Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Investor Day (March 2017)
134 slides from Brinks Company (the)'s investor day presentation, Mar 2, 2017
Slide 1: Investor Day March 2, 2017
S ECU RE LOG IST ICS. WORLDW ID E. Investor Day MA RCH 2 , 2017 Exhibit 99.2
Slide 2: Agenda
Agenda 8:30 ED CUNNINGHAM Vice President, Investor Relations & Corporate Communications Introduction 8:35 DOUG PERTZ President and Chief Executive Officer Company Overview Strategy U.S. Operations 9:15 AMIT ZUKERMAN Executive Vice President, President Global Operations and Brink's Global Services Br
Slide 3: 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 4: Safe Harbor Statement and Non-GAAP Results
Safe Harbor Statement and Non-GAAP Results This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under "Risk Factors" in Item 1A of
Slide 5: Overview and Strategy
D OU G P ERTZ Overview and Strategy Why Brink’s?
Slide 6: Why Brink's?
+ + Why Brink’s? Brink’s has the right leadership, the right strategy and the financial strength to drive superior shareholder returns. Market Strength • Premier global brand with unmatched footprint and customers in 100+ countries • Strong market position People • New leadership with proven track r
Slide 7: World's Largest Cash Management Company
World’s Largest Cash Management Company2 7 Global cash market $17.9 billion1 South America 25% Rest of World 34% North America 41% GLOBAL MARKET LEADER Loomis G4S Garda Prosegur Other REVENUE OPERATIONS • 40 countries • 1,000 facilities • 11,900 vehicles • 60,700 employees CUSTOMERS IN MORE THAN 100
Slide 8: Cash in the U.S. Continues to Grow
48% 33% 27% 27% 23% 25% Less than $25,000 $25,000-$50,000 $50,000-$75,000 $75,000-$100,000 $100,000-$149,000 $150,000 and greater % of U.S. Population 12% 14% 12% 17% 13% 32% Cash in the U.S. Continues to Grow 8 • Notes in circulation doubled to ~40 billion notes in 2016 vs 1996 • Value of notes in
Slide 9: Cash is By Far the Most Used Payment Method Throughout the World
ESTIMATED CASH USAGE IN OUR LARGE MARKETS4 Cash is By Far the Most Used Payment Method Throughout the World 9 1. MasterCard Advisors 2013 2. World Bank Group The Global Findex Database 2014 3. European Central Bank 4. MasterCard Advisors 2013 and San Francisco Federal Reserve Bank 2016 Report 32% Un
Slide 10: Lines of Business and Customers
HIGH-VALUE SERVICES • Brink’s Global Services (BGS) • Money processing • Vault outsourcing • CompuSafe® and retail services • Payments North America $1,210 South America $719 Rest of World $979 Core Services $1.5B (53%) High-Value Services $1.2B (40%) Guarding $0.2B (7%) Financial InstitutionsGovern
Slide 11: Global Competitive Landscape
Global Competitive Landscape 1. As of 12/31/16 EBITA and EBITDA are adjusted 2. Loomis 2016 Annual Report converted to USD 3. Figures apply only to cash business. Prosegur cash presentation as of 2/15/17 4. See net debt reconciliation in Appendix Revenue EBITA Margin EBITDA Margin Net Debt to EBITDA
Slide 12: Strong Position in Our Largest Markets
Loomis Garda Other GSI Other Loomis Prosegur Other Other Garda Prosegur Other BRAZIL2 CANADA UNITED STATES2 FRANCE MEXICO2 Strong Position in Our Largest Markets 12 ESTIMATED MARKET SHARE IN KEY COUNTRIES 1 1. Internal estimates of market share of CIT/ATM market 2. Excludes Payment Services $15 4 ($
Slide 13: Room to Grow in Largest Markets
13 RoomafdMrk Canada U.S. France Mexico Chile Argentina Brazil Colombia Israel Hong Kong/ Macau 10 largest markets represent 80% of 2016 revenue • Largest player in 3 of top 10 • Second largest player in 7 of top 10 Room to Grow in Largest Markets1 Brink’s All others Legend 1. Excludes Payment Servi
Slide 14: New Leadership…New Focus…New Brink's
PROVEN TRACK RECORD IN: Leading global route-based logistics companies Strategic execution to drive organic growth, margin expansion and ROIC Leveraging IT to increase productivity and expand customer offerings Executing disciplined, accretive acquisitions New Leadership…New Focus…New Brink’s 14 DOU
Slide 15: Situation Analysis
Situation Analysis 15 OUR APPROACH • Detailed review of global operations • Conducted internal assessment of management, assets, equipment, labor relations, etc. • Analyzed external factors including customers, markets, competitive environment and acquisition opportunities POSITIVES • Strong global
Slide 16: Our Strategy
Our Strategy Accelerate Profitable Growth (APG) Close the Gap — Operational Excellence (CTG) Introduce Differentiated Services (IDS) ACCELERATE PROFITABLE GROWTH • Grow high-value services • Grow account share with large FI customers • Increase focus on smaller FIs • Penetrate large, unvended retail
Slide 17: 2016 Results
