COMPANY PRESENTATION - Prosegur
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COMPANY
PRESENTATION
INVESTOR RELATIONS
DEPARTMENT
1
DISCLAIMER
This presentation contains forward-looking statements and information relating to regulation in countries in which the Company and its subsidiaries do business;
[Prosegur Compañía de Seguridad, S.A.] (the “Company”) and its subsidiaries acquisitions, investments or divestments which the Company and its subsidiaries
that are based on the current beliefs of the Company’s management, key may make in the future; the Company and its subsidiaries capital expenditures
expectations and assumptions, as well as information currently available to the plans; their estimated availability of funds; their ability to repay debt with
Company and projections of future events as well as assumptions made and estimated future cash flows; security threats worldwide and losses of customer
information currently available to the Company. These forward-looking valuables; failure to maintain safe work environments; effects of catastrophes,
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“should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” coverage and increases in insurance cost; loss of senior management and key
“intends,” and similar words or phrases. Other forward-looking statements can be personnel; unauthorized use of the Company’s intellectual property and claims of
identified in the context in which the statements are made or by the forward- infringement by the Company or its subsidiaries of others’ intellectual property;
looking nature of discussions of strategy, plans or intentions. Such forward- changes in business strategy and various other factors. Should one or more of
looking statements, as well as those included in any other material discussed at these risks or uncertainties materialize, or should any other unknown risk occur,
any management presentation, reflect the current views of the Company with or should any of the underlying assumptions prove incorrect, actual results may
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COMPANY PRESENTATION 2019
2
ONE
GROUP,
THREE
BUSINESSES
COMPANY PRESENTATION FY 2019
3
PROSEGUR GROUP
Prosegur: a success story
Since its foundation in 1976, Prosegur has grown to become one of the undisputable global leaders in the security
industry…
3,939
3,783
2,052
2015
2009 2018
2014
Focus on Business Lines
480
1998 Consolidation of the integrated Profitability and continual
model and expansion into Asia- expansion
2008 Pacific • Reorganization of structure
• Specialization in Security Solutions around business lines vs.
Expansion in LatAm & Europe geographies
for different client sectors
and Increase of services
portfolio • 2011: Entry into Singapore, India • Initiated Global CyberSecurity
1976 • Focus on Security: disposal of
and Germany services business unit
• 2016: Entry in South Africa
1997 FM and Cleaning businesses • 2012: Entry into China
• 2001: Full entry in LatAm and • 2013: Rated BBB Stable by S&P. • 2017: Prosegur Cash IPO
Foundation and initial Expansion
France Issuance of a € 500 million Bond and • 2018: Entry in Central America
• Incorporated in 1976 Entry into Australia & Philippines
• Creation of the Technology
• 1980: Entry into Portugal Business Unit • 2019: Entry in the US
• 1987: Publicly Listed on Madrid • 2008: Entry into Mexico and
Stock Exchange Colombia
• 1995: Initiating activities in LatAm
COMPANY PRESENTATION FY 2019
4 Yearly revenues of last year in the period in €Million
PROSEGUR TODAY
25 +170,000 >9,000
COUNTRIES EMPLOYEES ARMORED
WORLDWIDE VEHICLES
>100,000 +550,000 ALARM OVER 220 FULLY
MANAGED CONNECTIONS INTEGRATED
ATMS ACQUISITIONS
COMPANY PRESENTATION FY 2019
5
A GLOBAL SECURITY COMPANY WITH A LEADERSHIP POSITION IN FOCUS MARKETS
WE ARE MARKET LEADERS IN 16 OUT OF OUR 25 GEOGRAPHIES
1
Guarding and Cash in transit & cash Alarm Position in the market
technology management Monitoring share ranking
GERMANY
1
FRANCE
USA 3
n/a
PORTUGAL
1
CHINA
MEXICO TURKEY
SPAIN 5
GUATEMALA 3 1
n/a
HONDURAS
COSTA RICA INDIA PHILIPPINES
NICARAGUA 2
COLOMBIA
1
EL SALVADOR
1
1 SINGAPORE
PERU 1
1 BRAZIL
1
PARAGUAY
1
URUGUAY
CHILE 1
1 SOUTH AFRICA AUSTRALIA
ARGENTINA
n/a 2
1
Prosegur Intl’ Player 1 Intl’ Player 2 Intl’ Player 3 Intl’ Player 4
#2 #4 #1 #3
Source: DBK, Aproser and internal sources
#3 #1 #2
COMPANY PRESENTATION FY 2019
6
DELIVERING SUPERIOR GROWTH AND SHAREHOLDER RETURNS
Figures in €m
Revenue (€m) EBIT (€m) Market Cap (€m)
+286% +270% +352%
CUMULATIVE DIVIDEND
392
4,291 4,042
DISTRIBUTED 2004-2017:
€985m
(1)
1,112 106 894
2004 2017 2004 2017 2004 2017
(1) Market Cap as of December 2017
COMPANY PRESENTATION FY 2019
7
ORGANISATIONAL MODEL: “ONE GROUP, THREE BUSINESSES”
ONE GROUP, THREE BUSINESSES
RATIONALE
▪ Accelerate growth
▪ Increase specialization and efficiency
▪ Simplify the organisation
A B C
IMPLICATIONS / BENEFITS Publicly
listed
▪ All businesses have reached the
maturity to be managed separately in 2017
▪ Different capital needs and KPIs PROSEGUR PROSEGUR PROSEGUR
CASH SECURITY ALARMS
▪ Customer centric model across
regions
▪ Accelerates sharing of best practices
across regions
PGA
(Financial and support
functions)
COMPANY PRESENTATION FY 2019
8
A. CASH IS A SUCCESS STORY: A GLOBAL LEADER WITH
RESILIENT GROWTH AND STRONG CASH GENERATION
SALES* EBIT Margin(%)* Countries / empl.
