EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1 exhibit_99-1.htm
 The Brink’s Company
 Investor Overview
 NYSE:BCO
 May 2012
 
Exhibit 99.1
 
 
 
Forward-Looking Statements
This presentation, including questions and answers, contains forward-looking
information within the meaning of the Private Securities Litigation Reform Act
of 1995. Actual results could differ materially from projected results.
Additional information regarding factors that could affect financial
performance is in our press release dated April 26, 2012, and in our filings with
the Securities and Exchange Commission, including our most recent forms 10-K
and 10-Q. Information included in this presentation is representative as of
today only and the company assumes no obligation to update any forward-
looking statements.
2
 
 
 
Today’s Presentation
 ¢ Business Overview
 ¢ Growth Opportunities
 
 
 
4
 ¢ Premier Brand
   ¢ Safety, security, service, trust
 ¢ Global Footprint
   ¢ Unique operational advantage
   ¢ Supports high-value Global Services business
 ¢ Market Fundamentals
   ¢ Cash growing worldwide
   ¢ Increased outsourcing
   ¢ Dangerous world
   ¢ Economic recovery, interest rates
 ¢ Growth Opportunities
   ¢ Maximize profits in developed markets
   ¢ Expand in emerging markets
   ¢ Invest in solutions and adjacent markets
Investment Highlights
4
 
 
 
5
¢ World’s Largest Secure Logistics Company
 ¢ 2011 Revenue $3.9 billion
 ¢ Premier global brand
 ¢ Customers in more than 100 countries
 ¢ ~71,000 employees; 1,100 facilities and 13,000
 vehicles
¢ Global Cash-In-Transit (CIT) network supports
 growth in High-Value Services
Company Snapshot
2011 Revenue
($3.9 billion)
5
 
 
 
Diverse Business Lines: CIT Drives High-Value Services
 – Cash, coins, checks and
 other valuables; ATM
 services
¢ Global Infrastructure
 – Supports Global Services
 and Cash Logistics
High-Value Services
¢ Global Services
 – Secure long-distance
 transport of valuables
¢ Cash Logistics
 – Money processing
 – Vaulting
 – CompuSafe® Service
¢ Adjacencies
 – Payment Services
 – Commercial Security
Security Services
6
¢ Guarding in select countries
 – Airports, embassies
 
 
 
High-Value Services…High-Margin Solutions
CIT Footprint Supports High-Value Services
 
¢ Global Services
 ¢ Secure Logistics of valuables over long distances
 ¢ Diamonds, jewelry, banknotes, precious metals
 ¢ 12,000 Customers… 5,000 Cities… 1,400 daily shipments
¢ Cash Logistics
 ¢ Money Processing
 ¢ Vaulting
 ¢ CompuSafe® Service
¢ Adjacent Services
 ¢ Extending our brand into new markets
 ¢ Commercial Security, Payment Processing
7
 
 
 
8
 ¢ Maximize profits in developed markets
 ¢ EMEA, North America
 ¢ Invest in growth opportunities
 ¢ Emerging markets:
 BRIC, LATAM, Asia-Pacific
 ¢ High-Value Services:
 Global Services, Cash Logistics
 ¢ Adjacencies:
 Commercial Security, Payment Processing
Global Secure Logistics
 Market
Source: Internal Company Estimates based on most recently available data
Global Leader…Global Growth Strategy
8
Leading Share in Fragmented Market
 
 
 
Long-Term Goal: Deliver Shareholder Value
Organic
Revenue
8 - 10%
Growth
Segment
Margin
Target
9
Note: Segment margin is calculated on Non-GAAP segment profit.
 See Appendix for reconciliation to GAAP.
2011
 
 
 
2011 Revenue: $1.3B
Region Overview:
¢ 2011: 5% organic growth…low single-digit margin
¢ Diverse competitive, regulatory and threat environments
¢ Customers want outsourced solutions
Strategy:
¢ Europe: Maximize CIT profits; increase efficiency; fix
        underperformers
¢ Invest in High-Value Services and Developing Markets
EMEA: Improve Operating Performance
10
 
 
 
2011 Revenue: $974M
Region Overview:
¢ Market leader
¢ 2011: Organic revenue flat…3.6% margin
¢ Price and volume pressure
Strategy:
¢ Maximize CIT profits  ─ reduce costs, improve processes
¢ Remain disciplined on price, service and security
¢ Shift mix to High-Value Services
North America: Maximize CIT…Grow High-Value Services
11
Note: Segment margin is calculated on Non-GAAP segment profit.
 See Appendix for reconciliation to GAAP.
 
