Quadient Sa · EURONEXT:QDT
Quadient Sa — H1 2019 Earnings Presentation
45 slides from Quadient Sa's earnings presentation, September 2019
Slide 1: 2019 First Half-Year Results
2019 FIRST HALF-YEAR RESULTS Put your title here, put you title . September 2019
Slide 2: Limitation of liability
Limitation of liability Forward-looking statement (Safe Harbour) • This presentation contains forward-looking statements (made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995), which, by their nature, involve a degree of risk and uncertainty. Forward-l
Slide 3: Welcome to our next chapter: Neopost becomes Quadient
Welcome to our next chapter Neopost becomes Quadient 3
Slide 4: Why Quadient and what does it mean?
Why Quadient and what does it mean? Cross-sell opportunities Resonates across Quadient is an stakeholders inventive name – From one holding portraying to one unified elegance, company sophistication, One unified and simplicity. It brand is unique in our industry, making it memorable and timeless. On
Slide 5: The Quadient brand platform
The Quadient brand platform Simplify the connection between people and what matters. VISION MISSION VALUES To be the driving force Together, we focus on delivering solutions EMPOWERMENT behind the most meaningful that create relevant and personalized PASSION INSPIRATION customer experiences. interac
Slide 6: 6
6
Slide 7: Agenda
Agenda 1 H1 2019 highlights 2 Execution of the “Back to Growth” strategy 3 H1 2019 Operational review 4 H1 2019 Financial review 5 H1 2019 Financial targets 3
Slide 8: H1 2019 Highlights
H1 2019 Highlights Geoffrey GODET
Slide 9: Organic sales growth per semester
Organic sales growth per semester 2.3% 0.9% -0.4% -0.9% -0.9% -1.1% -2.4% -3.3% -3.4% H1 H2 H1 H2 H1 H2 H1 H2 H1 2015 2015 2016 2016 2017 2017 2018 2018 2019 Confirming positive trends initiated in 2018 while Mail Related Solutions is still dominant in the mix at c. 70% sales 9
Slide 10: H1 2019 in a nutshell
H1 2019 in a nutshell Organic sales growth: +2.3% vs H1 2018 o Major Operations: +1.1% • Especially strong growth in North America (+5.3%) • Good performance in each of the 4 solutions o Additional Operations: substantial growth at +8.2% o Fifth quarter of organic growth in a row with +1.8% in Q2 20
Slide 11: Execution of the strategy
Execution of the strategy Geoffrey GODET
Slide 12: Reminder - Strategic direction
Reminder - Strategic direction • Refocus the Group on its Major Operations where the Group has already built key positions Customer Experience Management 2 4 Business Process Automation main geographic regions major solutions Mail Related Solutions Parcel Locker Solutions North America: Canada, Unit
Slide 13: H1 2019: execution of the strategy
H1 2019: execution of the strategy • Organization & new branding • Major Operations Roll-out of the new organization: Investments in the go-to-market and innovation From a holding company of independents businesses Ongoing integration of Parcel Pending as planned to a unified company with a
Slide 14: H1 2019 Operational Review
H1 2019 Operational Review Geoffrey GODET Jean-François LABADIE
Slide 15: H1 2019 organic change in sales
H1 2019 organic change in sales (in € million, % of organic change) Reported growth: +5.5% 557 Organic growth +2.3% +16 +7 +3.1% +5 (8) +4 +8.2% 528 +4 +20.5% +1 (2.1)% +23.2% +8.5% +0.1% Major Operations +1.1% H1 2018 Scope effect* Customer Experience Business Process Mail Related Parcel Locker Add
Slide 16: Customer Experience Management in H1 2019
Customer Experience Management in H1 2019 Major Operations • H1 sales • Strong increase in SaaS subscription €50m • Growth in maintenance & professional services • Organic change (vs H1 2018) Thanks to the good performance in 2018 license sales +8.5% • Double digit growth in North America & German
Slide 17: Business Process Automation in H1 2019
Business Process Automation in H1 2019 Major Operations • H1 sales • Strong growth in France and in the US €30m • Organic change (vs H1 2018) • Difficult second quarter in the UK/Ireland zone due to a +20.5% lower number of new licenses’ deals • Continuous customer acquisition campaigns Breakdown by
