APG - Earnings call transcript Q4 2024

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Operator

Good morning, ladies and gentlemen, and welcome to APi Group Fourth Quarter and Full Year 2024 Financial Results Conference Call. [Operator Instructions] Please note this call is being recorded. [Operator Instructions] I will now turn the call over to Adam Fee, Vice President of Investor Relations at APi Group. Please go ahead.

Adam Fee

Thank you. thank call. joining and XXXX fourth everyone, conference earnings morning, you our for quarter Good

on call Chief me our CEO; sir Joining the Franklin Board David President Becker, Martin Jakala, and of our co-chairs. our Jim Interim and Financial and today Officer; Lillie, are Russ

projections facts. matters that expectations, materially statements that release the and we on are announcement statements from and regarding Before implied by those that you could statements. a this not I intentions which and factors to the anticipated in call other trends like would historical statements begin, guarantee forward-looking performance are and of expressed on known or based are company's and cause and subject forward-looking remind are These performance, future such actual differ or not future to certain to earnings company's uncertainties press risks unknown are events results other

In may SEC our our press release material differ our expectations. results cause risks from the to detail we future and filings with that

no as required Our undertake and by we except forward-looking to may update February any law. XX, are of statements as today, we statements obligation make

on presentation of we a posted As financial Relations our our Investor a have quarter fourth performance website. reminder, the page detailing

presentation. Our operating be can found measures financial metrics. will other comments key regarding today release these items in our also and A and and other include non-GAAP press information reconciliation of our

investor update later posting on Additionally, website today. page an we'll our Investor be presentation the Relations of

call to to the turn It's pleasure over now my Russ.

Russell Becker

#X the health of morning. to and to morning, We you APi. our XX,XXX dedication our join this leaders value. call teammates each the hard The Good taking of Thank time Adam. you, safety, is our well-being everyone. work Thank remain of and grateful for their our for

I'd recovering involved to the to note, week and Minnesota. supported . side individuals who return are returned very meets APi our plane safely have are to team Minneapolis in thank crash like Toronto a teammates that X well. that these we thankful their our were last on As

was once EBITDA, XXXX a and recognized veterans revenues, environment. to as adjusted I'm share with proud and earnings spouses solid employer careers build providing APi macro that XXXX. APi has adjusted record remain flow also for again evolving committed leaders. to opportunities develop for net and We been year their record as in for record another record free cash adjusted an per military-friendly

call, strongest in creation a on the As shareholder highlighted generation X. I it executing which the value is and shown team's our cash last ever APi framework, being been has mentioned standpoint, resulted flow on has Slide X, on XX/XX/XX profitability from the work Slide revenue,

our our specifically, delivered against financial targets. each XX/XX/XX leaders XXXX, progress In of

a or adjusted putting to in XX% adjusted XXX adjusted First, EBITDA points us basis to -- EBITDA our XX.X%, target margin more surpass EBITDA margins margins expanded position for XXXX.

in the to we service cash And inspection to increased in in XX% revenues of XXXX XXXX long-term XX%. and monitoring we improved mix Second, last, way our to flow conversion XX% XX% in our of XX% XXXX. and free on adjusted from target from XXXX

by specialty in an full billion. $X HVAC and delays organic year and a projects at by in in acquisitions, and This grew focus revenues growth highlight offset driven the finishing will strong results. and service I revenues Life in XXXX, Now purposeful year project revenues selection inspection, pricing on our XXXX in X.X% record monitoring and disciplined Safety organic partially certain a in businesses. customer our driven decline improvements, was by Net project higher-than-expected customer and by divestitures growth

our row U.S. and for as fourth quarter, goal quarter the growth towards revenues of representing XXth in of in the Life year XX% inspection a total service our inspection, progress net the double-digit from revenues coming in Safety Importantly, and monitoring. in business we we our make achieved

strong performance gross of year to adjusted our led continue initiatives, gross improvements in XX.X%, we to points. expansion adjusted The XXX strong in strategic margin margin XXXX with up margin representing EBITDA for line full of basis In see margin XXX the basis points. year,

including selective value as we could customer always and capture, like systems largely expect monitoring I several selection, to to service in just accretive see scale pricing for and Chubb and XXXX margin We expansion continued always initiatives and executing the by be improvements, we've disciplined project and mix, procurement, revenue past business beyond, same the driven been and inspection years, M&A improved say, pruning, better.

