Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Investor Presentation (December 2018)
40 slides from Brinks Company (the)'s investor presentation, Dec 7, 2018
Slide 1: Investor Presentation December 2018
Exhibit 99.1 Investor Presentation December 2018 NYSE: BCO
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: World's Largest Cash Management Company
World’s Largest Cash Management Company1 As of 12/31/2017 (pro-forma to include Dunbar) Global Market Leader Revenue Countries Regions Global cash market $16.5 billion2 SA, NA, EMEA, Asia Brink’s1,3 $3.6B 117 Pacific SA, EMEA, Asia, Prosegur $2.1B 15 Other Australia Loomis Loomis $2.0B 20 EMEA, NA G
Slide 4: Lines of Business and Customers
Lines of Business and Customers1 68% of Segment Revenue Outside of U.S. 2017 Pro Forma Revenue by Line of Business Customers Guarding $0.2B France Guarding (6%) Sale Financial High-Value Retail Institutions Services $3.6B $1.4B Core (39%) Services $2.0B (55%) Government/ Other High-Value Services Co
Slide 5: Strong Position in Largest Markets
Strong Position in Largest Markets Estimated Market Share in Key Countries United States Canada Mexico Other Brink’s Other Dunbar Garda Garda GSI Loomis Other Argentina Brazil France Brink’s Brink’s Brink’s Other Other Rodoban Temis Maco Other Prosegur Loomis Prosegur Prosegur 5 Note: Internal estim
Slide 6: Cash is the World's Most Popular Form of Payment
Cash is the World’s Most Popular Form of Payment Cash Accounts for ~85% of Global Consumer Transactions 1 United States2 Estimated Cash Usage in Our Largest Markets • Most frequently used payment method • Notes in circulation growing ~5% 31% annually • Cash use strong across all income levels 68% So
Slide 7: Our Strategy
Our Strategy Introduce Accelerate Differentiated Profitable Growth Services • Grow high-value services • Leverage uniform, best-in- • Grow account share class global technology base Introduce Accelerate with large FI customers for logistics and operating Differentiated Profitable systems Services Gr
Slide 8: 2018 Non-GAAP Guidance
2018 Non-GAAP Guidance (as of 10/24/2018) (Non-GAAP, $ Millions, except EPS) Revenue +8% Op Profit +24% Adj. EBITDA +20% EPS +9% Constant currency +14% Constant currency +51% Constant currency +38% Constant currency +39% Organic +7% Acq/Disp +7% FX (6%) ~$3,450 $3.20 - $3.40 $500 - $520 $3,193 $3.03
Slide 9: 2018 Guidance vs 2017
2018 Guidance vs 2017 (as of 10/24/2018) (Non-GAAP, $ Millions) OP % Change vs. 2017 42% 9% 51% (26%) 24% $576 - $596 $162 $500 - $520** $160 Adjusted $425 $25 ( $74 ) EBITDA $108 - $128 D&A/Other $144 $414 - $434 $340 - $360 Operating $281 Profit 8.8% ~10.1% Margin Margin 2017 Actual Organic Acq /
Slide 10: Preliminary 2019 Guidance
Preliminary 2019 Guidance (as of 10/24/2018) (Non-GAAP, $ Millions, except EPS) Revenue Op Profit Adj. EBITDA EPS Organic +7% +26% +22% +29% Acq/Disp +8% FX (5%) $610- ~$3,800 $430- $630 $4.15- $450 $4.35 ~$3,450 $3,193 $500- $340- $520 ~16.3%15.8% - $360 $3.20- $2,908 Margin16.3% $3.40 Margin 11.2%
Slide 11: Preliminary 2019 Guidance vs 2018
Preliminary 2019 Guidance vs 2018 (as of 10/24/2018) (Non-GAAP, $ Millions) OP % Change vs. 2018 ~30% ~10% ~40% (~14%) ~26% $665 - $685 $610 - $630** ~ $185 ~ $180 $500 - $520 $35 ( $50 ) $105 Adjusted ~ $160 $480 - $500 EBITDA D&A/Other $430 - $450 $340 - $360 Operating Profit ~10.1% ~11.6% Margin
Slide 12: Three-Year Strategic Plan – Strategy 1.0 + 1.5
Three-Year Strategic Plan – Strategy 1.0 + 1.5 (as of 10/24/2018) Organic Growth + Acquisitions 2019 Adjusted EBITDA Target $620 Million – 3-yr CAGR ~22%* Strategy 1.5 • Focus on “core-core” & “core-adjacent” Acquisitions 13.3% • Capture synergies & improveMargin density 2019 EBITDA Target: $130 • ~
Slide 13: Strategy 1.5 – Core Acquisitions
Strategy 1.5 – Core Acquisitions Synergistic, Accretive Acquisitions in Our Core Markets Acquisitions-to-Date • “Core/ Core” – Core businesses in core markets • 6 completed in 2017 France U.S. (Temis) (AATI) • 3 acquisitions in 2018 U.S. –Dunbar in U.S. closed in August (Dunbar) –Rodoban in Brazil e
Slide 14: Argentina Revenue & OP 2013-2018 by Quarter