$157 $207 0 50 100 150 200 250 300 2015 Actual 2016 Actual 5.3% Margin 2016 Results 17 REVENUE OPERATING PROFIT ADJUSTED EBITDA $291 $333 0 50 100 150 200 250 300 350 400 2015 Actual 2016 Actual 9.8% Margin 11.4% Margin $3,143 $2,977 $2,908 700 1200 1700 2200 2700 3200 700 1200 1700 2200 2700 3200 2
Slide 18: 2019 Targets Drive Superior Shareholder Returns
2016 Currency Adjusted 2019 Target 2016 Currency Adjusted 2019 Target 2016 Currency Adjusted 2019 Target REVENUE OPERATING PROFIT ADJUSTED EBITDA ($ in millions) ($ in millions) ($ in millions) ~10% Margin 2019 Targets Drive Superior Shareholder Returns 18 ~5% CAGR $2,828 $3,275 $325 $192 6.8% Margi
Slide 19: Revenue 2016 – 2019
$2,908 $3,275 ($101) $200 $205 $63 Annual Organic Growth ~5% ~9% ~2% ~5% Revenue 2016 – 2019 19 ($ in millions) Target: 5% Annual Organic Revenue Growth 2016 Actual Rest of World Contingency 2019 TargetNorth America South America
Slide 20: Operating Profit 2016 – 2019
Operating Profit 2016 – 2019 20 Target: 10% Operating Margin in 2019 Led by U.S. and Mexico ($ in millions) $207 $325$125 $58 $27 ($92) 2016 Actual Rest of World Contingency 2019 TargetNorth America South America OP Margin 7.1% 3.7% 1.3% 0.4% (2.5%) 10%
Slide 21: U.S. Offers Greatest Opportunity
$37 $162 $81 $35 $9 2016 Actual U.S. Mexico Other 2019 Target North America 21 PATH TO 2019 STRATEGIC GOALS OP Margin 3.1% 5.7% 2.3% 0.4% 11.5% ($ in millions) U.S. Offers Greatest Opportunity
Slide 22: U.S. Operations
U.S. Operations D OU G P ERTZ
Slide 23: Overview of 2016 U.S. Operations
Overview of 2016 U.S. Operations LINES OF BUSINESS1 CUSTOMER BASE CIT/ATMHigh- Value Services Other RetailFinancial Institutions About our operations: • 108 branches • 1,500 routes per week day • 15,600 CompuSafe® units2 • ~2,000 armored vehicles • ~7,000 employees • $371 billion of inventory throug
Slide 24: U.S. Competitive Landscape
Garda Loomis Dunbar/ Others Revenue EBITA Margin EBITDA Margin Brink's Loomis Garda U.S. Competitive Landscape 1. Excludes Payment Services 2. Loomis 2016 report (interim 2016 full-year report) and internal estimates for Cash Solutions business in the U.S. 3. Garda interim 2016 report and internal e
Slide 25: The Gap: Brink's vs. Loomis in the U.S.
OPERATING PROFIT MARGIN %1 SAFE COUNT (‘000)3 ORGANIC REVENUE GROWTH1 The Gap: Brink’s vs. Loomis in the U.S. 25 (3.7%) 0.1% 2.9% 0.4% 3.1% 0.0% 2.0% 7.0% 6.0% 11.0% 4.5% 1.8% 3.1% 2.1% 0.8% 9.1% 9.5% 9.9% 10.8% 11.5% 14.7 15.5 15.7 15.7 15.6 8.4 10.4 13.0 14.6 19.0 20142013 2015 20162012 20142013 2
Slide 26: Four Breakthrough Initiatives in the U.S.
26 10%+ OP MARGIN= Fleet Improvements One-Person Vehicle Labor Network Optimization Sales Growth and CompuSafe® Base Margin 2% to 3% Branch Standardization Route Optimization Culture — Customer-driven, Lean + Building on our Base with Four Breakthrough Initiatives in the U.S.
Slide 27: A Clear Path to Value Creation
2016 Base Branch Standardization Fleet Improvements One-Person Vehicle Labor Network Optimization Sales Growth/ CompuSafe IT Contingency 2019 Target A Clear Path to Value Creation 27 2019 U.S. OPERATING PROFIT IMPROVEMENT 1 ($ in millions) Actual 0.8% Revenue $753 $870 ~10% $14$18$21 Breakthrough In
Slide 28: Strengthening Our Fleet
Strengthening Our Fleet 28 Transfer Hatch Biometric Access Control Geofence Safety and Security Control Proximity Sensor Trap 360º Monitoring External Camera External Camera
Slide 29: Strengthening Our Fleet
Strengthening Our Fleet 29 NEW ARMORED VEHICLE DESIGN: Provides for: • One-person operation • Separation of body and chassis • Lower maintenance costs • 150k - 200k mile / 7 year warranty • Enhanced use of technology 45% Reduction in Cost Over Useful Life Due to New Vehicle Design Decreases our capi
Slide 30: Fleet Savings — $21M Annually
Fleet Savings — $21M Annually 30 0 5 10 15 20 25 30 35 Repairs Fuel Insurance Other Depreciation Savings Target by 2019 ($ in millions) FLEET SAVINGS TARGET BY 2019 $18 $3 $8 $2 ($10) $21 ($ in thousands) 1. Includes savings from insourcing fleet maintenance Repairs and maintenance savings Current a
Slide 31: One-Person Vehicle Savings — $18M Annually
One-Person Vehicle Savings — $18M Annually 31 ($ in thousands) 12/31/16 One Person Vehicles 2017 2018 2019 12/31/19 One Person Vehicles ONE-PERSON VEHICLES ~333 ~1,300 ~333 ~333 275 1. We estimate that approximately 60% of our routes in 2019 can be served by a one-person crew Annual two-person crew
Slide 32: Strengthening Our Fleet Drives High Returns
Strengthening Our Fleet Drives High Returns 32 Investment Route trucks to be acquired (2017 – 2019) 1,000 Acquisition cost (average) $92 Route truck investment 92,000 Large truck investment 20,000 Total investment over 3 years $112,000 2019 annual savings target Fleet savings $21,000 Labor savings 1
Slide 33: Network Optimization — $14M Annually
2017 2018 2019 2019 Savings Target ($ in millions) Network Optimization — $14M Annually 33 NETWORK OPTIMIZATION SAVINGS TARGET BY 2019 $14$7 $6 $1 PHASE 1 (2017 – 2018) • Invest in high speed money processing (MP) equipment PHASE 2 (2018 – 2019) • Implement hub and spoke MP operations • Consolidate
