Welcome to The Brink's Company's Fourth Quarter 2020 Earnings Call. Brink's issued a press release on fourth quarter results this morning. The company also filed an 8-K that includes the release and the slides that will be used in today's call. For those of you listening by phone, the release and slides are available in the Investor Relations section of the Company's website brinks.com. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. [Operator Instructions] Now, for the Company's Safe Harbor statements. This call and the Q&A Session will contain forward-looking statements. Actual results could differ materially from projected or estimated results. Information regarding factors that could cause such differences is available in today's press release and in the Company's most recent SEC filings. Information presented and discussed on this call is representative as of today only. Brink's assumes no obligation to update any forward-looking statements. The call is copyrighted and may not be used without written permission from Brink's. It is now my pleasure to introduce your host, Ed Cunningham, Vice President of Investor Relations and Corporate Communications. Mr. Cunningham, you may begin.

Thanks, Andrew. Good morning, everyone. Joining me today are CEO, Doug Pertz; and CFO, Ron Domanico. This morning, we reported fourth quarter results on both a GAAP and a non-GAAP basis. The non-GAAP results exclude a number of items, including our Venezuela operations, the impact of Argentina's highly inflationary accounting, reorg and restructuring costs, items related to acquisitions and dispositions, costs related to an internal loss and costs related to certain accounting compliance matters. We are also providing our results on a constant currency which eliminates changes in foreign currency exchange rates from the prior year. We believe the non-GAAP results make it easier for investors to assess operating performance between periods. Accordingly, our comments today will focus primarily on non-GAAP results. Reconciliations are provided in the press release, and the appendix to the slides we're using today and in this morning’s 8-K filing, all of which can be found on our website. I'll now turn the call over to Doug Pertz.

Thanks, Ed. Good morning, everyone, and thanks for joining us today. Before we review our strong fourth quarter results, and increased guidance, I want to stress how proud I am of our employees around the world. Their dedication, focus on health and safety, and outstanding execution under pandemic conditions has been nothing short of remarkable. Despite unprecedented challenges, they have continued to provide the essential high quality services that makes Brink’s the clear leader in the cash management business globally. In response to the pandemic, our more than 76,000 global employees have been focused on our key priorities of providing essential services and ensuring that Brink’s emerges stronger on the other side of this pandemic. Our leadership and global team have also remained focused on strategic execution including the completion and integration of the large and very complex acquisition of G4S cash operations in 17 markets. Our fourth quarter results clearly demonstrates that in addition to proactively addressing the pandemic’s impacts on our employees, our customers, our families and our business, we’ve not lost sight of our strategic priorities. By any means, our fourth quarter results I think are outstanding. Reported revenue was up 9%, driven by sequentially improving organic revenue growth since the onset of the pandemic and the G4S acquisition. Operating profit was up 26%, reflecting a margin rate of 14.2%, an increase of 140 basis – excuse me, 180 basis points with strong support from the U.S. business which achieved a margin rate of 15%. Adjusted EBITDA increased 25% to $194 million, which was 19% of revenue and EPS grew 39% to $1.64 per share. These results primarily reflect the impact of our 2020 cost reductions and business restructuring, which yielded significant margin improvements. These sustainable cost reductions are expected to drive continued earnings leverage in 2021…

Thanks, Doug, and good day, everyone. I am honored and excited to lead Brink’s sustainability program reporting directly to the Brink’s Board, which is determined to retain oversight responsibility for this important work. We haven’t publicly shared our many initiatives that’s positively impacting environment or society that’s beginning to change and you’ll begin to see ESG information in our annual disclosures and on our website. But beyond disclosure, we are committed to improve sustainability by investing in new initiatives. The bottom of this slide indicates some of the progress that we’ve made. I look forward to sharing more details about Brink’s sustainability program in the future. Moving now to a review of our financial results and guidance. Before I go into details, please remember that we disclose acquisitions separately for the first twelve months of ownership, at which time they are mostly integrated and then, they are included in organic results. Please refer to Slide 29 in the Appendix for the timing of specific acquisitions. Slide 9 is a snapshot of four metrics that I will review in more detail on the following slides, revenue, operating profit, adjusted EBITDA and EPS. This is a format that we’ve used repeatedly and is included here for reference. Turning to Slide 10. 2020 fourth quarter revenue in constant currency was up 13% as the pandemic-related 7% organic decline was more than offset by a 19% contribution from acquisitions. Negative ForEx reduced revenue by $32 million or 3%, driven primarily by a stronger U.S. dollar versus currencies in Latin America, partially offset by a stronger Euro. Sequentially, on average, exchange rates improved slightly during the fourth quarter. Reported revenue was $1.22 billion, up 9% versus the fourth quarter last year. Fourth quarter operating profit was up 29% in constant currency with organic growth contributing…

