Prosegur Cash SA
MAD:CASH
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Prosegur Cash SA
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Ladies and gentlemen, thank you for standing by, and welcome to the Prosegur Cash Q1 2022 Results Presentation Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today.
I would now like to hand the conference over to your speaker today, Miguel Bandres, Head of IR. Please go ahead, Miguel.
Thank you, all. On behalf of the Prosegur team, I would like to welcome you all to our 2022 Q1 results review that will be led by our CFO, Javier Hergueta and myself. The session should last around 25 minutes. Underneath, we'll review the key events that's taken place in the period, underline behind our performance to-date. The last part of the call, we'll hold an open Q&A session, in which we'll try to address all the queries you might have. If we can't get to respond all points today, we'll answer those remaining on an individual basis. I would like to thank you all for your attendance and remind you that this presentation has been pre-recorded, and you can find it via webcast on our corporate web page at www.prosegurcash.com.
Now before handing over to Javier, I would like to share some relevant news regarding the world of cash during the quarter. These news cover different aspects, ranging from the importance of cash for household economies to the cost of cards for e-commerce, the growing dangers and losses caused by crypto scamming or the ECB's stance on Spain's decision to limit cash payments to EUR 1,000 in certain cases.
First, I'd like to share some news published in Europa Press. This news highlights and portrays Ukraine as an example for the fact that cash just cannot disappear. The reason for this being that cash is extremely important for safeguarding household economies and trust in the system. Recent events have shown how relevant this is for society, especially in uncertain circumstances or fatalities as we have observed long queues of people waiting to withdraw cash in ATMs in the region. In the second piece of news published in Cinco Dias El Pais, a main Spanish newspaper, we can read Amazon's statement, where it takes a clear stance against the cost of cards to offer the best prices to consumers.
The company states that card payments are an obstacle to offering the best value to their customers. This points out the cost of cards to the system as well as hints the importance of having an alternative to that mean of payment to secure an efficient economy. The third news, we can read in the bottom left-hand side of the page refers to crypto scams. It notes that more and more scams take place each day for very significant amounts of money. The estimate losses have reached close to EUR 7 billion in 2021. This fact should raise an eyebrow towards a danger of over-relying in these type of assets, both as value holders or as transaction currencies.
These frauds have risen an estimate of over 80% over the previous year. And in the fourth and last piece of news, we can read about the opinion of the European Central Bank towards the Spanish Law that limits to EUR 1,000 the amount of cash payments that can be made when one of the parties involved acts in the capacity of a business or a professional. The European Central Bank clearly states that this limitation is disproportionate and unproductive for the economy. This should make regulators reflect on the limits being imposed to cash payments in certain jurisdictions without any proof of direct benefit being associated.
Now I'll share today's agenda. First, Javier will review the key events that's taken place in the quarter. Following, I'll analyze our sales and transformation performance by region, then Javier will proceed to share our key figures for the quarter. And last to conclude, he will underline key messages of the quarter, and we'll open the floor to any Q&A. That being said, I'll hand over to Javier, so he can share his view on these last 3 months' key highlights.
Thank you. As Miguel just said, I will now review for you the key highlights for the period. First, I would like to say that the year has started on a good foot, and in line with the recovery we have shared in the last quarters, we are seeing strong growth in Euro terms, supported by good volume expansions. We see sales growing by 18.8% with organic growth of 18.3%, which I would like to stress as very remarkable. It's not only a strong growth as compared to 1 year ago, but the absolute figure for turnover is as well above last year's Q2 and Q3, which is very significant taking into account the seasonal nature of our business.
On the same tone, we continue to see a strong transformation of our sales figure. If we look at sales of new products, they have improved over last year's first quarter by 24.3%. If we net off the effect of divestments, that growth amounts to 57.1%, which speaks of itself for its strong performance. The increase in new products brings their overall penetration to 23.1% of sales, that is an increase of 100 basis points versus the previous quarter and over 480 basis points if we exclude divestments. This growth in penetration is noteworthy to have taken place when the overall sales pie grew by the mentioned 18.8% in the context of strong volume recovery in the traditional activity.
