RESULTS PRESENTATION. SECOND QUARTER 2019
Cash in the media Over half of US mobile-payment users hate the Congressional Committee calls for a “moratorium" on Facebook's Libra Project . idea of life without cash. A research study conducted by market research It appears that these products may lend company Origin, reveals that consumers prefer not themselves to an entirely new global financial to choose between cash and digital payments, but system that is intended to rival U.S. monetary carry both hand-in-hand. Cash, like other forms of policy and the dollar. This raises serious privacy, payment instruments, continues to play an trading, national security, and monetary policy important role in US society. concerns for the broader global economy. Source: Cashless Culture, The marketer’s Guide Source: House of Representatives (Committee to the Emerging Cashless Consumer on Financial Services) Call to action: British Government is protecting Pay cash for your Google apps. the future of cash. Lack of access to credit and online banking is one In an attempt to guarantee the future of cash and of the many reasons why users choose free-to- ensure its availability for years to come, British play and ad-supported applications rather than in- Chancellor Philip Hammond announced last 3 May app purchases, TechCrunch reports. Millions of 2019 that plans are to be set in place to secure the consumers depend on cash for everyday nation’s access to cash by establishing a task transactions and moving forward with this decision force of cooperative efforts. would gravitate more users and position the company in a competitive, emerging market. Source: British Government Source: Google, TechCrunch . 2
Agenda 1. Highlights of the period 2. Regional dynamics 3. Financial results 4. Conclusions
1. Main themes Highlights of the period 1 • Strong currency depreciation vs. first semester 2018 Macro Environment • In addition, hyperinflation in Argentina (IAS 21 & 29) since Q3 2018 2 • Local currency growth accelerating to 16.8% (1) Agility • EBIT margin improving in constant currency. In euro terms, EBIT margin was impacted by forex, indirect costs, Australia and France 3 • 3 acquisitions completed during the year (2 in LatAm and 1 in AOA) Consolidation • Divestments in South Africa (June) and France (July) already closed 4 • New products reached 15.9% of total sales in 1H 2019 Transformation • NNPP sales grew 49% in euros fueled by Smart Cash, AVOS and ATMS 5 • Free Cash Flow amounted to 51 M€ Cash Flow Generation • Higher investment in Smart Cash solutions (+60%) 4 (1) Includes organic and inorganic growth
1. Agility Highlights of the period Local (1) growth evolution by quarter 18.7% 15.0% 13.1% 12.9% 11.3% 10.5% 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 Both our growth and our EBIT margin improved in constant currency 5 (1) Includes organic and inorganic growth
1. Consolidation Highlights of the period 3 M&A deals in 1Q 2019 (2 in LatAm and 1 in AOA) Divestments in South Africa (June) and France (July) already executed Annual target of M&A investment for 2019 between 50M€ - 150 M€ 6
1. Transformation Highlights of the period Sales (M€) and % New Products New products sales reached 142 +49% M€ (+49% vs. 1H 2018), 150 35 142 contributing close to 16% of total revenues 30 95 100 25 Profitability levels similar to the 20 average of the group 15.9 50 15 10.8 10 Positive performance of SmartCash solutions, AVOS and ATMs 0 5 1H 2018 1H 2019 7 (1) 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 Regional dynamics [ 66% of the total sales in 1H 2019 (1) vs 69% in 1H 2018] Sales (M€) and % NNPP Organic growth acceleration versus previous quarter Org: +12.7% -4% 800 40 Inorg: +6.8% 608 584 600 30 FX (2) : (23.4)% Greater inorganic contribution in 400 16.1 20 both traditional business and new 9.4 200 10 products 0 0 1H 2018 1H 2019 Adverse currency impact vs. 1H 2018 EBIT (M€) and % EBIT -18% NNPP almost doubbling its weight 148 150 40 (16% vs. 9% in 1H 2018) 120 30 24.3 100 20.6 20 50 EBIT margin improving vs. 2H 10 2018 0 0 1H 2018 1H 2019 9 (1) 2019 figures according to IAS 21 & 29 (hyperinflation accounting); (2) Includes FX and IAS 21 & 29 impact.
