Quadient SA

PAR:QDT

Earnings Call Transcript 2022-Q1

[Geoffrey Godet, CEO & Director]

Good afternoon to all.

[Laurent Du Passage, Chief Financial Officer]

Good afternoon.

[Geoffrey Godet, CEO & Director]

Thank you very much for joining this call to discuss Quadient sales performance in the first quarter that ended April 30, 2021. I am Geoffrey Godet, CEO of Quadient, and I am joined on this call by Laurent Du Passage, our CFO. Throughout this call, I will be referring to the presentation that can be downloaded from our Investor Relations website, which complements the press release we have published today after market close.So if we go to Slide 3 for the agenda. So starting with the agenda, I will first give you an overview of Quadient's sales and business achievements for the first quarter of 2021. As you will see, we achieved a strong revenue performance in Q1 with organic growth above 11%. I repeat above 11% while continuing to successfully execute our back-to-growth strategy across all our core solutions and geographies as reflected by the number of new customer wins, product launches and partnerships as well as industry analyst recognitions for Quadient's software. Then Laurent will provide you with a more detailed overview of our Q1 revenue performance. And next, I will share with you our upgraded outlook for the full year 2021. And finally, together, we will be happy to take your questions.So moving to Slide 5. This first quarter of 2021 is the ninth quarter since the launch of our Back to Growth strategy in January 2019. And it is also the first quarter of the second phase of our plan. So we are obviously pleased with the strong revenue performance achieved in Q1.Total sales stood at EUR 246 million in Q1 2021, up 11.1% on an organic basis compared to the first quarter of 2020, which confirms the continuous strong recovery inorganic growth since the lows of the first semester of 2020, as you can remember.So of course, part of this performance reflects a favorable comparison base in the first quarter compared to the first quarter 2020 due to the impact of the COVID-19 pandemic. But it also relates to the strategic decision we took last year in the deepest moment of the crisis by voluntarily maintaining our sales and marketing capabilities, our salespeople, as well as our R&D and innovation efforts, if you remember, in order to fully benefit from the economic recovery at the time. So I want to thank all the Quadient employees around the world for their resilience, hard work and commitment to supporting our customers.Lastly, it also demonstrates the contribution of our past and recent acquisitions. Before Laurent and I provide you with the more details in the following slides on Quadient's business achievement in the first quarter. I would like to share with you some key numbers to assess the strengths of our performance in the quarter.So starting with our Mail-Related business, we recorded a strong rebound in hardware sales in Q1, with organic growth in excess of 30%, reflecting further improving business trends across all geographies and especially in North America as well as new customer wins against the competition in the quarter. And we clearly continue to update the market.Moving to our parcel local activity. Q1 was another quarter of impressive organic growth at around 68%, lifted by more than doubling in hardware sales on the back of an ongoing strong momentum in the U.S. retail and the benefit of the 2020 expansion of our installed base on subscription-related revenue.Finally, regarding our software solution and in line with our strategy of building an even more recurring SaaS and cloud business model, our subscription-related revenue grew more than 21% in the first quarter. And this is driven by a strong increase in SaaS and volume-based activities for small and medium-sized but also for large customers.So moving to Slide 6. As you can see on this chart and starting with the one on the left side, we recorded in the first quarter a strong revenue performance with an organic growth of 11.1% year-on-year at group level. And that highlighted the continuous strong recovery in revenue trends since the lows of the first semester, as I mentioned earlier. But this improved performance reflected a sharp rebound in both recurring and nonrecurring revenue in the quarter.So looking at the chart on the right side, as the global economy has continued recovering from the impact of the lockdowns, nonrecurring revenue, which for us includes the sales of license and hardware equipment, recorded a strong increase in Q1 with an organic growth in excess of 30%, rebounding sharply compared to 2020. Our recurring revenue also continued to rebound sharply in Q1, achieving an organic growth of around 5% in the quarter demonstrating, as I explained during our last Capital Market Day, the relevance of Quadient's strategy to promote subscription-related revenue and such in all solution, through the transition, the word SaaS cloud models for ICA on the software side and rental-based hardware equipment sales.Moving to Slide 7. Each solution within major operation recorded a strong performance in the first quarter of 2021. Starting with the chart on the left side, our ICS software business recorded revenue of EUR 44 million in Q1, achieving organic growth of 5.8% year-over-year. And as explained earlier, I see a benefit from strong double-digit growth at 21.6%, 21.6% in subscription-related revenue. And this is driven, obviously, by a continued