Ladies and gentlemen, thank you for standing by, and welcome to the Prosegur nine months 2021 results presentation. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star one on your telephone. I must advise you this conference is being recorded today. I would now like to hand over to your speaker today, Antonio de Cárcer, Head of Investor Relations. Please go ahead, Antonio.
Good afternoon, and welcome to Prosegur nine months 2021 results presentation. This presentation is expected to last around 30 minutes, followed by an open Q&A session. As customary, this webcast will be hosted by Antonio Rubio, Secretary General, Maite Rodríguez, CFO, and myself. Prior to starting, I would like to remind you that this presentation has been prerecorded, and that it will also be available for download in our corporate web page. I will now hand you over to our Secretary General, Antonio Rubio.
Good afternoon, everyone, and thank you for attending this presentation. The results we are releasing today are good. The evidence, we are gradually coming back to normal. Although the general conditions continue being slow in some geographies, we are pleased to state that all our business lines are presenting positive organic growth, both in accumulated and isolated quarter terms. This is a good indicator that the negative effects imposed by the pandemic are easing, and the path to full recovery is open in front of us.
However, full recuperation may still take some time, as the recovery pace is not even in all geographies. Nevertheless, we are optimistic regarding its continuous evolution. As you will see, all our business line are consistently catching up with this trend. Let me start this presentation with a quick overview of the main highlights of the period.
Over the last three months, we have continuously experienced a gradual improvement on the economic conditions in each of the countries we operate. As mentioned, this evolution has had different degrees of progress depending on the geography. Europe and the U.S. have been the fastest. In September, vaccination programs had covered near 60% of population in North America, more than 70% in Spain and Germany, and more than 80% in Portugal. This process has led to the wide reopening of all the international airport activity, as well as the coming back of large sport and social events. These good dynamics have been supported on our side by additional M&A performed in the U.S., on which I will give you some more color in a minute.
However, our figures remain below 2019 equivalents, as most of this coming back to normal has been done in late September, and summer season has still remained under limitations. On the other hand, Ibero-America is still deeply affected by the pandemic's adverse effects. Confinements and selected lockdowns remain present in Brazil and Argentina, and to some extent, in almost all geographies in the region. Our business in that region continues progressing, but there is still some delay in respect to Europe or U.S. that will hopefully decrease as vaccination advance. Moreover, during the past months, many of the government programs put in place to support population during the hardest times of the crisis have been ended, setting an end of the extra services we are carrying on some countries where our clients have not yet fully reactivated their activity.
AOA on its side also suffer an additional stagnation of the activity during the period. Australia has suffered the strongest peak of inflation during the past months that has forced to reinstate severe lockdowns and confinements, although it now seems the vaccination programs are developing very fast. However, in this unbalanced environment, we have managed to develop organic growth in all geographies and in all products. As you can see on the charts on this slide, it seems evident that the worst of the negative effect from COVID crisis is over, and we are gradually coming back to normal. Realizing pure organic growth on a year-on-year basis, Q3 in 2020 was the worst performing quarter of the past three years, mainly for cash, and with a delayed effect also on security.
As you can see, it seems evident that the situation is steadily reverting, and over the past six months, our business is rapidly coming back to shape. Still below 2019 figures, though, but obviously leaving the worst of the crisis behind us. New product sales have also increased during the pandemic, reporting an excellent 4.5% growth in compound terms during this past quarter, and accounting for more than 21% of cash revenues and 40% on security in the current year. Alarms had overcome the strong slowdown in sales imposed by the confinements.
While Prosegur Alarms in Portugal and LATAM is gradually returning to the figures before the pandemic in terms of creation of new clients, our joint venture with Telefónica, Movistar Prosegur Alarmas, is regularly increasing their sales, up to more than 37,000 new customers in the last three months. An excellent performance that we intend to accelerate even further with the recently announced commercial agreements signed with both Telefónica and Banco Santander to sell alarms in Colombia and Spain respectively. On the profitability side, we can appreciate the same positive tendency, although with some temporary lag in respect to revenues growth. As you can see on the upper right chart on the slide, our EBITDA margin on an isolated quarterly basis has been mostly affected during the first part of 2021, nearly a six-month gap with organic sales equivalents.