2. Europe Regional dynamics [ 28% of the total sales in 1H 2019 vs 27% in 1H 2018] Sales (M€) and % NNPP Organic growth in line with previous quarter +7% Org: +4.7% 300 40 253 Inorg: +2.5% 236 30 FX: 0.0% 200 Inorganic growth accelerated by 17.7 20 14.5 new products 100 10 0 0 1H 2018 1H 2019 NNPP propeled by SmartCash solutions, AVOS and ATMs EBIT (M€) and % EBIT EBIT margin eroded by German -15% 20 40 strike and France 16 15 30 13 10 20 Exit of France effective as of the 6.7 5 10 5.3 end of July 2019 0 0 1H 2018 1H 2019 10
2. AOA Regional dynamics [ 6% of the total sales in 1H 2019 vs 4% in 1H 2018] Sales (M€) and % NNPP Australia remains tough +31% Org: (10.2)% 60 40 51 Inorg: +42.5% 30 39 FX: (1.7)% 40 20 Higher inorganic growth due to 20 8.9 10 5.4 the Philippines and Indonesia 0 0 1H 2018 1H 2019 EBIT (M€) and % EBIT Change of trend in NNPP, now resuming the path of growth again +157% 5 40 3 EBIT margin positively impacted 20 5.4 0 by the South African divestment 0 -12.2 -5 -20 -5 1H 2018 1H 2019 11
Agenda 1. Highlights of the period 2. Regional dynamics 3. Financial results 4. Conclusions
3. Profit and loss account Financial results 1H 2019 (1) Million Euros 1H 2018 % VAR 888 +0.6% Sales 883 187 EBITDA 192 -2.7% Margin 21.7% 21.0% % EBIT margin evolution (41) Depreciation (26) +58.4% 146 -12.2% EBITA 166 Margin 18.8% 16.4% (9) Amortization of intangibles (7) +21.8% EBIT 159 137 -13.8% Margin 18.0% 15.4% 19.6 16.5 16.3 (17) 9 -289% Financial result 14.2 13.5 11.9 119 168 -29.0% EBT Margin 19.0% 13.4% 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 Taxes (56) (39) -30.7% Tax rate 33.1% 32.3% According to Net Profit from continuing IAS 21 & 29 81 112 -28.1% operations Margin 12.7% 9.1% Net Consolidated Profit 81 112 -27.6% Margin 12.6% 9.1% 13 (1) 2019 figures according to IAS 21 & 29 (hyperinflation accounting) and IAS 16 (leasings), in force since 3Q 2018 and 1Q 2019, respectively.
3. Cash Flow Financial results 1H 2019 (1) Million Euros 1H 2018 187 EBITDA 192 (15) Provisions and other items (9) SmartCash capex increased +60% (48) Income tax (73) (45) Acquisition of PP&E (43) Changes in working capital (12) (28) Calendar effect impacting our 51 Free Cash Flow 56 working capital % Conversion (2) 78% 76% (9) Interest payments (6) (10) Payments for acquisitions of subsidiaries (18) (59) Dividend payment (45) M&A outflows were offset by the - Restructuring operations 18 South African divestment Others - - (26) Total Net Cash Flow 5 Third instalment of dividend (491) Net financial position (BoP) (424) disbursed (25% vs. 20% in 2018) (26) Net increase / (decrease) in cash 5 (4) Exchange rate (23) (521) Net financial position (EoP) (442) 14 (1) 2019 figures according to IAS 21 & 29 (hyperinflation accounting) and IAS 16 (leasings), in force since 3Q 2018 and 1Q 2019, respectively; (2) Conversion ratio: (EBITDA - Capex) / EBITDA
3. Total Net Debt Financial results Total net debt reconciliation (Jun’19) 73 693 521 -2 Cost of debt optimization • 1.76% en 1H 2019 (2.09% en 1H 2018) 102 ∆ Debt IAS 16 Net financial Deferred Treasury stock Total net position Jun’19 debt Jun’19 payments Total net debt variation (Dec’18 vs Jun’19) 4 693 24 59 547 9 -51 Some deleverage achieved in the quarter Total net debt to LTM EBITDA (4) 2.1x • 102 ∆ Debt (3) Total Free Cash Interest Dividend M&A & Others Total IAS 16 net debt Flow payments payments deferred net debt (1) (2) Dec’18 Jun’19 payments (1) 2018 Total net debt ( 547 M€) includes 491 M€ of net financial position, 58 M€ of deferred payments and 2M€ of treasury stock; (2) Include M&A cash outflow and the variation of deferred payments between 2018 and 2019; (3) Include the fx 15 rate impact and the treasury stock variation; (4) Ratio considers (i) Total net debt as of June 2019 (693) and (ii) LTM EBITDA (335) defined as FY 2018 EBITDA (as reported) – 1H 2018 EBITDA (as reported) + 1H 2019 EBITDA (as reported)
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