Welcome everyone to The Brink's Company Fourth Quarter 2021 Earnings Call. Brink's issued a press release on fourth quarter results this morning. The company also filed an 8-K that includes the release and the slides that will be used in today's call.

For those of you listening by phone, the release and slides are available in the Investor Relations section of the company's website brinks.com. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference call is being recorded.

Now for the company's Safe Harbor statement. This call and the Q&A session will contain forward-looking statements. Actual results could differ materially from the projected or estimated results. Information regarding factors that could cause such differences is available in today's press release and in the company's most recent SEC filings.

Information presented and discussed on this call is representative as of today only. Brink's assumes no obligation to update any forward-looking statements. The call is copyrighted and may not be used without written permission from Brink's.

It is now my pleasure to introduce your host, Ed Cunningham, Vice President of Investor Relations and Corporate Communications. Mr. Cunningham you may begin. .

Thank you Jamie. Good morning, everyone. Joining me today are CEO, Doug Pertz; COO, Mark Eubanks; and CFO, Ron Domanica. This morning we reported fourth quarter results on both a GAAP and non-GAAP basis.

The non-GAAP results exclude a number of items including our Venezuela operations, the impact of Argentina's highly inflationary accounting, reorganization and restructuring cost, items related to acquisitions and dispositions and costs related to an internal loss and certain accounting compliance matters.

We also provided our results on a constant currency basis, which eliminates changes in foreign currency exchange rates from the prior year. We believe the non-GAAP results make it easier for investors to assess operating performance between periods. Accordingly our comments today will focus primarily on the non-GAAP results.

Reconciliations are provided in the press release and the appendix to the slides we're using today and in this morning's 8-K filing, all of which can be found on our website. I'll now turn the call over to Doug Pertz..

Thanks Ed, and good morning everyone, and thanks for joining us today. Today, we reported record revenue and operating profits for both the fourth quarter and full year of 2021.

More importantly our fourth quarter results with organic revenue growth of 7% provide a strong jumping off point to drive continued momentum in 2022 when we expect revenue to return to at least pre-pandemic levels on a pro forma basis.

We're looking forward to delivering another record year in 2022 when we expect 2022 revenue to exceed 2019 reported revenue by over $900 million, up almost 25-plus percent.

Our confidence is based on expectations of continued recovery of pandemic impacted economies with improving retail markets, higher than historical price increases, continued core organic growth and accelerating contributions from our Strategy 2.0 digital solutions.

We also expect continued execution and acceleration of our productivity and efficiency initiatives, building on our 2021 operating profit margin improvement of 90 basis points.

In 2022, we expect revenue growth of between 8% and 11% and operating profit growth of between 16% and 23%, reflecting strong earnings leverage and a margin improvement of approximately 100 basis points. Adjusted EBITDA is expected to grow by approximately $90 million to a range of $755 million to $790 million.

Our 2022 guidance was released this morning that we released this morning is consistent with the strong growth rates and margin improvement targets we presented at our 2021 Investor Day updated to reflect the impact of FX base -- impact of FX based on exchange rates as of December 31, 2021.

This guidance supports our belief that 2022 will be a strong start to achieving our three-year strategic plan targets, which include revenue of $5.4 billion, adjusted EBITDA of $1 billion and free cash flow of $575 million.

I'm going to review our full year results and then turn over the call to Mark and Ron who will review our fourth quarter performance and more. Then I'll close with a more detailed review of our 2022 guidance and our 2024 targets. First turning to Page -- Slide 4, excuse me.

Our full year results were very strong with double-digit growth in revenue, operating profit, adjusted EBITDA and EPS on both a reported and a constant currency basis. In fact, these all represented non-GAAP records for Brink's.

Full year revenue was up 14% to $4.2 billion at the high end of our guidance, driven by 5% organic growth and 9% growth from acquisitions. As Mark will cover in more detail, organic revenue recovery accelerated throughout the year supporting a strong jumping off point for exceeding pre-pandemic benchmark levels this year in 2022.

Last year's revenue also included significant growth from the G4S and PAI acquisitions resulting in 2021 revenue that was higher than 2019 reported revenue by almost $0.5 billion or up 14%. Operating profit, grew 23% to $471 million including organic growth of 18% and 90 basis points of margin improvement to 11.2%.

