COMPANY PRESENTATION
INVESTOR RELATIONS DEPARTMENT
1
COMPANY PRESENTATION INVESTOR RELATIONS DEPARTMENT 1 DISCLAIMER - - PowerPoint PPT Presentation
COMPANY PRESENTATION INVESTOR RELATIONS DEPARTMENT 1 DISCLAIMER This presentation contains forward-looking statements and information relating to regulation in countries in which the Company and its subsidiaries do business; [Prosegur
COMPANY PRESENTATION
INVESTOR RELATIONS DEPARTMENT
1
DISCLAIMER
COMPANY PRESENTATION 2019 This presentation contains forward-looking statements and information relating to [Prosegur Compañía de Seguridad, S.A.] (the “Company”) and its subsidiaries that are based on the current beliefs of the Company’s management, key expectations and assumptions, as well as information currently available to the Company and projections of future events as well as assumptions made and information currently available to the Company. These forward-looking statements speak only as of the date they are made. These forward-looking statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends,” and similar words or phrases. Other forward-looking statements can be identified in the context in which the statements are made or by the forward- looking nature of discussions of strategy, plans or intentions. Such forward- looking statements, as well as those included in any other material discussed at any management presentation, reflect the current views of the Company with respect to future events and are subject to known and unknown risks, uncertainties and key assumptions about the Company and its subsidiaries and investments, including, among other things, the development of their businesses, trends in their operating industry, and future capital expenditures. In light of these risks, uncertainties and assumptions, the events or circumstances referred to in the forward-looking statements may not occur. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation. Many factors could cause the actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others: changes in general economic, political, governmental and business conditions globally and in the countries in which the Company and its subsidiaries do business; changes in interest rates; changes in inflation rates; changes in prices; trends affecting the Company and its subsidiaries businesses, financial condition, results
regulation in countries in which the Company and its subsidiaries do business; acquisitions, investments or divestments which the Company and its subsidiaries may make in the future; the Company and its subsidiaries capital expenditures plans; their estimated availability of funds; their ability to repay debt with estimated future cash flows; security threats worldwide and losses of customer valuables; failure to maintain safe work environments; effects of catastrophes, natural disasters, adverse weather conditions, unexpected geological or other physical conditions, or criminal or terrorist acts; public perception of the Company and its subsidiaries businesses and reputation; insufficient insurance coverage and increases in insurance cost; loss of senior management and key personnel; unauthorized use of the Company’s intellectual property and claims of infringement by the Company or its subsidiaries of others’ intellectual property; changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should any other unknown risk occur,
vary materially from those described herein as anticipated, believed, estimated, expected or targeted. No one intends, or assumes any obligations, to update or revise these forward- looking statements, whether as a result of new information, future events or
reflected in the forward-looking statements. As a result of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. Not for general release, publication or distribution, directly or indirectly, in
Jurisdiction in which the distribution or release would be unlawful. These materials do not constitute an offer to sell, or a solicitation of offers to purchase or subscribe for any securities in the United States or any other
registered under the U.S. Securities Act of 1933, as amended, and may not be
exemption from registration requirements. There is no intention to register any portion of any offering in the United States or to conduct a public offering of securities in the United States.
