Abm Industries Incorporated · NYSE:ABM
Abm Industries — Q4 2019 Earnings Presentation
35 slides from Abm Industries's earnings presentation, 2019
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation FOURTH QUARTER 2019 1
Slide 2: Agenda
Agenda 1 Business Overview 2 Fourth Quarter and Full Year 2019 Review 3 Capital Structure 4 Fiscal 2020 Outlook 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. Actu
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: 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 5
Slide 6: Industries We Serve
Technical Solutions (8%) Industries We Education (13%) Serve As of Fiscal 2019 Business & Industry (50%) Technology & Manufacturing (14%) Aviation (15%) Results as of fiscal 2019. 6
Slide 7: Services We Perform
Services We Perform As of Fiscal 2019 7
Slide 8: 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 9: Unparalleled Clientele
AVIATION CLIENTELE BUSINESS & INDUSTRY EDUCATION TECHNOLOGY & MANUFACTURING UNPARALLELED TECHNICAL SOLUTIONS 9
Slide 10: History of M&A
History of M&A $3B Group: Lighting Mechanical Electrical 2010 | GBM SUPPORT SERVICES GROUP Janitorial (UK) 2014 2020 Vision e ABM. Building Value e ABM. Government Services Sold Government business + $6B |! 2007 © onesource Janitorial | 2012 © airserv Aviation SHHA SERVICES Healthcare |! 2015 e ABM.
Slide 11: In 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: Fourth Quarter 2019 Review
Fourth Quarter 2019 Review 12
Slide 13: Fourth Quarter 2019 Review
Fourth Quarter 2019 Review Q4 FY19 Revenue $1,648.8 $1,648.0 Organic Growth 0.6% 2018 2019 Organic growth defined as growth excluding acquisitions, divestitures and the impact of the adoption of ASC 606 and ASC 853. 13
Slide 14: Fourth Quarter 2019 Review
Fourth Quarter 2019 Review Q4 FY19 Income from Q4 FY19 Adj. Income from Continuing Operations Continuing Operations1 $44.7 $48.1 $38.8 $0.66 $0.71 per share $0.58 per share per share $8.9 $0.13 per share 2018 2019 2018 2019 ¹ Please refer to the appendix for a reconciliation of GAAP to non-GAAP meas
Slide 15: Fourth Quarter 2019 Review
Fourth Quarter 2019 Review Q4 FY19 Q4 FY19 1 Net Income Adj. EBITDA $93.0 $47.9 $89.9 $0.71 5.6% per share 5.5% margin margin $9.7 $0.15 per share 2018 2019 2018 2019 ¹ Please refer to the appendix for a reconciliation of GAAP to non-GAAP measures. 15
Slide 16: Fourth Quarter 2019 Segment Results
Fourth Quarter 2019 Segment Results Business & • Revenues of $806.9m vs. $822.3m last year Industry • Operating profit of $51.1m, operating margin of 6.3% • Revenues of $251.5m vs. $269.0m last year Aviation • Operating profit of $3.9m, operating margin of 1.5% Technology & • Revenues of $229.7m vs.
