Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q2 2017 Earnings Presentation
27 slides from Brinks Company (the)'s earnings presentation, Jul 26, 2017
Slide 1: Second Quarter 2017
S ECU RE LOG IST ICS. WORLDW ID E. Second Quarter J u l y 26 , 2017 Exhibit 99.2
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: CEO Overview
CEO Overview Doug Pertz
Slide 4: CEO Overview: Second-Quarter Highlights
CEO Overview 4 SECOND-QUARTER HIGHLIGHTS • Strong improvement in revenue, operating profit, earnings and cash flow • Profit growth in North and South America led by U.S., Mexico, Brazil and Argentina • Execution of 3-year strategic plan gaining traction • 4 acquisitions completed YTD through 7/26; T
Slide 5: Second-Quarter 2017 Non-GAAP Results
Second-Quarter 2017 Non-GAAP Results 5 Continued Momentum in Second Quarter ($ in millions) $717 $760 2016 2017 REVENUE ($ Millions) +6% Organic $39 $60 2016 2017 5.5% Margin OPERATING PROFIT 7.9% Margin + 52% ADJUSTED EBITDA $70 $91 0 20 40 60 80 100 2016 2017 9.7% Margin 12% Margin ($ Millions) +3
Slide 6: Non-GAAP Operating Profit 2016 – 2019
Non-GAAP Operating Profit 2016 – 2019 6 New Target: 11%+ Operating Margin in 2019 ($ Millions) 2016 Actual Rest of World Contingency 2019 TargetNorth America South America $212 $400 $125 $58 $27 ($67) $355 $45 Completed Acquisitions July 2017 OP Margin 7.3% 3.5% 1.1% 0.3% (1.7%) 10.5% 0.8% 11.3% (as
Slide 7: Global Breakthrough Initiatives
7 Sales, Marketing & Intelligent Safes Global Breakthrough Initiatives • “Next generation” trucks starting to come on-line in U.S. • Lower R&M expenses beginning to have an impact in U.S. and Mexico • Expect to convert 60% of U.S. routes by end of 2019 • Lower labor costs beginning to have impact in
Slide 8: APG – Accelerate Profitable Growth
APG – Accelerate Profitable Growth Acquisition Update: • “Core – Core” – Core businesses in Core Markets • 4 completed YTD through 7/26 • Expected to be accretive in 2017 • Expect significant accretion in 2019 • Temis France expected to close in 4Q • Robust pipeline of additional opportunities Expec
Slide 9: Maco Accelerates Profitable Growth (APG)
Maco Accelerates Profitable Growth (APG) • $209 million expected purchase price • $90 million LTM revenue, $24 million LTM adjusted EBITDA • Significant consolidation synergies expected • ~6x Adjusted EBITDA post-integration (8.7x pre-integration) • Solidifies #2 position in Argentina • Strong custo
Slide 10: Financial Review
Ron Domanico Financial Review
Slide 11: Value Creation Strategy – Brink's Building Blocks
Value Creation Strategy – Brink’s Building Blocks GROWTH (APG) • Grow Organically • Pursue Adjacencies • Introduce Differentiated Service (IDS) • Make Acquisitions MARGINS (CTG) • Pricing • Lean Cost Structure • Optimize Procurement • Operating Leverage • Corporate Cost Discipline • Interest, Taxes,
Slide 12: Non-GAAP Revenue: Second Quarter 2017 vs 2016
($ Millions) 0% 6% Organic Adjusted 2016 RevenueCurrency Acq/Disp 2016 Revenue 2017 Revenue 0%% Change Note: See detailed reconciliations of non-GAAP to GAAP results included in the Second Quarter 2017 Earnings Release available in the Quarterly Results section of the Brink’s website: www.brinks.com
Slide 13: Non-GAAP Operating Profit: Second Quarter 2017 vs 2016
