Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q4 2020 Earnings Presentation
38 slides from Brinks Company (the)'s earnings presentation, Feb 23, 2021
Slide 1: Fourth-Quarter Results
Fourth-Quarter Results February 23, 2021 1
Slide 2: Safe Harbor Statements and Non-GAAP Results
Safe Harbor Statements and Non-GAAP Results These materials contain forward-looking information. Words such as "anticipate," "assume," "estimate," "expect," “target” "project," “model”, "predict," "intend," "plan," "believe," "potential," "may," "should" and similar expressions may identify forward-
Slide 3: Key Messages
Key Messages Outstanding results, focused on strategic execution, continued momentum expected in 2021 (Non-GAAP, $ Millions, except EPS) 4Q: Continued revenue recovery, operating leverage and acquisitions drive record results • Revenue up 9%...organic improvement and acquisitions more than offset pa
Slide 4: Recovery Superior to Industrials, Route-Based & Payments
Recovery Superior to Industrials, Route-Based & Payments 2020 Revenue vs. 20191 Reported revenue of companies in each index 120% 2Q20 3Q20 4Q20 includes acquisitions and divestitures Reported 100% 90% 92% Pro-forma7 88% 80% 78% 60% 40% 20% 0% Hotels, Movies & Cash S&P 400 Route-Based Payments Brink’
Slide 5: In-Store Shopping, Where Cash is Preferred, Forecasted to Continue Dominating U.S. Retail
In-Store Shopping, Where Cash is Preferred, Forecasted to Continue Dominating U.S. Retail Growing in-person sales dominate U.S. retail1 Cash has largest share of in- In-person sales to rise to $5.2T by 2025 person transactions2 $5.2T 6% $7.0 50% $4.9T 45% 35% Total Retail Sales (Trillions) $6.0 27%
Slide 6: Cash Levels Strong, Unvended Retailers Present Opportunity
Cash Levels Strong, Unvended Retailers Present Opportunity U.S. Cash Levels Remain Elevated Opportunity: Most U.S. Retail Locations Not • Federal Reserve reports Cash-in-circulation up 16%1 Served by Cash Management Industry3 • Brink’s notes and value processed up 6%2 CIT Vended 120 +16% Partially V
Slide 7: 2021 Guidance…Strong Revenue, Margin and Profit Growth
2021 Guidance…Strong Revenue, Margin and Profit Growth Expect Operating Profit Up 120 bps to 11.5% at midpoint (Non-GAAP, $ Millions, except EPS) Revenue Op Profit Adj. EBITDA EPS +17% at midpoint +30% at midpoint +21% at midpoint +26% at midpoint +10% organic +120 bps +32% excluding MGI impact $4,5
Slide 8: Brink's Sustainability
Brink’s Sustainability We understand that our stakeholders are not only focused on what we achieve, but also how we achieve it. To compete and win, we must consider the broader needs of society, ensuring that we treat all stakeholders fairly and with respect while managing our business with integrit
Slide 9: Fourth-Quarter 2020: Strong Revenue and Margin Growth
Fourth-Quarter 2020: Strong Revenue and Margin Growth (Non-GAAP, $ Millions, except EPS) Revenue +9% Op Profit +26% Adj. EBITDA +25% EPS +39% Constant currency +13% Constant currency +29% Constant currency +28% Constant currency +43% Organic (7%) Organic +8% +23% excluding Acq +19% Acq +21% MGI impa
Slide 10: Fourth-Quarter Revenue and Operating Profit vs 2019
Fourth-Quarter Revenue and Operating Profit vs 2019 (Non-GAAP, $ Millions) Revenue Operating Profit % Change (7%) 19% 13% (3%) 9% % Change 8% 21% 29% (3%) 26% Constant Constant Currency Currency $180 $1,054 ( $32 ) $1,022 $24 $149 ( $4 ) $936 ( $62 ) $145 $9 $116 10.1% 12.4% 14.1% Margin 14.2% Margi
Slide 11: Fourth-Quarter Adjusted EBITDA and EPS vs 2019
Fourth-Quarter Adjusted EBITDA and EPS vs 2019 (Non-GAAP, $ Millions, except EPS) Q4 2020 EPS: $1.64 +39% vs PY Q4 2019 EPS: $1.18 +25% vs PY 4Q20 EPS includes $0.13 for MoneyGram $10 ( $8 ) $66 $194 $145 ( $26 ) $44 ( $40 ) $3 $83 Op Profit Interest Taxes Other Income from D&A Interest Exp Stock Co
Slide 12: Operating Leverage: Margin Rate Increasing as Revenue Improves
Operating Leverage: Margin Rate Increasing as Revenue Improves (Non-GAAP) 2020 Revenue Recovery vs Operating Profit Margin Operating Profit Margin Pro Forma 20191 by Quarter 2019-2021 2019 Op Profit Margin 2020 Op Profit Margin 100% 14.0% 14.2% ~11.5% 10.6% 95% 10.3% 96% 12.0% 11.1% 12.4% 90% 92% 9.
