Prosegur Cash S A : 3Q Interim Financial Statement

PROSEGUR CASH, S.A. AND SUBSIDIARIES

INTERIM QUARTERLY FINANCIAL INFORMATION Interim financial statements for the third quarter of 2020

(Translation from the original in Spanish. In the event of discrepancy, the Spanish language version prevails)

PROSEGUR CASH

RESULTS THIRD QUARTER 2020

RESULTS FOR JANUARY TO SEPTEMBER 2020 AND FOR JANUARY TO SEPTEMBER 2019

Million euros

CONSOLIDATED RESULTS	3Q 2019	3Q 2020	% Var.
Sales	1,337.1	1,139.7	-14.8%
EBITDA	288.1	197.9	-31.3%
Margin	21.6%	17.4%
Depreciation Property, plant and Equipment	(62.0)	(65.2)	5.2%
EBITA	226.1	132.6	-41.3%
Margin	16.9%	11.6%
Amortization Intangible assets	(13.3)	(16.1)	21.0%
EBT	212.8	116.5	-45.3%
Margin	15.9%	10.2%
Financial Results	(31.8)	(27.8)	-12.4%
BAI	181.0	88.7	-51.0%
Margin	13.5%	7.8%
Taxes	(54.6)	(47.1)	-13.6%
Net Result from continuing operations	126.5	41.6	-67.1%
Net Result	126.5	41.6	-67.1%
Minority Interests	0.2	0.3	-
Consolidated Net Result	126.7	41.8	-67.0%
Margin	9.5%	3.7%
Earnings per share (Euros per share)	0.08	0.03

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

PERFORMANCE IN THE PERIOD

Sales at Prosegur Cash in the period from January to September period of 2020 amounted to EUR 1,139.7 million, down 14.8% on the EUR 1,337.1 million in the same period of the previous year. Organic growth and inorganic growth have had a positive impact of 0.1% and 1.2%, respectively. The negative impact of the exchange rate and the result of applying IAS 29 and 21 has been 16.0%.

Likewise, in the reporting period EBITA amounted to EUR 132.6 million, implying a 11.6% ratio in relation to sales.

The decrease in EBITA compared to the same period the previous year is explained, mainly, by the lower volumes and amounts transported, due to the measures introduced by the governments to tackle the COVID- 19 pandemic and the depreciation of currencies, all of which mitigated partially by the effort made to reduce operating and structural costs.

Consolidated net profit was EUR 41.8 million, compared to EUR 126.7 million in 2019.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

INTERIM STATEMENT (JANUARY - SEPTEMBER 2020)

1. BUSINESS PERFORMANCE

Details of the business performance of the main consolidated income statement items for the period from January to September 2020 and their comparison for the period from January to September 2019 is detailed below:

a) Sales

Sales at Prosegur Cash in the period from January to September period of 2020 amounted to EUR 1,139.7 million, down 14.8% on the EUR 1,337.1 million in the same period of the previous year. Organic growth and inorganic growth have had a positive impact of 0.1% and 1.2%, respectively. The negative impact of the exchange rate and the result of applying IAS 29 and 21 has been 16.0%.

The table below shows the breakdown of Prosegur Cash's sales by geographical area and business line:

Million of euros
Sales		Europe			AOA		Ibero-America		Prosegur Cash Total
	2019	2020	% Var.	2019	2020	% Var.	2019	2020		% Var.	2019	2020		% Var.
Cash in transit	201.1	164.6	-18.2%	57.2	45.1	-21.2%	539.0	450.3		-16.4%	797.2	660.0		-17.2%
% of total	52.4%	51.1%		73.1%	63.4%		61.6%	60.4%			59.6%	57.9%
Cash management	113.9	86.6	-24.0%	16.9	17.9	5.9%	195.4	167.9		-14.1%	326.3	272.5		-16.5%
% of total	29.7%	26.9%		21.6%	25.2%		22.3%	22.5%			24.4%	23.9%
New products	68.7	71.2	3.6%	4.2	8.1	96.1%	140.7	127.9		-9.1%	213.5	207.2		-2.9%
% of total	17.9%	22.1%		5.3%	11.4%		16.1%	17.1%			16.0%	18.2%
Total sales										-14.7%				-14.8%
383.7	322.3	-16.0%	78.3	71.2	-9.1%	875.1	746.2		1,337.1	1,139.7

