Prosegur Compania de Seguridad

Good afternoon and welcome to ProSegur third quarter 2025 results presentation webcast. Before we start, I would like to remind you all that this presentation has been pre-recorded and that it will be available on our corporate website. I will now hand you over to our CFO, Maite Rodríguez.

Good afternoon and thank you all for your presence. We are pleased to present ProSegur results for the nine months of 2025. As we shall see throughout the presentation, Compania de Seguridad The results at a business level continue to be leveraged by financial results and accrued taxes, resulting in an impressive 47% increase in net income year on year. For all the above, we are confident that we continue to be on the right track to comply with our main objective of generating value for our shareholders. Now, with all this in mind, let's deep dive into the most significant aspects of the period. Our top line grew by 2.5% compared to the same period of last year, mainly driven by organic growth and partially upset by ethics effect. As stated, our security business continues to be the engine behind the growth. As we continue to penetrate the US market while at the same time we are still able to show healthy organic growth rates in more mature markets such as Spain and Portugal. As for profitability, EBITDA stood at 258 million euros, 9% higher year over year, primarily explained by the strong performance of our security business. Indeed, volume growth coupled with an agile commercial strategy to pass through cost to prices explained the 18% growth compared to the previous year. Our cash business, despite showing good operating results in all major geographies, was negatively impacted by the depreciation of the dollar, which tend to further trigger devaluation throughout Latin American countries, the devaluation of the Argentinian peso that showed sharp instability to ramp up the legislative elections, and the implementation of an aggressive cost-saving program in Latin America. Indeed, as already explained in our previous second quarter results, this resulted in extraordinary severance costs impacting not only Inivita, but also cash generation. Going forward, these efficiencies will materialize in higher margins in the future. For our alarms business, as we will see, operational performance was clearly enhanced, reflected in better and healthier indicators. This is true for MPA as well as for Prosegur alarms. It's worth mentioning that in MPA we reached during the first week of October 600,000 connections, marking a milestone in our growth history. Not only we were able to achieve double-digit growth, but also did it in sustainable and profitable fashion. As for cash generation, we were able to partially upset the slowdown from our cash business thanks to the efficient working capital management and by keeping infrastructure topics under control. Our security business further contributed to this task. As said, and as we will go through in detail later in the presentation, the addition of the cost-saving program and the FX volatility impacted cash generation in our cash business. We continue to show a strong and solid position debt-wise. Indeed, net debt stands at 2.3 times relative to EVVA. As we shall later see, in Presegur Cash, we successfully issued a 300 million euro five years bond at a highly competitive rate of 3.38%. This not only highlights the good work from our financial team, but also the good prospect of the business for the future. It is indeed a good testament to our ability to transform and diversify our business both geographically and product-wise, as we have been arguing in the past. Let's now turn to slide 2, where I would like to deep dive into our sales and EBITDA figures. As said, total sales during the first quarter increased by 2.5% over last year, reaching 3.7 billion euros. Discounting for the FX effect made in Latin American regions, almost the entire growth was organic, evidencing on the one hand our strict policy when it comes to passing through inflation to prices, and on the other, our capacity to capture additional volume as we continue increasing our market share. As for geographic sales diversification, it should be noted that growth continues to be the driver. Both USA and APAC region continue to grow at higher than average rates. This is very relevant and speaks to the future growth avenues of our main businesses. As you already know, in our security business, we continue to bet for USA as we see it as an exceptional market given its size, margins, and our capacity to continue penetrating it as we offer a wide range of products and services. In our cash business, our strategy is twofold. In most mature markets, we accelerate diversification through transformation products, while in the APAC region, we continue to see high growth rates in our traditional service. Moving now to further review profitability, Evita reached €258 million, marking a healthy 9% increase compared to last year. Our cash business registered an EBITDA of 164 million euros, marking an 8.5% reduction when compared with the previous year. This includes the extraordinary expenses incurred due to the implementation of the cost saving program. If excluded, EBITDA would have amounted to 176 million euros, in line with last year. Turning now to our security business, EBITDA amounted to 63 million euros, 17.5% higher compared to the first half of 2024. Healthy volume growth coupled with a strict discipline on cost explained the enhanced performance. Technology sales further contributed to the good results. As we always explain, our ability to provide high-end tech solutions is one of our main competitive advantages and continues one of our main pillars. Lastly, our alarms business continues to be on good track and good proof of this is the evolution of main financial indicators such as service margin and churn rate. At this point, I would like to explain the results generated by our PGA division. As you may probably know, PGA stands for Prosegur Gestion de Activos, and it's a business line itself. The only difference to the other business lines we operate is that PGA does not offer services to third parties. In a nutshell, the PGA provides three different types of services. In a nutshell, the PGA provides three different types of services. It rents buildings and facilities to most of the other businesses. It owns the Prosegur brand, reason why it charges a royalty for letting the other businesses use it, and provides a consulting service to the other businesses, including finance, human resources, legal, and IT services. At the same time, it incurs with any other corporate expenses. With this, what we want to convey is that, as any other business line, it has a P&L and we strive to maximize it as in any other business. Let's now turn to our P&L that, as it can be seen, showed a remarkable increase compared to last year. The better performance on financial results, as already explained in past presentations, has a lot to do with the normalization of the Argentine economy. As explained, inflation rates are going down quite rapidly resulting in a negligible impact due to inflation accounting. At the same time, the abrupt narrowing of the FX gaps further contributed as dividend upstreaming became cheaper. Going further down to accrued taxes, the 238 basis points reduction in the effective rate should be highlighted. The rationale behind this reduction is twofold. On the one hand, we had better results in all individual geographies, and on the other, as just explained, negative results stemming from hyperinflation accounting and dividend upstreaming were significantly reduced. All of the above led to a net consolidated income of 82 million euros, achieving an astonishing 59% higher year over year. Let's now turn to cash generation during the period. At first, the €22 million reduction in operating cash flow pops out. However, two things should be duly noted. The first one is the €12 million of extraordinary severance costs of the already mentioned cost-saving program in our cash business in LATAM. The second one is the delay of €14 million of sales that were collected during the first week of October. Factoring for these two effects, the pro forma operating cash flow amount to 147 million euros, 4 million euros higher compared to the previous year. The 9 million euros reduction in working capital requirements despite higher sales is worth of mention as we continue to pursue a strict discipline when it comes to DSO. As already stated, net financial debt reached 1.3 billion euros, resulting in a total net debt to EBITDA ratio of 2.3 times. It's worth highlighting that both the structure of the debt has recently been enhanced in October, as ProSaborCash has successfully issued a 300 million euros five-year bond at 3.38%. That's all from me for now. I will now turn the presentation over to our Head of Investor Relations, Juan Ignacio Galeano, who will give you more detailed information on the development of the specific business areas.

