Quadient S.A. (QDT) Earnings Call Transcript & Summary

Good evening, and welcome to Quadient 9 Months Sales Presentation. I am Catherine Hubert-Dorel, Quadient Head of Investor Relations. And I am joined today by Geoffrey Godet, Quadient's CEO; and Laurent Du Passage, Quadient's CFO. The agenda for today is on Slide 3. And 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 without further ado, over to you, Geoffrey.

Thank you, Catherine. Welcome, everybody. Good evening. So I'll start with the highlights for the period. Revenue for the third quarter came in at EUR 263 million. Both solutions also posted solid overall revenue organic growth, with Digital increase coming to close to 10%, while Lockers was above 14%. Digital and Lockers top line performance are now in line with the expectations set during the Capital Market Day in last June. Regarding our Mail business, hardware sales were impacted by a high year-on-year comparison basis in Q3 that Laurent will detail in a few minutes for you. Specifically, at Quadient level, our subscription-related revenue growth has accelerated now to 2.6% in the third quarter, which represents EUR 190 million of recurring revenue in the third quarter alone. And the subscription represents up to 72% now of the total revenue of the quarter. This acceleration is driven by a significant acceleration of the growth in subscription from Digital and also from the Lockers, reaching, respectively, 12.9% for Digital and 15.7% for Lockers. On a 9-month reported basis, revenue increased by 2.4% year-on-year, and this was supported by the 2 acquisitions we did recently. If you remember, Daylight, for e-forms capability that we have added to our Digital Automation platform, and the more recent acquisition of Frama, which is a Mail consolidation in the market, which added for us 30,000 customers to our existing large already customer base. So consequently, with a solid contribution from our Digital and Locker solution this quarter and a resilient Mail business, we confirm our full year growth outlook for both top line and current EBIT. Turning to Slide 6. Let me share some update on our latest financing activities. We have signed with the European Bank of Reconstruction and Development a new financing agreement. This new EUR 25 million Schuldschein facility aims at financing our Digital R&D center activities in the Czech Republic. The Czech Republic is, indeed, the place where our Digital Automation platform development hub is located, the primary hub, in Hradec Kralove. At Quadient, we're obviously super proud of the state-of-the-art R&D center that we have over there. And this center is really where our most advanced technologies, such as AI innovations and complex frameworks, are elaborated, developed, and improved by now more than our 400 top engineers. Our center is also a key partner for local universities to train future engineers and developers, playing a key role in the local community in Czech Republic. Overall, this additional debt facility brings the total debt raised year-to-date to EUR 180 million. I will now let Laurent provide you with the various breakdown of our third quarter and 9 months revenue.

Thank you, Geoffrey. Good afternoon and good morning, everyone. I'm Laurent Du Passage. I'm Quadient's Chief Financial Officer, and I will start by providing you with the breakdown of our revenue by category on Slide 8. Starting on the left-hand side with the Q3 performance, revenue for Quadient in the third quarter stands at EUR 263 million. It's up 0.3% year-over-year on an organic basis, with a solid subscription-related revenue at plus 2.6%, while the nonrecurring revenue is down 5.3% in the period. The share of subscription-related revenue has continued to progress. It's now representing 72% of the total revenue. As Geoffrey mentioned in the highlights, our Digital and Locker solution are the 2 contributors to the subscription-related revenue organic growth, as they both posted double-digit increases. On the right-hand side, you see the same breakdown for the 9 months, with revenue standing at EUR 797 million. It's up 0.6% year-over-year on an organic basis, and a 1.4% increase in subscription-related revenue. Turning now to Slide 9. Here is the breakdown of revenue by geography. North America continues to be the group's main driver of organic growth, as you can see, and now representing 58% of our total revenue of Q3. In Q3, notably, the North American business has grown by 3%, compared to last year, supported by double-digit increases also in Digital and Lockers. Taking a step back and considering the current difficult macroeconomic environment globally, we are pleased with our exposure to the stronger U.S. economy. With the recent presidential election in this country and the dollar strengthening against the euro, we are in quite a favorable position as a euro-based company. By contrast, organic decline in revenue from main European countries in Q3 remained on a similar trend than in H1, at minus 1.6%, despite solid organic growth from Lockers and positive contribution from Digital. Lastly, international posted a 9.1% decline in Q3 due mainly to the high comparison basis in Mail. We'll come back to this later in the presentation. Turning to our usual revenue bridge and starting with Q3 performance on Slide 10. So starting from last year Q3, EUR 261 million reported last year, we can see that the positive EUR 5 million scope impact from the acquisition of Daylight in Digital and Frama in Mail is almost compensated by the negative ForEx impact amounting to EUR 4 million. This is mainly linked to a weaker dollar against the euro this quarter compared to last year. Turning to Locker solutions. The good performance in Digital and the improvement in Lockers more than compensate the sharp decline organic of Mail due to the high year-over-year comparison basis and the unexpected impact of the Hurricane Milton in the U.S. at the end of the quarter. Moving to Slide 11, and the same bridge, but for the 9-month period, the 2.4% reported growth in the 9 months is made of EUR 17 million scope impact from the acquisition of Daylight and Frama, a negative EUR 3 million currency impact, and obviously, a solid EUR 12 million organic change from Digital, you can see in the middle, which by itself more than offset the organic decline in Mail. Lockers also posted a positive performance over the period. And we now move into the detail of each solution. Over to you, Geoffrey.

