9M 2020
Results Presentation
Investor Relations Department
05 / November / 2020
COVID19
IMPACT & RESPONSE
Cash
- The negative effect of the pandemic remains in Ibero-Americaas Europe & APAC slowly recovers normality
- Temporary loss of volumes in the LatAm region due to business closedowns and confinements
- Partial maintenance of government initiatives to distribute aids to population
Security
- Positive evolution in Europe supported by COVID-Free solutions
- IberoAmerica highly affected by confinements and closures as well as legal restrictions on cost adjustments
- Security France sale completed
Alarms
- Movistar Prosegur Alarmas starts sales in Spain with strong growth in new additions
- The commercial stoppage is maintained in some Ibero-American countries due to confinements
- Slight improvement in Churn-rate as business activity recovers
Grupo
- Positive cashflow generation maintained in the period, despite the complexity of the current situation
- The Group prepares for an environment of great global uncertainty
2
RELEVANT | 9M 20 |
INDICATORS | |
OF THE PERIOD |
REVENUES | PROFITABILTY | CASH FLOW | ||
• Total sales of 2,620 million | • Recurring EBITA of 201 million | • | Sustained improvement in | |
• Positive organic growth despite | excluding efficiency plans | operating cashflow | ||
the persistence of the crisis in Latin | • The structural improvement of | • | Excellent working capital | |
America | margins in Security continues, | management | ||
• | Strong accounting effect of | driven by new products. | • Good result of the cashflow | |
divestments (France) and | • Covid19 Subsidies perceived: 15 | protection measures | ||
currencies | million | • Capex reduction of more than | ||
• | Movistar Prosegur Alarmas | • EBITA continues to be primarily | 35% in the period | |
(MPA) starts sales tripling the rate | affected by negative FX | • Reinforcement of collection | ||
of previous customer acquisition | ||||
policies |
LIQUIDITY
&
DEBT
- Stable outlook BBB rating confirmed by S&P
- Leverage ratio slightly affected by the treasury stock buy-backprogram, divestment in France, and temporary deterioration of results
- Dividend reinvestment program
3
P&L
-15.4% | ||||
3,098 | +0.7% | |||
-4.5% | ||||
-11.6% | 2,620 | |||
9M 2019 | Org | Inorg | FX(1) | 9M 2020 |
- Positive organic growth, despite the strong impact Covid19
- Revenues main deterioration cause is due to negative translational effect of currency
- EBITA of 176 million includes restructuring costs applied in Cash
- Temporary increase in tax rate due to mix change and hyperinflation effect
Consolidated Results | 9M 2019 | 9M 2020 (2) | % | |
(€ millions) | Variación | |||
Sales | ||||
3,098 | 2,620 | -15.4% | ||
EBITDA | 378 | 292(3) | -22.7% | |
Margin | 12.2% | 11.2% | ||
Depreciation | (129) | (116) | ||
EBITA | 249 | 176 | -29.2% | |
Margin | 8.0% | 6.7% | ||
Amortization of intangibles | (21) | (22) | ||
EBIT | ||||
228 | 154 | -32.5% | ||
Margin | 7.4% | 5.9% | ||
Financial result | (45) | (36) | ||
Profit before tax | ||||
183 | 119 | -35.2% | ||
Margin | 5.9% | 4.5% | ||
Tax | (65) | (63) | ||
Tax rate | 35.7% | 53.3% | ||
Net Profit | 118 | 55 | -52.9% | |
Minority Interest | 35 | 10 | ||
Consolidated Net Profit | 83 | 45 | -45.6% | |
- Includes exchange rate effect and IAS 21&29
- Excluding extraordinary results in the period, mainly resulting from the exchange of participations between Prosegur and Telefónica and France Security
(3) Reported EBITDA is minored by €25mm of Cash efficiency programs and improved in €15mm of perceived Covid19 subsidies | 4 |
CONSOLIDATED REVENUES BY BUSINESS & REGION
- Cash maintains positive growth in local currency, reflecting the gradual recovery that is being experienced, mainly in Europe
- Security shows the deconsolidation of France and negative effect of major LatAm currencies
- Alarms reflects the commercial stoppage during the confinements and the accounting deconsolidation of the Spanish connections
- Geographically, the largest reduction occurs in Europe, combining the slow market situation with the exit from France
- Ibero-America grows 7.2% in local currency. The result in euros is impaired, fundamentally, by negative FX
- RoW maintains positive growth, despite the deterioration suffered in the USA by Covid, supported by the incipient recovery in Australia
