Quadient SA - Good momentum maintained in Q3 2023, at the same pace
as in H1, leading to a 6th consecutive quarter of organic revenue
growth
Good momentum maintained in Q3 2023, at
the same pace as in H1, leading to a 6th
consecutive quarter of organic revenue growth
Key highlights
-
Both Q3 2023 and 9M 2023 consolidated sales up 2.0%
organically(1) with 9M
2023 revenue at €785 million
-
9M 2023 subscription-related revenue up +3.6% on
an organic basis, representing 71% of total
revenue
-
€200m ARR(2) threshold crossed
for the Software Solution
-
Strong performance from North America with all
three solutions contributing to the +4.4% organic growth in the
region in 9M 2023
-
AA rating maintained with MSCI ESG ratings.
Quadient is ranked in the leader category for the 8th consecutive
year
-
FY 2023 organic revenue growth is expected to
remain broadly in line with current year-to-date level of c.2% vs.
the c.3% previously expected
-
FY 2023 current EBIT(3) outlook confirmed
at c.10% organic growth, given tight costs control
Paris, 29 November 2023,
Quadient S.A. (Euronext Paris:
QDT), a leader in helping businesses create meaningful customer
connections through digital and physical channels, today announces
its 2023 third-quarter consolidated sales (period ended on 31
October 2023).
Geoffrey Godet, Chief Executive Officer of
Quadient S.A., stated: “Our consistent momentum in organic revenue
growth makes Q3 2023 our sixth consecutive quarter of expansion, a
testament to the successful refocus of Quadient as an integrated
company with leading positions in its chosen markets. In the
meantime, our subscription-based organic revenue growth continues
to outpace the Group overall organic growth, demonstrating further
progress in our strategic shift towards a stronger recurring
revenue business model across all our solutions.
As evidenced by the symbiotic relationship
between our Mail business and our Software segment, the synergies
amongst our solutions are a decisive factor of our strategy and
they empower us to leverage our greatest asset—our large and
diversified customer base—through continuous cross-selling
initiatives. In addition, our commitment to innovation and a
differentiated suite approach for our Software Solution has
delivered further growth opportunities. As a result, we have now
crossed the 200 million euros mark of ARR(2) for our cloud
software solution, setting Quadient as the leader in its
market.
Thanks to the constant upgrade of our offering,
our Mail business has delivered another resilient quarter,
outperforming the competition and continuously delivering
solid cross-sell bookings for our Software Solution. Additionally,
our ability to combine innovation with effective and differentiated
go-to-market is also driving early success for our open network of
parcel lockers, both in France and in the UK. The roll-out of these
carrier-agnostic networks is progressing well and we are excited by
the ramp up of the initial volumes both for the last mile
deliveries and for the returns.
Despite the more challenging macro-economic
landscape resulting in extended sales cycles amongst large
enterprises, our SMB sales momentum stays robust. Our focus remains
steadfast on nurturing recurring revenues while navigating these
market complexities and we are confident in both our business
model's resilience and our ability to drive profitable growth in Q4
2023 and beyond.
Finally, we welcome the arrival of new
significant shareholders, namely Bpifrance and VESA Equity
Investment, at a pivotal time in our history, as we are heading
towards the end our three-year strategic plan and are about to
present new ambitions in 2024 for our next phase of profitable
growth.”
NINE-MONTHS 2023 CONSOLIDATED
SALES
Group sales stood at
€785 million in 9M 2023, a 2.0% organic growth compared to 9M
2022 and a (1.1)% decrease on a reported basis. The variation
includes a negative currency impact of €19 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 in
June 2022, and the acquisition of Daylight in September
2023.
