Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q4 2017 Earnings Presentation
28 slides from Brinks Company (the)'s earnings presentation, Feb 7, 2018
Slide 1: Fourth-Quarter & Full-Year 2017
S ECU RE LOG IST ICS. WORLDW ID E. Fourth-Quarter & Full-Year 2017 Fe b ruary 7 , 2018
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 Today's Agenda
CEO Overview Today’s Agenda • Strong 4Q and 2017 non-GAAP results • Outlook – increased 2018 and 2019 targets • Strong U.S. results – “breakthrough initiatives” on track • Strategy – organic growth + core acquisitions driving shareholder value • Financial review and tax reform • Questions 4
Slide 5: Fourth-Quarter 2017 Non-GAAP Results
Fourth-Quarter 2017 Non-GAAP Results ($ in millions) $768 $864 2016 2017 REVENUE ($ Millions) +13% 5% Organic $79 $91 2016 2017 10.3% Margin OPERATING PROFIT 10.5% Margin ADJUSTED EBITDA $112 $130 2016 2017 14.6% Margin 15.1% Margin ($ Millions) EPS $0.88 $0.95 2016 2017 ($ Millions) +15% 5 +16% +8%
Slide 6: Full-Year 2017 Non-GAAP Results
OPERATING PROFIT 8.2% Margin Full-Year 2017 Non-GAAP Results REVENUE ($ Millions) ADJUSTED EBITDA ($ Millions) EPS ($ Millions) +24% +33% $2,908 $3,193 2016 2017 $216 $281 2016 2017 7.4% Margin 8.8% Margin $342 $425 2016 2017 11.8% Margin 13.3% Margin $2.28 $3.03 2016 2017 +10% 6% Organic +30% 6Note
Slide 7: 2018 Non-GAAP Guidance
2018 Non-GAAP Guidance ($ in millions) $3,193 ~ $3,450 2017 2018 REVENUE ($ Millions) +8% 5% Organic $281 $365- $385 2017 2018 OPERATING PROFIT ~10.9%1 Margin ADJUSTED EBITDA $425 $515-$535 2017 2018 13.3% Margin ~15.2%1 Margin ($ Millions) EPS $3.03 $3.65-$3.85 2017 2018 ($ Millions) +30% - 37% +21
Slide 8: Strategic Plan 2017–2019: Core Organic Growth
8 ($ millions) OP Margin 7.4% 3.7% 2% 0.4% (2.5%) ~11% ~10% $216 $390 $325 2016 Actual North America South America Rest of World Contingency 2019 Target Before Acquisitions 2019 Target Investor Day Mar 2, 2017 EBITDA Margin 11.8% ~15% $535 EBITDA Operating Profit Note: See detailed reconciliations o
Slide 9: U.S. Breakthrough Initiatives – Met 2017 Targets
9 FLEET COST IMPROVEMENTS ONE-PERSON VEHICLES PURCHASED ONE-PERSON VEHICLE LABOR • ~700 one-person vehicles now in service • Updating ~60% of fleet by end of 2019 • Reducing average fleet age from 10+ to 6 years • Employee and customer acceptance high 2017 Savings: $10 million NETWORK OPTIMIZATION 2
Slide 10: U.S. Breakthrough Initiatives: CompuSafe Service
10 U.S. Breakthrough Initiatives CompuSafe® Service – Met 2017 New Order Target HIGHLIGHTS • Sold 3,300 CompuSafe® units in 2017 vs 3,000 -3,500 target • Installed ~2,300 • 2H-17 run rate in line with 2019 target… pipeline strong • Continued investment in sales and operations COMPUSAFE UNITS1 1,750
Slide 11: A Clear Path to Value Creation: U.S. Operating Profit Improvement
2016 Base Branch Standardization Fleet Improvements One-Person Vehicle Labor Network Optimization Sales Growth/ CompuSafe IT and Other Contingency 2019 Target 11 Actual 0.8% ~10% Breakthrough Initiatives 1. Excludes Payment Services (2 – 3 %)~1% 2 – 2.5% ~2% ~1%2 – 3% ($ Millions) 1.5 – 2% 2.5 – 3%
Slide 12: Three-Year Strategic Plan: Organic Growth + Acquisitions
Three-Year Strategic Plan ORGANIC GROWTH + ACQUISITIONS Strategy 1.0 Core Organic Growth 20182017 2019 12 • Focus on “core-core” & “core-adjacent” • Capture synergies & improve density • 2017 Investment: $365M • 2018-2019 expected investment ~$400M per year • Close the Gap • Accelerate Profitable Gr
Slide 13: Strategic Plan 2017–2019: Core Organic Growth + Acquisitions
OP Margin 7.4% 3.7% 2% 0.4% (2.5%) ~11% ~12% 13 $216 $390 $470 2016 Actual North America South America Rest of World Contingency 2019 Target Acquisitions 2019 Target w/ Acquisitions ($ Millions) EBITDA Margin 11.8% ~15% ~16% $625 $535 EBITDA Op Profit EBITDA Op Profit 1. Incudes announced and comple
Slide 14: Financial Review
Ron Domanico Financial Review
