APi Group Corp (APG) 2023 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to APi Group's Third Quarter 2023 Financial Results Conference Call. (Operator Instructions) Please note, this call is being recorded. (Operator Instructions)

早安，女士們、先生們，歡迎參加 APi 集團 2023 年第三季財務業績電話會議。 （操作員說明）請注意，此通話正在錄音。 （操作員說明）

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

我現在將把電話轉給 APi 集團投資者關係副總裁 Adam Fee。請繼續。

Thank you. Good morning, everyone, and thank you for joining our third quarter 2023 earnings conference call. Joining me on the call today are Russ Becker, our President and CEO; Kevin Krumm, our Executive Vice President and Chief Financial Officer; and Sir Martin Franklin and Jim Lillie, our Board Co-Chairs.

謝謝。大家早安，感謝您參加我們的 2023 年第三季財報電話會議。今天和我一起參加電話會議的是我們的總裁兼執行長 Russ Becker； Kevin Krumm，我們的執行副總裁兼財務長；以及我們的董事會聯合主席馬丁·富蘭克林爵士和吉姆·利利爵士。

Before we begin, I would like to remind you that certain statements in the company's earnings press release announcement and on this call are forward-looking statements, which are based on 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 a guarantee 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.

在我們開始之前，我想提醒您，公司收益新聞稿公告和本次電話會議中的某些陳述均為前瞻性陳述，這些陳述基於對公司未來業績、預期事件或趨勢的預期、意圖和預測，以及其他不屬於歷史事實的事項。這些陳述並非對未來績效的保證，並受到已知和未知的風險、不確定性和其他因素的影響，這些因素可能導致實際結果與此類前瞻性陳述明示或暗示的結果有重大差異。

In our press release and filings with the SEC, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, November 2, and we undertake no obligation to update any forward-looking statements we may make, except as required by law.

在我們向美國證券交易委員會提交的新聞稿和文件中，我們詳細介紹了可能導致我們未來業績與預期不同的重大風險。我們的聲明截至今天（11 月 2 日），我們不承擔更新我們可能做出的任何前瞻性聲明的義務，除非法律要求。

As a reminder, we have posted a presentation detailing our third quarter financial performance on the Investor Relations page of our website. Our comments today will also include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our press release and our presentation.

謹此提醒，我們已在網站的投資者關係頁面上發布了一份詳細介紹第三季財務業績的簡報。我們今天的評論還將包括非公認會計準則財務指標和其他關鍵營運指標。有關這些項目的核對和其他資訊可以在我們的新聞稿和簡報中找到。

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

現在我很高興將電話轉給吉姆。

Sorry I was on mute. Thanks, Adam. APi delivered another strong quarter of results, including record third quarter net revenues, adjusted EBITDA and adjusted diluted earnings per share in the evolving macro and foreign exchange environment.

抱歉我當時處於靜音狀態。謝謝，亞當。 APi 再次公佈了強勁的季度業績，包括創紀錄的第三季淨收入、調整後的 EBITDA 以及在不斷變化的宏觀和外匯環境中調整後的稀釋每股收益。

During our Investor Day last year, Russ detailed our strategy of focusing on growing our service-based recurring revenue, while slowing revenue growth in select businesses to improve project selection. Our goal of evolving away from lower margin, higher risk opportunities, while focusing investments on service revenue expansion, is yielding the desired results. This strategy improves margins, while simultaneously reducing capital spending, which, in turn, drives free cash flow generation.

在去年的投資者日期間，拉斯詳細介紹了我們的策略，即專注於增加基於服務的經常性收入，同時減緩特定業務的收入成長以改善專案選擇。我們的目標是擺脫利潤率較低、風險較高的機會，同時將投資重點放在服務收入擴張上，而這一目標正在產生預期的結果。該策略提高了利潤率，同時減少了資本支出，從而推動了自由現金流的產生。

The benefits of these initiatives is shown in APi's consistently strong and improving financial results. These results are built on a strong foundation of driving the company's recurring revenue, services-focused business model, while expanding the financial discipline of the organization and its leadership team.

這些舉措的好處體現在 APi 持續強勁且不斷改善的財務表現中。這些成果建立在推動公司經常性收入、以服務為中心的業務模式的堅實基礎上，同時擴大了組織及其領導團隊的財務紀律。

The team's relentless efforts on adhering to our strategy are driving margin expansion and we believe there is a long runway of continued margin expansion beyond our established 2025 targets.

團隊堅持不懈地努力堅持我們的策略，正在推動利潤率擴張，我們相信，除了我們既定的 2025 年目標之外，利潤率持續擴張還有很長的路要走。

As we look forward, we believe our balance sheet is even stronger following our repricing and maturity extension, and we expect to end the year below our targeted net leverage ratio of 2.5x.

展望未來，我們相信，在重新定價和延長期限後，我們的資產負債表會更加強勁，我們預計今年年底的淨槓桿率將低於 2.5 倍的目標淨槓桿率。

Since becoming a public company, the team has enhanced their position as the #1 provider globally in the growing, highly fragmented fire and life safety services market. Going forward, we are excited to build on our track record of disciplined, predictable and thoughtful decisions regarding capital allocation, with a primary focus on tuck-in M&A at accretive multiples.

自成為上市公司以來，該團隊在不斷發展、高度分散的消防和生命安全服務市場中鞏固了其作為全球第一供應商的地位。展望未來，我們很高興能夠在資本配置方面做出嚴格、可預測和深思熟慮的決策，並專注於增值倍數的併購。

We have great confidence in the business, and we believe that our laser-focus on our long-term 13/60/80 value creation targets will generate continued exceptional performance through 2025 and beyond.

我們對業務充滿信心，我們相信，我們對長期 13/60/80 價值創造目標的高度關注將在 2025 年及以後產生持續的卓越績效。

As a reminder, our financial goals include long-term organic revenue growth above the industry average, adjusted EBITDA margin of 13% or more in 2025, long-term revenues of 60% from inspection, servicing and monitoring and long-term adjusted free cash flow conversion of 80%.

提醒一下，我們的財務目標包括高於行業平均水平的長期有機收入增長、2025 年調整後 EBITDA 利潤率達到 13% 或以上、60% 的長期收入來自檢查、服務和監控以及長期調整後的自由現金流量轉換率80%。

We look forward to continuing to update you on our positive momentum on margin expansion, service revenue growth, the opportunities for solid organic growth in 2024 and beyond, our visibility on bolt-on M&A at accretive multiples and our strong balance sheet.

我們期待繼續向您通報我們在利潤率擴張、服務收入增長、2024 年及以後實現穩健有機增長的機會、我們對增值倍數的補強併購的可見性以及我們強勁的資產負債表方面的積極勢頭。

With that, I'm pleased to turn the call over to Russ for further details.

因此，我很高興將電話轉給 Russ 以了解更多詳細資訊。

Thank you, Jim. Good morning, everyone. Thank you for taking the time to join our call this morning.

謝謝你，吉姆。大家，早安。感謝您今天早上抽出時間參加我們的電話會議。

We truly remain grateful for the hard work of our 29,000 leaders and their dedication to APi. The safety, health and well-being of each of our teammates is our #1 value. We will continue to invest in the men and women in the field as human beings, and provide each of them with training, leadership development and advancement opportunities because APi only wins when our branches and field leaders win.

我們衷心感謝 29,000 名領導者的辛勤工作以及他們對 APi 的奉獻。我們每個隊友的安全、健康和福祉是我們的第一價值觀。我們將繼續投資於該領域的男性和女性，並為他們每個人提供培訓、領導力發展和晉昇機會，因為只有當我們的分支機構和領域領導者獲勝時，APi 才會獲勝。

Before getting into our results and our outlook, I wanted to share our thoughts and support for our leaders in Lewiston, Maine, who were tragically impacted by the horrific shootings there last week. Thankfully, three of our APi teammates who were present at the bowling alley were not harmed.