Thank you, Laurent. Starting with the result of the ranking of the latest top 250 French Software Editors, which came out very recently. So I'm pleased with the significant improvement in the ranking seen by Quadient. We have moved from the 15th position to the 11th position in the overall ranking, establishing us naturally as one of the key software player now in France and in Europe. But we have also achieved 2nd place in the Horizontal publisher category, rising from the 5th place last year. And I think this progress highlights Quadient's strong performance and unwavering focus on both innovation and customer success. Now, an important update on the upcoming European regulation. As we published during our H1 result, Quadient has been registered as what we call a dematerialization platform partner or in a shorter version, a PDP platform, allowing us to enter the next phase of integration and test with the French government. As a reminder, our PDP role will be key to support businesses in France with the upcoming French regulation, which will come into force in 2026. This role has even been reinforced by the end of the free public invoicing portal that the French government had envisioned to offer, but recently abandoned, making the PDP platform provider more central to help the French businesses to adapt to this upcoming regulation. Quadient is already a partner of choice today for many businesses looking to automate their financial processes, as you know. So not just as a PDP, but as a provider of a complete suite of financial automation solutions. Quadient offers intelligence, notably around e-invoicing, financial processes, analyzing analytics, customer behaviors, and also providing invoice control and ease and facilitation of cash collection through its solutions amongst the other offering of our software platform. Moreover, if we look at it from a customer acquisition standpoint, we continue to leverage our existing large customer base from our Mail business today. And e-invoicing is not just in France, as a reminder, but this is really a European upcoming regulation. As a global player, Quadient will be able not only to position itself in the European market as, what we call, the ViDA system will come into force. And last but not least, I wanted to emphasize for you today that our share of SaaS customers continue to increase every quarter, now up to 84%. I will now let Laurent detail the revenue for Digital.

Thank you, Geoffrey. Digital represented EUR 194 million of software revenue for Quadient in the first 9 months of the year. It's an increase of 6.8% organically, and it's 8.2% on a reported basis. In Q3, Digital represented EUR 65 million. It's an organic growth of 8.7% with a positive contribution from all regions. Of note during the quarter, the acceleration of the subscription-related revenue at plus 12.9%, driven by a strong 20% organic growth in North America, along with positive commercial trends in cross-sell and upsell across the platform. The share of recurring revenue reached 84% in the quarter, compared to the 81% a year ago. At the end of October 2024, our annual recurring revenue continues to increase, and now it stands at EUR 226 million. It's an annualized organic growth of 13.4%, compared to the end of fiscal year 2023. Back to you, Geoffrey, on our Mail business. Thank you, Laurent.

In our Mail solution, I wanted to mention to you that we have strengthened our leadership in the segment of what we call the high-end of companies, the one that produces a large volume of communication. And we did so with the launch of a new high-end folder inserter, which we call the DS-1200 G5iQ. This latest product launch, we continue to lead the market for high-end product, and we further, obviously, demonstrate our innovation capability. The high-end segment is a very attractive part of the Mail market today, and such product brings our customer, I think, the best and the newest technology, flexibility, and scalability for their communication distribution need. And we are, obviously, already off to a pretty good start with this new product, as we have already secured a large number of more than 10 units for Q4 2024. Contract-wise, I wanted to mention an additional update for you. This quarter, we signed $1 million agreement with a federal agency in the U.S. to modernize their mailing operation and enhance the efficiency of their processes. Now, this is an upsell, because it's an existing customer, which operates around 60 of our Mail products already today. And I think this deal demonstrates, again, our ability to work with our customers to renew -- not only renew, but also extend our commercial relationship. In terms of modernization, as we mentioned this, we continue our effort to upgrade our installed base. And at the end of October 2024, we have reached 40% threshold of upgraded installed base. Lastly, a little word on our Italian Mail subsidiary. As a reminder, it was reclassified as discontinued operation under IFRS 5 in the full year 2023. So I wanted to share with you that an agreement has been signed with a local distribution company for the sale in July '24 of our subsidiary, and the deal has been closed in October '24, so very recently. Now, turning to Laurent for the Mail and key financial figures.

