Quest Holdings S.A. ($QUEST)

Ladies and gentlemen, thank you for standing by. I'm Costantinos, your Chorus Call operator. Welcome, and thank you for joining the Quest Holdings conference call and live webcast to present and discuss the full year 2025 financial results. [Operator Instructions] At this time, I would like to turn the conference over to Quest Holdings management. Gentlemen, you may now proceed.

Welcome, ladies and gentlemen. My name is Alexandros Roustas. I'm the Investor Relations Officer of Quest Holdings. And as usual, I'm sitting here with our CEO, Mr. Apostolos Georgantzis and our CFO, Mr. Markos Bitsakos. Today, we are here to present you the 12-month period of 2025 financial results and answer your questions. Now I will give the microphone to Mr. Markos Bitsakos for his opening remarks.

Good afternoon, everyone, and thank you for joining us. I'm Markos Bitsakos, Deputy CEO and CFO of Quest Group. 2025 was another strong and strategically important year for Quest Group. We delivered, once again, record performance across all key financial metrics supported by disciplined execution, diversified revenue streams and strong market positioning across our core sectors. While the first half of the year presented operational and market challenges, our teams responded precisely. The fourth quarter was strong, especially regarding EBITDA generation and accelerated our full year EBITDA performance beyond initial expectations. Most importantly, we closed the year with strong growth, improved profitability in continued operations and a very solid net cash position, reinforcing the resilience of our business model and of course, our ability to execute consistently. Let me briefly outline the primary drivers behind our performance in 2025. First, the IT sector delivered exceptional momentum both domestically and international. Demand for complex integration projects increased significantly driven by the quick recovery and [ resilience facility ] as well as broader European digital transformation initiatives. Our technical expertise and execution capability position us strongly in this environment, enabling us to secure and deliver high-value projects that supported both revenue growth and margin expansion. Second, we continue to benefit from sustained strength across the Apple ecosystem. The iPhone remained the principal growth engine complemented, however, by solid demand across the broader product rates. This translated into strong results for both iSquare, which is our wholesale distribution arm and iStorm, our retail network, which continue to expand its footprint. Importantly, this growth is not short term. It reflects a multiyear trend of consistent demand and strong brand positioning. Third, the additional Benrubi expanded our commercial portfolio and contributed positively to consolidated EBITDA and earnings before tax from its first year of integration. This acquisition aligns with our strategy of disciplined value accredit expansion in the complementary business segments. Fourth, our courier business experienced a moderate recovery from international parcel volumes that occurred during the final quarter of the year. This supported improved margins and profitability for ACS contributing to the strong year-end finish. Finally, reflecting both the profitability and confidence of the group's financial strength we distributed in 2025 an increased dividend of EUR 0.30 per share, which stands for 4.2% yield totaling approximately EUR 32 million, I repeat during mid-2025. Let me now turn to the financial performance of the full year. Total consolidated revenue reached approximately EUR 1.5 billion, representing a year-over-year increase of 10.9%. Growth was primarily driven by commercial sector performance and the inclusion of Benrubi from February onwards. Consolidated EBITDA amounted to EUR 107 million is up by 17% year-over-year, exceeding our initial forecast. Consolidated earnings before tax is EUR 71 million, increased 9.3% compared to 2024. Earnings after tax and noncontrolling interest stood at EUR 48 million marking a 2.2% decrease year-over-year. This drop derives from two main reasons. The first and Obviously, the most important is the minority rights, which is 30% in Benrubi and 20% in ACS. The minority rights stood for EUR 3.7 million last year in 2025. And lastly, the increased taxes. The amount of the increased taxes is about EUR 3.5 million. So altogether, exceeds the EUR 7 million. Overall, these results demonstrate consistent top line expansion accompanied by disciplined cost management and improved operating leverage. As always, we closely monitor several core operational and financial indicators such as the blended EBITDA margin, which improved to 7.3% up from 6.9% in 2024. And the return on equity, which is strengthened to 19.2%, reflecting efficient capital deployment. Let me now focus on our balance sheet, which is a very important and key area of our strength. Quest Group finished 2025 with net cash of EUR 107.6 million compared to EUR 82 million at the end of 2024. This strong net cash position enhances our strategic flexibility enabling continued investments, disciplined acquisitions and ongoing shareholder returns. The significant increase in net cash was driven by a EUR 36 million cash inflow from the sale of the majority of our photovoltaic parks from Quest Energy, but also through the strong cash flow from operations. Additionally, capital expenditure stood at EUR 39 million, which is EUR 18 million below the initial budget. EUR 10 million of this decrease is related to lower ACS CapEx due to slower local rollout and delays in other infrastructure deployments. The remaining reflects postponed smaller acquisitions with Quest Energy -- within Quest Energy and Uni Systems. Overall, we believe our financial position remains robust and provides a solid foundation for continued growth. With that overview of our performance and financial position, I will now hand over to Alexandros for the detailed sector review. Thank you.

