Good day, and thank you for standing by. Welcome to the Prosegur 2024 results presentation. 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, one, and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star, one, and one again. Please be advised that today's conference is being recorded. Now, I'd like to hand the conference over to your first speaker today, Juan Ignacio Galleano. Please go ahead.
Good afternoon, and welcome to Prosegur 2024 results presentation webcast. Before we start, I would like to remind you that this presentation has been pre-recorded and that it will be available on our corporate website. I will now hand you over to our CFO, Maite Rodríguez.
Good afternoon, and thank you all for your presence. We are once again proud to present very strong results, both from a financial and operational perspective. We proved to be highly resilient and efficient in overcoming certain headwinds such as the political and economic turmoil in Argentina, especially during the first half of the year, among others. The good results achieved not only validate the decisions that we made, but also lead us to be highly optimistic about the future. As we have already stated to many of you, the upcoming year should be marked by significant leverage as we continue to generate strong cash flows. Now, with all this in mind, let's deep dive into the most significant milestones of the period.
Our top line continued to be fully driven by organic growth and reached an all-time high of EUR 4.9 billion, marking an impressive 13.9% increase when compared to the same period of last year. As clear evidence on the sustainability of the figure, we should highlight that all geographic regions grew by over 7%, making the growth well-balanced. As for profitability, EBITDA stood at EUR 328 million, 17% higher year-over-year, mainly driven by our security business and, to a lesser extent, our cash business. Indeed, as we shall later see, our security business continued to do a great job this year, marking a 3.3% margin throughout the year and a 4.1% in the fourth quarter. Thanks to efficient working capital management and keeping infrastructure capex under control, the higher achieved profitability redounded in higher cash generation.
Indeed, cash flow from operations reached EUR 313 million, while free cash flow stood at EUR 132 million, EUR 20 million, or 16% higher year-over-year. As always, our main premise is to continue growing but always being mindful of leverage. Overall, net debt stands at 2.3 times relative to EBITDA, while it's not only very well-structured in the long run but also very cheap. As it has been the case for many years now, innovation is at the top of our priorities, as we know for a fact that it paves the way for a more diversified and, hence, sustainable growth. In this line, transformation products in our cash business continue to gain more relevance and exceed 32% of total sales, continuing its upward trend. Let's now turn to slide two, where I would like to deep dive into our sales figure.
As said, total sales during 2024 reached EUR 4.9 billion, 13.9% higher year-over-year. Discounting for the effect, almost the entire growth was organic, evidencing our strict policy when it comes to passing through inflation to prices. At the same time, volumes continued to grow both in our most traditional businesses and, most importantly, in our transformation products. As for geographic sales diversification, it should be noted that excluding the hyperinflation effect, it improved as Latin losses shared against Europe and Rome. This is well explained by the higher relative weight of U.S. and Asia-Pacific in our security and cash business, respectively. It is another edge to assess the sustainability of operations going forward.
I would like to stress once again, before we move on to our next slide, the solid growth in all of our different economic regions, with increases ranging from 7%-20% in EUR year-over-year. Let's now move on to review profitability. On a full-year basis, total EBITDA was EUR 328 million, marking a strong 17% increase compared to the same period of last year. Even though part of the increase is due to the disparate impact of the hyperinflation accounting, the truth is that operational performance was enhanced, further contributing to the year-on-year growth. Our cash business performed well on a full-year basis, with EBITDA increasing almost 14% and margins gaining 20 basis points.
It's worth highlighting that this growth was achieved despite certain headwinds that impacted the business, such as the strong economic recession in Argentina, particularly during the first half of the year, the labor strike that we faced in Germany, the setup cost and investment deployed in our forex business, and finally, the restructuring cost of the Australian operation. The good news here is that all these factors were temporary in nature and should be gone for 2025, pointing to a strong year ahead. Indeed, we already reached a reasonable agreement in Germany. Macroeconomic performance in Argentina indicates that we should expect a strong recovery. Investment in our forex business has now been reduced as it's time to consolidate.
In our security business, the positive combination of higher selling volumes, together with the agile pass-through from inflation to prices and enhancements at cost structure level, were responsible for the strong performance. At the same time, the higher share of our U.S. operations further contributed to EBITDA generation. Our alarm business presented solid results with service margins increasing year-over-year, driving the growth of recurring cash flow. As we will see, the performance of every relevant indicator in alarms moved in the right direction, pointing to an increase in value per customer. This is the case for both MPA, our operation in Spain, and for Prosegur alarms in the rest of the world. Turning now to our P&L, it can be seen that as you go down the different lines, every and each one of them increased by almost 20%.