Sales growth driven by volume is allowing us to substantially improve our margin levels. The absorption of these volumes reflects in our P&L, our operating leverage, driven by all the cost and efficiency measures we've put in place these last 2 years. Margins have improved 0.5% versus last year's first quarter. And again, if we exclude the impact of capital gains from divestments last year, the underlying EBITA has grown by 60.2%, and the EBITA margin is up to 13.3%, a very robust margin improvement of 340 basis points from 9.1% a year ago.
Now turning to cash conversion. We continue to generate a strong cash flow of EUR 17 million despite the fact of having invested in the company's growth. Regarding leverage levels at the end of this quarter, our leverage ratio reached 2.4x, which is within our internal comfort long-term threshold of 2.5x. And lastly, I would like to underline our consistent commitment to sustainability by sharing with you that in 2022, we agreed to an emissions compensation plan on which we will share more details later.
Now before going on to analyze our performance, I would like to share with you some important developments regarding the macroeconomic environment in which we are conducting business. On the one side, I would like to highlight the rising inflation the world is going through. As you can see in the lower left-hand chart, inflation has been rising in all regions since 2020. In particular, if we look at how inflation has performed in the first 3 months of this year, we can see it has been gradually picking up as a result amongst others of the effects of the Russian invasion on Ukraine, which is putting strong price pressure in many goods such as commodities and energy.
The last projections give us an inflation rate north of 7.4% and will probably reach 10% for 2022. We do not know when this trend will reverse, but certainly, it's an environment which is very positive for our business since cash is getting to move faster. As well, it is very important to note that commodities are becoming more and more relevant in the current environment. This will be very positive for our LatAm region, an area that is strong in commodities and which we believe will free it in the next years to come.
On the right-hand side charts, we can see the evolution of the main currencies in our portfolio. On the top chart, we see the evolution of the Brazilian real for the last 2 plus years where we can observe how the real has been appreciating versus the Euro, particularly in the last months. While in the lower chart, we can track the evolution of the Argentinian peso and observe that its depreciation has been slowing down over time. These 2 trends are important to highlight since for the last years we have had heavy devaluation headwinds, which have been turning to neutral, if not positive these last months. Regarding Argentina, we also believe that the agreement signed between the IMF and the Argentinian government will bring further stability to the country.
In this next slide, we can see how both our sales and our margins have evolved in the first quarter of 2022. While having lost 0.8% of sales in local currency in the first quarter of 2021, in 2022, we have experienced a phenomenal increase of local revenue of 19.1%. It is important to underline that this local sales growth is fundamentally driven by a strong 18.3% organic growth, whilst M&A has contributed by an additional 0.9%. This is a consequence of how healthily our volumes are coming back. We have been experiencing these volume returns for the last 3 quarters as confidence in the economy and in cash has been restoring.
The sales figure for the quarter is above 2021's Q1, Q2 and Q3 despite the seasonality in our business, and the third best in the last 9 quarters, taking into account that Q1 is normally a slow sales quarter. Important as well to underline that volume recovery has shown consistent in all regions, Latin America, Europe and Asia Pacific. The first one, Latin America has grown in local sales by 27% this first quarter of 2022 as compared to 2021 when it grew by 5.7%. Later, we will dive deep into our understanding of such growth.
Europe has as well grown overall by 3.9%, more than offsetting the negative impact in sales that the divestment executed 1 year ago coast. And lastly, Asia Pacific shows as well a healthy growth of 11.2%, which clearly represents a strong recovery of the COVID situation as the region returns to normal and borders open up. If we look at the graph on the bottom left-hand side of the page, we can see how EBITA margins have evolved. On a reporting basis and in absolute terms, margins have increased versus those we reported 1 year ago, reaching EUR 55 million, up from EUR 54 million in 2021. But more than that, I would like to underline the strength of the recovery of our underlying margins once we exclude the effect of last year's divestments.