Thank you, Markos. Now diving deeper into our segments. We observed that the commercial activities which consists of several companies: Info Quest, iSquare, iStorm, Quest on Line, Clima Quest, GED, FoQus, Team Candi, IQT Cyprus and Benrubi as of February 2027 continued to grow by roughly 12% at the sales level, while EBIT increased by 24% year-over-year mainly boosted by Benrubi integration and the decreasing interest rates. IT services sector sales, which is mainly consists of Uni Systems, also improved by roughly 11%, while its EBITDA grew by about 30% mainly augmented by improved operational efficiency. Postal services, which is ACS. Sales of Postal services increased by 3.6%, while also EBIT grew by about 8%, assisted by improved operational efficiency due to the new hub and last mile automations. Sales growth was driven purely from the second half of the year. And last but not least, Quest Energy segment sales were lower by roughly 6% due to adverse weather conditions and curtailments with lower profitability before taxes, mainly due to the EUR 4 million one-off balance sheet adjustments caused by the sale of the photovoltaic parks. Now let me pass over to Apostolos to provide the outlook.

Thank you, Alexandros. Good afternoon from me, too. I'm Apostolos Georgantzis, Managing Director of the group. As already has been explained by Markos and Alexandros, most of our segments grew during 2025. EBITDA grew double-digit growth, while Q4 was strong, allowing us to be optimistic for 2026. In more detail per sector, the outlet for the whole year 2026 is the following. Regarding the first sector, which is the commercial activity sectors, we estimate growth in sales and a similar or slightly lower EBITDA caused by increased operational costs. Regarding the IT services sector, this segment is continuing to be positively affected by strong demand in IT services, while it has a high backlog of signed projects exceeding EUR 700 million. In this segment, continuation of sales and profitability growth is estimated for the whole year 2026. Going on to the Postal Services sector. Our estimation for 2026 includes accelerated growth in sales and profitability mainly driven by e-commerce growth as well as increased market share. We continue to invest in developing our own last-mile locker network which currently amounts for about 1,400 lockers. Finally, our renewable energy production sector, our estimation is for a strong decline in sales and profitability due to the sales of more than 90% of the parks during 2025. Our estimation regarding [ Fourlis ] continuous operations stands at about EUR 1 million in sales and about 15% EBITDA margin. Now going on the consolidated basis, initial estimations for the whole year 2026 include a slight sales growth and similar or slightly lower EBITDA and EBIT versus 2025. Slight growth in sales and profitability is estimated for the continuous operations. These estimates, however, assume that there would be no prolonged developments in the energy prices, basic goods and consumption as a result of the war in the Middle East. Quest Group current position is solid with above EUR 200 million in cash and available credit line lines, allowing us to continue our planned growth investments as well as to endure hardships. Now let me pass back to Alexandros.