€1,732MM 15,5% 20 / 60,000
*FY18 business figures
OUR BUSINESS
▪ #2 globally with 14% market share (vs. 7% in 2007)
▪ #1 in our focus Cash markets (14/20 countries)
▪ Leading scale, density and market share
▪ Outperforming the market (business has grown x4 in € sales
in the last 7 years)
▪ Solid fundamentals → already growing in new products and
capturing the next “outsourcing wave”
OUR OBJECTIVES
▪ Continue delivering above-market organic growth at constant
currency
▪ Lead industry consolidation player
▪ Lead the third wave of outsourcing (Cash Automation in Client,
IAD, Back Office Management, Branch Teller Staff, etc.)
▪ Strong cash generation to fuel Group’s growth
COMPANY PRESENTATION FY 2019
9
B. SECURITY IS A BUSINESS TO TRANSFORM AND GROW,
TO BECOME AN “INDUSTRY CHAMPION” AGAIN
SALES EBIT Margin(%) Countries / empl.
€1,946 MM 2.8% 15 / 103,000
OUR BUSINESS
▪ #5 global player with a leading position in selected markets
▪ Industry leading technology-based solutions
▪ Differentiated growth strategies for each market based on
development stage
▪ Expanding into mature markets with disruptive value proposition.
▪ Main player in LatAm leading the transformation of the industry
OUR OBJECTIVES
▪ Continue transformation towards technology-based products
▪ Improve margins → all geographies with profitability in line with peers
and Group’s best practices
▪ Grow and expand in US
▪ Complete integration of legacy businesses and operational
improvements in Brazil
▪ Build a solid “Cybersecurity” platform
COMPANY PRESENTATION FY 2019
10C. ALARMS IS A HIGH GROWTH AND HIGH RETURN BUSINESS
WHICH WE WANT TO ACCELERATE WITH ADEQUATE INVESTMENTS
SALES* Total Connections* Countries / empl.
€262 MM 547,000 10 / 7,000
OUR BUSINESS
• Unparalleled platform → significant investments undertaken over the
last 5 years to enter and reach critical mass in 10 countries
• Developed state-of-the-art products and launched next generation
alarm “SMART”
• Strengthened sales force, tripled from 2011
• Best in class and improving churn from 12% in 2011
• Rapid and consistent growth benefiting from low penetration in focus
markets
OUR OBJECTIVES
• Accelerate customer acquisition through investments in sales &
marketing (e.g., sales team, lead generation)
• Selective new geographies (big city approach)
• Continue to grow ARPU through penetration of SMART
• Roll out SMART product in all geographies
• Continue to improve churn levels
• Focus on product innovation to capture “the smart home” opportunity
COMPANY PRESENTATION FY 2019
11PGA - CENTRALIZED EXTERNAL SUPPORT TO THE THREE BUSINESSES…
PROSEGUR HOLDING
CASH SECURITY ALARMS
Commercials & Operations Commercials & Operations Commercials & Operations
Cash Internal Support Security Internal Support Alarm Internal Support
5% Mark Up
PGA – External support
ONE SERVICES OFFERED
▪ Human Resources ▪ Corporate Development ▪ Insurance
GROUP ▪
▪
▪
Finance/Tax
Legal
Security
▪ IT
▪ Real Estate
▪ Brand
▪ Purchase
▪ Marketing
COMPANY PRESENTATION FY 2019
12… SUPPORTED BY STABLE INVESTMENT GRADE RATINGS
BBB/A-2
Outlook Stable
October 2018
SUSTAINED STRONG
LIQUIDITY PROFILE
MODERATE
LEVERAGE
EXCELLENT CASH FLOW GENERATION
WITH MODERATE CAPITAL EXPENDITURE
AND WORKING CAPITAL REQUIREMENTS
MINIMAL TRAPPED CASH
ACROSS OPERATIONS
COMPANY PRESENTATION FY 2019
13PROSEGUR
CASH
Leading the consolidation process
of the Cash industry while fueling
the Group’s growth
14
COMPANY PRESENTATION 2019CASH, STRONG GROWTH OF THE UNDERLYING DRIVER…
USE OF CASH IN TERMS OF VALUE (MN)
USD 1.517
+5% 1.463
EUR 1.380
+7% 1.126 1.170 1.299
1.083 1.198
1.017 1.127
956 1.035
889 913 942
840
763 806 853 888
677 759 784 792
628 690 720
565
501
436
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
297
270
GBP BRL
+6% 73 +14% 215 220
68 199
64 183
58 60
55 158
50 52
49 147
45 128
36 37 38 113
35 101
84
61 68
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Central bank data, IE Economics
COMPANY PRESENTATION FY 2019
