Prosegur Cash Unsp/Adr

Good day and thank you for standing by. Welcome to the Procure Cash Q3 2025 results presentation. 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, you will need to press star 1, 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Javier Regata, CFO. Please go ahead.

Good morning to everyone, and thank you for joining us today. I'd like to welcome you all to our 2025 Q3 resource presentation led by our CFO, Javier Regata, and myself. The presentation should take around 30 minutes, during which we will review key developments affecting our business and its performance. We'll also move on to review our key financials, followed by an update on our transformation strategy, as well as main developments by region. We'll then end up with conclusions before opening a Q&A session. Should we not get to respond to everything today, we'll get back on any open topics on an individual basis. I want to again thank you all for attending and remind you that this presentation has been pre-recorded and is available via webcast on our corporate webpage at www.procedurecash.com. Before handing over to Javier, as we always do, I'd like to share some interesting cash news in different geographies. They range from the use of cash in Latin America, the need for improving cash servicing in the UK, a major disruption on multiple digital payment systems, or the sustained demand for banknotes during major crisis. These aspects, covered by the mentioned article, show many of the unique attributes of cash that are not replicable and only stress its vibrancy and relevance. First, we can read from Electronic Payments Company MasterCard that cash is the most widely used payment method in Latin America, being used by over 60% of respondents and being some reasons for such a high adoption rate, its unique convenience and the security it provides to the end user. I would like to highlight from this article three elements of relevance to us. It underlines unique characteristics cash has as a payment mean, such as its convenience and its security. Second, that it refers to Latin America, our most relevant geography, and where cash has a particularly strong role to play. And third, that it comes from MasterCard, whose business interest is contrary to the use of cash. The second piece of news we can read from the Guardian in the UK, referring to some latest surveys that indicate that over 70% of people in the United Kingdom support the use of cash. It underlines that the recent growth it's experiencing is leading to some businesses not having sufficient capacity to serve their end customers' cash requirements. It's particularly important to note two aspects. One not new to these presentations, the continued growth in cash usage in the material UK market, and second, that cash needs a certain minimum infrastructure to be run in an effective manner. To this end, we must remind that developed economies of the UK are commencing to actively protect and promote it. In the third piece of news, we can read from CNN about the critical outage at Amazon Web Services that took place early last week. Because of it, for several hours, thousands of services were down and millions of users were affected across the globe, from the U.S. to Spain. Many of the services disrupted ranged from online banking, electronic payments, shopping, or the travel industry. It reminds us of how fragile the Internet's backbone, critical for multiple digital payment transactions, It as well sets a clear message to why a solid cash-based infrastructure is fundamental to assure the correct functioning for our economies. Lastly, we can read from the European Central Bank on some important lessons of the unique role that physical notes play across crisis. It emphasizes the demand for magnotes, has been amplified by sharp increases in public demand during mayor crisis, highlighting the unique role and attributes of physical cash. Again, it's a central bank that signals the unique features cash brings to the system when it comes to assuring its reliability and its trustworthiness. These crises have occurred often in the past, and seem to become of only greater relevance and increased frequency as we advance towards an ever more uncertain future. All of the above news just underlines that cash is strong and will become stronger in different regions of the world for its unreplaceable characteristics. After this brief news update, I'll share today's agenda. Firstly, Javier will review the previous highlights. Then he will share with us the key financials for the quarter, followed by an update on our transformation initiatives. Then I'll share key developments by region, And finally, Javier will conclude with main takeaways before opening the Q&A session. Please, Javier.

