Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q4 2018 Earnings Presentation
34 slides from Brinks Company (the)'s earnings presentation, Feb 6, 2019
Slide 1: Fourth Quarter & Full Year 2018
EXHIBIT 99.2 Fourth Quarter & Full Year 2018 February 6, 2019
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," "believe," "potential," "may," "should" and similar expressions may identify forward-looking i
Slide 3: Highlights (Non-GAAP)
Highlights (Non-GAAP) • Strong growth in revenue, operating profit, EBITDA, EPS and free cash flow • 4Q operating profit up 15% despite negative FX of $27M • 2018 operating profit up 23% despite $70M negative FX; operating margin +130 basis points to 10.1% • Strong 4Q and full-year profit growth in
Slide 4: Fourth-Quarter 2018 Non-GAAP Results
Fourth-Quarter 2018 Non-GAAP Results Strong Organic Growth Overcomes Currency Headwinds (Non-GAAP, $ Millions, except EPS) Revenue +5% Op Profit +15% Adj. EBITDA +13% EPS +11% Constant currency +16% Constant currency +44% Constant currency +35% Constant currency +46% Organic +7% Organic +37% Acq +9%
Slide 5: Full-Year 2018 Non-GAAP Results
Full-Year 2018 Non-GAAP Results Delivering Results Despite FX Pressure (Non-GAAP, $ Millions, except EPS) Revenue +8% Op Profit +23% Adj. EBITDA +20% EPS +14% Constant currency +14% Constant currency +48% Constant currency +37% Constant currency +44% Organic +7% Organic +38% Acq +7% Acq +10% FX (6%)
Slide 6: North America: Continued Momentum in U.S. and Mexico
North America: Continued Momentum in U.S. and Mexico ($ Millions) Revenue +36% Op Profit +64% Fourth Quarter Constant currency +38% Constant currency +67% • Strong revenue and profit growth Organic +7% Organic +49% Acq +31% Acq +18% • Margin 11.3%, up 200 bps FX (2%) FX (3%) • U.S. $439 $50 • Profit
Slide 7: U.S. Turnaround Accelerates
U.S. Turnaround Accelerates ($ Millions) Revenue +54% Op Profit +123% Fourth Quarter • Strong revenue and profit growth Organic +4% Organic +81% • Profits up 123%; up 81% organically Acq +50% Acq +41% FX - FX - • Margin 9.7%, up 300 bps $305 $30 • Margin ex. Dunbar 9.8% $198 9.7% $13 Margin 6.7% Mar
Slide 8: Two-Year Update: U.S. Breakthrough Initiative Goals
Two-Year Update: U.S. Breakthrough Initiative Goals 2019 Margin Improvement Target ~2% ~2-2.5% One-Person One-Person Vehicles Fleet Cost CompuSafe® Unit Purchased Vehicle Labor Orders Savings Savings ~ 1,200 ~ 5,300 Deployed as of 12/31/18: 1,025 ~ 3,500 $17 million ~ 3,300 through 2018 $11 million
Slide 9: South America: Strong Organic Growth Offset by FX Impact
South America: Strong Organic Growth Offset by FX Impact ($ Millions) Revenue (17%) Op Profit (15%) Fourth Quarter Constant currency +13% Constant currency +29% • Organic revenue and operating profit growth Organic +13% Organic +29% throughout most of region Acq - Acq - FX (30%) FX (44%) • Underlyin
Slide 10: Rest Of World: France Turnaround Underway
Rest Of World: France Turnaround Underway ($ Millions) Revenue (10%) Op Profit 2% Fourth Quarter Constant currency (6%) Constant currency +6% • Revenue up 2% excluding French guarding sale Organic - Organic +3% and FX Acq +2% Acq +1% Disp (9%) Disp +2% • France up 1% excluding guarding sale FX (3%)
Slide 11: Three-Year Strategic Plan - Strategy 1.0 + 1.5
Three-Year Strategic Plan - Strategy 1.0 + 1.5 Organic Growth + Acquisitions 2019 Adjusted EBITDA Target $600 Million – 3-yr CAGR ~21%* Strategy 1.5 Acquisitions • Focus on “core-core” & “core-adjacent” Adj. EBITDA $120 • Capture synergies & improve density13.3% Op Profit $105 • 10 Acquisitions clos
