Christopher Newport University's 2019 CFA Challenge Equity Report

CFA Institute Research Challenge
Hosted by
CFA Society Virginia
Team B
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Institute Research Challenge with regard to this company's stock

CFA INSTITUTE RESEARCH CHALLENGE 2019 1
Investment Summary
We issue a BUY recommendation on The Brink’s Company (BCO) with a target price of $85.14,
representing a 17.61% upside from the closing price of $72.39 on January 18, 2019.
This valuation is derived from a 70%/30% split of a sum of parts model and a residual income
model using the ROE method. Our recommendation is built upon these three observations:
(1) value adding strategic initiatives by new management (2) strong EBITDA growth in a mature
industry, (3) solid footing in a saturated industry.
1) Value adding strategic initiatives by new management. Brink’s has introduced clear and
realistic goals aimed at increasing EBITDA. 2016 EBITDA was $368 million, and 2018 Guidance
suggests EBITDA of approximately $511 million, representing a CAGR of 17.8%. This growth is
being achieved primarily through a three-year plan designed to increase market share and
to fuel organic growth by acquiring businesses complementary to their own and by
leveraging technology. Since the plan’s inception at the beginning of 2017, Brink’s has
completed approximately $1 billion in core-core and core-adjacent acquisitions and has
increased operating margins from 7.4% to 10.1%, a CAGR of 16.8%. Brinks’ current initiatives
coincide well with the recent boom in the legal cannabis industry, and we believe Brink’s multi-
year partnership with Canopy Growth will place them at the forefront of the cannabis
protection and transportation space.
2) Strong EBITDA growth in a mature industry. The cash in transit industry is experiencing
growth in parity to the growth of the economy. The industry is expected to experience a small
decline in growth leading to an overall growth rate of just under 2% in 2019. Brinks’ EBITDA
margin has trended upwards since 2014 from 3.8% to 12.6% in 2017. Relative operating
efficiency above depreciation, amortization, and tax has increased. This puts Brink’s on par
with the industry average of 16.2%.
3) Solid footing in a saturated industry. The cash management industry is saturated, as 61%
of the cash management industry is currently controlled by the 5 largest cash management
companies. Brink’s is positioned to grow faster than global cash in circulation, with 2018
estimates at 8% and 6% respectively. As the largest company with a 22% market share,
Brink’s has positioned itself as leading brand in the cash in transit industry.
The Brink’s Company was founded in 1859 by Perry Brink, began trading as a public
company in 1937, and is now a global leader in various security-related services.
Key Figures
Market Cap $3,638.8M
Annual Dividend $0.60
Dividend Yield 0.83%
Beta (5 Year Weekly) 1.029
Shares Outstanding 50.6M
TTM P/E N/A
52 Week High $86.85
52 Week Low $59.08
Avg Daily Vol. (100 Day) 432K
Headquarters: Richmond VA
The Brink’s Company [NYSE: BCO]
Valuation as of January 18, 2019
Revenue by Region
Recommendation
Share Price (1/18/2019) $72.39
Target Price $85.14
Upside 17.61%
BUY
Valuation
Sum of Parts Price Target (70%) $109.24
Residual Income Price Target (30%) $28.91
Weighted Price Target $85.14
Projected 2019 Dividends $0.60
Total Return 18.44%
Key Financials 2016 2017 2018E 2019E 2020E 2021E
Revenue (in millions) 3,021 3,347 3,615 3,976 4,066 4,159
EBITDA (in millions) 316 421 496 602 674 707
Net Income (in millions) 35 17 150 209 256 277
EPS 0.69 0.33 2.96 4.20 5.14 5.55
Profit Margin 1.14% 0.50% 4.14% 5.26% 6.29% 6.65%
Revenue Grow th -2% 11% 8% 10% 2% 2%
Sector: Industrials
Industry: Commercial Services & Supplies
Sub Industry: Security & Alarm Services

In the News
Recent acquisitions
Brinks’ acquisition of Dunbar closed as of August 13, 2018. Dunbar, the fourth largest cash
management service in the U.S., provides cash-in-transit services and cash logistics services. Dunbar
is expected to have Q3 revenues of $51 million. 2019 EBITDA specific to Dunbar is expected to be $60
million which includes $15 million of cost synergies. About $40-45 million of cost synergies are
expected by 2021. Some other expected benefits of this is a 6.5-7.0x post synergy Adjusted EBITDA
multiple. This is a strategy of Brinks’ core-core acquisition model. Another advantage of this
acquisition is that Brink’s will be able to fully deploy its excess cash, which will then be financed at
attractive rates. Further, Brinks’ US cash tax savings are substantial, as they will not have to pay U.S.
federal cash taxes for at least 6 years. By 2020, the Dunbar acquisition, once all synergies are taken
advantage of, will contribute to at least 90 cents of Non-GAAP EPS in 2020. A side effect of this
acquisition is an increase in Capex above historical levels in order to support both the Dunbar
acquisition and Brinks’ strategic initiatives. (Fig. 2) Brinks’ acquisition of Brazilian-based Rodoban
closed as of January 7, 2019, which represents Brinks’ 8th and most recent acquisition since 2017 (Fig.
1). Rodoban provides cash-in-transit, money processing, and ATM services primarily to customers in
southeastern Brazil. In the trailing 12 months, Rodoban generated approximately $78 million in
revenue and an adjusted EBITDA of $17 million. This acquisition is expected to affect Brinks’ 2019 net
income. CEO Doug Pertz asserts that the acquisition of Rodoban will expand the service reach of
Brinks’ current operations in Brazil and increase its route density.
In the Pipeline
Cannabis is legal for recreational use in Canada as of October 17, 2018, providing an opportunity for
Brink’s to capture market share as the major transporter of Cannabis across Canada. The legal
cannabis market is expected to grow at a CAGR of 34.6% from 2018 to 2025. Some of the needs these
businesses include guards, surveillance, and transportation of products. Brink’s is uniquely
positioned in the space to meet the growing demands of cannabis-related businesses. Capitalizing
on this, Brink’s has entered into a multi-year agreement with cannabis supplier Canopy Growth to
offer secure logistics and cash management services. Cannabis-related businesses in Canada have full
access to financial institutions, so it is likely to be less cash- dominated compared to the United States
market. Laws in the U.S. regarding the medical and recreational use of cannabis vary between states,
however, cannabis still remains federally illegal. Brink’s is in discussions with U.S.-based financial
institutions that serve customers in states that have legalized cannabis, and is providing cash-based
services to financial institutions in some of these markets. Brink’s is closely monitoring compliance
with all laws, regulations, and guidance.
Business Description
Brink’s is a global cash management and security company headquartered in Richmond, Virginia. It
provides security services to a variety of government and commercial clients in 3 major geographic
segments: North America, South America, and Other Countries. Brink’s introduced a new management
team in 2016 and has been making acquisitions to grow revenues. The company currently has 1200
facilities and 14000 vehicles in 41 countries, and employs 68,000 people.
Geographic and business segments:
The company has 3 business segments: Guarding (6%), Core Services (55%), and High-Value Services
(39%) (Fig. 4). The Brink’s company operates in 117 countries, with 75% of revenues coming from
operations outside the US. The Brink's Company separates its operations into two business units:
Largest 5 Markets (US, France, Mexico, Brazil, and Canada) and Global Markets. The largest 5 markets
account for roughly 65% of the business.
Products and services:
Brink’s offers security services to banks and other financial institutions, mines, retailers, jewelers,
pharmaceutical companies, and other customers globally. In the High Value services segment Brink’s
offers the following services: Brink’s Global Service, money processing, vault outsourcing, CompuSafe®,
and payments. The Core services segment only offers cash-in-transit services and ATM services.
Corporate Strategy:
Three Year Strategic Plan. Strategies 1.0 and 1.5.
In 2016, Brink’s introduced their three-year strategic plan to increase EBITDA. (Fig. 5) There are two
components to this strategy, the first being Strategy 1.0. This strategy focuses on closing the gap
between Brink’s and their competitors in markets where Brink’s want to gain market share and increase
operational efficiencies. Key goals in strategy 1.0 are accelerating organic revenue growth, and
increasing margins. Further, Brink’s plans to introduce differentiated services driven by technology.
Figure 4: Lines of Business
Source: Company data
Figure 2: Capex Percentage of Revenue
Source: Team Assessment, Bloomberg
$106 $124
$185 $200
$230
$180
3.5%
4.2%
5.8% 6.0% 6.0%
4.5%
2015 2016 2017 2018E 2019E 2020E
Capex % Revenue
Figure 3: Client Breakdown
~45%
~40%
~15%
Retail Financial
Institutions
Government/Other
Figure 1: Recent Acquisitions
Source: Bloomberg

