Brinks Company (the) · NYSE:BCO
Brinks Company (the) — Q4 2016 Earnings Presentation
26 slides from Brinks Company (the)'s earnings presentation, Feb 8, 2017
Slide 1: Fourth Quarter 2016 Earnings Call
February 8, 2017 Fourth Quarter 2016 Earnings Call Secure Logistics. Worldwide. Exhibit 99.2
Slide 2: Safe Harbor Statement & Non-GAAP Results
2 Safe Harbor Statement & 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: Fourth Quarter 2016 Earnings Call
February 8, 2017 Fourth Quarter 2016 Earnings Call Secure Logistics. Worldwide.
Slide 4: CEO Overview
4 • EPS $.87 vs $.55, up 58% • 10% organic revenue growth • Operating profit $77 million, up 58% (71% organic growth) • 10% operating margin, up from 6.6% • U.S. profit $8 million vs year-ago loss • Negative currency impact: $29 million on revenue, $8 million on operating profit, $.10 on EPS CEO Ove
Slide 5: CEO Overview: 2017 Non-GAAP Guidance
5 • 6% organic revenue growth to $3.0 billion • Operating profit $230 - $240 million • 7.7% - 8.0% operating margin, up from 7.1% in 2016 • EPS $2.45 - $2.55 vs $2.24 in 2016 • Adjusted EBITDA $370 - $380 million • Negative currency impact: $80 million on revenue, $15 million on operating profit, $0
Slide 6: Our Strategy
6 Our Strategy Accelerate Profitable Growth (APG) Close the Gap with Operational Excellence (CTG) Introduce Differentiated Services (IDS) ACCELERATE PROFITABLE GROWTH • Grow High-Value Services • Grow account share with existing customers • Increase focus on smaller financial institutions • Penetrat
Slide 7: A Clear Path to Value Creation
7 A Clear Path to Value Creation* Incremental Improvements Breakthrough Initiatives Sales & New Business Branch Standardization Lean Technology Investments Accretive Acquisitions OtherFleet One-Person Vehicles Optimize Network Current Margin Target Margin * For illustrative purposes only
Slide 8: A World of Opportunities
8 A World of Opportunities Current U.S. Mexico and /Canada Rest of World Total Acq Target * For illustrative purposes only • Improve customer experience • Grow CompuSafe® and retail services • Outsourced cash processing • Optimize cost structure • New markets for BGS • Accretive acquisitions • Custo
Slide 9: Financial Review
Financial Review Secure Logistics. Worldwide.
Slide 10: Non-GAAP Revenue: 2016 vs 2015
10 $733 $695 $768 ($29) ($9) $73 Non-GAAP Revenue: 2016 vs 2015 ($ Millions) Fourth-Quarter Full-Year (4%) 10% 6%(7%) Organic Adjusted 2015 RevenueCurrency Acq/Disp 2015 Revenue 2016 Revenue (1%)% Change % Change (1%) $2,977 ($198) $2,908$167$2,742($37) Note: See detailed reconciliations of non-GAAP
Slide 11: Non-GAAP Operating Profit: 2016 vs 2015
11 $49 $42 $77 ($8) $2 $35 Non-GAAP Operating Profit: 2016 vs 2015 ($ Millions) Fourth-Quarter Organic Adjusted 2015 Op ProfitCurrency Acq/Disp 2015 Op Profit 2016 Op Profit 6.6% 10.0%OP Margin Full-Year 7.1%5.3%OP Margin $157 ($22) $207$68$139$4 Note: See detailed reconciliations of non-GAAP to GAA
Slide 12: Non-GAAP Results – Fourth Quarter
12 $77 $44 $109 ($6) ($26) ($1) $33 $32 Non-GAAP Results – Fourth Quarter ($ Millions, except EPS) EPS 2016 $0.87 2015 $0.55 Fourth-Quarter 2016 Net Interest TaxesOp Profit Income from Continuing Ops D&A Minority Interest Interest Exp. &Taxes Adjusted EBITDA ($3) ($9)$28 $17 ($1)$1 $10 $27 vs 2015 N
Slide 13: Non-GAAP Results – Full Year
13 $207 $113 $333 $130 $89 ( $19 ) ( $69 ) ( $5 ) Non-GAAP Results – Full Year ($ Millions, except EPS) Full Year 2016 Net Interest TaxesOp Profit Income from Continuing Ops D&A Minority Interest Interest Exp. &Taxes Adjusted EBITDA ($4) ($17)$50 $29 ($6)- $18 $41 vs 2015 EPS 2016 $2.24 2015 $1.69 N
