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Dec 31, 2021
APi Group Q4 2021 Earnings Report
APi Group reported a net revenue increase of 26% and an organic net revenue increase of 27% in Q4 2021, excluding Industrial Services.
Key Takeaways
APi Group reported strong Q4 2021 financial results, with a 26% increase in net revenues and a 27% increase in organic net revenues, excluding Industrial Services. The company's gross margin also expanded by 219 basis points. Adjusted diluted EPS was $0.29.
Reported net revenues increased by 26.1% to $1.1 billion.
Net revenues increased on an organic basis by 27.4%, excluding Industrial Services.
Reported gross margin was 24.6%, a 219 basis point increase.
Adjusted EBITDA was $115 million with an adjusted EBITDA margin of 10.3%.
APi Group
APi Group
APi Group Revenue by Segment
Revenue by Segment
Safety Services Revenue
CapyFin.comSpecialty Services Revenue
CapyFin.com Forward Guidance
APi Group is focused on delivering its three-year plan of continued healthy top-line growth and driving its adjusted EBITDA margin to 13%+ by 2025. The company expects to accomplish this while delivering on an average adjusted free cash flow conversion of approximately 80% over the coming three years and using the cash generated to reduce debt on average by one turn annually to return to its targeted long-term net debt to adjusted EBITDA ratio of 2.0x – 2.5x.
Positive Outlook
- Record backlog continues to build and provides a solid foundation for organic growth.
- Underlying demand in key end markets such as data centers, fulfillment and distribution centers, healthcare and high-tech remains robust.
- The acquisition of Chubb has enhanced the overall competitive position.
- Average project size in Safety Services is approximately $5,000 and the average duration of projects is very short, allowing for control of inflationary variables.
- Focus on real-time pricing and operational efficiency to ensure true costs are reflected in the services provided.
Challenges Ahead
- Business is not immune to macro marketplace disruptions related to supply chain disruptions.
- Business is not immune to macro marketplace disruptions related to inflationary cost pressures.
- Integration of Chubb will require investment in the growth of its platform and generating synergies across the combined platform.
- Net debt to adjusted EBITDA ratio was approximately 3.9x following the closing of the Chubb acquisition.
- The company will need to reduce debt on average by one turn annually to return to its targeted long-term net debt to adjusted EBITDA ratio of 2.0x – 2.5x.
Revenue & Expenses
Visualization of income flow from segment revenue to net income