BRINKS CO - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 5, 2013

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 The Brink’s Company
Investor Overview
 NYSE:BCO
 February 6, 2013
 
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 February 1, 2013, and in our filings
with the Securities and Exchange Commission, including our most recent forms
10-K and 10-Q. Unless otherwise noted herein, 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
 ¢ 2012 Revenue $3.8 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
2012 Revenue
($3.8 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
 ¢ Payment Processing
 ¢ Brink’s Money Payroll Card
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 ATM Services
 ¢ Adjacencies:
 Payment Processing
 Brink’s Money Payroll Card
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
 
 
 
EMEA: Improve Operating Performance
9
 
 
 
2012 Revenue: $945M
Region Overview:
¢ Market leader
¢ 2012: Organic revenue down… 4.4% margin
¢ Volume and price 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
10
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
¢ 2012: 15% organic growth
Strategy:
¢ Strengthen and expand footprint
¢ Leverage footprint to grow High-Value Services
¢ Mexico: Increase CIT margins, add High-Value Services
2012 Revenue: $1.6B
Latin America: Continued Strong Growth
11
 
 
 
2012 Revenue: $159M
Region Overview:
¢ High-growth, service-driven economies
¢ Varying degrees of banking sophistication, gov’t restrictions
¢ 2012: 7% organic revenue growth
Strategy:
¢ Leverage Global Services network
¢ Accelerate China and India growth
¢ Expand commercial security capabilities
Asia Pacific: Invest and Grow
12
 
 
 
Financial Strength and Flexibility
n Solid Revenue Growth
 n High single-digit organic growth
n Cash Flow Supports Continued Growth
  n ~50% of Capex focused on Emerging 
               Markets and High-Value Services (’10 - ’12)
n Strong Balance Sheet
 n Investment grade credit rating
 n $232 million net debt; $475 million available
 debt capacity (12/31/12)
 n Manageable cash outflow for legacy
 liabilities (see appendix page 26)
13
Note: Net debt is a Non-GAAP measure.  
 See appendix for reconciliation to GAAP.
 
 
 
14
¢ 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
14
 
 
 
Appendix
 
 
 
Appendix
   
Page
 3-Year Non-GAAP Revenue Growth..........................................................................17
 3-Year Non-GAAP Operating Profit...........................................................................18
 Summary of 2012 Revenue and Segment Margin Outlook......................................19
 Reconciliation to Amounts Reported under GAAP..................................................20
 2012 Segment Results, GAAP and non-GAAP...........................................................23
 Legacy Liabilities.........................................................................................................26
16
 
 
 
Non-GAAP Revenue (1)
($MM)
(1)  Non-GAAP financial information is reconciled to amounts reported under U.S. GAAP on pages 20, 21 & 22.
 Non-GAAP Revenue Growth
17
 
 
 
Total Non-GAAP Operating Profit (1)
($MM)
Segment
244
267
268
Non-Segment
(36)
(41)
(42)
Total
207
227
226
(1)  Non-GAAP financial information is reconciled to amounts reported under U.S. GAAP on pages 20, 21 & 22.
 Non-GAAP Profit Growth
Amounts may not add due to rounding
18
 
 
 
Summary of 2013 Revenue and Segment Margin Outlook (1)
19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012 
 
Estimate
 
 
 
2012 
 
Estimate
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
11 %
 
7 % - 9 %
 
 
 
11 %
 
7 % - 9 %
 
 
 
 
 
 
 
 
 
 
(2)%
 
 
 
 
Total
 
 
7 %
 
5 % - 8 %
 
 
 
7 %
 
5 % - 8 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
(7) %
 
(2) % - (4) %
 
 
 
  (7) %
 
(2) % - (4) %
 
North America
 
 
flat
 
flat
 
 
 
flat
 
flat
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment margin
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
7 %
 
6.0 % - 6.5 %
 
 
 
7.8 %
 
7.0 % - 7.5 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) As of February 1, 2013
 
 
 
Non-GAAP Results - Reconciled to Amounts Reported under GAAP
 
20
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
•   excluding retirement expenses related to frozen retirement plans and retirement plans from former operations, and
•   without certain income and expense items described below in 2010, 2011 and 2012.
 
The non-GAAP information provides information to assist comparability and estimates of future performance. We believe these measures are helpful in assessing the
performance of our ongoing operations, estimating future results and enabling period-to-period comparability of financial performance. The valuation impact of our legacy
liabilities and related cash outflows can be assessed on a basis that is separate and distinct from ongoing operations. Non-GAAP results should not be considered as an
alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts.
 
