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

Ladies and gentlemen, thank you for standing by, and welcome to the Prosegur full year 2020 results presentation conference call. [Operator Instructions] I must advise you that this conference is being recorded today. And I would now like to hand the meeting over to your speaker today, Antonio de Cárcer, Head of IR. Please go ahead, Antonio.

Good afternoon, and welcome to Prosegur's full year 2020 results presentation. This presentation is expected to last around 40 minutes and will be followed by an open Q&A session to cover any doubts or inquiries you may have. As customary, this webcast will be hosted by Antonio Rubio, Prosegur's CFO; Maite Rodríguez, Finance Director; and myself. Prior to starting, I would like to remind you that this presentation has been prerecorded. And that it will also be available for download in our corporate webpage. I will now hand you over to our CFO, Antonio Rubio.

Good afternoon, everyone, and thank you very much for attending this presentation. We are today presenting the financial results of a year that without any doubt, has been the most challenging and complex for all corporates in all industries. It's been almost a full year since the global COVID-19 pandemic was declared, and its effects are still present in most countries in the world. Before we start this presentation, I would like to express our deepest recognition to all the heroic professionals that conform our staff. Their attitude, their willingness to help and their responsibility to care of our clients and themselves has been remarkable, much beyond their duty requirements. Therefore, I would like to express our gratitude to all of them and our deepest condolence to everyone who has suffered any disease during this terrible time. 2020 will be quoted as the year of the pandemic, and many companies are nowadays being measured by their performance during this crisis. This is why I would start my presentation summarizing the main effects that COVID-19 has implied in our company and how we have reacted to them. First, I will point out the excellent performance of Prosegur Group as a whole. Being private security and essential industry for society, we have been able to continue our activity in all business lines, only restricted by the limitation imposed by the quarantines and confinements to our clients. In this regard, we are proud to state that since the very beginning of the alert, we focused all our efforts on the safety of both our employees and clients. We have promoted teleworking in all our organization, maintaining safe environments for all our employees that needed to go to premises, and no single client has been left unattended. On top of that, we also prioritized on cash flow and liquidity protection measures. Being able to sustain an excellent EBITDA to cash conversion ratio and maintain a solid firepower without tensioning our comfortable leveraging level. Business activity-wise, the effects of the pandemic had been different depending on the product. Cash has seen a decrease of volumes transported during the worst moments of the confinements, mainly in Europe or Asia Pacific. However, although the situation has been somewhat similar in Ibero-America, less strictness on quarantines and higher dependency of population on cash for their daily lives have made the situation more sustainable. Even to the point of generating positive organic growth, which has also been formed by extraordinary services to support government aids programs. Despite those negative effects, cash has shown a very fast recovery capability when market conditions come back to normal. Security, on its side, presents a different profile. COVID-19 effects had also damaged revenue growth, mainly due to the general slowdown of the economy and the temporary cancellation of airport services and large events. On the positive, coronavirus has raised an opportunity on new services that have been able to grasp. The concept of COVID-free solutions for our clients was developed in the record time. And has become a very powerful driver for the integrated security solution under new safety variants. As a consequence, margins have improved significantly on the year. Even considering that, we have not been able to extract all efficiencies possible in LatAm due to shortening government limitation to cost-adjusted measures. Finally, Alarms has also seen different dynamics with coming from the effect that home confinements had, had on our commercial activity. This has been temporarily inhibited, while part of the population was asked to stay at home. Nevertheless, even with those strong limitations, our joint venture with Telefónica, Movistar Prosegur Alarmas has managed to increase by 4 the number of new clients in Spain compared to previous year without a noticeable churn variation. This keeps us extremely confident of the phenomenal speed of growth this business will deliver as soon as the condition return to normal. Similar dynamics will also be seen in the rest of the countries since our commercial activity returns to full speed as the market demand and growth potential for this type of home security system remains untouched and with great perspectives. Let's now move to a summary of the main financial indicators of the year. Revenues have totaled EUR 3,463 million. With very slight positive organic growth that can be considered a major achievement, if we take into consideration the severe impact of the pandemic has generated in all levels of the economy. And that translates into lesser activity on our clients. In euro-reported terms, our revenues suffered from the translational currency effect deriving from the devaluation seen on the year of both the Argentinian peso and the Brazilian real. And to