Prosegur Cash, S.A. (PQN.SG) Q2 FY2025 Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Prosegur Cash Q2 2025 Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Miguel Bandrés, Head of IR. Please go ahead.

Good morning to everyone, and thank you for joining today. I would like to welcome you all to our 2025 Q2 results presentation that will be carried out by our CFO, Javier Hergueta and myself. The presentation will take around 30 minutes, during which we'll review key developments affecting our business and their influencing our performance. We'll after move on to review our key financials, followed by our performance by region and our main transformation-related achievements. Right after, we'll update on our ESG efforts, and we'll end up with some conclusions. After we will open a Q&A session. Should we not get to respond to everything today. We'll get back on any open topics on an individual basis. I want to again thank you all for attending. I remind you that this presentation has been prerecorded and is available via webcast on our corporate web page at www.prosegurcash.com. Before handing over to Javier, I would like to share some interesting news regarding cash in the world. The core interesting aspects such as a major concern on the use of the UPI platform in India, the finance Germans have on protecting their privacy and urged by China to assure cash acceptance where the preference American consumers have for cash. These aspects covered by the mentioned article show many of the unique attributes of cash that are simply not replicable and only stress its vibrancy and relevance. In the first piece of news, we can read from Indian newspaper at the economic times, one of the most important in the country, about an increasing concern over the use of UPI in India, as the government has changed its tax policy on the platform. letting on payments to retailers has provoked small merchants to prefer taking payments in cash rather than using UPI up to the point that in many shops, no UPI-only cash sign boards have been placed. Merchants and consumers are reluctant to be increasingly taxed as well as to further do their privacy. Next, we can read in cash matters that Germans give an ever interesting importance to protecting their privacy. Along these lines, there has been a study carried out by the international foreign exchange Association that found out that 85% of people in Germany who use cash do so in order to protect the privacy. In fact, this topic is very linked to the prior year we've just reviewed. The low level of defense that digital payment methods offer make cash more and more relevant and more appreciated by consumers since it is by far the safest means when it comes as well to assuring privacy. Not only a theft, but the use of personal data is becoming more and more concerned as on one side, people are aware of the many existing leaks systems have and the fact that it's been used for purposes, the owner is very often not aware or for which has not given conscious authorization too. In the third piece of news, we can read from Forbes that China is placing an important role to cash. It's taken a different step towards assuring that financial inclusion is present, real and complete in the Asian powerhouse. In order to achieve it, it has started to find retailers that react payments in cash. This move makes it ever more clear that only cash can assure a full financial inclusion. We must underline that China is not the only place with such a regulation, but it is as well important to underline that in many other countries where such an obligation exists, authorities must assure it's properly observed and applied. Lastly, we can read this in study published by the Federal Reserve Bank of San Francisco, where it says that consumers choose to use cash in half of all the transactions they carry out with a value under $50. This makes cast a primary mean of payment in the United States. Here, we can see that depending on the amount being spent, consumers tend to prefer one or other mean of payment. It's very important that they always have the possibility to choose amongst the different means of payment. All of our business of news, we've reviewed only underlying the importance of cash in today's society. Whether we talked about Asia, Europe or America and with the target is to assure financial inclusion, privacy or security or efficiency only cash can provide the answer. After this brief news update, I'll share today's agenda. Firstly, Javier will review the period's highlights, then he will share with us the key financials for the quarter followed by an update on our transformation initiatives. Then I'll share key developments by region. And finally, Javier will update us on ESG as well as conclude with key takeaways before opening for Q&A. So this being said, please, Javier.