15…BOOSTS THE GROWTH OF THE CASH SECTOR, ALTHOUGH AT DIFFERENT LEVELS IN EACH REGION
CASH MARKET SIZE EXPECTED GROWTH BY
(USD BN) GEOGRAPHY 2015-2020
+4,4%
18.8
15.2 8,3%
Africa & 1.4
5,6%
Middle East (9%)
2.4
Latam (16%)
4,0%
US & Canada 2.7
(18%)
Asia Pacific
4 2,1%
(26%)
Europe
1,6%
4.7
(31%)
2015 2020
Main characteristics of attractive markets:
(i) Growing economies;
(ii) Moderated elevated inflation and interest rates;
(iii) Certain level of insecurity;
(iv) Degree of sophistication of banking sector
Source: Freedonia 2017 report
COMPANY PRESENTATION FY 2019
16PROSEGUR HAS BECOME A GLOBAL RELEVANT PLAYER IN THE LAST FEW YEARS…
CASH GLOBAL COMPETITOR’S MARKET
MARKET SHARES (2018) (1) SHARE EVOLUTION
Intl’ Player 1 0bps -200bps +700bps 0bps -800bps -100bps
Prosegur
Intl’ Player 2
40%
40%
Intl’ Player 3
37%
Intl’ Player 4
20%
22%
Others 20% 20%
40%
17%
14% 14% 13% 13% 13%
9% 9%
#2 14% 7%
4%
4% 5%
Local Intl’ Player 1 Intl’ Player 2 Intl’ Player 3 Intl’ Player 4
Players
4% 13%
9% Change in Market Share 2007 2015 2018
'07-18
(1) Market share calculated based on companies revenues: Prosegur Cash , Brinks & Loomis are based on
2018 results; G4S and Garda are based on estimations. Prosegur Cash market share includes India.
COMPANY PRESENTATION FY 2019
17…WITH STRONG POSITIONS IN EACH OF THE LOCAL MARKETS
2018 MARKET SHARE
PROSEGUR CASH GLOBAL FOOTPRINT PROSEGUR
#2 GLOBAL MARKET POSITION
57%
Latam
Europe 10%
Africa & Middle East 10%
Asia Pacific 4%
FRANCE
GERMANY US and Canada 0%
3
1
SPAIN
1
PORTUGAL
MEXICO 2 ▪ Undisputed market leader in LatAm –
3 leadership position in fastest growing
PHILIPPINES markets
• GUATEMALA INDIA 1 ▪ Benefitting from growing security market
• HONDURAS COLOMBIA 2
• COSTA RICA ▪ Relying on its strong density, reputation,
• NICARAGUA
2
• EL SALVADOR BRAZIL brand and close relationship with clients
PERU 1
1 1
URUGUAY
1 PARAGUAY
CHILE
1 ▪ Solid presence in key European countries
AUSTRALIA
1 ARGENTINA ▪ Expected to be the fastest growing
2
1 economies in the area
▪ Growing footprint in Asia / Africa
▪ Highest Cash market growth regions
# Market positioning
globally
Cash in transit & cash management
Source: Freedonia 2017, DBK, Aproser and internal sources.
COMPANY PRESENTATION FY 2019
18DENSITY & SCALE AND PRODUCTIVITY GAINS: SEARCH FOR CONTINUOUS MARGIN IMPROVEMENT
1. DENSITY & SCALE 2. EBITDA (€m) and EBITDA margin (%)
382 382 428 340
Prosegur Cash EBIT Margin (%)
21,9% 22,2% 22,2% 19,7%
13,3% 14,8% 16,0% 15,1%
2015 2016 2017 2018
EBITDA EBITDA Margin Peers Average
EBIT (€m) and EBIT margin (%)
Prosegur Cash Market Share in
selected markets (%)
282 314 360 268
Positive correlation
between market share 18,0% 18,6% 18,7% 15,5%
and profitability
• Leadership position in focus regions 7,5% 9,1% 10,2% 10,2%
• Footprint optimisation / higher density
• Profitability programs and best
practices
2015 2016 2017 2018
• Shift in revenue mix towards more
value added cash services EBIT EBIT Margin Peers Average
COMPANY PRESENTATION FY 2019
19FOR THE FUTURE: UNPARALLELED POSITIONING TO BENEFIT FROM THREE KEY GROWTH LEVERS
1 EXPECTED GROWTH 2 > 500 CASH COMPANIES 3 OUTSOURCING
IN OUR FOOTPRINT GLOBALLY OPPORTUNITIES
Back office management
CAGR
7.7%
Cash automation in clients
Room for further
consolidation
Branch teller staff
2015 2020 #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11 #12 #13 #14 #15 #16 #17 #18 #19 #20 …
IAD (Independent ATM
Deployer)
Today Traditional market growth Consolidation play Third Wave of Third Wave of
(Organic) (inorganic) Outsourcing Outsourcing
1 2 3
Source: IMF Nominal GDP forecast from 2016 – 2019. Expected growth calculated as a weighted average between our sales and the expected GDP
COMPANY PRESENTATION FY 2019
20OUTSOURCING OPPORTUNITIES
BRANCH TELLER
STAFF
BACK OFFICE
Efficiencies
MANAGEMENT
IAD
CASH AUTOMATION (INDEPENDENT ATM
IN CLIENTS
DEPLOYER)
Third wave of outsourcing
CASH PLANNING & DAILY RECONCILIATION
FORECASTING ▪ Incidence Mgmt.
