At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star and one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star and zero. I'd now like to hand the conference over to your speaker today, Pablo de la Morena, Head of IR. Please go ahead.
Thank you, Tracy. On behalf of all the Prosegur Cash team, I would like to welcome you to our 2021 first quarter results review that will be led by our CFO, Javier Hergueta, and myself. We estimate it will last around 20 minutes, and during this time, we will try to address the main events that took place during the reference period. At the end of the call, we will open the floor for our Q&A session, where we will try to address all the doubts you might have. In case we don't get to all your questions today, we'll be pleased to answer those on individual calls with each of you. I wish to thank you all for your attendance and remind you that this presentation has been pre-recorded and is available via webcast on our corporate webpage.
Now, before turning the call over to Javier, let me comment some relevant news regarding the use of cash during the trimester. First, I would like to share with you the main conclusions of a new study elaborated by the Economist Gerhard Rösl and Franz Seitz in 2021. The authors have analyzed the impact of different crises such as the Y2K, the global financial crisis, and the COVID-19 on cash demand and have observed an evident increase in global cash in circulation in such times. Cash hoarding or store of value, especially in the form of large denomination banknotes, are the main motives behind the mentioned increase, and this is a consequence of cash ability to reduce uncertainty during turbulent periods.
Second, let's highlight once again cash resilience in the aftermath of the snowstorm Uri in Texas amid widespread power outages, electronic payments failure, and the shutdown of financial infrastructure. The economic disruptions brought by natural disaster and technological breakdowns have increased the relevance of resource redundancy and systemic resilience in economic processes ranging from global supply chains to payment networks. These events have demonstrated the need to have a payment solution does not require technological or electrical infrastructure to be functional in the light of digital failures.
Third, let me point out the European Economic and Social Committee call for preserving the access to cash and ensure its acceptance in Europe. The former European Institution statement is justified by the fact that cash continues to be the preferred means of payment for consumers at their point of sale and in transactions between individuals. Finally, just a few words in relation to the Swedish plan to expand its cash infrastructure. A new law came in effect on January 1st to protect the more fragile people such as the elderly, immigrants, those with disabilities, the rural, or those who don't have access to digital payments. As a result, the number of cash centers and ATMs in the country will be increased in the coming years to ensure cash access to all citizens.
Moving forward, today's agenda is as follows. We will start discussing the main highlights of the period, then we will review our performance in the different regions, and finally, we will summarize our financials and make some closing remarks before moving to the Q&A session. I will now turn the call over to Javier, who will cover the most important topics to date.
Thank you, Pablo. Good morning to everyone. Today, we are presenting our 2021 first-quarter results, a period still impacted by a challenging environment. Having said this, let me stress that our sales at constant currency have remained broadly in line with last year figures, despite the lockdowns, and also that our reported EBITDA margin reached 15.8%, which implied an underlying EBITDA margin of 9.9% at the end of the quarter. On the consolidation front, I would like to highlight the completion of the divestment of our AVOS business in Spain in March 31st. As you recall, the aim of this transaction is to focus in new growth areas with a better strategic fit with our portfolio. I will elaborate further in this matter later in the presentation.
Regarding transformation, our new solutions, which represented a 22.1% of our total sales by the end of March 2021 versus the 18.2% year ago, continued to outperform the traditional business and gaining weight within our revenue mix. In this context, and with the intention to propel the growth of our retail cash automation solutions, we have entered in a strategic partnership with Banco Santander to jointly promote this product in Spain. Finally, let me remark our financial discipline, which allowed us to improve our operating cash flow by 69% and to carry on deleveraging our balance sheet, thus providing a significant leeway to navigate this uncertain time.
Let me now spend some minutes discussing the evolution of our sales and operating margins and our performance in terms of M&A and new products. In this slide, we can see two different charts showing on a cumulative basis the evolution of our local growth and our performance in terms of margins. The chart at the top reveals that our business growth has been nearly flat despite the tough comparable base and the hard lockdowns in Europe, and to a lesser extent, in LatAm. Therefore, we have been able to practically neutralize a lower than initially expected level of activity with new services, pricing discipline, and acquisitions. The chart at the bottom depicts the evolution of our EBITA margin that has been gradually improving along the quarter, despite the lack of operating leverage in Europe and the FX.
Going forward, and although visibility remains limited due to the inability to foresee future confinements and the speed of the economic recovery, we should start benefiting from a less demanding comparable base, especially in Europe, and a milder currency effect. As of March 31st, we have completed the divestment of our AVOS business in Spain for an enterprise value of EUR 67 million. This business, which has been growing successfully during the last years, will require additional investments to capture the potential opportunities existing in new verticals and geographies. Therefore, after concluding a new strategic revision of our businesses, we have decided to divest it, monetizing the value generated in recent years, and freeing up resources, capital, and management, to foster our expansion into new growth opportunities within our ecosystem.
