Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Investor Presentation (June 2019)
42 slides from Brinks Company (the)'s investor presentation, Jun 3, 2019
Slide 1: Investor Presentation June 2019
Exhibit 99.1 Investor Presentation June 2019 NYSE: BCO
Slide 2: Safe Harbor Statement and Non-GAAP Results
Safe Harbor Statement and Non-GAAP Results These materials contain forward-looking information. Words such as "anticipate," "assume," "estimate," "expect," “target” "project," "predict," "intend," "plan," "believe," "potential," "may," "should" and similar expressions may identify forward-looking in
Slide 3: World's Largest Cash Management Company
World’s Largest Cash Management Company Pro forma includes full-year data for Dunbar 2018 Global Market Leader Revenue1 Countries Regions 2020 Global cash market ~$20 billion1,2 NA, SA,EMEA, Asia Brink’s $3.7B 117 Pacific Other Loomis $2.2B 20 EMEA, NA Loomis SA, EMEA, Asia, Prosegur $2.0B 22 G4S Au
Slide 4: Lines of Business and Customers
Lines of Business and Customers 67% of Pro Forma Segment Revenue Outside of U.S. 2018 Pro Forma Revenue by Line of Business1 Customers Guarding $0.2B (4%) Financial High-Value Retail Institutions Services $3.7B $1.6B CIT/ATM (44%) $1.9B (52%) Government/ Other High-Value Services • Brink’s Global Se
Slide 5: Strong Position in Key Markets
Strong Position in Key Markets Estimated Market Share United States Canada Mexico Brink’s Other Other Dunbar Loomis Garda Other Cash GSI Competitors Garda Argentina Brazil France Brink’s Brink’s Brink’s Other Rodoban Other Other Maco Loomis Temis Prosegur* Protege Loomis Prosegur Prosegur 5 Note: In
Slide 6: Three-Year Strategic Plan – Strategy 1.0
Three-Year Strategic Plan – Strategy 1.0 Organic Growth 2017-2019 13.3% Margin * Strategy 1.0 • Close the Gap Core Organic Growth • Accelerate Profitable Growth Adj. EBITDA $500 Op Profit $330 • Introduce Differentiated Services – technology-driven 2017 2018 2019 2020 2021 6 Note: See detailed recon
Slide 7: A Clear Path to Value Creation – Strategy 1.0
A Clear Path to Value Creation – Strategy 1.0 Organic Growth 2017-2019 Strategic Plan Non-GAAP Operating Profit (Non-GAAP, $ Millions) (excluding Acquisitions) Adjusted EBITDA $342 $500 Breakthrough Initiatives $380 $330 $325 2019 Target March 2017 $216 Investor Day 2016 Branch Fleet Crew Labor Netw
Slide 8: Three-Year Strategic Plan – Strategy 1.0 + 1.5
Three-Year Strategic Plan – Strategy 1.0 + 1.5 Organic Growth + Acquisitions 2019 Adjusted EBITDA Target $600 Million 3-year CAGR ~21%* Strategy 1.5 Acquisitions • Focus on “core-core” & “core-adjacent” • Capture synergies & improve density13.3% Adj. EBITDA $120 • 10 Acquisitions closed to date Marg
Slide 9: Strategy 1.5 – Core Acquisitions
Strategy 1.5 – Core Acquisitions Synergistic, Accretive Acquisitions in Our Core Markets Core Acquisitions-to-Date • 2017: 6 completed France • 2018: 3 completed - Dunbar (U.S.), U.S. (Temis) Colombia (minority partner buyout) and (AATI) U.S. (Dunbar) WorldBridge (Cambodia) Brazil • 2019: Rodoban co
Slide 10: Strategic Plan Operating Profit 2017–2019
Strategic Plan Operating Profit 2017– 2019 (Non-GAAP, $ Millions) 24% Operating Profit CAGR Adjusted EBITDA $342 $600 OP Margin 7.4% ~11% $475 - $495 ~ $105 $405 - $425 ~ $380 ~ $105 1.5 $325 Acquisitions 2019 Target March 2017 ~ $310 $216 Investor Day = Organic 1.0 + 2.0 Operating = Closed Acquisit
