Quest Holdings S.A. (QUEST) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I am [ Mina ] your Chorus Call operator. Welcome, and thank you for joining the Quest Holdings conference call and live webcast to present and discuss the 9 months 2025 financial results. The event today provides the opportunity for participation via audio conference and live webcast where a presentation deck is provided for your convenience. [Operator Instructions] The conference is being recorded. [Operator Instructions]. At this time, I would like to turn the conference over to Quest Holdings management. Gentlemen, you may now proceed.

Welcome, everybody. My name is Alexandros Roustas, Investor Relations Officer of Quest Holdings. As usual, I'm joined today by our CEO, Mr. Apostolos Georgantzis; and our Deputy CEO and CFO, Mr. Markos Bitsakos. We are here to present the financial results for the 9 months of 2025 and to answer your questions. I will now hand over to Mr. Markos Bitsakos for his opening remarks.

Good afternoon, everyone, from me too. During the first 9 months of the year, Quest Group delivered double-digit growth in sales, EBITDA and earnings before tax. Earnings after tax and noncontrolling interest increased by 2.9%, reflecting mainly the impact of the 20% minority interest in ACS. Now looking at our business segments. Revenue growth was primarily driven by commercial activities and IT services. Commercial activities benefited from strong performance in the Apple ecosystem, Info Quest Greece, Clima sector and the Benrubi addition. On the other hand, IT services growth was supported by continued demand from the Greek public sector digital transformation initiative as well as contracts with EU institutions. EBITDA growth was underpinned by the strong performance of IT Services segment, the integration of Benrubi and the Apple ecosystem. Meanwhile, the Courier segment delivered mid- to high single-digit EBITDA growth, while the Energy segment recorded a slight decline, mainly due to adverse weather conditions and the Greek curtailments imposed to safeguard the system stability. According to our published financial statements on a consolidated basis, key results for the 9-month period of 2025 are as follows: Group revenues exceeded EUR 1 billion, up approximately 10% year-over-year. EBITDA amounted to EUR 73.8 million, which is an increase of 13.4% versus 2024. Earnings before tax totaled EUR 51.1 million, up 17.8% year-over-year. Earnings after tax and noncontrolling interest amounted to EUR 33.6 million, representing a modest 2.9% increase. This smaller increase in earnings after tax and noncontrolling interest relative to earnings before tax is mainly attributable to the impact of minority interest in ACS and Benrubi. I remind you that in ACS, we now record a 20% minority interest following its partial sale to GLS. And in Benrubi, 30% minority interest is held by the Benrubi family. Now a few highlights about the performance by business segment. With the exception of Quest Energy, which recorded a slight decline, all other segments delivered year-over-year growth in both sales and earnings before tax. Revenue growth was led by Info Quest Group, the Apple ecosystem, Unisystems and Benrubi, while the earnings before tax growth was driven primarily by Unisystems, Benrubi and the Apple distribution business. Of course, Alexandros later on will further elaborate on the business segments. Now going to the balance sheet and cash position. As of the end of September 2025, Quest Group reported a net cash position of EUR 1.5 million compared to EUR 45 million net debt in September 2024 and EUR 82 million net cash at year-end of 2024. The decrease from December '24 is fully aligned with our seasonal working capital cycle and consistent with the historical patterns. Moreover, the Benrubi acquisition utilized approximately EUR 31 million, including its net debt. The dividend distribution amounted to EUR 32 million, and we had also additional CapEx across the group totaled EUR 10.3 million. Now let me pass back to Alexandros to further comment on the segment results.

Thank you, Markos. Now diving deeper into our segments, we observed that the commercial activity segment consisting of companies like Info Quest, iSquare, iStorm, Quest on Line, Clima Quest, GED, FoQus, Team Candi, IQT Cyprus and the new addition of Benrubi as of the 1st of February 2025, continued to grow by roughly 12% at the sales level, while EBT increased by roughly 18% year-over-year, mainly boosted by Benrubi's integration, Apple product sector improved performance and a decreasing interest rates. IT services sector sales, which is mainly Unisystems, also improved by roughly 11%, while its EBT grew by about 28%, assisted by an improved performance in the project mix. Postal Services, which is ACS, grew by roughly 2% and EBT grew by about 8% at an improved pace versus the first half period, propelled by an improved Q3 in which sales grew by more than 5%. Last but not least, Quest Energy segment sales stood at slightly lower sales by about 6% due to adverse weather conditions and the curtailments of the grid with flat profitability before taxes assisted by lower interest rates. Now let me pass over to Apostolos to provide the outlook.

