2020 First Half Results - resources.quadient.com · Delayed installations in both property management and corporate/university sectors Postponement of new construction project due

28 September 2020

2020 First Half Results

2

Disclaimer

FORWARD-LOOKING STATEMENT

This presentation contains forward-looking statements (made pursuant to the safe harbour provisions of the

Private Securities Litigation Reform Act of 1995), which, by their nature, involve a degree of risk and uncertainty.

Forward-looking statements represent the Company’s judgment regarding future events, and are based on

currently available information. Consequently the Company cannot guarantee their accuracy and their

completeness. Actual results may differ materially from those the Company anticipated due to a number of

uncertainties, many of which the Company is not aware of.

For additional factors that may cause the Company’s actual results to differ materially from expectations and

underlying assumptions, please refer to the reports filed by the Company with the Autorité des Marchés

Financiers (French Financial Markets Authority – “AMF”).

2

3

Agenda

3

3 H1 2020 financial review

1 H1 2020 highlights

2 H1 2020 operational review

6 Appendices

5 Outlook

4 Business update

4

Geoffrey GODET

CEO

H1 2020 Highlights

QuadientX-series

Quadient Customer Journey Explorer

5

Sales: around 10% organic

decline compared to FY 2019

Current EBIT before acquisition-

related expenses: between

€135m and €145m1

Free cash flow2: above €100m1

Relentless execution of our strategy in a challenging environment

5

Multiple product launches and

innovation across all solutions

(Quadient Impress, Parcel Locker

Lite, iX-Series)

Several new multi-year

contracts for PLS in Retail/

Carrier sectors worth €60m+

New partnerships (Infosys,

Kitewheel, Premier)

Strategic acquisition of leading

US FinTech (YayPay) in Account

Receivable automation market

Further reshaping of the

portfolio (ProShip divestment)

Tight cost management leading

to €23m saved in H1 2020

Current EBIT of €61m in

H1 2020 vs €93m in H1 2019

Strong cash flow generation

(€76m vs €21m in H1 2019)

Robust liquidity position of

€933m & low leverage excluding

leasing at 0.8x as of 31 July 2020

Continued resilience of

recurring revenue

(-5.9% organically)

Total sales of €485m

in H1 2020, contained decline

of 12.8% organically

Major Operations, down

10.5% organically

Gradual recovery starting

from May

2020 outlook Revenue trend expected to improve in H2 2020, driven by growth in BPA and PLS

Strong delivery on strategic initiativesActive cost and cash

management to sustain profitability

Good resilience thanks to our recurring model

1 At H1 2020 average exchange rates2 Cash flow after capital expenditure

6

H1 2020 split into 3 different phases, requiring agility and adaptation

FROM FEBRUARY TO MID-MARCH

Sales performance in-line with 2019 business trends

FROM MID-MARCH TO MAY

Lockdowns impacting customer demand and

on-site services and deliveries

FROM JUNE TO END-JULY

Recovery started despite social

distancing measures still in place

6

7

Our recurring business model continued to prove resilient in H1 2020

TOTAL SALES: €485m (% organic change)

-12.8%

-5.9%

→

↗

↘

Sales impactRecurring revenue related to previous quarters expanded

hardware and license installed base

Subscription fees & rental

Maintenance

Leasing: Renewal/extension of lease contract

Increase in SaaS subscription

Social distancing measures impacting the re-occurring revenue linked to consumption

Volume-based contracts

Supplies (ink cartridges)

On-site professional services

-28.3%

NON-RECURRING REVENUE: €123m i.e. 25% of sales

↘

↗

↘

Sales impactSocial distancing measures impacting every service

requiring on-site customer availability

Placement of new hardware equipment

Lead generation activities

Digitalization is at the heart of customer needs

Increased demand for contactless delivery solutions

Progressive change in customer demands: from on premise license to SaaS

One-off decrease on premise license

February March April May June July August

20192020


20192020

↗

7

In valueIn value

RECURRING REVENUE: €362m i.e. 75% of sales

8

Geoffrey GODET

CEO

H1 2020 Operational Review

9

H1 2020

+3

(4)557

H1 2019

(50)

(20)

Additional Operations

0(3)

Mail Related Solutions

Scope effect*

Customer Experience Management

485

Business Process Automation

Parcel Locker Solutions

Currencyeffect

+3

-12.9%

Major Operations(10.5)%

H1 2020: Quadient’s growth engines combined delivers stable performance driven by Parcel Locker Solutions’ growth

* Scope effect: divestment of ProShip (-€4.3m)