2
COMPANY PRESENTATION FY 2019
3
PROSEGUR GROUP Prosegur: a success story Since its foundation in 1976, Prosegur has grown to become one of the undisputable global leaders in the security industry…
COMPANY PRESENTATION FY 2019 4 Expansion in LatAm & Europe and Increase of services portfolio
FM and Cleaning businesses
France
Business Unit
Colombia
1998 2008
2,052
Foundation and initial Expansion
Stock Exchange
1976 1997
480
Consolidation of the integrated model and expansion into Asia- Pacific
for different client sectors
and Germany
Issuance of a € 500 million Bond and Entry into Australia
2009 2014
3,783
Yearly revenues of last year in the period in €Million
Focus on Business Lines Profitability and continual expansion
around business lines vs. geographies
services business unit
& Philippines
2015 2018
3,939
PROSEGUR TODAY
>9,000
ARMORED VEHICLES
>100,000
MANAGED ATMS
+550,000 ALARM
CONNECTIONS OVER 220 FULLY INTEGRATED ACQUISITIONS
25
COUNTRIES
+170,000
EMPLOYEES WORLDWIDE
COMPANY PRESENTATION FY 2019 5
A GLOBAL SECURITY COMPANY WITH A LEADERSHIP POSITION IN FOCUS MARKETS
WE ARE MARKET LEADERS IN 16 OUT OF OUR 25 GEOGRAPHIES
Cash in transit & cash management Guarding and technology Alarm Monitoring Position in the market share ranking
1
Prosegur Intl’ Player 1 Intl’ Player 2 Intl’ Player 3 Intl’ Player 4 #2 #3 #1 #4 #2 #1 #3 COMPANY PRESENTATION FY 2019
Source: DBK, Aproser and internal sources
6
CHINA
5
SINGAPORE
1
INDIA
2
PHILIPPINES
1
AUSTRALIA
2
GERMANY
1
TURKEY
n/aFRANCE
3
PORTUGAL
1
SPAIN
1
SOUTH AFRICA
n/aUSA
n/aCHILE
1
PERU
1
COLOMBIA
1
URUGUAY
1
ARGENTINA
1
PARAGUAY
1
BRAZIL
1
MEXICO
3
GUATEMALA HONDURAS COSTA RICA NICARAGUA EL SALVADOR
1
DELIVERING SUPERIOR GROWTH AND SHAREHOLDER RETURNS
CUMULATIVE DIVIDEND DISTRIBUTED 2004-2017:
€985m
Figures in €m (1) Market Cap as of December 2017 COMPANY PRESENTATION FY 2019 4,291 1,112
+286%
4,042 (1) 894
+352%
Revenue (€m) Market Cap (€m) EBIT (€m)
+270%
2017 2004 2017 2004 2017 2004 392 106
7
Publicly listed in 2017
ORGANISATIONAL MODEL: “ONE GROUP, THREE BUSINESSES”
COMPANY PRESENTATION FY 2019
B C A
ONE GROUP, THREE BUSINESSES
PROSEGUR
CASH
PGA
(Financial and support functions)
PROSEGUR
SECURITY
RATIONALE
▪ Accelerate growth ▪ Increase specialization and efficiency ▪ Simplify the organisation
IMPLICATIONS / BENEFITS
▪ All businesses have reached the maturity to be managed separately ▪ Different capital needs and KPIs ▪ Customer centric model across regions ▪ Accelerates sharing of best practices across regions
PROSEGUR
ALARMS
8
RESILIENT GROWTH AND STRONG CASH GENERATION
SALES*
€1,732MM
EBIT Margin(%)*
15,5%
Countries / empl.
20 / 60,000
▪ #2 globally with 14% market share (vs. 7% in 2007) ▪ #1 in our focus Cash markets (14/20 countries) ▪ Leading scale, density and market share ▪ Outperforming the market (business has grown x4 in € sales in the last 7 years) ▪ Solid fundamentals → already growing in new products and capturing the next “outsourcing wave”
OUR BUSINESS OUR OBJECTIVES
▪ Continue delivering above-market organic growth at constant currency ▪ Lead industry consolidation player ▪ Lead the third wave of outsourcing (Cash Automation in Client, IAD, Back Office Management, Branch Teller Staff, etc.) ▪ Strong cash generation to fuel Group’s growth
COMPANY PRESENTATION FY 2019 *FY18 business figures 9
▪ #5 global player with a leading position in selected markets ▪ Industry leading technology-based solutions ▪ Differentiated growth strategies for each market based on development stage ▪ Expanding into mature markets with disruptive value proposition. ▪ Main player in LatAm leading the transformation of the industry
TO BECOME AN “INDUSTRY CHAMPION” AGAIN
SALES
€1,946 MM
EBIT Margin(%)
2.8%
Countries / empl.
15 / 103,000
▪ Continue transformation towards technology-based products ▪ Improve margins → all geographies with profitability in line with peers and Group’s best practices ▪ Grow and expand in US ▪ Complete integration of legacy businesses and operational improvements in Brazil ▪ Build a solid “Cybersecurity” platform
COMPANY PRESENTATION FY 2019
OUR BUSINESS OUR OBJECTIVES
10
WHICH WE WANT TO ACCELERATE WITH ADEQUATE INVESTMENTS
SALES*
€262 MM
Total Connections*
547,000
Countries / empl.