Adjusted EBITDA grew 21% to $683 million, with a margin increase of 100 basis points. 2021 EBITDA was up $116 million compared to 2019, representing 20% growth and close to 100 basis points of margin improvement versus pre-pandemic levels. EPS was up 26%, on a reported basis which includes a 24%, gain related to our equity investment in MoneyGram.

Excluding that impact on the investments for both this period and prior year period EPS was still up 25%. Note that our metrics are even stronger on a constant currency basis, as you can see in the slides. In early 2020, we set a goal, to emerge from the pandemic as a stronger company than we were before the onset of the pandemic.

Our record-setting results demonstrate that we have achieved that goal and more. We also clearly demonstrate -- they also clearly demonstrate the resiliency of our business and the persistent strength of cash usage around the world.

We now look forward to delivering continued acceleration in revenue and profit growth over our strategic plan period through 2024. On that note, I'll turn it over to Mark. .

Thanks, Doug and good morning, everyone. Fourth quarter revenue was up 7% on both a reported and organic basis and up 11% in constant currency. Our acquisition-related growth of 4% was partially offset by a 3% negative impact from FX. Fourth quarter revenue recovered to 95% of 2019 pre-COVID levels or 100% on a local currency basis.

This was a continuation of steady sequential improvement that we've seen throughout the year. Of course, I'll cover this in more detail on the next slide. Operating profit was up 6% versus a very strong quarter last year.

Organic profit growth was up 11% and was largely offset by negative FX of 9% that was primarily attributable to the Argentine peso and the euro. On a constant currency basis, operating profit grew 15%. This year's Q4 progress, was the result of strong performance across all four regions but especially by our Latin America and Europe operations.

I want to thank our nearly 75,000 Brink's colleagues around the world, for their determination and focus in the fourth quarter and throughout 2021. Last year's operating environment had a dynamic and challenging macro backdrop to say the least and our team nailed it.

In Latin America, our lean transformation and productivity initiatives particularly in Mexico, helped to offset the lingering impact of our pandemic-related reopening delays throughout much of the region. In Europe, slightly positive organic growth but strong margin improvement of 140 basis points was a result in the fourth quarter.

This was a result of strong cost management and the benefits of prior year restructuring actions. France was a bright spot in the quarter again, with their third consecutive quarter of margin expansion. Turning to North America.

After a price/cost timing mismatch that we discussed in our Q3 call, our US business was able to implement the necessary price actions to offset wage inflation. Our Rest of World segment was able to grow organically by 9%.

Although margin expansion was muted by prior year comparables related to our global services business and some COVID-related government subsidies in 2020.

The operating profit margin for the quarter was 14%, slightly below last year, but 160 basis points above the pre-pandemic fourth quarter 2019 rate of 12.4% and that was despite all of the delayed re-openings in several markets especially in South America.

This 160-basis point improvement versus 2019 reflects strong operating leverage and is encouraging as revenue continues to approach the pre-COVID 2019 levels. Adjusted EBITDA was up 8% and 15% on a constant currency basis with margin up 10% -- 10 basis points over last year to 19.1%. This is 240 basis points over our pre-COVID 2019 levels.

Excluding the prior year gain of $0.13 related to our equity investment in MoneyGram, EPS grew 11% to $1.68 per share and was up 13% in constant currency. Slide six shows the steady quarterly revenue growth that we saw in 2021 by segment and in aggregate versus the pre-COVID 2019 levels.

It includes comparisons on both the US dollar and local currency basis. The local currency recovery rates demonstrate the underlying resiliency of our business. The USD recovery rate factors in the impact of foreign currency translation which is how we ultimately report our results.

Beginning on the left-hand side of the slide with North America, you can see modest sequential improvement from 93% to 97% from the first quarter to the second quarter and a slight dip down to 96% in the third quarter as the Delta variant emerged. Fourth quarter revenue reached 100% of 2019 levels.

As we mentioned last quarter, we've implemented several price increases in our US business to offset rising labor costs. In the fourth quarter, we saw a meaningful lift from these price increases along with the continued improvement in our US hiring and retention initiatives.

As we closed out the year, our prices were back in balance relative to wage cost inflation. Moving on to Latin America, you can see that the recovery has been significantly stronger than any other region with the fourth quarter at 109% of pre-COVID levels on a local currency basis.