The lower volumes and amounts transported as a result of the measures introduced by governments to tackle the COVID-19 pandemic, depreciation of currencies and divestment of the businesses in France in 2019 and Mexico during the first quarter of 2020 explained the general decline in Transportation and Cash Management services.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

Moreover, note the sound performance by New Products, which in terms of the percentage of the total sales by region performed strongly in all geographical areas thanks to a combination of organic growth and selective acquisitions.

The table below shows sales growth by region, with a breakdown of the contribution by organic growth, the effects of changes in the consolidation perimeter and the exchange rate impact (the latter includes, for both periods, the effect of applying IAS 29 due to the Argentine economy being considered hyperinflationary):

Millions of euros

Sales

	3Q 2019	3Q 2020	% Var.	Organic	Inorganic Exchange Rate
Europe	383.7	322.3	-16.0%	-11.2%	-4.8%	0.0%
Ibero-America	875.1	746.2	-14.7%	6.3%	3.4%	-24.3%
AOA	78.3	71.2	-9.1%	-13.5%	6.2%	-1.8%
Total sales					1.2%	-16.0%
1,337.1	1,139.7	-14.8%	0.1%

b) Earnings before interest, taxes and amortisation

EBITA for the period from January to September 2020 amounted to EUR 132.6 million, a decrease of 41.3% on the same period of 2019 when the figure was EUR 226.1 million.

The EBITA margin over sales in January-September 2020 was 11.6%, compared to 16.9% in the previous year.

This decrease in EBITA both in absolute and relative terms compared to the same period the previous year is explained, for the most part, by the lower volumes and amounts transported, due to the measures introduced by governments to tackle the COVID-19 pandemic and the depreciation of currencies, all of which mitigated partially by the effort made to reduce operating and structural costs.

Moreover, in the first nine months of 2020, the company performed a series of acquisitions in Brazil, Colombia and Ecuador. These acquisitions are still being integrated, and their margins are lower than the average of the Prosegur Cash Group. The company expects that, as these projected synergies are obtained, these margins will improve and contribute more significantly to growth by the Group.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

c) Financial results

From January to September 2020, Prosegur Cash obtained a negative financial result of EUR 27.8 million compared to a negative result of EUR 31.8 million in the same period of 2019, i.e. an improvement of EUR

4.0 million as compared with the previous year. The main changes in the financial result were as follows:

The financial expenses for payment of interest in January to September 2020 were EUR 29.7 million, compared to EUR 27.3 million in the same period in 2019, accounting for an expense increase of EUR 2.4 million.

Positive exchange rate differences in the period from January to September 2020 amounted to EUR 2.0 million, compared to the negative exchange rate differences of EUR 3.5 million in the same period in 2019, which means an increase in earnings of EUR 5.5 million.

The net finance expenses from the net monetary position in the period from January to September amounted to EUR 0.1 million, compared to EUR 1.0 million in the same period in 2019, which represents a reduction in expenses of EUR 0.9 million.

Net results

The net consolidated result for January to September 2020 amounted to EUR 41.8 million, compared to EUR 126.7 million in the same period in 2019.

The effective tax rate is 53.1% in the third quarter of 2020, compared to 30.1% in the same quarter of 2019.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

2. SIGNIFICANT EVENTS AND TRANSACTIONS Significant events

Share buyback programme

In June 2020 Prosegur CASH initiated a share buyback programme. The Programme will apply to a maximum of 45,000,000 shares.

