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February 26, 2025 Q4 2024 Earnings Call
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2APi GROUP | BUILDING GREAT LEADERS® 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 forward-looking statements made by or on behalf of APi Group Corporation (“APi” or the “Company”). Such discussion and statements may contain words such as “expect,” “anticipate,” “will,” “should,” “believe,” “intend,” “plan,” “estimate,” “predict,” “seek,” “continue,” “pro forma” “outlook,” “may,” “might,” “should,” “can have,” “have,” “likely,” “potential,” “target,” “indicative,” “illustrative,” and variations of such words and similar expressions, and relate in this presentation, without limitation, to statements, beliefs, projections and expectations about future events. Such statements are based on the Company’s expectations, intentions and projections regarding the Company’s future performance, anticipated events or trends and other matters that are not historical facts. These statements 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, political risks, and other risks that may affect the Company’s future performance, including the impacts of inflationary pressures and other macroeconomic factors on the Company’s business, markets, supply chain, customers and workforce, on the credit and financial markets, on the alignment of expenses and revenues and on the global economy generally; (ii) supply chain constraints and interruptions, and the resulting increases in the cost, or reductions in the supply, of the materials and commodities the Company uses in its business and for which the Company bears the risk of such increases; (iii) risks associated with the Company’s expanded international operations; (iv) failure t o realize the anticipated benefits of our acquisitions and restructuring program, and our ability to successfully execute the Company’s bolt-on acquisition strategy to acquire other businesses and successfully integrate them into its operations; (v) failure to fully execute the Company’s inspection first strategy or to realize the expected service revenue from such inspections; (vi) failure to realize expected benefits from the Company’s other business strategies, including the Company’s disciplined approach to customer and project selection, the Company’s asset-light, services- focused business model and its expected impact on future capital expenditures, and the expected efficiencies from the realignment of the Company’s safety services segment; (vii) risks associated with the Company’s decentralized business model and participation in joint ventures; (viii) improperly managed projects or project delays; (ix) adverse developments in the credit markets which could impact the Company’s ability to secure financing in the future; (x) the Company’s substantial level of indebtedness; (xi) risks associated with the Company’s contract portfolio; (xii) changes in applicable laws or regulations; (xiii) the possibility tha t the Company may be adversely affected by other economic, business, and/or competitive factors; (xiv) the impact of a global armed conflict; (xv) the trading price of the Company’s common stock, which may be positively or negatively impacted by market and economic conditions, the availability of the Company’s common stock, the Company’s financial performance or determinations following the date of this presentation to use the Company’s funds for other purposes; (xvi) geopolitical risks; and (xvii) other risks and uncertainties, including those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 under the heading “Risk Factors.” Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. Additional information concerning these risks, uncertainties and other factors that could cause actual results to vary is, or will be, included in the periodic and other reports filed by the Company with the Securities and Exchange Commission. Forward-looking statements included in this presentation speak only as of the date hereof 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 circumstances after the date of this presentation.