shift towards SaaS and cloud offering, for small, medium-sized and also large customers in that period.Moving to the chart in the middle. Our Mail-Related business recorded revenue of EUR 159 million in Q1, up 6.3% organically year-over-year and delivering obviously positive organic growth across all geographies with particular strength in North America.And finally, looking at the chart on the right side, our Parcel Locker business recorded revenue of EUR 22 million in Q1, achieving an impressive 67.9% organic growth year-on-year.So moving to Slide 8. Let's now spend a couple of minutes to discuss our solution for smart hardware, and we're going to start with our Parcel Locker Solutions. As we announced in the Capital Market Day and our education session, our strategy for PLS is to focus on specific verticals. We have the carriers, the retail, corporate and education and the multifamily and residential verticals. We continue to make tremendous progress across all fronts, and want to focus just on a few highlights with you today.Starting with the retail. The Quadient team is super excited to be working with Lowe's on the completion of the rollout in the U.S. And I am so proud of this accomplishment from our team and how the teams came together to achieve this large-scale deployment and especially during the COVID-19 restrictions. Recently, Lowe's announced the extension of this deployment into Canada.As we move to carriers in this first quarter, we announced a strategic partnership with Relais Colis. This is a major player in parcel delivery to consumers in France. And through this partnership, Quadient will drive the rollout of this new parcel pending light, automated lockers to large and medium-sized retail partners of the Relais Colis network in France. Through an agreement of -- for 500 units to be progressively installed in France over 3 years. Relais Colis is trusting Quadient in what will be one of the first large-scale deployments of the new parcel pending light unit after its global launch in 2020. This innovative and patented solutions provides multiple benefit to Relais Colis, to the stores where it will be installed into the online shoppers. And this commitment to install those lockers will allow Quadient to almost double the size of our installed base in France.In the corporate and education market, we began the rollout of our PLS light solution as well in Japan, and we continue to address the expanding needs of the education market. For information, we launched a new campus hub. And we're thrilled to welcome universities, obviously, to our growing customer list and help them be ready when students come back on campuses in September. As part of our operation, we monitor the numbers of lockers and market share as well as the KPIs, which enables us to monitor customer acquisition and churn. In Q1, we added more than 900 lockers, which is completely aligned to our strategic plan and in line with the growth we had in 2019 and the first quarter of 2021. Last, the usage rate of our Parcel Locker Solutions continue to climb, validating the value of our solutions bring to the end user and the market.Moving to Slide 9. Regarding our other smart hardware solution, Mail-Related Solution. We had a very busy first quarter. As we have communicated before, we continue to innovate our Mail-Related Solution products. A year ago, we announced the availability of the iX-Series Mailing System and SMART mail center software in the U.S. The SMART solution was designed and built to meet the needs of small, medium and large businesses across a variety of industry verticals. The iX Series and SMART software, which stands for shipping, mailing, accounting, reporting and tracking are the new mailing solution to support businesses and to maintain market leadership for us by offering additional features and the continuous technology updates in line with our postal compliance. This solution combines the leading-edge technologies to improve the customer interaction and the business process and provide obviously a consistent look and feel across each element and that provide a familiarity for the users, which makes the navigation simple and very intuitive. And we see that across our software solutions.Also in the first quarter, we expanded our iX hardware series with the launch in Germany and giving our customers, I think, the most pragmatic choice for delivering effortless mailing and shipping operations. I am obviously thrilled to announce also some major deals in the U.S. and in France. So in France, one of the biggest financial service banking company purchased several of our DS-1200 machines. And we replaced competition current actually in that particular case.If I take another example, in the U.S., the state of California Controller's Office replace another company with other several DS-1200s. The DS-1200 is our production mail for the high end was designed to meet the workflow demands of almost every high-volume mailing application. And these two particular customer wins in Q1 continue to validate our advancement for the solution on the market.And finally, to talk about usage for MRS machines, the usage has rebounded, though still not at the same level of 2019 yet. For example, the growth in worldwide supplies revenue for April 2021 increased 26% year-over-year.So moving to Slide 10 now. Let's now transition to our software solutions. In March of this year, we introduced Intelligent Communication Automation. And as you know, we took the time during the