A large part of this recovery is attributable to the inflationary environment in Argentina. But even excluding Argentina, Q4 revenue recovery was almost 100%, largely on the strength of our business in Mexico.

The fourth quarter rate improved sequentially by 1% even as volumes declined in Brazil, Colombia, and Chile due to the ongoing impact of the pandemic. In Europe, the recovery rate has also progressed steadily despite the continuation of the COVID-related restrictions and reopening delays.

Many countries including France, Netherlands, and the UK continue to relax their restrictions and we expect consumer spending and retail markets to continue to improve throughout 2022.

Revenue recovery in our Rest of World segment remained in the mid-90% range through the third quarter, jumping to near full recovery in the fourth quarter driven by continued growth of our global services business. The post-pandemic reopening in a few of our key markets in this region remain delayed.

At year-end, our USD revenue has recovered to 95% of 2019 levels and 101% when you look at local currency. In aggregate, our 2021 revenue recovery versus pre-pandemic levels has shown a consistent upward trend despite the lingering impact of the pandemic in several economies.

This trend supports the ongoing strength of cash usage in the global economy and our confidence that total revenue will exceed pre-COVID levels in 2022.

Slide seven summarizes some of the macro factors currently affecting operations in many of our global markets including the pandemic, global inflation, and particularly, US labor shortages, all of which are obviously related. Labor is by far our largest cost component.

But we have a proven history of pricing execution that's enabled us to effectively manage this inflation and our teams across the globe are committed to taking disciplined pricing actions to offset the impact of higher wages and other inflationary pressures.

It's important to note that to the surprise of many, the impact of inflation on our fuel cost is relatively low. This is due to the fact that most of our customer agreements include fuel surcharge clauses and other mechanisms that enable us to pass through fuel cost increases on to our customers.

In the third quarter, we implemented several higher than historical price increases in our US business. The impact of these price increases was not fully realized until late in the fourth quarter. And at year end, our pricing was back in balance with our cost inflation and we expect it to remain so through 2022.

Another macro topic that we're all hearing about is supply chain pressures that are rippling through the global economy. Our exposure to these pressures is fairly minimal. As a service business, our people and our assets are locally sourced and really are not subject to the same global supply chain disruptions that you hear about from many others.

We also don't expect any material disruptions that would affect our digital solutions pipeline as we've developed strong global partnerships with global suppliers and have made early purchases to avoid potential pipeline disruptions.

It appears that the pandemic is finally subsided here in North America though we've all learned it's not over until it's over. Operating conditions have varied greatly by country at different points throughout the year and we're continuously monitoring the government-mandated restrictions and other developments in all of our markets.

As the previous slide showed, we've seen steady progression in overall revenue recovery throughout 2021. The US and Mexico markets appear to be reopening faster than the other regions and we anticipate further recovery in 2022. By contrast, economic recovery in Europe, Asia Pacific and some South American countries has been slower than expected.

Despite the delayed reopenings in these regions each of these regions have shown consistent revenue recovery versus pre-pandemic levels through 2021. With the sustainable productivity improvements we're continuing to implement we are well-positioned to capture additional margin leverage as revenue continues to improve next year.

Slide 8 summarizes our three-year strategic plan. The bottom layer outlines our Strategy 1.0 initiatives, which we expect to account for approximately three-quarters of our organic growth in 2022 driven by higher volumes, pricing and additional economic recovery for the pandemic.

We have a strong foundation of organic growth and recurring revenue in our base business and we're confident in our ability to continue driving this core organic growth.

With our wider and deeper program, we're executing breakthrough initiatives globally to drive cost savings in five key areas; rail optimization, crew productivity, branch standardization, money processing and fleet management. These initiatives are supported by our continuous improvement culture and dedicated lean experts in each country.

Our global teams are sharing best practices across the organization and drive consistent growth and efficiency gains. We're also continuing to leverage the fixed -- significant fixed cost reductions that we've implemented over the last few years.

These cost reductions along with the aforementioned breakthrough initiatives drove 90 basis points of margin improvement last year. The benefits of operating leverage are expected to continue to yield higher margins as our revenue recovers in 2022 in future years.