Slide 13: 2021 Guidance – Organic Growth Drives Operating Profit and Adjusted EBITDA
2021 Guidance – Organic Growth Drives Operating Profit and Adjusted EBITDA (Non-GAAP, $ Millions, except EPS) OP % Change vs 2020 ~32% ~5% ~37% ~(7%) ~30% $662 - $752 $640 - $730** Adjusted EBITDA ~$187 ~$190 $566 $18 ($25)** $120 D&A/Other $185 $475 - $565 $450 - $540 Operating Profit $381 10.3% 11
Slide 14: Capital Expenditures
Capital Expenditures ($ Millions) $170 $165 $155 $20 $26 $25 $119 $18 $150 $138 $130 $101 $60 $52 $31 $35 2018 Actual 2019 Actual 2020 Actual 2021 Target Cash CapEx excl. Cash Devices Cash Devices Financing Leases 14 Note: Amounts may not add due to rounding.
Slide 15: 2020 Free Cash Flow
2020 Free Cash Flow (Non-GAAP, $ Millions) Adjusted EBITDA Working Capital and Cash Restructuring Adjusted • Higher restructuring and integration costs due to EBITDA $566 ( $92 ) Covid-19 and G4S Acquisition • Working Capital improvement versus 2019 ( $77 ) • Payroll taxes of ~$45 million deferred i
Slide 16: 2021 Free Cash Flow Target
2021 Free Cash Flow Target (Non-GAAP, $ Millions) Adjusted EBITDA Adjusted $640 – Working Capital and Cash Restructuring: Lower EBITDA $730 ( $95 ) restructuring expected in 2021 post-Covid-19 and G4S acquisition D&A / ( $95 ) Other $190 $35 Deferred Payments to be made: primarily ( $105 ) payroll t
Slide 17: Strong Financial Health - Ample Liquidity & Covenant Headroom
Strong Financial Health - Ample Liquidity & Covenant Headroom ($ Millions, except where noted) Cash and Debt Capacity • Increased liquidity in 2020 • Incremental $590 million Term Loan A $602 closed on April 1, 2020 ~$1.6 B • Incremental $400 million Senior Notes Liquidity closed on June 22, 2020 •
Slide 18: Net Debt and Leverage
Net Debt and Leverage (Non-GAAP, $ Millions) Net Debt Adjusted EBITDA and Financial Leverage The impact on Net Debt from Net Debt Free Cash Flow before Leverage Ratio1 2.4 3.3 ~2.5 – 3.0 Dividends is offset by other financing and investing items6 Fully-synergized Secured Leverage Ratio4 Pro forma2 ~
Slide 19: Components of Strategic Plan (2020 – 2022)
Components of Strategic Plan 2 (2020 – 2022) Includes increased focus on digital cash management solutions 2.1 – Digital Cash Management Strategy 2.0 2.2 – Cash Process Automation Expand Services 2.3 – Consumer-Facing Devices & Customer Base 2.4 – Digital Transactions • $1.9B invested in 14 acquisit
Slide 20: Strategy 2.0 — Brink's Complete Digital Cash Management Solution
Strategy 2.0 — Brink’s Complete Digital Cash Management Solution Leveraging technology to simplify and modernize cash management 20
Slide 21: Brink's 2.1 and 2.4 Digital Cash Management Solutions
Brink’s 2.1 and 2.4 Digital Cash Management Solutions Subscription-Based Solution for Digital Cash Management Mobile, cloud-based Tech-enabled device Next-day credit for Contactless, non-intrusive app for deposits and for in-store deposits to accelerated working capital service with reduced change o
Slide 22: Proven Performance…Bright Future
Proven Performance…Bright Future (Non-GAAP, $ Millions, except EPS) Revenue, Adjusted EBITDA & Operating Profit 2021 Guidance $4,100 - $4,500 Revenue $3,680 $3,691 Midpoint Low Mid High vs 2020 15.4% 15.3% 15.6% -16.2% Revenue $4,100 $4,300 $4,500 +17% Adj. EBITDA Op Profit $450 $495 $540 +30% 11.0%
Slide 23: Appendix
Appendix 23
Slide 24: Fourth-Quarter Results by Segment
Fourth-Quarter Results by Segment ($ Millions) North America Latin America Europe Rest of World Revenue (7%) Op Profit +39% Revenue (15%) Op Profit (14%) Revenue +72% Op Profit +131% Revenue +56% Op Profit +68% Constant currency (7%) +39% Constant currency: -% 3% Constant currency +61% +117% Constan
Slide 25: 2020 Sequential Results
2020 Sequential Results (Non-GAAP, $ Millions, except EPS) Revenue +5% Op Profit +45% Adj. EBITDA +31% EPS 84% Constant currency +4% Constant currency +31% Constant currency +22% Constant currency +63% Organic +3% Organic +30% Acq +1% Acq +1% FX +1% FX +14% % of 2019 1 96% 78% 88% 92% Margin +390 bp
Slide 26: Full-Year 2020 Non-GAAP Results