This brings evidence to the strong seasonal profile of our margins that, as it can be appreciated on the chart, has a very noticeable ascending curve, clearly illustrating how at the beginning of the year, our quarterly margins always suffer the effect of the increased cost base that will be gradually transferred to clients along the second half of the year. During the past two quarters, however, we have been experiencing some temporary delay in catching up with sales in some of our businesses. This can be explained principally by the excess of labor and productivity still present in LATAM, mainly in Brazil and Argentina, due to extraordinary labor protection regulations, in parallel with the time lag between the termination of certain government support programs and the subsequent reactivation of the client's activity.
This, together with negative FX impact not yet fully transferred to market through inflation, are the main explanation for this temporary delay on profitability recovery. Regarding inflation, I would like to refresh the information we stated in our Capital Markets Day about how inflationary environments can generate a positive effect in our main businesses. Increased inflation will call for higher volumes of cash in circulation in emerging markets, but also for faster velocity of cash movement in mature ones. Security will also benefit from this situation, as higher inflation usually calls for faster cost transferring to prices in an industry that is highly unionized and mostly driven by collective bargaining agreements.
The chart on the lower right side of the slide shows how since 2010, we have consistently been able to pass previous year inflation into prices, being the year 2020, due to COVID reasons, the one that has generated the strongest negative impact. As you can see, we are back ahead of it in 2021, and we hopefully do a full catch-up in the coming 12 months. To conclude with my introduction, let me now do a quick overview of the last M&A operation we have done in the U.S. market. As we advised in our capital markets day, we had a very high commitment on growing fast in the North American security market. Not only because it is the largest security market in the world, with a high presence of technology and interesting margins in traditional manned guarding.
Because there is currently a good opportunity for a third large global player to capture a significant market share due to the recent merger between two of the main three players that has left the market too over-concentrated. Our strategy in the U.S. is to propose to clients a specialized security model fully oriented to meet their industry-specific requirements and supported by the extensive use of remote monitoring technologies. In this regard, we have acquired the company Superior Security and Investigation, a security operator highly focused in the air transportation industry, with ample presence in the state of Oklahoma, Texas, and Missouri. SSI has reported consolidated revenues of EUR 7.7 million in 2020 and an EBIT margin close to 10%.
With this acquisition, we are gaining higher presence in the Mid-South region of the United States, while also increasing our penetration in the air transportation industry. This was all on my side for this introduction. I will be back with you at the end of this presentation to comment on our ESG initiatives and for my final remarks. I will now pass the presentation to our group's CFO, Maite Rodríguez, who will guide you through our financial statements for these nine months 2021 results. Thank you very much.
Thank you very much, Antonio, and welcome everyone to this presentation. I will start the financial review over the past nine months with a quick overview of the most relevant indicators of the period. First, I would like to remark the positive organic growth across all business lines and geographies, achieving at group level a 4% increase, which proves the recovery that our activity is experiencing. The only negative impact in our revenues comes from currency effect. It has also been remarkable the increase of our alarm installed base, which totals 668,000 active clients. Profitability has also improved over previous quarters as all business lines recover activity. EBITDA amounts to EUR 159 million, representing a 6.3% EBITDA margin.
It remains some basis points below the same period in 2020 because it is affected by some temporary negative effects deriving from the pandemic, mainly coming from the exceptional services delivered in some markets last year. Operating cash flow of EUR 151 million remains in line with the good cash generation of our group in the past years, increasing the EBITDA to cash conversion ratio up to 60%, boosted by the ongoing optimization of our DSO that has again been improved in this period, and a strict control of investment. Additionally, on the liquidity level of the company, we maintain a very solid firepower of up to EUR 1.3 billion. Finally, I would like to highlight that our credit rating has been recently confirmed by S&P as BBB stable.
Looking at our consolidated P&L, we observe a 3.2% reduction in sales over the same period in 2020, driven by the negative currency. In terms of organic growth, the group has experienced a positive impact up to 4%, as mentioned before. Regarding the 0.1% inorganic growth, it is the result of the increase coming from the acquisition of Redpagos in Uruguay and the latest acquisition in the USA, offset by the proportional part of the Spanish alarm business transferred to Telefónica in 2020. Coming back to the results by region, it is remarkable the positive organic growth in all of them, except Europe, which is affected negatively by the reconsolidation of the Spanish alarm business. If we isolate this effect, Europe has a positive growth close to 1%.
