Quest Holdings (FY:23 results review): The company reported an in line set of Q4/FY:23 financial performance in both sales and EBITDA lines with net income beating our estimate by 5.6% due to lower than estimated financial expenses. Results were supported by superior performance of the IT segment, growing a t amid single digit pace courier business, strong retail sector top line performance and mild weaker energy sector due to lower weather related energy production. In more details:
§ In the commercial (ex-retail) segment sales advanced 16.9% and EBT +2.9% with EBITDA accelerating 28% courtesy of higher margin clima contribution (Demitriou).
§ IT Services came in 21.8% higher on sales and +25.6% on the EBT level due to the high number of digital transformation projects of the private and public sector. 50% of sales are related to international activities. Backlog at €550mn.
§ In postal services, sales increased by 5.6%, followed by a single digit EBT expansion (+4.3%). Growth was driven by the expansion of e-commerce, albeit at a milder pace. 2023 results were adversely impacted by extraordinary costs related mainly to the floods in Central Greece during September.
§ Finally, in the energy sector sales were lower by 2.1% with EBT down 1.7% on fewer sunny days.
§ EBITDA landed 15.7% higher to €83.3mn vs €72mn a year earlier, lagging by 1% vs our call of €84.2mn
§ Net income settled at 44.8mn, an8.2% y-o-y increase (€41.4mn in 2022), beating our call of €42.44mn by 5.6%.
§ CAPEX came in at €26.714m, significantly reduced vs €47.254mn of 2022 which included the greatest portion of ACS new HUB.
§ Quest turned from debt free position in 2022 (net cash €28.695mn) to net debt of €17.013mn on increased WC retail business requirements, dividend distribution (€21.3mn for 2022, or €0.2/share) and the capex recorded (€26.7mn as mentioned).
§ The company did not mention its FY:23 shareholders’ remuneration which we estimate at €0.21/share, DPO at 50% with DY at 3.5% currently.
§ Regarding FY:24 outlook, the company guided for higher figures on all lines, ie sales, EBITDA, EBT and Net income with IT services being for one more year on the spotlight and outperforming. In the other segment mild mid to high single digit growth is expected. On our estimations we see sales up 13.7% to €1.338bn, EBITDA up 21.5% to €93.9mn and net income up 33.4% to €56.6mn, which all sound rather optimistic based on the company’s mild growth guidance. We intent to revisit our model and estimates and come back with update.
§ We have an OVERWEIGHT Recommendation on Quest Holdings with €8.7/share TP. The company trades at FY:24 projected PE 11.1x, EV/EBITDA 6.3x and 4.5% DY.
The following tables summarize Quest Holding’s FY:23 performance vs our estimates:
QUEST |
2022 |
2023 |
Y-o-Y |
2023 Est. |
Act. vs |
2022 |
2023 |
Y-o-Y |
2023 Est. |
Act. vs |
EUR m. |
FY |
FY |
(%) |
FY |
Est. |
Q4 |
Q4 |
(%) |
Q4 |
Est. |
Sales |
1,031.9 |
1,196.6 |
16.0% |
1,176.5 |
1.7% |
292.2 |
369.6 |
26.5% |
349.5 |
5.8% |
EBITDA |
72.0 |
83.3 |
15.7% |
84.2 |
-1.0% |
15.4 |
23.5 |
52.5% |
24.4 |
-3.5% |
EBITDA Mrg |
7.0% |
7.0% |
-1 bps |
7.2% |
-19 bps |
5.3% |
6.4% |
+109 bps |
7.0% |
-61 bps |
Net Income |
41.4 |
44.8 |
8.2% |
42.44 |
5.6% |
9.5 |
13.0 |
37.7% |
10.65 |
22.1% |
Net Mrg |
4.0% |
3.7% |
-27 bps |
3.6% |
+14 bps |
3.2% |
3.5% |
+29 bps |
3.0% |
+47 bps |
Quest Group P&L (€mn) |
FY 2022 (A) |
FY 2023 (A) |
% chng y-o-y |
FY 2023 Est |
Actual from Est |
|
|
|
|
|
|
Retail Products |
704.05 |
871.74 |
23.82% |
800.78 |
8.86% |
% of consolidated sales |
68.20% |
69.99% |
|
68.07% |
|
IT Services (Unisystems) |
175.87 |
214.19 |
21.79% |
208.24 |
2.86% |
% of consolidated sales |
17.04% |
17.20% |
|
17.70% |
|
Courrier/Postal Services |
141.76 |
149.71 |
5.60% |
157.02 |
-4.66% |
% of consolidated sales |
13.73% |
12.02% |
|
13.35% |
|
Solar Energy |
10.11 |
9.89 |
-2.13% |
9.90 |
-0.08% |
% of consolidated sales |
0.98% |
0.79% |
|
0.84% |
|
Other |
0.51 |
0.00 |
-100.00% |
0.51 |
-100.00% |
% of consolidated sales |
0.05% |
0.00% |
|
0.04% |
|
Total Consolidated Sales (Reported) |
1032.30 |
1245.52 |
20.66% |
1176.45 |
5.87% |
|
|
|
|
|
|
Retail Products EBITDA |
25.74 |
32.96 |
28.05% |
32.08 |
2.75% |
% of consolidated EBITDA |
35.55% |
39.55% |
|
38.10% |
|
EBITDA margin |
3.66% |
3.78% |
+12 bps |
4.01% |
-22 bps |
IT Services EBITDA |
16.12 |
18.95 |
17.51% |
18.74 |
1.09% |
% of consolidated EBITDA |
22.27% |
22.74% |
|
22.26% |
|
EBITDA margin |
9.17% |
8.85% |
-32 bps |
9.00% |
-15 bps |
Courrier EBITDA |
22.59 |
24.20 |
7.11% |
25.91 |
-6.61% |
% of consolidated EBITDA |
31.20% |
29.04% |
|
30.77% |
|
EBITDA margin |
15.93% |
16.16% |
+23 bps |
16.50% |
-34 bps |
Solar Energy EBITDA |
7.96 |
8.21 |
3.14% |
8.27 |
-0.73% |
% of consolidated EBITDA |
10.99% |
9.85% |
|
9.82% |
|
EBITDA margin |
78.72% |
82.96% |
+424 bps |
83.50% |
-54 bps |
Other EBITDA |
0.00 |
-0.98 |
#DIV/0! |
-0.80 |
21.88% |
% of consolidated EBITDA |
0.00% |
-1.17% |
|
-0.95% |
|
Total EBITDA (Reported) |
72.41 |
83.33 |
15.09% |
84.19 |
-1.02% |
EBITDA margin |
7.01% |
6.69% |
-32 bps |
7.16% |
-47 bps |
CC Details: Thursday, 4th April 2024, at 15:30 local GR Athens time
§ GR: + 30 213 009 6000 or + 30 210 94 60 800
§ UK& INTL: + 44 (0) 203 059 5872
§ USA: + 1 516 447 5632
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