Thanks, Ron. Let me turn to Slide 19, which summarizes our strategic plan 2 or we call SP2 which builds on our proven initiatives executed in SP1. What’s new about SP2 is the addition of our Strategy 2.0, the development and introduction of digital cash management solutions through an integrated platform of services, technology and devices leveraging our core CIT and money processing capabilities and assets. Our original 1.0 initiative which are now called 1.0 Wider and Deeper or WD, which stands for wider and deeper obviously, originally, these initiatives were added - which added $100 million of operating profit during our SP1 timeframe in 2017 through 2019 we are heavily focused on our U.S. and Mexico improvements. We are now expanding them to 30 plus additional countries and we are targeting another $70 million of cost reductions from our 1.0 Wider and Deeper initiatives over the 2021 and 2022 timeframe. We plan to achieve these savings through the implementation of more than 18 initiatives such as route optimization, fleet savings, investment in high speed money processing equipment, and many other proven initiatives globally. These initiatives supported by – are supported by dedicated regional 1.0 Wider and Deeper EBM experts and they will also help to drive additional operating leverage and profitability as our revenues continue to grow. Our 1.5 initiatives include the recent addition of the G4S Cash operations in 17 markets including very desirable cash intensive markets in the Eastern Europe and in Asia. We are confident that these new markets will support continued acceleration of organic growth and provide an expanded platform of over 50 countries to drive our new strategies. We’ll continue to identify and evaluate additional acquisitions that drive top and bottom-line growth while enhancing free cash flow generation. I want to point though even…

[Operator Instructions] The first question comes from Tobey Sommer of Truist Securities. Please go ahead.

Thank you. I was wondering if you could give us some color on progress in Brink’s Completes and maybe as part of your answer, could you delineate it between new customers and potential migrations from the CompuSafe towards the Brink’s Complete? Thank you.

Thanks, Tobey and good morning. Thanks for your question. As we laid out, you can see that there is a substantial number of customers over 500, 550 I think we said on the chart and that is well as a target number of pilot customers or customers that are these large opportunity customers. Our strategy is to go after both existing CIT customers and convert to what we think is better value for them and frankly, for us down the road as well, as we’ve suggested with the benefits. And that’s why you see such a high number of customers. In other words, we think 500 plus customers, 550 customers is a fair number of customers which means it’s converting existing customers over. So, one of our targets is to convert CIT. And the second big focus is to be able to prove to with pilots customers that either are relatively unvended, in other words only have a small portion of their total cash management needs serve us today by us or the industry or totally unvended and walk everything to the bank, their cash to the bank and that’s represented by those seven plus large strategic accounts then in general have more than a thousand plus locations each and are now in the process of just starting to roll out test cases with them. So, that’s our real focus. And as I said, it’s been slowed a little bit by the pandemic, which is unfortunate, but we are now starting to see the focus on both of those things that we think will give us a base going forward.

And then, as a follow-up, could I ask, how the development is internally of the appropriate sales channels that you feel you will need to sell the products into new and existing customers? Thanks.

Well, that’s where part of the difference is between 2.1 and 2.4. 2.1 is primarily selling it through existing sales channels. In other words, the way that we go to market today is our 2.1 Brink’s Complete strategy. We will be looking at expanding those as part of the 2.4 strategy expanding those go to market strategies and therefore the channels as part of our next level of rolling that out. Our biggest and our first focus has been to again, go to existing CIT customers, existing customers that we service or are serviced by our competition today, as well as the underserved targets that we are focusing on. So, you’ll see more of that, Tobey, as we go throughout the latter part of this year and we’ve given a glimpse of that with the 2.4.

I appreciate it.

Thanks, Tobey.

The next question comes from Sam England of Berenberg. Please go ahead.

Hi guys. Thanks for taking the questions. And the first one, you are guiding towards another 200 basis points of increase in the operating margin in 2021. I just wonder how much of that is expected to be driven by operating leverage on a revenue recovery versus further restructuring and cost saving?

Well, if you take a look, Sam, at our guidance and the range of the revenue, you can see that our margin percentage at various revenue levels goes up. And that’s really the leverage. So at the lower end of the range, we are talking about 10.6% or so. At the midpoint we are talking - I am sorry, at 11%, excuse me and at the midpoint 11.5%. So you can see the leverage as it goes back up when you get to approximately put this a little over 100% to 2019, we are talking about a 12 plus percent margin. And that’s what the 150 basis points – 140 plus basis points higher of a 2019 base. So it’s a combination of both improved margin step change, improvement in the margin percentage along the curve plus the – or the leverage on top of that. So we expect both. Not all revenue recovery is the same. FX will not present if it’s a recovery just because of FX rate changes and which – this is a constant currency guidance. That’s not the same as organic. Organic flow through gives us the best improvement in leverage in margins. So, we expect both and that’s where we are showing it in our numbers. Be glad to talk a bit more about them in detail.

Okay. Great. Thanks. And then, one sort of longer term question is, well, can you talk a bit about the opportunity to follow the strategy initiatives across the acquired G4S businesses. Now you got a bit of a better chance to take a look at those acquisitions and are there any surprises arising from, now you’ve completed those deals and how to look at the businesses?