The introduction of new trucks is a key factor in their increased margins, as Brink’s is now able to
operate some trucks with a single employee. These trucks also cost significantly less; Capex per truck
is down to $90-95k from $125-140k. Margin growth in North American markets can be attributed to
CompuSafe, which offers high margins and predictable revenue streams, as revenue comes from long
term contracts rather than a single sale. CompuSafe orders are on track to exceed 3,500 in 2018. Which
is in-line with 2017 orders. Growth in Mexico can be attributed to better relations with Unions, which
are helping to drive down labor costs. Growth as a result of strategy 1.0 is organic and has an
estimated 2019 EBITDA target of 490 million.
The second component to Brinks’ three-year strategic plan is Strategy 1.5. The main initiative for 1.5
is growth by means of acquisitions. Brink’s is aggressively acquiring companies within their core and
adjacent markets which will be accretive to EBITDA. Brink’s acquired 6 businesses operating in 5
different countries in 2017. These acquisitions include 1. American Armored Transport, Inc (AATI), 2.
Muitofacil Holding Ltda. and its subsidiary Muitofacil Arrecadacao e Recebimento Ltda., 3. Global
Security S.A. (“LGS”), 4. Maco Transportadora de Caudales S.A. ("Maco Transportadora"), 5. Maco
Litoral, S.A., 6. Temis S.A.S. and its wholly-owned subsidiaries, Les Goelands S.A.S., and Temis Conseil
et Formation S.A.R.L (together "Temis"). The aggregate price of these 6 businesses is approximately
$365 million. In 2018, Brink’s purchased Dunbar for $520 million, and finalized their purchase of
Rodoban for approximately $130 million in cash in the first week of 2019. Brink’s expects their
acquisitions to attribute to a combined 130 million of EBITDA in 2019, resulting in a price-to-EBITDA
multiple of 7.7x.
Industry Overview
Brink’s operates in the security and logistics industry and is considered the world's largest cash
management service. Porter’s Five Competitive Forces can help to explain the landscape of the
armored transportation sub-industry. (Appx. 4)
Buyer Power
Brink’s offers a multitude of services, mainly to commercial banks, that aim to increase the security
and efficiency of the bank’s operations. The main services offered by Brink’s include ATM
replenishment, cash transportation, transportation of other valuable assets, and payment services.
(Fig. 9) The nature of these services make it difficult for any one company to differentiate
themselves, which is a contributing factor to the consolidation of the industry, and as a result,
customers are price sensitive. This can adversely affect Brink’s because they refuse to compete based
on price alone. Customers of money transportation services have a moderate level of power due to
the amount of competition in the industry. Although it is costly to switch security systems, if the cost
can be justified a switch is likely. Retailers and Financial institutions will favor the most cost effective
and reliable options for money processing and transportation.
Corporate Governance
Group Executive Committee & Board of Directors
Starboard Value, a firm known for buying undervalued companies and implementing their own
management changes, reached an agreement with Brink’s to replace their senior leadership following
years of poor financial performance prior to 2016. (Appx. 1) The new executive committee has
experience in route based logistics and IT and will focus the company's efforts towards driving
productivity, and expanding customer offerings through organic growth and acquisitions, as noted in
strategies 1.0 and 1.5, respectively. New CEO Doug Pertz has experience leading turnarounds in large,
multinational companies. Prior to joining Brink’s, Pertz was CEO of Australia based digital information
management firm, Recall Holdings. Pertz was with Recall from 2013-2016, where he then helped
negotiate a $2.9 billion acquisition by Iron Mountain, a Boston based holding company. CFO Ronald
Domanico comes fromRecallHoldings, where he acted as the SVP of strategy and capital markets. Three
of Brinks’ nine-person board of directors were replaced in 2016 with the addition of Doug Pertz,
George Stoeckert, and Ian Clough. At the time of the management change, Starboard Value held a
12.4% stake in the company. They now hold a 2.5% stake.
Share repurchases and Shareholder information
Brink’s has 50.6 million shares outstanding, and announced approval of share buyback program in May
of 2017 worth up to $200 million that will expire on December 31, 2019. A $50 million accelerated
buyback was authorized in December of 2018, in which Brink’s will receive approximately 700,000
shares (Fig. 6), and will leave $106 million remaining for repurchases. BlackRock is the largest
shareholder of Brink’s, owning an 11.3% stake in the company, followed by the Vanguard Group, which
holds an 8.92% stake. (Fig. 7)
Figure 5: Strategic Planning
Figure 7: Ownership Summary
Source: Bloomberg
Investment
Advisor
78%
Hedge
Fund
Manager
16%
All Other
6%
Figure 6: Recent Buybacks
Source: Bloomberg
Figure 8: Major Costs in the Industry
25% 36%
16%
14%
52% 45%
7% 5%
AVERAGE OF I NDUSTRIES
I N SECTOR
ARMORED
TRANSPORTATION
I NDUSTRY (2018)
Other Purchases Wages Profit

Rivalry within the Industry
Thecash management sub-industry is modestly competitive with high barriers to entry. Loomis,
Prosegur, and Garda are among Brinks’ top competitors globally. The sub-industry is driven by
the cycle of cash flowing through the hands of businesses, consumers, and banks. The 2018 G4S
World Cash Report states that the amount of cash in circulation is increasing, but the growth
rate for digital payment settlements is increasing at a higher rate. (Fig. 10) This is one major
concern for the physical cash management services offered by companies such as Brink’s. The
high level of international diversification exhibited by Brink’s and its competitors demonstrates
the importance of economies of scale in the success of a cash management company.
Threat of New Entrants
As mentioned, there is a moderate degree of competition already present in the subindustry, but
the threat of new entrants is low for a few reasons. Cash transportation services require
specialized vehicles, equipment, and trained guards or operators. Institutions are also unlikely to
accept the risk that comes with hiring new companies to transfer valuable assets.
Furthermore, new companies are unlikely to benefit from economies of scale which drastically
reduces the chances of success for a business in this industry.
Supplier Power
The suppliers and manufacturers of the equipment used by money transportation industry
participants cannot afford to drive prices too high because there is a high concentration of
suppliers. The suppliers are also subject to a high level of competition; there are multiple
armored truck manufacturers based in the US alone.
Threat of New Substitutes
Possiblesubstitutes are themost valid threat to thecurrent status quo of money transportation
and processing. Online payment processing systems and the decreasing reliance on cash in more
urbanized countries are the biggest threats to the industry. Venmo and PayPal are two examples
of companies that have the power to disrupt companies like Brink’s. Over half the world has
access to the internet, which gives them the ability to use online payment settlement services.
These convenient services are the main driver of the decrease in cash usage worldwide. The G4S
cash report suggests that the world’s overall reliance on cash is still stable and that there is not
a foreseeable timeline for a completely cashless world. Asian countries have implemented the
most aggressive cashless initiatives, but continents like Africa and South America still rely heavily
on cash. Overall, the cash in transit industry grows at a similar rate to the economy with
estimated yearly growth in the U.S. near 2%. Growth in the future is forecasted to slow to 1.6%
in the next five years. Total industry revenue in the US nears $3 billion with total profit in the
area of $150 million.
Competitive Positioning
Brink’s is the world’s largest cash management company, with nearly 22% of the market share.
According to Freedonia, the global cash market is estimated at $16.5 billion. There are many local
Cash-in-transit companies,however, severallarge carriers, including Brink’s, dominate the majority
of US Markets. The top competitors with Brink’s are Prosegur, Loomis, G4S, and Garda, which
reported 2017 revenues of $2.1 billion, $2 billion, $1.6 billion, and $0.8 billion respectively. The
combined market share of these five companies is equal to 61%. (Fig.12)
Brinks’ geographic diversification helps defend market share. One of the distinguishing
competitivefactors of Brink’s is that it operates within 117 different countries. (Fig.11)This broad
spectrum of clients allows Brink’s to retain business in remote areas where competitors have
higher barriers to entry. The barriers to entry are also high in this industry because of the nature
of the customers being in the retail, financial institution, and government sectors. The Cash
management business is a relatively slow moving and simplistic industry that happens to be in a
mature life cycle stage. More specifically, the Cash-In-Transit business remains basic, however,
it still remains the largest revenue producer for most cash management companies. As a result
of this, the sheer size and name recognition of Brink’s allows the company to prosper. Brinks’
strategy 1.5 that focuses on acquisitions in the “core-core” and “core-adjacent” has led to $1.05
billion in investments between 2017 and 2018. Moving forward, Brink’s will focus on these key
acquisitions for growth, rather than its previous strategy of core organic growth. These
acquisitions will allow Brink’s to maintain, and increase its position as the largest player in the
Figure 11: Global Reach
Source: Company data, Bloomberg
Figure 10: POS Transaction Value ($millions)
Source: G4S Global Cash Report
Figure 9: Industry Segmentation of Services (US)
Figure 12: Market Share
Source: Company data, Bloomberg

cash management industry. While Brink’s is moving toward this acquisition policy, its organic
growth rate of approximately 7% still beats its peer average of 4%.
Different peer group multiples present potential upside. Brink’s compares themselves to two
main competition groups; the first is Cash Management group which includes Prosegur, Loomis,
G4S and Garda, while the second group is the Industrial Services/ Route-Based (ISRB) group that
includes pest control, medical waste management, uniform rental/cleaning services, and non-
hazardous waste management companies. The ISRB group allows for a greater number of
companies to compare to Brink’s, because of the cash management group only Prosegur, G4S,
and Loomis are publicly traded, however, the companies within the ISRB group differ significantly
from Brinks’ business model. According to Brinks’ management guidance for 2019, it will have a
lower operating margin at ~12% than the peer average of the ISRB group at ~17%. (Appx. 3) This
guidance also gives a lower adjusted EBITDA margin of ~16% against the ~24% average. On the
upside, Brink’s estimates it will have a higher 3-year adjusted EBITDA CAGR of ~22%,
substantially beating the average of ~6%. However, overall this comparison group has a broader
reach of sub-industries than the Cash Management group, which is why the multiples, specifically
the EBITDA multiple, are used to value Brink’s.
Dupont analysis reveals Brink’s is increasing leverage. A Dupont Analysis of Brink’s based on the
TTM shows Brink’s has becomeheavily reliant on debt to finance its assets. (Appx. 5) Its leverage
ratio of 7.72 confirms this, but it is not the only highly leveraged company within the cash
management space. Prosegur has a leverage Ratio of 8.01, but also justifies this level by having
a ROE over 130%. Brink’s only manages to have a 7.31% ROE during this same time period, but
this can also be explained by Brink’s only recently issuing large amounts of debt in 2017. (Fig.
15) Soon, Brinks’ investments in Dunbar, Rodoban, and a new fleet of trucks, will start producing
positive financial results. Brink’s also trails its peer group in profit margin, but this can be
explained by having by far the highest effective tax rate of 86.9% in 2017 (Fig. 31). This difference
in effective tax rate is a result of Brinks’ competitors being headquartered in different countries,
and therefore subject to different tax laws. (Appx.29) Brinks’ tax rate of 4.7% on foreign earned
income is higher than the cash management group average of 3.6%, and excluding the
adjustments made for the new tax reform, Brink’s still has the highest effective tax rate at 40%.
Global ATM growth fuels the entire Industry. A key factor in Brinks’ business is ATM services,
which is categorized under their “Core Services” line of business. This lineof business grew 7.63%
between 2016 and 2017. However, this segment becoming a smaller portion of Brinks’ business,
with a 2.87% reduction of total revenue during the same time period. The growing number of
ATMs is driving growth of this industry, with the global growth rate of 6.03% between 2016 and
2017 of ATM’s correlating with the growth of Brinks’ “core services” line of business. Global ATMs
installed are expected to reach 4 million by 2021 (Fig. 14), however, this ATM growth benefits
Loomis and Prosegur more than Brink’s because a larger portion of their revenues come from
cash-in-transport services at 63.0% and 65.9% respectively.
Financial Analysis
Strong top-line growth expected to continue. Brinks’ annual revenue has increasedsteadily since
2016, and this trend is expected to continue following recent acquisitions. (Fig. 16) The revenue
growth of 10.8% in 2017 marked the highest YoY rate since 2011. However, Brinks’ net income
over the last 4 quarters is negative $120 million. The two primary reasons for this negative net
income are an increase in non-operating losses, and an increase in income tax expense. Non-
operating loss over the last four quarters totals $233.9 million and is an increase of 153% from the
over the fiscal year 2017 period. Income tax expense has also been significantly higher, jumping
to $157.7 million in 2017, which represents an increase of 100%. This was a result of Brink’s
expensing the change in income tax as a result of the 2017 tax reform. These losses from tax
reform will be corrected moving forward.
Core Services are positioned to grow with Macroeconomic trends. Brink’s operates under three
primary lines of business: Core Services, High-Value Services, and Guarding, which account for
55%, 39%, and 6% of revenues respectively. The Core Services segment, which incorporates Cash-
in-Transit (CIT) and ATM services, experienced an increase in revenues by $400 million, totaling
$2 billion for the segment, and should see further growth from the Dunbar acquisition moving
forward. According to Beroe, the Global Cash-in-transit service is forecasted to grow at a CAGR
of 6-8 percent, reaching a size of $20 billion in 2018. This will benefit Brink’s as CIT represents
the company’s largest segment of revenue. An additional driver for this segment is the growing
number
Figure 16: Revenue
Source: Bloomberg
2700
2800
2900
3000
3100
3200
3300
3400
3500
3600
3700
2014 2015 2016 2017 Last 4
Quarters
Figure 15: Long-term Debt
Source: Bloomberg
0
200
400
600
800
1000
1200
2013 2014 2015 2016 2017
Figure 14: Global Number of ATMs
Source: Team Assessment, G4S
Figure 13: Cost Bridge
Source: Team Assessment
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Revenue COGS SG&A D&A EBIT
78%
14%
4%
4%