(13.9)%

+1.1%(5.5)% +9.4%

(28.9)% +0.6%

(0.8)%

Organic change (12.8)%

H1 2020 sales bridge (in €m, % of organic change vs H1 2019, unaudited sales figures)

Reported growth

10


20192020

CXM – Revenue (monthly)

GOOD RESILIENCE OF RECURRING REVENUE

Continuous significant growth in SaaS subscription revenue

Increase in maintenance revenue

Offset by the decrease in professional services

LICENSE SALES IMPACTED BY

Tough comparable base in Q2 2019

22 new customer gains, including gains in new verticals even with

more difficult go to market with large accounts in social distancing

context, impacting new customer acquisitions

Ongoing shift to SaaS, answering customers’ demand

CONTRASTING PERFORMANCE ACROSS REGIONS

Strong double-digit growth in North America reflecting good

business momentum and a favorable comparable base in H1 2019

Decrease in Main European countries due to more severe social

distancing measures and an unfavorable comparable base in

professional services in H1 2019

Revenue from International down due to high comparable base

in H1 2019

Customer Experience ManagementH1 2020 performance - Major Operations

In €m Q1 2020 Q2 2020 H1 2020

Total revenue 30 31 61

Recurring revenue 23 24 47

As % of total revenue 75% 78% 77%

License sales 7 7 14

In % Q1 2020 Q2 2020 H1 2020

Organic change +1.0% (11.0)% (5.5)%

Recurring revenue (2.0)% (3.0%) (2.5)%

License sales +11.4% (31.1)% (14.4)%

In value

11


20192020

BPA – Revenue (monthly)

DOUBLE DIGIT GROWTH OF RECURRING REVENUE

Strong growth in SaaS revenue due to increased customer

base in prior quarters

Acceleration in new SaaS customer activations due to

marketing campaigns in the US and strong appeal for

automated solutions in the context of lockdown

Partially offset by the decrease in revenue related to

volume-based usage, particularly in the property

management sector in France

DECLINE IN LICENSE SALES

Lower traction from bundled offers with Mail Related

Solutions with social distancing measures making more

difficult new hardware placements

Confirmation of the shift from on premise licenses to SaaS

subscription model, especially in North America and France

Business Process AutomationH1 2020 performance - Major Operations

In €m Q1 2020 Q2 2020 H1 2020




License sales 1 2 3

In % Q1 2020 Q2 2020 H1 2020

Organic change +4.9% (2.5)% +1.1%

Recurring revenue +16.0% +10.6% +13.2%

License sales (36.7)% (50.5)% (43.9)%

In value

12


20192020

PLS - Revenue (monthly)

STRONG GROWTH OF RECURRING REVENUE

Double digit growth in rental-based revenue in Japan thanks to

previous quarters installations despite some slowdown in new

installations in Q2 2020

Strong increase in subscription (property management)

Strong increase in maintenance, and consumption/usage activity

(resident and storage fees)

HARDWARE SALES IMPACTED BY SOCIAL DISTANCING MEASURES

Delayed installations in both property management and

corporate/university sectors

Postponement of new construction project due to economic

conditions impacting booking dynamics

Tough comparable base in Q2 2019

Parcel Locker SolutionsH1 2020 performance - Major Operations

In value

In €m Q1 2020 Q2 2020 H1 2020




Hardware sales 5 7 12

In % Q1 2020 Q2 2020 H1 2020

Organic change +27.2% (1.9)% +9.4%

Recurring revenue +44.5% +27.6% +35.2%

Hardware sales +1.1% (27.5)% (18.3)%

13


20192020

MRS - Revenue (monthly)

RESILIENCE OF RECURRING REVENUE

Most recurring revenue protected by multi-year contracts

Recurring revenue resilience supported by prior year success in new

hardware placements in North America

Consumption-related revenue (supplies) impacted by lower usage

but recovering in June and July as usage returned

DIFFICULT CONDITIONS FOR NEW HARDWARE PLACEMENTS,

ESPECIALLY FOR LARGE DEALS (E.G. PRODUCTION MAIL)

Negative impact on hardware sales, despite increase in telesales

North America less impacted by social distancing measures than

most European markets

Progressive recovery in new hardware sales in June and July from

lows of April

Mail-Related SolutionsH1 2020 performance - Major Operations

In €m Q1 2020 Q2 2020 H1 2020





In % Q1 2020 Q2 2020 H1 2020

Organic change (13.9)% (13.9)% (13.9)%

Recurring revenue (8.2)% (9.3)% (8.7)%

Hardware sales (29.9)% (25.5)% (27.6)%

In value

14

Christelle VILLADARY

CFO

H1 2020 Financial review

15

Major Operations

H1 2020 results - summary

North America

Main European countries

€239m(6.0)%

€437m(10.5)%

€173m(17.6)%

(in €m, % of organic change vs 2019, unaudited figures)

