Prosegur reported a consolidated net profit of €23 million in the first half of 2020
Revenue came to 1,775 million euros, excluding extraordinary results for the year, with organic growth in sales of more than 3%. However, the biggest decrease can be traced to the negative effect of the exchange rate, placing turnover down by 13.6%. In terms of profitability, Prosegur has reported an EBITA of 106 million euros, 33.3% down both on account of the effect of COVID-19 and an adverse exchange rate. The protective measures implemented have demonstrated a positive evolution when it comes to cash generation. The cash control measures have temporarily improved working capital and the company has also achieved a reduction in spending on Capex of about 33% during the period.
Madrid, 31 July 2020 – Prosegur's sales came to 1.775 billion euros in the first half of 2020, down by 13.6% year-on-year. This figure already accounts for the deconsolidation of the Security business in France, classified as available for sale, and the Alarms business in Spain. In any case, and as was the case in previous quarters, operations continue to report positive organic growth of 3.5%, demonstrating the business's resilience to COVID-19, although affected by the unfavourable exchange rate.
The EBITA reported comes to 106 million euros for the first six months of the year, down by 33.3%. The EBITA margin comes to 6%. Excluding the efficiency plans implemented at Prosegur Cash, EBITA stands at 131 million euros with an EBITA margin of 7.4%.
Prosegur has secured a net profit of 28 million euros in the first semester 2020, down by 60%. Consolidated net income, discounting minority interests, was 23 million euros, down by 53.2%. As already indicated in the first quarter, pursuant to the accounting standards (IFRS10.25), Prosegur must record the non-recurring and extraordinary impact of the sale of 50% of its Alarms business in Spain to Telefónica last February. Therefore, and mainly due to this transaction, Prosegur is required to post consolidated net income for the period of 321.2 million euros. The transaction with the telecommunications company has had no effect on Prosegur's cash flow as the payment was made in full in the buyer's shares.
In terms of the financial position, Prosegur has achieved a significant improvement in the generation of operating cash, boosted by the efficiency in collections and the containment of spending. Thus, the operating cash flow reached 143 million euros and represents an EBITDA cash conversion rate of 88.3%. Finally, the group's net financial debt has been contained from the previous quarter to 844 million euros at the end of the second quarter of 2020, excluding the impact of IAS 16. The level of indebtedness has been maintained in a net financial debt ratio over EBITDA of 2, while the cost of debt has been reduced to 1.16%.
As for the evolution of activity by business lines:
Prosegur Security, the manned guarding and technology business, has recorded sales of 892 million euros, 13.1% down on the same period last year. This figure excludes the sale of the cybersecurity business and activity in France. However, the unit has reported positive organic growth where: improved volumes in traditional manned guarding activity in Spain and Brazil, increased integrated security solutions in Brazil, Colombia and Singapore, and a strong demand for CovidFree solutions are all worth note. In contrast, markets where lockdown measures have been more severe have been most affected.
In terms of the sales of integrated security solutions, their penetration continues to increase and now account for 33% of sales.
In relation to the profitability of operations, there has been a slight improvement in margins as a result of the adjustment of operating costs and the increase in revenue from higher value-added services. On the other hand, labour protection measures implemented in some Latin American countries, the temporary increase in physical manned guarding and the unfavourable exchange rate have resulted in an EBITA at Prosegur Security of 21 million euros, 0.3% up on the first half of 2019. The EBITA margin was 2.4% during this period.
Prosegur Alarms, the residential and business alarm unit, recognised sales of 103 million in the first half of 2020. This figure is 26.2% down on the same period last year. It is worth noting that, since March, sales by the Alarms business in Spain have been recognised under profit/(loss) associated with investments in associates.
Lockdown measures have resulted in a reduction in volume due to the closure of shops. However, this activity is gradually returning to the levels of productivity seen before COVID-19. Nonetheless, organic growth recorded in the quarter was 11.7%.
Prosegur Cash, the securities logistics and cash management subsidiary, recorded sales of 772 million euros in the first six months of 2020, down by 13.1% compared to the same period last year. Billing in local currency (including organic and inorganic billing) has performed well again, up by 5.8%. However, currencies, especially in emerging markets, have continued to perform poorly. On the other hand, sales of New Products now account for 18.2% of revenue in the semester and show strong resistance to the pandemic.
Finally, Prosegur Cash's EBITA in the first six months of the year came to 76 million euros and a margin of 9.8%. It should be noted that these figures reflect the full cost of the efficiency plans implemented during the period.