Key highlights
- Consolidated sales of €1,029 million in 2020, a contained organic decline of 7.3%1 vs. 2019;
- Strong fourth-quarter sales performance, down 1.0% organically, further improving from the sharp rebound achieved in the third quarter, driven by double-digits growth in Business Process Automation and Parcel Locker Solutions activities;
- Current EBIT2 of €152 million in 2020, or €145 million excluding earn-out reversal3;
- Profitability maintained at a high level thanks to active cost management, with EBITDA margin of 23.9% in 2020;
- Net attributable income of €40 million in 2020;
- Strong free cash flow4 of €167 million in 2020, reinforcing the Group’s robust liquidity position of €914 million5 as at
31 January 2021 ; - Net debt down by €156 million vs. 2019, leading to a low leverage of 0.4x excluding leasing6 as at
31 January 2021 ; - Proposed dividend payment €0.50 per share in respect of financial year 2020;
- Strategic update and financial trajectory to be unveiled today in a Capital Markets Day event (please refer to the press release published today related to the Capital Markets Day).
Thanks to our efforts and agility, we succeeded to mitigate the impact of the crisis while maintaining a sound level of profitability and a healthy balance sheet. With tight cost management measures in place, we achieved an EBITDA margin of close to 24%, down only 80 basis points from the previous year. We also generated strong free cash-flows, leading to a significant reduction of our net debt while preserving a robust liquidity position. As a consequence and in accordance with its dividend policy,
RESILIENT RECURRING REVENUE AND STRONG RECOVERY IN NON-RECURRING REVENUE
Quadient’s strategy aims at developing recurring revenues across all solutions, in particular through SaaS subscription and rental sales. In 2020, the Group’s business model proved resilient, with solid recurring revenue performance in spite of difficult trading and economic conditions, leading to a contained decline in total sales.
Consolidated sales stood at €1,029 million in 2020 (-9.9% compared to 2019). Organic change was 7.3%1. Changes of scope are related to the divestment of
Recurring revenue (71% of total sales) recorded a limited organic decrease of 3.9% in 2020 compared to 2019, mitigating the 14.5% organic decline experienced in hardware and license sales.
In million euros | 2020 | 2019 | Change | Change at constant rates | Organic change1 |
Major Operations | 919 | 994 | -7.5% | -5.8% | -5.9% |
Customer Experience Management | 126 | 140 | -10.3% | -8.5% | -8.5% |
Business Process Automation | 69 | 63 | +8.8% | +10.1% | +9.0% |
Parcel Locker Solutions | 83 | 63 | +33.4% | +36.1% | +36.1% |
Mail-Related Solutions | 641 | 728 | -11.9% | -10.3% | -10.3% |
Additional Operations | 110 | 149 | -26.0% | -25.0% | -17.6% |
Group total | 1,029 | 1,143 | -9.9% | -8.3% | -7.3% |
In million euros | 2020 | 2019 | Change | Change at constant rates | Organic change1 |
Major Operations | 919 | 994 | -7.5% | -5.8% | -5.9% |
501 | 523 | -4.3% | -1.4% | -1.5% | |
Main European countries(a) | 367 | 421 | -12.7% | -12.5% | -12.5% |
International(b) | 51 | 50 | +2.1% | +4.7% | +4.7% |
Additional Operations | 110 | 149 | -26.0% | -25.0% | -17.6% |
Group total | 1,029 | 1,143 | -9.9% | -8.3% | -7.3% |
|
Major Operations supported by a strong upturn in H2 2020 across all solutions, except for a delayed recovery in Customer Experience Management
Revenue from Major Operations stood at €919 million (89% of total sales) in 2020, down 5.9% on an organic basis compared to 2019. The resilience of recurring revenue, down by only 3.0% organically vs. 2019, including strong growth in Parcel Locker Solutions and Business Process Automation activities, helped to mitigate the decline in mail-related hardware equipment sales as well as in new software license sales.
Sales in
Main European countries posted a sharper organic sales decline (-12.5%) in 2020. However, sales that were strongly impacted during the first half of the year due to stringent lockdowns, improved during the second half, especially in
The International segment delivered a solid organic sales growth (+4.7%) in 2020, driven by a strong increase in revenue from Parcel Locker Solutions.
Customer Experience Management
Customer Experience Management sales stood at €126 million in 2020, down 8.5% organically compared to 2019.
License sales were affected by a high comparable base in 2019, especially in the second and fourth quarters. Moreover, in the social-distancing context, go-to-market was more difficult with large accounts, which weighed on new customer acquisitions.
