Prosegur Compania de Seguridad SA
MAD:PSG
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Prosegur Compania de Seguridad SA
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Ladies and gentlemen, thank
you
for
standing by,
and
welcome
to
the
Prosegur
Full-Year
2021
Results
Presentation
Conference
Call.
At
this
time,
all
participants
are
in
a
listen-only
mode.
After
the
speaker
presentation,
there'll
be
a
question-and-answer
session.
[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,
Antonio
de
Cárcer,
Head
of
IR.
Please
go
ahead,
Antonio.
Good
afternoon
and
welcome
to
Prosegur
full-year
2021
results
presentation.
This
presentation
will
last
around
30 minutes
followed
by
an
open
Q&A
session.
This
webcast
will
be
hosted
by
Antonio
Rubio,
Secretary
General;
Maite
Rodríguez,
CFO;
and
myself.
Prior
to
starting,
I
would
like
to
remind
you
that
this
presentation
has
been
prerecorded
and
that
it
will
also
be
available
for
download
in
our
corporate
website.
I
will
now hand
you
over
to
our
Secretary
General,
Antonio
Rubio.
Good afternoon,
everyone,
and
thank
you
for
attending
this
presentation.
Today,
we
are
presenting
the
financial
results
of
a
year
that
has
been
full
of
challenges
not
only
for
Prosegur
but
also
for
the
industry
and
the
global
economy
as
a
whole.
In
this
complex
environment,
Prosegur
has
managed
to
achieve
positive
organic
growth
in
all
regions
and
business
areas.
This
consolidates
a
solid
recovery
trend
and
shows
that
our
business
model
remains
solid
after
the
gradual
fading
of
the
pandemic
effects
and
will
soon
return
to
pre-pandemic
levels
without
structural
damage.
We
had
not
fully
recovered
yet as some
negative
impacts
are
still
present
in
some
regions
and
business
areas.
But
we
are
very
optimistic
about
the
positive
development
of
the
situation
and
also
about
the horrible
tailwinds
that
recovering
macroeconomic
environment
will
bring
to
our
operations.
Before
we go
into
these
details,
let
me
first
summarize
the
main
highlights
and
achievements
that
Prosegur
has
made
in
the
past
year
2021. In
2021,
we
launched
our
strategic
plan
for
the
next
three
years.
A
plan
that
relies
heavily
on
innovation,
new
products,
and
digitalization
of
the
company.
Our
main
goal
is
to
improve
the
profitability
of
the
company
in
the
medium-
and
long-term.
On
the
innovation
side,
we
have
been
extremely
active,
launching
two
new
business
line;
AVOS
and
Cipher,
introducing
new
intellectual
property
frameworks,
GENZAI,
artificial
intelligent
platform
and
[indiscernible]
(00:02:51),
global
interconnection
and
communications
system
amongst
other
that
will
act
as
the
foundation
of
new
products
and
solutions
in
all
business
lines.
To
effectively
transfer
all
this
innovation
to
the
market,
we
have
also
developed
a
new
organizational
structure
with
the
creation
of
the
role
of
Global
Managing
Director
to
jointly
drive
the
evolution
and
market expansion of
Security,
Alarms,
AVOS,
and
Cipher.
And
also
appointed
a
new
Managing
Director
of
the
Security
business
based
in
the
US
whose
main
responsibility
will
be
to
accelerate
the
change
towards
a
full
integration
between
Guarding
and
Technology
and
quickly
capture
the
interesting
growth
opportunity
at
the
US
market
is
presenting
to
us.
On
the
business
evolution
side,
we
have
been
able
to
respond
to
the
harsh
macro
environment
created
by
the
pandemic,
gradually
recovering
our
volumes
in
all
business
lines
and
geographies.
Expanding
the
penetration
of
our
new
products
mainly
in
Cash
and
improving
our
profitability
quarter-over-quarter
in
almost
all
products
although
we're
still
suffering
in
Security
from
the
strong
negative
effect
that
the
last
pandemic
wave
has
imposed.
Our
balance
sheet
has
also
performed
very
well,
renewing
our
investment-grade
credit
rating
for
the
11th
year
in
a
row,
delivering
a
very
good
cash
flow
thanks
to
our
excellent
working
capital
optimization
and contagion policies.
Together
with
very
effective
foreign
currency
repatriation
programs
that
had
allowed
us
to
reduce
to
the
maximum
possible
CapEx
effects.
Regarding
ESG, in
2021,
we
have launched
a
new
Sustainability
Director
Plan
with
more
than
60
different
initiatives
and
had
fully
integrated
ESG
criteria
across
all
the
business
links,
back-office
and
corporate
procedures,
obtaining
a
very
rewarding
valuation
increase
from
their
main
ESG
rating
agencies
we
work
with.
And
finally,
in
terms
of
inorganic
expansion,
we
have
been
active
in
all
business
lines,
not
only
on
the
pure
M&A
side
but
also
creating
very
promising
partnerships
and
alliances. Let
me
give
you
some
more
color
on
this
topic:
We
have
completed
three
M&A
transactions
during
2021,
providing
a
total
acquired
value
of
€73
million.
Prosegur
Cash
has
expanded
their
presence
in
the
banking
correspondent
industry
or
CORBAN,
following
the
acquisition
of
the
one
of
the
market's
leading
national
players
in
Uruguay
in
May.