If we look at the improvement of EBITA on an underlying basis, we can see a growth of 60.2%, which is very noteworthy. In terms of percent to our margins, 9.9% of sales in 2021's first quarter has climbed by 340 basis points to 13.3% in this first quarter of 2022. This clearly shows the impact of all the cost reductions and efficiency measures taken in these last 2 years that have generated a strong operating leverage.
Turning to the next page, I would like to share the current status of our transformation efforts. This is, as you know, a top priority for our company, and we can be very proud of the results this strategy is bearing. If we compare 2021 -- to 2021, you will see that our new products sales have grown by 24.3% and by almost EUR 20 million in absolute terms. This 24.3% jump is a strong growth, while overall sales have grown by 18.8% on a reporting basis. But if we account for that first quarter 2021 was still included in our divested business, then the implicit new products growth has been up 57.1%, adding a total of EUR 35 million new sales to the company.
If we look at it on a relative basis versus sales, the increase is very relevant. On a reported basis, our new products penetration has improved by 100 basis points, reaching 23.1% of sales. This is most remarkable if we take into account the total sales have grown by, as I said before, 18.8% versus 2021, meaning a solid performance as well of the traditional business. And excluding the effect of divestments, the penetration of new products over total sales has grown by 480 basis points from 18.2% to 23.1%. This, I believe, is the main indicator of our commitment to transformation that is positioning our company in the best setting for the future. It is as well very important to note that all geographies as we will later see and key new products business lines have actively contributed to this growth.
Next, I would like to point out the inorganic activity that we have conducted in this first quarter. First, if we look at Europe, in Germany, one of our key markets, we have acquired 2 companies, GSB and ITT, which are very important for our strategy in the country. With them, we will be able to consolidate our leadership position and strengthen the geographical coverage with which best serve our customers. As well, we believe they will bring significant synergies to our German operations. And secondly, in Ecuador, we have closed the Facilito purchase with which we are confident we will improve our Corevan platform in the region. This will be an important milestone for the resilient advancement of our transformation growth strategy.
With this, I ask Miguel to please highlight the main events by region.
Thank you, Javier. First, we'll review Latin America, our key region accounting for 68% of our total sales. When we compare this first quarter in 2022 to that 1 year ago, we see that our company has experienced phenomenal growth. Overall sales increase totals 26.4%, reaching EUR 277 million, a growth of EUR 58 million in this quarter. That increase is mainly made of an 18.9% organic growth that shows the consistent volume recovery we've seen in the last 3 quarters. As well, M&A activity has added 8.1% of further growth, and foreign exchange has had an almost neutral impact of minus 0.5%.
Now looking at how we are transforming in the region, LatAm has been particularly remarkable. New products have grown by EUR 30 million from EUR 45 million to EUR 75 million, an increase of almost 69% versus last year's first quarter. This strong growth has allowed us to increase our new products sales over total revenue by 680 basis points from 20.3% to 27.1%, despite the mentioned 26% growth in overall sales. Redpagos, which we acquired 1 year ago in Uruguay has helped us keep on transforming our new products profile for the region, and we are very proud of its performance to-date. Still, we assure the best is still ahead as we keep on strengthening our portfolio with aforementioned purchase of Facilito in Ecuador.
Now we'll turn to Europe, a region that accounts for 25% of our sales. Here, organic growth as has well been very strong, adding 18.6% to sales. It's important to note the trend of consistent volume recovery in the last quarters in the region. Omicron which hit Europe at the end of November 2021, had a negative effect on both December 2021 and January 2022. However, from the end of January this year, we've seen a consistent recovery of volumes with each month stronger than the preceding one. In Europe, inorganic had a negative impact of 14.8% due to the divestment we made 1 year ago in the region. Overall, our total sales have managed to grow by 4%, with organic growth offsetting divestments and reaching EUR 103 million in the first quarter of 2022.
New product sales have decreased by 47% from EUR 27 million to EUR 14 million due to the mentioned divestment. However, if we isolate the divestment effect on a comparable basis, new products have grown by 28.5%, with a particularly strong performance of cash today that has increased by 37.2% over last year. This growth takes new product penetration to 13.8% of total sales, which implies a 50 basis points improvement over last year, excluding divestments, especially positive considering the strong organic growth that fueled overall sales growth.