10 / 7,000
last 5 years to enter and reach critical mass in 10 countries
alarm “SMART”
markets
marketing (e.g., sales team, lead generation)
OUR OBJECTIVES OUR BUSINESS
COMPANY PRESENTATION FY 2019 11
PGA - CENTRALIZED EXTERNAL SUPPORT TO THE THREE BUSINESSES…
COMPANY PRESENTATION FY 2019 ▪ Human Resources ▪ Finance/Tax ▪ Legal ▪ Security ▪ Corporate Development ▪ IT ▪ Real Estate ▪ Brand ▪ Insurance ▪ Purchase ▪ Marketing
CASH
Commercials & Operations Cash Internal Support
SECURITY
Commercials & Operations Security Internal Support
ALARMS
Commercials & Operations Alarm Internal Support
SERVICES OFFERED PGA – External support
5% Mark Up
PROSEGUR HOLDING
12
… SUPPORTED BY STABLE INVESTMENT GRADE RATINGS
BBB/A-2
Outlook Stable October 2018
SUSTAINED STRONG LIQUIDITY PROFILE EXCELLENT CASH FLOW GENERATION WITH MODERATE CAPITAL EXPENDITURE AND WORKING CAPITAL REQUIREMENTS MINIMAL TRAPPED CASH ACROSS OPERATIONS MODERATE LEVERAGE
13 COMPANY PRESENTATION FY 2019
COMPANY PRESENTATION 2019
Leading the consolidation process
the Group’s growth
14
436 501 565 628 677 763 806 840 889 913 956 1.0171.083 1.126 1.170 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
690 720 759 784 792 853 888 942 1.035 1.127 1.198 1.299 1.380 1.463 1.517 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 50 61 68 84 101 113 128 147 158 183 199 215 220 270 297 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 36 35 37 38 45 49 50 52 55 58 60 64 68 73 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
CASH, STRONG GROWTH OF THE UNDERLYING DRIVER…
USE OF CASH IN TERMS OF VALUE (MN) COMPANY PRESENTATION FY 2019
+7% +5% +6% +14%
BRL USD EUR GBP
15
Source: Central bank data, IE Economics
…BOOSTS THE GROWTH OF THE CASH SECTOR, ALTHOUGH AT DIFFERENT LEVELS IN EACH REGION
CASH MARKET SIZE (USD BN)
+4,4%
2015 2020 Main characteristics of attractive markets: (i) Growing economies; (ii) Moderated elevated inflation and interest rates; (iii) Certain level of insecurity; (iv) Degree of sophistication of banking sector
EXPECTED GROWTH BY GEOGRAPHY 2015-2020
Africa & Middle East Latam US & Canada Asia Pacific Europe 4 (26%) 4.7 (31%) 2.7 (18%) 2.4 (16%) 1.4 (9%) COMPANY PRESENTATION FY 2019 8,3% 5,6% 4,0% 2,1% 1,6%
15.2 18.8
Source: Freedonia 2017 report
16
37% 22% 7% 13% 17% 4% 40% 20% 14% 13% 9% 5% 40% 20% 14% 13% 9% 4%
2007 2015 2018 20% 14% 13% 9% 4% CASH GLOBAL MARKET SHARES (2018) (1)
COMPETITOR’S MARKET SHARE EVOLUTION
(1) Market share calculated based on companies revenues: Prosegur Cash , Brinks & Loomis are based on 2018 results; G4S and Garda are based on estimations. Prosegur Cash market share includes India.
#2
Local Players
Change in Market Share '07-18 Others 40%
PROSEGUR HAS BECOME A GLOBAL RELEVANT PLAYER IN THE LAST FEW YEARS…
0bps
+700bps
0bps
Intl’ Player 1 Prosegur Intl’ Player 2 Intl’ Player 3 Intl’ Player 4
Intl’ Player 1 Intl’ Player 2 Intl’ Player 3 Intl’ Player 4
COMPANY PRESENTATION FY 2019 17
2018 MARKET SHARE PROSEGUR
▪ Undisputed market leader in LatAm – leadership position in fastest growing markets ▪ Benefitting from growing security market ▪ Relying on its strong density, reputation, brand and close relationship with clients ▪ Solid presence in key European countries ▪ Expected to be the fastest growing economies in the area ▪ Growing footprint in Asia / Africa ▪ Highest Cash market growth regions globally
Latam Africa & Middle East Europe Asia Pacific US and Canada
PROSEGUR CASH GLOBAL FOOTPRINT
#2 GLOBAL MARKET POSITION
COMPANY PRESENTATION FY 2019
…WITH STRONG POSITIONS IN EACH OF THE LOCAL MARKETS
0% 10% 57% 10% 4% # Market positioning Cash in transit & cash management
Source: Freedonia 2017, DBK, Aproser and internal sources.