This
deal will
add
460
additional
PC
guarantees
to
our
current
platform
of
over
6,500
we
now
run
in
several
countries
in
LatAm.
AVOS
has
also
performed
an
operation
in
LatAm
through
the
acquisition
of
Solunegocios,
a
major
national
BPO
provider
specializing
in
digital
document
verification,
data
mart,
and
transactional reports with
an
added
strong
presence
among
retail,
insurance
and
banking
customers.
Finally,
Security
has
also
increased
its
footprint
in
the
US
by
acquiring
Superior
Security
and
Investigations,
a
security
operator
highly
focused
in
the
air
transportation
industry
with
ample
presence
in
the
states
of
Oklahoma,
Texas,
and
Missouri.
Furthermore,
in
addition
to
the
ongoing
M&A that
we'll
continue
to
deliver
through
2022,
we
have
struck
a
number
of
strategic
alliances
and
collaborations
with
major
players
in
different
key
industry
over
the
past
year.
Cash
has
formed
a
joint
venture
with
Euronet,
the
ATM
industry
leader,
to
become
the
region's
leading
independent
ATM
network
operator
in
LatAm.
And
in
addition
has
also
signed
a
strategic
commercial
alliance
with
Santander
Bank
in
Spain
to
target
the
small
and
medium
commerce
market
with
the
Cash Today
solutions.
In
Spain,
Santander
has
teamed
with
Movistar
Prosegur
Alarmas
to
resell
their
home
security
alarms
via
its
branch
network.
A
similar
agreement
has
been
signed
by
Prosegur
Alarmas
and
Telefónica
to
extend
their
presence
in
the
Colombian
residential
market.
Finally,
Prosegur/Microsoft
have
signed
a
strategic
collaboration
agreement
in
the
cybersecurity
environment,
certifying
Cipher
as
a
preferred
cybersecurity
partner
in
the
GRC (sic) [GCR]
technology.
This
long-term
partnership
will
work
together
to
build
cybersecurity
protection
services
that
Microsoft
will
integrate
into
their
collaborative
client
solutions.
These
have
been
the
main
highlights
of
the
period.
Let's
now
review
the
financial
performance
of
the
company.
And
for
that,
I
will
hand
over
the
presentation
to
our
Group
CFO,
Maite
Rodriguez.
I
will
join
you
back
at
the
end
of
the
presentation
for
my
final
comments
and
remarks.
Thank
you
very
much,
Antonio,
and
welcome
everyone
to
this
presentation.
I
will
start
the
financial
review
of
our
full-year
2021 results
with
a
quick
overview
of
the
most
relevant
indicators
of
the
period.
As
Antonio
mentioned
before,
volumes
have
recovered,
especially
in
the
second-half
of
the
year,
as
the
negative
impact
of
the
pandemic
has
subsided.
Proof
of
this
is
the
overall
sales
growth
of
5.8%
in
local
currency.
Organic
volume
growth
was
recorded
in
all
regions
with
increase
of
up
to
10%
and
11%
in
South
America
and
the
Rest
of
the
World,
respectively.
In
this sense,
it
is
remarkable
the
outstanding
revenue
growth
in
Security
in
the
US
of
up
to
16%
in
local
currency
terms.
New
product
have
also
grown
both
in
Security
and
Cash,
being
Prosegur
Cash
the
best
performer
with
an
increase
of
up
to
15%
in
the
penetration
of
the
new
solutions
in
the
revenue
mix.
Alarms
added
nearly
100,000
new
connections
to
their
customer space,
reaching
more
than
700,000
customers
in
nine
countries.
EBITA
has
reached
€223
million.
This
represent
an
EBITA
margin
of
6.4%
for
the
group.
Although
the
company
saw
a
gradual
improvement
in
margins,
especially
in
Cash
business,
there
were
some
temporary
effects
in
the
later
part
of
the
year
that
had
a
negative
impact
on
the
result.
I
will
come
back
to
this
point
later
when
we
analyze
the
consolidated
profitability.
However,
let
me
tell
you
in
advance
that
these
effects
are
temporary
and
mainly
caused
by
the
Omicron
COVID
variant.
Cash
flow
generation
continues
to
be
good,
with
an
excellent
EBITDA
to cash
conversion
ratio
of
almost
80%.
We
continue
to
improve
our
best
practices
in
working
capital
together
with
a
tight
control
of
the
infrastructure
CapEx
which
allows
us
to
achieve
an
operating
cash
flow
above
the
average
of
the
last
five
years
despite
the
unfavorable
macroeconomic
environment.
Finally,
in
terms
of
balance
sheet
position,
Prosegur
continues
to
benefit
from
a
very
comfortable
liquidity
profile
and
firepower,
maintaining
a
moderate
leverage
ratio
and
an
excellent
maturity
profile
for
our
corporate
debt.
If
we
look
at
the
group's
income
statement
for
the
full-year
2021,
we
see
that
revenue
has
increased
by
1%
compared
to
2020,
reaching
€3,498
million.
This
is
made
up
of
positive
organic
growth
of
5.5%,
supported
by
an
additional
0.3%
from
the
net
effect
between
M&A
acquisitions
and
sales,
and
only
diminished
by
a
negative
currency
effect
of
4.8%.