Slide 11: Strategy 2.0 – Total Cash Ecosystem
Strategy 2.0 – Total Cash Ecosystem Further Expansion into Cash-Related, High-Value Services Strategy 2.0 • Expand high-margin, high-value, cost-effective service offerings: Expand Services o Increase share with existing customers via a broader array13.3 of% high-value services Margin & Customer o A
Slide 12: 2019 Guidance Affirmed
2019 Guidance Affirmed (Non-GAAP, $ Millions, except EPS) Revenue +9% Op Profit +20% Adj. EBITDA EPS Constant currency +15% Constant currency +37% Constant currency +30% Constant currency +44% Organic +6% Organic +27% +17% +21% Acq/Disp +8% Acq/Disp +10% FX (6%) FX (17%) $590- $405- $4.10 - ~$3,750
Slide 13: Performance Drivers – 2019 Guidance
Performance Drivers – 2019 Guidance (Non-GAAP, $ Millions) • Continued improvement in U.S., expect to exit 2019 at ~10% margin • Targeting post-synergy U.S. margin of 13% in 2021 • Continued revenue and profit growth in Mexico • Improved results in France and Brazil • Includes $20 - $30 million in o
Slide 14: Argentina Operating Profit: 2019 versus 2018
Argentina Operating Profit: 2019 versus 2018 Illustrative Devaluation Impact (USD / ARS Rate: 44.6 as of May 30, 2019) FY Impact 2019 Average BCO Alternate 2019 USD / ARS ~39 ~44 ~47 ~49 ~45 Exchange Rate: Guidance Scenarios (8) Jan. – May ~41 ~41 ~41 (17) (11) (55) (Actual) Op Profit (19) Jun. – No
Slide 15: CapEx Expected to Return to ~4.5% of Revenue in 2020
CapEx Expected to Return to ~4.5% of Revenue in 2020 Capital expenditures 2015 – 20201 (Non-GAAP, $ Millions) Higher 2017-19 CapEx reflects investment in strategic initiatives ~$220 High Return Growth $185 $182 CapEx High High Return Return Growth Growth CapEx CapEx ~4.5% of Revenue $124 $106 Facili
Slide 16: Free Cash Flow
Free Cash Flow (incl. completed acquisitions) $600 Adjusted EBITDA (Non-GAAP, $ Millions) $45 Working Capital: Targeting ~flat Cash Restructuring: ~$45 million, primarily acquisition-related $512 $65 Cash Taxes: Higher income offset by lower ETR, FTCs and refund timing $36 $425 $80 $91 Cash Interest
Slide 17: Net Debt and Leverage
Net Debt and Leverage (Non-GAAP, $ Millions) Net Debt Adjusted EBITDA and Financial Leverage Significant capacity for acquisitions Leverage Ratio2 1.4 ~1.3 2.4 ~2.0 ~2.0 Adjusted ~ $1,300 EBITDA + ~$480 ~$595 ~$645 Synergized $1,214 Acquisitions $612 ~ $600 $512 $512 $425 $425 Dec 2017 Dec 2018 2019
Slide 18: Comparison to Route-Based Industrial Services Peers
Comparison to Route-Based Industrial Services Peers1 Peers Brink’s Specialized fleet Focus on route density and optimization Strong recurring revenue High customer retention Ability to leverage physical infrastructure Accretive/high-synergy M&A Technology-enhanced logistics
Slide 19: Continued Improvement Expected in 2019 and Beyond
Continued Improvement Expected in 2019 and Beyond (Non-GAAP, $ Millions) Operating Profit & Adj. EBITDA ~16% 14.9% 13.3% 11.8% Adj. EBITDA ~11% Margin 10.1% 8.8% $590 - $610 7.4% Op Profit $512 Margin ~ $185 $425 $165 Adj. $342 $144 EBITDA $126 D&A/Other $405- $425 $347 $281 Op Profit $216 2016 2017
Slide 20: Questions?