18
1 MEXICO 3 CHILE 1 PERU 1 ARGENTINA 1 URUGUAY 1 PARAGUAY 1 BRAZIL 1 SPAIN 1 GERMANY 1 PHILIPPINES 1 INDIA 2 AUSTRALIA 2 PORTUGAL 2 FRANCE 3 COLOMBIA 2
DENSITY & SCALE AND PRODUCTIVITY GAINS: SEARCH FOR CONTINUOUS MARGIN IMPROVEMENT
COMPANY PRESENTATION FY 2019
Prosegur Cash Market Share in selected markets (%) Prosegur Cash EBIT Margin (%)
19
2015 2016 2017 2018 2015 2016 2017 2018 382 382 428 340 282 314 360 268
21,9% 13,3% 22,2% 14,8% 22,2% 16,0% 19,7% 15,1% 18,0% 7,5% 18,6% 9,1% 18,7% 10,2% 15,5% 10,2%
EBIT EBIT Margin Peers Average
Positive correlation between market share and profitability
practices
value added cash services
EBIT (€m) and EBIT margin (%)
EBITDA EBITDA Margin Peers Average
FOR THE FUTURE: UNPARALLELED POSITIONING TO BENEFIT FROM THREE KEY GROWTH LEVERS
COMPANY PRESENTATION FY 2019 Today Traditional market growth (Organic) Consolidation play (inorganic) Third Wave of Outsourcing Third Wave of Outsourcing
1 2 3
Source: IMF Nominal GDP forecast from 2016 – 2019. Expected growth calculated as a weighted average between our sales and the expected GDP
EXPECTED GROWTH IN OUR FOOTPRINT
1
CAGR 7.7% 2015 2020
> 500 CASH COMPANIES GLOBALLY
2
Room for further consolidation
#14 #7 #16 #13 #6 #9 #10 #11 #8 #15 #12 #3 #4 #5 #2 #17 #18 #19 #20 … #1
Cash automation in clients
OUTSOURCING OPPORTUNITIES
3
Back office management IAD (Independent ATM Deployer) Branch teller staff 20
OUTSOURCING OPPORTUNITIES
Efficiencies Business process outsourcing
BRANCH TELLER STAFF BACK OFFICE MANAGEMENT IAD (INDEPENDENT ATM DEPLOYER) ATM MGMT. ▪ Maintenance ▪ Fixing ▪ Replacement ▪ Full lifecycle CASH PLANNING & FORECASTING ▪ Branch Network ▪ Displaced ATMs COMPANY PRESENTATION FY 2019 CASH LOGISTICS & PROCESSING
Third wave of outsourcing DAILY RECONCILIATION ▪ Incidence Mgmt. ▪ Branch Network ▪ Central Services CASH AUTOMATION IN CLIENTS
21
Moving from manned guarding to technological solutions
COMPANY PRESENTATION FY 2019 22
Moving from manned guarding to technological solutions
2015 2020
SECURITY GLOBAL MARKET EVOLUTION ($BN)
125
SECURITY GLOBAL MARKET SHARES (2018) KEY MARKET TRENDS
Commoditization, due to its low capital intensity and entry barriers. Competitiveness intensification and considerable price pressure impacting margins, even with Facility Management companies Increase in staff turnover, scarcity of qualified personnel. Increasing labor pressure Budgeting restrictions in Public Sector Double market: ▪ Client sophistication. Every time the client knows more and it gets more difficult to add value ▪ Stagnant sector that keeps the same criteria for some years and is into a mature phase
6% 5% 4% 2% Others 75% Player 1 Player 2 Player 3 Player 4 Prosegur Source: Freedonia 2017 report and internal company data
LARGE MARKET WITH TECHNOLOGY AS A CATALYST FOR FUTURE GROWTH
+ + + + +
+6.1%
Increasing outsourcing from Public Sector and higher development of services to companies in emerging countries Design of integral offers that combine electronic systems with traditional guarding services improving revenue mix Intensive use of technology and its combination with human factor Trend towards mobile services (dynamic guarding/patrolling) as an alternative Growing market, with significant potential in emergent countries 168
23 COMPANY PRESENTATION FY 2019
PROSEGUR SECURITY HAS GLOBAL PRESENCE ACROSS LATAM, ASIA AND EUROPE
EMPLOYEES * PROSEGUR SECURITY GLOBAL FOOTPRINT #5 GLOBAL MARKET POSITION
SPAIN BRAZIL MEXICO COLOMBIA CHILE ARGENTINA URUGUAY PORTUGAL FRANCE CHINA PERU PARAGUAY SINGAPORE
COMPANY PRESENTATION FY 2019 Source: internal data 24
USA
0,72% 0,82% 1,39% 1,91% 2,50% 4,15% 4,65% 5,08% 5,93% 7,29% 8,27% 11,37% China Paraguay Uruguay Singapour Mexico Chile France USA Portugal Colombia Peru Argentina
* OPERATIONAL PERSONAL ONLY