Lastly, we will analyze the performance of our Asia Pacific region that represents 7% of total sales. This area has been the last one to reopen Willy. We are happy to report that the region has posted overall growth of 12.2%, driving sales to EUR 30 million in the first quarter of 2022. These sales equaled those of the last quarter in 2021, despite the seasonal nature of our business and are as well historic records for Q1s, reckoning the commercial efforts we've made in the last 2 years.
Organic growth year-on-year of 11.2% accounted for almost all growth in the region, and foreign exchange has contributed with a positive 1% to the overall figure. New products have improved the performance by 14.3% backed by the good behavior of our ATM networks. These new products increased faster than that of overall sales brings the transformation penetration to 17.6% of sales, a positive 30 basis points improvement over last year.
With this, I finalize the review of our geographic performance, and will ask Javier to please continue with the financials.
Thank you, Miguel. Now I'm going to share with you the evolution of the key lines in our profit and loss account. First of all, I would like to note, as we have already seen, the strong improvement in sales that have grown from EUR 345 million by 18.8% to EUR 411 million. It is important to note that, that growth has fundamentally been organic, 18.3%, inorganic accounted for a positive 0.9%, while foreign exchange accounted for a mere negative 0.3%.
I would like to drive attention to the chart on the top right-hand side of the page, where we see that our Q1 2022 sales of EUR 411 million is almost at the level we reached in Q1 2020 just before COVID hit us. We can see a clear V-shape recovery, which confirms the positive trend we had announced for the last quarters. If we look down at the EBITA margin, reported figure totals EUR 55 million in Q1 2022, up from EUR 54 million 1 year ago. As we have stated earlier, it is important to note that those EUR 54 million from a year ago included a EUR 20 million capital gain from divestments.
Without those and on an underlying basis, EBITA has climbed from EUR 34 million to EUR 55 million, which is a 60.2% increase. As we can see on the chart on the bottom right-hand side of the page, we observed a robust margin recovery in this last quarter. Margins have gone up from 9.1%, 1 year ago to 13.3% this quarter, which in relative terms is above our Q1 2020 12.7% pre-COVID levels. This shows 2 very important facts. On one side, the healthy recovery of volumes and on the other side, the result of all the initiatives that have taken place in terms of efficiencies and restructuring as they perform portion of our perform and transform strategy underlines.
If we go below EBITA, amortizations for the period reached EUR 5 million, in line with those 1 year ago, which brings our EBIT level to EUR 49 million, equaling 2021's first quarter EBIT level even with capital gains included. Financial cost for the period reached EUR 16 million, mainly because of foreign exchange-related accounting impacts, which have a non-cash effect and are neutral on shareholders' equity. And lastly, we can see a tax impact of EUR 16 million, in line with that of 1 year ago.
The percentage rate is affected by the above-mentioned higher financial costs than last year's, but that still results in a tax rate of 47.4%, showing a trend towards more normalized tax rate versus the full year 2021. This all results in a net profit of EUR 18 million, a substantial underlying improvement versus last year if we consider the absence of capital gains and the non-cash extra financial costs.
If we now look at our cash flow statement and departing from a EUR 79 million EBITDA, we reached a free cash flow of EUR 17 million. This results after the absence of payment delays to support business through the COVID crisis that were still present 1 year ago with a slightly higher income tax outflows than last year when some countries recovered amounts paid in advance to tax authorities having a tight control of our capital expenditure and having invested in the growth of the business via working capital, which optimization remains a clear focus for us.
Below free cash flow, we can note that interest payments of EUR 9 million is in line with the EUR 10 million we paid 1 year ago. If we look at M&A payments, we have a cash outflow of EUR 6 million in 2022, corresponding to payments made in the period, while in the dividend and treasury stock line, we can see the impact of both our dividend payment of EUR 7 million in the period, as well as that of our treasury stock program approved in December 2021.
