Slide 1: Q4 2023 Earnings Call
Q4 2023 Earnings Call February 28, 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-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 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 • Teammate safety and engagement • Delivering long-term organic revenue growth above industry average • Everyone, everywhere is a leader • Go-to-market strategy of selling inspecti
Slide 6: Fourth Quarter 2023 Performance Highlights
Fourth Quarter 2023 Performance Highlights Fourth quarter net revenues of $1.8 billion, an increase of 3.3% Organic net revenue growth of 1.5% in the fourth quarter Adjusted gross margin expansion of 230 basis points in the fourth quarter Fourth quarter adjusted EBITDA of $208 million, representing
Slide 7: Fiscal Year 2023 Performance Highlights
Fiscal Year 2023 Performance Highlights Record net revenues of $6.9 billion for the full year, an increase of 5.6% Organic net revenue growth of 5.4% in the full year 2023 Adjusted gross margin expansion of 180 basis points in the full year Adjusted EBITDA of $782 million, representing adjusted EBIT
Slide 8: 2023 Financial Results Overview
2023 Financial Results Overview THREE MONTHS ENDED DECEMBER 31, 2023 NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA Total: $1.8 billion(1) Total: $529 million Total: $248 million(1) 30% 18% 24% 70% 76% 82% FISCAL YEAR ENDED DECEMBER 31, 2023 NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA Tot
Slide 9: Key Financial and Operating Metrics
Key Financial and Operating Metrics THREE MONTHS ENDED DECEMBER 31, FISCAL YEAR ENDED DECEMBER 31, YoY YoY YoY YoY ($ in millions, except per share figures) 2023 2022 Change (FFX)(a) 2023 2022 Change (FFX)(a) Net Revenues $ 1,759 $ 1,703 + 3.3% + 2.1% $ 6,928 $ 6,558 + 5.6% + 5.6% Organic Net Revenu
Slide 10: Key Segment Financial and Operating Metrics
Key Segment Financial and Operating Metrics THREE MONTHS ENDED DECEMBER 31, Safety Services Specialty Services YoY YoY YoY YoY ($ in millions) 2023 2022 Change (FFX)(a) 2023 2022 Change (FFX)(a) Net Revenues $ 1,238 $ 1,201 + 3.1% + 1.5% $ 525 $ 510 + 2.9% + 2.9% Organic Net Revenue Growth (b) + 1.0
Slide 11: Series B Preferred Stock - Transaction Summary
Series B Preferred Stock - Transaction Summary • Conversion: All Series B Preferred Stock will be converted into common stock of APi, resulting in the issuance of a total of approximately 32.5 million new shares of common stock (“Conversion Shares”) • Repurchase: Upon issuance of the Conversion Shar
Slide 12: Series B Transaction Highlights
Series B Transaction Highlights Simplifies APi Group’s capital structure Reduces adjusted diluted share count by 16.3 million shares Provides immediate accretion to adjusted earnings per share Eliminates preferred dividend payments of $44 million annually Not expected to impact reacceleration of bol
Slide 13: 2024 Guidance
2024 Guidance NET REVENUES ADJUSTED EBITDA $7,050 - $7,250 million $855 - $905 million APi GROUP | BUILDING GREAT LEADERS® 13
Slide 14: 2024 Guidance (cont'd)
2024 Guidance (cont’d) Q1 2024 FY 2024 Net Revenues $1,560 to $1,610 million $7,050 to $7,250 million Reported Net Revenues versus Last Year (3)% - Flat 2% - 5% Net Revenue Organic Growth at Fixed Currencies (4)% - (1)% 2% - 5% Adjusted EBITDA $165 to $180 million $855 to $905 million Adjusted EBITD
Slide 15: Capitalization
Capitalization As of the end of the fourth quarter, our net leverage ratio was approximately 2.3x calculated pursuant to terms of existing debt agreements On December 19th, repaid $175 million of Term Loan, resulting in total 2023 debt paydown of $475 million and leaving $330 million remaining on ou
Slide 16: Appendix
GROUP Appendix
Slide 17: What We Do
What We Do SAFETY SERVICES Life Safety & Security HVAC Systems & Servicing rd e
Slide 18: Supplemental Revenue Information
Supplemental Revenue Information FISCAL YEAR ENDED DECEMBER 31, 2023 Revenue by Local Currency Revenue by Offering Type Other 21% Inspection, Non-Service Service, and 47% EUR Monitoring 13% 53% USD 66% Note: Excludes Corporate and Eliminations. APi GROUP | BUILDING GREAT LEADERS® 18 18
Slide 19: 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 20: 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 21: 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 22: 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 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) 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 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) 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 25: 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 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) Operating cash flows and purchases of property and equipment for the twelve months ended December 31, 2023 and 2022 are as reported. Amounts for the three months ended December 3
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: APi Group Q4 2023 Earnings Call
APi Q4 2023 GROUP Earnings Call