Slide 14: Capital Expenditures
14 $143 $116 $137 2014 2015 2016 Compusafe Facility Equipment / Other IT Armored Vehicle Capital Expenditures ($ Millions) Note: See reconciliation to GAAP results in Appendix. Depreciation and amortization does not include intangible asset amortization. Amounts may not add due to rounding. Deprecia
Slide 15: Debt and Leverage
15 $318 $269 $247 $148 $158 $174 $467 $427 $421 Dec 2014 Dec 2015 Dec 2016 $272 $291 $333 2014 2015 2016 Debt and Leverage ($ Millions) Leverage Ratio* 1.2 0.9 0.7 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
Slide 16: Adjusted EBITDA
16 $157 $207 $135 $126 2015 2016 Adjusted EBITDA ($ Millions, except share price) $167 Adjusted EBITDA Multiple Trailing 12 Months Adjusted EBITDA Multiple $178 $138 $128 9.8%Margin 11.4% Multiple 5.7 7.0 *Trailing 12 months as of 12/31/16 Source: Publicly available peer financial information Share
Slide 17: Outlook
17 124 157 207 230-240 3.7% 5.3% 7.1% 7.7% - 8.0% 2014 2015 2016 2017 -20 -15 -10 -5 0 5 10 -25 25 75 125 175 225 275 2014 2015 2016 2017 Continued Improvement Expected in 2017 & Beyond Non-GAAP Operating Profit Margin 2017 Non-GAAP Outlook • Revenue $3.0 billion (6% organic growth) • EPS $2.45- $2.
Slide 18: Fourth Quarter 2016 Earnings Call
February 8, 2017 Fourth Quarter 2016 Earnings Call Secure Logistics. Worldwide.
Slide 19: Appendix
Appendix
Slide 20: Non-GAAP 2017 Outlook
20 Non-GAAP 2017 Outlook ($ Millions, except EPS) Note: a) See detailed reconciliations of non-GAAP to GAAP results included in the Fourth Quarter 2016 Earnings Release available in the Quarterly Results section of the Brink’s website: www.brinks.com. b) Revenue, operating profit and Adjusted EBITDA
Slide 21: Brink's Historical Non-GAAP Results
21 $21 $24 $21 $59 $41 $31 $37 $49 $31 $38 $61 $77 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 $0.15 $0.16 $0.12 $0.58 $0.44 $0.30 $0.40 $0.55 $0.31 $0.39 $0.66 $0.87 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Brink’s Historical Non-GAAP Results ($ Millions, except p
Slide 22: Legacy Liabilities – Underfunding at December
22 Legacy Liabilities – Underfunding at December 31 ($ Millions) Primary U.S. Pension UMWA ($108) ($114) ($108) 2014 2015 2016 Primary U.S. Pension ($197) ($206) ($227) 2014 2015 2016 UMWA
Slide 23: Estimated Cash Payments to Pension and UMWA
23 Estimated Cash Payments: $0 to Primary U.S. Pension until 2021 $0 to UMWA until 2027 ($ Millions) Payments to Primary U.S. Pension Payments to UMWA • Prepaid 2015 and 2016 pension payments in 3Q14 − Accelerated de-risking of invested asset allocation − Reduced PBGC premiums (current borrowing cos
Slide 24: Segment Results and Non-GAAP Results Reconciled to GAAP
Segment Results and Non-GAAP Results Reconciled to GAAP
Slide 25: Non-GAAP Reconciliation – Net Debt
25 Non-GAAP Reconciliation – Net Debt The Brink’s Company and subsidiaries Non-GAAP Reconciliations – Net Debt (Unaudited) (In millions) a) Amount excludes $23.3 million at December 31, 2016 and $3.5 million at December 31, 2015 for those short term borrowings related to cash borrowed under lending
Slide 26: Non-GAAP Reconciliation – Other
26 Non-GAAP Reconciliation – Other The Brink’s Company and subsidiaries Non-GAAP Reconciliations – Other Amounts (Unaudited) (In millions) Amounts Used to Calculate Reinvestment Ratio Fixed Assets Acquired Full Year 2014 2015 2016 Capital expenditures - GAAP 136.1 101.1 112.2 Assets aquired under ca