Consolidated sales by
Solution
Consolidated sales
In € million |
9M 2023 |
9M 2022 |
Change |
Organic change(1) |
Intelligent Communication Automation |
179 |
166 |
+8.0% |
+9.7% |
Mail-Related Solutions(a) |
539 |
555 |
(2.9)% |
(0.6)% |
Parcel Locker Solutions(a) |
66 |
67 |
(0.8)% |
+3.9% |
Other solutions divested in 2022 |
0 |
5 |
n/a |
n/a |
Group total |
785 |
793 |
(1.1)% |
+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. |
Intelligent Communication
AutomationIn 9M 2023, sales from Intelligent
Communication Automation demonstrated robust growth and
reached €179 million, up 9.7% organically and up 8.0% on
a reported basis compared to 9M 2022.
Subscription-related revenue
recorded a strong 17.7% organic growth, accounting for 80%
of Intelligent Communication Automation total sales in 9M 2023, a
significant increase compared to 75% in 9M 2022. Transitioning
toward a SaaS-centric business model continued to progress, with
SaaS customers representing 81% of the total Software
customer base at the end of 9M 2023. Organic growth
in subscription-related revenue benefited from positive
contributions from all regions and from a further strong
acquisition of new logos within the SMB segment across multiple
sectors. Q3 2023 witnessed substantial successes in cross-selling
initiatives with 36% of the software bookings initiated from the
mailing customer base. However, the postponement of two large
projects, and delayed decisions by major enterprises impacted the
growth of subscription-related revenue in Q3.
License sales and professional services continue
to decline with licenses representing less than 7% of total sales
and professional services declining to c.13%, primarily due to
evolving customer preferences, cloud adoption requiring fewer
onboarding services and customer mix evolving towards a higher
share of mid-sized companies.
At the end of 9M 2023, annual recurring
revenue (ARR), which is a forward-looking indicator of
future subscription-related revenue, increased to €202
million. It represents a 13.4% annualized organic
growth(4) versus the end of FY 2022 despite the negative
impact of the postponed two large projects. Crossing the €200
million threshold establishes Quadient cloud platform as the leader
in its market.
Focus remains on improving the platform offering
and on innovation, and since the beginning of Q3 2023, two new
strategic partnerships were signed, to provide enriched corporate
data for enhanced credit assessment. With Coface, the partnership
offers an additional module for accounts receivable management
within Quadient’s cloud platform. The second partnership with
Altares further bolstered Quadient’s Account Receivables module by
integrating their expertise in business data, empowering the
platform’s AI capabilities for predicting payment behaviors and
tailoring effective reminder strategies. The new functionalities
include highly accurate company rating and credit analysis to
improve the management of payment collections.
Finally, Quadient received notable recognition,
maintaining its 15th position in the Top 250 Ranking of French
Software Companies and securing the 5th position in the ‘Horizontal
Publishers’ category.
Mail-Related
SolutionsMail-Related Solutions sales of
€539 million displayed resilience, down (2.9)% on a reported basis
but only marginally down by (0.6)% on an organic basis in 9M 2023,
thanks to a 0.9% positive organic growth in Q3.
Of note, hardware sales recorded a 1.3% organic
growth in 9M 2023, including a strong 5.7% organic growth in Q3
2023, fueled by strategic placements in North America as well as
positive contribution from the France/Benelux region. This goes
along with an impressive International performance over Q3 thanks
to the large NBT deal in the Nordics(5)
Quadient commitment to innovation is highlighted
in the substantial growth of its upgraded installed base,
reaching 30% by the end of 9M 2023. This positive
trajectory is supported by ongoing investments in renewing the
product offering, fostering the adoption of Quadient’s latest
generation equipment.
Importantly, cross-selling remains a key focus,
as evidenced in the recent success in securing a cross-sell
contract with the US Department of Veteran Affairs. This strategic
win involved deploying three Quadient products, showcasing the
effectiveness of the Group’s cross-sell strategy combining the
latest mailing machine, with a folder/inserter and Intelligent
Communication Automation software.
Additionally, the continuous progress on
hardware placement is accompanied by the expansion of Mail Related
Solutions’ software portfolio with the launch, in Q3, of S.M.A.R.T.