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3APi GROUP | BUILDING GREAT LEADERS® 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, (c) in case of adjusted EBITDA, determines certain elements of management’s incentive compensation, and (d) provide consistent period-to-period comparisons of the results. Specifically: • The Company’s management believes that adjusted gross profit, adjusted selling, general and administrative (“SG&A”) expenses, adjusted net income, and adjusted earnings per share, which are non-GAAP financial measures that exclude business transformation and other expenses for the integration of acquired businesses, the impact and results of businesses classified as assets held-for-sale and businesses divested, and one-time and other events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions, amortization of intangible assets, and non-service pension cost or benefit are useful because they provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations. • The Company supplements the reporting of its consolidated financial information with certain financial measures including adjusted EBITDA, a non-GAAP financial measure, which is defined as earnings before interest, taxes, depreciation and amortization, excluding the impact of certain non-cash and other specifically identified items, and including corporate costs and eliminations. Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net revenues. The Company also supplements its reporting with segment earnings, which is defined as earnings before interest, taxes, depreciation and amortization, excluding the impact of certain non-cash and other specifically identified items, is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting. Segment earnings margin is calculated as segment earnings divided by net revenues. The Company believes these measures provide meaningful information and help investors understand the Company’s financial results and assess its prospects for future performance. The Company uses adjusted EBITDA and segment earnings to evaluate its performance, both internally and as compared with its peers, because these measures exclude certain items that may not be indicative of the Company’s core operating results. • The Company discloses fixed currency net revenues and adjusted EBITDA (“FFX”) on a consolidated basis and segment earnings on a segment specific basis to provide a more complete understanding of underlying revenue, adjusted EBITDA, and segment earnings trends by providing net revenues, adjusted EBITDA, and segment earnings on a consistent basis. Under U.S. GAAP, income statement results are translated in U.S. Dollars at the average exchange rates for the period presented. Management believes that the fixed currency non-GAAP measures are useful in providing period-to-period comparisons of the results of the Company’s operational performance, as it excludes the translation impact of exchange rate fluctuations on our international results. Fixed currency amounts included in this release are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of 2024. • The Company also presents organic changes in net revenues on a consolidated basis or segment specific basis to provide a more complete understanding of underlying revenue trends by providing net revenues on a consistent basis as it excludes the impacts of material acquisitions, completed divestitures, and changes in foreign currency from year-over-year comparisons on reported net revenues, calculated as the difference between the reported net revenues for the current period and reported net revenues for the current period converted at fixed foreign currency exchange rates (excluding material acquisitions and divestitures). The remainder is divid ed by prior year fixed currency net revenues, excluding the impacts of completed divestitures. Non-GAAP Financial Measures
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4APi GROUP | BUILDING GREAT LEADERS® • 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, however, it does not represent residual cash flows available for discretionary expenditures. Free cash flow is defined as cash provided by (used in) operating activities less capital expenditures. Adjusted free cash flow is defined as cash provided by (used in) operating activities plus or minus events including, but not limited to, transaction and other costs related to acquisitions, business transformation and other expenses for the integration of acquired businesses, payments on acquired liabilities, payments made for restructuring programs, impacts of businesses classified as assets held-for-sale and businesses divested, one-time and other events such as post-measurement period purchase accounting adjustments for acquisitions and public offerings, and COVID-19 related payroll tax deferral and relief items. Adjusted free cash flow conversion is defined as adjusted free cash flow as a percentage of adjusted EBITDA. • The Company calculates its leverage ratio in accordance with its debt agreements which include different adjustments to EBITDA from those included in the adjusted EBITDA numbers reported externally. While the Company believes these non-U.S. GAAP measures are useful in evaluating the Company’s performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with U.S. GAAP. Additionally, these non-U.S. GAAP financial measures may differ from similar measures presented by other companies. A reconciliation of these non-U.S. GAAP financial measures is included later in this press release. The Company does not provide reconciliations of forward-looking non-U.S. GAAP adjusted EBITDA and growth in organic net revenues 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 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 the Company’s reconciliation of historic numbers, the amount of which, based on historical experience, could be significant. Non-GAAP Financial Measures (cont’d)
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5APi GROUP | BUILDING GREAT LEADERS® APi’s “13/60/80” Shareholder Value Creation Framework Building Great Leaders Growing Revenue Generating Free Cash Flow Expanding Margins • The safety, health, and well-being of each of our leaders is our #1 value • Everyone, everywhere is a leader • Best-in-class field leaders • Paying for performance • ESG & diversity, equity and inclusion • Team engagement • Targeting long-term 80% adjusted free cash flow conversion and net leverage ratio of approximately 2.5x • Asset-light, low capex operating model • Pursuing accretive M&A and portfolio optimization, and other value enhancing capital allocation options • 13%+ Adjusted EBITDA Margin by 2025 • Improving mix with long-term target of 60%+ of revenue from inspection, service, and monitoring • Pricing initiatives and disciplined project and customer selection • Systems, scale, leverage, and operational excellence, including procurement • Chubb value capture We aspire to be the #1 People-First Company and #1 in Business Performance in our industry. • Delivering long-term organic revenue growth above industry average • Inspection-first go-to-market strategy • Expanding share with new and existing customers • Fully leveraging our global platform
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6APi GROUP | BUILDING GREAT LEADERS®APi GROUP | BUILDING GREAT LEADERS® APi’s Significant Improvement as a Public Company 6 2021 2024 Improvement Revenue Net Revenues $3.9B $7.0B + $3.1B Consecutive Quarters of Double-Digit U.S. Inspection Growth 6 18 + 12 % Inspection, Service, Monitoring ~40% ~54% + 14% pts Profitability % Adj. Gross Margin 24.0% 31.1% + 710 bps Adj. EBITDA $M $407 $893 + $486 % Adj. EBITDA Margin 10.3% 12.7% + 240 bps Cash Flow Adj. FCF $M $223 $668 + $445 Adj. FCF Conversion 55% 75% + 20% pts Net Leverage(1) 3.9x 2.2x (1.7x) Note: Refer to Appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures. (1) 2021 figure as adjusted for Chubb financing and 2024 reflects FY 2024 calculated pursuant to terms of existing debt agreements.