Reinvestment programme for the third and fourth payment of the interim dividend for 2019

In order to potentially help strengthen the Company's equity position, the Group has offered shareholders the possibility of reinvesting the total net amount of the third and fourth payment of the interim dividend for 2019 in ordinary Prosegur CASH shares.

The Company's majority shareholders, the entity Prosegur Compañía de Seguridad, S.A. and Prosegur Asset Management have accepted the reinvestment programmes.

Capital increases

Having associated the reinvestment programmes, capital increases were executed.

The first capital increase was charged against monetary contributions for a total nominal amount of EUR 421,159, through the issuance of 21,057,953 ordinary shares with a par value of EUR 0.02 each. The share premium was set at EUR 16,381,508.

The second capital increase was charged against monetary contributions for a total nominal amount of EUR 469,561, through the issuance of 23,478,026 ordinary shares with a par value of EUR 0.02 each. The share premium was set at EUR 16,752,174.

COVID-19

As a result of the COVID-19 pandemic, many governments have taken restrictive measures to contain the spread, including: isolation, confinement, quarantine and restriction of the free movement of people, closure of public and private premises, among others.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

This situation is having a significant effect on the world economy due to the interruption or slowing down of the supply chains and the significant increase of economic uncertainty which is evidenced by a greater volatility in the price of assets, exchange rates and reduced long-term interest rates.

The measures adopted by the different governments for combatting the spread of COVID-19 and the circumstances arising from the coronavirus crisis have brought about a fall in the total market accessible by the Prosegur Group for carrying out its business.

Faced with this situation, characterised by a dramatic decline in different sectors of the economy, and absolute uncertainty for the future, the main consequences and decisions adopted derived from this have been the following: the postponement of payment of tax debts in several countries; the granting of non-refundable subsidies awarded by the Administration for maintaining employment in the context of the COVID-19 pandemic in Australia; a loan received at a reduced interest rate in Peru; temporary layoffs have also been made to try to adapt organisational, production and cost structures to the new activity levels; investments in property, plant and equipment have been reduced; unnecessary client service expenses such as travel expenses, consultancy and other fees have been limited; and exemptions from making Social Security contributions have been granted due to temporary workforce reduction plans (ERTE) in Spain, Portugal, Germany, Argentina and Colombia.

Prosegur CASH has adopted a series of measures to mitigate these effects in the countries in which it operates. To mitigate liquidity risks, the Group has drawn down and maintained in bank accounts all the balances of the credits associated with the contracted syndicated financing facilities for the amount of EUR 300,000 thousand. Additionally, associated with the operational risk, due to the restrictive measures implemented by governments to contain the spread, the volume of cash transported has been reduced having a negative impact on Prosegur CASH's business as a result. The company has implemented a cost containment programme and measures to preserve cash generation in order to limit the impact of reduced activity.

Business combinations

In the period January-September 2020, in Latin America Prosegur Cash acquired a number of security companies and assets in Brazil, Ecuador and Colombia providing cash in transit, cash management and administrative banking services.

In February 2020, the sale of 100% of the Cash business in Mexico was completed.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

3. CONSOLIDATED FINANCIAL INFORMATION

The consolidated financial data was prepared in accordance with International Financial Reporting Standards (IFRS-EU) applicable at 30 September 2020. Such accounting standards have been applied both to financial years 2020 and 2019.