▪ Branch Network ▪ Branch Network
▪ Displaced ATMs ▪ Central Services
CASH LOGISTICS & ATM MGMT.
PROCESSING ▪ Maintenance
• Bank Branches ▪ Fixing
• ATMs ▪ Replacement
• Retail Clients
▪ Full lifecycle
• Central Bank
Business process outsourcing
COMPANY PRESENTATION FY 2019
21PROSEGUR
SECURITY
Moving from manned guarding
to technological solutions
COMPANY PRESENTATION FY 2019
22LARGE MARKET WITH TECHNOLOGY AS A CATALYST
FOR FUTURE GROWTH
SECURITY GLOBAL MARKET SECURITY GLOBAL MARKET SHARES
EVOLUTION ($BN) (2018)
8%
6%
+6.1%
5%
168 Player 1
4%
2%
Player 2
125
Player 3
Others
Player 4 75%
Prosegur
2015 2020
Source: Freedonia 2017 report and internal
PROSEGUR
company data
KEY MARKET TRENDS
+ Increasing outsourcing from Public Sector and higher development of services to companies in
emerging countries
SECURITY
+ Design of integral offers that combine electronic systems with traditional guarding services improving
revenue mix
+ Intensive use of technology and its combination with human factor
+ Trend towards mobile services (dynamic guarding/patrolling) as an alternative
+
Moving
Growing market,
from manned guarding
with significant potential in emergent countries
- Commoditization, due to its low capital intensity and entry barriers. Competitiveness intensification and
to technological
in staff turnover, scarcity of qualified solutions
considerable price pressure impacting margins, even with Facility Management companies
- Increase personnel. Increasing labor pressure
- Budgeting restrictions in Public Sector
- Double market:
▪ Client sophistication. Every time the client knows more and it gets more difficult to add value
▪ Stagnant sector that keeps the same criteria for some years and is into a mature phase
COMPANY PRESENTATION FY 2019
23PROSEGUR SECURITY HAS GLOBAL PRESENCE ACROSS LATAM, ASIA AND EUROPE
PROSEGUR SECURITY GLOBAL FOOTPRINT
EMPLOYEES * #5 GLOBAL MARKET POSITION
* OPERATIONAL PERSONAL ONLY
Argentina 11,37%
Peru 8,27%
Colombia 7,29%
Portugal 5,93% FRANCE
USA PORTUGAL
USA 5,08%
SPAIN CHINA
France 4,65% MEXICO
COLOMBIA
Chile 4,15%
SINGAPORE
Mexico 2,50%
BRAZIL
PERU
Singapour 1,91% PARAGUAY
Uruguay URUGUAY
1,39%
CHILE
Paraguay 0,82% ARGENTINA
China 0,72%
COMPANY PRESENTATION FY 2019
Source: internal data
24WITH A LEADING POSITION IN SELECTED MARKETS ENABLING A SIGNIFICANT OPPORTUNITY
FOR CONSOLIDATION
GUARDING MARKET SHARES (%)
#2 #2 #2 #4 #1 #2 #4 #1 N.A N.A #4 #7 #2 N.A
42%
49%
56%
67% 66%
Local Players 80% 82% 79% 81%
85%
90% 91%
Largest National Player 99% 100%
Intl´ Players 23%
40%
17%
Prosegur
16%
22%
27% 11% 9% 28%
17% 15%
18% 9%
17% 3% 3%
12% 9% 9% 7% 6% 6% 4% 4% 1% 0% 1%
Spain Uruguay Portugal Argentina Colombia Peru Brazil Paraguay Singapore Chile France Mexico China EEUU
Source: DBK, Investors presentations, internal estimates COMPANY PRESENTATION FY 2019
25PROSEGUR’S GUARDING BUSINESS MODEL
IS BASED ON THREE KEY LEVERS
TECHNOLOGICAL HIGHER MARGIN
TRANSFORMATION PRODUCTS STREAMLINING
▪ Value proposition to client; moving ▪ Moving towards a high margin ▪ Size reduction
towards integrated solutions with product portfolio ▪ Efficiency implementation
technology ▪ Growth recovery
▪ Margin expansion
COMPANY PRESENTATION FY 2019
262. KEY DIFFERENTIATING FACTORS – MOVING TOWARDS A HIGH MARGIN PRODUCT PORTFOLIO
GROSS MARGIN (%) PER PRODUCT TYPE FY15 (ALL COUNTRIES)
Indirect costs
Traditional Guarding
% of total sales
Other Electronic ARC Mobile
ATM Maintenance Fire detection Cyber (Alarms Reception
Services Systems Guarding
Center)
- Increasing focus
% Gross Margin +
on products with
higher margins
COMPANY PRESENTATION FY 2019
27US Market Entry
• Activity initiated in December 2018
• Acquisition of a group of companies
WA with high specialization in their
MT
ND
VT
ME
NH