Slide 12: Strategy 1.5 – Core Acquisitions
Strategy 1.5 – Core Acquisitions Synergistic, Accretive Acquisitions in Our Core Markets Core Acquisitions-to-Date • 2017: 6 completed France • 2018: 3 completed - Dunbar (U.S.), U.S. (Temis) Colombia (minority partner buyout) and (AATI) U.S. (Dunbar) WorldBridge (Cambodia) Brazil • 2019: Rodoban co
Slide 13: Strategy 2.0 – Total Cash Ecosystem
Strategy 2.0 – Total Cash Ecosystem Further Expansion into Cash-Related, High-Value Services Strategy 2.0 • Expand high-margin, high-value, cost-effective service offerings: Expand Services o Add new unvended and underserved customers with attractively13.3% -priced, high-value services Margin & Cust
Slide 14: 2019 Guidance
2019 Guidance 20% Op Profit Growth (+100 bps) Including $20-$30 Million OpEx Investment (Non-GAAP) Revenue +9% Op Profit +20% Adj. EBITDA EPS Constant currency +15% Constant currency +37% Constant currency +30% Constant currency +44% Organic +6% Organic +27% +17% +21% Acq/Disp +8% Acq/Disp +10% FX (
Slide 15: Strategic Plan 2017 – 2019 Operating Profit
Strategic Plan 2017 – 2019 Operating Profit (Non-GAAP, $ Millions) OP 7.4% ~11% Margin $475 -$495 ~ $105 $405 -$425 ~ $105 1.5 ~ $380 $325 Acquisitions 2019 Target March 2017 ~ $310 $216 Investor Day = Organic 1.0 + 2.0 Operating = Closed Acquisitions Investment Profit = Share-based Comp 2016 North
Slide 16: Financial Update
Financial Update
Slide 17: Full-Year Revenue and Operating Profit vs 2017
Full-Year Revenue and Operating Profit vs 2017 (Non-GAAP, $ Millions) Revenue Op Profit % Change 7% 7% 14% (6%) 8% % Change 38% 10% 48% (25%) 23% Constant Constant Currency Currency $213 $3,630 ( $192 ) $28 $417 ( $70 ) $3,438 $223 $107 $3,193 $347 $281 10.1% Margin 8.8% Margin 2017 Organic Acq / Di
Slide 18: Full-Year Adjusted EBITDA & EPS vs 2017
Full-Year Adjusted EBITDA & EPS vs 2017 (Non-GAAP, $ Millions, except EPS) 2018 EPS: $3.46 (+14% vs PY) Adj. EBITDA 2017 EPS: $3.03 +20% vs PY $28 $512 $162 $347 ( $64 ) $142 ( $97 ) ( $7 ) $179 Op Profit Net Interest Taxes Non-controlling Income from D&A Interest Exp Other Adjusted Interest Continu
Slide 19: 2019 Guidance - Operating Profit and Adjusted EBITDA
2019 Guidance - Operating Profit and Adjusted EBITDA (Non-GAAP, $ Millions) OP % Change vs. 2018 ~27% ~10% ~37% (~17%) ~20% $655 - $675 $590 - $610** Adjusted ~ $190 EBITDA $512 ~ $185 $33 ( $60 ) $165 $95 D&A/Other $465 - $485 $405 - $425 $347 Operating Profit 10.1% ~11% Margin Margin 2018 Actual O
Slide 20: Free Cash Flow
Free Cash Flow (incl. completed acquisitions) (Non-GAAP, $ Millions) Adjusted EBITDA $600 Working Capital: Revenue growth offset by DSO, DPO improvement $45 Cash Restructuring: Acquisitions (Dunbar, Rodoban, Temis) $512 $65 Cash Taxes: Higher income offset by lower ETR, FTCs and refund timing $36 $4
Slide 21: Credit Facility and Debt Structure
Credit Facility and Debt Structure Debt Balance Pending Credit Facility Amendment* ~$2.5 B • Term Loan A to be increased from $467 million to $800 million ~$2.2 B Available Committed Available Capacity of • Secured revolving credit facility Committed ~$1.0B consistent at $1.0 billion Capacity of ~$0
Slide 22: Net Debt and Leverage
Net Debt and Leverage (Non-GAAP, $ Millions) Net Debt Adjusted EBITDA and Financial Leverage Significant capacity for acquisitions Leverage Ratio1 1.4 ~1.3 2.4 ~2.0 ~2.0 Adjusted ~ $1,300 EBITDA + ~$480 ~$595 ~$645 Synergized $1,214 Acquisitions $612 ~ $600 $512 $512 $425 $425 Dec 2017 Dec 2018 Pro-