Lastly, in others, we can see mainly the cutoff date impact of cash certification to customers in some countries. It's important to reckon that this impact nets off over the quarters and has a total year broadly neutral impact. In relative terms, the EUR 17 million free cash flow generation in Q1 2022 implies a conversion of 86% of EBITDA, up from 80% 1 year ago. If we look at cash flow in terms of yield, this reaches 9% for the last 12 months, which continues to reflect the underpricing in our stock price making it very attractive. It is, therefore, only fair to underline how carefully we are managing cash flow to protect our company best into the future.
In the following page, we can see the evolution of our total net debt, which includes deferred payments, IFRS 16 debt, treasury stock and net financial position. The total net financial position has increased from EUR 521 million 1 year ago to EUR 569 million this year, bringing up the overall total net debt to EUR 724 million. This increase in net debt, which is in line with its historical seasonal behavior is influenced by the financing of our growth. With this total net debt and the EBITDA level, our leverage ratio reaches 2.4x, which is within our internally set comfort level of 2.5x and well below covenants limits. As well, I would like to underline that there are no material changes in our debt profile since we will be seeing no significant maturities before 2026.
Overall, we can conclude that we have a strong balance sheet to best prepare us for the times to come.
With this, I conclude the financial review and would like to pass to our final remarks. To finalize, I would like to stress that this first quarter, we believe, is a very important and positive step into what we think will be a good 2022 year, after having managed through some troubled times over which we have made a more resilient and transformed company.
The key highlights I would underline are the following: First, the strong evolution of our business, fueled by the positive comeback of volumes that have driven sales up by 18.8% to EUR 411 million in what is for the business a favorable inflationary environment. Foreign exchange impact has been broadly neutral in the period and should these macro trends remain, that should stay the same or positive in the coming quarters.
Second, our company is better prepared for the future. Our transformation strategy is accelerating and crystallizing. New product sales now represent 23.1% of total sales, having grown by 57.1% ex divestments and adding EUR 35 million to our P&L. This top line growth combined with the consistent restructuring efforts we have undertaken in these last 2 years have propelled our underlying EBITDA margin by 340 basis points versus one year ago to 13.3%, which is above our Q1 2020 pre-COVID EBITA margin.
On the cash flow line, we can see that we have generated EUR 17 million free cash flow after having invested in growing our business. This has allowed us to contain our leverage at 2.4x, within our comfort range. And lastly, I would like to underline our continuous commitment to the environment, having acquired this quarter credits to offset our CO2 emissions, being a responsible company and loyal to our ESG strategy.
Thank you all for your attention and we will now be pleased to begin with the Q&A session.
[Operator Instructions] Your first question today comes from the line of Miguel Gonzalez from JB Capital.
Yes. 3 questions on my side. And I'm sorry if I missed something during the presentation, but I had some issues with the headphones.
My first question is on the organic growth of 18% that you got this quarter. I don't know if you could give us the split between volumes and prices. And also related to this, I would appreciate if you could maybe comment on the potential salary increase you might face, and also fuel price increases, and how this could affect margins in the coming quarter?
Secondly, on the cash flow front, you registered a non-operating cash of EUR 42 million, I believe you said this is related to cash certification to customers and that this will become neutral at the year-end. Could you please elaborate a little bit on this? And I don't know if this is starting only from this year, or this is something that usually happens in the industry. And my last question is on the M&A carried out this quarter, the 2 companies in Germany and one in Ecuador. Could you maybe introduce these companies? You only mentioned that we'll need to -- will increase carbon activity and adding like 8% in organic growth. But any, I don't know, additional information it will be useful, maybe annual sales, I don't know, to see the inorganic impact mainly in the coming quarters. And related to the M&A payments of EUR 6 million in the quarter, so I wonder if this relates to these acquisitions, or it also relates to announced -- from past acquisitions?
Miguel, thank you for the questions. Going one by one, on the first one on organic growth, the 18.3% posted in the quarter is made of -- volume recovery has been very solid as we have stated out in the presentation and also strong pricing discipline. So it's a combination of the 2. And that is the case across all regions -- in all 3.