Additional Operations

€485m(12.8)%

€48m(28.9)%

Total

€61m(5.5)%


€31m+1.1%


€313m(13.9)%


€32m+9.4%


International1

€25m+4.8%

(1) The International segment includes the activities of Parcel Lockers Solutions in Japan and of Customer Experience Management outside of North America and the Main European countries. The breakdown of H1 2019 revenue by segment and activity has been restated accordingly.(2) Current operation result before acquisition-related expenses

€65mvs €96m

€61mvs €93m

€(4)vs €(3)m

Current EBIT2

vs last year

SalesOrganic change

Total Group

16

Major OperationsH1 2020 performance

Sales: €437m (-10.5% vs H1 2019)

Resilience of recurring revenue

Moderate organic decrease in North America (-6.0%)

• Later and lighter social distancing measures impacting more Q2 than Q1 2020

• Strong double-digit growth in Customer Experience Management

Sharper organic decline in main European countries (-17.6%) due to tougher social distancing

measures, except for Business Process Automation growth

Increase in International (+4.8%)

• Strong growth in Parcel Locker Solutions’ revenue in Japan

• High comparable base in Q2 2019 for Customer Experience Management

EBIT1 (€65m vs €96m in H1 2019)

Decrease in EBIT mainly reflecting lower revenue from Mail-Related Solutions

Measures taken to limit the impact of the decrease in revenue on the margin

Continued investments in Parcel Locker Solutions, Business Process Automation & Innovation

to support product development and customer requirements

Sales by geography (year-to-date)

55%40%

North America

Main European Countries

6%International

(17.6)%

(6.0)%

+4.8%

1 Current operation result before acquisition related expenses

In €m Q1 2020 Q2 2020 H1 2020





In % Q1 2020 Q2 2020 H1 2020

Organic change (8.9)% (12.0)% (10.5)%

Recurring revenue (3.7)% (5.3)% (4.5)%

Hardware sales (23.5)% (27.6)% (25.8)%

17

Additional OperationsH1 2020 performances

Sales: €48m (-28.9% vs H1 2019)

Lower proportion of recurring revenue compared to Major Operations

Stronger impact from social distancing measures on Mail-Related Solutions activities in

the Nordics and Australia than in Major Operations

Drop in revenue related to the export business (OEM contracts) due to an unfavorable

comparable base in H1 2019

Sharp decline in Graphic Business

Sales of four automated packing systems (CVP) in H1 2020, vs six units sold in H1 2019

EBIT1 (€(4)m vs €(3)m in H1 2019)

Improvement achieved thanks to continuous and previous effort on reducing loss

making activities offset by impact from sharp decline in sales

Loss maintained at limited level

In €m Q1 2020 Q2 2020 H1 2020


Organic change (25.1)% (32.5)% (28.9)%

(1) Current operation result before acquisition related expenses

Grow, improve or exit

18

Focus on cost management

(1) H1 2020 data

Supply chain

Flexible cost base due to the large share of outsourcing of HW manufacturing

c.90% of mailroom equipment volume

100% of automated parcel lockers

Manufacturing & distribution

Temporary closure of all production facilities during lockdown period

Reopening of all sites at 100% of capacity post-lockdown

Minimum level of service from logistics centers during lockdown period

Return to a standard level of activity post-lockdown

Software

Almost 100% of variable costs

COST OF SALES (c.26.6% of total sales1)

OPERATING EXPENSES(c.61.0% of total sales1)

Employee costs

Partial unemployment / time-reduction

c.30% of employees worldwide over the March-July period – almost over since

Overtime reduction / use of holidays

Full-time & temporary hiring freeze

Stop external contractors

Reduction of CEO & top management annual compensation

Additional measure on bonus reduction across the Group

Other operating costs

Tight management of other operating costs, particularly marketing & travel

Smart working program: streamlining real estate footprint and promoting remote workforce

R&D

Slightly higher expenses in R&D & innovation to accelerate new product rollouts for future sustainable growth thanks to reallocation between solutions

Bad Debt

Increase in bad debt of €4 million due to aging deterioration but no increase of default/bankruptcies

Stable gross margin in H1 2020 vs H1 2019 (73.4% vs 73.8%) thanks to a built-in flexibility of cost base and favorable mix effect

Ability to offset part of the revenue decline through active cost cost managementIn H1 2020, €23 m cost savings achieved before impact of bad debt

