Quest Holdings S.A. ($QUEST)

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Welcome, and thank you for joining the Quest Holdings conference call and live webcast to present and discuss the first quarter 2026 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, ladies and gentlemen. My name is Alexandros Roustas. I'm the Investor Relations Officer of Quest Holdings. I'm joined today by Mr. Apostolos Georgantzis, our Group CEO; and Mr. Markos Bitsakos, our Deputy CEO and CFO. Today, we are presenting the financial results for the first quarter of 2026, the 3-month period ended on 31st of March 2026, and we'll be happy to answer your questions at the end of the call. I will now pass the microphone to Mr. Markos Bitsakos for his opening remarks.

Good afternoon, everyone, and thank you for joining us. I am Markos Bitsakos, Deputy CEO and CFO of Quest Group. The first quarter was a solid and encouraging start to the year for Quest Group. We delivered consolidated revenue growth of 11.4% year-over-year, and we grew our earnings before tax by 10% and earnings after tax and noncontrolling interest by 13.8%, reaching EUR 10.4 million. These results reflect the continued execution of our strategy and the resilience of our core business segments. The 3 main drivers of our first quarter performance are the Apple ecosystem, both wholesale and retail, the IT services by Uni Systems Group and ACS Postal Services. Further analysis will follow by Alexandros Roustas. I should also flag one area of challenge, the Renewable Energy segment, which recorded very limited revenue in the first quarter of '26. Following the divestment -- the divestment of the vast majority of our photovoltaic parks in 2025. Of course, this was expected and is already reflected in our full year planning. The comparison to the first quarter of 2025 is therefore not meaningful as a trend indicator, but it simply reflects the completion of our energy sector repositioning. Let me now turn to the detailed financial performance for the first quarter of the year. Total consolidated revenue reached EUR 365.5 million, an increase of 11.4% year-over-year versus EUR 328 million in the last quarter of 2025. Growth was broad-based, led by IT services, Postal Services, and Commercial Activities. Consolidated EBITDA amounted to EUR 22.1 million, is up by 4.3% year-over-year versus EUR 21.2 million in the first quarter of '25. The blended EBITDA margin stood at 6.1%. Consolidated earnings before tax reached EUR 15.2 million, an increase of 10% versus last year, which stood at EUR 13.9 million. EBT margin was 4.2%, broadly stable year-over-year. Earnings after tax amounted to EUR 11.4 million, up by 14.3% Earnings after tax and noncontrolling interest, which is a figure attributable to Quest Holdings shareholders reached EUR 10.4 million, an increase of 13.8%. Overall, the first quarter of 2026 results demonstrate consistent top line growth, solid profitability from our main operating segments and continued improvement in the bottom line for our shareholders. On the balance sheet side, Quest Group closed the first quarter of 2026 with cash and cash equivalents of EUR 152 million on a consolidated basis. After accounting for total borrowings, the group's net cash position as of March 31 stands at EUR 65.2 million. I would note that the net cash position at year-end 2025 was higher at approximately EUR 1007 million. The reduction to EUR 65.2 million at the end of the first quarter reflects the typical seasonal working capital buildup that occurs in the first quarter, particularly in the Commercial Activity segment, and it is fully in line with our expectations. Moreover, in the first quarter, we invested approximately EUR 24 million in Fourlis. We expect net cash, except for new investments to recover at the second half of the year as working capital normalizes. Our total availability in liquidity, means cash plus undrawn committed credit facility remains comfortably above EUR 200 million, providing ample capacity for both operational needs and strategic initiatives. Capital expenditure in the first quarter of the year was modest and broadly in line with our phased annual plan. The full year CapEx is budgeted at approximately EUR 60 million with a meaningful portion reserved for potential acquisitions and new investment. With this overview of our performance and financial position, I will now hand over to Alexandros for the detailed segment review. Thank you.