Regarding the inflationary impact and so increases, I mean, we have not really seen any impacts other than just business as usual. So typically, as you know, we try to pass through the salary increases to our tariffs with clients, and that's what we are doing as we typically do by this time of the year. In terms of other costs, labor is really the main cost component affected by inflation for us, but some of those are less relevant and are also included within that pass-through policy on our side. And we have not seen any relevant side effects like shortages or anything like that, so labor is very stable. And on the other hand, in terms of further operating materials, we have not seen any impact so far in terms of potential shortages. Nevertheless, we have increased our stocks, just for prudent management purposes just in case, but noting abnormal on that front.
Second question on the other slide in the cash flow. I think we've mentioned that in the past, some of the quarters, so mainly -- it's due to the temporary cutoff effect that we see on the cash balance certifications to our clients. So that is business as usual and that varies on a daily basis. It's seasonal in nature. I mean so every quarter in the ride also depends on some calendar effects like when this to takes place or not. But it's broadly neutral on a full year basis, and that's what we will be expecting for the full year as it has happened in the last years. So nothing new on that front.
Then I think your third question was related to M&A. There, just to give you a heads up on the acquisitions we accomplished during the first quarter. Overall, they account for around EUR 30 million in sales contribution and roughly about EUR 20 million -- I think I have given the gross value. So part of the EUR 6 million outflows you see there is related to these acquisitions, part is coming from former acquisitions earnouts and a significant portion of the investment in these 3 deals is also included as deferred payments in our net debt.
The next question comes from the line of Francisco Ruiz from BNP Paribas Exane.
I have 3 questions, 2 are quite straightforward. So the first one is on the taxes that you have factored in the cash flow statement, which are significantly higher than the one in the P&L. I would like to know if there is some payment in taxes in advance, and this should be normalized in the future, taking into account also that the tax rate in the P&L continues to be very high? The second one is you could give us the breakdown on FX on financials and what's the level excluding FX that you expect for financial for the full year?
And the third one is mainly a reflection, taking into account the good performance that we have seen in the European division, but assuming that even in January and probably in February as well, Omicron has had a negative impact on that businesses. So could we understand that for the future, taking into account the repricing of the current labor cost plus probably a better environment in terms of lockdowns or for the situation, the growth could be higher than these levels that you have saw in Q1?
Paco, thank you for taking the time and for your questions. On the first one, on the taxes, you see a difference between P&L and cash flow, which amounts to around EUR 4 million. So we have like EUR 16 million in the P&L, EUR 20 million in the cash flow. There is always a time gap between the accrual in the P&L and the cash outflow. So that's business as usual. So nothing really distorting in that front.
In terms of the tax rate, if you compare that with the tax rate in the first quarter 2021, you should take into consideration that last year we had the divestments impact, which was quite efficient from a tax perspective. But if you exclude that from the comparison base, we are better than we were last year. So for the year as a whole, I would say that you should see a difference between the P&L and the cash flow, which should be in line with historical average behaviors. So that's what we expect for the year as a whole.
In terms of the FX, on our financial expenses, if we exclude DFX, we are seeing a reduction in the pure financial cost. So that is right now in the region of EUR 5 million in the first quarter, so all the rest is coming from the FX. And on the FX side, what we have is a pure accounting impact coming from the cash repatriation from the affiliates, basically because although attrition is made in the form of intercompany positions which are reflecting the FX evolution, but that has a non-cash effect and in any case, in the consolidation exercise this neutralizes our shareholders' equity. So it's non-cash, non-equity impact.
And thirdly, on the performance of Europe, I think we are seeing our first quarter in Europe which is the best first quarter organic growth we've seen ever. That also -- part of it has to do with the comparison base, but also there we have a very strong evolution of the business and that's accelerating on a monthly basis as you were pointing out. So after the Omicron, we are seeing each month better than the previous one. So we would be expecting that trend to continue going forward and to consolidate the recovery throughout the year. So we are definitely in a much better situation now than we were one year ago and we expect that to continue for the coming quarters.
The next question is from the line of Enrique Yaguez from Bestinver Securities. Please go ahead.