EBITDA has reached EUR 279 million, showing a 4.6% contraction, still affected by the tough situation suffered at the beginning of the year. Even so, the cost containment policies applied has driven to reach 11% margin at EBITDA level. The low EBITDA financial results reached net cost of EUR 20 million as a consequence of natural hedging strategies in economies with high devaluation, plus an efficient financial structure. Our effective tax rate for the period is the result of worse fiscal mix and higher corporate tax in several geographies. Looking now to group profitability more in detail by business, we see that security has continued increasing their margins compared to last year figures, achieving a 3.3% EBITDA margin versus 3.1% last year.
This is a success considering the high level of unproductive labor cases we still suffer in some countries whose regulation did not allow us to properly adapt our cost structure to reduce customer demand during the pandemic, mainly in South America. Cash, on its side, continues recovering its margins in parallel to the easing of restrictions. Although it still shows a slight reduction on its margins on the full nine-month period, its EBITDA has grown 40% on Q3 2021 over Q2, being this an excellent indicator of the steady and sequential improvement that the business is experiencing. Coming back to alarm business, the pre-SAC EBITDA margin of the alarm business, considering both MPA and Prosegur, has decreased to 45.5% due to the increased cost of the reactivation of the commercial activity affected by temporary layoffs last year.
Let's now briefly comment on our cash flow statement, debt structure, and balance sheet. When looking at the cash flow statement, the most remarkable aspect is the extraordinary 61% EBITDA to cash conversion ratio. As in the previous quarter, this metric exceeds the group historical average, isolating the one-offs occurred back in 2020, standing quite above of the last three pre-pandemic years, analyzing in detail the operating cash flow composition during the quarter activity and the increase of sales.
Having said that, it is worth mentioning the sustained improvement of DSO, not only versus previous quarter, but also in comparison with the same period of last year. Regarding provisions and other non-cash items, its variation is driven mainly by the non-current tax reversal, with a direct positive impact in 2020, and by the restructuring plans recognized in 2020 in P&L and mostly paid during 2021.
Regarding CapEx, its containment continues. Infrastructure CapEx keeps under control, representing 2% over sales. M&A-wise, the already mentioned security company acquisition in U.S. and other deferred payment settlement explain the cash out of the quarter in this regard. Lastly, when it comes to dividend, both Prosegur and Prosegur Cash completed the third out of four committed installment in July. Looking now at the group's financial position. At the end of September 2021, total net debt amounted to EUR 844 million, including deferred payment of EUR 99 million, treasury stock at market price of EUR 39 million, and Telefónica shares of EUR 201 million.
If we furthermore include additional IFRS 16 related debt of EUR 93 million, total net debt reaches EUR 937 million. Regarding net financial debt, its modest increase during the quarter is driven by dividend payments, M&A, and CapEx, which offset the positive operating cash flow generation. Leverage-wise, Prosegur keeps showing a moderate net debt to EBITDA ratio of 2.2 times, far below the current banking covenant of 3.5 times. Prosegur maintains its traditional financial discipline, which is in our DNA, guaranteeing a healthy and sound financial position.
The best evidence to prove our financial resilience is the recent confirmation of Prosegur's BBB stable rating by S&P, as mentioned before. As far as pure cost of debt, I would like to highlight the efficient financial expense management, which allows us to maintain a flat and very low average cost of corporate debt.
To conclude our financial information review, let's have a look at our consolidated balance sheet. In general, there haven't been any significant changes during the third quarter of 2021. Once again, the most remarkable aspect is the solid and stable balance sheet Prosegur historically shows. As always, our maturity profile is worth mentioning since more than 85% of our financial liabilities are considered of long-term nature. Liquidity is also one of our greatest strengths, with a firepower that currently covers more than 75% of the main indebtedness which will mature over the next 5 years. On top of that, the maturities of the major financial facilities are fairly separated along the years, avoiding the concentration of due date. In this regard, I'm proud to share with you the recent agreement signed last week between Prosegur and the European Investment Bank.
It involves a credit loan with a limit of EUR 57.5 million and a very competitive financial cost devoted to finance innovation and digitalization projects. This initiative reveals how firmly Prosegur is betting on innovation for the future. Treasury stock-wise, the share buyback program that is currently in place has, as a purpose, the acquisition of own shares that eventually will be amortized. This is all on my side for now. Thank you very much for your attention, and I will join you back again for the Q&A session. I will now hand the presentation over to our Head of Investor Relations, Antonio de Cárcer, who will provide you with more detailed information on the performance and each individual business line.
