in
H1 2023, a significant increase
compared to 74% in H1 2022. Of note, pursuing the development of
its offering in Europe, Quadient is experiencing strong customer
adoption of its Accounts Payable (AP) and Accounts Receivable (AR)
cloud solutions, with accelerating trends, especially in the UK, in
Q2 2023 compared to Q2 2022.
The share of SaaS customers reached
81% at the end of
H1 2023
compared to 78% at the end of H1 2022. As the transition to
the SaaS model continues to progress, the weight of license sales
has decreased further representing less than 7% of Intelligent
Communication Automation total sales in H1 2023. Professional
services (14% of sales) also went down, recording a (17.3)% organic
decline. This continued decline is due to the change in business
model, cloud adoption requiring less onboarding services, and to
the customer mix evolution towards mid-sized companies.
At the end of H1 2023, annual recurring
revenue (ARR), which is a forward-looking
indicator of future subscription-related revenue, reached
€197 million, up from €187 million at the end of
FY 2022, i.e. a 16.1% annualized
organic(5)
growth compared to the end of FY 2022.
Additionally, the Group recorded a double-digit increase in AP/AR
financial automation customers upsold in H1 2023 vs H1 2022.
Regarding the new Quadient Hub, which unifies
business communications and financial automation into one single
cloud-platform, onboarding of customers progressed at a rapid pace
with c. 2,500 customers having already been onboarded since its
launch in April 2023. The Group remains focused on improving its
overall platform offering both from a customer experience
standpoint, through the addition of new features and from a service
standpoint by adding new functionalities. For example, Quadient
recently invested in artificial intelligence (AI) capabilities
leveraging Microsoft Azure AI services. This integration of
generative AI into Quadient’s cloud platform will further
contribute to transforming the way organizations engage with their
customers. Additionally, Quadient launched an AI-based cash
application module to accelerate invoice-to-cash processes. To
further complement its cloud platform offering, Quadient announced,
on 18 September, the acquisition of Daylight, an already existing
partner. Daylight provides dynamic i-form, bringing increased
flexibility to the Inspire solution. With Daylight becoming an
integral part of the Hub, the i-form functionality will be deployed
to all solutions of the Hub.
Q2 2023 also brought additional external
recognitions for Quadient’s SaaS solutions. Quadient’s cloud
financial automation solutions have been positioned as a leader
both in the 2023 SPARK MatrixTM for Accounts Receivable (AR)
Application and in the SPARK MatrixTM for Accounts Payable (AP)
Application.
Current
EBIT(2) for Intelligent Communication
Automation was negative at €(3) million, i.e. an EBIT
margin(2) of (2.9)%. Excluding the negative IFRIC impact recorded
in H1 2023, the EBIT margin(2) would have reached (2.5)%, a strong
improvement of 7.2pts compared to (9.7)% in H1 2022 (there was no
IFRIC impact in H1 2022).
The solid improvement in current EBIT(2) in H1
2023 confirms the upturn in profitability trend seen since the
inflexion point in H1 2022. Higher go-to-market efficiency drives
strong increase in current EBIT(2) despite continued investment in
R&D and product developments. This improving trend is expected
to continue in H2 2023 driven by the rising profitability of the
installed base, the contribution from the growing revenue and
careful costs control, while the negative impact from the change in
business model continues to decline.
Mail-Related Solutions
Mail-Related Solutions sales
reached €358 million in H1 2023, down (1.4)% on an organic
basis and down (2.4)% on a reported basis. While North America and
International recorded small increases year over year, Main
European Countries showed a contained decline thanks to improving
trends during the second quarter 2023 in France and in the United
Kingdom.
Hardware sales recorded a (4.8)% organic decline
in Q2 2023, impacted by a high comparison basis in Q2 2022,
especially in the United States. However, the good performance
recorded in Q1 2023 led to a limited (0.9)% organic decline in the
first half of the year. Quadient’s continuous investments into
renewing its product offering supports this positive trend with
increasing penetration of the new generation of innovative
machines. In H1 2023, Quadient successfully launched the iX-1 in
the US, a postage meter for small businesses and home offices.
This new connected equipment combines mail and parcel processing
and is mostly sold through tele-sales and digital sales. The iX-1
as well as the iX-3 answer an opportunity linked to the
decertification ongoing in the US as United States Postal Service
(USPS) plans to discontinue postage meters not compliant with
Intelligent Mail Indicia (IMI) on 31 December 2024. At
the end of H1 2023, the share of the upgraded installed base
increased further, reaching 26.7% vs. 19.9% at the end of FY
2022.
Subscription-related revenues (70% of
Mail-Related Solutions sales) also recorded a limited (1.5)%
decline in H1 2023, thanks to a solid performance in Q2,
driven by the solid installed base as well as by a positive
contribution from revenue related to usage and from the indexation
impact of multi-year contracts.
