Quadient Sa

Good evening and welcome to Quadient's first quarter 2025 sales presentation. I am Anne-Sophie Jujan, Quadient's head of investor relations, and I am here today with Geoffrey Godet, CEO, and Laurent Dupassage, CFO. We will have a short presentation followed by a Q&A. You can submit your questions in writing through the web or ask questions live by dialing in into the conference call. Thank you very much. And with that, over to you, Geoffrey.

Thank you Anne-Sophie. Good evening everybody. For the first quarter of 2025, we posted €258 million in revenue. This represents a 1.1% reported decline compared to the same period last year. As we highlighted during our last result conference call, this performance was, for the most of it, anticipated. As you'll remember, I set the expectation we would have a low Q1 and a progressive improvement quarter after quarter. In terms of Q1 solution achievement, I want to highlight a few things. We have, once again, posted another strong quarter for our digital and local solutions, with double-digit growth in subscription-related revenue for both solutions. Their strong performance underscored the strengths and the success of our offering against our competition and the fast pace of innovation that we bring today to our customers. In the first quarter, we experienced also a low point in the renewal cycle of mail equipment impacting the performance of our mail business. This is a cyclical trend that we had expected and we anticipate a recovery in our mail activity as we move forward. Additionally, this performance was amplified by the challenging macroeconomic environment, notably in the United States, a factor many companies currently are navigating. Despite the small top line decline in Q1, I am very pleased to say that our current EBIT has been growing organically compared to last year and supported by the EBITDA margin positive development in all three solutions. Let me repeat, in all three solutions. Our teams have demonstrated strong operational discipline by continuing to deliver steady profitability increase in our digital solution over the last two years, and now, more recently, over the last 12 months, for our lockers solutions. So, despite its lower top line, our mail solution also slightly improved its EBITDA margin as it benefited from the Frama integration. Looking ahead, we are confident in a stronger second half of 2025, and as I have just mentioned, we expect to see a progressive recovery in mail. Additionally, our momentum in digital and lockers is set to remain strong, with further improvements in their profitability that is expected. Our order pipeline across all solutions is promising as well, indicating a healthy demand for offerings. So naturally, based on these expectations, we are maintaining our full-year 2025 guidance. Laurent, over to you.

Moving to slide 6, thank you, Geoffrey. I would like to draw your attention to some noticeable movements in our shareholding. The Swiss hedge fund, Teleos, exited the shareholder base early April after having reduced their position to below 5% on March 27th. Conversely, Vesa Equity Investment, our largest shareholder, controlled by Daniel Kretinsky, has further demonstrated its long-term commitment, increasing its ownership to 22.6% as of April 1st, up from 16.5% at the end of January. The legal crossing notification associated with this movement can be found on the AMF website. Let me now give you the details of the Q1 sales performance. As you can see on the left-hand side, Q1 2025 is done organically by 2.5%, explained by a lower May placement in the US, while we saw continued growth in the recurring revenue, which is good news, and now represents 75% of total revenue, up from 72% last year. This reflects the strength of our subscription-based model. On the right-hand side, geographically, North America has always been positive since COVID, but indeed marks a decline this quarter, notably due to the lower point in the renewal cycle of mail equipment that was mentioned by Geoffrey, reinforced by the macroeconomic headwinds. In Europe, we can see the same trends as last year, but some countries are performing well or very well, notably the UK, which demonstrates good performance in all solutions. Moving now to slide 9 to see the bridge between Q1 last year and Q1 this year. This waterfall chart illustrates the key driver behind the revenue evolution from Q1 last year to Q1 this year. So starting with €261 million that we published last year, we see a €4 million positive scope effect from the acquisition of packets concierge. Digital and lockers contributed positively, with digital adding 4 million euros and lockers adding 3 million euros. However, the mail saw a 14 million euro decline, the majority being related to hardware. Currency effect were neutral this quarter, as you can see on the right hand side, with the US dollar stronger at the beginning of the quarter and the software at the end. The net result is a 3 million euro decrease, or a minus 1.1% reported, bringing us to 258 million euros. Over to you, Geoffrey, to give some details on our digital business. Thank you, Laurent.