Questions? Brink’s Investor Relations 804-289-9709
Slide 21: Appendix
Appendix
Slide 22: Industrial Services/Route-Based Peer Comparisons
Industrial Services/Route-Based Peer Comparisons1 Business Overview 2019E Financial Metrics Growth Valuation 3-Year Adj. Adj. EBITDA Capex EBITDA EV / Adj. Company Description OP Margin Margin (% of Rev) CAGR EBITDA The Brink's Company Cash 2 (BCO) Management ~11% ~16% ~5% ~21% ~9x Uniform rental Ci
Slide 23: Compared to Industrial Services/Route-Based Peers
Compared to Industrial Services/Route-Based Peers…1 Growing Faster 21% CAGR Ahead of Peers & Closing the Gap Organic Revenue Growth Adj. EBITDA Margin Brink’s Peer Avg. Brink’s Peer Avg. 24% ~23% ~16% ~6% ~6% 12% ~4% 2019 16-19 Avg '16-'18E 2016 2019 2016 2019 Total Revenue Guidance Actual Guidance
Slide 24: Full-Year Revenue and Operating Profit vs 2017
Full-Year Revenue and Operating Profit vs 2017 (Non-GAAP, $ Millions) Revenue Op Profit % Change 7% 7% 14% (6%) 8% % Change 38% 10% 48% (25%) 23% Constant Constant Currency Currency $213 $3,630 ( $192 ) $28 $417 ( $70 ) $3,438 $223 $107 $3,193 $347 $281 10.1% Margin 8.8% Margin 2017 Organic Acq / Di
Slide 25: Full-Year Adjusted EBITDA & EPS vs 2017
Full-Year Adjusted EBITDA & EPS vs 2017 (Non-GAAP, $ Millions, except EPS) 2018 EPS: $3.46 (+14% vs PY) Adj. EBITDA 2017 EPS: $3.03 +20% vs PY $28 $512 $162 $347 ( $64 ) $142 ( $97 ) ( $7 ) $179 Op Profit Net Interest Taxes Non-controlling Income from D&A Interest Exp Other Adjusted Interest Continu
Slide 26: 2019 Guidance - Operating Profit and Adjusted EBITDA
2019 Guidance - Operating Profit and Adjusted EBITDA (Non-GAAP, $ Millions) OP % Change vs. 2018 ~27% ~10% ~37% (~17%) ~20% $655 - $675 $590 - $610** Adjusted ~ $190 EBITDA $512 ~ $185 $33 ( $60 ) $165 $95 D&A/Other $465 - $485 $405 - $425 $347 Operating Profit 10.1% ~11% Margin Margin 2018 Actual O
Slide 27: Credit Facility and Debt Structure
Credit Facility and Debt Structure Debt Balance 2019 Credit Facility Amendment ~$2.5 B • Term Loan A increased from $469 million to $800 million ~$2.2 B Available Committed Available Capacity of • Secured revolving credit facility Committed ~$0.8B consistent at $1.0 billion Capacity of ~$0.7B • Inte
Slide 28: Financing Capacity to Execute the Strategy
Financing Capacity to Execute the Strategy Credit Facility & Senior Notes Five-Year Credit Facility Ten-Year Senior Notes Revolver Term Loan A • $1.0 billion secured • $800 million secured • $600 million revolving credit Term Loan A unsecured notes facility • Interest floats based • 4.625% interest
Slide 29: Strong and Sustainable Credit Statistics
Strong and Sustainable Credit Statistics ($ Millions) Maturity Schedule for Credit Facility and Senior Notes $1,000 Revolver Senior Notes $600 $610 Term Loan A $30 $40 $40 $40 $40 2019 2020 2021 2022 2023 2024 2025 2026 2027 Primary U.S. Pension & UMWA: No Cash Outflow Expected Until 20221 $28 $38 $
Slide 30: Legacy Liabilities – Underfunding at 12/31/2018
Legacy Liabilities – Underfunding at 12/31/2018 ($ Millions) Frozen Primary U.S. Pension UMWA Primary U.S. Pension UMWA 2015 2016 2017 2018 2015 2016 2017 2018 ($206) ($227) ($102) ($108) ($107) ($114) ($294) ($297) 30
Slide 31: Estimated Cash Payments to Frozen U.S. Pension Plan
Estimated Cash Payments to Frozen U.S. Pension Plan ($ Millions) Payments to Primary U.S. Pension Payments to UMWA $504 $17 $28 $24 $19 $32 $32 $6 $1 2019 2020 2021 2022 2023 2024 2025 2026 2018 2025 2026 2027 After 2027 • Prepaid pension payments in 2014 with an $87 million contribution − Accelerat
Slide 32: 2016 Non-GAAP Results Reconciled to GAAP (1 of 3)