Thank you, Markos. Let me now take you through each of our reporting segments in more detail. First of all, the commercial activity segment, which includes the Apple network, which is companies iSquare and iStorm; the IQT Group, which is Info Quest Technologies and subsidiaries; the Clima sector, which is [ G.E. Dimitriou ] and Quest Clima and companies such as Quest on Line, and Benrubi reported aggregate revenues of roughly EUR 245 million in the first quarter of 2026 compared to roughly EUR 225 million in the first quarter of 2025, which is up by 8.7%. EBITDA for the segment was EUR 8.2 million, up by 5.4% year-over-year with an EBITDA margin of 3.3% EBT reached EUR 3.9 million, up by 8.5% versus the first quarter of 2025. Within the segment, the key highlights are the Apple network, which is, as I said, iSquare wholesale and iStorm retail drove the majority of the segment revenue and showed strong momentum across both products and geographic markets. iStorm's 19 store network, 15 stores in Greece and 4 in Cyprus, continue to perform well with Cyprus representing a strategically important and high-performing market. The Clima sector, which is [ G.E. Dimitriou ] and Quest Clima, typically records a weak first quarter due to the seasonality in the heating and cooling markets. We expect a strong recovery from the first -- second quarter onwards. Benrubi, our 70% owned subsidiary contributed positively to segment profitability, reflecting the growing and stable contribution of this acquisition. Now going to IT Services, which is Uni Systems Group, including its international subsidiaries and Intelli, a company acquired some years ago, reported revenues of EUR 80 million in the first quarter of 2026, up by 23.4% versus the first quarter of 2025, which is EUR 64.8 million. This is an exceptional growth rate and reflects the continued execution of a high backlog of complex IT contracts. The segment EBITDA reached EUR 7.1 million, an increase of roughly 15% year-over-year with an EBITDA margin of 8.9%. EBT grew by roughly 22% to EUR 5.8 million with an EBT margin of 7.2%. Uni Systems, continued to benefit from strong demand for digital transformation, cloud infrastructure and large public and private sector IT integration projects. The pipeline remains robust, and we expect this to continue. Postal Services, ACS. The Postal Services segment, ACS, reported revenues of roughly EUR 40 million in the first quarter of 2026, up by roughly 12% versus the first quarter of 2025. It's the strongest quarter growth after the COVID era. Segment EBITDA reached EUR 7.1 million, an increase of roughly 19% year-over-year, making ACS the segment with the highest absolute EBITDA contribution in the first quarter of 2026. EBITDA margin improved to 17.7%, up from 16.6% in the first quarter of 2025, and EBT grew by roughly 12% to EUR 5.4 million. Growth was driven by continued expansion in e-commerce parcel volumes and by network efficiency gains. The fundamentals supporting ACS's growth, rising e-commerce penetration and the expansion of our locker network remains -- still remain intact. Hence, the Renewable Energy segment reported minimal revenue of roughly EUR 300,000 in the first quarter of 2026 compared to roughly EUR 2 million in the first quarter of 2025. This sharp decline reflects the divestment, as Markos said previously, of approximately 36.7 megawatts of photovoltaic parks completed in 2025 and is fully expected. Quest Energy currently retains approximately 8 megawatts of capacity and has a portfolio of greenfield renewable projects under development. The segment recorded a small positive EBT of roughly EUR 200,000 in the first quarter of 2026. And we should say here that we remain selective on new investments in this segment given current market conditions. I will now pass the microphone on to Mr. Apostolos Georgantzis for the outlook.

