Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Investor Presentation (June 2020)
45 slides from Brinks Company (the)'s investor presentation, Jun 2, 2020
Slide 1: Investor Presentation June 2020
Exhibit 99.1 Investor Presentation June 2020 NYSE: BCO 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," "predict," "intend," "plan," These materials contain forward-looking information. Words such as "anticipate," "assume," "es
Slide 3: Key Messages
Key Messages • 3 priorities during the crisis: PRIORITY 1 Protect employees and service customers PRIORITY 2 Preserve cash and optimize profitability PRIORITY 3 Position Brink’s to be stronger than ever on the other side of the crisis • G4S acquisition ~75% complete, expect $20 million of synergies
Slide 4: World's Largest Cash Management Company
World’s Largest Cash Management Company Brink’s includes full-year 2019 pro forma data for G4S acquisition Global Market Leader 1 1 1 2020 Global cash market ~$20 billion1,2 Revenue Countries Regions NA,SA,EMEA, Asia Brink’s + G4S $4.5B 53 Pacific G4S Loomis $2.2B 20 EMEA, NA, SA Other Loomis SA, EM
Slide 5: G4S Acquisition: An Excellent Strategic Fit
G4S Acquisition: An Excellent Strategic Fit Transaction Details Highlights • $835m purchase price • Expands Brink’s global cash management footprint: • Pro Forma financials1 • $800m revenue • 14 new markets; 17 in total • $85m operating profit • Broadens platform to execute: • $115m adjusted EBITDA
Slide 6: A Strong Platform for Accelerated Growth
A Strong Platform for Accelerated Growth1 Lithuania Latvia Estonia Netherlands Belgium Czech Republic Ireland Romania Luxembourg Hong Kong Kuwait Cyprus Macau Dominican Republic Philippines Indonesia 3 Malaysia Brink’s Cash Operations G4S Cash Operations Accelerated Growth Expected from Strategy 1.0
Slide 7: Strong Financial Health - Ample Liquidity
PRIORITY 2 Strong Financial Health - Ample Liquidity ($ Millions, except where noted) Cash and Debt Capacity $300 • ~$800 million liquidity expected ~$3.1 B ~$0.8 B Liquidity after G4S Acquisition • ~$500 million Revolver plus ~$300 Cash $285 $258 million cash ~$2.5 B ~$2.5 B • Incremental $590 mill
Slide 8: Maximize Cash Flow
PRIORITY 2 Maximize Cash Flow Includes G4S Acquisition1 (Non-GAAP, $ Millions) $564 $564 Adjusted EBITDA Cash From Operating Activities Working Capital and Cash Restructuring Q2 – Q4 • DSO risk ... negotiating with vendors $334 Op Profit • Cash restructuring related to G4S acquisition $392 Op Profit
Slide 9: Protecting Profitability and Free Cash Flow
PRIORITY 2 Protecting Profitability and Free Cash Flow 2019 Global Cost Structure 2020 Actions (Percent of Total Costs) Direct, Indirect & SG&A Labor • Headcount reductions … severance and furloughs • Negotiated with unions and works councils • Government programs offsetting some payroll costs • Ove
Slide 10: United States COVID-19 Volume Impact and Actions
PRIORITY 2 United States COVID-19 Volume Impact and Actions Volume & Revenue Impact Revenue • Service volume reductions began in mid-March … April expected to be low point • Q3 & Q4 improvement expected with economies re-opening • Retailers more impacted than Financial Institutions 100% • 44% of ret
Slide 11: A Strong Global Customer Base
A Strong Global Customer Base Percent of Revenue1 Brink’s Consolidated U.S. Mexico Brazil Argentina France = Financial Institutions = Retail = Gov’t / Other | 11 1. Brink’s Internal Analysis
Slide 12: U.S. Retail Driven by Large, Essential Customers & CompuSafe
U.S. Retail Driven by Large, Essential Customers & CompuSafe® 44% Essential Services Multi-location Customers Strong Recurring Revenue Temporarily Essential <20 CompuSafe closed Services ~30% 100+ Limited Operations 20-99 CIT Retail Revenue1 Retail Revenue by Retail Revenue1 customer size (locations
Slide 13: Cash in Circulation Continues to Grow
Cash in Circulation Continues to Grow Cash Availability Continues to Grow Number and value of notes in circulation consistently grows faster than GDP • 2009 – 2018 CAGR Value of Notes: USD ~7%, Euro ~5% • 2009 – 2018 CAGR Number of Notes: USD ~5%, Euro ~6% USD – notes in circulation1 Euro – notes in