 
 
Region Overview:
¢ Growing economies
¢ High-risk threat environment…customers value security
¢ Growing need to protect product supply chains
¢ 2011: 21% organic growth, double-digit margin
Strategy:
¢ Strengthen and expand footprint
¢ Leverage footprint to grow High-Value Services
¢ Mexico: Increase CIT margins, add High-Value Services
2011 Revenue: $1.5B
Latin America: Continued Strong Growth
12
 
 
 
2011 Revenue: $154M
Region Overview:
¢ High-growth, service-driven economies
¢ Varying degrees of banking sophistication, gov’t restrictions
¢ Strong in Hong Kong; growing in China, India, Japan
¢ 2011: 17% organic revenue growth, profits up 11%
Strategy:
¢ Leverage Global Services network
¢ Accelerate China and India growth
¢ Expand commercial security capabilities
Asia Pacific: Invest and Grow
13
 
 
 
Financial Strength and Flexibility
n Solid Revenue Growth
 n 10% CAGR 2007-2011
 n Late 2010 acquisitions added over $400
 million in 2011
n Cash Flow Supports Continued Growth
  n ~45% of Capex focused on Emerging
               Markets and High-Value Services (’09 - ’11)
n Strong Balance Sheet
 n Investment grade credit rating
 n $285 million net debt; $362 million available
 credit (3/31/12)
 n Manageable cash outflow for legacy
 liabilities (see appendix page 28)
14
Note: CAGR calculated on Non-GAAP revenues. Net debt is a Non-GAAP measure.
 See appendix for reconciliation to GAAP.
 
 
 
Achieve Targets…Create Shareholder Value
2012 Outlook:
 n 5% to 8% organic revenue growth
 n Increased margin guidance to ~7.0%
Long-Term Targets:
 n 8% to 10% annual organic revenue growth
 n 10% segment margin
15
Note: Segment margin is calculated on Non-GAAP segment profit.
 See Appendix for reconciliation to GAAP.
 See Appendix for Summary of 2012 Revenue and Segment Margin Outlook (GAAP and Non-GAAP)
 
 
 
16
 ¢ Premier Brand
   ¢ Safety, security, service, trust
 ¢ Global Footprint
   ¢ Unique operational advantage
   ¢ Supports high-value Global Services business
 ¢ Market Fundamentals
   ¢ Cash growing worldwide
   ¢ Increased outsourcing
   ¢ Dangerous world
   ¢ Economic recovery, interest rates
 ¢ Growth Opportunities
   ¢ Maximize profits in developed markets
   ¢ Expand in emerging markets
   ¢ Invest in solutions and adjacent markets
Investment Highlights
16
 
 
 
Appendix
 
 
 
Appendix
   
                                                 Page
 5-Year Non-GAAP Revenue Growth..........................................................................19
 5-Year Non-GAAP Operating Profit...........................................................................20
 Summary of 2012 Revenue and Segment Margin Outlook......................................21
 Reconciliation to Amounts Reported under GAAP..................................................22
 2011 Segment Results, GAAP and non-GAAP...........................................................26
 Legacy Liabilities.........................................................................................................28
18
 
 
 
Non-GAAP Revenue (1)
($MM)
(1)  Non-GAAP financial information is reconciled to amounts reported under U.S. GAAP on pages 21, 22 & 23.
 Non-GAAP Revenue Growth
19
 
 
 
Total Non-GAAP Operating Profit (1)
($MM)
Segment
197
218
173
225
247
Non-Segment
(53)
(63)
(35)
(36)
(41)
Total
145
155
138
188
206
(1)  Non-GAAP financial information is reconciled to amounts reported under U.S. GAAP on pages 21, 22 & 23.
 Non-GAAP Profit Growth
Amounts may not add due to rounding
20
 
 
 
Summary of 2012 Revenue and Segment Margin Outlook
21
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2011 
 
Estimate
 
 
 
2011 
 
Estimate
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
12 %
 
7% - 10%
 
 
 