Recurring revenue (74% of Customer Experience Management sales) showed a very good resilience during the year, with notably a high-single digit growth in subscription-related revenue that benefited from continuous strong growth in SaaS7 subscription sales and increased maintenance revenue. This performance was offset by the decline in revenue from professional services, still impacted by social distancing measures and lower new placements.
The performance was contrasted across regions, with revenue growth in
Business Process Automation
Business Process Automation sales stood at €69 million in 2020, up 9.0% organically compared to 2019. This increase reflected the strong growth in SaaS revenue thanks to increased level of SaaS subscriptions recorded in the previous quarters as well as a significant increase in revenue related to volume-base usage of Business Process Automation’s platforms, leading to a growth of c. 20% in subscription-related revenue in 2020.
Customer acquisitions under the SaaS subscription model continued to accelerate throughout the year and across all regions, fueled by marketing campaigns, a strong appeal for automation solutions in the context of the health crisis and resumed global traction from bundled offers with Mail-Related Solutions over the world.
License sales represent an increasingly small portion of Business Process Automation revenue due to the ongoing shift to SaaS-mode solutions, particularly in
Parcel Locker Solutions
Parcel Locker Solutions sales stood at €83 million in 2020, strongly up by 36.1% organically compared to 2019, thanks to very strong growth in both recurring and non-recurring revenue.
Subscription-related revenue posted double digit-growth thanks to a strong increase in revenue associated with maintenance and consumption/usage activity (e.g., resident fees, storage fees) as well as the strength of rental-based revenue, despite a slowdown in new installations in
Hardware sales experiencied a dynamic growth in the second half of the year, particularly in the fourth quarter, fueled by the rollout of c. 80% of the large purchased-model contract with US retail chain Lowe’s, which more than offset the slowdown in multifamily and corportate verticals due to the health crisis.
Mail-Related Solutions
Mail-Related Solutions sales stood at €641 million in 2020, down 10.3% organically compared to 2019. The installed base and subscription-related revenue (74% of Mail-Related Solutions sales) proved their resilience, largely supported by multi-year contracts and consumption revenue that improved throughout the year as usage started to return although at a level that remained below usual.
Placements of new hardware continued to recover in the second half of the year with new customer acquisition and all three segments (small, medium and large accounts) improving even if high-end products were still lagging behind. Furthermore, backlog remained high at the end of 2020.
The decline continued to be less pronounced in
Additional Operations
Revenue from Additional Operations stood at €110 million (11% of total sales) in 2020, down 17.6% organically compared to 2019. This performance mainly reflected a drop in revenue from Graphics and Mail-Related Solutions in the Nordics and
Q4 2020 SALES
Consolidated sales stood at €287 million in the fourth quarter of 2020, slightly down by 1.0% organically compared to the fourth quarter of 2019 (excluding currency and scope effects).
Major Operations sales stood at €253 million in Q4 2020, down 1.2% organically compared to Q4 2019, driven by continued resilience of recurring revenue and a strong rebound in non-recurring revenue.
Customer Experience Management sales stood at €34 million in Q4 2020, down 16.5% organically compared to the Q4 2019, due to a high comparable base in license sales,the impact of social distancing measures on both professional services and new leads generation and delayed customers’ investment decisions. SaaS revenue subscriptions however continued to grow strongly.
Business Process Automation sales stood at €20 million in Q4 2020, up by 12.8% organically compared to Q4 2019, supported by high growth in subscription-related revenue. Volume-based activities kept on recovering although at a slower pace than in Q3 2020 due to the end of the catch-up effect. On the other hand, license sales were impacted by the continuous transition to SaaS model despite resumed traction from bundled offers with Mail-Related Solutions.
Parcel Locker Solutions sales stood at €30 million in Q4 2020, strongly up by 87.8% organically compared to Q4 2019. This reflected a sustained performance of subscription-related revenue and the very dynamic rollout of Lowe’s contract in the US.
Mail-Related Solutions sales stood at €170 million in Q4 2020, down 7.1% organically compared to Q4 2019, confirming the rebound experienced in Q3 2020 after the sharper decline recorded in the first half of the year. Revenue related to supplies (ink cartridges) continued to improve alongside higher consumption, but still remained below usual level.
Additional Operations sales stood at €33 million in Q4 2020, slightly up by 0.9% organically compared to Q4 2019.