Thank you very much, Miguel. Good morning to everyone, and thank you as well for joining our Q2 review. I now would like to highlight the key events and achievements in the period where amongst others, we can underline strong growth in our net income, together with a reduction in our debt levels. First, when we look at the revenue line, we can see that sales have grown by 0.7%. 2025 has been the first time our sales beat the EUR 1 billion mark for a beginning of the year half. Organic growth has performed solidly growing close to 10% and reflecting the health of our underlying business. However, we have suffered the impact of some of our currencies that are influenced by the U.S. dollar. The evolution of the American currency in the period, having lost over 12% of the value against the euro since the beginning of the year is indirectly taking a toll on our euro performance. This being said, as mentioned, organic growth has been very positive in all regions, and I would like to underscore the extraordinary growth we've experienced in Asia Pacific where sales have grown by over 60%, giving an idea of the dynamism of the region. We are confident we are entering into the better part of the year, and we are sure that performance will substantially improve and we will see how we converge towards mid-single-digit growth rate in euro terms. Next, turning to margins. We can see we've reached 11.2% of sales in terms of EBITDA. However, when we consider some extraordinary effects from the efficiency initiatives coming from the new generation route planners we have launched in Q2, this being of an extraordinary nature and that will last for around 6 months, we can see that comparable or pro forma margins have improved by 35 basis points, reaching 11.7% of sales and pro forma EBITDA has grown by 3.7% over the one achieved 1 year ago. Next, we are very happy to share that our transformation efforts continue to pay. Transformation products have grown by 7.6%, and they now make up for 34% of total sales. This implies an improved penetration of 220 basis points when compared to the one reached in the same period a year ago. An important element to underline here is that the increasing base of installed machines is bringing savings in logistics in different regions, and we are sure that this is only the beginning of a very promising and constant efficiency gain into the future. Regarding free cash flow, we have reached EUR 28 million in the first half of the year, enabling us to achieve a total net debt reduction of EUR 44 million in the last 12 months and to remain with a stable leverage ratio of 2.3x total net debt over EBITDA. This is a proof of our discipline towards managing our debt. Lastly, I would like to share that we have successfully renewed our commercial paper program, reflecting the continuous existing interest in the market for our debt. This makes us very confident on the flexible and cost-effective solutions we have to finance our balance sheet. And as well, I'd like to highlight as one example of the multiple initiatives we are carrying out in the innovation front, the agreement we've signed with my investor, which we are sure will allow us to achieve significant growth in our digital business. I will now turn to our key financials. First, I will review our profit and loss account. Revenue in the first half of 2025 summed EUR 1,005 million, growing, as I earlier said by 0.7%. If we look to the top right-hand side of the page, we can see a very healthy close to 10% organic growth, showing once again the trust our customers place in our services, a positive 2% contribution from inorganic, namely the consolidation of our Indian operations that started only in Q2 2024 and a negative currency impact of 11% due to the evolution of the U.S. dollar against the euro since the beginning of the year on top of the devaluation of most of the currencies in our footprint. Next, EBITDA has reached EUR 171 million, which implies a decrease of 3.9% versus the one achieved 1 year ago, taking the relative margin over sales to 17%. EBITDA totals EUR 112 million in the first 6 months of the year, 11.2% of sales in relative terms and a 0.5% decrease over the first half of 2024. As we can see in the lower right-hand side of the page, operational profitability is taking into account the EUR 5 million we have deployed in an extraordinary efficiency program in several countries. If we isolate such an effect, which is of a onetime nature, we will observe that the pro forma EBITDA is of EUR 117 million, which is 3.7% better than that of a year ago, and reaches a relative margin over sales of 11.7%. Again, an improvement of 35 basis points in these 12 months. The financial result for the period totals EUR 14 million, over 50% lower than in 2024, mainly due to lower exchange rate impacts enabling us to reach an earnings before taxes of EUR 87 million, a very relevant improvement of over 24% versus a year ago. A tax rate of 45.1% takes us to a net profit of EUR 48 million, 22.2% better than in 2024. With minority interest accounting for EUR 2 million, our consolidated net profit reaches EUR 46 million, which is a 20% improvement in the year. We must acknowledge that despite solid currencies have taken in our top line and EBITDA levels, and despite the effect of the extraordinary efficiency program mentioned, we can see that as we travel down our P&L, and as a consequence of an active natural hedge policies, the improvement in absolute and relative terms only increases. In this line, earnings per share now totals EUR 3.09, which as well implies a 20% improvement over that obtained a year ago. I would like now to turn to Page 5, so we can review our cash flow statement together with our net debt position. Departing from an EBITDA of EUR 171 million for the period, we see that provisions and other items attracted EUR 22 million, while income tax payments totaled EUR 51 million. CapEx outflow has been considerably reduced to EUR 33 million, down from almost EUR 51 million 12 months ago. This reduction is a combination of less investment in new openings in the ForEx business together with various strict infrastructure CapEx control. Changes in working capital to support the almost 10% organic growth we've previously seen have totaled EUR 36 million. With this, we reached a free cash flow for the period of EUR 28 million, very much in line with the one achieved a year ago and resulting in an EBITDA conversion rate of 81%, an 8 points improvement over a year ago. Moving down, interest payments totaled EUR 15 million and disbursements related to M&A at to EUR 7 million, while dividend and treasury stock outflows totaled EUR 7 million and others totaled EUR 21 million. With this, total net cash flow adds to EUR 21 million, which is a very significant improvement of EUR 35 million or EUR 10 million if we exclude M&A payments over the 1 achieved in 2024. This, together with a negative foreign exchange rate impact of EUR 9 million arrived to a net financial position at the end of the period of EUR 674 million. Moving to the top right-hand side of the page, we can see that adding to it IFRS 16 debt of EUR 111 million and deferred payments of EUR 114 million, total net debt amounts to EUR 882 million, reflecting a substantial improvement over the position we had a year ago by EUR 44 million and by EUR 11 million versus Q1 this year. Our leverage ratio is of 2.3x EBITDA, in line with the prior quarter and with a relevant reduction of 0.6x versus the 1 reached a year ago. This page shows our clear commitment towards an effective leverage management and a clear focus on cash generation as has been in prior quarters and are sure will be into the future. With this, I will turn to Page 6 where we'll review our transformation efforts. Here, we can see that transformation products continue to gain relevance and improve our company profile. Transformation products in the first 6 months of the year have reached EUR 342 million, which is a 7.6% improvement over that one achieved a year ago. All geographies have contributed very positively to such growth and the penetration over sales now reaches 34%, a significant 220 basis points jump over a year ago. I would like to highlight that our customers rely on our transformation solutions, and I'm very happy to share that in this first semester, we won 4 major contracts regarding Cash Today and CORBAN that will commence to be deployed this coming second half of the year and that enable substantial growth rates to be maintained in the near future. I would now like to hand over to Miguel.

