Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Investor Presentation (February 2019)
42 slides from Brinks Company (the)'s investor presentation, Feb 25, 2019
Slide 1: Investor Presentation February 2019
EXHIBIT 99.1 Investor Presentation February 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 Company1 As of 12/31/2018 (pro forma to include full-year data for Dunbar) Global Market Leader Revenue Countries Regions Global cash market $16.5 billion2 SA, NA, EMEA, Asia Brink’s1,3 $3.7B 117 Pacific SA, EMEA, Asia, Prosegur $2.0B 21 Other Australia Loomis Loomis
Slide 4: Lines of Business and Customers
Lines of Business and Customers1 68% of Pro Forma Segment Revenue Outside of U.S. 2018 Pro Forma Revenue by Line of Business Customers Guarding $0.2B France Guarding (5%) Sale Financial Retail Institutions High-Value Services $3.7B Core $1.6B Services (43%) $1.9B (52%) Government/ Other High-Value S
Slide 5: Strong Position in Largest Markets
Strong Position in Largest Markets Estimated Market Share in Key Countries United States Canada Mexico Brink’s Other Other Other Dunbar Garda Garda GSI Loomis Argentina Brazil France Brink’s Brink’s Brink’s Other Maco Other Rodoban Other Temis Prosegur Protege Loomis Prosegur Prosegur 5 Note: Intern
Slide 6: Our Strategy
Our Strategy Introduce Accelerate Differentiated Profitable Growth Services • Grow high-value services • Leverage uniform, best-in- • Grow account share class global technology base Introduce Accelerate with large FI customers for logistics and operating Differentiated Profitable systems Services Gr
Slide 7: 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-yr CAGR ~21%* Strategy 1.5 Acquisitions • Focus on “core-core” & “core-adjacent” Adj. EBITDA $120 • Capture synergies & improve density13.3% Op Profit $105 • 10 Acquisitions clos
Slide 8: A Clear Path to Value Creation
A Clear Path to Value Creation 2017-2019 Non-GAAP Operating Profit Improvement (Non-GAAP, $ Millions) (excluding Acquisitions & FX) Breakthrough Initiatives $380 $325 $216 2016 Branch Fleet Crew Labor Network Sales Growth/ Corporate 2019 Constant 2019 Organic Target Base Standardization Improvements
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: 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 Add new unvended and underserved customers with attractively13.3% -priced, high-value services Margin & Cust
Slide 11: Full-Year 2018 Non-GAAP Results
Full-Year 2018 Non-GAAP Results Delivering Results Despite FX Pressure (Non-GAAP, $ Millions, except EPS) Revenue +8% Op Profit +23% Adj. EBITDA +20% EPS +14% Constant currency +14% Constant currency +48% Constant currency +37% Constant currency +44% Organic +7% Organic +38% Acq +7% Acq +10% FX (6%)
Slide 12: 2019 Guidance
2019 Guidance 20% Op Profit Growth (+100 bps) Including $20-$30 Million OpEx Investment (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/Dis
Slide 13: 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 14: Free Cash Flow
Free Cash Flow (includes completed acquisitions) (Non-GAAP, $ Millions) Adjusted EBITDA $600 Working Capital: Revenue growth offset by DSO, DPO improvement $45 Cash Restructuring: Acquisitions (Dunbar, Rodoban, Temis) $512 $65 Cash Taxes: Higher income offset by lower ETR, FTCs and refund timing $36
Slide 15: Net Debt and Leverage
Net Debt and Leverage (Non-GAAP, $ Millions) Net Debt Adjusted EBITDA and Financial Leverage Significant capacity for acquisitions Leverage Ratio1 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 Pro-
Slide 16: Credit Facility and Debt Structure
Credit Facility and Debt Structure Debt Balance Amended Credit Facility ~$2.5 B • Term Loan A increased from $467 million to $800 million ~$2.2 B Available Committed Available Capacity of • Secured revolving credit facility Committed ~$1.0B consistent at $1.0 billion Capacity of ~$0.7B • Interest fl
Slide 17: Comparison to Industrial Services/Route-Based Peers
Comparison to Industrial Services/Route-Based 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 18: Compared to Industrial Services/Route-Based Peers
Compared to Industrial Services/Route-Based Peers…1 We’re growing faster 21% CAGR is ahead of peers and we’re closing the gap Organic Revenue Growth Adj. EBITDA Margin Brink’s Peer Avg. Brink’s Peer Avg. ~24% ~24% ~16% ~6% ~6% ~12% ~4% 2019 2016-2018 2016-2018 Est. Guidance Avg. 2016 2019 2016 2019
Slide 19: Continued Improvement Expected in 2019
Continued Improvement Expected in 2019 (Non-GAAP, $ Millions, except EPS) Operating Profit & Adj. EBITDA 2019 Guidance 6% Revenue $3.75B ~16% (organic growth) 14.9% $405 - $425 Op Profit +20% 13.3% ~11% margin $590 - $610 Adj. EBITDA +17% Adj. EBITDA 11.8% ~16% margin Margin ~11% 10.1% EPS $4.10 - $
Slide 20: Questions?