So let me now comment on some of the key Q1 highlights for a digital automation platform. In the quarter, we announced a strategic partnership to enhance our cloud payment capabilities for businesses globally and overall size. As a result, we're now providing businesses of all size with a unified platform to manage their B2B payment more efficiently, securely, and at a scale into our cloud-based financial automation solution. Looking at the bottom left of the slide, you'll see that our share of SaaS customers continue to grow consistently, now even reaching 84.6% at the end of April. This steady increase reflects the successful transition of our SaaS digital automation platform. And finally, in the middle and the right section of the slide, you can see that Quadient received again multiple leadership recognitions from permanent analyst report this quarter. So I'm not going to detail each one, but I want to specifically highlight our recognition in Gartner and Forrester reports for financial automation. And I want to stress that this is particularly important because for years we've been very well positioned in customer communication management segment, as you know, and have also successfully expanded into what we call the customer experience management or CXM. But when we first launched our account payable or account receivable automation solutions, we were not even in these rankings. Now, we have achieved the same high rankings in AP and AR as we have in our established CCM and CXM offerings. These recognitions truly illustrate quite a strong positioning as a best-of-three leader for the Office of the CFO segment. Now, I'd like to move to the next topic. I am thrilled to share an exciting development in our digital financial automation strategy. Simply put, the acquisition of Syrenzia. Cerenzia is a recognized e-invoicing platform officially registered with the French government, which is a strategic advantage as France prepares for mandatory e-invoicing. Cerenzia solutions are already widely adopted and they process nearly 200 million invoices annually already. There are strong synergies between Quadion customer segments and Ceresia clients as well. The portfolio of customers include the marquee or major industry leaders like Total, Energy, Dalkia, RATP or RATP, but also small and mid-sized business alike. They also have a strong penetration within the established professional networks such as DEXT and SERF France, the accounting and the business advisory network in France. Additionally, I wanted to bring that Cerenzia brings a number of valuable relationships with recognized institutional partners and key certifications for us moving forward. This acquisition significantly enriched our IP, Intellectual Property Portfolio, from a software perspective, allowing us to expand our addressable market with a truly end-to-end invoicing platform embedded in our financial automation solution. This strategic move immediately equips us with a first-class software IP for its PDP platform, what we call in French the Partner Dematerialization Platform, which is registered again by the French state, and is ready to meet the upcoming regulatory requirements. It also includes what we call a Paypal access point, which can give us access to the broader European market for invoicing standards. So naturally, this acquisition strengthens Quadient's finance automation portfolio, providing us with a greater control and more autonomy, which is actually an advantage in this dynamic market environment. It will also help us deliver what we call an enhanced value proposition for our clients, which creates for us significant upsell potential as we have more modules within the suite. And as businesses transition to mandatory invoicing, we can now offer them a complete suite. Our obviously newly acquired PDP capabilities, online payments, e-invoicing, account payable, account receivable, credit analysis, hybrid mail, etc. We've got one of the largest, if not the largest, platform in this domain. And finally, I wanted to conclude that this acquisition for us unlocks significant cross-sell opportunities within our existing customer base, and obviously I'm referring to our male customer base. Our French male segment alone serve over more than 60,000 customers, small, mid-size, and large customers, many of whom will naturally transition from paper to digital invoicing. Cerenzia capabilities perfectly position us to meet this demand, and this extends also to our European client as well. This move further accelerate our mail customer digital transformation, providing additional pathways to adopt the invoicing solution now soon legally mandated across Europe.

Over to you, Laurent. Thank you, Geoffrey. So now in numbers, when looking at the sales for digital, the bar chart on the left shows an acceleration in subscription-rated revenue compared to last year, Q4, and also the full year of last year. It's growing now by 11.1%, and it's allowing the total revenue growth from 63 million in Q1 last year to 67 million this quarter. It's a 7.2% organic increase. This growth is driven by strong performance across all regions, particularly in North America and the U.K., Non-recurring revenue was down year on year, reflecting high comparison basis in Q1 2024 due to some perpetual deals, while professional services are up. Our annual recurring revenue has reached 237 million euros, up 9.6% on a full year basis. This reflects robust cross-selling with male customers and strong new customer acquisition in the enterprise segment. While ARR evolution is affected somehow by volume, the commercial momentum remains very solid. Now over to you, Geoffrey, for a business update on our mail division.

