Quadient SA (NPACF) (H1 2024) Earnings Call Transcript Highlights: Revenue Growth and Strategic ...

GuruFocus Research
5 min read

In This Article:

  • Revenue: EUR534 million, up 3.2% in reported figures.

  • Subscription Revenue: EUR384 million, representing 72% of total revenue.

  • Current EBIT: EUR61 million, an organic increase of 0.3%.

  • Leverage Ratio: 1.6 times at the end of H1 2024.

  • Share Buyback Program: EUR30 million over 18 months.

  • Digital Automation Platform Revenue: EUR130 million, up 5.9% organically.

  • Digital Automation Platform EBITDA Margin: 15.7%, an improvement of 6.4 points.

  • Mail Solutions Revenue: EUR362 million, a 0.5% organic decline.

  • Mail Solutions EBITDA Margin: 25.8%, down 3.2 points.

  • Parcel Lockers Revenue: EUR43 million, a 2.5% organic decline.

  • Parcel Lockers EBITDA Margin: -6.7%, down 3.7 points.

  • Net Attributable Income: EUR24 million, down from EUR36 million last year.

  • Free Cash Flow: Positive EUR3 million, improved from negative EUR15 million last year.

  • CapEx: EUR46 million, stable compared to last year.

  • Net Financial Debt: EUR726 million.

  • Liquidity: EUR194 million of cash and EUR300 million of undrawn credit facilities.

Release Date: September 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Quadient SA (NPACF) reported a revenue of EUR 534 million for H1 2024, up 3.2% in reported figures.

  • The company's subscription business model now represents 72% of total revenue, amounting to EUR 384 million in H1 alone.

  • Quadient SA (NPACF) has maintained its AA ranking with MSCI, reflecting its strong ESG commitments.

  • The digital automation platform saw a significant improvement in profitability, with an EBITDA margin increase of 6.4 points, reaching 15.7%.

  • The company announced a EUR 30 million share buyback program, demonstrating confidence in its strategic plan and shareholder value creation.

Negative Points

  • Mail Solutions EBITDA declined, impacting overall profitability despite the growth in digital automation.

  • The parcel lockers segment reported a 2.5% organic revenue decline and a negative EBITDA margin of -6.7%.

  • The change in commercial agreement with Yamato in Japan negatively impacted locker subscription-related revenue.

  • The cost of debt increased to EUR 20 million due to rising interest rates, affecting net attributable income.

  • The company faced delays in the implementation of two large US digital contracts, impacting revenue growth in the digital segment.

Q & A Highlights

Q: Could you give a trading update regarding Q3 and what you expect for the coming months in the digital business? Also, is e-invoicing already a tailwind for orders in Europe? A: The ARR on an annualized basis has grown to 15% in H1, indicating a strong subscription revenue growth for the next 12 months. We expect the subscription-related revenue growth to significantly increase in H2, likely above double digits. Regarding e-invoicing, larger enterprises may anticipate the regulation, but the big wave of small and mid-sized companies will likely wait for the law timeline to be confirmed.

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