Mail-Related Solutions’ sales force are
mobilized to both nurture Quadient installed base and seize
cross-sell opportunities. In Q2 2023, Mail-Related Solutions
recorded strong bookings leading to an increased backlog at the end
of the quarter. Mail-Related Solutions also won some significant
contracts in the period. For example, Quadient was selected to
provide tailor-made mail production line to NBT Norway to manage
rising parcel volumes. The new integrated sorting facility allows
NBT Norway to scale its capacity from 2,000 to 6,000 parcels per
hour and represents and investment of more than €3 million
overall.
Current
EBIT(2) for Mail-Related Solutions was
€82 million for H1 2023 including the negative IFRIC impact.
Current EBIT(2) margin for H1 2023 was 23.0%, i.e. 23.4% excluding
IFRIC impact. The level of profitability of Mail-Related Solutions
remains high and well within the mid-term 22%-24% indicated range
despite investments in sales capabilities and a small decline in
gross margin.
Current EBIT(2) for the Solution is expected to
remain solid in FY 2023 supported by a tight focus on cost control,
a continued focus on remanufacturing and a further penetration of
the new generation of mail equipment.
Parcel Locker Solutions
Parcel Locker Solutions sales
reached €45 million in H1 2023, a 5.5% increase on an organic basis
and a 2.2% increase compared to H1 2022.
Subscription-related revenues were up 10.0%
organically in the first half of the year, well oriented thanks to
the strong contribution from the existing installed base and the
deployment of existing contracts. In Q2 2023, this was mainly
driven by the performance of France and the UK that recorded
double-digit growth. Subscription-related revenue stood at 61% of
total revenue for Parcel Locker Solutions in H1 2023 and the usage
rate of the platform remained solid, standing at 57% in H1
2023.
License and hardware sales were down (3.2)%
organically in H1 2023. Hardware sales suffered from a high
comparison basis in Q2 2022.
In Q2 2023, progress was made in securing future
growth in Parcel Locker Solutions:
- In Japan,
Quadient and Yamato signed in July the renewal of the joint venture
Packcity Japan under unchanged ownership (51% Quadient / 49%
Yamato). In addition, Quadient also signed with Yamato a new
commercial agreement that is based on a fee per parcel whereas the
previous agreement was based on fixed subscriptions per
locker.
- In the UK, the
development of Quadient’s open network made further progress with
carriers’ integration being almost completed. Quadient is now ready
to scale the lockers deployment thanks to secured prime locations.
In Q2, new agreements have notably been signed with Homebase and
other prime location sites, giving Quadient access to a base of
over 8,000 sites.
- In France,
Quadient will convert part of its existing click and collect
installed base into a hybrid open network / click and collect model
thanks to an agreement with Auchan, securing 400 prime locations in
France. The Company also signed an agreement with another important
retail real estate company to install Parcel lockers. These wins
will help accelerate the deployment of the French open network in
H2 2023.
Quadient continues to develop and introduce
innovative product lines. In Q2 2023, the new rearloading lockers
were designed to meet the expectations of the higher education
large configuration lockers in the US as they prevent bottlenecks
between the loading and the collection of parcels.
Quadient’s global installed locker base reached
c.18,900 units at the end of H1 2023 vs. c.18,000 units at the end
of FY 2022. Thanks to recent deals signed, Quadient is now
expecting the pace of installations to intensify, more than
doubling in H2 2023 vs H1 2023. This will be mostly driven by the
open network strategy with installations expected to take off in
the UK, the French network also expected to accelerate, and the
expansion of the Japanese installed base expected to resume.
Current
EBIT(2) for Parcel Locker Solutions was
negative at €(11) million in H1 2023, compared to €(13)
million in H1 2022, i.e. an EBIT margin(2) of (24.1)%.
Excluding the negative IFRIC impact regarded in H1 2023, the EBIT
margin(2) would have reached (23.7)%, a robust improvement of
6.0pts compared to (29.7)% in H1 2022.
The improvement in operating profitability can
be explained by gross margin expansion with positive volume/mix
effect as well as cost control measures. Profitability is
expected to continue
improving in H2 2023,
following sharp improvement throughout
H1. Acceleration of lockers deployments,
rising profitability of the installed base and careful cost control
are all expected to contribute to the increase in profitability.
Lastly, profitability of the installed base continues to increase
standing at 13.7% in H1 2023 against 12.5% in the FY 2022.