ESSENTIAL that allows for detailed cost accounting and
multi-carrier shipping functionalities, in the USA. This expansion
completes and extends the software range to meet the diverse needs
of all customer segments, enhancing Quadient’s market
positioning.
The modest (1.4)% decline in
subscription-related revenues in 9M 2023 underscores the resilience
of Quadient business thanks to strong hardware placements in
previous years and positive contributions from usage-related
revenue, demonstrating its ability to effectively navigate the
challenges of the mail industry . Quadient solid order intake and
backlog also highlight the enduring strength of the business model,
despite facing longer sales cycles for large deals.
Parcel Locker
SolutionsParcel Locker Solutions sales
reached €66 million in 9M 2023, a 3.9% increase on an organic basis
and a 0.8% decrease on a reported basis compared to 9M 2022.
Subscription-related revenues were up 7.6% organically in the first
nine months of the year but growth was lower in Q3, at +2.9%. This
slowdown was mainly due to the temporary negative impact of the new
commercial agreement signed with Yamato in Japan in July, while
both France and North America recorded double-digit organic growth
in subscription-related revenue in Q3 2023.
License and hardware sales were down (3.4)%
organically in 9M 2023, as they suffered from weaker placements in
the retail sector in North America and the completion of the
deployment of some contracts in the International region.
Quadient strategic focus remains on establishing
open networks of parcel lockers in the UK and France, witnessing
fast volume increases that positively impact last-mile delivery and
return processes. An exceptional achievement for Quadient was the
recognition of the Drop box locker as the Innovation of the Year
2023 in the Parcel and Postal Technology International Awards. This
accolade underscores Quadient’s commitment to designing solutions
that enhance the returns experience for consumers and retailers,
simplifying the collection and return processes.
Quadient continues to forge impactful
partnerships, the latest collaboration having been signed with GLS
France to grant a privileged access to Quadient’s French open
locker network to the carrier. Space will be reserved on an
exclusive basis in a number of specific sites within
the carrier’s priority geographical areas. GLS France will be
able to access to up to 1,500 Quadient drop-off and pick-up
points, including those from the Auchan partnership, signed in
September 2023.
Trend in parcel lockers installation accelerated
in Q3 2023 with c.600 new lockers installed during the period.
Quadient’s global installed locker base reached c.19,500
units at the end of 9M 2023 vs. c.18,000 units at the end
of FY 2022.
Consolidated sales by
geographies
In € million |
9M 2023 |
9M 2022 |
Change |
Organic
change(1) |
North America |
447 |
442 |
+1.1% |
+4.4% |
Main European countries(a) |
263 |
267 |
(1.4)% |
(2.9)% |
International(b) |
75 |
84 |
(11.5)% |
+5.3% |
Group total |
785 |
793 |
(1.1)% |
+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 H1 2022, other solutions
previously recorded under Additional Operation and divested in June
2022. |
Sales in North America (57% of
Group sales) were up 4.4% organically to
€447 million and up 1.1% on a reported basis.
All three Solutions posted organic growth in
9M 2023 in the region. Intelligent Communication
Automation was the main contributor with solid double-digit organic
growth. The penetration of Quadient’s cloud-based solutions
continues to be well supported by successful cross-selling across
the Mail customer base while the Accounts Receivable and Accounts
Payable cloud solutions also performed well in the region. Sales
from Mail-Related Solutions were supported by the still solid
penetration of recently launched products.
Main European countries (33% of
Group sales) were down by (2.9)% organically and (1.4)% on a
reported basis to €263 million, recording a contrasted
performance between organic growth posted by France/Benelux and a
decline in the UK and Germany.
The International segment (10%
of Group sales) delivered a strong 5.3% organic growth, to
€75 million, thanks to the solid performance from
Mail-Relation Solutions in Q3 and despite the temporary negative
impact from the new contractual commercial agreement signed with
Yamato.
