Madrid, May 7 2018.- Prosegur Cash reported a consolidated net income of EUR 31 million in the first quarter of 2019, down 49.5% year-on-year.
The beginning of fiscal year 2019 continues to be marked by the weakness of currencies in Ibero-America and the application of accounting standards IAS 21 and 29, after having been declared Argentina as a hyperinflationary economy. Despite these factors, Prosegur Cash reported a solid growth in local currency of 15% that has mitigated partially the situation of Ibero-American currencies. During the period it is remarkable the acceleration of the inorganic contribution resulting from the acquisitions made in 2018 and at the beginning of 2019. Thus, sales of Prosegur Cash in the first three months of 2019 reached EUR 432 million euros, down 3.9% compared to the same period of the previous year.
Prosegur Cash EBITDA was EUR 86 million in the first quarter of the year, 18.1% less than in the same period of the previous year. EBIT reached EUR 61 million, which represents 30.2% less. However, the EBIT margin, which suffered a significant decline in the third quarter of 2018 after the application of IAS 21 and 29, continues to show the recovery trend of previous quarters. In the first quarter of 2019, the EBIT margin stood at 14.2%. Regarding the evolution of cash flow, Prosegur Cash generated EUR 29 million of Free Cash Flow, maintaining a conversion ratio close to 80% in the period.
In terms of geographic activity evolution:
Latin America reported sales of EUR 283 million. The region contributed 65% of total sales and maintained a 16.9% growth that contributed to new geographies and acquisitions in markets where the company was already present. However, as a result of the currency devaluation, euro sales are 10% less than in the same period in 2018.
Europe represented 29% of total sales with a turnover of EUR 124 million, which was a 7% increase compared with the previous financial year. Increased sales in Europe are due to healthy organic growth that adds to the contribution of acquisitions that complement traditional business.
AOA (Asia, Oceania and Africa) contributed 6% of sales with EUR 25 million, up 30% from the first three months of 2018, thanks to the positive contribution of operations in the Philippines.
Activities corresponding to the New Products unit have maintained their strong growth rate, reaching EUR 65 million in the first quarter. This means that the New Products already comprise 15.0% of the total turnover of Prosegur Cash. In Latin America, despite the effects of the exchange rates, new services grew by 46% to EUR 41 million, especially driven by Smart Cash (cash management automation services at point of sale) and AVOS (outsourcing unit of high-value-added services). New services also showed strong growth in the Europe region, where the figure rose by 30%, while in the AOA region they fell by 37%.
Lastly, total net debt, including treasury stock, of Prosegur Cash was EUR 699 million at the end of the first quarter. This figure increased in relation to the close of the previous year due primarily to the application of IAS 16 and acquisitions. The company leverage ratio is therefore slightly up two times total net debt over EBITDA.