APi (APG) 28 Feb 232022 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the APi Group's Fourth Quarter 2022 Financial Results Conference Call. [Operator Instructions].

I will now turn the call over to Olivia Walton, Vice President of Investor Relations at APi Group. Please go ahead.

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

on call Vice me and CEO; Financial Joining the and Jim Kevin President Becker, Officer; co-chairs. Krumm, and Lillie, our our our Martin Executive Sir President Board Chief today and Franklin, are Russ

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

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

statements February we to no obligation statement XX, any make. as today, forward-looking Our have update we and may of are

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

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

over to It is call pleasure Martin. the my now turn to

and of Olivia, good XXXX another development APi. you, Thank the everyone. year was incredible morning, in

We net over a service mandated revenues, team revenue positioned benefits business is APi a record marks XX,XXX January well for members basis. worldwide recurring we Services for and EBITDA life record fully seamless a XXXX growth record earnings of truly and integrated became countries. expansion, a XXXX, the continue adjusted per is -- platform with operating Following our that customers provider. year leading multinational continued the Safety to corporations statutorily and diluted from acquisition in has and margin services Chubb to of world's Security XX focused on that in providing of global created adjusted on share.

We a solid future. and execution bright APi our for the foundation pleased leadership to build very already on are with across

many and we M&A. adjusted action our focus runway we place event believe a swiftly healthy deleveraging our to as we thorough held know, growth have range well of X.Xx of expansion As and beyond November growth path EBITDA, on well targeted a organic appropriate you continued XXXX. our are incremental that strategy XX investor the for with XXXX levels of thoughtful to margin We continued and our on to and an target achieve debt of continued walk-through to continued positioned provide for in plans net X as Chubb to

will hand to that, you. over With the call Russ. I Thank

Thank you, to the time join for our Martin, morning. and good morning, this taking everyone. Thank call you

our would investor thanking for week you the in Miami conferences. a Citi XXXX by you provide for last update solid of results and and record event to outlook our we Before in start joined that of for I XXXX, those summary with Barclays like and November us at

and the opportunities on in in Based as shareholder creation. continue understanding the we of we of have achieve believe to clear that received most goals week, strategy and the have on last again focus our make a November the feedback to of front investors us value we

provides can other team shareholder of priority. which remain me platform say safety, our focus value. enhance you've foundational a grateful members continue This of and effort. from their and We #X As remains health our the we for each calls, heard hard prior and on priorities well-being to work

flow cash business members. organic stability ongoing talented strong financial revenue year demonstrates of believe of services-focused and a challenging our again growth and of execution environment. in macro results growth, the a for our APi. strategy delivered was We team by model adjusted the recurring record this free XXXX We EPS once our

ended year the XXXX, XX, for highlights the following. December include specific Key

increased by our inspection, a driven and an to revenues revenues of on coming legacy increase monitoring service XX% total basis XX% organic revenue by in inspection, We and of plus drive net achieved service net and from business. First, inspection monitoring. XX.X%, in growing our revenue goal our of continue double-digit towards plus goal

average, inspection revenue, monitoring higher XX% on margin As contract approximately a revenue. margin generates revenue than gross and than revenue higher approximately gross and contract reminder, generates service XX%

basis XXX grew Second, by adjusted gross points to XX.X%. margin

the through controls; pressures and spend procurement businesses are project disciplined across execution with pleased selection. and leadership our pricing growth activities; in focused monitoring; strong customer initiatives; margin and We service and to offset inspection,

compared Third, Fourth, adjusted year accretion diluted an prior or free share per driven by the and of strong Chubb. adjusted increased XX.X% period. to flow performance acquisition the increase earnings by $X.XX, from of representing $XXX operational XX.X% million cash

to to perform and on commitments, solid driven growth that strong well ability continues as business the well pressures margin a about as line on summary, exist macro have with negative In has our reinforced what more delivers mitigate basis. acquisition. performance than our importantly, by and organic Chubb its only and surprises, continues We've the found had positive we excitement our to expectations. most perform in operational

organic macro chain X-year X% supply a COVID-XX delivered Chubb before and XXXX inflation ownership, environment. solid disruptions, in despite a of CAGR growth Compared our to difficult

and its we are occurring services as we and The the front transitioning -- in planned, As and from Chubb improvements, be the from to is opportunities swiftly. tremendous provided completed year-end across continue of a grateful completed the transitioning integration by of teams. energized process the XXXX. Chubb significant, services of hard are life leading This work us by involved provider. our owner we Safety by we for and of prior work work Savings world's significant amount work the Security

capture rate least of As run million. outlined at we to investor see at November, value our opportunities update $XXX path a in clear XXXX a

and driving opportunities the excited about overlap cross-selling already to gains is are of we platform expand offerings. enhanced Our wallet services customers, with share

