Welcome to the Brinks Company, Third Quarter 2022 Earning Conference Call. Brinks issued a press release on third quarter results this morning. The company also filed an 8-K that includes the release and the slides that will be used in today's call. For those of you listening by phone, the release and the slides are available in the Investor Relations section of the company's website www.brinks.com. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. Now, for the company's Safe Harbor statement. This call and the Q&A session will contain forward-looking statements. Actual results could differ materially from the projected or estimated results. Information regarding factors that could cause such differences is available in today's press release and in the company's most recent SEC filings. Information presented and discussed in this call is representative as of today only. Brinks assumes no obligation to update any forward-looking statements. This call is copyrighted and may not be used without written permission from Brinks. It is now my pleasure to introduce your host Ed Cunningham, Vice President of Investor Relations. Mr. Cunningham, you may begin.

Thanks, Andrea, and good morning, everyone. Joining me today are CEO, Mark Eubanks, and CFO, Kurt McMaken. Also joining the call is Ron Domanico, former CFO and current President of Brink's Capital and Sustainability. This morning we reported third quarter results on both the GAAP and non-GAAP basis. The non-GAAP results excluded a number of items including the impact of Argentina's highly inflationary accounting, reorganization and restructuring costs, items related to acquisitions and dispositions, costs related to frozen retirement plans, charges related to an antitrust matter in Chile, and valuation allowance on tax credits in certain allowance estimates. We're also providing our results on a constant currency basis which eliminates changes in foreign currency exchange rates from the prior year. We believe the non-GAAP results make it easier for investors to assess operating performance between periods. Accordingly, our comments today will focus primarily on the non-GAAP results. Reconciliations are provided in the press release, in the appendix of the slides we're using today, and in this morning's 8-K filing, all of which can be found on our website. I'll now turn the call over to Mark.

Thanks, Ed. Good morning, everyone, and thanks for joining the call today. This morning we reported strong third quarter results, including double-digit organic growth in revenue, operating profit, adjusted EBITDA, and EPS. We achieved these results in a macro environment that continues to be challenging, demonstrating the resiliency of our business. We remain on track to achieve the midpoint of our full-year guidance for adjusted EBITDA and earnings per share of approximately $775 million and $5.75, respectively. Full-year revenue and operating profit are now expected to be at the low end of the prior range, due primarily to the impact of foreign exchange translation. Our guidance includes full year organic revenue of about 12% and strong double-digit growth in operating profit, EBITDA, and EPS, reflecting approximately 100 basis points of margin expansion driven by our organic growth, lean cost initiatives, and leverage from the lower fixed cost base. Through the first nine months of 2022, we achieved 8% revenue growth, 15% operating profit growth, a 14% increase in adjusted EBITDA, and EPS growth of 23%. We delivered these results despite a slower than expected start to the year due to the Omicron-related shutdowns around the world, a war in Europe, and an aggressive global monetary tightening trend, all of which have led to extreme movements in FX as the U.S. dollar continues to strengthen. We expect the operational momentum in both organic growth and profit expansion to continue through the fourth quarter, which has historically been our strongest quarter. It’s important to note that our 2022 guidance does not include any contribution from a recent acquisition of Note Machine, which we expect to be accretive to our results starting in the fourth quarter of this year of approximately $0.04 per share. In addition to the positive impact of the Note Machine acquisition, we will continue to be very proactive in taking steps to optimize our operating model—not only to drive organic profit growth, but also to mitigate the potential impact of a sustained economic slowdown in 2023. To that end, we are announcing a global restructuring plan that's expected to yield $40 million of savings in 2023 as a result of sustainable fixed cost reductions across the business. We continue to pursue additional opportunities to reduce costs, streamline our operations, and optimize our business model. We expect a strong finish in 2022 to lead to an even stronger performance in 2023. Our recent share purchases reflect our confidence that we will continue to deliver strong growth in revenue, profits, and free cash flow. We look forward to providing our guidance for 2023 when we report our fourth-quarter results in February of next year. I'd like to take this time to thank our more than 70,000 associates around the world who have been the driving force for the acceleration of our strategy by relentlessly serving our customers and executing our business improvement imperatives related to safety, quality, and cost efficiency all across our global footprint.

Thanks, Mark. As I'm approaching my planned retirement, it's been my honor and privilege to work with you and to onboard my successor. Kurt McMaken joined as Brinks CFO in August and has hit the ground running. As I've been transferring my institutional knowledge, our experienced team of professionals continues to provide exceptional support. While this is my final earnings call, I'll retain a significant investment in Brinks, knowing that the company is in great hands.