Geographically,
all
regions
also
posted
positive
organic
growth,
including
Europe,
whose
negative
decline
of
minus
1.3%
was
due
to
the
sale
of
the
Prosegur
Soluciones
company
to
Movistar
Prosegur
Alarmas.
If
this effect
is
excluded,
Europe
sales
grew
organically
by
1%
while
LatAm
and
the
Rest
of
the
World
increased
their
revenues
by
10.9%
and
11.3%
respectively
in
local
currency
or
by
1.2%
and
10.2%
if
the
negative
currency
effect
is
deducted.
This
is
a
good
indicator
of
how
our
volumes
have
progressively
evolved
during
the
year.
In
fact,
if
we
analyze
the
development
of
our
volumes
on
a
quarter-by-quarter
basis,
our
two
main
revenue
drivers,
Cash
and
Security,
have
gradually
improved
their
organic
growth
compared
to
the
same
period
in
2020.
With
the sole
exception
of
the
first
quarter
of
2021
in
which
Prosegur
suffered
the
most
from
the
pandemic
and
climatic
conditions
in
Europe
and
whose
comparable
benchmark
was
the
first
quarter
of
2020
when
the
pandemic
had
not
yet
been
declared.
It
is
also
worth
noting
that
the
strongest
improvement
was
achieved
in
Q4,
which
benefited
from
the
general
recovery
of
the
economy.
Reported
EBITA
is
still
negatively
impacted
by
the
pandemic-related
and
productivity
mainly
in
Security.
Consolidated
net
profit
remains
at
€59
million,
almost
at
the
same
level
as
in
2020.
Let
us
now
analyze
the
consolidated
profit
for
the
period.
EBITA
has
reached
€223
million.
This
represent
a
decrease
of
13.7% (sic) [13.6%]
compared
to
2020.
As
already
mentioned,
this
can
be
partly
explained
by
the
reactivation
of
the
investments
in
digital
transformation
that
has
been
put
on
hold
during
almost
all
of 2020
but
mainly
by
the
strong
negative
impact
that
the
Omicron
variant
imposed
on
the
Security
business
through
increased
labor
and
productivity.
The
high
number
of
positive
COVID
contagions,
which
occurred
mainly
in
Spain,
Portugal,
Argentina,
and
Brazil
had
a
strong
impact
on
our
workforce,
drastically
increasing
absenteeism
and
forcing
us
to
replace
all
sick
leave
of
operational
staff
with
substitutes
who
had
to
be
compensated
for
the
extra
work
and
overtime.
In
addition,
some
labor
regulatory
changes
in
Latin
America
at
the
end
of
the
year
allowed
us
to
re-dimension
the
workforce
in-line
with
actual
market
demand.
We
have
chosen
to
defer
this
additional
cost
in
2021
to
benefit
from
a
cleaner
cost
structure
from
the
beginning
of
2022.
And
lastly,
we
have
also
increased
our
commercial
investment
in
the
US
to
take
advantage
of
the
increased
market
demand
for
our
business
and
we
are
proactively
expanding
our
structure
in
this
market
to
be
able
to
serve
this
potential
higher
demand.
As
you
can
see,
all
these
negative
effects
are
temporary
or
one-off
in
nature
and
we
firmly believe
that
security
will
resume
the
positive
trend
of
profitability
growth
that
it
has
been
experiencing
for
the
last
two
years.
The
chart
on
this
slide
clearly
show
how
our
margins
have
gradually
recovered
on
a
sequential
basis
with
the
sole
exception
of
the
previously
mentioned
impact
that
Security
has
suffered
in
Q4.
Let
us
now
take
a
closer
look
at
our
cash
flow
statement,
financial
position
and
balance
sheet.
Starting
with
the
cash
flow
statement,
the
most
remarkable
aspect
is
once
again
the
excellent
ratio
of
EBITDA
to
cash
conversion
which
reaches
almost
80%.
This
ratio
exceeds
the
already
very
good
values
of
the
last
three
years
before
the
pandemic.
The
main
reason
for
this
is
the
positive
development
of
the
working
capital,
especially
in
the
last
quarter
which
was
favored
by
the
continuous
optimization
of
the
DSO.
Please
bear
in
mind
that
in
December
2020, many
special
effects
from
the
COVID
outbreak
were
included
in
working
capital.
Regarding
tax
payment,
I
would
like
to
mention
that
despite
the
fact
that
the
tax
rate
is
significantly
higher
than
the
group's
historical
average,
outflows
in
this
regard
have
not
increased
equally
as
many
aspects
that
explain
the
increase
in
the
tax
rate
are
purely
accounting
in
nature
with
no
related
cash-out.
Capital
expenditure
continues
to
be
contained,
especially
investment
in
infrastructure
CapEx
which
remains
under
control
representing
2%
of
total
group
sales.
However,
investments
in
digitalization
projects
have
been
reactivated,
especially
in
the
last
quarter
of
the
year.
In
terms
of
M&A,
deferred
payment
settlement,
mainly
from
Cash
and
Cipher
business
lines
acquisitions
explains
the
cash-out
of
the
quarter.
Lastly,
regarding
dividends,
both
Prosegur
and
Prosegur
Cash
completed
the fourth
and
last
permitted
installment
of
the
year
in
October.
