Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Bank of America Merrill Lynch Leveraged Finance Conference 2017
36 slides from Brinks Company (the)'s conference presentation, Nov 29, 2017
Slide 1: Bank of America Merrill Lynch Leveraged Finance Conference
S ECU RE LOG IST ICS. WORLDW ID E. Bank of America Merrill Lynch Leveraged Finance Conference N o v e m b e r 2 0 1 7 Exhibit 99.1
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: 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 • Unmatched footprint in 100+ countries • Strong market position People • Leadership with proven track record • Customer-driv
Slide 4: World's Largest Cash Management Company
World’s Largest Cash Management Company2 Global cash market $17.9 billion1 South America 25% Rest of World 34% North America 41% GLOBAL MARKET LEADER Loomis G4S Garda Prosegur Other 2016 SEGMENT REVENUE3 OPERATIONS • 41 countries • 1,000 facilities • 11,900 vehicles • 60,700 employees CUSTOMERS IN M
Slide 5: 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 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 5. Feder
Slide 6: Lines of Business and Customers
CORE SERVICES • Cash-in-Transit (CIT) • ATM services HIGH-VALUE SERVICES • Brink’s Global Services (BGS) • Money processing • Vault outsourcing • CompuSafe® and retail services • Payments Core Services $1.6B (52%) High-Value Services $1.3B (41%) Guarding $0.2B (7%) Financial InstitutionsGovernment/
Slide 7: Strong Position in Key Growth Markets
Loomis Garda Other Other Garda GSI Other Prosegur Other RoomafdMrk Strong Position in Key Growth Markets Canada U.S. France Mexico Chile Argentina Brazil Colombia Israel Hong Kong/ Macau Brink’s All others Legend ESTIMATED MARKET SHARE IN KEY COUNTRIES1,2 1. Internal estimates of market share of CIT
Slide 8: Our Strategy
Our Strategy Accelerate Profitable Growth (APG) Close the Gap — Operational Excellence (CTG) Introduce Differentiated Services (IDS) ACCELERATE PROFITABLE GROWTH • Grow high-value services • Grow account share with large financial institution (FI) customers • Increase focus on smaller FIs • Penetrat
Slide 9: Three-Year Strategic Plan: Organic Growth Initiatives
Three-Year Strategic Plan: Organic Growth Initiatives • Fleet – reduce repair & maintenance, improve service • Crew size – reduce labor cost • Network optimization – deploy high-speed money processing equipment • Intelligent safes – expand CompuSafe® service sales • Labor – reduce cost, improve effi
Slide 10: 2019 Non-GAAP Operating Profit Target
2019 Non-GAAP Operating Profit Target Target: 11%+ Operating Margin in 2019 ($ Millions) 2016 Actual Rest of World Contingency 2019 TargetNorth America South America $216 $400 $125 $58 $27 ($71) $355 $45 Completed Acquisitions1 OP Margin 7.4% 3.5% 1.1% 0.3% (1.8%) 10.5% 0.8% 11.3% (as of October 25,
Slide 11: Value Creation Targets – U.S.
