Prosegur Compañía de Seguridad, S.A. (GGAL) Earnings Call Transcript & Summary

So good morning. Hello, everyone. It's a pleasure to have you all here. My name is Juan Ignacio Galleano. I'm the Investor Relations Director at Prosegur. The purpose of this event is basically to deep dive into the business strategy objectives and the financial figures and the economics of the business, and it will be structured as follows: First, Jaime, CEO of Prosegur Alarms and President of MPA, will walk you through his presentation, followed by Maite, who will give you a detail and deep dive on the figures and the financial information of the business. And then we will have the Q&A session. So please hold on to your questions until we get there. And I will give you further instructions later on for those -- especially for those who are online. So now without further ado, I leave you with Jaime. Jaime, the floor is yours.

So good morning, everyone, and welcome to Prosegur Alarms Investor Day. As Juan Ignacio was saying, the purpose of today's session is to run you through our strategy and also the financials in a moment in which the industry is becoming very hot. I think you all know that our friends and competitors went public a few weeks ago. So hopefully, we'll get some time to share with you what we're doing and explain to you our strategy and where we want to get. So first of all, I'm going to share with you some details about our market and how this industry works. Hopefully, this will help you understand a bit better what we're trying to do. This industry, the alarms industrial market is a very peculiar one because it is very push-driven in a sense that there is a strong correlation between how much we invest in advertising, marketing and go-to-market and the growth potential and the penetration of each of our markets. So there is sort of a virtuous circle in which the more players invest in the country to get new customers, the higher the growth potential of that market we can see. So in this slide, you see that everything starts by some customers realizing that they might have a need for security and peace of mind. Some customers don't even know that, that's a need they have. So that's where our marketing and brand awareness investment starts. So it is very important for us to start investing more and more in marketing in a smart way. We'll get to those details later. But once customers realize that they have a need, then the purchasing process starts. And that's where we need to put our commercial engine in place to make sure that we capture as much as that growth as possible. If we are successful and once we are successful, then we get new clients. That means that we get more visibility on the street. You see more of our signs on the street and houses and businesses. And that also helps us accelerate further the growth and the need for our products and services. So you will have listened to advertisement and commercials telling you how your neighbor has an alarm and you don't have an alarm. So that sort of triggers the need for you to have an alarm as well and feel safer. So you have also the same security level as anyone else has in the market. So that, again, brings new clients and that brings new marketing potential and investment. So you sort of feed that virtuous circle. And we've seen again in all of our markets that once we do that well, then the level of the penetration and the growth starts growing and growing and accelerating. So if we now look at our markets specifically, we have a chart here where you can see the penetration of our markets. And that's why we feel that we have a tremendous opportunity in front of us at Prosegur because in all of our markets, we see a lot of potential to increase penetration. Even in Spain, where we've grown the penetration in the last 5 to 10 years, thanks to our partnership with Telefonica as well, we're still halfway through the penetration levels that we see in other more developed markets like the U.S. We don't have the Nordics on this slide, but they would also have higher penetration levels. So we trust that we can actually double the penetration, which would mean that we could have tremendous growth potential for us and for the market as well. So we're not entering as other industries are into a price war, sorry. But we have growth potential for all the players. And actually, we've become very good at seizing higher market share, higher new market share than our competitors. If we look at other regions like Portugal or even Latin America, the opportunity is even bigger. So we have, again, a very good position to capture that growth and to keep growing the business. Also because on this slide, you can see our market positioning, and this is also very relevant. Coming back to my point before, the more visible you are and the higher awareness of our brand we get, the easier for us is to keep growing. So being #1 or #2 in mainly all of our markets, except for Chile, where we're getting to #2 now, I think helps us a lot and gives us and puts us in the best position to keep growing because customers consider us when they look for an alarm. And since we trust that we believe that many, many more customers are going to look for an alarm. There are not too many players that we can actually consider other than the first 2, 3 players in each of the markets. All the others are also important. This is a very fragmented industry. But actually, 80%, give or take, of new customers actually go to #1 and #2 players. So actually, we're very well positioned to capture that growth. This was a little flavor about our market. Let me go now through our strategy. And actually, we're going to run you through all the end-to-end value chain of our business, and I'm going to explain to you now what we're doing and what our plans are for each of those verticals of our value chain. But before we start, I think one very relevant point that I wanted to share with you today is that this is a finance-driven model. So there are 2 things that I'm going to talk a lot about today. One is the obsession we have for returns. And second is the obsession we have for the customer experience. So those are the two main things that really keep me awake at night if I had to say true only. Finance and returns is because, as you very well know, this is a business in which we need to make quite a large upfront investment. So that means that acquiring new customers -- there are a lot of new customers, as I said, but acquiring them means that we need to invest in marketing and many other things that I'll go through now. But this is a large upfront investment, which we're happy to make because returns will come during the next years if we manage to keep customers for a long period of time. And if we manage to enlarge and expand margins and make customers happy, so they're happy to keep paying this service for us for a long period of time. So those are the main two things that are relevant to us at Prosegur Alarms. And everything we do, we measure, we look at the returns call it NPV, call it payback, call it return, call it whatever financial metric you wish, but we look at them not only for acquisition, but for any other project that we do. And actually, when we look at the acquisition strategy, which is actually one of our main investments in terms of CapEx, in terms of SAC subscriber acquisition cost, we look at that by channel, by customer, by offer, by anything you can think about because on this business, the average doesn't tell you much. It's much more relevant to actually look at anything you do, any new customers you acquire. If you acquire a new customer and that customer leaves within the first 2 years, you're actually not making a good return. So you need to look at each of your customers to make sure that all of them, not only on average, but all of them or most of them stay with us for a long period of time, and we get high margins. So that was something that I wanted to share with you because actually, that's probably something that we've slightly evolved from the last couple of years strategy, which will come on the coming slides, and we'll let you know what we're doing there. But that's something that I personally believe that we need to keep working on, and I'm very obsessed on the return and the financials. If I go to the strategy now, you can see here, again, the whole end-to-end value chain, starting by the product that we define and we keep investing on new products and developing our road map. Then once you have the product, you need to take it to the market. So marketing comes and then commercial strategy. And then once you have the client, what's the most important thing? You need to make it happy. You need to make them happy. You need to improve the customer experience. So again, that's the second thing I said that is one of our obsessions. And then, of course, to make customers happy and to be more efficient, you need to be operationally more and more efficient and you need to take advantage and make the most of all new technologies that you can apply to our business operationally wise. On this slide, you can see that each of those parts of our value chain, we measure again with financial and operational KPIs. You call them churn. We want to retain customers as long as possible. You call it margin in terms of service margin or EBITDA margin. You want to be efficient in the way that you expand margins through time. And for that, we need to make customers happy. So we need to offer them more products and services, upselling and those things. So you increase the ARPU, the average revenue per user. And we are working very hard to keep costs under control. So we, as I said, expand margins year-over-year. And you'll see later when Maite shares with us the financials that, that's one of the things that we are planning to do in the coming years in our numbers. And also subscriber acquisition cost, even if this is an industry that we like it or not, you need to invest upfront, and we've invested upfront, and we are ready to invest upfront. We need to keep SAC subscriber acquisition cost under control, and we need to make sure that the less we invest upfront, of course, the easier it gets to make a return on that money that we invest. So we're also considering and we'll talk about some initiatives later. We're also considering how to do that and how to optimize our upfront investment. And everything we do, we do it to grow our customer base. So growing in terms of new clients, but growing in terms of free cash flow optimization. So those 2 things are important. It's not only new clients that we measure, which we value a lot, and we track that a lot, and we have plans to keep growing number of customers, but we also need to look at the free cash flow, the cash flow optimization and growth. So let me now go one by one. If we start by the product, everything starts by having a robust and strong and innovative product in this industry as in any other. This industry has changed a lot in the last few years since video becomes more and more relevant, since artificial intelligence becomes more relevant and something that we have in our day-to-day in our homes and in our businesses. And since many other things are progressing and changing so rapidly, we need to keep investing heavily on new products, and we need to make sure that we have actually the best product in the market. So in order to do that, there are a few things that we look at. First is customer usability. And in order to improve that, we have 2 things that we want to do and we've been working on. One is the application, the app that we offer our customers to get connected to our service. It's called Smart. And we're investing quite a lot of money and efforts on having the best-in-class app for our customers, not only because the experience is better, but also because it's actually the main tangible asset that we have for our customers to realize how good our service is. So they can interact with their service and products at home through their mobiles anywhere they are, and they can do many other things through the app. So for example, second thing is the self-service that they can get through the app. So even if we have all the means to work for our clients remotely from our call center, monitoring centers and all those things, we trust and we believe, and we've experienced that customers value a lot what they can do on their own. So what they can actually -- if they want to change the password for entering into the house or the code or whatever, if they can do it on their own and they don't need to call our call center, it's good for the customers because the experience is better. It's good for us because we don't need to invest in getting more and more calls in our call center as long as we keep growing our customer base, for example. And many other things that customers can do through the app and other self-service initiatives are very relevant in the way that we think about our road map evolution. And the second thing, of course, is innovation. We need to keep innovating in the core of the product, meaning we want to make our alarm more and more secure. And that means that we're going to add more cameras, sensors, detectors and many other devices to make homes and businesses safer and safer. And we keep thinking on what else can we do to add to our core product to provide the best service and make everything we protect safer. Second, as I was saying, is video. Video, not only for businesses, it started being very valued by businesses in the beginning. But nowadays, video is very relevant for homes as well and it's a core part of our service. So we offer all our clients and customers video capabilities so they can look at what's going on, on their houses, and we can start doing things with artificial intelligence to improve the service that we provide video-based, meaning pets, we have solutions that help us make our customers' lives easier if they have pets. We can recognize people, faces, objects, and we can make our service more efficient by identifying that certain things are probably not real alarms or dangers. And some of the things because we can recognize a burglar or a thief trying to enter into a house, we know that, that's a real alarm and that we need to act much faster. And artificial intelligence is only starting now. So we'll see more and more developments on that area, and I'll let you know in a minute how we are planning to do that. And of course, future launches. So not everything is covered by our core system. We have many other initiatives outside of the home, beyond the home. And we have also smart home initiatives that we're about to launch. You'll see and hear some more in the coming quarter or 2 quarters because we're planning to launch new value propositions to the market in 2026, and that keeps going. We still believe that the core of our business is the security part of the alarm, but there are many other things that can be done. The only thing that -- and just to be clear and we can discuss in the Q&A later, the only thing is that since we see such a such an interesting potential, growth potential in the core business. We're not too much obsessed with entering into adjacent other things as of today because we still believe that customers need to first cover their basic needs security-wise. So this is the road map strategy that we will follow in the coming 2 to 4 years. And how are we planning to do that? We had a very interesting debate in the last couple of years regarding build versus buy. So everything that we are developing and that we have on our road map, we could do it ourselves or we could do it through partners. And on this slide, you see how others are doing this. So the small players that don't have enough scale or investment capacity, they can only take off-the-shelf products from other providers, from third parties and integrate them with no change to those, no special benefits, no differentiation. On the other hand, you see the largest players of the industry who a few years ago decided to build everything in-house, which probably 5 years ago was