Looking
now
at
the
group's
financial
position,
total
net
debt
at
the
end
of
2021
amounts
to
€845
million,
including
deferred
payments
of
€86
million,
treasury
shares
at
market
price
of
€37
million,
and
Telefónica
shares
of
€191
million.
If
we
also
include
additional
debt
related
to
IFRS
16
of
€102 million,
the
total
net
debt
reaches
now
€147
million.
Regarding
net
debt,
I
would like
to
note
that
this
ratio
remains
almost
unchanged
in
the
reported
period
compared
to
the
previous
quarters. Outflows
from
dividend payments,
M&A,
CapEx,
and
taxes
were
almost
completely
offset
by
the
positive
operating
cash
flow
of
the
last
three
months
of
the
year.
In
terms
of
leverage,
Prosegur
continues
to
have
a
moderate
net
debt-to-EBITDA
ratio
of
2.3
times,
well
below
current
bank
covenant
of
3.5
times.
Prosegur
maintains
its
traditional
financial
discipline
and
guarantees
solid
financial
position,
even
in
the
most
difficult
conditions
such
as
the
healthcare
crisis
which
still
affects
our
result
to
some
extent.
In
terms
of
pure
cost
of
debt,
I
would like
to
highlight
the
efficient
management
of
financial
cost
which
has
allowed
us
to
keep
the
company's
average
cost
of
debt
very
low
and
almost
unchanged
throughout
the
year.
Let
us
conclude
our
overview
of
the
financial
information
by
looking
at
our
consolidated
balance
sheet.
In
general,
there
were
no
significant
changes
in
the
fourth
quarter
of
2021,
apart
from
the
impact
on
intangible
assets
due
to
the
impairment
of €18
million
related
to
the
Australian
business.
Please
note
that
this
impact
has
not
been
included
in
the
income
statement
of
this
presentation
as
it
is
a
one-off
effect
of
non-recurrent
nature.
This
being
said,
I
would
like
to
highlight
that
the
most
remarkable
aspect
of
the
Prosegur's
balance
sheet
is
its
historical
solidity
and
stability.
As
always,
our
maturity
profile
is
worth
mentioning,
as
almost
85%
of
our
financial
liabilities
are
of
a
long-term
nature.
Liquidity
is
also
one
of
our
greatest
strength.
It
currently
covers
more
than
80%
of
the
main
debt
maturing
in
the
next
five
years.
Moreover,
the
maturities
of
the
main
financial
facilities
are
spread
over
the
years,
avoiding
a
concentration
of due date.
Last
but
not
least,
another
noteworthy
aspect
of
Prosegur's
balance
sheet
could
be
the
quality
of
our
client
portfolio,
which
historically
has
a
very
low
percentage
of
insolvencies,
representing
less
than
2%
of
the
group's
total
turnover,
1.15%
in
December
2021.
That
is
all
from
my
side
for
the
time
being.
Thank
you
for
your
attention
and
I
will
rejoin
you
for
the
Q&A
session.
I
will
now
hand
over
the
presentation
to
our
Head
of
Investor
Relations,
Antonio
de
Cárcer,
who
will
give
you
more
detailed
information
on
the
development
of
the
individual
business
areas.
Thank
you very
much,
Maite.
Let's
now
have
an
overview
of
the
results
of
each
activity
line,
covering
the
main
performance
indicators
of
each
one.
Starting
with
Cash,
we
can
see
that
revenues
in
local
currency
terms
have
grown
by
almost
7.2%,
a
very
good
result
coming
from
a
generalized
in
volumes
in
all
the
geographies,
despite
the
strong
negative
effect
suffered
by
lockdowns
during
the
first-half
of
the
year.
Inorganic
growth
of
0.2%
comes
from
the
differences
between
the
acquisitions
made
in
LatAm
and
Asia
Pacific,
deducting
the
sale
of
the
AVOS
business
to
Prosegur.
Negative
translational
currency
impact
has
also
been
milder
than
in
previous
quarters,
and
the
overall
result
in
euro
terms
has
reached
€1,519
million,
almost
a
1%
increase
over
2020.
Worth
noting
the
excellent
performance
of
the
new
products
that
now
account
for
more
than
21%
of
total
Cash
sales
with
very
good
penetration
figures
in
all
geographies.
Being
quite
remarkable,
the
evolution
of
both
Cash Today
solutions
and
Corban
business
that
have
grown
a
significant
almost
48%
year-on-year.
On
the
profitability
side,
EBITA
in
the
period
has
totaled
€185
million,
keeping
the
EBITA
margin
figure
in
par
with
last
year.
A
very
good
figure
considering
that
at
consolidated
group
level,
the
capital
gains
obtained
from
the
sales
of
AVOS
to
the
group
are
not
accounted,
and
that
in
2021
Cash
was
no
longer
benefiting
from
the
special
support
programs
put
in
place
by
some
governments
to
guarantee
subsidies
distribution
to
population
during
the
worst
of
the
pandemics.
Normalizing
those
effects,
underlying
margins
in
Cash
have
been
improving
quarter-on-quarter
throughout
the
full-year.
And
this
is
an
excellent
proof
of
how
fast
the
business
recovers
from
adverse
situations
and
how
during
2022
profitability
will
continue
improving,
taking
advantage
of
the
macro
tailwind
that
inflationary
economy
can
bring.
