On this page of StockholderLetter.com we present the latest annual shareholder letter from APi Group Corp — ticker symbol APG. Reading current and past APG letters to shareholders can bring important insights into the investment thesis.

 •  4/29/2024 Letter Continued (Full PDF)
 •  4/28/2023 APG Stockholder Letter
 •  More "Construction" Category Stockholder Letters
 •  APG Benford's Law Stock Score = 77

APG Shareholder/Stockholder Letter Transcript:

2023 Annual Report
Building
Great
Leaders  

APi Group
Our Purpose
Building
Great Leaders  
Who We Are
Founded in 1926, APi is a market leading global provider of life safety, security, monitoring, and specialty services, with
revenue of over $6.9 billion. We are headquartered in New Brighton, Minnesota, operate in more than 20 countries, and have
a team of approximately 29,000 leaders. Our core and enduring purpose is Building Great Leaders  . We believe this purpose
creates an empowered, entrepreneurial atmosphere that facilitates organizational sharing of knowledge and best practices
enabling the development of integrated solutions and innovation.
We specialize in two business segments: Safety Services and Specialty Services. Within our Safety Services segment, our
mission revolves around safeguarding our customers    personnel, properties, and high-value possessions. This includes the
design, installation, servicing, and monitoring of fire detection and suppression systems, as well as security systems, catering
to various industries    needs and a diverse customer base. Additionally, our Specialty Services segment delivers specialized
industrial services. This includes the maintenance and repair of vital infrastructure elements encompassing underground
electric, gas, water, sewer, and telecommunications infrastructure.
We are committed to delivering on our long-term    13/60/80    shareholder value creation goals, which are: 13% or more
adjusted EBITDA margin in 2025, 60% of revenues from inspection, service, and monitoring, 80% average adjusted free cash
flow conversion, as well as our aspirational goals of becoming the #1 people-first company and #1 in business performance in
our industry.
What We Believe
We believe that great leaders are a competitive advantage and create shareholder value.
We believe
that everyone,
everywhere is
a leader.
3
We believe
everyone should
have the opportunity
to develop as a leader.
We believe
that we each own
our development.
We believe
that leaders
develop leaders.
We believe
that leadership is
the single biggest
differentiator
between average
and excellent.

2023 Annual Report
OUR
VALUES
Safety, health, and
well-being of all
our leaders
OUR
COMPANY
OUR 2023
PERFORMANCE
500+

Locations Worldwide
29K
5.6%
1
5.4%
Caring and
enduring relationships
with others

Honesty and integrity

Team Members
Provider of Life Safety Services
Excellence, nothing less
6.9B
Reported Net Revenues
100+
Acquisitions in Last 20 Years
Increase in Reported
Net Revenues
Increase in Net Revenues on
an Organic Basis1
153M

Reported Net Income
Joy in our work and
in each other
782M

Combining individual
company agilities
with large company
advantages
Adjusted EBITDA1
11.3%
Adjusted EBITDA Margin1
As of FY 2023
1
Refer to appendix for a reconciliation of non-GAAP measures to most directly comparable GAAP measures.
Our Central Premise
As Leaders, we recognize that our success happens only when our Branches and Field
Leaders are successful. All of our people are foundational to creating value.
1