value EBITDA. the exit Chubb free -- XXXX free international conversion rest the of track flow XXXX and our on more savings strong flow have early record adjusted cash million another was the $XXX with remain we adjusted of of in realized $XXX realize Regarding XXXX. $XX cash million, capture Chubb to representing XXXX, XX% year of regarding approximately target, and we of and business, than and we million as

such the at The record of or pursue as Our repay M&A opportunistic our on XXXX, strong leverage continuing delivered December capital to our to balance of X.Xx, ending target sheet repurchases. cash value-enhancing generation free year for deployment helped X.Xx. to and million loan of our commitment allows of us our on XX, under disciplined term our of flow net strength flexibility share alternatives, $XXX track reducing

through As XXXX, authorization building $XXX organic on bolt-on approximately a integrating at have spend reminder, approximately accretive to long attractive share our remaining $XXX our on on and we repurchase of track accelerated million, supplementing M&A In we growth program. multiples. M&A of record our businesses million

adjacent first of billion-plus the elevated. services with $XX the during and escalator market and addition, the acquisition we year, of complementary half elevator entered In the

elevator statutorily the viewed business, highly long adjacency fragmented attractive the as of the an to We by escalator demand. service have and recurring nondiscretionary driven driven nature market due

long-term cross-sell build safety a long opportunity a M&A We growth, a term with escalator life and and services robust through over our strong expect elevator of existing platform combination pipeline. billion-plus organic to a $X businesses, the

excited opportunities are protection, pipeline escalator security of M&A across fire we electronic ahead, services. about and see the and elevator we Looking

both attractive a fit perspective, a work, opportunities, Our most the team perspective. and quality remains from from hard values importantly, culture, at most business prioritizing but

In summary, results team of I financial and the record in achieved our proud am XXXX.

our right monitoring great in up by inspection customers right projects XXXX, to Specialty in improvements, we our margins the high on in backlog, digits for single As a and rates digits I markets. with the ability flow, and in of in accelerating right organically to begin grow revenues, continue confidence have double organic focus return and up driven cash total strong expand pricing traditional to importantly, growth continued organic but growth, end in growth the the service following: free Services,

including loss-making X work after having project international XXXX long-term and over time the our it less the working at international past Positive X progress than through finally, the of business business profitable grateful delays position branches mentioned in with impact the for to specialty of I'm the their relationship disciplined quarter customer exited years annualizing over begins first And the of great our XXXX project customer acquisition. our selection, transforming XX services. teammates for for growth. for

the services segments realigned from began change provide our This we to the to and safety increased focus to with will segment in the shared team enhance aligned XXXX, our services specialty to newly its position HVAC best operating -- leadership receive business allowed opportunities HVAC business services. with from it capability specialty in In putting in customers. newly moving win our the

now of up more Safety a pure-play Additionally, also business change Services and segment elevator safety also sets as security fire services. sets change and the the us focused escalator on -- electronic the life protection,

the in detail. I would like financial David over now our call quarter to to to fourth and David? results hand guidance more discuss

David Jackola

to partially our months ended increase X cost by and value improvements offset driven disciplined due EBITDA by XXX from coming Russ, XX, XX, Services driven and revenues point the prior margin, partially fixed initiatives margin in XXXX, X in XXXX, planned to project XXXX, in X.X%. for XX.X%, organic factors Reported months pricing for customer compared XX, Safety and by the everyone. segment. international at Specialty billion representing Services XXX total the you, an benefits driven M&A. business. compared in a X.X% and Adjusted company basis year increased basis for lower adjusted X.X% representing net to prior gross to a in December morning, to This decline $X.XX by organic the $X.XX of on the the by prior XX.X% margin billion grew gross impacting and year good . to X improvement offset Specialty Services in months growth Thank revenues December increased EBITDA X.X% capture absorption the Adjusted XX%, the basis, by ended year, compared December was a selection, point organic with primarily by increased ended

that the offset to expense prior average per growth increased strong adjusted earnings I increase share $X.XX, was adjusted or was year am compared also shares diluted pleased to by The primarily for XX% EBITDA by fourth weighted period. a was and the outstanding. representing a $X.XX driven increase and quarter partially report adjusted interest diluted

