2019 full year results · our solutions and markets dynamics 8 • letter mail remains a large...

March 2020

2019 FULL YEAR

RESULTS

Limitation of liability

• 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 judgement 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

Forward-looking statement (Safe Harbour)

Agenda

3

3 Execution of the strategy

5 2019 financial review

2 2019 highlights

4 2019 operational review

7 Appendices

1 Markets and trends

6 Information for 2020 and beyond

Markets & Trends

Quadient’s long-term business purpose

Simplify the connection

between people &

what matters.

90% of employees being burdened with boring and repetitive

tasks that could be easily automated

Despite a decline,

300 billionpieces of mail globally

in 2018

Digitalization is the core catalyst to

transform physical communications and

business processes

According to Forrester Research, improving Customer Experience by one point can

drive more than a Billion dollars in revenue*

Customer experience continues to be the battlefield

The World Economic Forum (WEF) forecasts urban last-mile deliveries will grow very strongly in the years to come, fueled by continued growth in eCommerce deliveries, increasing related emissions

Last mile delivery must be solved due to increase in eCommerce

*Forrester: How Customer Experience Drives Business Growth, December 13, 2019

6

Digitalization of processes and communications

Customer experience is the battlefield

Regulations/compliance

Strong e-commerce growth

Shift in demographics forces omnichannel strategy

Support wide-range of consumers; all with different/demanding needs

Must support physical and digital communications

Adapt to evolving customer needs in terms of mail management

Content personalization Simplification of the

interface Multiplication of

interaction types, platforms, channels

Complex customer journey

Security of all information Improvement in

information processing Digitalization requires

significant resources Support multiple and

various technologies/vendors

Regulations constantly change and evolve –companies must keep up

Countries adopting new regulations forcing companies to be digital

14’000 laws/regulations on how information is managed

Optimize of the delivery for the carrier

Ease the delivery, the pickup and drop off

Ensure the safety, privacy and confidentiality for the consumer

Macro trends translate to tangible business challenges for our customers

Our customers rely on our Solutions to address these challenges

PARCEL LOCKER SOLUTIONSAutomated and intelligent secured

lockers

CUSTOMER EXPERIENCE MANAGEMENT

Relevant and personalized interactions

MAIL-RELATED SOLUTIONSEfficient and compliant physical

communications

BUSINESS PROCESS AUTOMATIONAccounts payable, accounts receivable

and document delivery

Hardware and software automated solutions

to back up home delivery and optimize the last

mile delivery process. A smart solution that

helps carriers, retailers and residential segment

to manage the parcel flows to their clients

Delivering products and solutions that create relevant and personalized interactions

7

Mail-Related Solutions (MRS): €790m (-3.0%*)

A wide range of Hardware, Software and

Services to help our 500,000 customers to

manage mailing and shipping operations

(franking machines, folders & inserters…)

Business Process Automation (BPA): €65m (+18.4%*)

Software solutions to automate SMBs

communication, rationalize and

digitalize their document

management (mainly account

receivable and account payable)

Parcel Locker Solutions (PLS): €65m (+30.7%*)

Customer Experience Management (CXM): €140m (+12.5%*)

Software solutions enabling large corporates

to design, manage and deliver omnichannel

high volume and on-demand personalized

communications (statements, invoices…) and

personalize their digital experience via

tailored mobile & web applications

3 growth engines recording double digit growth

Better performance than the market in Mail-Related Solutions

Increase in both hardware/licenses and recurring revenue

68%

32%Hardware and license sales

+2.7%*

Recurringrevenue

+1.1%*

* Organic growth versus 2018

Our solutions and markets dynamics

8

• Letter mail remains a large market despite the

decline in physical mail pushed by digitalization

encouraged by regulations; High barriers to entry

• The US market represents c.50% of the world

• Market size*

€3-4bn including production mail

€2-3bn excluding production mail

Players: Pitney Bowes, Francotyp-Postalia, Bluecrest,

Kern

• Highly regulated industries (financial services,

insurance and healthcare) require compliant

customer communications

• Moving to a SaaS and subscriptions

• Market size*

CCM: €1bn

CXM: ~ €3bn

Players: OpenText, Smart, Syncsort, niche digital

use-case providers

• Smaller companies are far less advanced in

digitalizing their processes

• Market size*

Automate/digitalize the entire payment

management process – €3bn

SMBs cloud-based solutions – ~15% growth

Players: billtrust, bill.com, medius, VersaPay,

Objectif Lune

• The parcel lockers are the only mature

automated solutions for last mile delivery

• Last mile delivery faces double digit growth

• A nascent multi-local business in step with the

booming number of parcels

• Market size*

Over 50m boxes (US/FR/JP/UK/DE)

25m (US) and 9m (JP)