Of course, Laurent. I'm also very proud to announce that our solution offering secure mailing and multi-carrier cloud-based platform has received what we call the FedRAMP authorization. This designation is a major milestone for Quadient as the FedRAMP authorization is the highest level of security review available for the federal government SaaS vendors in the U.S. This designation is significantly expanding the ability for us to serve the U.S. federal government agencies and is reinforcing our position as a trusted provider of secure compliance solution across all sectors. We're also seeing client success, and I'll give you one example illustrated by the expanded partnership we have with the University of Pittsburgh. Having long used our parcel locker system, they are now integrating our comprehensive mail management solution. This is another example that illustrates the cross-sell potential that exists across our diverse business segments and all our customers. Over to you, Laurent.

And as anticipated, mail revenue in Q1 2025 experienced a notable decline, with hardware sales down by 15.8%. This was largely driven by the echo effect of the COVID period. With our contract being five years long, we are seeing fewer equipment up for renewal for this quarter. It's a direct consequence of the lower hardware placement during the pandemic. In the U.S., this trend was further amplified by a strong comparison base from Q1 2024 last year, which had benefited from the decertification that drove up and gave a boost to the sales, obviously, and by the ongoing economic uncertainty, delaying some customer decisions. Despite these headwinds, Quadrant continues to outperform the market. Commercial momentum remains strong, with double-digit growth in cross-selectivity to locker and a 50% increase in digital order intake. Looking ahead, we anticipate a stronger second half, supported by a growing portfolio of contracts, up for renewal, and notably due to the increase of contracts that we signed after COVID. And of course, also thanks to a robust commercial pipeline. Over to you now, Geoffrey, for our locker business.

Turning to slide 15 in our locker business. Our install bays reach approximately 26,100 units at the end of Q1 2025. thanks to an accelerated pace, actually, of installation within our UK open network. Now, I want to show that the performance in the UK has been quite exceptional. As you can see on the slide, our open network there has expanded nearly now fourfold over the last 15 months. If we look at it over the same period, the volume of parcels processed has been multiplied by an impressive 11 times over the same period. Now, this strong momentum is a direct result of the strategic partnership that we have established in this country. And on this topic, I want to highlight that we have now just recently signed and extended our partnership, a significant extension with Evry, through a new deal which contemplates both an enlarged access to our locus network and the consolidation of returns via our unique Dropbox functionality. Now, we didn't stop there. We also signed another strategic partnership with Stasher, offering travelers the nationwide luggage storage service directly through our smart locker network. Both of these collaborations are expected to further drive volume and support continued adoption growth for our parcel locker solutions.

Over to you, Laurent. Thank you, Geoffrey. Lockers continue to be a standout performer with new growth from 20 million to 27 million this year. In fact, it's a 12.2% organic increase and a 4 million euro scope effect that resulted in this 35.4% reported growth with packets concierge performing as expected. The bar chart shows strong growth in both subscription-rated revenue, up 11.4%, and hardware sales, up 12.7%. As mentioned by Geoffrey, this growth is fueled by increased usage in the UK and France and higher monetization in the US. A one-off placement in the international region also contributed to hardware sales. I'm also very pleased to say that we have signed another hardware sales deal in international for around 5 million euros that will be recognized throughout H2 2025. With this new significant contract, a growing install base and large volumes perspectives, notably in the UK as mentioned by Geoffrey, lockers are well positioned for continued expansion. Moving to slide 17, this slide summarizes our Q125 performance across all business lines as described. Despite the overall 2.5% organic decline, the strong performance in digital and lockers, notably on recurring revenues, sets a solid foundation for the rest of the year. Now over to you, Geoffrey, for the outlook. Thank you, Laurent.

So we acknowledge that Q2 is expected to face a probably similar market condition to the previous quarter, and that the ongoing global economic disruption, particularly their impact on the US market, remain difficult to predict at this stage. With this said, I also want to be very clear. We remain very confident in our ability to deliver a stronger performance in the second half of the year. Obviously, our confidence is supported by clear drivers. First, we have had a good start of the year and profitability with an improved EBITDA margin across all our solutions. Moving forward, we anticipate first a recovery in mail, particularly in H2, as the renewal cycle of our mail equipment install base should reverse and presenting naturally greater opportunities for us to place new equipment. We also project sustained strong momentum in digital and in lockers and both also with further improvement in their respective profitability. We also have quite a promising order pipeline across all our solutions. So naturally, in this context, we are maintaining Quadient's full-year 2025 guidance. We continue to expect an acceleration in both organic revenue growth and organic EBIT growth compared to our 2024 growth rate. Thank you. And with that, we're ready to take your question with Laurent and then Sophie.