REVIEW OF 2020 FULL-YEAR RESULTS
Simplified P&L
In € million | 2020 | 2019 | Change |
Sales | 1,029 | 1,143 | (9.9)% |
Gross profit | 743 | 841 | (11.5)% |
Gross margin | 72.2% | 73.6% | |
EBITDA | 246 | 282 | (12.8)% |
EBITDA margin | 23.9% | 24.7% | |
Current operating income before acquisition-related expenses | 152(a) | 185 | (18.1)% |
Current operating income margin (before acquisition related expenses) | 14.7%(a) | 16.2% | |
Current operating income | 132 | 170 | (22.1)% |
Net attributable income | 40 | 14 | +187.9% |
Earnings per share | 0.92 | 0.15 | n/a |
Diluted earnings per share | 0.92 | 0.15 | n/a |
(a) Including Parcel Pending’s earn-out reversal for an amount of €6.5 million. Excluding this earn-out reversal, the current operating income before acquisition-related expenses amounts to €145 million and the associated margin stands at 14.1%. |
Operating income, enforced by active cost management
2020 | 2019 | |||||
Major Operations | Additional Operations | Group total | Major Operations(a) | Additional Operations(a) | Group total(a) | |
Revenue | 919 | 110 | 1,029 | 994 | 149 | 1,143 |
Current operating income before acquisition-related expenses | 153(b) | (1) | 152(b) | 188 | (3) | 185 |
(a) Major Operations now includes the activities of Parcel Locker Solutions in (b) Including Parcel Pending’s earn-out reversal for an amount of €6.5 million. Excluding this earn-out reversal, the current operating incomes before acquisition-related expenses of Major Operations and of the Group respectively amount to €153 million and €145 million |
Gross margin was 72.2% in 2020 compared to 73.6% in 2019, despite a significant volume effect, due to the built-in flexibility of the cost base resulting from a high proportion of outsourcing in hardware manufacturing andan unfavorable mix effect.
Current operating income before acquisition-related expenses stood at €152 million in 2020 compared to €185 million in 2019, mainly reflecting the revenue decrease and active cost management in both cost of sales and operating expenses. Indeed, continued tight cost optimization measures helped to generate c. €46 million of savings in operating expenses, before impact of bad debt, in 2020, while allowing the Group to maintain ongoing investment efforts to support the implementation of its strategic initiatives. Current operating income before acquisition-related expenses also includes a one-off earn-out reversal of €6.5 million related to Parcel Pending’s acquisition.
Thanks to the initiatives undertaken to protect the profitability, current operating margin before acquisition-related expenses stood at 14.7% of sales in 2020 compared to 16.2% in 2019.
Acquisition-related expenses stood at €20 million in 2020 compared to €15 million in 2019, linked to the high level of M&A activity throughout the year notably including costs associated with the divestment of
Current operating income stood at €132 million in 2020, compared to €170 million in 2019.
Optimization and other operating expenses stood at €36 million in 2020 including increased restructuring expenses related to cost optimization measures and the divestment of the graphics activities in
Operating income stood at €96 million in 2020 compared to €77 million in 2019.
Net attributable income of €40 million
The net cost of debt stood at €33 million in 2020 compared to €39 million in 2019, benefiting from the refinancing operations in 2019 and 2020.
The Group recorded currency gains and other financial items of €1 million in 2020 compared to a €2 million loss related to currency and other financial items in 2019.
As a result, net financial result was a loss of €32 million in 2020 compared to a loss of €41 million in 2019.
Income tax amounted to €24 million in 2020 compared to €22 million in 2019. The corporate tax rate stood at 36% in 2020 compared to 58% in 2019.
Net attributable income amounted to €40 million in 2020 compared to €14 million in 2019. Earnings per share stood at €0.92 in 2020 compared to €0.15 in 2019.
Strong cash flow generation
EBITDA8 stood at €246 million in 2020 compared to €282 million in 2019, reflecting lower current operating income and broadly stable depreciation and amortization. EBITDA margin was 23.9% in 2020 compared to 24.7% in 2019.
The change in working capital generated a net cash inflow of €2 million in 2020 compared to a net cash outflow of €7 million in 2019. This mainly reflected higher level of receivables (due to back ended invoices added to slower collections) more than offset by the payables (due to the postponement of payments of some social taxes and VAT).
The Group recorded a decrease in its lease receivables (-€62 million in 2020 compared to -€25 million in 2019) due to lower placements of new equipment in the context of lockdowns.