5.5% 7.9% Organic Adjusted 2016 Op ProfitCurrency Acq/Disp 2016 OP Profit 2017 OP Profit OP Margin $39 $38 $60 ($2) $1 $22 Non-GAAP Operating Profit: Second Quarter 2017 vs 2016 13 Note: See detailed reconciliations of non-GAAP to GAAP results included in the Second Quarter 2017 Earnings Release ava
Slide 14: Non-GAAP Results – Second Quarter
$60 $33 $91 $34 $25 ($7) ($19) ($2) ($ Millions, except EPS) EPS 2017 $0.64 2016 $0.39 Net Interest & Other TaxesOp Profit Income from Continuing Ops D&A Minority Interest Interest Exp. &Taxes Adjusted EBITDA ($1) ($6)$21 $13 $1_ $7 $21 vs 2016 Non-GAAP Results – Second Quarter 14 Note: See detailed
Slide 15: First-Half 2017 Non-GAAP Results
$72 $113 2016 2017 5.1% Margin OPERATING PROFIT 7.5% Margin + 57% First-Half 2017 Non-GAAP Results 15 A Strong First Half $1,405 $1,500 2016 2017 REVENUE ($ Millions) +7% Organic ADJUSTED EBITDA $132 $174 2016 2017 9.4% Margin 11.6% Margin ($ Millions) +32% EPS +73% $0.70 $1.21 2016 2017 ($ Millions
Slide 16: Capital Expenditures 2015 – 2017
2015 Actual 2016 Actual 2017 Outlook Capital Expenditures 16 ($ Millions) CAPITAL EXPENDITURES 2015 – 2017 CompuSafe® Facility Equipment / Other IT Armoured Vehicle D&A $132 $127 ~$145 Reinvestment Ratio1 0.9 1.1 TBD $124 Total Before CompuSafe® $137 $180 Total Before CompuSafe® CompuSafe® 1. See No
Slide 17: Debt and Leverage
($ Millions) Leverage Ratio* 0.9 0.7 1.0 Note: No cash payments expected until 2021 for primary U.S. pension plan and 2027 for UMWA, based on 12/31/16 actuarial assumptions Cash Net Debt Note: See reconciliation to GAAP results in Appendix Debt Adjusted EBITDA and Financial Leverage * Net Debt divid
Slide 18: Adjusted EBITDA and Peer Multiples
($ Millions, except share price) Multiple 9.9%Margin 12.5% Multiple 6.1x 10.0x Source: Most recent trailing 12 months and publicly available peer financial information Share Price $28.49 $67.00 Adj. EBITDA Brink’s Peers Note: See detailed reconciliations of non-GAAP to GAAP results included in the F
Slide 19: 2017 Non-GAAP Guidance Increased
2017 Non-GAAP Guidance Increased 2016 Results Prior 2017 Guidance (4/26/2017) Organic Currency Acquisitions (1) Updated 2017 Guidance (7/26/2017) Increase vs 2016 Revenue $2,908 $3,036 ‒ $92 $52 $3,180 9% Operating Profit $212 $235-$245 $20 $5 $10 $270-$280 ~30% Operating Margin 7.3% 7.8%-8.2% 8.5%-
Slide 20: 2019 Non-GAAP Guidance Increased
2019 Non-GAAP Guidance Increased 2016 Results Prior 2019 Guidance Organic Currency Acquisitions (1) Updated 2019 Guidance (7/26/2017) Increase vs 2016 Revenue $2,908 $3,275 ‒ $100 $175 $3,550 22% Operating Profit $212 $330 $20 $5 $45 $400 89% Operating Margin 7.3% 10% 11.3% 4 pts. Adjusted EBITDA $3
Slide 21: Conclusion
Conclusion
Slide 22: Continued Improvement Expected in 2017 & Beyond
$163 $212 $270 - $280 $4005.5% 7.3% 8.5% - 8.8% 11.3% 2015 2016 2017 2019 Continued Improvement Expected in 2017 & Beyond Non-GAAP Operating Profit Margin 2017 Non-GAAP Outlook • Revenue $3.2 billion (6% organic growth) • Operating profit $270 - $280 million; margin 8.5% - 8.8% • Adjusted EBITDA $41
Slide 23: 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 24: Questions?
Questions?
Slide 25: Appendix
Appendix
Slide 26: 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) Restricted cash borrowings are related to cash borrowed under lending arrangements used in the process of managing customer cash supply chains, which is currently
Slide 27: 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 2015 Full Year 2016 Capital expenditures — GAAP 101.1 112.2