Thank you, Geoffrey. Revenue for Mail came in at EUR 536 million, 1.7% organic decline and 0.6% increase on a reported basis, thanks to the recent acquisition of Frama, consolidated since 1st of February 2024. Q3 underlying business trends remained in line with the recent quarter, but suffered from a high level of comparison basis due to the contract signed with NBT Norway in Q3 2023 for more than EUR 3 million, obviously impacting the hardware sales performance, which then are at minus 7% in the quarter. Excluding the impact from this contract, Q3 organic decline would have been of minus 2.3% against the minus 4.1% that you can see on the graph. In addition, the end of the quarter was also impacted by the unexpected business disruption caused by the Hurricane Milton in Florida. Regarding subscription-related revenue, the declining trend seen since the beginning of the year is unchanged in Q3 at minus 2.7%, with lower supplies orders. And over to you, Geoffrey, for the Locker solutions.

Thank you, Laurent. On Lockers, we continue to deploy our open network, as you know, in France and in the U.K. And also, as a reminder, the geographical density for open network is a key factor in driving the increase in usage and in volume. So we have also taken a new strategic initiative to add open network columns in the locker to existing click & collect lockers, so those click & collect lockers will not open. So this is the case with our existing Decathlon Lockers, where we already started this process of adding open network columns on an existing installation, as you can see on the picture on the right-hand side, the gray one. This new initiative is bringing value to all stakeholders. So let's take them a little bit, one by one. For Decathlon, the example as a retailer, the additional columns can lead to additional buyers for their stores, as people that bought online product from other retailers will come and picking them up. For ecommerce shoppers, they can consolidate several orders and several pickup or drop-off of parcels and click & collect, by the way, even from Decathlon in one single location, making it very efficient and time-saving. If we look at it now from a carrier perspective, it provides convenient and easily accessible additional lockers, which densify the existing French open network for them as well as new location. And for Quadient, the dual utilization maximize the usage on the one hand and increase the density of the open network. So with the same usage maximization mindset, we have also recently launched a new initiative in Japan, launching a new mobile application. Now, let me talk a little bit about this mobile application. It gives local businesses the opportunity to offer their customers parcel delivery services into our Quadient Lockers. Now, the mobile app format also allows the user, naturally, to connect to the lockers without any complex IT integration that could happen otherwise. So this is a very new, very easy, and very flexible access to our locker base in Japan, which is expected to boost usage in the coming quarters. The lockers, generally speaking, are also available now outside those new lockers, outside the normal store hours, from a click & collect perspective. So it provides clearly an improved customer experience from an open network perspective. At a global level, we have now 600 additional lockers that were installed over the quarter, which I think is following more or less the same trend than we did in the second quarter, which means, and brings me to my conclusion on the lockers, that our total installed base now stands at 22,000 lockers at the end of the first 9 months of 2024. Laurent, could you give us a little bit more insight on the financials of the Lockers?

Absolutely. Revenue for Parcel Lockers is EUR 67 million for the first 9 months of 2024. It's 2.9% organic growth and 0.8% on a reported basis. Q3 has been a strong quarter for our Locker solution, with revenue up by 14.3% in an organic basis, driven by an acceleration of the growth in North America and in the main European countries. Subscription-related revenue in Q3 2024 was close to 16%, while hardware sales grew by over 12%, thanks to a large deal in international. In details, both France and the U.K. benefited from the ramp-up in volumes in the open networks and from the new installation, notably in the U.K. In the U.S., the pace of installation started to improve, too, while new initiatives regarding end-user management for our multifamily business helped the recurring revenue growth. And last, in Japan, despite an unfavorable e-commerce environment, the performance was resilient in the quarter. Now I suggest you turn to Slide 18 for the summary of our 9-month revenue. You can see here the same information as discussed before, with EUR 797 million revenue for the period and 0.6% organic growth, broken down by solutions, as well as the details of the subscription-related revenue by solutions. As we said before, we posted a 1.4% organic growth in subscription-related revenue over the period, thanks to the solid improvement in Digital and Lockers, notably in Q3. Back to you, Geoffrey, for the outlook.

