Prosegur Cash

Good day and thank you for standing by. Welcome to the Prosegur Cash Q2 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 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 answer your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Miguel Vandrez, Investor Relations Officer, and Javier Hergueta, CFO. Please go ahead.

Good morning to everyone, and thank you for joining today's call, where Javier Hergueta, our CFO, and myself will present our Q2 2026 results. The presentation shall take around 20 minutes, and any will share the most relevant developments for our business at the end of the period as well as the key elements of our financial performance. Javier will review the period's highlights, income statement, cash generation and debt abolition, as well as our transformation progress. After, I'll cover the main developments per region, and then Javier will share advancement in sustainability and the main conclusions ahead of the Q&A session. Should we not get to respond to everything in this session, we'll follow up 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.proseveredcash.com. Before moving to the financial results, I'd like to provide some context regarding the current landscape for cash. The quarter once again highlights that cash remains highly relevant for consumers, merchants, central banks, and regulators, especially in increasingly volatile and fragile digital economies. In the first news, we can read from Euronews on statements from Christine Lagarde and Piero Cipollone, top officials at the ECB, on the debate around the digital euro and the clear institutional position. The digital euro will not replace cash. In Europe, freedom to use banknotes continues to be defended as a core element of central bank policy and consumer choice, and as such should be protected. Cash is to be accepted everywhere, and this is the clear stance is defended by regulators. In any case, we must all continue to assure the highest level of availability and usage acceptance to protect the health of the cash system and of its effect in commerce. Along these lines, the legal tender regulation is being finalized in order to assure proper distribution and compulsory acceptance of cash in the region. In the second news, we can read from Harvard Business School about who ultimately pays for payment systems. Analysis highlights that all consumers, including cash users, end up financing credit card loyalty programs since merchants pass card fees onto all consumers. This is an important reminder that cash remains a low-cost payment option and plays a relevant role in payment fairness and inclusion as well as an actual regulator for excessive digital pricing, providing always alternatives to electronic payments without which they do increase their cost with no limits that are ultimately borne by consumers. Putting it in numbers, in the US there is an estimate US dollar 30 billion transfer from cash users to car holders each year amounting to around 400 US dollars per household. Third, coming from India, we can read cash withdrawals increased by 12% despite the growth of UPI, the Unified Payments Interface. This is a good example of how digital payment growth does not necessarily eliminate demand for cash. In fast-growing economies, both channels can coexist and serve different customer needs. In fact, recent changes on monitoring UPI transactions together to fees being charged to the service are raising general public strong concern and protests in the country. Lastly, MITA is consolidating a regulatory framework for crypto assets in the European Union. This institutionalization of the sector supports the demand for professional custody and digital security solutions. It is very relevant to assure a proper legal umbrella for the development of digital asset services so they grow securely for all constituencies affected and avoid unneeded volatility to the economy. Altogether, this example reinforces previously shared situations. Cash remains an essential infrastructure and a necessary complement to the broader payments ecosystem, where digital bears costs and risks that are borne by all consumers in a hidden manner. as well we see how digital regulation takes important steps forward. With this overview, I'll now like to hand it over to Javier for the highlights of the period.