Services capture digits inspection planned in the Life double-digit representing prior pricing more gross XX.X%, the period, $X.XX and monitoring inspection improved the ended reported in selection, in and XX% months to Services. increased mix and segment. Safety Project revenues the value grew project service XXXX, and inspection, our Safety billion low compared business Safety months Adjusted growth XX driven ended for basis December customer of monitoring our across the results X and period. by compared XX, international our the growth by margin year to initiatives in XXXX, detail in revenues. quarter. higher-margin billion year point Organic prior revenues in business December XX, was discuss was now organic disciplined $X.XX for a X.X% driven improvement U.S. service growth business will revenues X% for I by to improvements X revenue single

forward, by segment aligns XX of ended adjusted historical primarily year earnings December segment. adjusted each earnings factors months basis will point be to a our representing margin was to XX%, XX.X% the gross for increased the segment the Segment period, EBITDA XXXX, for by Going compared X prior we which due impacting segment, margin. to and XX, reporting reporting increase earnings

segment. revenues X prior the mentioned XXXX, for well months ended Specialty project compared and was XX million our decline impact the stranded and discuss year driven detail XXXX, I to representing driven X by the in planned $XXX $XXX margin for reported divestitures disciplined the ended cost relationship costs period. point as delays by more in Specialty Services the impact by the This the prior selection. customer service Now decrease will December months Services compared XX, partially we driven the project to XX.X% first in decreased to an as by exited December in for XX.X%, from XX, by and and that of year customer first our gross revenues million results absorption favorable Adjusted quarter. was primarily fixed offset from delays, a lower basis

decreased the decrease margin in by earnings Segment to basis prior segment earnings cost representing the a quarter, fixed primarily X.X%, the margin adjusted was decrease gross compared lower XX% to year XXX period, and for absorption. point and due

Turning to flow. cash

different. due throughout As was our is flow for generation no XXXX fourth we've seasonality the quarter and to free strongest year, highlighted the cash quarter

For XXXX, free free cash million, the XX, adjusted X reflecting flow cash XXX%. an months was adjusted $XXX conversion flow ended of December

of was flow XX% approximately cash improvement free $XXX to million, adjusted year, XX% XXXX. conversion representing compared million with or a full when the $XXX For

margin cash has to cash target able were flow conversion for below of a to X.Xx the continues the ratio we XX% our X.Xx end year. flow as meet our are our At and accretive long-term M&A. across been leverage the approximately priority even that pleased target Free continue increased net generation bolt-on we well free be leverage net adjusted year, we of and was APi, of

capital expect significant we to look forward cash deployment. flow a for opportunity we As us value-enhancing continue to free to XXXX, providing grow our

and in leaders weaknesses central for script to our that internal as us are happy remediated great go there. of of branches, and was am to that companies effective that to concluded have the off XXXX. second prior get express year all XX, just we gratitude in have announce our successfully Finally, grateful. maybe job control I'll a I our a my to all team did reporting over And financial material we our December

in growth to of exchange guidance. organic a year $X.X Based we XXXX our service comparables. the organic growth by impacted driven on rates, Services of $X.X organic segment, Turning rates and traditional is Services, net expect reported full revenues, inspection our by quarter, current first challenging a return return monitoring to Specialty Safety in in net billion high revenues billion, and mid-single-digit foreign which following to single-digit revenues in representing growth to weather-related

adjusted year versus of EBITDA of billion fixed adjusted basis currency XXXX. million approximately XX.X% to full XX% adjusted to expect which XX% the XX $XXX $X.XX and represents is at EBITDA We points midpoint, a which margin basis EBITDA of on up growth

In terms of to progress make in free XXXX, flow we expect continue to growth. cash

adjusted With cash of the organic while growth. free conversion XXXX returning approximately flow target to XX%, revenue

billion the single-digit expect the growth a and represents net terms midpoint. X% to In of decline reported $X.XXX $X.XXX first billion, guidance to we reported revenues this quarter, of low revenue revenue net at of organic X%

a adjusted EBITDA points margin on of fixed basis first of XX.X% quarter year. of last expect versus the X% EBITDA midpoint, adjusted adjusted XX% up $XXX $XXX XX at currency represents We million and which basis to growth approximately to million, EBITDA

For million, rate be XXXX, to $XXX CapEx be be approximately to approximately be million, to effective $XX expense depreciation anticipate XX%. adjusted we interest million; approximately $XXX cash and tax to our approximately

expect $XX per and timing million million We be year. variability between some the $XX with throughout to expenses corporate quarter

diluted the our be average adjusted to count approximately for million We share weighted expect $XXX year.

