Brink’s (NYSE:BCO) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
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View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=WtFtsDVo
Summary
Brink’s reported a strong first quarter with 10% revenue growth, including 4.5% organic growth driven by 15% growth in ATM Managed Services and Digital Retail Solutions.
The company achieved a record trailing 12-month EBITDA of $1 billion, reflecting a $200 million increase since the end of 2022, with margin expansion across major regions.
Brink’s is progressing with the acquisition of NCR Atlios, which is expected to enhance AMS and DRS offerings and contribute $200 million in cost synergies.
Free cash flow exceeded half a billion dollars for the first time, with a conversion rate of 50% from EBITDA, and the company anticipates further cash flow improvements post-acquisition.
Guidance for 2026 remains stable, with expectations for mid-single-digit organic growth and EBITDA margin expansion of 30-50 basis points, supported by strategic initiatives in AMS and DRS.
Full Transcript
OPERATOR
Good day and welcome to the Brinks Company first quarter 2026 earnings conference call. All participants will be in the listen only mode. Should you need assistance, please signal a conference specialist by pressing the Star key followed by zero. After today’s presentation there will be an opportunity to ask questions. To ask a question you may press Star then one on a Touchstone phone. To withdraw your question, please press Star then two. Please note this event is being recorded. I would like to turn the conference over to Jeffrey Jenkins, Vice President, Investor Relations. Please go ahead.
Jeffrey Jenkins (Vice President, Investor Relations)
Thanks and good morning. Here with me today are CEO Mark Eubanks and CFO Kurt McMaken. This morning Brinks reported first quarter results on a GAAP, non GAAP and constant currency basis. Most of our commentary today will be focused on our non GAAP results. These non GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. We believe these measures allow investors to better compare performance over time and to evaluate our performance using the same metrics as management. Reconciliation of non GAAP results to their most comparable GAAP results are provided in the SEC filings which can be found on our website. We will also have commentary on the status of our pending acquisition of NCR Atlios. As a reminder, this transaction is subject to the completion of customary closing conditions, including regulatory approvals and approval by Brinks and NCR Atleos shareholders. Additional details, including risk factors related to the transaction, can be found in the pertinent SEC filings. I will now turn the call over to Brinks CEO Mark Eubanks.
Mark Eubanks (Chief Executive Officer (CEO))
Thanks Good morning, everyone. Starting on slide three, we’re pleased with another strong quarter of growth and operational execution as we continue to transform Brinks into a more predictable and profitable enterprise. I want to thank all of our team members, especially those in the Middle East region for their focus in this dynamic global economic backdrop. I could not be more proud of our teams for staying focused and delivering on our Q1 commitments. Our results were at the upper end of our first quarter guidance ranges and we’re off to a strong start to the year. First quarter revenue growth of 10% included 4.5% organic growth, driven mostly by 15% organic growth and in ATM Managed Services and Digital Retail Solutions or AMS DRS. The growth in the quarter was highlighted by the onboarding of Pandora in DRS and good momentum in AMS, especially in the Rest of the World segment. At the segment level, Rest of the World delivered 7% organic growth on strong precious metals activity in the global services line of business. Overall organic growth, favorable revenue mix and good underlying productivity drove margin expansion of 10 basis points with over 100 basis points of expansion in both North America and Rest of World and 240 basis points of expansion in Europe. In total Q1 EBITDA was $238 million with a margin of 17.3%. Trailing 12 month EBITDA was $1 billion for the first time in our history this quarter, reflecting a more than $200 million increase since the end of 2022. As we continue to deliver profitable growth across our business, we also continue to improve cash generation with an increase of $66 million year over year. In the first quarter on a trailing twelve month basis, free cash flow exceeded half a billion dollars for the first time in our company’s history with conversion from EBITDA of 50%. Operationally, we saw improvement in both days of sales outstanding and days payable outstanding. Coupled with EBITDA growth I mentioned earlier, total free cash flow has more than doubled since year end 2022 with free cash flow now exceeding $12 per share. As I review the quarter we delivered on our commitments with results at the top end of our guidance range. As I mentioned, I’m proud of our consistent execution during volatile market conditions and our team’s focus on the heels of the announcement of our transformational acquisition of NCR Atlios. Supported by this strong first quarter, I remain confident in our ability to continue our trajectory and deliver our full framework for 2026. Turning to slide 4, you can see the components of our value creation strategy which remain unchanged for 2026 and are well aligned with the strategic rationale of the NCR Atlios acquisition. We expect organic growth in 2026 to remain consistent in the mid single digits and driven primarily by new and converted customer growth in recurring AMS and DRS revenue, which is expected to approach a third of our total company revenue by year end. The acquisition of NCR Atlios is expected to accelerate our ability to capture these AMS and DRS customers by delivering a more vertically integrated AMS offering and lowering our cost base through increased network density on the retail side of our business on a standalone basis for 2026, we expect EBITDA margins to expand by 30 to 50 basis points as we shift revenue to these higher margin services and drive cost productivity across our