Thank you, Miguel. Good morning to everyone and thank you as well for attending. The first half of 2026 shows a better quarterly trend in both growth and profitability while we continue to reduce net debt. This is particularly important because we are achieving it despite a still adverse currency environment and a mixed macroeconomic situation in all regions derived from sustained geopolitical tensions. Reported sales were broadly stable, decreasing by 0.4% to 1,001 million euros. Still, like for like, and when adjusted for the Evo's divestment, sales grew by 0.7% in euro terms. As well, The negative foreign exchange impact has slowed, with even a slight positive effect in Q2 standalone. It is also worth highlighting the acceleration in Latin America, where Q2 sales grew by 4.7% in euros. At margin level, EBITDA improved by 1.3% year-on-year, and EBITDA margins stood at 11.1%, while net profit grew by 1.9% year-on-year. In the standalone second quarter, The EBITDA margin improved by 30 basis points versus last year. In terms of transformation, it continues to be a solid growth engine. Excluding the mentioned ABLE sale, transformation products grew by 7.8% and their penetration reached 35.1% of sales, 240 basis points more than in the first half of 2025. During the cash generation, Free cash flow amounted to 29 million euros this semester, in line with 2025. Committed to financial discipline, we reduced total last 12 months net debt by 53 million euros and leverage remained stable at 2.3 times, which is 0.1 times lower than at the end of the first quarter. Finally, I would highlight two additional milestones. We obtained the MICA license to operate digital asset services in Europe and we renewed our commercial paper program showing the strength of our balance sheet and the appetite it generates in the market. With this overview, let me now move on to the financials. Looking first at the income statement, sales reached 1,001 million euros in the first half of the year, a 0.4% decline versus 2025. As shown on the right-hand side of the page, organic growth was positive at 3.3%, Revenue grew by almost 1% in the first semester and by 5.1% in Q2 standalone. Important to underline the change in training euros when we look at the reported second quarter. with sales growing by 3% year-on-year despite the negative effect of 2.2% due to the divestment in the quarter. EBITDA amounted to 173 million euros, growing 1.3% year-on-year. An EBITDA margin increased to 17.3% of sales. After depreciation of 61 million euros, EBITDA reached 111 million euros with an EBITDA margin of 11.1%. Amortization of intangibles was stable at 11 million euros, bringing the EBIT to 101 million euros and the EBIT relative margin to 10.1% of sales. Below EBIT, the financial result amounted to 17 million euros, with which earnings before taxes totaled 83 million euros, 8.3% of sales. Taxes reached 35 million euros, implying an improved tax rate of 41.9%, Compare with 45.1% in the first half of 2025, reflecting the impact of tax efficiency actions as well as the country mix. With all this, net profit reached 48 million euros, increasing 1.9% year on year, while consolidated net profit reached 46 million euros, up by 0.8%. Earnings per share increased by 1.6% to 3.14 euro cents. Overall, The P&L shows a good trend with improved performance in the second quarter. Moving now to cash flow and net debt, this first half part of the year reconfirms our focus on disciplined and prudent financial management. With an EBITDA of 173 million euros, provisions and other items deducted 38 million euros while income tax detracted the same amount. reached 37 million euros and working capital consumption was 30 million euros. This implies a particularly good performance in this second quarter where we invested 12 million euros in working capital to finance the 2.9% organic growth in the period. As a result, free cash flow amounted to 29 million euros in line with the 28 million euros generated in the first half of 2025 and the conversion ratio remained high at 79% parallel to 2025. After interest payments of 13 million euros, positive M&A inflows of 9 million euros, dividend and treasury stock payments of 2 million euros and other minor items, total net cash flow was positive by 18 million euros. Our net financial position lowered from 711 million euros at the beginning of the period to 688 million euros at the end of June. Foreign exchange also had a positive 5 million euro effect in the period. including IFRS 16 debt, deferred payments, and treasury stock, total net debt was reduced to 829 million euros, 53 million euros lower than one year ago, and our leverage ratio improved to 2.3 times, reducing 0.1 times when compared with the first quarter of 2026. This continued reduction in debt, as stated above, shows that it's a total priority for us always preserving the investment required to support commercial opportunities and continuing to grow our transformation solutions. Turning to the next page, transformation solutions reached 358 million euros on a reported basis, growing 4.7% year-on-year and representing 35.8% of total sales. The evolution is even clearer excluding AVOS. When this is isolated, transformation products grew by 7.8% to 348 million euros. Excluding AVOS, penetration increased from 32.7% to 35.1% of sales, which is 240 basis points increase versus the first half of 2025. Cash today continues to show a strong performance and remains one of the main contributors to this growth. We continue to see a strong customer acceptance across markets as clients look for solutions that combine efficiency, security, and better cash management. Transformation, therefore, remains one of the clearest levers to improve the quality of growth and the profitability profile of our company. With this, I hand it back to Miguel for the regional overview.

Thank you, Javier. I'll first turn to Latin America, our largest region, representing 58% of group sales. Sales in Latam reached 579 million euros in the first half, a 1.7% decline in reported terms. However, the underlying operating performance remains positive with organic growth of 2%. This trend accelerated quarter on quarter and Q2 standalone sales grew by 4.7% in euros. The inorganic effect was minus 1.5% and foreign exchange deducted 2.2%. If we look at the quarter standalone, it reflects a very positive plus 2.5% organic growth, the best in the last four quarters, which we are sure will continue into the future. As world currency affecting the quarter was positive 5.5%, it reversed on a long-time trend which will help us in our Euro performance. Ex-avos divestment grew by 8% versus 2025, a particularly positive number. Transformation products delivered strongly in the region. They reached €224 million, growing by 4.3%, and penetration increased from 36.4% to 38.6% of sales, a 220 basis point jump year on year. Profitability was resilient. EBITDA amounted to €91.8 million, slightly below last year, and the EBITDA margin improved by 10 basis points to 15.8% of sales. The region therefore continues to combine resilient profitability with increasing penetration of value-added transformation solutions. But these all turn to Europe. That represents 33% of group sales. Revenue in the region reached €330 million, growing 2.2% year-on-year. This performance was supported by an organic growth of 2.4% with a limited FX impact of minus 0.2% and no inorganic effect. The quarter showed a deceleration in the organic growth fundamentally driven by a slowdown on non-euro currency traffic due to international conflicts affecting our change business. Despite that, transformation products continue to progress well, reaching 111 million euros and growing by 6.3% to represent 33.7% of sales, implying a 130 basis points improvement over the first half of 2025. Profitability in the region was a touchdown, with EBITDA totaling €7.9 million, 2.4% of sales. This evolution was mainly affected by the performance of the forex business and by higher robbery-related incidents in the period. Even with this short-term pressure on EBITDA, the commercial performance of the region remains positive and the continued increase in penetration of the transformation product supports a better mix for the future. With this, I move to Asia-Pacific. That represents 9% of group sales and continues to show strong underlying growth. Reported sales reached €91 million, 1.4% below last year, explained by a negative 10.9% foreign exchange impact that continues a now six-quarter trend, which seems to be smoothening and a minus 2.3% organic effect. Most important to underline is that underlying organic growth remained very strong at 11.8%. Transformation products were broadly stable in reported euro terms, increasing by 0.9% to 23 million euros, but being able to hedge off the negative currency effect under penetration continues to rise, reaching 25.2% of total sales. That's 60 basis points more than in the first half of 2025. This is quite remarkable, especially taking into account the performance of the core business that continues to be very strong on the back of a strong cash demand and growing outsourcing opportunities. Profitability improved strongly. Evita grew by 41% to 12 million euros, and the margin increased by 390 basis points to 12.8% of sales. This confirms the region's progress towards a double-digit profitability profile. Asia-Pacific consolidates itself as an attractive growth region, with a strong organic momentum and an improved profitability profile. With this, I'll now hand back to Javier.

