Brink(BCO)2025-05-12 21:30Financial Data and Key Metrics Changes - Brink's reported total organic growth of 6% in Q1, at the top end of previous guidance [6] - Adjusted EBITDA was $215 million with a margin of 17.2%, exceeding the high end of Q1 guidance [7] - Earnings per share (EPS) was $1.62, reflecting benefits from share repurchases and a planned increase in the tax rate [7] - Free cash flow conversion was 40%, highlighting progress on accounts receivable collections [7][11] Business Line Data and Key Metrics Changes - ATM Managed Services and Digital Retail Solutions (AMS DRS) grew over 20% for the fourth consecutive quarter, now representing a quarter of total business [6][8] - Cash and Valuables Management (CVM) grew 1% organically, with strong performance in Global Services [18] - Global Services revenue increased due to elevated precious metal movement, particularly in the Rest of World segment [8][17] Market Data and Key Metrics Changes - North America saw constant currency growth of 4% and organic growth of 2%, with DRS growth highlighted by new customer onboarding [14] - Latin America experienced 7% organic growth, but was negatively impacted by currency devaluation, particularly in Mexico and Argentina [15] - Europe grew revenue by 5% organically, with AMS DRS mix increasing to 42% of total revenue [16] Company Strategy and Development Direction - The company continues to focus on maximizing growth potential in AMS DRS, expanding margins, and executing a focused capital allocation framework [7][11] - Share repurchases and dividend increases are part of the capital allocation strategy, with remaining repurchase capacity of over $180 million [10][32] - The company is well-positioned to capture elevated demand and is exploring accretive M&A opportunities [9][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertain macroeconomic conditions, citing a diversified global footprint and strong customer relationships [25][26] - The outlook for the second quarter includes expectations for continued mid-single-digit organic growth and EBITDA between $200 million and $225 million [11][37] - Management remains cautious about the Global Services business due to slowing growth in early Q2 but is optimistic about capturing future opportunities [20][38] Other Important Information - The company repurchased 1.3 million shares at an average price of $87.62, representing about 3% of outstanding shares at year-end 2024 [9][10] - Adjusted EBITDA margins were down 50 basis points year-over-year, impacted by regional revenue mix and less interest income from Argentina [28] Q&A Session Summary Question: Can you talk about your tariff exposure? - Management indicated minimal direct exposure to tariffs, as most costs and revenues are in the same currency and services are not heavily imported [41][42] Question: Can you discuss pricing trends in Latin America? - Management confirmed that pricing strategies are in place to offset currency devaluations, particularly in highly inflationary markets like Argentina [44][45] Question: What are the drivers for the second quarter margin guidance? - Key drivers include FX impacts, Argentina interest income, and restructuring actions, with expectations for improved margins in the second half of the year [51][52][56] Question: How do you expect AMS DRS growth to perform in a softer macro environment? - Management noted that the larger addressable market and subscription-based revenue model of AMS DRS provide resilience against economic downturns [70][72] Question: What trends are observed in the BGS segment post-Q1? - Management reported a slowdown in shipment volumes in April compared to Q1, with expectations for mid-single-digit organic growth moving forward [75][76]