Consolidated
sales by geographies
In € million |
H1 2023 |
H1 2022 |
Change |
Organic change1 |
North America |
295 |
287 |
+3.0% |
+4.4% |
Main European countries(a) |
178 |
179 |
(0.2)% |
(1.6)% |
International(b) |
49 |
58 |
(16.8)% |
+1.1% |
Group total |
522 |
524 |
(0.3)% |
+2.0% |
(a) Including Austria, Benelux, France, Germany,
Ireland, Italy, Switzerland, and the United
Kingdom.(b) International includes the activities of
Intelligent Communication Automation, Mail-Related Solutions and
Parcel Locker Solutions outside of North America and the Main
European countries as well as, in Q1 2022, other solutions
previously recorded under Additional Operation and divested in Q2
2022. |
Sales in North America (57% of
Group sales) were up 4.4%
organically to €295 million and 3.0% on a reported
basis. All three Solutions
posted organic growth
in H1 2023. Intelligent
Communication Automation was the main contributor to the growth in
the region with a solid double-digit organic growth. Penetration of
Quadient’s cloud-based solutions continues to be well supported by
successful cross-selling from the Mail customer base. Quadient’s
Accounts Receivable and Accounts Payable cloud solutions also
performed well in the region, contributing to the overall solid
performance. Mail-Related Solutions benefited from the solid
penetration of recently launched products meeting the requirements
brought by the ongoing USPS decertification, while Parcel Locker
Solutions benefited from improving trends in the residential sector
in Q2.
Main European countries (34% of
Group sales) were down by only (1.6)% organically and (0.2)% on a
reported basis to €178 million, thanks to:
- the contribution
from Intelligence Communication Automation, that experienced a
strong customer adoption of Financial Automation cloud Solutions of
the Hub, with accelerating trends in Q2 2023;
- the contribution
from Parcel Locker Solutions, supported by the on-going deployment
of existing contracts; and
- the resilient
performance of Mail-Related Solutions.
The International segment (9%
of Group sales) delivered a 1.1% organic growth, to
€49 million, despite a slowdown in the expansion of the
Japanese lockers network which is expected to resume following the
signature of new contractual arrangements with Yamato.
Q2 2023 SALES
Consolidated sales stood at
€266 million in the second quarter of 2023, up 1.8% on an
organic basis and down (1.8)% on a reported basis compared to the
second quarter of 2022.
In € million |
Q2 2023 |
Q2 2022 |
Change |
Organic
change1 |
Intelligent Communication Automation |
61 |
55 |
+10.7% |
+13.1% |
Mail-Related Solutions(a) |
181 |
190 |
(4.4)% |
(1.6)% |
Parcel Locker Solutions(a) |
24 |
24 |
(2.1)% |
+2.9% |
Other solutions divested in 2022 |
0 |
2 |
n/a |
n/a |
Group total |
266 |
271 |
(1.8)% |
+1.8% |
(a) Mail-Related Solutions and Parcel Locker
Solutions have been restated to reflect the fact that they now
include activities previously accounting for in Additional
Operations. |
Intelligent Communication
Automation sales were up by 13.1% on an organic basis to
€61 million with positive performance from all geographies.
The subscription-related revenue showed a strong organic growth at
+20.4%.
Mail-Related Solutions sales
continued to show strong resilience, reaching €181 million in
Q2, down by 1.6% on an organic basis with a solid performance in
subscription-related revenue. This performance is however offset by
lower hardware sales in Q2 2023 against a high comparison basis in
Q2 2022 especially in the US. Of note, France and the UK recorded
improving trends with only a contained organic decline and
International posted a positive contribution.
Parcel Locker Solutions sales
stood at €24 million in Q2 2023, with a +2.9% organic growth
compared to Q2 2022 thanks to a continued solid performance from
subscription-related revenue mainly driven by double-digit organic
growth in France and in the UK partially offset by decline in
hardware sales.
In € million |
Q2 2023 |
Q2 2022 |
Change |
Organic
change1 |
North America |
150 |
152 |
(1.5)% |
+3.0% |
Main European countries(a) |
92 |
90 |
+2.3% |
+0.6% |
International(b) |
25 |
29 |
(15.6)% |
(0.5)% |
Group total |
266 |
271 |
(1.8)% |
+1.8% |
(a) Including Austria, Benelux, France, Germany,
Ireland, Italy, Switzerland, and the United
Kingdom.(b) International includes the activities of
Intelligent Communication Automation, Mail-Related Solutions and
Parcel Locker Solutions outside of North America and the Main
European countries. |
North America posted 3.0%
organic growth in the quarter mainly driven by the strong
double-digit organic growth in Intelligent Communication
Automation.
Main European Countries posted
a 0.6% organic growth, fuelled by a remarkable performance of
Parcel Locker Solutions, benefitting from the development of the
recent contracts in France and a much contained declined in
Mail-Related Solutions.
International declined slightly
by 0.5% organically, impacted by the temporary slowdown in the
Japanese lockers expansion as mentioned above.