Okay. That was our brief overview for the full year of 2025 as well as the outlook for the full year of 2026. We are happy to answer your questions.

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

Yes, I would like to ask what are your current year CapEx plans? Given that you are a bit delayed also in your ACS CapEx, what is the rollout there we should be expecting for 2026? And if you could elaborate a bit on your investment strategy regarding the stake in [indiscernible], you have been taking. If there is something behind this, we could discuss. And I also have a question on commercial activities. You're saying that for 2026, the outlook is for sales growth, but fairly constant or a bit lower EBIT. Where does the EBIT lower come from? What would be the trigger for this?

This is Markos. I will try to answer the first part of your question about the CapEx that we are planning for the current year. So the group CapEx is planned to be approximately EUR 60 million. Now nearly half of this amount represent a strategic placeholder for potential new investments by Quest Holdings. Have in mind that as we speak, we have already invested more than EUR 20 million out of this EUR 30 million that I just mentioned. We have invested more -- a little bit more than EUR 20 million for the acquisition of Fourlis' 10% participation. Apostolos will later elaborate further on the strategic plans that we have and the reasoning about this acquisition. Additionally, we have ACS that -- we expect ACS to account for around EUR 25 million new CapEx, primarily directed towards continued local network expansion. And there is also a new hub in Thessaloniki that we are aiming to construct in the current year. So more or less, this is how the new CapEx is split. Almost half of it is as -- for potential new investment and more or less, the other half is for ACS CapEx.

This is Apostolos. To adapt just to Markos' feedback about CapEx, I would like to adapt that if you understand from what Markos said, most of this CapEx regards to growth CapEx. Actually, the group historically needs a relatively small CapEx has relatively small CapEx requirements for a running CapEx which means that most of the investments are expected to bring some future growth in the group. Now going to the second question about the investments and the rationale behind the Fourlis participations, I would like to mention the following. Quest Holdings is a holding company by its name and nature. Today, the group core activities include distribution of IT products, telecommunication equipment, electrical appliance as well as IT services and Courier services. Over the time, Quest has expanded through a various mix of organic growth, acquisitions as well as selecting divestments, redeploying capital into new opportunities. We recently divested the majority of the energy sector. Additionally, we expect to divest soon from the Courier services sector. The outcome of this investment, divestment will create increased liquidity to the group. Part of these proceeds from the divestments will be returned to the shareholders, while the remainder will be reinvested to new business activities. We consider therefore that Fourlis, being a good company with a fresh professional management and serious and reliable shareholders with similar values and cultures to Quest operating retail sectors where we currently do not have a strong presence. We therefore believe that over the medium and long term, it has good prospects for improved financial performance, which we expect to be translated to a positive return for our investments. And this is a basic rationale for investing to Fourlis at the moment. We already got 10% of the company, and we believe that it has good prospects of increasing its operational and organic footprint and numbers and therefore, bringing us a good return to our investment. Let me pass now to Alexandros to give you feedback about the commercial activities question.

Now regarding the commercial sector, first of all, we expect elevated revenue compared to last year. And we, however, expect that we may not reach the same EBITDA or it may be flat and a bit lower. Just give me a second please. Compared to the -- You're talking about the forecast. Correct?

Yes. The forecast for 2026.

About the forecast. Okay. So the reason we expect a similar EBITDA like last year is the fact that costs are increasing and the war in Iran has accelerated this increase of costs and including transportation costs, but also other costs such as payroll costs are increasing. Therefore, and we are afraid that this may not allow us to increase our profitability line as much as the revenue line.

More like a cautionary statement outlook, I would say, as I understand. Okay. Great.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Apostolos Georgantzis for any closing comments. Thank you.

Dear all. We would like to thank you for your participation and interest in our company and its prospects. We wish you to have all a nice afternoon. Thank you. And a nice Easter as we are just entering the week of Easter Sunday coming at the end of the week. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling. Have a good afternoon.