The top of the slide here summarizes Strategy 2.0 a new layer of growth driven by digital solutions and ATM managed services. We expect Strategy 2.0 revenue to double this year and represent at least 5% of total revenue in 2022 and we're targeting $0.5 billion in incremental revenue in 2024.

As mentioned at our Investor Day this past December, the expanding global market for ATM managed services represents a significant growth opportunity for Brink's. We're well-positioned to capitalize on the opportunity with our already strong relationships with many global financial institutions.

The global market for ATM managed services is estimated at $7.5 billion in 2022 and is expected to grow to $10 billion by 2027. Brink's complete our digital cash payment solution for retailers continues to gain traction with new customers, new channel partners and point-of-sale app integrations.

We've created partnerships with payment companies to leverage their sales channels and merchant relationships. In return we're offering our partners a digital cash payment solution that enables them to provide a comprehensive payment solution that they were previously unable to offer their customers.

So for example Priority Technology Holdings a leading payments technology company serving more than 250,000 merchants is in the market today offering our cash solutions to their customer base.

We're also partnering with some of the leading point-of-sale providers to combine our digital cash payment solution with their point-of-sale software providing merchants with an integrated solution to manage cash sales and deposits.

One of these partnerships is with Clover, a platform from Fiserv who is a global leader in providing cloud-based POS payment platforms for small and medium businesses.

We're excited about launching our solution on their marketplace and have a digital cash -- and our digital cash management app will be available for purchase by their clients in the Clover app market by the end of the first quarter. We're executing on our Strategy 1.0 and are encouraged by our early progress with Strategy 2.0.

I'll now turn the call over to Ron for his detailed financial review. .

Thanks Mark and good day everyone. On Slide 9 please remember that we disclose acquisitions separately for the first 12 months of ownership. After 12 months they're mostly integrated and then included in organic results. Acquisitions for this quarter are primarily PAI and about 15% of the former G4S businesses.

2021 fourth quarter revenue as Mark said was up 11% in constant currency with 7% organic growth versus last year and 4% from acquisitions. Foreign exchange which was favorable in the third quarter turned decisively negative in the fourth quarter. Reported revenue was $1.98 billion, up $77 million or 7% versus the fourth quarter last year.

Fourth quarter operating profit in constant currency was up 15% versus last year. Organic growth was 11% and acquisitions added 4%. Negative ForEx was $13 million minus 9%. Reported operating profit was $154 million and the operating profit margin of 14% was down 20 bps versus the fourth quarter 2020.

The negative ForEx cost us 80 bps in margin accretion. Moving to Slide 10. Fourth quarter interest expense was $29 million up $3 million versus the same period last year due to higher debt associated with the completed acquisitions and $200 million in share repurchases.

Tax expense in the quarter was $43 million, $4 million higher than last year $2 million driven by higher income and $2 million due to a 1.8% increase in the effective tax rate. Our full year non-GAAP 2021 effective tax rate was 33.6% versus 31.8% last year.

$154 million of fourth quarter 2021 operating profit less interest expense taxes and plus $1 million in minority interest and other generated $82 million of income from continuing operations. This was $1.68 of earnings per share up $0.04 or 2% versus the $1.64 in the fourth quarter 2020.

In last year's EPS there was a $0.13 gain on marketable securities. Those securities were sold in the third quarter 2021. Excluding marketable securities EPS was up $0.17 per share or approximately 11% versus last year. Fourth quarter 2021 adjusted EBITDA was $210 million, up $15 million or plus 8% versus prior year.

Turning to free cash flow on Slide 11. Our 2021 free cash flow was $245 million, $60 million more than our most recent guidance. Adjusted EBITDA of $683 million was $23 million better than estimated and $117 million better than last year. We used about $88 million of cash for working capital, restructuring and deferred taxes.

The working capital growth was driven by increased revenue. Restructuring related to acquisitions integration and pandemic cost realignment and we paid $30 million in 2020 deferred payroll and other taxes payable. Cash taxes were $84 million, up $7 million versus last year but $11 million lower than our previous guidance.

Cash interest was $106 million an increase of $28 million versus 2020 due primarily to the incremental debt associated with the G4S and PAI acquisitions. Net cash CapEx was $160 million $20 million less than prior guidance due to supply chain delays primarily for armored trucks and cash devices. Those delays continue into this year.