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7APi GROUP | BUILDING GREAT LEADERS® Fourth Quarter 2024 Performance Highlights Note: Refer to Appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures. Fourth quarter net revenues of $1.9 billion, an increase of 5.8% vs. prior year Adjusted gross margin expansion of 100 basis points vs. prior year Fourth quarter adjusted EBITDA of $242 million, representing adjusted EBITDA margin expansion of 120 basis points vs. prior year to 13.0% adjusted EBITDA margin Adjusted diluted earnings per share in the fourth quarter of $0.51, up 15.9% vs. prior year Fourth quarter adjusted free cash flow of $307 million, representing 127% conversion
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8APi GROUP | BUILDING GREAT LEADERS® Fiscal Year 2024 Performance Highlights Note: Refer to Appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures. Record net revenues of $7.0 billion for the full year, an increase of 1.3% vs. prior year Adjusted gross margin expansion of 250 basis points vs. prior year Adjusted EBITDA of $893 million, representing adjusted EBITDA margin expansion of 140 basis points vs. prior year, and full year adjusted EBITDA margin of 12.7% Adjusted diluted earnings per share of $1.84, up 16.5% vs. prior year Full year adjusted free cash flow of $668 million, representing 75% conversion
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9APi GROUP | BUILDING GREAT LEADERS® NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA 83% 17% 86% 14% Total: $1.9 billion(1) Total: $579 million Total: $242 million(1) THREE MONTHS ENDED DECEMBER 31, 2024 NET REVENUES ADJUSTED GROSS PROFIT ADJUSTED EBITDA 74% 26% 79% 21% 84% 16% Total: $7.0 billion(1) Total: $2.2 billion Total: $893 million(1) FISCAL YEAR ENDED DECEMBER 31, 2024 75% 25% 2024 Financial Results Overview Specialty ServicesSafety Services Notes: Refer to Appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures. (1) Assumes Corporate and Eliminations allocated according to net revenues and adjusted EBITDA contributions, respectively.