Capital Market Day to explain that. This announcement was based on what we have learned and listen to from our partners and customers and such across regions and verticals and segments. Just a few weeks ago, Forrester, a stronger industry worldwide analyst, issued a report on how customer experience participation is vital to automation success. So I just wanted to share with you a quote from the report. "COVID-19 made companies transformation to digital business an existential requirement. And they continue on their quote, that the customer experience is no longer just a competitive advantage. It is the only way to engage customers." And we think we have all experienced that. And they continue with the quote, "and as customers move online, process automation had to keep pace. And in that respect, the customer experience and automation are diverse disciplines with increasingly convergent priorities."So these drivers include, obviously, digitization, remote working, replacement of legacy system, SaaS penetration, regulation change and cash management. The strategy for ICA software practice is to continue innovating across the entire value chain and focusing on the processes associated with account payable, account receivable, document delivery and the customer experience. And we continue to receive now recognition from all the major industry analyst firms, and our goal is obviously to continue to maintain this leadership position by further evolving our portfolio of software.Quadient had numerous initiatives on both organic and targeted acquisition in the past 2 years to enhance our offering, but also our go-to-market strategy and to accelerate the transition to subscription and to cloud. In Q1, we made a few major announcement with the biggest one being the launch of Evolve. What is Evolve? So Inspire Evolve is a high-performance software as a service, customer communication management solution. And it supports the rapid enterprise transformation by empowering all employees and that regardless of the technical expertise with the ability to control customer communication with little reliance on IT departments. With Inspire Evolve, customer communications are maintained and delivered in the cloud by individual lines of business in the moment they are needed.Moving to our second announcement and is the general avidity of Quadient Impress also cloud software version 1.2, which is an upgrade of the multichannel outbound document management platform that automates the customer communication workflow for small- and medium-sized businesses. Quadient Impress version 1.2 includes strong architecture upgrades throughout the cloud-based platform that speed the task of preparing and sending customer communication on site or remotely and such with greater scalability and nowadays or so with very needed enhanced security.Among the upgraded features, a notable improvement that I want to share with you is the expansion of Quadient Distribute that, in particular, enables users to send digital communications through SMS or tax. Impress Polo, which is a new we pool and a new and tracked e-mail service.Finally, our account receivable solution from YayPay. as a new module also giving users interactive dashboards and better insights into customers and the accounts receivable processes.So if we move to Slide 11, the strongest validation of our strategy always come from our customers and partners and industry analysts. So starting with industry analysts. In Q1, Quadient was recognized as the leading provider for customer communication management and customer journey by 2 independent industry analysts. Both analyst firms evaluates commercially available solutions, talk to existing customers and gauge the solution capabilities compared to the other providers. The 2020 Aspire leaderboard for Customer Communication Management, CCM, which is just being published today just a few hours ago, has recognized Quadient as a leader for the fourth year highlighting our leadership in omnichannel orchestration, communication composition and business automation.So on another front, we also acquired over 600 new ICA software customers across the globe and across market segments. And what is rewarding is seeing customers purchase Impress and YayPay together, enhancing the entire value chain of customer communication and communication delivery. Most of them came from the cross-sell realized by our Mail-Related Solutions sales organization.Another news that we just announced YayPay is now available to Sage, in particular, their X3 customers on their marketplace. And that's a web-based application, listing both resell and referral independent software vendor partners application that integrate with Sage and a cloud product. And this partnership with Sage aligns Quadient with one of the world's leading provider of business management and financial technologies.So if we talk about -- a little bit about the usage for our ICA applications, I'm happy also to report that the usage of Impress tripled in the first quarter compared to the previous quarter, and our journey mapping solution has doubled in usage compared to last year.Last, but not least, 68% of our ICA customers are now SaaS subscription base, which is a huge achievement. So I would like to thank our expert teams across the organization for an amazing job in this first quarter.So this concludes my review of the key Q1 highlights, and I am now handing over to Laurent to discuss about Quadient's first quarter 2021 sales performance.