The treatment of Argentina as a hyperinflationary economy should be taken into account in order to understand the consolidated financial statements. The financial statements of the Argentine subsidiaries whose functional currency is the Argentine peso have been re-stated in terms of the current unit of measurement at closing date from September 2020 and December 2019 before being included in the consolidated financial statements.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

Millions of euros

	CONSOLIDATED BALANCE SHEET	31/12/2019	30/09/2020
	Non current assets	1,089.1	1,036.8
	Property, plant and equipment	345.4	318.5
	Goodwill	375.5	392.7
	Intangible assets	216.7	194.5
	Rights of use	91.6	74.8
	Investments in associates	7.5	5.8
	Non current financial assets	4.7	5.1
	Other non current assets	47.9	45.3
	Current assets	845.2	898.1
	Inventories	14.1	10.8
	Trade and other receivables	455.9	349.0
	Accounts receivables with Prosegur Group	67.7	32.7
	Treasury and other financial assets	307.4	505.7
	ASSETS	1,934.3	1,934.9
	Equity	243.6	162.2
	Share capital	30.0	30.9
	Retained earnings and other reserves	213.6	131.3
	Non-Current Liabilities	902.8	1,202.9
	Debts with credit institutions and other financial liabilities	646.6	970.7
	Other non-current liabilities	182.2	170.7
	Non-current lease liabilities	74.1	61.5
	Current Liabilities	787.9	569.8
	Debts with credit institutions and other financial liabilities	210.5	170.1
	Current lease liabilities	31.4	27.9
	Trade and other payables	442.2	320.9
	Accounts payable with Prosegur Group	95.7	39.5
	Other current liabilites	8.1	11.5
	EQUITY AND LIABILITIES	1,934.3	1,934.9

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

The main variations in the consolidated balance sheet at 30 September of 2020 compared to the close of financial year 2019 are summarised as follows:

a) Property, Plant and Equipment

Investment in PPE during the period from January to September 2020 amounted to EUR 45.7 million, destined mainly to investment in armouring and properties.

b) Rights of use and lease liabilities

The asset recognised in the balance sheet for the current amount of all future payments associated to operating leases in September 2020 amounted to EUR 74.8 million. Additionally, EUR 61.5 million and EUR 27.9 million, respectively, were recorded under non-current and current lease liabilities.

c) Goodwill

During the first nine months of 2020 no impairment losses in goodwill have been registered.

d) Investments in associates

The change in investments in associates relates mainly to the results at equity-accounted investees.

e) Net Equity

Changes in equity from January to September 2020 were mainly caused by:

• the net profit in the period;
• the performance of the reserve due to cumulative translation differences;
• the share premium of the capital increases made from January to September 2020, and which as of 30 September 2020 came to EUR 33.1 million; and
• the share buyback programmes. At 30 September 2020 own shares amounted to EUR 11.6 million.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

1. Net financial position

Prosegur Cash calculates financial position as total bank borrowings (current and non-current), minus cash and cash equivalents, and minus other current financial assets.

Financial position at 30 September 2020 has amounted to EUR 561.9 million, having decreased by EUR

101.8 million over the amount at 31 December 2019 (EUR 460.1 million). This figure does not include lease liabilities.

At 30 September 2020, the annualised financial position/EBITDA ratio has reached 1.77 and the financial position/shareholder equity ratio has reached 3.46.

At 30 September 2020, the liabilities for debts with credit entities corresponded mainly to the following:

Issue of uncovered bonds due in February 2026 amounting to EUR 600 million.

Prosegur Cash, through its subsidiary Prosegur Australia Investments PTY Limited, contracted a syndicated financing operation as of April 2017, amounting to AUD 70 million with varying maturities from 2021 through 2023.

Since February 2017, Prosegur Cash has had a syndicated financing operation for a credit facility amounting to EUR 300 million maturing in 2025.

g) Trade and other payables

This heading includes mainly trade payables and income tax and other tax payables to public treasury.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

The total net cash flow generated in the period from January to September 2020 was as follows:

Million euros

CONSOLIDATED CASH FLOW	30/09/2020
EBITDA	197.9
Adjustments to profit or loss	38.3
Income tax	(63.1)
Change in working capital	1.5
Interest payments	(12.5)
OPERATING CASH FLOW	162.0
Acquisition of Property, plant and equipment	(45.7)
Payments acquisition of subsidiaries	(100.4)
Dividend payments	(31.5)
Other flows for investment / financing activities	(51.0)
CASH FLOW FROM INVESTMENT / FINANCING	(228.6)
TOTAL NET CASH FLOW	(66.6)
INITIAL NET DEBT (31/12/2019)	(460.1)
Net (Decrease) / Increase in treasury	(66.6)
Exchange rate effect	(35.2)
NET DEBT AT THE END OF THE PERIOD (30/09/2020)	(561.9)