a certain extent, from the divestment made in Security in France and in Alarms in Spain. Profitability-wise, recurring EBITDA of EUR 287 million is also a good figure. Coming from the combination of the structural profitability improvement we are seeing in the Security business, the negative FX impact on margins in cash and the efficiency plans and cost-cutting measures implemented at group level. It's also worth noting that the profitability in the Alarms business is also growing as the business gains scale improving its EBITDA pre-SAC margin for the fifth year in a row. Cash flow generation has also been very good in such a hazardous year. Processes optimization projects deriving from some of our digital transformation initiatives are due an excellent result in cost control and working capital improvement, and have allowed the group to deliver the highest historical EBITDA to cash conversion ratio. More on this on next slide. I would like to restate the permanent nature of these efficiency processes that will allow us to continue optimizing costs in the years to come. And finally, on the liquidity and balance sheet side, we are also very proud to state our solid position. As Maite Rodríguez would like to explain, we have been able to maintain a comfortable leverage ratio, even with the extraordinary liquidity requirements specifically taken during the pandemic. Stemming some of our debt maturities and reducing our corporate cost of debt to have a very solid liquidity position that will allow us to face any type of investment in the near future. In summary, once again, better-than-consensus business performance results with better profitability than expected, while maintaining a very sound financial position even during the toughest parts of the crisis. As mentioned before, a big part of this successful initiative is a consequence of our digital transformation projects. So here to move onto the P&L analysis, I would like to take some extra minutes to comment a bit more extensively on this. As you may know, 2 years ago, we initiated a very ambitious project to [indiscernible] size of our operational and administrative processes. The goal of this project is to generate a new Prosegur operating model, leaner, more efficient and highly scalable, strong extensive use of the latest technologies. Moreover, the digital transformation project was not only intended to serve as an internal improvement of our own tools and processes, but also to generate new innovative services and solutions to our clients. In this regard, a series of investments were planned, and several internal projects were launched. All of it, together with the creation of an innovation organization within the group to change all these internal and external initiatives and ideas towards the client. As of today, several positive results have come out from this strategy. Our strong collection and client risk analysis system that has enabled us to reduce DSO in all business lines and is partly responsible of the excellent working capital result of this year. The reduction of 11 basis points of idle cost over sales, the saving of more than 28,000 hours per year on operational mistakes, or a 97% reduction on sanctions deriving from SLA breaches and clients are just some of the achievements we have obtained from this transformation. On the product side, there are many innovative and unique solutions such as Prosegur Crypto, our cryptocurrency customer service or many other type of services oriented to financial business process outsourcing. They're a very tangible proof of our capabilities to push our offering outside the traditional envelope. Additionally, the creation of GENZAI, an innovative intellectual property asset that combines artificial intelligence, machine learning and IoT for intelligent image and video processing is already being deployed in clients. A secondary branch of this GENZAI project will also be used to automatize and generate improvements in our Alarms reception center, and in the near future will also be transferred to the domestic system we install in our customer homes. During 2020, an important part of those projects were put on hold as a prudent measure to guarantee liquidity and cash protection amidst the uncertainty of the initial stages of the pandemic. Now that we have a better visibility of our financial strength, and given the excellent result obtained by this type of projects, we are resuming the calendar of investment that will run for the incoming 3 years. Digital transformation projects and innovation, together with sustainability are the main pillars of our new strategic plan. And they represent the fastest way to increase profitability and gain market share. We will keep you regularly updated on these topics as we strongly believe that they can have a positive impact on our share valuation. Let's now move back to our 2020 results, and analyze our P&L that looks as follows. As indicated previously, total sales figure in the period has been EUR 3,463 million, 17.5% less in comparison to the year 2019. Organic growth has remained flat. We've had a slight positive increase of 0.1%, a major achievement considering the strong activity reduction seen in all our clients during the lockdowns and a solid proof of the resiliency of our business model that maintains a significant level of demand from society, even in the most adverse situations. As you can see on the chart, the main reason of this revenue reduction comes from the combined effect of almost 13% negative currency devaluation impact, plus the close to 5% negative and organic deriving from the final deconsolidation of Security in France and Spanish Alarms business now operated jointly with Telefónica. I would also like to point out that this organic revenue stagnation