Slide 34: Network Optimization in Action — Chicago
Network Optimization in Action — Chicago 34 PHASE 1: HIGH SPEED MONEY PROCESSING PHASES 2 AND 3: HUB AND SPOKE CONSOLIDATION • $1M-to-$2M improvement opportunity • Infrastructure, productivity, etc. Results: • Note processing capacity doubled with capacity to consolidate additional spoke branches •
Slide 35: Sales Growth/CompuSafe — $22M+ Annually
Sales Growth/CompuSafe® — $22M+ Annually 35 ($ in millions) CompuSafe® Service Other Incremental Margin Target 2019 Recycler Service Financial Institutions $7 $7 $3 $5 $22
Slide 36: CompuSafe and Recycler Services $14M+ Annually
CompuSafe® and Recycler Services $14M+ Annually 36 OPPORTUNITY • 3.7 million retail establishments1 • An estimated 1.2 to 1.5 million establishments are strong candidates for smart safe or recycler services • Fewer than 150k smart safes are used today2 1. nrf.com/retailsimpact 2. MF Hudson and Assoc
Slide 37: CompuSafe and Recycler Services Sales Growth
2016 Actual Revenue 2017 2018 2019 2019 Target Revenue CompuSafe® and Recycler Services Sales Growth 37 COMPUSAFE AND RECYCLER SALES TARGET $25 $166 $25 $20 $96 ~20% CAGR • High-margin • Integrated services • Re-design of cash processes • Cash forecasting • Device monitoring and maintenance • Cash r
Slide 38: Financial Institutions — $3M+ Annually
38 Financial Institutions — $3M+ Annually LARGE FINANCIAL INSTITUTIONS 1 • 220 banks • Well resourced • Represent the majority of our customers • Opportunity for continued outsourcing OUR FOCUS • Increase account share with improved service levels and value offerings • Capture outsourcing opportunit
Slide 39: A Clear Path to Value Creation
2016 Base Branch Standardization Fleet Improvements One-Person Vehicle Labor Network Optimization Sales Growth/ CompuSafe IT Contingency 2019 Target A Clear Path to Value Creation 39 2019 U.S. OPERATING PROFIT IMPROVEMENT 1 ($ in millions) Actual 0.8% Revenue $753 $870 ~10% $14$18$21 Breakthrough In
Slide 40: Brink's Global Services, South America, Rest of World
A MIT Z U KERMA N Brink’s Global Services Segment — South America Segment — Rest of World
Slide 41: Global Services and Cash Management
Global Services and Cash Management 41 TWO DISTINCTIVE AND INTEGRATED BUSINESS OPERATIONS Brink’s GLOBAL SERVICES International operations • Secure logistics services for diamonds, jewelry, banknotes, precious metals, credit cards, electronics and many others • Operations in over 100 countries • Num
Slide 42: Global Services
Global Services
Slide 43: Brink's — Global Services
Brink’s — Global Services 43 THE WORLD’S #1 SECURE LOGISTICS PARTNER 108 COUNTRIES 3,000 CITIES 600 AIRPORTS 15,000 CUSTOMERS
Slide 44: Managing a Diverse Portfolio Worldwide
Brink’s — Global Services 44 MANAGING A DIVERSE PORTFOLIO WORLDWIDE LINES OF BUSINESS OUR SERVICES DIAMONDS JEWELRY BANKNOTES PRECIOUS METALS CREDIT CARDS ELECTRONICS GLOBAL TRANSPORTATION STORAGE CUSTOMS CLEARANCE PROCESSING DISTRIBUTION RISK MANAGEMENT
Slide 45: Adding Value in Every Step of Customers' Supply Chains
Brink’s — Global Services 45 ADDING VALUE IN EVERY STEP OF CUSTOMERS’ SUPPLY CHAINS
Slide 46: Expanding into Strategic Adjacencies
Brink’s — Global Services 46 EXPANDING INTO STRATEGIC ADJACENCIES Risk Management Complexity Compliance High Worth LEVERAGING OUR EXPERTISE ADD VALUE TO CUSTOMERS’ SUPPLY CHAINS Consumer Electronics Pharmaceuticals Fine Art Regulatory Requirements
Slide 47: Brink's Brazil Signs Contract with Viracopos International Airport
Viracopos high security terminal: a 1,600 square meter base operated by Brink’s Brink’s — Global Services 47 Brink’s Brazil signs unprecedented contract with Viracopos International Airport This will be the first top security terminal for high-value cargoes in Latin America
Slide 48: A Story in Brazil — Viracopos International Airport
• 1,600 square meters facility • 1,000 rack positions • 2 temperature controlled warehouses • 2 secure vaults • Brink’s 24x7x365 supervision and monitoring • Brink’s armored transportation on tarmac and to/from airport • Strong return on investment, double digit profitability from 2017 Strategic Adj
Slide 49: Viracopos International Airport Birdseye View
Viracopos International Airport 49 BIRDSEYE VIEW Secure cargo flowBRINK’S GENERAL CARGO Airplane parking Tarmac Airport warehouse Trucks loading bay
Slide 50: Segments
50 Segments
Slide 51: South America and Rest of the World
South America and Rest of the World 51 THE TOTAL CASH SOLUTIONS PARTNER CONTINUOUS PROCESS IMPROVEMENT 5,927 VEHICLES 645 FACILITIES 37,032 EMPLOYEES 37 COUNTRIES LOCAL CASH SUPPLY CHAIN EXPERTISE
Slide 52: Brink's — Cash Management