在討論我們的結果和前景之前，我想分享我們對緬因州劉易斯頓領導人的想法和支持，他們上周遭受了可怕的槍擊事件的悲慘影響。值得慶幸的是，我們在保齡球館的三名 APi 隊友沒有受傷。

As I said, the health and safety of our team is our #1 priority, and this obviously extends beyond their workplace and into their personal lives as well. Jim mentioned our 13/60/80 long-term shareholder value creation model that you see, once again, included in our presentation.

正如我所說，我們團隊的健康和安全是我們的第一要務，這顯然超出了他們的工作場所，也延伸到了他們的個人生活中。 Jim 提到了我們的 13/60/80 長期股東價值創造模型，您會看到，該模型再次包含在我們的演示中。

As I continue to detail on our quarterly calls and at investor conferences, we are consistently focused on driving this strategy with a specific focus of achieving 13% adjusted EBITDA margins in 2025, while expanding the service recurring revenue mix of the business.

當我繼續在季度電話會議和投資者會議上詳細介紹時，我們始終致力於推動這項策略，具體重點是在2025 年實現13% 的調整後EBITDA 利潤率，同時擴大業務的服務經常性收入組合。

The team has made strong progress this year, executing on our margin expansion initiatives, which has been accomplished by focusing on the following items: pricing, improved inspection, service and monitoring revenue mix, disciplined customer and project selection; Chubb value capture, procurement, systems and scale; accretive M&A as well as selected business burning. And as I like to say, we can always just be better.

該團隊今年取得了巨大進展，執行了我們的利潤擴張計劃，這是透過專注於以下項目來實現的：定價、改進檢查、服務和監控收入組合、嚴格的客戶和專案選擇； Chubb 價值取得、採購、系統與規模；增值併購以及特定業務的燒毀。正如我想說的，我們總是可以變得更好。

We continue to see runway from these initiatives through 13% in 2025 and beyond. Turning to the quarter. I'm again pleased with the record results delivered by our global team as we continue to see solid demand for the services we offer. And this is key we are focused on picking the right opportunities to deploy our field leaders on the highest margin work.

我們預計這些舉措到 2025 年及以後的成長率將達到 13%。轉向季度。我再次對我們的全球團隊所取得的創紀錄成果感到滿意，因為我們繼續看到對我們提供的服務的強勁需求。這是關鍵，我們專注於選擇合適的機會，將我們的領域領導者部署到利潤率最高的工作中。

Net revenues grew organically by 1.3% in the quarter and by approximately 7% year-to-date, reaching $1.8 billion for the 3 months ended September 30, 2023. This lower organic growth in the quarter was primarily driven by our strategic focus on disciplined customer and project selection across the business, which drives improvement in margins and free cash flow conversion.

本季淨收入有機成長 1.3%，年初至今成長約 7%，截至 2023 年 9 月 30 日的三個月達到 18 億美元。本季有機成長較低的主要原因是我們對嚴格紀律的策略重點推動整個業務範圍內的客戶和專案選擇，從而推動利潤率和自由現金流轉換的改善。

In the quarter, organic growth in our services business remained strong at 7%, while our projects business contracted as expected by approximately 4%, as we continue to focus on disciplined customer and project selection to drive gross margin expansion.

本季度，我們的服務業務有機成長保持強勁，達到 7%，而我們的專案業務如預期收縮約 4%，因為我們繼續專注於嚴格的客戶和專案選擇，以推動毛利率擴張。

U.S. Life Safety once again posted solid organic growth of approximately 5% in the quarter, off a tough comp of 20%-plus organic growth in Q3 2022. This growth was led by consistent double-digit plus core inspection growth, which we have achieved in our U.S. Life Safety business each quarter since the start of the pandemic.

美國生命安全公司本季再次實現約5% 的穩健有機增長，2022 年第三季度有機增長超過20%。這一增長是由核心檢查持續兩位數以上的增長帶動的，我們已經實現了這一成長自大流行開始以來每季我們的美國生命安全業務。

Importantly, our service revenue grew organically by approximately 8% in the quarter, which both expands margins and strengthens the protective moat around the business. The strength in inspection growth and the subsequent service work pull-through continues to drive outsized growth in our higher-margin inspection, services and monitoring revenues when compared to our project revenues.

重要的是，我們的服務收入在本季度有機增長了約 8%，這不僅擴大了利潤率，也加強了業務的護城河。與我們的專案收入相比，檢查成長的力量和後續服務工作的拉動繼續推動我們利潤率較高的檢查、服務和監控收入的大幅成長。

On the project side, end markets still matter, and we are focused on choosing the right ones. We see continued momentum in data centers, semiconductor, electric vehicle manufacturing, health care and critical infrastructure with manufacturing and data center construction expected to increase by double digits in 2024, depending on what source you're looking at.

在專案方面，終端市場仍然很重要，我們專注於選擇正確的市場。我們看到資料中心、半導體、電動車製造、醫療保健和關鍵基礎設施的持續成長勢頭，預計到 2024 年，製造和資料中心建設將實現兩位數成長，具體取決於您所關注的來源。

Our backlog remains healthy and continues to grow in the areas we are not intentionally pruning. All of this gives us confidence we can continue to grow our projects business organically in a margin-enhancing way while still maintaining a focus on doing the right projects for the right customers in the right end markets.

我們的積壓工作保持健康，並且在我們沒有有意修剪的領域中繼續成長。所有這些都讓我們有信心能夠繼續以提高利潤的方式有機地發展我們的專案業務，同時仍然專注於在正確的終端市場為正確的客戶提供正確的專案。

In line with our strategic initiatives, we continue to see strong year-over-year improvements in adjusted gross margin in the third quarter, up 270 basis points. I am pleased with the leadership team's ongoing commitment to driving gross margin improvements through pricing activities, growing higher-margin service work and maintaining discipline in customer project and end market selection. The strong performance in gross margin led to third quarter adjusted EBITDA margin of 12.6%, representing margin expansion of 190 basis points.

根據我們的策略舉措，我們繼續看到第三季調整後毛利率年增強勁改善，成長了 270 個基點。我對領導團隊持續致力於透過定價活動、發展更高利潤的服務工作以及維持客戶專案和最終市場選擇的紀律來推動毛利率提高感到高興。毛利率的強勁表現導致第三季調整後 EBITDA 利潤率為 12.6%，利潤率擴大了 190 個基點。

I'd like to take a minute to express my appreciation to all of our union partnerships. APi is a partner to over 200 smaller local unions geographically spread across North America. These 200-plus relationships create a stable pipeline of highly skilled technicians as well as a high level of diversification. As a leading employer for many of these unions, we truly appreciate the opportunity to provide highly skilled field leaders, our career path at APi.

我想花一點時間向我們所有的工會夥伴關係表示感謝。 APi 是遍布北美地區 200 多個較小的地方工會的合作夥伴。這些 200 多家合作關係創造了穩定的高技能技術人員管道以及高水準的多元化。作為許多此類工會的領先雇主，我們非常感謝有機會為高技能的領域領導者提供我們在 APi 的職業道路。

Labor is our largest variable cost, and the labor rate visibility our union relationships provide allows APi to drive margin expansion through its pricing activities. Our relationships with our unions is very healthy, with fair long-term agreements in place that don't challenge our business the way the automotive industry has experienced.