I have 3 questions. The first one is regarding the ATM strategy. It's been a while since you signed the joint venture with Euronet. I don't know if -- how comfortable do you think about closing any deals anytime soon with Euronet? Secondly, in terms of CapEx, it's been a sound reduction despite the recovery expected this year, and the recovery shown by this quarter results. It's just a temporary impact, what are your expectations in terms of CapEx? And finally, I know that you've been asked about the acquisition in many quarters especially in Germany, but couldn't through this floor with the kind of annual revenues do you expect for this acquisition, a few remarks.
Enrique, on the first question around the ATMs, we are highly committed to our strategy there. So in terms of the joint venture with Euronet for Latin America, we are very confident that some of those projects will start contributing by the latter part of the year. So there are several projects in the pipeline, which we are expecting to crystallize throughout 2022. But it's not only that, I mean we have our Australian business improving as well. We are close to 1,000 ATMs there and we are also starting to deploy some of the first ATMs in Spain, out of the 100 ATMs we've been awarded recently. So there are several fronts in our ATM business that are starting to contribute on a strong basis.
Secondly, about the CapEx reduction, I'd say that, that CapEx has been very contained for the last couple of years since COVID started. That is the case, because we've been investing heavily in our asset base in the past and therefore, our asset base is in very good shape and we can keep that contained for as much as needed.
And at the same time we are prioritizing the client CapEx, all that related to additional business and growth. So there is some shift in the mix. So there is some increasing presence of client CapEx within the total mix. Nevertheless, for the year as a whole, and taking into consideration that there is some seasonality in our CapEx, I mean you should be expecting total CapEx to be probably a bit ahead of what it was last year.
And in terms of the M&A, as we mentioned before, you should expect a contribution in terms of sales of around EUR 30 million overall from the 3 deals that we accomplished. They are starting to be consolidated as of March, so we should start seeing the fruits of that in the coming quarters.
The next question comes from the line of Alvaro Lenze from Alantra Equities.
The first one would be in the current context of inflation, could you remind us in which country countries you're cash and transit fees include an ad valorem fee, whether this extends from LATAM to Europe? My second question would be on the performance of new products. You have provided the increase in terms of percentage of sales, excluding the divestments, but you have not provided that excluding the acquisitions that you've made during the quarter that have also contributed positively. So organically, how much would the new businesses have grown and what the increase in the weight of sales would be on a like-for-like basis?
And thirdly, just on the cash outflow on the Others line. I know that you have this kind of seasonality on the certification with clients, but still the amount seems significantly bigger than in other quarters or in other first quarters in other years. So I don't know if there is any specific to this, maybe the high growth on the quarter or if you could provide some additional detail.
And lastly, a follow-up on the question from Paco. You indicate that since the -- in March, you're seeing faster growth as the Omicron wave wears off. Do you expect this to translate into sequential quarter-on-quarter improvement in sales, meaning that Q2 sales should be higher than Q1? Or does that mean that the growth should accelerate, just that notification due to the fact that the comparison base in Q1 is much, much easier than what you will have going into Q2.
Alvaro. Several questions, so I will try to address all of them one by one. In terms of the inflation and the pricing mechanics, we don't disclose the pricing mechanics on a per-country basis, but we are being benefited by ad valorem mechanism. So that is a reality. In terms of the new products, and if we take the reference on the plus 57% that we mentioned in the presentation, exclude the divestments, the contribution from organic and inorganic is very much balanced. So you can say that half of it is coming from organic growth. So that gives you a flavor of how strongly the new products are behaving from an organic point of view.
In terms of any Others line in the cash flow, there are some calendar impacts which are making the impact that you see in the first quarter of 2022 to be higher than what you may have seen in other quarters. And that is the case, because if you recall, as of first quarter last year, for instance, and December '20, it was peak of COVID impact taking place, while end of first quarter on the cut-off date, March 31, it was Easter week. So the delta in the first quarter last year was lower while in this year we have December 2021 just reopened with high increase in activity and we have no Easter in the cut-off date in first quarter, so that creates -- the delta is higher than it was last year.