has come mainly from a reduction of volumes due to lesser customer activity. While price increases have been carried out normally without any sort of incident and full passing to market the expected increments. This is another evidence of the structural strength of our business model. And we are confident volumes will come back gradually to previous year levels as soon as the situation normalizes. Reported EBITDA of EUR 409 million includes both efficiency programs in cash and the positive effect of the government aids received in the U.S., Australia and Singapore. EBITDA totals EUR 258 million, including those effects. And finally, net profit amounts EUR 69 million. That drives to a consolidated EUR 59 million result when deducting the minority stakes of Prosegur Cash. Let's look now at the breakdown of revenues by business line and geography. All business lines report negative evolution in euro terms. Although as we see later, we're analyzing its individual activity. Most of the revenue deterioration is of depreciated currency nature as both Cash and Alarms exhibit positive organic growth, and only Security has suffered from a negative outcome due to the severe reduction of the airport contracts in the U.S. Additionally, both the deconsolidation of France in Security and Spain in Alarms also increased the local currency loss in this and negative comparable effect that will be offset in the coming months. When looking at the results by region, we see similar behavior. The biggest impact is in Europe that includes all the aforementioned negative inorganic from the French and Spanish divestments, plus the strong effect that COVID crisis has shown in mature economies, where the strictness of confinement and quarantines has been more intense than in the rest of countries. And hence, the stoppage of certain activities has been more severe. Moving into Ibero-America region, we see local currency growth slightly about 6%. This comes from the combination of more sustained volumes during the pandemic. Benefit from the additional extraordinary services performed in some countries to support the delivery of government aids to population, with the M&A transaction done in Ecuador, where we have become the largest cash management operator in the country. And also in Colombia and Brazil. Finally, rest of the world region remains almost flat with a small 0.2% decrease in local currency terms. One of the main contributors of this region is U.S.A., that has been one of the most affected geographies within the Security perimeter. In that country, a large portion of our revenues comes from the aviation industry that, as you know, has been one of the most hit by the corona crisis and therefore, has translated this volume drop-downs also to their suppliers. Regarding the U.S. market, I would like to point out that this market is becoming the spear point of our new products and services within the Security and Cybersecurity business lines. Strongly benefiting from the accumulated experience of Prosegur in different type of customer industry and leveraging on the previously commented innovation model, we had predefined our commercial value proposition gearing it towards specialized customer industry solutions or vertical, of which the retail sector, the competing computing industry and the logistic clients are already benefiting. Let's move now to look at the profitability and cash flow generation on the period. Recurring EBITDA has topped EUR 287 million, thus making an EBITDA margin of 8.3%, very close to the same figure in 2019 and that would evidence of our careful margin protection strategy during this year. As we have been reporting across the whole year, in the recurring EBITDA figure, we are excluding the efficiency plan cost of EUR 29 million put in place in Prosegur Cash. The reason for this is to bring to market a more realistic view of the real profitability of the business as this efficiency plan is of nonrecurring nature. It is also worth noting that our EBITDA has also been positively affected by some government grants in the U.S., Australia and Singapore. The nature of those aids is to cover the level of costs related to contracts that have been suspended or put on hold by the pandemic. Although they are of nonrecurring nature, we are including them in our profitability statements as they are a replacement to a loss revenue that will be reassumed when the situation normalizes. Looking now at the cash flow generation, we continue with the excellent cash flow generation trend we have been sustaining around the whole year. I won't extend myself too much on this topic as our Financial Director, Maite Rodríguez, will later give you lots of detail on the composition and main drivers of our cash flow statement. But I would like to overstate once again the extraordinary work all of our commercial and financial departments had made during this difficult year to protect our liquidity and increase our cash flow. Cost adjustment measures put in place in record time together with a rigorous client risk analysis have helped us to optimize our working capital. A major task considering how also clients are looking to optimize theirs and also would prove the quality of our customer portfolio. This, in combination with other cash-out protection policies, such as discrete dividend offered to our shareholders, have led to an unprecedented 82% EBITDA to cash conversion ratio. This is all on my side for now. I will now hand the presentation over to our Head of IR, Antonio de Cárcer, who will provide you with more detailed information on the performance of each individual business line. I will join you again at the end of the presentation to comment our sustainability projects and achievements to give you my closing remarks and outlook for 2021.

