RESULTS PRESENTATION. 9M 2018 Cash in the media Relevant news - PowerPoint PPT Presentation

RESULTS PRESENTATION. 9M 2018

Cash in the media Relevant news Championing the Choice for Cash. Southeast Asia. Cash is saving electronic Accepting cash and providing access to it, through an in-store commerce. ATM, can attract and retain customers. According to the white paper “State of e-Commerce in South East Asia 2017 ”, published by iPrice, cash is an important part An study conducted by Cardtronics in partnership with of online payment options in Southeast Asia. Scansion found that 80% of consumers use some of the cash dispensed from an ATM to buy goods in those stores. The The lack of infrastructures and the low penetration of credit same study showed that when an ATM is present, shopper cards in the region means that merchants are offering cash spending triples in convenience stores and doubles in drug on delivery as an payment solution. stores. Source: Cardtronics & Scansion Source: iPrice Mexico. The prohibition to pay with cash in Sweden. Central Bank to take concrete transportation apps has been declared measures to ensure that cash does not invalid by the Supreme Court. disappear as a means of payment. This decision is a key precedent for Uber and other The Riksbank believes it is important for banks not only to companies seeking to reach millions of Mexicans who do not provide deposit facilities to businesses but to also offer have a credit card. deposit services to individual citizens. In a country where more than 60 percent of the population This is a service that consumers can reasonably expect of lacks a bank account, cash payments are a business credit institutions. There must also be symmetry between imperative for Uber, analysts say. withdrawal and deposit facilities. Source: Reuters Source: The Riksbank 2

Agenda 1. Highlights of the period 2. Regional overview 3. Financial results 4. Final remarks 5. Annex: Income statement reconciliation 3

Highlights of the period Main themes 1 • “Cash in circulation”, our main driver, continues to grow • Strong currency depreciation still not offset by inflation Macro environment • Argentina classified as hyperinflationary country (IAS 21 & 29) 2 • Local growth accelerating to 11.6% Resilient business • EBIT margin improvement in local terms in most of the countries. model • Consolidated EBIT margin mainly impacted by forex and IAS 21 & 29 3 • 11.5% of total sales (growth > 40% ex-forex) New products evolution • Strong growth in retail automation, AVOS and ATMs 4 • Accumulated Free Cash Flow of 120 M € Solid free cash flow generation • Higher weight of client-oriented capex within the total amount of investment 4

Resilience Severe currency headwinds mitigated along our financial magnitudes Key metrics variation (%) -13% -18% FCF NET PROFIT -22% EBIT -27% FX & IAS 21 & 29  Underlying business performing well 5

New products New services gaining weight within our business mix New products as a % of sales 280 bp 11.5% 230 bp 8.7% 6.4% 2016 2017 9M 2018  Sales in 9M 2018 141 M €  Growth 16.2 % (> 40% ex-forex) 6

Free Cash Flow Free Cash Flow generation of 120 M € 9M 2017 77% IAS 21 & 29 not affecting Conversion Ratio (%): (EBITDA – Capex) / EBITDA cash flow generation 9M 2018 75% 9M 2017 45% Stable conversion ratio Free Cash Flow / EBITDA (%) 9M 2018 48% 9M 2017 71 Higher investment in client- Capex evolution (M € ): -11% Client vs. Maintenance oriented capex 9M 2018 63 Client Maintenance 7

Agenda 1. Highlights of the period 2. Regional overview 3. Financial results 4. Final remarks 5. Annex: Income statement reconciliation 8

Regional overview LatAm [65% sales] (1) Sales (M € ) New Products (M € ) Org: +13.3% +9% -22% Inorg: +2.1% % sales 1,012 82 FX (2) : (37.5%) 75 789 10.4% 7.4% 9M 2017 9M 2018 9M 2017 9M 2018 • Comparison vs. previous year affected by one-offs in 2017 • Retail automation, ATMs and valuable cargo • Higher contribution from inorganic growth (Central America) • In addition of IAS 21 & 29, currency depreciation continues in all geographies (1) 2018 figures according to IAS 21 & 29 (hyperinflation accounting); (2) Includes FX and IAS 21 & 29 9

Regional overview Europa [30% sales] Sales (M € ) New Products (M € ) Org: +1.3% +5% +41% Inorg: +3.6% % sales 363 54 FX: 0.0% 346 38 14.8% 11.0% 9M 2017 9M 2018 9M 2017 9M 2018 • Organic growth improvement despite France • AVOS and retail automation • M&A complementing our organic growth 10

