Release Date: March 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quadient SA (NPACF, Financial) successfully met all its financial targets for 2024, delivering EUR1.93 billion in revenues, marking a 2.8% increase on a reported basis.
- The company achieved a significant improvement in the profitability of its digital and local automation platforms, with digital EBITDA margin surging to 17.5%.
- Quadient SA (NPACF) expanded its subscription-based revenue model, with subscription-related revenue now representing 71% of total revenue.
- The company completed two strategic acquisitions in Mail and Lockers, reinforcing its leadership and setting the stage for future revenue growth.
- Quadient SA (NPACF) launched a EUR30 million share buyback program, demonstrating confidence in its value creation potential and commitment to enhancing shareholder returns.
Negative Points
- The Mail business experienced a 2.5% organic decline in revenue, with a notable decline of 4% in both Q3 and Q4.
- EBITDA margin for the Mail business decreased by 2.5 points to 27.4%, impacted by higher hardware and mix, and the dilutive impact of the Frama acquisition.
- The company faced challenges in the Japanese market due to macroeconomic conditions impacting parcel volumes.
- Net attributable income decreased to EUR66 million from EUR69 million the previous year, despite higher interest rates and optimization expenses.
- Net financial debt increased to EUR741 million, attributed to acquisitions, dividends, share buybacks, and currency effects.
Q & A Highlights
Q: Could you give more detail on what you expect for Frama's profitability? Is it safe to assume that normative profitability will not be reached this year, but mostly next year?
A: Laurent du Passage, CFO: Frama's profitability has improved between H1 and H2 of 2024. We incurred about EUR4 million in restructuring costs related to the acquisition. By 2025, Frama will not be dilutive to the Mail segment's profit. While we haven't reached the full run rate yet, we are on track to achieve a 25% EBITDA margin, aligning with the rest of the Mail business.
Q: Is Digital current EBIT positive?
A: Laurent du Passage, CFO: Yes, the current EBIT of Digital is positive. We are close to the EUR10 million mark on the EBIT side, as detailed in the appendix of the presentation.
Q: What is the share of the IR and AP automation revenues within Digital revenues?
A: Geoffrey Godet, CEO: We do not break down revenue by modules anymore due to shared functionalities across modules. However, approximately 55-60% of revenue is related to our Enterprise segment, with the remainder in the mid-segment. The mid-segment, driven by accounts payable and receivable automation, generally grows faster than the Enterprise segment.
Q: The Mail division underperformed in Q4. Can we expect the same sharp decline in 2025, especially in H1?
A: Laurent du Passage, CFO: We expect a decline of around 3% CAGR over the three-year period, which is still better than the market trend. We anticipate a softer Q1, with performance improving in Q2, Q3, and Q4.
Q: Is Package Concierge already profitable in 2024?
A: Laurent du Passage, CFO: Yes, Package Concierge is already profitable.
Q: Why is Q1 growth expected to be the lowest point of growth in 2025?
A: Geoffrey Godet, CEO: Q1 is typically our smallest quarter due to the end of the decertification in the US and the echo of lower activities from Q1 2020. We expect growth to build up in Q2, Q3, and Q4.
Q: Are you still looking for strategic acquisitions? If so, in which segment: Mail, Digital, Locker?
A: Geoffrey Godet, CEO: We focus on bolt-on acquisitions rather than strategic ones. Our 2030 plan does not rely on acquisitions, but we remain opportunistic across all segments, including Mail, Digital, and Lockers.
Q: How many lockers do you have in the US before the latest acquisition?
A: Geoffrey Godet, CEO: Before the Package Concierge acquisition, we had between 14,000 and 15,000 lockers in the US. The acquisition added 3,000 lockers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