Players: Assa Abloy (LuxerOne), Amazon, InPost*2019 estimates

Our ambition is to be a market leader in the four markets

we serve Mail-Related Solutions (MRS)

Business Process Automation (BPA)

Parcel Locker Solutions (PLS)

Customer Experience Management (CXM)

A portfolio of solutions with highly recurring revenue and strong business model commonalities

9

Business Model

Recurring

• Subscription (SaaS) (installed base)

• Consumption (usage)

• Maintenance (installed based/ maintenance pricing)

• Professional services (time and materials)

Non-recurring

• License sales (units sold / price per unit)

CUSTOMER EXPERIENCEBUSINESS PROCESS AUTOMATION

Business Model

Recurring

• Rental and leasing (installed base)

• Maintenance (installed based/ maintenance pricing)

• Supplies (MRS: consumption/ mail volume)

• Subscription / Consumption (PLS: usage)

Non-recurring

• Hardware sales (units sold / price per unit)

MAIL-RELATED SOLUTIONS PARCEL LOCKER SOLUTIONS

Large accounts

10% of Customer Experience

Management sales are made

with Mail-Related Solutions

customers

Upper range of small and

medium-sized business

70% of Business Process

Automation customers comes

from Mail-Related Solutions

Small and medium-sized

businesses

Large accounts

Residential

Universities in the U.S.

(cross sell)

Corporates (cross sell)

Retailers

Carriers

SMART HARDWARE SOFTWARE

Recurring revenue

c. 70%

Recurring revenue

Between c.30% (US) & 90% (Japan)

Recurring revenue

> 70%

Recurring revenue

c. 70%

CustomersCustomers

One organization leveraging our core assets across all solutions to better serve our customers

Group software and R&D: all software and cloud-based solutions, strong reuse in particular between Business Process Automation and Customer Experience Management

Group and regional supply chain and logistics: specific to Mail-Related Solutions and Parcel Locker Solutions

Back office Group and regional: human resources, finance, marketing, legal, IT/digital, CSR

Sales, services regional: common sales and services distribution mutualization, in particular for Business Process Automation and Mail-Related Solutions sales team, reuse of pre-sale

Customers/partners Type of synergies

PARCEL LOCKER

SOLUTIONS


MAIL-RELATED SOLUTIONS

BUSINESS PROCESS

AUTOMATION

Customers/partners

Customers/partners

Customers/partners

Intensifying business synergies by cross-selling opportunities across customers and solutions

Attachment rate of Business Process Automation solutions to Folder Inserters sold by the Mail-Related Solutions sales channel

has doubled in 2019

Business caseIn 2019, large sports franchise in Germany selected Quadient Mail-Related Solutions and Business Process Automation to automate invoicing processes and omnichannel distribution

Large SMEs in MRS

Move to digital with a bundled offers of OMS / Folder-inserters

+

Business caseIn 2019, University of Pittsburgh and University of Alabama selected Mail-Related and Parcel Lockers solutions for staff and students

Achieved a 60% market share in the higher

education segment of the parcel locker market in the U.S, through cross selling by Mail-Related Solutions sales channel

Higher education and corporate

Often the same buyer for MRS is a buyer/influencer of PLS solutions

+

Business caseIn 2019, the 2nd largest writer of U.S. commercial property and large PSP in the UK selected Quadient Customer Experience Management and Mail-Related solutions

MRS and CXM collaboration generated 16% of the CXM revenue in North America in 2019

and in France we now have 56 joint Mail-

Related Solutions and Customer Experience Management customers

Print Service Providers (PSP) and large accounts

Production mail (MRS) with personalized omnichannelinteractions

+PARCEL LOCKER SOLUTIONS


MAIL-RELATED

SOLUTIONS

BUSINESS PROCESS AUTOMATION

MAIL-RELATED

SOLUTIONS

MAIL-RELATED

SOLUTIONS

A well-diversified customer base of 500,000 small, medium and large organizations across the globe and industries

Recognized by the experts

Proven results

96% customer

satisfaction rate*

Some examples of our large customers

* Source: Quadient 2019 data from study on Main Geographies

Our long-standing commitment to Corporate Social Responsibility (CSR) includes a dedicated program and team

SolutionsBuilding the best customers’ experience by offering innovative, reliable and sustainable solutions & services

Ethics & ComplianceEnabling a culture of excellence and integrity

PeopleEmpowering our people to achieve our company strategy and drive positive change in our communities

EnvironmentContinuously reduce our impact on the planet

32% of hardware products placed on the market are issued from remanufacturing

Five sites certified ISO 27001 with 25 security audits completed, and the creation of data privacy/security counsels

90% of industrial waste recycled with a reduction of

industrial waste by 8.6% versus 2018

Women representation among managers is 19.2% (60% increase vs 2018), and a new company-wide mentorship program to accelerate female leaders into senior management

