Brink(US:BCO)2021-07-26 16:00Financial Performance - Revenues for the second quarter of 2021 increased by $222.8 million, a 27% increase compared to the same period in 2020, driven by organic growth in North America, Latin America, Europe, and acquisitions [174]. - Operating profit for the second quarter of 2021 was $73.3 million, compared to a loss of $1.0 million in the same quarter of 2020, reflecting a significant recovery [175]. - Non-GAAP operating profit increased by $37.4 million in the second quarter of 2021, primarily due to organic increases in North America, Latin America, and Europe [183]. - Income from continuing operations attributable to Brink's shareholders rose to $24.0 million in Q2 2021, a 75% increase from $13.7 million in Q2 2020 [179]. - Diluted EPS from continuing operations increased to $0.47 in Q2 2021, up from $0.27 in Q2 2020, reflecting improved profitability [179]. - Total revenues for the first half of 2021 increased by $327.7 million, with a 19% increase attributed to acquisitions and organic growth in Latin America and North America [180]. - The company reported a non-GAAP income from continuing operations of $59.5 million for Q2 2021, a 60% increase from $37.3 million in Q2 2020 [183]. - Non-GAAP income from continuing operations attributable to Brink's shareholders increased by $37.5 million to $100.6 million, with earnings per share rising to $1.99 from $1.23 in the first half of 2020 [187]. - Non-GAAP consolidated revenues increased by $327.7 million, driven by acquisitions ($229.0 million) and organic growth in Latin America ($37.9 million), North America ($30.2 million), and Europe ($4.3 million) [186]. - Non-GAAP operating profit rose by $64.4 million, primarily due to organic increases in North America ($47.8 million) and Latin America ($23.9 million) [186]. Revenue Growth by Region - North America revenues increased by 30% ($82.5 million), with a 21% organic increase ($57.7 million) and acquisitions contributing $20.9 million [192]. - Latin America revenues grew by 18% ($42.4 million), with a 16% organic increase ($37.3 million) and currency exchange rate impacts adding $4.0 million [193]. - Europe revenues increased by 37% ($62.9 million), driven by an 18% organic increase ($29.5 million) and favorable currency impacts of $19.3 million [194]. - Rest of World revenues rose by 23% ($35.0 million), primarily due to acquisitions ($22.7 million) and currency exchange rate impacts ($11.8 million) [195]. - Revenues in Latin America increased by 2% ($13.1 million), driven by organic growth of $37.9 million and acquisitions of $6.5 million, partially offset by a currency exchange impact of $31.3 million [202]. - Europe saw a revenue increase of 51% ($151.0 million), primarily due to acquisitions and dispositions ($110.4 million) and favorable currency exchange rates ($36.3 million) [203]. - Revenues in the Rest of World segment increased by 40% ($104.9 million), with acquisitions contributing $89.5 million and currency exchange rates adding $18.8 million [204]. Operating Profit and Expenses - The overall segment operating profit increased by 63% to $280.8 million, with significant contributions from North America and Latin America [198]. - Corporate expenses increased by $47.6 million on an organic basis, impacting overall profitability [186]. - Operating profit in Europe increased by $26.0 million to $29.3 million, with an organic increase of $15.9 million driven by volume recovery in France [203]. - Corporate expenses for the first six months of 2021 increased by $44.4 million compared to the prior year, primarily due to higher bad debt expense of $24.9 million [207]. - The company recognized $6.5 million in pretax charges related to highly inflationary accounting in Argentina during the first six months of 2021 [216]. Cash Flow and Liquidity - Cash flows from operating activities increased by $141.0 million in the first six months of 2021 compared to the same period in 2020 [250]. - Cash used for investing activities decreased by $89.9 million in the first six months of 2021 compared to the first six months of 2020 [250]. - The company financed its liquidity needs in the first six months of 2021 with existing cash and cash flows from long-term debt [250]. - Non-GAAP cash flows from operating activities rose by $136.0 million in the first half of 2021 compared to the same period in 2020, attributed to higher operating profit [254]. - Cash used by investing activities decreased by $89.9 million in the first six months of 2021, primarily due to reduced payments related to the G4S acquisition [257]. - Cash and cash equivalents available for general corporate purposes were $633.9 million as of June 30, 2021, compared to $601.8 million at December 31, 2020 [266]. - As of June 30, 2021, $634 million was available under the Revolving Credit Facility to meet liquidity needs [268]. - The company anticipates being able to fund cash requirements for the next 12 months using existing capital resources, cash on hand, and cash generated from operations, barring any significant economic downturns [270]. Debt and Financing - Net Debt increased by $335 million as of June 30, 2021, primarily to fund business acquisitions and working capital needs [267]. - Total Debt as of June 30, 2021, was $2,852.4 million, compared to $2,485.7 million at December 31, 2020 [266]. - Interest expense increased by 22% to $28.2 million in Q2 2021 compared to $23.2 million in Q2 2020, primarily due to higher borrowing levels from business acquisitions [236]. - Cash flows from financing activities decreased by $465.0 million in the first half of 2021, reflecting a decrease in net borrowings compared to the prior period [263]. Tax and Regulatory Matters - The effective tax rate for Q2 2021 was 45.7%, a significant decrease from 158.8% in Q2 2020, reflecting changes in pre-tax earnings and tax provisions [239]. - The effective non-GAAP tax rate for 2021 is estimated at 32.0%, compared to 31.8% for 2020 [244]. - The American Rescue Plan Act provides funding relief for single-employer defined benefit pension plans, significantly reducing minimum funding requirements [273]. Pension and Retirement Liabilities - The primary U.S. pension plan's funded status is projected to improve from $(151.1) million in the first half of 2021 to $(126.1) million by the second half of 2021 [276]. - The company did not make cash contributions to the primary U.S. pension plan in 2020 or the first half of 2021, with approximately 11,000 beneficiaries in the plan [278]. - Total projected expenses related to U.S. retirement liabilities are expected to decrease from $31.3 million in 2020 to $7.8 million by 2025 [282]. - Payments from Brink's to U.S. retirement plans are projected to be $10.0 million for FY2021, with no contributions to the primary U.S. pension plan [283]. Market Risks - The company operates in over 100 countries, exposing it to various market risks, including interest rate and foreign currency exchange rate fluctuations [286]. - The company has not experienced any material change in market risk exposures in the six months ended June 30, 2021 [286]. - The company operates in over 100 countries, with subsidiaries in 53 countries, exposing it to various international risks including political instability and economic conditions [220].