Thank you, Antonio. We will now have a look at the breakdown of revenue structure and main profitability drivers of each activity as well as some other relevant key performance indicators. Starting with Prosegur cash revenues chart, we see that organic growth has remained slightly positive despite the strong negative effect of the third wave of the pandemic. Those effects have been more visible in Europe due to the higher strictness of the confinements and lockdowns. In Ibero-America, volumes have been kept more sustained, growing up to 9% in local currency terms, a very good result, even considering the termination of the special aid programs in which we have been helping some governments to distribute COVID aids to population. Inorganic growth has also been positive deriving from the transactions made in Ecuador, Colombia and Brazil. And as you can appreciate on the chart, the main revenue reduction driver has been the negative translational currency effect. Those negative effects have been somehow mitigated by the increase of new products that now represent almost 19% of the total revenue figure, and that have shown an exceptional resistance to the negative effects of the quarantines and lockdowns. New products have grown in almost all countries of cash perimeter, mostly in Europe, fueled by our digital transformation, of which we are reinforcing investments to be ready for future challenges and opportunities. On the profitability side, if we exclude the efficiency programs currently undergoing, the business has obtained a total figure of EUR 214 million, that implies a 14.2% EBITDA margin. Profitability in absolute terms is still driven by the reduction in volumes of cash transported because of the COVID crisis, while in relative terms, EBITDA margin of 14.2% also reflects the impact of FX in the product mix. Moving on to Prosegur Security, we see our revenues figure in the full year of EUR 1,740 million. Organic growth has experienced a slight 2.1% decrease coming mainly from the strong reduction of our airport security services in the U.S., but also from the extension of all the large event services usually we make every year in sport competitions, concerts and other big social gathering events that, because of social distancing measures, have been this year reduced to almost nothing. Additionally, there has also been some volume reduction coming from our voluntary refusal to certain nonprofitable contracts as part of our commercial discipline, focused on recovering profitability above sales growth. Nevertheless, there have been some interesting volume increases of traditional guarding in Spain, Portugal and Argentina with better margins as they were required as extra services to guarantee social distancing control and also an increase of technology sales, mainly in Brazil and Spain. The main negative effect of the consolidated revenues figure comes as similar in Cash from the negative FX. And in the case of Security, it's also supplemented by the divestments made in France on the inorganic side. New products have experienced a very important increase during the year, mostly due to the expansion effect made by the COVID-free solutions we developed and packetized very quickly to help our clients to guarantee the safety of their employees and their customers or visitors. Although these type of solutions only accounts for 5% of the total new product revenue line, they have proven to be an excellent door opener for the rest of monitoring and other technology-based solutions and have become a full suite of safety solutions aim to guarantee healthy working spaces for our clients in many more aspects than the solely related to coronavirus. Profitability has also benefited from this. EBITDA has totaled EUR 68 million, yielding a 3.9% margin. This excellent margin result comes from the combination of increased technology sales, reduced exposure to nonprofitable clients and also from some extraordinary income received in the form of job-keeping aids in both U.S. and Singapore. Nevertheless, if we exclude the surplus effect of those grants, EBITDA margin should be of 3.6%. Still an improvement over previous year margins and a good proof of the structural positive growth trend that our margins on the security business are experiencing since 1 year ago. Finally, let's look