- Local Currency Growth (1)
- Growth in Euros
9M 2019
9M 2020
Revenues
by
Business
Revenues
by
Region
+1.3% | -7.3% | -17.8% |
-15.3%
-14.8%
1,555
1,337 | 1,318 | -26.3% | |||||
1,140 | |||||||
205 | 151 | ||||||
Cash | Security (2) | Alarms |
-18.2% | +7.2% | +3.0% | ||||||||||
-18.2% | -15.7% | |||||||||||
1,535 | ||||||||||||
1,316 | 1,293 | +1.3% | ||||||||||
1,077 | ||||||||||||
246 | 250 | |||||||||||
Europe(3) | Ibero- | RoW | ||||||||||
America | 5 | |||||||||||
Amounts in Millions of Euros - (1) Includes organic and acquisition growth - (2) Excludes CyberSecurity sales and France Security in 2020 - (3) Excludes France Security in 2020
CONSOLIDATED PROFITABILITY & CASH FLOW GENERATION
PROFITABILITY | CASH FLOW GENERATION |
+13.5% | |||||
-19.1% | 209 | ||||
-29.2% | 184 | ||||
8.0% | 25 | 80.2% | |||
249 | 6.7% | 201 | 7.7% | ||
176 | 53.6% | ||||
9M 2019 | 9M 2020 | 9M 2019 | 9M 2020 |
- Recurrent EBITA Growth
- Reported EBITA Growth
EBITA Margin | % Cash/EBITDA(1) | ||
CASH Efficiency Plans | Recurrent EBITA | Operating Cash Flow | |
Reported EBITA | |||
Recurrent EBITA margin of 7.7% (excluding Cash restructuring costs) is close to that obtained in the same period in 2019
Temporary improvement in the generation of | |
operating cash flow continues. Driven by | |
efficiency in collections and cost containment | |
measures | |
Amounts in millions of Euros (1) Normalizing the impact of IAS16. Includes CASH efficiency plans and subsidies | 6 |
Results by business line
Cash - Security - Alarms
PROSEGUR CASH
REVENUES | NEW PRODUCTS | PROFITABILITY | ||
+200 pb
Recurrent EBITA Margin
6.4%
16.2%
11.8%
8.7%
18.2%
-30.1% | Efficiency Plans | |||
226 | Reported EBITA | |||
16.9% | 158 | |||
25 | ||||
13.8% | 133 | (2) | ||
-14.8% | |||
1,337 | +0.1% | +1.2% | |
-16.0% | |||
1,140 | |||
9M 2019 | Org | Inorg | FX(1) 9M 2020 |
- Flat organic growth, affected by comparable effect vs. additional non-recurringvolumes obtained in 3Q19
- Negative translational effect of currencies in both Argentina and Brazil
- The negative effect of COVID remains in IberoAmerica, while Europe & APAC initiate gradual and progressive recovery
FY 2016 FY 2017 FY 2018 FY 2019 9M 2020
- New Products represent 18.2% of total sales
- 15% "SmartCash" sales growth
- AVOS sales growth close to 9%
- Integrated ATM Management operations initiated in Australia
9M 2019 | 9M 2020 |
- Recurring EBITA (excluding efficiency plans) of 158 million
- Profitability deterioration explained by:
- Lower volume and amounts transported
- Translational impact of currency depreciation
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Amounts in € Millions - (1) Includes exchange rate effect and IAS 21&29 - (2) Reported EBITA of €133 mm. includes efficiency programs
PROSEGUR SECURITY
REVENUES | NEW PRODUCTS | PROFITABILITY (3) | ||
-15.3% | ||
1,555 | ||
-1.4% | -5.9% | |
-8.0% | 1,318 | |
(1) | (2) |
17%
20%
+500 pb
34%
28%
23%
+0.4% | EBITA Margin | |
41 | 41 | EBITA |
3.1% | ||
2.6% |
9M 2019 Org | Inorg FX | 9M 2020 |
- Slight reduction in organic growth, affected by the general slowdown in all economies
- Deconsolidation effect of France in inorganic
- Incipient volume recovery in Spain and Brazil with profitability improvements in both geographies
FY 2016 FY 2017 FY 2018 FY 2019 9M 2020
- Increased penetration of Integrated Security Solutions up to 34% of sales
- Strong demand for "COVID Free" Solutions that facilitates the entry of new security monitoring solutions in customers
9M 2019 | 9M 2020 |
- Excellent Profitability improvement driven by:
- Increase in sales of solutions with greater added value and technological components, mainly in Europe
- Good execution in transferring inflation rise to market
- Effect of operating cost adjustment measures, supported by government aids
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Amounts in € Millions - (1)Includes Currency Effect and IAS 21&29 - (2)Excludes Cybersecurity 2020 & Security France 2020 - (3) Excludes Overhead Costs, Cybersecurity 2020 & Security France 2020
PROSEGUR ALARMS
TOTAL INSTALLED BASE | REVENUES | ARPU | ||
547 | 578 | 585 | ||
499 | ||||
424 | ||||
354 | ||||
2016 | 2017 | 2018 | 2019 | 9M 2020 |
- Total Contract Base improves due to MPA growth.