a good decision, but we trust, and that's why we've come to this own strategy. We believe that a combination of build and buy, a hybrid strategy here is what will make us unique and what will give us the opportunity to have the best product in the industry in the coming years. So we are partnering with some players in the industry. We have some here today with us. So thanks for joining. We're partnering with 2 specific companies who are best-in-class global leaders in what we want to do. We're not a hardware company. So that's not what we want to do. We don't want to become a hardware company. So we don't want to create and invest in capacities to become a hardware company. That's a different business. We're a service company. So we're not investing in hardware. And we trust that we reached an agreement with the best-in-class global leader for video as well because since I said before, video is becoming more and more important and artificial intelligence is becoming more and more relevant. And there are players in the industry, global industry, which are bigger and probably better than any security player can be on those things. So we, again, reached an agreement for the coming years with 2 specific partners to work together on those 2 things. And what we are going to keep, which is important is that we are going to keep our technology stack, we're going to control our technology stack end-to-end. So we're going to decide how we integrate things, what other things we have in our tech stack. And we're going to integrate these things, these parts of the end-to-end value chain into our tech stack. But we're not losing control of that, which was one of the things that obsessed us in the negotiations and in the debate that we had 2 years ago. And we're also keeping some sort of flexibility to adapt what we need to adapt and keep what we need to keep. So those things were very important for us to keep. And on top of those things, we're getting new things, which is why we believe that this is a winning strategy. So we're getting best-in-class solutions and innovation capacity. We're working with people who invest millions and millions more than all other security industry players. So we can get the benefit from those things. And we are getting some period of time for exclusivity. So if we want to become different, we cannot work with someone who is going to actually sell the same thing to all other players in the industry. So we signed an agreement in which we get around 2 years of exclusivity, which we trust is going to make us different. And the last thing that we're getting, which was not only what we were looking for, but it's also important for our business is that we're getting savings. So we're getting around 20% savings in year 4 and 5 of this agreement compared to what we were paying before this agreement. So we're getting the best of both worlds, the innovation and the cost benefits. So once we have the product developed, we need to go to market. And first thing we need to do in the market is we need to invest in marketing, as we were saying, right? So on this slide, you see 3 things that we are planning to do. We already started doing those, and we will keep doing those in the coming years. One is that we're going to keep investing in branding. We keep investing in branding and growing double digit our marketing investment because we trust that, that's the way to capture and seize that growth that we discussed on the first slide. Second thing is that we want to become more and more efficient funnel-wise, meaning that conversion ratios are very important. Actually, once you get a new lead coming from your brand investment, the conversion ratio is 60%, higher than any other lead that you could get through other means. So brand investment, second, you need to optimize the funnel. Not only the brand investment, but also anything you do in the funnel. So for example, we've been experiencing in some of our markets, some contactability and reachability issues with some of our clients in the industry. You know that regulation is changing. So customers are not always as easy to contact as they were in the past. And we're working hard on those things. So for example, we're incorporating new channels to do that, WhatsApp and other remote channels to make sure that we don't lose any lead because to us, that's something very important to, again, be very efficient and capture all that growth. And the third thing we're doing from a marketing perspective, which is or might be something that we are evolving compared to last strategic plan of Prosegur Alarms is that we are very obsessed now to capture high-value customers. I said before in the first slide that the market is growing and that this is a push market. If you push too hard, it might be counterproductive. It might mean that you get customers who are not willing to be with you for a long period of time. So we need to be very, very precise in how you market these services and how you target new clients to get customers who are willing to stay with you for a long period of time. And that will, for sure, reduce the churn. Of course, that will also mean that you will get customers who are willing to pay more, get more services, more cross-selling, more value-added services, and we're also working on that. But sign-up are probably one of the things that we want to work on in the last few months to optimize that. In the past years, we were probably kickstarting the commercial engine. Now we need to make sure that, that commercial engine and our sales force targets the right customers, so we get the best returns possible. In terms of value proposition, if we keep talking about the marketing strategy, we want to improve our value prop to the market. So we're working on a few things that are also very relevant and linked to what I described before when we were trying to get the best customers possible. So first thing that we're working on is we're simplifying our value proposition to the market. We were coming from an industry and ourselves as part of the industry, we were selling with quite a complex value proposition in the past. I think Movistar Prosegur Alarmas started this journey 2, 3 years ago, simplifying the offer, making it more transparent to the customer and having less offers that we can sell to the customers, but best offers that we can sell to each of our customer target. And we keep working on that to simplify our offer and have the best offer possible. On top of that, we are working on increasing the value adds that we could bring to the market. So our response we call it Acuda service is becoming more and more popular and more and more relevant, but many other things that we want to do to improve our value-added services. As I said before, differentiation is key in this market. So even if it's very fragmented and we normally compete against 1 or 2 other players in the market, differentiating from our other competitors in the market is very relevant for us. So that's why we keep also innovating in our products and services. So we have, for example, on this slide, we see the ContiGo, which is another service or product that we offer to our customers. So they feel safe when -- beyond the home, when they're not at home and they could activate a button. So they can actually call for help if they have an issue outside of the home. And the last 2 things that we have on this slide is revenue expansion and adjacent developments. As I said before, we are very lucky because this industry is growing, and we have a lot of potential in front of us. But we don't want to neglect that there are other opportunities that we're working on and that we will include to our value proposition in the next strategic plan. Right. So we discussed about the product. We discussed about the marketing strategy, and now we need to go to the market and sell. So as I was saying before, the last strategic plan for Prosegur Alarms was about starting the commercial engine. This is something that Movistar Prosegur Alarmas did probably in 2021, '22. And at the rest of the group, we've done that in the last couple of years. And we were very successful selling more and more. You will see the numbers later, but we actually double and triple depending on the market, the number of new ads that we got in the last couple of years. Having said that, it was not only about selling more, it was also about optimizing the channel mix. So in Movistar Prosegur Alarmas, we had Telefonica, which was a new channel for the business and was very successful. So what we did in the rest of the world is that we looked for other partners to do the same. So we looked for what we call third parties, dealers. And depending on the market, we have different strategies and different partners. But the purpose of that was to get new channels to compensate -- to optimize our channel mix to be able to reach customers that we would not be able to reach otherwise with our own channels because you know that our main own channel was door-to-door, and that's limited. That's not as scalable as some of the other things that we are doing now. And also, these new channels are variable in the sense that we pay commissions when they sell. So that gives us the flexibility to do more or less or reduce the risk that we run when we want to go to a new market or a new city or a new branch. So we can do it with other partners who already have the presence there. And if they sell, we're lucky, we get more customers and we operate them. And if they don't manage to sell, we lose nothing. So that's something that we've been doing in the last 2 years, starting to look into these other channels. And as you can see here, this is something that we want to keep in the coming years as well. It's working very well. It has a lower SAC. It's variable. We get to untapped markets for us, and that's something that we will keep doing in the coming years. And the other thing that we've been working on, and I think we've been already quite successful in some of our markets and not in all of them, and that's something that we need to keep working on in the next strategic plan, but it is our telesales own platform. So I remember when I joined Prosegur a few years ago, no one was selling an alarm remotely. And I actually asked the team at the time, can we do it online? I think doing that end-to-end online is very difficult. But I think doing that, starting with an online strategy with marketing investments, digital investments, but -- and then closing the sell through a call that we've proved that is possible, not only possible, but it's also very efficient because it's much cheaper. And actually, we have a methodology now that allows us to know exactly how many new leads we need to give to our door-to-door sales teams, so they have enough opportunities to work on, but we make them work on their own opportunities as well. So that's something that it is very important for us because it's not only the company providing our door-to-door sales with opportunities, it's also the sales force looking for their own opportunities and bringing more and more clients. And part of the other leads, we close them through telephone. Sometimes customers don't want to buy through telephone. But when they do and when we can do it, I think this is something that is very relevant for us to keep SAC under control and be able to sell more with less costs. And I said at the beginning of my presentation that there were 2 things that were very important. One was the return and the financial metrics that we track and we follow. The other one was the customer experience. To us, this is a real obsession. And here, we have the end-to-end customer journey. And on each touch point, we have plans to enhance, improve the customer experience because that's the main driver to make customers stay with us longer and be happier and be ready to acquire new products and services from us, and that will have a positive impact in our margin. And this is same as with marketing. This is a virtuous circle that we truly believe that is going to help us get more resources to keep investing on our own business. So from the moment in which we acquire new customers to the moment in which we serve the customer and actually, up to the moment in which the customer leaves, we have a clear plan strategy with metrics, KPIs to see how we improve and affect the customer experience. So for example, in the subscription, one of our mantras is that we do what we say, and we are transparent. Some of our competitors actually are very closed in the way that they show the offer. They don't publish prices. They don't say what customers are going to pay, then they send someone to the customer at home and then they finish the offer and sign the contract on that moment. And actually, even after that moment, sometimes customer realized that they are paying something different to what they thought they were going to pay. This is something that we never do. We are very transparent with our customers, and that's something that we want to keep doing because we believe that even if we probably miss 1 or 2 sales, the ones we get are going to stay with us for a long period of time and are going to be happy customers. Then installation. So once you sell the customer you need to install in their homes. So it is very important to do it right and to do it at the first time. So you don't need to keep going once and again to customers' houses and homes or businesses to finalize the installation because that leaves customers with a very bad customer experience feeling. So we are very obsessed and we track the first visit work that we do. So we don't need to come back to the customer home again. In terms of billing, this is very key as well because it is a critical moment for the potential churn that you can get. If you do the billing wrong or if you collect wrong, I think this is one of the things that of course, customers do not tolerate. So it is very important that you do that correctly. And to be very frank and humble, in the last 2 to 3 years, we had some issues there because we changed our CRM, and I'll go to those details later, but that had an impact. Luckily enough, I think we can say that, that's already passed and that we now have a solution that works perfectly fine, and that's going to have a positive impact in the future. So hopefully, numbers in the future will not suffer as we did somehow suffer in the past. And then we can keep going through the -- again, the customer value chain. So in terms of usage, maintenance, you don't go and visit twice to the customer to do the same thing to change the batteries or to do those things. You need to do it once and you need to do it right. Customer service. So when you call to the customer center -- to the call center, you need to make sure that all calls are solved in the first call. So first call resolution is critical and many of the things that we're doing. And in terms of activation, you also get the benefit to decide what channel you use to activate your customers. So many things, as you can see, to impact the customer experience. Since this is so important, we have a lot of initiatives, and we have a lot of KPIs that we track and follow and monitor. And at the right-hand side of the page, you can see the results of that strategy and of that efforts that we've been putting. So we are best-in-class. We're #1 in Trustpilot and in Google My Business, which are two of the main platforms to assess the customer experience and what customers can tell you and can tell everybody what they think about your business. So we've been working hard to become #1 on these parameters. And I think we're very successful. We've been very successful and we'll keep improving in the coming months actually. I'll leave you now with a video. These are the results from last month. And actually, in the video, you can see that we had even a lower ranking. We had 4.8 of 7, and that was like 3 or 4 months ago. So we keep improving month by month. And I invite you to follow those 2 platforms because we will keep improving. I'll leave you now with the video. [Presentation]