REVIEW OF 2023
HALF-YEAR RESULTS
Simplified P&L
In € million |
H1 2023 |
H1 2022 |
Change |
Sales |
522 |
524 |
(0.3)% |
Gross profit |
389 |
385 |
+1.2% |
Gross margin |
74.6% |
73.5% |
|
EBITDA |
112 |
111 |
0.5% |
EBITDA margin |
21.5% |
21.3% |
|
Current operating income before acquisition-related
expenses |
68 |
65 |
+4.3% |
Current operating income margin (before acquisition related
expenses) |
13.0% |
12.5% |
|
Current operating income |
65 |
61 |
+6.8% |
Optimization expenses and other operating income &
expenses |
(6) |
(5) |
n.m. |
Operating income |
59 |
56 |
+6.0% |
Financial income/(expense) |
(16) |
(14) |
n.m. |
Net attributable income |
36 |
29 |
+24.2% |
Earnings per share |
1.05 |
0.75 |
|
Diluted earnings per share |
1.05 |
0.75 |
|
Gross margin
improved to
74.6% in
H1 2023 compared
to 73.5% in H1 2022. Gross margin improvement was mainly driven by
a positive volume/mix impact for Parcel Lockers and Intelligent
Communication Automation while Mail-Related Solution posted a
contained decline.
Current operating income
(current EBIT) before acquisition-related
expenses increased to
€68 million
in H1 2023 compared to
€65 million in H1 2022, up 4.3% on a reported
basis and 8.0% on an
organic3 basis. The
current EBIT(2) includes a €2.3 million negative impact from
the IFRIC accounting rule related to cloud computing. Current
operating margin before acquisition-related
expenses stood at
13.0%
of sales in H1 2023 compared to 12.5% in H1 2022. Excluding
the negative IFRIC impact, the current operating margin before
acquisition-related expenses would have stood at
13.5%.
The Group’s operating profitability was driven by a strong
improvement from software and lockers profitability due to improved
gross margin and costs control. The increase in profitability also
benefitted from lower freight costs.
With no significant M&A activities in H1
2023, acquisition-related expenses declined to
€3 million in H1 2023, compared to €5 million in H1 2022.
Consequently, current operating income stood at
€65 million in 2022 including the negative IFRIC impact,
compared to €61 million in H1 2022.
Optimization costs and other
operating expenses stood at €6 million in H1
2023, versus €5 million in H1 2022.
Consequently, operating
income for H1 2023 was €59 million, versus
€56 million recorded in H1 2022.
Net attributable income
H1 2023 net cost of
debt was up year-on-year at €15 million, against
€12 million in H1 2022. The increase is mainly due to the
impact from higher interest rates on the variable portion of the
debt ( 1/3 of Quadient’s debt). The currency
gains & losses and other financial items were
a loss of €1 million in H1 2023 versus a loss of
€2 million in H1 2022. Overall, net financial
result was a loss of €16 million in H1 2023 compared
to a loss of €14 million in H1 2022.
Income tax decreased to
€6 million in H1 2023 versus €12 million in H1 2022, due
to the recognition of a one-off tax benefit due to internal IP
transfer, amounting to €5 million. Consequently, the
corporate tax rate stood at 13.7% in H1 2023
compared to 28.8% in H1 2022. Restated from this impact, the
corporate tax rate would have been comparable to last year
rate.
Net attributable
income after minority interest amounted to
€36 million in H1 2023 compared to €29 million in H1
2022,
up 24.2%.
Earnings per
share6 stood at €1.05 in H1 2023 compared
to €0.75 in H1 2022.
Cash flow generation
EBITDA79 was
€112 million in H1 2023, representing a slight increase
compared to H1 2022, hence an EBITDA margin at
21.5% in H1 2023, vs 21.3% in H1 2022.
The change in working capital
was negative by €57 million in H1 2023 compared to a net cash
outflow of €53 million in H1 2022, reflecting the
unfavorable seasonality of working capital requirement at the end
of H1. Lease receivables recorded a decrease of
only €16 million in H1 2023 compared to a decrease of
€18 million in H1 2022, thanks to the strong resilience of the
leasing portfolio.
The leasing portfolio and other
financing services stood at €575 million as of
31 July 2023, compared to €595 million as of 31 January
2023 impacted by the seasonality of the business and unfavorable
currency impact. On an organic basis, this represents a decrease of
2.6% compared to the end of FY 2022. At the end of H1 2023, the
default rate of the leasing portfolio stood at around 1.2% compared
to c.1.6% at the end of FY 2022.
Interest and taxes paid
increased significantly to €35 million in H1 2023 versus the low
amount of €15 million paid in H1 2022. The difference was mostly
explained by the reimbursement of the 2020 tax loss carry-back
measures in the US in H1 2022 as well as the impact from higher
interest rates in H1 2023.
Capital expenditure was up at
€46 million in H1 2023, compared to €44 million in H1 2022.
Development capex was down slightly at €17 million in H1 2023
after the high investment level in H1 2022, at €19 million.
Rented equipment capex was up year-over-year at €17 million in
H1 2023, compared to €13 million in H1 2022, thanks to the
sustained level of Mail-Related Solutions hardware placements as
well as the higher activity level for parcel lockers from both
ongoing open-networks and contracts deployments. Of note, the level
of capex for rent is expected to increase in H2 2023. The decrease
in maintenance capex, to €6 million, was mostly due to the
IFRIC accounting standard impact related to cloud computing
investments. The increase in capex linked to IFRS 16 was driven by
new office leases.