- Growth ex-Spain recovers gradually, despite the persistence of confinements in some regions
- Business activity is gradually returning to pre- Covid19 productivity levels
-26.3% | ||||
205 | +13.9% | -31.7% | ||
-8.5% | 151 | |||
9M 2019 | Org | Inorg | FX(1) | 9M 2020 |
- Excellent organic growth of more than 13% despite the remains of commercial stoppage in various geographies
- Volume reduction mainly explained by the deconsolidation of Spain and negative FX in Latin America
38 36 38 36
39
32
2016 | 2017 | 2018 | 2019 | 9M 2020 |
- ARPU decreases slightly to € 32, once Spain is deconsolidated, affected by COVID crisis and the adverse currency effect
- Movistar Prosegur Alarmas maintains their ARPU above € 39
- Churn improvement in the quarter, as activity in unbanked small business and residential clients recovers
10
Amounts in € Millions - BTC (Total Contract Base) in thousands of connections- ARPU in € per month - (1)Includes exchange rate effect and IAS 21&29
Financial
Information
Cashflow - Financial Position - Balance Sheet
CONSOLIDATED
CASH FLOW
Amounts in € millions | 9M 2019 | 9M 2020(1) | ||
Operating Cash Flow by quarters (accumulated) | EBITDA | 378 | 292 | |
2017 | 351 343 | Provisions and other non-cash items | 4 | 33 | ||
2018 | 330 | Tax on profit (ordinary) | (83) | (84) | ||
2019 | ||||||
2020 | Changes in working capital | (103) | (14) | |||
143 | Interests payments | (11) | (20) | |||
98 | Operating Cash Flow | 184 | 209 | |||
24 40 | 81 | 82 | Acquisition of property, plant & equipment | (143) | (92) | |
22 | Payments for acquisitions of subsidiaries | (124) | (131) | |||
6 | Dividend payments | (82) | (49) | |||
Q1 | 6M | 9M | FY | |||
Treasury stock & Others | 13 | (156) | ||||||
Cash flow from investing / financing | (336) | (427) | ||||||
Total net cash flow | (151) | (218) | ||||||
• Continued improvement in cash flow despite | ||||||||
Initial net financial debt | (425) | (649) | ||||||
adverse FX, thanks to: | ||||||||
• Adequate management of working capital | Net increase / (decrease) in cash | (151) | (218) | |||||
• Positive temporary effect of tax deferral | Exchange rate | (27) | (52) | |||||
• Capex containment and dividend reinvestment | Net Financial Debt (2) | (603) | (920) | |||||
programs | (1) Excluding extraordinary results of the exercise, mainly resulting from the exchange of participations between Prosegur and Telefónica and Security France | 12 | ||||||
- Excludes IAS 16 related debt
FINANCIAL POSITION
BBB stable
!
