Cash in the media Democracy: Financial Rights are Human Sweden: New bill ordering banks to Rights provide cash services A healthy democracy needs financial privacy. If all ECB welcomes Swedish draft law and highlights the importance that all the “Member States” take our behaviours and all our movements are tracked, this can damage democracy in a fatal the appropriate measures to ensure that credit way. Trade-offs are made between convenience institutions and branches operating within their and speed versus privacy and freedom. territories provide adequate access to cash services, to facilitate the continued use of cash. Source: Alex Gladstein (CSO at the Human Rights Foundation) Source: Swedish Government / ECB E-commerce: Credit card fraud increases New York: It will force its businesses to by 30% receive cash payments to avoid the "cashless “ trend Credit card fraud in e-commerce increased last year, at the same rate as the number of The Big Apple thus joins other cities such as transactions. On the other hand, according to the Philadelphia, San Francisco and New Jersey. The ECB, the fraud in notes decreased and evolved law aims to protect and prevent discrimination inversely to the e-commerce. against many consumers with low income and who do not have access to debit or credit cards.. Source: Instituto Coordenadas de Gobernanza y Economía Aplicada Source: New York Times 2
Agenda 1. Highlights of the period 2. Regional dynamics 3. Financial results 4. Conclusions
1. Main themes Highlights of the period 1 • Negatively impacted by the currency depreciation and the application of the Macro hyperinflationary accounting in Argentina (IAS 21 & 29) Environment 2 • Local currency growth close to 17.0% (1) in FY 2019 Agility • Operating margin improvement ( ~150 bp in EBITA and EBIT vs. FY 2018) 3 • 6 acquisitions completed (Accumulated EV ~85 M€) Consolidation • Divestments in South Africa (June) and France (July) 4 • New Products reached 16.2% of total sales (vs. 11.8% in FY 2018), growing Transformation 42% vs. FY 2018 5 • Free Cash Flow generation of 213 M€ Financial Discipline • Deleverage (ND/EBITDA 1.6x). S&P IG Rating (BBB) maintained 4 (1) Includes organic and inorganic growth
1. Agility Highlights of the period % Accumulated local (1) growth IAS 21/29 Steady improvement in local growth and margins: 18.0 16.8 16.7 15.0 11.9 11.6 10.9 10.5 ▪ Positive evolution of the underlying business 3M 6M 9M FY 3M 6M 9M FY 2018 2019 ▪ % Accumulated operating margin Additional temporary volumes in LatAm (3Q / 4Q) IAS 21/29 % EBITA 20.5 18.8 18.0 17.3 16.9 16.5 16.4 15.2 ▪ M&A contribution and strategic 19.6 % EBIT divestments 18.0 16.9 16.3 15.9 15.5 15.4 14.2 3M 6M 9M FY 3M 6M 9M FY 2018 2019 5 (1) Includes organic and inorganic growth
1. Consolidation Highlights of the period 6 deals in FY 2019 (3 LatAm, 2 Europe, 1 AOA). EV ~85 M€ Portfolio Management instrumented through divestments in South Africa and France Solid M&A pipeline. Investment target for 2020 between 50- 150 M€ 6
1. Transformation Highlights of the period New Products sales (1) (M€) and weight over Total Sales (%) New Products sales reached 292 M€, 292 300 35 representing a 16.2% of the total revenues 250 30 CAGR +38% 205 200 25 167 Positive growth dynamics remain in 150 20 place (FY 2019 Sales + 42% vs. FY 2018) 16.2% 111 100 15 11.8% 50 10 8.7% Strong performance of Smart Cash 6.4% solutions, AVOS and ATMs 0 5 FY 2016 FY 2017 FY 2018 FY 2019 7 (1) 2018 and 2019 figures according to IAS 21 & 29 (hyperinflation accounting)
Agenda 1. Highlights of the period 2. Regional dynamics 3. Financial results 4. Conclusions
2. LatAm [66% of the total sales in FY 2019] (1) Regional dynamics Million Euros FY 2018 FY 2019 % VAR Sales 1,148 1,185 +3.2% +16.3% Organic Organic growth slightly above first +6.2% Inorganic nine months of 2019: Forex (2) (19.2)% ▪ Overall positive contribution 290 +11.9% EBITA 259 ▪ Additional temporary volumes in Margin 22.6% 24.5% some countries Amortiz. of intangibles (12) (15) EBIT 247 275 +11.2% Inorganic contribution in line with Margin 21.5% 23.2% previous quarters Adverse currency impact in FY 2019, New Products: although less than in the previous year Sales (M€) and Weight (%) 192 200 35 New Products increased by 52%, 30 representing 16.2% of total revenues 150 126 25 100 20 16.2% 15 11.0% 50 Operating margin improvement vs. 10 FY 2018 0 5 FY 2018 FY 2019 9 (1) 2018 and 2019 figures according to IAS 21 & 29 (hyperinflation accounting). In addition, 2019 figures are reported according to IAS 16 (leasings), in force since 1Q 2019; (2) Includes FX and IAS 21 & 29 impact.