I call turn Russ. over now back will to the

Russell Becker

Nice Thanks, job. David.

strong accelerating of demand we execution results XXXX and business the of the our teammates. begin is services demonstrate in offer strength positive once our We strategy ongoing by revenue focused with solid again across record We relentlessly the platform. services remain our model the a revenue. Our momentum for XXXX our growing while recurring and continuing focused in with on backlog and XXXX, provides organic inspection, in to rates traditional returning . the monitoring growth That service combined for expand growth global our the foundation margins. to of

value on of XX/XX/XX by creating shareholder focus with on the or generating our targets EBITDA remain adjusted We focused more year. sustainable on near-term margins XX% delivering this

on targets and we New we to May where an meaningfully hosting be professional Day York strategic Investor reminder, As new financial will plan. detailing investors be a for long-term XX in will updates higher our

would With call call up operator open turn the for that, back Q&A. to now I the the and like over to

Operator

RBC comes first from the with Markets. [Operator Instructions] question of line Your Ashish Sabadra Capital

David Paige Papadogonas

on Congrats good This is here. results the David for Ashish. on

drive XX% EBITDA on going forward? that Just margin if of double-click could curious you expansion some to XX%, the variables key plus will

Russell Becker

would it's leaders to customer as value same And thank I continue with you people deploy drop. with for that really sites. going share for And thank people you disciplined and customer it's we services levers sure like that that joining -- their us, different we selection. And project the provide we're to the with that that I to your the pounding question. say selection making start we pull are and working we're and field . the and to really would that

monitoring. as mix say, service the comes and I that we improve revenue improved inspection continue our from is of percentage would Next, to

in way to us we to about the opportunity going We say focused getting that XXXX be XX% Chubb us usual. Chubb We're think feel you XXXX XX% we're capture grown continues target as in innings tremendous about to I like is I Price point us like for to prepared procurement our XX%. there. business If of. and it's value be of from stop on in net capture. still to total revenues that to the we're would where of talking opportunity say also it talking early there's value have on. our in would another that remember for lever a remarks, for our stay we

good to report and is of are is are we scale And saw we an more of But we our a and XX% continue from our the we $XXX would services that just EBITDA a branches of yesterday the call our progress we've and like got of branches well portfolio $XX there's we've That bring continue that playbook another continue the -- I what and kind branches And other perspective, to utilizing of make there. branch the branches mid-single got towards be to company. transformation, really say, is business, I working million we target, north I process tell business pull to be M&A which into showed to that to those basically would people, what better. always the which strategic our across we million digit, need we're and -- kind like shared know there. lever. means performance opportunity margin forward, along and have lever just and

we're going going pull is the So same. drum the the to we're in -- to but that beat be going to levers

Operator

comes Thompson question line the Research Group. next with from Thompson of Your Kathryn

Kathryn Thompson

And year since force public through cyclical look something to to have revenues on and a the a early you and of in going very that for nice public. as manage job downturns. the in back achievements particular various company how recurring step at traces the is terms on Want focused on

at of look in manage up set today managing resegmentation some fluctuations. where terms business about you your are of your forward, light going And the these concern economic model slowdown? about we in As to how we business is think how

Russell Becker

We every perspective service whole our that of sense fluctuations evolution like work even year, see of tariffs. inspection Thanks, that in actually. potential and look Kathryn. of starts if economy. to idea that's the to at I resilience of comes really we continue us which our that to you and And the resiliency of it any immune And associated that increases price you're always to feel our a includes with your you appreciate calls service and be XX% questions, where bring sort of real model. inspection cost for Mean opportunity I into total in, monitoring becomes the component build in to the the provides -- the driving it the greater business, net And with going to time. revenues. more

So we're able very quickly on to very, to pass our clients. those increased costs

And so of for significant us. opportunities that's more the one

monitoring be us inspection feel decks, or one on Adam's typical inspection we We focused -- in and allows the that opportunity really like branch your the the of work build you on one to the more see project have it on improve branch a and we project work you selective to more of be gives and impose as the because margins being the and can project helps you mindset things monitoring that slide mix And that also is service improves inspection do. gross first that in a do, revenue service we selective resiliency. that

much -- we our at And the we go variable, way manage at exercise look worked XX%, really basically where back good XXXX, business we've like have I muscle our is a I today you about needed, we're positive like The XX% very in place. any that very sort amount our So of And look business in flex to feel of versus if quickly. ability time. last model when would a got to I opportunity that results economy in unknown which and think the if a us our as I tremendous XXXX, result you say cost showed COVID landed, was in that our fluctuations very, XX% thing saw an our really through and progress. is means XXXX

I addressed hope I question adequately. your So

Kathryn Thompson

or localized managing understand, commentary just tactically projects picture, Yes. more more Very financing? about project that of be to it this Is it is market, issue. something or small related the delays. more throughout weather, about the X kind is permitting, And And large just more really year? more more project much to a we'll trying follow-up Or onetime bigger appreciate that.