This is a good testament to enhanced operational performance throughout the year. The growth in depreciation expenses and financial results should be further explained. The former increased 25% and seems to be quite high, given that deployed Capex was in line to previous years. The reason behind such a growth lies in the hyperinflation accounting, as the assets, which are the base for future depreciation expenses, should be increased along with inflation. Needless to say, this effect will fade away as inflation progressively slows down. Moving now to financial results, the increase is once again mainly explained by the hyperinflation effect.
Indeed, as already explained in past webcasts, as a result of the capitalization of intercompany debts in Argentina to reduce the financial impact of last year's depreciation, coupled with the genuine cash generation of our security business, our net monetary position in the country shifted from negative, more liabilities than assets, to positive. As a result, the accounting impact of applying IAS 29 is that of a negative result. It is very important to highlight the accounting non-cash nature of the impact. As a matter of fact, financial results with direct impact in cash generation went down by 47%, mainly driven by the reduction in the dividend upstreaming cost. Finally, our fiscal rate went down by over 100 basis points, further contributing to the increase in net profit, which, together with higher EBIT generation, explains the nearly 24% increase in net income. Let's now turn to cash generation.
All the way down to net cash flow, there are four lines that present significant differences compared to last year: provisions and other non-cash items, investment in working capital, others, and dividend payments. Before explaining them individually, I would first like to point to the 16% growth in free cash flow compared to last year. Evidently, generating a good amount of cash is a necessary condition to the leverage, which is, as you all know, our goal for the next couple of years. At the same time, CapEx is under control, as it can be seen. Starting with provisions and other non-cash items, the EUR 141 million reduction is entirely explained by the hyperinflation impact coupled with two additional VAT payments in 2024 due to calendar effect. It's worth to highlight that we won't have any impact, neither positive nor negative, in this regard next year.
Moving on to working capital requirements, the reduction has multiple reasons. To start with, lower inflation in Argentina translates into lower working capital investment, particularly in our Security Business. At the same time, due to active treasury management, we were able to reduce DSO in one day. The others line register a EUR 38 million reduction year-over-year. There are two things to consider here. To begin with, the 2023 figure was negatively impacted by the change in the consolidation perimeter of the Australian operation. Also, we did not purchase any stock during 2024, thus reducing the cash outflow in this particular line. Lastly, the difference in dividend payments has to do with that by the end of 2022, part of the 2023 dividend was advanced, reason why last year dividends paid were artificially low. Let's now turn to the next slide to discuss the company's financial position.
Net financial debt slightly increased year-over-year, reaching EUR 1.26 billion, resulting in a total net debt-to-EBITDA ratio of 2.3 times versus 2.6 times in December 2023. I would like to remember all that the achieved ratio is well below the goal we set at the beginning of the year. It's worth highlighting that both the terms and the structure of our debt are very healthy, with an average cost at 2.5% and 68% at fixed rate and long-term in nature. As a significant financial milestone, we would like to highlight that Prosegur has strengthened its firepower and liquidity by refinancing syndicated credit facilities with a limit of EUR 500 million, including EUR 300 million in cash and EUR 200 million for the group. The maturity has been extended from February 2026 to February 2030, with a two-year extension option.
Currently, both credits are almost drawn, and this exercise reinforces the firepower and confirms the group's solvency and liquidity with the support of our main relationship banks. Let's now turn to slide nine. By the end of 2024, our Board of Directors approved the ESG master plan for the upcoming three years, which reaffirms the strong commitment of Prosegur in this matter. This plan consists in a nutshell in 12 strategic lines that guide the company's actions. For the eight strategic initiatives, which main purpose is to reinforce Prosegur's commitment, include specific objectives and defined responsibilities. At the same time, the above-mentioned initiatives were further subclassified in concrete and specific actions. For instance, some of the quantitative objectives that were set in this master plan regarding our environmental commitment include reduction of emissions of Scope One and Scope Two, and an increase in green energy consumption.