The leasing portfolio and other financing services stood at €598 million as at
Interest and taxes paid stood at €37 million in 2020 compared to €85 million in 2019, mainly due to the positive impact from 2019 and 2020 refinancing operations on interest expenses and reduced amount of tax paid resulting from the lower level of activity. As a reminder, interests and taxes paid recorded two non-recurring items in 2019: the bond liability management in
Capital expenditure stood at €90 million in 2020 compared to €109 million in 2019. This reflected lower investments related to maintenance, in line with a decreased level of activity, and reduced investments related to rented equipment, both mail equipment and Parcel Locker Solutions in
In total, the Group recorded cash flow after capital expenditure of €167 million in 2020 compared to €86 million in 2019.
IMPROVED LEVERAGE AND ROBUST LIQUIDITY POSITION
Net debt was reduced by €156 million to €512 million as at
Excluding leasing, the leverage ratio remained low at 0.4x9 as at
Shareholders’ equity stood at €1,240 million as at
The Group has a robust liquidity position of €914 million as at
OUTLOOK
A strategic update as well as Quadient’s financial trajectory will be unveiled today during Quadient’s Capital Markets Day event. A dedicated press release addressing these items will be issued today.
BUSINESS HIGHLIGHTS
On
The transaction was closed on
Quadient Awarded Gold Medal by
On
Quadient’s commitment toward sustainable environmental practices was also confirmed by achieving a “B” score with CDP, for the third year in a row. CDP uses a detailed and independent methodology to assess companies, allocating a score from A to D based on the comprehensiveness of disclosure, awareness and management of environmental risks, and demonstration of best practices associated with environmental leadership. By achieving a “B” rating,
POST-CLOSING EVENTS
Quadient Increases its Commitment to ESG by Joining the United Nations Global Compact13 as a Signatory Member
On
This decision demonstrates Quadient’s commitment to corporate social responsibility and will support further advancement of the company’s strategic initiatives on Environmental, Social and Corporate Governance (ESG).
Quadient Announces the Acquisition of Beanworks, a Leading FinTech in SaaS Accounts Payable Automation Solutions
On
Beanworks was founded in 2012 and is headquartered in
With a comprehensive SaaS AP/AR automation offer,
At the closing of the transaction, which occurred on
Quadient Nearly Doubles
On
Driven by consumer demand for safer and more secure package retrieval and the continued growth of online commerce, Parcel Pending by
On
Quadient Moves Up Three Places in the 2020 Gaïa Research Ranking16
On
Gaïa Research (formerly Gaïa Rating), EthiFinance’s extra-financial rating agency, specializes in ESG analysis and rating of French and European companies. Since 2009, it has set rankings per revenue category to recognize the best players from a selected panel of 230 Euronext Paris-listed small and medium-sized companies. Ratings are used by leading asset management companies in their management and investment decision-making processes.
On
As a reminder, on
Release of Version 1.2 of Cloud-based Platform Quadient Impress
On
To know more about Quadient’s newsflow, the previous press releases are available on our website at the following address: https://invest.quadient.com/en-US/press-releases.
CONFERENCE CALL & WEBCAST
To join the webcast, click on the following link: Webcast.
To join the conference call, please use one of the following phone numbers:
▪
▪
▪
Password:
A replay of the audio webcast will be available for a period of one year.
CALENDAR
·26 May 2021: Q1 2021 sales release (after close of trading on the Euronext Paris regulated market).
***
About Quadient®
For more information about
Contacts
+33 (0)1 45 36 61 39 l.sfaxi@quadient.com financial-communication@quadient.com +33 (0)1 45 36 31 82 c.baude@quadient.com | OPRG Financial +33 (0)1 53 32 61 51 /+33 (0)1 53 32 61 27 isabelle.laurent@oprgfinancial.fr fabrice.baron@oprgfinancial.fr |
Appendices
Change in Q4 2020 sales
In million euros | Q4 2020 | Q4 2019 | Change | Change at constant rates | Organic change1 |
Major Operations | 254 | 269 | -5.6% | -1.1% | -1.2% |
Customer Experience Management | 34 | 42 | -20.0% | -16.5% | -16.5% |
Business Process Automation | 20 | 18 | +11.8% | +15.2% | +12.8% |