Thank you very much, Maite. We will now have a look on the breakdown of revenue structure and main profitability drivers of each activity, as well as some other relevant key performance indicators. Starting with cash, we see that sales in pure organic terms have grown by 4.4%. That's an additional 0.1% of inorganic nature. This increase comes from a generalized increase in volumes in most of the geographies, with the only exception of Australia, where there has been, in the last three months, an uptick of COVID cases that led to more confinements and lockdowns, although nowadays, vaccinations are progressing fast and the situation is easing quickly.
As you can see, the only negative impact on revenues comes from the translational currency effect that has been milder compared to previous quarters, but nevertheless still capable of generating a dilution of -5% in total revenues in euro terms. New products in Cash continue expanding their penetration in market, totaling now 21.3% of total revenues figure. This is a very good figure, considering that they have grown by 15% in respect to Q2 this same year, and a good proof of the interest of clients in these type of solutions, mainly the ones related to cash automation services or Cash Today, that has overcome the negative effects of the pandemic with barely noticeable impact. On the profitability side, EBITDA in the period has totaled EUR 121 million, with an EBITDA margin of 11.2%.
This implies a reduction of 40 basis points regarding same period in 2020, coming from a still present negative comparable base, worsened by a slower than estimated first half of the year and negative effects. Nevertheless, margins in cash are sequentially improving and coming back to shape. A good proof of this is the excellent 40% quarter-on-quarter improvement on profitability, being the EBITDA margin in Q3 12.9%, with a sustained improvement month-over-month. Moving now to security, we can also appreciate positive organic growth of 1.5%, plus also an additional 0.1% of inorganic nature coming from the acquisition performed in the U.S. past August. Currency has had a minor effect on security, as nearly 60% of security revenues come from hard currency geographies since the inclusion of the U.S.
Cost increase transferring to market has been successfully completed in Spain, U.S., Argentina, and in general terms, in most of the countries, except for Brazil. Nevertheless, the situation is gradually improving, mainly in Spain, where restrictions to capacity in socials and sports events have been banned since beginning of September. Similar is happening in U.S. regarding aviation activity. While in Iberoamerica, we are beginning to reduce the strong and productive labor cost we suffer from regulations that didn't allow us for a proper adjustment of capacity to reduce client demand. Likewise, in cash, new products continue expanding the penetration, and now they represent 40% of total sales. It is important to note that integrated security solutions is a combination of both traditional guarding and technology.
Thus, an increment in these type of products also drives an increment in guarding services, and therefore profitability increment coming from increased use of technology is less evident on global margins, although it's gradually being more noticed. Assuming that effect, we're happy to see our profitability in security continues growing, reaching a total of EUR 41 million in the period, with an EBITA margin of 3.3% versus 3.1% in 2020. An excellent result considering that job keeping aids put in place in the U.S. have been terminated, and there's still some delay on clients returning to volumes prior to the pandemic. Let's move now to alarms. Here, the main noticeable fact is the strong increment in clients that Movistar Prosegur Alarmas continues delivering month-over-month.
During the past nine months, MPA has grown its client base by 68,000 new connections, totaling close to 320,000 clients in Spain and accelerating its growth now with the addition of Banco Santander retail network to its commercial capabilities. Rest of the world client base has also grown, almost covering the gap of the increased churn suffered during the pandemic, mainly in small business clients due to lockdowns, and with a final client count that now sits barely 3,000 connections below where it was last year. With good perspectives to overcome this situation in the following months now the churn rate has come back to lower levels and sales have been resumed in most of the affected countries.
A good proof of this is the excellent 19.9% organic growth in revenues in this consolidated perimeter that is only reduced by the combination of the negative inorganic from the deconsolidation of the Spanish perimeter, including Prosegur Soluciones, and the negative effects present mainly in Argentina. Regarding ARPU, in Prosegur-operated alarms, it remains equal as last year, with no noticeable impact, despite the efforts made in the client retention policies. Only with a minor reduction in Movistar Prosegur Alarmas due to the aggressive market capture offering put in place to boost sales that will be compensated in a 12-month period as clients will gradually enter in the normalized monthly quotas without discounts. Profitability and cash flow generation-wise, we see that EBITDA pre-SAC in MPA has grown up to EUR 47 million due to all the newly generated clients.