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10APi GROUP | BUILDING GREAT LEADERS® THREE MONTHS ENDED DECEMBER 31, FISCAL YEAR ENDED DECEMBER 31, ($ in millions, except per share figures) 2024 2023 YoY Change 2024 2023 YoY Change Net Revenues $ 1,861 $ 1,759 + 5.8% $ 7,018 $ 6,928 + 1.3% Organic Net Revenue Growth (1) + 1.3% (0.9)% Adjusted Gross Profit $ 579 $ 529 + 9.5% $ 2,186 $ 1,981 + 10.3% Adjusted Gross Margin 31.1% 30.1% + 100 bps 31.1% 28.6% + 250 bps Adjusted EBITDA $ 242 $ 208 + 16.3% $ 893 $ 782 + 14.2% Adjusted EBITDA Margin 13.0% 11.8% + 120 bps 12.7% 11.3% + 140 bps Adjusted Net Income $ 143 $ 120 + 19.2% $ 514 $ 430 + 19.5% Adjusted Diluted EPS $ 0.51 $ 0.44 + 15.9% $ 1.84 $ 1.58 + 16.5% Operating Cash Flow $ 283 $ 297 (4.7)% $ 620 $ 514 + 20.6% Adjusted Free Cash Flow $ 307 $ 300 + 2.3% $ 668 $ 537 + 24.4% Adjusted Free Cash Flow Conversion 126.9% 144.2% (1,730) bps 74.8% 68.7% + 610 bps Notes: Refer to Appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures. (1) Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts of material acquisitions, divestitures, and the impact of changes due to foreign currency translation. Key Financial and Operating Metrics
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11APi GROUP | BUILDING GREAT LEADERS® Safety Services Specialty Services ($ in millions) 2024 2023 YoY Change 2024 2023 YoY Change Net Revenues $ 1,399 $ 1,238 + 13.0% $ 463 $ 525 (11.8)% Organic Net Revenue Growth (1) + 4.7% (7.6)% Adjusted Gross Profit $ 499 $ 434 + 15.0% $ 80 $ 95 (15.8)% Adjusted Gross Margin 35.7% 35.1% + 60 bps 17.3% 18.1% (80 bps) Segment Earnings (Adj. EBITDA) $ 224 $ 189 + 18.5% $ 46 $ 59 (22.0)% Segment Earnings Margin 16.0% 15.3% + 70 bps 9.9% 11.2% (130 bps) FISCAL YEAR ENDED DECEMBER 31, THREE MONTHS ENDED DECEMBER 31, Safety Services Specialty Services ($ in millions) 2024 2023 YoY Change 2024 2023 YoY Change Net Revenues $ 5,227 $ 4,871 + 7.3% $ 1,798 $ 2,079 (13.5)% Organic Net Revenue Growth (1) + 2.4% (9.6)% Adjusted Gross Profit $ 1,841 $ 1,611 + 14.3% $ 345 $ 370 (6.8)% Adjusted Gross Margin 35.2% 33.1% + 210 bps 19.2% 17.8% + 140 bps Segment Earnings (Adj. EBITDA) $ 809 $ 664 + 21.8% $ 209 $ 239 (12.6)% Segment Earnings Margin 15.5% 13.6% + 190 bps 11.6% 11.5% + 10 bps Notes: Refer to Appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures. (1) Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts of material acquisitions, divestitures, and the impact of changes due to foreign currency translation. Key Segment Financial and Operating Metrics
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12APi GROUP | BUILDING GREAT LEADERS® 2025 Guidance NET REVENUES $7,300 - $7,500 million $970 - $1,020 million ADJUSTED EBITDA Notes: Based on current foreign exchange rates.
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13APi GROUP | BUILDING GREAT LEADERS® Q1 2025 FY 2025 Net Revenues $1,625 to $1,675 million $7,300 to $7,500 million Reported Net Revenues versus Last Year 2% - 5% 4% - 7% Net Revenue Organic Growth (3)% - Flat 2% - 5% Adjusted EBITDA $185 to $195 million $970 to $1,020 million Adjusted EBITDA versus Last Year 6% - 11% 9% - 14% Adjusted EBITDA Growth at Fixed Currencies 7% - 13% 10% - 15% Adjusted Free Cash Flow Conversion Approximately 75% 2025 Guidance (cont’d) Notes: Based on current foreign exchange rates.
