Quadient Sa Unsp/Adr

Good evening and welcome to Quadian's full-year 2025 results presentation. I am Anne-Sophie Jujan, Quadian's Head of Investor Relations. Today's presentation will be hosted by Geoffrey Godet, CEO, and Laurent Dupassage, CFO. The agenda for today's call is on slide 3. As usual, there will be an opportunity to ask questions at the end of the presentation. You can submit your questions 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, Anne-Sophie. Good evening, everyone. So, let me start by setting out the market context for Quadient. Over the past few years, we've been operating in an environment shaped by powerful structural trends. In 2025, these trends did not change in nature, but they accelerated simultaneously, reaching a new level of momentum. So the first one is there is in 2025 a marked step changed in artificial intelligence. Rapid advances in AI are accelerating digitalization across industries and reinforcing the long-term demand for software solutions. This is not a short-term phenomenon. AI is fundamentally reshaping how enterprise, automate, secure, and scale mission-critical workflows well beyond any single use case and regulatory cycle. What customers increasingly require are software platforms that can deliver value quickly, integrate AI natively, including agents, and responsibly into system of records, and reliably operate within complex legal, regulatory, and data security environments. In this context, AI-driven digitalization spans our entire digital portfolio from CCM to AP and AR. And of course, compliance-driven workflows, which enhance both the value of our solutions and the breadth of use cases we can address. The second trend, also contributing to the future acceleration in digitalization, is the upcoming rollout of e-invoicing roles across Europe. with regulatory deadlines now clearly in sight, notably in France in September 2026, and later in other markets, including, newly, the UK. These mandates are important catalysts for the digital adoption. But most importantly, they represent only one dimension of a much broader transformation of transactional and financial workflows. And lastly, in 2025, we also observe an acceleration in the structural decline of the mail market. and this following a long period of resilience. These trends reflect both regulatory developments and changing customer behaviors. More importantly, they highlight the relevance of our long-standing decision to pivot towards digital. Quadient did not start preparing for this transition in 2024 or 2025. The ability to offset the decline in mail with a strong digital offering is at the very core of our strategy and the foundation of our digital division. For both business and financial communications automation, and now e-invoicing, we have long been supporting our customers in the automation of transactional processes that sit at the heart of their own operation. So, based on these three trends, we have updated our long-term financial assumptions. Regarding DGTOL, we have raised our 2030 revenue ambition to around €550 million from above €500 million previously. And of course, we maintain our EBITDA margin ambition, which remains at 30% for 2030. As a result, DGTOL is expected to become Quadion's largest segment by 2030, both in terms of revenue and EBITDA contribution. Regarding MEL, we have lowered our 2030 revenue ambition to around €500 million compared with around €600 million previously. And there is no change to our EBITDA margin ambition for MEL, which remains between 20% and 25% for 2030. The updated MEL long-term financial assumption also led us to record a one-off impairment charge of €124 million against Goodwill. And that's in the mail business. And there's of course no cash impact. Finally, our 2030 ambition for lockers remains unchanged. Moving to the next slide. Having in mind these accelerated trends, just outlined, and thanks to Quadion's strategic foresight, we are now in the best position than we have ever been to be able to capture the opportunities they are creating. First, we already operate from a position of strength with the best-in-class digital automation platform that is consistently recognized by industry analysts. And this is not a recent achievement. It reflects years of disciplined investment and execution. 2025 alone, Quadient was ranked number one globally by industry analyst IDC. And we were also recognized by another industry analyst, QKS, as the most valuable pioneer for AI maturity. These are clear third-party validation of both our technology leadership and our ability to operationalize AI at scale. Second, Quadion benefits from a mature, highly predictable business model. At the end of 2025, our annual recurring revenue, ARR, reached €250 million, a level that few SaaS companies can claim. And 84% of that total revenue is now subscription-based. This provides us with a strong confidence in our future revenue trajectory. This model is built on a scalable SaaS platform, serving a large and diversified customer base, also across regulated industries, with very strong customer stickiness. We now support around 17,000 customers worldwide, with a well-diversified geographic footprint. And most of these customers are in regulated industries. These foundations were built up proactively and purposely for many years. Today, they allow us to shift our focus decisively towards scaling execution. First of all, we're expanding the use of AI-powered capabilities across our customer base. Currently, around 60% of our customers use daily such capabilities, and our aim is to increase these to 100% as soon as possible. Secondly, we are building a pan-European leader in financial automation, driven in particular by the upcoming application of e-invoicing mandates. With the acquisition of Serentia, the final accreditation from the French tax authorities, which we received in mid-December, and already more than 10% market share in France, we are strongly positioned at the start of a long-term digital growth cycle that will unfold progressively across Europe. And lastly, we are, of course, sharpening our competitive position in customer communication also, as highlighted by the recent acquisition of CDP Communication in 2025. This enabled us to add differentiating accessibility and compliance features to our existing range of capabilities, and which consolidated our CCM market share and regulated industries. Moving to slide 7. To support the next chapter of our Quadion growth, I have taken a clear decision to align our leadership team with our operational priorities. As a result of our digital automation platform reaching a scale of €215 million in AR, it had reached such a maturity that I am now placing our digital automation platform at the very heart of our company, under my direct leadership, to further accelerate growth and innovation. As part of this evolution, we have now four senior leaders from our digital automation platform organization that will be part of the executive committee. This reflects our determination to deepen software expertise and accelerate innovation where it matters the most. And this marks the next steps in Quasian's evolution as a global software and AI-driven technology leader. Moving to slide eight. In addition, over the past few years, we have executed a complete legal reorganization, transitioning from an integrated multi-entity, multi-country structure to a very simple business-aligned organization. This legal organization is now in its final stages and provides us with the structural flexibility that we wanted. This opens up multiple options to support our business development, financing initiatives, and broader value creation opportunities. With that said, I will now hand it over to Laurent, who will walk you through our 2025 financial results.

