• Organic Growth: 11% in Q4 and 12% for the full year 2024.
• AMS/DRS Growth: 23% organic growth in both Q4 and the full year.
• CVM Growth: 7% in Q4 and 9% for the full year.
• EBITDA: $912 million for 2024, with a margin expansion of 40 basis points to 18.2%.
• EPS: $7.17, with a 4% reduction in share count year-over-year.
• Free Cash Flow: $400 million for the full year, over $300 million in Q4.
• Revenue: Exceeded $5 billion for the first time in company history.
• Adjusted EBITDA Growth: 11% on a constant currency basis.
• North America Organic Growth: 2% for the full year.
• Latin America Organic Growth: Down 2% due to FX volatility.
• Europe Organic Growth: 7% in 2024.
• DRS Device Base: Increased by 20% over the year.
• Fleet Reduction: Decreased by over 300 vehicles in 2024.
• Facility Count Reduction: Reduced by over 60 locations.
• Share Repurchases: $204 million spent, reducing share count by over 2.1 million shares.
• Net Leverage: Reduced to 2.8 times.

• Warning! GuruFocus has detected 5 Warning Signs with BCO.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Brink's Co (NYSE:BCO) achieved total organic growth of 11% in Q4 and 12% for the full year 2024, with ATM managed services and digital retail solutions growing 23% organically.
• The company delivered a record high EBITDA margin of 18.2% in 2024, expanding by 40 basis points despite currency headwinds.
• Strong free cash flow generation was reported, with $400 million for the full year and over $300 million in Q4, driven by working capital efficiencies.
• The Brink's Co (NYSE:BCO) successfully executed a share repurchase program, reducing share count by approximately 4% and returning $250 million to shareholders.
• The company is focused on strategic growth, with AMS/DRS now representing 24% of total revenue and plans to increase this to 25-27% by year-end 2025.

Negative Points

• The Brink's Co (NYSE:BCO) faced a 10% currency headwind in Q4, primarily impacting the higher margin Latin American segment.
• EPS was down compared to the prior year due to the absence of a marketable security gain that benefited the previous year's results.
• The Latin American segment experienced a 2% decline in total revenue due to volatile FX conditions, with anticipated continued FX headwinds in 2025.
• The company expects a more normalized tax rate of 28% in 2025, up from 23% in 2024, which may impact net income.
• Interest expense increased by $8 million year-over-year, with expectations to remain flat in 2025, potentially affecting net earnings.

Q & A Highlights

Q: Your cash and valuable management business grew 7% in the quarter. Can you deconstruct trends you're seeing from a price and volume perspective? A: Mark Eubanks, CEO: We continue to see volumes improve, moving towards a balanced ratio. Argentina's inflation moderation is impacting organic growth numbers. Price inflation remains positive across all regions. Our revenue profile is heavily influenced by AMS DRS growth, which is a mixed impact rather than price-driven. We expect positive trends in 2025, especially with the momentum in BGS.

Q: You're accelerating investments to improve margins in North America. Can you outline the opportunity and the investments being made? A: Mark Eubanks, CEO: We aim for a 20% EBITDA margin as a near-term target. Investments focus on route optimization technology, expected to be fully implemented by mid-year, and moving legacy tech to the cloud. Labor costs have improved by 310 basis points, showing productivity benefits. We expect North America to close the margin gap with Latin America.

Q: Can you break down your assumptions for organic growth in CIT and BGS businesses? A: Kurt McMaken, CFO: CDM is expected to grow in the low single digits. BGS is part of CDM and will also see consistent growth. There's a conversion impact as some business shifts from CDM to AMS DRS. We anticipate BGS growth to accelerate through 2025, especially in North America.

Q: AMS DRS organic growth was 23% for the year. Is the shift to Mid to High Teens growth due to comps or a more normalized rate? A: Mark Eubanks, CEO: The growth rate is slowing due to the law of large numbers and Argentina's inflation moderation. However, we expect Mid to High Teens growth to continue, supported by new partnerships with BP and Western Union, which will enhance our AMS and DRS offerings.

Q: How do FX headwinds impact your ability to generate and deploy free cash flow, particularly for share repurchases? A: Mark Eubanks, CEO: Free cash flow conversion will improve with margins. FX headwinds in high-margin geographies could impact conversion, but interest rate reductions and faster AMS DRS deployment will help. Capital efficiency is improving, as seen with a reduction in vehicles and branches, enhancing our network optimization.

Q: How much of AMS DRS growth came from legacy conversions versus new business wins? A: Mark Eubanks, CEO: Less than one-third of growth is from legacy conversions. Most DRS growth is from new business or competitive acquisitions. AMS growth is largely new business, especially in retail ATM networks and bank outsourcing.

Q: Can you discuss the impact of tariffs and global economic slowdowns on your business? A: Mark Eubanks, CEO: Tariffs have impacted global markets, particularly in precious metals like gold and silver, benefiting our logistics business. We have a large fixed-cost network that benefits from increased movement. We haven't seen significant impacts from local economic slowdowns related to tariffs.

Q: Would the discontinuation of the penny have any meaningful impact on your business? A: Kurt McMaken, CFO: The discontinuation of the penny is not an issue for us. Our coin business is immaterial in terms of impact, and it might even be beneficial as we are a major player in physical currency movement.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.