Russell Becker

Yes, Kathryn.

delays everything would us. So cited say else last what the is I project are that that we year and behind mostly

more their that year, and a also into government we have that have continues degree. are a would herky-jerky. built plan, was would understanding last you say, of that be would We I tell it But our I clients -- to we get in we is way to kind I what smarter were than certain think own that

how lesson degree plan a resources, forecasting make I for we just job resources work deploying think our our a so and than learned of certain work that that deploying anything. how to can So budgeting to and probably that the to do we lay and that we and more a about sure out how we're better we're

normal say year, And into QX we year, has was relates our, move this of recall, dealing and was guess, weather year QX would year, positive dealt with quietest year if that with normal the true this of I consider always proven is we speak, you to it and an because seasonality I been it weather. extremely that's than we're year more, would so Last to as conditions quarter as more year. to I in what last be in just that. as weather this

Operator

line of Blair. William Your next question Mulrooney . comes the with from

Timothy Mulrooney

Yes. with year, I you bit. us lot little headwind out those for stand last just late that want And in of million a we those. questions there on get $XXX to build think Can on Kathryn's delays of where set level that publicly XXXX. called X we experiencing question you're just were a project I respect you a to

specialty you move there are here there those there fourth, seeing any projects unexpected other XXXX? those a where are So on is in And then large I'm there fit? curious early a specific on out forward? have Is delays

Russell Becker

No.

X of built and One it is plan and is the entity plan. work speak. doing our into guess, X, X, So that of as done. I we've into that would this we I mentioned, We're government is I the already. say the the this But built

issue right-of-way into is running issue guess, there that forward. like then lines a became natural And And off the so gas [indiscernible] and was third permitting I as things was, and and started a proceeding that.

the have but winter And work the people on with would site. the is seasonality things progressing. say slowed associated down, that I so And job down, has it but we work that slowed

plan. our to gets ramp just or safety the do like appropriately I always into last but X there's project that all I work our don't of to there's changes had factored up been behind expansions X one talk semiconductor as And that And side And like that winter what of And season a went delayed happen your that's and customer us, as in the through happening we we year much. -- all is the business, stuff American expect know time. kind the well. there's delays on large as things that North that on project business happen. some their of We about -- always

So is there anything we feel move as like what we this experienced XXXX. last No. more year year? prepared into we're that we're We anticipating like

right So is #X. sit as here I there now, no

Timothy Mulrooney

Okay. And really helps helpful. That's really side. that the I to think put conversation

project. that much that broadband of How project. projects Just that you of business much on by like specialty overall federal I did rural this else we how is that driven I questions mention your funds even guess little federal funded is on. more, a your something building are business? federal partially one get curious, I'm guess bit by

you if could on any in given exposure curious lines. going everything Just there's investors that notable highlight on government risk that's

Russell Becker

Yes. -- with I to -- give I and figures. I I have don't some would you Adam more material mean, total in revenue. us, not as have to circle guessing. back you be relates it's it mean, try just I'd to specific our

could would the getting amount your federal funding a government is speak, government way. us. you directed there. impact when work that, But tide boats. I years trickle-down question [indiscernible] a flow at that all is date wouldn't probably about way tremendous have some its X or overarching and that and to continue have which people that's, cut, said, ago when bill own of of effect going bunch want to do had a don't that direct that whatever so in the backlogs stuff back of more to I dose here, mean, effect everything get on signed you of work about if a riding cut. towards act gets now, whatever whether some And some come and all We That else. to a would was not have later industry, on impact a and we to negative the like much had if their even through expect I sit that, the some as infrastructure whether the the I uncertainty, think, more call originally then As but

about I that think I'm more for to and in obviously we ourselves the sitting in So inflation, tariffs have we're the here -- closely that today, super are chair, our from we effect making of products proposals what cost the watching is potential not increases protecting concerned my We sure it. tariffs that our provide could on customers.

that The we most is that small tariffs. Trump notable something President be actually likes new pipe this continue will anticipated he commodity knew that that use we taking pipe the we over, to seen the a over prices, we've steel But and saw is steel prices. to when watch in administration increase election and we

protecting was making something And surprise didn't of a matter so that just we're it sure we coming. see like and it's It's ourselves. like a was not not it that

Operator

Your the Josh line of UBS. next with Chan question from comes

Joshua Chan

question David. guidance. Maybe quick X on

is X% QX impact year? in the by does mention sustainable guess kind of weather. mean in did has it specialty? on safety that you could impacted roughly QX type a had to talk disproportionate just for is growth you I that of You whether And organic the