Thank you. If you wish to register for a question, please dial pound key five on your telephone keypad. Our first question comes from the line of Gabriel Santier at Gilbert Dupont. Your line is open. Please go ahead.

Hello?

Can you hear me?

Yes.

Okay, okay, okay. Just one question on my side. We are seeing a slowdown in ARR organic growth, three points, I think, on Q1. Can you just tell us in which sector and countries specifically the quarter was more complicated in digital, please?

I will take this one, Gabriel, so thanks for asking the question.

I can tell you, Laurent.

Can you hear me now?

It's better.

Yes? Is it better? Yes, that's good. So, good question. So, first thing, I think, is that the ARR... extrapolated growth over four quarters is basically the first quarter times four. So obviously the sensitivity is higher. Q1 is usually lower in terms of booking due to phasing. But the real impact is probably the volume that, as you know, we have volume, non-committed volume, on which basically we take the average of the past six months. And yes, notably in France, we have lower volume, which is not necessarily a bad thing because it means that those volumes that For part of it, our production volumes are in fact digitalizing, which means that overall this is probably taking us 1.4, 1.5 to 2 points of growth on this AR. And I think that's the main topic that explains the gap between the full year last year and this Q1, which I don't think is a strategic part of the AR. And I think it's good news probably on the margin side.

And then if I can compliment Laurent on the regional side, we had probably a double-digit growth in the U.S., The UK, in particular in Europe, was also a very strong country, stronger than the growth rate of the AR. That's probably the two outliers in terms of stronger growth in this first part of the year. Also, the indirect channel represented by the mail sales organization has clearly started the year from a very strong footing because they had a growth rate of their booking of more than 50%. So the contribution, the channel from the male side, the cross-cell, has definitely been stronger than the direct cells in Q1.

Okay, very clear. Thanks a lot. You're welcome.

Thank you. Once again, if you want to register to ask a question, please dial poundkey5 on your telephone keypad. Our next question comes from the line of Maxence Durie at BNP Paribas. Your line is open. Please go ahead.

Yeah, good evening, everyone. Thanks for the presentation. Maybe a first question for me is regarding mail. Could you give us a sense of a breakdown between the COVID echo effect

uh that led to less equipment renewal and the end of the certification in the us that's a good uh it's a good question could give you know a broad breakdown um it's a good question so for q1 definitely probably the vast majority of of the gap is coming from the coveted effect the really the opportunities if you put yourself back five years ago minus a few months, obviously, Because we're not waiting for the customer contract to be renewed, right? We're engaging with customers before the renewal time. If you remember, we had those Q1, Q2 that were the deepest drop in contract renewal at the time and placement of hardware. And therefore, you see that five years later on that. So that definitely is the reason why in Q3 and Q4 last year, we've seen already some deep in the placement of hardware. That being said, in Q3 and Q4-24, it was definitely mitigated because then we had the decertification boost. So the densification gave the opportunity, on the other hand, for salespeople to engage with customers to make sure we could obviously upgrade the machine before the densification ends. So that's why they were balancing those effects, which we're not seeing anymore in Q1. But definitely, I think it's the lack of opportunity to create in the pipeline the discussion with the customer. is probably the biggest portion of the impact that we see in Q1. And it's also why we feel confident that we should and we do expect a recovery in Q2, in Q3, in Q4. We see the beginning of Q2, the size of the pipeline naturally increasing as we see more opportunities coming up.

Okay, very clear. Thank you. And a few additional questions regarding the Serentia deal. Could you come back and explain a bit more the synergy as you already had PDP platform in France? So what was lacking in your offer? And could you tell us a bit more regarding the origin of the deal? Did you approach them or there were that were up for sale and maybe for the future, what is the timeline to integrate the solution into your broker?