Consequently, cash flow after capital
expenditure was down to €(17) million in H1 2023
compared to €13 million in H1 2022 which benefited from the
reimbursement of the 2020 tax loss carry-back measures in the US.
Cash flow after capital expenditure is expected to benefit in H2
2023 from the usual seasonality between H1 and H2.
2023 OPENING
BALANCE SHEET
At the time of closing the accounts for the
first half of 2023, the Group identified accounting irregularities
and practices that did not comply with Group procedures
attributable to the finance team responsible for Mail-Related
Solutions’ Italian and Swiss subsidiaries. These accounting
irregularities were detected thanks to the reorganization measures,
and in particular the centralization of support functions,
implemented in the first half of 2023, improving the controls in
place. These measures also enabled the Group to react quickly and
effectively to this situation as soon as it was detected.
At this stage, the verification measures taken
following the discovery of these accounting irregularities have
established:
- the active involvement of at least
two people within the finance team responsible for the Italian and
Swiss Mail-Related Solutions subsidiaries,
- the likely containment of these
accounting irregularities to these local subsidiaries, and
- the absence of any material impact
on the FY 2022 and H1 2023 income statements.
However, the results of the investigations
undertaken, both internally and with the support of recognized
external experts, have led the Group to record accounting
adjustments relating to previous financial years. As a result, a
total amount of approximately €(29) million has been recognized in
shareholders’ equity(8) in the FY 2023 opening balance
sheet. This amount can be broken down as follow:
- adjustment of differences between
the local and the consolidated accounts for a net amount of 8
million euros,
- provisions for bad debts for an
amount of 14 million euros due to the application of Group
accounting rules,
- cancellation of all invoices to be
issued for 7 million euros.
While investigations continue, Quadient reserves
the right to take legal action against the persons responsible for
these accounting irregularities. As investigations are still
ongoing, the Group cannot exclude additional financial impacts in
the 2023 financial accounts.
LEVERAGE AND LIQUIDITY
POSITION
Net debt stood at
€746 million as of 31 July 2023, a small increase against the
€736 million of net financial debt recorded
as of 31 January 2023 and adjusted for the
aforementioned accounting corrections. In June 2023, the Group
renewed its Revolving Credit Facility for an amount of €300 million
with a new 5-year maturity. This revolving Credit Facility is the
first sustainability linked loan of Quadient with ESG criteria
based on the Group CO2 reduction target. A €90 million stimulus
participating loan was also signed in June 2023. The Group has
no significant debt maturity before its
€325 million 2.25% bond maturing in 2025.
The leverage ratio (net
debt/EBITDA) remained broadly stable at 3.1x(4) as of 31 July 2023
versus 3.0x(4) as of 31 January 2023. Excluding leasing, the
leverage ratio was also stable to 1.8x(4) as of
31 July 2023 vs 1.8x(4) as of 31 January 2023.
The Group remains focused on reaching its leverage ratio
target of 1.75x4
excluding leasing as of 31 January 2024.
As of 31 July 2023, the Group had a robust
liquidity position of €470 million, split
between €170 million in cash and a €300 million
undrawn credit line, the latter maturing in 2028.
Shareholders’ equity stood at
€1,067 million as of 31 July 2023 compared to
€1,052 million(8) as of 31 January 2023 and adjusted for
the aforementioned accounting corrections. The
gearing ratio9
is stable at 69.9% as of 31 July 2023.
OUTLOOK
FY 2023 guidance
and 2021-2023 financial
outlook confirmed
The visibility offered by the recurring nature
of the business model, the seasonally stronger in H2 vs H1 as well
as the solid business trends recorded year to date, lead the Group
to confirm both its FY 2023 guidance and its mid-term financial
outlook.
Revenue guidance
- Sales outlook is
confirmed at minimum 3% organic sales CAGR over 2021-23
- FY 2023 organic
sales growth is expected at c.3%.
Current EBIT2
guidance
- Current
EBIT2 outlook is confirmed at minimum mid-single
digit organic10 current EBIT2 CAGR over
2021-23
- FY 2023 organic
growth3 in current EBIT2 is
expected at c.10%.
BUSINESS HIGHLIGHTS
Quadient recognized for the first time
in 2023 Gartner Magic Quadrant for integrated
invoice-to-cash applicationsOn 9 May
2023, Quadient announced that for the first time, it has been
recognized by Gartner® in the Magic Quadrant™ for Integrated
Invoice-to-Cash Applications for its offering, Quadient Accounts
Receivable (AR) by YayPay. The evaluation was based on specific
criteria that analyzed the company’s overall completeness of vision
and ability to execute.
