RESULTS PRESENTATION. FIRST QUARTER 2019
Cash in the media
The great return of Sweden to cash.
In 2018, cash in circulation grew by 7.23% compared to the previous year. Among the reasons that could explain this phenomenon we highlight: (i) The change in the recommendation of the authorities, which has been able to encourage consumers to return to cash; (ii) The need for a minimum amount of cash in the society; (iii) Renewal of coins and notes by the Central Bank.
Source: Riksbank
The ECCB performed a pilot test of digital currency but maintained the cash.
The bank has no intention to erase the use of cash noting its convenience and the important role it plays in the economy. ECCB also state that small businesses face real constraints as they are required to pay as much as 3.5% on credit card payments which removes its incentives to offer electronic options.
Source: Eastern Caribbean Central Bank
Venezuela's power outage. Cash to the rescue. In an attempt to improve its economy, the Venezuelan government decided, in February 2018, to move away from paper bills by prioritizing digital payments and, since then, has relied heavily on electronic payments. Unfortunately, during crisis, this mean of payment is not up to the resilience that characterices cash, which resists systems failures and power cuts.
Source: Bloomberg
Amazon says go cash.
Steve Kessel, Senior Vice Presicent of physical stores, announced last April that Amazon Go stores will accept cash alongside its cashier- less technology.
It is a business shift worth celebrating over as it signifies the importance of financial inclusion and the role cash plays in a continuously digitising economy.
Source: CNBC
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Agenda
1.Highlights of the period
2.Regional dynamics
3.Financial results
4.Conclusions
5.Annex
Main themes
1
Macro
Environment
2
Agility
3
Consolidation
4
Transformation
5
Cash Flow
Generation
1.
Highlights of the period
•Strong currency depreciation vs. 1Q 2018
•In addition,hyperinflation in Argentina(IAS 21 & 29) since Q3 2018
•Local currency growth accelerating to 15.0%(1)
•EBIT margin improving in constant currency.In euro terms, EBIT margin was impacted by forex, indirect costs and Australia and France
•3 acquisitions made during the year(2 in LatAm and 1 in AOA)
•Agreement to divest our French operations(to be closed during 3Q 2019)
•New productsreached15.0% of total sales
•NNPP sales grew 37% in eurosfueled by Smart Cash, AVOS and ATMS
•Free Cash Flow amounted to29 M€
•Higher investment in Smart Cashsolutions (+30%).Solid WC performance
(1) Includes organic and inorganic growth | 4 |
Agility
1.
Highlights of the period
Local (1)growth evolution by quarter
13.1% | 15.0% | |||
11.3% | 12.9% | |||
10.5% | ||||
1Q 2018 | 2Q 2018 | 3Q 2018 | 4Q 2018 | 1Q 2019 |
Both our growth and our EBIT margin improved in constant currency
(1) Includes organic and inorganic growth | 5 |
Consolidation | 1. |
Highlights of the period | |
3 transactions closedin 2019 (2 in
LatAm and 1 in AOA)
Westrengthen our footprint andproduct portfolio
Agreement to sell our operations
in France(expected to be completed during 3Q 2019)
Annual targetof M&A investment for 2019 between 50M€ - 150 M€
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Transformation
1.
Highlights of the period
New Products sales reached 65
M€ in 1Q 2019(vs. 47 M€ in 1Q
2018)
Growth rate of 37%(>50% at constant currency)
NNPP now representing 15% of total sales(vs. 10.5% in 1Q 2018)
Positive overall performanceof SmartCash solutions, AVOS and ATMs
7
Agenda
1.Highlights of the period
2.Regional dynamics
3.Financial results
4.Conclusions
5.Annex
LatAm
Sales (M€)
-10% | ||||||||
Org: | +10.2% | |||||||
314 | 283 | |||||||
Inorg: | +6.7% | |||||||
FX(2): (26.9)% | ||||||||
1Q 2018 | 1Q 2019 |
New Products (M€)
+46% | |||||||||
Over sales: | |||||||||
41 | |||||||||
1Q | 18: | 9.0% | |||||||
28 | 1Q | 19: 14.6% | |||||||
1Q 2018 | 1Q 2019 |
2.