of ATMs. Developing regions are increasing the number of ATMs, which is a catalyst for Brink’s
services, especially with acquisition based and synergistic growth in developing countries.
Profitability is increasing in both the North and South American segment. Approximately 7,000
workers reside in the United States, which is only 11.2% of the total, but the U.S. represented
23.17% of the Brinks’ total revenue in 2017. The higher wage cost in the U.S. hurts Brinks’
profitability in this segment, but this cost should start to decline from the one man crews Brinks’
new truck fleet will accommodate. The North American segment only provided 19.9% of global
operating income in 2017, but accounts for 39% of the total revenue. However, this segment has
shown a large amount of growth in the 3 reported quarters of 2018, specifically inQ3 2018, where
revenue from North America was 45% of the total business, and operating income was 30.4%.
While this is a large portion of the business, the South American segment presents greater
opportunity for growth, as it currently accounts for 46% of global operating income, but only
26% of total revenue. The South American segment revenue increased 28.64% in 2017, and this
trend should continue moving forward. The Rodoban acquisition, which was completed on
January 7th, 2019, should be a catalyst for this growth. This acquisition increases Brinks’
presence in its most profitable segment, and the Rodoban acquisition is expected to generate
approximately $80 million in annual revenue.
Increasein CapEx will fuel Strategy 1.5. Brink’s estimates that the CapExwill return 6% ofrevenue
in 2018 and 2019, from what they describe as “strategic initiatives”. Brinks’ CF/CapEx ratio was
1.29 in Q3 2018. This ratio has been decreasing over the last four quarters,however, it is expected
to increase with the acquisition of Rodoban which occurred in Q1 2019.
Operating in a mature industry will limit future growth. In our Pro Forma analysis, the
management guidance revenue growth rates of 8% and 10% for 2018 and 2019 were used, as we
believe Brinks’ recent acquisitions make these goals achievable. However, for 2020 and beyond,
we estimate a terminal growth rate of 2.27% based on the long term real GDP growth in the
five largest countries Brink’s operates (Fig. 22b). This rate was chosen because Brink’s is in a
mature business stage. Soon Brink’s will no longer be able to grow faster than the economy as a
whole, and operating efficiency initiatives will be the main source of value adding activities.
Management initiatives will drive growth in operating margins. Brink’s discusses its strategy in
three parts: 1. Introduce differentiated services, 2. Accelerate profitable growth, and 3. Close the
gap- increase operational excellence. Brink’s is focusing on growing its “high-value services” that
could account for much higher revenue growth than their core services sector. Brink’s is working
towards increasing their account share with large Financial Institution customers, and with the
acquisition of Rodoban and Dunbar, we believe this will be achieved. Brink’s also aims to increase
its focus on smaller retail customers, which would require greater costs for less revenue. “Closing
the Gap” is important for Brink’s because it requires the company to increase its margins.
Reducing costs and streamlining services is a key part of their business because of economies of
scale. Most of the cash delivery industry is already spoken for, which is why Brink’s looks to
increase their business through acquisitions. Brink’s expects the acquisition of Rodoban to
provide a purchase multiple near 6.5x. Further, Brink’s estimates that total acquisitions will
contribute $25 million to EBITDA in 2019.
Absence of U.S. taxes will grow the bottom line. Brinks’ effective tax rate of 86.9% was due to
an increase of 47.4% on account of the 2017 tax cuts and jobs act. For the year 2018, we have
estimated the company’s tax rate to be 32.74%, based on the weighted average of the tax rates
of the countries Brink’s operates in, accounting for US taxes on foreign subsidiaries. This estimate
assumes that Brink’s will have an effective tax rate of zero in the United States. The effective
tax rate of zero comes from net losses in previous years that will be carried over against US Taxes.
These losses have no effect on taxes Brink’s will pay on foreign earned income.
Diesel Prices will have little effect on operational income. U.S. diesel prices have been rising
since February 2016, gaining nearly 50%. According to the U.S. Energy Information
Administration, the average price per gallon of diesel fuel in the US is currently $2.93, and is
expected to increase to $3.13 in 2020. (Fig. 21) On a global scale, OPEC and producers announced
in December that they plan to cut production beginning in January 2019, which will also lead to
price increases. We estimate that Brinks’ fleet of nearly 14,000 trucks will only incur a cost
increase of $12.2 million per year if the diesel price estimate of the EIA is correct (Appx. 2).
Figure 18: WACC
10 Yr Treasury Bond 2.78%
Market Risk Premium 7.97%
Beta 1.029
Cost of Equity 10.98%
Pre-Tax Cost of Debt 2.69%
After-Tax Cost of Debt 2%
Tax Rate 34.20%
Target Net Debt (USD) 1,519
Market Capitalization (USD) 3,527
Enterprise Value (USD) 4,753
WACC 8.71%
WACC Computation
Figure 17: ROIC Comparison
ROIC WACC EVA Spread
Brink's 0.48% 8.79% -8.31%
Loomis 10.81% 16.80% -5.99%
G4S 8.03% 7.28% 0.75%
Prosegur 27.49% 7.83% 19.66%
ROIC Comparison
Figure 20: Revenue Growth Rates
Figure 19: Revenue per Employee YoY
Growth
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2016 2017
Revenue Per Employee Number of Employees

Of Brinks’ global reach, France offers the priciest diesel at $6.09 per gallon. For our cost estimates,
we assumed the same price growth rate in the US for all operations of 7%. We also assumed
France’s current diesel price as the benchmark for the Rest of World segment, skewing this
segment’s prices even higher. We believe that a $12.2 million cost increase is immaterial to Brinks’
success.
Low ROIC compared to peers. In 2017 Brink’s had an ROIC of .48%, the lowest among its publicly
traded competitors, Loomis, G4S, and Prosegur with 10.81%, 8.03%, and 27.49% respectively. (Fig.
17) This is largely due to Brink’s high effective tax rates as a result of operating in foreign
countries. While its competitors also operate in multiple countries, they have the advantage of
having lower foreign earned income taxes. (Appx. 29) Brink’s has a WACC of 8.79%, giving it an EVA
of -8.31%. Loomis, G4S, and Prosegur have EVAs of -5.99%, .75%, and 19.66% respectively.
Valuation
We issue a BUY recommendation on The Brink’s Company (BCO) with a target price of $85.14,
representing a 17.6% upside from the closing price of $72.39 on January 18, 2019. Our target
price is based on a mix of a sum of parts model using an unlevered DCF and the EBITDA multiple
method to value each part of the business with a target price of $109.24 and a residual income
model using the ROE method with a target price of $28.92. We attributed weights of 70% and 30%
respectively. The choice of attributing more weight to the sum of parts model is driven by the
EBITDA multiples of competing cash management companies being similar to Brink’s. The residual
income model was given less weight because Brinks’ ROE of 7.3% is an outlier in its peer group.
Prosegur, G4S, and Loomis have ROEs of 23.9%, 21.4%, and 29.9% respectively. Additionally, when
forecasted, ROE is less likely to be accurate than the EBITDA growth rate.
Pro Forma: Pro Forma Financial Statements were used to forecast financial data through the year
2021, estimating a base, bear, and bull scenario, each of which was calculated using different
revenue growth rates. (Fig. 20) The base case was calculated using Brinks’ management guidance
for 2018 and 2019, 8% and 10% respectively, while a terminal growth rate of 2.27%, calculated
using real GDP growth in the five largest countries Brink’s operates in (Fig. 22b), was used for the
years 2020 and 2021. The bear and bull cases were then estimated by constructing a 99.7%
confidence interval using the historical revenue growth rates for the past 29 years, and then
removing the outliers in 1998, 2001 and 2004. The accounts within the Pro Forma were then
calculated as a percentage of revenue (Appx. 18). Two assumptions were made in regards to
Brinks’ operating efficiency: Cost of revenue, and SG&A expense will both decrease as a percent
of sales because of projected synergies from Brinks’ recent acquisitions of Dunbar and Rodoban,
among others. The projected synergies from these statements were also taken into account in
the sum of parts model, and the forecasted ROE and EPS were used in the residual income model.
(Appx. 19)
Estimating the risk-adjusted discount rate: We apply a WACC of 8.61% (Fig. 18) to discounting
the FCF. The computation for the cost of equity is based on the capital asset pricing model using
the following inputs: 1) the risk-free rate equals the 10-year Treasury bond rate 2) the US market
risk premium of 8.19% 3) Brinks’ 5-year weekly beta. This calculation was also used in the residual
income model.
Figure 22b: Terminal Growth Rate
Source: Team Assessment, OECD
United States 38.12% 2.43% 0.93%
Canada 7.97% 2.30% 0.18%
Mexico 17.38% 2.57% 0.45%
Brazil 14.04% 2.54% 0.36%
France 22.49% 1.56% 0.35%
2.27%
Weighted Terminal Growth Rate
Weighted Terminal Growth Rate
Country Weight
LT Real GDP
Growth
Weighted
GDP Growth
Figure 21: Diesel Prices
$2.65
$3.18 $2.93
$3.13
2017 2018 Current 2020E
Figure 23: North America DCF
Figure 24: South America DCF
Figure 22a: Real GDP Growth