19

Active cost management limited the impact of sales decline on EBIT in H1 2020

H1 2020 Current EBIT bridge(in €m, % of organic change vs H1 2019, unaudited sales figures)

93

61

+2

H1 2019 Impact from change in revenue at constant

gross margin

Scope effect

+23

(2)

(52)

Impact from change in

gross margin

Change in Bad debt

Change in OPEX

(4) +1

Currency effect H1 2020

(1) Current operation result before acquisition related expenses

20

Net attributable income of €21 million with below current operating income1 expenses decreasing by €6m versus last year (lower tax and interests)

Average rates €/$ H1 2020 = 1.11 and H1 20219 = 1.13 ; €/£ H1 2020 = 0.88 and H1 2019 = 0.88 1 Operating income before acquisition-related expenses2 As per IFRS treatments, the calculation takes into account the dividends paid to ODIRNANE’s holders 3 The average compounded number of shares is 34,115,109. As at 31 July 2020, the potentially dilutive instruments described in the note 14-3-1 of the URD 2019 have a relative effect and had this been excluded from the calculation of the diluted earnings per share.

Expenses related to the shutdown of Temando and increased restructuring expenses associated with cost optimization measures

In 2020, including costs linked to YayPay transaction (non recourse loans to the founders) and ProShip divestment (bonus contingent to the closing of the transaction)

Benefits from tax loss carry-back measures in the US to support corporates in COVID-19 context

Benefits from 2019/2020 refinancing operations

In € millionH1 2019 H1 2020

Current operating income (before acquisition-related expenses)

93 61

Acquisition-related expenses (11) (11)

Current operating income 82 50

Optimization expenses and other operating income & expenses (3) (8)

Operating income 79 42

Cost of debt (17) (16)

Currency gains & losses and other (2) (1)

Net financial income/(expense) (19) (17)

Profit before tax 60 25

Taxes (14) (3)

Income from associated companies 1 (0)

Minority interest 0 (1)

Net attributable income 47 21

Net margin as a % of sales 8.5% 4.5%

EPS (in €) 1.242 0.502,3

Fully diluted EPS (in €) 1.18 0.503

21

Strong cash flow generation and EBITDA margin at 21.5% in H1 2020

In € million H1 2019 H1 2020

EBITDA 137 104

EBITDA margin (%) 24.6% 21.5%

Other items (6) (2)

Cash flow1 131 102

Change in WCR (55) (25)

Change in lease receivables 31 54

Interest and income tax paid (37) (16)

Cash flow from operations 70 115

Capital expenditure (49) (39)

Cash flow after capex 21 76

Acquisitions net of divestments (12) (9)

Autres - 1

Cash flow after capex & acquisitions 9 68

Average rates €/$ H1 2020 = 1.11 and H1 20219 = 1.13 ; €/£ H1 2020 = 0.88 and H1 2019 = 0.88 1 Before net cost of debt and tax

Cash restructuring costs partly offset by adjustments of non-cash IFRS items impacting the P&L

- Lower activity - Payment of some social and VAT charges postponed to H2 2020 in several countries

Decrease in hardware placements

- Decrease in interest paid thanks to 2019/2020 financing- Reduced amount of tax paid

- Lower capex related to maintenance- Lower capex related to Parcel Locker Solutions installation in Japan compared to

high base in 2019 and decrease in rented mail equipment

- In H1 2019: payment of taxes on Satori capital gain- In H1 2020: acquisition of YayPay partially offset by proceeds from ProShip

divestment

22

Rented equipment

• Investment with strong visibility on future returns

(rental cash flows)

• Decrease in rented equipment linked to current

conditions

Development capex maintained at €16m, at the

same level compared to H1 2019

Decrease in maintenance capex

CAPEX mix reflecting current trading with a strategic choice to maintain R&D investment and accelerate launch of new products

CAPEX mix

14%

32%

18%

50% 38%12%

S1 2019

7%

28%

45%

2019

41%

15%

S1 2020

49

109

39

Development CAPEX

Maintenance CAPEX (acquisition of software and IT implementation costs, acquisition of machinery andequipment and other investments)

Assets right of use IFRS 16

Rented equipment

23

NET FINANCIAL DEBT1

Financial structure: decrease in net debt and improved leverage vs 31 January 2020

Closing rates €/$ H1 2020 = 1.18, H1 2019 = 1.12 ; €/£ H1 2020 = 0.90, H1 2019 = 0.92 1 Excluding ODIRNANE of €265 million, maturing 2022 - classified in equity under IFRS