Selected 2019 achievements

Ranked 9th of 230B grade for 2 consecutive years

Eco Vadis “Gold”Included in 2019 EthibelEXCELLENCE & Ethibel PIONEERInvestment Register

+2 pts in 2020 vs. 2018

CSR program supports the implementation of our corporate strategy

2019 Highlights

Geoffrey GODET

Achievement of 2019 objectives

15

1 Current EBIT = current operating income before acquisition-related expenses2 Free cash flow after capex /current EBIT3 Non-recurring expenses of the refinancing and the resolution of a tax litigation totaling €15 million

Indicators Expectations 2019 results

Top line organic growth Above 1% +1.6% in 2019 vs 2018

Current EBIT1 Between €180 and €185m €185m

Free cash flow conversion2 Above 50% (excluding IFRS 16 impact)

50.3%Excluding one-off cash items3

Execution ofthe strategy

Geoffrey GODET

-2.2%

FY 2015

-1.8%

FY 2016

-2.1%

FY 2017

+0.2%

+1.6%

Relevant strategic choices & execution drove good organic growth in 2019

17

(% of organic change) +2.9%

Q1 2019 Q4 2019Q1 2018 Q2 2019Q3 2018 Q3 2019Q4 2018Q2 2018

-2.1%

+1.2%

+0.2%

+1.5%+1.8%

+2.0%

+0.2%

FY 2018 FY 2019

Focus on 2018-2019 changesOrganic sales growth annual changes(% of organic change)

Positive organic growth posted for the seventh consecutive quarter

2019: execution of the “Back to Growth” strategy

18

Organization From a holding to an integrated company

New branding platform

Centralization of functions

Renewed and strengthened management team

Hiring of new managers with international background

Nomination of a Chief Operating Officer

Nomination of a new Chief Financial Officer

* North America: Canada, United-States and Main European countries (Austria, Benelux, France, Germany, Ireland, Italy, Switzerland, United Kingdom)

Ongoingdevelopment

and initiatives

Scope

Investments in go-to-market

New verticals (acquisition of new logos)

Increase market shares in existing verticals

Increase in cross-selling initiatives

Step up partnerships

Acceleration in innovation and R&D

Product rationalization

Ongoing cloudification of the product range

Enhanced synergies among the four major solutions

Acquisition and integration of Parcel Pending

Optimization of the supply chain

The other geographies

The other solutions

Major Operations Additional Operations

2main

geographies*

Actively working on “grow, improve or exit”

Growth & profitability increase in Customer Experience Management

and in Parcel Locker Solutions (Japan)

Value adjustments on non-strategic assets

Refocus of the portfolio - 3 divestments, 1 exit

ProShip (loss making) – 28 February 2020

Temando (loss making) – September 2019

Human Inference (loss making) – February 2019

Satori Software – January 2019

More than USD 90 million divestments completed

Losses reduction in Additional Operations

4major

solutions

Customer Experience Management

Business Process Automation

Mail Related Solutions

Parcel Locker Solutions

Parcel Pending delivered strong growth, above 30%, and continues to lead the expanding and strategic north American residential market

Acceleration in top line growth quarter after quarter

• Significant contribution to Quadient’s organic top line growth

• Installed base: c.3,700 lockers

A fast growing residential market to be captured

• Confirmed good market dynamics

• Leader position to be leveraged

• Accelerated investments to support growth

Status /next steps

• Integration ongoing, according to plan

• Investments in go-to-market and synergies

• Software and product range combination between Parcel Pending and Quadient’s existing ranges

• Initiatives launched in new market segments

Ongoing proof of concepts in retail segment

• Potential to go into other verticals and other countries

19

2019 Operational Review

Geoffrey GODET

Major OperationsStable

+3


Q4 2019Currencyeffects

Additional Operations

300 +1

+3


Q4 2018

+2

Scopeeffect*

308

+2


(9)


+6

Reported growth : +2.6%

Q4 2019 - Acceleration of the strategic businesses’ growth more than compensating Mail-Related Solutions’ decline

21

(4.4)%

* Scope effect: divestments of Satori Software and Human Inference (-€5.2m) and acquisition of Parcel Pending (+€6.9m)

+20.2%

+7.2%

+44.1%

+1.7%

(in € million, % of organic change)

+1.9%

+0.5%

Organic growth: +0.2%

Major Operations+0.6%

+4

2018

+29

Scopeeffect*


Currencyeffects


2019

1,143

(21)


+10 +12


+61,092


+10

Reported growth : +4.7%

FY 2019 – Record of a 1.6% organic growth, above Q3 upgraded guidance

22

(2.8)%

* Scope effect: divestments of Satori Software and Human Inference (-€21.6m) and acquisition of Parcel Pending (+€25.9m)