Good afternoon from me as well. I'm Apostolos Georgantzis, Quest Holdings Group CEO. As Markos and Alexandros have outlined, the first quarter of 2026 was a positive quarter across our principal operating segments. Revenue grew by double digit at around 11%, while EBITDA grew by 10% and earnings attributable to our shareholders grew by 13.8% year-over-year. Both ACS and Uni Systems, delivered standout performances, while the commercial activity segments remain on a solid growth trajectory. We entered the second quarter with a clear momentum, a healthy balance sheet and a well-defined strategic agenda. The second quarter is historically our second strongest quarter of the year, accounting for approximately 23% of our full year revenue and the current trading supports our confidence for growth. Let me now provide you our current view by segments for the remaining and the whole year 2026. Regarding the Commercial Activities for the full year 2026, we expect continuous growth -- sales growth in Commercial Activities. The Apple's ecosystem remains a multiyear structural growth story, and we're well positioned across both wholesale with iSquare and retail to iStorm to get this growth. We also expect Benrubi to deliver a meaningful full year contribution. At the same time, the Clima sector, following expected seasonal quarter 1 slowdown should return to positive profitability during the second quarter. Our focus within this segment is on improving EBITDA margins as we see a gradual path for improvement as we optimize the cost structure. Regarding the second sector, which is IT services, mostly regards to Uni Systems. Uni Systems Group continues to operate with a high backlog of contracted work and projects exceeding EUR 650 million as a pipeline of growth and new opportunities. We expect double-digit revenue growth for the full year with profitability growing in line. The demand environment for complex IT integration and digital transformation projects, both in Greece and internationally remains strong, and we are investing to maintain our competitive position in this space. Regarding the third sector, which is Postal Services and ACS. In this sector, we expect accelerated growth for ACS revenue and EBITDA during 2026 versus what happened in the previous year, driven by e-commerce volume growth and continued network efficiency. Finally, regarding the last sector, the renewable energy sector, Quest Energy's revenue contribution will remain minimal for the remainder of 2026 following the park -- the divestments from the photovoltaic park at the end of 2025. This segment is focused on developing in greenfield new renewable portfolio, but not at a large scale. We remain disciplined and selective in any new energy investments due to the situation in the energy market. And the estimated figures regard for the whole year to about EUR 1 million in revenue with about 15% EBT margin. Now going for the whole group. On a consolidated basis, our guidance for the full year is the following: we expect a slight revenue growth versus 2025 in revenue, while EBITDA and EBT to be similar levels -- at similar levels to the prior year. It should be noted, however, that the divestment from the energy sector last year negatively affects the comparison to 2025 in the EBITDA level by about EUR 8 million. Based on the continuous operation, both EBITDA and EBT -- on the continuous operation, both EBITDA and EBT are expected to grow. The strong first quarter performance, particularly in IT and Postal Services reinforces our confidence for this guidance. These estimates for 2026 are based, of course, on the assumptions that there will be no prolonged adverse development in energy prices, basic goods and consumption as a result of the war in the Middle East. Our financial position is robust. Our net cash position of more than EUR 60 million at the end of the first quarter and the available total liquidity exceeding EUR 200 million gives us the capacity to pursue both selective inorganic growth as well as to continue rewarding our shareholders with an attractive dividend policy. Let me pass you back to Alexandros now.

Thank you, Apostolos. That concludes our prepared remarks on the first quarter of 2026 results for Quest Holdings. We are now happy to open the floor for your questions. Please feel free to ask about any aspect of our financial performance, our segments, our balance sheet or our outlook for the remainder of the 2026.

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

I would like if you could elaborate a bit on the picture you've been seeing in demand trends after the war, if you've seen any impact in consumption and Commercial Activities. I assume IT services have a big backlog, so are not as affected. But what about commercial courier e-commerce? If you could give us a picture there? And what are the key risks that could risk your guidance for 2026? Would it be the energy that you said or mostly the decline in consumption? I also have a question on the IT segment. Why the EBITDA margin was dropped in Q1 and if this is something that we should see in the quarters ahead or it was depending on the mix of product? And I was also wondering if you could say anything about the rent division. You have a lot of cash piled up there. And what are you going to do if you do not find any projects there?

Okay. Natalia, thank you for all your questions. I'll try to -- we'll try to respond if we forget something, please ask it again.

Yes, of course.

So starting from the commercial business, we see a flat demand during the first quarter. I would say, in some months, is also low demand. I mean, less than it was last year. So the landscape, I wouldn't say that it's very promising after the war. Having said that, we managed, as you see, to overcome this and still managed to grow mainly by gaining market shares. We don't know how this evolves during the year. We hope that we will remain at least at this stage of single-digit growth or low double-digit growth. I think that what we are doing in this landscape is very good. Now regarding the risks and threats, as you mentioned, first of all, it's a decline in demand, a higher decline in demand than what we've seen during the first 4 months. We are referring to the 3 months, but the landscape doesn't change a lot during the 4 months. That's why I'm referring to 4 months. A risk also comes from our expenses because due to the war or due to the increase in fuels, we see that the expenses are growing. And we must be very careful because this could be a threat for the low lines, the EBT and the EBITDA. So we are very careful about that, and we are watching it very close. And it's not only the transportation costs, but are also payroll costs, utility costs, rents, everything. So more or less, this is the case about the commercial sector. Now regarding the courier sector, Apostolos, I think, would address that.