Thanks, Ron. It's been great to work with you on this transition, and thank you for all you've done for Brinks. Good morning, everyone! Let's move to slide 10, which provides more details on our Q3 revenue and operating profit versus the prior year. As Mark mentioned, revenue versus the prior year was up 14% on a constant currency basis, almost entirely from organic growth of 13%. Our organic growth benefited from price increases, further implementation of our AMS rollout in France, and strong Brink's global services volumes. Foreign exchange translation was a headwind of 8% versus the prior year, driven primarily by the Euro and Argentine Peso. The reported revenue was $1.1 billion, up $61 million or 6% versus the third quarter last year. Next, turning to operating profit, which in constant currency was up 23% versus last year. Organic growth was 22%. Acquisitions added another 1%, and FX was a 14% headwind, resulting in reported operating profit of $127 million and an 11.2% operating margin, which was 40 basis points above last year and 30 basis points higher sequentially. Our organic operating profit growth was primarily driven by revenue growth and was partially offset by an increase in security losses, including the previously discussed $10 million related to the jewelry robbery in Los Angeles and expenses related to variable compensation. I think it's interesting to note that this is our fourth consecutive quarter of double-digit constant currency growth in revenue and profit, and the second consecutive quarter of double-digit organic growth in revenue and profit.

I'll now turn the call over to Ron Domanico, who has been a driving force for Brinks' success in the past seven years. I want to thank him for his contributions to both Brinks and to me personally for his help in the last year since I've been here. Ron.

Thanks, Mark. As I'm approaching my planned retirement, it's been my honor and privilege to work with you and to onboard my successor. Kurt McMaken joined as Brinks CFO in August and has hit the ground running. As I've been transferring my institutional knowledge, our experienced team of professionals continues to provide exceptional support. While this is my final earnings call, I'll retain a significant investment in Brinks, knowing that the company is in great hands.

Thanks, Ron. It's been great to work with you on this transition and thank you for all you've done for Brinks. Good morning, everyone! Let's move to slide 10, which provides more details on our Q3 revenue and operating profit versus the prior year. As Mark mentioned, revenue versus the prior year was up 14% on a constant currency basis, almost entirely from organic growth of 13%. Our organic growth benefited from price increases, further implementation of our AMS rollout in France, and strong Brink's global services volumes. Foreign exchange translation was a headwind of 8% versus the prior year, driven primarily by the Euro and Argentine Peso. The reported revenue was $1.1 billion, up $61 million or 6% versus the third quarter last year. Next, turning to operating profit, which in constant currency was up 23% versus last year. Organic growth was 22%. Acquisitions added another 1%, and FX was a 14% headwind, resulting in reported operating profit of $127 million and an 11.2% operating margin, which was 40 basis points above last year and 30 basis points higher sequentially. Our organic operating profit growth was primarily driven by revenue growth and was partially offset by an increase in security losses, including the previously discussed $10 million related to the jewelry robbery in Los Angeles and expenses related to variable compensation. I think it's interesting to note that this is our fourth consecutive quarter of double-digit constant currency growth in revenue and profit, and the second consecutive quarter of double-digit organic growth in revenue and profit.

Now, let's turn to the third quarter results. This slide summarizes the strong revenue growth and profit growth that we achieved in the third quarter. Revenue was up 6% and organic growth was up 13%, driven by double-digit organic growth in North America, Latin America, and our rest of the world segment. Organic growth in Europe was about 8%. Operating profit was up 9% with organic profit growth of 22% and acquisition-related growth of 1%, partially offset by a 14% negative impact from FX translation, primarily due to the Argentine Peso and the Euro. This profit growth was driven by strong year-over-year margin expansion, especially in North America and our rest of the world segment. Adjusted EBITDA was up 11% and up 22% in constant currency, with a margin of 16.6%, up 80 basis points over last year. Third quarter EPS was up 18% over the year-ago quarter, which included a $0.03 per share gain from the sale of our position in NGI. Excluding this gain, EPS was up 21% for the quarter.