27% 18% 17% 12% 9% 9% 7% 6% 6% 4% 4% 1% 0% 1% 17% 40% 16% 22% 11% 9% 3% 9% 3% 17% 15% 28% 23% 56% 42% 67% 66% 80% 82% 90% 85% 91% 79% 81% 99% 100% 49%
Local Players Largest National Player Intl´ Players Prosegur
WITH A LEADING POSITION IN SELECTED MARKETS ENABLING A SIGNIFICANT OPPORTUNITY FOR CONSOLIDATION
GUARDING MARKET SHARES (%)
COMPANY PRESENTATION FY 2019
Source: DBK, Investors presentations, internal estimates
25
Spain
#2
Uruguay
#2
Portugal
#2
Argentina
#4
Colombia
#1
Peru
#2
Brazil
#4
Paraguay
#1
Singapore
N.A
Chile
N.A
France
#4
Mexico
#7
China
#2
EEUU
N.A
PROSEGUR’S GUARDING BUSINESS MODEL IS BASED ON THREE KEY LEVERS
COMPANY PRESENTATION FY 2019
TECHNOLOGICAL TRANSFORMATION
▪ Value proposition to client; moving towards integrated solutions with technology
HIGHER MARGIN PRODUCTS
▪ Moving towards a high margin product portfolio
STREAMLINING
▪ Size reduction ▪ Efficiency implementation ▪ Growth recovery ▪ Margin expansion 26
GROSS MARGIN (%) PER PRODUCT TYPE FY15 (ALL COUNTRIES) COMPANY PRESENTATION FY 2019
% Gross Margin % of total sales
Other Services Electronic Systems ATM Cyber ARC
(Alarms Reception Center)
Mobile Guarding Maintenance Fire detection
Indirect costs
Increasing focus
higher margins
Traditional Guarding
+
US Market Entry
COMPANY PRESENTATION FY 2019
Guarding Monitoring / Technology Systems Integrator Cybersecurity
with high specialization in their respective service offerings
Enterprise Risk Security
Security Solutions
the highest growth potential
inorganic growth
WA OR CA NV ID MT WY UT AZ NM ND SD CO NE KS OK TX LA AR MO IA MN WI MI IL IN OH KY MS AL TN GA FL SC NC VA WV PA NY VT ME NH MA RI CT NJ DE MDC B V
28
Betting on growth and shaping the future
COMPANY PRESENTATION FY 2019 29
ALARMS MARKET: SIGNIFICANTLY UNDERPENETRATED
ALARMS PENETRATION RATES BY COUNTRY (%)
▪ World market is under-penetrated ▪ US is the most penetrated market globally and has only 20% penetration ▪ Prosegur core markets are all <10% penetration ▪ Sales and marketing are the main drivers of penetration → enormous growth potential that requires strong sales force and investment
% of households with a connected alarm
COMPANY PRESENTATION FY 2019 30
ALARMS MARKET: FROM SINGLE DIGIT TO DOUBLE DIGIT GROWTH IN FOCUS REGIONS
COMPANY PRESENTATION FY 2019
PROSEGUR’S FOCUS REGIONS EXPECTED TO LEAD THIS GROWTH GLOBAL ALARM MONITORING MARKET ($BN) EXPECTED TO GROW AT 5.0% P.A.
CAGR: 5.0% 44 58
KEY DRIVERS
burglaries
automation and security systems
smartphones Alarm monitoring market 2015-20 CAGR Revenue expected growth by Region
2015 2020 8,35% 5,03% 4,12% 1.93% 1.67% LATAM Asia Pacific World North America Western Europe
Source: Freedonia report 2017
31
2015 2020 75 2025
Installation Revenues Product cost Installation cost Sales cost Marketing cost
ALARMS: A DIFFERENT BUSINESS MODEL, SIGNIFICANT VALUE CREATION
VERY ATTRACTIVE RETURNS WITH UPFRONT CAPITAL REQUIREMENTS
CLIENT CONTRACT CASH FLOW
ARPU Year 0 Operating costs (Including monitoring, customer care, maintenance,...) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 … Year N Average life-cycle
▪ Payback period over 4 years ▪ Average subscription period of 10 years ▪ Increasing ARPU on local currency basis ▪ Very attractive returns with upfront capital requirements COMPANY PRESENTATION FY 2019 32
…
B2C
(residential & small business)
PORTFOLIO OF PRODUCTS OFFERING A FULL RANGE OF SOLUTIONS ADAPTED TO CLIENTS’ NEEDS
B2B
(transferred to Security)
▪ Complex CCTV systems ▪ Complex hybrid and wired systems COMPANY PRESENTATION FY 2019 ▪ Anti-theft systems, ▪ Smoke screen 2010 2015 2020 ▪ Wireless System (video-verification) ▪ Professional Hybrid & Wired Solutions ▪ Video in the Cloud ▪ Professional CCTV Solutions
VIDEO
▪ Vehicle Security Systems ▪ Mobile E-Health Solutions ‘Smartlife’ ▪ Internet of Things applied to security
HOME AUTOMATION
