Prosegur Compania de Seguridad

Good day and thank you for standing by. Welcome to PROSIGUR full year 2025 results presentation, conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star one, one on your telephone. You will then hear an automated message advertising your hand is raised. To review your question, please press star one, one again. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Juan Ignacio Caliano, Head of IR. Please go ahead.

Juan Ignacio Caliano, Head of IR Good afternoon and welcome to PROSEGUR full year 2025 results presentation webcast. Before we start, I would like to remind you 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 Rodriguez.

Good afternoon and thank you all for your presence. We are pleased to present Prosegur results for the full year 2025. As you will see throughout the presentation, the company's results exceed those of the previous year in terms of growth and profitability, especially in the security and alarm businesses. This performance resulted in a more diversified and therefore more sustainable cash generation profile. It's worth highlighting that this should be the case now for the foreseeable future. Focusing on the P&L, consolidated net income achieved an impressive 54% increase, demonstrating not only the strong performance of the businesses, but also an efficient management of treasury and taxes. 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 milestones of the period. Sales grew by 0.5% compared to the same period last year. Organic growth reached 10%, although it was mostly upset by the FX effect. Meanwhile, the security business has consolidated itself as the main growth engine of the group. driven primarily by increasing penetration in the USA, along with a solid performance across the rest of the geographies. Regarding profitability, EBITDA reached €357 million, an increase of 8.9% year-on-year, mainly driven by the healthy growth in the security business. Indeed, volume growth, together with an agile commercial strategy to pass through costs into prices, explains this performance. Our cash business continues to be affected by the macroeconomic situation in Argentina, which can be summarized in three key points. First, although the trade balance has improved, this has not yet translated into domestic consumption. Second, the Argentine peso has depreciated against the euro. And finally, monetary policy remains highly restrictive. Despite this impact, the business EBITDA margin remains at 12%. mainly explained by the accelerated growth in the European region, the double-digit growth in APAC, and the strong performance across the remaining LATAM geographies. For our alarm 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. As for cash generation, we were able to partially offset the slowdown in our cash business thanks to the impressive full-year cash flow generated by the security business, which delivered 87 million euros and has consolidated itself as a solid contributor to the group's diversified cash flow profile. As mentioned, and as we will review in detail later in the presentation, The combination of the cost-saving program, FX volatility, and the macroeconomic uncertainty in Argentina negatively impacted cash generation in our cash business. We continue to maintain a strong and solid debt position. Indeed, net debt stands at 2.4 times EBITDA, slightly impacted by the decrease in the value of our telephonic shares and the cash outflow associated with the extraordinary efficiency plan in the cash business. We would also like to highlight the proposed €19 million dividend for 2026, which further reinforced our commitment to delivering value to our shareholders. Let's now turn to slide two, where I would like to deep dive into our sales and EBITDA figures. As said, full year 2025, total sales increased by 0.5% over last year, reaching €4.9 billion. Discounting for the FX effect mainly in Latam, 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 main driver of growth, despite the macroeconomic situation in Argentina. Europe is accelerating its growth, and both the USA and the APAC region continue to grow at above average rates. This is highly relevant and highlights the future growth avenues of our main businesses. As you are aware, in our security business, we remain firmly committed to the US market, given its scale, profitability profile, and the considerable potential for further penetration. Compania de Seguridad Moving now to further review profitability, EBITDA reached €357 million, marking a healthy 8.9% increase compared to last year. Our cash business registered an EBITDA of €238 million, marking a 5% decrease compared to the previous year, recovering part of the drop seen in previous quarters. This includes the extraordinary expenses incurred due to the implementation of the cost-saving program, fully offset this quarter by extraordinary income of a similar amount resulting from a lower deferred payment related to the acquisition of change group. Turning now to our security business, EBITDA amount to 19 million euros, 10.7% higher compared to 2024. Healthy volume growth coupled with a strict discipline on cost explains 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 constitutes 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. Let's now turn to our full P&L that as can be seen showed a remarkable increase compared to last year. The improvement in financial results as previously noted in past presentations is largely linked to the ongoing normalization of the Argentine economy. Inflation has been declining rapidly significantly reducing the impact of hyperinflation accounting. At the same time the sharp narrowing of FX streets has also helped making dividend upstreaming considerably more efficient. Moving down to accrued taxes, it is worth highlighting the 561 basis points reduction in the effective tax rate. The rationale behind this improvement is twofold. On the other hand, we recorded strong results across nearly all geographies, which have enabled us to offset prior year losses. And on the other, As mentioned earlier, the negative effects from hyperinflation accounting and dividend upstreaming were significantly reduced. All of the above led to a net income of 119 million euros, representing a 53% year on year increase. Let's now move on to cash generation for the period. At first glance, the 26 million euros reduction in operating cash flow stands out. However, one point must be properly highlighted. The 15 million euros in extraordinary severance payments related to the previously mentioned cost-saving program in our cash business in Latam. Although there was an upset at the P&L level through extraordinary income, there was no positive impact at the operative cash level. Compania de Seguridad With that in mind, the net debt to EBITDA ratio stands at 2.4 times. Although CapEx control and improved working capital have supported performance, net debt remains above the level initially projected, primarily due to the external factors beyond our control, namely the depreciation of LATAM currencies and the decline in the value of our Telefonica shareholding. Excluding these two effects, That's all from me for now. I will now turn the presentation over to our Head of Investor Relations, Juan Ignacio Galliano, who will give you more detailed information on the development of the specific business areas.