Abm Industries Incorporated · NYSE:ABM
Abm Industries — Q2 2020 Earnings Presentation
37 slides from Abm Industries's earnings presentation, 2020
Slide 1: Investor Presentation Second Quarter 2020
Investor Presentation SECOND QUARTER 2020 1
Slide 2: Agenda
Agenda 1 Business Overview 2 Responding to COVID-19 3 Second Quarter 2020 Review 4 Capital Structure 5 Appendix 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
Slide 3: Business Overview
Business Overview ABM. Building Value
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
$6.5 2020 Vision $4.9 Achievements SIGNIFICANT GROWTH $2.05 AND CONTINUED $2.4 $1.91 OPPORTUNITY AHEAD $1.62 $1.6 $0.94 1 Revenue (Billions) Revenue Market Cap Continuing EPS Adjusted EPS (Billions) (Billions) FY 2015 FY 2019 ¹ Please refer to the appendix for a reconciliation of GAAP to non-GAAP me
Slide 6: Founded in 1909 | $6.5 Billion in Revenue
Founded in 1909 | $6.5 Billion in Revenue 6
Slide 7: Building Value Through Industry Expertise
Building Value Through Industry Expertise Keeping your environment safe, clean, comfortable and energy efficient through individual or integrated solutions Aviation Business & Industry Education Technology & Manufacturing 7
Slide 8: Industries We Serve
Technical Solutions (8%) Industries We Education (13%) Serve Business & Industry (50%) Technology & Manufacturing (14%) Aviation (15%) Results as of fiscal 2019. 8
Slide 9: Services We Perform
Services We Perform a Fk =— Aviation Business & Industry Technology & Manuracturing Education Technical Solutions Janitorial Building Cleaning & Maintenance Green Cleaning and Recycling Services Hard Surface Floor & Carpet Care Clean Room and GMP Cleaning Staffing and Specialty Services Energy Solut
Slide 10: Targeting the Outsourcing Continuum
Targeting the Outsourcing Continuum Aligning workplace strategy with operational best practices for improved cost efficiencies, productivity, communication and scalability SAVINGS Majority self-performed services maximizes Impact to operating costs through SOPs, labor energy and asset alignment with
Slide 11: Purpose, Vision and Mission Summary
To make a difference, In Summary... To take care of the people, spaces and places that are important to you To be the clear choice in the industries we serve through engaged people every person, every day Electrical Lighting Facilities Engineering
Slide 12: Responding to COVID-19
Responding to COVID-19 12
Slide 13: COVID-19 Impact Across Our Footprint
Impact felt across our national footprint… This is a dynamic, rapidly shifting environment – with significant externalities “Shelter in place” mandates have been in place – As with most managed by city/state companies, COVID-19 has …and among our various end markets impacted our A “new normal” for o
Slide 14: Rapid Action by Agile, Action-Oriented Teams
We have taken rapid action | Our …are working in lockstep agile, action-oriented teams… to take coordinated actions across Operational Capture cross- functional input Response on latest COVID Team developments Our people Activity Our clients / Field Execution Actively managing our Tracking operation
Slide 15: Potential Opportunities in a Post COVID-19 World
New and increased expectations for workspace and building cleanliness and sanitization Potential Rising demand for service volume and frequency opportunities in a post COVID-19 Focus on higher value-added services, such as world: EnhancedClean™, to meet new "hyper-vigilant" cleaning environment High
Slide 16: ABM EnhancedClean
ABM EnhancedClean™ ABM’s services have been deemed “essential” to doing business during the ongoing pandemic Shift towards wellness as COVID-19 highlights the need to provide building occupants with a safe environment Building occupants are hyper-aware of the appearance of cleanliness and expe
Slide 17: ABM EnhancedClean
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 17
Slide 18: Our Post-COVID Future
