Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q3 2017 Earnings Presentation
28 slides from Brinks Company (the)'s earnings presentation, Oct 25, 2017
Slide 1: Secure Logistics. Worldwide. Third Quarter October 25, 2017
S ECU RE LOG IST ICS. WORLDW ID E. Third Quarter Oc to ber 25 , 2017 Exhibit 99.2
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: CEO Overview – Doug Pertz
CEO Overview Doug Pertz
Slide 4: Third-Quarter 2017 Non-GAAP Results
Third-Quarter 2017 Non-GAAP Results 4 Organic Growth Supplemented by Acquisitions ($ in millions) $735 $829 2016 2017 REVENUE ($ Millions) +13% +6% Organic $63 $76 2016 2017 8.6% Margin OPERATING PROFIT 9.2% Margin ADJUSTED EBITDA $94 $112 2016 2017 12.7% Margin 13.5% Margin ($ Millions) EPS $0.68 $
Slide 5: CEO Overview: Third-Quarter and Recent Highlights
CEO Overview 5 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 6: Non-GAAP Guidance
Non-GAAP Guidance 6 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)
Slide 7: Three-Year Strategic Plan: Organic Growth Initiatives
Three-Year Strategic Plan: Organic Growth Initiatives 7 • 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 ef
Slide 8: Three-Year Strategic Plan: Organic Growth + Acquisitions
Three-Year Strategic Plan Organic Growth + Acquisitions 8 • Focus: Core/core; core/adjacent • Objectives: Capture synergies & improve density • Investment 2017: $370M • Investment 2018-2019: ~$400M per year 2017 2018 2019 Strategy 1.0 Core Acquisitions Initial 2019 Target: $475M EBITDA • Close the G
Slide 9: Ron Domanico – Financial Review
Ron Domanico Financial Review
Slide 10: Value Creation Strategy – Brink's Building Blocks
Value Creation Strategy – Brink’s Building Blocks GROWTH (APG) • Grow Organically • Pursue Adjacencies • Introduce Differentiated Service (IDS) • Make Acquisitions MARGINS (CTG) • Pricing • Lean Cost Structure • Optimize Sourcing • Operating Leverage • Corporate Cost Discipline • Interest, Taxes, EP
Slide 11: Non-GAAP Revenue: Third Quarter 2017 vs 2016
$735 $747 $829 $12 $37 $45 ($ Millions) 2% 6% Organic Adjusted 2016 RevenueCurrency Acq/Disp 2016 Revenue 2017 Revenue 5%% Change Non-GAAP Revenue: Third Quarter 2017 vs 2016 11Note: See detailed reconciliations of non-GAAP to GAAP results included in the Third Quarter 2017 Earnings Release availabl
Slide 12: Non-GAAP Operating Profit: Third Quarter 2017 vs 2016
8.6% 9.2% Organic Adjusted 2016 OP ProfitCurrency Acq/Disp 2016 OP Profit 2017 OP Profit OP Margin $63 $63 $76 ~($1) $7 $7 Non-GAAP Operating Profit: Third Quarter 2017 vs 2016 12 ($ Millions) Note: See detailed reconciliations of non-GAAP to GAAP results included in the Third Quarter 2017 Earnings
Slide 13: Non-GAAP Results: Third Quarter vs 2016
$76 $43 $112 $34 $31 $4 ($8) ($24) ($2) ($ Millions, except EPS) EPS 2017 $0.83 2016 $0.68 Net Interest & Other TaxesOp Profit Income from Continuing Ops D&AMinority Interest Interest Exp. &Taxes Adjusted EBITDA ($2) ($3)$13 $9 $3_ $5 $19 vs 2016 Non-GAAP Results: Third Quarter 13 Share-based Compen
Slide 14: Non-GAAP Results: Nine Months 2017
$137 $191 2016 2017 6.4% Margin OPERATING PROFIT 8.2% Margin Non-GAAP Results: Nine Months 2017 14 A Strong Nine Months $2,140 $2,329 2016 2017 REVENUE ($ Millions) +6% Organic ADJUSTED EBITDA $230 $295 2016 2017 10.8% Margin 12.7% Margin ($ Millions) EPS $1.40 $2.06 2016 2017 ($ Millions) Note: See
Slide 15: Capital Expenditures 2015–2017
2015 Actual 2016 Actual 2017 Outlook Capital Expenditures 15 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
Slide 16: Adjusted EBITDA and Financial Leverage; Debt and 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 17: Credit Facility and Notes Offering
($ Millions) Credit Facility and Notes Offering 17 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
Slide 18: Returns — Capital Structure: Debt
$144 $500 $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%
Slide 19: Leverage Outlook
Leverage Outlook 19 0.9x 0.7x 1.3x 1.4x 1.3x 2015 Actual 2016 Actual 2017 Pro-forma Estimate 2018 Pro-forma Estimate 2019 Pro-forma Estimate Net Leverage Ratio(2) 1. Forecasted utilization based on business plan through 2019 including $400 million per year in acquisitions and capital expenditures of
Slide 20: Adjusted EBITDA
($ 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 available in the Quarterly Results section of the Brink’s website: www.brinks.com. See Adjusted
Slide 21: Conclusion
Conclusion
Slide 22: 2017 Non-GAAP Outlook and 2018 Preliminary Outlook
$168 $216 $280 - $290 5.6% 7.4% 8.8% - 9.1% 2015 2016 2017 Continued Improvement Expected Non-GAAP Operating Profit Margin 2017 Non-GAAP Outlook • Revenue ~$3.2 billion (6% organic growth) • Operating profit $280 - $290 million; margin 8.8% - 9.1% • Adjusted EBITDA $425 to $435 million • EPS $3.00-
Slide 23: Questions?
Questions?
Slide 24: Appendix
Appendix
Slide 25: 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 26: 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 27: 2015 Non-GAAP Reconciliations (1 of 2)
2015 Non-GAAP Reconciliations (1 of 2) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 27 2015 4Q Full Year Operating profit (loss): GAAP $ 42.4 96.4 Venezuela operations(a) (10.6) 45.6 Reorganization and Restructuring(a) 12.1 15.3 Acquisitions and dispositions(a) 7.1 10.
Slide 28: 2015 Non-GAAP Reconciliations (2 of 2)
2015 Non-GAAP Reconciliations (2 of 2) The Brink’s Company and subsidiaries Non-GAAP Reconciliations (In millions) 28 2015 4Q Full Year Adjusted EBITDA: Income from continuing operations - Non-GAAP $ 27.9 87.1 Interest expense - Non-GAAP(e) 4.5 18.9 Income tax provision - Non-GAAP 17.3 53.6 Deprecia