Slide 18: Mail Related Solutions in H1 2019
Mail Related Solutions in H1 2019 Major Operations • H1 sales • Strong performance in North America €360m Low single digit organic growth • Organic change (vs H1 2018) Stabilization of recurring revenues -2.1% Strong growth in hardware sales Good performance in production mail Higher renew
Slide 19: Parcel Locker Solutions in H1 2019
Parcel Locker Solutions in H1 2019 Major Operations • H1 sales • Residential - Parcel Pending €20m Ongoing integration as planned • Organic change (vs H1 2018) +23.2% Strong top line growth: above 30% in H1 2019 vs H1 2018 • Universities (in the US) Breakdown by quarter (% change vs 2018) Stro
Slide 20: Major Operations in H1 2019
Major Operations in H1 2019 • H1 sales • Accelerated organic growth in North America €460m +5.3% in H1 2019, driven by growth in each of 83% of Group total sales the four Major Solutions • Organic change (vs H1 2018) +1.1% • Decline in main European countries (-3.3%) reflecting different trends: B
Slide 21: Additional Operations in H1 2019
Additional Operations in H1 2019 • H1 sales • High organic growth in the 4 Major Solutions €97m in other geographies 17% of Group total sales Positive one-offs in Asia-Pacific in Customer • Organic change (vs H1 2018) Experience Management +8.2% Positive one-offs in export markets for Mail Relat
Slide 22: H1 2019 Financial Review
H1 2019 Financial Review Jean-François LABADIE
Slide 23: H1 2019 figures
H1 2019 figures (in €m, % of organic change vs H1 2018, unaudited figures) Major Operations Additional Operations Total Group North Main European Total America countries Customer Experience €50m Management +8.5% Business Process €30m Automation +20.5% Mail Related €360m Solutions (2.1)% Parcel Locke
Slide 24: H1 2019 change in organic EBIT
H1 2019 change in organic EBIT +2.3% +€1m 93 91 90 +3 (2) 89 (5) +6 H1 2018 Scope H1 2018 Major Additional H1 2019 before Currency H1 2019 Operations Operations currency impacts impacts Investments in Major Operations, of which around €5 million expenses dedicated to strategic initiatives Improvemen
Slide 25: Net income
Net income In € million H1 2018 H1 2019 Current operating income 91 93 IFRS 16 impact on EBIT: €0.9m (before acquisition-related expenses) Acquisition-related expenses (6) (11) High level of M&A activities Current operating income 85 82 Optimization expenses (3) (3) Divestments, write-off & other (0
Slide 26: Cash flow generation
Cash flow generation H1 2019 H1 2018 H1 2019 excl. IFRS 16 In € million EBITDA 130 137 125 Other items (6) (6) (6) Cash flow1 124 131 119 Change in WCR (41) (55) (55) Seasonal deterioration amplified in H1 2019 by a higher level in inventory due to good momentum in hardware Change in lease receivabl
Slide 27: Financial structure
Financial structure 924 931 920 NET FINANCIAL DEBT1 IFRS 16 impact on debt 222 225 235 Net financial debt 709 excluding IFRS 16 653 617 81 to be compared with 702 706 685 TOTAL FUTURE CASH FLOW FROM 653 617 628 RENTAL AND LEASING Rental future cash flows Leasing portfolio 31/07/2018 31/01/2019 31/07
Slide 28: Debt maturity at July 31, 2019
Debt maturity at July 31, 2019 500 450 400 Gross debt: €1,055m1 excluding 350 ODIRNANE2 300 To be repaid 250 thanks to Schuldschein refinancing 200 150 100 50 0 1 2019 2020 2021 2022 2023 2024 2025 2026 USPP USD 30 million USPP USD 90 million Schuldschein 2017 Schuldschein 2019 Bond 2.50% Bond 3.50%
Slide 29: Financial targets
Financial targets Geoffrey GODET
Slide 30: Organic sales growth per quarter
Organic sales growth per quarter (% of organic change) H1 2019: +2.3% +2.9% +1.8% +1.5% +1.2% +0.2% -2.1% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Positive organic growth posted for the fifth consecutive quarter creating a strong comparison basis especially for Q4 2019 30
Slide 31: Outlook
Outlook • Indications for 2019 Top line guidance upgraded to slightly positive growth (vs. almost stable previously) Current EBIT1 guidance refined to a range between €180 and 185 million2 including the €15 million expenses dedicated to the Back to Growth initiatives, i.e. the top of the ran
