Slide 1: Q3 2023 Earnings Call
Q3 2023 Earnings Call November 2, 2023
Slide 2: Forward Looking Statements and Disclaimers
Forward Looking Statements and Disclaimers Please note that in this presentation the Company may discuss events or results that have not yet occurred or been realized, commonly referred to as forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The Company uses certain non-GAAP financial measures that are included in this presentation and the additional financial inform
Slide 4: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) • The Company presents free cash flow, adjusted free cash flow and adjusted free cash flow conversion, which are liquidity measures used by management as factors in determining the amount of cash that is available for working capital needs or other uses of cash,
Slide 5: APi's "13/60/80" Shareholder Value Creation Framework
APi’s “13/60/80” Shareholder Value Creation Framework Building Great Leaders Growing Revenue • Teammate safety and engagement • Delivering long-term organic revenue growth above industry average • Everyone, everywhere is a leader • Go-to-market strategy of selling inspections • Best-in-class field l
Slide 6: Third Quarter 2023 Performance Highlights
Third Quarter 2023 Performance Highlights Third quarter net revenues of $1.8 billion, an increase of 2.8% Organic net revenue growth of 1.3% in the third quarter Adjusted gross margin expansion of 270 basis points in the third quarter Third quarter adjusted EBITDA of $224 million, representing adjus
Slide 7: 2023 Financial Results Overview
2023 Financial Results Overview THREE MONTHS ENDED SEPTEMBER 30, 2023 NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA Total: $1.8 billion(1) Total: $518 million Total: $252 million(1) 22% 32% 33% 68% 67% 78% Safety Services Specialty Services Notes: Refer to Appendix for a reconciliation of non-G
Slide 8: Key Financial and Operating Metrics
Key Financial and Operating Metrics THREE MONTHS ENDED SEPTEMBER 30, ($ in millions, except per share figures) 2023 2022 YoY Change YoY (FFX)(a) Net Revenues $ 1,784 $ 1,735 + 2.8% + 1.6% Organic Net Revenue Growth (b) + 1.3% Adjusted Gross Profit $ 518 $ 457 + 13.3% Adjusted Gross Margin 29.0% 26.3
Slide 9: Key Segment Financial and Operating Metrics
Key Segment Financial and Operating Metrics THREE MONTHS ENDED SEPTEMBER 30, Safety Services Specialty Services YoY YoY YoY YoY ($ in millions) 2023 2022 Change (FFX)(a) 2023 2022 Change (FFX)(a) Net Revenues $ 1,217 $ 1,154 + 5.5% + 3.5% $ 569 $ 590 (3.6)% (3.6)% Organic Net Revenue Growth (b) + 3.
Slide 10: Updated 2023 Guidance as of November 2, 2023
Updated 2023 Guidance as of November 2, 2023 NET REVENUES ADJUSTED EBITDA $6,900 - $6,950 million $775 - $785 million Down from Up(1) from $7,015 – $7,075 million $765 – $785 million (1) Represents an increase at the bottom end. APi GROUP | BUILDING GREAT LEADERS® 10
Slide 11: Updated 2023 & Q4 Guidance as of November 2, 2023
Updated 2023 & Q4 Guidance as of November 2, 2023 Q4 2023 FY 2023 Net Revenues $1,730 to $1,780 million $6,900 to $6,950 million Reported Net Revenues versus Last Year 2% - 5% 5% - 6% Net Revenue Organic Growth 1% - 4% 5% - 6% at Fixed Currencies Adjusted EBITDA $200 to $210 million $775 to $785 mil
Slide 12: Capitalization
Capitalization As of the end of the third quarter, our net debt to adjusted EBITDA ratio was approximately 2.7x calculated pursuant to terms of existing debt agreements Remain laser focused on cash generation and deleveraging to below our target net leverage ratio of 2.5x by year-end 2023 Executed 5
Slide 13: APi's Continuous Evolution into an Asset Light, Services-Focused Business Model
APi’s Continuous Evolution into an Asset Light, Services-Focused Business Model Net Revenues ($B) $6.9 Key Takeaways: $6.6 Portfolio Evolution • 35+ acquisitions from 31% 2018-2023 with 85%+ of transactions in Safety Service including Chubb $4.1 • 2 divestitures in Specialty $3.9 Services from 2020
Slide 14: Appendix
GROUP Appendix
Slide 15: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Net Capital Expenditures $ IN MILLIONS (1) Based on midpoint of full year revenue guidance provided on November 2, 2023 and $90 million of annual capital expenditures. (2) Represents $13 million of proceeds from the sale of PP&E for the nine months ended
Slide 16: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Organic Change in Net Revenues (non-GAAP) a) Represents the effect of foreign currency on reported net revenues, calculated as the difference between reported net revenues and net revenues at fixed currencies for both periods. Fixed currency amo
Slide 17: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Gross Profit (non-GAAP) $ IN MILLIONS Adjusted SG&A (non-GAAP) a) Adjustment to reflect the addback of amortization expense related to backlog intangible assets. b) Adjustment to reflect the elimination of costs related to the fair valu
Slide 18: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted EBITDA (non-GAAP) $ IN MILLIONS a) Adjustment to reflect the elimination of the expense attributable to deferred consideration to prior owners of acquired businesses not expected to continue or recur. b) Adjustment to reflect the elimin
Slide 19: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted income before income tax, net income (loss) and EPS (non-GAAP) $ IN MILLIONS a) Adjustment to reflect the addback of pre-tax amortization expense related to intangible assets. b) Adjustment to reflect the elimination of the expense attr
Slide 20: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Segment Financial Information (non-GAAP) $ IN MILLIONS a) Information derived from non-GAAP reconciliations included elsewhere in this presentation. b) Calculated from results of the Company's operating segments shown above, excluding C
Slide 21: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Segment Financial Information (non-GAAP) $ IN MILLIONS a) Adjustment to reflect the addback of amortization expense related to backlog intangible assets. b) Adjustment to reflect the elimination of expenses associated with restructuring
Slide 22: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Segment Financial Information (non-GAAP) $ IN MILLIONS a) Adjustment to reflect the addback of amortization expense related to backlog intangible assets. b) Adjustment to reflect the elimination of costs related to the fair value step-u
Slide 23: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Segment Financial Information (non-GAAP) $ IN MILLIONS a) Adjustment to reflect the elimination of the expense attributable to deferred consideration to prior owners of acquired businesses not expected to continue or recur. b) Adjustmen
Slide 24: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Change in adjusted EBITDA (non-GAAP) a) Adjusted EBITDA derived from non-GAAP reconciliations included elsewhere in this presentation. b) Adjusted to eliminate the impact of foreign currency on adjusted EBITDA amounts, calculated as the differen
Slide 25: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Free Cash Flow and Conversion (non-GAAP) $ IN MILLIONS a) Operating cash flows and purchases of property and equipment for the nine months ended September 30, 2023 and 2022 are as reported. Amounts for the three months ended September 3
Slide 26: Investor Relations and Media Inquiries
Investor Relations and Media Inquiries: Adam Fee Vice President of Investor Relations +1 651-240-7252 email: investorrelations@apigroupinc.us APi GROUP | BUILDING GREAT LEADERS® 26
Slide 27: Q3 2023 Earnings Call
APi Q3 2023 GROUP Earnings Call