For environmental preservation, quantitative objectives have been established for free transformation and for increasing the supply of new products that generate fewer emissions. Finally, for the sustainable management of resources and waste, targets have been set for the use of recycled plastic and paper, and a reduction in water consumption. That's all from me for now. I will now turn the presentation over to our Head of Investor Relations, Juan Ignacio Galleano, who will give you more detailed information on the development of the specific business areas.
Thank you very much, Maite. Let's now have a look at the results of each business line covering the main performance indicators and the most relevant aspects of the period. Starting with our Cash Business, I would like to reinforce the 18% organic growth that we achieved during 2024.
This not only shows the agile commercial response to inflation, but also that volume growth remains high at very healthy levels. The depreciation of both the Argentine peso and the Brazilian real resulted in a slight reduction in total sales. As already pointed out, Latin and APAC regions continue to show strong growth rates hand in hand with volumes. When it comes to profitability, the ongoing enhancements and operating efficiencies allowed us to overcome some difficulties that we already explained, resulting in a 14% and 20 basis points increase in EBITDA and margins, respectively. The achieved results in P&L were maintained at a cash flow level with a 2.2% increase in operating cash flow thanks to high-efficiency treasury management. These positive results are reinforced by the fact that diversification continues its upward trend. Indeed, new products are gaining more relevance, exceeding 32% of total sales.
We are certainly benefiting from all CapEx deployed in both cash today and forex businesses. Needless to say, increasing the percentage in the context of higher sales deserves even more credit. Let's move now to our Security Business, which continued to be the major highlight during the fourth quarter. Total revenues reached, on a full-year basis, EUR 2.5 billion, with the organic share reaching a remarkable 19%. This is mainly driven by our volume-based strategy that leads to operating leverage, our capacity to pass through inflation to prices, and the outstanding performance of the operation in the U.S. All the above, coupled with enhanced efficiencies and operating leverage, resulted in total EBITDA reaching EUR 82 million, 17% higher compared to the same period of last year. This is by every means impressive, considering the volume-led nature of the business.
Margins, for their part, continue to increase, reaching 3.26% during 2024 and 4.1% in the fourth quarter. Evidently, we are ripping off the benefits of our five-pillar strategy that can be easily summarized as follows. First, a strict discipline in passing through inflation to prices. Second, a thorough control of absenteeism. Third, operational leverage thanks to higher sales volume. Fourth, a controlled customer portfolio turnover. And finally, a lean operational structure. Operating cash flow resulting in EUR 17 million, marking a 32% reduction compared to last year. This decrease followed a deliberate strategy of increasing sales during the last quarter, as we profited from very good opportunities, capturing highly attractive margins. Evidently, this impacted working capital requirements, which fully explained the drop in operating cash flow. Let's now turn to the alarm business, where, once again, we delivered outstanding results.
As it can be seen, every relevant KPI did better when compared to the same period of last year. Our client base totaled EUR 962,000, marking a 10.5% increase year-over-year. As we add more net clients compared to last year, we are strictly monitoring the quality so that we can achieve a sustainable growth without implying significant increases in churn. Indeed, as it can be seen, churn rate in MPA went down by an astonishing 2.3%, while the increase in Procedure Alarms has to do specifically with one big client in Chile, and it is definitely not a widespread issue. Both ARPU and service margin increased in both businesses, while acquisition costs either remained the same or were reduced, leading to an increase in both customer value and recurring cash flow, as we can see in the next slide.
It's clear that the combination of higher service margin and good performance at a churn rate level implies a significant increase in recurring cash flow. That is, the resulting cash after the clients that churn are fully reacquired. In the charts above, what we are showing is the 12-month rolling recurring cash flow of both Prosegur Alarms and MPA. The one at the right side clearly indicates that the generating recurring cash flow capacity of the two businesses combined for Prosegur stands at EUR 72 million, by the way, 48% higher year-over-year. As we have been suggesting for quite a while now, it seems that the market is not considering this when calculating the company's fair value, a reason why we see this as a natural catalyst. This concludes our analysis of the performance of each business line for the full year. Thank you for your attention.
I will now hand the microphone back to our CFO, Maite Rodríguez, for her closing remarks.
Thank you very much, Juan Ignacio. Let me now share with you my closing thoughts on the most relevant conclusions of this results presentation. Overall, as we have seen during the presentation, all businesses reported enhanced operating efficiencies and strong results. On a consolidated basis, total sales increased almost 14%. Even more important is the fact that this increase was widespread across all geographies and further enhancing both geographic and product diversification, thus making the entire operation more sustainable. In our cash business, total EBITDA and EBITA margin increased compared to the previous year despite facing important challenges, proving not only the resilience of the business but also its sustainability based on geographic diversification. Moving to our security business, we presented strong results with EBITDA increasing 17% year-over-year.