[Laurent Du Passage, Chief Financial Officer]

Thank you, Geoffrey. I will now drive you into further details on the Q1 sales figures. So moving to Slide 13. First, to bridge the Q1 sales of this year, which stands at EUR 246 million that you can see on the right-hand side, the Q1 of last year at EUR 239 million on the left. You need to neutralize the scope effect for approximately minus EUR 7 million, which is mainly due to our Australian divestment. And you have to take the ForEx impact for minus EUR 12 million on the right-hand side, mostly due to a weaker U.S. dollar this year than last year. Once excluded, you see in the middle of the chart that the group's revenue grew organically by about EUR 25 million or 11.1% year-on-year with double-digit growth in both major operation, plus 10.3% and additional operations at plus 21.1%. And in absolute value, the increase of EUR 25 million at group level, split into EUR 2 million for ICA, EUR 10 million each for MRS and PLS and EUR 3 million for additional operations.Now if we move to Slide 14. Major operation revenue accounts for EUR 226 million out of the EUR 246 million reported for Q1, which is around 92%. Subscription-related revenue accounts for 70% of this total and grew by more than 4% in Q1, while we saw a significant recovery in license hardware and professional services at around plus 28% each. This results in an overall 10.3% growth against Q1 2020, which more than offsets, if you remember, the minus 8.9% decline we had in Q1 last year for major operation in an environment that is still impacted by COVID restriction, notably in Europe.In North America, we saw a strong rebound in MRS and continued Parcel Locker dynamics with the completion of loss U.S. contract as well as the strong momentum in the higher education segment.In Europe, the improved performance was driven by France and notably ICA with a strong recovery in usage. We saw a slight organic decrease in international revenues due to limited placement of Locker across 2020 in Japan and a slower start for ICA in 2021.Now let's focus on each of those major solutions. And if we move now to Slide 15, ICA, which is our software division accounts for EUR 44 million of revenue in Q1. Hence, 20% of major operations revenue, and it grew by 5.8% year-on-year, as mentioned by Geoffrey. ICA revenue mix is moving more and more towards subscription-related revenue, 70% in Q1, which grew by 21.4%, thanks also to the change of mix of business model. Indeed, we have seen small and medium-sized businesses as well as large accounts, growing their SaaS and volume-based activities by 31% and 15%, respectively. Professional services experienced improved trends at plus 19.4% in Q1 due to projects resuming and new placements implementations.Perpetual licenses, which accounted for 8% of revenue in Q1, significantly declined, mostly due to the shift in business model. And last, YayPay and Genworth recorded a good quarter with growth above 80% year-on-year in revenue.Moving to Slide 16 with EUR 159 million of revenue in Q1, Mail-Related Solutions, recorded a remarkable 6.3% organic growth year-over-year and accounts for 70% of major operations. This represents a sharp rebound compared to the previous quarters, driven by a 30% plus organic growth in hardware sales and a resilient installed base and subscription-related value that comes from our leasing portfolio and our rental. This strong performance was not only the result of a favorable comparison base in Q1 2020, but also relates to continued improvement in business trend on the back of economic recovery as well as our efficiencies and marketing strategy to further gain market shares against our competitors and continue to outperform the market. This positive organic growth was seen across all geographies with sustained performance in North America bookings but also a strong recovery in European countries.Now moving to Slide 17 on our third major solution. Parcel Locker Solutions recorded again an impressive organic growth at 67.9% growth in Q1, sorry, and accounted for EUR 22 million in revenue in the quarter. As you remember, the expansion of the installed base in 2020 and particularly in the U.S. resulted in a strong double-digit growth in subscription-related revenue. And note that Quadient's worldwide installed base has further expanded with more than 900 additional new units just in Q1 2021. Hardware sales sharply increased in Q1 with the completion of loss contract execution in the U.S. as well as strong traction in the higher education segment. We have also noticed a promising start of the U.K. market and strong growing pipeline, notably in the residential and high education segment.Moving to Slide 18. As a summary, revenue from major operations, which accounts for 92% of our group sales in Q1 increased by 10.2% with all solutions growing. While North America has shown a remarkable performance with an organic growth at 13.7%, also tied to a faster pace of vaccination. Europe also has shown a strong recovery despite existing sanitary constraints since the beginning of this year. Additional operations, which consist in our major solutions in other geographies as well as our other solutions, recorded a significant rebound with 21% growth year-on-year, and this is notably due to the CVP, our automated packaging system performance in Q1, but also to MRS business line.Now moving to Slide 19. In conclusion, let me spend a few minutes to discuss about Quadient's midterm ambitions by solution. As we shared during our Capital Market Day at the end of March, we shared specific targets by solution for the '21-'23 3-year period. So let's quickly review the first quarter 2021 outcome for some of them, starting from -- with our ICA software business. The subscription related revenue increased by 21.4% in Q1, which sits in the 20% to 25% increase of subscription rated revenue CAGR target we have over the 3-year plan.Then moving to our Mail-Related activity. We delivered a 6.3% organic growth in Q1, which favorably compares to the minus -- to the better than minus 5% organic CAGR revenue decline over the period. And finally, regarding our Parcel Locker business, as you remember, we target an installed base of more than 25,000 lockers by the end of this year plan, which represents an increase of at least 12,000 units compared to the 13,000 lockers we had installed at the end of the full year 2020. So if you calculate it over 3 years, it means 4,000 units per year or around 1,000 per quarter. And we had more than 900 new installs just in Q1, which is a great achievement in line with our ambitions.This concludes my section. And I'm now handing over to Geoffrey for a full year 2021 outlook.