As to work strategy focused drive force on ultimately growth continuing coordinated we first, revenue selling and go-to-market will which drive inspection inspection we look ahead, sales believe lead we build efforts expansion. margin to our a service and are our further to global of

on fronts. entered positive XXXX with many momentum We

and sake backlog approximately risking growth Our rather growing of recurring strong compared customer revenue and to of our disciplined We was X% profitability. efforts continue remain and being service our on on we'll as of remains on XXXX. acyclical focus of aspects for the than up end selection, December December the growing project portfolio and XXXX focused to

enter that and the statutorily we and and services serve around for While believe some driven predictable a recession, parts protective of build demand the the end diversity recession to may a the recurring the world are help opportunities moat we under business. provide revenue markets others our of

a As companies part budgeting of strategic our of our presents long-term annual plan. operating process, each

to operations. challenged operating our a that companies any we of plan addition, In addresses unique each market challenges prepare potential downturn their and to

the business we confident to over years. prepared, are also years paper X and on plans that intend to We only Whatever goals have successes last downturn if challenge, on but through are not X we the over to our next the needed. build our leaders our for definitive early ourselves the set action achieve take

business confident front maintaining balance on focused liquidity of opportunities of growth free and conservative in on remain profile. the sheet a in resiliency, are prospects strong us, while and cash We capitalizing our and flow generation

is Our attractive pursue flexibility provides balance us strong, M&A. sheet including which capital the to allocation,

opportunity believe a We are we set. close highly on eye in which we are that the the keeping markets operate fragmented, and

pipeline extensive an of have We opportunities services potential Security life for Safety and businesses. bolt-on

call the our over discuss I financial in to Kevin? more to would now detail. Kevin and hand outlook results like to

Thanks, and and operating to for full begin Russ. our year before fourth quarter Good the my our remarks by consolidated morning, everyone. results outlook. performance I'll segment-level reviewing turning

net driven billion by by pass-through labor an $X.X period. price XX, revenue costs and we months X/X organic growth was for on in by increased X strong Reported material was Net Safety and approximately to this organic with of Consistent hours. Safety and growth driven was acquisitions which approximately in volume, by year by in prior XX.X% basis of measure to by driven prior X%, ended driven quarters, billion X/X Services. This labor through Services. increased revenues the $X.X from completed revenues compared the XXXX December

for by service For and net monitoring our basis by year reported legacy period, increased growth in and this Approximately material Safety revenue prior the businesses from in by and XX.X% by billion by price X/X growth ended was $X.X was revenues and to December X/X organic by acquisitions Net costs and labor revenues XX, driven year Safety driven pass-through of Services. XX.X%, of driven volume. double-digit inspection, revenue XXXX, on compared Services. to the an in $X.X driven billion completed increased

X XX.X%, the margin an driven a service increase revenue. of to gross year improved prior XX, and and representing inspection Adjusted XXX-basis-point Services XXXX, December for ended acquisitions monitoring by the was mix period, compared in Safety months

the a XX, adjusted driven ended by reasons provided year, of to margin quarter. increase gross the fourth was the year representing primarily in XX.X%, XXX-basis-point For XXXX, December the prior compared review

XXXX, driven in of leverage margin EBITDA improved the XX-basis-point December XX, for volumes by ended Services. increase Adjusted XX.X%, X an and prior months was on inspection, the revenue and mix monitoring year, service to compared Safety representing a higher

EBITDA XXXX, consistent For adjusted was adjusted year the XX, EBITDA XX.X%. December year margin XX.X%, prior ended with of margin

by offset chain improved supply disruptions, were in an and inflation revenue inspection, and Margins mix monitoring mix on by and completed acquisitions, negatively service from higher volumes. leverage impacted

increase fourth and The accretion earnings for Safety representing driven the in per to diluted $X.XX, share from was prior was acquisitions. increase quarter year organic Adjusted the compared Services by growth strong period. a $X.XX

strong XX, year $X.XX, from a year organic accretion and per increase Services. period acquisitions representing the prior share from earnings growth and by driven Specialty For adjusted in ended was XXXX, $X.XX the Services December Safety diluted