12 %
 
7% - 10%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
8 %
 
5% - 8%
 
 
 
8 %
 
5% - 8%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
5 %
 
(4)% - (6)%
 
 
 
5 %
 
(4)% - (6)%
 
North America
 
 
1 %
 
- 
 
 
 
1 %
 
- 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment margin
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
6.9 %
 
7.0% - 8.0%
 
 
 
7.3 %
 
7.0% - 8.0%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Results - Reconciled to Amounts Reported under GAAP
Non-GAAP results described in this presentation are financial measures that are not required by, or presented in accordance with generally
accepted accounting principles (“GAAP”).  
Purpose of Non-GAAP Information
 The purpose of the non-GAAP information is to report our financial information
    •    without income and expense items described below in 2007, 2008, 2009, 2010 and 2011,
    •    as if our results from Venezuela had been translated at the less-favorable parallel exchange rate in 2007, 2008 and 2009, and
    •    after adjusting tax expense for items described below.
 The non-GAAP information provides information to assist comparability and estimates of future performance. Brink’s believes these
measures are helpful in assessing operations and estimating future results and enable period-to-period comparability of financial
performance. Non-GAAP results should not be considered as an alternative to revenue or income amounts determined in accordance with
GAAP and should be read in conjunction with their GAAP counterparts.
a) To reduce revenues and segment operating income to reflect the 2009, 2008 and 2007 results of Venezuelan subsidiaries had they
 been translated using the parallel currency exchange rate in effect at the time. The average parallel exchange rate used for the
 2009 non-GAAP full-year earnings was 6.0 bolivar fuertes to the U.S. dollar, compared to an average rate of 2.2 bolivar fuertes to
 the U.S. dollar that was used for the GAAP financial statements. The official rate of 2.15 bolivar fuertes to the U.S. dollar was used
 for translation of Venezuela for most of 2009 until the parallel rate was adopted during December.  The use of the weaker rate to
 translate 2009 non-GAAP revenues and earnings of the Venezuelan subsidiaries decreased each measure by 63%.
b) To reverse remeasurement gains and losses in Venezuela. For accounting purposes, Venezuela is considered a highly inflationary
 economy. Under GAAP, subsidiaries that operate in Venezuela record gains and losses in earnings for the remeasurement of
 bolivar fuerte-denominated net monetary assets.
c) To eliminate charges related to exit of Belgium cash-in-transit (CIT) business.
d) To eliminate currency losses incurred in Venezuela related to increases in cash held in U.S. dollars by Venezuelan subsidiaries. 
 These losses would not have been incurred had the operations been translated at the parallel rate.
e) To eliminate gain recognized on the sale of the U.S. document destruction business, gains on available-for-sale equity and debt
 securities, gains/losses related to acquisition of controlling interest in subsidiaries that were previously accounted for as equity or
 cost method investments, and gains on sales of former operating assets.
f) To eliminate royalty income from Brink’s Home Security.
g) To eliminate the cost related to the retirement of the former CEO.
h) To eliminate employee benefit settlement loss related to Mexico. Portions of Brink’s Mexican subsidiaries’ accrued employee
 termination benefit were paid in the second and third quarters of 2011. The employee termination benefit is accounted for under
 FASB ASC Topic 715, Compensation - Retirement Benefits. Accordingly, the severance payments resulted in settlement losses.
i) To eliminate expenses related to U.S. retirement liabilities.
22
 
 
 
See page 22 for explanation of footnotes
Reconciliation
Amounts may not add due to rounding
Non-GAAP Results - Reconciled to Amounts Reported under GAAP (Cont.)
23
 
 
 
(In millions)
 
2011
  
2010
  
2009
  
2008
  
2007
Non-Segment
 
 
 
 
 
 
 
 
 
 
Reported GAAP Basis
$
(60)
 
(63)
 
(47)
 
(43)
 
(62)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 Venezuela Currency Loss (d)
 
-
 
-
 
23
 
-
 
-
 Gains/Losses on Acquisitions and Asset Dispositions (e)
 
(10)
 
9
 
(25)
 
(13)
 
-
 Royalty from BHS (f)
 
-
 
(5)
 
(7)
 
(1)
 
-
 CEO Retirement cost (g)
 
4
 
-
 
-
 
-
 
-
 U.S. Retirement Plans (i)
 