[Geoffrey Godet, CEO & Director]

Thank you, Laurent. So let's move to Slide 21. Quadient today is uniquely, I think, positioned in the market to continue to benefit from the e-commerce booming and obviously, the acceleration of the digitization of processes, customer experiences and business communication that both Laurent and I have been discussing about today.So when we take into account the strong performance we achieved in this first quarter of 2021, we're happy to be able to upgrade our guidance on organic sales growth and on organic current EBIT growth for 2021. So let me share with you this upgraded guidance.So we now expect for the full year 2021 organic sales growth to be above 4% versus a minimum of 2% organic sales growth, previously mentioned during the Capital Market Day. The organic current EBIT growth between 5% and 6% versus the range of 4% to 6% that was previously shared with you. And lastly, regarding our Quadient's 2021-'23 3-year plan, our midterm targets for both organic sales growth and organic current EBIT growth are obviously unchanged.So I believe this concludes our Q1 presentation, and we're now happy with Laurent and Caroline to take your questions.

[Operator]

[Operator Instructions] Our first question comes from the line of David Cerdan from Kepler. [Operator Instructions] All right. We will move on to our next question. Our next question comes from the line of Nicolas Tabor from Stifel.

[Nicolas Tabor, Analyst]

Can you hear me well?

[Geoffrey Godet, CEO & Director]

Yes, yes, Nicolas, we can hear you. How are you?

[Nicolas Tabor, Analyst]

Great. I'm fine. And you? I hope it's great because it was a great sales also congratulations on this. So I had a few questions. The first 2 questions are quite simple and straightforward. First, could you give us the number of CVP-500 units that you sold in Q1 to have an idea of how much of the organic growth is, let's say, more underlying and what's more exceptional? And then on Slide 15, you give SMEs and large accounts organic growth. Is it like a proxy for BP and CXM that we had previously?

[Geoffrey Godet, CEO & Director]

So let me take just the last part of your question, and I will let Laurent respond to the one on the CVP. Yes, it is a good proxy. That's why we're going to be transparent with you. So the 15% organic growth is more or less for the former CXM on the subscription basis. And the overall 30% is on the former BPS side. The small and midsize difference in terms of size of customers versus the large one, is more or less a clear now. But as we Evolve and especially with the launch of Evolve, we'll have a little bit more in between, but today, it's a good proxy.

