Slide 1: Investor Presentation Second Quarter 2020
1 Investor Presentation SECOND QUARTER 2020
Slide 2: Agenda
2 Agenda Business Overview Forward - Looking Statements and Non - GAAP Financial Information : Our discussions during this conference call and in this presentation will include forward - looking statements . Actual results could differ materially from those projected in the forward - looking stateme
Slide 3: Business Overview
3 Business Overview
Slide 4: Who We Are
Who We Are PURPOSE To take care of the people, spaces and places that are important to you VISION To be the clear choice in the industries we serve through engaged people MISSION To make a difference, every person, every day
Slide 5: 2020 Vision Achievements
5 $1.62 $2.05 Adjusted EPS $0.94 $1.91 Continuing EPS SIGNIFICANT GROWTH AND CONTINUED OPPORTUNITY AHEAD 2020 Vision Achievements $4.9 $1.6 $6.5 $2.4 Revenue (Billions) Market Cap (Billions) FY 2015 FY 2019 ¹ Please refer to the appendix for a reconciliation of GAAP to non - GAAP measures. 1 Revenue
Slide 6: Founded in 1909 | $6.5 Billion in Revenue
6 Founded in 1909 | $6.5 Billion in Revenue
Slide 7: Building Value Through Industry Expertise
7 Aviation Business & Industry Education Technology & Manufacturing Building Value Through Industry Expertise Keeping your environment safe, clean, comfortable and energy efficient through individual or integrated solutions
Slide 8: Industries We Serve
8 Business & Industry (50%) Aviation ( 15% ) Technology & Manufacturing ( 14% ) Education ( 13% ) Technical Solutions (8%) Industries We Serve Results as of fiscal 2019.
Slide 9: Services We Perform
Services We Perform ~ = fi ‘Aviation Business & Education Industry a Technology & Technical Manuracturing Solutions © Janitorial Parking & Transportation ies Chang an fecng Sec ‘Sh ar Tepersnen Svcs, arsSuice ow cape care ‘ake Pargar Socal Eve Seas i) @ SS Aviation Services sna inci roman pean may a
Slide 10: Targeting the Outsourcing Continuum
10 Impact to operating costs through SOPs , labor management , technology and purchasing energy and asset lifecycle management Majority self - performed services maximizes alignment with client workplace strategy, increases quality, efficiency and control, and reduces management costs + + $ Value =
Slide 11: In Summary...
Tom ne, every person, everyday In Summary...
Slide 12: Responding to COVID-19
12 Responding to COVID - 19
Slide 13: COVID-19 has impacted our business
13 As with most companies, COVID - 19 has impacted our business This is a dynamic, rapidly shifting environment – with significant externalities “Shelter in place” mandates have been in place – managed by city/state A “new normal” for office occupancy and trends Most sensitive business segments incl
Slide 14: We have taken rapid action
14 We have taken rapid action | Our agile, action - oriented teams… Operational Response Team Capture cross - functional input on latest COVID developments Field Execution Team Cascade, execute, and track actions across IGs and the organization …are working in lockstep to take coordinated ac
Slide 15: Potential opportunities in a post COVID-19 world
15 Potential opportunities in a post COVID - 19 world: New and increased expectations for workspace and building cleanliness and sanitization Rising demand for service volume and frequency Focus on higher value - added services, such as EnhancedClean ™, to meet new "hyper - vigilant" cleaning enviro
Slide 16: ABM's services deemed essential during the pandemic
16 x ABM’s services have been deemed “essential” to doing business during the ongoing pandemic x Shift towards wellness as COVID - 19 highlights the need to provide building occupants with a safe environment x Building occupants are hyper - aware of the appearance of cleanliness and expect more tran
Slide 17: ABM EnhancedClean
17 ABM EnhancedClean™ ABM’s EnhancedClean™ program is a three - step approach that delivers healthy spaces under the guidance of experts 3 Key Differentiators Processes Backed by Experts Hospital Grade Disinfectants & Specialized Equipment Innovative Solutions and Technology
Slide 18: Our Post-COVID Future
18 Our Post - COVID Future | ABM strengths will drive advantage across markets Comprehensive service line offering Deep client relationships Engaged people These advantages are core components of our market strength today and will continue to propel us into the future Scale advantage Results oriente
Slide 19: Second Quarter 2020 Review
19 Second Quarter 2020 Review
Slide 20: Q2 FY20 Revenue
20 $1,594.7 $1,496.0 2019 2020 Q2 FY20 Revenue Second Quarter 2020 Review
Slide 21: Q2 FY20 Income from Continuing Operations
21 Q2 FY20 Income (Loss) from Continuing Operations $31.5 $40.4 2019 2020 Q2 FY20 Adj. Income from Continuing Operations $29.9 ($136.8) 2019 2020 1 FY 2020 includes pre - tax non - cash goodwill and intangible impairment charge of $172.8 million, $170.6 million after tax or $2.5 5 per diluted share.