+18.8%

+6.2%+31.2%

+6.7%

(in € million, % of organic change)

+2.7%

+0.4%

Organic growth +1.6%

Customer Experience ManagementMajor Operations

FY 2019 performance

Growth in maintenance & professional services

• Thanks to the good performance in 2018 license sales

Increase of the installed base, new customers in both existing

and new verticals (utilities, governments and telcos)

• Already some customers in new verticals signed in 2019: Knoxville

Utilities Board, Bureau of the Fiscal Service, Vodafone, Pierce

County Sewer

Continuous increase in SaaS subscription

Double digit growth in North America

• 3 large deals in the U.S. in Q4 2019

Main European countries impacted by high comparison basis

• Mainly due to a large deals signed in Q4 2018

23

Overall good performance and high recurring revenue maintained

despite a difficult Q3 in 2019 and

a challenging comparison basis compared with Q4 2018

Sales per revenue type (year-to-date)

Q1 Q2 Q3 Q4

Revenue 23 27 26 34

Organicchange

+9.2% +7.9% +1.1% +7.2%

FY 2019 sales

€110m

Organic change (vs FY 2018)

+6.2%

72%

28%

Recurring revenue

License sales

Breakdown by quarter (% organic change vs 2018)

Business Process AutomationMajor Operations

FY 2019 performance

Specialized acquisition campaigns for verticals

Dynamic growth in recurring revenue

High level of cross-selling, with Mail-Related Solutions above

70% of new BPA customers

Solid growth in our two largest markets: France and North

America

UK/Ireland zone still negatively impacted by a lower number

of new licenses’ deals vs 2018

24

Continuous double-digit growth

in Business Process Automation

with solid base of recurring revenue


Q1 Q2 Q3 Q4

Revenue 14 16 15 18

Organicchange

+37.1% +8.6% +14.4% +20.2%

FY 2019 sales

€63m


+18.8%

78%

22%

Recurring revenue

License sales


Mail-Related SolutionsMajor Operations

FY 2019 performance

Good performance in high-end folder inserters

Increased bundled sales with Business Process Automation

Growth in North America

• Outperformed competition through investment in customer

acquisition

• Good growth in hardware sales thanks, notably to higher renewal

of leasing contracts

Continued decline in Main European countries especially in

Germany/Switzerland/Italy

25

FY 2019 sales

€728m


(2.8)%


Good overall resilience of Mail-Related Solutions

over the year

Q1 Q2 Q3 Q4

Revenue 177 183 176 192

Organicchange

(1.4)% (2.8)% (2.4)% (4.4)%

71%

29%

Recurring revenue

Hardware sales


Parcel Locker SolutionsMajor Operations

FY 2019 performance

Residential in the US (Parcel Pending)

• Ongoing integration as planned

• Strong top line growth: above 30% in FY 2019 vs FY 2018 through

additional investments in Go to Market for residential

Double digit growth in the Universities segment, in the US

Other countries in Major Operations

• Ongoing studies across all segments in key regions

26

Good performance of Parcel Pending continues to drive

growth in Parcel Lockers Solutions


Q1 Q2 Q3 Q4

Revenue 7 13 12 11

Organicchange

+13.3% +30.7% +36.2% +44.1%

FY 2019 sales

€43m


+31.2%

32%

68%

Recurring revenue

Hardware sales


FY 2019 sales

€944m

83% of Group total sales


+0.6%

Major Operations

27


FY 2019 performance

Continued organic growth in North America (+5.6%)

• Performance driven by growth in each of the four major solutions

Decline in main European countries (-4.7%) reflecting different trends:

• France: Business Process Automation and Customer Experience Management

virtually offsetting decline in Mail-Related Solutions

• UK/Ireland region: Decline in Mail-Related Solutions (despite growth in

hardware) and penalized by strong comparison basis in 2018 for Customer

Experience Management

• Germany/Italy/Switzerland region: double-digit decrease due to a strong

decline in Mail-Related Solutions hardware sales not compensated by the

growth in Customer Experience Management

Sales per geography (year-to-date)