Brink’s — Cash Management 52 VALUE CREATION THROUGH TAILORED SOLUTIONS CASH IS PERSISTENT EACH MARKET IS DIFFERENT Stage of Outsourcing Cash in Circulation Is Growing Security Regulations Technology Infrastructure Banking Regulations Brink’s Strategy Focuses on Value Creation Through Tailored Soluti
Slide 53: South America
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Slide 54: South America
South America 54 INFLATIONARY ECONOMY AND GROWING CASH SOCIETY 242 FACILITIES 18,869 EMPLOYEES 2,573 VEHICLES High Risk High Cash Volume High Inflation 7 OPERATING COUNTRIES HIGH GROWTH HIGH MARGIN
Slide 55: South America Revenue and Operating Profit
$50 $120 $178 $43 2012 2016 2019 Target Accretive Acquisitions South America 55 LEADING MARKET POSITIONS CAGR 24% $464 $719 $924 $341 2012 2016 2019 Target CAGR 12% CAGR 9% • Target 14% annual growth from 2016 and 2.6 ppts further margin expansion by 2019 • Significant volume growth in high inflatio
Slide 56: South America Path to 2019 Strategic Goals
South America 56 PATH TO 2019 STRATEGIC GOALS 2016 Brazil Core Growth Productivity High Margin Solutions 2019 Target OPERATING PROFIT OP Margin 16.7% 0.9% 0.5% 0.5% 0.7% 19.3%
Slide 57: Rest Of The World
Rest Of The World
Slide 58: Rest of the World
Rest of the World 58 DIVERSE CULTURAL, RISK AND REGULATORY ENVIRONMENT 403 FACILITIES 18,163 EMPLOYEES 3,354 VEHICLES Increasing Cash Increasing Outsourcing Increasing Technology 30 OPERATING COUNTRIES
Slide 59: Rest of the World Revenue and Operating Profit
$89 $107 $135 $11 2012 2016 2019 Target Accretive Acquisitions Rest of the World 59 CONSISTENT ORGANIC PROFITABLE GROWTH CAGR 5% $972 $979 $1,042 $169 2012 2016 2019 Target CAGR 0% CAGR 2% REVENUE • Target 7.8% annual growth from 2016 and 1.9 ppts further margin expansion by 2019 • Turned around und
Slide 60: Rest of the World Path to 2019 Strategic Goals
Rest of the World 60 PATH TO 2019 STRATEGIC GOALS 2016 France Core Growth Productivity High Margin Solutions 2019 Target OPERATING PROFIT OP Margin 11.0% 1.1% 0.2% 0.2% 0.4% 12.9%
Slide 61: Brink's Singapore Managed Services Model
13% 13% 27% 41% 68% 2012 2013 2014 2015 2016 2012 2016 2019 Target • Cash in circulation grew 8.7% between 2011 and 2015, compared to average GDP growth of 4.8% and average inflation 2.5% during the same period* • High frequency of ATM replenishment requirement • Restrictions of access to armoured g
Slide 62: France
France
Slide 63: Brink's France Overview
Brink’s France 63 OVERVIEW 116 FACILITIES 5,178 EMPLOYEES 1,370 VEHICLES Cash Management Global Services Security Services
Slide 64: Brink's France Leadership Market Position
Brink’s France 64 LEADERSHIP MARKET POSITION TOTAL MARKET SHARE1 RETAIL SOLUTIONS MARKET SHARE1 Loomis Others Others 1. Internal estimates of market share
Slide 65: Brink's France Path to 2019 Strategic Goals
Brink’s France 65 PATH TO 2019 STRATEGIC GOALS 2016 New Business Model High Margin Services Cash Mgt Cost Optimization Productivity - Aviation Business 2019 Target OPERATING PROFIT OP Margin 8.7% 1.0% 1.1% 0.9% 0.3% 12.0%
Slide 66: Mexico
Mexico MIKE BEECH
Slide 67: Brink's Mexico Strong Trends in Cash Use
Brink’s Mexico 67 STRONG TRENDS IN CASH USE AND CONSUMER GROWTH DRIVE GROWTH IN CASH SERVICES Bills and Coins in Circulation Increased on Average 13.8% Annually • Moderate economic growth • Low inflation and unemployment • Level of insecurity • Population growth • Cash is dominant form of payment (o
Slide 68: Brink's Mexico Retail Sector Drives Opportunities
Brink’s Mexico 68 RETAIL SECTOR DRIVES OPPORTUNITIES • Steady YoY growth in new store locations • 2016 retail sector sales growth over 6% • More than 1 million small retailers do not use cash management services; ~40% of small businesses do not use a credit or savings account • Tremendous online YoY
Slide 69: Brink's Mexico Customer Segments and Market Share
Brink’s Mexico 69 BRINK’S CUSTOMER SEGMENTSMARKET SHARE Retail CompuSafe® FI BGS GSI Others • We benefit from a broad and diverse base across all customer segments • Five large banks comprise over 80% of Financial Institution (FI) market; small growth in branches and ATMs • Brink’s is the market lea
Slide 70: Mexico 2017 Outlook
Mexico 2017 Outlook 70 INCREASE EFFICIENCIES ON SOLID REVENUE GROWTH DRIVE MARGIN IMPROVEMENT OPERATING PROFIT1REVENUE1 ACCELERATE PROFITABLE GROWTH • Expect organic revenue growth at ~8% • Market leader in higher margin retail cash automation • Growing demand for CompuSafe® service and back office
Slide 71: Mexico Three-Year Outlook
Mexico Three-Year Outlook 71 GROWING MARGINS TO 15% BY 2019 BY OPTIMIZING OUR ROUTES, REDUCING OUR FLEET COSTS AND USING TECHNOLOGY TO INCREASE EFFICIENCY 1 OP Margin 6.9% 4% 2% 1% 1% ~15% 2016 2019 Target Continuous Process Improvement Profitable Growth FleetLabor Route Optimization Crewing 1. Excl
Slide 72: Breakthrough Initiatives