So being customer experience one of our main pillars for our strategy and main competitive advantage and differentiation, that's one thing that we keep working on. And as you can see on the video, we actually use artificial intelligence to assess everything we do with the client and to improve there. If we go and talk now a little bit about our operation strategy, the last couple of years were years in which, as I was mentioning before, we wanted to fix the basics and tidy up the house a little bit. So we had to change our CRM. We had a very old one, which was becoming obsolete, and we changed the CRM in all 9 countries. So that was quite a project, which at some point had some impact on, unfortunately, customer experience and collections and billing, and we suffered that a little bit in all countries. But during the last year, we managed to keep everything under control. We have -- all new clients are coming now with a consistent database, and we don't have issues between what we were expecting to build a customer and what the customer was built and what he had on the contract that he had signed. So that was a very important thing. The other things that we did, as I said before, is that we worked on the smart application to evolve the things that we can do through the Smart, through the app. And also one very important thing that was probably more about fixing the basics and tidying up the house was that we moved to the cloud, our monitoring centers and the Smart application as well. So we renew all the technology and infrastructure to make ourselves scalable and capable of acquiring more and more customers. We were reaching a limit in which we were almost not able to grow further. And with these few things that we did, we're ready to address and face the coming strategic plan with many more guarantees that will be successful. So what do we want to do now? So we didn't really transform our operation as much as we wanted in the last -- in the previous strategic plan since we were doing those other things. But now we want to transform the operation. We want to use more AI in the operation, as we saw in the video, more examples of that, and I'll tell you about that on the next slide. We want to make sure that the technical team, the installation, the call center, monitoring center is transformed and that we incorporate new processes, we review all the processes with new technologies, new systems, the CRM and many other things that we're changing to make sure that we transform the experience of our customers. We want to bring new channels on board, WhatsApp, as I said, remote channels and some other things to improve our operation. We're working on infrastructure unification. So that means that we are going to probably consolidate a few of the things that we do in different countries in fewer countries, especially in Latin America, where we don't need to have so many operations divided by -- divided or scatter in all those countries. So we'll consolidate some of those operations in fewer countries with some projects that we have in mind. Billing and collection reengineering, we talk about that a little bit, and that's critical for the churn reduction and for making our customers happier. That was something that did not work as well in the past and we already fixed the main problems, but we want to transform and evolve that thing because this is very important, and that's one of the main touch points in which you need to be 10 out of 10 with your customers, and that we will have in mind. Value selling operation, we want to, as I was saying before, sell value. We want to have all the operation systems, processes to be able to attack the market in the smartest way possible. So those things we'll see in the numbers that Maite will share with you in a minute because those will mean that we will have happier customers paying a bit more, but especially cost control and efficiency and customer experience. And here, last but probably not least, we have a few examples of projects we're working on AI related. This attacks the whole end-to-end value chain of our business. So you can see here a few examples of our go-to-market and selling capabilities and also some projects about our operations. So the way we work with AI is very specific in this company. First of all, we roll out AI tools to all our employees so they can work in their own projects and they can -- we call it, do internal tests. So they bring new ideas to the company to things that they believe we can improve. If those things and ideas are things that we can invest on and that have a business case and a real impact on KPIs, we start doing proof of concepts. And if the proof of concept works well, then it's where the real investment and the high investment comes to bring real product to the market, to the operation. And then we industrialize and then we do projects to make that available not only to that specific team, but for all countries in all teams that we have in which we operate. And here, you have a few examples regarding both the sales and the operations teams and some things that were already discussed in the video and some of the things that we're working on to reduce churn, to increase the sales, to reduce the cost, to improve the customer experience and so on and so forth. And with this, I'll pass to Maite to share with you the financials.