Terminal Growth: The terminal growth rate was calculated by weighing the long-term real GDP
growth of the Brinks’ five largest markets according to its 2015 income statement (Fig. 22b) before
Brink’s changed its reporting standards to North America, South America, and Rest of World. The
result of this calculation was a positive terminal growth rate of 2.27%. While Brink’s does
significant business in high growth countries in South America, the rapid inflation in those countries
brings down the real GDP growth numbers.
Sum of parts valuation: The Sum of parts valuation method assumes that a business that can be
broken into discrete parts will have discrete valuations for each segment of the business. This
model was selected because Brink’s operations in different segments of the world produce
different results and should be valued individually. An unlevered DCF was used to determine the
fair value of each part of the business. The growth rates for each part of the business were
forecasted in the pro forma as a percent of revenue. In order to forecast the EBITDA growth rate
for each part of the business, we found the average deviation of the geographic segment growth
rate over the past 5 years from the total EBITDA growth rate. (Appx. 25) The respective EBITDA
multiple was applied to the present value of the 2021 cash flow. (Fig. 23-25) The value of each
segment was combined and net debt and non-operating assets and liabilities were removed. This
resulted in a share price of $109.24. (Appx. 26)
Sum of Parts reveals an undervalued Share price: To assess the DCF valuations used in the sum
of parts model, we conducted a sensitivity analysis on the most influential inputs, the terminal
growth rate, and WACC. (Fig. 29) Even a pessimistic assumption of a 9.5% discount rate and a
terminal growth rate of .3% yield an upside of 10%. In order to justify a sell, the company’s
revenues would need to decline by more than 10% in one year. Cash usage is still growing in many
of the countries Brink’s operates in, making a decline of that magnitude unlikely.
Multiple Analysis: The EV/EBITDA multiple was chosen as the best multiple to use in calculating
the fair value of the company. Brinks’ EBITDA multiple of 11.42 is in line with its competitors in
the cash management industry. Prosegur EBITDA multiple is 7.95, G4S and Loomis are at 8.05, and
6.97, respectively. The P/E ratio cannot be used because the company has negative earnings for
the last 12 months. We did choose not to use a PEG multiple for a similar reason. Brink’s has a PEG
of 1.14, which in comparison to Prosegur at 2.09 and G4S at 1.02 shows that Brink’s is fairly valued,
Loomis has negative earnings growth over the last 12 months. Without a PEG ratio, the model
would not allow for enough comparisons. We used EV/EBITDA because Brinks’ competitors have a
similar ratio and it is fairly valued compared to them in that respect.
Residual Income Valuation: The ROE based residual income model was chosen because it
captures the economic profitBrink’s is providing toshareholders. Because Brink’s has seldom raised
their dividend, dividend based models are not optimal in predicting fair value. Brink’s has
increased the leverage of the company by issuing over $1 billion in debt since 2016, which has
produced high ROE measures in the Pro Forma forecast, but due to competitive pricing pressures,
and the maturity of the cash management industry, the model assumed a decay in ROE of 5%, i.e.
previous ROE x (1 -5%), for each year following 2021. This basemodel produced a positive residual
income until 2036, and a target price of $28.91, which represents a 60% downside. (Appx. 21)
Figure 28: EBITDA Multiples
0.00
5.00
10.00
15.00
20.00
25.00
North America South America Rest of World
Risk to the Target Price
Our growth assumptions may not hold if the demand for cash in transit declines in 2019-21 or if Brink’s
experiences a change in cost structure. To determine the effect of these changes on our price target we
ran a Monte Carlo simulation. (Fig. 30) We also conducted a sensitivity analysis to determine the effect
of revenue growth and the discount rate. Additionally, we estimated a bull and bear case for our pro
forma and valuation models.
Monte Carlo Simulation. We varied the revenue growth, tax rate, and other components of the financial
statement projections that had an impact on the EBITDA, and the ROE (APPX 30). 99% of outputs result
in a price above 72.39 and are in line with a BUY rating. According to the simulation, there is a 10.05%
probability of a target price above 17.6% upside or $85.14 per share. We also calculated the risk adjusted
price of $80.34; 51% of the results were greater than the current risk-adjusted price. After running the
simulation, we conducted a regression analysis to determine which variables were most correlated with
the share price (APPX 31). The R-squared value of the regression models were as follows: tax rate = 0.01,
sales growth rate = 0.989, EPS = 0.85, ROE = 0.849, depreciation and amortization, property plant and
equipment, net working capital, and capital expenditure all were = 0.989. These regressions show that
the tax rate only explains 1% of the share price.
Figure 25: Rest of World DCF
Figure 26: Sum of Parts
Figure 27: EBITDA Bridge
-1.0%
1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
EB
ITD
A
m
argin
2
01
7 C
O
G
S
SG
&
A
O
th
er
O
p
.Exp
EB
ITD
A
m
argin
2
02
1
E
12.6%
+2.0%
+2.0% +.4% 17.0%


Bull and Bear cases: In order to get the bull and bear cases, we created a 99.7% confidence interval of
the revenue growth rates of the past 20 years. We added the upper bound to the revenue growth rate to
get the bull case in our models and added the lower bound to get the bear case. The bull and bear cases
represent target prices of $105.26 and $66.35 respectively. (Fig. 31) In order for the bear case to hold
true Brink’s would have to be unable to sustain its current growth rate (APPX 22,23,26,27).
Investment Risk
Strategic Risks
Work within a highly competitive industry: Cash management is a highly consolidated industry,
specifically in the six largest countries Brink’s operates in: The United States, Canada, France, Mexico,
Brazil, and Argentina. Its main competitors consist of: Garda, Loomis, and Prosegur. The consolidation
of this industry has led to an increase in pricing pressure, and Brink’s refuses to compete based on
pricing alone, because it believes to hold significant competitive advantages in brand recognition,
reputation of high level service, logistics expertise, possessing an extensive global network, proven
operational excellence, and high-quality insurance coverage. However, continued pricing pressure could
have an adverse effect on Brinks’ market share and profitability.
High Fixed Cost: The cash management business involves significant fixed cost, specifically as it
pertains to operating a fleet of armored vehicles and maintaining a network of secure branches, which
has made Brink’s reliant on debt to finance its operations and strategic acquisitions.
Dependency on foreign markets: Brink’s currently operates in over 100 countries, resulting in 77%
of 2017 revenues coming from operations outside of the US. Furthermore, 46% of Brinks’ operating
profit came from its South American operations. These operations are of higher risk than its North
American and European segments of business, as six men crews are required for added security
measures. The larger crews and high inflation rates can significantly affect Brinks’ cost associated with
its South American operations. Several risk associated with being heavily reliant on foreign markets
include: differing legal and regulatory standards, increased difficulty in staffing and managing operations,
and effects from changes in the political climate. Another risk involved with operating in foreign
markets is exchange rate risk.
Decrease in use of cash: While total cash in circulation is growing, and cash currently has an increasing
relevance in our economy, this trend will not always continue. In some countries there has been a decline
in the use of cash as a payment method and some countries have seen a decreasing currency in
circulation vs GDP ratio. Some of the companies that have shown red flags for future cash growth are
countries that Brink’s is operating in. In Canada, there has been a rapid decline in cash withdrawals in
the past three years, and Brazil is one of the countries where GDP growth is outpacing currency in
circulation. The United States is one of the least cash dependent countries with only 32% of
transactions being made in cash. Card spending has been growing at an increasing rate, with global card
spending having the same volume as global cash spending. It is projected for the global card spending to
outpace cash spending in the next one to two years. The cash usage cycle is also trending smaller in
recent years with less interaction between retailers and commercial banks. Cash tends to be passed
among retailers more often, decreasing the frequency that cash transportation is needed.
Market Risks
Volatility and Bear Market: We are currently going through a period of uncertainty in US markets.
Investor confidence has been shaken by the recent fed rate hikes. Recently there has been an inversion
of the 3 and 5-year Treasury bond yields. This is typically the leading indicator for a recession. The
Russell 2000, the index Brink’s uses as a benchmark, has also experienced a correction of 10.4%.
This could be a concern for investors.
Figure 29: Sensitivity Analysis Figure 30: Monte Carlo Simulation
Figure 31: Bull, Bear, and Base
Scenarios
0.18 7.9% 8.1% 8.3% 8.5% 8.7% 8.9% 9.1% 9.3% 9.5%
4.3% 25% 24% 23% 22% 21% 20% 19% 18% 17%
3.8% 24% 23% 22% 21% 20% 19% 18% 17% 16%
3.3% 23% 22% 21% 20% 19% 18% 17% 16% 15%
2.8% 23% 22% 21% 19% 18% 17% 16% 15% 14%
2.3% 22% 21% 20% 19% 18% 17% 16% 15% 14%
1.8% 21% 20% 19% 18% 17% 16% 15% 14% 13%
1.3% 20% 19% 18% 17% 16% 15% 14% 13% 12%
0.8% 19% 18% 17% 16% 15% 14% 13% 12% 11%
0.3% 18% 17% 16% 15% 14% 13% 12% 11% 10%
TerminalGrowthRate
WACC

Financial Risks
Foreign exchange risk: Brink’s loses roughly 3 percent on the foreign exchange rate every year.
This exposure comes from the operating in a large number of countries, specifically in South
America. Many of the South American currencies that Brink’s transports are subject to large
fluctuations in price, and these large fluctuations also effect Brinks’ labor cost from having to give
employees frequent raises. While in European countries, the margins are smaller, so the effects of
foreign exchange rates significantly affect Brinks’ bottom line. 2018 guidance suggests actual
revenue growth to be 8%, but accounting for constant currency, the growth would have been
14%. The effects of gains or losses on foreign currencies also have tax implications.
Interest rate risk: Brink’s relies on debt to finance its operations and frequent acquisitions, seven
since March of 2017, and has taken on significant amounts of long term debt since the end of
2016, increasing from $248 million to over $1.4 billion on its third quarter 2018 report. According
to all major credit rating agencies, Moody’s, Fitch, and Standard & Poor’s, Brinks’ bonds are below
investment grade with ratings of Ba1, BB+, and BB+ respectively. (Fig. 33) This suggest its bonds
are not at risk of defaulting in the short term, but face ongoing uncertainty and are sensitive to
negative business, financial, and economic conditions. Any further downgrade in Brinks’ bonds
could hurt its ability to borrow, and have an adverse effect on their financial condition.
Regulatory and Legal Risks
New tax laws: In addition to being subject to United States corporate taxes, Brinks’ income is also
taxed at the corporate rate in the countries where the income is earned. Prior to the 2017 tax
reform, the taxes paid on earned income in foreign countries exceeded the maximum that can be
deducted on the US tax return. In the years that the maximum was exceeded in South American
countries with high tax rates, the company had an effective tax rate of over 100%. Brink’s was
allowed to defer payment for these taxes and apply the losses on excess taxes against the next
year’s taxable income. The new tax codes do not allow for those losses to be deducted beginning
in 2018. Brink’s will not see any benefit as a result of the lowered tax rate as a result and has the
possibility of having a larger amount of taxes payable in the future. The Tax cuts and jobs act also
prevents debt issued to purchase treasury stock from being deducted on the tax return. Brinks’ last
share buyback was in May of 2017, this law is unlikely to affect them in the near future, but could
have an impact on a longer time horizon.
Regulatory: Brink’s is subject to regulation from all levels of government within the countries it
operates. The U.S. Department of Transportation, along with state authorities, sets regulations in
regards to the safety of its equipment and operations. Other countries Brink’s operates in have
varying degrees of regulation, some of which involve permit requirements and forbid foreign
companies from providing different types of security services. Any changes in current laws could
disrupt Brinks’ operations and increase its cost.
Acquisition fueled growth: Brink’s announced in 2016 that its strategy was to acquire competitors
to increase its market share in the United States and foreign subsidiaries. Currently, a majority of
the company’s revenue growth has been fueled by acquisitions. Antitrust laws in the countries
Brink’s operate in vary. This exposes them to antitrust suits as they continue to make acquisitions.
Figure 32: Tax Rate Breakdown
Brink's
35%
(0.20)
3.40
1.80
47.40
2.00
0.90
(1.30)
(3.50)
1.40
87%
2017 Tax Rate Breakdown
US Federal Tax Rate
Accelerated US Income
Adjustments to Valuation Allownaces
Foreign Income Taxes
Tax Reform
French Business Tax
Tax on earnings of foreign affiliates
State Income Tax, net
Share-based compensation
Other
Effective Tax Rate
Figure 33: Credit Rating
Source: Bloomberg
Figure 34: Foreign Exchange Effects
1.11%
0.40%
0.36% 0.38%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
2015 2016 2017 2018E
Figure 35: Dollar Strength Index
Source: Bloomberg
84
86
88
90
92
94
96
98
100
1
0
/2
0
/2
01
7
1
1
/2
0
/2
01
7
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/2
0
/2
01
7
1
/2
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/20
1
8
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/20
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8
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/2
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/20
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/20
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/20
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9
Figure 36: Risk Matrix

