Welcome to The Brink's Company's Fourth Quarter and Full-Year 2022 Earnings. Brink's issued a press release detailing its fourth quarter and full-year 2022 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 slides are available in the Investor Relations section of the company's website at investors.brinks.com. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. And as a reminder, this conference is being recorded and will be available for replay. This call and the Q&A session will contain forward-looking statements. Actual results could differ materially from projected or estimated results. Information regarding factors that could cause such differences are available in the footnotes of today's press release and in the company's most recent SEC filings. Information presented and discussed on this call is representative as of today only. Brink's assumes no obligation to update any forward-looking statements. The call is copyrighted and may not be used without written permission from Brink's. I'll now turn it over to your host Jesse Jenkins, Vice President of Investor Relations. Mr. Jenkins, you may begin.

Thanks and good morning. Joining me today are Brink’s CEO, Mark Eubanks; and CFO, Kurt McMaken. This morning we reported fourth quarter and full-year 2022 results on both the GAAP and non-GAAP basis, as well as 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, the majority of our comments today will focus primarily on non-GAAP results. Reconciliations of non-GAAP results to their most comparable GAAP results are provided in the press release, the Appendix of this presentation, and in this morning's 8-K filing, which can be found on our website. I'll now turn the call over to Brink's CEO, Mark Eubanks.

Thanks, Jesse. Good morning, everyone, and thanks for joining us. This morning we reported strong full-year fourth quarter 2022 results highlighted by the highest full-year organic growth rates we've seen over a decade and operating margins at the highest level in recent years. We delivered our full-year 2022 guidance for revenue, operating profit, EBITDA, and EPS despite the impact of $252 million on revenue due to negative foreign exchange translation. The 12% organic growth rate included double-digit growth in three of our four segments, as well as in our Digital Retail Solutions, ATM Managed Services, and in our valuables management business, Brink's global service. All service lines benefited from strong pricing discipline in the current inflationary environment. Operating profit margins and EBITDA margins expanded by 90 basis points and 110 basis points respectively, a result of improved revenue mix from higher DRS and AMS revenue, continued cost productivity primarily from labor management and disciplined pricing actions to offset inflation. EPS for the year was $5.99 per share, a $1.24 per share increase over 2021. In the year, we generated $203 million of free cash flow and prioritized use of cash towards share repurchases and the October 3 acquisition of NoteMachine, which was immediately accretive in Q4. In total, we purchased about 950,000 shares at an average price of approximately $55 per share. Kurt will have more on free cash flow and capital allocation later in the call. Demand remains strong in the fourth quarter allowing us to post 12% organic revenue growth and 15.7% operating margins. North American operating profit margins were 15.1% the highest in the history of the segment and I'm encouraged by the progress our North American leadership team is making. Adjusted EBITDA margins in the fourth quarter were over 20% for the first time in our…

Thanks, Mark. Good morning, everyone. Slide 7 summarizes the strong revenue, profit, EBITDA, and EPS growth that we achieved in the fourth quarter. Revenue versus the prior year was up 8% and up 16% in constant currency with organic growth of 12% and acquisition growth of 4%, partially offset by 7% negative impact from FX. Operating profit was up 22% despite a difficult comparison to a strong quarter last year. Organic profit growth of 30% and acquisition-related growth of 4% were partially offset by negative FX of 12%. On a constant currency basis, operating profit grew 34%, adjusted EBITDA was up 18% and up 28% in constant currency with a margin of 20.8%, 170 basis points higher than last year, and the first time in history our quarterly EBITDA margin has exceeded 20%. Fourth quarter EPS was up 25% over the year ago quarter and up 42% in constant currency. Next, we'll move to Slide 8, which provides more details on Q4 revenue and operating profit versus the prior year. Revenue was up 16% on a constant currency basis, primarily from organic growth of 12%. All segments performed well with double-digit organic growth in North America, Latin America, and our rest of world segment and 8% organic growth in Europe. Organic growth benefited from strong AMS and DRS growth, volume growth in Brink's global services, and price increases across all service lines and segments. Our reported revenue was $1.2 billion, up $93 million or 8% versus the fourth quarter of last year. Next, turning to operating profit, which in constant currency was up to 34% versus last year, with organic growth of 30% in acquisitions adding another 4%. FX was a 12% headwind resulting in reported operating profit of $187 million, up 22% versus last year. The operating profit margin…