33 2018 2012 ▪ SMART solutions for Technology- Security integration
E-HEALTH HAWK EYE INCLUSION LOCATION
▪ Intelligent security services
SMART PLATFORM AS THE CORE TOOL TO INTERACT WITH OUR CLIENTS AND BUILD LOYALTY
SMART PLATFORM
▪ SMART: Platform to interact with our clients which builds loyalty ▪ Launched in 2016 ▪ Productivity increase: Lower service costs ▪ Churn reduction: Connected clients have lower churn rates (empirically proven 2-4% below average) COMPANY PRESENTATION FY 2019 ▪ Protection: In case of need, we send our response teams to provide protection ▪ Police: Critical in those countries where Police does not have the resources to provide reliable response ▪ Even in countries where Police provides a response we provide value added services
RESPONSE
34
UNPARALLELED PLATFORM WITH CRITICAL MASS IN 11 COUNTRIES AND OVER 550,000 CONNECTIONS
COMPANY PRESENTATION FY 2019 Close to 7,000 employees Presence in 11 countries with high potential growth 11 monitoring centres duplicated More than 1,100 response professionals Base of over 550,000 connections Commercial Residential 45% 55%
Source: FY 2018 business figures
35
More than 20,000 vehicles tracked INDIA
n/a
TURKEY
n/a
COLOMBIA
2
PORTUGAL
2
SPAIN
2
ARGENTINA
2
SOUTH AFRICA
n/a
URUGUAY
1
PERU
1
PARAGUAY
3
CHILE
3
SOLID FINANCIAL PERFORMANCE BEING THE FASTEST GROWING BUSINESS LINE WITHIN THE GROUP DRIVEN BY OUR FOCUS TO INCREASE OUR CUSTOMER BASE
CUSTOMER BASE EVOLUTION (# CONNECTIONS) AVERAGE REVENUE PER UNIT (ARPU)
2013 2014 2015 2016 2017 36.8 35 38 36 38 Ø 36.5
+11,4% 36 355 389 424 499 547
2014 2015 2016 2017 2018 2018 36
▪ Net additions Increment of 10%
▪ Growth still over industry
average despite Argentina slowdown
▪
Recurrent quota remains in line in the long term despite the adverse macro economic environment in Ibero-America
▪
Positive evolution in local currency terms COMPANY PRESENTATION 2019
Strategic Measures in the Alarm Business
Bancarisation of client portfolio
83% Consumer financing of the up-front payment to be
financial institutions in Spain
Back-office automation through Smart platform
15%
58%
COMPANY PRESENTATION 2019
37
COMPANY PRESENTATION FY 2019 38
+2 MILLION
HOURS OF TRAINING DELIVERED
+1,000
PROFESSIONALS WITH DISABILITIES
+170,000
PROFESSIONALS
+€12.MM
INVESTED IN TRAINING We ensure the utmost respect for the principle of equal treatment. We take no risks when it comes to safeguarding the physical safety and integrity of our professionals, raising their image and profiles. THE BEST HUMAN TEAM
COMPANY PRESENTATION FY 2019 39
+200 COLLECTIVE
BARGAING AGREEMENTS
PROSEGUR IS A GLOBAL BENCHMARK IN THE PRIVATE SECURITY INDUSTRY
TRADE-UNION FREEDOM AND FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
+200 UNIONS +2,000
UNION DELEGATES
16%
OF EMPLOYEES ARE MEMBERS OF A TRADE UNION
* OECD average rate (2016): 12%
EUROPEAN WORKS COUNCIL
UGT, CC.OO y USO (ESP) VERDI (GER) CGT (FRA) STAD y SITESE (POR) *Advisor: UNI GLOBAL UNION
69% OF ANNUAL
REVENUES DISTRIBUTED TO EMPLOYEES
27% OF ANNUAL
REVENUES DISTRIBUTED TO SUPPLIERS
2 million HOURS OF
TRAINING
1.6 million hours
OF ONLINE TRAINING THROUGH THE PROSEGUR UNIVERSITY EFFECTIVE TAX RATE IN 2017 FOR PROSEGUR WAS 36,6%
SOCIAL CASH FLOW
COMPANY PRESENTATION FY 2019 40
PROSEGUR, A RESPONSIBLE COMPANY
COMMITMENT WITH OUR EMPLOYEES AND HSE
PROSEGUR COMPETITOR 1 COMPETITOR 2 Fatality rate per 10.000 employees
0.41 0,43 0.20
Attacks Traffic Others
FATALITIES IN 2017 ADHERENCE TO STANDARDS AND REGULATIONS Priority IN ALL OF
OUR BUSINESSES
“ZERO INJURIES” GOAL,
REGARDLESS OF OUR BUSINESS DIFFICULTIES PREVENTIVE APPROACH WITH
THREE ACTION LEVELS:
▪
Training
▪
Monitoring and follow up
▪
Technological innovation
RISK MANAGEMENT CYCLE
4
MONITOR
3
MANAGE
1
IDENTIFY
2
ANALYZE “PROSEGUR CODE OF ETHICS AND CONDUCT” CODE FROM THE LIGUE INTERNATIONALE DES SOCIÉTÉS DE SURVEILLANCE