APi Group
O
AT
I
ND
IN
G
G
IN
Our strategy of evolving away from lower margin, higher risk
opportunities while focusing investments on growing service revenue
continues to yield margin expansion and greater free cash flow
generation. We remain committed to that strategy with a long-term
goal of 60% of revenues coming from recurring inspection, service,
and monitoring, up from 52% in 2023. The inspection side of the
business has a flywheel effect through its ability to pull through service
revenues and allow our leaders to be more selective on project work,
both driving high incremental margins. As we supplement this with
tuck-in M&A, we believe we are well positioned to deliver outsized,
margin accretive growth for years to come.
GR
W
2023 was a year of record financial results for APi. We delivered
strong organic growth, record net revenues of ~$6.9 billion, record
gross profit and record adjusted EBITDA margins, and record adjusted
free cash flow generation in an evolving macro environment.
NG
I
D
ER
Dear fellow shareholders,
GEN
Solidifying our
Position as a
World Leader
in Life Safety &
Security
BU
IL
A Letter from our Co-Chairs
NG
P
EX
A
The foundation of our success centers around building great leaders
who build and reinforce an inclusive culture that is rooted in diversity
of thought, experience, and background. We are extremely proud
of the 29,000 leaders on our team and the energy and excellence
they have put forth this year. At APi, our belief is that our leaders
are the most important part of our company and the biggest asset
of the company. Our priority is keeping our leaders safe, providing
opportunities for them to learn, grow and contribute to not only APi
but the communities in which we operate. The team   s relentless
efforts on adhering to our strategy is driving margin expansion, and we
believe there is a long runway of continued margin expansion beyond
our established 2025 targets. Our leaders    passion and commitment
to our mission will help us execute against our long-term strategy and
deliver value to our shareholders.
The business has scaled from approximately $600 million in revenues
nearly 20 years ago to nearly $7 billion globally in 2023. As our
business is growing, it is evolving     to meet our customers    demands
and to remain at the cutting edge of innovation and service. We have
also seen an evolution in our investor base and are eager to deliver
for the new APi shareholders who have invested in the Company
over the past year. The value and long-term potential of this business
is palpable, and we believe our steadfast focus on our    13/60/80   
targets will yield exceptional performance over the near and long term.
Within the first few months of 2024, we completed a transaction with
preferred shareholders affiliated with Blackstone Tactical Opportunities
Fund (   Blackstone   ) and Viking Global Equities (   Viking   ) to retire all the
outstanding shares of their Series B Perpetual Convertible Preferred
Stock. This Series B transaction represents another step in our journey
2

2023 Annual Report
Shareholder Value Creation Model
We aspire to be the #1 people first company and #1 in business performance in our industry.
Building
Great Leaders
Growing
Revenue
Expanding
Margins
Generating
Free Cash Flow
    Teammate safety
and engagement
    Delivering long-term organic
revenue growth above
industry average
    13%+ Adjusted EBITDA
Margin by 2025
    Long-term target of 80%
adjusted free cash flow
conversion and net leverage
ratio of < 2.5x
    Everyone, everywhere
is a leader
    Best-in-class field leaders
and leadership development
    Go-to-market strategy of
selling inspections first
    Paying for performance
    Expanding share with new
and existing customers
    ESG & diversity, equity
    Expanding capabilities
and inclusion
and geographies
    Improving mix with long-term
target of 60%+ of revenue
from inspection, service and
monitoring
    Pricing initiatives
    Disciplined project and
customer selection
    Asset light, low capex
operating model
    Continuously pursuing
accretive M&A and
portfolio optimization
    Systems, scale, leverage and
operational excellence
    Procurement savings and
$125M value capture
    Strategic M&A
to drive value for investors by simplifying our capital structure, reducing
our adjusted diluted share count, and providing immediate accretion
to adjusted earnings per share, while having no expected impact on
our focus on opportunistic M&A. We would also like to extend our
appreciation to David Blitzer for his service as a Director on APi   s Board
as part of Blackstone   s investment. We look forward to his continued
partnership as a friend and supporter of the company.
alternatives including, but not limited to, accelerating the Company   s
tuck-in M&A strategy. Longer term, we remain focused on creating
sustainable shareholder value by delivering on our    13/60/80    targets,
with a near-term focus on generating adjusted EBITDA margins of 13%
or more in 2025.
Faithfully Yours,
We also continue to make significant strides in the Chubb integration.
Under our ownership, Chubb has grown organically every quarter. We
are bringing our inspection first mindset to the business and there is a
big opportunity in front of us. In December, we announced an increase
in the Chubb value capture target from $100 million to $125 million.
Exiting 2023, we have realized approximately $40 million of that $125
million target, and we remain on track to realize the remaining $85
million over the next few years.
Our accomplishments in 2023 reflect our ongoing progress towards
transforming our business. We have great confidence in the business,
our backlog, and our balance sheet. We delivered on our commitment
to reduce net leverage to under 2.5x by the end of 2023 and are well
positioned to continue improving free cash flow generation, providing
significant flexibility to pursue value creative capital allocation
Sir Martin E. Franklin
Co-Chair
James E. Lillie
Co-Chair
3



 4/29/2024 Letter Continued (Full PDF)