Regional dynamics
65% of Total Prosegur Cash salesin 1Q 2019(1)(70% in 1Q 2018)
Major countries growth slowed downas a consequence of macroeconomic and political environment
Greater inorganic contribution due tonew geographies andbolt-onacquisitions
Adverse currency impactvs. 1Q 2018(3)
Positive momentum ofSmartCash solutions and AVOS
(1) 2019 figures according to IAS 21 & 29 (hyperinflation accounting); (2) Includes FX and IAS 21 & 29 impact; (3) Includes IAS 21 & 29 | 9 |
Europe
Sales (M€)
+7%
116 | 124 | Org: | +4.7% | ||||
Inorg: | +2.3% | ||||||
FX: | 0.0% | ||||||
1Q 2018 | 1Q 2019 |
New Products (M€)
+30% | |||||||
Over sales: | |||||||
22 | |||||||
1Q 18: 14.7% | |||||||
17 | |||||||
1Q 19: 17.9% | |||||||
1Q 2018 | 1Q 2019 |
2.
Regional dynamics
29% of Total Prosegur Cash salesin 1Q 2019 (26% in 1Q 2018)
Healthy organic growthimpacted byone-offs
Inorganic growth in new servicescomplementing our traditional business
France exitscheduled for second half 2019 (3Q)
Development ofAVOS and SmartCash solutionson track
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AOA
Sales (M€)
+30% | ||||||||
25 | Org: | (9.8)% | ||||||
Inorg: +41.9% | ||||||||
20 | ||||||||
FX: | (1.7)% | |||||||
1Q 2018 | 1Q 2019 |
New Products (M€)
-37% | Over sales: | |||||||
2 | ||||||||
1Q 18: | 10.8% | |||||||
1 | 1Q 19: | 5.2% | ||||||
1Q 2018 | 1Q 2019 |
2.
Regional dynamics
6% of Total Prosegur Cash salesin 1Q 2019 (4% en 1Q 2018)
Toughcomparison vs. 1Q 2018 in
Australia
Higher inorganic growth coming from thePhilippines
Negative forex impact, although to a lesser extent than in 2018
NNPP lowered by thedecrease in
ATM services
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Agenda
1.Highlights of the period
2.Regional dynamics
3.Financial results
4.Conclusions
5.Annex
Profit and loss account
Million Euros | 1Q 2018 | 1Q 2019(1) | % VAR |
Sales | 450 | 432 | -3.9% |
EBITDA | 105 | 86 | -18.1% |
Margin | 23.3% | 19.9% | |
Depreciation | (13) | (20) | 56.2% |
EBITA | 92 | 66 | -28.5% |
Margin | 20.5% | 15.2% | |
Amortization of intangibles | (4) | (4) | 11.5% |
EBIT | 88 | 61 | -30.2% |
Margin | 19.6% | 14.2% | |
Financial result | 6 | (10) | -276.0% |
EBT | 94 | 51 | -45.7% |
Margin | 20.9% | 11.8% | |
Taxes | (32) | (20) | -37.4% |
Tax rate | 33.6% | 38.7% | |
Net Profit from | 62 | 31 | -49.8% |
continuing operations | |||
Margin | 13.9% | 7.2% | |
Net Consolidated Profit | 62 | 31 | -49.5% |
Margin | 13.8% | 7.2% | |
3.
Financial results
% EBIT margin evolution
19.6
16.3
1Q 2Q
2018 2018
According to
IAS 21 & 29
(1) 2019 figures according to IAS 21 & 29 (hyperinflation accounting) and IAS 16 (leasings), in force since 3Q 2018 and 1Q 2019, respectively. | 13 |
Cash Flow
Million Euros | 1Q 2018 | 1Q 2019(1) |
EBITDA | 105 | 86 |
Provisions and other non-cash items | 17 | 12 |
Income tax | (26) | (27) |
Acquisition of PP&E | (19) | (18) |
Changes in working capital | (30) | (24) |
Free Cash Flow | 47 | 29 |
% Conversion(2) | 82% | 79% |
Interest payments | (6) | (8) |
Payments for acquisitions of subsidiaries | (7) | (19) |
Dividend payment | (21) | (29) |
Restructuring operations | 18 | - |
Others | - | - |
Total Net Cash Flow | 30 | (29) |
Net financial position (BoP) | (424) | (491) |
Net increase / (decrease) in cash | 30 | (29) |
Exchange rate | (6) | (4) |
Net financial position (EoP) | (400) | (524) |
3.
Financial results
Provisions and othernon-cash affected by cut-offdates (18M€)
SmartCashcapexincreased +30%
Working capital improvement
Eurobond and RCFinterest expensespayment
M&Ainvestmentin LatAm
Second instalmentof dividenddisbursed (25% vs. 20% in 2018)
(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 | 14 |
Total Net Debt
Total net debt reconciliation (Mar'19)
3.