2021 free cash flow excluding the payment of 2020 deferred taxes would have been $275 million generating an EBITDA to free cash flow conversion ratio of 40% up from the 28% achieved on the same basis last year. Advancing to Slide 12. In 2022 we expect pro forma free cash flow to be in the range of $310 million to $345 million.

Our adjusted EBITDA guidance of $755 million to $790 million is expected to be reduced by higher net working capital, driven by higher revenue and approximately $10 million in 2021 deferred payroll and other taxes payable. Our guidance assumes no new acquisitions. So cash restructuring should be less than prior years.

Cash taxes estimated at $100 million, would be up $16 million versus prior year due to higher income and cash interest is estimated at $115 million, would be up about $9 million versus 2021, due primarily to expected higher variable interest rates. Cash CapEx should be around $180 million in line with our Investor Day outlook.

At the midpoint of the range, our 2022 expected free cash flow, excluding deferred payments is approximately a 42% conversion of EBITDA and equates to over $6.50 per share. Turning to slide 13. This slide illustrates our actual net debt and financial leverage at year-end 2020, year-end 2021 and our estimate for year-end 2022.

The approximately $400 million increase in net debt from year-end 2020 to 2021 was driven by $330 million for the completion of the G4S and PAI acquisitions, $200 million for share repurchases, $86 million in financing leases and $37 million in dividends, all this partly offset by the $245 million in free cash flow that I just covered.

The expected decrease in net debt in 2022 assumes no additional acquisitions or share repurchases and that free cash flow will more than offset new lease financing and dividends. Dividing our $2.3 billion 2021 year-end net debt by the $683 million in 2021 EBITDA, generated a net debt leverage ratio of 3.4 turns.

In 2022, we expect that lower net debt and higher EBITDA will reduce the net debt leverage ratio below three turns. Our bank covenants include a secured leverage ratio, maximum of 3.75 turns. Our 2021 secured leverage ratio was 2.0 turns and is expected to decline to about 1.6 turns by the end of 2022, well below the covenant max.

Moving to sustainability on slide 14. At our Investor Day late last year, I spoke about Brink's commitment to sustainability and ESG and our progress continues to accelerate. Our global working group is identifying and sharing best practices across our footprint in 53 countries.

In the past few years, we have taken thousands of diesel trucks off the roads. Our Strategy 2.0 initiatives, including our Brink's Complete solution, provide the ability to better serve customers, while reducing our on-premise stops for many customers from every other day to less than once a week, materially reducing carbon emissions.

We have implemented an expanded dual fuel and alternate fuel vehicles. We've begun installing solar panels in our branches and our fleet and have ordered our first fully electric armored trucks. We've also expanded globally, our LED lighting replacement initiative and have added recycling programs.

While I'm excited about the continuous improvement of our environmental initiatives and I'm proud of our strong governance, what really sets Brink's apart is our social impact. Yes, we're a signatory to the United Nations Global Compact. Yes, we've pledged to support CEO action for diversity and inclusion.

But even more importantly, as the world's largest cash management company, we have a leading role in facilitating economic inclusion, especially for the most vulnerable in society. Those who don't have access to credit or debit or even a bank account, rely on cash, which means they rely on Brink's.

In June, we plan to issue Brink's first sustainability report and we're excited to share more about our commitment, our targets and our progress. With that, I'll hand it back to Doug..

Thanks, Ron. Slide 15 provides a detailed look at how we expect to achieve our 2022 revenue and profit guidance. Revenue is expected to grow 8% to 11% to a range between $4.52 billion and $4.67 billion.

Revenue at the midpoint of this range, approximately $4.6 million, would put us above pre-COVID 2019 levels plus add approximately $900 million of additional revenue from acquisitions.

We expect 2022 operating profit growth of 16% to 23% to a range between $545 million and $580 million reflecting a margin increase of approximately of 100 basis points. And we expect 2022 adjusted EBITDA to be in the range of between $755 million and $790 million and earnings are expected to be between $5.50 to $6 per share.

These strong growth rates and margin improvement targets are consistent with what we presented at our 2021 Investor Day with financial targets updated to reflect the impact of FX based on exchange rates at the end of 2021.