While in Prosegur's side, it has dropped down to EUR 40 million, being this fact of pure comparable nature, as in Q1 2020, it was still consolidating the Spanish connections. Compound EBITDA pre-SAC margin of both MPA and Prosegur dilutes slightly to 45.5%, deriving from the increased operational costs coming from the reactivations of sales efforts and increased client base to cover, although they will normalize as these one-off costs are gradually absorbed by the business. Similar situation is appreciated in the cash flow generation that also bears the negative effect of the increased churn during the pandemic. To conclude this review of the independent business lines, let's now analyze the results reported by both AVOS and Cipher.
AVOS, our newly created business process outsourcing unit, has reported an excellent revenues growth in excess of 15%, reaching EUR 45 million when compared to same figures in previous year. Please note that for comparable purposes, we are extracting AVOS sales from Cash in 2020 and in the first three months of 2021, when the purchasing transaction was closed.
The total revenues figure of AVOS in isolated terms is EUR 29 million, corresponding to the last six months of present year. Similar happens to gross margin figures that reach EUR 13 million, of which EUR 8 million correspond to AVOS as an independent business in 2021. In full comparable terms, profitability in AVOS has grown by 20% in the period, while its gross margin has also expanded from 26.8% to 28%. An excellent result that anticipates a very promising evolution for this new business line.
Cipher, our cybersecurity specialist unit, has also delivered a near 3% organic growth, eroded in a similar percentage by negative currency effect as part of their revenues are generated in LATAM, and also boasting an excellent 5.2% increase in profitability at gross margin level. That was all on my side related to the evolution and performance of our principal business lines. I will now hand the presentation over to our Secretary General, Antonio Rubio, for his comments on ESG matters and final remarks.
Thank you very much, Antonio. Now, prior to my final remarks and conclusions, I would like to give you an update on our ESG initiatives. In Prosegur, we aim for a continuous improvement of our sustainability model in all aspects, and that means a permanent revision of our ESG policies to keep them in compliance with increasing regulation. In this regard, we have recently updated our sustainability policy to fully meet the requirements of recommendation number five of the Good Governance Code for listed companies issued by the Spanish regulator, the CNMV. Prosegur's sustainability policy is a code that established the general principles of our sustainable development strategy. It reinforced ESG as a relevant element in the company's corporate governance system.
As a result of this commitment, I am very proud to share with you the recent inclusion of our company within the AENOR Good Corporate Governance certification. As you may know, AENOR is an independent institution legally responsible of development and diffusion of technical standards in Spain, which contributes through a standardization and certification to improve products and services produced by companies. AENOR certificates are one of the most valued in the international ambit, since it has issued certificates in over 60 countries for the past 35 years. Therefore, AENOR is situated between the 10 most important certificate issuers in the world. Prosegur has been the first Spanish company to achieve a certification in good corporate governance. Not only this, we have been recognized with a A++ rating, being this the highest scoring that can be obtained in this certification.
This is an extraordinary milestone for us and a clear recognition of our transparency and good governance practices. Practices that will continue being improved above the highest demand, and that will maintain our company being recognized as an example in governance, social responsibility, and sustainability. To close this presentation, I would like to share with you my final remarks on this nine-month 2021 results presentation. We have delivered positive organic growth in all business lines and in all geographies. This is a clear indicator that although pandemic negative effects are still present, we are steadily catching up with the general economy recuperation. We believe this positive trend will accelerate during the next year as market conditions, especially in Iberoamérica, will show a better performance. We will take advantage of our rising macro indicators, such as inflation, in our benefit.
Profitability is also gaining momentum, although with a certain lag in respect to sales, but also with good perspectives. Security margins continue improving both on and accumulated and in a year-on-year basis. Cash is gradually coming back to normal as its profitability is sequentially improving month-over-month. Alarms has delivered an excellent growth in Spain, exceeding previous year new client addition in more than 36% and increasing its market penetration quarter-on-quarter, while the rest of the world is also catching up quickly with pre-pandemic levels. We will continue reinforcing this upward market trend with additional alliances, such as the ones recently signed with Banco Santander in Spain or Telefónica in Colombia.