勞動力是我們最大的可變成本，我們的工會關係提供的勞動力價格可見性使 APi 能夠透過其定價活動推動利潤率擴張。我們與工會的關係非常健康，簽訂了公平的長期協議，不會像汽車業那樣對我們的業務構成挑戰。

The international business continues to show progress with another quarter of organic growth. The business has delivered organic growth six straight quarters since our ownership, despite the transformation underway from a culture go-to-market and branch-led operational perspective.

國際業務持續取得進展，有機成長又一個季度。自我們收購以來，儘管從文化走向市場和分支機構主導的營運角度正在進行轉型，但該業務已連續六個季度實現有機成長。

Our leadership team in the international business continues to drive positive change and has done a great job with their focus on increasing profitability through driving price and by being intentional about targeting work that is additive to our achieving our 2025 13% adjusted EBITDA margin target.

我們的國際業務領導團隊繼續推動積極變革，並出色地完成了工作，他們專注於透過推動價格提高盈利能力，並有意識地開展有助於實現 2025 年 13% 調整後 EBITDA 利潤率目標的工作。

The opportunity in our international business continues to be substantial, and we are in the early innings of harnessing it. The brand equity, capabilities and technology in this business are differentiated, and we are actively addressing the operational efficiency of the organization through our $100 million value capture plan, which remains on track. I expect that we will provide a more detailed update on our integration progress in the fourth quarter.

我們的國際業務中的機會仍然很大，而且我們正處於利用它的早期階段。該業務的品牌資產、能力和技術各具特色，我們正在透過 1 億美元的價值獲取計劃積極提高組織的營運效率，該計劃仍在按計劃進行。我預計我們將在第四季度提供有關整合進展的更詳細的最新資訊。

Moving on to M&A. As you have seen, we have returned to accretive bolt-on M&A with five closed transactions in our Safety Services segment this year, while delivering on our deleveraging commitment. Our leadership team has a long and successful track record of integrating businesses from both a cultural and operational standpoint, in our pipeline of opportunities in line with what we consider to be appropriate, multiples is solid.

繼續進行併購。正如您所看到的，我們今年在安全服務部門完成了五筆交易，同時履行了去槓桿化承諾，恢復了增值性的補強併購。我們的領導團隊在從文化和營運角度整合業務方面擁有長期成功的記錄，在我們認為合適的機會管道中，倍數是可靠的。

Looking forward, we'll remain active buyers of businesses with the right culture, values and strategic fit at the right multiples with a near-term focus on U.S. -- on the U.S. life safety bolt-on acquisitions. The team continues their hard work, prioritizing the most attractive opportunities in our robust M&A pipeline.

展望未來，我們將繼續以正確的倍數積極收購具有正確文化、價值觀和戰略契合度的企業，近期重點關注美國——美國生命安全領域的補強收購。團隊繼續努力工作，優先考慮我們強大的併購管道中最具吸引力的機會。

And I remain excited to continue to add new businesses and their leaders to the APi family. We also continue to review our existing businesses where needed to evolve APi into an even lower CapEx asset-light business focused on high-margin statutorily mandated services, with an emphasis on our 13/60/80 value creation targets.

我仍然很高興能夠繼續在 APi 家族中添加新企業及其領導者。我們也將繼續審查我們現有的業務，以將 APi 發展為資本支出更低的輕資產業務，專注於高利潤的法定強制服務，重點是我們的 13/60/80 價值創造目標。

We don't spend much time talking about our ongoing reduction in capital spending as we shift the mix of the business. But to illustrate the improvement over the last 5 years, which we expect to continue, there is a new slide in our earnings presentation.

我們沒有花太多時間談論隨著業務結構的轉變而不斷減少的資本支出。但為了說明過去 5 年的改善（我們預計這種改善將持續下去），我們的收益簡報中出現了一張新幻燈片。

Additionally, we continue the intentional pruning of certain customers and loss-making contracts, primarily in our specialty services, HVAC and international businesses. This strategy has been a key driver of gross margin expansion, while also being a drag on reported organic growth.

此外，我們繼續有意削減某些客戶和虧損合同，主要是在我們的專業服務、暖通空調和國際業務領域。這項策略一直是毛利率擴張的關鍵驅動力，同時也拖累了報告的有機成長。

Looking ahead to 2024 and 2025, we have a solid backlog with incremental opportunities for growth at appropriate margins in the right end markets. Occasionally, the pruning necessary to achieve our long-term financial goals will also include operating businesses or branches.

展望 2024 年和 2025 年，我們擁有大量積壓訂單，並在合適的終端市場中以適當的利潤率實現成長的增量機會。有時，實現我們長期財務目標所需的修剪也包括經營業務或分公司。

Near the end of the quarter, APi reached an agreement to sell a traditional design-bid build, heavy civil contracting company without complementary service opportunity, which we felt was not consistent with our long-term targets. This business delivered $52 million of revenue to APi in the first 9 months of 2023.

接近季度末，APi 達成協議，出售一家傳統的設計投標建造、重型土木承包公司，沒有補充服務機會，我們認為這與我們的長期目標不一致。該業務在 2023 年前 9 個月為 APi 帶來了 5,200 萬美元的收入。

In summary, while we remain focused on executing in Q4 and into 2024, I am proud of our team and the record financial results achieved so far in 2023. Our field leaders continue to be the driving force of our performance. I'm grateful for what each of them has done to get us to where we are today.

總而言之，雖然我們仍然專注於第四季度和 2024 年的執行，但我為我們的團隊以及 2023 年迄今為止取得的創紀錄的財務業績感到自豪。我們的領域領導者仍然是我們業績的驅動力。我很感謝他們每個人為我們取得今天的成就所做的一切。

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

我現在想將電話轉交給凱文，更詳細地討論我們的財務表現和指導。凱文？

Thanks, Russ. Good morning, everyone. Reported revenues for the 3 months ended September 30, 2023, increased by 2.8% to $1.8 billion compared to $1.7 billion in the prior year period, driven by strong services revenue organic growth of 7% and modest benefits from favorable foreign currency exchange rates and M&A.

謝謝，拉斯。大家，早安。截至2023 年9 月30 日的三個月報告收入增長2.8%，達到18 億美元，而上年同期為17 億美元，這得益於7% 的強勁服務收入有機增長以及有利的外幣匯率和併購帶來的適度收益。

This was partially offset by our continued disciplined customer and project selection, lower material costs and customer project delays in specialty services, leading to a 4% decline in our project businesses versus the prior year.

這被我們持續嚴格的客戶和專案選擇、較低的材料成本以及專業服務方面的客戶專案延遲所部分抵消，導致我們的專案業務較上年下降 4%。

On an organic basis, revenues increased by 1.3%, off a 2022 comp of approximately 16% organic growth. Adjusted gross margin for the 3 months ended September 30, 2023, grew to 29%, representing a record gross margin and a 270-basis-point increase compared to the prior year period, driven by continued price increases, outsized growth in our higher-margin services revenue as well as margin expansion for both our projects and services businesses across both segments.

在有機基礎上，收入增長了 1.3%，而 2022 年有機增長約為 16%。截至 2023 年 9 月 30 日止 3 個月的調整後毛利率增長至 29%，毛利率創歷史新高，與去年同期相比增長 270 個基點，這主要得益於價格持續上漲、高端業務大幅增長保證金服務收入以及我們兩個部門的專案和服務業務的保證金擴張。

Adjusted EBITDA increased by 19.1% on a fixed currency basis for the 3 months ended September 30, 2023, with adjusted EBITDA margin coming in at 12.6%, representing a 190 basis point increase compared to the prior year period, primarily due to the factors impacting gross margin. This was partially offset by investments to support ongoing revenue growth and the continued investment in building our global capabilities and infrastructure.

