Brink's Beats Q2 Sales Estimates By A Whisker, EPS Miss, Reaffirms FY23 Outlook

The Brink's Co BCO reported Q2 2023 revenue growth of 7% Y/Y to $1.22 billion, +11% Y/Y on a constant currency basis, beating the consensus of $1.21 billion.

Sales by segments: North America $397 million (-1% Y/Y), Latin America $334 million (+9% Y/Y), Europe $286 million (+26% Y/Y) and Rest of the World $199 million (flat Y/Y).

Adjusted operating profit increased by 6% Y/Y to $132 million, and the margin contracted by 10 bps Y/Y to 10.8%.

Adjusted EBITDA improved by 4% Y/Y to $194 million.

Adjusted EPS fell 12% Y/Y to $1.18, missing the consensus of $1.33.

The company recorded a $12 million Y/Y increase in security losses in Q2 due to a large loss event in the global services line of business.

As of June 30, 2023, Brink generated a non-GAAP operating cash flow of $153.9 million and a free cash flow of $65.5 million in the quarter.

FY23 Outlook: Brink reiterated the outlook for revenue at $4.80 billion –$4.95 billion (vs. consensus $4.91 billion), adjusted EPS at $6.45-$7.15 (vs. consensus $6.80), and free cash flow before dividends of $325 million – $375 million.

The company continues to expect adjusted operating profit of $625 million – $675 million, adjusted EBITDA of $865 million – $915 million, and adjusted EBITDA margin of about 18.3%.

"We are proud of our performance in the second-quarter and the progress we are making to transform our business through digital retail solutions and ATM managed services. Record second quarter revenue was highlighted by 19% organic growth in AMS and DRS and continued strong pricing discipline in cash and valuables management. Double-digit organic operating profit growth includes price and revenue mix benefits, productivity gains, and the flow-through from the execution of our restructuring plans partially offset by a security loss in our global services business," said Mark Eubanks, president and CEO. 

Price Action: BCO shares are trading lower by 8.9% at $66.53 on the last check Wednesday.