This implies a 3.3% margin, confirming the outstanding trend over the past two years. We expect to continue with this positive trend in the upcoming years as EBITDA margins should slightly increase year-over-year. Our alarm business presented solid results with increased service margins and cash generation. This is clearly captured by our recurring cash flow, which amounted to EUR 72 million, implying a 48% increase year-over-year, pointing to a strong cash generation. All this growth was achieved as we continue to be mindful of our leverage position. We are confident that our leverage ratio will continue to fall during 2025, as we will both not only reduce net debt at absolute level, but also EBITDA should continue to increase. At the same time, the good structure and low cost of our financial debt should not be overlooked to properly assess our financial position.
The recent refinancing of our syndicated credit facilities reaffirms our solid position on this matter. Lastly, I would like to reinforce Prosegur's commitment to ESG principles as the backbone for every corporate and operational decision. This was all on my side for this results presentation. I would like to thank you all once again, and we are now open for Q&A.
Thank you. If you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. If you would like to ask a question, please press star one and one on your keypad and wait for your name to be announced. To cancel that question, you can press star one and one again. Thank you.
We'll now take our first question. The first question is from the line of Álvaro Bernal from Alantra. Please go ahead. Álvaro Bernal from Alantra, your line is open. Please go ahead and read the question.
Sorry, I was on mute. Just regarding the other businesses, ABBO, Cypher, and Corporate, if you could shed some more light on the evolution of these businesses. I've seen that Corporate has yielded a positive EBITDA when normally it sits closer to - 20 or even more. And in Cypher, the EBITDA has also been more negative this year. If you can just shed some light on how this will evolve going forward to 2025 and beyond. Thank you.
Thank you, Álvaro, for your question.
In relation to the difference coming from that positive to that negative figure, it's mainly because we have increased the royalties coming from the trademark due to a new agreement with the Spanish tax authorities. We also have more revenue coming from a few building sellings, mainly in Australia. Remember, last year, we also had some few severance payments from DGA, so that's why 2024 figures have a lower amount. Coming to the ABBO and Cypher businesses, ABBO is both of them are on the budget that we estimate for this year. We have big investments in Cypher. As you know, we have a very good technology, and we are investing in improving even more that technology so that we can have a market where we can grow and complete the budget that we have also for 2025. ABBO is also doing well.
The last quarter has been a very, they really have a very good result. I don't know if you know, but we changed the management during the year. Now, with this new management, we are really doing very good sales and also good margins. When you add everything, that's why we have those positive results.
Okay. Thank you very much. Second question regarding leverage. You mentioned in the presentation you're aiming to reduce the net debt in absolute terms. If you could shed some light on where you could see it by the end of next year, either in terms of leverage or absolute terms, if you have a target in mind that you aim to achieve. Thank you.
In terms of the debt, as you know, now we are in 2.3 times. In 2023, we were in 2.6.
We should be better in EBITDA, in net EBITDA. The range more or less should be between 2 and 2.2 times. It will depend also. That is why I am not going to tell you in absolute terms exactly the figure that I have in mind, because it will depend on the security growth. As you know, the security growth is going to eat a little bit the working capital. What I think is that in the 2025 figures that I have for the budget, it will be around 2, 2.1, something like that. I do not know if finally we will arrive in 2.2 just because of the growth of security, because I think that they even can grow more than what we have in the budget. I think that they are going to do an amazing year this 2025.
Just for your calculations, just put, yeah, like 2.1, 2.2, 2.0, something like that, between 2.0 and 2.2.
Okay. Understood. Thank you very much.
Thank you. As a reminder, if you would like to ask a question, you can press star one and one on your telephone and wait for your name to be announced. That is star one and one if there are any further questions. There are no further questions at the moment, so I will hand back to the speakers for any closing comments. Speakers, I am not sure if you are on mute. Please go ahead if you would like to close the call.
Oh, thank you very much for attending this presentation. If you need further information, please contact our investor relations department, who is open to help you at any time. Have a nice day. Thank you. This concludes today's conference.
Thank you for participating, and you may now disconnect.