I Services. our detail results for discuss more will Safety in now

compared from net For prior XXXX, prior completed inspection strong compared an XX.X% $XXX growth. acquisitions XXX% double-digit year monitoring the $X.X period, increased driven revenue months to in by by the basis a million the and revenues in increase on organic driven billion revenue. and XX, December period by to Services Net increased organic reported X year service revenues by Safety to ended

For by in by XXXX, on and in reported revenues quarter. $X.X net Safety increased revenues period, basis review the net year increased the provided to compared fourth year the to reasons ended prior billion organic December Services XX, driven XX.X%, of an XXX% $X.X billion by

Adjusted gross prior compared and XX, selection. X completed of year, the December XXX-basis-point a for and initiatives by pricing XXXX impact margins acquisitions, driven ended representing was projects the XX.X%, disciplined increase to months customer

revenue, was the adjusted mix productivity. pricing in initiatives decline ended supply This gross year monitoring compared the margin completed XX.X% gross chain acquisitions. improved an and margin impact XX.X%, caused offset inflation to the was driven of December the inspection XXXX, and of For certain by adjusted prior which XX, year service disruptions, in and by

completed Adjusted by -- was the mix XX, months X to adjusted EBITDA December EBITDA driven for prior XX.X%, SG&A margin impacts margin primarily from ended acquisitions. year XXXX, XX.X% primarily of compared

the XXXX, of was completed from For ended year in December SG&A acquisitions by of adjusted prior the provided XX.X% compared margins. year impacts margin to XX%, gross adjusted and reasons driven EBITDA review mix margin XX, EBITDA

discuss months by QX Services X the businesses period, I timing Services in XX, XXXX. in our will performance and segment. more projects by driven Specialty for contracting declined now Specialty specialty reported year sales our a at million for to prior compared detail to XXXX in ended $XXX million $XXX December robust results X.X% of net the revenues

price to reported Specialty pass-through. businesses X.X% net increased the and in utility prior and billion fabrication billion For year an infrastructure, revenues our compared $X driven improved increase increase to by December and ended Services capture period, demand by year inflationary-driven revenue, service the at $X.X cost XXXX, of in XX,

due cost margin with margin gross the on December XXXX, are of was decline pressures This productivity arose representing which the service for XX.X% prior inflationary primarily by improved XX-basis-point driven declines, constraints and an months improved Adjusted compared productivity. select X jobs. year, XX, and ended mix an by offset was to revenue

and XX.X%, by and ended improved driven mix offset supply on disruptions, increase representing XXXX, inflation revenue. to was which of margins. gross year, a service improved the year factors pressure were adjusted prior productivity These XXX-basis-point chain by For caused compared downward XX, margin December the

was review in reasons Adjusted gross EBITDA XX.X%, X XXXX, margin for December to the year XXX-basis-point due representing the decline compared the the to months a margins. of provided XX, prior ended

leverage of margin For a increase prior due the EBITDA XX-basis-point compared adjusted was XXXX, year year XX.X%, December the volumes. ended to representing to XX, higher

cash to flow. Turning

saw As consistent expected relative in we and trends, to a free sequential strong with flow QX QX. cash historical performance

to our businesses. positive cash the increase ended our For This $XXX the on million, continued increase EBITDA contribution from XXXX, X $XXX acquisitions, $XX range in growth was driven million compared above was million discipline year period. $XXX of XX, prior by and capital adjusted the million focus to and months previously strong an December free working guided flow representing legacy

For XXXX, flow cash $XXX the year ended XX%. our was XX, free adjusted was approximately adjusted flow cash free million, December and conversion

our XXXX, the was XX, ratio was X.Xx weighted of with December of our earliest debt net average adjusted As XXXX. in to and maturity years over X maturity debt the EBITDA