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14APi GROUP | BUILDING GREAT LEADERS® Capitalization As of the end of the fourth quarter, our net leverage ratio as calculated pursuant to terms of existing debt agreements was approximately 2.2x, finishing below our 2.5x target, enhancing our flexibility for value-enhancing capital deployment Weighted average debt maturity of 4.2 years as of December 31, 2024, reflecting the repayment of $100 million of Term Loan due 2029 at year-end Executed 12 bolt-on acquisitions during 2024 totaling approximately $250 million in spend at a weighted average multiple below 6x In February, successfully completed the repricing of our Term Loan due 2029, reducing the applicable margin on the outstanding amount by 25 basis points and saving approximately $5 million in interest expense
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Appendix
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What We Do
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17APi GROUP | BUILDING GREAT LEADERS® Realignment sets up the Safety Services segment as more of a pure-play life safety business focused on fire protection, electronic security, and elevator and escalator services. Safety Services Overview Post Segment Realignment Financial Summary • Access Control • Backflow devices • Emergency and exit lighting • Special hazard systems • Elevator & Escalator Services • Elevator Modernization • Emergency fire suppression systems • Fire alarm and detection systems • Fire pumps • Fire sprinkler systems • Fire protection systems inspections • Remote Monitoring • Security and surveillance systems • Temperature scanning $1.5 $1.5 Q3 2024 Q4 2024 Ended 2024 with a backlog of $2.0 billion, up mid- single-digit organically versus prior year, positioning the business for growth in 2025. Safety Services Backlog Realigned Safety Services Segment Overview ($ in millions) 2022 2023 2024 Net Revenues $ 4,123 $ 4,425 $ 4,797 Reported Net Revenue Growth - + 7.3% + 8.4% Organic Net Revenue Growth (1) - + 6.8% + 3.0% Adjusted Gross Profit $ 1,368 $ 1,527 $ 1,747 Adjusted Gross Margin 33.2% 34.5% 36.4% Segment Earnings (Adj. EBITDA) $ 531 $ 625 $ 765 Segment Earnings Margin 12.9% 14.1% 15.9% (1) Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts of material acquisitions, divestitures, and the impact of changes due to foreign currency translation.
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18APi GROUP | BUILDING GREAT LEADERS® Realignment provides opportunities to enhance our shared services capabilities in the Specialty segment and allows the HVAC business to receive increased focus from the leadership team, putting it in the best position to win with its customers. Specialty Services Overview Post Segment Realignment Financial Summary Infrastructure/Utility • Electric and gas utility • Fiber Optics and communication systems • Water and sewer systems • Energy transmission and distribution services • Heavy civil, road, and bridge work Specialty Contracting • Mechanical, insulation, roofing, and siding • Plant maintenance and outage services • Scaffold services • Material sales and distribution HVAC • HVAC installation and service • Plumbing installation and service • Controls and building information systems • Predictive maintenance and energy retrofits Fabrication • Structural steel fabrication and erection • Piping and ventilation systems • Specialty fabrication $1.5 $1.5 Q3 2024 Q4 2024 Ended 2024 with a backlog of $1.5 billion, up double- digit organically versus prior year, positioning the business for growth in 2025. Specialty Services Backlog Realigned Specialty Services Segment Overview ($ in millions) 2022 2023 2024 Net Revenues $ 2,464 $ 2,518 $ 2,228 Reported Net Revenue Growth - + 2.2% (11.5)% Organic Net Revenue Growth (1) - + 2.6% (8.2)% Adjusted Gross Profit $ 392 $ 455 $ 438 Adjusted Gross Margin 15.9% 18.1% 19.7% Segment Earnings (Adj. EBITDA) $ 239 $ 278 $ 253 Segment Earnings Margin 9.7% 11.0% 11.4% (1) Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts of material acquisitions, divestitures, and the impact of changes due to foreign currency translation.