Quadient awarded Platinum rating
by EcoVadis for second year,
placing in the top 1% of companiesOn 11
May 2023, Quadient announced it has been awarded a Platinum rating
by EcoVadis for the second year running. EcoVadis is a leading
ratings organization for sustainability, and its Platinum rating is
the highest distinction awarded to the top 1% of performing
companies that EcoVadis rates in different industries. EcoVadis
assesses more than 100,000 companies in over 175 countries across
two hundred industries, evaluating twenty-one sustainability
criteria in four core themes: Environment, Labor & Human
Rights, Ethics and Sustainable Procurement.
Quadient Reaches Milestone of 200
Installed Smart Locker Solutions at US Higher Education
InstitutionsOn 1 June 2023, Quadient announced it has
reached the 200 milestone of installed smart locker solutions at
higher education campuses in the USA.
Colleges and universities face an increasing
challenge of managing the delivery of large volumes of packages on
campus. Parcel Pending by Quadient smart lockers streamline the
delivery process, saving higher education institutions staff time
and resources while improving the overall student experience.
PacificSource Health
Plans Elevates Member Communications with QuadientOn 8
June 2023, Quadient announced that PacificSource Health Plans has
implemented Quadient Inspire to reduce manual processes and IT
resources required for developing and maintaining renewals, member
plan materials and related communications. With Quadient Inspire,
PacificSource plans to reduce costs and increase efficiency through
automation, increasing the speed of creating and managing thousands
of blocks and templates of content, and enhancing member
communications.
Revolving credit facility renewed in
advance with a new maturity in 2028On 16
June 2023, Quadient S.A. announced the closing of a €300 million
syndicated Revolving Credit Facility (RCF).
This Revolving Credit Facility was negotiated
with a syndicate of seven international banks. This €300 million
RCF has an initial tenor of five years, maturing in June 2028, with
a €100 million accordion feature, bringing the potential total
amount of the credit line up to €400 million depending on the
banks’ approval. The new credit facility replaces the existing
undrawn €400 million RCF, which was set to mature in June
2024.
NBT Norway Selects Quadient to Provide
State-of-the-Art Mail Production Facility and Efficiently Manage
Parcel Volume GrowthOn 20 June 2023, Quadient announced
the signature of a large deal with NBT Norway, a prominent
transport company, to implement a state-of-the-art, tailor-made
mail production line capable of efficiently managing up to 6,000
packages per hour and representing an investment of more than €3
million overall.
Quadient signs a €90
million stimulus
participating loan, at attractive conditions, contributing to the
financing of its growing connected equipment
platformOn 20 June 2023, Quadient S.A. announced
the closing of a €90 million stimulus participating loan (Prêt
Participatif Relance – PPR). This stimulus participating loan,
which was implemented with BNP Paribas, has an 8-year maturity
and attractive conditions. It will be dedicated to financing
connected equipment under Quadient’s subscription business
model.
Quadient Secures Top 10 Position in
Truffle 100 Ranking of French Software CompaniesOn 28 June
2023, Quadient announced its continued presence among the top 10
software vendors in France. The recognition comes from the esteemed
Truffle 100 ranking, compiled by Truffle Capital and teknowlogy
group|CXP-PAC, in which Quadient has consistently secured its place
at the top for seven consecutive years based on the reported
software sales revenues of participating companies.
Quadient Software Platform Maintains
Leadership Position in Aspire LeaderboardOn 6 July 2023,
Quadient has been named a Leader in several segments of the
recently updated Aspire Leaderboard™, which showcases the best
customer communications management (CCM) and customer experience
management (CXM) software vendors.
Quadient Celebrates 1,000th Smart Locker
in France and Accelerates Roll-out of Open NetworkOn 13
July 2023, Quadient announced today it surpassed the 1,000 mark of
automated parcel lockers in France. This success is the result of
close collaboration with long-standing partners, including pick-up
point operator Relais Colis and sports retailer Decathlon.
Quadient applies to Public Finance
Department pilot phase to become a Partner Dematerialization
Platform in 2024On 19 July 2023, Quadient announced that
it has submitted its application to join the pilot project starting
in January 2024, as part of the process to be a registered Partner
Dematerialization Platform (PDP) by the French tax authorities.
This pilot phase will be conducted with selected customers among
the thousands of French businesses using Quadient solutions, ahead
of the enforcement of the new regulation for electronic invoices in
the summer of 2024.
Quadient:
Bpifrance takes a c.5% stake in Quadient’s
capital to support its transformation and development
strategyOn 27 July 2023, Bpifrance announced that
it holds c.5% of Quadient's capital and voting rights. This
investment is in line with Bpifrance's strategy to support French
companies undergoing transformation and positioned in promising
fast-growing activities. By acquiring a stake in Quadient’s
capital, Bpifrance is demonstrating its confidence in the Company's
development strategy in key attractive markets.
Quadient and Yamato transport unveil new
joint venture ambitions to expand their leadership for Japan in the
coming yearsOn 31
July 2023, Quadient announced the renewal of its parcel locker
joint venture in Japan with Yamato Transport. Created in 2016, the
joint venture Packcity Japan is being renewed under an unchanged
ownership with 51% of it being owned by Quadient and 49% owned by
Yamato Transport.
