Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q4 2020 Earnings Presentation
38 slides from Brinks Company (the)'s earnings presentation, Feb 23, 2021
Slide 1: Fourth-Quarter Results
1 Fourth-Quarter Results February 23, 2021 Exhibit 99.2
Slide 2: Forward-looking information
2 These materials contain forward-looking information. Words such as "anticipate," "assume," "estimate," "expect," “target” "project," “model”, "predict," "intend," "plan," "believe," "potential," "may," "should" and similar expressions may identify forward-looking information. Forward-looking infor
Slide 3: Key Messages: 4Q record results and 2021 guidance
3 4Q: Continued revenue recovery, operating leverage and acquisitions drive record results • Revenue up 9%...organic improvement and acquisitions more than offset pandemic headwinds • Operating profit up 26%...margin up 180 bps to 14.2% • U.S. achieves margin rate of 15% • Adjusted EBITDA up 25%...m
Slide 4: Recovery Superior to Industrials, Route-Based & Payments
4 Recovery Superior to Industrials, Route-Based & Payments 2020 Revenue vs. 20191 1. Index financial results represent calendarized quarterly sales, as a percent of 2019, per FactSet; as of 2-19-21 2. FactSet Indices: 3430 Movies/Entertainment (FI3430US); 3440 Hotels/Resorts/Cruise lines (FI3440), e
Slide 5: In-Store Shopping, Where Cash is Preferred, Forecasted to Continue Dominating U.S. Retail
5 In-Store Shopping, Where Cash is Preferred, Forecasted to Continue Dominating U.S. Retail In-person retail sales, where cash is preferred, are expected to reach $5T in 20251 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 2019 2020 2021 2022 2023 2024 2025 eC om m e
Slide 6: Cash Levels Strong, Unvended Retailers Present Opportunity
6 Credit & Debit Vended Credit & Debit Unvended Cash Levels Strong, Unvended Retailers Present Opportunity Brink’s Targeting Underserved Cash Management Market 1. U.S. currency in circulation through 12/31/20. Source: St. Louis Federal Reserve (FRED). Indexed to 4Q19 average Currency in Circulation
Slide 7: 2021 Guidance…Strong Revenue, Margin and Profit Growth
7 $3.46 $3.89 $3.76 2018 2019 2020 2021 $347 $392 $381 2018 2019 2020 2021 See detailed reconciliations of non-GAAP to GAAP results included in the Fourth Quarter 2020 Earnings Release available in the Quarterly Results section of the Brink’s website www.brinks.com. See detailed reconciliations of n
Slide 8: Brink's Sustainability
8 Brink’s Sustainability We understand that our stakeholders are not only focused on what we achieve, but also how we achieve it. To compete and win, we must consider the broader needs of society, ensuring that we treat all stakeholders fairly and with respect while managing our business with integr
Slide 9: Fourth-Quarter 2020: Strong Revenue and Margin Growth
9 $908 $936 $1,022 $1,054 2018 2019 2020 Const. Curr. Revenue +9% Constant currency +13% Organic (7%) Acq +19% FX (3%) Fourth-Quarter 2020: Strong Revenue and Margin Growth (Non-GAAP, $ Millions, except EPS) EPS +39% Constant currency +43% $1.05 $1.18 $1.64 $1.69 2018 2019 2020 Const. Curr. Adj. EBI
Slide 10: Fourth-Quarter Revenue and Operating Profit vs 2019
10 Fourth-Quarter Revenue and Operating Profit vs 2019 % Change (3%)(7%) 19% 9%13% Constant Currency Constant Currency 8.8% Margin 10.1% Margin % Change (3%)8% 21% 26%29% (Non-GAAP, $ Millions) Revenue Operating Profit Notes: Amounts may not add due to rounding. See detailed reconciliations of non-G
Slide 11: Fourth-Quarter Adjusted EBITDA and EPS vs 2019
11 $145 ( $26 ) ( $40 ) $3 $83 $44 $66 $10 ( $8 ) $194 Op Profit Interest Expense Taxes Other Income from Continuing Ops D&A Interest Exp & Taxes Stock Comp Marketable Securities Adj. EBITDA Fourth-Quarter Adjusted EBITDA and EPS vs 2019 Q4 2020 EPS: $1.64 +39% vs PY Q4 2019 EPS: $1.18 (Non-GAAP, $
Slide 12: Operating Leverage: Margin Rate Increasing as Revenue Improves
12 Operating Leverage: Margin Rate Increasing as Revenue Improves 1. Results adjusted to include results for businesses acquired from G4S in 2020 as if they were owned in 2019 Note: See detailed reconciliations of non-GAAP to GAAP results included in the Fourth Quarter 2020 Earnings Release availabl
Slide 13: 2021 Guidance – Organic Growth Drives Operating Profit
13 $381 $475 - $565 $450 - $540 $185 $120 $18 ~$187 ($25)** ~$190 2020 Actual Organic Acq / Disp* 2021 Guidance Constant Currency FX 2021 Guidance Note: Amounts may not add due to rounding. Constant currency represents 2021 guidance at 2020 exchange rates See detailed reconciliations of non-GAAP to
Slide 14: Capital Expenditures
14 $130 $52 $138 $60 $101 $31 $150 $35 $25 $26 $18 $20$155 $165 $119 $170 Capital Expenditures ($ Millions) 2018 Actual 2019 Actual 2020 Actual 2021 Target Cash CapEx excl. Cash Devices Cash Devices Financing Leases Note: Amounts may not add due to rounding.