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19APi GROUP | BUILDING GREAT LEADERS® Pre Segment Realignment Post Segment Realignment Safety Services Safety Services ($ in millions) 2022 2023 2024 2022 2023 2024 Net Revenues(1) $ 4,575 $ 4,871 $ 5,227 $ 4,123 $ 4,425 $ 4,797 Reported Net Revenue Growth + 120.0% + 6.5% + 7.3% - + 7.3% + 8.4% Organic Net Revenue Growth (2) + 17.1% + 6.0% + 2.4% - + 6.8% + 3.0% Adjusted Gross Profit $ 1,432 $ 1,611 $ 1,841 $ 1,368 $ 1,527 $ 1,747 Adjusted Gross Margin 31.3% 33.1% 35.2% 33.2% 34.5% 36.4% Segment Earnings (Adj. EBITDA) $ 559 $ 664 $ 809 $ 531 $ 625 $ 765 Segment Earnings Margin 12.2% 13.6% 15.5% 12.9% 14.1% 15.9% FISCAL YEAR ENDED DECEMBER 31, Key Segment Financial and Operating Metrics Specialty Services Specialty Services ($ in millions) 2022 2023 2024 2022 2023 2024 Net Revenues(1) $ 2,030 $ 2,079 $ 1,798 $ 2,464 $ 2,518 $ 2,228 Reported Net Revenue Growth + 6.4% + 2.4% (13.5)% - + 2.2% (11.5)% Organic Net Revenue Growth (2) + 6.7% + 2.5% (9.6)% - + 2.6% (8.2)% Adjusted Gross Profit $ 328 $ 370 $ 345 $ 392 $ 455 $ 438 Adjusted Gross Margin 16.2% 17.8% 19.2% 15.9% 18.1% 19.7% Segment Earnings (Adj. EBITDA) $ 210 $ 239 $ 209 $ 239 $ 278 $ 253 Segment Earnings Margin 10.3% 11.5% 11.6% 9.7% 11.0% 11.4% (1) APi Group Net Revenue eliminations in the Pre Segment Realignment hierarchy were ($47), ($22), and ($7) for 2022, 2023, 2024, respectively. Under the Post Segment Realignment they are ($29), ($14), and ($7). (2) Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts of material acquisitions, divestitures, and the impact of changes due to foreign currency translation.
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20APi GROUP | BUILDING GREAT LEADERS®APi GROUP | BUILDING GREAT LEADERS® 3 7 12 1 7 12 2019 2020 2021 2022 2023 2024 Track Record of Bolt-on M&A at Attractive Multiples Aggregate Purchase Price $M $9 $42 $114 $5 $98 $250 Weighted Avg. Adj. EBITDA Multiple Weighted Average Adjusted EBITDA Multiple for Bolt-on Acquisitions <6x in Each Year Accretive to Adj. EBITDA Margin (1) Excludes SKG in 2020, Chubb in 2022, Elevated in 2024 and non-material customer account purchases. 20 APi has a consistent track record of supplementing organic growth with bolt-on M&A activity. Our target markets (Fire Protection, Electronic Security, Elevators) remain highly fragmented with a deep, growing pipeline of global opportunities. # of Bolt-on Acquisitions Per Year(1) Go-public transaction Jan. 2022: Chubb transaction
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21APi GROUP | BUILDING GREAT LEADERS®APi GROUP | BUILDING GREAT LEADERS® Supplemental Revenue Information 21 Note: Excludes Corporate and Eliminations. USD 63%EUR 16% Other 21% FISCAL YEAR ENDED DECEMBER 31, 2024 Revenue by Local Currency Revenue by Offering Type Inspection, Service, and Monitoring 54% Non-Service 46%
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22APi GROUP | BUILDING GREAT LEADERS® 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 based on translation into U.S. Dollars at fixed foreign currency exchange rates established by management at the beginning of 2024. b) Amount represents the year-over-year change when comparing both years after eliminating the impact of fluctuations in foreign currency rates by translating foreign currency denominated results at fixed foreign currency (“FFX”) rates for both periods. c) Adjustment to exclude net revenues from material acquisitions from their respective dates of acquisition until the first year anniversary from date of acquisition and net revenues from divestitures for all periods for businesses divested as of December 31, 2024. d) Organic change in net revenues provides a consistent basis for a year-over-year comparison in net revenues as it excludes the impacts of material acquisitions, divestitures, and the impact of changes due to foreign currency translation. Organic Change in Net Revenues (non- GAAP) Reconciliation of Non-GAAP Financial Measures
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23APi GROUP | BUILDING GREAT LEADERS® $ 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 restructuring programs and related costs. c) Adjustment to reflect the addback of amortization expense. d) Adjustment to reflect the elimination of the expense attributable to deferred consideration to prior owners of acquired businesses not expected to continue or recur. e) Adjustment to reflect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to business process transformation, including system and process development costs and implementation of processes and compliance programs related to the Sarbanes-Oxley Act of 2002. f) Adjustment to reflect the elimination of transaction costs related to potential and completed acquisitions and expenses associated with the transition of newly acquired businesses from prior ownership into APi Group. g) Adjustment includes various miscellaneous non-recurring items, such as the gain on the sale of a building, costs associated with the Series B Preferred Stock conversion, elimination of changes in fair value estimates to acquired liabilities, and impairment recorded on disposed assets. Adjusted Gross Profit (non -GAAP) Reconciliation of Non-GAAP Financial Measures (cont’d)