Breakthrough Initiatives 72 ROUTE OPTIMIZATION, CREWING AND MOBILITY WILL REDUCE LABOR COSTS IN CASH-IN-TRANSIT INITIATIVE APPROACH IMPACT Route Optimization Mobility Crewing 4% Margin Improvement • Reduce labor costs by changing how we operate • Deploy technology to optimize routes and mobility (ha
Slide 73: Mexico Three-Year Outlook
2016 Actual 2019 2016 Actual 2019 Mexico Three-Year Outlook 73 REVENUE1 HIGHER MARGIN SERVICES REVENUE1 Accelerating profitable growth with high-value services • CompuSafe® and other retail cash services more than tripled in 2016 • Market acceptance of same-day credit on our retail solutions is incr
Slide 74: Continuous Process Improvements (CPI)
2016 Cash Processing Improvements: • Efficiency increased 16% YoY • Overtime costs decreased 10% • Cash processing line of business margins improved by more than 7% Continuous Process Improvements (CPI) 74 EXPANDING CPI (LEAN) IS DELIVERING QUALITY, EFFICIENCY AND FINANCIAL RESULTS APPROACH: • Cultu
Slide 75: Brazil
Brazil
Slide 76: Brink's Brazil Positioned to Benefit as FI Volumes Recover
Brink’s Brazil 76 POSITIONED TO BENEFIT AS FINANCIAL INSTITUTION MARKET VOLUMES RECOVER BILLS AND COINS IN CIRCULATION INCREASED ON AVERAGE 5.5% ANNUALLY1 BRANCHES AND ATMS1 • Economy emerging from crisis • Cash in circulation continues to grow despite negative GDP • Cash represents over 40% of paym
Slide 77: Brink's Brazil Positioned to Benefit from Retail Growth
Brink’s Brazil 77 POSITIONED TO BENEFIT FROM EXPECTED RETAIL SEGMENT GROWTH GDP RETAIL SALES 1.9% 3.0 % 0.1 % (3.8%) (4.0%) (0.2%) 0.8 % 2012 2013 2014 2015 2016 2017 2018 • Economy emerging from crisis • Forecasts predict a gradual recovery • Expect retail growth to recover beginning in 2017 • Low
Slide 78: Brink's Brazil Customer Segments and Market Share
Prosegur Brink’s Brazil 78 BRINK’S CUSTOMER SEGMENTSMARKET SHARE • Five large banks comprise over 80% of the FI market; low growth • Gradual increase in the mix of retail • Brink’s is the market leader in retail automation segment (CompuSafe® service) • Large retail customer base allows us to expand
Slide 79: Brazil 2017 Outlook
Brazil 2017 Outlook 79 INCREASING EFFICIENCIES AND GROWTH DRIVE CONTINUED OP GROWTH IN 2017 REVENUE1 OPERATING PROFIT1 2016 2017 2016 2017 ACCELERATE PROFITABLE GROWTH • Expect revenue growth at 8% in 2017 • CompuSafe® service and other retail automation +27% in 2016 • BGS total growth +14%; electro
Slide 80: Brazil Three-Year Outlook
Brazil Three-Year Outlook 80 GROWING MARGINS TO 13% BY 2019 BY FOCUSING ON HIGH-VALUE SERVICES; USING TECHNOLOGY TO INCREASE EFFICIENCY 1 OP Margin 10.5% 0.5% 0.5% 0.5% 0.5% 1.0% ~13% 2016 2019 Target BGS Val-Cargo CompuSafe Retail Automation Core Growth Fleet Operational Improvements 1. Excludes Pa
Slide 81: Brazil Three-Year Outlook
2016 Actual 2019 2016 Actual 2019 Brazil Three-Year Outlook 81 REVENUE1 HIGHER MARGIN SERVICES1 Accelerating profitable growth with higher margin services • CompuSafe® and other retail cash services grew 24% in 2016 • Increasing demand for higher margin retail services • BGS and valuable cargo servi
Slide 82: Mexico and Brazil Summary
Mexico and Brazil 82 SUMMARY GROWING MARGINS TO 13% BY 2019 • Accelerating growth with higher margin services • Closing the gap with operational efficiencies GROWING MARGINS TO 15% BY 2019 • Reducing labor • Optimizing routes • Reducing fleet costs • Growth in higher margin services 1. Excludes Paym
Slide 83: Technology
ROH A N PA L Technology
Slide 84: Agenda
Agenda 84 Technology vision for Brink’s Driving customer value with technology Technology strategy and roadmap Expected financial impact
Slide 85: Technology Vision
Technology Vision 85 TECHNOLOGY FOR BUSINESS SAKE Improve Operations and Customer Service Support Our Evolving Business Model 1 2 USE TECHNOLOGY To Grow in Two Ways:
Slide 86: Technology Drives Customer Value
Technology Drives Customer Value 86 WE DELIVER THE RIGHT AMOUNT OF CASH, AT THE RIGHT TIME, TO THE RIGHT PLACE DEVICE MANAGEMENT AND MONITORING CUSTOMER PORTAL TELEMATICS AND ROUTE LOGISTICS FORECASTING ENGINE AND PREDICTIVE ANALYTICS CALL CENTER MANAGEMENT AND MONITORING ASSIGN TO ROUTE MONEY PROCE
Slide 87: Technology Strategy
INFRASTRUCTURE Technology Strategy WELL DEFINED, WELL BALANCED, WELL INTEGRATED Master route optimization Dynamic route planning Telematics Handheld technology Ground transportation Money processing Vault management Freight forwarding Customer care Customer interactive services Managed services Cust
Slide 88: Transforming Our Infrastructure
Transforming Our Infrastructure 88 BUILDING THE BRINK’S CLOUD Brink’s Tomorrow: • Hyper-converged technology • Software defined hybrid cloud • 5 data centers BRINK’S TODAY: • High costs • Infrastructure is nearing end-of-life • 16 data centers COMMON STANDARD: Managed virtualization • Technology foo