25
 
23
 
21
 
(5)
 
10
Non-GAAP Basis
$
(41)
 
(36)
 
(35)
 
(63)
 
(53)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operating Profit
 
 
 
 
 
 
 
 
 
 
Reported GAAP Basis
$
171
 
146
 
167
 
229
 
161
Adjustments:
 
 
 
 
 
 
 
 
 
 
 Change to Parallel Rate (a)
 
-
 
-
 
(43)
 
(49)
 
(27)
 Remeasure Vz Net Monetary Assets (b)
 
-
 
3
 
-
 
-
 
-
 Exit Belgium CIT Business (c)
 
10
 
13
 
-
 
-
 
-
 Venezuela Currency Loss (d)
 
-
 
-
 
27
 
-
 
-
 Gains/Losses on Acquisitions and Asset Dispositions (e)
 
(10)
 
9
 
(25)
 
(13)
 
-
 Royalty from BHS (f)
 
-
 
(5)
 
(7)
 
(1)
 
-
 CEO Retirement Cost (g)
 
4
 
-
 
-
 
-
 
-
 Mexico Employee Benefit Settlement Losses (h)
 
2
 
-
 
-
 
-
 
-
 U.S. Retirement Plans (i)
 
28
 
22
 
19
 
(10)
 
11
Non-GAAP Basis
$
206
 
188
 
138
 
155
 
145
See page 22 for explanation of footnotes
Reconciliation
Amounts may not add due to rounding
Non-GAAP Results - Reconciled to Amounts Reported under GAAP (Cont.)
24
 
 
 
 Net Debt
 
 
March 31,
 
December 31,
 
 
2012
 
2011
Debt:
 
 
 
 
 Short-term debt
$
 23.0
 
 25.4
 Long-term debt
 
 408.9
 
 364.0
 Total Debt
 
 431.9
 
 389.4
 
 
 
 
 
 Cash and cash equivalents
 
 155.5
 
 182.9
 Less amounts held by certain cash logistics operations (a)
 
 (8.1)
 
 (25.1)
  Amount available for general corporate purposes
 
 147.4
 
 157.8
 
 
 
 
 
 Net Debt
$
 284.5
 
 231.6
(a) Title to cash received and processed in certain of our secure cash logistics operations transfers to us for a short period of time.
 The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general
 corporate purposes in the management of our liquidity and capital resources and in our computation of Net Debt.
Net Debt is a supplemental financial measure that is not required by, or presented in accordance with GAAP. We use Net Debt as a
measure of our financial leverage. We believe that investors also may find Net Debt to be helpful in evaluating our financial leverage.
Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be reviewed in
conjunction with our consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to
Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP. Net Debt excluding
cash and debt in Venezuelan operations was $307 million at March 31, 2012, and $242 million at December 31, 2011.
NET DEBT RECONCILED TO AMOUNTS REPORTED UNDER GAAP
(in millions)
25
 
 
 
 2011 Segment Results, GAAP
 
 
 
 
 
 
 
 
 
Organic
 
Acquisitions/
 
 Currency
 
 
 
 
 
 
 
 
2010
 
Change
 
Dispositions (b)
 
(c)
 
2011
 
Total
 
Organic
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 EMEA
$
 1,200
 
 59
 
 (25)
 
 63
 
1,297
 
                8%
 
 5%
 Latin America
 
 877
 
 182
 
 364
 
 38
 
1,461
 
    66%
 
 21%
 Asia Pacific
 
 127
 
 22
 
 -
 
 6
 
154
 
    22%
 
 17%
 International
 
 2,204
 
 262
 
 339
 
 106
 
2,911
 
    32%
 
 12%
 North America
 
 918
 
 -
 
 49
 
 8
 
974
 
                6%
 
 -
  Total
$
 3,122
 
 263
 
 388
 
 114
 
3,886
 
    24%
 
 8%
Operating profit:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 International
$
 165
 
 10
 
 12
 
 13
 
200
 
    21%
 
   6%
 North America
 
 44
 
 (15)
 
 1
 
 1
 
31
 
   (29%)
 
(33%)
 Segment operating profit
 
 209
 
 (4)
 
 13
 
 14
 
231
 
    11%
 
 (2%)
 Non-segment (a)
 
 (63)
 
 (15)
 
 18
 
 -
 
(60)
 
