Slide 1: Q1 2024 Earnings Call
Q1 2024 Earnings Call May 2, 2024
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-U.S. GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The Company uses certain non-U.S. GAAP financial measures that are included in this presentation and the additional financ
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 B u i l d i ng G r e a t L e a d e r s G r o w i n g R e v e nu e • The safety, health, and well-being of each of • Delivering long-term organic revenue growth our leaders is our #1 value above industry average • Everyone, everywhere is a leader
Slide 6: First Quarter 2024 Performance Highlights
First Quarter 2024 Performance Highlights First quarter net revenues of $1.6 billion, a decrease of 0.8% Organic net revenue decline of 1.4% in the first quarter (compared to organic growth of approximately 12% in Q1 2023) which was driven by disciplined customer and project selection and lower reve
Slide 7: First Quarter 2024 Financial Results Overview
First Quarter 2024 Financial Results Overview THREE MONTHS ENDED MARCH 31, 2024 NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA Total: $1.6 billion(1) Total: $492 million Total: $208 million(1) 24% 14% 16% 76% 86% 84% Safety Services Specialty Services Notes: Refer to Appendix for a reconciliatio
Slide 8: Key Financial and Operating Metrics
Key Financial and Operating Metrics THREE MONTHS ENDED MARCH 31, ($ in millions, except per share figures) 2024 2023 YoY Change YoY (FFX)(a) Net Revenues $1,601 $1,614 (0.8)% (1.2)% Organic Net Revenue Growth (b) (1.4)% Adjusted Gross Profit $ 492 $ 432 + 13.9% Adjusted Gross Margin 30.7% 26.8% + 39
Slide 9: Key Segment Financial and Operating Metrics
Key Segment Financial and Operating Metrics THREE MONTHS ENDED MARCH 31, Safety Services Specialty Services YoY YoY YoY YoY ($ in millions) 2024 2023 2024 2023 Change (FFX)(a) Change (FFX)(a) Net Revenues $ 1,214 $ 1,191 + 1.9% + 1.5% $ 389 $ 430 (9.5)% (9.5)% Organic Net Revenue Growth (b) + 0.2% (
Slide 10: Q2 and Full Year 2024 Guidance
Q2 and Full Year 2024 Guidance Continue to expect full year net revenue to range from $7.05 to $7.25 billion, adjusted EBITDA to range from $855 to $905 million, and adjusted free cash flow conversion for the year to be approximately 70% This guidance has not been adjusted to include the impact from
Slide 11: Capitalization
Capitalization As of the end of the first quarter, our net leverage ratio was approximately 2.8x calculated pursuant to terms of existing debt agreements, not adjusted for the Elevated acquisition and second quarter financing activities On April 16th, priced primary follow-on offering of 12.65 milli
Slide 12: Series B Retirement Transaction Overview
Series B Retirement Transaction Overview On February 28, 2024, APi reached an agreement with shareholders affiliated with Blackstone Tactical Opportunities Fund (“Blackstone”) and Viking Global Equities (“Viking”) to retire all the outstanding shares of their Series B Perpetual Convertible Preferred
Slide 13: Series B Retirement Transaction Overview (cont.)
Series B Retirement Transaction Overview (cont.) The transaction provides substantial benefits to APi and its common stockholders: Simplifies APi Group’s capital structure Preserves our strong, opportunistic balance sheet Reduces adjusted diluted share count by 16.3 million shares Provides immediate
Slide 14: Acquisition of Elevated
Acquisition of Elevated • $570 million cash consideration, subject to working capital and other standard adjustments • Establishes new platform in the highly attractive elevator and escalator services space • Expected to contribute approximately $220 million in annual revenue at a ~20% Adjusted EBIT
Slide 15: Summary Investment Highlights
Summary Investment Highlights 1 Establishes new, adjacent platform in the highly attractive elevator and escalator service market 2 Expands total addressable market by $10B+ and creates cross-selling opportunities 3 Highly recurring revenue driven by non-discretionary demand 4 Accretive to APi’s “13
Slide 16: Elevated is a Logical Extension into a Highly Attractive Market
Elevated is a Logical Extension into a Highly Attractive Market Acquisition adds a further $10B+ of total addressable market to APi’s current market opportunity Attractive Industry Characteristics U.S. Vertical Transportation Market Total Addressable Services Market Elevated Focus Area Continuous sa
Slide 17: Elevated is Accretive to APi's "13/60/80" Shareholder Value Creation Framework
Elevated is Accretive to APi’s “13/60/80” Shareholder Value Creation Framework Shareholder Value APi Standalone 2023 Elevated Standalone 2023 Creation Targets for APi 13%+ Adjusted EBITDA margin 11.3% Adjusted EBITDA margin ~20% Adjusted EBITDA margin by 2025 in 2023 Long-term goal of 60% of revenue
Slide 18: Appendix
GROUP Appendix
Slide 19: What We Do
What We Do SAFETY SERVICES Life Safety & Security HVAC Systems & Servicing rd e
Slide 20: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 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 amounts are
Slide 21: 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 addback of amortization expense. c) Adjustmen
Slide 22: 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 23: 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 24: 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 25: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Adjusted Segment Financial Information (non-GAAP) $ $ II N N M M II L LLL II O ONNS S a) Adjustment to reflect the addback of amortization expense related to backlog intangible assets. APi GROUP | BUILDING GREAT LEADERS® 25
Slide 26: 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 27: 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 28: 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) Adjustment to reflect the elimination of deferred payments to prior owners of acquired businesses not expected to continue or recur. b) Adjustment to reflect the elimination of e
Slide 29: 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® 29
Slide 30: Q1 2024 Earnings Call
APi Q1 2024 GROUP Earnings Call