Thank you very much, Jaime. So we already have been analyzing the market, the strategy, and let's now go to analyze the financial figures. But first of all, I'm going to explain you 4 different concepts because I think that it's going to be quite useful to understand the next numbers. The first one is -- I'm going to speak about the service cash flow. The second one is going to be about the replacement cash flow. The third one about the recurring cash flow and the fourth one about the growth cash flow. As you could see, I am all the time speaking about cash flow. Why? Because as Jaime mentioned, this is a finance-driven business. And internally, we manage in terms of cash flow, no in terms of P&L as we do with the rest of the businesses. So in this regard, if we start with the first concept, the service cash flow, I want to explain how it's calculated. It's quite easy. Just we have to take the service margin, and we have to multiply by 12x, the 12 months that has a month. If you want to have the full service cash flow, you will just have to multiply by the total client base. A lot of you, you already have been speaking with me about the EBITDA per SAC, the EBITDA per SAC. The service margin is the EBITDA per SAC. Internally, we always speak about the EBITDA. We include the depreciation of the CapEx. Today, we will see that I'm going to explain to you also, we are going to speak about the EBITDA per SAC. I will provide you also that percentage. So if we move now to the replacement cash flow, the replacement cash flow is calculated just by multiplying the churn rate and the SAC, the subscribing acquisition cost, the cost that we need to incur to acquire a new client. When we multiply this churn rate by the SAC, what we obtain is the cash flow that we need to incur to maintain the same client base that we currently have. So from the service cash flow, if we subtract the replacement cash flow, what we are going to obtain is the recurrent cash flow. The recurrent cash flow is the cash flow that we use for the rest of the things for growing, for paying taxes, for paying CapEx, for paying others interest if we have a debt. The recurring cash flow, it's also important, and I'm going to move to the next concept, the growing cash flow because there is a ratio that I would like to highlight because it's important to understand the debt in this business. As Jaime has mentioned, for growing, we need -- we have a lot of SAG, we have a lot of acquisition cost. We also have a lot of publicity to invest. So this what makes is it increased our debt. So when we calculate, when we divide the growth cash flow divided by the recurrent cash flow, if the number that we obtain is higher than 100% means that what we are doing is that we are taking on into debt to growth. the recurrent cash flow, if the number that we obtain is higher than 100% means that what we are doing is that we are taking on into debt to growth. If it's lower, means that we are not going in debt to growth. So here, this is key because we have to be controlling the debt all the time. Why? Because if not, the recurring cash flow instead of for growing, it's going to be dedicated to pay interest. So that's why even some of our competitors, they need to do specific financial things so that they could reduce their debt because if not, the debt is going to kill you. So now let's move now to the numbers. I'm going to start with MPA. In this regard, I'm going to speak about the evolution across the different years because here, you can really analyze how the strategy has a real impact in the numbers. I'm going to start from the first phase. I have split it in 3 different phases. The first one started when we did -- when we signed up the joint venture with Telefonica in February 2020. If you could see in 3 years from 2020 to 2022, we more than doubled the number of clients that we had. This was mainly because we did a very aggressive promotions, aggressive commercial discounts that -- what it made was that -- just not also it doubled the number of clients that we had, but it also increased a lot the churn rate, achieving 14.1%, the highest we had ever had. And we also increased -- it also made us increase our debt. And why do we -- why did we did this strategy? It was mainly because we were launching our new brand, Movistar Prosegur Alarmas. So we just keep pushing the market so that all Spain could know our new brand, Movistar Prosegur Alarmas. And in 2023, we started changing our strategy. Here, we were more focused on stabilizing the main indicators. For example, as you could see, in 3 years' time, we reduced our churn rate till having the churn rate that we have now 8.9%. Even we improved our ARPU. As you could see, this is the unit recurring cash flow. The ARPU increased in EUR 83 in 4 years. You have also to divide it by 12. But look what happened at the beginning, the CAGR even was negative in the recurring unit cash flow. So here, you can really, really appreciate how the strategy that we were dealing with has a direct reflection -- you can directly be reflected in numbers. If we move now to the -- to where we are now and to our new strategic plan, now we are going to be focused on growing. We will continue growing 8% CAGR, higher than how the market is going to grow. We will continue focus on our debt. And now the debt that we have, the net debt-EBITDA ratio that we have is 3.8x in NPA. In the first Q of 2025 and 4Q 2025, it has been the first time where we have generated positive cash flow. So if I go back to what I was mentioning about the ratio of growth cash flow divided by the recurring cash flow, till the third Q of 2025, that ratio was higher than 100%. In 2024, it was around 138%. What means that we were going into debt to grow. But now that has changed. Our strategy has changed in for 2025 till -- for this next strategic plan. Our focus is going to be always lower to 2.5x so that in 2029, we could achieve 2.3x. So you could say if your limit is 2.5x and you are going to achieve 2.3x, what are you going to do with the remaining cash flow? So we will see. The Board will decide if it's going to be just for full growth for our shareholders' dividend or whatever. If I move into the service margin, here, we are going to achieve a 63% service margin. This one was the one that I was previously mentioned. The EBITDA pre-SAC is the 63%. If we exclude the depreciation coming from the CapEx, the figure should be 64%, 1% more. If we move now to the rest of the countries to the -- what we call it rest of the world, or ROW. Here, I am not going to explain the evolution of the -- across the years, mainly because here, what you are observing is the consolidated figures of 7 different countries. And each country has different strategy in a different moment. So it has not too much sense to analyze it globally. But I'm going to -- so I'm going just to be more focused on the last part on the Phase 3, where -- which is our strategic plan. Here, we will continue growing. We are going to grow in a CAGR of 6%. We will try to achieve in 2030, 600,000 client portfolio. And we will continue growing also in the recurrent cash flow in a CAGR of 11%. Here, as you know, this -- the rest of the world countries, they do not have debt. They are autonomous in the cash flow that they generate. The cash flow that they have is the cash flow that they can use for growing. The group is not going to provide them more cash flow for growing, just if they grow inorganically, not organically. So here, that's why they can't afford growing super fast because for that, you really need a lot of debt and the group is not going to provide it. So the debt that they have is zero. If we move into the margin, the service margin that we are going to achieve in 2029 is 51%. This one, again, is the EBITDA pre-SAC. If we go to the EBITDA pre-SAC without excluding the depreciation of the CapEx, it's 4% higher. We will be in 54%. So here, I would like just to highlight also that our focus is going to grow. It's going to continue -- we will continue growing, but always controlling the type of the growth. We wanted to growth with a very high churn rate so that our debt could not rise. And this is all from my side. I will turn the presentation back to our Alarms CEO, [indiscernible], so that he could provide you the financial -- the final takeaways.