[Laurent Du Passage, Chief Financial Officer]

And on the first part of the question, we placed 3 CVPs during Q1.

[Nicolas Tabor, Analyst]

Great. And then next question would be regarding the full year guidance on the organic growth side. I mean, if I look at the great results we achieved in Q1 and where that means you are versus 2019 organically, it seems that you're very well almost back to 2019 levels organically. But if I look at the full year, your guidance of above 4%, does that include, let's say, a very tough comp base in PLS for Q4, notably, and that means you are not forecasting any new large contract like Lowe's and therefore, maybe some pressure on the comp base? Or is it that you're prudent on other things rather than PLS? I mean, how did you make that guidance exactly? What are the sorts behind it, not segment by segment, but what are the key reasons why it's not higher than that?

[Geoffrey Godet, CEO & Director]

This is a good question. So definitely, we took into account the better-than-expected first quarter performance. And then we also took into account, obviously, the comparison of the basis that you mentioned, whether in Q2 or we do at the end of the year for -- in particular, the Parcel Locker. We did share on the Parcel Locker that we were still expecting to be able to grow at double digit this year, but at a much lower level than in 2020, and it did take into account the fact that we're likely not to have such a large installation in just the first quarter alone. So we definitely took that into account. If obviously, we have the chance to be able to secure another large one, and we'll be happy to share that along the way. But at this stage, this is not our current assumptions for the first quarter for the Parcel Locker Solutions. And I think the last part of the different assumptions that we took into account for the rest of the year is also that there is remaining uncertainty in some of the countries we operate because even in Q1, we still had in Q1 that was very differentiated across the region because we still have in Europe, mostly in Germany or France or some of the other European countries or even in the U.K. And as of today, people are not fully back at the office. So there's still some activities that we could see. They're still not back to normal. And that's also part of a thing of the assumption that we had into the upgraded guidance for the rest of the year.

[Nicolas Tabor, Analyst]

Great. And therefore, on PLS, I mean, when I look at the Lowe's contract, the continued very strong momentum in Japan, and now what's happening in France, the new partnerships, I mean, it seems that, I mean, from external view, it seems that you're getting more and more steam in the engine that you are making proof of concepts in both the light, the leasing, the hardware sales. So I mean, can we agree that it's a conservative stance to not expect a large contract, but in reality in the pipeline, you are in a lot of discussions. It's just that you don't know the timing, maybe it's only going to come in H1 next year and therefore, you want to be cautious?

[Geoffrey Godet, CEO & Director]

So on those larger contracts, first, and that's the nature of every large contract whether its on PLS or the other solution. Those large contract takes time to sign. So the sell cycle is long. And for Parcel Locker in particular, it's obviously a decision-making that involves also a lot of different C level in the organization. So a lot of people has to come together. And as you mentioned, the POCs or the proof of concept are usually part of the contract or the relationship. And therefore, even if we are to sign it, the time from which we sign to the time to execute, you could have 3 to 4 months very easily. And therefore, depending on the timing at which we could sign such a large contract, even though we could sign it this year, it could still only impact positively the numbers and not the following year and not this year. So we'll need to see progressively if how the business evolves. I don't know, Laurent, if there was anything else you want to add?

[Laurent Du Passage, Chief Financial Officer]

Yes. And just to add because you made the relation between our guidance in revenue and the activity in Parcel Locker. Again, remember, and that's what we shared at Capital Market Day, half of our fleet is in our rental mode and half of the fleet is on the sales mode. So depending on the business model that this contract will fall in, it will not impact immediately our revenue for this year. So that also needs to be taken into consideration. And it's usually a discussion when working on the contract that could be one or the other business model.