(a)   To eliminate results of additional European operations we intend to exit in 2013. Operations do not currently meet requirements to be classified as discontinued operations.
(b)   To eliminate gains on acquisitions and dispositions as follows:
 
 
 
2012
 
2011
 
2010
 
 
Sale of real estate in Venezuela
$
(7)
 
- 
 
-
 
 
Sale of U.S. Document Destruction business
 
-
 
(7)
 
- 
 
 
Bargain Purchase of Mexican CIT business
 
-
 
(2)
 
(5) 
 
 
Impairment of Cost Method Investment-Mexico
 
-
 
-
 
14 
 
 
Other gains/losses on acquisitions/dispositions-
Segment
 
(2)
 
-
 
- 
 
 
Other gains/losses on acquisitions/dispositions-
NonSegment
 
(1)
 
-
 
- 
 
 
Selling costs related to acquisitions/dispositions
 
1
 
-
 
- 
 
 
Sale of former operating assets
 
- 
 
(1)
 
-
 
 
 
$
(9)
 
(10)
 
9
 
 
(c)   To eliminate employee benefit settlement and acquisition-related severance losses (Mexico and Argentina). Employee termination benefits in Mexico are accounted for
       under FASB ASC Topic 715, Compensation - Retirement Benefits.
(d)   To eliminate the costs related to the retirement of the former chief executive officer.
(e)   To eliminate expenses related to U.S. retirement plans.
(f)    To reverse remeasurement gains and losses in Venezuela. For accounting purposes, Venezuela is considered a highly inflationary economy. Under U.S. GAAP,
        subsidiaries that operate in Venezuela record gains and losses in earnings for the remeasurement of bolivar fuerte-denominated net monetary assets.
(g)   To eliminate royalty income from former home security business.
 
 
 
See page 20 for explanation of footnotes
Reconciliation
Amounts may not add due to rounding
Non-GAAP Results - Reconciled to Amounts Reported under GAAP (Cont.)
21
 
 
 
(In millions)
 
2012
  
2011
  
2010
  
Non-Segment
 
 
 
 
 
 
 
Reported GAAP Basis
$
(89)
 
(60)
 
(63)
 
Adjustments:
 
 
 
 
 
 
 
 Gains & Losses on Acquisitions and Asset Dispositions (b)
 
(1)
 
(10)
 
9
 
 CEO Retirement cost (d)
 
-
 
4
 
-
 
 U.S. Retirement Plans (e)
 
47
 
25
 
23
 
 Royalty from BHS (g)
 
-
 
-
 
(5)
 
Non-GAAP Basis
$
(42)
 
(41)
 
(36)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operating Profit
 
 
 
 
 
 
 
Reported GAAP Basis
$
171
 
200
 
177
 
Adjustments:
 
 
 
 
 
 
 
 Additional European Operations to be Exited (a)
 
4
 
3
 
2
 
 Gains & Losses on Acquisitions and Asset Dispositions (b)
 
(9)
 
(10)
 
9
 
 Employee Benefit Settlement & Severance Losses (c)
 
4
 
2
 
-
 
 CEO Retirement Cost(d)
 
-
 
4
 
-
 
 U.S. Retirement Plans (e)
 
56
 
28
 
22
 
 Remeasure Venezuela Net Monetary Assets (f)
 
-
 
-
 
3
 
 Royalty from BHS (g)
 
-
 
-
 
(5)
 
Non-GAAP Basis
$
226
 
227
 
207
 
 
 
 
 
 
 
 
 
See page 20 for explanation of footnotes
Reconciliation
Amounts may not add due to rounding
Non-GAAP Results - Reconciled to Amounts Reported under GAAP (Cont.)
22
 
 
 
 Net Debt
 
 
December 31,
 
December 31,
 
 
2012
 
2011
Debt:
 
 
 
 
 Short-term
$
 26.7
 
 25.4
 Long-term
 
 362.6
 
 364.0
 Total Debt
 
 389.3
 
 389.4
 
 
 
 
 
 Cash and cash equivalents
 
 201.7
 
 182.9
 Less amounts held by cash logistics operations (a)
 
 (44.0)
 
 (25.1)
  Cash and Cash equivalents available for general corporate purposes
 
 157.7
 
 157.8
 
 
 
 
 
 Net Debt
$
 231.6
 
 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 $280 million at December 31, 2012, and $242 million at December 31, 2011.
NET DEBT RECONCILED TO AMOUNTS REPORTED UNDER GAAP
(in millions)
23
 
 
 
 2012 Segment Results, GAAP
 
 
 
 
 
 
 
 
 
Organic
 
Acquisitions/
 
 Currency
 
 
 