Laurent. Thank you, Geoffrey. Good evening, everyone. Let's move to the next slide. Now for our key financials for 2025. So year 2025 ended with a revenue growth acceleration and EBITDA margin expansion in both digital and local, while mail profitability remained very resilient. Starting with digital, revenue grew strongly at 8% with an acceleration in Q4. Subscription-related revenue continued to expand at a double-digit pace, supporting further EBITDA margin improvement, reaching 18% for the year. In May, 2025 was marked by the low point of the U.S. renewal cycle, which weighed on the hardware revenue throughout the year. And despite those headwinds, mail delivered a very solid EBITDA margin of 27.1%. Finally, lockers recorded another year of strong momentum with 11.4% grand-link revenue growth and a solid increase in subscription-related revenue. The profitability of lockers improved significantly at 5%, confirming the trajectory to exceed the 10% EBITDA margin in 2026. At group level, revenue reached 1,036,000,000. It's down 3.2% organically. It's in line with the guidance we updated in September. The profitability remained resilient with a recurring EBITDA margin of 13% and an EBITDA margin of 22.2%. All solutions EBDA are on track to meet the 2026 EBDA targets, and we will continue to deliver towards the 1.5x target excluding leasing. Let's move now to slide 11. Looking at the bridge of revenue compared to last year, from left to right, you can see the Packets Concierge, Cerenzia, CDP scope effect for €16 million, main contributor being Packets Concierge. Digital with an 8% growth is adding €22 million of revenue, Lockers also contributed positively with more than 11% organic growth or 12 million of additional revenue. Digital and lockers both accelerated in Q4, delivering organic growth of 8.4% and 16.8% respectively in the final quarter of the year. Mail declined by around 9.5%, reflecting both market headwinds and the topography softness in the US renewal cycle. The currency impact were quite significant this year, notably from the USD weakening against Euro, with an adverse impact that you can see of 37 million Euro on the right-hand side. Overall, the group posted an organic revenue decline of 3.2%. Moving now to slide 12. When looking at the breakdown of revenue, we see the continued shift towards subscription-related revenue across the group, moving from 68% to 74% from 2020 to 2025. Despite headwinds on the mail business in 2025, Quotient still has shown a positive growth on the subscription-related revenue. On the right-hand side, digital and lockers penetration within that subscription-related revenue has surged from 23% to 41% over the same period. Moving now to slide 13, here you can see the bridge of current EBIT from last year to this year. We started from 146 million euros last year. Scope is almost neutral with package concierge offsetting this year's impact on current EBIT. Digital delivered a solid contribution of 8 million euros, adding 8 million euros thanks to the strong revenue growth and obviously the continued margin expansion. Lockers also contributed positively, with an additional €6 million, reflecting both the acceleration in subscription revenues and the improvement of profitability overall. These gains were offset by May, which saw, as you can see, a €20 million decline in the EBITDA due to the €70 million drop in revenue, which was clearly offset by strong savings. Depreciation and amortization remained broadly stable, decreasing by €3 million, and the last currency effect had an €8 million negative impact, largely driven again by the Euro-Dollar evolution. Overall, this led to a current EBIT of €135 million for 2025, representing an organic decline of 2.2% compared to last year. Back to you, Geoffrey, on the business review.