Thank you, Javier. And I'll now share the key highlights of our performance by region. Turning to Latin America on Page 7, we see the region accounts now for 59% of total group sales. Revenue in the region reached EUR 589 million, a decrease of 4.8%. It's important to note that organic growth for the period has -- was a very healthy 12.4%, noting the good underlying trend of the business. However, we see a negative currency impact of 17.2% linked to, as already mentioned, the decrease in value of the U.S. dollar versus the euro. Transformation continues to thrive in the region. Sales for this segment have grown by 4.3% up to EUR 214 million, reaching a penetration of 36.4% of total sales. That is 320 basis points better than a year ago. Being these our most relevant region, it's particularly important to note that as well, it has the largest penetration in terms of transformation products, a good sign towards the positioning of our company for the future. If we look at the EBITDA margin for the period on a pro forma basis, we've achieved EUR 97 million, which is a slight decrease of 0.9% year-on-year and implies a relative margin of 16.5% of sales. A substantial improvement of 60 basis points over 2024. I'd like to remind here the efficiency programs Javier shared that have been launched this last quarter in the region. This has been of extraordinary nature and that we are sure will position us as a leaner operation into the future. The reported EBITDA reached EUR 93 million, which implies a relative margin of 15.7%, 20 basis points less than a year ago, even when absorbing the above-mentioned efficiency program, giving a sign of the capacity the region has to generate profitability. Moving on to Europe, which accounts for 32% of total group sales. Revenue has reached EUR 323 million in this first half. This implies an improvement of 0.6% over a year ago, back to a 0.4% organic improvement, together with 0.2% positive foreign exchange impact. Transformation product sales have reached EUR 105 million, which is a 3.5% improvement over that one we achieved a year ago and implies a penetration of our sales of almost 33%, achieving a 90 basis points improvement over 2024. We as well here can observe our transformation continues to positively advance and improve our profile into the future. Profitability has reached EUR 12 million. This is a 3.6% of total sales and EUR 3 million less than a year ago. This reflects a slower start on the earlier part of the year from which we are heading in a gradually positive manner into the second half with relevant new contracts coming into place. which makes us feel very positive about the expected performance in the second half. And the third region we move on is Asia Pacific, which represents 9% of group sales. The region continues to experience a very important growth. Revenue in the period has reached EUR 93 million, which 60.4% increase in relative terms year-on-year. I'd like to highlight that organic growth at 31.5% continues to be extremely strong, to which we had a 35.2% improvement derived from the consolidation of our Indian operations from Q2 2024. Transformation in Asia has reached EUR 23 million, more than doubling the EUR 11 million reached a year ago. With this transformation penetration reached 24.6% of total sales, 100 basis points better than only 1 year ago. Very important to note that when we exclude India from this calculation, transformation products have grown by almost 110% in the period. In terms of profitability, we reached EUR 8 million in the period, which represents 8.9% of total sales with all countries positively contributing. We're very positive on expected evolution into the future. And with this, I finalize our review, and I pass it over to Javier. Thank you.