In
Security,
we
can
also
appreciate
positive
organic
growth
of
2.8%
and
an
additional
0.1%
of
inorganic
nature
from
the
acquisition
made
in
the
US
in
August.
A
negative
currency
effect
of
minus
3.4%
has
led
to
a
total
turnover
of
€1,735
million.
This
represents
an
almost
flat
decline
of
0.5%
compared
to
2020.
Volume
growth
was
led
by
the
US
with
excellent
16%
of
organic
increase
and
followed
by
Spain
and
Argentina,
which
showed
a
very good
recovery
trend
in
the
last
half
of
the
year.
This
growth
has
come
to
a
large
extent
due
to
the
increase
of
technology
sales.
Indeed,
technology
is
gaining
more
and
more
presence
in
our
product
mix.
A
good
proof
of
this
is
the
expansion
that
it
has
experienced
in
our
mix
of
the
new
products
over
the
last
two
years.
As
you
know,
in
recent
years,
we
have
used
the
term
integrated
security
solutions
to
mean
a
combination
of
man-guarding
services
with
remote
monitoring
and
technology
products
that
together
provide
a
coordinated
solution
for
each
individual
customer.
In
this
context,
we
have
now
decided
to
expand
the
disclosure
of
the
weighting
of
the
individual
components
in
the
Integrated
Solutions
mix.
As
you
can
see
in
the
chart,
pure
technology
products
are
gaining
more
presence
in
our
new
products
every
year.
They
now
account
for
57%
of
the
total
mix,
although
they
were
affected
by
the
supply
shortages
in
the
microchip
industry
at
the
end
of
the
year.
This
is
a
very
good
progression
that
should
accelerate
in
future
as
we
add
new
customers
every
year
with
our
model
of
integrated
security
solutions.
In
terms
of
profitability,
as
Maite
Rodríguez
said,
Security
EBITA
in
Q4
was
impacted
by
some
temporary
negative
effects
that
reduced
the
overall
margin
from
3.9%
in
2020
to
2.6%
in
2021.
The
main
cause
of
this
margin
erosion
is
the
strong
negative
effect
that
the
Omicron
variant
had
on
the
business,
leading
to
high
levels
of
unproductivity
and
labor
absenteeism.
This,
together
with
the
strong
commercial
investments
we
are
making
in
the
US
market
to
drive
growth
and
the
one-off
effect
of
some
stuff
adjustments
we
made
in
Latin
America
in
December
also
due
to
the
impact
of
the
pandemic,
has
had
a
temporary
negative
impact
on
the
profitability
of
the
business,
which
we
expect
to
fully
correct
in
the
second
half
of
the
year.
Let's
now
move on
to
Alarms.
We
are
extremely
satisfied
with
the
performance
of
this
business
in
2021,
despite
the
negative
impact
in
terms
of
churn
rate
and
stagnation
of
sales
that
we
suffered
during
the
confinement
in
all
countries.
As
you
can
see
on
the
graph,
both
Movistar
Prosegur
Alarmas
in
Spain
and
Prosegur
Alarms and
in
the
Rest
of
the
World
increased
the
number
of
new
connections
from
quarter-to-quarter.
In
total,
we
reached
more
than
700,000
customers
with
MPA
showing
a
phenomenal
increase
in
the
second-half
of
the
year.
The
dynamics
of
each
company
were
different
but
equally
positive
for
each
one.
On
the
one
hand,
Prosegur
Alarms
has
focused
part
of
its
commercial
activities
on
building
alliances
and
potential
partnerships
in
LatAm
that
will
accelerate
the
future
growth
of
this
customer
base.
In
this
context,
and
following
the
success
in
Spain,
we
have
signed
a
commercial
agreement
with
Telefónica
in
Colombia,
which
is
now
starting
to
bear
fruit
and
increase
the
number
of
new
clients.
On
the
other
hand,
the
business
has
demonstrated
it
can
quickly
recover
from
the
negative
impact
of
the
confinements
and
lockdowns,
reducing
the
churn
rate
by
150
basis
points
to
12%
and
increasing
it's
ARPU
to
€32 per
client.
This
increase
in
ARPU
is
largely
due
to
the
addition
of
several
new
products,
such
as
Conti
GO,
mobile
personal
protection
service
which
was
requested
by
almost
new
customers
and
also
by
the
advanced
features
implemented
in
both
the
new
domestic
panel
and
our
SME
solution,
HawkEye
which
now
incorporate
artificial
intelligence
and
video analytics
to
provide
our
customers
with
more
advanced
services
such
as
facial
and
voice
recognition
or
machine
learning
of
lifestyle
habits.
MPA,
on
its size,
has
become
the
fastest
growing
alarm
company
in
the
Spanish
market
leading
the
market
with new
contracts
with
quarterly
increases
up
to
31%.
This
represents
a
growth
of
more
than
66%
since
its
creation
two
years
ago
and
an
exceptional
value
creation.
Also
very
remarkable
is
the
fact
that
more
than
85%
of
new
contracts
come
from
customers
who
previously
had
no
alarm
system
on
their
homes.
This
shows that
the
market
is
still
not
sufficiently
penetrated
and
that
similar
or
better
growth
rates
can
be
achieved
in
the
incoming
years.
