Prosegur Compañía de Seguridad (PSG) Q3 2024 earnings summary

Executive summary

• Sales for the first nine months of 2024 reached €3,584M, up 6.4% year-over-year, with organic growth across all geographies and 7% growth excluding Australia and India.

• Adjusted EBITA increased 1.2% to €237M, with margin declining to 6.6% from 7.0% due to FX, Forex business investment, and Australian restructuring.

• Net profit rose 2.2% to €51.6M, supported by improved tax rate and operating results.

• Operating cash flow reached €143M, up €30M year-over-year, though total net cash flow was negative €60.5M.

• The company remains on track to meet full-year EBITDA and cash flow targets, driven by strong performance in core businesses.

Financial highlights

• EBITDA rose 5.9% to €399M, with margin at 11.1%; EBIT increased 2.1% to €211M.

• Free cash flow was €10M, down from €20M in 9M 2023.

• Net financial debt stood at €1,108.5M (excl. leases, incl. Telefónica shares), with net debt/EBITDA at 2.6x.

• Average cost of debt improved to 2.6%, with over 70% at fixed rates and 2.6 years average maturity.

• Effective tax rate decreased to 47.4% from 53.1% year-over-year.

Outlook and guidance

• Management expects continued sales growth, strong recurring cash generation, and further improvement in leverage and cost of debt.

• Restructuring and setup costs in the Cash business are expected to be offset by synergies and consolidation in 2025.

• Security business margins and cash flow are expected to improve further in 2025, potentially more than doubling cash flow generation.

• Transformation Products are expected to maintain their growth trend, representing over 32% of sales.

• Ongoing focus on integrating ESG criteria and sustainability initiatives.