Q1 Q2 Q3 Q4

Revenue 221 239 229 255

Organicchange

+2.0% +0.3% +0.4% 0.0%

70%

30%Recurring revenue

Hardware and licenses sales

55%45%North America

Main European Countries

+2.8%

(0.4)%

(4.7)%

+5.6%



28

Grow, improve or exit

FY sales

€199m

17% of Group total sales


+6.7%

Q1 Q2 Q3 Q4

Revenue 45 52 49 53

Organicchange

+7.4% +8.8% +9.7% +1.7%

FY 2019 performance

Customer Experience Management: +42.1%-growth, at €30m,

supported by Asia-Pacific and in the rest of Europe license sales and

maintenance

Parcel Lockers Solutions Japan: +51.7%-growth, at €19m

Continued growth in Parcel Lockers in Japan with an installed base

> 5,000 lockers

Overall slight decline for remaining additional operations

Strong performance in automated packing systems

6 units sold during Q4 – 17 sold in 2019

Poor performance in Nordics and Australia, mostly related to

graphics business

Shutdown of Temando almost completed


15%

10%

75%

Customer ExperienceManagement

Parcel Locker Solutions in Japan

Remainingadditional operations

2019 Financial Review

Christelle VILLADARY

2019 figures: both Major and Additional Operations are profitable

30

North America

Main European countries

Sales€523m+5.6%

€944m+0.6%

€421m-4.7%

(in €m, % of organic change vs 2018, unaudited figures)

Additional Operations Total Group

€181m

€1,143m+1.6%

€185m

€199m+6.7%

€4m

1 Current EBIT = current operating income before acquisition-related expenses

Current EBIT1

Total


€110m+6.2%


€63m+18.8%


€728m(2.8)%


€43m+31.2%

Major Operations

2019 change in organic EBIT

31

3

8

15

5180

2018 restated

icon Systemhaus’

earn-out reversal

Currency impacts

Scope

23


20192019 before currency impacts

Major Operations

199

188185

2018

Investments in our Solutions across Major Operations as planned

Strong improvement in Addition Operations through execution discipline

Net income

32

In € million 2018 2019

Current operating income (before acquisition-related expenses)

199 185

Acquisition-related expenses (17) (15)

Current operating income 182 170

Optimization expenses (13) (10)

Result from other operating income and expenses (12) (83)

Operating income 157 77

Cost of debt (31) (39)

Currency gains & losses and other 1 (2)

Net financial income/(expense) (30) (41)

Profit before tax 127 36

Taxes (36) (22)

Income from associated companies 1 1

Minority interest 0 (1)

Net attributable income 92 14

Net margin as a % of sales 8.4% 1.2%

EPS (in €) 2.401 0,151,2

Fully diluted EPS (in €) 2.27 0,152

Net income in 2019 impacted by write-offs and refinancing

Average rates €/$ FY 2019 = 1.12 and FY 2018 = 1.18 ; €/£ FY 2019 = 0.87 and FY 2018 = 0.891 As per IFRS treatments, the calculation takes into account the dividends paid to ODIRNANE’s holders 2 The average compounded number of shares is 34,261,435. The fully diluted number of shares is 34,261,435.

High level of M&A activities, comparable with 2018

IFRS 16 impact on interest: €(2.6)mCost of bond liability management: €(4.9)m

In 2019: normalized level of tax versus 2018

IFRS 16 impact on EBIT: €2.2m

See following slide

2019 “Result from other operating income and expenses”

33

Active portfolio management with exit of Temando and divestment of ProShip

All of full-year 2019 write-offs are related to Additional Operations.Nearly 100% of Additional Operations goodwill has been impaired.

In € million2019

Write-offs:

- Goodwill impairment within Additional Operations (Nordics, Australia,

Legacy Shipping software in France)

- Net value of intangible assets recognized with Temando’s PPA

(75)

ProShip reclassification as assets held for sale under IFRS 5 standard (3)

Others (5)

“Result from other operating income and expenses” (83)

Cash flow generation – Highly cash generative model

34

In € million 2018 2019

2019 excl. IFRS 16

EBITDA 272 282 258

Other items (25) (20) (20)

Cash flow1 247 262 238

Change in WCR 15 (7) (7)

Change in lease receivables 32 25 25

Interest and income tax paid (54) (85) (82)

* o/w non-recurring cash items (13) 15 15

Cash flow from operations 240 195 174

Capital expenditure (88) (109) (96)

Cash flow after capex 152 86 78

Cash flow after capex excluding non-recurring cash items

139 101 93

Acquisitions net of divestments (26) (12) (12)

Cash flow after capex & acquisitions 126 74 66

Average rates €/$ FY 2019 = 1.12 and FY 2018 = 1.18 ; €/£ FY 2019 = 0.87 and FY 2018 = 0.891 Before net cost of debt and tax

In 2018: incl. a subsidy of €5m for Packcity rollout in Japan*

In 2019: payment of taxes on Satori Software capital gain: €(12)m

In 2018: incl. expenses linked to the acquisition of Parcel Pending and the divestment of Satori Software

Capex in line with the strategic plan excluding IFRS 16 impacts

In 2018: Reimbursement of the French dividend tax and related interests for €13m*

In 2019: Net impact of the resolution of the 2006-2008 fiscal litigation for €(6.6)m*and €(8.7)m linked to the refinancing*