Q3 2023 SALES
Consolidated sales stood at
€263 million in the third quarter of 2023, up 2.0% on an
organic basis and down (2.6)% on a reported basis compared to the
third quarter of 2022. The variation includes a negative currency
impact of €13 million and a positive scope effect of
€1 million. The change of scope is related to the
acquisition of Daylight in September 2023.
In € million |
Q3 2023 |
Q3 2022 |
Change |
Organic
change(1) |
Intelligent Communication Automation |
60 |
58 |
+2.7% |
+5.8% |
Mail-Related Solutions(a) |
181 |
189 |
(3.7)% |
+0.9% |
Parcel Locker Solutions(a) |
21 |
23 |
(6.6)% |
+0.9% |
Group total |
263 |
270 |
(2.6)% |
+2.0% |
(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 5.8% on an organic basis to
€60 million with a double-digit growth in North America. The
subscription-related revenue showed a 12.5% organic growth, a lower
level than in H1 2023 mainly due to one-offs:
- The postponement
of the implementation of two large projects, and
- Longer sales
cycles and delayed decision making from large enterprises
Mail-Related Solutions
delivered a remarkable performance with revenue reaching
€181 million in Q3, up by 0.9% on an organic basis with
a good growth in hardware sales (+5.7%) and a resilient
performance in subscription-related revenue (-1.2%). Of note,
the double-digit organic growth in International.
Parcel Locker Solutions sales
stood at €21 million in Q3 2023, with a +0.9% organic growth
compared to Q3 2022.
In € million |
Q3 2023 |
Q3 2022 |
Change |
Organic
change(1)
|
North America |
152 |
155 |
(2.4)% |
+4.5% |
Main European countries(a) |
85 |
88 |
(3.9)% |
(5.6)% |
International(b) |
26 |
26 |
+0.4% |
+13.7% |
Group total |
263 |
270 |
(2.6)% |
+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. |
North America posted 4.5%
organic growth in the quarter, driven by growth in all three
solutions, including double-digit organic growth in Intelligent
Communication Automation.
Main European Countries posted
a 5.6% organic decline, despite a strong performance of Parcel
Locker Solutions, benefitting from the development of the
recent contracts in France. This was offset by a decline in
Intelligent Communication Automation due to further change from
license to SaaS business model.
International increased
strongly by 13.7% organically, thanks to a strong performance in
hardware sales, particularly in Mail-Related Solutions.
Investigations relating to the situation
of the Italian and Swiss subsidiaries of Mail-Related
Solutions
As far as the accounting irregularities detected
in the Mail-Related Solutions’ Italian and Swiss subsidiaries are
concerned, the investigations have now confirmed that the
irregularities are contained to these two subsidiaries. These
investigations are however still ongoing and as stated in the H1
2023 results press release, the Group cannot exclude additional
financial impacts in the 2023 financial accounts, whilst it
reserves the right to take legal action against any person
responsible for these accounting irregularities.
OUTLOOK
FY 2023 guidance and 2021-2023 financial
outlook
FY 2023 organic revenue growth is expected
to remain broadly in line with the 2% recorded in the 9M 2023
taking into account the current macro-economic environment. The FY
2023 organic growth guidance for Group revenue is therefore
adjusted to c.2% vs c.3% previously and the 2021-2023 outlook at
revenue level is also adjusted accordingly.
This level of organic growth together with both
the operating leverage of the business and the focus on cost
control enables the Group to maintain its FY 2023 guidance of c.10%
organic growth at the
EBIT(3)
level.
Revenue guidance
- FY 2023
organic sales growth is expected at c.2% vs. c.3% previously
- Sales organic
CAGR over the 2021-23 three-year period is therefore expected at
c.2.5% vs. a minimum of 3% previously
Current
EBIT(3)
guidance reiterated
- FY 2023 organic
growth in current
EBIT(3) is
expected at c.10%.