截至 2023 年 9 月 30 日的三個月，調整後 EBITDA 以固定貨幣計算成長 19.1%，調整後 EBITDA 利潤率為 12.6%，較上年同期增加 190 個基點，主要是由於影響因素毛利率。這被支持持續收入成長的投資以及對建立我們的全球能力和基礎設施的持續投資所部分抵消。

I'm pleased to report that adjusted diluted earnings per share for the second quarter was $0.48, an representing a $0.11 or 30% increase compared to the prior year period. The increase was driven primarily by strong continued margin expansion in both safety and specialty services, partially offset by an increase in interest expense, representing a $0.01 headwind to adjusted diluted earnings per share in the quarter.

我很高興地報告，第二季調整後攤薄每股收益為 0.48 美元，比去年同期增長 0.11 美元，即 30%。這一增長主要是由於安全和專業服務的利潤率持續強勁增長所推動，部分被利息支出的增加所抵消，這意味著本季度調整後的攤薄每股收益減少了 0.01 美元。

I will now discuss our results in more detail for Safety Services. Safety Services reported revenues for the 3 months ended September 30, 2023, increased by 5.5% to $1.217 billion compared to $1.154 billion in the prior year period, driven by double-digit core inspection revenue growth, 8% organic growth in inspection service and monitoring in the U.S. Life Safety segment as well as modest benefits from favorable foreign currency exchange rates and M&A. This was partially offset by flat growth in the project business, driven by planned customer attrition in our international businesses, lower material costs and continued discipline in customer and project selection in our HVAC businesses.

我現在將更詳細地討論我們的安全服務結果。安全服務報告稱，截至2023 年9 月30 日的三個月收入增長了5.5%，達到12.17 億美元，而上年同期為11.54 億美元，這主要得益於兩位數的核心檢查收入增長以及檢查服務和監控領域8% 的有機成長在美國生命安全領域，以及從有利的外匯匯率和併購中獲得的適度收益。這部分被專案業務的平穩成長所抵消，這是由於我們國際業務中的計劃客戶流失、材料成本的降低以及我們暖通空調業務中客戶和專案選擇方面的持續紀律所推動的。

On an organic basis, Safety Services revenues increased by 3% off a 2022 comp of approximately 20% organic growth. Adjusted gross margin for the 3 months ended September 30, 2023, was 33.3%, representing a record high adjusted gross margin and a 260-basis-point increase compared to prior year adjusted gross margin driven by continued price increases, improved business mix and inspection service and monitoring revenue as well as expansion in both our projects and services businesses.

從有機成長來看，安全服務收入比 2022 年約 20% 的有機成長增加了 3%。截至2023年9月30日止三個月的調整後毛利率為33.3%，調整後毛利率創歷史新高，在價格持續上漲、業務組合改善和檢查推動下，調整後毛利率較上年同期增長260個基點服務和監控收入以及我們的專案和服務業務的擴展。

Adjusted EBITDA increased by 19.9% on a fixed currency basis for the 3 months ended September 30, 2023, and adjusted EBITDA margin was 13.9%, representing a 190-basis-point increase compared to the prior year period, primarily due to the factors impacting adjusted gross margin partially offset by investments made to support ongoing revenue growth.

截至 2023 年 9 月 30 日止三個月，調整後 EBITDA 以固定貨幣計算成長 19.9%，調整後 EBITDA 利潤率為 13.9%，較上年同期成長 190 個基點，主要是因為影響因素調整後的毛利率被支持持續收入成長的投資部分抵銷。

I will now discuss our results in more detail for our Specialty Services segment. In line with our plan to improve customer and project selection, Specialty Services reported revenues for the 3 months ended September 30, 2023, declined by 3.6% to $565 million (sic) [$569 million] compared to $590 million in the prior year period, driven by a 14% decline in project revenues due to the aforementioned customer -- continued disciplined customer and project selection, lower material costs and customer project delays, primarily in the fabrication business. This was partially offset by a 10% growth in our service revenues.

我現在將更詳細地討論我們的專業服務部門的結果。根據我們改善客戶和專案選擇的計劃，專業服務報告截至2023 年9 月30 日的3 個月收入下降3.6%，至5.65 億美元（原文如此）[5.69 億美元]，而去年同期為5.9 億美元。由於上述客戶持續嚴格的客戶和專案選擇、較低的材料成本和客戶專案延遲（主要是在製造業務中），專案收入下降了 14%。我們的服務收入成長了 10%，部分抵消了這一影響。

Adjusted gross margin for the 3 months ended September 30, 2023, was 19.7%, representing a 220-basis-point increase compared to the prior year period, driven primarily by disciplined customer and project selection, driving margin expansion in both our projects and services business.

截至2023 年9 月30 日止三個月的調整後毛利率為19.7%，較上年同期成長220 個基點，這主要得益於嚴格的客戶和專案選擇，推動了我們專案和服務的利潤率擴張商業。

Adjusted EBITDA increased by 12.2% for the 3 months ended September 30, 2023, and adjusted EBITDA margin was 14.6%, representing a 210-basis-point increase compared to the prior year period, primarily due to the factors impacting adjusted gross margin.

截至 2023 年 9 月 30 日止三個月，調整後 EBITDA 成長 12.2%，調整後 EBITDA 利潤率為 14.6%，較上年同期成長 210 個基點，主要是因為影響調整後毛利率的因素。

We continue to focus on driving free cash flow conversion improvements year-over-year, progressing towards our 2023 target of 65%-plus adjusted free cash flow conversion. For the 3 months ended September 30, 2023, adjusted free cash flow came in at $146 million, reflecting an adjusted free cash flow conversion of 65%.

我們繼續專注於推動自由現金流轉換逐年改善，朝著 2023 年調整後自由現金流轉換超過 65% 的目標邁進。截至 2023 年 9 月 30 日的三個月，調整後自由現金流為 1.46 億美元，反映出調整後自由現金流轉換率為 65%。

For the first 9 months of the year, adjusted free cash flow was $237 million, with conversion of 41%, representing an improvement of $55 million or 30% when compared to the first 9 months of 2022.

今年前 9 個月，調整後自由現金流為 2.37 億美元，轉換率為 41%，與 2022 年前 9 個月相比，增加了 5,500 萬美元，即 30%。

Free cash flow generation has been and continues to be a priority across APi, and our performance in the first 9 months of the year puts us in a position to achieve our 2023 guidance at or above 65% adjusted free cash flow conversion as we head into the fourth quarter, which, due to seasonality, is traditionally our strongest free cash flow conversion quarter.

自由現金流產生一直並將繼續成為 APi 的首要任務，今年前 9 個月的表現使我們能夠實現 2023 年調整後自由現金流轉換率達到 65% 或以上的指導目標第四季度，由於季節性原因，傳統上是我們自由現金流轉換最強的季度。

On October 11, we closed a successful repricing of our term loan due 2026 and 2029, achieving a 25 basis point reduction in our borrowing rate, with no change to our covenants, representing approximately $4 million of annual cash interest savings, all while extending our weighted average maturity.

10 月11 日，我們成功完成了2026 年和2029 年到期定期貸款的重新定價，在我們的契約沒有改變的情況下，我們的借款利率降低了25 個基點，相當於每年節省了約400 萬美元的現金利息，同時延長了我們的貸款期限。加權平均成熟度。

As part of the transaction, APi repaid $100 million of the term loan due 2026 and moved over $400 million of it to the term loan in 2029. We expect to pay down an additional $150 million of the term loan due 2026 in the fourth quarter, totaling approximately $450 million for the full year, further reducing cash interest expense on a go-forward basis. At the end of the year, we expect to have $355 million remaining on the term loan due 2026.