APPENDIX 1 Management
North America
Estimates MPG Estimates Miles/Year Number of Trucks* Current Diesel Price Future Diesel Price Price Now Price Then Cost Difference
10 30,000 6,228 $2.93 $3.13 $54,744,120 $58,480,920 $3,736,800
8.4 30,000 6,228 $2.93 $3.13 $65,171,571 $69,620,143 $4,448,571
South America
10 30,000 4,027 $4.44 $4.75 $53,639,640 $57,394,415 $3,754,775
8.4 30,000 4,027 $4.44 $4.75 $63,856,714 $68,326,684 $4,469,970
Rest of World
10 30,000 3,704 $6.09 $6.52 $67,672,080 $72,409,126 $4,737,046
8.4 30,000 3,704 $6.09 $6.52 $80,562,000 $86,201,340 $5,639,340
Total Cost Difference (Increase in Brink's cost from rise in diesel price)
10 MPG $12,228,620
8.4 MPG $14,557,881 presentation concludes that Brink's has ~ 14,000 truck in the current fleet
* The number of trucks has been estimated from 2017's annual report, to the latest investor presentation. This
APPENDIX 2 Effect from Fuel Price Changes
Source: Source: global petrol prices.com, EIA

Main Categories Subcategories Assesment
Buyer Concentration The buyers of these services are almost exclusively banks, restaurants, or retail stores.
Product differentiation
Cash management services are generally similar with some companies offering a slight
competitive advantage
Buyer Profit Margins (Varied) Retail can have high margins but restaurants can have low margins
Buyer volume Higher in less developed and less wealthy countries
Number of Substitues
Electronic cash management is the primary threat to the physical cash management
service providers.
Relative Price
Electronic payment settlement services can offer large benefits in terms of cost and
efficiency as per transaction costs.
Relative quality
There are some qualities of physical cash that are difficult to replicate (such as anonymity),
but the convenience factor of electronic payments is the biggest selling point.
Incentive to substitute
Depending on the society the incentives can be strong or weak. Asian countries are moving
towards cashless societies where physical cash is treated as inferior.
Concentration A few dominant worldwide companies (Brink's, Loomis, Garda)
Size of Competitors Similar size to Brink's in terms of revenue
Industry Growth Slow but stable - 2% (in line with the economy)
Fixed Cost High from having to maintain a vehicle fleet, along with maintaing a network of secure branches
Strategic Stakes Brink's recent aquisition of Dunbar demonstrates the strategic stakes for rival firms in the industry
Economies of Scale
One of the most important factors for succeeding in the industry is the ability to establish
economies of scale
Product Differentiation Difficult to offer competitive advantage over large firms
Capital Requirements Establishing a new armored transportation firm would require a significant contribution of
Expertise Requirement
Route optimization and analysis can greatly increase efficiency and new firms are less
likely to have access to these tools or the ability to optimize the few routes they have.
Cost Advantage New firms are unlikely to offer cost savings over existing large firms
Legal and Regulatory barriers
In the US specifically there are no large regulatory barriers for participating in armored
transportation services.
Defense of Market Share
Large firms will spare little expense to grow and defend their market share in existing
and new markets.
Supplier concentration Large number of armored truck manufacturers
Product differentiation Armored trucks are moderately standardized
Dependence on the Industry
Manufacturers are likely to build other specialty vehicles as there is not a constant
high demand for armored trucks.
Threat of
New Entrants
Supplier Power
Buyer Power
Threat of New
Substitutes
Rivalry within
the Industry
APPENDIX 4 Porter’s Five Forces

APPENDIX 5 Brink’s Vs. Peers
Source: Bloomberg, all values are based off the TTM
Company Business Description Operating Margin Adj. EBITDA Margin Capex (%of Revenue) 3-Year Adj. EBITDA CAGR EV/ Adj. EBITDA
Brinks Cash Management 12% 16% 5% 22% 8x
Cintas Corporation Uniform Rental and Cleaning Services 17% 22% 4% 17% 15x
Iron Mountain, Inc Information protection and storage 19% 35% 10% 12% 12x
Rollins, Inc. pest control 18% 22% 2% 9% 32x
ServiceMaster Global Holdings, Inc. pest control 19% 23% 2% 0% 18x
Stericycle, Inc. Medical waste management 18% 22% 4% -3% 9x
UniFirst Corporation Uniform Rental and cleaning Services 10% 16% 7% 0% 10x
Waste Management, Inc. Non-Hazardous waste management 19% 29% 10% 6% 11x
Average 17% 24% 6% 6% 15x
Industrial Services/ Route-Based MultiplesAPPENDIX 3
Source: Investor Presentation
Company Asset Turnover Profit Margin Leverage Ratio ROE
Brink's 1.32 0.72% 7.72 7.31%
Loomis 1.15 8.50% 2.19 21.41%
Prosegur 1.07 15.96% 8.01 136.74%
G4S 1.42 3.23% 1.39 29.89%
Peer Average 1.24 7.10% 4.8275 48.84%
Company
Total Debt to
Total Equity
Total Debt to
Total Capital
Total Debt to
Total Assets
Total Debt
to EBITDA
Brink's 365.67% 78.53% 40.42% 2.94
Loomis 56.03% 35.91% 26.00% 1.27
Prosegur 293.59% 74.59% 45.38% 1.51
G4S 289.58% 74.33% 45.62% 3.94
Peer Average 251.22% 65.84% 39.36% 2.42
Company Quick Ratio Current Ratio Cash Ratio
Brink's 1.51 1.78 0.74
Loomis 1.12 1.40 0.33
Prosegur 1.02 1.48 0.54
G4S 0.81 1.06 0.39
Peer Average 1.12 1.43 0.50
Company Gross Margin EBITDA Margin Operating Margin Pretax margin Profit Margin
Brink's 22.07% 12.56% 7.71% 5.42% 0.72%
Loomis 27.45% 18.09% 11.84% 10.92% 8.50%
Prosegur 36.04% 26.73% 23.40% 23.09% 15.96%
G4S 17.83% 8.02% 6.16% 4.93% 3.23%
Peer Average 31.75% 22.41% 17.62% 17.01% 9.23%
Profitability
Dupont Analysis
Leverage
Liquidity

APPENDIX 6
Altman Z - Score 2016 2017
Income Statement
Net Sales 3020 3350
Operatiung Income 36 17
Balance Sheet
Current Assets 844 1490
Total Assets 1990 3060
Current Liabilities 754 535
Total Liabilites 1640 2720
Retained Earnings 576 565
Market Value of Equity 337 317
Calculations 2016 2017
Working Capital/Total Assets (Z-1) 0.045 0.312
Retained Earnings/Total Assets (Z-2) 0.289 0.185
EBIT/Total Assets (Z-3) 0.071 0.088
Market Value of Equity/Total Liabilites (Z-4) 0.206 0.117
Net Sales/Total Assets (Z-5) 1.013 0.659
Z-Score 1.829 1.653
The Beneish M-Score is used to evaluate
Brinks’ earnings quality as reported by the
firm in the annual report, and allows us to
detect manipulation of the results. If M is
greater than -2.22 the firm is likely
manipulating earnings results.
The Altman Z-Score is used to verify a
company’s financial health and the
probability of filing for bankruptcy. If the Z-
Score is below 1.81 a company has a high
probability of bankruptcy, a score of 2.99
indicates a company that has a low
probability of filing for bankruptcy.
APPENDIX 7
M - Score
Altman Z - Score
M - Score 2016 2017
Net Sales 3,020 3,350
COGS 2,392 2,608
NET Recievables 490 595
Current Assets 844 1,490
Net PP&E 531 641
Depreciation 1,030 1,170
Total Assets 1,990 3,060
SGA Expense 385 437
Net Income 36 17
Cash Flow From Operations 168 252
Current Liabilities 754 835
Long-Term Debt 262 1,140
Derived Variables
Other LT Assets TA-(CA+PP&E) 615 929
Day' Sales Receivable Incex (DSRI) 1.095
Gross Margin Index (GMI) -0.013
Asset Quality Index (AQI) 0.987
Sales Growth Index (SGI) 1.109
Depreciation Index (DEPI) 1.021
SGA Expenses Index (SGAI) 1.023
Total Accruals/TA -0.077
Leverage Index (LVGI) 1.264
M-Score 5 variable model -3.686
M-Score 8 variable model -3.284
Inputs for Calculation

APPENDIX 8 Financial Analysis
Source: Bloomberg, annual report, team assessment
Leverage 2016 2017 2018E 2019E 2020E 2021E
Debt 443 1,237 1,519 1,519 1,519 1,519
Debt/equity 1.25 3.66 3.32 2.39 1.76 1.37
Net debt/EBITDA 260 622 1,078 1,033 1,022 1,011
Asset/Equity 5.62 9.05 6.90 5.25 3.93 3.10
Interest Coverage 9.04 9.75 5.24 6.67 7.74 8.23
Liquidity 2016 2017 2018E 2019E 2020E 2021E
Current ratio 1.12 1.78 1.44 1.47 1.47 1.48
Quick ratio 0.91 1.51 1.29 1.31 1.32 1.32
Cash ratio 0.24 0.74 0.52 0.53 0.54 0.54
Profitability 2016 2017 2018E 2019E 2020E 2021E
Gross Profit Margin 20.82% 22.07% 23.07% 24.07% 25.07% 25.07%
EBITDA Margin 10.46% 12.56% 13.71% 15.15% 16.58% 17.01%
EBIT Margin 6.11% 8.18% 9.58% 11.08% 12.58% 13.08%
EBT Margin 4.14% 5.42% 6.15% 7.82% 9.35% 9.89%
Effective Tax Rate 62.80% 86.89% 32.73% 32.73% 32.73% 32.73%
Net Profit Margin 1.14% 0.50% 4.14% 5.26% 6.29% 6.65%
Dupont Decomposition 2016 2017 2018E 2019E 2020E 2021E
Operating efficiency
Revenue 3,021 3,347 3,615 3,976 4,066 4,159
Net Income 35 17 150 209 256 277
Profit Margin 1.14% 0.50% 4.14% 5.26% 6.29% 6.65%
Asset Use Efficency
Revenue 3,021 3,347 3,615 3,976 4,066 4,159
Average Assets 2,527 3,107 3,249 3,367 3,414
Total Asset Turnover 1.32 1.16 1.22 1.21 1.22
Financial Leverage
Average Assets 2,527 3,107 3,249 3,367 3,414
Average Equity 347 398 547 750 986
Avg Asset/Avg Equity 7.29 7.81 5.94 4.49 3.46
ROE 4.82% 37.59% 38.22% 34.13% 28.06%
EBT Margin 4.14% 5.42% 6.15% 7.82% 9.35% 9.89%
Pretax ROA 6.27% 5.93% 7.04% 9.30% 11.22% 11.96%
ROA 1.73% 0.55% 4.74% 6.25% 7.55% 8.05%
Pretax ROE 35.23% 53.67% 48.59% 48.82% 44.09% 37.07%
ROIC 2.44% -0.74% 6.34% 8.70% 9.89% 9.75%