[Nicolas Tabor, Analyst]

Perfectly clear. Great. And maybe last question. I read very rapidly through your other press release from tonight regarding governance and appointments of directors. It seems that you will have a new director appointed and supported by Telos. I mean, does that mean that there's a change in your views and their views regarding the strategy of Quadient? I remember at the end of last year when they argued that CXM would create better -- more value by being sold and divested. And you published some letters to openly state that you thought it was core to the strategy and the transformation. Have you came along to have the same view and therefore, that means that you can work together and have them -- have someone at the Board or at least sponsored by them at the Board of Directors. How is that changing? Can you give us some insight for the analysts and minority shareholders?

[Geoffrey Godet, CEO & Director]

Thank you, Nicolas. It's a good question. I can obviously not speak on behalf of any of our shareholders, even our largest shareholder, Telos. What I can obviously relate to is what we have communicated today. We have had a chance to be able to engage actively and constructively with our friends from Telos since last year, and in particular, in the recent months, as we have shared, are both at the manager level and at the Board level. And thanks, I think, to an active shareholder engagement that we have with Telos with the other shareholders. We were obviously happy to be able to get their support on some of the main element of the strategy that we have announced at our Capital Market Day, notably focusing on our organic growth of each of our 3 solutions, our capital allocation and our focus on value creation for shareholders. So that was obviously important.And I think at the same way, it was important for the Board to be able to work constructively with Telos as we had the continuity with the resignation of Bel Hoover to identify the different candidate that was submitted and proposed by the Nomination Committee in lines of the way both governance works and have been able to have Telos to be part of the process and supporting the domination of Sebastian, which is an independent Board member. So that's why I think it's a great step moving forward.

[Operator]

All right. Our next question comes from the line of Patrick Jousseaume from Societe General.

[Patrick Jousseaume, Head of Mid and Small caps Europe Research]

Yes. So can you hear me?

[Geoffrey Godet, CEO & Director]

Yes, Monsieur Patrick.

[Patrick Jousseaume, Head of Mid and Small caps Europe Research]

Yes, So my question, in fact, was already responded. It was a question about the guidance and why you have been able to go back to almost 2019 level in Q1 and we do not expect to be at this level over the full year, but I guess that you have already responded to that. So maybe your second question, which is about the local business, especially in France. I have heard from transport company recently that they consider that the lower no future but limited future in France. And the reason for that was that French mail box are, let's say, relatively big. And it is like any French individual has his sort of own locker. Could you develop on that?

[Geoffrey Godet, CEO & Director]

So just to be clear, sorry, Patrick, you cut off at one point. So you mentioned you heard feedback that the lockers in France would not work. Is that correct?

[Patrick Jousseaume, Head of Mid and Small caps Europe Research]

Let's say that what I understood from, let's say, conversation with people in transport logistics in France is that well, lockers, it will be difficult in France to have a strong development of lockers because with the size of letter boxes in France, it's a bit like everybody has a sort of own lockers, his own locker, his own personal locker, which is at his door. So there is no reason why lockers should be installed a bit everywhere like you do in Japan or in other countries.

[Geoffrey Godet, CEO & Director]

Okay. Understood. So I understand the question. So in a -- when we look at the parcel deliveries, in particular, in big cities or for the last-mile delivery, where there is a lot of value the Parcel Locker brings, you have to consider different use cases. One of the use cases is a delivery at-home or delivery at the office. And you can also have a delivery in the out-of-home or out-of-the-office location, it could be in the street. It could be in a click-and-collect situation where you go back into the stores in which you made a purchase, if you're online to be able to recoup those parcels. So the bottleneck or the mailbox is more in the at-home situation. And the mailbox is obviously very different than an intelligent solution that is connected that provide security in which obviously, you can have many other exchanges than just the parcels. So we do see in France that we have seen already the retail industry in the Click and Collect to be more advanced because I think it was the first segment that we have benefited with the use of those lockers. And I think we've been very successful in helping big retailers like Decathlon, Ocean or Lana, as you know.On the carrier side, we had a great partnership with already a pickup and GeoPost in France. And now with Relais Colis, which is also having a network of stores, so we're close to that carrier segment and the retail segment. And we have not yet penetrated the at-home or at-the-office segment to which we have just made the announcement in Q1 of 2021 to launch on the residential segment. So this is a new segment. We have obviously made a sufficient analysis to look at that segment across different countries and it's early adoptions and how and what was the value compared to the traditional mailbox. So we do feel confident that there is, in France, value from the Parcel Lockers in residential building, and you have to look at the residential building that has necessarily a small home or building, but more in the settings where you have sometimes dozens, if not more, hundreds of apartments. So we call that a multi apartment complex environment in which those location have the full benefit with multi resident on those Parcel Locker solutions.