X part near X deleveraging XXXX we we of target down to January and year. of plan, move our as paid annually stated million debt X.Xx, We cash year-end turn XXXX. our we deleveraging $XXX remain this to in on As of of at approximately laser-focused long-term achieve towards expect generation long-term which

will discuss outlook XXXX. our I now for

inspection relentless on and confident robust even to and backlog that are if higher-margin look growing us revenue our monitoring we continues structure with to environment well be combined As positions prosper required we to variable volatile. service the macro ahead our statutorily XXXX, focus cost

organic As February in press net release, on growth net billion, stated historical our we representing believe in an with revenues line basis, in XX that revenues $X.XX XXXX performance. billion range $X.X our between to will for

will $X.XX We to exchange QX. current revenues billion. FX $X.XX on in Based billion to expect a QX be headwind rates, net remain

currency growth a represents guidance X% X% constant this QX basis. of on So organic a to

inspection, by improved monitoring For $XXX strong our EBITDA opportunities; service global goal an deliver XXXX, we to margin scale. procurement achieving mix through leveraging XX% confident We of and adjusted expansion. remain expect in in capture savings; EBITDA, $XXX million on value revenue; plus margin our adjusted and million XXXX to

to We We to of constant to estimate related the adjusted line, Not will easier costs the represents a also recognize they million and help for to X% which the $XXX but million reduce mix. these we bottom Chubb program growth in restructuring be only of between XX% organic will team XXXX. currency significantly $XX expect that it million to QX EBITDA growth and $XXX $XX customers million, organizational on focus driving on making restructuring actions will organic basis. complexity, restructuring service to

and million expense interest year, anticipate for how rates we QX. the through move XXXX between $XXX be million $XX million on approximately to Depending for $XX interest and

expect XXXX We depreciation to approximately approximately capital be for $XX million expenditures be and to million. $XX

adjusted average for diluted approximately remains be share XX%, effective expect approximately Our to and adjusted we tax rate million. our count weighted XXXX XXX

at free arrive to or flow XX%. expect an We cash for above XXXX at adjusted conversion

of For which years adjusted be QX, flow we free cash line expect to in the conversion and flat, prior flows. cash seasonality is consistent with our with

over the turn now I'll Jim. call to

APi company's substantial robust of integration that Chubb, XXXX. everybody. headwinds development Thanks, multiyear double-digit net organic year culmination the was flow. natural of produce the and offset for performance APi improvement cash what a and Kevin. allowed of and in continued acquisition business the in Good the plan another fourth generate the to morning, outstanding free earnings to ability combined quarter record again APi's continued The in revenues for was with growth strong

we guidance in last week across our balanced for gave we strong XXXX, have the platform. reflected momentum global As

macro and staying Our continue execution, to focused on historically leaders continue mitigate build operational strong challenges excellence. are on to

As all great us, confidence we're the business you heard of have have and heading. in the we direction

We long-term value to to focused shareholder on and creation value adaptive targets. focusing create remain sustainable agile, by will needed as continue

reduction our to our in our adjusted excited ahead by the opportunities recent the strategic adjusted targeted in as of term is X leverage plan. Everyone XXXX to free growth, and supplemented $XXX mentioned, debt. cash year XX%, by execute achieve These of near on ability which, XXXX, organic margins net loan million about to include we year-end ratio of EBITDA X.Xx, XX% solid expect conversion Kevin targeted flow and

to call I'd turn back and now Russ operator like over the to the Q&A. for

take Kathryn Instructions]. Thompson question Thompson a [Operator from of We'll Group. Research

a across be inflation an of Really rationalization detail whether your a give from looking pricing categories that terms won't for X/X more in more you're you to bit services labor. XXXX, it or growth for in obvious little in give Just little volume being materials some what X/X chain, have in color given price material could and and also, cases, just if able certain is seeing outlook, labor hours? and the of pricing raw of value like some backdrop, bit

Kathryn, that the in into a we to there forward our through business thanks start bit a been we that price for sticky taking And of quite this there's done we've join -- feel we like sustainable in Well, and inflationary taking price period. question. able far the march business call job take feel good time difficult I very to I would saying a XXXX. thus that as has morning. the is the your by very

X still talked the, just because hot-rolled dramatic inflation we last we past in customers, so prices mean, in over about coil to so fair months, sure much monitor to we've take latter we But the how pipe the we've over seeing again. businesses on And to price. decrease buy we've that, we We're to seen -- taking say, our course make continue -- taking the pipe. sure continue We the appropriate. of but calls, half watch I And XXXX. a make our want want to really we with prices focus and pricing continue up closely pick in of we we're where that price business. seen we -- saw

reset union. to North number with feel when a and is labor our we them customers, for of perspective labor labor to us visibility one think of both adjust a in union is in X. very cost. there's us be there's our natural union, escalation That you wage to take on the Typically, side stability pricing into the right -- America, our And the business. a about and April being our primarily material Especially for and agreements the of our force price spring, number around from time advantages a usually of