Yes. Thank you, Alexandros. Just to add to what Alexandros said, we gave you the situation for the first quarter. We have an idea also for the -- for April until today. So, so far, we are managing to cope with increased energy costs for the group as a whole. We believe that these levels are, let's say, manageable, but we are not sure exactly what is going to happen in the future. This depends a lot on the -- at the moment as well, energy prices are subsidized partly by the government. As you know, the petrol price in the gas station. Therefore, we don't see the real effect that happens -- the real prices of petrol have gone at a much higher level. Now we assume that this situation is going to gradually fade out, and we're going to come back to a normality. Otherwise, it might be possible that if we see a continuation of these petrol prices at these levels or at higher levels, this would affect also the consumption and would affect all the market, not just ourselves. That's why we're a bit cautious on that with this respect. Apart from that, with this difficult environment, we are managing to do quite well and growing in most of our sectors. And one of these main sectors is also courier sector, ACS. It's driven by both the growth of e-commerce, but also by gaining of some market share of the company and operating with having executed significant investments already, both in the hub, which we have the automated hub that we have as well as in the last mile with the rollout of the lockers. We seem to be growing on a quite efficient way, managing also to improve the margins. So we are also positive for this segment that will continue to grow for the rest of the year. Taking in mind, of course, that the risk there that we mentioned before would be affecting also the consumption should this situation continues or evolves. Now going to the cash question that you had, that we have a lot of cash available. It's correct. We already made an investment in Fourlis of about EUR 24 million during -- most of it was during the first quarter. We expect also to give an increased dividend, as we explained in our previous call, of about just above EUR 40 million during the next month. The general assembly of the company is expected on the 10th of June. And at the same time, we have open eyes, seeking new investments. Should we see an opportunity, we will be able to grab it quite quickly. Let me also pass now to Markos to give you some explanation about the drop of EBITDA in the IT services sector that you mentioned just for the first quarter. Markos?

First of all, let me clarify, we are not talking about the drop in EBITDA as an actual number, which has increased by 15% versus last year. We are talking only about the EBITDA margin, if I'm not mistaken. So the EBITDA margin has a difference year-over-year of 70 bps, not even 1%. So this is not a huge difference. And it's logical with a company like Uni Systems having to deploy hundreds of IT projects within more than 1-year period. So it is an often symptom, let's say, on the EBITDA margin when you deploy the projects. We believe that in a full year time, I mean, by the closing of the current year, the EBITDA margin will go up again. I hope I have answered your question. If you want something else, please tell us.

This is understandable, I think. Yes, I can understand it. It's the mix of the costs going in. I was just wondering if it was something that had to do also with the costs going up, and that's why we should expect it to remain lower for the remainder of the year. That was mostly on the IT, my thoughts, is it something sustainable because of the cost increases we were discussing.

No, this is not the case. The costs are quite similar on what we used to have last year. But don't forget that when you pursue an increase in revenues like Uni Systems, which has surpassed an increase of 23% in this first quarter, you cannot be very selective on the EBITDA margin of each particular project. So the more revenue you want, you have to be less selective, let's say, on the EBITDA margin. Overall, we have quite a good EBITDA growth of 15%...

Yes, yes. Great.

Just to add up to Markos's reply also that -- just to clarify that, for example, Uni Systems and IT services, I would say probably that the least affected by energy prices because the effect of energy prices in the cost structure is minimal here. So there's no effect in this segment by energy prices.

Okay, great.

If there is something, it's very minimal.

[Operator Instructions] 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.

Okay. Thank you. Dear all, we would like to thank you for your participation and the continuous interest in Quest Holdings and its prospects. We are encouraged by the first quarter of 2026 performance, and we remain focused on delivering on our commitments for the full year. We look forward to sharing our first half results with you in due course. I wish you to have a nice afternoon. Thank you again.

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