David Jackola

the QX. question. I QX get like is as and say for what in to Thanks as it look and about the largely the the the was QX, we'll And in traditional a start into XXXX is weather QX of seeing growth. will lot But impact more we QX, in same going is QX Thanks, QX to guess on XXXX. guidance Yes. I'd Josh. business our formula and return rates safety all be specialty the and growth fourth of quarter

Joshua Chan

branches. And Great. question hear. for on your to That's great a Russ then

have do that the certain differentiate is you say what in low bucket? others XX% the are profitability kind branch obviously, mentioned, high and key that factors you versus So branches margins that plus of whether a

Russell Becker

work it need all those those have we to is second have making sure with we that playbook leading say that a disciplined effort. And that that inside it's departments, a that that. that's quality going softball. good recipe and inspection then where mindset And branches adopting of -- branch then get customer the for mindset and $X a to leading say component have really that leaders adopting service I that's and the to we're in it lot and really energy leaders the takes and starts developing because to would branches, alongside that's selection inspection And one, And bringing know leader, to to you're $X And project that, inspection this start branches. going something perspective. our And sure of XXX% starts. it's we're Thanks people I multiple number those and branch pull-through But we be going to of second would to going following that that first that the we of come making putting with leader to work. from and . I departments. to start really on sales good selling branch inspection think would first be need

Operator

Moore Stephanie Jefferies. Your from line with of next question comes the

Unknown Analyst

Moore. This is for [indiscernible] on Stephanie

the pretty M&A guess leverage this think elevator bit any spaces on on year, space? last -- in about do you guess, there. how looking wanted seeing it as leave comments willingness any platform around I another for expectations you I So if are I'll just it the X do to there? talk is or M&A, is And front, guys are the what you space check. about I deal large more And to the M&A see to do safety you a competitive

Russell Becker

so much. you Thank Yes.

there. to of there's cover so really a ground And lot

shared we that of tenet M&A playbook, will. been million has a multiples. our spent bolt-on So at That $XXX really we key mid-single-digit M&A you if on roughly

and plan is execute Our similarly year. to goal our of this kind

So to bolt-on through of plan M&A we hopefully year. another on course the $XXX spend million this

feel an peek our there business a space escalator I'm priorities a to with profitable space, take if business. it. wouldn't say make that security highly found would say we in from in to that going and -- the -- really international continue those the something mean be to fire, priorities we life HVAC that primarily at say, I the that, space. perspective, or international wouldn't our going That and we would be But in buckets. our service are safety that like elevator the we progress like doesn't we

And reluctance to the M&A some is aperture so are opening bolt-on didn't we're know necessarily internationally. we in word, were feel and we don't little the opportunities if our bit, a up Where we've looking we business. I international ready be just been, but like at doing right

we at but opportunities right looking great And We've would that done to one think some as we internationally be are opportunities. really speak, now we date. bolt-on

things So internationally we're going I spend to year. there. this get suspect that And of some couple accomplished a we'll time

relates is do our to As been sharing it publicly one that and goal the and elevator I've really space, is what do it to escalator first well.

to team needs And leader integrate she basically what company we a helps that led integration here bolt-on the I you that and when it. mean she's an to very a able by bolt-on, going a M&A, receive business. coach that be and facilitator is a -- and will, and we do the And of more back quarter but by -- if strong that's to have

to able with bolt-on since and has business we integrate done the So acquisition. And to haven't receive it. it really be elevated M&A any the

we another do do the the worst around And would right that. be with could one, the see and well, they bolt-ons think So company to that need gate. And out does if overwhelm how one. turn and we'll we'll then with I of do thing we them do

to to our there's we approach that footprint remains continue to I comment through guess maybe going our of geographic to remains we of bolt-on say I United business the would our specifically across see robust, fragmented, we're take and bolt-on that lot and for breadth us the then approach make we being smart pipeline complement and us lot and sure M&A. that. States. is about The for highly and that, in really opportunity the a to a last we're of how do And So market continue M&A opportunity measured a think

From continue number a the in work to on do opportunities of transformational different a space. M&A perspective, we

put make not to with like just escalator that. that we've think Do need into elevator really that very, right got and where another opportunity. did and sure very the to I disciplined, there's under we're I a the are the escalator about going We position in we so we're we and space, mean, elevator like feel we sure leg stool, the space.