Slide 17: Full Year 2019 Review
Full Year 2019 Review FY19 Revenue $6,498.6 $6,442.2 Organic Growth 1.6% 2018 2019 Organic growth defined as growth excluding acquisitions, divestitures and the impact of the adoption of ASC 606 and ASC 853. 17
Slide 18: Full Year 2019 Review
Full Year 2019 Review FY19 Income from FY19 Adj. Income from Continuing Operations Continuing Operations1 $127.5 137.2 $125.3 $95.9 $1.91 per share $1.89 $2.05 $1.45 per share per share per share 2018 2019 2018 2019 ¹ Please refer to the appendix for a reconciliation of GAAP to non-GAAP measures. 18
Slide 19: Full Year 2019 Review
Full Year 2019 Review FY19 1 FY19 Adj. EBITDA Net Income $127.4 $339.5 $326.4 $97.8 $1.90 5.1% 5.2% per share margin margin $1.47 per share 2018 2019 2018 2019 ¹ Please refer to the appendix for a reconciliation of GAAP to non-GAAP measures. 19
Slide 20: Capital Structure
Capital Structure ABM. Building Value
Slide 21: Select Cash Flow and Balance Sheet Items
Select Cash Flow and Balance Sheet Items Leverage $1,600 4.50x * GCA $1,400 4.00x 3.50x $1,200 3.00x $1,000 Target of 2.5x to 3.0x ($ in millions) 2.50x $800 8 Solutions Westway 2.00x AirCo GBM $600 1.50x $400 1.00x $200 0.50x $0 0.00x Future State Total Indebtedness (Incl LC's) Leverage Target Leve
Slide 22: Select Cash Flow and Balance Sheet Items
Select Cash Flow and Balance Sheet Items Annual Dividend $50.0 $47.7 $46.0 25+ YEARS OF CONSECUTIVE $39.5 $40.0 ANNUAL DIVIDEND GROWTH $36.9 $36.0 $34.6 $32.9 $31.3 ($ in millions) $29.7 $30.0 $28.2 $26.7 $25.3 $23.8 $21.6 $20.7 $19.5 $20.0 $18.6 $17.7 $16.2 $14.5 $13.1 $10.0 1999 2000 2001 2002 200
Slide 23: Fiscal 2020 Guidance Outlook
Fiscal 2020 Guidance Outlook 23
Slide 24: Fiscal 2020 Outlook
Fiscal 2020 Outlook Metric Amount Income from continuing operations per diluted share1 $1.65 - $1.85 Adjusted Income from continuing operations per diluted share1 2 $1.90 - $2.10 Depreciation $50m - $55m Amortization $47m - $52m Interest Expense $45m - $50m Capital Expenditures $45m - $55m 3 Adjuste
Slide 25: Fiscal 2020 Outlook
Fiscal 2020 Outlook Segment FY20 Operating Margin % Business & Industry Mid-5% Aviation Mid-3% Education Mid-5% Technology & Manufacturing Low-8% Technical Solutions Mid-9% 25
Slide 26: Appendix
Appendix ABM. Building Value
Slide 27: Forward Looking Statements
Forward Looking Statements This press release 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 expectat
Slide 28: 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 fourth quarter and twelve months of
Slide 29: Impact of Adoption of Topic 606 and Topic 853
Impact of Adoption of Topic 606 and Topic 853 29
Slide 30: Healthcare Realignment - FY18 Historical
Healthcare Realignment - FY18 Historical As Reported As Adjusted Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended (in millions) January 31, 2018 April 30, 20
Slide 31: Healthcare Realignment – FY19 Historical
Healthcare Realignment – FY19 Historical 1 As Reported As Adjusted Three Months Ended Three Months Ended Six Months Ended Three Months Ended Three Months Ended Six Months Ended (in millions) January 31, 2019 April 30, 2019 April 30, 2019 January 31, 2019 April 30, 2019 April 30, 2019 Revenue: Busine
Slide 32: Unaudited Reconciliation of Non-GAAP Financial Measures
Unaudited Reconciliation of Non-GAAP Financial Measures (a) The Company adjusts 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 Company. (b
Slide 33: Unaudited Reconciliation of Non-GAAP Financial Measures
Unaudited Reconciliation of Non-GAAP Financial Measures (a) Consistent with the required disclosures under U.S. GAAP in the year of adoption of ASC 606 and ASC 853, we are providing information in each reporting period during the year of adoption on what revenue would have been under our historical
Slide 34: 2020 Guidance
2020 Guidance ABM. Year Ending October 31, 2020 Reconciliation of Estimated Income from Continuing Operations per Diluted Share to Estimated Adjusted Income from Continuing Operations per Diluted Share Low Estimate High Estimate Income from continuing operations per diluted share (a) 1.65 1.85 Adjus
Slide 35: Contact Us
Contact Us INVESTOR RELATIONS Susie A. Kim (212) 297-9721 susie.kim@abm.com 35