APPENDIX 9 Peer Comparison
Source: Team assessment, Bloomberg
2016 2017
Brinks
Asset Turnover 1.53 1.32
Number of Employees 61,000 62,000
Revenue (Millions) 3,021 3,347
Revenue/employees 49,525 53,984
Loomis
Prosegur
G4S
Asset/Equity 2016 2017
Brink's 5.62 9.05
Loomis 2.24 2.15
Prosegur 10.19 6.47
G4S 6.50 6.35
Debt/Equity
Brink's 124.93% 365.67%
Loomis 57.74% 56.03%
Prosegur 389.29% 293.59%
G4S 296.87% 289.58%
Net debt/EBITDA
Brink's 0.82 1.48
Loomis 1.06 0.98
Prosegur 1.18 0.89
G4S 3.02 2.43
Solvency
Efficiency
Brinks 2016 2017 Prosegur 2016 2017
Revenue 3,021 3,347 Revenue 1,909 2,174
Growth 10.81% Growth 13.88%
Gross Profit 629 739 Gross Profit 694 784
Gross profit margin 20.82% 22.08% Gross profit margin 36.35% 36.06%
EBITDA 316 421 EBITDA 473 585
EBITDA Margin 10.46% 12.56% EBITDA Margin 24.78% 26.91%
EBIT 185 274 EBIT 404 509
EBIT Margin 6.12% 8.19% EBIT Margin 21.16% 23.41%
EBT 125 182 EBT 389 506
Net Income 35 17 Net Income 197 344
Growth -51.43% Growth 74.62%
Net Income Margin 1.16% 0.51% Net Income Margin 10.32% 15.82%
Loomis 2016 2017 G4S 2016 2017
Revenue 1,965 2,019 Revenue 10,287 10,087
Growth 2.75% Growth -1.94%
Gross Profit 504 550 Gross Profit 1868 1789
Gross profit margin 25.65% 27.24% Gross profit margin 18.16% 17.74%
EBITDA 346 365 EBITDA 754 809
EBITDA Margin 17.61% 18.08% EBITDA Margin 7.33% 8.02%
EBIT 217 234 EBIT 533 634
EBIT Margin 11.04% 11.59% EBIT Margin 5.18% 6.29%
EBT 203 221 EBT 401 497
Net Income 147 167 Net Income 268 304
Net Income Margin 7.48% 8.27% Net Income Margin 2.61% 3.01%
Performance
Performance
Performance
Performance

APPENDIX 10 Peer EPS Forecast
APPENDIX 11 Income Statement – Base Case
Source: Team assessment, Bloomberg, annual report
EPS 2016 2017 2018E 2019E 2020E
Brink's 0.69 0.33 2.96 4.20 5.14
Loomis 1.93 2.17 2.31 2.64 2.82
Prosegur - 0.23 0.14 0.17 0.18
G4S 0.17 0.20 0.20 0.23 0.27
Peer Average 1.05 0.87 0.88 1.01 1.09
EPS Growth
Brink's -52% 797% 42% 22%
Loomis 12% 6% 14% 7%
Prosegur - -39% 21% 6%
G4S 18% 0% 15% 17%
Peer Average 15% -11% 17% 10%
In Millions USD 2016 2017 2018E 2019E 2020E 2021E
Total Revenue 3,021 3,347 3,615 3,976 4,066 4,159
Sales Growth Rate 8.00% 10.00% 2.27% 2.27%
Cost of Revenue 2,392 2,608 2,781 3,019 3,047 3,116
Gross Income 629 739 834 957 1,020 1,043
SGA Expense 424 468 488 516 508 499
Other Operating Expenese 20 (3) - - -
EBIT 185 274 346 441 512 544
Non-Operating Income (loss) (39) (64) (58) (64) (65) (67)
Net Interest Expense 20 28 66 66 66 66
EBT 125 182 222 311 380 411
Income Tax Expense 79 158 73 102 124 135
-Tax Rate 32.73% 32.73% 32.73% 32.73%
Other post Tax Expense 12 7 - - -
Net Income 35 17 150 209 256 277
Dividends 20 28 30 30 30 30
Addition to RE 15 (11) 119 179 226 247
Shares Outstanding 50 51 51 50 50 50
EPS 0.69 0.33 2.96 4.20 5.14 5.55

APPENDIX 12
Income Statement – Bull Case
Income Statement – Bear Case
APPENDIX 13
Total Revenue 3,021 3,347 3,490 3,708 3,792 3,792
Cost of Revenue 2,392 2,608 2,684 2,815 2,841 2,841
Gross Income 629 739 805 893 951 951
SGA Expense 424 468 471 482 474 455
EBIT 185 274 334 411 477 496
EBT 125 182 212 285 350 369
-Tax Rate 32.73% 32.73% 32.73% 32.73%
Net Income 35 17 143 192 236 248
Dividends 20 28 30 30 30 30
Addition to RE 15 (11) 113 162 206 218
EPS 0.69 0.33 2.83 3.85 4.73 4.99
Total Revenue 3,021 3,347 3,740 4,254 4,509 4,780
Cost of Revenue 2,392 2,608 2,877 3,230 3,379 3,582
Gross Income 629 739 863 1,024 1,131 1,199
SGA Expense 424 468 504 553 563 573
EBIT 185 274 358 472 568 626
EBT 125 182 232 337 429 483
-Tax Rate 32.73% 32.73% 32.73% 32.73%
Net Income 35 17 156 227 289 325
Dividends 20 28 30 30 30 30
Addition to RE 15 (11) 126 197 259 295
EPS 0.69 0.33 3.09 4.55 5.79 6.52

APPENDIX 14 Balance Sheet - Base
Balance Sheet 2016 2017 2018E 2019E 2020E 2021E
Current Assets
Cash 184 614 442 486 497 508
Accounts Recievable 501 642 647 711 727 744
Prepaid Expenses and Other 104 119 126 139 142 145
Other Current Assets 56 113 94 103 106 108
Total Current Assets 844 1,488 1,214 1,336 1,366 1,397
Noncurrent Assets
Net PP&E 531 641 664 730 747 764
Goodwill and Intangible Assets 205 559 906 906 906 906
Other Noncurrent Assets 415 371 371 371 371 371
Total Noncurrent Assets 1,151 1,571 1,941 2,007 2,024 2,041
Total Assets 1,995 3,060 3,155 3,343 3,390 3,438
Liabilities and Equity
Current Liabilities
Accounts Payable 139 175 178 195 200 204
Accrued Expenses 386 489 495 544 556 569
ST Debt 196 97 97 97 97 97
Other Current Liabilities 33 75 75 75 75 75
Total Current Liabilities 754 835 844 911 928 945
NonCurrent Liabilities
Long Term Debt 248 1,140 1,422 1,422 1,422 1,422
Other Noncurrent Liabilities 639 747 747 747 747 747
Total Noncurrent Liabilities 886 1,887 2,169 2,169 2,169 2,169
Total Liabilites 1,640 2,721 2,698 2,707 2,528 2,329
Stock Holder equity
Common Stock 50 51 51 51 51 51
Additional Paid in Capital 618 629 629 629 629 629
Retained Earnings 576 565 684 863 1,089 1,336
Other Equity (889) (906) (906) (906) (906) (906)
Total Equity 355 338 457 637 863 1,109
Total Liabilites and Equity 1,995 3,060 3,155 3,343 3,390 3,438

APPENDIX 15 Balance Sheet - Bear
Current Assets
Cash 184 614 426 453 459 469
Noncurrent Assets
Net PP&E 531 641 641 681 690 706
Total Assets 1,995 3,060 3,090 3,204 3,231 3,274
Current Liabilities
ST Debt 196 97 97 97 97 97
Total Current Liabilities 754 835 821 861 871 887
Long Term Debt 248 1,140 1,422 1,422 1,422 1,422
Stock Holder equity
Common Stock 50 51 51 51 51 51
Other Equity (889) (906) (906) (906) (906) (906)
Total Equity 355 338 451 613 816 1,039

APPENDIX 16 Balance Sheet - Bull
Current Assets
Cash 184 614 457 520 566 621
Noncurrent Assets
Net PP&E 531 641 687 781 850 933
Total Assets 1,995 3,060 3,220 3,487 3,684 3,917
Current Liabilities
ST Debt 196 97 97 97 97 97
Total Current Liabilities 754 835 867 963 1,033 1,117
Long Term Debt 248 1,140 1,422 1,422 1,422 1,422
Stock Holder equity
Common Stock 50 51 51 51 51 51
Other Equity (889) (906) (906) (906) (906) (906)
Total Equity 355 338 464 661 929 1,247

APPENDIX 17 Cash Flow Projections
Pro Forma AssumptionsAPPENDIX 18
Forcast Assumptions 2016 2017 2018E 2019E 2020E 2021E
Total Revenue
Base % growth - - 8.00% 10.00% 2.27% 2.27%
Bear % growth - - 4.26% 6.26% 2.27% 0.00%
Bull % growth - - 11.74% 13.74% 6.01% 6.01%
Cost of Revenue % sales 79.18% 77.93% 76.93% 75.93% 74.93% 74.93%
SGA Expense % sales 14.05% 13.99% 13.49% 12.99% 12.49% 11.99%
Non-Operating Income (loss) % sales 1.29% 1.92% 1.61% 1.61% 1.61% 1.61%
Interest rate - - 4.35% 4.35% 4.35% 4.35%
Tax Rate - - 32.73% 32.73% 32.73% 32.73%
Dividends 19.80 27.70 30.37 29.88 29.88 29.88
Shares Outtanding 50 50.5 50.5 49.8 49.8 49.8
Cash % sales 6.07% 18.35% 12.21% 12.21% 12.21% 12.21%
Accounts Recievable % sales 16.59% 19.19% 17.89% 19.19% 19.84% 20.49%
Prepaid Expenses and Other % sales 3.43% 3.56% 3.49% 3.56% 3.59% 3.62%
Other Current Assets % sales 1.84% 3.36% 2.60% 3.36% 3.75% 4.13%
Net PP&E % sales 17.58% 19.15% 18.36% 18.36% 18.36% 18.36%
Accounts Payable % sales 4.61% 5.22% 4.91% 4.91% 4.91% 4.91%
Accrued Expenses % sales 12.77% 14.60% 13.68% 13.68% 13.68% 13.68%
Long Term Debt 248 1,140 1422 1422 1422 1422
Statement of Cash Flows 2016 2017 2018E 2019E 2020E 2021E
Net Income 35 17 150 209 256 277
Adjustment 194 305 299 323 325 326
Change In WC (63) (69) (3) (10) (3) (3)
Cash Flows From Operations 166 252 446 522 578 601
Net Cash from Acquisitions (1) (224) (589) 0 0 0
CAPEX (112) (175) (161) (178) (182) (186)
% Revenue 3.71% 5.21% 4.46% 4.46% 4.46% 4.46%
Proceeds from Sale of PP&E 5 2 4 4 4 4
% Revenue 0.16% 0.06% 0.11% 0.11% 0.11% 0.11%
Cash Flows From Investing (109) (396) (746) (173) (177) (181)
Issuance (Repayment) of Debt, Net (39) 611 574 0 0 0
Dividends Paid (20) (28) (30) (30) (30) (30)
Cash (Repurchase) of Equity 15 3 1 0 0 0
Financing Cash Flows (43) 586 545 (30) (30) (30)
Effect of Foreign Exchange Rates (12) (12) (14) (15) (16) (16)
% Revenue 0.40% 0.36% 0.38% 0.38% 0.38% 0.38%
Net Change in Cash 2 429 231 304 355 374