POST-CLOSING EVENTS
Quadient positioned as leader in 2023
SPARK Matrix for accounts payable automation and accounts
receivable applicationsOn 7 August 2023,
Quadient announced that it has been positioned as a Leader in two
global market research reports on Accounts Receivable and Accounts
Payable automation software solutions. Produced by management
consulting firm Quadrant Knowledge Solutions, the two reports—SPARK
MatrixTM: Accounts Payable Automation, 2023 and SPARK MatrixTM:
Accounts Receivable Applications, 2023—give Quadient strong ratings
across the parameters of technology excellence and customer
impact.
Quadient Invests in Artificial
Intelligence (AI) Capabilities
Leveraging Microsoft Azure AI Services to Power up its Cloud
PlatformOn 24 August 2023, Quadient announced the
integration of its Intelligent Communication Automation (ICA)
platform with Microsoft Azure AI, a portfolio of artificial
intelligence (AI) services designed for developers and data
scientists backed by a secure environment and responsible AI
principles. The integration of generative AI into Quadient’s cloud
platform will further contribute to transforming the way
organizations engage with their customers.
Quadient Partners with REPAY to Deliver
Exceptional Payment Experiences with Accounts Payable Automation
Solution
On 8 September 2023, Quadient announced a
technology partnership with Atlanta-based Repay Holdings
Corporation (NASDAQ: RPAY)(“REPAY”), a leading provider of
vertically-integrated payment solutions, to enhance the payment
experience within Quadient’s cloud-based accounts payable (AP)
automation solution. REPAY serves multiple Business Payments
verticals in North America, including retail automotive, education,
field services, governments and municipalities, healthcare, media,
homeowner association management and hospitality.
Decarbonizing delivery: more than 300
Quadient parcel lockers added to UPS France's pickup
points network
On 12 September 2023, UPS and Quadient announced
their strategic partnership, giving UPS access to Quadient's parcel
locker open network throughout France. This collaboration will
enable UPS to complement its French pickup points network,
currently the logistic company’s largest in Europe, comprising more
than 6 150 UPS Access Points. Quadient, whose parcel locker
business already boasts over 1,000 units in France, is continuing
to roll out its open network available to the various parcel
logistic players.
Quadient Enriches Customer Communication
Cloud Solution with Acquisition of Intelligent Form
Technology
On 18 September 2023, Quadient announced the
introduction of Quadient Inspire iForms, a new intelligent forms
capability added to its Customer Communication Management (CCM)
solution Quadient Inspire, following the acquisition of Daylight
Automation11.
Daylight Automation, formerly FormHero, is a
cloud-based low-code platform that allows organizations to rapidly
build and deploy personalized digital solutions. Their customer
base spans across key customer-centric industries such as banking
and insurance, including three major financial institutions in
Canada. Both companies had been collaborating closely since their
partnership announced in 2022. The addition of this new intelligent
form capacity to Quadient Inspire will bring enhanced benefits to
companies looking for cloud-based solutions that help create
engaging customer experiences at scale.
To know more about Quadient’s newsflow, previous
press releases are available on our website at the following
address: https://invest.quadient.com/en-US/press-releases.
CONFERENCE CALL & WEBCAST
Quadient will host a
conference call and webcast today at 6:00 pm Paris time (5:00 pm
London time).
To join the webcast,
click on the following link: Webcast.
To join the conference
call, please use one of the following phone numbers:
▪ France: +33 (0) 1 70
37 71 66.
▪ United States: +1
786 697 3501.
▪ United Kingdom
(standard international): +44 (0) 33 0551 0200.
Password: Quadient
A replay of the
webcast will also be available on Quadient’s Investor Relations
website for 12 months.
CALENDAR
- 29 November
2023: Third quarter 2023
sales release (after close of trading on the
Euronext Paris regulated market).
About Quadient®
Quadient is the driving force behind the world’s
most meaningful customer experiences. By focusing on three key
solution areas, Intelligent Communication Automation, Parcel Locker
Solutions and Mail-Related Solutions, Quadient helps simplify the
connection between people and what matters. Quadient supports
hundreds of thousands of customers worldwide in their quest to
create relevant, personalized connections and achieve customer
experience excellence. Quadient is listed in compartment B of
Euronext Paris (QDT) and is part of the CAC® Mid & Small and
EnterNext® Tech 40 indices. Quadient shares are eligible for
PEA-PME investing.