Thank you, Maite. So basically, those are the numbers, which, as you saw, maintain the focus on growth, but on profitable growth and on profitability and with a very tight control of our cash flow and debt levels. One of the important thing that Maite passed very quickly through is that with those churn levels to -- if we manage to reduce the churn levels that we saw in the previous slide, by reducing that churn to get to the same level of customers of total customer base, you need to reinvest less, as Maite said in the beginning, in replacing the customers that you lost. So that saves a lot of money for the group. So that reduces the debt level, and that also gives us more leeway to keep growing and to look for those profitable customers that we want to look for. So final remarks from my side. As we discussed today, we want to have the best-in-class product. And for that, we have a clear road map, and we have the best partners in our hybrid strategy to build those products. We want to improve and invest in our go-to-market strategy. That means that marketing is going to become even more important in the coming years in terms of brand awareness, investment and in terms of helping us define the best high-value offer that we want to bring to the market. We want to, as I said, improve the customer experience. So that to us is absolutely critical, and that's why we have all those KPIs and metrics that we track very closely to improve month after month. And with these numbers, I think since Maite talked about MPA first, and then rest of the world, just to aggregate the numbers, we'll become a 1.5 million company in 2030. We are today 1 million company, as you know, we announced that a few months ago, and we're planning to increase by 50% by 2030, the number of customers that we serve. With, as I said, I might remark it with a lot of focus on profitability on each of the customers that we acquire and return, and of course, on debt control, so we become self-sustainable in terms of growth and in terms of what we want to invest in this business, which is a very interesting one. In terms of margins evolution, following that strategy of improving customer experience and improving ARPU. At the same time, as we control our costs. We are enhancing and improving our margins up to 63%, which is 64% if we look at excluding depreciation, and 51%, which would be 54%, excluding depreciation as well. And that's on average, an improvement of around 3-point-something basic points end-to-end, which is something that, again, is going to leave us lots of cash flow, and debt control and money that we can use to keep investing on the business. And the last figure, it could not be other than the free cash flow that we are planning to generate, the cash flow that we're planning to generate. If we look at that in terms of recurring cash flow, meaning that if we stopped the growth machine, we would be generating almost EUR 250 million by 2030 -- 2029, excuse me. So that's the conclusion of the presentation. I think now I'll pass you to Juan Ignacio, which will run the Q&A.

Thank you, Jaime. So now it's the Q&A session. We are running a little bit late, but we're going to try to answer all the questions that you may have. [Operator Instructions]. So first question here. Sorry. Before I'm going to introduce Diego. Diego is the CEO of MPA. So every question related to MPA or the Spanish business, he will be -- his demand to answer them. So that's it. Now yes, please.

[indiscernible]. I have 3 questions. The first one is for Maite. In the Analyst Day of last year, you pay a careful attention on M&A opportunities, even highlighting a firepower for them. And in this Analyst Day, you didn't pay such closer attention. So my question is, do you -- have you reconsidering the inorganic growth landscape of opportunity, taking into consideration the change in the CEO as well? I don't know if it is related or not. What are your views on this regard? Second, obviously, is Telefonica after the meaningful changes in the company's strategy, including the CFO this morning. So how do you foresee your relationship with the company and to which extent keeping a stake of 0.86% in the company is key in order to have a clear understanding of your operations? And third is also an obvious question, taking the IPO of Verisure and the KPIs that you presented today, what do you think will be a fair discount, if any, versus them in order to consider a potential disposal in the business?