Slide 89: North America Technology Roadmap 2017-2019
North America Technology Roadmap 89 2017-2019 HIGHLIGHTS 20182017 2019 Operations Back Office Route Logistics Branch System Enhancements Oracle Financials Telematics Rollout PortalCustomers Managed Services Customer Integrated Services Master Route Optimization Branch Operations Secure System Branch
Slide 90: Actively Managing Risks
Actively Managing Risks 90 BUSINESS PARTNERSHIP AT EVERY STAGE RISK MITIGATING ACTIONS Technology • Involve the business in selecting the technology • Use technology we already own and do proofs-of-concept • Acquire best-of-breed products with established track records Implementation • Manage initia
Slide 91: IT Financial Priorities
IT Financial Priorities 91 Our focus: reduce global IT spend as a percent of revenue from 4.7% in 2016 to 3.7% by 2019. 2019 IT SPEND ALLOCATION (FORECAST)2016 IT SPEND ALLOCATION 11% 25% 75%89% New Projects New Projects “Keeping the Lights on” “Keeping the Lights on”
Slide 92: What We've Accomplished
What We’ve Accomplished 92 Infrastructure Integrated Mexico’s data center into U.S. data center Route Logistics New telematics added to ~280 trucks Daily route planning tool live in 4 branches with 18% of routes optimized Operations New mobility component live in 45% of branches First branch live wi
Slide 93: Our Focus
Our Focus 93 Technology for business sake Rush to create technology balance Evolve the business model Reduce cost while driving returns
Slide 94: Financial Review: Value Creation Strategy
RON D OMA N ICO Financial Review Value Creation Strategy
Slide 95: Value Creation Strategy — Brink's Building Blocks
Value Creation Strategy — Brink’s Building Blocks GROWTH (APG) • Grow Organically • Pursue Adjacencies • Introduce Differentiated Service (IDS) • Make Acquisitions MARGINS (CTG) • Pricing • Lean Cost Structure • Optimize Procurement • Operating Leverage • Corporate Cost Discipline • Interest, Taxes,
Slide 96: Credibility
Credibility
Slide 97: Credibility — Reduce Complexity
U.S. Mexico Brazil Latin America France Europe Asia SEGMENT MAPPING (2016 NON-GAAP REVENUE) Credibility — Reduce Complexity REPORTING SEGMENT CONSOLIDATION • Manage the business in a more simplified organization and responsibility structure • Allocate resources, assess performance and make decisions
Slide 98: Credibility — Increase Transparency
Credibility — Increase Transparency 98 REPORTING GAAP and Non-GAAP with insight into results • Actual and currency adjusted • Focus on performance drivers, unusual items • Clear reconciliations Balance Sheet and Cash Flow Statement in earnings materials Corporate • Clarity around corporate expenses
Slide 99: Credibility — Set Aggressive Targets
2016 Actual Currency Adjusted 2017 Outlook 2019 Target2016 Actual Currency Adjusted NON-GAAP OPERATING PROFIT1 NON-GAAP EPS1NON-GAAP ADJUSTED EBITDA1 2016 Actual Currency Adjusted Credibility — Set Aggressive Targets ($ in millions, except EPS and %) 2017 Outlook 2019 Target $192 $230 – $240 ~$325 $
Slide 100: Credibility — Meet / Exceed Goals
Credibility — Meet / Exceed Goals ($ in millions, except EPS and %) Consistently Over Time 100 2016 NON-GAAP GUIDANCE ON JULY 28, 2016 GUIDANCE ON OCTOBER 26, 2016 ACTUAL RESULTS Organic Revenue Growth 5% 5% 6% Operating Profit $185 – $200 $185 – $200 $207 Operating Profit Margin 6.4% – 6.9% 6.4% –
Slide 101: Growth (APG)
Growth (APG)
Slide 102: Revenue — Accelerate Profitable Growth
2016 Actual Currency Adjusted 2017 Outlook 2019 Target Revenue — Accelerate Profitable Growth 102 ($ in millions) $2,828 $3,000 $3,275 NON-GAAP REVENUE: 2016 – 20191 REVENUE DRIVERS Grow Organically • Grow organically faster than our competitors…hunter sales force • Grow higher-value services at hig
Slide 103: Growth — M&A Strategy
Growth — M&A Strategy 103 WE ARE BUYERS WHAT WE LOOK FOR • Acquisitions complement organic growth strategy • Leadership team has a track record of accretive acquisitions • Disciplined approach, rigorous analysis • Post completion audits • 20+ active projects in the pipeline CORE BUSINESS Priority 1:
Slide 104: Margins (CTG)
Margins (CTG)
Slide 105: Margins — Operating Profit and EBITDA
Margins — Operating Profit and EBITDA 105 ($ in millions) NON-GAAP OPERATING PROFIT AND ADJUSTED EBITDA: 2016 – 20191 MARGIN EXPANSION DRIVERS • Realize pricing • Drive Lean processes • Use procurement to drive down cost • Operating leverage • Corporate expense discipline • IT: • drive growth and va
Slide 106: Margins — Pricing
Margins — Pricing 106 OUR PHILOSOPHY OUR SITUATION Inflation-driven Price Increases • Successful in South America and Mexico • More challenging in developed markets (e.g. United States and Europe) Focus on Higher-Value Services • CompuSafe® service • Recyclers • Cash supply chain management • Delive
Slide 107: Margins — Drive Lean Processes
