Brink(US:BCO)2025-02-26 21:18Financial Performance - Revenues for 2024 increased by $137.3 million to $5,011.9 million, representing a 3% growth compared to 2023, driven by organic increases in Latin America, Europe, North America, and Rest of World segments [159]. - Operating profit for 2024 rose to $453.0 million, a 7% increase from $425.2 million in 2023, with an operating profit margin improving from 8.7% to 9.0% [159]. - Non-GAAP operating profit increased by $14.4 million to $629.4 million, maintaining a non-GAAP operating profit margin of 12.6% [167]. - Income from continuing operations attributable to Brink's shareholders increased by $75.8 million to $161.8 million, with diluted EPS from continuing operations rising to $3.61, up from $1.83 in 2023 [163]. - Adjusted EBITDA for 2024 increased by 5% to $911.9 million, primarily due to the increase in non-GAAP operating profit [168]. - Non-GAAP operating profit for 2024 was $629.4 million, up from $615.0 million in 2023, reflecting a year-over-year increase of 2.3% [230]. - Non-GAAP diluted earnings per share (EPS) from continuing operations attributable to Brink's common shareholders for 2024 was $321.4 million, compared to $344.6 million in 2023, indicating a decrease of 6.3% [233]. - Adjusted EBITDA for 2024 reached $911.9 million, an increase from $867.2 million in 2023, representing a growth of 5.2% [233]. - GAAP pre-tax income for 2024 was $266.3 million, with an effective income tax rate of 34.8% [230]. Revenue Breakdown - Revenues in Latin America saw a significant organic increase of $461.8 million, while the unfavorable impact of currency exchange rates was $487.8 million, primarily due to the Argentine peso [162]. - North America segment revenues increased by 3% to $1,649.7 million, while Latin America segment revenues decreased by 2% to $1,311.0 million due to currency impacts [170]. - Revenues in North America increased by 3% ($48.6 million), driven by a 2% organic increase ($36.6 million) and acquisitions contributing $13.9 million, despite a $1.9 million negative impact from currency exchange rates [174]. - Latin America experienced a revenue decrease of 2% ($21.3 million), primarily due to unfavorable currency exchange rates ($485.3 million), offset by a significant 35% organic increase ($461.8 million) [176]. - Europe saw an 8% revenue increase ($90.6 million), with a 7% organic increase ($82.3 million) and acquisitions adding $7.6 million, mainly due to price increases and growth in AMS and DRS revenue [178]. - The Rest of World segment reported a 2% revenue increase ($19.4 million), attributed to a 3% organic increase ($20.7 million) driven by AMS and DRS growth [180]. Expenses and Costs - Selling, general and administrative expenses rose by 21.3% to $834.5 million, mainly due to organic increases in labor and administrative costs [162]. - The corporate expenses increased by 3% to $(143.4) million, reflecting higher costs on an organic basis [170]. - Corporate expenses rose by $3.8 million in 2024, primarily due to higher net compensation costs, including share-based compensation and bonus accruals [184]. - The company recognized $35.0 million in pretax charges related to Argentina's highly inflationary accounting in 2024, including currency remeasurement losses of $18.4 million [195]. - Transformation initiatives incurred $28.4 million in expenses in 2024, aimed at accelerating growth and driving margin expansion through business model transformation [196]. - The company accrued $45.7 million in connection with DOJ and FinCEN investigations in 2024, primarily related to compliance issues [197]. Cash Flow and Capital Expenditures - Cash flows from operating activities decreased by $276.4 million in 2024, totaling $426.0 million, primarily due to changes in customer obligations and higher tax and interest payments [247][249]. - Capital expenditures increased to $222.5 million in 2024 from $202.7 million in 2023, reflecting ongoing investments in business infrastructure [251]. - The company reported a free cash flow before dividends of $399.9 million in 2024, which was relatively flat compared to $400.1 million in 2023 [251]. - Cash used in investing activities increased by $36.4 million in 2024, totaling $216.2 million, primarily due to higher capital expenditures and acquisitions [253]. - Cash flows from financing activities improved by $249.3 million in 2024, resulting in net cash provided of $42.2 million compared to net cash used of $207.1 million in 2023 [260]. Debt and Financing - Total debt as of December 31, 2024, was $3,896.2 million, an increase of $364.9 million from $3,531.3 million in 2023 [265]. - Debt as a percentage of capitalization rose to 93% in 2024, up from 87% in 2023 [263]. - The company had $600 million available under its Revolving Credit Facility as of December 31, 2024 [270]. - The company financed its liquidity needs in 2024 through debt and cash flows from operations, highlighting a reliance on external financing [247]. Shareholder Returns - The company repurchased $203.6 million in common stock in 2024, an increase of $33.7 million from $169.9 million in 2023 [260]. - Dividends paid to shareholders increased to $41.8 million in 2024, up from $39.6 million in 2023, reflecting a dividend of $0.9475 per share [261]. - The company authorized a $500 million share repurchase program in November 2023, set to expire on December 31, 2025 [276]. Tax and Compliance - The effective income tax rate on continuing operations in 2024 was 34.8%, significantly higher than the U.S. statutory rate of 21% due to geographical earnings mix and nondeductible expenses [211]. - Non-GAAP effective income tax rate for 2024 was 23.2%, down from 24.8% in 2023 [230]. - The company agreed to pay a total of $42 million to resolve investigations related to anti-money laundering compliance, with payments starting in January 2025 [295]. Pension and Employee Benefits - The primary U.S. pension plan's ending funded status is projected to improve from $(10.9) million in 2024 to $49.0 million by 2029 [282]. - The company does not expect to make contributions to the primary U.S. pension plan until 2027, based on current assumptions [284]. - The expected-return-on-assets assumption for the primary U.S. pension plan is set at 7.00% for both actual 2024 and projected 2025 expenses, while the UMWA retiree medical plans are set at 8.00% for the same periods [333].