Thank you, Laurent. So our third quarter, in '24, was a solid quarter across all our solutions. The acceleration of growth that we have delivered in terms of subscription-related revenue for the Digital Automation platform and our Locker Automation platform in the third quarter, which is up to 13% and 16%, respectively, I think is a testimony to the strength and success of the recurring business model that we presented in June during our Capital Market Day. Our business model is largely recurring, as you know, now with more than 72% of recurring revenues. Geographically, with close to 60% of our revenue coming from the U.S., Quadient is obviously also in a very favorable position to benefit from the stronger performance, generally speaking, at least lately, of the economy in the USA. So now, with the performance from our 3 solutions, which is now in line with our expectation, and a solid positioning in the USA, we head into the fourth quarter confident that our Digital and Locker solutions can continue delivering solid organic growth, in particular in subscription-related revenue. This positive contribution combined, I think, with an expected return to a normalized Mail decline, leads us to confirm our full year guidance of organic growth, both in terms of revenue and in current EBIT at Quadient level. Thank you. And with that, we are ready to take your questions with Laurent and Catherine.

Thank you, Geoffrey. Thank you, Laurent. We are going to start with the questions on the conference call. Operator?

[Operator Instructions] We will take our first question from Maxence Dhoury, BNP Paribas.

My first question will be regarding the state of mind of clients. The first one is, could you do an update on the 2 clients that posed a big project for Digital? Is there any news on this front? And second question, more generally speaking, as you mentioned, and as we can see in the financial markets, the U.S. are quite euphoric in the last few weeks and Europe is quite depressed. Is it something that your sales team see in the real world? Are U.S. prospective clients really keen to invest and to ramp up their software spending and so it would be a good thing for you or, compared to the information you get from your sales team, is it a bit more moderate than that?

Thank you, Maxence. So I'm going to take those questions. These are good questions. So on the 2 large customers that delayed on the software automation platform, the further extension of the scope of what we originally envisioned, I think, a year ago. So a quick update. Those are existing customers. They have the platform installed. They are paying customers and pretty large subscription already, I think, up to EUR 1 million a year, probably for each. So we're happy to have them. And naturally, we are not impacted anymore, as you can see in Q3, from the negative comparison basis that it had created. So we're happy to see now the subscription of the Digital Automation platform to be at double-digit again and for the full 9 months as well. And we do expect, actually, the level of the subscription to continue and to be at likely around the double-digit on the subscription level moving forward. And that's in line with the [ AR ] annualized growth rate that Laurent just mentioned to you earlier. From a business momentum perspective, the second part of your question, it represents in the U.S. or North America, including Canada, roughly 58% of the revenue. And this is where today, not just for the software, but for the 3 businesses, that we have the larger scale for each of those 3 solutions, and for which we had an efficient go-to-market. And if you remember, those businesses were reinforced by the 3 acquisitions that we made in '19, '20, and '21, which was one on the Parcel Locker side with Parcel Pending and the 2 on the software side. Now we have fully integrated those companies, as you know. So we're obviously fully in the best position to benefit from the ongoing activity that exists in the U.S. market. And clearly, we see, in our 3 businesses, higher growth rates for each one of those businesses in the U.S. versus other European countries, clearly today. I spent myself probably 2 months this summer in the U.S. and discussing with the sales guys, we could see that there are good momentum, both in terms of lead generation, demand generation, in terms of the pipeline, the pipeline generation. And as we head into Q4, we have not seen any particular change aside of the one-off impact of the hurricane that Laurent mentioned in Florida, which is behind us now. So we do expect an ongoing momentum to continue in the U.S., and we believe we're pretty well positioned to be able to benefit from that as we get -- if the U.S. economy remains strong in the U.S., then we're in a good position to continue to benefit from that. Did that answer your question, Maxence?

Yes. And maybe a last one for me. It's regarding financing. I was wondering if we should expect news in the coming weeks regarding the refinancing of our 2025 bond, or are you still not in a hurry to refinance this maturity?