698587 613

516

235

81

222

70

836

586

933

668

IFRS 16 impact on debt

Net financial debt excluding IFRS 16

Rental future cash flows

Leasing portfolio

to be compared with

31/01/2020

TOTAL FUTURE CASH FLOW FROM RENTAL AND LEASING

0.9x0.5x excl. IFRS 16

Net debt excl. leasing / EBITDA excl. leasing


Net debt / EBITDA

IFRS 16 impact

31/07/2020



IFRS 16 impact

€82 million decrease in net debt in H1 2020 vs HY 2019

Low leverage excluding leasing at 0.8x

24

Strong liquidity position as at 31 July 2020 without major refinancing in the short term

Well-spread maturity of leasing portfolio and rental future cash flows

153178

13286

47

47

72

48

30

13 5

17

20212020 2022 2023 2024

7

2025

1

2026

200

250

180

116

64

20 6

Financial debt maturities as at 31 July 2020

25

163

81

187

76

4823

29

42

325

265

2026202320222020 2021 2024 2025

192

373

USPP

ODIRNANE

Bond 2.25%

Bond 2.50% Schuldschein (2017, 2019, 2020)

265

123

Strong liquidity position

As at 31 July 2020:

€533m of cash & €400m of undrawn credit facility (maturing 2024)

€613m of a well-spread leasing portfolio (over 7 years)

€222m of rental future cash flows (over 7 years)

2020 active debt management

February 2020: Buyback of additional €15m on 2021 2.5%-bond

February 2020: success of the Schuldschein extension (c.€42 million)

with a new 4 and 5 year-long maturity

September 2020: early repayment of USD 85m originally maturing in

2021 (USD 35m) and in 2022 (USD 50m) in 2022 - total down payment

of USD 115m (including USD 30m maturing in 2020)

Net cost of early repayment about €1.8m in 2020 but with a slightly

positive impact over the remaining period of the loan

Simplification of financial covenants with leverage ratio now only

calculated excluding leasing activities

Rental future cash flow Leasing portfolio

Repaid in September 2020

25

Business Update

Geoffrey GODET

CEO

26

Continue to reshape the portfolio in COVID context with discipline

26

Exiting the non-strategic operations

Satori Software – Divested in January 2019

Human Inference (loss making) – Divested in

February 2019

Temando (loss making) – Shutdown completed in

Q1 2020

ProShip (loss making) – Divested in February 2020

Parcel Pending (Parcel Locker Solutions) – January 2019

YayPay (Business Process Automation) – July 2020

Around USD 120 million invested in targeted acquisitions More than USD 90 million divestments completed

Targeted M&A strategy

Net amount of financial investments: USD 30 million since January 2019

On going screening of market opportunities in a COVID environment

Targeted acquisitions

27

Recent market analyst research highlight that businesses are currently accelerating their digitization as a result of COVID-19 crisis and the need for strong customer experiences

24%

2%

71%

35%

5%

63%

North America

Western Europe

Unchanged plans with crisis

Crisis a Key driver

No impact / Plans to scale back

COVID-19 Crisis a key driver behind SMBs accelerated digitization1

(% of respondents, conducted over June 2020)

Enablingremoteworking

Automatingor digitizingprocesses

Top Investment focus areas for the next 18 months to ensureorganizational resilience1

36%

31%

70% of SMBs surveyed are accelerating their digitalization rates to address COVID-19 challenges and the most digitally mature small businesses can respond faster to changing market conditions and grow their revenue

IDC, 2020 SMBs Digital Transformation, 09/09/2020

1. IDC 2020 Small Business Digital Transformation study for Cisco, 09/09/2020. The survey covered 2K SMB / 8 countries (US, Canada, UK, France, Germany, Brazil, Chile & Mexico) with a company size between 50-499 employees2. CX Network/InMoment - The Global State of Customer Experience 2020, COVID-19's Impact On Tech Spending This Year, Forbes, 16/03/2020, IDC - 4 reasons why COVID-19 will impact customer experience forever 14/04/2020, Quadient analyses

Helping to build a remote working environment through digital products

is the N°1 Priority for SMBs, closely followed by automation of business

processes

28%

27%

26%

23%

19%

17%

16%

14%

14%

13%

4%

Customer feedback

Data & Analytics

CRM

Digital customer experience

Customer loyalty and retention

Customer insight

Customer journey mapping

Voice of the customer

CX governance

Net Promoter Score

Other

The pandemic is expected to have 4 main impacts on CX2:

1. We will get used to working from home

2. Will accelerate the shift towards omnichannel digital communications

3. Will have deeper and more emotional personalized engagements with our chosen vendor

4. Brands need to be cognizant of the lasting effects these disconnects can have on customer retention and loyalty

Top CX investment priorities for practitioners

27

28

Across the globe, parcel volumes have experienced high double-digit growth as retailersare investing to adapt to the rise of eCommerce. Quadient has seen a huge increase in the volume of parcels passing through our network