Thank you, Miguel. Now, I would like to share with you the progress we've made in our ESG initiatives. In terms of our heavy fleet emissions, we've been able to reduce them by 6.4% on a year-on-year basis. This is the result of both the development of alternative fuels programs and efficiency projects that have had, as you can see, a very relevant effect on the use of fuel and hence, a reduction of the emissions associated to it. As well, we have been able to achieve a 6.2% reduction in total emissions when measured as CO2 grams divided by Euro Salt, which we reckon as a good measurement for our overall environmental efficiency. On the social front, we're happy for having been selected by Forbes as one of the 100 best companies to work for in Spain and as well are happy to share our inclusion in the IBEX Gender Equality index. These both recognitions prove how we constantly work to be a balanced company. Lastly, I would like to share that we have updated our policies in terms of business continuity and artificial intelligence. These do not only recognize the relevance we place on proper governance, but most importantly, how devoted we are to assure on one side, we maintain our operations going forward in a structured and auditable manner and as well how we properly embrace artificial intelligence to make it help us to the next level. I would as well like to highlight the very positive evolution of our ratings by third parties that recognize our commitment to sustainability, being on the environmental and on the governance front. Now I would like to conclude with what the key highlights for this first 6 months are. As we have seen, we've been able to achieve a solid growth in net income, which continues a very positive trend as well as a reduction in our debt. In terms of revenue, sales have increased by 0.7% on the back of a strong organic growth of close to 10%, showing the health of our underlying business and the trust our customers place on our services, despite a slower beginning of the year in Europe. However, we've suffered a higher currency impact, mostly driven by, as mentioned, the evolution of the U.S. dollar, and we are very happy to share the continuous and sustained growth of our Asia Pacific region that has improved by 60% in the year, half of it being strong organic growth. In terms of margins, EBITDA has reached 11.2%. And if we take into consideration the mention efficiency initiatives that are of a nonrecurring nature, pro forma margins have climbed to 11.7%, which is a 35 basis points improvement over a year ago, as well a 3.7% improvement in absolute terms in the same period. It is as well important to note the positive performance of financial cost that enables our net income to grow by a very relevant 22.2% year-on-year, reflected as we traveled on the P&L performance improves. We are confident that coming quarters will reflect an improvement in both sales and margins. Transformation continues to advance in a very solid manner. Sales have increased by 7.6% in the period for these type of products, reaching 34% of total sales which is 220 basis points more than in 2024. This, as we showed earlier, only confirms how customers accept our transformation initiatives and that improves the profile of our company to make it more resilient and capable of growth into the future. On the free cash flow front, we have achieved EUR 28 million in line with that obtained in 2024, and we have been able to reduce our total net debt by EUR 44 million versus last year and by EUR 11 million when compared to only 1 quarter ago. In terms of leverage, we are maintaining a stable quarter-on-quarter total net debt over EBITDA ratio of 2.3x. This we believe reflects not only our commitment to strict financial control, but as well provides us with a very solid balance sheet into the future. This discipline is being constantly recognized by lenders as the renewal of our commercial paper program shows. And lastly, stepping into the next evolution of the company, we're happy to share the agreement we signed with my investor to grow jointly in the digital arena. Thank you very much for your attention. And now I would like to open the floor to any questions you might have.

[Operator Instructions] We will now take the first question from the line of Francisco Ruiz from BNP Paribas.

I have three questions. One is, could be aggregated together, which is, if we look at the Q2 and we have seen a deceleration both in organic growth and also in margins, even excluding the restructuring charge. So I'm wondering if the lower level of inflation in Latin America could lead to mid-single-digit organic growth instead of mid-teens? And also, what's the reason for the not improving of the margin in this quarter? The second question is on the restructuring. So you commented that it's going to be a 6-month program. So could we expect another EUR 5 million in Q3 or Q4? And what is the expected return of this of this plan? And last but not least, modeling questions. We have seen a big decrease on depreciation, especially in Latin America this quarter, even more than the FX. So could you give us an idea of when it's due to and what's your expectation for the year-end as well as on CapEx.