Thank you, [indiscernible]. In terms of M&A, I know that in the previous Analyst Day that we did 1 or 2 years ago, we spoke about Italy, we spoke about Ecuador, we spoke about Germany, and we spoke about Mexico. Now we are -- with the new CEO, we are still open to M&A. We are already -- we are analyzing some of those countries that I already mentioned. Some of them, we already forgot about them like Ecuador or Mexico. But others, we are working on that. Even we are working in some partnerships in other countries that even we didn't mention. So we will see in the next results presentation, maybe not in the full year's one, but maybe in the first Q or second Q, we could provide more information in that regard. But as I always say, the M&A, you never know. Maybe you think that you are going to close it today and tomorrow, you're not finally signing. In terms of Telefonica, I -- we are aware of all those changes. We went to the Capital Market Day of Telefonica a few weeks ago. And it is true that the yield that Telefonica is providing now is much lower than the yield that we used to have. Now I think that it's around 3-point-something percent and it used to be close to 7%. So here, I am going to speak as a shareholder of Telefonica because in terms of how we work between -- in MPA between Telefonica and Prosegur is the ideal relationship, because we really have a very, very good relationship, even maybe Diego later could explain it or go further in that regard. But in terms of shareholders, we will -- we really do not want to have Telefonica shares. Our goal, we have a higher yield in our businesses. So it has no sense having those shares. But we will have to see the moment. Why? Because now the share price of Telefonica, I have it here, is like EUR 3.71 -- EUR 3.489, and we bought it at EUR 5.6. So we do not want to lose a very big amount. So we will see finally what we are going to do. But yes, it's -- we are not going to keep it forever. In terms of IPO of Verisure and what they have the multiple that they have paid for Verisure, I think that even with the figures that I was showing late before, here, we have like 2 different scenarios. We have South America and we have Europe. I think that Europe, Spain and Portugal, they are the same type of quality of customer portfolio. So I think that we could be very close to the multiples that they have. It is true that South America is different, mainly because we have countries with a very, very small number of subscribers. So the scalability is very difficult to achieve it, the one that Verisure or other competitors have. So I think that we -- you cannot compare exactly the same because it's not the same. So that's why even our EBITDA pre-SAC, or our service margin is going to be of 55% when in -- for example, in Spain, we are going to have a 64%. So it's just because they are completely different markets, but not because of the possibilities or the penetration capacity that we have. It's just because we do not have that scalability. We will work on that, and we will work also in some operative efficiencies so that we could achieve a better margin, but there is still a lot of work to be done there. But I think that Europe, as I mentioned in the last results presentation, I think that we really have -- we could be on the similar prices as what they have received in the IPO.

Juan Ros from ODDO BHF. I was just looking at last year's presentation and looking at the targets you provided for MPA and from ROW. And I think MPA targets, they seem like pretty much the continuation you provided until '27. So 2030 targets, they seem in line which you were providing before, if anything, maybe slightly more ambitious. But then the rest of the world targets, they seem a bit off. Maybe you're pushing back 1 or 2 years the delivery you were expecting a year ago. So my question is, what are you observing in those regions? What's the reason for pushing slightly backwards those targets?

I'm going to answer because I was the only one in the Analyst Day. So here, it is true that in MPA, it's even slightly better. So it's even better than what we released in the Analyst Day. The rest of the world geographies, they are lower, mainly because we have changed our strategy. We do not want to grow at any price. We want to grow with very good quality of clients. We want to grow -- I don't know if you could remember when I have been speaking the NPA evolution across the years that at the beginning, when you started doing a lot of promotions, discounts and things like that, your churn rate starts increasing, but also your debt. So what we need to do is to fix the basis that is what we have been doing during 2025, as Jaime was mentioning with the changes in our CRM, in our billing process and so on. And now what we have to do is we have to continue growing, but growing with common sense. Growing with a very, very good quality of client base and with a very controlled churn rate. So we prefer to have a lower churn rate with less growth, but with a lower churn rate and a better service margin than having a higher number of subscribers, but with a higher churn rate or a lower service margin.

[indiscernible] If I may, I'm going to do a couple. So first one before entering in the figures, I would first like to clarify your strategic positioning because from last year's event, one of the main messages was to stick to the current offering that is residential intrusion, rolling out entering new offerings such as smart locks, senior caring or lower cost offerings through certification and so on. So while also maintaining this technological hybrid approach that you also mentioned. So in that case, I see Prosegur somewhere like in the middle between do-it-yourself lower cost offers and premium segment currently led by Verisure. So my question is whether with the change of CEO, you keep this same positioning and market positioning, both in Iberia or rest of the world, whatever. And trust in the tech you adopt from third parties to catch up well in this premium segment? Or any comment on how you see both the low cost and more premium pressures from both sides evolving and where does Prosegur lay in that mix? And then if I may, second topic I would like to ask is regarding other agreements. We were told we're under discussions to replicate the Movistar Prosegur Alarmas strategy to enter other markets through equity joint ventures, which we've seen it's been a clear success. So if you could share with us if you have made any progress in that front? And then a last one, addressing the guidance you provided. You forecasted a decline to 8.4% churn in MPA. Just to clarify as a follow-up, if that only refers to the trade-up in customer quality, as you just mentioned or if there's something else you can do there and how that compares to the 7% churn of Verisure? And how can you do in that front? And also in the rest of the world, you are also improving the churn even more aggressively when we were told that churn was even higher in Latin America. If you could explain that trend as well.

I'll take the first one, if you want, since it's regarding our market positioning. So basically, the strategy we want to follow is that we want to become a best-in-class and a premium player on the core security market, core alarm security market, meaning that we want to have the best-in-class security product and alarm product. On top of that, we're working to bring new services and adjacent products that we can add to that one to improve the market that we can tap to sell more things to our existing customers, to do cross-selling, bundling and things that will improve our ARPU, our margins, our -- would reduce our churn because customers would become more loyal because they have more products. But for sure, we don't want to be trapped in the middle of the do-it-yourself players and the ones we saw at the right-hand side of that slide. That slide was meant to explain the technological approach to how you want to build those capabilities. But for sure, Prosegur will remain as a premium company and as a premium service, and that will be reflected in the ARPU and the price that we'll ask our customers to pay to us for those services.

Okay. And in relation to the rest of the questions, in terms of joint ventures that we could do in -- with other different companies, in other different countries, we are super open because we are very happy of how the joint venture with Telefonica have evolved. And if we could do it tomorrow in Brazil, we will do it. If we could do it tomorrow in Germany, we will do it. But unfortunately, it's not so easy. So we will -- we are trying to do something. And if we finally get it, you will know it in the future results presentation. In terms of churn, when this 8.4%...

If you want Diego to answer the churn on Spain because I think this is...

Yes, it's just Spain, perfect. Is the churn rate, why the churn rate is 8.4% and why Verisure is saying that it is lower? I think that is because the way of how Verisure calculated. No, because...

That's one point. And the other point is unless -- I know that the churn from Verisure is a blended one, so comparing all the countries. So you're not comparing like-for-like. This is the Spanish radio. I don't know the Verisure churn rate in Spain, but I guess it will be slightly higher than the 7.4% that they published. Anyway, our aim in Spain is very clear is to be the best in customer satisfaction, and that will come having -- why not? Better churn level than them. That's the plan.

They do publish 7.4%, not 7% though, but still better than ours.

The blended one.

The blended, yes.