- Temporary increase in net financial debt derived mainly from the shares buy-backprogram, divestment in France, and temporary deterioration of results
- Confirmation of BBB Stable Outlook rating by S&P (October 2020)
- Average cost of corporate debt: Reduction of 25 basis points compared to the same period of fiscal year 2019 (1.13% vs. 1.38%)
2.3x | 1.3x |
1.38% | 1.36% | 1.23% | 1.16% | 1.13% |
146 | 107 | 89 | ||
109 | 116 | |||
603 | 649 | 839 | 844 | 920 |
132 | 132 | ||||||||||||||||||||||
120 | 95 | ||||||||||||||||||||||
97 | |||||||||||||||||||||||
-112 | -102 | -96 | -132 | ||||||||||||||||||||
-15 | |||||||||||||||||||||||
Sep. 2019 | Dic. 2019 | Mar. 2020 | Jun. 2020 | Sep. 2020 | |||||||||||||||||||
Average Cost of Debt | Deferred Payments | Net Financial Debt | IAS16 Debt | Treasury Sotck (1) | |||||||||||||||||||
(1) | Treasury stock of Prosegur and Prosegur Cash at closing market price of the period | 13 | |||||||||||||||||||||
(2) | Includes IAS 16 debt and excludes extraordinary effects in EBITDA and Security France |
BALANCE SHEET
- Comfortable level of liquidity and firepower
- Excellent long-term debt maturity profile, exceeding 85% of total debt
- Acquisition of treasury shares
- Security France considered Available for Sale. Effective sale October 2020
In € Millions | FY 2019 | 9M 2020 | |
Non-current assets | 1,990 | 2,141 | |
Tangible fixed assets and real estate investments | 881 | 724 | |
Intangible assets | 984 | 888 | |
Others | 125 | 528 | |
Current assets | 1,986 | 2,138 | |
Inventory | 65 | 49 | |
Customer and other receivables | 1,071 | 846 | |
Assets available for sale | - | 67 | |
Cash and equivalents and other financial assets | 850 | 1,176 | |
TOTAL ASSETS | 3,976 | 4,278 | |
Net equity | 898 | 789 | |
Share capital | 36 | 36 | |
Treasury shares | (108) | (176) | |
Retained earnings and other reserves | 898 | 886 | |
Minority interest | 72 | 42 | |
Non-current liabilities | 1,751 | 2,279 | |
Bank borrowings and other financial liabilities | 1,452 | 1,959 | |
Other non-current liabilities | 299 | 320 | |
Current liabilities | 1,327 | 1,210 | |
Bank borrowings and other financial liabilities | 302 | 328 | |
Liabilities available for sale | - | 53 | |
Trade payables and other current liabilities | 1,025 | 830 | |
TOTAL NET EQUITY AND LIABILITIES | 3,976 | 4,278 |
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ESG Commitment
- Cash target to reduce CO2 emissions (1.5% in 2020)
- New armored hybrid / electric fleet and light fleet carsharing model in Spain, to mitigate carbon footprint
- Reduction on consumption of operating plastics, and agreements for the recycling of tires.
- During the pandemic we have reinforced our priorities
- Employees: Protection and teleworking
- Clients: Business continuity
- Communities: Logistical support
- Granting of new functions to the Board and creation of the Sustainability and Good Governance Commission (CSGNR)
- Publication of the new Human Rights Policy.
- Workplan. Update Code of Ethics
Significant SDGs
for Prosegur
15
FINAL
REMARKS
-
We are still under the negative effects of the pandemic, that is reducing its impact in Europe but still maintains it in
IberoAmerica
-
We are still under the negative effects of the pandemic, that is reducing its impact in Europe but still maintains it in
- • The behavior of the different business lines is showing a great capacity for resistance and adaptation
- We remain cautious upon the high volatility of the environment, although confident in PROSEGUR's ability to face what future may bring
- Security takes advantage of the high demand for COVID-Freesolutions to increase sales of new products and improve its profitability.
- • Cash has not suffered organic deterioration, despite the sharp reductions in volume transported during the pandemic
- Alarms quickly recovers business activity, even in still confined geographies. Growth rate triples in Spain
• Profitability improves significantly in Security and Alarms, while | ||
in Cash it is still under the combined temporary effects of the | ||
3 | translational currency impact and the reduction of commercial | |
activity in Ibero-America | ||
• | We maintain active all the spending containment measures to | |
support the profitability of the businesses, as well as the | ||
commitment to investments for digital transformation | ||
• | The Group maintains an excellent liquidity profile and cash | |
generation capacity | ||
4 | • BBB Stable credit rating renewed by Standard & Poor's | |
• | Commitment with Sustainability that is now supervised by a | |
specific committee of the Board | ||
• | Financial solidness and strength of the business model, to face | |
the post-pandemic global recovery period |
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Any decision to purchase or invest in shares must be taken based on the information contained in the brochures filled out by Prosegur from
Antonio de Cárcer | Cristina Casado |
Director of Investor Relations | Investor Relations |
Tel: +34 91 589 83 29 | Tel: +34 91 589 83 47 |
antonio.decarcer@prosegur.com | cristina.casado@prosegur.com |
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Prosegur Compañía de Seguridad SA published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2020 08:11:04 UTC