Our Strategy 1.0 operational excellence initiatives along with additional revenue recovery as the pandemic continues to subside are the key drivers of our expected revenue and profit growth in 2022 with our Strategy 2.0 digital solutions expected to add approximately 3% more revenue growth at accretive margins.

Our closing slide, Slide 16, illustrates how Brink's is now stronger as we come out of the pandemic and well positioned to create significant shareholder value as we execute our strategic plan.

The 2021 column on the left side of Slide 16 compares actual 2021 financial results to 2019 level with the fourth quarter showing an accelerating to the 2019 level results – reported results excuse me. Full year 2021 revenue recovered to about 92% of 2019 levels with the fourth quarter showing an accelerating recovery rate approaching 96%.

2021 reported revenue of $4.2 billion included acquisition revenue of over $800 million with a margin improvement of 60 basis points versus 2019. Our 2022 guidance, the next column to the right shows revenue growth of more than $900 million over 2019 reported revenue with core revenue recovery at more than 100% of 2019 levels plus the acquisitions.

2022 operating profit margins are expected to improve more than 150 basis points versus pre-pandemic levels.

Looking to the right side of the slide, it illustrates that we are well positioned to achieve our aggressive three-year strategic plan targets we presented in last year's Investor Day including organic revenue growth of approximately $1 billion to $1.2 billion over the three-year period of time, representing a compound annual growth rate of revenue of 8% to 9%.

And operating profit target of approximately $800 million, representing a compound annual growth rate approaching 20% and an annual margin improvement of approximately 100 basis points over the three-year period of time each year.

Adjusted EBITDA growth of more than $300 million to close to $1 billion and free cash flow improving to approximately $575 million in 2024.

With our record results in 2021 and strong recovery from COVID, together with our global management team's proven ability to execute, we look forward to creating substantial value for our shareholders over the next three years. Jamie, with that let's open it up for questions..

Ladies and gentlemen, at this time we will begin the question-and-answer session [Operator Instructions] And our first question this morning comes from Tobey Sommer from Truist Securities. Please go ahead with your question..

Hey, good morning. This is Jasper Bibb on for Tobey. I was hoping you could update us on the US staffing issues, you talked about on the last call.

Do you think you're fully staffed up at this point? And how are your overtime hours trending versus what might be considered normal?.

Yes. Good morning. This is Mark. We are making progress. As we mentioned, I think I touched on it at Investor Day as well, continuing to outpace our terminations and/or turnover with new hires but we're still not where we need to be. As we talked about, we thought we would likely get there sometime in the first quarter given the trajectory.

Holidays also was a little bumpy on around hiring. So we've still got some work to do there. And I think this probably is reflected a little bit in the results with as you said comes to bear and not only over time, but other inefficiencies around hiring costs productivity related to onboarding training and so forth..

Got it..

Yeah. I think the key message there though is as we're hiring and continuing to make sure we're at full staffing, our price now is fully in balance with our cost inflation that we talked about quite extensively in Q3..

That make sense. And then I wanted to ask how the first quarter has trended so far you've decided some reopening catch-up left outside of North America.

Have you started to see volumes in those Europe or APAC countries materially improved through the quarter when restrictions were lifted kind of what's been the experience there as we start to see more countries reopen?.

Yeah, I'd say it's too early to say yet just given the recent announcements, the Netherlands recently came out of their lockdown, I think there's been some announcements in France about March openings and code restrictions UK talking about this as well yesterday, I saw in the news.

So these are continuing to open, but we haven't seen material increases, but we also haven't seen any decline. We can see the continued strength that we saw in the fourth quarter continue so far in the first month of..

Okay. Yeah. .

Maybe that's a little bit of the reopening. Let's say they are the ones that are already there. We continue to see Mexico and the US kind of fully continuing not only to stay at the same levels, but not only new customers taking on the Brink's complete solution, but also really being able to look at store growth and store openings..

Make sense. And then you mentioned the Clover partnership in the prepared remarks.

How much of the Clover base do you think the Brink's complete solution might make sense for how much of an opportunity do you see there as kind of that gets implemented in the first quarter?.

Yeah. I don't know that we've got a real limitation to be honest given the flexibility of our Brink's Complete solution. Obviously, the larger cash users are going to benefit more here. But there's no reason to think that those that are investing in a POS type technology solution can't leverage our flexible solution as well.

