Quadient Sa Unsp/Adr

Good evening and welcome to Quadient Full Year 2022 results presentation. I am Catherine Hubert-Dorel, Quadient's Head of Investor Relations. Today's presentation will be hosted by Geoffrey Godet, Quadient CEO, and Laurent Dupassage, Quadient CFO. The agenda for today is on slide three. We will go through the usual format with one additional section on the simplification of our reporting. As usual, there will be an opportunity to ask questions. You can submit your question in writing through the web or ask questions live by dialing into the conference call. Thank you very much. And with that, over to you, Geoffrey.

Thank you, Catherine. Good evening to everybody. I'm pleased to present you a positive summary of our full year 2022 figures, which are in line with the revised guidance sets in December. Revenue for the full year is €1,081,000,000, up 1.4% organically, in line with our guidance of over 1% of organic growth. Organic revenue growth for the last quarter of the year was 3.1%, making the last quarter of the year the strongest, with all three solutions and geographies reporting organic growth. Also, our subscription model continues to deliver a strong performance with a 3.1% organic increase for the period and now representing up to 69% of our total revenue. At the EBIT level, organic decline was contained to 4.8% again, in line with the guidance set in December. As previously discussed and as expected, a remarkable increase in profitability in the second semester versus the first one, with H2 EBIT margin reaching a very solid 16.1%, excluding the negative AFRIC impact. Overall, our full-year EBIT margin is stable year-on-year at 14.3% when we exclude the new AFRIC accounting standard. We will review in details the reason behind this marked improvement with law. So, an overall positive performance for the year and a very encouraging trend set for 2023. Turning to slide 6 for other important highlights of the year. Net income for the year is €13 million. This includes around 70 million euros on one-off non-cash items that are linked to goodwill impairment and real estate write-off. Most importantly, we will propose to our next shareholder meeting a 60 cents euro per share dividend, representing a 9% increase on last year's level, showing the confidence we have, but also in our capacity to generate future free cash flow. At €70 million, the free cash flow generation for the year is robust, despite the increased leasing financing level for the higher mail equipment orders that we had enjoyed this year. In line with our capital allocation policy, we have continued to deleverage the company. Our leverage ratio excluding leasing is down to 1.8 at the end of the year. And finally, As announced at the H1 reporting, we have completed our divestment program in June 2022. Therefore, with a simplified and focused organization on three core solutions, it was only logical to adapt our new reporting structure to these three solutions and to provide finally their respective current EBIT. Laurent will detail these changes in a moment. Moving to slide 7. But before, I would like to emphasize the work Quadient does in the corporate responsibility field. If we move to slide seven, you'll see how Quadient continues to make progress on its ESG ambitions. I will not present all of our achievements on this slide, but I am very pleased to report that we have already met or even exceeded our stated targets in a number of areas of focus in particular, such as the customer satisfaction level and our remanufacturing targets. For other ambitions, we have increased our targets to continue to align ourselves with the more challenging approaches, such as our new CO2 reduction targets for Scope 1 and Scope 2, as you know. And you remember, we had detailed these changes during our Q1 results. By continuously setting more challenging ambitions, I think we recognize there will be always more that we can do. We are also very humbled by the external recognition awarded to Quadient And they are a testimony, I think, of the importance that Quodian plays on ESG. And we are, I think, amongst others, extremely proud to be part of another year of the Global 100 ranking of the most sustainable companies in the world. I will now hand the microphone to Laurent.

Thank you, Geoffrey. Good afternoon and good morning, everyone. I am Laurent Dupassage, Quodian's Chief Financial Officer. And I have the pleasure to walk you through our new segment, Reporting. Now moving to slide number nine, as mentioned by Geoffrey in the snapshot, the divestment of graphics activities in the Nordics, shipping solutions in France this year, as well as further organization change in H2 2022 have resulted in a refocus by solution and now a simplified reporting by solution, which I will further detail in this animated slide. Here's the reporting format we have had in the past. Now that divestment of all other solutions is over, remaining additional operations, which only consist of MRS and PLS, which are the number 1 and 2 on the slide, are being reintegrated into mail-related solutions and parcel locker segments, respectively. Reporting will include from now on current EBIT margin and current EBIT by solution, with the three adding up to the total group current EBIT before M&A related expenses. Solution profit margins are no longer provided. This reflects a key milestone of the group's evolution and the outcome of a deep transformation since 2019. This change reflects an internal reporting change throughout H2 2022 and is hence replicated as required by IFRS 8.0. Aggregates have been shared and reviewed by editors, including A-bit calculation by Solution. On slide 10, for 2022, we hence report a total group revenue of €1,081,000,000, as mentioned by Geoffrey, and a current EBIT before M&A relative expenses at €150,000,000, which is hence now broken down by solutions, both on revenue side and EBIT side. I will detail EBIT calculation methodology and how it is tied to earlier solution profit in the next slide. Important to note that we still report this year some revenue of the other solutions that have been divested this year, but that will consequently disappear moving forward. Moving to the next slide now. Here are the indicative steps moving from former solution profit to solution current EBIT. We obviously are providing the historical data, solution by solution. of solution current EBIT for years 2020, 2021 and both H1 and H2 2022 that I will share with you in the solution review section. Compared to the solution profit that we used to provide within the major operations segment, we added the G&A allocation by solution as per their relative local and central weight based on solution revenue except for the leasing G&A which is dedicated to our MRS solution. We also included the dilutive remaining additional operations to each solution. And finally, from H2 2022 onwards, we have the impact of IFRIC for cloud computing norm application, resulting in more OPEX for close to 5 million euros in 2022. This calculation again has been extensively shared and reviewed with the details. And I suggest we now move to the full year 2022 solution reporting based on this new segment reporting over to you, Geoffrey.