ABM INDUSTRIES INC /DE/ Q4 FY2024 earnings call

• ABM finished the year with 3% organic revenue growth and adjusted EPS of $0.90. - Technical Solutions grew 16% organically in 2024, driven by microgrid service line expansion. - Aviation grew 12% in 2024 due to healthy travel markets and ABM Clean. - B&I outperformed expectations with organic revenue down less than 1%. - Introduced workforce productivity optimization tool, commercialized ABM Clean and ABM Performance Solutions, and invested in AI. - Repurchased $56 million of stock, raised dividend, and acquired Quality Uptime Services.

B&I: Revenue of $1 billion, declined less than 1%, resilient due to diversification. Aviation: Revenue $276.5 million, grew 11%, benefited from travel markets and ABM Clean. Manufacturing & Distribution (M&D): Revenue $387.7 million, declined by only 1%, above expectations. Education: Essentially flat. Technical Solutions: Revenue $257.4 million, grew 35% (25% organic, 10% from acquisition), strong microgrid and mission critical business.

• Expect adjusted EPS to be in the range of $3.60 to $3.80 and adjusted EBITDA margin to be between 6.3% and 6.5% in 2025. - B&I and M&D expected to return to growth in the back half of 2025. - Technical Solutions' microgrid business to remain healthy with a backlog exceeding $500 million.

• Macro economic uncertainties. - Potential policy changes affecting energy solutions and EV service lines. - Labor cost inflation. - Execution risks of ELEVATE initiatives.

Q: About M&D segment rebalancing, how was it better than expected?

A: Scott explains rebalancing was better than expected but not over yet, with two more phases to go in 2025 but optimistic as they've been consistent and picked up new sites.

Q: Technical Solutions remediation charge, what's the nature?

A: Earl explains it's a rare anomaly, a technical issue with a portion of a 2018 $50 million installation.

Q: Labor cost inflation, current state?

A: Scott talks about labor costs moderating, a 100 basis points stepdown from 2023, with union agreements settled, providing predictability.