Value Creation Targets – U.S. Note: Excludes Payment Services 1. Actual 2016 Non-GAAP operating margin of 0.8%. Normalized margin of 2-3% based on the results of the second half of 2016. 2016 Base Branch Standardization Fleet Improvements One-Person Vehicle Labor Network Optimization Sales Growth/ C
Slide 12: Three-Year Strategic Plan: Organic Growth + Acquisitions
Three-Year Strategic Plan Organic Growth + Acquisitions • Focus: Core/core; core/adjacent • Objectives: Capture synergies & improve density • Investment 2017: ~$370M • Investment 2018-2019: ~$400M per year Strategy 1.0 Core Acquisitions 2017 Initial 2019 Target1: $475M EBITDA 2018 2019 • Close the G
Slide 13: Strategic Execution - Acquisitions
Strategic Execution - Acquisitions Acquisition Update: • “Core – Core” – Core businesses in Core Markets • 5 completed YTD through 10/25 o September YTD 2017 contributions1 o $47 million revenue o $8 million operating profit o $0.10 EPS o Expect significant accretion in 2019 • Temis France closed 10
Slide 14: What We've Accomplished with Room to Grow
Note: See detailed reconciliations of Non-GAAP to GAAP results included in the Third Quarter 2017 earnings release available in the Quarterly Results section on the Brink’s web site: www.brinks.com 1. Internal estimate. 2. Internal estimates based on global competitor benchmarks, includes corporate
Slide 15: Adjusted EBITDA and Financial Leverage
$269 $247 $570 $158 $174 $221 $427 $421 Dec 2015 Dec 2016 Sept 2017 ($ Millions) Leverage Ratio1 0.9 0.7 1.4 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 Debt Adjusted EBITDA and Financial Leverage 1
Slide 16: Credit Facility and Notes Offering
($ Millions) Credit Facility and Notes Offering Senior Notes • $600 million unsecured notes • Funded October 20, 2017 • 4.625% interest rate • Matures October 2027 • Guaranteed by existing and future U.S. subsidiaries that are guarantors under the new credit facility • Closing-related fees of ~$8 mi
Slide 17: Capital Structure: Debt
$1,000 9/30/2017 Pro-forma Returns — Capital Structure: Debt DEBT BALANCE RATINGS: • S&P and Fitch BB+ • Moody’s Ba1 • High yield DEBT DENOMINATIONS: • ~ 86% U.S. Dollars • ~ 6% Euros • ~ 3% Mexican Pesos FORECAST WEIGHTED AVERAGE COST OF DEBT3: • 2017: ~4.3% (2.7% after tax) • 2018: ~4.7% (3.0% aft
Slide 18: Capital Expenditures 2015–2017
2015 Actual 2016 Actual 2017 Outlook Capital Expenditures CAPITAL EXPENDITURES 2015 – 2017 CompuSafe® Facility Equipment / Other IT Armored Vehicles D&A $132 $127 ~$135 - $140 Reinvestment Ratio1 0.9 1.1 TBD $124 Total Before CompuSafe® $137 $180 Total Before CompuSafe® CompuSafe® 1. See Non-GAAP re
Slide 19: Adjusted EBITDA and 2018 Preliminary Target
($ Millions, except share price) 11.0%Margin 13.1% Share Price $37.08 $84.25 Adj. EBITDA Note: See detailed reconciliations of non-GAAP to GAAP results included in the Third Quarter 2017 earnings release in the Quarterly Results section of the Brink’s website: www.brinks.com. See Adjusted EBITDA rec
Slide 20: Questions?
Questions?