Good question. Thank you. So we're going to try to be as complete as we can. So if we step back a little bit before I answer specifically the question, in terms of approach on the market, when we look at customer requirements, whether they're industry-driven, like a standard for the invoicing mandate, or particular features that we believe our customer needs, we always have an approach of basically make, buy, or partner. And we decide from, you know, many criteria from time to time, either for tactical reason, bandwidth reason, or opportunities under the value that we see to a partner. In the case of the PDP, we had actually white-labeled and we had made partnership with people that had made the development in that PDP capabilities. And therefore, we then had the full IP of that particular solution. So that was the driver at the time. We felt that the partnership few years back was a better way to spend our time in terms of R&D so that we could focus on other priorities in terms of the development we wanted to do ourselves. We came across the Serenzia opportunity voluntarily because we obviously survey all the vendors and the market. And we were quite impressed by Serenzia on multiple fronts. One of the three players that did work actually at the time on the PPF platform for the government, even though this one was abandoned. But we felt that they had a level of expertise and have demonstrated a know-how in that particular domain that we were always appreciating. So they were obviously on our radar for that reason for quite some time. The opportunity came to evaluate them and therefore we could see that the PDP was an opportunity for us now to switch from a partnership to actually a buy. And that is giving us the opportunity to have a lot more agility. to integrate this technology within our stack. So we felt that the integration versus the partnership with the other modules of the suite can give us more flexibility as we get into, I said, the early phases before the mandate comes. Just to remind you, the first date is going to be September 2026, so we still have quite some time in front of us. We felt that we could obviously provide stronger upsell opportunities and more flexibility to our customers, especially in our suite and platform approach, where obviously a customer can use one part of the platform and buy or upsell, and we could upsell them additional modules later on. So that's really the core drivers. In addition to that, Serendia is bringing to us a paypal access. So aside of just having also the capability to address the French standards for invoice, with the paypal access point being built into the IP of Serendia, we can now have a similar approach and an accelerated view, not just for the French market, but for the rest of the European countries that benefit from the PEPOL standard. And finally, we were also very impressed with the framework called ETL, the capability to handle data, data manipulation, and we believe that should also provide us an advancement in the way we integrate with accounting and ERP systems because we have now more than hundreds different of those connectors built. And we believe that this should allow us to bring productivity, cost reduction, and cost reduction in terms of the new connectors, but also the connectors we need to maintain. So that's a very relevant IP acquisition for us. And then finally, inside of the team is the customer synergy. We obviously have some customers that are using both our solution and theirs. And we believe we can also leverage the customer base for the French market and penetrate further on that. And for the last part, I forget what was the third part of the question. Laurent, if you could help me.

The timeline.

Well, it's regarding the timeline to integrate the solution, but my guess is that it's going to be quite easy if the solution is already up to date and with a lot of connectors.

We're looking for a very fast integration because we also have looked at the architecture and the compatibility with our stack. So, both on the solution level, but also from a pure corporate level, we're looking for a very fast integration over the next few months.

Very clear, thank you. Maybe just another quick one. So, with Cerencia, you have several PDP platform solutions, are you going to keep those different PDP platforms, or is the goal to switch to only one based on the CRM-CR IP?

So it was related to different... The PDP we had connected with was corresponding to different needs, particularly that people access in Europe, but also the different platforms that we have. It is true that now that we have obviously our own PDP, we probably don't have the same need for moving forward from those third parties.

Thank you.

You're welcome.

Thank you. We will now take our next question from the line of Flavien Baudemont at Berstein. Please, sir, go ahead.

Good evening to the three of you and thank you for taking my question. I have still two questions on the Serenity Acquisition. uh may we have more detail uh on the acquisition but in terms of revenue and valuation uh is it fair to estimate that uh the company generated between two to three million of revenue last year and in terms of valuation uh considering that i understand that the bottom line is negative uh can we say that you acquired the company based on the low to meet seagull ev2 sales multiple

So for those questions, Flavien, at this time, because it's a fairly competitive market, we do not intend to share specific information as it relates to the revenue or the valuation of the company. There's probably something we could do more later on as the time passes a little bit. But your ratio in terms of revenue, it's a little less than 40 people in this environment. So I think that can help you get a good guess of what the revenue could be.

Great, thank you.

Thank you. As a final reminder, if you want to ask a question, please dial poundkey5 on your telephone keypad. We are now taking our next question from the line of Jean-François Grandjean at Odo BHF. Please, sir, go ahead.

Yes, good afternoon. Just a question regarding the U.S. situation. You are well exposed to North America with 59% of the global sales. With the current situation, the tariffs, Could you appreciate the risk for your business and the potential impact in terms of the business and the earnings for the coming months?