We'll take the questions one by one. So the first one on the impact in Q2 from lower inflation. What we are seeing overall, especially in Latin America is there's lower inflation, as you were saying, especially in the case of Argentina that together with a tougher comparable base in the country is leading to a normalization process in Argentina that is taking place quite rapidly together with, I would say, some cautiousness from the macro perspective, including consumption on the back of the midterm elections. So we would expect that after the midterm elections and once that is over, probably there will be a healthier consumption environment for consumption. While in the rest of Latin America, what we're seeing is an acceleration itself. So overall, if we put it together in the LatAm region, we are growing above the macro in Latin America despite this normalization process in Argentina, as we are mentioning. And I mean, it's hard to say where the organic growth will be in the future, and we don't have the crystal ball, but I would say that based on that forecast for the post midterm elections in Argentina, we will expect some acceleration going forward. And in terms of profitability, there has been significant impact from hyperinflation in this quarter. As you may have seen that there was a sharp devaluation in the Argentinian peso. So that we would assume that is not something you should be extrapolating, so we would expect an improvement in profitability in the second half of the year. In terms of the efficiency plan, the idea will be to extend this for Q3 as well. So I think it will be fair to assume that another EUR 5 million or a bit more EUR 1 million could be implemented. And in terms of return, we understand that it should be paying back in less than 18 months. The reason why we're doing this right now is because we think there are several circumstances taking place at the same time that make it the right time for it. So we have next-generation route planners coming into place right now together with an increased custody base in terms of devices, there are sectorization initiatives in our constant efficiency programs. And the Argentinan new denomination nodes are starting to spread quite widely across the economy. So all in all, when putting it together, we thought it was the right time to try to accelerate the search for efficiencies and undertake such a program in this. And on the third question on the depreciation and the CapEx, of course, the depreciation is also affected by the FX because a significant part of that is at local level in local currency terms. So I would assume that the same philosophy under the FX will apply. So probably if the FX is a bit milder in the second half of the year, for instance, in Brazil, you should see not such a big decrease on that specific caption. And in the case of CapEx , think we are applying a very efficient CapEx approach. There are elements which will no longer be there like the ForEx opening costs that we had last year or CapEx that is not part of our investments in this 2025 and we are also on top of the infrastructure CapEx that we were mentioning before. We also are rationalizing and optimizing pretty much the cash today stock. So that's something that we'll probably be lasting for some more quarters already. So we should not be expecting a very significant increase in CapEx for the remaining part of the year.

We will now take the next question from the line of Enrique Yáguez from Bestinver Securities.

I have a couple of questions. The first one is regarding Europe. In the presentation, you said to expect a gradual improvement throughout the year in the revenues. What kind of growth are you foreseeing during this month of summer and also about in terms of profitability, excluding the one-off impact in Q4 last year? And then on the expected contribution from the contracts in Cash Today and CORBAN, how important it is in terms of revenue. And finally, about the profitability in Asia Pacific, which is almost 9% in the first half of the year, what kind of profitability should we expect from this business region at year-end maybe in 2, 3 years?

On your first question regarding Europe. Well, first thing we need to take into consideration is that not only in Europe, but all across the board, in Q2, there has been roughly 2% to 3% less working days impact, which goes straight into the organic improvement, which will not be there in H2 and also in the case of Europe, you need to consider the slow start of the year because of the price increase process in Germany and also some of the foreign exchange contracts not being yet at full speed, which have been renegotiated right now. And we will see the impact from that renegotiation in H2. And in the case of Germany and that affects Europe as a whole, you have an easier comparable base in the second half of the year, which goes especially to profitability because of the strike that we had last year, which is no longer the case. So we will be benefiting from that part as well. And there will be some contracts from transformational products in the region as well. So when putting it all together, we are firmly convinced that both in terms of growth and profitability, we will see a much better development. If you exclude in Q2 that 2% to 3% working days impact, we will be, in the case of Europe, roughly around 3.5%, roughly speaking, organic growth, which we can deem as a reference for the region of Europe, which is on a Tier 1 like benchmark, which should be there, I mean, in the longer term. Regarding your second question about the transformational products, we mentioned for contracts there. Those will be starting to be operated within the second half of this year. So we should be seeing the run rate impact of that in 2026. And all of them together could be adding up to roughly EUR 50 million in terms of sales. And those are operating at higher margins than the average should be contributing positively in terms of profitability enhancement. But as we said, we will start seeing part of that in the second half of the year. Your third question was related to AOA. We are seeing much better performance in the region quarter-by-quarter. All countries are contributing significantly, so we think that this has just started, so we should expect further improvements. In the region, we have very good performance from India, from Philippines, Indonesia is also performing very well, although it's a smaller business for us. And in the case of Australia, you may have noticed that the contribution from the clients has been extended for another 6 months while we finalize the long-term pricing negotiations. So that means that another AUD 25.5 million will be there in the second half of the year. So also reinforcing the good performance that the business is experiencing in the country. So all in all, we are very positive about the performance of our Asian business.