CAPEX in line with “Back to Growth” plan

CAPEX amount: €100m p.a. on average as part of

Back to Growth

2019 in line with strategic plan

Rented equipment: specific to Quadient

• Investment with strong visibility on future returns

(rental cashflows)

• Shift in rented equipment

• Increase in Parcel Lockers linked to the roll-out

of installed base in Japan

• Decrease in Mail-Related Solutions linked to decline

in activity

Increase in development CAPEX mainly linked to

the R&D efforts to support solutions’ roadmaps

35

30%19%

2017

28%

29%

53%

2018

31%

41%

2016

23%

45%

32%

16%

52%

2019

82

9993 96**

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

Development CAPEX Rented equipment

* Before the €5m-subsidy for Packcity roll-out in Japan** Excluding IFRS 16. Including IFRS 16, capex reached €109m

*

9%52%

91%

2016 2018

55%48%

2017

45%48%

52%

2019

Parcel Lockers Solutions Mail-Related Solutions

Change in CAPEX mix since 2016

Rented equipment mix

*

NET FINANCIAL DEBT1

Financial structureNet debt is decreasing while future cash flows from rental and leasing are stabilizing

36Closing rates €/$ FY2019 = 1.11, FY 2018 = 1.15 ; €/£ FY 2019 = 0.84, FY 2018 = 0.88Rental future cash flow: estimate made by using a discount rate of 15%

1 Excluding ODIRNANE of €265 million, maturing 2022 - classified in equity under IFRS

814

814

798

763

711

675

706 698587

245 225

216 225 235

81

933

1,059

617

1,023927 931

668

IFRS 16 impact on debt

Net financial debt excluding IFRS 16

Rental future cash flows

Leasing portfolio

to be compared with

31/01/202031/01/2019

TOTAL FUTURE CASH FLOW FROM RENTAL AND LEASING

0.40.9

0.5 excl. IFRS 16

Net debt excl. leasing / EBITDA excl. leasing

1,2471,249

1,254 excl. IFRS 16Shareholders’ equity

49%54%

47% excl. IFRS 16

Net debt / shareholders' equity

2.32.4

2.3 excl. IFRS 16Net debt / EBITDA

31/01/201831/01/201731/01/2016

0.7

1,169

58%

2.4

0.8

1,139

67%

2.6

1.4

1,069

76%

2.6

IFRS 16 impact

Leverage is well under control, stable at 2.3x excluding IFRS 16Leverage excluding leasing at 0.5x excluding IFRS 16

Strong liquidity position & well-balanced balance sheetAs of January 31, 2020

37

May 2019: Successful Schuldschein (c.€210m) to refinance 2019 maturities (c.€174m)

January 2020: New bond issue of €325munder very good conditions to refinance 2021 bond (€327m outstanding) with successful liability management transaction leading to €148.8 million buy back of the 2021 bond

Well-spread debt maturities (€1,085m of gross debt, excl. IFRS 16)

Odirnane

USPP USD 61 million

Bond 2,25%

Bond 2,50% Schuldschein 2017

USPP USD 90 million Schuldschein 2019

Active debt management

Strong liquidity position

€498m of cash

€400m of undrawn credit facility (maturing 2024)

296

121

334

0

300

100

200

202620242020 2021 2022 2023 2025

171

73

0

Leasing portfolio

Well-spread liquidity (€698m of a diversified leasing portfolio)

265

150

300

50

0

100

200

250

350

400

74

2020 2021

334

2022 2023 2024

76

2025 2026

210192

23

265

129

Information for 2020 and beyond

Geoffrey GODETChristelle VILLADARY

Update – Coronavirus – Early stage measures – Business Continuity Plan Fully Operational

SAFETY

90 % of our employees are remote

BUSINESS CONTINUITY

FOR HARDWARE & SOFTWARE SOLUTIONS

Call centers (telesales and services) up and running, functioning remotely

Field technicians intervention for installations and on site maintenance when possible

Deliveries of spare parts and consumables

Virtual customers meeting

Virtual marketing campaigns ongoing

Implementation of Business Process Automation and Customer Experience Management solutions can be done remotely

On line maintenance

Remote Professional Services Operations for Business Process Automation and Customer Experience Management

Quadient customer facing activities

are up and running

Order to cash remote process in place

IT support organization operational

Back office department

Operating model: Built-in flexibility and resilience

40

SUPPLY CHAIN

90% of volumes of Mail-Related

equipment manufacturing is

outsourced

100% of Parcel Lockers manufacturing

is outsourced

MAIL-RELATED EQUIPMENT SALES

If placement of new equipment not

possible at the end of lease or rental

contract, option to offer lease or

rental extension instead (short-term

reduction of cash outflow)