I the think X/X inspection grow our and at next we a in of to approximately price, plan year. our it organic of as on came volume, service Kevin volume came by move -- and of continue of double-digit So his inspections approximately clip growth, said this to it side. is we remarks into from X/X that Most that from --

we of moderating X/X, But a would you'll suspect price half So our business. across year, see aspect take I the of every in bit. continuing latter X/X little to the that are

follow-up And right. one question. just All Great.

Given the a general about could that just business is, perhaps not on conservatism, stance behavior the you businesses be closed, but But as and still understand model of companies concerns any would changing you seen year sign wise indication greater around your give their given recession-resistant. concerns given the that the are there if What recession maybe some type of indicators of in -- there's economic fringes, more recession-proof, that behavior economy. conservative terms in any a your of backdrop? have changes any of

it we're mean, I looking of XXXX paranoid see into haven't you backlog what now, adjust at in from business, a we're that that perspective. that our affects in opportunity strong business. you say seen the we quickly well I carried economy I in would that's Well, position a what any as really would business, an as naturally right if we sort by the pipeline sure to a productively demonstrated we tell -- we're in we downturn to our that I -- make see always means and business would and that the the tell which call as that

the years. resilient serve that and that end been you tell markets number last of markets matter, the to also and they end would I continue have as over strong be we

bill in lastly, that now. own then a at and concerns of the infrastructure couldn't bill, already would of Some potentially the some way fueled doing the than its number say better right by time of where there's I the fueled And by business, at looking things it's different be about and optimizing Europe, Western that's we are and additive really to that we're restructuring a chip business.

variable We've optimistic. our remain -- we a got but of by XX% nature. structure is -- So cost

adjust. So we adjust, have to we'll

question Our Bank from Obin Andrew is America. of next of

know months? sound Ridley-Lane David tough performance XX be how chain you is meaningful will last supply Andrew. think And for basis but impact about in of and back at This over in How it's XX, when to the fewer for the XXXX, disruptions on has reasonable? quantify, disruption points cost least XXXX? couple been you I

So -- Kevin. David, this is

out on ways of when you chain teams I'll The with remain supply Things are business say, inflation our categories, disruption in battling the still, and that. supply through talk not So woods yet. in and chain disruption, about two certain XXXX. first, backlog still we impacted our in we're

as comes side, inflation pass-through about we've referenced of obviously, that that margin the talking should get XXXX, in the that been some We back. drag. On a we price margin down We've was that. believe

may pretty chain can there which lack disruptions On productivity that supply for companies our for there's disruptions, the the us. in productivity our significant also we supply working of but imagine material had places other issues causes and side, business, just where caused too just chain have not availability you business, work,

saw XXXX in I'll it would through works XXXX. we as supply the move improvements issues, coming we're productivity areas as anticipate seeing other to its into well improve. chain chain, as we say, supply the in moderate the we productivity And on start the through So things side. margins in as productivity

And a quick as follow-up.

is as the on cetera? Just demand et health major kind that mentioned you're a strong serving, care, you just markets among commercial, how the you like end the could end view of markets, give industrial,

Depending upon David, look the the dollars the and I I spending infrastructure care really when how build, infrastructure to an flow strong. data system. mean mean, is mean, are. starting center what how just strong. those say you into they semiconductor remains at strong, really you Health do remains very indication strong very are of you

and impact things, into broadband access going some on seeing a You're positive the rural like are that, federal having aid things business. that

of lot are have interest of developer-led our don't whether to a rising a type hospitality. lot really going do move exposure We in rates think with like on opportunities general, markets their that those retail forward some I have of negative We can strong. work. a are project-related to don't project effect So end developers

So plus us. for that's a

have positive a residential, including multifamily little very for We is exposure housing, us. to which

I us. that a difference we've made general, for in the end So focus had right has think on the markets

our Barclays. We'll Julian next from Mitchell of question take

This is wanted Patel-O'Connor are talk on for XXXX Chubb I ask Kiran Maybe Mitchell. are how your in you for what Julian to you how much XXXX? about expectations Can synergies. just realized and progressing? these the on synergies realized in

Chubb Yes. November. Kiran, in From Kevin. it this about is a we talked synergy standpoint,

was So step our to XXXX $XX restructuring back, in charge approximately million.