Many opportunities are live in all business lines, focusing on new products as we strongly believe these are going to be the future expansion drivers of the group, being this proven by the good incremental results that have delivered sustaining growth all over the COVID crisis period. Cash flow generation in relative terms has been kept above the historical average for all the group. Our DSO is improving thanks to the digital transformation projects put in place in finance, while our liquidity profile continues to be extremely solid, and as so has recently been recognized by our renewal of the investment-grade credit rating awarded by S&P.
Finally, we're extremely proud of our rating on Good Corporate Governance by AENOR. This reinforce our commitment with the sustainability and makes willing to continue improving to maintain our reputation as one of the best companies in Spain.
That was all for today in this nine-month results presentation. Now, both our CFO, Maite Rodríguez, and I will be glad to attend all questions you may want to ask. Thank you very much.
Thank you. Ladies and gentlemen, we'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. This will only take few moments. Please note that in the interest of time and to facilitate access to this Q&A to all participants, we would encourage all persons interested in asking to place no more than two questions at a time. That will give an opportunity to all attendants to have their questions received.
If you wish to ask more than two questions, please press star one after your initial questions have been asked. If you wish to cancel your request, please press the hash key. Once again, it is star and one if you wish to ask a question.
Your first question is, from the line of Francisco Ruiz from Exane. Please go ahead.
Hello, good morning. I have a couple of questions or 3 questions, in fact. Well, the first one is if you could give an update on how you see salaries negotiation for next year and what could be the impact of the derogation of the labor law in Spain if it finally happen. The second one is if you could help me to understand the 20% organic growth in alarms as the number of alarms has declined and the ARPU has declined as well. I don't know if it's just an increase on the local in local currency RPUs. The last but not least, Maite, you have commented that the CapEx continues to be at very low levels.
You indicated something like around 2%-3%. What expectation for next year? Do you expect a rebound on CapEx, or do you expect that this figure will continue in the same levels? Thank you.
Good afternoon, Paco. Thank you very much for your questions. I'm mainly for the first one because it's an opportunity to once again explain how positive inflation is for our three businesses. First of all, for cash, because you are increasing the cash circulation and you're increasing the need of speed in this circulation. Second, in all our business because they are very intensive in terms of manpower because all of them are covered by collective bargaining agreements that are the same for all the industry and all the sector. It's an issue to increase the prices that is common for all our competitors, no?
Because we are working in high inflation environments, because we had an issue with inflation now in Europe, but we are working in high inflationary environments in the rest of our footprint. We have probably the best teams in passing through every year these increases in prices in cost to prices, usually with an improvement in margin. For us, it's a positive environment, and we consider that for us it's an opportunity, you know? Any change in the law in Spain is something common for the rest of the industry, and consequently, we consider that as an opportunity. About the performance in the output, you have to consider that in LATAM, the outputs dollarize.
It's part of the important parts of our business there that to maintain the output in terms of US dollar. About CapEx, Maite?
About CapEx, as you know, now we have like 2% infrastructure CapEx for this 2021 nine months. For the full year, we will maintain quite similar. We will have same figures or close to last year figures in relation to CapEx. For the coming year, even including our data transformation investment, we will also be around 3%. That is the normalized figure that we usually have.
Thank you. Once again, it is star and one for any questions. Your next request is from the line of Álvaro Lenze from Alantra Equities. Please go ahead.
Hi. Thanks for taking my questions. I wanted to know on the security business, we see a decline in margins compared to last year. I understand that you have less support from fiscal aid in the United States. Could you provide us some more information of how the level of activity is recovering and when should we expect activity to be back to normal to offset the lack of fiscal aid? My second question would be on the alarms business, especially in Spain. Of course, growth is being very impressive. I wanted to know whether competitors are reacting significantly to your commercial strategy. I don't know if your main competitor are lowering prices or something like that.
How is the partnership with Santander evolving, and whether it's expected to be rolled out to the full commercial network of Santander in the coming quarters? If you could provide some update there. Thanks.
Thank you, Álvaro. In relation with the security business, during this quarter, we have suffered an increase in margins. We are recovering volumes, and the month of September has been a very important month because at least in Spain and USA, we are recovering volumes quicker, mainly because the restrictions are less coming from the big events like football and airport and tourism is also increasing. We should see this recovery should maintain during this 4Q that is coming. If we just focus on USA, we are very focused in volumes. We are increasing our indirect cost mainly because we wanted to win more market share.