Slide 21: Appendix
Appendix
Slide 22: Recent Results
Recent Results THIRD-QUARTER AND RECENT HIGHLIGHTS • Strong results driven by organic growth and acquisitions • North America profits up 90% (76% organic) led by Mexico; U.S. & Canada up slightly • Ray Shemanski hired as President of U.S. operations • South America profits up 36% (25% organic) led b
Slide 23: Non-GAAP Guidance as of October 25, 2017
Non-GAAP Guidance as of October 25, 2017 2017 • Revenue $3,180 • Operating Profit $280 - $290 • Adjusted EBITDA $425 - $435 • EPS $3.00 - $3.10 2018 Preliminary Target • Adjusted EBITDA $500 - $525 • More details following year-end 2019 To be updated following year-end ($ Millions, except EPS) 23
Slide 24: Strengthening Our Fleet
Strengthening Our Fleet Transfer Hatch Biometric Access Control Geofence Safety and Security Control Proximity Sensor Trap 360º Monitoring External Camera External Camera 24
Slide 25: Strengthening Our Fleet: New Armored Vehicle Design
Strengthening Our Fleet 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 capital
Slide 26: Network Optimization
Network Optimization PHASE 1: HIGH SPEED MONEY PROCESSING PHASES 2 AND 3: HUB AND SPOKE CONSOLIDATION Phase 1: • Invest in high speed money processing equipment (MP) Phase 1 Results - Chicago: • Note processing capacity doubled with capacity to consolidate additional spoke branches • 25% productivit
Slide 27: CompuSafe and Recycler Services
CompuSafe® and Recycler Services $14M+ Annually OPPORTUNITY • 3.7 million retail establishments1 • An estimated 1.2 to 1.5 million establishments are strong candidates for smart safe or recycler services • Fewer than 150k smart safes are used today2 CUSTOMER BENEFITS • Reduces cash handling • Reduce
Slide 28: 20+ years of diverse senior level experience in guiding multinational organizations through both
20+ years of diverse senior level experience in guiding multinational organizations through both operational turnaround and growth acceleration Prior Experience: President and CEO of Recall Holdings Limited; CEO of IMC Global (now The Mosaic Company); CEO of Culligan Water Technologies; Group Ex
Slide 29: Positive Operating Trends
Positive Operating Trends Q2 2017: CONTINUED MOMENTUMQ1 2017: SIGNIFICANT TRACTION Q3 2017: STRONG GROWTH ($ Millions) ($ Millions) $735 $829 Q3 2016 Q3 2017 Q3 NON-GAAP YoY REVENUE ($ Millions) $689 $740 Q1 2016 Q1 2017 Q1 NON-GAAP YoY REVENUE +7% Organic $717 $760 Q2 2016 Q2 2017 Q2 NON-GAAP YoY R
Slide 30: Proven Sales & Margin Improvement
$287 $306 $342 $407 8.6% 10.3% 11.8% 13.1% 2014 2015 2016 LTM 9/30/17 $3,351 $2,977 $2,908 $3,097 0.6% (11.2%) (2.3%) 7.8% 2014 2015 2016 LTM 9/30/17 +5% Organic +7% Organic Proven Sales & Margin Improvement NON-GAAP REVENUE AND YoY GROWTH ADJUSTED EBITDA & MARGIN ($ Millions) ($ Millions) In mid-20
Slide 31: Historical Financial Summary
Note: For 2014 and 2015 amounts, see detailed reconciliations of Non-GAAP to GAAP results included in the Appendix. For 2016 and 2017 amounts, see Third Quarter 2017 earnings release available in the Quarterly Results section on the Brinks’ website: www.brinks.com. Historical Financial Summary NON-G
Slide 32: Strong and Sustainable Credit Statistics
1.1x 0.9x 0.7x 1.4x FY 2014 FY 2015 FY 2016 LTM 9/30/17 $168 $50 $48 $25 $25 $394 $500 $1,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Strong and Sustainable Credit Statistics NET DEBT / ADJUSTED EBITDA BALANCE SHEET HIGHLIGHTS2 PRO FORMA DEBT MATURITY SCHEDULE1 ($ Millions) • Total de
Slide 33: 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 34: 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
Slide 35: Non-GAAP Results Reconciled to GAAP
Non-GAAP Results Reconciled to GAAP 35 (In millions) Amounts may not add due to rounding. See slide 32 for footnote explanations 2014 2015 Revenues: GAAP $ 3,562.3 $ 3,061.4 Venezuela operations(a) (211.8) (84.5) Non-GAAP $ 3,350.5 $ 2,976.9 Operating profit (loss): GAAP $ 59.4 $ 96.4 Venezuela oper
Slide 36: Non-GAAP Results Reconciled to GAAP (con't)
Non-GAAP Results Reconciled to GAAP (con’t) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2014 2015 Adjusted EBITDA: Income from continuing operations - Non-GAAP $ 53.3 87.1 Interest expense - Non-GAAP 23.3 18.9 Income tax provision - Non-GAAP 48.5 53.6 Depreciation and
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