If
we
now
look
at
the
key
performance
indicators
of
the
Alarm (sic) [Alarms]
business
broken
down
by
company,
we
can
see
that
MPA
increased
its
customer
base
by
40%
compared
to
the
previous
year,
achieving
a
total
of
352,000
clients.
While
Prosegur
Alarms' kept
its
total
contract
based
almost
flat
while
recovering
from
the
strong
churn
rate
caused
by
the
pandemic
in
2020.
MPA's
churn rate
remain
at
the
same
level as
in
2020
at
10.6%,
an
excellent
result
considering
the
aggressive
advertising
campaigns
carried
out
during
the
year
which
could
theoretically
increase
the
number
of
less
reliable
clients.
On
the
other
hand,
these
promotional
efforts
have
had
some
impact
on
the
ARPU,
which
has
fallen
to
€35
due
to
the
aggressive
offers
made
in
the
customers
in
Spain.
In
the
Rest
of
the
World,
as
already
mentioned,
ARPU
has
increased
to
€32
per
client.
Subscriber
acquisition
cost,
or
SAC,
has
also
decreased
in
both
companies,
thanks
to
the
efficiencies
and
economies
of
scale
resulting
from
higher
customer
density
and
financing
programs.
This
effect
is
not
yet
clearly
visible
in
our
reported
cash
flow
as
the
comparative
figures
from
2020
still
include
two
months
when
Spain
was
still
in
the
portfolio,
creating
a
distorted
comparable
effect.
Reported
revenues
only
refer
to
the
perimeter
of
Prosegur
Alarms.
As
you
know,
MPA
is
consolidated
using
the
equity
method.
In
this
regard,
we
can
note
an
excellent
organic
growth of
18.2%,
reflecting
the
strong
ability
of
this
business
unit
to
increase
prices.
This
is
only
diminished
by
the
corresponding
negative
inorganic
effect
from
the
sale
of
the
sales
force
service
company,
Prosegur
Soluciones,
which
was
sold
to
MPA
00:29:38 in
Q2.
Finally,
in
terms
of
profitability,
MPA
has
slightly
reduced
its
EBITDA pre-SAC
margin
down
to
51.2%,
and
similar
happens
to
Prosegur
Alarms
that
reports
41.1%.
This
is
mainly
due
to
both
companies'
investments
in
innovation
and
technology
to
launch
new
products.
This
effect
will
hopefully
weaken
as
the
customer
base
continues
to
grow.
To
conclude
the
analysis
of
the
different
business
lines,
let
us
now
examine
the
performance
of
our
newly created
business,
AVOS
and
Cipher.
So,
with
AVOS,
we
appreciate
the
very
good
revenue
growth
of
10.3%
and
a
gross
margin
expansion
of
more
than
20%.
The
company's
good
performance
is
spread
evenly
across
all
product
lines,
including
front-office
and
back-office
services
plus
Technology
products
geared
towards
insurance
and
financial
companies
and
reinforced
by
the
recent
acquisition
in
Chile
of
one
of
the
main
BPO
product
solutions
providers
in
the
market.
Meanwhile,
Cipher,
our
cybersecurity
business,
has
been
redefining
its
business
model
by
shifting
its
customer
portfolio
from
one-off
implementation
projects
towards
a
mix
of
more
recurring
services
based
on
monitoring
and
response.
This
required
additional
investments
and
reduced
revenues.
However,
sales
have
maintained
flat
at
good
organic
level
with
only
some
FX
impacts
since
a
large
portion
of
our
revenues
comes
from
the
US
and
Latin
America.
Nevertheless,
Cipher
has
become
the
focal
point
of
the
strategic
alliances
with
Microsoft
at
the
beginning
of
the
year.
As
indicated
by
Antonio
Rubio
in
his
introduction,
this
partnership
will
lean
on
Cipher
at
a
global
level
to
jointly
develop
with
Microsoft
the
foundation
of
the
services
that
Microsoft
will
be
providing
to
their
corporate
clients
in
terms
of
managed
detection
and
response
in
cybersecurity
and
data
governance
compliance
in
their
cloud
solutions. This is all
regarding
the
evolution
of
each
individual
business
line
during
2021.
I
will
now
hand
over
the
presentation
to
our
Secretary
General,
Antonio
Rubio,
to
provide
information
on
our
ESG
and
sustainability
achievements
in
2021
as
well
as
his
final
remarks.
Thank
you very
much,
Antonio.
Now,
before
moving
to
my
final
remarks
and
conclusions,
I
want
to
provide
you
with
an
update
on
how
our
ESG
commitment
has
progressed
over
the
past
year.
This
year
2021
has
seen
a
considerable
reinforcement
of
all
the
sustainability
and
governance
standards
that
had
been
in
place
at
our
company
for
many
years,
adapting
then
to
the
new
taxonomies
and
metrics,
combining
them
all
together
with
our new
sustainability
policy.
This
document
was
accepted
on
October
2021
and
will
be
overseen
by
a
newly
formed
sustainability
corporate
governance,
appointments,
and
remuneration
committee
at
the
board
level.
We
also
approved
our
new
Sustainability
Master
Plan
for
the
incoming
three
years.