That's really what we think is the beauty of Brink's Complete. It allows us to reach more customers than we're able to take advantage of traditional CIT service..

No. That makes senses. And then last question for me.

Can you just update on how you're thinking about share repurchase this year in context of the longer-term capital deployment targets yet at the Investor Day?.

All right. Jasper, I don't think as a policy, we've changed what we've done over the last several years. We have an outstanding authorization from the Board to continue purchases from time-to-time.

However, I think consistently what we've done is when we think as a company we're undervalued valuation-wise then we look at the best interest of our shareholders and make purchases in the open market.

But at this point in time, we don't have anything that is similar to our announced last accelerated share repurchase plan, but we do have the authority going forward..

Okay. Appreciate the color. Thanks for taking the questions guys..

Thank you, Jasper..

And our next question comes from George Tong from Goldman Sachs. Please go ahead with your question..

Good morning, George..

Hi. Thanks. Good morning. You mentioned in the US price actions are fully offsetting wage inflation and has been fully offset by really the end of the year in 2021.

Can you elaborate on how much pricing is increasing by currently and how price actions compared to wage inflation outside of the US?.

Sure. George this is Mark. I think we talked about this in Q3 and happy to report that we were able to realize the price increases across the market. But as I said, we're in balance as we exited the year and would be certainly in balance in Q1, which would take away the sort of the headwind.

I couldn't say this is an exact percentage just given the fact that we have a different customer base and different impacts whether it's with our banking partners or with our retail customers. And so I wouldn't want to characterize that so specifically.

But I think typically we've seen in these types of environments that pricing is typically 50% and volume 50%, so just looking at the increases. And I think that translates not just in the US but globally..

And George maybe I can add to that. I think the important piece here is we recognize and this is why Mark certainly presented a lot of this in his comments that this is a major issue inflation, supply chain impact and what that is impacting many companies today.

But we are an industrial services business and really not your typical industrial business looking at a key cost of our goods coming from imported raw materials or from other costs associated with that that either we can't get because of the supply chain or the delayed or the costs are going up materially and we're trying to stay ahead of that.

Our biggest component, obviously, is labor and then you drop down from that, our other costs associated of inputs are relatively small and they clearly are not related to other inflationary costs associated with it other than some of the things such as fuel costs and so forth, which markets rest.

So I think that's the major difference that we're seeing. Clearly we were not ahead of the inflationary labor cost in the second half of last year I should say probably more than just that in last year. But as Mark suggested, we've gotten ahead of that now.

We're pleased with that and that has helped us in the labor supply demand market in the US as he suggested as well, so both of those things are positive things as we start this year and go through the year. But it's quite a bit different. And I want to stress this.

It's quite a bit different than many other industrial businesses that are seeing the impact of both supply chain, availability of the inputs as well as the cost of those inputs..

Got it. That’s helpful. And then you mentioned Strategy 2.0 revenue should double this year to about 5% of total revenue.

Can you elaborate on some of the recent traction you've seen with Brink's Complete and also your ATM management services?.

Yeah. So we are continuing to see -- let's start with ATM. We are continuing to see growth there in the PAI acquisition that we did last year, not only continues to perform as we modeled but we continue to see organic growth there as well, bringing on new customers, new terminals and so forth.

The second part of that is around the retail solutions with our Brink's Complete solution that we talked about at Investor Day. And again we mentioned some of the customers and some of the large names that we had already agreed to and that continued. I'd say that progress continues George.

And nothing beyond what we talked about in December I guess from a large customer announcements, but many on the way as we've started to really flush out our pipeline of opportunities and have pretty bold expectations for the rest of the year..

And George that includes things such as our continued ramp-up of BPCE and the on-boarding of that business in France, other additional ATM wins that Mark talked about that are in place we'll see this year and then continued like he suggested of our retail solutions that are really what we consider to be the digital cash payment solutions.

And that -- the latter part of this year and into the rest of our Strat plan period of time, hopefully we'll see an acceleration of things such as the partnerships that he mentioned both with Clover as well as other what I consider what I call non-cash digital payment players offering the full suite of payment solutions for them that they don't have today..

Pipeline is getting bigger..

Thank you..

Our next question comes from Kenneth Williamson from JPMorgan. Please go ahead with your question..