NEW SOFTWARE LICENCE SALES

Some software solutions could be

installed on a remote basis

New SaaS/Cloud solutions available

RECURRING REVENUE

Represents 68% of total revenue

Containment is putting at further risk

a proportion of recurring revenue (e.g.

volume-based contracts - ink supplies -

and professional services that cannot

be performed remotely)

CLIENT BASE

Risk of default payment widely spread

across well diversified 500,000 client

base

Good geographical balance and

presence in various

industries/verticals

COST OF SALES

High proportion of outsourcing

Almost 100% of software cost of sales

is variable

High proportion of variable costs

Quadient has the agility and flexibility to adapt to its new environment

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Postponement of equipment deliveries starting

On-site maintenance/supplies reduced


Some projects started to be delayed

Some on-site PSO are postponed or switched to digital

(through virtual meetings)


Limited impact at this stage

Potential traction for digital Business Process Automation solutions


Limited impact on the US activity at this stage

Japan activity not impacted

Adapted answers to Quadient’s customers’ needs

Leasing or rental contracts’ extension available

Remote installation of Busines Process Automation/Customer

Experience Management solutions under Saas/Cloud mode

Early measures already implemented

Hiring freeze

Supply chain management: subcontracted equipment orders

adapted

Temporary work/outsourcing stopped/reduced

Stop overtime/use holidays

Marketing events cancelled

Measures under implementation or review

Partial unemployment

Cost structure optimization

CAPEX/projects strategic review – Cancel/postpone/maintain

Current situation by solution Early measures / steps

Cash situation & debt maturities as of March 2020

42

Strong Liquidity Position

Low level of short term repayment in 2020

Secured access to any financial need with

undrawn credit facility of €400m

(maturing 2024)

Debt maturities after February 2020 debt management

23

265

350

0

150

50

100

200

300

400

250

2020 2021 2022 2023 2024 2025 2026

32

195 192

374

77

Bond 2,50%

Odirnane

USPP USD 61 million

Bond 2,25% USPP USD 90 million

Schuldschein (2017, 2019, 2020)

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

Recent events

129

265

129

Information for 2020 and beyond

43

Taking into account :

fast developments in the Covid-19 pandemic, and

the uncertain economic context for the coming months :

the Group is not in position to give any indication for the 2020 financial year as of today;

the Board of Directors will make a decision by the end of May for the dividend proposal

related to the 2019 financial year, which will then be submitted to the approval of

shareholders at the General Meeting;

indications for 2022 as part of the Back to Growth plan are suspended.

Quadient will publish its Q1 2020 sales on May 27, 2020.

APPENDICES

Sales at Group level

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€140m+12.5%


€65m+18.4%


€790m(3.0)%


€65m+30.7%

Other solutions€83m+2.6%

68%

32%

Recurring revenue

Hardware and licenses sales

Sub-total€1,060m

+1.5%

Total Group€1,143m

+1.6%


3 growth engines recording double digit growth

Better performance vs the market in Mail-Related

Solutions

Increase in both hardware and recurring revenue

+2.7%

+1.1%

Significant changes in the governance

Separation of functions

• 1 February 2018: appointment of Geoffrey Godet as CEO, and Denis Thiery, former CEO & Chairman, becomes Chairman

• 28 June 2019: appointment of an independent Chairman, Didier Lamouche

Departure of Denis Thiery, former Chairman

Changes in the Board governance in September 2018

• Creation of a Strategy and Corporate Social Responsibility Committee

• Merger of the Appointments’ Committee and the Remuneration committee

Structural changes in Board composition

46

• Denis Thiery 28 June 2019

• Catherine Pourre 24 September 2018

• Jean-Paul Villot 28 July 2017

• Cornelius Geber 30 June 2017

• Didier Lamouche June 2019

• Martha Bejar January 2019

• Geoffrey Godet June 2018

• Nathalie Wright September 2017

• Helene Boulet-Supau June 2017

2019: execution of “Back to Growth” strategy

47

January 2019

Divestment of Satori Software

Acquisition of Parcel Pending

Back to Growth Strategy

February

Divestment of Human Inference

May June September October November December January 2020

Phased shutdown of Temando

Gaïa rating top 10 performer

10,000 Parcel Locker Stations Milestone worldwide

Strengthening the Management team

Successful refinancing through a Schuldschein of c.€210m

5,000 Parcel Locker Stations Milestone in Japan

Appointment of an independent Chairman

Syntec: 2nd French software horizontal publisher

CXM: EMC Insurance Selects Quadient

Ecovadis: Gold Certification – top 1% supplier

Successful refinancing through a €325m bond issue

Strengthening of the Management team

Appointment of a new director

February

CXM: release Inspire R14

Implementation of the new organization: from holding to an integrated company

Successful refinancing through a Schuldsheinof c. €42m

March

Divestment of ProShip

Current operating income

48

In € million

FY 2018

Published

FY 2018

Proforma

FY 2019

published

Sales 1,092 1,096 1,143

Gross margin 820 810 841

% of sales 75.1% 74.2% 73.6%

EBITDA 272 262 282

% of sales 24.9% 23.9% 24.7%

Current operating income (EBIT)(before acquisition-related expenses)