Slide 14: Cash is Most Preferred Payment – 75% of Global Transactions
Cash is Most Preferred Payment – 75% of Global Transactions Drivers of Cash Usage Strong Cash Usage in our Largest Markets • Unbanked or underbanked rely on cash as a primary payment method • 25% of U.S. Households are unbanked / underbanked1 • All demographics use cash – all ages and income • Cash
Slide 15: During a Recession, Cash Usage Grows
During a Recession, Cash Usage Grows Cash usage grew significantly in the last Drivers of Cash Usage recession in a Recession Cash as a % of Total Payments - U.S. • Cash usage in 2008-2009 grew significantly with 31% government stimulus and constrained consumer 29% credit 27% • Unbanked and underban
Slide 16: Cash is Safe and Vital to the Economy
Cash is Safe and Vital to the Economy Cash has Lower Germ Index COVID-19 Virus Survival Time NYC (in hours)1 Fast Food 664 Door Handle NYC 70 Park Bench 503 60 Average Germ-Score 285 50 for Credit Cards NYC 40 Train Station 163 Bathroom 30 Average Germ-Score 160 for Cash Average 20 Average Cash Germ
Slide 17: Strategic Plan 1: Strategy 1.0 + 1.5 (2017-2019)
Strategic Plan 1: Strategy 1.0 + 1.5 (2017-2019) Organic Growth + Acquisitions 2019 Adjusted EBITDA $564 Million – 3-yr CAGR ~18% Strategy 1.5 Acquisition Growth • Focus on “core-core” & “core-adjacent” Adj. EBITDA +$115 13.3% Op Profit +$100 • Capture synergies & improve densityMargin Adj. EBITDA +
Slide 18: Strategic Plan (SP1) Targets Exceeded
Strategic Plan 1 (SP1) Targets Exceeded Substantial Value Created for Shareholders (Non-GAAP, $ Millions, except EPS) Revenue +27% Op Profit +81% Adj. EBITDA +65% EPS +71% CAGR +8% CAGR +22% CAGR +18% CAGR +19% Avg. Organic Growth +7% $3,680 $564 $392 $3,275 $3.89 $475 $2,908 $325 $3.50 $342 $216 $2
Slide 19: SP2: Further Expansion into the Total Cash Ecosystem (2020 – 2022)
SP2: Further Expansion into the Total Cash Ecosystem (2020 – 2022) 1.0 WD +1.5 +2.0 = Accelerated Value Creation Expand high-margin, high-value, cost-effective offerings: Strategy 2.0 • Add new unvended and underserved customers Expand Services with attractively-priced, high-value services & Custome
Slide 20: Large U.S. Retail Opportunity for Brink's
Large U.S. Retail Opportunity for Brink’s Pre- and Post-COVID-19 Large in-person retail market with one-third of purchases in cash 2019 Total U.S. Cash accounts for 32% Retail Market $5.5T1 of in-person purchases2 Check 89% of 2% Purchases Credit In-Person at 28% Point-of-Sale E-Commerce Cash 11% 32
Slide 21: Opportunity: 90% of U.S. Retail Locations Not Served
Opportunity: 90% of U.S. Retail Locations Not Served by Cash Management Industry in 2019 ~90% Unvended ~10% Vended BCO 3.8M Retail Brink’s initial Strategy 2.0 Locations1 targets include select enterprise companies with >500 locations Credit / Debit2 Unvended Market Landscape (Estimated) ~3% • 90% o
Slide 22: Seizing the Unvended Opportunity with Strategy 2.0
PRIORITY 3 Seizing the Unvended Opportunity with Strategy 2.0 Brink’s Complete disrupts cash management’s one-size-fits-all paradigm with flexible, tech-enabled solutions for a wider range of customers. Introducing Brink’s Complete A Strategy 2.0 Offering • Subscription-based cash management service
Slide 23: Brink's Complete: The Right Service at the Right Time
PRIORITY 3 Brink’s Complete The Right Service at the Right Time Brink’s Complete Value Proposition Simplified, cost-effective cash management Customer Benefits • Next-day credit • Target cost <1% of cash payments • Eliminates trips to the bank • Bank agnostic • Hassle-free onboarding, use and billin
Slide 24: Summary
Summary 2020 – Managing through the Crisis • Expect low point in 2Q, positive operating profit • Expect improvement in 3Q and 4Q with aggressive cost actions and gradual economy re-openings • Ample liquidity • Targeting positive free cash flow for the year 2021 and Beyond: Focus on Priority 3 • Emer
Slide 25: The world counts on Brink's
The world counts on Brink’s. A Brink’s truck alone on the streets of Paris. We are grateful to our employees who continue to provide essential services to customers around the world during the COVID-19 pandemic.
