Slide 1: Q3 2024 Earnings Call
Q3 2024 Earnings Call October 31, 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: Profitability: APi's Significant Improvement as a Public Company
APi’s Significant Improvement as a Public Company 2021 Today(1) Improvement Net Revenues $3.9B $6.9B + $3.0B Revenue Consecutive Quarters of Double-Digit U.S. Inspection 6 17 + 11 Growth % Inspection, Service, ~40% ~54%(2) + 14% pts Monitoring % Adj. Gross Margin 24.0% 30.9% + 690 bps Profitability
Slide 7: Disciplined Customer and Project Selection Accretive to 13/60/80 Framework
Disciplined Customer and Project Selection Accretive to “13/60/80” Shareholder Value Creation Framework • Evolving away from lower margin, higher risk customers and projects in Specialty and HVAC • Structural improvement in gross profit margins and dollars over course of strategy • Significant free
Slide 8: Planned HVAC Realignment: New Safety Services
Planned HVAC Realignment: “New” Safety Services Realignment to drive efficiencies in the combined HVAC and Specialty businesses while creating more transparency in the newly defined Safety Services Segment. Rationale of Expected Realignment Focused on Outsized Growth in Services Revenues… Service Re
Slide 9: Planned HVAC Realignment: New Specialty Services
Planned HVAC Realignment: “New” Specialty Services Realignment to drive efficiencies in the combined HVAC and Specialty businesses while creating more transparency in the newly defined Safety Services Segment. Rationale of Expected Realignment Healthy Backlog Positions Business for 2025 Growth • Ali
Slide 10: Track Record of Bolt-on M&A at Attractive Multiples
Track Record of Bolt-on M&A at Attractive Multiples APi has a consistent track record of supplementing organic growth with bolt-on M&A activity. Our markets remain highly fragmented with a deep, growing pipeline of global opportunities. # of Bolt-on Acquisitions Per Year(1) 12 10 7 7 Go-public trans
Slide 11: Evolution to an Asset-Light, Services-Focused Business Model
Evolution to an Asset-Light, Services-Focused Business Model Inspection first strategy, disciplined customer and project selection, and M&A have accelerated APi’s evolution to an asset-light business focused on recurring, statutorily mandated service revenues. Inspection, Service, Monitoring Adj. EB
Slide 12: Third Quarter 2024 Performance Highlights
Third Quarter 2024 Performance Highlights Third quarter net revenues of $1.8 billion, an increase of 2.4% Adjusted gross margin expansion of 200 basis points in the third quarter Third quarter adjusted EBITDA of $245 million, representing adjusted EBITDA margin expansion of 80 basis points to a reco
Slide 13: Third Quarter 2024 Financial Results Overview
Third Quarter 2024 Financial Results Overview THREE MONTHS ENDED SEPTEMBER 30, 2024 NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA Total: $1.8 billion(1) Total: $566 million Total: $245 million(1) 27% 17% 24% 73% 83% 76% Safety Services Specialty Services Notes: Refer to Appendix for a reconcili
Slide 14: Key Financial and Operating Metrics
Key Financial and Operating Metrics THREE MONTHS ENDED SEPTEMBER 30, ($ in millions, except per share figures) 2024 2023 YoY Change Net Revenues $1,826 $ 1,784 2.4% Organic Net Revenue Growth (1) (0.2)% Adjusted Gross Profit $ 566 $ 518 + 9.3% Adjusted Gross Margin 31.0% 29.0% + 200 bps Adjusted EBI
Slide 15: Key Segment Financial and Operating Metrics
Key Segment Financial and Operating Metrics THREE MONTHS ENDED SEPTEMBER 30, Safety Services Specialty Services YoY YoY ($ in millions) 2024 2023 2024 2023 Change Change Net Revenues $ 1,335 $ 1,217 + 9.7% $ 493 $ 569 (13.4)% Organic Net Revenue Growth (1) + 3.1% (7.7)% Adjusted Gross Profit $ 467 $
Slide 16: Updated 2024 Guidance as of October 31, 2024
Updated 2024 Guidance as of October 31, 2024 NET REVENUES ADJUSTED EBITDA Approximately $890 - $900 million $7,000 million APi GROUP | BUILDING GREAT LEADERS® 16
Slide 17: Q4 and Full Year 2024 Guidance
Q4 and Full Year 2024 Guidance Q4 2024 FY 2024 Net Revenues ~$1,845 million ~$7,000 million Reported Net Revenues versus Last Year ~5% ~1% Net Revenue Organic Growth Flat ~(1)% Adjusted EBITDA $240 to $250 million $890 to $900 million Adjusted EBITDA versus Last Year 15% - 20% 14% - 15% Adjusted EBI
Slide 18: Capitalization
Capitalization As of the end of the third quarter, our net leverage ratio was approximately 2.4x calculated pursuant to terms of existing debt agreements Executed 10 bolt-on acquisitions through October 2024 Weighted average debt maturity of 4.4 years as of September 30, 2024 Finished third quarter
Slide 19: Appendix
GROUP Appendix
Slide 20: What We Do
What We Do SAFETY SERVICES Life Safety & Security “So ook om rreventers Sie @ pa BER © cacrersey use 4B © veren esse soppresin syoteme G © rreerioguicter Wr © meccwcemyemernere WO @ same vetection unit BO soecisnezatsctean agen systems ZH © secwritycamerasicor B® scesscontateintosionoetection system
Slide 21: 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 22: 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 expenses associated with restr
Slide 23: 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 24: 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 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) 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 26: 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® 26
Slide 27: 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. b) Adjustment to reflect the elimination of expenses associa
Slide 28: 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 29: 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 30: 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 31: 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® 31
Slide 32: Q3 2024 Earnings Call
APi Q3 2024 GROUP Earnings Call