$XX on of saw we charge We As call, anticipate million savings We anticipate The approximately in to $X XXXX to took XXXX come through XXXX. restructuring million that I we the the million well. actions in did fruit in bear said in $XX as million associated with come $XX to XXXX. of remainder through. in $XX that million the

charges half with and those And savings initiatives, occur most similar come actions expect will in to to the of to XXXX start XXXX. back the the the later we that, of respect With XXXX in in, year. to

do just it. backlog backlog was And then noted Or you growth all? XXXX. expect with sales a you expect that the orders I steady I X% in material to of the remain Do portion on to up Got backlog. one at burn through the had guys the follow-up year? through you saw

Yes.

we'll the the half we the move see then of of first the in as we'll the fourth through the year. of -- course year, and is backlog build end what towards will typically, backlog we burn next quarter over So we see

of if end down, it QX the through look you at from when us. for is which year, backlog at basis, look up. slightly it's year-on-year -- our a So of you on end sequentially the normal But it's XXX% the

of a to first as is would in not would because selection, that from margins XXXX. more And us the started And our by. reminded actually we it the that greatest the we metric we bit to measure when that's work the we through project backlog shrink being selection to have because talking processes us going little seeing we it -- customer with everybody we mind we're our with backlog pursue. demonstrate it actually better wouldn't and backlog, about quality work a that, And disciplined that way show the have

is in we good robust. a we So that through see our proposals backlog really very remains with have and coming the funnel shape, our that the system

Our is from next Snyder Chris UBS. of question

to half of margins. 'XX whether of basis per kind of If want year after. midpoint, look like sounds kind XXX color some is back 'XX of points EBITDA kind the implies annum the you on it year-on-year. the synergies at what And or Can some it's driving post of XX on the so provide weighted? points up at 'XX, some just at maybe of that like up the productivity reacceleration, Chubb are commentary kind guidance then on up follow I or least with prior target XX% I basis seems the it margin

can Chris. I that, Yes, take

the talked guide to be at the of correct respect drivers I and look with year when in the be think you about primary XXXX, stickiness the primarily So is there to a project margin directionally And focus through, November. think we to there at I value pricing expansion, I on expectation the your in midpoint, that that what were be, we going gross math talked -- our Russ last that continued margin capture the has referenced it of pricing that the I the business. comes going seems pass margin And about earlier and on to it's in is drag able down, of should will XXXX, if guess, which earlier was while was back. component it the our on call. get of pass-through price we some XXXX, And then our delivery of continued opportunities full our our call,

high drivers something sorry, you of the of what always does very And behalf for what talk follow-up, about economy, whether of -- expansion. of base, of bit which the little level opportunity investment kind being maybe U.S. provide? kind think it's about is we means a of the of government. capacity I kind think here We're your reshoring, or stimulus then Can on seeing into of of for the kind influx a more thematic. infrastructure kind business? Kind kind -- an that the installed of that bills

that on in I they very, that other I different robust. and folks, the my very like on and things spending reshoring think and Well, of some with have level the two going about immediately Micron of of of the I world the the jumps space mean, brain going things. mean, see kind is Intels that, to activity the and like United semiconductor when and those capital States you

to we would robust I firms and don't sure like that our a to very And ours we sure are so customers have that it's that's being opportunity resources overextend we actually the these that well. capacity we're do able sophisticated disciplined important. that very have something to make and high-quality product project-related the pursue, deliver say do and that do And end make is