Code from the Confederation
Services (CoESS)
UN GLOBAL COMPACT WHISTLEBLOWER CHANNEL CORPORATE COMPLIANCE PROGRAM APPLICATION OF THE RIGHTS LISTED IN THE UNIVERSAL DECLARATION OF HUMAN RIGHTS (UDHR) TRANSPARENCY We draw up our Annual Reports using the Global Reporting Initiative (GRI) standards COMPANY PRESENTATION FY 2019
41
PROSEGUR, A RESPONSIBLE COMPANY
COMMITMENT WITH OUR EMPLOYEES AND HSE ADHERENCE TO STANDARDS AND REGULATIONS Priority IN ALL OF
OUR BUSINESSES
“ZERO INJURIES” GOAL,
REGARDLESS OF OUR BUSINESS DIFFICULTIES PREVENTIVE APPROACH WITH
THREE ACTION LEVELS:
▪
Training
▪
Monitoring and follow up
▪
Technological innovation “PROSEGUR CODE OF ETHICS AND CONDUCT” CODE FROM THE LIGUE INTERNATIONALE DES SOCIÉTÉS DE SURVEILLANCE
Code from the Confederation
Services (CoESS)
UN GLOBAL COMPACT WHISTLEBLOWER CHANNEL CORPORATE COMPLIANCE PROGRAM APPLICATION OF THE RIGHTS LISTED IN THE UNIVERSAL DECLARATION OF HUMAN RIGHTS (UDHR) TRANSPARENCY We draw up our Annual Reports using the Global Reporting Initiative (GRI) standards COMPANY PRESENTATION FY 2019
42
WE ARE COMMITTED TO PEOPLE
COMPANY PRESENTATION FY 2019
Prosegur Foundation channels the company’s social and cultural activities to help build a more giving society while generating
making tangible our commitment to contribute to the development of the regions the Group
Our institution works to educate and improve the job prospects of people with intellectual disabilities and is also involved in corporate volunteering and cultural outreach We develop our own projects that are sustainable, transparent and replicate best practices
F O U N D A T I O N P R O S E G U R
46
PIECITOS COLORADOS SCHOOLS
4
FIELDS OF ACTION
10
COUNTRIES
34
PROJECTS COMPLETED IN 2018
€3MM INVESTED
IN 2018
+43,000
BENEFICIARIES IN 2018
43
FY 2018 FINANCIAL INFORMATION
COMPANY PRESENTATION FY 2019 44
Revenues by Business Revenues by Region
Con
Results ts FY 2017(1) FY 2018(2)
% Variation
In millions of Euros
Sales es
4,291
3, 3,93 939 (8.2)%
EBITDA
522 522
456 456 (12.6)%
Margin 12.2% 11.6% Depreciation
(104) (129) EBITA
417 417
327 327 (21.7)%
Margin 9.7% 8.3% Amortisation of intangibles and others (25) (26)
EBIT
392 392
301 301 (23.2)%
Margin 9.1% 7.7% Financial Result (45) (21)
Prof rofit be befor
347 347
280 280 (19.4)%
Margin 8.1% 7.1% Taxes (127) (100) Tax rate 36.6% 35.7%
Ne Net pr prof
220 220
180 180 (18.3)%
Minority Interests
48
48
Ne Net Conso solidated ed Prof rofit
172 172
132 132 (23.2)%
Earnin ings pe per r sha hare re (Eur uros s pe per shar hare)
0.3
0. 0.2
(1) 2017 figures exclude extraordinary non-recurring effects of Prosegur CASH IPO. (2) 2018 figures have been elaborated applying IAS 21 and 29.159 158
1,665 1,740 Europe 2,467 2,042 IberoAmerica AOA +4.5%
FY 2017 FY 2018
+4.5% +2.6% +10.7% 251 262
1,924 1,732 Cash 2,116 1,946 Security Alarms
+4.4%
+12.0% +3.2% +20.6% %
Growth in Local Currency(1) % Growth in Euros
COMPANY PRESENTATION FY 2019
FY 2017
+8.5%
Org 1,924
+3.4%
Inorg
FX(1) FY 2018 1,732
360 268
18.7% FY 2017 15.5% FY 2018
EBIT Margin EBIT
Margin contraction in Euro-terms deriving mainly from FX, IAS 21&29 and integration costs Acceleration of growth in local currency to 12%, including the adverse effect of France and Australia
Sales EBIT & Margin
In millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29.
COMPANY PRESENTATION FY 2019
PROSEGUR Cash
50
COMPANY PRESENTATION FY 2019
FY 2017 Org
+3.5%
Inorg
FX(1) FY 2018 2,116 1,946
66 54
3.1% FY 2017 2.8% FY 2018
EBIT Margin EBIT
Profitability affected by the slowdown of the Brazilian economy and LatAm FX Client portfolio optimization leads to a temporary deterioration of organic growth
Sales EBIT(2) & Margin
In millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29. (2) Security profitability excluding Overhead Costs.