So $X for We've platform us. I today work billion a us for feel again that to said that's like there's we it just of a do. think lot

lot is to that to and to a this execute have we to that demonstrate do others on. think work of I we can yourself something And

on specifically if along, stay and stay we'll the we're -- valuation the now, that in larger I some but be to that focused. opportunity the focus and our high. wouldn't some what you're feel the for do sit And as today. to needs I going much so the and And we're say of dig corner. a are would that's we're think right trading for have. here, the to opinion, that we'll the of verticals sure space, our seeing right these sure. the us. And comes that ourselves businesses shareholders. bit we too multiples the make little in interest bigger out and operating right a safety want disciplined And Are us, in focus is like there But will on by right life of for in we it And don't are we'll the are work there putting -- be that we that at things doing and companies, because in -- be fire we to

Unknown Analyst

guidance. I on about the I the there know revenue you guess would of the see Could to you the Great. end to I just And talked guess, of drivers need some FX. guidance, high talk that about achieve you

could continue high guess digit FX would end on today, have that currency any be the like just the I So that pricing get you year, just helpful. drivers expectations. expecting guidance if a would Are we guess, mid-single running in just, to impact, the of I you based you to

David Jackola

on Thank talked revenue past, in revenue, the is gets to of we've you based what Yes. that our mid- the I the the upper really guess flywheel that guide. question. is service year say guide that that which revenue our in midpoint about is and project largely on single-digit growth, low I'd you growth to mid-single-digit for for

how the So towards probably more that when obviously, story. you over guide the think or about foundation get it's what progress the are of continued say to the project side. could factors book gets that But looking top if and it's I'd our to more acceleration end that's digit service on our quickly and mid-single low you that growth the and

Russell Becker

going most people be sure need i.e., play is who need and strategic leaders they who add is which is for branch to would I their the customers to, to a the remarks deploy to things obviously branch David's are even direct their be the our -- we with of that areas us. of in also in the thing only end choose And end that markets play branch some play end much resilient markets And macros make of much in. play about the stronger and price you certain to price we going we're to where taking diligent the the about are are that choose there. there out leaders that to The to when one are they markets factor relation in. that -- about more that importance our remarks the a to our will leaders and my One And think can of we that

be And expand expense thing, to we open the to and believe of we the we rate kind we're and to do And well, going we're to can simultaneously. you and and in on need it. it, of margins this, margin. at grow would that And -- then touched and that to can we we our wanted could spigot last to -- but if do our David you investors we that show that mid-single-digit demonstrate going but that still organic

Operator

line question next the comes Wittman of Your Andy Baird. with from

Andrew J. Wittmann

this mean I Russ, So I'm times. ask question you've asked about several been to

interested that to that see you're not in strategic for pure-play high the life safety multiples for So the I than mean the that. even noted wanted maybe reportedly your in you multiples for are little shareholders? outlook teens your business? are on or just these companies paying better I a at And trading fire

some how having these of particular, of these business that So some with trades business, the and the looking benefit the change your just composition trades you're happening at of marketplace, happened. with the in does of the specialty in strategically

Russell Becker

to Thanks, when you. Andy. I was to wondering get going we're

at remarks. we one specialty. Like business, North our all And continue hope a have we well. I just I'm my if look mean, think closed our not of at actually we it last year. aspects alluded it's branch I -- really you, and you're So to that I we in business, continue thinking not in to that's telling I American performing, safety we I'm of look

EBITDA we business, And correlation long-term that. to additive and margin expansion it's look and . ultimately there's know expectations to a will have we at, And aspect every trade that margin going we and so be between we direct goals. and understand our shares our that of at our valuations

we evaluate continue there. to approach taking. it the But tack decisions sure going we long-term sits that margin And our So our our sit across today business, continue pruning that term. for shareholders we that we're to and making that we're will today, fit options long If make here have businesses now, have taking to the our all some and we to approach including we right goals, that we the we're specialty. we don't that's for and are that's best as expansion selective do know business work have that the do as

Andrew J. Wittmann

Great.

be so know forward. this drove if don't what going high. is in a given of so it's The costs continuation to quarter, that I significant in quarter this fourth in I that number wondering relatively of going the for level budget was And the there's here transformation XXXX,

David Jackola

Andy. the question, Yes. handle Thanks for one. this I'll

to that the look over expect to of capture Chubb at we and mentioned, in performance -- So consideration and believe will out XXXX program. clear be our in and can restructuring going a you because into underlying bad some come we largely quarter. an costs, versus a out to That the carry adjustments, program. that continue pension value in that We we're Those years. be year, we us were up That to what got as investors related to contingent as costs so largely good the the end VPT you costs guy did our some quarter doing then we've of quarter. the when the close years, business. benefit. Those that are our XXXX in in got gives of had a increase nonservice in fourth adjust rest and guidance And view we've can

