APi Group Corporation (NYSE: APG) (“APi” or the “Company”) today
provided an update on year-end 2023 results and net revenue and
adjusted EBITDA guidance for 2024. The Company is participating in
two upcoming investor conferences and may discuss these items while
at the conferences.
Financial Update
Russ Becker, APi’s President and Chief Executive Officer stated:
“2023 was another year of record financial results for APi, with
continued improvements in adjusted EBITDA margin and free cash flow
generation. We expect net revenues and adjusted EBITDA for 2023
will be above the midpoint of the guidance range provided on
November 2, 2023 of $6,925 million and $780 million, respectively.
In addition, we expect to end the year with a net leverage ratio of
approximately 2.3x, following through on our commitment to end the
year below 2.5x, driven by adjusted free cash flow conversion for
the year that came in above our target of 65%. We believe that the
strength of our balance sheet provides APi significant flexibility
to pursue value enhancing capital allocation alternatives
including, but not limited to, an acceleration of our bolt-on
M&A strategy.
"As we look ahead to 2024, we expect that our momentum in the
services business will continue and that our projects business in
Specialty and HVAC will continue to have its organic growth
moderated in the first half of 2024, driven by disciplined customer
and project selection as well as deflation in certain material
costs. Our backlog remains strong and we believe that net revenues
for 2024 will range between $7,050 to $7,250 million, representing
mid-single-digit organic growth (adjusted for certain acquisitions
and divestitures) in net revenues, led by expected double-digit
core inspection organic growth.
"For 2024 adjusted EBITDA, we expect to deliver between $855 to
$905 million as margins are expected to continue to expand this
year. We remain confident in achieving our goal of 13%+ adjusted
EBITDA margin in 2025 through an improved mix of inspection,
service and monitoring revenue, procurement savings, value capture
opportunities from recent acquisitions and leveraging our global
scale. We look forward to providing more detail on our 2023
performance as well as our outlook for 2024 on our earnings call on
February 28, 2024.”
Upcoming Investor Conference
Participation
APi’s senior leadership will be participating in a fireside chat
at the Citi 2024 Global Industrial Tech and Mobility Conference on
Wednesday, February 21, 2024 at 2:40pm ET and the Barclays 2024
Industrial Select Conference on Thursday, February 22, 2024 at
8:35am ET. The live webcast link and archived replay will be
available in the “Events” area on the Investor Relations page of
APi’s website at www.apigroupcorp.com. Interested parties should
check the Company’s website for any schedule updates or time
changes.
About APi:
APi is a global, market-leading business services provider of
life safety, security and specialty services with a substantial
recurring revenue base and over 500 locations worldwide. APi
provides statutorily mandated and other contracted services to a
strong base of long-standing customers across industries. We have a
winning leadership culture driven by entrepreneurial business
leaders to deliver innovative solutions for our customers. More
information can be found at www.apigroupcorp.com.
Forward-Looking Statements and
Disclaimers
Certain statements in this press release and related comments
made by management may be considered forward-looking statements
within the meaning of the U.S federal securities laws.
Forward-looking statements are any statements other than statements
of historical fact and represent our current judgment about
possible future events. In some cases, you can identify
forward-looking statements by terms including “expect”,
“anticipate”, “project”, “will”, “should”, “believe”, “intend”,
“plan”, “estimate”, “potential”, “target”, “would”, and similar
expressions, although not all forward-looking statements contain
these identifying terms. While we believe these statements are
reasonable, they are not guarantees of future performance and are
subject to known and unknown risks, uncertainties and other factors
that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements, including
(i) economic conditions, competition, inflation, or currency
impacts, (ii) the ability to recognize the anticipated benefits of
the Company’s acquisitions, including anticipated cost savings from
the Chubb acquisition, (iii) failure to fully execute the Company’s
inspection first strategy or to realize the expected service
revenue from such inspections, (iv) risks associated with the
Company’s expanded international operations, (v) the Company’s
substantial level of indebtedness, and (vi) those risks and
uncertainties discussed in the “Risk Factors” section of our Form
10-K filings, and any updates to the risk factors in our Form 10-Q
and 8-K filings with the U.S. Securities and Exchange Commission.
Given these risks and uncertainties, investors are cautioned not to
place undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date of such statements and, except
as required by applicable law, the Company does not undertake any
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
We do not provide reconciliations of forward-looking non-U.S.
GAAP adjusted EBITDA to GAAP due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations, including adjustments that could be made for
acquisitions and divestitures, business process transformation and
other expenses for the integration of acquired businesses, one-time
and other events such as impairment charges, transaction and other
costs related to acquisitions, restructuring costs, amortization of
intangible assets, and other charges reflected in our
reconciliation of historic numbers, the amount of which, based on
historical experience, could be significant.
The preliminary, unaudited financial estimates contained in this
press release are based on information available to management as
of the date of this press release, remain subject to the completion
of normal year-end accounting procedures and adjustments, and are
subject to change. Our independent registered public accounting
firm has not completed its review of our results for the year ended
December 31, 2023. During the course of the preparation of our
consolidated financial statements and related notes, and completion
of our financial close and procedures for the year ended,
adjustments to the preliminary estimates may be identified, and
such adjustments may be material. In addition, other developments
may arise between now and the time the financial statements for the
year ended December 31, 2023 are finalized. We undertake no
obligation to update the information in this press release in the
event facts or circumstances change after the date of this press
release.
Non-GAAP Financial
Measures
This press release 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 press release and the
additional financial information both in explaining its results to
shareholders and the investment community and in its internal
evaluation and management of its businesses. The Company’s
management believes that these non-U.S. GAAP financial measures and
the information they provide are useful to investors since these
measures (a) permit investors to view the Company’s performance
using the same tools that management uses to evaluate the Company’s
past performance, reportable business segments and prospects for
future performance, (b) permit investors to compare the Company
with its peers and (c) determine certain elements of management’s
incentive compensation (d) provide consistent period-to-period
comparisons of the results. Specifically:
- Earnings before interest, taxes, depreciation and amortization
(“EBITDA”) is the measure of profitability used by management to
manage its segments and, accordingly, in its segment reporting. The
Company supplements the reporting of its consolidated financial
information with certain non-U.S. GAAP financial measures,
including EBITDA and adjusted EBITDA, which is defined as EBITDA
excluding the impact of certain non-cash and other specifically
identified items (“adjusted EBITDA”). Adjusted EBITDA margin is
calculated as adjusted EBITDA divided by net revenues. The Company
believes these non-U.S. GAAP measures provide meaningful
information and help investors understand the Company’s financial
results and assess its prospects for future performance. The
Company uses EBITDA and adjusted EBITDA to evaluate its
performance, both internally and as compared with its peers,
because it excludes certain items that may not be indicative of the
Company’s core operating results. Consolidated EBITDA is calculated
in a manner consistent with segment EBITDA, which is a measure of
segment profitability.
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version on businesswire.com: https://www.businesswire.com/news/home/20240220941834/en/
Investor Relations and Media Inquiries: Adam Fee Vice
President of Investor Relations Tel: +1 651-240-7252 Email:
investorrelations@apigroupinc.us
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