作為交易的一部分，APi 償還了1 億美元的2026 年到期定期貸款，並將其中超過4 億美元轉入2029 年的定期貸款。我們預計將在第四季度額外償還1.5 億美元的2026 年到期定期貸款，全年總計約 4.5 億美元，進一步減少現金利息支出。到今年年底，我們預計 2026 年到期的定期貸款剩餘 3.55 億美元。

At the end of the third quarter, our net debt to adjusted EBITDA was approximately 2.7x, even as we return to a margin accretive bolt-on M&A. We remain laser-focused on cash generation and deleveraging below our stated long-term target of 2.5x by year-end 2023. As we look forward to 2024, we expect to grow our adjusted free cash flow as well as improve our cash flow conversion, providing us a significant opportunity for value-enhancing capital deployment.

截至第三季末，我們的淨債務與調整後 EBITDA 比率約為 2.7 倍，即使我們恢復了利潤增值的附加併購。我們仍然專注於現金生成和去槓桿化，低於我們既定的到 2023 年底 2.5 倍的長期目標。展望 2024 年，我們預計將增加調整後的自由現金流並改善我們的現金流轉換，為我們提供了增值資本配置的重要機會。

I will now discuss our Q4 and full year 2023 guidance. As a reminder, our guidance is based on foreign exchange rates in effect at the time we report our quarterly results. During the third quarter, the dollar strengthened significantly diminishing the expected year-over-year tailwind from changes in foreign currency exchange rates.

我現在將討論我們的第四季和 2023 年全年指引。提醒一下，我們的指導是基於我們報告季度業績時有效的外匯匯率。第三季度，美元大幅走強，削弱了外幣匯率變動的預期年比推動作用。

In the second half of 2023. The difference between actual and forecast rates impacted reported sales by approximately $20 million in the third quarter. Based on current exchange rates, we now expect full year reported net revenues of $6.9 billion to $6.95 billion, down from $7.015 billion to $7.075 billion (sic) [$7.015 million to $7.075 million]. This represents organic net revenue growth of approximately 5% to 6%.

2023 年下半年。實際費率與預測費率之間的差異對第三季報告的銷售額產生了約 2000 萬美元的影響。根據目前匯率，我們目前預計全年報告淨收入為 69 億美元至 69.5 億美元，從 70.15 億美元至 70.75 億美元（原文如此）[701.5 萬美元至 707.5 萬美元]下降。這意味著有機淨收入成長約 5% 至 6%。

We are very pleased with the margin performance year-to-date, which gives us confidence to raise the bottom end of our prior full year guidance for adjusted EBITDA despite the foreign currency headwinds we saw during the quarter. We now expect full year adjusted EBITDA of $775 million to $785 million, up from $765 million to $785 million, which represents adjusted EBITDA growth of approximately 15% to 16% on a fixed currency basis and adjusted EBITDA margin of approximately 11.3% at the midpoint.

我們對今年迄今為止的利潤率表現非常滿意，這讓我們有信心提高之前全年調整後 EBITDA 指引的下限，儘管我們在本季度看到了外匯不利因素。我們目前預計全年調整後EBITDA 為7.75 億美元至7.85 億美元，高於7.65 億美元至7.85 億美元，這意味著以固定貨幣計算調整後EBITDA 成長約15% 至16%，調整後EBITDA 利潤率中點約為11.3% 。

In terms of the fourth quarter, we expect reported net revenues of $1.73 billion to $1.78 billion. This guidance represents organic net revenue growth of approximately 1% to 4%, and we expect fourth quarter adjusted EBITDA of $200 million to $210 million, which represents adjusted EBITDA growth of approximately 8% to 13% on a fixed currency basis.

就第四季而言，我們預計報告的淨收入為 17.3 億美元至 17.8 億美元。該指引代表有機淨收入成長約 1% 至 4%，我們預期第四季度調整後 EBITDA 為 2 億至 2.1 億美元，代表以固定貨幣計算調整後 EBITDA 成長約 8% 至 13%。

For 2023, we anticipate interest expense to be approximately [$147 million] based on fourth quarter interest expense of approximately $35 million. Depreciation will be approximately $80 million, capital expenditures to be approximately $90 million and adjusted effective cash tax rate to be approximately 23%, down from 24%. We expect our adjusted diluted weighted average share count for the fourth quarter to be approximately 273 million shares.

基於第四季約 3,500 萬美元的利息支出，我們預期 2023 年利息支出約為 [1.47 億美元]。折舊約為 8,000 萬美元，資本支出約 9,000 萬美元，調整後的有效現金稅率約為 23%，低於 24%。我們預計第四季調整後稀釋加權平均股數約為 2.73 億股。

As we look forward to 2024, while our outlook will be firmed up early in the year, we continue to expect high single-digit organic services revenue growth and continued expansion -- and continued margin expansion in our projects business as we focus on driving the right work for the right customers and the right end markets.

展望 2024 年，雖然我們的前景將在今年年初堅定，但我們仍然預計有機服務收入將實現高個位數增長並持續擴張，並且隨著我們專注於推動為正確的客戶和正確的終端市場提供正確的工作。

I'll now turn the call back over to Russ.

我現在將把電話轉回給 Russ。

Thank you, Kevin. APi continues to deliver strong margin expansion across both segments, resulting in strong third quarter margins and positioning the business to achieve 13% adjusted EBITDA margins in 2025.

謝謝你，凱文。 APi 繼續在兩個細分市場中實現強勁的利潤成長，從而實現強勁的第三季利潤，並使該業務在 2025 年實現 13% 的調整後 EBITDA 利潤。

As I said last call, I'm confident in our leaders' ability to build on historically strong execution by delivering consistent double-digit core inspection organic growth as well as consistently driving margin expansion across the business.

正如我在上次電話會議中所說，我對我們的領導者有能力通過實現持續兩位數的核心檢查有機增長以及持續推動整個業務的利潤率擴張來建立歷史上強大的執行力充滿信心。

We continue to deliver margin expansion by increasing higher-margin inspection service and monitoring revenue, pricing initiatives, operational improvements and a relentless focus on customer and project selection.

我們透過增加利潤率較高的檢驗服務、監控收入、定價措施、營運改善以及對客戶和專案選擇的不懈關注，繼續實現利潤率擴張。

We believe we can create sustainable shareholder value by focusing on our 13/60/80 long-term value creation targets, with a near-term laser focus on delivering adjusted EBITDA margins of 13% or more in 2025.

我們相信，透過專注於 13/60/80 的長期價值創造目標，我們可以創造可持續的股東價值，近期重點是在 2025 年實現 13% 或更高的調整後 EBITDA 利潤率。

As we look to 2024 and beyond, we have great confidence in the business, our backlog, our balance sheet and our ability to continue to evolve APi into an even lower CapEx asset-light business focused on high-margin statutorily mandated services.

展望 2024 年及以後，我們對業務、積壓訂單、資產負債表以及繼續將 APi 發展成為資本支出更低的輕資產業務、專注於高利潤法定服務的能力充滿信心。

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

這樣，我現在想將通話轉回給接線員並打開通話進行問答。

(Operator Instructions) Our first question comes from Andy Wittmann with Baird.

（操作員說明）我們的第一個問題來自 Baird 的 Andy Wittmann。

Russ, I thought maybe I'd have you comment a little bit on the project selection and the impacts that you have here in the quarter. Delivering the profit dollars as expected, I think, a really important point here.