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24APi GROUP | BUILDING GREAT LEADERS® 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 elimination of non-service pension cost (benefit), which consists of interest cost, expected return on plan assets and amortization of actuarial gains/losses of the pension programs assumed as part of the Chubb acquisition. c) Adjustment to reflect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to business process transformation, including system and process development costs and implementation of processes and compliance programs related to the Sarbanes-Oxley Act of 2002. d) Adjustment to reflect the elimination of transaction costs related to potential and completed acquisitions and expenses associated with the transition of newly acquired businesses from prior ownership into APi Group. e) Adjustment to reflect the elimination of loss on extinguishment of debt resulting from early repayments and repurchases of longterm debt. f) Adjustment to reflect the elimination of expenses associated with restructuring programs and related costs. g) Adjustment includes various miscellaneous non-recurring items, such as the gain on the sale of a building, costs associated with the Series B Preferred Stock conversion, elimination of changes in fair value estimates to acquired liabilities, and impairment recorded on disposed assets $ IN MILLIONSAdjusted EBITDA (non -GAAP) Reconciliation of Non-GAAP Financial Measures (cont’d)
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25APi GROUP | BUILDING GREAT LEADERS® $ IN MILLIONSAdjusted income before income tax, net income (loss) and EPS (non- GAAP) a)Adjustment to reflect the addback of pre-tax amortization expense related to intangible assets. b)Adjustment to reflect the elimination of the expense attributable to deferred consideration to prior owners of acquired businesses not expected to continue or recur. c) Adjustment to reflect the elimination of non-service pension cost (benefit), which consists of interest cost, expected return on plan assets and amortization of actuarial gains/losses of the pension programs assumed as part of the Chubb acquisition. d)Adjustment to reflect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to business process transformation, including system and process development costs and implementation of processes and compliance programs related to the SarbanesOxley Act of 2002. e)Adjustment to reflect the elimination of transaction costs related to potential and completed acquisitions and expenses associated with the transition of newly acquired businesses from prior ownership into APi Group. f) Adjustment to reflect the elimination of loss on extinguishment of debt resulting from early repayments and repurchases of long-term debt. g)Adjustment to reflect the elimination of expenses associated with restructuring programs and related costs. h)Adjustment includes various miscellaneous non-recurring items, such as the gain on the sale of a building, costs associated with the Series B Preferred Stock conversion, elimination of changes in fair value estimates to acquired liabilities, and impairment recorded on disposed assets. i) Adjustment to reflect an adjusted effective tax rate of 23% which reflects the Company's estimated expectations for taxes to be paid on its adjusted non-GAAP earnings. j) Adjustment to add the dilutive impact of options and RSUs which were anti-dilutive and excluded from the diluted weighted average shares outstanding (as reported). k)Adjustment for the three months and year ended December 31, 2024 reflects the addition of the dilutive impact of 4 million shares associated with the deemed conversion of Series A Preferred Stock. The adjustment for the three months and year ended December 31, 2023 is partially offset by the elimination of 2 million and 1 million shares, respectively, reflecting the dilutive effect of the Preferred Share dividend as the dividend is contingent upon the share price the last ten days of the calendar year and was not earned as of December 31, 2024. l) Adjustment for the weighted average impact of the Series B Preferred Stock that were convertible into approximately 33 million common shares and were outstanding for two months of the year. On February 28, 2024, all Series B Preferred Stock was converted to common stock and there is no longer any dilutive impact from the Series B Preferred Stock. Reconciliation of Non-GAAP Financial Measures (cont’d)