Source: Canada Post, USPS, UPS, La Poste, DP-DHL, State Post Bureau, Yamato, Sagawa, Japan Post, Royal Mail filings, Quadient analysis

Canada Post (domestic only) 2019 (year ended Dec.): +13.2%

2020 Apr. – Jun.: +57.6%

2019 USPS (year ended Sep.): +0.3% ; UPS (B2C only, year ended Dec.): +11.3%

2020 Apr. – Jun. USPS: +49.9%; UPS +65.2% La Poste (B2C only) 2019 (year ended Dec.): +5.9%

2020 Jan. – Jun.: +21.5%

Royal Mail 2019 (year ended Mar.): +2%

2020 Apr. – Aug.: +34%2019 (year ended Mar.): Yamato: -0.2%;

Sagawa: +0.6%; Japan Post: +3.4%2020 Apr.-Jun.: Yamato: +17.7%; Sagawa:

+4.9%; Japan Post: +26.4%

State Post Bureau2019 (year ended Dec.): +25.3%

2020 Jan. – Aug.: +25.4%

DP-DHL (domestic only)2019 (year ended Dec.): +5.9%

2020 Apr. – Jun.: +21.4%

100

120

140

160

180

Jun 20Jan 20Nov 19 Dec 19 Feb 20 May 20Mar 20 Apr 20 July 20

Volume of parcel delivered in Quadient Parcel Lockers (100 index)

Japan

Parcel Pending

Parcel volumes at

a record high

• Huge parcel volumes during lock downs and increase in parcel

locker usage

• Parcel lockers are seen as a safe / contact less delivery with

24/7 availability

29

Customer Experience Management Establish new partnerships while continue being recognized as the leader in the market with an innovative product portfolio

Partnership with Kitewheel – June 2020

• A more complete and robust mapping solution with the addition of customer journey orchestration

• Enriched solution for managing the most important steps and interactions within a customer’s journey

Continued leadership acknowledgement by industry analysts

• Highly ranked market leader by Celent, Novarica, IDC and Aspire

• Highest scoring provider by Gartner Peer Reviews

29

Partnership with Infosys –July 2020

• Enhancement of delivery of CXM solutions

• Joint development of solutions in the CXM space

30

Acquired 140+ new customers since launch of Impress

• Market drivers: digitalization, remote working

• Partnership with Premier – September 2020

Business Process Automation Several major announcements for helping small/medium size companies leverage cloud-based technologies to drive digitalization and automation

Successful launch of Quadient Impress – June 2020

• Consolidation and streamlining of the independent Business Process Automation solutions into one modern software platform

• Four integrated suites of applications into one Cloud-based platform (Automate, Portal, Dispatch, Outsourced Hybrid Mail)

Acquisition of YayPay – July 2020

• US FinTech specialized in account receivables automation

30

31

YayPay enables companies to combine real-time accounts receivables, analytics, and payment predictions to optimize cash flow management

YayPay consolidates customer data and payment information from end-to-end with one platform

DIRECT

New SMBs

CROSS-SELL

Existing Quadient 500k customers

UPSELL

Integrated with Quadient Impress

INDIRECT

Partnership programs

Key data points

Credit Assessment

Invoicing Collections Payments Cash App

Founded in 2015, HQ in New York

Named a major player in the IDC MarketScape for SaaS and Cloud-Enabled Account Receivables Applications

Business model: SaaS with recurring revenue (additional revenue on professional services and payments)

60+ passionate employees who are experts in accounts receivables

Target market: Midsize and large SMBs

Current customer footprint: US and UK

Synergies with innovative product portfolio and roadmap

Multichannel invoice presentment via Impress

Synergies with Quadient customers (i.e. more than 30% of YayPay’s customers/prospects are existing Quadient’s customers)

32

Quadient’s full suite of automation process solutions – combining Quadient Impress & YayPay for a comprehensive solution for output management and accounts receivables

50% of all communications

processed on Quadient mail machines are

invoices or invoice-related communications

Accounts receivable automation

Document output automation

Business Process Automation Mail from your desktop or

consolidate and send communications to your centralized mail production center from anywhere

Send communications digitally through a secure, branded document portal

Print, sort, stuff, meter and mail without leaving your desk

PRINTOn-site and remote

DIGITALSecure document portal

PAYMENTSSecure document portal

OUTSOURCERemote fulfillment

AR TRACKINGActionable AR collections

AR PREDICTIONPlan intelligently for the future

Flexible payment options mean your customers have control over payments

One place for all your customer intelligence, in a clear, easy-to-use format

Comprehensive reporting and Smart AR predictive algorithms provide insight into future payor behavior