Russ，我想也許我應該讓您對專案選擇以及您在本季產生的影響發表一些評論。我認為，按預期交付利潤是非常重要的一點。

Can you help us understand or quantify in some way the amount of work that you might be passing on versus maybe a couple of years ago? I don't know if that's the number of proposals that are given and then accepted or how you think about that. But something to help us found the real impact and the discipline you're driving in that strategy?

您能幫助我們理解或以某種方式量化您可能要傳遞的工作量與幾年前相比嗎？我不知道這是否是提出並接受的提案數量，或者您對此有何看法。但有什麼可以幫助我們發現您在該策略中所推動的真正影響力和紀律嗎？

Andy, thanks for taking the time to joining the call. I very much appreciate it. I have a saying that I use a lot. And volume is vanity. Profit is sanity. And I have really been super impressed with the discipline that we've shown from a project and customer selection, really across all facets of our business.

安迪，感謝您抽空參加通話。我非常感激。我有句話說，我用得很多。體積是虛榮的。利潤就是理智。我們在專案和客戶選擇中所表現出的紀律給我留下了深刻的印象，實際上是在我們業務的各個方面。

Quantifying would be really hard. I mean proposal activity is really, really strong. I think that as we highlighted the end markets that we're choosing to play in, the activity there is solid. I mean there's more opportunity than really, there's resources to deliver on. So -- but I would just not be able to quantify what we've been passing up.

量化真的很難。我的意思是提案活動非常非常強烈。我認為，當我們強調我們選擇參與的終端市場時，那裡的活動是穩固的。我的意思是，機會比實際上更多，有資源可以利用。所以——但我無法量化我們一直在放棄的東西。

And -- I mean I feel really good about our profitability of the business. I mean we've overdelivered EBITDA every quarter this year, raised guidance every quarter this year, and we feel really strong as we go into the fourth quarter that we'll be able to continue to do the same. So -- but I just -- I can't tell you enough how good I feel about it, but it's just hard for me to quantify it.

而且——我的意思是我對我們的業務盈利能力感覺非常好。我的意思是，我們今年每個季度都超額交付了 EBITDA，每個季度都提高了指導，而且當我們進入第四季度時，我們感覺非常強大，我們將能夠繼續做同樣的事情。所以——但我只是——我無法告訴你我對此的感覺有多好，但我很難量化它。

Well, maybe one way to address it is, based on the comment that you had in your prepared remarks, you said the backlog is for the project businesses, which is probably where the project and customer selection is the most impactful. You said the backlog is healthy, where you're not pruning. Can you talk about like directionally where the backlog is in total then so that we can have a better sense of the pruning impact?

好吧，也許解決這個問題的一種方法是，根據您在準備好的演講中的評論，您說積壓是針對專案業務的，這可能是專案和客戶選擇最有影響力的地方。你說積壓是健康的，你沒有修剪。您能否從方向上談談積壓的總數，以便我們可以更好地了解修剪影響？

Yes. Our backlog is probably slightly down from last year, but we have two MSAs that we're currently in negotiation to -- expect to finalize before the end of the year. So I would tell you that the reality of it is on a year-over-year basis, our backlog is essentially sitting right at the same spot that it was last year. It's just that the quality of the backlog continues to improve.

是的。我們的積壓工作可能比去年略有下降，但我們目前正在談判兩項管理服務協議，預計在今年年底前完成。所以我想告訴你，現實情況是，我們的積壓訂單基本上與去年處於同一位置。只是積壓的品質不斷提高。

Got it. Okay. Last question for me, if you would. I guess you mentioned in your script that some customer delays, I guess, impacted your productivity. And I guess maybe if you could just speak to some of those delays as to what's behind them? Delays, is it kind of economically driven? Is it interest rates things need to pencil? Is it supply chain, which we didn't hear a lot of on this call, but certainly has been a factor over the past couple of years. Maybe just a little color to enlighten us on that and then I'll be done.

知道了。好的。如果你願意的話，問我最後一個問題。我想您在腳本中提到，有些客戶的延誤影響了您的工作效率。我想也許你能談談其中一些延誤背後的原因嗎？延誤，是經濟驅動的嗎？是利率的事情需要鉛筆嗎？是供應鏈嗎，我們在這次電話會議上沒有聽到很多，但在過去幾年裡肯定是一個因素。也許只是一點點顏色來啟發我們，然後我就完成了。

So the delays were primarily in our fabrication business that sits inside specialty. And I would say that there were two fairly large delays. One was driven by a redesign with one of our data center customers. And the other one was driven by a land purchase for a large -- very large local retail customer. You can probably do the math and figure out who that is, that they had a land purchase fall through that -- where they were going to build a large distribution center and it delayed it.

因此，延誤主要發生在我們的專業製造業務。我想說有兩次相當大的延誤。其中之一是由我們的一位資料中心客戶的重新設計所推動的。另一個是由當地一家大型零售客戶購買土地所推動的。你也許可以計算一下，找出那是誰，他們買了一塊土地，他們本來打算在那裡建造一個大型配送中心，但結果推遲了。

The next question comes from Kathryn Thompson with Thompson Research Group.

下一個問題來自湯普森研究小組的凱瑟琳湯普森。

Just following on the theme, and we're hearing some other companies talk about the concept of the value over volume, which you have been in your journey already for much of this year and last year.

緊接著主題，我們聽到其他一些公司談論價值超過數量的概念，今年和去年的大部分時間你已經在你的旅程中了。

As you go down that path, it's not just bidding on projects better and smarter, but could you clarify, are you seeing any changes in mix to improve that overall margin quality? So in other words, are there certain areas or segments of inspection service that you've just decided as a firm, hey, this is -- this isn't worth it? And/or are there other areas where you are increasing focus because of favorable profitability?

當你沿著這條路走下去時，不僅僅是更好、更明智地競標項目，而且你能否澄清一下，你是否看到組合方面有任何變化來提高整體利潤品質？換句話說，作為一家公司，您是否只是決定檢查服務的某些領域或部分，嘿，這是——這不值得？和/或是否有其他領域由於良好的盈利能力而受到關注？

So Kathryn, no disrespect, but we do not use the word bid at APi.

凱瑟琳，無意冒犯，但我們在 APi 上不使用「出價」這個詞。

Yes. I understand.

是的。我明白。

If there's a word that I don't like, that would be #1 on my list. I have a few other ones I could share with you some time offline, but that would be one of them. And I would say that when I look at the businesses there, like international, we just have some poor performing customer contracts and things like that. So I'd say that the focus there is more around the customer.

如果有一個詞我不喜歡，它就會在我的清單中排名第一。我還有其他一些可以離線時與您分享的內容，但這就是其中之一。我想說，當我觀察那裡的業務時，例如國際業務，我們只是有一些表現不佳的客戶合約之類的。所以我想說，重點更多是圍繞著客戶。

And in certain cases, we've had to be aggressive about taking price under prior ownership. They weren't as focused on prices. We have been focused on price. And so there's a little bit of end market focus, and there's also an element of just customer focus when I think about our international business, and we continue to be able to grow that business organically even with some of that customer pruning that we've been doing.

在某些情況下，我們必須積極地根據先前的所有權定價。他們並不那麼關注價格。我們一直在關注價格。因此，當我考慮我們的國際業務時，有一點對終端市場的關注，也有一個以客戶為中心的因素，即使我們已經削減了一些客戶，我們仍然能夠有機地發展該業務。在做。

In specialty, I would say that it's more -- because our offerings in specialty are fairly diverse, I would say that just across the board, it's -- I like the end markets that we're in. So I don't think it's an end market focus. It's more about making sure that we're focused just on the right client that's going to value the services that we bring so that we can actually get paid a fair price for the work that we do.

