Quest Group: Fivefold net profit in nine months – 39.9% increase in sales

In the first nine months of 2021, the Quest Group showed a significant improvement in its financial figures.

In particular, on a consolidated basis, sales amounted to € 669.3 million, EBITDA profits to € 57.9 million and pre-tax profits to € 120.1 million, achieving a 39.9% increase in sales, 35, 4% in operating profitability (EBITDA), 59.1% in pre-tax profits (EBT) and fivefold in net profit after tax (EBA) from continuing operations.

At the same time, the group completed the sale process of its participation in Cardlink SA, which brought extraordinary capital gains of € 85 million to the parent company and € 75.8 million to the Group.

The net loan position (loans less cash) of the Group amounted to – € 81.2 million compared to – € 10.2 million on 31/12/2020, as the proceeds from the sale of Cardlink strengthened the liquidity of the Group.

The Group’s investments in the nine months of 2021 amounted to € 13.3 million. The majority of investments concern the development of the infrastructure of the postal services sector. EBT and EAT profits also include extraordinary profits of € 2 million, which are mainly related to the sale of the minority stake in TEKA Systems SA. It is noted that the profit after taxes of 9M2020 was burdened by an extraordinary tax burden of € 11.1 million. Excluding this extraordinary burden, the profits after taxes from continuing operations at 9M2021 were improved by 73.8% from last year.

Results 9M 2021 per activity

➢ Commercial Activity -mainly in IT & telecommunication products- (companies: Info Quest Technologies, iSquare, Quest on Line, iStorm, Clima Quest). In the first nine months of 2021 there was a strong double-digit increase in sales (+ 57.3%), while pre-tax profits doubled (+ 107.6%) compared to the first nine months of 2020, confirming the strengthening of demand for IT products and the development of e-commerce in the covid and post-covid-19 era. The improvement in profit margins on sales is due to the achievement of economies of scale, due to the increase in sales and at the same time containment of costs.

Ρικής IT Services (Uni Systems). During the nine months of 2021 there was a double-digit increase in sales (+ 19.5%), doubling in pre-tax profitability (+ 96.2%) and a significant improvement in profit margins. Demand for IT services is growing as the digital transformation of the public and private sectors accelerates. At the same time, Uni Systems operates more efficiently, with the restraint of financial and other expenses. On October 1, 2021 Uni Systems completed the acquisition of 60% of Intelli Solutions for € 3.8 million, while the total investment may reach € 5.2 million due to the provision for the return of an additional amount ( earn out) to the old shareholders (over the next two years), as long as specific goals are achieved.

➢ Postal Services (ACS Courier). In the first nine months of 2021 there was an improvement in sales (+ 12.2%), which was accompanied by a larger increase in pre-tax profitability (+ 28.6%). ACS profitability this year is higher than last year due to extraordinary profits due mainly to a reversal of previous forecasts that boost EBT profitability by about € 1.5 million and after tax profit by around € 2 million Excluding extraordinary profits , the course of pre-tax profitability moves positively but at lower rates, as it is burdened during the third quarter with increased costs for the maintenance of resources and infrastructure, in order to support the seasonally increased demand (peak) at the end of the year and the start of operation of the new sorting center. ACS growth rates have slowed following the corresponding decline in e-commerce, which is observed after the reopening of physical stores.

Card Electronic Transactions (Cardlink) – Discontinued Activity. In the nine months of 2021 there was an increase in sales (+ 25.5%) but also in profitability. Following the agreement with Worldline and based on IAS, the activity is characterized as “discontinued” and will cease to be consolidated in the results of the Group from October 1, 2021 onwards.

➢ Production of energy from renewable sources (Quest Energy). In the nine months of 2021 the company’s sales were slightly increased (+ 1.3%) as well as pre-tax profitability (+ 17%) compared to the corresponding period last year.

Parent company

The income of the parent company during the nine months of 2021 amounted to € 12.7 million compared to € 7.6 million in the corresponding period last year. Pre-tax profits amounted to € 98.2 million compared to € 6.3 million in the corresponding period of 2020.

The income of the Parent during the nine months of 2021 includes dividends of € 11.4 million compared to € 6.3 million in the corresponding period last year. The company’s pre-tax profits were positively affected by approximately € 85.2 million due to goodwill from the sale of Cardlink and by € 2 million from goodwill from the sale of minority holdings of TEKA Systems SA and Impact SA.

Prospects for the whole of 2021

All the companies of the Group quickly adapted to the conditions created by the pandemic and their sizes increased compared to 2020. Most of the sectors in which the Group operates (IT, courier, e-commerce) seem to be strengthened by the new consumer habits that formed in the post Covid era. The following are estimated in detail for the Group’s activities:

Commercial Activity: There is an increase in demand for both IT products and e-commerce, which are the main activities of the industry. It is estimated a strong double-digit increase in revenue and profits before taxes in the whole of 2021, but at a lower rate than the one that appears in the nine months, mainly due to the limited availability of products.

IT Services: This activity is positively affected by the conditions of increased demand for IT services in 2021. It is estimated that the double-digit revenue growth will continue, mainly due to the continued demand for the company’s services in Greece and abroad, with a corresponding increase in EBT profits. .

Postal Services: Revenue is expected to increase mainly from courier services, but at a slower pace than the nine-month increase. In the last quarter of the year there may be a decline in revenue, as it is not expected to repeat last year’s lockdown of physical stores, which had given a significant boost to the volume of e-commerce shipments. The company continues its development investments in infrastructure, mainly in the new sorting center in Egaleo, Attica, which will be completed around the end of 2021 – beginning of 2022. The main goal of the company in the near future is to improve the service experience (customer experience) of consumers.

Production of energy from renewable sources: The production and disposal of energy from photovoltaic systems, continues normally. Estimates for 2021 predict limited growth, coming mainly from 2020 investments. Any further growth will come from new investments.

The liquidity of the Group remains strong, with total available and financing lines over € 300 million, allowing the smooth continuation of its development plans, as well as the distribution of an interim dividend to shareholders, as already announced. For the whole of 2021, based on the data available to date, it is estimated that the increase in consolidated sales, EBITDA operating profits and pre-tax profitability will be in double digits compared to 2020, but probably at a lower rate compared to results for the nine months 2021.

The Management of the Group will present the financial results of the first half of 2021, in a telephone conference, on Thursday, November 25, 2021 at 15:30 Greek time.