respective service offerings
OR
V
MN MA
ID
SD
WI NY
• Creation of a “Pure Player” in
WY RI
MI
CT
IA
NV
UT
NE
OH
PA NJ
Enterprise Risk Security
IN DE
CA
CO
IL
WV
C
KS MD
MO KY VA
TN
NC • Focus on Integrated and Advanced
OK
Security Solutions
AZ NM
AR
SC
AL GA
MS
TX
LA
B • Relevant presence in regions with
FL
the highest growth potential
• Strategy based on both organic and
Guarding
inorganic growth
Monitoring / Technology
Systems Integrator
Cybersecurity
28
COMPANY PRESENTATION FY 2019PROSEGUR
ALARMS
Betting on growth
and shaping
the future
COMPANY PRESENTATION FY 2019
29ALARMS MARKET: SIGNIFICANTLY UNDERPENETRATED
ALARMS PENETRATION
RATES BY COUNTRY (%)
% of households with a connected alarm
▪ World market is under-penetrated
▪ US is the most penetrated market globally and has only 20%
penetration
▪ Prosegur core markets are allALARMS MARKET: FROM SINGLE DIGIT TO DOUBLE DIGIT GROWTH IN FOCUS REGIONS
GLOBAL ALARM MONITORING MARKET ($BN) PROSEGUR’S FOCUS REGIONS
EXPECTED TO GROW AT 5.0% P.A. EXPECTED TO LEAD THIS GROWTH
CAGR:
5.0% 75
Alarm monitoring market
58 2015-20 CAGR Revenue expected growth by Region
8,35%
44 Asia Pacific
World
5,03%
2015 2020 2025 4,12% LATAM
Western Europe
KEY DRIVERS
North America
1.93%
• Increasing role of crimes and
burglaries 1.67%
• Rapid implementation of home
automation and security systems
• Integration of biometric technology in 2015 2020
smartphones
Source: Freedonia report 2017
COMPANY PRESENTATION FY 2019
31ALARMS: A DIFFERENT BUSINESS MODEL, SIGNIFICANT VALUE CREATION
VERY ATTRACTIVE RETURNS WITH UPFRONT CAPITAL REQUIREMENTS
CLIENT CONTRACT CASH FLOW
▪ Payback period over
ARPU
4 years
Installation
Revenues
▪ Average subscription
period of 10 years
… ▪ Increasing ARPU on local
Product currency basis
cost
Operating costs (Including monitoring, ▪ Very attractive returns
Installation customer care, maintenance,...) with upfront capital
cost requirements
Sales cost
Marketing
cost
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 … Year N
Average life-cycle
COMPANY PRESENTATION FY 2019
321. KEY DIFFERENTIATING FACTORS – PRODUCT (1/2)
PORTFOLIO OF PRODUCTS OFFERING A FULL RANGE OF SOLUTIONS ADAPTED TO CLIENTS’ NEEDS
HOME
AUTOMATION
HAWK
E-HEALTH EYE
▪ Internet of
LOCATION
VIDEO ▪ Intelligent security Things applied
INCLUSION ▪ Mobile E-Health services to security
▪ Vehicle Security
B2C ▪ Video in the Systems
Solutions ‘Smartlife’
▪ Wireless System
(residential Cloud 2020
(video-verification)
& small ▪ Professional
business) ▪ Professional 2018
CCTV Solutions
Hybrid & Wired
Solutions 2015
2012
2010
B2B
(transferred
to Security) ▪ Complex hybrid ▪ Complex CCTV ▪ Anti-theft systems, ▪ SMART solutions
and wired systems for Technology-
systems ▪ Smoke screen
Security integration
COMPANY PRESENTATION FY 2019
331. KEY DIFFERENTIATING FACTORS – PRODUCT (2/2)
SMART PLATFORM AS THE CORE TOOL TO INTERACT WITH OUR CLIENTS
AND BUILD LOYALTY
SMART PLATFORM RESPONSE
▪ SMART: Platform to interact with our clients which builds loyalty ▪ Protection: In case of need, we send our response teams to
provide protection
▪ Launched in 2016
▪ Police: Critical in those countries where Police does not have
▪ Productivity increase: Lower service costs the resources to provide reliable response
▪ Churn reduction: Connected clients have lower churn rates ▪ Even in countries where Police provides a response we
(empirically proven 2-4% below average) provide value added services
COMPANY PRESENTATION FY 2019
342. KEY DIFFERENTIATING FACTORS – SCALE
UNPARALLELED PLATFORM WITH CRITICAL MASS IN 11 COUNTRIES AND OVER 550,000 CONNECTIONS
Presence in 11 countries with
high potential growth
Close to 7,000 employees SPAIN
2
PORTUGAL TURKEY
11 monitoring centres 2 n/a
duplicated
COLOMBIA INDIA
2 n/a