Slide 15: 2020 Free Cash Flow
15 2020 Free Cash Flow (Non-GAAP, $ Millions) $381 $185 $566 ( $92 ) ( $77 ) ( $78 ) ( $113 ) $206 $161 Adj. EBITDA WC & Cash Restructuring Cash Taxes Cash Interest Cash CapEx Free Cash Flow before Dividends Pro-forma Strong Cash Flow Growth Working Capital and Cash Restructuring • Higher restructur
Slide 16: 2021 Free Cash Flow Target
16 2021 Free Cash Flow Target (Non-GAAP, $ Millions) $450 – $540 $190 $640 – $730 ( $95 ) ( $95 ) ( $105 ) ( $170 ) $175 – $265 $210 – $300 Adj. EBITDA WC, Cash Restructuring & Deferred Payments Cash Taxes Cash Interest Cash CapEx Free Cash Flow before Dividends Pro-forma Growth of ~60% Excluding De
Slide 17: Strong Financial Health - Ample Liquidity & Covenant Headroom
17 $158 ~$206 $600 $1,000 $770 $1,298 $285 $602 12/31/2019 12/31/2020 Senior Notes Term Loan A Revolver $1 B Fin. Leases & Other Cash and Debt Capacity ~$1.6 Billion of Liquidity as of 12/31/2020 Strong Financial Health - Ample Liquidity & Covenant Headroom ($ Millions, except where noted) Cash ~$1.
Slide 18: Net Debt and Leverage
18 $1,349 $896 $860 – $950 $988 $990 12/31/2019 Actual 12/31/2020 Actual 12/31/2021 Estimate Note: See detailed reconciliations of non-GAAP to GAAP results in the Appendix and included in the Fourth Quarter 2020 Earnings Release available in the Quarterly Results section of the Brink’s website www.b
Slide 19: Strategy 2.0 Expand Services & Customer Base
19 Strategy 2.0 Expand Services & Customer Base Strategy 1.5 Acquisitions Strategy 1.0 Wider Deeper + Leverage Core Organic Growth 11.4% Margin 11.0% Margin Components of Strategic Plan 2 (2020 – 2022) 20182017 2019 2020 2021 • Operating leverage – sustained cost reductions with revenue growth • Glo
Slide 20: Strategy 2.0 — Brink's Complete Digital Cash Management Solution
20 Leveraging technology to simplify and modernize cash management Strategy 2.0 — Brink’s Complete Digital Cash Management Solution
Slide 21: Brink's 2.1 and 2.4 Digital Cash Management Solutions
21 Brink’s 2.1 and 2.4 Digital Cash Management Solutions Subscription-Based Solution for Digital Cash Management Tech-enabled device for in-store deposits to reduce labor costs… Next-day credit for accelerated working capital from a single provider… Contactless, non-intrusive service with reduced ca
Slide 22: Proven Performance…Bright Future
22 $3,680 $3,691 $4,100 - $4,500 $392 $381 $450- $540 $175 $185 ~ $190 2019 2020 2021 Guidance 10.6% 10.3% 11.0% - 12.0% Proven Performance…Bright Future Adj. EBITDA Op Profit D&A/Other Op Profit Adj. EBITDA Revenue, Adjusted EBITDA & Operating Profit (Non-GAAP, $ Millions, except EPS) 2021 Guidance
Slide 23: Appendix
Appendix IIBRINKS
Slide 24: Fourth-Quarter Results by Segment
24 Fourth-Quarter Results by Segment ($ Millions) Op Profit +39% +39% Revenue (7%) Constant currency (7%) $352 $329 2019 2020 $33 $46 2019 2020 North America +38% +1% -% Organic (7%) Acq +1% FX -% Op Profit (14%) 3% Revenue (15%) Constant currency: -% $93 $80 2019 2020 Latin America $337 $286 2019 2
Slide 25: 2020 Sequential Results
25 Organic +3% Acq +1% FX +1% $873 $826 $971 $1,022 Q1-20 Q2-20 Q3-20 Q4-20 2020 Sequential Results (Non-GAAP, $ Millions, except EPS) $0.50 $0.73 $0.89 $1.64 Q1-20 Q2-20 Q3-20 Q4-20 $104 $120 $148 $194 Q1-20 Q2-20 Q3-20 Q4-20 11.9% Margin $63 $73 $100 $145 Q1-20 Q2-20 Q3-20 Q4-20 7.2 % Margin 14.5%
Slide 26: Full-Year 2020 Non-GAAP Results
26 $3,438 $3,680 $3,691 $3,924 2018 2019 2020 Const. Curr. Revenue 0% Constant currency +7% Organic (7%) Acq +14% FX (6%) Full-Year 2020 Non-GAAP Results (Non-GAAP, $ Millions, except EPS) EPS (3%) Constant currency +18% $3.46 $3.89 $3.76 $4.60 2018 2019 2020 Const. Curr. Adj. EBITDA 0% Constant cur