[Operator]

All right. There are no further questions in the queue. [Operator Instructions]

[Caroline Baude, Financial Communication Specialist]

Thank you. So I will ask a question from the webcast. So first question from Olivier Lombard on MRS. When the new contract win in Mail-Related Solution will be delivered? What is the impact on the additional recurrent revenues from here? Thank you.

[Laurent Du Passage, Chief Financial Officer]

I think there are -- just one comment. I think there were -- you mentioned two different contracts, one in France and one in the U.S. For sure, the bookings have been done in Q1. The delivery must be in progress, already delivered early Q2, I guess. And from the recurring revenue standpoint, it depends so you have service and supplies that usually comes with the deal. And then leasing, depending if this contract has been eased or not, that will add on top of the usual leasing interest rate that we qualify on such machines. So this will be obviously serving the recurring revenue of the main rate solution. starting from the date of the activation of the machine.

[Geoffrey Godet, CEO & Director]

And aside of those two specific contracts, the 30% of hardware placement, organic growth that we had in Q1 will follow the same logic of recurring revenue subscription that Laurent mentioned because most hardware is either leased or rented. So the recurring revenue starts the months after we have delivered, installed and recognized the machine.

[Caroline Baude, Financial Communication Specialist]

Thank you very much. Now second question from Olivier Lombard on ICA. What the mix of the new client of ICA between small and medium versus large companies, please?

[Geoffrey Godet, CEO & Director]

So roughly, and I speak on the control of Laurent, the revenue is 2/3 the large companies and 1/3 of the small and midsize companies. On the other hand, when we talk about the customers, the -- is probably the opposite because, obviously, the average selling price we have with the small and midsize customers is much smaller than the big ones. I don't have the ratio in mind in the 600 new customers we added for ICA in Q1, but we're probably at closer to 90% on small and midsized customers, knowing that on top of it, in Q1, in particular, we have seen an acceleration of getting new customers. And in particular, because we benefit from the acceleration of the cross-sell that we had initiated last year, and we have seen some of the benefit in Q1. So a lot of those customers including are small and midsized customers. And we've seen among those customers, obviously, various application from Impress, which was launched last year. The new customers on the YayPay on the account receivable platform. And for one month only, but that count also some of the new customers generated on the Beanworks, the account payable platform.

[Caroline Baude, Financial Communication Specialist]

Third question on PLS. What is the nature of the sales to Lowe's and to Relais Colis' sales rental?

[Laurent Du Passage, Chief Financial Officer]

So on the Lowe's contract, we were doing half sale. So again, as mentioned today, the Q1 has seen the final delivery of the initial contracts with Lowe's U.S., which means half sales. And on top, you have a little bit like on mail recurring revenue that covers usually maintenance and support for the coming period once the Lowe's cost have been installed. And from -- and for Relais Colis, I speak under the control of Geoffrey, but I believe it's a rent contract that we are contemplating here.

[Geoffrey Godet, CEO & Director]

Correct.

[Caroline Baude, Financial Communication Specialist]

Thank you very much. We don't have additional question on the webcast. So to you -- I give you the line.

[Geoffrey Godet, CEO & Director]

Okay. So if we don't have any other question online, Ned, on the call. Laurent and I were happy that you give us the time and the opportunity to share our first quarter of this year's results. Thank you very much for your time and look forward to our publication for H1 at the end of September and probably in between our shareholder meeting in the coming weeks.

[Laurent Du Passage, Chief Financial Officer]

Thank you. Good evening.

[Geoffrey Godet, CEO & Director]

Thank you. Good evening.