Press Room
Prosegur reported consolidated net profit of 48 million euros in the first quarter of 2016
The company grows organically by more than 17% in its LatAm operations, which is added to the good performance of its European operations, particularly in Spain.
Madrid, 6 May 2016. – Prosegur, a worldwide leader in the private security industry, earned a consolidated net profit of 48 million euros in the first quarter of 2016, representing an increase of 2.5% compared with the same period last year. The positive trend initiated last year, along with the resiliency of Prosegur's business model and the measures implemented to protect margins are resulting in a strong recovery of profitability that the company expects to be sustained throughout the year.
Prosegur’s shows a remarkable organic growth in the first quarter of 2016, especially in the LatAm region, with an increase of 17.6% over the same period last year. In this area, is worth to note the case of Brazil, with a 6.9% organic growth – a very positive result in spite of the heavy slowdown of the country's economy. Prosegur is also performing well in Europe, particularly in Spain with an organic growth of 11.4%. In the first quarter of 2016, the group's turnover amounted to 897 million euros, a decrease of 7.3%, which is explained mainly by the impact of the strong depreciation of currencies in LatAm countries where the company is present.
EBITDA decreased slightly to 111 million euros, also as a consequence of the depreciation of LatAm currencies. EBIT had a positive growth of 1.7% to 84 million euros, which reflects an increase in the margin from 8.5% in the same period last year to 9.4% in the first quarter of 2016. This improvement in profitability, both absolute and relative terms, is the result of the measures implemented to protect the margin and shows the capability of Prosegur's business model to obtain positive results even in the most adverse macro-economic scenarios.
Alarms business maintains their rate of growth
By business lines, Integrated Security Solutions sales amounted 453 million euros in the first quarter of 2016 – a decreasing 6% in comparison with the same period last year. In Europe and RoW area, Prosegur has maintained a positive growth of 4% to 237 million euros. This increase is mainly explained by the award of several large contracts in Spain, the higher weight of technology in manned guarding services, and the development and strengthening of Prosegur's cybersecurity division. In LatAm, Integrated Security Solutions registered sales of 215 million – a decrease of 14%.
Cash in Transit business totalled 392 million euros, 10% less in comparison with the same period last year. In Europe and RoW region, sales were boosted 3% to 131 million euros thanks largely to the development of the activity of outsourcing processes and to cash automation services. In LatAm, sales grew in local currency; however, due to the negative performance of the exchange rates, the area registered revenues of 261 million euros, which means a decrease of 16% compared to the first quarter of 2015.
Alarms has maintained its growth rate, reaching almost 450,000 connections. Alarms registered a positive growth of 2% to 53 million euros during the period. In Europe and RoW, Alarms grew 23% to 33 million euros in the first quarter of the year as the company has continued with its intense marketing activity in Spain. In LatAm, the growth speed of connection has been maintained, although turnover decreased 20% to 20 million euros due to the negative impact of the currencies.
Prosegur is growing organically in all regions in spite of the macro-economic situation
Regarding Prosegur’s operations by region, in Europe and RoW, the three business lines together achieved revenues of 401 million euros – an increase of 4.9%. Spain has maintained its upward trend and increased sales 11.4% to 227 million euros. Germany is maintaining the growth trend and has improved 3.4% compared with the first quarter of 2015. France shows flat growth, after finalizing the customer portfolio optimisation process, as Portugal does. Lastly, operations in RoW grew organically by 3.5%.
LatAm region accounts for 497 million euros, decreasing by 15.3%, due to the depreciation of currencies in all of the countries in the region. However, the company has grown 17.6% in local currency, showing the potential of the region for Prosegur, in spite of the slowdown of some of the most important economies in the area. It is worth highlighting, as mentioned above, the case of Brazil, where –in spite of the contraction of the GDP— the company has grown 6.9% organically. Or the Argentina Area (Argentina, Uruguay and Paraguay), with an organic growth of 35.3%.
Prosegur maintains a solid financial profile and remains committed to profitability
The Operating Cash Flow for the period reflects the normalization of Argentina after the release of the currency controls and import restrictions. Now Prosegur can pay international providers and purchase equipment from abroad for serving customers in the country. The improvements in the collection period implemented last year are maintained. Therefore, Prosegur is consolidating the positive trend started in the second quarter of 2015, considering the heavy seasonality that usually affects the business in the first half of the year, so Prosegur expects that the generation of cash will perform positively throughout the year.
Total net debt increased 46 million euros due to the effect of the normalization of Argentina and the financing of the South African investment announced in February, and amounts to 636 million euros. The leverage ratio is maintained at a comfortable level of 1.5 times the EBITDA. Prosegur keeps reducing its average cost of finance from 3.2% in the same period last year to 2.9%, taking into consideration that this includes currencies with interest rates higher than that of the euro.