No, absolutely, Maxence. It's something we discussed in September for the H1 results that we were actively working on the rest of the refinancing of the bond, and we are still particularly active on that, and we expect that we will be right on time to refinance the bond, maturing early in February.

[Operator Instructions] We will take our next question from Flavien Baudemont, Bernstein.

I have 3 on my side. The first one, you published a Digital revenue growth in a high single-digit range. What do you think is missing today in Digital to reach the 10% organic growth threshold? For the second, you mentioned cross-selling in your presentation. May you give us more detail on that? And for the last one, can we have some insight on how the result of the U.S. election is impacting Quadient's business prospective?

Do you want to take the first one?

Yes. I'll take the first one.

I'll take the next one on the U.S. election.

Yes. So I'll take the first one, if I understand well. So the first one, yes, you're right. We are high single digit for Q3, north of 8%, close to 9%. And as you can see, the subscription-related revenue is above 12%. It's even quite close to the 13%. So there is a mix impact here. I think when we mentioned at Capital Market Day, around 10%. It's around 10% CAGR over the 3 years. And the more basically you continue your track, the less impact will the nonrecurring part have. And the more, I would say, the double-digit part of the subscription will be reflected into the total of the revenue. So it's more timing and progressively having less and less perpetual license and professional services, even if 84% of revenue being already subscription, it's a big step. But yes, you're right. For example, this quarter, the drop in the nonrecurring part still has some impact on the total evolution. And so, we expect that progressively, this is fading even more. And that the constant evolution of double-digit growth in subscription revenue will mechanically drive the double-digit growth at the total top line level of Digital. That's for the first part. The second part, I think, you mentioned the cross-sell. And if we're able to give you some color, absolutely, cross-sell for us, you can look at as being bringing about 2/3 basically of our new customer to the Digital business. Obviously, a lot of them are coming on the midsized company and notably driven by the willingness of digitalization of invoices and transaction documents that we were flowing through the Mail before. That will and continue to be reinforced by all the regulation that are coming in France, but also in Europe. So we expect that it progressively continues to increase. And today, yes, 2/3 of the number of customers, and I would say, probably 35% to 40% of the total Digital booking that are significant for us every year in value come from that channel. And Q3 has been significant, including as well in North America, where it's not only Europe, it's also North America. But this is strong and a strong starting point for our Digital customers.

So for your third question, which is a little bit difficult because I believe no one has a crystal ball about how to predict what the new U.S. administration will do and what impact it could have. I think what we could say factually is that since the election and the result of it, the dollar has reinforced itself against the basket of currencies, in particular, for the euro. And as we are headquartered in France and therefore, reporting our numbers in euro, we should expect if the dollar continued to remain strong to benefit from our U.S. dollar exposure, we are obviously, at 58% of our revenue in this region, well-poised to benefit from this. From a U.S. economy perspective, I will let you probably have a better anticipation than me, but the U.S. economy has been growing faster today. [indiscernible], I think, this year than a lot of other economies, in particular in Europe. And you could see it also in our reported numbers year-to-date, where we have a stronger growth rate in the U.S. than we have in other regions. So we should, as long as the decision coming from the U.S. administration is not impacting this, we should continue to be able to benefit from that same momentum. And as I mentioned earlier, if we look at each of our 3 businesses, today in the U.S., we have a much more resilient Mail market than we have in the other region, and our expectation is that it should remain the same for the foreseeable future. On the software side, generally speaking, after the big wave of IT spending that a lot of companies have done to equip themselves, IT spending did reduce in the last 18 months, 2 years, a little bit, but that has not prevented us to be able, in particular, in the U.S. to accelerate the growth rate and the placement of our software platform to customers. As we look at the 12.9% organic growth rate, for example, in Q3, obviously, the growth rate in the U.S. is much stronger. So as we would expect the U.S. economy to continue to have the same benefit on the digitalization of those companies, we're also well-placed to benefit in the coming quarters from our U.S. exposure for the software activities. On the Parcel Locker side, we had, I think, 2 submarkets that I can give you a little bit color. The first one, which is the primary market for us, which is the residential market, multifamily residential that we equipped. And I'm not so sure what is the result of the new administration that's coming. It could have been potentially the same with another administration. But we do expect in the coming years a boom in new build and new constructions. And we should, obviously, in the U.S. benefit from that for our Parcel Locker solution because, as you know, we equip not only existing multifamily residents, but also we help promoters when they build new constructions. We equip most multifamily residents today when they are finished, and they come up with a Parcel Locker automation platform as well. There's a subsegment on the university that actually has been impacted by the political landscape in '24. There was quite some disruption because of the demonstration that were happening on the U.S. campuses. And that has impacted a little bit our capability to get the mindshare and the focus and attention from the university as customers, as they were more focused on bringing back safely the students in the campuses. We have seen that receding, obviously, and we've seen the momentum picking up again. And especially as the election is behind us, we hope that those U.S. campuses could remain a big portion of our activities in the U.S. As a reminder, we already have more than 250 universities in the U.S. market, and we have the largest market share, we believe, today in this segment. And that should also contribute to the growth of the U.S. market for us.