now at the performance of the Alarms to conclude this business line breakdown analysis of the full year 2020. The total installed base generally delivered by both Prosegur and Movistar Prosegur Alarmas has reached 604,000 connections, a 5% more compared to 2019. As we've been explaining during the year, the main negative effect of COVID pandemic on the Alarms business has been the temporary limitation to the commercial activity deriving from the citizens' confinements that have happened in all countries. This has implied roughly 5 full months of sales stoppage. And that period of time, the installed base has been suffering from some increased churn rate on the side of small commerce clients, with no new sales to offset it. Nevertheless, revenues have increased organically by almost 16%, being this a good proof of the strong price passing capability this business has embedded. While the negative inorganic corresponding to the deconsolidation of the Spanish Alarms sold to Telefónica and the negative FX have reduced the sales figure in euros to EUR 196 million. Movistar Prosegur Alarmas, the joint venture created with Telefónica to address the Spanish market has on its side, increased installed base by more than 46,000 new clients. An extraordinary result, considering the previously mentioned sales stagnation that has been reached in barely 6 months of sales, still with several market limitations deriving from the corona crisis in Spain. This is a major achievement that quadruples the growth ratio of Prosegur in Spain in previous years, and that gives a clear indication of the strong growth potential this business can develop when conditions come back to normal. Finally, ARPU has remained stable at EUR 31 in Prosegur perimeter and EUR 39 in NPA, only losing some cents in comparison to previous quarter on Prosegur side due to the FX variations and churn rate. I would now like to take some extra minutes of your time to comment on the profitability and cash flow generation capabilities of the Alarms business. As you know, Alarms is a pure push business in which we need to invest an upfront amount to gain the client, this being denominated subscriber acquisition cost, or SAC, that will be later recovered along the life cycle of the contract through monthly installments or ARPU. Therefore, strong growth demands high investments. And hence, in this type of business, the most efficient way to measure profitability is using the concept of EBITDA pre-SAC. This is the EBITDA generated by the whole existing base, taking apart the cost of acquisition of new clients. As you can see on the chart, our EBITDA pre-SAC margin on the Alarms business has been growing constantly over the past 5 years, being 47.9%, the compound figure of the total installed base at the end 2020. The breakdown of this margin is 53% for all the Spanish connections and 43.2% for the ones remaining under direct Prosegur control. The reason for that difference relies on the different density per country of each perimeter as Alarms margins benefited strongly from operational synergies as the scale grows. Nevertheless, we expect this EBITDA pre-SAC margin to continue increasing in both perimeters in the incoming years. Similarly, operating cash flow generation in the Alarms business also presents an increasing upward trend. The second chart on the slide shows that Alarms are an exceptional cash flow generator, able to produce more than EUR 100 million per year, even in complicated years such as the one we have passed, that normally will consume the generated cash flow as investment to obtain more new clients. This excellent cash flow generation guarantees the capability to grow the business very fast without leveraging the company. And it's clear to see that in the event of decelerated sales situation, cash flow becomes positive. We hope this additional insight of the profitability indicators of the Alarms business may be useful for you. And will also help the market to recognize the real value of this business, which, as of today, we believe, is still undervaluated. That was all on my side related to the evolution and performance of our principal business lines. I will now hand the presentation over to our Finance Director, Maite Rodríguez, who will cover the main financial parameters of this full year 2020 results.

