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Brink's to revamp Netherlands ops after losing major customer

As it winds up its ATM servicing relationship with Rabobank, Brinks is contemplating the closure of three facilities and the downsizing of its workforce by about 600 employees.

October 21, 2014

Following the loss of its largest customer in the Netherlands, Rabobank, Brink's Co. will restructure its operations in that country. Brink's expects to incur a charge of $16 million to $22 million against third quarter GAAP earnings in anticipation of the expected cessation of service to Rabobank on July 1, 2015.

The restructuring plan includes the potential closure of three Brink's branches and a workforce reduction of approximately 600 employees, a press release from Brink's said.

In 2013, Brink's Netherlands operations generated approximately $120 million of revenue at an operating margin rate that was slightly above the company average. Upon completion of restructuring activities, the remaining business is expected to generate annual revenue of approximately $40 million, primarily from retail customers.

In 2011, the country's three largest banks — Rabobank, ING Bank and ABN AMRO — with the support of the central bank of the Netherlands, founded a collaborative entity known as Geldservice Nederland B.V. Since then, GSN has provided money-processing services for the three banks, while Brink's has provides all ATM managed services to Rabobank. In July 2015, GSN will take over these services.

Brink's challenged the validity of the GSN entity, based on antitrust regulations, however that effort was unsuccessful.

The potential loss of business in the Netherlands was considered prior to the company's July 24 disclosure of its goal to achieve a non-GAAP segment margin rate of 8 percent by the end of 2016. This goal remains unchanged the release said.

Brink's will provide additional details on the restructuring plan on its third-quarter earnings conference call on Oct. 30.