Thank you, Miguel. I would like to briefly review the main sustainability developments of the first half of 2026 before moving to conclusions. On the environmental front, we approved a five-year climate transition plan. This plan sets a roadmap to improve environmental efficiency ratios and reduce emissions. In the health and safety area, we as well continue to make progress, and productive hours related to vehicle-related workplace accidents Decrease by 51% year-on-year, reflecting the impact of ongoing prevention and training initiatives. We are completely committed to increasing the health and security standards of our operations since our people are our main assets. By protecting them, we improve our company health and our operations, and as well, we increase our performance. On cybersecurity, an area particularly critical for us, as should be for everyone as we can see that on a daily basis, infrastructures across the globe are increasingly attacked and threatened, we have trained and certified 1,500 employees. This is one more step to make us more resilient and secure as we reinforce awareness and readiness across the organization for this rising risk that will only continue to increase. Finally, on the view externals have on us, the lower part of the page summarizes the latest scores achieved. These relevant indicators of how we are seen by the rating and proxy communities are positive and the decrease in rating in some cases is due to changes in measuring criteria, not reducing as our standards. To conclude, and as I started this presentation, the first half of 2026 shows improved growth and profitability in the second quarter together with continued debt reduction. Reported sales are stable with a minor 0.4% decline that when we isolate the ABOS divestment means an increase of 0.7% in Euro terms. The negative FX impact decreased and even had a positive effect in the second quarter when considered standalone. Important to underline the good performance of LATAM, our main region, that showed a clear acceleration in Q2 sales in Euro terms. Profitability also improved in the quarter. EBITDA grew by 1.3% in the first half, the EBITDA margin stood at 11.1% and the Q2 standalone EBITDA margin improved by 30 basis points and 3 million euros year-on-year. Net profit increased by 1.9%. Transformation continued to gain relevance. Excluding NEBOS, transformation products grew by 7.8% and reached 35.1% of sales, 240 basis points more than in the first half of 2025. Free cash flow was 29 million euros in line with the previous year. Total last 12 months net debt decreased by 53 million euros and leverage remained stable at 2.3 times, 0.1 times lower than in the first quarter. Lastly, we obtained the MICA license to operate digital asset services in Europe and renewed our commercial paper program. Thank you very much again for your attention and we would now like to open the floor to your questions.

Thank you. As a reminder to ask a question please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 1 again. We will now take the first question. From the line of Joaquín García Quiroz from JV Capital, please go ahead.

Yes, hello, thank you for taking my questions. The first one is on the EBITDA margin evolution in Asia Pacific. It has been very positive these past three quarters, so if you could tell us a bit what would be a normalized level of margins for this division going forward? Should we expect continued improvement Thank you very much.

Good morning again. We'll cover the two questions. So the first one on the EBITDA margin for the Asian region. We are seeing a very positive evolution in the margin in the Asian region because of the underlying strong performance of all the geographies in the region. So we consider that the actual level could be a sustainable level going forward. In the case of Australia, also remember that we are consolidating that through the equity method. But it's all of the geographies performing in good shape and we feel that this trend should be continued going forward. And in relation to your second question relating the growth in Argentina and the region without Argentina, Argentina in Q2 remains slow, so when we look at the country as a whole, still the macro is very much concentrated on energy and agro, and the rest of it is still slow, so consumption remains at its lowest. Having said that, we feel that given that there are elections in October 27 at some point in time in the coming quarters, The government should start softening the adjustments policy and the monetary policy, and that should revert into recovery of the activity levels. But we are not yet seeing that, so in Q2 that's still falling, although the FX seems to be stabilizing in the last months. But when we look at the region without Argentina, we are seeing organic trends at the high single or mid single digit levels in the quarter, accelerating a bit in Q2 versus Q1, but stabilizing around mid single digit figures. So all of the countries across the region, excluding Argentina, are performing in good shape. Thank you.

As a reminder, to ask a question, please press star 1 1 on your telephone. That's star 1 and 1 on your telephone to ask a question. There are no further questions at this time. I would now like to turn the conference back to Javier Hergueta for closing remarks.

Right, so thank you all for taking the time to attend the conference call. In case there are any further queries, as always, our investor relations team remains available. And in any case, I hope to speak back again to all of you in our Q3 results presentation. And for those of you who are taking summer break, in the meantime, enjoy the holidays. So thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.