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26APi GROUP | BUILDING GREAT LEADERS® 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 Corporate and Eliminations. $ IN MILLIONSAdjusted Segment Financial Information (non- GAAP) Reconciliation of Non-GAAP Financial Measures (cont’d)
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27APi GROUP | BUILDING GREAT LEADERS® Adjusted Segment Financial Information (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 restructuring programs and related costs. $ IN MILLIONS Reconciliation of Non-GAAP Financial Measures (cont’d)
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28APi GROUP | BUILDING GREAT LEADERS® Adjusted Segment Financial Information (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 restructuring programs and related costs. $ IN MILLIONS Reconciliation of Non-GAAP Financial Measures (cont’d)
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29APi GROUP | BUILDING GREAT LEADERS® a) Adjustment to reflect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to business process transformation, including system and process development costs and implementation of processes and compliance programs related to the Sarbanes-Oxley Act of 2002. b) Adjustment to reflect the elimination of transaction costs related to potential and completed acquisitions and expenses associated with the transition of newly acquired businesses from prior ownership into APi Group. c) Adjustment to reflect the elimination of loss on extinguishment of debt resulting from early repayments and repurchases of longterm debt. d) Adjustment to reflect the elimination of expenses associated with restructuring programs and related costs. e) Adjustment includes various miscellaneous non-recurring items, such as the gain on the sale of a building, costs associated with the Series B Preferred Stock conversion, elimination of changes in fair value estimates to acquired liabilities, and impairment recorded on disposed assets. $ IN MILLIONSAdjusted Segment Financial Information (non- GAAP) Reconciliation of Non-GAAP Financial Measures (cont’d)
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30APi GROUP | BUILDING GREAT LEADERS® a) Segment earnings derived from non-GAAP reconciliations included elsewhere in this presentation. b) Adjusted to eliminate the impact of foreign currency on segment earnings amounts, calculated as the difference between segment earnings at public currency rates and segment earnings at fixed currency rates for both periods. Fixed currency amounts are based on translation into U.S. Dollars at fixed foreign currency exchange rates established by management at the beginning of 2024. c) Amount represents the year-over-year change when comparing both years after eliminating the impact of fluctuations in foreign exchange rates by translating foreign currency denominated results at fixed foreign currency ("FFX") rates for both periods. Change in Segment Earnings (non -GAAP) Reconciliation of Non-GAAP Financial Measures (cont’d)
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31APi GROUP | BUILDING GREAT LEADERS® 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 expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to business process transformation, including system and process development costs and implementation of processes and compliance programs related to the Sarbanes-Oxley Act of 2002. c) Adjustment to reflect the elimination of transaction costs related to potential and completed acquisitions and expenses associated with the transition of newly acquired businesses from prior ownership into APi Group. d) Adjustment to reflect payments made for restructuring programs and related costs. e) Adjustment reflects the elimination of operating cash for the impact of the Coronavirus Aid Relief and Economic Security (CARES) Act. During the first quarter of 2020, the CARES Act was passed, allowing the Company to defer the payment of the employer's share of Social Security taxes until December 2021 and December 2022. The final payments were made on the amount deferred in 2020 during the first half of 2023. f) Adjustment includes various miscellaneous non-recurring items, such as elimination of payments made on the Series B Preferred Stock conversion, and payments made related to the debt repricing transaction. g) Adjusted EBITDA derived from non-GAAP reconciliations included elsewhere in this presentation. $ IN MILLIONSAdjusted Free Cash Flow and Conversion (non- GAAP) Reconciliation of Non-GAAP Financial Measures (cont’d)
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APi GROUP | BUILDING GREAT LEADERS® 32 Investor Relations and Media Inquiries: Adam Fee Vice President of Investor Relations +1 651-240-7252 email: investorrelations@apigroupinc.us
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Q4 2024 Earnings Call