Maybe I've got a last one. You mentioned that you installed 600 Lockers this quarter. Maybe can you give us more detail on the breakdown of these installations?

Absolutely. 600 Lockers, as you know, are mostly driven by U.S. and U.K. and to a lower extent, France. And you can expect that approximately half comes from North America and a bit less than half from U.K., knowing that in Japan, we are in a more mature mode. We are more on the Phase 3, if you come back to the Capital Market Day slide, where we are more in the increase of usage and, I would say, optimization of the footprint. Sometimes we relocate some machines and some lockers that are not at the maximum. So that's broadly the way we split it between North America and Europe. And we mentioned -- sorry, one last point, we mentioned, yes, as well some hardware that were sold in international operation, and notably Australia, that also is part of that number.

There are no further questions on the line. So I'll now hand you back to speakers for web questions.

Thank you. So we will move to the questions on the web, and we'll stay on the subject of the U.S. with a question on mail and lockers. Do you manufacture lockers and mail machines in the U.S.? And could you be impacted by any tariff enforcement?

So we do not manufacture neither lockers, neither mailing equipment in the U.S. And we do import them from various regions in the world. We have, at Quadient, in the last few years, adapted our supply chain to make sure we could anticipate various evolution on the manufacturing side. First thing, as you know, is we have [ variabilized ] our supply chain by outsourcing the manufacturing to suppliers. We have actually sold our last factory in the Netherlands, the last time was, I think, in 2022 in the summer, which means today, almost probably 95% or more of the units that we place to our customers are sourced through suppliers. So that gives us a lot of flexibility. We have also an engineering team that have designed hardware components and owns, obviously, the IP and the designs of what we outsource. And by doing so, it gives us the flexibility to move from one place to another one to find and source the best cost depending on various, obviously, elements and constraints. Another thing is that today, on the mailing equipment, we do not outsource any more things in terms of assembly in China. So we have exited China from an assembly perspective quite a while ago. And we do have suppliers in the rest of Asia that we're leveraging today. So we are not immediately, obviously, impacted by the potential announcement of an increase in tariff from the U.S. administration for goods that would come from China. So no particular impact from that front to expect. On the Lockers side, we have also diversified our supply chain with manufacturing options that we have sourced and identified both in Asia and also in China. And we usually leverage the Chinese suppliers for European placements of customers, which result in no particular tariff or no impact from China to Europe. And on the other hand, we leverage other Asian suppliers for the U.S. market today. So that's why, today, we're [ still ] in a pretty decent position. We have the flexibility to adapt our supply chain strategies in case things were to change. And if they were to change, we obviously would be impacted like many other companies as well as our competition. So that would be something that would be definitely market-driven.

Still in the U.S., could you share more details on the impact of the hurricane on the organic growth of Mail in Q3? And do you envisage catching up on lost revenue due to the hurricane? And if so, in which quarter? As early as Q4 or in Q1 next year?

I'll let Laurent answer the question if he wants. It's just quite a few questions today on the U.S. market.

So as we mentioned, during Q3, you have an impact on the Mail business. As you could see, the decline is minus 4.1%. In terms of factors to that decline, the first one is for sure the comparison basis from last year. So last year comparison basis, the NBT deal was above EUR 3 million. You could say it's about 2 points of growth that has come with that high comparison basis. The hurricane weighs a little bit less, probably around [indiscernible] 1 point in this total evolution. Part of it will be recovered in Q4. Part of it will not be recovered in -- Q4 or Q1, but part of it will not be recovered. But still, it's mostly the second, I would say, source or second reason why we have such a decline in Mail, the first one being really the comparison basis. So as such, the Q3, if you compare it to Q2 or even to Q1, is a very fair quarter for Mail. Yes, the hurricane did, I would say, prevent from it being an excellent quarter eventually compared to the 2 quarters, Q2 and Q1. And here, we are talking about the comparison base mostly. And yes, you're right, part of that Mail piece, I would say, that has dropped with the hurricane will be recovered, but not all of it. It's going to probably take across Q4 and Q1.