Our Post-COVID Future | ABM strengths will drive advantage across markets Scale advantage These advantages are core Engaged people components of our market strength Results oriented operating culture today and will continue to propel Comprehensive service line offering us into the future Deep client
Slide 19: Second Quarter 2020 Review
Second Quarter 2020 Review 19
Slide 20: Second Quarter 2020 Review: Revenue
Second Quarter 2020 Review Q2 FY20 Revenue $1,594.7 $1,496.0 2019 2020 20
Slide 21: Second Quarter 2020 Review: Income from Continuing Operations
Second Quarter 2020 Review Q2 FY20 Income (Loss) from Q2 FY20 Adj. Income from Continuing Operations 1 Continuing Operations 2 $31.5 $40.4 $29.9 $0.47 $0.60 $0.45 per share per share per share ($2.05) per share ($136.8) 2019 2020 2019 2020 1 FY 2020 includes pre-tax non-cash goodwill and intangible
Slide 22: Second Quarter 2020 Review: Net Income and Adj. EBITDA
Second Quarter 2020 Review Q2 FY20 Q2 FY20 Net Income (Loss) 1 Adj. EBITDA2 $84.7 $91.0 5.3% 6.1% $29.7 $0.45 margin margin per share ($2.05) per share ($136.8) 2019 2020 2019 2020 1 FY 2020 includes pre-tax non-cash goodwill and intangible impairment charge of $172.8 million, $170.6 million after t
Slide 23: Second Quarter 2020 Segment Results
Second Quarter 2020 Segment Results Business & • Revenues of $785.6m vs. $807.7m last year Industry • Operating profit of $59.2m, operating margin of 7.5% Technology & • Revenues of $233.7m vs. $224.3m last year Manufacturing • Operating profit of $19.7m, operating margin of 8.4% • Revenues of $184.
Slide 24: Second Quarter 2020 Segment Operating Margin
Second Quarter 2020 Segment Results Operating Margin Segment Operating Margin 1 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% 24 1 Excludes impact of pre-tax non-cash goodwill and intan
Slide 25: Capital Structure
Capital Structure ABM. Building Value
Slide 26: Revolver Drawdown and Leverage
Select Cash Flow and Balance Sheet Items Revolver Drawdown Leverage GCA* (in millions) 8 Solutions Westway *Acquired GCA Services Group for approximately $1.3b, largest acquisition in Company’s history Other acquisitions shown represent purchase price above $15m 26 As of Q2 FY20, leverage calculated
Slide 27: Shareholder Return
Select Cash Flow and Balance Sheet Items Shareholder Return IN MARCH 2020, THE COMPANY SUSPENDED ALL FURTHER SHARE REPURCHASES AS THE COVID-19 PANDEMIC DEVELOPED (in millions) * 27
Slide 28: Annual Dividend
Select Cash Flow and Balance Sheet Items Annual Dividend LONG HISTORY OF CONSECUTIVE DIVIDEND GROWTH (in millions) 2Q20 MARKS THE 216TH CONSECUTIVE QUARTERLY CASH DIVIDEND 28
Slide 29: Liquidity
Select Cash Flow and Balance Sheet Items Liquidity 2Q20 RESULTS Net Cash Provided by Cash & Cash Credit Facility Operating Activities of Free Cash Flow 1 Equivalents Capacity Continuing Operations $555.9m $152.5m $162.3m $154.6m Total Liquidity of $708.4m THE COMPANY AMENDED ITS CREDIT FACILITY ON M
Slide 30: Credit Facility Amendment
Credit Facility Amendment 2020 2021 Financial Covenants Q2 Q3 Q4 Q1 Q2 Q3 Q4 Previous Maximum 4.00x 3.75x 3.75x 3.75x 3.75x 3.50x 3.50x Leverage Ratio Covenant New Maximum Net 4.25x 5.75x 6.50x 6.50x 6.00x 5.25x 5.00x Leverage Ratio Covenant 1 Previous Minimum Fixed 1.50x 1.50x 1.50x 1.50x 1.50x 1.5
Slide 31: Appendix
Appendix ABM. Building Value
Slide 32: Forward Looking Statements
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 expectati
Slide 33: Use of Non-GAAP Financial Information
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 2020
Slide 34: Unaudited Reconciliation of Non-GAAP Financial Measures
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 the Comp
Slide 35: Unaudited Reconciliation of Non-GAAP Financial Measures
Unaudited Reconciliation of Non-GAAP Financial Measures 35
Slide 36: Unaudited Reconciliation of Non-GAAP Financial Measures
Unaudited Reconciliation of Non-GAAP Financial Measures 36
Slide 37: Contact Us
Contact Us INVESTOR RELATIONS Susie A. Kim (212) 297-9721 susie.kim@abm.com 37