Quadient (QDT) Q2 2024 earnings summary

Executive summary

• Launched the Elevate to 2030 strategic plan, targeting over €1 billion annual subscription revenue and long-term profitability growth, leveraging a highly predictable recurring business model.

• H1 2024 consolidated sales reached €534 million, up 3.2% reported and 0.8% organically year-over-year, driven by acquisitions and strong North American performance.

• Digital platform received high industry rankings and French government PDP accreditation, positioning for upcoming e-invoicing regulations.

• Maintained strong ESG performance with a double A MSCI rating and set a 2030 CO₂ reduction target of -35% vs. 2018 baseline.

• Announced a €30 million share buyback program to enhance shareholder returns, reflecting confidence in strategy and financial targets.

Financial highlights

• H1 2024 revenue reached €534 million (+3.2% reported, +0.8% organic), with subscription revenue at €384 million, now 72% of total revenue.

• Current EBIT at €61 million (11.5% margin), up 0.3% organically; EBITDA at €111 million (20.8% margin), with Digital EBITDA margin up 6.4 points to 15.7%.

• Net income for H1 was €24 million, down from €36 million last year, impacted by an €8 million IT project write-off and higher debt costs.

• Free cash flow after CapEx improved to €3 million from -€15 million last year, aided by better working capital management.

• Leverage ratio (excluding leasing) reduced to 1.6x, on track for 1.5x target by 2026.

Outlook and guidance

• Full-year 2024 guidance confirmed, expecting organic growth in both revenue and current EBIT.

• Anticipates acceleration in digital subscription revenue and improved EBIT in H2, supported by easing comparison base and strong commercial momentum.

• Long-term ambitions include revenue organic CAGR >1.5% and current EBIT organic CAGR >3% for 2023-2026.

• 2030 targets: >€1bn subscription-related revenue, c.€250m current EBIT, and -35% CO₂ reduction vs. 2018 baseline.

• Confident in achieving 2026 leverage target and long-term subscription revenue goal.