More than 1,100
response professionals
PERU
1
Base of over 550,000
connections
PARAGUAY
3
More than 20,000 vehicles URUGUAY
tracked 1
SOUTH AFRICA
CHILE n/a
3
ARGENTINA
2
Commercial 45%
Residential 55%
Source: FY 2018 business figures
COMPANY PRESENTATION FY 2019
35SOLID FINANCIAL PERFORMANCE BEING THE FASTEST GROWING
BUSINESS LINE WITHIN THE GROUP DRIVEN BY OUR FOCUS TO
INCREASE OUR CUSTOMER BASE
CUSTOMER BASE EVOLUTION AVERAGE REVENUE
(# CONNECTIONS) PER UNIT (ARPU)
38 38
36.8 35
+11,4% 547 36 36
499 Ø 36.5
424
389
355
2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
▪ Net additions Increment of 10% ▪ Recurrent quota remains in line in the
over same period in 2017 long term despite the adverse macro
economic environment in Ibero-America
▪ Growth still over industry
average despite Argentina ▪ Positive evolution in local currency
slowdown terms
COMPANY PRESENTATION 2019
36Strategic Measures in the Alarm Business
Bancarisation of client portfolio
• Bancarisation level of total BTC (as of Dec-18): 74%
• Bancarisation level of 4Q18 new additions: 83%
Consumer financing of the up-front payment to be
offered to potential clients
• Initiative already being rolled-out with leading
financial institutions in Spain
• Customer solvency screening
Back-office automation through Smart platform
• Smart penetration level of total BTC (as of Dec-18): 15%
• Smart penetration level of 4Q18 new additions: 58%
37 COMPANY PRESENTATION 2019Environmental
Social
Governance
COMPANY PRESENTATION FY 2019
38THE BEST HUMAN TEAM
We ensure the utmost respect for
the principle of equal treatment. +2 MILLION +€12.MM
HOURS INVESTED IN
OF TRAINING TRAINING
We take no risks when it comes to
DELIVERED
safeguarding the physical safety
and integrity of our
professionals, raising their image
and profiles. +1,000 +170,000
PROFESSIONALS WITH
DISABILITIES PROFESSIONALS
39 COMPANY PRESENTATION FY 2019PROSEGUR IS A GLOBAL BENCHMARK IN THE PRIVATE SECURITY INDUSTRY
TRADE-UNION FREEDOM AND FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
SOCIAL CASH FLOW
+200 UNIONS
69% OF ANNUAL
+2,000 REVENUES DISTRIBUTED
UNION DELEGATES TO EMPLOYEES
+200 COLLECTIVE 2 million HOURS OF
BARGAING AGREEMENTS TRAINING
16%
OF EMPLOYEES ARE MEMBERS 1.6 million hours
OF A TRADE UNION OF ONLINE TRAINING
THROUGH THE
* OECD average rate (2016): 12% PROSEGUR UNIVERSITY
27% OF ANNUAL
EUROPEAN REVENUES DISTRIBUTED
WORKS COUNCIL TO SUPPLIERS
UGT, CC.OO y USO (ESP)
VERDI (GER) EFFECTIVE TAX RATE IN
CGT (FRA) 2017 FOR PROSEGUR
STAD y SITESE (POR) WAS 36,6%
*Advisor: UNI GLOBAL UNION
COMPANY PRESENTATION FY 2019
40PROSEGUR, A RESPONSIBLE COMPANY
COMMITMENT WITH OUR EMPLOYEES AND HSE ADHERENCE TO STANDARDS AND REGULATIONS
Priority IN ALL OF “PROSEGUR CODE OF WHISTLEBLOWER
ETHICS AND CONDUCT” CHANNEL
OUR BUSINESSES
CORPORATE
COMPLIANCE PROGRAM
PREVENTIVE APPROACH WITH CODE FROM THE LIGUE
THREE ACTION LEVELS: INTERNATIONALE DES
APPLICATION OF THE
SOCIÉTÉS DE
▪ Training SURVEILLANCE
RIGHTS LISTED IN THE
▪ Monitoring and follow up UNIVERSAL DECLARATION
▪ Technological innovation Code from the Confederation OF HUMAN RIGHTS (UDHR)
of European Security
Services (CoESS)
TRANSPARENCY
We draw up our Annual
“ZERO INJURIES” GOAL, Reports using the Global
REGARDLESS OF OUR UN GLOBAL COMPACT Reporting Initiative (GRI)
BUSINESS DIFFICULTIES standards
FATALITIES IN 2017 RISK MANAGEMENT CYCLE
Attacks MONITOR 4 1 IDENTIFY
Traffic
Others
PROSEGUR COMPETITOR 1 COMPETITOR 2 MANAGE 3 2 ANALYZE
Fatality rate per
10.000 employees
0.41 0,43 0.20
COMPANY PRESENTATION FY 2019
41PROSEGUR, A RESPONSIBLE COMPANY
COMMITMENT WITH OUR EMPLOYEES AND HSE ADHERENCE TO STANDARDS AND REGULATIONS
Priority IN ALL OF
“PROSEGUR CODE OF WHISTLEBLOWER
OUR BUSINESSES ETHICS AND CONDUCT” CHANNEL
CORPORATE
