On this page of StockholderLetter.com we present the latest annual shareholder letter from ABM INDUSTRIES INC /DE/ — ticker symbol ABM. Reading current and past ABM letters to shareholders can bring important insights into the investment thesis.
2023
Annual Report
Dear Stockholders,
I am pleased to report that ABM performed well in 2023, overcoming an unsettled macro-economic
environment to deliver year-over-year growth in revenue, net income, adjusted earnings per share,
and adjusted EBITDA. What made these accomplishments even more impressive was that they were
achieved in the face of significant labor-related challenges and a historically weak commercial real
estate market.
Our overall performance speaks to ABM   s ability to satisfy our clients, the scale of our operations, and
to our strong market positioning and diversified service line offerings, which have been purposefully
developed over time. It is also a testament to the talent and dedication of our more than 120,000 team
members who take our mission to make a difference and our purpose of taking care of people, spaces
and places to heart every day.
In fiscal 2023 we grew revenue 3.7% to $8.1 billion, including organic growth of 2.4% and 1.3% growth
from acquisitions. Net Income also increased in 2023, to $251.3 million and our adjusted EBITDA*
was up over 6% to $529.1 million. Adjusted EBITDA* margin was 6.8%, up 20 basis points over the
prior year, reflecting the benefits of our flexible labor model, tight cost controls, and price escalations,
all of which helped to mitigate much higher labor-related costs.
We thoughtfully returned capital to our stockholders in 2023 supported by our asset-light and cash
generative business model. Our Board of Directors raised our common stock dividend for the 57th
consecutive year. Of note, ABM is one of a select few companies that are recognized as    Dividend
Kings    for raising their annual dividend for at least 50 consecutive years. We also repurchased 3.3
million shares of ABM stock during the year which reduced our outstanding share count by
approximately 5%. We are proud of our financial performance and ability to return cash to
stockholders, which are a testament to our results-oriented focus in all market conditions, and to the
non-discretionary nature of the services we provide across a wide range of industries.
Our revenue growth was largely attributable to our end-market diversification, which proved to be
especially helpful as we overcame the weak commercial real estate market, particularly multi-tenant
commercial office space.
Amongst our segments, Aviation led the way, posting 15% revenue growth, propelled by robust leisure
and business travel activity, further boosted by new business wins including the newly renovated
Terminal B at LaGuardia Airport in New York. Aviation   s operating performance has been
extraordinary over the past couple of years and sits well above historical levels. Manufacturing &
Distribution (   M&D   ) and Education both grew revenue in the mid-single digits in 2023, with M&D   s
growth driven by expansion with existing clients and new wins in attractive target markets such as
biopharma and semiconductor manufacturing. Education executed well during the year, bringing new
clients on-line and benefitting from full classrooms.
The high single-digit revenue growth rate Technical Solutions (   ATS   ) posted was driven by the 2022
acquisition of RavenVolt, a leading provider of microgrid technologies and systems, including the fastgrowing battery energy storage systems segment of the market. We believe ATS, led by our exposure
to the microgrid market, has a clear growth path, driven by the proliferation of electric vehicles and the
need for energy resiliency as the existing U.S. electrical grid infrastructure continues to age and
become less reliable.
Business & Industry   s (   B&I   ) revenue was down less than 1% in 2023, which was a strong outcome
given the weak commercial real estate market, largely attributable to the rise of hybrid work models.
Benefitting from our flexible labor model and our strategic focus on better performing and better
occupied Class A buildings, ABM remains well-positioned to navigate the challenges in commercial
real estate. B&I   s performance was also aided by its service line and client diversification, as
engineering services and sub-markets like sports & entertainment and healthcare are influenced by
demand drivers that are far less correlated to office density.
In addition to our financial performance, we continued to make meaningful progress on our ELEVATE
initiatives during the year. In our Education segment, we successfully completed our financial close
process on our new cloud-based enterprise resource planning system and launched a new workforce
management solution at select pilot sites. This tool delivers an advanced approach to time and
attendance and scheduling, providing managers with improved visibility. We expect to complete the
rollout of this tool to Education in 2024 and further expand deployment thereafter.
We also completed the initial release of our new team member mobile application, Team Connect,
which is currently in the hands of a growing number of front-line ABM team members. Over the next
year this application will deliver on-demand training, safety moments, clock-in and clock-out
integrations, and task management features among other capabilities, driving efficiencies and
improved client outcomes. We could not be more excited about the positive impact that our ELEVATE
initiatives are having on our clients and team members. Our expectation is that these capabilities will
put more distance between us and the competition.
ABM also recently released its latest Environmental, Social and Governance (   ESG   ) Impact Report.
The report highlights the Company   s progress on its long-term commitments and solutions that enable
ABM and our clients to address ESG risks and opportunities. We all take great pride in our team   s
achievements on this journey and were pleased to be recognized by numerous organizations in their
performance rankings in 2023, including Barron   s Most Sustainable Companies and Newsweek   s Most
Responsible Companies.
Our vision and strategy for ABM remain consistent. We are focused on redefining the facilities
solutions industry through our investments in technology and the expansion of our service offerings,
buoyed by a substantial base of recurring revenue derived from over 20,000 clients. We have evolved
from our roots as a janitorial and engineering company to become a leading designer and provider of
integrated facilities solutions. These solutions improve our client   s operations and performance, and
we believe will facilitate greater client retention and cross sell opportunities, which in turn will drive
improved ABM financial performance and cash flows for the benefit of all our stakeholders.
In closing, I want to thank our team members for their contributions in making 2023 such a success
on multiple fronts. Their steadfast dedication to our clients, and to each other, enabled us to stay on
a clear course for sustained success.
Thank you for your continued interest and ongoing support of ABM.
Scott Salmirs
President and Chief Executive Officer
*Reconciliation of Non-GAAP to GAAP financial measures can be found in the back of this Annual Report.