 
 
 
 
 
2011
 
Change
 
Dispositions (b)
 
(c)
 
2012
 
Total
 
Organic
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 EMEA
$
 1,461
 
 215
 
 2
 
 (98)
 
1,579
 
 8%
 
 15%
 Latin America
 
 1,178
 
 70
 
 -
 
 (90)
 
1,158
 
(2)%
 
 6%
 Asia Pacific
 
 154
 
 10
 
 -
 
 (5)
 
159
 
 3%
 
 7%
 International
 
 2,792
 
 296
 
 2
 
 (193)
 
2,897
 
 4%
 
 11%
 North America
 
 974
 
 (24)
 
 (3)
 
 (3)
 
945
 
(3)%
 
 (2)%
  Total
$
 3,766
 
 272
 
 (1)
 
 (196)
 
3,842
 
 2%
 
 7%
Operating profit:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 International
$
 288
 
 17
 
 (2)
 
 (15)
 
228
 
 -
 
 7%
 North America
 
 31
 
 1
 
 -
 
 -
 
33
 
     4%
 
 3%
 Segment operating profit
 
 259
 
 18
 
 (2)
 
 (15)
 
260
 
  -
 
 7%
 Non-segment (a)
 
 (60)
 
 (21)
 
 (8)
 
 -
 
(89)
 
  49%
 
 35%
 Total
$
 200
 
 (3)
 
 (11)
 
 (15)
 
171
 
(14)%
 
 (1)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 8.2%
 
 
 
 
 
 
 
 7.9%
 
 
 
 
North America
 
 3.2%
 
 
 
 
 
 
 
 3.4%
 
 
 
 
Segment operating margin
 
 6.9%
 
 
 
 
 
 
 
 6.8%
 
 
 
 
Full Year 2012 vs. 2011
(In millions)
Segment Results - GAAP
See footnotes on page 25.
24
Amounts may not add due to rounding
 
 
 
 2012 Segment Results, non-GAAP
 
 
 
 
 
(In millions)
 
 
 
Organic
 
Acquisitions/
 
 Currency
 
 
 
 
 
 
 
 
2011
 
Change
 
Dispositions (b)
 
(c)
 
2012
 
Total
 
Organic
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 EMEA
$
 1,461
 
 215
 
 2
 
 (98)
 
 1,579
 
 8%
 
 15%
 Latin America
 
 1,167
 
 71
 
 -
 
 (89)
 
 1,149
 
 (2)%
 
 6%
 Asia Pacific
 
 154
 
 10
 
 -
 
 (5)
 
 159
 
 3%
 
 7%
 International
 
 2,781
 
 296
 
 2
 
 (192)
 
 2,888
 
 4%
 
 11%
 North America
 
 974
 
 (24)
 
 (3)
 
 (3)
 
 945
 
 (3)%
 
 (2)%
  Total
$
 3,756
 
 273
 
 (1)
 
 (194)
 
 3,833
 
 2%
 
 7%
Operating profit:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 International
$
 233
 
 8
 
 1
 
 (15)
 
 227
 
 (3)%
 
 4%
 North America
 
 35
 
 7
 
 -
 
 -
 
 41
 
 19%
 
 19%
 Segment operating profit
 
 267
 
 15
 
 1
 
 (15)
 
 268
 
 -
 
 6%
 Non-segment (a)
 
 (41)
 
 (2)
 
 -
 
 -
 
 (42)
 
 4%
 
 4%
 Total
$
 227
 
 13
 
 1
 
 (15)
 
 226
 
 -
 
 6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 8.4%
 
 
 
 
 
 
 
 7.8%
 
 
 
 
North America
 
 3.6%
 
 
 
 
 
 
 
 4.4%
 
 
 
 
Segment operating margin
 
 7.1%
 
 
 
 
 
 
 
 7.0%
 
 
 
 
(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
25
 
 
 
 Legacy Liabilities
 
Estimated Contributions to U.S. Plans
 
 
 
2012A
  
2013
  
2014
  
2015
  
2016
  
2017
    
 
US Pension
$ 37
 
 14
 
 29
 
 42
 
 44
 
 38
 
 
 
UMWA
 0
 
 0
 
 0
 
 0
 
 0
 
 0
 
 
 
Black Lung/Other
 7
 
 5
 
 5
 
 5
 
 4
 
 4
 
 
 
 Total
$ 44
 
 19
 
 34
 
 47
 
 48
 
 42
 
 
($ millions)
$275
Under-
funding
Note: Above amounts based on actuarial assumptions at December 31, 2012.
26
 
 
 

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