For more information about Quadient, visit
https://invest.quadient.com/
Contacts
Catherine Hubert-Dorel,
Quadient+33 (0)1 45 36 61
39c.hubert-dorel@quadient.comfinancial-communication@quadient.com
Caroline Baude, Quadient+33 (0)1 45 36 31
82c.baude@quadient.com |
OPRG FinancialIsabelle Laurent / Fabrice Baron+33
(0)1 53 32 61 51 /+33 (0)1 53 32 61
27isabelle.laurent@oprgfinancial.frfabrice.baron@oprgfinancial.fr |
FULL-YEAR 2022
Consolidated income
statement
In € million |
H1 2023(period
ended on
31 July 2023) |
H1 2022(period
ended on
31 July 2022) |
Sales |
522 |
524 |
Cost of sales |
(133) |
(139) |
Gross margin |
389 |
385 |
R&D expenses |
(31) |
(28) |
Sales and marketing expenses |
(140) |
(146) |
Administrative and general expenses |
(91) |
(92) |
Service and support expenses |
(56) |
(53) |
Employee profit-sharing and share-based payments |
(3) |
(1) |
Current operating income before acquisition-related
expenses |
68 |
65 |
Acquisition-related expenses |
(3) |
(5) |
Current operating income |
65 |
61 |
Optimization expenses and other operating income &
expenses |
(6) |
(5) |
Operating income |
59 |
56 |
Financial income/(expense) |
16 |
(14) |
Income before taxes |
43 |
42 |
Income taxes |
(6) |
(12) |
Share of results of associated companies |
0 |
0 |
Net income |
37 |
30 |
Minority interests |
1 |
1 |
Net attributable income |
36 |
29 |
Simplified consolidated balance
sheet
AssetsIn € million |
31 July 2023 |
31 January 2023restated |
Goodwill |
1,073 |
1,080 |
Intangible fixed assets |
124 |
125 |
Tangible fixed assets |
149 |
151 |
Other non-current financial assets |
80 |
80 |
Leasing receivables |
575 |
595 |
Other non-current receivables |
5 |
5 |
Deferred tax assets |
33 |
16 |
Inventories |
95 |
88 |
Receivables |
198 |
229 |
Other current assets |
103 |
91 |
Cash and cash equivalents |
170 |
158 |
Current financial instruments |
3 |
3 |
TOTAL ASSETS |
2,610 |
2,622 |
LiabilitiesIn € million |
31 July 2023 |
31 January 2023Restated |
Shareholders’ equity |
1,067 |
1,052 |
Non-current provisions |
13 |
13 |
Non-current financial debt |
776 |
730 |
Current financial debt |
92 |
114 |
Lease obligations |
48 |
50 |
Other non-current liabilities |
1 |
3 |
Deferred tax liabilities |
132 |
136 |
Financial instruments |
6 |
6 |
Trade payables |
64 |
80 |
Deferred income |
185 |
203 |
Other current liabilities |
225 |
234 |
TOTAL LIABILITIES |
2,610 |
2,622 |
Simplified cash flow
statement
In €millions |
H1 2023(period
ended on
31 July 2023) |
H1
2022(period
ended on
31 July 2022) |
EBITDA |
112 |
111 |
Other elements |
(7) |
(5) |
Cash flow before net cost of debt and income
tax |
105 |
107 |
Change in the working capital requirement |
(57) |
(53) |
Net change in leasing receivables |
16 |
18 |
Cash flow from operating activities |
64 |
72 |
Interest and tax paid |
(35) |
(15) |
Net cash flow from operating activities |
29 |
57 |
Capital expenditure |
(46) |
(44) |
Net cash flow after investing activities |
(17) |
13 |
Impact of changes in scope |
0 |
2 |
Others |
(0) |
0 |
Net cash flow after acquisitions and
disposals |
(17) |
15 |
Share buyback |
0 |
1 |
Dividends paid |
0 |
(2) |
Change in debt and others |
26 |
(401) |
Net cash flow from financing activities |
26 |
(402) |
Cumulative translation adjustments on cash |
1 |
(14) |
Change in net cash position |
10 |
(401) |
(1) H1 2023 sales are compared to H1 2022 sales,
from which is deducted revenue from Graphics activities in the
Nordics and Shipping business in France for a consolidated amount
of €(5) million, and are restated for an amount of
€7 million negative currency impact over the period.(2)
Current operating income before acquisition-related expenses(3)
Organic change excludes currency, scope and IFRIC impacts(4)
Including IFRS 16(5) H1 2023 ARR benefited from a €3.9 million
negative currency impact vs. 31 January 2023(6) For the H1 2023,
the average compounded number of shares is 33,981,073(7) EBITDA =
current operating income + provisions for depreciation of tangible
and intangible fixed assets.(8) Group shareholders' equity amounted
to €1,082 million as at 31 January 2023 prior to the aforementioned
accounting corrections. After restatement, Group shareholders'
equity stood at €1,052 million as at 31 January, 2023.(9) Net debt
/ shareholders’ equity(10) Based on 2020 current operating income
before acquisition-related expenses excluding Parcel Pending’s
earn-out reversal, i.e. €145 million, with a scope effect
resulting in a €140 million proforma(11) From a financial
standpoint, this acquisition is not material to Quadient’s
financial results.
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