EUR 850.00 For Business Accounts Only

Morningstar | Prosegur Company Report

Prosegur is around the fourth-largest firm globally in the security sector, specialising in cash-in-transit and manned guarding, with a small but fast-growing alarms business. The company’s operations are more geographically consolidated than those of peers, operating in just 17 countries where it holds large market share, primarily in Latin America and Western Europe. This compares with the 55 countries, mostly developed-market ones, where peer Securitas operates, and the 90 where G4S currently has a presence.Prosegur's geographical focus is a key reason it has attained operating margins of close to 9% on average over the past decade, well in excess of the 5%-6% peer group average. In particular, its strong market position in high-margin cash-in-transit, or CIT, markets in Latin America, where the company operates in virtual duopolies, augment the group average. Acquisition activity at Prosegur has in recent years been focused on technology-based business that expand the client offering (and ultimately operating margins) in the manned guarding business, as well as on competing firms in the CIT business, whose customer bases can be readily absorbed into existing infrastructure in those areas, thereby increasing profitability almost immediately.In the longer term, we also believe Prosegur can benefit from several structural trends. Banks' and retailers' increasing focus on outsourcing of cash-related activities has opened up numerous opportunities in developed markets, which we believe will ultimately extend to emerging markets such as Latin America. In manned guarding, rising levels of travel have resulted in increased exposure to pandemic disease and international terrorism. This has led to airports and transit centres continually looking to increase and improve security measures, which, while good for the security industry, particularly benefits firms like Prosegur with high-end knowledge and capabilities.