Hi. Thanks for taking my question. I was just curious if you could maybe share a little bit more detail on the margin improvement that you're anticipating for 2022. I'm curious you talked a little bit about your pricing strategy and pricing being in line with costs.

Is any of that margin improvement coming from cost increases that exceed the overall increasing in the cost to serve side of things or is that coming mostly from other initiatives? And if you could maybe kind of walk me through the breakdown of where that margin improvement is expected from, appreciated..

Well, so as we mentioned, we're targeting -- and if you look at the range of our guidance, we're targeting approximately 100 basis points improvement in margin in 2022 guidance. And that comes from a combination in what our increase in our revenue is and the costs associated with it.

And what we're basically looking to try and make sure we get to this year as it relates to labor is that that's in line, that's balanced. And the balance of what we see is continued, what we call lean cost reductions. We call the WD as Mark pointed out and the cost reductions associated with that.

And then, with the improved revenue, the leverage associated with that organic revenue increase and the margin that drops from that increases our overall margin percentage, because it generally drops to the bottom line at a margin that's a little bit higher than our overall margin because our fixed costs don't go up as much as our variable cost.

So, those are the two things that drive that. And then as we said before, a doubling of our 2.0 digital solutions revenue about 3 percentage points of margin -- excuse me revenue growth in the year, that's also at higher margins as I said, I call it, accretive to our margins. That's at higher margins than we -- than our overall average.

All of that translates into a projection as we suggested in our margins. If you take a look at the range of 90 basis points to about 120 basis points margin improvement or our target of 100 basis points improvement throughout the year. I hope that helps..

Yeah, thank you. That’s very helpful. If I could ask one follow-up..

Sure..

You guys talked a little bit about your pipeline for acquisition. I'm kind of curious one of your competitors made an acquisition of title recently. And I'm curious if that changes at all how you think about what equipment you use for providing some of those digital solutions..

It is an interesting move in the marketplace. And we think that what we offer as a complete system again our 2.0 solutions that we think are leading in our industry and frankly in the digital payment marketplace, we offer the only true digital cash solution in the marketplace today. That includes hardware.

But as important, it's our unique hardware with our software that interconnects at highly tech-enabled and then complete ecosystem that provides the complete solution, including the next day working capital payments just like any other card-based or other digital payment solution, what other players in the marketplace including the one you mentioned, it's not a complete total solution like that.

So it's our job to keep -- make sure our strategy continues to be out in front and ahead of competition and offering a solution that as we say is for cash is equal to or better than other non-cash digital solutions and the ability to execute that in a way that is just as good as other digital solutions.

So that it then can be integrated in with and take advantage of the payments whether they're through partners other channels of distribution and take advantage of the significant what we call white space or unvented portion of the digital payments marketplace that doesn't have a cash solution today. That's our strategy.

That's where we're accelerating to get to. Last year we kind of matured that product dramatically and are now in the process of aggressively rolling that through not only our existing direct channel which is the channel that you mentioned the competitors going after as well as these indirect channels with partners.

And we think we have a better mousetrap a better total solution which has to be a total solution and we're out in front. And it's our job to stay out in front. .

Okay. I appreciate that.

Do you think that the -- from the hardware standpoint of it do you anticipate any changes to your strategy in light of that transaction?.

Well so part of our strategy on hardware all right is a total solution. And that total solution is very tech-enabled which allows us frankly to have the hardware portion of our total strategy to be less costly for us and therefore less costly for the customer. It's the tech-enabled portion of this that pulls it all together that allows us to do that.

And so that's one advantage and we think it's an important advantage and it's proprietary in terms of the hardware the solution and everything that pulls it together. So our hardware is proprietary now versus where it was before.

And one of the things -- the earlier question that we've talked about of how can we go after and how do we think we can expand that market for the large portion of the market. Over 75% of the US market is unvented today for a cash management solution.

We think a way to go after that is to make sure that we are able to provide a cost-effective, easy to use similar to the rest of digital payment solution for that marketplace. And that's what we think we have that's different than others out in the marketplace today. .

Okay. Thank you..

And ladies and gentlemen with that we'll end today's question-and-answer session as well as today's conference call. We do thank everyone for attending today's presentation. You may now disconnect your lines..