63
[indiscernible]
(00:32:44)
initiatives
are
covered
by
the
plan,
which
is
organized
around
four
key
areas
for
action:
Ethics;
Transparency
&
Governance;
Environment;
and
People
and
Safe
Work.
And
all
of
them,
we
had
detailed
indicators
to
allow them
to
monitor
progress
and
improvement.
We
have
also
strengthened
our
agreements
and
affiliations
with
prominent
ESG
organizations,
including
Forética,
The
Climate
Pledge,
or
The
Global
Compact,
in
order
to
assist
us
align
our
goals
with
the
global
ODS.
We
have
increased
and
deepened
our
involvement
with
ESG
rating
agencies
in
recent
years. We
have
dedicated ESG
team. We
are
aiming
for
a
fluid,
bidirectional
communication
approach.
As
a
result
of
those
initiatives,
we
are
very
pleased
to
see
how
our
ESG
ratings
have
improved
in
all
the
process
during
the
past
12
months.
And
also
to
welcome
the
new
AENOR
Good
Corporate
Governance
rating
that
has
awarded
Prosegur
with
the
highest
qualification
being
the
first
company
in
Spain
to
obtain
this
scoring.
We
will
continue
improving
and
expanding
our
commitment
with
sustainability
in
all fields
of action
as
it
now
has
begun
across
functional
requirement
in
all
our
business
line.
And
as
such,
we
will
constantly
monitor
and
measure.
Now,
before
going
to
our
closing
remarks,
I
would
like
to
express
my
foremost
appreciation
to
all
of
you
for
all
the
support,
dedication
and
good relationship
you
have
shown
to
me
during
the
past
12
years.
As
you
know,
I
had
been
promoted
to
the
position
of
Secretary
General
of
the
group
and
Maite
Rodríguez
has
taken
over
the
role
of
CFO
with
Prosegur.
Today, I
want
to
congratulate
Maite
for
her
promotion.
Fully
confident
in
her
capability
and
experience
to
assess
and
manage
all
the
financial
aspect
of
the
company,
improving
them
to
higher
standards
and
continuing
with
the
excellent
financial
discipline
that
the
group
has
created
over
the
past
two
decades.
Having
the
opportunity
to
communicate
with
all
of
you
throughout
the
years
has
been
a
great
pleasure
for
me.
Learning
from
you
all
and,
hopefully,
being
of
use
to
you
in
better
understanding
our
company
and
its fundamentals.
I
will
continue
to
be
at
your
complete
disposal
in
my
new
position
and, hopefully,
I
will
remain
in
touch
with
all
of
you
in
future
occasions.
Let's
now
finish this
result
presentation
with
a
summary
of
our
view
on
the
current
and
future
state
of
our
company.
2021
has
been
a
challenging
year
for
all.
However,
we
are
pleased
to
see
how
our
business
strategy
has
been
able
to
overcome
the
majority
of
these
challenges,
resulting
in
positive
volume
growth
across
nearly
all
product
lines,
with
Cash
steadily
increasing
both
revenues
and profitability,
taking
advantage
of
the
current
inflationary
environment
that
will
accelerate
Cash
volumes
and
speed
up
price
transfer
processes.
And
Security
also
returning
to
positive
growth;
only
affected
by
the
still
present
negative
pandemic
effects
that
are
also
gradually
fading.
Alarms
on
Prosegur
side
has
also
shown
an
excellent
level
of
resiliency,
improving
its
key
performance
measure
and
sequentially
expanding
the
number
of
clients
on
a
quarterly
basis.
We
expect
this
trend to
accelerate
in
the
coming
months, as
the
business
unit
is
now
focusing
extensively
on
expanding
alliances
in
order
to
increase
growth
across
all
geographies.
Regarding
Movistar
Prosegur
Alarmas,
I'd
like
to
highlight
the
exceptional
value
creation
that
this
joint
venture
has
produced
since
its
creation
in March
2020.
During
this time,
more
than
€400
million
in
enterprise
value
has
been
created
based
on
current
market
multiples.
This
is
an
extraordinary
figure
that
we
are
confident
will
continue
to
increase
at
similar
or
higher
rates
in
the
incoming
years.
M&A
has
been
active
in
this
year
contributing
another
€73
million
of
enterprise
value
to
the
group and
will
continue
so
during
2022,
as
we
have
a
consistent
pipeline
in
practically
all
business
lines.
We
continue
to generate
a
strong
cash
flow
and
maintain
a
favorable
DSO
trend.
This
combined
with
a
moderate
leverage
level
and
well-managed
capital
ensures
that
we
have
liquidity and
firepower
to
continue
increasing
our
M&A
and
serving
our
dividend
to
shareholders.
Finally,
we'll
continue
to
improve
in
all
the
ESG
metrics
that
we
have
specified
in
our
strategic
plan,
providing
more
precise
information
to
the
market
about
our
goals
and
accomplishments,
aspiring
to
be
a
model
for
strong
sustainability
practices
in
the
industry.
This
concludes
this result
presentation.
Once
again,
thank
you
very
much
for
your
attention.
And
now
our
CFO,
Maite,
and
I
will
gladly
attend to
all
your
questions.
Thank
you.
Ladies
and
gentlemen, we
will
now
begin
the
question-and-answer
session.
[Operator Instructions]
Your
first
question
today
comes
from
the
line
of
Francisco
Ruiz
from
Exane.