Slide 26: Appendix
Appendix (BRINKS
Slide 27: Our Priorities
Our Priorities PRIORITY 1 Our people and customers • Our highest priority is the health and safety of our employees, their families and our customers. • Provide “essential services” to our customers. PRIORITY 2 Preserve cash and optimize profitability • Take decisive and timely actions to preserve c
Slide 28: Recurring Revenue from Large U.S. Financial Institutions
Recurring Revenue from Large U.S. Financial Institutions (FI) 66% of U.S. FI Revenue from Customers with 50+ Locations1 <10 • Top 25 Tier 1 banks comprise ~50% of FI revenue 52% • Recurring revenue and 10-49 18% long-term contracts 18% • Stable recurring revenue during the crisis • Outsourcing oppor
Slide 29: CapEx – Target 40-60% Cash Reduction
CapEx – Target 40-60% Cash Reduction PRIORITY 2 Cash Capital Expenditures 2018-2020 ($ Millions) Targeting ~40-60% reduction in cash CapEx. $165 $165 Cash CapEx Remaining CapEx $155 primarily for safety and $26 $25 Cash Devices security. $25 ~$100 G4S ~$20 Acquisition Cash CapEx excl. Cash $138 $140
Slide 30: Non-GAAP Income Tax
Non-GAAP Income Tax Tax Rate 49.8% • Excludes impact of post Q1 G4S acquisitions • U.S. taxable income limitation • Inability to credit any taxes on cross border payments, plus 34.2% 34.2% 31.4% 32.0% • U.S. tax net operating loss with no tax benefit because of U.S. taxation of global earnings • U.S
Slide 31: Net Debt and Leverage
Net Debt and Leverage (Non-GAAP, $ Millions) Net Debt Adjusted EBITDA and Financial Leverage Leverage Ratio1 1.4 2.4 2.4 3.0 ~$2,342 Fully-Synergized G4S Acquisition ~3.5 Pro-forma Leverage Remaining G4S Adjusted EBITDA acquisition Bank defined EBITDA includes TTM EBITDA, plus projected 18 month syn
Slide 32: Debt Maturity Profile
Debt Maturity Profile ($ Millions) Maturity Schedule for Credit Facility and Senior Notes $1,000 Revolver Senior Notes $1,089 Term Loan A1 $600 $62 $70 $70 $70 2020 2021 2022 2023 2024 2025 2026 2027 1. Pro forma for April 1, 2020 $590M Term Loan A addition 32
Slide 33: Legacy Liabilities – Underfunding
Legacy Liabilities – Underfunding ($ Millions) Frozen Primary U.S. Pension UMWA Assets $ 721 729 777 687 699 Assets $ 227 217 219 182 178 Obligations $ (835) (837) (879) (794) (817) Obligations $ (433) (444) (513) (479) (425) Primary U.S. Pension UMWA 2015 2016 2017 2018 2019 2015 2016 2017 2018 201
Slide 34: Estimated Cash Payments for Legacy Liabilities
Estimated Cash Payments for Legacy Liabilities ($ Millions) Payments to Primary U.S. Pension Payments to UMWA $310 $14 $18 $16 $25 $24 $10 $2 $0 $16 2019 2020 2021 2022 2023 2024 2025 2026 2019 2028 2029 2030 After 2030 Primary US Pension • Based on actuarial assumptions (as of 12/31/19), no additio
Slide 35: International Pension Plans
International Pension Plans ($ Millions) Underfunding Estimated Future Benefit Payments from Plan Assets Assets $ 165 173 203 180 215 $15 Obligations $ (263) (267) (302) (264) (318) $14 $13 $12 $12 2015 2016 2017 2018 2019 ($84) ($94) ($98) ($99) ($103) 2020 2021 2022 2023 2024 | Note: 2019 amounts
Slide 36: 2016-2017 Non-GAAP Results Reconciled to GAAP (1 of 3)