We will now take the next question from the line of Joaquin Garcia-Quiros from JB Capital.

Most of my questions have been answered already. Just one more on EBITDA for the full year in previous calls. You mentioned that you were comfortable with consensus, which was around EUR 420 million. Taking out the one-offs from the restructuring plan. So on a pro forma basis, do you still feel comfortable on reaching that figure, especially after this weaker quarter due to FX impacts?

Thank you, Joaquin. Yes, I think we've been referring always to EBITDA, which is the main operating metric that we typically use. So when we look at consensus right now, it is a bit below the EUR 280 million, so in EUR 278 million to EUR 279 million, roughly around that figure. We feel that we should be very close to that. So we are confident that we can still achieve it on a pro forma basis, as you were saying. And together with that, we will be expecting strong EPS growth and deleverage. I think those are the 2 main levers we've seen in this Q2 that should continue towards the end of the year. But in terms of EBITDA for all of the factors that we mentioned before, we feel that we are going to be there.

We will now take the next question from the line of Alvaro Bernal from Alantra.

Most of them have been asked already. So just a clarification with what you mentioned about the associates result this half, you said we can expect it to be positive again in H2, thanks to, if I understood correctly, a turnaround, well, or better performance from Australia? That's my first question. And then second question is simply if you can shed a bit more color on the other component in the cash flow.

On your first question, Yes, the business in Australia, which is consolidating under the equity method for some time back already is performing quite positively right now, and we expect that performance to keep going ahead because we've had on top of the increasing synergies resulting from the integration plan we've had for the last 12 months, the contribution in terms of pricing from our main clients, we have signed an agreement for an extension of another 6 months on this pricing contribution, while we finalize the long-term pricing scheme. So we are positive that this good performance from Australia in the first half of the year will remain and will be improving in the second half. So your assumption we can give it as correct. And with regards to the second question in the other line in the cash flow, you're seeing there roughly EUR 20 million, EUR 21 million impact there. So most of that is related to a one-off contingency that has materialized in Q2 that was fully provisioned and to a lesser extent, there are some investment in our joint ventures, which are always included in this caption.

There are no further questions at this time. I would like to hand back over to Javier Hergueta for closing remarks. Apologies. There is one more question, if that's okay. The next question comes from the line of Enrique Yáguez from Bestinver Securities.

Just a follow-up question. The one-off contingency that you have mentioned have materialized in Q2, Javier, is the one related with Brazil that you explained in your financial accounts?

Yes, you're correct, I guess. It's that one.

Okay. And reminder, the extra million incurred in provisions?

What are you referring to? Sorry, the provisions?

Was a small impact in Q2 from provisions and other, I think it was something like EUR 13 million or EUR 14 million. So just with the cash that you need to take into account? Or what is the reason for that?

You're mentioning the provisions and other lines in the cash flow, are you?

Exactly.

You see some incremental impact in Q2 versus Q1. Basically, there, I mean those are the elements that are correcting the P&L or the EBITDA from a cash flow perspective. So the bulk of that is typically IFRS 16, which remains there in both quarters. And then, hyperinflation and the net impact from the provisions, which is changing every quarter. I mean that's business as usual. Sometimes that's a net positive figure, sometimes it's a negative figure. So in this quarter, we -- the net impact from those provisions has a different sign than in Q1, and that is making basically a difference because IFRS 16 remains more or less constant.

There are no further questions. I would like to hand back over to Javier for closing remarks.

Well, thank you all for taking the time. As you have seen, we are quite positive on what is coming ahead in the coming quarters. So we are expecting a second half of the year, which should be strong on the back of all the elements that we just mentioned throughout the call. So we will be very happy to resume on that in the coming quarters. Should you have any further doubts, of course, we can contact our IR team. And for those of you who are taking a break now enjoy and get some relaxes and hope to speak back again when you're back. Thank you all.

This concludes today's conference call. Thank you for participating. You may now disconnect.