These opportunities, which are closer to our core business, will bring higher returns and synergies and will also require additional investments. Regarding transformation, let me point out that we keep transforming our company and increasing the weight of our new solutions within our revenue mix. As of March 2021, the new product sales ended in EUR 76 million, growing 0.6% in euro terms and maintaining healthy growth dynamics despite the pandemic. In terms of sales penetration, new solutions exceeded a 22% mark at the end of the quarter, 18.3% if we excluded our AVOS business, showing a more resilient profile than the traditional business. Finally, we continue investing in the digitalization of our company, in our people, in our processes and systems. As a result, we have increased by 14% our disbursements in this area, and we expect more to come throughout the year.
In line with our strategy to accelerate our growth in adjacent areas to our core business, I would like to announce that we have rebranded and incorporated new functionalities to our current solution for cash automation in retailers. Our new Cash Today solution, previously known as Smart Cash, is a disruptive product that will allow our customers to get the cash they collect in their bank accounts in real time. It is also a more robust, secure, and mobile-friendly solution that incorporates a wide range of products with different features within its portfolio. We have teamed up with Banco Santander, a leading financial institution, to launch this first digital cash management service for companies in Spain, a market where more cash is handed over for small purchases than in any other major economy in the Eurozone.
Cash Today will target supermarkets, logistics, restaurants, service stations, pharmacies, tobacco shops, and other small and mid-size businesses. I will give the word to Pablo, who will walk you through the different dynamics of our regions.
Thank you, Javier. In Latin America, where the COVID-19 and the currency depreciation continue impacting the comparison versus last year, our sales reached EUR 219 million, a 19% drop versus the same period in 2020. Despite the weaker activity resulting from selective lockdowns experienced in the quarter, our local currency growth remained positive, thanks to a remarkable 4.7% organic growth and an additional 1% growth derived from last year acquisitions. In addition, our new products kept growing at double-digit rates in local currency terms and amounted to EUR 45 million. This figure represented a 20.3% of our total Latin American sales, a 210 basis point improvement versus the 18.2% posted a year ago.
In Europe, our sales ended in EUR 99 million, a 16% decrease versus last year, which was mainly explained by the severe confinements implemented since the beginning of the year, certain weather-related events experienced during the quarter, and less working days. On the other hand, our new services ended in EUR 27 million, representing a 27.2% of our European sales, an increase on 9% versus last year figures. These figures still incorporate our AVOS unit as the deconsolidation of the business has become effective in the second quarter of this year, as we have previously discussed.
Finally, our sales in Asia Pacific improved by 5%, up to EUR 27 million, on the back of our inorganic growth and a more benign exchange rate. Regardless of these encouraging figures, I would like to emphasize that the current environment in the Australian market remains tough, as this country has been widely affected by the pandemic. To conclude, let me comment that our new products, fueled by the ATM business in Australia, reached 17.3% of the sales of the region. I will now hand you over to Javier, who will summarize the financials.
Thank you, Pablo. Starting with the top line, total sales reached EUR 345 million, 16.8% less than a year ago. This is the combined effect of a negative organic growth of -2.3% and a -16% coming from the currency depreciation and the hyperinflation accounting, and that has been partially mitigated by an inorganic contribution of 1.5%. On the profitability side, our reported EBITDA margin ended in EUR 54 million, representing 15.8% over sales, an improvement of almost 4% and 310 basis point in both absolute and relative terms versus the figures posted a year ago. The underlying EBITDA margin for the quarter, figure that excludes the capital gains derived from divestments, resulted in EUR 34 million and close to 10% mark in relative terms.
This figure, benefited from several cost initiatives launched during 2020, is still impacted by the lower activity resulting from the severe mobility restrictions in some of our countries and the currency headwinds. Below the EBITDA line, our financial results posted net expenses of EUR 2 million, in line with last year figures. Lower interest expenses resulting from our net debt reduction and hyperinflation have offset the lower profits from foreign currency transactions. Our effective tax rate for the period, which was close to 30% and represented an improvement versus the 40% figure reported in 2020, has been benefited by the AVOS disposal. As a result, our net consolidated profit increased by 18.7% to EUR 33 million, which represents a margin close to 10% over sales. Regarding cash generation, let me underline that our free cash flow reached EUR 40 million by the end of March, almost doubling the figure posted a year ago.