And the last question in relation to the Latin American churn rate. This one is higher because -- and I think that you already mentioned it in your explanation. We have 2 type of clients. We have residentials, homes, houses, and we have businesses. In -- the better is to go in residentials. Why? Because the business is more -- is weaker because if the business -- if there is a crisis, or if the economy is not doing well, the business is going to close. So the Alarm will be a churn, will become a churn. So in South America, in some countries, we really have a high business Alarms clients. So that's why the difference because we -- in terms of residential, it is quite similar. So that's why we need to push more the residential type of clients instead of the business type of clients.

Alvaro Lenze from Alantra. I wanted to understand on your strategy of customer experience. You mentioned some things that from the outside, I don't know if the industry is not providing it, but it seemed quite basic stuff like not messing up with the billing and allowing the client to change the password through the app or having video. That doesn't seem too complicated. I really don't mean this as criticism. I'm just trying to understand whether providing this is what has allowed you to go down from the 14%, which was quite high to 9%? Or is -- are those changes what are going to push you down to 8.4%? Because it really didn't strike me as something that is really differentiated. It's just listening to the client and doing some basic things that we would have expected had been done already. Again, not a criticism, just as just trying to understand. And then if you do this and you try to focus on the premium market and we would expect there to be slower growth. You have provided a little bit slower growth, but still quite substantial growth. But you haven't mentioned much about your pricing strategy. Because if your product is not superior and you are going to go for the premium client, do you need to entice them somehow. So I want to understand where do you expect your service to be priced to target that kind of clients?

I don't know if you want to get the first one, and I'll can take...

Actually, you know that the sweetest spot of the market is premium, so high value, high price. Our main competitor is Verisure, and we are fighting every day. So our positioning is clearly in the premium side of the market. That's what we do.

And regarding the customer experience question, which I do understand and I do see where you're coming from and it makes sense. I think the hard part of this business is to acquire a new customer. Once you acquire a new customer, if you don't mess up, then you will get a client for 15 years. Especially because compared to other industries like telco, in telco there is a price war. There's no way that you can grow. So the only way you can grow market share is by stilling and fighting against other players. Here, you have a very healthy market growing a lot. And then if you don't again mess up and your pricing is well set and according to the service that you provide, then normally, what happens is that competition would go and tap into new markets, it would not come to steal your customers and you would not go try to steal the customers, especially in the top 2 customers or 2 players, sorry, in each of the countries. Then if you compete against second tier, then we're normally very good at gaining market share from getting the customers because our products and services are much better and advanced in terms of technology, in terms of innovation, in terms of service itself.

No. And in relation to the -- your second question about the pricing strategy. Here, we are not going to -- as we did in the past with promotions and discount rates and discount -- commercial discounts and so on. We are not going to be so aggressive in any of the countries where we are, not just in Spain that maybe was -- is the closest and maybe even you were analyzed or watching the publicity. We will just do it if we need to launch a new brand, just because it's the only way to make -- to have a name in a country. So maybe there will be some specific promotions of something, but they are not going to be so aggressive.

I don't know if -- a follow-up question, if I may. When thinking about keeping a client relationship long term and customer retention. I just wanted to understand how your partnership with Movistar, because the churn rates at the telecom company are much higher. Do you see clients that churn maybe go to change their fixed broadband from Movistar to Orange? Do they switch the Alarm or do they stay? And also, you have mentioned to approach the market relying more on third-party channels. Is that a potential threat to capturing and retaining the client and the customer experience since you no longer have control of the entry of that client?

Actually, it's a good question. Thinking in customer from Telefonica and Prosegur altogether, actually, the best churn ratio comes from customers using both the Alarm and Fusion products. So that meaning that the quality of the customer is super high, and that's good for us. So it's helping actually to decrease the blended churn ratio. And we are not worried to -- they can switch the company. Of course, we have customers from Telefonica, but also we have customers from the rest of the operators in Spain. That's not the issue.

I think one interesting thing that we can do with Telefonica is that they can -- they share with us some customer base of -- customer base that we can attack, but we don't bundle the services together. So that means that they don't get a single bill with both services. So when they change telecom providers, they might decide to change alarms providers as well, but that doesn't necessarily happen, and we don't see that really happening in the market. And actually, we tend to bundle, even if we don't bundle with a single billing, but we tend to sell together more with fixed than with mobile. And the fixed churn ratio is much lower than the mobile. So it's actually is comparable to ours, it's around 8% or thereabouts...

Fusion customers.

And regarding the channels and the loss of control, if you want, what we do because that's something that happened in Spain, and you can elaborate on Spain, if you want now, Diego, but that also happened that debate we had it for other countries. So what we do is that once they sell the customer, the ones who install and the ones who signed the contract in the customer's home is us. So that way, we control the quality and the experience of the customers that we onboard. And Spain, I think...

No, it's exactly the same. So regardless of the channel that the customer came in, we control the full customer onboarding life cycle.

I don't know if there's [indiscernible] one other question.

Regarding the service margin expansion to how much it relies on operational leverage, which I think should be the bulk of it and how much on cost savings from your new operational excellence program? And the second, on capital allocation, Maite, you mentioned that you are not willing to take debt in rest of the world, except there is M&A opportunities. Why do you think it's cheaper and less risky to grow inorganically rather than organically?

I'm going to start with the second question. I think that inorganically -- organically is cheaper to grow, but it depends on the price of the inorganic. For example, we have just bought some connections in Argentina. And it was cheaper buying the -- they were like 5,000 clients, but it was cheaper buying this M&A than doing it organically. But this is a very, very strange situation. In general, inorganically is more expensive. So that's why we prefer to continue growing organically. If there is something inorganically, I think that even -- maybe even if we introduce into a new country, it's going to be buying something very small so that later on, we can continue growing step by step. It's not going to be trying to buy, I don't know, 300,000, 600,000 subscribers in Italy. No, we are not going to do that. If we do it, it's going to be inorganically, but very, very -- something very small so that we could keep going and growing organically in that country. And I have forgotten the first question. It was about the service margin?

Expansion.

[indiscernible]

I'll take this one if you want. Yes, we're doing both things. We're actually reducing the cost structure in terms of what we do and how we do it using new technologies. And actually, one of the main investments that we did in the last couple of years, or 3 years, actually in Spain was the CRM replacement. So that took us a few months and years, and we had to invest there. Then the transformation program that we have is going to make us more efficient, and we're going to consolidate a few teams in certain areas, or countries, where we feel are cheaper and we can operate better. And the third lever, if you wish, is the ARPU expansion as well. So we're working on the ARPU expansion twofold, if you want. One is because we're reducing discounts, and we elaborated on that in our presentations. But second, because we're adding value-added services, we're adding new products and services that we want to incorporate and cross-sell to our existing customer base.

Okay. I have two questions here online, one for Maite and the other for Diego. So the first one for Maite, it's [indiscernible] Fernandez. She says, as you mentioned, EBITDA with the pre-SAC equals the service margin, which is expected to rise to 63% by 2029 in MPA. Why do you include depreciation and amortization in this figure? I thought it was just revenues subtracted the service cost. That will be the first question. And the second question for Diego is the -- what's the expected unitary acquisition cost for MPA in the upcoming years?