2. Europe [28% of the total sales in FY 2019] (1) Regional dynamics Million Euros FY 2018 FY 2019 % VAR Sales 491 509 +3.6% +4.8% Organic Solid organic trend during the year: (1.2)% Inorganic ▪ Some slowdown in Q4 due to complete 0.0% Forex divestment of France 39 +6.9% EBITA 37 Margin 7.5% 7.7% Amortiz. of intangibles (3) (2) EBIT 34 37 +8.5% Inorganic growth effort diluted by the sale Margin 6.9% 7.3% of France New Products: Sales (M€) and Weight (%) New Products continue gaining weight within the sales mix and achieved 18.5% of 94 100 35 the total sales 30 73 80 25 60 18.5% 20 14.8% 40 15 Slight recovery in the operating margin 20 10 that should continue in 2020 0 5 FY 2018 FY 2019 10 (1) 2019 figures are reported according to IAS 16 (leasings), in force since 1Q 2019
2. AOA [6% of the total sales in FY 2019] (1) Regional dynamics Million Euros FY 2018 FY 2019 % VAR Sales 93 105 +13.3% (4.4)% Organic Regarding the organic growth of the +19.2% Inorganic region: (1.5)% Forex ▪ Australia remains in line with previous (6) +45.6% EBITA (11) quarters Margin (12.0)% (5.8)% ▪ Partially offset by the positive Amortiz. of intangibles (2) (1) performance of the Philippines EBIT (13) (7) +45.7% Margin (14.6)% (7.0)% Focus on the sale of new solutions New Products: Sales (M€) and Weight (%) 8 40 6 FY 2019 operating margin impacted by: 6 6 30 4 20 ▪ South African divestment 6.6% ▪ 2 10 5.4% Integration costs from Indonesia 0 0 FY 2018 FY 2019 11 (1) 2019 figures are reported according to IAS 16 (leasings), in force since 1Q 2019
Agenda 1. Highlights of the period 2. Regional dynamics 3. Financial results 4. Conclusions
3. Profit and Loss Account (1) Financial results Million Euros FY 2018 FY 2019 % VAR 1,799 +3.9% Sales 1,732 Sales growth in euro terms (+3.9%): EBITDA 340 408 +19.8% Margin 19.7% 22.7% ▪ Organic growth (c.12%), inorganic Depreciation (55) (84) growth (c.5%), forex (2) (c.-13%) 323 +13.5% EBITA 285 Margin 16.5% 18.0% Amortiz. of intangibles (17) (19) Operating margin improvement in EBIT 268 305 +13.7% absolute and relative terms: Margin 15.5% 16.9% ▪ Efficiency programs (4) (45) Financial result ▪ Operating leverage 264 260 (1.7)% EBT ▪ Synergies from acquisitions Margin 15.3% 14.4% ▪ Sale of South Africa and France Taxes (90) (91) Tax rate 34.0% 34.9% Net Profit from 174 169 (3.0)% Financial result impacted by several continuing operations factors, mostly non-cash items Margin 10.1% 9.4% Net Consolidated 174 169 (3.0)% Profit Margin 10.1% 9.4% 13 (1) 2018 and 2019 figures according to IAS 21 & 29 (hyperinflation accounting). In addition, 2019 figures are reported according to IAS 16 (leasings), in force since 1Q 2019; (2) Includes FX and IAS 21 & 29 impact.
3. Cash Flow (1) Financial results Million Euros FY 2018 FY 2019 EBITDA 340 408 Conversion ratio improved, reaching 74% in Provisions and other items 20 31 the period Income tax (101) (88) Acquisition of PP&E (97) (104) Acceleration in Smart Cash capex Changes in working capital (9) (34) investments (+41% vs. FY 2018) Free Cash Flow 153 213 % Conversion (2) 71% 74% Higher working capital outflow due to higher Interest payments (6) (10) Payments for acquisitions of growth in local currency terms, partially offset (62) (16) subsidiaries by the increase in provisions and other items Dividend payment (95) (110) due to the sliding of some payments to 1Q 2020 Restructuring operations 18 - Others (38) (13) Total Net Cash Flow (30) 63 Deferred payments and M&A disbursements net from divestments in South Africa and France Net financial position (BoP) (424) (491) Net increase / (decrease) in cash (30) 63 Dividend cash out increased in FY2019 Exchange rate (37) (32) Net financial position (EoP) (491) (460) 14 (1) 2018 and 2019 figures according to IAS 21 & 29 (hyperinflation accounting) and IAS 16 (leasings); (2) Conversion ratio: (EBITDA - Capex) / EBITDA
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