Questions? Brink’s Investor Relations 804-289-9709
Slide 21: Appendix
Appendix
Slide 22: Industrial Services/Route-Based Peer Comparisons
1 Industrial Services/Route-Based Peer Comparisons Business Overview 2019E Financial Metrics Growth Valuation 3-Year Adj. Adj. EBITDA Capex EBITDA Company Description OP Margin Margin (% of Rev) CAGR EV / Adj. EBITDA Cash The Brink's Company (BCO) 4 Management ~11% ~16% ~6% ~21% ~9x Uniform rental a
Slide 23: Currency Impact is Translational, Not Transactional
Currency Impact is Translational, Not Transactional (LC per 1 US$, except Euro) Exchange Rates Highlights (LC per 1 US$, except Euro) Dec 31, 2017 Dec 31, 2018 Transactional Currency Impact • Almost all revenue and expenses transacted in local currency • Local currency organic growth and margin 3.31
Slide 24: Argentina Revenue 2013-2018 by Quarter
Argentina Revenue 2013-2018 by Quarter (excludes Maco) 10% (2%) Devaluation (12%) (8%) (19%) (27%) (30%) USD Revenue 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Devaluation Recovery • Local currency growth has exceeded infla
Slide 25: Non-GAAP Income Tax Rates
Non-GAAP Income Tax Rates 2018 Dunbar Acquisition Statutory Tax Rate1 • U.S. had no statutory income • Increase U.S. statutory Argentina 30% in prior years income Brazil 34% - Paid no U.S. Federal tax - No Foreign Tax Credit • Utilize FTCs Chile 27% (FTC) utilization Colombia 37% • Utilize component
Slide 26: 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 27: 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 • $600 million revolving credit Term Loan A unsecured notes facility • Interest floats based • 4.625% interest
Slide 28: Strong and Sustainable Credit Statistics
Strong and Sustainable Credit Statistics ($ 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 29: 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) ($297) 29
Slide 30: Estimated Cash Payments to Frozen U.S. Pension Plan
Estimated Cash Payments to Frozen U.S. Pension Plan ($ 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 31: Frozen Primary U.S. Pension Plan Funded Status
Frozen Primary U.S. Pension Plan Funded Status (%) Sensitivity Analysis as of 12/31/2018 Change in Discount Rate -2.0% -1.0% 0.0% +1.0% +2.0% (1) 2.4% 3.4% 4.4% 5.4% 6.7% Return Return +20% 87 91 95 99 102 +10% 83 87 91 94 99 0% 80 83 87 91 95 -10% 76 79 82 87 91 “Return Enhancement” Annual “Return
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 Non-GAAP Reconciliations — Other Amounts (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 e
Slide 41: Non-GAAP Reconciliation – Cash Flows
Non-GAAP Reconciliation – Cash Flows The Brink’s Company and subsidiaries (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) decrease in restricted cash held for customers (44.3) (4
Slide 42: Non-GAAP Reconciliation – Net Debt
Non-GAAP Reconciliation – Net Debt The Brink’s Company and subsidiaries Non-GAAP Reconciliations - Net Debt (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 cash