Slide 23: Continued Improvement Expected in 2019
Continued Improvement Expected in 2019 (Non-GAAP, $ Millions, except EPS) Operating Profit & Adj. EBITDA 2019 Guidance 6% Revenue $3.75B ~16% (organic growth) 14.9% $405 - $425 Op Profit +20% 13.3% ~11% margin $590 - $610 Adj. EBITDA +17% Adj. EBITDA 11.8% ~16% margin Margin ~11% 10.1% EPS $4.10 - $
Slide 24: Appendix
Appendix
Slide 25: Argentina Revenue 2013-2018 by Quarter
Argentina Revenue 2013-2018 by Quarter (excludes Maco) 10% (2%) Devaluation (12%) (8%) (19%) (27%) (30%) USD Revenue 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Devaluation Recovery • Local currency growth has exceeded infla
Slide 26: CapEx Expected to Return to ~4.5% of Revenue in 2020
CapEx Expected to Return to ~4.5% of Revenue in 2020 (Non-GAAP, $ Millions) Capital expenditures 2015-20201 Higher 2017-19 CapEx reflects investment in strategic initiatives ~$220 High Return Growth $185 $182 CapEx High High Return Return Growth Growth CapEx CapEx ~4.5% of Revenue $124 $106 Facility
Slide 27: Non-GAAP Income Tax Rates
Non-GAAP Income Tax Rates 2018 Dunbar Acquisition Statutory Tax Rate1 • U.S. had no statutory income • Increase U.S. statutory Argentina 30% in prior years income Brazil 34% - Paid no U.S. Federal tax - No Foreign Tax Credit • Utilize FTCs Chile 27% (FTC) utilization Colombia 37% • Utilize component
Slide 28: 2016 Non-GAAP Results Reconciled to GAAP (1 of 3)
2016 Non-GAAP Results Reconciled to GAAP (1 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2016 Q1 Q2 Q3 Q4 Full Year Revenues: GAAP $ 721.8 739.5 755.8 803.5 3,020.6 Venezuela operations(a) (32.1) (21.5) (20.4) (35.4) (109.4) Acquisitions and dispositions(a) (0.8)
Slide 29: 2016 Non-GAAP Results Reconciled to GAAP (2 of 3)
2016 Non-GAAP Results Reconciled to GAAP (2 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2016 Q1 Q2 Q3 Q4 Full Year Income (loss) from continuing operations attributable to Brink's: GAAP $ (3.1) 0.3 24.5 14.5 36.2 Retirement plans(c) 4.7 5.2 5.0 5.3 20.2 Venezuel
Slide 30: 2016 Non-GAAP Results Reconciled to GAAP (3 of 3)
2016 Non-GAAP Results Reconciled to GAAP (3 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2016 Q1 Q2 Q3 Q4 Full Year Adjusted EBITDA(e): Net income (loss) attributable to Brink's - GAAP $ (3.1) 0.3 24.5 12.8 34.5 Interest expense - GAAP 4.9 4.9 5.1 5.5 20.4 Income
Slide 31: Non-GAAP Reconciliation - Other
Non-GAAP Reconciliation - Other The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited) (In millions) Brink’s measures its segment results before income and expenses for corporate activities and for certain other items. A summary of the other items not allocated to seg
Slide 32: 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 Full Year Full Year Full Year 2015 2016 2017 2018 Capital e
Slide 33: Non-GAAP Reconciliation – Cash Flows
Non-GAAP Reconciliation – Cash Flows The Brink’s Company and subsidiaries (In millions) Full Year Full Year 2017 2018 Cash flows from operating activities Operating activities - GAAP $ 296.4 $ 364.1 Venezuela operations (17.3) (0.4) (Increase) decrease in restricted cash held for customers (44.3) (4
Slide 34: 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, (In millions) 2017 2018 Debt: Short-term borrowings $ 45.2 $ 28.9 Long-term debt 1,191.5 1,525.1 Total Debt 1,236.7 1,554.0 Restricted cash