Thanks, Kurt. On Slide 13, you can see our core strategic objective and our foundational strategic pillars. Embedded within each pillar is our commitment to sustainability. Our investment in each of these pillars will drive revenue growth and margin improvement, and position Brink's as an innovative business partner and employer of choice for years to come. Customer service has been a longstanding part of Brink's and we're working hard to fully embrace a customer-centric mindset by considering our customers in every single decision we make and action we take to improve both growth and customer loyalty. We're working to create a consistent and exceptional experience across all service lines to become a trusted business partner with our customer. These deeper relationships with our customers allow us to partner in innovation. We continue to innovate with tech-enabled hardware and software solutions create -- to create value and address our customer's biggest challenges, including our Digital Retail Solutions and ATM Managed Services. We must remain agile and capitalize on the emerging opportunities to drive new revenue streams in the evolving payments landscape. With a focus on operational excellence, we're advancing a continuous improvement culture focused on improving the customer experience and eliminating waste. Under the leadership of The Brink's Business System team, we will share systems and best practices across our global operations that expand our operating margins and improve our service rates. And finally, our business is only as strong as our people. Establishing a workplace and an employer brand that attracts, develops, and empowers diverse talent will ensure that we have the best people and perspectives to achieve our goals. I'm proud of the efforts of our team in delivering a strong 2022. In 2023, we will grow Brink's by delivering a superior customer experience and driving continuous improvement throughout our operations. I'm excited about the opportunities we have in front of us and encouraged by the strong momentum we're carrying into the year. I'm confident in our ability to create long-term shareholder value as we execute on these strategic priorities. I'll now turn it over to the operator to facilitate the Q&A answer session. Operator?

Ladies and gentlemen, at this time we'll begin the question-and-answer session. [Operator Instructions]. Our first question today comes from George Tong from Goldman Sachs. Please go ahead with your question.

Hi. Relatively healthy 12% organic revenue growth in 2022, can you provide an update on what you're seeing with volume trends among retailers in the current macro environment that can support continued solid performance and organic revenue growth? And how the average number of stops per week per retailer is changing, if at all?

Sure. George, I'll take that. This is Mark. Good morning. We really haven't seen any significant demand signals that would indicate that we're seeing softness in retail. In fact, I think the retail story is largely playing out with in sort of two different areas with the big retailers. And you've heard a couple here lately talking about the shift really from consumers purchasing goods to moving toward services. Obviously services is an area for us that, that we like, given that that's largely in-person, which is where cash is a preferred payment method, and whether that's hospitality or retail, QSR or just travel. And of course, you see some of those demand signals for the future with the airline businesses with Airbnb and some of the forecast for summer travel. So the -- those things give us some confidence going forward. But actually we don't see any real data around that, around demand destruction or retreat. I think the other thing to remember on the stops, on the average stops per customer is that as we deploy more and more DRS, as we optimize more and more the full line ATM Managed Services, we're able to optimize our routes and stops better, which again allows us not only to drive productivity on our -- and asset utilization across our footprint, but also allows us to provide a more seamless integration with our customers with a full stack solution.

Got it. That's helpful. And related to the last point in your tech-enabled solutions portfolio, you saw significant growth with Digital Retail Solutions up 25% and ATM Managed Services up 50% over the past year. Can you discuss your initiatives to further scale your tech-enabled solutions? Where are your priorities currently from a growth perspective?

Sure. We are focused in all areas, and I'd say it's broad-based. Specifically around DRS, we've got a, of course a big footprint there where in our traditional business, in many markets are around the world and almost on every continent. We're seeing opportunities not just in the conversion of our existing customers, which I think is encouraging. We talked about this at Investor Day in 2021 about the unvended and underserved space. We're seeing those opportunities globally. And in fact, today we're seeing probably more opportunity in international markets than we probably expected early on, which is giving us a balanced view and a balanced outlook on DRS growth. Relative to ATM Managed Services, that, that also is broad-based inactivity. And of course, we've got a strong footprint with our traditional business in all the markets. I think the opportunity we've seen most recently has been in North America with our PAI acquisition as well as in Europe with our NoteMachine acquisition, but those two acquisitions are really -- they're not the basis for which we're driving growth. They're the basis for how we're driving the development of capabilities and skillsets and infrastructure to allow us to drive organic growth. You can -- the numbers we're talking about are organic growth and we've chronicled some of those wins in the past, whether that be with BPCE on outsourcing their network or in the Baltics or other areas of course in North America. But this is a good backdrop for us going forward. And our pipeline is healthy with more and more discussions, not only with our current customers, but as banks are evolving their footprint and their strategic outlook both in Latin America as well as in Asia-Pacific we're seeing more of those organic opportunities unfolding.

Our next question comes from Tobey Sommer from Truist Securities. Please go ahead with your question.

Thanks. I was hoping you could speak to free cash flow and the arc of that this year and out in the future. And maybe just give us the contours of the things that are within your control, because I know we don't get to choose rates. But sort of your CapEx trends, what the move to digital means in terms of optimization for that and any other things that are sort of within your control that contribute to a higher free cash conversion. Thanks.