Thank you very much, Antonio. Good afternoon, everybody, and thank you very much for attending this presentation. Let's now have a closer look at our cash flow statement, financial position and balance sheet. Looking at the cash flow statement, you can appreciate a strong operating cash flow in excess of EUR 300 million, which implies an outstanding EBITDA to cash conversion ratio of 82%, after normalizing the accounting impact of the IAS 16, the highest level achieved in years. This accomplishment is especially remarkable considering the adverse circumstances Prosegur has faced during this year, not only because of the pandemic, but also due to the adverse effects. I would like to comment on the main variations of the operating cash flow during the last quarter. The evolution in provisions and other noncash items is driven by the following main aspects. First, tax payments deferrals paid during this quarter, mainly in Brazil and Germany, as a measure implemented by local governments derived from COVID-19 crisis. And in second term, the annual Christmas salary payment, combined with the additional impact of IFRS 16. In terms of working capital, the significant improvement you can appreciate is mainly consequence of the excellent performance of our collection and credit risk department, which has meant an enhancement of DSO without needing to resort to any further financial instruments. At a lesser extent, sales drop deriving from lockdowns has meant a positive impact on working capital as well. During the whole year 2020, Prosegur Alarms, excluding NPA, has generated EUR 45 million which are a part of the operating cash flow. Nevertheless, we usually reinvest a similar amount to fund the growth of the business and thus, it remains self-funded. In 2020, CapEx has been reduced significantly, more than 30%, both in client and infrastructure CapEx following the strict cash protection measures implemented at the beginning of the lockdowns. In 4Q, another SCRIP dividend was offered to Prosegur shareholders. Thanks to these 3 Prosegur SCRIP issues, together with the additional 2 reinvestment program performed in Prosegur Cash, the group has obtained savings over EUR 36 million. In this regard, I would like to point out the 5-plus percent dividend yield of Prosegur shares and also the recently approved EUR 68 million interim dividend out of the results of 2020, payable in 2021. When it comes to others, it mostly includes the share buyback investment program and the adjustments driven by the consolidation of the Spanish Alarms division. While in December 2019, this figure was positively affected by the divestment in France and South Africa cash businesses. All in all, Prosegur keeps proving its resilience and strong cash generation capability even in the toughest of environments. In this regard, I'm being aware of the market concern on FX evolution, I will take the opportunity to briefly refer to Prosegur's broad experience in foreign currency management that historically has turned out in significant efficiencies in both cash and cost structure terms. Traditionally, currency situation is addressed proactively within the group through 4 main levers, adapted to the reality of each geography. First, our centralized treasury policy implies that in general terms, all surplus cash allocated in each region should be converted into hard currency and repatriated to the holding company. Periodically Prosegur assesses the operating treasury needs country by country, adapting the repatriation model to all the individual requirements. Following this method, we avoid inefficiencies and obtain a deep knowledge of the business evolution in the different areas we operate. Second, to take advantage of the intense currency devaluation existing in some specific geographies, we intentionally allocate several corporate costs there, such as shared service centers or digital transformation projects. This approach means direct savings and efficiencies. The third pillar of our strategy is based on natural hedging. This implies covering a specific financial needs by raising local debt in the region where it is needed. There are many examples that can be used to illustrate this. For instance, the difference financial facilities structured in the past to finance M&A opportunities such as Brazilian debenture, South African loan, Australian syndicated loan and so on. Also, the current short-term Argentinian debt, which allows us to anticipate the repatriation of the future cash flows, softening the impact of the valuation. At last, active dividend management is also a key aspect, not only in FX terms, but also in tax issues. Since regulatory changes in this phase are quite frequent, our preliminary analysis is always prepared before executing any dividend action. When it comes to FX future evolution, we are constantly assessed by economy experts to better understand currencies behavior and potential trends. And that also applies when setting the dividend strategy. Looking now at the group's financial position, we can see that at the end of the year, total net debt amounted to EUR 954 million, including both deferred payments of EUR 97 million and treasury stock at market price of EUR 32 million. It will furthermore include additional IFRS 16-related debt of EUR 93 million, total net debt reaches EUR 1,047 (sic) [ EUR 1,047 million ]. Regarding net financial debt, when compared to the third quarter of 2020, you can appreciate quite a significant deleverage of more than EUR 30 million. This has been mainly driven by the strong cash