2016 Non-GAAP Results Reconciled to GAAP (1 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2016 Q1 Q2 Q3 Q4 Full Year Revenues: GAAP $ 721.8 739.5 755.8 803.5 3,020.6 Venezuela operations(a) (32.1) (21.5) (20.4) (35.4) (109.4) Acquisitions and dispositions(a) (0.8)
Slide 33: 2016 Non-GAAP Results Reconciled to GAAP (2 of 3)
2016 Non-GAAP Results Reconciled to GAAP (2 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2016 Q1 Q2 Q3 Q4 Full Year Income (loss) from continuing operations attributable to Brink's: GAAP $ (3.1) 0.3 24.5 14.5 36.2 Retirement plans(c) 4.7 5.2 5.0 5.3 20.2 Venezuel
Slide 34: 2016 Non-GAAP Results Reconciled to GAAP (3 of 3)
2016 Non-GAAP Results Reconciled to GAAP (3 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2016 Q1 Q2 Q3 Q4 Full Year Adjusted EBITDA(e): Net income (loss) attributable to Brink's - GAAP $ (3.1) 0.3 24.5 12.8 34.5 Interest expense - GAAP 4.9 4.9 5.1 5.5 20.4 Income
Slide 35: 2017 – 2018 Non-GAAP Results Reconciled to GAAP (1 of 4)
2017 – 2018 Non-GAAP Results Reconciled to GAAP (1 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2017 2018 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Revenues: GAAP $ 788.4 805.9 849.5 903.2 3,347.0 $ 879.1 849.7 852.4 907.7 3,488.9 Venezuela operations(a) (48.1)
Slide 36: 2017 – 2018 Non-GAAP Results Reconciled to GAAP (2 of 4)
2017 – 2018 Non-GAAP Results Reconciled to GAAP (2 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2017 2018 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Income (loss) from continuing operations attributable to Brink's: GAAP $ 34.7 14.3 19.9 (52.0) 16.9 $ 22.1 (107.8
Slide 37: 2017 – 2018 Non-GAAP Results Reconciled to GAAP (3 of 4)
2017 – 2018 Non-GAAP Results Reconciled to GAAP (3 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2017 2018 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Depreciation and Amortization: GAAP $ 33.9 34.6 37.9 40.2 146.6 $ 38.8 39.1 41.6 42.8 162.3 Venezuela operations(
Slide 38: 2017 – 2018 Non-GAAP Results Reconciled to GAAP (4 of 4)
2017 – 2018 Non-GAAP Results Reconciled to GAAP (4 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) (a) See “Other Items Not Allocated To Segments” on slide 39 for details. We do not consider these items to be reflective of our core operating performance due to the v
Slide 39: Non-GAAP Reconciliation - Other
Non-GAAP Reconciliation - Other The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited)) Brink’s measures its segment results before income and expenses for corporate activities and for certain other items. See below for a summary of the other items not allocated to se
Slide 40: Non-GAAP Reconciliation - Other
Non-GAAP Reconciliation - Other The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited) (In millions) Amounts Used to Calculate Reinvestment Ratio Property and Equipment Acquired During the Period Full-Year Full Year Full Year Full Year 2015 2016 2017 2018 Capital expe
Slide 41: Non-GAAP Reconciliation – Cash Flows
Non-GAAP Reconciliation – Cash Flows The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited) (In millions) Full Year Full Year 2017 2018 Cash flows from operating activities Operating activities - GAAP $ 296.4 $ 364.1 Venezuela operations (17.3) (0.4) (Increase) decrea
Slide 42: Non-GAAP Reconciliation – Net Debt
Non-GAAP Reconciliation – Net Debt The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited) (In millions) December 31, December 31, (In millions) 2017 2018 Debt: Short-term borrowings $ 45.2 $ 28.9 Long-term debt 1,191.5 1,525.1 Total Debt 1,236.7 1,554.0 Restricted cas