Slide 32: Appendices
APPENDICES Q
Slide 33: Current operating income
Current operating income H1 2018 H1 2018 H1 2019 In € million published proforma published Sales 528 528 557 Gross margin 400 394 411 % of sales 75.7% 74.6% 73.8% EBITDA 130 126 137 €125m excluding IFRS 16 impact % of sales 24.7% 23.8% 24.6% Current operating income (EBIT) 91 89 93 €92m excluding IF
Slide 34: Consolidated Balance Sheet (1/2)
CONSOLIDATED BALANCE SHEET (1/2) 31/07/2018 31/01/2019 31/07/2019 Assets (in € millions) Goodwill 1,076 1,127 1,140 Intangible fixed assets 186 138 141 Tangible fixed assets 139 149 228 Non-current financial assets 73 64 66 Other non-current receivables 4 3 3 Leasing & financing receivables 702 706
Slide 35: Consolidated Balance Sheet (2/2)
CONSOLIDATED BALANCE SHEET (2/2) 31/07/2018 31/01/2019 31/07/2019 Liabilities (in € millions) Shareholders’ equity 1,218 1,247 1,277 Non-current provisions 28 26 25 Non-current financial debt 816 674 902 Current financial debt 35 190 234 Other non-current debt 13 7 8 Deferred tax liabilities 158 145
Slide 36: Covenants
Covenants Schuldschein 2019, Revolving Credit Facility and the 3.50% bond Schuldschein 2017 Neopost level as at Neopost level as at July 31, 2019 Neopost level as at July 31, 2019 January 31, 2019 (excluding IFRS 16) (including IFRS 16) Covenants on Maximum drawing: 90% of Intercompany net leasing d
Slide 37: Customer Experience Management
Customer Experience Management CONTEXT CUSTOMER BENEFITS • Customer Communication Management (CCM) • Quadient is an established solution provider in Customer Enable corporates to design, manage and deliver high volume and on-demand Communication management (CCM) and is consistently omni-channel pe
Slide 38: Customer Experience Management
Customer Experience Management OUR OFFER STRATEGIC AMBITIONS • Keep on gaining market share in highly regulated industries (financial services, insurance and healthcare) • Expand our successful vertical market approach to new industries (Telcos, Utilities and Government) • Continue complementing our
Slide 39: Business Process Automation
Business Process Automation CONTEXT CUSTOMER BENEFITS • Smaller companies are far less advanced in digitalizing their • Help SME’s to rationalize and digitalize document delivery process and thus serve as the higher growth opportunity • Transform internal workflows though digitalization and automati
Slide 40: Business Process Automation
Business Process Automation OUR OFFER STRATEGIC AMBITIONS o Output • Become a leader in the Business Process Automation market for management SMEs making it possible for them to quickly implement digitized software business processes • Build on our current solution to develop new accounts payable o
Slide 41: Mail Related Solutions
Mail Related Solutions CONTEXT CUSTOMER BENEFITS • Letter mail remains a very large market despite the decline in • Effectively manage mailing and shipping operations physical mail pushed by digitization encouraged by regulations. • Reduce operational expenses while complying with local regulations
Slide 42: Mail Related Solutions
Mail Related Solutions OUR OFFER STRATEGIC AMBITIONS A wide range of • Maximize value over long term by: Reinvesting in the offering and extend it o hardware Document Keeping differentiated customer servicing Mail metering folding/ inserting Mail Gaining market shares addressing Focusing on
Slide 43: Parcel Locker Solutions
Parcel Locker Solutions CONTEXT CUSTOMER BENEFITS • The parcel lockers are the only mature automated • Offer automated solution to back up home delivery solutions for last mile delivery. • Reduce misdelivery costs and allow delivery consolidation for carriers • Neopost has a proven ability to scale,
Slide 44: Parcel Locker Solutions
Parcel Locker Solutions OUR OFFER STRATEGIC AMBITIONS • Develop our strategic partners and expand geographies (the US as #1 priority) • Expand segments coverage • Develop product offering BUSINESS MODEL • Hardware sales • Rental and leasing • Maintenance • Consumption OUR GO-TO-MARKET 2018 sales in
Slide 45: Investor Relations Team
INVESTOR RELATIONS TEAM [email protected]