APPENDIX 19
APPENDIX 20
ROE and EPS Forecast
Residual Income Model Inputs
Base 2018 2019 2020 2021
Net Income 150 209 256 277
Share Holder Equity 457 637 863 1,109
ROE 32.69% 32.84% 29.66% 24.94%
EPS 2.96 4.20 5.14 5.55
Bear 2018 2019 2020 2021
Net Income 143 192 236 248
ROE 31.69% 31.32% 28.78% 23.95%
EPS 2.83 3.85 4.73 4.99
Bull 2018 2019 2020 2021
Net Income 156 227 289 325
ROE 33.66% 34.30% 31.37% 26.73%
EPS 3.09 4.55 5.79 6.52
Beta (5 Year Weekly) 1.029 Share Holder Equity (12/31/2017) 338,200,000 EPS Forecast 2018 2.96 ROE Forecast 2018 32.69%
Risk Free 2.78% 50,616,323 EPS Forecast 2019 4.20 ROE Forecast 2019 32.84%
Expected Market Return 10.75% 6.68 EPS Forecast 2020 5.14 ROE Forecast 2020 29.66%
Market Risk Premium 7.97% 0.60 EPS Forecast 2021 5.55 ROE Forecast 2021 24.94%
Required Return 10.98% 0% Decay 5.00%
Residual Income Model - Bull
Number of Shares
Book Equity Valuer Per Share
Initial Dividend
Dividend Growth rate
Residual Income Model - Bear
Number of Shares
Initial Dividend
Residual Income Model - Base
Number of Shares
Initial Dividend

APPENDIX 21 Residual Income Model - Base
APPENDIX 22 Residual Income Model - Bear
Year Projected EPS Projected Dividend BV per share Forecasted ROE Cost of Equity Equity Charge Residual Income PV of BV and RI
6.68 $6.68
2018 2.96 0.60 9.04 32.69% 10.98% 0.73 1.45 $1.31
2019 4.20 0.60 12.64 32.84% 10.98% 0.99 1.98 $1.60
2020 5.14 0.60 17.18 29.66% 10.98% 1.39 2.36 $1.73
2021 5.55 0.60 22.13 24.94% 10.98% 1.89 2.40 $1.58
2022 5.24 0.60 26.78 23.69% 10.98% 2.43 2.81 $1.67
2023 6.03 0.60 32.20 22.51% 10.98% 2.94 3.09 $1.65
2024 6.89 0.60 38.49 21.38% 10.98% 3.54 3.35 $1.61
2025 7.82 0.60 45.71 20.31% 10.98% 4.23 3.59 $1.56
2026 8.82 0.60 53.93 19.30% 10.98% 5.02 3.80 $1.49
2027 9.89 0.60 63.21 18.33% 10.98% 5.92 3.96 $1.40
2028 11.01 0.60 73.62 17.42% 10.98% 6.94 4.07 $1.29
2029 12.18 0.60 85.20 16.55% 10.98% 8.09 4.10 $1.17
2030 13.39 0.60 98.00 15.72% 10.98% 9.36 4.03 $1.04
2031 14.63 0.60 112.03 14.93% 10.98% 10.76 3.87 $0.90
2032 15.89 0.60 127.32 14.19% 10.98% 12.30 3.59 $0.75
2033 17.16 0.60 143.88 13.48% 10.98% 13.98 3.17 $0.60
2034 18.42 0.60 161.70 12.80% 10.98% 15.80 2.62 $0.45
2035 19.67 0.60 180.77 12.16% 10.98% 17.76 1.91 $0.29
2036 20.89 0.60 201.06 11.55% 10.98% 19.85 1.03 $0.14
Total $28.91
6.68 $6.68
2018 2.83 0.60 8.91 31.69% 10.98% 0.73 1.38 $1.25
2019 3.85 0.60 12.16 31.32% 10.98% 0.98 1.81 $1.47
2020 4.73 0.60 16.29 28.78% 10.98% 1.34 2.16 $1.58
2021 4.99 0.60 20.68 23.95% 10.98% 1.79 2.11 $1.39
2022 4.71 0.60 24.79 22.75% 10.98% 2.27 2.43 $1.45
2023 5.36 0.60 29.54 21.61% 10.98% 2.72 2.64 $1.41
2024 6.07 0.60 35.01 20.53% 10.98% 3.24 2.82 $1.36
2025 6.83 0.60 41.24 19.51% 10.98% 3.85 2.98 $1.30
2026 7.64 0.60 48.28 18.53% 10.98% 4.53 3.11 $1.22
2027 8.50 0.60 56.19 17.61% 10.98% 5.30 3.20 $1.13
2028 9.40 0.60 64.98 16.73% 10.98% 6.17 3.23 $1.03
2029 10.32 0.60 74.71 15.89% 10.98% 7.14 3.19 $0.91
2030 11.28 0.60 85.38 15.09% 10.98% 8.21 3.07 $0.79
2031 12.24 0.60 97.03 14.34% 10.98% 9.38 2.87 $0.67
2032 13.22 0.60 109.65 13.62% 10.98% 10.66 2.56 $0.54
2033 14.19 0.60 123.24 12.94% 10.98% 12.04 2.15 $0.41
2034 15.15 0.60 137.79 12.29% 10.98% 13.54 1.62 $0.27
2035 16.09 0.60 153.28 11.68% 10.98% 15.13 0.96 $0.15
2036 17.01 0.60 169.69 11.10% 10.98% 16.83 0.17 $0.02
Total $25.03

APPENDIX 24
APPENDIX 23 Residual Income Model - Bull
EBITDA Multiples Calculation
6.68 $6.68
2018 3.09 0.60 9.17 33.66% 10.98% 0.73 1.52 $1.37
2019 4.55 0.60 13.12 34.30% 10.98% 1.01 2.14 $1.74
2020 5.79 0.60 18.31 31.37% 10.98% 1.44 2.68 $1.96
2021 6.52 0.60 24.23 26.73% 10.98% 2.01 2.88 $1.90
2022 6.15 0.60 29.78 25.39% 10.98% 2.66 3.49 $2.07
2023 7.19 0.60 36.37 24.12% 10.98% 3.27 3.91 $2.09
2024 8.34 0.60 44.11 22.92% 10.98% 3.99 4.34 $2.09
2025 9.60 0.60 53.11 21.77% 10.98% 4.84 4.76 $2.07
2026 10.98 0.60 63.49 20.68% 10.98% 5.83 5.15 $2.02
2027 12.48 0.60 75.37 19.65% 10.98% 6.97 5.50 $1.94
2028 14.07 0.60 88.84 18.67% 10.98% 8.28 5.79 $1.84
2029 15.75 0.60 103.99 17.73% 10.98% 9.76 6.00 $1.72
2030 17.52 0.60 120.91 16.85% 10.98% 11.42 6.10 $1.57
2031 19.35 0.60 139.66 16.00% 10.98% 13.28 6.07 $1.41
2032 21.23 0.60 160.29 15.20% 10.98% 15.34 5.89 $1.23
2033 23.15 0.60 182.85 14.44% 10.98% 17.61 5.55 $1.05
2034 25.09 0.60 207.33 13.72% 10.98% 20.08 5.01 $0.85
2035 27.03 0.60 233.76 13.04% 10.98% 22.77 4.26 $0.65
2036 28.95 0.60 262.11 12.38% 10.98% 25.67 3.27 $0.45
2037 30.84 0.60 292.35 11.76% 10.98% 28.79 2.05 $0.25
2038 32.67 0.60 324.42 11.18% 10.98% 32.11 0.57 $0.06
Total $37.01
EV EV EV
Market Capitalization 3,473 Market Capitalization 3,473 Market Capitalization 3,473
Less Cash & Equivalents 314 Less Cash & Equivalents 314 Less Cash & Equivalents 314
Plus Perferred Equity 0 Plus Perferred Equity 0 Plus Perferred Equity 0
Plus Minority Interest 22 Plus Minority Interest 22 Plus Minority Interest 22
Plus Total Debts 1,519 Plus Total Debts 1,519 Plus Total Debts 1,519
Less Adjustments 0 Less Adjustments 0 Less Adjustments 0
Enterprise value 4,699 Enterprise value 4,699 Enterprise value 4,699
% of business 39.3% % of business 29.0% % of business 31.7%
Relative EV 1,847 Relative EV 1,363 Relative EV 1,494
EBITDA 84 EBITDA 206 EBITDA 130
EBITDA Multiple 22.07 EBITDA Multiple 6.60 EBITDA Multiple 11.46
EBITDA Multiples Calculation