51
PROSEGUR Security
355 389 424 499 547 2015 2014 2017 2016 2018
+11.4% 251
FY 2017
+18.9%
Org
+1.7%
Inorg
FX(1)
262
FY 2018
+4.4%
Net additions increase of 10% vs. same period in 2017 Growth still above industry average, despite Argentina slowdown Sustained organic growth in revenues close to 20% Strong currency impact
35 38 36 38 36 2015 2014 2016 2017 2018
Ø 36.5
Recurring monthly fee remains in line with historic trend, in spite of the adverse macro environment in Ibero-America Positive evolution in local currency terms
BTC in thousands of connections - Sales in millions of Euros - ARPU in Euros. (1) Includes exchange rate effect and IAS 21 & 29.
Sales BTC ARPU
COMPANY PRESENTATION FY 2019
PROSEGUR Alarms
52
In millions of Euros
FY 2017(1) FY FY 20 2018 18(2)
EB EBITDA 522 522
456 456
Provisions and other non-cash items 33
14
Tax on profit (ordinary) (124)
(102)
Changes in working capital (67)
(5)
Interests payments (34)
(20) Operating cash flow 330 330
343 343
Acquisition of property, plant & equipment (208)
(214)
Payments for acquisitions of subsidiaries (59)
(83)
Dividend payments (330)
(118)
Other flows 757
(35) Cash flow from investing / financing 160 160
(45 (450) 0)
Total net cash flow 490 490
(10 (107) 7)
Initial net financial position (712)
(25 (252) 2)
Net increase / (decrease) in cash 490
(107)
Exchange rate (30)
(66) Final net financial position (252)
(42 (425) 5)
(1) 2017 figures exclude extraordinary non-recurring effects of Prosegur CASH IPO. (2) 2018 figures have been elaborated applying IAS 21 and 29.330 343
63.2% 75.2%
FY 2018 FY 2017 +3.9%
Operating Cash Flow Generation Operating Cash Flow % Cash/EBITDA
COMPANY PRESENTATION FY 2019
In millions of Euros
FY 2017 FY FY 20 2018 18
Financial Ex Expenses (57)
(28 (28)
FX FX(1) 12 12
7
Financial Resu esult
(45)
(21 (21)
252 350 391 458 425
1.71% 2.23%
1.80% 2.02%
1.65%
Average Cost of Debt Net Financial Debt
reduction of financial expense of more than 50%
same period in 2017 (1.65% vs. 2.23%)
2019), improving margin and extending tenor
Amounts in millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29.
Net Financial Debt / EBITDA
0.9x
Net Financial Debt / Equity
0.4x
COMPANY PRESENTATION FY 2019
Balance Sheet
(1) 2018 figures have been elaborated applying IAS 21 and 29.In millions of Euros
FY FY 2017 2017 FY FY 2018 2018(1)
No Non-cur urrent nt Asset ssets 1,481 481
1, 1,72 721
Tangible fixed assets and real estate investments 587
745
Intangible assets 765
842
Others 128
133 Current nt Asset ssets 2,343 343
2, 2,09 099
Inventory 71
76
Customer and other receivables 1,151
975
Cash and equivalents and other financial assets 1,121
1,048
TOTAL ASSETS
3,824 824
3, 3,82 820
Ne Net Equi uity 1,143 143
1, 1,06 066
Share capital 37
37
Treasury shares (53)
(53)
Retained earnings and other reserves 1,085
1,013
Minority interests 74
69 No Non-current Li Liab abilities es 948 948
1, 1,676 676
Bank borrowings and other financial liabilities 717
1,392
Other non-current liabilities 230
285 Current Li Liab abilities es 1,73 733
1, 1,077 077
Bank borrowings and other financial liabilities 701
151
Trade payables and other current liabilities 1,031
926
TOTAL NET EQUITY AND LIABILITIES
3,82 824
3, 3,820 820
COMPANY PRESENTATION FY 2019 47
Recent M&A
COMPANY PRESENTATION FY 2019
USA Central America Peru Paraguay Colombia Uruguay Brazil Spain Germany South Africa Singapore Philippines Australia
53
53
Scalable Growth Process Improvement Savings
Reduction of payroll calculation hours in Brazil
Robotization of the employee registration process in Spain +25,000 contracts / year + social security payment Reduces the time of incorporation from 48 to 24 hours
Reduced cost in the monitoring of 2,600 armoured vehicles using IOT
Robotized Processes to achieve efficiencies of 120,000 hours/year
Digital Transformation – an ongoing transformational project to reshape the group
Use of electric and low consumption vehicles in "car sharing" model for Alarms and Security
Process improvement in “Opportunity 2 Cash” & “Procure 2 Pay” focusing on DSO reduction
COMPANY PRESENTATION FY 2019 55
www.prosegur.com
THANK
YOU
CONTACT INFORMATION:
Antonio de Cárcer Investor Relations Director Tel: +34 91 589 83 29 antonio.decarcer@prosegur.com Cristina Casado Investor Relations Officer Tel: +34 91 589 83 29 Cristina.casado@prosegur.com