generation, together with the CapEx containment, reinvestment dividend program and a skilled management of working capital. Despite the mentioned achievements, you can appreciate a slight increase of the leverage ratio, which closes the year at 2.4x net debt to EBITDA. These circumstances is fully explained by the temporary deterioration of the results due to FX and the corona crisis, along with the expenditures in the share buyback program. In fact, normalizing the one-off impact of treasury stock buyback during 2020, this ratio will be lowered to 2.1x. In this context, I would like to highlight that Prosegur remains comfortable with its debt level since it remains far below the current banking covenant of 3.5x. In terms of net financial debt-to-equity ratio, the indicator has also suffered a temporary deterioration, mostly justified by FX and Telefónica share price dropped during the last few months. As always, Prosegur will continue to follow its traditional financial discipline, which is in our DNA, guaranteeing a healthy and sound financial position. The best evidence to prove our financial resiliency is the confirmation of Prosegur BBB stable rating by S&P after their last annual revision back in October 2020. As far as pure cost of debt is concerned, our group's average keeps evolving positively with a reduction of 24 basis points when compared to the same period last year. In this respect, the cost linked to funds repatriation process has been considered FX cost since it is a direct consequence of the highly volatile currency environment. To conclude with our financial information review, let's now have a look at our consolidated balance sheet. Besides the intense translational impact coming from currencies, mainly Brazilian real and Argentinian peso, during the last quarter of the year, there have been 2 main aspects worth noting. On one hand, the share capital reduction performed in October and December by the cancellation of 50 million owned shares, which were previously acquired under the share buyback program. Consequently, by the end of 2020, the share capital of Prosegur is represented by 549 million shares coming from 599 million shares at the beginning of the year. On the other hand, we have taken a further step towards a healthy balance sheet, recognizing a partial impairment on the Australian cash business of EUR 27 million. Even though our position in the country is solid, being the second biggest operator, we have taken this decision due to the general profit pool reduction suffered by all the players in the region, mainly deriving from the corona crisis and its consequence effect in the economy of the region. Divestment-wise, assets and liabilities related to Prosegur Security operations in France, which during previous quarters have been classified as available for sale, are eventually out of the consolidated balance sheet since October when the official sell date took place. When it comes to maturity profile, once again, I would like to highlight that Prosegur remain extraordinarily solid. We are proud to confirm that more than 80% of our financial liabilities are considered of long-term nature. During February 2021, an extent of the revolving syndicated credit facility has been accomplished, which means an additional improvement in our sound balance sheet, extending this facility maturity until 2026. Last but not least, it is worth mentioning the highly comfortable level of liquidity of firepower, which currently covers more than 75% of the main indebtedness, which will mature over the next 6 years. That concludes my presentation for today. I would like now to return the presentation back to our CFO, Antonio Rubio, who will share with you the ESG achievements accomplished during 2020 and his final conclusion and remarks. Thank you very much for your attention.

Thank you, Maite. Prior to my closing remarks, I would like to make a broad overview of the development of our ESG initiatives around the year. 2020 is going to be remembered as the year of the pandemic, but it's also very clear that it will be also recalled as the year most corporates began to disclosure sustainability matters in a more structural way. For us in Prosegur, this is very good news as we can now share with the market, all our many ongoing projects and commitments with the environment, the society, our employees and shareholders. In this regard, we have established several lines of action around the 17 United Nations Sustainability Development Goals. Using that once our company can really make a difference, initiative to improve, outperform or just simply let the market know that we already were doing right. As you will see on the next slide, during 2020, there has been a lot of work done. Too much to cover in just one presentation. So I will, for today, comment on some of the most relevant aspects of individual goals and we'll expand more information in next communications to market. The first and probably most important fact to note out is the one related to the creation of a new sustainability committee at senior management level. With this new organizational body, we want to make sure that all our ESG policies and procedures are fully implemented on a top-down global approach. On the responsible construction and production goal, many different projects are being carried out. But possible, the most remarkable achievement during 2020 has been the reduction of 10% of our emission at constant perimeter, a solid initial stage towards more environment conscious transport infrastructure, that will continue