Quadient – Resilience of the recurring sales model in first-quarter 2020

Wednesday, May 27th 2020

Quadient – Resilience of the recurring sales model in first-quarter 2020

  • Sales of €239 million in Q1 2020, down by 10.2% as reported vs. Q1 2019, and down 10.9%1 organically;
  • A quarter of two halves, with a strong impact on the level of activity of the containment measures imposed as from mid-March in response to the COVID-19 pandemic;
  • Resilience of recurring revenue (-4.6% organically), demonstrating the robustness of the Group’s business model;
  • Solid combined performance of the three growth engines2 (+7.2%)3, driven by more than 25% sales increase in Parcel Locker Solutions ;
  • Liquidity position of more than €900 million of cash and undrawn credit facility line, without major debt repayment scheduled in the coming 12 months.

Priorities

Given the context of the COVID-19 pandemic, Quadient has set the following priorities:

  • Look after the health and safety of its employees, while maintaining continuity of service for its customers and partners;
  • Mitigate the impact of a lower level of activity on the profitability, through strict cost management measures (€8 million of cost reductions achieved in Q1 2020);
  • Preserve the cash generation and liquidity, with a full review of investment roadmap, prioritizing initiatives supporting future growth.

Outlook

  • Proposal to submit a dividend payment of €0.35 per share in respect of financial year 2019 for approval at the Annual General Meeting of 6 July 2020;
  • Very early signs of improvement in the level of activity in May vs. April 2020, but at a much lower level than in May 2019;
  • The Group is not in position to give 2020 guidance at this stage due to limited visibility in the very difficult context of gradual lockdown lifting in the countries where the Group operates.

Quadient (Euronext Paris: QDT), a leader in business solutions for meaningful customer connections through digital and physical channels, today announces its consolidated sales for the first quarter ended 30 April 2020.

Geoffrey Godet, Chief Executive Officer of Quadient, stated: “While we began the year at a similar pace to last year, the strength of our strategy and financial model have been put to the test by the significant impacts of COVID-19 responses by governments across all of the markets in which we operate, throughout the entirety of the second half of our first financial quarter. As anticipated, our recurring revenues, which in 2019 made up two thirds of our total revenue, continued to show resilience and partially offset the decline in net new sales of mailing related equipment. In addition, despite the challenges imposed by the current environment, Quadient's activity continued to show momentum in its three growth engines, including Customer Experience Management, Business Process Automation and Parcel Locker Solutions, which delivered a combined year-over-year growth above 7% in the first quarter. The value proposition of these solutions has become more pertinent, as customers turn to digital solutions to enable employees to work remotely and contactless parcel delivery.

Faced with this unprecedented situation, Quadient has demonstrated its agility to continue serving customers and protecting employees. Financially, the Group has been able to quickly adjust its cost structure to match the level of business activity. We have observed early, yet encouraging signs during the first few weeks of May. However, we expect the upcoming months to remain challenging. For this reason, we will continue to adapt our operating expenses to best preserve our profitability, while prioritizing investment in our different growth engines. Furthermore, our strong balance sheet and liquidity position give us full confidence in our ability to continue implementing our strategy”.

Full press release available in our Investors website.

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