Results Presentation First semester 2018 0 CASH
Cash in the media Relevant news of the quarter The European Union against restricting Visa payments down in Europe. Mastercad the use of cash customers suffer outages around the world Under the premise of fighting against the financing of terrorism and tax evasion, the possibility of Visa and MasterCard users had technical problems to limiting cash payments comes to the public debate complete their payment transactions during the months of with some recurrence. Recently, The European June and July. The fall of the networks of the card providers Commission pointed out the ineffectiveness of highlights the importance of continuing to count on cash as a these measures. means of payment. Source: European Commission Source: Financial Times China and Washington DC stand up for Governments prone to safeguard cash and the unbanked population promote improvements in the cash cycle The People’s Bank of China (PBoC) is urging businesses and banks to accept cash. Different institutions in Sweden, Norway and the Additionally, U.S capital wants to pass a bill that would Netherlands have spoken out in favor of not imposing require restaurants to accept cash in a move to restrictions on the use of cash, recognizing its importance in protect the unbanked. society. Source: Swedish Associations, Norwegian Ministry of Finance, Source: Reuters and US Congress Dutch Central Bank 1 CASH
Agenda 1. Highlights of the semester 2. Regional overview 3. Financial results 4. Conclusions 5. Annex I: Income statement reconciliation 2 CASH
Highlights of the semester Main themes RESILIENCE CONSOLIDATION NEW PRODUCTS Acquisitions closed (1) Increasing as a % of sales Organic growth 9% 74 m € investment 8.2% 10.8% Growthin keysegments: EBIT margin New geographies: Central Retailautomation, 17.8% 18.0% America, Philippines AVOs, ATMs New products: Strong depreciation of currencies in emerging Bankingservices markets (1) Including post-closing acquisitions: ATPI in the Philippines and Logmais in Brazil. Maximum investment amount including deferred payments 3 CASH
Resilience Solid organic growth and margin improvement despite a very adverse currency environment Sales (m € ) Severe currency headwinds mitigated through the P&L -8.4% 17 88 964 883 (186) -7.7 % -8.4% -19.2% FX Sales EBIT 9.1% 1.7% (19.2%) Depreciation YoY (%) 1H 2017 Organic Inorganic FX 1H 2018 Argentina ̴ 54% Brazil ̴ 20% Others ̴ 4 - 15% EBIT (m € ) -7.7% 172 Continuous improvement of EBIT margin 159 18.0% 16.2% 16.3 % 13.8% % sales 17.8% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016 2017 2018 1H 2017 1H 2018 4 CASH
Consolidation Growth in emerging markets and in new products through M&A Banking Services Central America Philippines Brasil Regional leadership National leadership SpecializedBPO pureplayer 5 countries ̴ 22 m € sales 132 branchesin NE and SE ̴ 34 m € sales More than5,000 employees Over800 retailoffices ̴ 2,000 employees Over1,000 armoredtrucks More than390 employees 240 armoredtrucks ̴ 1,000 A ̴ 2,3m transactionsper month TMs 13 cash centers 5 cash centers 74 m € investmentin M&A (1) Annualtarget 50 – 150 m € (1) Including post-closing acquisitions: ATPI in the Philippines and Logmais in Brazil. Maximum investment amount including deferred payments 5 CASH
New products Acceleration of new businesses New products as a % of sales 10.8% 8.7% 6.4% 2016 2017 1H 2018 Sales in 1H 2018 95 m € Growth 20.3% 6 CASH
Agenda 1. Highlights of the semester 2. Regional overview 3. Financial results 4. Conclusions 5. Annex I: Income statement reconciliation 7 CASH
LatAm 69% of sales Sales (m € ) New products (m € ) EBIT (m € ) +17% -11% -5% Org: +14.2% % sales 686 57 156 148 Inorg: +1.1% 608 49 FX: (26.6%) 24.3% 22.8% 9.4% 7.1% 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 Comparison vs. previous year Retail automation, ATMs and Margin improvement explained by affected by one-offs in 2017 valuable cargo efficiencies and operating leverage Healthy organic growth slightly impacted by strikes Strong currency depreciation, especially in Argentina and Brazil 8 CASH
Europe 27% of sales Sales (m € ) New products (m € ) EBIT (m € ) +5% +39% +7% Org: +0.5% % sales 236 34 16 226 15 Inorg: +4.0% FX: 0.0% 25 14.6% 10.9% 6.7% 6.5% 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 Organic growth weighed down by Margin expansion despite the AVOS and retail automation France adverse situation in France 2017 M&A complementing our organic growth 9 CASH
