Prosegur Cash Unsp/Adr

Good day and thank you for standing by. Welcome to the Procure Cash Q1 2026 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 this 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, Miguel Andres, head of IR. Please go ahead.

Miguel Andres Good morning to everyone, and thank you for joining today's call with Javier Arrieta, our CFO, and myself will present our Q1 2026 results. The presentation shall take around 20 minutes, in which we'll share the most relevant events that have taken place in the period for our business, as well as our performance. Javier will review the period's highlights, key financials, and our transformation progress, after which I'll share the main developments by region, before Javier closes with conclusions and opens the Q&A session. Should we not get to respond to everything in this session, we'll get back on any open topics on an individual basis. I want to again thank you all for your attendance and remind everyone that this presentation has been pre-recorded and is available via webcast on our corporate webpage, which you can find at www.procedurecash.com. Before we move to the financial results, I'd like to offer some context regarding the current landscape for the cash industry, which continues to show its resilience and the fundamental necessity our society has for cash. These pieces of information range from access to cash in Australia, the role of cash as a cautionary payment method in Europe, the institutional protection of cash in Switzerland, or the continued growth of cash in circulation in India. In the first news, we read from Business Insider that the European Central Bank advises holding cash is a key precaution to be taken in the current and growing uncertain environment. in the Iran war, border international tensions, cyber attacks, blackouts, or multiple vulnerabilities in lethal payment systems. The instrument says that cash is not only a payment method, but also a key element of resilience in moments of uncertainty. Next, as political Europe covers, Switzerland has decided to safeguard cash after a vote that has drawn broad international attention. This is yet another example of how both institutions and citizens continue to value freedom of choice in payments and the trust that fiscal money provides. Thirdly, the monetary brief from RBA's Payment System Board states that authorities in Australia are reinforcing access to and distribution of cash. This is especially relevant for regional and remote areas and shows that regulators continue to regard cash as an essential service that must remain available to all citizens. Lastly, in moving to India, cash in circulation rose to record level in January, increasing by 11% versus January 2025. This shows that in fast-growing and increasingly digital economies, cash remains highly relevant for everyday transactions and savings behaviors. All these cases emphasize the unique attributes of cash and its vital role for social and financial inclusion. As a market leader, Percival Cash remains dedicated to managing this essential infrastructure in close coordination with central banks and financial institutions. With this overview of the cash environment, I would now like to hand it over to Javier so he can share with us the main highlights of the quarter.