Financial results
71 | 699 | |
524 | -2 | |
Cost of debt reduction | ||||||
106 | •1.80%en 1Q 2019 (2.1% en 1Q 2018) | |||||
∆ Debt | Net financial | Deferred | Treasury | Total | ||
IAS 16 | position | payments | stock | net debt | ||
Mar'19 | Mar'19 | |||||
Higher leverage ratio | ||||||
Total net debt variation (Dec'18 vs Mar'19) | •Total net debt to LTM EBITDA(4)2.2x |
547 | 8 | 29 | 32 | 4 | 699 |
-29 |
106
∆ Debt | Total | Free Cash | Interest | Dividend | M&A & Others(3) | Total |
IAS 16 | net debt | Flow | payments | payments | Deferred | net debt |
Dec'18 | payments(2) | Mar'19 |
S&P rating unchanged(October 2018)
•Rating BBB, outlook stable
(1) 2018 Total net debt (547 M€) include 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 rate | 15 |
impact and the treasury stock variation; (4) Ratio considers (i) Total net debt as of March 2019 (699) and (ii) LTM EBITDA (321) defined as FY 2018 EBITDA (as reported) - 1Q 2018 EBITDA (as reported) + 1Q 2019 EBITDA (as reported) |
Balance sheet
3.
Financial results
Million Euros | FY 2018 | 1Q 2019(1) | |
Non-current assets | 937 | 1,078 | |
Tangible fixed assets | 333 | 423 | |
Intangible assets | 535 | 569 | |
Others | 69 | 86 | Tangible and intangible |
Current assets | 769 | 757 | asset increase as a result |
Inventories | 20 | 22 | |
of M&A and the application | |||
Trade receivables and others | 475 | 470 | |
of IAS 16 | |||
Cash and cash equivalents | 274 | 264 | |
Non-current assets held for sale | 1 | 1 | |
TOTAL ASSETS | 1,706 | 1,834 | |
Net Equity | 238 | 240 | |
Non-current liabilities | 866 | 961 | |
Financial liabilities | 688 | 751 | |
Other non-current liabilities | 178 | 209 | Higher debtdue to IAS 16 |
Current liabilities | 602 | 634 | |
Financial liabilities | 132 | 213 | |
Other liabilities | 470 | 421 | |
Liabilities held for sale | 0 | 0 | |
TOTAL EQUITY AND LIABILITIES | 1,706 | 1,834 | |
(1) 2019 figures according to IAS 21 & 29 (hyperinflation accounting) and IAS 16 (leasings), in force since 3Q 2018 and 1Q 2019, respectively. | 16 |
Agenda
1.Highlights of the period
2.Regional dynamics
3.Financial results
4.Conclusions
5.Annex
Final remarks
4.
Conclusions
Agility
Consolidation
Transformation
Cash Flow generation
18
Agenda
1.Highlights of the period
2.Regional dynamics
3.Financial results
4.Conclusions
5.Annex
Accounting Standars
5.
Annex
IAS 21 & 29
IAS 16
•Balance:Restatement of non-monetary assets & liabilities (formerly at historical cost)
•P&L:(i) Restatement of income statement captions; (ii) Higher D&A due to the restatement of Balance Sheet items; (iii) "Euro" conversion at the end of the period exchange rate (previously at the average exchange rate);
•Cash Flow:no impact in cash flow generation
•Balance:Restatement of asset and liabilities captions. Higher assets and debt due to the capitalization (at present value) of all the future rents already committed
•P&L:(i) Restatement of income statement captions; (ii) The operating lease expense recorded within the EBITDA is replaced by higher depreciation (straight line depreciation of assets) and higher financial expenses (due to the lease interest);
•Cash Flow:no impact in cash flow generation
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Legal disclaimer
This document has been prepared exclusively by Prosegur Cash for use as part of this presentation.
The information contained in this document is provided by Prosegur Cash solely for information purposes, in order to assist parties that may be interested in undertaking a preliminary analysis of it; the information it contains is limited and may be subject to additions or amendments without prior notice.
This document may contain projections or estimates concerning the future performance and results of Prosegur Cash's business. These estimates derive from expectations and opinions of Prosegur Cash and, therefore, are subject to and qualified by risks, uncertainties, changes in circumstances and other factors that may result in actual results differing significantly from forecasts or estimates. Prosegur Cash assumes no liability nor obligation to update or review its estimates, forecasts, opinions or expectations.
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This document has been provided for informative purposes only and does not constitute, nor should it be interpreted as an offer to sell, exchange or acquire or a request for proposal to purchase any shares in Prosegur Cash. Any decision to purchase or invest in shares must be taken based on the information contained in the brochures filled out by Prosegur Cash from time to time.
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INVESTOR RELATIONS (pablo.delamorena@prosegur.com)
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Prosegur Cash SA published this content on 07 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 07 May 2019 07:27:16 UTC