So in overextend we've disciplined those been don't that really spaces. making in sure we

would in whole infrastructure about opportunities more from And that pursuing. of infrastructure a concept think be lot a tide that rising are will I the bill, interested funded bill think by about floats of the When boats. it we I not things be all project-related the the

increase to interested some opportunities, However, to and us a in is our are our pricing, with it ultimately to in industry that margins. share, more in those space the benefit for customers us. the improve that. And pursue they to creates related our take peers our existing competitors pursuing And industry as of

of But a with at a is that our spending federal in the Services of driver scheme in revenue segment. broadband of Specialty it's couple real aids moving something and our The business forward our things, not specifically huge businesses. government the

next Our is from Kaplowitz Citibank. Andy of question

can work, us in Are without in Europe Andy. seeing think nature This (inaudible) think on in there? is economic what (inaudible) you recovery China? of you step-up you're of as guidance Can you for update given activities we significant a conditions? behalf baking to the a in XXXX on of get Or even your you your and what regions? And economic your guidance, these is

on being Asia. conditions the as confidence see Western have to Well, that we in forward I mean, in based we able obviously, both that well as guidance put Europe deliver we in

actual in small. China presence Our is

impressed is activity in was quality nice visiting our team in the Kong there the a with there It's business well. strong. had I of just is of very mid-January. them really We and performing good it. in level opportunities a of seeing seeing super remains And good actually very marketplace the front in fortune very team robust the And the they're Hong have of that that team.

to that we're on. we to slowdown. I relates would that it the -- for have was addition And earlier. other As color one he White in that end Europe, about point which be call, place end the a them again, and I seen Western Andrew is he the base to good that add focused markets talked would really not on if say just would pharmaceutical, the a I markets

general. But the kind I we're through optimization as relates now, also in to mentioned going rightsizing and business a of that right project it

between Western a overlap States activities and integration related on going Benelux the Fire Chubb, some previous have with we with to made area. acquisition specifically We

optimized XX% rightsized opportunity get that that of you of would and business provides inspection right And over revenue monitoring. their I thing last and now. now point us right that the Chubb All then is from comes service for that great to to

from perspective, place. that when so a really business is And about -- in good a from think resiliency is really you a it

did guidance following that, for And you business XX% X% of Very have what margins? like I helpful. on you long-term plus you for the quantify in Chubb. X% and in like also highlighted for margin. And strong growth that Can around growth organic EBITDA was? up terms XXXX to what mean

in So think we to XX%-plus and XXXX, margin range towards progress we that that target? expect growth of as should

us optimize on business. the purposeful break have in we I -- that out. in to make hold sure you the that to information don't our continue to customer X% on count selection of fact taking we we is shared of advantage want you XXXX point the some organic and out November trying Chubb We business about as investor of at size we to some Well, front part don't their back right some we we to opportunities to in that that are that you should meeting, and X% want separately. in just But results the growth but break can also

that of specifically know going you achieve chubs we and we are organic margin our are in we goals share margin expansion So I think sustain that business that growth confident that to be different by expansion level XXXX XX%. goal

We have line good sight good of path and into that.

that and to to Got helps Can and progress it. [ph] you XX elaborate talked XX% different you yours? step with there up the improvement FCF the here. in target you made eventually And about that one of on you have last one, levels get conversion the

Kevin. Piyush sure. Good is morning. this Yes,

because that working in the as first was it year, business so now. talked we choppy So amount going specialty a there about in is we working XXXX of we seasonality significant back. rate look this that that But XXXX so got flow cash back QX of half half especially started this and remainder focus conversion was down capital exited demand in getting to strong chain stepped as you working results the as free invested Traditionally we have have capital the business to anticipate QX. in as what rate we and year still did, half we year we are XXXX investment they XXXX discussed rate our saw just supply forward back in when and and XXXX we [indiscernible] out capital year of there. our the have to in strong year of investment the We only and the our trying think this in and we a exited working customer as about we conversion,

improvement XXXX. are further to that goal towards beyond we cash think capital continue in working to We related free stock in to projects associated continued business and the the our and other with focus are business needs drivers leverage to business. obviously our it but on service our interest November focus XX% going our growth drive of to then be about we service When and expect XXXX that stepping conversion on flow of

is Wittmann Andy from next Our of Baird. question

Your is open. line

in be top guess that double that for least your going presumably in little the last inspection assumption specific I for can would I low would the commentary dig safety line on your inside single bit think to comments Heard growth you segment, year on a to just to business least wanted I wanted should means any at in if closer to that specialty that total the digits not inflation digits. the at I flat I talk of about volume that’s helpful understand imply would specialty the single single that low be given safety compared guess, would and if your up digits double revenue X monitoring is context. specialty guidance more to here. going which end market maybe service guess to maybe digits and digit I the segment be correct is of have a of outlook specialty business just