2016-2017 Non-GAAP Results Reconciled to GAAP (1 of 3) The Brink’s Company and subsidiaries ($ Millions) Non-GAAP Reconciliations (In millions) 2016 2017 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Revenues: GAAP $ 721.8 739.5 755.8 803.5 3,020.6 $ 788.4 805.9 849.5 903.2 3,347.0 Venezuela operation
Slide 37: 2016-2017 Non-GAAP Results Reconciled to GAAP (2 of 3)
2016-2017 Non-GAAP Results Reconciled to GAAP (2 of 3) The Brink’s Company and subsidiaries ($ Millions) Non-GAAP Reconciliations 2016 2017 Full Full Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Income (loss) from continuing operations attributable to Brink's: GAAP $ (3.1) 0.3 24.5 14.5 36.2 $ 34.7 14.3 19.9 (
Slide 38: 2016-2017 Non-GAAP Results Reconciled to GAAP (3 of 3)
2016-2017 Non-GAAP Results Reconciled to GAAP (3 of 3) The Brink’s Company and subsidiaries ($ Millions) Non-GAAP Reconciliations 2016 2017 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Adjusted EBITDA(j): Net income (loss) attributable to Brink's - GAAP $ (3.1) 0.3 24.5 12.8 34.5 $ 34.7 14.2 19.9 (52
Slide 39: 2018- Q1 2020 Non-GAAP Results Reconciled to GAAP (1 of 3)
2018- Q1 2020 Non-GAAP Results Reconciled to GAAP (1 of 3) The Brink’s Company and subsidiaries ($ Millions) Non-GAAP Reconciliations 2018 2019 2020 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Revenues: GAAP $ 879.1 849.7 852.4 907.7 3,488.9 $ 905.0 914.0 928.4 935.8 3,683.2 $ 872.8 Venezuela ope
Slide 40: 2018- Q1-2020 Non-GAAP Results Reconciled to GAAP (2 of 3)
2018- Q1-2020 Non-GAAP Results Reconciled to GAAP (2 of 3) The Brink’s Company and subsidiaries ($ Millions) Non-GAAP Reconciliations 2018 2019 2020 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Income (loss) from continuing operations attributable to Brink's: GAAP $ 22.1 107.8) 17.5 34.9 (33.3) $
Slide 41: 2018- Q1-2020 Non-GAAP Results Reconciled to GAAP (3 of 3)
2018- Q1-2020 Non-GAAP Results Reconciled to GAAP (3 of 3) The Brink’s Company and subsidiaries ($ Millions) 2018 2019 2020 Non-GAAP Reconciliations Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Interest and other income (expense): GAAP $ (13.1) (8.1) (8.1) (9.5) (38.8) $ (11.2) (3.1) (7.8) (30.6)
Slide 42: Non-GAAP Reconciliation – Other (1 of 2)
Non-GAAP Reconciliation – Other (1 of 2) The Brink’s Company and subsidiaries ($ Millions) Other Items Not Allocated to Segments (Unaudited) 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 item
Slide 43: Non-GAAP Reconciliation – Other (2 of 2)
Non-GAAP Reconciliation – Other (2 of 2) The Brink’s Company and subsidiaries ($ Millions) Other Items Not Allocated to Segments (Unaudited) Argentina highly inflationary impact Beginning in the third quarter of 2018, we designated Argentina's economy as highly inflationary for accounting purposes.
Slide 44: Non-GAAP Reconciliation – Cash Flows
Non-GAAP Reconciliation – Cash Flows The Brink’s Company and subsidiaries (In millions) Full Year 2019 Cash flows from operating activities Operating activities - GAAP $ 368.6 Increase in restricted cash held for customers (23.7) Increase in certain customer obligations(a) (11.4) Operating activitie
Slide 45: 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, December 31, March 31, (In millions) 2017 2018 2019 2020 Debt: Short-term borrowings $ 45.2 $ 28.9 $ 14.3 $ 14.1 Long-term debt 1,191.5 1,52