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

e) ALTERNATIVE PERFORMANCE MEASURES

In order to meet ESMA guidelines on Alternative Performance Measures (hereinafter, APMs), the Prosegur Cash Group presents this additional information to enhance the comparability, reliability and understanding of its financial reporting. The company presents its profit/loss in accordance with International Financial Reporting Standards (IFRS-EU). However, Management considers that certain alternative performance measures provide additional useful financial information that should be taken into consideration when assessing its performance. Management also uses these APMs to make financial, operating and planning decisions, as well as to assess the company's performance. The Prosegur Cash Group provides those APMs it deems appropriate and useful for users to make decisions and those it is convinced represent a true and fair view of its financial information.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

APM

Definition and calculation

Purpose

Positive w orking capital is needed to ensure that a company is

A financial measure show ing the Group's operational

liquidity. Working

able to continue operating and has sufficient funds w ith w hich to

Working capital

capital is calculated as current assets less current liabilities, plus deferred

meet its current debt obligations and imminent operating expenses.

tax assets less deferred tax liabilities, less non-current provisions.

The management of w orking capital requires the Group to control

inventories, accounts receivable and payable and cash.

EBIT Margin

EBIT Margin is calculated as results from operating activities divided by

EBIT margin provides a view of the company's operating results in

total revenue.

comparison w ith the total revenue.

Organic Grow th is calculated as the increase

or decrease in revenue

Organic Grow th

provides a

view

of the company's organic

Organic Grow th

betw een

tw o periods adjusted

for acquisition

and

divestitures

and

changes in exchange rate.

revenue grow th.

Company

calculates

Inorganic

grow th for

a

given

period as

the

Inorganic Grow th provides a view of

the company's increase or

Inorganic Grow th

aggregation of all the revenues from all the acquired entities during the

last 12 months.

decrease of revenue due to M&A or Sales variations.

The Group calculates the Effect of exchange rate fluctuations as the

The Effect of exchange rate fluctuations provides the impact of

Effect of exchange rate fluctuations

different of Revenues for the current year less revenues for the current

year at exchange rates of previous year.

the currencies in the company's revenues.

Cash Flow Conversion

The Group calculates Cash Flow

Conversion Rate as the ratio betw een

Cash Flow

Conversion provides the capacity of cash generation

EBITDA minus capital expenditures over EBITDA.

of the company.

Net Financial Debt

The Group calculates Net Financial Debt as the sum of current and non-

Net Financial Debt provides the absolute figure of the Groups level

current financial liabilities (including

of debt.

other non-bank payables corresponding to deferred payments for M&A

acquisitions and financial

liabilities w ith Group companies) less cash and cash

equivalents, less

current investments

in group companies, less other current financial

assets.

EBITA is

calculated

on the Group's Consolidated profit for the

year

EBITA

w ithout factoring in loss from discontinued operation net of tax, income

EBITA provides a view of the company's earnings before interest,

tax expenses, net finance income or cost and amortisation of goodw ill or

taxes and amortisation of goodw ill or of intangible assets.

of intangible assets, but including amortisation of softw are.

EBITDA provides an accurate view of w hat a company is earning

EBITDA is calculated on the Group's Consolidated profit w ithout factoring

or losing from its business. EBITDA excludes non-cash variables,

EBITDA

in loss from discontinued operations net of tax, income tax expenses, net

w hich can

vary

significantly

from

one company to another,

finance income or cost and any depreciation or amortisation of goodw ill.

depending

on the

accounting

policies applied. Depreciation and

amortisation are non-monetary variables and are therefore of

limited interest to investors.