Thank you, Miguel. Good morning to everyone, and thank you as well for attending. The first quarter of 2026 has been a solid start to the year for our company. Despite an adverse foreign exchange environment, we have been able to deliver strong net profit growth, continue accelerating our transformation, and reduce our net debt. All of this, once again, demonstrates the resilience of our business model. Our top line has shown organic growth of 3.2%, with Europe hosting a positive 3.6% trend and building on past quarters. However, this good operating performance has been offset in Euro terms by a negative 6.6% foreign exchange impact and a slight 0.2% inorganic effect, with which sales declined by 3.7% to 497 million euros. Argentina continues to suffer very slow consumption as we have shared in previous calls due to the balancing policies the government has set in place. Despite the above, Our EBITDA margin has remained broadly stable at 17.3%, in line with the 17.4% reached in the first quarter of 2025. EBITDA margin stood at 11.3%, while net profit increased by 8.1% year-on-year to 26 million euros, showing an improvement in the lower part of our T&L. Regarding transformation, we continue to advance at a strong pace, These products grew by 6.2% and now account for 36.4% of total sales, 340 basis points more than in 2025. Cash today continues to be the key driving force of such growth in the period. In terms of cash generation, free cash flow totaled 6 million euros in the quarter. This has been achieved with lower working capital use than in 2025 and has allowed us to reduce LTM net debt by 47 million euros. Lastly, I would like to mention the sale of the Eibos in Argentina and Paraguay, as well as the cancellation of treasury shares following the buyback process, both of which are relevant milestones of the quarter. I want to underline that we are very closely monitoring the evolution of current geopolitical and strategic tensions which can have an impact in our business. Despite this is yet to fully materialize, we can already observe an increase in fuel prices that we are in due course passing to tariffs and that should have a marginal net effect, while we have to follow the potential impact on fuel supply chain for which we have already set in place contingency measures such as building fuel reserves. On the other hand, we see that inflation is in an upward trend. This inflationary environment, if it is to stay, will have a positive impact in the speed of cash being used and hence in our volumes despite lower economic growth. As well as we have read in the news, this growing uncertainty favors the role of cash and its resiliency to the system. As said, different levers that should have a net positive impact are to be monitored. In this context, Continuing to control debt and focusing on growing sales to improve our profitability are critical. With this overview, let me now go into the financials in more detail. First, looking at our income statement, revenue reached €497 million in the quarter. As shown on the right-hand side of the page, organic growth stood at 3.2%, while the inorganic perimeter had a limited negative impact of 0.2%. Foreign exchange, however, negatively affected us by 6.6%, hitting Asia in a particularly strong manner. When adding all these effects, reported sales decreased by 3.7% year on year. EBITDA totaled 86 million euros and the margin remained broadly stable at 17.3% of sales, just 10 basis points below the level achieved in the first quarter of last year. Together with depreciation of 30 million euros, this brings us to an EBITDA of 56 million euros and a margin of 11.3%. Farther down the P&L, amortization of intangibles reached 5 million euros, resulting in an EBIT of 51 million euros, equivalent to 10.2% of sales. It is also important to note that the financial result improved significantly from 12 million euros in the first quarter of 2025 to 6 million euros in the current period. This allows us to reach an earnings before taxes of 44 million euros, a 2.5% increase year-on-year, and to improve our EBT margin over sales to 8.9%. Total 19 million euros, slightly below last year in absolute terms, and the tax rate shows a very positive 300 basis points decrease to 42% result of active tax efficiency actions as well as an improved tax country mix, which we aim to sustain during the year. With all that, net profit reached 26 million euros, growing 8.1% versus one year ago, and representing 5.2% of sales. Consolidating net profit totaled 25 million euros, up 7.8%, while earnings per share reached 1.68 euro cents, 8.6% more. I would like to underline the strength of our P&L, especially in the lower part, where the improvement in financial result and tax rate has allowed us to continue increasing profitability for our shareholders, despite continued foreign exchange headwinds. Moving now to our cash flow and net deposition, this quarter reflects our consistent, disciplined financial management. Starting from the already shared EBITDA of 86 million euros, provisions and other items deduct 20 million euros, while tax and ordinary profit amounts to 20 million euros. Investment in CAPEX totaled 22 million euros in the quarter. A key positive development in the period has been working capital. Its use decreased to 18 million euros from 40 million euros in the first quarter of 2025. Thanks to this improvement, free cash flow totaled 6 million euros, slightly above the 5 million euros achieved one year ago. The conversion ratio stood at 75% and remains at a strong level, especially for demanding first quarter. After interest payments of 10 million euros, positive 15 million euros in money inflows and other minor items, total net cash flow for the quarter was positive by 7 million euros, a significant 25 million euros improvement over the same period of last year. Our net financial position improved from 711 million euros at the beginning of the quarter to 700 million euros at the end of March. Including IFRS 16 debt, deferred payments and treasury stock, Our total net debt stands at 845 million euros with our leverage ratio at 2.4 times. It's important to note that we've achieved a total net reduction of 47 million euros over the last 12 months, once again reflecting our disciplined approach to capital management. With this, let me move now to transformation. Looking into transformation, I'm very pleased to share that these products continue to grow their relevance and now represent 36.4% of total sales. Revenue from transformation products reached 181 million euros in the first quarter, which is a 6.2% increase versus the same period of 2025. And this all despite as well being negatively affected by currency depreciations. This performance has been supported by a strong contribution from Cash Today. These solutions continue to receive strong customer acceptance across markets. Penetration over total sales has increased from 33% to 36.4%, implying a 340 basis points year-on-year improvement, clearly showing our transformation is advancing at a fast pace. With this, I would like to pass over to Miguel so he can share with us the key developments in our regions.