Thank you very much, Maite. Let's now have a look at the results of each business line covering the main performance indicators and most relevant aspects of the period. Starting with our cash business, I would like to reinforce the almost 7% of organic growth that we achieved during the first nine months of the year. Growth drivers have been twofold. First, volumes from our traditional business continue to grow at double-digit rates in the APAC region. Second, transformation products continue to deliver good results, reaching now 35% of total sales. This is highly relevant as it paves the way for more sustainable growth for the near future in more mature regions. At the same time, it should be stated that revenues of our traditional volumes in regions other than APAC continue to grow, partially thanks to our ability to pass through inflation, but most importantly because volumes themselves continue to grow, albeit at a lower pace. As for EBITDA, we already mentioned the extraordinary impact of the severance cost associated with the cost-saving program we deployed in LATAM. As you all know, the macroeconomic environment has drastically shifted with inflation rates slowing down. This has forced us to readapt our cost structure to this new environment. At the same time, the high penetration of cash today in the countries enable us to enhance logistics of our traditional business by making it more efficient and thus allowing us to reduce workforce. It's worth to highlight that once the extraordinary costs are excluded, EBITDA margin reached 11.8% in line with the previous year. Turning now to cash generation, operating cash flow reached €109 million, marking a 23% reduction compared to the previous year. Once again, the €12 million of extraordinary costs stemming from the cost-saving program, coupled with FX impact, mainly explains the reduction. At the same time, it should be noted that approximately half of the postponement in the collections that we already referred to were from our cash business. It is worth highlighting that the annual cost of upstreaming dividends from Argentina is now under 1 million euros, a significant reduction compared to previous years. Given the outcome of recent elections in Argentina, we should expect that the burden of such costs continues to be negligible in the foreseeable future. On the positives, the strong discipline in CAPEX and working capital requirements should be noted. Let's move now to our security business, which continues to favorably evolve over time. Total revenues reached 1.9 billion euros with the organic share reaching 13%. As usual, this is mainly driven by our volume-based strategy that leads to operating leverage, our capacity to pass through inflation to prices, and the outstanding performance of the operation in the U.S. The latter also explains the negative FX impact as the dollar continues to depreciate against the euro during the quarter. Compania de Seguridad Compania de Seguridad Compania de Seguridad Compania de Seguridad Compania de Seguridad Operating cash flow resulted in 37 million euros compared to the 2 million euros registered in the first nine months of last year. This is by every means impressive and marks a new standard for the business. Indeed, we've already reached volumes and margins that imply a positive cash flow, no matter how aggressive we are in sales growth. This is definitely a very important milestone for the company, as now all main businesses will contribute to our leveraging strategy. Let's now turn to the alarm business where we reached another important milestone. Indeed, our client base in MPR surpassed the 600,000 connections during the first week of October, while BTC continues to increase in ProSegur alarms. As we always stress, the growth itself is not nearly as important as the quality of the growth. Reason why we are very pleased with the results we are showing. Indeed, we continue to reduce churn rate in MPA, reaching 9%, two percentage points lower compared to the previous year. In Prosegur Alarms, churn rate showed some resistance to go down, mainly explained by the particular economic situation in Argentina, in which the population is under strong economic stress, negatively impacted in churn rate. As for ARPU and service margin, they continue to increase at very healthy rates. I would like to highlight that service margin includes depreciation costs. Compania de Seguridad Compania de Seguridad Compania de Seguridad We intend to continue betting on these channels as they bring good quality connections at lower costs. As the share of these alternative channels grow over time, the overall acquisition cost should go down, even if we continue investing in marketing and in product enhancement. Let's now turn to the following slide to see how all these indicators flow into recurring cash flow. The combination of higher service margin coupled with either stable or lower churn rate naturally implies an increase in recurring cash flow. That is, the resulting cash after declines that churn are fully reacquired. In the charts above, we are showing is the 12-month rolling recurring cash flow of both Prosegur Alarms and MPA. The one on the right side clearly indicates that the generating cash flow capacity of the two businesses combined for Prosegur stands at 81 million euros, 21% higher year over year. As mentioned in previous presentations, recurring cash flow is consistently reinvested into driving growth. Nonetheless, it reflects the true cash generation capacity of the alarm business, clearly underscoring its strong cash generation potential. This concludes our analysis of the performance of each business line for the first nine months of the year. Thank you all for your attention. I will now hand the microphone back to our CFO, Maite Rodriguez, for her closing remarks.