Cash conversion ratio remained stable at 80%. The implied free cash flow yield increased to 10% if we considered our LTM free cash flow and our current enterprise value. CapEx and working capital figures continue benefiting from the rationalization of our investments, as well as the thorough management of our working capital. As a result, our CapEx investments have been reduced by 6% versus last year, and the working capital outflow we normally face at the beginning of the year has been reduced by a third for the same reference period. We continue managing our customers and suppliers in a proactive manner and investing in systems and processes to improve the entire collection cycle. M&A caption ended in a positive figure of EUR 19 million and was the combination of cash outflows from deferred payments and proceeds received from the AVOS disposal.
Finally, the dividend and the treasury stock line incorporate the payment of the first installment of our dividend and the share buyback program we have in place. Let me now make some comments regarding our total net debt, which on top of our net financial position, includes the deferred payments coming from former acquisitions, our treasury stock, and the IFRS 16-related debt. As of March 2021, our total net debt mounted to EUR 629 million, a EUR 43 million sequential reduction versus the figures reported in December and an outstanding EUR 128 million decrease since the beginning of the pandemic in March 2020. Also, let me recall you that we have a very comfortable debt maturity profile with no major refinancing needs before 2026, and therefore, we can concentrate on capturing the existing growth opportunities while we continue transforming our company.
Before moving to the Q&A, let me make some closing remarks as conclusions. First, the proven resilience of our business model. Leaving aside the translational impact of the Forex, our teams have been able to capture additional services and maintain a pricing discipline that help us to almost offset the lower volumes resulting from the COVID-19. Second, the solid performance of our new solutions that keep gaining share in our revenue mix. We continue monitoring the evolution of our cash ecosystem, developing new opportunities that allow us to grow individually or together with partners, leveraging on our existing network and capabilities. Third, our financial discipline. Since the outbreak of the pandemic, we have deployed several initiatives that allowed us to adjust our cost base, preserve our cash generation, and protect our balance sheet.
We keep controlling our cost and discretionary expenses, optimizing our CapEx, and improving our DSO to maximize our cash flow generation and reduce our leverage. Fourth, our strong commitment with digital transformation and sustainability. The world is changing very fast and becoming more complex every day. We need to keep investing in our people, in new processes and systems to continue evolving and be prepared to address future challenges in the best possible manner. We have also reinforced our sustainability commitment with a dedicated team supervised by a C-level executive, and the approval of a new sustainability director plan that incorporates 63 initiatives and will roll out future actions in this key area.
To conclude, let me remark that although our recovery path is still heavily dependent on the vaccination progress and the reopening of the different economies, we expect to start benefiting from a less demanding comparable base and a minor currency effect in the coming quarters. In the meantime, we will continue prioritizing our cash flow generation and strengthen the agility of the company to emerge stronger and ready to capture future growth opportunities. This is all on my side. Thank you all for the attention, and I will now be pleased to begin with the Q&A session.
Thank you. If you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Should you wish to cancel your request, please press the hash key. Star and one to ask a question. We have a question from the line of Francisco Ruiz of Exane. Please ask your question.
Hello, and good morning to both of you. I have two questions, if I may. The first one, if you could give us more color on the new Cash Today agreement with Santander. How it differs from your own approach, from the previous own approach, if you are paying some fees or receiving something from Santander, and if you have exclusivity on this business, at least in Spain. The second question is on AVOS transaction. [Nelly], correct me if I'm wrong, but it is only for the Spanish business. What is the reason to keep the rest of the business in cash? Last question is, if you could give us an update on how the cost-saving plan that you launched last year is performing right now. Thank you.
Good morning, Paco. We'll try to address the three questions one by one. On the first one, in the agreement with Banco Santander, it's basically a new commercial tool for us in order to sell the Cash Today solutions in Spain. It adds to our existing own commercial force already in place. In that front, there's an embedded fee for the commercial role that Banco Santander plays on that. And in terms of the exclusivity that you were asking for, yes, Banco Santander is partnering with us on an exclusive basis for that. They're only selling our solutions on that front. We expect that will really help us to accelerate the growth of our Cash Today business in Spain very significantly. Probably, we'll be more than doubling the current growth rates in the Spanish market.
In relation to the AVOS, yes, I confirm that the transaction is related to the Spanish business. In relation to the second part of the question, why we are still keeping the rest, because it's a less mature business that we acquired not very long ago, and we are still in the initial curve of that business. The agreement we have reached calls for mutual conversations in good faith to have the chance to sell that whenever it comes to place. It is still at an initial stage and less mature than what the business was in Spain up to now. In relation to the third question on the cost savings plan, the bulk of that, as you may recall, was for restructuring programs implemented for a total amount close to EUR 30 million. That is being implemented almost in full.
There might be some non-meaningful additions to that, but the bulk of that is really already in place. We are starting to see the benefits of that at the different countries in terms of the evolution of the cost base and the profitability performance of the different geographies.
Thank you.
Thank you. Your next question comes from the line of Álvaro Lenze of Alantra. Please ask your question.