Slide 27: Full-Year Revenue and Operating Profit vs 2019
27 Full-Year Revenue and Operating Profit vs 2019 % Change (6%)(7%) 14% 0%7% Constant Currency Constant Currency 8.8% Margin 10.1% Margin % Change (16%)(3%) 16% (3%)13% (Non-GAAP, $ Millions) Revenue Operating Profit Notes: Amounts may not add due to rounding. See detailed reconciliations of non-GAA
Slide 28: Full-Year Adjusted EBITDA and EPS vs 2019
28 $381 ( $95 ) ( $92 ) ( $4 ) $191 $168 $187 $31 ( $11 ) $566 Op Profit Interest Expense Taxes Other Income from Continuing Ops D&A Interest Exp & Taxes Stock Comp Marketable Securities (Gain) / Loss Adjusted EBITDA Full-Year Adjusted EBITDA and EPS vs 2019 2020 EPS: $3.76 (3%) vs PY 2019 EPS: $3.8
Slide 29: Full-Year Results by Segment
29 Full-Year Results by Segment ($ Millions) Op Profit (12%) (12%) Revenue (8%) Constant currency (8%) $1,370 $1,261 2019 2020 $104 $92 2019 2020 North America (13%) +1% -% Organic (9%) Acq +1% FX -% Op Profit (21%) (1%) Revenue (19%) Constant currency: (1%) $297 $234 2019 2020 Latin America $1,320
Slide 30: G4S Closing Timeline
30 G4S Closing Timeline April Closings June Closing • Netherlands • Belgium • Ireland • Hong Kong • Romania • Czech Republic • Cyprus • Malaysia • Dominican Republic February 2020 SPA Sign G4Si March Closing Transaction announced on February 26, 2020 July Closing Enterprise Value $69 $562 $31 $7 $59
Slide 31: 4Q Revenue Recovery to ~92% of Pre-Covid-19 Levels
31 4Q Revenue Recovery to ~92% of Pre-Covid-19 Levels on a Pro Forma Basis Strong Revenue Recovery 0% 25% 50% 75% 100% ~91% 80% 109% 90% Total Reported 1. Results adjusted to include results for businesses acquired from G4S in 2020 as if they were owned in 2019 Note: Revenue performance was calculat
Slide 32: Debt Maturity Profile
32 Debt Maturity Profile $70 $70 $70 $1,089 $400 $600 $1,000 2021 2022 2023 2024 2025 2026 2027 Term Loan A Senior Notes Revolver Maturity Schedule for Credit Facility and Senior Notes Senior Notes ($ Millions)
Slide 33: Estimated Cash Payments for Legacy Liabilities
33 Primary US Pension • Based on actuarial assumptions (as of 12/31/20), no additional cash contributions expected until 2022 • Remeasurement occurs every year-end: disclosed in 10K UMWA • Based on actuarial assumptions (as of 12/31/20), cash payments are not needed until 2029 • Remeasurement occurs
Slide 34: 2018 Non-GAAP Results Reconciled to GAAP (1 of 3)
34 2018 Q4 Full Year Revenues: GAAP $ 907.7 3,488.9 Venezuela operations(a) - (51.4) Non-GAAP $ 907.7 3,437.5 Operating profit (loss): GAAP $ 81.2 274.7 Venezuela operations(a) - (2.3) Reorganization and Restructuring(a) 5.1 20.6 Acquisitions and dispositions(a) 16.8 41.4 Argentina highly inflationa
Slide 35: 2018 Non-GAAP Results Reconciled to GAAP (2 of 3)
35 2018 Q4 Full Year Income (loss) from continuing operations attributable to Brink's: GAAP $ 34.9 (33.3) Retirement plans(c) 6.2 25.3 Venezuela operations(a)(l) 0.3 4.1 Reorganization and Restructuring(a) 3.4 13.9 Acquisitions and dispositions(a) 14.7 33.2 Tax reform(f) (2.1) (2.1) Tax on accelerat
Slide 36: 2018 Non-GAAP Results Reconciled to GAAP (3 of 3)
36 2018 Q4 Full Year Adjusted EBITDA(j): Net income (loss) attributable to Brink's - GAAP $ 34.9 (33.3) Interest expense - GAAP 18.9 66.7 Income tax provision - GAAP 17.0 70.0 Depreciation and amortization - GAAP 42.8 162.3 EBITDA $ 113.6 265.7 Retirement plans(c) 8.2 33.2 Venezuela operations(a)(l)
Slide 37: Non-GAAP Reconciliation – Other
37 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. See below for a summary of the other items not
Slide 38: Non-GAAP Reconciliation – Net Debt
38 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 current