33

Launch of Parcel Locker Lite – June 2020

• New, cost effective product, battery powered easily scalable to match parcel volume and specific location size requirements

• Simultaneous launch in 4 countries: US/Japan/UK/France

Parcel Locker Solutions Continue to leverage our investment in Parcel Pending to launch new products, in new markets, and acquiring new customers

New contract with Yamato – Q1 2020

• Planned installation of 3,000 lockers lite over 3 years

First major contract in the US retail sector with Lowes –September 2020

• Planned installation of 1,700 lockers

• Top 10 US retailers with 2,200+ stores

Launch of Parcel Pending by Quadient in the UK – July 2020

• Solution for Property Management and Corporate office segments

• First step in international expansion

33

Several new multi-year contracts recently signed in the Retail/Carrier sectors worth more than €60 million

34

Introduction of the iX-Series Mailing System in the US – June 2020

• Designed and built to meet the needs of small, medium and large businesses across a variety of industry verticals

• Additional features and continuous technology updates in line with postal compliance across the globe

Mail Related Solutions Quadient released next generation product and established a new strategic partnership

New original equipment manufacturer (OEM) contract

34

35

Further integration between our four solutions to better leverage our technology, customer-base, infrastructure, people, and market leadership

Recent highlights of completed synergies

Consolidation of MRS and PLS warehousing, assembly and distribution into one supply chain

Align order to cash, financing, order management and all back office processes

Leveraged “CXM” intellectual property/code base to develop BPA Impress platform

Hardware R&D teams shared across PLS and MRS

Assembly and distribution into one supply chain in Hong Kong

Software team for BPA and CXM is 100% mutualized

Centralized and integrated support functions with dedicated local support to offer integrated solutions to our customers

35

Integration of Parcel Pending and Quadient commercial teams in North America

Fully integrated customer offering and go-to-market for Impress and Folder Inserters in France, US and UK –attachment rate of BPA solutions to Folder Inserters sold by the MRS sales channel has doubled in 2019

Brand rationalization: Parcel Pending by Quadient

Utilization of MRS field service technicians to scale Parcel Locker installations and maintenance

Leverage long lasting MRS relationships, contracts and network for new solutions (such as JVs with carriers like Yamato, Geopost, etc.)

MRS and CXM collaboration generated 16% of the CXM revenue 2019

Extend BPA cross-selling to MRS sales channels across all regions

Customers/partners

PARCEL LOCKER SOLUTIONS

CUSTOMER EXPERIENCE MANAGEMENT

MAIL-RELATED SOLUTIONS

BUSINESS PROCESS

AUTOMATION

Customers/partners

Customers/partners

Customers/partners

Software Software

Connectedhardware

Connectedhardware

36

Geoffrey GODETCEO

2020Outlook

37

2020 outlook

..

Around 10% organic decline

compared to FY 2019

SALES

..

Between €135m and €145m1

CURRENT EBIT before acquisition-related

expenses

..

Above €100m1

CASH FLOW after capital expenditure

Thanks to its business portfolio, Quadient is uniquely positioned to continue to benefit from the acceleration of the shift towards digital solutions and e-commerce booming.

After the resilient performance recorded in the first half of 2020, revenue trend is expected to improve in the second half of 2020, driven by the growth in Business Process Automation and Parcel Locker Solutions activities.

Excluding unfavorable development with regards to the COVID-19 health crisis and worsening economic environment in the coming months, Quadient expects for full-year 2020 :

The indications given up to 2022 as part of the Back to Growth plan remain suspended.1 At H1 2020 average exchange rates

38

Appendix

39

P&L

P&L (in € millions) 31/07/2020 31/07/2019

Sales 485 557

Cost of sales (129) (146)

Gross margin 356 411

R&D expenses (25) (25)

Sales expenses (126) (136)

Administrative and general expenses (101) (107)

Maintenance and other expenses (45) (51)

Employee profit-sharing and share-based payments 2 0

Current operating income before acquisition-related expenses 61 93

Acquisition-related expenses (11) (11)

Current operating income 50 82

Gains/(losses) on disposals and others (0) (0)

Structure optimization expenses, net of reversals (8) (3)

Operating income 42 79

Financial income/(expense) (17) (19)

Income before taxes 25 60

Income taxes (3) (14)

Share of results of associated companies 0 1

Net income 22 47

Minority interests (1) 0

Net attributable income 21 47

40

Consolidated balance sheet (1/2)