And in terms of the evolution in Europe, I would say that the answer is yes, we expect that sequential improvement to keep going ahead, in absolute figures, of course. In percentage terms, we'll see, but the comparison base then becomes harder in the following quarters than it was in Q1. But if -- we called out in Europe figures, we should expect this improvement trying to keep going ahead in the coming quarters.
[Operator Instructions] The next question comes from the line of Isabel Carballo from ODDO BHF.
My questions have been already answered.
The next question comes from the line of Manuel from Mirabaud.
My first question is whether you can give us a little more detail regarding the pricing and volume trends in the quarter. Javier, you mentioned before that it has been a balance between the both of them, but I was wondering whether you can give us a -- whether this is a 50-50 split, 2/3 1/3 in favor of volume or the other way around?
Manuel, so in relation to your question, it's quite balanced, as we said. So I think roughly we can say that it is 60:40 combination, if you want, in the quarter. I would say that probably higher impact from volumes in those regions that were more affected by COVID in the first quarter last year. But overall very solid volume recovery and very strong pricing discipline.
Okay. And my second question on -- sorry to come back again with the Other issue line in your cash flow. You have mentioned some seasonality. So I have to go down -- I have to go back to the evolution of that line in the last 3 years and the average cash outflow of the Other line from the cash flow has been roughly EUR 20 million in the period 2019, 2021. So this is already something almost doubled that magnitude. I don't know, it's something related with the extra plateauing growth or what might be the difference in terms of seasonality of this quarter versus a seasonality of the average over the last few quarters?
Yes, as we said, that is very seasonal in nature. So if you look at, for instance, last year, I think the Others line in the cash flow ended up being like minus EUR 6 million, which is an accumulated figure for the whole year. It started with minus 11. But as we mentioned, there is a calendar impact on the comparison base versus last year, but this tends to be quite neutral on a full year basis. This had an impact from the certifications, and that's basically the case because the peak volumes are happening at Christmas time in December. And therefore, when we get back to that point in time of the year, it more or less neutralizes, it's just whatever has increased or decreased the volume at that peak of the season. But when we compare it to that cut-off date in December, I mean, there is always lower volume end of Q1, end of Q2, where it is and that creates that comparison base, but it tends to, I say it again, neutralize on a full year basis. And the difference from what you see versus last year is -- as we said, it's mainly a calendar impact. So that's the bulk of it.
Yes. That's why I have tried to -- effort to go back to more years to see whether has been something extremely rare last year versus this year, that even if you go back to 3-year basis the number remains too high.
You should take into consideration if you look 3 years back, there was a COVID process there and because of that, even at the Christmas season, the volumes were lower than they were Christmas season pre-COVID. So that is also affecting the comparability on the calculations you may be doing now.
Okay. And then my final question is on the -- on how we should track the evolution of the business regarding what we -- what you announced in the context of your Capital Market Day. I believe that this period on that presentation was returning to pre-COVID levels at some point in 2023. Look like you are a little bit better than those expectations. Is that the perception correct, or you'll stick to the indications you gave us on your Capital Market Day?
Yes, I would say that as you see in the presentation in terms of sales, the trend is sort of a solid and sustained recovery. We also recall on the Capital Markets Day, we mentioned that the target for 2023 was an EBITA margin of 13% to 16% and we feel that we are recovering fastly to that target. So we are quite happy with how the business is evolving. So should things remain the same with nothing abnormal, I would say that we are also taking into consideration the digital seasonality in our results where second half of the year is typically stronger, I would say that we should expect to keep improving and we are firmly convinced that the market consensus for the full year is achievable and we are well on our way to fulfill the targets in the Capital Market Day.
As there are no further questions in the queue, that will conclude today's Q&A session. I would now like to turn the call back to Mr. Javier Hergueta for any additional or closing remarks.
Well, I would just like to thank you all for taking the time to join us today. Should you have any further queries, you know that our Investor Relation department remains available for all of you. And hope to see you again in our Q2 results presentation. Thank you very much, and goodbye.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen, you may now disconnect.