I can take that one, Jean-François. Hello. Thanks for the question. So as you all know, the tariffs assumption has been evolving up and down and then, you know, it's changed. So it's a moving target in the end. That being said, since there was probably a couple of weeks that it was put on hold for 90 days and we got back to about 10% tariff impact, clearly for us it's at this stage still a relatively limited impact and we are talking about a couple of million euro and we obviously took the decision very quickly to increase our prices on the north american hardware and u.s hardware mostly dockers and mail to offset completely that impact so for us at this stage It's a contained and I would say offset by price increase. We might have more good news because basically UK for us is one of the only facility we have because we outsource the rest. But we produce the high end for the uncertainty UK that. negotiated a free trade, so it's helping also in that front. So we don't know how things will evolve, but I think we are pretty much covered, and we did anticipate with more stock as well at the end of the year, so it gave us a little bit of visibility to the end of the year.

If I can add a different perspective, historically, Jean-François Junot, during the years where we had high inflation too we have demonstrated our capability to increase the price so we do have the capability in our relationship with our within our contracts and with our customers to be able to to deliver in what laurent mentioned about the price increase okay thank you very much

Thank you. I hand the conference back to the speakers for written questions sent through the webcast. Thank you.

Thank you. So we have no further questions on the line, so we can start by answering the questions that have been asked in writing. So starting with the questions on Serendia acquisition. Will Serendia be included in your higher AP solution or will it remain an independent solution?

So the goal is clearly to have that part of the platform that we have. Our approach to the market is that we do believe that for most companies, with a few exceptions when they're very large, that companies, in particular CFO, because that's the one we're really focusing on, do not intend to have independent solutions from independent vendors that they have to integrate, connect, and have multiple training. We believe that the simplicity of having one platform that could respond to most of their requirement and their need is what the customers are asking for today. And that's why we see those acceleration in terms of the bookings and the various aspects. So naturally, we do part to offer the PDP as part of the platform. That being said, on the PDP itself, Because of the unique need in the French market, in particular for upcoming, there are other vendors that may not have a PDP. So we do feel also that we could develop the business and allow other people to use our PDP technology. And therefore, we will resell the access to that PDP independently. But the ballpark and the majority of what we expect is obviously on our platform. This would be a side benefit for us.

Just one comment as a CFO. For sure, being able to be equipped by quiescent invoicing here acquired from Cerenzia can be a first step and we all know what is management of invoices incoming or outgoing. We need also to integrate the processes of the cash collection and the process of the payment. And that's what we will offer on top of that with APR and the integration that Geoffrey mentioned that will be swift.

Okay, so next question also on Serendia acquisition. Will you continue to do M&A this year following the acquisition of Serendia? What kind of targets will be interesting for Quadient's growth?

It's a good question. As you know, today we are one of the largest platforms in our environment. There's nothing hidden about this, but we were obviously larger even than the Esker platform in terms of revenue and size and numbers of customers. And we have one of the largest in terms of module and capabilities that are being integrated today. So we definitely ourselves more as a consolidator. That being said, in all the targets that we have shared with our community, with the investors, the 2030 target, the 2026 target, we do not need any acquisition to achieve those numbers. So our approach, and also I should add that we have also a large team of developers that is based, that is super efficient. and at the edge of everything that we do today in terms of technology, integrating AI capabilities. So we feel that we have the organic capability to build the capabilities that we need. That being said, we remain opportunist. Like we've been in the past, we have integrated in the platform a few other capabilities, such as the digital form capability a year ago. There was an acquisition that was made out of Canada. So when we see some opportunities and we think that they are valuable for us and we could have a good return on them, obviously, we do not hesitate.

So now we can move to lockers. First question on lockers. What is the utilization rate of lockers in the UK in the first quarter of the year?