- Current
EBIT(3) organic
CAGR is therefore confirmed at minimum mid-single digit
organic(6) current
EBIT(3) CAGR
over the 2021-23 three-year period
BUSINESS HIGHLIGHTS
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
SolutionOn 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
networkOn 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
TechnologyOn 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
Automation(7).
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.
Quadient selected as French Social
Security National Agency exclusive supplier for mail management
solutionsOn 28 September 2023, Quadient announced having
won a major tender for the French Social Security National Agency
(UCANSS). The 4-year framework agreement gives Quadient the
exclusive mandate to supply a variety of mailing, inserting and
letter-opening equipment to organizations affiliated to the French
Social Security body.
POST-CLOSING EVENTS
Real estate company Galimmo partners
with Quadient to simplify parcel delivery and collection at its
shopping centers in FranceOn 9 October 2023, Quadient
announced that Galimmo, a real estate company that owns and
operates the shopping centers adjacent to Cora hypermarkets in
France, will soon be offering Parcel Pending by Quadient smart
parcel delivery within its French network.
Quadient Partners with MFG in the UK,
Expanding Innovative Open Locker NetworkOn 12 October
2023, Quadient announced a new partnership with Motor Fuel Group
(MFG). MFG, one of the UK’s leading independent forecourt
operators, will start hosting a number of Parcel Pending by
Quadient Open Network Lockers in the coming weeks, offering 24/7
delivery and pickup for carriers and consumers across the UK.
Partial purchase by Quadient under its
€325,000,000.00; 2.25% notes due 2025 - ISIN Code
FR0013478849On 19 October 2023, Quadient
has proceeded to a partial purchase under the notes issued by
Quadient on the 23rd of January 2020 for an amount of
€325,000,000.00 at a rate of 2.25% due 3rd February 2025 (ISIN code
FR0013478849) (the "Notes"). The nominal amount purchased by
Quadient is € 34,200,000.00.
The outstanding nominal amount of the Notes
after this partial purchase was €
290,800,000.00.
On 9 November 2023, Quadient
has proceeded to a partial purchase under the notes issued by
Quadient on the 23rd January 2020 for an amount of €325,000,000.00
at a rate of 2.25% due 3rd February 2025 (ISIN code FR0013478849)
(the "Notes"). The nominal amount purchased by Quadient is €
12,200,000.00.
The outstanding nominal amount of the Notes
after this partial purchase is now
€ 278,600,000.00.
Quadient Secures Good Position in the
2023 Top 250 Ranking of French Software CompaniesOn 9
November 2023, Quadient announced it has maintained its 15th
position in this year’s Top 250 ranking of French software
companies, also placing fifth in the ‘Horizontal Publishers’
category. The ranking takes into account 2022 software-related
revenues reported by 275 software companies, including licenses,
subscriptions and services.
To know more about Quadient’s news flow,
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
- March 2024:
Fourth quarter sales and full-year results 2023
release
***
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 |
(1) 9M 2023 sales are compared to 9M 2022 sales,
from which is deducted revenue from Graphics activities in the
Nordics and Shipping business in France and to which is added the
revenue from Daylight for a total consolidated amount of
€(5) million, and are restated for an amount of
€19 million negative currency impact over the period.Q3 2023
sales are compared to Q3 2022 sales, to which is added the revenue
from Daylight for a total consolidated amount of €1 million,
and are restated for an amount of €13 million negative
currency impact over the period.(2) Annual Recurring Revenue:
Forward-looking indicator of future subscription-related revenue
for Intelligent Communication Automation(3) Current operating
income before acquisition-related expenses(4) 9M 2023 ARR benefited
from a €3.5 million positive currency impact vs. FY 2022(5) Cf to
the press release published on 20 June 2023(6) 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(7) From a financial standpoint,
this acquisition is not material to Quadient’s financial
results.
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