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PROSEGUR 9M 2018 Results Presentation 1 Highlights of the Period - PowerPoint PPT Presentation

Dec 26, 2023 •291 likes •493 views

PROSEGUR 9M 2018 Results Presentation 1 Highlights of the Period Reflecting mainly 8.1% the impact of the Total 2,829m 224m EBIT LatAM macro Sustained Sales of environment and Organic Growth FX 9M 2017 9M 2018 155m Good

  1. PROSEGUR 9M 2018 Results Presentation 1

  2. Highlights of the Period Reflecting mainly 8.1% the impact of the Total € 2,829m € 224m EBIT LatAM macro Sustained Sales of environment and Organic Growth FX 9M 2017 9M 2018 € 155m Good Operating Cash 43% 48% Net Profit Remains stable Flow , despite Ibero- America’s exchange rate Op. Cash Flow /EBITDA conversion ratio Growth despite Connected adverse BBB Stable Rating confirmed 539,000 14% S&P Alarms environment in without changes LatAm 2

  3. P&L Consolidated Results 9M 2017 (1) 9M 2018 (2) % Variation In millions of euros 2,829 Organic growth above 8% Sales 3,184 (11.2)% 332 EBITDA 374 (11.4)% Margin 11.8% 11.7% Depreciation (77) (90) 242 EBITA 297 (18.5)% 8.6% Margin 9.3% (18) Amortisation of intangibles and others (19) EBIT evolution mainly justified by 224 EBIT 279 macro environment and accounting (19.8)% treatment of IAS 21 and 29 Margin 7.9% 8.8% Financial result (31) 13 237 Profit before Taxes 247 (4.3)% Margin 7.8% 8.4% Taxes (89) (82) Tax rate 36.1% 34.7% Net Profit and EPS remain stable 155 Net Profit 158 (2.2)% Minority interests 34 39 116 Net Consolidated Profit 124 (6.5)% Earnings per share 0.2 0.2 (Euros per share) (1) 2017 figures exclude extraordinary non-recurring costs and taxes of Prosegur CASH IPO. (2) 2018 figures have been elaborated applying IAS 21 and 29 3

  4. Consolidated Revenues by Region and Business Line In millions of Euros -11.2% Growth in Local Currency (1) % +1.2% % Growth in Euros 3,184 +8.1% -20.4% 2,829 9M 2017 Org Inorg FX (2) 9M 2018 +5.5% +5.4% +12.7% -3.5% +11.6% +22.3% -22.4% -8.7% -15.2% +5.4% 1,436 1,562 1,832 9M 2017 1,425 -0.1% -9.1% 1,422 9M 2018 1,217 1,231 1,297 121 110 186 186 Europe Iberoamerica AOA Cash Security Alarms (1) Includes organic growth and growth from acquisitions. (2) Includes exchange rate effect and IAS 21 & 29 4

  5. Consolidated EBIT and Cash Flow Generation In millions of Euros EBIT Operating Cash Flow Generation -19.8% -1.2% 279 161 159 224 48% 8.8% 43% 7.9% 9M 2017 9M 2018 9M 2017 9M 2018 EBIT Margin Op. Cash Flow / EBITDA conversion ratio EBIT Operating Cash Flow 5

  6. Situation of Businesses in Ibero-America • Increased volumes of transported cash • High interest rates benefit and accelerate logistics activity • Favourable scenario for developing cash automation solutions 1H 2018 2H 2018 Very strong currency (10.6)% (30.4)% devaluation (1) • Inflation transfer to market performing as planned High interest • Argentina interest rate above 70% • Rest of countries average: 9% • Volumes growth slows down in line with the economy rates • Suitable situation to focus on client portfolio optimization Economic • Elections effect in Brazil • FMI effect in Argentina slowdown • Churn rate increases due to macro pressure over consumption • Equipment import costs rise as a result of currency devaluation • Investment in growth is reduced and focus is rather placed on customer retention (1) BRL-ARS weighted compound depreciation 6

  7. Results by Business Line 7

  8. PROSEGUR CASH -15.2% +2.8% -26.8% +8.7% 1,436 Organic revenues growth close to 9% Sales 1,217 Significant negative FX effect FX (1) 9M 2017 Org Inorg 9M 2018 -22.3% 255 198 17.8% EBIT & Margin contraction deriving mainly from Margin 16.3% macro environment in Ibero-America 9M 2017 9M 2018 EBIT Margin EBIT In millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29 8

  9. PROSEGUR SECURITY -8.7% +5.9% -0.4% -14.3% 1,562 Sustained organic growth close to 6% , Sales 1,425 in line with 1H18 figures FX (1) 9M 2017 Org Inorg 9M 2018 -10.0% 43 39 Profitability remains stable despite the EBIT (2) & 2.7% 2.7% Brazilian slowdown and the strong currency Margin effect 9M 2017 9M 2018 EBIT Margin EBIT In millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29 (2) Security profitability excluding Overhead Costs. 9