So we do not share, unfortunately, the utilization by base for various reasons. What we could say is that the increase on the different flows are significant in Q1 even over Q4. So we've seen now probably for six quarters in a row, almost 100% increase quarter over quarter. So we see really an exponential adoption, which is the combination of the numbers of players we integrate and they were not integrated all at the same time. So as the quarter passes, we integrate new partners. And for each partner or the carriers in that particular case, we do not enable all their capabilities in the same quarter, same months. And if I summarize, even though there are probably 10 different point of integration, two of the main one could be a delivery flow or it could be the capability to manage the returns. So those capabilities are being enabled over time. And on top of that, we obviously have an install base that increase, and we've been accelerating the numbers of installation. And in addition, there is obviously the patterns and the usage of the consumers that take the habit to use the locker. And you could see definitely that as, you know, there's a curve of adoption and that makes all the reason why quarter over quarter we still have today an increase in usage at a significant quarter over quarter. That being said, our locker are still not full, naturally in the UK, even though some location already full, but not the entire network. And we're looking at obviously managing the profitability of each location. So when we have a locker that have reached full profitability or usage, then we look sometime at either finding another location close by or increasing the numbers of boxes or column in that particular location. And that's the progress that we're enjoying today from the UK utilization.

How many lockers represent the 5 million euro deal in the international segment?

So we don't disclose for each deal that we do a number of lockers because depending on the configuration of the size of what comes into it, it would vary. So it wouldn't mean that an ASP lower or higher would be better or worse. So in a nutshell, it's a couple of hundred that we are talking about, but we don't disclose specific number on that.

And we have one more question on lockers. Could you elaborate on the every contract? Does it make a difference to the profitability of the locker base?

Let me take it. Okay, I can take it. So every, as you know, is one of the carriers that is extensively using our network in the UK. Obviously, as any open network, the more volume and the more usage we get, the more profitability we get, because basically you have, apart from that, you have almost only fixed cost. So that's the beauty of the model is how do we maximize the volume in every network. who is already a good partner, will have the opportunity to become an even better partner in the coming time and will generate more volume than it generated for the given open network that we have. So yes, it's good news for both clearly revenue, but especially for the bottom line.

Thank you, Laurent. So now let's move to the questions on male. Could you detail the performance in Europe? What was the performance for male in Europe, which has not been suffering from the U.S.-based effect? Is the decline due to the from attrition?

So in Europe, the performance in mail is quite consistent with what it has in the past. So there is no significant drop. As I mentioned in the first slide, the revenue by geography at the group level, you saw the NORAM segment was declining, which used to be growing in the past, and that's purely the impact of mail. In Europe, the performance has been relatively similar to the past quarters. There is nothing specific to be mentioned, apart from the fact that Geoffrey mentioned the profitability for the group and by solution have been all evolving positively. And that, of course, one of the reasons is the integration of Frama. It is now delivering the benefits of the restructuring that has happened last year.

So next question, still on mail. So from a general perspective, the decrease in revenue is mainly from non-recurring revenues. Are those non-recurring revenues less profitable than subscriptions? Does this effect explain the good performance of EBIT in the Q1, while overall the revenue decreased?

There is a dilutive effect of hardware. That's true. So that's part of the answer. And the other part is the pharma integration.

So thank you, Laurent. So last question on mail. If mail customers have not renewed their subscription in Q1, does it mean they stopped using their mail equipment and returned it to you?

So I'm just going to take that one as well. Olivier, thanks for the question. I'm trying to get the sense of the question behind. I will answer in two ways. The first way is here in Q1, the drop is not necessarily due to the fact that people have stopped their contract. It's really due to the fact that when we position a hardware or when we change the hardware of a customer, we recognize the hardware. Here, the phasing of the install base made the Q1 relatively low comparatively to the past. In renewal, also due to the COVID effect, because five years ago we had lower placement, so five years down the road after the five-year contract, we have less opportunity to replace this machine and to generate again the revenue. That being said, in a normal situation, regardless of Q1 or any other quarter, if one day a customer decides to stop, he only has the opportunity at the end of the contract. If he wants to do it before, he has penalties. He needs to pay basically the amounts to the end of the contract. And if he stops, he will hand us back the machine, which is good news for us from a supply chain standpoint because we do remanufacturing for most of it.

I think formally we could say that our conciliation rate has not moved. It's really what you described, which is the misopportunity of a new discussion that just didn't happen, which could be delayed by the way, but it doesn't mean that there's an end to the contract.

It's not the reason for the decline in Q1, formally.

Thank you, Laurent and Geoffrey. So we have no further questions at this time, so we can close the call. Thank you very much for attending this presentation and for your questions. Our next call will be on the 24th of September for our half-year 2025 results release. In the meantime, we look forward to meeting some of you in the coming days during our shows. Thank you and have a good evening.