40

Assets (in € millions)31/07/2019 31/01/2020 31/07/2020

Goodwill 1,140 1,045 1,040

Intangible fixed assets 141 130 129

Tangible fixed assets 228 235 213

Non-current financial assets 66 69 62

Other non-current receivables 3 4 3

Leasing & financing receivables 685 698 613

Deferred tax assets 5 9 18

Inventories 84 77 75

Trade receivables 198 233 187

Other current assets 87 96 105

Cash and cash equivalents 427 498 533

Assets held for sale - 21 -

TOTAL 3,064 3,115 2,978

41

Consolidated balance sheet (2/2)

41

Liabilities (in € millions)31/07/2019 31/01/2020 31/07/2020

Shareholders’ equity 1,277 1,249 1,221

Non-current provisions 25 29 25

Non-current financial debt 902 1,055 822

Current financial debt 234 112 297

Other non-current debt 8 1 1

Deferred tax liabilities 145 135 144

Prepaid income 165 198 168

Other current liabilities 307 327 296

Current financial instruments 1 2 4

Liabilities held for sale - 7 0

TOTAL 3,064 3,115 2,978

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All financial covenants easily met

US Private Placement (including IFRS 16 - repaid in September 2020)

n/a

Quadient level as at Jan. 31, 2020 Quadient level as at July 31, 2020

Covenants

Leverage max 3.25 2.37 2.35

Minimum equity of €525m €1,238m €1,214m

(1) Net debt excluding leasing/EBITDA excluding leasing(2) EBITDA/net cost of debt

No financial covenants for Quadient’s other debts

Schuldschein 2019, Schuldschein 2020 and Revolving Credit Facility(excluding IFRS 16)

Schuldschein 2017(including IFRS 16)

Quadient level as at Jan. 31, 2020 Quadient level as at July 31, 2020 Quadient level as at Jan. 31, 2020 Quadient level as at July 31, 2020

Covenants on leasing operations

Maximum drawing: 90% of outstanding leasing portfolio

Intercompany net leasing debt standing at 73% of outstanding

leasing portfolio


leasing portfolio


leasing portfolio


leasing portfolio

Covenants on non leasing operations

Maximum leverage of 3.0(1)

excluding leasing entities0.5 0.4 0.9 0.8

Minimum equity: €600m €1,244m €1,219m €1,238m €1,214m

Default Rate < 5% ~1.5% ~1.7% ~1.5% ~1.7%

Minimum interest cover(2): 4.0 7.5 6.8 7.5 7.0

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2019 reported quarterly figures according to the new segmentation

SALES

(in €m, unaudited figures) Q1 2019 Q2 2019 H1 2019 Q3 2019 Q4 2019 FY 2019

Major Operations 231 252 483 242 269 994

Customer Experience Management 29 36 65 33 42 140

Business Process Automation 14 16 30 15 18 63

Mail Related Solutions 177 183 360 176 192 728

Parcel Locker Solutions 11 17 28 18 17 63

Additional Operations 35 39 74 36 39 149

TOTAL GROUP 266 291 557 278 308 1143

SALES CURRENT EBIT

(in €m, unaudited figures) Q1 2019 Q2 2019 H1 2019 Q3 2019 Q4 2019 FY 2019 H1 2019 FY 2019

Major Operations 231 252 483 242 269 994 96 188

North America 119 131 250 132 141 523 - -

Main European Countries 102 108 210 97 114 421 - -

International 10 13 23 13 14 50 - -

Additional Operations 35 39 74 36 39 149 (3) (3)

TOTAL GROUP 266 291 557 278 308 1143 93 185

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(25)


Q2 2019

(3)

Scope effect*

(4)


(12)


0


246

0

291

0

Currencyeffect

Q2 2020Additional Operations

-15.4%

Q2 2020 sales bridge

* Scope effect: divestment of ProShip (-€2.6m)

Q2 2020 sales bridge (in €m, % of organic change vs Q2 2019, unaudited sales figures)

Major Operations(12.0)%

(13.9)%

(2.5)%(11.0)%

(1.9)%

(32.5)% (0.1)%

(0.9)%

Organic change (14.6)%

Reported change

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Some recent examples of recognition from industry analysts for Quadient software solutions – validating our strategy, roadmap and execution

© Quadient 46

INVESTOR RELATIONS TEAM

[email protected]

https://invest.quadient.com/

NEXT MEETINGS

• CXM - Education session: October 2020

• Q3 2020 sales: 24 November 2020

Documents

2020 First Half Results - resources.quadient.com · Delayed installations in both property management and corporate/university sectors Postponement of new construction project due