Thank you, Alexandros. Good afternoon from [indiscernible]. I'm Apostolos Georgantzis, Managing Director of Quest Holdings. As Markos and Alexandros have previously stated, most of our segments experienced growth during the 9-month period. Sales, EBITDA and EBT also double-digit increases, which gives us greater confidence that this trend is continued to continue -- is likely to continue for the rest of the year. In more detail by sector, the outlook is as follows. Regarding the commercial activity sector for the full year 2025, we estimate growth in sales and higher growth, double digit in EBT, assisted also as in the 9-month period by the acquisition of Benrubi and the drop of interest rates. Regarding the IT services sector, this segment continues to be positively affected by strong demand in IT services, while it has a high backlog of signed projects exceeding EUR 700 million. Double-digit growth in sales and improved profitability are estimated for the whole year. Going to the Postal Services sector. Our estimates regarding -- regard single-digit growth in sales and profits at increased pace versus the reported in the 9-month result. We continue to invest in developing the last mile locker network, which currently exceeds 1,250 lockers, while currently about 50% of deliveries are performed through this locker network. Finally, for the renewable energy production sector, our estimation for the whole year is for a slight decline in sales and similar or slightly lower to last year EBT. However, the divestment of the 90% of the photovoltaic parks will lead to a significant change in this segment in the future. Now summing up all of this. On a consolidated basis, our estimation for 2025 is positive for revenues and profitability. We once more reiterate our estimate for the growth of 2024, while EBITDA is estimated to surpass EUR 100 million. This estimation has been also validated by the course of the 9-month period. Quest Group's currently cash position is solid, allowing also to endure any hardships as well as to pursue any opportunities for new investments. Now let me pass back to Alexandros.

Thank you, Apostolos. That was a brief overview for the 9 months of 2025 as well as the outlook for the full year. We are now happy to take your questions.

[Operator Instructions] The first question comes from the line of Svyriadi Natalia with Eurobank Equities.

I hope you can hear me. Congratulations on the very strong quarter. I have a couple of questions. I will -- I wanted to ask something on the commercial activities and the ACS. So on commercial activities, I was trying to figure out the EBITDA on a like-for-like basis because Benrubi was added, and this is very improving, especially our margins. But I got the feeling that the like-for-like business, excluding Benrubi, was down in the quarter. And I was wondering what was the reason on this reduction in EBITDA, if this is the case in Q3. That was a question on commercial activities. And then I have a question on the ACS. If you could give us some numbers for the CapEx you're looking for the lockers for this year? And maybe if you have an estimation for next year. Obviously, this year is almost through, but if you're doing any more CapEx until the end of the year on that? And maybe a more general question on the macro environment in Greece and what you've been seeing in the international markets also abroad, like in Romania, if you could give us some highlights there.

Okay. Natalia, this is Alexandros. Thank you for your question. So Benrubi results, consolidated results for -- since February that we consolidate, it's EUR 15 million on the upper line, which is sales, EUR 3 million at the EBITDA line and EUR 2.8 million at the EBT line. So you're right that [indiscernible] was not that good on the Commercial Services segment, but for 2 main reasons. One is the Epafos business, which last year produced an extraordinary EBITDA due to special projects that they served and they were not recurring. So now they are back to their normal numbers. And the second reason is the Romania business, which didn't -- although it expansive [indiscernible] that it produced last year. So these are the main factors that affected the results.

Okay. So the ex-Benrubi number was from nonrecurring items. So if I understand correctly, mostly.

Exactly.

That we had last year. Okay. Great.

Now Natalia, this is Apostolos. The second question was about ACS and the CapEx. The CapEx for the locker network, if I am correct.

Yes, yes.

The line wasn't so good. Just to confirm.

Yes, yes. Okay.

The question was what is the expected CapEx for the end of the year? And what is the estimation for next year?