PREVENTIVE APPROACH WITH COMPLIANCE PROGRAM
CODE FROM THE LIGUE
THREE ACTION LEVELS: INTERNATIONALE DES
APPLICATION OF THE
▪ Training SOCIÉTÉS DE
RIGHTS LISTED IN THE
▪ Monitoring and follow up SURVEILLANCE
UNIVERSAL DECLARATION
▪ Technological innovation Code from the Confederation OF HUMAN RIGHTS (UDHR)
of European Security
Services (CoESS)
TRANSPARENCY
“ZERO INJURIES” GOAL, We draw up our Annual
REGARDLESS OF OUR Reports using the Global
UN GLOBAL COMPACT Reporting Initiative (GRI)
BUSINESS DIFFICULTIES
standards
COMPANY PRESENTATION FY 2019
42WE ARE COMMITTED TO PEOPLE
46
PIECITOS
COLORADOS
SCHOOLS
PROSEGUR +43,000
BENEFICIARIES
F O U N D AT I O N IN 2018
Prosegur Foundation channels the company’s
social and cultural activities to help build a 10
more giving society while generating COUNTRIES
opportunities for personal development, thus
making tangible our commitment to contribute
to the development of the regions the Group 4
operates in. FIELDS
OF ACTION
Our institution works to educate and improve
the job prospects of people with intellectual
disabilities and is also involved in corporate €3MM INVESTED
volunteering and cultural outreach IN 2018
We develop our own projects that are
sustainable, transparent and replicate best
practices
34
PROJECTS
COMPLETED IN
2018
COMPANY PRESENTATION FY 2019
43FY 2018 FINANCIAL INFORMATION 44 COMPANY PRESENTATION FY 2019
P&L %
%
Growth in Local Currency(1)
Growth in Euros
FY 2017
FY 2018
Consolidated Results FY 2017(1) FY 2018(2) Revenues by Region
% Variation
In millions of Euros +4.5% +10.7% +2.6%
-17.2%
Sales 4,291 3,939 (8.2)%
EBITDA 522 456 (12.6)% +4.5%
Margin 12.2% 11.6% 2,467 -0.6%
2,042
1,665
Depreciation (104) (129) 1,740 159 158
EBITA 417 327 (21.7)% Europe IberoAmerica AOA
Margin 9.7% 8.3%
Amortisation of intangibles and others (25) (26)
EBIT 392 301 (23.2)%
Margin 9.1% 7.7% Revenues by Business
Financial Result (45) (21) +12.0% +3.2% +20.6%
Profit before Taxes 347 280 (19.4)%
-8.0%
Margin 8.1% 7.1% -10.0%
Taxes (127) (100)
2,116
Tax rate 36.6% 35.7% +4.4%
1,924
1,732 1,946
Net profit 220 180 (18.3)% 251 262
Minority Interests 48 48 Cash Security Alarms
Net Consolidated Profit 172 132 (23.2)%
Earnings per share
(Euros per share)
0.3 0.2
COMPANY PRESENTATION FY 2019
(1) 2017 figures exclude extraordinary non-recurring effects of Prosegur CASH IPO. (2) 2018 figures have been elaborated applying IAS 21 and 29.PROSEGUR Cash
-10.0%
+3.4% -22.0%
+8.5%
1,924 Acceleration of growth in local currency to 12%,
Sales 1,732 including the adverse effect of France and
Australia
FY 2017 Org Inorg FX(1) FY 2018
-25.6%
360
EBIT & 268 Margin contraction in Euro-terms deriving mainly
Margin from FX, IAS 21&29 and integration costs
18.7%
15.5%
FY 2017 FY 2018
50 EBIT Margin EBIT COMPANY PRESENTATION FY 2019
In millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29.PROSEGUR Security
-8.0%
+3.5% -0.3% -11.3%
2,116
1,946 Client portfolio optimization leads to a temporary
Sales deterioration of organic growth
FY 2017 Org Inorg FX(1) FY 2018
-18.1%
66
54
EBIT(2) & Profitability affected by the slowdown of the
3.1%
Margin 2.8% Brazilian economy and LatAm FX
FY 2017 FY 2018
EBIT Margin EBIT
51 COMPANY PRESENTATION FY 2019
In millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29. (2) Security profitability excluding Overhead Costs.PROSEGUR Alarms
547
+11.4% 499
424
389 Net additions increase of 10% vs. same period in 2017
BTC 355
Growth still above industry average, despite Argentina
slowdown
2014 2015 2016 2017 2018
+4.4%
+18.9% +1.7% -16.3%
Sustained organic growth in revenues
Sales close to 20%
262 Strong currency impact
251
FY 2017 Org Inorg FX(1) FY 2018
38 36 38 Recurring monthly fee remains in line with historic
35 36