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PROSEGUR CASH

RESULTS THIRD QUARTER 2020

Working Capital (Million Euros)	30.09.2020	31.12.2019
Inventories	10.8	14.1
Trade and other receivables	287.1	381.1
Current receivables with Prosegur group companies	32.7	67.7
Current tax assets	61.9	73.4
Cash and cash equivalents	505.7	307.4
Deferred tax assets	45.3	47.9
Trade and other payables	(246.5)	(346.8)
Current tax liabilities	(70.2)	(93.9)
Financial liabilities	(170.1)	(210.5)
Current payables with Prosegur group companies	(39.5)	(95.7)
Short term lease liabilities	(27.9)	(31.4)
Other current liabilities	(11.5)	(8.1)
Deferred tax liabilities	(38.2)	(37.6)
Provisions	(135.8)	(146.1)
Total Working Capital				203.8		(78.5)
EBIT Margin (Million Euros)
30.09.2020	30.09.2019
EBIT	116.5	212.8
Revenues	1,139.7	1,337.1
EBIT Margin				10.2%				15.9%
Organic Growth (Million Euros)
30.09.2020	30.09.2019
Revenues for current year	1,139.7	1,337.1
Less: Revenues for the previous year	1,337.1	1,217.5
Less: Inorganic Growth	15.7	76.1
Effect of exchange rate fluctuations			(214.5)			(99.2)
Total Organic Growth			1.3			142.7
Inorganic Growth (Million Euros)	30.09.2020	30.09.2019
Europe	(18.5)	2.0
AOA	4.9	56.5
Ibero-America			29.3			17.6
Total Inorganic Growth	15.7	76.1

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RESULTS THIRD QUARTER 2020

Effect of exchange rate fluctuations (Million Euros)	30.09.2020	30.09.2019
Revenues for current year	1,139.7	1,337.1
Less: Revenues for the current year at exchange rate of previous year		1,354.2		1,436.3
Effect of exchange rate fluctuations	(214.5)	(99.2)
Cash Flow Conversion Rate (Million Euros)	30.09.2020	30.09.2019
EBITDA	197.9	288.1
CAPEX	45.7	70.3
Cash Flow Conversion Rate (adjusted EBITDA - CAPEX / adjusted EBITDA)										77%		76%
Net Financial Debt (Million Euros)	30.09.2020	31.12.2019
Financial liabilities	1,140.7	856.9
Leasing financial debt	89.4	105.5
Adjusted financial liabilities (A)											1,230.1			962.4
Not financial liabilities with group companies (B)										-			0.2
Cash and cash equivalents									(505.7)			(307.4)
Less: adjusted cash and cash equivalents (C)								(505.7)			(307.4)
Less: Own Shares (D)							(10.3)			(1.5)
Total Net Financial Debt (A+B+C+D)						714.1			653.7
Less: other non-bank payables (E)					(73.1)			(89.6)
Own Shares (F)				10.3			1.5
Less: Leasing financial debt (G)				(89.4)				(105.5)
Total Net Financial Debt (excluding other non-bank payables corresponding to	561.9	460.1
deferred payments for M&A acquisitions) (A+B+C+D+E+F+G)
EBITA (Million Euros)	30.09.2020	30.09.2019
Consolidated profit for the year	41.8	126.7
Loss from discontinued operation, net of tax	(0.3)	(0.2)
Income tax expenses	47.1	54.6
Net finance income / (costs)	27.8	31.8
Amortizations			16.1			13.3
EBITA	132.6	226.2
EBITDA (Million Euros)	30.09.2020	30.09.19
Consolidated profit for the year	41.8	126.7
Loss from discontinued operations, net of tax	(0.3)	(0.2)
Income tax expenses	47.1	54.6
Net finance income / (costs)	27.8	31.8
Depreciation and amortization			81.3			75.3
EBITDA	197.9	288.2

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