在專業領域，我想說的是，因為我們在專業領域的產品相當多樣化，我想說，從整體上來說，我喜歡我們所處的終端市場。所以我認為這不是終端市場重點。更重要的是確保我們只專注於正確的客戶，他們會重視我們提供的服務，以便我們能夠為我們所做的工作真正獲得公平的報酬。

The reality of it is, is that if we wanted to turn the spigot on, we could turn the spigot on and we could do much more work than we are doing, but the margins just wouldn't be in the same place. And we would -- payment terms would be different than all that other stuff that comes with that.

現實情況是，如果我們想打開龍頭，我們可以打開龍頭，我們可以做比現在更多的工作，但利潤不會在同一個地方。我們會—付款條件將不同於隨之而來的所有其他東西。

And so for us, an element of this is being focused on payment terms and making sure that we're getting out in front of some of those things so that we can continue to focus on not only the 13%, but also on the 60% and the 80% free cash flow conversion, and that's a component of this as well.

因此，對我們來說，其中一個要素是專注於付款條件，並確保我們能夠領先於其中一些事情，以便我們不僅可以繼續關注 13%，還可以關注 60% % 和80% 的自由現金流轉換，這也是其中的一個組成部分。

And then when I think about our domestic safety business, I'd say there, it's all about end markets, and making sure that we're focused on the right place and really dedicating our resources to data centers, semiconductors, health care and those end markets. So it's a little bit different based on those three kind of buckets, but that's really how we're looking at it.

然後，當我想到我們的國內安全業務時，我會說，這一切都與終端市場有關，並確保我們專注於正確的地方，並真正將我們的資源投入到資料中心、半導體、醫療保健等領域。終端市場。因此，基於這三種類型的儲存桶，情況略有不同，但這確實是我們看待它的方式。

Sounds great. One follow-up. This is something that we're finding with other companies broadly and the construction value chain that -- with the mega projects and the more complex, not just construction, but ensuing service of certain metric projects, including data centers.

聽起來很棒。一項後續行動。這是我們在其他公司和建築價值鏈中廣泛發現的事情——大型項目和更複雜的項目，不僅僅是建築，還有包括資料中心在內的某些指標項目的後續服務。

You'll find that the end customer candidly just needs more complex needs, which means that there are only certain companies that are able to meet those needs. And so it's disproportionately benefiting certain types of companies versus others. Would you say that given the -- your overall range of service and high quality, are you able to win more because of complexity of projects?

你會發現最終客戶坦率地只需要更複雜的需求，這意味著只有某些公司能夠滿足這些需求。因此，與其他類型的公司相比，它為某些類型的公司帶來了不成比例的好處。您是否會說，考慮到您的整體服務範圍和高質量，您是否能夠因為專案的複雜性而贏得更多？

I would say that there's no question that the size and the magnitude and -- it's like I was on like one of our automotive customers' sites just a couple of weeks ago. And when I think about it from a complexity perspective, like I didn't think it was super complex, all right?

我想說，毫無疑問，其規模和規模，就像幾週前我還訪問過我們的汽車客戶網站一樣。當我從複雜性的角度思考它時，我並不認為它超級複雜，好嗎？

I mean I think that there's other end markets that are more complex. But what it is, is it's -- the scale is so great and the resources that it takes to manage and lead those types of projects is just totally different than what you would have seen, say, 10 years ago even.

我的意思是，我認為還有其他更複雜的終端市場。但它的本質是——規模如此之大，管理和領導這些類型的專案所需的資源與你所看到的完全不同，例如 10 年前。

And so the skill set that it takes to lead those types of project-related opportunities is just different, and it takes different types of people. And in a world where truly skilled labor is tight, you have to have the resources to be able to draw upon it.

因此，領導這些類型的專案相關機會所需的技能是不同的，並且需要不同類型的人。在一個真正熟練的勞動力緊張的世界裡，你必須擁有能夠利用它的資源。

So like on this particular opportunity, we had people from -- this was -- this project opportunity was in the Detroit area, and we had people that were coming up out of our South Bend, Indiana office and were supporting our team's efforts on this particular site.

因此，就像這個特殊的機會一樣，我們的人員來自——這是——這個專案機會位於底特律地區，我們的人員來自印第安納州南本德辦事處，支持我們團隊在這方面的努力特定站點。

And so you have to have some of those types of capabilities and the ability to draw on and plug the resources out of different components of your business to support those businesses. And the last thing that I would say there, Kathryn, is that we want to continue to have our project-related opportunities to come from the inspection service and monitoring relationships that we develop.

因此，您必須擁有其中一些類型的功能，以及利用和插入業務不同元件的資源來支援這些業務的能力。凱瑟琳，我要說的最後一件事是，我們希望繼續從我們開發的檢查服務和監控關係中獲得與專案相關的機會。

So we want to be in a situation where the relationship matters. And that when we're proposing on these large programs, it's not based on price. Because if they're going to base it on price, that's probably the fastest way you can get yourself in trouble on some of these larger project opportunities. I know I ran a little bit, I apologize.

所以我們希望處於一個關係很重要的情況。當我們對這些大型項目提出建議時，並不是基於價格。因為如果他們要以價格為基礎，這可能是您在一些較大的專案機會中給自己帶來麻煩的最快方法。我知道我跑了一點，我道歉。

The next question comes from Jon Tanwanteng with CJS Securities.

下一個問題來自 CJS 證券的 Jon Tanwanteng。

Really nice quarter and guidance. My first one is, you mentioned strength in a number of end markets, data centers, EVs, et cetera, which is all great. I was wondering, did you see any weakness in any segments or end markets? And have your consolidated growth expectations changed, if at all, especially if you prune some of these lower quality projects out of the pipeline?

非常好的季度和指導。我的第一個問題是，您提到了許多終端市場、資料中心、電動車等的實力，這都很棒。我想知道，您是否發現任何細分市場或終端市場有弱點？您的綜合成長預期是否發生了變化（如果有的話），特別是如果您將一些品質較低的項目從計劃中剔除？

Well, I mean, we've never really participated and played in real estate developer-led type project opportunities. Obviously, those -- from a project perspective, commercial office buildings, I mean under a tremendous amount of pressure. And again, for us, we're just fortunate that we really don't participate in those types of end markets.

嗯，我的意思是，我們從未真正參與和發揮過房地產開發商主導型專案的機會。顯然，從專案的角度來看，我的意思是商業辦公大樓承受著巨大的壓力。再說一次，對我們來說，我們很幸運，我們確實沒有參與這些​​類型的終端市場。

Your stuff like that some of the telecommunications companies are pulling back a little bit on their capital spending and stuff. It doesn't really impact us because, number one, we're diverse geographically. And number two, we don't take these large $500 million program. We're doing $30 million programs in different locations across the country. So it doesn't -- it really hasn't impacted our business.

像這樣的一些電信公司正在削減一些資本支出等。它並沒有真正影響我們，因為第一，我們在地理上是多樣化的。第二，我們不會接受這些耗資 5 億美元的大型計畫。我們正在全國各地開展耗資 3000 萬美元的計畫。所以它並沒有——它確實沒有影響我們的業務。

One of our data center customers went through a fairly substantial -- I mean I talked about it as it relates to impacting our fabrication business, but we also have the like safety work on that particular project. And so that impacted that component of our business. And they went through a fairly significant redesign on a lot of the data center work just because the cooling requirements have changed as it relates to their facilities.