Slide 15: Full-Year 2017 vs 2016 Non-GAAP Revenue
($ Millions) 1% 6%2%% Change Full-Year 2017 vs 2016 Non-GAAP Revenue $2,908 $28 $2,937 $70 $186 $3,193 2016 Revenue Currency 2016 Adjusted Revenue Acq / Disp Organic 2017 Revenue 15Note: See detailed reconciliations of non-GAAP to GAAP results included in the Fourth Quarter 2017 Earnings Release ava
Slide 16: Full-Year 2017 vs 2016 Non-GAAP Operating Profit
7.4% 8.8%OP Margin Full-Year 2017 vs 2016 Non-GAAP Operating Profit ($ Millions) 16Note: See detailed reconciliations of non-GAAP to GAAP results included in the Fourth Quarter 2017 Earnings Release available in the Quarterly Results section of the Brink’s website: www.brinks.com. Amounts may not ad
Slide 17: Full-Year 2017 Non-GAAP Results vs 2016
$281 ($33) ($85) ($6) $157 $134 $116 $18 $425 Op Profit Net Interest Taxes Non-controlling interest Income from Continuing Ops D&A Interest Exp & Taxes Share-based Compensation Adjusted EBITDA ($ Millions, except EPS) EPS 2017 $3.03 2016 $2.28 ($8) ($15)$66 $42 $8($1) $25 $83 vs 2016 Full-Year 2017
Slide 18: Capital Expenditures 2015–2018
2015 Actual 2016 Actual 2017 Actual 2018 Outlook Capital Expenditures Before CompuSafe® Service 18 CAPITAL EXPENDITURES 2015 – 20181,2 Facility Equipment / Other IT Armored Vehicles D&A2 $118 $112 $119 Reinvestment Ratio1 0.9 1.1 1.6 $124 1. See Non-GAAP reconciliation in Appendix 2. Excludes CompuS
Slide 19: Tax Reform – Impact on Brink's
Tax Reform – Impact on Brink’s 19Note: The amounts described above represent the estimated impact of the enactment of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017. The final impact of Tax Reform may differ from these estimates, due to, among other things, changes in inte
Slide 20: Capital Structure: Debt
$1,000 12/31/2017 Returns — Capital Structure: Debt DEBT BALANCE RATINGS: • S&P and Fitch BB+ • Moody’s Ba1 • High yield DEBT DENOMINATIONS: • ~ 96% U.S. Dollars • ~ 4% Other WEIGHTED AVERAGE COST OF DEBT2: • 2017: ~4.3% • 2018 Outlook: ~5.0% $105 9/30/2017 Sr. Notes Term Loan A Revolver Revolver $2
Slide 21: Debt and Leverage
$425 ~ $40 2 $306 $342 $425 ~ $465 2015 2016 2017 Pro-forma 2017 $269 $247 $612 $158 $174 $598 $427 $421 $1,210 Dec 2015 Dec 2016 Dec 2017 ($ Millions) Leverage Ratio1 0.9 0.7 1.4 Note: No cash payments expected for primary U.S. pension plan and no payment until 2027 for UMWA, based on 12/31/17 actu
Slide 22: Adjusted EBITDA and Operating Profit Outlook
$216 $281 $365 - $385 ~ $470 $126 $144 ~ $150 ~ $155 $342 $425 $515 - $535 ~ $625 2016 2017 2018 Outlook 2019 Target ($ Millions, except share price) 11.8%Margin 13.3% Share Price $41.25 Adj. EBITDA Adjusted EBITDA 22 Depreciation & Amortization /Other Op Profit $78.70 ~15.2% Note: See detailed reco
Slide 23: Non-GAAP Operating Profit & EBITDA: Continued Improvement Expected
$216 $281 $365 – $385 ~ $470 $126 $144 ~ $150 ~ $155 7.4% 8.8% 10.6% - 11.2% ~12%11.8% 13.3% ~15.2% ~16% 2016 2017 2018 Outlook 2019 Target Continued Improvement Expected Non-GAAP Operating Profit & EBITDA 2018 Non-GAAP Outlook • Revenue ~$3.45 billion (5% organic growth) • Operating profit $365 - $
Slide 24: Appendix
Appendix
Slide 25: 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 26: 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 Full Year 2017 Capital expenditures — G
Slide 27: 2015 Non-GAAP Reconciliations (1 of 2)
2015 Non-GAAP Reconciliations (1 of 2) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2015 Full Year Operating profit (loss): GAAP 96.4 Venezuela operations(a) 45.6 Reorganization and Restructuring(a) 15.3 Acquisitions and dispositions(a) 10.2 Non-GAAP 167.5 Taxes: GAAP
Slide 28: 2015 Non-GAAP Reconciliations (2 of 2)
2015 Non-GAAP Reconciliations (2 of 2) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2015 Full Year Adjusted EBITDA: Income from continuing operations - Non-GAAP 87.1 Interest expense - Non-GAAP(e) 18.9 Income tax provision - Non-GAAP 53.6 Depreciation and amortization