Prosegur obtained a net profit of 19 million euros for the first quarter of 2020.
Prosegur’s sales reached €994 million in the first quarter of 2020, which represents a 0.1% increase. The company has maintained its positive trend in growth in local currency operations, which progressed by 9.4%. However, profitability has been influenced by the impact of the COVID-19 coronavirus and the exchange rate in Ibero-American currencies.
Madrid, 26 May 2020 – Prosegur’s sales reached €994 million in the first quarter of 2020, which represents a 0.1% increase. The company has maintained its positive trend in growth in local currency operations, which progressed by 9.4%. However, profitability has been influenced by the impact of the COVID-19 coronavirus and the exchange rate in Ibero-American currencies.
The reported EBITA reached €53 million in the first three months of the year, down 27.0%. While the EBITA margin is down to 5.4%. Therefore, Prosegur achieved a net profit of €19 million during the first quarter of 2020, down 37.7%. Consolidated net income, minority interests apart, amounted to 11 million euros, down 47.8%. It should be noted that in accordance with accounting standards (IFRS 10.25), Prosegur must record the non-recurring and extraordinary impact of the sale of 50% of its Alarm business in Spain to Telefónica last February. Thus, and mainly due to this operation, Prosegur must reflect for accounting purposes a consolidated net income during the period of €309.3 million. The operation with the telecommunications company had no effect on Prosegur’s cash flow since the full amount was paid with the purchaser’s shares.
In terms of its financial position, Prosegur has developed initiatives to protect its cash position and limit liquidity consumption. Operating cash flow amounted to €22 million and represents an EBITDA conversion rate of 25.6% within the group’s historical parameters. Finally, in the first three months of 2020, the net financial debt of the group increased by €190 million compared to the close of 2019, excluding the impact from the application of IAS 16 and primarily arising from operations of inorganic growth in Brazil, Colombia, Ecuador and Spain, and the programme for the repurchase of treasury stock. The debt level is maintained with a net financial debt to EBITDA ratio of 1.8.
How the business has evolved, broken down by business line:
Prosegur Security, the surveillance and technology business unit, has recorded sales of €513 million, up 4.6%. However, in the current context, Prosegur Security has strengthened its services in areas such as distribution and the hospital setting, new volumes, which do not fully absorb the fall recorded in all other services. In terms of sales of comprehensive security solutions, these already reach 29% of the customer portfolio, with increases in the markets in Spain, Brazil and Colombia.
Relative to profitability of operations, the margins have been affected by the shutdown of services and the exchange rate. The unit’s EBITA figure reached €8 million, down by 33.3% on the first quarter of 2019. The EBITA margin was 1.6% during the period.
Prosegur Alarms, the unit that specialises in alarms for homes and businesses, recorded sales of €62 million for the first quarter of 2020. This figure is down 9.1% on the same period of last year since, as of March, sales in the Spanish Alarm business in Spain are now recorded in the results line related to investments in associates.
Prosegur Cash, the logistics business line for valuables and cash management, reached €415 million in sales during the first three months of 2020, which is down 3.9% compared to the first quarter of 2019. Nevertheless, the company recorded a growth in local currency of 9.0% for its overall business activities, which have also been affected by the strong currency devaluation. Sales of new services have continued showing a strong growth rate and now represent 18.2% of total sales. In addition, Prosegur Cash has started operations in Ecuador and has completed the divestment in the cash-in-transit activity in Mexico.
EBITA reached €53 million, which translates into an EBITA margin of 12.7% in the period.
The first quarter of 2020 has been marked by the impact of the COVID-19 Coronavirus. In this context, Prosegur’s services, both security and cash-in-transit, have been declared essential. The activity, even though it has been reduced, has not stopped and therefore the company recognises and appreciates the extraordinary work of all its professionals.
Prosegur’s priority at this time is the safety of its employees and customers. Accordingly, the company has deployed the prevention and containment measures to comply with the recommendations issued by the health authorities. In addition, it has increased its resources for teleworking and where teleworking is not possible, it has activated contingency plans to safeguard the health of all its professionals. Prosegur has also launched plans to ensure business continuity and service delivery in any scenario. Finally, Prosegur is implementing a strict cost reduction and control plan.