Please
go
ahead.
Your
line
is
open.
Hello.
Good
afternoon
and
congratulations
to
Maite
and
to
Antonio. And,
Antonio,
we
will
miss
you.
And
Mr.
de
Cárcer,
I
think
you
should
be
the
next
one.
So,
I
mean,
three
questions
on
my
side.
I
mean,
the
first
one
is
if
you
could
quantify
this
impact
of
absenteeism
in
your
margins
in
Security,
and
if
you
could
give
us
some
insight
of
what
could
be
this
impact
in
the
US,
where
the
labor
cost
is
–
I
mean,
what
about
the
rest
of
geographies?
My
second
question
is
on
the
CapEx.
We
have
seen
an
acceleration
in
CapEx
in
Q4,
so
I don't
know
if
this
Q4
CapEx
could
be
a
good
indication
for
2022
number.
And
the
last
one
is,
I
mean,
Antonio
has
commented
on
the
change
in
the
scope
on
Alarms,
okay,
something
like
Prosegur
Soluciones.
Can
you
give
us
more
information
about
that?
Thank
you.
Thank
you
very
much, Paco,
for
your
questions.
In
relation
to
the
[ph]
unproductivities (00:39:56)
coming
from
Security
business,
the
main
impact –
the
global
impact
is
around
€3.5
million.
And
if
we
go
back
to
USA,
we –
the
main
–
we
are
also
having
some
significant
and
productivity
impacts,
mainly
coming
from
the
problems
that
we
are
having
from
hiring
people
because
as
you
know
US
has
full
employment
and
this
is
become
an
issue.
And
in
relation
to
the
CapEx,
as
you
know,
we
are
recovering
and
reactivating
the digital
transformation
investment.
We
are
also
increasing
in
new
products.
For 2022,
we
will
be
more
or
less
same
line
as
we
have
been
in
2021
in
relation
to
the
infrastructure
CapEx
around
2%.
But
for
the
new
products,
we
will
have
an
increase
and
the
same
trend
as
what
we
have
suffered
during
– as
what
we
have
had
during
this
last
Q.
And
in
terms
of
Alarms, I
don't
know, if
you
can
repeat
the
question
because
I
forgot
it.
Yeah.
I
mean,
on
the Alarms
is
that
Antonio de
Cárcer
has
commented
that
there
is
a
change
in
scope.
I
mean
in
your
presentation
it's
something
like
around
18%
of
sales
of
last
year
due
to
the
disposal
of
Prosegur
Solutions (sic) [Soluciones]?
Could
you
give
us
more
detail?
And
just
a
follow-up
on,
to
be
sure,
on
what
you
have
commented,
it's
3.5%
the
total
effect
on
absenteeism,
so
at
the
end
of
the
day
we
are
talking
about
a
slightly
higher
margin
than
the
one
that
you
released.
How
confident
you
are
on
reaching
the
target
margin
in
2023
of
between
4-point
something,
5%?
Okay.
Thank
you.
In
terms
of
Alarms,
yes,
it's
Soluciones
and
we
sold
it
due
to
MPA
during
this
year
and
we
didn't
have
a
very
significant
impact
in
our
P&L.
I
think
that's
close
to
€2
million
or
something
like
that
but
it's
something
unsignificant.
And
in
terms
of
all
the
one-off
that
we
have
suffered
during
this
4Q,
we
didn't
just
have
the
[ph]
unproductivities (00:42:18)
caused
from
Omicron
variant.
There
are
other
additional
effects
such as dismissals
in
Argentina
after
the
last labor
regulation
changes.
Even
though
it
has
a
negative
effect
during 2021
because
it will
have
a
positive
effect
in
2022
because
we
will
be
more
efficient
in
labor
cost.
So,
this
is
total
labor
layoff
impact
amounts
around
to
€7
million
and
we
also
have
the
investments
in
new
talent
and
commercial
[ph]
sports (00:42:58)
in
the
US for
this
4Q
is
also
around
like
€3
million.
And
we
have
the
reactivation
of
the
digital
transformation
that,
full-year,
we
have
like
€13
million
more
than
previous
years.
So
if
we
consider
all
those
impacts,
we
should
be
in
a
EBITDA
margin
in
Security
business
above
4%.
So,
better
than
the
last
year.
Okay.
Thank
you very
much.
Thank
you.
[Operator Instructions]
Thank you.
That
will
conclude
today's
Q&A
session.
I
would
now
like
to
turn
the
call
back
to
Mr.
Antonio
Rubio
for
any
additional
or
closing
remarks.
Paco,
thank
you
very
much
for
your
polite
words
and
it
has
been
an
honor
for
me
to
represent
Prosegur
in
front
of
financial
markets
during
the
last
13 years.
I
am
leaving
the
financial
responsibility
of
the
company
in
the
best
hands
and
you
have
had the
opportunity
to
test
it.
And
thank
you
for
this
year
[indiscernible]
(00:44:34).
So
thank
you
very
much
for
attending
this
presentation.
You
have
at
your disposal
Maite
and
the
rest
of
the
IR
team.
And
thank
you
for
attending.
Maya?
That
will
conclude today's
conference
call. Thank
you
for
participating.
Ladies
and
gentlemen,
you
may
now
disconnect.