Chubb our include also Now we costs that. a the elevated It's include for things where the cost for business, costs build-out cyber transaction. steps integration final of and SOX bucket the our that's where like we deployment,

rollout. we so we very now largely inning XXXX, deployment SOX last is our behind we the into the And work go in -- expect us. cyber as of We're

global integration platform. our is and global a what costs, scale type to expect in our could look deal opportunities you costs towards platform we system capture as benefits from to we guess I so investment And larger IT do see any should XXXX or our

Operator

from question comes Jon CJS with next Our Tanwanteng Securities. line of the

Jonathan Tanwanteng

last see you I'm exposure your funding in year. some as have and the that have Trump well project in customer that out. on CHIPS Obviously, what's that the and semiconductors general... in risk going for customers kind of we one with pushed Act know the large issues mentioned might just wondering has profitability had the semiconductor what you administration. difficulties may terms Just with management you And if of any of in there kind or of

Russell Becker

I think with I want or of be when They to make just to that, leadership. made mean, not to in for going the they nothing it. I'm money. like trying be is me -- changes respectful what just moving smooth changes take mean regardless to or that's things put our they but -- client. best -- some behind out. moving can't they funding is had it say. of the the And -- happens it's I forward. this I say do would It of and CHIPS everything there project. to make Act. the the these some made And in them say -- mean do They some to everything to you and with way when going forward. to changes And had leadership I with probably I to do And slippage made just had nothing this what mean, I It Well, is and that's done, committed all projects, all they're to time that money. major

mean our want we're So to fire one even I'm $X the fire peers the of million. $XXX business about about these our for concerned safety, semiconductor on is side or versus it. think not compare It's worried of data of about things us, I is it. not project-related positive that's I of I'm large Like about facilities, a larger, that -- not advanced is whether centers like the million. that on it's million, facilities or or us folks some life $X contract some positive so manufacturing these some like -- to.

HVAC million, You I we're a say, delayed, cause going that's $XXX gets MEP material. so fire, it's doing hole work. it's know whoever the $X gets for delayed, that if what that I contract to mean that mean, if something us, doing And in is million.

a -- kind one that the And kind don't mean we're the just just to industry. fact it's of hot than end to center for and that's our we easier the our And and And building the our we're that do I to want approach keep I train we doing -- do we is, the clients And it. of of project is advantage service that's we're of work. reasons and it project as we're data want want business so is take as the of that past we And model. we're the moving that's some compared and I building still inspection we the that service to market everything monitoring. our more want where And I it. the the our work of material. at much down to love want really But that inspection us how the not in building peers I day, mean, for mean, to doing in make violent the difference sure tracks. monitoring move way

we've have. So firms I like that risk other don't level same of feel got as, say, would

Jonathan Tanwanteng

Got for helpful, question is then a Russ. it. David. That very And

lines allocation expectation this expect $XXX how million flow and say expense year, flat. cash interest with wondering for I think other I would free be heard things. your which capital that I be acquisitions you and you to was up

David Jackola

in guide Yes. the into say going that. hear interest we'll free cash rate give for of I'd improve adjusted XX% XXXX our increase the question, cash grow be John. and in XX% Yes, the the to capital XX%, XXXX, our we our net conversion flow adjusted order is did That about we'll for which guide is $XXX capital invested still about fund expect year-over-year free to feeds flow guess you to year what right, million. working business. more guidance free adjusted to our than organically I Thanks full cash that for rate flow business be working in in

Jonathan Tanwanteng

isn't to go other expense things. wondering don't expected you're why it interest the I'm down. know I just spending if on

David Jackola

don't interest expense is of to good had prior We it much repeat as else. XXXX I'd John, period, in to question accounting guide Yes. say, XXXX. anything that we it's expect in as an a

Operator

call back Russ ahead. Becker, closing Please question-and-answer President That over remarks. turn to I go now session. will concludes our CEO, for and the

Russell Becker

call. as and our the to Thank that of we throughout recently appreciate those to everybody, all forward ownership year. well to are else remainder team is much. support. join taking I our new APi, would dedication joined I as exist. like thank their which you like We continued also people updating on thank everything long-term look -- to our time not Thank their are of support and built. would believe progress foundation members are our we the the do In closing, to shareholders so for for us them, our We your business. Without on the for our you of you,

Operator

gentlemen, call. joining. Thank you today's and for that all concludes Ladies

disconnect. may now You

APi (APG) 26 Feb 252024 Q4 Earnings call transcript