For next year, margins might not increase so much, but volumes at least should do it in a very significant way. In relation to the second question, Antonio?
About alarms, Álvaro, we are very happy about the performance of our joint venture. We have accelerated every month the rhythm of new acquisitions. In some of the months this summer, we have been the first company in Spain in numbers of new connection in some point in time. Obviously, our competitor are reacting, but we have to remember that it's a push market, so we are increasing the number of families and homes in Spain with a domestic alarm. The performance of the market is normal in this environment.
We remain very optimistic about the rhythm of growth, and we don't see any reason for not maintaining in the next years the same rhythm of growth that we have had in the last year and a half, considering that that has been a COVID impacted period. About the collaboration with Santander, it's performing better than our initial expectation, both in the bank and in our side. We consider that we have an additional very positive effect in the growth in Spain.
Okay. A follow-up, if I may. So would you say that your growth in alarms comes mainly from homes that did not have an alarm previously or are you taking market share from your competitors? Secondly, whether you could roll out these kind of agreements both with Santander and Telefónica to other countries, maybe in LatAm, because you have a complementary footprint.
Most of the growth is coming from new homes with an alarm. Because it's a push market and you don't have the need of stealing customers to any competitors. When I say most, probably more than 80% is coming from new acquisitions. The alliance is clearly the nicest formula for growing, you know. Banks, insurance companies, and telcos are the best allies and we are working in all LatAm looking for alliances and of course with Telefónica who are our preference and ally.
Perfect. Thank you very much.
Thank you. Your next question is from the line of Enrique Yáguez of Bestinver Securities. Please go ahead.
Good morning, Jordi, and thank you for taking my questions. I have some follow-up questions about the alarm businesses. I don't know if you could provide some timeframe about how long is expected to last the current marketing campaign in Spain that is giving you so good results in terms of the targets. I don't know if there is a specific midterm target in terms of subscribers that you would like to achieve before relaxing it, potentially. Secondly, I don't know if you foresee the need to implement special commercial campaigns in LATAM and in Portugal to recover the subscriber that you lose during the last one and a half year.
Finally, on digital transformation, if you could provide some quantification about the efforts made in this nine months, and how much do you expect to close in at the end of the year? Thank you very much.
Good afternoon, Enrique. About the marketing strategy in Spain is, I think, very opportunistic, you know. Marketing is the main professional profile of the people leading the joint venture. It's depending of the scenarios, and in many cases, city by city, you know. You see the TV and radio campaigns, but there are many local ones, you know, and it's very opportunistic. Depending also about the strategy of the rest of the market. What is clear is that this is a push market. The Spanish market is under-penetrated with less than 10% of households with an alarm, and 28% of houses in the U.S., for example, with an alarm.
There's an opportunity and more players pushing is an opportunity for growing the market. The situation in LATAM is a little bit different. You know that the pandemic had demonstrated their worst effects during the first half of this year, you know. Families are suffering a lot, and businesses also due to the confinement and lockdown. But clearly the best practices about alliances and commercial strategy that Movistar Prosegur Alarmas is implementing in Spain are can be followed in the rest of the areas because we are sharing best practices in technology and also in marketing. Maite, about the digital transformation?
Yes. In relation to the digital transformation, as we mentioned in our capital markets day, we are going to invest around EUR 90 million for the next three years. In CapEx now you can observe, we booked quite like around EUR 12 million. In our P&L you have like EUR 9 million more than last year.
Okay. Thank you very much.
Once again it is star and one for other question and your next question is from the line of Brian Ruttenbur of Imperial Capital. Please go ahead.
Yes. Thank you very much. Just a question about U.S. expansion plans. You made one acquisition in Oklahoma, relatively small. Can you talk about the competition right now for the M&A market in the U.S. and how multiples are trending? Is there a lot of competition right now and are multiples trending up or down given the environment?
Hi, Brian. Thank you very much for the question. The M&A market in the U.S. in this moment is a nightmare because really multiples are really high, you know. We remain with our same strategy, very conservative. When we acquire company, we are paying multiples that we can create value very soon after the acquisition, you know. For us it's key to buy niche companies with a very good management, and usually buying the companies with a commitment that the managers remain with us some years. We sign earn-out structure for maintaining them with us, you know. You are absolutely right. The market is very complicated. We have a local team of M&A working there for finding more opportunities.