Yes, I think, Tobey, we’ve been – excuse me, Sam, we’ve been pleasantly surprised about the strength of the management teams, the desire to be focused primarily on the cash business which we clearly are and the excitement around that in helping develop strategies that will be helping to roll out our new strategies and provide a better solution for customers going forward. So, I think we’ve got a great platform. The addition of 14 new locations – new markets, 17 in total, but we had some overlap in those on top of those that we already had give us those 50 plus new markets that we can roll this out as we start gaining steam in terms of that roll out process. So, I think it’s very good. And I think what you saw during this year, even during the pandemic that the G4S management team is similar to the, if you will, legacy Brink’s teams, we are very focused on our key priorities, the primary one of those was obviously making sure that our employees are safe and healthy, but our third priority was to assure that we were stronger on the other side through the restructurings, the sustainable fixed cost reductions, which gave us a very strong third and fourth quarter. Fourth quarter results are a good example of that. And it was very encouraging to see the G4S teams really jump onboard there as well, willing to do restructurings, willing to assure that we are focused for that in the future and that bodes well for a combined business that’s not going to be a G4S or a Brink’s in the future. It’s going to be combined, very strong.

Okay. Great. Thank you.

Yes.

[Operator Instructions] The next question comes from Jeff Kessler of Imperial Capital. Please go ahead.

Thank you and congrats on the quarter and also the guidance looks good. The increase – the recently increasing prices in balance and silver, I am wondering if that has had any effect yet on your high end worldwide global business?

Well, Jeff, I don’t really know precisely about whether we can tie it to that. But I think what we will see this year, the depressed business or the lower business that we saw, particularly in the diamond jewelry business on a global basis during the pandemic has started to come back and I think we’ll come back pretty back nicely in 2021 especially in the second half of next year. We saw a very strong business in certain key precious metals, particularly gold last year. That will continue we think at least for the first part of this year depending on where the ups and downs of the business are. And so, that should be good. We think that actually the shipment of cash slowed down some last year externally outside of the U.S. as we reported a significant increase in cash in circulation in the U.S. but actually shipments externally outside the U.S. Internationally, we are down some. We think that will start to pick up yet again. So I think there is going to be a combination of things and I think what you are seeing and suggesting that’s one indication that our diamond jewelry and part of the other precious metals business other than just gold will continue to pick up this year and we’ll see, I think strong improvement in demand in those portions of our BGS business and our combined melt business that is over a strong global business.

Secondly, it’s interesting that you are looking at your competition who did not have as good a fourth quarter performance as you nor have talked about 2021 in as brighter terms as you and looking out at what they might want to get their hands on, they’ve announced this morning or yesterday afternoon basically the closing of the elections so to speak, of the G4S acquisition by Allied Universal. And Allied Universal is primarily a – it’s a card and somewhat of – with some electronic security attached to it, but it has no real DNA in cash management. That cash management business that cash recycling business is still there. I am not saying that you are going to issue and get it, but obviously you may have some completion who would that business or have you thought about strategically what you would want to do or would not want to do as they begin to integrate that begin to – Allied begins to integrate that – the G4S business into their own business?

Well, I think, Jeff, a couple things on that. We actually didn’t say anything in our prepared remarks or in our script or in our slides about competition. So, I am not sure we were comparing those your comparisons.

Those – that’s me.

Okay. So I just want to be clear on that we are not comparing what we are doing and how we are going. We are very comfortable and excited about the future based on the cost reductions we have made and then we do think we had great third quarter, fourth quarter and that fourth quarter gives us the basis for a step change in our cost structure that we think is sustainable going forward. And we think on top of that, we will continue to improve like we said in our wider deeper with additional cost reductions going forward on top of that and we’ll continue to get the leverage as we talked about earlier with Sam and other question with leverage as revenue recovers to the 2019 levels and beyond. Now, with that said, part of our 2.0 strategy, layering on top of this that’s heavily is not in our numbers. It is around some of the things that you are now talking about. We have a plan part of what we call 2.2 is related to recyclers and the larger – how do we manage the complete managed services, solution for enterprise-wide customers that have a lot of cash going through big box stores and so forth. And so, that is part of our strategy. We are going to be looking at both organic and external ways to do that as we always do. There are several pieces that are left in the G4S group that are cash related including the UK cash business, South African cash business, as well as the Retail Cash Solutions business in the U.S. And we’ll be taking a look at that and see what the – what might be appropriate if something becomes available. But we certainly have a strategy on that, which is part of our 2.0 and we are going to continue to drive that just as we are doing with our 2.3 strategy as well.

Great. Thank you very much.

Thank you.

Thanks, Jeff.

This concludes our Question-And-Answer Session and the Brink’s Company’s fourth quarter 2020 earnings call. Thank you for attending today’s presentation. You may now disconnect.