being developed in the coming years. Also, on our commitment to reduce emissions, we are proud to report the introduction of the industry's first 100% electric cash in transit vehicles, already operating in Germany, and that will continue being deployed in other countries and on the next years. In respect to the decent work and economic growth goal, I am pleased to report the launching in 2021 of the Empower Women Program aimed to increase the percentage of women working in our industry. On the vision related to quality and education, we had very strong global training platform eliminated Prosegur Corporate University that is constantly releasing training and educational contents for all our employees. This year, we have also included in the platform a mandatory training plan on sustainability for all Prosegur workers effective since January. Health and safety is another area of maximum attention to us. Making our employees aware and self-protective is a key element on this goal. In this regard, during 2020, we have strongly implemented the number of hours dedicated to training on occupational health to total an outstanding amount of 770,000 hours. And finally, I would like to highlight the extraordinary social action that our foundation has been doing over the past 20 years. Prosegur Foundation is the instrument that materialized the commitment of Prosegur to contribute to the progress of the regions where we operate. Supporting education as an indispensable driver of change, promoting the inclusion of people with intellectual disabilities and promoting volunteer actions and channel the solidarity of the professionals of our company. As you can see, 2020 has been a very active year for all organizations gearing towards a more structured and rational way of presenting and reinforcing all our ESG activities. Now for my closing remarks and conclusions, I would like first to restate once again our deepest appreciation to all our professionals that had spent the worse of the pandemic on the frontline, helping and supporting our clients and society to stay safe. There have been countless scenarios during this year where our professionals have demonstrated their commitment with our clients and their responsibility in their important role of keeping population safe. Their attitude and willingness have been remarkable, and all of us feel extremely proud of working alongside with them. I want also to remark the strong resilience to the crisis that all businesses have shown. Despite some temporary negative effects on sales deriving from confinements, all 3 activities have performed very much in line with their market possibilities. And in the case of security, even increasing profitability, taking advantage of the situation to develop new services and solutions. We know the crisis is not yet over. But we believe the worst of it is now behind us. Q1 2021 presents some challenges as severe confinements and commercial limitations are still in place in countries important for us, such as Germany, Argentina or Peru. But we remain optimistic on the capabilities of the group to resume growth in all areas as macro conditions improve. Talking about new products and services, there has been an increase in the penetration in all business lines. In the case of security, driven by the high demand of safety solution that also acts as booster for the adoption of technology solutions within the clients. Similarly, Movistar Prosegur Alarmas has managed to multiply it by 4, the number of new connections in Spain, even with all the safe limitation imposed by the pandemic. And it has become obvious that this type of a strategic alliance with large commercial partners is something that we will continue being explored in other geographies. Digital transformation and innovation plans are a key element of our future development as it has been proven by the good results of the already implanted new back-office processes. We are now resuming the investment in those 2 areas that have been [indiscernible] put on hold at the beginning of the COVID crisis. These will help us on keeping our goals of gradually reducing DSO to improve working capital and continued focus on guaranteeing liquidity, of which we had already announced a EUR 68 million dividend based 2020 results. And finally, I would also like to reinforce our commitment with sustainability. As you have seen, we have been working hard on all ESG aspect of our company. As it has also become one of the key elements of our new strategic plan that will drive the development of Prosegur in the coming 3 years. This is all on my side for the results presentation. Before moving to Q&A, I would like to communicate to you all that we will be hosting a Capital Markets Day sometime in the first half of 2021 to give you better information on our innovation strategy and future development of our company. We will look forward to meet you then. Now I would like very much to take all your questions and comments. Thank you very much.

[Operator Instructions] And your first question today is from [ Pedro Alvarez. ]

I have 2, and the first one is on security. Being this a late-cycle business, should we expect this year any positive growth in terms of volumes? And then in terms of pricing, how do you see this year the cost inflation transferred to your clients. And then the second question is regarding Alarms, the outlook for this year. What is your expectations in terms of ARPU and target -- any kind of target of connections, both for Movistar Prosegur Alarmas and the rest of your portfolio.