Thank you, Miguel. Good morning to everyone, and thank you for joining our Q3 review. I want to highlight the key events that have taken place in the period characterized by, despite a strong currency impact, a solid underlying performance that continues to allow us to keep deleveraging. Sales in Euro terms reflect a 2.3% reduction when compared with the same period a year ago. This is despite the fact that organic growth has been sustained at almost 7% in the period. But such growth has been offset by an over 10% negative currency impact. This impact has been especially negative in Latam and Asia Pacific, connected to the evolution of the US dollar versus the euro. By regions, It is particularly outstanding to see the growth of our Asia-Pacific countries by well over 20%. If we turn to profitability margins, we can observe that EBITDA stands at 11% of sales. It's important to indicate that the efficiency program we announced three months ago continues to take place. If we are to isolate these and show where we perform our profitability, EBITDA margins stands at 11.8% in line with the one experienced one year ago. As we travel down the P&L, we reach a net income of 67 million euros that implies an improvement of 1.6% versus 2024. This signals that despite the efficiency program I just mentioned and the effect of currencies in the top part of our P&L, the lower part is able to more than recover both aspects, showing the resilience of our performance. Turning to transformation, It now reaches 35.1% of total sales. This implies a growth in Euro terms of 6.8% at the same time as they accelerate their penetration over total sales by over 300 basis points. This certifies the very positive progression of our innovation strategy in order to have the most solid company into the future, and most importantly, how welcomed it is by our customers. Fourthly, Free cash flow for the period totals 76 million euros, which allows for a total net debt reduction of over 60 million euros on a last 12 months basis and enables us to maintain a stable leverage of 2.3 times total net debt to EBITDA ratio. These figures clearly show the resilience of our business model, our ability to generate cash, and our strong financial discipline. Lastly, I'd like to underline that we have recently issued a 300 million euros bond maturing in 2030 that contributes to an even more solid and diversified funding capacity into the future. Our offering has been well received by the market, confirming the trust bondholders place on our business model. In this line, and thanks to our prudent and disciplined approach, we can reassure well in advance the availability of financial sources to undertake the repayment of our existing €600 million bond in February 2026. As well, in terms of innovation, I'd like to share the launch of Prosegur Digital Gold last month. This is a very innovative solution that allows end customers to invest in tokenized gold with Prosegur, assuring every single step of the process, and that allows end customers to benefit from a 25% more efficient price than investing in physical gold. I will now turn to our key financials. First, I will review our profit and loss account. Revenue in these first nine months of the year, total 1,488 million euros, a 2.3% reduction over the one achieved in 2024. As earlier shared, if we look at the top right-hand side of the page, we can see this decrease is driven by a negative foreign exchange impact of 10.5%, whilst organic growth has been positive of 6.9%, showing the health of the underlying business, and in organic growth contributes an additional 1.3% impact. EBITDA for the period reached €251 million, or 16.9% of sales, which is an 8.6% reduction over the one experienced a year ago, while EBITDA reaches €164 million, 11% of sales, or an 8.5% decrease over the one observed a year ago. Looking at the bottom right-hand side of the page, we can see that this profitability is impacted by 12 million euros derived from the extraordinary efficiency program which started in the second quarter of the year. Factoring this effect, the pro forma nine-month figure would reach 176 million euros, which in relative terms represents 11.8% of sales, in line with one year ago. Financial results. accounts for 28 million euros, a substantial 15 million euros reduction over the amount expensed one year ago, this reduction being a constant throughout the year. With this, we reach an earning before taxes of 120 million euros, being 8.1% of sales or 40 basis points better than the one achieved one year ago. This all despite the already mentioned negative currency impact on operating level as well as absorbing the extraordinary efficiency program in place. Taxes total 53 million euros, implying a 44.5% tax rate, which we aim to lower versus last year in the next quarter. With this, net profit reaches 67 million euros, that is 4.5% of total sales and a 1.6% improvement over the same period a year ago. I will review our cash flow as well as our debt. Starting from our 251 million euros CBDA, Affected by the already mentioned foreign exchange impact as well as the extraordinary efficiency program, provisions and other items deduct 20 million euros, which is a 5 million euros increase from the same period one year ago. Income tax outflow accounts for 67 million euros, 20 million over the first nine months of 2024, which was particularly low. Investment in CAPEX. in the first nine months of the year totals 51 million euros, which is a substantial 16 million euros decrease versus 2024. This has been possible thanks to lower openings in the Forex business, as well as an active management of customer CapEx inventory. Investment in working capital to finance the close to 7% organic growth totals 37 million euros. With this, We reached a free cash flow of 76 million euros, which implies an improved conversion rate over EBITDA of 80%. Interest payments totaled 18 million euros, and M&A payments accounted for 8 million euros in the period, a 24 million reduction versus the previous year. Dividends and treasury stock reached 8 million euros, 22 million less than a year ago. Let me remind, the dividend payment in 2025 will take place in the fourth quarter. The others line totals 24 million euros, which is a 5 million euros improvement over a year ago. With all this, total net cash flow is positive 18 million euros, reflecting our strong capex discipline and our effective working capital control. When we add our free cash flow to the net financial position at the beginning of the period of 643 million euros and deduct the negative impact of foreign exchange of 9 million euros, it results in an end-of-period net financial position of 634 million euros. Now looking at the top right-hand side of the page, to the above net financial position, we have to add 106 million euros of IFRS 16 related debt, 14 million less than one year ago, and 113 million deferred payments, 16 million less than in 2024. Taking into account the treasury stock of 16 million, 10 million more than in the first nine months of 2024, total net debt reaches 836 million euros. This implies a very relevant total net debt reduction of 62 million euros year-on-year. If we look at the leverage ratio, it is 2.3 times over EBITDA, in line with the one we saw in Q2 2025 and continuing a very substantial improvement of 0.6 times versus the one we had at the close of the third quarter in 2024. Our transformation products, continue to grow in relevance and reach over 35% of sales at the end of the third quarter. Total sales derived from these products amount to 522 million euros, a 6.8% increase over last year, or 33 million euros more if we talk in absolute euro terms. Penetration over total sales, as mentioned, reached 35.1%, which is a 300 basis points improvement over only one year ago. And cash today and forex continue to be the key levers in our transformation growth. The fact that these products continue to grow only confirms how well they are received by our customers, how strongly they support them, and how relevant they are not only today, but especially to best position us into the future. With this, I would like to hand over to Miguel so he can share our evolution from a geographical standpoint.