Maybe, Laurent, you have to mention that the Mail activities [indiscernible] has been growing year-to-date despite the hurricane.

Absolutely.

So it's a strong region for the Mail activity.

And it's a strong quarter for North America.

Moving away from the U.S. On the Italian Mail divestment, is there any provision regarding the selling price versus the book value?

So we did, if you remember, over the full year last year, when we reclassified under IFRS 5, the Italian distribution activity for Mail, we obviously had 2 impacts. One was the result, basically, of the company for the year 2023. But another part of the impact that you could see at the time was the fair market value assessment. So this was done, I would say, quite accurately. And even I think we reviewed it over the H1. So at this stage, obviously, it's a Q3 sales here. I'd like to mention that we don't expect a material impact of that. And we'll have to obviously go through the usual audits and the full reporting over the full year. But we don't anticipate any material impact on that. In other words, the divestment price was in line with our expectation.

Still a question for Laurent. How many shares have you been buying back in Q3?

So we bought back -- that's public information, so I have absolutely no problem to share that with you. We've bought back for approximately EUR 9 million of share, and this EUR 9 million have been probably done at an average price between EUR 16 and EUR 17. So if my math is right, I would say, probably EUR 500,000, something like that.

Moving back to the solutions. On Digital, have you hiked the price of your subscription in 2024 in order to catch up for inflation?

So we do -- just more broadly speaking, we do increase price across our solutions, obviously, from time to time and for various reasons. But that's something that we have done, obviously, in the last few years systematically every year. We do that as well on the software side for the new customers for the recurring subscription that we have as well in terms of maintenance activities. Yes.

Still on Digital, is the double-digit growth in subscription seen in Q3 sustainable going forward? And should we expect an improvement in EBITDA for Digital in H2, considering the acceleration of the top line?

As you could see and as we mentioned today, the annual recurring revenue has increased by an annualized 13-plus percent compared to where it was in January. That's a forward-looking indicator for what the subscription recognized revenue would be in the coming 12 months. So implicitly, yes, it should comfort us to that double-digit growth on the subscription-related revenue side for Digital. And I would say, just like we had in H1, a favorable evolution of margin, notably due to that additional revenue that is very high margin and obviously comes back not fully, but for most of it to the bottom line, having quarter-after-quarter an increase in this recurring revenue, SaaS revenue, should help us continuing to improve that EBITDA and obviously meet the Capital Market Day direction over the long run.

And we have a similar question on the Lockers on whether the Lockers performance in Q3 was a one-off? Or is it a sustainable level?

So I think on Lockers, as you could see, we've had a catch-up on the subscription side. I think we were very clear in H1 that the comparison base was hard due to notably the Japanese change -- the contractual change in Japan. This is now over. So basically, we expect that the subscription part clearly continues to develop nicely. And like I mentioned the [ AR ] for Digital, I should mention the growth in terms of installed base and adding 600 Lockers and close to 2,000 since the beginning of the year, obviously, compared to 20,000 base at the beginning of the year, it's about 10%. So we'll continue to have that installed base recognized revenue materializing into the subscription, notably from the open network, but not only now from a hardware perspective, it's by definition, less recurring. We had a nice deal in Australia this quarter. What we can say and that we mentioned in H1 as well is that the shortfall we saw in H1 was notably due to North America, not only, but part of it was due to North America. And even if you can remember, the margin still was not as much as affected as the hardware evolution. But on this hardware evolution, we mentioned, and Geoffrey reminded us today, 2 things: the universities during H1 were in a difficult situation due to the political tension; the second part was on the residential, where we basically have a ramp-up on the commercial, I would say, on the sales team, the renewal of the sales team that is a bit longer than what we initially expected. This is now showing good results in Q3. And so we expect to continue to have a good path on that front as well.

Thank you, Laurent. Thank you, Geoffrey. We have no further questions at this time, so we can close the call. Thank you very much for attending this presentation and for your questions. Our next call will be on the 26th of March 2025 for the full year results. In the meantime, we look forward to meeting some of you in the coming days during our roadshow. Thank you very much and have a good evening.

Thank you.

Thank you.