Margins — Drive Lean Processes 107 PROCESS STANDARDIZATION • Branch operations • Money processing rooms LABOR • Crew sizes reduced • Labor managed daily • SG&A leveraged FLEET • Fleet design efficiency • Vehicle purchase costs lowered • Maintenance costs reduced • Vehicle availability increased FOOT
Slide 108: Margins — Use Procurement to Drive Down Costs
Margins — Use Procurement to Drive Down Costs 108 STRUCTURE FOCUS AREAS / SUCCESSES Global Leadership ARMORED VEHICLES • Lower purchase price • Reduced operating costs • Improved warranty coverage INFORMATION TECHNOLOGY • Hardware, including Data Centers • Software, global licensing • Consultants OP
Slide 109: Margins — Operating Leverage
2016 2019 ~19% Op Profit CAGR ~5% Revenue CAGR 3X+ Leverage 109 Margins — Operating Leverage OPERATING LEVERAGE DRIVING OPERATING LEVERAGE • Increase margins by running more volume through existing infrastructure • Optimize existing route structure to increase density • Hub and spoke operations for
Slide 110: Margins — Corporate Expense Discipline
2015 Actual 2016 Actual 2017 Outlook Margins — Corporate Expense Discipline 110 ($ in millions) 1. 2016 corporate expenses were adjusted to exclude unusual items impacting year-over-year comparisons CORPORATE EXPENSE 2015 – 2017 EXAMPLES • Relocated some functions to lower cost geographies • Combine
Slide 111: Margins — Interest Expense
Margins — Interest Expense 111 ($ in millions) INTEREST EXPENSE 2016 – 2019 • ~70% floating, ~30% fixed rate debt at December 31, 2016 • Weighted average cost of debt: 4.3% (2.7% after tax) at December 31, 2016 2019 TARGET ASSUMES: • 2017 Capex level • Dec. 31, 2016 interest rates • Net Debt reduced
Slide 112: Margins — Income Taxes
Margins — Income Taxes 112 DEFERRED TAX ASSET2017 NON-GAAP TAX RATE Non U.S. $57 Other $49 Liabilities & Stock Comp $80 U.S. Post- retirement Benefit Plans $142 $3281 U.S. DTA $271 Weighted Average Tax Rate Certain Mexico Deductions Valuation Allowances Other / Imputed Income Effective Tax Rate Outl
Slide 113: Margins — EPS
Margins — EPS 113 NON-GAAP EPS: 2016 – 20191 THE SUM OF ALL INITIATIVES • Grow organically • Pursue adjacencies • Introduce differentiated services • Realize Pricing • Drive Lean processes • Use Procurement to drive down cost • Create operating leverage • Corporate expense discipline 2016 Actual Cur
Slide 114: Returns (ROI)
Returns (RO!) \\\ oe — -
Slide 115: Returns — Capital Structure: Debt
$163 $56 $93 $86 $60 $67 $111 $212 Dec 2015 Dec 2016 Returns — Capital Structure: Debt 115 DEBT BALANCE RATINGS • BBB-…S&P and Fitch (investment grade) • Ba1…Moody’s (high yield) DEBT DENOMINATED IN: • ~ 80% US Dollars • ~ 9% Euros • ~ 7% Mexican Pesos WEIGHTED AVERAGE COST OF CAPITAL (WACC) • Cost
Slide 116: Returns — Capital Structure: Legacy Liabilities
Primary U.S. Pension (b) UMWA (c) Returns — Capital Structure: Legacy Liabilities 116 ($ in millions) PROJECTED CASH CONTRIBUTIONS Due to Uncertain Timing and Amount of Contributions, Legacy Liabilities Are Typically Excluded from “Debt” FUNDING DEFICIT – DEC. 31, 2016 (a) ($108) ($227) Increasing I
Slide 117: PRP Sensitivity of 12/31/2016 Funded Status
PRP Sensitivity of 12/31/2016 Funded Status (%) -2.0% 2.3% -1.0% 3.3% 0.0% 4.3% +1.0% 5.3% +2.0% 6.3% +20% 84 90 96 101 107 +10% 81 87 92 97 102 0% 78 83 87 92 96 -10% 74 78 82 86 90 -20% 70 73 77 81 84 Change in Interest Rates “R et ur n En ha nc em en t” A nn ua l R et ur n Analysis based on roll
Slide 118: Returns — Financial Leverage
Returns — Financial Leverage 118 ($ in millions) As Projected Cash Contributions Are So Far in the Future, Legacy Liabilities Are Excluded from Debt When Calculating the Leverage Ratio 2016 – 2017 DEBT CAPACITY • Current Available Committed Debt Capacity at December 31, 2016 of $481 million INTERNAL
Slide 119: Returns — CapEx: CompuSafe Financing
Returns — CapEx: CompuSafe® Financing 119 Smart Safe Acquisitions for use with our CompuSafe® Service Our Philosophy • Smart Safes are not traditional Capital Expenditures • Cost of Services Sold (COSS) Economics • Customer contract service periods closely match purchased safe useful lives or operat
Slide 120: Returns — Capital Expenditures
2016 Actual 2017 Outlook Returns — Capital Expenditures 120 ($ in millions) CAPITAL EXPENDITURES 2016 – 2017 INVESTMENT RATIONALE • Armored vehicle fleet update with 20%+ returns • CompuSafe® growth across multiple countries • Facilities investment to support hub and spoke • Equipment includes Money
Slide 121: Returns — Acquisition Capacity and Impact
Net Debt at 12/31/16 Net Debt at 3.0X Leverage Ratio Returns — Acquisition Capacity and Impact 121 ($ in millions) LEVERAGE We Have Available Capacity to Grow Leverage Ratio 0.7X 3.0X REVENUE TARGETS $3,275 2019 Revenue Target 2019 Revenue Potential w/ Acquisitions Acquisitions Existing Net Debt2 1.