Hi, thanks for taking my questions. I wanted to know whether you could provide us some update on how the trends are going into Q2 after the weak performance, especially in Europe, due to the third wave of the pandemic, and whether you are seeing some improvements there. Also if you could provide some update on Argentina and how is the cash repatriation going, whether you additional difficulties?
Good morning, Álvaro. In relation to the trends that we are currently perceiving in the market, in the case of Europe, the beginning of the year has been tough. We have been impacted by the hard confinements that we've seen. Nevertheless, we have been experiencing a gradual improvement along the quarter. We started on a more challenging environment in January, and we have improved since that beginning. Right now, I think that we should be expecting that improvement to remain some gradual month-by-month , quarter-by-quarter , better performance. Having said that, the environment is still tough because in Germany, the lockdowns have just been extended up to end of June. As I said, we've been, in that context, performing on a gradually better way during the quarter, and we expect that to happen also in the next months.
In the case of Spain, the state of alarm is ending up very soon, and we understand that that will also help increase the level of activity, which has already happened throughout the quarter. All in all, despite it being tough, we expect it to be improving and better than what we've seen in the first quarter. In relation to the second question around Argentina, nothing has changed there. The cash repatriation policies that we've been implementing last couple of years remain in place. We've made use of part of that also in Q1 this year on a regular basis. As you already know, we just try to select the optimum windows of opportunity to try to make the maximum profit out of that. As we mentioned several times already, we had indebted ourselves in local currency terms last year and repatriated cash in advance. We are now keeping some local debt to benefit from the hedging policy.
Okay. Thank you very much.
Thank you. The next question comes from the line of Miguel González of JB Capital. Please ask your question.
Yes. Hi, good morning. Thanks for the presentation and for taking my questions. My first question is, well, I wonder if you could just elaborate a bit about how has been the performance in Brazil in terms of organic growth. What are your expectations there for the rest of the year? Well, central bank increased interest rates last month on high inflation. How you think this will impact cash volumes? Have you seen an improvement? My second question is about net proceeds from AVOS divestment. You said that there are a few opportunities that benefits your cash activity. I wonder if there are any big M&A deal we could expect for, or you just referred to the usual M&A activity. Thank you.
Good morning, Miguel. In relation to Brazil that you were asking in your first question, the performance in the country remains healthy. It's been the case already for several quarters in a row. We understand that the macro conditions will also be beneficial for us in the sense that we've seen an increase in inflation, which has come up to over 3.5% in March, which you know is a natural driver for our business. Also the increase in the interest rates that you mentioned, which has increased by 75 basis points and probably will be increased by a similar amount very soon. Those are natural drivers for our business that we understand that should help driving a better scenario in which to operate in the coming quarters.
Therefore, our expectation in terms of the underlying performance of the business on a regular basis will be to keep that healthy trend that we are experiencing. It is true that last year we had some temporary services due to the aid programs that the government put in place due to the pandemic. We'll see if there's any of those in the coming quarters. Keeping that aside, the underlying trend remains positive and the context from the macro perspective should be helping us in that front. In relation to the second question on the AVOS transaction and the future M&A, we understand that the M&A will be mainly focused in new products right now, and that's what we are really working on. The pipeline is really populated.
Given the current status of the transactions in place, we understand that we should be reaching the range of EUR 50-EUR 150 million, as we've always done since the time of the IPO. That will be composed of different transactions of a different nature in different business lines. We don't anticipate any major transaction taking place right now.
All right. Thank you.
Thank you. Just to remind you, it's star and one should you wish to ask a question. Your next question comes from the line of Beatriz Rodríguez of GVC Gaesco. Please ask your question.
Hi. Just a few questions. The first one is within the growth in new products, is organic growth more relevant or inorganic growth due to the entry into new businesses? The other one is, what does the other line include in the cash flow? Thank you.
Morning, Beatriz. In relation to the new products, as always, there's a mix between organic and inorganic growth, but I would like to highlight that the organic growth is stronger than the last part of the year. The beginning of the year has been really strong, and they are performing very satisfactorily. There's an acceleration of the organic growth of the new products. The final figure is composed of both organic and inorganic. In relation to the others, as we've explained, I think in previous quarters, there's a component on the cut-off date for the cash certification systems, which calls for the majority of the evolution. As we always said, we understand that the year-on-year impact in the cash flow from that caption should be probably neutral.
Thank you.
Thank you. Once again, star and one to ask a question. There are no further questions coming through on the line, sir. Please continue.
Okay. If there are no further questions, then just let me thank you all for taking the time and participating in the call. As you know, our Investor Relations team remains available for any further queries you may have. Hope to speak back to you again in our Q2 results presentation. Once again, thank you all for participating.
Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.