  10. Evolution of “Integrated & Advanced Security Solutions” • Strong organic growth of these new services reinforced by M&A in strategic geographies • Combination of traditional guarding capabilities with remote monitoring operations and highly automated new value- ADVANCED AND DYNAMIC added services INTEGRATED SURVEILLANCE SECURITY AND REMOTE ELECTRONIC SOLUTIONS • Main structural pillar of margin improvement MONITORING SECURITY + TRADITIONAL for the whole business unit GUARDING • Deployed and present in all countries where - Technological the group operates Integration A B C Continued increase in sales of + + Integrated & Advanced Security Solutions LESS COSTS INCREASE IN 21.8% GREATER LOWER PRICES OPERATIVE CLIENT BASE MARGINS 19.8% 16.0% 14.0% 12.8% 12.5% 12.4% Solutions already of our client portfolio 30% present in more than 2012 2013 2014 2015 2016 2017 2018E % of IASS sales over total Security 10

  11. PROSEGUR ALARMS 539 499 14% growth in net additions compared to the 424 BTC 389 same period in 2017 355 Growth rate higher than the industry average 2014 2015 2016 2017 9M 2018 -0.1% +1.7% -22.4% +20.6% Organic revenues growth greater than 20% Sales Strong negative currency impact 186 186 9M 2017 Org Inorg FX (1) 9M 2018 38 38 36 36 35 Ø 36.6 Sustained healthy levels , despite Ibero- America’s FX ARPU Improvement in local currency 2014 2015 2016 2017 9M 2018 BTC in thousands of connections. Sales in millions of Euros. ARPU in Euros. (1) Includes exchange rate effect and IAS 21 & 29 11

  12. Financial Information 12

  13. Consolidated Cash Flow 9M 2017 (1) 9M 2018 (2) In million Euros 332 EBITDA 374 37 Provisions and other non-cash items 33 Tax on profit (ordinary) (106) (96) (92) Changes in working capital (109) Interests payments (31) (22) High and sustained cash 159 Operating cash flow 161 conversion ratio (140) Acquisition of property, plant & equipment (141) Payments for acquisitions of subsidiaries (50) (54) Dividend payments (55) (92) (2) Other flows 766 (288) Cash flow from investing / financing 520 (129) Total net cash flow 682 (252) Initial net financial position (712) (129) Net increase / (decrease) in cash 682 Exchange rate (20) (77) (458) Final net financial position (51) (1) 2017 figures exclude extraordinary non-recurring costs and taxes of Prosegur CASH IPO. (2) 2018 figures have been elaborated applying IAS 21 and 29 13

  14. Total Net Debt Net Financial Debt Increase of 206 million Euros vs. year-end 2017, maintaining low leverage level Average cost of debt decreases by 50 basis points vs. the same period in 2017 ( 1.7% vs. 2.2%) Ratios Net Financial Debt / EBITDA annualised 1.0x Net Financial Debt / Equity 0.4x Rating Ratified by S&P (October 1, 2018) BBB, stable Outlook 54 29 37 33 458 391 350 33 252 51 -101 -106 -120 -124 -118 Sep. 2017 Dic. 2017 Mar. 2018 Jun. 2018 Sep. 2018 Deferred payments Net financial debt Treasury stock (1) Amounts in millions of Euros. (1) Treasury stock of PROSEGUR and Prosegur CASH at closing market price of the period. 14

  15. Financial Result Breakdown 9M 2017 9M 2018 In millions of Euros Significant financial cost optimisation , (22) resulting from the debt optimization Financial Expenses (35) process initiated at the end of 2017 FX (1) 35 4 Financial Result 13 (31) 2.2% 2.0% 1.8% 1.7% Average cost debt Net Financial Debt 458 391 350 252 Dec 2017 March 2018 June 2018 Sept 2018 Amounts in millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29 15

  16. Argentina – IAS 21 & 29 • On 01 July 2018, Argentina was declared hyperinflationary country by both the European agency ESMA (1) and the North What ? American IPTF (1) , obliging all companies submitting financial statements under IFRS and US GAAP to reflect inflation in their accounts • The cumulative inflation rate of the last three years ( 2016- 2018 ) exceeds 100% Why ? • Until the situation is reversed , the application of these accounting rules will remain in place • Balance sheet: revaluation of non-monetary items • Income statement: the applicable exchange rate is the closing rate, replacing the average exchange rate of each month How ? • Retroactive nature from 01 January 2018 onwards for the income statement and historically for balance sheet • Cash flow: no impact on cash generation (1) European Securities and Markets Authority / International Practices Task Force. 16

  17. Balance Sheet 9M 2018 (1) FY 2017 In millions of Euros 1,601 Non-current Assets 1,481 682 Tangible fixed assets and real estate investments 587 793 Intangible assets 765 126 Others 128 2,047 Current Assets 2,343 72 Inventory 71 1,020 Customer and other receivables 1,151 955 Cash and equivalents and other financial assets 1,121 TOTAL ASSETS 3,648 3,824 1,139 Net Equity 1,143 Share capital 37 37 (53) Treasury shares (53) Retained earnings and other reserves 1,085 1,068 86 Minority interests 74 1,628 948 Non-current Liabilities 1,394 Bank borrowings and other financial liabilities 717 Other non-current liabilities 230 234 882 Current Liabilities 1,733 Bank borrowings and other financial liabilities 701 78 804 Trade payables and other current liabilities 1.031 TOTAL NET EQUITY AND LIABILITIES 3,648 3,824 (1) 2018 figures have been elaborated applying IAS 21 and 29 17

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