Asia, Oceania, Africa (AOA) 4% of sales Sales (m € ) New products (m € ) EBIT (m € ) -547% Org: (19.2%) % sales -25% -35% 1 Inorg: +0.9% 53 5 FX: (7.0%) 2.0% 39 4 -5 n.m. 10.3% 9.0% 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 Gradual recovery of volume since Decrease in ATM services and Impacted by transition costs in the second quarter currency effect Australia Positive contribution coming from 2017 M&A Strong currency depreciation 10 CASH
Agenda 1. Highlights of the semester 2. Regional overview 3. Financial results 4. Conclusions 5. Annex I: Income statement reconciliation 11 CASH
Profit and loss 1H 2017 1H 2018 % change Million Euros business (1) business (1) 883 Sales 964 -8.4% Organic growth mitigating currency effect 192 EBITDA -6.4% 205 21.7% Margin 21.3% Depreciation (25) (26) 3.2% Efficiency improvements and operating 166 EBITA 180 -7.8% leverage 18.8% Margin 18.7% Amortization of intangibles (8) (7) -8.6% Positive financial result 159 EBIT 172 -7.7% Margin 17.8% 18.0% Financial result 4 9 132.5% 168 176 -4.5% EBT Margin 18.2% 19.0% Taxes (57) (56) -3.0% 33.1% Tax rate 32.6% Net Profit from continuing 112 119 -5.3% operations 12.7% Margin 12.3% 112 Net Consolidated Profit 119 -5.9% Margin 12.6% 12.3% (1) Business figures exclude the impact of the intercompany transactions between Prosegur Cash and Prosegur Compañía de Seguridad associated to the IPO restructuring process in 2017. For reconciliation purposes between accounting and business figures please refer to annex I at the end of this presentation. 12 CASH
Cash flow 1H 2017 1H 2018 Million Euros business business EBITDA 205 192 Capex ~ 4.8% over sales. Higher investments Provisions and other non-cash items 13 (9) in client-oriented capex Income tax (84) (73) Acquisition of PP&E (48) (43) Changes in working capital 6 (12) Calendar effect impacting our working Free Cash Flow 92 56 capital % Conversion 77% 78% Interest payments (9) (6) Payments for acquisitions of subsidiaries (26) (18) M&A payments within the semester Trademark sale 85 - Real Estate sale 60 - Brazilian Security business sale - 18 Dividend cash-out (second and third Dividend payment - (45) instalments of the 2017 approved amount) Total Net Cash Flow 202 5 Net financial position at the beginning (611) (424) of the period (December) Net increase / (decrease) in cash 202 5 Exchange rate (8) (23) Net financial position at the end (418) (442) of the period (June) (1) Conversion ratio: (EBITDA - Capex) / EBITDA 13 CASH
Total net debt Million Euros Total net debt reconciliation Total net debt variation (June 2018) (December 2017 vs June 2018) 37 477 32 477 442 45 431 -2 18 6 -56 (1) Net financial Deferred Treasury Total net Total net Free Cash Interest M&A Dividend Others Total net position payments stock debt debt Flow payments payments payments debt Jun.2018 Jun. 2018 Dec. 2017 Jun. 2018 Rating S&P Average Net debt / Cost of Debt BBB EBITDA LTM 2.09% 1.1x Outlook stable (1) Mainly Includes fx rate impact, deferred payments variation and the sale of the Brazilian security business 14 CASH
Balance sheet Strengthening of main Balance Sheet items: FY 2017 1H 2018 Million Euros % s/ Total Assets Non-current assets 830 808 Tangible fixed Tangible fixed assets 279 274 18% 16% assets Intangible assets 478 466 Others 72 68 FY 2017 1H 18 Current assets 877 734 Inventories 6 13 Trade receivables and others 508 441 Cash & Cash 19% 17% Cash and cash equivalents 318 259 equivalents Non-current assets held for sale 46 21 FY 2017 1H 2018 TOTAL ASSETS 1,707 1,543 Net Equity 264 281 Net 18% 15% Non-current liabilities 851 829 Equity Financial liabilities 697 685 FY 2017 1H 2018 Other non-current liabilities 154 144 Current liabilities 592 432 Financial liabilities 78 54 Other liabilities 488 357 Non-current 44% 41% Liabilities held for sale 27 21 financial liabilities TOTAL EQUITY AND LIABILITIES 1,707 1,543 FY 2017 1H 2018 15 CASH
Agenda 1. Highlights of the semester 2. Regional overview 3. Financial results 4. Conclusions 5. Annex I: Income statement reconciliation 16 CASH
Conclusions Resilient business model Accelerating M&A Expanding into new products 17 CASH
Agenda 1. Highlights of the semester 2. Regional overview 3. Financial results 4. Conclusions 5. Annex I: Income statement reconciliation 18 CASH
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