• Revenue: 2,090 million, a 12.3% increase over last year.
• Earnings Per Share (EPS): $0.06, a 45.1% increase from $0.0413 in 2023.
• EBITDA: 383 million, a 17.5% improvement over 2023.
• EBITDA Margin: 12% of sales, a 20 basis points improvement over 2023.
• Net Profit: 91 million, a 44.9% increase on 2023.
• Free Cash Flow: 148 million, a 24% improvement over 2023.
• Net Debt: 886 million, an improvement of 12 million from the previous quarter.
• Net Debt to EBITDA Ratio: 2.3 times, within comfort levels.
• Transformation Products Sales: 673 million, a 19% increase over 2023.
• Latin America Sales: 1,294 million, a 15% increase over 2023.
• Europe Sales: 653 million, a 7% increase over 2023.
• Asia Pacific Sales: 143 million, a 15% improvement over 2023.
• Shareholder Compensation: 8 million share buyback plan and proposed dividend increase to 63 million.

• Warning! GuruFocus has detected 8 Warning Signs with XMAD:CASH.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Prosegur Cash SA (XMAD:CASH) achieved a new milestone in sales, surpassing 2 billion, with a 12.3% increase over the previous year.
• Earnings per share grew impressively by over 40%, reaching $0.06 per share.
• The company generated 148 million in free cash flow, a 24% improvement over 2023, enabling a reduction in net debt.
• Transformation products accounted for 32.2% of total sales, growing by 18.8% to 673 million.
• Prosegur Cash SA (XMAD:CASH) improved its ESG ratings, with significant reductions in CO2 emissions and increased use of recycled materials.

Negative Points

• The company faced challenges such as a strike in Germany and restructuring in Australia, impacting profitability.
• Despite growth, the EBITDA margin improvement was modest, with a 20 basis points increase over 2023.
• Foreign exchange impacts, although reduced, still negatively affected sales by 6.2%.
• Margins in Latin America, while improving, remain below historical levels of 20-21%.
• The Forex business required significant investment, impacting short-term profitability, with expected returns in the coming years.

Q & A Highlights

Q: Can you provide insights into the 18% organic growth achieved in 2024, specifically the contributions from pricing and volumes, and any regional insights? A: The growth was driven by a mix of approximately two-thirds volume and one-third pricing. Looking forward to 2025, we anticipate continued growth driven by a strong core business aligned with GDP growth and significant growth in new products.

Q: Latin America's margins were 17% in 2024, which is lower than the 20-21% seen in previous years. How do you see these margins evolving? A: We expect margins to improve in the coming years, aiming to reach 21%. The change in country mix has impacted margins, but we anticipate improvements across most markets.

Q: What are your long-term expectations for margins in the Asia Pacific region, given the recent positive developments? A: This year marked a milestone with positive margins. In the short term, we expect margins to be midway between Europe and Latin America, with strong sales and EBITDA margin improvements anticipated.

Q: With strong cash flow generation, what is your policy on the use of cash? Will you focus on debt reduction or return to acquisitions? A: Our short-term focus is on reducing debt levels. We do not foresee significant acquisitions in the core business, as we have built strong capabilities in Forex and Corban. We aim to balance debt reduction with shareholder returns.

Q: Can you elaborate on the expected profitability improvements and the business areas driving this? Also, what are your margin expectations for the next three years? A: We expect improvements in the Forex and German markets, with profitability driven by these areas. Over the next three years, margins are expected to increase, aiming closer to 13%.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.