199 196 185

% of sales 18.2% 17.9% 16.2%

Restated current operating income before acquisition-related expenses, excluding €7.5million of icon Systemhaus’ earn-out reversal

188

% of sales 17.2%

Average rates €/$ FY 2019 = 1.12 and FY 2018 = 1.18 ; €/£ FY 2019 = 0.87 and FY 2018 = 0.89

€258m excluding IFRS 16 impact

€183m excluding IFRS 16 impact

Consolidated balance sheet (1/2)

49

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

Goodwill 1,127 1,045

Intangible fixed assets 138 130

Tangible fixed assets 149 235

Non-current financial assets 64 69

Other non-current receivables 3 4

Leasing & financing receivables 706 698

Deferred tax assets 6 9

Inventories 71 77

Trade receivables 230 233

Other current assets 85 96

Cash and cash equivalents 246 498

Current financial instruments 0 0

Assets held for sale 8 21

TOTAL 2,833 3,115

Consolidated balance sheet (2/2)

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

Shareholders’ equity 1,247 1,249

Non-current provisions 26 29

Non-current financial debt 674 1,055

Current financial debt 190 112

Other non-current debt 7 1

Deferred tax liabilities 145 135

Non-current financial instruments 0 0

Prepaid income 193 198

Other current liabilities 345 327

Current financial instruments 0 2

Liabilities held for sale 6 7

TOTAL 2,833 3,115

All covenants easily met

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Schuldschein 2019 and Revolving Credit Facility Schuldschein 2017

Quadient level as at January 31, 2019

Quadient level as at January 31, 2020(excluding IFRS 16)

Quadient level as at January 31, 2020 (including IFRS 16)

Covenants on leasing operations

Maximum drawing: 90% of outstanding leasing portfolio

Intercompany net leasing debt standing at 79% of outstanding leasing portfolio



Covenants on non leasing operations

Maximum leverage of 3.0(1) excluding leasing entities

0.4 (EBITDA excl. leasing: €188m) 0.5 0.9

Minimum equity: €600m €1,247m €1,249

Default Rate < 5% ~1% ~1%

Minimum interest cover(2): 4.0 9 7.4

US Private Placement

Quadient level as at January 31, 2019

n/a

Quadient level as at January 31, 2020 (including IFRS 16)

Covenants

Leverage max 3.25 2.25(3) 2.37(3)

Minimum equity of €525m €1,247m €1,249

(1) Net debt excluding leasing/EBITDA excluding leasing(2) EBITDA/net cost of debt(3) January 31, 2019 data were not submitted to IFRS 16 standard. Excluding IFRS 16, Quadient’s leverage as of January 31, 2020 would have amounted to 2.27.

A balanced geographical footprint1

Between North America and Europe with exposition to French market below 20%

Strong financial performance Solid free cash flow (FCF) generation, with FCF conversion2 > 50%

Consistently high level of profitability with c.25% EBITDA margin1

Solid financial structure Net debt at €668m3 covered by a well-diversified small ticket customer leasing

portfolio and future cash flows from rental activities

Low leverage ratio excluding leasing (0.9x)4

Well-spread maturities with average cost of debt between 3% and 3.5%

Quadient in a nutshell

52

46%

37%

17%

Additional Operations (worldwide sales)

North America

Main European Countries Major Operations

A global leader with €1.1bn revenue N°1 worldwide in Technology in Customer Communication Management

(Gartner and Forrester), n°2 worldwide position in sales,

N°3 worldwide installed base of parcel lockers

N°2 worldwide in sales in Mail-Related Solutions

A renewed and international team for a new strategy Unified company operating under one brand

Focus on four major solutions and two main geographies

5,800 employees worldwide with more than 800 R&D engineers

A diversified customer base Longstanding relationships with a highly diversified base of

500,000 customers

c. 70% of recurring revenue1

Multi-year SaaS model

5 years leasing

Rental model (up to 7 years-contracts)

Maintenance services, supplies activities

A strong CSR recognition Ecovadis: Quadient in the 1% top performers

Gaïa Index: Quadient in the top 10 performers in 2019

1 2019 data2 Free cash flow conversion = cash flow after CAPEX / current EBIT3 2019 data , including IFRS 16 impact. Excluding IFRS 16 impact, net debt ended at €587m4 Including IFRS 16. Excluding IFRS 16, leverage ratio excluding lease stands at 0.5x.

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