Regional overview AOA [5% sales] Sales (M € ) New Products (M € ) Org: (18.1%) -16% -36% Inorg: +8.9% % sales 77 8 FX: (6.5%) 65 5 9.8% 7.4% 9M 2017 9M 2018 9M 2017 9M 2018 • Gradual recovery of volume in Australia since the • Decrease in ATM services beginning of the year • M&A contribution from the Philippines • Strong currency depreciation 11

Agenda 1. Highlights of the period 2. Regional overview 3. Financial results 4. Final remarks 5. Annex: Income statement reconciliation 12

Hyperinflationary accounting Argentina declared hyperinflationary country during the third quarter • Argentina’s cumulative inflation > 100% during the last three years Context • IAS 21 & 29 retroactive application since 01/18 • Restatement of non-monetary assets and liabilities (formerly at BALANCE historical cost) • Restatement of income statement captions 2018 Reporting Impact (1) • Higher D&A as a consequence of the restatement of BS items P&L • “Euro” conversion at the end of the period exhange rate (previously at the average exchange rate) Cash Flow • Hyperinflationary accounting DOES NOT AFFECT cash generation Impact (1) 2017 financial information has not been restated 13

Financial results Profit and loss account (1) 9M 2017 9M 2018 % VAR Million Euros 1,217 Sales -15.2% 1,436 Local growth mitigating currency effect 250 EBITDA 305 -18.1% Margin 20.5% 21.3% and the application of IAS 21 & 29 Depreciation (38) (40) 4.7% 210 EBITA 267 -21.4% Margin 17.3% 18.6% Translational risk with no impact in the Amortization of intangibles (12) (12) -3.3% underlying business 198 EBIT 255 -22.3% 16.3% Margin 17.8% Financial result 3 14 353.3% Consolidated EBIT mainly margin impacted 212 EBT 258 -17.9% by forex and IAS 21 & 29 17.4% Margin 18.0% Taxes (88) (72) -18.5% Tax rate 33.9% 34.1% Positive financial result Net Profit from continuing 140 170 -17.5% operations Margin 11.8% 11.5% 140 Net Consolidated Profit 170 -17.6% 11.5% Margin 11.8% (1) 2018 figures according to IAS 21 & 29 (hyperinflation accounting). 2017 business figures exclude the impact of the intercompany transactions between P. Cash and PCS associated to the IPO restructuring process in 2017. For reconciliation purposes between accounting and business figures please refer to the Annex at the end of this presentation. 14

Financial results Cash Flow (1) 9M 2017 9M 2018 Million Euros EBITDA 305 250 Higher investments in client-oriented Provisions and other non-cash items 12 41 Income tax (99) (87) capex ( ̴ 30%) Acquisition of PP&E (71) (63) Changes in working capital (10) (21) Calendar effect impacting our Free Cash Flow 138 120 % Conversion (2) 77% 75% working capital Interest payments (12) (7) Payments for acquisitions of subsidiaries (43) (37) Trademark sale 85 - Lower interest payments Real Estate sale 52 - Brazilian Security business sale - 18 Dividend payment - (66) Total Net Cash Flow 220 27 M&A payments during Q3 Net financial position at the BoP (December) (611) (424) Net increase / (decrease) in cash 220 27 Dividend cash-out (second, third Exchange rate (12) (43) fourth instalments of 2017 amount) Net financial position at the EoP (September) (404) (440) (1) 2018 figures according to IAS 21 & 29 (hyperinflation accounting); (2) Conversion ratio: (EBITDA - Capex) / EBITDA 15

Financial results Total net debt Million Euros Total net debt reconciliation Total net debt variation (September 2018) (December 2017 vs September 2018) 51 25 489 489 66 440 431 -2 79 7 -120 Others (1) Net financial Deferred Treasury Total net Total net Free Interest M&A and Dividends Total net position payments stock debt debt Cash Flow Deferred debt Sep. 2018 Sep. 2018 Dec. 2017 payments Sep.2018 Rating S&P Average Net debt / BBB EBITDA LTM (2) Cost of Debt 2.06% 1.3x Outlook stable (October 2018) (1) Mainly Includes fx rate impact and the sale of the Brazilian security business; (2) 2018 figures according to IAS 21 & 29 (hyperinflation accounting) 16