Parcel Locker Solutions | 30 | 17 | +79.0% | +87.8% | +87.8% |
Mail-Related Solutions | 170 | 192 | -11.5% | -7.1% | -7.1% |
Additional Operations | 33 | 39 | -14.5% | -13.8% | +0.9% |
Group total | 287 | 308 | -6.7% | -2.7% | -1.0% |
In million euros | Q4 2020 | Q4 2019 | Change | Change at constant rates | Organic change1 |
Major Operations | 254 | 269 | -5.6% | -1.1% | -1.2% |
135 | 141 | -4.5% | +3.1% | +2.8% | |
Main European countries | 105 | 114 | -7.6% | -7.0% | -7.0% |
International | 14 | 14 | +0.8% | +5.0% | +5.0% |
Additional Operations | 33 | 39 | -14.5% | -13.8% | +0.9% |
Group total | 287 | 308 | -6.7% | -2.7% | -1.0% |
FULL-YEAR 2020
Consolidated income statement
In € million | 2020 (period ended on | 2019 (period ended on |
Sales | 1,029 | 1,143 |
Cost of sales | (286) | (302) |
Gross margin | 743 | 841 |
R&D expenses | (55) | (53) |
Sales expenses | (252) | (283) |
Administrative and general expenses | (194) | (215) |
Maintenance and other expenses | (91) | (104) |
Employee profit-sharing and share-based payments | 1 | (1) |
Current operating income before acquisition-related expenses | 152 | 185 |
Acquisition-related expenses | (20) | (15) |
Current operating income | 132 | 170 |
Optimization expenses and other operating income & expenses | (36) | (93) |
Operating income | 96 | 77 |
Financial income/(expense) | (32) | (41) |
Income before taxes | 64 | 36 |
Income taxes | (24) | (22) |
Share of results of associated companies | 1 | 1 |
Net income | 41 | 15 |
Minority interests | 1 | 1 |
Net attributable income | 40 | 14 |
Simplified consolidated balance sheet
Assets In € million | ||
1,026 | 1,045 | |
Intangible fixed assets | 128 | 130 |
Tangible fixed assets | 207 | 235 |
Other non-current financial assets | 65 | 69 |
Leasing receivables | 598 | 698 |
Other non-current receivables | 3 | 4 |
Deferred tax assets | 17 | 9 |
Inventories | 71 | 77 |
Receivables | 231 | 233 |
Other current assets | 100 | 96 |
Cash and cash equivalents | 514 | 498 |
Assets held for sale | 0 | 21 |
TOTAL ASSETS | 2,960 | 3,115 |
Liabilities In € million | ||
Shareholders’ equity | 1,240 | 1,249 |
Long-term provisions | 27 | 29 |
Non-current financial debt | 821 | 1,055 |
Other non-current liabilities | 3 | 1 |
Current financial debt | 205 | 112 |
Deferred tax liabilities | 148 | 135 |
Deferred income | 187 | 198 |
Financial instruments | 1 | 2 |
Other current liabilities | 328 | 327 |
Liabilities held for sales | 0 | 7 |
TOTAL LIABILITIES | 2,960 | 3,115 |
Simplified cash flow statement
In €millions | 2020 (period ended on | 2019 (period ended on |
EBITDA | 246 | 282 |
Other elements | (16) | (20) |
Cash flow before net cost of debt and income tax | 230 | 262 |
Change in the working capital requirement | 2 | (7) |
Net change in leasing receivables | 62 | 25 |
Cash flow from operating activities | 294 | 280 |
Interest and tax paid | (37) | (85) |
Net cash flow from operating activities | 257 | 195 |
Capital expenditure | (90) | (109) |
Net cash flow after investing activities | 167 | 86 |
Impact of changes in scope | (9) | (12) |
Disposals of fixed assets | 0 | 3 |
Others | 1 | 0 |
Net cash flow after acquisitions and disposals | 159 | 77 |
Capital increase | (1) | 1 |
Dividends paid | (12) | (18) |
Change in debt and others | (118) | 191 |
Net cash flow from financing activities | (131) | 174 |
Cumulative translation adjustments on cash | (12) | 0 |
Change in net cash position | 16 | 251 |
1FY 2020 sales are compared to FY 2019 sales, from which is deducted revenue from
Q4 2020 sales are compared to Q4 2019 sales, from which is deducted revenue from
2Current operating income before acquisition-related expenses.
3 Earn-out reversal of €6.5 million related to Parcel Pending acquisition.
4 Cash flow after capital expenditure.
5 €514 million of cash and €400 million of undrawn credit line, the latter maturing in 2024.
6 Including IFRS 16.
7 SaaS = Software as a Service
8 EBITDA = current operating income + provisions for depreciation of tangible and intangible fixed assets.
9 Including IFRS 16.
10 Net debt / shareholders’ equity
11 Learn more at www.ecovadis.com.
12 Learn more at https://www.cdp.net/.
13 To learn more about the
14 Based on ECB’s €/$ exchange reference rate on
15 Source:
16 For more information on Gaïa Research, visit www.gaia-rating.com.
Attachment
- 2020 FY- Quadient VA VDEF - PDF
© OMX, source