Argentina Revenue & OP 2013-2018 by Qtr. (excl. Maco) 15% mid-cycle wage increase underway; expect retroactive corresponding price increase Devaluation (2%) (12%) (8%) (19%) (30%) (27%) (30%) USD Revenue 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4
Slide 15: Non-GAAP Income Tax Evolution
Non-GAAP Income Tax Evolution (as of 10/24/2018) 2018 Outlook Dunbar Acquisition Statutory Tax Rate1 • U.S. had no statutory • Increases U.S. statutory Argentina2 35% income for years income Brazil 34% - Paid no U.S. Federal tax • Utilizes FTCs Chile 27% - No Foreign Tax Credit (FTC) utilization Col
Slide 16: Free Cash Flow
Free Cash Flow (as of 10/24/2018) Free cash flow includes completed & announced acquisitions (Non-GAAP, $ Millions) Actual Target Target 2017 2018 2019 Adjusted EBITDA $425 ~$510 ~$620 Guidance Working Capital & Other (86) ~(15) ~(45) DSO and DPO improvement, restructuring Cash Taxes (84) ~(75) ~(75
Slide 17: Net Debt and Leverage
Net Debt and Leverage (as of 10/24/2018) Assumes $800 in acquisitions through 20191 (Non-GAAP, $ Millions) Net Debt Adjusted EBITDA and Financial Leverage Significant capacity for acquisitions Leverage Ratio per financial covenants2 0.7 1.4 ~1.3 ~2.1 ~1.7 ~ $1,200 Bank defined EBITDA ~$465 ~$565 ~$6
Slide 18: Comparison to Industrial Services/Route-Based Peers
Comparison to Industrial Services/Route-Based Peers1 Peers Brink’s Specialized fleet Focus on route density and optimization Strong recurring revenue High customer retention Ability to leverage physical infrastructure Accretive/high-synergy M&A Technology-enhanced logistics
Slide 19: Compared to Industrial Services/Route-Based Peers
Compared to Industrial Services/Route-Based Peers…1 We’re growing faster 22% CAGR is ahead of peers and we’re closing the gap Organic Revenue Growth Adj. EBITDA Margin Brink’s Peer Avg. Brink’s Peer Avg. 24% ~24% ~7% ~7% ~7% ~16% 12% ~4% 2018 2019 16-19 Avg '16-'18E 2016 2019 2016 2019 Total Guidanc
Slide 20: Continued Improvement Expected in 2018 and 2019
Continued Improvement Expected in 2018 and 2019 (as of 10/24/2018) (Non-GAAP, $ Millions, except EPS) Operating Profit & Adj. EBITDA 2018 Non-GAAP Guidance1 7% Revenue $3.45B ~16.3% (organic growth) ~14.8% $340 - $360 Op Profit +24% ~10.1% margin 13.3% $500 - $520 Adj. EBITDA +20% Adj. EBITDA 11.8%
Slide 21: Questions?
Questions? Brink’s Investor Relations 804-289-9709
Slide 22: Appendix
Appendix BRINKS
Slide 23: 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 ~$230 ~$200 High Return High Growth $185 $185 Return CapEx Growth High CapEx Return Growth CapEx $124 ~4.5% of Revenue $106
Slide 24: Financing Capacity to Execute the Strategy
Financing Capacity to Execute the Strategy Credit Facility & Senior Notes Five-Year Credit Facility Ten-Year Senior Notes Revolver Term Loan A • $1.0 billion secured • $500 million secured • $600 million revolving credit Term Loan A unsecured notes facility • Interest floats based • 4.625% interest
Slide 25: Strong and Sustainable Credit Statistics
Strong and Sustainable Credit Statistics (Non-GAAP, $ Millions) Pro Forma Maturity Schedule for Credit Facility and Senior Notes Revolver $1,000 Senior Notes $600 $394 $6 $25 $25 $25 $25 Term Loan A 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Legacy Liabilities: No Cash Outflow Expected U
Slide 26: Frozen Primary U.S. Pension Plan Funded Status
Frozen Primary U.S. Pension Plan Funded Status (%) Sensitivity Analysis as of 12/31/2017 Change in Discount Rate -2.0% -1.0% 0.0% +1.0% +2.0% (1) 1.7% 2.7% 3.7% 4.7% 5.7% Return Return +20% 88 93 97 102 106 +10% 84 89 93 97 100 0% 81 85 88 92 95 -10% 77 81 84 87 89 “Return Enhancement” Annual “Retur
Slide 27: Industrial Services/Route-Based Peer Comparisons
1 Industrial Services/Route-Based Peer Comparisons Business Overview 2019E Financial Metrics Growth Valuation 3-Year Adj. Adj. EBITDA Capex EBITDA Company Description OP Margin Margin (% of Rev) CAGR EV / Adj. EBITDA Cash 2 The Brink's Company (BCO) Management ~12% ~16% ~5% ~22% ~8x Uniform rental a
Slide 28: Cash in the U.S. Continues to Grow