Slide 122: Returns — Adjusted EBITDA Multiple
2015 2016 2016 Updated 2019 Peer A Peer B Peer C 9.4X 10.0X 7.5X BRINK’S PEERS — CURRENT Returns — Adjusted EBITDA Multiple 122 ($ in millions) Adjusted EBITDA $291 $333 ~$475 EBITDA % 9.8% 11.4% ~15% 2. Trailing 12 months as of 12/31/16; source: publicly available peer financial information Multipl
Slide 123: Value Creation Strategy
2016 Currency Adjusted 2019 Target 2016 Currency Adjusted 2019 Target 2016 Currency Adjusted 2019 Target NON-GAAP REVENUE NON-GAAP EPSNON-GAAP OP PROFIT / EBITDA 123 Value Creation Strategy GROWTH MARGINS RETURNS • Grow organically • Pursue adjacencies • Introduce differentiated services • Acquisiti
Slide 124: Conclusion Q&A: Why Brink's?
D OU G P ERTZ Conclusion Q&A Why Brink’s?
Slide 125: Operating Profit 2016 – 2019
Operating Profit 2016 – 2019 125 Target: 10% Operating Margin in 2019 Led by U.S. and Mexico OP Margin 7.1% 3.7% 1.3% 0.4% (2.5%) 10% ($ in millions) $207 $325$125 $58 $27 ($92) 2016 Actual Rest of World Contingency 2019 TargetNorth America South America
Slide 126: 2019 Targets Drive Superior Shareholder Returns
2016 Currency Adjusted 2019 Target 2016 Currency Adjusted 2019 Target 2016 Currency Adjusted 2019 Target REVENUE OPERATING PROFIT ADJUSTED EBITDA ($ in millions) ($ in millions) ($ in millions) ~10% Margin 2019 Targets Drive Superior Shareholder Returns 126 ~5% CAGR $2,828 $3,275 $325 $192 6.8% Marg
Slide 127: Value Creation Opportunity
Value Creation Opportunity Market Value February 23, 2017 Market Value 2019 Potential $2,570 $4,275 2019 EBITDA target $ 475 Average multiple of peer group 9.0 Potential 2019 market value 1 4,275 Market value on February 23, 2017 2,570 Potential growth at December 31, 2019 $ 1,705 Potential percenta
Slide 128: Why Brink's?
+ + Why Brink’s? Brink’s has the right leadership, the right strategy and the financial strength to drive superior shareholder returns. Market Strength • Premier global brand with unmatched footprint and customers in 100+ countries • Strong market position People • New leadership with proven track r
Slide 129: Appendix
Appendix
Slide 130: Non-GAAP Reconciliation — Net Debt
Non-GAAP Reconciliation — Net Debt The Brink’s Company and subsidiaries Non-GAAP Reconciliations — Net Debt (Unaudited) (In millions) a) Amount excludes $22.3 million at December 31, 2016 for short term borrowings related to cash borrowed under lending arrangements used in the process of managing cu
Slide 131: 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 Fixed Assets Acquired Full Year 2016 Capital expenditures — GAAP 112.2 Assets acquired under capital lease — GAAP 29.4
Slide 132: Executive Bios — Doug Pertz and Amit Zukerman
Executive Bios — Doug Pertz and Amit Zukerman 132 Doug Pertz President and Chief Executive Officer Douglas (Doug) A. Pertz is the President and Chief Executive Officer and a director of The Brink’s Company and has served in these roles since June 2016. He has led several global companies as CEO over
Slide 133: Executive Bios — Mike Beech and Rohan Pal
Executive Bios — Mike Beech and Rohan Pal 133 Mike Beech Executive Vice President Mike Beech is Executive Vice President of Brink’s and President Brazil, Mexico and Security. Previously Mike was President of the company’s Europe, Middle East and Africa (EMEA) region. Mike joined Brink’s in 2009 as V
Slide 134: Executive Bios — Ron Domanico
Executive Bios — Ron Domanico 134 Ron Domanico Chief Financial Officer, and Treasurer Ronald (Ron) J. Domanico is Executive Vice President and Chief Financial Officer of Brink’s. Ron also is responsible for the global procurement functions. Prior to joining Brink’s, Ron was the SVP Strategic Initiat