The Brink's Company Q2 FY2025 earnings call

• Brink's delivered strong organic revenue growth in all segments, with 5% total company organic growth including 16% growth in AMS/DRS and 5% growth in North America.
• Record Q2 EBITDA and operating profits driven by strong productivity, revenue mix benefits, and good pricing discipline; Q2 EBITDA margins were 17.8% and operating margins were 12.6%.
• AMS/DRS growth was evident in both North America and Europe, with record second quarter EBITDA margins. Growth in AMS/DRS is expected to accelerate in the second half of the year.
• Strategic investment in KAL to advance AMS capabilities; KAL is a leading ATM software provider.
• DRS had record global device installations, with continued scaling and investment in commercial capabilities to penetrate untapped markets.
• Market expansion potential into AMS and DRS, with total addressable market estimated to increase 2x to 3x traditional market if certain conditions are met.

The Brink's Company had two main segments: Cash and Valuables Management (CVM) and ATM Managed Services/Digital Retail Solutions (AMS/DRS). For CVM, organic growth was stable sequentially with 1% year-over-year growth, impacted by conversion of traditional ATM/CIT customers to AMS/DRS; global services supported CVM growth due to high precious metals demand. AMS/DRS had organic growth of 16%, in line with expectations, with growth impacted by a one-time equipment sale from the prior year. North America saw record growth with new AMS customers and DRS device installations.

• Full year revenue increased by about $75 million and EBITDA by about $20 million from first quarter expectations due to strong first half performance.
• Margin expansion expected between 30 and 50 basis points, free cash flow conversion between 40% and 45%, and shareholder returns of over 50% of free cash flow.
• Third quarter revenue expected at midpoint of $1.33 billion, reflecting mid-single digit organic growth; adjusted EBITDA between $240 million and $260 million; EPS between $1.85 and $2.25.

Q: How did the second quarter results compare to guidance, and what were the key factors contributing to strong performance?

A: Total reported revenue growth of 4% exceeded guidance. Key factors included strong organic growth, DRS/AMS mix, productivity improvements, and less reliance on external factors like FX. Restructuring executed as planned, and organic performance was strong.

Q: Can you discuss internal initiatives to push customers into AMS and DRS?

A: AMS is more of a pull as customers are attracted by more services; DRS growth includes new unvended customers and conversion of CIT customers. Sales force focused on communicating value proposition, and it's a pull versus push approach.

Q: How do you expect the DRS and AMS businesses to accelerate in the second half, and are there differences in growth trajectories?

A: Acceleration is expected to be similar to Q1 trajectory. Growth rates for AMS and DRS are expected to be balanced mid- to high teens in the midterm, with no reason to think growth rates would differ between the two.