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 • shareholder letter icon 2/15/2024 Letter Continued (Full PDF)
 • stockholder letter icon 2/10/2023 ABM Stockholder Letter
 • stockholder letter icon More "Business Services & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon ABM Benford's Law Stock Score = 90


ABM Shareholder/Stockholder Letter Transcript:

2023
Annual Report


Dear Stockholders,
I am pleased to report that ABM performed well in 2023, overcoming an unsettled macro-economic
environment to deliver year-over-year growth in revenue, net income, adjusted earnings per share,
and adjusted EBITDA. What made these accomplishments even more impressive was that they were
achieved in the face of significant labor-related challenges and a historically weak commercial real
estate market.
Our overall performance speaks to ABM   s ability to satisfy our clients, the scale of our operations, and
to our strong market positioning and diversified service line offerings, which have been purposefully
developed over time. It is also a testament to the talent and dedication of our more than 120,000 team
members who take our mission to make a difference and our purpose of taking care of people, spaces
and places to heart every day.
In fiscal 2023 we grew revenue 3.7% to $8.1 billion, including organic growth of 2.4% and 1.3% growth
from acquisitions. Net Income also increased in 2023, to $251.3 million and our adjusted EBITDA*
was up over 6% to $529.1 million. Adjusted EBITDA* margin was 6.8%, up 20 basis points over the
prior year, reflecting the benefits of our flexible labor model, tight cost controls, and price escalations,
all of which helped to mitigate much higher labor-related costs.
We thoughtfully returned capital to our stockholders in 2023 supported by our asset-light and cash
generative business model. Our Board of Directors raised our common stock dividend for the 57th
consecutive year. Of note, ABM is one of a select few companies that are recognized as    Dividend
Kings    for raising their annual dividend for at least 50 consecutive years. We also repurchased 3.3
million shares of ABM stock during the year which reduced our outstanding share count by
approximately 5%. We are proud of our financial performance and ability to return cash to
stockholders, which are a testament to our results-oriented focus in all market conditions, and to the
non-discretionary nature of the services we provide across a wide range of industries.
Our revenue growth was largely attributable to our end-market diversification, which proved to be
especially helpful as we overcame the weak commercial real estate market, particularly multi-tenant
commercial office space.
Amongst our segments, Aviation led the way, posting 15% revenue growth, propelled by robust leisure
and business travel activity, further boosted by new business wins including the newly renovated
Terminal B at LaGuardia Airport in New York. Aviation   s operating performance has been
extraordinary over the past couple of years and sits well above historical levels. Manufacturing &
Distribution (   M&D   ) and Education both grew revenue in the mid-single digits in 2023, with M&D   s
growth driven by expansion with existing clients and new wins in attractive target markets such as
biopharma and semiconductor manufacturing. Education executed well during the year, bringing new
clients on-line and benefitting from full classrooms.
The high single-digit revenue growth rate Technical Solutions (   ATS   ) posted was driven by the 2022
acquisition of RavenVolt, a leading provider of microgrid technologies and systems, including the fastgrowing battery energy storage systems segment of the market. We believe ATS, led by our exposure
to the microgrid market, has a clear growth path, driven by the proliferation of electric vehicles and the
need for energy resiliency as the existing U.S. electrical grid infrastructure continues to age and
become less reliable.
Business & Industry   s (   B&I   ) revenue was down less than 1% in 2023, which was a strong outcome
given the weak commercial real estate market, largely attributable to the rise of hybrid work models.
Benefitting from our flexible labor model and our strategic focus on better performing and better
occupied Class A buildings, ABM remains well-positioned to navigate the challenges in commercial
real estate. B&I   s performance was also aided by its service line and client diversification, as

