Brink(BCO) - 2024 Q2 - Quarterly Report

Financial Performance - Consolidated revenues for Q2 2024 increased by $36.9 million to$1,253.1 million, a 3% increase compared to Q2 2023, driven by organic growth in Latin America, Europe, North America, and Rest of World [171]. - Operating profit for Q2 2024 rose by $10.4 million to$116.0 million, a 10% increase year-over-year, primarily due to organic growth in Latin America and North America [173]. - Income from continuing operations attributable to Brink's shareholders increased by $14.1 million to$46.3 million, resulting in diluted EPS of $1.03, up 51$0.68 in Q2 2023 [174]. - For the first half of 2024, revenues increased by $87.6 million to$2,489.2 million, a 4% increase compared to the first half of 2023, with organic growth primarily in Latin America [175]. - Non-GAAP operating profit for Q2 2024 increased by $23.8 million to$155.6 million, an 18% increase year-over-year, reflecting strong performance across segments [178]. - Non-GAAP income from continuing operations attributable to Brink's shareholders rose by $15.2 million to$75.4 million, with diluted EPS increasing to $1.67 from$1.27 in Q2 2023 [179]. - Non-GAAP adjusted EBITDA for Q2 2024 increased by 16% to $225.9 million, driven by higher operating profit [179]. - Total segment revenues for 2Q'24 reached$1,253.1 million, a 3% increase from the previous year, with a 14% organic growth [184]. - Non-GAAP net income for Q2 2024 was $155.6 million, compared to$131.8 million in Q2 2023, reflecting a year-over-year increase of 17.9% [237]. - The company’s GAAP operating profit for Q2 2024 was $116.0 million, an increase from$105.6 million in Q2 2023 [237]. - GAAP net income from continuing operations attributable to Brink's for Q2 2024 was $46.3 million, compared to$32.2 million in Q2 2023, representing a 43.5% increase [239]. Revenue Growth by Region - North America revenues increased by 4% ($14.6 million) due to a 3$10.4 million) and acquisitions impact of $4.8 million [186]. - Latin America revenues decreased by 1$2.2 million) primarily due to unfavorable currency exchange rates ($128.9 million), offset by a 38$126.7 million) [187]. - Europe revenues increased by 8% ($23.8 million) driven by a 9$25.6 million) and acquisitions impact of $1.9 million [188]. - Rest of World revenues increased by$0.7 million due to a 2% organic increase ($4.0 million), partially offset by unfavorable currency exchange rates ($3.3 million) [189]. Currency and Exchange Impact - The unfavorable impact of currency exchange rates was $136.5 million in Q2 2024, primarily due to the Argentine peso [172]. - The company reported transaction gains of$7.2 million in Q2 2024, compared to a loss of $14.0 million in Q2 2023, indicating a favorable change [224]. - As of June 30, 2024, the fair value of the cross currency swap contracts was a net liability of$23.4 million, with $5.6 million included in prepaid expenses and$29.0 million in other liabilities [219]. - The company reported a net liability of $34.6 million for currency swaps as of December 31, 2023, with$5.6 million in prepaid expenses and $40.2 million in other liabilities [219]. Operating Expenses and Profitability - Selling, general and administrative expenses increased by 14$194.3 million in Q2 2024, mainly due to organic labor cost increases [172]. - Total operating profit for 2Q'24 was $116.0 million, a 10$14.2 million) due to a 37% organic increase ($13.7 million) [186]. - Latin America operating profit decreased by 4$2.7 million) primarily due to unfavorable currency exchange rates ($40.9 million), despite a 58$38.2 million) [187]. - Europe operating profit increased by $2.9 million, primarily due to an 11$3.1 million) [188]. Corporate Expenses and Charges - Corporate expenses for the first six months of 2024 decreased by $15.4 million compared to the prior year, mainly due to lower insurance and security losses [198]. - Total recognized charges under the 2022 Global Restructuring Plan amounted to$34.0 million, with expected total expenses between $36 million and$38 million, aiming for annualized cost savings of approximately $60 million [200]. - The company incurred$12.0 million in transformation initiative costs in the first six months of 2024, aimed at accelerating growth and driving margin expansion [205]. - The company recognized $13.0 million in pretax charges related to highly inflationary accounting in Argentina, down from$22.2 million in the same period of 2023 [204]. Cash Flow and Capital Expenditures - Cash flows from operating activities decreased by $107.5 million in the first six months of 2024, resulting in a negative cash flow of$2.2 million compared to a positive cash flow of $105.3 million in the same period of 2023 [241]. - Free cash flow before dividends decreased by$103.7 million in the first six months of 2024, amounting to $(36.8) million compared to$66.9 million in the same period of 2023 [244]. - Capital expenditures increased to $108.9 million in the first six months of 2024, up from$89.4 million in the same period of 2023, marking a 21.9% increase [246]. - Cash used in investing activities decreased by $28.2 million in the first six months of 2024, totaling$(116.4) million compared to $(144.6) million in the same period of 2023 [246]. Debt and Liquidity - Total debt as of June 30, 2024, was$3,747.1 million, up from $3,531.3 million at the end of 2023, reflecting an increase of$215.8 million [254]. - Net debt increased by $205 million to$2,726.0 million as of June 30, 2024, primarily to fund general corporate purposes [255]. - The company financed its liquidity needs in the first six months of 2024 with existing cash from operations and cash flows from long-term debt [240]. - As of June 30, 2024, $950 million was available under the Revolving Credit Facility to meet liquidity needs [256]. Pension and Retirement Plans - The primary U.S. pension plan's beginning funded status was$(24.0) million in 2023, improving to $(10.9) million in the first half of 2024 [262]. - The ending funded status for the primary U.S. pension plan is projected to reach$20.6 million by 2027 and $34.5 million by 2028 [262]. - The UMWA plans had a beginning funded status of$(94.9) million in 2023, with an expected ending status of $(90.0) million by 2028 [264]. - The Black Lung plans had a beginning funded status of$(75.8) million in 2023, projected to improve to $(54.2) million by 2028 [265]. - Payments from Brink's to U.S. retirement plans totaled$7.7 million in 2023, with projections of $9.3 million for FY2024 [268]. Taxation - The provision for income taxes for continuing operations was$22.1 million in Q2 2024, with an effective tax rate of 30.7%, down from 39.9% in Q2 2023 [228]. - The effective income tax rate for YTD 2024 was 28.1%, compared to 24.8% for YTD 2023, indicating an increase of 3.3 percentage points [235]. - Cash payments for income taxes increased to $68.5 million in the first six months of 2024, compared to$54.7 million in the same period of 2023, reflecting a 25.5% increase [243].