Despite this multiple and remaining in our conservative and very proven strategy of not paying too much, you will see in the following months more acquisitions in the U.S.
Great. Just as a follow-up, are multiples higher than they were a year ago, two years ago? Can you give me some kind of, you know, 20% higher? Are they in line with what they've historically been? Give me some kind of data point.
It depends, Brian, on the sectors they were working for, no? That there are some companies that have suffered more, and in this area, the multiples are lower. In companies devoted to sector more technology, they remain growing, including with the statistical high heights that we have seen in the last year or so. Really, we are working today in historical heights in terms of multiple in the U.S.
Great. Thank you very much.
Thank you. We have one more question that's from Manuel Lorente from Santander. Please go ahead.
Hi. Good morning. My first question is in the inflation opportunity issue. We saw a massive decoupling between the nominal GDP growth in LATAM and Prosegur's revenues in the area, and you, as you have personally highlighted at some point on your presentation, right? To some extent, we were expecting, let's say, some faster bounce back this year, right? Which has not been the case. The situation is gradually improving, but still you have plenty of catch up to do in terms of correlation with the GDP in LATAM.
Probably my question here is regarding the speed and the magnitude of this catch up. Is it something that we continue to see gradually and sequentially a slow improvement or at some point we should see a bigger jump?
Good afternoon, Manuel. Thank you for the question. Obviously the situation with COVID is very exceptional, no? We are very proud of our portfolio of customer. We have a long-term relationship of ten of years with them, and in some cases, we need to be very comprehensive about their situation. There are many reasons explainable about the delay that we have suffered this year in all this process. Usually in the countries where this delay can be more important, for example, Brazil, there is a retrospective effect when you finally sign the increase in prices, you know? This is the reason because we remain optimistic because it's true that mainly in this third quarter, we see the seasonal impact of the delay in passing through prices.
This is not due because the inflation environment is very tough and more difficult than any other year to pass through a cost increase. It's because the COVID situation and the time that are taking this negotiation. We are not worried about recovering the margins due to this inflation. On the contrary, this is one of the reason of our optimism about the rest of the year and the next year. In our opinion is that if delay, more delay of acceleration in the process of catching up, we are foreseen acceleration probably in the following months.
Okay. Regarding your specific issues in Brazil on this passing through, can you give us some more color about this?
You know that Brazil is in a special environment. Now the labor market changes and you know that in Brazil we are applying more than 100 different collective bargaining agreements due to the number of states and different activities we perform. This is the reason because usually in some customer banks, retailers are preferring until the moment we sign the last collective bargaining agreement to negotiate the whole country in a single moment. This is the main reason for the delay. As I have said in Brazil, the increase is retrospective to the beginning of the year. This is the reason because we consider in this quarter and at the beginning of the following year, we will catch up the gap.
Great. Probably my last question on alarms. I don't really understand. I'm sorry, because probably it's about my lack of understanding of the business. Why in a context of higher subscribers in this year, you have lower subscriber acquisition cost year to date, EUR 22 million versus EUR 25 million last year?
Manuel, thank you very much for this question because it's in the very core of the beauty or one of the beauties of this business. We have more volume, so we can dilute this cost, and at the same time, we are incorporating more financing in the cost of acquisition. You can dilute your fixed cost of your commercial force, and we are incorporating more financing. This is the main reasons. In alarm business, as you are growing, your margin has to improve because you are diluting cost. This is the reason because our guidance is for mainly in Spain and a EBITDA pre-SAC improvement for the following years, even in this environment of accelerated growth.
Okay. Thank you.
Thank you. That will conclude today's Q&A session. I would now like to turn the call back to Mr. Antonio Rubio for any additional or closing remarks.
Once again, thank you very much for attending this presentation. This nine months, usually, mainly this year, are affected for the seasonal effect, in all the process of passing through cost to prices. But nevertheless, we remain optimistic about the rest of the year. This is the reason because we can maintain all the guidances we provided in our Capital Markets Day some months ago. Once again, you have our IR department at your disposition. Thank you very much for attending the presentation and have a nice weekend. Thank you.
That will conclude today's conference. Thank you for participation. Ladies and gentlemen, you may now disconnect.