Slide 22: Q2 FY20 Net Income and Adjusted EBITDA
22 Q2 FY20 Net Income (Loss) $84.7 $91.0 2019 2020 Q2 FY20 Adj. EBITDA $29.7 ($136.8) 2019 2020 Second Quarter 2020 Review 2 $0.45 per share ($2.05) per share 6.1% margin 5.3% margin 1 FY 2020 includes pre - tax non - cash goodwill and intangible impairment charge of $172.8 million, $170.6 million a
Slide 23: Second Quarter 2020 Segment Results
23 Second Quarter 2020 Segment Results Business & Industry • Revenues of $785.6m vs. $807.7m last year • Operating profit of $59.2m, operating margin of 7.5% Technology & Manufacturing • Revenues of $233.7m vs. $224.3m last year • Operating profit of $19.7m, operating margin of 8.4% Aviation • Reven
Slide 24: Segment Operating Margin
24 Segment Operating Margin Operating Margin Excluding Impairment Business & Industry 7.5% NO CHANGE Technology & Manufacturing 8.4% NO CHANGE Aviation NM 0.3% Education NM 6.8% Technical Solutions NM 3.2% Second Quarter 2020 Segment Results 1 Excludes impact of pre - tax non - cash goodwill and int
Slide 25: Capital Structure
25 Capital Structure
Slide 26: Select Cash Flow and Balance Sheet Items: Leverage
26 Select Cash Flow and Balance Sheet Items Leverage *Acquired GCA Services Group for approximately $1.3b, largest acquisition in Company’s history Other acquisitions shown represent purchase price above $15m As of Q2 FY20, leverage calculated as total indebtedness net of $100m/bank - defined pro -
Slide 27: Select Cash Flow and Balance Sheet Items: Shareholder Return
27 Select Cash Flow and Balance Sheet Items Shareholder Return I N M ARCH 2020 , THE C OMPANY SUSPENDED ALL FURTHER SHARE REPURCHASES A S THE COVID - 19 P ANDEMIC DEVELOPED (in millions) *
Slide 28: Select Cash Flow and Balance Sheet Items: Annual Dividend
28 Select Cash Flow and Balance Sheet Items Annual Dividend LONG HISTORY OF CONSECUTIVE DIVIDEND GROWTH 2Q20 MARKS THE 216 TH CONSECUTIVE QUARTERLY CASH DIVIDEND (in millions)
Slide 29: Select Cash Flow and Balance Sheet Items: Liquidity
29 Cash & Cash Equivalents Credit Facility Capacity Net Cash Provided by Operating Activities of Continuing Operations Free Cash Flow $555.9m $152.5m $162.3m $154.6m 1 Free cash flow is defined as net cash provided by operating activities less additions to property, plant and equipment. 1 T HE C OMP
Slide 30: Credit Facility Amendment
30 Credit Facility Amendment Financial Covenants Q2 Q3 Q4 Q1 Q2 Q3 Q4 Previous Maximum Leverage Ratio Covenant 4.00x 3.75x 3.75x 3.75x 3.75x 3.50x 3.50x New Maximum Net Leverage Ratio Covenant 4.25x 5.75x 6.50x 6.50x 6.00x 5.25x 5.00x Previous Minimum Fixed Charge Coverage Ratio 1.50x 1.50x 1.50x 1.
Slide 31: Appendix
31 Appendix
Slide 32: Forward Looking Statements
32 Forward Looking Statements This presentation contains both historical and forward - looking statements about ABM Industries Incorporated (“ABM”) and its subsidiaries (collectively referred to as “ABM,” “we,” “us,” “our,” or the “Company”) . We make forward - looking statements related to future e
Slide 33: Use of Non-GAAP Financial Information
33 Use of Non - GAAP Financial Information To supplement ABM’s consolidated financial information, the Company has presented income from continuing operations and income from continuing operations per diluted share as adjusted for items impacting comparability, for the second quarter of fiscal years
Slide 34: Unaudited Reconciliation of Non-GAAP Financial Measures
34 Unaudited Reconciliation of Non - GAAP Financial Measures (a) The Company adjusts (loss) income from continuing operations to exclude the impact of certain items that are unusual, non - recurring, or otherwise do not reflect management's views of the underlying operational results and trends of t
Slide 35: Unaudited Reconciliation of Non-GAAP Financial Measures
35 Unaudited Reconciliation of Non - GAAP Financial Measures
Slide 36: Unaudited Reconciliation of Non-GAAP Financial Measures
36 Unaudited Reconciliation of Non - GAAP Financial Measures
Slide 37: Contact Us
37 Contact Us INVESTOR RELATIONS Susie A. Kim (212) 297 - 9721 susie.kim@abm.com