At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Pablo to La Moreno, Head of IR. Please go ahead. [SPEAKER JOSE
RAFAEL FERNANDEZ:] Thank you, Tracy. On behalf of all the Prosopuritas team, I would like to welcome you to our 2021 Q1's results review that will be led by our CFO, Javier Guerra and myself. We estimate it will last around 20 minutes and during this time, we will try to address the main events that took placed during the reference period. At the end of the call, we will open the floor for a Q and 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'd 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 prerecorded and is available via webcast on our corporate web page. Now before turning the call over to Javier, let me comment some relevant news regarding the use of cash during the 3 mester. First, I would like to share with you the main conclusions of a new study elaborated by the economists Gerard Ost and Fine Cet in 2021. The authors have finalized the impact of different crises such as the Y2K, The global financial crisis and the COVID-nineteen on cash demand and have observed an evident increase in global cash in circulation in such Thanks. Cash hoarding or store of value, especially in the form of large denomination banknote The main motives behind the mentioned increase and this is a consequence of cash ability to reduce uncertainty during proven period.
2nd, let's highlight once again cash resilience in the aftermath of the snowstorm Yuri in Texas. Amid widespread power outage, electronic payments failure and the shutdown of financial infrastructure, The economic disruptions brought by natural disaster and technological breakdowns have increased the relevance of resorted 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 that does not require technological or electrical infrastructure to be functional in the light of digital failures. 3rd, 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 performing 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 gas infrastructure. A new loan Came in effect on January 1st to protect the more fragile people such as the elderly, immigrants, those with disabilities, the rural for 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 and A session. I will now turn the call over to Javier, who will cover the most important topics to date.
Thank you, Pablo, and good morning to everyone. Today, we are presenting our 2021 Q1 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 Evos business in Spain in March 31. 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 22.1 percent of our total sales by the end of March 2021 versus the 18.2% year ago, continued to outperform the traditional business and gaining wave within our revenue mix. In this context, 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 and A and new products.
In this slide, we can see 2 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 a tough comparable base and the hard lockdowns in Europe and to a lesser extent in Latin. 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 31, we have completed the divestment of our ABOs business in Spain for an enterprise value of €67,000,000 This business, which has been growing successfully during the last years, We'll 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 76,000,000 growing 0.6% in euro terms On 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 Aboos 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 detailed 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 midsized businesses. Now 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-nineteen and the currency depreciation continue impacting the comparison versus last year, our sales reached €219,000,000 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 our remarkable 4.7 percent organic growth and an additional 1% growth drive from last year acquisitions. In addition, our new products Growing at double digit rates in local currency terms and amounted to €45,000,000 This figure represented a 20 0.3% of our total Latin American sales, a 2 10 basis point improvement versus the 18.2% posted a year ago. In Europe, our sales ended in €99,000,000 a 16% decrease versus last year, which was mainly explained by the severe compinements 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 ending €27,000,000 representing a 27.2% of our European sales, an increase of 9% versus last year figures. These figures still incorporate our Evos unit as the deconsolidation of the business has become effective in the Q2 of this year as we have previously discussed. Finally, Our sales in Asia Pacific improved by 5%, up to €27,000,000 on the back of our inorganic growth on a more benign exchange rate. Regardless these encouraging figures, I would like to emphasize that the current environment in the Australian market Remain 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, which 17.3% of the sales of the region.
I will now And you over to Javier, who will summarize the financials.
Thank you, Pablo. Starting with the top line, Total sales reached €345,000,000 16.8 percent less than a year ago. This is the combined effect for negative organic growth of minus 2.3% and a minus 16% coming from the currency depreciation on the hyperinflation accounting and that has been partially mitigated by an inorganic contribution of 1.5%. On the profitability side, our reported EBITA margin ended in €54,000,000 representing 15.8 percent over sales, An improvement of almost 4% and 3.10 basis points in both absolute and relative terms versus the figures posted a year ago. The underlying EBITA margin for the quarter, figure that excludes the capital gains derived from divestments, resulting in €34,000,000 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 In some of our countries and the currency headwinds. Below the EBITDA line, our financial results posted net expenses of EUR 2,000,000 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 Evos disposal. As a result, our net consolidated profit increased by 18.7 percent to €33,000,000 which represents a margin close to 10% over sales.
Regarding cash generation, Let me underline that our free cash flow reached EUR 40,000,000 by the end of March, almost doubling the figure posted a year ago. Cash conversion ratio remained stable at 80% and 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 and A caption ended in a positive figure of €19,000,000 and was the combination of cash outflows from deferred payments and proceeds received from the Evos disposal. Finally, the dividend and the treasury stock line Incorporate the payment of the 1st 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 amounted to EUR 629,000,000, A EUR 43,000,000 sequential reduction versus the figures reported in December and an €128,000,000 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 and 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-nineteen. 2nd, 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.
