Quick update on Quadient (and a small buy)

After some news regarding Quadient I bought some shares recently.

This is not investment advice. Please read the disclaimer.
I currently own shares (economic interest) in mentioned or related companies.

The company released several news recently:

• Quadient continues reshaping business portfolio with divestment from Graphics activities in Australia and New Zealand (news)
  • probably a good sign
• Parcel Pending by Quadient Finishes 2020 with Record-Breaking Number of Installations (news)
• Quadient upgrades its full-year 2020 outlook:
  • Organic sales decline of around 8% yoy (vs. ~9% previously stated)
  • EBIT in the range of €140m to €145m (unchanged)
  • FCF above €130m (vs. above €100m previously stated).
    • The stock reacted positively, increasing from €17 to as high as €19 intraday on Jan 22nd.
      • My buy order was executed on Monday morning (25th) @ €17.33. The low was at €16.20.

In November, I wrote about the company in my Quicky on Quadient and did not buy the stock, regretting it only a few days later after the bid for its CXM.
This background might give rise to a personal bias!?

Recent news were that InPost, a polish company strongly riding the Polish e-commerce boom (26% revenue from Allegro) with more than 8k parcel locker stations in Nov (according to wikipedia), will list in Amsterdam. According to bloomberg, InPost shareholders seek up to $3.9bn in Amsterdam IPO, targeting a valuation up to €8bn. In the current market environment everything seems possible and 1bn are already secured. Maybe the Polish market (and others) offers great opportunity and maybe the managemnt team has exceptional capabilities, but it strikes me as a lot of money, even during an pandemic fueled e-commerce boom and abundant liquidity.

• Maybe InPost’s targeted valuation is vaguely right …
  • then Quadient’s solution should have a very high valuation with its strong positions in Japan (+3k units in 3yrs), France and UK. Progress in US.
• Maybe InPost will be grossly overvalued.
  • In either case, what if InPost wants to use its (overvalued) shares as an acquisition currency… ?

Quadients CXM or customer experience management software solutions receives awards and acquisition interest. Quadients management quickly rebuffed the chance for a CXM sale, which Teleios criticized. Maybe management did not act in the best interest of shareholders here, or maybe they had a much better view on the long-term potential of CXM – who knows? Either way, its CXM segments seems to have a good shot to grow significantly and provide solutions for clients’ critical processes (lock-ins).

Quadient’s mail related business is clearly an issue and responsible for the company’s ongoing turnaround. If the company can stabilize its mail segment and/or switch clients over to other growing and more modern solutions that should bode well for a succesful turnaround.

I like Quadient’s CXM software and parcel locker business and the involvement of active investors.

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