So in relation to the first question, because of IFRS 15, I'm not going to extend in my accounting knowledge, but more or less for trying to -- the acquisition cost of an Alarm, 35% of the cost is booked as an asset. The rest of it is booked as a cost in our P&L. Which type of cost? Installation cost, commercial cost, equipment cost, those are the 3 main ones, okay?

So in the acquisition cost side, my question would be -- the short answer is going to be pretty stable. in the coming years. But when you look at the acquisition cost, basically, you have 3 main areas. The first one is the channel mix. So depending on the channels, the acquisition cost might be higher or lower. The second area is efficiency. So we're looking for efficiency, so you can do cheaper. And the third one is, as Jaime mentioned before, as the time goes by, we tend to install more devices. And of course, the higher the number of devices you install, the higher the SAC will be. So the short answer is pretty stable, but combining these 3 points.

That's great. And here, a follow-up question for MPA, but also for ROW. It's what's the split among variable cost and fixed costs in the service cost part, what's the split between variable and fixed?

Variable or fixed within the service cost?

Yes. Approximately.

I think that -- and that's actually a very long debate that we always have because when we look at the growth, we need to analyze what's actually fixed so we can dilute fixed costs and improve margins. So that relates to the question Enrique was asking before. I would say, and keep me honest, you both, but I think around 33 -- 1/3 of the costs of our service cost is fixed, which means that, that's also why some of our other competitors with greater scale have been able to dilute those fixed costs and increase margins, which is something that we'll, for sure, be doing in the coming 2, 3 years.

That's great. So there's -- online, there's no more questions. I don't know if here one more, okay? And I guess that will be the last one because we are running out of time, okay?

Manuel Lorente from Banco Santander. My first question is regarding the growth prospects that you have outlined. There was a slide regarding the new mix. So my first question is regarding from those different channels, the expected growth, it's going to be from this mix towards telesales, third parties. So from the growth that you're expecting, which one is coming from the different channels approximately?

So on that slide, which is related to ROW, rest of the world, you could see that the third-party channels and the telesales, which are the channels that are cheaper are the ones that we are planning to grow the most. So our door-to-door sales force will remain pretty stable, and those are the two will be the ones that will be growing.

Okay. And then again, on that growth from the side of the cost per new subscriber, Diego was mentioned that you expect more or less to be stable. And in the rest of the world, it's also the same trend. And what about the revenue per new subscriber?

So SAC wise, it is a bit difficult because if we talk about that in euros, we have Argentina and other countries which make it difficult. But net-net, we're reducing SAC in the coming years through that strategy that we just discussed regarding the channel mix, which helps us control and reduce the SAC a little bit. Also, we mentioned the agreement we have with the technology partners, which will bring around 10% to 20% savings regarding the equipment. Part of it, as Diego mentioned, we'll reinvest to install more things in the customer's house. So it's not that we're going to reduce that amount by 20%, unfortunately. But that brings me to your other question, which is the ARPU because we're improving and enhancing and enlarging the equipment that we install. And since we're following a lower discount strategy and a premium pricing strategy, we'll see ARPU coming up in all markets in local currency in the coming years.

Okay. So since, let's say, growth is going to come from new channels, okay, new ways of selling to the client. That's have any issue because you're expecting at the same time to move towards the higher part of the value chain? So are you sure that you can move to this premiumization trends by selling through these channels? Is something that you have worked out that you have addressed?

No, it's a very good question. I think third party are probably less -- more difficult to be used to tap those high-value customers. What we're doing is that we're letting those channels sell to sort of the same customers that we were selling before, which, by the way, we're not that different to the ones that we want to target, since we're skimming the upper part of the pyramid in terms of value, but also telesales is an own channel, so we can use that channel to keep selling to the higher-value customers. And the door-to-door, we will be using to tap those specific highest value customers, especially because they normally need a visit to acquire a new product, or services, because they have bigger houses because they have bigger businesses. And those, for sure, need a face-to-face visit, a face-to-face assessment, security assessment you need to go tell your new customer where they need to put all the cameras, all the detectors, all the sensors. So those will be, for sure, be served by the own door-to-door sales force.

Okay. Now I have a question for Maite or Diego. For the ones that we have been in this chair for many years, we have been hearing that a partnership similar to the one that we have signed with Telefonica in Spain might come in other regions. So Diego, why don't Telefonica sign the same type of agreement with Movistar in other geographies?

Like I said before, I think Prosegur is willing to do it or to replicate the Prosegur MPA model in other countries. So -- but it's not easy. I don't know to -- the short answer is I don't know if that will happen in the future. Of course, I know Prosegur is open. Telefonica has just launch the new strategy. Let's see in the coming months if they are open to replicate the model in other countries.

But also, if I may, I've been in MPA Board for 5 years now, and I've been discussing with some of our colleagues from our internal M&A team with Telefonica team. And I think one interesting thing that happened is that Emilio Garcia was the one pushing, I think, himself for this JV in Spain. He now probably has more power in Telefonica. We discussed many opportunities in Latin America because our footprint was mainly overlapping in Latin America. They sold Hispam and Latin America business in the last 2, 3 years. So it was -- it didn't make sense for them to do a JV and then exit the market. But we still have some conversations and who knows what would happen because for us, it makes sense -- I think for Telefonica makes sense. You need to combine all interests, incentives and you need to find the right partner to do these things. It is a very successful JV, but it's not as easy as Maite was saying. It never happened in other industries and with other telcos. So we need to find the best way and the best partner and the best country and the best incentives that we can align.

And just sorry, the last one from my side...

Sorry, just to add one more point to Jaime. If you look at this type of, let's say, partnering worldwide, you can only -- you will only find MPA in Spain and [indiscernible] in Portugal, anything else. So you don't have any other example. Because that means it's not that easy.

Okay. And again, just my final one. Hearing to your competitors, looks like there is an amazing opportunity from intelligent artificial-driven type of stuff. They are mentioning that average call per subscribing is reducing by an amazing 20% from IR related issues, or in terms of customer, let's say, exclusion or the ones that -- I mean, they improve roughly 13 percentage points the way they address the correct type of guy to address the proper time at the platform. So are you already benefiting from those, let's say, issues from AI? Or it's just something that you are starting to walk?

I think we do have a lot of projects already live. I think we have the monitoring center in which we assess all the alarms that we receive in the center. And instead of having lots of agents looking at the screens, we have artificial intelligence looking at what's going on in their homes, and then passing only the real alarms to the agents so they can actually trigger the response. We have the call center -- number of calls reduction as well, as you mentioned. We have virtual agents helping our agents in the call center to bring the best response and answer to each of the calls and reducing the time that we invest in each of the calls. So I think we're pretty much advanced on those things. I don't know if you have more examples.

No. So we have a pretty big funnel today of AI projects. So the basical idea is one of -- some of them are related to how to improve the efficiency in the workplace, and that's basic part. We are already doing collaborating with Microsoft mainly. And as Jaime said before also, we have around 6, 7 projects, much more focused on improving the customer experience. Of course, they are longer because they are more complex, but we are working on that, and we will see the alarm resident center is a good one. So we are now testing the final phase of the project. And hopefully, in the coming weeks, we'll improve significantly the way we monitor the alarm and the signal from customers. That's just one example, but we have a few already being tested.

I think we are really past our time here. We're going to move to have some coffee, so we can continue answering your questions up there. So again, this is it for today. So thank you all for coming.