Full-Year 2020 Non-GAAP Results (Non-GAAP, $ Millions, except EPS) Revenue 0% Op Profit (3%) Adj. EBITDA 0% EPS (3%) Constant currency +7% Constant currency +13% Constant currency +12% Constant currency +18% Organic (7%) Organic (3%) Acq +14% Acq +16% FX (6%) FX (16%) $3,924 $3,680 $3,691 $636 $3,43
Slide 27: Full-Year Revenue and Operating Profit vs 2019
Full-Year Revenue and Operating Profit vs 2019 (Non-GAAP, $ Millions) Revenue Operating Profit % Change (7%) 14% 7% (6%) 0% % Change (3%) 16% 13% (16%) (3%) Constant Constant Currency Currency $520 $3,924 ( $233 ) $3,680 ( $275 ) $3,691 $65 $444 ( $62 ) $392 ( $12 ) $381 10.1% 10.6% 11.3% 10.3% Marg
Slide 28: Full-Year Adjusted EBITDA and EPS vs 2019
Full-Year Adjusted EBITDA and EPS vs 2019 (Non-GAAP, $ Millions, except EPS) 2020 EPS: $3.76 (3%) vs PY 2019 EPS: $3.89 Flat vs PY 2020 EPS includes $0.16 for MoneyGram $31 ( $11 ) $566 $187 $381 ( $95 ) $168 ( $92 ) ( $4 ) $191 Op Profit Interest Taxes Other Income from D&A Interest Exp Stock Comp
Slide 29: Full-Year Results by Segment
Full-Year Results by Segment ($ Millions) North America Latin America Europe Rest of World Revenue (8%) Op Profit (12%) Revenue (19%) Op Profit (21%) Revenue +37% Op Profit +20% Revenue +37% Op Profit +55% Constant currency (8%) (12%) Constant currency: (1%) (1%) Constant currency +34% +15% Constant
Slide 30: G4S Closing Timeline
G4S Closing Timeline ($ Millions) Total Enterprise $69 $562 $31 $7 $59 $115 $844 Value February 2020 March April June July September February 2021 SPA Sign Closing Closings Closing Closing Closings Closings Transaction G4Si • Netherlands • Philippines • Indonesia • Estonia • Kuwait announced on • Be
Slide 31: Strong Revenue Recovery
Strong Revenue Recovery 2020 Revenue as a % of 2019 Revenue1 2Q 4Q 109% 100% ~93% 92% 90% 80% 75% 78% 50% 25% 0% Total Pro-forma1 Total Reported 4Q Revenue Recovery to ~92% of Pre-Covid-19 Levels on a Pro Forma Basis 1. Results adjusted to include results for businesses acquired from G4S in 2020 as
Slide 32: Debt Maturity Profile
Debt Maturity Profile ($ Millions) Maturity Schedule for Credit Facility and Senior Notes Revolver $1,000 Term Loan A Senior Notes $1,089 Senior Notes $600 $70 $70 $70 $400 2021 2022 2023 2024 2025 2026 2027 32
Slide 33: Estimated Cash Payments for Legacy Liabilities
Estimated Cash Payments for Legacy Liabilities ($ Millions) Payments to Primary U.S. Pension Payments to UMWA $281 $14 $12 $23 $24 $23 <$1 $7 $2 $0 2020 2021 2022 2023 2024 2025 2026 2020 2029 2030 2031 After 2031 Primary US Pension • Based on actuarial assumptions (as of 12/31/20), no additional ca
Slide 34: 2018 Non-GAAP Results Reconciled to GAAP (1 of 3)
2018 Non-GAAP Results Reconciled to GAAP (1 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2018 Q4 Full Year Revenues: GAAP $ 907.7 3,488.9 Venezuela operations(a) - (51.4) Non-GAAP $ 907.7 3,437.5 Operating profit (loss): GAAP $ 81.2 274.7 Venezuela operations(a)
Slide 35: 2018 Non-GAAP Results Reconciled to GAAP (2 of 3)
2018 Non-GAAP Results Reconciled to GAAP (2 of 3 ) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions, except for per share amounts) 2018 Q4 Full Year Income (loss) from continuing operations attributable to Brink's: GAAP $ 34.9 (33.3) Retirement plans(c) 6.2 25.3 Venezuela o
Slide 36: 2018 Non-GAAP Results Reconciled to GAAP (3 of 3)
2018 Non-GAAP Results Reconciled to GAAP (3 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2018 Q4 Full Year Adjusted EBITDA(j): Net income (loss) attributable to Brink's - GAAP $ 34.9 (33.3) Interest expense - GAAP 18.9 66.7 Income tax provision - GAAP 17.0 70.0 D
Slide 37: Non-GAAP Reconciliation – Other
Non-GAAP Reconciliation – Other The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited) (In millions) 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 al
Slide 38: 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, 2019 2020 Debt: Short-term borrowings $ 14.3 $ 14.2 Long-term debt 1,629.3 2,471.5 Total Debt 1,643.6 2,485.7 Restricted cash borrowings(a)