Yes. Hey Tobey, it's Kurt. Let me take that and Mark can add on. So I think when you look at our free cash flow, the biggest component obviously is our EBITDA. And we feel very good about the trajectory of that. And as we look ahead kind of what we're looking to deliver. And then when you go beyond that, you look at the other components, let me just pick up on CapEx next. You -- we've basically said our CapEx is going to stay largely flat going forward. And the reason for that is because we really feel like our mix of business and changing our business models allowing us the operational efficiencies to enable the fact that we don't need the same levels of CapEx as we did before when you look at it as a percentage of revenue. So that gives us leverage off of that. So that's well within our control. If you look at the working capital components, next, the -- we talked about the fact that we had -- we consider kind of a temporary drag at the end of the year here that we see turning into 2023 for a number of items. And all of those well within our control. As you know, as we go into the year, we tend to ramp on free cash flow. It's lower than the first half of the year and picks up in the second half of the year. And that's very normal for us and we would see that that continue. The other components, I mean interest and taxes from a cash basis, I mean we're pretty -- I'd say again on interest well within our control because we're -- as we've said, we're going to target between 2x and 3x on our leverage. And so we'll keep that in check. And then on the taxes, working to make sure that our cash taxes remain consistent. We've got it pretty much flat with 2022 and we think that's very achievable.

So I may -- I'll just add a little bit to that. Tobey, just thinking you asked about the arc in 2022 into 2023 and beyond. First and foremost, I think the cash conversion percentage for 2022 is a bit misleading at 26% given the fact that we had these one-times, getting through these temporary working capital drags, we -- that kind of nominal you say 30% -- low 30%, 33%, 34% cash conversion on the 2022 number, which makes the 40% conversion on 2023 not so daunting. And by the way, that's consistent with our history previous to 2022, that that sort of mid-low 30% conversion rates. I think the other thing that we are confident about is a larger -- a large part of that working capital improvement for next year is built into some of those items Kurt mentioned, whether it's $40 million in AR recovery in Mexico, that he mentioned or some of the things that have already resolved themselves here in January relative to the timing of year-end and change orders. So we feel good about that. I think the other piece of the business as we go-forward is around our DSO mix of businesses. And so as AMS and DRS continues to become a bigger -- penetrate our existing portfolio and become a bigger piece of our revenue, we've got better terms there based on subscription-based models versus the traditional stop model. And so that that backdrop with some other improvements and I think Kurt referenced the incentive plan change where we think that we can drive behavioral changes and of course, management attention with specific cash flow conversion tied to their incentive plan. I think it's -- it sets the right change management perspective going forward.

That makes a lot of sense to me. And as a follow-up on that last point, do you expect a focus in incentive comp on free cash to be a feature of incentive comps beyond this year? Or is it something that sort of philosophically and strategically you think is an appropriate tool to drive the improvement?

Yes, absolutely. Tobey, we think this is going to be a permanent piece of our compensation. And rightfully so, I think during the pandemic, the company was focused on preserving profitability and as well as maintain a growth lean this year going forward, we think cash is a permanent piece of our go-forward. Not only go-forward management incentive, but frankly, it's a go-forward component as part of our value creation for shareholders.

Right. Could you give us some color on the drivers of growth and what sort of strong and/or the weaker elements of Brink's global services? It's something we don't always talk a lot about on these calls, but I'd love to get sort of an update on how you see that business evolving this year.

Sure. We continue to have a strong position, Tobey, in moving precious metals, bank notes, due to our network and frankly global relationships in this industry. And so as we continue to see whether its interest rate regimes move, disruption in whether it's wars, pandemics, we are part of that ecosystem that allows investors to move in and out of specific types of valuables. As we look at coming out of the pandemic where commodity prices were specifically gold and silver were at high demand, we had a lot of that revenue whether it was movement or storage or so forth around precious metals in the pandemic as, but at the same time, we saw bank note repatriation and movements around the world contract. Well, we're seeing that shift back now, as we're seeing more people moving around the globe, more cash moving around the world, as well as interest rates moving that drives Central Bank and government or country to country currency flows. And so that we've seen significant uptick there in the bank note business this year.

And last question for me, anything that you would highlight as the most likely areas of financial institution outsourcing this year and next, is there a focused area that you're hearing from customers is the biggest opportunity for company?

Well, we certainly are, and I -- and the ATM Managed Services is our -- is really the platform to receive that. And frankly, we've seen more and you saw that the growth -- the organic growth number that we had in 2022. And we'd expect continued strong growth from -- sorry, from our AMS business, and it's coming from bank financial institution outsourcing. And as I mentioned before, we've -- while we have big footprints in North America and Europe, we're seeing this activity widespread around the world where banks are entering into discussions whether public requests for proposal or whether it's private negotiations with us. And I'd say we're -- and others, by the way. I'd say we are a logical partner for many of these customers, given the fact that we provide such a large amount of service in the value stream with their currently in-source ATM management. And so for us, we're a logical partner for that first discussion. And part of that for us is make sure we're ready for it, which is why we're building out what I mentioned was our global infrastructure. We appointed David Dove, who's our Global ATM President, and built-out some infrastructure around that both on the business development as well as technical capability to be able to have those discussions and purposefully enter into good exploratory discussions with these customers to find the best solution. And by the way, that solution has a wide varying range of services. But in all of those cases, this is an accretive business to our base margins and continues to help us as we look forward drive our mix as part of our profit improvement in the 100 basis point framework year-on-year.

And ladies and gentlemen, with that, we're going to conclude today's question-and-answer session as well as today's conference call. We do thank you for joining today's presentation. You may now disconnect your lines.