engineering services and sub-markets like sports & entertainment and healthcare are influenced by
demand drivers that are far less correlated to office density.
In addition to our financial performance, we continued to make meaningful progress on our ELEVATE
initiatives during the year. In our Education segment, we successfully completed our financial close
process on our new cloud-based enterprise resource planning system and launched a new workforce
management solution at select pilot sites. This tool delivers an advanced approach to time and
attendance and scheduling, providing managers with improved visibility. We expect to complete the
rollout of this tool to Education in 2024 and further expand deployment thereafter.
We also completed the initial release of our new team member mobile application, Team Connect,
which is currently in the hands of a growing number of front-line ABM team members. Over the next
year this application will deliver on-demand training, safety moments, clock-in and clock-out
integrations, and task management features among other capabilities, driving efficiencies and
improved client outcomes. We could not be more excited about the positive impact that our ELEVATE
initiatives are having on our clients and team members. Our expectation is that these capabilities will
put more distance between us and the competition.
ABM also recently released its latest Environmental, Social and Governance (   ESG   ) Impact Report.
The report highlights the Company   s progress on its long-term commitments and solutions that enable
ABM and our clients to address ESG risks and opportunities. We all take great pride in our team   s
achievements on this journey and were pleased to be recognized by numerous organizations in their
performance rankings in 2023, including Barron   s Most Sustainable Companies and Newsweek   s Most
Responsible Companies.
Our vision and strategy for ABM remain consistent. We are focused on redefining the facilities
solutions industry through our investments in technology and the expansion of our service offerings,
buoyed by a substantial base of recurring revenue derived from over 20,000 clients. We have evolved
from our roots as a janitorial and engineering company to become a leading designer and provider of
integrated facilities solutions. These solutions improve our client   s operations and performance, and
we believe will facilitate greater client retention and cross sell opportunities, which in turn will drive
improved ABM financial performance and cash flows for the benefit of all our stakeholders.
In closing, I want to thank our team members for their contributions in making 2023 such a success
on multiple fronts. Their steadfast dedication to our clients, and to each other, enabled us to stay on
a clear course for sustained success.
Thank you for your continued interest and ongoing support of ABM.
Scott Salmirs
President and Chief Executive Officer
*Reconciliation of Non-GAAP to GAAP financial measures can be found in the back of this Annual Report.




66666666666666666666666666


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shareholder letter icon 2/15/2024 Letter Continued (Full PDF)
 

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