Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Steven Fisher - UBS.
Steven Fisher - UBS
What part of the business at Brink’s Inc. in North America drove the 7% growth? It sounded like the U.S. part was kind of weak. Was it entirely Canada?
Michael Dan
No. Canada had reasonable growth, we went through the bank bidding season, as they call it, during the last quarter where we were able to gain some share, so Canada is on the uptick. We did have further growth in the United States in some of our value-added services.
As you know, when we sign up, for instance, a [CompuSave] customer, it takes a little while for the efficiencies of the new customers to be integrated into our system to fall to the bottom line. So you are seeing the revenue growth from our success in value-added services and we just haven’t seen the benefit yet if it falling to the bottom line.
Steven Fisher - UBS
That was one of the things that you mentioned, one of the things that would drive potential improvement in the business for the back half of the year. Is that specifically [CompuSave] or is it other parts of the value-added services?
Michael Dan
It will be all three. We are looking for some strong improvements in our global services business and on a domestic basis, which we are starting to see already. The [CompuSave] is key and of course our [iVault], and [iCash] high value services are starting to gain traction; our pipeline is pretty full. We are pretty excited about where we are in the U.S., we are just not happy with the results.
Labor was a big factor in the shortfall and I think it was really a management focus issue. A lot of things to do in running this business, but management is on it in the U.S. and the metrics there are tracking in a positive fashion.
Steven Fisher - UBS
In terms of the costs that you mentioned and the way you have them in the press release, is that the relative order of magnitude in terms of labor, fuel and legal settlements?
Michael Cazer
I would say that it was 50% labor, 50% fuel and the legal settlements.
Steven Fisher - UBS
You mentioned that in order to hit the margin targets you would need some cost reductions in the back half of the year. Where do you think those reductions are going to come from?
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