operations. This mix shift is expected to continue after completion of the acquisition and cost efficiencies are expected to accelerate behind the $200 million of cost synergies that we previously identified as we eliminate duplicative SGA and public company costs, optimize our service delivery network, and finally drive global procurement savings. Both companies have delivered meaningful improvement in cash generation in the last few years, and we expect that will compound as we combine our two businesses. In addition to working capital improvements, we’ve already completed a secured financing arrangement that will allow us to absorb the $1.6 billion of NCR Atlio’s bank debt at a rate that is more than one full percentage point better than their current level full percentage point better than their current level. While we’re focused on the near term on reducing leverage, we expect to produce a combined $1 billion of free cash flow from the two companies, providing flexibility to maximize value creation through strategic investments and shareholder returns. Shifting back to the quarter, on slide 5, I’ll provide some commentary on performance by line of business, starting with Cash and valuables management or CVM. Organic growth was 1% in the quarter with good pricing discipline offsetting a couple percentage points of AMS DRS conversions. Our global services business was also strong again this quarter despite lapping a robust first quarter of 2025. Precious metals movement remained volatile and trends can change rapidly, but we factored in the current favorable Trends into our second quarter guidance. AMS DRS revenue grew organically approximately $50 million in the quarter for a rate of 15%. This was the 13th consecutive quarter of at least 15% organic growth in AMS DRS as we continue to build momentum in these important businesses, it’s important to note that in the fourth quarter of last year we saw strong growth related to one time equipment sales primarily in North America that impacts the sequential comparisons. Factoring in this dynamic, growth in the quarter was in line with our expectations and positions us well to deliver our guidance for the full year. In DRS. We continue to see positive momentum with large enterprise customers in North America including the onboarding of Pandora during the late fourth and early first quarters. In AMS, we’re lapping some large wins in the prior year like Sainsbury’s while we stage for other large deployments including some in the rest of world segment, we continue to see positive AMS trends with banking customers including in Southeast Asia where we recently won the largest national bank in Indonesia with about 5,000 ATMs. Looking to the balance of the year, we expect AMS and DRS to accelerate sequentially supported by our strong pipelines and DRS backlogs, including parities that will lead us directly into the next slide. On slide 6, I’d like to highlight an example of a type of wins we’re delivering with DRS. Paradis is a leading travel retailer and Restaurateur operating over 700 stores and airports across North America. They offer major brands like Chick Fil, A Tumi, Starbucks Today, and Jimmy John’s, just to name a few. Parity’s came to us to help solve common dilemmas they see across large global retail and quick serve organizations. I’ve often discussed DRS as a true win win for both Brinks and retailers, and that’s clearly the case here. With Parity’s we designed a bespoke solution incorporating both front office recyclers and smart safes that integrate directly with Parity’s Point of Sale (POS) software. Our solutions is expected to help them with several pain points across their global footprint. Among other things, we’re able to reduce cash handling time for managers and employees, unlocking productivity and efficiency within their stores. Our solution digitizes cash quickly and tracks transactions down to the teller level, reducing operational shrink across the business. We are also able to simplify service delivery for customers as we shift our key quality service deliverable from arriving within a certain appointment window to providing overnight electronic deposits for faster access to working capital. This shift creates flexible routing and scheduling options for Brinks, allowing us to arrive when needed or when easily added to an existing scheduled trip into the area. We’ve completed a successful trial phase with Paradis and are planning for the full rollout across their entire footprint over the balance of the year. While the solution we designed for Parities is unique to their specific needs, the problems we’re solving for customers are universal. Our DRS offerings have a clear and demonstrated value proposition for retailers of all sizes. As we close more of these deals, I remain confident that we’re in the early stages still of our efforts to expand our DRS business across the retail landscape. In all geographies that we serve on slide 7,, you can see our methodical progress towards 20% EBITDA, margins in North America. In Q1, EBITDA, margins in this segment expanded by 170 basis points year over year, driving trailing 12 month margins to 19.5%. Revenue mix has been a big contributor to this progression. It was another great quarter of AMS DRS growth in North America as we continue to convert customers and install new DRS units, including the Pandora win that we mentioned last quarter. Global Services revenue growth was also strong this quarter despite an elevated prior year period. Comparable Our shift to higher margin flexible service recurring revenue is unlocking operational productivity across the business. Over the years we’ve improved and standardized our service delivery network to enable profitable growth. This improvement is clear in the numbers as we continue to deliver improvements in revenue per vehicle and labor as a percentage of revenue. This is setting the stage for continued momentum post closing of our NCR Atlios, acquisition and as we layer on additional volume, to our more efficient network, I’m confident increased scale will position us to drive further expanded margins well beyond our preliminary 20% targets. Turning to …
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