Interim Results Broadly Positive for Industry

Until relatively recently, we ran a round-up of company results in the quarterly Industry Watch. We have replaced this with a periodic summary of central bank annual reports relating to cash, but continue to cover the companies in our sector with reviews of their interim and annual results.

This month we look at Spectra Systems, Crane NXT, Orell Füssli Security Printing, Brinks, Prosegur and NCR.

Spectra reports strong first half

Spectra Systems Corporation reported revenue of $11.6 million for the first half of this year, a 25% improvement over the first half last year. Adjusted EBITDA at $5.9 million exceeded the previous year’s first half results by 55%.

CEO Nabil Lawandy indicated that the increased revenues were derived principally from pre-production development contracts as well as larger demand for materials from a central bank customer. He also indicated that the company achieved key milestones with its sensor development contract and that it was now moving into the final phase of the programme.

The company also executed a $1.9 million contract with a central bank customer for quality control equipment which will impact its revenue and profitability in 2024-2025.

In other banknote related business, Spectra, having formed a relationship with the largest commercial printer of polymer banknotes, is nearing completion of a house note that will incorporate both its Fusion™ machine readable security as well as the printer’s newest public security feature.

Also, the company’s first Banknote Disinfection System (BDS) for use by an Asian central bank is now operational and will act as a reference for other central banks.

Crane NXT raises full year guidance

Crane NXT – comprising Crane Currency and Crane Payment Innovations – completed its separation from Crane Co in April.

Revenues for H1 2023 were $681.5 million, up 2.2% on the same period the previous year. Operating profit fell by 10.4% to $134.7 million, largely due to a tripling of corporate charges to $44.2 million. Pre-tax income fell by 11.6% to $110.5 million.

Crane Currency recorded revenue and operating profit increases in the second quarter of 3% and 18% respectively over the same period in 2022. This however did not make up for the decline in both in the first quarter compared with the same period in 2022.

First half revenue at $231.8 million was 5.1% lower than in the same period last year. Operating profit was 19% lower at $52.3 million.

However, Crane Currency’s improved performance in the second quarter, and Crane Payment Innovations’ growth in both revenue (+6.5%) and operating profit (+26.25%) in the first half, enabled Crane NXT to revise upwards its full year 2023 range of adjusted EPS by 2.7%.

Encouraging prospects for Orell Füssli

Revenue for the first half year for Orell Füssli Security Printing was CHF 39.2 million (out of CHF 105 million for the group as a whole), 3% higher than in H1 2022. Operating profit (EBIT) was 22% lower at CHF 6.1 million.

In the Industrial Systems division, ie. Zeiser, sales were up by 7% to CHF 11.8 million, whilst EBIT fell from CHF 1.9 million to CHF 0.8 million (albeit that, in the same period last year, a property sale had contributed around CHF 1 million to the operating result).

The company noted that the number of tenders in the banknote sector and investment interest in Zeiser printing equipment were encouraging. Capacity utilisation was good, and the company has won tenders to print banknotes for several customers in the global south.

However, the company also noted that despite high international inflation, market prices only reflected this to a very limited extent. As a result, some competitors were coming under noticeable strain and the pressure on margins remains very high.

Brinks’ embarks on restructuring

Revenue for the first half of 2023 increased by 9% to $2.4 billion. In Europe, it increased by 24% to $555 million, by 9% in Latin America to $649 million, 4% in North America to $799 million and 2% in the Rest of the World (ROW) to $398 million.

Operating profit (non-GAAP) increased by 10% to $259 million and (GAAP) by 17% to $185 million. By region, the operating profit as a percentage of sales was: North America 9.5%, Latin America 20.4%, Europe 9.2%, and ROW 19.7%.

In the first quarter of 2023, management completed the review and approval of the previously announced restructuring plan, which is designed to enable growth, reduce costs and related infrastructure, and to mitigate the potential impact of external economic conditions.

The program will cost $42-48 million to implement, but when complete, will reduce the workforce by 3,300 to 3,500 positions, resulting in annualised cost savings of approximately $60 million.

New products support Prosegur’s growth

Prosegur Cash reported revenue of €979.1 million for the first six months of this year, a 10.9% increase over H1 2022. EBITA increased by 7.1% to €129 million.

Sales were up by 3% in Latin America, the company’s largest business segment, accounting for 63.3% of the total revenues in the first half. Sales in Europe, where the company has a 30% market share, were up by 31%. The rest of the world saw sales increase by 7.5%.

According to the company, new products played an important role, reaching €150 million in the first half of 2023. Cash automation solutions Cash Today, correspondent banking service Corban and foreign exchange business Forex have been the main drivers of new product growth.

NCR’s first half support separation

In the first half year, NCR’s revenue of $2.78 billion was only marginally higher than the first half of 2022, but income from operations nearly doubled to $258 million. Adjusted EBITDA increased from $610 million in H1 2022 (15.8% margin) to $691 million this first half (17.8% margin).

The company will shortly be separating into two companies – with NCR Voyix the name for the business specialising in digital commerce for retail, hospitality and banking, and NCR Atleos the name for the ATM and self-service banking business.

According to NCR, the name Voyix refers to the concept of a voyage of customers with NCR, while Atleos refers to an atlas or map of the company expanding access to ATMs worldwide.

NCR expects the latter to start ‘regular way’ trading on the New York Stock Exchange on 17 October, under the ticket NATL.