我們的一個資料中心客戶經歷了相當大的影響——我的意思是我談論它是因為它與影響我們的製造業務有關，但我們在該特定項目上也有類似的安全工作。這影響了我們業務的這一部分。他們對許多資料中心工作進行了相當重大的重新設計，只是因為與其設施相關的冷卻要求發生了變化。

So I think that, in general, where the weakness is the greatest is in the commercial real estate marketplace. And there's going to be some weakness in retail in general. And you've seen some pullback from like Amazon with their distribution centers and things like that, but that's, again, not areas that we really had a high participation rate.

所以我認為，總的來說，最弱勢的是商業房地產市場。整體而言，零售業將會出現一些疲軟。你已經看到像亞馬遜這樣的配送中心和類似的東西有所撤退，但這又不是我們真正擁有高參與率的領域。

Okay. Great. And then just should we expect a bigger focus on international M&A as you improve the structure at Chubb? What would be the timing of that, number one? And is the pipeline of opportunities you see out there as good as what you see domestically in terms of valuation number of opportunities, all that stuff?

好的。偉大的。那麼，當您改善 Chubb 的結構時，我們是否應該期望更加關注國際併購？第一，具體時間是什麼？就機會的估值數量等方面而言，您在國外看到的機會管道是否與您在國內看到的一樣好？

So we've been really focused on the integration of the business. There's been some opportunities that have come across the transom that we've passed on. Some of that has to do with the distraction factor, and we want them to stay laser-focused on Chubb value capture plan of $100 million, which is on track. But the opportunities are equally as good in that market as they are here in the U.S. And I suspect that you'll see us get to be a little bit more active in the space as soon as next year.

因此，我們一直非常關注業務的整合。我們已經放棄了一些跨越橫樑的機會。其中一些與幹擾因素有關，我們希望他們繼續專注於 Chubb 1 億美元的價值捕獲計劃，該計劃正在按計劃進行。但該市場的機會與美國一樣好。我懷疑您最快明年就會看到我們在該領域更加活躍。

The next question comes from Andy Kaplowitz with Citi.

下一個問題來自花旗銀行的安迪·卡普洛維茨。

This is Natalia Bak on for Andy Kaplowitz. So I was just wondering if you could provide a little color regarding your progress on improving cash generation. You obviously are generating a lot more cash year-to-date and maintain their at or above 65% free cash flow conversion. And maybe if you could just provide a little color on supply chain conditions that you're seeing?

我是安迪·卡普洛維茨的納塔利婭·巴克。所以我只是想知道您是否可以提供一些有關您在改善現金產生方面的進展的資訊。顯然，今年迄今為止，您產生了更多現金，並保持了 65% 或以上的自由現金流轉換率。也許您能提供一些有關您所看到的供應鏈狀況的資訊嗎？

That's part of that question. [Andy], this is Kevin. It was supply chain, I think, if not, then you can correct me at the end. But -- so our cash flow profile continue to improve this year, both from an absolute delivery standpoint as well as a conversion standpoint.

這是這個問題的一部分。 [安迪]，這是凱文。我認為這是供應鏈，如果不是，那麼你可以最後糾正我。但是，無論是從絕對交付的角度還是從轉換的角度來看，我們的現金流狀況今年都在繼續改善。

As we started the year, we're laser focused primarily on working capital rate and to a lesser extent, CapEx. As we move through this year, the changes we made in the business that we've been talking about, whether it's a higher mix of service or continued disciplined customer and project selection are bearing fruit both in working capital rate on a year-to-date basis sort of vis-a-vis where we ended or vis-a-vis prior year as well as conversion.

今年伊始，我們主要關注營運資本率，其次是資本支出。今年，我們在業務中所做的改變，無論是更高的服務組合，還是持續嚴格的客戶和專案選擇，都在營運資本率上取得了成果。相對於我們結束的日期或相對於前一年以及轉換的日期基礎。

And from a supply chain standpoint, we are largely behind the impact of supply chain that we talked about last year in the first half of the year that drove a significant working capital rate investment.

從供應鏈的角度來看，我們在很大程度上支持去年上半年談到的供應鏈影響，推動了重大的營運資本率投資。

The next question comes from Parth Patel with JPMorgan.

下一個問題來自摩根大通的帕斯帕特爾。

In Specialty, organic growth was down in the quarter on a tough comp. What was pricing there? And was there any impact from commodities flowing through?

在特種產品領域，由於競爭激烈，本季有機成長有所下降。那裡的定價是多少？商品流經有沒有影響？

So in the Specialty business, we did not break out organic growth this quarter sort of volume versus price and price pass-through. The primary reason is, while we continue to get pricing on the service side of the business, the material cost deescalation that we saw year-on-year drove a significant revenue rate reduction in the quarter.

因此，在特種業務中，本季我們沒有實現銷售與價格和價格傳導的有機成長。主要原因是，雖然我們繼續獲得業務服務方面的定價，但我們看到的材料成本比去年同期下降導致本季營收率大幅下降。

So we faced year-on-year that material cost de-escalation drives a headwind at revenue rate, which is what you saw in the quarter in the Specialty business. So underlying, we continue to get pricing on the service side of that business. We just faced that headwind at revenue from material cost deescalation.

因此，我們面臨著同比材料成本下降對收入率造成不利影響的情況，這就是您在本季特種業務中看到的情況。因此，從根本上來說，我們繼續獲得該業務服務的定價。我們剛面臨材料成本下降所帶來的收入阻力。

Great. That's very helpful. And then just a follow-up. Can you give an update on some of your big union agreements. I think the last one was negotiated back in 2020. Just any update there?

偉大的。這非常有幫助。然後只是後續行動。您能否介紹一些大型工會協議的最新情況？我認為最後一項談判是在 2020 年進行的。有更新嗎？

Well, the largest union agreement that we have is with what they call the Road Fitters Local 669. I think we have another 18 months before that agreement will be renegotiated. We have no concerns about our ability to renegotiate that agreement and feel really, really, really good about it.

嗯，我們擁有的最大的工會協議是與他們所謂的 Road Fitters Local 669 達成的協議。我認為我們還有 18 個月的時間來重新談判協議。我們並不擔心我們重新談判該協議的能力，並且對此感覺非常非常非常好。

So there are some smaller ones that are coming up. And really, if you kind of cycle through them on every year there's different agreements to come up, but the biggest -- the largest one that we're signatory to comes up in 18 months, roughly.

因此，一些較小的項目即將出現。事實上，如果你每年都瀏覽這些協議，就會出現不同的協議，但最大的協議——我們簽署的最大的協議大約在 18 個月內出現。

It appears we have no further questions at this time. I will now turn the program back over to our presenters for any additional remarks.

目前看來我們沒有其他問題了。我現在將把節目交還給我們的主持人，以徵求補充意見。

Awesome. Thank you. In closing, I would like to again thank all of our team members for their continued support and dedication to the business. We believe our people are the foundation on which everything else is built. Without them, we do not exist.

驚人的。謝謝。最後，我要再次感謝我們所有團隊成員對業務的持續支持和奉獻。我們相信我們的員工是其他一切的基礎。沒有他們，我們就不存在。

I'd like to thank our shareholders, our long-term shareholders as well as those who have recently joined us for your support. We appreciate your ownership of APi, and we look forward to updating you on our progress throughout the remainder of the year. Thank you all for taking the time to join the call this morning, everybody.

我要感謝我們的股東、長期股東以及最近加入我們的股東的支持。我們感謝您對 APi 的所有權，並期待在今年剩餘時間內向您通報我們的最新進展。感謝大家今天早上抽空參加電話會議。

This does conclude today's program. Thank you for your participation. You may disconnect at any time.

今天的節目到此結束。感謝您的參與。您可以隨時斷開連線。