is This this. of will I take stat Kevin. a

about some it work billing that talked relevant as to and and of continue the a on at project I those You are on business they are to opportunity be focus projects see our side right earnings of to would customer specialty to XXXX specialty implication what in bit little think you correct market and underlying seems see we you out service chip and laid business math of going safety digit so and some guidance that continue expecting I add will from right, in services growth, and and disciplined increased the we side that business. the in Russ XXXX XXXX as the year continued we that our too directionally in our its business through selection in end in that full look now growth infrastructure other the where we going what are disciplined in continue selection rates are double to what businesses

guess I about saw level was prepared some implications comment strength? robust the in about it. of fourth a you the sales you pipeline of remarks quarter. where talked market the there Can in Got a talk that that maybe end

talking Specific you are to specialty or about? Andy

robust Yes, the specialty at the comment fourth quarter. sales in of

difficult there about comp. year have we had was if prior script year we in the had specialty it Andy would current talked something in QX think in So I where QX

especially so if other of when reduced sort it which and you in against down that XX% a XXXX look I So various this of at X%. year is a rate QX, in year We organic because a at step to that XXXX QX specialty down of work prior look are QX its think comp and put you doing. more we in to business normally you XXXX see are run-out types in that actually of up growth going QX you up rate operating saw what a north generally and sequential saw difficult QX over a that step growth in did, little covid

to the here just day XX think business Okay. XX here. guess apologize so clarification I have wondering million I one I confusion million. was change think for were analyst when didn’t the the that. million I sales driving $XX must new I restructuring misheard am just At expenses what that? at that's $XX heard to thought am I on so sorry targeted my I XXXX I sales for your another here. part I am I revenue, that million was hearing

how would XXXX. has thinking were and I still the our XXXX through sort to program in about say look when not overall right. you so in That's we it years. thinking versus actions changed the In through of wanted November, we take are we November

accelerated in hoping with that size accelerating more XXXX. in we we I are well. think but years November about what the we we that as talked sequencing coming around saw anticipating guidance are that overall same we still of clarity today into again in is for is Obviously program savings anticipated activity the the have so the

Got it.

XXXX XXXX number therefore should to is and the expected So lower? be be

from restructuring that's standpoint right. a Yes,

CJS from of Securities. is question Jon Tanwanteng next Our

a covered You lot already.

M&A, on pipeline wanted you ask there that. that are usual good out questions seeing Just to said my [indiscernible]

this opportunities would color paying out be expected more debt seeing to Just Thanks. just down in or M&A pursuing four the into they in any smaller big evaluations balance just about what are new between environment and especially you helpful. or are there the historical, pipeline, six wondering times

are healthy on a make delever pension to sure obviously commitment to is that our there mean business. I Yes the delivering we

dollars and in M&A are a we have the our to at going really into for our we how where looking the cash flow a at that's levels for expand helpful We allocated as are forecasting similar year that we opportunities tuck-in fashion is. have factored is certain and us margins CapEx of right that this look focus

about the it tuck-in firms to We bringing of the from a of companies from when really are that continue and opportunity actually the the the they of that business the into acquire not would interested still lots are APi traditional As probably us are if doing what and just the so you we that on to truly want there. bring that, sale values we know that types in only price anybody of into we for M&A fit right are maximizing to its looking versus we get and their are culture, for right see the you family they focus the I businesses the fit mix. they for us to take types and talking we say see relates same for the want multiples we perspective especially strategy

this We we have can M&A on expand and in excited a that get are to to really space really move fiscal and right year. lot of forward the continue train that of with level

line expected And the that lumpiness synergy cadence year, to on be it just improvement throughout question it is a year? mostly an expected straight to is or there or this the realization quick

I to-date on a are say will and XX lumpy, have to we and think would bit that XXXX. think in XXXX lumpy XX charge say should XXXX that in that instruction be be little we we less I the early to to initiatives taken of one the tackle that going I that actions expect

be Lillie and question to our today. return closing session would call any happy for concludes to this And comments. answer I the for Jim

give it then Russ. to over happy to would I

the our to opportunity the and to recently I we support look like to your like shareholders would continued long remainder make to sure our their opportunity of the and well just to would as forward their that take of I as thank and updating throughout thank those for for to appreciate year. take support members progress ownership and business all So on who have joined also term I dedication of team our you us the APi our in

thank morning. you to taking the So call this join the again for time

does conference. today's conclude This

lines disconnect everyone You now your a may day. great and have