I think it's interesting to note that this is our fourth consecutive quarter of double-digit constant currency growth in revenue and profit, and the second consecutive quarter of double-digit organic growth in revenue and profit. Now, let's turn to free cash flow on slide 12. Our 2022 full-year free cash flow target has been adjusted from last quarter for several items that I will discuss in a few moments, but first let me explain this chart. The solid gray bars on this chart reflect our prior target, while the shaded gray areas reflect the changes to that target. Variances at the bottom of the chart reflect the changes from last year and from our previous targets. Starting on the far left, adjusted EBITDA is expected to be approximately $775 million, around the midpoint of our prior guidance and about $92 million higher than the prior year. We now expect to use about $95 million of cash for restructuring and working capital, an increase of $25 million over our prior target of $70 million. This change is primarily due to our new restructuring plan. As Mark reviewed, we see this as an attractive investment given the favorable economics associated with the plan.

Sure. I don't know that there's been a big shift due to the macro environment. Listen, I think people are definitely getting pressured with inflation and with currency devaluations in markets, particularly outside of the U.S., but I think this is still a function of, as I mentioned, regardless of sort of where the economy—if the economy is down 5% or 10%, you know there’s still 80%, 90%, or 90%, 95% of the money still has to be picked up and still cared for and processed. I will say, though, that you know as people, particularly retailers are focused on streamlining their business, and by the way, this varies from retailer to retailer depending on how they did with inventory forecasting through the pandemic, you know some retailers are playing offense, but certainly I think some are batting down the hatches to make sure they've got their cost structure in line, have their store footprint in line, which might create some apprehension.

Hey, good morning! This is Jasper Bibb on for Tobey. My first question was just on the revenue guidance. Beyond FX, what factors would you say came in above or below your expectations for the second half and also could you quantify how much of revenue you expect Note Machines to add in the fourth quarter?

Sure, Toby. Good morning! It's Mark. I’ll... Jasper Bibb: Jasper, sorry. Good morning. We – relative to the guide we really are only seeing sort of volumes soft this year really in FX. I think there are some pockets of strength in the business and back and forth and I'd say the global services business in Asia continued to perform in the quarter in particular as more and more metals and bank notes continue to move around the world, but nothing really fundamental for us underlying in the business of seeing that weakness.

Thanks. And then I was just hoping you could update us on your ’24 margin targets with the context of what you’re seeing in labor cost inflation, and also I guess the restructuring initiatives you announced this morning.

Sure. You know I think our pricing and cost relative inflation posture will remain the same, not only in the year, but across the strategic planned period into '24. We expect to continue to match those and drive productivity, but also put those through the market relative to pricing. The restructuring, you know we'll continue to do when we see fit given the market outlook, but our framework is intact.

Hi! Thanks. Good morning.

Good morning, George.

On slide eight you provided a history of how Brink's responded to various economic cycles. As you look at prior performance leading into or heading into a recession, what are some of the indicators or responses that you would typically see from a customer in the event of a pullback, and how quickly would those signs of a slowdown show up in the business?

You know, I’d like to say that there is notes processed or how many stops, but in fact that really probably isn't a great lean indicator because, for instance, you know in the pandemic our volumes actually went up as we nosed into the middle of 2020, just given the fact that banks and central banks wanted to make sure there was cash available in the marketplace for consumers, and so we wouldn't necessarily see that. I think what we would see George would be customers either canceling locations, closing down stores, especially you know larger national accounts that have multiple stores if you start to see store closures or less frequency, you know maybe of staffs, if we're servicing customers three, four, five times a week, if maybe they pulled back. It's not something we've seen yet. In fact, we're continuing to see sort of an expansion of that, but for us our answer, and as we think through any potential situation, first of all we want to look at – we’ve looked at our cost structures we announced to restructuring, to you know get ready for something that might happen just in case. But also you know shifting to Brink's Complete and you know our tech-enabled solutions, particularly in the traditional CIT Money Processing Business is a benefit for us and we have the opportunity to create benefits for customers relative to allowing them to reach maybe a better price point down the road.

Great, that’s helpful. And then as we think about your pricing power in the current inflationary environment, how would you compare it to historical trends? Has your pricing picked up commensurate with inflation and how does your organic revenue growth split between volume and pricing?

Sure. I’d say pricing is – the pricing environment has been I'd say consistent, George, in the last, certainly since I've been here, but I’d say you know even in prior times. You know Ron can speak to that if we need to. But I would say that this inflationary environment has certainly touched all industries, including our customers, and I think this is where the conversation with customers is one that is – well, no one wants to see increased costs. I think they also clearly understand, because they are seeing it in the same place, you know inside their own four walls.

Very helpful. Thank you.

Thanks, Andrea, and thanks, everyone. We appreciate the questions and certainly appreciate your support. I look forward to speaking to you next quarter. Thank you.

The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.