    (4%)
 
 24%
 Total
$
 146
 
 (19)
 
 31
 
 14
 
171
 
   17%
 
(13%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 7.5%
 
 
 
 
 
 
 
 6.9%
 
 
 
 
North America
 
 4.8%
 
 
 
 
 
 
 
 3.2%
 
 
 
 
Segment operating margin
 
 6.7%
 
 
 
 
 
 
 
 5.9%
 
 
 
 
Full Year 2011 vs. 2010
(In millions)
Segment Results - GAAP
See footnotes on page 27.
26
Amounts may not add due to rounding
 
 
 
 2011 Segment Results, non-GAAP
 
 
 
 
 
(In millions)
 
 
 
Organic
 
Acquisitions/
 
 Currency
 
 
 
 
 
 
 
 
2010
 
Change
 
Dispositions (b)
 
(c)
 
2011
 
Total
 
Organic
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 EMEA
$
 1,200
 
 59
 
 (25)
 
 63
 
 1,297
 
 8%
 
 5%
 Latin America
 
 877
 
 182
 
 364
 
 38
 
 1,461
 
 66%
 
 21%
 Asia Pacific
 
 127
 
 22
 
 -
 
 6
 
 154
 
 22%
 
 17%
 International
 
 2,204
 
 262
 
 339
 
 106
 
 2,911
 
 32%
 
 12%
 North America
 
 918
 
 -
 
 49
 
 8
 
 974
 
 6%
 
 -
  Total
$
 3,122
 
 263
 
 388
 
 114
 
 3,886
 
 24%
 
 8%
Operating profit:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 International
$
 181
 
 11
 
 10
 
 10
 
 212
 
 17%
 
 6%
 North America
 
 43
 
 (10)
 
 1
 
 1
 
 35
 
 (20%)
 
(24%)
 Segment operating profit
 
 225
 
 -
 
 12
 
 10
 
 247
 
 10%
 
 -
 Non-segment (a)
 
 (36)
 
 (4)
 
 -
 
 -
 
 (41)
 
 12%
 
 12%
 Total
$
 188
 
 (4)
 
 13
 
 10
 
 206
 
 9%
 
 (2%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 8.2%
 
 
 
 
 
 
 
 7.3%
 
 
 
 
North America
 
 4.7%
 
 
 
 
 
 
 
 3.6%
 
 
 
 
Segment operating margin
 
 7.2%
 
 
 
 
 
 
 
 6.3%
 
 
 
 
(a) Includes income and expense not allocated to segments.
(b) Includes operating results and gains/losses on acquisitions, sales and exit of businesses.
(c) Revenue and Segment Operating Profit:  The “Currency” amount in the table is the summation of the monthly currency changes, plus (minus) the U.S.
 dollar amount of remeasurement currency gains (losses) of bolivar fuerte-denominated net monetary assets recorded under highly inflationary accounting
 rules related to the Venezuelan operations. The monthly currency change is equal to the Revenue or Operating Profit for the month in local currency, on a
 country-by-country basis, multiplied by the difference in rates used to translate the current period amounts to U.S. dollars versus the translation rates used in
 the year-ago month. The functional currency in Venezuela is the U.S. dollar under highly inflationary accounting rules. Remeasurement gains and losses
 under these rules are recorded in U.S. dollars but these gains and losses are not recorded in local currency. Local currency Revenue and Operating Profit
 used in the calculation of monthly currency change for Venezuela have been derived from the U.S. dollar results of the Venezuelan operations under U.S.
 GAAP (excluding remeasurement gains and losses) using current period currency exchange rates.
Amounts may not add due to rounding
27
 
 
 
 Legacy Liabilities
Estimated Contributions to U.S. Plans
 
2011
  
2012
  
2013
  
2014
  
2015
  
2016
  
2017
US Pension
$    0
 
 45
 

 44
 

 51
 

 48
 
 43
 
 15
UMWA

 0
 
 0
 

 0
 

 0
 

 0
 
 0
 
 0
Black Lung/Other

 7
 
 7
 

 6
 

 6
 

 5
 
 5
 
 5
 Total
$     7
 
 52
 

 50
 

 57
 
53
 
48
 
20
($ millions)
Under-
funding
$306
Note: Amounts based on actuarial assumptions at December 31, 2011.
28