Ø 36.5 trend, in spite of the adverse macro environment in
ARPU Ibero-America
Positive evolution in local currency terms
2014 2015 2016 2017 2018
52 COMPANY PRESENTATION FY 2019
BTC in thousands of connections - Sales in millions of Euros - ARPU in Euros. (1) Includes exchange rate effect and IAS 21 & 29.Consolidated Cash Flow
In millions of Euros FY 2017(1) FY 2018(2)
EBITDA 522 456
Provisions and other non-cash
items
33 14 Operating Cash Flow Generation
Tax on profit (ordinary) (124) (102)
+3.9%
Changes in working capital (67) (5)
Interests payments (34) (20) 343
330
Operating cash flow 330 343
Acquisition of property, plant &
(208) (214) 75.2%
equipment
Payments for acquisitions of
(59) (83) 63.2%
subsidiaries
Dividend payments (330) (118)
Other flows 757 (35)
Cash flow from investing / financing 160 (450)
Total net cash flow 490 (107) FY 2017 FY 2018
Initial net financial position (712) (252)
% Cash/EBITDA
Net increase / (decrease) in cash 490 (107)
Exchange rate (30) (66) Operating Cash Flow
Final net financial position (252) (425)
COMPANY PRESENTATION FY 2019
(1) 2017 figures exclude extraordinary non-recurring effects of Prosegur CASH IPO. (2) 2018 figures have been elaborated applying IAS 21 and 29.Financial Result Breakdown
In millions of Euros FY 2017 FY 2018
• The Group’s debt optimization process has lead to a
reduction of financial expense of more than 50%
Financial Expenses (57) (28) • Average cost of debt decreases close to 60 bps vs. the
same period in 2017 (1.65% vs. 2.23%)
FX(1) 12 7
• Successful amend and extend exercise of RCFs (February
2019), improving margin and
Financial Result (45) (21) extending tenor
Net Financial Debt / EBITDA 0.9x
Net Financial Debt / Equity 0.4x
2.23%
2.02%
1.80%
1.71% 1.65%
Average Cost of Debt
Net Financial Debt
391 458 425
350
252
Dec. 2017 Mar. 2018 Jun. 2018 Sep. 2018 Dec. 2018
COMPANY PRESENTATION FY 2019
Amounts in millions of Euros. (1) Includes exchange rate effect and IAS 21 & 29.Balance Sheet
In millions of Euros FY 2017 FY 2018(1)
Non-current Assets 1,481 1,721
Tangible fixed assets and real estate investments 587 745
Intangible assets 765 842
Others 128 133
Current Assets 2,343 2,099
Inventory 71 76
Customer and other receivables 1,151 975
Cash and equivalents and other financial assets 1,121 1,048
TOTAL ASSETS 3,824 3,820
Net Equity 1,143 1,066
Share capital 37 37
Treasury shares (53) (53)
Retained earnings and other reserves 1,085 1,013
Minority interests 74 69
Non-current Liabilities 948 1,676
Bank borrowings and other financial liabilities 717 1,392
Other non-current liabilities 230 285
Current Liabilities 1,733 1,077
Bank borrowings and other financial liabilities 701 151
Trade payables and other current liabilities 1,031 926
TOTAL NET EQUITY AND LIABILITIES 3,824 3,820
(1) 2018 figures have been elaborated applying IAS 21 and 29.
47 COMPANY PRESENTATION FY 2019Recent M&A
• 18 Operations completed (10 in 2018)
• Across all business lines
• Cash (CIT, AVOS, ATM)
• Security (Guarding, Monitoring, Cybersecurity)
• Alarms
Germany
• Close to €150 million in revenues (± 100 in 2018)
Spain
USA
Colombia
Philippines
Central America
Singapore
Brazil
Peru
Paraguay
Australia
Uruguay South Africa
53
COMPANY PRESENTATION FY 2019Digital Transformation – an ongoing transformational project to reshape the group
50%
Reduced cost in the monitoring of 2,600
armoured vehicles using IOT
Scalable
Growth
Car Sharing
Use of electric and low consumption vehicles
in "car sharing" model for Alarms and Security
operational fleetTHANK
YOU
www.prosegur.com
CONTACT INFORMATION:
Antonio de Cárcer
Investor Relations Director
Tel: +34 91 589 83 29
antonio.decarcer@prosegur.com
Cristina Casado
Investor Relations Officer
Tel: +34 91 589 83 29
Cristina.casado@prosegur.comYou can also read