3rd, our financial discipline. Since the outbreak of the pandemic, we have deployed Several initiatives that allowed us to adjust our cost base, reserve our cash generation and protect our balance sheet. We keep controlling our cost Discretionary expenses, optimizing our CapEx and improving our DSO to maximize our cash flow generation and reduce our leverage. 4th, our strong commitment with digital transformation and sustainability. The world is changing very fast and becoming more complex every day.
So 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 we'll re allow future actions in this key area. To conclude, let me remark that Although 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 This is all on my side. Thank you all for the attention, And I will now be pleased to begin with the Q and A session.
Thank 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 3 questions, if I may. The first one, if you could give us More color on the new cash today agreement with Santander. So it's how it differs from your own approach and the previous on 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 Evos in transaction.
So Nelly, correct me if I'm wrong, but this is only for the Spanish business, so what is the reason to keep the rest of the business in cash? And last question is if you could give us an update on how the cost saving plan that you launched last year is
Good morning, Paco. We'll try to address the 3 questions 1 by 1. 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. So it adds to our existing own commercial force already in place. So in that front, There's an embedded fee for the commercial role that Banco Santander plays on that.
And And in terms of the exclusivity that you were asking for, yes, I mean Banco Santander is partnering with us on an exclusive basis for that. So they can They're only selling our solutions on that front. So we expect that that will really help us To accelerate the growth of our cash today business in Spain very significantly, so probably we'll be more than doubling the current Growth rates in the Spanish market. In relation to the EIBOS, yes, I confirm that the transaction is related to the Spanish business and in relation to the second part of the question, why we are still giving 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 and the agreement we have reached calls for mutual conversations in good faith to have the chance So that whenever it comes to place, but it is still at an initial stage and less mature than what the business was in Spain up to now. And in relation to the 3rd 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 30,000,000 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 and we are starting to see the benefits Of that, 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 Alvaro Lens of Alantra. Please ask your question.
Hi, thanks I wanted to know whether you could provide us some update on how the trains are going into Q2 After the weak performance, especially in Europe, due to the 3rd wave of the pandemic and whether you are seeing Some improvements there. And also if you could provide some update on Argentina and how is the cash repatriation going, whether you additional Good morning, Alvaro. 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 means that we have been impacted by the hard confinements that we've seen. But nevertheless, We have been experiencing a gradual improvement along the quarter. So we started on a more challenging environment in January and we have Improved since that beginning.
And 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 It's still tough because in Germany, the lockdowns have just been extended up to end of June. But as I said, I mean, 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. So all in all, despite it being tough, We expect it to be improving and better than what we've seen in the Q1.
And in relation to the Second question around Argentina. Nothing has changed there. So the cash repatriation policies that we've been implementing couple of years remain in place. We've made use of part of that also in Q1 this year on a regular basis. And as you already know, We just try to select the optimum windows of opportunity to try to Make the maximum profit out of that.
And as we mentioned several times already, we had In debt, did ourselves in local currency terms last year and rebutted cash in advance, and 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 Gonzalez 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 and what are your expectations there for the rest of the year? And also, well, Central Bank increased interest rates last month on higher inflation.
How do you think this will impact cash volumes? Have you seen an improvement? And my second question is about net proceeds from Airbus divestment. You said that there are a few opportunities That better fits your cash activity. I wonder if there are any big M and A deal we could expect for Or you just referred to the usual M and 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. So it's been the case already for Several quarters in a row and 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 driver, a natural driver for our business. And also the increase in the interest rates that you mentioned, which has increased by 75 basis points and probably will be increased by Similar amount very soon. So 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, and 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, and we'll see if there's any of those in the coming quarters. But keeping that aside, the underlying trend remains positive and the context From the macro perspective, you should be helping us in that front. And in relation to the second question on the Evos Transaction and the future M and A, we understand that the M and A will be mainly focused in new products Right now, and that's what we are really working on. So the pipeline is really populated. And given the current status of the transactions in place, We understand that we should be reaching the range of the €50,000,000 to €150,000,000 as we've always done since the time of the IPO.
But that will be composed of different transactions of a different nature in different No, we don't anticipate any major transaction taking place right now.
All right. Thank you.
Your next question comes from the line of Beatrice Rodriguez of GVC Gasco, 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? And the other one is, what does the other line include in the council. Thank you.
Good morning,
Beatriz. In relation to the new products, as always, I mean, 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. So the beginning of the year has been really strong and they are performing Very satisfactorily, so there's an acceleration of the organic growth of the new products, but the final figure is composed of both organic and inorganic. In relation to the others, as we've explained, I think, in previous quarters, I mean, there's component on the cutoff date for the cash certification systems, which calls for the majority of the evolution. But as we always said, We understand that the year on year impact in the cash flow from that gap should be broadly neutral.
Thank you.
Thank you. There are no further questions coming through on the line, sir. Please
continue. Okay. So 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.
And once again, thank you all for participating.