APPENDIX 26
APPENDIX 25 Sum of Parts Model Growth Rates
Sum of Parts Model - Base
2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021
EBITDA 16.07% 19.28% 10.72% 4.44% EBITDA 25.66% 30.79% 17.12% 7.08% EBITDA 24.44% 29.33% 16.30% 6.75%
D&A 1.83% 8.15% 0.55% 0.55% D&A 1.83% 8.15% 0.55% 0.55% D&A 1.83% 8.15% 0.55% 0.55%
NWC -43.30% 14.64% 3.19% 3.16% NWC -43.30% 14.64% 3.19% 3.16% NWC -43.30% 14.64% 3.19% 3.16%
CAPEX -32.87% 32.31% -21.47% 0.71% CAPEX -32.87% 32.31% -21.47% 0.71% CAPEX -32.87% 32.31% -21.47% 0.71%
Discount Rate 8.71% 8.71% 8.71% 8.71% Discount Rate 8.71% 8.71% 8.71% 8.71% Discount Rate 8.71% 8.71% 8.71% 8.71%
2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021
D&A -1.69% 4.47% 0.55% -1.68% D&A -1.69% 4.47% 0.55% -1.68% D&A -1.69% 4.47% 0.55% -1.68%
NWC -46.17% 9.32% 3.28% 0.00% NWC -46.17% 9.32% 3.28% 0.00% NWC -46.17% 9.32% 3.28% 0.00%
CAPEX -43.84% 32.38% -12.50% -10.79% CAPEX -43.84% 32.38% -12.50% -10.79% CAPEX -43.84% 32.38% -12.50% -10.79%
2018 2019 2020 2021 2018 2019 2020 2021 2018 2019 2020 2021
D&A 5.36% 11.82% 4.23% 4.23% D&A 5.36% 11.82% 4.23% 4.23% D&A 5.36% 11.82% 4.23% 4.23%
NWC -40.42% 19.80% 8.22% 8.06% NWC -40.42% 19.80% 8.22% 8.06% NWC -40.42% 19.80% 8.22% 8.06%
CAPEX -21.89% 33.31% -15.02% 4.59% CAPEX -21.89% 33.31% -15.02% 4.59% CAPEX -21.89% 33.31% -15.02% 4.59%
Growth Rate Assumptions - Bear
Growth Rate Assumptions - Bull
Growth Rate Assumptions - Base
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
EBITDA 83.68 97.13 115.85 128.27 133.97 EBITDA 206.47 259.44 339.33 397.42 425.56
EBIT 15.28 27.48 40.52 52.53 57.81 EBIT 182.97 235.51 313.45 371.4 399.39
Tax Rate 17.29% 4.64% 4.64% 4.64% 4.64% Tax Rate 42.67% 16.17% 16.17% 16.17% 16.17%
EBIT(1-t) 12.64 26.2 38.64 50.09 55.12 EBIT(1-t) 104.9 197.43 262.76 311.33 334.8
D&A 68.4 69.65 75.33 75.74 76.16 D&A 23.5 23.93 25.88 26.02 26.17
NWC (27.23) (15.44) (17.70) (18.27) (18.84) NWC (20.10) (11.39) (13.06) (13.48) (13.91)
CAPEX (86.30) (57.93) (76.65) (60.19) (60.62) CAPEX (39.20) (26.31) (34.82) (27.34) (27.54)
Unlevered FCF (32.50) 22.48 19.62 47.37 51.82 Unlevered FCF 69.10 183.65 240.76 296.53 319.52
Discount Rate 8.71% 8.71% 8.71% 8.71% Discount Rate 8.71% 8.71% 8.71% 8.71%
PV of FCF 20.67 16.60 36.87 37.10 PV of FCF 168.93 203.72 230.82 228.78
Sum of PV 111.25 Sum of PV 832.26
EBITDA Multiple 22.07 EBITDA Multiple 6.60
Terminal Value 2021 2956.69 Terminal Value 2021 2808.93
PV of Value 2117.03 PV of Value 2011.24
Enterprise Value 2228.277 Enterprise Value 2843.49
2017 2018 2019 2020 2021 2,228.3
EBITDA 130.36 162.21 209.79 243.99 260.46 2,843.5
EBIT 89.36 120.46 164.64 198.59 214.81 2,539.4
Tax Rate 26.94% 11.92% 11.92% 11.92% 11.92% 2,107.1
EBIT(1-t) 65.28 106.11 145.02 174.92 189.2 834.9
D&A 41 41.75 45.15 45.4 45.65 1,886.5
NWC (22.04) (12.50) (14.32) (14.78) (15.25) 614.3
CAPEX (35.90) (24.10) (31.89) (25.04) (25.22) 0.0
Unlevered FCF 48.35 111.26 143.96 180.50 194.39 25.1
Discount Rate 8.71% 8.71% 8.71% 8.71% 25.1
PV of FCF 102.3468 121.8135 140.4947 139.1843 5529.163
Sum of PV 401.49
EBITDA Multiple 11.46 109.24
Terminal Value 2021 2985.84
PV of Value 2137.90
Enterprise Value 2539.40
North America South America
Rest of World Combined Segment Valuation
North America EV
South America EV
Rest of world EV
Net Debt
Total Current Liabilities
Total LT Liabilities
50,616,323
Equity Value
Cash and Cash equivalents
Non operating assets
Non operating liabilities
Deferred Tax expense
Company EV
Shares outstanding

APPENDIX 27 Sum of Parts Model - Bear
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
EBITDA 83.68 94.06 108.7 120.35 123.17 EBITDA 206.47 247.37 308.89 361.77 375.3
EBIT 15.28 26.81 38.45 49.72 53.72 EBIT 182.97 224.26 284.75 337.5 351.44
Tax Rate 17.29% 4.64% 4.64% 4.64% 4.64% Tax Rate 42.67% 16.17% 16.17% 16.17% 16.17%
EBIT(1-t) 12.64 25.57 36.66 47.41 51.22 EBIT(1-t) 104.9 187.99 238.7 282.92 294.6
D&A 68.4 67.24 70.25 70.64 69.45 D&A 23.5 23.1 24.14 24.27 23.86
NWC (27.23) (14.66) (16.03) (16.55) (16.55) NWC (20.10) (10.82) (11.83) (12.21) (12.21)
CAPEX (86.30) (48.47) (64.16) (56.14) (50.08) CAPEX (39.20) (22.01) (29.14) (25.50) (22.75)
Unlevered FCF (32.50) 29.68 26.73 45.35 54.04 Unlevered FCF 69.10 178.26 221.87 269.47 283.50
PV of FCF 27.31 22.62 35.30 38.69 PV of FCF 163.98 187.74 209.75 202.99
2017 2018 2019 2020 2021 1,981.2
EBITDA 130.36 154.95 191.66 222.9 230.86 2,452.5
EBIT 89.36 114.65 149.55 180.56 189.23 2,446.0
Tax Rate 26.94% 11.92% 11.92% 11.92% 11.92% 2,107.1
EBIT(1-t) 65.28 100.98 131.73 159.04 166.68
D&A 41 40.31 42.11 42.34 41.63 1,886.5
NWC (22.04) (11.86) (12.97) (13.39) (13.39) 614.3
CAPEX (35.90) (20.16) (26.69) (23.35) (20.83) 0.0
Unlevered FCF 48.35 109.26 134.18 164.63 174.08 25.1
Discount Rate 8.71% 8.71% 8.71% 8.71% 25.1
PV of FCF 100.5101 113.5387 128.148 124.6428 4,797.7
Sum of PV 366.33
PV of Value 2079.70
South America EV
North America EV
50,616,323
Rest of world EV
Net Debt
Total Current Liabilities 834.9
Equity Value
Company EV
Shares outstanding

APPENDIX 28 Sum of Parts Model - Bull
APPENDIX 29 2017 Competitor Tax Breakdown
Brink's Loomis
35% Swedish tax rate 22%
(0.20) Effect of foreign subsidiaries (4.40)
3.40 Non-deductable expenses, net 6.50
1.80 Effective Tax Rate 24.1%
47.40
2.00
0.90
(1.30)
(3.50)
1.40
87%
Tax Reform
French Business Tax
Tax on earnings of foreign affiliates
State Income Tax, net
US Federal Tax Rate
Accelerated US Income
Adjustments to Valuation Allownaces
Foreign Income Taxes
Effective Tax Rate
Tax Rate Breakdown 2017
Share-based compensation
Other
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
EBITDA 113.54 100.19 123.21 140.94 152.05 EBITDA 206.47 271.52 371.2 456.5 513.97
EBIT 45.14 28.12 42.63 56.95 64.50 EBIT 182.97 246.76 343.51 427.64 483.90
Tax Rate 17.29% 4.64% 4.64% 4.64% 4.64% Tax Rate 42.67% 16.17% 16.17% 16.17% 16.17%
EBIT(1-t) 26.82 40.65 55.46 54.31 61.51 EBIT(1-t) 104.9 206.86 287.96 358.48 405.64
D&A 72.07 80.58 86.26 83.99 87.55 D&A 23.50 24.76 27.69 28.86 30.08
NWC (16.23) (19.44) (21.80) (21.04) (22.73) NWC (20.10) (11.97) (14.34) (15.52) (16.77)
CAPEX (67.41) (89.86) (85.53) (76.37) (79.87) CAPEX (39.20) (30.62) (40.82) (34.69) (36.28)
Unlevered FCF 15.25 11.93 34.39 40.90 46.45 Unlevered FCF 69.10 189.02 260.48 337.13 382.66
PV of FCF 14.03 10.10 31.83 33.26 PV of FCF 173.88 220.41 262.41 273.99
2017 2018 2019 2020 2021 2,381.9
EBITDA 130.36 169.49 228.76 278.83 312.26 3,242.5
EBIT 89.36 126.29 180.45 228.49 259.79 3,265.8
Tax Rate 26.94% 11.92% 11.92% 11.92% 11.92% 2,107.1
EBIT(1-t) 65.28 111.24 158.95 201.25 228.82
D&A 41.00 43.20 48.30 50.35 52.48 1,886.5
NWC (22.04) (13.13) (15.73) (17.02) (18.39) 614.3
CAPEX (35.90) (28.04) (37.38) (31.77) (33.23) 0.0
Unlevered FCF 48.35 113.26 154.14 202.81 229.68 25.1
Discount Rate 8.71% 8.71% 8.71% 8.71% 25.1
PV of FCF 104.19 130.43 157.86 164.45 6,808.2
Sum of PV 452.75
PV of Value 2813.03
South America EV
North America EV
50,616,323
Rest of world EV
Net Debt
Total Current Liabilities 834.9
Equity Value
Company EV
Shares outstanding

APPENDIX 30
29292929ZR
Monte Carlo Simulation
APPENDIX 29 2017 Competitor Tax Breakdown (Continued)
G4S Prosegur
UK Corporate Taxes 19% Corporate Tax Rate 25%
Non Deductible Items 5.26 Permanent differences 4.29
Loss on disposal of business not relieved 0.26 Effect of Foreign Tax 7.98
Foreign Income Taxes 6.05 Adjustment of deferred taxes 0.75
Tax Credits and Incentives (1.32) Adjustment to previous years 0.55
Impact of reduction of UK taxes (0.53) Loss without deferred tax 5.08
Adjustment for Joint Ventures (0.26) Unrecognized deductions applied (1.30)
Tax losses not recognized in current year 0.53 Effects of corporate restructuring (5.70)
Impact of US tax reform 5.00 Effective Tax Rate 37%
Adjustments to deferred taxes recoverable (1.32)
Adjustment to prior year's tax 0.53
Effective Tax Rate 33.2%
Tax Rate Breakdown 2017
Base 85.14
Mean 80.52
Median 80.46
Variance 12.97
Standard Deviation 3.602
Coefficient of Variation 0.045
Min 62.01
Max 95.03
Range 30.01
Standard Error of the Mean 0.023
Trials 25000
Simulation Statistics

APPENDIX 31 Monte Carlo Regression Analysis
We ran a regression on the output of the Monte Carlo simulation to see how much of the price is explained by each
variable. The most telling results of these regressions was that the tax rates explain less than 1% of Brink’s price
according to our models. The regressions also show that the 2020 and 2021 results have more statistical significance,
and the impact of differing rates can also be seen in our sensitivity analysis (Fig. 29), specifically as it pertains to the
terminal growth rate of revenue.

Christopher Newport University's 2019 CFA Challenge Equity Report

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