Cash in the U.S. Continues to Grow Payment Methods by Volume1 Notes in Circulation3 % Cash Usage by Income1,4 % of U.S. (in billions) Households Other 45 $125,000 and greater 24% 19% 40 Electronic Cash 35 $100,000-$124,999 25% 9% 30 25 $75,000-$99,999 26% 12% 20 $50,000-$74,999 27% 17% Debit 15 10 $
Slide 29: 2015 - 2016 Non-GAAP Results Reconciled to GAAP (1 of 3)
2015 - 2016 Non-GAAP Results Reconciled to GAAP (1 of 3) The Brink’s Company and subsidiaries (In millions) 2015 2016 Full Year Q1 Q2 Q3 Q4 Full Year Revenues: GAAP $ 3,061.4 $ 721.8 739.5 755.8 803.5 3,020.6 Venezuela operations(a) (84.5) (32.1) (21.5) (20.4) (35.4) (109.4) Acquisitions and disposi
Slide 30: 2015 - 2016 Non-GAAP Results Reconciled to GAAP (2 of 3)
2015 - 2016 Non-GAAP Results Reconciled to GAAP (2 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2015 2016 Full Year Q1 Q2 Q3 Q4 Full Year Income (loss) from continuing operations attributable to Brink's: GAAP $ (9.1) $ (3.1) 0.3 24.5 14.5 36.2 Retirement plans(c)
Slide 31: 2015 - 2016 Non-GAAP Results Reconciled to GAAP (3 of 3)
2015 - 2016 Non-GAAP Results Reconciled to GAAP (3 of 3) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2015 2016 Full Year Q1 Q2 Q3 Q4 Full Year Adjusted EBITDA(f): Net income (loss) attributable to Brink's - GAAP $ (11.9) $ (3.1) 0.3 24.5 12.8 34.5 Interest expense - G
Slide 32: 2017 - 2018 Non-GAAP Results Reconciled to GAAP (1 of 4)
2017 - 2018 Non-GAAP Results Reconciled to GAAP (1 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2017 2018 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Nine Months Revenues: GAAP $ 788.4 805.9 849.5 903.2 3,347.0 $ 879.1 849.7 852.4 2,581.2 Venezuela operations(a) (48.1) (46.3)
Slide 33: 2017 - 2018 Non-GAAP Results Reconciled to GAAP (2 of 4)
2017 - 2018 Non-GAAP Results Reconciled to GAAP (2 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions, except per share amounts) 2017 2018 Nine Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Months Income (loss) from continuing operations attributable to Brink's: GAAP $ 34.7 14.3 19.9
Slide 34: 2017 - 2018 Non-GAAP Results Reconciled to GAAP (3 of 4)
2017 - 2018 Non-GAAP Results Reconciled to GAAP (3 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions, except per share amounts) EPS: GAAP $ 0.67 0.28 0.38 (1.02) 0.33 $ 0.42 (2.11) 0.34 (1.34) Retirement plans(c) 0.09 0.11 0.11 0.12 0.43 0.13 0.12 0.12 0.37 Venezuela o
Slide 35: 2017 - 2018 Non-GAAP Results Reconciled to GAAP (4 of 4)
2017 - 2018 Non-GAAP Results Reconciled to GAAP (4 of 4) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 2017 2018 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Nine Months Adjusted EBITDA(j): Net income (loss) attributable to Brink's - GAAP $ 34.7 14.2 19.9 (52.1) 16.7 $ 22.3 (107.9) 1
Slide 36: Non-GAAP Reconciliation — Other Items Not Allocated
Non-GAAP Reconciliation — Other Items Not Allocated The Brink’s Company and subsidiaries 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 items
Slide 37: Non-GAAP Reconciliation — Other Items Not Allocated
Non-GAAP Reconciliation — Other Items Not Allocated The Brink’s Company and subsidiaries Other Items Not Allocated to Segments (Unaudited) Acquisitions and dispositions Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in
Slide 38: Non-GAAP Reconciliation — Other
Non-GAAP Reconciliation — Other The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) Amounts Used to Calculate Reinvestment Ratio Property and Equipment Acquired During the Period Full-Year Full Year Full Year 2015 2016 2017 Capital expenditures — GAAP 101.1 112.2 174.5 Capita
Slide 39: Non-GAAP Reconciliation — Cash Flows
Non-GAAP Reconciliation — Cash Flows The Brink’s Company and subsidiaries (In millions) Full Year 2017 Cash flows from operating activities Operating activities - GAAP $ 296.4 Venezuela operations (17.3) (Increase) decrease in restricted cash held for customers (44.3) (Increase) decrease in certain
Slide 40: 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 2016 Debt: Short-term borrowings $ 45.2 162.8 Long-term debt 1,191.5 280.4 Total Debt 1,236.7 443.2 Restricted cash borro